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2.

RISK FACTORS AND CONTROL FRAMEWORK Control of Group risks and activities

ensure the control of energy markets risks by deploying the energy markets risk ■ policy (see section 2.2.2.2.1); define and deploy the control of financial risks (interest rates, foreign exchange, ■ liquidity, equities, credit) and the risk of counterparty default (see section 2.2.2.2.2); verify the comprehensiveness and relevance of the risk analyses carried out for ■ long-term investment and commitment projects which are submitted to the Executive Committee-level bodies for decision (see section 2.2.2.2.3); deploy the crisis-management and business-continuity policy and ensure that the ■ crisis-management organisation is maintained in an operational condition for the Group level (see section 2.2.2.1.2). The Financial Department 2.2.1.3.2 The Financial Department contributes to controlling the activities of the Group, notably through the following missions: Performance Management (1) : ■ contributing to the management of the performance of the Group’s entities ■ by helping define the Group’s performance plans and by challenging the measures implemented by the entities and business lines. To this end, the Financial Department sets up a set of management indicators appropriate to the economic model of each activity of the Group, within the framework of the policy on Management of Economic and Financial Performance, contributing to monitoring the implementation of the budget through ■ performance reviews generalised within the Departments and the subsidiaries that are controlled, conducting portfolio reviews and economic and financial optimisation ■ analyses, developing and disseminating financial management methods and processes, ■ contributing to the dissemination of the management culture within the Group; Reporting: ■ overseeing the processes of the Group’s management cycle (budgets, ■ revisions of forecasts and medium-term plans), summarising them and proposing choices at the level of the departments and subsidiaries, within the framework of the Accounting and Financial Reporting policy. The Financial Department’s role is to alert and make propositions in the pre-decision-making analysis of the financial consequences of the operations envisaged, or the performance levels proposed, developing medium- and long-term financial trajectories; ■ Accountancy: ■ preparing EDF’s parent company financial statements and the Group’s ■ consolidated financial statements, ensuring the compliance of the accounting system via Group standards that ■ apply to accounting standards and the chart of accounts to be applied, organising the Group’s accounting and financial internal control system as ■ defined in the Group “accounting and financial internal control” instruction, according to a system detailed in section 2.2.2.3; Taxation: ■ ensuring the coherence of the tax practices within the Group; the Group ■ tax policy specifies Group requirements in the tax field; the precise arrangements for this are addressed in section 3.1.4 of this document, ensuring the proper implementation of legal and declarative obligations, ■ notably by monitoring the subject, ensuring the accounting follow-up of the deferred tax position and the ■ periodic justification of the accounts, identifying and controlling the Group’s tax risks; ■ Finance and Investments, Insurance: ■ ensuring that the Group is financed within the context of the policy on ■ financing, cash and financial risk control,

coordinating all the actions inherent in the Group’s balance sheet and ■ financial result, with the aim in particular of controlling the exposure of the Group’s hedging assets, debt and the Group’s overall balance sheet to financial risks, managing the investments and acquisitions and disposals as well as the ■ listed or unlisted dedicated assets, appraising the investment projects presented to the Executive Committee ■ Commitment Committee meetings to anticipate impacts and improve the reliability of the financial trajectories on the Group’s balance sheet and profit and loss accounts, as defined by the Commitments policy, developing and implementing innovative insurance coverages at the best ■ market standards designed to support the development of the Group in all its dimensions, as defined by the insurance policy (see section 2.5); Financial communication of the Group according to the requirements of the ■ Financial Communication policy (see section 2.2.2.3.4); Finance Information System (IS): the Finance IS comprises a common basis for all ■ the Group’s departments, as well as tools specific to each of the entities or subsidiaries according to the specificities of the country or activity and raises several important issues in terms of data integrity and application availability. The Financial Department acts as the project owner. The Legal Department and the Contract 2.2.1.3.3 Management Department The Legal Department, which reports to the General Secretary, is tasked with protecting the Group’s interests and securing its activities, by providing support, advice and expertise. The legal function of the Group is composed of the Group Legal Department of EDF SA and of the Legal Departments of the subsidiaries. The Group Legal Director organises the legal function. The legal function’s missions include the following: it is systematically called upon, as early as possible, with cases and projects ■ involving challenges; it manages the main disputes in which the Group is a plaintiff or defendant (2) ; ■ it performs monitoring of legislative and regulatory changes, raises alerts and ■ carries out actions to raise awareness; it intervenes to support and coordinate setting up and deploying actions for ■ compliance with the rules on the independent management of regulated subsidiaries; it supports the divisions in protecting their brands, know-how, data, inventions ■ and must, in particular, be associated with drafting the clauses on intellectual property in industrial agreements where there are issues at stake, and in negotiating licensing agreements. The Legal Department also organises a secure process of listing and digitising the major contractual commitments of EDF SA and of certain subsidiaries known as the “contract library”, to ensure that knowledge and control of EDF’s sensitive contractual assets is guaranteed. The Legal Department specifies, via the policy on governance of the subsidiaries and shareholdings, the conditions for the creation of each new legal entity, the procedures for appointing the corporate officers and expectations in terms of quality of governance within the Group. Improved management of contracts entered into by EDF is a major issue in controlling operations, delays and associated costs. It is the role of the Contract Management function which aims to improve the management of risks and create opportunities in the management of its contracts. This function calls upon Contract Managers positioned in the business lines throughout the contractual process. It is an additional line of defence in the management of contracts organised between corporate and the divisions. The Contract Management Department, which was created in August 2014 and reports to the Group Legal Director, is responsible for organising this support function, managing the Contract Management unit, measuring its performance and professionalising the Contract Management stakeholders.

This policy applies to all entities of EDF SA and subsidiaries, with the exception of regulated infrastructure operators, for whom shareholders’ rights are exercised in the economic (1) supervision framework specified by Directives 2009/72/CE and 2009/73/CE. Excluding (i) disputes related to tax law, managed by the Financial Department, (ii) certain disputes related to employment law managed by the National Employment Law Division (2) of the human resources department.

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