Eurazeo / 2019 Universal Registration Document

Risk management Risk management and internal control systems

RISK MANAGEMENT PLAYERS 4.1.2 All executive corporate officers and employees have responsibilities and powers that contribute, at their level, to the proper operation of the system and the achievement of objectives. The current organizational structure is based primarily on the association of responsibilities, tasks and delegations of authority of certain highly involved bodiesand functions. In analyzing the contributionof the different risk managementplayers, three groups canbe identified: governance: the Supervisory Board and three of its specialized • committees,the FinanceCommittee,the Audit Committeeand the CSR Committee; the first line of defense: this comprises direct contributors to the • identification, investment decision, transformation and portfolio enhancement stages. Members of the Executive Board and the Executive Committee and investment and investment opportunities sourcing teams represent the frontline of defense throughout the life of an investment opportunity or a company within the portfolio; the second line of defense: the Corporateteams, and primarily the • CSR, Risk Management, Legal, Human Resources and Finance Departments,represent the second rampart for the detection and prevention of risks during both the acquisition and transformation phases. and the specialized committees The Supervisory Board permanentlyoversees the managementof the Company by its Executive Board. It also refers to the work and opinions of the specializedcommittees towhich ithas assigned tasks. Under the Bylaws and/or the law, a certain number of transactions, including some that pertain to the investment business, require prior authorizationby the SupervisoryBoard, in particular: the partial or full disposal of investments, where the transaction • amountexceeds twohundred million euros  (1) ; the appointment of one or more Eurazeo representatives to • the Boards of any French or non-French companies in which the Companyholds an investmentwith a value equal to or greater than €200 million (1) ; the acquisition of a new or additional investment in any entity or • company, or any acquisition, exchange or disposal of shares, property, receivables or securities involving an investment by Eurazeo of morethan €200 million  (1); agreements regarding debt, financing or alliances, whenever the • total amount of the transaction or agreement, performed in one or morestages, exceeds €200 million  (1) . Upstream of these transactions, the Supervisory Board relies on the opinion and recommendationsof the Finance Committee, which can also be consulted onprojects of less than€200 million. As part of its duties, the Audit Committeeplays a role in the oversight of the internal control and risk management system. In this respect, the Internal Audit and Risk Department reports the conclusions of its proceduresto this committee at least twice annually and brings to its attentionthe most importantrisk topics. Governance:the SupervisoryBoard A.

Periodicvaluation of unlistedinvestments to determinethe Net AssetValue Net Asset Value (NAV) is a key measure of value creation over time. In order to produce the NAV, a process was introduced to update valuationsof unlisted investmentsevery six months. To coordinatethis process and ensure the methodologyis uniformand correctly applied, an employee (NAV Manager) centralizes the work documentedby the various participants. A division-based analysis is produced prior to each collegiate valuation review meeting. This meeting represents a review stage before the determination of valuations and NAV by the Executive Board. At the same time, valuation work is sent to independent assessors who ensure, using a multi-criteria approach, that valuations are reasonable. Finally, based on specific procedures, the Statutory Auditors prepare an attestation on the financial informationrelating to the NAV, in whichthey issuean opinionon: the consistencyof the informationused to calculate the Net Asset • Value with the accountingrecords; and the compliance in all material respects of the preparation of the • informationwith the methodologydescribed in Chapter 6, Section 6.5 of this UniversalRegistration Document. Processes for the preparationand processing of financial information(see Section 4.1.4) Cashmanagementand financing Depending on the investment and divestment schedule, the level of Eurazeo's available cash can vary significantly and can sometimes reach substantial levels. As of December 31, 2019, Eurazeo SE had available cash of €533 million. Close attention is therefore paid to the appropriate management of cash-related risks. The Director of the Capital Markets, Financing and Treasury Department is in charge of the daily control of cash transactions. Control activities are part of compliance with the policy and prudential rules laid down by the Treasury Committee (see also Section 4.2.3.3.4, Counterparty risk, of this Chapter).They notably cover the strict applicationof delegationof authority procedures, the monitoring of investment performance, the monitoring of counterparty risk, the analysis of changes in the cash position over the period, the preparation of cash forecasts, and the issue of alerts and recommendationsto the TreasuryCommittee. Furthermore, the Director of the Capital Markets, Financing and Treasury Department leads the acquisition financing operations. He assists the investmentsteams by negotiatingwith financial partners to optimize financialterms and conditions. Monitoringby AuditCommitteesof risks specific to investments The creation of an Audit Committee in the majority of investments is key to the organization of exemplary governance (see Chapter 3, Section 3.1.1.3). These committees meet once every quarter on average. Members of the dedicated investment team, Eurazeo's Internal Audit and Risk Departmentand the ConsolidationDepartment are generallypresent or represented forEurazeo. Observations made following procedures during the acquisition phase, internal audits, monitoring of risk mappings and Statutory Auditor procedures are reviewed during these Committee meetings. This process is part of the system ensuring Eurazeo Audit Committee members have the informationnecessaryfor the performanceof their duties, and notably information on the efficiency of risk management and internalcontrol systems.

Art. 14 of Eurazeo SE’s Bylaws. (1)

EURAZEO / 2019 UNIVERSAL REGISTRATION DOCUMENT

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