HERMÈS - 2019 Universal Registration Document

OVERVIEW OF THE GROUP INTERNAL CONTROL AND RISK MANAGEMENT PROCEDURES

for the external communication of financial information in • accordance with regulations. They are supported by consolidation, management control and investor relations departments; the Managing Directors and Finance Directors of the subsidiaries, s who have primary responsibility for the quality of the financial information preparation processes and internal control applied by the entities they oversee. They are also responsible for circulating procedures drawn up and issued by Hermès International and for ensuring that these are properly applied. The procedures that Hermès has implemented in drawing up the financial statements aim to ensure the following: that published accounting and financial information is impartial, s objective and relevant in the light of user requirements, that it meets reporting deadlines ( via a timetable for closing the accounts), and that the information is understandable; that year-end consolidated account closing procedures that meet s these criteria are drawn up and circulated to all consolidated entities, namely via the Group management manuals, and instructions sent to the subsidiaries; the traceability of closing accounting entries within a single s centrally-managed information system; that consolidation packages are checked prior to incorporation s (compliance with Group accounting standards and practices and verification of consistency); that systems are in place for analysing the accounts, such as reviews s conducted by the financial controllers, verification of consolidation transactions, ascertaining that IFRS have been properly applied, analysis of internal transactions, etc. The reporting and consolidation procedures include the controls required to ensure the reliability of financial information. Finally, in the context of these audits, the audit and risk management department coordinates its work on internal control with the Statutory Auditors. Procedures for preparing published accounting and financial information

Oversight of the accounting and financial organisation

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Hermès has set up an organised, documented system to ensure the consistency of reported consolidated accounting and financial data. This system is based on a Group management manual, strict division of responsibilities, and on Hermès International’s tight controls on information produced by the subsidiaries. The internal control process for accounting and financial information involves the following parties: the Group management, which is carried out by the Executive s Committee, led by Executive Management. As part of the parent company and consolidated financial statement review and approval process, the Executive Management receives all information that it deems to be useful, such as information on the main options applied for the reporting period, accounting estimates and changes in accounting methods. It analyses the subsidiaries’ accounts on a regular basis and meets with their Senior Executives from time to time, particularly during the budget preparation and account closing periods. Lastly, it reviews the findings of the Statutory Auditors; the Supervisory Board, which exercises ongoing control over the s Company’s management. By consulting Group management, the Board can verify that oversight and control systems are adequate to ensure that the financial information published by the Company is reliable. It has the same powers as the Statutory Auditors and receives the same documents that they do, at the same time; the Executive Vice President Compliance and Organisation s Development, member of the Executive Committee, who ensures the implementation of adequate methods (organisation, skilled resources, tools) and oversees the audit and risk management department responsible for the risk management system and for internal control coordination; the Executive Vice-President Finance, member of the Executive s Committee, who ensures the implementation of a system: for the consolidation of financial information in accordance with • IFRS accounting standards, for the monitoring and coordination of activity during regular • reviews (year-end and half-year accounts closure, estimation updates and budgets), for internal control at operating entities, •

2019 UNIVERSAL REGISTRATION DOCUMENT HERMÈS INTERNATIONAL

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