Areva - Reference Document 2016

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REPORT OF THE CHAIRMAN OF THE BOARD OF DIRECTORS

4. System of internal controls

Pursuant to the initiative launched at the end of 2015 by the Chief Executive Officer and with the full support of its governance bodies, the group continued to deploy a program to strengthen compliance and ethics. This initiative, the first phase of which is expected to last 18 months, is the expression of AREVA’s determination to rise quickly to the level of the best references in this field. Within this framework, the warning system was strengthened starting at the end of 2015 and an “individual compliance commitment letter” process was instituted for all of the group’s executives. To improve existing systems, the Director of Compliance published a Code of Ethics in 2016 to replace the old Values Charter and a Compliance Policy governing its implementation. He also put in place an anti-corruption compliance policy, a competition legislation and regulation compliance policy, a financial compliance and ethics policy, and an insider trading rules compliance policy. In addition, the discovery of anomalies at the Creusot site in 2015 and 2016 was factored into the strengthening of the compliance and ethics program and taken into account for the continuous improvement of the internal control system. INTERNAL CONTROL STANDARDS In the “Frame of Reference for Internal Control” of the Autorité desmarches financiers (AMF), to which the group defers, the internal control system is characterized by: p an organization with a clear definition of responsibilities, sufficient resources and expertise, and appropriate information systems, procedures, tools and practices; p the internal dissemination of relevant and reliable information enabling each person to discharge his or her responsibilities; 4.1.2.

p continuous monitoring of the internal control system. The group ensured that the approach taken is consistent with the standards of the AMF. In particular, it verified the consistency between: p the “Implementing guidelines for the internal control of accounting and financial information published by the issuers” included in the Frame of Reference, and p the system for self-audit of internal controls within the group (Self Audit Income), which was carried out to ensure that all the standards are met (see Section 4.6, Continuous oversight of the internal control system ). INTERNAL CONTROL OBJECTIVES Internal controls contribute to themanagement of operations. They aim in particular to ensure: 4.1.3. p implementation of instructions and guidelines set by the governing bodies; p the smooth functioning of the group’s internal processes, in particular those contributing to the preservation of its assets; p the reliability and quality of the information produced and communicated, with particular emphasis on financial information. The scope of internal control is not limited to procedures for ensuring the reliability of accounting and financial information. However, no matter how well designed and implemented, internal control mechanisms are not sufficient by themselves to guarantee with absolute certainty that these objectives are met. AREVA’s internal control system is consistent with the group’s commitments regarding the conduct of its operations, particularly in the framework of its Code of Ethics. powers conferred on him by law, and subject to the limitations set forth in the Articles of Association or in the Board of Directors’ Rules of Procedure, the Chief Executive Officer is responsible for: p defining the group’s performance objectives (financial, commercial, operational, nuclear safety, occupational safety, etc.) and their breakdown by business, and monitoring their achievement; p allocating the group’s resources (human resources, financial resources, etc.); p defining organizational principles and processes to serve customers and build talent. Although the methods of control by the Board of Directors and its specialized committees were not modified in 2016, the AREVA group nonetheless changed the methods of internal line management of its operations as the milestones of the Restructuring Plan rolled out by the company were met. The Restructuring Plan is part of a broader framework for the redefinition of the respective roles and responsibilities of French nuclear industry players decided in June 2015. p compliance with laws and regulations;

p a system to identify, analyze and manage risk; p control activities designed to reduce this risk; and

4.2. ORGANIZATION, GOVERNANCE, RESOURCES, INFORMATION SYSTEMS AND OPERATING PROCEDURES

Internal controls are implemented throughout the group by all employees under the overall responsibility of existing governing bodies.

4.2.1. AREVA’S ORGANIZATION AREVA has a single corporate governance body, the Board of Directors. In this framework, and as described in Section 3 of this report, the Board of Directors is in charge in particular of defining the group’s strategy and validating large capital expenditures and sensitive or significant commercial proposals, drawing in particular on preparatory work carried out by the four standing committees it has created and by the Ad Hoc Committee and the AREVA TA Working Group which it created on a temporary basis (to deal with conflict of interest matters) (see Section 3.5. Committees of the Board of Directors ). The Chief Executive Officer is responsible for the company’s executivemanagement and represents the company in its relations with third parties. In addition to the

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2016 AREVA REFERENCE DOCUMENT