PERNOD-RICARD_REGISTRATION_DOCUMENT_2017-2018

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MANAGEMENT REPORT RISK MANAGEMENT

Resources provided by the Group to 4.6.6.2 manage the consequences of a claim, especially in the case of an industrial accident If a claim were to be filed affecting Pernod Ricard or a Group company, especially in the case of an industrial accident, it would rely on its brokers and insurers and all service providers as required to ensure the effective management and resolution of the claim. All these players have the experience and means required for managing exceptional situations.

The Group only records provisions for risks and contingencies when it is likely that a current obligation stemming from a past event will require the payment of an amount that can be reliably estimated. The amount of the provision is the best estimate of the outflow of resources required to extinguish this liability. Provisions accordingly involve an assessment by Group Management. 2018 Risk matrix 4.6.8 The Group’s risk matrix was updated in 2018. Every three years, the main risks facing Pernod Ricard are mapped for all Group subsidiaries and functions. The different risks are classified according to their potential impact and likelihood of occurrence. This matrix is a key risk management tool.

Risks and disputes: provisioning 4.6.7 procedure

As part of its commercial activities, the Group Pernod Ricard is involved in legal actions and subject to tax, customs and administrative audits.

• Loss of major site/ strategic inventory

HIGH

ͻ dŽdžŝĐ ĐŽŶƚĂŵŝŶĂƟŽŶ

ͻ LJďĞƌĂƩĂĐŬ

• Pressure on prices ͻ 'ĞŽƉŽůŝƟĐĂů ĂŶĚ macroeconomic instability ͻ EĞŐĂƟǀĞ ŵĞĚŝĂͬ social media campaign • Regulatory changes ;ŝŶĐů͘ ƚĂdž ĂŶĚ ĂŶƟͲĂůĐŽŚŽůͿ • Climate change and environmental damage

_ I MPA C T S O F R I S K S _

• Financial risks ;&y͕ ŝŶƚĞƌĞƐƚ ƌĂƚĞƐ͕ ĐƌĞĚŝƚͿ

ͻ ^ƵƉƉůLJ ĚŝƐƌƵƉƟŽŶ • Human safety risk

ͻ ƌĂŶĚ ƉŽƌƞŽůŝŽ ĐŚĂůůĞŶŐĞƐ ĂŶĚ ŶŽŶͲĂĚĂƉƚĂƟŽŶ ƚŽ ŶĞǁ ƚƌĞŶĚƐ ;ŝŶĐů͘ ŝŶǀĞŶƚŽƌLJ ŵĂŶĂŐĞŵĞŶƚͿ ͻ DĂũŽƌ ůŝƟŐĂƟŽŶ • Product quality issues

• Pensions

• Talent management • Fraud

ͻ ŽƵŶƚĞƌĨĞŝƟŶŐͬ/W ƌŝŐŚƚƐ

_

_

HIGH

P R O B A B I L I T Y I N D E X

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PERNOD RICARD REGISTRATION DOCUMENT 2017/2018