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PERNOD RICARD GROUP INTERNAL CONTROL PRINCIPLES

March 2016

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TABLE OF CONTENTS INTRODUCTION INTERNAL CONTROL CYCLES -1- ORGANISATION 4 -2- PURCHASE TO PAY (PURCHASING) 6 -3- ORDER TO CASH (SALES) 8 -4- HUMAN RESOURCES 9 -5- PRODUCTION AND QSE 10 -6- SUPPLY CHAIN MANAGEMENT 11 -7- MARKETING 12 -8- TREASURY 13 -9- FINANCIAL STATEMENT PREPARATION 14 -10- CAPEX 15 -11- LEGAL 16 -12- TAX AND DUTIES 17 -13- IT 18 -14- COMMUNICATION 19 -15- CORPORATE SOCIAL RESPONSIBILITY (CSR) 20 -16- INSURANCE 21

GLOSSARY ABBREVIATIONS

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INTRODUCTION The objective of internal control is to prevent and control risks arising from the activities of the Group. Topics covered include accounting and financial risks, as well as operational and compliance risks including error and fraud. You will find hereafter the Pernod Ricard Group internal control principles, updated in March 2016, organized according to the 16 operational cycles identified within Pernod Ricard organisation. This document represents a key component of the internal control at Pernod Ricard, outlining the common platform of all principles and rules applying to each Group’s affiliate. It is applicable to all functions, in all types of affiliates (Regions, Brand Companies, Market Companies) in all countries where Pernod Ricard operates. Each affiliate is in charge of ensuring the compliance with the internal control principles, through local policies and procedures as well as resource allocation. Once per year, a representation letter is prepared by each affiliate’s management to the CEO of the Supervising Entity, to confirm the satisfactory level of internal controls in place and to confirm the information contained in the yearly self-assessment questionnaire on internal control (so called “LSF” questionnaire – Loi de Sécurité Financière). This questionnaire has been reviewed entirely in order to be fully aligned with the internal control principles updated in March 2016. The following 20 pages are not just about sets of procedures or finance-related processes: they encompass a large scope of operations and activities requiring control and documentation in order to ensure quality, efficiency and continuity.

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-1- ORGANISATION

1.1 PERNOD RICARD CHARTER x The affiliate’s operations are performed in accordance with the Pernod Ricard Charter which is the reference

document that details the Group’s culture and organisation: o Culture: ambition, vision, mission, business model, leadership and people management, corporate social

responsibility. o Organisation: corporate governance, overall organisation, roles & responsibilities of the Headquarters,

Regions, Market Companies and Brand Companies. x The Pernod Ricard Charter is communicated to all employees and is available on the Pernod Ricard intranet.

1.2 AFFILIATE’S MANAGEMENTx A Management Committee is in place. Agenda and minutes of meetings are formalized. x Ad hoc committees are in place in the affiliate as required by local regulations and/or by business needs. x Local management ensures the affiliate’s operations are executed in accordance with local regulations. x Governing bodies are in place according to local laws and regulations. Appointments of their members are reviewed

by the Supervising Entity.

1.3 DELEGATION OF AUTHORITY ¾ Internal limitation of authority of the CEO of Pernod Ricard affiliates for selected operations: on top of the

corporate governance rules included in the Pernod Ricard Charter, formal validation is compulsory for selected operations:

CAPEX

Committing CAPEX investment

Direct affiliates* ¾ Written validation to be obtained from Headquarters on a project by project basis: � From Head of Operations for industrial CAPEX according to the rules outlined in the ‘Industrial

CAPEX Approval’ instructions � From Head of IT for IT CAPEX according to the rules outlined in the ‘IT CAPEX Approval’

instructions � From Managing Director Finance & Operations for other CAPEX investment > 0.5 M€

¾ Any project deviation > 0.5 M€ or non-budgeted project > 0.5 M€ has to follow the same validation process

Indirect affiliates ¾ Comply with instructions from direct affiliates / Regions in accordance with above rules. ¾ Obtain written validation from Supervising Entity for any project > 0.5 M€.

TREASURY

Contracting borrowings without mortgage or guarantee on corporate assets Limitation does not apply for Group intercompany borrowings

Direct affiliates* Written validation to be obtained from Headquarters (Head of Treasury) for transactions > 5 M€ individually or in aggregate Indirect affiliates Written validation to be obtained from Headquarters (Head of Treasury) for any transaction > 1 M€

Contracting borrowings with mortgage or guarantee on corporate assets

No internal limitation of authority Validation by the Headquarters is compulsory

Contracting any derivative instrument

Issuing loans and advances to companies or individuals Limitation does not apply for Group intercompany loans, advances to Group employees and extension of payment terms Granting charges, sureties or guarantees Limitation does not apply for bank guarantees given to tax and customs authorities in the normal course of business

CORPORATE ACQUISITIONS / DISPOSALS

Concluding any joint investment partnership or operation with other companies (joint-venture...)

No internal limitation of authority Validation by the Headquarters is compulsory

Acquiring or disposing of businesses, real estate or strategic assets (excluding, however, assets acquired or disposed in the ordinary course of business) Acquiring or disposing of shares Acquiring or disposing of any IP rights (trademarks, patents…) In general, undertaking any investment in any companies or investment vehicles

*Direct affiliates include, as of July 1st, 2016, Pernod, Ricard, TAC, CBL, MMPJ, IDL, PRW, HCI, GTR, PR EMEA, PR Asia and PR North America

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x The affiliate’s Delegation of Authority matrix: the Management Committee has defined a Delegation of Authority matrix which details the authorisation limits within the affiliate, taking into account the principle of segregation of incompatible duties.

1.4 RISK MANAGEMENT

x An on-going risk management process is implemented, enabling the affiliate to: o Identify business and financial risks, o Evaluate the magnitude of each risk, o Define and implement adequate measures and contingency plans.

x A formal analysis of risks (risk mapping) is periodically prepared and shared with the affiliate’s Management Committee and with the Supervising Entity.

1.5 COMMUNICATION OF SPECIFIC ITEMS TO SUPERVISING ENTITY x As part of transparent ways of working, any material event or incident that could have a significant consequence for

the affiliate is immediately reported to the Supervising Entity (fraud, claim, tax issue, accident on a production site…). x The following matters are periodically monitored by the CEO and the CFO of the affiliate, and brought to the attention

of the Supervising Entity: o For the producers of ageing spirits: adequacy of capital expenditure, procurement (long-term contracts) and

distillation policies in relation to future sales and inventory levels, o Wine purchasing: adequacy of grape quantities purchased in relation to the level of future sales, o Long-term purchasing: multi-year commitments (long term contracts, subcontracting contracts, significant

leasing contracts, advertising agency contracts, multi-year investment programs...), whenever these commitments exceed a materiality threshold set by the affiliate.

1.6 PERNOD RICARD CODE OF BUSINESS CONDUCT x Pernod Ricard Code of Business Conduct (and its related policies) has been locally communicated to employees and

action plan is under process to ensure compliance. x Guidelines and controls are in place to ensure the risks of fraud and bribery (by or on behalf of the Group) are

minimized.

1.7 MANUAL OF PROCEDURES / OTHER CONTROLS x A comprehensive manual of internal procedures exists in accordance with the Pernod Ricard Group Internal Control

Principles. It covers all affiliates’ operations and is periodically updated and communicated to employees. x Guidelines are in place for the retention of documents and IT records, in accordance with the local laws / regulations.

DOCUMENTS OF REFERENCE

x Pernod Ricard Charter x Pernod Ricard Group Internal Control Principles x Pernod Ricard Code of Business Conduct (and

related policies)

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-2- PURCHASE TO PAY (PURCHASING)

The following principles apply to all types of purchases (industrial, marketing, IT, overheads,…) and cover all steps of the purchasing process from supplier selection to cash disbursement.

2.1 ORGANISATION x An organisation is in place to efficiently support the purchasing process.

The following approaches are recommended: o Coordination of certain purchases (notably industrial) by the Headquarters’ purchasing department, o Coordination by a dedicated purchasing department within the affiliate, o Dedicated buyers within the affiliates’ departments (marketing, industrial…).

x Purchasing procedures detailing all the steps in the purchasing process (from supplier selection to cash disbursement) are implemented for all types of purchases. They are periodically updated and communicated to the relevant people in the affiliate.

x Ethical rules of purchasing are defined and communicated to all people involved, in accordance with the Pernod Ricard Procurement Code of Ethics and the Pernod Ricard Policy on Responsible Procurement. These two reference documents notably include:

o Rules for gift acceptance, conflict of interests and confidentiality, o Principles related to the protection of the environment, human rights and responsible drinking.

x A purchasing monitoring process is in place. It may feature:

o Implementation of KPIs, enabling notably an analysis of purchasing performance, o Regular audits of purchasing activities if needs be.

2.2 SEGREGATION OF INCOMPATIBLE DUTIES x Incompatible duties are performed by different persons. For instance, the following tasks should be performed by different persons:

o Supplier negotiations and relations (purchase order), o Receipt of goods / services, o Invoice booking, o Invoice payment.

When incompatible duties cannot be segregated, compensating controls are implemented. x IT access rights are aligned with the segregation of incompatible duties principle.

2.3 SUPPLIERS SELECTION x A selection process is in place to ensure the most appropriate choice of suppliers, i.e. the choice is:

o Formalized, o Justified, o Formally approved.

It can be performed through: o A competitive bid tender process (involving a minimum of 3 suppliers), o Use of an up-to-date list of local preferred suppliers (i.e. negotiated prices), o Coordination with Headquarters / Region to leverage Group suppliers.

x Based on the risk assessment and in any case above a materiality threshold defined by the affiliate, supplier selection

includes a formal assessment of the following criteria: o Compliance with applicable laws and regulations, o Financial strength, o Quality of service, o Compliance with the Pernod Ricard Supplier CSR Commitment.

2.4 SUPPLIER MASTERFILE x Creation and modifications of key information within the supplier masterfile are properly approved. When a change

of IBAN (bank details) is requested by vendor, a systematic authenticity check is performed x IT access rights to supplier masterfile are adequately restricted and managed, with a specific focus on bank account

numbers.

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2.5 CONTRACTING

x A contractual framework exists, with an adequate legal review. It may feature:

o The existence of General Terms and Conditions of purchase reviewed by the legal function and approved by the affiliate’s Management Committee,

o A formal legal review prior to commitment for key purchases (depending on nature / amount), o Formalization of contracts, signed according to the affiliate’s Delegation of Authority matrix.

2.6 ORDERING x A purchase order is raised for all commitments exceeding a threshold set by the affiliate. x Purchase orders and commitments are formally approved according to the Delegation of Authority matrix.

2.7 INVOICE VALIDATION AND PAYMENT APPROVAL x Invoice validation and payment approval are performed according to the affiliate’s Delegation of Authority matrix.

It is recommended to implement a three-way match process (purchase order, good/service receipt, and invoice).

2.8 SUPPLIERS PERFORMANCE ASSESSMENT x Performance of major suppliers is periodically and formally assessed.

DOCUMENTS OF REFERENCE x Pernod Ricard Procurement Code of Ethics x Pernod Ricard Policy on Responsible Procurement x Pernod Ricard Supplier CSR Commitment

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-3- ORDER TO CASH (SALES)

3.1 ORGANISATION x An organisation is implemented to efficiently support the sales activity:

o Roles and responsibilities between commercial and finance departments are clearly defined, o Sales people are incentivized on appropriate objectives.

x Procedures covering all the steps in the ‘order to cash’ process (from customer acceptance to cash collection) are formalized and enforced.

x Customer acceptance process is subject to formal approval steps: Credit check and ‘Know Your Customer’ (in accordance with local anti-money laundering procedure).

x A sales monitoring process is in place: o Profitability monitoring by products / distribution channels / customers, o Follow-up of appropriate KPIs.

x A trade inventory monitoring process is in place to monitor inventory held by non-Group customers for the main brands distributed.

3.2 SEGREGATION OF INCOMPATIBLE DUTIES x Incompatible duties are performed by different persons, especially as regards price list modifications, discount

approvals, shipping, accounts receivables and credit control. When incompatible duties cannot be segregated, compensating controls are implemented.

x IT access rights are aligned with the Segregation of Duties principle.

3.3 COMMERCIAL CONDITIONS x A commercial policy is formalized and enforced, notably including:

o Price structure by brand / channel / customer (from affiliates’ price list to retail sales price), o Discount schemes, o Rules for products returned by customers.

x Negotiated commercial conditions are subject to a dedicated approval process in accordance with the Delegation of Authority matrix.

x Commercial conditions are formally communicated to each customer.

3.4 CONTRACTING x A contractual framework exists, with an adequate legal review. It may feature:

o The existence of sales General Trade Terms reviewed by the legal function and approved by the affiliate’s Management Committee,

o A formal legal review of specific commercial agreements, o Formalization of contracts, signed according to the affiliate’s Delegation of Authority matrix.

3.5 CREDIT MANAGEMENT x A credit management policy exists:

o As part of the credit management policy, credit limits are defined based on formal criteria (sales, seasonality, financial strength); they are periodically reviewed and duly approved,

o Payment terms are validated by the finance department. x Any exception to the credit management policy strictly follows a defined authorisation process.

3.6 CUSTOMER MASTERFILE x Creation and modifications of key information within the customer masterfile are properly approved, especially sales

terms, customer bank details and delivery address. x IT access rights to customer masterfile and price list(s) are adequately restricted and managed.

3.7 ORDER PROCESSING x Order processing controls are in place, including price, quantities, delivery details, payment terms, credit limits…

3.8 CREDIT CONTROL x Cash collection is closely monitored, including:

o A periodic review of customer ageing balance, o A formal escalation process as regards overdue receivables (e.g. reminder letters, legal proceedings), o When applicable, reconciliation between affiliate’s trade receivables and customer’s trade payables.

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-4- HUMAN RESOURCES

4.1 ORGANISATION x HR organisation is in place, with formalized and enforced set of procedures. x IT security and access rights to HR sensitive data are adequately restricted and managed. x Working environment is organized in accordance with Pernod Ricard Health and Safety Guidelines. x Adequate segregation of incompatible duties is implemented, notably as regards payroll validation. x Monitoring is in place in order to ensure control of payroll and other HR-related costs.

4.2 RECRUITMENT, EMPLOYEES ADMINISTRATION, TERMINATION x A comprehensive recruitment procedure is in place, including relevant background checks. x Induction process for new employees includes communication of key internal documents (Pernod Ricard Charter,

Responsible Drinking, Pernod Ricard Code of Business Conduct…). x All employees have an up-to-date job description for their position. x A yearly appraisal process is in place and feedback is given to employees. x All recruitments and redundancies of CODI members are subject to validation by the Supervising Entity. x Existence of a process to authorize leaves and ensure that people are taking their leaves each year. x Talent management including succession planning is consistent with the Group HR policy. x Employee satisfaction is monitored on a regular basis. x Any restructuring plan (more than 10 employees) is submitted to the Supervising Entity for validation. x End of contracts is subject to a specific procedure, especially including IT & physical access removal.

4.3 COMPENSATION & BENEFITS x Any Compensation & Benefit proposal (salary increase, bonus…) is formally validated by the N+2 of the employee. x Advances and loans to employees are subject to an internal validation process. x Significant collective agreements or commitments must be submitted to the Headquarters’ HR department for

validation, regardless of their nature (Profit Sharing, Pension Plan, Health, Disabilities, Death...). x Expatriate management is consistent with the Group’s international mobility policy.

4.4 TRAVEL AND ENTERTAINMENT (T&E) A T&E expenses policy is in place, including the following principles:

x Each expense involving more than one employee is always paid by the most senior employee. x Existence of a comprehensive and formal T&E expenses validation process for all employees, including the CEO. x As regards the CEOs:

o T&E expenses are validated by the affiliate’s CFO and HR Director. o Once a year, the affiliate’s CFO and HR Director send a joint report (cf. Annual letter on CEO’s T&E):

� certifying that travel and entertainment expenses incurred by the CEO are committed in the interest of the affiliate,

� confirming that they are not aware of any personal expense incurred by the CEO that would have been paid by a less senior employee,

� enclosing an annual summary of travel and entertainment expenses from the CEO (no predefined format).

This report is sent to the HR Director of the Supervising Entity, who is in charge of keeping his/her CEO informed.

DOCUMENTS OF REFERENCE x Pernod Ricard Health and Safety Guidelines x Annual letter on CEO’s T&E

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-5- PRODUCTION AND QSE

5.1 ORGANISATION x A local sustainable performance policy is defined in accordance with Pernod Ricard Sustainable Performance Policy,

and communicated to all relevant employees. x Affiliates comply with the Pernod Ricard QSE Standards and enforce the minimum requirements defined in the QSE

Guidelines, in particular by: o Implementing a formal integrated management system based on ISO 9001, ISO 14001, OHSAS 18001 and ISO

22000 standards, in order to support risk and performance management within operational activities, o Ensuring the quality of products, and their compliance to food safety and other applicable requirements and

regulations (including for co-packing activities), with a special focus on New Products Development, o Ensuring safe working conditions for people in operations, o Minimizing the environmental impacts of activities and supply chain, o Protecting assets and ensuring continuity of operations in case of disaster.

x A continuous improvement program is in place to measure and challenge performance, and increase the efficiency of production.

x Organisation enables to adequately monitor production costs and manufacturing variances.

5.2 LONG TERM INVENTORY PLANNING x The adequacy between inventory and long term sales forecast is assessed in order to:

o Evaluate production requirements (distillation, purchase of bulk, raw materials), o Identify risk of inventory shortage / surplus and implement relevant action plans.

x Sales of bulk are authorised by the affiliate’s CEO.

5.3 PRODUCTION PLANNING x A production plan exists. It is:

o Formally approved by an appropriate level of management, o Based on sales forecasts and orders at stock-keeping unit (sku) level.

5.4 QUALITY, SAFETY AND ENVIRONMENT x Periodic audits of production processes are performed to monitor compliance with QSE standards. x Manufacturing affiliates ensure compliance of products sold with markets laws and regulations (product safety,

product formulation, labelling…). x Any customer claim is properly tracked. x Rules, processes and systems exist to ensure healthy working conditions as well as the safety and security of persons

on industrial sites and throughout the production process. x The affiliate can demonstrate its commitment to environmental protection.

5.5 CO-PACKING x Roles and responsibilities of co-packers in the production processes are clearly defined and documented. x Co-packers’ processes are periodically audited by the affiliate.

5.6 INDUSTRIAL RISK ASSESSMENT AND CONTINGENCY PLAN x A formal risk assessment is periodically performed for critical production processes (including worst case scenario). It

addresses at least: o Fire, machinery breakdown, natural disaster, o Shortage of strategic supplies, o Labour unrest.

x Contingency plans (i.e. business continuity plans) are prepared to mitigate the major risks identified. x Contingency plans are presented to the Supervising Entity.

DOCUMENTS OF REFERENCE x Pernod Ricard Sustainable Performance Policy x Pernod Ricard QSE Standards (and related guidelines)

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-6- SUPPLY CHAIN MANAGEMENT

The following principles apply to finished products, raw material, dry materials and Point Of Sale materials (POS).

6.1 ORGANISATION x An organisation is in place to efficiently control supply chain activities, complying with the Segregation of Duties

principle. x Supply chain procedures are formalized and enforced. x KPIs are implemented to monitor supply chain performance, including:

o Logistics costs, o Inventory levels (including slow movers), o Level of service, o Sales forecasts performance.

It includes control on outsourced operations. x Inventory levels are closely monitored to mitigate shortage / surplus risks.

6.2 INVENTORY POLICY x An inventory policy is formalized, covering:

o Roles and responsibilities of all stakeholders, o Lead times, o Safety stock levels, o Service level target.

x A formal approval workflow exists for all inventory movements (shipping, sales returns, transfers…). x For any inventory destruction, a specific procedure is strictly applied.

6.3 PHYSICAL INVENTORY x A comprehensive physical count of inventory is performed once a year (either cycle counts or annual physical count).

A written procedure details all the steps of the physical inventory count. x Discrepancies between physical inventory counts and accounting records are investigated and adjustments are

formally approved. x Inventories are maintained in a physically secured environment (protection from theft, loss and contamination). x Inventories maintained at third party locations are adequately monitored and accounted for.

6.4 INVENTORY MOVEMENTS RECORDING x Procedures are implemented to ensure completeness and accuracy of inventory movement records. x An IT inventory system is in place to properly record inventory movements.

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-7- MARKETING

The following principles apply to Brand Companies and Market Companies. Principles related to Advertising & Promotion (A&P) purchasing process are included in the “Purchasing cycle” section.

7.1 ORGANISATION x Product-mix at Market Companies (range, price, positioning, distribution channel strategy, consumer target) is

approved by Brand Companies. x Product modifications (NPD, new formula) follow a strict approval flow. x All advertising campaigns must comply with the Pernod Ricard Code for Commercial Communications. Submission to

the Group internal approval panel is mandatory for strategic brands and recommended for key local brands. x Advertising campaigns are validated as follows:

o By the Brand Company when the campaign relates to a brand in its scope of responsibilities, o And by the Headquarters when the campaign relates to a strategic brand.

7.2 MARKETING PLANNING x A strategic planning process is in place. x Brand plans are defined in accordance with:

o The global brand strategy, o Local specificities and market knowledge, o Lessons learned from past initiatives.

x A discretionary A&P budget is determined according to the Supervising Entity guidelines.

7.3 MARKETING EXECUTION x Clear objectives, targets and related KPIs are defined for marketing initiatives. x Post assessment of marketing initiatives is performed when relevant (media planning, off / on trade promotions…). x Significant variance in A&P forecast by the Market Company (e.g. vs. budget) for a key brand market combination is

agreed with the Brand Company, in accordance with the “LE sign-off” process.

DOCUMENTS OF REFERENCE x Pernod Ricard Code for Commercial Communications

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-8- TREASURY

8.1 ORGANISATION x Areas of responsibilities: Principles, processes and split of responsibilities between the Headquarters and its affiliates

applicable to Treasury operations (as described in the Cash Bible) are known, understood and applied by the affiliates. The following areas are under the responsibility of the Headquarters’ treasury department:

o Financial risk management (liquidity, interest rates, foreign exchange rates, counterpart and risks related to pension liabilities),

o External funding, including credit ratings monitoring, o Affiliate funding (through the dedicated structure Pernod Ricard Finance).

x Affiliate organisation: an organisation of cash management and monitoring is in place:

o Roles and responsibilities are clearly defined and formalized through written procedures. o A Delegation of Authority matrix covering treasury-related operations is in place, complying with the

limitations of authority defined in the “Organisation cycle”. o The Segregation of Duties principle is respected (payment processing, payment accounting and bank

reconciliation are performed by different persons, unless mitigated by compensating controls). o Adequate cash management tools are in place to ensure efficient control.

8.2 CASH RISK MANAGEMENT AND CASH MONITORING x Each affiliate contributes to the mitigation of treasury-related risks within its perimeter through appropriate actions

and timely communication, including: o Liquidity risk: ensuring sufficient level of liquidity to cover short and medium term needs at any time, o Counterpart risk: ensuring existence and solvency of counterparts / financial partners, o Foreign exchange risk: ensuring compliance with the Group policies in terms of Forex risk (when FX

transactions are not possible through the Group). x Each affiliate contributes to the optimization of Group cash generation:

o Process / tools are in place to foster cash optimization, o Implementation of a robust cash forecasting process, including a direct method (Cash In – Cash Out).

8.3 KEY CASH ACCOUNTING CONTROLS x Up-to-date authorized bank signatories are in place (a double signature system is recommended above a certain

threshold). x When compliant with the internal limitations (as listed in the “Organisation cycle”), all transactions in relation with

banks (such as short-term funding deposits) are properly contracted. x Cash transactions are properly accounted for and documented (including existence of a cash journal). x The number of bank accounts is minimized to ensure operational efficiency and strong control. x IFRS accounting entries related (among other) to financial derivatives instruments are well known, properly recorded

and documented. x Foreign exchange result is analyzed on a quarterly basis. x Bank reconciliation for all bank accounts is prepared on a monthly basis and validated by the CFO (or delegated to a

senior finance manager). x Cheques and petty cash are stored in a safe place with restricted access. x A cash count is periodically performed; any unexplained difference is validated by the CFO.

DOCUMENTS OF REFERENCE x Cash Bible

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-9- PREPARATION OF FINANCIAL STATEMENTS

9.1 STATUTORY ACCOUNTS AND CONSOLIDATION PACKAGE x The affiliate’s management is responsible for the preparation of:

o Local accounts, in accordance with local accounting principles as well as registration and financial communication obligations,

o Consolidation package (Balance Sheet, P&L, Cash Flow statement, related Notes and Appendices), in accordance with:

� IFRS/ Group Accounting Guidelines, � Group consolidation instructions.

x The affiliate’s CFO is responsible for the reporting to the Supervising Entity of all complex accounting issues not

covered by the Group Accounting Guidelines which may have a significant impact on the affiliate’s financial statements.

x A copy of the consolidation package, formally validated by the affiliate’s CFO, must be communicated to the Supervising Entity.

x A conclusion meeting must be systematically organised between the external auditors and the affiliate. Participation of the CFO is compulsory and participation of the CEO is recommended. The affiliate’s CFO immediately informs the Supervising Entity in case of issues raised by the external auditors which could have a significant impact on the affiliate’s financial statements.

9.2 STRATEGIC PLAN, BUDGET, ESTIMATES AND MONTHLY REPORTING x The affiliate’s management is responsible for the preparation of the strategic plan, annual budget (P&L and cash),

latest estimates and monthly reporting. Preparation and submission are performed in accordance with: o Timetable and guidelines communicated by the Supervising Entity, o Management Reporting Guide.

DOCUMENTS OF REFERENCE x Group Accounting Guidelines x Management Reporting Guide

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-10- CAPEX

The following principles apply to Capex approval, accounting and monitoring. The purchase itself is covered by the purchasing cycle.

10.1 GENERAL PRINCIPLES x Acquisition and disposal of assets are approved according to the Delegation of Authority matrix with validation by the

Supervising Entity as per the thresholds defined in the “Organisation cycle”. x Capex related procedures are formalized and enforced.

10.2 CAPEX PROJECT DOCUMENTATION x For significant productivity, capacity/expansion and IT projects, capital expenditure decisions are formally supported

by an analysis of criteria such as: o Level of future sales, o Cost structure, o Return on investment (vs. Group WACC rate), o Compliance with Group Sustainable Performance policy, o Analysis of alternative options (incl. subcontracting, leasing…).

10.3 MONITORING x Capex are monitored on a project by project basis. x A formal post-project profitability analysis is performed 12 months after significant Capex acquisition (Actual vs.

Budget ROI). x A physical inventory count of all fixed assets is performed periodically (at least every 5 years).

10.4 ACCOUNTING x Accounting of fixed assets is performed in accordance with local accounting principles for statutory accounts and with

IFRS / Group Accounting Guidelines for the consolidation package. Key points of attention are the following:

o Amortization, o Disposal, o Leasing.

x Fixed assets are tracked in a dedicated register and any movement is properly documented.

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-11- LEGAL

11.1 LITIGATION REPORTING x Potentially significant litigation are communicated to the Headquarters’ legal department (via the Region’s legal

department where applicable), such as: o Litigation affecting the criminal liability of the affiliate, or of any natural person within the Group (in particular

executive officers), o Litigation with a significant financial amount at stake (potentially above 250 K€, in accordance with the Legal

Reporting System), o Litigation that is initiated by or against a Brand Company or that may result in a loss of our rights in relation

to a brand (actions in ownership claim, invalidity actions, infringement actions or cancellation actions), o Litigation or disputes with key competitors, o Litigation involving a major player in the industry (whether a competitor or Group business partner) initiated

by or against the Group or foreseen by an affiliate, o Litigation that may otherwise significantly impact the Group (e.g. considerable media coverage).

11.2 INTELLECTUAL PROPERTY x Affiliate which engages in the process of developing new products, innovations, brands or brand extensions contacts

the Group Intellectual Property Hub (‘GIPH’) (i) to check the availability of the considered names/slogans if any, (ii) to ensure the relevant protection of the said assets (through trademark, design, copyright or patent filing) and (iii) to maintain such protection into force (through renewals/payment of annual fees), for all the relevant countries/markets.

x Any decision to abandon an IP asset, of whatever nature, is taken in consultation with the GIPH.

x Market Company informs the relevant brand owner and/or Brand Security whenever it identifies a potentially infringing product/behavior in its local market.

11.3 CONTRACTS MANAGEMENT x Prior to execution, all contracts that are significant to the affiliate’s business are approved by the affiliate’s legal

department (or the Region’s legal department where applicable).

x Notwithstanding the above, the Headquarters’ legal department reviews and approves all contracts and arrangements that deal with:

o Distribution or agency agreements that are strategic for the Group as a whole, o Other contracts that are strategic for the Group as a whole, o Licenses or assignment agreements related to a trademark of the Group, o Contracts including a non-competition clause or any comparable undertaking that may restrict the Group in

any future acquisition, o Contracts including an indemnity undertaking for an unlimited amount or any amount above 1M€, o Contracts related to the acquisition or disposal of IP rights, shares, business, real estate or strategic assets

(excluding, however, assets acquired or disposed in the ordinary course of business).

x New contracts put in place with a third-party who provides services for or on behalf of Pernod Ricard (whether such services require dealings with government bodies/officials, private organisations or companies) include the appropriate provision regarding bribery, corruption and fraud in order to protect Pernod Ricard, in accordance with Pernod Ricard Code of Business Conduct.

x The legal records of each company and of its affiliates are kept updated.

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-12- TAX AND DUTIES

12.1 AFFILIATE TAX COMPLIANCE x A process is in place to ensure all tax related transactions and obligations are properly handled in due course.

12.2 TAX AUDITS / TAX ADJUSTMENTS All tax audits and tax adjustments are immediately reported to the Headquarters’ tax department (via the Region where applicable).

12.3 TAX RISK ASSESSMENT x All new tax risks are:

o Communicated and discussed with the Headquarters’ tax department (via the Region where applicable), o Reported in the tax risk reporting process (every 6 months), o Accrued for and included in the consolidation package after validation by the Headquarters’ tax department.

x For any new tax risk detected, an action plan is settled and approved by the Headquarters’ tax department (or the Region where applicable) to minimize the risk in the future fiscal years.

12.4 TRANSFER PRICING x The transfer pricing policy is defined and coordinated by the Headquarters’ tax department in liaison with the Group

affiliates: o The affiliate is responsible for the documentation of transfer prices, in accordance with the local rules, laws

and practices, o All changes to local transfer pricing rules are reported to the Headquarters’ tax department (via the Region

where applicable).

12.5 TAX VIGILANCE x Tax rules changes and opportunities are discussed with the Headquarters’ tax department (via the Region where

applicable).

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- 13 – IT

13.1 IT GOVERNANCE x An IT organisation is in place with adequate resources to ensure appropriate IT internal controls, efficient support of

day-to-day business activities and management of project roadmap. x Roles and responsibilities of IT employees are clearly defined, documented and understood, in compliance with the

segregation of duties principles. x A local security policy is defined in accordance with the Group IT Security Policy. x IT policies and procedures are defined and kept up-to-date. Compliance with these policies and procedures is

periodically assessed. x Relevant KPIs are monitored to ensure adherence with business requirements. IT expenses are regularly compared

with the budget.

13.2 IT OPERATIONS x IT systems management:

o A map of applications and infrastructures is kept up-to-date. o License software usage is compliant with vendor licensing policies and with the Group IT Standards. Critical

solutions use a vendor-supported version. o Performance and security of critical IT service providers are periodically assessed. o Critical systems (availability, performance, patching and capacity planning), security (updates, back-up,

antivirus, security and firewalls) and interfaces are monitored. o Problem, Change and Release processes are in place and periodically reviewed.

x Users management: o A User Charter is defined describing do’s and don’ts for IT systems. Each employee as well as each external

consultant adheres to this Charter. o A user access procedure (including password policy and rules for login creation / modification / cancellation

/ periodic review) is defined for all critical systems. x Incident management:

o Incident and IT support procedures are defined and communicated to end users. o Incident severity classification is formalized. An escalation process for any major incident exists and can be

immediately activated by the organisation. o Incidents are recorded and tracked until they are solved. A knowledge base is in place to ease incident

resolution by the IT help desk. x IT security and back-up:

o Computer rooms are physically protected. o A back-up policy is defined. Restoration of critical systems is regularly tested. o A Disaster Recovery Plan (DRP) is in place and annually tested.

13.3 IT SOLUTIONS x Formal demand and portfolio processes, involving stakeholders, are in place to define, review and update the local IT

strategy and plan, encompassing: o Inventory of business requirements, in line with the business strategy and business support needs, o Implementation of the Group IT strategy, o Evaluation of the benefits, risks and mitigations, costs of each project contemplated.

x Project management: o All strategic projects are approved by the Management Committee and by Corporate IT (via the Region where

applicable). o Strategic project progress is monitored through a Steering Committee and regularly reported to Management

Committee and Corporate IT (via the Region where applicable). o Each project is governed by a formal methodology.

x A business owner is appointed for every critical IT solution. He/she is responsible for the quality, confidentiality and protection of data.

DOCUMENTS OF REFERENCE x Group IT Security policy x Group IT Standards

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-14- COMMUNICATION

Each employee’s behaviour can have an impact on Pernod Ricard’s reputation. Therefore a number of rules and principles need to be respected in all areas of communication: financial, press, institutional and internal.

14.1 COMMUNICATION POLICY AND WAYS OF WORKING x Corporate guidelines in terms of communication, as available on My Brands/Pernod Ricard Brand (‘Corporate

Guidelines’ sub-section), are known and applied. Notably, the Headquarters is responsible for all corporate communication (financial, institutional and internal), whereas product and brand communication is managed by the affiliates.

x A Communication Correspondent is appointed, in order to ensure the enforcement of the Group’s communication guidelines.

14.2 CRISIS COMMUNICATION x A formal crisis management plan is in place, in accordance with the Group Crisis Management Toolkit, in order to

facilitate rapid and effective response to crisis situations. It especially includes:

o Preventive measures (spokespeople identification, team training…), o The relevant information channel depending on the severity of the situation (3 different risk levels).

DOCUMENTS OF REFERENCE x Group Crisis Management Toolkit

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-15- CORPORATE SOCIAL RESPONSIBILITY (CSR)

15.1 ORGANISATION x Pernod Ricard’s commitment to Corporate Social Responsibility is concretized via the organisation in place to

implement CSR initiatives: o Pernod Ricard’s Headquarters has a dedicated CSR department, o Each affiliate has a CSR leader.

x Each affiliate complies with the CSR model and has a CSR action plan integrating the 4 pillars of the model:

o Empowerment of Pernod Ricard employees o Promotion of responsible drinking o Protection of our planet o Development of our communities and engagement of our partners

DOCUMENTS OF REFERENCE x CSR model

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-16- INSURANCE

Pernod Ricard’s recourse to insurance enables it to transfer the financial exposure of major risks faced by the Group. In addition to a prevention policy, insurance contracts must be implemented in order to mitigate risk exposure.

16.1 PERNOD RICARD GROUP INTERNATIONAL INSURANCE PROGRAM x Pernod Ricard has implemented a Group insurance program that all the Group affiliates must adhere to, except where

prevented by local regulations or where local terms and conditions for the same coverage are more favourable. The international Group insurance program is coordinated by the Headquarters’ internal audit department and encompasses the following:

o Property damage and business interruption, o General civil and product liability, o General environmental liability, o Product contamination and recall, o Directors and Officers liability, o Marine cargo / transport, o Fraud / crime.

x Each affiliate knows the main features of Group insurance programs, which are described in the Global Insurance

Summary issued each year by the Group’s insurance broker, summarizing the main guarantees, deductibles, exclusions and claim procedures to apply.

16.2 RESPONSIBILITY OF EACH AFFILIATE IN TERMS OF RISK ASSESSMENT, PREVENTION AND INSURANCE COVERAGE x In accordance with the Group’s decentralisation principle, each affiliate is responsible for the control and the coverage

of its risks. It is responsible for ensuring that: o A risk assessment process exists in order to ensure insurance coverage is adequate, o The information communicated to the Group’s insurance broker (values, locations…) is accurate and

exhaustive, o Industrial risks prevention matters are handled in collaboration with the Headquarters’ Operations

department (Operations Risk Manager), o Each claim is notified in due course to the Group’s insurance broker.

x Through local policies, each affiliate is in charge of covering risks not included in the scope of the Group Insurance

program (e.g. credit insurance, car fleet insurance…). In case of any issue or doubt in terms of coverage, affiliates should liaise with the Group’s insurance broker (or its local representative) and with the Headquarters’ internal audit department.

DOCUMENTS OF REFERENCE x Global Insurance Summary

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GLOSSARY Affiliate (or entity): management unit of Pernod Ricard Group (i.e. a Region, a Brand Company or a Market Company). Brand Company: as defined in Pernod Ricard Charter, a Brand Company is an affiliate in charge of developing and implementing, in conjunction with Market Companies, the strategies for the brands in their portfolio. Collective agreement: agreement between employer and employees related to the terms and conditions of employment, or any matter of mutual interest (e.g. pension plan, profit sharing scheme…) Contingency plans: processes / actions prepared by an affiliate to respond to an unplanned event. Also referred to as Business Continuity Plan (BCP) or Disaster Recovery Plan (DRP). Delegation of Authority matrix: summary of authority and responsibility assigned by affiliate’s management to affiliate’s employees to carry out specific operations, with defined limits. The Group: Pernod Ricard Group Group internal approval panel: committee that ensures advertising campaigns are compliant with the Pernod Ricard Code for Commercial Communications. The Headquarters: as defined in Pernod Ricard Charter, the Headquarters defines Group strategy and oversees its implementation. Management Committee (or “CODI”): Group of affiliate’s managers / directors that supervise the affiliate operations. Market Company: as defined in Pernod Ricard Charter, a Market Company is an affiliate responsible for managing the Group’s business in its local market. N+2: Manager of the manager of an employee in the affiliate’s organisation chart. Regions: as defined in Pernod Ricard Charter, Regions have operational responsibility for managing Group’s business in their respective geographic areas. Risk: a threat that an event, an action or inaction, affects the ability to reach strategic objectives and threatens value creation. Segregation of Duties (“SOD”) is an internal control fundamental principle: a single person cannot perform two incompatible duties in order to limit the risk of error or fraud. Supervising Entity: entity to which a given affiliate reports to in the Group organisation chart (e.g.: the Headquarters or a Region). Trade inventory: finished products held by non-Group customers that are held within the distribution channel (i.e. product sold to a direct customer but not yet sold to a consumer).

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ABBREVIATIONS A&P: Advertising and promotions BCP: Business Continuity Planning Capex: Capital Expenditure CEO: Chief Executive Officer CFO: Chief Financial Officer CI-CO: Cash In-Cash Out (direct cash flow forecast method) CODI: Comité de Direction / Management Committee CSR: Corporate Social Responsibility DRP: Disaster Recovery Plan GIPH: Group Intellectual Property Hub IFRS: International Financial Reporting Standards KPI: Key Performance Indicator NPD: New Product development P&L: Profit and loss statement POS materials: Point of sale materials QSE: Quality, Safety and Environmental standards. ROI: Return On Investment Sku: stock-code T&E: Travel and entertainment WACC: Weighted Average Cost of Capital

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