Eurazeo / 2019 Universal Registration Document

Risk management Risk management and internal control systems

Risk management and internal control systems 4.1

The riskmanagementand internalcontrol systems providea complementary contributionto controllingthe activitiesof the Company: the risk management system seeks to identify and analyze • the main risks to which the Company is exposed. Identified risks likely to exceed the acceptable limits set by the Company are mitigated and, when required, action plans are prepared. These action plans provide for the implementation of controls, the transfer of the financial consequences(insurancemechanisms or equivalent) ora changeto the organizationalstructure;

These systems rely on processes (4.1.1), key players (4.1.2) and an environmentpromoting honest and ethical behavior (4.1.3), which are presented successively below. In addition, a specific section is devotedto internalcontrolscoveringthe preparationand processing of financial information(4.1.4). The systems presented (functioning as of December 31, 2019)cover all transactionsperformedwithina scopecomprisingEurazeoSE and its subsidiarieshousingthedifferentinvestmentdivisions (1) , the Luxembourg, Shanghaiand NewYork subsidiariesand the investmentvehiclesdirectly controlledby each ofthesecompanies.

the internalcontrolsystem relies on the risk managementsystem • to identify the main risks to be controlled. In the same way as the general principlesof the AMF framework,Eurazeo's internal control system seeks to ensure: compliance with legislation and regulations, application of the instructions and strategic direction set by the Executive Board, the smooth running of the Company's internal processes, particularly those contributing to the security of its assetsand the reliabilityof financial information.

FACTORING IN RISKS IN THECOMPANY'S KEY PROCESSES 4.1.1.

In its bid to create value, Eurazeohas organized its activitiesaround a certain number of processeswhich play a key role not only in creatingvalue, but also in preserving value.

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Eurazeo’s business processes: Detect / Invest / Transform /Enhance value The organization and procedures implemented by Eurazeo in the conductof its privateequity business seek,in particular, to: optimize the identification,classificationand vetting of investment • projects with growth prospects; ensure that investment decisions are taken with full knowledgeof identifiable risks liable to affect its value; achieve the planned transformationof each investmentin order to • create value; optimize the timingand theterms of the saleof its investments • Detection / Investment decision In each investment division, dedicated investment teams meet on a collegiate basis at least twice a week to address deal flow, the monitoring of investments and preparation for the divestment of portfoliocompanies. Each investment opportunity is documented through formal monitoring as the analysis of each opportunity progresses. The analysisof each new investmentopportunityis led by one or more members of the investment teams in accordance with specific procedures defined under the authority of an Investment Director. The risks associated with each investment opportunity are reviewed and reassessed based on progress (see Section 4.2.1.2, Risks related to the vetting of investmentprojects of thisChapter). At a later stage, opportunities are discussed by the Investment Committee and when significant interest is shown, the decision is taken to perform due diligence procedures and commit the related expenditure. During this stage, the CSR, Risk Management, Legal and Human Resources Departments are also involved in the risk

analysis under the supervision of the General Secretary. They assist the investment teams with the performance of risk analyses in their respective areas of expertise and due diligence procedures on the risk areas identified as a priority. They have developed common risk guidelines which are an essential tool for analyzing the investment opportunities of the different divisions. The investment or divestment decision is examined by the division's Investment Committee and made by the Executive Board before being presented for authorizationto the Supervisory Board (when the investment or divestment exceeds €200 million) for the Capital, Growth, Brands and Patrimoine divisions. The Finance Committee is consulted and issues an opinion and recommendations to the Supervisory Board. The Eurazeo PME and Idinvest activities have specific governance rules. Transform / Value enhancement Under the supervision of the investment teams, the priority and/or transformational projectsfocusingon risks and opportunitiesidentified during the analysis phase of a companyare launchedpost-acquisition. The investment and Corporate (CSR, Risk management, Human Resources and Legal) teams may also assist management of the relevant companieswith theconduct of theseprojects. Portfolio companies (and particularly their value creation projects, performance, risks, etc.) are monitored weekly through combined teammeetings. During the development and transformation phase of an investment, the management of each investment produces a monthly report (performance,outlook, business review, risks, etc.). The setup of Audit Committees in the investments offers an additional means of monitoring the efficiency of risk management and internal control in the portfolio companies.

Except Idinvest Partners, which has its own systems. (1)

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2019 UNIVERSAL REGISTRATION DOCUMENT