2021 UNIVERSAL REGISTRATION DOCUMENT

AUDIT COMMITTEE

◆ Independence within the meaning of the criteria of the AFEP-MEDEF Code as assessed by the Board of Directors.

● Director representing employees.

The committee is chaired by Ms Virginie Morgon, an independent Director who has recognised financial expertise.

The members of the Audit Committee have the necessary financial and accounting skills due to their professional experience and their good knowledge of the Group’s accounting and financial procedures.

The Statutory Auditors attend meetings, except for discussions on items that concern them. The Committee meets at least twice a year without management present, with the participation of the Statutory Auditors.

The Committee did not deem it appropriate to call upon outside expert.

The Chairman of the Board of Directors and the Chief Executive Officer are not members of the Committee.

REMITS

•  Monitoring the process for preparation of financial and non‑financial information.
•  Monitoring the statutory audit of the annual and consolidated financial statements by the Statutory Auditors.
•  Review of the audit plans and the Statutory Auditors’ work programme and the findings of their audits.
•  Monitoring of the Statutory Auditors’ independence.
•  Process for selecting Statutory Auditors.
•  Approval of non-audit services.
•  Monitoring the efficiency of the Internal Control and risk management systems.
•  Monitoring the Group’s main risk exposures and sensitivities.
•  Highlight the detection of any substantial risk that it believes is not being adequately handled.
•  Review of the programme and objectives of the Internal Audit Department and the Internal Control system methods and procedures used.
•  Annual review of the section of the Management Report on risk factors and Internal Control and risk management procedures.

2021 MAIN ACTIVITIES

•  Review of annual and interim results and balance sheet. Analysis of operating income by Division and Zone.
•  Review of the Independent Auditors’ Reports on parent company and consolidated financial statements (specifically the key points of the audit).
•  Review of the Statutory Auditors’ 2021 audit plan and the results of the audits carried out, their recommendations and the follow-up actions taken, as part of the statutory audit of the accounts.
•  Review of the audits carried out by the Statutory Auditors or the Independent Third-Party Organisation with regard to CSR information, expansion of the audit scope and improvement of data reliability making it possible to issue a voluntary reasonable assurance report on an array of indicators.
•  Statutory Auditors: review of the transition plan (digital tools to be deployed from April 2022) from the new joint Statutory Auditors submitted to the 2022 Annual General Meeting.
•  Approval by the Audit Committee of non-audit services.
•  Monitoring Internal Audit activities, including CSR commitments.
•  Regulatory changes relating to Sustainable Finance goals of the “Green Deal”, the Taxonomy Regulation and the draft revision of the Corporate Sustainability Reporting Directive.
•  Internal Control, Risks and Compliance: review of the systems implemented (in particular the Vigilance and Corruption Prevention Plan) and the proposal to update the Group’s risk mapping.
•  Review of legal risks and potential litigation and of major events that could have a significant impact on L’Oréal’s financial position and on its assets and liabilities.
•  Monitoring the business plan for major acquisitions, goodwill and impairment.
•  Data privacy: monitoring the policies implemented.
•  Taxation: reform of the international taxation system.
•  Transformation of the finance and legal functions as part of the 2030 vision.