Integrated Report 2020-2021

VISION AND STRATEGY

RISK CONTROL: THE GROUP’S DNA

Throughout the world, Thales supplies highly-complex systems, products and equipment. Their nature is often critical for its customers, governments, administrations and major corporations. Control of the risks related to these complex projects has long contributed to the Group’s performance.

The risk identification and management system deployed at all levels of the Group and overseen at the highest level makes it possible to better control the risks’ consequences, whether

operational and strategic, legal and regulatory, or financial. This system also enables particular attention to be focused on societal and environmental challenges.

A PROACTIVE APPROACH TO IDENTIFY AND MANAGE RISKS

Integrated in the decision-making and operational processes of the Group, risk management is part of Group management and guides decision-making. It is based on a robust governance and control system.

Risk governance

Risk Control System

AUDIT AND ACCOUNTS COMMITTEE OF THE BOARD OF DIRECTORS (5 meetings in 2020)

AUDIT, RISKS AND INTERNAL CONTROL DEPARTMENT

Certified by IFACI (three-year certification renewed in March 2019), attached to the Group Secretary and General Counsel. Based on its risk assessments, the department is responsible for ensuring that: • risks are managed via the performance of audits and the provision of guidance and advice across the Group; • adequate internal controls are maintained. The Group’s statutory auditors are in regular contact with the Audit, Risks and Internal Control Department.

Chaired by Mrs Anne-Claire Taittinger, Director. • Responsible for ensuring the effectiveness of internal control and risk management systems.

RISK MANAGEMENT COMMITTEE (3 meetings in 2020)

- 2020 INTEGRATED REPORT

Chaired by the Chairman & CEO. Includes the Chief Financial Officer, the Chief Operating and Performance Officer, the Group Secretary and General Counsel • Defines the acceptable risk level. • Assigns responsibilities for managing and controlling risks. • Verifies that risk management measures are fully comprehensive.

NETWORK OF 19 RISKS ADVISORS

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• Oversee main risk factors. • Characterise risks. • Monitor major incidents. • Ensure continuous improvement of the system.

RISK ASSESSMENT COMMITTEE (16 meetings in 2020)

The key contacts for the Audit, Risks and Internal Control Departement in Major Countries and Global Business Units are the Directors of Operations.

Chaired by the Vice President, Audit, Risks and Internal Control. Includes the Risk Director, Quality Director and Insurance Director • Analyses risks and evolving threats. • Updates and prioritises risk levels (risk mapping). • Prepares a consistent policy of prevention, internal control, audit and, where appropriate, transfer of risk to insurance companies. • Issues recommendations to the Risk Management Committee.

EXTERNAL AUDITS AND CERTIFICATIONS For most of its operations, the Group is subject to a control environment imposed by its customers and regulatory authorities, which require strict certification and controls. These specific constraints are in addition to its statutory obligations.

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