PERNOD-RICARD_REGISTRATION_DOCUMENT_2017-2018

3

SUSTAINABILITY & RESPONSIBILITY (S&R) DEVELOP COMMUNITIES AND INVOLVE OUR PARTNERS

Commitment to respecting 3.4.3 Human Rights Pernod Ricard’s commitment to respect Human Rights is deeply rooted in its history and culture. Since the Group was founded, it has fostered respect for people and cultures through its actions and the actions of its employees. This commitment is reflected in its support for the principles of the United Nations Global Compact, which Patrick Ricard signed up to in 2003. These 10 principles, including those relating to Human Rights, are available to the employees at any time on the Group’s Intranet. Pernod Ricard recognises the UN Guiding Principles on Human Rights, as well as the eight fundamental conventions of the International Labour Organization and the OECD Guidelines for Multinational Enterprises. Respect for Human Rights 3.4.3.1 and abuse prevention Pernod Ricard’s Internal Charter sets out the requirement that its employees comply with the law, including fundamental principles such as the respect of Human Rights. In addition, Pernod Ricard policy has been detailed in Pernod Ricard’s Sustainable Development Commitments. These two documents are available on the Group’s global website (www.pernod-ricard.com). As a decentralised organisation, Pernod Ricard gives responsibility to its affiliates for the adoption, respect and promotion of the content of its Charters locally. For example, Chivas Brothers Limited published on its website a “Slavery and Human Trafficking Statement” which includes its commitment and anti-slavery policy as well as its key performance indicators. This statement is made pursuant to Section 54 of the Modern Slavery Act 2015 (www.chivasbrothers.com/media/1725/chivas-anti- slavery-statement-signed-version.pdf). Dedicated teams at Group level regularly evaluate these principles (through internal audit and support for local initiatives aimed at developing or monitoring the Company’s commitment to ethical practices). The visits to affiliates by cross-functional internal audit teams include elements of social evaluation, allowing for coverage of matters specific to Human Rights. Managing Directors’ performance evaluations include social as well as societal and economic aspects of performance. The targets considered are specific to each affiliate. Respect for freedom of association 3.4.3.2 and the right to collective bargaining Pernod Ricard is committed to ensuring freedom of association and the right to collective bargaining. Further information is presented in the paragraph on “Labour relations” of the subsection “Empower our employees”. Non-discrimination 3.4.3.3 The principle of non-discrimination forms the basis of the Group’s Human Resources practices, particularly for recruitment and career development activities. Pernod Ricard is officially committed to combating discrimination. Pernod Ricard is a signatory to the United Nations Global Compact and communicates on this principle. In 2003, Pernod Ricard also signed up to the Business Workplace Diversity Charter, which aims to encourage the employment of different members of French society. This Charter bans all forms of discrimination when recruiting, during training and in professional development. Diversity is a major strategic focus for the Group; the section on “Employee development and employability” expands on this.

Our approach to taxation We apply the following principles in tax matters: Support for operational activity in compliance with applicable ● regulations; Integrity in the conduct of tax matters; ● Tax management that is both proactive and efficient in order to ● preserve and maximise the value generated for the Group and its shareholders. The Group Pernod Ricard has a number of subsidiaries in some 85 countries in which it operates. Whenever possible, management makes every effort to liquidate any dormant or quasi-dormant subsidiary inherited from past acquisitions. Pernod Ricard is vigilant as to the operational and commercial reality of its transactions and refuses to take part in any artificial tax arrangements. The Group will only use tax incentives after taking into account their impact on our brands, our reputation and our corporate social responsibility. Transfer pricing Pernod Ricard’s strategy and organisation is 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 between independent parties). An efficient organisation The Group Pernod Ricard has a team of qualified and well-trained tax specialists working under the supervision of the EVP Finance, IT and Operations. We have established clear internal control principles on tax matters available to all employees on the Intranet. 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 on the basis of the Group’s best estimate based on the information available (in particular that provided by the Group’s legal and tax advisors) and presented regularly to the Audit Committee. International transparency promotion 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. We also participate in the development of corporate tax policies, tax transparency initiatives and tax legislation by taking part in public consultations.

101

PERNOD RICARD REGISTRATION DOCUMENT 2017/2018