RISK FACTORS AND INTERNAL CONTROL 2.1.4.3 Risk relating to foreign exchange rate 2.1.4.5 Risk relating to counterparty The exchange rate risk and the system in place to The counterparty risk and the system in place to manage this risk are described in note 23.2 of the manage this risk are described in note 23.4 of the Notes to the Rexel Group’s consolidated financial Notes to the Rexel Group’s consolidated financial statements for the year ended December 31, 2017, statements for the year ended December 31, 2017, set forth in section 5.2 “Consol idated Financial set forth in section 5.2 “Consol idated Financial Statements” of this Registration document. Statements” of this Registration document. 2.1.4.4 Risk relating to liquidity 2.1.4.6 Risk relating to equity instruments With the exception of Rexel’s treasury shares, The liquidity risk and the system in place to manage the Rexel Group does not hold, as of the date of this risk are detailed in note 23.3 of the Notes to the this Registration document, any interests in listed Rexel Group’s consol idated financial statements companies. for the year ended December 31, 2017, set forth in section 5.2 “Consolidated Financial Statements” of As at December 31, 2017, Rexel held 1,289,369 of its this Registration document. own shares, as detailed in paragraph 3.8.3 “Treasury shares and purchase by Rexel of its own shares” of A description of the Rexel Group’s indebtedness is this Registration document. provided in paragraph 5.1.2.2 “Sources of financing” of this Registration document. Therefore, the Rexel Group believes that it is not subject to any risk in relation to shares of l isted A quarterly review of the Group’s l iquidity level companies, other than the risk relating to the is performed during Audit and Risk Committees. hedging assets of the pension obligations referred Corrective measures would be taken if the level of to in paragraph 2.1.2.5 “Risks relating to pension liquidity became lower than adequate. plans” of this Registration document. 2.2 INSURANCE The Rexel Group’s insurance policy focuses on the mitigated given the density of its branch network coverage of insurable risks the occurrence of which which limits the impact of accidents on one or more could result in a material negative impact on its of its branches. business activities. Accordingly, the Rexel Group has implemented insurance programs that cover its The insurance programs of the Rexel Group business, distribution centers and branches against underwritten by leading international insurance material damage and losses (property damage companies cover in particular the following risks: and subsequent operating losses) caused by unforeseeable and difficult to control events, as well •Property damage to the assets of the Rexel Group as civil liability. These programs cover al l the risks caused by an external unexpected event, including relating to the professional distribution of electrical fire, explosion, water damage, lightning, storm, products and the locations of the Rexel Group. flooding, natural hazards, as wel l as subsequent operating losses; and In accordance with the risk management procedure described above, the Rexel Group implements a •Civil liability: bodily injury, property damage and policy of prevention and site protection in order financial losses resulting from material damage to reduce the probability of occurrence, and the caused to third parties by the Rexel Group or severity of losses, in particular: training of branch products and services sold by the Rexel Group. managers, audit of main sites, follow-up of guidelines from security professionals. Given its international operations and applicable regulations, the Rexel Group has taken out local In addition, the Rexel Group believes that the impact insurance policies in order to take into account local of potential losses on its financial situation may be practice and/or obligations in the relevant countries. REXEL 2017 – REGISTRATION DOCUMENT 46