6-K - GIB - Equibles

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 OF

THE SECURITIES EXCHANGE ACT OF 1934

For the month of December 2021

Commission File Number 1-14858

CGI Inc.

(Translation ofRegistrant’s Name Into English)

1350 René-Lévesque Boulevard West

25th Floor

Montréal, Québec

Canada H3G 1T4

(Address of Principal Executive Offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F Form 40-F ✓

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ____

Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ____

Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.

Enclosures: 2021 Annual Report and Management Proxy Circular dated December 7, 2021.

This Form 6-K shall be deemed incorporated by reference in the Registrant’s Registration Statements on Form S-8, Reg. Nos. 333-197742 and 333-220741.

The following exhibits are filed herewith and incorporated herein:

Exhibit number Description

99.1	2021 Annual Report
99.2	Management Proxy Circular dated December 7, 2021

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		CGI INC.
		(Registrant)
	By:	/s/ Benoit Dubé
	Name:	Benoit Dubé
Date: December 17, 2021	Title:	Executive Vice-President,<br><br><br>Legal and Economic Affairs, and<br><br><br>Corporate Secretary

EX-99.1

Exhibit 99.1

LOGO

Management’s Discussion and Analysis

November 10, 2021

BASIS OF PRESENTATION

This Management’s Discussion and Analysis of the Financial Position and Results of Operations (MD&A) is the responsibility of management and has been reviewed and approved by the Board of Directors. This MD&A has been prepared in accordance with the requirements of the Canadian Securities Administrators. The Board of Directors is ultimately responsible for reviewing and approving the MD&A. The Board of Directors carries out this responsibility mainly through its Audit and Risk Management Committee, which is appointed by the Board of Directors and is comprised entirely of independent and financially literate directors.

Throughout this document, CGI Inc. is referred to as “CGI”, “we”, “us”, “our” or “Company”. This MD&A provides information management believes is relevant to an assessment and understanding of the consolidated results of operations and financial condition of the Company. This document should be read in conjunction with the audited consolidated financial statements and the notes thereto for the years ended September 30, 2021 and 2020. CGI’s accounting policies are in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (IFRS). All dollar amounts are in Canadian dollars unless otherwise noted.

MATERIALITY OF DISCLOSURES

This MD&A includes information we believe is material to investors. We consider something to be material if it results in, or would reasonably be expected to result in, a significant change in the market price or value of our shares, or if it is likely that a reasonable investor would consider the information to be important in making an investment decision.

FORWARD-LOOKING STATEMENTS

This MD&A contains “forward-looking information” within the meaning of Canadian securities laws and “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 and other applicable United States safe harbours. All such forward-looking information and statements are made and disclosed in reliance upon the safe harbour provisions of applicable Canadian and United States securities laws. Forward-looking information and statements include all information and statements regarding CGI’s intentions, plans, expectations, beliefs, objectives, future performance, and strategy, as well as any other information or statements that relate to future events or circumstances and which do not directly and exclusively relate to historical facts. Forward-looking information and statements often but not always use words such as “believe”, “estimate”, “expect”, “intend”, “anticipate”, “foresee”, “plan”, “predict”, “project”, “aim”, “seek”, “strive”, “potential”, “continue”, “target”, “may”, “might”, “could”, “should”, and similar expressions and variations thereof. These information and statements are based on our perception of historic trends, current conditions and expected future developments, as well as other assumptions, both general and specific, that we believe are appropriate in the circumstances. Such information and statements are, however, by their very nature, subject to inherent risks and uncertainties, of which many are beyond the control of the Company, and which give rise to the possibility that actual results could differ materially from our expectations expressed in, or implied by, such forward-looking information or forward-looking statements. These risks and uncertainties include but are not restricted to: risks related to the market such as the level of business activity of our clients, which is affected by economic and political conditions, other external risks (such as pandemics) and our ability to negotiate new contracts; risks related to our industry such as competition and our ability to attract and retain qualified employees, to develop and expand our services, to penetrate new markets, and to protect our intellectual property rights; risks related to our business such as risks associated with our growth strategy, including the integration of new operations, financial and operational risks inherent in worldwide operations, foreign exchange risks, income tax laws and other tax programs, our ability to negotiate favourable contractual terms, to deliver our services and to collect receivables, the reputational and financial risks attendant to cybersecurity breaches and other incidents, and financial risks such as liquidity needs and requirements, maintenance of financial ratios, and changes in creditworthiness and credit ratings; as well as other risks identified or incorporated by reference in this MD&A and in other

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MANAGEMENT’S DISCUSSION AND ANALYSIS

documents that we make public, including our filings with the Canadian Securities Administrators (on SEDAR at www.sedar.com) and the U.S. Securities and Exchange Commission (on EDGAR at www.sec.gov). For a discussion of risks in response to the coronavirus (COVID-19) pandemic, see Pandemic risks in section 10.1.1. of the present document. Unless otherwise stated, the forward-looking information and statements contained in this MD&A are made as of the date hereof and CGI disclaims any intention or obligation to publicly update or revise any forward-looking information or forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law. While we believe that our assumptions on which these forward-looking information and forward-looking statements are based were reasonable as at the date of this MD&A, readers are cautioned not to place undue reliance on these forward-looking information or statements. Furthermore, readers are reminded that forward-looking information and statements are presented for the sole purpose of assisting investors and others in understanding our objectives, strategic priorities and business outlook as well as our anticipated operating environment. Readers are cautioned that such information may not be appropriate for other purposes. Further information on the risks that could cause our actual results to differ significantly from our current expectations may be found in section 10 - Risk Environment, which is incorporated by reference in this cautionary statement. We also caution readers that the risks described in the previously mentioned section and in other sections of this MD&A are not the only ones that could affect us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial could also have a material adverse effect on our financial position, financial performance, cash flows, business or reputation.

NON-GAAP AND KEY PERFORMANCE MEASURES

The reader should note that the Company reports its financial results in accordance with IFRS. However, we use a combination of financial measures, ratios, and non-GAAP measures to assess the Company’s performance. The non-GAAP measures used in this MD&A do not have any standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other issuers. These measures should be considered as supplemental in nature and not as a substitute for the related financial information prepared in accordance with IFRS.

The table below summarizes our non-GAAP measures and most relevant key performance measures:

Profitability	Adjusted EBIT (non-GAAP)<br>– is a measure of earnings excluding acquisition-related and integration costs, restructuring costs, net finance costs and income tax expense. Management believes this measure is useful to investors as it best reflects the performance of the<br>Company’s activities and allows for better comparability from period to period as well as to trend analysis. A reconciliation of the adjusted EBIT to its closest IFRS measure can be found in section 3.7. of the present document.
	Adjusted EBIT margin(non-GAAP) – is obtained by dividing our adjusted EBIT by our revenue. Management believes this measure is useful to investors as it best reflects the performance of its activities and allows for<br>better comparability from period to period as well as to trend analysis. A reconciliation of the adjusted EBIT to its closest IFRS measure can be found in section 3.7. of the present document.
	Net earnings – is a measure of earnings generated for<br>shareholders.
	Net earnings margin(non-GAAP) – is obtained by dividing our net earnings by our revenues. Management believes a percentage of revenue measure is meaningful for better comparability from period to period.
	Diluted earnings per share (diluted EPS) – is a measure of net<br>earnings generated for shareholders on a per share basis, assuming all dilutive elements are exercised. Please refer to note 21 of our audited consolidated financial statements for additional information on earnings per share.
	Net earnings excluding specific items(non-GAAP) – is a measure of net earnings excluding acquisition-related and integration costs, restructuring costs and tax adjustments. Management believes this measure is useful to investors as it<br>best reflects the Company’s performance and allows for better comparability from period to period. A reconciliation of the net earnings excluding specific items to its closest IFRS measure can be found in section 3.8.3. of the present<br>document.
	Net earnings margin excluding specific items (non-GAAP) – is obtained by dividing our net earnings excluding acquisition-related and integration costs, restructuring costs and tax adjustments by our revenues. Management believes this measure is useful to<br>investors as it best reflects the Company’s performance and allows for better comparability from period to period. A reconciliation of the net earnings excluding specific items to its closest IFRS measure can be found in section 3.8.3. of the<br>present document.
	Diluted earnings per share excluding specific items (non-GAAP) – is defined as the net earnings excluding specific items on a per share basis. Management believes that this measure is useful to investors as it best reflects the Company’s performance on a<br>per share basis and allows for better comparability from period to period. The diluted earnings per share reported in accordance with IFRS can be found in section 3.8. of the present document while the basic and diluted earnings per share excluding<br>specific items can be found in section 3.8.3. of the present document.
	Effective tax rateexcluding specific items (non-GAAP) - is obtained by dividing income tax expense, excluding tax deductions on acquisition-related and integration costs and restructuring costs and tax adjustments, by<br>earnings before income taxes excluding specific items. Management believes that this measure allows for better comparability from period to period. A reconciliation of the effective tax rate excluding specific items to its closest IFRS measure can<br>be found in section 3.8.3. of the present document.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

Liquidity	Cash provided by operating activities– is a measure of cash generated from managing our day-to-day business operations. Management believes strong operating cash flow is indicative of financial flexibility, allowing us to execute the<br>Company’s strategy.
	Days sales outstanding (DSO)<br>(non-GAAP) – is the average number of days needed to convert our trade receivables and work in progress into cash. DSO is obtained by subtracting deferred revenue from trade accounts receivable and work<br>in progress; the result is divided by our most recent quarter’s revenue over 90 days. Management tracks this metric closely to ensure timely collection and healthy liquidity. Management believes this measure is useful to investors as it<br>demonstrates the Company’s ability to timely convert its trade receivables and work in progress into cash.
Growth	Constant currency growth (non-GAAP) – is a measure of revenue growth before foreign currency translation impacts. This growth is calculated by translating current period results in local currency using the conversion rates in the<br>equivalent period from the prior year. Management believes that it is helpful to adjust revenue to exclude the impact of currency fluctuations to facilitate<br>period-to-period comparisons of business performance and that this measure is useful to investors for the same reason.
	Backlog (non-GAAP) –<br>includes new contract wins, extensions and renewals (bookings (non-GAAP)), adjusted for the backlog consumed during the period as a result of client work performed, cancellation and the impact of foreign<br>currencies to our existing contracts. Bookings and backlog incorporate estimates from management that are subject to change. Management tracks this measure as it is a key indicator of our best estimate of contracted revenue to be realized in the<br>future and believes that this measure is useful to investors for the same reason.
	Book-to-bill ratio(non-GAAP) – is a measure of the proportion of the value of our bookings to our revenue in the period. This metric allows management to monitor the Company’s business development efforts to<br>ensure we grow our backlog and our business over time and management believes that this measure is useful to investors for the same reason. Management’s objective is to maintain a target ratio greater than 100% over a trailing twelve-month<br>period. Management believes that monitoring the Company’s bookings over a longer period is a more representative measure as the services and contract type, size and timing of bookings could cause this measurement to fluctuate significantly if<br>taken for only a three-month period.
CapitalStructure	Net debt(non-GAAP) – is obtained by subtracting from our debt and lease liabilities, our cash and cash equivalents, short-term investments, long-term investments and adjusting for fair value of foreign<br>currency derivative financial instruments related to debt. Management uses the net debt metric to monitor the Company’s financial leverage and believes that this metric is useful to investors as it provides insight into its financial strength.<br>A reconciliation of net debt to its closest IFRS measure can be found in section 4.5. of the present document.
	Net debt to capitalization ratio(non-GAAP) – is a measure of our level of financial leverage and is obtained by dividing the net debt by the sum of shareholder’s equity and net debt. Management uses the net debt to<br>capitalization ratio to monitor the proportion of debt versus capital used to finance the Company’s operations and to assess its financial strength. Management believes that this metric is useful to investors for the same reasons.
	Return on equity (ROE)<br>(non-GAAP) – is a measure of the rate of return on the ownership interest of our shareholders and is calculated as the proportion of net earnings for the last 12 months over the last four quarters’<br>average shareholder’s equity. Management looks at ROE to measure its efficiency at generating net earnings for the Company’s shareholders and how well the Company uses the invested funds to generate net earnings growth and believes that<br>this measure is useful to investors for the same reasons.
	Return on invested capital (ROIC) (non-GAAP) – is a measure of the Company’s efficiency at allocating the capital under its control to profitable investments and is calculated as the proportion of the net earnings excluding net finance<br>costs after-tax for the last 12 months, over the last four quarters’ average invested capital, which is defined as the sum of shareholder’s’ equity and net debt. Management examines this ratio<br>to assess how well it is using its funds to generate returns and believes that this measure is useful to investors for the same reason.

REPORTING SEGMENTS

The Company is managed through nine operating segments, namely: Western and Southern Europe (primarily France and Portugal); United States (U.S.) Commercial and State Government; Canada; U.S. Federal; United Kingdom (U.K.) and Australia; Central and Eastern Europe (primarily Germany and the Netherlands); Scandinavia; Finland, Poland and Baltics; and Asia Pacific Global Delivery Centers of Excellence (mainly India and Philippines) (Asia Pacific). Please refer to sections 3.4., 3.6., 5.4. and 5.5. of the present document and to note 28 of our audited consolidated financial statements for additional information on our segments.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

MD&A OBJECTIVES AND CONTENTS

In this document, we:

•	Provide a narrative explanation of the audited consolidated financial statements through the eyes of management;<br>
•	Provide the context within which the audited consolidated financial statements should be analyzed, by giving enhanced<br>disclosure about the dynamics and trends of the Company’s business; and
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•	Provide information to assist the reader in ascertaining the likelihood that past performance may be indicative of future<br>performance.
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In order to achieve these objectives, this MD&A is presented in the following main sections:

Section		Contents		Pages
1.	Corporate<br><br><br>Overview	1.1.	About CGI	8
		1.2.	Vision and Strategy	9
		1.3.	Competitive Environment	11
2.	Yearly Overview	2.1.	Selected Yearly Information & Key Performance Measures	12
		2.2.	Stock Performance	13
		2.3.	COVID-19	14
		2.4.	Investments in Subsidiaries	15
		2.5.	Issuer Credit Rating and Notes Issuance	15
		2.6.	Subsequent Events	16
3.	Financial Review	3.1.	Bookings and Book-to-Bill Ratio	17
		3.2.	Foreign Exchange	18
		3.3.	Revenue Distribution	19
		3.4.	Revenue by Segment	20
		3.5.	Operating Expenses	24
		3.6.	Adjusted EBIT by Segment	25
		3.7.	Earnings Before Income Taxes	27
		3.8.	Net Earnings and Earnings Per Share	28
4.	Liquidity	4.1.	Consolidated Statements of Cash Flows	30
		4.2.	Capital Resources	32
		4.3.	Contractual Obligations	33
		4.4.	Financial Instruments and Hedging Transactions	33
		4.5.	Selected Measures of Capital Resources and Liquidity	34
		4.6.	Guarantees	35
		4.7.	Capability to Deliver Results	35

**<br><br><br>Section**		Contents		Pages
5.	Fourth Quarter<br><br><br>Results	5.1.	Bookings and Book-to-Bill Ratio	36
		5.2.	Foreign Exchange	37
		5.3.	Revenue Distribution	38
		5.4.	Revenue by Segment	39
		5.5.	Adjusted EBIT by Segment	42
		5.6.	Net Earnings and Earnings Per Share	44
		5.7.	Consolidated Statements of Cash Flows	46
6.	Eight Quarter Summary	A summary of the past eight quarters’ key performance measures and a<br>discussion of the factors that could impact our quarterly results.		48
7.	Changes in Accounting Policies	A summary of the accounting standard changes.		50
8.	Critical Accounting Estimates	A discussion of the critical accounting estimates made in the preparation of<br>the audited consolidated financial statements.		52
9.	Integrity of Disclosure	A discussion of the existence of appropriate information systems, procedures and<br>controls to ensure that information used internally and disclosed externally is complete and reliable.		55
10.	Risk	10.1.	Risks and Uncertainties	57
	Environment	10.2.	Legal Proceedings	69

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MANAGEMENT’S DISCUSSION AND ANALYSIS

1.	Corporate Overview

1.1. ABOUT CGI

Founded in 1976 and headquartered in Montréal, Canada, CGI is among the largest information technology (IT) and business consulting services firms in the world. The Company delivers a full range of services, including business consulting, strategic IT and systems integration, managed IT and business process services, and intellectual property to help clients accelerate digitization, achieve immediate cost savings, and drive revenue growth. CGI employs approximately 80,000 consultants and professionals worldwide, whom are called members as they are also owners through our Share Purchase Plan.

End-to-end services and solutions

CGI delivers end-to-end services that cover the full spectrum of technology delivery; from digital strategy and architecture to solution design, development, integration, implementation, and operations. Our portfolio encompasses:

i.	Business consulting, strategic IT consulting and systems integration: CGI helps clients define their<br>digital strategy and roadmap, and advance their IT modernization initiatives through an agile, iterative approach that facilitates innovation, connection and optimization of mission-critical systems to deliver enterprise-wide changes.<br>
ii.	Managed IT and business process services: Our clients entrust us with full or partial responsibility for<br>their IT and business functions to help them become more agile and to build resilience into their technology supply chains. In return, we deliver innovation, significant efficiency gains, and cost savings. Typical services in an end-to-end engagement include: application development, integration and maintenance; technology infrastructure management; and business process services, such as collections<br>and payroll management. Managed IT and business process services contracts are long-term in nature, with a typical duration greater than five years, allowing our clients to reinvest savings, alongside CGI, in their digital transformation.<br>
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iii.	Intellectual property (IP): Designed in collaboration with clients, our IP solutions act as business<br>accelerators for the industries we serve. These include business solutions, some of which are cross industry, encompassing commercial software embedded within our end-to-end-services, and digital enablers such as methodologies and frameworks to drive change across business and IT processes. IP solutions are embedded within Business consulting, strategic IT<br>consulting and systems integration, as well as within Managed IT and business process services.
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Deep industry expertise

CGI has long-standing and focused practices in all of its core industries, providing clients with a partner that is not only an expert in IT, but also an expert in their respective industries. This combination of business knowledge and digital technology expertise allows us to help our clients navigate complex challenges and focus on how to create value. In the process, we evolve the services and solutions we deliver within our targeted industries.

Our targeted industries include communications and media, energy and utilities, banking, insurance, government and space, health and life sciences, manufacturing, retail and consumer, transportation and logistics. While these represent our go-to-market industry targets, we group these industries into the following for reporting purposes: communications and utilities; financial services; government; health; and manufacturing retail and distribution (MRD).

As the move toward digitization continues across industries, CGI partners with clients to help guide them in becoming customer and citizen-centric digital organizations.

Applied innovation

At CGI, innovation happens across many interconnected fronts. It starts in our everyday work on client projects, where innovations are applied daily. Through benchmark in-person interviews we conduct each year, business and technology executives share their priorities with us, informing our own innovation investments and driving our client proximity teams’ focus on local client priorities.

Since 1976, CGI has been a trusted partner in delivering innovative, client-inspired business services and solutions. We help develop, innovate and protect the technology that enables clients to achieve their digital transformation goals faster, with reduced risk and enduring results.

We partner with clients to enable their business agility through a range of business and digital initiatives focused on human capital and culture practices, process automation, and data analytics. Technology is a key element of the value chains of organizations today. We help clients adopt and harmonize a number of technologies and services, such as cloud, automation, and managed services to build agility, elasticity, security and resiliency into their technology supply chains.

Digital engagement with customers and stakeholders has taken on new importance. We help clients evaluate their work culture, organizational models, and performance management, as well as adopt modern collaboration and resilient business continuity plans.

Technology will continue to be at the heart of the future value chains that serve our clients’ consumers and stakeholders.

Quality processes

CGI’s clients expect consistency of service wherever and whenever they engage us. We have an outstanding track record of on-time, within-budget delivery as a result of our commitment to excellence and our robust governance model - CGI’s Management Foundation. CGI’s Management Foundation provides a common business language, frameworks and practices for managing operations consistently across the globe, driving a focus on continuous improvement. We also invest in rigorous quality and service delivery standards (including the International Organization for Standardization (ISO) and Capability Maturity Model Integration (CMMI) certification programs), as well as a comprehensive Client Satisfaction Assessment Program, with signed client assessments, to ensure high satisfaction on an ongoing basis.

1.2. VISION AND STRATEGY

CGI is unique compared to most companies, as our vision is based on a dream: “To create an environment in which we enjoy working together and, as owners, contribute to building a company we can be proud of.” This dream has motivated us since our founding in 1976 and drives our vision: “To be a global, world-class end-to-end IT and business consulting services leader helping our clients succeed.”

In pursuing our dream and vision, CGI has been highly disciplined throughout its history in executing a Build and Buy profitable growth strategy comprised of four pillars that combine profitable organic growth (Build) and accretive acquisitions (Buy): ****

**Pillar 1:**Win, renew and extend contracts ****

Pillar 2: New large managed IT and business process services contracts

These first two pillars relate to driving profitable organic growth through the pursuit of contracts with new and existing clients in our targeted industries. Successes in these pillars reflect the strength of our end-to-end portfolio of capabilities, the depth of expertise of our consultants in business and IT, and the appreciation of the proximity model by our clients, both existing and potential.

Pillar 3: Metro market acquisitions

The third pillar focuses on growth through metro market acquisitions, complementing the proximity model, helping provide a fuller range of end-to-end services. We identify metro market acquisitions through a strategic qualification process that systematically searches for targets to strengthen our proximity model, leveraging strong local relationships with customers, and enhancing our industry expertise, services and solutions.

Pillar 4: Large, transformational acquisitions

We also pursue large acquisitions to further expand our geographic presence and critical mass, which enables us to compete for large managed IT and business process services contracts and broaden our client relationships. CGI will continue to be a consolidator in the IT services industry by being active on both of these last pillars.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

Executing our strategy

CGI’s strategy is executed through a unique business model that combines client proximity with an extensive global delivery network to deliver the following benefits:

• Local relationships and accountability: We live and work near our clients to provide a high level of responsiveness, partnership, and innovation. Our local CGI members speak our clients’ language, understand their business environment, and collaborate to meet their goals and advance their business.

• Global reach: Our local presence is complemented by an expansive global delivery network that ensures our clients have 24/7 access to best-fit digital capabilities and resources to meet their end-to-end needs. In addition, clients benefit from our unique combination of industry domain and technology expertise within our global delivery model.

• Committedexperts: One of our key strategic goals is to be our clients’ partner and expert of choice. To achieve this, we invest in developing and recruiting professionals with extensive industry, business and in-demand technology expertise. In addition, a majority of CGI consultants and professionals are also owners through our Share Purchase Plan, which, combined with the Profit Participation Plan, provide an added level of commitment to the success of our clients.

• Comprehensive quality processes: CGI’s investment in quality frameworks and rigorous client satisfaction assessments has resulted in a consistent track record of on-time and within-budget project delivery. With regular reviews of engagements and transparency at all levels, the Company ensures that client objectives and its own quality objectives are consistently followed at all times. This thorough process enables CGI to generate continuous improvements for all stakeholders by applying corrective measures as soon as they are required.

• Corporate social responsibility: At CGI, we are committed to contributing to the development of an inclusive, collaborative and sustainable world. Corporate social responsibility (CSR) is one of our long-held core values and one of our strategic goals is to be recognized by our clients, members and shareholders as an engaged and responsible corporate citizen within our communities. In 2021, we accelerated our Corporate Social Responsibility engagement through various key initiatives, including the release of our global CSR report, and by committing to achieve net-zero carbon emissions by 2030.

1.3. COMPETITIVE ENVIRONMENT

In today’s digital era, there is a competitive urgency for organizations across industries to become digital in a sustainable way. The pressure is on to modernize legacy assets and connect them to digital business and operating models. Central to this massive transformation is the evolving role of technology. Traditionally viewed as an enabler, technology is now recognized also as a driver of business transformation. The promise of digital creates an enormous opportunity to transform organizations end-to-end, and CGI is well-positioned to serve as a digital partner and expert of choice. We are working with clients across the globe to implement digital strategies, roadmaps and solutions that revolutionize their customer/citizen experience, drive the launch of new products and services, and deliver efficiencies and cost savings.

As the demand for digitalization increases, competition within the global IT industry is intensifying. CGI’s competition is comprised of a variety of players, from metro market companies providing specialized services and software, to global end-to-end IT service providers, to large consulting firms and government pure-plays. All of these players are competing to deliver some or all of the services we provide.

Many factors distinguish the industry leaders, including the following:

• Depth and breadth of industry and technology expertise;

• Local presence and strength of client relationships;

• Consistent, on-time, within-budget delivery everywhere the client operates;

• Breadth of digital IP solutions;

• Ability to deliver practical innovation for measurable results;

• Total cost of services and value delivered; and

• Unique global delivery network, including onshore, nearshore and offshore options.

CGI is one of the leaders in the industry with respect to all of these factors. We are not only delivering all of the capabilities clients need to compete in a digital world, but the immediate results and long-term value they expect. As the market dynamics and industry trends continue to increase demand for enterprise solutions from global, end-to-end IT and business consulting services firms, CGI is one of few firms with the scale, reach, and capabilities to meet clients’ enterprise needs.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

2.	Highlights and Key Performance Measures

2.1. SELECTED YEARLY INFORMATION & KEY PERFORMANCE MEASURES

As at and for the years endedSeptember 30,	2021	2020	2019	Change<br><br><br>2021 / 2020	Change 2020 / 2019
In millions of CAD unless otherwise noted
Growth
Revenue	12,126.8	12,164.1	12,111.2	(37.3)	52.9
Year-over-year revenue growth	(0.3%)	0.4%	5.3%	(0.7%)	(4.9%)
Constant currency year-over-year revenue growth	1.1%	(0.1%)	5.9%	1.2%	(6.0%)
Backlog	23,059	22,673	22,611	386	62
Bookings	13,843	11,848	12,646	1,995	(798)
Book-to-bill ratio	114.2%	97.4%	104.4%	16.8%	(7.0%)
Profitability^1^
Adjusted EBIT^2^	1,952.2	1,862.9	1,825.0	89.3	37.9
Adjusted EBIT margin	16.1%	15.3%	15.1%	0.8%	0.2%
Net earnings	1,369.1	1,117.9	1,263.2	251.2	(145.3)
Netearnings margin	11.3%	9.2%	10.4%	2.1%	(1.2%)
Diluted EPS (in dollars)	5.41	4.20	4.55	1.21	(0.35)
Net earnings excluding specific items^2^	1,374.9	1,300.1	1,305.9	74.8	(5.8)
Netearnings margin excluding specific items	11.3%	10.7%	10.8%	0.6%	(0.1%)
Diluted EPS excluding specific items (in dollars)^2^	5.43	4.89	4.70	0.54	0.19
Liquidity^1^
Cash provided by operating activities	2,115.9	1,938.6	1,633.9	177.3	304.7
As a %of revenue	17.4%	15.9%	13.5%	1.5%	2.4%
Days sales outstanding	45	47	50	(2)	(3)
Capital structure^1^
Net debt	2,535.9	2,777.9	2,117.2	(242.0)	660.7
Net debt to capitalization ratio	26.6%	27.7%	23.5%	(1.1%)	4.2%
Return on equity	19.8%	16.0%	18.5%	3.8%	(2.5%)
Return on invested capital	14.9%	12.1%	15.1%	2.8%	(3.0%)
Balance sheet^1^
Cash and cash equivalents, and short-term investments	1,700.2	1,709.5	223.7	(9.3)	1,485.8
Total assets	15,021.0	15,550.4	12,621.7	(529.4)	2,928.7
Long-term financial liabilities^3^	3,659.8	4,030.6	2,236.0	(370.8)	1,794.6
^1^	As at and for the years ended September 30, 2021 and 2020, figures include the impact of the adoption of IFRS 16,<br>while 2019 was not restated. Please refer to note 3 of our audited consolidated financial statements for additional information on IFRS 16.
---	---
^2^	Please refer to sections 3.7. and 3.8.3. of the respective Fiscal years’ MD&A for the reconciliation of non-GAAP financial measures.
---	---
^3^	Long-term financial liabilities include the long-term portion of the debt, long-term portion of lease liabilities and the<br>long-term derivative financial instruments.
---	---

2.2. STOCK PERFORMANCE

CGI Stock Price (TSX) for the Last Twelve Months

LOGO

2.2.1. Fiscal 2021 Trading Summary

CGI’s shares are listed on the Toronto Stock Exchange (TSX) (stock quote – GIB.A) and the New York Stock Exchange (NYSE) (stock quote – GIB) and are included in key indices such as the S&P/TSX 60 Index.

TSX	(CAD)	NYSE	(USD)
Open:	90.29	Open:	67.91
High:	116.88	High:	93.06
Low:	80.29	Low:	60.58
Close:	107.59	Close:	84.76
CDN average daily trading volumes^1^:	720,936	NYSE average daily trading volumes:	145,350
^1^	Includes the average daily volumes of both the TSX and alternative trading systems.
---	---

FISCAL 2021 RESULTS – 13

MANAGEMENT’S DISCUSSION AND ANALYSIS

2.2.2. Normal Course Issuer Bid (NCIB)

On January 26, 2021, the Company’s Board of Directors authorized and subsequently received regulatory approval from the TSX for the renewal of CGI’s NCIB which allows for the purchase for cancellation of up to 19,184,831 Class A subordinate voting shares (Class A Shares) representing 10% of the Company’s public float as of the close of business on January 22, 2021. Class A Shares may be purchased for cancellation under the NCIB commencing on February 6, 2021 until no later than February 5, 2022, or on such earlier date when the Company has either acquired the maximum number of Class A Shares allowable under the NCIB or elects to terminate the bid.

During the year ended September 30, 2021, the Company purchased for cancellation 15,460,465 Class A Shares for $1,519.2 million at a weighted average price of $98.27 under the previous and current NCIB. The purchased shares included 4,204,865 Class A Shares purchased for cancellation from Caisse de dépôt et placement du Québec for cash consideration of $400.0 million. The purchase was made pursuant to an exemption order issued by the Autorité des marchés financiers and is considered within the annual aggregate limit that the Company is entitled to purchase under its current NCIB.

As at September 30, 2021, of the 15,460,465 Class A Shares purchased for cancellation, 150,000 Class A Shares remain unpaid for $16.4 million.

As at September 30, 2021, the Company could purchase up to 9,977,266 Class A Shares for cancellation under the current NCIB.

2.2.3. Capital Stock and Options Outstanding

The following table provides a summary of the Capital Stock and Options Outstanding as at November 5, 2021:

Capital Stock and Options Outstanding	As at November 5, 2021
Class A subordinate voting shares	218,675,972
Class B multiple voting shares	26,445,706
Options to purchase Class A subordinate voting shares	7,941,847

2.3. COVID-19

Our executive crisis management team and our network of local crisis management teams continue to closely monitor the evolving COVID-19 pandemic, executing on our business continuity plan and working collaboratively with our clients. We have established key guidelines and procedures related to security and access controls, member health screening, member isolation and quarantine, and facility infrastructure, maintenance and cleaning, to ensure that our workplace practices are in line with local government recommendations and requirements, as well as compliant with the appropriate standards of safety, health, wellness and required workplace readiness certifications. We continue to monitor key suppliers to prevent service disruptions or significant impacts in the delivery of services or goods from our suppliers.

To address issues associated with a significant number of our members working remotely, we bolstered perimeter defense with advanced cyber threat monitoring, data encryption, remote access technologies and timely system patching. Additionally, we are providing training and education so that members understand our “Securely working from home guidance”, and are taking precautionary measures to protect CGI and our client’s assets.

We will continue to monitor government and industry guidelines for bringing members back into their offices, providing secure and safe working environments, flexibility and collaboration enabled by technology, with a managed mix of in-office and remote work where necessary.

Our highest priority remains the health and safety of our members and providing service continuity for our clients. CGI’s proximity-based business model, robust internal infrastructure and strong balance sheet and liquidity position (refer to section 4.2. of the present document for further details) limited the impact of confinement measures imposed in several

countries and assured the continuity of our services to our clients while allowing the majority of our members to work remotely.

2.4. INVESTMENT IN SUBSIDIARIES

On December 31, 2020, the Company acquired the assets of Harris, Mackessy & Brennan, Inc.’s (HMB) Professional Services Division, a division focused on high-end technology consulting and services for commercial and government clients, based in the United States and headquartered in Columbus, Ohio. The acquisition added approximately 165 professionals to the Company.

On May 3, 2021, the Company acquired Sense Corp, a professional services firm focused on digital systems integration and consulting for state and local government and commercial clients, based in the United States and headquartered in St. Louis, Missouri. The acquisition added approximately 300 professionals to the Company.

The Company completed these acquisitions for a total purchase price of $111.5 million.

2.5. ISSUER CREDIT RATING AND NOTES ISSUANCE

During the year ended September 30, 2021, both S&P Global Ratings (“S&P”) and Moody’s Investor Services (“Moody’s”) assigned long-term credit ratings to CGI :

Rating Agency	Long-Term Credit Ratings ^1,2^	Outlook
Moody’s	Baa1	Stable
S&P	BBB+	Stable
^1^	As at September 30, 2021
---	---
^2^	These credit ratings are not recommendations to buy, sell or hold any of the securities referred to, and they may be<br>revised or withdrawn at any time by the assigning rating agency. Ratings are determined by the rating agencies based on criteria established from time to time by them, and they do not comment on market price or suitability for a particular investor.<br>
---	---

Issuance of senior unsecured notes

On September 14, 2021, we issued US$1.0 billion in aggregate principal amount of senior unsecured notes and on September 16, 2021, we issued $600 million in aggregate principal amount of senior unsecured notes, with the details below:

	NotionalAmount	Maturity	Coupon Rate
2021 5-year USD Senior Notes^1^	US $600.0 million	September 14, 2026	1.45%
2021 10-year USD Senior Notes^1^	US $400.0 million	September 14, 2031	2.30%
2021 7-year CAD Senior Notes^2^	$600.0 million	September 18, 2028	2.10%
^1^	Interest payable semi-annually on March 14 and on September 14 until maturity
---	---
^2^	Interest payable semi-annually on March 18 and on September 18 until maturity
---	---

The aggregate net proceeds of the issuances, which were $1,847.3 million, were mainly used to repay in full the amended and restated unsecured committed term loan credit facility entered into in April 2020 (the 2020 Term Loan) in an amount of $1,583.5 million (US$1,250.0 million), and to make scheduled repayments of senior unsecured notes in the amount of $259.7 million.

FISCAL 2021 RESULTS – 15

MANAGEMENT’S DISCUSSION AND ANALYSIS

2.6. SUBSEQUENT EVENTS

On October 1, 2021, the Company acquired Array Holding Company, Inc. a leading digital services provider that optimizes mission performance for the U.S. Department of Defense and other government organizations, based in the United States and headquartered in Greenbelt, Maryland. The acquisition added approximately 275 professionals to the Company.

On October 28, 2021, the Company acquired Cognicase Management Consulting, a leading provider of technology and management consulting services and solutions for over 25 years, primarily in the Spanish market, headquartered in Madrid, Spain. The acquisition added approximately 1,500 professionals to the Company.

The Company completed these acquisitions for a total purchase price of $156.4 million.

3.	Financial Review

3.1. BOOKINGS AND BOOK-TO-BILL RATIO

Bookings for the year were $13.8 billion representing a book-to-bill ratio of 114.2%. The breakdown of the new bookings signed during the year is as follows:

	Contract Type			Service Type			Segment			Vertical Market
A.	Extensions, renewals and add-ons	68%	A.	Managed IT and Business Process Services	57 %	A.	Western and Southern Europe	17%	A.	Government	36%
B.	New business	32%	B.	Business consulting, strategic IT consulting and systems integration	43 %	B.	Canada	17%	B.	MRD	24%
						C.	U.S. Commercial and State Government	16%	C.	Financial Services	21%
						D.	U.K. and Australia	13%	D.	Communications & utilities	14%
						E.	Central and Eastern Europe	12%	E.	Health	5%
						F.	U.S. Federal	11%
						G	Finland, Poland and Baltics	7%
						H.	Scandinavia	7%

Information regarding our bookings is a key indicator of the volume of our business over time. However, due to the timing and transition period associated with managed IT and business process services contracts, the realization of revenue related to these bookings may fluctuate from period to period. The values initially booked may change over time due to their variable attributes, including demand-driven usage, modifications in the scope of work to be performed caused by changes in client requirements as well as termination clauses at the option of the client. As such, information regarding our bookings is not comparable to, nor should it be substituted for, an analysis of our revenue. Management however believes that it is a key indicator of potential future revenue.

The following table provides a summary of the bookings and book-to-bill ratio by segment:

In thousands of CAD except for percentages	Bookings for the year endedSeptember 30, 2021		Book-to-bill ratio for the year endedSeptember 30, 2021
Total CGI	****	13,842,948	****	114.2 %
Western and Southern Europe	****	2,353,414	****	120.5 %
U.S. Commercial and State Government	****	2,250,655	****	119.0 %
Canada	****	2,305,163	****	121.0 %
U.S. Federal	****	1,449,591	****	89.5 %
U.K. and Australia	****	1,837,174	****	118.2 %
Central and Eastern Europe	****	1,679,855	****	125.6 %
Scandinavia	****	983,344	****	91.7 %
Finland, Poland and Baltics	****	983,752	****	124.1 %

FISCAL 2021 RESULTS – 17

MANAGEMENT’S DISCUSSION AND ANALYSIS

3.2. FOREIGN EXCHANGE

The Company operates globally and is exposed to changes in foreign currency rates. Accordingly, as prescribed by IFRS, we value assets, liabilities and transactions that are measured in foreign currencies using various exchange rates. We report all dollar amounts in Canadian dollars.

Closingforeign exchange rates

As atSeptember 30,	2021		2020		Change
U.S. dollar	****	1.2676	****	1.3325	(4.9%)
Euro	****	1.4678	****	1.5622	(6.0%)
Indian rupee	****	0.0171	****	0.0181	(5.5%)
British pound	****	1.7075	****	1.7216	(0.8%)
Swedish krona	****	0.1447	****	0.1487	(2.7%)

Average foreign exchange rates

For the year endedSeptember 30,	2021		2020		Change
U.S. dollar	****	1.2643	****	1.3457	(6.0%)
Euro	****	1.5110	****	1.5075	0.2%
Indian rupee	****	0.0172	****	0.0183	(6.0%)
British pound	****	1.7302	****	1.7152	0.9%
Swedish krona	****	0.1484	****	0.1425	4.1%

3.3. REVENUE DISTRIBUTION

The following charts provide additional information regarding our revenue mix for the year:

	Service Type			Client Geography			Vertical Market
A.	Managed IT and Business Process Services	55 %	A.	U.S.	29 %	A.	Government	34 %
B.	Business consulting, strategic IT consulting and systems integration	45 %	B.	Canada	16 %	B.	MRD	24 %
			C.	France	14 %	C.	Financial services	22 %
			D.	U.K.	12 %	D.	Communications & utilities	14 %
			E.	Germany	7 %	E.	Health	6 %
			F.	Sweden	7 %
			G.	Finland	6 %
			H.	Rest of the world	9 %

3.3.1. Client Concentration

IFRS guidance on segment disclosures defines a single customer as a group of entities that are known to the reporting entity to be under common control. As a consequence, our work for the U.S. federal government including its various agencies represented 12.8% of our revenue for Fiscal 2021 as compared to 13.8% for Fiscal 2020.

FISCAL 2021 RESULTS – 19

MANAGEMENT’S DISCUSSION AND ANALYSIS

3.4. REVENUE BY SEGMENT

Our segments are reported based on where the client’s work is delivered from within our geographic delivery model.

The table below provides a summary of the year-over-year changes in our revenue, in total and by segment before eliminations, separately showing the impacts of foreign currency exchange rate variations between Fiscal 2021 and Fiscal 2020. The Fiscal 2020 revenue by segment was recorded reflecting the actual foreign exchange rates for that period. The foreign exchange impact is the difference between the current period’s actual results and the same period’s results converted with the prior year’s foreign exchange rates.


For the year ended September 30,
	2021			2020			%
In thousands of CAD except for percentages
Total CGI revenue	****	12,126,793	****	****	12,164,115	)	****	(0.3%	)
Variation prior to foreign currency impact	****	1.1	%
Foreign currency impact	****	(1.4	%)
Variation over previous period	****	(0.3	%)
Western and Southern Europe
Revenue prior to foreign currency impact	****	1,958,723	****		1,911,477		****	2.5%	****
Foreign currency impact	****	5,068	****
Western and Southern Europe revenue	****	1,963,791	****		1,911,477		****	2.7%	****
U.S. Commercial and State Government
Revenue prior to foreign currency impact	****	1,914,878	****		1,863,467		****	2.8%	****
Foreign currency impact	****	(114,131	)
U.S. Commercial and State Government revenue	****	1,800,747	****		1,863,467	)	****	(3.4%	)
Canada
Revenue prior to foreign currency impact	****	1,755,048	****		1,686,269		****	4.1%	****
Foreign currency impact	****	756	****
Canada revenue	****	1,755,804	****		1,686,269		****	4.1%	****
U.S. Federal
Revenue prior to foreign currency impact	****	1,710,599	****		1,712,244	)	****	(0.1%	)
Foreign currency impact	****	(103,168	)
U.S. Federal revenue	****	1,607,431	****		1,712,244	)	****	(6.1%	)
U.K. and Australia
Revenue prior to foreign currency impact	****	1,342,125	****		1,358,469	)	****	(1.2%	)
Foreign currency impact	****	13,478	****
U.K. and Australia revenue	****	1,355,603	****		1,358,469	)	****	(0.2%	)
Central and Eastern Europe
Revenue prior to foreign currency impact	****	1,300,120	****		1,212,196		****	7.3%	****
Foreign currency impact	****	3,797	****
Central and Eastern Europe revenue	****	1,303,917	****		1,212,196		****	7.6%	****
Scandinavia
Revenue prior to foreign currency impact	****	989,023	****		1,104,121	)	****	(10.4%	)
Foreign currency impact	****	38,879	****
Scandinavia revenue	****	1,027,902	****		1,104,121	)	****	(6.9%	)

All values are in US Dollars.


For the year ended September 30,
	2021			2020				%
In thousands of CAD except for percentages
Finland, Poland and Baltics
Revenue prior to foreign currency impact	****	765,884	****		777,152		)	****	(1.4%	)
Foreign currency impact	****	3,110	****
Finland, Poland &Baltics revenue	****	768,994	****		777,152		)	****	(1.0%	)
Asia Pacific
Revenue prior to foreign currency impact	****	721,655	****		674,946			****	6.9%	****
Foreign currency impact	****	(41,101	)
Asia Pacificrevenue	****	680,554	****		674,946			****	0.8%	****
Eliminations	****	(137,950	)		(136,226	)	)	****	1.3%	****

All values are in US Dollars.

For the year ended September 30, 2021, revenue was $12,126.8 million, a decrease of $37.3 million, or 0.3% over the same period last year. On a constant currency basis, revenue increased by $132.1 million or 1.1%. The increase was mainly due to growth within the government, financial services and communications & utilities vertical markets, mainly driven by the Central and Eastern Europe, Canada and Western and Southern Europe segments, as well as recent business acquisitions. This was partially offset by the impact of COVID-19 in the first half of Fiscal 2021, mainly affecting the MRD vertical market.

3.4.1. Western and Southern Europe

For the year ended September 30, 2021, revenue in our Western and Southern Europe segment was $1,963.8 million, an increase of $52.3 million or 2.7% over the same period last year. On a constant currency basis, revenue increased by $47.2 million or 2.5%. The increase in revenue was driven by growth within the government and financial services vertical markets, as well as the prior year’s acquisition. This was partially offset by the impact of COVID-19 in the first half of Fiscal 2021, mainly affecting the MRD and communications & utilities vertical markets.

On a client geographic basis, the top two Western and Southern Europe vertical markets were MRD and financial services, generating combined revenues of approximately $1,189 million for year ended September 30, 2021.

3.4.2. U.S. Commercial and State Government

For the year ended September 30, 2021, revenue in our U.S. Commercial and State Government segment was $1,800.7 million, a decrease of $62.7 million or 3.4% over the same period last year. On a constant currency basis, revenue increased by $51.4 million or 2.8%. The increase was due to recent acquisitions, as well as higher work volumes within the financial services vertical market. This was in part offset by lower work volume in the state and local government market, including adjustments due to a reevaluation of cost to complete on a project.

On a client geographic basis, the top two U.S. Commercial and State Government vertical markets were financial services and government, generating combined revenues of approximately $1,113 million for the year ended September 30, 2021.

FISCAL 2021 RESULTS – 21

MANAGEMENT’S DISCUSSION AND ANALYSIS

3.4.3. Canada

For the year ended September 30, 2021, revenue in our Canada segment was $1,755.8 million, an increase of $69.5 million or 4.1% compared to the same period last year. On a constant currency basis, revenue increased by $68.8 million or 4.1%. The increase was mainly due to growth within the financial services, communications & utilities and MRD vertical markets. This was in part offset by a higher proportion of client projects delivered by our global delivery centers of excellence in Asia-Pacific (see section 3.4.9. of the present document).

On a client geographic basis, the top two Canada vertical markets were financial services and communications & utilities, generating combined revenues of approximately $1,207 million for the year ended September 30, 2021.

3.4.4. U.S. Federal

For the year ended September 30, 2021, revenue in our U.S. Federal segment was $1,607.4 million, a decrease of $104.8 million or 6.1% over the same period last year. On a constant currency basis, revenue decreased by $1.6 million or 0.1%. The change was driven by lower transaction volumes from our travel related IP business process services, mainly due to the impact of COVID-19, and a decrease in project related equipment sales. This was partially offset by higher work volumes in application support and cybersecurity services, as well as the prior year’s acquisition.

For the year ended September 30, 2021, 87% of revenues within the U.S. Federal segment were federal civilian based.

3.4.5. U.K. and Australia

For the year ended September 30, 2021, revenue in our U.K. and Australia segment was $1,355.6 million, a decrease of $2.9 million or 0.2% over the same period last year. On a constant currency basis, revenue decreased by $16.3 million or 1.2%. The change was mainly due to the successful completion of projects within the communications & utilities vertical market, in part offset by growth within the government vertical market.

On a client geographic basis, the top two U.K. and Australia vertical markets were government and communications & utilities, generating combined revenues of $1,086 million for the year ended September 30, 2021.

3.4.6. Central and Eastern Europe

For the year ended September 30, 2021, revenue in our Central and Eastern Europe segment was $1,303.9 million, an increase of $91.7 million or 7.6% over the same period last year. On a constant currency basis, revenue increased by $87.9 million or 7.3%. The increase in revenue was primarily due to higher work volume and new managed IT service revenues within the government and financial services vertical markets, the prior year’s acquisition and additional IP license sales. This was partially offset by the impact of COVID-19 in the first half of Fiscal 2021, mainly affecting the MRD vertical market.

On a client geographic basis, the top two Central and Eastern Europe vertical markets were MRD and government, generating combined revenues of approximately $838 million for the year ended September 30, 2021.

3.4.7. Scandinavia

For the year ended September 30, 2021, revenue in our Scandinavia segment was $1,027.9 million, a decrease of $76.2 million or 6.9% over the same period last year. On a constant currency basis, revenue decreased by $115.1 million or 10.4%. The decrease was mainly driven by lower work volume and projects successfully completed within the government and MRD vertical markets, in part due to the impact of COVID-19, as well as the sale of a non-profitable business related to a past acquisition. This was partially offset by new business in Denmark.

On a client geographic basis, the top two Scandinavia vertical markets were MRD and government, generating combined revenues of approximately $739 million for the year ended September 30, 2021.

3.4.8. Finland, Poland and Baltics

For the year ended September 30, 2021, revenue in our Finland, Poland and Baltics segment was $769.0 million, a decrease of $8.2 million or 1.0% over the same period last year. On a constant currency basis, revenue decreased by $11.3 million or 1.4% due to lower work volumes in both government and MRD vertical markets, in part impacted by COVID-19 in the first half of Fiscal 2021.

On a client geographic basis, the top two Finland, Poland and Baltics vertical markets were government and financial services, generating combined revenues of approximately $468 million for the year ended September 30, 2021.

3.4.9. Asia Pacific

For the year ended September 30, 2021, revenue in our Asia Pacific segment was $680.6 million, an increase of $5.6 million or 0.8% over the same period last year. On a constant currency basis, revenue increased by $46.7 million or 6.9%. The increase was mainly driven by the continued demand for our offshore delivery centers, predominantly within the financial services and communications & utilities vertical markets, primarily in North America.

FISCAL 2021 RESULTS – 23

MANAGEMENT’S DISCUSSION AND ANALYSIS

3.5. OPERATING EXPENSES

For the year endedSeptember 30,	2021			% of Revenue						%
In thousands of CAD except for percentages
Costs of services, selling and administrative	****	10,178,164	****	****	83.9%	10,302,068		84.7%	)	****	(1.2%)
Foreign exchange gain	****	(3,532	)	****	0.0%	(899	)	0.0%	)	****	292.9 %

All values are in US Dollars.

3.5.1. Costs of Services, Selling and Administrative

For the year ended September 30, 2021, costs of services, selling and administrative expenses amounted to $10,178.2 million, a decrease of $123.9 million over the same period last year. As a percentage of revenue, costs of services, selling and administrative expenses decreased to 83.9% from 84.7%. As a percentage of revenue, costs of services improved compared to the same period last year due to improved utilization and actions taken to lower expenses due to COVID-19, in part offset by lower performance based compensation in the prior year. As a percentage of revenue, selling and administrative expenses increased compared to the same period last year due to lower performance based compensation in the prior year.

During the year ended September 30, 2021, the translation of the results of our foreign operations from their local currencies to the Canadian dollar favourably impacted costs by $130.9 million, partially offsetting the unfavourable translation impact of $169.4 million on our revenue.

3.5.2. Foreign Exchange Gain

During the year ended September 30, 2021, CGI recognized $3.5 million of foreign exchange gains, mainly driven by the timing of payments combined with the volatility of foreign exchange rates. The Company, in addition to its natural hedges, uses derivatives as a strategy to manage its exposure, to the extent possible.

3.6. ADJUSTED EBIT BY SEGMENT

					Change		****
For the year ended September 30,
	2021	****	2020	****		%	****
In thousands of CAD except for percentages
Western and Southern Europe	271,324	****	264,009		7,315	2.8	%
As a percentage of segment revenue	13.8	%	13.8	%
U.S. Commercial and State Government	281,217	****	295,795		(14,578	(4.9	%)
As a percentage of segment revenue	15.6	%	15.9	%
Canada	390,370	****	364,424		25,946	7.1	%
As a percentage of segment revenue	22.2	%	21.6	%
U.S. Federal	252,657	****	221,793		30,864	13.9	%
As a percentage of segment revenue	15.7	%	13.0	%
U.K. and Australia	218,624	****	215,924		2,700	1.3	%
As a percentage of segment revenue	16.1	%	15.9	%
Central and Eastern Europe	149,935	****	122,548		27,387	22.3	%
As a percentage of segment revenue	11.5	%	10.1	%
Scandinavia	66,180	****	57,231		8,949	15.6	%
As a percentage of segment revenue	6.4	%	5.2	%
Finland, Poland and Baltics	114,358	****	120,959		(6,601	(5.5	%)
As a percentage of segment revenue	14.9	%	15.6	%
Asia Pacific	207,496	****	200,263		7,233	3.6	%
As a percentage of segment revenue	30.5	%	29.7	%
Adjusted EBIT	1,952,161	****	1,862,946		89,215	4.8	%
Adjusted EBIT margin	16.1	%	15.3	%

All values are in US Dollars.

For the year ended September 30, 2021, adjusted EBIT margin increased to 16.1% from 15.3% for the same period last year. The increase was mainly due to improved utilization, lower discretionary expenses mainly due to COVID-19, decrease in amortization of client relationships, as well as prior year non-recurring adjustments on client contracts. This was partly offset by the impact of lower performance based compensation in the prior year, mainly due to COVID-19.

3.6.1. Western and Southern Europe

For the year ended September 30, 2021, adjusted EBIT in the Western and Southern Europe segment was $271.3 million, an increase of $7.3 million when compared to the same period last year. Adjusted EBIT margin remained stable at 13.8%. Improved utilization, lower discretionary and COVID-19 related expenses as compared to last year and one more billable day improved the adjusted EBIT margin. This was offset by higher performance based compensation as compared to prior year.

3.6.2. U.S. Commercial and State Government

For the year ended September 30, 2021, adjusted EBIT in the U.S. Commercial and State Government segment was $281.2 million, a decrease of $14.6 million when compared to the same period last year. Adjusted EBIT margin decreased to 15.6% from 15.9%. The change in adjusted EBIT margin was mainly due to the impact of lower performance based compensation in the prior year, mainly due to COVID-19. This was in part offset by additional R&D tax credits and lower discretionary expenses.

FISCAL 2021 RESULTS – 25

MANAGEMENT’S DISCUSSION AND ANALYSIS

3.6.3. Canada

For the year ended September 30, 2021, adjusted EBIT in the Canada segment was $390.4 million, an increase of $25.9 million when compared to the same period last year. Adjusted EBIT margin increased to 22.2% from 21.6%. The increase was mainly due to lower discretionary expenses and improved utilization due to cost reduction efforts (see section 3.7.2. of the present document) in the prior year. The increase was also due to adjustments on client contracts and impairments taken on business solutions, both in the prior year. This was partly offset by higher performance based compensation and lower tax credits.

3.6.4. U.S. Federal

For the year ended September 30, 2021, adjusted EBIT in the U.S. Federal segment was $252.7 million, an increase of $30.9 million when compared to the same period last year. Adjusted EBIT margin increased to 15.7% from 13.0%. Adjusted EBIT margin increased primarily due to a more profitable business mix, lower performance based compensation, additional R&D tax credits, as well as unfavourable adjustments on client contracts and a litigation provision, both in the prior year.

3.6.5. U.K. and Australia

For the year ended September 30, 2021, adjusted EBIT in the U.K. and Australia segment was $218.6 million, an increase of $2.7 million when compared to the same period last year. Adjusted EBIT margin increased to 16.1% from 15.9%. The increase in adjusted EBIT margin was mainly due to the decrease in amortization of client relationships and lower discretionary expenses mainly due to COVID-19. This was partly offset by the provision taken on a client contract.

3.6.6. Central and Eastern Europe

For the year ended September 30, 2021, adjusted EBIT in the Central and Eastern Europe segment was $149.9 million, an increase of $27.4 million when compared to the same period last year. Adjusted EBIT margin increased to 11.5% from 10.1%. The increase in adjusted EBIT margin was mainly driven by profitable revenue growth, a decrease in amortization of client relationships, as well as the impact of higher IP license sales and lower discretionary expenses. This was in part offset by higher performance based compensation.

3.6.7. Scandinavia

For the year ended September 30, 2021, adjusted EBIT in the Scandinavia segment was $66.2 million, an increase of $8.9 million when compared to the same period last year. Adjusted EBIT margin increased to 6.4% from 5.2%. The increase in adjusted EBIT margin was mainly due to savings generated from a restructuring plan (see section 3.7.2. of the present document), a decrease in amortization of client relationships, lower discretionary expenses mainly due to COVID-19 and profitable new business in Denmark. This was in part offset by the impact of the decrease in revenues identified in the revenue section.

3.6.8. Finland, Poland and Baltics

For the year ended September 30, 2021 adjusted EBIT in our Finland, Poland and Baltics segment was $114.4 million, a decrease of $6.6 million, when compared to the same period last year. Adjusted EBIT margin decreased to 14.9% from 15.6% mainly due to higher performance based compensation, as well as the impact of the projects successfully completed within the government vertical market and the project mix within the financial services vertical market. This was in part offset by lower discretionary expenses mainly due to COVID-19.

3.6.9. Asia Pacific

For the year ended September 30, 2021, adjusted EBIT in the Asia Pacific segment was $207.5 million, an increase of $7.2 million when compared to the same period last year. Adjusted EBIT margin increased to 30.5% from 29.7%. The increase in adjusted EBIT margin was mostly due to productivity improvements and the net impact of foreign currency transactions. This was partly offset by higher performance based compensation and higher COVID-19 related member support costs.

3.7.EARNINGS BEFORE INCOME TAXES

The following table provides a reconciliation between our adjusted EBIT and earnings before income taxes, which is reported in accordance with IFRS:


For the years ended September 30,
			% of				% of
	2021		Revenue		2020		Revenue			%
In thousands of CAD except for percentage
Adjusted EBIT	****	1,952,161	****	16.1 %		1,862,946		15.3%			4.8%
Minus the following items:
Acquisition-related and integration costs	****	7,371	****	0.1 %		76,794		0.6%	)		(90.4%	)
Restructuring costs	****	—	****	— %		155,411		1.3%	)		— %
Net finance costs	****	106,798	****	0.9 %		114,474		0.9%	)		(6.7%	)
Earnings before income taxes	****	1,837,992	****	15.2 %		1,516,267		12.5%			21.2%

All values are in US Dollars.

3.7.1. Acquisition-Related and Integration Costs

For the years ended September 30, 2021 and 2020, the Company incurred $7.4 million and $76.8 million, respectively, of acquisition-related and integration costs for the integration towards the CGI operating model. These costs were mainly related to terminations of employment and other integration costs.

3.7.2. Restructuring Costs

For the year ended September 30, 2021, the Company incurred no restructuring costs. For the year ended September 30, 2020, the Company incurred restructuring costs as part of its cost reduction efforts in response to COVID-19. It also completed a previously announced restructuring plan which combined resulted in a total of $155.4 million being expensed during the year ended September 30, 2020. Please refer to section 3.7.2. of the Fiscal 2020 MD&A for further details.

3.7.3. Net Finance Costs

Net finance costs mainly include interest on our long-term debt and lease liabilities. For the year ended September 30, 2021, the net finance costs decrease of $7.7 million was mainly explained by less interest charges related to our unsecured notes, primarily as a result of lower market rates.

FISCAL 2021 RESULTS – 27

MANAGEMENT’S DISCUSSION AND ANALYSIS

3.8. NET EARNINGS AND EARNINGS PER SHARE

The following table sets out the information supporting the earnings per share calculations:

					Change	****
For the year endedSeptember 30,
	20	21	20	20		%
In thousands of CAD except for percentage and shares data
Earnings before income taxes	1,837,992	****	1,516,267		321,725	%
Income tax expense	468,920	****	398,405		70,515	%
Effective tax rate	25.5	%	26.3	%
Net earnings	1,369,072	****	1,117,862		251,210	%
Net earnings margin	11.3	%	9.2	%
Weighted average number of shares outstanding
Class A subordinate voting shares and Class B multiple voting shares (basic)	249,119,219	****	262,005,521		(12,886,302)	%)
Class A subordinate voting shares and Class B multiple voting shares (diluted)	253,088,880	****	266,104,062		(13,015,182)	%)
Earnings per share (in dollars)
Basic	5.50	****	4.27		1.23	%
Diluted	5.41	****	4.20		1.21	%

All values are in US Dollars.

3.8.1. Income Tax Expense

For the year ended September 30, 2021, income tax expense was $468.9 million compared to $398.4 million over the same period last year, while our effective tax rate decreased to 25.5% from 26.3%. The decrease in the income tax rate is mainly attributable to lower acquisition-related and integration costs, as well as restructuring costs.

When excluding tax effects from acquisition-related and integration costs and restructuring costs, the effective tax rate remained at 25.5% for the year ended September 30, 2021 compared to 25.6% for the year ended September 30, 2020.

The table in section 3.8.3. shows the year-over-year comparison of the tax rate with the impact of specific items removed.

Based on the enacted rates at the end of Fiscal 2021 and our current business mix, we expect our effective tax rate before any significant adjustments to be in the range of 24.5% to 26.5% in subsequent periods.

3.8.2. Weighted AverageNumber of Shares

For Fiscal 2021, CGI’s basic and diluted weighted average number of shares decreased compared to Fiscal 2020 due to the impact of the purchase for cancellation of Class A Shares, partly offset by the grant and the exercise of stock options. Please refer to notes 19, 20 and 21 of our audited consolidated financial statements for additional information.

3.8.3. Net Earnings and Earnings per Share Excluding Specific Items

Below is a table showing the year-over-year comparison excluding specific items namely, acquisition-related and integration costs and restructuring costs.

					Change		****
For the year endedSeptember 30,
	2021	****	2020	****			%
In thousands of CAD except for percentages and sharesdata
Earnings before income taxes	1,837,992	****	1,516,267		321,725	21.2	%
Add back:
Acquisition-related and integration costs	7,371	****	76,794		(69,423	(90.4	%)
Restructuring costs	—	****	155,411		(155,411	(100.0	%)
Earnings before income taxes excluding specific items	1,845,363	****	1,748,472		96,891	5.5	%
Income tax expense	468,920	****	398,405		70,515	17.7	%
Effective tax rate	25.5	%	26.3	%
Add back:
Tax deduction on acquisition-related and integration costs	1,570	****	14,717		(13,147	(89.3	%)
Impact on effective tax rate	—	%	(0.3	%)
Tax deduction on restructuring costs	—	****	35,278		(35,278	(100.0	%)
Impact on effective tax rate	—	%	(0.4	%)
Income tax expense excluding specific items	470,490	****	448,400		22,090	4.9	%
Effective tax rate excluding specific items	25.5	%	25.6	%
Net earnings excluding specific items	1,374,873	****	1,300,072		74,801	5.8	%
Net earnings margin excluding specific items	11.3	%	10.7	%
Weighted average number of shares outstanding
Class A subordinate voting shares and Class B multiple voting shares (basic)	249,119,219	****	262,005,521			(4.9	%)
Class A subordinate voting shares and Class B multiple voting shares (diluted)	253,088,880	****	266,104,062			(4.9	%)
Earnings per share excluding specific items (in dollars)
Basic	5.52	****	4.96		0.56	11.3	%
Diluted	5.43	****	4.89		0.54	11.0	%

All values are in US Dollars.

FISCAL 2021 RESULTS – 29

MANAGEMENT’S DISCUSSION AND ANALYSIS

4.	Liquidity

4.1. CONSOLIDATED STATEMENTS OF CASH FLOWS

CGI’s growth is financed through a combination of cash flow from operations, drawing on our unsecured committed revolving credit facility, the issuance of long-term debt, and the issuance of equity. One of our financial priorities is to maintain an optimal level of liquidity through the active management of our assets and liabilities as well as our cash flows.

As at September 30, 2021, cash and cash equivalents were $1,699.2 million. The following table provides a summary of the generation and use of cash for the years ended September 30, 2021 and 2020.

Forthe year ended September 30,	2021	****	2020	****	Change	****
In thousands of CAD
Cash provided by operating activities	2,115,928	****	1,938,556		177,372	****
Cash used in investing activities	(397,547	)	(572,453	)	174,906	****
Cash (used in) provided by financing activities	(1,653,276	)	94,172		(1,747,448	)
Effect of foreign exchange rate changes on cash and cash equivalents	(73,884	)	33,879		(107,763	)
Net (decrease) increase in cash and cash equivalents	(8,779	)	1,494,154		(1,502,933	)

4.1.1. Cash Provided by Operating Activities

For the year ended September 30, 2021, cash provided by operating activities was $2,115.9 million or 17.4% of revenue compared to $1,938.6 million or 15.9% for the same period last year. The following table provides a summary of the generation and use of cash from operating activities:

Forthe year ended September 30,	2021	2020	****	Change	****
In thousands of CAD
Net earnings	1,369,072	1,117,862		251,210	****
Amortization, depreciation and impairment	510,570	565,692		(55,122	)
Other adjustments^1^	21,422	36,838		(15,416	)
Cash flow from operating activities before net change in non-cash working capitalitems	1,901,064	1,720,392		180,672	****
Net change in non-cash working capital items:
Accounts receivable, work in progress and deferred revenue	7,617	256,986		(249,369	)
Accounts payable and accrued liabilities, accrued compensation and employee-related liabilities, provisions and long-term liabilities	190,735	12,193		178,542	****
Other^2^	16,512	(51,015	)	67,527	****
Net change in non-cash working capital items	214,864	218,164		(3,300	)
Cash provided by operating activities	2,115,928	1,938,556		177,372	****
^1^	Comprised of deferred income taxes (recovery) expense, foreign exchange loss (gain), gain on leases termination, loss on<br>sale of business, and share-based payment costs.
---	---
^2^	Comprised of prepaid expenses and other assets, long-term financial assets, income taxes, derivative financial instruments<br>and retirement benefits obligations.
---	---

For the year ended September 30, 2021, cash provided by operating activities was $2,115.9 million, up $177.4 million for the same period last year, mainly due to higher net earnings. The net change in non-cash working capital items of $214.9 million for Fiscal 2021 was primarily due to the increase of accrued compensation and employee-related liabilities, mainly from performance-based compensation to our members, and the increase in accounts payable and income tax payments.

This was partially offset by the payments from restructuring costs and from acquisition-related and integration costs, as well as government remittance programs under COVID-19 relief measures.

The timing of our working capital inflows and outflows will always have an impact on the cash flow from operations.

4.1.2. Cash Used in Investing Activities

For the year ended September 30, 2021, $397.5 million was used in investing activities while $572.5 million was used over the same periods last year.

The following table provides a summary of the use of cash from investing activities:

Forthe year ended September 30,	2021	****	2020	****	Change	****
In thousands of CAD
Business acquisitions	(98,926	)	(266,938	)	168,012	****
Purchase of property, plant and equipment	(121,806	)	(128,478	)	6,672	****
Additions to contract costs	(65,001	)	(72,845	)	7,844	****
Additions to intangible assets	(113,934	)	(114,112	)	178	****
Net change in short-term investments and purchase of long-term investments	2,120	****	9,920		(7,800	)
Cash used in investing activities	(397,547	)	(572,453	)	174,906	****

The decrease of $174.9 million in cash used in investing activities during the year ended September 30, 2021 was mainly due to lower investment in business acquisitions.

4.1.3. Cash (Used in) Provided by Financing Activities

For the year ended September 30, 2021, $1,653.3 million was used from financing activities while $94.2 million was generated over the same period last year.

The following table provides a summary of the generation and use of cash from financing activities:

Forthe year ended September 30,	2021	****	2020	****	Change	****
In thousands of CAD
Net change in unsecured committed revolving credit facility	—	****	(334,370	)	334,370	****
Increase of long-term debt	1,885,262	****	1,807,167		78,095	****
Repayment of long-term debt	(1,888,777	)	(106,496	)	(1,782,281	)
Payment of lease<br>liabilities	(169,674	)	(175,320	)	5,646	****
	(173,189	)	1,190,981		(1,364,170	)
Repayment of debt assumed from business acquisitions	—	****	(28,281	)	28,281	****
Payment for remaining shares of Acando^1^	—	****	(23,123	)	23,123	****
Purchase of Class A subordinate voting shares held in trusts	(31,404	)	(55,287	)	23,883	****
Settlement of derivative financial instruments	(6,992	)	(3,903	)	(3,089	)
Purchase and cancellation of Class A subordinate voting shares	(1,502,824	)	(1,043,517	)	(459,307	)
Issuance of Class A subordinate voting shares	61,133	****	57,302		3,831	****
Cash (used in) provided by financing activities	(1,653,276	)	94,172	****	(1,747,448	)
^1^	Related to a business acquisition made during the year ended September 30, 2019.
---	---

FISCAL 2021 RESULTS – 31

MANAGEMENT’S DISCUSSION AND ANALYSIS

For the year ended September 30, 2021, we increased our long-term debt by $1,885.3 million, mainly driven by the issuance of senior unsecured notes for an amount of $1,847.3 million as outlined in the section 2.5. of the present document, and repaid $1,888.8 million of our long-term debt mainly driven by the repayment in full of the 2020 Term Loan in an amount of $1,583.5 million (US$1,250.0 million), and the scheduled repayments of senior unsecured notes in the amount of $259.7 million. We also paid $169.7 million of lease liabilities. For the year ended September 30, 2020, the Company received through the 2020 Term Loan an amount of $1,764.7 million (US$1,250.0 million), repaid $334.4 million under our unsecured committed revolving credit facility, and made scheduled repayments of senior unsecured notes in the amount of $65.9 million. In addition, we paid $175.3 million of lease liabilities and used $28.3 million to repay debt assumed from business acquisitions.

For the year ended September 30, 2020, the Company paid $23.1 million to acquire the remaining 3.9% of outstanding shares of Acando.

For the year ended September 30, 2021, $31.4 million was used to purchase Class A Shares in connection with the Company’s Performance Share Unit Plans (the PSU Plans) compared to $55.3 million during the year ended September 30, 2020. More information concerning the PSU Plans can be found in note 20 of the audited consolidated financial statements.

For the year ended September 30, 2021, $1,502.8 million was used for the purchase for cancellation of 15,310,465 Class A Shares, compared to $1,043.5 million for the purchase for cancellation of 10,605,464 Class A Shares over the same period last year.

Finally, for the year ended September 30, 2021, we received $61.1 million in proceeds from the exercise of stock options, compared to $57.3 million during the year ended September 30, 2020.

4.1.4. Effect of Foreign Exchange Rate Changes on Cash and Cash Equivalents

For the year ended September 30, 2021, the effect of foreign exchange rate changes on cash and cash equivalents had an unfavourable impact of $73.9 million. This amount had no effect on net earnings as it was recorded in other comprehensive income.

4.2. CAPITAL RESOURCES

As at September 30, 2021	Available
In thousands ofCAD
Cash and cash equivalents		1,699,206
Short-term investments		1,027
Long-term investments		19,354
Unsecured committed revolving credit facility^1^		1,493,372
Total	****	3,212,959
^1^	As at September 30, 2021, letters of credit in the amount of $6.6 million were outstanding against the<br>$1.5 billion unsecured committed revolving credit facility.
---	---

As at September 30, 2021, cash and cash equivalents and investments represented $1,719.6 million.

Cash equivalents include term deposits, all with maturities of 90 days or less. Long-term investments include corporate bonds with maturities ranging from one to five years, with a credit rating of A- or higher.

As at September 30, 2021, the aggregate amount of the capital resources available to the Company was $3,213.0 million. Certain long-term debt agreements contain covenants, which require us to maintain certain financial ratios. As at September 30, 2021, CGI was in compliance with these covenants.

Total debt decreased by $185.4 million to $3,401.7 million as at September 30, 2021 compared to $3,587.1 million as at September 30, 2020. The variance was mainly due to the repayment in full of the 2020 Term Loan in an amount of $1,583.5 million (US$1,250.0 million), scheduled repayments of the senior unsecured notes in the amount of $259.7 million

and a foreign exchange translation impact of $173.0 million, offset by the additional $1,847.3 million (US$1.0 billion and $600.0 million) received through the issuance of senior unsecured notes (outlined in section 2.5. of the present document). As at September 30, 2021, CGI was showing a positive working capital (total current assets minus total current liabilities) of $961.7 million. The Company also had $1,493.4 million available under its unsecured committed revolving credit facility and is generating a significant level of cash, which CGI’s management currently considers will allow the Company to fund its operations while maintaining adequate levels of liquidity. On October 29, 2021, the unsecured committed revolving credit facility was extended by two years to October 2026 and can be further extended. There were no material changes in the terms and conditions including interest rates and banking covenants.

The tax implications and impact related to the repatriation of cash will not materially affect the Company’s liquidity.

4.3. CONTRACTUALOBLIGATIONS

We are committed under the terms of contractual obligations which have various expiration dates, primarily for the rental of premises, computer equipment used in managed IT and business process services contracts and long-term service agreements.

Commitment type	Total	Less than 1	1 - 3 years	3 - 5 years	More than 5
		year			years
In thousands of CAD
Long-term debt	3,401,907	392,977	1,158,940	752,530	1,097,460
Estimated interest on long-term debt	363,059	73,296	117,462	79,205	93,096
Lease liabilities	776,940	167,819	281,994	159,306	167,821
Estimated interest on lease liabilities	100,558	24,931	36,999	21,287	17,341
Long-term service agreements	279,823	148,663	91,690	38,981	489
Total	4,922,287	807,686	1,687,085	1,051,309	1,376,207

4.4. FINANCIAL INSTRUMENTS AND HEDGING TRANSACTIONS

We use various financial instruments to help us manage our exposure to fluctuations of foreign currency exchange rates and interest rates. Please refer to note 31 of our audited consolidated financial statements for additional information on our financial instruments and hedging transactions.

FISCAL 2021 RESULTS – 33

MANAGEMENT’S DISCUSSION AND ANALYSIS

4.5. SELECTED MEASURES OF CAPITAL RESOURCES AND LIQUIDITY

As at September 30,	2021	****	2020	****
Inthousands of CAD except for percentages
Reconciliation between net debt and long-term debt and leaseliabilities^1^:
Net debt	2,535,861	****	2,777,928
Add back:
Cash and cash equivalents	1,699,206	****	1,707,985
Short-term investments	1,027	****	1,473
Long-term investments	19,354	****	22,612
Fair value of foreign currency derivative financial instruments related to debt	(76,852	)	(46,533	)
Long-term debt and lease liabilities ^1^	4,178,596	****	4,463,465	****
Net debt to capitalization ratio	26.6	%	27.7	%
Return on equity	19.8	%	16.0	%
Return on invested capital	14.9	%	12.1	%
Days sales outstanding	45	****	47
^1^	As at September 30, 2021, long-term debt and lease liabilities were $3,401.7 million ($3,587.1 million as<br>at September 30, 2020) and $776.9 million ($876.4 million as at September 30, 2020), respectively, including their current portions.
---	---

We use the net debt to capitalization ratio as an indication of our financial leverage in order to realize our Build and Buy strategy (please refer to section 1.2. of the present document for additional information on our Build and Buy strategy). The net debt to capitalization ratio decreased to 26.6% in Fiscal 2021 from 27.7% in Fiscal 2020 mostly due to cash generation and the favorable impact of foreign exchange rates on our net debt partially offset by the repurchase of Class A Shares during the year.

ROE is a measure of the return we are generating for our shareholders. ROE increased to 19.8% in Fiscal 2021 from 16.0% in Fiscal 2020. The increase was mainly due to higher net earnings over Fiscal 2021, and to a lesser extent, the impact of repurchased shares during the year.

ROIC is a measure of the Company’s efficiency in allocating the capital under our control to profitable investments. The return on invested capital ratio increased to 14.9% in Fiscal 2021 from 12.1% in Fiscal 2020. The increase in ROIC was mainly the result of higher net earnings excluding net finance costs after-tax over Fiscal 2021.

DSO decreased to 45 days at the end of Fiscal 2021 when compared to 47 days in Fiscal 2020.This decrease is mainly due to improved collections, and to a lesser extent foreign exchange impacts. In calculating the DSO, we subtract the deferred revenue balance from trade accounts receivable and work in progress; for that reason, the timing of payments received from managed IT and business process services clients in advance of the work to be performed and the timing of payments related to project milestones can affect the DSO. The Company maintains a target DSO of 45 days.

4.6. GUARANTEES

In the normal course of operations, we may enter into agreements to provide financial or performance assurances to third parties on the sale of assets, business divestitures and guarantees on government and commercial contracts.

In connection with sales of assets and business divestitures, the Company may be required to pay counterparties for costs and losses incurred as a result of breaches in our contractual obligations, representations and warranties, intellectual property right infringement and litigation against counterparties, among others. While some of the agreements specify a maximum potential exposure, others do not specify a maximum amount or a maturity date. It is not possible to reasonably estimate the maximum amount that may have to be paid under such guarantees. The amounts are dependent upon the outcome of future contingent events, the nature and likelihood of which cannot be determined at this time. No amount has been accrued in the consolidated balance sheets relating to this type of indemnification as at September 30, 2021. The Company does not expect to incur any potential payment in connection with these guarantees that could have a materially adverse effect on its audited consolidated financial statements. Moreover, the Company has letters of credit for a total of $69.7 million in addition to the letters of credit covered by the unsecured committed revolving credit facility (please refer to note 14 of our audited consolidated financial statements). These guarantees are required in some of the Company’s contracts with customers.

In the normal course of business, we may provide certain clients, principally governmental entities, with bid and performance bonds. In general, we would only be liable for the amount of the bid bonds if we refuse to perform the project once we are awarded the bid. We would also be liable for the performance bonds in the event of a default in the performance of our obligations. As at September 30, 2021, we had committed a total of $21.4 million for these bonds. To the best of our knowledge, we complied with our performance obligations under all service contracts for which there was a bid or performance bond, and the ultimate liability, if any, incurred in connection with these guarantees would not have a material adverse effect on our consolidated results of operations or financial condition.

4.7. CAPABILITY TO DELIVER RESULTS

Despite the impact of the COVID-19 pandemic, as outlined in section 2.3. of the present document, CGI’s management believes that the Company has sufficient capital resources to support ongoing business operations and execute our Build and Buy growth strategy. Our principal and most accretive uses of cash are: to invest in our business (procuring new large managed IT and business process services contracts and developing business and IP solutions); to pursue accretive acquisitions; to purchase for cancellation Class A Shares and pay down debt. In terms of financing, we are well positioned to continue executing our four-pillar growth strategy in Fiscal 2022.

To successfully implement the Company’s strategy, CGI relies on a strong leadership team, supported by highly knowledgeable members with relevant relationships and significant experience in both IT and our targeted industries. CGI fosters leadership development through the CGI Leadership Institute ensuring continuity and knowledge transfer across the organization. For key positions, a detailed succession plan is established and revised frequently.

As a Company built on human capital, our professionals and their knowledge are critical to delivering quality service to our clients. Our human resources program allows us to attract and retain the best talent as it provides competitive compensation and benefits, a favourable working environment, training programs and career development opportunities. Employee satisfaction is monitored annually through a Company-wide survey. In addition, a majority of our professionals are owners of CGI through our Share Purchase Plan, which, along with our Profit Participation Plan, allows them to share in the Company’s success, further aligning stakeholder interests.

In addition to capital resources and talent, CGI has established the Management Foundation, which encompasses governance policies, organizational models and sophisticated management frameworks for our business units and corporate processes. This robust governance model provides a common business language for managing all operations consistently across the globe, driving a focus on continuous improvement. CGI’s operations maintain appropriate certifications in accordance with service requirements such as the ISO and the Capability Maturity Model Integration (CMMI) certification programs.

FISCAL 2021 RESULTS – 35

MANAGEMENT’S DISCUSSION AND ANALYSIS

5.	Fourth Quarter Results

5.1. BOOKINGS AND BOOK-TO-BILL RATIO

Bookings for the quarter ended September 30, 2021 were $2.9 billion representing a book-to-bill ratio of 97.1%. The breakdown of the new bookings signed during the quarter is as follows:

Contract Type			Service Type			Segment			Vertical Market
A.	Extensions, renewals and add-ons	69 %	A.	Managed IT and Business Process Services	56 %	A.	U.S. Commercial and State Government	21 %	A.	Government	41 %
B.	New business	31 %				B.	U.S. Federal	15 %	B.	MRD	22 %
			B.	Business consulting, strategic IT consulting and systems integration	44 %	C.	U.K. and Australia	15 %	C.	Financial Services	19 %
						D.	Western and Southern Europe	15 %	D	Communication & Utilities	13 %
						E.	Canada	13 %	E	Health	5 %
						F.	Central and Eastern Europe	11 %
						G.	Finland, Poland and Baltics	5 %
						H.	Scandinavia	5 %

The following table provides a summary of the bookings and book-to-bill ratio by segment:

In thousands of CAD except for percentages	Bookings for the threemonths endedSeptember 30, 2021		Bookings for the yearended September 30,2021		Book-to-bill ratio forthe yearendedSeptember 30, 2021
TotalCGI	****	2,920,771	****	13,842,948	****	114.2 %
Western and Southern Europe	****	429,088	****	2,353,414	****	120.5 %
U.S. Commercial and State Government	****	600,211	****	2,250,655	****	119.0 %
Canada	****	384,029	****	2,305,163	****	121.0 %
U.S. Federal	****	448,945	****	1,449,591	****	89.5 %
U.K. and Australia	****	441,053	****	1,837,174	****	118.2 %
Central and Eastern Europe	****	331,365	****	1,679,855	****	125.6 %
Scandinavia	****	142,438	****	983,344	****	91.7 %
Finland, Poland and Baltics	****	143,642	****	983,752	****	124.1 %

5.2. FOREIGN EXCHANGE

Closingforeign exchange rates

As at September 30,	2021	2020	Change	****
U.S. dollar	1.2676	1.3325	(4.9%	)
Euro	1.4678	1.5622	(6.0%	)
Indian rupee	0.0171	0.0181	(5.5%	)
British pound	1.7075	1.7216	(0.8%	)
Swedish krona	0.1447	0.1487	(2.7%	)

Average foreign exchange rates

For the three months ended September 30,	2021	2020	Change	****
U.S. dollar	1.2598	1.3327	(5.5%	)
Euro	1.4848	1.5579	(4.7%	)
Indian rupee	0.0170	0.0179	(5.0%	)
British pound	1.7360	1.7215	0.8%	****
Swedish krona	0.1457	0.1503	(3.1%	)

FISCAL 2021 RESULTS – 37

MANAGEMENT’S DISCUSSION AND ANALYSIS

5.3. REVENUE DISTRIBUTION

The following charts provide additional information regarding our revenue mix for the quarter ended September 30, 2021:

Service Type			Client Geography			Vertical Market
A.	Managed IT and Business Process Services	56 %	A.	U.S.	31 %	A.	Government	35 %
B.	Business consulting, strategic IT consulting and systems integration	44 %	B.	Canada	16 %	B.	MRD	23 %
			C.	France	14 %	C.	Financial services	22 %
			D.	U.K.	13 %	D.	Communications & utilities	14 %
			E.	Germany	7 %	E.	Health	6 %
			F.	Finland	6 %
			G.	Sweden	6 %
			H.	Rest of the world	7 %

5.3.1. Client Concentration

IFRS guidance on segment disclosures defines a single customer as a group of entities that are known to the reporting entity to be under common control. As a consequence, our work for the U.S. federal government including its various agencies represented 13.1% of our revenue for Q4 2021 as compared to 14.5% for Q4 2020.

5.4. REVENUE BY SEGMENT

The following table provides a summary of the year-over-year changes in our revenue, in total and by segment, separately showing the impacts of foreign currency exchange rate variations between the Q4 2021 and Q4 2020 periods. The Q4 2020 revenue by segment was recorded reflecting the actual average foreign exchange rates for that period. The foreign exchange impact is the difference between the current period’s actual results and the current period’s results converted with the prior year’s average foreign exchange rates.

				Change
For thethree months ended September 30,
	20	21	2020		%
In thousands of CAD except for percentages
Total CGI revenue	3,007,458	****	2,925,560	81,898	2.8 %
Variation prior to foreign currency impact	6.4	%
Foreign currency impact	(3.6	%)
Variation over previous period	2.8	%
Western and Southern Europe
Revenue prior to foreign currency impact	491,973	****	433,064	58,909	13.6 %
Foreign currency impact	(22,301	)
Western and Southern Europe revenue	469,672	****	433,064	36,608	8.5 %
U.S. Commercial and State Government
Revenue prior to foreign currency impact	512,432	****	461,371	51,061	11.1 %
Foreign currency impact	(26,684	)
U.S. Commercial and State Government revenue	485,748	****	461,371	24,377	5.3 %
Canada
Revenue prior to foreign currency impact	438,379	****	396,755	41,624	10.5 %
Foreign currency impact	240	****
Canada revenue	438,619	****	396,755	41,864	10.6 %
U.S. Federal
Revenue prior to foreign currency impact	430,744	****	431,376	(632	(0.1%)
Foreign currency impact	(23,040	)
U.S. Federal revenue	407,704	****	431,376	(23,672	(5.5%)
U.K. and Australia
Revenue prior to foreign currency impact	350,197	****	347,473	2,724	0.8 %
Foreign currency impact	2,808	****
U.K. and Australia revenue	353,005	****	347,473	5,532	1.6 %
Central and Eastern Europe
Revenue prior to foreign currency impact	337,906	****	306,840	31,066	10.1 %
Foreign currency impact	(14,833	)
Central and Eastern Europe revenue	323,073	****	306,840	16,233	5.3 %
Scandinavia
Revenue prior to foreign currency impact	226,571	****	234,190	(7,619	(3.3%)
Foreign currency impact	(6,624	)
Scandinavia revenue	219,947	****	234,190	(14,243	(6.1%)
Finland, Poland and Baltics
Revenue prior to foreign currency impact	183,253	****	178,412	4,841	2.7%
Foreign currency impact	(8,782	)
Finland, Poland & Baltics revenue	174,471	****	178,412	(3,941	(2.2%)

All values are in US Dollars.

FISCAL 2021 RESULTS – 39

MANAGEMENT’S DISCUSSION AND ANALYSIS

					Change		****
For thethree months ended September 30,
	2	021	2020	****		%	****
In thousands of CAD except for percentages
Asia Pacific
Revenue prior to foreign currency impact	191,296	****	171,585		19,711	11.5	%
Foreign currency impact	(9,289	)
Asia Pacific revenue	182,007	****	171,585		10,422	6.1	%
Eliminations	(46,788	)	(35,506	)	(11,282	31.8	%

All values are in US Dollars.

We ended the fourth quarter of Fiscal 2021 with revenue of $3,007.5 million, an increase of $81.9 million, or 2.8% when compared to the same period of Fiscal 2020. On a constant currency basis, revenue increased by $186.7 million or 6.4%. Foreign currency rate fluctuations unfavourably impacted our revenue by $104.8 million or 3.6%. The increase was mainly due to growth across all vertical markets, as well as recent business acquisitions.

5.4.1. Western and Southern Europe

Revenue in our Western and Southern Europe segment was $469.7 million in Q4 2021, an increase of $36.6 million or 8.5% over the same period last year. On a constant currency basis, revenue increased by $58.9 million or 13.6%. The increase in revenue was mainly the result of growth across all vertical markets, predominantly within the MRD and government vertical markets.

On a client geographic basis, the top two Western and Southern Europe vertical markets were MRD and financial services, generating combined revenues of approximately $283 million for the three months ended September 30, 2021.

5.4.2. U.S. Commercial and State Government

Revenue from our U.S. Commercial and State Government segment was $485.7 million in Q4 2021, an increase of $24.4 million or 5.3% compared to the same period last year. On a constant currency basis, revenue increased by $51.1 million or 11.1%. The increase was mainly due to recent acquisitions, a prior year unfavorable adjustment on a project, as well as higher work volumes within the financial services vertical market. This was in part offset by a higher proportion of client projects delivered by our global delivery centers of excellence in Asia-Pacific (see section 5.4.9. of the present document).

On a client geographic basis, the top two U.S. Commercial and State Government vertical markets were financial services and government, generating combined revenues of approximately $296 million for the three months ended September 30, 2021.

5.4.3. Canada

Revenue in our Canada segment was $438.6 million in Q4 2021, an increase of $41.9 million or 10.6% over the same period last year. On a constant currency basis, revenue increased by $41.6 million or 10.5%. The increase was mainly due to growth within the financial services, MRD and communications & utilities vertical markets. This was in part offset by a higher proportion of client projects delivered by our global delivery centers of excellence in Asia-Pacific (see section 5.4.9. of the present document).

On a client geographic basis, the top two Canada vertical markets were financial services and communications & utilities, generating combined revenues of approximately $308 million for the three months ended September 30, 2021.

5.4.4. U.S. Federal

Revenue in our U.S. Federal segment was $407.7 million in Q4 2021, a decrease of $23.7 million or 5.5% over the same period last year. On a constant currency basis, revenue decreased by $0.6 million or 0.1%. The change was mainly due to lower transaction volumes from our travel related IP business process services in part related to COVID-19. This was partly offset by new and existing business in IT support services as and unfavourable adjustments on client contracts in the prior year.

For the three months ended September 30, 2021, 87% of revenues within the U.S. Federal segment were federal civilian based.

5.4.5. U.K. and Australia

Revenue in our U.K. and Australia segment was $353.0 million in Q4 2021, an increase of $5.5 million or 1.6% over the same period last year. On a constant currency basis, revenue increased by $2.7 million or 0.8%. The increase was mainly due to growth within the government vertical market and increased equipment sales within the government vertical market. This was partially offset by completion of projects within the communications & utilities vertical market.

On a client geographic basis, the top two U.K. and Australia vertical markets were government and communications & utilities, generating combined revenues of approximately $281 million for the three months ended September 30, 2021.

5.4.6. Central and Eastern Europe

Revenue in our Central and Eastern Europe segment was $323.1 million in Q4 2021, an increase of $16.2 million or 5.3% over the same period last year. On a constant currency basis, revenue increased by $31.1 million or 10.1%. The increase in revenue was primarily due to new managed IT service revenues and higher work volume within the government, MRD and financial services vertical markets.

On a client geographic basis, the top two Central and Eastern Europe vertical markets were MRD and government, generating combined revenues of approximately $210 million for the three months ended September 30, 2021.

5.4.7. Scandinavia

Revenue in our Scandinavia segment was $219.9 million, a decrease of $14.2 million or 6.1% over the same period last year. On a constant currency basis, revenue decreased by $7.6 million or 3.3%. The decrease was mainly driven by lower work volume and projects successfully completed within the government vertical market, as well as the sale of a non-profitable business related to a past acquisition. This was partially offset by new business in Denmark.

On a client geographic basis, the top two Scandinavia vertical markets were MRD and government, generating combined revenues of approximately $159 million for the three months ended September 30, 2021.

5.4.8. Finland, Poland and Baltics

Revenue in our Finland, Poland and Baltics segment was $174.5 million in Q4 2021, a decrease of $3.9 million or 2.2% over the same period last year. On a constant currency basis, revenue increased by $4.8 million or 2.7% mainly due to new business in the financial services and health vertical markets, as well as higher work volumes in the MRD vertical market. This was partially offset by lower work volume within the government vertical market.

5.4.9. Asia Pacific

Revenue in our Asia Pacific segment was $182.0 million, an increase of $10.4 million or 6.1% over the same period last year. On a constant currency basis, revenue increased by $19.7 million or 11.5%. The increase was mainly driven by the continued demand for our offshore delivery centers, predominantly within the financial services and communications & utilities vertical markets, primarily from North America.

FISCAL 2021 RESULTS – 41

MANAGEMENT’S DISCUSSION AND ANALYSIS

5.5. ADJUSTED EBIT BY SEGMENT


For thethree months ended September 30,
	2021			2020				%
In thousands of CAD except for percentages
Western and Southern Europe	****	65,513	****		59,742		****	****	9.7	%
As a percentage of segment revenue	****	13.9	%		13.8	%
U.S. Commercial and State Government	****	78,323	****		66,474		****	****	17.8	%
As a percentage of segment revenue	****	16.1	%		14.4	%
Canada	****	91,654	****		85,602		****	****	7.1	%
As a percentage of segment revenue	****	20.9	%		21.6	%
U.S. Federal	****	69,365	****		58,073		****	****	19.4	%
As a percentage of segment revenue	****	17.0	%		13.5	%
U.K. and Australia	****	55,090	****		55,749		)	****	(1.2	%)
As a percentage of segment revenue	****	15.6	%		16.0	%
Central and Eastern Europe	****	41,929	****		38,223		****	****	9.7	%
As a percentage of segment revenue	****	13.0	%		12.5	%
Scandinavia	****	11,089	****		7,805		****	****	42.1	%
As a percentage of segment revenue	****	5.0	%		3.3	%
Finland, Poland and Baltics	****	29,310	****		32,931		)	****	(11.0	%)
As a percentage of segment revenue	****	16.8	%		18.5	%
Asia Pacific	****	51,067	****		52,964		)	****	(3.6	%)
As a percentage of segment revenue	****	28.1	%		30.9	%
Adjusted EBIT	****	493,340	****		457,563			****	7.8	%
Adjusted EBIT margin	****	16.4	%		15.6	%

All values are in US Dollars.

Adjusted EBIT for the quarter was $493.3 million, an increase of $35.8 million from Q4 2020. The adjusted EBIT margin increased to 16.4% from 15.6% for the same period last year. The increase was mainly due to improved utilization and prior year non-recurring adjustments on client contracts. This was partly offset by the impact of lower performance based compensation in the prior year, mainly due to COVID-19.

5.5.1. Western andSouthern Europe

Adjusted EBIT in the Western and Southern Europe segment was $65.5 million in Q4 2021, an increase of $5.8 million when compared to Q4 2020. Adjusted EBIT margin increased to 13.9% from 13.8% in Q4 2020, mainly due to improved utilization as well as lower COVID-19 related expenses as compared to last year, in part offset by higher performance based compensation.

5.5.2. U.S. Commercial and State Government

Adjusted EBIT in the U.S. Commercial and State Government segment was $78.3 million in Q4 2021, an increase of $11.8 million when compared to Q4 2020. Adjusted EBIT margin increased to 16.1% from 14.4% in Q4 2020. The increase in adjusted EBIT margin was mainly due to the reevaluation of cost to complete on a project and a litigation provision, both in the prior year. This was in part offset by higher performance based compensation.

5.5.3. Canada

Adjusted EBIT in the Canada segment was $91.7 million in Q4 2021, an increase of $6.1 million when compared to Q4 2020. Adjusted EBIT margin decreased to 20.9% from 21.6% in Q4 2020. The decrease in adjusted EBIT margin was mainly due to lower tax credits and higher performance based compensation. This was partly offset by cost reduction efforts (see section 3.7.2. of the present document) resulting in improved utilization and prior year adjustments on client contracts.

5.5.4. U.S. Federal

Adjusted EBIT in the U.S. Federal segment was $69.4 million in Q4 2021, an increase of $11.3 million when compared to Q4 2020. Adjusted EBIT margin increased to 17.0% from 13.5% in Q4 2020. The increase in adjusted EBIT margin was primarily due to lower performance based compensation, a more profitable business mix and unfavourable adjustments on client contracts in the prior year.

5.5.5. U.K. and Australia

Adjusted EBIT in the U.K. and Australia segment was $55.1 million in Q4 2021, a decrease of $0.7 million when compared to Q4 2020. Adjusted EBIT margin decreased to 15.6% from 16.0% in Q4 2020. The decrease in adjusted EBIT margin was mainly due to the favourable impact of a client contract resolution in the prior year, partly offset by the decrease in amortization of client relationships.

5.5.6. Central and EasternEurope

Adjusted EBIT in the Central and Eastern Europe segment was $41.9 million in Q4 2021, an increase of $3.7 million when compared to Q4 2020. Adjusted EBIT margin increased to 13.0% from 12.5% in Q4 2020 driven by improved utilization and a decrease in amortization of client relationships, in part offset by higher performance based compensation.

5.5.7. Scandinavia

Adjusted EBIT in the Scandinavia segment was $11.1 million in Q4 2021, an increase of $3.3 million when compared to Q4 2020. Adjusted EBIT margin increased to 5.0% from 3.3% in Q4 2020. The increase in adjusted EBIT margin was mainly driven by a reduction of usage of subcontractors, a decrease in amortization of client relationships, profitable new business in Denmark and savings generated from a restructuring plan (see section 3.7.2. of the present document). This was partly offset by an adjustment on a client contract.

5.5.8. Finland, Poland and Baltics

Adjusted EBIT in our Finland, Poland and Baltics segment was $29.3 million Q4 2021, a decrease of $3.6 million, when compared to the same period last year. Adjusted EBIT margin decreased to 16.8% from 18.5% mainly due to projects successfully completed within the government vertical market and the temporary payroll tax relief in the prior year due to COVID-19.

5.5.9. Asia Pacific

Adjusted EBIT in the Asia Pacific segment was $51.1 million in Q4 2021, a decrease of $1.9 million when compared to Q4 2020, while the adjusted EBIT margin decreased to 28.1% from 30.9% Q4 2020. The change in adjusted EBIT margin was mostly due to lower utilization driven by an increased hiring, higher COVID-19 related member support costs and higher performance based compensation. This was in part offset by the net impact of foreign currency transactions.

FISCAL 2021 RESULTS – 43

MANAGEMENT’S DISCUSSION AND ANALYSIS

5.6. NET EARNINGS AND EARNINGS PER SHARE

The following table sets out the information supporting the earnings per share calculations:


For thethree months ended September 30,
	2021			2020				%
In thousands of CAD except for percentage and sharesdata
Adjusted EBIT	****	493,340	****		457,563		****	****	7.8	%
Minus the following items:
Acquisition-related and integration costs	****	1,169	****		5,302		)	****	(78.0	%)
Restructuring costs	****	—	****		84,255		)	****	—	****
Net finance costs	****	27,733	****		30,424		)	****	(8.8	%)
Earnings before income taxes	****	464,438	****		337,582		****	****	—	****
Income tax expense	****	118,504	****		85,668		****	****	38.3	%
Effective tax rate	****	25.5	%		25.4	%
Net earnings	****	345,934	****		251,914		****	****	37.3	%
Margin	****	11.5	% ****		8.6	%
Weighted average number of shares
Class A subordinate voting shares and Class B multiple voting shares (basic)	****	244,068,210	****		258,210,169			****	(5.5	%)
Class A subordinate voting shares and Class B multiple voting shares (diluted)	****	248,208,258	****		261,790,231			****	(5.2	%)
Earnings per share (in dollars)
Basic EPS		1.42			0.98		****	****	44.9	%
Diluted EPS		1.39			0.96		****	****	44.8	%

All values are in US Dollars.

For the three months ended September 30, 2021, the income tax expense was $118.5 million compared to $85.7 million over the same period last year, while our effective tax rate increased to 25.5% from 25.4%. The increase in the income tax rate is mainly attributable to a different profitability mix in certain geographies.

For Q4 2021, CGI’s basic and diluted weighted average number of shares decreased compared to Q4 2020 due to the impact of the purchase for cancellation of Class A Shares during the previous quarters. This was partly offset by the exercise of stock options during the year.

5.6.1. Net Earnings and Earnings per Share Excluding Specific Items

Below is a table showing the year-over-year comparison excluding specific items, namely acquisition-related and integration costs as well as restructuring costs :


For thethree months ended September 30,
	2021			2020				%
In thousands ofCAD except for percentage and shares data
Earnings before income taxes	****	464,438	****		337,582		****	****	37.6	%
Add back:
Acquisition-related and integration costs	****	1,169	****		5,302		)	****	(78.0	%)
Restructuring costs	****	—	****		84,255		)	****	(100.0	)
Earnings before income taxes excluding specific items	****	465,607	****	****	427,139	****	****	****	9.0	%
Income tax expense	****	118,504	****		85,668		****	****	38.3	%
Effective tax rate	****	25.5	%	****	25.4	%
Add back:
Tax deduction on acquisition-related and integration costs	****	240	****		1,210		)	****	(80.2	%)
Impact on effective tax rate	****	—	%		—	%
Tax deduction on restructuring costs	****	—	****		21,871		)	****	(100.0	)
Impact on effective tax rate	****	—	%		0.1	%
Income tax expense excluding specific items	****	118,744	****		108,749		****	****	9.2	%
Effective tax rate excluding specific items	****	25.5	%		25.5	%
Net earnings excluding specific items	****	346,863	****		318,390		****	****	8.9	%
Net earnings excluding specific items margin	****	11.5	%		10.9	%
Weighted average number of shares outstanding
Class A subordinate voting shares and Class B multiple voting shares (basic)	****	244,068,210	****		258,210,169			****	(5.5	%)
Class A subordinate voting shares and Class B multiple voting shares (diluted)	****	248,208,258	****		261,790,231			****	(5.2	%)
Earnings per share excluding specific items (in dollars)
Basic EPS	****	1.42	****	****	1.23	****	****	****	15.4	%
Diluted EPS	****	1.40	****	****	1.22	****	****	****	14.8	%

All values are in US Dollars.

FISCAL 2021 RESULTS – 45

MANAGEMENT’S DISCUSSION AND ANALYSIS

5.7. CONSOLIDATED STATEMENTS OF CASH FLOWS

As at September 30, 2021, cash and cash equivalents were $1,699.2 million. The following table provides a summary of the generation and use of cash and cash equivalents for the quarters ended September 30, 2021 and 2020.

For the three months ended September 30,	2021					Change
In thousands of CAD
Cash provided by operating activities	****	526,934	****	492,000		****	34,934	****
Cash used in investing activities	****	(80,109	)	(67,996	)	****	(12,113	)
Cash used in financing activities	****	(30,044	)	(90,724	)	****	60,680	****
Effect of foreign exchange rate changes on cash and cash equivalents	****	15,468	****	9,426		****	6,042	****
Net increase in cash and cash equivalents	****	432,249	****	342,706		****	89,543	****

5.7.1. Cash Provided by Operating Activities

For Q4 2021, cash provided by operating activities was $526.9 million compared to $492.0 million in Q4 2020, or 17.5% of revenue compared to 16.8% last year.

The following table provides a summary of the generation and use of cash from operating activities.

For the three months ended September 30,	2021					Change
In thousands ofCAD
Net earnings	****	345,934	****	251,914		****	94,020	****
Amortization, depreciation and impairment	****	127,619	****	152,459		****	(24,840	)
Other adjustments ^1^	****	23,620	****	22,957		****	663	****
Cash flow from operating activities before net change in non-cash working capitalitems	****	497,173	****	427,330		****	69,843	****
Net change in non-cash working capital items:
Accounts receivable, work in progress and deferred revenue	****	(22,756	)	151,583		****	(174,339	)
Accounts payable and<br>accrued liabilities, accrued compensation and employee-related liabilities, provisions and long-term liabilities	****	24,921	****	(14,054	)	****	38,975	****
Other ^2^	****	27,596	****	(72,859	)	****	100,455	****
Net change in non-cash working capital items	****	29,761	****	64,670		****	(34,909	)
Cash provided by operating activities	****	526,934	****	492,000		****	34,934	****
^1^	Comprised of deferred income taxes (recovery) expense, foreign exchange loss (gain), gain on leases terminations, loss on<br>sale of business and share-based payment costs.
---	---
^2^	Comprised of prepaid expenses and other assets, long-term financial assets, retirement benefits obligations, derivative<br>financial instruments and income taxes.
---	---

For the three months ended September 30, 2021, cash provided by operating activities was $526.9 million, up $34.9 million for the same period last year due mainly to higher net earnings offset by a lesser impact from the net change in non-cash working capital items and lower amortization and depreciation. The net change in non-cash working capital items of $29.8 million for fiscal 2021 was mostly due to the increase of accounts payables and the increase in accrued compensation and employee-related liabilities, mainly from performance-based compensation to our members. This was partially offset by the decrease related to accrued vacation and the collection of tax credits.

The timing of our working capital inflows and outflows will always have an impact on the cash flow from operations.

5.7.2. Cash Used in Investing Activities

For Q4 2021, $80.1 million was used in investing activities while $68.0 million was used in the prior year.

The following table provides a summary of the generation and use of cash from investing activities:

For the three months ended September 30,	2021					Change
In thousands of CAD
Business acquisitions	****	(4,496	)	7,083		****	(11,579	)
Purchase of property, plant and equipment	****	(31,992	)	(31,513	)	****	(479	)
Additions to contract costs	****	(15,201	)	(19,166	)	****	3,965	****
Additions to intangible assets	****	(28,636	)	(29,410	)	****	774	****
Net change in<br>short-term investments and purchase of long-term investments	****	216	****	5,010		****	(4,794	)
Cash used in investingactivities	****	(80,109	)	(67,996	)	****	(12,113	)

The increase of $12.1 million in cash used in investing activities during the three months ended September 30, 2021 was mainly due to higher investment in business acquisitions.

5.7.3. Cash Used in Financing Activities

For the three months ended September 30,	2021			Change
In thousands of CAD
Increase of long-term debt	****	1,851,997	8,055	****	1,843,942
Repayment of long-term debt	****	(1,845,702)	(65,667)	****	(1,780,035)
Payment of lease<br>liabilities	****	(38,845)	(39,820)	****	975
	****	(32,550)	(97,432)	****	64,882
Repayment of debt assumed in a business acquisition	****	—	(38)	****	38
Settlement of derivative financial instruments	****	(6,992)	(3,903)	****	(3,089)
Issuance of<br>Class A subordinate voting shares	****	9,498	10,649	****	(1,151)
Cash used in financingactivities	****	(30,044)	(90,724)	****	60,680

During Q4 2021, we increased by $1,852.0 million our long-term debt mainly driven by the issuance of senior unsecured notes for an amount of $1,847.3 million as outlined in the section 2.5. of the present document, and repaid $1,845.7 million of our long-term debt mainly due by the repayment in full of the 2020 Term Loan in an amount of $1,583.5 million (US$1,250.0 million), and the scheduled repayments of senior unsecured notes in the amount of $259.7 million. We also paid $38.8 million of lease liabilities. During Q4 2020, we used $65.7 million to reduce our long-term debt, mainly driven by scheduled repayments on senior unsecured notes in the amount of $65.9 million, and we paid $39.8 million of lease liabilities.

In Q4 2021, we received $9.5 million in proceeds from the exercise of stock options, compared to $10.6 million during the same period last year.

FISCAL 2021 RESULTS – 47

MANAGEMENT’S DISCUSSION AND ANALYSIS

6.	Eight Quarter Summary
As at and for the three months ended	Sep. 30,2021	Jun. 30,2021	Mar. 31,2021	Dec. 31,2020	Sep. 30,2020	Jun. 30,2020	Mar. 31,2020	Dec. 31,2019
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In millions of CAD unless otherwise noted
Growth
Revenue	3,007.5	3,021.4	3,078.5	3,019.4	2,925.6	3,052.7	3,131.1	3,054.7
Year-over-year revenue growth	2.8%	(1.0%)	(1.7%)	(1.2%)	(1.1%)	(2.2%)	2.0%	3.1%
Constant currency year-over-year revenue growth	6.4%	3.5%	(1.7%)	(3.6%)	(4.5%)	(3.5%)	3.0%	4.8%
Backlog	23,059	23,345	23,094	22,769	22,673	22,295	22,994	22,292
Bookings	2,921	3,634	3,892	3,397	3,474	2,841	2,783	2,749
Book-to-bill ratio	97.1%	120.3%	126.4%	112.5%	118.8%	93.1%	88.9%	90.0%
Book-to-bill ratio trailing twelve<br>months	114.2%	119.5%	112.6%	103.0%	97.4%	96.6%	97.0%	101.3%
Profitability
Adjusted EBIT^1^	493.3	476.8	486.3	495.7	457.6	448.0	483.2	474.1
Adjusted EBIT margin	16.4%	15.8%	15.8%	16.4%	15.6%	14.7%	15.4%	15.5%
Net earnings	345.9	338.5	341.2	343.5	251.9	260.9	314.8	290.2
Net earnings margin	11.5%	11.2%	11.1%	11.4%	8.6%	8.5%	10.1%	9.5%
Diluted EPS (in dollars)	1.39	1.36	1.34	1.32	0.96	1.00	1.18	1.06
Net earnings excluding specific items^1^	346.9	339.0	341.9	347.2	318.4	308.4	338.4	334.9
Net earnings margin excluding specific items	11.5%	11.2%	11.1%	11.5%	10.9%	10.1%	10.8%	11.0%
Diluted EPS excluding specific items (in dollars)^1^	1.40	1.36	1.35	1.33	1.22	1.18	1.26	1.23
Liquidity
Cash provided by operating activities	526.9	418.9	572.6	597.5	492.0	584.8	396.5	465.3
As a % of revenue	17.5%	13.9%	18.6%	19.8%	16.8%	19.2%	12.7%	15.2%
Days sales outstanding	45	44	39	44	47	48	51	49
Capital structure
Net debt	2,535.9	2,956.6	2,938.7	2,672.5	2,777.9	3,243.5	3,792.3	2,810.6
Net debt to capitalization ratio	26.6%	30.9%	30.9%	27.1%	27.7%	31.8%	35.9%	28.4%
Return on equity	19.8%	18.4%	17.2%	16.6%	16.0%	17.3%	18.0%	18.0%
Return on invested capital	14.9%	13.8%	12.8%	12.4%	12.1%	13.0%	13.9%	14.4%
Balance sheet
Cash and cash equivalents, and short-term	1,700.2	1,267.1	1,339.8	1,675.1	1,709.5	1,371.1	314.0	223.2
investments
Total assets	15,021.0	14,599.3	14,719.9	15,271.0	15,550.4	15,343.3	14,597.2	13,863.6
Long-term financial liabilities^2^	3,659.8	3,453.0	3,508.1	3,598.1	4,030.6	4,363.5	3,889.1	2,766.3
^1^	Please refer to sections 3.7. and 3.8.3. of each quarter’s respective MD&A for the reconciliation of non-GAAP financial measures for the quarterly periods of 2020 and 2021. For Fiscal 2020 year ending period, please refer to sections 5.6. and 5.6.1.
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^2^	Long-term financial liabilities include the long-term portion of the debt, long-term portion of lease liabilities and the<br>long-term derivative financial instruments.
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There are factors causing quarterly variances which may not be reflective of the Company’s future performance. There is seasonality in system integration and consulting work, and the quarterly performance of these operations is impacted by occurrences such as vacations and the number of statutory holidays in any given quarter. Managed IT and business process services contracts are affected to a lesser extent by seasonality. Also, the workflow from some clients may fluctuate from quarter to quarter based on their business cycle and the seasonality of their own operations. Further, the savings that we generate for a client on a given managed IT and business process services contract may temporarily reduce our revenue stream from this client, as these savings may not be immediately offset by additional work performed for this client.

Cash flow from operating activities could vary significantly from quarter to quarter depending on the timing of monthly payments received from large clients, cash requirements associated with large acquisitions, managed IT and business

process services contracts and projects, the timing of the reimbursements for various tax credits as well as profit sharing payments to members and the timing of restructuring cost payments.

Foreign exchange fluctuations can also contribute to quarterly variances as our percentage of operations in foreign countries evolves. The effect from these variances is primarily on our revenue and to a much lesser extent, on our margin as we benefit, as much as possible, from natural hedges.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

7.	Changes in Accounting Policies

The audited consolidated financial statements for the year ended September 30, 2021 and 2020 include all adjustments that CGI’s management considers necessary for the fair presentation of its financial position, results of operations, and cash flows.

CHANGE IN ACCOUNTING POLICY - ACCRUEDCOMPENSATION AND EMPLOYEE-RELATED LIABILITIES

During the year ended September 30, 2021, the Company modified the presentation of employee’s related liabilities which mainly include payroll related benefits accruals and remittances due to governments to reflect a preferable classification of the nature of these items. Previously under Accounts payable and accrued liabilities these items are now included under Accrued compensation and employee-related liabilities for an amount of $229.7 million as at September 30, 2021. An amount of $211.8 million, as at September 30, 2020, was reclassified for comparability.

ADOPTION OF ACCOUNTING INTERPRETATION

Configuration or customization costs in a cloud computing arrangement - IAS 38

For the year ended September 30, 2021, the Company considered and applied the IFRS Interpretations Committee agenda decision on configuration or customization costs in a cloud computing arrangement, more specifically on Software as a Service arrangements. The agenda decision clarifies that configuration or customization costs under such arrangements often do not meet the capitalization criteria under IAS 38 Intangible assets. Judgement is required to determine if the capitalization criteria are met. The adoption of the interpretation was considered retrospectively and did not have a material impact on the Company’s consolidated financial statements.

FUTURE ACCOUNTING STANDARD CHANGES

The following standard is effective as of October 1, 2021 for the Company.

IBOR reform with amendments to IFRS 9, IAS 39, IFRS 7 and IFRS 16

In August 2020, the IASB issued Interest Rate Benchmark Reform-Phase 2, which amends IFRS 9 Financial Instruments, IAS 39 FinancialInstruments: Recognition and Measurement, IFRS 7 Financial Instruments: Disclosures and IFRS 16 Leases. The amendments complement those issued in 2019 and focus on the effects on financial statements when a company replaces the old interest rate benchmark with an alternative benchmark rate as a result of the reform.

For financial instruments at amortized cost, the amendment introduces a practical expedient such that if a change to contractual cash flow occurs as a direct consequence of the interbank offered rates (IBORs) reform and on economically equivalent terms to the previous basis, it will not result in an immediate gain or loss recognition. As for hedge accounting, the practical expedient allows hedge instruments relationship directly affected by the reform to continue. However, additional ineffectiveness might need to be recorded.

The Company has financial instruments exposed to the 1 month USD Libor rate which is planned to expire in June 2023. As at September 30, 2021, the only instruments with a maturity date subsequent to June 2023 directly impacted by the IBORs reform are the unsecured committed term loan credit facility and the related cross-currency interest rate swaps (the hedging instruments) expiring in December 2023.

The implementation of this amendment will result in no impact on the Company’s consolidated financial statements on adoption date. The Company is currently managing the process to transition the existing impacted agreements to an alternative rate.

The following standard has been issued and will be effective on October 1, 2022 for the Company, with earlier application permitted. The Company is currently evaluating the impact of this standard on its consolidated financial statements.

Onerous contracts – Cost of Fulfilling a Contract - Amendments to IAS 37

In May, 2020, the IASB amended IAS 37 Provisions, Contingent Liabilities and Contingent Assets. The amendment clarifies that for assessing whether a contract is onerous, the cost of fulfilling the contract includes both the incremental cost of fulfilling that contract and an allocation of other costs that relates directly to fulfilling the contract.

The following standards have been issued and will be effective on October 1, 2023 for the Company, with earlier application permitted. The Company is currently evaluating the impact of those standards on its consolidated financial statements.

Classification of Liabilities as Current or Non-current – Amendments to IAS 1

In January, 2020, the IASB amended IAS 1 Presentation of FinancialStatements. The amendment clarifies that the classification of liabilities as current or non-current is based on rights that are in existence at the end of the reporting period which only impacts the presentation of liabilities in the balance sheet. The classification is unaffected by expectations about whether the Company will exercise its right to defer settlement of a liability.

Disclosure of Accounting Policy Information – Amendments to IAS 1 and IFRS Practice Statement 2

In February, 2021, the IASB amended IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2 Making Materiality Judgements to require the Company to disclose its material accounting policy information rather than its significant accounting policies.

Definition of Accounting Estimates– Amendments to IAS 8

In February, 2021, the IASB amended IAS 8 Accounting Policies, Changes in Accounting estimates and Errors to introduce a definition of accounting estimates and to help entities distinguish changes in accounting policies from changes in accounting estimates. This distinction is important because changes in accounting policies must be applied retrospectively while changes in accounting estimates are accounted for prospectively.

Deferred Tax related to Assets and Liabilities arising from a Single Transaction –Amendments to IAS 12

In May 2021, the IASB amended IAS 12 Income Taxes, to narrow the scope of the initial recognition exemption so that it does not apply to transactions that give rise to equal and offsetting temporary differences.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

8.	Critical Accounting Estimates

The Company’s significant accounting policies are described in note 3 of the audited consolidated financial statements for the years ended September 30, 2021 and 2020. Certain of these accounting policies, listed below, require management to make accounting estimates and judgements that affect the reported amounts of assets, liabilities and equity and the accompanying disclosures at the date of the audited consolidated financial statements as well as the reported amounts of revenue and expenses during the reporting period. These accounting estimates are considered critical because they require management to make subjective and/or complex judgements that are inherently uncertain and because they could have a material impact on the presentation of our financial condition, changes in financial condition or results of operations.

The uncertainties around the COVID-19 pandemic required the use of judgements and estimates which resulted in no material impact for the period ended September 30, 2021. The Company will continue to monitor the impact of the development of the COVID-19 pandemic in future reporting periods.

Areas impacted by estimates	Consolidated<br> <br>balance<br><br><br>sheets		Consolidated statements of earnings
		Revenue	Cost of<br><br><br>services,<br> <br>sellingand administrative	Amortization anddepreciation	Net finance costs	Income<br><br><br>taxes
Revenue recognition^1^	✓	✓	✓
Goodwill impairment	✓			✓
Right-of-use assets	✓			✓	✓
Business combinations	✓	✓	✓	✓		✓
Income taxes	✓					✓
Litigation and claims	✓	✓	✓
^1^	Affects the balance sheet through accounts receivable, work in progress, provision and deferred revenue.<br>
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Revenue recognition

Relative selling price

If an arrangement involves the provision of multiple performance obligations, the total arrangement value is allocated to each performance obligation based on its relative stand-alone selling price. At least on a yearly basis, the Company reviews its best estimate of the stand-alone selling price which is established by using a reasonable range of prices for the various services and solutions offered by the Company based on local market information available. Information used in determining the range is mainly based on recent contracts signed and the economic environment. A change in the range could have a material impact on the allocation of total arrangement value, and therefore on the amount and timing of revenue recognition.

Business consulting, strategic IT consulting and andsystems integration under fixed fee arrangements

Revenue from business consulting, strategic IT consulting and and systems integration services under fixed-fee arrangements is recognized using the percentage-of-completion method over time, as the Company has no alternative use for the asset created and has an enforceable right to payment for performance completed to date. The Company primarily uses labour costs or labour hours to measure the progress towards completion. Project managers monitor and re-evaluate project forecasts on a monthly basis. Forecasts are reviewed to consider factors such as: changes to the scope of the contracts, delays in reaching milestones and new complexities in the project delivery. Forecasts can also be affected by market risks such as the availability and retention of qualified IT professionals and/or the ability of the subcontractors to perform their obligations within agreed upon budget and time frames. To the extent that actual labour hours or labour costs

could vary from estimates, adjustments to revenue following the review of the costs to complete on projects are reflected in the period in which the facts that give rise to the revision occur. Whenever the total costs are forecasted to be higher than the total revenue, a provision for an onerous revenue-generating contract is recorded.

Goodwill impairment

The carrying value of goodwill is tested for impairment annually or if events or changes in circumstances indicate that the carrying value may be impaired. In order to determine if a goodwill impairment test is required, management reviews different factors on a quarterly basis, such as changes in technological or market environment, changes in assumptions used to derive the weighted average cost of capital and actual financial performance compared to planned performance.

The recoverable amount of each segment has been determined based on its value in use calculation, which includes estimates about their future financial performance based on cash flows approved by management. However, factors such as our ability to continue developing and expanding services offered to address emerging business demands and technology trends, a lengthened sales cycle and our ability to hire and retain qualified IT professionals affect future cash flows, and actual results might differ from future cash flows used in the goodwill impairment test. Key assumptions used in goodwill impairment testing are presented in note 12 of the audited consolidated financial statements for the years ended September 30, 2021 and 2020. Historically, the Company has not recorded an impairment charge on goodwill.

Right-of-use assets

Estimates of the lease term

The Company estimates the lease term in order to calculate the value of the lease liability at the initial date of the lease. Management uses judgement to determine the appropriate lease term based on the conditions of each lease. The Company considers all facts that create incentive to exercise an extension option or not to take a termination option including leasehold improvements, significant modification of the underlying asset or a business decision. The extension or termination options are only included in the lease term if it is reasonably certain of being exercised.

Discount rate for leases

The discount rate is used to determine the initial carrying amount of the lease liabilities and the right-of-use assets. The Company estimates the incremental borrowing rate for each lease or portfolio of leased assets, as most of the implicit interest rates in the leases are not readily determinable. To calculate the incremental borrowing rate, the Company considers its creditworthiness, the term of the arrangement, any collateral received and the economic environment. The incremental borrowing rates are subject to change mainly due to changes in the economic environment.

A change in the assumptions used to determine the lease term could result in a significant impact on the right-of-use assets and the lease liabilities presented in the consolidated balance sheet as well as in the depreciation of the right-of-use assets and interest expense on lease liabilities.

Business combinations

Management makes assumptions when determining the acquisition-date fair value of the identifiable tangible and intangible assets acquired and liabilities assumed which involve estimates, such as the forecasting of future cash flows, discount rates and the useful lives of the assets acquired.

Additionally, management’s judgement is required in determining whether an intangible asset is identifiable and should be recorded separately from goodwill.

Changes in the above assumptions, estimates and judgements could affect our acquisition-date fair values and therefore could have material impacts on our audited consolidated financial statements. These changes are recorded as part of the purchase price allocation and therefore result in corresponding goodwill adjustments if they occurred during the measurement period, which does not exceed one year. All other subsequent changes are recorded in our consolidated statement of earnings.

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MANAGEMENT’S DISCUSSION AND ANALYSIS

Income taxes

Deferred tax assets are recognized for unused tax losses and deductible temporary differences to the extent that it is probable that taxable profit will be available for their utilization. The Company considers the analysis of forecast and future tax planning strategies. Estimates of taxable profit are made based on the forecast by jurisdiction which are aligned with goodwill impairment testing assumptions, on an undiscounted basis. In addition, management considers factors such as substantively enacted tax rates, the history of the taxable profits and availability of tax strategies. Due to the uncertainty and the variability of the factors mentioned above, deferred tax assets are subject to change. Management reviews its assumptions on a quarterly basis and adjusts the deferred tax assets when appropriate.

The Company is subject to income tax laws in numerous jurisdictions. Judgement is required in determining the worldwide provision for income taxes as the determination of tax liabilities and assets involves uncertainties in the interpretation of complex tax regulations and requires estimates and assumptions considering the existing facts and circumstances. The Company provides for potential tax liabilities based on the most likely amount of the possible outcomes. Estimates are reviewed each reporting period and updated, based on new information available, and could result in changes to the income tax liabilities and deferred tax liabilities in the period in which such determinations are made.

Litigation and claims

Provisions are recognized when the Company has a present legal or constructive obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. The accrued litigation and legal claim provisions are based on historical experience, current trends and other assumptions that are believed to be reasonable under the circumstances. Estimates include the period in which the underlying cause of the claim occurred and the degree of probability of an unfavourable outcome. Management reviews assumptions and facts surrounding outstanding litigation and claims on a quarterly basis, involves external counsel when necessary and adjusts such provisions accordingly. The Company has to be compliant with applicable law in many jurisdictions which increases the complexity of determining the adequate provision following a litigation review. Since the outcome of such litigation and claims is not predictable with assurance, those provisions are subject to change. Adjustments to litigation and claims provisions are reflected in the period when the facts that give rise to an adjustment occur.

9.	Integrity of Disclosure

The Board of Directors has the responsibility under its charter and under the securities laws that govern CGI’s continuous disclosure obligations to oversee CGI’s compliance with its continuous and timely disclosure obligations, as well as the integrity of the Company’s internal controls and management information systems. The Board of Directors carries out this responsibility mainly through its Audit and Risk Management Committee.

CGI’s Audit and Risk Management Committee is composed entirely of independent directors who meet the independence and experience requirements of National Instrument 52-110 adopted by the Canadian Securities Administrators as well as those of the New York Stock Exchange (NYSE) and the U.S. Securities and Exchange Commission (SEC). The role and responsibilities of the Audit and Risk Management Committee include: (i) reviewing public disclosure documents containing financial information concerning CGI; (ii) identifying and examining material financial and operating risks to which the Company is exposed, reviewing the various policies and practices of the Company that are intended to manage those risks, and reporting on a regular basis to the Board of Directors concerning risk management; (iii) reviewing and assessing the effectiveness of CGI’s accounting policies and practices concerning financial reporting; (iv) reviewing and monitoring CGI’s internal control procedures, programs and policies and assessing their adequacy and effectiveness; (v) reviewing the adequacy of CGI’s internal audit resources including the mandate and objectives of the internal auditor; (vi) recommending to the Board of Directors the appointment of the external auditor, assessing the external auditor’s independence, reviewing the terms of their engagement, conducting an annual auditor’s performance assessment, and pursuing ongoing discussions with them; (vii) reviewing related party transactions in accordance with the rules of the NYSE and other applicable laws and regulations; (viii) reviewing the audit procedures including the proposed scope of the external auditor’s examinations; and (ix) performing such other functions as are usually attributed to audit committees or as directed by the Board of Directors. In making its recommendation to the Board of Directors in relation to the annual appointment of the external auditor, the Audit and Risk Management Committee conducts an annual assessment of the external auditor’s performance following the recommendations of the Chartered Professional Accountants of Canada. The formal assessment is concluded in advance of the Annual General Meeting of Shareholders and is conducted with the assistance of key CGI personnel.

The Company has established and maintains disclosure controls and procedures designed to provide reasonable assurance that material information relating to the Company is made known to the Chief Executive Officer and the Chief Financial Officer by others, particularly during the period in which annual and interim filings are prepared, and that information required to be disclosed by the Company in its annual fillings, interim filings or other reports filed or submitted by the Company under Canadian and U.S. securities laws is recorded, processed, summarized and reported within the time periods specified under those laws and the related rules. As at September 30, 2021, management evaluated, under the supervision of and with the participation of the Chief Executive Officer and the Chief Financial Officer, the effectiveness of the Company’s disclosure controls and procedures as defined under National Instrument 52-109 adopted by the Canadian Securities Administrators and in Rule 13(a)-15(e) under the U.S. Securities Exchange Act of 1934, as amended. Based on that evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as at September 30, 2021.

The Company has also established and maintains internal control over financial reporting, as defined under National Instrument 52-109 and in Rule 13(a)-15(f) under the U.S. Securities Exchange Act of 1934, as amended. The Company’s internal control over financial reporting is a process designed under the supervision of the Chief Executive Officer and the Chief Financial Officer, and effected by management and other key CGI personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS. However, because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements on a timely basis. Management evaluated, under the supervision of and with the participation of the Chief Executive Officer and the Chief Financial Officer, the effectiveness of the Company’s internal controls over financial reporting as at September 30, 2021, based on the criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO 2013). Based on that evaluation, management, under the supervision of and with the participation of the Chief Executive Officer as well as the

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MANAGEMENT’S DISCUSSION AND ANALYSIS

Chief Financial Officer concluded that the Company’s internal controls over financial reporting was effective as at September 30, 2021.

10.	Risk Environment

10.1. RISKS AND UNCERTAINTIES

While we are confident about our long-term prospects, a number of risks and uncertainties could affect our ability to achieve our strategic vision and objectives for growth. The following risks and uncertainties should be considered when evaluating our potential as an investment.

10.1.1. External Risks

We may be adversely affected by volatile, negative or uncertain economic and political conditions and the effects of these conditions onour clients’ businesses and levels of activity.

Economic and political conditions in the markets in which we operate have a bearing upon the results of our operations, directly and through their effect on the level of business activity of our clients. We can neither predict the impact that current economic and political conditions will have on our future revenue, nor predict changes in economic conditions or future political uncertainty. The level of activity of our clients and potential clients may be affected by an economic downturn or political uncertainty. Clients may cancel, reduce or defer existing contracts and delay entering into new engagements and may decide to undertake fewer IT systems projects resulting in limited implementation of new technology and smaller engagements. Since there may be fewer engagements, competition may increase and pricing for services may decline as competitors may decrease rates to maintain or increase their market share in our industry and this may trigger pricing adjustments related to the benchmarking obligations within our contracts. Economic downturns and political uncertainty make it more difficult to meet business objectives and may divert management’s attention and time from operating and growing our business. Our business, results of operations and financial condition **** could be negatively affected as a result of these factors.

We may be adversely affected by other external risks, such as terrorism, armed conflict, labour orsocial unrest, criminal activity, hostilities, disease, illness or health emergencies, natural disasters and climate change and the effects of these conditions on our clients and our business.

Additional external risks that could adversely impact the markets in which we operate, our industry and our business include terrorism, armed conflict, labour or social unrest, criminal activity, regional and international hostilities and international responses to these hostilities, and disease, illness or health emergencies that affect local, national or international economies. Additionally, the potential impacts of climate change are unpredictable and natural disasters, sea-level rise, floods, droughts or other weather-related events present additional external risks. Climate change risks can arise from physical risks (risks related to the physical effects of climate change) and transition risks (risks related to regulatory, legal, technological and market changes from a transition to a low-carbon economy) which may affect us or affect the financial viability of our clients leading to a reduction of demand and loss of business from such clients. Each of these risks could negatively impact our business, results of operation and financial condition.

Pandemics, including the COVID-19 pandemic, have caused, and may in the future cause disruptions in ouroperations and the operations of our clients (which may lead to increased risk and frequency of cybersecurity incidents), market volatility and economic disruption, which could adversely affect us.

A pandemic, including the COVID-19 pandemic, can create significant volatility and uncertainty and economic disruption. A pandemic poses the risk that our members, clients, contractors and business partners may be prevented from, or restricted in, conducting business activities for an indefinite period, including due to the transmission of the disease or to emergency measures or restrictions that may be requested or mandated by governmental authorities. The COVID-19 pandemic has resulted in governments worldwide enacting emergency measures to combat the spread of the virus, including the implementation of travel bans or restrictions, lock-downs, quarantine periods, social distancing, work-from-home policies and the temporary closure of non-essential businesses. Companies are also taking precautions, such as requiring employees to work remotely, imposing travel restrictions and temporarily closing businesses. These emergency measures and restrictions, and future measures and restrictions taken in response to the COVID-19 pandemic or other pandemics,

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MANAGEMENT’S DISCUSSION AND ANALYSIS

have caused and may cause material disruptions to businesses globally and are likely to have an adverse impact on global economic conditions and consumer confidence and spending, which could materially adversely affect our business. A pandemic, including the COVID-19 pandemic, may affect the financial viability of our clients, and could cause them to exit certain business lines, or change the terms on which they are willing to purchase services and solutions. Clients may also slow down decision-making, delay planned work, seek to terminate existing agreements, not renew existing agreements or be unable to pay us in accordance with the terms of existing agreements. As a result of increased remote working arrangements due to a pandemic, the exposure to, and reliance on, networked systems and the internet can increase. This can lead to increased risk and frequency of cybersecurity incidents. Cybersecurity incidents can result from unintentional events or deliberate attacks by insiders or third parties, including cybercriminals, competitors, nation-states, and hacktivists. Any of these events could cause or contribute to risk and uncertainty and could adversely affect our business, results of operations and financial condition.

As a result of the COVID-19 pandemic, global equity and capital markets have experienced and may continue to experience significant volatility and weakness. Governments and central banks have reacted with significant monetary and fiscal interventions designed to stabilize economic conditions. The duration and impact of the COVID-19 pandemic are unknown at this time, as is the efficacy and duration of government and central bank interventions. The extent to which the COVID-19 pandemic impacts our future business, including our operations and the market for our securities, will depend on future developments, which are highly uncertain and cannot be predicted at this time, and include the duration, severity and scope of the outbreak, the actions taken to contain the COVID-19 pandemic, and the actions taken to prevent and treat the COVID-19 pandemic. It is not possible to reliably estimate the length and severity of these developments or the negative impact on our financial results, share price and financial condition in future periods. Many of the risks, uncertainties and other risk factors identified are, and will be, amplified by the COVID-19 pandemic. While we have implemented business continuity plans and taken additional steps and measures, there can be no assurance that these actions, in response to the COVID-19 pandemic, will succeed in preventing or mitigating the negative impacts of the COVID-19 pandemic on our Company, members, clients, contractors and business partners, which may continue post COVID-19 pandemic.

10.1.2. Risks Related to our Industry

The markets in which we operate are highly competitive, and we might not be able to compete effectively.

CGI operates in a global marketplace in which competition among providers of IT services is vigorous. Some of our competitors possess greater financial, marketing and sales resources, and larger geographic scope in certain parts of the world than we do, which, in turn, provides them with additional leverage in the competition for contracts. In certain niche, regional or metropolitan markets, we face smaller competitors with specialized capabilities who may be able to provide competing services with greater economic efficiency. Some of our competitors have more significant operations than we do in lower cost countries that can serve as a platform from which to provide services worldwide on terms that may be more favourable. Increased competition among IT services firms often results in corresponding pressure on prices. There can be no assurance that we will succeed in providing competitively priced services at levels of service and quality that will enable us to maintain and grow our market share.

We derive significant revenue from contracts awarded through competitive bidding processes, which limit the Company’s ability to negotiate certain contractual terms and conditions. Risks related to competitive bidding processes also involve substantial cost and managerial time and effort spent by the Company to prepare bids and proposals for contracts that may or may not be awarded to the Company, as well as expenses and delays that may arise if the Company’s competitors protest or challenge awards made to the Company pursuant to competitive bidding processes.

We may not be able to hire or retain enough qualified IT professionals to support ouroperations.

There is strong demand for qualified individuals in the IT industry. Hiring and retaining a sufficient number of individuals with the desired knowledge and skill set may be difficult. Therefore, it is important that we remain able to successfully attract and retain highly qualified professionals and establish an effective succession plan. If our comprehensive programs aimed at attracting and retaining qualified and dedicated professionals do not ensure that we have staff in sufficient numbers and with the appropriate training, expertise and suitable government security clearances required to serve the

needs of our clients, we may have to rely on subcontractors or transfers of staff to fill resulting gaps. If our succession plan fails to identify those with potential or to develop these key individuals, we may be unable to replace key members who retire or leave the Company and may be required to recruit and/or train new employees. This might result in lost revenue or increased costs, thereby putting pressure on our net earnings.

We may not be able to continue developing andexpanding service offerings to address emerging business demands and technology trends.

The rapid pace of change in all aspects of IT and the continually declining costs of acquiring and maintaining IT infrastructure mean that we must anticipate changes in our clients’ needs. To do so, we must adapt our services and our solutions so that we maintain and improve our competitive advantage and remain able to provide cost effective services and solutions. The markets in which we operate are extremely competitive and there can be no assurance that we will succeed in developing and adapting our business in a timely manner nor that we will be able to penetrate new markets successfully. If we do not keep pace, our ability to retain existing clients and gain new business may be adversely affected. This may result in pressure on our revenue, net earnings and resulting cash flow from operations.

We may infringe on the intellectual property rights of others

Despite our efforts, the steps we take to ensure that our services and offerings do not infringe on the intellectual property rights of third parties may not be adequate to prevent infringement and, as a result, claims may be asserted against us or our clients. We enter into licensing agreements for the right to use intellectual property and may otherwise offer indemnities against liability and damages arising from third-party claims of patent, copyright, trademark or trade secret infringement in respect of our own intellectual property or software or other solutions developed for our clients. In some instances, the amount of these indemnity claims could be greater than the revenue we receive from the client (see Indemnity Provisions and Guarantees). Intellectual property claims or litigation could be time-consuming and costly, harm our reputation, require us to enter into additional royalty or licensing arrangements, or prevent us from providing some solutions or services. Any limitation on our ability to sell or use solutions or services that incorporate software or technologies that are the subject of a claim could cause us to lose revenue-generating opportunities or require us to incur additional expenses to modify solutions for future projects.

Wemay be unable to protect our intellectual property rights.

Our success depends, in part, on our ability to protect our proprietary methodologies, processes, know-how, tools, techniques and other intellectual property that we use to provide our services. Although CGI takes reasonable steps (e.g. available copyright protection and, in some cases, patent protection) to protect and enforce its intellectual property rights, there is no assurance that such measures will be enforceable or adequate. The cost of enforcing our rights can be substantial and, in certain cases, may prove to be uneconomic. In addition, the laws of some countries in which we conduct business may offer only limited intellectual property rights protection. Despite our efforts, the steps taken to protect our intellectual property may not be adequate to prevent or deter infringement or other misappropriation of intellectual property, and we may not be able to detect unauthorized use of our intellectual property, or take appropriate steps to enforce our intellectual property rights.

We face risks associated with benchmarking provisions within certain contracts.

Some of our managed IT and business process services contracts contain clauses allowing our clients to externally benchmark the pricing of agreed upon services against those offered by other providers in a peer comparison group. The uniqueness of the client environment should be factored in and, if results indicate a difference outside the agreed upon tolerance, we may be required to work with clients to reset the pricing for their services. There can be no assurance that benchmarks will produce accurate or reliable data, including pricing data. This may result in pressure on our revenue, net earnings and resulting cash flow from operations.

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10.1.3. Risks Related to our Business

We may not be able to successfully implement and manage our growth strategy.

CGI’s Build and Buy growth strategy is founded on four pillars of growth: first, profitable organic growth through contract wins, renewals and extensions with new and existing clients in our targeted industries; second, the pursuit of new large long-term managed IT and business process services contracts; third, metro market acquisitions; and fourth, large transformational acquisitions.

Our ability to achieve organic growth is affected by a number of factors outside of our control, including a lengthening of our sales cycle for major managed IT and business process services contracts.

Our ability to grow through metro market and transformational acquisitions requires that we identify suitable acquisition targets that we correctly evaluate their potential as transactions that will meet our financial and operational objectives, and that we successfully integrate them into our business. There can, however, be no assurance that we will be able to identify suitable acquisition targets and consummate additional acquisitions that meet our economic thresholds, or that future acquisitions will be successfully integrated into our operations and yield the tangible accretive value that had been expected.

If we are unable to implement our Build and Buy growth strategy, we will likely be unable to maintain our historic or expected growth rates.

We may experience fluctuations in our financial results, making it difficult to predict future results.

Our ability to maintain and increase our revenue is affected not only by our success in implementing our Build and Buy growth strategy, but also by a number of other factors, which could cause the Company’s financial results to fluctuate. These factors include: (i) our ability to introduce and deliver new services and business solutions; (ii) our potential exposure to a lengthened sales cycle; (iii) the cyclicality of the purchases of our technology services and solutions; (iv) the nature of our client’s business (for example, if a client encounters financial difficulty (including as a result of external risks such as climate change or a pandemic), it may be forced to cancel, reduce or defer existing contracts with us); and (v) the structure of our agreements with clients (for example, some of CGI’s agreements with clients contain clauses allowing the clients to benchmark the pricing of services provided by CGI against the prices offered by other providers). These, and other factors, make it difficult to predict financial results for any given period.

Our revenues may be exposed to fluctuations based on our business mix.

The proportion of revenue that we generate from shorter-term system integration and consulting projects (SI&C), versus revenue from long-term managed IT and business process services contracts, will fluctuate at times, affected by acquisitions or other transactions. An increased exposure to revenue from SI&C projects may result in greater quarterly revenue variations, as the revenue from SI&C projects does not provide long-term consistency in revenue.

Our current operations are international in scope, subjecting us to avariety of financial, regulatory, cultural, political and social challenges.

We manage operations in numerous countries around the world including offshore delivery centers. The scope of our operations (including our offshore delivery centers) subjects us to issues that can negatively impact our operations, including: (i) currency fluctuations (see Foreign exchangefluctuations); (ii) the burden of complying with a wide variety of national and local laws (see Changes in the laws and regulations within the jurisdictions in which we operate); (iii) the differences in and uncertainties arising from local business culture and practices; (iv) and political, social and economic instability. Any or all of these risks could impact our global business operations and cause our profitability to decline.

If we are unable to manage the organizational challenges associated with our size, we may not beable to achieve our growth and profitability objectives.

Our culture, standards, core values, internal controls and our policies need to be instilled across newly acquired businesses as well as maintained within our existing operations. To effectively communicate and manage these standards throughout a large global organization is both challenging and time consuming. Newly acquired businesses may be resistant to change and may remain attached to past methods, standards and practices which may compromise our business agility in pursuing opportunities. Cultural differences in various countries may also present barriers to introducing new ideas or aligning our vision and strategy with the rest of the organization. If we cannot overcome these obstacles in maintaining a strategic bond throughout the Company worldwide, we may not be able to achieve our growth and profitability objectives.

Changes in our tax levels, as well as reviews, audits, investigations and tax proceedings or changes in tax laws orin their interpretation or enforcement, could have a material adverse effect on our net income or cash flow.

In estimating our income tax payable, management uses accounting principles to determine income tax positions that are likely to be sustained by applicable tax authorities. However, there is no assurance that our tax benefits or tax liability will not materially differ from our estimates or expectations. The tax legislation, regulation and interpretation that apply to our operations are continually changing. In addition, future tax benefits and liabilities are dependent on factors that are inherently uncertain and subject to change, including future earnings, future tax rates, and anticipated business mix in the various jurisdictions in which we operate. Moreover, our tax returns are continually subject to review by applicable tax authorities and we are subject to ongoing audits, investigations and tax proceedings in various jurisdictions. These tax authorities determine the actual amounts of taxes payable or receivable, of any future tax benefits or liabilities and of income tax expense that we may ultimately recognize. Tax authorities have disagreed and may in the future disagree with our income tax positions and are taking increasingly aggressive positions in respect of income tax positions, including with respect to intercompany transactions.

Our effective tax rate in the future could be adversely affected by challenges to intercompany transactions, changes in the value of deferred tax assets and liabilities, changes in tax law or in their interpretation or enforcement, changes in the mix of earnings in countries with differing statutory tax rates, the expiration of tax benefits and changes in accounting principles. Tax rates in the jurisdictions in which we operate may change as a result of shifting economic conditions and tax policies.

A number of countries in which the Company does business have implemented, or are considering implementing, changes in relevant tax, accounting and other laws, regulations and interpretations and the overall tax environment has made it increasingly challenging for multinational corporations to operate with certainty about taxation in many jurisdictions.

Any of the above factors could have a material adverse effect on our net income or cash flow by affecting our operations and profitability, our effective tax rate, the availability of tax credits, the cost of the services we provide, and the availability of deductions for operating losses.

Reductions, eliminations or amendments to government sponsored programs from which we currently benefit may have a material adverse effect on ournet earnings or cash flow.

We benefit from government sponsored programs designed to support research and development, labour and economic growth in jurisdictions where we operate. Government programs reflect government policy and depend on various political and economic factors. There can be no assurance that such government programs will continue to be available to the Company in the future, or will not be reduced, amended or eliminated. Any future government program reductions or eliminations or other amendments to the tax credit programs could increase operating or capital expenditures incurred by the Company and have a material adverse effect on its net earnings or cash flow.

We are exposed to credit risks with respect to accounts receivable and work inprogress.

In order to sustain our cash flow from operations, we must invoice and collect the amounts owed to us in an efficient and timely manner. Although we maintain provisions to account for anticipated shortfalls in amounts collected from clients, the provisions we take are based on management estimates and on our assessment of our clients’ creditworthiness which may prove to be inadequate in the light of actual results. To the extent that we fail to perform our services in accordance with our

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contracts and our clients’ reasonable expectations, and to the extent that we fail to invoice clients and to collect the amounts owed to the Company for our services correctly in a timely manner, our collections could suffer, which could materially adversely affect our revenue, net earnings and cash flow. In addition, a prolonged economic downturn may cause clients to curtail or defer projects, impair their ability to pay for services already provided, and ultimately cause them to default on existing contracts, in each case, causing a shortfall in revenue and impairing our future prospects.

Material developments regarding our major commercial clients resulting from such causes as changes in financial condition, mergersor business acquisitions could impair our future prospects and growth strategy.

Consolidation among our clients resulting from mergers and acquisitions may result in loss or reduction of business when the successor business’ IT needs are served by another service provider or are provided by the successor company’s own personnel. Growth in a client’s IT needs resulting from acquisitions or operations may mean that we no longer have a sufficient geographic scope or the critical mass to serve the client’s needs efficiently, resulting in the loss of the client’s business and impairing our future prospects. There can be no assurance that we will be able to achieve the objectives of our growth strategy in order to maintain and increase our geographic scope and critical mass in our targeted markets.

We face risks associated with early termination of our contractual agreements.

If we should fail to deliver our services according to contractual agreements, some of our clients could elect to terminate contracts before their agreed expiry date, which would result in a reduction of our earnings and cash flow and may impact the value of our backlog of orders. In addition, a number of our managed IT and business process services contractual agreements have termination for convenience and change of control clauses according to which a change in the client’s intentions or a change in control of CGI could lead to a termination of these agreements. Early contract termination can also result from the exercise of a legal right or when circumstances that are beyond our control or beyond the control of our client prevent the contract from continuing. In cases of early termination, we may not be able to recover capitalized contract costs and we may not be able to eliminate ongoing costs incurred to support the contract.

We may not be able to successfully estimate the cost, timing and resources requiredto fulfill our contracts, which could have a material adverse effect on our net earnings.

In order to generate acceptable margins, our pricing for services is dependent on our ability to accurately estimate the costs and timing for completing projects or long-term managed IT and business process services contracts, which can be based on a client’s bid specification, sometimes in advance of the final determination of the full scope and design of the contract. In addition, a significant portion of our project-oriented contracts are performed on a fixed-price basis. Billing for fixed-price engagements is carried out in accordance with the contract terms agreed upon with our client, and revenue is recognized based on the percentage of effort incurred to date in relation to the total estimated efforts to be incurred over the duration of the respective contract. These estimates reflect our best judgement regarding the efficiencies of our methodologies and professionals as we plan to apply them to the contracts in accordance with the CGI Client Partnership Management Framework (CPMF), a framework that contains high standards of contract management to be applied throughout the Company. If we fail to apply the CPMF correctly or if we are unsuccessful in accurately estimating the time or resources required to fulfill our obligations under a contract, or if unexpected factors, including those outside of our control, arise, there may be an impact on costs or the delivery schedule which could have a material adverse effect on our expected net earnings.

We rely on relationships with other providers in order to generate business and fulfill certain of our contracts; if we fail to maintain ourrelationships with these providers, our business, prospects, financial condition and operating results could be materially adversely affected.

We derive revenue from contracts where we enter into teaming agreements with other providers. In some teaming agreements we are the prime contractor whereas in others we act as a subcontractor. In both cases, we rely on our relationships with other providers to generate business and we expect to continue to do so in the foreseeable future. Where we act as prime contractor, if we fail to maintain our relationships with other providers, we may have difficulty attracting suitable participants in our teaming agreements. Similarly, where we act as subcontractor, if our relationships are impaired,

other providers might reduce the work they award to us, award that work to our competitors, or choose to offer the services directly to the client in order to compete with our business. In either case, if we fail to maintain our relationship with these providers or if our relationship with these providers is otherwise impaired, our business, prospects, financial condition and operating results could be materially adversely affected.

Our profitability may be adversely affected if our partnersare unable to deliver on their commitments

Increasingly large and complex contracts may require that we rely on third party subcontractors including software and hardware vendors to help us fulfill our commitments. Under such circumstances, our success depends on the ability of the third parties to perform their obligations within agreed upon budgets and timeframes. If our partners fail to deliver, our ability to complete the contract may be adversely affected, which could have an unfavourable impact on our profitability.

Indemnity provisions and guarantees in various agreements to which we are party may require us to compensate our counterparties.

In the normal course of business, we enter into agreements that may provide for indemnification and guarantees to counterparties in transactions such as consulting and managed IT and business process services, business divestitures, lease agreements and financial obligations. These indemnification undertakings and guarantees may require us to compensate counterparties for costs and losses incurred as a result of various events, including breaches of representations and warranties, intellectual property right infringement, claims that may arise while providing services or as a result of litigation that may be suffered by counterparties.

We may be unable to maintain our human resources utilization rates.

In order to maintain our net earnings, it is important that we maintain the appropriate availability of professional resources in each of our geographies by having a high utilization rate while still being able to assign additional resources to new work. Maintaining an efficient utilization rate requires us to forecast our need for professional resources accurately and to manage recruitment activities, professional training programs, attrition rates and restructuring programs appropriately. To the extent that we fail to do so, or to the extent that laws and regulations restrict our ability to do so, our utilization rates may be reduced; thereby having an impact on our revenue and profitability. Conversely, we may find that we do not have sufficient resources to deploy against new business opportunities in which case our ability to grow our revenue would suffer.

If the business awarded to us by various U.S. federal government departments and agencies is limited, reduced or eliminated, our business,prospects, financial condition and operating results could be materially and adversely affected.

We derive a significant portion of our revenue from the services we provide to various U.S. federal government departments and agencies. We expect that this will continue for the foreseeable future. There can be, however, no assurance that each such U.S. federal government department and agency will continue to utilize our services to the same extent, or at all in the future. In the event that a major U.S. federal government department or agency were to limit, reduce, or eliminate the business it awards to us, we might be unable to recover the lost revenue with work from other U.S. federal government departments or agencies or other clients, and our business, prospects, financial condition and operating results could be materially and adversely affected. Although IFRS considers a national government and its departments and agencies as a single client, our client base in the U.S. government economic sector is in fact diversified with contracts from many different departments and agencies.

Changes in government spending policies or budget priorities could directly affect our financial performance. Among the factors that could harm our government contracting business are: the curtailment of governments’ use of consulting and IT services firms; a significant decline in spending by governments in general, or by specific departments or agencies in particular; the adoption of new legislation and/or actions affecting companies that provide services to governments; delays in the payment of our invoices by government; and general economic and political conditions. These or other factors could cause government agencies and departments to reduce their purchases under contracts, to exercise their right to terminate contracts, to issue temporary stop work orders, or not to exercise options to renew contracts, any of which would cause us to lose future revenue. Government spending reductions or budget cutbacks at these departments or agencies could

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materially harm our continued performance under these contracts, or limit the awarding of additional contracts from these agencies.

Changes in the laws and regulations within the jurisdictions in which we operate may have a material adverseeffect on our global business operations and profitability.

Our global operations require us to be compliant with laws and regulations in many jurisdictions on matters such as: anti-corruption, trade restrictions, immigration, taxation, securities, antitrust, data privacy, labour relations, and the environment, amongst others. Complying with these diverse requirements worldwide is a challenge and consumes significant resources. The laws and regulations frequently change and some may impose conflicting requirements which may expose us to penalties for non-compliance and harm our reputation. Furthermore, in some jurisdictions, we may face the absence of effective laws and regulations to protect our intellectual property rights and there may be restrictions on the movement of cash and other assets, on the import and export of certain technologies, and on the repatriation of earnings. Any or all of these risks could impact our global business operations and cause our profitability to decline.

Our business with the U.S. federal government departments and agencies also requires that we comply with complex laws and regulations relating to government contracts. These laws and regulations relate to the integrity of the procurement process, impose disclosure requirements, and address national security concerns, among other matters. For instance, we are routinely subject to audits by U.S. government departments and agencies with respect to compliance with these rules. If we fail to comply with these requirements we may incur penalties and sanctions, including contract termination, suspension of payments, suspension or debarment from doing business with the federal government, and fines.

Changes to, and delays or defects in, our client projects and solutions maysubject us to legal liability, which could materially adversely affect our business, operating results and financial condition and may negatively affect our professional reputation.

We create, implement and maintain IT solutions that are often critical to the operations of our clients’ business. Our ability to complete large projects as expected could be adversely affected by unanticipated delays, renegotiations, and changing client requirements or project delays. Also, our solutions may suffer from defects that adversely affect their performance; they may not meet our clients’ requirements or may fail to perform in accordance with applicable service levels. Such problems could subject us to legal liability, which could materially adversely affect our business, operating results and financial condition, and may negatively affect our professional reputation. While we typically use reasonable efforts to include provisions in our contracts which are designed to limit our exposure to legal claims relating to our services and the applications we develop, we may not always be able to include such provisions and, where we are successful, such provisions may not protect us adequately or may not be enforceable under some circumstances or under the laws of some jurisdictions.

We are subject to stringent and changing privacy laws, regulations and standards, information security policies and contractual obligations relatedto data privacy and security. Our actual or perceived failure to comply with such obligations could expose us to government sanctions and cause damage to our brand and reputation.

Our business often requires that our clients’ applications and information, which may include their proprietary information and personal information they manage, be processed and stored on our networks and systems, and in data centers that we manage. We also process and store proprietary information relating to our business, and personal information relating to our members. The Company is subject to numerous laws and regulations designed to protect information, such as the European Union’s General Data Protection Regulation (GDPR), various laws and regulations in Canada, the U.S. and other countries in which the Company operates governing the protection of health or other personally identifiable information and data privacy. These laws and regulations are increasing in number and complexity and are being adopted and amended with greater frequency, which results in greater compliance risk and cost. The potential financial penalties for non-compliance with these laws and regulations have significantly increased with the adoption of the GDPR. The Company’s Chief Data Protection Officer oversees the Company’s compliance with the laws that protect the privacy of personal information. The Company faces risks inherent in protecting the security of such personal data which have grown in complexity, magnitude and frequency in recent years. Digital information and equipment are subject to loss, theft or

destruction, and services that we provide may become temporarily unavailable as a result of those risks, or upon an equipment or system malfunction. The causes of such failures include human error in the course of normal operations (including from advertent or inadvertent actions or inactions by our members), maintenance and upgrading activities, as well as hacking, vandalism (including denial of service attacks and computer viruses), theft, and unauthorized access, as well as power outages or surges, floods, fires, natural disasters and many other causes. The measures that we take to protect against all information infrastructure risks, including both physical and logical controls on access to premises and information may prove in some circumstances to be inadequate to prevent the improper disclosure, loss, theft, misappropriation of, unauthorized access to, or destruction of client information, or service interruptions. Such events may expose the Company to financial loss arising from the costs of remediation and those arising from litigation from our clients and third parties (including under the laws that protect the privacy of personal information), claims and damages, as well as expose the Company to government sanctions and damage to our brand and reputation.

We could face legal, reputational and financial risks if we fail to protect our and/or client data from security incidents or cyberattacks.

In the current environment, the volume, velocity and creativity of security threats and cyber-attacks continue to grow, this includes criminal hackers, hacktivists, state-sponsored organizations, industrial espionage, employee misconduct, and human or technological errors. As a worldwide IT and business consulting firm providing services to both the private and public sectors, we process and store increasingly large amounts of data for our clients, including proprietary information and personal information. Consequently, our business could be negatively impacted by physical and cyber threats, which could affect our future sales and financial position or increase our costs and expenses.

An unauthorized disclosure of sensitive or confidential client or member information, including cyber-attacks or other security breaches, could cause a loss of data, give rise to remediation or other expenses, expose us to liability under federal and state laws, and subject us to litigation and investigations, which could have an adverse effect on our business, cash flows, financial condition and results of operations. These security risks to the Company include potential attacks not only of our own solutions, services and systems, but also those of our clients, contractors, business partners, vendors and other third parties. Any local issue in a business unit could have a global impact on the entire Company, thus visibility and timely escalation on potential issues are key.

The Company’s Chief Security Officer is responsible for overseeing the security of the Company. We seek to detect and investigate all security incidents and to prevent their occurrence or recurrence, by: (i) developing and regularly reviewing policies and standards related to information security, data privacy, physical security and business continuity; (ii) monitoring the Company’s performance against these policies and standards; (iii) developing strategies intended to seek to mitigate the Company’s risks, including through security trainings for all employees to increase awareness of potential cyber threats; (iv) implementing security measures to ensure an appropriate level of control based on the nature of the information and the inherent risks attached thereto, including through access management, security monitoring and testing to mitigate and help detect and respond to attempts to gain unauthorized access to information systems and networks; and (v) working with the industry and governments against cyber threats. However, because of the evolving nature and sophistication of these security threats, there can be no assurance that our safeguards will detect or prevent the occurrence of material cyber breaches, intrusions or attacks.

We are regularly the target of attempted cyber and other security threats and must continuously monitor and develop our information technology networks and infrastructure to prevent, detect, address and mitigate the risk of unauthorized access, misuse, computer viruses and other events that could have a security impact. If security protection does not evolve at the same pace as threats, a growing gap on our level of protection will be created. Technology evolution and global trends like digital transformation, cloud and mobile computing amongst others are disrupting the security operating model, thus security should evolve to address new relevant security requirements and build new capabilities to address the changes. Increasing detection and automated response capabilities are key to improve visibility and contain any negative potential impact. Automating security processes and integrating with IT, business and security solutions could address shortage of technical security staff and avoid introducing human intervention and errors.

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Insider or employee cyber and security threats are increasingly a concern for all large companies, including ours. CGI is continuously working to install new, and upgrade its existing, information technology systems and provide member awareness training around phishing, malware, and other cyber risks to ensure that the Company is protected, to the greatest extent possible, against cyber risks and security breaches. While CGI selects third-party vendors carefully, it does not control their actions. Any problems caused by these third parties, including those resulting from breakdowns or other disruptions in communication services provided by a vendor, failure of a vendor to handle current or higher volumes, cyber-attacks and security breaches at a vendor could adversely affect our ability to deliver solutions and services to our customers and otherwise conduct business. Furthermore, while our liability insurance policy covers cyber risks, there is no assurance that such insurance coverage will be sufficient in type or amount to cover the costs, damages, liabilities or losses that could result from security breaches, cyber-attacks and other related breaches. As the cyber threat landscape evolves, the Company may find it necessary to make further significant investments to protect data and infrastructure. Occurrence of any of the aforementioned security threats could expose the Company, our clients or other third parties to potential liability, litigation, and regulatory action, as well as the loss of client confidence, loss of existing or potential clients, loss of sensitive government contracts, damage to brand and reputation, and other financial loss.

Damage to our reputation may harmour ability to obtain new clients and retain our existing clients.

CGI’s reputation as a capable and trustworthy service provider and long-term business partner is key to our ability to compete effectively in the market for IT services. The nature of our operations exposes us to the potential loss, unauthorized access to, or destruction of our clients’ information, as well as temporary service interruptions. Depending on the nature of the information or services, such events may have a negative impact on how the Company is perceived in the marketplace. Under such circumstances, our ability to obtain new clients and retain existing clients could suffer with a resulting impact on our revenue and net earnings.

We may be unable to integrate new operations,which could impact our ability to achieve our growth and profitability objectives.

The successful integration of new operations arising from our acquisition strategy or from large managed IT and business process services contracts requires that a substantial amount of management time and attention be focused on integration tasks. Management time that is devoted to integration activities may detract from management’s normal operations focus with resulting pressure on the revenues and earnings from our existing operations. In addition, we may face complex and potentially time-consuming challenges in implementing uniform standards, controls, procedures and policies across new operations when harmonizing their activities with those of our existing business units. Integration activities can result in unanticipated operational problems, expenses and liabilities. If we are not successful in executing our integration strategies in a timely and cost-effective manner, we will have difficulty achieving our growth and profitability objectives.

Our revenue and profitability may decline and the accuracy of our financial reporting may be impaired if we fail to design, implement, monitor andmaintain effective internal controls.

Due to the inherent limitations of internal controls including the circumvention or overriding of controls, or fraud, there can only be reasonable assurance that the Company’s internal controls will detect and prevent a misstatement. If the Company is unable to design, implement, monitor and maintain effective internal controls throughout its different business environments, the efficiency of our operations might suffer, resulting in a decline in revenue and profitability, and the accuracy of our financial reporting could be impaired.

Future funding requirements may affect our business and growth opportunities and we may not have access to favourable financing opportunities inthe future.

The Company’s future growth is contingent on the execution of its business strategy, which, in turn, is dependent on its ability to grow the business organically as well as through business acquisitions. In the event we would need to raise additional funds through equity or debt financing to fund any currently unidentified or unplanned future acquisitions and other growth opportunities, there can be no assurance that such financing will be available in amounts and on terms acceptable to us. Factors such as capital market disruptions, political, economic and financial market instability,

government policies, central bank monetary policies, and changes to bank regulations, could reduce the availability of capital or increase the cost of such capital. Our ability to raise the required funding depends on prevailing market conditions, the capacity of the capital markets to meet our equity and/or debt financing needs in a timely fashion and on the basis of interest rates and/or share prices that are reasonable in the context of our commercial objectives. Increasing interest rates, volatility in our share price, and the capacity of our current lenders to meet our additional liquidity requirements are all factors that may have a material adverse effect on any acquisitions or growth activities that we may, in the future, identify or plan. If we are unable to obtain the necessary funding, we may be unable to achieve our growth objectives.

The inability to service our debt and other financial obligations, or our inability to fulfill our financial covenants,could have a material adverse effect on our business, financial condition and results of operations.

The Company has a substantial amount of debt and significant interest payment requirements. A portion of cash flows from operations goes to the payment of interest on the Company’s indebtedness. The Company’s ability to service its debt and other financial obligations is affected by prevailing economic conditions in the markets that we serve and financial, business and other factors, many of which are beyond our control. We may be unable to generate sufficient cash flow from operations and future borrowings or other financing may be unavailable in an amount sufficient to enable us to fund our future financial obligations or our other liquidity needs. In addition, we are party to a number of financing agreements, including our credit facilities, and the indentures governing our senior unsecured notes, which agreements, indentures and instruments contain financial and other covenants, including covenants that require us to maintain financial ratios and/or other financial or other covenants. If we were to breach the covenants contained in our financing agreements, we may be required to redeem, repay, repurchase or refinance our existing debt obligations prior to their scheduled maturity and our ability to do so may be restricted or limited by the prevailing conditions in the capital markets, available liquidity and other factors. Our inability to service our debt and other financial obligations, or our inability to fulfill our financial or other covenants in our financing agreements, could have an adverse effect on our business, financial condition and results of operations.

We may be adversely affected by interest ratefluctuations.

Although a significant portion of the Company’s indebtedness bears interest at fixed rates, the Company remains exposed to interest rate risk under certain of its credit facilities. If interest rates increase, debt service obligations on the variable rate indebtedness would increase even though the amount borrowed remained the same, and net income and cash flows would decrease, which could materially adversely affect the Company’s financial condition and operating results.

Changes in theCompany’s creditworthiness or credit ratings could affect the cost at which the Company can access capital or credit markets.

The Company and each of the U.S. dollar denominated and Canadian dollar denominated senior unsecured notes received credit ratings. Credit ratings are generally evaluated and determined by independent third parties and may be impacted by events outside of the Company’s control, as well as other material decisions made by the Company. Credit rating agencies perform independent analysis when assigning credit ratings and such analysis includes a number of criteria. Such criteria are reviewed on an on-going basis and are therefore subject to change. Any rating assigned to the Company or to our debt securities may be revised or withdrawn entirely by a rating agency if, in that rating agency’s judgment, future circumstances relating to the basis of the rating, such as adverse changes, so warrant. Real or anticipated changes in the perceived creditworthiness of the Company and/or in the credit rating of its debt obligations could affect the market value of such debt obligations and the ability of the Company to access capital or credit markets, and/or the cost at which it can do so.

We may be adversely affected by currency fluctuations.

The majority of our revenue and costs are denominated in currencies other than the Canadian dollar. Foreign exchange fluctuations impact the results of our operations as they are reported in Canadian dollars. This risk is partially mitigated by a natural hedge in matching our costs with revenue denominated in the same currency and through the use of derivatives in our global hedging strategy. However, as we continue our global expansion, natural hedges may begin to diminish and the

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use of hedging contracts exposes us to the risk that financial institutions could fail to perform their obligations under our hedging instruments. Furthermore, there can be no assurance that our hedging strategy and arrangements will offset the impact of fluctuations in currency exchange rates, which could materially adversely affect our business revenues, results of operations, financial condition or prospects. Other than the use of financial products to deliver on our hedging strategy, we do not trade derivative financial instruments.

Our functional and reporting currency is the Canadian dollar. As such, our U.S., U.K., Australian, European and Asian investments, operations and assets are exposed to net change in currency exchange rates. Volatility in exchange rates could have an adverse effect on our business, financial condition and results of operations.

10.2. LEGAL PROCEEDINGS

The Company is involved in legal proceedings, audits, claims and litigation arising in the ordinary course of its business. Certain of these matters seek damages in significant amounts. Although the outcome of such matters is not predictable with assurance, the Company has no reason to believe that the disposition of any such current matter could reasonably be expected to have a material adverse effect on the Company’s financial position, results of operations or the ability to carry on any of its business activities.

FISCAL 2021 RESULTS – 69

MANAGEMENT’S DISCUSSION AND ANALYSIS

Transfer Agent

Computershare Investor Services Inc.

(800) 564-6253

Investor Relations

Maher Yaghi

Vice-President, Investor Relations

Telephone: (514) 415-3651

maher.yaghi@cgi.com

1350 René-Lévesque Boulevard West

25^th^ Floor

Montréal, Quebec

H3G 1T4

Canada

Management’s and Auditors’ Reports

MANAGEMENT’S STATEMENT OF RESPONSIBILITY FOR FINANCIAL REPORTING

The management of CGI Inc. (the Company) is responsible for the preparation and integrity of the consolidated financial statements and the Management’s Discussion and Analysis (MD&A). The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board and necessarily include some amounts that are based on management’s best estimates and judgement. Financial and operating data elsewhere in the MD&A are consistent with that contained in the accompanying consolidated financial statements.

To fulfill its responsibility, management has developed, and continues to maintain, systems of internal controls reinforced by the Company’s standards of conduct and ethics, as set out in written policies to ensure the reliability of the financial information and to safeguard its assets. The Company’s consolidated financial statements and the effectiveness of internal control over financial reporting are subject to audit by an Independent Registered Public Accounting Firm, PricewaterhouseCoopers LLP, whose report follows. PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm appointed by our shareholders upon the recommendation of the Audit and Risk Management Committee of the Board of Directors, has performed an independent audit of the consolidated balance sheets as at September 30, 2021 and 2020 and the related consolidated statements of earnings, comprehensive income, changes in equity and cash flows for the years ended September 30, 2021 and 2020 and the effectiveness of our internal control over financial reporting as at September 30, 2021.

Members of the Audit and Risk Management Committee of the Board of Directors, all of whom are independent of the Company, meet regularly with PricewaterhouseCoopers LLP and with management to discuss internal controls in the financial reporting process, auditing matters and financial reporting issues and formulate the appropriate recommendations to the Board of Directors. PricewaterhouseCoopers LLP has full and unrestricted access to the Audit and Risk Management Committee. The consolidated financial statements and MD&A have been reviewed and approved by the Board of Directors.

George D. Schindler	François Boulanger
President and Chief Executive Officer	Executive Vice-President and Chief Financial Officer
November 9, 2021

FISCAL 2021 RESULTS – 71

CONSOLIDATED FINANCIAL STATEMENTS

Management’s and Auditors’ Reports

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting. The Company’s internal control over financial reporting is a process designed, under the supervision of and with the participation of the President and Chief Executive Officer as well as the Executive Vice-President and Chief Financial Officer, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s consolidated financial statements for external reporting purposes in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).

The Company’s internal control over financial reporting includes policies and procedures that:

Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect transactions and dispositions of the assets of the Company;
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with IFRS as issued by the IASB, and that receipts and expenditures are being made only in accordance with authorizations of management and the directors of the Company; and,
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the Company’s consolidated financial statements.

All internal control systems have inherent limitations; therefore, even where internal control over financial reporting is determined to be effective, it can provide only reasonable assurance. Projections of any evaluation of effectiveness to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management, under the supervision of and with the participation of the President and Chief Executive Officer as well as the Executive Vice-President and Chief Financial Officer, conducted an assessment of the effectiveness of the Company’s internal control over financial reporting based on the criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this assessment, management has determined the Company’s internal control over financial reporting as at September 30, 2021 was effective.

The effectiveness of the Company’s internal control over financial reporting as of September 30, 2021 has been audited by PricewaterhouseCoopers LLP, an Independent Registered Public Accounting Firm, as stated in their report which appears herein.

George D. Schindler	François Boulanger
President and Chief Executive Officer	Executive Vice-President and Chief Financial Officer
November 9, 2021

Management’s and Auditors’ Reports

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of CGI Inc.

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of CGI Inc. and its subsidiaries (together, the Company) as of September 30, 2021 and 2020, and the related consolidated statements of earnings, comprehensive income, changes in equity and cash flows for the years then ended, including the related notes (collectively referred to as the consolidated financial statements). We also have audited the Company’s internal control over financial reporting as of September 30, 2021, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of September 30, 2021 and 2020, and its financial performance and its cash flows for the years then ended in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of September 30, 2021, based on criteria established in Internal Control –Integrated Framework (2013) issued by the COSO.

Change in Accounting Principle

As discussed in Note 3 to the consolidated financial statements, the Company changed the manner in which it accounts for leases as of October 1, 2019.

Basis for Opinions

The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

FISCAL 2021 RESULTS – 73

CONSOLIDATED FINANCIAL STATEMENTS

Management’s and Auditors’ Reports

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (continued)

Definition and Limitations of Internal Control over Financial Reporting (continued)

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the Audit and Risk Management Committee of the Board of Directors and that (i) relates to accounts or disclosures that are material to the consolidated financial statements; and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Revenue Recognition – Estimates of total expected labour costs or total expected labour hours for business consulting, strategic informationtechnology (IT) consulting and systems integration under fixed-fee arrangements

As described in Notes 3 and 28 to the consolidated financial statements, the Company recognizes revenue for business consulting, strategic IT consulting and systems integration under fixed-fee arrangements using the percentage-of-completion method over time. For the year ended September 30, 2021, revenue from business consulting, strategic IT consulting and systems integration under fixed-fee arrangements makes up a portion of the Company’s total revenues of $12,126,793,000. The selection of the measure of progress towards completion requires management judgment and is based on the nature of the services to be provided. As disclosed by management, the Company relies on estimates of total expected labour costs or total expected labour hours to complete the service, which are compared to labour costs or labour hours incurred to date, to arrive at an estimate of the percentage of revenue earned to date. Management regularly reviews underlying estimates of total expected labour costs or total expected labour hours. Management has disclosed that there are many factors that can affect the estimates of total expected labour costs or total expected labour hours, including, but not limited to, changes to the scope of the contracts, delays in reaching milestones and new complexities in the project delivery.

The principal considerations for our determination that performing procedures relating to Revenue Recognition – Estimates of total expected labour costs or total expected labour hours for business consulting, strategic IT consulting and systems integration under fixed-fee arrangements is a critical audit matter are (i) there was significant judgment by management when developing the estimates of total expected labour costs or total expected labour hours; and (ii) there was significant auditor judgment and effort in performing procedures to evaluate the estimates of total expected labour costs or total expected labour hours, including the assessment of management’s judgment about the Company’s ability to properly assess the factors that can affect the significant assumptions related to the estimates of total expected labour costs or total expected labour hours to complete.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the revenue recognition process, including controls over the determination of estimates of total expected labour costs or total expected labour hours. These procedures also included, among others, evaluating and testing management’s process, on a sample basis, for determining the estimates of total expected labour costs or total expected labour hours, which included evaluating the reasonableness of significant assumptions, including the total expected labour costs or total expected labour hours to complete, used by management by (i) testing total labour costs or total labour hours incurred to supporting evidence; (ii) performing a comparison of the sum of total labour costs or total labour hours incurred and the total expected labour costs or total expected labour hours to complete to the originally estimated costs or hours; and (iii) evaluating the process of the timely identification of factors that can affect the total expected labour costs or total expected labour hours, including but not limited to changes to the scope of the contracts, delays in reaching milestones and new complexities in the project delivery.

/s/ PricewaterhouseCoopers LLP^1^

Montréal, Quebec, Canada

November 9, 2021

We have served as the Company’s auditor since 2019.

FCPA auditor, FCA, public accountancy permit No. A115888

Consolidated Statements of Earnings

For the years ended September 30

(in thousands of Canadian dollars, except per share data)

		2021
		****
Revenue	28	****	12,126,793	12,164,115
Operating expenses
Costs of services, selling and administrative	23	****	10,178,164	10,302,068
Acquisition-related and integration costs	26d	****	7,371	76,794
Restructuring costs		****	—	155,411
Net finance costs	25	****	106,798	114,474
Foreign exchange gain		****	(3,532	(899
		****	10,288,801	10,647,848
Earnings before income taxes		****	1,837,992	1,516,267
Income tax expense	16	****	468,920	398,405
Net earnings		****	1,369,072	1,117,862
Earnings per share
Basic earnings per share	21	****	5.50	4.27
Diluted earnings per share	21	****	5.41	4.20

All values are in US Dollars.

See Notes to the Consolidated Financial Statements.

FISCAL 2021 RESULTS – 75

CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Statements of Comprehensive Income

For the years ended September 30

(in thousands of Canadian dollars)



Net earnings	****
Items that will be reclassified subsequently to net earnings (net of income<br>taxes):
Net unrealized (losses) gains on translating financial statements of foreign<br>operations	)
Net gains on cross-currency swaps and on translating long-term debt designated<br>as hedges of net investments in foreign operations	****
Deferred (costs) gains of hedging on cross-currency swaps	)
Net unrealized gains (losses) on cash flow hedges	****	)
Net unrealized (losses) gains on financial assets at fair value through other<br>comprehensive income	)
Items that will not be reclassified subsequently to net earnings (net of income<br>taxes):
Net remeasurement gains (losses) on defined<br>benefit plans	****	)
Other comprehensive (loss) income	)
Comprehensive income	****

All values are in US Dollars.

See Notes to the Consolidated Financial Statements.

Consolidated Balance Sheets

As at September 30

(in thousands of Canadian dollars)

		2021
		****		$
Assets
Current assets
Cash and cash equivalents	27e and 31	****	1,699,206	1,707,985
Accounts receivable	4 and 31	****	1,231,452	1,219,302
Work in progress		****	1,045,058	1,075,252
Current financial assets	31	****	18,961	18,500
Prepaid expenses and other current assets		****	172,371	160,406
Income taxes		****	4,936	29,363
Total current assets before funds held for clients		****	4,171,984	4,210,808
Funds held for clients	5	****	593,154	725,178
Total current assets		****	4,765,138	4,935,986
Property, plant and equipment	6	****	352,092	372,946
Right-of-use assets	7	****	586,207	666,865
Contract costs	8	****	230,562	239,376
Intangible assets	9	****	506,793	521,462
Other long-term assets	10	****	191,512	163,739
Long-term financial assets	11	****	152,658	156,569
Deferred tax assets	16	****	96,358	113,484
Goodwill	12	****	8,139,701	8,379,931
		****	15,021,021	15,550,358
Liabilities
Current liabilities
Accounts payable and accrued liabilities		****	891,374	814,119
Accrued compensation and employee-related liabilities	3	****	1,084,014	884,619
Current portion of long-term debt	14	****	392,727	310,764
Deferred revenue		****	445,740	426,393
Income taxes		****	160,651	136,928
Current portion of lease liabilities		****	167,819	178,720
Provisions	13	****	63,549	175,632
Current derivative financial instruments	31	****	6,497	8,328
Total current liabilities before clients’ funds obligations		****	3,212,371	2,935,503
Clients’ funds obligations		****	591,101	720,322
Total current liabilities		****	3,803,472	3,655,825
Long-term debt	14	****	3,008,929	3,276,331
Long-term income taxes		****	5,719	6,720
Long-term lease liabilities		****	609,121	697,650
Long-term provisions	13	****	26,576	23,888
Other long-term liabilities	15	****	202,662	185,374
Long-term derivative financial instruments	31	****	41,784	56,622
Deferred tax liabilities	16	****	132,038	158,341
Retirement benefits obligations	17	****	204,488	225,447
		****	8,034,789	8,286,198
Equity
Retained earnings		****	4,732,229	4,703,642
Accumulated other comprehensive income	18	****	331,580	545,710
Capital stock	19	****	1,632,705	1,761,873
Contributed surplus		****	289,718	252,935
		****	6,986,232	7,264,160
		****	15,021,021	15,550,358

All values are in US Dollars.

See Notes to the Consolidated Financial Statements.

Approved by the Board of Directors	George D. Schindler<br><br><br><br> <br>Director	Serge Godin <br><br> <br>Director

FISCAL 2021 RESULTS – 77

CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Statements of Changes in Equity

For the years ended September 30

(in thousands of Canadian dollars)

	Notes		Retainedearnings		Accumulatedother<br><br><br>comprehensive<br> <br>income		Capitalstock		Contributed<br><br><br>surplus		Total<br><br><br>equity
			****		****		****		****		****
Balance as at September 30, 2020				4,703,642		545,710		1,761,873		252,935		7,264,160
Net earnings				1,369,072		—		—		—		1,369,072
Other comprehensive loss				—		(214,130		—		—		(214,130
Comprehensive income (loss)				1,369,072		(214,130		—		—		1,154,942
Share-based payment costs				—		—		—		45,592		45,592
Income tax impact associated with stock options				—		—		—		11,114		11,114
Exercise of stock options		19		—		—		73,827		(12,773		61,054
Exercise of performance share units		19		—		—		7,150		(7,150		—
Purchase for cancellation of Class A subordinate voting shares		19		(1,340,485		—		(178,741		—		(1,519,226
Purchase of Class A subordinate voting<br>shares held in trusts		19		—		—		(31,404		—		(31,404
Balance as at September 30,2021			****	4,732,229	****	331,580	****	1,632,705	****	289,718	****	6,986,232
	Notes		Retained<br>earnings		Accumulated<br>other<br><br><br>comprehensive<br> <br>income		Capital<br>stock		Contributed<br>surplus		Total<br><br><br>equity

Balance as at September 30, 2019				4,557,855		176,694		1,903,977		245,577		6,884,103
Adoption of IFRS 16		3		(93,873		—		—		—		(93,873
Balance as at October 1, 2019				4,463,982		176,694		1,903,977		245,577		6,790,230
Net earnings				1,117,862		—		—		—		1,117,862
Other comprehensive income				—		369,016		—		—		369,016
Comprehensive income				1,117,862		369,016		—		—		1,486,878
Share-based payment costs				—		—		—		37,358		37,358
Income tax impact associated with stock options				—		—		—		(8,653		(8,653
Exercise of stock options		19		—		—		69,420		(12,269		57,151
Exercise of performance share units		19		—		—		9,078		(9,078		—
Purchase for cancellation of Class A subordinate voting shares		19		(878,202		—		(165,315		—		(1,043,517
Purchase of Class A subordinate voting<br>shares held in trusts		19		—		—		(55,287		—		(55,287
Balance as at September 30, 2020				4,703,642		545,710		1,761,873		252,935		7,264,160

All values are in US Dollars.

See Notes to the Consolidated Financial Statements.

Consolidated Statements of Cash Flows

For the years ended September 30

(in thousands of Canadian dollars)

	Notes	2021
		****
Operating activities
Net earnings		****	1,369,072	1,117,862
Adjustments for:
Amortization, depreciation and impairment	24	****	510,570	565,692
Deferred income tax (recovery) expense	16	****	(25,934	6,170
Foreign exchange loss (gain)		****	3,950	(7,956
Share-based payment costs		****	45,592	37,358
Gain on leases termination		****	(2,186	—
Loss on sale of business		****	—	1,266
Net change in<br>non-cash working capital items	27a	****	214,864	218,164
Cash provided by operating activities		****	2,115,928	1,938,556
Investing activities
Net change in short-term investments		****	446	8,414
Business acquisitions (considering the bank overdraft assumed and cash<br>acquired)		****	(98,926	(269,585
Proceeds from sale of business		****	—	2,647
Purchase of property, plant and equipment		****	(121,806	(128,478
Additions to contract costs		****	(65,001	(72,845
Additions to intangible assets		****	(113,934	(114,112
Purchase of long-term investments		****	(6,957	(10,594
Proceeds from sale of long-term<br>investments		****	8,631	12,100
Cash used in investing activities		****	(397,547	(572,453
Financing activities
Net change in unsecured committed revolving credit facility	27c	****	—	(334,370
Increase of long-term debt	27c	****	1,885,262	1,807,167
Repayment of long-term debt	27c	****	(1,888,777	(106,496
Payment of lease liabilities	27c	****	(169,674	(175,320
Repayment of debt assumed in business acquisitions	27c	****	—	(28,281
Payment for remaining shares of Acando^1^		****	—	(23,123
Settlement of derivative financial instruments	27c and 31	****	(6,992	(3,903
Purchase of Class A subordinate voting shares held in trusts	19	****	(31,404	(55,287
Purchase and cancellation of Class A subordinate voting shares	19	****	(1,502,824	(1,043,517
Issuance of Class A subordinate voting<br>shares		****	61,133	57,302
Cash (used in) provided by financing<br>activities		****	(1,653,276	94,172
Effect of foreign exchange rate changes on cash<br>and cash equivalents		****	(73,884	33,879
Net (decrease) increase in cash and cash equivalents		****	(8,779	1,494,154
Cash and cash equivalents, beginning of<br>year		****	1,707,985	213,831
Cash and cash equivalents, end ofyear		****	1,699,206	1,707,985

All values are in US Dollars.

^1^	Related to a business acquisition made during the year ended September 30, 2019.

Supplementary cash flow information (Note 27).

See Notes to the Consolidated Financial Statements.

FISCAL 2021 RESULTS – 79

CONSOLIDATED FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

For the years ended September 30, 2021 and 2020

(tabular amounts only are in thousands of Canadian dollars, except per share data)

1.	Description of business

CGI Inc. (the Company), directly or through its subsidiaries, provides managed information technology (IT) and business process services, business consulting, strategic IT consulting and systems integration, as well as the sale of software solutions to help clients effectively realize their strategies and create added value. The Company was incorporated under Part IA of the Companies Act (Québec), predecessor to the Business Corporations Act (Québec) which came into force on February 14, 2011 and its Class A subordinate voting shares are publicly traded. The executive and registered office of the Company is situated at 1350 René-Lévesque Blvd. West, Montréal, Québec, Canada, H3G 1T4.

2.	Basis of preparation

These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).

The Company’s consolidated financial statements for the years ended September 30, 2021 and 2020 were authorized for issue by the Board of Directors on November 9, 2021.

3.	Summary of significant accounting policies

CHANGE IN ACCOUNTING POLICY - ACCRUED COMPENSATION AND EMPLOYEE-RELATED LIABILITIES

During the year ended September 30, 2021, the Company modified the presentation of employee’s related liabilities which mainly include payroll related benefits accruals and remittances due to governments to reflect a preferable classification of the nature of these items. Previously under Accounts payable and accrued liabilities these items are now included under Accrued compensation and employee-related liabilities for an amount of $229,686,000 as at September 30, 2021. An amount of $211,844,000, as at September 30, 2020, was reclassified for comparability.

BASIS OF CONSOLIDATION

The consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany transactions and balances have been eliminated on consolidation.

Subsidiaries are entities controlled by the Company. The Company controls an entity when it is exposed or has right to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the relevant activities of the entity. Subsidiaries are fully consolidated from the date of acquisition and continue to be consolidated until the date control over the subsidiaries ceases.

BASIS OF MEASUREMENT

The consolidated financial statements have been prepared on a historical cost basis, except for certain financial assets and liabilities, which have been measured at fair value as described below.

USE OF JUDGEMENTS AND ESTIMATES

The preparation of the consolidated financial statements requires management to make judgements and estimates that affect the reported amounts of assets, liabilities, equity and the accompanying disclosures at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Because the use of judgements and estimates is inherent in the financial reporting process, actual results could differ.

Significant judgements and estimates about the future and other major sources of estimation uncertainty at the end of the reporting period could have a significant risk of causing a material adjustment to the carrying amounts of the following within the next financial year: revenue recognition, deferred tax assets, estimated losses on revenue-generating contracts, goodwill impairment, right-of-use assets, business combinations, provisions for uncertain tax treatments and litigation and claims.

Notes to the Consolidated Financial Statements

For the years ended September 30, 2021 and 2020

(tabular amounts only are in thousands of Canadian dollars, except per share data)

3.	Summary of significant accounting policies (continued)

USE OF JUDGEMENTS AND ESTIMATES (CONTINUED)

The judgements, apart from those involving estimations, that have the most significant effect on the amounts recognized in the consolidated financial statements are:

Revenue recognition of multiple deliverable arrangements

Assessing whether the deliverables within an arrangement are separate performance obligations requires judgement by management. A deliverable is identified as a separate performance obligation if the customer benefits from it on its own or together with resources that are readily available to the customer and if it is separately identifiable from the other deliverables in the contract. The Company assesses if the deliverables are separately identifiable in the context of the contract by determining if it is highly interrelated with other deliverables in the contract. If these criteria are not met, the deliverables are accounted for as a combined performance obligation.

Deferred tax assets

Deferred tax assets are recognized for unused tax losses to the extent that it is probable that taxable income will be available against which the losses can be utilized. Management judgement is required concerning uncertainties that exist with respect to the timing of future taxable income required to recognize a deferred tax asset. The Company recognizes an income tax benefit only when it is probable that the tax benefit will be realized in the future. In making this judgement, the Company assesses forecasts and the availability of future tax planning strategies.

A description of estimates is included in the respective sections within the Notes to the Consolidated Financial Statements.

COVID-19 pandemic

For the year ended September 30, 2021, the Company assessed the impact of the uncertainties around the COVID-19 pandemic on its balance sheet carrying amounts. This review required the use of judgements and estimates and resulted in no material impact.

The Company will continue to monitor the impact of the development of the COVID-19 pandemic in future reporting periods.

REVENUE RECOGNITION, WORK IN PROGRESS AND DEFERRED REVENUE

The Company generates revenue through the provision of managed IT and business process services, business consulting, strategic IT consulting and systems integration, as well as the sale of software solutions as described in Note 1, Description of business.

The Company provides services and products under arrangements that contain various pricing mechanisms. The Company accounts for a contract or a group of contracts when the following criteria are met: the parties to the contract have approved the contract in which their rights, their obligations and the payment terms have been identified, the contract has commercial substance, and the collectability of the consideration is probable.

A contract modification is a change in the scope or price of an existing revenue-generating customer contract. The Company accounts for a contract modification as a separate contract when the scope of the contract increases because of the addition of promised performance obligations and the price of the contract increases by an amount of consideration that reflects its stand-alone selling prices. When the contract is not accounted for as a separate contract, the Company recognizes an adjustment to revenue on the existing contract on a cumulative catch-up basis as at the date of the contract modification or, if the remaining goods and services are distinct, the Company recognizes the remaining consideration prospectively.

Revenue is recognized when or as the Company satisfies a performance obligation by transferring a promise of good or service to the customer and are measured at the amount of consideration the Company expects to be entitled to receive, including variable consideration, such as, discounts, volume rebates, service-level penalties, and incentives. Variable consideration is estimated using either the expected value method or most likely amount method and is included only to the extent it is highly probable that a significant reversal of cumulative revenue recognized will not occur. In making this judgement, management will mostly consider all information available at the time (historical, current and forecasted), the Company’s knowledge of the client or the industry, the type of services to be delivered and the specific contractual terms of each arrangement.

FISCAL 2021 RESULTS – 81

CONSOLIDATED FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

For the years ended September 30, 2021 and 2020

(tabular amounts only are in thousands of Canadian dollars, except per share data)

3.	Summary of significant accounting policies (continued)

REVENUE RECOGNITION, WORK IN PROGRESS AND DEFERRED REVENUE (CONTINUED)

Revenue from sales of third party vendor’s products, such as software licenses, hardware or services is recorded on a gross basis when the Company is a principal to the transaction and is recorded net of costs when the Company is acting as an agent between the client and vendor. To determine whether the Company is a principal or an agent, it evaluates whether control is obtained of the goods or services before they are transferred to the client. Factors generally considered include whether the Company has the primary responsibility for providing the product or service, adds meaningful value to the vendor’s product or service and has discretion establishing the price.

Relative stand-alone selling price

The Company’s arrangements often include a mix of the services and products as described below. If an arrangement involves the provision of multiple performance obligations, the total arrangement value is allocated to each performance obligations based on its relative stand-alone selling price. When estimating the stand-alone selling price of each performance obligations, the Company maximizes the use of observable prices which are established using the Company’s prices for same or similar deliverables. When observable prices are not available, the Company estimates stand-alone selling prices based on its best estimate. The best estimate of the stand-alone selling price is the price at which the Company would normally expect to offer the services or products and is established by considering a number of internal and external factors including, but not limited to, geographies, the Company’s pricing policies, internal costs and margins. Additionally, in certain circumstances, the Company may apply the residual approach when estimating the stand-alone selling price of software license products, for which the Company has not yet established the price or has not previously sold on a stand-alone basis.

The appropriate revenue recognition method is applied for each performance obligation as described below.

Managed IT and business process services

Revenue from managed IT and business process services arrangements is generally recognized over time as the services are provided at the contractual billings, which corresponds with the value provided to the client, unless there is a better measure of performance or delivery.

Business consulting, strategic ITconsulting and systems integration

Revenue from business consulting, strategic IT consulting and systems integration under time and material arrangements is recognized over time as the services are rendered, and revenue under cost-based arrangements is recognized over time as reimbursable costs are incurred. Contractual billings of such arrangements correspond with the value provided to the client, and therefore revenues are generally recognized when amounts become billable.

Revenue from business consulting, strategic IT consulting and systems integration under fixed-fee arrangements is recognized using the percentage-of-completion method over time, as the Company has no alternative use for the asset created and has an enforceable right to payment for performance completed to date. The Company primarily uses labour costs or labour hours to measure the progress towards completion. This method relies on estimates of total expected labour costs or total expected labour hours to complete the service, which are compared to labour costs or labour hours incurred to date, to arrive at an estimate of the percentage of revenue earned to date. Factors considered in the estimates include: changes in scope of the contracts, delays in reaching milestones, complexities in project delivery, availability and retention of qualified IT professionals and/or the ability of the subcontractors to perform their obligation within agreed upon budget and timeframes. Management regularly reviews underlying estimates of total expected labour costs or hours.

Softwarelicenses

Most of the Company’s software license arrangements include other services such as implementation, customization and maintenance. For these types of arrangements, revenue from a software license, when identified as a performance obligation, is recognized at a point in time upon delivery. Otherwise when the software is significantly customized, integrated or modified, it is combined with the implementation and customization services and is accounted for as described in the business consulting, strategic IT consulting and systems integration section above. Revenue from maintenance services for software licenses sold is recognized straight-line over the term of the maintenance period.

Notes to the Consolidated Financial Statements

For the years ended September 30, 2021 and 2020

(tabular amounts only are in thousands of Canadian dollars, except per share data)

3.	Summary of significant accounting policies (continued)

REVENUE RECOGNITION, WORK IN PROGRESS AND DEFERRED REVENUE (CONTINUED)

Work in progress and deferred revenue

Amounts recognized as revenue in excess of billings are classified as work in progress. Amounts received in advance of the performance of services or delivery of products are classified as deferred revenue. Work in progress and deferred revenue are presented net on a contract by-contract basis. During the year ended September 30, 2021, the revenues recognized from the short-term deferred revenue was not significantly different than what was presented as at September 30, 2020.

CASH AND CASH EQUIVALENTS

Cash and cash equivalents consist of unrestricted cash and short-term investments having a maturity of three months or less from the date of purchase.

SHORT-TERM INVESTMENTS

Short-term investments, comprise generally of term deposits, have remaining maturities over three months, but not more than one year, at the date of purchase.

FUNDS HELD FOR CLIENTS ANDCLIENTS’ FUNDS OBLIGATIONS

In connection with the Company’s payroll, tax filing and claims services, the Company collects funds for payment of payroll, taxes and claims, temporarily holds such funds until payment is due, remits the funds to the clients’ employees, appropriate tax authorities or claims holders, files tax returns and handles related regulatory correspondence and amendments. The funds held for clients include cash and long-term bonds. The Company presents the funds held for clients and related obligations separately. Funds held for clients are classified as current assets since, based upon management’s expectations, these funds are held solely for the purpose of satisfying the clients’ funds obligations, which will be repaid within one year of the consolidated balance sheet date. The market fluctuations affect the fair value of the long-term bonds. Due to those fluctuations, funds held for clients might not equal to the clients’ funds obligations.

Interest income earned and realized gains and losses on the disposal of bonds are recorded in revenue in the period that the income is earned, as the collecting, holding and remitting of these funds are critical components of providing these services.

PROPERTY, PLANT AND EQUIPMENT (PP&E)

PP&E are recorded at cost and are depreciated over their estimated useful lives using the straight-line method.

Buildings	10 to 40 years
Leasehold improvements	Lesser of the useful life or lease term
Furniture, fixtures and equipment	3 to 20 years
Computer equipment	3 to 5 years

LEASES

The Company adopted IFRS 16, Leases on October 1, 2019.

When the Company enters into contractual agreements, an assessment is performed to determine if the contract contains a lease. The Company identified lease agreements under the following categories: Properties, Motor vehicles and others as well as Computer equipment.

The Company identifies a lease if it conveys the right to control the use of an identified asset for a specific period in exchange for a determined consideration. At inception, a right-of-use asset for the underlying asset and corresponding lease liability are presented in the consolidated balance sheet measured on a present value basis except for short-term leases (expected term of 12 months or less) and leases with low value underlying asset for which payments are recorded as an expense on a straight-line basis over the lease term.

The right-of-use assets are measured at initial lease liabilities adjusted by lease payments made before the commencement date, indirect costs and cash incentives received. The right-of-use assets are depreciated on a straight-line basis over the expected lease term of the underlying asset.

FISCAL 2021 RESULTS – 83

CONSOLIDATED FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

For the years ended September 30, 2021 and 2020

(tabular amounts only are in thousands of Canadian dollars, except per share data)

3.	Summary of significant accounting policies (continued)

LEASES (CONTINUED)

Lease liabilities are measured at present value of non-cancellable payments of the expected lease term, which are mostly made of fixed payments of rent excluding maintenance fees; variable payments that are based on an index or a rate; amounts expected to be payable as residual value guaranties and extension or termination option if reasonably certain to be exercised.

Discount rate used in the present value calculation is the incremental borrowing rate unless the implicit interest rate in the lease can be readily determined. The Company estimates the incremental borrowing rate for each lease or portfolio of leased assets, as most of the implicit interest rates in the leases are not readily determinable. To calculate the incremental borrowing rate, the Company considers its credit worthiness, the term of the arrangement, any collateral received and the economic environment. The incremental borrowing rates are subject to change mainly due to changes in the economic environment.

The lease liabilities are subsequently adjusted to reflect interest on the lease liabilities and lease payments made. Lease liabilities are remeasured (along with the corresponding adjustment to the right-of-use asset), whenever the following situations occur; a modification in the lease term, a change in the assessment of an option to purchase, a modification in the residual guarantees or in future lease payments due to a change of an index or rate tied to the payments. In addition, upon partial or full termination of a lease, the difference between the carrying amounts of the lease liability and the right-of-use asset is recorded in the consolidated statements of earnings.

CONTRACT COSTS

Contract costs are comprised primarily of transition costs incurred to implement long-term managed IT and business process services contracts and incentives.

Transition costs

Transition costs consist mostly of costs associated with the installation of systems and processes, as well as conversion of the client’s applications to the Company’s platforms incurred after the award of managed IT and business process services contracts. Transition costs are comprised essentially of labour costs, including compensation and related fringe benefits, as well as subcontractor costs.

Incentives

Occasionally, incentives are granted to clients upon the signing of managed IT and business process services contracts. These incentives are granted in the form of cash payments.

Amortization of contract costs

Contract costs are amortized using the straight-line method over the period services are provided. Amortization of transition costs is included in costs of services, selling and administrative and amortization of incentives is recorded as a reduction of revenue.

Impairment of contract costs

When a contract is not expected to be profitable, the estimated loss is first applied to impair the related capitalized contract costs. The excess of the expected loss over the capitalized contract costs is recorded as onerous revenue-generating contracts in provisions. If at a future date the contract returns to profitability, the previously recognized impairment loss must be reversed. First the estimated losses on revenue-generating contracts must be reversed, and if there is still additional projected profitability then any capitalized contract costs that were impaired must be reversed. The reversal of the impairment loss is limited so that the carrying amount does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of amortization, had no impairment loss been recognized for the contract costs in prior years.

Notes to the Consolidated Financial Statements

For the years ended September 30, 2021 and 2020

(tabular amounts only are in thousands of Canadian dollars, except per share data)

3.	Summary of significant accounting policies (continued)

INTANGIBLE ASSETS

Intangible assets consist of internal-use software, business solutions, software licenses and client relationships. Internal-use software, business solutions and software licenses are recorded at cost. Internal-use software developed internally is capitalized when it meets specific capitalization criteria related to technical and financial feasibility and when the Company demonstrates its ability and intention to use it. Business solutions developed internally and marketed are capitalized when they meet specific capitalization criteria related to technical, market and financial feasibility. Internal-use software, business solutions, software licenses and client relationships acquired through business combinations are initially recorded at their fair value based on the present value of expected future cash flows, which involves estimates, such as the forecasting of future cash flows and discount rates.

Amortization of intangible assets

The Company amortizes its intangible assets using the straight-line method over their estimated useful lives.

Internal-use software	2 to 7 years
Business solutions	2 to 10 years
Software licenses	3 to 8 years
Client relationships	5 to 7 years

IMPAIRMENT OF PP&E, RIGHT-OF-USE ASSETS,INTANGIBLE ASSETS AND GOODWILL

Timing of impairment testing

The carrying values of PP&E, right-of-use assets, intangible assets and goodwill are reviewed for impairment when events or changes in circumstances indicate that the carrying value may be impaired. The Company assesses at each reporting date whether any such events or changes in circumstances exist. The carrying values of intangible assets not available for use are tested for impairment annually as at September 30. Goodwill is tested for impairment annually during the fourth quarter of each fiscal year.

Impairment testing

If any indication of impairment exists or when annual impairment testing for an asset is required, the Company estimates the recoverable amount of the asset or cash-generating unit (CGU) to which the asset relates to determine the extent of any impairment loss. The recoverable amount is the higher of an asset’s or CGU’s fair value less costs of disposal and its value in use (VIU) to the Company. The Company mainly uses the VIU. In assessing the VIU, estimated future cash flows are discounted to their present value using a discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU. In determining fair value less costs of disposal, recent market transactions are taken into account, if available. If the recoverable amount of an asset or a CGU is estimated to be less than its carrying amount, the carrying amount is reduced to its recoverable amount. An impairment loss is recognized immediately in the consolidated statements of earnings.

Goodwill acquired through business combinations is allocated to the CGU or group of CGUs that are expected to benefit from acquired work force and synergies of the related business combination. The group of CGUs that benefit from the acquired work force and synergies correspond to the Company’s operating segments. For goodwill impairment testing purposes, the group of CGUs that represents the lowest level within the Company at which management monitors goodwill is the operating segment level.

The recoverable amount of each operating segment has been determined based on the VIU calculation which includes estimates about their future financial performance based on cash flows approved by management covering a period of five years. Key assumptions used in the VIU calculations are the pre-tax discount rate applied and the long-term growth rate of net operating cash flows. In determining these assumptions, management has taken into consideration the current economic environment and its resulting impact on expected growth and discount rates. The cash flow projections reflect management’s expectations of the operating segment’s operating performance and growth prospects in the operating segment’s market. The pre-tax discount rate applied to an operating segment is derived from the weighted average cost of capital (WACC). Management considers factors such as country risk premium, risk-free rate, size premium and cost of debt to derive the WACC. Impairment losses relating to goodwill cannot be reversed in future periods.

FISCAL 2021 RESULTS – 85

CONSOLIDATED FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

For the years ended September 30, 2021 and 2020

(tabular amounts only are in thousands of Canadian dollars, except per share data)

3.	Summary of significant accounting policies (continued)

IMPAIRMENT OF PP&E,RIGHT-OF-USE ASSETS, INTANGIBLE ASSETS AND GOODWILL (CONTINUED)

Impairmenttesting (continued)

For impaired assets, other than goodwill, an assessment is made at each reporting date as to whether there is any indication that previously recognized impairment losses may no longer exist or may have decreased. If such indication exists, the Company estimates the recoverable amount of the asset. A previously recognized impairment loss is reversed only if there has been a change in the assumptions used to determine the recoverable amount of the asset since the last impairment loss was recognized. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of amortization, had no impairment loss been recognized for the asset in prior years. Such reversal is recognized in the consolidated statements of earnings.

LONG-TERM FINANCIAL ASSETS

Long-term investments presented in long-term financial assets are comprised of bonds which are presented as long-term based on management’s intentions.

BUSINESS COMBINATIONS

The Company accounts for its business combinations using the acquisition method. Under this method, the consideration transferred is measured at fair value. Acquisition-related and integration costs associated with the business combination are expensed as incurred or when a present legal or constructive obligation exists. The Company recognizes goodwill as the excess of the cost of the acquisition over the net identifiable tangible and intangible assets acquired and liabilities assumed at their acquisition-date fair values. The goodwill recognized is composed of the future economic value associated to acquired work force and synergies with the Company’s operations which are primarily due to reduction of costs and new business opportunities. Management makes assumptions when determining the acquisition-date fair values of the identifiable tangible and intangible assets acquired and liabilities assumed which involve estimates, such as the forecasting of future cash flows, discount rates and the useful lives of the assets acquired. Subsequent changes in fair values are recorded as part of the purchase price allocation and therefore result in corresponding goodwill adjustments if they qualify as measurement period adjustments. The measurement period is the period between the date of acquisition and the date where all significant information necessary to determine the fair values is available, not to exceed 12 months. All other subsequent changes in estimates and judgements are recognized in the consolidated statements of earnings.

EARNINGS PER SHARE

Basic earnings per share is based on the weighted average number of shares outstanding during the period. Diluted earnings per share is determined using the treasury stock method to evaluate the dilutive effect of stock options and performance share units (PSUs).

RESEARCH AND SOFTWARE DEVELOPMENT COSTS

Research costs are charged to earnings in the period in which they are incurred, net of related tax credits. Software development costs related to internal-use software and business solutions are charged to earnings in the year they are incurred, net of related tax credits, unless they meet specific capitalization criteria related to technical, market and financial feasibility as described in the Intangible assets section above.

TAX CREDITS

The Company follows the income approach to account for research and development (R&D) and other tax credits, whereby investment tax credits are recorded when there is a reasonable assurance that the assistance will be received and that the Company will comply with all relevant conditions. Under this method, tax credits related to operating expenditures are recorded as a reduction of the related expenses and recognized in the period in which the related expenditures are charged to earnings. Tax credits related to capital expenditures are recorded as a reduction of the cost of the related assets. The tax credits recorded are based on management’s best estimates of amounts expected to be received and are subject to audit by the taxation authorities.

Notes to the Consolidated Financial Statements

For the years ended September 30, 2021 and 2020

(tabular amounts only are in thousands of Canadian dollars, except per share data)

3.	Summary of significant accounting policies (continued)

INCOME TAXES

Income taxes are accounted for using the liability method of accounting.

Current income taxes are recognized with respect to the amounts expected to be paid or recovered under the tax rates and laws that have been enacted or substantively enacted at the balance sheets date.

Deferred tax assets and liabilities are determined based on deductible or taxable temporary differences between the amounts reported for consolidated financial statement purposes and tax values of the assets and liabilities using enacted or substantively enacted tax rates that will be in effect for the year in which the differences are expected to be recovered or settled. Deferred tax assets and liabilities are recognized in earnings, in other comprehensive income or in equity based on the classification of the item to which they relate.

Deferred tax assets are recognized for unused tax losses and deductible temporary differences to the extent that it is probable that taxable profit will be available against which the losses can be utilized. Once this assessment is made, the Company considers the analysis of forecasts and future tax planning strategies. Estimates of taxable profit are made based on the forecast by jurisdiction on an undiscounted basis. In addition, management considers factors such as substantively enacted tax rates, the history of the taxable profits and availability of tax strategies.

PROVISIONS

The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. Provisions are discounted using a current pre-tax rate when the impact of the time value of money is material. The increase in the provisions due to the passage of time is recognized as finance costs.

The accrued litigation and legal claims provisions are based on historical experience, current trends and other assumptions that are believed to be reasonable under the circumstances. Estimates include the period in which the underlying cause of the claim occurred and the degree of probability of an unfavourable outcome.

Decommissioning liabilities pertain to leases of buildings where certain arrangements require premises to be returned to their original state at the end of the lease term. The provision is determined using the present value of the estimated future cash outflows.

Provisions for onerous revenue-generating contracts are recorded when unavoidable costs of fulfilling the contract exceed the estimated total revenue from the contract. Management regularly reviews arrangement profitability and the underlying estimates.

Provisions for onerous supplier contracts are recorded when the unavoidable net cash flows from honoring the contract are negative. The provision represents the lowest of the costs to fulfill the contract and the penalties to exit the contract.

Restructuring provisions are recognized when a detailed formal plan identifies the business or part of the business concerned, the location and number of employees affected, a detailed estimate of the associated costs, appropriate timelines and has been communicated to those affected by it.

FISCAL 2021 RESULTS – 87

CONSOLIDATED FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

For the years ended September 30, 2021 and 2020

(tabular amounts only are in thousands of Canadian dollars, except per share data)

3.	Summary of significant accounting policies (continued)

TRANSLATION OF FOREIGN CURRENCIES

The Company’s consolidated financial statements are presented in Canadian dollars, which is also the parent company’s functional currency. Each entity in the Company determines its own functional currency and items included in the financial statements of each entity are measured using that functional currency. Functional currency is the currency of the primary economic environment in which the entity operates.

Foreign currency transactions and balances

Revenue, expenses and non-monetary assets and liabilities denominated in foreign currencies are recorded at the rate of exchange prevailing at the transaction date. Monetary assets and liabilities denominated in foreign currencies are translated at exchange rates prevailing at the balance sheets date. Unrealized and realized translation gains and losses are reflected in the consolidated statements of earnings.

Foreign operations

For foreign operations that have functional currencies different from the Company, assets and liabilities denominated in a foreign currency are translated at exchange rates in effect at the balance sheets date. Revenue and expenses are translated at average exchange rates prevailing during the period. Resulting unrealized gains or losses on translating financial statements of foreign operations are reported in other comprehensive income.

For foreign operations with the same functional currency as the Company, monetary assets and liabilities are translated at the exchange rates in effect at the balance sheets date and non-monetary assets and liabilities are translated at historical exchange rates. Revenue and expenses are translated at average exchange rates during the period. Translation exchange gains or losses of such operations are reflected in the consolidated statements of earnings.

SHARE-BASED PAYMENTS

Equity-settled plans

The Company operates equity-settled stock option and PSU plans under which the Company receives services from employees, officers and directors as consideration for equity instruments.

The fair value of those share-based payments is established on the grant date using the Black-Scholes option pricing model for the stock options and the closing price of Class A subordinate voting shares of the Company on the Toronto Stock Exchange (TSX) for the PSUs. The number of stock options and PSUs expected to vest are estimated on the grant date and subsequently revised on each reporting date. For stock options, the estimation of fair value requires making assumptions for the most appropriate inputs to the valuation model including the expected life of the option and expected stock price volatility. The fair value of share-based payments, adjusted for expectations related to performance conditions and forfeitures, are recognized as share-based payment costs over the vesting period in earnings with a corresponding credit to contributed surplus on a graded-vesting basis if they vest annually or on a straight-line basis if they vest at the end of the vesting period.

When stock options are exercised, any consideration paid is credited to capital stock and the recorded fair value of the stock options is removed from contributed surplus and credited to capital stock. When PSUs are exercised, the recorded fair value of PSUs is removed from contributed surplus and credited to capital stock.

Share purchase plan

The Company operates a share purchase plan for eligible employees. Under this plan, the Company matches the contributions made by employees up to a maximum percentage of the employee’s salary. The Company’s contributions to the plan are recognized in salaries and other member costs within costs of services, selling and administrative.

Cash-settled deferred share units

The Company operates a deferred share unit (DSU) plan to compensate the external members of the Board of Directors. The expense is recognized within costs of services, selling and administrative for each DSU granted equal to the closing price of Class A subordinate voting shares of the Company on the TSX at the date on which DSUs are awarded and a corresponding liability is recorded in accrued compensation and employee-related liabilities. After the grant date, the DSU liability is remeasured for subsequent changes in the fair value of the Company’s shares.

Notes to the Consolidated Financial Statements

For the years ended September 30, 2021 and 2020

(tabular amounts only are in thousands of Canadian dollars, except per share data)

3.	Summary of significant accounting policies (continued)

FINANCIAL INSTRUMENTS

All financial instruments are initially measured at their fair value and are subsequently classified either at amortized cost, at fair value through earnings (FVTE) or at fair value through other comprehensive income (FVOCI). Financial assets are classified based on the Company’s management model of such instruments and their contractual cash flows they generate. Financial liabilities are classified and measured at amortized cost, unless they are held for trading and classified as FVTE.

The Company has made the following classifications:

FVTE

Cash and cash equivalents, derivative financial instruments and deferred compensation plan assets within long-term financial assets are measured at fair value at the end of each reporting period and the resulting gains or losses are recorded in the consolidated statements of earnings.

Amortized Cost

Trade accounts receivable, cash included in funds held for clients, long-term receivables within long-term financial assets, accounts payable and accrued liabilities, accrued compensation and employee-related liabilities, long-term debt and clients’ funds obligations are measured at amortized cost using the effective interest method. Financial assets classified at amortized cost are subject to impairment. For trade accounts receivable and work in progress, the Company applies the simplified approach to measure expected credit losses, which requires lifetime expected loss allowance to be recorded upon initial recognition of the financial assets.

FVOCI

Short-term investments included in current financial assets, long-term bonds included in funds held for clients and in long-term investments within long-term financial assets are measured at fair value through other comprehensive income and are subject to impairment for which the Company uses the low credit risk exemption.

The unrealized gains and losses, net of applicable income taxes, are recorded in other comprehensive income. Interest income measured using the effective interest method and realized gains and losses on derecognition are recorded in the consolidated statements of earnings.

Transaction costs are comprised primarily of legal, accounting and other costs directly attributable to the acquisition or issuance of financial instruments. Transaction costs related to financial instruments other than FVTE are included in the initial recognition of the corresponding asset or liability and are amortized using effective interest method. Transaction costs related to the unsecured committed revolving credit facility are included in other long-term assets and are amortized using the straight-line method over the expected life of the underlying agreement.

Financial assets are derecognized if the contractual rights to the cash flows from the financial asset expire or the asset is transferred and the transfer qualifies for derecognition as substantially all the risks and rewards of ownership of the financial asset have been transferred. ****

Fair value hierarchy

Fair value measurements recognized on the balance sheets are classified in accordance with the following levels:

Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2: inputs other than quoted prices included in Level 1, but that are observable for the asset or liability, either directly or indirectly; and

Level 3: inputs for the asset or liability that are not based on observable market data.

FISCAL 2021 RESULTS – 89

CONSOLIDATED FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

For the years ended September 30, 2021 and 2020

(tabular amounts only are in thousands of Canadian dollars, except per share data)

3.	Summary of significant accounting policies (continued)

DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING TRANSACTIONS

The Company enters into a variety of derivative financial instruments to manage its exposure to interest rate and foreign currency exchange risks.

Derivative financial instruments are initially recognized at fair value at the date the derivative contracts are entered into and are subsequently remeasured to their fair value at the end of each reporting date. The resulting gain or loss is recognized in the consolidated statements of earnings, unless the derivative is designated and is effective as a hedging instrument, in which event the timing of the recognition in the consolidated statements of earnings depends on the nature of the hedge relationship. The cash flows of the hedging instruments are classified in the same manner as the cash flows of the item being hedged.

At the inception of a hedge relationship, the Company formally designates and documents the hedge relationship to which the Company wishes to apply hedge accounting and the risk management’s objective and strategy for undertaking the hedge. The documentation includes the identification of the nature of the risk being hedged, the economic relationship between the hedged item and the hedging instruments which should not be dominated by credit risk, the hedge ratio consistent with the risk management strategy pursued and how the Company will assess the effectiveness of the hedging relationship on an ongoing basis.

Management evaluates hedge effectiveness at inception of the hedge instrument and quarterly thereafter generally based on a managed hedge ratio of 1 for

Hedge effectiveness is measured prospectively as the extent to which changes in the fair value or cash flows of the derivative offsets the changes in the fair value or cash flows of the underlying hedged instrument or risk when there is a significant mismatch between the terms of the hedging instrument and the hedged item. Any meaningful imbalance is considered ineffectiveness in the hedge and accounted for accordingly in the consolidated statements of earnings.

Hedges of net investments in foreign operations

The Company uses cross-currency swaps and foreign currency denominated long-term debt to hedge portions of the Company’s net investments in its U.S. and European operations. Foreign exchange translation gains or losses on the net investments and the effective portions of gains or losses on instruments hedging the net investments are recorded in other comprehensive income. Gains or losses relating to the ineffective portion are recognized in consolidated statements of earnings. When the hedged net investment is disposed of, the relevant amount in other comprehensive income is transferred to earnings as part of the gain or loss on disposal.

Cash flowhedges of future revenue and long-term debt

The majority of the Company’s revenue and costs are denominated in a currency other than the Canadian dollar. The risk of foreign exchange fluctuations impacting the results is substantially mitigated by matching the Company’s costs with revenue denominated in the same currency. In certain cases where there is a substantial imbalance for a specific currency, the Company enters into foreign currency forward contracts to hedge the variability in the foreign currency exchange rates.

The Company also uses interest rate and cross-currency swaps to hedge either the cash flow exposure or the foreign exchange exposure of the long-term debt.

The effective portion of the change in fair value of the derivative financial instruments is recognized in other comprehensive income and the ineffective portion, if any, in the consolidated statements of earnings. The effective portion of the change in fair value of the derivatives is reclassified out of other comprehensive income into the consolidated statements of earnings when the hedged item is recognized in the consolidated statements of earnings.

Fair value hedges of Senior U.S. unsecured notes

The Company entered into interest rate swaps to hedge the fair value exposure of the issued fixed rate Senior U.S. unsecured notes repayable in December 2021. Under the interest rate swaps, the Company receives a fixed rate of interest and pays interest at a variable rate on the notional amount.

The changes in the fair value of the interest rate swaps are recognized in the consolidated statements of earnings as finance costs. The changes in the fair value of the hedged items attributable to the risk hedged is recorded as part of the carrying value of the Senior U.S. unsecured notes and are also recognized in the consolidated statements of earnings as finance costs. If the hedged items are derecognized, the unamortized fair value is recognized immediately in the consolidated statements of earnings.

Notes to the Consolidated Financial Statements

For the years ended September 30, 2021 and 2020

(tabular amounts only are in thousands of Canadian dollars, except per share data)

3.	Summary of significant accounting policies (continued)

DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING TRANSACTIONS (CONTINUED)

Cost of hedging

The Company has elected to account for forward element of forward contracts or foreign currency basis spread as costs of hedging. In such cases, the deferred costs of hedging, net of applicable income taxes, are recognized as a separate component of the accumulated other comprehensive income and reclassified in the consolidated statements of earnings when the hedged item is recognized.

EMPLOYEE BENEFITS

The Company operates both defined benefit and defined contribution post-employment benefit plans.

The cost of defined contribution plans is charged to the consolidated statements of earnings on the basis of contributions payable by the Company during the year.

For defined benefit plans, the defined benefit obligations are calculated by independent actuaries using the projected unit credit method. The retirement benefits obligations in the consolidated balance sheets represent the present value of the defined benefit obligations as reduced by the fair value of plan assets. The retirement benefits assets are recognized to the extent that the Company can benefit from refunds or a reduction in future contributions. Retirement benefits plans that are funded by the payment of insurance premiums are treated as defined contribution plans unless the Company has an obligation either to pay the benefits directly when they fall due or to pay further amounts if assets accumulated with the insurer do not cover all future employee benefits. In such circumstances, the plan is treated as a defined benefit plan.

Insurance policies are treated as plan assets of a defined benefit plan if the proceeds of the policy:

-	Can only be used to fund employee benefits;
-	Are not available to the Company’s creditors; and
---	---
-	Either cannot be paid to the Company unless the proceeds represent surplus assets not needed to meet all the benefit<br>obligations or are a reimbursement for benefits already paid by the Company.
---	---

Insurance policies that do not meet the above criteria are treated as non-current investments and are held at fair value as long-term financial assets in the consolidated balance sheets.

The actuarial valuations used to determine the cost of defined benefit pension plans and their present value involve making assumptions about discount rates, future salary and pension increases, inflation rates and mortality. Any changes in these assumptions will impact the carrying amount of pension obligations. In determining the appropriate discount rate, management considers the interest rates of high quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating the terms of the related pension liability.

The current service cost is recognized in the consolidated statements of earnings under costs of services, selling and administrative. The net interest cost calculated by applying the discount rate to the net defined benefit liabilities or assets is recognized as net finance cost or income. When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefits that relates to past services or the gains or losses on curtailment is recognized immediately in the consolidated statements of earnings. The gains or losses on the settlement of a defined benefit plan are recognized when the settlement occurs.

Remeasurements on defined benefit plans include actuarial gains and losses, changes in the effect of the asset ceiling and the return on plan assets, excluding the amount included in net interest on the net defined liabilities or assets. Remeasurements are charged or credited to other comprehensive income in the period in which they arise.

FISCAL 2021 RESULTS – 91

CONSOLIDATED FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

For the years ended September 30, 2021 and 2020

(tabular amounts only are in thousands of Canadian dollars, except per share data)

3.	Summary of significant accounting policies (continued)

ADOPTION OF ACCOUNTING INTERPRETATION

Configuration or customization costs in a cloud computing arrangement - IAS 38

For the year ended September 30, 2021, the Company considered and applied the IFRS Interpretations Committee agenda decision on configuration or customization costs in a cloud computing arrangement, more specifically on Software as a Service arrangements. The agenda decision clarifies that configuration or customization costs under such arrangements often do not meet the capitalization criteria under IAS 38 Intangible assets. Judgement is required to determine if the capitalization criteria are met. The adoption of the interpretation was considered retrospectively and did not have a material impact on the Company’s consolidated financial statements.

FUTURE ACCOUNTING STANDARD CHANGES

The following standard is effective as of October 1, 2021 for the Company.

IBOR reform with amendments to IFRS 9, IAS 39, IFRS 7 and IFRS 16

In August 2020, the IASB issued Interest Rate Benchmark Reform-Phase 2, which amends IFRS 9 Financial Instruments, IAS 39 FinancialInstruments: Recognition and Measurement, IFRS 7 Financial Instruments: Disclosures and IFRS 16 Leases. The amendments complement those issued in 2019 and focus on the effects on financial statements when a company replaces the old interest rate benchmark with an alternative benchmark rate as a result of the reform.

Onerous contracts – Cost of Fulfilling a Contract - Amendments to IAS 37

Classification of Liabilities as Current or Non-current – Amendments to IAS 1

Disclosure of Accounting Policy Information – Amendments to IAS 1 and IFRS Practice Statement 2

Notes to the Consolidated Financial Statements

For the years ended September 30, 2021 and 2020

(tabular amounts only are in thousands of Canadian dollars, except per share data)

3.	Summary of significant accounting policies (continued)

FUTURE ACCOUNTING STANDARD CHANGES (CONTINUED)

Definition of Accounting Estimates – Amendments to IAS 8

Deferred Tax related to Assets and Liabilities arising from a Single Transaction – Amendments to IAS 12

4.	Accounts receivable
	As at<br><br><br>September 30, 2021	As at <br> September 30, 2020
---	---	---
	$	$
Trade (Note 31)	938,417	904,887
R&D and other tax credits^1^	187,347	180,953
Other	105,688	133,462
	1,231,452	1,219,302
^1^	R&D and other tax credits were related to government programs mainly in the United States, Canada and France.<br>
---	---
5.	Funds held for clients
---	---
	As at<br><br><br>September 30, 2021	As at <br> September 30, 2020
---	---	---
	$	$
Cash	456,525	576,708
Long-term bonds (Note<br>31)	136,629	148,470
	593,154	725,178

FISCAL 2021 RESULTS – 93

CONSOLIDATED FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

For the years ended September 30, 2021 and 2020

(tabular amounts only are in thousands of Canadian dollars, except per share data)

6.	Property, plant and equipment
	Land andbuildings		Leaseholdimprovements		Furniture,fixtures andequipment		Computerequipment		Total
---	---	---	---	---	---	---	---	---	---	---
	****		****		****		****		****
Cost
As at September 30, 2020		79,281		241,542		165,219		661,891		1,147,933
Additions		2,000		26,349		10,956		96,418		135,723
Additions - business acquisitions (Note 26a)		—		1,200		208		414		1,822
Disposals/retirements		—		(15,284		(20,238		(142,724		(178,246
Foreign currency translation adjustment		(2,374		(8,983		(5,528		(23,107		(39,992
As at September 30,2021	****	78,907	****	244,824	****	150,617	****	592,892	****	1,067,240
Accumulated depreciation
As at September 30, 2020		20,124		150,572		108,060		496,231		774,987
Depreciation expense (Note 24)		2,590		25,512		13,547		102,774		144,423
Impairment (Note 24)		—		612		50		451		1,113
Disposals/retirements		—		(15,284		(20,238		(142,724		(178,246
Foreign currency translation adjustment		(753		(5,400		(3,726		(17,250		(27,129
As at September 30,2021	****	21,961	****	156,012	****	97,693	****	439,482	****	715,148
Net carrying amount as at September 30,2021	****	56,946	****	88,812	****	52,924	****	153,410	****	352,092
	Land and<br>buildings		Leasehold<br>improvements		Furniture,<br>fixtures and<br>equipment		Computer<br>equipment		Total

Cost
As at September 30, 2019		58,614		224,559		180,638		714,629		1,178,440
Adoption of IFRS 16 (Note<br>3)		—		—		(14,578		(40,357		(54,935
As at October 1, 2019		58,614		224,559		166,060		674,272		1,123,505
Additions		5,759		28,188		12,225		79,057		125,229
Additions - business acquisitions (Note 26c)		12,730		1,013		2,683		2,474		18,900
Disposals/retirements		—		(17,160		(19,405		(118,490		(155,055
Foreign currency translation adjustment		2,178		4,942		3,656		24,578		35,354
As at September 30, 2020		79,281		241,542		165,219		661,891		1,147,933
Accumulated depreciation
As at September 30, 2019		16,961		139,726		118,672		505,420		780,779
Adoption of IFRS 16 (Note<br>3)		—		—		(8,285		(24,787		(33,072
As at October 1, 2019		16,961		139,726		110,387		480,633		747,707
Depreciation expense (Note 24)		1,895		24,965		14,240		115,490		156,590
Impairment (Note 24)		—		—		—		1,035		1,035
Disposals/retirements		—		(17,160		(19,021		(117,681		(153,862
Foreign currency translation adjustment		1,268		3,041		2,454		16,754		23,517
As at September 30,<br>2020		20,124		150,572		108,060		496,231		774,987
Net carrying amount as at September 30, 2020		59,157		90,970		57,159		165,660		372,946

All values are in US Dollars.

Notes to the Consolidated Financial Statements

For the years ended September 30, 2021 and 2020

(tabular amounts only are in thousands of Canadian dollars, except per share data)

7.	Right-of-use assets
	Properties		Motor vehicles andothers		Computerequipment		Total
---	---	---	---	---	---	---	---	---
	****		****		****		****
Cost
As at September 30, 2020		1,124,258		233,976		40,965		1,399,199
Additions		60,318		21,955		828		83,101
Additions - business acquisitions (Note 26a)		4,982		—		—		4,982
Change in estimates and lease modifications		33,774		—		—		33,774
Disposals/retirements		(99,373		(73,190		(2,183		(174,746
Foreign currency translation adjustment		(43,092		(8,387		(517		(51,996
As at September 30,2021	****	1,080,867	****	174,354	****	39,093	****	1,294,314
Accumulated depreciation
As at September 30, 2020		605,155		97,573		29,606		732,334
Depreciation expense (Note 24)		111,899		41,766		6,575		160,240
Impairment (Note 24)		1,467		—		—		1,467
Disposals/retirements		(87,557		(67,464		(2,183		(157,204
Foreign currency translation adjustment		(24,406		(3,900		(424		(28,730
As at September 30,2021	****	606,558	****	67,975	****	33,574	****	708,107
Net carrying amount as at September 30,2021	****	474,309	****	106,379	****	5,519	****	586,207
	Properties		Motor vehicles and<br>others		Computer<br>equipment		Total

Cost
As at September 30, 2019		—		—		—		—
Adoption of IFRS 16 (Note<br>3)		1,070,987		230,707		40,357		1,342,051
As at October 1, 2019		1,070,987		230,707		40,357		1,342,051
Additions		59,556		56,976		2,390		118,922
Additions - business acquisitions (Note 26c)		11,859		—		—		11,859
Change in estimates and lease modifications		(6,460		—		—		(6,460
Disposals/retirements		(56,986		(61,941		(3,110		(122,037
Foreign currency translation adjustment		45,302		8,234		1,328		54,864
As at September 30, 2020		1,124,258		233,976		40,965		1,399,199
Accumulated depreciation
As at September 30, 2019		—		—		—		—
Adoption of IFRS 16 (Note<br>3)		501,821		114,097		24,787		640,705
As at October 1, 2019		501,821		114,097		24,787		640,705
Depreciation expense (Note 24)		127,931		33,140		7,168		168,239
Impairment (Note 24)		8,361		—		—		8,361
Disposals/retirements		(56,986		(52,467		(3,110		(112,563
Foreign currency translation adjustment		24,028		2,803		761		27,592
As at September 30,<br>2020		605,155		97,573		29,606		732,334
Net carrying amount as at September 30, 2020		519,103		136,403		11,359		666,865

All values are in US Dollars.

FISCAL 2021 RESULTS – 95

CONSOLIDATED FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

For the years ended September 30, 2021 and 2020

(tabular amounts only are in thousands of Canadian dollars, except per share data)

8.	Contract costs

---	---	---	---	---	---	---	---
	Cost
	****						$
Transition costs	****	487,106	262,311	224,795	477,174	246,468	230,706
Incentives	****	52,200	46,433	5,767	67,545	58,875	8,670
	****	539,306	308,744	230,562	544,719	305,343	239,376

All values are in US Dollars.

9.	Intangible assets
	Internal-usesoftwareacquired		Internal-usesoftwareinternallydeveloped		Businesssolutionsacquired		Businesssolutionsinternallydeveloped		Softwarelicenses		Client<br><br><br>relationships		Total
---	---	---	---	---	---	---	---	---	---	---	---	---	---	---
	****		****		****		****		****		****		****
Cost
As at September 30, 2020		96,900		131,298		76,278		571,015		190,372		1,187,862		2,253,725
Additions		107		7,712		—		85,572		21,086		—		114,477
Additions - business acquisitions (Note 26a)		—		—		8,081		—		—		14,026		22,107
Disposals/retirements		(16,427		(39,284		(3,242		(9,041		(39,656		—		(107,650
Foreign currency translation adjustment		(1,370		(835		(2,476		(22,696		(4,428		(47,268		(79,073
As at September 30,2021	****	79,210	****	98,891	****	78,641	****	624,850	****	167,374	****	1,154,620	****	2,203,586
Accumulated amortization
As at September 30, 2020		84,431		79,745		75,170		338,122		142,456		1,012,339		1,732,263
Amortization expense (Note 24)		5,464		13,882		3,043		44,439		24,963		38,070		129,861
Impairment (Note 24)		—		—		—		4,121		—		—		4,121
Disposals/retirements		(16,427		(39,284		(3,242		(9,041		(39,656		—		(107,650
Foreign currency translation adjustment		(1,165		(509		(2,240		(12,044		(3,562		(42,282		(61,802
As at September 30,2021	****	72,303	****	53,834	****	72,731	****	365,597	****	124,201	****	1,008,127	****	1,696,793
Net carrying amount as at September 30,2021	****	6,907	****	45,057	****	5,910	****	259,253	****	43,173	****	146,493	****	506,793
	Internal-use<br>software<br>acquired		Internal-use<br>software<br>internally<br>developed		Business<br>solutions<br>acquired		Business<br>solutions<br>internally<br>developed		Software<br>licenses		Client<br><br><br>relationships		Total

Cost
As at September 30, 2019		99,204		123,289		81,028		511,384		221,510		1,095,339		2,131,754
Additions		929		9,861		229		88,900		10,738		—		110,657
Additions - business acquisitions (Note 26c)		—		—		—		—		507		47,303		47,810
Disposals/retirements		(4,652		(2,826		(7,506		(34,810		(47,888		(2,376		(100,058
Foreign currency translation adjustment		1,419		974		2,527		5,541		5,505		47,596		63,562
As at September 30,<br>2020		96,900		131,298		76,278		571,015		190,372		1,187,862		2,253,725
Accumulated amortization
As at September 30, 2019		80,467		69,095		79,907		317,846		159,591		906,866		1,613,772
Amortization expense (Note 24)		7,336		12,986		316		41,928		26,411		68,401		157,378
Impairment (Note 24)		—		—		—		10,633		—		—		10,633
Disposals/retirements		(4,652		(2,826		(7,506		(34,810		(47,146		(453		(97,393
Foreign currency translation adjustment		1,280		490		2,453		2,525		3,600		37,525		47,873
As at September 30,<br>2020		84,431		79,745		75,170		338,122		142,456		1,012,339		1,732,263
Net carrying amount as at September 30, 2020		12,469		51,553		1,108		232,893		47,916		175,523		521,462

All values are in US Dollars.

Notes to the Consolidated Financial Statements

For the years ended September 30, 2021 and 2020

(tabular amounts only are in thousands of Canadian dollars, except per share data)

10.	Other long-term assets
	As atSeptember 30, 2021
---	---	---	---
	****		$
Prepaid long-term maintenance agreements	****	32,019	17,567
Insurance contracts held to fund defined benefit pension and life assurance arrangements -<br>reimbursement rights (Note 17)	****	21,250	24,033
Retirement benefits assets (Note 17)	****	106,228	86,127
Deposits	****	15,641	13,312
Deferred financing fees	****	2,533	3,408
Other	****	13,841	19,292
	****	191,512	163,739

All values are in US Dollars.

11.	Long-term financial assets
	As atSeptember 30, 2021
---	---	---	---
	****		$
Deferred compensation plan assets (Notes 17 and 31)	****	81,633	73,156
Long-term investments (Note 31)	****	19,354	22,612
Long-term receivables	****	18,093	20,623
Long-term derivative financial instruments (Note 31)	****	33,578	40,178
	****	152,658	156,569

All values are in US Dollars.

FISCAL 2021 RESULTS – 97

CONSOLIDATED FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

For the years ended September 30, 2021 and 2020

(tabular amounts only are in thousands of Canadian dollars, except per share data)

12.	Goodwill

The Company’s operations are managed through the following nine operating segments, namely: Western and Southern Europe (primarily France and Portugal); United States (U.S.) Commercial and State Government; Canada; U.S. Federal; United Kingdom (U.K.) and Australia; Central and Eastern Europe (primarily Germany and the Netherlands); Scandinavia; Finland, Poland and Baltics; and Asia Pacific Global Delivery Centers of Excellence (mainly India and Philippines) (Asia Pacific).

The operating segments reflect the current management structure and the way that the chief operating decision-maker, who is the President and Chief Executive Officer of the Company, evaluates the business.

The Company completed the annual impairment test during the fourth quarter of the fiscal year 2021 and did not identify any impairment.

The movements in goodwill were as follows:

	WesternandSouthernEurope		U.S.Commercialand StateGovernment		Canada			U.K. andAustralia		CentralandEasternEurope		Scandinavia		Finland,PolandandBaltics		AsiaPacific		Total
	****		****		****			****		****		****		****		****		****
As at September 30, 2020		1,089,099		1,147,307		1,142,148	999,162		904,972		985,849		1,169,873		659,878		281,643		8,379,931
Business acquisitions (Note 26)		(994		75,697		—	(2,740		(276		1,812		—		—		—		73,499
Foreign currency translation adjustment		(65,755		(53,232		—	(48,640		(8,775		(56,300		(29,300		(39,888		(11,839		(313,729
As at September 30,2021	****	1,022,350	****	1,169,772	****	1,142,148	947,782	****	895,921	****	931,361	****	1,140,573	****	619,990	****	269,804	****	8,139,701

All values are in US Dollars.

Key assumptions in goodwill impairment testing

The key assumptions for the CGUs are disclosed in the following tables for the years ended September 30:

2021	WesternandSouthernEurope		U.S.Commercialand StateGovernment		Canada		U.S.Federal		U.K. andAustralia		CentralandEasternEurope		Scandinavia		Finland,PolandandBaltics		AsiaPacific
	****	%	****	%	****	%	****	%	****	%	****	%	****	%	****	%	****	%
Pre-tax WACC	****	10.0	****	8.5	****	9.1	****	8.1	****	8.8	****	9.4	****	9.3	****	9.5	****	18.5
Long-term growth rate of net operating cash flows^1^	****	1.6	****	2.0	****	2.0	****	2.0	****	1.9	****	1.8	****	1.8	****	1.7	****	2.0
2020	Western<br>and<br>Southern<br>Europe		U.S.<br>Commercial<br>and State<br>Government		Canada		U.S.<br>Federal		U.K. and<br>Australia		Central<br>and<br>Eastern<br>Europe		Scandinavia		Finland,<br>Poland<br>and<br>Baltics		Asia<br>Pacific
		%		%		%		%		%		%		%		%		%
Pre-tax WACC		11.2		9.3		9.6		8.5		9.3		10.2		10.0		10.8		23.0
Long-term growth rate of net operating cash flows^1^		1.7		2.0		2.0		2.0		2.0		1.9		1.9		1.7		2.0
^1^	The long-term growth rate is based on the lower of published industry research growth and 2.0%.
---	---

Notes to the Consolidated Financial Statements

For the years ended September 30, 2021 and 2020

(tabular amounts only are in thousands of Canadian dollars, except per share data)

13.	Provisions
	Restructuring^1,^^4^		Decommissioningliabilities^2^		Others^3^		Total
---	---	---	---	---	---	---	---	---
	****		****		****		****
As at September 30, 2020		115,272		26,561		57,687		199,520
Additional provisions		1,008		2,239		52,728		55,975
Utilized amounts		(93,340		(2,677		(50,880		(146,897
Reversals of unused amounts		—		(437		(11,958		(12,395
Discount rate adjustment and imputed interest		—		117		—		117
Foreign currency translation adjustment		(3,292		(951		(1,952		(6,195
As at September 30,2021	****	19,648	****	24,852	****	45,625	****	90,125
Current portion	****	19,289	****	4,466	****	39,794	****	63,549
Non-current portion	****	359	****	20,386	****	5,831	****	26,576

All values are in US Dollars.

^1^	See Note 26d), Investments in subsidiaries.
^2^	As at September 30, 2021, the decommissioning liabilities were based on the expected cash flows of $25,491,000 and<br>were discounted at a weighted average rate of 0.57%. The timing of settlements of these obligations ranges between one and twelve years as at September 30, 2021. The reversals of unused amounts are mostly due to favourable settlements.<br>
---	---
^3^	As at September 30, 2021, others included onerous revenue-generating contracts, litigation and claims and onerous<br>supplier contracts.
---	---
^4^	During the year ended September 30, 2020, the Company recorded $155,411,000 of restructuring costs related to<br>announced restructuring plans. This amount included restructuring costs for terminations of employment of $144,202,000, accounted for in restructuring provisions, impairment of PP&E of $1,035,000 (Notes 6 and 24), impairment of right-of-use assets of $5,092,000 (Note 24), as well as other restructuring costs of $5,082,000.
---	---

FISCAL 2021 RESULTS – 99

CONSOLIDATED FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

For the years ended September 30, 2021 and 2020

(tabular amounts only are in thousands of Canadian dollars, except per share data)

14.	Long-term debt

---	---	---
		$
Senior U.S. unsecured note repayable of 316,900 (U.S.250,000) in December 20211	318,009	339,682
Senior unsecured notes repayable in September by tranches of 380,280 (U.S.300,000) in 2024 and<br>190,140 (U.S.150,000) in three yearly repayments of U.S.50,000 from 2022 to 20242	570,298	872,283
Senior U.S. unsecured notes repayable of 760,560 (U.S.600,000) in September 2026 and 507,040<br>(U.S.400,000) in September 20313	1,253,226	—
Senior unsecured notes repayable of 600,000 in September 20284	595,331	—
Unsecured committed term loan credit facilities5	633,623	2,330,288
Other long-term debt	31,169	44,842
	3,401,656	3,587,095
Current portion	392,727	310,764
	3,008,929	3,276,331

All values are in US Dollars.

^1^	As at September 30, 2021, an amount of $316,900,000 was borrowed, plus fair value adjustments relating to interest<br>rate swaps designated as fair value hedges of $1,132,000 and less financing fees. The private placement financing with U.S. institutional investors is comprised of one tranche of Senior U.S. unsecured note, due in December 2021, with a fixed<br>interest rate of 4.99%. The Senior U.S. unsecured note contains covenants that require the Company to maintain certain financial ratios (Note 32). As at September 30, 2021, the Company was in compliance with these covenants.<br>
^2^	As at September 30, 2021, an amount of $570,420,000 was borrowed, less financing fees. The private placement is<br>comprised of two tranches of Senior U.S. unsecured notes with a weighted average maturity of 2.6 years and a weighted average interest rate of 3.95% (3.64% in 2020). In September 2021, the Company repaid the fourth of the seven yearly scheduled<br>repayments of U.S.$50,000,000 on a tranche of the Senior U.S. unsecured notes for a total amount of $63,220,000 and settled the related cross-currency swaps (Note 31). In September 2021, the Company repaid the scheduled repayment of U.S.$55,000,000<br>on another tranche of the Senior U.S. unsecured notes for a total amount of $69,542,000 and settled the related cross-currency swaps (Note 31). In September 2021, the Company also repaid the scheduled repayment of €85,000,000 of the Senior euro unsecured notes for a total amount of $126,914,000. The Senior unsecured notes contain covenants that require the Company to maintain certain financial ratios (Note 32).<br>As at September 30, 2021, the Company was in compliance with these covenants.
---	---
^3^	During the year ended September 30, 2021, the Company issued Senior U.S. unsecured notes (2021 U.S. Senior Notes)<br>for a total principal amount of U.S. $1,000,000,000. This issuance is comprised of two series of Senior U.S. unsecured notes with a weighted average maturity of 7 years and a weighted average interest rate of 1.79%. As at September 30, 2021, an<br>amount of $1,267,600,000 was borrowed, less financing fees.
---	---
^4^	During the year ended September 30, 2021, the Company issued Senior unsecured notes (2021 CAD Senior Notes) for a<br>total principal amount of $600,000,000. This issuance is due in September 2028, with an interest rate of 2.10%. As at September 30, 2021, an amount of $600,000,000 was borrowed, less financing fees.
---	---
^5^	As at September 30, 2021, an amount of $633,800,000 was borrowed less financing fees. This facility bears interest<br>based on the 1 month USD LIBOR rate, plus a variable margin that is determined based on the Company’s leverage ratio. The unsecured committed term loan credit facility is due in December 2023, with a weighted average interest rate of 1.09%. The<br>unsecured committed term loan credit facility contains covenants that require the Company to maintain certain financial ratios (Note 32). As at September 30, 2021, the Company was in compliance with these covenants. In September 2021, the<br>Company repaid the amended and restated unsecured committed term loan credit facility entered into in April 2020 of U.S.$1,250,000,000 for a total amount of $1,583,546,000.
---	---

The Company has an unsecured committed revolving credit facility available for an amount of $1,500,000,000 that expires in December 2024. This facility bears interest at bankers’ acceptance, LIBOR or Canadian prime, plus a variable margin that is determined based on the Company’s leverage ratio. As at September 30, 2021, there was no amount drawn upon this facility. An amount of $6,628,000 has been committed against this facility to cover various letters of credit issued for clients and other parties. On October 29, 2021, the facility was extended by two years to October 2026 and can be further extended. There were no material changes in the terms and conditions including interest rates and banking covenants. The unsecured committed revolving credit facility contains covenants that require the Company to maintain certain financial ratios (Note 32). As at September 30, 2021, the Company was in compliance with these covenants.

100

Notes to the Consolidated Financial Statements

For the years ended September 30, 2021 and 2020

(tabular amounts only are in thousands of Canadian dollars, except per share data)

15.	Other long-term liabilities
	As atSeptember 30, 2021
---	---	---	---
	****		$
Deferred revenue	****	59,349	38,466
Deferred compensation plan liabilities (Note<br>17)	****	91,943	82,221
Other^1^	****	51,370	64,687
	****	202,662	185,374

All values are in US Dollars.

^1^	As at September 30, 2021, other is mainly composed of $33,686,000 ($48,299,000 as at September 30, 2020) in<br>relation with the deferral of the employer side social security payments under the U.S. Government Coronavirus Aid, Relief, and Economic Security Act (CARES Act).
16.	Income taxes
---	---
	Year ended September 30
---	---	---	---
	****	2021	2020
	****
Current income tax expense
Current income tax expense in respect of the current year	****	475,833	416,563
Adjustments recognized in the current year in<br>relation to the income tax expense of prior years	****	19,021	(24,328
Total current income tax expense	****	494,854	392,235
Deferred income tax (recovery) expense
Deferred income tax recovery relating to the origination and reversal of<br>temporary differences	****	(6,165	(1,120
Deferred income tax recovery relating to changes in tax rates	****	(460	(3,479
Adjustments recognized in the current year in<br>relation to the deferred income tax recovery of prior years	****	(19,309	10,769
Total deferred income tax (recovery)<br>expense	****	(25,934	6,170
Total income tax expense	****	468,920	398,405

All values are in US Dollars.

The Company’s effective income tax rate differs from the combined Federal and Provincial Canadian statutory tax rate as follows:

	Year ended September 30
	****	2021	****	2020
	****	%	****	%
Company’s statutory tax rate	****	26.5	****	26.5
Effect of foreign tax rate differences	****	(1.0	)	(0.9	)
Final determination from agreements with tax authorities and expirations of<br>statutes of limitations	****	0.2	****	(0.9	)
Non-deductible and tax exempt<br>items	****	(0.4	)	0.2
Recognition of previously unrecognized temporary differences	****	(0.2	)	—
Effect of integration-related costs	****	—	****	0.7
Minimum income tax charge	****	0.4	****	0.9
Changes in tax laws and rates	****	—	****	(0.2	)
Effective income tax rate	****	25.5	****	26.3

FISCAL 2021 RESULTS – 101

CONSOLIDATED FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

For the years ended September 30, 2021 and 2020

(tabular amounts only are in thousands of Canadian dollars, except per share data)

16. Income taxes (continued)

The continuity schedule of deferred tax balances is as follows:



Accounts payable and accrued liabilities, provisions and other long-term liabilities		)	)	)	)	****
Tax benefits on losses carried forward			)		)	****
Accrued compensation and employee-related liabilities					)	****
Retirement benefits obligations				)	)	****
Lease liabilities			)		)	****
PP&E, contract costs, intangible assets and other long-term assets	)	)				)
Right-of-use<br>assets	)					)
Work in progress	)					)
Goodwill	)		)			)
Refundable tax credits on salaries	)					)
Cash flow hedges	)			)		)
Other				)	)	****
Deferred taxes, net	)	)	****	)	)	)

All values are in US Dollars.



Accounts payable and accrued liabilities, provisions and other long-term liabilities		)				)
Tax benefits on losses carried forward					)
Accrued compensation and employee-related liabilities					)		)
Retirement benefits obligations					)
Lease liabilities					)
PP&E, contract costs, intangible assets and other long-term assets	)		)	)	)			)	)
Right-of-use<br>assets		)	)	)				)	)
Work in progress	)		)					)	)
Goodwill	)		)	)	)			)	)
Refundable tax credits on salaries	)		)						)
Cash flow hedges	)		)		)				)
Other	)		)					)
Deferred taxes, net	)		)	)	)		)		)

All values are in US Dollars.

The deferred tax balances are presented as follows in the consolidated balance sheets:

	As atSeptember 30, 2021
	****
Deferred tax assets	****	96,358	113,484
Deferred tax liabilities	****	(132,038	(158,341
	****	(35,680	(44,857

All values are in US Dollars.

102

Notes to the Consolidated Financial Statements

For the years ended September 30, 2021 and 2020

(tabular amounts only are in thousands of Canadian dollars, except per share data)

16.	Income taxes (continued)

As at September 30, 2021, the Company had $225,002,000 ($291,255,000 as at September 30, 2020) in operating tax losses carried forward, of which $82,548,000 ($59,390,000 as at September 30, 2020) expire at various dates from 2029 to 2040 and $142,454,000 ($231,865,000 as at September 30, 2020) have no expiry dates. As at September 30, 2021, a deferred income tax asset of $38,371,000 ($41,380,000 as at September 30, 2020) has been recognized on $162,693,000 ($217,563,000 as at September 30, 2020) of these losses. The deferred income tax assets are recognized only to the extent that it is probable that taxable income will be available against which the unused tax losses can be utilized. As at September 30, 2021, the Company had $25,325,000 ($31,639,000 as at September 30, 2020) of the unrecognized operating tax losses that will expire at various dates from 2029 to 2032 and 36,984,000 ($42,053,000 as at September 30, 2020) that have no expiry date.

As at September 30, 2021, the Company had $469,097,000 ($485,546,000 as at September 30, 2020) in non-operating tax losses carried forward that have no expiry dates. As at September 30, 2021, a deferred income tax asset of $4,810,000 ($4,848,000 as at September 30, 2020) has been recognized on $20,534,000 ($19,436,000 as at September 30, 2020) of these losses. As at September 30, 2021, the Company had $448,563,000 ($466,110,000 as at September 30, 2020) of unrecognized non-operating tax losses.

As at September 30, 2021, the Company had $1,420,634,000 ($836,101,000 as at September 30, 2020) of cash and cash equivalents held by foreign subsidiaries. The tax implications of the repatriation of cash and cash equivalents not considered indefinitely reinvested have been accounted for and will not materially affect the Company’s liquidity. In addition, the Company has not recorded deferred tax liabilities on undistributed earnings of $6,290,351,000 ($5,565,437,000 as at September 30, 2020) coming from its foreign subsidiaries as they are considered indefinitely reinvested. Upon distribution of these earnings in the form of dividends or otherwise, the Company may be subject to taxation.

FISCAL 2021 RESULTS – 103

CONSOLIDATED FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

For the years ended September 30, 2021 and 2020

(tabular amounts only are in thousands of Canadian dollars, except per share data)

17.	Employee benefits

The Company operates various post-employment plans, including defined benefit and defined contribution pension plans as well as other benefit plans for its employees.

DEFINED BENEFIT PLANS

The Company operates defined benefit pension plans primarily for the benefit of employees in the U.K., Germany and France, with smaller plans in other countries. The benefits are based on pensionable salary and years of service and are funded with assets held in separate funds.

The defined benefit plans expose the Company to interest risk, inflation risk, longevity risk, currency risk and market investment risk.

The following description focuses mainly on plans registered in the U.K., Germany and France:

U.K.

In the U.K., the Company has three defined benefit pension plans, the CMG U.K. Pension Scheme, the Logica U.K. Pension & Life Assurance Scheme and the Logica Defined Benefit Pension Plan.

The CMG U.K. Pension Scheme is closed to new members and is closed to further accrual of rights for existing members. The Logica U.K. Pension & Life Assurance Scheme is still open but only for employees who come from the civil service with protected pensions. The Logica Defined Benefit Pension Plan was created to mirror the Electricity Supply Pension Scheme and was created for employees that worked for National Grid and Welsh Water with protected benefits.

Both the Logica U.K. Pension & Life Assurance Scheme and the Logica Defined Benefit Pension Plan are employer and employee based contribution plans.

The trustees are the custodians of the defined benefit pension plans and are responsible for the plan administration, including investment strategies. The trustees review periodically the investment and the asset allocation policies. As such, the CMG U.K. Pension Scheme policy is to target an allocation up to a maximum of 70% to return-seeking assets such as equities; the Logica U.K. Pension & Life Assurance Scheme policy is to invest 15% of the scheme assets in equities and 85% in bonds; and the Logica Defined Benefit Pension Plan policy is to invest 15% of the plan assets in equities and 85% in bonds.

The U.K. Pensions Act 2004 requires that full formal actuarial valuations are carried out at least every three years to determine the contributions that the Company should pay in order for the plan to meet its statutory objective, taking into account the assets already held. In the interim years, the trustees need to obtain estimated funding updates unless the scheme has less than 100 members in total.

The new funding actuarial valuations of the three defined benefit pension plans described above are being performed as at September 30, 2021 and the results are expected to be available by the end of the 2022 calendar year. In the meantime, in line with the last funding actuarial valuations, the Company contributed an amount of $1,336,000 to the CMG U.K. Pension Scheme and $282,000 to the Logica UK Pension & Life Assurance Scheme to cover mainly administration expenses and future service in the scheme, during the year ended September 30, 2021.

In addition, during the year ended September 30, 2020, the Company followed the below recommendations from the last funding valuation:

–

The actuarial valuation of the CMG U.K. Pension Scheme reported a deficit of $26,546,000. A new recovery plan was proposed, and during fiscal 2020, the Company contributed a total amount of $12,432,000 to ensure that the funding objectives of the scheme were met, and stopped the contributions on June 30, 2020 accordingly to the plan. The Company also contributed an amount of $1,279,000 to cover administration expenses; and

–

The actuarial valuation of the Logica Defined Benefit Pension Plan specified that no supplementary contributions were required after November 30, 2019 in order to reach the plan funding objectives. During fiscal 2020, the Company contributed a total amount of $344,200 and then stopped the contributions.

---

104

Notes to the Consolidated Financial Statements

For the years ended September 30, 2021 and 2020

(tabular amounts only are in thousands of Canadian dollars, except per share data)

17.	Employee benefits (continued)

DEFINED BENEFIT PLANS (CONTINUED)

Germany

In Germany, the Company has numerous defined benefit pension plans which are all closed to new members. In the majority of the plans, upon retirement of employees, the benefits are in the form of a monthly pension and in a few plans, the employees receive an indemnity in the form of a lump-sum payment. About one third of the plans are bound by the former Works Council agreements. There are no mandatory funding requirements. The plans are funded by the contributions made by the Company. In some plans, insurance policies are taken out to fund retirement benefit plans. These do not qualify as plan assets and are presented as reimbursement rights, unless they are part of a reinsured support fund or are pledged to the employees.

France

In France, the retirement indemnities are provided in accordance with the Labour Code. Upon retirement, employees receive an indemnity, depending on the salary and seniority in the Company, in the form of a lump-sum payment.

The following tables present amounts for post-employment benefits plans included in the consolidated balance sheets:

As at September 30, 2021	U.K.	Germany	France	Other	Total

Defined benefit obligations	(881,008	(94,381	(77,006	(82,159	(1,134,554
Fair value of plan assets	986,359	12,234	661	37,040	1,036,294
	105,351	(82,147	(76,345	(45,119	(98,260
Fair value of reimbursement rights	—	20,823	—	427	21,250
Net asset (liability) recognized in the balance sheet	105,351	(61,324	(76,345	(44,692	(77,010
Presented as:
Other long-term assets (Note 10)
Insurance contracts held to fund defined benefit pension and life assurance arrangements - reimbursement<br>rights	—	20,823	—	427	21,250
Retirement benefits assets	105,351	—	—	877	106,228
Retirement benefits obligations	—	(82,147	(76,345	(45,996	(204,488
	105,351	(61,324	(76,345	(44,692	(77,010
As at September 30, 2020	U.K.	Germany	France	Other	Total

Defined benefit obligations	(891,628	(104,090	(84,442	(83,584	(1,163,744
Fair value of plan assets	977,137	12,766	692	33,829	1,024,424
	85,509	(91,324	(83,750	(49,755	(139,320
Fair value of reimbursement rights	—	22,505	—	1,528	24,033
Net asset (liability) recognized in the balance sheet	85,509	(68,819	(83,750	(48,227	(115,287
Presented as:
Other long-term assets (Note 10)
Insurance contracts held to fund defined benefit pension and life assurance arrangements - reimbursement<br>rights	—	22,505	—	1,528	24,033
Retirement benefits assets	85,509	—	—	618	86,127
Retirement benefits obligations	—	(91,324	(83,750	(50,373	(225,447
	85,509	(68,819	(83,750	(48,227	(115,287

All values are in US Dollars.

FISCAL 2021 RESULTS – 105

CONSOLIDATED FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

For the years ended September 30, 2021 and 2020

(tabular amounts only are in thousands of Canadian dollars, except per share data)

17.	Employee benefits (continued)

DEFINED BENEFIT PLANS (CONTINUED)

Defined benefit obligations	U.K.	Germany	France	Other	Total

As at September 30, 2020	891,628	104,090	84,442	83,584	1,163,744
Current service cost	1,114	665	6,004	8,095	15,878
Interest cost	13,490	642	529	2,867	17,528
Past service cost	346	—	—	—	346
Actuarial losses (gains) due to change in financial<br>assumptions^1^	21,722	(1,201	(2,922	(1,125	16,474
Actuarial (gains) losses due to experience^1^	(9,994	521	(3,498	(559	(13,530
Plan participant contributions	92	—	—	—	92
Benefits paid from the plan	(29,936	(1,053	—	(3,521	(34,510
Benefits paid directly by employer	—	(2,954	(2,492	(2,242	(7,688
Foreign currency translation adjustment^1^	(7,454	(6,329	(5,057	(4,940	(23,780
As at September 30,2021	881,008	94,381	77,006	82,159	1,134,554
Defined benefit obligations of unfunded plans	—	—	77,006	40,491	117,497
Defined benefit obligations of funded plans	881,008	94,381	—	41,668	1,017,057
As at September 30,2021	881,008	94,381	77,006	82,159	1,134,554
Defined benefit obligations	U.K.	Germany	France	Other	Total

As at September 30, 2019	812,179	101,298	58,048	73,059	1,044,584
Current service cost	1,060	776	4,665	7,974	14,475
Interest cost	15,253	576	347	2,878	19,054
Business acquisitions (Note 26c)	—	—	1,732	—	1,732
Actuarial losses (gains) due to change in financial<br>assumptions^1^	36,135	(1,258	4,279	1,138	40,294
Actuarial losses due to change in demographic assumptions^1^	17,671	—	6,401	—	24,072
Actuarial (gains) losses due to experience^1^	(8,033	(530	4,054	(1,374	(5,883
Plan participant contributions	91	—	—	—	91
Benefits paid from the plan	(28,793	(1,645	—	(2,426	(32,864
Benefits paid directly by employer	—	(2,787	(454	(1,832	(5,073
Foreign currency translation adjustment^1^	46,065	7,660	5,370	4,167	63,262
As at September 30, 2020	891,628	104,090	84,442	83,584	1,163,744
Defined benefit obligations of unfunded plans	—	—	84,442	35,070	119,512
Defined benefit obligations of funded plans	891,628	104,090	—	48,514	1,044,232
As at September 30, 2020	891,628	104,090	84,442	83,584	1,163,744

All values are in US Dollars.

^1^	Amounts recognized in other comprehensive income.

106

Notes to the Consolidated Financial Statements

For the years ended September 30, 2021 and 2020

(tabular amounts only are in thousands of Canadian dollars, except per share data)

17.	Employee benefits (continued)

DEFINED BENEFIT PLANS (CONTINUED)

Plan assets and reimbursement rights	U.K.	Germany	France	Other	Total

As at September 30, 2020	977,137	35,271	692	35,357	1,048,457
Interest income on plan assets	14,795	216	5	1,507	16,523
Employer contributions	1,640	3,462	2,492	7,649	15,243
Return on assets excluding interest income^1^	32,252	384	7	1,836	34,479
Plan participants contributions	92	—	—	393	485
Benefits paid from the plan	(29,936	(1,053	—	(3,521	(34,510
Benefits paid directly by employer	—	(2,954	(2,492	(2,242	(7,688
Administration expenses paid from the plan	(1,400	—	—	(8	(1,408
Foreign currency translation adjustment^1^	(8,221	(2,269	(43	(3,504	(14,037
As at September 30, 2021	986,359	33,057	661	37,467	1,057,544
Plan assets	986,359	12,234	661	37,040	1,036,294
Reimbursement rights	—	20,823	—	427	21,250
As at September 30, 2021	986,359	33,057	661	37,467	1,057,544
Plan assets and reimbursement rights	U.K.	Germany	France	Other	Total

As at September 30, 2019	908,406	35,163	—	28,305	971,874
Interest income on plan assets	17,255	204	3	964	18,426
Business acquisitions (Note 26c)	—	—	664	—	664
Employer contributions	14,398	2,430	454	6,874	24,156
Return on assets excluding interest income^1^	15,976	46	—	(396	15,626
Plan participants contributions	91	—	—	—	91
Benefits paid from the plan	(28,793	(1,645	—	(2,426	(32,864
Benefits paid directly by employer	—	(2,787	(454	(1,831	(5,072
Administration expenses paid from the plan	(1,189	—	—	(58	(1,247
Foreign currency translation adjustment^1^	50,993	1,860	25	3,925	56,803
As at September 30, 2020	977,137	35,271	692	35,357	1,048,457
Plan assets	977,137	12,766	692	33,829	1,024,424
Reimbursement rights	—	22,505	—	1,528	24,033
As at September 30, 2020	977,137	35,271	692	35,357	1,048,457

All values are in US Dollars.

^1^	Amounts recognized in other comprehensive income.

FISCAL 2021 RESULTS – 107

CONSOLIDATED FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

For the years ended September 30, 2021 and 2020

(tabular amounts only are in thousands of Canadian dollars, except per share data)

17.	Employee benefits (continued)

DEFINED BENEFIT PLANS (CONTINUED)

The plan assets at the end of the years consist of:

As at September 30, 2021	U.K.	Germany	France	Other	Total
	$	$	$	$	$
Quoted equities	426,066	—	—	—	426,066
Quoted bonds	109,787	—	—	—	109,787
Cash	36,974	—	—	64	37,038
Other^1^	413,532	12,234	661	36,976	463,403
	986,359	12,234	661	37,040	1,036,294
As at September 30, 2020	U.K.	Germany	France	Other	Total
	$	$	$	$	$
Quoted equities	472,318	—	—	—	472,318
Quoted bonds	93,003	—	—	—	93,003
Cash	52,230	—	—	88	52,318
Other^1^	359,586	12,766	692	33,741	406,785
	977,137	12,766	692	33,829	1,024,424
^1^	Other is mainly composed of various insurance policies and quoted investment funds to cover some of the defined benefit<br>obligations.
---	---

Plan assets do not include any shares of the Company, property occupied by the Company or any other assets used by the Company.

The following table summarizes the expense^1^ recognized in the consolidated statements of earnings:

	Year ended September 30
	2021	2020
	$	$
Current service cost	15,878	14,475
Past service cost	346	—
Net interest on net defined benefit obligations or assets	1,005	629
Administration expenses	1,408	1,247
	18,637	16,351
^1^	The expense was presented as costs of services, selling and administrative for an amount of $16,224,000 and as net<br>finance costs for an amount of $2,413,000 (Note 25) ($14,475,000 and $1,876,000, respectively for the year ended September 30, 2020).
---	---

108

Notes to the Consolidated Financial Statements

For the years ended September 30, 2021 and 2020

(tabular amounts only are in thousands of Canadian dollars, except per share data)

17.	Employee benefits (continued)

DEFINED BENEFIT PLANS (CONTINUED)

Actuarial assumptions

The following are the principal actuarial assumptions (expressed as weighted averages). The assumed discount rates, future salary and pension increases, inflation rates and mortality all have a significant effect on the accounting valuation.

As at September 30, 2021	U.K	Germany	France	Other
	%	%	%	%
Discount rate	2.03	0.88	0.90	3.30
Future salary increases	3.45	2.50	3.75	1.34
Future pension increases	3.38	1.80	—	0.07
Inflation rate	3.45	2.00	1.50	2.83
As at September 30, 2020	U.K.	Germany	France	Other
	%	%	%	%
Discount rate	1.53	0.65	0.65	3.11
Future salary increases	2.84	2.50	3.79	1.51
Future pension increases	2.82	1.50	—	0.08
Inflation rate	2.84	2.00	1.50	2.51

The average longevity over 65 of a member presently at age 45 and 65 are as follows:

As at September 30, 2021	U.K.			Germany
		(in years	)
Longevity at age 65 for current members
Males	21.9			21.0
Females	23.8			24.0
Longevity at age 45 for current members
Males	23.3			23.0
Females	25.4			26.0
As at September 30, 2020	U.K.			Germany
		(in years	)
Longevity at age 65 for current members
Males	21.8			20.0
Females	23.7			23.0
Longevity at age 45 for current members
Males	23.2			24.0
Females	25.3			26.0

FISCAL 2021 RESULTS – 109

CONSOLIDATED FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

For the years ended September 30, 2021 and 2020

(tabular amounts only are in thousands of Canadian dollars, except per share data)

17.	Employee benefits (continued)

DEFINED BENEFIT PLANS (CONTINUED)

Actuarial assumptions (continued)

Assumptions regarding future mortality are set based on actuarial advice in accordance with published statistics and experience in each country. Mortality assumptions for the most significant countries are based on the following post-retirement mortality tables for the year ended September 30, 2021: (1) U.K.: 100% S2PxA (year of birth) plus CMI_2018 projections with 1.25% p.a. minimum long term improvement rate, (2) Germany: Heubeck RT2018G and (3) France: INSEE TVTD 2014-2016.

The following tables show the sensitivity of the defined benefit obligations to changes in the principal actuarial assumptions:

As at September 30, 2021	U.K.	Germany	France

Increase of 0.25% in the discount rate	(36,571	(2,986	(2,716
Decrease of 0.25% in the discount rate	38,221	3,144	2,851
Salary increase of 0.25%	480	35	2,870
Salary decrease of 0.25%	(471	(34	(2,746
Pension increase of 0.25%	25,254	1,440	—
Pension decrease of 0.25%	(24,480	(1,381	—
Increase of 0.25% in inflation rate	36,172	1,440	2,870
Decrease of 0.25% in inflation rate	(34,478	(1,381	(2,746
Increase of one year in life expectancy	27,907	3,131	555
Decrease of one year in life expectancy	(27,556	(2,761	(585
As at September 30, 2020	U.K.	Germany	France

Increase of 0.25% in the discount rate	(36,622	(3,445	(2,936
Decrease of 0.25% in the discount rate	38,192	3,632	3,079
Salary increase of 0.25%	441	36	3,091
Salary decrease of 0.25%	(437	(36	(2,962
Pension increase of 0.25%	18,528	1,598	—
Pension decrease of 0.25%	(18,132	(1,531	—
Increase of 0.25% in inflation rate	29,148	1,598	3,091
Decrease of 0.25% in inflation rate	(28,207	(1,531	(2,962
Increase of one year in life expectancy	27,126	3,615	558
Decrease of one year in life expectancy	(26,843	(3,040	(592

All values are in US Dollars.

The sensitivity analysis above has been based on a method that extrapolates the impact on the defined benefit obligations as a result of reasonable changes in key assumptions occurring at the end of the year.

The weighted average duration of the defined benefit obligations are as follows:

	Year ended September 30
	2021	2020
	(in years)
U.K.	18	18
Germany	13	14
France	15	14
Other	12	12

110

Notes to the Consolidated Financial Statements

For the years ended September 30, 2021 and 2020

(tabular amounts only are in thousands of Canadian dollars, except per share data)

17.	Employee benefits (continued)

DEFINED BENEFIT PLANS (CONTINUED)

The Company expects to contribute $8,534,000 to defined benefit plans during the next year, of which $1,673,000 relates to the U.K. plans, and $6,861,000 relates to the other plans. The contributions will include new benefit accruals.

DEFINEDCONTRIBUTION PLANS

The Company also operates defined contribution pension plans. In some countries, contributions are made into the state pension plans. The pension cost for defined contribution plans amounted to $224,010,000 in 2021 ($228,998,000 in 2020).

In addition, in Sweden, the Company contributes to a multi-employer plan, Alecta SE (Alecta) pension plan, which is a defined benefit pension plan. This pension plan is classified as a defined contribution plan as sufficient information is not available to use defined benefit accounting. Alecta lacks the possibility of establishing an exact distribution of assets and provisions to the respective employers. The Company’s proportion of the total contributions to the plan is 0.65% and the Company’s proportion of the total number of active members in the plan is 0.49%.

Alecta uses a collective funding ratio to determine the surplus or deficit in the pension plan. Any surplus or deficit in the plan will affect the amount of future contributions payable. The collective funding is the difference between Alecta’s assets and the commitments to the policy holders and insured individuals. The collective solvency is normally allowed to vary between 125% and 175%. As at September 30, 2021, Alecta collective funding ratio was 169% (144% in 2020). The plan expense was $31,807,000 in 2021 ($30,269,000 in 2020). The Company expects to contribute $26,825,000 to the plan during the next year.

OTHER BENEFIT PLANS

As at September 30, 2021, the deferred compensation liability totaled $91,943,000 ($82,221,000 as at September 30, 2020) (Note 15) and the deferred compensation assets totaled $81,633,000 ($73,156,000 as at September 30, 2020) (Note 11). The deferred compensation liability is mainly related to plans covering some of its U.S. and German management. Some of the plans include assets that will be used to fund the liabilities.

For the deferred compensation plan in the U.S., a trust was established so that the plan assets could be segregated; however, the assets are subject to the Company’s general creditors in the case of bankruptcy. The assets composed of investments vary with employees’ contributions and changes in the value of the investments. The change in liabilities associated with the plan is equal to the change of the assets. The assets in the trust and the associated liabilities totaled $81,245,000 as at September 30, 2021 ($72,743,000 as at September 30, 2020).

FISCAL 2021 RESULTS – 111

CONSOLIDATED FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

For the years ended September 30, 2021 and 2020

(tabular amounts only are in thousands of Canadian dollars, except per share data)

18.	Accumulated other comprehensive income
	As at	As at
---	---	---
	September 30, 2021	September 30, 2020

Items that will be reclassified subsequently to net earnings:
Net unrealized gains on translating financial statements of foreign operations, net of accumulated income tax<br>expense of $43,208 ($56,239 as at September 30, 2020)	611,230	1,002,804
Net losses on cross-currency swaps and on translating long-term debt designated as hedges of net investments<br>in foreign operations, net of accumulated income tax recovery of $41,611 ($63,692 as at September 30, 2020)	(267,149	(417,462
Deferred gains of hedging on cross-currency swaps, net of accumulated income tax expense of $2,369 ($4,049 as<br>at September 30, 2020)	6,569	14,053
Net unrealized gains (losses) on cash flow hedges, net of accumulated income tax expense of $1,252 (net of<br>accumulated income tax recovery of $2,554 as at September 30, 2020)	5,029	(5,935
Net unrealized gains on financial assets at fair value through other comprehensive income, net of accumulated<br>income tax expense of $592 ($1,291 as at September 30, 2020)	2,191	4,340
Items that will not be reclassified subsequently to net earnings:
Net remeasurement losses on defined benefit plans, net of accumulated<br>income tax recovery of $11,084 ($18,920 as at September 30, 2020)	(26,290	(52,090
	331,580	545,710

All values are in US Dollars.

For the year ended September 30, 2021, $412,000 of the net unrealized loss on cash flow hedges, net of income tax recovery of $623,000, previously recognized in other comprehensive income were reclassified in the consolidated statements of earnings ($5,616,000 of net unrealized gains on cash flow hedges, net of income tax expense of $1,648,000, were reclassified for the year ended September 30, 2020).

For the year ended September 30, 2021, $10,317,000 of the deferred gains of hedging on cross-currency swaps, net of income tax expense of $3,719,000, were also reclassified in the consolidated statements of earnings ($10,268,000 and $3,702,000, respectively for the year ended September 30, 2020).

19.	Capital stock

The Company’s authorized share capital is comprised of an unlimited number, all without par value, of:

–	First preferred shares, issuable in series, carrying one vote per share, each series ranking equal with other series,<br>but prior to second preferred shares, Class A subordinate voting shares and Class B multiple voting shares with respect to the payment of dividends;
–	Second preferred shares, issuable in series, non-voting, each series ranking<br>equal with other series, but prior to Class A subordinate voting shares and Class B multiple voting shares with respect to the payment of dividends;
---	---
–	Class A subordinate voting shares, carrying one vote per share, participating equally with Class B multiple<br>voting shares with respect to the payment of dividends and convertible into Class B multiple voting shares under certain conditions in the event of certain takeover bids on Class B multiple voting shares; and
---	---
–	Class B multiple voting shares, carrying ten votes per share, participating equally with Class A subordinate<br>voting shares with respect to the payment of dividends and convertible at any time at the option of the holder into Class A subordinate voting shares.
---	---

112

Notes to the Consolidated Financial Statements

For the years ended September 30, 2021 and 2020

(tabular amounts only are in thousands of Canadian dollars, except per share data)

19.	Capital stock (continued)

For the fiscal years 2021 and 2020, the number of issued and outstanding Class A subordinate voting shares and Class B multiple voting shares varied as follows:

	Class A subordinate voting shares			Class B multiple voting shares					Total
	Number	****	Carrying value	Number	****	Carrying value	Number	****	Carrying value

As at September 30, 2019	239,857,462		1,863,595	28,945,706		40,382	268,803,168		1,903,977
Issued upon exercise of stock options^1^	1,438,877		69,420	—		—	1,438,877		69,420
PSUs exercised^2^	—		9,078	—		—	—		9,078
Purchased and cancelled^3^	(10,605,464	)	(165,315	—		—	(10,605,464	)	(165,315
Purchased and held in trusts^4^	—		(55,287	—		—	—		(55,287
As at September 30, 2020	230,690,875		1,721,491	28,945,706		40,382	259,636,581		1,761,873
Issued upon exercise of stock options^1^	1,290,919		73,827	—		—	1,290,919		73,827
PSUs exercised^2^	—		7,150	—		—	—		7,150
Purchased and cancelled^3^	(15,310,465	)	(177,560	—		—	(15,310,465	)	(177,560
Purchased and not cancelled^3^	—		(1,181	—		—	—		(1,181
Purchased and held in trusts^4^	—		(31,404	—		—	—		(31,404
Conversion of shares^5^	2,500,000		3,488	(2,500,000	)	(3,488	—		—
As at September 30, 2021	219,171,329	****	1,595,811	26,445,706	****	36,894	245,617,035	****	1,632,705

All values are in US Dollars.

^1^	The carrying value of Class A subordinate voting shares includes $12,773,000 ($12,269,000 during the year ended<br>September 30, 2020), which corresponds to a reduction in contributed surplus representing the value of accumulated compensation costs associated with the stock options exercised during the year ended September 30, 2021.
^2^	During the year ended September 30, 2021, 119,108 PSUs were exercised (157,788 during the year ended<br>September 30, 2020) with a recorded value of $7,150,000 ($9,078,000 during the year ended September 30, 2020) that was removed from contributed surplus. As at September 30, 2021, 1,433,521 Class A subordinate voting shares were<br>held in trusts under the PSU plans (1,243,022 as at September 30, 2020).
---	---
^3^	On January 26, 2021, the Company’s Board of Directors authorized and subsequently received the regulatory<br>approval from the Toronto Stock Exchange (TSX), for the renewal of the Normal Course Issuer Bid (NCIB) for the purchase for cancellation of up to 19,184,831 Class A subordinate voting shares on the open market through the TSX, the New York<br>Stock Exchange (NYSE) and/or alternative trading systems or otherwise pursuant to exemption orders issued by securities regulators. The Class A subordinate voting shares are available for purchase for cancellation commencing on February 6,<br>2021 until no later than February 5, 2022, or on such earlier date when the Company has either acquired the maximum number of Class A subordinate voting shares allowable under the NCIB or elects to terminate the bid.
---	---
During the year ended September 30, 2021, the Company purchased for cancellation 4,204,865 Class A<br>subordinate voting shares from the Caisse de dépôt et placement du Québec for a cash consideration of $400,000,000 (6,008,905 and $600,000,000, respectively during the year ended September 30, 2020). The excess of the<br>purchase price over the carrying value in the amount of $310,048,000 was charged to retained earnings ($471,455,000 during the year ended September 30, 2020). The purchase was made pursuant to an exemption order issued by the Autorité<br>des marchés financiers and is considered within the annual aggregate limit that the Company is entitled to purchase under its current NCIB.
---
In addition, during the year ended September 30, 2021, the Company purchased for cancellation 11,255,600<br>Class A subordinate voting shares (4,596,559 during the year ended September 30, 2020) under its previous and current NCIB for a cash consideration of $1,119,226,000 ($443,517,000 during the year ended September 30, 2020) and the<br>excess of the purchase price over the carrying value in the amount of $1,030,437,000 ($406,747,000 during the year ended September 30, 2020) was charged to retained earnings. Of the purchased Class A subordinate voting shares, 150,000<br>shares with a carrying value of $1,181,000 and a purchase value of $16,402,000 were held by the Company and were paid and cancelled subsequent to September 30, 2021.
---
^4^	During the year ended September 30, 2021, the trustees, in accordance with the terms of the PSU plans and Trust<br>Agreements, purchased 309,606 Class A subordinate voting shares of the Company on the open market (525,331 during the year ended September 30, 2020) for a cash consideration of $31,404,000 ($55,287,000 during the year ended<br>September 30, 2020).
---	---
^5^	On March 1, 2021, the Co-founder and Advisor to the Executive Chairman of<br>the Board of the Company, also a related party of the Company, converted a total of 2,500,000 Class B multiple voting shares into 2,500,000 Class A subordinate voting shares.
---	---

FISCAL 2021 RESULTS – 113

CONSOLIDATED FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

For the years ended September 30, 2021 and 2020

(tabular amounts only are in thousands of Canadian dollars, except per share data)

20.	Share-based payments
a)	Stock options
---	---

Under the Company’s stock option plan, the Board of Directors may grant, at its discretion, stock options to purchase Class A subordinate voting shares to certain employees, officers and directors of the Company and its subsidiaries. The exercise price is established by the Board of Directors and is equal to the closing price of the Class A subordinate voting shares on the TSX on the day preceding the date of the grant. Stock options generally vest over four years from the date of grant conditionally upon achievement of performance objectives and must be exercised within a ten-year period, except in the event of retirement, termination of employment or death. As at September 30, 2021, 15,139,513 Class A subordinate voting shares were reserved for issuance under the stock option plan.

The following table presents information concerning the outstanding stock options granted by the Company:

			2021		2020
	Number of options	****	Weightedaverage exerciseprice per share		Weighted<br>average exercise<br>price per share
					$
Outstanding, beginning of year	8,934,097	****	61.33		54.64
Granted	995,160	****	97.86		110.65
Exercised (Note 19)	(1,290,919	)	47.29	)	39.72
Forfeited	(622,940	)	107.82	)	84.50
Expired	(3,321	)	108.44	)	74.55
Outstanding, end of year	8,012,077	****	64.49		61.33
Exercisable, end of year	5,781,579	****	54.76		49.02

All values are in US Dollars.

The weighted average share price at the date of exercise for stock options exercised in 2021 was $104.75 ($99.79 in 2020).

The following table summarizes information about the outstanding stock options granted by the Company as at September 30, 2021:

	Options outstanding
Range ofexercise price	Weightedaverageremainingcontractual life	Weightedaverageexercise price	Weightedaverageexercise price
	(in years)		$
19.30 to 38.79	1.81	30.55	30.55
39.47 to 50.94	3.70	45.41	45.41
52.63 to 63.72	5.46	63.06	63.03
67.04 to 87.65	6.92	84.04	83.36
97.84 to 115.01	8.93	101.09	110.58
	5.37	64.49	54.76

All values are in US Dollars.

114

Notes to the Consolidated Financial Statements

For the years ended September 30, 2021 and 2020

(tabular amounts only are in thousands of Canadian dollars, except per share data)

20.	Share-based payments (continued)
a)	Stock options (continued)
---	---

The weighted average fair value of stock options granted in the year and the weighted average assumptions used in the calculation of their fair value on the date of grant using the Black-Scholes option pricing model were as follows:

	Year ended September 30
	2021	2020
Grant date fair value ($)	16.76	17.71
Dividend yield (%)	0.00	0.00
Expected volatility (%)^1^	20.76	16.60
Risk-free interest rate (%)	0.40	1.55
Expected life (years)	4.00	4.00
Exercise price ($)	97.86	110.65
Share price ($)	97.86	110.65
^1^	Expected volatility was determined using statistical formulas and based on the weekly historical average of closing daily<br>share prices over the period of the expected life of stock options.
---	---
b)	Performance share units
---	---

The Company operates two PSU plans with similar terms and conditions. Under both plans, the Board of Directors may grant PSUs to certain employees and officers which entitle them to receive one Class A subordinate voting share for each PSU. The vesting performance conditions are determined by the Board of Directors at the time of each grant. PSUs expire on the business day preceding December 31 of the third calendar year following the end of the fiscal year during which the PSU award was made, except in the event of retirement, termination of employment or death. Conditionally upon achievement of performance objectives, granted PSUs under the first plan vest annually over a period of four years from the date of the grant and granted PSUs under the second plan vest at the end of the four-year period.

Class A subordinate voting shares purchased in connection with the PSU plans are held in trusts for the benefit of the participants. The trusts, considered as structured entities, are consolidated in the Company’s consolidated financial statements with the cost of the purchased shares recorded as a reduction of capital stock (Note 19).

The following table presents information concerning the number of outstanding PSUs granted by the Company:

Outstanding as at September 30, 2019	861,485
Granted^1^	607,342
Exercised (Note 19)	(157,788	)
Forfeited	(79,569	)
Outstanding as at September 30, 2020	1,231,470
Granted^1^	669,252
Exercised (Note 19)	(119,108	)
Forfeited	(365,411	)
Outstanding as at September 30, 2021	1,416,203	****
^1^	The PSUs granted in 2021 had a grant date fair value of $94.00 per unit ($107.39 in 2020).
---	---
c)	Share purchase plan
---	---

Under the share purchase plan, the Company contributes an amount equal to a percentage of the employee’s basic contribution, up to a maximum of 3.50%. An employee may make additional contributions in excess of the basic contribution. However, the Company does not match contributions in the case of such additional contributions. The employee and Company’s contributions are remitted to an independent plan administrator who purchases Class A subordinate voting shares on the open market on behalf of the employee through either the TSX or NYSE.

FISCAL 2021 RESULTS – 115

CONSOLIDATED FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

For the years ended September 30, 2021 and 2020

(tabular amounts only are in thousands of Canadian dollars, except per share data)

20.	Share-based payments (continued)
d)	Deferred share unit plan
---	---

External members of the Board of Directors (participants) are entitled to receive part or their entire retainer fee in DSUs. DSUs are granted with immediate vesting and must be exercised no later than December 15 of the calendar year immediately following the calendar year during which the participant ceases to act as a director. Each DSU entitles the holder to receive a cash payment equal to the closing price of Class A subordinate voting shares on the TSX on the payment date. As at September 30, 2021, the number of outstanding DSUs was 101,578 (152,743 DSUs as at September 30, 2020).

e)	Share-based payment costs

The share-based payment expense recorded in costs of services, selling and administrative is as follows:

	Year ended September 30
	2021	2020
	$
Stock options	13,108	16,378
PSUs	32,484	20,979
Share purchase plan	128,662	127,983
DSUs	2,876	(607
	177,130	164,733

All values are in US Dollars.

21.	Earnings per share

The following table sets forth the computation of basic and diluted earnings per share for the years ended September 30:

		2021		2020
	Net earnings	Earnings pershare	Net earnings	Earnings per<br>share
		$		$
Basic	1,369,072	5.50	1,117,862	4.27
Net effect of dilutive stock options and PSUs^2^
	1,369,072	5.41	1,117,862	4.20

All values are in US Dollars.

^1^	During the year ended September 30, 2021, 15,460,465 Class A subordinate voting shares purchased for cancellation and<br>1,433,521 Class A subordinate voting shares held in trust were excluded from the calculation of weighted average number of shares outstanding as of the date of transaction (10,605,464 and 1,243,022, respectively during the year ended September 30,<br>2020).
^2^	The calculation of the diluted earnings per share excluded 1,276,809 stock options for the year ended<br>September 30, 2021 (876,213 for the year ended September 30, 2020), as they were anti-dilutive.
---	---
22.	Remaining performance obligations
---	---

Remaining performance obligations relates to Company’s performance obligations that are partially or fully unsatisfied under fixed-fee arrangements.

The amount of the selling price allocated to remaining performance obligations as at September 30, 2021 is $939,499,000 ($824,854,000 as at September 30, 2020) and is expected to be recognized as revenue within a weighted average of 1.8 years (1.4 years as at September 30, 2020).

116

Notes to the Consolidated Financial Statements

For the years ended September 30, 2021 and 2020

(tabular amounts only are in thousands of Canadian dollars, except per share data)

23.	Costs of services, selling and administrative
	Year ended September 30
---	---	---
	2021	2020
	$	$
Salaries and other member costs^1^	7,317,113	7,264,839
Professional fees and other contracted labour	1,262,659	1,355,065
Hardware, software and data center related costs	830,199	800,496
Property costs	216,506	259,306
Amortization, depreciation and impairment (Note 24)	505,562	556,061
Other operating expenses	46,125	66,301
	10,178,164	10,302,068
^1^	Net of R&D and other tax credits of $167,198,000 in 2021 ($160,335,000 in 2020).
---	---
24.	Amortization, depreciation and impairment
---	---
	Year ended September 30
---	---	---
	2021	2020
		$
Depreciation of PP&E (Note 6)	144,423	156,590
Depreciation of right-of-use<br>assets (Note 7)	160,240	168,239
Impairment of right-of-use<br>assets (Note 7)	956	3,269
Amortization of contract costs related to transition costs	61,369	55,905
Impairment of contract costs related to transition costs	4,592	4,047
Amortization of intangible assets (Note 9)	129,861	157,378
Impairment of intangible assets (Note<br>9)	4,121	10,633
Included in costs of services, selling and administrative (Note<br>23)	505,562	556,061
Amortization of contract costs related to incentives (presented as a reduction of revenue)	2,611	2,535
Amortization of deferred financing fees (presented in finance costs)	875	890
Amortization of premiums and discounts on investments related to funds held for clients (presented net as a<br>(increase) reduction of revenue)	(102	79
Impairment of PP&E (presented in restructuring costs) (Note 6 and<br>13)	—	1,035
Impairment of right-of-use<br>assets (presented in restructuring costs) (Note 7 and 13)	—	5,092
Impairment of PP&E (presented in integration costs) (Note 6)	1,113	—
Impairment of right-of-use assets (presented in integration costs) (Note 7)	511	—
	510,570	565,692

All values are in US Dollars.

25.	Net finance costs
	Year ended September 30
---	---	---
	2021	2020

Interest on long-term debt	67,467	75,667
Interest on lease liabilities	33,255	33,017
Net interest costs on net defined benefit obligations or assets (Note<br>17)	2,413	1,876
Other finance costs	6,774	9,029
Finance costs	109,909	119,589
Finance income	(3,111	(5,115
	106,798	114,474

All values are in US Dollars.

FISCAL 2021 RESULTS – 117

CONSOLIDATED FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

For the years ended September 30, 2021 and 2020

(tabular amounts only are in thousands of Canadian dollars, except per share data)

26.	Investments in subsidiaries
a)	Business acquisitions realized in current fiscal year
---	---

The Company made the following acquisitions during the year ended September 30, 2021:

–	On December 31, 2020, the Company acquired the assets of Harris, Mackessy & Brennan, Inc.’s<br>Professional Services Division (HMB), for a purchase price of $30,340,000. Based in the United States, the division focused on high-end technology consulting and services for commercial and government clients<br>and is headquartered in Columbus, Ohio.
–	On May 3, 2021, the Company acquired all of the outstanding shares of Sense Corp, for a purchase price of<br>$81,173,000. Based in the United States, the professional services firm focused on digital systems integration and consulting for state and local government and commercial clients and is headquartered in Saint-Louis, Missouri.
---	---

	2021

Current assets	17,746
PP&E (Note 6)	1,869
Right-of-use assets (Note 7)	4,982
Intangible assets (Note 9)	22,107
Deferred tax assets	749
Goodwill^1^(Note<br>12)	75,697
Current liabilities	(11,859
Lease liabilities	(5,733
	105,558
Cash acquired	5,955
Net assets acquired	111,513
Consideration paid	104,148
Consideration payable	7,365

All values are in US Dollars.

^1^	The goodwill arising from the acquisitions mainly represents the future economic value associated to acquired work<br>force and synergies with the Company’s operations. As at September 30, 2021, $75,697,000 of the goodwill is included in the U.S. Commercial and State Government operating segment. An amount of goodwill of $23,985,000 is deductible for tax<br>purposes.

118

Notes to the Consolidated Financial Statements

For the years ended September 30, 2021 and 2020

(tabular amounts only are in thousands of Canadian dollars, except per share data)

26.	Investments in subsidiaries (continued)
a)	Business acquisitions realized in current fiscal year (continued)
---	---

During the year ended September 30, 2021, the Company finalized the fair value of assets acquired and liabilities assumed for HMB and Sense Corp.

For the year ended September 30, 2021, the above acquisitions would have contributed approximately $100,000,000 of revenues and $8,000,000 of earnings before acquisition-related and integration costs, and income taxes to the financial results of the Company had the acquisition dates been October 1, 2020. These pro-forma figures are estimated based on the historical financial performance of the acquired businesses prior to the business combinations and do not include any financial synergies.

These acquisitions were made to further expand CGI’s footprint in the region and to complement CGI’s proximity model.

b)	Subsequent events

On October 1, 2021, the Company acquired all of the outstanding shares of Array Holding Company, Inc. (Array), for a purchase price of $63,279,000. Based in the United States, Array is a leading digital services provider that optimizes mission performance for the U.S. Department of Defense and other government organizations and is headquartered in Greenbelt, Maryland**.**

On October 28, 2021, the Company acquired all of the outstanding shares of Cognicase Management Consulting (CMC), for a purchase price of $93,080,000. Based in Spain, CMC is a leading provider of technology and management consulting services and solutions, headquartered in Madrid. The acquisition will be reported under the Western and Southern Europe operating segment. Due to the limited period of time between the date of the CMC acquisition and the filing of the Company’s consolidated financial statements for the year ended September 30, 2021, it was impracticable to provide certain business acquisitions required disclosures, including the fair value of assets acquired and liabilities assumed. The Company will issue the preliminary assessments in its interim condensed consolidated financial statements for the three months ending December 31, 2021.

These acquisitions were made to further expand CGI’s footprint in the regions and to complement CGI’s proximity model.

c)	Business acquisitions realized in the prior fiscal year

The Company made the following significant acquisitions during the year ended September 30, 2020:

–	On December 18, 2019, the Company acquired all of the outstanding shares of SCISYS Group Plc (SCISYS), for a<br>purchase price of $130,260,000. Predominantly based in United Kingdom and Germany, SCISYS operates in several sectors, with deep expertise and industry leading solutions in the space and defense sectors, as well as in the media and broadcast news<br>industries, headquartered in Dublin, Ireland.
–	On January 20, 2020, the Company acquired all of the outstanding shares of Meti Logiciels et Services SAS (Meti),<br>for a purchase price of $43,404,000. Based in France, Meti is specialized in the development of software solutions for the retail sector across Europe and works with some of Europe’s largest retailers.
---	---
–	On March 31, 2020, the Company acquired all of the outstanding shares of TeraThink Corporation (TeraThink), for a<br>purchase price of $99,388,000. Based in the United States, TeraThink is an information technology and management consulting firm providing digitization, enterprise finance, risk management, and data analytics services to the U.S. federal government<br>and is headquartered in Reston, Virginia.
---	---

With significant strategic consulting, system integration and customer-centric digital innovation capabilities, these acquisitions were made to complement CGI’s proximity model and expertise across key sectors, including communications, retail, space and defense and government.

FISCAL 2021 RESULTS – 119

CONSOLIDATED FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

For the years ended September 30, 2021 and 2020

(tabular amounts only are in thousands of Canadian dollars, except per share data)

26.	Investments in subsidiaries (continued)
c)	Business acquisitions realized in the prior fiscal year (continued)
---	---

The following table presents the fair value of assets acquired and liabilities assumed for all acquisitions based on the acquisition-date fair values of the identifiable tangible and intangible assets acquired and liabilities assumed. During the year ended September 30, 2020, the fair value of assets acquired and liabilities assumed for SCISYS, TeraThink and Meti were preliminary.



Current assets
PP&E (Note 6)
Right-of-use assets (Note 7)
Intangible assets (Note 9)
Goodwill^1^
Current liabilities	)	)	)	)
Deferred tax liabilities	)		)	)
Retirement benefits obligations (Note 17)			)	)
Long-term debt	)	)	)	)
Lease liabilities	)	)	)	)

Cash acquired
Net assets acquired
Consideration paid

All values are in US Dollars.

^1^

The goodwill arising from the acquisitions mainly represents the future economic value associated to acquired work force and synergies with the Company’s operations. As at September 30, 2020, $32,272,000 of the goodwill is included in the Western and Southern Europe operating segment, $5,411,000 in the Canada operating segment, $86,642,000 in the U.S. Federal operating segment, $53,170,000 in the U.K and Australia operating segment and $91,542,000 in the Central and Eastern Europe operating segment. The goodwill is only deductible for tax purposes for TeraThink.

During the year ended September 30, 2021, the Company finalized the fair value of assets acquired and liabilities assumed for TeraThink with no significant adjustments.

During the year ended September 30, 2021, the Company finalized the fair value of assets acquired and liabilities assumed for SCISYS and Meti with adjustments resulting mainly in an increase of business solutions acquired and a decrease of client relationships.

d)	Acquisition-related and integration costs

During the year ended September 30, 2021, the Company expensed $7,371,000, for acquisition-related and integration costs. This amount includes acquisition-related costs of $293,000, and integration costs of $7,078,000. The acquisition-related costs consist mainly of professional fees incurred for the acquisitions. The integration costs include terminations of employment of $1,008,000, accounted for in restructuring provisions, and other integration costs of $6,070,000.

During the year ended September 30, 2020, the Company expensed $76,794,000, for acquisition-related and integration costs. This amount included acquisition-related costs of $6,545,000, and integration costs of $70,249,000. The acquisition-related costs consisted mainly of professional fees incurred for the acquisitions. The integration costs included terminations of employment of $49,390,000, accounted for in restructuring provisions, and other integration costs of $20,859,000.

e)	Disposal

There was no significant disposal during the years ended September 30, 2021 and 2020.

120

Notes to the Consolidated Financial Statements

For the years ended September 30, 2021 and 2020

(tabular amounts only are in thousands of Canadian dollars, except per share data)

27.	Supplementary cash flow information

a) Net change in non-cash working capital items is as follows for the years ended September 30:



Accounts receivable	)
Work in progress	)
Prepaid expenses and other assets	)
Long-term financial assets	)	)
Accounts payable and accrued liabilities	****	)
Accrued compensation and employee-related liabilities	****	)
Deferred revenue	****	)
Income taxes	****	)
Provisions	)
Long-term liabilities	****
Derivative financial instruments	)
Retirement benefits obligations	****	)
	****

All values are in US Dollars.

b) Non-cash operating and investing activities related to operations are as follows for the years ended September 30:



Operating activities
Accounts payable and accrued liabilities	****
Provisions	****
	****
Investing activities
Purchase of PP&E	)	)
Additions, disposals/retirements, change in estimates and lease modifications of right-of-use assets	)	)
Additions to intangible assets	)	)
	)	)

All values are in US Dollars.

FISCAL 2021 RESULTS – 121

CONSOLIDATED FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

For the years ended September 30, 2021 and 2020

(tabular amounts only are in thousands of Canadian dollars, except per share data)

27. Supplementary cash flow information (continued)

c) Changes arising from financing activities are as follows for the years ended September 30:

					2021						2020
	Long-termdebt		Derivativefinancialinstrumentsto hedgelong-termdebt		Leaseliabilities		Long-termdebt		Derivativefinancialinstrumentsto hedgelong-termdebt		Leaseliabilities

Balance, beginning of year		****		****		****				)
Adoption of IFRS 16 (Note<br>3)		****		****		****		)
Opening balance		****		****		****				)
Cash used in financing activities excluding equity
Net change in unsecured committed revolving credit facility		****		****		****		)
Increase of long-term debt		****		****		****
Repayment of long-term debt and lease liabilities		)		****		)		)				)
Repayment of debt assumed in business acquisitions		****		****		****		)
Settlement of derivative financial instruments (Note<br>31)		****		)		****				)
Non-cash financing activities
Additions, disposals/retirements and change in estimates and lease modifications of right-of-use assets		****		****		****
Additions through business acquisitions (Note 26)		****		****		****
Changes in foreign currency exchange rates		)		)		)		)
Other		)		****		)						)
Balance, end of year		****		****		****

All values are in US Dollars.

d) Interest paid and received and income taxes paid are classified within operating activities and are as follows for the years ended September 30:

	2021	2020

Interest paid
Interest received
Income taxes paid

All values are in US Dollars.

e) Cash and cash equivalents consisted of unrestricted cash as at September 30, 2021 and 2020.

122

Notes to the Consolidated Financial Statements

For the years ended September 30, 2021 and 2020

(tabular amounts only are in thousands of Canadian dollars, except per share data)

28.	Segmented information

The following tables present information on the Company’s operations based on its current management structure. Segment results are based on the location from which the services are delivered - the geographic delivery model (Note 12).

									Year ended September 30,2021
	Western<br>and SouthernEurope	U.S.Commercialand StateGovernment	Canada	U.S.<br>Federal	U.K. andAustralia	Central<br>and EasternEurope	Scandinavia	Finland,Poland<br>and Baltics	Asia<br>Pacific	Eliminations		Total

Segment revenue											)		****
Segment earnings before acquisition-related and integration costs, net finance costs and income tax expense^1^											****		****
Acquisition-related and integration costs (Note 26d)													)
Net finance costs (Note 25)													)
Earnings before income taxes													****

All values are in US Dollars.

^1^	Total amortization and depreciation of $508,071,000 included in the Western and Southern Europe, U.S. Commercial and<br>State Government, Canada, U.S. Federal, U.K. and Australia, Central and Eastern Europe, Scandinavia, Finland, Poland and Baltics and Asia Pacific segments is $63,511,000, $71,037,000, $65,038,000, $49,636,000, $57,888,000, $70,076,000, $64,371,000,<br>$39,275,000 and $27,239,000, respectively for the year ended September 30, 2021. Amortization includes impairments of $8,713,000 from business solutions and contract costs which are mainly included in Western and Southern Europe for $3,058,000<br>related to a business solution and in Finland, Poland and Baltics for $3,490,000 related to contract costs. These assets were no longer expected to generate future economic benefits.
									Year ended September 30,2020
---	---	---	---	---	---	---	---	---	---	---	---	---	---
	WesternandSouthernEurope	U.S.Commercialand StateGovernment	Canada	U.S.Federal	U.K. andAustralia	CentralandEasternEurope	Scandinavia	Finland,PolandandBaltics	AsiaPacific	Eliminations		Total

Segment revenue											)
Segment earnings before acquisition-related and integration costs, restructuring costs, net finance costs<br>and income tax expense^1^
Acquisition-related and integration costs (Note 26d)													)
Restructuring costs													)
Net finance costs (Note 25)													)
Earnings before income taxes

All values are in US Dollars.

^1^

Total amortization and depreciation of $558,675,000 included in the Western and Southern Europe, U.S. Commercial and State Government, Canada, U.S. Federal, U.K. and Australia, Central and Eastern Europe, Scandinavia, Finland, Poland and Baltics and Asia Pacific segments is $64,084,000, $89,150,000, $69,921,000, $47,443,000, $68,346,000, $84,592,000, $71,590,000, $39,055,000 and $24,494,000, respectively for the year ended September 30, 2020. Amortization includes impairments of $14,680,000 from business solutions and contract costs which are mainly included in U.S. Commercial and State Government for $3,396,000 of business solutions, Canada for $3,589,000 of business solutions and Finland, Poland and Baltics for $4,065,000 of contract costs and a business solution. These assets were no longer expected to generate future economic benefits.

The accounting policies of each operating segment are the same as those described in Note 3, Summary of significant accounting policies. Intersegment revenue is priced as if the revenue was from third parties.

FISCAL 2021 RESULTS – 123

CONSOLIDATED FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

For the years ended September 30, 2021 and 2020

(tabular amounts only are in thousands of Canadian dollars, except per share data)

28.	Segmented information (continued)

GEOGRAPHIC INFORMATION

The following table provides external revenue information based on the client’s location which is different from the revenue presented under operating segments, due to the inter-segment revenue, for the years ended September 30:

	2021	2020

Western and Southern Europe
France
Portugal
Others

U.S.^1^
Canada
U.K. and Australia
U.K.
Australia
	1,555,690	1,572,427
Central and Eastern Europe
Germany
Netherlands
Others

Scandinavia
Sweden
Others
	1,073,261	1,158,393
Finland, Poland and Baltics
Finland
Others
	792,072	804,001
Asia Pacific
Others

All values are in US Dollars.

^1^	External revenue included in the U.S Commercial and State Government and U.S. Federal operating segments was<br>$1,889,999,000 and $1,620,194,000, respectively in 2021 ($1,902,661,000 and $1,734,409,000, respectively in 2020).

124

Notes to the Consolidated Financial Statements

For the years ended September 30, 2021 and 2020

(tabular amounts only are in thousands of Canadian dollars, except per share data)

28.	Segmented information (continued)

GEOGRAPHIC INFORMATION (CONTINUED)

The following table provides information for PP&E, right-of-use assets, contract costs and intangible assets based on their location:

	As atSeptember 30, 2021	As atSeptember 30, 2020

U.S.
Canada
U.K.
France
Sweden
Finland
Germany
Netherlands
Rest of the world

All values are in US Dollars.

INFORMATION ABOUT SERVICES

The following table provides revenue information based on services provided by the Company for the year ended September 30:

	2021	2020

Business consulting, strategic IT consulting and systems integration
Managed IT and business process services

All values are in US Dollars.

MAJOR CLIENT INFORMATION

Contracts with the U.S. federal government and its various agencies, included within the U.S. Federal operating segment, accounted for $1,550,345,000 and 12.8% of revenues for the year ended September 30, 2021 ($1,675,326,000 and 13.8% for the year ended September 30, 2020).

FISCAL 2021 RESULTS – 125

CONSOLIDATED FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

For the years ended September 30, 2021 and 2020

(tabular amounts only are in thousands of Canadian dollars, except per share data)

29.	Related party transactions

During the year ended September 30, 2021, the Company entered into a share conversion transaction with a related party as described in Note 19. As a result, the Company and related subsidiaries are controlled by the Founder and Executive Chairman of the Board.

a)	Transactions with subsidiaries and other related parties

Balances and transactions between the Company and its subsidiaries have been eliminated on consolidation. The Company owns 100% of the equity interests of its principal subsidiaries.

The Company’s principal subsidiaries whose revenues, based on the geographic delivery model, represent more than 3% of the consolidated revenues are as follows:

Name of subsidiary	Country of incorporation
CGI Technologies and Solutions Inc.	United States
CGI France SAS	France
CGI Federal Inc.	United States
CGI IT UK Limited	United Kingdom
CGI Information Systems and Management Consultants Inc.	Canada
Conseillers en gestion et informatique CGI Inc.	Canada
CGI Deutschland B.V. & Co KG	Germany
CGI Sverige AB	Sweden
CGI Suomi OY	Finland
CGI Information Systems and Management Consultants Private Limited	India
CGI Nederland BV	Netherlands
b)	Compensation of key management personnel
---	---

Compensation of key management personnel, currently defined as the executive officers and the Board of Directors of the Company, was as follows for the year ended September 30:

	2021	2020

Short-term employee benefits
Share-based payments

All values are in US Dollars.

126

Notes to the Consolidated Financial Statements

For the years ended September 30, 2021 and 2020

(tabular amounts only are in thousands of Canadian dollars, except per share data)

30.	Commitments, contingencies and guarantees
a)	Commitments
---	---

As at September 30, 2021, the Company entered into long-term service agreements representing a total commitment of $279,823,000. Minimum payments under these agreements are due as follows:


Less than one year
Between one and three years
Between three and five years
Beyond five years

All values are in US Dollars.

b)	Contingencies

From time to time, the Company is involved in legal proceedings, audits, litigation and claims which primarily relate to tax exposure, contractual disputes and employee claims arising in the ordinary course of its business. Certain of these matters seek damages in significant amounts and will ultimately be resolved when one or more future events occur or fail to occur. Although the outcome of such matters is not predictable with assurance, the Company has no reason to believe that the disposition of any such current matter could reasonably be expected to have a materially adverse impact on the Company’s financial position, results of operations or the ability to carry on any of its business activities. Claims for which there is a probable unfavourable outcome are recorded in provisions.

In addition, the Company is engaged to provide services under contracts with various government agencies. Some of these contracts are subject to extensive legal and regulatory requirements and, from time to time, government agencies investigate whether the Company’s operations are being conducted in accordance with these requirements. Generally, the governments agencies have the right to change the scope of, or terminate, these projects at its convenience. The termination or reduction in the scope of a major government contract or project could have a materially adverse effect on the results of operations and the financial condition of the Company.

c)	Guarantees

Sale of assets and business divestitures

In connection with the sale of assets and business divestitures, the Company may be required to pay counterparties for costs and losses incurred as the result of breaches in contractual obligations, representations and warranties, intellectual property right infringement and litigation against counterparties, among others. While some of the agreements specify a maximum potential exposure, others do not specify a maximum amount or a maturity date. It is not possible to reasonably estimate the maximum amount that may have to be paid under such guarantees. The amounts are dependent upon the outcome of future contingent events, the nature and likelihood of which cannot be determined at this time. No amount has been accrued in the consolidated balance sheets relating to this type of indemnification as at September 30, 2021. The Company does not expect to incur any potential payment in connection with these guarantees that could have a materially adverse effect on its consolidated financial statements.

Other transactions

In the normal course of business, the Company may provide certain clients, principally governmental entities, with bid and performance bonds. In general, the Company would only be liable for the amount of the bid bonds if the Company refuses to perform the project once the bid is awarded. The Company would also be liable for the performance bonds in the event of default in the performance of its obligations. As at September 30, 2021, the Company had committed a total of $21,419,000 of these bonds. To the best of its knowledge, the Company is in compliance with its performance obligations under all service contracts for which there is a bid or performance bond, and the ultimate liability, if any, incurred in connection with these guarantees, would not have a materially adverse effect on the Company’s consolidated results of operations or financial condition.

Moreover, the Company has letters of credit for a total of $69,683,000 in addition to the letters of credit covered by the unsecured committed revolving credit facility (Note 14). These guarantees are required in some of the Company’s contracts with customers.

FISCAL 2021 RESULTS – 127

CONSOLIDATED FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

For the years ended September 30, 2021 and 2020

(tabular amounts only are in thousands of Canadian dollars, except per share data)

31.	Financial instruments

FAIR VALUE MEASUREMENTS

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Valuation techniques used to value financial instruments are as follows:

-	The fair value of Senior U.S. unsecured notes, the 2021 U.S. Senior Notes, the 2021 CAD Senior Notes, the unsecured<br>committed revolving credit facility, the unsecured committed term loan credit facility and the other long-term debt is estimated by discounting expected cash flows at rates currently offered to the Company for debts of the same remaining maturities<br>and conditions;
-	The fair value of long-term bonds included in funds held for clients and in long-term investments is determined by<br>discounting the future cash flows using observable inputs, such as interest rate yield curves or credit spreads, or according to similar transactions on an arm’s-length basis;
---	---
-	The fair value of foreign currency forward contracts is determined using forward exchange rates at the end of the<br>reporting period;
---	---
-	The fair value of cross-currency swaps and interest rate swaps is determined based on market data (primarily yield<br>curves, exchange rates and interest rates) to calculate the present value of all estimated cash flows;
---	---
-	The fair value of cash and cash equivalents and short-term investments included in current financial assets is<br>determined using observable quotes; and
---	---
-	The fair value of deferred compensation plan assets within long-term financial assets is based on observable price<br>quotations and net assets values at the reporting date.
---	---

As at September 30, 2021, there were no changes in valuation techniques.

The following table presents the financial liabilities included in the long-term debt (Note 14) measured at amortized cost categorized using the fair value hierarchy.

			As at September 30, 2021		As at September 30, 2020
	Level		Carrying amount	Fair value	Carrying amount	Fair value

Senior U.S. unsecured notes		Level 2
2021 U.S. Senior Notes		Level 2
2021 CAD Senior Notes		Level 2
Other long-term debt		Level 2

All values are in US Dollars.

For the remaining financial assets and liabilities measured at amortized cost, the carrying values approximate the fair values of the financial instruments given their short term maturity.

128

Notes to the Consolidated Financial Statements

For the years ended September 30, 2021 and 2020

(tabular amounts only are in thousands of Canadian dollars, except per share data)

31.	Financial instruments (continued)

FAIR VALUE MEASUREMENTS (CONTINUED)

The following table presents financial assets and liabilities measured at fair value categorized using the fair value hierarchy:

	Level		As at September 30, 2021	As at September 30, 2020

Financial assets
FVTE
Cash and cash equivalents		Level 2
Deferred compensation plan assets (Note<br>11)		Level 1

Derivative financial instruments designated as hedging instruments
Current derivative financial instruments included in current financial assets		Level 2
Cross-currency swaps
Foreign currency forward contracts
Interest rate swaps
Long-term derivative financial instruments (Note 11)		Level 2
Cross-currency swaps
Foreign currency forward contracts
Interest rate swaps

FVOCI
Short-term investments included in current financial assets		Level 2
Long-term bonds included in funds held for clients (Note 5)		Level 2
Long-term investments (Note<br>11)		Level 2

Financial liabilities
Derivative financial instruments designated as hedging instruments
Current derivative financial instruments		Level 2
Cross-currency swaps
Foreign currency forward contracts
Long-term derivative financial instruments		Level 2
Cross-currency swaps
Foreign currency forward contracts

All values are in US Dollars.

There have been no transfers between Level 1 and Level 2 for the years ended September 30, 2021 and 2020.

FISCAL 2021 RESULTS – 129

CONSOLIDATED FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

For the years ended September 30, 2021 and 2020

(tabular amounts only are in thousands of Canadian dollars, except per share data)

31.	Financial instruments (continued)

MARKET RISK

Market risk incorporates a range of risks. Movements in risk factors, such as interest rate risk and currency risk, affect the fair values of financial assets and liabilities.

Interest rate risk

The Company has interest rate swaps whereby the Company receives a fixed rate of interest and pays interest at a variable rate of its Senior U.S. unsecured note. These swaps are being used to hedge the exposure to changes in the fair value of the debt. The following table summarizes the fair value of these swaps:

								As at<br>September 30, 2021	As at<br>September 30, 2020
Interest rate swaps	Notional amount		Receive Rate	Pay Rate		Maturity		Fair value	Fair value

Fair value hedges of Senior U.S. unsecured note		U.S.$250,000	4.99%		LIBOR 1 month<br> <br>+ 3.26%		December 2021

All values are in US Dollars.

Senior U.S. unsecured note with a carrying value of $318,009,000, includes an accumulated amount of fair value hedge adjustments of $1,132,000 as at September 30, 2021.

In addition, the Company designates cross-currency interest rate swaps as cash flow hedges for changes in both interest rates and foreign exchange rates of foreign currency denominated long-term debt as described below.

The Company is also exposed to interest rate risk on its unsecured committed revolving credit facility carrying amount.

The Company analyzes its interest rate risk exposure on an ongoing basis using various scenarios to simulate refinancing or the renewal of existing positions. Based on these scenarios, a change in the interest rate of 1% would not have had a significant impact on net earnings.

Currency risk

The Company operates internationally and is exposed to risk from changes in foreign currency exchange rates. The Company mitigates this risk principally through foreign currency denominated debt and derivative financial instruments, which includes foreign currency forward contracts and cross-currency swaps.

The Company hedges a portion of the translation of the Company’s net investments in its U.S. operations into Canadian dollar, with Senior U.S. unsecured notes. As of September 30, 2021, the Senior U.S. unsecured notes of a carrying value of $1,742,324,000 and a nominal amount of $1,741,252,000 have been designated as hedging instruments to hedge portions of the Company’s net investments in its U.S. operations.

The Company also hedges a portion of the translation of the Company’s net investments in its European operations with cross-currency swaps.

130

Notes to the Consolidated Financial Statements

For the years ended September 30, 2021 and 2020

(tabular amounts only are in thousands of Canadian dollars, except per share data)

31.	Financial instruments (continued)

MARKET RISK (CONTINUED)

Currency risk (continued)

The following tables summarize the cross-currency swap agreements that the Company had entered into in order to manage its currency:

								As atSeptember 30, 2021		As atSeptember 30, 2020
Receive Notional		Receive Rate	Pay Notional		Pay rate	Maturity		Fair value		Fair value

****	Hedges of net investmentsin European operations										****
	$228,700	From 3.41% to 3.81%		€147,200	From 2.14% to 2.51%		From September<br>2022 to 2024		****
	$136,274	From 3.57% to 3.63%		£75,842	From 2.67% to 2.80%		September 2024		****
	$58,419	From 3.57% to 3.68%		Skr371,900	From 2.12% to 2.18%		September 2024		****
****	Hedges of net investmentsin European operations and cash flow hedges on unsecured committed term loan credit facility										****
	U.S.$500,000	LIBOR 1 month + 1.00%		€443,381	From 1.13% to 1.17%		December 2023		)		)
****	Cash flow hedges of SeniorU.S. unsecured notes										****
	U.S.$315,000	From 3.74% to 4.06%		$423,393	From 3.41% to 3.81%		From September<br>2022 to 2024		)		)
	Total								)		)

All values are in US Dollars.

During the year ended September 30, 2021, the Company settled cross-currency swaps with a notional amount of $145,500,000 for a net amount of $6,992,000. The related amounts recognized in accumulated other comprehensive income will be transferred to earnings when the net investment is disposed of.

The Company enters into foreign currency forward contracts to hedge the variability in various foreign currency exchange rates on future revenues. Hedging relationships are designated and documented at inception and quarterly effectiveness assessments are performed during the year.

As at September 30, 2021, the Company held foreign currency forward contracts to hedge exposures to changes in foreign currency, which have the following notional, average contract rates and maturities:

					As atSeptember 30, 2021		As atSeptember 30, 2020
Foreign currency forward contracts			More than one year		Fair value		Fair value

/	U.S.146,367	76.52		82.88		****
CAD/	266,077	59.50		63.87		****
/	86,244	92.21		99.38		****
/	70,552	102.82		111.37		****
SEK/	Skr151,588	8.60		9.04		)
/	31,955	0.89		0.89		****		)
/MAD	32,196	10.67		10.99		****
/CZK	17,704	26.63		26.81		****		)
/SEK	19,185	10.66		10.75		****
Others	60,293					****		)
Total						****

All values are in US Dollars.

FISCAL 2021 RESULTS – 131

CONSOLIDATED FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

For the years ended September 30, 2021 and 2020

(tabular amounts only are in thousands of Canadian dollars, except per share data)

31.	Financial instruments (continued)

MARKET RISK (CONTINUED)

Currency risk (continued)

The following table details the Company’s sensitivity to a 10% strengthening of the Swedish krona, the U.S. dollar, the euro and the British pound foreign currency rates on net earnings and comprehensive income. The sensitivity analysis on net earnings presents the impact of foreign currency denominated financial instruments and adjusts their translation at period end for a 10% strengthening in foreign currency rates. The sensitivity analysis on other comprehensive income presents the impact of a 10% strengthening in foreign currency rates on the fair value of foreign currency forward contracts designated as cash flow hedges and on net investment hedges.

							2021								2020
	Swedishkrona impact		U.S. dollarimpact		euro impact		Britishpound impact		Swedish krona impact		U.S. dollarimpact		euro impact		Britishpound impact

Increase in net earnings		****		****		****		****
Decrease in other comprehensive (loss) income		)		)		)		)		)		)		)		)

All values are in US Dollars.

LIQUIDITY RISK

Liquidity risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial assets. The Company’s activities are financed through a combination of the cash flows from operations, borrowing under existing unsecured committed revolving credit facility, the issuance of debt and the issuance of equity. One of management’s primary goals is to maintain an optimal level of liquidity through the active management of the assets and liabilities as well as the cash flows. The Company regularly monitors its cash forecasts to ensure it has sufficient flexibility under its available liquidity to meet its obligations.

132

Notes to the Consolidated Financial Statements

For the years ended September 30, 2021 and 2020

(tabular amounts only are in thousands of Canadian dollars, except per share data)

31.	Financial instruments (continued)

LIQUIDITY RISK (CONTINUED)

The following tables summarize the carrying amount and the contractual maturities of both the interest and principal portion of financial liabilities. All amounts contractually denominated in foreign currency are presented in Canadian dollar equivalent amounts using the period-end spot rate or floating rate.

As at September 30, 2021	Carryingamount	Contractualcash flows		Less thanone year		Between oneandthree years		Betweenthree and fiveyears		Beyondfive years

Non-derivative financial liabilities
Accounts payable and accrued liabilities
Accrued compensation and employee-related liabilities
Senior U.S. unsecured notes
2021 U.S. Senior Notes
2021 CAD Senior Notes
Unsecured committed term loan credit facility
Lease liabilities
Other long-term debt
Clients’ funds obligations
Derivative financial liabilities
Cash flow hedges of future revenue
Outflow
(Inflow)			)		)		)		)
Cross-currency swaps
Outflow
(Inflow)			)		)		)

As at September 30, 2020	Carryingamount	Contractualcash flows		Less thanone year		Between oneandthree years		Betweenthree and fiveyears		Beyondfive years

Non-derivative financial liabilities
Accounts payable and accrued liabilities
Accrued compensation and employee-related liabilities
Senior U.S. and euro unsecured notes
Unsecured committed term loan credit facilities
Lease liabilities
Other long-term debt
Clients’ funds obligations
Derivative financial liabilities
Cash flow hedges of future revenue
Outflow
(Inflow)			)		)		)		)
Cross-currency swaps
Outflow
(Inflow)			)		)		)		)
Non deliverable forwards
Outflow

All values are in US Dollars.

FISCAL 2021 RESULTS – 133

CONSOLIDATED FINANCIAL STATEMENTS

Notes to the Consolidated Financial Statements

For the years ended September 30, 2021 and 2020

(tabular amounts only are in thousands of Canadian dollars, except per share data)

31.	Financial instruments (continued)

LIQUIDITY RISK (CONTINUED)

As at September 30, 2021, the Company held cash and cash equivalents, funds held for clients, short-term investments and long-term investments of $2,312,741,000 ($2,457,248,000 as at September 30, 2020). The Company also had available $1,493,372,000 in unsecured committed revolving credit facility ($1,490,301,000 as at September 30, 2020). As at September 30, 2021, trade accounts receivable amounted to $938,417,000 (Note 4) ($904,887,000 as at September 30, 2020). Given the Company’s available liquid resources as compared to the timing of the payments of liabilities, management assesses the Company’s liquidity risk to be low.

CREDIT RISK

The Company takes on exposure to credit risk, which is the risk that a counterparty will be unable to pay amounts in full when due. Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash and cash equivalents, accounts receivable, work in progress, long-term investments and derivative financial instruments with a positive fair value. The maximum exposure of credit risk is generally represented by the carrying amount of these items reported on the consolidated balance sheets.

The Company is exposed to credit risk in connection with long-term investments through the possible inability of borrowers to meet the terms of their obligations. The Company mitigates this risk by investing primarily in high credit quality corporate and government bonds with a credit rating of A^-^ or higher. The application of the low credit exemption had no material impact on the Company’s consolidated financial statements.

The Company has accounts receivable derived from clients engaged in various industries including government; manufacturing, retail & distribution; financial services; communications & utilities; and health that are not concentrated in any specific geographic area. These specific industries may be affected by economic factors that may impact trade accounts receivable. However, management does not believe that the Company is subject to any significant credit risk in view of the Company’s large and diversified client base and that any single industry or geographic region represents a significant credit risk to the Company. Historically, the Company has not made any significant write-offs and had low bad debt ratios. The application of the simplified approach to measure expected credit losses for trade accounts receivable and work in progress had no material impact on the Company’s consolidated financial statements.

The following table sets forth details of the age of trade accounts receivable that are past due:



Not past due	****
Past due 1-30 days	****
Past due 31-60 days	****
Past due 61-90 days	****
Past due more than 90 days	****
	****
Allowance for doubtful accounts	)	)
	****

All values are in US Dollars.

In addition, the exposure to credit risk of cash and cash equivalents and derivatives financial instruments is limited given that the Company deals mainly with a diverse group of high-grade financial institutions and that derivatives agreements are generally subject to master netting agreements, such as the International Swaps and Derivatives Association, which provide for net settlement of all outstanding contracts with the counterparty in case of an event of default.

134

Notes to the Consolidated Financial Statements

For the years ended September 30, 2021 and 2020

(tabular amounts only are in thousands of Canadian dollars, except per share data)

32.	Capital risk management

The Company is exposed to risks of varying degrees of significance which could affect its ability to achieve its strategic objectives for growth. The main objectives of the Company’s risk management process are to ensure that risks are properly identified and that the capital base is adequate in relation to these risks.

The Company manages its capital to ensure that there are adequate capital resources while maximizing the return to shareholders through the optimization of the debt and equity balance. As at September 30, 2021, total managed capital was $12,884,415,000 ($13,459,695,000 as at September 30, 2020). Managed capital consists of long-term debt, including the current portion (Note 14), lease liabilities, cash and cash equivalents, short-term investments, long-term investments (Note 11) and shareholders’ equity. The basis for the Company’s capital structure is dependent on the Company’s expected business growth and changes in the business environment. When capital needs have been specified, the Company’s management proposes capital transactions for the approval of the Company’s Audit and Risk Management Committee and Board of Directors. The capital risk policy remains unchanged from prior periods.

The Company monitors its capital by reviewing various financial metrics, including the following:

-	Net Debt/Capitalization
-	Debt/Adjusted EBITDA
---	---

Net debt, capitalization and adjusted EBITDA are additional measures. Net debt represents debt (including the current portion and the fair value of foreign currency derivative financial instruments related to debt) and lease liabilities less cash and cash equivalents, short-term investments and long-term investments. Capitalization is shareholders’ equity plus net debt. Adjusted EBITDA is calculated as earnings from continuing operations before finance costs, income taxes, depreciation, amortization, restructuring costs and acquisition-related and integration costs. The Company believes that the results of the current internal ratios are consistent with its capital management credit facility and unsecured committed revolving credit facilities. The ratios are as follows:

-	Leverage ratios, which are the ratio of total debt to adjusted EBITDA for its Senior U.S. unsecured notes and the ratio<br>of total debt net of cash and cash equivalent investments to adjusted EBITDA for its unsecured committed revolving credit facility and unsecured committed term loan credit facility for the four most recent quarters^1^.
-	An interest and rent coverage ratio, which is the ratio of the EBITDAR for the four most recent quarters to the total<br>finance costs and the operating rentals in the same periods. EBITDAR is calculated as adjusted EBITDA before rent expense^1^.
---	---
-	In the case of the Senior U.S. unsecured notes, a minimum net worth is required, whereby shareholders’ equity,<br>excluding foreign exchange translation adjustments included in accumulated other comprehensive income, cannot be less than a specified threshold.
---	---

These ratios are calculated on a consolidated basis.

The Company is in compliance with these covenants and monitors them on an ongoing basis. The ratios are also reviewed quarterly by the Company’s Audit and Risk Management Committee. The Company is not subject to any other externally imposed capital requirements.

^1^	In the event of an acquisition, the available historical financial information of the acquired company will be used in the<br>computation of the ratios.

FISCAL 2021 RESULTS – 135

Shareholder Information

Shareholder Information Listing

IPO: 1986

Toronto Stock Exchange, April 1992: GIB.A

New York Stock Exchange, October 1998: GIB

Number of shares outstanding as of September 30, 2021:

219,171,329 Class A subordinate voting shares

26,445,706 Class B shares

High/Low of share price from October 1, 2020

to September 30, 2021:

	TSX (CDN$)	NYSE (U.S.)
High:	116.88
Low:	80.29

All values are in US Dollars.

The certifications required by National Instrument 52-109 Certification of Disclosure inIssuers’ Annual and Interim Filings whereby CGI’s Chief Executive Officer and Chief Financial Officer certify the accuracy of the information contained in CGI’s Annual Information Form, Annual Audited Consolidated FinancialStatements, and Annual Management’s Discussion and Analysis are available on the Canadian Securities Administrators’ website at www.sedar.com. Similar certifications required byRule 13a-14(a) of the Securities Exchange Act of 1934 and Section 302 of the Sarbanes-Oxley Act of 2002 are attached as exhibits to our Form 40-F,which is available on EDGAR at www.sec.gov. The certification required by Section 303A.12(c) of the NYSE Listed Company Manual is also filed annually with the New York Stock Exchange. CGI’s corporate governance practices conformto those followed by U.S. domestic companies under New York Stock Exchange listing standards. A summary of these practices is provided in the report of the Corporate Governance Committee contained in CGI’s Management ProxyCircular, which is available on the Canadian Securities Administrators’ website at www.sedar.com, on EDGAR at www.sec.gov and on CGI’s website at www.cgi.com.

Auditors

PricewaterhouseCoopers LLP

Transfer Agent and Registrar

Computershare Investor Services Inc.

100 University Avenue, 8^th^ floor

Toronto, Ontario M5J 2Y1

Telephone: 1 800 564-6253

www.investorcentre.com/service

Investor Relations

For further information about the Company, additional copies of this report, or other financial information, please contact:

CGI Inc.

Investor Relations

Email: ir@cgi.com

Web: cgi.com/investors

1350 René-Lévesque Blvd West,

15^th^ floor

Montréal, Quebec H3G 1T4

Canada

Tel.: 514-841-3200

Annual General Meeting of Shareholders

The Annual General Meeting of Shareholders will be held virtually on February 2, 2022 at 11:00 a.m. (Eastern Standard Time) via live webcast at https://www.icastpro.ca/xp8zto (Password: CGI2021). This year, shareholders will not be able to attend the Meeting in person, but will have the opportunity to participate in real time and vote at the Meeting online in the manner set forth in CGI’s Management Proxy Circular, through a web-based platform, regardless of their geographic location.

136

Insights you can act on
Founded in 1976, CGI is among the largest IT and business consulting services firms in the world.
We are insights-driven and outcomes-based to help accelerate returns on your investments. Across hundreds of locations worldwide, we provide<br>comprehensive, scalable and sustainable IT and business consulting services that are informed globally and delivered locally.<br> <br><br><br><br>cgi.com/investors
Contact:<br>ir@cgi.com
© 2021 CGI Inc.

EX-99.2

Exhibit 99.2

LOGO

Notice of Annual General Meeting of Shareholders and Management Proxy Circular To be held virtually on Wednesday, February 2, 2022 at 11:00 a.m. (Eastern Standard Time) These materials are being sent to both registered and non-registered owners of shares. Non-registered shareholders are either objecting beneficial owners who object that intermediaries disclose information about their ownership in the Company, or non-objecting beneficial owners, who do not object to such disclosure. The Company pays intermediaries to send proxy-related materials to both objecting and non-objecting beneficial owners. Please return your voting instructions as specified in the request for voting instructions. CGI

LOGO

Table of Contents

NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDERS	i
LETTER TO SHAREHOLDERS	ii
GENERAL INFORMATION	1
ATTENDING THE VIRTUAL MEETING	1
SUBMITTING QUESTIONS	1
NOTICE AND ACCESS	1
PROXIES	2
Solicitation of Proxies	2
Appointment and Revocation of Proxies	3
HOW TO VOTE	3
Registered Shareholders	3
Non-Registered Shareholders	3
Voting in Advance of the Meeting	4
By Internet	4
By Phone	4
By Mail	4
Voting at the Meeting	5
Changing your Vote	5
VOTING SHARES AND PRINCIPAL HOLDERS OF VOTING SHARES	5
Class A Subordinate Voting Shares and Class B Shares	6
Voting Rights	6
Subdivision or Consolidation	6
Rights upon Liquidation	6
Conversion Rights of Class A Subordinate Voting Shares in Specific Circumstances	6
Conversion of Class B Shares	6
Issue of Class B Shares	6
Dividends	7
Amendments	7
Rank	7
First Preferred Shares	7
Second Preferred Shares	7
Normal Course Issuer Bid	7
Principal Holders of Class A Subordinate Voting Shares and Class B Shares	8
BUSINESS TO BE TRANSACTED AT THE MEETING	10
NOMINEES FOR ELECTION AS DIRECTORS	11
REPORT OF THE HUMAN RESOURCES COMMITTEE	21
EXECUTIVE COMPENSATION DISCUSSION AND ANALYSIS	21
Executive Compensation Process for the 2021 Fiscal Year	21
The Human Resources Committee of the Board of Directors	21
Executive Compensation Related Fees	23
Composition of Comparator Groups	23
Executive Compensation Components	24
Base Salary	25
Short-Term Incentive Plan – Profit Participation Plan	25
Performance Factors	26
Long-Term Incentive Plans	27
Share Option Plan	27
Performance Share Unit Plans	28
Award Date Fair Value	28
Performance Factors and Vesting Conditions	28
Long Term Incentive Plan Awards in Fiscal 2021	29
2021 MANAGEMENT PROXY CIRCULAR
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Total At Risk Compensation and Actual Payouts	30
Incentive Plan Awards – Value Vested or Earned During the Year	31
Performance Graph	32
Defined Contribution Pension Plan and Deferred Compensation Plan	33
Defined Contribution Pension Plan	33
Deferred Compensation Plan	33
Compensation of Named Executive Officers	34
Summary Compensation Table	34
KEY FEATURES OF CGI’S LONG-TERM INCENTIVE PLANS	35
Share Option Plan	35
Blackout Periods	36
Extensions for Length of Service	36
Amendments to Share Option Plan	37
Equity Compensation Plan Information as at September 30, 2021	37
Performance Share Unit Plans	38
Blackout Periods	38
Termination Benefits	38
COMPENSATION OF DIRECTORS	38
Board of Directors and Standing Committee Fees	38
Directors’ Compensation Table	39
Deferred Stock Units Plan and Deferred Stock Units Granted to Directors	40
Stock Options Held by Directors	40
Incentive Plan Awards – Value Vested or Earned During the Year	41
Additional Disclosure relating to Directors and Named Executive Officers	41
REPORT OF THE CORPORATE GOVERNANCE COMMITTEE	42
CORPORATE GOVERNANCE PRACTICES	42
CGI’s Shareholders	42
Shareholder Satisfaction Assessment Program	43
Corporate Social Responsibility	43
Diversity	45
Majority Voting Policy	45
Clawback Policy	46
Insider Trading and Blackout Periods Policy	46
MANDATE, STRUCTURE AND COMPOSITION OF THE BOARD OF DIRECTORS	46
Board of Directors and Committee Charters	47
ROLE AND RESPONSIBILITIES OF THE FOUNDER AND EXECUTIVE CHAIRMAN OF THE BOARD AND OF THE PRESIDENT AND CHIEF EXECUTIVE OFFICER	47
ROLE AND RESPONSIBILITIES OF THE LEAD DIRECTOR AND STANDING COMMITTEECHAIRS	48
Lead Director	48
Standing Committee Chairs	48
CRITERIA FOR TENURE ON CGI’S BOARD OF DIRECTORS	49
Independence	49
Expertise and Financial and Operational Literacy	49
Attendance at Board and Standing Committee Meetings	52
Share Ownership Guideline for Directors	53
Availability and Workload	54
Conflicts of Interest	54
Director Orientation and Continuing Education Program	55
New Director Orientation	55
Continuing Education Program	55
2021 Continuing Education Presentations	55
Self-Assessment and Peer Review Processes	55
Retirement Age and Director Term Limits	56
NOMINATION PROCESS FOR THE BOARD OF DIRECTORS AND EXECUTIVEOFFICERS	56
Board of Directors	56
Succession Planning for Executive Officers	57
2021 MANAGEMENT PROXY CIRCULAR
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BOARD OF DIRECTORS PARTICIPATION IN STRATEGIC PLANNING	57
GUIDELINES ON TIMELY DISCLOSURE OF MATERIAL INFORMATION	57
CODES OF ETHICS	58
REPORT OF THE AUDIT AND RISK MANAGEMENT COMMITTEE	60
EXTERNAL AUDITOR	60
AUDITOR INDEPENDENCE POLICY	60
PERFORMANCE OF SERVICES	60
GOVERNANCE PROCEDURES	61
MANAGEMENT AND COMMITTEE RESPONSIBILITIES	61
ANNUAL EXTERNAL AUDITOR ASSESSMENT	61
FEES BILLED BY THE EXTERNAL AUDITOR	62
RELATED PARTY TRANSACTIONS	62
OTHER BUSINESS TO BE TRANSACTED AT THE ANNUAL GENERAL MEETING OF SHAREHOLDERS	62
ADDITIONAL INFORMATION	63
SHAREHOLDER PROPOSALS	63
APPENDIX A	64
STOCK OPTIONS AND SHARE-BASED AWARDS HELD BY NAMED EXECUTIVEOFFICERS	64
APPENDIX B	66
STOCK OPTIONS AND SHARE-BASED AWARDS HELD BY DIRECTORS	66
APPENDIX C	71
SHAREHOLDER PROPOSALS	71
2021 MANAGEMENT PROXY CIRCULAR
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Notice of Annual General Meeting of Shareholders

Date, Time and Place

Notice is hereby given that an Annual General Meeting of Shareholders (the “Meeting”) of CGI Inc. (“CGI” or the “Company”) will be held virtually on February 2, 2022, at 11:00 a.m. (Eastern Standard Time) via live webcast at https://www.icastpro.ca/xp8zto. Shareholders will not be able to attend the Meeting in person, but will have the opportunity to participate in real time and vote at the Meeting virtually in the manner set forth in CGI’s Management Proxy Circular, through a web-based platform, regardless of their geographic location.

Business to be Transacted at the Meeting

1.	To receive the report of the directors, together with the Annual Audited Consolidated Financial Statements of the<br>Company and the report of the auditor for the fiscal year ended September 30, 2021;
2.	to elect directors;
---	---
3.	to appoint the auditor for the fiscal year of the Company ending September 30, 2022 and authorize the Audit and<br>Risk Management Committee to fix its compensation;
---	---
4.	to consider Shareholder Proposal Number One and Shareholder Proposal Number Two attached as<br>Appendix C; and
---	---
5.	to transact such other business as may properly come before the Meeting or any adjournment thereof.<br>
---	---

Attendance and Voting by Shareholders at the Meeting

By logging on to https://www.icastpro.ca/xp8zto and following the instructions set forth in the Management Proxy Circular, shareholders will be able to attend the Meeting live, submit questions and vote their shares while the Meeting is being held.

Only shareholders shown on the register of shareholders of CGI at the close of business on December 7, 2021, and duly appointed proxyholders (including non-registered shareholders who have duly appointed themselves as proxyholders), will be entitled to vote at the Meeting during the live webcast. CGI’s register of shareholders is kept by its transfer agent, Computershare Investor Services Inc.

Registered and non-registered shareholders entitled to vote at the Meeting may vote by proxy in advance of the Meeting. Non-registered shareholders who have not duly appointed themselves as proxyholders will be able to attend the Meeting and ask questions, but will not be able to vote. Guests will be able to attend the Meeting but will not be able to submit questions or vote their shares (if any).

Proxy Voting

Proxies submitted by mail, phone or internet must be received by Computershare Investor Services Inc. by 11:00 a.m., Eastern Standard Time, on Tuesday, February 1, 2022.

We wish to have as many shares as possible represented and voted atthe Meeting. For this reason, and regardless of whether you are able to attend the Meeting via the live webcast, shareholders are strongly encouraged to complete, date, sign and return the accompanying form of proxy or voting instruction form, asapplicable, in accordance with the instructions set out on such form and in the Management Proxy Circular or, alternatively, vote by phone or vote using the internet. Instructions on how to vote by phone or by using the internet are provided on theform of proxy or voting instruction form and in the Management Proxy Circular.

CGI has opted to use the Notice and Access rules adopted by Canadian securities regulators to reduce the volume of paper in the materials distributed for the Meeting. Instead of receiving the enclosed Management Proxy Circular with the form of proxy or voting instruction form, shareholders received a Notice of Meeting with instructions on how to access the remaining Meeting materials online.CGI’s Management Proxy Circular and other relevant materials are available on the internet at www.envisionreports.com/gib2021 or on the Canadian Securities Administrators’ website at www.sedar.com. The webcast will be temporarily archived on the Company’s website afterwards.

If you are a registered shareholder or a non-objecting beneficial owner and have any questions regarding this Notice of Meeting, the Notice and Access procedures or the Meeting, please contact Computershare Investor Services Inc. at +1-866-962-0498 (Canada and U.S.) or +1-514-982-8716 (international). If you are an objecting beneficial owner, please contact Broadridge Investor Communication Corporation toll free at +1-855-887-2244 (Canada and U.S.), or at +1-303-562-9306 (international, in French) or at +1-303-562-9305 (international, in English).

Montréal, Quebec

Dated December 7, 2021

By order of the Board of Directors,

LOGO

Benoit Dubé

Executive Vice-President, Legal and Economic Affairs,

and Corporate Secretary

i	2021 MANAGEMENT PROXY CIRCULAR

LOGO

Letter to Shareholders

Dear fellow shareholders,

Last year, we shared how your Company is built to grow and last. Our strong culture, diverse presence across industry sectors and regions, and end-to-end consulting services provided strong results, with year-over-year constant currency revenue growth, increased profitability and industry leading earnings per share growth. We are pleased to have achieved our goal of emerging from this phase of the current pandemic in a stronger position.

During 2021, as part of our annual planning process, we spoke with 1,695 business and IT client executives across the industries and geographies we serve. These strategic conversations provide a unique view into how priorities evolved rapidly due to the pandemic, including progress in producing expected results from digital strategies. From this proprietary research, we examined the characteristics of leading digital organizations. As technology becomes further embedded across the entirety of their business value chains, these leaders are taking a holistic approach to their transformation.

CGI is best positioned to help all clients become digital leaders. Our industry and technology expertise combined with operational excellence provides the scale, reach and capabilities required to help clients drive forward their digital value chains. Clients recognize our commitment. This year, we received record-level client satisfaction scores, from their degree of loyalty to our industry knowledge, level of technology expertise, and the innovation we bring.

As a people-centered firm, we know our success is founded upon the strength of our consultants and professionals, whom we call members as 85% of them are CGI shareholders. Our members’ satisfaction scores reached record levels this year as we increased investment in areas such as learning and development, digital tooling, and health and wellbeing. We pay tribute to our talented and dedicated experts around the world who demonstrate a steadfast commitment to bringing the best of CGI to our clients each day.

As many businesses work to evolve their corporate culture, we, at CGI, have always sought to achieve the best equilibrium among our three stakeholders – clients, members and shareholders – while serving as a caring and responsible corporate citizen. In June, we celebrated our 45^th^ anniversary, a key testament of our ability to continuously provide value to all of our stakeholders.

Looking ahead, technology clearly continues to be core to our clients’ strategic goals as they increase their digitalization efforts. As one of the few firms with the scale, reach, capabilities and commitment to be a partner of choice for clients, both locally and globally, we are very optimistic about our outlook as we continue to pursue our successful Build & Buy strategy, while maintaining our focus on incremental shareholder value creation.

This year, Timothy Hearn announced he will not present himself for re-election as a CGI director. On behalf of our members and Board of Directors, we thank him warmly for his invaluable advice, counsel and leadership throughout the years, as well as for his remarkable contribution to our success. We also welcome Frank Witter who joined CGI’s Board of Directors in July 2021 and is nominated for election as a director for the first time. With his broad experience and expertise, Mr. Witter will provide key insight as we continue to pursue our strategic objectives.

We thank you for your investment, confidence and trust.

Serge Godin<br> <br>Founder and Executive<br><br><br>Chairman of the Board	Julie Godin<br> <br>Co-Chair<br>of the Board, Executive Vice-President, Strategic Planning and Corporate Development	George D. Schindler<br> <br>President and Chief Executive<br>Officer
2021 MANAGEMENT PROXY CIRCULAR	ii
---	---

LOGO

General Information

This Management Proxy Circular is provided in relation to the solicitation of proxies by the management of CGI Inc. (“CGI” or the “Company”) for use at the Annual General Meeting of Shareholders (the “Meeting”) of the Company which will be held virtually, via live webcast, on February 2, 2022, and at any adjournment thereof. Unless otherwise indicated, the information provided in this Management Proxy Circular that relates to financial information is provided as at September 30, 2021, all other information is provided as at December 7, 2021, and all currency amounts are shown in Canadian dollars.

We encourage you to read our annual Management’s Discussion and Analysis, Annual Audited Consolidated Financial Statements, and this Management Proxy Circular to become better acquainted with CGI. We are confident that, as you come to know us, you will appreciate the strength of our commitment to our three stakeholders, including you, our shareholders.

Attending the Virtual Meeting

To attend the Meeting, registered and non-registered shareholders will need to login on to https://www.icastpro.ca/xp8zto and follow the instructions set forth in this Management Proxy Circular. The Meeting platform is fully supported across browsers and devices running the most updated version of applicable software plugins. You should ensure you have a strong, preferably high-speed, internet connection wherever you intend to attend the Meeting. The Meeting will begin at 11:00 a.m. (Eastern Standard Time) on February 2, 2022. You should allow ample time to check into the Meeting online and complete the related procedure. It is recommended that you login at least fifteen minutes prior to the Meeting. Attending the Meeting virtually enables shareholders to ask questions in real time. Registered shareholders and duly appointed proxyholders (including non-registered shareholders who have duly appointed themselves as proxyholder) can vote at the appropriate times during the Meeting. If you are a non-registered shareholder located in the United States and wish to attend, submit questions or vote at the Meeting, see the heading How to Vote – Non-Registered Shareholders later in this document for additional instructions. Shareholders and duly appointed proxyholders who participate in the Meeting virtually, must be connected to the internet at all times during the Meeting in order to vote when balloting commences and it is their responsibility to ensure connectivity during the Meeting.

Non-registered beneficial shareholders who have not duly appointed themselves as proxyholders can attend the Meeting and ask questions by joining the webcast at https://www.icastpro.ca/xp8zto, but are not able to vote. Guests will be able to attend the Meeting but will not be able to submit questions nor vote their shares (if any).

Submitting Questions

At the Meeting, the Company will hold a live Q&A session to answer written questions submitted either before the Meeting through https://www.icastpro.ca/xp8zto (using the control number and password (CGI2021) included on the form of proxy or voting instruction form, as applicable) or during the Meeting by shareholders participating via live webcast. Only shareholders and duly appointed proxyholders may submit questions at the Meeting, either before or during the Meeting.

The Chair of the Meeting reserves the right to edit questions or to reject questions he deems inappropriate in accordance with the rules of conduct of the Meeting, which are available at www.cgi.com/en/investors and on the Meeting web page at https://www.icastpro.ca/xp8zto. Any questions pertinent to the Meeting that cannot be answered during the Meeting due to time constraints will be posted online and answered at www.cgi.com/en/investors. The questions and answers will be available as soon as practical after the Meeting and will remain available until one week after posting. The Chair of the Meeting has broad authority in all matters pertaining to the Meeting. To ensure that the Meeting is conducted in a timely manner, the Chair of the Meeting may exercise broad discretion with respect to, for example and without limitation, the questions and topics that will be addressed at the Meeting and the amount of time devoted to any question or topic.

Notice and Access

CGI uses the Notice and Access rules adopted by Canadian securities regulators to reduce the volume of paper in the materials distributed for the Annual General Meeting of Shareholders. Instead of receiving this Management Proxy Circular with the form of proxy or voting instruction form, shareholders received a Notice of Meeting with instructions on how to access the remaining materials online. CGI intends to pay for intermediaries to deliver the Notice of Meeting and voting instruction form and other materials to non-objecting beneficial owners and objecting beneficial owners.

2021 MANAGEMENT PROXY CIRCULAR	1

General Information

LOGO

This Management Proxy Circular and other relevant materials are available on the internet at www.envisionreports.com/gib2021 or on the Canadian Securities Administrators’ website at www.sedar.com. If you would like to receive a paper copy of the materials distributed for the Annual General Meeting of Shareholders by mail, you must request it. Requesting a paper copy is free of charge. Registered shareholders and non-objecting beneficial owners may request a paper copy of the materials by calling Computershare Investor Services Inc. (“Computershare”) toll free at +1-866-962-0498 (Canada and U.S.) or +1-514-982-8716 (international) and entering the control number indicated on the form of proxy or voting instruction form they received with the Notice of Meeting. Objecting beneficial owners may request a paper copy of the materials by calling Broadridge Investor Communication Corporation toll free at +1-877-907-7643 (Canada and U.S.) or at +1-303-562-9306 (international, in French) or +1-303-562-9305 (international, in English) and entering the control number indicated on the voting instruction form they received with the Notice of Meeting.

To ensure you receive the materials in advance of the voting deadline and Meeting date, all requests must be received no later than January 19, 2022. If you do request a paper copy of the current materials, please note that another voting instruction form or proxy form will not be sent; please retain the one received with the Notice of Meeting for voting purposes.

To obtain a paper copy of the materials after the Meeting date, please contact CGI’s Investor Relations department by sending an e-mail to ir@cgi.com, by visiting the Investors section on the Company’s website at www.cgi.com or as follows:

Investor Relations

CGI Inc.

1350 René-Lévesque Boulevard West

15th Floor

Montréal, Quebec

Canada

H3G 1T4

Tel.: +1-514-841-3200

Proxies

Solicitation of Proxies

The solicitation of proxies will be made primarily by mail for registered and non-registered beneficial shareholders and by e-mail for participants in CGI’s Share Purchase Plan. Proxies may also be solicited personally by e-mail or by phone by members of the Company at minimal cost. The Company does not expect to pay any compensation for the solicitation of proxies, but will reimburse brokers and other persons holding shares for reasonable expenses for sending proxy materials to non-registered beneficial shareholders in order to obtain voting instructions.

The persons who may be appointed to act under the form of proxy or voting instruction form solicited by the management of the Company are all directors of the Company.

In order to be voted at the Meeting, a proxy must be received by Computershare by 11:00 a.m., Eastern Standard Time, on Tuesday, February 1, 2022. Proxies may also be received by the Corporate Secretary of the Company prior to the Meeting or any adjournment thereof at 1350 René-Lévesque Boulevard West, 25^th^ Floor, Montréal, Quebec, Canada, H3G 1T4 Attention: Corporate Secretary, at any time up to and including February 1, 2022, the last business day preceding the date of the Meeting.

The persons whose names are printed on the form of proxy or voting instruction form will vote all the shares in respect of which they are appointed to act in accordance with the instructions given on the form of proxy or voting instruction form. In theabsence of a specified choice in relation to any matter to be voted on at the Meeting, or if more than one choice is indicated, the shares represented by the form of proxy or the voting instruction form will be voted:

FOR the election as directors of the sixteen persons nominated in this Management Proxy Circular;

FOR the appointment of PricewaterhouseCoopers LLP as auditor; and

AGAINST Shareholder Proposal Number One and Shareholder Proposal Number Two attached as Appendix C.

Every proxy given to any person in the form of proxy or voting instruction form that accompanies the Notice of Meeting will confer discretionary authority with respect to amendments or variations to the items of business identified in the Notice of Meeting and with respect to any other matters that may properly come before the Meeting.

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Appointment and Revocation ofProxies

Every shareholder has the right to appoint himself or herself or any person to act on his or her behalf at the Meeting other than thepersons whose names are printed in the form of proxy or voting instruction form that accompanies the Notice of Meeting. To exercise this right, the shareholder should insert a proxyholder’s name in the space provided for that purpose in theform of proxy or voting instruction form, or provide a revised proxy in proper form appointing the proxyholder. Non-registered shareholders located in the United States must follow the instructions under theheading How to Vote – Non-Registered Shareholders later in this document.

In addition to the first step above, shareholders who wish to appoint a proxyholder (including shareholders who wish to appoint themselves asproxyholder) must visit https://www.computershare.com/CGI2021 and provide the required proxyholder contact information so that Computershare may provide the proxyholder with a four-lettercode via email. Without the four-letter code, proxyholders will not be able to vote at the Meeting. Failure to register a proxyholder online will result in the proxyholder not being able to vote at the Meeting.

The steps described above must be completed prior to 11:00 a.m., Eastern Standard Time, on Tuesday, February 1, 2022, failing which aproxyholder will not be able to vote at the Meeting on the appointing shareholder’s behalf.

A proxy may be revoked at any time by the person giving it to the extent that it has not yet been exercised. If you are a registered shareholder and you want to revoke your proxy, you may do so by providing a new proxy form to Computershare at any time before by 11:00 a.m., Eastern Standard Time, on Tuesday, February 1, 2022. A proxy may also be revoked by a registered shareholder by delivering a written notice to the Corporate Secretary of the Company at 1350 René-Lévesque Boulevard West, 25th Floor, Montréal, Quebec, Canada, H3G 1T4 Attention: Corporate Secretary, which must be received at any time up to and including February 1, 2022, the business day preceding the date of the Meeting. A registered shareholder may also access the Meeting via the live webcast to vote at the Meeting, which will revoke any previously submitted proxy. If you do not wish to revoke a previously submitted proxy nor ask questions at the Meeting, you can attend the Meeting as a guest, as guests can listen to the Meeting, but are not able to vote nor to submit questions.

If you are a non-registered shareholder and you want to revoke your proxy, contact your broker or other intermediary to find out what to do. Please note that your intermediary will need to receive any new instructions sufficiently in advance of the Meeting to act on them.

How to Vote

Only persons shown on the register of shareholders at the close of business on Tuesday, December 7, 2021 and duly appointed proxyholders (including non-registered shareholders who have duly appointed themselves as proxyholders), will be entitled to vote at the Meeting. The register of holders of Class A subordinate voting shares and Class B shares are kept by CGI’s transfer agent, Computershare.

Registered Shareholders

You are a registered shareholder if your name appears on your share certificate or your direct registration statement. Your proxy form tells you whether you are a registered shareholder. If you are a registered shareholder, you will receive a form of proxy containing the relevant details concerning the business of the Meeting, including a control number and password (CGI2021) that must be used in order to vote by proxy in advance of the Meeting or to join the live webcast the day of the Meeting to attend, ask questions and vote at the Meeting, as applicable.

Non-Registered Shareholders

Non-registered shareholders or “beneficial owners” are holders whose shares are held on their behalf through a “nominee” such as a bank, a trust company, a securities broker or other financial institution. When you receive a voting instruction form, this tells you that you are a non-registered shareholder. Most CGI shareholders hold their shares in this way. Non-registered shareholders must seek instructions from their nominees as to how to complete their voting instruction form if they wish to vote their shares themselves at the Meeting. Non-registered shareholders who received or who were given access to this Management Proxy Circular in a mailing from their nominee must adhere to the voting instructions provided to them by their nominee.

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Non-registered shareholders must use the control number and password (CGI2021) on their voting instruction form to join the live webcast of the Meeting. Non-registered shareholders who wish to vote at the Meeting during the live webcast must appoint themselves by inserting their own name in the space provided on the voting instruction form and adhere to the signing and return instructions provided by their nominee. By doing so, non-registered shareholders are instructing their nominee to appoint them as proxyholder. Inaddition to the first step above, non-registered shareholders who wish to appoint a proxyholder (including non-registered shareholders who wish to appoint themselves asproxyholder) must visit https://www.computershare.com/CGI2021 and provide the required proxyholder contact information so that Computershare may provide the proxyholder witha four-letter code via email. Without the four-letter code, proxyholders will not be able to vote at the Meeting.

The steps describedabove must be completed prior to 11:00 a.m., Eastern Standard Time, on Tuesday, February 1, 2022, failing which a proxyholder will not be able to vote at the Meeting on the appointing shareholder’s behalf.

If you are a non-registered shareholder located in the United States and wish to attend, submit questions or vote at the Meeting or, if permitted, appoint a third party as your proxyholder, in addition to the steps described above and under the heading Attending the Virtual Meeting, you must obtain a valid legal proxy form from your intermediary. Follow the instructions from your intermediary included with the legal proxy form and the voting instruction form sent to you, or contact your intermediary to request a legal proxy form if you have not received one. The legal proxy form will be mailed to the person and address written on the voting instruction form. After obtaining a valid legal proxy form from your intermediary, you must then submit such legal proxy form to Computershare. Requests for registration from non-registered shareholders located in the United States that wish to attend, submit questions or vote at the Meeting or, if permitted, appoint a third party as their proxyholder must be sent by fax to +1-866-249-7775 or +1-416-263-9524, or, by courier to Computershare Investor Services Inc. at 100 University Ave, 8^th^ Floor, North Tower, Toronto, Ontario, Canada, M5J 2Y1, and in both cases, must be labeled as “legal proxy” and received by no later than 11:00 a.m., Eastern Standard Time, on Tuesday, February 1, 2022. You must allow sufficient time to Computershare for the mailing and return ofthe legal proxy form by this deadline. If you have any questions, please contact the person who services your account.

Non-registered shareholders who have not duly appointed themselves as proxyholders will be able to attend the Meeting and ask questions, but will not be entitled to vote their shares at the Meeting.

Voting in Advance of the Meeting

Shareholders are strongly encouraged to vote in advance of the Meeting whether or not they are able to attend the Meeting (or any adjournment thereof) via the live webcast. Below are the different ways in which registered and non-registered shareholders can give voting instructions, details of which are found on the form of proxy or voting instruction form provided, as applicable.

By Internet

If a shareholder elects to vote using the internet, the shareholder must access the following website: www.investorvote.com. Shareholders must follow the instructions that appear on the screen and refer to the form of proxy or voting instruction form, as applicable, for their control number and password (CGI2021).

By Phone

If a shareholder wishes to vote by phone, the shareholder must call the following toll-free number +1-866-732-8683 (within North America) or +1-312-588-4290 (outside of North America). Shareholders must follow the instructions of the voice response system and refer to the form of proxy or voting instruction form, as applicable, for their control number.

By Mail

If a shareholder wishes to vote by mail, the shareholder must complete, date and sign the form of proxy or voting instruction form, as applicable, in accordance with the instructions set out on such form, and return it in the prepaid envelope provided to Computershare, Proxy Department, PO Box 300 RPO West Beaver Creek, Richmond Hill, Ontario, Canada, L4B 9Z9.

Duly completed forms of proxy or voting instruction forms or internet or telephone voting instructions, as applicable, must be received by Computershare by 11:00 a.m., Eastern Standard Time, on Tuesday, February 1, 2022. Proxies may also

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be received by the Corporate Secretary of the Company prior to the Meeting or any adjournment thereof at 1350 René-Lévesque Boulevard West, 25^th^ Floor, Montréal, Quebec, Canada, H3G 1T4 Attention: Corporate Secretary, at any time up to and including Tuesday, February 1, 2022, the last business day preceding the date of the Meeting.

Voting at the Meeting

Registered shareholders who wish to vote at the Meeting do not need to complete or return their proxy form. Non-registered shareholders who wish to vote at the Meeting must appoint themselves as proxyholder. The day of the Meeting, registered shareholders and non-registered shareholders who have duly appointed themselves as proxyholders, will be able to vote via the live webcast by completing a ballot online during the Meeting by visiting https://www.icastpro.ca/xp8zto and logging in using the control number and password (CGI2021) included on their proxy form, in the case of registered shareholders, or entering the four-letter code provided by Computershare via email and password (CGI2021), in the case of the proxyholder of non-registered shareholders, as applicable, as further described under the heading Attending the Virtual Meeting.

Non-registered shareholders who have not duly appointed themselves as proxyholder will be able to attend the Meeting, but will not be able to vote their shares at the Meeting.

Even if you currently plan to attend and vote at the Meeting, you should consider voting your shares in advance so that your vote will be counted if you later decide not to attend the Meeting. **You should note however that if you access and vote on any matter during the Meeting, you will revoke any previously submitted proxy.**If you do not wish revoke a previously submitted proxy nor ask questions at the Meeting, you can attend the Meeting as a guest, as guests can listen to the Meeting, but are not able to vote nor to submit questions.

If you wish to appoint someone as proxy to vote your shares for you at the Meeting during the live webcast, please follow the instructions found on either your proxy form or voting instruction form, as applicable. You will need to register your proxyholder (including registering yourself if you wish to appoint yourself as proxyholder) online at https://www.computershare.com/CGI2021 so that Computershare will provide a four-letter code to your proxyholder, which will allow your proxyholder to join the Meeting and vote your shares on your behalf, as further described under the heading Appointment and Revocation of Proxies.

Changing your Vote

If you are a registered shareholder and you change your mind about how you voted before the Meeting, you may provide new voting instructions at www.investorvote.com, or a new form of proxy to Computershare at any time before by 11:00 a.m., Eastern Standard Time, on Tuesday, February 1, 2022. A proxy may also be revoked by delivering a written notice to the registered office of the Company at 1350 René-Lévesque Boulevard West, 25^th^ Floor, Montréal, Quebec, Canada, H3G 1T4 Attention: Corporate Secretary, which must be received prior to or on February 1, 2022, the last business day preceding the date of the Meeting, or any adjournment thereof. A registered shareholder may also access the Meeting via the live webcast to vote at the Meeting, which will revoke any previously submitted proxy. If you do not wish revoke a previously submitted proxy, you should attend the Meeting as a guest. Guests can listen to the Meeting, but are not able to vote nor to submit questions.

If you are a non-registered shareholder and you change your mind about how you voted before the Meeting, contact your broker or other intermediary to find out what to do. Please note that your intermediary will need to receive any new instructions sufficiently in advance of the Meeting to act on them.

Voting Shares and Principal Holders of Voting Shares

The Company’s authorized share capital consists of an unlimited number of First Preferred Shares, issuable in series, an unlimited number of Second Preferred Shares, issuable in series, an unlimited number of Class A subordinate voting shares and an unlimited number of Class B shares (multiple voting), all without par value, of which, as at December 7, 2021, 217,078,355 Class A subordinate voting shares and 26,445,706 Class B shares were issued and outstanding.

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The following summary of the material features of the Company’s authorized share capital is given subject to the detailed provisions of its articles.

Class A SubordinateVoting Shares and Class B Shares

Voting Rights

The holders of Class A subordinate voting shares are entitled to one vote per share and the holders of Class B shares are entitled to ten votes per share. As at December 7, 2021, 45.08% and 54.92% of the aggregate voting rights were attached to the outstanding Class A subordinate voting shares and Class B shares, respectively.

Subdivision or Consolidation

The Class A subordinate voting shares or Class B shares may not be subdivided or consolidated unless simultaneously the Class B shares and the Class A subordinate voting shares are subdivided or consolidated in the same manner and in such an event, the rights, privileges, restrictions and conditions then attaching to the Class A subordinate voting shares and Class B shares shall also attach to the Class A subordinate voting shares and Class B shares as subdivided or consolidated.

Rights upon Liquidation

Upon liquidation or dissolution of the Company or any other distribution of its assets among its shareholders for the purposes of winding up its affairs, all the assets of the Company available for payment or distribution to the holders of Class A subordinate voting shares and holders of Class B shares will be paid or distributed equally, share for share.

Conversion Rights of Class A Subordinate Voting Shares in Specific Circumstances

Subject to what is hereinafter set out, if a take-over bid or exchange bid or an issuer bid, other than an exempt bid (as defined in the articles of the Company), for the Class B shares is made to the holders of Class B shares without being made simultaneously and on the same terms and conditions to the holders of Class A subordinate voting shares, each Class A subordinate voting share shall become convertible into one Class B share, from the date the offer is made, at the holder’s option, in order to entitle the holder to accept the offer. However, this right of conversion shall be deemed not to come into effect if the offer is not completed by its offeror or if the offer is rejected by one or several of the senior executives and full-time employees of the Company or its subsidiaries and any corporate entity under their control, who are, as a group, owners, directly or indirectly, in any manner whatsoever, of more than 50% of the outstanding Class B shares.

The articles of the Company contain a complete description of the types of bids giving rise to the rights of conversion, provide certain procedures to be followed to perform the conversion and stipulate that upon such a bid, the Company or the transfer agent will communicate in writing to the holders of Class A subordinate voting shares full details as to the bid and the manner of exercising the right of conversion.

Conversion ofClass B Shares

Each Class B share may, from time to time, at the holder’s option, be converted into one Class A subordinate voting share.

Issue of Class B Shares

The Company’s articles provide for pre-emptive rights in favour of holders of Class B shares. Therefore, the Company may not issue Class A subordinate voting shares or securities convertible into Class A subordinate voting shares without offering, in the manner determined by the Board of Directors, to each holder of Class B shares, pro rata to the number of Class B shares it holds, the right to subscribe concurrently with the issue of Class A subordinate voting shares or of securities convertible into Class A subordinate voting shares, as the case may be, an aggregate number of Class B shares or securities convertible into Class B shares, as the case may be, sufficient to fully maintain its proportion of voting rights associated with the Class B shares. The consideration to be paid for the issuance of each Class B share or security convertible into Class B shares, as the case may be, shall be equal to the issue price of each Class A subordinate voting share or security convertible into Class A subordinate voting shares then issued.

The pre-emptive rights do not apply in the case of the issuance of Class A subordinate voting shares or securities convertible into Class A subordinate voting shares:

•	in payment of stock dividends;
•	pursuant to the stock option plans or share purchase plans of the Company;
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•	further to the conversion of Class B shares into Class A subordinate voting shares pursuant to the articles of<br>the Company; or
•	further to the exercise of the conversion, exchange or acquisition rights attached to securities convertible into<br>Class A subordinate voting shares.
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Any holder of Class B shares may assign its pre-emptive rights to other holders of Class B shares.

Dividends

The Class A subordinate voting shares and Class B shares participate equally, share for share, in any dividend which may be declared, paid or set aside for payment thereon. In fiscal 2021, considering, among other matters, the needs for reinvestment in the Company’s operations, the scope of investment projects, the repayment of the Company’s debt, and the repurchase of outstanding Class A subordinate voting shares under the Company’s Normal Course Issuer Bid (“NCIB”), the Board of Directors determined that the Company, in keeping with its long-standing practice, would not pay a dividend. The Board of Directors re-evaluates the Company’s dividend policy annually.

Amendments

The rights, privileges, conditions and restrictions attaching to the Class A subordinate voting shares or Class B shares may respectively be amended if the amendment is authorized by at least two-thirds of the votes cast at a meeting of holders of Class A subordinate voting shares and Class B shares duly convened for that purpose. However, if the holders of Class A subordinate voting shares as a class or the holders of Class B shares as a class were to be affected in a manner different from that of the other classes of shares, such amendment would, in addition, have to be authorized by at least two-thirds of the votes cast at a meeting of holders of shares of the class of shares so affected in a different manner.

Rank

Except as otherwise provided hereinabove, each Class A subordinate voting share and each Class B share carry the same rights, rank equally in all respects and are to be treated by the Company as if they constituted shares of a single class.

First Preferred Shares

The First Preferred Shares may be issued from time to time in one or more series and the Board of Directors of the Company has the right to determine, by resolution, the designation, rights, privileges, restrictions and conditions attaching to each series. The First Preferred Shares of each series rank equal to the First Preferred Shares of all other series and rank prior to the Second Preferred Shares, the Class A subordinate voting shares and Class B shares with respect to payment of dividends and repayment of capital. The holders of First Preferred Shares are entitled to receive notice of and attend any shareholders’ meetings and are entitled to one vote per share. As at December 7, 2021, no First Preferred Shares were outstanding.

Second Preferred Shares

The Second Preferred Shares may be issued from time to time in one or more series and the Board of Directors has the right to determine, by resolution, the designation, rights, privileges, restrictions and conditions attaching to each series. The Second Preferred Shares of each series rank equal to all other Second Preferred Shares of all other series and rank after the First Preferred Shares, but prior to the Class A subordinate voting shares and Class B shares with respect to payment of dividends and repayment of capital. The Second Preferred Shares are non-voting. As at December 7, 2021, no Second Preferred Shares were outstanding.

Normal Course Issuer Bid

On January 26, 2021, the Board of Directors authorized and subsequently received the approval from the Toronto Stock Exchange (“TSX”) for the renewal of its NCIB and the purchase for cancellation of up to 10% of the public float of the Company’s Class A subordinate voting shares as at January 22, 2021. The current NCIB enables the Company to purchase on the open market through the facilities of the TSX and the New York Stock Exchange (“NYSE”) and through alternative trading systems, as well as outside the facilities of the TSX by private agreements pursuant to exemption orders issued by securities regulators, up to 19,184,831 Class A subordinate voting shares for cancellation. As at January 22, 2021, there were 224,831,125 Class A subordinate voting shares of the Company outstanding of which approximately 85% were widely held. The Company was authorized to purchase Class A subordinate voting shares under

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the current NCIB commencing on February 6, 2021 and may continue to do so until February 5, 2022, or until such earlier date when the Company will either have acquired the maximum number of Class A subordinate voting shares allowable under the NCIB or elected to terminate the NCIB.

As at December 7, 2021, the Company had purchased for cancellation 11,298,931 Class A subordinate voting shares under its NCIB for approximately $1,149 million at a weighted average price of $101.73 per share. The purchased shares include 4,204,865 Class A subordinate voting shares purchased for cancellation on February 19, 2021 from Caisse de dépôt et placement du Québec for a cash consideration of $400 million, by way of private agreement. In the case of such purchase, a favourable decision was obtained from the Quebec securities regulator to exempt the Company from issuer bid requirements and it is considered within the annual aggregate limit that the Company is entitled to purchase under its current NCIB. A copy of the Company’s Notice of Intention relating to its NCIB may be obtained free of charge from CGI’s Investor Relations department. See the heading Additional Information at the end of this document.

Principal Holders of Class A Subordinate Voting Shares and Class B Shares

As at December 7, 2021, to the knowledge of the directors and executive officers of the Company, the only persons who beneficially owned, directly or indirectly, or exercised control or direction over 10% or more of CGI’s outstanding Class A subordinate voting shares or Class B shares were Mr. Serge Godin and Caisse de dépôt et placement du Québec. Their holdings are set out in the tables that follow.

As at December 7, 2021, the Company and its related subsidiaries are controlled by Mr. Serge Godin, the Founder and Executive Chairman of the Board.

Name	****	Shares – Class “A”			****	Shares – Class “B”			****	Total Equity
	Number		%		Number		%		Total % of<br>Equity		Total<br>Number of<br>Votes		Total % of<br>Votes
Serge Godin		336,324		0.15%						0.14%		478,906		0.10%
						25,545,706		96.60%		10.49%		255,457,060		53.05%
Total	****	336,324	****	0.15%	****	25,545,706	****	96.60%	****	10.63%	****	255,935,966	****	53.15%
Name	Shares – Class “A”					Total Equity
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	Number		%			Total % of<br>Equity			Total<br>Number of<br>Votes		Total % of<br>Votes
Caisse de dépôt et placement du Québec		27,411,334		12.63	%		11.26	%		27,411,334		5.69	%
							–			–		–
Total	****	27,411,334	****	12.63	%	****	11.26	%	****	27,411,334	****	5.69	%

As at December 7, 2021, Mr. André Imbeau, the Founder and Advisor to the Executive Chairman of the Board, beneficially owned, directly or indirectly, or exercised control or direction over, 900,000 Class B shares.

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CGI’s Investor Relations department regularly surveys the Company’s largest institutional shareholders. The following table sets out, as at December 7, 2021, the top ten institutional holders of CGI’s Class A subordinate voting shares, based on the shareholder identification data available to the Company.

Name	Shares – Class “A”					Total Equity
	Number		%			Total % of<br>Equity			Total<br>Number of<br>Votes		Total % of<br>Votes
Caisse de dépôt et placement du Québec		27,411,334		12.63	%		11.26	%		27,411,334		5.69	%
BlackRock Asset Management Canada Limited		11,545,000		5.32	%		4.74	%		11,545,000		2.40	%
Fidelity Investments Canada ULC		8,878,509		4.09	%		3.65	%		8,878,509		1.84	%
Jarislowsky Fraser, Ltd.		7,825,249		3.60	%		3.21	%		7,825,249		1.63	%
Mawer Investment Management Ltd.		6,906,000		3.18	%		2.84	%		6,906,000		1.43	%
The Vanguard Group, Inc.		6,795,019		3.13	%		2.79	%		6,795,019		1.41	%
CI Global Asset Management		4,170,000		1.92	%		1.71	%		4,170,000		0.87	%
RBC Dominion Securities, Inc.		4,081,799		1.88	%		1.68	%		4,081,799		0.85	%
RBC Global Asset Management Inc.		4,003,091		1.84	%		1.64	%		4,003,091		0.83	%
Fidelity Management & Research Company LLC		3,688,682		1.70	%		1.51	%		3,688,682		0.77	%

As at December 7, 2021, the directors and executive officers of the Company, as a group, beneficially owned, directly or indirectly, or exercised control or direction over, 1,679,814 **** Class A subordinate voting shares and 26,445,706 Class B shares representing respectively approximately 0.77% of the issued and outstanding Class A subordinate voting shares and 100% of the issued and outstanding Class B shares.

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Business to be Transacted at the Meeting

The following items of business will be presented to the shareholders at the Meeting:

1.	Presentation of the Annual Audited Consolidated Financial Statements

The Annual Audited Consolidated Financial Statements of the Company for the fiscal years ended September 30, 2021 and 2020 and the report of the auditor will be tabled at the Meeting. The Annual Audited Consolidated Financial Statements were mailed with the Notice of Meeting to shareholders who requested them. Copies of the Annual Audited Consolidated Financial Statements of the Company for the fiscal years ended September 30, 2021 and 2020 may be obtained from the Company upon request and are available on the internet at www.envisionreports.com/gib2021 or on the Canadian Securities Administrators’ website at www.sedar.com.

2.	Election of Directors

Sixteen directors are to be elected to hold office until the close of the next Annual General Meeting of Shareholders or until such director’s resignation, unless the office is earlier vacated. Each of the sixteen persons presented in this Management Proxy Circular is nominated for election as a director of the Company and each nominee has agreed to serve as a director if elected.

The persons named as proxies in the proxy form or voting instruction form, as applicable, intend to cast the votesrepresented by proxy at the Meeting FOR the election as directors of the sixteen persons nominated in this Management Proxy Circular unless shareholders direct otherwise.

3.	Appointment of Auditor

The Board of Directors recommends that PricewaterhouseCoopers LLP be appointed as the auditor of the Company to hold office until the next Annual General Meeting of Shareholders or until its successor is appointed. PricewaterhouseCoopers LLP was first appointed as the Company’s auditor at the Annual General and Special Meeting of Shareholders held on January 30, 2019.

The persons named as proxies in the proxy form or voting instruction form, as applicable, intend to cast the votes represented byproxy at the Meeting FOR the appointment of PricewaterhouseCoopers LLP as auditor and to vote to authorize the Audit and Risk Management Committee to fix the compensation of the auditor unless shareholders direct otherwise.

4.	Shareholder Proposals

Five shareholder proposals were submitted by the Mouvement d’éducation et de défense des actionnaires (“MÉDAC”). MÉDAC is a not-for-profit company whose registered office is located at 82 Sherbrooke Street West, Montréal, Quebec, Canada, H2X 1X3, holding 32 Class A subordinate voting shares that were acquired on February 19, 2014.

The five proposals are enclosed as Appendix C hereto, along with the responses of CGI’s Board of Directors. However, it was mutually agreed with MÉDAC not to present Shareholder Proposals Numbers Three, Four and Five for a vote at the Meeting. Consequently, only Shareholder Proposals Numbers One and Two will be presented for a vote at the Meeting.

The persons named as proxies in the proxy form or voting instruction form, as applicable, intend to cast the votes represented byproxy at the Meeting AGAINST the adoption of Shareholder Proposal Number One and Shareholder Proposal Number Two attached as Appendix C unless shareholders direct otherwise.

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Nominees for Election as Directors

The persons whose names are printed in the form of proxy intend to vote for the election as directors of the proposed nominees whose names are set forth in the following pages. Each director elected will hold office until the next Annual General Meeting of Shareholders or until such director’s resignation, unless the office is earlier vacated.

The information below lists the name of each candidate proposed by the Board of Directors, on the recommendation of the Corporate Governance Committee, for election as a director; whether the candidate has been determined by the Board of Directors to be independent of, or related to, the Company; whether the candidate complies with the Company’s share ownership guideline; the candidate’s age; the principal occupation of the candidate; the city, province or state, and country of residence of the candidate; the year when the candidate first became a director, if currently a director; the voting results for the candidate in the previous year’s election, if applicable; the standing committee memberships of the candidate; the skills the candidate brings to the Board of Directors based on the Board of Directors’ skills matrix; the number of shares of the Company beneficially owned, directly or indirectly, or over which control or direction is exercised; the number of Deferred Stock Units (“DSUs”) of the Company held (see the heading Deferred StockUnits Plan and Deferred Stock Units Granted to Directors later in this document); the number of stock options of the Company held (see the heading Share Option Plan later in this document); the number of Performance Share Units (“PSUs”) of the Company held (see the heading Performance Share Unit Plans later in this document); as well as current and previous directorships.

Information relating to shares, DSUs, stock options and PSUs, if any, beneficially owned, or over which control or direction is exercised, is provided as at December 7, 2021.

Alain Bouchard<br> <br><br><br><br><br><br><br><br><br> <br><br><br><br>Montréal, Quebec, Canada<br> <br><br><br><br>Director since: 2013<br> <br>Age: 72<br><br><br><br> <br>Independent director,<br><br><br>complies with the share<br> <br>ownership<br>guideline	Mr. Bouchard is the Founder and Executive<br>Chairman of the Board of Alimentation Couche-Tard Inc., a position he has occupied since he ceased acting as President and Chief Executive Officer in 2014 after having served in such capacity for 35 years. Mr. Bouchard was one of the<br>founders of Alimentation Couche-Tard Inc. in 1980 and has been instrumental in its growth. Alimentation Couche-Tard Inc. is the largest independent convenience store operator in North America in terms of number of company-operated stores and<br>comprises a network of more than 16,000 convenience stores in Canada, the United States, Europe, and sixteen other countries and territories. Mr. Bouchard was named an Officer of the Order of Canada and an Officer of the Ordre national du<br>Québec. He holds an honorary Doctorate degree in Consumer Sciences from Université Laval in Québec City and an honorary Doctorate degree in Management from McGill University in Montréal.<br><br><br><br> <br>Member of the Human<br>Resources Committee<br> <br><br> <br>Class A subordinate voting<br>shares: 25,000 (*)<br> <br>Deferred Stock Units: 22,747 (+)<br><br><br>Stock options: 21,151 (‡)
	2021 votes in favour: 95.08%
Operational Literacy				Governance Risk and Compliance
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Executive	Consulting<br>Services and			Financial Literacy			Governance<br>and Human
Leadership	IT Industry	Geography	Vertical market	Finance	Accounting	Risk	Resources
✓		Global	Manufacturing,<br>retail and<br>distribution	✓	✓	✓	✓
2021 MANAGEMENT PROXY CIRCULAR	11
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Nominees for Election as Directors

LOGO

George A. Cope<br> <br><br><br><br><br> <br><br><br><br><br><br> <br>Toronto, Ontario, Canada<br> <br><br><br><br>Director since: 2020<br> <br>Age: 60<br><br><br><br> <br>Independent director,<br><br><br>complies with the share<br> <br>ownership<br>guideline	Mr. Cope is a corporate director. Prior to<br>his retirement in January 2020, he was President and Chief Executive Officer of BCE Inc. and Bell Canada, a position he had held since 2008. He was recognized as Corporate Citizen of the Year in the Report on Business CEO of the Year Awards (2019),<br>one of the Top 100 Best-Performing CEOs in the World by Harvard Business Review (2019) and as Canada’s Outstanding CEO of the Year for 2015 by the Financial Post. Under his leadership, Bell announced the Bell Let’s Talk initiative in<br>2010, the largest-ever corporate commitment to Canadian mental health and now one of the country’s most prominent community investment campaigns. Mr. Cope was named Ivey Business Leader of the Year in 2013 and serves on the school’s<br>advisory board. He has been awarded honorary Doctorate degrees by his alma mater, University of Windsor and Trent University, was Chair of United Way Toronto’s record-breaking 2013 campaign, and received the Queen’s Diamond Jubilee Medal<br>for his work on Bell Let’s Talk. Mr. Cope is Chair of the board of the Bank of Montreal, and serves as a director of its U.S. subsidiary, BMO Financial Corp. In addition, he sits on the board of directors of the Brain Canada Foundation,<br>and was a past board member of Maple Leaf Sports & Entertainment Ltd. (MLSE). Mr. Cope was appointed a Member of the Order of Canada in 2014 and was inducted into the Canadian Business Hall of Fame in 2018. Mr. Cope is a graduate<br>of the Ivey School of Business at Western University.<br> <br><br><br><br>Member of the Corporate Governance Committee and Human Resources Committee<br><br><br><br> <br>Class A subordinate voting shares: 21,540<br>(*)<br> <br>Deferred Stock Units: 3,255 (+)
	2021 votes in favour: 99.30%
Operational Literacy				Governance Risk and Compliance
---	---	---	---	---	---	---	---
Executive	Consulting<br>Services and			Financial Literacy			Governance<br>and Human
Leadership	IT Industry	Geography	Vertical market	Finance	Accounting	Risk	Resources
✓	✓	Global	Multiple vertical<br>markets	✓	✓	✓	✓
Paule Doré<br> <br><br><br><br><br> <br><br><br><br><br><br> <br>Outremont, Quebec, Canada<br> <br><br><br><br>Director since: 1995<br> <br>Age: 70<br><br><br><br> <br>Independent director,<br><br><br>complies with the share ownership guideline	Ms. Doré is a corporate director.<br>She joined CGI in 1990 and served in a number of roles, including as Executive Vice-President and Chief Corporate Officer when she retired in 2006. Ms. Doré has served on the board of directors of other publicly listed companies,<br>including Ault Food Limited, AXA Canada, Groupe Covitec Inc., Groupe Laperrière & Verreault Inc., Cogeco Inc. and Héroux-Devtek Inc. Ms. Doré currently serves as a director of the Institute for the Governance of<br>Public and Private Organizations (IGOPP). Ms. Doré holds an honorary Doctorate degree in Philosophy from the Dominican University College in Ottawa.<br> <br><br><br><br>Chair of the Corporate Governance Committee<br><br><br><br> <br>Class A subordinate voting shares: 54,274<br>(*)<br> <br>Deferred Stock Units: 14,249 (+)<br><br><br>Stock options: 625 (‡)
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	2021 votes in favour: 94.53%
Operational Literacy				Governance Risk and Compliance
---	---	---	---	---	---	---	---
Executive	Consulting<br>Services and			Financial Literacy			Governance<br>and Human
Leadership	IT Industry	Geography	Vertical market	Finance	Accounting	Risk	Resources
✓	✓	Global	Multiple vertical<br>markets	✓	✓	✓	✓
12	2021 MANAGEMENT PROXY CIRCULAR
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Nominees for Election as Directors

LOGO

Julie Godin<br> <br><br><br><br>Westmount, Quebec,<br> <br><br><br><br><br><br> <br><br> <br>Canada<br><br><br><br> <br>Director since: 2013<br><br><br>Age: 46<br> <br><br> <br>Director related to CGI,<br> <br>complies with the share ownership guideline	Ms. Godin, as Co-Chair of the CGI Board of Directors, collaborates with<br>the Board to set the strategic direction of the Company, including overseeing the development and execution of its rolling three-year strategic plan, which is updated annually. As part of this, she and the Board focus on achieving results for and<br>maintaining equilibrium among CGI’s three stakeholders – clients, employees (whom we call members) and shareholders – to ensure each stakeholders’ long-term success. As Executive Vice-President of Strategic Planning and Corporate<br>Development, Ms. Godin oversees the ongoing development of the CGI Management Foundation, which includes the key elements and best practices that define and guide the Company’s actions for the benefit of all three stakeholders. She also<br>leads the strategic planning, marketing & communications and mergers & acquisitions functions. In this role, she directs the Company’s continuous improvement through structured stakeholder insights and metrics, and drives<br>forward the successful execution of the Build and Buy Strategy, equipping leaders to bring forward CGI’s end-to-end services and merging with IT and business<br>consulting firms that strengthen our footprint and capabilities. Before joining CGI, Ms. Godin founded Oxygen Corporate Health, a company that manages comprehensive health and wellbeing programs in the workplace, which merged with CGI. From<br>2017 to 2021, Ms. Godin was a member of the Board of Directors of Canadian National Railway Company, a transportation leader and the only transcontinental railroad in North America.<br><br><br><br> <br>Co-Chair of the Board, Executive Vice-President, Strategic Planning and Corporate Development<br> <br><br><br><br>Class A subordinate voting shares: 10,670 (*)<br><br><br>Stock options: 251,616 (‡)<br><br><br>Performance Share Units: 36,970 (§)
	2021 votes in favour: 97.85%
Operational Literacy				Governance Risk and Compliance
---	---	---	---	---	---	---	---
Executive	Consulting<br>Services and			Financial Literacy			Governance<br>and Human
Leadership	IT Industry	Geography	Vertical market	Finance	Accounting	Risk	Resources
✓	✓	Global	Multiple vertical<br>markets	✓	✓	✓	✓
2021 MANAGEMENT PROXY CIRCULAR	13
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Nominees for Election as Directors

LOGO

Serge Godin<br> <br><br><br><br>Westmount, Quebec, Canada<br> <br><br><br><br><br><br> <br><br> <br><br><br><br>Director since: 1976<br> <br>Age: 72<br><br><br><br> <br>Director related to CGI,<br><br><br>complies with the share ownership guideline	Mr. Godin founded CGI in 1976 and he is<br>the controlling shareholder of the Company. Today, CGI is one of the largest IT and business consulting services firms in the world. Mr. Godin led CGI as its President and Chief Executive Officer from its founding until 2006, when he became<br>Founder and Executive Chairman of the Board.<br> <br><br> <br>Under his leadership,<br>CGI has expanded through both organic growth and more than 100 acquisitions, growing from 2 employees in 1976 to 80,000 today.<br> <br><br><br><br>Mr. Godin is an Officer of the Order of Canada and an Officer of the Ordre national du Québec. In 2008, he was inducted into the Canadian<br>Business Hall of Fame. In 2011, he was named an Honorary Associate by the Conference Board of Canada. In 2015, he became a lifelong member of the Horatio Alger Association. Mr. Godin has been awarded several honorary doctorate degrees,<br>including from ÉTS (École de technologie supérieure) of Montréal, York University in Toronto, Montreal’s Concordia University, HEC (University of Montréal Business School) and Québec’s<br>Université Laval.<br> <br><br> <br>In January 2021, he was appointed an<br>independent director of Alstom.<br> <br><br> <br>Mr. Godin has long been<br>involved in charitable causes. In 2000, together with other members of his family, he established the Godin Family Foundation with a mission to alleviate poverty, promote education and improve the health of children and teens in need. Since its<br>inception, the Foundation has helped more than 400 schools, hospitals and youth organizations. Mr. Godin owns a majority interest in CGI’s Class B shares and controls the Company and related subsidiaries (see the heading Principal<br>Holders of Class A Subordinate Voting Shares and Class B Shares earlier in this document).<br><br><br><br> <br>Founder and Executive Chairman of the<br>Board<br> <br><br> <br>Class A subordinate voting shares: 336,324 ()<br> <br>Class B shares: 25,545,706 ()<br><br><br>Performance Share Units: 230,597 (§)
	2021 votes in favour: 97.90%
Operational Literacy				Governance Risk and Compliance
---	---	---	---	---	---	---	---
Executive	Consulting<br>Services and			Financial Literacy			Governance<br>and Human
Leadership	IT Industry	Geography	Vertical market	Finance	Accounting	Risk	Resources
✓	✓	Global	Multiple vertical<br>markets	✓	✓	✓	✓
André Imbeau<br> <br><br><br><br>Beloeil, Quebec, Canada<br> <br><br><br><br><br>	Mr. Imbeau is the Founder and Advisor to the Executive Chairman of the Board of CGI. He co-founded CGI with Mr. Serge Godin in 1976 and was, until 2006, Executive Vice-President and Chief Financial Officer and, until 2016, Founder, Vice-Chairman of the Board and Corporate Secretary of the Company.<br>Mr. Imbeau’s financial and operational expertise and deep understanding of CGI’s operations enables him to provide valuable insight to management and the Board of Directors. Mr. Imbeau was awarded an honorary Doctorate degree<br>from Université du Québec à Chicoutimi. Mr. Imbeau holds an interest in the Company’s Class B shares (see the heading Principal Holders of Class ASubordinate Voting Shares and Class B Shares earlier in this document).<br> <br><br><br><br>Founder and Advisor to the Executive Chairman of the Board<br><br><br><br> <br>Class A subordinate voting shares: 30,698 ()<br> <br>Class B shares: 900,000 ()<br><br><br>Stock options: 92,107 (‡)
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Director since: 1976<br><br><br>Age: 72<br> <br><br> <br>Director related to CGI,<br> <br>complies with the share ownership guideline	2021 votes in favour: 98.27%
Operational Literacy				Governance Risk and Compliance
---	---	---	---	---	---	---	---
Executive	Consulting<br>Services and			Financial Literacy			Governance<br>and Human
Leadership	IT Industry	Geography	Vertical market	Finance	Accounting	Risk	Resources
✓	✓	Global	Multiple vertical<br>markets	✓	✓	✓	✓
14	2021 MANAGEMENT PROXY CIRCULAR
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Nominees for Election as Directors

LOGO

Gilles Labbé<br> <br><br><br><br><br><br><br><br><br> <br><br> <br>Outremont, Quebec,<br><br><br>Canada<br> <br><br><br><br>Director since: 2010<br> <br>Age: 65<br><br><br><br> <br>Independent director,<br><br><br>complies with the share ownership guideline	Mr. Labbé is the Executive Chairman of the Board of Héroux-Devtek Inc., an international company<br>specializing in the design, development, manufacture, repair, and overhaul of landing gear systems and components for the aerospace market. Prior to June 2019, Mr. Labbé had been President and Chief Executive Officer of<br>Héroux-Devtek Inc. since the acquisition of Devtek Corporation by Héroux Inc. in 2000 and previously, he was the President and Chief Executive Officer of Héroux Inc. since 1989. Mr. Labbé holds a Bachelor of<br>Business Administration degree from Université de Montréal and is a Fellow Chartered Professional Accountant (FCPA, FCA).<br> <br><br><br><br>Chair of the Audit and Risk Management Committee<br><br><br><br> <br>Class A subordinate voting shares:<br>931 (*)<br> <br>Deferred Stock Units: 31,930 (+)<br><br><br>Stock options: 30,799 (‡)
	2021 votes in favour: 99.46%
Operational Literacy				Governance Risk and Compliance
---	---	---	---	---	---	---	---
Executive	Consulting<br>Services and			Financial Literacy			Governance<br>and Human
Leadership	IT Industry	Geography	Vertical market	Finance	Accounting	Risk	Resources
✓	✓	Global	Manufacturing,<br>retail and<br>distribution	✓	✓	✓	✓
Michael B. Pedersen<br> <br><br><br><br><br> <br><br><br><br><br><br> <br>Toronto, Ontario, Canada<br> <br><br><br><br>Director since: 2017<br> <br>Age: 61<br><br><br><br> <br>Independent director,<br><br><br>complies with the share ownership guideline	Mr. Pedersen is a corporate director.<br>Prior to his retirement in June 2018, he was Special Advisor to the Chief Executive Officer of The Toronto-Dominion Bank since June 2017 and Group Head, U.S. Banking of The Toronto-Dominion Bank as well as President and Chief Executive Officer and a<br>director of TD Bank US Holding Company, TD Bank, N.A. and TD Bank USA, N.A. from 2013 to 2017, where he was responsible for leading the bank’s retail and commercial banking operations in the United States. Prior to joining TD Bank Group in<br>2007, Mr. Pedersen worked at Barclays plc in the United Kingdom where he was responsible for three global businesses and prior to that he worked at CIBC where he held senior executive roles in retail and business banking. Mr. Pedersen<br>served as Chairman of the Canadian Bankers Association and currently serves as a director of SNC-Lavalin, as Chairman of the board of directors of the Business Development Bank of Canada and as Chair of the<br>National Board of Directors of the Nature Conservancy of Canada. Mr. Pedersen holds a Bachelor of Commerce degree from University of British Columbia and a Master’s degree in Industrial Relations from University of Toronto.<br><br><br><br> <br>Member of the Audit and Risk Management<br>Committee<br> <br><br> <br>Class A subordinate voting shares: 24,350 (*)<br> <br>Deferred Stock Units: 10,131 (+)
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	2021 votes in favour: 99.62%
Operational Literacy				Governance Risk and Compliance
---	---	---	---	---	---	---	---
Executive	Consulting<br>Services and			Financial Literacy			Governance<br>and Human
Leadership	IT Industry	Geography	Vertical market	Finance	Accounting	Risk	Resources
✓		Global	Financial<br>services	✓	✓	✓	✓
2021 MANAGEMENT PROXY CIRCULAR	15
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Nominees for Election as Directors

LOGO

Stephen S. Poloz<br> <br><br><br><br><br><br><br><br><br> <br><br> <br>Orleans, Ontario, Canada<br><br><br><br> <br>Director since: 2020<br><br><br>Age: 66<br> <br><br> <br>Independent director,<br> <br>complies with the share ownership guideline	Mr. Poloz is a corporate director. A<br>widely-recognized economist with nearly 40 years of experience in financial markets, forecasting and economic policy, Stephen S. Poloz served a seven-year term as the Governor of the Bank of Canada, starting in 2013. As Governor, he served as<br>Chairman of the Bank’s board of directors. He was a director of the Bank for International Settlements (BIS) and the Canada Deposit Insurance Corporation. He was also Chair of the BIS Audit Committee and former Chair of the Consultative Council<br>for the Americas. Previously, Mr. Poloz was President and CEO of Export Development Canada, a major public sector financial intermediary providing various forms of insurance and lending to facilitate international business on behalf of Canadian<br>companies. Mr. Poloz currently serves as a director of Enbridge Inc.<br> <br><br><br><br>Member of the Audit and Risk Management Committee<br><br><br><br> <br>Deferred Stock Units: 1,252 (+)
	2021 votes in favour: 99.69%
Operational Literacy				Governance Risk and Compliance
---	---	---	---	---	---	---	---
Executive	Consulting<br>Services and			Financial Literacy			Governance<br>and Human
Leadership	IT Industry	Geography	Vertical market	Finance	Accounting	Risk	Resources
✓		Global	Financial<br>services	✓	✓	✓	✓
Mary Powell<br> <br><br><br><br><br><br><br><br><br> <br><br> <br>Vermont, United States<br><br><br><br> <br>Director since: 2020<br><br><br>Age: 61<br> <br><br> <br>Independent director,<br> <br>complies with the share ownership guideline	Ms. Powell is a corporate director. She currently serves as Chief Executive Officer of Sunrun Inc., the largest<br>residential-solar company in the U.S. Recognized as an energy transformation visionary, Mary G. Powell has served as President and Chief Executive Officer for Green Mountain Power Corporation (GMP) in the state of Vermont from 2008 through 2019. She<br>led GMP’s ambitious energy transformation program to provide low carbon, low cost and reliable power to Vermont citizens. Ms. Powell has received various accolades, including the prestigious Rachel Carson Award in 2018, which honors<br>distinguished female leaders influencing the environment. Ms. Powell served as Chair of The Solar Foundation and director of the Rocky Mountain Institute. She has extensive experience as a board member, and board chair, and currently serves on the<br>boards of Sunrun, Inc. and Energir.<br> <br><br> <br>Member<br>of the Corporate Governance Committee and Human Resources Committee<br> <br><br><br><br>Deferred Stock Units: 750 (+)
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	2021 votes in favour: 99.63%
Operational Literacy				Governance Risk and Compliance
---	---	---	---	---	---	---	---
Executive	Consulting<br>Services and			Financial Literacy			Governance<br>and Human
Leadership	IT Industry	Geography	Vertical market	Finance	Accounting	Risk	Resources
✓		Global	Communications<br>& Utilities	✓	✓	✓	✓
16	2021 MANAGEMENT PROXY CIRCULAR
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Nominees for Election as Directors

LOGO

Alison C. Reed<br> <br><br><br><br><br><br><br><br><br> <br><br> <br>London, United Kingdom<br><br><br><br> <br>Director since: 2018<br><br><br>Age: 64<br> <br><br> <br>Independent director,<br> <br>complies with the share ownership guideline	Ms. Reed is a corporate director. She<br>previously held senior management roles at Marks and Spencer plc where she spent more than 20 years, including as Chief Financial Officer from 2001 to 2005, and at Standard Life Assurance Company and Standard Life plc, where she served as Chief<br>Financial Officer from 2005 to 2006 and led the company’s listing on the London Stock Exchange. Ms. Reed has served on the board of directors of several companies, including Darty plc and HSBC Bank plc. She currently serves as Deputy<br>Chairman of British Airways plc, as a director of NewDay Ltd and as a Member of Council of Exeter University. Ms. Reed holds a Bachelor of Arts degree from Exeter University and is a Chartered Accountant (ACA).<br><br><br><br> <br>Member of the Audit and Risk Management<br>Committee<br> <br><br> <br>Class A subordinate voting shares: 3,000 (*)
	2021 votes in favour: 99.62%
Operational Literacy				Governance Risk and Compliance
---	---	---	---	---	---	---	---
Executive	Consulting<br>Services and			Financial Literacy			Governance<br>and Human
Leadership	IT Industry	Geography	Vertical market	Finance	Accounting	Risk	Resources
✓		Global	Multiple vertical<br>markets	✓	✓	✓	✓
Michael E. Roach<br> <br><br><br><br><br><br><br><br><br> <br><br> <br>Montréal, Quebec, Canada<br><br><br><br> <br>Director since: 2006<br><br><br>Age: 69<br> <br><br> <br>Independent director,<br> <br>complies with the share ownership guideline	Mr. Roach is a corporate director. Retired<br>President and Chief Executive Officer of CGI (2006-2016) and President and Chief Operating Officer (2002-2006), he joined CGI in a senior management position in 1998, from a major telecommunications company. Mr. Roach was named CEO of the Year<br>2013 by the Québec-based business journal Les Affaires and Most Innovative CEO of the Year 2014 by Canadian Business magazine. He currently serves on the board of directors of CAE Inc. and is a member<br>of the National Advisory Board for Canada’s Outstanding CEO of the Year. He is the former Chair of Interac Inc. Mr. Roach holds a Bachelor of Arts in Economics and Political Science, as well as an Honorary Doctorate in Business<br>Administration from Laurentian University in Sudbury, Ontario.<br> <br><br> <br>Member of the Board of Directors<br> <br><br><br><br>Class A subordinate voting shares: 951,335 (*)<br><br><br>Deferred Stock Units: 6,058 (+)
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	2021 votes in favour: 98.47%
Operational Literacy				Governance Risk and Compliance
---	---	---	---	---	---	---	---
Executive	Consulting<br>Services and			Financial Literacy			Governance<br>and Human
Leadership	IT Industry	Geography	Vertical market	Finance	Accounting	Risk	Resources
✓	✓	Global	Multiple vertical<br>markets	✓	✓	✓	✓
2021 MANAGEMENT PROXY CIRCULAR	17
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Nominees for Election as Directors

LOGO

George D. Schindler<br> <br><br><br><br><br><br><br><br><br> <br><br> <br>Fairfax, Virginia,<br><br><br>United States<br> <br><br><br><br>Director since: 2016<br> <br>Age: 58<br><br><br><br> <br>Director related to CGI,<br><br><br>complies with the share ownership guideline	Mr. Schindler is the President and Chief<br>Executive Officer of CGI. He joined the Company through its acquisition of American Management Systems, Inc. in 2004 and has since then held numerous leadership roles, including leading the strategy and growth of CGI’s end-to-end services and solutions for commercial and government clients in the United States and Canada. Prior to his appointment as President and Chief Executive Officer in<br>2016, Mr. Schindler served as President and Chief Operating Officer of CGI since 2015 and as President, United States and Canada Operations since 2011. A recognized industry leader, Mr. Schindler has twice been named a Top 100<br>Leader by Federal Computer Week. He holds a Bachelor of Science degree in Computer Science from Purdue University.<br> <br><br><br><br>President and Chief Executive Officer<br> <br><br> <br>Class A subordinate voting shares: 48,792 (*)<br><br><br>Stock options: 1,094,339 (‡)<br><br><br>Performance Share Units: 211,331 (§)
	2021 votes in favour: 99.54%
Operational Literacy				Governance Risk and Compliance
---	---	---	---	---	---	---	---
Executive	Consulting<br>Services and			Financial Literacy			Governance<br>and Human
Leadership	IT Industry	Geography	Vertical market	Finance	Accounting	Risk	Resources
✓	✓	Global	Multiple vertical<br>markets	✓	✓	✓	✓
Kathy N. Waller<br> <br><br><br><br><br><br><br><br><br> <br><br> <br>Atlanta, Georgia,<br><br><br>United States<br> <br><br><br><br>Director since: 2018<br> <br>Age: 63<br><br><br><br> <br>Independent director,<br><br><br>complies with the share ownership guideline	Ms. Waller is a corporate director. She<br>served as the Executive Vice President, Chief Financial Officer and President, Enabling Services of The Coca-Cola Company until March 2019 where she was responsible for leading the company’s global finance organization. Ms. Waller joined<br>The Coca-Cola Company in 1987 as a senior accountant and held numerous accounting and finance roles. She was Vice President, Controller from August 2009 to September 2013 and Senior Vice President, Finance from September 2013 to April 2014, prior to<br>becoming Executive Vice President and Chief Financial Officer. She assumed responsibility for the company’s strategic governance areas as Executive Vice President, Chief Financial Officer and President Enabling Services from May 2017 to March<br>2019. Ms. Waller currently serves on the board of directors of Beyond Meat, Inc., Delta Air Lines, Inc. and Cadence Bancorporation. Previously she served on the board of directors of Coca-Cola FEMSA, S.A.B. de C.V and Monster Beverage<br>Corporation. She holds a Bachelor of Arts degree and a Master’s degree in Business Administration from the University of Rochester and is a Certified Public Accountant (CPA, CGMA).<br><br><br><br> <br>Member of<br>the Audit and Risk Management Committee<br> <br><br><br><br>Deferred Stock Units: 4,901 (+)
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	2021 votes in favour: 99.54%
Operational Literacy				Governance Risk and Compliance
---	---	---	---	---	---	---	---
Executive	Consulting<br>Services and			Financial Literacy			Governance<br>and Human
Leadership	IT Industry	Geography	Vertical market	Finance	Accounting	Risk	Resources
✓	✓	Global	Manufacturing,<br>retail and<br>distribution	✓	✓	✓	✓
18	2021 MANAGEMENT PROXY CIRCULAR
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Nominees for Election as Directors

LOGO

Joakim Westh<br> <br><br><br><br><br><br><br><br><br> <br><br> <br>Stockholm, Sweden<br><br><br><br> <br>Director since: 2013<br><br><br>Age: 60<br> <br><br><br><br>Independent director,<br><br><br>complies with the share<br><br><br>ownership guideline	Mr. Westh is a corporate director. He<br>served as Senior Vice-President of LM Ericsson AB until 2009 where he was responsible for strategy, operations and sourcing. Mr. Westh is well-known as a leading expert in the fields of technology and management, particularly in Scandinavia. He<br>served on the board of directors of other publicly listed issuers, including Arcam AB. He currently serves as a director of Saab AB, Swedish Match AB and Absolent Group AB. Mr. Westh holds Master’s degrees in Science from the Royal<br>Institute of Technology and the Massachusetts Institute of Technology.<br> <br><br><br><br>Chair of the Human Resources Committee<br><br><br><br> <br>Class A subordinate voting shares: 15,000<br>(*)
	2021 votes in favour: 98.65%
Operational Literacy				Governance Risk and Compliance
---	---	---	---	---	---	---	---
Executive	Consulting<br>Services and			Financial Literacy			Governance<br>and Human
Leadership	IT Industry	Geography	Vertical market	Finance	Accounting	Risk	Resources
✓	✓	Global	Multiple vertical<br>markets	✓	✓	✓	✓
2021 MANAGEMENT PROXY CIRCULAR	19
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Nominees for Election as Directors

LOGO

Frank Witter<br> <br><br><br><br><br><br><br><br><br> <br><br> <br>Braunschweig, Germany<br><br><br><br> <br>Director since: 2021<br><br><br>Age: 62<br> <br><br><br><br>Independent director,<br><br><br>complies with the share<br><br><br>ownership guideline	Frank Witter is a corporate director. A longtime executive with Volkswagen, Mr. Witter became Chief Executive<br>Officer of Volkswagen Financial Services AG in September 2008, serving in that role until September 2015 when he became Chief Financial Officer for Volkswagen Group – a role from which he retired in 2021. With the responsibility for both<br>finance and information technology, he also served as a member of Volkswagen Group’s Board of Management from October 2015 to March 2021.<br> <br><br><br><br>Mr. Witter joined the Volkswagen Group in 1992, overseeing the capital markets section of the company’s Group Treasury unit until 1998. He<br>subsequently became Treasurer at Volkswagen of America and Volkswagen Canada. In 2001, Mr. Witter left Volkswagen to serve as Corporate Treasurer at SAirGroup in Zurich, Switzerland, returning to Volkswagen in 2002. From 2002 to 2005,<br>Mr. Witter served as CFO of Volkswagen of America and Volkswagen Canada. At the beginning of 2005, he assumed the combined role of CEO and CFO for both subsidiaries. From October 2007 to September 2008, Mr. Witter was President and CFO of<br>VW Credit, Inc. During this time, he also served as Regional Manager for the American markets of Volkswagen Financial Services AG.<br> <br><br><br><br>In May 2021, Mr. Witter became a member of the Supervisory Board of Deutsche Bank AG. He holds a business degree from the University of Hanover in<br>Germany and lives in Braunschweig, Germany.<br> <br><br><br><br>Member of the Audit and Risk Management Committee<br><br><br><br> <br>Deferred Stock Units: 303 (+)
	New candidate for election as director
Operational Literacy				Governance Risk and Compliance
---	---	---	---	---	---	---	---
Executive	Consulting<br>Services and			Financial Literacy			Governance<br>and Human
Leadership	IT Industry	Geography	Vertical market	Finance	Accounting	Risk	Resources
✓		Global	Manufacturing,<br>retail and<br>distribution	✓	✓	✓	✓
(*)	Number of shares beneficially owned, controlled or directed, directly or indirectly.
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(+)	For more information concerning DSUs, please refer to the heading Compensation of Directorslater in this document.
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(‡)	For more information concerning stock options, please refer to the headings Share Option Planand Compensation of Directors later in this document.
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(§)	The number of PSUs includes PSUs that were awarded at the beginning of fiscal 2022 to Ms. Godin and Messrs. Godin<br>and Schindler as part of their target compensation for fiscal 2022, but which have not yet become eligible to vest and remain subject to the achievement of performance conditions, which will be determined at end of fiscal 2022. For more information<br>concerning PSUs, please refer to the heading Performance Share Unit Plans later in this document.
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Report of the Human Resources Committee

Executive Compensation Discussion and Analysis

Executive Compensation Process for the 2021 Fiscal Year

CGI’s executive compensation policy emphasizes incentive compensation linked to the success of the Company to ensure that the financial interests of the Company’s executives are closely aligned with those of shareholders. CGI measures business success on the basis of profit and growth as well as the satisfaction of clients and employees, whom we call members.

CGI’s compensation policy is rooted in its fundamental belief that a company with an inspiring dream, uncompromising integrity, a caring human resources philosophy and solid values is better able to attract and respond to the profound aspirations of high-caliber, competent people. These individuals in turn will deliver high-quality services, in keeping with the Company’s profitability objectives. The growth and profitability generated as a result will allow CGI to continue to offer its shareholders value for their investment.

This belief drives the Company’s compensation programs, which are designed to attract and retain the key talent CGI needs to remain competitive in a challenging market and achieve continued and profitable growth for its shareholders.

As per CGI’s compensation policy, the principles used to determine the compensation of the named executive officers (the President and Chief Executive Officer, the Executive Vice-President and Chief Financial Officer and the three other most highly compensated executive officers of the Company, hereafter referred to as the “Named Executive Officers”) are also applied to all management team members, taking into account the results of their respective business units. In the case of CGI’s senior executives, there is an added emphasis on closely aligning executives’ financial interests with those of shareholders through incentive compensation.

The sections below outline the main features of CGI’s executive compensation policy and programs.

The Human Resources Committee of the Board of Directors

The Committee reviews management’s proposals and makes recommendations to the Board of Directors of the Company in relation to the compensation of certain senior executives, including the entitlements under short and long-term incentive and benefit plans and the corporate objectives that the Founder and Executive Chairman of the Board, the President and Chief Executive Officer and other senior executives are responsible for achieving. Similarly, the Committee is responsible for approving and making recommendations in relation to the compensation of the Company’s outside directors and succession plans for senior executives.

The Committee is composed of Messrs. Joakim Westh, Chair of the Committee, Alain Bouchard, George A. Cope, Timothy J. Hearn, Lead Director, and Ms. Mary G. Powell, all of whom are independent directors. The Committee held four regular meetings in fiscal 2021. Mr. Westh’s role and responsibilities as Chair of the Committee are described later in this document in the report of the Corporate Governance Committee under the heading Role and Responsibilities of the Lead Director and Standing Committee Chairs. The members of the Committee have significant experience in matters relating to human resources management and executive compensation, which they have acquired in their role as senior executives or as members of the Human Resources Committee of other publicly listed issuers. Mr. Westh was Senior Vice-President of LM Ericsson AB, Mr. Bouchard was President and Chief Executive Officer and is now Founder and Executive Chairman of the board of directors of Alimentation Couche-Tard Inc., Mr. Hearn was Chairman and Chief Executive Officer of Imperial Oil Limited and Chair of the Human Resources and Compensation Committee of ARC Resources Ltd, Mr. Cope was President and Chief Executive Officer of BCE Inc. and Bell Canada and Ms. Powell was President and Chief Executive Officer of Green Mountain Power Corporation and now serves as Chief Executive Officer of Sunrun Inc.

Mr. Hearn has decided that he will not seek reelection at the Meeting and, as a result, his term as a director, the Lead Director and as a member of each of the Human Resources Committee and of the Corporate Governance Committee will come to an end at the time of the Meeting.

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Directors later in this document). The Committee’s charter is available on CGI’s website at www.cgi.com. The role and responsibilities of the Committee include:

•	Advising the Board of Directors on human resources planning, compensation of members of the Board of Directors, executive<br>officers and other members, short and long-term incentive plans, benefit plans, and executive officer appointments;
•	Reviewing and advising the Board of Directors on management’s succession plans for executive officers, with special<br>emphasis on the President and Chief Executive Officer succession;
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•	Reviewing and advising the Board of Directors on CGI’s compensation philosophy and policies, including the<br>compensation strategy and compensation policies for the executive officer level as proposed by the Founder and Executive Chairman of the Board, the Co-Chair of the Board and the President and Chief Executive<br>Officer;
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•	Making recommendations to the Board of Directors for the appointment of the President and Chief Executive Officer and<br>other executive officers, while considering and promoting the diversity of the executive team’s background, including in terms of gender, ethnicity, age and experience, and the corporate objectives which the executive officers are<br>responsible for meeting. As the controlling shareholder, Mr. Serge Godin is the Founder and Executive Chairman of the Board;
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•	Monitoring the performance of the President and Chief Executive Officer and providing advice and counsel in the execution<br>of his duties;
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•	Reviewing and advising the Board of Directors on CGI’s overall compensation plan including the adequacy and form of<br>compensation realistically reflecting the responsibilities and risks of the position for the Founder and Executive Chairman of the Board and for the President and Chief Executive Officer of the Company and, in that regard, considering appropriate<br>information;
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•	Reviewing and advising the Board of Directors on the compensation of executive officers, annual adjustment to executive<br>salaries, and the design and administration of short and long-term incentive plans, benefits and perquisites as proposed by the Founder and Executive Chairman of the Board and the President and Chief Executive Officer;
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•	Reviewing and advising the Board of Directors on any exceptional terms of senior executive’s employment and<br>termination arrangements;
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•	Making recommendations on the adoption of new, or significant modifications to, pay and benefit plans;<br>
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•	Recommending the appointment of new officers as appropriate while considering and promoting the diversity of the<br>executive team’s background, including gender, ethnicity, age and experience;
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•	Reviewing and advising the Board of Directors on significant organizational changes;
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•	Reviewing and approving the Committee’s executive compensation report to be contained in the Company’s annual<br>Management Proxy Circular;
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•	Reviewing and advising the Board of Directors on management development programs for the Company;
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•	Reviewing and advising the Board of Directors on special employment contracts or arrangements with officers of the<br>Company, including any contracts relating to change of control, if any; and
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•	Reviewing and advising the Board of Directors on the compensation of the members of the Board of Directors and its<br>committees, including the adequacy and form of compensation realistically reflecting the responsibilities and risks of the positions, and recommending changes where applicable.
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The Committee also performs such other duties from time to time as assigned by the Board of Directors.

The Committee reports to the Board of Directors on its proceedings, the reviews it undertakes, and its recommendations.

In executing its mandate for fiscal 2021, the Committee retained the services of Willis Towers Watson, the Company’s external human resources consultant. Willis Towers Watson was first retained to provide consulting services in 1995. The services provided by Willis Towers Watson to the Committee include:

•	Providing the Committee with information on market trends and good practices on executive and director compensation;<br>
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•	Developing recommendations on the composition of the comparator groups of companies used as the basis for determining the<br>compensation of the directors, the Founder and Executive Chairman of the Board, the President and Chief Executive Officer and other senior executives of the Company;
•	Conducting market research and providing the Committee with data and analysis on compensation practices of companies in<br>comparator groups to allow the Company to align its compensation policy with the market as it applies to the directors, the Founder and Executive Chairman of the Board, the President and Chief Executive Officer and other senior executives; and<br>
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•	Reviewing the design of the annual and long-term incentive plans and providing data and analysis on comparator group<br>company practices in this area.
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To ensure the quality of services provided to the Committee by external human resources consultants, as well as their independence, the Committee has established the following processes as part of its annual work plan:

•	Once a year or as required, external consultants that may be retained by the Committee provide to the Committee a<br>statement of the services that may be provided to the Committee at its request and those may be provided at the request of management for the purpose of enabling the Committee to pre-approve all services that<br>may be provided by such external consultants;
•	The Committee may request from each external consultant information concerning the consultant’s organizational<br>structure and employees who provide services to the Committee so that the Committee may agree with the external consultant on measures to address any real or perceived conflicts of interest that may arise from the services provided by the external<br>consultant to the Company at the request of management; and
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•	The Committee reviews the external consultant independence policy annually to ensure that it continues to meet the<br>Committee’s requirements.
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Executive Compensation Related Fees

The fees of Willis Tower Watson, CGI’s external human resources consultant, for services rendered during the fiscal years ended September 30, 2021 and 2020 are detailed below:

Service retained	Fess billed
	2021		2020
Advice in relation to executive compensation and the compensation of directors^(a)^	$	131,000	$	45,000
All other fees^(b)^	$	278,500	$	250,000
Total fees billed	$	406,500	$	295,000
(a)	All fees billed by the human resources consultant for the years ended September 30, 2021 and 2020 were related to<br>annually recurring work for the Committee.
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(b)	The other fees billed by the human resources consultant for the years ended September 30, 2021 and 2020 were<br>mainly in relation to pension and investment matters.
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Composition of Comparator Groups

To determine appropriate compensation levels, the Named Executive Officers’ positions are compared with similar positions within a comparator group made up of leading companies in a number of industries. These companies include information technology consulting firms and companies similar to CGI in terms of size, and operational and managerial complexity. With 85.5% of its 2021 revenues generated outside Canada and constant international expansion, CGI must offer competitive compensation in each of the challenging markets in which it operates in order to recruit and retain high-performing executives. All of the Company’s major competitors are based either in the U.S., Europe or in the Asia Pacific region and they compete against CGI both in Canada and internationally. In response to this market reality, for the year ended September 30, 2021, the compensation of Named Executive Officers based in the U.S. and Canada is compared to market information from competitors based in the U.S. and Canada, while the compensation of Named Executive Officers based in France is compared to market information from competitors based in France. The Committee reviews the composition of the comparator groups annually and no changes were made to the comparator groups in fiscal 2021.

The selection criteria used to determine the companies included in the comparator groups are the following:

•	Autonomous and publicly-traded companies;
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•	Large number of professionals;
•	Growing companies;
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•	High-end IT and business consulting, systems integration, outsourcing services<br>and intellectual property solution providers;
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•	International scope;
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•	Companies for which IT is very strategic; and
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•	Participation in the data bank for the relevant countries maintained by Willis Towers Watson, the Company’s external<br>human resources consultant.
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Each company in the following table meets one or more of the foregoing criteria.

U.S. and Canada Comparator Group: Executives from 13 companies

Accenture plc<br><br><br>Automatic Data Processing, Inc.<br><br><br>Booz Allen Hamilton Holding Corporation<br><br><br>CACI International Inc.<br><br><br>Capgemini S.E.<br><br><br>Cognizant Technology Solutions Corporation<br><br><br>Conduent Incorporated	DXC Technology Company<br><br><br>Experian plc<br><br><br>Fidelity National Information Services Inc.<br><br><br>Fiserv, Inc.<br><br><br>Leidos Holdings, Inc.<br><br><br>Science Application International Corporation

France Comparator Group: Executives from 11 companies

Accenture plc<br><br><br>Agilent Technologies, Inc.<br><br><br>Atos S.E.<br><br><br>Cap Gemini S.E.<br><br><br>Cognizant Technology Solutions Corporation<br><br><br>DXC Technology Company	International Business Machines Corporation<br><br><br>Indra Sistemas SA<br><br><br>Sopra Steria Group SA<br><br><br>Tieto OYJ<br><br><br>Unisys Corporation

The foregoing comparator groups were used to determine the compensation of the Named Executive Officers for the fiscal year ended September 30, 2021.

Executive Compensation Components

CGI’s total executive compensation is made up of five components: base salary, short-term incentive, long-term incentive, benefits and perquisites. In keeping with the Company’s values, incentive compensation and share ownership are emphasized to ensure that executives’ interests are aligned with CGI’s profitability and growth objectives, which in turn results in increased value for all shareholders under normal market conditions. CGI’s Named Executive Officers do not participate in any defined benefit pension plans.

Component	Description	Policy Alignment with Comparator Groups
Base Salary	Annual base salary based on each executive’s responsibilities, competencies and<br>contribution to the Company’s success.	Aligned with median base salary offered in the comparator group.
Short-Term Incentive	Annual payout based on the achievement of performance objectives in accordance with the<br>Profit Participation Plan.	Aligned with median short-term incentives of the comparator group when performance<br>objectives are met.
Long-Term Incentive	Grants under the Share Option Plan and/or awards under the Performance Share Unit Plans, as<br>applicable in each case, based on achievement of performance objectives.	Aligned with median total compensation of the comparator group when business objectives are<br>met, or above the median to recognize an executive’s exceptional performance.
Benefits	Group benefits and employer contributions under CGI’s Share Purchase Plan.	Aligned with median benefits of the comparator group.
Perquisites	Principal perquisites include company car and related expenses, relocation costs and<br>medical exams.	Aligned with median perquisites of the comparator group.
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Total compensation is aligned with the comparator groups by taking into account the number of years of experience in the role, aligned over time with the median of the total compensation of the comparator group when business objectives are met, while exceptionally allowing for compensation above the median as necessary to recognize an executive’s exceptional and sustained contribution to the Company’s success.

The following table shows for each Named Executive Officer the compensation components as a percentage of their total compensation, at target levels, for the year ended September 30, 2021:

Name and title as at September 30, 2021	Base Salary	Short-Term<br>Incentive	Long-Term<br>Incentive	Benefits and<br>Perquisites
Serge Godin<br><br><br>Founder and Executive Chairman of the Board	10.17%	20.35%	69.20%	0.28%
George D. Schindler<br><br><br>President and Chief Executive Officer	12.61%	25.21%	61.56%	0.62%
François Boulanger<br><br><br>Executive Vice-President and Chief Financial Officer	19.94%	21.94%	55.85%	2.27%
Jean-Michel Baticle<br><br><br>President and Chief Operating Officer	27.76%	27.76%	44.11%	0.37%
Timothy J. Hurlebaus<br><br><br>President, United States Operations, Commercial and State Government	30.10%	19.56%	48.36%	1.98%

The Founder and Executive Chairman of the Board, the Co-Chair of the Board, the President and Chief Executive Officer and the Chief Financial Officer may from time to time exercise their discretion to recommend to the Committee and the Board of Directors that incentive compensation under the Profit Participation Plan, and the performance-based vesting of stock options under the Share Option Plan for Employees, Officers and Directors of CGI Inc. and its Subsidiaries (the “Share Option Plan”) and of PSUs under the Performance Share Unit Plan for Designated Leaders of CGI Inc. and its Subsidiaries (the “2017 PSU Plan” and collectively with the 2014 Performance Share Unit Plan for Designated Participants of CGI Inc., the “PSU Plans”), as applicable, be adjusted in order to ensure that actual profit participation, vested stock options and vested PSUs are equitable and balance the interests of each of the Company’s stakeholders based on the overall performance of the Company and exceptional market conditions.

Base Salary

The base salaries paid to Named Executive Officers are reviewed every year based on each executive’s scope of responsibilities, competencies and contribution to the Company’s success. The objective of CGI’s compensation policy for base salaries is to align them over time with the median base salary in the relevant comparator group, taking into account the number of years of experience in the role, while allowing for compensation to rise above the median in recognition of a particular executive’s exceptional and sustained contribution to the Company’s success. As part of the methodology used for fiscal 2021, the positions of Named Executive Officers were compared with generic executive positions in the compensation databases for the relevant countries maintained by Willis Towers Watson, the Company’s external human resources consultant. When differences in the level and scope of responsibilities for the comparable generic executive position are observed, the value of the generic position is adjusted to ensure that there is an appropriate basis for comparison.

As part of the measures taken to mitigate the financial impact of COVID-19, Mr. Serge Godin, Founder and Executive Chairman of the Board, agreed to forego 100% of his base salary for the period of time from March 30, 2020 to December 31, 2020. In support of these measures, the outside directors of the Company also agreed to forego a significant portion of their compensation for the period of time from March 30, 2020 to December 31, 2020. For more information concerning the outside directors’ compensation reductions, please refer to the heading Board of Directors and Standing Committee Fees later in this document.

Short-Term Incentive Plan – Profit Participation Plan

The Named Executive Officers participate in the Profit Participation Plan, a short-term incentive plan that pays an annual cash payout based on achievement of performance objectives as approved at the beginning of the fiscal year by the Board of Directors on the recommendation of the Committee. The Profit Participation Plan is designed to provide CGI’s management and members with an incentive to increase the profitability and growth of the Company.

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Individual payouts are based on the executive’s profit participation target under the Profit Participation Plan and the achievement of performance objectives. The profit participation target varies as a percentage of base salary depending on the executive’s position and is adjusted in accordance with the performance factors that are directly linked to the level of achievement of the performance objectives set out in the Company’s annual budget and strategic plan. The Profit Participation Plan provides that the Founder and Executive Chairman of the Board, the Co-Chair of the Board, the President and Chief Executive Officer or the Chief Financial Officer may recommend to the Committee and to the Board of Directors to modify payment amounts or propose revised targets based on the overall performance of the Company, the individual’s performance, exceptional market conditions and other factors.

Executive profit participation targets are reviewed annually to ensure they remain aligned with the Company’s compensation policy and continue to be competitive with CGI’s applicable comparator group.

Performance Factors

The performance factors used to adjust each Named Executive Officer’s profit participation target in fiscal 2021 were based on two separate measures: profitability and growth. The achievement of profitability and growth objectives determines the performance factors that are applied to calculate the annual payout under the Profit Participation Plan. Such adjustment may result in a reduction or an increase in the annual payout. In the latter case, the payout may not exceed two times the target. The relative performance of the companies in CGI’s comparator group is not a factor in determining the annual payout being paid under the Profit Participation Plan.

The profitability performance factor is based on the degree of achievement of the net earnings excluding specific items margin. The growth performance factor is based on the achievement of constant currency revenue growth. Both factors are approved by the Board of Directors as part of the Company’s annual budget and strategic plan approval.

Only items that are the result of actual management operation activities are taken into account in the calculation of performance factors for compensation purposes. The performance factors are prorated between target levels.

The profitability performance factor and growth performance factor are established by determining the actual level of achievement of the budgeted profitability and growth objectives which correspond to a pre-determined numerical performance factor.

Profitability		Growth
Net earnings excluding<br><br><br>specific items margin^(a)^	Profitability<br>Performance<br>Factor	Constant currency<br>revenue^(a)^	Growth<br>Performance<br>Factor
Budgeted margin<br><br><br>objectives on a<br> <br>scale of five levels	0<br> <br>0.25<br><br><br>0.50<br> <br>1.00<br><br><br>1.25	Budgeted revenue<br><br><br>objectives on a<br> <br>scale of five levels	0<br> <br>2.00<br><br><br>3.00<br> <br>3.50<br><br><br>4.00
(a)	Net earnings excluding specific items is a non-generally accepted accounting<br>principle (“non-GAAP”) measure of net earnings, excluding acquisition and integration related costs, restructuring costs and tax adjustments. Constant currency revenue is a non-GAAP measure of revenue excluding currency conversion effects. Management believes these measures are useful for executive compensation purposes as they best reflect the Company’s performance and allow for<br>better comparability from period to period. These measures do not have any standardized meaning under International Financial Reporting Standards (“IFRS”) and may not be comparable to similar measures used by other companies. A<br>reconciliation of the net earnings excluding specific items to its closest IFRS measure and a reconciliation of constant currency revenue to its closest IFRS measure can be found on page 29 of the Company’s Management’s Discussion and<br>Analysis for the years ended September 30, 2021 and 2020, which is available on the Canadian Securities Administrators’ website at www.sedar.com.
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Once the profitability performance factor and the growth performance factor are established, the following formula is used to determine the payout under the Profit Participation Plan:

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The effect of the formula is to place importance on achieving both the growth and the profitability objectives. If the minimum threshold for either profitability or growth is not met, there is no annual payout under the Profit Participation Plan.

The profit participation targets of the Founder and Executive Chairman of the Board, the President and Chief Executive Officer, the Executive Vice-President and Chief Financial Officer and the President and Chief Operating Officer were based on the formula above as it pertains solely to the overall Company performance. In the case of the Named Executive Officer who is a President of an operating segment of the Company, also referred to as a Strategic Business Unit, half of his profit participation target was based on the formula above as it pertains to the performance of the Company, while the other half was determined based on the performance of the Strategic Business Unit for which they are responsible using the same performance measures and certain quality metrics (including client and member satisfaction).

CGI does not disclose specific profitability and growth objectives because it considers that the information would place it at a significant competitive disadvantage if the objectives became known. Disclosing the specific performance objectives that are set as part of the Company’s annual budget and strategic planning process would expose CGI to serious prejudice and negatively impact its competitive advantage. For example, to the extent that the Company’s performance objectives became known, its ability to negotiate accretive business agreements could be significantly impaired, putting incremental pressure on its profit margins. In addition, CGI believes that disclosing performance objectives would be inconsistent with CGI’s policy of not providing guidance to the market and limiting the disclosure of forward-looking information.

For fiscal 2021, the profit participation targets and payouts received by the Named Executive Officers under the Profit Participation Plan are as follows:

Name and title as at September 30, 2021	Annual profit<br>participation<br>target	Annual profit<br>participation<br>payout
Serge Godin<br><br><br>Founder and Executive Chairman of the Board	$2,750,000	$2,997,500
George D. Schindler^(a)^<br><br><br>President and Chief Executive Officer	$3,200,000	$3,392,850
François Boulanger<br><br><br>Executive Vice-President and Chief Financial Officer	$863,500	$941,215
Jean-Michel Baticle^(b)^<br><br><br>President and Chief Operating Officer	$906,600	$988,194
Timothy J.<br>Hurlebaus^(a)^<br> <br>President, United States Operations, Commercial and State<br>Government	$493,077	$546,822
(a)	Messrs. Schindler and Hurlebaus are paid in U.S. dollars. The amounts shown are in Canadian dollars converted on the<br>basis of the average exchange rate used in the Company’s Annual Audited Consolidated Financial Statements which was CAD1.2643 for each U.S. dollar in fiscal 2021. Please refer to the disclosure concerning the foreign exchange rates used<br>for financial reporting purposes on page 18 of the Management’s Discussion and Analysis for the years ended September 30, 2021 and 2020.
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(b)	Mr. Baticle is paid in euros. The amounts shown are in Canadian dollars converted on the basis of the average<br>exchange rate used in the Company’s Annual Audited Consolidated Financial Statements which was CAD1.5110 for each euro in fiscal 2021. Please refer to the disclosure concerning the foreign exchange rates used for financial reporting purposes on<br>page 18 of the Management’s Discussion and Analysis for the fiscal years ended September 30, 2021 and 2020.
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Long-Term Incentive Plans

CGI’s long-term incentive plans are designed to ensure that executives’ interests are closely aligned with those of all shareholders and include the Share Option Plan and the PSU Plans. In line with practices among certain of the Company’s comparator groups, the Company’s current compensation practice is to grant, on a case by case basis, PSUs awarded under the 2017 PSU Plan as the long-term incentive component of certain of its senior executives’ compensation. As a result, for fiscal 2021, Named Executive Officers’ target long-term incentive compensation was composed solely of PSUs awarded under the 2017 PSU Plan.

Share Option Plan

The Share Option Plan is designed to ensure that executives’ interests are closely aligned with those of all shareholders. The Company’s practice is to apply performance vesting conditions for all stock options granted under the Share Option

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Plan. The percentage of stock options that become eligible to vest is based on the degree of achievement of profitability and growth objectives determined following the completion of the fiscal year and subject to adjustment in accordance with the Share Option Plan. Stock options that do not become eligible to vest are forfeited and cancelled.

Stock options that have become eligible to vest then typically vest on a time basis as follows: one-quarter when the fiscal year results are approved, one quarter on the second anniversary of the grant, one-quarter on the third anniversary of the grant, and the final quarter on the fourth anniversary of the grant. For fiscal 2021, Named Executive Officers’ target long-term incentive compensation did not include any awards under the Share Option Plan.

See the heading Key Features of CGI’s Long-Term Incentive Plans later in this document for a summary of the features of the Share Option Plan.

Performance ShareUnit Plans

Each PSU entitles the holder to receive one Class A subordinate voting share subject to the achievement of performance and time vesting conditions and to the terms and conditions set out in the PSU Plans. Unlike Class A subordinate voting shares issued in connection with the exercise of stock options under the Share Option Plan, which are issued from treasury, the PSUs are settled with Class A subordinate voting shares purchased in the open market by the plan trustees with funds provided by CGI.

PSUs have performance conditions that are determined by the Board of Directors at the time of each grant. CGI’s annual long-term incentive awards of PSUs are made at the beginning of the fiscal year. The percentage of PSUs that become eligible to vest is based on the degree of achievement of profitability and growth objectives determined following the completion of the fiscal year and subject to adjustment in accordance with the PSU Plans. Both objectives are approved by the Board of Directors concurrently with the Company’s annual budget and strategic plan approval.

PSUs that become eligible to vest then vest on a time basis. PSUs that do not become eligible to vest under the PSU Plans are forfeited and cancelled.

See the heading Key Features of CGI’s Long-Term Incentive Plans later in this document for a summary of the features of the PSU Plans.

Award Date Fair Value

The accounting fair value of the PSUs was determined in accordance with IFRS 2 as the market value of the underlying Class A subordinate voting shares on the award date. The stock-based compensation cost related to PSUs recorded in costs of services, selling and administrative expenses takes into account the actual result of the performance-based vesting and amortizes the resulting net PSU value over the four-year vesting period. Since fiscal 2018, the Company has used the accounting fair value of the PSUs as the award date fair value for compensation purposes in order to align the earned compensation with performance results.

Performance Factors and Vesting Conditions

The performance factors used to determine the number of stock options or PSUs that will vest under CGI’s long-term incentive plans are based on two separate measures: profitability and growth. The achievement of profitability and growth objectives determines the performance factors that are applied to calculate the number of PSUs or stock options that vest under CGI’s long-term incentive plans. The total percentage of PSUs or stock options eligible to vest is capped at 100%.

The profitability performance factor is based on the degree of achievement of the net earnings excluding specific items margin. The growth performance factor is based on the degree of achievement of constant currency revenue growth. Both factors are approved by the Board of Directors concurrently with the Company’s annual budget and strategic plan approval. If the minimum threshold for profitability is not met, no PSUs or stock options become eligible to vest under the long-term incentive plans. The relative performance of the companies in CGI’s comparator groups is not a factor in determining the number of PSUs or stock options that will vest under CGI’s long-term incentive plans.

Only items that are the result of actual management operation activities are taken into account in the calculation of vesting conditions for compensation purposes. The performance factors are prorated between target levels.

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Profitability		Growth
Net earnings excluding<br><br><br>specific items margin^(a)^	Profitability<br>Performance<br>Factor	Constant currency<br>revenue^(a)^	Growth<br>Performance<br>Factor
Budgeted margin<br><br><br>objectives on a<br> <br>scale of five levels	0<br> <br>0.25<br><br><br>0.50<br> <br>1.00<br><br><br>1.25	Budgeted revenue<br><br><br>objectives on a<br> <br>scale of five levels	0<br> <br>0.25<br><br><br>0.75<br> <br>1.00<br><br><br>1.25
(a)	Net earnings excluding specific items is a non-generally accepted accounting<br>principle (“non-GAAP”) measure of net earnings, excluding acquisition and integration related costs, restructuring costs and tax adjustments. Constant currency revenue is a non-GAAP measure of revenue excluding currency conversion effects. Management believes these measures are useful for executive compensation purposes as they best reflect the Company’s performance and allow for<br>better comparability from period to period. These measures do not have any standardized meaning under International Financial Reporting Standards (“IFRS”) and may not be comparable to similar measures used by other companies. A<br>reconciliation of the net earnings excluding specific items to its closest IFRS measure and a reconciliation of constant currency revenue to its closest IFRS measure can be found on page 29 of the Company’s Management’s Discussion and<br>Analysis for the years ended September 30, 2021 and 2020, which is available on the Canadian Securities Administrators’ website at www.sedar.com.
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Once the profitability performance factor and growth performance factor are established, the following formula is used to determine the proportion of performance-based vesting under CGI’s long-term incentive plans.

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Long Term Incentive Plan Awards in Fiscal 2021

For fiscal 2021, an aggregate of 249,142 PSUs were awarded to the Named Executive Officers under the 2017 PSU Plan as part of their fiscal 2021 target compensation. The number of PSUs awarded was determined based on the long-term compensation value required to align the Named Executive Officer’s total compensation with the Company’s compensation policy. No stock options were granted to the Named Executive Officers as part of their fiscal 2021 target compensation. The details of these awards are shown in the Summary Compensation Table later in this document.

Based on the degree of achievement of profitability and growth objectives in fiscal 2021, 73.83% of the PSUs awarded to Messrs. Godin, Schindler, Boulanger and Baticle, in respect of the long-term incentive awards for fiscal 2021, became eligible to vest. In the case of the performance vesting of the PSUs awarded to a Named Executive Officer who is the President of a Strategic Business Unit, half of the performance vesting was based on the overall performance of the Company, while the other half was determined based on the performance of the Strategic Business Unit for which they are responsible using the same performance measures. Based on the foregoing, 99.00% of the PSUs awarded to Mr. Timothy J. Hurlebaus for fiscal 2021 became eligible to vest. PSUs granted in fiscal 2021 under the 2017 PSU Plan that are eligible to vest will vest on the fourth anniversary of the award.

A table showing all outstanding unvested PSU awards held as at September 30, 2021 by the Named Executive Officers as well as the market value of such unvested PSU as of such date is provided in Appendix A.

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Total At Risk Compensation andActual Payouts

A significant portion of the Named Executive Officers’ compensation, namely payments under the Profit Participation Plan and awards under the PSU Plans, is performance-based and therefore “at risk”. The percentage of total compensation of the Named Executive Officers that was “at risk” in fiscal 2021 ranged from 67.92% to 89.54%.

The achievement of the performance factors under the Profit Participation Plan and the performance vesting conditions under the Share Option Plan and PSU Plans also present a meaningful challenge for the Company’s senior executives and management team because the Company consistently sets ambitious goals as part of its annual budget and strategic planning process. This is evidenced by the fact that the aggregate payout to the reported Named Executive Officers for fiscal 2021, 2020 and 2019 that was “at risk”, or subject to the achievement of performance factors or performance vesting conditions, was respectively 84.12%, 33.98% and 91.93% of the target “at risk” compensation.

The table below shows the portion of the total compensation “at risk” as well as the portion of that “at risk” compensation that was actually paid out to the Named Executive Officers for the 2021 fiscal year.

Name and title as at September 30, 2021	Percentage of total target<br>compensation “at risk”^(a)^	Percentage payout of<br>“at risk” compensation^(b)^
Serge Godin<br><br><br>Founder and Executive Chairman of the Board	89.54%	81.83%
George D. Schindler<br><br><br>President and Chief Executive Officer	86.77%	83.19%
François Boulanger<br><br><br>Executive Vice-President and Chief Financial Officer	77.78%	83.75%
Jean-Michel Baticle<br><br><br>President and Chief Operating Officer	71.87%	87.42%
Timothy J. Hurlebaus<br> <br>President, United States<br>Operations, Commercial and State Government	67.92%	102.43%
(a)	This column shows the proportion of the Named Executive Officer’s total target compensation for fiscal 2021 that<br>was “at risk” composed of the annual target payout under the Profit Participation Plan and awards under the 2017 PSU Plan.
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(b)	This column shows the proportion of the Named Executive Officer’s total target compensation “at risk”<br>that was actually paid out in fiscal 2021.
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The Committee is responsible for ensuring that CGI’s executive compensation policies do not expose the Company to significant risks such as providing incentives for senior executives to engage in business strategies that could yield compensation for the executives, while negatively impacting the interests of the Company.

The Committee considers that the Company’s executive compensation policies, including those that relate to the portion of compensation for which the achievement of performance measures apply, do not expose the Company to significant risks. The short-term and long-term incentive performance-based compensation components require that the Company’s profitability and growth objectives be met. Business strategies that impair the Company’s profitability or growth, whether in the short or long-term, will not result in payouts to senior executives or management.

All of the Company’s senior executives and directors are required to prepare and file reports disclosing their trading activities in the Company’s securities and the Company prepares and files the reports on their behalf. The Company therefore monitors all securities transactions by its senior executives and directors and also requires that they pre-clear their transactions with the Company.

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Incentive Plan Awards –Value Vested or Earned During the Year

The table below shows the value of option grants (referred to as option-based awards) and PSU awards (referred to as share-based awards) made to the Named Executive Officers that vested in fiscal 2021 as well as the value of non-equity incentive plan compensation earned by the Named Executive Officers in fiscal 2021.

Name	Option-based awards –<br>Value vested during<br>the year^(a)^<br>($)	Share-based awards –<br>Value vested during<br>the year^(b)^<br>($)	Non-equity incentive plan<br>compensation – Value earned<br>during<br>the year^(c)^<br>($)
Serge Godin<br><br><br>Founder and Executive Chairman of the Board	–	$9,191,948	$2,997,500
George D. Schindler^(d)^<br><br><br>President and Chief Executive Officer	$3,625,609	–	$3,392,850
François Boulanger<br><br><br>Executive Vice-President and Chief Financial Officer	$1,184,747	–	$ 941,215
Jean-Michel Baticle^(e)^<br><br><br>President and Chief Operating Officer	$ 758,482	–	$ 988,194
Timothy J.<br>Hurlebaus^(d)^<br> <br>President, United States Operations, Commercial and State Government	$ 398,893	–	$ 546,822
(a)	The option-based awards that vested during fiscal 2021 were the performance-based stock options granted to Messrs.<br>Schindler, Boulanger, Baticle and Hurlebaus during the 2017, 2018 and 2019 fiscal years that became eligible to vest and for which the exercise prices were $63.23 for fiscal 2017, $63.23 for fiscal 2018 and $85.62 for fiscal 2019. In fiscal 2021, one-quarter of such stock options eligible to vest for fiscal 2017, one-quarter of such stock options eligible to vest for fiscal 2018 and one quarter of such stock options<br>eligible to vest for fiscal 2019 vested on October 1, 2020 when the closing price of the Class A subordinate voting shares was $92.10.
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(b)	The share-based awards that vested during fiscal 2021 were the performance-based PSUs awarded to Mr. Godin for<br>fiscal 2017, 2018 and 2019 respectively. The proportion of performance-based vesting for these PSUs was 83.01%, 70.16% and 83.40% for the PSUs awarded in respect of fiscal 2017, 2018 and 2019 and these became eligible to vest after the end of each<br>such fiscal year. In fiscal 2021, one-quarter of such PSUs awarded for fiscal 2017, one-quarter of such PSUs awarded for fiscal 2018 and one quarter of such PSUs awarded<br>for fiscal 2019 vested on October 1, 2020
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(c)	This column shows the value of the annual payouts under the Profit Participation Plan received by the Named Executive<br>Officers in respect of fiscal 2021.
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(d)	Messrs. Schindler and Hurlebaus are paid in U.S. dollars. The amounts shown are in Canadian dollars converted on the<br>basis of the average exchange rate used in the Company’s Annual Audited Consolidated Financial Statements which was CAD1.2643, CAD1.3457 and CAD1.3270 for each U.S. dollar in fiscal 2021, 2020 and 2019 respectively. Please refer to the<br>disclosure concerning the foreign exchange rates used for financial reporting purposes on page 18 of the Management’s Discussion and Analysis for the years ended September 30, 2021 and 2020 and on page 18 of the Management’s<br>Discussion and Analysis for the fiscal years ended September 30, 2020 and 2019.
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(e)	Mr. Baticle is paid in euros. The amounts shown are in Canadian dollars converted on the basis of the average<br>exchange rate used in the Company’s Annual Audited Consolidated Financial Statements which was CAD1.5110, CAD1.5075 and CAD1.4970 for each euro in fiscal 2021, 2020 and 2019 respectively. Please refer to the disclosure concerning the foreign<br>exchange rates used for financial reporting purposes on page 18 of the Management’s Discussion and Analysis for the fiscal years ended September 30, 2021 and 2020 and on page 18 of the Management’s Discussion and Analysis for the<br>fiscal years ended September 30, 2020 and 2019.
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Performance Graph

The Class A subordinate voting shares are listed for trading on the TSX under the symbol GIB.A and on the NYSE under the symbol GIB. The following graph compares the annual variations in the cumulative total shareholder return on the Class A subordinate voting shares with the cumulative total shareholder return of the S&P/TSX and the S&P 500 stock indexes for the past five fiscal years of the Company.

Value of $100 invested on September 30, 2016

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Cumulative Total Shareholder Return


CGI	100.00	103.54	133.27	167.64	144.63	172.17
S&P/TSX	100.00	106.17	109.15	113.13	109.48	136.29
S&P 500	100.00	116.19	134.39	137.29	155.10	198.66

CGI’s executive compensation policy emphasizes incentive compensation linked to the success of the Company to ensure that the financial interests of the Company’s executives are closely aligned with those of shareholders. CGI’s management team, including the Named Executive Officers, are compensated on the basis of metrics that the Company considers to be fundamental, namely the Company’s growth and profitability. Over the five-year period between October 1, 2016 and September 30, 2021, 60.67% of the aggregate compensation of the reported Named Executive Officers was linked to the share price, and to returns to shareholders.

Since 1986, the year the Company became publicly listed, the price of CGI’s Class A subordinate voting shares increased on average by approximately 17.4% per year. Over the five-year period between October 1, 2016 and September 30, 2021, the price of the Company’s shares increased by more than 172% and the cumulative total shareholder return outperformed the S&P/TSX by 36%.

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The following graph illustrates the relationship between the net total compensation paid to the Company’s reported Named Executive Officers and cumulative total shareholder return over the period between October 1, 2016 and September 30, 2021.

Comparison of Net Total Compensation and Cumulative Total Shareholder Return

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The chart demonstrates the relationship between cumulative total shareholder return (as calculated on the performance graph earlier in this document) and the net total compensation of the Named Executive Officers. While cumulative total shareholder return and net total compensation have increased during this period, the net total compensation as a proportion of cumulative total shareholder return has generally decreased since fiscal 2016, as the net total compensation of the Named Executive Officers is linked to the performance of the Company but not directly to shareholder return.

The net aggregate compensation paid to the Named Executive Officers for fiscal 2021 was below the aggregate median of CGI’s comparator groups at approximately 93.00% of the median target total compensation of the comparator group.

Defined Contribution Pension Plan and DeferredCompensation Plan

Defined Contribution Pension Plan

In fiscal 2021, Messrs. George D. Schindler and Timothy J. Hurlebaus participated in a U.S. 401(k) Plan that is a benefit available to all eligible U.S. members. The following table sets out the amount contributed to the plan by the Company as well as the accumulated value of the plan at the beginning and the end of the Company’s fiscal year.

Name and title as at September 30, 2021	Accumulated value at start of<br>year^(a)^	Compensatory^(a)^	Accumulated value<br>at year-end^(a)^
George D. Schindler<br> <br>President and Chief Executive<br>Officer	$1,517,754	$3,161	$1,822,973
Timothy J. Hurlebaus<br><br><br>President, United States Operations,<br> <br>Commercial and State Government	$1,139,648	$3,161	$1,499,915
(a)	The amount shown is in Canadian dollars converted on the basis of the average exchange rate used in the Company’s<br>Annual Audited Consolidated Financial Statements which was CAD1.2643 for each U.S. dollar in fiscal 2021. Please refer to the disclosure concerning the foreign exchange rates used for financial reporting purposes on page 18 of the Management’s<br>Discussion and Analysis for the years ended September 30, 2021 and 2020.
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Deferred Compensation Plan

Messrs. George D. Schindler and Timothy J. Hurlebaus have the opportunity to participate in CGI’s Non-Qualified Deferred Compensation Plan which allows participants to defer annually between 5% and 75% of their base salary, and

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between 5% and 90% of their awards under the Profit Participation Plan. The plan allows participants to withdraw amounts during employment and to elect, upon retirement, to receive either a lump sum payment, or instalment payments for a period of up to ten years. Decisions concerning withdrawals may be made each year at the time that the participant determines the amount of compensation to be deferred for the year. The plan offers an array of mutual funds for investment from which the plan participant may choose. Participants may change their investment directions from time to time during the plan year. The mutual fund investments are subject to market gains and losses.

Compensation of Named Executive Officers

The Summary Compensation Table that follows shows detailed information on actual net total compensation, and total compensation in the form provided for by securities regulation, respectively, for Messrs. Serge Godin, George D. Schindler, François Boulanger, Jean-Michel Baticle and Timothy J. Hurlebaus for services rendered during the fiscal years ended September 30, 2021, 2020 and 2019.

The content of the table was adjusted to take into account an overstatement of the compensation awarded to CGI’s Named Executive Officers. Theoverstatement arises because securities regulation requires that, for stock option grants (referred to as option based awards) and for the PSU awards (referred to as share-based awards), the amount of compensation shown must be the grant date fairvalue. In the case of CGI’s compensation policies, all long-term incentive compensation, including all stock option grants and PSU awards, is subject to performance vesting conditions. As a portion of stock option granted and/or PSUs awardedfor fiscal 2021, 2020 and 2019 generally failed to become eligible to vest as a result of the degree of achievement of performance objectives, such portion of stock options granted and PSUs awarded has been forfeited and cancelled. Without theadjustment, the total compensation amount shown in this table would overstate the true total compensation received by the Company’s Named Executive Officers.

Summary Compensation Table

Name and<br>Principal Position<br><br><br>as at<br>September 30,<br>2021
Serge Godin Founder and Executive Chairman of the Board	2021	)
	2020	)
	2019	)
George D.<br>Schindler^(f)^ President and Chief Executive Officer	2021	)
	2020	)
	2019
François Boulanger Executive Vice-President and Chief<br>Financial Officer	2021	)
	2020	)
	2019
Jean-Michel<br>Baticle^(g)^ President and Chief Operating Officer	2021	)
	2020	)
	2019	)
Timothy J. Hurlebaus^(f)^ President, United States Operations, Commercial and State Government	2021	)
	2020	)
	2019	)

All values are in US Dollars.

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(a)	In fiscal 2021, 2020 and 2019, the award date fair value used for determining the number of PSUs awarded to the Named<br>Executive Officers as a component of their total compensation was established using the accounting fair value, resulting in an award date fair value of $90.38, $104.76 and $83.28 respectively.
(b)	The fair value of the stock option grants is the accounting fair value of the stock options determined in accordance<br>with IFRS 2 using the Black-Scholes stock option pricing model. The fair value of the stock options yielded a grant date fair value of $16.76 in fiscal 2019. The table below shows the assumptions used to determine the Black-Scholes values for fiscal<br>2019.
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	2019
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Dividend yield (%)		0.00
Expected volatility (%)		19.61
Risk-free interest rate (%)		2.28
Expected life (years)		4.00
(c)	This column shows the value received **** by the Named Executive Officers under the Profit Participation Plan as part<br>of the short-term incentive plan of the Company.
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(d)	This amount includes the Company’s contribution under CGI’s Share Purchase Plan, the contribution towards<br>health insurance benefits and related insurance coverage, but excludes the value of perquisites and other personal benefits which in the aggregate was less than $50,000 or 10% of the aggregate salary and bonus under the Profit Participation Plan for<br>the particular fiscal year and which is therefore not required to be disclosed.
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(e)	The vesting eligibility conditions for the PSUs awarded as part of the long-term incentive plan for the fiscal year<br>ended September 30, 2021 for Messrs. Godin, Schindler, Boulanger and Baticle was based solely on the Company’s financial performance. Based on such factors, 73.83% of the PSUs awarded to each of them became eligible to vest. In the case of<br>Mr. Hurlebaus, the performance-based vesting conditions of his PSUs depended both on the overall performance of the Company and on the performance of his Strategic Business Unit. Based on such factors, 99.00% of the PSUs awarded to<br>Mr. Hurlebaus became eligible to vest. The PSUs that did not become eligible to vest based on such performance conditions were forfeited and cancelled. The amount of the reduction shown is the dollar value required to be deducted from the fair<br>value of the awards to accurately reflect the net value of the PSU awards for the Named Executive Officers as part of their total compensation for the 2021 fiscal year.
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(f)	Messrs. Schindler and Hurlebaus are paid in U.S. dollars. The amounts shown (other than those for option-based awards)<br>are in Canadian dollars converted on the basis of the average exchange rate used in the Company’s Annual Audited Consolidated Financial Statements which was CAD1.2643, CAD1.3457 and CAD1.3270, for each U.S. dollar in fiscal 2021, 2020 and 2019<br>respectively. Please refer to the disclosure concerning the foreign exchange rates used for financial reporting purposes on page 18 of the Management’s Discussion and Analysis for the years ended September 30, 2021 and 2020 and on page 18<br>of the Management’s Discussion and Analysis for the fiscal years ended September 30, 2020 and 2019.
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(g)	Mr. Baticle is paid in euros. The amounts shown are in Canadian dollars converted on the basis of the average<br>exchange rate used in the Company’s Annual Audited Consolidated Financial Statements which was CAD1.5110, CAD1.5075 and CAD1.4970 for each euro in fiscal 2021, 2020 and 2019 respectively. Please refer to the disclosure concerning the foreign<br>exchange rates used for financial reporting purposes on page 18 of the Management’s Discussion and Analysis for the fiscal years ended September 30, 2021 and 2020 and on page 18 of the Management’s Discussion and Analysis for the<br>fiscal years ended September 30, 2020 and 2019.
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Key Features of CGI’s Long-Term Incentive Plans

Share Option Plan

The Share Option Plan is governed by the Board of Directors. The Committee makes recommendations to the Board of Directors in relation to the Share Option Plan and to grants of stock options, and is responsible for overseeing its administration. The Board of Directors has the ultimate and sole power and authority to grant stock options under the Share Option Plan and to interpret the terms and conditions of stock options that have been granted. The Board of Directors grants stock options by identifying the members, directors, and officers of eligible CGI entities who are to receive stock options, including the number of stock options, the subscription price, the stock option period and the vesting conditions. The determinations, designations, decisions and interpretations of the Board of Directors are binding and final. Management of the Company looks after the day-to-day administration of the Share Option Plan. The total number of Class A subordinate voting shares authorized to be issued under the Share Option Plan is 53,600,000, being 21.82% of the issued and outstanding Class A subordinate voting shares and Class B shares as at September 30, 2021. As at September 30, 2021, 8,012,077 stock options were outstanding under the Share Option Plan, representing approximately 3.26% of the issued and outstanding Class A subordinate voting shares and Class B shares, 5,781,579 of which were vested as of September 30, 2021. As at such date, a total of 15,139,513 stock options remained issuable under the Share Option Plan, representing approximately 6.16% of the issued and outstanding Class A subordinate voting shares and Class B shares.

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The maximum number of stock options that may be issued in the aggregate to any single individual under the Share Option Plan cannot exceed 5% of the total number of Class A subordinate voting shares and Class B shares issued and outstanding at the time of the grant. The number of Class A subordinate voting shares issuable to insiders in the aggregate, at any time, pursuant to the Share Option Plan and any other securities-based compensation arrangement cannot exceed 10% of the Class A subordinate voting shares and Class B shares issued and outstanding. The number of Class A subordinate voting shares issued to insiders within any one-year period pursuant to the Share Option Plan and any other securities-based compensation arrangement cannot exceed 10% of the Class A subordinate voting shares and Class B shares issued and outstanding.

The following table discloses the burn rate for each of the three most recently completed fiscal years for the Share Option Plan of the Company:

Burn Rate	2021			2020			2019
Total number of stock options granted under the Share Option Plan during the applicable<br>fiscal year, divided by the weighted average number of Class A subordinate voting shares and Class B shares outstanding for the applicable fiscal year.		0.39	%		0.35	%		0.66	%

Under the Share Option Plan, the Board of Directors may at any time amend, suspend or terminate the Share Option Plan, in whole or in part, subject to obtaining any required approval from the TSX, the Company’s shareholders or other regulatory authorities. For more information concerning the rules to amend the Share Option Plan, please refer to the heading Amendments to Share Option Plan later in this document. Stock options may not be assigned, pledged or otherwise encumbered other than by will or in accordance with the laws relating to successions.

Under the Share Option Plan, the Board of Directors, on the recommendation of the Committee, may grant to eligible participants stock options to purchase Class A subordinate voting shares. The exercise price of the stock options granted is determined by the Board of Directors and cannot be lower than the closing price of the Class A subordinate voting shares on the TSX on the trading day immediately preceding the day on which the stock options are granted. The Board of Directors also determines the applicable stock option period and vesting rules.

Employees, officers, and directors of the Company may receive stock options under the Share Option Plan. The Board of Directors made the decision to cease granting stock options to outside directors effective October 1, 2015.

Stock options that have been granted under the Share Option Plan cease to be exercisable and all rights under those stock options lapse upon the expiry of their term, which cannot exceed ten years from their date of grant.

Upon resignation or termination, stock options that have not vested are forfeited and cancelled, and vested stock options must be exercised during a 90-day period following termination or resignation.

Retiring members who meet the eligibility criteria set out in the Share Option Plan, directors who leave the Board of Directors and the estates of deceased stock option holders benefit from the automatic vesting of stock options that have become eligible to vest in accordance with performance vesting rules, but that have yet to vest due to time-based vesting. Those stock options must be exercised within 90 days in the case of retirement or 180 days if the stock option holder dies, subject to the extension of the exercise periods explained in more detail below. The Board of Directors, on the recommendation of the Committee, has the discretion to vary these periods and to accelerate the vesting period, provided that the maximum term for any stock option is ten years from the time it is granted.

The Company does not provide any financial assistance to participants under the Share Option Plan.

Blackout Periods

In keeping with CGI’s Insider Trading and Blackout Periods Policy, stock options may not be exercised by insiders when a trading blackout period is in effect. If the date on which a stock option expires occurs during a blackout period or within ten business days after the last day of a blackout period, the date of expiry of the stock option will be the tenth business day following the termination of the blackout period.

Extensions for Length of Service

Retiring members who meet the eligibility criteria set out in the Share Option Plan, directors and officers, as well as the estates of deceased stock option holders earn one day of extension for every three days of service to the Company, up to

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a maximum extension period of three years. The extension period is earned pro-rata day by day during the stock option holder’s service to the Company. The extension period for length of service cannot extend the life of a stock option beyond the period of time determined by the Board of Directors as the stock option term and, which may not exceed ten years from the date of grant.

Amendments to Share Option Plan

The Board of Directors, on the recommendation of the Committee, may amend, suspend or terminate the Share Option Plan, or amend any term of an issued and outstanding stock option provided that no amendment, suspension or termination may be made without:

•	obtaining approval of the shareholders of the Company, except when approval is not required under the terms of the Share<br>Option Plan, as explained in more detail below;
•	obtaining any required approval of any applicable regulatory authority or stock exchange; and
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•	in the case of issued and outstanding stock options, obtaining the consent or, subject to regulatory approval, the deemed<br>consent of the concerned optionee in the event that the amendment materially prejudices the optionee’s rights.
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Shareholder approval is not required with respect to the following amendments, in as much as the amendment is in accordance with applicable regulatory requirements:

•	changing the eligibility for, and limitations on, participation in the Share Option Plan;
•	modifying the periods during which stock options may be exercised, subject to (i) the stock option period<br>terminating on or before the tenth anniversary of the date of the grant of the stock option and subject to the effect of blackout periods, and (ii) a maximum stock option exercise period extension of three years;
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•	changing the terms on which stock options may be granted and exercised including, without limitation, the provisions<br>relating to the price at which shares may be purchased under the Share Option Plan, to the extent that the subscription price is not reduced, vesting, expiry, assignment and the adjustments to be made in the event of certain changes such as stock<br>splits that affect all shareholders;
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•	making amendments that are necessary to comply with applicable law or the requirements of any applicable regulatory<br>authority or stock exchange;
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•	correcting or rectifying any ambiguity, defective provision, error or omission in the Share Option Plan; and<br>
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•	changing the provisions of the Share Option Plan that relate to its administration.
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Finally, any amendment that would reduce the subscription price of an issued and outstanding stock option, lead to a significant or unreasonable dilution of the issued and outstanding shares, extend the expiry date of stock options held by insiders beyond the exercise periods contemplated under the Share Option Plan, or provide additional material benefits to insiders of the Company, requires shareholder approval.

Equity Compensation Plan Information as at September 30, 2021

The following table shows the total number of shares to be issued upon the exercise of outstanding stock options under all of CGI’s equity-based compensation plans, their weighted average exercise price, and the number of shares available for future issuance.

Plan Category	Number of Class A subordinate<br>voting shares to<br>be issued<br>upon the exercise of<br>outstanding stock options<br>(#)	Weighted average exercise price<br>of outstanding<br>stock options<br>($)	Number of Class A subordinate<br>voting shares<br>remaining<br>available for future issuance<br>under equity compensation<br>plans (excluding shares<br>issuable under outstanding<br>stock options)<br>(#)
Equity compensation plans approved by shareholders	8,012,077	64.49	15,139,513
Equity compensation plans not approved by shareholders	–	–	–
Total	8,012,077	64.49	15,139,513
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Performance Share Unit Plans

The PSU Plans are governed by the Board of Directors and the Committee may make recommendations to the Board of Directors in relation to the PSU Plans and to awards of PSUs. The Board of Directors has the ultimate and sole power and authority to award PSUs under the PSU Plans and to interpret the terms and conditions of PSUs that have been awarded.

Under the PSU Plans, the Board of Directors may at any time amend, suspend or terminate the PSU Plans, in whole or in part, or amend any term of any issued and outstanding awards including the earning, vesting and expiry of an outstanding award. PSUs may not be assigned, pledged or otherwise encumbered other than by will or in accordance with the laws relating to successions.

Under the PSU Plans, the Board of Directors may award PSUs to executives and to other eligible participants. Each PSU entitles the participant to receive one Class A subordinate voting share, subject to the achievement of performance and time vesting conditions.

Following an award of PSUs, the applicable plan trustee purchases in the open market the shares required to be delivered to the participants on settlement. The applicable plan trustee holds the shares in trust for the purposes of the PSU Plans.

Subject to trading blackout periods, PSUs are settled within 30 days of vesting. On the settlement date, participants receive from the applicable plan trustee a number of Class A subordinate voting shares equal to the number of PSUs that have vested, less any Class A subordinate voting shares sold by the plan trustee in the open market to satisfy tax obligations. Participants under the 2014 PSU Plan may elect to defer the settlement of PSUs to a later date not later than the expiry date of the PSUs.

Upon resignation or termination, PSUs that have not become eligible to vest are forfeited and cancelled, and PSUs that have become eligible to vest are settled on the date of resignation or termination.

Participants who retire, and meet the eligibility criteria set out in the PSU Plans, and the estates of deceased participants benefit from the automatic vesting of PSUs that have become eligible to vest in accordance with performance vesting conditions, but that have yet to vest due to time-based vesting. Those PSUs are settled on the date of retirement or death.

PSUs expire on the business day preceding December 31 of the third calendar year following the end of the fiscal year during which the PSU award is made. On the expiry date, all remaining PSUs in the participant’s account that are eligible to vest but that have not yet vested are automatically vested and settled.

The Company does not provide any financial assistance to participants under the PSU Plans.

Blackout Periods

In keeping with CGI’s Insider Trading and Blackout Periods Policy, there cannot be any settlement of PSUs under the PSU Plans when a trading blackout period is in effect. If the date of settlement of a PSU falls during a blackout period, such date will be postponed until the first business day following the termination of the blackout period or the expiry of any regulatory notice period, as applicable.

Termination Benefits

The Named Executive Officers do not benefit from special contractual rights upon employment termination. They are therefore entitled to the same rights as those available to all members under the laws applicable to their employment. The provisions that apply to termination of employment under the Share Option Plan and under the PSU Plans apply in the same way to all participants under those plans and they are described above under the headings Share Option Plan and Performance Share Unit Plans.

Compensation of Directors

Board of Directors and Standing Committee Fees

For fiscal 2021, Ms. Julie Godin and Messrs. Serge Godin, André Imbeau and George D. Schindler were not compensated for their role as directors of the Company.

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The compensation paid to the outside directors changed to a flat fee structure on October 1, 2015. The Board of Directors also decided to cease granting stock options to outside directors as of that date. The following table sets out the elements of the compensation paid to outside directors for the year ended September 30, 2021:

Component	Amount
Board Retainer (includes membership in Committees)	$	225,000
Lead Director or Committee Chair Retainer	$	25,000

In support of the measures taken to mitigate the financial impact of COVID-19 pandemic, the outside directors agreed to forego a significant portion of their compensation for the period of time from March 30, 2020 to December 31, 2020.

Following a recommendation by the Human Resources Committee based on a comparison of general market compensation as well as within the companies forming CGI’s comparator group, the Board of Directors decided to change the compensation paid to outside directors effective as of October 1, 2021. The following table sets out the new elements of outside director compensation:

Component	Amount
Board Retainer (includes membership in Committees)	$	225,000
Lead Director	$	65,000
Committee Chair Retainer	$	35,000

Directors must receive at least half of their Board retainer in DSUs, subject to the exceptions listed below. The remaining half of the Board retainer and the other retainers may also be payable in DSUs at the election of the director. A director can elect to receive the entire amount of the Board retainer in cash instead of in DSUs if (i) the director is not a resident of Canada for income tax purposes, (ii) the director purchased in the open market the same number of Class A subordinate voting shares he or she would have received in the form of DSUs, or (iii) the director is otherwise exempted by the Board of Directors. Directors who must travel significant distances to attend meetings of the Board of Directors and its standing committees also receive long distance travel allowances.

For the year ended September 30, 2021, the compensation paid to directors was as follows:

Directors’ Compensation Table

Name^(a)^	Cash Fees(b)()	Share-BasedAwards(c) ()	All othercompensation(d)()	Total()
Alain Bouchard
George A. Cope
Paule Doré
Timothy J. Hearn^(e)^
Gilles Labbé
Michael B. Pedersen
Stephen S. Poloz
Mary G. Powell^(f)^
Alison C. Reed^(f)^
Michael E. Roach
Kathy N. Waller^(f)^
Joakim Westh^(f)^
Frank Witter^(f)(g)^

All values are in US Dollars.

(a)

Ms. Godin and Messrs. Godin, Imbeau and Schindler were not compensated for their role as directors of the Company. Ms. Godin received $2,495,747 in fiscal 2021 as compensation in respect of her services as an executive officer of the Company and Mr. Imbeau received $586,020 in fiscal 2021 as compensation in respect of his services as an officer of the Company. Please refer to the Summary Compensation Table earlier in this document for a summary of Messrs. Godin and Schindler’s fiscal 2021 compensation.

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(b)	This column shows the retainer fees paid in cash to the directors for fiscal 2021. Messrs. Bouchard, Cope, Labbé<br>and Pedersen elected to receive 100% of their total annual retainers in the form of DSUs. Mses. Powell, Reed and Waller and Messrs. Westh and Witter were exempted from the requirement to receive 50% of their Board retainers in DSUs as they are non-residents of Canada for income tax purposes.
(c)	This column shows the value of the retainer fees paid in DSUs to the directors for fiscal 2021.
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(d)	The amounts shown as “All other compensation” are in respect of long distance travel allowances.<br>
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(e)	Mr. Hearn is not seeking reelection on the Board of Directors and will therefore cease to be a director, the Lead<br>Director, and a member of each of the Human Resources Committee and of the Corporate Governance Committee on February 2, 2022.
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(f)	Messrs. Westh and Witter and Mses. Powell, Reed and Waller are paid in U.S. dollars at par, based on the same fee<br>arrangement as other outside directors. The amounts shown are in Canadian dollars converted on the basis of the average exchange rate used to present expense information in the Company’s Annual Audited Consolidated Financial Statements which<br>was CAD1.2643 for each U.S. dollar for fiscal 2021. Please refer to the disclosure concerning the foreign exchange rates used for financial reporting purposes on page 18 of the Management’s Discussion and Analysis for the years ended<br>September 30, 2021 and 2020.
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(g)	Mr. Witter joined the Board of Directors on July 1, 2021. Mr. Witter was appointed as member of the<br>Audit and Risk Management Committee on July 27, 2021.
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Deferred Stock Units Plan and Deferred Stock UnitsGranted to Directors

CGI’s deferred stock unit plan for members of the Board of Directors (the “DSU Plan”) provides non-cash compensation to directors. The DSU Plan is governed by the Board of Directors and the Committee may make recommendations to the Board of Directors in relation to the DSU Plan and to awards of DSUs. The Board of Directors has the ultimate and sole power and authority to award DSUs under the DSU Plan and to interpret the terms and conditions of DSUs that have been awarded. Management of the Company is responsible for the day-to-day administration of the DSU Plan.

The Board of Directors may at any time amend or terminate the DSU Plan, including to suspend or limit the right of directors to participate in the DSU Plan. DSUs may not be assigned, sold or otherwise disposed of, except by will or in accordance with the laws relating to successions.

The number of DSUs credited to a director on each retainer payment date is equal to the amount of the retainer due to be paid in DSUs divided by the closing price of the Class A subordinate voting shares on the TSX on the day immediately preceding the retainer payment date. Once credited, the value of the DSUs credited to a director’s DSU account is determined based on the market price of the Class A subordinate voting shares.

The value of DSUs credited to the director’s account is payable only after the director has ceased to be a member of the Board of Directors. The amount paid at the time of redemption corresponds to the number of DSUs accumulated by the member multiplied by the closing price of the Class A subordinate voting shares on the payment date. The amount is paid in cash and is subject to applicable withholding taxes.

Stock Options Held by Directors

Up until fiscal 2015, members of the Board of Directors were entitled to grants of stock options under the Share Option Plan. Each such stock option was issued with a ten-year exercise period and a four-year vesting period and the exercise price of all options granted to directors was equal to the closing price of the Class A subordinate voting shares on the TSX on the trading day immediately preceding the date of the grant.

See the table in Appendix B for an overview of all outstanding stock options held as at September 30, 2021 by the members of the Board of Directors who are not Named Executive Officers as well as the in-the-money value of such stock options and the aggregate value of outstanding and vested DSUs held in respect of their services for completed fiscal years. For members of the Board of Directors who are Named Executive Officers, please refer to the table in Appendix A.

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Incentive Plan Awards –Value Vested or Earned During the Year

The table below shows the value of stock option grants (referred to as option-based awards) and DSU awards (referred to as share-based awards) made to members of the Board of Directors who are not Named Executive Officers that vested in fiscal 2021. Outside directors did not receive any non-equity incentive plan compensation in fiscal 2021.

Name^(a)^	Option-based awards – Valuevested during the year(b)()	Share-based awards – Valuevested during the year(c)()	Non-equity incentive plancompensation – Valueearned during the year()
Alain Bouchard
George A. Cope
Paule Doré
Julie Godin
Timothy J. Hearn^(d)^
André Imbeau
Gilles Labbé
Michael B. Pedersen
Stephen S. Poloz
Mary G. Powell^(e)^
Alison C. Reed^(e)^
Michael E. Roach
Kathy N. Waller^(e)^
Joakim Westh^(e)^
Frank Witter^(e)(f)^

All values are in US Dollars.

(a)	The value vested or earned during fiscal 2021 for Messrs. Godin and Schindler are set out in the table titled Incentive Plan Awards – Value Vested During the Year under the heading Compensation of Named Executive Officers earlier in this document as they are Named Executive Officers.<br>
(b)	This column shows the value of stock options held by Ms. Godin and Mr. Imbeau that vested during fiscal 2021.<br>The values indicated in the table above relate to vested stock options they received until the end of fiscal 2021 as compensation for their services as an executive officer and an officer of the Company, respectively. The exercise prices for the<br>stock options that vested during fiscal 2021 were as follows: (i) $63.23 for grants made in each of fiscal 2017 and fiscal 2018 to Ms. Godin and Mr. Imbeau, (ii) $85.62 for grants made in fiscal 2019 to Ms. Godin and Mr. Imbeau<br>and (iii) $110.73 for grants made in fiscal 2020 to Mr. Imbeau. Among the stock options that became eligible to vest, one quarter of the stock options granted for fiscal 2017, one quarter of the stock options granted for fiscal 2018 and one<br>quarter of the stock options granted for fiscal 2019 vested on October 1, 2020 when the closing price of the shares was $92.10, and one quarter of the stock options granted for fiscal 2020 vested on November 10, 2020 when the closing price<br>for the shares was $89.64.
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(c)	The share-based awards are DSUs. See the heading Deferred Stock Units Plan and Deferred StockUnits Granted to Directors earlier in this document for a description of DSUs granted to directors.
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(d)	Mr. Hearn is not seeking reelection on the Board of Directors and will therefore cease to be a director, the Lead<br>Director and a member of each of the and Human Resources Committee and of the Corporate Governance Committee on February 2, 2022.
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(e)	Messrs. Westh and Witter and Mses. Powell, Reed and Waller are paid in U.S. dollars at par, based on the same fee<br>arrangement as other outside directors. The amounts shown are in Canadian dollars converted on the basis of the average exchange rate used to present expense information in the Company’s Annual Audited Consolidated Financial Statements which<br>was CAD1.2643 for each U.S. dollar for fiscal 2021. Please refer to the disclosure concerning the foreign exchange rates used for financial reporting purposes on page 18 of the Management’s Discussion and Analysis for the years ended<br>September 30, 2021 and 2020.
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(f)	Mr. Witter joined the Board of Directors on July 1, 2021. Mr. Witter was appointed as member of the<br>Audit and Risk Management Committee on July 27, 2021.
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Additional Disclosure relating to Directors and NamedExecutive Officers

As at December 7, 2021, no directors, Named Executive Officers, former directors or former senior officers of the Company were indebted to the Company.

To the best knowledge of the Company and based upon information provided by each nominee director, no such nominee is, as at the date of this Management Proxy Circular, or has been within ten years before the date of this Management Proxy Circular a director or executive officer of any company (including the Company) that, while such person was acting in that capacity or within a year of that person ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangements or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets.

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Report of the Corporate Governance Committee

The Committee has responsibility for all corporate governance matters including making recommendations to the Board of Directors in relation to the composition of the Board of Directors and its standing committees. The Committee also administers the self-assessment process for the Board of Directors, its standing committees and individual directors.

The Committee is composed of Ms. Paule Doré, Chair of the Committee, Ms. Mary G. Powell, Mr. George A. Cope and Mr. Timothy J. Hearn, Lead Director, all of whom are independent directors. The Committee held four regular meetings during fiscal 2021.

The role and responsibilities of the Chair of the Committee are described under the heading Role and Responsibilities of the Lead Director and Standing Committee Chairs later in this document.

The role and responsibilities of the Committee are contained in the Committee’s charter, which is incorporated by reference in this Management Proxy Circular (see the heading Mandate, Structure and Composition of CGI’s Board of Directors). The Committee’s charter is available on CGI’s website at www.cgi.com. The role and responsibilities of the Committee include:

•	developing the Company’s approach to governance issues and the Company’s response to corporate governance<br>requirements and guidelines;
•	reviewing the composition and contribution of the Board of Directors, its standing committees and members, and<br>recommending Board nominees;
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•	overseeing the orientation and continuing education program for directors;
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•	reviewing the Company’s policies and processes related to the Company’s purpose as an organization, which is to<br>seek the best equilibrium between its three stakeholders and the communities in which its members live and work;
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•	carrying out the annual Board of Directors self-assessment process; and
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•	helping to maintain an effective interaction between the Board of Directors and management.
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Corporate Governance Practices

Adherence to high standards of corporate governance is a hallmark of the way CGI conducts its business. The disclosure that follows sets out CGI’s corporate governance practices. CGI’s corporate governance practices conform to those followed by U.S. domestic companies under the NYSE listing standards.

CGI’s Shareholders

CGI’s shareholders are the first and most important element in the Company’s governance structures and processes. At each Annual General Meeting of Shareholders, the Company’s shareholders elect the members of the Company’s Board of Directors and give them a mandate to manage and oversee the management of the Company’s affairs for the coming year. Shareholders have the option of withholding their votes for individual directors, should they wish to do so.

In the normal course of operations, certain corporate actions which may be material to CGI are initiated from time to time by the Company’s senior management and, at the appropriate time, are submitted to CGI’s Board of Directors for consideration and approval. When appropriate, such matters are also submitted for consideration and approval by CGI’s shareholders. All such approvals are sought in accordance with the charters of the Board of Directors and its standing committees, CGI’s corporate governance practices and applicable corporate and securities legislation and regulations. Mr. Serge Godin, CGI’s Founder and Executive Chairman of the Board, is a director of CGI and, as at December 7, 2021, beneficially owned, directly or indirectly, or exercised control or direction over, shares of CGI representing approximately 53.15% of the votes attached to all of the Company’s outstanding voting shares.

As with CGI’s other stakeholders, its clients and its members, the Company constantly solicits feedback from shareholders as well as from the investment community. This feedback is an integral input to our strategic planning

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process and assists the Company to continuously improve its investor relations program, financial disclosure, and to compare its performance objectively against other publicly traded companies. Several years ago, the Company adopted the Shareholder Partnership Management Framework (“SPMF”) which describes the management of its information and relationship with its investors beyond the prescribed activities associated with corporate governance, transparency and the disclosure of results. The SPMF structures the processes and information flows between CGI and its shareholders as well as the investment community, including both buy-side (institutional investors) and sell-side (investment dealers) research analysts. Following the SPMF assessment, suggestions for improvement received are acted upon as a means of assuring continuous improvement. The Company obtained ISO 9001 certification for the application of the SPMF in its operations and for the management of its relationship with its shareholders.

In addition to the SPMF process, any shareholder of CGI who wishes to contact CGI’s independent directors directly may do so by e-mail sent to the Lead Director at lead_director@cgi.com or by using the contact page for the Lead Director on CGI’s website at www.cgi.com.

Shareholder Satisfaction Assessment Program

In fiscal 2019, the Company added a new Shareholder Satisfaction Assessment Program (“SSAP”) questionnaire to its SPMF processes. The SSAP questionnaire solicits direct feedback from shareholders on key corporate governance practices, including in respect of executive compensation, and requests shareholder ratings of governance practices on a 10-point scale. With respect to institutional investors, the SSAP is provided directly to the individuals responsible for the investment in the Company and not to proxy departments or external advisors who are less likely to have a complete understanding of the investment in CGI. The SSAP was provided to shareholders and other investors with whom SPMF meetings were held in fiscal 2021. The average SSAP score of the Company in fiscal 2021 was 8.2/10 and few concerns were raised by shareholders or investor with respect to the Company’s corporate governance practices, including its executive compensation practices. The Company is committed to maintaining an open and transparent dialogue with its shareholders and addressing their concerns with respect to executive compensation. The Company believes that the measures in place are more meaningful than a simple binary advisory vote.

The Company will continue to use the SSAP questionnaire in fiscal 2022 to solicit direct feedback on its corporate governance practices with a view to tracking shareholder feedback over time on key corporate governance issues, such as the appropriateness of executive compensation. Shareholders of CGI who wish to participate in the SSAP process directly may contact CGI’s Investor Relations department by sending an e-mail to ir@cgi.com or as follows:

Investor Relations

CGI Inc.

1350 René-Lévesque Boulevard West

15th Floor

Montréal, Quebec

Canada

H3G 1T4

Tel.: +1-514-841-3200

Corporate Social Responsibility

At CGI, we are committed to contributing to the development of an inclusive, collaborative and sustainable world. Corporate social responsibility (“CSR”) is one of our long-held core values and one of our strategic goals is to be recognized by our stakeholders as an engaged and responsible corporate citizen within our communities. Our CSR commitment motivates us to help our clients satisfy the needs of their customers and citizens, enhance the lives and careers of our professionals and generate superior value for our shareholders through socially and environmentally sustainable and ethical business strategies and practices. In 2021, we accelerated our CSR engagement through various key initiatives, including the release of our global CSR report, and by committing to achieve net-zero carbon emissions by 2030 with respect to carbon emissions under our direct and indirect control as defined by Scope 1, 2 and 3 of the Greenhouse Gas Protocol.

Our CSR commitment engages the Company to:

•	partner with our clients in developing environmentally sustainable solutions and collectively supporting the communities<br>where we live and work;
•	improve the environment through sustainable operating practices, community service activities and green IT offerings;<br>
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•	provide our professionals with health and wellbeing programs that positively influence their well-being and satisfaction;<br>
•	operate ethically through strong Codes of Ethics and strong corporate governance;
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•	ensure responsible supply chain management; and
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•	offer an ownership program (which both creates wealth within local communities, and provides every member the same rights<br>and opportunities as all shareholders).
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Our Company and CGI professionals are actively engaged in the communities by prioritizing partnerships with clients, and also by collaborating with educational institutions and other local organizations, on three global priorities:

People priority: We champion digital inclusion for all, taking actions locally to improve access to technology and business education andmentoring in order to ensure everyone can be successful in a digital society as citizens or IT professionals.

CGI creates diverse, equitable and inclusive learning opportunities by reducing barriers for underrepresented groups in the technology field. These activities help attract a diverse pool of talent to start and build a career at CGI, creating an environment of new and unique perspectives. The global pandemic crisis changed the way students interact with our Science, Technology, Engineering and Math (STEM) events and CGI adapted by launching STEM@CGI At Home. This virtual program helps parents, caregivers and educators across communities to continue teaching STEM to students in a home environment. Our educational programs are active in all our geographies and we have deployed, STEM@CGI broadly during 2021. CGI was the first company in the IT sector to create its own coding school, U’DEV. Students of the U’DEV program enter into a work-study with CGI where they receive a recognized degree and CGI recruits qualified developers. After four years of activity, this program counts seven campuses in France, one in Morocco, and more than 500 graduated students. Our strategic goal of solving the shortage of developers leads to an engaged environment that promotes diversity without discrimination, resulting in actively and responsibly sharing our social values with our clients.

Communities priority: We commit to positively contribute to society by leveraging our IT and businessexpertise through social impact projects, local economic growth initiatives, and by actively supporting local Business Unit pro bono engagements.

CGI has a long history of supporting communities. We have always encouraged our members to get involved and volunteer their skills and experience for the good of the overall well-being of the communities in which we and our clients are present by using CGI’s technology and business consulting expertise to deliver pro bono IT work for local charities and community organizations. Our commitment to making a difference in our communities is brought to life through our global Dream Connectors program. Created in 2016 for the 40th anniversary of the Company, the program enables members to propose projects that connect our resources to local needs. In fiscal 2021, our members implemented over 100 Dream Connectors initiatives that supported local communities in response to the COVID-19 pandemic.

In fiscal 2021, CGI developed a digital employee volunteering platform to support communities in need. The platform is available to all of our professionals in France, Spain, Portugal, Luxembourg, and Morocco, and will be deployed in other geographies during fiscal 2022. Through this platform, CGI offers over 350 remote and in-person volunteering opportunities including supporting people with disabilities in their professional lives, climate change projects, running digital technology workshops, collecting necessities like food and clothes for non-profit organizations, and offering learning support to students. To date, the platform has empowered 1,459 of our professionals to initiate over 100 missions with more than 1,200 volunteering hours completed.

Climate priority: We demonstrate our commitment to an environmentally sustainable world through projects delivered incollaboration with clients, and through our operating practices, supply chain management, and community service activities.

CGI combines our in-depth knowledge and end-to-end services to help our clients manage sustainability challenges and opportunities. These solutions seek to reduce environmental impact and energy costs while improving our clients’ regulatory compliance and the well-being of their employees, citizens and customers. Our reduction in carbon emissions is driven by many of our departments including facilities, data center management, procurement, and our members, all working together to embed their actions and initiatives into the way we operate.

As a managed IT services provider, infrastructure services and data centers are the core of our operations. Our continuous effort to increase renewable energy usage and to implement energy efficiency has dramatically reduced our energy consumption and carbon emissions from data centers by 50% compared to our F2014 baseline emissions.

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CGI has qualified for inclusion within top indices that cover the world’s most sustainable companies, including the Dow Jones Sustainability Indices for the past nine years and, the FTSE4 Good Index Series for over a decade. In fiscal 2021, for the fourth year in a row, CGI was recognized for its CSR commitments to the environment by EcoVadis. Receiving the Gold standard positions CGI in the top 5% of companies across all industries. The Company also responds annually to the Carbon Disclosure Project disclosing its progress in furthering steps to effectively reduce emissions to promote advanced environmental stewardship.

In March 2020, CGI joined the United Nations Global Compact with a commitment to mainstream its ten universal principles in the areas of human rights, labor, environment and anti-corruption in CGI’s strategy, culture and day-to-day operations. We seek to advance and engage in the United Nations’ broader priorities, particularly the Sustainable Development Goals.

In addition, CGI’s operations in the majority of European countries in which it operates are ISO 14001 certified for effective environmental management systems (France, UK, Sweden, Finland, Netherlands, Portugal, Spain, Czech Republic and Slovakia). In doing so, these operations are reporting key performance metrics and local initiatives which contribute to the continuous improvement of the economic, social and environmental well-being of the communities in which they are based.

You can read more about CGI’s corporate social responsibility and environmental, social and governance initiatives on CGI’s website at www.cgi.com/en/corporate-social-responsibility.

Diversity

The notion of diversity is a core element to CGI’s values and it is included in its Board of Directors’ and standing committees’ charters and related work programs. The mandates of the Human Resources Committee and Corporate Governance Committee specifically detail the criteria to be considered for board candidates and officer appointments to support diversity among the Board of Directors and the Company’s executives. Nominees proposed to join the Board of Directors or the executive team are selected after considering, among other things, the persons’ skills and expertise required to achieve stewardship and management of CGI, their knowledge of the vertical markets in which the Company operates, their operational and financial literacy, as well as the diversity of their background, including gender, ethnicity, age, experience and geographical representation.

The work program of the Corporate Governance Committee also provides for an annual review of the measures applied by the Company to promote diversity, their effectiveness, and the annual and cumulative progress made in achieving their objectives, which results are then reviewed annually by the Board of Directors. The charters of the Board of Directors and of the Corporate Governance Committee include the Company’s objective of having a Board of Directors composed of at least 30% of women. CGI is very proud to have met this objective and we will continue to monitor our progress.

The Corporate Governance Committee and the Board of Directors continue to believe in the importance of balancing all eligibility criteria, including appropriate competencies, skills, industry knowledge, financial experience and personal qualities of candidates, as well as the diversity of their background (including gender, ethnicity, age, experience and geographical representation), when considering director candidates and officer appointments. CGI’s success is due in large measure to the Company’s experience and expertise in the vertical markets in which it operates. The selection criteria for CGI’s Board of Directors and executive officers recognize this important factor and are designed to ensure that the Company, while supporting diversity objectives, continues to have the subject matter experts on the Board of Directors and among its executives who can effectively provide experience, expertise and business and operational insight into each of the vertical markets in which the Company operates.

Majority Voting Policy

The Company has adopted a Majority Voting Policy for Directors (the “Majority Voting Policy”) to ensure that the Board of Directors of the Company remains composed of directors elected by a majority of the votes cast in favour of their election.

In an uncontested election of directors of the Company, a nominee for election to the Board of Directors must immediately offer to resign by tendering a resignation letter to the Chairman of the Board of Directors following the shareholders meeting at which the election took place if the number of votes that have been withheld from the director is equal to or greater than the number of votes cast in favour of the director. The Committee will meet promptly following the receipt of the resignation to consider the director’s offer to resign.

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The Committee will recommend to the Board of Directors that the resignation be accepted unless the Committee determines that exceptional circumstances exist that justify the Committee’s recommendation that the resignation not be accepted. The Board of Directors will act on the Committee’s recommendation within 90 days following the shareholders’ meeting at which the director was elected. In deciding whether to accept the recommendation of the Committee, the Board of Directors will consider the factors examined by the Committee and may in addition consider any information it determines in its sole discretion to be relevant to its decision. The Board of Directors will accept the resignation unless it determines that exceptional circumstances justify otherwise. Following its decision, the Board of Directors will issue a press release concerning its decision, and stating the reasons for not accepting the resignation if that is the case, a copy of which shall be promptly provided to the TSX.

A director who is required to offer a resignation in accordance with the Majority Voting Policy shall not participate in any manner in the meeting or meetings of the Committee and of the Board of Directors convened to consider the resignation. A director who fails to offer to resign in accordance with the Majority Voting Policy will not be re-nominated by the Board of Directors for election by the shareholders.

Clawback Policy

The Company has adopted an incentive compensation clawback policy (the “Clawback Policy”) which allows the Board of Directors to require the reimbursement of short-term and long-term incentive compensation received by certain officers and other employees, if such compensation was paid in whole or in part as a result of gross negligence, intentional misconduct, theft, embezzlement, fraud or other serious misconduct, or in the event of a restatement of the Company’s annual or interim financial statements resulting from material non-compliance with any financial reporting requirements under applicable laws, and in circumstances in which the Board of Directors determines that such individual would not have been entitled to such compensation had a restatement not been required.

The Clawback Policy applies to any officer of the Company and any other individual who may be designated from time to time by the Board of Directors and includes compensation under any short-term or long-term incentive plan, including the Profit Participation Plan, the Share Option Plan, the PSU Plans and any other contingent compensation. Recovery under the Clawback Policy is limited to compensation paid, granted or awarded to, or received or earned by, or vested in favour of any covered leader in the then current fiscal year and the immediately preceding three financial years and may be implemented through various forms, including direct reimbursement, deduction from salary or future payments, grants or awards of incentive compensation, or cancellation or forfeiture of vested or unvested stock options, PSUs or any other incentive awards held by the individual.

Insider Trading and Blackout Periods Policy

The Company has adopted an Insider Trading and Blackout Periods Policy which is designed to prevent improper trading in the securities of CGI and the improper communication of privileged or material information with respect to CGI that has not been generally disclosed, including compliance with insider trading and tipping rules. Under the policy, those who normally have access to material information that has not been generally disclosed may only trade in CGI securities within the period beginning on the third business day following the release of CGI’s quarterly financial results and fiscal year-end results and ending at the close of business on the fourteenth calendar day preceding the end of the following fiscal quarter. Discretionary blackout periods and restrictions on trading in securities applicable to certain designated members may also be prescribed from time to time for such period of time as is deemed necessary as a result of special circumstances relating to the Company. The policy also provides processes for the pre-clearance of trades in CGI securities and for reporting by the reporting insiders of the Company.

The Insider Trading and Blackout Periods Policy contains anti-hedging restrictions to ensure that senior executives, including the Chief Executive Officer, are restricted from engaging in short sales, transactions in derivatives in respect of Company’s securities or any other hedging or equity monetization transaction in which the individual’s economic interest and risk exposure in Company securities are changed.

Mandate, Structure and Composition of the Board of Directors

The Committee and the Board of Directors are of the view that the size and composition of the Board of Directors and its standing committees are well suited to the circumstances of the Company and allow for the efficient functioning of the Board of Directors as an independent decision-making body.

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Board of Directors and CommitteeCharters

Each standing committee operates according to its charter approved by the Board of Directors which sets out the committee’s duties and responsibilities.

The Board of Directors’ charter and the charter of each of the standing committees require that they be reviewed annually. As part of that process each standing committee undertakes a review of its mandate and tables any recommendations for changes with the Committee. The Committee reviews the submissions of the standing committees and also reviews the Board of Directors’ charter. The Committee then makes a recommendation to the Board of Directors based on the conclusion of the review. The Board of Directors takes the Committee’s recommendation into account in making such changes as it determines to be appropriate.

The Board of Directors and standing committee charters are attached as Appendix A to CGI’s Annual Information Form for the fiscal year ended September 30, 2021 (the “2021 Annual Information Form”) which is available on the Canadian Securities Administrators’ website at www.sedar.com and on CGI’s website at www.cgi.com. A copy of the 2021 Annual Information Form will be provided to shareholders by CGI upon request. The charters of the Board of Directors and its standing committees are hereby incorporated by reference from Appendix A to the 2021 Annual Information Form.

The key responsibilities of each standing committee are summarized in the reports contained in this Management Proxy Circular and each standing committee is composed entirely of independent directors. The following table summarizes the current membership of each of the Company’s standing committees.

Committee	Membership
Audit and Risk Management Committee
	Gilles Labbé (Chair)<br> <br>Michael B. Pedersen <br>Stephen S. Poloz<br><br>Alison C. Reed <br>Kathy N. Waller<br> <br>Frank Witter^(a)^
Corporate Governance Committee
	Paule Doré (Chair) <br>George A. Cope<br> <br>Timothy J. Hearn^(b)^<br> <br>Mary G. Powell
Human Resources Committee
	Joakim Westh (Chair)^^<br>Alain Bouchard ^^George A. Cope<br> <br>Timothy J. Hearn^(b)^<br><br><br>Mary G. Powell
(a)	Mr. Witter joined the Board of Directors on July 1, 2021. Mr. Witter was appointed as member of the<br>Audit and Risk Management Committee on July 27, 2021.
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(b)	Mr. Hearn is not seeking reelection on the Board of Directors and will therefore cease to be a director, the Lead<br>Director, and a member of each of the Human Resources Committee and of the Corporate Governance Committee on February 2, 2022.
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Role and Responsibilities of the Founder and Executive Chairman of the Board and of the President and Chief Executive Officer

The Board of Directors has delegated to management the responsibility for day-to-day management of the business of the Company in accordance with the Company’s Operations Management Framework which was adopted by the Board of Directors. The Operations Management Framework sets out the overall authority of the Company’s management team as well as the level of management approval required for the various types of operations and transactions in the ordinary course of the Company’s business.

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The role of Founder and Executive Chairman of the Board allows Mr. Serge Godin to devote his time to the development and implementation of strategic initiatives, including strengthening the Company’s partnerships with existing clients and fostering key relationships that lead to new business, including large outsourcing contracts and strategic mergers. The nature of the responsibilities of the Founder and Executive Chairman of the Board are such that he is a senior executive officer of the Company and is not an independent Chairman of the Board.

All operational and corporate functions, other than the office of the Founder and Executive Chairman of the Board which reports to the Founder and Executive Chairman of the Board, report to the President and Chief Executive Officer who reports directly to the Board of Directors. The President and Chief Executive Officer, jointly with the management team, develop the strategies and corporate objectives which are approved by the Board of Directors. Each year, the Human Resources Committee assesses the performance of executive officers in achieving the objectives and makes recommendations to the Board of Directors in relation to the grant and vesting of stock options, the award and vesting of PSUs and the payment of bonuses under the Profit Participation Plan to executive officers, including the Named Executive Officers.

Taken together, the Operations Management Framework and the corporate objectives approved by the Board of Directors annually define the scope of management’s authority and responsibilities, including those of the Founder and Executive Chairman of the Board and of the President and Chief Executive Officer, in relation to the Company’s day-to-day operations and the attainment of its objectives. At each regularly scheduled Board meeting the Founder and Executive Chairman of the Board and the President and Chief Executive Officer report on their stewardship of the Company’s operations, and their performance relative to fixed objectives is assessed annually. Ultimately, the Board of Directors reports to the shareholders at the Annual General Meeting of Shareholders.

Role and Responsibilities of the Lead Director and Standing Committee Chairs

Lead Director

The charter of the Board of Directors, which is incorporated by reference in this Management Proxy Circular (see the heading Mandate, Structure and Composition of the Board of Directors earlier in this document), requires that the Board of Directors appoint a Lead Director from among the independent directors. The Lead Director is responsible for ensuring that the Board of Directors acts independently of the Company’s management and strictly in accordance with its obligations towards shareholders.

Mr. Timothy J. Hearn, an independent member of the Board of Directors, was appointed as CGI’s Lead Director on January 30, 2019. Mr. Hearn has decided that he will not seek reelection at the Meeting and, as a result, his term as a director, the Lead Director and as a member of each of the Human Resources Committee and of the Corporate Governance Committee will come to an end at the time of the Meeting. Following the Meeting, the Board of Directors will appoint another independent director as new Lead Director.

In fulfilling his responsibilities, the Lead Director provides input to the Founder and Executive Chairman of the Board in the preparation of the agendas of the meetings of the Board of Directors, sets the agenda for, and chairs the meetings of, the independent directors, and leads the annual self-evaluation process for the Board of Directors and director peer review process every two years.

Together with the Founder and Executive Chairman of the Board, the Lead Director facilitates the effective and transparent interaction of Board members and management. The Lead Director also provides feedback to the Founder and Executive Chairman of the Board and acts as a sounding board with respect to strategies, accountability, relationships and other matters.

Standing Committee Chairs

The role and responsibilities of each of the Chairs of the standing committees of the Board of Directors are set forth in the charter of each committee. The standing committees’ charters are incorporated by reference in this Management Proxy Circular (see the heading Mandate, Structure and Composition of the Board of Directors earlier in this document).

The Chair of each committee is responsible for leading the committee’s work and, in that capacity, ensuring that the committee’s structure and mandate are appropriate and adequate to support the fulfilment of its responsibilities, that the committee has adequate resources as well as timely and relevant information to support its work, and that the scheduling, organization and procedures of committee meetings provide adequate time for the consideration and discussion of

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relevant issues. The committee Chair is responsible for ensuring that the effectiveness of the committee is assessed on a regular basis.

The Chair presides the committee’s meetings and works with the Founder and Executive Chairman of the Board, the Corporate Secretary and the Company’s relevant executive officers in setting the agendas for each meeting and has the authority to convene special meetings of the committee. The Chair of the Corporate Governance Committee also works with the Founder and Executive Chairman of the Board, the Corporate Secretary and the Company’s relevant executive officers in setting the calendars of the committees’ meetings. The committee Chair acts as liaison with the Company’s management in relation to the committee’s work program and ensures that the committee reports to the Board of Directors at each subsequent meeting of the Board of Directors in relation to the committee’s deliberations, decisions and recommendations.

Criteria for Tenure on CGI’s Board of Directors

Each year, the Committee reviews all of the Company’s corporate governance practices as part of an exercise that takes place well in advance of the annual preparation and review of the Company’s Management Proxy Circular, so that such practices, including those that govern the conditions for tenure on the Board of Directors, receive careful consideration in advance of the Company’s fiscal year end and the preparation of materials for the Annual General Meeting of Shareholders.

Independence

CGI’s corporate governance practices require that a majority of the members of the Board of Directors be independent, as per the requirements set forth in National Instrument 52-110 – Audit Committees. This means that they must be and remain free from any material ties to the Company, its management and its external auditor that could, or could reasonably be perceived to, materially interfere with the directors’ ability to act in the best interests of the Company, and otherwise in keeping with the definitions of independence applicable under the governance regulations, rules and guidelines of the relevant stock exchanges and securities regulators.

The Board of Directors has concluded that the position of Lead Director, which has existed since 1996, ensures that the Board of Directors is able to act independently of management in an effective manner. The Lead Director holds meetings of the outside directors after each regular meeting of the Board of Directors, without management and related directors present.

The Board of Directors has determined that the directors identified as being independent in this Management Proxy Circular do not have interests in or relationships with CGI or with any of CGI’s significant shareholders that could, or could reasonably be perceived to, materially interfere with the directors’ ability to act in the best interests of the Company, and that they are therefore independent under applicable regulations, rules and guidelines.

The independence of the Board of Directors and each standing committee is further enhanced by their ability to engage outside advisors as needed. In addition, individual directors may also retain the services of outside advisors with the authorization of the Chair of the Committee.

Shareholders of CGI, or any other person who has an interest in the Company, who wish to contact CGI’s non-management or independent directors may do so by e-mail sent to the Lead Director at lead_director@cgi.com or by using the contact page for the Lead Director on CGI’s website at www.cgi.com.

Expertiseand Financial and Operational Literacy

CGI’s corporate governance practices require that all members of the Board of Directors be both financially and operationally literate. The financial literacy of individual directors who do not sit on the Audit and Risk Management Committee need not be as extensive as that of members who sit on such committee. Having operational literacy means that the director must have substantial experience in the execution of day-to-day business decisions and strategic business objectives acquired as a result of meaningful past experience, such as a Chief Executive Officer or as a senior executive officer in another capacity but with a broad responsibility for operations.

The directors’ experience and subject matter expertise are examined by the Committee annually when it reviews and makes recommendations to the Board of Directors in relation to succession planning for the Board of Directors in the context of the Board of Directors and standing committee self-evaluation process (see the heading Self-Assessmentand

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Peer Review Process). Expertise in the vertical markets in which the Company operates (financial services; government; health; communications and utilities; and manufacturing, retail and distribution), operational expertise and literacy, and financial literacy make up the key criteria that are used to select candidates for Board membership, to review and determine the composition of the Board of Directors, and to assess the performance of directors annually as part of the annual Board of Directors and standing committee self-evaluation process. The Board of Directors’ objective in relation to its composition is to ensure that it has expert representation for each of the Company’s targeted vertical markets.

The members of the Board of Directors who serve on the Audit and Risk Management Committee must be operationally literate and be financially literate in accordance with applicable governance standards under applicable securities laws, regulations and stock exchange rules, and in the sense of having the ability to read and understand a set of financial statements that present a breadth and level of complexity of accounting issues such as those which could reasonably be expected to be raised by CGI’s financial statements.

The Committee and the Board of Directors have determined that all members of the Audit and Risk Management Committee are financially literate and that the Chair, Mr. Gilles Labbé, Mr. Frank Witter, and Ms. Alison C. Reed and Ms. Kathy N. Waller have the necessary experience to qualify as financial experts under the NYSE corporate governance rules and the rules adopted by the U.S. Securities and Exchange Commission (“SEC”) in accordance with the Sarbanes Oxley Act of 2002. Mr. Labbé is a Fellow of the Institute of Chartered Professional Accountants Canada (FCPA, FCA), Mr. Witter served as Chief Financial Officer of Volkswagen Group, Ms. Alison C. Reed is a Chartered Accountant (ACA) and served as Chief Financial Officer of Marks and Spencer plc and of Standard Life Assurance Company and Standard Life plc and Ms. Kathy N. Waller is a Certified Public Accountant (CPA, CGMA) and served as Executive Vice President, Chief Financial Officer and President, Enabling Services of The Coca-Cola Company.

The remaining members of the Audit and Risk Management Committee who are nominee directors, Messrs. Michael B. Pedersen and Stephen S. Poloz are financially literate in the sense that they have the knowledge and skills necessary to allow them to read and understand a set of financial statements that present a breadth and level of complexity of accounting issues such as those which could reasonably be expected to be raised by CGI’s financial statements.

Mr. Michael B. Pedersen acquired his financial literacy at Barclays plc and CIBC, as well as while serving as Group Head, U.S. Banking of The Toronto-Dominion Bank and as President and Chief Executive Officer of TD Bank US Holding Company, TD Bank, N.A. and TD Bank USA, N.A. In his role as President and Chief Executive Officer, he was responsible for leading the bank’s retail and commercial banking operations in the United States.

Mr. Stephen S. Poloz acquired his financial literacy while serving as the Governor of the Bank of Canada and Chairman of the Bank of Canada’s board of directors, as well as while serving as Chair of the BIS Audit Committee and President and CEO of Export Development Canada, a major public sector financial intermediary providing various forms of insurance and lending to facilitate international business on behalf of Canadian companies.

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The following table presents a skills matrix for each of the Company’s nominee directors:

	Operational Literacy				Financial Literacy			Governance<br>and Human<br> <br>Resources
Director	Executive<br>Leadership	Consulting<br>Services and<br>IT Industry	Geography	Vertical market	Finance	Accounting	Risk
Alain Bouchard	✓		Global	Manufacturing, retail<br> and distribution	✓	✓	✓	✓
George A. Cope	✓	✓	Global	Multiple vertical<br> markets	✓	✓	✓	✓
Paule Doré	✓	✓	Global	Multiple vertical<br> markets	✓	✓	✓	✓
Julie Godin	✓	✓	Global	Multiple vertical<br> markets	✓	✓	✓	✓
Serge Godin	✓	✓	Global	Multiple vertical<br> markets	✓	✓	✓	✓
André Imbeau	✓	✓	Global	Multiple vertical<br> markets	✓	✓	✓	✓
Gilles Labbé	✓	✓	Global	Manufacturing, retail<br> and distribution	✓	✓	✓	✓
Michael B. Pedersen	✓		Global	Financial<br> services	✓	✓	✓	✓
Stephen S. Poloz	✓		Global	Financial<br> services	✓	✓	✓	✓
Mary G. Powell	✓		Global	Communications &<br> Utilities	✓	✓	✓	✓
Alison C. Reed	✓		Global	Multiple vertical<br> markets	✓	✓	✓	✓
Michael E. Roach	✓	✓	Global	Multiple vertical<br> markets	✓	✓	✓	✓
George D. Schindler	✓	✓	Global	Multiple vertical<br> markets	✓	✓	✓	✓
Kathy N. Waller	✓	✓	Global	Manufacturing, retail<br> and distribution	✓	✓	✓	✓
Joakim Westh	✓	✓	Global	Multiple vertical<br> markets	✓	✓	✓	✓
Frank Witter	✓		Global	Manufacturing, retail<br> and distribution	✓	✓	✓	✓
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Attendance at Board and StandingCommittee Meetings

The Committee monitors director attendance in relation to the recommendation for directors to be proposed for election at the Annual General Meeting of Shareholders. The overall attendance rate for the nominee directors of CGI for fiscal 2021 was 99% for the Board of Directors, 100% for the Audit and Risk Management Committee, 95% for the Human Resources Committee and 94% for the Corporate Governance Committee. Detailed meeting and attendance information to regular meetings of the Board of Directors and its standing committees is provided in the following table.

Board and Standing Committee Meetings and Attendance

Year ended September 30, 2021

	Board Meetings Attended		Committee Meetings Attended
			Audit	6 regular meetings
			Governance	4 regular meetings
Director	7 regular meetings		Human Resources	4 regular meetings
Alain Bouchard	7 of 7	100%	Human Resources	3 of 4	75%
George A. Cope	7 of 7	100%	Human Resources	4 of 4	100%
			Governance	4 of 4	100%
Paule Doré	7 of 7	100%	Governance (Chair)	4 of 4	100%
Julie Godin	7 of 7	100%	N/A	–	–
Serge Godin (Executive Chair)	7 of 7	100%	N/A	–	–
Timothy J. Hearn^(a)^	7 of 7	100%	Human Resources	4 of 4	100%
			Governance	4 of 4	100%
André Imbeau	7 of 7	100%	N/A	–	–
Gilles Labbé	7 of 7	100%	Audit (Chair)	6 of 6	100%
Michael B. Pedersen	7 of 7	100%	Audit	6 of 6	100%
Stephen S. Poloz	7 of 7	100%	Audit	6 of 6	100%
Mary G. Powell	6 of 7	86%	Human Resources	4 of 4	100%
			Governance	3 of 4	75%
Alison C. Reed	7 of 7	100%	Audit	6 of 6	100%
Michael E. Roach	7 of 7	100%	N/A	–	–
George D. Schindler	7 of 7	100%	N/A	–	–
Kathy N. Waller	7 of 7	100%	Audit	6 of 6	100%
Joakim Westh	7 of 7	100%	Human Resources (Chair)	4 of 4	100%
Frank<br>Witter^(b)^	3 of 3	100%	Audit	2 of 2	100%
(a)	Mr. Hearn is not seeking reelection on the Board of Directors and will therefore cease to be a director, the Lead<br>Director and a member of each of the Human Resources Committee and of the Corporate Governance Committee on February 2, 2022.
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(b)	Mr. Witter joined the Board of Directors on July 1, 2021. Mr. Witter was appointed as member of the<br>Audit and Risk Management Committee on July 27, 2021.
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Share Ownership Guideline forDirectors

CGI’s directors are required to hold Class A subordinate voting shares or DSUs having a value of $300,000 within five years of their election or appointment to the Board of Directors pursuant to the Company’s share ownership guideline for directors. All directors currently comply with the ownership guideline. The share ownership on the part of the Company’s outside directors as at December 7, 2021 and the date on which their holdings must meet the minimum level of share ownership are set out in the following table.

Outside Directors’ Share Ownership^(a)^
Director	Fiscal Year	Number of<br>Class A<br>subordinate<br>voting shares			Number<br>of DSUs		Total<br>number<br>of Class A<br>subordinate<br>voting shares<br>and DSUs			Total “at<br>risk” value of<br>Class A<br>subordinate<br>voting shares<br>and DSUs^(b)^			Value of Class A<br>subordinate<br>voting shares<br>or DSUs to be<br>acquired<br>to meet minimum<br>ownership<br>level	Date by which<br>minimum ownership<br>level must be met
Alain Bouchard	2021		25,000			22,747		47,747		$	5,231,161			Complies with the<br> <br>ownership guideline
	2020		25,000			20,837		45,837		$	4,484,692		N/A
	Change	****	0	****	****	1,910	****	1,910	****	$	746,469	****
George A. Cope	2021		21,540			3,255		24,795		$	2,716,540			Complies with the<br> <br>ownership guideline
	2020		21,540			1,346		22,886		$	2,239,166		N/A
	Change	****	0	****	****	1,909	****	1,909	****	$	477,374	****
Paule Doré	2021		54,274			14,249		68,523		$	7,507,380			Complies with the<br> <br>ownership guideline
	2020		54,274			13,295		67,569		$	6,610,951		N/A
	Change	****	0	****	****	954	****	954	****	$	896,429	****
Timothy J. Hearn^(c)^	2021		28,000			10,047		38,047		$	4,168,429			Complies with the<br> <br>ownership guideline
	2020		28,000			8,328		36,328		$	3,554,332		N/A
	Change	****	0	****	****	1,719	****	1,719	****	$	614,098	****
Gilles Labbé	2021		931			31,930		32,861		$	3,600,251			Complies with the<br> <br>ownership guideline
	2020		15,000			29,809		44,809		$	4,384,113		N/A
	Change	****	(14,069	)	****	2,121	****	(11,948	)	$	(783,861	)
Michael B. Pedersen	2021		24,350			10,131		34,481		$	3,777,738			Complies with the<br> <br>ownership guideline
	2020		24,350			8,221		32,571		$	3,186,747		N/A
	Change	****	0	****	****	1,910	****	1,910	****	$	590,992	****
Stephen S. Poloz	2021		0			1,252		1,252		$	137,169			June 8, 2025
	2020		0			298		298		$	29,156		N/A
	Change	****	0	****	****	954	****	954	****	$	108,013	****
Mary G. Powell	2021		0			750		750		$	82,170			June 8, 2025
	2020		0			0		0		$	0		N/A
	Change	****	0	****	****	750	****	750	****	$	82,170	****
Alison C. Reed	2021		3,000			0		3,000		$	328,680			Complies with the<br> <br>ownership guideline
	2020		3,000			0		3,000		$	293,520		N/A
	Change	****	0	****	****	0	****	0	****	$	35,160	****
Michael E. Roach	2021		951,335			6,058		957,393		$	104,891,977			Complies with the<br> <br>ownership guideline
	2020		951,335			5,104		956,439		$	93,577,992		N/A
	Change	****	0	****	****	954	****	954	****	$	11,313,985	****
Kathy N. Waller	2021		0			4,901		4,901		$	536,954			Complies with the<br> <br>ownership guideline
	2020		0			3,712		3,712		$	363,182		N/A
	Change	****	0	****	****	1,189	****	1,189	****	$	173,771	****
Joakim Westh	2021		15,000			0		15,000		$	1,643,400			Complies with the<br> <br>ownership guideline
	2020		8,755			0		8,755		$	856,589		N/A
	Change	****	6,245	****	****	0	****	6,245	****	$	786,811	****
Frank Witter^(d)^	2021		0			303		303		$	33,197			June 30, 2026
	2020		0			0		0		$	0
	Change	****	0	****	****	303	****	303	****	$	33,197	****
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(a)	2021 information is provided as at December 7, 2021 and 2020 information is provided as at December 7, 2020.<br>
(b)	Based on the closing prices of the Company’s shares on the TSX on December 7, 2021 ($109.56) and<br>December 7, 2020 ($97.84) respectively.
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(c)	Mr. Hearn is not seeking reelection on the Board of Directors and will therefore cease to be a director, the Lead<br>Director, and a member of each of the Human Resources Committee and of the Corporate Governance Committee on February 2, 2022.
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(d)	Mr. Witter joined the Board of Directors on July 1, 2021. Mr. Witter was appointed as member of the<br>Audit and Risk Management Committee on July 27, 2021.
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Availability and Workload

The Board of Directors has endorsed the Committee’s recommendation not to adopt formal guidelines on the number of boards or committees on which independent directors may sit on the basis that the contribution of each director to the work of the Board of Directors forms part of the Board of Directors’ self-assessment process and that arbitrary limits might not serve the interests of the Company.

Some nominee directors are presently directors of other public companies, as shown in the table below:

Director	Public Company	Committee(s)
Alain Bouchard	Alimentation Couche-Tard Inc. (TSX)	–
George A. Cope	Bank of Montreal<br> <br>(TSX,<br>NYSE and NASDAQ)	Chair of the Board, member of the Governance and Nominating Committee and the Human<br>Resources Committee
Serge Godin	Alstom SA (Euronext Paris)	Member of the Integration Committee
Gilles Labbé	Héroux-Devtek Inc. (TSX)	–
Michael B. Pedersen	SNC-Lavalin (TSX)	Member of the Human Resources Committee and of the Safety, Workplace, and Project Risk Committee
Stephen S. Poloz	Enbridge Inc. (TSX and NYSE)	Member of the Audit, Finance and Risk Committee and of the Safety and Reliability<br>Committee
Mary G. Powell	Sunrun Inc. (NYSE)	–
Michael E. Roach	CAE Inc. (TSX and NYSE)	Member of the Audit Committee and of the Governance Committee
Kathy N. Waller	Beyond Meat, Inc. (NASDAQ)<br> <br><br><br><br>Cadence Bancorporation (NYSE)<br> <br><br><br><br>Delta Air Lines, Inc. (NYSE)	Chair of the Audit Committee and Member of the Nominating and Corporate Governance Committee<br>and Compensation Committee<br> <br>Member of the Risk Management Committee and Compensation Committee<br><br><br>Member of the Corporate Governance Committee, the Audit Committee and the Safety & Security Committee and Compensation Committee
Joakim Westh	Absolent Group AB (Nasdaq Stockholm)<br><br><br>Saab AB (Nasdaq Stockholm)<br> <br>Swedish Match AB (Nasdaq Stockholm)	–<br><br><br>Chair of the Audit Committee<br> <br>Chair of the Audit<br>Committee
Frank Witter	Deutsche Bank AG <br>(Frankfurt Stock Exchange and NYSE)<br><br><br>Traton SE (Nasdaq Stockholm)	Member of the Audit Committee and Technology, Data and Innovation Committee<br><br><br>Chair of the Audit Committee

The Board of Directors and the Committee have determined that none of the nominee directors’ commitments impair their capacity to serve the Company, the Board of Directors or any standing committee effectively.

Conflicts of Interest

A process is in place for directors to annually acknowledge CGI’s Code of Ethics and Business Conduct in the same way as all officers and members do. All directors have also declared their interests in all other companies where they serve as

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directors or officers. The Board of Directors has endorsed the Committee’s recommendation to maintain the practice of having directors tender their resignation for consideration upon a major change in their principal occupation.

Director Orientation and Continuing Education Program

New Director Orientation

Each new director participates in a formal orientation program. The program consists of a detailed presentation of the Company’s current three-year strategic plan, coupled with a series of meetings between the new director and each of the Founder and Executive Chairman of the Board, the Lead Director, the President and Chief Executive Officer, the Chair of any standing committee to which the director will be assigned and other key senior executives of the Company. Depending on the director’s experience and background and the results of the executive meetings, additional meetings may be scheduled. In addition to the executive briefings, new directors receive CGI’s Director Reference Materials, a comprehensive set of documents containing both public and non-public information concerning the Company, which includes detailed information in relation to the Company, its operations, financial condition and management structure; policies and public disclosure record; the work programs and minutes of past meetings of the Board of Directors and of its standing committees; biographies of CGI’s key senior executive officers; materials related to the director’s duties and responsibilities, including, a summary of the Company’s insurance coverage for directors and officers liability; and the Company’s process for reporting transactions in its securities carried out by its reporting insiders.

Continuing Education Program

In addition to the formal orientation program, the directors participate in a continuing education program which provides “in-depth” information on key issues relating to the Company’s business, including the material risks the Company faces and recent developments in the global information technology market. Detailed presentations are also made to the standing committees on technical subjects such as the application of key accounting principles in the preparation of the Company’s financial statements, corporate governance rules and practices, and trends in executive officers’ and directors’ compensation.

Directors also receive updates on business and governance initiatives as well as responses to questions raised by the members of the Board of Directors from time to time. Directors who wish to do so may make arrangements with the Corporate Secretary to participate, at CGI’s expense, in board-level industry associations or conferences, to attend continuing education courses that are relevant to their role as a director of the Company or otherwise to pursue activities that contribute in a meaningful way to the value they bring to the Board of Directors.

All members of the Board of Directors are invited to attend CGI’s annual Leadership Conference, a key part of the Company’s strategic planning cycle and can participate in sessions of CGI’s Leadership Institute management professional development program, including CGI 101, a three-day immersive seminar for CGI managers covering all aspects of the Company’s business.

2021 Continuing Education Presentations

The following table lists key presentations that were made available to directors of the Company in fiscal 2021 both by CGI members and external providers:

Date	Presentation Topic	Attendance
March 2021	Health and Wellbeing	Board of Directors
March 2021	Data Privacy Regulation	Board of Directors
April 2021	Corporate Governance	Corporate Governance Committee
June 2021	Leadership Conference	Board of Directors
September 2021	Policy Framework	Audit and Risk Management Committee

Self-Assessment and Peer Review Processes

The Lead Director, in concert with the Committee, coordinates an annual self-assessment of the effectiveness of the Board of Directors as a whole and of its standing committees, as well as, every two years, a peer review of the independent directors. The Committee is also responsible for establishing the competencies, skills and qualities it seeks in new Board members and directors are assessed against the contribution they are expected to make by way of a questionnaire.

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Once responses are received, the Lead Director compiles and analyses the results and discusses the self-assessments and peer reviews with each director. Following one-on-one discussions with directors, the Lead Director reviews the overall results of the annual self-assessment process and of the peer review process, with the Founder and Executive Chairman of the Board and the Co-Chair of the Board. The Committee then meets to review the results of the annual self-assessment process and of the peer review process, and subsequently presents the final results to the Board of Directors for discussion.

The peer review of the independent directors was scheduled for fiscal 2021. However, given the number of new directors having joined the Board of Directors during the year and the fact that few physical meetings had been held due to the COVID-19 pandemic, the Committee resolved to postpone the peer review to fiscal 2022.

The Board of Directors annually reviews the assessment of its performance and the recommendations provided by the Committee with the objective of increasing the Board’s effectiveness in carrying out its responsibilities. The Board of Directors takes appropriate action based on the results of the review process.

Retirement Age and Director Term Limits

The Board of Directors has endorsed the Committee’s recommendation not to adopt a formal retirement age or term limits for directors.

CGI’s success is due in large measure to the Company’s experience and expertise in the vertical markets in which it operates. The selection criteria for CGI’s Board of Directors, which are explained earlier in this document under the heading Expertise and Financial and Operational Literacy, recognize this and are designed to ensure that the Company has subject matter experts on the Board of Directors who can effectively provide intelligence, experience, expertise, and business and operational insight into each of the Company’s vertical markets. Imposing a term limit or an arbitrary retirement age would unnecessarily expose the Company to losing valuable expertise and insight that could not be easily replaced. The Committee and the Board of Directors are therefore of the view that a mandatory retirement age or term limits might arbitrarily and needlessly deprive the Board of Directors of valuable talent.

As with the other aspects of CGI’s corporate governance practices, term limits and formal retirement age for directors are considered on a regular basis by the Board of Directors. In the event of a vote, the directors who would be affected if such limits were adopted withdraw from the meeting and abstain from voting on the matter. The Board of Directors believes that the effectiveness of this approach to board renewal is proven as 62% of the independent nominee directors were not directors five years ago.

Nomination Process for the Board of Directors and Executive Officers

Board of Directors

The shareholders are responsible for electing CGI’s directors. The responsibility for proposing candidates for election by the shareholders lies with the Board of Directors, which relies on the recommendations of the Committee.

Based on the results of the Board of Directors self-evaluation and peer review process (see the heading Self-Assessment and Peer Review Processes earlier in this document) and, from time to time, on its own assessment of the needs of the Company, the Committee may recommend that the composition of the Board of Directors or its standing committees be varied in order to continue to serve the best interests of the Company and to ensure an appropriate succession of directors. By way of example, when it is appropriate to do so, additional directors may be appointed to committees so that knowledge is transmitted to new members to facilitate a smooth transition as standing committee composition evolves.

When changes to the composition of the Board of Directors are required, potential candidates are identified either through referrals from directors or senior management, or with the assistance of third parties. The selection of nominees from among the potential candidates is based on the candidate’s expertise and knowledge in the vertical markets in which the Company operates and their operational and financial literacy based on the Board of Directors’ skills matrix (see the heading Expertise and Financial and Operational Literacy earlier in this document), taking into account criteria that promote diversity, including gender (with the objective of having a Board of Directors composed of at least 30% of women), ethnicity, age, experience and geographical representation. The Committee, the Founder and Executive Chairman of the Board, the Co-Chair of the Board and the Lead Director consult with each other with respect to the actions to be taken and the necessary steps are then taken to interview the candidates and confirm their willingness to serve on the Board of Directors.

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Once the selection of candidates is completed, the Committee recommends to the Board of Directors that the candidate or candidates be either appointed by the Board of Directors if there is a vacancy to be filled or if there is a need to increase the size of the Board of Directors, or be nominated for election at the next Annual General Meeting of Shareholders.

Five out of **** sixteen (or 31.25%) of CGI’s nominee directors are women. As previously mentioned (see the heading Diversity earlier in this document), the charters of the Board of Directors and of the Corporate Governance Committee include the Company’s objective of having a Board of Directors of which at least 30% would be women. CGI is very proud to have met this objective and we will continue to monitor our progress.

Succession Planning for Executive Officers

Succession planning is a priority of the Board of Directors as part of its responsibility to ensure that CGI has a robust pipeline of leaders at executive and management levels, including for the President and Chief Executive Officer position. As provided in its charter, the Board of Directors oversees the succession planning, including the appointment, training and monitoring, of senior management. The Human Resources Committee plays a key role in supporting the Board of Directors in its oversight of talent management and succession planning by reviewing annually the succession plan for the Chief Executive Officer and other executive roles. The Human Resources Committee also provides annually a report to the Board of Directors on succession planning, which identifies key talent and potential successors’ capabilities, the roles that they can assume in the future and the development programs required to prepare them for these roles. ****

The charter of the Human Resources Committee also provides that in identifying potential candidates for appointment as executive officers, the Human Resources Committee will consider the diversity of the executive team’s background, including in terms of gender, ethnicity, age and experience. As at the date of this Management Proxy Circular, four out of twenty-one (or approximately 19%) of the Company’s current executive officers, were women. In addition, a total of 15 women occupy senior management positions, which represents approximately 16% of the Company’s total number of senior managers.

Board of Directors Participation in Strategic Planning

The Board of Directors is directly and closely involved in the preparation and approval of CGI’s rolling three-year strategic plan which is reviewed and assessed annually by the Board of Directors.

CGI has adopted a bottom-up process for budgeting and strategic planning in order to ensure that the resulting business plan is as closely attuned as possible to maximizing the Company’s business opportunities and mitigating operational and other risks. The Board of Directors receives a detailed briefing early in the planning process covering all aspects of CGI’s strategic planning so that the directors are in a position to contribute to the process in a meaningful way before the final business plan has taken shape.

In keeping with CGI’s three-year rolling strategic planning process, the strategic plan begins with the initiatives, directions and priorities identified at the business unit level by the Company’s management team that are shared at the Company’s annual Leadership Conference. The Company’s rolling three-year strategic plan was presented to the directors in July for review and discussion. The Company’s fiscal 2022 business plan and budget was presented to, and approved by, the Board of Directors in September. The rolling three-year planning process provides a meaningful opportunity for the directors to contribute to the strategic planning process. In addition to the formal planning process, every Board of Directors meeting agenda features a standing item that serves as a forum for continuing free-ranging discussion between the Board of Directors and management in relation to the Company’s strategic direction.

Guidelines on Timely Disclosure of Material Information

CGI has adopted Guidelines on Timely Disclosure of Material Information (the “Disclosure Guidelines”) whose purpose is to ensure that communications with the investment community, regulator, the media and the general public about the Company, particularly in respect of material information, are timely, accurate, broadly released in accordance with, and otherwise responsive to, all applicable legal and regulatory requirements.

Under the Disclosure Guidelines, the Board of Directors has the responsibility to oversee the Company’s compliance with its continuous and timely disclosure obligations. The Board of Directors believes that it is management’s role to communicate on behalf of the Company with its shareholders and the investment community. The Company maintains an effective investor relations process to respond to shareholder questions and concerns. The Company also adopted the SPMF (which stands for Shareholder Partnership Management Framework, as defined under the heading CGI’s

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Shareholders earlier in this document), which structures the processes and how information flows between CGI and the investment community, including both buy-side (institutional investor) and sell-side (investment dealer) research analysts. CGI obtained an ISO 9001 certification for the application of the SPMF in the Company’s operations.

The Board of Directors reviews and, where required, approves statutory disclosure documents prior to their dissemination to the market and to the Company’s shareholders.

Codes of Ethics

CGI’s Codes of Ethics are attached as Appendix A to CGI’s 2021 Annual Information Form which is available on the Canadian Securities Administrators’ website at www.sedar.com and on CGI’s website at www.cgi.com. A copy of the 2021 Annual Information Form will be provided to shareholders by CGI upon request.

The Codes of Ethics are comprised of CGI’s Code of Ethics and Business Conduct that applies to all members, officers and directors of CGI (and which incorporates CGI’s Anti-Corruption Policy) and CGI’s Executive Code of Conduct which supplements the Code of Ethics and Business Conduct for certain officers.

The Board of Directors monitors compliance with the Codes of Ethics and is, under its charter, responsible for any waivers of their provisions granted to directors or officers. No such waivers have been granted to date. The Committee is principally responsible for the annual review of the Codes of Ethics, overseeing compliance therewith, reviewing any request for a waiver from their application, and making recommendations on these matters to the Board of Directors.

Under the terms of the Code of Ethics and Business Conduct, all of CGI’s members are required to comply with its content and to assist with its application. In particular, the Code of Ethics and Business Conduct requires that incidents be reported to human resources, management, CGI’s Ethics Hotline, CGI’s Ethics Inbox or alternatively to the Corporate Secretary.

The Board of Directors has established procedures approved by the Audit and Risk Management Committee for the receipt, retention, and treatment of ethical incidents relating to, among others, accounting, internal accounting control or auditing matters, discrimination and harassment, corruption and data privacy, as well as other potential breaches of the Code of Ethics and Business Conduct (which incorporates CGI’s Anti-Corruption Policy) or of the Executive Code of Conduct. In that regard, the Company adopted an Ethics Reporting Policy, which allows members who wish to submit a report to do so via a third party ethics reporting hotline and secure website that ensures that members who wish to preserve their anonymity are able to do so with confidence. The Audit and Risk Management Committee is primarily responsible for the review and oversight of these incident reports. A quarterly report on incidents reported is provided by the Corporate Secretary to the Audit and Risk Management Committee.

An integration program has been designed for new members to become familiar with CGI’s policies, their responsibilities as members and the benefits to which they are entitled. In order to ensure that all CGI members are aware of the importance that the Company attaches to compliance with the Code of Ethics and Business Conduct, each new member is informed of its content and the process for reporting ethical incidents, and is required to undertake in writing to comply with its provisions. CGI’s Leadership Institute also provides new managers with an intensive curriculum of courses designed to allow them to become familiar with CGI’s methods of operation and its policies, including the Code of Ethics and Business Conduct and the process for reporting incidents. In addition, the Company provides an internet portal for all members to access the Company’s policies, including the Codes of Ethics and the process for reporting ethical incidents.

These measures are in addition to quarterly reports prepared for the Audit and Risk Management Committee by the internal audit department, the internal controls review function and the legal department. These quarterly reports may include reports of breaches of the Codes of Ethics when such breaches are raised in internal audit mandates or in claims made against the Company.

In addition to CGI’s Code of Ethics and Business Conduct, CGI’s principal executive and financial officers, including the Founder and Executive Chairman of the Board, the President and Chief Executive Officer, and the Executive Vice-President and Chief Financial Officer, the principal accounting officer or controller, and other persons performing similar functions, are subject to CGI’s Executive Code of Conduct which they are required to review and acknowledge on an annual basis.

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CGI Federal Inc., the Company’s operating subsidiary that provides services to the U.S. Federal government, has adopted separate policies and procedures to comply with specific requirements under U.S. Federal government procurement laws and regulations.

CGI has also developed a Third Party Code of Ethics which applies to its business partners, including but not limited to, its primes, subcontractors, independent contractors, consultants, distributors, licensees, suppliers and other agents to ensure that they understand and adhere to the Company’s commitment to integrity and high standards of business conduct.

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Report of the Audit and Risk Management Committee

The Audit and Risk Management Committee of the Board of Directors is composed entirely of independent directors who meet the independence and experience requirements of National Instrument 52-110 – Audit Committees adopted by the Canadian securities regulators as well as those of the NYSE and of the SEC.

The Committee is composed of Mr. Gilles Labbé, Chair of the Committee, Messrs. Michael B. Pedersen, Stephen S. Poloz and Frank Witter, and Mses. Alison C. Reed and Kathy N. Waller. The Committee met six times during fiscal 2021. Mr. Labbé’s role and responsibilities as Chair of the Committee are described earlier in this document in the report of the Corporate Governance Committee under the heading Role and Responsibilities of the Lead Director and Standing Committee Chairs.

The role and responsibilities of the Committee are contained in the Committee’s charter, which is incorporated by reference in this Management Proxy Circular (see the heading Mandate, Structure and Composition of the Board of Directors) and is available on the Canadian Securities Administrators’ website at www.sedar.com and on CGI’s website at www.cgi.com. The role and responsibilities of the Committee include:

•	reviewing all public disclosure documents containing audited or unaudited financial information concerning CGI;<br>
•	identifying and examining the financial and operating risks to which the Company is exposed, reviewing the various<br>policies and practices of the Company that are intended to manage those risks, and reporting on a regular basis to the Board of Directors concerning risk management;
---	---
•	reviewing and assessing the effectiveness of CGI’s accounting policies and practices concerning financial reporting;<br>
---	---
•	reviewing and monitoring CGI’s internal control procedures, programs and policies and assessing their adequacy and<br>effectiveness;
---	---
•	reviewing the adequacy of CGI’s internal audit resources including the mandate and objectives of the internal<br>auditor;
---	---
•	recommending to the Board of Directors the appointment of the external auditor, asserting the external auditor’s<br>independence, reviewing the terms of its engagement, conducting an annual auditor performance assessment, and pursuing ongoing discussions with it;
---	---
•	reviewing all related party transactions in accordance with the rules of IFRS and applicable laws and regulations;<br>
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•	reviewing the audit procedures including the proposed scope of the external auditor examinations; and<br>
---	---
•	performing such other functions as are usually attributed to audit committees or as directed by the Board of Directors.<br>
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External Auditor

The Committee is required to assert the independence of CGI’s external auditor addresses the applicable criteria with the external auditor and obtains yearly confirmations from it as to its independence.

Auditor Independence Policy

In order to satisfy itself as to the independence of the external auditor, the Committee has adopted an auditor independence policy which covers (a) the services that may and may not be performed by the external auditor, (b) the governance procedures to be followed prior to retaining services from the external auditor, and (c) the responsibilities of management and the Committee. The following is a summary of the material provisions of the policy.

Performance of Services

Services are either acceptable services or prohibited services.

The acceptable services are audit and review of financial statements, prospectus work, the audit of pension plans, special audits on control procedures, tax planning services on mergers and acquisitions activities, due diligence relating to mergers and acquisitions, tax services related to transfer pricing, sales tax planning and returns, research and interpretation related to taxation, research relating to accounting issues, tax planning services, preparation of tax returns, and all other services that are not prohibited services. The prohibited services are: bookkeeping services, the design and implementation of financial information systems, appraisal or valuation services or fairness opinions, actuarial services, internal audit services, management functions, human resources functions, broker-dealer services, legal services, services based on contingency fees, and expert services.

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Governance Procedures

The following control procedures are applicable when considering whether to retain the external auditor services:

For all services falling within the permitted services category, whether they are audit or non-audit services, a request for approval must be submitted to the Committee through the Executive Vice-President and Chief Financial Officer prior to engaging the auditor to perform the services.

In the interests of efficiency, certain permitted services are pre-approved quarterly by the Committee and thereafter only require approval by the Executive Vice-President and Chief Financial Officer as follows:

•	The Committee can pre-approve envelopes for certain services to pre-determined dollar limits on a quarterly basis;
•	Once pre-approved by the Committee, the Executive Vice-President and Chief<br>Financial Officer may approve the services prior to the engagement;
---	---
•	For services not captured within the pre-approved envelopes and for costs in<br>excess of the pre-approved amounts, separate requests for approval must be submitted to the Committee; and
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•	At each meeting of the Committee, a consolidated summary of all fees by service type is presented including a breakdown<br>of fees incurred within each of the pre-approved envelopes.
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Management and Committee Responsibilities

Management and the Committee are the Company’s two key participants for the purposes of the Company’s Auditor Independence Policy. The primary responsibilities of management are creating and maintaining a policy that follows applicable auditor independence standards, managing compliance with the policy, reporting to the Committee all mandates to be granted to the external auditor, and monitoring and approving services to be performed within the pre-approved envelopes.

The primary responsibilities of the Committee are nominating the external auditor for appointment by the Company’s shareholders, approving fees for audit services, approving the Auditor Independence Policy and amendments thereto, monitoring management’s compliance with the policy, obtaining yearly confirmations of independence from the external auditor, monitoring audit partner rotation requirements, monitoring the twelve month “cooling off” period when hiring members of the audit engagement team in a financial reporting oversight role, reviewing the appropriateness of required audit fee disclosure, interpreting the Auditor Independence Policy, and approving all mandates of the auditor or pre-approving envelopes for specific services.

Under the Auditor Independence Policy, the Committee has the ultimate responsibility to assert the independence of CGI’s external auditor.

Annual External Auditor Assessment

The Committee performs an annual assessment process to assist in making its recommendation to the Board of Directors in relation to the appointment of the Company’s external auditors. In fiscal 2021, the process was initiated in November and was completed prior to the Committee’s recommendation that was made on December 7, 2021.

The annual external auditors’ assessment is based on the recommendations of Chartered Professional Accountants Canada in collaboration with the Canadian Public Accountability Board. The process is expected to provide an additional element of structure for the Committee in making its recommendation and to help in identifying areas for improvement for the external audit firm and the Company’s audit processes.

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Fees Billed by the External Auditor

During the years ended September 30, 2021 and 2020, CGI’s external auditor invoiced the following fees for its services:

	Fees billed
Service retained	2021		2020
Audit fees	$	6,990,722	$	7,900,049
Audit related fees^(a)^	$	1,297,931	$	1,398,224
Tax<br>fees^(b)^^^	$	2,078,521	$	2,102,969
All other fees^(c)^^^	$	17,145	$	9,338
Total fees billed	$	10,384,319	$	11,410,580
(a)	The audit related fees billed by the external auditor for the fiscal years ended September 30, 2021 and 2020 were<br>primarily in relation to service organization control procedures audits and assistance.
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(b)	The tax fees billed by the external auditor for the fiscal years ended September 30, 2021 and 2020 were in<br>relation to tax compliance and advisory services.
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(c)	The other fees billed by the external auditor for the fiscal years ended September 30, 2021 and September 30,<br>2020 were not significant.
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Related Party Transactions

The Committee is responsible under its charter for reviewing and making recommendations to the Board of Directors in relation to any transaction in which a director or a member of senior management has an interest. To the extent that it is necessary to do so, the Committee may retain outside advisors to assist it in reviewing related party transactions.

For more important transactions, the Board of Directors generally establishes a special committee made up entirely of independent directors that is mandated to review the transaction and to make a recommendation to the Board of Directors. Such committee may retain independent legal and financing advisors to assist in reviewing the transaction.

Whether it is the Committee or a special committee, the committee mandated with reviewing the transaction tables its report with the Board of Directors and it is the Board of Directors that has the responsibility of approving the transaction if it determines that it is appropriate to do so.

No such ad hoc committee was established or required to be established in fiscal 2021.

Other Business to be Transacted at the Annual General Meeting of Shareholders

Management of the Company is not aware of any matter to be submitted at the Meeting other than the matters set forth in the Notice of Meeting. Every proxy given to any person in the form of proxy that accompanied the Notice of Meeting will confer discretionary authority with respect to amendments or variations to the items of business identified in the Notice of Meeting and with respect to any other matters that may properly come before the Meeting.

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Additional Information

The Company will provide to any person, upon request to the Corporate Secretary, a copy of this Management Proxy Circular, together with one copy of any document, or the pertinent pages of any document, incorporated by reference in this Management Proxy Circular.

Additional financial and other information relating to the Company is included in its 2021 Annual Audited and Quarterly Unaudited Consolidated Financial Statements, annual and quarterly Management’s Discussion and Analysis of Financial Position and Results of Operations and other continuous disclosure documents which are available on the Canadian Securities Administrators’ website at www.sedar.com and on EDGAR at www.sec.gov. For additional copies of this Management Proxy Circular, for a copy of the Company’s Notice of Intention in relation to its NCIB, or other financial information, please contact Investor Relations by sending an e-mail to ir@cgi.com, by visiting the Investors section on the Company’s website at www.cgi.com, or by contacting us by mail or phone:

Investor Relations

CGI Inc.

1350 René-Lévesque Boulevard West

15^th^ Floor

Montréal, Quebec, Canada

H3G 1T4

Tel.: +1-514-841-3200

Shareholder Proposals

The Company received five shareholder proposals for inclusion in this Management Proxy Circular for which the texts are reproduced in Appendix C hereto. The texts of such proposals have not been modified from their original French version except that they have been translated. Although the Company agreed with MÉDAC that only two proposals would be presented at the Meeting for a vote, the Company addresses its views to each proposal in Appendix C hereto.

To propose any matter for a vote by the shareholders at an annual meeting of CGI, a shareholder must send a proposal to the Corporate Secretary at CGI’s office at 1350 René-Lévesque Boulevard West, 25th Floor, Montréal, Quebec, Canada, H3G 1T4 at least 90 days before the anniversary date of the notice for the previous year’s annual meeting. Proposals for CGI’s 2022 annual meeting must be received no later than September 8, 2022. CGI may omit any proposal from its Management Proxy Circular and annual meeting for a number of reasons under applicable regulation.

Approval by the Directors

The Board of Directors has approved the content and the delivery of this Management Proxy Circular.

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Serge Godin

Founder and Executive Chairman of the Board

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Appendix A

Stock Options and Share-Based Awards held by Named Executive Officers

The following tables show all outstanding stock options (referred to as option-based awards) and PSUs (referred to as share-based awards) held by the Named Executive Officers as at September 30, 2021.

	Option-based Awards						Share-based Awards
Name and title	Number of<br><br><br>securities<br> <br>underlying<br>unexercised<br> <br>options^(a)^<br><br><br>(#)		Option<br>exercise price ()	Option<br><br><br>expiration date		Value of<br><br><br>unexercised<br> <br>in-the-money<br> <br>options^(b)^<br> <br>($)	Number of<br><br><br>shares or units<br> <br>of shares that<br> <br>have not<br><br><br>vested^(c)^<br><br><br>(#)		Market or<br>payout value of share-based awards that<br>have not vested(b)(d) ()	Market or payout<br><br><br>value of vested<br> <br>share-based<br> <br>awards not<br><br><br>paid out or<br> <br>distributed<br> <br>($)
Serge Godin<br> <br>Founder and Executive<br>Chairman of the Board						0		227,954
Total:						0	****	227,954
	Option-based Awards						Share-based Awards
Name and title	Number of<br><br><br>securities<br> <br>underlying<br>unexercised<br> <br>options^(a)^<br><br><br>(#)		Option<br>exercise price ()	Option<br><br><br>expiration date		Value of<br><br><br>unexercised<br> <br>in-the-money<br> <br>options^(b)^<br> <br>($)	Number of<br><br><br>shares or units<br> <br>of shares that<br> <br>have not<br><br><br>vested^(c)^<br><br><br>(#)		Market or<br>payout value of share-based awards that<br>have not vested(b)(d) ()	Market or payout<br><br><br>value of vested<br> <br>share-based<br> <br>awards not<br><br><br>paid out or<br> <br>distributed<br> <br>($)
George D. Schindler<br><br><br>President and Chief Executive Officer		156,977			November 26, 2022	13,176,649
		53,226			September 30, 2023	3,802,465
		113,695			September 22, 2024	7,932,500
		117,000			September 22, 2025	6,953,310
		289,721			September 26, 2026	12,852,024
		168,884			September 24, 2027	7,491,694
		194,836			September 22, 2028	4,280,547		201,693
Total:						56,489,189	****	201,693
	Option-based Awards						Share-based Awards
Name and title	Number<br>of<br>securities<br>underlying<br>unexercised<br>exercise<br>options^(a)^<br> <br>(#)		Optionprice()	Option<br><br><br>expiration date		Value of<br><br><br>unexercised<br> <br>in-the-money<br> <br>options^(b)^<br> <br>($)	Number of<br><br><br>shares or units<br> <br>of shares that<br> <br>have not<br><br><br>vested^(c)^<br><br><br>(#)		Market or<br>payout value of share-based awards that<br>have not vested(b)(d) ()	Market or payout<br><br><br>value of vested<br> <br>share-based<br> <br>awards not<br><br><br>paid out or<br> <br>distributed<br> <br>($)
François Boulanger<br><br><br>Executive Vice-President and Chief Financial Officer		35,495			September 22, 2025	2,109,468
		97,127			September 26, 2026	4,308,554
		53,725			September 24, 2027	2,383,241
		59,260			September 22, 2028	1,301,942		57,028
Total:						10,103,205	****	57,028

All values are in US Dollars.

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Appendix A

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	Option-based Awards						Share-based Awards
Name and title	Number<br>of<br>securities<br>underlying<br>unexercised<br>options^(a)^<br><br><br>(#)		Optionexerciseprice<br>()	Option<br>expiration date		Value of<br><br><br>unexercised<br>in-the-money<br>options^(b)^<br><br><br>($)	Number of<br><br><br>shares or units<br>of shares<br>that<br>have not<br>vested^(c)^<br> <br>(#)	Market or<br><br><br>payout value of<br>share-based<br>awards<br>that<br>have not<br>vested^(b)^<br> <br>($)	Market or payout<br><br><br>value of vested<br>share-based<br>awards not paid<br>out or distributed<br><br><br>($)
Jean-Michel Baticle<br><br><br>President and Chief Operating Officer		7,610			January 29, 2023	633,913
		27,153			September 30, 2023	1,939,810
		64,071			September 22, 2024	4,470,234
		58,500			September 22, 2025	3,476,655
		15,812			September 26, 2026	701,420
		28,219			September 24, 2027	1,251,795
		29,855			September 22, 2028	655,914	34,956	3,760,916
Total:						13,129,741	34,956	3,760,916
	Option-based Awards						Share-based Awards
Name and title	Number<br>of<br>securities<br>underlying<br>unexercised<br>options^(a)^<br><br><br>(#)		Option<br>exercise price ()	Option<br><br><br>expiration date		Value of<br><br><br>unexercised<br> <br>in-the-money<br> <br>options^(b)^<br><br><br>($)	Number of<br><br><br>shares or units<br> <br>of shares that<br> <br>have not<br><br><br>vested^(c)^<br><br><br>(#)	Market or<br><br><br>payout value of<br> <br>share-based<br> <br>awards that<br><br><br>have not<br> <br>vested^(b)(d)^<br> <br>($)	Market or payout<br><br><br>value of vested<br> <br>share-based<br> <br>awards not<br><br><br>paid out or<br> <br>distributed<br> <br>($)
Timothy J. Hurlebaus<br><br><br>President, United States Operations, Commercial and State Government		3,033			September 22, 2025	180,251
		16,825			September 26, 2026	746,357
		11,163			September 24, 2027	495,191
		30,006			September 22, 2028	659,232
							28,692	3,074,694
Total:						2,081,031	28,692	3,074,694

All values are in US Dollars.

(a)	Shows stock options held as at September 30, 2021. Please refer to the headings StockOptions Granted as part of Fiscal 2021 Compensation and Performance Factors and Vesting Conditions earlier in this document for an explanation of stock options and performance factors.<br>
(b)	Based on $107.59, the closing price of the Company’s Class A subordinate voting shares on the TSX on<br>September 30, 2021, the last trading day in fiscal 2021.
---	---
(c)	Shows PSUs held as at September 30, 2021 and which have not vested, and include PSUs that had been awarded on<br>October 1, 2020 as part of the Named Executive Officers’ target compensation for fiscal 2021 and for which performance-based vesting was only determined after September 30, 2021. Please refer to the headings<br>Performance Share Units Awarded in Fiscal 2021 and Performance Factors and Vesting Conditions earlier in this document for an explanation of PSU awards in fiscal 2021 and<br>performance factors.
---	---
(d)	Shows the market value for the aggregate number of PSUs held as at September 30, 2021 and which had not vested, as<br>indicated in footnote (c) above. For Messrs. Serge Godin, Francois Boulanger and Jean-Michel Baticle, the market value was calculated based on $107.59, the closing price of the Company’s Class A subordinate voting shares on the TSX on<br>September 30, 2021, the last trading day in fiscal 2021. For Messrs. George D. Schindler and Timothy J. Hurlebaus, the market value was calculated using the closing price of the Company’s Class A subordinate voting shares on the NYSE<br>on September 30, 2021 multiplied by the average foreign exchange rates used for financial reporting purposes on page 18 of the Management’s Discussion and Analysis for the years ended September 30, 2021 and 2020.<br>
---	---
2021 MANAGEMENT PROXY CIRCULAR	65
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Appendix B

Stock Options and Share-Based Awards held by Directors

The following tables show all outstanding stock options (referred to as option-based awards) held by the members of the Board of Directors who are not Named Executive Officers as at September 30, 2021 as well as the in-the-money value of such stock options. For outside members of the Board of Directors, the following tables also show the market value of outstanding and vested DSUs (referred to as share-based awards) granted in respect of fiscal 2021 and previous fiscal years. For more information, please refer to the headings Stock Options Held by Directors and Deferred Stock Units and Deferred Stock Units Granted toDirectors earlier in this document. All DSUs are fully vested at the time of issuance.

The corresponding information for directors who are also Named Executive Officers may be found in Appendix A.

	Option-based Awards					Share-based Awards
Name	Number<br>of<br>securities<br>underlying<br>unexercised<br>options^(a)^<br><br><br>(#)	Option<br>exercise<br>price<br> <br>($)	Option<br>expiration date		Value<br>ofunexercisedin-the-moneyoptions(b)<br>()	Number<br>of<br>shares or units<br>of shares that<br>have not<br>vested<br> <br>(#)	Market<br>or<br>payout value of<br>share-based<br>awards that<br>have not<br>vested<br> <br>($)	Market or payout<br>value of vested<br>share-based<br>awards not<br>paid out or<br>distributed^(b)(c)^<br>($)
Alain Bouchard	3,813	27.28		April 28, 2023
	650	30.79		July 10, 2023
	2,442	36.15		September 30, 2023
	1,198	38.41		October 16, 2023
	1,471	34.68		January 22, 2024
	1,410	36.17		April 16, 2024
	1,360	37.50		July 23, 2024
	2,500	37.82		September 22, 2024
	1,340	38.07		October 29, 2024
	1,077	47.36		January 21, 2025
	1,067	56.69		April 15, 2025
	1,286	50.94		July 22, 2025
	1,537	47.81		October 14, 2025				2,447,360
Total:								2,447,360
	Option-based Awards					Share-based Awards
Name	Number<br>of<br>securities<br>underlying<br>unexercised<br>options^(a)^<br><br><br>(#)	Option<br>exercise<br>price<br> <br>($)	Option<br>expiration date		Value<br>ofunexercisedin-the-moneyoptions(b)<br>()	Number<br>of<br>shares or units<br>of shares that<br>have not<br>vested<br> <br>(#)	Market<br>or<br>payout value of<br>share-based<br>awards that<br>have not<br>vested<br> <br>($)	Market or payout<br>value of vested<br>share-based<br>awards not<br>paid out or<br>distributed^(b)(c)^<br> <br>($)
George A. Cope	0	N/A		N/A				350,226
Total:								350,226
	Option-based Awards					Share-based Awards
Name	Number<br>of<br>securities<br>underlying<br>unexercised<br>options^(a)^<br><br><br>(#)	Option<br>exercise<br>price<br> <br>($)	Option<br>expiration date		Value<br>ofunexercisedin-the-moneyoptions(b)<br>()	Number<br>of<br>shares or units<br>of shares that<br>have not<br>vested<br> <br>(#)	Market<br>or<br>payout value of<br>share-based<br>awards that<br>have not<br>vested<br> <br>($)	Market or payout<br>value of vested<br>share-based<br>awards not<br>paid out or<br>distributed^(b)(c)^<br> <br>($)
Paule Doré	625	37.82		September 22, 2024				1,533,117
Total:								1,533,117

All values are in US Dollars.

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Appendix B

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	Option-based Awards					Share-based Awards
Name	Number<br>of<br>securities<br>underlying<br>unexercised<br>options^(a)^<br><br><br>(#)	Option<br>exercise<br>price<br> <br>($)	Option<br>expiration date		Value of<br>unexercised<br>in-the-money<br>options^(b)^<br><br><br>($)	Number<br>of<br>shares or units<br>of shares that<br>have not<br>vested<br> <br>(#)		Market<br>orpayout value ofshare-basedawards thathave notvested ()	Market or payout<br>value of vested<br>share-based<br>awards not<br>paid out or<br>distributed^(b)(c)^<br> <br>($)
Julie Godin	33,363	23.65		November 26, 2022	2,800,490
	25,000	23.65		November 26, 2022	2,098,500
	21,367	37.11		November 12, 2023	1,505,946
	37,898	37.82		September 22, 2024	2,644,143
	26,000	48.16		September 22, 2025	1,545,180
	50,639	63.23		September 26, 2026	2,246,346
	28,293	63.23		September 24, 2027	1,255,077
	29,056	85.62		September 22, 2028	638,360
							32,614
Total:					14,734,042	****	32,614
	Option-based Awards					Share-based Awards
Name	Number<br>of<br>securities<br>underlying<br>unexercised<br>options^(a)^<br><br><br>(#)	Option<br>exercise<br>price<br> <br>($)	Option<br>expiration date		Value of<br>unexercised<br>in-the-money<br>options^(b)^<br><br><br>($)	Number<br>of<br>shares or units<br>of shares that<br>have not<br>vested<br> <br>(#)		Market<br>orpayout value ofshare-basedawards thathave notvested ()	Market or payout<br>value of vested<br>share-based<br>awards not<br>paid out or<br>distributed^(b)(c)^<br> <br>($)
Timothy J. Hearn^(d)^	2,500	46.92		January 27, 2025	151,675
	462	56.69		April 15, 2025	23,516		1
	825	50.94		July 22, 2025	46,736
	910	47.81		October 14, 2025	54,400
									1,080,964
Total:					276,327				1,080,964
	Option-based Awards					Share-based Awards
Name	Number<br>of<br>securities<br>underlying<br>unexercised<br>options^(a)^<br><br><br>(#)	Option<br>exercise<br>price<br> <br>($)	Option<br>expiration date		Value of<br>unexercised<br>in-the-money<br>options^(b)^<br><br><br>($)	Number<br>of<br>shares or units<br>of shares that<br>have not<br>vested<br> <br>(#)		Market<br>orpayout value ofshare-basedawards thathave notvested ()	Market or payout<br>value of vested<br>share-based<br>awards not<br>paid out or<br>distributed^(b)(c)^<br> <br>($)
André Imbeau	2,500	39.47		November 11, 2024	170,300
	2,000	48.16		September 22, 2025	118,860
	9,250	52.63		November 9, 2025	508,380
	16,603	63.23		September 26, 2026	736,509
	17,525	63.23		September 24, 2027	777,409
	14,916	85.62		September 22, 2028	327,705
	6,350	110.73		November 30, 2029	0
	14,930	97.84		December 6, 2030	145,568
Total:					2,784,731

All values are in US Dollars.

2021 MANAGEMENT PROXY CIRCULAR	67

Appendix B

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	Option-based Awards						Share-based Awards
Name	Number<br>of<br>securities<br>underlying<br>unexercised<br>options^(a)^<br><br><br>(#)		Optionexerciseprice ()	Option<br>expiration date		Value<br>ofunexercisedin-the-moneyoptions(b)<br>()	Number<br>of<br>shares or units<br>of shares that<br>have not<br>vested<br> <br>(#)	Market<br>or<br>payout value of<br>share-based<br>awards that<br>have not<br>vested<br> <br>($)	Market or payout<br>value of vested<br>share-based<br>awards not<br>paid out or<br>distributed^(b)(c)^<br> <br>($)
Gilles Labbé		1,315			January 26, 2022
		1,278			April 19, 2022
		1,172			July 26, 2022
		1,075			October 18, 2022
		3,813			November 26, 2022
		1,152			January 23, 2023
		277			February 13, 2023
		1,925			April 17, 2023
		1,665			July 10, 2023
		2,442			September 30, 2023
		1,334			October 16, 2023
		1,658			January 22, 2024
		1,590			April 16, 2024
		1,533			July 23, 2024
		2,500			September 22, 2024
		1,510			October 29, 2024
		1,214			January 21, 2025
		1,014			April 15, 2025
		1,129			July 22, 2025
		1,203			October 14, 2025
									3,435,386
Total:									3,435,386
	Option-based Awards						Share-based Awards
Name	Number<br>of<br>securities<br>underlying<br>unexercised<br>options^(a)^<br><br><br>(#)		Optionexerciseprice ()	Option<br>expiration date		Value<br>ofunexercisedin-the-moneyoptions(b)<br>()	Number<br>of<br>shares or units<br>of shares that<br>have not<br>vested<br> <br>(#)	Market<br>or<br>payout value of<br>share-based<br>awards that<br>have not<br>vested<br> <br>($)	Market or payout<br>value of vested<br>share-based<br>awards not<br>paid out or<br>distributed^(b)(c)^<br> <br>($)
Michael B. Pedersen		0			N/A				1,090,009
Total:									1,090,009
	Option-based Awards						Share-based Awards
Name	Number<br>of<br>securities<br>underlying<br>unexercised<br>options^(a)^<br><br><br>(#)		Optionexerciseprice ()	Option<br>expiration date		Value<br>ofunexercisedin-the-moneyoptions(b)<br>()	Number<br>of<br>shares or units<br>of shares that<br>have not<br>vested<br> <br>(#)	Market<br>or<br>payout value of<br>share-based<br>awards that<br>have not<br>vested<br> <br>($)	Market or payout<br>value of vested<br>share-based<br>awards not<br>paid out or<br>distributed^(b)(c)^<br> <br>($)
Stephen S. Poloz		0			N/A				134,784
Total:									134,784

All values are in US Dollars.

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Appendix B

LOGO

	Option-based Awards						Share-based Awards
Name	Number<br>of<br>securities<br>underlying<br>unexercised<br>options^(a)^<br><br><br>(#)		Optionexerciseprice ()	Option<br>expiration date		Value<br>ofunexercisedin-the-moneyoptions(b)<br>()	Number<br>of<br>shares or units<br>of shares that<br>have not<br>vested<br> <br>(#)	Market<br>or<br>payout value of<br>share-based<br>awards that<br>have not<br>vested<br> <br>($)	Market or payout<br>value of vested<br>share-based<br>awards not<br>paid out or<br>distributed^(b)(c)^<br> <br>($)
Mary G. Powell		0			N/A				80,733
Total:									80,733
	Option-based Awards						Share-based Awards
Name	Number<br>of<br>securities<br>underlying<br>unexercised<br>options^(a)^<br><br><br>(#)		Optionexerciseprice ()	Option<br>expiration date		Value<br>ofunexercisedin-the-moneyoptions(b) ()	Number<br>of<br>shares or units<br>of shares that<br>have not<br>vested<br> <br>(#)	Market<br>or<br>payout value of<br>share-based<br>awards that<br>have not vested<br> <br>($)	Market or payout<br>value of vested<br>share-based<br>awards not<br>paid out or<br>distributed^(b)(c)^<br> <br>($)
Alison C. Reed		0			N/A				0
Total:									0
	Option-based Awards						Share-based Awards
Name	Number<br>of<br>securities<br>underlying<br>unexercised<br>options^(a)^<br><br><br>(#)		Optionexerciseprice ()	Option<br>expiration date		Value<br>ofunexercisedin-the-moneyoptions(b) ()	Number<br>of<br>shares or units<br>of shares that<br>have not<br>vested<br> <br>(#)	Market<br>or<br>payout value of<br>share-based<br>awards that<br>have not vested<br> <br>($)	Market or payout<br>value of vested<br>share-based<br>awards not<br>paid out or<br>distributed^(b)(c)^<br> <br>($)
Michael E. Roach		0			N/A				651,866
Total:									651,866
	Option-based Awards						Share-based Awards
Name	Number<br>of<br>securities<br>underlying<br>unexercised<br>options^(a)^<br><br><br>(#)		Optionexerciseprice ()	Option<br>expiration date		Value<br>ofunexercisedin-the-moneyoptions(b) ()	Number<br>of<br>shares or units<br>of shares that<br>have not<br>vested<br> <br>(#)	Market<br>or<br>payout value of<br>share-based<br>awards that<br>have not vested<br> <br>($)	Market or payout<br>value of vested<br>share-based<br>awards not<br>paid out or<br>distributed^(b)(c)^<br> <br>($)
Kathy N. Waller		0			N/A				527,305
Total:									527,305
	Option-based Awards						Share-based Awards
Name	Number<br>of<br>securities<br>underlying<br>unexercised<br>options^(a)^<br><br><br>(#)		Optionexerciseprice ()	Option<br>expiration date		Value<br>ofunexercisedin-the-moneyoptions(b) ()	Number<br>of<br>shares or units<br>of shares that<br>have not<br>vested<br> <br>(#)	Market<br>or<br>payout value of<br>share-based<br>awards that<br>have not vested<br> <br>($)	Market or payout<br>value of vested<br>share-based<br>awards not<br>paid out or<br>distributed^(b)(c)^<br> <br>($)
Joakim Westh		0			N/A				0
Total:									0

All values are in US Dollars.

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Appendix B

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	Option-based Awards				Share-based Awards
Name	Number<br>of<br>securities<br>underlying<br>unexercised<br>options^(a)^<br><br><br>(#)	Optionexerciseprice ()	Option<br>expiration date	Value<br>of<br>unexercised<br>in-the-money<br>options^(b)^<br> <br>($)	Number<br>of<br>shares or units<br>of shares that<br>have not<br>vested<br> <br>(#)	Market<br>or<br>payout value of<br>share-based<br>awards that<br>have not<br>vested<br> <br>($)	Market or payout<br>value of vested<br>share-based<br>awards not<br>paid out or<br>distributed^(b)(c)^<br> <br>($)
Frank Witter^(e)^	0		N/A	0			32,697
Total:				0			32,697

All values are in US Dollars.

(a)	Shows stock options held as at September 30, 2021.
(b)	Based on $107.59, the closing price of the Company’s Class A subordinate voting shares on the TSX on<br>September 30, 2021, the last trading day in fiscal 2021.
---	---
(c)	Shows the aggregate payout value of DSUs granted in respect of fiscal 2021 and previous fiscal years.<br>
---	---
(d)	Mr. Hearn is not seeking reelection on the Board of Directors and will therefore cease to be a director, the Lead<br>Director, and a member of each of the Human Resources Committee and of the Corporate Governance Committee on February 2, 2022.
---	---
(e)	Mr. Witter joined the Board of Directors on July 1, 2021. Mr. Witter was appointed as member of the<br>Audit and Risk Management Committee on July 27, 2021.
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Appendix C

Shareholder Proposals

Proposal Number One – Increase Formal Employee Representation in Highly Strategic Decision-Making

Proposal

It is proposed that the Board of Directors assess means to increase employee participation in the Board’s decision-making. It is suggested that the findings of this reflection be reported at the next annual meeting in 2023.

The health and economic crisis has reminded us of the importance of employee health and well-being within an organization, the benefits of which are well known: higher level of job satisfaction, deeper sense of belonging, higher commitment rate, increased productivity, reduced absenteeism, lower insurance costs and reduced risks of work-related accidents or illnesses. In the coming years, boards of directors will be faced with a number of issues related to talent development and management.

In recent years, boards of directors have made a point of increasing the quality of their decision-making by drawing on a wide range of experience and skills and by involving as many people as possible of all genders, ages, origins and religions. Although our boards of directors are comprised of a majority of independent directors, they lack an employee vision that could bring an alternative perspective on the organization’s operational and strategic issues, better oversight of senior management decisions and a better balance between decisions made with a short-term perspective and those made with a long-term perspective, since employees tend to focus on the long term.^1^ The most recent edition (2018) of the UK Corporate Governance Code^2^ called for consideration of various initiatives to increase employee participation in the highly strategic decisions of organizations, including the following: the creation of a statutory workforce advisory panel, the appointment of a director to liaise with workers, or the appointment as a director of at least one employee other than the CEO.

We are fully convinced that direct and formal employee contribution into strategic decision-making would be of great value, particularly with regard to decisions that have important talent development and management components. We are therefore tabling this proposal and are confident that, at the next annual meeting in 2023, the Company will propose measures to ensure that its employees are engaged and provide their insights.

Board of Directors Response

At the heart of CGI’s ownership culture is the company’s commitment to always seek the best equilibrium between its three stakeholders: clients, shareholders and employees (whom we call members as 85% of them are also shareholders), while acting as a responsible corporate citizen in the communities where we live and work. Through a systematic, yearly planning exercise, CGI solicits feedback from its stakeholders to ensure that our local and global planning aligns to client demand, shareholder expectations, and member aspirations. Members are empowered and accountable to act as owners by understanding our global strategy and sharing input to help shape our direction.

The process starts with our members who provide input through a bespoke, yearly online consultation. Comprised of quantitative and qualitative questions, the consultation covers all of CGI’s strategic goals. Such questions, measures and indicators are the same that are used throughout the Company. Global, local and comparative results are made visible and monitored at all management levels and by the Board of Directors. They are also regularly reviewed and discussed with all of our members. As a result of the consultation, CGI leaders receive valuable feedback about members’ understanding of the Company’s priorities, members’ views on how effective the Company is in implementing those priorities, and members’ ideas to improve key initiatives and investments. In 2021, over 70% of CGI members participated in the consultation.

Member feedback – along with inputs from clients and shareholders – forms the basis for discussions at our annual leadership conference. After the leadership conference, inputs from our stakeholders, including our members, help inform the proposed adjustments to the Company’s Goals, Measures, and Priorities within our rolling 3-year strategic plan. These

^1^	Andreas KOKKINIS and Konstantinos SERGAKIS, “A flexible model for efficient employee participation in UK<br>companies.” (2020) 20-2 J. Corp. Law Stud. 453-493, DOI: 10.1080/14735970.2020.1735161.
^2^	Financial Reporting Council – 2018 – The UK Corporate Governance Code
---	---
https://www.frc.org.uk/getattachment/88bd8c45-50ea-4841-95b0-d2f4f48069a2/2018-UK-Corporate-Governance-<br> Code-FINAL.PDF
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Appendix C

LOGO

proposed adjustments are discussed and approved by the Executive Committee and the Board of Directors and subsequently cascaded to CGI’s leaders to use in their annual business plans. CGI leaders “close the loop” with members by sharing insights from stakeholders and the resulting operational business plans during our Annual Tour, where members can ask questions to better understand the Company’s strategic direction, how their input helped shape the business plans, and their role in contributing to the success of our Company.

While certain initiatives may work in other jurisdictions, we do not believe that they are appropriate or necessary in our context and we believe that our members are already highly involved in our strategic decision-making.

The Board of Directors therefore recommends that shareholders VOTE AGAINST the proposal regarding increasing formal employee representation in strategic decision-making.

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Appendix C

LOGO

Proposal Number Two – French as the Official Language

Proposal

It is proposed that French be the language of the Company, in particular the language of work in Quebec, including the language used at annual meetings. The official status of the French language must be formally stated in writing in the Company’s letters.

The Company’s head office is in Quebec, a French-speaking nation.

The Nation of Quebec has existed for over 400 years, and the official language of Quebec is French.

The Nation of Quebec is the only French-speaking nation in America.

The language of a people is its most essential and fundamental characteristic – an existential attribute.

The diversity of the world cannot in any way be reduced to matters strictly related to the biological nature of individuals or the arbitration of individual privileges. The diversity of the world is first and foremost a collective matter based essentially on the culture of peoples.

Through its territorial nation and public institutions, starting with its National Assembly, Constitution and Charters, the people of Quebec ensure the protection of linguistic diversity in the world by rigorously protecting the collective and public nature of its language. The spirit of the Legislation is clear,^1^ and that may also be said of the reforms to federal^2^ and Quebec Legislation.^3^

The respect and promotion of this global diversity attribute is notably a matter of social responsibility for all companies.

This is in the interest of all stakeholders, starting with the community as a whole, regardless of background.

Sustainable development and long-term performance cannot be conceived otherwise.

It is the duty of society to show scrupulous respect for these sacred principles.

Also, it is altogether possible to do business anywhere in the world with a head office that operates in the language of the nation where it is located.^4^

For example, the annual general meetings of shareholders of Samsung^1^ (Suwon), Heineken^2^ (Amsterdam), Nissan^3^ (Yokohama), Foxconn^4^ (Taiwan) and Volkswagen^5^ (Wolfsburg) are respectively held in Korean, Dutch, Japanese, Mandarin and German, whereas the meetings of L’Oréal^6^ (Clichy), Danone^7^ (Paris), Christian Dior^8^ (Paris) and LVMH^9^ (Paris) are all held in French. The content is translated into other languages. The principle is simple and clear.

The French language is not an option. It is the collective instrument for communication. Besides, as far as foreign languages are concerned, we can rely on translation, simultaneous or not.

French is the language of all of us.

This is a collective issue of fairness, justice and dignity – a national issue.

^1^	La Charte de la langue française : une entrave […] http://hdl.handle.net/11143/10216
^2^	Bill C-32<br>https://parl.ca/DocumentViewer/en/43-2/bill/C-32/first-reading
---	---
English and French: Towards a Substantive Equality […]<br>https://www.canada.ca/en/canadian-heritage/corporate/publications/general-publications/equality-official-languages.html
---
^3^	Bill 96 http://assnat.qc.ca/en/travaux-parlementaires/projets-loi/projet-loi-96-42-1.html
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^4^	Comment se conclut un « deal » en français? […] http://collections.banq.qc.ca/ark:/52327/1832243<br>
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^1^	AAA 2021 Samsung https://www.youtube.com/watch?v=v8l9iOOv58A
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^2^	AAA 2021 Heineken https://www.theheinekencompany.com/sites/theheinekencompany/files/Downloads/PDF/AGM 2021/20210609%<br>20Heineken N.V. Notulen AvA.pdf
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^3^	AAA 2021 Nissan https://www.youtube.com/watch?v=OS9Sm3Rgt9k
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^4^	AAA 2021 Foxconn https://www.youtube.com/watch?v=pPNJ37Rt3Q0
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^5^	AAA 2021 Volkswagen https://www.volkswagenag.com/de/InvestorRelations/annual-general-meeting.html
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^6^	AAA 2021 THE ORÉAL https://www.loreal-finance.com/fr/assemblee-generale-2021
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^7^	AAA 2021 DANONE https://www.danone.com/fr/investor-relations/shareholders/shareholders-meeting.html<br>
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^8^	AAA 2021 Christian DIOR https://voda.akamaized.net/dior/1520614_605ded3e38389/
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^9^	AAA 2021 LVMH https://www.lvmh.fr/actionnaires/agenda/assemblee-generale-2021/
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2021 MANAGEMENT PROXY CIRCULAR	73
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Appendix C

LOGO

Board of Directors Response

Founded in 1976 in Québec City and proudly headquartered in Montréal, CGI is amongst the largest independent information technology and business consulting services firms in the world.

On a global scale, CGI operates in 40 different countries through 80,000 consultants and professionals and across 400 offices worldwide. We provide an inclusive and diverse work environment that reflects the communities in which we operate. Our employees, whom we call members as 85% of them are also owners of the Company, speak more than 30 languages in their respective workplaces.

In the province of Quebec, CGI employs approximately 7,500 consultants and professionals across Quebec and has offices located in Montréal, Québec City, Gatineau, Drummondville, Saguenay, Sherbrooke and Shawinigan. Across Quebec, our activities support a network of more than 950 suppliers, including some 300 information technology specialists from small and medium enterprises. CGI is a major contributor to the development and growth of Quebec’s information technology sector.

As an organization that does business in Quebec, we comply with the Charter of the French Language and other laws and regulations applicable in Quebec, including those that pertain to language. CGI adheres to all requirements related to the French language in its business activities and operations in Quebec. We are committed to utilizing and promoting the French language in Quebec by ensuring that our three stakeholders (our clients, shareholders and members) can communicate with us, receive services or communications, and work, in French.

CGI’s shareholders are diverse both because we are a multinational company and because a vast majority of our 80,000 worldwide members are also shareholders through our share purchase plan. In an effort to promote meaningful dialogue with all our shareholders, our annual general meetings are conducted in both French and English. Any portion of our meeting conducted in English is simultaneously translated into French and our meetings can easily and freely be listened to, in their entirety, in French, at the choice of the participant. Furthermore, all of our meeting material is available in French and all shareholders at our meetings are encouraged to ask questions and vote in the language of their choice.

The Board of Directors recommends that shareholders VOTEAGAINST the proposal regarding the French language being the sole language of use at the Company’s annual general meetings and the inclusion of the status of the French language in the Company’s constating documents.

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Appendix C

LOGO

Proposal Number Three – Representation of Women inManagement

Proposal

It is proposed that the Company publish, on an annual basis, in the form it sees fit, a report on the representation of women in management positions, from entry-level positions to senior-level positions, immediately below the position of president.

The pandemic has completely transformed our economy and our various work environments. The crisis has hit women particularly hard. Millions of them had to quit their jobs or go part-time, or were simply laid off, due to the nature of their work or the economic sector in which they worked. As a result, companies find themselves with far fewer women in management positions or on the path to becoming future leaders. This will only exacerbate a situation that already existed. According to a study by McKenzie,^1^ although 50% of entry-level positions in the Canadian organizations surveyed by this firm are held by women, this percentage falls to 31% in vice-president positions and to 14% in CEO positions, as illustrated in the chart below.

LOGO

Notably, there are measures “to help women lessen the career and financial impacts of unpaid parental leave and part-time work”^2^, as women are still more likely than men to experience this kind of professional situation, which constitutes a barrier to their advancement.

Companies cannot risk losing more women in management positions. The report proposed here will provide an overview of the situation at these different levels, encourage senior management to set gender diversity targets for each level and inform all stakeholders of the strategies that will be implemented to ensure a strong business recovery, especially after the health crisis comes to an end.

Board of Directors Response

In our annual Corporate Social Responsibility Annual Report, we include gender split percentages by total employees and by management roles. This annual report is available on our website. See the following link: https://www.cgi.com/en/brochure/corporate-social-responsibility/cgi-csr-2020-report.

In all countries in which it is required, we provide gender split data to governments and regulatory bodies for employment and pay practices to ensure equitable opportunity for women. This includes Pay Equity practices in Canada (Quebec and Ontario) and the Federal Contractors Program for Employment Equity. In addition, CGI’s 2020 UK Gender Pay Gap Report is also available online at: https://www.cgi.com/sites/default/files/2020-07/cgi-gender-pay-gap-report-2020.pdf.

^1^	The Present and Future of Women at Work in Canada
https://www.mckinsey.com/~/media/mckinsey/featured%20insights/gender%20equality/<br>the%20present%20and%20future%20of%20women%20at%20work%20in%20canada/<br><br>the-present-and-future-of-women-at-work-in-canada-vf.ashx
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^2^	Ibid, see the Shared Care program of the Australian company Aurizon, among other examples.
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Appendix C

LOGO

Globally, we have numerous programs specifically targeted to women to support career progression across all of our Strategic Business Units. Some examples include: Women in Technology Mentoring Program (Canada); L’Effet A/Ambition Challenge (Canada, France) for high potential leaders; EmpowHer (Central and Eastern Europe) leadership development for high potential consultants; Promotion Panel Preparation Sessions for Women (United Kingdom and Australia).

Our global Women of CGI network aims to support the overall success of women in our organization through programs and initiatives that offer personal and professional development, foster talent, create networking opportunities for members, and enable collaboration with local, national, and external networks. This translates into local Women’s Networks, which are resource affinity groups for women. Some examples include: Les essentielles (Quebec); Women of CGI (Canada); Germany Wing Women; Women to Women (Finland, Poland Baltics); Women in IT (Sweden); Women’s Resource Group (Uk&A); and Gender Equity (Western and Southern Europe). These groups collaborate globally and are involved in efforts including supporting women’s programs to advance more women towards a career in technology and consulting.

CGI is also flexible with members who have family care responsibilities. Leaders meet with members to understand their unique situation and provide support and flexibility on their work arrangements. In Canada, CGI provides maternity leave top-up pay to ensure better income continuity for the first few months of leave. In Asia Pacific and the United Kingdom & Australia, there are specific programs to support women who take maternity leave, with a goal of providing support for returning to the workplace and balancing new priorities.

In addition, CGI has committed to the 50-30 Challenge in Canada to work towards having 50% of our executive team be comprised of women.

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Appendix C

LOGO

Proposal Number Four – Advisory Vote on theCompensation

Proposal

It is proposed that the Company hold an advisory vote on its compensation policy at each annual meeting of shareholders, as many companies already do, including several companies whose control is guaranteed by multiple voting shares. The Company has received this shareholder proposal every year since 2015, i.e., as long as it has been allowed by Legislation. Every year, the number of votes cast in support of the proposal far exceeds the threshold necessary to guarantee the right to resubmit it. On two occasions, the proposal was not submitted to a vote by shareholders, with our consent, in the hope that the advisory vote would be implemented one day. In 2021, with our consent and as a benevolent gesture, the proposal was not submitted to a vote by shareholders in order to take into account the exceptional nature of the health crisis.

The voting results in support of this proposal are:

Year	Advisory Vote
2015	13.6%
2016	15.4%
2017	15.8%
2018	X
2019	22.94%
2020	X
2021	X

X: proposal not submitted to a vote, with our consent

Board of Directors Response

Devising a compensation policy for a successful business is a challenging task that requires a deep understanding of the Company’s business and its competitive environment.

CGI’s directors have developed an executive compensation policy that emphasizes incentive compensation linked to business performance, aligning the financial interests of executives with those of shareholders. Bonuses are only paid when shareholder wealth has been created. CGI measures business performance on the basis of profitability and growth as well as client and member satisfaction. These factors drive the Company’s compensation programs, which are designed to attract and retain the key talent CGI needs to remain competitive in a challenging market and achieve continued and profitable growth for shareholders.

Advisory votes, by their binary yes or no nature, do not provide useful insight to the Board of Directors and therefore cannot promote meaningful dialogue with shareholders. The current Canadian regulatory framework prevents public companies from knowing who their shareholders really are and it is therefore unclear how an advisory vote can lead to a meaningful dialogue with shareholders who, for the most part, remain anonymous.

CGI holds numerous meeting and has on-going dialogue with shareholders and other investors. These meetings provide a real opportunity for dialogue to address any shareholder questions on executive compensation in a manner that is much more meaningful than an advisory vote. The Médac, the organisation that submitted this proposal, was invited to such meetings but never attended.

The Company, through its Shareholder Satisfaction Assessment Program (“SSAP”), solicits direct shareholder feedback on key corporate governance practices and requests shareholder ratings of governance practices on a 10-point scale. The average SSAP score of the Company in fiscal 2021 was 8.2/10, including as it pertains to our executive compensation practices. The Company is committed to maintaining an open and transparent dialogue with its shareholders and responding to any questions they have with respect to executive compensation.

The advisory vote process also raises the question of whether all shareholders should benefit from the same voting rights. Studies have shown that, on average, shares of North American public companies are held for short periods of time, often less than six months. Passive investment vehicles and instruments result in shareholders’ rights now being exercised by

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Appendix C

LOGO

intermediaries rather than beneficial owners. This problem is exacerbated by the fact that transactions are often dictated by algorithms rather than investment decisions based on an analysis of companies’ long-term prospects.

Furthermore, several institutional investors exercise their voting power based on the recommendations of proxy advisory firms, thereby essentially delegating their voting rights to them. Our experience has been that these firms’ one-size-fits-all approach and the quality of their research can be deficient. Advisory firms are also often in blatant conflicts of interest as they provide corporate governance advisory services while also providing voting recommendations based on the practices that they advocate.

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Appendix C

LOGO

Proposal Number Five – Disclosure of Voting Results byClass of Shares

Proposal

It is proposed that the Company break down, by share category, the voting results it publishes in its official report after every annual meeting, i.e., those shares that confer only one voting right and those that confer multiple voting rights, as a number of companies of the same type are already doing.

The Company has received this shareholder proposal every year since 2016. Every year, the number of votes cast in support of the proposal far exceeds the threshold required to guarantee the right to resubmit it. In 2021, with our consent and as a benevolent gesture, the proposal was not submitted to a vote by shareholders in order to consider the exceptional nature of the health crisis.

The voting results in support of this proposal are:

Year	Breakdown
2016	16.9%
2017	15.5%
2018	17.0%
2019	21.91%
2020	24.85%
2021	X

X: proposal not submitted to a vote, with our consent

Board of Directors Response

The Company and the Board of Directors reaffirm the position previously communicated with respect to this proposal.

CGI’s disclosure practice regarding voting results complies with the rules set out by the Business Corporations Act (Quebec), which govern the Company and provide that the declaration of the chair of the meeting to the effect that a resolution was passed is sufficient and appropriate. The Company considers that all votes should be treated equally and that there are no legal or practical reasons for distinguishing between classes of shares.

The Board of Directors believes that disclosing the voting results separately for each class of shares would not provide any additional protection or benefits to the holders of Class A subordinate voting shares. Our position is in line with applicable legislation, which does not require the disclosure of votes per class of shares but otherwise contains sections dealing with the protection of shareholders. Our Lead Director and other members of the Board of Directors, which is composed of a majority of independent directors, also have the fiduciary obligation to ensure that the interests of all shareholders, irrespective of the class of shares held, are adequately protected.

Furthermore, we believe that the interests of the vast majority of CGI’s shareholders are well aligned, and that the culture of transparency and dialogue established between CGI and its shareholders ensures that all shareholders who wish to be heard have the opportunity to engage in dialogue with the Company. CGI shareholders have access to a broad range of information through the continuous disclosure documents of the Company. As such, they invest in CGI knowing the manner in which CGI’s share capital is structured and characteristics attributed to the multiple voting shares.

Numerous studies, including that prepared by National Bank of Canada (The Family Advantage – The Continued Outperformance of Family-Controlled Companies – Fall 2020 Edition), the Institute for governance of private and public organisations (The Case for Dual-Class Shares, 2019) and Rotman School of Management, University of Toronto (The Long-Term Survival of Family Business, April 2018) all confirm the superior results produced by controlled companies. The Canadian economy is largely dependent on controlled companies. Leaving aside companies whose ownership structure is regulated, few Canadian companies would have survived for decades without the protection offered by such ownership structure. Many key Canadian companies would have disappeared over the years, with considerable negative impact on the Canadian economy and its employment market. Therefore, the Company is of the view that the Médac, the organisation that submitted this proposal, is not acting in the best interest of Quebec and Canadian-based companies by targeting controlled companies.

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Insights you can act on Founded in 1976, CGI is among the largest IT and business consulting services firms in the world. We are insights-driven and outcomes-based to help accelerate returns on your investments. Across hundreds of locations worldwide, we provide comprehensive, scalable and sustainable IT and business consulting services that are informed globally and delivered locally. cgi.com CGI