DERICHEBOURG - Universal registration document 2018-2019

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Group management report Risk factors

Manages the Group’s cash in cooperation with the divisions, (debt p and liquidity) through a reporting system. Analyzes major financial risks together with the divisions (interest p rates, foreign currencies) and defines the hedging policies to cover these risks. Analyzes differences between forecasts and actual figures. p Participates in the analysis of investment projects and proposed p contracts. Ensures the reliability of accounting and management information, p in particular by determining at the Group level the type, scope, form and frequency of financial information to be provided by the divisions. It also establishes the financial reporting standards, accounting standards and procedures and the instruments and procedures for consolidating information. The Legal Department, part of the Secretariat General Manages all of the Company’s legal transactions. p Provides counsel for operational businesses in France. p Manages all legal activities in France. p Coordinates the Group’s lawyers and legal advice activities. p Internal control procedures related to the 3.3.3.4 preparation and processing of financial and accounting information Internal control procedures related to the preparation and processing of financial and accounting information are mainly prepared under the supervision of General Management by the Financial and Accounting Department, which reports directly to General Management. The operating subsidiaries are responsible for implementation. Most of these procedures are frequently modified to ensure that they meet the Group’s requirements. The Group’s Financial and Accounting Department is responsible for preparing Derichebourg’s corporate financial statements and the Group’s consolidated financial statements. For this task it is supported by the following organization: The role of corporate governance bodies The Board of Directors reviews and approves the annual financial statements of Derichebourg and the Group’s consolidated financial statements. The main accounting options used are brought to the attention of the Audit Committee. The Group’s earnings for the period, consolidated balance sheet and financial position are examined at this meeting. The Statutory Auditors express their findings upon completion of their audit. The accounting and financial organization Definition and communication of the Group’s accounting policies, p both for the corporate financial statements and the consolidated financial statements under IFRS. New legislation and regulations are monitored to assess their p potential impact on the Group’s accounts.

Monthly closing: each subsidiary closes its accounts on a monthly p basis. They are then subjected to an accounting analysis and a management analysis by the division’s operational and financial staff. Definition and communication of instructions for closing the books. p Prior to each stage of the consolidation process, the Accounting Department circulates consolidation packs, closing assumptions (table of rates), the scope of data to be provided and its schedule. This information is sent to the Group subsidiary administrative and financial managers. Development, installation and maintenance of the IT consolidation p tools. Standardization of the IT tools (configuration, maintenance, p communication and verification of data) secures and harmonizes data processing. Communicating accounting and financial information to the Group’s p administrative and management bodies, and verifying financial information prior to its circulation. Information systems The subsidiaries use the same accounting software in all French entities and in some European services subsidiaries. There are also “business-specific” applications that record business flows and translate them into accounting flows. Controls are performed to check that transactions are correctly and exhaustively recorded. To ensure that these applications operate correctly, they are maintained in-house or by a contractor. Insurance 3.3.4 The Group is particularly conscious of the need to prevent risks and allocates resources and a significant budget to training, site security and a range of programs covering prevention, protection, security, health and the environment. This risk management nevertheless includes taking out insurance policies with financially sound international insurance companies. It is the responsibility of the Group’s Insurance Department, which is managed by the parent company, to identify the risks, for each business sector, define the correct balance between insurance requirements and guarantees to be entered into, as well as the acceptable levels of policy excesses and ceilings in order to remain competitive. This is why the decision was taken, from an economy of scale perspective, to negotiate policies at central level. Consequently, all Group entities are covered by so-called “master” insurance policies that are translated into local policies in accordance with the regulations and risks identified locally. Similarly, the Insurance Department uses a “master” underwriter that acts as the conduit to local underwriters in the countries where the Group operates. In this way, the Group guarantees harmonization and an optimum level of security in its insurance policies, which it reviews whenever necessary, on the basis of information fed back by subsidiaries and claim monitoring. This takes place on at least an annual basis.

DERICHEBOURG p 2018/2019 Universal Registration Document 104