PERNOD-RICARD - URD 2020-21

____ 3. SUSTAINABILITY & RESPONSIBILITY ETHICS & COMPLIANCE

3.4.2

Presentation, implementation

Transfer pricing Pernod Ricard’s strategy and organisation are built on a decentralised model with an ongoing relationship between the Brand Companies and the Market Companies. The Brand Companies generally own, protect and develop the intellectual property. They are also in charge of developing the overall strategy for the brands as well as solutions and ways to activate them. The Market Companies implement this strategy at local level. Related party transactions are carried out in accordance with the Group’s transfer pricing policy, which is based on the arm’s length principle ( i.e. on terms that would have been agreed Pernod Ricard has a team of qualified and well-trained tax and customs specialists working under the supervision of the EVP Finance, IT and Operations. Clear internal control principles on tax matters have been defined and made available to all employees on the Intranet. Processes have been put in place to prevent risks of tax evasion. The tax legislation in the countries where Pernod Ricard operates is complex and can be subject to interpretation. Pernod Ricard manages these uncertainties with the help of internal and external tax experts. Tax provisions are measured based on the Group’s best estimate based on the information available (in particular that provided by the Group’s legal and tax advisors) Pernod Ricard is committed to being open and transparent with tax authorities and to disclosing relevant information to enable them to carry out their work. Pernod Ricard places particular importance on working positively, proactively and transparently with the tax authorities of the countries in which the Group operates in order to build honest and sustainable relationships and to be able to resolve potential disputes quickly. Pernod Ricard respects the obligations of country-by-country reporting. The Group also participates in the development of corporate tax policies, tax transparency initiatives and tax legislation by taking part in public consultations. and presented regularly to the Audit Committee. Promotion of international transparency between independent parties). An efficient organisation

and monitoring of the duty of care The cross-reference tables below summarise the presentation of the information constituting the Group’s duty of care plan and its implementation as required by article L. 225-102-4 of the French Commercial Code. Some of the information is contained elsewhere in Shapter 3, as well as in Shapter 4. Several departments and working groups are involved in identifying and monitoring the risks associated with the Group’s business activities and its main suppliers and subcontractors, as well as implementing and monitoring the measures. The Departments involved are the Sustainability & Responsibility, Purchasing, HR, Internal Audit, Operations and Legal Departments. The S&R Senior Steering Committee oversees the implementation of the Group's S&R Strategy and progress towards targets set. The role of the S&R Committee at the Board of Directors’ level is to monitor the progress of the S&R Strategy, challenge ambitions and report to the wider Board. Regarding the monitoring of measures, the Group uses different internal reporting systems and indicators for monitoring the implementation of the actions taken. The results have already been extensively published and audited with complete transparency in this report (see Sections 2, 3 and 4 in particular). Risk identification and mapping 3.4.2.1 Pernod Ricard faces a range of internal and external risks in its own operations as well as in its supply chain. The main risks currently estimated by the Group as well as the methodology are reported in Section 4 “Risk management” under “Risk factors”, as well as at the start of Section 3, in the section "The main sustainability risks and opportunities. The mapping processes described below were drawn from Pernod Ricard’s existing risk management systems. In addition, in line with the requirement to publish a “Non-Financial Statement”, the Group has published its main non-financial risks and opportunities in Section 3.

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PERNOD RICARD UNIVERSAL REGISTRATION DOCUMENT 2020-2021