DERICHEBOURG - Universal registration document 2019-2020

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Group management report Risk factors

This self-insurance could take an alternative form to traditional insurance in an insurance context that has become much stricter, particularly in the Recycling and waste management sectors, with ever-higherdeductibles,lower cover and growingpremiums. Main insuranceprograms The Group’s insurance policy is based on more than 10 programs includingthe followingmain policies: General Public Liability Insurance: covering third-party criminal and p contractual liability incurred by the Group in the event of personal injury or material and intangibledamage likely to arise in the course of businessoperationsor after delivery; SpecificPublic Liability Insurancefor pollutionrisks; p Airport Public Liability Insurance; p Accident Insurance: covering direct material damage to insured p propertyof an accidentaland suddennature. It shouldbe noted that the market's insurance capacity is drying up for the businesses in which the Group operates, particularly for this policy type, and that the Groupmust now take on a larger share of risk than before; Vehicle Fleet Insurance: working from a common base, these are p essentiallypoliciesadaptedto the needs of local regulations; Transport Insurance: covering claims arising from maritime, rail and p ground transportation between the Group’s plants and its customers; ChartererInsurance; p Ten-Year Insurancefor all building-relatedactivities; p Directors’Liability Insurance; p Workers’ Compensationinsurance, to cover work-relatedaccidents p and illness; this systemis specific to the UnitedStates. The total cost of the Group’s policieswas €10 millionat September 30, 2020.

Informationsystems The subsidiariesuse the same accountingsoftware in all French entities and in some Europeanservices 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 applicationsoperatecorrectly,they are maintained in-houseor by a contractor. Insurance 3.3.4 The Group is particularly conscious of the need to prevent risks and allocates significant resources and a considerable budget to training, site security and a range of programs covering prevention, protection, security,healthand 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 Groupentities are coveredby so-called“master”insurancepolicies that are translatedinto local policies in accordancewith the regulationsand risks identified locally. Similarly, the Insurance Department uses “master”underwritersthat acts as the conduit to local underwritersin the countrieswhere the Groupoperates. In this way, the Groupguaranteesharmonizationand an optimumlevel of security in its insurance policies, which it reviews whenever necessary, on the basis of information fed back by subsidiaries and claimmonitoring.This takes place on at least an annual basis. The Derichebourg Group, confident of its management of the risk associatedwith the investmentsit has made over the past two years in terms of preventionand protectionin its core business, i.e. recycling, is now lookingat expandingthe proportionof self-insurance.

DERICHEBOURG p 2019/2020 Universal Registration Document 112