Danone // 2020 Universal Registration Document

2 Overview of activities, risk factors 2.7 Control environment DANONE UNIVERSAL REGISTRATION DOCUMENT 2020 35 Coordination of the community of local internal controllers The Internal Control Department oversees, trains and coordinates the network of internal controllers. It organizes the coordination of the community of internal control- lers by region to ensure better dissemination of key messages and broader sharing of best practices. It also organizes an annual workshop attended by the heads of internal control of each Clusters Business Services (see section Financial and accounting information hereafter), i.e. more than 30 participants. In addition, it organizes special training sessions on topics of current interest such as, in 2020, compliance issues. FINANCIAL AND ACCOUNTING INFORMATION Organization of the Finance function The Finance function is organized around: • central functional departments: • Corporate Finance, Control and Services to which the following departments report: (i) Treasury and Financing; (ii) Tax; (iii) Insurance; (iv) Consolidation, Reporting & Standards; (v) Internal Control; and (vi) Internal Audit; • Performance Planning and Management to which the (i) Controlling and (ii) Methods and Business Intelligence depart- ments report; • Strategy; • Mergers & Acquisitions; • Financial Communication. • transactional functions (accounting, treasury, etc.) and certain expertise functions organized by country or group of countries (Cluster Business Services), which are themselves grouped by continent or subcontinent (Zone Business Services); • operational finance departments for the Reporting Entities and key operating activities responsible for managing and steering the business; each Reporting Entity has an operational finance department, which is itself organized by region (Region Business Units) that include one unit per country or group of countries (Category Business Unit). In addition, the Finance function organizes Danone’s financial and accounting information production process around the following pillars: • maintenance and coordination of single sets of guidelines regarding finance and internal control, accessible to all Finance function employees through (i) the central tool that contains the Finance function’s main organizational principles and processes and Danone’s accounting principles and procedures, which are consistent with its internal control principles, and (ii) the DANgo framework (see section Internal control above); • definition of the roles and skills required at the various levels of the financial organization; • development and delivery of internal training programs, meetings to share information and best practices attended regularly by the main financial managers (particularly fromCluster Business Services and central functions) and organization of regular training sessions on specific accounting topics; • dissemination of information: each quarter, the entire finance function can log onto a website where the Chief Financial Officer comments on the activity for the quarter, the year-to-date financial results and the main challenges for the Company. Production of financial and accounting information Financial planning process Financial information is generated by a rigorous and comprehensive financial planning process that includes: • financial indicators used to monitor performance, the selection and relevance of which are reviewed on a regular basis; • a three-year strategic plan specifying annual key financial targets; • 12-month rolling forecasts performed quarterly on all financial indicators as well as monthly updates for certain indicators; • monthly reports; • monthly performance review meetings attended by the finance teams and the general managers of the Reporting Entities; • quarterly meetings to monitor execution of the strategy with the participation of the finance teams and general managers of the Reporting Entities. The overall financial planning process is administered by the Controlling Depar tment, and the Repor ting Entities’ finance departments are responsible for monitoring performance, capital expenditure and operating cash-flow. Members of the corporate departments visit the operating units on a regular basis (perfor- mance monitoring, procedure reviews, pre-closing meetings, ad hoc audits, progress on improving internal controls, follow-up on action plans and training in accounting standards). Financial and accounting information production processes Financial and accounting information is produced according to the control practices and procedures of the DANgo framework, which includes many points that address the quality of the financial and accounting information. Each operating unit prepares a detailedmonthly financial report and a semi-annual exhaustive consolidation package for the consolidated financial statements, and the Category Business Units and Cluster Business Services are jointly responsible for the production and content of their financial statements and internal control. Written confirmation of compliance with Danone’s procedures and with the standards applicable to financial information is sent twice a year to the central teams of the general manager and finance director of each subsidiary and those of the finance director of the Cluster Business Service covering it: representation letter regarding the closing of the interim and annual financial statements, including all subjects involving risk management, internal control and corporate law.