SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 
 FORM 40-F
  o
    
    Registration statement pursuant to Section 12 of the Securities Exchange Act of 1934
 or
 þ
    
    Annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934
 For the fiscal year ended September 30, 2010
 Commission
file number 1-14858
 GROUPE CGI INC./CGI GROUP INC.
 (Exact name of Registrant as Specified in Its Charter)
 (Translation of Registrants Name Into English)
 (Province or Other Jurisdiction of Incorporation or Organization)
 (Primary Standard Industrial Classification Code Number)
 (I.R.S. Employer Identification Number)
 th     (Address and Telephone Number of Registrants Principal Executive Offices)
 (Name, Address and Telephone Number of Agent For Service in the United States)
  Title Of Each Class
    
    Name Of Each Exchange On Which RegisteredClass A Subordinate Voting Shares
    
    New York Stock Exchange
  
    þ þ
  o þ
 þ o
 o o




---



##### 



Undertaking
  Controls and Procedures
  Audit Committee
    -
    
    Gilles Labbé, and-
    
    Eileen A. Mercier
 Principal Accountant Fees and Services
  Performance of Services
   - 2 -




---



##### 



Governance Procedures
    
    
    The Audit and Risk Management Committee can pre-approve envelopes for certain services
to pre-determined dollar limits on a quarterly basis;
    
    Once pre-approved by the Audit and Risk Management Committee, the Executive
Vice-President and Chief Financial Officer may approve the services prior to the
engagement;
    
    For services not captured within the pre-approved envelopes and for costs in excess of
the pre-approved amounts, separate requests for approval must be submitted to the Audit and
Risk Management Committee;
    
    At each meeting of the Audit and Risk Management Committee a consolidated summary of all
fees by service type is presented including a break down of fees incurred within each of
the pre-approved envelopes.
 Fees Paid to External Auditors
  Fees paidService retained
    
    2010(a)
    
    2009(b)Audit fees
    
    $
    2,594,000
    
    
    $
    3,152,914Audit related fees (c)
    
    $
    482,061
    
    
    $
    2,676,048Tax fees (d)
    
    $
    108,380
    
    
    $
    173,697All other fees(e)
    
    $
    4,989
    
    
    
    Total fees paid
    
    $
    3,189,430
    
    
    $
    6,002,659
 
 (a)
    
    The fees billed for the year ended September 30, 2010 were for services
rendered by Ernst & Young LLP, the Companys current external auditors.(b)
    
    The fees billed for the year ended September 30, 2009 were for services rendered by
Deloitte & Touche LLP, the Companys former external auditors.(c)
    
    The audit related fees billed by the external auditors for the year ended September
30, 2010 were in relation to service organization control procedures audits and
assistance and International Financial Reporting Standards transition assistance, and
those billed for the year ended September 30, 2009 were in relation to service
organization control procedures audits, accounting consultations and employee benefit
plan audits.(d)
    
    The tax fees billed by the external auditors for the year ended September 30, 2010
were in relation to tax research and advisory services and those billed for the year
ended September 30, 2009 were in relation to tax research and interpretation, support - 3 -




---



##### 



activities related to tax audit, and preparation of personal tax returns, principally on
behalf of expatriates. None of the persons for whom tax returns were prepared were
officers of the Company.(e)
    
    The other fees billed by the external auditors for the year ended September 30, 2010
were in relation to government contract compliance services. Code of Ethics
 Code of Ethics and Business Conduct Executive Code of Conduct Executive Code of Conduct
 -
    
    Honest and ethical conduct, including the ethical handling of actual or
apparent conflicts of interest between personal and professional relationships;-
    
    Full, fair, accurate, timely, and understandable disclosure in reports and
documents that the Registrant files with, or submits to, the Securities and
Exchange Commission and in other public communications made by the Registrant;-
    
    Compliance with applicable governmental laws, rules and regulations;-
    
    The prompt internal reporting of violations of the code to an appropriate
person or persons identified in the code; and-
    
    Accountability for adherence to the code.
 Executive Code of Conduct Code of Ethics and Business Conduct
  Corporate Governance Practices
 New York Stock Exchange
 Off-balance sheet arrangements
   - 4 -




---



##### 



Tabular Presentation of Contractual Obligations
  Payment due by periodContractual Obligations
    
    
    
    
    
    Less than
    
    2ndand 3rd
    
    4thand 5th
    
    After(in 000 of Canadian dollars)
    
    Total
    
    1 year
    
    years
    
    years
    
    5 yearsLong-Term Debt Obligations
    
    
    1,096,171
    
    
    
    95,169
    
    
    
    973,386
    
    
    
    26,225
    
    
    
    1,391Capital (Finance) Lease Obligations
    
    
    57,705
    
    
    
    19,408
    
    
    
    27,764
    
    
    
    9,038
    
    
    
    1,495Operating Lease Obligations(1)
    
    
    917,834
    
    
    
    135,003
    
    
    
    223,209
    
    
    
    172,874
    
    
    
    386,748Purchase Obligations
    
    
    118,084
    
    
    
    64,600
    
    
    
    46,374
    
    
    
    6,482
    
    
    
    628Total
    
    
    2,189,794
    
    
    
    314,180
    
    
    
    1,270,733
    
    
    
    214,619
    
    
    
    390,262
 
 (1)
    
    Included in these obligations are $16.8 million of office space leases from past
acquisitions. Information to be Filed on This Form
  1.
    
    Annual Information Form for the fiscal year ended September 30, 20102.
    
    Audited Annual Financial Statements for the fiscal year ended September 30, 20103.
    
    Managements Discussion and Analysis of Financial Position and Results of Operations
  23.1
    
    Consent of Ernst & Young LLP99.1
    
    Certification of the Registrants Chief Executive Officer required pursuant to Rule 13a-14(a).99.2
    
    Certification of the Registrants Chief Financial Officer required pursuant to Rule 13a-14(a).99.3
    
    Certification of the Registrants Chief Executive Officer pursuant to 18 U.S.C. Section 1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.99.4
    
    Certification of the Registrants Chief Financial Officer pursuant to 18 U.S.C. Section 1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 - 5 -




---



##### 



ANNUAL INFORMATION FORM




---



##### 



i TABLE OF CONTENTS
 INCORPORATION AND DESCRIPTION OF CAPITAL STOCK
    
    
    1Corporate Structure
    
    
    1Subsidiaries
    
    
    1Capital Structure
    
    
    2Stock Splits
    
    
    2Market for Securities, Trading Price and Volume
    
    
    2Normal Course Issuer Bid and Share Repurchases
    
    
    3CORPORATE GOVERNANCE
    
    
    3Board and Standing Committee Charters and Codes of Ethics
    
    
    3Audit Committee Information
    
    
    3Directors and Officers
    
    
    3Directors
    
    
    3Officers
    
    
    3Ownership of Securities on the Part of Directors and Officers
    
    
    5DESCRIPTION OF CGIS BUSINESS
    
    
    5Mission and Vision
    
    
    5Business Structure
    
    
    5Services Offered by CGI
    
    
    5Management of IT and business functions (outsourcing)
    
    
    6Consulting and Systems Integration
    
    
    6Markets for CGIs services
    
    
    6Client Base
    
    
    6Human Resources
    
    
    6CGI Offices and Global Delivery Model
    
    
    7Commercial Alliances
    
    
    7Quality Processes
    
    
    7The Information Technology Services Industry
    
    
    8Size, Structure and Recent Developments
    
    
    8Industry Trends and Outlook
    
    
    8CGIs Growth and Positioning Strategy
    
    
    8Significant developments of the most recent three fiscal years
    
    
    9Key Performance Measures
    
    
    9Fiscal Year ended September 30, 2010
    
    
    10Fiscal Year ended September 30, 2009
    
    
    14Fiscal Year ended September 30, 2008
    
    
    17FORWARD LOOKING INFORMATION AND RISK FACTORS
    
    
    19Forward-Looking Information
    
    
    19Risk Factors
    
    
    19Risks Related to the Market
    
    
    20Economic risk
    
    
    20Risks Related to our Industry
    
    
    20The competition for contracts
    
    
    20The length of the sales cycle for major outsourcing contracts
    
    
    20The availability and retention of qualified IT professionals
    
    
    20The ability to develop and expand service offerings
    
    
    20Infringing on the intellectual property rights of others
    
    
    21Benchmarking provisions within certain contracts
    
    
    21Protecting our intellectual property rights
    
    
    21Risks Related to our Business
    
    
    21Business mix variations
    
    
    21The financial and operational risks inherent in worldwide operations
    
    
    21Credit risk with respect to accounts receivable
    
    
    22Material developments regarding major commercial clients
    
    
    22Early termination risk
    
    
    22Cost estimation risks
    
    
    22Risks related to teaming agreements and subcontracts
    
    
    23Our partners ability to deliver on their commitments
    
    
    23




---



##### 



ii Guarantees risk
    
    
    23Risk related to human resources utilization rates
    
    
    23Client concentration risk
    
    
    23Government business risk
    
    
    23Regulatory risk
    
    
    24Legal claims made against our work
    
    
    24Information and infrastructure risks
    
    
    24Risk of harm to our reputation
    
    
    25Risks associated with acquisitions
    
    
    25Risks associated with the integration of new operations
    
    
    25Liquidity and funding risks
    
    
    25LEGAL PROCEEDINGS
    
    
    25INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS
    
    
    26TRANSFER AGENT AND REGISTRAR
    
    
    26AUDITORS
    
    
    26ADDITIONAL INFORMATION
    
    
    26APPENDIX A
    
    
    27Fundamental Texts
    
    
    27




---



##### 



Annual Information Form
 
 INCORPORATION AND DESCRIPTION OF CAPITAL STOCK
 
 Corporate Structure
 CGI Group Inc. Companies Act . Conseillers
en gestion et informatique CGI inc.
 
 Subsidiaries




---



##### 



2 
 Capital Structure
  Management Proxy Circular Management Proxy Circular
 
 Stock Splits
  
    
    August 12, 1997 on a two for one basis;
    
    December 15, 1997 on a two for one basis;
    
    May 21, 1998 on a two for one basis; and
    
    January 7, 2000 on a two for one basis.
 
 Market for Securities, Trading Price and Volume
 Toronto Stock Exchange New York Stock Exchange Toronto Stock Exchange
 High(a)
    
    
    Low(a)Month
    
    
    ($)
    
    
    ($)
    
    
    VolumeOctober 2009
    
    
    13.90
    
    
    12.07
    
    
    21,680,326November 2009
    
    
    13.50
    
    
    12.11
    
    
    19,703,686December 2009
    
    
    14.78
    
    
    13.02
    
    
    14,982,923January 2010
    
    
    15.21
    
    
    13.93
    
    
    19,158,920February 2010
    
    
    15.24
    
    
    13.86
    
    
    14,671,557March 2010
    
    
    15.74
    
    
    14.76
    
    
    16,558,608April 2010
    
    
    15.64
    
    
    14.64
    
    
    17,893,843May 2010
    
    
    16.66
    
    
    14.73
    
    
    22,172,541June 2010
    
    
    16.80
    
    
    15.77
    
    
    20,097,411July 2010
    
    
    16.79
    
    
    14.34
    
    
    21,647,153August 2010
    
    
    15.33
    
    
    14.38
    
    
    13,714,616September 2010
    
    
    15.79
    
    
    14.35
    
    
    21,978,603
 (a)
    
    The high and low prices reflect the highest and
lowest prices at which a board lot trade was executed in a
trading session during the month.




---



##### 



3 
 Normal Course Issuer Bid and Share Repurchases
 Significant developments of the most recent three fiscal years  Fiscal
Year ended September 30, 2010  Significant Developments
 
 CORPORATE GOVERNANCE
 
 Board and Standing Committee Charters and Codes of Ethics
 Audit and Risk Management Committee Fundamental Texts Annual Information Form
 
 Audit Committee Information
 Expertise and
financial and operational literacy Report of the
Audit and Risk Management Committee Management Proxy Circular Management Proxy
Circular
 
 Directors and Officers
 
 Directors
 Nominees for Election as
Directors Management Proxy Circular Management Proxy Circular
 
 Officers
  Name and place of residence
    
    
    Principal occupationR. David Anderson
Montreal, Quebec
Canada
    
    
    Executive Vice-President and Chief Financial OfficerFrançois Boulanger
Brossard, Quebec
Canada
    
    
    Senior Vice-President and Corporate ControllerBenoit Dubé
St-Lambert, Quebec
Canada
    
    
    Executive Vice-President and Chief Legal OfficerJulie Godin 
Verdun (Ile des soeurs), Quebec
Canada
    
    
    Senior Vice-President, Human Resources, Leadership
& Organizational Development




---



##### 



4 Name and place of residence
    
    
    Principal occupationSerge Godin
Westmount, Quebec
Canada
    
    
    Founder and Executive Chairman of the BoardAndré Imbeau
Beloeil, Quebec
Canada
    
    
    Founder, Executive Vice-Chairman of the Board and Corporate SecretaryEva Maglis
Montreal, Quebec
Canada
    
    
    Senior Vice-President and General ManagerClaude Marcoux
Sainte-Foy, Quebec
Canada
    
    
    Senior Vice-President and General ManagerDoug McCuaig
Toronto, Ontario
Canada
    
    
    President, CanadaDonna S. Morea
Falls Church, Virginia
USA
    
    
    President, U.S., Europe and AsiaLuc Pinard
St-Lambert, Quebec
Canada
    
    
    Executive Vice-President, Chief Technology and Quality OfficerMichael E. Roach
Outremont, Quebec
Canada
    
    
    President and Chief Executive OfficerDaniel Rocheleau
Longueuil, Quebec
Canada
    
    
    Executive Vice-President and Chief Business Engineering OfficerJacques Roy
Boucherville, Quebec
Canada
    
    
    Senior Vice-President, Finance and TreasuryClaude Séguin
Montreal, Quebec
Canada
    
    
    Senior Vice-President, Corporate Development and Strategic InvestmentsGeorge Schindler
Fairfax, Virginia
USA
    
    
    President, CGI FederalNazzic Turner
Oakton, Virginia
USA
    
    
    Senior Vice-President and General Manager
 Oxygène Santé Corporative Inc.,




---



##### 



5 
 Ownership of Securities on the Part of Directors and Officers
 Principal Holders of Class A
Subordinate Voting Shares and Class B Shares Management Proxy Circular Management Proxy
Circular
 
 DESCRIPTION OF CGIS BUSINESS
 
 Mission and Vision
  Mission, Vision, Dream and Values Fundamental Texts, which
 
 Business Structure
   (In 000 of dollars)Segment
    
    
    2010
    
    
    
    2009CanadaBefore foreign currency impact
    
    
    $
    2,121,123
    
    
    
    $
    2,179,659Foreign currency impact
    
    
    
    ($8,711
    )Canada revenue
    
    
    $
    2,112,412
    
    
    
    $
    2,179,659U.S.Before foreign currency impact
    
    
    $
    1,588,746
    
    
    
    $
    1,361,787Foreign currency impact
    
    
    
    ($188,347
    )U.S. revenue
    
    
    $
    1,400,399
    
    
    
    $
    1,361,787EuropeBefore foreign currency impact
    
    
    
    245,522
    
    
    
    $
    283,715Foreign currency impact
    
    
    
    ($26,216
    )Europe revenue
    
    
    $
    219,306
    
    
    
    $
    283,715Total
    
    
    $
    3,732,117
    
    
    
    $
    3,825,161
 
 Services Offered by CGI
   
    
    Momentum is an integrated enterprise resource planning suite with over 100
installations across the three branches of the U.S. federal government, including 16
agencies subject to the Chief Financial Officer and Federal Financial Reform Act of 1990.




---



##### 



6 
 
    
    CGIs AMS Advantage is an enterprise resource planning suite that 25 U.S. state
governments rely on to support financial management.
 
    
    MSuite®, PrimeSuite are robust wealth management solutions widely adopted in the
Canadian financial industry.
 
 Management of IT and business functions (outsourcing)
  
 Consulting and Systems Integration
   
 Markets for CGIs Services
  
 Client Base
  
 Human Resources
 Profit Participation Plan




---



##### 



7 
 CGI Offices and Global Delivery Model
  Annual Report Thank You 2010 Annual Report 2010 Annual Report
  
 Commercial Alliances
  
 Quality Processes
  Project Management Framework
 Client Partnership Management Framework IMRglobal
 Member Partnership Management
Framework Shareholder Partnership Management Framework




---



##### 



8  
 The IT Services Industry
 
 Size, Structure and Recent Developments
 International Data Corp.
  
 Industry Trends and Outlook
    
 CGIs Growth and Positioning Strategy
   CGI Offices and Global
Delivery Model




---



##### 



9 Markets for CGIs services
 Build and Buy
     
 Significant Developments of the Most Recent Three Fiscal Years
 
 Key Performance Measures
  Profitability
    
    
    
    Adjusted EBIT is a measure of earnings before
items not directly related to the cost of operations.
We define this measure as earnings from continuing
operations before acquisition-related and integration
costs, interest on long-term debt, interest income,
other (income) expenses, gain on sale of capital assets,
and income tax expense. Management believes this
measure best reflects the profitability of our
operations.
    
    Diluted earnings per share from continuing
operations attributable to shareholders of CGI is a
measure of earnings generated for shareholders on a per
share basis, assuming all in-the-money options
outstanding are exercised.Liquidity
    
    
    
    Cash provided by continuing operating activities
 is a measure of cash generated from managing our
day-to-day business operations. We believe strong
operating cash flow is indicative of financial
flexibility, allowing us to execute our corporate
strategy.
    
    Days sales outstanding is the average number
of days to convert our trade receivables and work in
progress into cash. Management tracks this metric
closely to ensure timely collection, healthy liquidity,
and is committed to maintaining a DSO below its 45-day
target.




---



##### 



10 Growth
    
    
    
    Constant currency growth is a measure of
revenue growth before foreign currency impacts. We
believe that it is helpful to adjust revenue to exclude
the impact of currency fluctuations to better understand
trends in the business.
    
    Backlog represents managements best estimate
of revenue to be realized in the future based on the
terms of respective client agreements active at a point
in time.
    
    Book-to-Bill ratio is a measure of the
proportion of contract wins to our revenue in the
period. This metric allows management to monitor the
companys business development efforts to ensure we grow
our backlog and our business over time. Management
remains committed to maintaining a target ratio greater
than 100% over a 12-month period. Management believes
that the longer period is a more effective measure as
the size and timing of bookings could cause this
measurement to fluctuate significantly if taken for only
a three-month period.Capital Structure
    
    
    
    Net Debt to Capitalization ratio is a measure
of our level of financial leverage net of our cash and
cash equivalents and short-term investment position.
Management uses this metric to monitor the proportion of
debt versus capital used to finance our operations and
it provides insight into our financial strength.
    
    Return on Equity is a measure of the rate of
return on the ownership interest of our shareholders.
Management looks at ROE to measure its efficiency at
generating profits for the Companys shareholders and
how well the Company uses the invested funds to generate
earnings growth.
    
    Return on Invested Capital is a measure of
the Companys efficiency at allocating the capital under
its control to profitable investments. Management
examines this ratio to assess how well it is using its
money to generate returns.
 
 Fiscal Year ended September 30, 2010
 Significant Developments
  
    
    Bookings of $4.6 billion;
    
    Book-to-bill ratio of 124%;
    
    Constant currency growth of 3.4%;
    
    Adjusted EBIT margin remained strong at 13.7%;
    
    Basic and diluted EPS from continuing operations grew by 23.3% and 21.6% respectively;
    
    Return on equity reached 16.4%;
    
    Return on invested capital remains high at 16.3%;
    
    Cash provided by continuing operating activities remained strong, representing 14.8% of
revenue; and
    
    Repurchased 35.6 million Class A subordinate voting shares of the Company.




---



##### 



11 
 Acquisition of Stanley Inc.
       Bookings and Book-to-Bill Ratio




---



##### 



12 Significant Bookings in the Year
 Announcement Date
    
    Client
    
    Duration
    
    ValueOctober 5, 2009
    
    U.S. Environmental Protection Agency
(EPA)
    
    Seven years
    
    Not releasedCGI Federal will deliver IT infrastructure support services to the EPA under the newly
established ITS-EPA II program and will assist the Office of Environmental Information in
achieving more innovative, agile, and scalable IT services for the ITS-EPA II program. The
seven-year agreement, awarded to seven vendors includes a US$955 million ceiling value
over the BPA  ́s period of performance and positions.November 3, 2009
    
    Yellow Pages Group
    
    10-year extension
    
    $100 millionCGI will manage the applications and infrastructure of Yellow Pages Groups computer
network, as well as other projects, namely business intelligence and the optimization of
the companys research tools.November 5, 2009
    
    U.S. Department of Housing and Urban
Development (HUD)
    
    One year renewal
    
    US$58.1 millionCGI administers HUD multi-family housing programs in California, Florida, New York, Ohio
and Washington, DC, in conjunction with its state and local housing agency partners.December 15, 2009
    
    North American financial institutions
    
    New contracts & renewals
    
    $1.1 billionCGI has signed new contracts and renewals with North American financial institutions
totaling $1.1 billion during its fiscal 2010 first quarter (October-December). Services
provided under these new deals include systems integration, application maintenance,
IP-based solutions as well as long term, multi-year managed services contracts.January 19, 2010
    
    U.S. Department of State and U.S.
Agency for International Development
    
    10 years
    
    US$395 millionCGI will provide systems integration, consulting services, and operational support for
more than 5,000 Joint Financial Management System users in more than 300 posts and
missions around the world.April 6, 2010
    
    Telekomunikacja Polska Group
    
    Three years
    
    Not releasedCGI frameworks will be deployed to help TP Group consolidate its current multi
application, multi vendor environment to improve overall time to market and total cost of
ownership.May 4, 2010
    
    California Department of Health Care
Services
    
    10 years
    
    US$168 millionCGI partners with ACS to deliver enhanced fiscal intermediary administrative services and
an advanced Medicaid Management Information System for Californias Department of Health
Care Services.May 18, 2010
    
    Centers for Medicare & Medicaid Services
    
    Five years
    
    US$73.2 millionCGI will continue the modernization, application management, and maintenance efforts on
three external websites that provide information to 44 million beneficiaries and millions
more healthcare providers and other stakeholders.




---



##### 



13 Announcement Date
    
    Client
    
    Duration
    
    ValueJune 17, 2010
    
    State of Maine
    
    11 years
    
    Not releasedCGI will deliver managed application services for the States AMS Advantage® enterprise
resource planning system which supports financial management and procurement operations.
CGI will host the States AMS Advantage ERP system and provide disaster recovery services.
CGI will also manage operations of all technical aspects of the system during the term of
the contract.June 29, 2010
    
    Atlantic Lottery Corporation
    
    Seven years
    
    $125 millionCGI will manage Atlantic Lotterys data center and provide related application support and
development.July 7, 2010
    
    The Beer Store
    
    Seven years
    
    Not releasedThis new agreement establishes CGI as the infrastructure IT supplier for The Beer Store,
and also encompasses infrastructure services for Brewers Distributor Ltd. (BDL), a
wholesale distributor of beer and the collector of returnable, refillable and recyclable
beer containers within the four Western Canadian Provinces, as well as Northwest
Territories and the Yukon.July 20, 2010
    
    Rexel Group
    
    Six years
    
    $50 millionThis new agreement, which will support productivity improvements, establishes CGI as not
only one of the preferred IT suppliers for Rexels Canadian operations, but also for
Rexels U.S. operations.July 29, 2010
    
    Manulife Financial
    
    Until 2013
    
    Not releasedUnder the contract renewal, CGI will continue to leverage its Halifax delivery center to
provide systems development, maintenance and integration services to Manulife Financial.August 9, 2010
    
    eHealth Ontario
    
    Six years
    
    $46 millionCGI will design, build, implement and manage a province-wide chronic disease management
system and portal which will be used initially to better manage diabetes care, a top
clinical priority for eHealth Ontario.August 11, 2010
    
    Plexxus
    
    Five years
    
    $34 millionCGI will support Plexxus in the design, build, implementation and management of on-going
IT services including SAP supply chain and finance systems for Plexxus, a not-for-profit
organization and its 12 member hospitals.September 30, 2010
    
    U.S. General Services Administration
    
    Five years
    
    US$46 millionUnder the Data.gov Dataset Hosting Services BPA, CGI will provide hosting services for
this important government information, as well as technology tools for dataset analysis,
and professional services.October 5, 2010
    
    Bombardier Aerospace
    
    Five years
    
    US$160 millionCGI will be responsible for delivering various types of IT infrastructure services to
Bombardier Aerospace, including end-user device support, service desk, telephony and local
area network. CGI is also responsible for Canadian legacy application support. This
contract was signed prior to but announced subsequent to our year-end.




---



##### 



14 Share Repurchase Program
   Foreign currency impact
  
 Fiscal Year ended September 30, 2009
 Significant Developments
   
    
    Bookings over $4 billion, exceeding our target of 100% book-to-bill ratio;
    
    Revenue of $3.8 billion, an increase of 3.2% year-over-year;
    
    The cost of services, selling and administrative expenses as a percentage of revenue was
lowered to 82.9% from 83.9% in the prior year;
    
    Higher adjusted EBIT margin, earnings from continuing operations margin, and net
earnings margin compared to fiscal 2008 and 2007;
    
    Both basic and diluted earnings per share from continuing operations grew more than 9.6%
compared to fiscal 2008;
    
    DSO improved to 39 days from 50 days a year ago;
    
    Generated cash of $630 million from continuing operations, an improvement of $275
million over 2008; and
    
    Finished the year with cash of $343 million which was in excess of long-term debt by $60
million.




---



##### 



15 
  Bookings and Book-to-Bill Ratio
   Significant Bookings in the Year
 Announcement Date
    
    Client
    
    Duration
    
    ValueOctober 14, 2008
    
    Federal Communications Commission
    
    10 years
    
    US$25 millionFederal Communications Commission selected CGI as the prime contractor to provide its
Momentum® financial management software and Financial Management Line of
Business hosting solution as a part of the agencys Core Financial System Replacement
initiative.October 20, 2008
    
    North Carolina Department of
Revenue
    
    Three years
    
    US$55.3 millionCGI helps improve state tax administration by building a second-generation integrated
tax management solution that employs commercial off-the-shelf products configured
specifically for the Department of Revenues needs.March 10, 2009
    
    Cigna
    
    Multi-year
    US$35 million per yearCGI assumed responsibility for maintaining service delivery for applications supporting
claims, billing, banking, sales and underwriting, enrollment and eligibility, and
reinsurance.March 17, 2009
    
    Centers for Medicare & Medicaid 
Services
    
    Five and one-half
years
    
    US$135 millionCGI was awarded the Medicare Advantage & Part D Maintenance and Enhancement Services
contract for updating and enhancing the systems performance and scalability.March 25, 2009
    
    Foresters
    
    10 years
    
    $182 millionCGI delivers IT application maintenance and development services from its centres of
excellence in Toronto, Halifax and Bangalore while IT infrastructure services including
data centre mainframe, voice communications, IT help desk and distributed computing
services are delivered from its centres in Ontario.April 7, 2009
    
    General Services Administration
    
    Five years
    
    US$43 millionCGI updates the agencys legacy billing and accounts receivable modules. Full life
cycle services and infrastructure hosting are included in this contract.




---



##### 



16 Announcement Date
    
    Client
    
    Duration
    
    ValueApril 8, 2009
    
    Environmental Protection Agency
    
    Three years
    
    US$67 millionCGI was selected by the U.S. Environmental Protection Agency to provide support for the
Central Data Exchange, the point of entry for the transmission of environmental data to
EPA on the national Environmental Information Exchange Network.April 17, 2009
    
    State of Louisiana
    
    Three years
    
    US$40 millionCGI delivers IT operations and service management to support Louisianas ongoing Road
Home Program. To successfully manage the complex series of IT interactions that support
the Road Home program, the CGI team delivers application maintenance, user support,
data warehouse services and reporting, as well as disaster recovery and continuity of
operations planning.May 14, 2009
    
    General Services Administration
    
    Five years
    
    US$52 millionCGI provides operations and maintenance support and software upgrades for the agencys
Pegasys financial management application. The Pegasys financial management system,
which is hosted in CGIs Phoenix data centre, is based on CGIs market leading
Momentum® financial management software. It supports users from 11 regions
across the country and the processing of nearly 20 million transactions totalling over
US$24 billion annually. Under this contract, CGI provides project management,
production support, testing, development and implementation support as well as software
upgrades and maintenance.July 29, 2009
    
    Commonwealth of Virginia
    
    Until June 2016
    
    US$70 millionContract was extended for CGIs award-winning Electronic Procurement System (eVA).
Between the implementation of the system in 2001 and the end of fiscal 2009, the
Commonwealth used eVA to purchase $20 billion of products and services, with $11.6
billion purchased from small, minority or women-owned business, while saving the state
and taxpayers more than $280 million.August 27, 2009
    
    Government of Canada
    
    Four-year extension
    
    $78 millionThe Company has been working with Public Works and Government Services Canada to
define, scope and implement Results Base Services through a CGI managed services
delivery model.October 9, 2009
    
    General Services Administration
    
    Five years
    
    US$32 millionCGI provides data centre hosting and application management support of the agencys
Integrated Financial System, which is based on CGIs Momentum® financial
management software. This contract was signed prior to and announced subsequent to our
fiscal 2009 year end.October 13, 2009
    
    Daimler Financial Services (DFS)
    
    Five-year extension
    
    Not releasedCGI provides a full end-to-end applications management service for international
Vehicle Asset Financing providing DFS with a cost-effective service to streamline and
standardize its business processes, while at the same time maximizing operational
savings by utilizing CGIs industry leading outsourcing services. This contract was
signed prior to and announced subsequent to our fiscal 2009 year end.




---



##### 



17 Share Repurchase Program
   Foreign currency impact
  
 Fiscal Year ended September 30, 2008
 Significant Developments
   Bookings
   Significant Bookings in the Year
 
    
    October 3, 2007: 10-year US$110 million managed services contract with Océ North America to
deliver infrastructure services, including end-user computing, service desk, enterprise
operations and data center hosting.




---



##### 



18 
 
    
    November 14, 2007: Three-year $91.8 million contract with Public Works and Government
Services Canada (PWGSC) for the provision of engineering and technical management services
to their Information Technology Services Branch. The agreement also entitles PWGSC to four
one-year extensions, with a total potential contract value of $400 million.
    
    February 4, 2008: Two-year contract valued at approximately US$27 million with the U.S.
Department of Health and Human Services, Centers for Medicare & Medicaid Services (CMS) to
implement CMS Provider Enrollment Chain and Ownership System One-Stop-Shop release.
    
    April 2, 2008: Consulting contracts awarded by Revenu Québec valued at more than $40
million for the improvement of the governments existing personal income tax system and the
development of a new system.
    
    April 10, 2008: 10-year project valued at US$83 million with the U.S. Environmental
Protection Agency to modernize its financial system using CGIs commercial
Momentum® software, and to transition its financial system IT hosting and
application management to CGI.
    
    May 1, 2008: Five-year contract with Daimler Financial Services to provide a full
end-to-end applications management service for international Vehicle Asset Financing.
    
    May 7, 2008: 10-year US$115 million contract with Magnolia Insurance Company to provide
back-office services including complete policy administration, billing and accounting, claims
administration, statistical reporting, and statutory accounting services.
    
    May 28, 2008: Three-year US$29.6 million contract with the Oregon Department of Human
Services to design, develop and implement its next generation Statewide Automated Child
Welfare Information System.
    
    June 19, 2008: Seven-year agreements valued at US$80 million with Australia and New Zealand
Banking Group Limited and Bank of Montreal Financial Group to extend their use of CGIs
Proponix global trade platform.
    
    September 15, 2008: Five-year agreement with the Ontario Education Collaborative
Marketplace valued at $40 million to build and manage the electronic marketplace.
    
    October 8, 2008: Seven-year contract extension with Co-operators General Insurance Company
valued at approximately $110 million, whereby CGI will continue to provide data center
services. This contract renewal was signed prior to and announced subsequent to our year end.
 Divestiture
  Business Structure




---



##### 



19 Share Repurchase Program
   Foreign currency impact
  
 FORWARD LOOKING INFORMATION AND RISK FACTORS
 
 Forward-Looking Information
 Annual Information Form Securities Act of 1933 Securities Exchange Act of 1934
 Annual Information Form Managements Discussion
& Analysis Annual Report Securities and Exchange Commission
  
 Risk Factors




---



##### 



20 
 Risks Related to the Market
 
 Economic risk
  
 Risks Related to our Industry
 
 The competition for contracts
  
 The length of the sales cycle for major outsourcing contracts
  
 The availability and retention of qualified IT professionals
  
 The ability to continue developing and expanding service offerings to address emerging business
demands and technology trends




---



##### 



21 
 Infringing on the intellectual property rights of others
  
 Benchmarking provisions within certain contracts
  
 Protecting our intellectual property rights
  
 Risks Related to our Business
 
 Business mix variations
  
 The financial and operational risks inherent in worldwide operations




---



##### 



22  
 Credit risk with respect to accounts receivable
  
 Material developments regarding major commercial clients resulting from such causes as changes
in financial condition, mergers or business acquisitions
  
 Early termination risk
  
 Cost estimation risks




---



##### 



23 
 Risks related to teaming agreements and subcontracts
  
 Our partners ability to deliver on their commitments
  
 Guarantees risk
  
 Risk related to human resources utilization rates
  
 Client concentration risk
  
 Government business risk




---



##### 



24  
 Regulatory risk
  
 Legal claims made against our work
  
 Information and infrastructure risks




---



##### 



25 
 Risk of harm to our reputation
  
 Risks associated with acquisitions
  
 Risks associated with the integration of new operations
  
 Liquidity and funding risks
  
 LEGAL PROCEEDINGS




---



##### 



26 
 INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS
 Audit and Risk Management Committee
  
 TRANSFER AGENT AND REGISTRAR
 Computershare Investor Services Inc. Computershare Trust Company, N.A.
 
 AUDITORS
 Ernst & Young LLP Audit and Risk Management Committee
 
 ADDITIONAL INFORMATION
 Annual Information Form Annual Information Form Management Proxy Circular 2010 Annual Report
 Management Proxy Circular
 Managements Discussion &
Analysis 2010 Annual Report Numbers




---



##### 



27 
 APPENDIX A
 CGI GROUP INC.
 
 FUNDAMENTAL TEXTS
 Fundamental Texts
 Dream, Mission, Vision, and Values
    
    
    2CGI Management Foundation
    
    
    12Charter of the Board of Directors
    
    
    18Charter of the Corporate Governance Committee
    
    
    27Charter of the Human Resources Committee
    
    
    33Charter of the Audit and Risk Management Committee
    
    
    38Code of Ethics and Business Conduct
    
    
    49Executive Code of Conduct
    
    
    67Guidelines on Timely Disclosure of Material Information and
Transactions in Securities of CGI Group Inc. by Insiders
    
    
    70




---



##### 



Fundamental Texts of CGI Group Inc.




---



##### 



Presentation
    
 Presentation
    
    
    11. Dream, Mission, Vision and Values
    
    
    22. CGI Management Foundation
    
    
    123. Documents and Policies Pertaining to Corporate Governance
    
    
    173.1 Charter of the Board of Directors
    
    
    183.2 Charter of the Corporate Governance Committee
    
    
    273.3 Charter of the Human Resources Committee
    
    
    333.4 Charter of the Audit and Risk Management Committee
    
    
    384. Codes of Ethics
    
    
    484.1 Code of Ethics and Business Conduct
for members, officers and directors of CGI
    
    
    494.2 Executive Code of Conduct
    
    
    674.3 Guidelines on Timely Disclosure of Material Information and
Transactions in Securities of CGI by Insiders
    
    
    70Appendix
    
    
    94
  1




---



##### 



1.
Dream, Mission, Vision and Values




---



##### 



Dream, Mission, Vision and Values
  3




---



##### 



A.
    
    THE CGI DREAMA number of governing ideas inspired the creation of CGI and continue to drive
its development. These ideas constitute what we call the CGI dream. It is a
dream based on a set of values to which we are profoundly attached.The dream has allowed us to assemble, all around the world, a team of
extraordinary men and women who share it and are building a company that
reflects their aspirations  who are, in fact, building their own company.
Over the years, our team has built a clientele we are extremely proud of and
whom we are dedicated to serving with the utmost skill.This dream has its roots in the original and simple idea that first motivated
CGIs founders when they created the company:To create an environment in which we enjoy working together and, as owners,
contribute to building a company we can be proud of.From this very basic idea grew an entire business philosophy.It goes without saying that creating this type of environment is particularly
challenging in consulting companies such as ours. Personnel generally work at
client locations, making it difficult to develop a sense of belonging through a
shared workplace. There is the risk of certain people being forgotten when
they spend long periods at a client site, and this risk is amplified when these
individuals have few CGI colleagues working on the same engagement.B.
    
    THE CGI MISSION AND VISIONThe mission of CGI is to help our clients with professional services of
outstanding quality, competence and objectivity, delivering the best solutions
to fully satisfy client objectives in information technology, business
processes and management.In all we do, we foster a culture of partnership, intrapreneurship, teamwork
and integrity, building a world class IT and business process services company.With this mission statement, we are endeavouring to describe not only the
companys purpose, but also our ambition and values. In doing so, we hope, in a
few words, to advance an overall understanding of these essential aspects of
CGI.Our vision is to be a world class IT and business process services leader
helping our clients win and grow.
 4




---



##### 



The following section will foster a more thorough comprehension of the dream
associated with this mission and the values referred to in the mission
statement.C.
    
    THE CGI CULTURE AND VALUES
   1.
    
    Sharing the same values2.
    
    Embracing the objectives of our clients3.
    
    Adopting a caring, humane approach towards our members4.
    
    Focusing on synergy and the strength of teamwork5.
    
    Participating in the development of our company as its
owner-shareholders, and sharing in its wealth6.
    
    Promoting robust, healthy and sustainable growth to the
benefit of all stakeholders7.
    
    Implementing a management model aligned with our dream and
values
 5




---



##### 



1.
    
    SHARING THE SAME VALUESSharing the same values allows us to enjoy considerable autonomy and swiftness
of action without compromising our cohesiveness. It also allows us to mobilize
teams more rapidly and bring together the most experienced individuals from
across the company, who are able to quickly work as one to address a given
challenge. And, of course, these values also guide our decisions and actions.PARTNERSHIP AND QUALITYFor us, partnership and quality are both a philosophy and a way of life. We
develop and follow the best management practices and we entrench these
approaches into client relationships and service delivery frameworks in order
to foster long term and strong partnerships with our clients. We listen to our
clients and we are committed to their total satisfaction in everything we do.OBJECTIVITY AND INTEGRITYWe exercise the highest degree of independent thinking in selecting the
products, services and solutions we recommend to clients. In doing so, we
adhere to the highest values of quality, objectivity and integrity.
Consequently, strict rules of business and professional conduct are applied. We
do not accept any remuneration from suppliers.INTRAPRENEURSHIP AND SHARINGOur success is based on the competence, commitment and enthusiasm of our
members. Therefore, we promote a climate of innovation and initiative where we
are empowered with a sense of ownership in supporting clients, thus ensuring
the firms profitable growth. Through teamwork, sharing our know-how and
expertise, we bring the best of CGI to our clients. As members, we share in the
value we create through equity ownership and profit participation.RESPECTAs a global company, we recognize the richness that diversity brings to the
company and welcome this diversity while embracing the overall CGI culture. In
all we do, we are respectful of our fellow members, clients, business partners
and competitors.FINANCIAL STRENGTHWe strive to deliver strong, consistent financial performance which sustains
long term growth and rewards our members and shareholders. Financial strength
enables us to continuously invest and improve services
 6




---



##### 



and business solutions to the benefit of our clients. To this end, we manage
our business to generate industry superior returns.CORPORATE SOCIAL RESPONSIBILITYOur business model is designed to ensure that we are close to our clients and
communities. We embrace our social responsibilities and contribute to the
continuous development of the communities in which we live and work.2.
    
    EMBRACING THE OBJECTIVES OF OUR CLIENTSAt CGI, we believe that accomplishing outstanding work provides one with a
strong sense of fulfilment. Our high-quality work allows us to forge rewarding
relationships with our colleagues and clients and to experience the pleasure of
our own creativity when we find an ideal solution to address our clients
needs.To this end, we strongly encourage our members to develop a listening attitude
to ensure that an understanding of the clients particular situation and needs
takes priority in all that we do. For this reason, we foster a culture of
independence, objectivity and integrity. We want our clients to know that we
understand their objectives and are committed to finding the solution that is
right for them. Our flexibility in establishing customized business
relationships demonstrates our keen interest in our clients objectives,
cultural environment and values.This in-depth understanding of our clients objectives is one of the keys to
our success and is as present in our short-term engagements as it is in our
outsourcing contracts extending over multiple years.However, embracing the objectives of our clients goes far beyond simply
understanding them. It demands, for example, that we sincerely commit to
offering the very best of ourselves in order to demonstrate to clients that we
support them as completely as if we were their own employees. It is essential
that they experience our commitment.3.
    
    ADOPTING A CARING, HUMANE APPROACH TOWARDS OUR MEMBERSAlthough the demands of our industry are considerable, CGI has always believed
that this in no way conflicts with the very humane and caring approach we take
in all of the relationships we foster. And while our human resources policies
and Member Partnership Management Framework embody this concern and commitment,
for CGI, this is also an issue of maturity and genuine leadership. It is a
question of the quality of being. To foster this attitude of caring and
sensitivity towards others, CGI has led by example. Since the inception of the
company, this approach has been transmitted, most notably through the example
set by
 7




---



##### 



our founders as well as by teamwork and the CGI Leadership Institute, and is
today an integral component of CGIs spirit and culture.
 4.
    
    FOCUSING ON SYNERGY AND THE STRENGTH OF TEAMWORKCGI favours the accomplishment of work through synergy, which refers to the
pooling of our members skills, experience and creative abilities in all
aspects of corporate life. Whether deciding on the direction to take in a
service proposal or determining the best solution for a client, we incorporate
synergy into everything we do.Normally, a synergy group will hold meetings at key milestones throughout the
entire lifespan of a given engagement. The group not only includes subject
matter experts, but also less experienced members, who gain knowledge from
their colleagues and are therefore able to more rapidly hone their own
expertise. The objective is always to find appropriate and proven solutions for
our clients. This practice is entrenched in our Quality System, which has
earned ISO 9001 certification.The practice of synergy underscores an outstanding cultural trait: at CGI, we
believe that we are stronger and that everyone benefits when we work as a team.
Our clients receive services of higher quality, and our members constantly
learn from one another through concrete achievements.5.
    
    PARTICIPATING IN THE DEVELOPMENT OF OUR COMPANY AS ITS
OWNER-SHAREHOLDERSIt is important that our members consider CGI as their company and that they
participate in its growth and development. Involvement in professional groups
that help maintain CGIs leadership position is just one of the many such forms
of participation.However, for this involvement in the company to be complete and rewarding, we
feel it necessary that all CGI members be able to also share in the benefits
generated by their activities. For this reason, since its founding, CGI has
offered all of its members the opportunity to be shareholders and owners of
their company. To this end, CGI has implemented a Share Purchase Plan, through
which it pays half the cost of shares up to a certain amount. Members also
qualify for a portion of the companys annual profits when objectives are met
(Profit Participation Plan). This capital sharing opportunity has existed since
CGI was established.It is an approach that incorporates many advantages:FOR OUR CLIENTSBecause of this approach, CGI has very few freelance or contract employees.
This helps assure our clients that the experience we acquire
 8




---



##### 



through working with them is more likely to remain in the company. Moreover,
the people they deal with at CGI are also owners of the company and are
therefore completely committed to producing high-quality, dependable work in
order to strengthen the client relationship.
 FOR OUR SHAREHOLDERSOur external shareholders can rest assured that, as fellow owners, all of CGIs
members have their mutual interests at heart, i.e. a desire to see the company
grow and the drive to execute each contract in a way that will yield the
targeted profit margin. This also impacts business development, for, as
shareholders, our members strive to promote the companys growth, but will not
sacrifice profitability by submitting counter-productive bids. And finally,
shareholders are also assured that all of our members will manage the companys
costs as if they were their own.FOR OUR MEMBERSAs members and shareholders, we feel above all that the growth in value, which
we are contributing to, does provide us with a lucrative return over the long
term. It is indeed more stimulating to work for a company that values the
sharing of wealth. This also guarantees greater transparency in the management
of the company. Because we must communicate our financial results to everyone,
all of CGIs managers are more accountable to the people they lead and are more
likely to involve them in the decision process. We believe that our approach to
corporate ownership fosters greater overall dynamism and cohesiveness of
action. This also allows us to attract and retain individuals with a genuine
desire to build and develop the company.6.
    
    PROMOTING ROBUST, HEALTHY AND SUSTAINED GROWTH TO THE BENEFIT
OF ALL STAKEHOLDERSRobust, healthy and sustained growth is vital to the companys success. Much of
our clientele consists of large companies with operations extending over many
countries. We are committed to serving these clients well, often through
long-term relationships that require us to deploy professionals in sufficient
numbers where clients operate. The growth of our clients business requires
that we grow with them. Also, as a result of our success, an increasing number
of clients call upon us to provide them with services. Robust growth is
therefore intrinsic to the nature of the business we are in.Growth is not only a vital component of our activities and essential to our
clients, it also benefits our members. It provides them with an opportunity to
embark upon new and stimulating challenges and develop their own potential. And
growth, when financially healthy and profitable, clearly benefits all of our
shareholders (including our member shareholders) through the value it
generates.
 9




---



##### 



To maintain healthy and sustained growth, it is important that the companies or
groups that join our ranks be welcomed and well integrated into our operations.
In order to succeed in its growth strategy, CGI has developed its integration
capability into a core competency. This capacity to integrate is based on three
main axes. The first axis is aimed primarily at welcoming newcomers, answering
their legitimate questions, confirming their new conditions of employment and,
above all, allowing them to discover CGI by sharing its dream and values. The
second axis is directed towards establishing the various synergy goals linked
to an acquisition or an outsourcing deal. This encourages all parties to
understand that this combination of strengths offers new, stimulating
opportunities. The third axis is aimed at assuring the organizational
transition and a rapid transfer to the CGI Management Foundation, especially
with regards to the Quality System.It follows that there ought to be an equilibrium of interests among all of the
companys core stakeholders: clients, members and shareholders.
 
 It is of course also essential that, as it grows, our company continues to act
as a responsible corporate citizen by respecting and supporting the communities
in which it operates and by respecting the environment.The following are a few concrete examples of how this balanced approach
promotes the healthy and sustained growth of CGI:
 
    
    We must ensure, at every step of our growth, that we preserve
the quality of the services we offer to our current and future clients.
    
    We must also ensure that our members are adequately prepared
to face the new challenges we offer them and that they have the resources
needed to accomplish their work.
    
    Growth must not come at the expense of the communities where
we do business, or of the environment in general. In fact, we are
committed to participating in the development of these communities and the
protection of the environment.
    
    We strive to ensure that our growth and development efforts
provide short-term benefits without negatively impacting our long-term
 10




---



##### 



performance. We believe this also to be in the best interests of our
shareholders.
 When the above conditions are met, robust, healthy, balanced and sustainable
growth will follow.7.
    
    IMPLEMENTING A MANAGEMENT MODEL ALIGNED WITH OUR DREAM AND
VALUESCGIs dream is being fulfilled every day through the constant efforts of our
members who share and believe in this dream. It is also achieved through a
disciplined management approach that is based on the companys objectives to
produce high quality work for its clients, promote the development of its
members and provide high value to its shareholders.
 11




---



##### 



2.
CGI Management Foundation




---



##### 



CGI Management Foundation
  
  1)
    
    the primacy of the dream, the mission, the vision and the
values of the company;2)
    
    the equilibrium between the legitimate interests of our
clients, members and shareholders;3)
    
    the balance between the need to assure cohesiveness and
rigour in the management of the company and the commitment to promote
autonomy, initiative and entrepreneurship.
   13




---



##### 



1)
    
    The Charters of the Board of Director and its committees;2)
    
    the Codes of Ethics, to which members, officers and directors
of the company must adhere;3)
    
    the Operations Management Framework, which outlines the
delegation framework with respect to decision making (e.g. who may authorize
and sign a million dollar proposal; who may authorize promotion to a
vice-presidents position).
  14




---



##### 



15




---



##### 



Client Satisfaction 
Assessment Program
    
    Member Satisfaction
Assessment Program
    
    Shareholder Satisfaction
Assessment Program
  16




---



##### 



3.
Documents and Policies
Pertaining to Corporate
Governance




---



##### 



Documents and Policies Pertaining to Corporate Governance
 
 3.1 Charter of the Board of Directors
   1.
    
    INTERPRETATIONFinancially Literate means the ability to read and understand a set of
financial statements that present a breadth and level of complexity of
accounting issues that are generally comparable to the breadth and complexity
of the issues that can reasonably be expected to be raised by the Companys
financial statements.Independent Director means a director who meets the independence criteria set
out in section 1.4 of Multilateral Instrument 52-110 Audit Committees adopted
by the Canadian Securities Administrators and as amended and in effect as of
June 30, 2005, which is reproduced in Appendix A.2.
    
    OBJECTIVESCGIs shareholders are the first and most important element in the Companys
governance structures and processes. At each annual general meeting, 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.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 standing committees, CGIs corporate governance practices and applicable
corporate and securities legislation.The overall stewardship of the Company is the responsibility of the Board of
Directors. In accomplishing the mandate it receives from the Companys
shareholders, the Board of Directors may delegate certain of
 18




---



##### 



its authority and responsibilities to committees and management and reserve
certain powers to itself. Nonetheless, it will retain full effective control
over the Company.3.
    
    COMPOSITION
 3.1
    
    The majority of the Board of Directors shall be
comprised of Independent Directors. The application of the definition of
Independent Director to the circumstances of each individual director is
the responsibility of the Board of Directors which will disclose on an
annual basis whether it is constituted with the appropriate number of
directors which are Independent Directors and the basis for its analysis.
The Board of Directors will also disclose which directors are Independent
Directors or not and provide a description of the business, family, direct
and indirect shareholding or other relationship between each director and
the Company.3.2
    
    The Company expects and requires directors to be and
remain free of conflictual interests or relationships and to refrain from
acting in ways which are actually or potentially harmful, conflictual or
detrimental to the Companys best interests. Each director shall comply
with the Companys formal code of ethics and business conduct that governs
the behaviour of members, directors and officers and shall complete and
file annually with the Company any and all documents required pursuant to
such formal code of ethics and business conduct with respect to conflict
of interests. This matter will also be reviewed annually by the Corporate
Governance Committee. The Board of Directors will monitor compliance with
said code as well as with the Companys executive code of conduct
applicable to its principal executive officer, principal financial
officer, principal accounting officer or controller, or other persons
performing similar functions within the Company. The Board will also be
responsible for the granting of any waivers from compliance with the codes
for directors and officers. The Board of Directors will disclose in due
time the adoption of such codes as well as all waivers and specify the
circumstances and rationale for granting the waiver.3.3
    
    The Board of Directors, following advice of its
Corporate Governance Committee, is responsible for evaluating its size and
composition and establishing a Board comprised of members who facilitate
effective decision-making. The Board of Directors has the ability to
increase or decrease its size.3.4
    
    It is a general requirement under the Companys
corporate governance practices that all directors possess both financial
and operational literacy. In addition, the membership of the Board of
Directors will include a sufficient number of directors who are
Financially Literate and at least one director who qualifies as a
financial expert as defined in the applicable corporate governance rules
imposed by regulatory bodies in order to ensure that the Audit
 19




---



##### 



and Risk Management Committee membership complies with those rules.3.5
    
    A director who makes a major change in principal
occupation will forthwith disclose this fact to the Board of Directors and
will offer his or her resignation to the Board of Directors for
consideration. It is not intended that directors who retire or whose
professional positions change should necessarily leave the Board of
Directors. However, there should be an opportunity for the Board of
Directors to review the continued appropriateness of the Board of
Directors membership under such circumstances.3.6
    
    The Board of Directors is responsible for approving
new nominees to the Board. New directors will be provided with an
orientation and education program which will include written information
about the duties and obligations of directors, the business and operations
of the Company, documents from recent Board of Directors meetings and
opportunities for meetings and discussion with senior management and other
directors. The details of the orientation of each new director will be
tailored to that directors individual needs and areas of interest. The
prospective candidates should fully understand the role of the Board of
Directors and its committees and the contribution expected from individual
directors and the Board of Directors will ensure that they are provided
with the appropriate information to that effect. In addition, the Board of
Directors will ascertain and make available to its members, when required,
continuing education as per the business and operations of the Company.
 4.
    
    RESOURCES
 4.1
    
    The Board of Directors will implement structures and
procedures to ensure that it functions independently of management.4.2
    
    The Board of Directors appreciates the value of
having certain members of senior management attend each Board of Directors
meeting to provide information and opinion to assist the directors in
their deliberations. The Executive Chairman of the Board will seek the
Board of Directors concurrence in the event of any proposed change to the
management attendees at Board of Directors meetings. Management attendees
will be excused for any agenda items which are reserved for discussion
among directors only.
 5.
    
    RESPONSIBILITIES AND DUTIES
 The principal responsibilities and duties of the Board of Directors include the
following, it being understood that in carrying out their responsibilities and
duties, directors may consult with management and may retain external advisors
at the expense of the Company in appropriate circumstances. Any engagement of
external advisors shall be subject to the approval of the Chairof the Corporate
Governance Committee.
 20




---



##### 



5.1
    
    General Responsibilities
 5.1.1
    
    The Board of Directors will oversee the
management of the Company. In doing so, the Board of Directors will
establish a productive working relationship with the Executive
Chairman of the Board and the Chief Executive Officer and other
members of senior management.5.1.2
    
    The Board of Directors will oversee the
formulation of long-term strategic, financial and organizational
goals for the Company. It shall approve the Companys strategic plan
and review same on at least an annual basis. This plan will take
into account the opportunity and risks of the Companys business.5.1.3
    
    As part of the responsibility of the
Board of Directors to oversee management of the Company, the Board
of Directors will engage in active monitoring of the Company and its
affairs in its stewardship capacity.5.1.4
    
    The Board of Directors will engage in a
review of short and long-term performance of the Company in
accordance with approved plans.5.1.5
    
    The officers of the Company, headed by
the Executive Chairman of the Board and the Chief Executive Officer,
shall be responsible for general day to day management of the
Company and for making recommendations to the Board of Directors
with respect to long term strategic, financial, organizational and
related objectives.5.1.6
    
    The Board of Directors will periodically
review the significant risks and opportunities affecting the Company
and its business and oversee the actions, systems and controls in
place to manage and monitor risks and opportunities. The Board of
Directors may impose such limits as may be in the interests of the
Company and its shareholders.5.1.7
    
    The Board of Directors will oversee how
the Company communicates its goals and objectives to its
shareholders and other relevant constituencies.5.1.8
    
    The Board of Directors will oversee the
succession planning including appointing, training and monitoring
senior management and the Executive Chairman of the Board in
particular.5.1.9
    
    The Board of Directors is responsible
for overseeing a Communication Policy for the Company. In doing so,
the Board of Directors will ensure that the policy (i) addresses how
the Company interacts with analysts, investors, other key
stakeholders and the public, (ii) contains measures for
 21




---



##### 



the Company to comply with its continuous and timely disclosure
obligations and to avoid selective disclosure, and (iii) is
reviewed at least annually.5.1.10
    
    The Board of Directors will oversee the integrity of the Companys
internal control and management information systems.5.1.11
    
    The Board of Directors will make sure that the Company adopt
prudent financial standards with respect to the business of the
Company and prudent levels of debt in relation to the Companys
consolidated capitalization.5.1.12
    
    The Board of Directors will also consider and approve:
 i)
    
    transactions out of the
ordinary course of business including, without limitation,
proposals on mergers, acquisitions or other major
investments or divestitures;ii)
    
    all matters that would be
expected to have a major impact on shareholders;iii)
    
    the appointment of any
person to any position that would qualify such person as an
officer of the Company; andiv)
    
    any proposed changes in
compensation to be paid to members of the Board of Directors
on the recommendation of the Human Resources Committee.
 5.1.13
    
    The Board of Directors will also receive reports and consider:
 i)
    
    The quality of
relationships between the Company and its key customers;ii)
    
    Changes in the
shareholder base of the Company from time to time and
relationships between the Company and its significant
shareholders;iii)
    
    Periodic reports from
Board of Directors committees with respect to matters
considered by such committees;iv)
    
    Health, safety and
environmental matters as they affect the Company and its
business; andv)
    
    Such other matters as the
Board of Directors may, from time to time, determine.
 5.1.14
    
    The Board of Directors will oversee management through an ongoing
review process.
 22




---



##### 



5.1.15
    
    The Board of Directors will, together with the Executive Chairman
of the Board develop a position descriptions for the Executive
Chairman of the Board and the Chief Executive Officer. The Board of
Directors will also approve the corporate objectives that the
Executive Chairman of the Board is responsible for meeting and
assess managements performance in relation to such objectives. The
Board of Directors will raise any concerns related to the
performance of the Chief Executive Officer with the Executive
Chairman of the Board as appropriate.5.1.16
    
    The Board of Directors will receive a report from its Human
Resources Committee on succession planning as set forth in such
committees mandate.
 5.2
    
    Annual Assessment of the Board of DirectorsThe Board of Directors will annually review the assessment of the Board
of Directors performance and recommendation provided by the Corporate
Governance Committee. The objective of this review is to increase the
effectiveness of the Board of Directors and contribute to a process of
continuous improvement in the Board of Directors execution of its
responsibilities. It is expected that the result of such reviews will be
to identify any areas where the directors and/or management believe that
the Board of Directors and/or the directors individually could make a
better contribution to the affairs of the Company. The Board of Directors
will take appropriate action based upon the results of the review
process.5.3
    
    Committees
 5.3.1
    
    The Board of Directors shall appoint
committees to assist it in performing its duties and processing the
quantity of information it receives.5.3.2
    
    Each committee operates according to a
Board of Directors approved written mandate outlining its duties and
responsibilities. This structure may be subject to change as the
Board of Directors considers from time to time which of its
responsibilities can best be fulfilled through more detailed review
of matters in committee.5.3.3
    
    The Board of Directors will review
annually the work undertaken by each committee and the
responsibilities thereof.5.3.4
    
    The Board of Directors will annually
evaluate the performance and review the work of its committees,
including their respective mandates and the sufficiency of such
mandates.
 23




---



##### 



5.3.5
    
    The Board of Directors will annually
appoint a Lead Director as well as a member of each of its
committees to act as Chair of the committee.5.3.6
    
    Subject to subsection 5.3.8, committees
of the Board of Directors shall be composed of a majority of
Independent Directors.5.3.7
    
    The Board of Directors shall appoint
members of committees after considering the recommendations of the
Corporate Governance Committee and the Executive Chairman of the
Board as well as the skills and desires of individual Board members,
all in accordance with the mandates of such committees approved by
the Board.5.3.8
    
    The Audit Committee shall be composed
only of Independent Directors. All members of the Audit Committee
shall be Financially Literate and at least one member shall be a
financial expert within the meaning of applicable regulatory
requirements.
 5.4
    
    Lead Director
 5.4.1
    
    The Lead Director shall be an
Independent Director. He will oversee that the Board of Directors
discharges its responsibilities, ensure that the Board of Directors
evaluates the performance of management objectively and that the
Board of Directors understands the boundaries between the Board of
Directors and management responsibilities.5.4.2
    
    The Lead Director will chair periodic
meetings of the Independent Directors and assume other
responsibilities which the Independent Directors as a whole might
designate from time to time.5.4.3
    
    The Lead Director should be able to
stand sufficiently back from the day-to-day running of the business
to ensure that the Board of Directors is in full control of the
Companys affairs and alert to its obligations to the shareholders.5.4.4
    
    The Lead Director shall provide input to
the Executive Chairman of the Board on preparation of agendas for
Board and committee meetings.5.4.5
    
    The Lead Director shall chair Board
meetings when the Executive Chairman of the Board is not in
attendance, subject to the provisions of the by-laws of the Company.5.4.6
    
    The Lead Director shall provide
leadership for the independent directors and ensure that the
effectiveness of the Board is assessed on a regular basis.
 24




---



##### 



5.4.7
    
    The Lead Director shall set the agenda for the meetings of the
Independent Directors.5.4.8
    
    The Lead Director shall report to the
Board concerning the deliberations of the independent directors as
required.5.4.9
    
    The Lead Director shall, in conjunction
with the Executive Chairman of the Board, facilitate the effective
and transparent interaction of Board members and management;5.4.10
    
    The Lead Director shall provide feedback to the Executive Chairman
of the Board and act as a sounding board with respect to strategies,
accountability, relationships and other issues.
 5.5
    
    Review of the Board MandateIn order to ensure that this mandate is kept current in the light of
changes which may occur in corporate practice or the structure of the
Company, the Board of Directors will annually reconfirm this mandate or
initiate a review to revise it.5.6
    
    Board of Directors CompensationThe Human Resources Committee will review the adequacy and form of
compensation of the senior management and directors each year. The
Committee shall make recommendations to the Board of Directors for
consideration when it believes changes in compensation are warranted.
Furthermore, the Board of Directors will ensure the compensation
realistically reflects the responsibility and risk involved in being a
director.
 6.
    
    COMMUNICATIONS POLICY
 6.1
    
    The Board of Directors will consider and review the
means by which shareholders can communicate with the Company including the
opportunity to do so at the annual meeting, communications interfaces
through the Companys website and the adequacy of resources available
within the Company to respond to shareholders through the office of the
Corporate Secretary and otherwise. However, the Board of Directors
believes that it is the function of the management to speak for the
Company in its communications with the investment community, the media,
customers, suppliers, employees, governments and the general public. It is
understood that individual directors may from time to time be requested by
management to assist with such communications. It is expected, if
communications from stakeholders are made to individual directors,
management will be informed and consulted to determine any appropriate
response.
 25




---



##### 



6.2
    
    The Board of Directors has the responsibility for
monitoring compliance by the Company with the corporate governance
requirements and guidelines of the Toronto Stock Exchange and the New York
Stock Exchange. The Board of Directors will approve the disclosure of the
Companys system of governance and the operation of such system.
 26




---



##### 



3.2 Charter of the Corporate Governance Committee
   Committee means the Corporate Governance Committee of the Board of Directors
of the Company.Independent Director means a director who meets the independence criteria set
out in section 1.4 of Multilateral Instrument 52-110 Audit Committees adopted
by the Canadian Securities Administrators and as amended and in effect as of
June 30, 2005, which is reproduced in Appendix A.1.
    
    OBJECTIVESThe Committee is responsible for: (a) developing the Companys approach to
Board governance issues and the Companys response to the corporate governance
guidelines; (b) reviewing the composition and contribution of the Board and its
members and recommending Board nominees; (c) overseeing the orientation program
for new directors; and (d) helping to maintain an effective working
relationship between the Board of Directors of the Company and management.2.
    
    COMPOSITION
 3.1
    
    The Committee shall be composed of a majority of
Independent Directors.3.2
    
    The Board of Directors shall appoint an independent
director as the Chair of the Committee. If the Chair is absent from a
meeting, the members shall select a Chair from those in attendance to act
as Chair of the meeting.
 3.
    
    MEETINGS
 4.1
    
    Meetings of the Committee shall be held at the call
of the Chair, but not less than twice annually. Meetings of the Committee
may be called by the Chair of the Committee, the Executive Chairman of the
Board or the Chief Executive Officer.4.2
    
    The powers of the Committee shall be exercisable by a
meeting at which a quorum is present. A quorum shall be not less than two
members of the Committee from time to time. Subject to the
 27




---



##### 



foregoing requirement, unless otherwise determined by the Board of
Directors, the Committee shall have the power to fix its quorum and to
regulate its procedure. Matters decided by the Committee shall be decided
by majority vote.4.3
    
    Notice of each meeting shall be given to each member,
to the Executive Chairman of the Board, to the Chief Executive Officer and
to the Corporate Secretary of the Company.4.4
    
    The Committee may invite from time to time such
persons as it may see fit to attend its meetings and to take part in
discussion and consideration of the affairs of the Committee, including in
particular the Chief Executive Officer.4.5
    
    The Committee shall appoint a secretary to be the
secretary of all meetings of the Committee and to maintain minutes of all
meetings and deliberations of the Committee.
 4.
    
    RESPONSIBILITIES AND DUTIES
 5.1
    
    Role and responsibilities of the Committee Chair:
 5.1.1
    
    The Chair of the Committee:
 5.1.1.1
    
    Provides leadership for the committee by ensuring that:
 (i)
    
    The
responsibilities of the committee are well
understood by committee members and management.(ii)
    
    The
committee works as a cohesive team.(iii)
    
    Adequate resources and timely and relevant
information are available to the committee to
support its work.(iv)
    
    The
effectiveness of the committee is assessed on a
regular basis.(v)
    
    The
committees structure and mandate is appropriate
and adequate to support the discharge of the
committees responsibilities.(vi)
    
    The
scheduling, organization and procedures of
committee meetings provide adequate time for the
consideration and discussion of relevant issues.
 5.1.1.2
    
    Works with the Executive Chairman of the Board and
Corporate Secretary to set the calendar of the committees
regular meetings.
 28




---



##### 



5.1.1.3
    
    Has the authority to convene special meetings as
required.5.1.1.4
    
    Sets the agenda in collaboration with the Executive
Chairman of the Board and the Corporate Secretary.5.1.1.5
    
    Presides at meetings.5.1.1.6
    
    Acts as liaison with management with regard to the work
of the committee.5.1.1.7
    
    Reports to the Board concerning the work of the
committee.5.1.1.8
    
    Exercises the authority specifically delegated to the
Chair by the Committee, if any.
 5.2
    
    General Responsibilities
 Board Members
 5.2.1
    
    Review criteria regarding the
composition of the Board of Directors and committees of the Board of
Directors, such as size, proportion of Independent Directors and as
to criteria to determine relatedness as well as profile of the
Board of Directors (age, geographical representation, disciplines,
etc.) and establish a Board of Directors comprised of members who
facilitate effective decision-making.5.2.2
    
    Review criteria relating to tenure as a
director, such as limitations on the number of times a director may
stand for re-election, and the continuation of directors in an
honorary or similar capacity.5.2.3
    
    Review criteria for retention of
directors unrelated to age or tenure, such as attendance at Board of
Directors and committee meetings, health or the assumption of
responsibilities which are incompatible with effective Board of
Directors membership; and assess the effectiveness of the Board of
Directors as a whole, the committees of the Board of Directors, the
contribution of individual directors on an ongoing basis and
establish in light of the opportunities and risks facing the
Company, what competencies, skills and personal qualities it seeks
in new Board members in order to add value to the Company.5.2.4
    
    Recommend to the Board of Directors the
list of candidates for directors to be nominated for election by
shareholders at annual meetings of shareholders.
 29




---



##### 



5.2.5
    
    Recommend to the Board of Directors
candidates to fill vacancies on the Board of Directors occurring
between annual meetings of shareholders.5.2.6
    
    Recommend to the Board of Directors the
removal of a director in exceptional circumstances, for example (a)
such director is in a position of conflict of interest or (b) the
criteria underlying the appointment of such director change.5.2.7
    
    Ensure that the Board of Directors can
function independently of management. To this end, arrange for
meetings on a regular basis of the Independent Directors without
management present. In such cases, meetings will be chaired by the
Lead Director.
 Director Orientation
 5.2.8
    
    As an integral element of the process
for appointing new directors, put in place an orientation and
education program for new recruits to the Board of Directors and
review from time to time the value and benefit of such program.
 Compliance
 5.2.9
    
    Ensure corporate compliance with
applicable legislation including director and officer compliance.5.2.10
    
    Review proposed amendments to the Companys by-laws before making
recommendations to the Board of Directors.
 Codes of Business Conduct
 5.2.11
    
    Periodically review and make recommendations to the Board of
Directors with respect to the Companys formal code of ethics and
business conduct for its members, directors and officers and its
executive code of conduct applicable to the Companys principal
executive officer, principal financing officer, principal accounting
officer or controller, or other persons performing similar functions
within the Company; including the disclosure of the adoption of such
codes.5.2.12
    
    Monitor adherence to the codes and review potential situations
related thereto brought to the attention of the Committee by the
Corporate Secretary of the Company in order to recommend or not in
certain circumstances to the Board of Directors to grant or not
waivers from compliance with the codes for directors and officers.
The Committee shall also ensure that when such waivers are granted,
the Board of Directors shall disclose same in due time and
 30




---



##### 



specify the circumstances and rationale for granting the waiver.
 Corporate Governance Principles
 5.2.13
    
    Make recommendations to the Board of Directors as deemed
appropriate in the context of adherence to corporate governance
guidelines in effect from time to time.5.2.14
    
    In conjunction with the Executive Chairman of the Board of
Directors, recommend to the Board of Directors the membership and
chairs of the committees of the Board of Directors.5.2.15
    
    Review annually the Board/management relationship.5.2.16
    
    Advise the Board of Directors on the disclosure to be contained in
the Companys public disclosure documents, such as the Companys
annual management proxy circular or annual report, on matters of
corporate governance as required by the Toronto Stock Exchange, the
New York Stock Exchange or any other applicable exchange or
regulator.5.2.17
    
    Generally advise the Board of Directors on all other matters of
corporate governance.
 External and Internal Resources
 5.2.18
    
    Retain such independent external advisors as it may deem necessary
and advisable for its purposes.5.2.19
    
    Report to the Board of Directors on its proceedings, reviews
undertaken, and any associated recommendations.5.2.20
    
    Have adequate resources to discharge its responsibilities;5.2.21
    
    Have the right, for the purposes of discharging the powers and
responsibilities of the Committee, to inspect any relevant records
of the Company and its subsidiaries.5.2.22
    
    The Chair of the Committee shall review the opportunity for the
Board of Directors of the Company or individual directors to retain
external advisors at the expense of the Company in certain
appropriate circumstances in carrying out their responsibilities.
 31




---



##### 



Shareholder Proposals
 5.2.23
    
    Review and make recommendations on shareholder proposals to the
Board of Directors or refer them to the Executive Chairman of the
Board as appropriate.
 5.3
    
    Other ResponsibilitiesThe Committee shall carry out such other mandates as the Board of
Directors may request from time to time.5.4
    
    Review of Mandate of the CommitteeThe Board of Directors should review and reassess the adequacy of the
mandate on an annual basis.5.5
    
    CompensationMembers of the Committee shall be entitled to receive such remuneration
for acting as members of the Committee as the Board of Directors may
determine from time to time.
 32




---



##### 



3.3 Charter of the Human Resources Committee
   1.
    
    INTERPRETATIONCommittee means the Human Resources Committee of the Board of Directors of
the Company.Independent Director means a director who meets the independence criteria set
out in section 1.4 of Multilateral Instrument 52-110 Audit Committees adopted
by the Canadian Securities Administrators and as amended and in effect as of
June 30, 2005, which is reproduced in Appendix A.2.
    
    OBJECTIVESThe Committee is responsible for reviewing and making recommendations to the
Board of Directors of the Company for the appointment of Senior Executives of
the Company and for determining terms of employment of Senior Executives. It
shall also perform functions such as reviewing succession planning and matters
of compensation as well as such other matters the Committee may consider
suitable with respect to compensation or as may be specifically directed by the
Board of Directors of the Company from time to time.3.
    
    COMPOSITION
 3.1
    
    The Committee shall be composed of a majority of
Independent Directors.3.2
    
    The Board of Directors shall appoint one of the
Independent Directors as the Chair of the Committee. If the Chair is
absent from a meeting, the members shall select a Chair from those in
attendance to act as Chair of the meeting.
 4.
    
    MEETINGS
 4.1
    
    Meetings of the Committee shall be held at the call
of the Chair, but not less than three times annually. Meetings of the
Committee may be called by the Chair of the Committee, the Executive
Chairman of the Board or the Chief Executive Officer.4.2
    
    The powers of the Committee shall be exercisable by a
meeting at which a quorum is present. A quorum shall be not less than two
members of the Committee from time to time. Subject to the
 33




---



##### 



foregoing requirement, unless otherwise determined by the Board of
Directors, the Committee shall have the power to fix its quorum and to
regulate its procedure. Matters decided by the Committee shall be decided
by majority vote.4.3
    
    Notice of each meeting shall be given to each member,
to the Executive Chairman of the Board, to the Chief Executive Officer and
to the Corporate Secretary of the Company.4.4
    
    The Committee may invite from time to time such
persons as it may see fit to attend its meetings and to take part in
discussion and consideration of the affairs of the Committee, including in
particular the Executive Chairman of the Board.4.5
    
    The Committee shall appoint a secretary to be the
secretary of all meetings of the Committee and to maintain minutes of all
meetings and deliberations of the Committee.
 5.
    
    RESPONSIBILITIES AND DUTIES
 5.1
    
    Role and responsibilities of the Committee Chair:
 5.1.1
    
    The Chair of the Committee:
 5.1.1.1
    
    Provides leadership for the committee by ensuring that:
 (i)
    
    The
responsibilities of the committee are well
understood by committee members and management.(ii)
    
    The
committee works as a cohesive team.(iii)
    
    Adequate resources and timely and relevant
information are available to the committee to
support its work.(iv)
    
    The
effectiveness of the committee is assessed on a
regular basis.(v)
    
    The
committees structure and mandate is appropriate
and adequate to support the discharge of the
committees responsibilities.(vi)
    
    The
scheduling, organization and procedures of
committee meetings provide adequate time for the
consideration and discussion of relevant issues.
 5.1.1.2
    
    Works with the Executive Chairman of the Board and
Corporate Secretary to set the calendar of the committees
regular meetings.
 34




---



##### 



5.1.1.3
    
    Has the authority to convene special meetings as
required.5.1.1.4
    
    Sets the agenda in collaboration with the Executive
Chairman of the Board and the Corporate Secretary.5.1.1.5
    
    Presides at meetings.5.1.1.6
    
    Acts as liaison with management with regard to the work
of the committee.5.1.1.7
    
    Reports to the Board concerning the work of the
committee.5.1.1.8
    
    Exercises the authority specifically delegated to the
Chair by the Committee, if any.
 5.2
    
    General Responsibilities
 5.2.1
    
    The Committee shall, among other things,
have responsibility to advise the Board of Directors on human
resources planning, compensation of members of the Board of
Directors, Executive Officers and other employees, short and
long-term incentive plans, benefit plans, and Executive Officer
appointments.5.2.2
    
    The Committee shall review and report to
the Board of Directors on:
 5.2.2.1
    
    Managements succession plans for Executive Officers,
with special emphasis on the Executive Chairman of the Board
and Chief Executive Officer succession;5.2.2.2
    
    Compensation philosophy of the organization, including a
remuneration strategy and remuneration policies for the
Executive Officer level, as proposed by the Executive
Chairman of the Board and the Chief Executive Officer;5.2.2.3
    
    Recommendations to the Board of Directors for the
appointment of the Executive Chairman of the Board, the
Chief Executive Officer and other Executive Officers,
corporate objectives which the Executive Chairman of the
Board and such other Executive Officers, as the case may be,
are responsible for meeting, assessment of the Executive
Chairman of the Board and of the Chief Executive Officer
against these objectives, monitoring of the Executive
Chairman of the
 35




---



##### 



Boards performance and providing advice and counsel in
the execution of his duties;5.2.2.4
    
    Total remuneration plan including adequacy and form of
compensation realistically reflecting the responsibilities
and risks of the position for the Executive Chairman of the
Board and for the Chief Executive Officer of the Company
and, in connection therewith, consider appropriate
information, including information from the Board of
Directors with respect to the overall performance of the
Executive Chairman of the Board and of the Chief Executive
Officer;5.2.2.5
    
    Remuneration for Executive Officers, annual
adjustment to executive salaries, and the design and
administration of short and long-term incentive plans,
stock options, benefits and perquisites as proposed by
the Executive Chairman of the Board and the Chief
Executive Officer;5.2.2.6
    
    Employment and termination arrangements for senior
management;5.2.2.7
    
    Adoption of new, or significant modifications to, pay and
benefit plans;5.2.2.8
    
    Appointment of new officers as appropriate;5.2.2.9
    
    Significant organizational changes;5.2.2.10
    
    The Committees proposed executive compensation report
to be contained in the Companys annual proxy circular;5.2.2.11
    
    Management development programs for the Company;5.2.2.12
    
    Any special employment contracts or arrangements with
officers of the Company including any contracts relating to
change of control; and5.2.2.13
    
    Remuneration for members of the Board of Directors and
committees thereof, including adequacy and form of
compensation realistically reflecting the responsibilities
and risks of the positions and recommend changes where
applicable.
 5.2.3
    
    The Committee shall perform such other
duties as may from time to time be assigned to it by the Board of
Directors
 36




---



##### 



including those relating to compensation of officers and senior
employees and the manpower resources of the Company.
 5.3
    
    Other Responsibilities
 5.3.1
    
    The Committee shall have the right to
retain such independent external advisors as it may deem necessary
and advisable for its purposes and to assess and review, on an annual
basis or as deemed appropriate, the independence of such external
advisors.5.3.2
    
    The Committee shall report to the Board
of Directors on its proceedings, reviews undertaken, and any
associated recommendations.5.3.3
    
    The Committee shall have adequate
resources to discharge its responsibilities.5.3.4
    
    The Committee shall have the right, for
the purposes of discharging the powers and responsibilities of the
Committee, to inspect any relevant records of the Company and its
subsidiaries.
 5.4
    
    Review of Mandate of the CommitteeThe Board of Directors should review and reassess the adequacy of this
mandate on an annual basis.5.5
    
    CompensationMembers of the Committee shall be entitled to receive such remuneration
for acting as members of the Committee as the Board of Directors may
determine from time to time.
 37




---



##### 



3.4 Charter of the Audit and Risk Management Committee
   1.
    
    INTERPRETATIONCommittee means the Audit and Risk Management Committee of the Board of
Directors of the Company.Financially Literate means the ability to read and understand a set of
financial statements that present a breadth and level of complexity of
accounting issues that are generally comparable to the breadth and complexity
of the issues that can reasonably be expected to be raised by the Companys
financial statements.Independent Director means a director who meets the independence criteria set
out in section 1.4 of Multilateral Instrument 52-110 Audit Committees adopted
by the Canadian Securities Administrators and as amended and in effect as of
June 30, 2005, which is reproduced in Appendix A.2.
    
    OBJECTIVESThe Committee will assist the Board of Directors in fulfilling its oversight
responsibilities. In performing its duties, the Committee will maintain
effective working relationships with the Board of Directors, management, the
internal auditors and the external auditors.3.
    
    COMPOSITION
 3.1
    
    The Committee shall consist solely of Independent
Directors, all of whom shall be Financially Literate and at least one of
whom shall be a financial expert as defined in the applicable corporate
governance rules imposed by regulatory bodies.3.2
    
    Following each annual meeting of shareholders, the
Board of Directors shall elect three or more directors, who shall meet the
independence and experience requirements of the New York Stock Exchange
and the Toronto Stock Exchange as well as the other similar requirements
under applicable securities regulations, to serve on the Committee until
the close of the next annual meeting of shareholders of the Company or
until the member ceases to be a director, resigns or is replaced,
whichever first occurs. Any member
 38




---



##### 



may be removed from office or replaced at any time by the Board of
Directors.3.3
    
    The Board of Directors shall appoint one of the
members of the Committee as the Chair of the Committee. If the Chair is
absent from a meeting, the members shall select a Chair from those in
attendance to act as Chair of the meeting.
 4.
    
    MEETINGS AND RESOURCES
 4.1
    
    Regular meetings of the Committee shall be held
quarterly. Special meetings of the Committee may be called by the Chair of
the Committee, the external auditors, the Executive Chairman of the Board,
the Chief Executive Officer or the Chief Financial Officer of the Company.4.2
    
    The powers of the Committee shall be exercisable by a
meeting at which a quorum is present. A quorum shall be not less than two
members of the Committee from time to time. Subject to the foregoing
requirement, unless otherwise determined by the Board of Directors, the
Committee shall have the power to fix its quorum and to regulate its
procedure. Matters decided by the Committee shall be decided by majority
vote.4.3
    
    Notice of each meeting shall be given to each member,
the external auditors, the Executive Chairman of the Board, the Chief
Executive Officer and the Chief Financial Officer of the Company, any or
all of whom shall be entitled to attend. Notice of each meeting shall also
be given, as the case may be, to the internal auditor who shall also
attend whenever requested to do so by the Chair of the Committee or the
Corporate Secretary.4.4
    
    Notice of meeting may be given orally or by letter,
telephone facsimile transmission, telephone or electronic device not less
than 24 hours before the time fixed for the meeting. Members may waive
notice of any meeting. The notice need not state the purpose or purposes
for which the meeting is being held.4.5
    
    Opportunities should be afforded periodically to the
external auditors and, as the case may be, to the internal auditor and the
senior management to meet separately with the Committee. In addition, the
Committee may meet in camera, with only members of the Committee present,
whenever the Committee determines that it is appropriate to do so.4.6
    
    The Committee shall have the authority to retain
special legal counselling, accounting or other consultants as it may see
fit to attend its meetings and to take part in discussion and
consideration of the affairs of the Committee at the Companys expense.
 39




---



##### 



4.7
    
    The Corporate Secretary of the Company or designate
of the Corporate Secretary shall be the Secretary of all meetings of the
Committee and shall maintain minutes of all meetings and deliberations of
the Committee.
 5.
    
    RESPONSIBILITIES AND DUTIES
 5.1
    
    Role and responsibilities of the Committee Chair:
 5.1.1
    
    The Chair of the Committee:
 5.1.1.1
    
    Provides leadership for the committee by ensuring that:
 (i)
    
    The
responsibilities of the committee are well
understood by committee members and management.(ii)
    
    The
committee works as a cohesive team.(iii)
    
    Adequate resources and timely and relevant
information are available to the committee to
support its work.(iv)
    
    The
effectiveness of the committee is assessed on a
regular basis.(v)
    
    The
committees structure and mandate is appropriate
and adequate to support the discharge of the
committees responsibilities.(vi)
    
    The
scheduling, organization and procedures of
committee meetings provide adequate time for the
consideration and discussion of relevant issues.
 5.1.1.2
    
    Works with the Executive Chairman of the Board, the Chief
Financial Officer and the Corporate Secretary to set the
calendar of the committees regular meetings.5.1.1.3
    
    Has the authority to convene special meetings as
required.5.1.1.4
    
    Sets the agenda in collaboration with the Executive
Chairman of the Board, the Chief Financial Officer and the
Corporate Secretary.5.1.1.5
    
    Presides at meetings.5.1.1.6
    
    Acts as liaison with management with regard to the work
of the committee.
 40




---



##### 



5.1.1.7
    
    Reports to the Board concerning the work of the
committee.5.1.1.8
    
    Exercises the authority specifically delegated to the
Chair by the Committee, if any.
 5.2
    
    General ResponsibilitiesWhile the Committee has the responsibilities and powers set forth below,
it is not the duty of the Committee to plan or conduct audits or to
determine that the Companys financial statements are complete and
accurate. This is the responsibility of management and the external
auditors. Nor is it the duty of the Committee to conduct investigations,
or to assure compliance with laws and regulations. The Committee shall
review disagreements, if any, between management and the external
auditors and shall make recommendations to resolve such disagreements.
In the event that any such disagreement persists, the matter will be
referred by the Committee to the Board of Directors for a final
determination.5.3
    
    Review of Mandate of the CommitteeThe Board of Directors and the Committee shall review and reassess the
adequacy of this mandate on an annual basis.5.4
    
    Publicly Disclosed Financial Information
 5.4.1
    
    The Committee shall review and recommend
for approval by the Board of Directors, before release to the
public:
 5.4.1.1
    
    interim unaudited financial statements;5.4.1.2
    
    audited annual financial statements, in conjunction with
the report of the external auditors;5.4.1.3
    
    all public disclosure documents containing audited or
unaudited financial information, including any prospectus,
the annual information form and managements discussion and
analysis of financial condition and results of operations,
as well as related press releases, including earnings
guidance; and5.4.1.4
    
    the compliance of management certification of financial
reports with applicable legislation and attestation of the
Companys disclosure controls and procedures.
 5.4.2
    
    The Committee shall review any report
which accompanies published financial statements (to the extent such
a report discusses financial condition or operating results) for
 41




---



##### 



consistency of disclosure with the financial statements
themselves.5.4.3
    
    In its review of financial statements,
the Committee should obtain an explanation from management of all
significant variances between comparative reporting periods and an
explanation from management for items which vary from expected or
budgeted amounts as well as from previous reporting periods.5.4.4
    
    In its review of financial statements,
the Committee should review unusual or extraordinary items,
transactions with related parties, and adequacy of disclosures,
asset and liability carrying values, income tax status and related
reserves, qualifications, if any, contained in letters of
representation and business risks, uncertainties, commitments and
contingent liabilities.5.4.5
    
    In its review of financial statements,
the Committee shall review the appropriateness of the Companys
significant accounting principles and practices, including
acceptable alternatives, and the appropriateness of any significant
changes in accounting principles and practices.5.4.6
    
    The Committee shall satisfy itself that
adequate procedures are in place for the review of the Companys
public disclosure of financial information extracted or derived from
the Companys financial statements, and shall periodically assess
the adequacy of those procedures.
 5.5
    
    Financial Reporting and Accounting TrendsThe Committee shall:
 5.5.1
    
    Review and assess the effectiveness of
accounting policies and practices concerning financial reporting;5.5.2
    
    Review with management and with the
external auditors any proposed changes in major accounting policies,
the presentation and impact of significant risks and uncertainties,
and key estimates and judgments of management that may be material
to financial reporting;5.5.3
    
    Question management and the external
auditors regarding significant financial reporting issues discussed
and the method of resolution; and5.5.4
    
    Review general accounting trends and
issues of accounting policy, standards and practices which affect or
may affect the Company.
 42




---



##### 



5.6
    
    Internal Controls
 5.6.1
    
    The Committee shall review and monitor
the Companys internal control procedures, programs and policies,
and assess the adequacy and effectiveness of internal controls over
the accounting and financial reporting systems, with particular
emphasis on controls over computerized systems.5.6.2
    
    The Committee shall review:
 5.6.2.1
    
    The evaluation of internal controls by the external
auditors, together with managements response;5.6.2.2
    
    The working relationship between management and external
auditors;5.6.2.3
    
    The appointments of the Chief Financial Officer and any
key financial executives involved in the financial reporting
process;5.6.2.4
    
    The review and approval of the Companys hiring policies
regarding partners, employees and former partners and
employees of the present and former external auditor of the
Company;5.6.2.5
    
    Any decisions related to the need for internal auditing,
including whether this function should be outsourced and, in
such case, approving the supplier which shall not be the
external auditors; and5.6.2.6
    
    Internal control procedures to ensure compliance with the
law and avoidance of conflicts of interest.
 5.6.3
    
    The Committee shall undertake private
discussions with staff of the internal audit function to establish
internal audit independence, the level of co-operation received from
management, the degree of interaction with the external auditors,
and any unresolved material differences of opinion or disputes.
 5.7
    
    Internal Auditor
 The Committee shall:
 5.7.1
    
    Review the mandate and annual objectives
of the internal auditor, if the appointment of an internal auditor
is deemed appropriate;5.7.2
    
    Review the adequacy of the Companys
internal audit resources; and5.7.3
    
    Ensure the internal auditor has ongoing
access to the Chair of the Committee as well as all officers of the
Company,
 43




---



##### 



particularly the Executive Chairman of the Board and the Chief
Executive Officer.
 5.7.4
    
    Review the audit plans, performance and
summaries of the reports of the internal audit function as well as
managements response including follow-up to any identified
weakness.
 5.8
    
    External Auditors
 5.8.1
    
    The Committee shall recommend to the
Board of Directors the appointment of the external auditors, which
firm is ultimately accountable to the Committee and the Board of
Directors.5.8.2
    
    The Committee shall i) receive periodic
reports from the external auditors regarding the auditors
independence, the performance of the auditors, the qualifications of
the key audit partner and audit managers, a periodic review of the
auditors quality control procedures, material issues arising from
the periodic quality control review and the steps taken by the
auditors to address such findings, ii) discuss such reports with the
auditors, and if so determined by the Committee, iii) recommend that
the Board of Directors take appropriate action to satisfy itself as
to the independence of the auditors and the quality of their
performance.5.8.3
    
    The Committee shall take appropriate
steps to assure itself that the external auditors are satisfied with
the quality of the Companys accounting principles and that the
accounting estimates and judgments made by management reflect an
appropriate application of generally accepted accounting principles.5.8.4
    
    The Committee shall undertake private
discussions on a regular basis with the external auditors to review,
among other matters, the quality of financial personnel, the level
of co-operation received from management, any unresolved material
differences of opinion or disputes with management regarding
financial reporting and the effectiveness of the work of the
internal audit function.5.8.5
    
    The Committee shall review the terms of
the external auditors engagement and the appropriateness and
reasonableness of the proposed audit fees as well as the
compensation of any advisors retained by the Committee.5.8.6
    
    The Committee shall review and
pre-approve any engagements for non-audit services provided by the
external auditors or their affiliates to the Company or its
subsidiaries, together with the fees for such services, and consider
the impact of this on the independence of the external auditors.
 44




---



##### 



The Committee shall determine which non-audit services the
external auditors are prohibited from providing.
 5.8.7
    
    When a change of auditors is proposed,
the Committee shall review all issues related to the change,
including the information required to be disclosed by regulations
and the planned steps for an orderly transition.5.8.8
    
    The Committee shall review all
reportable events, including disagreements, unresolved issues and
consultations on a routine basis whether or not there is to be a
change of auditors.5.8.9
    
    When discussing auditor independence,
the Committee will consider both rotating the lead audit partner or
audit partner responsible for reviewing the audit after a number of
years and establishing hiring policies for employees or former
employees of its external auditor.
 5.9
    
    Audit Procedures
 5.9.1
    
    The Committee shall review the audit
plans of the internal and external audits, including the degree of
co-ordination in those plans, and shall inquire as to the extent to
which the planned audit scope can be relied upon to detect
weaknesses in internal control or fraud or other illegal acts. The
audit plans should be reviewed with the external auditors and with
management, and the Committee should recommend to the Board of
Directors the scope of the external audit as stated in the audit
plan.5.9.2
    
    The Committee shall review any problems
experienced by the external auditors in performing the audit,
including any restrictions imposed by management or significant
accounting issues on which there was a disagreement with management.5.9.3
    
    The Committee shall review the
post-audit or management letter containing the recommendations of
the external auditors, and managements response and subsequent
follow-up to any identified weakness.
 5.10
    
    Risk Management and Other Responsibilities
 5.10.1
    
    The Committee shall put in place procedures to receive and handle
complaints or concerns received by the Company about accounting or
audit matters including the anonymous submission by employees of
concerns respecting accounting or auditing matters.5.10.2
    
    The Committee shall review such litigation, claims, transactions
or other contingencies as the internal auditor,
 45




---



##### 



external auditors or any officer of the Company may bring to its
attention, and shall periodically review the Companys risk
management programs. In that regard the Committee shall review
the Companys major risk exposures and the steps taken by
management to monitor, control and report such exposures.5.10.3
    
    The Committee shall review the policy on use of derivatives and
monitor the risk.5.10.4
    
    The Committee shall review the related party transactions in line
with the New York Stock Exchange rules and regulations and those of
any other applicable exchange or regulator.5.10.5
    
    The Committee shall review assurances of compliance with covenants
in trust deeds or loan agreements.5.10.6
    
    The Committee shall review business risks that could affect the
ability of the Company to achieve its business plan.5.10.7
    
    The Committee shall review uncertainties, commitments, and
contingent liabilities material to financial reporting.5.10.8
    
    The Committee shall review the effectiveness of control and
control systems utilized by the Company in connection with financial
reporting and other identified business risks.5.10.9
    
    The Committee shall review incidents of fraud, illegal acts,
conflicts of interest and related-party transactions.5.10.10
    
    The Committee shall review material valuation issues.5.10.11
    
    The Committee shall review the quality and accuracy of
computerized accounting systems, the adequacy of the protections
against damage and disruption, and security of confidential
information through information systems reporting.5.10.12
    
    The Committee shall review material matters relating to audits of
subsidiaries.5.10.13
    
    The Committee shall review cases where management has sought
accounting advice on a specific issue from an accounting firm other
than the one appointed as auditor.5.10.14
    
    The Committee shall review any legal matters that could have a
significant impact on the financial statements.5.10.15
    
    The Committee shall consider other matters of a financial nature
it feels are important to its mandate or as directed by the Board of
Directors.
 46




---



##### 



5.10.16
    
    The Committee shall report regularly to the Board of Directors on
its proceedings, reviews undertaken and any associated
recommendations.5.10.17
    
    The Committee shall have the right, for the purpose of
discharging the powers and responsibilities of the Committee, to
inspect any relevant records of the Company and its subsidiaries.
 5.11
    
    Compensation
 Members of the Committee shall be entitled to receive such
remuneration for acting as members of the Committee as the Board
of Directors may determine from time to time.
 47




---



##### 



4.
Codes of Ethics




---



##### 



Codes of Ethics
 
 4.1 Code of Ethics and Business Conduct
         Founder and Executive Chairman of the Board
 49




---



##### 



1.
    
    VALUES, PHILOSOPHY, MISSION AND VISIONVALUESCGI has always believed in investing in the future to ensure continued success.
From the beginning, the Company has invested in developing a strong corporate
culture, based on six core values that reflect its approach to business. These
values are: quality and partnership, intrapreneurship and sharing, respect,
objectivity and integrity, financial strength and corporate social
responsibility. These values are at the heart of CGIs success. They ensure
that CGI takes a long-term view on business issues, and it builds long-lasting
partnerships with its clients.PHILOSOPHYThe success of CGI Group Inc. and its subsidiaries is based on the knowledge,
creativity and commitment of its members. CGI ensures this success by
recruiting the most qualified people available. CGIs members share in the
risks and rewards of CGIs business as partners of CGI and are committed to its
objectives. They take a disciplined approach to their work and constantly
strive for excellence to achieve the best results for every client. In
exchange, CGI strives to recognize the value of its members by offering them a
stimulating work environment that fosters their personal and professional
development.MISSIONThe mission of CGI is to help our clients with professional services of
outstanding quality, competence and objectivity, delivering the best solutions
to fully satisfy client objectives in information technology, business
processes and management.In all we do, we foster a culture of partnership, intrapreneurship, teamwork
and integrity, building a world class IT and business process services company.VISIONOur vision is to be a world class IT and business process services leader
helping our clients win and grow.
 50




---



##### 



2.
    
    PURPOSE AND SCOPE OF THE CODEThis Code of Ethics and Business Conduct (the Code) defines CGIs character
and guides the actions and decisions of the salaried employees (members),
officers and directors of CGI. Compliance with the Code is essential for many
reasons and notably to preserve and enhance CGIs reputation and maximize
shareholder value. In keeping with CGIs values, the Code outlines the
essential rules and guidelines necessary to preserve CGIs enviable reputation
among its clients and within its industry. The Code is not meant to be a
complete list of ethics and business conduct covering every eventuality. It
highlights situations that CGI members, officers and directors may face in
their duties. The code is meant to give them a broad and clear understanding of
the conduct expected of them, wherever CGI does business. While the specific
illustrations are primarily addressed to members, they should be read as being
equally applicable to the members of CGIs Board of Directors to the extent
that they may be applicable in the circumstances.Should a member be confronted with a situation where further guidance is
required, the matter should be discussed with the members manager. CGI
recognizes its obligation to support its members, officers and directors as
ethical issues arise.3.
    
    MEMBERS CONDUCT AND BEHAVIOURGENERAL CONDUCTUpon joining CGI, and annually thereafter, all members undertake, by signing
the Member Commitment to the Code of Ethics and Business Conduct, to abide by
the Company Code of Ethics and Business Conduct and related policies and
guidelines.If a member ceases to be employed by CGI for any reason, the Member Commitment
specifies which elements continue to apply, namely those related to the
confidentiality obligations.RESPECT AND INTEGRITYAll members of CGI support the Companys philosophy and contribute to CGIs
development and good reputation by promoting synergy and teamwork, by
expressing their ideas and by adopting the highest standards of service quality
and integrity. The members of CGI are its ambassadors. They must always behave
responsibly and demonstrate courtesy, honesty, civility and respect for other
members of CGI, for its clients and for its suppliers.
 51




---



##### 



LOYALTYMembers are expected to act at all times with diligence and loyalty towards CGI
and in such a way as to safeguard CGIs interests. Members should not act in a
way or publicly hold a position that might harm the image or reputation of CGI.RELATIONS WITH CLIENTSCGIs services often involve visiting or working at a clients place of
business. A member working at a clients site must comply with the clients
practices and procedures and treat the clients facilities with respect. The
member must work as efficiently and meticulously as possible and leave the
clients premises and property as he or she found them. As well, members must
use the clients information and systems infrastructures for the sole purpose
of the clients contract and protect those infrastructures and information at
all times.RELATIONS WITH COMPETITORSIf a member is working with a competitor of CGI on a joint project for a
client, the member must avoid any situations that could cause conflicts. The
member must respect the roles that the client has assigned to each party and
work as a team in the clients best interests. CGIs members also have both an
ethical and a legal responsibility to portray the Companys competitors fairly
and accurately. CGI does not tolerate its members using improper means for
gathering information about its competitors.MAINTENANCE OF ASSETSAll members of CGI have a responsibility to protect CGIs assets against loss,
theft, abuse and unauthorized use or disposal. If, in the course of his or her
work, a member of CGI is supplied with any property belonging to CGI or to a
third party, the member must use said property solely for work-related purposes
as specified in the binding agreement he or she signed upon joining CGI. More
specifically, the members must use CGIs systems infrastructures in a manner
consistent with legal requirements, professional ethics, the policies
established by the administrators of CGIs network and of any external networks
that the member uses, and must respect the copyrights protecting any software
that the member also uses. As well, members must never use the clients systems
infrastructures, including the clients software, for any purpose that is not
work-related. CGI applies a zero-tolerance policy to any abuse of its systems
infrastructures or those of its clients.At the end of employment, members are required to return all CGI property and
assets in their possession to their manager or to a designated CGI
representative.
 52




---



##### 



4.
    
    INTEGRITY OF BOOKS AND RECORDS AND COMPLIANCE WITH SOUND
ACCOUNTING PRACTICESPREPARATION OF BOOKS AND RECORDSAccuracy and reliability in the preparation of all business records is of
critical importance to the decision-making process and to the proper discharge
of financial, legal and reporting obligations. All business records, expense
accounts, invoices, bills, payroll and member records and other reports are to
be prepared with care and honesty. False or misleading entries are not
permitted in CGIs books and records.FINANCIAL TRANSACTIONSAll financial transactions are to be properly recorded in the books of account
and accounting procedures are to be supported by the necessary internal
controls. In turn, all books and records of CGI must be available for audit.MEMBER RESPONSIBILITIESIn relation to CGIs books and records, members must:
 i)
    
    not intentionally cause Company documents to be
incorrect in any way;ii)
    
    not create or participate in the creation of any
records that are intended to conceal anything that is improper;iii)
    
    properly and promptly record all disbursements of
funds;iv)
    
    co-operate with internal and external auditors;v)
    
    report any knowledge of any untruthful or inaccurate
statements or records or transactions that do not seem to serve a
legitimate commercial purpose; andvi)
    
    not make unusual financial arrangements with a client
or a supplier (such as, over-invoicing or under-invoicing) for payments on
their behalf to a party not related to the transaction.
 BREACHESSuspected breaches of the Code which directly or indirectly affect CGIs
business must be reported to the Chief Financial Officer, the Chief Executive
Officer or the Chair of the Audit and Risk Management Committee and to CGIs
Corporate Secretary.In addition, CGI has established a policy for incident reporting (often
referred to as a whistleblower policy) as well as a process under that
 53




---



##### 



policy which allows any person who has direct knowledge of specific facts to
report incidents where the Company is exposed to a serious risk in matters of
accounting, auditing, internal accounting controls, finance, banking or
financial corruption. The process in place protects the incident reporter and
ensures the confidentiality of the report. See the heading Compliance with
the Code below.
 5.
    
    CONFIDENTIAL INFORMATION AND INTELLECTUAL PROPERTYDEFINITIONSConfidential InformationConfidential Information means information about the Companys business
dealings, development strategies and financial results; products or processes;
client lists; vendor lists or purchase prices; cost, pricing, marketing or
service strategies; results of research and development work, technical
know-how, manufacturing processes, computer software; reports and information
related to mergers, acquisitions and divestitures. Confidential Information
also includes information that relates to intellectual property and may
include, but is not limited to: business strategies, product marketing and
costing information and information provided by suppliers and competitors. In
addition, the way the Company puts publicly-known information together, to
achieve a particular result, is often a valuable trade secret.The following information and documents constitute confidential information or
documents of CGI or its clients, as the case may be:
 i)
    
    methodologies;ii)
    
    all information related to: processes, formulas,
research and development, products, financials, marketing; names and lists
of customers, employees and suppliers as well as related data; computer
programs, all software developed or to be developed including flow charts,
source and object codes;iii)
    
    all information related to projects undertaken by the
Company whether they are merger and acquisition or divestiture projects or
projects related to large client contracts, including all information
obtained in due diligence initiatives, whether such information pertains
to CGI or to any third party; andiv)
    
    all other information or documents that, if
disclosed, could be prejudicial to CGI or its clients.
 54




---



##### 



Intellectual PropertyIntellectual Property (IP) means patents, copyrights, trademarks, trade
secrets and industrial designs of CGI.NON-DISCLOSURE UNDERTAKINGCGI Confidential InformationDuring the normal course of business, members will have access to confidential
information about CGI. In some cases, the information may affect the value of
CGI shares. Each member must protect the confidentiality of all confidential
CGI information and documents. Members cannot discuss them away from work, and
cannot divulge any confidential CGI information or any information that could
harm CGI. Confidential CGI information could include information from other
members or information acquired from outside sources, sometimes under
obligations of secrecy. Members are expected to use such information
exclusively for business purposes and this information must not be disclosed
externally without the approval of a members manager.Third Party AgreementsIn cases where information or records are obtained under an agreement with a
third party, such as software licenses or technology purchases, members must
ensure that the provisions of such agreements are strictly adhered to so that
CGI will not be deemed to be in default. Unauthorized disclosure or use of
information or records associated with these agreements could expose the member
involved and/or CGI to serious consequences.DISCLOSURE GUIDELINESInsider InformationConfidential information about CGI or other public companies may not be used as
a basis for trading in CGI securities, or the securities of any other company
in respect of which CGI or its members, consultants or advisers are in
possession of insider information. For this purpose, CGI has an established
policy regarding the use of insider information and trading in securities. This
policy is entitled Guidelines on Timely Disclosure of Material Information and
Transactions in Securities by Insiders which extends to all directors,
officers and, when in possession of Confidential Information, members, those
authorized to speak on behalf of CGI and all other insiders. It is designed to
protect the integrity of the Company and its directors, officers and members
while ensuring compliance with all applicable securities legislation in Canada,
the United States and other countries. The law stipulates that insiders may not
take advantage of inside information to trade in the securities of a company.
Likewise, employees must not provide third parties with any information that
would give them an unfair advantage when trading in securities of the company,
 55




---



##### 



including client companies or any other company that is the subject of an
acquisition, divestiture or client related project.
 Material InformationCGIs guidelines on disclosure also cover the disclosure of information with a
material impact, defined as any information that, if disclosed to a potential
investor, could affect his or her perception of the value of the Company as an
investment. Because CGI is a publicly traded company, any information that may
have a material impact on CGIs results or on the perception of the value of
the stock must be communicated in accordance with CGIs Guidelines on Timely
Disclosure of Material Information and Transactions in Securities of CGI by
Insiders. If a member thinks that he or she is in possession of a piece of
information that is not known to management and may have a material impact on
the Company, the member must communicate it immediately to either the Executive
Chairman of the Board, the Chief Executive Officer, the Corporate Secretary, or
the Chief Financial Officer, without divulging it to anyone else.Client InformationJust as CGIs members must protect confidential information about CGI, they
must also show discretion at all times with regard to the clients business
affairs. Unless a member has the clients express authorization, he or she
should never reveal any information that could harm the clients interests and
should never use any information that he or she obtains in the course of a
project or assignment for any purpose other than that project or assignment. If
the client restricts the distribution of certain information within its own
organization, the member must comply with those restrictions as well.Member InformationCGI collects and maintains personal information relating to its members,
including medical and benefits information. Access to such information is
restricted to CGI personnel on a need-to-know basis. They must ensure that this
information is not disclosed in violation of CGIs policies and practices.
Personal information is released to outside parties only with the members
approval, except to satisfy the requirements considered by CGI to be
appropriate for legal reasons.Intellectual PropertyIn the course of their duties, members may develop or create new designs,
inventions, systems or processes, products or documents. When these
achievements have been made as a direct result of a members employment with
the Company and through use of CGIs resources, they belong to CGI. Moreover,
CGI is free to use this work as it so wishes and members cannot use nor
divulge, publish or otherwise disseminate it without prior written consent from
CGI. Upon request, members will execute documents made necessary to confirm or
complete the assignment of rights to CGI. Upon joining CGI, and in Canada only,
 56




---



##### 



members agree, by signing the Member Commitment to the Code of Ethics and
Business Conduct, to waive their moral rights in favour of CGI.
 Suppliers and Partners InformationAll information on CGI suppliers and partners is also confidential and must not
be disclosed without the express consent of the persons concerned.6.
    
    CONFLICTS OF INTERESTDEFINITIONThe members of CGI must avoid any actual or apparent conflicts of interest and
should never engage in any conduct which is harmful to CGI or its reputation. A
conflict of interest exists when a member favours his or her personal interests
over those of CGI or its clients or when an obligation or situation arising
from a members personal activities or financial affairs may adversely
influence the members judgement in the performance of his or her duties at
CGI.GUIDELINESThe following guidelines provide guidance for members to avoid situations which
are or may appear to be in conflict with their responsibility to act in the
best interest of the Company.Financial Interests A conflict of interest exists when a member who is able
to influence business with CGI owns, directly or indirectly, a beneficial
interest in an organization which is a competitor of CGI, or which has current
or prospective business as a supplier, customer or contractor with CGI. This
does not include the situation where the financial interest in question
consists of shares, bonds or other securities of a company listed on a
securities exchange and where the amount of this interest is less than one
percent of the value of the class of security involved.Outside Work When a member, directly or indirectly, acts as a director,
officer, employee, consultant or agent of an organization that is a competitor
of CGI, or which has current or prospective business as a supplier, customer or
contractor with CGI, there is a conflict of interest. Similarly, a conflict of
interest may exist when a member undertakes to engage in an independent
business venture or to perform work or services for another entity should that
activity prevent such member from devoting the time and effort to the conduct
of CGIs business, which his or her position requires.Gifts or Favours A conflict of interest will arise when a member, either
directly or indirectly, solicits or accepts any gift or favour from any person
or organization which is a competitor of CGI, or which has current or
 57




---



##### 



prospective business with CGI as a customer, supplier, partner or
contractor.For this purpose, a gift or favour includes any gratuitous service, loan,
discount, money or article of value. It does not include articles of nominal
value normally used for sales promotion purposes, ordinary business meals or
reasonable entertainment consistent with local, social or business customs if
received in a sporadic manner.Commissions CGI or its members will never accept any commissions from a
third-party vendor when recommending software, hardware or any equipment to a
client as part of a service agreement.Trading with CGI A conflict of interest may exist when a member is directly
or indirectly a party to a transaction with CGI.Misappropriation of Business Opportunities A conflict of interest will exist
when a member, without the knowledge and consent of CGI, appropriates for his
or her own use, or that of another person or organization, the benefit of any
business venture, opportunity or potential opportunity about which the member
may have learned or that he or she may have developed during the course of his
or her employment.Bribes Neither CGI nor its members will pay bribes to clients or client
representatives to obtain business from them.REPORTINGIf a member thinks that he or she has been placed in a conflict of interest,
the member must inform his or her manager and work with him or her to determine
how the situation may be corrected.7.
    
    LAWS, STATUTES AND REGULATIONSCOMPLIANCE WITH THE LAWIt is CGIs policy to comply, not merely with the letter, but also with the
spirit of the law. CGI is required to maintain compliance with various acts,
statutes and regulations governing activities in the jurisdictions in which it
carries on business and expects members acting on its behalf to do likewise.
Members are also expected to report any situation of concern to CGIs Corporate
Secretary.GUIDELINES FOR COMPLIANCEThis Code does not seek to provide legal guidance for all laws, statutes and
regulations that impact CGIs activities. Specialized resources  legal, tax,
environmental, government relations, personnel  are available within
CGI for that purpose. There are, however, several items of legislation that
 58




---



##### 



warrant specific mention. These are listed below along with some general
guidelines for compliance.
 HEALTH AND SAFETY LAWSCGI is committed to creating and maintaining healthy and safe workplaces for
its members. Members are expected to comply with all safety laws, regulations
and directives from their managers (which may not necessarily be a law or
regulation).ENVIRONMENTAL LAWSCGI is committed to preserving and enhancing the environment in the communities
where its various businesses operate through responsible and
environmentally-oriented operating practices. Members are encouraged to
participate in undertakings geared to improving the environment in both their
workplace and their community.HUMAN RIGHTS LEGISLATIONEvery person has the right to equal treatment with respect to employment and
the right to be free of discrimination because of race, ancestry, place of
origin, colour, ethnic origin, citizenship, creed, sex, sexual orientation,
age, pregnancy, record of offences, marital status, social conditions,
political beliefs, language, veteran status (U.S. only), family status,
disability or means used to overcome a disability. The following are CGIs
policies on equal employment opportunity, anti-discrimination and
anti-harassment as well as the procedure for reporting any breach or violation
of these policies:
 i)
    
    Equal Employment Opportunity CGI is committed to
treating all people fairly and equitably, without discrimination. The
company has established a program to ensure that groups which are often
subject to discrimination are equitably represented within CGI and to
eliminate any employment rules and practices that could be discriminatory.
CGI regards diversity among its members as a priceless resource and one
which enables the Company to work harmoniously with clients from around
the world.ii)
    
    Anti-Harassment and Anti-Discrimination Policies
CGI recognizes that everyone has the right to work in an environment free
of sexual, psychological and racial harassment. CGI will do everything in
its power to prevent its members from becoming victims of such harassment.
CGI defines sexual, psychological or racial harassment as any behaviour,
in the form of words, gestures, or actions, generally repeated, that has
undesired sexual, psychological or racial connotations, that has a
negative impact on a persons dignity or physical or psychological
integrity, or that results in that person being subjected to unfavourable
working conditions or dismissal.CGI will prevent any form of harassment or discrimination against job
candidates and members on any of the grounds mentioned above,
whether during the hiring process or during employment. This
 59




---



##### 



commitment
applies to such areas as training, performance assessment, promotions,
transfers, layoffs, remuneration and all other employment practices and
working conditions.
 All CGI managers are personally accountable for enforcing this policy and
must make every effort to prevent discriminatory or harassing behaviour and
to intervene immediately if they observe a problem or if a problem is
reported to them.CGI requires that all members refrain from any form of harassment or
discrimination against anyone else. CGI will not tolerate any violations of
this policy whatsoever.iii)
    
    Procedure for Reporting Discrimination or Harassment
  Any member of CGI who feels discriminated against or harassed can and
should, in all confidence and without fear of reprisal, personally report
the facts to the vice-president of his or her business unit and to the
human resources leader either in that business unit, in the country or at
the corporate head office. The facts will be examined carefully by these
two individuals. Neither the name of the person reporting the facts nor
the circumstances surrounding them will be disclosed to anyone whatsoever,
unless such disclosure is necessary for an investigation or disciplinary
action. Any disciplinary action will be determined by these same two
people and will be proportional to the seriousness of the behaviour
concerned. CGI will also provide appropriate assistance to any member who
is a victim of discrimination or harassment. In addition, retaliation
against persons who make complaints of harassment, witness harassment,
offer testimony or are otherwise involved in the investigation of
harassment complaints will not be tolerated.
 COMPETITION ACTCGI is required to make its own decisions on the basis of its best interest and
must do so independent of agreements or understandings with competitors. The
Competition Act (Canada) or corresponding provisions of foreign legislation in
matters of competition prohibit certain arrangements or agreements with others
regarding product prices, terms of sale, division of markets, allocation of
customers or other practices that restrain competition. It is the
responsibility of each manager to comply with the letter and spirit of all
competition laws as they apply to CGI.Should a question or doubt arise with respect to competition-sensitive issues,
they must immediately be brought to the attention of CGIs Corporate Secretary.SECURITIES LAWS AND INSIDER TRADINGMembers who possess material non-public information may not buy or sell CGI
securities while such information remains non-public and must
 60




---



##### 



refrain from
passing such information on to others, including family and friends. These
trading prohibitions apply to members at all levels  not just officers or
managers. The prohibition on such trading is based on such information
potentially providing an unfair advantage to the member.
 Material non-public information is non-public information that is significant
enough that, if publicly known, is likely to affect the market price of any of
CGIs securities. CGI has adopted Guidelines on Timely Disclosure of Material
Information and Transactions in Securities of CGI by Insiders. Each member,
officer and director must abide by the provisions of these guidelines, when
applicable.8.
    
    MEMBER, CLIENT, INVESTOR AND MEDIA RELATIONSCOMMUNICATIONS IN GENERALCommunications Policy
 i)
    
    Within CGI CGIs management philosophy demonstrates
the value it places on its members participation in the Companys
activities. Communication is a key responsibility of all members. CGI
encourages open communication and the sharing of information because it
believes its members are its most valuable ambassadors.ii)
    
    Outside of CGI CGI also believes in maintaining
open communication with its clients, shareholders, the investment
community, industry analysts, regulators, the media and other interested
parties. Clear and professional communication enables CGI to promote its
services and solutions to its various audiences.
 Communications within CGI
 i)
    
    Member Input CGI encourages its members to share
their opinions and ideas, both at scheduled meetings and in the member
surveys circulated for this purpose. Regular team meetings are held in all
of CGIs business units, providing opportunities for its members to get to
know their colleagues better, to discuss topics of common interest and to
receive information about developments both in their business unit and in
the company. During the annual tour of all business units, the senior
managers of CGI provide a review for the members of the past years
performance and discuss CGIs strategies for the coming year.ii)
    
    Member Satisfaction Assessment Process Each year,
all members of CGI are asked to participate in the Member Satisfaction
Assessment Process (MSAP) by filling out a survey questionnaire. The
answers provided in this questionnaire and the comments made in the
Message to the Senior Management section enable CGI corporate and
operational management to improve policies and
programs and develop action plans to achieve CGIs objective of becoming
the best employer in the industry. Members of CGI can rest
 61




---



##### 



assured that
their answers and comments on this questionnaire are kept entirely
confidential.
 iii)
    
    Newsletter, Other Communications and the Intranet
site The purpose of internal communications is to fulfill CGIs promise
to provide all members with complete, meaningful, up-to-date information
about CGIs activities on an ongoing basis. Examples of ongoing
communications initiatives include the member newsletter, Perspectives;
quarterly (audio) webcasts, Ontrack, and CGIs enterprise Intranet site,
all of which keep the members informed about CGIs current projects and
recent successes. CGIs Intranet site is intended to implement an
infrastructure that allows CGI to share information and corporate policies
with all of its members more rapidly.
 Corporate Communications DepartmentThe Corporate Communications department of CGI is responsible for developing
and managing the policies and programs for CGIs communications activities both
within and outside of the company. The Corporate Communications teams mandate
includes the establishment of a corporate identity that includes not only the
visual branding, but also how to describe and talk about CGI. CGIs Corporate
Communications Program has been designed to focus on three key audiences:
members, clients and investors.World Wide Web siteAs a key component of the corporate communications program, the CGI Web site is
designed to ensure a flow of information to current and future members, current
and prospective clients and investors. CGIs Web site is constantly changing
and evolving to achieve CGIs worldwide communication strategy. CGI encourages
its members and shareholders to keep up with the latest news on CGI and its
activities through CGIs Website at www.cgi.com.COMMUNICATIONS WITH CLIENTS
 i)
    
    Initiatives with Clients CGI is successful because
it works hard at communicating effectively with its clients around the
world. A Corporate Identity Manual is available in each of the business
units. This manual provides guidelines which must be followed by all
members for all external communications. A branding section is posted on
the Intranet that supports the overall branding effort, educating members
on how best to manage the brand. It also provides rules, as well as tools,
for sales collaterals and presentations, advertising, and trade show and
conference participation.ii)
    
    Marketing Materials A range of marketing materials
has been developed in collaboration with leaders across CGI, representing
its various business units, industry sectors and areas of expertise.
 62




---



##### 



Included are computer-based presentations and brochures about CGI. These
materials are available to all members who work directly with the
companys clients, and can be located on the companys Intranet site.
 COMMUNICATIONS WITH INVESTORS AND MEDIACGI strives to maintain strong relations with its shareholders and has
developed an integrated program to manage communications with its shareholders
as well as with others in the investment community and with the media. As a
publicly traded company, CGI must demonstrate discipline in dealing with
external audiences. CGI has therefore adopted Guidelines on Timely Disclosure
of Material Information and Transactions in Securities of CGI by Insiders.
Such guidelines include (i) Timely Disclosure and Prohibition Against Selective
Disclosure and (ii) CGIs Corporate Disclosure Policy.Release of InformationCGI regularly issues news releases in North America, Europe and around the
world when it concludes major agreements, signs important contracts or has any
other news of general interest or material information. CGI also provides
financial information to institutional investors and financial analysts and
other interested parties by issuing quarterly financial news releases,
quarterly shareholders reports, annual reports, annual notices and corporate
and financial profiles. These documents are distributed through newswires
and/or posted on SEDAR and EDGAR, as well as on the CGI Web site. CGI also
holds meetings with the investment community and hosts special events, such as
its annual Investor Day and the annual general meeting of shareholders, where
CGI communicates directly with the investment community and shareholders.Internet BroadcastsCGI strives to share information democratically by using Internet technology to
broadcast its major communication events to all of its shareholders, other
investors, analysts and the media. CGI broadcasts live and also archives its
annual shareholders meeting for replay via its Web site. It also broadcasts
live and archives its regular and special telephone conferences with investors
and analysts to disclose its quarterly financial results and major news. Where
possible, it also broadcasts presentations at brokerage-sponsored conferences.
CGI strives to give current and prospective shareholders and analysts a
transparent picture of CGI. This information helps investors better understand
CGIs strategy and strengths, so that its shares will trade on the market at
their fair value.Authorized SpokespersonsMedia and investor interaction is the responsibility of authorized CGI
spokespersons, who ensure the timely and informed communication of relevant
information. All authorized spokespersons must demonstrate
 63




---



##### 



high standards of
integrity and transparency, while refraining from unauthorized disclosure of
proprietary or non-public material information.
 InitiativesAll initiatives related to investor and media communications must be directed
through CGIs Chief Executive Officer. Furthermore, members should make sure
that CGIs authorized spokespersons know about any relevant issue of local or
national interest that relates to CGIs business, of which they may not be
aware.9.
    
    COMMUNITY ACTIVITIES AND POLITICAL AND PUBLIC CONTRIBUTIONSCGI respects and supports the right of its members as individuals to
participate in both community and political activities outside of work hours.
No contributions of any kind may be made by a member to any political party,
candidate or campaign on behalf of CGI without the approval of CGIs Chief
Executive Officer. However, CGI may itself make contributions to political
parties as permitted by law.10.
    
    COMPLIANCE WITH THE CODEMANAGEMENT RESPONSIBILITIESCGIs managers have a special duty to be role models of appropriate business
conduct and to see that the principles and policies of this Code and of other
CGI guidelines and policies referred to in this Code are upheld. This means:
 i)
    
    Copy of the Code Ensuring that all members have a
copy of the Code, and that they understand and comply with its provisions.ii)
    
    Assistance Offering assistance and explanations to
any member who has questions, doubts or is in a difficult situation.
Managers are also required to counsel members promptly when their conduct
or behaviour is inconsistent with the Code.iii)
    
    Enforcement Taking prompt and decisive action when
a violation of the Code has occurred, in consultation with CGIs Corporate
Secretary . If a manager knows a member is contemplating a prohibited
action and does nothing, the manager will be held responsible along with
the member.
 MEMBER RESPONSIBILITIESEach member is accountable for observing the rules of conduct that are normally
accepted as standard in a business enterprise. In addition they must abide by
the following:
 64




---



##### 



i)
    
    Compliance CGIs members are expected to comply
with the Code and all policies and procedures of the company as well as to
actively promote and support CGIs values.ii)
    
    Preventing Members should take all necessary steps
to prevent a Code violation.iii)
    
    Reporting Members must immediately report to their
manager (i) situations of non-compliance with respect to this Code of
which they become aware and (ii) suspected violations of the Code. All
information will, to the extent possible, be received in confidence. It is
corporate policy not to take action against a member who reports in good
faith unless unusual circumstances warrant such action.In addition, CGI has established a policy for incident reporting (often
referred to as a whistleblower policy) as well as a process under that
policy which allows any person who has direct knowledge of specific facts to
report incidents in which the Company is exposed to a serious risk in
matters of accounting, auditing, internal accounting controls, finance,
banking or financial corruption. The process in place protects the incident
reporter and ensures the confidentiality of the report.Incident reports may be submitted either by telephone by dialing
1-800-422-3076 toll free, by dialing (503) 748-0564 and reversing the long
distance charges, or by submitting an incident report online. For telephone
reports, all long distances charges will be at the expense of CGI. For
those who wish to submit incident reports online, a link to the incident
reporting web site is provided on CGIs Enterprise Portal or members may
access the incident reporting system directly at
www.ethicspoint.com.CGIs incident reporting system is managed by EthicsPoint, Inc., a company
unrelated to CGI which has undertaken to ensure the confidentiality of all
incident reporters as well as the confidentiality of the reports they
submit.CGIs policy on incident reporting is entitled the Serious Ethical Incidents
Reporting Policyand is available on the CGI Enterprise Portal on the
policies page.iv)
    
    Consequences Unethical behaviour, violations of
this Code and of CGIs other guidelines and policies, as well as
withholding information during the course of an investigation regarding a
possible violation of the Code, may result in disciplinary action which
will be commensurate with the seriousness of the behaviour. Such action
could include termination as well as civil or criminal action.
 65




---



##### 



11.
    
    ADMINISTRATION OF THE CODEPERIODIC REVIEWResponsibility for the periodic review and revision of the Code lies with CGIs
Corporate Governance Committee.MONITORING COMPLIANCEThe Board of Directors of CGI will monitor compliance with the Code and will be
responsible for the granting of any waivers from compliance with the Code for
directors and officers of CGI. These waivers will be disclosed publicly in due
course by the Board of Directors of CGI who shall also specify the
circumstances and rationale for granting the waivers, as the case may be. The
Corporate Secretary of CGI shall, when deemed appropriate, make reports to the
Board of Directors of CGI with respect to compliance with this Code.QUESTIONSQuestions concerning this Code should be referred to a members manager who,
when warranted, shall report to CGIs Corporate Secretary.
 66




---



##### 



4.2 Executive Code of Conduct
     1.
    
    HONEST AND ETHICAL CONDUCTRESPECT AND INTEGRITYThe officers of CGI are its ambassadors. They must always behave responsibly
and demonstrate courtesy, honesty, civility and respect for all other employees
of CGI, for its clients and for its suppliers.ETHICSSupporting CGIs objectives, officers in performing their duties will carry out
their responsibilities at all times in a way that promotes ethics in their
leadership. The officers will:
 (i)
    
    Undertake their responsibilities in a vigilant manner
in the interests of CGI and to avoid any real or perceived impression of
personal advantage;(ii)
    
    Advance CGIs legitimate interests when the
opportunity arises at all times ahead of their own interests;(iii)
    
    Proactively promote ethical behavior among
subordinates and peers; and(iv)
    
    Use corporate assets and resources in a responsible
and fair manner, having regard for the interests of CGI.
 AVOIDANCE OF CONFLICT OF INTERESTOfficers must avoid any actual or apparent conflicts of interest and should
never engage in any conduct that is harmful to CGI or its reputation. Such a
conflict would exist when an officer favours his or her personal interests
 67




---



##### 



over those of CGI or its clients or when an obligation or situation arising
from an officers personal activities or financial affairs may adversely
influence the officers judgment in the performance of his or her duties to
CGI.Officers will not knowingly do business with any parties related to CGI, any of
CGIs clients or any firms with which CGI does business if such business would
be material or would be outside of normal client related activity.Officers shall not solicit or accept gifts or favours from related parties,
clients or firms with which CGI does business beyond customary courtesies. For
this purpose, a gift or favour includes any gratuitous service, loan,
discount, money or article of value. It does not include articles of nominal
value normally used for sales promotion purposes, ordinary business meals or
reasonable entertainment consistent with local, social or business customs if
received in a sporadic manner.Officers will not perform work or render services for, or knowingly make a
material investment in, organizations that compete with CGI or with which CGI
does business without appropriate approval from CGIs Corporate Secretary.If an officer thinks that he has been placed in a conflict of interest, the
Officer must inform CGIs Corporate Secretary.2.
    
    FULL, FAIR, ACCURATE, TIMELY AND UNDERSTANDABLE DISCLOSUREANNUAL AND QUARTERLY REPORTSEach officer shall read each annual or quarterly report filed or submitted
under the applicable securities laws and satisfy himself or herself that the
report does not contain any untrue statement of a material fact or omit to
state a material fact that is necessary in order for the statements made not to
be misleading, in light of the circumstances in which such statements were
made.FINANCIAL STATEMENTSEach officer shall satisfy himself or herself that the financial statements,
and other financial information included in the report, fairly present in all
material respects the financial condition and results of operations of CGI as
of, and for, the periods presented in the report.REPORTS TO SECURITIES REGULATORSOfficers shall perform their responsibilities with a view to causing periodic
reports filed with securities regulators to contain information which is
accurate, complete, fair and understandable and to be filed in a timely
fashion.
 68




---



##### 



REPORTING CONCERNS AND COMPLAINTSAn officer who believes it is necessary or appropriate to do so can refer
concerns about the quality and scope of financial or related reporting
requirements to the Chair of the Audit Committee. Any officer who receives a
bona fide material complaint about financial reporting from any employee shall
report such complaints to the Audit Committee. Any officer who has disclosed
such concerns in good faith shall not face any form of retribution.3.
    
    COMPLIANCE WITH LAWS, RULES AND REGULATIONSThe officers are cognizant of their leadership roles within the organization
and the importance of compliance with the letter and spirit of applicable laws,
rules and regulations relating to financial and related reporting.4.
    
    COMPLIANCE WITH THE CODEGENERAL RESPONSIBILITIESOfficers have a special duty to be role models of appropriate business conduct
and see that the principles and policies of this Code and other CGI guidelines
and policies are upheld.REPORTINGAny violation or suspected violation of the Code should be personally reported
by an officer to CGIs Corporate Secretary.ACCOUNTABILITYNon-compliance with this Code in every respect by an officer will be a matter
for consideration and review by the Board of Directors of CGI.
 69




---



##### 



4.3 Guidelines on Timely Disclosure of Material Information and Transactions
in Securities of CGI by Insiders
    I.
    
    TIMELY DISCLOSURE AND PROHIBITIONS AGAINST SELECTIVE
DISCLOSURE1It is fundamental that all persons investing in securities have equal access to
information that may influence their investment decisions, therefore placing
all participants in the market on an equal footing. The timely disclosure
policies of the Toronto Stock Exchange (the TSX)2 and the New York
Stock Exchange (the NYSE) (collectively, the Exchanges) and of the Canadian
Securities Administrators (the CSA) (individually, a Timely Disclosure
Policy and collectively, the Timely Disclosure Policies) elaborate upon the
provisions of the Securities Act (Québec), and the securities legislation of
all of the provinces of Canada (collectively, the Legislation) which require
that when a material change occurs which is not generally known, a press
release disclosing the substance of the change must be issued.DEFINITION OF MATERIAL INFORMATIONMaterial information is any information relating to the business and affairs of
CGI that results in or would reasonably be expected to result in a significant
change in the market price or value of CGI securities (the CGI Securities).
Material information consists of both material changes3
and
material facts4
relating to the business and affairs of CGI. A
material change includes a decision to implement such a change made by the
board of directors or by senior management who believe that confirmation of the
decision by the board of directors is probable.
 
 1
    
    Definitions provided in Sections I and II apply only to those
Sections.2
    
    Respectively, the Toronto Stock Exchange Policy Statement on Timely
Disclosure, the Listed Company Manual of the New York Stock Exchange (both
available on the TSX website) and National Policy 51-201 on disclosure
standards and which provide guidance on best disclosure practices.3
    
    A material change is a change in the business, operations or capital
of the issuer that would reasonably be expected to have a significant effect
on the market price or value of any of the securities of the issuer and
includes a decision to implement a change made by the board of directors of
the issuer or by senior management of the issuer who believe that confirmation
of the decision by the board of directors is probable.4
    
    A material fact is a fact that significantly affects, or would
reasonably be expected to have a significant effect on, the market price or
value of a security of the issuer. The Securities Act (Québec) refers to
privileged information which is defined as any information that has not
been disclosed to the public and that could affect the decision of a
reasonable investor. (Refer to Section III of this document). 70




---



##### 



It is the responsibility of CGI to determine the materiality of
information, as it relates to CGI. When making materiality judgments, CGI
should consider factors such as the nature of the information, the volatility
of CGI Securities and prevailing market conditions. Ongoing monitoring and
assessment of market reaction by CGI to different disclosures will be helpful
when making materiality judgments in the future. As a guiding principle, if
there is any doubt about whether particular information is
material5, the CSA encourage companies to err on the side of caution
and release information publicly.Pursuant to the Timely Disclosure Policy of the TSX, the following examples of
corporate developments are likely to constitute material information requiring
prompt disclosure:
 
    
    a change in share ownership that may affect the control of
the company;
    
    a change in the corporate structure such as a merger, an
amalgamation or a reorganization;
    
    a take-over bid or issuer bid;
    
    a major corporate acquisition, disposition or joint venture;
    
    a stock split, consolidation, stock dividend or other change
in capital structure;
    
    the borrowing of a significant amount of funds;
    
    the public or private sale of additional securities;
    
    the development of a new product and/or a development
affecting the companys resources, technology, products or markets;
    
    entering into or loss of a significant contract;
    
    firm evidence of a significant increase or decrease in near
term earnings prospects;
    
    an important change in capital investment plans or corporate objectives;
    
    a significant change in management;
    
    significant litigation;
    
    a major labour dispute or a dispute with a major contractor
or supplier;
    
    an event of default under a financing or other agreement;
 
 5
    
    U.S. case law has interpreted information to be material if
there is a substantial likelihood that a reasonable shareholder would
consider it important in making an investment decision. Also, according to
the U.S. case law, information will be considered material if there is a
substantial likelihood that a fact would have been viewed by the reasonable
investor as having significantly altered the total mix of information
available. 71




---



##### 




    
    a declaration or omission of dividends;
    
    a call of securities for redemption; and
    
    any other development relating to the business and affairs of
a company that would reasonably be expected to significantly affect the
market price or value of any of the Companys securities or that would
reasonably be expected to have a significant influence on an informed
investors investment decisions.
 TIMING OF PUBLIC ANNOUNCEMENTPursuant to Timely Disclosure Policies and Legislation, CGI is required to
disclose material information concerning its business and affairs immediately
upon the information becoming known to management or a development being
approved by the Board of Directors, or in the case of information previously
known, immediately upon it becoming apparent that the information is
material6. Immediate release of material information is necessary to
ensure that it is promptly available to all investors and to reduce the risk
that persons with access to that information will act upon undisclosed
information. The disclosure of material change must be made by way of a broadly
disseminated news release that is followed by a material change report filed
with the appropriate CSA members.The announcement of an intention to proceed with a transaction or activity
should be made when a decision has been taken to proceed with it by CGIs board
of directors or by senior management with the expectation in that case of such
decision being further agreed to by CGIs board of directors. However, as
discussed below, a corporate development in CGIs affairs in respect of which
no firm decision has yet been made, may require immediate disclosure if leaks
or rumours of such corporate development are reflected in the market place.Disclosure of corporate developments must be managed with care and judgment by
company officials as to the timing of an announcement of material information
whether late or premature may affect the credibility and reputation of the
company and of the securities market.In limited circumstances, disclosure of material information may be delayed for
reasons of corporate confidentiality.
 
 6
    
    Where the material information constitutes a material change,
such disclosure must be followed by a material change report filed within ten
days of the date on which the change occurred with the relevant securities
commissions. 72




---



##### 



DEALING WITH RUMOURSExcept in certain circumstances, CGI is not required to respond to market
rumours. It may choose a no comment response to market rumours. An effective
way of saying no comment is to say, We do not respond to market rumours. To
maintain a consistent no comment policy, a company should not selectively
comment, even if no significant corporate developments are taking place or the
company knows of no reason for unusual market activity. For example, it is an
inconsistent (and likely ineffective) use of a no comment policy if a company
were to say, There are no significant corporate developments at this time,
when such is the case, but respond, no comment when material developments or
transactions are under consideration. Using a no comment policy in this
fashion may act as a signal to the market and defeats the purpose of the
policy.If, however, the rumour is about a material change in the companys business,
operations or capital or other material information that the company has
withheld from general disclosure under its confidentiality privilege, the
companys obligation to make immediate disclosure of that change or information
will be triggered. In the face of a rumour regarding undisclosed material
information, it is impossible for a company to continue a request for
confidentiality. In addition, CSA members or stock exchanges may request that a
company respond to a rumour if it is the source of the rumour or if market
activity indicates that trading is being affected by the rumour.Upon such a request, prompt clarification or denial of the rumour through a
news release will be necessary and, if the rumour is correct in whole or in
part, immediate disclosure of the relevant material information should be made.
Pending dissemination of a response to such a request, the relevant stock
exchanges, or less frequently, the CSA member, may decide to halt trading in
securities of the company.Companies are often asked to respond to rumours or inquiries regarding possible
differences in earnings from current Street estimates. When a company has
provided no guidance on analysts earnings estimates, except in certain
circumstances, the company is under no obligation to respond to such rumours or
inquiries. If it is a companys policy not to comment on analysts earnings
estimates, the company should state this policy in response to any such
questions it receives.If earnings rumours are affecting the companys share price, the company may
wish to consider issuing a full news release if it believes earnings will be
significantly different than Street expectations, or if it believes the rumours
to be false and wants to counter them.MAINTAINING CONFIDENTIALITYPursuant to Timely Disclosure Policies, the withholding of material information
may only be justified where the potential harm to CGI or to its
 73




---



##### 



investors caused by immediate disclosure may reasonably be considered to exceed
the negative consequences of delaying disclosure. Pursuant to the Legislation,
CGI will not be required to prepare a press release if senior management has
reasonable ground to believe that disclosure would be seriously prejudicial to
the interests of CGI and that no transaction in CGI Securities has been or will
be carried out on the basis of the information not generally known7.
In any case, confidentiality may not be maintained beyond the short term.
Furthermore, in any situation where material information is being kept
confidential because disclosure would be unduly detrimental to CGIs best
interests, CGIs management is responsible for taking every possible precaution
to ensure that no trading whatsoever takes place by any insider or any employee
of CGI in possession of such information before it is generally disclosed to
the public.If the information that CGI wants to keep confidential is a material change
in its business, operations or capital, CGI must file a report of that change
with the appropriate CSA members on a confidential basis, together with an
explanation of the reasons for the non-disclosure. To maintain the
confidentiality of the filing, CGI must renew its confidential filing every 10
days in certain jurisdictions.The Timely Disclosure Policy of the TSX enumerates as follows situations where
prompt disclosure might be unduly detrimental to CGIs interests:
 
    
    release of the information would prejudice CGIs ability to
pursue specific and limited objectives or complete a transaction or series
of transactions that are underway. For instance, premature disclosure of
the fact that CGI intends to purchase a significant asset may increase the
cost of the acquisition;
    
    disclosure of the information would provide competitors with
confidential corporate information that would significantly benefit them.
Such information may be kept confidential if CGI is of the opinion that
the detriment to it resulting from disclosure would exceed the detriment
to the market in not having access to the information. A decision to
release a new product, or details on the features of a new product, may be
withheld for competitive reasons, but such information should not be
withheld if it is available to competitors from other sources;
 
 7
    
    However, in such circumstances CGI is nonetheless required to file
a confidential material change report indicating the reasons why disclosure
is being delayed must be provided in writing. If CGI wishes to keep the
material information confidential, it must renew the confidential filing every
10 days following such filing. 74




---



##### 




    
    disclosure of information concerning the status of ongoing
negotiations would prejudice the successful completion of these
negotiations. It is unnecessary to make a series of announcements
concerning the status of negotiations with another party concerning a
particular transaction. If it seems that the situation is going to
stabilize within a short period, public disclosure may be delayed until a
definitive announcement can be made. Disclosure should be made once
concrete information is available, such as a final decision to proceed
with the transaction or, at a later point in time, finalization of the
terms of the transaction.
 Again, when the disclosure of material information is to be delayed, complete
confidentiality must be maintained. In the event that such information has
leaked or appears to be impacting the market, CGI must then take immediate
steps to ensure that full disclosure to the public is made and contact the
Exchanges immediately and ask that trading be halted pending the issuance of a
news release.PROHIBITIONS AGAINST SELECTIVE DISCLOSUREThe Legislation prohibits CGI or any person or company in a special
relationship8 with CGI from informing anyone, other than in the
necessary course of business, of a material information before it has been
generally disclosed. This prohibition is commonly known as tipping. Tipping
is prohibited in order to ensure equal access to, and opportunity to act upon,
material information.The tipping prohibition is very broad. It covers disclosure made by any person
in a special relationship with CGI to anyone (other than in the necessary
course of business as discussed below) and is not limited to communications
made to securities market professionals, analysts and institutional
investors9.The tipping provisions however permit an issuer to make a selective disclosure
in the necessary course of business. This exception exists so as not to
interfere with a companys everyday business. However, whether a particular
disclosure has been made in the necessary course of business is dependent on
the facts of each case. The CSA set out a list of parties that the necessary
course of business exception would generally permit communication to,
including:
 
    
    vendors, suppliers, or strategic partners on issues such as
research and development, sales and marketing and supply contracts;
    
    employees, officers and board members;
    
    lenders, legal counsel, auditors, financial advisors and underwriters;
 
 8
    
    Persons in a special relationship with CGI, include, but are not
limited to: (a) insiders of CGI; (b) directors, officers and employees of CGI;
(c) persons engaging in professional or business activities for or on behalf
of CGI; and (d) anyone who learns of material information from someone that is
known or should be known to be in a special relationship with CGI.9
    
    The CSA point out that although selective disclosure most often occurs
in one-on-one discussions and private meetings, it can occur in a variety of
situations including annual meetings. 75




---



##### 




    
    parties to negotiations;
    
    labour unions and industry associations; and
    
    government agencies and non-governmental regulators; and
    
    credit rating agencies (provided that the information is
disclosed for the purpose of assisting the agency to formulate a credit
rating and the ratings are or will be publicly available).
 The CSA advise however that the necessary course of business exception would
not generally allow selective disclosure to analysts, the media or
institutional investors.In relying on the necessary course of business exception when disclosing
material information, CGI must ensure that those receiving the information are
aware that they cannot disclose the information to any other party, other than
in the necessary course of business, or trade on the information, until it has
been generally disclosed.The selective disclosure prohibition continues until material information has
been generally disclosed10.The CSA encourage issuers to satisfy the general disclosure requirement under
the tipping provisions by using one or a combination of news releases through a
widely circulated service, press conferences and conference calls where the
public is given appropriate notice by news release and may attend or listen.
Although issuers are encouraged to file news releases on SEDAR and post
information on their website, the CSA point out that currently neither of these
methods alone will constitute general disclosure.If CGI makes an unintentional selective disclosure, it must take immediate
steps to ensure that a full public announcement is made. The CSA suggest that,
pending issuance of a news release, a company which has made an unintentional
selective disclosure shall request a halt trading of its securities and advise
anyone with knowledge of the information that it is material and has not been
generally disclosed.Although the Legislation does not provide for a safe harbour for unintentional
selective disclosure11, the CSA will look at all of the surrounding
circumstances in a selective disclosure enforcement proceeding. Factors that
will be considered include:
 
    
    whether and to what extent an issuer has implemented,
maintained and followed reasonable selective disclosure policies and
procedures;
 
 10
    
    The Legislation does not define the term generally disclosed.
Insider trading jurisprudence however states that information has been
generally disclosed when it has been disseminated in a manner calculated to
effectively reach the market place and public investors have been given a
reasonable amount of time to analyze the information. What constitutes a
reasonable amount of time will depend on a number of factors including the
circumstances in which the event arises, the particulars of the information,
the nature of the market for the issuers securities and the disclosure method
used.11
    
    Unlike Regulation FD which will be discussed below. 76




---



##### 




    
    whether any selective disclosure was intentional; and
    
    what steps were taken to disseminate information that had
been unintentionally disclosed, including how quickly the information was
disclosed.
 ANNOUNCEMENT AND ISSUANCE OF A PRESS RELEASEAs discussed above, the Timely Disclosure Policies, as well as the Legislation,
require that when a material change in CGIs affairs occurs that is likely to
have a significant influence on the value or the market price of CGI
Securities, and is not generally known, CGI shall immediately prepare and
distribute a press release disclosing the substance of the change. The press
release should be factual and balanced and avoid unnecessary details,
exaggerated reports or promotional commentary. When a press release is to be
issued during the trading hours, it is essential that CGI officials notify the
Market Surveillance Division of the TSX (which will normally coordinate with
the NYSE) prior to the issuance of such press release, in order to permit the
Market Surveillance Staff to determine whether trading in any of CGI Securities
should be temporarily halted. Normally, a trading halt in a security will only
be justified if the announcement of the material information is imminent.The NYSE Company Manual requires that when an announcement of news of a
material event or a statement dealing with a rumour which calls for immediate
release is made shortly before the opening or during the market hours, the
companys NYSE representative be notified by telephone at least ten minutes
prior to the release of the announcement to the news media. To ensure adequate
coverage, the news release requiring immediate publicity should be given to Dow
Jones & Company, Inc., Reuters Economic Services and Bloomberg Business News.CGI is also required to release material information to the media by the
quickest possible method and by one which provides the widest possible
dissemination. Because dissemination of news is essential to ensure that all
investors trade on equal information, the responsibility of ensuring
appropriate dissemination of news releases belongs to CGI.DISSEMINATION OF MATERIAL INFORMATION THROUGH WEBSITESThe dissemination of information through a website12 is also subject
to the Legislation and Timely Disclosure Policies and the information to be
issued through electronic communications must be guided by the same rules as
the information disseminated by traditional forms, such as a press release.
Consequently, electronic information cannot be misleading to investors (by
being incomplete, out of date or by omitting facts) nor of a promotional nature
and cannot be used to disseminate material information not yet disclosed to the
general public. CGI must regularly review, update or correct, if need be, the
information posted on the website. CGI should date all material information
posted on its website and should disclaim any duty to update.
 
 12
    
    The dissemination of information through a website is governed by
the TSX Electronic Communications Disclosure Guidelines (which may be found on
the TSX website). 77




---



##### 



In addition, CGI should either delete outdated information or move it to
an archive. If CGI updates or corrects material information on its website, it
should take steps to ensure that it properly disseminates that information to
the public on a timely basis. No material information is to be disseminated
through electronic communications prior to being disseminated on a news wire
service.REGULATION FDThe Securities and Exchange Commissions Regulation FD (Fair
Disclosure)13 requires that reporting companies disclose material
information through broad public means and not selectively to securities
analysts and other market professionals. However, it is to be noted that
Regulation FD does not impose an obligation to disclose material non-public
information but rather mandates that if such information is disclosed
voluntarily, it must be done on a broad non-exclusive basis. Essentially, if an
issuer, or any person acting on its behalf discloses material non-public
information to specified persons, Regulation FD requires that the issuer must
simultaneously (for intentional disclosures) or promptly (for non-intentional
disclosures) make public disclosure of that information.Since CGI is considered under U.S. securities laws to be a foreign private
issuer, Regulation FD will not technically apply to it. It is however important
to note that Regulation FD is, to some extent, simply a codification of the
U.S. Securities and Exchange Commissions (the SEC) previous position and
that selective disclosure of material non-public information about CGI could,
in certain circumstances, even if not technically in violation of Regulation
FD, expose the person making the disclosure to liability under the SECs
anti-fraud rules under the Exchange Act14.II.
    
    CGI CORPORATE DISCLOSURE POLICYCGIs management believes that the implementation and maintenance of a written
corporate disclosure policy will promote consistent, appropriate, timely and
broadly disseminated disclosure of its material information and reinforce
compliance with the Legislation and the Timely Disclosure Policies.This disclosure policy confirms in writing our existing disclosure policies and
practices. Its goal is to raise awareness of the Companys approach to
disclosure among the board of directors, senior management and employees.
 
 13
    
    Which became effective on October 23, 2000.14
    
    The Securities Act of 1934, as amended. 78




---



##### 



This disclosure policy extends to all employees of the Company, its board
of directors, those authorized to speak on its behalf and all other insiders.
It covers disclosures in documents filed with the securities regulators,
financial disclosure, including managements discussion and analysis (MD&A) and
written statements made in the Companys annual and quarterly reports, news
releases, letters to shareholders, presentations by senior management and
information contained on the Companys Web site and other electronic
communications. It extends to oral statements made in meetings and telephone
conversations with analysts and investors, interviews with the media as well as
speeches, press conferences and conference calls.DISCLOSURE POLICY COMMITTEEThe board of directors has established a disclosure policy committee (the
Committee) responsible for all regulatory disclosure requirements and
overseeing the Companys disclosure practices. The Committee consists of the
Executive Chairman of the Board, Chief Executive Officer, the Corporate
Secretary, the Chief Financial Officer and the Executive Vice-President and
Chief Legal Officer.It is essential that the Committee be kept fully apprised of all pending
material Company developments in order to evaluate and discuss those events and
to determine the appropriateness and timing for public release of information.
If it is deemed that material information should remain confidential, the
Committee will determine how that inside information will be controlled.The Committee will identify appropriate industry and Company benchmarks for a
preliminary assessment of materiality. Guided by these benchmarks the Committee
will use experience and judgement to determine the appropriateness and timing
for public release of material information. The Committee will review all core
disclosure documents prior to their release or filing, including the Companys
MD&A. The Committee will meet quarterly or as conditions dictate and the
Vice-President, Corporate Communications & Investor Relations will keep records
of these meetings.The Committee will review and update, if necessary, this disclosure policy
annually or as needed to ensure compliance with changing regulatory
requirements. The Committee will report to the board of directors quarterly.
The Committee is also responsible for ensuring that Company spokespersons
receive adequate training.NEWS RELEASESOnce the Committee determines that a development is material, it will authorize
the issuance of a news release unless the Committee determines that such
developments must remain confidential for the time being. If developments are
to remain confidential, appropriate confidential filings must be made and
control of the inside information must be instituted. Should a material
statement inadvertently be made in a selective forum, the Company will
immediately issue a news release to
 79




---



##### 



fully disclose that information.
 If the stock exchanges upon which shares of the Company are listed are open for
trading at the time of a proposed announcement, prior notice of a news release
announcing material information must be provided to the exchanges market
surveillance departments to enable a trading halt, if deemed necessary by the
stock exchanges. If a news release announcing material information is issued
outside of trading hours, market surveillance must be notified before the
market opens.
 Annual and interim financial results will be publicly released immediately
following audit committee or board approval of the MD&A, financial statements
and notes.The Vice-President, Corporate Communications & Investor Relations must ensure
that the material information disclosed in the press release is factual,
balanced and complete and avoid including unnecessary details, exaggerated
reports or promotional commentaries. The disclosure must allow a reasonable and
objective valuation of the information (i.e. nature of the agreement, length,
costs and revenues involved, etc.) and comments on future events concerning the
affairs of CGI should be limited to the strict minimum.News releases will be disseminated through an approved news wire service that
provides simultaneous national and/or international distribution. News releases
will be transmitted to all stock exchange members, relevant regulatory bodies,
major business wires, national financial media, and the local media in areas
where the Company has its headquarters and operations. As a general rule,
procedure for dissemination of material information shall be applied
consistently.DISSEMINATION OF THE MATERIAL INFORMATIONOnce the information has been qualified as material, the responsibility of its
immediate disclosure by the issuance of a press release belongs to the
Vice-President, Corporate Communications & Investor Relations.A pre-notice of such press release must be sent to the TSX and NYSE before its
issuance in order to allow the Market Surveillance Staff to determine whether
it is necessary to temporarily halt trading in CGI Securities pending the
announcement.The press release shall be distributed through a widely circulated news or wire
service. Refer to heading below Investor Conference Calls, if an investor
conference call is scheduled in connection with the information announced in
the press release.News releases will be posted on the Companys Web site immediately after
release over the news wire. The news release page of the Web site will include
a notice that advises the reader that the information posted
 80




---



##### 



was accurate at the time of posting, but may be superseded by subsequent news
releases.PRINCIPLES OF DISCLOSURE OF MATERIAL INFORMATIONMaterial information is any information relating to the business and affairs of
the Company that results in, or would reasonably be expected to result in, a
significant change in the market price or value of the Companys securities or
that would reasonably be expected to have a significant influence on a
reasonable investors investment decisions. In complying with the requirement
to immediately disclose all material information under applicable laws and
stock exchange rules, the Company will adhere to the following basic disclosure
principles:
 
    
    Material information will be publicly disclosed immediately
via news release.
    
    In certain circumstances, the Committee may determine that
such disclosure would be unduly detrimental to the Company (for example if
release of the information would prejudice negotiations in a corporate
transaction), in which case the information will be kept confidential
until the Committee determines it is appropriate to publicly disclose. In
these circumstances, the Committee will cause a confidential material
change report to be filed with the applicable securities regulators, and
will periodically (at least every 10 days) review its decision to keep the
information confidential (also see Dealing with Rumours).
    
    Disclosure must include any information the omission of which
would make the rest of the disclosure misleading (half truths are
misleading).
    
    Unfavourable material information must be disclosed as
promptly and completely as favourable information.
    
    There must be no selective disclosure. Previously undisclosed
material information must not be disclosed to selected individuals (for
example, in an interview with an analyst or in a telephone conversation
with an investor). If previously undisclosed material information has been
inadvertently disclosed to an analyst or any other person not bound by an
express confidentiality obligation, this information must be broadly
disclosed immediately via news release.
    
    Disclosure on the Companys Web site alone does not
constitute adequate disclosure of material information.
    
    Disclosure must be corrected immediately if the Company
subsequently learns that earlier disclosure contained a material error at
the time it was given.
 81




---



##### 



DESIGNATED SPOKESPERSONSThe Company designates a limited number of spokespersons with authority for
communication with the investment community, regulators or the media. The Chief
Executive Officer, Chief Financial Officer and Vice-President, Corporate
Communications & Investor Relations shall be the official spokespersons for the
Company. Individuals holding these offices may, from time to time, designate
others within the Company with authority to speak on behalf of the Company as
back-ups or to respond to specific inquiries.Employees who are not authorized spokespersons must not respond under any
circumstances to inquiries from the investment community, the media or others,
unless specifically asked to do so by an authorized spokesperson. All such
inquiries are to be referred to the Vice-President, Corporate Communications &
Investor Relations.All external information requests from the investment community regarding CGI
will be initially directed to the Vice-President, Corporate Communications &
Investor Relations, who is responsible for communications with the investment
community and securities analysts. However, in certain circumstances such
requests shall be directed to the Executive Chairman of the Board, the
Corporate Secretary, the Chief Financial Officer or the Senior Vice-President,
Finance and Treasury (collectively, the Authorized Spokespersons).All employees who are not Authorized Spokespersons must refer calls to the
Authorized Spokespersons or to the Vice-President, Corporate Communications &
Investor Relations or to the media relations managers, depending on the
particular call.It is very important that any comment made by the Authorized Spokespersons
reflects only material information already generally disclosed. To that effect,
all relevant public information regarding CGI (news releases, financial analyst
reports, notes following communication with analysts, etc.) will be kept in a
specific file in order to ensure complete compilation of the public information
and to assist the Vice-President, Corporate Communications & Investor Relations
in his or her functions.Information relating to CGI in the market place and reactions by the market
place to such information shall be closely monitored by the Vice-President,
Corporate Communications & Investor Relations to ensure a prompt reaction to
non-intentional selective disclosures. All employees shall report any such
disclosure to the Vice-President, Corporate Communications & Investor
Relations.CONFIDENTIALITY OF THE INFORMATIONThe Disclosure Policies and the Legislation allow material information to be
kept confidential when immediate disclosure of such information would
 82




---



##### 



be unduly detrimental to CGI (to that effect, refer to heading Maintaining
Confidentiality of Section I above).In order to ensure the confidential nature of the information, CGI establishes
the following rules:
 a)
    
    the number of CGI employees with access to
confidential information must be limited, to the extent possible;b)
    
    appropriate measures are to be taken in order to
avoid unauthorized access to the confidential documents through technology
or otherwise;
 Moreover, any CGI employee in possession of material information will not
disclose the information to anyone (including financial analysts and
institutional investors) except in the necessary course of business (as
discussed above) and when disclosed in such manner, all parties involved will
be reminded that such information is to be kept confidential.During the period when the material information is being kept confidential, the
Vice-President, Corporate Communications & Investor Relations will carefully
monitor the market activity in CGI Securities. In some cases, he or she may
request the market surveillance department of one or both stock exchanges where
it is listed to place the companys securities on stock watch to monitor
trading activity.If the confidential material information, or rumours about it, has leaked or
appears to be impacting the market, the Vice-President, Corporate
Communications & Investor Relations, on the direction of the Disclosure Policy
Committee will have to take immediate steps to ensure that a full public
announcement is made. This includes contacting the Exchanges and asking that
trading be halted pending the issuance of a news release. Furthermore, pending
the public release of the material information, those who have knowledge of the
information shall be told that the information is material and that it has not
been generally disclosed.DEALING WITH RUMOURSThe Company does not comment, affirmatively or negatively, on rumours. This
also applies to rumours on the Internet. The Companys spokespersons will
respond consistently to any rumours, saying, It is our policy not to comment
on market rumours or speculation.Should the stock exchange request that the Company make a definitive statement
in response to a market rumour that is causing significant volatility in the
stock, the Committee will consider the matter and decide whether to make a
policy exception. If the rumour is true in whole or in part, this may be
evidence of a leak, and the Company then will immediately issue a news release
disclosing the relevant material information.
 83




---



##### 



TRADING RESTRICTIONS, BLACKOUT PERIODS AND PRE CLEARING OF TRADESIt is illegal for anyone with knowledge of material information affecting a
public company that has not been publicly disclosed to purchase or sell
securities of that company. It is also illegal for anyone to inform any other
person of material non-public information, except in the necessary course of
business. Therefore, insiders and employees with knowledge of confidential or
material information about the Company or information about counter-parties in
negotiations of transactions that are potentially material to the Company or to
such counterparty, are prohibited from trading securities of the Company or any
counter-party until the information has been fully disclosed and a reasonable
period has passed for the information to be widely disseminated.Insiders are personally responsible for filing accurate and timely insider
trading reports. Insiders are required to provide a copy of all insider reports
to the Corporate Secretary or other designated person concurrent with their
filing to regulatory authorities. For trading blackouts for designated
employees in possession of privileged information, please refer to Section III
below Restrictions Applicable to Transactions in Securities by Insiders.Quarterly trading periods, blackout periods and the requirement to pre clear
trades with the Corporate Secretary apply to certain insiders and to CGI
employees who normally have access to Privileged Information regarding CGI.
These restrictions are set out in the CGI Policy on Insider Trading
Restrictions and Blackout Periods.Blackout periods may also be prescribed from time to time by the Disclosure
Policy Committee as a result of special circumstances relating to the Company
when certain insiders and CGI employees who have access to Privileged
Information regarding CGI would be precluded from trading in its securities.
All parties with knowledge of such special circumstances should be covered by
the blackout. These parties may include external advisors such as legal
counsel, investment bankers, investor relations consultants and other
professional advisors, and counter-parties in negotiations of material
potential transactions.CONTACTS WITH ANALYSTS, INVESTORS AND THE MEDIADisclosure in individual or group meetings does not constitute adequate
disclosure of information that is considered material non-public information.
If the Company intends to announce material information at an analyst or
shareholder meeting or a press conference or conference call, the announcement
must be preceded by a news release.The Company recognizes that meetings with analysts and significant investors
are an important element of its investor relations program. The Company will
meet with analysts and investors individually or in small groups as needed and
will initiate contacts or respond to analyst and
 84




---



##### 



investor calls in a timely, consistent and accurate fashion in accordance with
this disclosure policy. All analysts will receive fair treatment regardless of
whether they are recommending buying or selling the Companys securities.
 The Company will provide only non-material information through individual and
group meetings, in addition to publicly disclosed information, recognizing that
an analyst or investor may construct this information into a mosaic that could
result in material information. The Company cannot alter the materiality of
information by breaking down the information into smaller, non-material
components.CGI representatives meeting privately with financial analysts and investors
will carry out research on the people they are meeting in order to prepare for
their expected line of questioning. Statements and responses to anticipated
questions will be discussed with the Vice-President, Corporate Communications &
Investor Relations prior to the meeting. The Vice-President, Corporate
Communications & Investor Relations will be present at each private meeting to
ensure consistency of corporate answers and to determine whether any
unintentional selective disclosure occurred during the meeting.The Company will provide the same sort of detailed, non-material information to
individual investors or reporters that it has provided to analysts and
institutional investors and may post this information on its Web site.Spokespersons will keep notes of telephone conversations with analysts and
investors and where practicable more than one Company representative will be
present at all individual and group meetings. A debriefing will be held after
these meetings and if it determines that selective disclosure of previously
undisclosed material information has occurred, the Company will immediately
disclose the information broadly via news release.INVESTOR CONFERENCE CALLSThe following steps shall be followed when holding investor conference calls to
disclose material information:
 i)
    
    a press release containing the material information
shall have been previously released through a widely circulated news or
wire service. Such press release shall contain the date and time of the
call, the subject matter and the means for accessing it;ii)
    
    CGI representatives participating in the analyst
conference call will meet before the call to prepare for anticipated
questions. Statements and responses to anticipated questions will be
discussed and scripted in advance and reviewed by the Companys executive
management.
 85




---



##### 



iii)
    
    the conference call shall be held in an open manner,
permitting investors to listen either by telephone or through Internet
Webcasting;iv)
    
    a dial-in replay will be provided for a period of at
least one week after the investor conference call and a web replay will be
provided for a period of at least 90 days after the call.v)
    
    a detailed transcript of the conference call will be
kept and reviewed to determine whether any unintentional selective
disclosure occurred during the conference call. If so, immediate steps to
ensure full public announcement shall be made including contacting the
Exchanges and asking that trading be halted pending the issuance of a news
release.
 REVIEWING ANALYST REPORTS AND FINANCIAL MODELSUpon request, the Company may review analysts draft research reports or
financial models for factual accuracy based on publicly disclosed information.
The Company will not confirm, or attempt to influence, an analysts opinions or
conclusions and will not express comfort with the analysts financial model and
earnings estimates.To avoid appearing to endorse an analysts report or model, the Company will
provide its comments orally or will attach a disclaimer to written comments to
indicate the report was reviewed only for factual accuracy.QUIET PERIODSTo avoid the potential for selective disclosure or even the perception or
appearance of selective disclosure, the Company will observe quiet periods
prior to quarterly earnings announcements or when material changes are pending.
Regular quiet periods will commence two days before the end of a quarter and
end on the date of a news release disclosing results for the quarter just
ended.During a quiet period, the Company will not initiate any meetings or telephone
contacts with analysts and investors, but will respond to unsolicited inquiries
concerning factual matters. However, the Company may accept invitations to
participate in investment meetings and conferences organized by others, as long
as material, non-public information is not selectively disclosed.FORWARD-LOOKING INFORMATIONWhen CGI elects to disclose forward-looking information in continuous
disclosure documents, speeches, conference calls, etc., the following
guidelines will be observed.
 
    
    All material forward-looking information will be broadly
disseminated via news release and included in the Companys annual and
quarterly
 86




---



##### 



MD&A. The Committee will assess whether an update is required on a quarterly
basis or as circumstances warrant.
 
    
    The information will be clearly identified as forward
looking.
    
    The Company will identify all material assumptions used in
the preparation of the forward-looking information.
    
    The information will be accompanied by a statement that
identifies, in specific terms, the risks and uncertainties that may cause
the actual results to differ materially from those projected in the
statement.
    
    The information may be accompanied by supplementary
information such as a range of reasonably possible outcomes or a
sensitivity analysis to indicate the extent to which different business
conditions may affect the actual outcome.
    
    The information will be accompanied by a statement that the
information is as of the current date and subject to change after that
date and the Company disclaims any intention to update or revise the
forward-looking information, whether as a result of new information,
future events or otherwise.
    
    Once forward looking information has been disclosed, CGI will
regularly assess whether an update is required and ensure that past
disclosure of forward-looking information is accurately reflected in
current MD&A.
    
    Forward-looking statements shall be updated, if necessary, by
issuing a press release and filing a material change report.
 DISCLOSURE RECORDThe Vice-President, Corporate Communications & Investor Relations will
maintain a five-year record of all public information about the Company,
including continuous disclosure documents, news releases, analysts reports,
transcripts or tape recordings of conference calls, debriefing notes, notes
from meetings and telephone conversations with analysts and investors, and
newspaper articles.ELECTRONIC COMMUNICATIONSEmployees must not use electronic communications to leak or discuss in any way
undisclosed material information regarding CGIs affairs and
business.
 a)
    
    Officers responsible for monitoring CGIs electronic
communications:
 i)
    
    The Vice-President, Corporate Communications
& Investor Relations, under the authority of the Disclosure Policy
Committee, and
 87




---



##### 



ii)
    
    Such officers will be responsible for
monitoring CGIs electronic communications and enforcing compliance
with CGIs guidelines. Moreover, in order to ensure the integrity and
security of CGIs electronic communications, regular review and update
of its security systems will be executed. The Vice-President,
Corporate Communications & Investor Relations will maintain a log
indicating the date that material information is posted and/or removed
from the IR section of the Web site. Documents filed with securities
regulators will be maintained on the web site for a minimum of two
years.
 b)
    
    CGIs website:
 i)
    
    The Vice-President, Corporate Communications
& Investor Relations, under the authority of the Disclosure Policy
Committee shall be responsible for maintaining CGIs website
up-to-date and accurate. All material information shall be dated when
posted or modified and outdated information shall be archived, andii)
    
    All CGI corporate timely disclosure
documents as well as any other public documents filed with the
Exchanges and the Canadian securities commissions or required to be
posted on the website shall be posted in their entirety on CGIs
website. Such documents include:
 
    
    the annual and interim financial statements and
related auditors report and MD&A;
    
    the annual report;
    
    interim shareholder reports;
    
    the annual information form;
    
    press releases (whether or not favourable);
    
    management proxy circulars;
    
    CEO and CFO financial statements certifications;
    
    Corporate governance Guidelines;
    
    Board and Board Committee Charters;
    
    Code of Business Conduct and Ethics;
    
    Insider trading reports; and
    
    any other communications transmitted to shareholders.
 No material information shall be posted on CGIs website before it has been
widely disseminated.The Vice-President, Corporate Communications & Investor Relations must
approve all links from the Company Web site to a third party web site. The
Web site will include a notice that advises readers they are leaving the
Companys Web site and that the Company is not responsible for the contents
of the other site.
 88




---



##### 



The Vice-President, Corporate Communications & Investor Relations will be
responsible for the responses to electronic inquiries. Only public
information or information that could otherwise be disclosed in accordance
with this disclosure policy shall be used to respond to electronic
inquiries.c)
    
    Rumours on the Internet:Rumours about CGI on the Internet through chat-rooms, web logs, news groups
or otherwise shall be handled similarly to rumours spread in a traditional
way (refer to heading Dealing with Rumours of Section I).d)
    
    Supplemental information:It is understood that any non material information disseminated to third
parties (including private investors, financial analysts, institutional
investors) should also be available to all investors. Consequently, such
information will be posted on CGIs website unless the volume or format
makes it unduly complicated. In such case, CGI will provide a contact name
on its website so that investors may have access to such information, if
requested. The supplemental information includes data books, fact sheets,
slides of investor presentations and other materials distributed at analyst
or industry presentations.e)
    
    Investor Relations contact information:CGI will maintain an e-mail link on its website allowing investors to
communicate directly with CGIs Investor Relations representatives. Such
representatives shall ensure that any risk of selective disclosure is
avoided when responding to investor e-mails. When possible, they will
respond to investor enquiries by telephone.CGI will maintain a phone number for the media, to assist them in receiving
responses to questions in a timely manner in order to meet their print
deadlines.f)
    
    Utilization and exclusion of certain information:
 i)
    
    Employee use of electronic information:
 
    
    CGI employees are hereby reminded that all
correspondence received and sent via e-mail is to be considered
corporate correspondence and therefore must not transmit
confidential information externally unless protected by
appropriate encryption technology;
    
    CGI employees are prohibited from participating in,
hosting or linking to any Internet chat-rooms, bulletin boards,
web logs or news groups in communications involving CGI or its
securities
 89




---



##### 



(even if the intention of CGI employees is to correct rumours or
defend CGI);
    
    CGI employees are encouraged to report to the
Vice-President, Corporate Communications & Investor Relations any
discussion pertaining to CGI which they find on the Internet.
 ii)
    
    Analyst reports and third party information:Analyst reports are proprietary products of the analysts firm.
Distributing analyst reports or providing links to them may be viewed
as an endorsement by the Company of the reports. For these reasons, the
Company will not provide analyst reports through any means to persons
outside of the Company or generally to employees of the Company,
including posting such information on its Web site. The Company will
post on its Web site a complete list, regardless of the recommendation,
of all the investment firms and analysts who provide research coverage
on the Company. This list will not include links to the analysts or
any other third party Web sites or publications.Notwithstanding the foregoing, the Company will distribute analyst
reports to its directors and senior officers to assist them in
understanding how the marketplace values the company and what corporate
developments analysts typically consider important. This information is
useful in monitoring the communications of the company, and in
developing messages to better guide investor expectations.
 g)
    
    Legal disclaimer:A legal disclaimer regarding the accuracy, timeliness and completeness of
the information posted on the website must be included on CGIs website at
all times.
 COMMUNICATION, EDUCATION AND ENFORCEMENTThis disclosure policy extends to all employees of the Company, its board
of directors and authorized spokespersons. New directors, officers and
employees will be provided with a copy of this disclosure policy and
educated about its importance. This disclosure policy will be posted on the
Companys internal Web site and changes will be communicated to all
employees.Any employee who violates this disclosure policy may face disciplinary
action up to and including termination of employment with the Company
without notice. The violation of this disclosure policy may also violate
certain securities laws, which could expose directors, officers or employees to
personal liability. If it appears that an employee may have violated such
securities laws, the Company may refer the matter to the
 90




---



##### 



appropriate regulatory authorities, which could lead to fines or other
penalties.
 III.
    
    RESTRICTIONS APPLICABLE TO TRANSACTIONS IN SECURITIES
BY INSIDERSThe acquisition or the sale of CGI securities (the CGI Securities) by its
senior executives (which means under Canadian securities legislation (the
Legislation)), a person exercising the functions of a director or of a
president, vice-president, secretary, treasurer, controller or similar
functions) entails under the terms of the Legislation, civil, penal and
criminal liability if they carry out these operations while they have at their
disposal information which has not been disclosed to the public and which
information may be susceptible of affecting the decision of a reasonable
investor, as well as any information that may affect the value or market price
of CGI Securities. All insiders of CGI are subject to the Legislation. These
insiders include CGI, its senior executives and the senior executives of its
subsidiaries as well as any person or company who exercises control over 10% or
more of outstanding CGI Securities.The Legislation also provides for civil, penal and criminal liability for any
person who trades in the securities of any public company if they carry out
these operations while they have at their disposal information which they have
reason to believe has not been disclosed to the public and that may be
susceptible of affecting the decision of a reasonable investor, as well as any
information that may affect the value or market price of such securities.Any such information, whether it relates to CGI or to any other public company,
is hereafter referred to as Privileged Information.The underlying principle of the Legislation in respect to insider restrictions
is that all persons investing in securities should have access to information
that may affect their investment decisions. Consequently, no insider having
Privileged Information relating to CGI Securities may trade in such securities,
except if such insider is justified in believing that the information is
generally known or known to the other party or, as the case may be, he avails
himself of an automatic subscription plan or any other automatic plan
established by CGI, according to conditions set down in writing, before he
learned of the information. Furthermore, no insider may disclose such
Privileged Information unless he is justified in believing that the information
is generally known or known to the other party or such insider must disclose
the information in the necessary course of business, having no ground to
believe it will be used or disclosed contrary to the guidelines set out herein.The Legislation extends the prohibition in engaging in transactions with CGI
Securities at the time when a person possesses Privileged Information to:
 91




---



##### 



(i)
    
    any person who possesses Privileged Information as a
result of any relationship he may have with CGI in the performance of his
duties, or within the scope of commercial or professional activities(ii)
    
    any person who possesses Privileged Information
coming from, to his knowledge, an insider or another person targeted by
this prohibition and(iii)
    
    any person who possesses Privileged Information
which he knows to be such, with respect to CGI.
 TRANSACTIONS BY SENIOR EXECUTIVES OF CGICGI believes that it is important to establish rules of conduct in order to
ensure the respect of all Legislation pertaining to senior executives
transactions in CGI Securities as well as in the securities of other public
companies. These rules of conduct are the following, their application being
cumulative and not exclusive:
 a)
    
    Directors, senior executives, insiders and CGI
employees who have access to Privileged Information regarding CGI or any
other public Company may not carry out any transaction with CGI Securities
when in possession of Privileged Information.b)
    
    Subject to the restrictions provided for in the
Legislation, these persons must pre clear their trades with the Corporate
Secretary and may only trade in CGI Securities within the periods
permitted under the CGI Policy on Insider Trading and Blackout Periods.c)
    
    The directors may not carry out any transaction with
CGI Securities from the date of receipt of any notice concerning a meeting
of the Board of Directors, or of any other notice, whether or not this
notice discloses any Privileged Information.d)
    
    Directors and senior executives shall avoid frequent
transactions in the market in order to avoid the appearance of
speculation.e)
    
    Directors and senior executives shall not engage in
short selling in respect of CGI Securities and shall not sell a call or
buy a put in respect of CGI Securities.
 The foregoing rules exist in order to help the directors and senior executives
of CGI satisfy themselves and all third parties, that they only carry out
transactions in CGI Securities at times when it is reasonable for them to
believe that all Privileged Information regarding CGI has been publicly
disclosed.DISCLOSURE OF PRIVILEGED INFORMATIONAs mentioned above, the Legislation prohibits the disclosure of Privileged
Information. This prohibition extends to the same persons who are not
 92




---



##### 



permitted to carry out transactions when in possession of Privileged
Information.
 CGI believes it is important to establish the following additional rules of
conduct concerning the disclosure of Privileged Information:
 g)
    
    Material information regarding the activities and affairs of CGI will be
disclosed in a timely manner, in accordance with the requirements of
the timely disclosure policies of the TSX and the NYSE and applicable
securities legislation (as discussed in Section I).h)
    
    It is forbidden for management, insiders and employees of CGI to convey to
any person whatsoever, any and all material information related to the
activities and affairs of CGI before CGIs shareholders and the general public
have been notified (by way of media or other means), except in the necessary
course of business and subject to an obligation of confidentiality.
 INSIDER REPORTSAny person who becomes an insider of CGI shall file an electronic profile in
the System for Electronic Disclosure by Insiders (SEDI) (www.sedi.ca).In addition, CGI insiders are required to declare any modifications or
changes (whatever the percentage) to their holdings in CGI Securities within 10
days of such a change, except in certain limited exceptions. In this regard, an
insider report must be completed and filed in SEDI. The insider of CGI who
registers or causes to be registered any CGI Securities in the name of a third
person shall file an insider report, except in the case of a bona fide transfer
in guarantee. In such case and where the insider fails to file the report
provided for by the Legislation, the third person shall file the report himself
on becoming aware of the failure.The obligation to complete insider reports shall continue for as long as the
person qualifies as an insider.An insider is required to file an amended insider profile within ten days of
a change in the insiders name or relationship to CGI. If there is a change in
any other information in the insider profile, an amended insider profile is
only required at the time of the insiders next SEDI filing.As a matter of law, the responsibility for filing and updating an electronic
profile and for filing insider reports in SEDI lies solely with the insider.
However, CGIs secretariat staff will send three days prior to the end of each
month to each insider of the Company a reminder to complete an insider report,
if necessary. It is recommended that each insider inform the Companys
Corporate Secretary prior to completion of any transaction on CGI Securities.
 93




---



##### 



Appendix




---



##### 



APPENDIX A
 Definition of Independence in effect as of June 30, 2005 under CSA
Multilateral Instrument 52-110
 1.4
    
    Meaning of independence
 (1)
    
    An audit committee member is independent
if he or she has no direct or indirect material relationship with
the issuer.(2)
    
    For the purposes of subsection (1), a
material relationship is a relationship which could, in the view
of the issuers board of directors, be reasonably expected to
interfere with the exercise of a members independent judgement.(3)
    
    Despite subsection (2), the following
individuals are considered to have a material relationship with an
issuer:
 (a)
    
    an individual who is, or has
been within the last three years, an employee or executive
officer of the issuer;(b)
    
    an individual whose immediate
family member is, or has been within the last three years, an
executive officer of the issuer;(c)
    
    an individual who:
 (i)
    
    is a partner of a
firm that is the issuers internal or external auditor,(ii)
    
    is an employee of
that firm, or(iii)
    
    was within the
last three years a partner or employee of that firm and
personally worked on the issuers audit within that
time;
 (d)
    
    an individual whose spouse,
minor child or stepchild, or child or stepchild who shares a
home with the individual:
 (i)
    
    is a partner of a
firm that is the issuers internal or external auditor,(ii)
    
    is an employee of
that firm and participates in its audit, assurance or
tax compliance (but not tax planning) practice, or(iii)
    
    was within the
last three years a partner or employee of that firm and
personally worked on the issuers audit within that
time;
 95




---



##### 



(e)
    
    an individual who, or whose
immediate family member, is or has been within the last three
years, an executive officer of an entity if any of the
issuers current executive officers serves or served at that
same time on the entitys compensation committee; and(f)
    
    an individual who received,
or whose immediate family member who is employed as an
executive officer of the issuer received, more than $75,000 in
direct compensation from the issuer during any 12 month period
within the last three years.
 (4)
    
    Despite subsection (3), an individual
will not be considered to have a material relationship with the
issuer solely because
 (a)
    
    he or she had a relationship
identified in subsection (3) if that relationship ended before
March 30, 2004; or(b)
    
    he or she had a relationship
identified in subsection (3) by virtue of subsection (8) if
that relationship ended before June 30, 2005.
 (5)
    
    For the purposes of clauses (3)(c) and
(3)(d), a partner does not include a fixed income partner whose
interest in the firm that is the internal or external auditor is
limited to the receipt of fixed amounts of compensation (including
deferred compensation) for prior service with that firm if the
compensation is not contingent in any way on continued service.(6)
    
    For the purposes of clause (3)(f), direct
compensation does not include:
 (a)
    
    remuneration for acting as a
member of the board of directors or of any board committee of
the issuer, and(b)
    
    the receipt of fixed amounts
of compensation under a retirement plan (including deferred
compensation) for prior service with the issuer if the
compensation is not contingent in any way on continued
service.
 (7)
    
    Despite subsection (3), an individual
will not be considered to have a material relationship with the
issuer solely because the individual or his or her immediate family
member
 (a)
    
    has previously acted as an
interim chief executive officer of the issuer, or(b)
    
    acts, or has previously
acted, as a chair or vice-chair of the board of directors or
of any board committee of the issuer on a part-time basis.
 96




---



##### 



(8)
    
    For the purpose of section 1.4, an issuer
includes a subsidiary entity of the issuer and a parent of the
issuer.
 1.5
    
    additional independence requirements
 (1)
    
    Despite any determination made under
section 1.4, an individual who
 (a)
    
    accepts, directly or
indirectly, any consulting, advisory or other compensatory fee
from the issuer or any subsidiary entity of the issuer, other
than as remuneration for acting in his or her capacity as a
member of the board of directors or any board committee, or as
a part time chair or vice-chair of the board or any board
committee; or(b)
    
    is an affiliated entity of
the issuer or any of its subsidiary entities, is considered to
have a material relationship with the issuer.
 (2)
    
    For the purposes of subsection (1), the
indirect acceptance by an individual of any consulting, advisory or
other compensatory fee includes acceptance of a fee by
 (a)
    
    an individuals spouse, minor
child or stepchild, or a child or stepchild who shares the
individuals home; or(b)
    
    an entity in which such
individual is a partner, member, an officer such as a managing
director occupying a comparable position or executive officer,
or occupies a similar position (except limited partners,
non-managing members and those occupying similar positions
who, in each case, have no active role in providing services
to the entity) and which provides accounting, consulting,
legal, investment banking or financial advisory services to
the issuer or any subsidiary entity of the issuer.
 (3)
    
    For the purposes of subsection (1),
compensatory fees do not include the receipt of fixed amounts of
compensation under a retirement plan (including deferred
compensation) for prior service with the issuer if the compensation
is not contingent in any way on continued service.
 97




---



##### 



MANAGEMENTS STATEMENT OF RESPONSIBILITY FOR FINANCIAL REPORTING
    (signed)
    
    (signed)Michael E. Roach
    
    R. David AndersonPresident and Chief Executive Officer
    
    Executive Vice-President and Chief Financial OfficerNovember 8, 2010
 CGI group Inc.      2010 Annual report
    
    40




---



##### 



MANAGEMENT REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
   
    
    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
accounting principles generally accepted in Canada, 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.
   Internal Control  Integrated Framework
  (signed)
    
    (signed)Michael E. Roach
    
    R. David AndersonPresident and Chief Executive Officer
    
    Executive Vice-President and Chief Financial OfficerNovember 8, 2010
 CGI group Inc.      2010 Annual report
    
    41




---



##### 



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON INTERNAL CONTROL OVER FINANCIAL
REPORTING
  Internal Control  Integrated Framework
       1  Ernst & Young LLP
 
 1
    
    Chartered accountant auditor permit No. 15859 CGI group Inc.      2010 Annual report
    
    42




---



##### 



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON FINANCIAL STATEMENTS
       1  Ernst & Young LLP
 
 1
    
    Chartered accountant auditor permit No. 158599 CGI group Inc.      2010 Annual report
    
    43




---



##### 



2009
    
    
    2008(Restated
    
    
    (RestatedYears ended September 30 (in thousands of Canadian dollars, except share data)
    
    2010
    
    
    Note 2a)
    
    
    Note 2a)$
    
    
    $
    
    
    $Revenues
    
    
    3,732,117
    
    
    
    3,825,161
    
    
    
    3,705,863Operating expensesCosts of services, selling and administrative (Note 17)
    
    
    3,025,823
    
    
    
    3,170,406
    
    
    
    3,110,760Amortization (Note 14)
    
    
    195,308
    
    
    
    195,761
    
    
    
    163,172Acquisition-related and integration costs (Note 18a)
    
    
    20,883
    
    
    
    
    
    
    
    Interest on long-term debt
    
    
    17,123
    
    
    
    18,960
    
    
    
    27,284Interest income
    
    
    (2,419
    )
    
    
    (2,908
    )
    
    
    (5,570
    )Other (income) expenses
    
    
    (952
    )
    
    
    3,569
    
    
    
    3,341Foreign exchange (gain) loss
    
    
    (916
    )
    
    
    (1,747
    )
    
    
    1,445Gain on sale of capital assets
    
    
    (469
    )
    
    
    
    
    
    
    3,254,381
    
    
    
    3,384,041
    
    
    
    3,300,432Earnings from continuing operations before income taxes
    
    
    477,736
    
    
    
    441,120
    
    
    
    405,431Income tax expense (Note 16)
    
    
    114,970
    
    
    
    125,223
    
    
    
    106,297Earnings from continuing operations
    
    
    362,766
    
    
    
    315,897
    
    
    
    299,134Earnings (loss) from discontinued operations, net of income taxes (Note 19)
    
    
    
    
    
    
    1,308
    
    
    
    (5,134
    )Net earnings
    
    
    362,766
    
    
    
    317,205
    
    
    
    294,000Attributable to:Shareholders of CGI Group Inc.Earnings from continuing operations
    
    
    362,386
    
    
    
    315,158
    
    
    
    298,266Earnings (loss) from discontinued operations
    
    
    
    
    
    
    1,308
    
    
    
    (5,134
    )Net earnings attributable to shareholders of CGI Group Inc.
    
    
    362,386
    
    
    
    316,466
    
    
    
    293,132Non-controlling interestNet earnings attributable to non-controlling interest
    
    
    380
    
    
    
    739
    
    
    
    868Net earnings
    
    
    362,766
    
    
    
    317,205
    
    
    
    294,000Basic earnings (loss) per share attributable to shareholders of CGI Group Inc.Continuing operations (Note 13)
    
    
    1.27
    
    
    
    1.03
    
    
    
    0.94Discontinued operations
    
    
    
    
    
    
    
    
    
    
    (0.02
    )1.27
    
    
    
    1.03
    
    
    
    0.92Diluted earnings (loss) per share attributable to shareholders of CGI Group Inc.Continuing operations (Note 13)
    
    
    1.24
    
    
    
    1.02
    
    
    
    0.92Discontinued operations
    
    
    
    
    
    
    
    
    
    
    (0.02
    )1.24
    
    
    
    1.02
    
    
    
    0.90
  CGI group Inc.      2010 Annual report
    
    44




---



##### 



2009
    
    
    2008(Restated
    
    
    (RestatedYears ended September 30 (in thousands of Canadian dollars)
    
    2010
    
    
    Note 2a)
    
    
    Note 2a)$
    
    
    $
    
    
    $Net earnings
    
    
    362,766
    
    
    
    317,205
    
    
    
    294,000Net unrealized (losses) gains on translating financial statements of
self-sustaining foreign operations (net of income taxes)
    
    
    (53,598
    )
    
    
    6,249
    
    
    
    66,200Net unrealized gains (losses) on translating long-term debt designated
as hedges of net investments in self-sustaining foreign operations (net of
income taxes)
    
    
    15,806
    
    
    
    15,739
    
    
    
    (538
    )Net unrealized gains (losses) on cash flow hedges (net of income taxes)
    
    
    2,036
    
    
    
    13,446
    
    
    
    (1,013
    )Other comprehensive (loss) income (Note 15)
    
    
    (35,756
    )
    
    
    35,434
    
    
    
    64,649Comprehensive income
    
    
    327,010
    
    
    
    352,639
    
    
    
    358,649Attributable to:Shareholders of CGI Group Inc.
    
    
    326,630
    
    
    
    351,900
    
    
    
    357,781Non-controlling interest
    
    
    380
    
    
    
    739
    
    
    
    868
   2009
    
    
    2008(Restated
    
    
    (RestatedYears ended September 30 (in thousands of Canadian dollars)
    
    2010
    
    
    Note 2a)
    
    
    Note 2a)$
    
    
    $
    
    
    $Retained earnings, beginning of year
    
    
    1,182,237
    
    
    
    921,380
    
    
    
    750,138Net earnings attributable to shareholders of CGI Group Inc.
    
    
    362,386
    
    
    
    316,466
    
    
    
    293,132Excess of purchase price over carrying value of Class Asubordinate shares acquired (Note 11)
    
    
    (347,940
    )
    
    
    (55,609
    )
    
    
    (121,890
    )Change in subsidiary investment
    
    
    (297
    )
    
    
    
    
    
    
    Retained earnings, end of year
    
    
    1,196,386
    
    
    
    1,182,237
    
    
    
    921,380
  CGI group Inc.      2010 Annual report
    
    45




---



##### 



2009(RestatedAs at September 30 (in thousands of Canadian dollars)
    
    2010
    
    
    Note 2a)$
    
    
    $AssetsCurrent assetsCash and cash equivalents (Note 3)
    
    
    127,824
    
    
    
    343,427Short-term investments
    
    
    13,196
    
    
    
    Accounts receivable (Note 4)
    
    
    423,926
    
    
    
    461,291Work in progress
    
    
    358,984
    
    
    
    249,022Prepaid expenses and other current assets
    
    
    76,844
    
    
    
    82,237Income taxes
    
    
    7,169
    
    
    
    2,759Future income taxes (Note 16)
    
    
    16,509
    
    
    
    15,110Total current assets before funds held for clients
    
    
    1,024,452
    
    
    
    1,153,846Funds held for clients
    
    
    248,695
    
    
    
    332,359Total current assets
    
    
    1,273,147
    
    
    
    1,486,205Capital assets (Note 5)
    
    
    238,024
    
    
    
    212,418Intangible assets (Note 6)
    
    
    516,754
    
    
    
    455,775Other long-term assets (Note 7)
    
    
    42,261
    
    
    
    60,558Future income taxes (Note 16)
    
    
    11,592
    
    
    
    10,173Goodwill (Note 8)
    
    
    2,525,413
    
    
    
    1,674,7814,607,191
    
    
    
    3,899,910LiabilitiesCurrent liabilitiesAccounts payable and accrued liabilities
    
    
    304,376
    
    
    
    306,826Accrued compensation
    
    
    191,486
    
    
    
    165,981Deferred revenue
    
    
    145,793
    
    
    
    136,135Income taxes
    
    
    86,877
    
    
    
    88,002Future income taxes (Note 16)
    
    
    26,423
    
    
    
    50,250Current portion of long-term debt (Note 10)
    
    
    114,577
    
    
    
    17,702Total current liabilities before clients funds obligations
    
    
    869,532
    
    
    
    764,896Clients funds obligations
    
    
    248,695
    
    
    
    332,359Total current liabilities
    
    
    1,118,227
    
    
    
    1,097,255Future income taxes (Note 16)
    
    
    170,683
    
    
    
    171,697Long-term debt (Note 10)
    
    
    1,039,299
    
    
    
    265,428Other long-term liabilities (Note 9)
    
    
    119,899
    
    
    
    83,9342,448,108
    
    
    
    1,618,314Commitments, contingencies and guarantees (Note 25)Shareholders equityRetained earnings
    
    
    1,196,386
    
    
    
    1,182,237Accumulated other comprehensive loss (Note 15)
    
    
    (321,746
    )
    
    
    (285,990
    )874,640
    
    
    
    896,247Capital stock (Note 11)
    
    
    1,195,069
    
    
    
    1,298,270Contributed surplus (Note 12c)
    
    
    82,922
    
    
    
    80,737Equity attributable to shareholders of CGI Group Inc.
    
    
    2,152,631
    
    
    
    2,275,254Equity attributable to non-controlling interest
    
    
    6,452
    
    
    
    6,3422,159,083
    
    
    
    2,281,5964,607,191
    
    
    
    3,899,910
  Approved by the Board
    
    (signed)
    
    (signed)Director
    
    DirectorMichael E. Roach
    
    Serge Godin
 CGI group Inc.      2010 Annual report
    
    46




---



##### 



2009
    
    
    2008(Restated
    
    
    (RestatedYears ended September 30 (in thousands of Canadian dollars)
    
    2010
    
    
    Note 2a)
    
    
    Note 2a)$
    
    
    $
    
    
    $Operating activitiesEarnings from continuing operations
    
    
    362,766
    
    
    
    315,897
    
    
    
    299,134Adjustments for:Amortization (Note 14)
    
    
    219,740
    
    
    
    218,087
    
    
    
    186,120Future income taxes (Note 16)
    
    
    (21,417
    )
    
    
    29,300
    
    
    
    (22,675
    )Foreign exchange (gain) loss
    
    
    (828
    )
    
    
    723
    
    
    
    1,846Stock-based compensation (Note 12a)
    
    
    15,517
    
    
    
    8,617
    
    
    
    5,131Gain on sale of capital assets
    
    
    (469
    )
    
    
    
    
    
    
    Net change in non-cash working capital items (Note 21a)
    
    
    (22,942
    )
    
    
    57,620
    
    
    
    (113,886
    )Cash provided by continuing operating activities
    
    
    552,367
    
    
    
    630,244
    
    
    
    355,670Investing activitiesPurchase of short-term investments
    
    
    (12,940
    )
    
    
    
    
    
    
    Business acquisitions (net of cash acquired) (Note 18)
    
    
    (899,564
    )
    
    
    (997
    )
    
    
    (3,911
    )Proceeds from sale of assets and businesses (net of cash disposed)
    
    
    4,100
    
    
    
    4,991
    
    
    
    29,238Purchase of capital assets
    
    
    (47,684
    )
    
    
    (69,212
    )
    
    
    (60,983
    )Proceeds from disposal of capital assets
    
    
    896
    
    
    
    
    
    
    
    Additions to intangible assets
    
    
    (69,722
    )
    
    
    (62,367
    )
    
    
    (60,942
    )Decrease in other long-term assets
    
    
    
    
    
    
    
    
    
    
    3,019Cash used in continuing investing activities
    
    
    (1,024,914
    )
    
    
    (127,585
    )
    
    
    (93,579
    )Financing activitiesUse of credit facilities
    
    
    939,394
    
    
    
    144,694
    
    
    
    90,305Repayment of credit facilities
    
    
    (82,684
    )
    
    
    (157,505
    )
    
    
    (196,533
    )Repayment of long-term debt
    
    
    (125,168
    )
    
    
    (117,752
    )
    
    
    (10,153
    )Proceeds on settlement of forward contracts (Note 10)
    
    
    
    
    
    
    18,318
    
    
    
    Repurchase of Class A subordinate shares (including share repurchase costs)
    
    
    (516,699
    )
    
    
    (101,698
    )
    
    
    (216,208
    )Issuance of shares
    
    
    53,039
    
    
    
    16,141
    
    
    
    32,423Change in subsidiary investment
    
    
    (571
    )
    
    
    (425
    )
    
    
    Cash provided by (used in) continuing financing activities
    
    
    267,311
    
    
    
    (198,227
    )
    
    
    (300,166
    )Effect of foreign exchange rate changes on cash and cash equivalents from continuing operations
    
    
    (10,367
    )
    
    
    (11,300
    )
    
    
    398Net (decrease) increase in cash and cash equivalents from continuing operations
    
    
    (215,603
    )
    
    
    293,132
    
    
    
    (37,677
    )Net cash and cash equivalents provided by (used in) discontinued operations (Note 19)
    
    
    
    
    
    
    161
    
    
    
    (1,068
    )Cash and cash equivalents, beginning of year
    
    
    343,427
    
    
    
    50,134
    
    
    
    88,879Cash and cash equivalents, end of year (Note 3)
    
    
    127,824
    
    
    
    343,427
    
    
    
    50,134
 
 CGI group Inc.      2010 Annual report
    
    47




---



##### 



Years ended September 30, 2010, 2009 and 2008
 
  
    a)
    
    Section 1582, Business Combinations, which replaces Section 1581, Business Combinations.
The Section establishes standards for the accounting for a business combination. It is similar
to the corresponding provisions of IFRS 3 (Revised), Business Combinations and of U.S. GAAP
standard, Accounting Standards Codification (ASC) Topic 805, Business Combinations. The
new Section requires the acquiring entity in a business combination to recognize most of the
assets acquired and liabilities assumed in the transaction at their acquisition-date fair
values including non-controlling interest and contingent consideration. Subsequent changes in
fair value of contingent consideration classified as a liability are recognized in earnings.
Acquisition-related and integration costs are also to be expensed as incurred rather than
considered as part of the purchase price allocation. In addition, changes in estimates
associated with future income tax assets after the measurement period are recognized as income
tax expense rather than as a reduction of goodwill, with prospective application to all
business combinations regardless of the date of acquisition.Section 1601, Consolidated Financial Statements and Section 1602, Non-Controlling Interests,
together replace Section 1600, Consolidated Financial Statements. Section 1601 establishes
standards for the preparation of consolidated financial statements. Section 1602 establishes
standards for accounting for a non-controlling interest in a subsidiary in consolidated financial
statements subsequent to a business combination. These sections are similar to the corresponding
provisions of IFRS standard, International Accounting Standards 27 (Revised), Consolidated and
Separate Financial Statements and of U.S. GAAP standard, ASC Topic 810, Consolidation. Section
1602 requires the Company to report non-controlling interests as a separate component of
shareholders equity rather than as a liability on the consolidated balance sheets. Transactions
between an entity and non-controlling interests are considered as equity transactions. In
addition, the attribution of net earnings and comprehensive income between the Companys
shareholders and non-controlling interests is presented separately in the consolidated statements
of earnings and comprehensive income rather than reflecting non-controlling interests as a
deduction of net earnings and total comprehensive income.In accordance with the transitional provisions, these sections have been applied prospectively,
with the exception of the presentation requirements for non-controlling interest, which must be
applied retrospectively. The adoption of these sections change the accounting of the business
combination realized in fiscal year 2010 for which acquisition-related and integration costs of
$20,883,000 with associated income tax expense of $3,688,000 were recorded directly in the
consolidated statement of earnings (refer to Note 18a). The previously unrecognized future tax
assets related to losses carried forward of past acquisitions of $7,378,000 were also recognized
as a reduction of income tax expense (refer to Note 18b). In addition, the above-mentioned
reclassifications of non-controlling interest have been reflected in the consolidated financial
statements and had no significant impact. The effects on future periods will depend on the nature
and significance of the business combinations subject to these standards.b)
    
    In June 2009, the CICA amended Section 3862 Financial Instruments  Disclosures to adopt
the amendments proposed by the International Accounting Standards Board (IASB) to IFRS 7
Financial Instruments: Disclosures. The amendments were made to enhance disclosure
requirements about the liquidity risk and fair value measurement of financial instruments. The
amendments are effective for annual financial statements relating to fiscal years ending after
September 30, 2009, and comparative information is not required in the first year of adoption.
The Company adopted these amendments in fiscal 2010. The adoption of these amendments had no
impact on the consolidated financial statements. The new disclosures are included in Note 26.
 CGI group Inc.     2010 Annual report
    
    48




---



##### 



USE OF ESTIMATES
  BASIS OF CONSOLIDATION
  REVENUE RECOGNITION, WORK IN PROGRESS AND DEFERRED REVENUE
         OUTSOURCING AND BPS ARRANGEMENTS
   Systems integration and consulting services
   CGI group Inc.     2010 Annual report
    
    49




---



##### 



Software license arrangements
  Work in progress and deferred revenue
  REIMBURSEMENTS
  CASH AND CASH EQUIVALENTS
  SHORT-TERM INVESTMENTS
  FUNDS HELD FOR CLIENTS AND CLIENTS FUNDS OBLIGATIONS
  CAPITAL ASSETS
  Buildings
    
    10 to 40 yearsLeasehold improvements
    
    Lesser of the useful life or lease termFurniture, fixtures and equipment
    
    3 to 20 yearsComputer equipment
    
    3 to 5 years
 INTANGIBLE ASSETS
 Contract costs
    CGI group Inc.     2010 Annual report
    
    50




---



##### 



Other intangible assets
    Internal-use software
    
    2 to 7 yearsBusiness solutions
    
    2 to 10 yearsSoftware licenses
    
    3 to 8 yearsClient relationships and other
    
    2 to 10 years
 IMPAIRMENT OF LONG-LIVED ASSETS
  OTHER LONG-TERM ASSETS
  BUSINESS COMBINATIONS AND GOODWILL
 accounting policies
    EARNINGS PER SHARE
  RESEARCH AND SOFTWARE DEVELOPMENT COSTS
  CGI group Inc.     2010 Annual report
    
    51




---



##### 



TAX CREDITS
  INCOME TAXES
  TRANSLATION OF FOREIGN CURRENCIES
    STOCK-BASED COMPENSATION
  HEDGING TRANSACTIONS
  Cash flow hedges on Senior U.S. unsecured notes
    Hedge on net investments in self-sustaining foreign subsidiaries
  CGI group Inc.     2010 Annual report
    
    52




---



##### 



Cash flow hedges on future revenue
    FUTURE ACCOUNTING CHANGES
  
 2010
    
    
    2009$
    
    
    $Cash
    
    
    27,162
    
    
    
    203,160Cash equivalents
    
    
    100,662
    
    
    
    140,267127,824
    
    
    
    343,427
 
 2010
    
    
    2009$
    
    
    $Trade
    
    
    349,349
    
    
    
    317,647Other1
    
    
    74,577
    
    
    
    143,644423,926
    
    
    
    461,291
 1
    
    Other accounts receivable include refundable tax credits on salaries related to the Québec
Development of E-Business program, Research and Development tax credits in North America and
Europe, and other Job and Economic Growth Creation programs available. The tax credits
represent approximately $55,758,000 and $124,803,000 of other accounts receivable in 2010 and
2009, respectively.Effective April 1, 2008, the Company became eligible for the new Development of E-Business
refundable tax credit, which replaces prior existing Québec tax credit programs. The fiscal
measure enables corporations with an establishment in the province of Québec that carry out
eligible activities in the technology sector to obtain a refundable tax credit equal to 30% of
eligible salaries, up to a maximum of $20,000 per year per eligible employee until December 31,
2015.Prior to April 1, 2008, in order to be eligible for the E-Commerce Place, Cité du Multimédia de
Montréal, New Economy Centres tax credits, the Company relocated some of its eligible employees to
designated locations. Real estate costs for these designated locations are significantly higher
than they were at the previous facilities. As at September 30, 2010, the balance outstanding for
financial commitments for these real estate locations was $352,362,000 ranging between three
months and 13 years. The refundable tax credits for these programs were calculated at rates
varying between 35% to 40% on salaries paid in Québec to a maximum range of $12,500 to $15,000 per
year per eligible employee.
 CGI group Inc.     2010 Annual report
    
    53




---



##### 



2010
    
    
    2009Accumulated
    
    
    Net book
    
    
    
    
    
    
    Accumulated
    
    
    Net bookCost
    
    
    amortization
    
    
    value
    
    
    Cost
    
    
    amortization
    
    
    value$
    
    
    $
    
    
    $
    
    
    $
    
    
    $
    
    
    $Land and buildings
    
    
    17,309
    
    
    
    4,461
    
    
    
    12,848
    
    
    
    17,757
    
    
    
    3,427
    
    
    
    14,330Leasehold improvements
    
    
    142,297
    
    
    
    76,381
    
    
    
    65,916
    
    
    
    139,542
    
    
    
    68,879
    
    
    
    70,663Furniture, fixtures and equipment
    
    
    75,990
    
    
    
    30,605
    
    
    
    45,385
    
    
    
    55,953
    
    
    
    24,569
    
    
    
    31,384Computer equipment
    
    
    256,985
    
    
    
    143,110
    
    
    
    113,875
    
    
    
    190,850
    
    
    
    94,809
    
    
    
    96,041492,581
    
    
    
    254,557
    
    
    
    238,024
    
    
    
    404,102
    
    
    
    191,684
    
    
    
    212,418
  
 2010Accumulated
    
    
    Net bookCost
    
    
    amortization
    
    
    value$
    
    
    $
    
    
    $Intangible assetsContract costsIncentives
    
    
    236,750
    
    
    
    190,294
    
    
    
    46,456Transition costs
    
    
    200,154
    
    
    
    102,734
    
    
    
    97,420436,904
    
    
    
    293,028
    
    
    
    143,876Other intangible assetsInternal-use software
    
    
    90,704
    
    
    
    66,841
    
    
    
    23,863Business solutions
    
    
    283,799
    
    
    
    178,491
    
    
    
    105,308Software licenses
    
    
    174,412
    
    
    
    123,977
    
    
    
    50,435Client relationships and other
    
    
    426,546
    
    
    
    233,274
    
    
    
    193,272975,461
    
    
    
    602,583
    
    
    
    372,8781,412,365
    
    
    
    895,611
    
    
    
    516,754
 CGI group Inc.     2010 Annual report
    
    54




---



##### 



2009Accumulated
    
    
    Net bookCost
    
    
    amortization
    
    
    value$
    
    
    $
    
    
    $Intangible assetsContract costsIncentives
    
    
    247,146
    
    
    
    185,296
    
    
    
    61,850Transition costs
    
    
    169,087
    
    
    
    77,138
    
    
    
    91,949416,233
    
    
    
    262,434
    
    
    
    153,799Other intangible assetsInternal-use software
    
    
    88,128
    
    
    
    59,033
    
    
    
    29,095Business solutions
    
    
    284,341
    
    
    
    160,423
    
    
    
    123,918Software licenses
    
    
    144,861
    
    
    
    108,127
    
    
    
    36,734Client relationships and other
    
    
    341,188
    
    
    
    228,959
    
    
    
    112,229858,518
    
    
    
    556,542
    
    
    
    301,9761,274,751
    
    
    
    818,976
    
    
    
    455,775
  2010
    
    
    2009
    
    
    2008$
    
    
    $
    
    
    $Acquired
    
    
    166,468
    
    
    
    22,965
    
    
    
    30,665Internally developed
    
    
    49,193
    
    
    
    44,181
    
    
    
    40,257215,661
    
    
    
    67,146
    
    
    
    70,922
  2010
    
    
    2009
    
    
    2008$
    
    
    $
    
    
    $Internal-use software
    
    
    11,121
    
    
    
    12,963
    
    
    
    12,307Business solutions
    
    
    26,322
    
    
    
    33,444
    
    
    
    34,367Software licenses
    
    
    18,726
    
    
    
    16,674
    
    
    
    17,997Client relationships and other
    
    
    36,676
    
    
    
    37,748
    
    
    
    37,121Amortization of other intangible assets (Note 14)
    
    
    92,845
    
    
    
    100,829
    
    
    
    101,792
  
 2010
    
    
    2009$
    
    
    $Deferred financing fees
    
    
    2,360
    
    
    
    3,643Deferred compensation plan assets
    
    
    16,318
    
    
    
    13,108Long-term maintenance agreements
    
    
    5,542
    
    
    
    13,735Forward contracts (Note 26)
    
    
    13,317
    
    
    
    22,372Other
    
    
    4,724
    
    
    
    7,700Other long-term assets
    
    
    42,261
    
    
    
    60,558
 CGI group Inc.     2010 Annual report
    
    55




---



##### 



2010Europe &Canada
    
    
    U.S. & India
    
    
    Asia Pacific
    
    
    Total$
    
    
    $
    
    
    $
    
    
    $Balance, beginning of year
    
    
    1,141,381
    
    
    
    432,320
    
    
    
    101,080
    
    
    
    1,674,781Acquisition (Note 18a)
    
    
    
    
    
    
    886,403
    
    
    
    
    
    
    
    886,403Foreign currency translation adjustment
    
    
    
    
    
    
    (25,961
    )
    
    
    (9,810
    )
    
    
    (35,771
    )Balance, end of year
    
    
    1,141,381
    
    
    
    1,292,762
    
    
    
    91,270
    
    
    
    2,525,413
 2009Europe &Canada
    
    
    U.S. & India
    
    
    Asia Pacific
    
    
    Total$
    
    
    $
    
    
    $
    
    
    $Balance, beginning of year
    
    
    1,158,730
    
    
    
    431,129
    
    
    
    99,503
    
    
    
    1,689,362Acquisition
    
    
    209
    
    
    
    
    
    
    
    
    
    
    
    209Purchase price adjustments (Note 18c)
    
    
    (16,059
    )
    
    
    (3,865
    )
    
    
    (415
    )
    
    
    (20,339
    )Disposal of assets (Note 18b)
    
    
    (1,499
    )
    
    
    
    
    
    
    
    
    
    
    (1,499
    )Foreign currency translation adjustment
    
    
    
    
    
    
    5,056
    
    
    
    1,992
    
    
    
    7,048Balance, end of year
    
    
    1,141,381
    
    
    
    432,320
    
    
    
    101,080
    
    
    
    1,674,781
 
 2010
    
    
    2009$
    
    
    $Deferred compensation
    
    
    25,173
    
    
    
    22,727Deferred revenue
    
    
    40,702
    
    
    
    27,774Deferred rent
    
    
    44,737
    
    
    
    16,940Forward contracts (Note 26)
    
    
    3,396
    
    
    
    7,648Other
    
    
    5,891
    
    
    
    8,845Other long-term liabilities
    
    
    119,899
    
    
    
    83,934
  CGI group Inc.     2010 Annual report
    
    56




---



##### 



2010
    
    
    2009$
    
    
    $Senior U.S. unsecured notes,
bearing a weighted average interest
rate of 5.27% and repayable by
payments of $89,593 (US$87,000) in
2011 and $20,596 (US$20,000) in 2014,
less imputed interest of
$2901
    
    
    109,899
    
    
    
    114,061Unsecured committed revolving term
facility bearing interest at LIBOR
rate plus 0.63% or bankers acceptance
rate plus 0.63%, maturing in
20122
    
    
    964,223
    
    
    
    126,043Obligations bearing a weighted
average interest rate of 4.00% and
repayable in blended monthly
instalments maturing at various dates
until 2018
    
    
    22,049
    
    
    
    5,879Obligations under capital leases,
bearing a weighted average interest
rate of 4.89% and repayable in blended
monthly instalments maturing at
various dates until 2018
    
    
    57,705
    
    
    
    37,1471,153,876
    
    
    
    283,130Current portion
    
    
    114,577
    
    
    
    17,7021,039,299
    
    
    
    265,428
 1
    
    As at September 30, 2010, the private placement financing with U.S.
institutional investors is comprised of two remaining tranches of Senior U.S.
unsecured notes maturing in January 2011 and 2014 for a total amount of
US$107,000,000. On January 29, 2009, the Company repaid the first tranche in the
amount of US$85,000,000 and settled the related forward contracts taken to manage
the Companys exposure to fluctuations in the foreign exchange rate resulting in
a cash inflow of $18,318,000. The Senior U.S. unsecured notes contain covenants
that require the Company to maintain certain financial ratios (Note 27). At
September 30, 2010, the Company is in compliance with these covenants.2
    
    The Company has a five-year unsecured revolving credit facility available for an
amount of $1,500,000,000 that expires in August 2012 bearing interest at LIBOR
plus a variable margin that is determined based on leverage ratios. As at
September 30, 2010, an amount of $964,223,000 has been drawn upon this facility
(Note 26). Also an amount of $15,846,000 has been committed against this facility
to cover various letters of credit issued for clients and other parties. In
addition to the revolving credit facility, the Company has available demand lines
of credit in the amount of $25,000,000. At September 30, 2010, no amount had been
drawn upon these facilities. The revolving credit facility contains covenants
that require the Company to maintain certain financial ratios (Note 27). At
September 30, 2010, the Company is in compliance with these covenants. The
Company also has a proportionate share of a revolving demand credit facility
related to the joint venture for an amount of $2,500,000 bearing interest at the
Canadian prime rate. As at September 30, 2010, no amount has been drawn upon this
facility.
  $2011
    
    
    95,1692012
    
    
    968,6362013
    
    
    4,7502014
    
    
    24,3082015
    
    
    1,917Thereafter
    
    
    1,391Total principal payments on long-term debt
    
    
    1,096,171
  Principal
    
    
    Interest
    
    
    Payment$
    
    
    $
    
    
    $2011
    
    
    19,408
    
    
    
    2,441
    
    
    
    21,8492012
    
    
    17,308
    
    
    
    1,440
    
    
    
    18,7482013
    
    
    10,456
    
    
    
    578
    
    
    
    11,0342014
    
    
    5,850
    
    
    
    276
    
    
    
    6,1262015
    
    
    3,188
    
    
    
    68
    
    
    
    3,256Thereafter
    
    
    1,495
    
    
    
    
    
    
    
    1,495Total minimum capital lease payments
    
    
    57,705
    
    
    
    4,803
    
    
    
    62,508
 CGI group Inc.     2010 Annual report
    
    57




---



##### 



Class A subordinate shares
    
    
    Class B shares
    
    
    TotalCarrying
    
    
    
    
    
    
    Carrying
    
    
    
    
    
    
    CarryingNumber
    
    
    value
    
    
    Number
    
    
    value
    
    
    Number
    
    
    value$
    
    
    
    
    
    
    $
    
    
    
    
    
    
    $Balance, September 30, 2007
    
    
    290,545,715
    
    
    
    1,321,305
    
    
    
    34,208,159
    
    
    
    47,724
    
    
    
    324,753,874
    
    
    
    1,369,029Repurchased and cancelled1
    
    
    (20,488,168
    )
    
    
    (90,748
    )
    
    
    
    
    
    
    
    
    
    
    (20,488,168
    )
    
    
    (90,748
    )Repurchased and not cancelled1
    
    
    
    
    
    
    (847
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (847
    )Issued upon exercise of options2
    
    
    4,107,823
    
    
    
    42,238
    
    
    
    
    
    
    
    
    
    
    
    4,107,823
    
    
    
    42,238Balance, September 30, 2008
    
    
    274,165,370
    
    
    
    1,271,948
    
    
    
    34,208,159
    
    
    
    47,724
    
    
    
    308,373,529
    
    
    
    1,319,672Repurchased and cancelled1
    
    
    (9,708,292
    )
    
    
    (44,272
    )
    
    
    
    
    
    
    
    
    
    
    (9,708,292
    )
    
    
    (44,272
    )Issued upon exercise of options2
    
    
    2,221,032
    
    
    
    22,870
    
    
    
    
    
    
    
    
    
    
    
    2,221,032
    
    
    
    22,870Conversion of shares3
    
    
    600,000
    
    
    
    837
    
    
    
    (600,000
    )
    
    
    (837
    )
    
    
    
    
    
    
    Balance, September 30, 2009
    
    
    267,278,110
    
    
    
    1,251,383
    
    
    
    33,608,159
    
    
    
    46,887
    
    
    
    300,886,269
    
    
    
    1,298,270Repurchased and cancelled1
    
    
    (35,602,085
    )
    
    
    (168,759
    )
    
    
    
    
    
    
    
    
    
    
    (35,602,085
    )
    
    
    (168,759
    )Issued upon exercise of options2
    
    
    6,008,766
    
    
    
    65,558
    
    
    
    
    
    
    
    
    
    
    
    6,008,766
    
    
    
    65,558Balance, September 30, 2010
    
    
    237,684,791
    
    
    
    1,148,182
    
    
    
    33,608,159
    
    
    
    46,887
    
    
    
    271,292,950
    
    
    
    1,195,069
 1
    
    On January 27, 2010, the Companys Board of Directors authorized the renewal of
a Normal Course Issuer Bid (NCIB) to purchase up to 10% of the public float of
the Companys Class A subordinate shares during the next year. The Toronto Stock
Exchange (TSX) subsequently approved the Companys request for approval. The
Issuer Bid enables the Company to purchase up to 25,151,058 Class A subordinate
shares (26,970,437 in 2009 and 28,502,941 in 2008) for cancellation on the open
market through the TSX. The Class A subordinate shares were available for
purchase under the Issuer Bid commencing February 9, 2010, until no later than
February 8, 2011, or on such earlier date when the Company completes its
purchases or elects to terminate the bid. During 2010, the Company repurchased,
under the previous and current NCIB, 35,602,085 Class A subordinate shares
(9,525,892 in 2009 and 19,910,068 in 2008) for cash consideration of $516,699,000
($99,881,000 in 2009 and $213,485,000 in 2008). The excess of the purchase price
over the carrying value of Class A subordinate shares repurchased, in the amount
of $347,940,000 ($55,609,000 in 2009 and $121,890,000 in 2008), was charged to
retained earnings.As at September 30, 2008, 182,400 of the repurchased Class A subordinate shares with
a carrying value of $847,000 and a purchase value of $1,817,000 were held by the
Company and had been cancelled and paid subsequent to year-end.2
    
    The carrying value of Class A subordinate shares includes $13,332,000
($5,253,000 in 2009 and $10,223,000 in 2008) which corresponds to a reduction in
contributed surplus representing the value of accumulated compensation cost
associated with the options exercised during the year.3
    
    During the twelve months ended September 30, 2009, a shareholder converted
600,000 Class B shares into 600,000 Class A subordinate shares.
 CGI group Inc.     2010 Annual report
    
    58




---



##### 



A) STOCK OPTIONS
   2010
    
    
    2009
    
    
    2008Weighted average
    
    
    
    
    
    
    Weighted average
    
    
    
    
    
    
    Weighted averageNumber of
    
    
    exercise price
    
    
    Number of
    
    
    exercise price
    
    
    Number of
    
    
    exercise priceoptions
    
    
    per share
    
    
    options
    
    
    per share
    
    
    options
    
    
    per share$
    
    
    
    
    
    
    $
    
    
    
    
    
    
    $Outstanding, beginning of year
    
    
    28,883,835
    
    
    
    9.16
    
    
    
    26,757,738
    
    
    
    9.34
    
    
    
    24,499,886
    
    
    
    8.52Granted
    
    
    8,413,586
    
    
    
    12.58
    
    
    
    8,448,453
    
    
    
    9.32
    
    
    
    7,798,388
    
    
    
    11.39Exercised
    
    
    (6,008,766
    )
    
    
    8.69
    
    
    
    (2,221,032
    )
    
    
    7.93
    
    
    
    (4,107,823
    )
    
    
    7.79Forfeited
    
    
    (3,734,542
    )
    
    
    9.65
    
    
    
    (3,863,746
    )
    
    
    11.16
    
    
    
    (1,094,052
    )
    
    
    10.65Expired
    
    
    (998,630
    )
    
    
    15.91
    
    
    
    (237,578
    )
    
    
    14.11
    
    
    
    (338,661
    )
    
    
    12.20Outstanding, end of year
    
    
    26,555,483
    
    
    
    10.03
    
    
    
    28,883,835
    
    
    
    9.16
    
    
    
    26,757,738
    
    
    
    9.34Exercisable, end of year
    
    
    14,116,392
    
    
    
    8.60
    
    
    
    18,087,166
    
    
    
    8.75
    
    
    
    19,398,753
    
    
    
    8.56The following table summarizes information about outstanding stock options granted by the
Company as at September 30, 2010:Options outstanding
    
    
    Options exercisableWeightedaverage
    
    
    Weighted
    
    
    
    
    
    
    Weightedremaining
    
    
    average
    
    
    
    
    
    
    averageRange of
    
    
    Number of
    
    
    contractual
    
    
    exercise
    
    
    Number of
    
    
    exerciseexercise price
    
    
    options
    
    
    life (years)
    
    
    price
    
    
    options
    
    
    price$
    
    
    
    
    
    
    
    
    
    
    $
    
    
    
    
    
    
    $2.06 to 5.20
    
    
    10,729
    
    
    
    0.51
    
    
    
    2.57
    
    
    
    10,729
    
    
    
    2.576.05 to 6.98
    
    
    2,255,941
    
    
    
    4.48
    
    
    
    6.48
    
    
    
    2,255,941
    
    
    
    6.487.00 to 7.87
    
    
    3,408,828
    
    
    
    4.57
    
    
    
    7.74
    
    
    
    3,408,828
    
    
    
    7.748.00 to 8.99
    
    
    4,417,145
    
    
    
    3.43
    
    
    
    8.62
    
    
    
    4,417,145
    
    
    
    8.629.05 to 9.90
    
    
    4,832,132
    
    
    
    7.50
    
    
    
    9.34
    
    
    
    1,692,713
    
    
    
    9.4010.05 to 11.80
    
    
    3,566,872
    
    
    
    6.99
    
    
    
    11.37
    
    
    
    2,284,340
    
    
    
    11.3512.54 to 13.26
    
    
    7,964,939
    
    
    
    9.01
    
    
    
    12.55
    
    
    
    10,799
    
    
    
    13.2614.48 to 15.58
    
    
    98,897
    
    
    
    9.54
    
    
    
    14.98
    
    
    
    35,897
    
    
    
    9.5526,555,483
    
    
    
    6.58
    
    
    
    10.03
    
    
    
    14,116,392
    
    
    
    8.60
 CGI group Inc.     2010 Annual report
    
    59




---



##### 



2010
    
    
    2009
    
    
    2008Stock-based compensation costs ($)
    
    
    15,517
    
    
    
    8,617
    
    
    
    5,131Dividend yield (%)
    
    
    0.00
    
    
    
    0.00
    
    
    
    0.00Expected volatility (%)
    
    
    27.32
    
    
    
    24.42
    
    
    
    23.70Risk-free interest rate (%)
    
    
    2.48
    
    
    
    3.05
    
    
    
    4.09Expected life (years)
    
    
    5.00
    
    
    
    5.00
    
    
    
    5.00Weighted average grant date fair value ($)
    
    
    3.63
    
    
    
    2.59
    
    
    
    3.37
 B) PERFORMANCE SHARE UNITS (PSUS)
   C) CONTRIBUTED SURPLUS
  $Balance, September 30, 2007
    
    
    82,465Compensation cost associated with exercised options (Note 11)
    
    
    (10,223
    )Stock-based compensation costs
    
    
    5,131Balance, September 30, 2008
    
    
    77,373Compensation cost associated with exercised options (Note 11)
    
    
    (5,253
    )Stock-based compensation costs
    
    
    8,617Balance, September 30, 2009
    
    
    80,737Compensation cost associated with exercised options (Note 11)
    
    
    (13,332
    )Stock-based compensation costs
    
    
    15,517Balance, September 30, 2010
    
    
    82,922
 
  2010
    
    
    2009
    
    
    2008Weighted
    
    
    Earnings
    
    
    
    
    
    
    Weighted
    
    
    Earnings
    
    
    
    
    
    
    Weighted
    
    
    EarningsEarnings
    
    
    average
    
    
    per share
    
    
    Earnings
    
    
    average
    
    
    per share
    
    
    Earnings
    
    
    average
    
    
    per sharefrom
    
    
    number of
    
    
    from
    
    
    from
    
    
    number of
    
    
    from
    
    
    from
    
    
    number of
    
    
    fromcontinuing
    
    
    shares
    
    
    continuing
    
    
    continuing
    
    
    shares
    
    
    continuing
    
    
    continuing
    
    
    shares
    
    
    continuingoperations
    
    
    outstanding1
    
    
    operations
    
    
    operations
    
    
    outstanding1
    
    
    operations
    
    
    operations
    
    
    outstanding1
    
    
    operations$
    
    
    
    
    
    
    $
    
    
    $
    
    
    
    
    
    
    $
    
    
    $
    
    
    
    
    
    
    $362,386
    
    
    
    284,826,257
    
    
    
    1.27
    
    
    
    315,158
    
    
    
    306,853,077
    
    
    
    1.03
    
    
    
    298,266
    
    
    
    317,604,899
    
    
    
    0.94Dilutive options2
    
    
    
    
    
    
    8,093,693
    
    
    
    
    
    
    
    
    
    
    
    3,492,164
    
    
    
    
    
    
    
    
    
    
    
    5,199,388362,386
    
    
    
    292,919,950
    
    
    
    1.24
    
    
    
    315,158
    
    
    
    310,345,241
    
    
    
    1.02
    
    
    
    298,266
    
    
    
    322,804,287
    
    
    
    0.92
 1
    
    The 35,602,085 Class A subordinate shares repurchased during the year (9,525,892 in 2009 and
19,910,068 in 2008), were excluded from the calculation of weighted average number of shares
outstanding as of the date of repurchase.2
    
    The calculation of the diluted earnings per share excluded 8,029,590, 13,384,651 and
8,764,136 options for the years ended September 30, 2010, 2009 and 2008, respectively, as they
were anti-dilutive.
 CGI group Inc.     2010 Annual report
    
    60




---



##### 



2010
    
    
    2009
    
    
    2008$
    
    
    $
    
    
    $Amortization of capital assets
    
    
    72,067
    
    
    
    61,412
    
    
    
    43,455Amortization of intangible assetsContract costs related to transition costs
    
    
    30,396
    
    
    
    22,377
    
    
    
    17,925Other intangible assets (Note 6)
    
    
    92,845
    
    
    
    100,829
    
    
    
    101,792Impairment of other intangible assets1
    
    
    
    
    
    
    11,143
    
    
    
    195,308
    
    
    
    195,761
    
    
    
    163,172Amortization of contract costs related to incentives (presented as reduction of revenue)
    
    
    23,149
    
    
    
    21,043
    
    
    
    21,682Amortization of deferred financing fees (presented in interest on long-term debt)
    
    
    1,283
    
    
    
    1,283
    
    
    
    1,266219,740
    
    
    
    218,087
    
    
    
    186,120
 1
    
    The impairment of other intangible assets relates to certain assets that were no longer
expected to provide future value.
 
 Balance, as at
    
    Net changes
    
    Balance, as atOctober 1,
    
    during
    
    September 30,2009
    
    the year
    
    2010$
    
    $
    
    $Net unrealized losses on translating financial statements of self-sustaining foreign operations
(net of accumulated income tax recovery of $12,686)
    
    
    (359,423
    )
    
    
    (53,598
    )
    
    
    (413,021
    )Net unrealized gains on translating long-term debt designated as a hedge of net investments
in self-sustaining foreign operations (net of accumulated income tax expense of $14,347)
    
    
    61,000
    
    
    
    15,806
    
    
    
    76,806Net unrealized gains on cash flow hedges (net of accumulated income tax expense of $5,336)
    
    
    12,433
    
    
    
    2,036
    
    
    
    14,469(285,990
    )
    
    
    (35,756
    )
    
    
    (321,746
    )Balance, as at
    
    
    Net changes
    
    
    Balance, as atOctober 1,
    
    
    during
    
    
    september 30,2008
    
    
    the year
    
    
    2009$
    
    
    $
    
    
    $Net unrealized losses on translating financial statements of self-sustaining foreign operations
(net of accumulated income tax recovery of $10,464)
    
    
    (365,672
    )
    
    
    6,249
    
    
    
    (359,423
    )Net unrealized gains on translating long-term debt designated as a hedge of net investments
in self-sustaining foreign operations (net of accumulated income tax expense of $11,623)
    
    
    45,261
    
    
    
    15,739
    
    
    
    61,000Net unrealized gains on cash flow hedges (net of accumulated income tax expense of $4,422)
    
    
    (1,013
    )
    
    
    13,446
    
    
    
    12,433(321,424
    )
    
    
    35,434
    
    
    
    (285,990
    )Balance, as at
    
    
    Net changes
    
    
    Balance, as atOctober 1,
    
    
    during
    
    
    september 30,2007
    
    
    the year
    
    
    2008$
    
    
    $
    
    
    $Net unrealized losses on translating financial statements of self-sustaining foreign operations
(net of accumulated income tax recovery of $7,029)
    
    
    (431,872
    )
    
    
    66,200
    
    
    
    (365,672
    )Net unrealized gains on translating long-term debt designated as a hedge of net investment
in self-sustaining foreign operations (net of accumulated income tax expense of $8,748)
    
    
    45,799
    
    
    
    (538
    )
    
    
    45,261Net unrealized losses on cash flow hedges (net of accumulated income tax recovery of $187)
    
    
    
    
    
    
    (1,013
    )
    
    
    (1,013
    )(386,073
    )
    
    
    64,649
    
    
    
    (321,424
    )
  CGI group Inc.     2010 Annual report
    
    61




---



##### 



2010
    
    
    2009$
    
    
    $Current future income tax assets
    
    
    16,509
    
    
    
    15,110Long-term future income tax assets
    
    
    11,592
    
    
    
    10,173Current future income tax liabilities
    
    
    (26,423
    )
    
    
    (50,250
    )Long-term future income tax liabilities
    
    
    (170,683
    )
    
    
    (171,697
    )Future income taxes, net
    
    
    (169,005
    )
    
    
    (196,664
    )
  2010
    
    
    2009
    
    
    2008$
    
    
    $
    
    
    $Current
    
    
    136,387
    
    
    
    95,923
    
    
    
    128,972Future
    
    
    (21,417
    )
    
    
    29,300
    
    
    
    (22,675
    )114,970
    
    
    
    125,223
    
    
    
    106,297
  2010
    
    
    2009
    
    
    2008%
    
    
    %
    
    
    %Companys statutory tax rate
    
    
    30.2
    
    
    
    30.9
    
    
    
    31.2Effect of foreign tax rate differences
    
    
    0.3
    
    
    
    
    
    
    
    (0.6
    )Final determination from agreements with tax authorities and expirations of statutes of limitations
    
    
    (7.9
    )
    
    
    (3.9
    )
    
    
    (3.7
    )Non-deductible and tax exempt items
    
    
    1.7
    
    
    
    1.3
    
    
    
    0.8Impact on future tax assets and liabilities resulting from tax rate changes
    
    
    (0.3
    )
    
    
    
    
    
    
    (1.7
    )Tax benefits on losses
    
    
    0.1
    
    
    
    0.1
    
    
    
    0.2Effective income tax rate
    
    
    24.1
    
    
    
    28.4
    
    
    
    26.2
 CGI group Inc.     2010 Annual report
    
    62




---



##### 



2010
    
    
    2009$
    
    
    $Future income tax assets:Accounts payable and accrued liabilities
    
    
    14,074
    
    
    
    11,316Tax benefits on losses carried forward
    
    
    14,667
    
    
    
    10,171Capital assets, intangible assets and other long-term liabilities
    
    
    20,482
    
    
    
    17,197Accrued compensation
    
    
    28,397
    
    
    
    23,414Unrealized losses on cash flow hedges
    
    
    1,585
    
    
    
    3,395Allowance for doubtful accounts
    
    
    1,793
    
    
    
    3,107Other
    
    
    1,612
    
    
    
    2,43382,610
    
    
    
    71,033Valuation allowance
    
    
    (4,346
    )
    
    
    (6,818
    )78,264
    
    
    
    64,215Future income tax liabilities:Capital assets, intangible assets and other long-term assets
    
    
    161,988
    
    
    
    161,008Work in progress
    
    
    25,165
    
    
    
    22,395Goodwill
    
    
    27,774
    
    
    
    25,276Refundable tax credits on salaries
    
    
    20,985
    
    
    
    40,233Unrealized gain on cash flow hedges
    
    
    6,908
    
    
    
    7,478Other
    
    
    4,449
    
    
    
    4,489247,269
    
    
    
    260,879Future income taxes, net
    
    
    (169,005
    )
    
    
    (196,664
    )
   
  2010
    
    
    2009
    
    
    2008$
    
    
    $
    
    
    $Costs of services, selling and administrative
    
    
    3,116,425
    
    
    
    3,268,995
    
    
    
    3,193,270Tax credits
    
    
    (90,602
    )
    
    
    (98,589
    )
    
    
    (82,510
    )3,025,823
    
    
    
    3,170,406
    
    
    
    3,110,760
 CGI group Inc.     2010 Annual report
    
    63




---



##### 



2010 TRANSACTIONS
 a) Acquisition
  
    
    Stanley, Inc. (Stanley) On August 17, 2010,
the Company acquired all outstanding shares of
Stanley, a provider of information technology
services and solutions to U.S. defence,
intelligence and federal civilian government
agencies, for a total cash consideration of
$923,150,000. The acquisition was financed
through a withdrawal from the Companys existing
unsecured revolving credit facility and cash on
hand of $832,160,000 and $90,990,000,
respectively. Stanleys operations will increase
the scale and capabilities of the Company to
serve the U.S. Federal Government expanding the
offering into the defence and intelligence
space.
  Stanley$Current assets1
    
    
    163,648Capital assets
    
    
    9,005Intangible assets
    
    
    123,897Goodwill2
    
    
    886,403Other long-term assets
    
    
    3,167Future income taxes
    
    
    3,564Current liabilities
    
    
    (176,110
    )Debt, classified as current
    
    
    (102,262
    )Other long-term liabilities
    
    
    (11,748
    )899,564Cash acquired
    
    
    23,586Net assets acquired
    
    
    923,150Cash consideration
    
    
    923,150
 1
    
    The current assets include accounts receivable with a fair value of $97,967,000 which
approximates the gross amount due under the contracts.2
    
    The goodwill arising from the acquisition mainly represents the future economic value
associated to acquired work force and synergies with the Companys operations.
All of the goodwill is included in the U.S. and India segment and $26,323,000 is deductible for
tax purposes.
   CGI group Inc.     2010 Annual report
    
    64




---



##### 



b) Business combination adjustments
  2009 TRANSACTIONS
 a) Acquisition
  b) Disposal
  c) Modifications to purchase price allocations
   d) Consideration of purchase price
  2008 TRANSACTIONS
 a) Acquisition
  b) Disposal
  c) Modifications to purchase price allocations
  d) Consideration of purchase price
  CGI group Inc.     2010 Annual report
    
    65




---



##### 



2010
    
    
    2009
    
    
    2008$
    
    
    $
    
    
    $Revenue
    
    
    
    
    
    
    2,511
    
    
    
    64,851Operating expenses1
    
    
    
    
    
    
    1,046
    
    
    
    68,747Amortization
    
    
    
    
    
    
    14
    
    
    
    1,624Earnings (loss) before income taxes
    
    
    
    
    
    
    1,451
    
    
    
    (5,520
    )Income tax expense (recovery)2
    
    
    
    
    
    
    143
    
    
    
    (386
    )Earnings (loss) from discontinued operations
    
    
    
    
    
    
    1,308
    
    
    
    (5,134
    )
 1
    
    For the year ended September 30, 2009, operating expenses from discontinued operations
include a gain on disposition of $1,494,000.
For the year ended September 30, 2008, it includes an impairment of goodwill of $4,051,000 and a loss on disposition of $965,000.2
    
    Income tax expense (recovery) does not bear a normal relation to earnings (loss) before income taxes since the sale includes goodwill of $1,499,000
for the year ended September 30, 2009 ($7,732,000 for the year ended September 30, 2008), which
has no tax basis.
  2010
    
    
    2009
    
    
    2008$
    
    
    $
    
    
    $Cash provided by (used in) operating activities
    
    
    
    
    
    
    164
    
    
    
    (818
    )Cash used in investing activities
    
    
    
    
    
    
    (3
    )
    
    
    (250
    )Total cash provided by (used in) discontinued operations
    
    
    
    
    
    
    161
    
    
    
    (1,068
    )
 
  2010
    
    
    2009$
    
    
    $Balance sheetsCurrent assets
    
    
    38,148
    
    
    
    37,608Non-current assets
    
    
    2,992
    
    
    
    2,998Current liabilities
    
    
    15,609
    
    
    
    14,721Non-current liabilities
    
    
    933
    
    
    
    445
 2010
    
    
    2009
    
    
    2008$
    
    
    $
    
    
    $Statements of earningsRevenue
    
    
    91,015
    
    
    
    101,964
    
    
    
    87,887Expenses
    
    
    79,597
    
    
    
    88,552
    
    
    
    77,381Net earnings
    
    
    11,418
    
    
    
    13,412
    
    
    
    10,506
 CGI group Inc.     2010 Annual report
    
    66




---



##### 



2010
    
    
    2009
    
    
    2008$
    
    
    $
    
    
    $Statements of cash flowsCash provided by (used in):Operating activities
    
    
    13,763
    
    
    
    25,542
    
    
    
    4,879Investing activities
    
    
    (733
    )
    
    
    (570
    )
    
    
    (412
    )Financing activities
    
    
    (12,740
    )
    
    
    (12,250
    )
    
    
    (13,720
    )
 
  2010
    
    
    2009
    
    
    2008$
    
    
    $
    
    
    $Accounts receivable
    
    
    125,928
    
    
    
    31,749
    
    
    
    (13,164
    )Work in progress
    
    
    (59,579
    )
    
    
    (22,450
    )
    
    
    (43,785
    )Prepaid expenses and other current assets
    
    
    17,933
    
    
    
    8,399
    
    
    
    (12,692
    )Accounts payable and accrued liabilities
    
    
    (46,810
    )
    
    
    (39,255
    )
    
    
    5,762Accrued compensation
    
    
    (74,443
    )
    
    
    38,009
    
    
    
    (5,327
    )Deferred revenue
    
    
    22,415
    
    
    
    15,194
    
    
    
    (13,323
    )Income taxes
    
    
    (8,386
    )
    
    
    25,974
    
    
    
    (31,357
    )(22,942
    )
    
    
    57,620
    
    
    
    (113,886
    )
  2010
    
    
    2009
    
    
    2008$
    
    
    $
    
    
    $Operating activitiesAccounts receivable
    
    
    (693
    )
    
    
    (1,476
    )
    
    
    408Work in progress
    
    
    2,707
    
    
    
    
    
    
    
    Accounts payable and accrued liabilities
    
    
    
    
    
    
    (1,817
    )
    
    
    (2,723
    )Deferred revenue
    
    
    3,750
    
    
    
    4,779
    
    
    
    5,764
    
    
    
    1,486
    
    
    
    (2,315
    )
 Investing activitiesPurchase of capital assets
    
    
    (42,982
    )
    
    
    (27,040
    )
    
    
    (17,559
    )Purchase of intangible assets
    
    
    (23,708
    )
    
    
    (4,779
    )
    
    
    (13,185
    )(66,690
    )
    
    
    (31,819
    )
    
    
    (30,744
    )
 Financing activitiesIncrease in obligations under capital leases
    
    
    38,200
    
    
    
    27,040
    
    
    
    17,559Increase in obligations
    
    
    22,033
    
    
    
    
    
    
    
    13,185Issuance of shares
    
    
    693
    
    
    
    1,476
    
    
    
    (408
    )Repurchase of Class A subordinate shares
    
    
    
    
    
    
    1,817
    
    
    
    2,72360,926
    
    
    
    30,333
    
    
    
    33,059
 CGI group Inc.     2010 Annual report
    
    67




---



##### 



2010
    
    
    2009
    
    
    2008$
    
    
    $
    
    
    $Interest paid
    
    
    13,254
    
    
    
    16,558
    
    
    
    26,847Income taxes paid
    
    
    104,724
    
    
    
    63,125
    
    
    
    139,803
 
   2010U.S. &
    
    
    Europe &Canada
    
    
    India
    
    
    Asia Pacific
    
    
    Corporate
    
    
    Total$
    
    
    $
    
    
    $
    
    
    $
    
    
    $Segment revenue
    
    
    2,170,082
    
    
    
    1,483,593
    
    
    
    242,152
    
    
    
    
    
    
    
    3,895,827Intersegment revenue elimination
    
    
    (57,670
    )
    
    
    (83,194
    )
    
    
    (22,846
    )
    
    
    
    
    
    
    (163,710
    )Revenue
    
    
    2,112,412
    
    
    
    1,400,399
    
    
    
    219,306
    
    
    
    
    
    
    
    3,732,117Earnings (loss) from continuing
operations before
acquisition-related and integration
costs, interest on long-term debt,
interest income, other (income)
expense, gain on sale of capital
assets and income tax
expense1
    
    
    375,998
    
    
    
    192,305
    
    
    
    89
    
    
    
    (56,490
    )
    
    
    511,902Total assets
    
    
    2,083,675
    
    
    
    2,166,397
    
    
    
    180,780
    
    
    
    176,339
    
    
    
    4,607,191
 1
    
    Amortization included in Canada, U.S. & India, Europe & Asia Pacific and Corporate is
$132,073,000, $69,010,000, $5,790,000 and $11,584,000, respectively,
for the year ended September 30, 2010.
 2009U.S. &
    
    
    Europe &Canada
    
    
    India
    
    
    Asia Pacific
    
    
    Corporate
    
    
    Total$
    
    
    $
    
    
    $
    
    
    $
    
    
    $Segment revenue
    
    
    2,216,042
    
    
    
    1,421,366
    
    
    
    305,417
    
    
    
    
    
    
    
    3,942,825Intersegment revenue elimination
    
    
    (36,383
    )
    
    
    (59,579
    )
    
    
    (21,702
    )
    
    
    
    
    
    
    (117,664
    )Revenue
    
    
    2,179,659
    
    
    
    1,361,787
    
    
    
    283,715
    
    
    
    
    
    
    
    3,825,161Earnings (loss) from continuing
operations before
acquisition-related and integration
costs, interest on long-term debt,
interest income, other (income)
expense, gain on sale of capital
assets and income tax
expense1
    
    
    320,702
    
    
    
    171,965
    
    
    
    18,639
    
    
    
    (50,565
    )
    
    
    460,741Total assets
    
    
    2,341,074
    
    
    
    985,289
    
    
    
    197,619
    
    
    
    375,928
    
    
    
    3,899,910
 1
    
    Amortization included in Canada, U.S. & India, Europe & Asia Pacific and Corporate is
$116,243,000, $78,819,000, $7,247,000 and $14,495,000, respectively,
for the year ended September 30, 2009. Amortization includes an impairment of $11,143,000 mainly
related to other intangible assets in the U.S. & India segment.
 2008U.S. &
    
    
    Europe &Canada
    
    
    India
    
    
    Asia Pacific
    
    
    Corporate
    
    
    Total$
    
    
    $
    
    
    $
    
    
    $
    
    
    $Segment revenue
    
    
    2,356,629
    
    
    
    1,137,457
    
    
    
    296,745
    
    
    
    
    
    
    
    3,790,831Intersegment revenue elimination
    
    
    (21,063
    )
    
    
    (50,944
    )
    
    
    (12,961
    )
    
    
    
    
    
    
    (84,968
    )Revenue
    
    
    2,335,566
    
    
    
    1,086,513
    
    
    
    283,784
    
    
    
    
    
    
    
    3,705,863Earnings (loss) from continuing
operations before
acquisition-related and integration
costs, interest on long-term debt,
interest income, other (income)
expense, gain on sale of capital
assets and income tax
expense1
    
    
    332,827
    
    
    
    129,401
    
    
    
    24,692
    
    
    
    (56,434
    )
    
    
    430,486Total assets
    
    
    2,274,589
    
    
    
    1,113,303
    
    
    
    197,900
    
    
    
    94,766
    
    
    
    3,680,558
 1
    
    Amortization included in Canada, U.S. & India, Europe & Asia Pacific and Corporate is
$111,903,000, $54,358,000, $5,069,000 and $13,524,000, respectively,
for the year ended September 30, 2008.
 CGI group Inc.     2010 Annual report
    
    68




---



##### 



GEOGRAPHIC INFORMATION
  2010
    
    
    2009$
    
    
    $Capital assetsCanada
    
    
    161,993
    
    
    
    155,072U.S.
    
    
    59,306
    
    
    
    40,528Other
    
    
    16,725
    
    
    
    16,818238,024
    
    
    
    212,418
  INFORMATION ABOUT SERVICES
  2010
    
    
    2009
    
    
    2008$
    
    
    $
    
    
    $OutsourcingIT Services
    
    
    1,870,804
    
    
    
    1,817,943
    
    
    
    1,523,562BPS
    
    
    412,341
    
    
    
    405,516
    
    
    
    485,454Systems integration and consulting
    
    
    1,448,972
    
    
    
    1,601,702
    
    
    
    1,696,8473,732,117
    
    
    
    3,825,161
    
    
    
    3,705,863
 MAJOR CUSTOMER INFORMATION
  
    2010
    
    
    2009$
    
    
    $Accounts receivable
    
    
    681
    
    
    
    10,542Work in progress
    
    
    1,076
    
    
    
    5,937Contract costs
    
    
    6,210
    
    
    
    8,706Deferred revenue
    
    
    1,012
    
    
    
    3,351
 CGI group Inc.     2010 Annual report
    
    69




---



##### 




    
    The Company has defined contribution pension plans mainly covering
certain European employees. For the years ended September 30, 2010,
2009 and 2008, the plan expense was $5,343,000, $5,053,000 and
$5,303,000, respectively.
    
    The Company maintains a 401(k) defined contribution plan covering
substantially all U.S. employees. Since January 1, 2008, the Company
matches employees contributions to a maximum of US$2,500 per year.
Prior to that date, the maximum was US$1,000 per year. For the years
ended September 30, 2010, 2009 and 2008, the amounts of the Companys
contributions were $8,212,000, $7,557,000 and $5,069,000,
respectively.
    
    The Company maintains two non-qualified deferred compensation plans
covering some of its U.S. management. One of these plans is an
unfunded plan and the non-qualified deferred compensation liability
totaled $2,376,000 as at September 30, 2010 ($3,211,000 at September
30, 2009). The other plan is a funded plan for which 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, included in other long-term assets, composed
of investments, vary with employees contributions and changes in the
value of the investments. The change in liability associated with the
plan is equal to the change of the assets. The assets in the trust and
the associated liabilities totalled $16,318,000 as at September 30,
2010 ($13,108,000 as at September 30, 2009).
    
    The Company maintains a post-employment benefits plan to cover certain
former retired employees associated with the divested Canadian claims
adjusting and risk management services business. The post-employment
benefits liability totalled $7,008,000 as at September 30, 2010
($7,201,000 at September 30, 2009). The Company measures its benefits
liability as at September 30 of each year. An actuarial valuation was
performed at September 30, 2008, and the next actuarial valuation will
be as at September 30, 2011.
 
 A) COMMITMENTS
  $2011
    
    
    135,0032012
    
    
    118,9712013
    
    
    104,2382014
    
    
    88,7392015
    
    
    84,135Thereafter
    
    
    386,748
  $2011
    
    
    54,2372012
    
    
    28,7302013
    
    
    17,6442014
    
    
    5,0732015
    
    
    1,409Thereafter
    
    
    628
  CGI group Inc.     2010 Annual report
    
    70




---



##### 



B) CONTINGENCIES
   C) GUARANTEES
 Sale of assets and business divestitures
  Other transactions
   
 FAIR VALUE
   
    
    Cash and cash equivalents (Note 3), short-term investments, and deferred compensation plan assets (Note 24) are
designated as held for trading as this reflects managements intentions.
    
    Trade accounts receivable (Note 4), work in progress, and funds held for clients are classified as loans and receivables.
    
    Accounts payable and accrued liabilities, accrued compensation, long-term debt, excluding obligations under capital
leases (Note 10), and clients funds obligations are classified as other liabilities.
    CGI group Inc.     2010 Annual report
    
    71




---



##### 



2010
    
    
    2009Recorded as
    
    $
    
    
    $Hedge on net investments in self-sustaining foreign subsidiariesUS$920,000 debt designated as the hedging instrument to the Companys
net investment in U.S. subsidiaries (US$100,000 as at September 30, 2009)
    
    Long term debt
    
    
    947,416
    
    
    
    107,22012,000 debt designated as the hedging instrument to the Companys net
investment in European subsidiaries (12,000 as at September 30, 2009)
    
    Long term debt
    
    
    16,807
    
    
    
    18,823Cash flow hedges on future revenueUS$130,380 foreign currency forward contracts to hedge the variability
    
    Other current assets
    
    
    8,918
    
    
    
    8,303in the expected foreign currency exchange rate between the U.S. dollar
    
    Other long-term assets
    
    
    11,433
    
    
    
    16,148and the Canadian dollar (US$192,660 as at September 30, 2009)US$44,820 foreign currency forward contracts to hedge the variability in
    
    Other current assets
    
    
    2,378
    
    
    
    1,495the expected foreign currency exchange rate between the U.S. dollar
    
    Other long-term assets
    
    
    1,121
    
    
    
    488and the Indian rupee (US$62,940 as at September 30, 2009)
    
    Other long-term liabilities
    
    
    
    
    
    
    78$89,040 foreign currency forward contracts to hedge the variability in
    
    Accrued liabilities
    
    
    1,570
    
    
    
    2,005the expected foreign currency exchange rate between the Canadian dollar
    
    Other long-term liabilities
    
    
    3,396
    
    
    
    7,570and the Indian rupee ($110,315 as at September 30, 2009)Cash flow hedges on Senior U.S. unsecured notesUS$107,000 foreign currency forward contracts (US$107,000 as
    
    Other current asset
    
    
    1,277
    
    
    
    at September 30, 2009)
    
    Other long-term assets
    
    
    763
    
    
    
    5,736
  FAIR VALUE HIERARCHY
      MARKET RISK (INTEREST RATE RISK AND CURRENCY RISK)
  Interest rate risk
  Currency risk
   CGI group Inc.     2010 Annual report
    
    72




---



##### 



2010
    
    
    
    
    
    
    2009U.S. dollar
    
    
    Euro
    
    
    U.S. dollar
    
    
    Euroimpact
    
    
    impact
    
    
    impact
    
    
    impactIncrease in net earnings
    
    
    16,485
    
    
    
    116
    
    
    
    11,739
    
    
    
    938Increase in comprehensive income
    
    
    161,456
    
    
    
    11,130
    
    
    
    79,117
    
    
    
    12,409
 LIQUIDITY RISK
   Between
    
    
    BetweenCarrying
    
    
    Contractual
    
    
    Less than
    
    
    one and
    
    
    two and
    
    
    BeyondAmount
    
    
    cash flows
    
    
    one year
    
    
    two years
    
    
    five years
    
    
    5 years$
    
    
    $
    
    
    $
    
    
    $
    
    
    $
    
    
    $Non-derivative financial liabilitiesAccounts payable and accrued liabilities
    
    
    304,376
    
    
    
    304,376
    
    
    
    304,376
    
    
    
    
    
    
    
    
    
    
    
    Accrued compensation
    
    
    191,486
    
    
    
    191,486
    
    
    
    191,486
    
    
    
    
    
    
    
    
    
    
    
    Senior U.S. unsecured notes
    
    
    109,899
    
    
    
    116,799
    
    
    
    93,113
    
    
    
    1,236
    
    
    
    22,450
    
    
    
    Unsecured committed revolving term facility
    
    
    964,223
    
    
    
    977,861
    
    
    
    9,092
    
    
    
    968,769
    
    
    
    
    
    
    
    Obligations repayable in blended monthly instalments
    
    
    22,049
    
    
    
    23,961
    
    
    
    6,292
    
    
    
    5,052
    
    
    
    11,211
    
    
    
    1,406Clients funds obligations
    
    
    248,695
    
    
    
    248,695
    
    
    
    248,695
    
    
    
    
    
    
    
    
    
    
    
    Derivative financial liabilitiesCash flow hedge on future revenueOutflow
    
    
    4,966
    
    
    
    5,562
    
    
    
    1,637
    
    
    
    1,740
    
    
    
    2,185
    
    
    
    (Inflow)
    
    
    (23,850
    )
    
    
    (24,658
    )
    
    
    (11,447
    )
    
    
    (7,323
    )
    
    
    (5,888
    )
    
    
    1,821,844
    
    
    
    1,844,082
    
    
    
    843,244
    
    
    
    969,474
    
    
    
    29,958
    
    
    
    1,406
  CGI group Inc.     2010 Annual report
    
    73




---



##### 



CREDIT RISK
     2010
    
    
    2009$
    
    
    $Not past due
    
    
    301,106
    
    
    
    267,784Past due 1-30 days
    
    
    28,864
    
    
    
    9,183Past due 31-60 days
    
    
    5,738
    
    
    
    13,086Past due 61-90 days
    
    
    5,018
    
    
    
    4,979Past due more than 90 days
    
    
    20,147
    
    
    
    33,737360,873
    
    
    
    328,769Allowance for doubtful accounts
    
    
    (11,524
    )
    
    
    (11,122
    )349,349
    
    
    
    317,647
  CGI group Inc.     2010 Annual report
    
    74




---



##### 




    
    Debt/Capitalization
    
    Net Debt/Capitalization
    
    Debt/EBITDA
   
    
    A leverage ratio, which is the ratio of total debt to EBITDA for the four most recent quarters.
    
    An interest and rent coverage ratio, which is the ratio of the EBITDAR for the four most recent quarters to the total
interest expense and the operating rentals in the same periods. EBITDAR, a non-GAAP measure, is calculated as EBITDA plus
rent expense.
    
    A minimum net worth requirement, whereby shareholders equity, excluding foreign exchange translation adjustments included
in accumulated other comprehensive loss, cannot be less than a specified threshold.
   
    
    A leverage ratio, which is the ratio of total debt adjusted for operating rent to EBITDAR for the four most recent quarters.
    
    A fixed charges coverage ratio, which is the ratio of the EBITDAR to the sum of interest expense plus operating rentals for
the period for the four most recent quarters.
    
    A minimum net worth requirement, whereby shareholders equity, excluding foreign exchange translation adjustments included
in accumulated other comprehensive loss, cannot be less than a specified threshold.
   CGI group Inc.     2010 Annual report
    
    75




---



##### 



2010
    
    
    2009
    
    
    2008(Restated
    
    
    (RestatedNote 2a)
    
    
    Note 2a)$
    
    
    $
    
    
    $Reconciliation of net earnings:Net earnings  Canadian GAAP
    
    
    362,766
    
    
    
    317,205
    
    
    
    294,000Adjustments for:Stock-based compensation (i)
    
    
    (213
    )
    
    
    (3,759
    )
    
    
    (4,127
    )Warrants (ii)
    
    
    863
    
    
    
    1,404
    
    
    
    (5,721
    )Reversal of income tax provision (iii)
    
    
    
    
    
    
    (517
    )
    
    
    (7,452
    )Other (iv)
    
    
    (140
    )
    
    
    594
    
    
    
    216Net earnings  U.S. GAAP
    
    
    363,276
    
    
    
    314,927
    
    
    
    276,916Attributable to:Shareholders of CGI Group Inc.
    
    
    362,896
    
    
    
    314,188
    
    
    
    276,048Non-controlling interest
    
    
    380
    
    
    
    739
    
    
    
    868Basic earnings per share attributable to shareholders of CGI Group Inc.  U.S. GAAP
    
    
    1.27
    
    
    
    1.02
    
    
    
    0.87Diluted earnings per share attributable to shareholders of CGI Group Inc.  U.S. GAAP
    
    
    1.24
    
    
    
    1.01
    
    
    
    0.86Net earnings  U.S. GAAP
    
    
    363,276
    
    
    
    314,927
    
    
    
    276,916Other comprehensive (loss) income
    
    
    (35,756
    )
    
    
    35,434
    
    
    
    64,649Comprehensive income  U.S. GAAP
    
    
    327,520
    
    
    
    350,361
    
    
    
    341,565Attributable to:Shareholders of CGI Group Inc.
    
    
    327,140
    
    
    
    349,622
    
    
    
    340,697Non-controlling interest
    
    
    380
    
    
    
    739
    
    
    
    868Reconciliation of shareholders equity:Equity attributable to shareholders of CGI Group Inc.  Canadian GAAP
    
    
    2,152,631
    
    
    
    2,275,254
    
    
    
    1,997,001Adjustments for:Stock-based compensation (ix)
    
    
    58,411
    
    
    
    58,411
    
    
    
    58,411Warrants (ii)
    
    
    (7,125
    )
    
    
    (7,988
    )
    
    
    (9,392
    )Reversal of income tax provision (iii)
    
    
    (7,969
    )
    
    
    (7,969
    )
    
    
    (7,452
    )Unearned compensation (v)
    
    
    (3,694
    )
    
    
    (3,694
    )
    
    
    (3,694
    )Integration costs (vi)
    
    
    (6,606
    )
    
    
    (6,606
    )
    
    
    (6,606
    )Goodwill (vii)
    
    
    28,078
    
    
    
    28,078
    
    
    
    28,078Income taxes and adjustment for change in accounting policy (viii)
    
    
    9,715
    
    
    
    9,715
    
    
    
    9,715Other (iv)
    
    
    (3,405
    )
    
    
    (3,265
    )
    
    
    (3,859
    )Equity attributable to shareholders of CGI Group Inc.  U.S. GAAP
    
    
    2,220,036
    
    
    
    2,341,936
    
    
    
    2,062,202Equity attributable to non-controlling interest  Canadian and U.S. GAAP
    
    
    6,452
    
    
    
    6,342
    
    
    
    5,922
 CGI group Inc.     2010 Annual report
    
    76




---



##### 



(i) Stock-based compensation
  (ii) Warrants
   (iii) Reversal of income tax provision
  (iv) Capitalization of intangible assets
  (v) Unearned compensation
  (vi) Integration costs
  (vii) Goodwill
  (viii) Income taxes and adjustment for change in accounting policy
  (ix) Stock-based compensation
  CGI group Inc.     2010 Annual report
    
    77




---



##### 



(x) Recent accounting changes
   (xi) Future accounting changes
  CGI group Inc.     2010 Annual report
    
    78




---



##### 




    
    Provide a narrative explanation of the consolidated financial statements through the eyes of management;
    
    Provide the context within which the consolidated financial statements should be analyzed, by giving enhanced disclosure about
the dynamics and trends of the Companys business; and
    
    Provide information to assist the reader in ascertaining the likelihood that past performance is indicative of future performance.
  Corporate Overview
 Financial Review
 Liquidity and Capital Resources
 Critical Accounting Estimates, Future Accounting Changes, and Risks and Uncertainties
     CGI group Inc.     2010 Annual report
    
    5




---



##### 



1.
    
    Earnings from continuing operations before acquisition-related and integration costs,
interest on long-term debt, interest income, other (income) expenses, gain on sale of capital
assets, and income tax expense (adjusted EBIT);2.
    
    Constant currency growth;3.
    
    Days Sales Outstanding (DSO);4.
    
    Return on Invested Capital (ROIC);5.
    
    Return on Equity (ROE); and6.
    
    Net Debt to Capitalization ratio.
     TRANSFER AGENT
 INVESTOR RELATIONS
 CGI group Inc.     2010 Annual report
    
    6




---



##### 



ABOUT CGI
  
    
    Consulting CGI provides a full range of IT and management
consulting services, including business transformation, IT strategic
planning, business process engineering and systems architecture.
    
    Systems integration CGI integrates and customizes leading
technologies and software applications to create IT systems that
respond to clients strategic needs.
    
    Management of IT and business functions (outsourcing) Clients
delegate entire or partial responsibility for their IT or business
functions to CGI to achieve significant savings and access the best
suited technology, while retaining control over strategic IT and
business functions. As part of such agreements, we implement our
quality processes and practices to improve the efficiency of the
clients operations. We also integrate clients operations into our
technology network. Finally, we may take on specialized professionals
from our clients, enabling our clients to focus on key operations.
Services provided as part of an outsourcing contract may include
development and integration of new projects and applications;
applications maintenance and support; technology infrastructure
management (enterprise and end-user computing and network services);
transaction and business processing such as payroll, insurance
processing, and document management services. Outsourcing contracts
typically have terms from five to ten years and may be renewable.
     VISION AND STRATEGY
      CGI group Inc.     2010 Annual report
    
    7




---



##### 



COMPETITIVE ENVIRONMENT
       2010 HIGHLIGHTS
  
    
    Bookings of $4.6 billion;
    
    Book-to-bill ratio of 124%;
    
    Constant currency growth of 3.4%;
    
    Adjusted EBIT margin remained strong at 13.7%;
    
    Basic and diluted EPS from continuing operations grew by 23.3% and 21.6% respectively;
    
    Return on equity reached 16.4%;
    
    Return on invest capital remains high at 16.3%;
    
    Cash provided by continuing operating activities remained strong, representing 14.8% of revenue; and
    
    Repurchased 35.6 million Class A shares of the Company.
 Acquisition of Stanley, Inc.
   CGI group Inc.     2010 Annual report
    
    8




---



##### 



Capital Stock and Options Outstanding (as at November 3, 2010)
 FY 2010 Trading Summary
  TSX
    
    (CDN$)Open:
    
    
    12.50High:
    
    
    16.80Low:
    
    
    12.07Close:
    
    
    15.49Canadian* average daily trading volumes:
    
    
    1,339,325
 *
    
    Includes the average daily volumes of both the TSX and Alternative Trading Systems. NYSE
    
    (US$)Open:
    
    
    11.66High:
    
    
    16.40Low:
    
    
    11.11Close:
    
    
    15.03U.S. average daily trading volumes:
    
    
    194,369
 Stock Performance
  
 Share Repurchase Program
   CGI group Inc.     2010 Annual report
    
    9




---



##### 



KEY PERFORMANCE MEASURES
  Profitability
    
    Adjusted EBIT  is a measure of earnings before
items not directly related to the cost of operations,
such as financing costs, acquisition-related costs and
income taxes (see definition on page 5). Management
believes this best reflects the profitability of our
operations.
    Diluted earnings per share from continuing operations
attributable to shareholders of CGI  is a measure of
earnings generated for shareholders on a per share
basis, assuming all in-the-money options outstanding are
exercised.Liquidity
    
    Cash provided by continuing operating activities 
is a measure of cash generated from managing our
day-to-day business operations. We believe strong
operating cash flow is indicative of financial
flexibility, allowing us to execute our corporate
strategy.
    Days sales outstanding  is the average number of
days to convert our trade receivables and work in
progress into cash. Management tracks this metric
closely to ensure timely collection, healthy liquidity,
and is committed to maintaining a DSO below its 45-day
target.Growth
    
    Constant currency growth  is a measure of revenue
growth before foreign currency impacts. We believe that
it is helpful to adjust revenue to exclude the impact of
currency fluctuations to better understand trends in the
business.
    Backlog  represents managements best estimate of
revenue to be realized in the future based on the terms
of respective client agreements active at a point in
time.
    Book-to-Bill ratio  is a measure of the proportion
of contract wins to our revenue in the period. This
metric allows management to monitor the companys
business development efforts to ensure we grow our
backlog and our business over time. Management remains
committed to maintaining a target ratio greater than
100% over a 12-month period. Management believes that
the longer period is a more effective measure as the
size and timing of bookings could cause this measurement
to fluctuate significantly if taken for only a
three-month period.Capital Structure
    
    Net Debt to Capitalization ratio  is a measure of
our level of financial leverage net of our cash and cash
equivalents and short-term investment position.
Management uses this metric to monitor the proportion of
debt versus capital used to finance our operations and
it provides insight into our financial strength.
    Return on Equity  is a measure of the rate of
return on the ownership interest of our shareholders.
Management looks at ROE to measure its efficiency at
generating profits for the Companys shareholders and
how well the Company uses the invested funds to generate
earnings growth.
    Return on Invested Capital  is a measure of the
Companys efficiency at allocating the capital under its
control to profitable investments. Management examines
this ratio to assess how well it is using its money to
generate returns.
 CGI group Inc.     2010 Annual report
    
    10




---



##### 



SELECTED ANNUAL INFORMATION
 As at and for the years ended September 30
    
    
    
    
    
    
    
    
    
    
    
    
    
    Change
    
    
    Change(in thousands of dollars unless otherwise noted)
    
    2010
    
    
    2009
    
    
    2008
    
    
    2010/2009
    
    
    2009/2008GrowthBacklog1 (in millions of dollars)
    
    
    13,320
    
    
    
    10,893
    
    
    
    11,645
    
    
    
    22.3
    %
    
    
    -6.5
    %Bookings (in millions of dollars)
    
    
    4,643
    
    
    
    4,059
    
    
    
    4,145
    
    
    
    14.4
    %
    
    
    -2.1
    %Book-to-bill ratio
    
    
    124
    %
    
    
    106
    %
    
    
    112
    %Revenue
    
    
    3,732,117
    
    
    
    3,825,161
    
    
    
    3,705,863
    
    
    
    -2.4
    %
    
    
    3.2
    %Year-over-year growth
    
    
    -2.4
    %
    
    
    3.2
    %
    
    
    2.0
    %Constant currency growth2
    
    
    3.4
    %
    
    
    -1.9
    %
    
    
    5.3
    %ProfitabilityAdjusted EBIT3
    
    
    511,902
    
    
    
    460,741
    
    
    
    430,486
    
    
    
    11.1
    %
    
    
    7.0
    %Adjusted EBIT margin
    
    
    13.7
    %
    
    
    12.0
    %
    
    
    11.6
    %Earnings from continuing operations
    
    
    362,766
    
    
    
    315,897
    
    
    
    299,134
    
    
    
    14.8
    %
    
    
    5.6
    %Earnings from continuing operations margin
    
    
    9.7
    %
    
    
    8.3
    %
    
    
    8.1
    %Net earnings
    
    
    362,766
    
    
    
    317,205
    
    
    
    294,000
    
    
    
    14.4
    %
    
    
    7.9
    %Net earnings margin
    
    
    9.7
    %
    
    
    8.3
    %
    
    
    7.9
    %Basic EPS from continuing operations (in dollars)4
    
    
    1.27
    
    
    
    1.03
    
    
    
    0.94
    
    
    
    23.3
    %
    
    
    9.6
    %Diluted EPS from continuing operations (in dollars)4
    
    
    1.24
    
    
    
    1.02
    
    
    
    0.92
    
    
    
    21.6
    %
    
    
    10.9
    %Basic EPS (in dollars)4
    
    
    1.27
    
    
    
    1.03
    
    
    
    0.92
    
    
    
    23.3
    %
    
    
    12.0
    %Diluted EPS (in dollars)4
    
    
    1.24
    
    
    
    1.02
    
    
    
    0.90
    
    
    
    21.6
    %
    
    
    13.3
    %LiquidityCash provided by continuing operating activities
    
    
    552,367
    
    
    
    630,244
    
    
    
    355,670
    
    
    
    -12.4
    %
    
    
    77.2
    %Days sales outstanding5
    
    
    47
    
    
    
    39
    
    
    
    50
    
    
    
    20.5
    %
    
    
    -22.0
    %Capital structureNet debt to capitalization ratio6
    
    
    30.6
    %
    
    
    n/a
    
    
    
    14.0
    %Return on equity7
    
    
    16.4
    %
    
    
    14.2
    %
    
    
    15.6
    %Return on invested capital8
    
    
    16.3
    %
    
    
    14.0
    %
    
    
    14.0
    %Balance sheetCash & cash equivalents and short-term investments
    
    
    141,020
    
    
    
    343,427
    
    
    
    50,134
    
    
    
    -58.9
    %
    
    
    585.0
    %Total assets
    
    
    4,607,191
    
    
    
    3,899,910
    
    
    
    3,680,558
    
    
    
    18.1
    %
    
    
    6.0
    %Long-term financial liabilities9
    
    
    1,071,948
    
    
    
    302,741
    
    
    
    326,916
    
    
    
    254.1
    %
    
    
    -7.4
    %
 
 1
    
    Backlog includes new contract wins, extensions and renewals (bookings), partially offset
by the backlog consumed during the year as a result of client work performed and adjustments
related to the volume, cancellation and/or the impact of foreign currencies to our existing
contracts. Backlog incorporates estimates from management that are subject to change.2
    
    Constant currency growth is adjusted to remove the impact of foreign currency exchange rate fluctuations. Please refer to page 13 for details.3
    
    Adjusted EBIT is a non-GAAP measure for which we provide the reconciliation to its closest GAAP measure on page 17.4
    
    Earnings per share (EPS) amounts are attributable to shareholders of CGI. Quarterly EPS amounts may not add up to the annual amount due to rounding.5
    
    Days sales outstanding is obtained by subtracting deferred revenue from trade accounts receivable and work in progress; the result is divided by the quarters revenue over 90 days.6
    
    The net debt to capitalization ratio represents the proportion of long-term debt, net of cash
and cash equivalents and short-term investments (net debt) over the sum of shareholders
equity attributable to shareholders of CGI and long-term debt. Net debt and capitalization are
both net of the fair value of forward contracts. At the end of fiscal 2009, the net debt to
capitalization ratio was negative (a net cash position) and therefore shown as not applicable
(n/a).7
    
    The return on equity ratio is calculated as the proportion of earnings from continuing
operations for the year over the last four quarters average equity attributable to
shareholders of CGI.8
    
    The return on invested capital ratio represents the proportion of the after-tax adjusted EBIT
for the year over the last four quarters average invested capital, which is defined as the
sum of equity attributable to shareholders of CGI and debt less cash and cash equivalents and
short-term investments, net of the impact of the fair value of forward contracts.9
    
    Long-term financial liabilities include the long-term portion of debt and capital leases,
integration and restructuring costs, asset retirement obligations, deferred compensation and
any forward contracts in a liability position. CGI group Inc.     2010 Annual report
    
    11




---



##### 



FINANCIAL REVIEW
Bookings and Book-to-Bill Ratio
    CGI group Inc.     2010 Annual report
    
    12




---



##### 



SIGNIFICANT BOOKINGS IN THE YEAR
 Announcement Date
    
    Client
    
    Duration
    
    ValueOctober 5, 2009
    
    U.S. Environmental Protection Agency (EPA)
    
    Seven years
    
    Not releasedCGI Federal will deliver IT infrastructure support services to the EPA under the newly established ITS-EPA II program and will assist the Office of
Environmental Information in achieving more innovative, agile, and scalable IT services for the ITS-EPA II program. The seven-year agreement, awarded
to seven vendors includes a US$955 million ceiling value over
the BPAs period of performance and positions.November 3, 2009
    
    Yellow Pages Group
    
    10-year extension
    
    $100 millionCGI will manage the applications and infrastructure of Yellow Pages Groups computer network, as well as other projects, namely business intelligence
and the optimization of the companys research tools.November 5, 2009
    
    U.S. Department of Housing and Urban Development (HUD)
    
    One year renewal
    
    US$58.1 millionCGI administers HUD multi-family housing programs in California, Florida, New York, Ohio and Washington, DC, in conjunction with its state and local
housing agency partners.December 15, 2009
    
    North American financial institutions
    
    New contracts & renewals
    
    $1.1 billionCGI has signed new contracts and renewals with North American financial institutions totaling $1.1 billion during its fiscal 2010 first quarter
(October-December). Services provided under these new deals include systems integration, application maintenance, IP-based solutions as well as long
term, multi-year managed services contracts.January 19, 2010
    
    U.S. Department of State and U.S. Agency for International Development
    
    10 years
    
    US$395 millionCGI will provide systems integration, consulting services, and operational support for more than 5,000 Joint Financial Management System users in more
than 300 posts and missions around the world.April 6, 2010
    
    Telekomunikacja Polska Group
    
    Three years
    
    Not releasedCGI frameworks will be deployed to help TP Group consolidate its current multi application, multi vendor environment to improve overall time to market
and total cost of ownership.May 4, 2010
    
    California Department of Health Care Services
    
    10 years
    
    US$168 millionCGI partners with ACS to deliver enhanced fiscal intermediary administrative services and an advanced Medicaid Management Information System for
Californias Department of Health Care Services.May 18, 2010
    
    Centers for Medicare & Medicaid Services
    
    Five years
    
    US$73.2 millionCGI will continue the modernization, application management, and maintenance efforts on three external websites that provide information to 44 million
beneficiaries and millions more healthcare providers and other stakeholders.June 17, 2010
    
    State of Maine
    
    11 years
    
    Not releasedCGI will deliver managed application services for the States AMS Advantage® enterprise resource planning system which supports financial management
and procurement operations. CGI will host the States AMS Advantage ERP system and provide disaster recovery services. CGI will also manage operations
of all technical aspects of the system during the term of the contract.June 29, 2010
    
    Atlantic Lottery Corporation
    
    Seven years
    
    $125 millionCGI will manage Atlantic Lotterys data center and provide related application support and development.July 7, 2010
    
    The Beer Store
    
    Seven years
    
    Not releasedThis new agreement establishes CGI as the infrastructure IT supplier for The Beer Store, and also encompasses infrastructure services for Brewers
Distributor Ltd. (BDL), a wholesale distributor of beer and the collector of returnable, refillable and recyclable beer containers within the four
Western Canadian Provinces, as well as Northwest Territories and the Yukon.July 20, 2010
    
    Rexel Group
    
    Six years
    
    $50 millionThis new agreement, which will support productivity improvements, establishes CGI as not only one of the preferred IT suppliers for Rexels Canadian
operations, but also for Rexels US operations.July 29, 2010
    
    Manulife Financial
    
    Until 2013
    
    Not releasedUnder the contract renewal, CGI will continue to leverage its Halifax delivery center to provide systems development, maintenance and integration
services to Manulife Financial.August 9, 2010
    
    eHealth Ontario
    
    Six years
    
    $46 millionCGI will design, build, implement and manage a province-wide chronic disease management system and portal which will be used initially to better manage
diabetes care, a top clinical priority for eHealth Ontario.August 11, 2010
    
    Plexxus
    
    Five years
    
    $34 millionCGI will support Plexxus in the design, build, implementation and management of on-going IT services including SAP supply chain and finance systems for
Plexxus, a not-for-profit organization and its 12 member hospitals.September 30, 2010
    
    U.S. General Services Administration
    
    Five years
    
    US$46 millionUnder the Data.gov Dataset Hosting Services BPA, CGI will provide hosting services for this important government information, as well as, technology
tools for dataset analysis, and professional services.October 5, 2010
    
    Bombardier Aerospace
    
    Five years
    
    US$160 millionCGI will be responsible for delivering various types of IT infrastructure services to Bombardier Aerospace, including end-user device support, service
desk, telephony and local area network. CGI is also responsible for Canadian legacy application support. This contract was signed prior to but
announced subsequent to our year-end.
 CGI group Inc.     2010 Annual report
    
    13




---



##### 



Foreign Exchange
   Change
    
    
    Change2010
    
    
    2009
    
    
    2008
    
    
    2010/2009
    
    
    2009/2008U.S. dollar
    
    
    1.0298
    
    
    
    1.0722
    
    
    
    1.0599
    
    
    
    -4.0
    %
    
    
    1.2
    %Euro
    
    
    1.4006
    
    
    
    1.5686
    
    
    
    1.4923
    
    
    
    -10.7
    %
    
    
    5.1
    %Indian rupee
    
    
    0.0231
    
    
    
    0.0223
    
    
    
    0.0228
    
    
    
    3.6
    %
    
    
    -2.2
    %British pound
    
    
    1.6198
    
    
    
    1.7158
    
    
    
    1.8868
    
    
    
    -5.6
    %
    
    
    -9.1
    %
  Change
    
    
    Change2010
    
    
    2009
    
    
    2008
    
    
    2010/2009
    
    
    2009/2008U.S. dollar
    
    
    1.0407
    
    
    
    1.1804
    
    
    
    1.0093
    
    
    
    -11.8
    %
    
    
    17.0
    %Euro
    
    
    1.4116
    
    
    
    1.5944
    
    
    
    1.5176
    
    
    
    -11.5
    %
    
    
    5.1
    %Indian rupee
    
    
    0.0226
    
    
    
    0.0242
    
    
    
    0.0246
    
    
    
    -6.6
    %
    
    
    -1.6
    %British pound
    
    
    1.6227
    
    
    
    1.8235
    
    
    
    1.9877
    
    
    
    -11.0
    %
    
    
    -8.3
    %
 Revenue Distribution
  (IMAGE)
    
    (IMAGE)
    
    (IMAGE)
 By Contract Types
    
    
    
    
    
    By Geography
    
    By Vertical MarketManagement of IT and business
functions 
(outsourcing)
    
    
    61
    %
    
    
    
    
    
    
    
    Government and healthcare
    
    
    37
    %Financial services
    
    
    33
    %IT services
    
    
    50
    %
    
    Canada
    
    
    56
    %
    
    Telecommunications and utilities
    
    
    15
    %Business process services
    
    
    11
    %
    
    U.S.
    
    
    38
    %
    
    Retail and distribution
    
    
    10
    %Systems integration and consulting
    
    
    39
    %
    
    Europe
    
    
    6
    %
    
    Manufacturing
    
    
    5
    %
 Client Concentration
  CGI group Inc.     2010 Annual report
    
    14




---



##### 



Revenue Variation and Revenue by Segment
  For the years ended September 30
    
    
    
    
    
    
    
    
    
    
    
    
    
    Change
    
    
    Change(in 000 of dollars except for percentage)
    
    2010
    
    
    2009
    
    
    2008
    
    
    2010/2009
    
    
    2009/2008Total CGI Revenue
    
    
    3,732,117
    
    
    
    3,825,161
    
    
    
    3,705,863
    
    
    
    -2.4
    %
    
    
    3.2
    %Variation prior to foreign currency impact
    
    
    3.4
    %
    
    
    -1.9
    %
    
    
    5.3
    %Foreign currency impact
    
    
    -5.8
    %
    
    
    5.1
    %
    
    
    -3.3
    %Variation over previous period
    
    
    -2.4
    %
    
    
    3.2
    %
    
    
    2.0
    %CanadaRevenue prior to foreign currency impact
    
    
    2,121,123
    
    
    
    2,179,659
    
    
    
    2,335,566
    
    
    
    -2.7
    %
    
    
    -7.0
    %Foreign currency impact
    
    
    (8,711
    )Canada revenue
    
    
    2,112,412
    
    
    
    2,179,659
    
    
    
    2,335,566
    
    
    
    -3.1
    %
    
    
    -6.7
    %U.S.Revenue prior to foreign currency impact
    
    
    1,588,746
    
    
    
    1,361,787
    
    
    
    1,086,513
    
    
    
    16.7
    %
    
    
    8.5
    %Foreign currency impact
    
    
    (188,347
    )U.S. revenue
    
    
    1,400,399
    
    
    
    1,361,787
    
    
    
    1,086,513
    
    
    
    2.8
    %
    
    
    25.3
    %EuropeRevenue prior to foreign currency impact
    
    
    245,522
    
    
    
    283,715
    
    
    
    283,784
    
    
    
    -13.5
    %
    
    
    0.4
    %Foreign currency impact
    
    
    (26,216
    )Europe revenue
    
    
    219,306
    
    
    
    283,715
    
    
    
    283,784
    
    
    
    -22.7
    %
    
    
    0.0
    %
   CANADA
   U.S.
   CGI group Inc.       2010 Annual report
    
    15




---



##### 



EUROPE
   OPERATING EXPENSES
 For years ended September 30
    
    
    
    
    
    % of
    
    
    
    
    
    
    % of
    
    
    
    
    
    
    % of(in 000 of dollars except for percentage)
    
    2010
    
    
    Revenue
    
    
    2009
    
    
    Revenue
    
    
    2008
    
    
    RevenueCosts of services, selling and administrative
    
    
    3,025,823
    
    
    
    81.1
    %
    
    
    3,170,406
    
    
    
    82.9
    %
    
    
    3,110,760
    
    
    
    83.9
    %Foreign exchange (gain) loss
    
    
    (916
    )
    
    
    0.0
    %
    
    
    (1,747
    )
    
    
    0.0
    %
    
    
    1,445
    
    
    
    0.0
    %Total amortization
    
    
    195,308
    
    
    
    5.2
    %
    
    
    195,761
    
    
    
    5.1
    %
    
    
    163,172
    
    
    
    4.4
    %Capital assets
    
    
    72,067
    
    
    
    1.9
    %
    
    
    61,412
    
    
    
    1.6
    %
    
    
    43,455
    
    
    
    1.2
    %Contract costs related to transition costs
    
    
    30,396
    
    
    
    0.8
    %
    
    
    22,377
    
    
    
    0.6
    %
    
    
    17,925
    
    
    
    0.5
    %Other intangible assets
    
    
    92,845
    
    
    
    2.5
    %
    
    
    100,829
    
    
    
    2.6
    %
    
    
    101,792
    
    
    
    2.7
    %Impairment of other intangible assets
    
    
    
    
    
    
    0.0
    %
    
    
    11,143
    
    
    
    0.3
    %
    
    
    
    
    
    
    0.0
    %
 Costs of Services, Selling and Administrative
   Foreign Exchange (Gain) Loss
  Amortization
    CGI group Inc.       2010 Annual report
    
    16




---



##### 



ADJUSTED EBIT BY SEGMENT
 For the years ended September 30
    
    
    
    
    
    
    
    
    
    
    
    
    
    Change
    
    
    Change(in 000 of dollars except for percentage)
    
    2010
    
    
    2009
    
    
    2008
    
    
    2010/2009
    
    
    2009/2008Canada
    
    
    375,998
    
    
    
    320,702
    
    
    
    332,827
    
    
    
    17.2
    %
    
    
    -3.6
    %As a percentage of Canada revenue
    
    
    17.8
    %
    
    
    14.7
    %
    
    
    14.3
    %U.S.
    
    
    192,305
    
    
    
    171,965
    
    
    
    129,401
    
    
    
    11.8
    %
    
    
    32.9
    %As a percentage of U.S. revenue
    
    
    13.7
    %
    
    
    12.6
    %
    
    
    11.9
    %Europe
    
    
    89
    
    
    
    18,639
    
    
    
    24,692
    
    
    
    -99.5
    %
    
    
    -24.5
    %As a percentage of Europe revenue
    
    
    0.0
    %
    
    
    6.6
    %
    
    
    8.7
    %Corporate
    
    
    (56,490
    )
    
    
    (50,565
    )
    
    
    (56,434
    )
    
    
    11.7
    %
    
    
    -10.4
    %As a percentage of revenue
    
    
    -1.5
    %
    
    
    -1.3
    %
    
    
    -1.5
    %Adjusted EBIT
    
    
    511,902
    
    
    
    460,741
    
    
    
    430,486
    
    
    
    11.1
    %
    
    
    7.0
    %Adjusted EBIT margin
    
    
    13.7
    %
    
    
    12.0
    %
    
    
    11.6
    %
 CANADA
   U.S.
   EUROPE
   CGI group Inc.       2010 Annual report
    
    17




---



##### 



Corporate
 For the years ended September 30
    
    
    
    
    
    
    
    
    
    
    
    
    
    Change
    
    
    Change(in 000 of dollars except for percentage)
    
    2010
    
    
    2009
    
    
    2008
    
    
    2010/2009
    
    
    2009/2008Corporate adjusted EBIT
    
    
    (56,490
    )
    
    
    (50,565
    )
    
    
    (56,434
    )
    
    
    (5,925
    )
    
    
    5,869As a percentage of revenue
    
    
    -1.5
    %
    
    
    -1.3
    %
    
    
    -1.5
    %Foreign exchange (gain) loss
    
    
    (916
    )
    
    
    (1,747
    )
    
    
    1,445
    
    
    
    831
    
    
    
    (3,192
    )Corporate adjusted EBIT excluding foreign exchange (gain) loss
    
    
    (57,406
    )
    
    
    (52,312
    )
    
    
    (54,989
    )
    
    
    (5,094
    )
    
    
    2,677As a percentage of revenue
    
    
    -1.5
    %
    
    
    -1.4
    %
    
    
    -1.5
    %
    EARNINGS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
  For the years ended September 30
    
    
    
    
    
    % of
    
    
    
    
    
    
    % of
    
    
    
    
    
    
    % of(in 000 of dollars except for percentage)
    
    2010
    
    
    Revenue
    
    
    2009
    
    
    Revenue
    
    
    2008
    
    
    RevenueAdjusted EBIT
    
    
    511,902
    
    
    
    13.7
    %
    
    
    460,741
    
    
    
    12.0
    %
    
    
    430,486
    
    
    
    11.6
    %Acquisition-related and integration costs
    
    
    20,883
    
    
    
    0.6
    %
    
    
    
    
    
    
    0.0
    %
    
    
    
    
    
    
    0.0
    %Interest on long-term debt
    
    
    17,123
    
    
    
    0.5
    %
    
    
    18,960
    
    
    
    0.5
    %
    
    
    27,284
    
    
    
    0.7
    %Interest income
    
    
    (2,419
    )
    
    
    -0.1
    %
    
    
    (2,908
    )
    
    
    -0.1
    %
    
    
    (5,570
    )
    
    
    -0.2
    %Other (income) expenses
    
    
    (952
    )
    
    
    0.0
    %
    
    
    3,569
    
    
    
    0.1
    %
    
    
    3,341
    
    
    
    0.1
    %Gain on sale of capital assets
    
    
    (469
    )
    
    
    0.0
    %
    
    
    
    
    
    
    0.0
    %
    
    
    
    
    
    
    0.0
    %Earnings from continuing operations

before income taxes
    
    
    477,736
    
    
    
    12.8
    %
    
    
    441,120
    
    
    
    11.5
    %
    
    
    405,431
    
    
    
    10.9
    %
 Acquisition-related and Integration Costs
  Interest on Long-Term Debt
  Interest Income
  Other (Income) Expenses
  CGI group Inc.       2010 Annual report
    
    18




---



##### 



Income Taxes
    NET EARNINGS
  For the years ended September 30
    
    
    
    
    
    
    
    
    
    
    
    
    
    Change
    
    
    Change(in 000 of dollars unless otherwise indicated)
    
    2010
    
    
    2009
    
    
    2008
    
    
    2010/2009
    
    
    2009/2008Earnings from continuing operations
    
    
    362,766
    
    
    
    315,897
    
    
    
    299,134
    
    
    
    14.8
    %
    
    
    5.6
    %Margin
    
    
    9.7
    %
    
    
    8.3
    %
    
    
    8.1
    %Earnings (loss) from discontinued operations,
net of income taxes
    
    
    
    
    
    
    1,308
    
    
    
    (5,134
    )
    
    
    -100.0
    %
    
    
    -125.5
    %Net earnings
    
    
    362,766
    
    
    
    317,205
    
    
    
    294,000
    
    
    
    14.4
    %
    
    
    7.9
    %Margin
    
    
    9.7
    %
    
    
    8.3
    %
    
    
    7.9
    %Weighted average number of sharesClass A subordinate shares and Class B shares (basic)
    
    
    284,826,257
    
    
    
    306,853,077
    
    
    
    317,604,899
    
    
    
    -7.2
    %
    
    
    -3.4
    %Class A subordinate shares and Class B shares (diluted)
    
    
    292,919,950
    
    
    
    310,345,241
    
    
    
    322,804,287
    
    
    
    -5.6
    %
    
    
    -3.9
    %Earnings per share (in dollars)1Basic EPS from continuing operations
    
    
    1.27
    
    
    
    1.03
    
    
    
    0.94
    
    
    
    23.3
    %
    
    
    9.6
    %Diluted EPS from continuing operations
    
    
    1.24
    
    
    
    1.02
    
    
    
    0.92
    
    
    
    21.6
    %
    
    
    10.9
    %Basic EPS
    
    
    1.27
    
    
    
    1.03
    
    
    
    0.92
    
    
    
    23.3
    %
    
    
    12.0
    %Diluted EPS
    
    
    1.24
    
    
    
    1.02
    
    
    
    0.90
    
    
    
    21.6
    %
    
    
    13.3
    %
  1
    
    EPS amounts are attributable to shareholders of CGI. Quarterly EPS amounts may not add up to
the annual amount due to rounding.
     CGI group Inc.       2010 Annual report
    
    19




---



##### 



Non-Controlling Interest
     For the years ended September 30
    
    
    
    
    
    
    
    
    
    
    
    
    
    Change
    
    
    Change(in 000 of dollars)
    
    2010
    
    
    2009
    
    
    2008
    
    
    2010/2009
    
    
    2009/2008Cash provided by continuing operating activities
    
    
    552,367
    
    
    
    630,244
    
    
    
    355,670
    
    
    
    (77,877
    )
    
    
    274,574Cash used in continuing investing activities
    
    
    (1,024,914
    )
    
    
    (127,585
    )
    
    
    (93,579
    )
    
    
    (897,329
    )
    
    
    (34,006
    )Cash provided by (used in) continuing financing activities
    
    
    267,311
    
    
    
    (198,227
    )
    
    
    (300,166
    )
    
    
    465,538
    
    
    
    101,939Effect of foreign exchange rate changes on cash and cash
equivalents from continuing operations
    
    
    (10,367
    )
    
    
    (11,300
    )
    
    
    398
    
    
    
    933
    
    
    
    (11,698
    )Net (decrease) increase in cash and cash equivalents
from continuing operations
    
    
    (215,603
    )
    
    
    293,132
    
    
    
    (37,677
    )
    
    
    (508,735
    )
    
    
    330,809
 CASH PROVIDED BY CONTINUING OPERATING ACTIVITIES
   CASH USED IN CONTINUING INVESTING ACTIVITIES
        CGI group Inc.       2010 Annual report
    
    20




---



##### 



CASH USED IN CONTINUING FINANCING ACTIVITIES
       EFFECT OF FOREIGN EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS FROM CONTINUING
OPERATIONS
    Payments due by periodLess than
    
    
    2nd and
    
    
    4th and
    
    
    Years
    
    
    AfterCommitment type (in 000s of dollars)
    
    Total
    
    
    1 year
    
    
    3rd years
    
    
    5th years
    
    
    6 to 10
    
    
    10 yearsLong-term debt
    
    
    1,096,171
    
    
    
    95,169
    
    
    
    973,386
    
    
    
    26,225
    
    
    
    1,391
    
    
    
    Capital lease obligations
    
    
    57,705
    
    
    
    19,408
    
    
    
    27,764
    
    
    
    9,038
    
    
    
    1,495
    
    
    
    Operating leasesRental of office space1
    
    
    870,035
    
    
    
    113,573
    
    
    
    197,650
    
    
    
    172,064
    
    
    
    310,542
    
    
    
    76,206Computer equipment
    
    
    39,544
    
    
    
    17,505
    
    
    
    21,472
    
    
    
    567
    
    
    
    
    
    
    
    Automobiles
    
    
    8,255
    
    
    
    3,925
    
    
    
    4,087
    
    
    
    243
    
    
    
    
    
    
    
    CIA purchase obligation
    
    
    10,363
    
    
    
    10,363
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Long-term service agreements
    
    
    107,721
    
    
    
    54,237
    
    
    
    46,374
    
    
    
    6,482
    
    
    
    628
    
    
    
    Total contractual obligations
    
    
    2,189,794
    
    
    
    314,180
    
    
    
    1,270,733
    
    
    
    214,619
    
    
    
    314,056
    
    
    
    76,206
  1
    
    Included in these obligations are $16.8 million of office space leases from past
acquisitions.
  CGI group Inc.       2010 Annual report
    
    21




---



##### 



Available at
    
    
    Outstanding atTotal
    
    
    September 30,
    
    
    September 30,(in thousands of dollars)
    
    commitment
    
    
    2010
    
    
    2010$
    
    
    $
    
    
    $Cash and cash equivalents
    
    
    
    
    
    
    127,824
    
    
    
    Short-term investments
    
    
    
    
    
    
    13,196
    
    
    
    Unsecured committed revolving facilities1
    
    
    1,500,000
    
    
    
    519,931
    
    
    
    980,069
    2Lines of credit and other facilities1
    
    
    25,000
    
    
    
    25,000
    
    
    
    Total
    
    
    1,525,000
    
    
    
    685,951
    
    
    
    980,069
    2
 1
    
    Excluding any existing credit facility under non-majority owned entities.2
    
    Consists of drawn portion of $964.2 million and Letters of Credit for $15.8 million.
       HEDGES ON NET INVESTMENTS IN SELF-SUSTAINING FOREIGN SUBSIDIARIES
 
    
    US$920.0 million debt designated as the hedging instrument to the Companys net investment in U.S. subsidiaries;
    
    12.0 million debt designated as the hedging instrument to the Companys net investment in European subsidiaries.
 CASH FLOW HEDGES ON FUTURE REVENUE
 
    
    US$130.4 million foreign currency forward contracts
to hedge the variability in the expected foreign
currency exchange rate between the U.S. dollar and
the Canadian dollar;
    
    US$44.8 million foreign currency forward contracts to
hedge the variability in the expected foreign
currency exchange rate between the U.S. dollar and
the Indian rupee;
    
    $89.0 million foreign currency forward contracts to
hedge the variability in the expected foreign
currency exchange rate between the Canadian dollar
and the Indian rupee.
 CASH FLOW HEDGES ON SENIOR U.S. UNSECURED NOTES
 
    
    US$107.0 million foreign currency forward contracts.
   CGI group Inc.       2010 Annual report
    
    22




---



##### 



As at September 30
    
    2010
    
    
    2009
    
    
    2008Net debt to capitalization ratio
    
    
    30.6
    %
    
    
    n/a
    
    
    
    14.0
    %Return on equity
    
    
    16.4
    %
    
    
    14.2
    %
    
    
    15.6
    %Return on invested capital
    
    
    16.3
    %
    
    
    14.0
    %
    
    
    14.0
    %Days sales outstanding
    
    
    47
    
    
    
    39
    
    
    
    50
             CGI group Inc.       2010 Annual report
    
    23




---



##### 



As at and for the years ended September 30(in 000 of dollars)
    
    2010
    
    
    2009
    
    
    2008Revenue
    
    
    81,760
    
    
    
    108,139
    
    
    
    124,461Accounts receivable
    
    
    681
    
    
    
    10,542
    
    
    
    12,050Work in progress
    
    
    1,076
    
    
    
    5,937
    
    
    
    5,939Contract costs
    
    
    6,210
    
    
    
    8,706
    
    
    
    11,206Deferred revenue
    
    
    1,012
    
    
    
    3,351
    
    
    
    2,715
   As at and for the years ended September 30(in 000 of dollars)
    
    2010
    
    
    2009
    
    
    2008Revenue
    
    
    91,015
    
    
    
    101,964
    
    
    
    87,887Net earnings
    
    
    11,418
    
    
    
    13,412
    
    
    
    10,506Current assets
    
    
    38,148
    
    
    
    37,608
    
    
    
    36,543Non-current assets
    
    
    2,992
    
    
    
    2,998
    
    
    
    1,333Current liabilities
    
    
    15,609
    
    
    
    14,721
    
    
    
    15,040Non-current liabilities
    
    
    933
    
    
    
    445
    
    
    
    518
   CGI group Inc.       2010 Annual report
    
    24




---



##### 



REVENUE VARIATION AND REVENUE BY SEGMENT
  For the three months ended September 30(in 000 of dollars except for percentage)
    
    2010
    
    
    2009
    
    
    ChangeTotal CGI Revenue
    
    
    1,007,056
    
    
    
    926,051
    
    
    
    8.7
    %Variation prior to foreign currency impact
    
    
    13.8
    %
    
    
    -1.4
    %Foreign currency impact
    
    
    -5.1
    %
    
    
    1.1
    %Variation over previous period
    
    
    8.7
    %
    
    
    -0.3
    %CanadaRevenue prior to foreign currency impact
    
    
    508,903
    
    
    
    527,363
    
    
    
    -3.5
    %Foreign currency impact
    
    
    (1,135
    )Canada revenue
    
    
    507,768
    
    
    
    527,363
    
    
    
    -3.7
    %U.SRevenue prior to foreign currency impact
    
    
    482,680
    
    
    
    334,868
    
    
    
    44.1
    %Foreign currency impact
    
    
    (37,438
    )U.S. revenue
    
    
    445,242
    
    
    
    334,868
    
    
    
    33.0
    %EuropeRevenue prior to foreign currency impact
    
    
    62,238
    
    
    
    63,820
    
    
    
    -2.5
    %Foreign currency impact
    
    
    (8,192
    )Europe revenue
    
    
    54,046
    
    
    
    63,820
    
    
    
    -15.3
    %
  CANADA
  U.S.
  EUROPE
  CGI group Inc.       2010 Annual report
    
    25




---



##### 



ADJUSTED EBIT BY SEGMENT
 For the three months ended September 30(in 000 of dollars except for percentage)
    
    2010
    
    
    2009
    
    
    ChangeCanada
    
    
    93,887
    
    
    
    98,729
    
    
    
    -4.9
    %As a percentage of Canada revenue
    
    
    18.5
    %
    
    
    18.7
    %U.S.
    
    
    56,612
    
    
    
    36,825
    
    
    
    53.7
    %As a percentage of U.S. revenue
    
    
    12.7
    %
    
    
    11.0
    %Europe
    
    
    1,028
    
    
    
    2,267
    
    
    
    -54.7
    %As a percentage of Europe revenue
    
    
    1.9
    %
    
    
    3.6
    %Corporate
    
    
    (11,726
    )
    
    
    (11,693
    )
    
    
    0.3
    %As a percentage of revenue
    
    
    -1.2
    %
    
    
    -1.3
    %Adjusted EBIT
    
    
    139,801
    
    
    
    126,128
    
    
    
    10.8
    %Adjusted EBIT margin
    
    
    13.9
    %
    
    
    13.6
    %
 CANADA
  U.S.
  EUROPE
  CORPORATE
  CGI group Inc.       2010 Annual report
    
    26




---



##### 



NET EARNINGS
 For the three months ended September 30(in 000 of dollars unless otherwise indicated)
    
    2010
    
    
    2009
    
    
    ChangeAdjusted EBIT
    
    
    139,801
    
    
    
    126,128
    
    
    
    10.8
    %Acquisition-related and integration costs
    
    
    16,655
    
    
    
    
    
    
    
    N/AInterest on long-term debt
    
    
    5,206
    
    
    
    3,497
    
    
    
    48.9
    %Interest income
    
    
    (649
    )
    
    
    (1,125
    )
    
    
    -42.3
    %Other (income) expenses
    
    
    (1,432
    )
    
    
    1,397
    
    
    
    -202.5
    %Gain on sale of capital assets
    
    
    (73
    )
    
    
    
    
    
    
    N/AEarnings from continuing operations before income taxes
    
    
    120,094
    
    
    
    122,359
    
    
    
    -1.9
    %Income tax expense
    
    
    36,018
    
    
    
    39,719
    
    
    
    -9.3
    %Earnings from continuing operations
    
    
    84,076
    
    
    
    82,640
    
    
    
    1.7
    %Margin
    
    
    8.3
    %
    
    
    8.9
    %Net earnings
    
    
    84,076
    
    
    
    82,640
    
    
    
    1.7
    %Margin
    
    
    8.3
    %
    
    
    8.9
    %Weighted average number of sharesClass A subordinate shares and Class B shares (basic)
    
    
    274,524,411
    
    
    
    302,739,070
    
    
    
    -9.3
    %Class A subordinate shares and Class B shares (diluted)
    
    
    281,951,998
    
    
    
    307,221,737
    
    
    
    -8.2
    %Earnings per share (in dollars)1Basic EPS from continuing operations
    
    
    0.31
    
    
    
    0.27
    
    
    
    14.8
    %Diluted EPS from continuing operations
    
    
    0.30
    
    
    
    0.27
    
    
    
    11.1
    %Basic EPS
    
    
    0.31
    
    
    
    0.27
    
    
    
    14.8
    %Diluted EPS
    
    
    0.30
    
    
    
    0.27
    
    
    
    11.1
    %
  1
    
    EPS amounts are attributable to shareholders of CGI.
    CGI group Inc.       2010 Annual report
    
    27




---



##### 



SUMMARY OF QUARTERLY RESULTS
 As at and for the three months ended
    
    Sept. 30,
    
    
    June 30,
    
    
    Mar. 31,
    
    
    Dec. 31,
    
    
    Sept. 30,
    
    
    June 30,
    
    
    Mar. 31,
    
    
    Dec. 31,(in thousands of dollars unless otherwise noted)
    
    2010
    
    
    2010
    
    
    2010
    
    
    2009
    
    
    2009
    
    
    2009
    
    
    2009
    
    
    2008GrowthBacklog (in millions of dollars)
    
    
    13,320
    
    
    
    11,358
    
    
    
    11,420
    
    
    
    11,410
    
    
    
    10,893
    
    
    
    11,772
    
    
    
    12,019
    
    
    
    11,400Bookings (in millions of dollars)
    
    
    1,083
    
    
    
    838
    
    
    
    1,131
    
    
    
    1,591
    
    
    
    549
    
    
    
    1,059
    
    
    
    1,676
    
    
    
    775Book-to-bill ratio
    
    
    108
    %
    
    
    93
    %
    
    
    124
    %
    
    
    174
    %
    
    
    59
    %
    
    
    111
    %
    
    
    177
    %
    
    
    78
    %Revenue
    
    
    1,007,056
    
    
    
    901,614
    
    
    
    910,441
    
    
    
    913,006
    
    
    
    926,051
    
    
    
    950,419
    
    
    
    948,319
    
    
    
    1,000,372Year-over-year growth
    
    
    8.7
    %
    
    
    -5.1
    %
    
    
    -4.0
    %
    
    
    -8.7
    %
    
    
    -0.3
    %
    
    
    0.0
    %
    
    
    1.9
    %
    
    
    11.7
    %Constant currency growth
    
    
    13.8
    %
    
    
    0.7
    %
    
    
    3.5
    %
    
    
    -3.7
    %
    
    
    -1.4
    %
    
    
    -4.5
    %
    
    
    -5.6
    %
    
    
    4.3
    %ProfitabilityAdjusted EBIT
    
    
    139,801
    
    
    
    128,702
    
    
    
    123,963
    
    
    
    119,436
    
    
    
    126,128
    
    
    
    113,135
    
    
    
    107,250
    
    
    
    114,228Adjusted EBIT margin
    
    
    13.9
    %
    
    
    14.3
    %
    
    
    13.6
    %
    
    
    13.1
    %
    
    
    13.6
    %
    
    
    11.9
    %
    
    
    11.3
    %
    
    
    11.4
    %Earnings from continuing operations
    
    
    84,076
    
    
    
    85,880
    
    
    
    81,591
    
    
    
    111,219
    
    
    
    82,640
    
    
    
    76,678
    
    
    
    76,590
    
    
    
    79,989Earnings from continuing
operations margin
    
    
    8.3
    %
    
    
    9.5
    %
    
    
    9.0
    %
    
    
    12.2
    %
    
    
    8.9
    %
    
    
    8.1
    %
    
    
    8.1
    %
    
    
    8.0
    %Net earnings
    
    
    84,076
    
    
    
    85,880
    
    
    
    81,591
    
    
    
    111,219
    
    
    
    82,640
    
    
    
    76,678
    
    
    
    77,813
    
    
    
    80,074Net earnings margin
    
    
    8.3
    %
    
    
    9.5
    %
    
    
    9.0
    %
    
    
    12.2
    %
    
    
    8.9
    %
    
    
    8.1
    %
    
    
    8.2
    %
    
    
    8.0
    %Basic EPS from continuing operations
(in dollars)
    
    
    0.31
    
    
    
    0.30
    
    
    
    0.28
    
    
    
    0.38
    
    
    
    0.27
    
    
    
    0.25
    
    
    
    0.25
    
    
    
    0.26Diluted EPS from continuing
operations (in dollars)
    
    
    0.30
    
    
    
    0.30
    
    
    
    0.28
    
    
    
    0.37
    
    
    
    0.27
    
    
    
    0.25
    
    
    
    0.25
    
    
    
    0.26Basic EPS (in dollars)
    
    
    0.31
    
    
    
    0.30
    
    
    
    0.28
    
    
    
    0.38
    
    
    
    0.27
    
    
    
    0.25
    
    
    
    0.25
    
    
    
    0.26Diluted EPS (in dollars)
    
    
    0.30
    
    
    
    0.30
    
    
    
    0.28
    
    
    
    0.37
    
    
    
    0.27
    
    
    
    0.25
    
    
    
    0.25
    
    
    
    0.26LiquidityCash provided by continuing
operating activities
    
    
    158,473
    
    
    
    102,750
    
    
    
    125,016
    
    
    
    166,128
    
    
    
    192,450
    
    
    
    170,894
    
    
    
    187,299
    
    
    
    79,601Days sales outstanding
    
    
    47
    
    
    
    36
    
    
    
    35
    
    
    
    30
    
    
    
    39
    
    
    
    41
    
    
    
    42
    
    
    
    52Capital structureNet debt to capitalization ratio
    
    
    30.6
    %
    
    
    0.2
    %
    
    
    n/a
    
    
    
    n/a
    
    
    
    n/a
    
    
    
    0.6
    %
    
    
    4.0
    %
    
    
    9.6
    %Return on equity
    
    
    16.4
    %
    
    
    16.1
    %
    
    
    15.5
    %
    
    
    15.2
    %
    
    
    14.2
    %
    
    
    14.3
    %
    
    
    15.1
    %
    
    
    15.4
    %Return on invested capital
    
    
    16.3
    %
    
    
    16.9
    %
    
    
    16.0
    %
    
    
    15.4
    %
    
    
    14.0
    %
    
    
    13.8
    %
    
    
    14.1
    %
    
    
    14.1
    %Balance sheetCash & cash equivalents and
short-term investments
    
    
    141,020
    
    
    
    406,475
    
    
    
    419,110
    
    
    
    346,445
    
    
    
    343,427
    
    
    
    271,974
    
    
    
    186,427
    
    
    
    216,034Total assets
    
    
    4,607,191
    
    
    
    3,813,138
    
    
    
    3,872,980
    
    
    
    3,785,231
    
    
    
    3,899,910
    
    
    
    3,988,216
    
    
    
    3,938,735
    
    
    
    3,985,914Long-term financial liabilities
    
    
    1,071,948
    
    
    
    324,236
    
    
    
    305,409
    
    
    
    290,625
    
    
    
    302,741
    
    
    
    319,647
    
    
    
    345,904
    
    
    
    436,860
   QUARTERLY VARIANCES
   CGI group Inc.       2010 Annual report
    
    28




---



##### 



a)
    
    Section 1582, Business Combinations, which replaces Section 1581, Business Combinations.
The Section establishes standards for the accounting for a business combination. It is similar
to the corresponding provisions of IFRS 3 (Revised), Business Combinations and of U.S. GAAP
standard, Accounting Standards Codification (ASC) Topic 805, Business Combinations. The
new Section requires the acquiring entity in a business combination to recognize most of the
assets acquired and liabilities assumed in the transaction at their acquisition-date fair
values including non-controlling interest and contingent consideration. Subsequent changes in
fair value of contingent consideration classified as liabilities are recognized in earnings.
Acquisition-related and integration costs are also to be expensed as incurred rather than
considered as part of the purchase price allocation. In addition, changes in estimates
associated with future income tax assets after the measurement period are recognized as income
tax expense rather than as a reduction of goodwill, with prospective application to all
business combinations regardless of the date of acquisition.
 b)
    
    Section 1601, Consolidated Financial Statements and Section 1602, Non-Controlling
Interests, together replace Section 1600, Consolidated Financial Statements. Section 1601
establishes standards for the preparation of consolidated financial statements. Section 1602
establishes standards for accounting for a non-controlling interest in a subsidiary in
consolidated financial statements subsequent to a business combination. These sections are
similar to the corresponding provisions of IFRS standard, International Accounting Standards
27 (Revised), Consolidated and Separate Financial Statements and of U.S. GAAP standard, ASC
Topic 810, Consolidation. Section 1602 requires the Company to report non-controlling
interests as a separate component of shareholders equity rather than as a liability on the
consolidated balance sheets. Transactions between an entity and non-controlling interests are
considered as equity transactions. In addition, the attribution of net earnings and
comprehensive income between the Companys shareholders and non-controlling interests is
presented separately in the consolidated statements of earnings and comprehensive income
rather than reflecting non-controlling interests as a deduction of net earnings and total
comprehensive income.
 c)
    
    In June 2009, the CICA amended Section 3862 Financial Instruments  Disclosures to adopt
the amendments proposed by the International Accounting Standards Board (IASB) to IFRS 7
Financial Instruments: Disclosures. The amendments were made to enhance disclosure
requirements about the liquidity risk and fair value measurement of financial instruments. The
amendments are effective for annual financial statements relating to fiscal years ending after
September 30, 2009, and comparative information is not required in the first year of adoption.
The Company adopted these amendments in fiscal 2010. The adoption of these amendments had no
impact on the consolidated financial statements. The new disclosures are included in Note 26
of the consolidated financial statements.
   CGI group Inc.       2010 Annual report
    
    29




---



##### 



Consolidated balance sheets
    
    
    Consolidated statements of earningsCosts ofservices, selling and
    
    
    Amortization/
    
    
    IncomeAreas impacted by estimates
    
    
    
    
    
    Revenue
    
    
    administrative
    
    
    Impairment
    
    
    taxesPurchase accounting and goodwill
    
    
    ■
    
    
    
    
    
    
    
    
    
    
    
    ■Income taxes
    
    
    ■
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    ■Contingencies and other liabilities
    
    
    ■
    
    
    
    
    
    
    
    ■Accrued integration charges
    
    
    ■
    
    
    
    
    
    
    
    ■Revenue recognition
    
    
    ■
    ▫
    
    
    ■Stock-based compensation
    
    
    ■
    
    
    
    
    
    
    
    ■Investment tax credits and government programs
    
    
    ■
    
    
    
    
    
    
    
    ■Impairment of long-lived assets and goodwill
    
    
    ■
    
    
    
    
    
    
    
    
    
    
    
    ■
 
 1
    
    Accounts receivable, work in progress and deferred revenue. PURCHASE ACCOUNTING AND GOODWILL
   INCOME TAXES
  CONTINGENCIES AND OTHER LIABILITIES
   ACCRUED INTEGRATION CHARGES
  CGI group Inc.      2010 Annual report
    
    30




---



##### 



REVENUE RECOGNITION
    STOCK-BASED COMPENSATION
  INVESTMENT TAX CREDITS AND GOVERNMENT PROGRAMS
  IMPAIRMENT OF LONG-LIVED ASSETS AND GOODWILL
    EIC 175
  CGI group Inc.      2010 Annual report
    
    31




---



##### 



INTERNATIONAL FINANCIAL REPORTING STANDARDS
          PROPERTY PLANT AND EQUIPMENT
  CGI group Inc.      2010 Annual report
    
    32




---



##### 



LEASES
  FINANCIAL INSTRUMENTS
  CONSOLIDATION
  FOREIGN EXCHANGE
  PROVISIONS
  BUSINESS COMBINATIONS
  INTANGIBLES
  IMPAIRMENTS
  EMPLOYEE BENEFITS
  SHARE-BASED PAYMENTS
  CGI group Inc.      2010 Annual report
    
    33




---



##### 



INCOME TAXES
  GOVERNMENT GRANTS
  BORROWING COSTS
  PRESENTATION
   JOINT VENTURES
  REVENUE RECOGNITION
        CGI group Inc.      2010 Annual report
    
    34




---



##### 



INFORMATION TECHNOLOGY AND DATA SYSTEMS
  INTERNAL CONTROLS OVER FINANCIAL REPORTING
  DISCLOSURE CONTROLS AND PROCEDURES
   BUSINESS PROCESSES
      RISKS RELATED TO THE MARKET
 Economic risk
 RISKS RELATED TO OUR INDUSTRY
 The competition for contracts
 The length of the sales cycle for major outsourcing contracts
 The availability and retention of qualified IT professionals
 CGI group Inc.      2010 Annual report
    
    35




---



##### 



The ability to continue developing and expanding service offerings to address emerging business
demands and technology trends
 Infringing on the intellectual property rights of others
 Benchmarking provisions within certain contracts
 Protecting our intellectual property rights
 RISKS RELATED TO OUR BUSINESS
 Business mix variations
 The financial and operational risks inherent in worldwide operations
 Credit risk with respect to accounts receivable
 Material developments regarding major commercial clients resulting from such causes as changes in
financial condition, mergers or business acquisitions
 Early termination risk
 CGI group Inc.      2010 Annual report
    
    36




---



##### 



Cost estimation risks
 Risks related to teaming agreements and subcontracts
 Our partners ability to deliver on their commitments
 Guarantees risk
 Risk related to human resources utilization rates
 Client concentration risk
 Government business risk
 Regulatory risk
 Legal claims made against our work
 CGI group Inc.      2010 Annual report
    
    37




---



##### 



Information and infrastructure risks
 Risk of harm to our reputation
 Risks associated with acquisitions
 Risks associated with the integration of new operations
 Liquidity and funding risks
     CGI group Inc.      2010 Annual report
    
    38




---



##### 



CGI group Inc.      2010 Annual report
    
    39




---



##### 



SIGNATURES
  Groupe CGI Inc./CGI Group Inc.By:
    /s/ André ImbeauDate:  December 23, 2010
    
    Name:
    André ImbeauTitle:
    Executive Chairman of the Board
and Corporate Secretary




---



##### 



EXHIBIT INDEX