REGISTRATION DOCUMENT 2013 ANNUAL FINANCIAL REPORT

REGISTRATION DOCUMENT 2013 ANNUAL FINANCIAL REPORT

Table of content 1 2 3 4 5 Page PRESENTATION OF THE GROUP / 5 1.1. Miion 6 1.2. Hitory 7 1.3. Buine activitie and trategic orientation 7 1.4. Internationalization and cometic market 10 1.5. RESEARCH & INNOVATION: an objective of excellence 14 1.6. Operation 16 1.7. Invetment policy 20 1.8. Rik factor 20 CORPORATE GOVERNANCE * / 29 2.1. Summary of the principle 30 2.2 The Board compoition and the way in which the Board work i prepared and organied 31 2.3. Remuneration of the Director and the executive officer 62 2.4. Summary of trading by Director and executive officer in L Oréal hare in 2013 75 2.5. Internal Control and Rik Management procedure (report of the Chairman of the Board of Director on Internal Control) 75 2.6. Statutory Auditor Report, prepared in accordance with Article L. 225-235 of the French Commercial Code on the report prepared by the Chairman of the Board of Director 83 2.7. Statutory Auditor Special Report on regulated agreement and commitment with third partie 84 KEY FIGURES AND COMMENTS ON THE 2013 FINANCIAL YEAR / 87 3.1. The Group buine activitie in 2013* 88 3.2. Financial highlight 94 3.3. Significant, recent event and propect 102 2013 CONSOLIDATED FINANCIAL STATEMENTS * / 105 4.1. Compared conolidated income tatement 106 4.2. Conolidated tatement of comprehenive income 107 4.3. Compared conolidated balance heet 108 4.4. Conolidated tatement of change in equity 109 4.5. Compared conolidated tatement of cah flow 110 4.6. Note to the conolidated financial tatement 111 4.7. Conolidated companie at December 31 t, 2013 159 4.8. S tatutory auditor report on the conolidated financial tatement 163 PARENT COMPANY FINANCIAL STATEMENTS * / 165 5.1. Compared income tatement 166 5.2. Compared balance heet 167 5.3. Change in hareholder equity 168 5.4. Statement of cah flow 169 5.5. Note to the parent company financial tatement 170 5.6. Table of ubidiarie and holding at December 31t, 2013 186 6 7 8 9 Page 5.7. Other information relating to the financial tatement of L Oréal parent company 189 5.8. Five-year financial ummary 190 5.9. Invetment (main change including hareholding threhold change) 191 5.10. Statutory auditor report on the financial tatement 192 CORPORATE SOCIAL, ENVIRONMENTAL AND SOCIETAL RESPONSIBILITY * / 195 6.1. Highlight for 2013 197 6.2. Social information 198 6.3. Environmental Information 212 6.4. Societal information 221 6.5. Table of concordance with the reporting tandard with regard to ocial, environmental and ocietal matter 230 6.6. Report by the Statutory Auditor, deignated a independent third partie, on the conolidated ocial, environmental and ocietal information included in the Management Report 232 STOCK MARKET INFORMATION SHARE CAPITAL / 235 7.1. Information relating to the Company 236 7.2. Information concerning the hare capital* 238 7.3. Shareholder tructure* 240 7.4. Long-Term Incentive Plan* 245 7.5. The L Oréal hare / L Oréal hare market 252 7.6. Information policy 257 ANNUAL GENERAL MEETING / 261 8.1. Draft reolution and Report of the Board of Director to the Annual General Meeting to be held on April 17 th, 2014 (a of February 10 th, 2014) 263 8.2. Statutory Auditor Special Report on the cancellation of hare purchaed by the company 276 APPENDIX / 277 9.1. Statutory Auditor 278 9.2. Hitorical financial information included by reference 278 9.3. Peron reponible for the Regitration Document and the Annual Financial Report 279 9.4. Declaration by the peron reponible for the Regitration Document and the Annual Financial Report 279 9.5. Regitration Document table of concordance 280 9.6. Annual Financial Report table of concordance 282 9.7. Table of concordance with the AMF Table on the remuneration of executive officer and Director 282 9.8. Table of concordance of the Management Report 283 Detailed chapter content can be found at the beginning of each chapter. * Thi information form an integral part of the Annual Financial Report a provided for in Article L. 451-1-2 of the French Monetary and Financial Code.

REGISTRATION DOCUMENT 2013 ANNUAL FINANCIAL REPORT In application of Article 212-13 of the General Regulation of the Autorité de Marché Financier (AMF), thi Regitration Document wa filed with the AMF on March 12 th, 2014. Thi Regitration Document may be ued in connection with a financial tranaction if it i accompanied by an information memorandum approved by the AMF. The document ha been prepared by the iuer and it ignatorie incur liability in thi regard. Thi i a free tranlation into Englih of the L Oréal 2013 Regitration Document iued in the French language and i provided olely for the convenience of Englih peaking reader. In cae of dicrepancy the French verion prevail. PEFC/10-31-1316 Thi document wa printed in France by an imprim Vert-certifi ed printing company, on recyclable, chlorine-free, PEFC-certifi ed paper uing pulp from foret managed according to utainable environmental, economic and ocial principle. Thi label recogni e the mot tranparent Regitration Document according to the criteria of the Annual Tranparency Ranking.

INTERVIEW / A THRILLING STAGE IN BUILDING THE NEW L ORÉAL 2 REGISTRATION DOCUMENT / L ORÉAL 2013

MESSAGE FROM THE CHAIRMAN AND CHIEF EXECUTIVE OFFICER Jean-Paul AGON CHAIRMAN AND CEO OF L ORÉAL What concluion can you draw from 2013? 2013 wa another good year for L Oréal. The group outperformed the market acro all diviion and geographic zone, poting ignificant growth in both reult and profitability. 2013 wa alo another year of progre in adapting the company to a changing world, and driving it efficiency, modernity and performance, o a to continue to build dynamic, utainable and profitable growth. Today more than ever, our brand portfolio i the mot varied, richet and mot powerful in the indutry. It i thi richne that enable u to meet the whole world beauty expectation o effectively. Through globaliation, our brand have trengthened their poition acro all geographic zone. Moreover, the group growth i well-balanced: Wetern Europe remain very olid, North America recorded another year of growth and market hare gain in a le buoyant context, and the New Market excluding Japan poted double-digit growth. I governance one of the factor in L Oréal ucce? There i no doubt about it. The quality of governance i underpinned by highly committed director endowed with complementary expertie. They enure that all deciion ait in the implementation of the trategic orientation they have approved. The Board draw on the quality of the contribution made by it pecialied committee, whoe remit have been What were the reaon behind thi good performance? Above all, thank to our product and our launche. It i eential in our buine: cometic i a upply-driven market where leaderhip i built up primarily through the attractivene and uperiority of product. Thi trong commitment to innovation i at the heart of L Oréal and enable u to tay one tep ahead. To rie to it, we have once again increaed our Reearch and Innovation budget, which have rien fater than our ale. We are inveting in all area: in Advanced Reearch and in formulation; in France and in our five regional hub, anchored in the planet major cometic market. Another reaon i the vitality of our brand. They play a key role in thee uccee. The brand are alway reinventing themelve, to tay perfectly attuned to conumer who are contantly changing. WE HAVE OUTPERFORMED THE MARKET ACROSS ALL DIVISIONS AND GEOGRAPHIC ZONES. And in term of reult? 2013 wa alo a good year for progre in reult and in profitability, which reached a record level. Thee reult once again confirm the trength of L Oréal buine model, which create value and generate cah flow. They illutrate the group ability to continue to deliver utainable and profitable growth. Their olidity, together with the company very favourable propect, have led the Board of Director to propoe to the next Annual General Meeting a further ignificant increae in dividend of +8.7% to 2.50 euro. expanded ince their creation. In 2014, the Board will propoe to the Annual General Meeting the appointment a new Board Director of Mr Belén Garijo, of Spanih nationality, Preident and CEO of Merck Serono, the pharmaceutical ubidiary of the German group Merck. Out of a total of fourteen director, five women will have a eat on the Board, and there will be a ubtantial proportion of independent director. In governance matter, L Oréal want it behavior to be exemplary too. REGISTRATION DOCUMENT / L ORÉAL 2013 3

UNIVERSALISATION, THE STRATEGY WE HAVE CHOSEN, IS GLOBALISATION THAT RESPECTS DIFFERENCES. You have made everal acquiition. Can you explain the reaoning behind them? On one hand there are acquiition that complement our portfolio of brand with a global vocation, like the American make-up brand Urban Decay, which i a tremendou addition to our luxury brand. The ame applie to Decléor and Carita, which will take u into a new buine, profeional kincare, broadening the growth potential of Profeional Product. On the other hand, there are acquiition with a local or regional vocation that will reinforce our geographic coverage: in Colombia with the make-up brand Vogue, in Kenya with Interbeauty and in Brazil with Emporio Body Store. Thee companie are accelerating our penetration of thee market tremendouly. All thee acquiition will make contribution to our organic growth in the future. You have continued the group tranformation proce. I a new L Oréal now emerging? Ye definitely. Over the lat few year, we have been adapting the group in all area, to make ure it i keeping pace with the major economic, digital and ocial change taking place in the world, and ready to grap all the opportunitie of the 21 t century. Adaptability i one of the group great trength. A New L Oréal i emerging, and it i well equipped to continue it miion beauty for all by applying it univeraliation trategy, and to purue it quet for one billion new conumer. In 2013, we added everal new cornertone to help build the New L Oréal: we changed our organiation, continued to rethink our marketing model, and made ambitiou new commitment in term of corporate reponibility. Why did you decide to further develop the group organiation? To make the group more agile, more efficient and better adapted to our univeraliation trategy. We have thu grouped together the elective diviion L Oréal Luxe, Active Cometic, Profeional Product and The Body Shop under the ame leaderhip, o they can hare their expertie and their bet practice more effectively. At the ame time, we have organied the global market into eight major homogeneou trategic region and localized the management of ditant region. Thi mean we can be even more attentive to our conumer and cloer to their apiration. And I am certain thi will really boot our univeraliation trategy. Univeraliation, the trategy we have choen for the group, i globaliation that repect difference. Where do you tand regarding the digital revolution? We have continued to tranform our marketing model to take advantage of the incredible opportunitie provided by digital media. Our viion of digital and traditional media i now totally integrated. All our brand acro all region have witched to digital. They have worked intenively to offer their conumer the very bet not only in information content but alo in ervice quality on the Internet, which i alo an additional ditribution channel for our brand. / STRATEGIC TRANSACTION BETWEEN L ORÉAL AND NESTLÉ In February 2014 you announced a trategic tranaction under which L Oréal will buy 48.5 million of it own hare from Netlé. What doe thi deal involve? Thi tranaction repreent a very poitive trategic move for L Oréal, it employee and it hareholder. The buyback of 48.5 million of our own hare, that i 8% of hare capital, will be partially financed through the dipoal to Netlé of our 50% take in Galderma for an enterprie value of 3.1 billion euro, and for the remainder in cah for an amount of 3.4 billion euro. L Oréal i thu focuing excluively on it cometic buine. L Oréal will benefit from the very ignificant and reinforced preence of the founding Bettencourt Meyer family, who will continue to fully upport the company a it alway did in the pat. Furthermore, Netlé, which ha alway been a loyal and contructive hareholder, will continue to provide it active upport. Latly, all of L Oréal hareholder will benefit from thi tranaction, with an accretive impact on the company earning, reulting from the buyback and ubequent cancellation of L Oréal hare held by Netlé. 4 REGISTRATION DOCUMENT / L ORÉAL 2013

1 PRESENTATION OF THE GROUP 1.1. MISSION 6 1.2. HISTORY 7 1.3. BUSINESS ACTIVITIES AND STRATEGIC ORIENTATIONS 7 1.3.1. The foundation of a winning trategy 7 1.3.2. An organiation that erve the Group development 8 1.4. INTERNATIONALIZATION AND COSMETICS MARKET 10 1.4.1. A hitorical preence in developed market 10 1.4.2. Rapid development outide Wetern Europe 10 1.4.3. A commitment to hared, utainable growth 11 1.4.4. Immene development potential 11 1.5. RESEARCH & INNOVATION: AN OBJECTIVE OF EXCELLENCE 14 1.5.1. Reearch, in the Group gene 14 1.5.2. One tep ahead in active principle 14 1.5.3. Animal teting: balancing ethic and innovation 14 1.5.4. A global governance for Reearch 15 1.5.5. Reearch in tune with the market 15 1.5.6. A new Reearch Hub in India 15 1.6. OPERATIONS 16 1.6.1. From ourcing to delivery, continuou improvement of indutrial efficiency 16 1.6.2. A well-oiled indutrial model 17 1.6.3. Continuou improvement and optimiation of production 17 1.6.4. Long-term partnerhip with upplier 17 1.6.5. L Oréal and it partner: working together to innovate 17 1.6.6. Strong commitment with regard to ocial reponibility and afety 17 1.6.7. Environmental protection at the heart of production 18 1.7. INVESTMENT POLICY 20 1.8. RISK FACTORS 20 1.8.1. Buine rik 20 1.8.2. Legal rik 23 1.8.3. Indutrial and environmental rik 24 1.8.4. Counterparty rik 25 1.8.5. Cutomer rik 25 1.8.6. Liquidity rik 25 1.8.7. Financial and market rik 25 1.8.8. Inurance 27 REGISTRATION DOCUMENT / L ORÉAL 2013 5

PRESENTATION OF THE GROUP 1 MISSION 1.1. MISSION Beauty for all For more than a century, L Oréal ha devoted itelf olely to one buine: beauty. It i a buine rich in meaning, a it enable all individual to expre their peronalitie, gain elf-confidence and open up to other. Beauty i a language L Oréal ha et itelf the miion of offering all women and men worldwide the bet of cometic innovation in term of quality, efficacy and afety. It purue thi goal by meeting the infinite diverity of beauty need and deire all over the world. Beauty i univeral Since it creation by a reearcher, the Group ha been puhing back the frontier of knowledge. It unique Reearch arm enable it to continually explore new territorie and invent the product of the future, while drawing inpiration from beauty ritual the world over. Beauty i a cience Providing acce to product that enhance well-being, mobiliing it innovative trength to preerve the beauty of the planet and upporting local communitie are exacting challenge, which are a ource of inpiration and creativity for L Oréal. Beauty i a commitment By drawing on the diverity of it team, and the richne and the complementarity of it brand portfolio, L Oréal ha made the univeraliation of beauty it project for the year to come. L Oréal, offering beauty for all 6 REGISTRATION DOCUMENT / L ORÉAL 2013

PRESENTATION OF THE GROUP BUSINESS ACTIVITIES AND STRATEGIC ORIENTATIONS 1.2. HISTORY 1 1909 Creation of Société Françaie de Teinture Inoffenive pour Cheveux by Eugène Schueller. 1929 Imédia, the firt quick oxidation hair colour. 1935 Ambre olaire, the firt un protection oil with filtering. 1954 Comair i named a L Oréal agent in the United State. 1957 Launch of Elnett hair lacquer. 1963 L Oréal enter the Pari Stock Market. 1964 Acquiition of Lancôme. 1965 Acquiition of Laboratoire Garnier. 1970 Acquiition of Biotherm. 1973 Acquiition of Gemey, an open door to the conumer make-up market. 1979 The firt model of a recontructed epidermi from L Oréal Reearch. 1981 Creation of Laboratoire dermatologique Galderma. 1989 Acquiition of La Roche-Poay. 1993 Acquiition of Redken 5 th avenue in the United State. 1994 Acquiition of American agent Comair. 1996 Acquiition of Maybelline in the United State. 1998-2000 Acquiition of Softheen and Caron in the United State and in South Africa. 2000 Acquiition of Matrix and Kiehl ince 1851 in the United State. 2003 L Oréal become the majority hareholder in Shu Uemura in Japan. 2004 Takeover of the Geparal holding company. 2006 Acquiition of The Body Shop. 2007 Creation of the L Oréal Corporate Foundation. 2008 Acquiition of YSL Beauté. 2009 L Oréal celebrated it centenary and et itelf the target of winning over one billion new conumer. 2010 Acquiition of Eie Cometic in the United State. 2011 Acquiition of Q-Med by Galderma, and of Clarionic. 2012 Acquiition of Urban Decay in the United State. 2013 Acquiition by The Body Shop of 51% of Emporio Body Store in Brazil. 1.3. BUSINESS ACTIVITIES AND STRATEGIC ORIENTATIONS 1.3.1. The foundation of a winning trategy 1.3.1.1. A GROWTH MARKET: AN IMMENSE POTENTIAL The world cometic market i worth approximately 175 billion in net manufacturer price. Over the lat fifteen year, it average annual growth i etimated at approximately +4.1%. Thi market, which ha experienced trong, regular growth, i alo particularly olid and reilient: at the peak of the world economic crii in 2008-2009, it continued to progre by nearly +3% in 2008 and +1% in 2009 before picking up again in 2010. Thi market grew +4.6% in 2012 and +3.8% in 2013 (1). Becaue the world will alway need beauty, the world cometic market ha a glowing future. Under the combined effect of population growth, urbaniation, progre in infratructure and growth in world GDP, the population with acce to modern cometic could grow by 50% over the next twenty year, booted by the rapid rie of the urban middle cla in the New Market. 1.3.1.2. ONE PURPOSE: BEAUTY For more than a century, L Oréal ha been puhing back the boundarie of cience to invent beauty and to offer men and women all over the world the bet of cometic in term of quality, efficacy and afety. Giving everyone acce to beauty by offering (1) Source: L Oréal etimate of worldwide cometic market baed on net manufacturer price excluding oap, toothpate, razor and blade. Excluding currency fluctuation. REGISTRATION DOCUMENT / L ORÉAL 2013 7

1 BUSINESS PRESENTATION OF THE GROUP ACTIVITIES AND STRATEGIC ORIENTATIONS product in harmony with their need, culture and expectation in their infinite diverity. Thi i the true meaning of our activity. 1.3.1.3. RESEARCH AND INNOVATION: INVENTING THE FUTURE OF BEAUTY L Oréal place reearch and innovation at the centre of it development model. With 23 reearch and 16 evaluation centre on all continent, the Group ha developed more than 130 molecule during the lat 40 year. More than 4,000 reearcher play their part in developing new formula and filed 624 patent in 2013. L Oréal i now entering the era of univeraliation and beauty for everyone. The exploration of new cientific and technological territorie i being enriched by thi global dimenion: with it in-depth knowledge of kin and hair in all latitude, L Oréal reearch create cometic product adapted to the world diverity. 1.3.1.4. THE PORTFOLIO OF COSMETICS BRANDS: OFFERING THE BEST OF BEAUTY IN EACH DISTRIBUTION CHANNEL With 28 international brand with divere cultural background preent in all ditribution channel, L Oréal i able to meet the apiration of all conumer whatever their origin, beauty habit or revenue level. The L Oréal team deign new product in all area of cometic: hair care, hair colour, kin care, make-up and perfume. 1.3.1.5. THE INTERNATIONALISATION OF DEVELOPMENT: ATTRACTING A BILLION NEW CONSUMERS Preent in 130 countrie, the Group ha hown it ability over the firt 100 year of it exitence to attract nearly 1 billion conumer, repreenting around 15% of the population of the planet. With accelerating globaliation, L Oréal miion i being enlarged: baed on it international poition and it power of innovation, the Group ambition i to conquer a billion new conumer by 2020 to 2025. 1.3.2. An organiation that erve the Group development 1.3.2.1. L ORÉAL S.A. L Oréal S.A. i a French company with it regitered office in France and which carrie out a commercial buine pecific to that country. In parallel, L Oréal S.A. act a a holding company and ha a role firtly of trategic coordination and econdly of cientific, indutrial and marketing coordination of the L Oréal Group on a global bai. The ubidiarie develop the Group buine activitie in the country or area in which they are located. In thi connection, they manufacture or have produced and commercialie the product that they decide to ell on their market. The L Oréal Group own the entire hare capital of the vat majority of it ubidiarie. It alo hold 50% of the hare capital of Galderma and Innéov developed in a joint venture with Netlé. 1.3.2.2. BRANCHES AND DIVISIONS The Cometic Branch, which repreent mot of the Group activitie (nearly 93% of it conolidated ale in 2013), i made up of 4 Operational Diviion which each correpond to a pecific marketing channel: the Profeional Product Diviion market product ued but alo old in hair alon. Privileged partner of hairdreer all around the world, it upport them in every facet of their development and offer them high-level training. It portfolio of differentiated brand meet the need of all type of alon. Profeional Product Diviion brand: L Oréal Profeionnel, Redken, Kératae and Matrix; the Conumer Product Diviion offer the bet in cometic innovation at acceible price in all ma-market retail channel (hypermarket, upermarket, drugtore and traditional tore) on every continent. Conumer Product Diviion brand: L Oréal Pari, Garnier, Maybelline, Softheen Caron and Eie; 1.3.1.6. A COMMITMENT TO RESPONSIBLE, SHARED AND SUSTAINABLE GROWTH With a particularly robut balance heet and a olid financial ituation, the Group can look forward to the future with confidence. Supported by loyal hareholder, vigilant governance and table management, L Oréal ha alway targeted contant, utainable growth. A a company which eek to be exemplary, and et itelf demanding tandard in order to limit it footprint on the planet, in October 2013, L Oréal launched it new commitment to utainability by 2020: Sharing beauty with all. Thi programme concern all the Group impact, and cover four area: innovating utainably, producing utainably, conuming utainably and haring growth. Detail of thi programme are et out in chapter 6, on page 196 to 198. L Oréal Luxe bring together a unique et of pretigiou brand. Thee brand are old through elective ditribution, broken down between department tore, perfumerie, travel retail outlet, but alo it own tore and through e-commerce webite. L Oréal Luxe Diviion brand: Lancôme, Giorgio Armani, Yve Saint Laurent, Biotherm, Kiehl, Ralph Lauren, Shu Uemura, Cacharel, Helena Rubintein, Dieel, Clarionic, Viktor & Rolf, and Urban Decay; the Active Cometic Diviion ditribute it product worldwide in healthcare product ditribution channel, primarily through pharmacie, drugtore, medipa and, in ome countrie, dermatologit. It unique portfolio of brand, which meet all the need of conumer in term of health-beauty, and it privileged partnerhip with healthcare profeional have made thi Diviion the world No. 1 in dermocometic. Active Cometic Diviion brand: Vichy, La Roche-Poay, SkinCeutical, Innéov and Roger & Gallet. 8 REGISTRATION DOCUMENT / L ORÉAL 2013

PRESENTATION OF THE GROUP BUSINESS ACTIVITIES AND STRATEGIC ORIENTATIONS Through it deciion, announced on May 17 th, 2013, to create a Group leaderhip role uperviing the Selective Diviion (L Oréal Luxe, Active Cometic, Profeional Product, The Body Shop), the Group ha affirmed it intent to further accelerate it development in all ditribution channel, by drawing on it know-how in each of it elective ale network. The hitoric market leader in the Travel Retail beauty egment, the Group announced on November 21, 2013 the creation of a Group Travel Retail Diviion which include, a well a the L Oréal Luxe brand, the brand of the other diviion: Active Cometic, Profeional Product, Conumer Product and The Body Shop. The Body Shop Branch repreent nearly 4% of conolidated ale in 2013. Founded in 1976 in the United Kingdom by Dame Anita Roddick, The Body Shop i known for it ethical commitment and it product with natural ingredient. More than 87% of it product contain ingredient from it Community Fair Trade programme. With a preence in 66 countrie, the brand ditribute it product and expree it value through a network of excluive tore but alo complementary ditribution channel: Internet ale and airport hop. The Dermatology Branch which repreent approximately 3% of conolidated Group ale (hare attributable to L Oréal), conit of Galderma, a joint venture et up by L Oréal and Netlé over 30 year ago. After poting regular growth for many year, the Galderma laboratory i puruing it development and ha made it mark a one of the leader in dermatology. A joint new releae, iued on February 11 th, 2014 by L Oréal and Netlé pecifie the term and condition of the propoed ale by L Oréal to Netlé of it take in Galderma (ee chapter 3, paragraph 3.3.2 on page 103 and 104). 1 (1) The Body Shop Cometic Branch Dermatology Branch Profeional Product Diviion Conumer Product Diviion Galderma (Joint-Venture Netlé / L Oréal) L Oréal Luxe Diviion Active Cometic Diviion 1.3.2.3. SUPPORT DIVISIONS Several pecialit Diviion provide their expertie and upport to the Branche and Operational Diviion: the Reearch and Innovation Diviion, in charge of fundamental and applied reearch; the Operation Diviion, in charge of coordination of production and the upply chain; the Human Relation Diviion, in charge of recruitment, training and talent development policie and co-ordination of ocial policy; 1.3.2.4. GEOGRAPHIC ZONES The Group international development ha naturally meant that L Oréal ha had to adapt it organiation to the need to co-ordinate the etablihment and development of it brand on every continent. Thu, variou geographical zone have been created, each with operational reponibility for the ubidiarie in the countrie of it region: Wetern Europe Zone; America Zone; the Adminitration and Finance Diviion, in charge of the Group financial policy, controlling and conolidation, information ytem, legal and tax co-ordination a well a financial communication and relation with hareholder and invetor; Aia, Pacific Zone; Eatern Europe Zone; Africa, Middle Eat Zone. the Communication, Sutainability and Public Affair Diviion, in charge of co-ordination of corporate communication, coordination of communication by the Operational Diviion and brand and Sutainable Development. (1) Almot all ubidiarie are directly attached to L Oréal parent company with a holding or control percentage equal to or cloe to 100%. The detailed lit of thee ubidiarie i et out in the note to the conolidated and parent company financial tatement on page 159 to 162 and page 186 to 188. REGISTRATION DOCUMENT / L ORÉAL 2013 9

1 INTERNATIONALIZATION PRESENTATION OF THE GROUP AND COSMETICS MARKET 1.3.2.5. EXECUTIVE COMMITTEE Member of L Oréal Executive Committee Firt name/lat name Jean-Paul Agon Laurent Attal Jean-Philippe Blanpain Nicola Hieronimu Brigitte Liberman Marc Meneguen Chritian Mulliez Alexi Peraki-Valat Alexandre Popoff Sara Ravella Frédéric Rozé Geoff Skingley Jérôme Tixier An Verhult-Santo Jochen Zaumeil Poition Chairman and Chief Executive Officer Executive Vice-Preident Reearch and Innovation Executive Vice-Preident Operation Executive Vice-Preident Preident Selective Diviion Preident Active Cometic Diviion Preident Conumer Product Diviion Executive Vice-Preident Adminitration & Finance Executive Vice-Preident Aia, Pacific Zone Executive Vice-Preident Eatern Europe Zone Executive Vice-Preident Communication, Sutainability and Public Affair Executive Vice-Preident America Zone Executive Vice-Preident Africa, Middle Eat Zone Executive Vice-Preident Human Reource and Advior to the Chairman Preident Profeional Product Diviion Executive Vice-Preident Wetern Europe Zone 1.4. INTERNATIONALIZATION AND COSMETICS MARKET 1.4.1. A hitorical preence in developed market L Oréal i preent in 130 countrie in all 5 continent. Founded in France in 1909, the Group developed rapidly in Wetern Europe. In 2013, it made 35.1% of it cometic ale in thi territory in which the Group i long etablihed. In the firt half of the 20 th century, L Oréal gained a foothold in North America. Initially, the Group entruted ditribution companie with commercializing it product, thee companie being united in 1953 around an excluive agent, Comair. Following the Company takeover in 1994, it enured the Group development on the North American continent with the tatu of ubidiary. The acquiition of brand like Maybelline (1996), Matrix and Kiehl (2000), or more recently Clarionic (2011) and Urban Decay (2012) have firmly anchored the Group in North America. In 2013, it ale on that continent increaed by 3.8% like-for-like to reach 25.1% of world cometic ale. 1.4.2. Rapid development outide Wetern Europe Beginning in the 1970, the Latin America Zone developed with a multi-diviional organiation that the Group ha reproduced in the other major region of the world. Preent in Japan for nearly 50 year, L Oréal ha developed it preence in that country by chooing the brand to be given priority for thi extremely pecific market: Kératae in hair alon, Lancôme in Luxury product and Maybelline and L Oréal Pari in ma-market product. The 1990 witneed the opening up of New Market with the fall of the Berlin wall which gave the brand acce to the market in Eatern European countrie. L Oréal wa among the firt foreign group to obtain an authoriation from the Indian government in 1994 for the creation of a wholly-owned ubidiary with it regitered office in Mumbai. 10 REGISTRATION DOCUMENT / L ORÉAL 2013

PRESENTATION OF THE GROUP INTERNATIONALIZATION AND COSMETICS MARKET In 1997, the Group created a large multi-diviional zone in Aia and opened new ubidiarie, particularly in China where L Oréal hold 100% of the capital of it entity. Africa and the Middle Eat where the Group had a weak preence i a new frontier for development in the New Market: the number of ubidiarie in that region ha increaed from 7 to 12 over the lat five year. The mid 2000 wa the turning point: the trong acceleration of the development of the New Market i leading to a hift of the point of gravity in the economic world. In all, the percentage of cometic ale generated by the Group in the New Market wa 15.5% in 1995, 27.1% in 2006 and 39.8% in 2013. Thi progre i expected to continue. 1.4.3. A commitment to hared, utainable growth Anxiou to protect the future and to lay the foundation for lating growth, the Group i triving to develop it preence in all region of the world by applying the fundamental rule of a good corporate citizen: the product offered to conumer meet the highet quality tandard; the Group commitment in ocial matter are the ame in all it ubidiarie; all production centre comply with the ame rule aimed at a reduction in the environmental footprint. Social audit are carried out at upplier of factorie and logitic centre; each ubidiary participate, a far a it reource permit, in the large corporate philanthropy programme of the L Oréal Foundation uch a For Women In Science, Hairdreer againt AIDS and Beauty for a Better Life. In the autumn of 2013, the Group preented it programme on Sharing beauty with all and et out it commitment for 2020 to reduce it impact while fulfilling it ambition of growth (detail of thee commitment are et out in chapter 6, on page 196 to 198 ). 1.4.4. Immene development potential Beide the major countrie known a the BRIMC countrie (Brazil, Ruia, India, Mexico and China), L Oréal ha notably identified among it growth market the following countrie: Poland, Ukraine, Turkey, Argentina, Colombia, Indoneia, Thailand, Vietnam, Philippine, Egypt, Saudi Arabia, Pakitan, Kazakhtan, South Africa and Nigeria. In ome of thee countrie, the conumption of cometic product per inhabitant i 10 to 20 time lower than in mature countrie. Several ten of million of inhabitant have acce every year throughout the world to level of revenue which make them part of the middle clae and allow them to conume modern cometic product. The marketing team, in particular in large countrie, pay heed to thee new conumer. The laboratorie on all continent tudy their pecificitie. The Group innovation policy i baed on the acceibility and adaptation of product to the beauty habit and ritual of all men and women in their infinite diverity. Thee form the bai for the univeraliation of beauty. 1 REGISTRATION DOCUMENT / L ORÉAL 2013 11

1 INTERNATIONALIZATION PRESENTATION OF THE GROUP AND COSMETICS MARKET NORTH AMERICA 25.1% OF GROUP COSMETICS SALES +3.8% Sale growth in 2013 (1) +2.6% Market growth in 2013 (2) SALES: 5,356 M OPERATING PROFIT (3) : 18.7% (% of ale) WESTERN EUROPE 35.1% OF GROUP COSMETICS SALES +1.9% Sale growth in 2013 (1) +0.3% Market growth in 2013 (2) SALES: 7,483 M OPERATING PROFIT (3) : 22.2% (% of ale) LATIN AMERICA AFRICA, MIDDLE EAST EASTERN EUROPE ASIA, PACIFIC 8.9% OF GROUP COSMETICS SALES +11.5% Sale growth in 2013 (1) +11.0% Market growth in 2013 (2) SALES: 1,895 M 2.4% OF GROUP COSMETICS SALES +14.3% Sale growth in 2013 (1) +6.5% Market growth in 2013 (2) SALES: 505 M 7.9% OF GROUP COSMETICS SALES +8.2% Sale growth in 2013 (1) +2.3% Market growth in 2013 (2) SALES: 1,693 M 20.6% OF GROUP COSMETICS SALES +8.4% Sale growth in 2013 (1) +4.5% Market growth in 2013 (2) SALES: 4,382 M NEW MARKETS 39.8% OF GROUP COSMETICS SALES +9.4% Sale growth in 2013 (1) +5.7% Market growth in 2013 (2) Sale: 8,475 M Operating profit: 19.2% (% of ale) (3) (1) Like-for-like. (2) Source: L Oréal etimate of worldwide cometic market baed on net manufacturer price excluding oap, toothpate, razor and blade. Excluding currency fluctuation. (3) Operating profit before non-allocated. See note 3, page 96. 12 REGISTRATION DOCUMENT / L ORÉAL 2013

PRESENTATION OF THE GROUP INTERNATIONALIZATION AND COSMETICS MARKET WORLDWIDE COSMETICS MARKET FROM 2004 TO 2013 (1) (Annual growth rate a %) +4.9% +5.0% +4.6% +4.6% +4.2% +3.8% +3.8% +3.4% +2.9% +1.0% The worldwide cometic market repreent approximately 175 billion, and in 2013 it grew by an etimated +3.8% (1). It i a particularly robut market, which i teadily expanding, while proving very reilient when economic condition are at their mot difficult. The cometic conumer behaviour ha not changed ince the crii. There ha been no devaluation, banaliation or maification of the market. On the contrary, conumer apiration for quality are higher than ever, and they are alway eager for technology and new idea. The cometic market remain a upply-led market, driven by innovation, and conumer are alway looking for quality, performance and perceived reult. 1 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 BREAKDOWN OF THE WORLD COSMETICS MARKET IN 2013 (1) (A %) BY GEOGRAPHIC ZONE BY PRODUCT CATEGORY 32.8% Aia, Pacific 2.8% Africa, Middle Eat 8.2% Eatern Europe 22.1% Wetern Europe 21.4% North America 12.7% Latin America 34.1% 24.1% 1.3% 11.2% 16.6% 12.7% Skincare Haircare Oral cometic Toiletrie, deodorant Make-up Perfume MAIN WORLDWIDE PLAYERS (2) (Sale in billion of US$) In 2013, the dermo-cometic market wa the mot dynamic with growth of +5.0%. The market wa buoyant on all continent, even in Wetern Europe with growth of nearly +3%. With growth of +4.6%, the elective market continued to grow at a teady pace in 2013; boltered by Aia and Travel Retail, it contribute 24% of global growth (1). With growth of +3.9%, ma market ale tailed off particularly due to the United State and Aia. 28.88 20.70 20.08 From a geographic viewpoint, the New Market continue to attain increaing level of growth: excluding Japan, they repreented 80% of worldwide market growth thi year (1), due in equal hare to Aia-Pacific and Latin America. 9.98 8.38 L Oréal Unilever Procter & Gamble Etée Lauder Shieido Competitive poition and market hare held by the Group Diviion and brand mentioned in thi report are baed on tudie, panel and poll obtained from pecialied organiation and companie, or, in the abence of comprehenive tudie, are the reult of etimate made by L Oréal on the bai of available tatitical data. (1) L Oréal etimate of worldwide cometic market baed on net manufacturer price excluding oap, toothpate, razor and blade. Excluding currency fluctuation. (2) Source: Beauty Top 100 WWD, Augut 2013, 2012 ale. REGISTRATION DOCUMENT / L ORÉAL 2013 13

1 RESEARCH PRESENTATION OF THE GROUP & INNOVATION: AN OBJECTIVE OF EXCELLENCE 1.5. RESEARCH & INNOVATION: AN OBJECTIVE OF EXCELLENCE 1.5.1. Reearch, in the Group gene Over a century ago, a cientit called Eugène Schueller founded L Oréal by launching a major innovation: a harmle hair dye. Reearch immediately became one of the component of the Group DNA and very quickly one of the key to it ucce. By alway keeping one tep ahead in thi area, L Oréal ha integrated reearch into a Sutainable Development proce. The ingredient ued and the work carried out repect conumer, the environment and biodiverity. Today, to engage in the conquet of a billion new conumer, the Group ha rethought it innovation model and contantly increae it invetment. With a budget of 857 million in 2013, up by +8.4% a compared to the previou year, L Oréal reearch team innovate to meet beauty apiration all over the world in their infinite diverity. L ORÉAL CREATES A HIGH-LEVEL SCIENTIFIC ADVISORY BOARD The endle quet for beauty require cientific reearch open to the world. At a time when L Oréal trategy i one of univeraliation of beauty, the creation of a Scientific Adviory Board in 2013 wa conidered to be neceary in order to nourih the interaction between cience and beauty. Jacque Leclaire, global Scientific Director, ha the reponibility of chairing thi Board and coordinate it reflection. It miion i to guide the cientific and technological reearch focue to explore the next beauty frontier. Compoed of 9 eminent cientit from different dicipline and background, the Scientific Adviory Board alo repect equality ince important dicoverie and innovation often come from exchanging idea. The Board will meet twice a year and it work will include dramatic development of cience and technology throughout the world, the power of the digital revolution but alo changing mode of conumption and ocial iue. It will bring unexpected idea and define the contour of beauty cience for the next ten year with L Oréal own reearch team. 1.5.2. One tep ahead in active principle L Oréal Fundamental Reearch Department wa et up in 1963. It conviction: extend the knowledge of kin and hair in order to think up new concept which lead to the ynthei of new molecule. The Group ubequently multiplied the number of patent filing (624 in 2013) and developed a large number of active principle, the main one being at the ource of the Group flaghip product. Among thee major molecule, it i poible to cite Ionène G, launched in 1978 in hair colour with Majirel to enure real repect for the integrity of hair; Mexoryl SX, a un filter launched in 1993 in the Vichy Capital Soleil range; Pro-Xylane, which, launched for the firt time in 2006, became part of the Lancôme Abolue range to treat deep wrinkle; and more recently, LR2412, ued in Lancôme Viionnaire, launched in 2011, which reduce wrinkle while offering a more even kin tone; Stemoxydine launched in 2012 in the Vichy Neogenic product range, which favour follicular regrowth and finally Filloxane, an effective hair thickener, launched in 2013 in the L Oréal Pari Fibralogy range. Thi capacity to implement long-term reearch programme now enable L Oréal to remain ahead of it competitor. 1.5.3. Animal teting: balancing ethic and innovation The harmlene and efficacy of L Oréal technological innovation are eential. To meet thee requirement, the reearch team embarked in the 1980 on developing alternative method to animal teting for the evaluation of the afety of it product and active principle. Much progre ha been made thank to tiue engineering, which made it poible to recontruct the firt human epidermi in 1979 and then the firt complete kin (epidermi and dermi) in 1996. In three decade, thank to it invetment in reearch and cientific partnerhip, the Group ha created genuine expertie in thi area. In 2011, L Oréal inaugurated in Gerland (Lyon, France) it global predictive evaluation centre dedicated to evaluation of the afety and efficacy of ingredient and product, the firt cometic indutry ite to produce recontructed biological tiue (around 130,000 unit per year). 12 recontructed kin and corneal tiue model have been developed to date. Thee model are fabulou tool to predict the afety and efficacy of product and make it poible to reduce the time-to-market. Thank to thee model, L Oréal wa able to top teting finihed product on animal in 1989 (14 year before it became a legal obligation in Europe) and develop predictive evaluation trategie to atify the recent European regulation which prohibit the offering for ale of product containing any ingredient that ha been teted on animal after March 11 th, 2013. Thi law ha not had any impact on the Group innovation effort. 14 REGISTRATION DOCUMENT / L ORÉAL 2013

PRESENTATION OF THE GROUP RESEARCH & INNOVATION: AN OBJECTIVE OF EXCELLENCE Outide Europe, in all the countrie which continue to require or conduct animal teting to evaluate product and cometic ingredient afety, L Oréal hare it breakthrough and make available both it model and it ubtitute method. L Oréal ha no longer conducted animal teting anywhere in the world ince March 2013 and doe not delegate reponibility for doing o to anyone ele. 1 Reearch and innovation budget ( million, including 50% of Galderma reearch expene) 2011 721 2012 791 2013 857 Reearch employee (including 50% of Galderma reearch employee) 2011 3,676 2012 3,817 2013 4,009 Number of patent (cometic and dermatological reearch) 2011 613 2012 611 2013 624 1.5.4. A global governance for Reearch Applied Reearch optimie the principle of cometic formulation to get the bet out of the active ingredient. It tranform knowledge and module into innovative prototype to create powerful platform in each product category. The deployment of it team in three major geographic zone (America, Europe, Aia) upport the international expanion of the Buinee by booting the Group innovation potential. 1.5.5. Reearch in tune with the market All tage of reearch which lead up to the launch of an innovative product are connected to the market. There i a veritable interaction between reearch and marketing. Thi approach i cloely related to the Group development trategy in the New Market. Conumer in India are not the ame a thoe in China or in Europe: their cometic need and apiration differ. To pay heed to the need of it cutomer in their diverity, L Oréal ha created a Conumer & Market Inight Department in the Innovation Diviion to build up a global conumer data bank per product category and per major region of the world. The cometic need and expectation of conumer all over the world in priority market for the Group are identified through thee tudie. 1.5.6. A new Reearch Hub in India L Oréal ha five regional Applied Reearch hub. In 2013, a new hub opened in Bangalore. India i a country of innovation, and ha a cientific fabric in tune with L Oréal reearch field, with well-trained talent and high-level reearch intitution. Thi i why the Group inaugurated the Indian reearch hub in 2013, coniting of two centre, one in Mumbai for Applied Reearch and Development, the other in Bangalore dedicated to Advanced Reearch. Thi hub ha a two fold miion: adapting the technologie developed in the global centre to the behaviour of Indian conumer and inventing cutomer-pecific product for the Indian market. Mumbai i the bae for the team involved in developing new kin or hair care beauty product. The Conumer Inight Department enhance the knowledge of beauty habit and behaviour of Indian conumer, the development team tranlate thee need into product and the evaluation team tudy their technical, functional and enorial performance. In Bangalore, the miion of the Advanced Reearch centre conit of deciphering Indian knowledge in the field of traditional medicine and aromatic plant, uing advanced method in biology, phyic and chemitry. The aim i to elect high-performing active principle, to become a centre for excellence for the evaluation of complex mixture and to enable local ourcing for acceible innovation. In order to fulfil thee target, the team have et up partnerhip with major reearch intitution and univeritie in the region. REGISTRATION DOCUMENT / L ORÉAL 2013 15

1 OPERATIONS PRESENTATION OF THE GROUP Reearch ite worldwide 3 Global centre (France) 5 Regional hub 23 Reearch centre 16 Evaluation centre LOCAL RESEARCH AND ADAPTATION OF PRODUCTS To adapt to conumer all over the world, L Oréal Reearch team are preent in all geographic zone through it 23 cometic and dermatological reearch centre and 16 evaluation centre. The reearch centre are grouped together in 3 global centre in France (Advanced Reearch, Hair métier and Cometic métier) and 5 regional hub: in the United State, China, Japan, Brazil and India. Thee regional hub identify need, cientific expertie and cometic practice. The richne of their cience ecoytem promote cooperation and partnerhip for excellence. The data collected then enable the reearcher to develop new product that are perfectly in tune with local need. The innovation developed will then be hared with the other reearch centre in a coordinated manner, and need identified in one country may ubequently lead to ucce on a global cale. 1.6. OPERATIONS 1.6.1. From ourcing to delivery, continuou improvement of indutrial efficiency L Oréal offer Men and Women worldwide the bet of cometic. Operation develop, produce on an indutrial cale and ditribute the product and ervice correponding to thi offering, by guaranteeing the mot effective and the mot reponible olution and thoe mot uited to the pecific nature of our brand and market. The Operation Diviion comprie even area of expertie with regard to indutrial production and logitic: procurement, packaging, production, quality, upply chain, environment, health and afety, and real etate. Three upport function complete the Diviion reource: Information Sytem, Finance and Human Reource. 16 REGISTRATION DOCUMENT / L ORÉAL 2013

PRESENTATION OF THE GROUP OPERATIONS 1.6.2. A well-oiled indutrial model With location all over the world, the Group factorie produce 87% of cometic unit old. Thi choice of eentially in-houe production offer a guarantee of quality, traceability and corporate ocial reponibility, which reduce rik. Plant are generally dedicated to the production of one Operational Diviion and pecialied in major indutrial technologie located cloe to the market that they erve. The rotation of brand on the packaging line i furthermore aited by an increaed tandardiation of indutrial procee. Thi indutrial model help to improve output year on year and guarantee continuou activity on each ite. 1.6.3. Continuou improvement and optimiation of production L Oréal ha et itelf the target of continually improving output and optimiing production cot. Thi ambition i accompanied by a demanding quality ytem that extend from deign to cutomer. It aim to guarantee the integrity of the formulation of product all over the world and enure compliance with ocial and environmental reponibility tandard on each production ite in accordance with national regulation. In 2013, L Oréal obtained the Bet Practice award from the AFQP (Aociation France Qualité Performance). L Oréal ha uccefully et up on it indutrial ite the Total Productive Maintenance ytem, baed on the cloe involvement of it employee in continuou improvement initiative, which make it poible to improve performance in a number of area uch a afety, environmental impact, ergonomic and production quality and capacity at the indutrial ite, while enuring cot improvement. L Oréal i puruing it programme to improve the efficiency of it production facilitie, baed on a whole et of bet practice, at all it indutrial ite throughout the world. Thi triggered, for example, the haring of the upport and procurement function in the major geographic zone. Efficiency ha been improved while the pecificitie of each region have been maintained. Thi productive, highly reponive organiation model i particularly adapted to L Oréal objective of accelerated growth in the New Market. 1.6.4. Long-term partnerhip with upplier L Oréal indutrial ucce can alo be accounted for by the Group exacting tandard in the choice of it upplier and the utainable relationhip that it et up with them. The Group organied it firt World Supplier Day in 2012 in order to hare the Group viion and trategy with L Oréal mot trategic upplier. Durable link with upplier alo require the development of local procurement in trong growth zone. In 2010, the Group initiated the wall-to-wall programme which conit in etting up a production unit for packaging item operated by a upplier within the plant itelf. Thi partnerhip develop reponivene and indutrial flexibility, while reducing the tranportation of packaging item and the generation of wate related to their packaging. It i aimed at plant with highly pecialied technologie that produce very large volume and have ongoing need for external reource. 1.6.5. L Oréal and it partner: working together to innovate Innovation i a major challenge for L Oréal. In order to peed up thi proce, the Group created an internal trade fair dedicated to innovation called Cherrypack in 2010. The third edition of thi fair wa held in November 2013, enabling ten trategic upplier from Aia, Europe and America, to unveil their latet innovation with regard to product packaging and POS to all the Group brand and to the Reearch & Innovation team. Thi event demontrate L Oréal intention to reinforce it link with it upplier by gambling on collaborative intelligence. Thi event, which wa organied in the preence of Jean-Paul Agon and Executive Committee member, wa attended by around 800 of the Company employee who were able to dicover thee innovation. External innovation i alo booted through partnerhip et up in Europe and Aia with highly creative and innovative chool. 1.6.6. Strong commitment with regard to ocial reponibility and afety The Operation Diviion, like the Group a a whole, play a predominant role in the field of ocial reponibility and afety. L Oréal incite it upplier to be more reponible and carrie out rigorou monitoring of their commitment through a large number of ocial audit carried out on upplier throughout the world; 5,295 ocial audit have been carried out ince 2006. The objective i not to impoe anction on upplier but to help them to improve their afety tandard and their environmental and ocial performance. The Group received a prize from VIGEO (1) in 2012 for the prevention of ocial dumping in the upply chain. By creating the Solidarity Sourcing programme in 2010, the Group took the initiative of uing local upplier who make commitment in favour of minoritie: diabled worker or worker from deprived communitie. It may alo involve very mall upplier or fair trade player that L Oréal call on to contribute with the help of it upplier. Thi programme wa officially launched in 2012 to the Group upplier in order to encourage them to develop the ame approach with their own upplier. In 2013, the Solidarity Sourcing programme provided acce to employment to over 22,000 people. With regard to afety, the Operation Diviion pay particular attention to employee who work on production ite. They are trained in compliance with afety rule and oberve a afety minute every day in order to prevent and avoid accident. 1 (1) European extra-financial rating agency. REGISTRATION DOCUMENT / L ORÉAL 2013 17

1 OPERATIONS PRESENTATION OF THE GROUP 1.6.7. Environmental protection at the heart of production Throughout the whole of the production chain, innovative meaure with regard to Sutainable Development are implemented all over the world, from project with regard to efficient everyday ue of reource to breakthrough project. Many initiative that are mot uited to the local ecoytem are being introduced at the Group ite (geothermal energy in Vichy, photovoltaic panel in Mexico, biomethanation in Belgium, phytoretoration in Mourenx (France), and o on). Through Commitment for 2020, the Group carrie on with the approach initiated in 2009 aiming at reducing the environmental footprint of it factorie and logitic centre. The pledge to reduce by 50% carbon emiion in abolute term (both direct and indirect) water conumption and wate generation per finihed product unit, by 2015 from a 2005 baeline, i now a pledge to reduce by 60% by 2020 from a 2005 baeline (ee chapter 6, paragraph 6.3.1, page 212). Furthermore, the environmental impact related to packaging, tranport and building are alo taken into conideration. 45 INDUSTRIAL SITES WORLDWIDE EUROPE NORTH AMERICA LATIN AMERICA AFRICA, MIDDLE EAST ASIA, PACIFIC Active Cometic: 2 factorie Profeional Product: 3 factorie L'Oréal Luxe: 5 factorie Conumer Product: 26 factorie Raw Material: 3 factorie Device: 1 factory Dermatology: 5 factorie 18 REGISTRATION DOCUMENT / L ORÉAL 2013

PRESENTATION OF THE GROUP OPERATIONS PRODUCING AND CONSUMING LOCALLY The Group factorie are pread out all over the world in order to fulfil a very imple objective: to reduce a far a poible the ditance between conumer and the production zone. The Group 45 factorie are located in area enabling a rapid upply of all the countrie in which the Group i preent. The trong growth of product in the Conumer Product Diviion, particularly in the New Market, account for the number and geographical breakdown of thi Diviion factorie. Furthermore, in order to upport the conquet of another billion conumer in the New Market, the Group tarted up a new factory in Ruia in 2010. In 2012, two new factorie tarted up in Indoneia and Mexico. In 2013, L Oréal opened it new production ite in Egypt, while the Group alo integrated two new indutrial entitie following acquiition: Vogue in Colombia and Interbeauty in Kenya. 1 COSMETICS INVESTMENTS (production and upply chain commitment in million) COMPARABLE ANNUAL PRODUCT PURCHASING PRICE INDEX (index bae: 100: year n-1) COSMETICS FACTORIES WORKFORCE CUMULATED PRODUCTIVITY INDEX (index bae:100 in 2002, acquiition included) 359 326 331 99.1 96.6 96.6 163.0 169.9 169.6 2011 2012 2013 2011 2012 2013 2011 2012 2013 COSMETICS BRANCH PRODUCTION AND SALES BY GEOGRAPHIC ZONE IN 2013 PRODUCTION 42.8% 21.0% 36.2% Wetern Europe North America New Market SALES 35.1% 25.1% 39.8% Wetern Europe North America New Market REGISTRATION DOCUMENT / L ORÉAL 2013 19

1 INVESTMENT PRESENTATION OF THE GROUP POLICY 1.7. INVESTMENT POLICY L Oréal invetment policy repond to long-term objective. L Oréal i an indutrial company whoe development i governed by two type of invetment in particular: 1. cientific invetment and invetment in equipment which are explained at length in everal ection of thi document (ee, in particular, ection 1.5. on page 14 and ection 1.6. on page 16 ); 2. marketing invetment which are made on an ongoing bai and are inherent to the Group activitie, particularly in the cometic indutry. Indeed, in order to win new market hare, thorough reearch ha to be conducted all over the world, and advertiing and promotional expene need to be modulated depending on the familiarity of the brand and their competitive poition; finally, invetment in point-of ale (POS) advertiing material enure optimal preence for our brand in point of ale. For reaon relating to trategy and competition, L Oréal cannot therefore provide any ytematic information on future invetment. In 2013, the Group invetment amounted to 1,061 million, i.e. 4.6% of it ale, a percentage cloe to the record level before the financial crii. Thi evolution reflect the contant effort made by the Group, in particular in the field of improvement of indutrial efficiency, the performance of reearch team and enhancement of the value of brand. The 1,061 million that were inveted in 2013 can be broken down a follow: production and phyical ditribution repreent approximately 34% of total invetment; marketing invetment, including mould, POS advertiing material and tore account for 39%; the remainder concern Reearch and the head office in different countrie; IT invetment pread over all thee categorie repreented 18% of total invetment (ee note 12 on page 133, note 14 on page 136 of chapter 4 and note 26 on page 154. Conolidated Financial Statement). 1.8. RISK FACTORS The Group operate in a changing environment. Like any company, it i necearily expoed to rik which, if they were to materialie, could have a negative impact on it buine activitie, it financial ituation and it aet. Thi chapter preent the main rik to which the Group conider that it i expoed: thoe pecific to the buine activitie of L Oréal, then the legal, indutrial and environmental rik, and finally the rik of an economic and financial nature. Faced with thee rik, L Oréal ha et up an Internal Control ytem to prevent and control them better. The Internal Control and rik management procedure are thu decribed in ection 2.5, a provided for by Article L. 225.37 of the French Commercial Code (cf. page 75 et eq.). However, it i not poible to guarantee total abence of rik. Furthermore, other rik of which the Group i not currently aware or which it doe not conider a material at the date of thi report could have a negative effect. The rik which the Group conider it i expoed to are et out below: 1.8.1. Buine rik page 20 1.8.2. Legal rik page 23 1.8.3. Indutrial and environmental rik page 24 1.8.4. Counterparty rik page 25 1.8.5. Cutomer rik page 25 1.8.6. Liquidity rik page 25 1.8.7. Financial and market rik page 25 1.8.8. Inurance page 27 1.8.1. Buine rik 1.8.1.1. IMAGE AND REPUTATION The Company reputation and it brand image may be compromied at any time in a globalied world where information i dieminated rapidly. No company i afe from an undeirable event whether thi involve the ue or miue of a product or reprehenible individual conduct. The circulation in the media of detrimental information, whether founded or not, which 20 REGISTRATION DOCUMENT / L ORÉAL 2013

PRESENTATION OF THE GROUP RISK FACTORS ha been facilitated by the introduction of new technologie and development of the ocial network, could alo affect the Company reputation and it brand image. In order to reduce the rik that may arie from event of thi kind, L Oréal ha et up a crii management procedure, whoe global tak i to prevent, manage and limit the conequence of undeirable event on the Company. The Group crii management officer report directly to the Chief Executive Officer. Furthermore, the deployment of the Code of Buine Ethic throughout the whole Group aim at reinforcing the preading of the rule of good conduct which enure L Oréal integrity and trengthen it ethic. The purpoe of thee rule of good conduct i to guide action and behaviour, inpire choice and make ure that the Group value are reflected in the everyday act of each employee. In addition, L Oréal ha implemented a charter of good practice for ue of ocial media by it employee. 1.8.1.2. PRODUCT QUALITY AND SAFETY Conumer afety i an abolute priority for L Oréal. The International Safety Aement Department pecifically evaluate the afety of raw material and finihed product. It etablihe the toxicological profile of the ingredient which are ued and the tolerance of the formula before they are launched on the market. L Oréal goe one tep further in the afety evaluation by monitoring the potential advere effect that may arie when the product i marketed. Thi make it poible to take the appropriate corrective meaure, where neceary. Faced with the quetion that civil ociety may ak regarding certain ubtance and their effect on health and the environment, L Oréal poition may be ummed up in three point: vigilance with regard to any new cientific data; cooperation with the relevant authoritie; precaution leading to ubtitution of ingredient in the event of a proven rik or a trongly upected rik. 1.8.1.3. RESPONSIBLE COMMUNICATION L Oréal provide conumer with innovative product, and the ucce of thee product i baed on their quality and performance. The reulting benefit are highlighted in the Group communication. In pite of all the care taken to guarantee the accuracy and fairne of the claim made in thee communication, there i alway a poibility that they may be challenged by the authoritie, organiation or conumer. In order to reduce the rik of challenge of thi kind being made, the International Product Communication Evaluation Department make ure of the conformity of product communication before they are put on the market. The Group Code of Buine Ethic et out the fundamental principle of reponible communication and L Oréal ha made a commitment to implement the Cometic Europe Charter on reponible advertiing and marketing communication, to which the key global cometic indutry player in Europe adhere. 1.8.1.4. SEASONAL NATURE OF THE BUSINESS The pace of ale may, in certain cae, and for pecific product, be linked to climate condition, uch a for example uncare product. The product and brand ought after by conumer a gift are reliant on a trong concentration of ale at yearend and during holiday period. Thi i the cae in particular for fragrance and The Body Shop product. Any major diruption in either of thee factor could affect L Oréal ale. L Oréal endeavour to mitigate thee rik through the diverity and enrichment of it product offering and by arranging product launche and pecial product promotional event throughout the entire year. 1.8.1.5. GEOGRAPHIC PRESENCE AND ECONOMIC AND POLITICAL ENVIRONMENT L Oréal ha ubidiarie in 70 countrie, with 64% of it ale being generated outide Wetern Europe. Global growth in the cometic market ha led L Oréal to develop it activitie in countrie of the New Market Zone, which repreent over 39.8% of it cometic ale in 2013. The breakdown and change in L Oréal ale are given in chapter 3 (Financial highlight) on page 94 et eq. Beide the currency rik mentioned in chapter 4 in note 24.1. Hedging of currency rik on page 150 to 152 and in the paragraph on currency rik page 26, political or economic diturbance in countrie where the Group generate a ignificant portion of it ale could have an impact on it buine activitie. However, it global preence help to maintain a balance in ale and enable reult to be offet between countrie and geographic region. In period of major economic lowdown or in overeign debt crii ituation in certain countrie, growth in the Group ale may however be affected. 1.8.1.6. DISTRIBUTION NETWORK To ell it product, L Oréal ue independent ditribution channel, except for a limited number of tore which are owned by the Company. The concentration or diappearance of ditribution chain and change in the regulation with regard to elective ditribution could have an impact on the development of the Group brand in the country or countrie concerned. The preence of the Group brand in all type of ditribution network help to attenuate any potential negative effect. 1.8.1.7. COMPETITION Due to it ize and the poitioning of it brand, L Oréal i ubject to contant preure from local and international competitor in all countrie. 1 REGISTRATION DOCUMENT / L ORÉAL 2013 21

1 RISK PRESENTATION OF THE GROUP FACTORS Thi competition i healthy; it lead our team, all over the world, to alway do their bet to erve the interet of conumer and the Group brand. In the context of a contant truggle to obtain the bet poition and launch the mot attractive and mot effective product range, with an optimal price/quality ratio, winning market hare, improving operating profitability and thereby enuring growth are a permanent challenge. 1.8.1.8. INNOVATION AND CONSUMER EXPECTATIONS The development of innovative product and their adaptation to market requirement i an ongoing priority for the Group. If the Group fail to anticipate or interpret change in conumer behaviour and new trend, it ale could be affected. The Conumer & Market Inight Department, which i part of the Innovation Diviion, contantly watche for change in conumer cometic expectation by product category and major region of the world. Thi work enable the Group reearcher to develop new product that are in line with market need a mentioned in the paragraph on Reearch in tune with the market on page 15. The development of digital communication and e-commerce create greater proximity between L Oréal and it conumer, by etting up deciionmaking aid ervice with regard to product purchae and their ue. Conumer expectation with regard to Sutainable Development are moreover at the heart of the Commitment for 2020 publihed in 2013 (ee chapter 6, page 197 ). 1.8.1.9. EXTERNAL GROWTH TRANSACTIONS Within the cope of it development trategy, L Oréal ha made, and may have occaion to make acquiition or ign licence agreement. Implementation of thi trategy neverthele require that L Oréal i able to find development opportunitie at an acceptable cot and under acceptable condition. The Group ha introduced a proce for the uptream overight of thee tranaction which include: the etting-up of multidiciplinary team for the preparation of project and due diligence work; a review by the Strategy and Sutainable Development Committee of the Board of Director, then by the Board of Director, of the opportunitie for acquiition or for equity invetment for a ignificant amount or falling outide the cope of the Group uual buine activitie, and the condition for their implementation. Thee operation may have a negative impact on the Group reult if the Group doe not ucceed in integrating the activitie of the companie that have been purchaed, their peronnel, their product and their technologie under the anticipated condition, in achieving the expected ynergie and in handling liabilitie which have not been anticipated at the time of completion of the tranaction and for which L Oréal ha little or no protection from the eller. Acquiition that have been decided by the Board of Director are regularly monitored by the Board of Director which i informed of the condition of integration and the performance achieved. 1.8.1.10. RISKS RELATED TO HUMAN RESOURCES MANAGEMENT One of the key to the ucce of L Oréal lie in the talent of it taff. Should L Oréal not ucceed in identifying, attracting, keeping and training competent employee who behave reponibly, the development of it activitie and it reult could be affected. The Group therefore develop a motivating, engaging profeional environment, and encourage the attachment to it value, including thoe put forward by the Code of Buine Ethic. L Oréal Human Reource policy i moreover decribed in the Report of the Chairman on Internal Control (paragraph on Internal Control organiation and environment) and in chapter 6, paragraph 6.2. p age 198. 1.8.1.11. SECURITY The Group preence at more than 350 ite (excluding our own hop and the ale outlet of our ditributor cutomer) expoe it to rik with regard to event of divere origin geopolitical rik, maliciou act, natural diater. The conequence of thee rik may adverely affect the Group aet: people, tangible and intangible property. For the permanent protection of thee item of property (or Group aet) againt maliciou act, the Safety Diviion contribute in particular to preventive implementation of technical and human reource and operational procedure to limit the reidual rik of maliciou damage and upport the Group international development in high rik countrie. It alo provide employee making buine trip abroad with a monthly report on travel rik. Since 2010, concerning the occurrence of natural diater, the Real Etate Department ha deployed a global programme to ae ite vulnerability to eimic rik in the mot expoed zone. At the ame time, the Information Sytem Department enure that the eimic rik i taken into conideration in the IT continuity plan of the countrie that are the mot at rik. 1.8.1.12. INFORMATION SYSTEMS The day-to-day management of activitie which notably include purchaing, production and ditribution, invoicing, reporting and conolidation operation a well a exchange of internal data and acce to internal information relie on the proper functioning of all the technical infratructure and IT application. The rik of a malfunction or breakdown in thee ytem for exogenou or endogenou reaon (including intruion, maliciou act, etc.) cannot be precluded. In order to minimie the impact that thi type of occurrence could have, the Information Sytem Department ha introduced trict rule with regard to data back-up, protection and acce to confidential data and ecurity with regard to both computer hardware and oftware application. In order to adapt to the 22 REGISTRATION DOCUMENT / L ORÉAL 2013

PRESENTATION OF THE GROUP RISK FACTORS evolution of new communication method, L Oréal ha introduced an Information and Communication Technologie Charter. Thee meaure are decribed in the Report of the Chairman on Internal Control (ee chapter 2, paragraph 2.5.2.4. page 77 ). To deal with the growing threat in the field of cybercrime, L Oréal take continuou tep to trengthen the mean dedicated to information ytem ecurity. Thi plan relie in particular on antiintruion equipment, ecuring enitive equipment and overall uperviion to detect irregularitie. 1.8.1.13. RISK OF AN INTERNAL CONTROL FAILURE L Oréal ha et up an Internal Control ytem which, even though adequate, can only provide a reaonable aurance and not an abolute guarantee of achievement of the Company objective due to the inherent limitation of any control. Thu, the Group cannot rule out the rik of an Internal Control failure that may expoe it to an act of fraud in particular. Deployment to all the Management Committee of the Group ubidiarie of a programme to raie awarene of the rik of fraud (preenting the main operational cenario that could occur, the alert ytem and the exiting procedure and control) i intended to reduce the Group expoure to thi rik. In addition, the Group ha publihed a corruption prevention guide which complete the commitment and principle et out in L Oréal Code of Buine Ethic and which are decribed in the chapter on Corporate ocial, environmental and ocietal reponibility (chapter 6). 1.8.2. Legal rik 1.8.2.1. INTELLECTUAL PROPERTY: TRADEMARKS AND MODELS L Oréal i the owner of the major intangible aet on behalf of the Group companie, to which it grant licence in exchange for the payment of royaltie. Thu, L Oréal i the owner of mot of it brand, which are a trategic aet for the Group, in particular the major international brand decribed in the paragraph on Branche and Diviion on page 8, with the exception of a few brand for which L Oréal ha obtained a licene and mot of which are currently ued by L Oréal Luxe, primarily the Giorgio Armani, Yve Saint Laurent, Ralph Lauren, Cacharel, Viktor & Rolf and Dieel brand. The trademark name, the product themelve and the model may be infringed or counterfeited by economic player wihing to illegally and illegitimately claim the benefit of their reputation. Special care i given to the protection of the trademark and model belonging to L Oréal, and i entruted to a pecial ection of the Group Legal Department, which ha reponibility for regitering trademark in all countrie. Thi department alo keep a cloe watch on the market and launche the neceary action againt infringer and counterfeiter. The L Oréal Group i alo an active member of the organiation who have et themelve the tak of combating counterfeiting and promoting good commercial practice. Thi i the cae, in particular, of the French Manufacturer aociation (namely Union de Fabricant ), the International Chamber of Commerce and Buine Europe. Before any trademark and model regitration, prior right earche are conducted. In light of the large number of countrie in which the product are old and the multiple potential prior right that may exit in each of thee countrie, we cannot rule out the poibility that third partie may claim prior right with regard to certain L Oréal trademark and model. Thi i a potential rik which ha to be cited in order to be exhautive even though the likelihood of it occurrence i low due to the care taken when conducting prior right earche. 1.8.2.2. INDUSTRIAL PROPERTY: PATENTS Reearch and innovation are the hitoric pillar of L Oréal development. The dedication of L Oréal reearch team ha made it one of the leading indutrial patent filer in it field for many year. In order to protect the Group againt the rik of another company claiming one of it molecule, a production proce or packaging, L Oréal ha et up a pecific tructure, the International Indutrial Property Department a part of the Reearch and Innovation Diviion; thi department i reponible for filing the Group patent, exploiting them and defending them on a worldwide bai. However, it cannot be excluded that third partie could contet the validity of certain patent held by the Group. 1.8.2.3. CHANGES IN THE REGULATIONS L Oréal i ubject to the law which apply to all companie and trive to adopt an attitude beyond reproach. L Oréal ak it ubidiarie to comply with the regulation of the countrie in which the Company operate. Being an active member of profeional aociation in the countrie where it indutry i repreented, L Oréal play an active role in the ongoing dialogue with the national or regional authoritie in charge of the pecific regulation governing the product in it indutrial ector in order to prevent or accompany any rik that may reult from change in regulation. The European REACH regulation (Regitration, Evaluation and Authoriation of Chemical) that came into force in June 2007 are aimed at increaing human and environmental afety of chemical by requiring all uer companie to prove that they have implemented appropriate rik management meaure. L Oréal play an active role in thi proce for the ubtance manufactured or imported by it European legal entitie concerned. Within the framework of national and European aociation, L Oréal contribute to the analyi and drafting of practical guide for implementation of thee regulation. 1 REGISTRATION DOCUMENT / L ORÉAL 2013 23

1 RISK PRESENTATION OF THE GROUP FACTORS L Oréal i alo ubject in Europe to the 7 th amendment to the European Cometic Directive on animal teting of cometic ingredient. An action plan ha been drawn up at L Oréal in order to improve the conception and the method of evaluation of the afety of raw material. Thi plan i being implemented on an accelerated bai in order to make the bet poible preparation for the application of thee regulation. L Oréal wa able to top teting finihed product on animal in 1989 (14 year before it became a legal obligation in Europe) and develop predictive evaluation trategie to atify the recent European regulation which prohibit the offering for ale of product containing any ingredient that ha been teted on animal after March 11 th, 2013. See paragraph on Animal teting: balancing ethic and innovation page 14. 1.8.2.4 OTHER LEGAL RISKS AND LITIGATION In the ordinary coure of it buine, the Group i involved in legal action and i ubject to tax aement, cutom control and adminitrative audit. It i alo the ubject of proceeding initiated by national competition authoritie, in particular in European countrie (ee note 22 Proviion for liabilitie and charge on page 147 in chapter 4 Conolidated financial tatement). In order to better prevent thee rik, the Group Legal Department ha introduced a training eion on competition law for the employee concerned. In 2011, it alo ditributed an ethical and legal guide on the condition of fair competition, called The way we compete. A proviion i et aide in the parent company and conolidated financial tatement whenever the Group ha an obligation toward another party and will have to face a probable outflow of economic reource whoe cot can be reliably etimated. We conider that there i currently no exceptional event nor any governmental procedure, legal or arbitration proceeding which ha recently materially affected, or i eriouly likely to materially affect, the financial ituation, aet or operation of the Company and the L Oréal Group. 1.8.3. Indutrial and environmental rik In order to improve the efficiency and productivity of it indutrial procee, L Oréal carrie out mot of it production in 45 factorie, each pecialiing in a pecific type of technology. 1.8.3.2. SUPPLIER DEPENDENCE L Oréal i dependent on it external upplier for the delivery of material (raw material and packaging item) that are eential for the manufacture of finihed product, which may therefore uffer diruption a the reult of a default by an important upplier. In order to prevent thee rik, L Oréal ha prepared buine continuity plan for production which aim notably at looking for replacement olution (for example: upplier back-up, availability of everal mould for article for trategic product). 1.8.3.3. ENVIRONMENT AND SAFETY The cometic indutry ha a limited environmental rik profile. However, a it i the cae for any production, ditribution, reearch and general adminitration operation, L Oréal i expoed to afety and environmental iue (relating, for example, to the ue of certain raw material, the ue of machine or electrical equipment in production or torage area, handling operation liable to caue accident involving bodily injury, wate water treatment etc.). The main rik faced in the Group indutrial ite i fire due to the inflammable material ued in product (alcohol, propellant gae, powder, oxidant and olvent) and the torage of combutible product and chemical. To enure that the Group complie with it commitment to protect the environment and improve occupational health and indutrial afety condition, and to achieve concrete target, a rigorou Environment, Health and Safety (EHS) policy ha been implemented throughout the Group for many year. It wa updated in 2010 a decribed in Environmental Information later in thi report. The Operation Diviion iue Internal Rule providing for the principle of L Oréal EHS policy. An EHS repreentative i appointed at each ite. Training programme are ytematically organied. EHS performance indicator are collected monthly from all production ite, all ditribution centre and all reearch centre. The collection i carried out on a quarterly bai for mot of the adminitrative ite. The fire rik i dealt with in the framework of very trict fire prevention tandard (National Fire Protection Aociation tandard). L Oréal Group operate 116 manufacturing ite, of which two are claified a Seveo high threhold and are therefore ubject to trict regulation through the European Union Seveo Directive on the prevention of major accident hazard due to the torage of chemical or inflammable product. 1.8.3.1. PRODUCTION AND SUPPLY CHAIN Product mut be made available on the market on the cheduled date to meet time-to-market and cutomer demand, in order to enable new product range to be referenced by ditribution in a cometic market that require companie to be more and more reponive. Therefore, a major toppage of activity in a factory or a ditribution centre could have an advere effect on the achievement of commercial objective. In order to prevent thi rik, buine continuity plan exit for each operational ite. They aim at anticipating the unavailability of part of the Group upply chain a far a poible and at retarting activitie a quickly a poible. 1.8.3.4. EHS RISK MAP AND AUDITS Within the cope of thi EHS policy, for the indutrial ite, prevention i baed on the SHAP (Safety Hazard Aement Procedure) programme involving the aement of rik by employee at graroot level under the reponibility of the Site Manager. Thi programme contribute to identifying the danger overall and for each worktation and aeing the correponding rik. The SHAP method thu make it poible to prepare a rik mapping for the ite, to evaluate the level of rik and to put in place the neceary mean of control. It i upported by dialogue between peron in charge, thu contributing to a ignificant collective improvement in rik management. Thi approach i contantly evolving and i updated regularly depending on change at ite and experience on the ground. EHS audit are conducted every 24 REGISTRATION DOCUMENT / L ORÉAL 2013

PRESENTATION OF THE GROUP RISK FACTORS three or four year in each factory and ditribution centre. The ite rik map i reviewed within the cope of thi audit. In 2013, an EHS rik audit wa carried out at 17 factorie and 12 ditribution centre. 1.8.3.5. CONSTANT CONCERN FOR THE SAFETY OF EMPLOYEES Preervation of employee health and afety i one of L Oréal prioritie and i an integral part of the EHS policy and the Group human and ocial policy. It ret on the evaluation and prevention of profeional rik in the Company a decribed in detail in chapter 6, page 207. Neverthele, the rik of accident at the workplace or occupational dieae cannot be entirely ruled out. The Group implement the neceary mean to enure that it i in compliance with the legal proviion and the regulation relating to health and afety in the variou countrie where it operate. 1.8.4. Counterparty rik The Group enter into financial relation in priority with international bank and inurance companie given the bet rating by the three main pecialied rating agencie. When the Group make financial invetment, in the form of either bank depoit or marketable ecuritie (ee note 19 Cah and cah equivalent on page 138 in chapter 4 Conolidated financial tatement ), it give priority to hort-term tranferable intrument from firt-rate financial intitution. The Group therefore conider that it expoure to the counterparty rik i weak (ee note 24.4. Counterparty rik on page 152 in chapter 4). 1.8.5. Cutomer rik The cutomer rik may reult from non-collection of receivable due to cah problem encountered by cutomer or due to the diappearance of cutomer. However, thi rik i limited by Group policy which i to take out cutomer inurance cover inamuch a thi i permitted by local condition. The rik aociated with credit inurance i mentioned below in paragraph 1.8.8. Inurance below. Furthermore, due to the large number and variety of ditribution channel at worldwide level, the likelihood of occurrence of ignificant damage on the cale of the Group remain limited. The 10 larget cutomer/ditributor repreent 19.6% of the Group ale. The amount conidered a poing a rik of non-collection for which a proviion for liability i therefore booked i et out in note 17 Trade account receivable on page 138 in chapter 4. It doe not exceed 2% of gro account receivable. 1.8.6. Liquidity rik The Group Financial Service Department centralie all the ubidiarie financing need and alo negotiation with financial intitution in order to have better command over financing condition. Any tranaction that may be carried out directly by ubidiarie are cloely upervied. The L Oréal Group liquidity rik i managed with the primary aim of enuring continued financing and optimiing the financial cot of debt. To thi effect, the Group ha unued confirmed credit line from everal firt-rate bank totalling 3,236 million. Their term are le than 1 year for 1,086 million and ranging from 1 to 3 year for 2,150 million (ee note 23.9. Confirmed Credit line on page 150 in chapter 4). Thee credit line are not ubject to any conditionality claue baed on financial criteria. Furthermore, the Group ue the financial market, on a very regular bai, to meet liquidity need through the ue of hort-term paper in France and hort-term commercial paper in the United State. None of thee debt contain an early repayment claue linked to compliance with financial ratio (covenant) (ee note 23.1. Debt by type and 23.2. Debt by maturity date on page 149 and note 24.5. Liquidity rik on page 152 in chapter 4). When the Group make financial invetment, in the form of either bank depoit or marketable ecuritie, it give priority to hortterm tranferable intrument from firt-rate financial intitution. The L Oréal Group benefit from the following hort-term credit rating: A-1+, awarded in June 2013 by Standard & Poor ; Prime 1, awarded in June 2013 by Moody ; and F1+, awarded in Augut 2013 by FitchRating. Thee rating are unchanged compared to thoe aigned in 2012. 1.8.7. Financial and market rik Financial rik include interet rate rik, currency rik, the rik relating to the impairment of intangible aet, equity rik, rik with regard to the aet hedging employee commitment, the rik relating to change in tax regulation and the core commodity rik. 1.8.7.1. INTEREST RATE RISK For the requirement of it development and it capital expenditure policy, L Oréal ue borrowing and hort-term paper. The Group mainly refinance at floating rate, a mentioned in note 23.4. Breakdown of fixed rate and floating rate debt on page 150 in chapter 4. Other detail with regard to debt and interet rate are alo provided in note 23.5. Effective interet rate, 23.6. Average debt interet rate and 23.7. Fair value of borrowing and debt on page 150 in chapter 4. 1 REGISTRATION DOCUMENT / L ORÉAL 2013 25

1 RISK PRESENTATION OF THE GROUP FACTORS None of thee debt contain an early repayment claue linked to compliance with financial ratio (covenant). In order to limit the negative impact of interet rate variation, the Group ha a non-peculative interet rate management policy uing derivative, a decribed in note 24.2. Hedging of interet rate rik and 24.3. Senitivity to change in interet rate on page 152 in chapter 4. 1.8.7.2. CURRENCY RISK Due to it international preence, L Oréal i naturally expoed to currency variation. The fluctuation between the main currencie may therefore have an impact on the Group reult, at the time of tranlation into Euro of the non-euro financial tatement of ubidiarie, and may therefore make it difficult to compare performance between two financial year. In addition, commercial flow involving the purchae and ale of item and product are carried out between ubidiarie in different countrie. Procurement by ubidiarie i mainly made in the currency of the upplier country. In order to limit currency rik, the Group adopt a conervative approach of hedging at year-end a ignificant portion of annual requirement for the following year through forward purchae or ale contract or through option. Requirement are etablihed for the following year on the bai of the operating budget of each ubidiary. Thee requirement are then reviewed regularly throughout the year in progre. In order to benefit from better viibility of the flow generated, currency rik management i centralied with the Treaury Department at head office (Financial Service Department) which ue a pecific tool for centraliing the ubidiarie requirement by currency (FX report). The ytem of foreign exchange rik hedging i preented to the Audit Committee. The hedging methodology and the value involved are decribed in note 24.1. Hedging of currency rik on page 150 to 152 in chapter 4. The breakdown of conolidated ale for 2013 by currency i pecified in chapter 3 Financial highlight. Significant change in the monetary environment could have an impact on the Group reult and on it hareholder equity. The analyi of enitivity to currency fluctuation and the impact on equity are et out in detail in note 20.4 Other Comprehenive Income on page 142 in chapter 4. Finally, the impact of foreign exchange gain and loe on the income tatement i decribed in note 6 Foreign exchange gain and loe on page 124 in chapter 4. 1.8.7.3. RISK RELATING TO THE IMPAIRMENT OF INTANGIBLE ASSETS A tated in the paragraph relating to legal rik, L Oréal brand are a trategic aet for the Group. A decribed in note 1.15 Intangible aet on page 114 in chapter 4, goodwill and brand with an indefinite life pan are not ubject to depreciation but to periodic impairment tet which are carried out at leat once a year. Where the recoverable value of the brand i lower than it net book value, an impairment lo i recognied. Similarly, any variance between the recoverable value of each Cah-Generating Unit and the net book value of the aet including goodwill would lead to an impairment lo in repect of the aet, recorded in the income tatement. The amount for the lat 3 financial year are provided in note 7 Other operational income and expene on page 125 in chapter 4. The data and aumption ued in the impairment tet for the Cah-Generating Unit with ignificant goodwill and nondepreciable brand are decribed in note 13 Impairment tet on intangible aet on page 135 in chapter 4. 1.8.7.4. EQUITY RISK L Oréal doe not invet it cah in hare. For L Oréal, the main equity rik lie in the 8.93% take that it hold in the capital of Sanofi a of December 31 t, 2013, for an amount decribed in note 15 Non-current financial aet on page 137 in chapter 4. If the Sanofi hare price were to fall below the initial hare price ignificantly or on a prolonged bai, thi would potentially expoe L Oréal to impairing it aet through the income tatement a explained in note 24.6. Shareholding rik on page 152 in chapter 4. 1.8.7.5. RISKS WITH REGARD TO THE ASSETS HEDGING EMPLOYEE COMMITMENTS The aet ued a financial hedge for employee commitment are, by nature, expoed to the fluctuation on the market on which uch aet are inveted. Puruant to the proviion of the Internal Charter on the Management of aet dedicated to the hedging of the Group employee commitment, the allocation by category of aet i ubject to limit aimed in particular at reducing volatility rik and correlation rik between thee different categorie of aet. A Superviory Committee for the penion and benefit cheme offered by the Group ubidiarie, enure that thee principle are implemented and monitored, a decribed in the ection under Social information on Benefit and Penion cheme and other benefit on page 203. However, a large, lating fall in the financial market could have an impact on the value of the portfolio et up (ee note 21 Pot-employment benefit, termination benefit and other long-term employee benefit on page 143 et eq. in chapter 4). Furthermore, the Group chooe inurer and cutodian with robut rating from the three main pecialit rating agencie. 1.8.7.6 RISK RELATING TO THE CHANGE IN TAX REGULATIONS The Group i expoed to rik of an increae in exiting taxe, the introduction of new taxe, or double taxation concerning in particular corporate income tax, cutom dutie, and import taxe, the repatriation of dividend or ocial levie, which could have an advere impact on the Company reult. 26 REGISTRATION DOCUMENT / L ORÉAL 2013

PRESENTATION OF THE GROUP RISK FACTORS 1.8.7.7 CORE COMMODITY RISK The production of cometic depend on the purchae of raw material, at fluctuating price. Thee raw material or component enter into the compoition of product or their packaging. The main core raw material are polyethylene, polypropylene, aluminium and vegetable oil and their by-product. An exceptionally large increae in the price of thee raw material or energy price on the world market could have a direct effect on the manufacturing cot of the cometic. It i neverthele etimated that the impact of thi rie on gro margin would remain limited. In order to anticipate the effect of thee fluctuation and a a preventive meaure, L Oréal negotiate price indice with it main upplier of raw material and packaging item. The Group therefore doe not ue hedging. Alo, in order to offet market volatility, L Oréal make ongoing effort by carrying out project to cut cot and action to improve indutrial productivity. Furthermore, the pooling of reponibility for purchae ha made it poible to reinforce thee meaure. 1.8.8. Inurance 1.8.8.1. THE GROUP S OVERALL INSURANCE POLICY The objective of the Group policy on inurance i to protect the Group aet and people from the occurrence of identified material rik that could adverely affect it. For that purpoe, the Group ha implemented global inurance programme (in particular for the Property Damage & Interruption of Operation, Third Party Liability and Tranport inurance policie) which make it poible to manage the inurance cover and provide for uniform inurance cover for all it ubidiarie throughout the world, except in countrie where thi type of tructuring i not permitted. Thi policy i applied a follow: at parent company level, the Group ha negotiated worldwide inurance programme to cover it main rik on the bai of the cover available; in a local context, ubidiarie have to implement inurance cover to meet their local regulatory obligation and upplement the Group worldwide programme for any pecific rik. The financial olvency of the inurer choen i an important criterion in the Group inurer election proce. Mot of the inurance programme ubcribed by the Group involve the participation of a pool of inurer. Globally, the world main inurance companie are involved in one or more of thee Group programme. 1.8.8.2. INTEGRATED WORLDWIDE PROGRAMMES Third party liability The Group ha had an integrated global programme covering all it ubidiarie for everal year. Thi programme cover the financial conequence of the third party liability of Group entitie. It cover everal apect of third party liability, and notably operating liability, product liability and udden and accidental environmental damage. Claim activity under thi programme ha hitorically been low, which how the extremely high quality requirement and afety tandard applied by the Group in managing it operation and in deigning and manufacturing it product. The health and afety of conumer and employee i a contant priority at all level of Group operation. Property damage and interruption of operation The purpoe of thi policy i to protect the Group aet on the bai of the cover and capacity available on the inurance market. It cover claim related to the following event in particular: fire, lightning and exploion The Group ha et up an integrated global programme to cover all the property (fixed aet and inventorie) of it ubidiarie. Thi programme alo cover operating loe directly reulting from an inured property lo or damage. The level of inurance cover ha been elected to cover the maximum reaonably foreeeable lo, taking into account the prevention and protection meaure implemented at the Group manufacturing ite together with the buine continuity plan. A the capacity of the inurance market i limited for certain type of event, thi programme include aggregate ublimit, particularly in the event of natural diater. Thi programme include the performance, by the inurer engineer, of lo prevention audit for the Group location. Thee audit form part of the Group general afety management ytem. Tranport The Group ha et up an inurance programme to cover the tranportation of all it product by road, ea and air. All ubidiarie ubcribe to thi programme, which enure optimum tranport inurance for all flow of good. Cutomer credit rik Subidiarie are encouraged to purchae credit inurance, with the aitance of head office and under term and condition negotiated by it, in addition to their own credit management procedure, provided that inurance cover compatible with their level of commercial activity i available under financially acceptable condition. In a period of major economic lowdown, a reduction of commitment by major inurance companie could be noted on the credit inurance market a they may decide to reduce their cover of amount receivable in certain countrie. The inurance policie put in place in thee countrie could be affected by thi trend. Self-inurance Through it reinurance ubidiary, the Group carrie rik retention level that are not material at conolidated level, and thee are applicable over and above local deductible amount. Two programme are concerned: Tranport and Property Damage and Interruption of Operation. 1 REGISTRATION DOCUMENT / L ORÉAL 2013 27

28 REGISTRATION DOCUMENT / L ORÉAL 2013

2 CORPORATE GOVERNANCE * 2.1. SUMMARY OF THE PRINCIPLES 30 2.2 THE BOARD S COMPOSITION AND THE WAY IN WHICH THE BOARD S WORK IS PREPARED AND ORGANISED 31 2.2.1 Compoition of the Board of Director 32 2.2.2 The way in which the Board work i prepared and organied 48 2.2.3. Specific term and condition of participation by hareholder in the Annual General Meeting 61 2.2.4. Principle and rule adopted by the Board of Director to determine the remuneration and benefit of all kind granted to the executive officer 61 2.3. REMUNERATION OF THE DIRECTORS AND THE EXECUTIVE OFFICERS 62 2.3.1. Remuneration of the member of the Board of Director 62 2.3.2. Remuneration of the executive officer 63 Summary table of the recommendation of the AFEP-MEDEF Code which have not been applied 74 2.4. SUMMARY OF TRADING BY DIRECTORS AND EXECUTIVE OFFICERS IN L ORÉAL SHARES IN 2013 75 2.5. INTERNAL CONTROL AND RISK MANAGEMENT PROCEDURES (REPORT OF THE CHAIRMAN OF THE BOARD OF DIRECTORS ON INTERNAL CONTROL) 75 2.5.1. Definition and objective of Internal Control 75 2.5.2. Component of the ytem 76 2.5.3. The player 79 2.5.4. Internal Control ytem relating to the preparation and proceing of financial and accounting information 80 2.6. STATUTORY AUDITORS REPORT, PREPARED IN ACCORDANCE WITH ARTICLE L. 225-235 OF THE FRENCH COMMERCIAL CODE ON THE REPORT PREPARED BY THE CHAIRMAN OF THE BOARD OF DIRECTORS 83 2.7. STATUTORY AUDITORS SPECIAL REPORT ON REGULATED AGREEMENTS AND COMMITMENTS WITH THIRD PARTIES 84 * Thi information form an integral part of the Annual Financial Report a provided for in Article L. 451-1-2 of the French Monetary and Financial Code. REGISTRATION DOCUMENT / L ORÉAL 2013 29

2 SUMMARY CORPORATE GOVERNANCE OF THE PRINCIPLES Thi chapter decribe the way in which the Board work i prepared and organied and include, in particular, a ummary of the principle of organiation guaranteeing a balance of power. It include the complete text of the Internal Rule of the Board of Director. All component of the remuneration of the Director and executive officer are mentioned a well a the trading by Director and executive officer in L Oréal hare in 2013. The Internal Control procedure implemented by the Company are alo decribed. The Statutory Auditor Report related to Corporate Governance, namely their report on the report prepared by the Chairman and that on regulated agreement and commitment are included here. 2.1. SUMMARY OF THE PRINCIPLES AFEP-MEDEF Code: the reference Code The Board of Director conider that the recommendation of the AFEP-MEDEF Code of Corporate Governance for lited companie of June 2013 fit in with the Company approach to corporate governance. The Code, which introduced new elf-regulation rule with regard to governance in 2013, the mot important of which concern the introduction of a procedure for conultation of the Annual General Meeting on the remuneration of the executive officer ( Say on Pay ), led to a pecific preentation to the Board of Director made at the end of the year. Accordingly, thi i the Code referred to by the Company to prepare thi corporate governance chapter, approved by the Board at it meeting on Monday, February 10 th, 2014. The Code may be conulted on the webite at the following addre: http://www.medef.com/. In accordance with Article L. 225-37 of the French Commercial Code, thi chapter include the report of the Chairman on the Board compoition and on the way in which the Board work i prepared and organied a well a on the Internal Control procedure implemented by the Company. Under the term of Article L. 225-37, paragraph 6, of the French Commercial Code, the Chairman i required to preent a upplementary report, attached to the Management Report: [ ] The Chairman of the Board of Director give an account, in a report attached to the report mentioned in Article L. 225-100, L. 225-102, L. 225-102-1 and L. 233-26, of the Board compoition and of the application of the principle of balanced repreentation of men and women on the Board, of the way in which the Board work i prepared and organied, and on the Internal Control and rik management procedure put in place by the Company, decribing in particular thoe of it procedure that relate to the preparation and proceing of accounting and financial information for the parent company financial tatement and, where applicable, for the conolidated financial tatement. Without prejudice to the proviion of Article L. 225-56, the report alo indicate any limitation that the Board of Director impoe on the power of the Chief Executive Officer. Thi ame article of the French Commercial Code tate that: Where a Company voluntarily refer to a code of corporate governance drawn up by organiation repreenting buinee, the report [ ] alo pecifie the proviion which have not been applied and the reaon for thi non-application [ ] The report provided for in thi Article alo decribe the pecific term and condition of participation by hareholder in the General Meeting or refer to the proviion of the Article of Aociation which et out uch term and condition. Thi report furthermore decribe the principle and rule adopted by the Board of Director to determine the remuneration and benefit of all kind granted to the director and executive officer [ ] In accordance with Article L. 255-37, paragraph 9, of the French Commercial Code, it i pecified that the information provided for in Article L. 225-100-3 of the French Commercial Code i publihed in chapter 7, page 236 et eq. In application of thi ame Article, the Board of Director of L Oréal approved thi chapter at it meeting on February 10 th, 2014. In accordance with the updated recommendation of the AFEP-MEDEF Code, thi chapter identifie in a ummary table (page 74 ), thoe proviion of the Code which were not applied and explain the reaon for that choice puruant to Article L. 225-37 of the French Commercial Code. 30 REGISTRATION DOCUMENT / L ORÉAL 2013

CORPORATE GOVERNANCE THE BOARD S COMPOSITION AND THE WAY IN WHICH THE BOARD S WORK IS PREPARED AND ORGANISED 2.2 THE BOARD S COMPOSITION AND THE WAY IN WHICH THE BOARD S WORK IS PREPARED AND ORGANISED The quality of governance relie on an extremely trong commitment by all your company Director. The Board provide the General Management with valuable upport and aitance in making trategic deciion. The balance of power i enured by a very precie haring of the tak to be carried out by everyone. 2 (Jean-Paul Agon, Chairman and Chief Executive Officer of L Oréal) The balance of power at L Oréal in a Board of Director that i independent, trongly committed and vigilant The organiation of L Oréal Board of Director i adapted to the Company pecificitie and contant progre i alway ought. In 2006, the dutie of Chairman of the Board of Director were eparated from thoe of Chief Executive Officer, at the time when Sir Linday Owen-Jone had announced that he wanted to hand over ome of hi reponibilitie to devote ome time to the poition of Chairman of the Board of Director. Thi eparation of the dutie, which lated for five year, made it poible to completely enure a mooth tranition with Jean-Paul Agon, appointed a Chief Executive Officer. In 2011, L Oréal Board of Director decided that the dutie of Chairman of the Board of Director would be reunified with thoe of Chief Executive Officer and appointed Mr. Jean-Paul Agon to thi office. The Board of Director conider that the combination of thee role i particularly adapted to the pecificitie of L Oréal: a table and loyal hareholder bae, clear identification of it buinee, gradual, teady development of it international activitie, the extreme loyalty that ha alway exited among it enior manager and corporate officer, who have precie knowledge of the buine, and top-quality financial and economic performance. Furthermore, the Company ha to be reponive, firtly in a buine ector in which deciion have to be taken quickly in a highly competitive international environment, and econdly in the beauty ector which require trong, coherent communication at all time (ee ection 2.2.1.1. on page 32 ). Within thi general framework, the modu operandi of the Board of Director ha been ubject to particular attention o that the Board i in a poition to fully carry out it role and the balance of power on the Board i enured. At the end of 2013, like in 2012, at the time of the evaluation of their work and their relation with the general management, the Director noted that the organiation that ha been put in place work well. Deciion-making procee are clear, a i the diviion of power. THE BALANCE OF POWER The balance of power on the Board i enured through a very precie definition and haring of the tak to be carried out by everyone, with, on the one hand, the Chairman and CEO and, on the other, thirteen Director who are independently-minded and free to exercie their judgement. All the Director receive information on an ongoing bai and have uitable mean, within the framework of a code of operation, with well-tructured, pecialied committee and remit that have been added to ince their creation. WELL-INFORMED, INDEPENDENT DIRECTORS L Oréal Director are informed on an ongoing bai of all the apect of the tate of the Company buine and it performance. Beyond the preence of trongly committed Director with complementary experience (financial, indutrial or buine expertie, etc.), ome of whom carry the memory of the Company hitory, a they have longtanding in-depth knowledge of the Company and it environment, the Director all attend meeting regularly and are vigilant. The Board work i carried out and deliberation are made perfectly independently of the operational commitment by the General Management (ee ection 2.2.1.2. page 33 ). THE BOARD OF DIRECTORS HAS A WIDE ARRAY OF MEANS The Board ha the mean to enable it to handle the quetion that concern it with complete freedom and particularly when thi involve determining the Company trategic orientation, enuring and monitoring their implementation and overeeing the good management thereof. The General Management communicate tranparently and ha the upport of the Board of Director in the trategic choice that it propoe and which are finally decided by the Board. The Chairman conduct the Board work to build thi coheion without which General Management and it Executive Committee would not be able to commit themelve completely and enure the Company REGISTRATION DOCUMENT / L ORÉAL 2013 31

2 THE CORPORATE GOVERNANCE BOARD S COMPOSITION AND THE WAY IN WHICH THE BOARD S WORK IS PREPARED AND ORGANISED development with complete confidence and tranquillity. It i naturally in the interet of all the hareholder but alo of all the takeholder for the Chairman to lead the debate and encourage dicuion on the Board of Director. It can hold meeting at any time depending on topical iue that may arie (ee ection 2.2.2.1. on page 48 ). THE BOARD OF DIRECTORS ACTION IS FULLY ORGANISED The Board act in all circumtance in the Company corporate interet. Thi miion i reinforced inamuch a the Board ha adopted a code of operation defining rule with regard to conduct and formally providing for the condition in which it will be given the mean it need to fully perform it role, for example, by deciding to handle any iue with regard to the good running of the Company, within the framework of the law. Thu, L Oréal Board of Director ha adopted Internal Rule which it update from time to time, both with regard to the formal apect of it miion and with regard to the right and obligation of the Director (knowledge of, and compliance with, the regulatory proviion, recommendation and obligation, repect for the Company interet, a duty of diligence and proviion of information, confidentiality and ecrecy, reponibility in the field of inider trading, etc.), in the light of the finding of the evaluation of it work and within the cope of good corporate governance practice that it ha put in place. The complete text of the Internal Rule, which were lat updated on February 10 th, 2014, i publihed in full in thi Regitration Document, on page 54 et eq. It may be amended by the Board in light of the change in the law and regulation, but alo in it own modu operandi. Finally, a Director formally report potential conflict of interet which might concern him/her and, in any event, in thi cae he/he doe not take part in the voting in thi repect (ee ection 2.2.1.2. on page 33 and page 46 ). WELL-STRUCTURED, SPECIALISED BOARD COMMITTEES, WHOSE REMITS HAVE BEEN ADDED TO In 2011, addition were made to the remit of the Board committee, with a greater number of Director erving on thee committee and more opportunitie to meet with high-level manager. Only the Strategy and Sutainable Development Committee i chaired by the Chairman and CEO, who doe not erve on any other committee. They include independent Director, who repreent half of the member of the Audit Committee and the Remuneration Committee and include the Chairman of each Committee. Thee committee are completely free to define their repective agenda. They report regularly on their work to the Board of Director, prepare for it meeting and make propoal to it. Within the cope of the review of it own work at the end of 2013, the Board once again appreciated the quality of the contribution made by it committee in relation with the deciion that it take, in an increaingly detailed manner (ee ection 2.2.2.1. on page 48 ). THE BOARD PERIODICALLY EVALUATES THE QUALITY OF ITS ORGANISATION AND ITS WORK Within the framework of the annual evaluation of it modu operandi, on the bai of the bet corporate governance practice, the Director et themelve new target for improvement of the quality of their organiation and their deliberation every year, for example by enlarging the agenda for their meeting and thoe of their committee. They eek to adopt the bet poible modu operandi and enure that they have all the neceary aet to uccefully perform their tak, with complete freedom. 2.2.1 Compoition of the Board of Director The compoition of the Board of L Oréal, the rule it applie to it work, it modu operandi, and the work that it ha carried out in the year, evaluated on an annual bai by the Director, a well a the deciion made, are dealt in thi chapter. The Board wihe to point out that it carrie out it work above all on a collective bai, in accordance with ethical principle and in compliance with the legal proviion, regulation and recommendation. At December 31 t, 2013, the Board of Director comprie 14 member: the Chairman and Chief Executive Officer, ix Director appointed by the majority hareholder, three of whom are appointed by the Bettencourt Meyer family and three by Netlé (the two Vice-Chairmen of the Board being choen from among thee member) and even independent Director: M. Annette Roux, M. Virginie Morgon (ince April 26 th, 2013), Mr. Charle-Henri Filippi, Mr. Xavier Fontanet, Mr. Bernard Kariel, Mr. Marc Ladreit de Lacharrière and Mr. Loui Schweitzer. The change in the Board of Director in 2014 are decribed later in thi chapter, on page 47-48. Four elected employee repreentative alo attended Board meeting in 2013; they have an adviory vote. The breakdown of L Oréal hare capital at December 31 t, 2013 i included in thi Regitration Document, in ection 7.3.2. on page 240 ). 2.2.1.1 METHOD OF GENERAL MANAGEMENT CHOSEN In 2011, the Board of Director decided that the dutie of Chairman of the Board of Director would be reunified with thoe of Chief Executive Officer and entruted Mr. Jean-Paul Agon with uch dutie. The eparation of the dutie of Chairman of the Board of Director from thoe of Chief Executive Officer from 2006 to 2011 made it poible to enure a mooth tranition between Sir Linday Owen- Jone and Mr. Jean-Paul Agon. In 2011, the Board of Director conidered that the environment wa favourable to reunifying thee dutie. Thi governance model i indeed pecifically adapted to the pecificitie of L Oréal and it hareholder 32 REGISTRATION DOCUMENT / L ORÉAL 2013

CORPORATE GOVERNANCE THE BOARD S COMPOSITION AND THE WAY IN WHICH THE BOARD S WORK IS PREPARED AND ORGANISED tructure: a table and loyal hareholder bae, clear identification of it buinee, gradual, teady development of it international activitie, and top-quality financial and economic performance. L Oréal ha alway had enior manager and executive officer who are loyal to the Company and have precie knowledge of the buine. Furthermore, the Company ha to be reponive, firtly in a buine ector in which deciion have to be taken quickly in a highly competitive international environment, and econdly in the beauty ector which require trong, coherent communication at all time. At the end of 2013, at the time firtly of the evaluation of their work (ee ection 2.2.2.2. page 53 ), and econdly of that of their relation with the Company executive, the Director confirmed that thi organiation operated in an efficient, balanced manner. 2.2.1.2 DIRECTORS The 14 Director of L Oréal, who are trongly committed and reponible, exercie complete freedom of judgement, both in term of independence and gender parity. The compoition of the Board of Director i therefore in compliance with the recommendation of the June 2013 AFEP-MEDEF Code of Corporate Governance. At December 31 t, 2013, the member of the Board of Director were a follow: 2 Lit of office and directorhip held by Director and executive officer at December 31 t, 2013 Jean-Paul Agon French. Age: 57. He joined L Oréal in 1978. Following an international career a General Manager of the Conumer Product Diviion in Greece and of L Oréal Pari in France, International Managing Director of Biotherm, General Manager of L Oréal Germany, Executive Vice-Preident of the Aia Zone, Preident and CEO of L Oréal USA, Jean-Paul Agon wa appointed a Deputy Chief Executive Officer of L Oréal in 2005 and then Chief Executive Officer in April 2006 and finally Chairman and CEO in 2011. A Director of L Oréal ince 2006, he i alo Chairman of the L Oréal Corporate Foundation and Chairman of the Strategy and Sutainable Development Committee. Jean-Paul Agon i alo a Director of Air Liquide. Expiry date of term of office 2014 Director ince 2006 Chairman and Chief Executive Officer Chairman of the Strategy and Sutainable Development Committee Profeional addre: L Oréal 41 rue Martre 92117 Clichy Cedex France Hold 76,500 L Oréal hare Other corporate office and directorhip held French company L Air Liquide S.A.* Director Foreign companie Galderma Pharma S.A. (Switzerland)** Director L Oréal USA Inc. (United State) Director Other Chairman of the Board of Director L Oréal Corporate Foundation Director Expiry date of Corporate office and directorhip over the lat five year that have expired term of office Foreign companie Galderma Pharma S.A. (Switzerland) Vice-Chairman and Director April 2012 The Body Shop International PLC (United Kingdom) Vice-Chairman and Director March 2012 * Lited company. ** 50%-owned by L Oréal. REGISTRATION DOCUMENT / L ORÉAL 2013 33

2 THE CORPORATE GOVERNANCE BOARD S COMPOSITION AND THE WAY IN WHICH THE BOARD S WORK IS PREPARED AND ORGANISED Françoie Bettencourt Meyer French. Age: 60. The daughter of Mr. Liliane Bettencourt, who i herelf the daughter of the founder of L Oréal, Eugène Schueller, he ha been the Chairwoman of the family-owned holding company ince January 31 t, 2012 and i the Chairwoman of the Bettencourt Schueller Foundation. Françoie Bettencourt Meyer ha been a Director of L Oréal ince 1997 and a member of the Strategy and Sutainable Development Committee ince April 2012. Expiry date of term of office 2017 Director ince 1997 Profeional addre: Téthy 27-29 rue de Poionnier 92200 Neuilly- ur- Seine France Hold 283 L Oréal hare in abolute ownerhip and 76,441,389 hare in bare ownerhip Other corporate office and directorhip held French companie Téthy SAS Financière l Arcouet SAS Société Immobilière Sebor SAS Other Bettencourt Schueller Foundation Corporate office and directorhip over the lat five year that have expired French company Chairwoman Chairwoman of the Superviory Board Chairwoman Chairwoman Chairwoman of the Superviory Board Expiry date of term of office Clymène SAS Chairwoman June 28 th, 2012 34 REGISTRATION DOCUMENT / L ORÉAL 2013

CORPORATE GOVERNANCE THE BOARD S COMPOSITION AND THE WAY IN WHICH THE BOARD S WORK IS PREPARED AND ORGANISED Peter Brabeck-Letmathe Autrian. Age: 69. Hi main poition outide L Oréal i that of Chairman of the Board of Director of Netlé. Peter Brabeck-Letmathe ha been a Director of L Oréal and Vice-Chairman of the Board of Director ince 1997. He ha been a member of the Strategy and Sutainable Development Committee and of the Appointment and Governance Committee and the Human Reource and Remuneration Committee ince 2007. Expiry date of term of office 2017 2 Director ince 1997 Vice-Chairman of the Board of Director Member of the Appointment and Governance Committee Member of the Human Reource and Remuneration Committee Member of the Strategy and Sutainable Development Committee Profeional addre: Netlé Avenue Netlé, 55 CH 1800 Vevey Switzerland Hold 27,500 L Oréal hare Main corporate office held outide L Oréal Netlé S.A. (Switzerland)* Chairman of the Board Other corporate office and directorhip held Foreign companie Vice-Chairman of the Board of Director Credit Suie Group (Switzerland)* Director Delta Topco Limited (Jerey) Chairman of the Board Exxon Mobil (USA)* Director Director and Chairman Netlé Health Science S.A. in Lutry (Switzerland) of the Board Other Member of the Foundation World Economic Forum (Switzerland) Board Expiry date of Corporate office and directorhip over the lat five year that have expired term of office Foreign companie Table Ronde de Indutriel Européen (Belgium) Member of the Executive Committee Chairman of the Working Group on External Economic Relation 2013 Netlé Intitute of Health Science S.A in Feublen (Switzerland) Member of the Steering Committee 2013 Roche Holding S.A. (Switzerland) Director March 2010 Other Uprona Ltd (Canada) Director and Chairman February 2011 World Economic Forum (Switzerland) * Lited companie. Chairman of IBC (Internat. Buine Council) November 2010 REGISTRATION DOCUMENT / L ORÉAL 2013 35

2 THE CORPORATE GOVERNANCE BOARD S COMPOSITION AND THE WAY IN WHICH THE BOARD S WORK IS PREPARED AND ORGANISED Paul Bulcke Belgian. Age: 59. He joined Netlé in 1979, and ha been it Chief Executive Officer ince 2008. Paul Bulcke ha been a Director of L Oréal ince 2012, a member of the Strategy and Sutainable Development Committee ince April 2012 and i a Board member of Roche Holding in Switzerland. Expiry date of term of office 2016 Director ince 2012 Member of the Strategy and Sutainable Development Committee Profeional addre: Netlé Avenue Netlé, 55 CH 1800 Vevey Switzerland Hold 1,000 L Oréal hare Main corporate office held outide L Oréal Netlé S.A. (Switzerland)* Chief Executive Officer Netlé Health Science S.A in Lutry (Switzerland) Director Member of the Steering Netlé Intitute of Health Science S.A in Ecluben (Switzerland) committee Other corporate office and directorhip held Foreign companie Co-Chairman of the Superviory Cereal Partner Worldwide (Switzerland) Board Roche Holding Ltd (Switzerland)* Director Other Director and Co-Chairman of the Governance The Conumer Good Forum (France) Committee Expiry date of Corporate office and directorhip over the lat five year that have expired term of office Foreign company Alcon Inc. (Switzerland) Director Augut 2010 * Lited companie. 36 REGISTRATION DOCUMENT / L ORÉAL 2013

CORPORATE GOVERNANCE THE BOARD S COMPOSITION AND THE WAY IN WHICH THE BOARD S WORK IS PREPARED AND ORGANISED Charle-Henri Filippi French. Age: 61. He pent hi career within the HSBC Group, in which he wa notably Chairman and Chief Executive Officer of HSBC France from 2004 to 2007, and Chairman of the Board of Director in 2007 and 2008. Charle- Henri Filippi ha been a Director of L Oréal ince 2007, i a member of the Audit Committee (Chairman until February 2013), and i alo a Board member of Orange, a member of the Superviory Board of Euri and a non-voting member of the Board of Director of Nexity. He i currently the Chairman of Citigroup for France. Expiry date of term of office 2015 2 Director ince 2007 Member of the Audit Committee Member of the Human Reource and Remuneration Committee Profeional addre: Citigroup France 1-5 rue Paul-Cézanne 75008 Pari Hold 2,000 L Oréal hare Main corporate office held outide L Oréal Citigroup France Chairman Other corporate office and directorhip held French companie Member of the Superviory Euri Board Member of the Superviory Femu Qui SA Board Orange* Director Non-voting member Nexity* of the Board of Director Piaa S.A. Director Foreign company Member of the International Adviory Board ABERTIS [ince July 2013] Other ADIE (Aociation pour le Droit à l Initiative Économique) Director Aociation de Ami de l Opéra-Comique Chairman Expiry date of Corporate office and directorhip over the lat five year that have expired term of office French companie Viveri Reim SA Member of the Superviory Board July 2012 Octagone (parent company) and Alfina (ubidiary) Chairman May 2012 CVC Capital Partner ( CVC ) Senior Advior December 2010 Foreign company HSBC Private Banking Holding (Switzerland) S.A. Director 2009 Other Centre National d Art et de Culture George Pompidou Director March 2013 Aociation de Ami du Fetival d Automne à Pari Director September 2009 * Lited companie. REGISTRATION DOCUMENT / L ORÉAL 2013 37

2 THE CORPORATE GOVERNANCE BOARD S COMPOSITION AND THE WAY IN WHICH THE BOARD S WORK IS PREPARED AND ORGANISED Xavier Fontanet French. Age: 65. He i a former Chairman and Chief Executive Officer (1996-2009) and former Chairman of the Board of Director of Eilor (2010-2012), a member of the Superviory Board of Schneider Electric, and ha been a Director of L Oréal ince May 2002 and i Chairman of the Appointment and Governance Committee. Expiry date of term of office 2014 Director ince May 2002 Chairman of the Appointment and Governance Committee Profeional addre: Eilor 147 rue de Pari 94227 Charenton Cedex France Hold 1,050 L Oréal hare Main corporate office held outide L Oréal Eilor International S.A.* Director Other corporate office and directorhip held French company Schneider Electric S.A.* Member of the Superviory Board Other Permanent repreentative of Eilor International and member of the Board Aociation Nationale de Société par Action of Director Expiry date of Corporate office and directorhip over the lat five year that have expired term of office French companie Crédit Agricole S.A. Director May 2012 Eilor International S.A. Chairman of the Board of Director January 2012 Fond Stratégique d Invetiement S.A. Director June 2011 Eilor International S.A. Chairman and Chief Executive Officer January 2010 Foreign companie Eilor Amico (L.L.C) (United Arab Emirate) Director December 2011 Nikon and Eilor International Joint Reearch Center Co. Ltd. Chairman and Director December 2011 Nikon Eilor Co. Ltd (Japan) Director December 2011 EOA Holding Co. Inc. (United State) Chairman and Director October 2010 Eilor India PVT Ltd (India) Director June 2010 Eilor Manufacturing India PVT Ltd (India) Director June 2010 Tranition Optical Holding B.V. (Netherland) Director May 2010 Tranition Optical Inc. (United State) Director May 2010 Shanghai Eilor Optical Company Ltd (China) Director April 2010 Eilor of America Inc. (United State) Director March 2010 * Lited companie. 38 REGISTRATION DOCUMENT / L ORÉAL 2013

CORPORATE GOVERNANCE THE BOARD S COMPOSITION AND THE WAY IN WHICH THE BOARD S WORK IS PREPARED AND ORGANISED Bernard Kariel French. Age: 67. He i a former Chief Executive Officer of Lafarge. He ha been a Director of L Oréal ince 2004, the Chairman of the Human Reource and Remuneration Committee ince 2007 and i a member of the Strategy and Sutainable Development Committee. He i alo a Board member of Arkema and Nucor (United State). Expiry date of term of office 2016 2 Director ince 2004 Chairman of the Human Reource and Remuneration Committee Member of the Strategy and Sutainable Development Committee Profeional addre: 1 rue Saint-Jame 92200 Neuilly-ur-Seine France Hold 1,525 L Oréal hare Other corporate office and directorhip held French company Arkema S.A.* Director Foreign company Nucor (United State)* Director Expiry date of Corporate office and directorhip over the lat five year that have expired term of office French companie LBO France Partner September 2011 Lafarge S.A. Director May 2010 LBO France * Lited companie. Member of the Management Committee January 2010 Chritiane Kuehne Swi. Age: 58. She i the Head of the Food Strategic Buine Unit at Netlé which he joined in 1977. Chritiane Kuehne ha been a member of L Oréal Board of Director and the Audit Committee ince April 2012. Expiry date of term of office 2016 Director ince 2012 Member of the Audit Committee Profeional addre: Netlé Avenue Netlé, 55 CH 1800 Vevey Switzerland Hold 1,000 L Oréal hare Main corporate office held outide L Oréal Netlé S.A. (Switzerland)* Other corporate office and directorhip held Wett er Foundation pour le enfant de l Indochine Corporate office and directorhip over the lat five year that have expired None Head of Food Strategic Buine Unit Member of the Board * Lited company. REGISTRATION DOCUMENT / L ORÉAL 2013 39

2 THE CORPORATE GOVERNANCE BOARD S COMPOSITION AND THE WAY IN WHICH THE BOARD S WORK IS PREPARED AND ORGANISED Marc Ladreit de Lacharrière French. Age: 73. A member of the Intitut de France and with L Oréal from 1976 to 1991, Marc Ladreit de Lacharrière ha been a Director of L Oréal ince 1984, i Chairman and Chief Executive Officer of Fimalac, former Chairman of Fitch (United State), and a Board member of Caino, Lucien Barrière and Renault. Expiry date of term of office 2014 Director ince 1984 Profeional addre: Fimalac 97 rue de Lille 75007 Pari France Hold 30,340 L Oréal hare Main corporate office held outide L Oréal F. Marc de Lacharrière (Fimalac)* Chairman and Chief Executive Officer Other corporate office and directorhip held French companie Agence France Mueum Chairman of the Board Caino* Director Gilbert Coullier Production SAS Director Lucien Barrière Director Chairman of the Management Groupe Marc de Lacharrière Board Permanent repreentative of Fimalac Nextradio TV [ince May 22 nd, 2013] Renault S.A.* Director Renault.a.. Director Société Fermière du Caino Municipal de Canne SFCMC Director Member of the Superviory Webedia Board [ince July 2013] Foreign companie Fimalac Participation Sarl (Luxembourg) Managing Director Fitch Group (United State) Chairman Other Comité National de Coneiller du Commerce Extérieur de la France Honorary Chairman Coneil Artitique de Muée Nationaux Member Fond de dotation Abbaye de Lubilhac Chairman Fondation d Entreprie Culture et Diverité Chairman Fondation de Science Politique Member Intitut de France Member Expiry date of Corporate office and directorhip over the lat five year that have expired term of office French company Fimalac Participation Managing Director September 2010 Foreign companie Fitch Rating (United State) Chairman 2012 Algorithmic (Canada) Director 2009 Other Muée de Art Décoratif Director March 2013 Bettencourt Schueller Foundation Member January 2013 L Oréal Corporate Foundation Director 2012 * Lited companie. 40 REGISTRATION DOCUMENT / L ORÉAL 2013

CORPORATE GOVERNANCE THE BOARD S COMPOSITION AND THE WAY IN WHICH THE BOARD S WORK IS PREPARED AND ORGANISED Jean-Pierre Meyer French. Age: 65. He ha been a Director of L Oréal ince 1987 and Vice-Chairman of the Board of Director ince 1994, and i a member of the Strategy and Sutainable Development Committee, the Audit Committee, the Appointment and Governance Committee and the Human Reource and Remuneration Committee. He i Vice-Chairman of the Superviory Board and Chief Executive Officer of the family-owned holding company Téthy, a Board member of Netlé and Vice-Chairman of the Bettencourt Schueller Foundation. Expiry date of term of office 2016 2 Director ince 1987 Vice-Chairman of the Board of Director Member of the Audit Committee Member of the Appointment and Governance Committee Member of the Human Reource and Remuneration Committee Member of the Strategy and Sutainable Development Committee Profeional addre: Téthy 27-29 rue de Poionnier 92200 Neuilly-ur-Seine France Hold 15,332 L Oréal hare Other corporate office and directorhip held French company Chief Executive Officer Vice-Chairman of the Téthy SAS Superviory Board Foreign company Netlé S.A. (Switzerland)* Director Other Vice-Chairman of the Board Bettencourt Schueller Foundation of Director Expiry date of Corporate office and directorhip over the lat five year that have expired term of office French company Clymène SAS Chief Executive Officer June 2012 * Lited company. REGISTRATION DOCUMENT / L ORÉAL 2013 41

2 THE CORPORATE GOVERNANCE BOARD S COMPOSITION AND THE WAY IN WHICH THE BOARD S WORK IS PREPARED AND ORGANISED Jean-Victor Meyer French. Age: 27. He ha been a member of the Superviory Board of the family-owned holding company Téthy ince January 2011, and a Director of L Oréal ince February 2012. Expiry date of term of office 2016 Director ince 2012 Profeional addre: Téthy 27-29 rue de Poionnier 92200 Neuilly- ur- Seine Hold 1,500 L Oréal hare Other corporate office and directorhip held French companie Téthy SAS Exemplaire SAS Corporate office and directorhip over the lat five year that have expired None Member of the Superviory Board Chairman 42 REGISTRATION DOCUMENT / L ORÉAL 2013

CORPORATE GOVERNANCE THE BOARD S COMPOSITION AND THE WAY IN WHICH THE BOARD S WORK IS PREPARED AND ORGANISED Virginie Morgon French. Age: 44. Chief Operating Officer of Eurazéo (leader of the invetment team) which he joined in 2008 after ixteen year with Lazard. She ha been a Director of L Oréal ince April 26 th, 2013 and i a member of the Audit Committee. She i a Board member of Accor. Expiry date of term of office 2017 2 Director ince 2013 Member of the Audit Committee Profeional addre: 32 rue de Monceau - 75008 Pari - France Hold 1,000 L Oréal hare Main corporate office held outide L Oréal Member of the Management Board Eurazeo * Chief Operating Officer Other corporate office and directorhip held French companie Accor * Director Chairwoman of Eurazeo PME the Superviory Board Chairwoman of Holdeli (holding company for invetment in Eli) the Management Board LH APCOA (holding company for invetment in APCOA) CEO Chairwoman Legendre Holding 33 [ince November 2013] Foreign companie Chairwoman of the APCOA Parking AG (Germany) Superviory Board APCOA Group GmbH (Germany) Managing Director Chairwoman of the Adviory APCOA Parking Holding GmbH (Germany) Board Broletto 1 Srl (holding company with an invetment in Interco) (Italy) Chairwoman of the Board of Director Euraleo Srl (Italy) Managing Director Interco SpA (Italy) Managing Director Vice-Chairwoman of Moncler SpA (Italy) the Board of Director Other Women Forum (WEFCOS) Member of the Management Board Expiry date of Corporate office and directorhip over the lat five year that have expired term of office French companie Sportwear Indutrie Srl (Italy) Director November 2013 Edenred Director March 2013 OFI Private Equity Capital (now Eurazeo PME capital) LT Participation (holding company with an invetment in IPSOS) B&B Hotel * Lited companie. Chairwoman of the Superviory Board March 2012 Permanent repreentative of Eurazeo on the Board of Director Augut 2011 Chairwoman of the Superviory Board May 2009 REGISTRATION DOCUMENT / L ORÉAL 2013 43

2 THE CORPORATE GOVERNANCE BOARD S COMPOSITION AND THE WAY IN WHICH THE BOARD S WORK IS PREPARED AND ORGANISED Annette Roux French. Age: 71. Chairperon and Managing Director of Bénéteau from 1976 to 2005, then Vice-Chairperon of the Superviory Board, Annette Roux ha been a member of L Oréal Board of Director ince 2007. She i alo Chairperon of the Bénéteau Corporate Foundation. Expiry date of term of office 2015 Director ince 2007 Profeional addre: Le Embrun 16 boulevard de la Mer - 85800 Saint-Gille-Croix-de-Vie France Hold 1,000 L Oréal hare Main corporate office held outide L Oréal Vice-Chairperon (1) (2) Bénéteau S.A. Other corporate office and directorhip held French companie of the Superviory Board Chairwoman of the Superviory Beri 21 S.A. Board BH S.A.S. (2) Director Contruction Navale Bordeaux S.A.S (2) Director O Hara S.A. (2) Director SPBI S.A. (2) Director Foreign company Bénéteau Epaña (2) Director Other Bénéteau Corporate Foundation Chairperon Expiry date of Corporate office and directorhip over the lat five year that have expired term of office French company Beri 3000 S.A. Chairperon and Chief Executive Officer Augut 2010 Other Fédération de Indutrie Nautique Chairperon March 2009 (1) Company lited on compartment B of Eurolit. (2) Companie controlled by Beri 21 S.A. 44 REGISTRATION DOCUMENT / L ORÉAL 2013

CORPORATE GOVERNANCE THE BOARD S COMPOSITION AND THE WAY IN WHICH THE BOARD S WORK IS PREPARED AND ORGANISED Loui Schweitzer French. Age: 71. Chairman and Chief Executive Officer of Renault from 1992 to 2005, Chairman of the Board of Director until 2009, Loui Schweitzer ha been a Director of L Oréal ince 2005, i a member of the Audit Committee and it Chairman ince February 2013, and a member of the Strategy and Sutainable Development Committee. He i alo a member of the Adviory committee of Allianz S.E. (Germany) and Boch (Germany). Expiry date of term of office 2017 2 Director ince 2005 Chairman of the Audit Committee Member of the Strategy and Sutainable Development Committee Profeional addre: Renault Bât. Pierre Dreyfu 37 avenue Pierre Lefaucheux 92109 Boulogne-Billancourt Cedex France Hold 2,000 L Oréal hare Other corporate office and directorhip held French companie Veolia Environnement* Vice-Preident Foreign companie Member of the Adviory Allianz S.E. (Germany)* Committee Member of the Adviory Boch (Germany) Committee Other Comité d Echange franco-japonai (CEFJ) Special Advior Comité de Salon Chairman Fetival d Avignon Chairman Fondation Nationale de Science Politique Member of the Board Initiative France Chairman Maion de la Culture MC93 Chairman Muée du Quai Branly Director Société de Ami du Muée du Quai Branly Chairman Intitut Françai de Relation Internationale Vice-Preident Intitut d Étude Politique de Pari Member of the Board Expiry date of Corporate office and directorhip over the lat five year that have expired term of office French companie BNP Pariba Director May 2013 Le Monde (ILPA, LMSA, SEM) Chairman of the Superviory Board December 2010 Renault Chairman of the Board April 2009 Foreign companie AtraZeneca (United Kingdom) Director Chairman of the Board June 2012 AB Volvo (Sweden) Chairman of the Board April 2012 Other Haute Autorité de Lutte contre le Dicrimination et pour l Egalité Chairman March 2010 Banque de France Member of the Adviory Board * Lited companie. REGISTRATION DOCUMENT / L ORÉAL 2013 45

2 THE CORPORATE GOVERNANCE BOARD S COMPOSITION AND THE WAY IN WHICH THE BOARD S WORK IS PREPARED AND ORGANISED EXPERIENCED DIRECTORS WHO COMPLEMENT ONE ANOTHER L Oréal Director come from different background; they complement one another due to their different profeional experience, their kill and their nationalitie. They have good knowledge of the Company. The Director are preent, active and trongly committed. Thee are all aet which contribute to the quality of the Board deliberation in the context of the deciion that it i called on to make. REPRESENTATION OF WOMEN AND MEN THAT COMPLIES WITH THE PROVISIONS OF THE FRENCH LAW OF JANUARY 27 th, 2011 Out of a total of 14 Director, four women have eat on L Oréal Board of Director, repreenting a proportion of female director of 28.6%. The Board i thu in advance of the French Law of January 27 th, 2011 relating to the balanced repreentation of men and women, which provide for a proportion of 20% of women to be reached by 2014. The Board i doing everything it can to appoint more female Director. The Appointment and Governance Committee continued it election proce and made propoal to the Board of Director in 2013. A female candidate will be propoed to the Annual General Meeting on April 17 th, 2014, which will thereby lead to an increae in the proportion of women on the Board to 35.7%, with a total of 14 Director in 2014. In any event, in 2017, the compoition of the Board will be in compliance with the French law which require balanced repreentation of men and women, namely a minimum proportion of 40% of Director of the ame gender. The change in the Board of Director in 2014 are decribed later on page 47-48. INDEPENDENT DIRECTORS The balance of power on the Board i enured through a very precie definition and haring of the tak to be carried out by everyone, with, on the one hand, the Chairman and CEO and, on the other, thirteen Director who are independently-minded and free to exercie their judgement. All the Director receive information on an ongoing bai and have uitable mean, within the framework of the Internal Rule of the Board of Director, with well-tructured, pecialied committee and remit that have been added to ince their creation. The Director have a duty of vigilance and have complete freedom of judgement, which enable them in particular to participate, in total independence, in the deciion and work of the Board and it committee. At the end of 2013, the Board of Director reviewed the ituation of each of it member on a cae-by-cae bai, in particular in light of the independence criteria provided for in the AFEP-MEDEF Code. A member of the Board i conidered a independent when he/he doe not maintain any relationhip of any kind with the Company, it group or it General Management which may interfere with hi/her freedom of judgement. In thi pirit, the criteria which guide the Board in determining whether a member can qualify a independent are the following criteria pecified by the AFEP-MEDEF Code: the member mut not be an employee or corporate officer of the Company, an employee or director of it parent company or a company which it conolidate in it financial tatement, and mut not have held any of thee poition during the previou five year; the member mut not be a corporate officer of a company in which the Company directly or indirectly hold the office of director or in which an employee deignated a uch or a corporate officer of the Company (either currently or having performed uch dutie within the lat five year) hold an office a director; the member mut not be a cutomer, upplier, invetment banker or financial banker: which i important for the Company or it group, or for which the Company or it group repreent a ignificant portion of activitie; the member mut not have any cloe family link with a corporate officer; the member mut not have been the Company auditor over the five previou year. The Board failed to adopt one of the criteria pecified by the AFEP-MEDEF Code a it conider that the fact that a member ha performed a term of office for over 12 year doe not lead to uch member loing hi independent tatu. When a peron ha been a Director of L Oréal for over 12 year, hi profeional experience and hi freedom of judgement, combined with good knowledge of the Company, make a big contribution to the dicuion and deciion of the Board. Hi length of office i an aet for the Board. It contribute to putting L Oréal main trategic option into perpective. Indeed, the quality of a Director i alo meaured by hi experience, hi kill, hi authority and hi good knowledge of the Company, which are all aet which make it poible to conduct a long-term trategy. At December 31 t, 2013, out of the 14 member of the Board of Director, even Director qualify a independent: M. Annette Roux, M. Virginie Morgon, Mr. Charle-Henri Filippi, Mr. Xavier Fontanet, Mr. Bernard Kariel, Mr. Marc Ladreit de Lacharrière and Mr. Loui Schweitzer. It i furthermore pecified that a review wa carried out of the financial flow that took place in 2013 between L Oréal and the companie in which the even independent Director alo hold an office. It appear from thi that the nature of thee buine relationhip i not ignificant. The Board tak are carried out with the neceary objectivene and independence and all the Director take account of the interet of all the hareholder. RESPONSIBLE DIRECTORS Handling of conflict of interet Within the cope of the law and the right and obligation of the Director a defined in the Internal Rule of the Board of Director of L Oréal and in accordance with the AFEP-MEDEF Code, the Director are ubject to compliance with the rule in force with regard to conflict of interet and tock market ethic. Thu, the Director are under the obligation of notifying the Board of all ituation contituting a conflict of interet, even if uch conflict i only potential, and mut refrain from participating in the correponding deliberation. In thi regard, on the bai of the report made by each Director, the Board ha not identified any conflict of interet. The information puruant to Annex I of European Regulation No. 809/2004 et out hereafter contain additional detail in thi repect. 46 REGISTRATION DOCUMENT / L ORÉAL 2013

CORPORATE GOVERNANCE THE BOARD S COMPOSITION AND THE WAY IN WHICH THE BOARD S WORK IS PREPARED AND ORGANISED Information relating to Director and corporate officer puruant to Annex I of European Regulation No. 809/2004 Family relationhip exiting between the corporate officer or Director (Article 14.1 of the Annex) Mr. Françoie Bettencourt Meyer i Mr. Liliane Bettencourt daughter and Mr. Jean-Pierre Meyer wife. Mr. Jean-Victor Meyer, Mr. Liliane Bettencourt grandon, i the on of Mr. Françoie Bettencourt Meyer and Mr. Jean-Pierre Meyer. No conviction or incrimination of the corporate officer and Director (Article 14.1 of the Annex) To the Company knowledge, over the lat five year, the corporate officer and Director have not been convicted for fraud, aociated with a bankruptcy, receiverhip or liquidation, or the ubject of any official public incrimination or anction impoed by tatutory or regulatory authoritie (including deignated profeional bodie) or a deciion by a court diqualifying them from acting a a member of an adminitrative, management or uperviory body or from acting in the management or conduct of the buine of any iuer. Potential conflict of interet between the dutie of the corporate officer and Director with regard to L Oréal, and their private interet and/or other dutie (Article 14.2 and 18.3 of the Annex) Paragraph 2.2.1.2. on page 33 review the ituation of each of the Director with regard to the independence criteria provided for in the AFEP-MEDEF Code. The method of organiation and modu operandi adopted by the Board would allow it, where applicable, to prevent any wrongful exercie of control by a hareholder, in particular due to the preence of even independent Director on the Board of Director. See alo paragraph 7.3.5. on page 242 which concern agreement relating to hare in the Company capital. Information on ervice contract with member of the adminitrative bodie (Article 16.2 of the Annex) No corporate officer or Director have a ervice contract with L Oréal or any of it ubidiarie providing for the granting of benefit upon termination of uch contract. Stock market ethic The Board took cognizance of the rule to be applied to prevent inider trading, in particular regarding the period during which it i prohibited to trade in hare. It decided to amend it Internal Rule accordingly and iued recommendation to General Management to update L Oréal Stock Market Code of Ethic and the Fundamental of Internal Control. On the bai of the legal proviion, regulation and recommendation, thi Code point out that inide information mut only be paed on and ued for profeional purpoe. Inide information i precie information of a non-public nature, which, if made public, could have a ignificant influence on the hare price. Such inide information may, in particular, fall into one of three main categorie: trategic, linked to the definition and application of the Group growth trategy; recurring, linked to the annual chedule for production and publication of annual and interim financial tatement, regular releae or periodic meeting devoted to financial information; exceptional, linked to a pecific programme, project or financial tranaction. The Stock Market Code of Ethic tate that any peron in poeion of inide information mut proceed with the greatet caution when trading in or enabling other to trade in L Oréal hare, and emphaie that any miconduct in thi area may reult in criminal proceeding. The Internal Rule of the Board point out pecifically that a Director, who ha permanent inider tatu, i requeted to refrain from trading in L Oréal hare preciely in certain period and when he/he ha acce to inide information. Latly, Director are required to notify the Autorité de Marché Financier (AMF) of each tranaction carried out by them or their cloe relative and friend related to L Oréal hare. The Company remind them regularly of thi obligation (ee Summary of trading by Director and corporate officer in L Oréal hare in 2013 in ection 2.4. on page 75 ). CORPORATE OFFICES AND DUTIES OF THE EXECUTIVE OFFICERS AND DIRECTORS The Board of Director complie with the AFEP-MEDEF Code of Corporate Governance which provide that the taggering of the term of office mut be organied in order to avoid renewal all at once and favour the harmoniou renewal of the Director. End of the term of office of Sir Linday Owen-Jone in 2013 Sir Linday Owen-Jone, Honorary Chairman, choe to put an end to hi tenure a Director at the cloe of the Annual General Meeting on Friday, April 26 th, 2013. At that time, Mr. Jean-Paul Agon, Chairman and Chief Executive Officer, thanked him incerely, in the name of the Board of Director, peronally and on behalf of all the hareholder, not only for hi action throughout the 30 year he pent at L Oréal, including 22 year a it Chairman, but alo imply becaue he made a big mark on the Company. For a quarter of a century, Sir Linday Owen-Jone drove the Group, gave it it dimenion and ucce, with imagination, energy and courage. Renewal of tenure a Director in 2013 The Annual General Meeting held on April 26 th, 2013 renewed the tenure of M. Françoie Bettencourt Meyer, Mr. Peter Brabeck- Letmathe and Mr. Loui Schweitzer for a term of four year. Appointment of Director in 2013 The Annual General Meeting held on April 26 th, 2013 proceeded with the appointment of M. Virginie Morgon a a Director for a term of four year. Tenure a Director that are due to expire in 2014 The tenure a Director of Mr. Marc Ladreit de Lacharrière i due to expire at the cloe of the Annual General Meeting on April 17 th, 2014. Mr. de Lacharrière doe not want hi tenure to be renewed. From 1976 to 1984, he held the poition of Finance Director then Executive Vice-Preident of Finance and then Group Executive Vice-Preident from 1984 to 1991. Mr. de Lacharrière wa appointed a a Director of L Oréal in 1984. Hi profeional experience and hi freedom of judgement, combined with hi good knowledge of the Company, have made a big contribution to the operation of the Company and the dicuion and deciion of the Board. Hi length of office wa an aet for the Board, and contributed to putting L Oréal main trategic option into perpective. 2 REGISTRATION DOCUMENT / L ORÉAL 2013 47

2 THE CORPORATE GOVERNANCE BOARD S COMPOSITION AND THE WAY IN WHICH THE BOARD S WORK IS PREPARED AND ORGANISED The tenure a Director of Mr. Jean-Paul Agon and Mr. Xavier Fontanet are due to expire at the cloe of the Annual General Meeting on Thurday, April 17 th, 2014. The renewal of their tenure will be put to the vote of the hareholder on that occaion. With the exception of a meeting of the Board of Director which Mr. Fontanet wa unable to attend, thee two Director were preent at all Board meeting and all the meeting of the committee of which each of them i a member in 2013. Appointment of a new Director in 2014 Once again in 2013, the Appointment and Governance Committee looked at the change in it compoition in order to make ure that it compoition in 2017 would be in line with the French Law of January 27 th, 2011 requiring the balanced repreentation of men and women, namely a minimum proportion of 40% of Director of the ame gender. The Board of Director i already in advance of thi law which provide for a proportion of 20% of women to be reached by 2014 and i doing everything it can to gradually appoint more female Director. In 2013, female repreentation on the Board wa 28.6%. On the propoal of the Appointment and Governance Committee, which ha introduced a election proce for poible new candidate, the Board wihe to increae the number of women on the Board once again in 2014. The appointment of M. Belén Garijo will be propoed to the Annual General Meeting on April 17 th, 2014. M. Belé n Garijo, age 53, who i Spanih, i a graduate of the Univerity of Medicine of Madrid. After a few year pent a a reearcher in pharmacology at the Univerity of Madrid, he joined the pharmaceutical indutry, the buine ector in which he ha worked for 25 year. Since 2011 he ha been the Preident and CEO of Merck-Serono, a pharmaceutical ubidiary of the German Group Merck. In 1992, M. Garijo wa elected a a member of the New York Academy of Science. She ha received everal award a a female executive officer, and in particular the title of CEO for 2009 given by the Expanion magazine in Spain. In 2012, he wa appointed a a member of the Board of Director of BBVA, the econd larget Spanih bank, preent in 40 countrie. M. Garijo will bring to the Board of Director of L Oréal her expertie in the health ector, her international experience, her knowledge of a wide variety of corporate culture and her ene of buine opportunity. Thi appointment of M. Garijo a an independent Director for a period of four year would lead to an increae in the number of women on the Board to 5 out of 14 Director, thu leading to a percentage of repreentation of women of 35.7%, and in the number of independent Director to 7 out of 14, thu giving a percentage of independent Director of 50%. 2.2.2 The way in which the Board work i prepared and organied 2.2.2.1 GENERAL INFORMATION ON BOARD AND COMMITTEE MEETINGS IN 2013 Committed Director, with in-depth knowledge of the Company The preparation and holding of Board meeting and meeting of it committee require increaing availability and a ignificant invetment by the Director. L Oréal Director are regularly informed of all the Company activitie and it performance in a highly competitive environment. Director can propoe, with complete independence, any topic appropriate for good long-term governance of the Company for incluion on the agenda for the work by the Board and it committee. The committee prepare for dicuion and deciion by the Board. Board meeting are very often held in the preence of enior manager of the Company who are invited to attend in light of the topical iue with regard to L Oréal development and many apect of it trategy. In an open and contructive dialogue, exchange of view, in confidence, contribute to the quality of the Director work. With complementary expertie, and with complete freedom of judgement, the Director collectively enure that the meaure adopted ait in the implementation of L Oréal trategy. The dicuion on the Board, encouraged by the Chairman, take place tranparently and go into ubject in detail. Regularity of attendance at meeting by Director In 2013, the Board, with 14 Director in office throughout the year, met 5 time. Some Director, who were either at the beginning or the end of their tenure, were only in office for part of the year. The memberhip of the Audit Committee wa increaed in 2013 with the arrival of an additional independent Director. The average attendance rate at Board meeting wa 91.4% on average in 2013. Attendance fee The allocation of attendance fee, etablihed on the bai of the regularity of attendance of each of the Director at Board meeting and the preence on it committee, i decribed in detail in chapter 2, ection 2.3, page 62. At the end of 2013 and for the attendance fee to be allocated in repect of the 2014 financial year, the Board ha decided to adopt, in accordance with the recommendation of the AFEP- MEDEF Code, a predominantly variable portion overall rewarding regularity of attendance at Committee meeting a i already the cae for Board meeting. In addition, in order to take account firtly of the appointment of two employee Director in 2014, and econdly the increae in the 48 REGISTRATION DOCUMENT / L ORÉAL 2013

CORPORATE GOVERNANCE THE BOARD S COMPOSITION AND THE WAY IN WHICH THE BOARD S WORK IS PREPARED AND ORGANISED number of meeting held, the Board will propoe to the Annual General Meeting on April 17 th, 2014 to increae the maximum authoried amount of attendance fee. THE ACTIVITIES OF THE BOARD OF DIRECTORS The Board contantly trive to apply a modu operandi that trictly complie with legal requirement, and i alo conducive to good corporate governance. Appointed by hareholder, the Director overee the economic and financial management of the Group and participate in determining it trategy. They review and approve the main line of action adopted by the General Management, which implement them. The Board work i baed on Internal Rule (publihed in paragraph 2.2.2.3. on page 54 et eq.) deigned to upplement the legal, regulatory and tatutory rule upheld by the Board a a whole and by each Director individually. The Internal Rule define the modu operandi of the Board, in the interet of the Company and all it hareholder, a well a that of it committee made up of Director to which it give preparatory aignment with regard to it work. Thee Internal Rule were updated by the Board on February 10 th, 2014 to reflect, in particular, firtly, the change in the AFEP-MEDEF Code in June 2013 and, econdly, the French Law on Employment Security of June 14 th, 2013. The new Internal Rule, like the previou verion, are made public in thi Regitration Document and publihed on L Oréal webite. The Board work focued on buine activitie, trategy and the Company environmental, ocial and ocietal reponibility commitment In 2013, beide the regular monitoring of buine activitie, the Board of Director continued it work, a it had choen to do, on the component of trategy in the preence of everal enior manager, particularly with regard to propoed acquiition. Each preentation by a enior manager give the Director the opportunity to take tock, in an ever more detailed manner, of an apect that characterie it buine and it organiation, enabling them to forge an opinion and to make their deciion in full knowledge of the fact. For example, in 2013, at the requet of the Director, a Board meeting wa held at L Oréal Global Hair Reearch Centre. Another meeting wa organied at the Profeional Product Diviion for a concrete analyi of the aet of the haircare market throughout the world and related market development. In addition, the Board had the occaion to review the Human Relation policy and it challenge with regard to identifying and developing talent on all continent. A atteted to by the preparatory work of it C ommittee (ee below), the Board alo analye other apect of trategy, the Group economic and financial management and the Company commitment in the environmental, ocial and ocietal field. Proviion of information to the Board on the financial ituation, the cah poition and the Company commitment The financial ituation and the cah poition are reviewed at leat twice a year at a Board meeting, at the time of cloing of the annual financial tatement and the review of the interim financial tatement or at any other time if neceary. The balance heet tructure remain olid and the Group i not in debt. The Company commitment are reviewed within the framework of the annual renewal of the authoriation given to the Chairman and Chief Executive Officer and the delegation of authority he grant. THE ACTIVITIES OF THE BOARD COMMITTEES The Board dicuion and deciion are aited by the work performed by it C ommittee, which report to it after each of their meeting. The remit of each Committee are decribed in detail in the Internal Rule of the Board of Director, which were updated at the beginning of 2014. The C ommittee were again given reponibility by the Board for preparing it deciion in 2013. The compoition of thee committee, their remit and their work in 2013 are clarified and decribed in detail in thi chapter. The Board C ommittee act trictly within the framework of the remit given to them by the Board. They prepare actively for it work and make propoal but they do not have any deciionmaking power. Their remit are et out in the Internal Rule of the Board of Director (publihed in paragraph 2.2.2.3. on page 54 et eq.). The Strategy and Sutainable Development Committee Thi Committee clarifie, through it analye, the trategic orientation ubmitted to the Board of Director and monitor the implementation and progre of ignificant operation that are under way. It enure that the main financial balance are preerved. Within thi framework, the Committee review the main trategic line of development, option and project preented by the General Management, and their economic and financial conequence, acquiition opportunitie, and financial tranaction liable to ignificantly change the balance heet tructure. The Committee alo make ure that the Company commitment with regard to Sutainable Development have been duly taken into conideration, in light of the iue pecific to the Group buine activitie and it objective. Finally, the Committee review the propoed trategic orientation, a defined by the Board of Director, with a view to conultation of the Central Work Council. Compoition of the Committee The Committee, which conit of even Director, i chaired by the Chairman and Chief Executive Officer (Mr. Jean-Paul Agon). It i alo compoed of two member of the Bettencourt family (Mr. Françoie Bettencourt Meyer and Mr. Jean-Pierre Meyer), two member from Netlé (Mr. Peter Brabeck-Letmathe and Mr. Paul Bulcke) and two independent Director (Mr. Bernard Kariel and Mr. Loui Schweitzer). All thee Director participate in Committee meeting with complete freedom of judgement and in the interet of all the hareholder. The Committee met five time in 2013, with an attendance rate of 100%. 2 REGISTRATION DOCUMENT / L ORÉAL 2013 49

2 THE CORPORATE GOVERNANCE BOARD S COMPOSITION AND THE WAY IN WHICH THE BOARD S WORK IS PREPARED AND ORGANISED The Committee work A in the pat, at each of it meeting in 2013, the Committee examined the performance of the latet product launche, analyed buine activitie in term of ale and reult, and dicued the propect and development opportunitie of the Group and it Diviion within the cope of change in market and competition. Approach to trategy At the end of the year, in light of the performance for the financial year, the Group trategic development propect were examined by the Committee before being preented to the Board, which validated them. The Board noted the regular growth of the market hare of L Oréal Cometic over the lat few year. L Oréal ambition i to continue to win market hare, outperform market growth and increae profitability by looking to achieve performance in all area. Acquiition Throughout the year, acquiition project were reviewed by the Committee before ome of them were preented to the Board for it deciion. Thu, the Board of Director authoried the General Management to enter into trategic acquiition in 2013, with: the acquiition of the Beauty and Peronal Care buine of Interconumer Product Limited in Kenya, a ignificant player on the Kenyan beauty market, with trong poition in kin and hair care; the acquiition of a majority take in Brazil Emporio, which offer complete range of cometic product old through a franchie network; the acquiition of Cheryl Comeceutical in India, a pioneer in profeional kin care product and treatment in beauty alon acro the country; the acquiition at the beginning of 2014 of Decleor and Carita; the acquiition of Magic Holding, the Chinee market leader in the facial mak indutry which hould be completed in 2014. Sutainable Development The Committee hare the commitment made by the Group within the cope of the Sharing beauty with all programme. Thi programme wa preented to the Board of Director a a whole and cover four area: innovating utainably, producing utainably, conuming utainably and haring growth with the men at women at L Oréal, with upplier and with communitie. Ethic at the heart of L Oréal governance and commitment The Board of Director attache particular importance to compliance with L Oréal ethic principle integrity, repect, courage and tranparency and more generally with the Code of Buine Ethic. Thee commitment are the cornertone, in particular, for the Group policie with regard to reponible innovation, the environment, corporate ocial and ocietal reponibility and corporate philanthropy. L Oréal wa recognied for the fourth time a one of the World Mot Ethical Companie by the Ethiphere Intitute and ha been part of the United Nation Global Compact 100 tock market index ince it wa created in 2013. The Audit Committee The main remit of the Audit Committee involve, in accordance with the ordinance of December 2008 and in line with the recommendation made by the AMF in 2010, monitoring the proce for preparation of financial information, the effectivene of the Internal Control and rik management ytem, the tatutory audit of the annual and conolidated financial tatement by the Statutory Auditor and finally the Statutory Auditor independence. Furthermore, if, in the coure of it work, the Committee detect a ubtantial rik, which in it view i not adequately dealt with, it warn the Chairman of the Board accordingly. The Committee can alo, in agreement with the General Management, conult other people who may be able to help it carry out it dutie, particularly manager with economic and financial reponibilitie and thoe in charge of proceing financial information. The Audit Committee i reponible for monitoring the Group main rik expoure and enitivitie. The Committee review of the financial tatement i accompanied by a preentation by the Vice-Preident, Finance decribing the Company expoure to ignificant rik. The Committee examine the programme and objective of the Internal Audit Department and review the main topic that it identifie a well a the Internal Control ytem method and procedure ued. It review every year the ection of the Management Report relating to rik factor and the report of the Chairman of the Board of Director relating to Internal Control and rik management procedure. Compoition of the Committee The Chairman and Chief Executive Officer i not a member of the Audit Committee. In 2013, another Director, M. Virginie Morgon, wa appointed to the Committee, meaning that the Committee now ha five member, with independent Director repreenting 60% of it compoition. Since February 2013, the Committee ha been chaired by Mr. Loui Schweitzer, an independent Director, who ha been a Committee member ince 2011 and who ha recognied financial expertie. It i alo compoed of M. Chritiane Kuehne, appointed a member in 2012, Mr. Jean-Pierre Meyer, a Committee member ince it creation in 1999, and Mr. Charle- Henri Filippi, appointed to the Committee in 2008 and Chairman until February 2013. Mr. Filippi i currently the Chairman of Citigroup for France. It i noted that Citigroup doe not have, and ha never had, a ignificant poition with regard to L Oréal banking tranaction. Neverthele, Charle- Henri Filippi i aware that he i under the obligation of notifying the L Oréal Board of Director of all ituation contituting a conflict of interet, even if uch conflict i only potential, and that he mut refrain from participating in the correponding deciion. Furthermore, at Citigroup, he will not take part in the work that i liable to concern L Oréal. Charle- Henri Filippi i an independent Director, with no conflict of interet, available and competent. The Director who are member of the Audit Committee have the neceary qualification due to their profeional experience and their good knowledge of the Group accounting and financial procedure which are preented to them on a regular bai. They participate actively in Committee meeting, with complete freedom of judgement and in the interet of all the hareholder. 50 REGISTRATION DOCUMENT / L ORÉAL 2013

CORPORATE GOVERNANCE THE BOARD S COMPOSITION AND THE WAY IN WHICH THE BOARD S WORK IS PREPARED AND ORGANISED The Audit Committee met four time in 2013, in the preence of all it member. On everal occaion, the Committee interviewed the Executive Vice-Preident, Adminitration and Finance and the enior manager in charge of the area in which the Committee review activitie, in particular within the cope of the procee related to rik management and control. The Statutory Auditor attend meeting. The Committee did not conider it appropriate to ue outide expert. Quality of the reult The Committee examine in depth all the apect of the Group annual and interim reult, and the main item on the Company balance heet. Time frame for proviion of document Within the cope of the publication of the annual and interim reult, the Audit Committee meeting relating to the review of thee financial tatement i held on a date cloe to that of their preentation to the Board of Director. But it hould be noted that the Board and it committee are regularly given the appropriate information to carry out their uperviory aignment, in thi field in particular. Furthermore, the correponding document are ytematically ent to them prior to the meeting. Internal Audit and Internal Control activitie Within the cope of more extenive control of the data making up the financial tatement, the Committee looked at the Internal Audit department activitie again in 2013 and noted that the quality of the organiation and the reult of the aignment were being contantly improved. The finding make it poibly to enhance the quality of the tandard, the procedure and the tool for proceing and ecure treatment of information. In relation with Internal Control, the Committee i informed of the rik mapping howing the rik identified on the bai of an indepth proce of identification and analyi within the regulatory framework and within the cope of the recommendation made by the AMF. The Committee noted that rik are taken into conideration at operational level, which i controlled, and that there i a proce for a regular review of rik by the Executive Committee. Fraud rik The Committee wa informed of the deployment of a programme to raie awarene of the rik of fraud (preenting the main operational cenario that could occur, the alert ytem and the exiting procedure and control) which i aimed at reducing the Group expoure to thi rik. Corruption prevention L Oréal policy with regard to corruption prevention and a document on thi ubject ent to all the Group employee were preented to the Committee. Legal rik The Committee i regularly informed of the legal rik and the potential litigation and major event liable to have a ignificant impact on L Oréal financial poition and it aet and liabilitie. No major event or litigation of thi kind wa noted by the Committee in 2013. Information Sytem Security The principle adopted by the Group in relation with Information Sytem Security were preented to the Committee, which noted that L Oréal development wa taking place through a olid, durable and innovative infratructure, in a ecure environment, with cot under control. Change in the regulation on animal teting The Committee reviewed the condition in which L Oréal complie with the prohibition on elling product if animal teting ha to be conducted for their evaluation. L Oréal ha engaged in developing afety prediction tool for over thirty year. Major breakthrough in the prediction of enitiation rik have been made over the lat two year, with the development of new method that make it poible to evaluate the performance of new raw material. Statutory Auditor Within the cope of the auditing of the account by the Statutory Auditor, the Committee took note of the reult of their audit, their recommendation and the follow-up action taken further to uch recommendation. The Committee reviewed the breakdown of the fee billed by the Statutory Auditor between audit ervice a uch, audit-related work and any other ervice they provide. The Statutory Auditor preented their audit plan in 2013. L Oréal require a great deal of rigour on the part of it Statutory Auditor and the level of coverage of their work i high. The audit focue on a prior analyi of the rik and aement of the Internal Control ytem to bring them under control. Like it doe every year, the Committee met with the Statutory Auditor outide the preence of management. The Appointment and Governance Committee The main remit of the Appointment and Governance Committee involve aiting in the deciion made by the Board with regard to the condition of performance of General Management and the tatu of the executive officer, making propoal to the Board for the choice of Director, dicuing the claification of Director a independent, which i reviewed by the Board every year before the publication of the Annual Report, iuing an opinion on the propoal of the Chairman of the Board for the appointment of the Chief Executive Officer, making ure that the Code of Corporate Governance to which the Company refer i properly applied, enuring the implementation of a procedure for the preparation of ucceion plan for the executive officer in the event of an unforeeen vacancy and conducting the reflection proce with regard to the committee that are in charge of preparing the Board work and preparing for the Board deciion with regard to the updating of it Internal Rule. Compoition of the Committee Three Director are member of thi Committee at December 31 t, 2013: Mr. Xavier Fontanet, Committee Chairman, Mr. Jean-Pierre Meyer and Mr. Peter Brabeck-Letmathe. Thee Director actively participate in Committee meeting, with complete freedom of judgement and in the interet of all the hareholder. On February 10 th, 2014, the Board of Director decided to appoint another independent Director to the Committee, thu bringing the number of Committee member to four. With regard to the proviion of the AFEP-MEDEF Code which recommend that the number of independent Director hould be greater than the majority, it i pointed out that, under thee condition, half it member will be independent. 2 REGISTRATION DOCUMENT / L ORÉAL 2013 51

2 THE CORPORATE GOVERNANCE BOARD S COMPOSITION AND THE WAY IN WHICH THE BOARD S WORK IS PREPARED AND ORGANISED In 2013, the Committee met three time in the preence of all it member. The Chairman and Chief Executive Officer can attend Committee meeting except with regard to any matter on the agenda that concern him directly. Combination of the role of Chairman and Chief Executive Officer The Committee once again reviewed the condition for performance of the role of Chairman and of Chief Executive Officer, with the combination of the role. In thi chapter the meaure put in place to enure the balance of power on the Board of Director have been decribed to how the pecific nature and alo the effectivene of the organiation. Review of the independence of the Director The Appointment and Governance Committee propoe to the Board of Director every year to examine on a cae-bycae bai the ituation of each of the Director with regard to their independence according to the criteria et out in the AFEP-MEDEF Code. Renewal of tenure of Director and appointment of a Director in 2013 A mentioned in paragraph 2.2.1.2. on page 33, the Committee made propoal to the Board of Director for renewal of tenure and the appointment of a new Director in 2013. Balanced repreentation of men and women In 2013, the Appointment and Governance Committee once again examined the change in it compoition in order for it to be in line, in 2017, with the French Law of January 27 th, 2011 requiring the balanced repreentation of men and women, namely a minimum proportion of 40% of Director of the ame gender. New proviion with regard to Governance in 2014 New proviion with regard to Governance and uperviion of the remuneration of the corporate officer have to be applied in lited companie in 2014. Thee proviion reult eentially, firtly, from the French Law on Employment Security of June 14 th, 2013, one of the objective of which i to create new individual and collective right for the employee and, econdly, the new AFEP- MEDEF Code of Corporate Governance for lited companie of June 16 th, 2013 which introduce new elf-regulation rule with regard to governance. The Committee took due note of thee proviion and reported on them to the Board, propoing to it the term and condition of implementation. The Internal Rule of the Board of Director were amended accordingly. The Board of Director in 2014 The Appointment and Governance Committee examined the compoition of the Board and the term of office that were due to expire in 2014 and made propoal to the Board, which approved them. Appointment of a new Director in 2014 The Appointment and Governance Committee looked at the profile of a new candidate for office a a Director in 2014 which wa approved by the Board of Director. Thi will be put to the Annual General Meeting on Thurday, April 17 th, 2014 (ee page 48 above). Non-renewal of a tenure a Director in 2014 Mr. Marc Ladreit de Lacharrière informed the Board of Director that he did not want hi tenure a Director to be renewed after the Annual General Meeting on Thurday, April 17 th, 2014 (ee page 47 above). Renewal of tenure a Director in 2014 A the tenure a Director of Mr. Jean-Paul Agon and Mr. Xavier Fontanet are due to expire in 2014, the renewal of their tenure for a term of four year wa propoed to the Board of Director and i being ubmitted to the Annual General Meeting of April 17 th, 2014 (ee page 47 above). Continuity of General Management The Committee continued with it work which it begun a long time ago, reflecting on and propoing the condition in which the continuity of L Oréal General Management would be enured if the Chief Executive Officer i unable to act. The Human Reource and Remuneration Committee The main remit of the Human Reource and Remuneration Committee are in particular to make propoal with regard to the remuneration of the Chairman of the Board of Director and that of the Chief Executive Officer, the total amount of the attendance fee to be ubmitted for approval to the Annual General Meeting and the method of ditribution of uch fee, and the implementation of long-term incentive plan uch a for example, plan for free grant of hare or performance hare plan. The Committee role ha been enlarged to include all the component of the Human Reource policy uch a, for example, labour relation, recruitment, diverity, talent management and fotering employee loyalty. The Committee alo make ure that the rule of ethical conduct, a et out in a Code of Buine Ethic, and the Group trong value, uch a repect and integrity, are widely dieminated, known and put into practice. Four Director are member of the Committee: Mr. Bernard Kariel, an independent Director and Committee Chairman, Mr. Jean- Pierre Meyer, Mr. Peter Brabeck-Letmathe and Mr. Charle-Henri Filippi. Thee Director actively participate in Committee meeting, with complete freedom of judgement and in the interet of all the hareholder. In light of the proviion of the AFEP-MEDEF Code which recommend that the number of independent Director hould exceed the majority, it i pointed out that half of the Committee member are independent. In 2013, the Committee met ix time with an attendance rate of 91%. The Chairman and Chief Executive Officer can attend Committee meeting except with regard to any matter on the agenda that concern him directly. Remuneration of the executive officer and Director and the conditional grant of hare The Committee made new propoal to the Board with regard to the remuneration of the executive officer and Director (ee ection 2.3. on page 62 ) and propoed to the Board to make a conditional grant of hare to employee. Once again thi year, the Human Reource and Remuneration Committee looked at the remuneration of the Chairman and Chief Executive Officer in light of the Company performance over time. It independent, well-documented analyi and it propoal gave rie to deciion by the Board, which are the ubject of precie, comprehenive communication for the attention of the hareholder. Within thi framework, a reolution i put to the hareholder at the Annual General Meeting for an adviory vote. 52 REGISTRATION DOCUMENT / L ORÉAL 2013

CORPORATE GOVERNANCE THE BOARD S COMPOSITION AND THE WAY IN WHICH THE BOARD S WORK IS PREPARED AND ORGANISED Attendance fee In light of the change in the remit and work of the committee, the Committee aked the Board to approve the rule for the allocation of attendance fee, which remain unchanged for 2013, then propoed the amount allocated in repect of the financial year in light of the actual preence of Director at Board meeting and on a prorated bai according to their memberhip of one or more committee. For the 2014 financial year, on the propoal of the Committee, the Board decided that the attendance fee would conit of a predominantly variable portion, in accordance with the recommendation of the AFEP-MEDEF Code. A for Board meeting, the preence at Committee meeting will be taken into account in the allocation of the variable portion. Conditional grant of hare The Committee made propoal to the Board for change in the long-term incentive offered to employee. It want to make conditional grant of hare the only intrument in it incentive policy, for all beneficiarie including the Chairman and Chief Executive Officer, conequently without any tock option alo being granted. The grant are made after the cloing of the annual financial tatement. They aociate thoe who have made big contribution with the future evolution of the Group reult and help to intil a Group pirit by fotering the loyalty of employee. Veting of the free hare depend on the fulfilment of performance condition. They align the interet of beneficiarie with thoe of the hareholder, ecure employee loyalty and are a medium- to long-term ource of motivation thank to long veting period and trict performance condition in line with the Group economic objective, calculated over everal year. The veting period i 4 year for all the beneficiarie plu an additional 2-year holding period for French tax reident and/ or French ocial ecurity reident. The free hare grant are ubject to performance obligation that the Board record at the end of the veting period. At the time of cloing of the annual financial tatement, the Board of Director record the performance achieved over a period of three full financial year, i.e. over a long period. Recogniing thi performance make it poible to et the exact number of hare which will become the property of each of the beneficiarie of the conditional grant of hare at the date on which the four-year veting period come to an end. In February 2014, the Board reviewed the performance for financial year 2013, 2012 and 2011 and recorded that the performance under the plan for the free grant of hare made in 2010 had been achieved. Human Reource The Committee noted with atifaction that the Group ha high potential talent, with an increae in the number of women and international employee, and with new area of experience. Ethic The Committee noted that the Group employee are kept permanently informed of Ethic and the rule that apply in thi repect. Meaure are taken when the rule are not complied with. 2.2.2.2 SELF-EVALUATION BY THE BOARD OF DIRECTORS Every year, the Board review it compoition, it organiation and it modu operandi, in particular in order to verify that, under thee condition, the agenda for it work duly cover the cope of it aignment, that important quetion have been appropriately prepared for and dicued and to ae the contribution made by each member to the Board work. Thi evaluation i carried out within the framework of the AFEP-MEDEF Code, to which the Board refer and market recommendation like thoe of the AMF. On the bai of the ummary of prior individual interview between the Director and the Secretary of the Board of Director, uch interview being conducted on the bai of a guide which et out the principle provided for in the Code and the recommendation, the Board conider the avenue of progre that till remain open and, at the end of the dicuion that take place, adopt the improvement meaure that it conider appropriate. The Director again exercied their complete freedom of judgement in 2013. Thi freedom of judgement allowed them to participate, in total independence, in the work and collective deciion of the Board, and, where applicable, in conducting preparatory work and making propoal through the Board committee. The Board conidered that the quality of it meeting ha continued to improve, in light of what were conidered a avenue of progre following the elf-evaluation carried out at the end of 2012, particularly with regard to the trategic challenge faced by the Group which are regularly debated and dicued, in the preence of the enior manager who are member of the Executive Committee. Once again thi year, the approach to trategy wa examined in detail in the coure of the Board work in light of the development of the brand, the countrie and the market on which the Group operate. In thi repect, the day devoted to trategy at L Oréal Profeional Product and that on Reearch & Innovation at one of it laboratorie, in the preence of a large number of enior manager, were particularly appreciated. Furthermore, the Board continued with it in-depth analyi of performance, in light in particular of competitor, once again within the cope of the trategic orientation validated by the Board. In 2013, the Board once again appreciated the pace, frequency and format of the information provided to it in connection with buine activitie in general and the main event in the life of the Group. Making documentation available prior to Board or Committee meeting, in compliance with the requirement of confidentiality and the time contraint with which the Company i faced, favour the quality of the debate. The Director made new propoal of topic to be included on the agenda for meeting in 2014, principally in relation with univeraliation trategy, the geographic deployment of the buine activitie of the Diviion and the organiation of the region in light of local pecificitie. 2 REGISTRATION DOCUMENT / L ORÉAL 2013 53

2 THE CORPORATE GOVERNANCE BOARD S COMPOSITION AND THE WAY IN WHICH THE BOARD S WORK IS PREPARED AND ORGANISED 2.2.2.3 APPENDIX: COMPLETE TEXT OF THE INTERNAL RULES OF THE BOARD OF DIRECTORS In February 2014, the Board decided to update it Internal Rule in order to add to the remit of two of it C ommittee in particular, to give a reminder of the need to trictly repect the confidentiality of the information that it i called on to handle and pecify that Board member are prohibited from trading in the Company hare during certain pecific period. Thee Rule are applicable to all preent and future Director, whether they are appointed by the General Meeting or by the employee, and are intended to complement the legal, regulatory and tatutory rule and thoe under the Article of Aociation in order to tate accurately the modu operandi of the Board of Director and it committee, in the bet interet of the Company and of it hareholder. L Oréal Board of Director refer to the principle of corporate governance a preented by the AFEP-MEDEF Code. Preamble The Board of Director of L Oréal ( the Company ) i a collegial body which i mandated by all the hareholder. It ha the authority given to it by Law to act in all circumtance in the bet interet of the Company. In exerciing it legal prerogative, the Board of Director ( the Board ) ha the following main dutie: it validate the Company trategic orientation, appoint the executive officer given reponibility for managing the Company within the cope of thi trategy, chooe the method of organiation of the General Management (combination or eparation of the role of Chairman and Chief Executive Officer), overee the management and enure the quality of the financial and extra-financial information provided to the hareholder and to the market. The organiation of the Board work and it compoition i adapted to the pecificitie of L Oréal and i in line with an approach of contant progre. The Board main reponibility i to adopt the method of organiation and the modu operandi which enable it to perform it dutie to the bet of it ability. It organiation and it modu operandi are decribed in thee Internal Rule which it draw up, and which are publihed in full on L Oréal webite and in the Regitration Document. The Board action are carried out within the framework of the AFEP-MEDEF Code. The report of the Chairman on the Board compoition and on the way in which the Board work i prepared and organied explain, where applicable, the recommendation that have not been adopted in light of the Company pecificitie. Thee Rule apply to all the Director, both current and future, whether they are appointed by the Annual General Meeting or the employee, and are intended to complement the legal, regulatory and tatutory rule and thoe under the Article of Aociation in order to tate accurately the modu operandi of the Board of Director and it committee. 1. Dutie and authority of the Board of Director 1.1. THE GENERAL POWERS OF THE BOARD The Board of Director determine the Company buine trategy and overee the implementation thereof. Subject to the power exprely conferred to General Shareholder Meeting and within the limit of the Company purpoe, the Board deal with all matter regarding the mooth running of the Company and ettle iue concerning the Company by virtue of it deciion. At any time in the year, the Board carrie out the control and verification it deem appropriate. The Board prepare for and convene General Shareholder Meeting and et the agenda. It put the parent company and conolidated financial tatement to the vote and preent to the meeting it Management Report to which i attached the report of the Chairman approved by the Board. The Board et the remuneration of the Director and executive officer. It report on it policy and it deciion in it Management Report and in the report of it Chairman. The General Shareholder Meeting i conulted every year on the component of remuneration due or allocated to each executive officer for the pat financial year. The Board i a collegial body which i legally unable to delegate it authority, except to the General Management in thoe cae exprely provided for by Law. Within the cope of it work, it may decide to et up committee which do not have deciion-making power but have the tak of providing all ueful information for the dicuion and deciion which it i called upon to make. The Board decide on the compoition of the committee and the rule with regard to their modu operandi. The Board may ak one or more of it member or third partie to carry out pecial aignment or project aimed in particular at tudying one of more pecific topic. 1.2. RELATIONS BETWEEN THE GENERAL MANAGEMENT AND THE BOARD 1.2.1. Form of General Management General Management of the Company i carried out, under hi reponibility, by either the Chairman of the Board of Director (the Chairman and Chief Executive Officer) or by another individual with the poition of Chief Executive Officer. Leaving the poibility to chooe between the eparation or combination of role, the Law doe not give preference to any form and give the Board authority to chooe between the two method of organiation of the General Management in light of the pecificitie of the Company. Whether the General Management i carried out by a Chairman and Chief Executive Officer or a Chief Executive Officer, the Board ha the ame prerogative. It may in particular take all pecific meaure aimed at enuring the continued balance of power. 1.2.2. Power of General Management The General Management, which may be carried out by the Chairman of the Board of Director or by a Chief Executive Officer, i veted with the broadet power to act in all circumtance in the name of the Company. It mut exercie thee power within the limit of the Company purpoe ubject to the power exprely granted by French law to General Shareholder Meeting and the Board of Director. The Board ha the poibility to provide for limitation on the power of the General Management. Thu, tranaction which may materially impact the cope of conolidation of the 54 REGISTRATION DOCUMENT / L ORÉAL 2013

CORPORATE GOVERNANCE THE BOARD S COMPOSITION AND THE WAY IN WHICH THE BOARD S WORK IS PREPARED AND ORGANISED Company, in particular, tranaction involving an amount in exce of 150,000,000, and all new tranaction which are outide the normal coure of buine, mut be ubmitted to the Board. In any event, the Board of Director mut be informed of the concluion and implementation of all tranaction. The General Management repreent the Company in it dealing with third partie. Upon a propoal by the Chief Executive Officer, the Board may appoint one or more individual reponible for aiting the Chief Executive Officer, who will hold the corporate office of Deputy Chief Executive Officer(). 1.2.3. The dutie of the General Management Whatever the form of organiation choen (Chairman and Chief Executive Officer or Chief Executive Officer), the General Management i required to provide each Director with all the document and information required to carry out their dutie. More pecifically, the General Management provide the Board member with ueful information in connection with the preparation of meeting, or at any time during the life of the Company if the importance or urgency of the information o require. Thi ongoing information proviion alo include any relevant information concerning the Company, and in particular pre article and financial analyi report. The General Management give the Board and it committee the poibility to meet with the enior manager of L Oréal within the trict framework of their remit and dutie. In conultation with the General Management, the Board and the committee may ue external conultant if they conider it neceary. The Board i informed, at the time of cloing of the annual financial tatement and the review of the interim financial tatement or at any other time if neceary, of the Company financial ituation and cah poition. 2. Compoition of the Board 2.1. THE DIRECTORS The Director of the Company: provide their expertie and profeional experience; are required to act with due care and attention and participate actively in the work and dicuion of the Board; have complete freedom of judgement. Thi freedom of judgement enable them in particular to participate, in total independence, in the deciion and work of the Board, and, where appropriate, of it committee. 2.1.1. Independence The Board review the independence of each of it member every year, after obtaining the opinion of the Appointment and Governance Committee, in particular in light of the independence criteria in the AFEP-MEDEF Code and taking account of the pecificitie of L Oréal. The finding of thi evaluation are reported to the hareholder and made available to the general public. 2.1.2. Diverity The Board conider the iue of the deirable balance of it compoition and that of it committee, notably in the repreentation of men and women, nationalitie and diverity of kill. The objective, term and condition and reult of it policy in thi area are made public in the report of the Chairman approved by the Board and included in the Regitration Document. 2.1.3. Renewal of tenure The length of the term of office of Director i 4 year. However, the taggering of the term of office i organied in order to avoid renewal of too many Director all at once and favour the harmoniou renewal of the Director. In principle, it i agreed by the Board member that all Director will tender their reignation to the Board prior to the General Shareholder Meeting following their 73 rd birthday and that they will no longer apply for renewal of their tenure if thi rule doe not enable them to perform their office for at leat two year. In any event, in accordance with French law and the Article of Aociation, the total number of Director who are over 70 year of age may not exceed one third of the Director in office. 2.2. THE CHAIRMAN OF THE BOARD The Board of Director mut elect a Chairman from among it member. The Chairman of the Board organie and overee the Board work and report thereon to the General Shareholder Meeting. He et the date and the agenda for Board meeting and lead the dicuion. The Chairman i actively involved in defining the Company growth trategy and encourage and trengthen, inter alia, link between the Company and the main market player. The Chairman overee the work of the Company bodie reponible for corporate governance and enure, in particular, that the Director are able to perform their dutie. He may ak for any document or information that i likely to ait the Board of Director in preparing for it meeting. The Chairman of the Board mut ue hi bet effort to promote the value and image of the Company at all time. The Chairman expree hi view in that capacity. He i provided with the material reource required to perform hi dutie. The Chairman of the Board take care, particularly in the event of eparation of role, to develop and maintain a trutful and regular relationhip between the Board and the General Management, in order to guarantee continuou, ongoing implementation by the General Management of the orientation defined by the Board. 3. Right and obligation of Director 3.1. AWARENESS OF AND COMPLIANCE WITH REGULATORY TEXTS, RECOMMENDATIONS AND OBLIGATIONS Each of the member of the Board declare that he/he i aware of: the Company Article of Aociation; the legal and regulatory text that govern French Société Anonyme within the framework of the functioning of a Board of Director and in particular the rule relating to: 2 REGISTRATION DOCUMENT / L ORÉAL 2013 55

2 THE CORPORATE GOVERNANCE BOARD S COMPOSITION AND THE WAY IN WHICH THE BOARD S WORK IS PREPARED AND ORGANISED the number of office that may be held imultaneouly, the agreement and tranaction concluded between the Director and the Company, the definition of the power of the Board of Director, the rule relating to the holding and ue of privileged information, which are et out hereafter in point 3.6; recommendation defined by the AFEP-MEDEF Code; L Oréal Code of Buine Ethic; L Oréal Stock Market Code of Ethic; and the proviion of thee Rule. 3.2. RESPECT FOR THE INTERESTS OF THE COMPANY The Director are required to act in all circumtance in the interet of the Company and all it hareholder. The Director are under the obligation of notifying the Board of all ituation contituting a conflict of interet, even if uch conflict i only potential, and mut refrain from participating in the correponding deliberation. The Director inform the Board every year of the office and poition they hold in other companie and of any conflict of interet, even if they are only potential, that they have identified (ee Annual Report on independence under Article 4.4). The Board furthermore dicue every year the aement of whether or not the buine relationhip maintained between the companie in which the Director hold their office and the Company are ignificant. It report on it evaluation in the Regitration Document. 3.3. OBLIGATION OF DILIGENCE AND PROVISION OF INFORMATION The Director mut devote the neceary time and attention to hi dutie. He mut limit the number of office held o a to enure hi availability. A Director mut not hold more than four other term of office in lited companie outide the Group, including foreign companie. The Director concerned i given enough time to bring hi/her ituation into compliance with thi rule, where required. The Director mut keep the Board informed of the term of office held in other countrie, including hi/her participation on the Board committee of uch French or foreign companie. An executive officer mut not hold more than two tenure a Director in lited companie outide the Group, including foreign companie. The Director mut ak for the Board opinion before accepting a new corporate office in a lited company. Each Board member undertake to be diligent: by attending all Board meeting, where neceary by mean of videoconference or telecommunication facilitie, except in the cae of a major impediment; by attending, wherever poible, all the General Shareholder Meeting; by attending the meeting of the Board committee of which he/he i a member. In connection with deciion to be made, the Director mut enure that he/he ha all the information he/he conider a eential for the mooth conduct of the work of the Board or the committee. If thi information i not made available to him/her, or he/he conider that i ha not been made available, he/he mut requet uch information from the Chairman of the Board who i required to enure that the Director are in a poition to perform their dutie. 3.4. TRAINING OF DIRECTORS All the Director, and in particular thoe repreenting the employee, may benefit, on their appointment or throughout their directorhip, from the appropriate training programme for the performance of the office. Thee training programme are organied and propoed by the Company and are provided at it expene. 3.5. OBLIGATION OF RESERVE AND CONFIDENTIALITY The Director undertake not to expre themelve individually other than in the internal deliberation of the Board on quetion raied at Board meeting. Outide the Company, only collegial expreion i poible, particularly in the form of releae intended to provide the market with information. With regard to information not in the public domain to which the Director ha acce a a reult of hi dutie, the Director mut conider him/herelf to be bound by trict profeional confidentiality, which i more demanding than the mere legal obligation of dicretion. Thi obligation applie to all peron called on to attend Board meeting, and cover all information of a confidential nature and all information preented a confidential by the Chairman of the Board. Beyond thi legal obligation and to enure the quality of the dicuion of the Board of Director, the Board ha et a rule that all the information given to Board member and the opinion they expre have to be kept trictly confidential. Thi obligation applie to any peron invited to attend a Board meeting. 3.6. RULES GOVERNING INSIDER TRADING 3.6.1. Principle The Company ha put in place a Stock Market Code of Ethic that i regularly updated, in particular to take into account change in the regulation in force. The Board complie with the Principle of Stock Market Ethic relating to the ue and communication of privileged information provided for by uch Code. Privileged information mut only be ued by the Director in the exercie of hi office. Such information mut in no cae be communicated to a third party other than in the exercie of the Director dutie, and for any other purpoe or any other activity than thoe for which it i held. It i the duty of all Director to refrain from trading in, having other trade in, and enabling other to trade in the ecuritie of the Company on the bai of thi information until uch time a the information ha been made public. 56 REGISTRATION DOCUMENT / L ORÉAL 2013

CORPORATE GOVERNANCE THE BOARD S COMPOSITION AND THE WAY IN WHICH THE BOARD S WORK IS PREPARED AND ORGANISED It i the peronal reponibility of each Director to determine whether the information he/he hold i privileged or not, and accordingly whether he/he may or may not ue or tranmit any of the information, and whether he/he may or may not trade or enable other to trade in the Company ecuritie. 3.6.2. Period of abtention During the period preceding the publication of any privileged information to which Director have acce, in their capacity of inider, Director mut by law refrain from all trading in L Oréal ecuritie. Furthermore, it i prohibited for them, in accordance with the recommendation of the French financial market uperviory authority (AMF), to trade in the Company hare over the following period: a minimum of 30 calendar day before the date of publication of the pre releae on the annual and half-year reult; a minimum of 15 calendar day before the date of publication of the pre releae on quarterly financial information. 3.6.3. Inider trading The Director ha been informed of the proviion in force relating to the holding of privileged information and inider trading: Article L. 465-1 of the French Monetary and Financial Code and Article 621-1 et eq. of the General Regulation of the French financial market uperviory authority (AMF). 3.6.4. Obligation of reporting trading in the ecuritie of the Company In accordance with the applicable regulation, the Director and individual cloely related to them, a defined by decree, mut inform the AMF of all acquiition, ale, ubcription or exchange involving the Company hare and of tranaction involving related intrument where the cumulative amount of uch tranaction i higher than 5,000 for the calendar year in progre. The Director and individual cloely related to them mut ubmit their report to the AMF by e-mail (1) within five trading day following completion of the tranaction. Thee individual mut imultaneouly provide a copy of thi notice to the Secretary of the Company Board of Director. The declaration are then poted on the AMF webite and are mentioned in an annual ummary et out in the Company Management Report. 3.7. HOLDING OF A MINIMUM NUMBER OF SHARES In accordance with the AFEP-MEDEF Code and independently of any obligation to hold hare under the Article of Aociation, the Director mut peronally be hareholder of the Company and hold a ignificant number of hare. Each Director own at leat 1,000 hare in the Company. The deciion a to whether or not all or ome of the hare held by the Director hould be regitered i the reponibility of the Director. Thi tock ownerhip obligation i not applicable to the Director repreenting the employee. 4. Modu operandi of the Board of Director 4.1. CONVENING THE BOARD The Board i convened by any appropriate mean. Notice convening a meeting may be tranmitted by the Board Secretary. They are ent in writing at leat eight day prior to each meeting, except in particular circumtance. The notice pecify the venue of the meeting, which may be the regitered head office or any other venue. All the document that are neceary to inform the Director about the agenda and about any quetion ubmitted to the Board for review are encloed with the notice convening the meeting or are ent or provided to them within a reaonable period of time, prior to the meeting. Thee document may be provided to them on a ecure digital platform, within a reaonable period of time prior to the meeting. They may in exceptional cae be provided at the meeting. 4.2. BOARD MEETINGS AND METHOD OF PARTICIPATION The Board meet a often a required in the bet interet of the Company, and at leat 5 time per year. The date of the Board meeting for the following year are et no later than the beginning of the ummer, except in the cae of Extraordinary Meeting. The frequency and length of Board meeting mut be uch that they allow for an in-depth review and dicuion of the matter that fall within the cope of the remit of the committee. In accordance with the legal and regulatory proviion and with Article 9 paragraph 2 of the Article of Aociation, Director who take part in Board meeting by mean of videoconference or telecommunication facilitie are deemed to be preent for the purpoe of calculating the quorum and the majority. Thee mean mut guarantee imultaneou, continuou retranmiion of the debate. However, thee mean of participation are excluded when the Board o decide and in any event when it decide with regard to cloing of the Company parent company and conolidated financial tatement and on the preparation of the Management Report. A Director who participate by mean of videoconference or teletranmiion mut enure that the confidentiality of the debate i preerved. The attendance regiter mention the Board member who attend Board meeting by mean of videoconference or telecommunication facilitie, with the Secretary of the meeting having the tak of initialling the regiter for them. 4.3. MINUTES OF THE BOARD Minute are prepared of the deliberation of each Board meeting. The minute of the meeting mention the ue of videoconference or telecommunication facilitie and the name of each peron who participated in the Board by uch mean. The minute alo indicate whether any technical incident occurred during a meeting held by mean of videoconference or telecommunication facilitie, if uch incident dirupted the coure of the meeting. 2 (1) On the AMF ecure webite called ONDE after requeting identifier by email ent to the following addre (ONDE_Adminitrateur_Depoant@amf-france.org). REGISTRATION DOCUMENT / L ORÉAL 2013 57

2 THE CORPORATE GOVERNANCE BOARD S COMPOSITION AND THE WAY IN WHICH THE BOARD S WORK IS PREPARED AND ORGANISED The minute of the deliberation include a ummary of the debate and pecifie the deciion that were made. It mention the quetion raied or the reervation expreed by participant. The draft minute of the lat Board meeting are ent or given to all the Director at the latet on the date when the next meeting i convened. The Secretary of the Board i empowered to iue and certify copie or extract of the minute of Board meeting. 4.4. THE SECRETARY OF THE BOARD The Secretary i appointed by the Board. He/he ait the Chairman in organiing the Board work and in particular with regard to the definition of the annual work programme and the date of Board meeting. With the upport of the General Management, he/he enure the quality and production, ufficiently in advance, of the document and draft put to the vote of the Board at it meeting. He/he prepare the draft minute of Board meeting, which are ubmitted for the Board approval. He/he i reponible for the ecure IT platform made available to the Director. He/he monitor on an ongoing bai change in the regulation and reflection in the marketplace with regard to the corporate governance of lited companie. The Secretary organie, together with the Chairman, the annual evaluation of the Board work and receive the Annual Report on independence by each Director (ee Article 3.2). Every Director may conult the Board Secretary at any time with regard to the cope of the right and obligation linked to hi/ her office. 4.5. ANNUAL EVALUATION OF THE FUNCTIONING OF THE BOARD Every year, the Board carrie out an evaluation of it ability to repond to the expectation of the hareholder by reviewing it compoition, it organiation and it modu operandi. At it lat meeting for the year and on the bai of a ummary of the interview that are previouly organied and conducted with each Director, on the bai of a guide which include the recommendation adopted by the AFEP-MEDEF Code, the Board dicue point of view and opinion expreed. It draw the concluion from thi with the aim of improving the condition for the preparation and organiation of it work and that of it committee. The reult of the evaluation, with the avenue of progre that remain open, are paed on to the hareholder in the Annual Report and at the time of the General Shareholder Meeting. 5. Board committee If the Board et up any committee, it will appoint the member of thee committee and determine their dutie and reponibilitie. The committee act within the remit granted to them by the Board and therefore have no deciion-making power. The committee may not at any time take over the power of the General Management a et out in chapter 1.2.2. of thee Rule. The Committee member are Director. They are appointed by the Board in peron and may not be repreented. All Board member have the neceary qualification due to their profeional experience. They actively take part in Committee meeting with complete freedom of judgement and in the interet of the Company. The tak of ecretary of each Committee i carried out by a peron appointed in agreement with the Chairman of the Committee. It may alo be performed by the Secretary of the Board. Each Committee define the frequency of it meeting. Thee meeting are held at the Company regitered head office or at any other place decided by the Chairman of the Committee. The Chairman of each Committee prepare the agenda for each meeting. The committee may make contact, in the performance of their dutie, with the Company main enior manager, in agreement with the Chairman of the Board and after informing the General Management and will report on uch contact to the Board. The Board may entrut a Committee Chairman, or one or more of it member with a pecial aignment or project to carry out pecific reearch or tudy future poibilitie. The deignated individual will report on thi work to the Committee concerned uch that the Committee may deliberate on thi work and in turn report thereon to the Board. For each Committee meeting, it member may decide to invite bai any other peron of their choice to attend a need be and on an adviory, when they conider it appropriate. In it field of competence, each Committee make propoal and recommendation and expree opinion a the cae may be. For thi purpoe, it may carry out or have carried out any tudie that may ait in the deliberation by the Board. When they ue the ervice of external conultant, the committee mut enure that their ervice i objective. 5.1. STRATEGY AND SUSTAINABLE DEVELOPMENT COMMITTEE 5.1.1. Remit The remit of the Strategy and Sutainable Development Committee i to throw light, through it analye and debate, on the Group trategic orientation a ubmitted to the Board of Director and to monitor the implementation and advancement of ignificant operation in progre. The Committee examine: the main trategic line of development, option and project preented by the General Management, and their economic, financial, ocietal and environmental conequence; opportunitie for acquiition or invetment which involve ignificant amount or which repreent a departure from the Group uual buine operation, and the condition relating to their implementation; financial tranaction liable to ignificantly change the balance heet tructure; the Company commitment with regard to Sutainable Development, in light of the iue pecific to the Group buine activitie and it objective, and the mean and reource put in place; 58 REGISTRATION DOCUMENT / L ORÉAL 2013

CORPORATE GOVERNANCE THE BOARD S COMPOSITION AND THE WAY IN WHICH THE BOARD S WORK IS PREPARED AND ORGANISED the propoed trategic orientation to be defined by the Board with a view to conultation of the Central Work Council. the tatutory audit of the annual and, where applicable, the conolidated account by the Statutory Auditor. More generally, the Committee debate all quetion conidered eential for the future trategy of the Group and for preerving it main financial balance. 5.1.2. Work organiation It meet when convened by the Chairman of the committee whenever he or the Board conider thi appropriate. The agenda of the meeting i et by the Chairman of the Committee, in conjunction with the Board of Director if the Board initiate the meeting. The Strategy and Sutainable Development Committee report on it work to the Board whenever neceary, and at leat once a year. It review the audit plan and the programme for work by the Statutory Auditor, the reult of their audit, their recommendation and the follow-up action taken further to uch recommendation. It review the breakdown of the fee billed by the Statutory Auditor between audit ervice a uch, audit-related work and any other ervice they provide; the Statutory Auditor independence. It make a recommendation with regard to the Statutory Auditor propoed to the Annual General Meeting for appointment. 2 5.2. AUDIT COMMITTEE 5.2.1. Remit The Audit Committee, acting under the reponibility of the member of the Board, i reponible for monitoring iue relating to the preparation and control of accounting and financial information. The Audit Committee mut make ure that the General Management ha at it dipoal the mean to enable it to identify and manage the economic, financial and legal rik facing the Group inide and outide France in carrying out it normal and exceptional operation. Without prejudice to the area of authority of the Board of Director, thi Committee i reponible in particular for monitoring: the proce for preparation of financial information: the Committee i informed of the accounting rule applicable within the Group. Any iue that may be encountered in the due and proper application of uch rule are referred to it. It examine any propoal for a change in accounting tandard or in accounting method and keep itelf informed in particular with regard to accounting tandard at national and international level. the review of the account by the Audit Committee i accompanied by a preentation by the Vice-Preident, Finance decribing the Company ignificant off-balance heet commitment; the efficiency of the Internal Control and rik management ytem in order to obtain reaonable aurance with regard to their effectivene and their coherent application. It i alo reponible for monitoring the Group main rik expoure and enitivitie. The Committee review, in particular, the programme and objective of the Internal Audit Department and review the main topic that it identifie a well a the Internal Control ytem method and procedure ued. It review every year the ection of the Management Report relating to rik factor and the report of the Chairman of the Board of Director relating to Internal Control and rik management procedure. The Audit Committee review of the financial tatement i accompanied by a preentation by the Vice-Preident, Finance decribing the Company expoure to ignificant rik; Thi monitoring enable the committee to iue recommendation, if neceary, concerning the improvement of exiting procedure and the poible etting up of new procedure. The Audit Committee can be conulted for all quetion relating to procedure for controlling rik of an unuual nature, particularly when the Board or the General Management conider it appropriate to ubmit uch quetion to it. 5.2.2. Compoition All the Director who are member of thi Committee have the neceary qualification due to their profeional experience and their good knowledge of the Group accounting and financial procedure. A oon a they are appointed, the member of the Audit Committee mut receive pecific information on the Company accounting, financial or operational particularitie. The appointment or renewal of the Chairman of the Audit Committee, propoed by the Appointment and Governance Committee, mut be the ubject of a pecific review by the Board. The Chairman and Chief Executive Officer or the Chief Executive Officer i not a member of the Audit Committee. 5.2.3. Work organiation The Chairman of the Audit Committee iue guideline for the Committee work each year, baed on hi judgement concerning the importance of the pecific type of rik faced, in agreement with the General Management and the Board. The Committee meet when convened by it Chairman, whenever the Chairman or Board conider thi appropriate. The agenda of the meeting i et by the Chairman of the Committee, in relation with the Board if the latter initiated the convening of the meeting. The agenda i ent to the Committee member before the meeting, together with the information which i ueful for their debate. To carry out it miion, the Audit Committee may alo, in agreement with the General Management, obtain information from people who are able to ait it in the performance of it miion, and in particular enior manager in charge of economic and financial iue and thoe in charge of information proceing. REGISTRATION DOCUMENT / L ORÉAL 2013 59

2 THE CORPORATE GOVERNANCE BOARD S COMPOSITION AND THE WAY IN WHICH THE BOARD S WORK IS PREPARED AND ORGANISED 5.2.3.1. Relation with the Statutory Auditor The committee regularly interview the Statutory Auditor, including outide the preence of management. The Statutory Auditor inform the Audit Committee of: 1) their general work programme implemented a well a the variou ampling tet they have carried out; 2) the change which they conider hould be made to the financial tatement to be cloed off or other accounting document, making any appropriate obervation on the valuation method ued to prepare them; 3) the irregularitie and inaccuracie they may have dicovered; provide the Board with clarification on the condition of performance of General Management and the tatu of the executive officer; iue an opinion on propoal made by the Chairman of the Board for appointment of the Chief Executive Officer; enure the implementation of a procedure for preparation of ucceion plan for the executive officer in the event of an unforeeen vacancy; enure the application of the AFEP-MEDEF Code to which the Company refer; dicu governance iue related to the functioning and organiation of the Board; 4) the concluion reulting from the above obervation and rectification with regard to the reult for the period compared to thoe for the previou period. The Statutory Auditor alo ae, with the Audit Committee, the rik with regard to their independence and the protective meaure taken to mitigate thee rik. For thi purpoe, the Committee obtain a tatement of independence from the Statutory Auditor. They inform the Committee of ignificant Internal Control weaknee, with regard to the procedure for preparation and proceing of accounting and financial information, and provide it with the document required by law every year. 5.2.3.2. Activity Report The Audit Committee regularly report to the Board on the performance of it miion and take note of the Board obervation. The Committee inform the Board without delay of any difficulty encountered. In it report, the Audit Committee make the recommendation it conider appropriate with regard to: the uitability of the variou procedure and of the ytem a a whole in term of achieving the objective of managing information and rik; the effective application of the procedure in place, and where appropriate the mean implemented to achieve thi aim. It alo formulate in it report all recommendation and propoal aimed at improving the effectivene of the variou procedure or at adapting them to a new ituation. If during it work the Committee detect a ubtantial rik which in it view i not adequately taken into account, it warn the Chairman of the Board accordingly. 5.3. APPOINTMENTS AND GOVERNANCE COMMITTEE 5.3.1. Remit The main miion of the Appointment and Governance Committee, within the context of the work of the Board, are to: decide on the condition in which the regular evaluation of the Board i carried out; dicu the claification of Director a independent which i reviewed by the Board every year prior to publication of the Annual Report; conduct the reflection proce with regard to the committee that are in charge of preparing the Board work; prepare for the deciion by the Board with regard to updating it Internal Rule. 5.3.2. Work organiation The Committee meet after being convened by it Chairman whenever the Chairman or the Board conider it ueful. The agenda of the meeting i et by the Chairman of the Committee, in relation with the Board if the latter initiated the convening of the meeting. The Committee may meet at any time it conider to be appropriate, for example to ae the performance of the Company enior manager. The Chairman of the Board i aociated with it work, except with regard to all the topic concerning him peronally. The Committee mut regularly report on it work to the Board and make propoal to the Board. 5.4. THE HUMAN RESOURCES AND REMUNERATION COMMITTEE 5.4.1. Miion The Board freely determine the remuneration of the Chairman, the Chief Executive Officer and the Deputy Chief Executive Officer. Within thi framework, the main miion of the Human Reource and Remuneration Committee, within the context of the work of the Board of Director, are to make propoal with regard to the following in particular: the fixed and variable remuneration of the Chairman of the Board and any other benefit he receive; review and propoe to the Board candidate for appointment a new Director; the fixed and variable remuneration of the Chief Executive Officer and any other benefit he receive (penion, termination indemnitie, etc.); the total amount of attendance fee to be ubmitted to the General Shareholder Meeting and the method of ditribution of uch fee; 60 REGISTRATION DOCUMENT / L ORÉAL 2013

CORPORATE GOVERNANCE THE BOARD S COMPOSITION AND THE WAY IN WHICH THE BOARD S WORK IS PREPARED AND ORGANISED the implementation of long-term incentive plan, uch a for example, thoe that could provide for the ditribution of tock option or for free grant of hare. The Committee look at the quetion relating to the remuneration of the executive officer outide their preence. The Committee alo examine: all the other component of the Human Reource policy uch a, for example, labour relation, recruitment, diverity, talent management and fotering employee loyalty. Within thi framework, the Committee i informed in particular of the remuneration policy for the main enior manager who are not executive officer; the rule of ethical conduct, a et out in the Code of Buine Ethic, and the Group trong value, uch a repect and integrity, that mut be widely dieminated, known and put into practice. 5.4.2. Work organiation The Committee meet when convened by it Chairman, whenever the Chairman or Board conider thi appropriate. The agenda of the meeting i et by the Chairman of the Committee, in relation with the Board if the latter initiated the convening of the meeting. The Committee may meet at any time it conider to be appropriate, for example to ae the performance of the Company enior manager. The Chairman of the Board i aociated with it work, except with regard to all the topic concerning him peronally. The Committee i required to report regularly on it work to the Board and make propoal to the Board. 6. Remuneration of the executive officer The Director receive attendance fee in the amount approved by the vote at the Ordinary General Meeting, and which are allocated a decided by the Board. The method of allocation of attendance fee comprie a predominantly variable portion determined on the bai of the regularity of attendance at Board and Committee meeting. The Board of Director may award exceptional remuneration for pecific aignment or project entruted to the Director and ubject to regulated agreement. The Director have the poibility of aking for reimburement of the expene neceary for the performance of their corporate office upon preentation of upporting document. 2.2.3. Specific term and condition of participation by hareholder in the Annual General Meeting It i to be noted, in accordance with Article 12 of the Company Article of Aociation, that the term and condition of participation by the hareholder in Annual General Meeting are thoe provided for by the regulation in force, and that any hareholder may, if the Board of Director o decide when calling the Annual General Meeting, participate in the meeting by videoconference or by any telecommunication or remote tranmiion mean including the Internet, under the condition provided for by the applicable regulation at the time of their ue. Where applicable, thi deciion i communicated in the meeting notice publihed in the Bulletin de Annonce Légale et Obligatoire (BALO), the official French gazette. It i pecified that in 2012, the hareholder updated the Company Article of Aociation in application of the new regulation, aimed at implifying the participation by hareholder in Annual General Meeting. A reference to the irrevocable nature of proxy form wa thu removed and a reference to the ue of communication and electronic ignature wa inerted. 2.2.4. Principle and rule adopted by the Board of Director to determine the remuneration and benefit of all kind granted to the executive officer The Board of Director define the remuneration policy for L Oréal executive officer and the objective purued (competitivene, performance, interet of the hareholder and takeholder expectation). The Board of Director decide on the variou component which make up the remuneration while paying attention to the need to reach a balance between each of them (reponibilitie, experience, kill, Group performance, implementation of trategy, value creation, no benefit in kind). Ancillary component of remuneration, for example termination indemnitie, additional ocial protection, are not linked to performance of the corporate office, but they may be due puruant to the upended employment contract. Detail of all the remuneration component of the executive officer are et out in ection 2.3. below. 2 REGISTRATION DOCUMENT / L ORÉAL 2013 61

2 REMUNERATION CORPORATE GOVERNANCE OF THE DIRECTORS AND THE EXECUTIVE OFFICERS 2.3. REMUNERATION OF THE DIRECTORS AND THE EXECUTIVE OFFICERS 2.3.1. Remuneration of the member of the Board of Director The Director receive attendance fee in the amount approved by the vote at the Ordinary General Meeting, and which are allocated a decided by the Board. RULES FOR ALLOCATION IN RESPECT OF THE 2013 FINANCIAL YEAR The amount of attendance fee i divided between the Director a follow: an equal hare allocated to each Director, compriing a fixed part and a part that varie according to the degree of regularity in attending meeting; an additional hare for Committee member. The Board adopted for a full year: a fixed annual um of 30,000; an amount of 5,000 for each Board meeting which the Director attend; an amount of 15,000 for each Director who i a member of the Strategy and Sutainable Development Committee and an additional amount of 15,000 for the Chairman of thi Committee; an amount of 10,000 for each Director who i a member of the Human Reource and Remuneration Committee and the Appointment and Governance Committee and an additional amount of 10,000 for the Chairman of each of thee committee; an amount of 25,000 for each Director who i a member of the Audit Committee and an additional amount of 25,000 for it Chairman. The Audit Committee remit i indeed particularly exacting and require continued attention and a ignificant commitment. AMOUNTS PAID IN RESPECT OF THE 2013 FINANCIAL YEAR A total amount of 1,093,750, which fall within the total overall amount of 1,300,000 voted by the Annual General Meeting in 2011, wa ditributed to the Director at the beginning of 2014 in repect of the 2013 financial year, for a total of 5 meeting [7 meeting in 2012 including 2 extraordinary meeting for which no fee were paid]. The attendance rate at Board of Director meeting in 2013 i 91.4% on average. AMOUNTS OF ATTENDANCE FEES In euro 2013 (total of 5 meeting and 18 Committee meeting) 2012 (total of 7 meeting and 17 Committee meeting) Mr. Jean-Paul Agon 85,000 85,000 M. Françoie Bettencourt Meyer 70,000 64,000 Mr. Peter Brabeck-Letmathe 85,000 80,000 Mr. Paul Bulcke 60,000 43,000 Mr. Charle-Henri Filippi 96,250 115,000 Mr. Xavier Fontanet 70,000 75,000 Mr. Bernard Kariel 90,000 90,000 M. Chritiane Kuehne 80,000 62,750 Mr. Marc Ladreit de Lacharrière 50,000 50,000 Mr. Jean-Pierre Meyer 115,000 115,000 Mr. Jean-Victor Meyer 55,000 55,000 M. Virginie Morgon* 62,750 - Sir Linday Owen-Jone* 11,000 55,000 M. Annette Roux 50,000 50,000 Mr. Loui Schweitzer 113,750 95,000 TOTAL 1,093,750 1,034,750 * Director whoe term of office began or ended during the 2013 financial year. Mr. Jean-Paul Agon, Chairman and Chief Executive Officer, doe not receive any attendance fee in the L Oréal Group other than thoe referred to above. ALLOCATION RULES IN RESPECT OF THE 2014 FINANCIAL YEAR In repect of the 2014 financial year, and in accordance with the recommendation of the AFEP-MEDEF Code of June 2013, the Board of Director decided that the method of allocation of attendance fee would take into account effective participation by Director at Committee meeting, a i already the cae for Board meeting, and would accordingly conit, in all, of a predominantly variable amount. In 2014, in light of the fact that two Director repreenting the employee will join the Board and due to a proviional chedule of date providing for a greater number of Board meeting, a draft reolution providing for an increae in the maximum amount of attendance fee i being put to the Annual General Meeting on Thurday, April 17 th, 2014. 62 REGISTRATION DOCUMENT / L ORÉAL 2013

CORPORATE GOVERNANCE REMUNERATION OF THE DIRECTORS AND THE EXECUTIVE OFFICERS 2.3.2. Remuneration of the executive officer 2.3.2.1. PRINCIPLES AND RULES ADOPTED BY THE BOARD OF DIRECTORS TO DETERMINE THE REMUNERATION AND BENEFITS OF ALL KINDS GRANTED TO THE EXECUTIVE OFFICERS The Board refer to the recommendation of the June 2013 AFEP- MEDEF Code for the determination of the remuneration and benefit granted to the executive officer. It enure that the deciion made comply with the principle of comprehenivene, balance, conitency, tranparency and proportionality and take into account market practice. It make ure that the remuneration tool choen are perfectly conitent with the objective purued by the defined policy. Finally, it i attentive to enuring that the deciion-making procedure with regard to remuneration guarantee the due and proper application of the rule et. Remuneration policy and objective purued In accordance with the recommendation of the AFEP-MEDEF Code, the Board of Director define the remuneration policy for L Oréal executive officer and the objective purued by uch policy. COMPETITIVE REMUNERATION The remuneration of the executive officer mut be competitive in order to attract, motivate and retain the bet talent in the highet level poition in the Company. The Board of Director ha defined a benchmark market coniting of French and international companie which are world leader in their ector. They operate on imilar market, being direct competitor of L Oréal when they are in the cometic indutrie, or on the wider market of uual conumer good. PERFORMANCE-RELATED REMUNERATION The remuneration of the executive officer mut be cloely linked to performance in order to promote the achievement of hort-and long-term objective. In fact, the Board of Director contantly trive to incite the General Management both to maximie performance for each financial year and to enure the repetition and regularity of performance year after year. The Board of Director conider that the remuneration of the executive officer ha to conit of a ignificant variable part with annual and multi-annual period for performance aement adapted to each of thee objective. Thi aement take account of L Oréal intrinic performance, namely it progre year after year and alo it relative performance a compared to it market and it competitor. The quantitative criteria that are ued to meaure performance mut be ufficiently varied in order to meaure both long-term value creation, development in ale and the Company profitability, the Company cah poition and invetment capacity. They are re-examined periodically and their repective weight i adjuted in order to be intimately linked with the Company trategy. REMUNERATION ALIGNED WITH THE INTERESTS OF SHAREHOLDERS A ignificant portion of the remuneration of the executive officer mut conit of performance hare with the aim of involving them in the long-term value development of the Company and of the tock market price of it hare. The Board of Director alo want to promote peronal invetment in the Company hare by etting tringent rule for retaining performance hare or hare reulting from the exercie of tock option. BALANCED REMUNERATION TAKING ACCOUNT OF STAKEHOLDER EXPECTATIONS. The remuneration mut favour a meaured, utainable method of development, in line with the Group commitment with regard to ethic and repectful of the environment in which L Oréal operate. It mut not lead to taking inappropriate, exceive rik. In thi repect, the annual variable portion of the remuneration remain reaonable in comparion with the fixed portion. A target repreenting a maximum percentage of the fixed remuneration mut be defined. The annual variable portion of the remuneration i linked, a far a poible, to extra-financial criteria, in particular of an environmental and ocietal nature, the development of which will be aeed year after year with a long-term perpective. Remuneration component The Board of Director decide on the variou component which make up the remuneration while paying attention to the need to reach a balance between each of them. Each remuneration component correpond to a clearly defined objective. FIXED REMUNERATION It mut reflect the reponibilitie of the executive officer, hi level of experience and hi kill. It ha been table for everal year. It erve a a bai to determine annual variable remuneration. ANNUAL VARIABLE REMUNERATION It i deigned to align the remuneration allocated to the executive officer with the Group annual performance and to promote the implementation of it trategy year after year. It i expreed a a percentage of fixed remuneration. Thi percentage may vary between 0% and 100% at mot of fixed remuneration. 2 REGISTRATION DOCUMENT / L ORÉAL 2013 63

2 REMUNERATION CORPORATE GOVERNANCE OF THE DIRECTORS AND THE EXECUTIVE OFFICERS It i baed on precie performance evaluation criteria determined at the beginning of the year by the Board of Director, baed both on operational objective and on extra-financial and/or qualitative objective. At it meeting of February 10 th, 2014, on the recommendation of the Human Reource and Remuneration Committee, the Board of Director decided to change it policy. Until now, the performance criteria for the variable remuneration were etablihed, for half, by reference to it qualitative financial objective reflecting the Company performance; and for half, on the bai of an aement of qualitative apect of management. A from 2014, the quantative financial portion i increaed to 60% of the annual variable remuneration. The criteria applied are a follow: growth in comparable ale a compared to the budget; growth in operating profit a compared to the previou year; growth in market hare a compared to the main competitor; growth in net earning per hare a compared to the previou year; growth in cah flow a compared to the previou year. The non -financial portion repreent 40% and the related criteria are revied in order to ue meaurable indicator adapted to the Group Human Reource and CSR trategy. The other criteria ued to evaluate the non -financial performance of the executive officer may be of a qualitative nature uch a, for example, addreing pecific prioritie for the year. The weighting of each of thee criteria and the objective to be met are et a from the beginning of the year concerned and communicated to the executive officer. Thi new balance between financial and extra-financial criteria hould make it poible to meaure, at the end of each financial year, the progre made with regard to the Group trategic objective of global growth and in light of the utainability commitment (Sharing beauty with all programme). AWARD OF PERFORMANCE SHARES The Board of Director ha requeted and obtained the authoriation of the Annual General Meeting to award performance hare to employee of the Group and to it executive officer (authoriation of the Extraordinary General Meeting of April 26 th, 2013 which i valid until June 26 th, 2015). The objective of thee award i to encourage achievement of the Group long-term objective and the reulting valuation creation for the hareholder. In order to do o, the final veting of the hare i ubject to performance condition in accordance with the authoriation voted by the Extraordinary General Meeting of April 26 th, 2013. Performance condition The performance criteria are ufficiently exacting while they continue to be motivating. They concern all the hare awarded. They complement one another, are in line with the Group objective and pecificitie and are of a nature to promote balanced, continuou long-term growth. Thee performance condition take into account, partly growth in comparable cometic ale of L Oréal a compared to a panel of L Oréal bigget direct competitor; and partly, growth in L Oréal conolidated operating profit. In order for all the free hare granted to be finally acquired, in repect of the criterion related to ale, by the beneficiarie at the end of the veting period, L Oréal growth mut be at leat a good a the average growth of the ale of the panel of competitor. Thi panel currently conit of Procter & Gamble, Unilever, Etée Lauder, Shieido, Beierdorf, Johnon & Johnon, Henkel, LVMH, Kao, Revlon and Elizabeth Arden. No hare finally vet, in repect of the criterion related to operating profit, if uch profit doe not increae in abolute term over the period. The hare only finally vet at the end of a period of 4 year, which i a ufficiently long time to be able to ae the performance achieved over 3 full financial year. The figure recorded each year to determine the level of performance achieved are publihed in the Annual Financial Report. Rule governing the grant made to the executive officer The value of thee grant, etimated according to the IFRS applied for the preparation of the conolidated financial tatement, repreent approximately 50% of the executive officer total remuneration and may not exceed 60%. The Board of Director reerve the poibility to decide on an exceptional grant in the event of a particular event that jutifie it. The total number of free hare granted to the executive officer during a financial year may not repreent more than 10% of the total number of free hare granted in repect of that ame financial year. The executive officer i required to retain 50% of the free hare allocated to him at the end of the veting period in regitered form until the termination of hi dutie. No free hare may be granted to an executive officer at the time of termination of hi dutie. ATTENDANCE FEES Thee are paid to the executive officer in hi capacity a a member of the Board of Director in accordance with the ame rule a thoe applicable to the Director. It hould be noted that, for 2014, the Board of Director ha decided to change the allocation of attendance fee by providing for a predominantly variable portion in order to encourage the attendance by Director at Committee meeting. 64 REGISTRATION DOCUMENT / L ORÉAL 2013

CORPORATE GOVERNANCE REMUNERATION OF THE DIRECTORS AND THE EXECUTIVE OFFICERS Thi new rule will apply to the executive officer and to all the other Director, it being pecified that he can be a member of all the committee except the Audit Committee and the Human Reource and Remuneration Committee although he i neverthele able to attend the meeting of that Committee except with regard to any matter on the agenda that concern him directly. BENEFITS IN KIND For the purpoe of tranparency, it i not in principle planned to upplement the executive officer fixed remuneration by granting benefit in kind. The executive officer benefit from the neceary material reource for performance of hi term of office uch a, for example, the proviion of a car with a chauffeur. Thee arrangement, which are trictly limited to profeional ue, to the excluion of all private ue, are not conidered a benefit in kind. THE BALANCE BETWEEN THE VARIOUS COMPONENTS OF TOTAL REMUNERATION (EXCLUDING ATTENDANCE FEES) The variou component of remuneration form a balanced whole with an allocation that i approximately: 50/50 between annual remuneration (annual fixed and variable remuneration) and multi-annual remuneration (performance hare); 50/50 between hare-baed remuneration and cah remuneration; 75/25 between remuneration ubject to performance condition and remuneration not ubject to performance condition. 2 Remuneration ubject to performance condition Remuneration net ubject to performance condition Performance hare 50% Fixed remuneration 25% Annual variable remuneration 25% Cah remuneration: Annual remuneration Share-baed remuneration: Multi-annual performance TERMINATION INDEMNITIES, PENSION SCHEME, ADDITIONAL SOCIAL PROTECTION Thee component of remuneration are not related to performance of the corporate office, but could be due under the upended employment contract. The AFEP-MEDEF code, to which L Oréal refer, recommend that companie hould put an end to the practice of combining an employment contract with a corporate office (point 22) although it doe not impoe thi a a mandatory requirement. L Oréal Board of Director hare the objective of thi recommendation which aim at avoiding the poibility of concurrently obtaining benefit both from the employment contract and the corporate office and at prohibiting any interference with the poibility of removing executive officer ad nutum. The Board of Director ha formally provided for the method of application of the objective of the recommendation, a adapted to the profeional context in the L Oréal Group. The Board intention i to ue the treatment et out below for any future corporate officer appointed who ha over 15 year length of ervice in the Group at the time of appointment. Maintenance of the employment contract and eparation of the benefit attached to the employment contract on the one hand and to the corporate office on the other A L Oréal ongoing policy ha been to appoint employee who have completely ucceeded in the variou tage of their career in the Group a executive officer, the Board doe not want thee executive to be deprived of the benefit to which they would have continued to be entitled had they remained employee, after pending many year at L Oréal. The Board of Director conidered that the objective purued by the AFEP-MEDEF recommendation could be fully achieved by maintaining the upenion of the employment contract and clearly eparating out the benefit related to the employment contract on the one hand from thoe relating to hi corporate office on the other. Remuneration in repect of the corporate office will in no event be taken into conideration for calculation of the indemnitie due puruant to the collective bargaining agreement and the Company-level agreement applicable to all L Oréal enior manager. REGISTRATION DOCUMENT / L ORÉAL 2013 65

2 REMUNERATION CORPORATE GOVERNANCE OF THE DIRECTORS AND THE EXECUTIVE OFFICERS Remuneration under the upended employment contract to be ued to calculate all the right attached thereto and in particular for the calculation of the defined-benefit penion, will be etablihed on the bai of the remuneration at the date of upenion of the contract. Thi remuneration will be revied every year by applying the revaluation coefficient in repect of alarie and penion contribution publihed by the French State penion fund. The length of ervice applied will take into conideration the entire career, including the year pent a an executive officer. Termination indemnitie, retirement indemnitie in the event of voluntary retirement or retirement at the Company requet, financial conideration for the non-competition claue In the event of departure, and depending on the reaon, the executive officer will only be paid the dimial indemnitie, except in the event of gro miconduct or gro negligence, or the retirement indemnitie in the event of voluntary retirement or retirement at the Company requet due puruant to the employment contract that ha been upended to the excluion of any indemnity due in repect of the corporate office. Thee indemnitie, which are attached olely to termination of the employment contract and in trict application of the National Collective Bargaining Agreement for the Chemical Indutrie and the Company-level agreement applicable to all L Oréal executive, are due in any event puruant to the public policy rule of French labour law. They are not ubject to any condition other than thoe provided for by the National Collective Bargaining Agreement for the Chemical Indutrie or the abovementioned company-level agreement. The ame applie to the non-competition claue and the related financial conideration. Defined benefit penion cheme The executive officer, ubject to ending hi career in the Company, will benefit from one of the defined benefit penion cheme currently applicable to the Group enior manager a decribed in detail in chapter 6, in paragraph 6.2.2.1. on page 203. The main feature of thee cheme, which fall under Article L. 137-11 of the French Social Security Code, are a follow: Approximately, 450 enior manager for the penion cheme that opened on January 1 t, 2001 and 120 enior manager for the cheme that cloed on December 31 t, 2000, either active or retired, are concerned; The minimum length of ervice requirement for acce to the cheme i 10 year. The increae in the potential right take place over a long period of time, amounting to 25 year for the cheme which i open and 40 year for the cheme that ha cloed. The reference period taken into account for calculation of the benefit i 3 year. In the light of the legal characteritic of defined benefit penion cheme (the right only accrue if the beneficiary end hi career in the Company and the funding of thi cheme cannot be broken down individually by employee) and alo on account of the characteritic pecific to the L Oréal cheme referred to a differential ince they take into account, in order to complete them, all the other penion uch a thoe reulting, inter alia, from the French baic and upplementary penion cheme, it hould be noted that the penion annuity will in fact only be calculated on the date when the beneficiary applie for all hi penion. An evaluation of the level of the penion annuity that might be paid to the executive officer, in accordance with the recommendation of the AFEP-MEDEF, i made for information purpoe (ection 2.3.2 of thi chapter) with, however, all the neceary reervation due to the characteritic of the cheme decribed above. Additional ocial protection cheme The executive officer will continue to benefit, due to the fact that he i treated in the ame way a a enior manager during the term of hi corporate office, from the additional ocial protection cheme and in particular the employee benefit and healthcare cheme applicable to the Company employee. Thee cheme are decribed in detail in chapter 6, in paragraph 6.2.2.1. on page 205. All thee proviion, which are ubject to the regulated agreement and commitment procedure, are approved by the Annual General Meeting deciding on the bai of the Statutory Auditor Special Report. Procedure for etting the remuneration of the executive officer It i etablihed in uch a way a to guarantee the due and proper application of the policy and rule et by the Board of Director. The Board of Director bae it deciion on the work and recommendation by the Human Reource and Remuneration Committee. The Human Reource and Remuneration Committee ha all the neceary information to prepare it recommendation, and more pecifically to ae the performance of the executive officer in light of the Group hort-and long-term objective. THE HUMAN RESOURCES AND REMUNERATION COMMITTEE HAS COMPARATIVE STUDIES CONDUCTED BY AN INDEPENDENT FIRM Thee tudie enable it to meaure: the competitivene of the executive officer total remuneration in comparion with an international panel of companie that are world leader; the comparative reult of L Oréal and thoe of the ame world leader in light of the criteria adopted by the Group to ae the executive officer performance; the link between the executive officer remuneration and hi performance; the relevance over time of the remuneration tructure and the objective aigned to him. THE HUMAN RESOURCES AND REMUNERATION COMMITTEE HAS ALL USEFUL INTERNAL INFORMATION Thi information enable it to ae the performance of the Company and that of it executive officer both from an economic tandpoint and in extra-financial field. The Group annual economic and financial reult are preented every year completely and exhautively to the Human Reource and Remuneration Committee at it meeting in February, and are ued a a bai for the aement of the financial performance criteria for the executive officer variable remuneration. 66 REGISTRATION DOCUMENT / L ORÉAL 2013

CORPORATE GOVERNANCE REMUNERATION OF THE DIRECTORS AND THE EXECUTIVE OFFICERS The principle of the Human Reource policy conducted are regularly preented to the Committee member by the Executive Vice-Preident in charge of Human Reource. The Senior Vice-Preident, Chief Ethic Officer, alo regularly explain the policy and the action conducted in thi field. Thi information contribute to evaluation of the qualitative portion of the annual variable remuneration. The Committee can alo carry out a more in-depth evaluation of the Company performance by contacting the Company main enior manager, after informing the General Management. THE MEMBERS OF THE HUMAN RESOURCES AND REMUNERATION COMMITTEE MAY ALSO SERVE ON OTHER BOARD COMMITTEES, AND THUS HAVE INFORMATION FROM DIFFERENT SOURCES Thi information enriche their viion of the Company trategy and it performance and thoe of it executive officer. In thi manner, three out of the four member of the Human Reource and Remuneration Committee, including it Chairman, are member of the Strategy and Sutainable Development Committee at which the action with regard to Reearch and Innovation, the programme with regard to the Group ocial and environmental reponibility and it rik prevention policy are dicued. Similarly, three out of the four member of the Human Reource and Remuneration Committee are member of the Audit Committee and participate in the cloing of the financial tatement. All thi information enable the member of the Human Reource and Remuneration Committee to have all the precie information required to make a complete meaurement of the variou performance criteria for the executive officer. The recommendation to the Board of Director are made on thee bae, and the Board then make it deciion collectively concerning the executive officer remuneration. 2 BELOW IS A DIAGRAM SHOWING THE ORGANISATION OF THE WORK OF THE HUMAN RESOURCES AND REMUNERATION COMMITTEE CONCERNING THE REMUNERATION OF THE EXECUTIVE OFFICER February 2013 February 2014 Recommendation made to the Board of Director with regard to: e valuation and etting of the 2012 variable remuneration after a review of the annual reult for 2012 and aement of the qualitative apect of management; etting of the fixed remuneration for 2013; etting of the level of variable remuneration for 2013, the nature and weight of the evaluation criteria for the variable remuneration and the objective to be met. Studie with regard to the 2013 ACA (1) plan for the conditional grant of hare Aement of the performance level achieved for the ACA and SO (2) plan which terminate April 2013 Recommendation for the 2013 ACA plan: p olicy and rule for grant including thoe applicable to the executive officer; lit of beneficiarie including the executive officer; level of grant including thoe to the executive officer. June 2013 Preentation and dicuion on HR policy Preentation and dicuion on Ethic policy November 2013 Preentation of the tudy on the remuneration of the executive officer carried out by an independent firm including: c ompetitivene/ Panel; r eult of the Group/Panel; l ink between performance and remuneration; b alance and tructure of the remuneration. Initial reflection on variable remuneration for 2013 and poible change in total remuneration for 2014 Initial analyi concerning the 2014 ACA Plan b enchmark; e valuation of the policy implemented; p oible change. Recommendation made to the Board of Director with regard to: e valuation and etting of the 2013 variable remuneration after a review of the annual reult for 2013 and aement of the qualitative apect of management; etting of the fixed remuneration for 2014; etting of the level of variable remuneration for 2014, the weight of the financial and extra-financial criteria, the weighting of each of the criteria and the objective to be met for each of them. Studie with regard to the 2014 ACA plan for the conditional grant of hare Aement of the performance level achieved for the ACA and SO plan which terminate (1) ACA = Conditional Grant of Share (performance hare). (2) SO = Stock Option. REGISTRATION DOCUMENT / L ORÉAL 2013 67

2 REMUNERATION CORPORATE GOVERNANCE OF THE DIRECTORS AND THE EXECUTIVE OFFICERS 2.3.2.2. REMUNERATION OF THE CHAIRMAN AND CHIEF EXECUTIVE OFFICER different qualitative criteria conidering that 2013 wa marked by an active policy in the following area in particular: Component of remuneration due or allocated with repect to 2013 FIXED REMUNERATION On the propoal of the Human Reource and Remuneration Committee, the Board of Director et, at it meeting on February 11 th, 2013, the amount of Mr. Jean-Paul Agon fixed remuneration at a gro amount of 2,100,000 on an annual bai. For information purpoe, the amount of the fixed remuneration ha remained unchanged ince 2008. ANNUAL VARIABLE REMUNERATION Concerning Mr. Jean-Paul Agon annual variable remuneration for 2013, It i pecified that the target objective wa 2,100,000, a the Board of Director had et the ame target objective of annual variable remuneration that could repreent a maximum of 100% of the fixed remuneration. It i pecified that the performance aement criteria were et, half by referring to quantative objective relating to the Company performance and half baed on an aement of the qualitative apect of management. At it meeting on February 6 th, 2014, the Human Reource and Remuneration Committee examined the condition of fulfilment of each of the criteria giving rie to allocation of the annual variable remuneration. the Group acquired a certain number of important companie in the Beauty ector, thu reinforcing it poition both from a geographical tandpoint and in term of it brand portfolio; L Oréal changed it organiation and it method of functioning lat May in order to create, firtly, greater differentiation between the Diviion and, econdly, greater proximity with our market. Thi evolution aim to give the all the neceary force to the trategy defined by it Chairman and Chief Executive Officer: univeraliation, meaning globaliation with repect for difference; in parallel, the Group tepped up it policy for recruiting and developing talent everywhere in the world, in order to favour the emergence of local manager. L Oréal changed it communication and enriched it employer offering and i one of the mot attractive companie in the international ranking. The Group alo launched the L Oréal Share & Care programme, aimed at enuring that L Oréal employee, in all the countrie in which it i located all over the world, have acce to the bet ocial protection, the bet healthcare coverage and benefit and the optimal quality of life at work; the Group wa elected for incluion in the United Nation Global Compact 100, a new global tock index that combine corporate utainability and baeline financial performance. It wa recognied by the Ethiphere Intitute a one of the World Mot Ethical Companie in 2013; 50% baed on quantitative objective reflecting the Company performance meaured on the bai of change in the following indicator: comparable ale a compared to the budget, market hare a compared to the main competitor, operating profit plu advertiing and promotion expene a compared to 2012, net earning per hare a compared to 2012, ah flow a compared to 2012. After reviewing the reult for 2013, the Human Reource and Remuneration Committee aeed the performance of Mr. Jean- Paul Agon with regard to thee different quantative criteria, in light of the growth objective et at the beginning of the year. 50% on the bai of an aement of the qualitative apect of management: the appropriatene of trategic choice, the quality of leaderhip and management, the impact of communication, action to help ociety, addreing the pecific prioritie for the year. The Human Reource and Remuneration Committee aeed the performance of Mr. Jean-Paul Agon with regard to thee Mr. Jean-Paul Agon alo preented the Group commitment with regard to Sutainable Development by 2020 through the Sharing beauty with all programme. Thi how L Oréal ambition and the peronal commitment by it Chairman and Chief Executive Officer to building and enuring utainable growth. At it meeting on February 10 th, 2014, taking into account the analyi made by the Human Reource and Remuneration Committee, the Board of Director decided to allocate an amount of 1,837,500 to Mr. Jean-Paul Agon a annual variable remuneration, namely 87.5% of the target objective. AWARD OF PERFORMANCE SHARES Within the cope of the authoriation of the Ordinary and Extraordinary General Meeting of April 26 th, 2013, the Board of Director meeting held on the ame date, taking into account the performance of Mr. Jean-Paul Agon, decided to grant him 40,000 ACA (performance hare). It hould be noted that the Board of Director had granted 50,000 ACA (performance hare) to Mr. Jean-Paul Agon on April 17 th, 2012. In it deciion to decreae the number of ACA granted to Mr. Jean-Paul Agon on April 26 th, 2013, the Board took into account the increae in the etimated fair value of the ACA, directly linked with the increae in the hare value between thee two date ( 130.30 v. 92.70). The etimated fair value according to the IFRS applied for the preparation of the conolidated financial tatement of one performance hare (ACA) under the April 26 th, 2013 Plan i 112.37 for French tax and/or ocial ecurity reident, which i the cae for Mr. Jean-Paul Agon. Thi fair value wa 77.07 on April 17 th, 2012. 68 REGISTRATION DOCUMENT / L ORÉAL 2013

CORPORATE GOVERNANCE REMUNERATION OF THE DIRECTORS AND THE EXECUTIVE OFFICERS The etimated fair value according to the IFRS of the 40,000 performance hare granted in 2013 to Mr. Jean-Paul Agon i therefore 4,494,800. Thee hare will only finally vet, in full or in part, after atifaction of the performance condition decribed below. In accordance with the proviion of paragraph 3) of Article L. 225-197-6 of the French Commercial Code, in order for a grant of performance hare to be made to Mr. Jean-Paul Agon, the employee of L Oréal and at leat 90% of all the employee of it ubidiarie, within the meaning of thee proviion, have to be the beneficiarie of an incentive agreement within the meaning of Article L. 3312-2 of the French Labour Code, or a derogatory profit haring cheme within the meaning of Article L. 3324-2 of the ame code. Performance condition The final veting of thee hare i ubject to fulfilment of performance condition which will be recorded at the end of a veting period of 4 year a from the date of grant. Half of the number of hare that finally vet will depend on growth in comparable cometic ale a compared to thoe of a panel of competitor, uch panel coniting of Procter & Gamble, Unilever, Etée Lauder, Shieido, Beierdorf, Johnon & Johnon, Henkel, LVMH, Kao, Revlon and Elizabeth Arden; the other half will depend on the growth in L Oréal conolidated operating profit. The calculation will be baed on the arithmetic average for the three full financial year of the veting period. The firt full year taken into account for evaluation of the performance condition relating to thi grant i 2014. In order for it to be poible for all the free hare granted to be finally acquired, in repect of the criterion related to ale, for the beneficiarie at the end of the veting period, L Oréal mut achieve a performance which i at leat a good a the average increae in ale of the panel of competitor. No hare will finally vet, in repect of the criterion related to operating profit, if it doe increae in abolute value over the period. The figure recorded each year to determine the level of performance achieved are publihed in the Annual Financial Report. Main characteritic of the grant Thi Plan made it poible to grant 1,057,820 conditional hare to 2,092 beneficiarie. The grant of conditional hare which Mr. Jean-Paul Agon received in 2013 repreent 3.78% of the total number of conditional hare granted and 3.67% of their etimated value according to the IFRS. Mr. Jean-Paul Agon hall retain 50% of the hare which will be finally granted to him at the end of the veting period in regitered form, until the termination of hi dutie a Chairman and Chief Executive Officer. In light of the ignificant level of the holding obligation impoed on L Oréal Chairman and Chief Executive Officer at the time of the exercie of tock option for the ubcription of hare and the final veting of hare, the Board of Director ha decided not to require Mr. Jean-Paul Agon to purchae an additional quantity of hare of the Company when the hare granted become available, a recommended by the AFEP-MEDEF Code. Furthermore, a for previou grant, Mr. Jean-Paul Agon ha undertaken not to enter into any rik hedging intrument. It i to be noted that no tock option to purchae or ubcribe for hare, and no other long-term incentive tool, were granted to Mr. Jean-Paul Agon in 2013. ATTENDANCE FEES At it meeting on February 10 th, 2014, the Board of Director allocated an amount of 85,000 to Mr. Jean-Paul Agon in repect of the 2013 financial year, coniting of the following: a a Director, a fixed portion of 30,000 and a variable portion of 25,000 depending on the regularity of attendance at Board meeting (100%); a Chairman of the Strategy and Development Committee, an additional amount of 30,000. Component of remuneration for 2014: FIXED REMUNERATION On the propoal of the Human Reource and Remuneration Committee, the Board of Director decided, at it meeting on February 10 th, 2014, to increae the amount of Mr. Jean-Paul Agon fixed remuneration, unchanged ince 2008, to a gro amount of 2,200,000 on an annual bai. ANNUAL VARIABLE REMUNERATION Concerning Mr. Jean-Paul Agon annual variable remuneration, on the propoal of the Human Reource and Remuneration Committee, the Board of Director decided to apply it new policy to uch variable remuneration a from 2014. Thu, if the target objective of annual variable remuneration that may repreent a maximum of 100% of the fixed remuneration remain unchanged, namely 2,200,000, the balance between the quantative financial part and the extra-financial part of the variable remuneration i revied. The financial part i et at 60% of the total amount of the annual variable remuneration (namely a maximum target of 1,320,000). The extra-financial portion repreent 40% of the total amount of the annual variable remuneration (namely a maximum target of 880,000) and the related criteria have been revied in order to ue meaurable indicator adapted to the Group Human Reource and CSR trategy. The CSR criteria hould make it poible, in particular, to meaure, year after year, the progre made with regard to the main commitment, Innovating Sutainably, Producing Sutainably, Conuming Sutainably and Sharing our growth, made within the framework of the Sharing beauty with all programme to be implemented by 2020. 2 REGISTRATION DOCUMENT / L ORÉAL 2013 69

2 REMUNERATION CORPORATE GOVERNANCE OF THE DIRECTORS AND THE EXECUTIVE OFFICERS For 2014, the evaluation criteria are et a follow: Financial criteria (60%) reflecting the Company performance meaured on the bai of the growth: Comparable ale a compared to the budget, Market hare a compared to the main competitor, Operating profit a compared to 2013, Net earning per hare a compared to 2013, Cah flow a compared to 2013; The following extra-financial criteria (40%): Human Reource criteria: - Gender parity, - Talent development, - Acce to training; CSR criteria: - Innovating utainably, - Producing utainably, - Conuming utainably, - Sharing our growth ; Qualitative criteria: - The company image/reputation/dialogue with takeholder, - Addreing the prioritie for the year. AWARD OF PERFORMANCE SHARES Concerning the award of performance hare in 2014, the Board of Director reerve the poibility to decide on the implementation of a new Plan within the cope of the authoriation given by the Ordinary and Extraordinary General Meeting on April 26 th, 2013. The grant which would be decided in favour of Mr. Jean-Paul Agon would comply with the recommendation of the June 2013 AFEP-MEDEF Code of Corporate Governance and particularly that relating to the value of the hare granted which mut not differ from L Oréal previou practice. ATTENDANCE FEES Mr. Jean-Paul Agon will receive attendance fee in hi capacity a a member of the Board of Director in accordance with the ame rule a thoe applicable to the other Director. It hould be noted that, for 2014, the Board of Director ha decided to make a change in the allocation of attendance fee by providing for a predominantly variable portion in order to encourage the Director to attend Committee meeting. Termination indemnitie, penion cheme, additional ocial protection Thee component of remuneration are not linked to performance of the corporate office, but they may be due puruant to the upended employment contract. The AFEP-MEDEF code, to which L Oréal refer, recommend that companie hould put an end to the practice of combining an employment contract with a corporate office although it doe not impoe thi a a mandatory requirement (point 22). A a reminder, L Oréal Board of Director hare the objective of thi recommendation which aim at avoiding the poibility of concurrently obtaining benefit both from the employment contract and the corporate office and at prohibiting any interference with the poibility of removing executive officer ad nutum. The Board of Director ha formally provided for the method of application of the objective of the recommendation, a adapted to the profeional context in the L Oréal Group. The Board intention i to ue the treatment et out below for Mr. Jean-Paul Agon and, in future, for any new corporate officer appointed who ha over 15 year length of ervice in the Group at the time of hi/her appointment. L Oréal ongoing policy ha been to appoint employee who have completely ucceeded in the variou tage of their career in the Group a executive officer. Thi i how Mr. Jean-Paul Agon, then Deputy Chief Executive Officer, wa appointed a Chief Executive Officer of L Oréal in April 2006, following a brilliant career panning 27 year within the Group. The Board of Director noted that if, in accordance with the AFEP-MEDEF recommendation, Mr. Jean-Paul Agon employment contract with L Oréal wa to be terminated, Mr. Agon would loe the tatu he acquired a a reult of the twenty-even year he pent working for the Group a an employee. The Board did not want Mr. Jean-Paul Agon, who accepted the office of Chief Executive Officer after 27 year working with L Oréal, to be deprived of the benefit to which he would have continued to be entitled had he remained an employee. Maintenance of the employment contract and eparation of the benefit attached to the employment contract on the one hand and to the corporate office on the other. The Board of Director conidered that the objective purued by the AFEP-MEDEF recommendation can be fully achieved by maintaining the upenion of the employment contract and clearly eparating out the benefit related to the employment contract on the one hand from thoe relating to hi corporate office on the other. In thi manner, remuneration in repect of the corporate office will in no event be taken into conideration for calculation of the indemnitie due puruant to the collective bargaining agreement and the Company-level agreement applicable to all L Oréal enior manager. The remuneration under the upended employment contract to be taken into account for all the right attached thereto, and in particular for the calculation of the defined benefit penion referred to below, i baed on the amount of remuneration at the date of upenion of the employment contract in 2006, namely fixed remuneration of 1,500,000 and variable remuneration of 1,250,000. Thi reference remuneration i revied every year by applying the revaluation coefficient in repect of alarie and penion contribution publihed by the French State penion fund. A of January 1 t, 2014, the fixed remuneration amount to 1,671,000 and variable remuneration to 1,392,500. 70 REGISTRATION DOCUMENT / L ORÉAL 2013

CORPORATE GOVERNANCE REMUNERATION OF THE DIRECTORS AND THE EXECUTIVE OFFICERS The length of ervice applied will take into conideration hi entire career, including the year during which he wa Chief Executive Officer and Chairman and Chief Executive Officer. Payment olely of the termination indemnitie due puruant to the employment contract to the excluion of any indemnity in the event of termination of the corporate office. In the event of departure, and depending on the reaon, Mr. Jean-Paul Agon would only be paid the dimial indemnitie, except in the event of gro miconduct or gro negligence, or retirement indemnitie due in the event of voluntary retirement or compulory retirement on the Company initiative puruant to the employment contract that ha been upended. Thee indemnitie, which are attached olely to termination of the employment contract and in trict application of the National Collective Bargaining Agreement for the Chemical Indutrie and the Company-level agreement applicable to all L Oréal enior manager, are due in any event puruant to public policy rule of employment law. They are not ubject to any condition other than thoe provided for by the National Collective Bargaining Agreement for the Chemical Indutrie or the above-mentioned company-level agreement. The ame applie to the non-competition claue and the related financial conideration. Puruant to the chedule of indemnitie under the National Collective Bargaining Agreement for the Chemical Indutrie, in the event of dimial, except in the event of gro miconduct or gro negligence, the indemnity would be capped, in light of Mr. Jean-Paul Agon length of ervice, at 20 month remuneration under the upended employment contract. the length of ervice requirement wa 10 year at the time of cloure of the cheme on December 31 t, 2000; the cover may not exceed 40% of the calculation bai for the Penion Cover plu 0.5% per year for the firt twenty year, then 1% per year for the following twenty year, in the Company; the cover may not exceed the average of the fixed part of the remuneration for the three year ued for the calculation bai out of the even prior to the end of the beneficiary career in the Company. For information purpoe, it can be etimated that the amount of the penion that would be paid to Mr. Jean-Paul Agon, under L Oréal Garantie de Retraite de Membre du Comité de Conjoncture cheme, had he been able to apply for a full-rate penion from the French ocial ecurity cheme on December 31 t, 2013 after more than 35 year length of ervice at L Oréal, would repreent around 40% of the fixed and variable remuneration he received a an executive officer in 2013. Thi information i given a an indication after etimating the main penion entitlement accrued by Mr. Jean-Paul Agon, at 65 year of age, a a reult of hi profeional activitie, according to the rule regarding the application for payment of uch penion in force at December 31 t, 2013 and which may be ubject to change. The amount of the penion paid to Mr. Jean-Paul Agon, under L Oréal Garantie de Retraite de Membre du Comité de Conjoncture cheme will in fact only be calculated on the date when he applie for all hi penion. 2 In repect of the employment contract, puruant to the proviion of the National Collective Bargaining Agreement for the Chemical Indutrie, in the event of termination of the employment contract, the indemnity due in conideration of the non-competition claue would be payable every month for two year on the bai of two-third of the monthly fixed remuneration attached to the upended employment contract unle Mr. Jean-Paul Agon were to be releaed from application of the claue. For information purpoe, the cumulative amount of the indemnity provided for under the collective bargaining agreement and the indemnity in conideration of the noncompetition claue which would have been due to Mr. Jean- Paul Agon had hi employment contract been terminated on December 31 t, 2013 through dimial, except in the event of gro miconduct or gro negligence, would have repreented an amount of le than 24 month of the fixed and variable remuneration which he received in 2013 a a corporate officer. Maintenance of entitlement to the defined benefit penion cheme for the Group enior manager. Mr. Jean-Paul Agon benefit, under hi upended employment contract, from the Garantie de Retraite de Membre du Comité de Conjoncture (Penion Cover of the Member of the Comité de Conjoncture) cheme cloed on December 31 t, 2000, a decribed on page 203 et eq. of the paragraph on Employee benefit and penion cheme and other benefit. A a reminder, the right to the defined benefit penion are uncertain and conditional on the beneficiary ending hi career in the Company. The funding of thi cheme by L Oréal cannot be broken down individually by employee. Maintenance of the benefit of the additional ocial protection cheme applicable to the Company employee. Mr. Jean-Paul Agon will continue to be entitled to benefit from the additional ocial protection cheme and in particular the employee benefit and healthcare cheme applicable to the Company employee due to the fact that he will be treated a a enior manager throughout the entire length of hi corporate office. For information purpoe, the amount of the employer contribution to thee cheme total 5,788 in 2013. Like for all the other enior manager of the Group, the lumpum amount reulting from the employer contribution under the defined contribution penion cheme will be deducted from the amount of the Penion Cover for the calculation of the life annuity that may be due within the cope of thi cheme o that thee benefit are not combined. The above proviion are ubject to the regulated agreement and commitment procedure; thi commitment wa approved by the Annual General Meeting on April 27 th, 2010 making a deciion with regard to the Special Report prepared by the Statutory Auditor. The main feature of thi cheme, which fall under Article L. 137-11 of the French Social Security Code, are a follow: around 120 enior manager, active or retired, are concerned; They remained unchanged within the cope of the appointment of Mr. Jean-Paul Agon a Chairman and Chief Executive Officer a from March 18 th, 2011. REGISTRATION DOCUMENT / L ORÉAL 2013 71

2 REMUNERATION CORPORATE GOVERNANCE OF THE DIRECTORS AND THE EXECUTIVE OFFICERS The table et out below, preented in the form recommended by the AMF, clearly how that there are no concurrent benefit under the upended employment contract and the corporate office. It i moreover tated that the AMF conider that a company complie with the AFEP-MEDEF Code when it explain the maintenance of the employment contract of a enior manager a being due to hi length of ervice a an employee in the Company and hi peronal ituation and provide detailed ubtantiation in thi repect. Mr. Jean-Paul Agon (1) Supplementary Chairman and Chief Executive Officer Employment contract (2) penion cheme (3) Indemnitie or benefit due or which may become due a a reult of termination or change of dutie (4) Indemnitie relating to a non-competition claue (5) Ye No Ye No Ye No Ye No X X X X (1) Mr. Agon ha been a Director ince April 25 th, 2006, the date on which he wa appointed a Chief Executive Officer. Hi tenure wa renewed at the Annual General Meeting on April 27 th, 2010. Mr. Agon ha been Chairman and Chief Executive Officer ince March 18 th, 2011. (2) Mr. Agon employment contract i upended throughout the entire length of hi corporate office. (3) Puruant to hi employment contract, Mr. Agon i entitled to benefit from the Garantie de Retraite de Membre du Comité de Conjoncture (Penion Cover of the Member of the Comité de Conjoncture ) a decribed on page 203. Thi defined benefit penion cheme provide that the building up of right to benefit i conditional on the beneficiary ending hi career in the Company; the funding of thi cheme by L Oréal cannot be broken down individually by employee. (4) No indemnity i due in repect of termination of the corporate office. In repect of the employment contract, puruant to the proviion of the National Collective Bargaining Agreement for the Chemical Indutrie, in the event of dimial, except in the cae of gro miconduct or gro negligence, the dimial indemnity would be capped, in light of Mr. Agon length of ervice, at 20 month reference remuneration. (5) In repect of the employment contract, puruant to the proviion of the National Collective Bargaining Agreement for the Chemical Indutrie, in the event of termination of the employment contract, the indemnity due in conideration of the non-competition claue would be payable every month for two year on the bai of two third of the monthly reference fixed remuneration related to the employment contract unle Mr. Agon were to be releaed from application of the claue. SUMMARY TABLE OF THE REMUNERATION OF MR. JEAN-PAUL AGON, CHAIRMAN AND CHIEF EXECUTIVE OFFICER In 2013 2012 Amount due Amount paid Amount due Amount paid Fixed remuneration 2,100,000 2,100,000 2,100,000 2,100,000 Annual variable remuneration (1) 1,837,500 1,785,000 1,785,000 1,785,000 Exceptional remuneration - - - Attendance fee (2) 85,000 85,000 85,000 79,000 Benefit in kind - - - TOTAL 4,022,500 3,970,000 3,970,000 3,964,000 (1) Variable remuneration due in repect of year N i paid in year N+1. (2) The attendance fee for year N are paid in year N+1. SUMMARY TABLE OF REMUNERATION AND PERFORMANCE SHARES AWARDED TO MR. JEAN-PAUL AGON, CHAIRMAN AND CHIEF EXECUTIVE OFFICER: In 2013 2012 Remuneration due in repect of the financial year 4,022,500 3,970,000 Value of the performance hare granted during the financial year 4,494,800 (1) 3,853,500 (2) TOTAL 8,517,300 7,823,500 (1) Correponding to 40,000 performance hare x 112.37 (etimated fair value on April 26 th, 2013 according to the IFRS applied for the preparation of the conolidated financial tatement). (2) Correponding to 50,000 performance hare x 77.07 (etimated fair value on April 17 th, 2012 according to the IFRS applied for the preparation of the conolidated financial tatement). 72 REGISTRATION DOCUMENT / L ORÉAL 2013

CORPORATE GOVERNANCE REMUNERATION OF THE DIRECTORS AND THE EXECUTIVE OFFICERS TABLE SHOWING THE STOCK OPTIONS GRANTED TO MR. JEAN-PAUL AGON SINCE HIS APPOINTMENT AS AN EXECUTIVE OFFICER THAT CAN STILL BE EXERCISED AT DECEMBER 31 t, 2013 Date of grant Number of option granted Number of option not yet exercied 1 t poible date of exercie Date of expiry Subcription price (in ) 12.01.2006 500,000 500,000 12.02.2011 12.01.2016 78.06 (S) 11.30.2007 350,000 350,000 12.01.2012 11.30.2017 91.66 (S) 03.25.2009 - - - - - 04.27.2010 400,000 400,000 04.28.2015 04.27.2020 80.03 (S) 04.22.2011 (1) 200,000 200,000 04.23.2016 04.22.2021 83.19 (S) (1) The Board of Director allocated 400,000 tock option to Mr. Jean-Paul Agon on April 22 nd, 2011. Mr. Jean-Paul Agon waived 200,000 of thee tock option. He therefore benefit from 200,000 tock option under the Plan decided by the Board of Director on April 22 nd, 2011. 2 Mr. Jean-Paul Agon, a an executive officer, will retain a number of hare correponding to 50% of the balance of the hare reulting from the exercie of the tock option, in regitered form, until the termination of hi dutie a Chairman and Chief Executive Officer of L Oréal. The balance of the hare reulting from the exercie of the tock option hould be undertood to mean the total number of hare reulting from the exercie of tock option minu the number of hare that have to be old to finance the exercie of the tock option in quetion and, where applicable, the payment of any immediate or deferred taxe, ocial levie and cot relating to the exercie of thee tock option a applicable at the date of exercie of the option. If the number of hare thu determined that mut be retained until the termination of Mr. Jean-Paul Agon dutie a Chairman and Chief Executive Officer i not a whole number of hare, thi number of hare would be rounded down to the nearet lower whole number of hare. Mr. Jean-Paul Agon ha undertaken not to enter into any rik hedging tranaction. TABLE OF THE STOCK OPTIONS TO PURCHASE OR SUBSCRIBE FOR SHARES EXERCISED BY MR. JEAN-PAUL AGON DURING THE 2013 FINANCIAL YEAR Date of grant Stock option for the purchae or ubcription of hare exercied Exercie price Stock option granted during performance of the corporate office None -- Stock option granted prior to the corporate office (1) December 3 rd, 2003 75,000 63.02 December 3 rd, 2003 75,000 71.90 December 1 t, 2004 45,000 55.54 November 30 th, 2005 15,000 61.37 (1) Thee tock option, granted prior to the appointment of Mr. Jean-Paul Agon a an executive officer and expiring 10 year after their grant, were not ubject to any retention obligation. Neverthele, Mr. Jean-Paul Agon decided to retain ome of the hare reulting from the exercie of thee tock option, bringing the total number of hare held by him at December 31 t, 2013 to 76,500 hare. TABLE OF CONDITIONAL GRANTS OF SHARES TO MR. JEAN-PAUL AGON SINCE HIS APPOINTMENT AS AN EXECUTIVE OFFICER Date of grant Number of conditional hare granted Number of conditional hare that have not yet finally veted Date of final veting of all or part of the conditional hare 1 t poible date of ale of ome of them (1) April 17 th, 2012 50,000 50,000 April 18 th, 2016 April 18 th, 2018 April 26 th, 2013 40,000 40,000 April 27 th, 2017 April 27 th, 2019 (1) At the end of the acquiition period, Mr. Jean-Paul Agon, a a French reident on the date of granting of the hare i required to hold the hare definitively acquired by him for an additional two-year period during which the hare cannot be dipoed of. At the end of thi additional two-year period, Mr. Jean-Paul Agon a an executive officer, will hold 50% of the hare definitively acquired a regitered hare until the end of hi term a Chairman and CEO of L Oréal. With repect to thee hare, Mr. Agon ha committed to refreign from entering into any rik coverage tranaction. REGISTRATION DOCUMENT / L ORÉAL 2013 73

2 REMUNERATION CORPORATE GOVERNANCE OF THE DIRECTORS AND THE EXECUTIVE OFFICERS Summary table of the recommendation of the AFEP-MEDEF Code which have not been applied Recommendation of the AFEP-MEDEF Code (hereinafter the Code ) L Oréal practice and jutification Independence criteria for the Director (point 9.4 of the Code): Criterion providing that in order to be conidered a independent a Director mut not have been a Director for more than twelve year. Proportion of independent member on the committee (point 16.1, 17.1 and 18.1 of the Code): The proportion of independent Director on the Audit Committee mut be at leat two-third. The Selection or Appointment Committee and the Remuneration Committee mut be compoed of a majority of independent Director. Period for review of the account by the Audit Committee (point 16.2.1 of the Code): The time period for review of the account by the Audit Committee mut be ufficient (at leat two day before their review by the Board). The executive officer employment contract (point 22 of the Code): It i recommended, though not required, that when a enior manager or executive become a corporate officer of the Company, hi/her employment contract with the Company or another company of the Group hould be terminated by agreed termination or by reignation. Performance hare (point 23.2.4 of the Code) In accordance with the term and condition et by the Board and made public at the time of the grant thereof, make the performance hare granted to the executive officer conditional on the purchae of a defined quantity of hare when the hare granted become available. Attendance fee (point 21.1 du Code) The method of allocation of director compenation, hould take account, in uch way a the Board of Director hall determine, of the Director actual attendance at meeting of the Board and committee, and therefore include a ignificant variable portion. (ee ection on Executive officer on page 33 ) The Board failed to adopt one of the criteria pecified by the AFEP-MEDEF Code a it conider that the fact that a member ha performed a term of office for over 12 year doe not lead to uch member loing hi independent tatu. The profeional experience and freedom of judgement of the Director concerned, combined with good knowledge of the Company, make a big contribution to the dicuion and deciion of the Board. Hi length of office i an aet for the Board. It contribute to putting L Oréal main trategic option into perpective. The quality of a Director i alo meaured by hi experience, hi kill, hi authority and hi good knowledge of the Company, which are all aet which make it poible to conduct a long-term trategy. The fact remain that, in any event, in accordance with the AFEP-MEDEF Code for controlled companie, the percentage of independent Director on L Oréal Board i higher than one-third. (ee ection on The activitie of the Board committee on page 49) Another independent Director wa appointed to the Audit Committee in 2013 to increae the number of it member to 5, 60% of the Committee member being independent. The Appointment and Governance Committee and the Human Reource and Remuneration Committee are not compoed of a majority of independent. However: for the Appointment and Governance Committee, on February 10 th, 2014, the Board of Director decided to appoint another independent Director to the Committee, thu bringing the number of Committee member to four, two of whom are independent. for the Human Reource and Remuneration Committee, the Board of Director decided to change the compoition of thi Committee by proceeding with the appointment of an additional independent Director in 2011, uch that half it member are independent. Furthermore All the Director receive information on an ongoing bai and have uitable mean for the performance of their tak. They have a duty of vigilance and have complete freedom of judgement, which enable them in particular to participate, in total independence, in the deciion and work of the Board, and, where appropriate, of it committee. (ee ection on The activitie of the Board committee on page 49) Within the cope of the publication of the annual and interim reult, the Audit Committee meeting relating to the review of the financial tatement i held on a date cloe to that of their preentation to the Board of Director. But it hould be noted that the Board and it committee are regularly given the appropriate information to carry out their uperviory aignment, in thi field in particular. Furthermore, the correponding document are ytematically ent to them prior to the meeting. (See ection Remuneration of the Director and the Executive Officer on page 62 ) The Board of Director conidered that the objective purued by thi recommendation can be fully achieved by maintaining the upenion of the employment contract and clearly eparating out the benefit related to the employment contract on the one hand from thoe relating to hi corporate office on the other. Furthermore, the Board of Director ha decided to eliminate all right to any indemnity in the event of termination of the corporate office. Thi poition of the Board applie to the current office of Mr. Jean-Paul Agon and, in future, to any new corporate officer appointed who ha over 15 year length of ervice in the Group at the time of appointment. L Oréal ongoing policy ha been to appoint employee who have completely ucceeded in the variou tage of their career in the Group a executive officer. Thi i how Mr. Jean-Paul Agon, then Deputy Chief Executive Officer, wa appointed a Chief Executive Officer of L Oréal in April 2006, following a brilliant career panning 27 year at L Oréal. The Board of Director noted that if, in accordance with the AFEP-MEDEF recommendation, Mr. Jean-Paul Agon employment contract with L Oréal wa to be terminated, Mr. Agon would loe the tatu he acquired a a reult of the twenty-even year he pent working for the Group a an employee. (See the poition of the AMF*). (See ection Remuneration of the Director and the Executive Officer on page 62 ) In light of the ignificant level of the holding obligation impoed on L Oréal Chairman and Chief Executive Officer at the time of the exercie of tock option for the ubcription of hare and the final veting of hare, the Board of Director decided not to require Mr. Agon to purchae an additional quantity of hare of the Company when the hare granted become available, a recommended by the AFEP-MEDEF Code. The number of hare directly held by Mr. Agon wa 76,500 at December 31 t, 2013 a againt 31,500 at December 31 t, 2012. (S ee ection Attendance fee on page 69 ) Thi recommendation ha been applied by L Oréal for the 2014 financial year: For the 2014 financial year, the Board ha decided to enure that the variable portion of attendance fee i predominant. Like for Board meeting, preence at Committee meeting will be taken into account in the allocation of the variable portion. Attendance fee in repect of 2013: In repect of the 2013 financial year, The amount of attendance fee i divided between the Director a follow: an equal hare allocated to each Director, compriing a fixed part and a part that varie according to the degree of regularity in attending meeting; an additional hare for Board Committee member. * Extract from the AMF 2012 report on corporate governance and executive compenation conidering that in thi cae thi requirement wa met: The AMF tate that it conider that a company complie with the AFEP-MEDEF code when it explain the maintenance of a enior executive employment contract in light of hi length of ervice a an employee in the Company and hi peronal ituation (page 79). 74 REGISTRATION DOCUMENT / L ORÉAL 2013

CORPORATE GOVERNANCE INTERNAL CONTROL AND RISK MANAGEMENT PROCEDURES (REPORT OF THE CHAIRMAN OF THE BOARD OF DIRECTORS ON INTERNAL CONTROL) 2.4. SUMMARY OF TRADING BY DIRECTORS AND EXECUTIVE OFFICERS IN L ORÉAL SHARES IN 2013 (Article 223-26 of the General Regulation of the Autorité de Marché Financier) 2 Peron concerned Decription of the financial intrument Nature of the tranaction Number of tranaction Total amount Mr. Jean-Paul AGON, Chairman & CEO Share Exercie of Stock Option 11 13,538,850.00 Share Sale 4 11,336,599.65 Individual related to Mr. Jean-Paul AGON, Chairman and CEO Share Sale 4 5,694,836.76 2.5. INTERNAL CONTROL AND RISK MANAGEMENT PROCEDURES (REPORT OF THE CHAIRMAN OF THE BOARD OF DIRECTORS ON INTERNAL CONTROL) At the requet of the Chairman and Chief Executive Officer, the Adminitration and Finance Diviion compiled the information contained in thi report baed on the different type of work carried out by department working on Internal Control and management of the Group rik and which aim at covering the main operational, legal, indutrial, environmental, economic and financial rik decribed in ection 1.8. on page 20 to 27. For the preparation and drafting of thi report and the definition of Internal Control, L Oréal ued the Reference Framework recommended by the French financial market authority (the Autorité de Marché Financier) on July 22 nd, 2010. 2.5.1. Definition and objective of Internal Control In L Oréal, Internal Control i a ytem that applie to the Company and it conolidated ubidiarie ( the Group ) and aim at enuring that: economic and financial target are achieved in compliance with the law and regulation in force; the orientation et by General Management are followed; the Group aet are valued and protected; the Group financial and accounting information i reliable and provide true and fair tatement. By contributing to preventing and managing the rik to which the Group i expoed, the purpoe of the Internal Control ytem i to enable the Group indutrial and economic development to take place in a teady and utainable manner in a control environment appropriate for the Group buinee. However, no abolute guarantee can be given that thee objective will be met. With the aim of continually improving the ytem of Internal Control, the Group continued with it effort in 2013 by notably taking the following action: the corpu of tandard and procedure wa added to with, in particular: updating of the Fundamental of Internal Control which et out the main principle to be complied with for all our operational procee. On thi occaion, the organiation of the network of cutodian of the Group Internal Code ytem wa decribed, the publication of a corruption prevention guide; the network of Internal Control manager wa reinforced; a pecific training coure wa developed for thi function; the organiation of the econd edition of the Internal Control Award accelerated the haring of bet practice and provided everyone with confirmation of the General Management commitment with regard to Internal Control. REGISTRATION DOCUMENT / L ORÉAL 2013 75

2 INTERNAL CORPORATE GOVERNANCE CONTROL AND RISK MANAGEMENT PROCEDURES (REPORT OF THE CHAIRMAN OF THE BOARD OF DIRECTORS ON INTERNAL CONTROL) 2.5.2. Component of the ytem 2.5.2.1. THE INTERNAL CONTROL ORGANISATION AND ENVIRONMENT The control environment, which i critical to the Internal Control ytem, good rik management and the application of procedure, i baed on people, behaviour and the organiational tructure. In L Oréal, it form part of a culture of rigour and commitment communicated by enior management and i alo in line with the Group trategic choice. The Group Ethical Principle L Oréal ha built up it buine on the bai of trong Ethical Principle that have guided it development and contributed to etablihing it reputation: Integrity, Repect, Courage and Tranparency. L Oréal commitment to acting ethically and reponibly i ummaried in a document called The L Oréal Spirit acceible to everyone. L Oréal Code of Buine Ethic exit in 43 verion (35 different language) and i alo publihed in Braille in French and Englih. Iued to all employee throughout the world, it provide inight into how thee Ethical Principle need to be reflected in the behaviour and action of it employee through imple rule and a decription of concrete ituation to which they may be expoed. The Code of Buine Ethic applie to all employee, executive officer and director, member of the Executive and Management committee of the Group and thoe of it ubidiarie wordlwide. Six upplement to the Code of Buine Ethic have, ince 2010, covered certain apect of the Code in more detail. Country Manager (or for Corporate or Zone taff, the member of the Group Executive Committee to whom they report) are reponible for enuring the repect of the Code of Buine Ethical in their Country. Repect for thee Ethic Principle i integrated in the appraial ytem for all the employee and through two ethical competencie: Act/Lead with Human Senitivity and Obtain reult with integrity. The SVP and Chief Ethic Officer, who report directly to the Chairman and Chief Executive Officer, i in charge of enuring the promotion and integration of bet practice within the Group, providing guidance in ethical deciion-making. He enure employee are trained and overee the handling of concern, if any. He report regularly to the Chairman and Chief Executive Officer and inform the Board of Director and the Executive Committee. The Chief Ethic Officer ha a dedicated budget and team, ha acce to all the information and document concerning the Group activitie and can call upon all the Group team and reource to carry out hi miion. Employee have a dedicated intranet ite which provide additional information on ethic. Employee awarene i raied in particular during an annual Ethic Day. The central event in 2013 wa a live webchat with the Chairman and Chief Executive Officer, which enabled all the Group employee to ak quetion and dicu the everyday application of L Oréal Ethical Principle. Dialogue on ethic were alo organied locally with each Country Manager. More than 50% of the employee took part in thi dialogue and over 3,200 quetion were aked worldwide. Employee are now able to refer matter to the Chief Ethic Officer through the L Oréal Ethic Open Talk ite which offer a ecure information reporting mechanim. T he Ethic Correpondent role i to ait the Country Manager in implementing the ethic programme and enable employee in 60 countrie to have a local point of contact. The Ethic Correpondent benefit every year from a pecific coordinating and training programme. The ethic training campaign i on-going. A pecific e-learning programme on ethic wa rolled out in all countrie in October 2013. Since January 1 t, 2014, thi e-learning programme i mandatory for all new employee joining the Group. There are alo ix pecific module deigned in particular for Country Manager, Buyer and Human Reource. Finally, a practical tool for ethic rik aement and analyi ha been made available to the Group entitie. An annual reporting ytem make it poible to monitor implementation of the ethic programme. Country viit and the incluion of ethical quetion in Internal Audit aignment complete the programme. Reponibilitie with regard to Internal Control The Group i organied into worldwide Diviion and geographical zone, which are fully reponible, with the management of each country, buine unit or indutrial entity, for the achievement of the objective defined by the General Management with regard to Internal Control. The Functional Diviion bring their expertie to all operational employee. Worldwide reponibilitie for Internal Control of the activitie of their diviion or department are entruted to each of the member of the Management Committee. A ytem of delegation of authority i in place and continue to trengthen. The power of the legal repreentative of Group companie and of their delegate are limited and controlled in accordance with the proviion of the Legal Charter. Specialit in financial control, information ytem, Human Reource or indutrial and logitic technique provide upport to operational employee at all level of the organiation, which make it eaier to diffue bet practice of Internal Control. Human Reource policy The quality and kill of male and female employee are key component of the Internal Control ytem. Human Reource policy within L Oréal i defined by the contant earch for excellence in recruitment and by the development of talent within the Group, o a to enure that it ha the required level of kill in all area. Thee activitie alo form part of the Group diverity policy, which eek to value and repect difference throughout the organiation. Management Development Centre offer technical training and peronal development programme, including helping employee with integration or management; uch programme are tailored to different job profile and aimed at providing matery of different kill in all area of activity. 76 REGISTRATION DOCUMENT / L ORÉAL 2013

CORPORATE GOVERNANCE INTERNAL CONTROL AND RISK MANAGEMENT PROCEDURES (REPORT OF THE CHAIRMAN OF THE BOARD OF DIRECTORS ON INTERNAL CONTROL) Information ytem Strategic choice in term of ytem are determined by the Group Information Sytem Diviion, which i reponible in particular for implementation of a ingle ERP (Enterprie Reource Planning), management oftware application ued by the great majority of commercial ubidiarie, and which iue intruction regarding ytem ecurity. The worldwide roll-out of thi integrated oftware package alo contribute to trengthening the reliability and the ecurity of the proce of production of information, notably accounting and financial information. In puruit of the ame objective, the deployment of an integrated production and management olution in the Group indutrial entitie i continuing. The procedure and tandard governing the activitie Each Functional Diviion ha reponibility, in it own pecific field, for defining the principle and tandard applicable to all the entitie. In order to make it eaier for employee to take on board all thee principle and tandard, the key point have been ummaried in the Fundamental of Internal Control which were updated in 2013. Thi guide i a reference framework for the Group operational activitie, and i preented in the form of an information heet for each area. Each information heet refer to the detailed Charter, Code and tandard of the Group. The information heet are regularly updated, upplemented, validated by the expert in each area of expertie and preented to the Group Management Committee. A quetionnaire per operational function i propoed to ubidiarie o that they can make an aement with regard to their entity, make their own diagnoi with regard to Internal Control and determine the area of improvement within their own cope of activity. A management tandard with regard to egregation of dutie wa ditributed to all entitie in 2010. It define the main rule to be oberved in the field of ale, purchaing, logitic, finance, Human Reource and information ytem management. The application of thee rule i aimed at better prevention of the rik of fraud and reducing the probability that error (whether intentional or not) may remain undetected. 2.5.2.3. RISK MANAGEMENT In L Oréal, the ytem of management of rik (event or ituation of which the realiation, which i uncertain, ha a poitive or negative impact) applie to the Company and it conolidated ubidiarie ( the Group ). Rik management conit in identifying, managing and controlling rik that may affect the mooth running of the Company. It alo participate in value creation by promoting the good ue of the reource to minimie the impact of the negative event and maximie the realiation of opportunitie. Rik management therefore goe beyond a trictly financial framework. In order to enure the utainability of it development and the achievement of it objective, the Group trive to anticipate and manage the rik to which it i expoed in it different area of activity. Thee rik have been identified in ection 1.8. on page 20 to 27, and the ytem put in place to better anticipate and handle rik are mentioned. In addition, the Internal Rule of the Board of Director pecify the role played by the Audit Committee which mut make ure that the General Management ha at it dipoal the mean to enable it to identify and manage the economic, financial and legal rik facing the Group inide and outide France in carrying out it routine and exceptional operation. On the bai of the work by the Internal Audit Department, the analyi of major accounting and financial rik, in conjunction with the procee ued by ubidiarie, make it poible to identify Internal Control improvement and update the Group tandard (ee Management tandard in paragraph 2.5.4.2. on page 81 ). Rik mapping A rik mapping project concerning all L Oréal activitie wa finalied in 2011. Thi proce of identification and analyi of the ignificant rik and procee enhance the knowledge of the Group rik by formaliing and conolidating the work already achieved to date. The reult of thi work were preented to the Audit Committee. It i the reponibility of the Rik Management and Compliance Department, created in 2012, to lead thi proce. 2 2.5.2.2. COMMUNICATION OF INFORMATION INSIDE THE GROUP Sharing of information The brochure Fundamental of Internal Control i circulated individually to the Managing Director and Finance Director of all the conolidated ubidiarie, including the indutrial entitie. Furthermore, the Fundamental, elf-diagnoi quetionnaire, code, charter and tandard, together with the information related to the organiation, change and intruction from the Functional Diviion are made permanently available to the ubidiarie on the Group intranet ite. The other mean of internal communication Meeting are regularly organied aimed at paing on information about orientation of the General Management to manager of the ubidiarie. The Functional Diviion alo coordinate their network of expert through eminar and training eion. A newletter give manager regular new and pae on trong meage with regard to Internal Control. Finally, through the Internal Control Award, which were organied for the firt time in 2012, good practice are identified and hared between the Group ubidiarie. 2.5.2.4. CONTROL ACTIVITIES The meaure recommended by the Group In each area of activity, the recommended meaure with regard to the key control point are determined by the Functional Diviion. In the area of Human Reource, the requirement related to peronnel management pecify the document to be provided to employee, the way to book and report headcount and peronnel charge, the procedure for recruitment, training and appraial and the rule to be oberved in the field of payroll management. In the area of purchaing, the Purchaing Code of Ethic wa updated in 2011: The way we buy i the practical and ethical guide providing guideline for each employee in relationhip with the Group upplier. The tandard for Management of upplier and tender procedure pecify the condition for competitive tendering and for the regitration of the main upplier. The general term of purchae are ued a the framework for tranaction with upplier. The Purchae Commitment and Order Management tandard i aimed REGISTRATION DOCUMENT / L ORÉAL 2013 77

2 INTERNAL CORPORATE GOVERNANCE CONTROL AND RISK MANAGEMENT PROCEDURES (REPORT OF THE CHAIRMAN OF THE BOARD OF DIRECTORS ON INTERNAL CONTROL) at facilitating and trengthening control of the pending and invetment of Group entitie. In the area of afety and quality, procedure relating to the protection of peron, property and data et out the principle for covering indutrial and logitical rik relating to organiation and afety. Production quality tandard define rule governing the quality of product, for all tage from creation to production and ditribution. Almot all the factorie are ISO 9001-certified a far a their production i concerned, ISO 14001-certified for their environmental policy and OHSAS 18001 -certified (or equivalent certification) for their afety policy. In the area of the Supply Chain, the main aignment conit in defining and applying the ale planning, cutomer demand management, development procee and control of cutomer ervice, particularly through management of phyical order fulfilment, application of the general term of ale, the followup of order, management of cutomer return and cutomer dipute a well a account receivable collection procedure. Meaure are alo recommended for the management of ditribution centre and inventorie, ubcontracting, product traceability, buine continuity plan and tranport. In the field of Information Sytem, the Group ha an Information Sytem Security Policy. Baed on the international ISO 27001 tandard, thi policy cover the main topic of Information Sytem ecurity, decribing the general principle to be applied for each of them. It enable all the Group Information Sytem team, and by extenion all the employee, to hare clear objective, good practice and level of control adapted to the rik incurred. Thi policy i accompanied by an information ytem ecurity audit programme conducted by an outide firm. It i alo upplemented by an Information and Communication Technologie Code of Conduct, and a Code of Conduct for the correct ue of ocial media. In the legal area, the Legal Charter reaffirm the obligation to comply with local legilation and notably et out the internal principle for ignature on behalf of the Company, the general and pecific rule relating to contract, trademark law, intellectual property law, company law and competition law. A training tool and practical guide concerning the iue related to competition law and participation in profeional aociation define the principle to be complied with and provide anwer to any quetion which employee may have in thi area. In the Inurance field, the Group choice i to only have recoure to firt-rate inurer. The Inurance Charter iue a reminder that the Group mainly ue integrated worldwide programme to cover all it entitie notably againt third party liability, damage to property and operating loe reulting from an inured event. With regard to inurance of it cutomer rik, coverage i put in place inamuch a thi i permitted by local condition. The reult of audit performed by inurance companie in factorie and ditribution centre are ued to improve the Internal Control of thee entitie. In the area of finance and treaury, the Financial Charter and the exchange rik management tandard pecify, in particular, the principle to be applied by Group entitie to enure that management of exchange rik i both prudent and centralied. The tandard with regard to bank power define the proce for deignating the peron empowered to ign to make payment and the rule for implementation of thoe power. In addition, the Stock Market Code of Ethic, decribed on page 50 in the ection concerning the way in which the Board work i prepared and organied, i applicable to all employee. In the area of conolidation and financial control, the control activitie are decribed in paragraph 2.5.4.2. Monitoring proce for the organiation of the accounting and finance function on page 80. 2.5.2.5. ONGOING SUPERVISION OF THE INTERNAL CONTROL SYSTEM The uperviion carried out by the Functional Diviion Through their network of pecialit or via regular audit, the Functional Diviion review the functioning of their repective area of reponibility: in thi way, the Purchaing Diviion i reponible for the overight with regard to upplier and their working condition, the Environment, Health & Safety Diviion i reponible for check related to ite afety and environmental compliance while the Quality Department meaure performance and the progre made by indutrial entitie with regard to the quality of production and finally the Information Sytem Diviion aee compliance with the Security Policy. Indicator and reporting procedure enable the regular monitoring of the local activitie of mot of thee Functional Diviion. The role of the Internal Audit Department Internal Audit i carried out by a central team that report directly to the Executive Vice-Preident, Adminitration and Finance Diviion. Thi department carrie out regular aignment to audit major procee and check on the application of Group principle and tandard. Internal Audit aignment are ubmitted to the General Management and the Audit Committee for their approval and, with their agreement, are included in an annual audit plan. The choice of aignment notably take into account the aement of the rik identified. The ize, the contribution to key economic indicator, the hitory of the entitie together with the pattern of their development, are factor that are alo taken into conideration for the preparation of the annual audit plan. The Internal Audit Department carried out 43 aignment in 2013. Thee audit concerned 28 commercial entitie repreenting approximately 33% of the Group ale and 6 factorie; the audited factorie repreent around 15% of worldwide production in unit. Furthermore, 9 other aignment were carried out with 78 REGISTRATION DOCUMENT / L ORÉAL 2013

CORPORATE GOVERNANCE INTERNAL CONTROL AND RISK MANAGEMENT PROCEDURES (REPORT OF THE CHAIRMAN OF THE BOARD OF DIRECTORS ON INTERNAL CONTROL) regard to pecific topic. Internal Audit aignment ytematically lead to the preparation of a report compriing a preentation of the finding and related rik and making recommendation regarding the action plan to be put in place by the audited entity. The Internal Audit Department relie on the upport of the Group integrated ERP oftware package for the performance of it work and ha developed a certain number of pecific tranaction that contribute to increaing the efficiency of it work. Since 2007, complementary aignment aimed at verifying certain key Internal Control point in the configuration of the ERP oftware have been performed with the participation of a ytem expert. The Internal Audit Department carried out 3 uch aignment in 2013. 2013 wa alo marked by the tart-up of a GRC (Governance, Rik, Compliance) tool, rolled out to the audit team enabling it from now on to carry out it aignment uing an integrated tool. The action plan decided on further to the audit are followed up regularly by the Internal Audit Department, which meaure the rate of progre made in the implementation of the recommendation, weighted by the rik level applied. The ummary of performance and reult of the aignment and the progre of the action plan are preented to the General Management and the Audit Committee every year. The Internal Audit Department hare the reult of it audit with the Group Statutory Auditor. The remark made by the external auditor within the cope of their annual audit, are alo taken into conideration by the Internal Audit Department when it carrie out it aignment. 2.5.3. The player The main player involved in monitoring Internal Control and rik management are: the General Management and it Management Committee (Executive Committee); the Audit Committee; the Functional Department and Diviion, including the Rik Management and Compliance Department, the Internal Control Department and the Internal Audit Department. General Management and the Management Committee (Executive Committee) The role of the General Management i to define the general principle regarding Internal Control and to enure that they are correctly put in place. Within the cope of their worldwide Internal Control reponibilitie, the member of the Management Committee rely on operational and functional manager, according to their repective area of expertie. Thee manager mut enure implementation of thee general principle and enure the correct functioning of procedure enabling the level of Internal Control required by General Management to be attained. The Audit Committee The Board of Director ha alway aerted the importance that it attribute, together with General Management, to Internal Control and to it main area of application. Since it creation, the Audit Committee ha been reponible for monitoring action undertaken in the area of Internal Control and it report thereon to the Board of Director. It remit are defined in the Internal Rule of the Board of Director in paragraph 2.2.2.3. on page 77 et eq. of thi document. Each year, the Committee perform a review of the Internal Audit plan, it objective and the general concluion of Internal Audit aignment. Major Internal Control project and initiative are alo preented to it. The Committee then prepare a report with it own remark for the Board of Director. The Audit Committee work with regard to accounting and financial information i decribed in paragraph 2.5.4.2. on page 80. The Functional Diviion and Department The Functional Diviion each define guidance and procedure for their own area, which they communicate to the different countrie and entitie. The Adminitration and Finance Diviion Thi Diviion main role i to ait and control the operational employee in their adminitrative, financial and legal activitie. In order to do o, it et the operating rule that apply to all entitie in thee area and i reponible for the definition and deployment of tool, procedure and bet practice, particularly in the following area: financial control, accounting and conolidation, financing and treaury, tax, legal affair, financial communication, information ytem, and inurance. An Internal Control Committee ha the tak of taking all meaure to promote the proper undertanding and the proper application of the Group Internal Control rule and alo to monitor progre on important Internal Control project. The Rik Management and Compliance Department The objective of thi Department, which wa created in 2012, i to identify, ae and prioritie rik with all thoe concerned, and keep the rik mapping analyi up-to-date. It aim i to promote optimal ue of reource to minimie and control the impact of negative event and maximie the realiation of opportunitie. The Internal Control Department The Internal Control Department lead the Internal Control Committee which conit of manager from the Adminitration and Finance Diviion and the Rik Management and Compliance, Economic Affair, Internal Audit and Organiation and Information Sytem Department. The Internal Control Department coordinate the implementation of the project and work decided by the Internal Control Committee with the expert in each area of expertie. The updating of the tandard mentioned in paragraph 2.5.2.3. on page 77 and in paragraph 2.5.4.2. on page 80 and the revamping of the Fundamental of Internal Control are ome example of thi work. It i reponible for the continued development of the network of Internal Control manager in the Group entitie. In thi connection, the role of thi function wa pecifically detained and a training module wa created. At the end of 2013, the Internal Control Department can rely on a network of nearly 50 local manager preent in the Group different entitie. 2 REGISTRATION DOCUMENT / L ORÉAL 2013 79

2 INTERNAL CORPORATE GOVERNANCE CONTROL AND RISK MANAGEMENT PROCEDURES (REPORT OF THE CHAIRMAN OF THE BOARD OF DIRECTORS ON INTERNAL CONTROL) Thi department, which i eparate from Internal Audit and placed under the reponibility of the Rik Management and Compliance Department, enure the ditribution and updating of the Fundamental of Internal Control guide. Frequent action at eminar and during training cycle and the publication of newletter help to increae knowledge of thi tool and to improve it application and ue by operational employee and keep them informed of the Group project and prioritie in the area of Internal Control. In addition, the Internal Control Department enured that an aement of the Internal Control ytem i carried out and alo monitor compliance with regulatory Internal Control obligation on an ongoing bai. The Internal Audit Department In addition to it role of uperviion of application of the Internal Control ytem (ee paragraph 2.5.2.5. on page 78 ), the Internal Audit Department carrie out cro-functional analye with regard to poible Internal Control weaknee baed on finding noted during their aignment. Thee analye make it poible to orient the work of the Internal Control Committee and to identify the priority area for improvement and trengthening of procedure. The Operation Diviion Thi Diviion comprie the Quality, EHS (Environment, Health and Safety), Purchaing, Information Sytem (production), Human Reource (production), Supply Chain, Production Organiation, Indutrial Management and Real Etate Department. It define tandard and method applicable in the area of production quality, afety and the environment. It ait operational employee in the definition and implementation of their manufacturing and logitic policie. The other Functional Diviion The following Diviion are alo involved in Internal Control: the Human Reource Diviion; the Reearch and Innovation Diviion which i reponible in particular for cometovigilance and the quality of the formulae ued in product compoition; the Communication, Sutainable Development and Public Affair Diviion which co-ordinate communication initiative, prepare crii management principle and enure that they are applied; the Safety Diviion and Security Diviion which ha defined a afety and ecurity policy for people, travel, property, information and data confidentiality. 2.5.4. Internal Control ytem relating to the preparation and proceing of financial and accounting information For the preparation of thi report, L Oréal baed itelf on the Application Guide for Internal Control of accounting and financial information publihed by iuer, which i part of the Reference Framework publihed by the AMF on July 22 nd, 2010. Thi approach i part of an overall proce aimed at making continual progre and improving the Internal Control ytem that ha already been et up. 2.5.4.1. DEFINITION, SCOPE AND OBJECTIVES Internal Control of accounting and financial field cover the procee that contribute to accounting data: i.e. the proce of production of financial information, the proce of account cloing and action of financial communication. The Internal Control ytem with regard to accounting and financial apect aim to enure: compliance with accounting regulation and the correct application of the principle on which the financial tatement are baed; application of the guideline et by the General Management with regard to financial information; protection of aet; quality of the reporting that contribute to the preparation of the publihed financial tatement and the reliability of their centralied treatment for the Group with a view to their ditribution and their ue for monitoring purpoe; control of the production of financial, general and management accounting information including fraud prevention. The cope of application of Internal Control procedure relating to the preparation and proceing of financial and accounting information encompae the parent company and all ubidiarie included in the conolidated financial tatement. 2.5.4.2. MONITORING PROCESS FOR THE ORGANISATION OF THE ACCOUNTING AND FINANCE FUNCTIONS Organiation of the Finance Department Dedicated team of pecialit enure the implementation of accounting and financial monitoring, under the uperviion of the General Management, in the following area: accounting, conolidation, financial control, financial ervice and treaury. In the Adminitration and Finance Diviion, the preparation of the Group conolidated reult i the reponibility of the Economic Affair Department. The preence of a financial controller at each level of the organiation contribute to the trengthening of the Internal Control ytem. Thi network of ubidiary financial controller i co-ordinated by the Economic Affair Department. Proceing and pooling of cah flow and hedging of exchange and interet rate rik are carried out by the Financial Service Department, which i in charge of identifying commitment and enabling their proper booking. General accounting tandard The Group ha put in place a et of accounting policie and tandard, which all conolidated ubidiarie are required to apply and which enable uniform, reliable financial information to be provided. Thee accounting policie are regularly updated, taking into account the change in regulation and accounting principle: accounting tandard et out the principle required for harmonied accounting treatment of tranaction. They pecify in particular the method of recording balance heet item and of identification and valuation of off-balance 80 REGISTRATION DOCUMENT / L ORÉAL 2013

CORPORATE GOVERNANCE INTERNAL CONTROL AND RISK MANAGEMENT PROCEDURES (REPORT OF THE CHAIRMAN OF THE BOARD OF DIRECTORS ON INTERNAL CONTROL) heet commitment. They are in accordance with IFRS, the accounting tandard ued to prepare the conolidated financial tatement. The Group Accounting Department monitor, on an ongoing bai, new accounting tandard currently under preparation, with a view to alerting the General Management and anticipating their effect on the Group financial tatement; the chart of account, which i common to all ubidiarie, provide the definition and the methodology for the preparation of the reporting required for the preparation of the financial tatement. Management tandard Management tandard not only pecify the rule applicable to the valuation of certain ignificant account in the balance heet and the income tatement but alo the control and validation applicable to the key procee. Since the major initiative undertaken between 2008 and 2010 involving a review and improvement of the management tandard and the related Internal Control procedure, thee are regularly upplemented and are thu part of the continuou improvement proce. The purpoe of thi work i both to take action in repone to the finding of the Internal Audit Department and to cover the area correponding to the accounting and financial rik of ubidiarie. Thi work ha made it poible to bring our approach more cloely into line with the recommendation et out in the Application Guide relating to Internal Control of accounting and financial information of the AMF Reference Framework. Organiation and ecurity of information ytem Deciion with regard to the choice of oftware that i adapted to the Group financial and accounting requirement are made jointly by the Economic Affair Department and the Information Sytem Diviion. At the level of information ytem, the team work on trengthening the procedure for the eparation of tak and improved control of acce right. Tool have been made available to enable them to enure that acce right comply with the Group rule. Management tool The ytem for monthly reporting of variou economic indicator enable the monitoring of the evolution of the performance of each ubidiary in a continuou and harmonied manner. It alo enable aurance to be obtained that uch performance i in line with the objective et. The reporting and conolidation ytem, ued by all entitie, enure the conitency and reliability of figure at the level of each ubidiary through blocking control that operate before the financial data i uploaded to Group level. In thi regard, the operating profit and lo account by detination, which i common to both management and general accounting, contribute to trengthening the control of account in the financial tatement through the ue of a ingle reference framework. In addition, the Group organiation, which i baed on reporting from each ubidiary that i provided directly by the countrie to the parent company, without any intermediate aggregate for the vat majority of the ubidiarie, enable optimiation of the data tranfer and the completene of the information, and in particular enable the checking of the accuracy of the exchange converion rate. The Managing Director and the Finance Director of each ubidiary make a joint commitment with regard to the quality, reliability and completene of the accounting and financial information they have prepared and ent to the Group Economic Affair Department, through a repreentation letter that they jointly ign. The Audit Committee The role and tak of the Audit Committee are decribed above in paragraph 2.2.2.1. on page 50 et eq. Thee tak are in compliance with the French ordinance of December 2008 on the condition of application of the 8 th European Directive on tatutory audit and are baed on the report by the working group on the Audit Committee publihed by the AMF on July 22 nd, 2010. 2.5.4.3. PROCESSES USED TO PREPARE ACCOUNTING AND FINANCIAL INFORMATION Operational procee contributing to accounting figure All of the procee that contribute to accounting figure, particularly ale and purchae, and inventory, fixed aet, payroll and treaury management are covered by pecific procedure, follow-up check and rule for validation, authoriation and booking operation. Cloing of the account, conolidation and Management reporting information The account cloing proce i governed by precie intruction and i baed on a detailed time chedule circulated to all the ubidiarie to make ure that deadline are met and the financial tatement are prepared in a conitent manner. For the preparation of the conolidated financial tatement, validation procedure apply to each tage of the proce of reporting and proceing information. Their purpoe i to verify in particular that: inter-company tranaction are correctly adjuted and eliminated (thee are reported on a monthly bai); conolidation operation are checked; accounting tandard are correctly applied; the conolidated publihed accounting and financial data i harmonied and properly determined and general accounting data and Management reporting figure ued in the preparation of the financial information are conitent. Financial communication Manager in charge of financial communication prepare a precie timetable for publication of up-to-date information on the Group to the financial market. Thi timetable complie with the requirement of market authoritie. Thee manager enure, with the aitance of the Legal Department, that communication are made within the required deadline and in accordance with law and regulation, which they contantly monitor. Their role i alo to publih, preciely and accurately, the information provided by the Economic Affair Department and the Legal Department. All material information provided to the financial community reflect with truth and tranparency the ituation and activity of the Group and i carried out in accordance with the principle of equal proviion of information to all hareholder. 2 REGISTRATION DOCUMENT / L ORÉAL 2013 81

2 INTERNAL CORPORATE GOVERNANCE CONTROL AND RISK MANAGEMENT PROCEDURES (REPORT OF THE CHAIRMAN OF THE BOARD OF DIRECTORS ON INTERNAL CONTROL) The Statutory Auditor All accounting and financial information prepared by conolidated ubidiarie i, at a minimum, ubjected to a limited review at the time of the half-year cloing proce and to a full audit at year-end, by the external auditor. Twice a year, the Managing Director and the Finance Director of each conolidated ubidiary make a joint commitment a to the true and fair view, reliability and completene of the financial information by jointly igning a repreentation letter. Audit aignment in the countrie in which the Group operate are almot all entruted to member of the network of the two Statutory Auditor who, after having jointly performed the review of all the Group account and the manner in which they were prepared, are reponible for iuing an opinion on the Group conolidated financial tatement. The Statutory Auditor iue an opinion a to whether the conolidated financial tatement and parent company financial tatement give a true and fair view. They are kept informed from the early tage of preparation of the financial tatement and preent an overview of their work to the Group accounting and finance manager and to the Audit Committee at the time of the half-year and annual cloing. 82 REGISTRATION DOCUMENT / L ORÉAL 2013

CORPORATE GOVERNANCE STATUTORY AUDITORS REPORT, PREPARED IN ACCORDANCE WITH ARTICLE L. 225-235 OF THE FRENCH COMMERCIAL CODE ON THE REPORT PREPARED BY THE CHAIRMAN OF THE BOARD OF DIRECTORS 2.6. STATUTORY AUDITORS REPORT, PREPARED IN ACCORDANCE WITH ARTICLE L. 225-235 OF THE FRENCH COMMERCIAL CODE ON THE REPORT PREPARED BY THE CHAIRMAN OF THE BOARD OF DIRECTORS (Year ended December 31 t, 2013) 2 Thi i a free tranlation into Englih of the Statutory Auditor report iued in French and i provided olely for the convenience of Englih peaking reader. Thi report hould be read in conjunction with, and contrued in accordance with, French law and profeional auditing tandard applicable in France. In our capacity a Statutory Auditor of L Oréal and in accordance with article L. 225-235 of the French Commercial Code (Code de commerce), we hereby report to you on the report prepared by the Chairman of your Company in accordance with article L. 225-37 of the French Commercial Code for the year ended December 31, 2013. It i the Chairman reponibility to prepare and ubmit to the Board of Director for approval, a report decribing the internal control and rik management procedure implemented by the Company and providing the other information required by article L. 225-37 of the French Commercial Code in particular relating to corporate governance. It i our reponibility: to report to you our obervation on the information et out in the Chairman report on internal control and rik management procedure relating to the preparation and proceing of financial and accounting information, and to attet that the report et out the other information required by article L. 225-37 of the French Commercial Code, it being pecified that it i not our reponibility to ae the fairne of thi information. We conducted our work in accordance with profeional tandard applicable in France. Information concerning the internal control and rik management procedure relating to the preparation and proceing of financial and accounting information The profeional tandard require that we perform procedure to ae the fairne of the information on internal control and rik management procedure relating to the preparation and proceing of financial and accounting information et out in the Chairman report. Thee procedure mainly conited of: obtaining an undertanding of the internal control and rik management procedure relating to the preparation and proceing of financial and accounting information on which the information preented in the Chairman report i baed and of the exiting documentation; obtaining an undertanding of the work performed to upport the information given in the report and of the exiting documentation; determining if any material weaknee in the internal control procedure relating to the preparation and proceing of the financial and accounting information that we may have identified in the coure of our work are properly decribed in the Chairman report. On the bai of our work, we have no matter to report on the information given on internal control and rik management procedure relating to the preparation and proceing of financial and accounting information, et out in the Chairman of the Board report, prepared in accordance with article L. 225-37 of the French Commercial Code. Other information We attet that the Chairman report et out the other information required by article L. 225-37 of the French Commercial Code. Neuilly-ur-Seine, February 21 t, 2014 The Statutory Auditor PricewaterhoueCooper Audit Gérard Morin Deloitte & Aocié David Dupont-Noel REGISTRATION DOCUMENT / L ORÉAL 2013 83

2 STATUTORY CORPORATE GOVERNANCE AUDITORS SPECIAL REPORT ON REGULATED AGREEMENTS AND COMMITMENTS WITH THIRD PARTIES 2.7. STATUTORY AUDITORS SPECIAL REPORT ON REGULATED AGREEMENTS AND COMMITMENTS WITH THIRD PARTIES (Annual General Meeting held to approve the financial tatement for the year ended December 31 t, 2013) Thi i a free tranlation into Englih of the Statutory Auditor pecial report iued in French and i provided olely for the convenience of Englih peaking reader. Thi report hould be read in conjunction and contrued in accordance with French law and profeional auditing tandard applicable in France. It hould be undertood that the agreement reported on are only thoe provided by the French Commercial Code and the report doe not apply to thoe related party agreement decribed in IAS 24 or other equivalent accounting tandard. In our capacity a Statutory Auditor of your Company, we hereby preent our report on regulated agreement and commitment with third partie. It i our reponibility to communicate to you, baed on information provided to u, the principal term and condition of thee agreement and commitment brought to our attention or which we may have identified a part of our engagement, without expreing an opinion on their uefulne or their merit or identifying uch other agreement or commitment, if any. Under the proviion of article R. 225-31 of the French Commercial Code (Code de commerce), it i the reponibility of the hareholder to determine whether the agreement and commitment are appropriate and hould be approved. Where applicable, it i our reponibility to communicate to you the information puruant to article L. 225-31 of the French Commercial Code relating to agreement and commitment previouly approved by the Annual General Meeting during the year. We performed the procedure that we deemed neceary in accordance with profeional tandard applicable in France. Thee procedure conited in verifying that the information provided to u i conitent with the underlying document. AGREEMENTS AND COMMITMENTS TO BE AUTHORIZED BY THE ANNUAL GENERAL MEETING Agreement and commitment igned during the year Puruant to article L. 225-38 of the French Commercial Code, we hereby advie you that we have not been informed of any agreement or commitment igned during the year to be approved by the Annual General Meeting. Agreement and commitment igned ince the year-end We have been made aware of the following agreement, which ha been igned ince the December 31, 2013 year-end and which received the preliminary approval of the Board of Director on February 10, 2014. Agreement with Netlé, hareholder of more than 10% of L Oréal and haring common member of the Board of Director On February 10, 2014, the Board of Director of L Oréal approved, by unanimou deciion of it voting member and prior to it authorization, the purchae by L Oréal of 48.5 million of it own hare from Netlé, repreenting 8% of it hare capital, a part of it hare buy-back programme, and decided to immediately cancel all the hare o purchaed. The buy-back amount to 6,037,280,000. The price per L Oréal hare retained for thi tranaction i the average of it cloing price between Monday November 11, 2013 and Monday February 10, 2014, namely 124.48. Thi buy-back i ubject to the condition precedent that Netlé acquire all the hare held by L Oréal in the companie of the Galderma group. Thi condition, tipulated for the benefit of Netlé, may be waived by the latter. The tranfer of the hare purchaed and the ale of Galderma would occur concurrently. The individual concerned by thi agreement are the member common to both the L Oréal and Netlé Board of Director, Mer Peter Brabeck-Letmathe, Paul Bulcke and Jean-Pierre Meyer who, puruant to the applicable legal requirement, did not participate in the vote of the Board of Director approving the hare buy-back agreement, and Mr. Chritiane Kuehne, who did not wih to take part in the vote due to her employment contract at Netlé. 84 REGISTRATION DOCUMENT / L ORÉAL 2013

CORPORATE GOVERNANCE STATUTORY AUDITORS SPECIAL REPORT ON REGULATED AGREEMENTS AND COMMITMENTS WITH THIRD PARTIES Netlé, who own more than 10% of the L Oréal voting right and ha concluded the hare buy-back agreement with L Oréal, i deemed to be an intereted hareholder according to the applicable law. AGREEMENTS AND COMMITMENTS AUTHORIZED IN PRIOR YEARS BY THE ANNUAL GENERAL MEETING Puruant to article R. 225-30 of the French Commercial Code, we have been advied that the following agreement, previouly approved by the Annual General Meeting of April 27, 2010 and mentioned in our Statutory Auditor pecial report of February 19, 2010, ha remained in effect during the year. 2 Agreement concerning Jean-Paul Agon Supenion of Mr. Jean-Paul Agon employment contract during the period of hi corporate office. Elimination of all right to indemnification in repect of Mr. Jean-Paul Agon corporate office. In the event of departure, and depending on the reaon, Mr. Jean-Paul Agon would only be paid the dimial indemnitie, except in the event of gro miconduct or gro negligence, or retirement indemnitie in the event of voluntary retirement or retirement at the Company requet due puruant to the employment contract that ha been upended. Thee indemnitie, which are attached olely to termination of the employment contract and in trict application of the National Collective Bargaining Agreement for the Chemical Indutrie and the company-level agreement applicable to all L Oréal executive, are due in any event puruant to the public policy rule of French labour law. They are not ubject to any condition other than thoe provided for by the National Collective Bargaining Agreement for the Chemical Indutrie or the above-mentioned company-level agreement. The ame applie to the non-competition claue and the related financial conideration. Remuneration in repect of the corporate office will in no event be taken into conideration for calculation of the indemnitie due puruant to the collective bargaining agreement and the company-level agreement applicable to all L Oréal executive. Mr. Jean-Paul Agon will continue to benefit from the defined benefit penion cheme currently applicable to the Group enior manager. Term and condition relating to the upenion of Mr. Jean-Paul Agon employment contract: The reference remuneration to be ued to calculate all the right attached to the employment contract and in particular to compute the penion under the defined benefit cheme will be baed on the amount of remuneration under the employment contract when it wa upended in 2006, namely fixed remuneration of 1,500,000 and variable remuneration of 1,250,000. Thi reference remuneration i reviewed every year by applying the revaluation coefficient in repect of alarie and penion contribution publihed by the French State penion fund. A of January 1, 2014, the fixed remuneration amount to 1,671,000 and the variable remuneration to 1,392,500; The length of ervice applied will take into conideration hi entire career, including the year during which he wa Chairman and Chief Executive Officer. Mr. Jean-Paul Agon will maintain the tatu of enior manager throughout the period of hi corporate office, o that he may continue to benefit from the additional ocial protection cheme and in particular the employee benefit and healthcare cheme available to the Company employee. Neuilly-ur-Seine, February 21 t, 2014 The Statutory Auditor PricewaterhoueCooper Audit Gérard Morin Deloitte & Aocié David Dupont-Noel REGISTRATION DOCUMENT / L ORÉAL 2013 85

86 REGISTRATION DOCUMENT / L ORÉAL 2013

3 KEY FIGURES AND COMMENTS ON THE 2013 FINANCIAL YEAR 3.1. THE GROUP S BUSINESS ACTIVITIES IN 2013 * 88 3.1.1. Overview of the reult for 2013 88 3.1.2. Conolidated net ale 88 3.1.3. Reult 91 3.2. FINANCIAL HIGHLIGHTS 94 3.2.1. 2013: further trengthening of worldwide poition and record operating margin 94 3.2.2. 2013 conolidated reult 96 3.2.3. Conolidated ale by geographic zone and by buine egment 98 3.2.4. Simplified conolidated income tatement 101 3.2.5. Source and application of fund 101 3.2.6. Financial ratio 101 3.2.7. L Oréal 2007-2013 102 3.3. SIGNIFICANT, RECENT EVENTS AND PROSPECTS 102 3.3.1. Significant event of 2013 102 3.3.2. Significant event that have occurred ince the beginning of 2014 103 3.3.3. Propect 104 * Thi information form an integral part of the Annual Financial Report a provided for in Article L. 451-1-2 of the French Monetary and Financial Code. REGISTRATION DOCUMENT / L ORÉAL 2013 87

3 THE KEY FIGURES AND COMMENTS ON THE 2013 FINANCIAL YEAR GROUP S BUSINESS ACTIVITIES IN 2013 2013 wa another year of robut growth for L Oréal. The Group achieved utained ale growth and, in a market whoe expanion wa more moderate in 2013, accelerated it outperformance veru the market. L Oréal i trengthening it worldwide poition acro all Diviion and all geographic zone. The Conumer Product Diviion, L Oréal Luxe and the Active Cometic Diviion are maintaining a good momentum, thank to the performance of their major brand. The Profeional Product Diviion i gradually improving. In term of geographic zone, the Group growth i well balanced: Wetern Europe remain very olid, North America recorded another year of growth and market hare gain in a le buoyant market context, and the New Market excluding Japan poted double-digit growth. Latly, profitability reached a record level in 2013, confirming the relevance of our buine model. The quality of thee reult illutrate the Group ability to continue to deliver utainable and profitable growth. 3.1. THE GROUP S BUSINESS ACTIVITIES IN 2013 3.1.1. Overview of the reult for 2013 2013 ale: 22.98 billion euro (+2.3% baed on reported figure, +5.0% like-for-like) Operating profit: 3,875 billion euro, repreenting 16.9% of ale (+4.8%) Net profit after non-controlling interet: +3.2% 3.1.2. Conolidated net ale Like-for-like, i.e. baed on a comparable tructure and identical exchange rate, the ale trend of the L Oréal Group wa +5.0%. The net impact of change in conolidation amounted to +1.0%. Currency fluctuation had a negative impact of -3.7%. Growth at contant exchange rate wa +6.0%. Baed on reported figure, the Group ale, at December 31 t, 2013, amounted to 22.98 billion euro, an increae of +2.3%. Net earning per hare (1) : +4.4% at 5.13 Increae in dividend: +8.7% at 2.50 per hare (2) (1) Diluted net earning per hare baed on net profit excluding non-recurring item attributable to the Group. (2) Propoed at the Annual General Meeting of April 17 th, 2014. 88 REGISTRATION DOCUMENT / L ORÉAL 2013

KEY FIGURES AND COMMENTS ON THE 2013 FINANCIAL YEAR THE GROUP S BUSINESS ACTIVITIES IN 2013 SALES BY OPERATIONAL DIVISION AND BY GEOGRAPHIC ZONE 2012/2013 progreion million 2011 2012 2013 Like-for-like Reported figure BY OPERATIONAL DIVISION Profeional Product 2,813.8 3,002.6 2,973.8 +2.1% -1.0% Conumer Product 9,835.2 10,713.2 10,873.2 +4.9% +1.5% L Oréal Luxe 4,800.1 5,568.1 5,865.2 +6.8% +5.3% Active Cometic 1,421.7 1,528.0 1,602.4 +7.8% +4.9% Cometic Total 18,870.8 20,811.9 21,314.5 +5.2% +2.4% BY GEOGRAPHICAL ZONE Wetern Europe 7,246.6 7,399.6 7,483.4 +1.9% +1.1% North America 4,406.2 5,210.7 5,356.1 +3.8% +2.8% New Market, of which: 7,218.0 8.201.6 8,475.0 +9.4% +3.3% Aia, Pacific 3,619.5 4,287.0 4,382.2 +8.4% +2.2% Latin America 1,680.9 1,826.6 1,894.5 +11.5% +3.7% Eatern Europe (1) 1,527.4 1,624.6 1,693.3 +8.2% +4.2% Africa, Middle-Eat (1) 390.2 463.4 505.1 +14.3% +9.0% Cometic Total 18,870.8 20,811.9 21,314.5 +5.2% +2.4% The Body Shop 767.6 855.3 835.8 +1.2% -2.3% Dermatology (2) 704.7 795.5 826.3 +3.9% +3.9% GROUP TOTAL 20,343.1 22,462.7 22,976.6 +5.0% +2.3% 3 (1) A of July 1 t, 2013, Turkey and Irael, which were previouly included in the Africa, Middle Eat zone, were tranferred to the Eatern Europe zone. All figure for earlier period have been retated to allow for thi change. (2) Group hare, i.e. 50%. PROFESSIONAL PRODUCTS The Profeional Product Diviion recorded growth of +2.1% likefor-like and -1.0% baed on reported figure in a channel that wa till affected by declining alon viit in the mature market, but remain dynamic in the New Market. In the very buoyant luxury haircare egment, Kératae, the Diviion number one brand in term of growth contribution, had a very good year, thank to Couture Styling and Initialite. Haircare i continuing to grow trongly, thank to the ucce of the hair oil and the launch of Biolage Advanced by Matrix. Hair colourant have been driven by Hairchalk from L Oréal Profeionnel, the firt-ever make-up for hair, and the ramp-up of ODS 2 technology. Eie continue to grow; it recent launch, Eie Gel, i a reounding ucce. In geographic term, the Diviion brand are maintaining their poition in mature market which remain lacklutre. The Diviion i growing trongly acro all the New Market excluding Japan. Brazil, Ruia and India were amongt the larget contributor to growth. CONSUMER PRODUCTS The Conumer Product Diviion poted growth of +4.9% likefor-like and +1.5% baed on reported figure. The Diviion i outperforming the global market and winning market hare. The trend of all the Diviion brand were favourable, and all grew fater than the market. Growth at L Oréal Pari i accelerating, and the brand i trengthening it worldwide leaderhip, thank to a very trong performance in haircare. The brand i alo growing trongly in facial kincare with Age Perfect Cell Renew and ha chalked up uccee in hair colourant with Préférence Wild Ombré and in make-up with Butterfly macara. Garnier recorded double-digit growth in hair colourant, thank to Olia. The brand growth in facial kincare i continuing with the BB cream. Maybelline poted trong growth in the liptick category with the launch of Rouge Elixir and in more acceible categorie uch a nail varnihe and eyeliner. Softheen.Caron i making progre thank to the launch of Amla Legend. The Diviion had a very good year in Wetern Europe, where it continue to improve it leaderhip poition. In North America, buine wa affected by the market lowdown and the adjutment in ditributor inventorie, but ell-out increaed two and a half time fater than the market. Brazil, India, Indoneia, Turkey and the Gulf tate all performed very well. REGISTRATION DOCUMENT / L ORÉAL 2013 89

3 THE KEY FIGURES AND COMMENTS ON THE 2013 FINANCIAL YEAR GROUP S BUSINESS ACTIVITIES IN 2013 L ORÉAL LUXE After a trong end to the year, L Oréal Luxe grew by +6.8% likefor-like and +5.3% baed on reported figure. The Diviion i ignificantly outperforming elective market growth. Lancôme delivered another olid year in fragrance with La Vie et Belle, which etablihed itelf a a top eller, and in kincare it ale were highly dynamic, with the innovative Advanced Génifique and Dreamtone. Aerting it tatu a a major luxury brand, Giorgio Armani poted a very trong year thank to the ucce of it women fragrance Sì, already in the European top 5, and to it Armani Beauty line, which made a real breakthrough thi year. Yve Saint Laurent i extending it reach in Aia, particularly in China, and ha a global ucce on it hand with Verni à Lèvre Rebel Nude. Kiehl, Clarionic and Urban Decay are recording very trong growth on all continent. Their latet launche - repectively Super Multicorrective Cream, Pedi Sonic Foot Tranformation Sytem and the Naked 3 make-up palette - have all been big uccee. A for the deigner fragrance brand, Ralph Lauren i proving extremely ucceful in North America and Latin America with the launch of Polo Red. Viktor&Rolf continued it trong growth. Over the full year, L Oréal Luxe outperformed the market in all it major zone, and in Travel Retail. ACTIVE COSMETICS In 2013, the Diviion recorded trong ale growth of +7.8% like-forlike and +4.9% baed on reported figure, clearly trengthening it poition a the world leader in the dermocometic market. The Vichy brand i going from trength to trength in kincare with the continuing development of it Idealia franchie (BB Cream, Life Serum) and the launch of Néovadiol Magitral. In the haircare egment, Derco Neogenic, a treatment which redenifie the hair, i proving ucceful. La Roche-Poay poted another year of double-digit growth, with a erie of uccee in all region of the world. The brand growth i being driven by the olid roll-out of benchmark franchie precribed by dermatologit, uch a Effaclar and Lipikar, and the more recent launche of Redermic R, Subtiane Serum and Io Urea MD. SkinCeutical i achieving good performance, and i continuing it rapid expanion. The brand i launching a bodycare range to be ued in aociation with aethetic procedure, and i thu beginning the conquet of a new egment. Acro the region, the Diviion trend remain favourable in Wetern Europe, growing twice a fat a the market. The New Market are proving highly dynamic, particularly in Brazil and China. MULTI-DIVISION SUMMARY BY GEOGRAPHIC ZONE Wetern Europe In a context that remained difficult, particularly in Southern Europe, growth came out at +1.9% like-for-like and +1.1% baed on reported figure. All the Diviion are making market hare gain, particularly in France, Germany and the United Kingdom. L Oréal Luxe ale are being driven by Lancôme, Giorgio Armani and Kiehl, and Conumer Product Diviion ale by Garnier and L Oréal Pari. The ucce of La Roche-Poay and Vichy i enabling the Active Cometic Diviion to reinforce it number one poition. North America Sale advanced by +3.8% like-for-like and by +2.8% baed on reported figure. In a market that wa le dynamic than in 2012, the Group made market hare gain. The Conumer Product Diviion conolidated it market leader poition thank to trong growth at L Oréal Pari with the ucce of Advanced Hair Care. L Oréal Luxe outperformed it market, thank in particular to the very good reult of it American brand Urban Decay, Clarionic and Kiehl. In the Profeional Product Diviion, the launche of Diamond Oil by Redken and Eie Gel are very promiing. New Market Aia, Pacific: L Oréal recorded annual growth of +8.4% likefor-like and +2.2% baed on reported figure. Excluding Japan, like-for-like growth reached +9.5%. Except for South Korea, the market remain dynamic, depite lower growth in China and India. Market hare i increaing in thi zone, reflecting in particular the good performance of L Oréal Pari in China in the facial kincare and haircare categorie, and of Garnier in the ame categorie in South-Eat Aia. L Oréal i alo performing very well in luxury product, thank to the trong growth of Lancôme and Kiehl and the roll-out of Yve Saint Laurent and Clarionic. Latin America: L Oréal recorded growth of +11.5% like-forlike and +3.7% baed on reported figure. The Conumer Product Diviion i driven by Bi-O deodorant by Garnier, Maybelline make-up, the ucce of the BB cream at L Oréal Pari and haircare, with the renewal of Elvive and Fructi. The Active Cometic Diviion very clearly outperformed it market. In Brazil, all the Diviion made market hare gain. Eatern Europe: Sale increaed by +8.2% like-for-like and +4.2% baed on reported figure, ignificantly outperforming the market trend. The Conumer Product Diviion i winning market hare once again, thank to Olia hair colourant by Garnier and Dermo-Expertie kincare with Revitalift Laer. The Profeional Product Diviion and L Oréal Luxe made market hare gain. The Active Cometic Diviion i growing fater than the market in Ruia, thank to the dynamic ale of La Roche-Poay. Africa, Middle Eat: Sale increaed by +14.3% like-for-like and +9.0% baed on reported figure, reflecting the good performance of the new ubidiary in Saudi Arabia, trong growth in the Gulf tate, Egypt and Pakitan and the recent acquiition of Interbeauty in Kenya. All the Diviion recorded 90 REGISTRATION DOCUMENT / L ORÉAL 2013

KEY FIGURES AND COMMENTS ON THE 2013 FINANCIAL YEAR THE GROUP S BUSINESS ACTIVITIES IN 2013 double-digit growth in 2013. Performance were particularly encouraging for Lancôme, Giorgio Armani, Kératae, Garnier, Maybelline and Vichy, all of which poted growth ignificantly higher than the market. THE BODY SHOP SALES The Body Shop recorded +1.2% like-for-like ale and -2.3% baed on reported figure. The trategic body, kincare and makeup categorie grew driven by iconic range and innovation uch a Honeymania bodycare with organic Community Fair Trade honey from Ethiopia. The Body Shop ecured a good Chritma trading around it Give Joy programme. The Body Shop multi-channel trategy delivered utained growth in e-commerce, particularly in the United Kingdom and in the United State. Geographically, the main market which contributed to the brand development were South Aia and Northern Europe. GALDERMA SALES Galderma ale increaed by +3.9% like-for-like and +3.9% baed on reported figure, confirming the ucce of it innovative medical olution in it three field of activity. In the precription drug market, where competition from generic i having an impact on the performance of Galderma in Europe and the United State, Epiduo poted trong growth, confirming it poition a the world number one precription product in the topical acne treatment market. Mirvao, a major innovation in the treatment of roacea-aociated erythema, wa uccefully launched in the United State. The portfolio of elf-medication product continue to grow trongly, thank in particular to Cetaphil and Loceryl. The good performance of the aethetic and corrective medical olution are being driven by the trong growth of Azzalure and the growth of Retylane. The particularly olid growth recorded in the New Market, notably in Aia, Pacific, Ruia and Latin America, i boltering the global expanion of Galderma. 3 3.1.3. Reult OPERATING PROFITABILITY AND CONSOLIDATED INCOME STATEMENT 2011 2012 2013 million % 2011 ale million % 2012 ale million % 2013 ale Sale 20,343 100% 22,463 100% 22,977 100% Cot of ale -5,851 28.8% -6,588 29.3% -6,602 28.7% Gro profit 14,492 71.2% 15,875 70.7% 16,375 71.3% Reearch and development expene -720 3.5% -791 3.5% -857 3.7% Advertiing and promotion expene -6,292 30.9% -6,776 30.2% 6,886 30.0% Selling, general and adminitrative expene -4,187 20.6% -4,611 20.5% 4,757 20.7% OPERATING PROFIT 3,293 16.2% 3,697 16.5% 3,875 16.9% Gro profit, at 16,375 million euro, came out at 71.3% of ale, compared with 70.7% in 2012, that i an improvement of 60 bai point. Thi improved figure reflect on the one hand the poitive effect of improvement in the production cot of product and in the product mix effect, a well a currency fluctuation, and on the other hand, the negative impact of the conolidation of the American companie Urban Decay and Emiliani. Reearch expene increaed trongly at +8.4% and thu increaed a a percentage of ale from 3.5% to 3.7%. Advertiing and promotion expene came out at 30% of ale, almot identical to the 2012 level. Excluding acquiition, expene remained table a a percentage of ale. Selling, general and adminitrative expene, at 20.7% of ale, came out lightly higher, by 20 bai point, than in 2012. Overall, operating profit at 3,875 million euro, increaed by 4.8% at 16.9% of ale. On a contant exchange rate bai, operating growth would have been +7.8%. REGISTRATION DOCUMENT / L ORÉAL 2013 91

3 THE KEY FIGURES AND COMMENTS ON THE 2013 FINANCIAL YEAR GROUP S BUSINESS ACTIVITIES IN 2013 OPERATING PROFIT BY BRANCH AND BY DIVISION 2011 2012 2013 million % 2011 ale million % 2012 ale million % 2013 ale By Operational Diviion Profeional Product 579 20.6% 615 20.5% 610 20.5% Conumer Product 1,859 18.9% 2,051 19.1% 2,167 19.9% L Oréal Luxe 926 19.3% 1,077 19.3% 1,174 20.0% Active Cometic 287 20.2% 311 20.4% 340 21.2% Cometic Diviion total 3,651 19.3% 4,054 19.5% 4,291 20.1% Non-allocated (1) -546-2.9% -577-2.8% -605-2.8% Cometic branch total 3,105 16.5% 3,477 16.7% 3,686 17.3% The Body Shop 68 8.9% 77 9.1% 72 8.6% Dermatology branch (2) 120 17.0% 143 17.9% 117 14.1% GROUP 3,293 16.2% 3,697 16.5% 3,875 16.9% (1) Non-allocated = Central group expene, fundamental reearch expene, tock option and free grant of hare expene and micellaneou item. A a % of cometic ale. (2) Group hare, i.e. 50%. The profitability of the Profeional Product Diviion at 20.5% i in line with previou year. The profitability of the Conumer Product Diviion, at 19.9%, improved by 80 bai point. The profitability of L Oréal Luxe grew by 70 bai point. Active Cometic once again improved it profitability, which amounted to 21.2%. The profitability of The Body Shop declined by 50 bai point in 2013 to 8.6%. Finally, the profitability of Galderma, at 14.1%, reflect the impact of a difficult year in the United State. PROFITABILITY BY GEOGRAPHIC ZONE Operating profit 2011 2012 2013 million % 2011 ale million % 2012 ale million % 2013 ale Wetern Europe 1,513 20.9% 1,576 21.3% 1,659 22.2% North America 810 18.4% 960 18.4% 1,003 18.7% New Market 1,328 18.4% 1,518 18.5% 1,629 19.2% COSMETICS ZONES TOTAL (1) 3,651 19.3% 4,054 19.5% 4,291 20.1% (1) Before non-allocated. Profitability in Wetern Europe improved by 90 bai point at 22.2%. Profitability in North America increaed by 30 bai point at 18.7%. Profitability in the New Market increaed by 70 bai point at 19.2%. NET EARNINGS PER SHARE (1) : 5.13 million 2011 2012 2013 Operating profit 3,293 3,697 3,875 Finance Cot excluding dividend received -25-11 -43 Sanofi dividend 295 313 328 Pre-tax profit excluding non-recurring item 3,563 4,000 4,160 Income tax excluding non-recurring item -978-1,025-1,039 Non-controlling interet -2.5-2.7-3.2 Net profit excluding non-recurring item after non-controlling interet (2) 2,583 2,972 3,117 EPS (1) ( ) 4.32 4.91 5.13 Diluted average number of hare 597,633,103 605,305,458 608,001,407 (1) Diluted net earning per hare excluding non-recurring item after non-controlling interet. (2) Non-recurring item include mainly capital gain and loe on long-term aet dipoal, impairment of long-term aet, retructuring cot and element relating to identified operational income and expene, non-recurring and ignificant regarding the conolidated performance. See note 10 of the Conolidated Financial Statement on page 127 to 129. 92 REGISTRATION DOCUMENT / L ORÉAL 2013

KEY FIGURES AND COMMENTS ON THE 2013 FINANCIAL YEAR THE GROUP S BUSINESS ACTIVITIES IN 2013 Total finance cot amounted to 43 million euro. Dividend from Sanofi amounted to 328 million euro. Income tax excluding non-recurring item amounted to 1,039 million euro, repreenting a rate of 25%, lightly below the 2012 rate of 25.6%. Net profit excluding non-recurring item after non-controlling interet amounted to 3,117 million euro. Net earning per hare, at 5.13 euro, increaed by 4.4%. NET PROFIT AFTER NON-CONTROLLING INTERESTS: 2,958 MILLION million 2011 2012 2013 Evolution 2012/2013 Net profit excluding non-recurring item after non-controlling interet 2,583 2,972 3,117 Non-recurring item net of tax -145-104 -159 Net profit after non-controlling interet 2,438 2,868 2,958 +3.2% Diluted earning per hare ( ) 4.08 4.74 4.87 3 After allowing for non-recurring item, repreenting in 2013 a charge, net of tax, of 159 million euro, net profit after noncontrolling interet amounted to 2,958 million euro, an increae of 3.2%. CASH FLOW STATEMENT, BALANCE SHEET AND NET FINANCIAL SITUATION Gro cah flow amounted to 3,906 million euro, an increae of 6.7%. The working capital requirement increaed, in 2013, by 156 million euro. Inventorie increaed lightly a a percentage of ale, riing from 9.1% at end-2012 to 9.4% at end-2013. Trade account receivable declined lightly, from 14.3% of ale at end-2012 to 14.2% at end-2013. Invetment, at 1,060 million euro, amounted to 4.6% of ale, lightly up on 2012, when they amounted to 4.3% of ale. A a reult, operating cah flow, at 2,690 million euro, increaed by 4.4%. After dividend payment and acquiition (primarily Vogue, InterConumer Product, Emporio Body Store and Spirig), the Group recorded, at December 31 t, 2013, a net cah urplu of 2,215 million euro, compared with 1,575 million euro at end- 2012. The balance heet i very olid. The reinforcement of hareholder equity compared with end-2012 i mainly the reult of profit allocated to reerve and the net increae in value of the Sanofi hare, valued at market price. PROPOSED DIVIDEND AT THE ANNUAL GENERAL MEETING OF APRIL 17 th, 2014 The Board of Director ha decided to propoe to the Annual General Meeting of April 17 th, 2014 the payment of a dividend of 2.50 per hare, an increae of +8.7% compared with 2013. Thi dividend will be paid on May 5 th, 2014 (ex-dividend date: April 29 th, 2014 at 0:00 a.m., Pari time). REGISTRATION DOCUMENT / L ORÉAL 2013 93

3 FINANCIAL KEY FIGURES AND COMMENTS ON THE 2013 FINANCIAL YEAR HIGHLIGHTS 3.2. FINANCIAL HIGHLIGHTS 3.2.1. 2013: further trengthening of worldwide poition and record operating margin CONSOLIDATED SALES ( million) 2013 CONSOLIDATED SALES BY CURRENCY (1) (a %) 20,343 22,463 22,977 2011 2012 2013 26.8% 23.7% 7.1% 6.1% 3.8% 3.6% 3.2% 3.1% 1.9% 1.8% Euro US dollar Chinee yuan Pound terling Hong Kong dollar Brazilian real Ruian rouble Canadian dollar Japanee yen Mexican peo CONSOLIDATED SALES BY BRANCH (2) ( million) 2011 2012 2013 Cometic 18,871 20,812 21,315 The Body Shop 767 855 836 Dermatology (3) 705 796 826 OPERATING PROFIT ( million) PRE-TAX PROFIT EXCLUDING NON-RECURRING ITEMS (4) ( million) NET PROFIT EXCLUDING NON-RECURRING ITEMS AFTER NON-CONTROLLING INTERESTS (4) ( million) 3,293 3,697 3,875 3,563 4,000 4,160 2,583 2,972 3,117 2011 2012 2013 2011 2012 2013 2011 2012 2013 (1) Breakdown of conolidated ale in the main currencie in 2013, i.e. 81.1% of conolidated ale. (2) The Group buine i compoed of the Cometic, The Body Shop and dermatology branche. (3) Group hare, i.e. 50%. (4) Non-recurring item include mainly capital gain and loe on long-term aet dipoal, impairment of long-term aet, retructuring cot and element relating to identified operational income and expene, non-recurring and ignificant regarding the conolidated performance. See note 10 of the 2012 Conolidated Financial Statement on page 127 to 129. 94 REGISTRATION DOCUMENT / L ORÉAL 2013

KEY FIGURES AND COMMENTS ON THE 2013 FINANCIAL YEAR FINANCIAL HIGHLIGHTS 2013 CONSOLIDATED SALES OF THE COSMETICS BRANCH BY DIVISION BY BUSINESS SEGMENT BY GEOGRAPHIC ZONE 51% 7.5% 27.5% 14% Conumer Product Active Cometic L'Oréal Luxe Profeional Product 29.7% 21.7% 20.7% 13.8% 9.5% 4.6% Skincare Make-up Haircare Hair Colourant Perfume Other (1) 35.1% Wetern Europe 25.1% North America 39.8% New Market Of which: 20.6% Aia, Pacific 8.9% Latin America 7.9% Eatern Europe 2.4% Africa, Middle Eat 3 A SOLID BALANCE SHEET (2) ( million) NET DEBT 26,864 29,531 31,298 26,864 29,531 31,298 Non-current aet 19,141 21,321 21,944 17,627 20,925 22,643 Shareholder equity Current aet 6,070 6,386 6,747 2,049 1,148 2,189 248 1,967 393 Non-current liabilitie Debt (current and non-current) Cah and cah equivalent 1,652 1,823 2,607 6,039 6,168 6,296 2011 2012 2013 2011 2012 2013 Current liabilitie NET DEBT SHORT-TERM RATINGS 12.31.2011 12.31.2012 12.31.2013 Net cah flow (3) ( million) 504 1,575 2,215 (4) Net financial debt/equity -2.9% -7.5% -9.8% A-1 + STANDARD & POOR S JUNE 2013 PRIME 1 Moody JUNE 2013 F1 + Fitch Rating AUGUST 2013 STOCK MARKET CAPITALISATION (in billion euro) WORKFORCE (workforce at December, 31 t ) 12.31.2011 48.66 602,984,082 68,900 72,600 77,500 12.31.2012 63.86 608,810,827 12.31.2013 77.37 605,901,887 Stock market capitaliation (in billion euro) Number of hare 2011 2012 2013 (1) Other include hygiene product, ale made by American ditributor with brand outide of the Group. (2) The balance heet at 12.31.2011 and 12.31.2012 have been retated to allow for the change in accounting method relating to revied IAS 19. (3) Net cah flow = cah and cah equivalent - current and non-current debt. (4) Net cah urplu i of +2,215 million euro. REGISTRATION DOCUMENT / L ORÉAL 2013 95

3 FINANCIAL KEY FIGURES AND COMMENTS ON THE 2013 FINANCIAL YEAR HIGHLIGHTS 3.2.2. 2013 conolidated reult SALES AND OPERATING PROFIT BY BRANCH (1) Conolidated ale 2012/2013 Evolution million 2011 2012 2013 Like-for-like Reported figure Cometic 18,871 20,812 21,315 +5.2% +2.4% The Body Shop 767 855 836 +1.2% -2.3% Dermatology (2) 705 796 826 +3.9% +3.9% GROUP TOTAL 20,343 22,463 22,977 +5.0% +2.3% Operating profit million 2011 2012 2013 2013 weight Evolution baed on reported ale % of ale Cometic 3,105 3,477 3,686 95.1% +6.0% 17.3% The Body Shop 68 77 72 1.9% -6.5% 8.6% Dermatology (2) 120 143 117 3.0% -18.2% 14.1% GROUP TOTAL 3,293 3,697 3,875 100% +4.8% 16.9% SALES AND OPERATING PROFIT OF THE COSMETICS BRANCH BY DIVISION Conolidated ale 2012/2013 Evolution million 2011 2012 2013 2013 weight Like-for-like Reported figure Profeional Product 2,814 3,003 2,974 14.0% +2.1% -1.0% Conumer Product 9,835 10,713 10,873 51.0% +4.9% +1.5% L Oréal Luxe 4,800 5,568 5,865 27.5% +6.8% +5.3% Active Cometic 1,422 1,528 1,603 7.5% +7.8% +4.9% TOTAL COSMETICS SALES 18,871 20,812 21,315 100% +5.2% + 2.4% Operating profit 2011 2012 2013 million % 2011 ale million % 2012 ale million % 2013 ale Profeional Product 579 20.6% 615 20.5% 610 20.5% Conumer Product 1,859 18.9% 2,051 19.1% 2,167 19.9% L Oréal Luxe 926 19.3% 1,077 19.3% 1,174 20.0% Conumer Product 287 20.2% 311 20.4% 340 21.2% TOTAL COSMETICS DIVISION 3,651 19.3% 4,054 19.5% 4,291 20.1% Non-allocated (3) -546-2.9% -577-2.8% -605-2.8% TOTAL COSMETICS SALES 3,105 16.5% 3,477 16.7% 3,686 17.3% (1) The Group buine i compoed of the Cometic, The Body Shop and dermatology branche. (2) Group hare, i.e. 50%. (3) Non-allocated item conit of the expene of Functional Diviion and fundamental reearch, tock option and free grant of hare cot, which are not allocated to the Cometic Diviion. Thi item alo include non-core activitie, uch a inurance, reinurance and banking. 96 REGISTRATION DOCUMENT / L ORÉAL 2013

KEY FIGURES AND COMMENTS ON THE 2013 FINANCIAL YEAR FINANCIAL HIGHLIGHTS SALES AND OPERATING PROFIT OF THE COSMETICS BRANCH BY GEOGRAPHIC ZONE Conolidated ale 2012/2013 Evolution million 2011 2012 2013 Like-for-like Reported figure Wetern Europe 7,247 7,400 7,484 +1.9% +1.1% North America 4,406 5,211 5,356 +3.8% +2.8% New Market, of which: 7,218 8,202 8,475 +9.4% +3.3% Aia, Pacific 3,619 4,287 4,382 +8.4% +2.2% Latin America 1,681 1,827 1,895 +11.5% +3.7% Eatern Europe 1,527 1,625 1,693 +8.2% +4.2% Africa, Middle Eat 390 463 505 +14.3% +9.0% TOTAL COSMETICS SALES 18,871 20,812 21,315 +5.2% +2.4% 3 Operating profit 2011 2012 2013 million % 2011 ale million % 2012 ale million % 2013 ale Wetern Europe 1,513 20.9% 1,576 21.3% 1,659 22.2% North America 810 18.4% 960 18.4% 1,003 18.7% New Market 1,328 18.4% 1,518 18.5% 1,629 19.2% TOTAL GEOGRAPHIC ZONES 3,651 19.3% 4,054 19.5% 4,291 20.1% Non-allocated (1) -546-2.9% -577-2.8% -605-2.8% TOTAL COSMETICS SALES 3,105 16.5% 3,477 16.7% 3,686 17.3% SALES OF THE COSMETICS BRANCH BY BUSINESS SEGMENT Conolidated ale 2012/2013 Evolution million 2011 2012 2013 Like-for-like Reported figure Skincare 5,257 6,052 6,329 +7.5% +4.6% Make-up 4,029 4,468 4,616 +4.5% +3.3% Haircare 4,057 4,371 4,422 +5.4% +1.2% Hair colourant 2,760 2,943 2,931 +3.7% -0.4% Perfume 1,840 2,010 2,029 +3.6% +0.9% Other (2) 928 968 987 +1.4% +2.0% TOTAL COSMETICS SALES 18,871 20,812 21,315 +5.2% +2.4% (1) Non-allocated item conit of the expene of Functional Diviion and fundamental reearch, tock option and free grant of hare cot, which are not allocated to the Cometic Diviion. Thi item alo include non-core activitie, uch a inurance, reinurance and banking. (2) Other include hygiene product, ale made by American ditributor with non-group brand. REGISTRATION DOCUMENT / L ORÉAL 2013 97

3 FINANCIAL KEY FIGURES AND COMMENTS ON THE 2013 FINANCIAL YEAR HIGHLIGHTS 3.2.3. Conolidated ale by geographic zone and by buine egment PROFESSIONAL PRODUCTS DIVISION Sale by geographic zone 2012/2013 Evolution million 2011 2012 2013 2013 Weight Like-for-like Reported figure Wetern Europe 977.6 981.6 965.3 32.5% -0.8% -1.7% North America 1,018.6 1,101.5 1,098.5 36.9% +0.0% -0.3% New Market 817.6 919.5 910.0 30.6% +8.4% -1.0% TOTAL 2,813.8 3,002.6 2,973.8 100% +2.1% -1.0% Sale by buine egment 2012/2013 Evolution million 2011 2012 2013 2013 Weight Like-for-like Reported figure Hair colourant 995.8 1,048.3 1,035.7 34.8% +2.2% -1.2% Styling and texture 322.8 317.3 304.3 10.2% +1.2% -4.1% Shampoo and haircare 1,495.2 1,637.0 1,633.9 55.0% +2.3% -0.2% TOTAL 2,813.8 3,002.6 2,973.8 100% +2.1% -1.0% CONSUMER PRODUCTS DIVISION Sale by geographic zone 2012/2013 Evolution million 2011 2012 2013 2013 Weight Like-for-like Reported figure Wetern Europe 3,686.2 3,783.0 3,846.1 35.4% +2.5% +1.7% North America 2,191.9 2,555.7 2,534.7 23.3% +2.8% -0.8% New Market 3,957.1 4,374.5 4,492.4 41.3% +8.4% +2.7% TOTAL 9,835.2 10,713.2 10,873.2 100% +4.9% +1.5% Sale by buine egment 2012/2013 Evolution million 2011 2012 2013 2013 Weight Like-for-like Reported figure Hair colourant 1,764.1 1,894.6 1,895.3 17.4% +4.6% +0.0% Haircare and tyling 2,455.4 2,650.8 2,712.9 25.0% +5.9% +2.3% Make-up 2,882.3 3,189.8 3,215.5 29.6% +4.0% +0.8% Skincare 2,266.7 2,487.8 2,534.7 23.3% +5.1% +1.9% Other 466.7 490.2 514.8 4.7% +5.4% +5.0% TOTAL 9,835.2 10,713.2 10,873.2 100% +4.9% +1.5% 98 REGISTRATION DOCUMENT / L ORÉAL 2013

KEY FIGURES AND COMMENTS ON THE 2013 FINANCIAL YEAR FINANCIAL HIGHLIGHTS L ORÉAL LUXE Sale by geographic zone 2012/2013 Evolution million 2011 2012 2013 2013 Weight Like-for-like Reported figure Wetern Europe 1,836.2 1,872.4 1,870.8 31.9% +0.6% -0.1% North America 1,064.8 1,393.0 1,560.0 26.6% +8.1% +12.0% New Market 1,899.1 2,302.7 2,434.4 41.5% +11.2% +5.7% TOTAL 4,800.1 5,568.1 5,865.2 100% +6.8% +5.3% Sale by buine egment 3 2012/2013 Evolution million 2011 2012 2013 2013 Weight Like-for-like Reported figure Skincare 1,991.8 2,481.1 2,647.6 45.1% +10.1% +6.7% Perfume 1,754.5 1,928.3 1,945.9 33.2% +3.7% +0.9% Make-up 1,053.8 1,158.7 1,271.7 21.7% +4.9% +9.7% TOTAL 4,800.1 5,568.1 5,865.2 100% +6.8% +5.3% ACTIVE COSMETICS DIVISION Sale by geographic zone 2012/2013 Evolution million 2011 2012 2013 2013 Weight Like-for-like Reported figure Wetern Europe 746.6 762.5 801.2 50.0% +5.4% +5.1% North America 130.9 160.6 162.9 10.2% +5.9% +1.4% New Market 544.2 604.9 638.3 39.8% +11.4% +5.5% TOTAL 1,421.7 1,528.0 1,602.4 100% +7.8% +4.9% Sale by buine egment 2012/2013 Evolution million 2011 2012 2013 2013 Weight Like-for-like Reported figure Skincare 1,092.8 1,181.7 1,240.2 77.4% +7.0% +5.0% Haircare 102.3 108.8 108.6 6.8% +20.1% -0.1% Make-up 90.8 92.7 97.0 6.1% +7.1% +4.7% Other 135.8 144.8 156.5 9.8% +6.4% +8.1% TOTAL 1,421.7 1,528.0 1,602.4 100% +7.8% +4.9% REGISTRATION DOCUMENT / L ORÉAL 2013 99

3 FINANCIAL KEY FIGURES AND COMMENTS ON THE 2013 FINANCIAL YEAR HIGHLIGHTS THE BODY SHOP Retail ale (1) 2012/2013 Evolution million 2011 2012 2013 2013 Weight Like-for-like Reported figure Wetern Europe 518.9 548.1 535.8 38.3% +0.0% -2.2% North America 175.5 184.8 173.2 12.4% -2.0% -6.3% New Market 649.9 737.6 689.6 49.3% +1.1% -6.5% TOTAL 1,344.3 1,470.5 1,398.6 100% +0.3% -4.9% Sale million 2011 2012 2013 2012/2013 Evolution Like-for-like Retail ale (1) 1,344.3 1,470.5 1,398.6 +0.3% Retail ale with a comparable tore bae (2) 1,207.3 1,316.2 1,250.2-0.7% CONSOLIDATED SALES 767.6 855.3 835.8 +1.2% Number of tore 12.31.2012 12.31.2013 Variation in 2013 Company owned tore 1,111 1,112 +1 Franchiee 1,726 1,807 +81 TOTAL NUMBER OF STORES 2,837 2,919 +82 GALDERMA (100% OF SALES) 2012/2013 Evolution million 2011 2012 2013 2013 Weight Like-for-like Reported figure Wetern Europe 376.4 397.4 479.6 29.0% +4.7% +20.7% North America 698.9 740.2 657.0 39.8% -8.2% -11.2% New Market 334.2 453.4 516.0 31.2% +23.9% +13.8% TOTAL 1,409.5 1,591 1,652.6 100% +3.9% +3.9% (1) Total ale to conumer through all channel, including franchiee and e-commerce. (2) Total conumer ale made by tore and e-commerce webite that were continuouly preent between January 1 t and December 31 t, 2013 and the ame tore and webite preent in 2011 and 2012, and for the ame period for 2011 and 2012, including franchiee. 100 REGISTRATION DOCUMENT / L ORÉAL 2013

KEY FIGURES AND COMMENTS ON THE 2013 FINANCIAL YEAR FINANCIAL HIGHLIGHTS 3.2.4. Simplified conolidated income tatement million 12.31.2011 12.31.2012 12.31.2013 % 2013 ale Sale 20,343.1 22,462.7 22,976.6 100.0% Gro profit 14,491.6 15,875.0 16,374.8 71.3% Reearch and development -720.5-790.5-857.0 3.7% Advertiing and promotion -6,291.6-6,776.3-6,886.2 30.0% Selling, general and adminitrative expene -4,186.9-4,610.9-4,756.8 20.7% Operating profit 3,292.6 3,697.3 3,874.8 16.9% Operational profit 3,196.3 3,573.5 3,739.6 Finance cot excluding dividend received -25.2-11.0-42.7 Sanofi dividend 295.6 313.4 327.5 Income tax -1,025.8-1,005.5-1,063.0 Non-controlling interet -2.5-2.7-3.2 Net profit attributable to owner of the Company 2,438.4 2,867.7 2,958.2 12.9% Non-recurring item (expene + / income -) +144.5 +104 +159.2 Net profit excluding non-recurring item after non-controlling interet * 2,582.9 2,971.7 3,117.5 13.6% Diluted earning per hare attributable to owner of the Company (euro) 4.08 4.74 4.87 Diluted earning per hare attributable to owner of the Company excluding non-recurring item (euro) 4.32 4.91 5.13 3 * Net profit excluding non-recurring item after non-controlling interet doe not include impairment of aet, retructuring cot, tax effect or non-controlling interet. 3.2.5. Source and application of fund ( million) Net profit 2,961 1,060 Invetment in tangible and intangible aet Depreciation, amortiation and proviion Capital gain or loe on dipoal of aet, change in deferred taxe and other 840 2,690 Operating cah flow 105 156 Change in working capital requirement Source Application Gro cah flow: 3,906 3.2.6. Financial ratio 2011 2012 2013 (% of ale) Operating profit/sale 16.2% 16.5% 16.9% (% of hareholder equity) Net profit excluding non-recurring item after non-controlling interet/ Opening hareholder equity 17.4% 16.9% 14.9% (% of hareholder equity) Net gearing (1) -2.9% -7.5% - 9.8% Gro cah flow/invetment 3.7x 3.8x 3.7x (1) Net gearing = Current and non-current debt Cah and cah equivalent Shareholder equity after non-controlling interet REGISTRATION DOCUMENT / L ORÉAL 2013 101

3 SIGNIFICANT, KEY FIGURES AND COMMENTS ON THE 2013 FINANCIAL YEAR RECENT EVENTS AND PROSPECTS 3.2.7. L Oréal 2007-2013 million 2007 (1) 2008 (1) 2009 2010 2011 (6) 2012 (6) 2013 Reult Conolidated ale 17,063 17,542 17,473 19,496 20,343 22,463 22,977 Operating profit 2,827 2,725 2,578 3,057 3,293 3,697 3,875 A a percentage of conolidated ale 16.6% 15.5% 14.8% 15.7% 16.2% 16.5% 16.9% Profit before tax and non-controlling interet 2,896 2,788 2,749 3,305 3,563 4,000 4,160 Net profit excluding non-recurring item after non-controlling interet 2,039 2,064 1,997 2,371 2,583 2,972 3,117 Net profit attributable to owner of the Company 2,656 1,948 1,792 2,240 2,438 2,868 2,958 Total dividend 843 862 899 1,082 1,212 1,397 1,523 Balance Sheet Non-current aet 17,030 16,380 17,350 17,048 19,141 21,321 21,944 Current aet excl. cah and cah equivalent 5,015 5,450 4,768 5,446 6,070 6,386 6,747 Cah and cah equivalent 1,087 1,077 1,173 1,550 1,652 1,823 2,607 Equity (2) 13,463 11,563 13,598 14,866 17,627 20,926 22,643 Net current and non-current debt (3) 2,373 3,700 1,958 41-504 -1,575-2,215 Gro cah flow 2,720 2,746 2,758 3,171 3,226 3,661 3,906 Per hare data ( ) Diluted earning per hare attributable to owner of the Company excluding non-recurring item 3.36 3.49 3.42 4.01 4.32 4.91 5.13 Dividend 1.38 1.44 1.50 1.80 2.00 2.30 2.50 (5) Share price at December 31 t (4) 97.98 62.30 78.00 83.08 80.70 104.90 127.70 Highet hare price during the year (4) 99.97 99.26 79.32 88.00 91.24 106.40 137.85 Lowet hare price during the year (4) 74.25 53.32 46.00 70.90 68.83 79.22 103.65 Diluted weighted average number of hare outtanding (4) 606,012,471 590,920,078 583,797,566 591,392,449 597,633,103 605,305,458 608,001,407 (1) The 2007 and 2008 balance heet have been retated according to change in accounting policie relating to advertiing and promotion expene, cutomer loyalty program and the immediate recognition in hareholder equity of actuarial gain and loe linked to employee benefit. (2) Plu non-controlling interet. (3) The net cah urplu i 1,575 million euro in 2012 and 2,215 million euro in 2013. (4) The L Oréal hare ha been lited in euro on the Pari Boure ince January 4 th, 1999, where it wa firt lited in 1963. The hare capital i 121,180,377.40 at December 31 t, 2013; the par value of one hare i 0.2. (5) Dividend propoed to the Annual General Meeting of April 17 th, 2014. (6) The 2011 and 2012 balance heet have been retated to allow for the change in accounting method relating to revied IAS 19. See chapter 4, note 1 Conolidated Financial Statement on page 112. 3.3. SIGNIFICANT, RECENT EVENTS AND PROSPECTS 3.3.1. Significant event of 2013 On January 10 th, 2013 L Oréal inaugurated it new R&I Centre in India, in Mumbai and Bangalore. On January 31 t, 2013 L Oréal finalied the acquiition of the Vogue group in Colombia. On February 11 th, 2013 the Board of Director decided on the implementation of a hare buyback programme for 500 million euro during the 1 t half of 2013. On February 27 th, 2013 Galderma finalied the acquiition of Spirig Pharma A.G. in Switzerland. On April 15 th, 2013, L Oréal announced the acquiition of the Health & Beauty buine of Interconumer Product Limited (ICP) in Kenya. On April 26 th, 2013, the Annual General Meeting of L Oréal hareholder approved the appointment a Director of M. Virginie Morgon and renewed the tenure a Director of M. Françoie Bettencourt Meyer, Mr. Peter Brabeck-Letmathe and Mr. Loui Schweitzer. 102 REGISTRATION DOCUMENT / L ORÉAL 2013

KEY FIGURES AND COMMENTS ON THE 2013 FINANCIAL YEAR SIGNIFICANT, RECENT EVENTS AND PROSPECTS On May 17 th, 2013, L Oréal announced everal appointment within it Executive Committee: Marc Meneguen wa appointed a Preident of the Conumer Product Diviion, Nicola Hieronimu wa appointed a Preident of the Selective Diviion (Luxe, Profeional Product, Active Cometic, The Body Shop). Frédéric Rozé wa appointed Executive Vice- Preident for the America Zone, which include North and Latin America. Alexandre Popoff wa appointed a Executive Vice-Preident for the Eatern Europe Zone. Jochen Zaumeil wa appointed a Executive Vice-Preident for the Wetern Europe Zone. Finally, Alexi Peraki-Valat wa appointed a Executive Vice-Preident for the Aia, Pacific Zone. Thee appointment were effective a of June 1 t, 2013. On Augut 15 th, 2013, L Oréal announced it intention to acquire all the hare of Magic Holding International Limited, a Chinee company, lited on the Hong Kong Stock Exchange, pecialied in cometic facial mak. On September 20 th, 2013, L Oréal India announced the acquiition of Cheryl Comeceutical, a company baed in Mumbai, pecialiing in profeional kin care product and treatment in beauty alon. On October 15 th, 2013 L Oréal announced the acquiition by The Body Shop of a majority take in Emporio Body Store in Brazil, with the option of increaing it hareholding to 80% by 2019. Following approval by the Brazilian anti-trut authority CADE, the acquiition wa completed on December 12 th. On October 17 th, 2013, L Oréal announced that it had been granted excluive negotiation right by Shieido for the acquiition of the Decléor and Carita brand. On November 19 th, 2013, Beauté Créateur, a ubidiary that ditribute brand pecific to the mail order buine, announced it intention to ceae it mail order activity during the firt half of 2014. On November 21 t, 2013, L Oréal announced that it wa creating a Group Travel Retail Diviion encompaing all the brand old in the Travel Retail channel, which pot particularly dynamic growth. On November 29 th, 2013, the Board of Director meeting chaired by Mr Jean-Paul Agon decided to buy back L Oréal hare for a maximum amount of 500 million euro between November 30 th and the end of the firt quarter of 2014. 3.3.2. Significant event that have occurred ince the beginning of 2014 3.3.2.1. PLANNED ACQUISITION OF MAGIC HOLDINGS Following the propoal made by L Oréal announced on Augut 15 th, 2013 to acquire all the hare of Magic Holding, International Ltd, a company lited on the Hong Kong Stock Exchange, the Minitry of Commerce of the People Republic of China (MOFCOM) authoried the tranaction in an announcement dated January 9 th, 2014. See alo note 26.3 in chapter 4 on page 155 (Conolidated Financial Statement). 3.3.2.2. STRATEGIC TRANSACTION APPROVED BY BOARDS OF NESTLÉ AND L ORÉAL Pari and Vevey, February 11 th, 2014 Netlé and L Oréal announced today that their repective Board of Director, in meeting held on February 10 th, 2014, have approved by unanimou deciion of their voting member a trategic tranaction for both companie under which L Oréal will buy 48.5 million of it own hare (8% of it hare capital) from Netlé. Thi buyback will be financed: Partially through the dipoal by L Oréal to Netlé of it 50% take in Swi dermatology pharmaceutical company Galderma (a 50/50 joint venture between L Oréal and Netlé) for an enterprie value of 3.1 billion euro (2.6 billion euro of equity value), paid by Netlé in L Oréal hare (21.2 million hare); For the remainder, correponding to 27.3 million L Oréal hare held by Netlé, in cah for an amount of 3.4 billion euro. The price per L Oréal hare retained for thi tranaction i the average of it cloing price between Monday November 11 th, 2013 and Monday February 10 th, 2014: 124.48 euro. All the hare bought back by L Oréal will be cancelled. Following the tranaction, Netlé take in L Oréal will be reduced from 29.4% to 23.29% of the hare capital and the Bettencourt Meyer family take in L Oréal will increae from 30.6% to 33.31%. In order to reflect the change of Netlé take in L Oréal governance, the number of Netlé repreentative on L Oréal Board of Director will be adjuted from 3 to 2 Director, and the ownerhip ceiling proviion of the hareholder agreement between Netlé and the Bettencourt Meyer family will apply to their repective new holding. The tranaction will be accretive by more than 5% on L Oréal recurring earning per hare on a full year bai. The buyback will be excluively financed with L Oréal available cah and through the iuance of commercial paper. It will not require the dipoal of Sanofi hare held by L Oréal. The tranaction i ubject to cutomary condition, including the prior conultation of Galderma and L Oréal work council and the clearance of relevant antitrut authoritie. It i expected to cloe before the end of the firt emeter of 2014. Mr. Peter Brabeck-Letmathe, Chairman of Netlé, aid: With thi propoed acquiition of 50% of Galderma, Netlé will purue it trategic development in Nutrition, Health, and Wellne, by expanding it activitie to medical kin treatment. In thi repect, Netlé will create a new centre of activitie in thi area, through a new entity: Netlé Skin Health SA. Galderma will be the foundation of thi entity which will be run by Galderma management. A a wholly owned ubidiary of Netlé, Galderma will have all the required mean for it development which will benefit to the Company, it employee a well a all other takeholder. 3 REGISTRATION DOCUMENT / L ORÉAL 2013 103

Following the decreae of it take in L Oréal, Netlé will continue to upport the development of L Oréal a in the pat 40 year. In thi context, Netlé will continue to act in concert with the Bettencourt Meyer family and the exiting agreement, adapted to the new ituation, will remain in place. Mr. Jean-Paul Agon, Chairman and Chief Executive Officer of L Oréal, aid: Thi tranaction repreent a very poitive trategic move for L Oréal, it employee and it hareholder. L Oréal will focu excluively on it Cometic buine and it Beauty for all miion, it univeraliation trategy and it ambition to win one billion new conumer. L Oréal will indeed benefit from a very ignificant and reinforced preence from the founding Bettencourt Meyer family, who will continue to fully upport the Company a it alway did in the pat. L Oréal will alo continue to benefit from the upport of Netlé, which ha alway been a loyal and contructive hareholder. 3.3.2.3. PLANNED ACQUISITION OF DECLÉOR AND CARITA On February 20 th, 2014, L Oréal and Shieido have finalied the contract for the acquiition by L Oréal of Decléor and Carita. Cloing will be effective pending remaining approval from regulatory authoritie. 3.3.3. Propect L Oréal i tarting 2014 with confidence, driven by it miion of Beauty for All, the power of it reearch and innovation, the trength of it portfolio of complementary brand and the globaliation of it major brand. In an economic context that i till marked by uncertaintie, particularly on the monetary front, L Oréal i confident in it ability to outperform the market once again in 2014, and to achieve another year of ale and profit growth. Latly, all of L Oréal hareholder will benefit from thi tranaction with an accretive impact on the Company earning, reulting from the buyback and ubequent cancellation of L Oréal hare held by Netlé. 104 REGISTRATION DOCUMENT / L ORÉAL 2013

4 2013 CONSOLIDATED FINANCIAL STATEMENTS * 4.1. COMPARED CONSOLIDATED INCOME STATEMENTS 106 4.2. CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 107 4.3. COMPARED CONSOLIDATED BALANCE SHEETS 108 4.4. CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY 109 4.5. COMPARED CONSOLIDATED STATEMENTS OF CASH FLOWS 110 4.6. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 111 Note 1 Accounting principle 111 Note 2 Change in the cope of conolidation 119 Note 3 Segment information 120 Note 4 Peronnel cot and number of employee 123 Note 5 Depreciation and amortiation expene 124 Note 6 Foreign exchange gain and loe 124 Note 7 Other operational income and expene 125 Note 8 Other financial income and expene 125 Note 9 Income tax 125 Note 10 Net profit attributable to owner of the company excluding non-recurring item Earning per hare 127 Note 11 Goodwill 130 Note 12 Other intangible aet 133 Note 13 Impairment tet on intangible aet 135 Note 14 Property, plant and equipment 136 Note 15 Non-current financial aet 137 Note 16 Inventorie 137 Note 17 Trade account receivable 138 Note 18 Other current aet 138 Note 19 Cah and cah equivalent 138 Note 20 Equity 139 Note 21 Pot-employment benefit, termination benefit and other long-term employee benefit 143 Note 22 Proviion for liabilitie and charge 147 Note 23 Borrowing and debt 149 Note 24 Derivative and expoure to market rik 150 Note 25 Other current liabilitie 154 Note 26 Off-balance heet commitment 154 Note 27 Change in working capital 155 Note 28 Impact of change in the cope of conolidation in the cah flow tatement 156 Note 29 Tranaction with related partie 156 Note 30 Fee accruing to Auditor and member of their network payable by the Group 157 Note 31 Subequent event 158 4.7. CONSOLIDATED COMPANIES AT DECEMBER 31 t, 2013 159 4.7.1. Fully conolidated companie 159 4.7.2. Proportionally conolidated companie 162 4.8. STATUTORY AUDITORS REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS 163 * Thi information form an integral part of the Annual Financial Report a provided for in the article L. 451-1-2 of the French Monetary and Financial Code. REGISTRATION DOCUMENT / L ORÉAL 2013 105

4 COMPARED 2013 CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED INCOME STATEMENTS L Oréal parent company i a French company with it regitered office in France, which perform a ale activity pecific to that country. At the ame time, L Oréal parent company ha firtly a role of holding company and trategic coordination and econdly that of cientific, indutrial and marketing coordination of the L Oréal Group on a worldwide bai. Mot of the ubidiarie have a role of marketing of the product manufactured by the Group factorie in the countrie or zone in which it i etablihed. The L Oréal Group wholly own the vat majority of it ubidiarie. It alo hold 50% of the hare capital of Galderma and Innéov developed in a joint venture with Netlé. The financial tatement et out in thi chapter preent the reult of the L Oréal Group a a whole, including all ubidiarie. The Statutory Auditor Report on the conolidated financial tatement ha been included at the end of thi chapter. 4.1. COMPARED CONSOLIDATED INCOME STATEMENTS million Note 2013 2012 2011 Net ale 3 22,976.6 22,462.7 20,343.1 Cot of ale -6,601.8-6,587.7-5,851.5 Gro profit 16,374.8 15,875.0 14,491.6 Reearch and development -857.0-790.5-720.5 Advertiing and promotion -6,886.2-6,776.3-6,291.6 Selling, general and adminitrative expene -4,756.8-4,610.9-4,186.9 Operating profit 3 3,874.8 3,697.3 3,292.6 Other income and expene 7-135.2-123.8-96.3 Operational profit 3,739.6 3,573.5 3,196.3 Finance cot on gro debt -29.1-34.5-48.1 Finance income on cah and cah equivalent 33.5 31.3 28.5 Finance cot, net 4.4-3.2-19.6 Other financial income (expene) 8-47.1-7.8-5.6 Sanofi dividend 327.5 313.4 295.6 Profit before tax and non-controlling interet 4,024.4 3,875.9 3,466.7 Income tax 9-1,063.0-1,005.5-1,025.8 Net profit 2,961.4 2,870.4 2,440.9 Attributable to: owner of the company 2,958.2 2,867.7 2,438.4 non-controlling interet 3.2 2.7 2.5 Earning per hare attributable to owner of the company (euro) 10 4.95 4.79 4.11 Diluted earning per hare attributable to owner of the company (euro) 10 4.87 4.74 4.08 Earning per hare attributable to owner of the company excluding non-recurring item (euro) 10 5.22 4.97 4.36 Diluted earning per hare attributable to owner of the company excluding non-recurring item (euro) 10 5.13 4.91 4.32 106 REGISTRATION DOCUMENT / L ORÉAL 2013

2013 CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 4.2. CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME million Note 2013 2012 2011 Conolidated net profit for the period 2,961.4 2,870.4 2,440.9 Financial aet available-for-ale 677.4 1,730.9 1,051.6 Cah flow hedge 13.2 103.0-6.0 Cumulative tranlation adjutment -457.0-134.3 114.5 Income tax on item that may be reclaified to profit or lo (1) -32.1-116.9-62.8 Item that may be reclaified to profit or lo 201.5 1,582.7 1,097.3 Actuarial gain and loe 20.4 188.9-271.9-172.4 Income tax on item that may not be reclaified to profit or lo (1) -63.8 86.7 56.2 Item that may not be reclaified to profit or lo 125.1-185.2-116.2 Other comprehenive income 326.6 1,397.5 981.1 Conolidated comprehenive income 3,288.0 4,267.9 3,422.0 Attributable to: owner of the company 3,284.9 4,265.1 3,419.5 non-controlling interet 3.1 2.8 2.5 4 (1) The tax effect i a follow: million 2013 2012 2011 Financial aet available-for-ale -28.0-90.0-63.9 Cah flow hedge -4.1-26.9 1.1 Item that may be reclaified to profit or lo -32.1-116.9-62.8 Actuarial gain and loe -63.8 86.7 56.2 Item that may not be reclaified to profit or lo -63.8 86.7 56.2 TOTAL -95.9-30.2-6.6 REGISTRATION DOCUMENT / L ORÉAL 2013 107

4 COMPARED 2013 CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED BALANCE SHEETS 4.3. COMPARED CONSOLIDATED BALANCE SHEETS Aet million Note 12.31.2013 12.31.2012 (1) 12.31.2011 (1) Non-current aet 21,944.2 21,321.3 19,140.9 Goodwill 11 6,457.6 6,478.2 6,204.6 Other intangible aet 12 2,547.7 2,625.4 2,477.3 Property, plant and equipment 14 3,054.1 2,962.8 2,880.8 Non-current financial aet 15 9,208.3 8,531.3 6,900.9 Deferred tax aet 9 676.5 723.6 677.3 Current aet 9,354.1 8,209.6 7,722.6 Inventorie 16 2,158.6 2,033.8 2,052.1 Trade account receivable 17 3,253.5 3,208.8 2,996.2 Other current aet 18 1,167.9 1,006.6 904.1 Current tax aet 166.8 137.2 118.0 Cah and cah equivalent 19 2,607.3 1,823.2 1,652.2 TOTAL 31,298.3 29,530.9 26,863.5 (1) The balance heet at December 31 t, 2011 and December 31 t, 2012 have been retated to reflect the change in accounting policie reulting from the amendment to IAS 19 (revied) (ee note 1). Equity & Liabilitie million Note 12.31.2013 12.31.2012 (1) 12.31.2011 (1) Equity 20 22,642.8 20,925.5 17,626.9 Share capital 121.2 121.8 120.6 Additional paid-in capital 2,101.2 1,679.0 1,271.4 Other reerve 14,220.8 13,679.7 12,358.2 Other comprehenive income 4,370.1 3,586.4 2,054.7 Cumulative tranlation adjutment -566.4-109.4 24.9 Treaury tock -568.1-904.5-644.4 Net profit attributable to owner of the company 2,958.2 2,867.7 2,438.4 Equity attributable to owner of the company 22,637.0 20,920.7 17,623.8 Non-controlling interet 5.8 4.8 3.1 Non-current liabilitie 2,060.9 2,236.0 2,106.7 Proviion for employee retirement obligation and related benefit 21 980.5 1,242.7 1,145.0 Proviion for liabilitie and charge 22 182.7 181.7 226.1 Deferred tax liabilitie 9 804.0 764.7 678.1 Non-current borrowing and debt 23 93.7 46.9 57.5 Current liabilitie 6,594.6 6,369.5 7,129.9 Trade account payable 3,346.0 3,318.0 3,247.7 Proviion for liabilitie and charge 22 557.8 552.3 500.7 Other current liabilitie 25 2,189.8 2,141.1 2,066.7 Income tax 202.1 157.0 224.0 Current borrowing and debt 23 298.9 201.1 1,090.8 TOTAL 31,298.3 29,530.9 26,863.5 (1) The balance heet at December 31 t, 2011 and December 31 t, 2012 have been retated to reflect the change in accounting policie reulting from the amendment to IAS 19 (revied) (ee note 1). 108 REGISTRATION DOCUMENT / L ORÉAL 2013

2013 CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY 4.4. CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY million Common hare outtanding Additional Share paid-in capital capital Retained earning Other and net comprehenive profit income Treaury tock Cumulative tranlation adjutment Noncontrolling company interet Equity attributable to owner of the At 12.31.2010 589,655,903 120.2 1,148.3 13,346.8 1,188.1-850.9-89.6 14,862.9 2.9 14,865.8 Change in accounting policie at 01.01.2011 - - - -8.1 - - - -8.1 - -8.1 At 01.01.2011 (1) 589,655,903 120.2 1,148.3 13,338.7 1,188.1-850.9-89.6 14,854.8 2.9 14,857.7 Conolidated net profit for the period 2,438.4 2,438.4 2.5 2,440.9 Financial aet available-for-ale 987.7 987.7 987.7 Cah flow hedge -4.9-4.9-4.9 Cumulative tranlation adjutment 114.5 114.5 114.5 Other comprehenive income that may be reclaified to profit and lo 982.8 114.5 1,097.3 1,097.3 Actuarial gain and loe -116.2-116.2-116.2 Other comprehenive income that may not be reclaified to profit and lo -116.2-116.2-116.2 Conolidated comprehenive income 2,438.4 866.6 114.5 3,419.5 2.5 3,422.0 Capital increae 1,991,497 0.4 123.1 123.5 123.5 Cancellation of Treaury tock - - Dividend paid (not paid on Treaury tock) -1,065.3-1,065.3-2.2-1,067.5 Share-baed payment 86.8 86.8 86.8 Net change in Treaury tock 2,739,023 1.7 206.5 208.2 208.2 Other movement -3.7-3.7-0.1-3.8 At 12.31.2011 (1) 594,386,423 120.6 1,271.4 14,796.6 2,054.7-644.4 24.9 17,623.8 3.1 17,626.9 Conolidated net profit for the period 2,867.7 2,867.7 2.7 2,870.4 Financial aet available-for-ale 1,640.9 1,640.9 1,640.9 Cah flow hedge 76.0 76.0 0.1 76.1 Cumulative tranlation adjutment -134.3-134.3-134.3 Other comprehenive income that may be reclaified to profit and lo 1,716.9-134.3 1,582.6 0.1 1,582.7 Actuarial gain and loe -185.2-185.2-185.2 Other comprehenive income that may not be reclaified to profit and lo -185.2-185.2-185.2 Conolidated comprehenive income 2,867.7 1,531.7-134.3 4,265.1 2.8 4,267.9 Capital increae 5,826,745 1.2 407.6 408.8 1.4 410.2 Cancellation of Treaury tock - - Dividend paid (not paid on Treaury tock) -1,204.3-1,204.3-2.5-1,206.8 Share-baed payment 86.4 86.4 86.4 Net change in Treaury tock -1,856,506 2.4-260.1-257.7-257.7 Other movement -1.4-1.4-1.4 At 12.31.2012 (1) 598,356,662 121.8 1,679.0 16,547.4 3,586.4-904.5-109.4 20,920.7 4.8 20,925.5 Conolidated net profit for the period 2,958.2 2,958.2 3.2 2,961.4 Financial aet available-for-ale 649.5 649.5 649.5 Cah flow hedge 9.1 9.1-0.1 9.0 Cumulative tranlation adjutment -457.0-457.0-457.0 Other comprehenive income that may be reclaified to profit and lo 658.6-457.0 201.6-0.1 201.5 Actuarial gain and loe 125.1 125.1 125.1 Other comprehenive income that may not be reclaified to profit and lo 125.1 125.1 125.1 Conolidated comprehenive income 2,958.2 783.7-457.0 3,284.9 3.0 3,288.0 Capital increae 6,199,701 1.2 422.2 423.4 423.4 Cancellation of Treaury tock -1.8-996.7 998.5 - - Dividend paid (not paid on Treaury tock) -1,380.6-1,380.6-2.5-1,383.1 Share-baed payment 97.2 97.2 97.2 Net change in Treaury tock -4,762,333 1.4-662.1-660.7-660.7 Purchae commitment for minority interet -48.3-48.3-0.9-49.2 Change in cope of conolidation 1.4 1.4 Other movement 0.4 0.4 0.4 AT 12.31.2013 599,794,030 121.2 2,101.2 17,179.0 4,370.1-568.1-566.4 22,637.0 5.8 22,642.8 Total equity 4 (1) Taking into account the change in accounting policie reulting from the amendment to IAS 19 (revied) (ee note 1). REGISTRATION DOCUMENT / L ORÉAL 2013 109

4 COMPARED 2013 CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED STATEMENTS OF CASH FLOWS 4.5. COMPARED CONSOLIDATED STATEMENTS OF CASH FLOWS million Note 2013 2012 2011 Cah flow from operating activitie Net profit attributable to owner of the company 2,958.2 2,867.7 2,438.4 Non-controlling interet 3.2 2.7 2.5 Elimination of expene and income with no impact on cah flow: depreciation, amortiation and proviion 840.1 691.6 614.3 change in deferred taxe 9.1 7.3 17.3 85.9 hare-baed payment (including free hare) 20.3 97.2 86.4 86.8 capital gain and loe on dipoal of aet - -4.3-1.7 Gro cah flow 3,906.0 3,661.4 3,226.2 Change in working capital 27-155.8-129.1-322.0 Net cah provided by operating activitie (A) 3,750.2 3,532.3 2,904.2 Cah flow from inveting activitie Purchae of property, plant and equipment and intangible aet -1,060.5-955.0-865.7 Dipoal of property, plant and equipment and intangible aet 8.7 7.3 15.2 Change in other financial aet (including invetment in nonconolidated companie) -87.9 105.8-1.2 Effect of change in the cope of conolidation 28-229.5-466.2-717.4 Net cah (ued in) from inveting activitie (B) -1,369.2-1,308.1-1,569.1 Cah flow from financing activitie Dividend paid -1,426.5-1,268.2-1,107.6 Capital increae of the parent company 423.4 408.8 123.5 Capital increae of ubidiarie - 1.4 - Dipoal (acquiition) of Treaury tock -660.6-257.7 208.2 Purchae of non-controlling interet - - - Iuance (repayment) of hort-term loan 158.9-906.7 852.8 Iuance of long-term borrowing - - - Repayment of long-term borrowing -13.8-13.4-1,333.6 Net cah (ued in) from financing activitie (C) -1,518.6-2,035.8-1,256.7 Net effect of change in exchange rate and fair value (D) -78.3-17.4 23.4 Change in cah and cah equivalent (A+B+C+D) 784.1 171.0 101.8 Cah and cah equivalent at beginning of the year (E) 1,823.2 1,652.2 1,550.4 CASH AND CASH EQUIVALENTS AT END OF THE YEAR (A+B+C+D+E) 19 2,607.3 1,823.2 1,652.2 Income taxe paid amount to 1,008.9 million, 1,114.0 million and 870.5 million repectively for the year 2013, 2012 and 2011. Interet paid amount to 30.7 million, 34.5 million and 49.9 million repectively for the year 2013, 2012 and 2011. Dividend received amount to 327.5 million, 313.4 million and 295.6 million repectively for the year 2013, 2012 and 2011, and are included within gro cah flow. 110 REGISTRATION DOCUMENT / L ORÉAL 2013

2013 CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 4.6. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DETAILED LIST OF NOTES NOTE 1 Accounting principle 111 NOTE 2 Change in the cope of conolidation 119 NOTE 3 Segment information 120 NOTE 4 Peronnel cot and number of employee 123 NOTE 5 Depreciation and amortiation expene 124 NOTE 6 Foreign exchange gain and loe 124 NOTE 7 Other operational income and expene 125 NOTE 8 Other financial income and expene 125 NOTE 9 Income tax 125 NOTE 10 Net profit attributable to owner of the company excluding non-recurring item Earning per hare 127 NOTE 11 Goodwill 130 NOTE 12 Other intangible aet 133 NOTE 13 Impairment tet on intangible aet 135 NOTE 14 Property, plant and equipment 136 NOTE 15 Non-current financial aet 137 NOTE 16 Inventorie 137 NOTE 17 Trade account receivable 138 NOTE 18 Other current aet 138 NOTE 19 Cah and cah equivalent 138 NOTE 20 Equity 139 NOTE 21 Pot-employment benefit, termination benefit and other long-term employee benefit 143 NOTE 22 Proviion for liabilitie and charge 147 NOTE 23 Borrowing and debt 149 NOTE 24 Derivative and expoure to market rik 150 NOTE 25 Other current liabilitie 154 NOTE 26 Off-balance heet commitment 154 NOTE 27 Change in working capital 155 NOTE 28 Impact of change in the cope of conolidation in the cah flow tatement 156 NOTE 29 Tranaction with related partie 156 NOTE 30 Fee accruing to Auditor and member of their network payable by the Group 157 NOTE 31 Subequent event 158 4 NOTE 1 Accounting principle The conolidated financial tatement of L Oréal and it ubidiarie ( the Group ) publihed for 2013 have been prepared in accordance with International Financial Reporting Standard (IFRS), a adopted in the European Union a of December 31 t, 2013. On February 10 th, 2014, the Board of Director cloed the conolidated financial tatement at December 31 t, 2013. The financial tatement will not become final until they have been approved by the Annual General Meeting of hareholder to be held on April 17 th, 2014. The Group did not early adopt any tandard or interpretation not mandatorily applicable in 2013. IFRS 13 Fair Value Meaurement applicable a from January 1 t, 2013 ha no material impact on the conolidated account. The amendment to IFRS 7 Financial Intrument: Dicloure Offetting Financial Aet and Financial Liabilitie effective a of January 1 t, 2013 require additional dicloure to be provided about all recognied financial intrument which have been offet in accordance with IAS 32.42. It alo require dicloure about recognied financial intrument which are ubject to legally enforceable offetting agreement or imilar arrangement, even if they are not offet in accordance with IAS 32. Thee dicloure are provided in n ote 24.8. REGISTRATION DOCUMENT / L ORÉAL 2013 111

4 NOTES 2013 CONSOLIDATED FINANCIAL STATEMENTS TO THE CONSOLIDATED FINANCIAL STATEMENTS Moreover, the Group i concerned a follow by IFRS 10 Conolidated Financial Statement, IFRS 11 Joint Arrangement and IFRS 12 Dicloure of Interet in Other Entitie, applicable a from January 1 t, 2014. Thee tandard redefine the notion of control over another entity, and abolih proportionate conolidation for jointly controlled entitie. Only the equity method may now be ued for uch entitie. Conequently, Galderma and Innéov which are currently proportionately conolidated will henceforth be accounted for uing the equity method. At December 31 t, 2012, the entitie concerned contributed 824.3 million to net ale, 138.9 million to operating profit and 373 million to net finance cot, baed on a 50% interet. At December 31 t, 2013, the entitie concerned contributed 852.4 million to net ale, 114.4 million to operating profit and 105.5 million to net finance cot, baed on a 50% interet. Change in accounting policie applicable a from January 1 t, 2013: Amendment to IAS 19 (revied), Employee benefit. Thi amendment require: pat ervice cot to be recognied immediately in profit or lo, with recognition over everal period no longer permitted; the return on plan aet to be calculated baed on the dicount rate for the obligation. At the time of it change in accounting policie, L Oréal decided to reclaify the interet component of it penion cot to other financial income and expene, repreenting an amount of 31.9 million for 2011, 37.2 million for 2012 and 40.1 million for 2013. The impact of thi new accounting policy and of the aforementioned reclaification on income for comparative period i not deemed material. Accordingly, the comparative period have not been retated. The change in accounting policy led to a decreae in opening equity of 8.1 million at January 1 t, 2011, 10.6 million at January 1 t, 2012 and 10.9 January 1 t, 2013. The offetting entry for the decreae in equity wa an increae in the proviion for employee retirement obligation and related benefit of 12.1 million at January 1 t, 2011, 16.1 January 1 t, 2012 and 16.5 million at January 1 t, 2013, an increae in deferred tax aet of 5.1 million at January 1 t, 2011, 5.9 January 1 t, 2012 and 5.8 million at January 1 t, 2013 and an increae in deferred tax liabilitie of 1.1 million at January 1 t, 2011, 0.4 January 1 t, 2012 and 0.3 million at January 1 t, 2013. In May 2013, the IASB publihed IFRIC 21 Levie, effective a of January 1 t, 2014 on a retropective bai. Thi interpretation, which ha not yet been adopted by the European Union, tate that the obligating event for the recognition of a liability for micellaneou taxe, dutie and other levie (excluding income tax falling within the cope of IAS 12) depend on the term of the related legilation and i independent of the period concerned by the calculation of the tax liability. The Group i in the proce of analying thi interpretation but doe not expect it to have a material impact on it annual financial tatement. 1.1. Ue of etimate The preparation of the conolidated financial tatement in accordance with international accounting tandard require that the Group make a certain number of etimate and aumption that may affect the value of the Group aet, liabilitie, equity and net profit (lo). Thee etimate and aumption mainly concern the meaurement of goodwill and other intangible aet, proviion, penion obligation, deferred taxe and hare-baed payment. Etimate ued by the Group in relation to thee different area are made on the bai of information available at the date the account are prepared and decribed in detail in each pecific aociated note. 1.2. Scope and method of conolidation All companie included in the cope of conolidation have a fical year ending December 31 t or cloe their account on that date. All companie directly or indirectly controlled by the parent company L Oréal have been fully conolidated. Group companie that are jointly controlled by the parent company and a limited number of other hareholder under a contractual agreement have been proportionally conolidated. Aociate over which the Group ha a ignificant influence have been accounted for by the equity method. 1.3. Foreign currency tranlation 1.3.1. ACCOUNTING FOR FOREIGN CURRENCY TRANSACTIONS IN CONSOLIDATED COMPANIES Foreign currency tranaction are tranlated at the exchange rate effective at the tranaction date. Aet and liabilitie denominated in foreign currencie have been tranlated uing exchange rate effective at the cloing date. Unrealied exchange gain and loe impact the income tatement. Forward foreign exchange contract and option are put in place in order to hedge item recorded in the balance heet (fair value hedge) and cah flow on highly probable future commercial tranaction (cah flow hedge). 112 REGISTRATION DOCUMENT / L ORÉAL 2013

2013 CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS All foreign exchange hedging intrument are recorded on the balance heet at their market value, including thoe which relate to purchae and ale in the next accounting period. Hence change in the fair value of thee hedging intrument i recorded a follow: change in the market value linked to variation in the time value of forward ued a hedge are recognied in equity and the amount accumulated in equity impact the income tatement at the date on which the hedged tranaction are completed; change in the market value linked to variation in the time value of option are recognied in the income tatement; change in the market value linked to variation in the pot rate between the inception of the hedge and the cloing date are charged to equity, and the amount accumulated in equity impact income tatement at the date on which the tranaction hedged are completed. Any remaining hedge ineffectivene i recognied directly in the income tatement. In application of hedge accounting, unrealied exchange gain and loe relating to unold inventorie are deferred in the inventorie item in the balance heet. Similarly, if a currency hedge ha been taken out in repect of fixed aet purchaed with foreign currency, thee aet are valued in the balance heet on the bai of the hedging rate. The Group may decide to hedge certain invetment in foreign companie. Exchange gain or loe relating to thee hedge are directly charged to conolidated equity, under the item Cumulative tranlation adjutment. 1.3.2. TRANSLATION OF THE ACCOUNTS OF FOREIGN SUBSIDIARIES The aet and liabilitie of foreign ubidiarie are tranlated at cloing exchange rate. Income tatement item are tranlated at average exchange rate for the year. The reulting tranlation difference attributable to the Group i entered directly under equity under the item Cumulative tranlation adjutment, while the tranlation difference attributable to non-controlling interet i recognied under the Non-controlling interet item. The tranlation difference doe not impact the income tatement other than at the time the Company i old. 1.3.3. VALUATION OF GOODWILL IN FOREIGN CURRENCIES Goodwill generated on foreign companie i conidered to form part of the aet and liabilitie of the foreign company, and i therefore expreed in the entity functional currency and tranlated uing exchange rate effective at the cloing date. Goodwill recorded before January 1 t, 2004 continue to be recorded in euro. 1.4. Net ale Net ale are recognied when the rik and reward inherent to ownerhip of the good have been tranferred to the cutomer. Sale incentive, cah dicount and product return are deducted from ale, a are incentive granted to ditributor or conumer reulting in a cah outflow, uch a commercial cooperation, coupon, dicount and loyalty programme. Sale incentive, cah dicount, proviion for return and incentive granted to cutomer are recorded imultaneouly to the recognition of the ale if they can be etimated in a reaonably reliable manner, baed mainly on tatitic compiled from pat experience and contractual condition. 1.5. Cot of ale The cot of good old conit mainly of the indutrial production cot of product old, the cot of ditributing product to cutomer including freight and delivery cot, either directly or indirectly through depot, inventory impairment cot, and royaltie paid to third partie. 1.6. Reearch and development expenditure Expenditure during the reearch phae i charged to the income tatement for the financial year during which it i incurred. Expene incurred during the development phae are recognied a Intangible aet only if they meet all the following criteria et out in IAS 38: the project i clearly defined and the related cot are eparately identified and reliably meaured; the technical feaibility of the project ha been demontrated; the intention and ability to complete the project and to ue or ell the product reulting from the project have been demontrated; the reource neceary to complete the project and to ue or ell it are available; the Group can demontrate that the project will generate probable future economic benefit, a the exitence of a potential market for the production reulting from the project, or it internal uefulne ha been demontrated. In view of the very large number of development project and uncertaintie concerning the deciion to launch product relating to thee project, L Oréal conider that ome of thee capitaliation criteria are not met. 1.7. Advertiing and promotion expene Thee expene conit mainly of expene relating to the advertiement and promotion of product to cutomer and conumer. They are charged to the income tatement for the financial year in which they are incurred. 4 REGISTRATION DOCUMENT / L ORÉAL 2013 113

4 NOTES 2013 CONSOLIDATED FINANCIAL STATEMENTS TO THE CONSOLIDATED FINANCIAL STATEMENTS 1.8. Selling, general and adminitrative expene Thee expene relate mainly to ale team and ale team management, marketing team and adminitrative ervice, a well a general expene and the cot of hare-baed payment (tock option and free hare). 1.9. Foreign exchange gain and loe Foreign exchange gain and loe reulting from the difference between the value of foreign currency operating income and expene tranlated at the pot rate effective on the tranaction date and at the exchange rate effective on the ettlement date are recognied directly on the appropriate income and expene line, after allowing for hedging derivative. 1.10. Operating profit Operating profit conit of gro profit le reearch and development expene, advertiing and promotion expene, and elling, general and adminitrative expene. 1.11. Other income and expene The Other income and expene item include capital gain and loe on dipoal of property, plant and equipment and intangible aet, impairment of aet, retructuring cot, and clearly identified, non-recurring income and expene item that are material to the conolidated financial tatement. The cot of retructuring operation i fully proviioned if it reult from a Group obligation toward a third party originating from a deciion taken by a competent body which i announced to the third partie concerned before the end of the reporting period. Thi cot conit mainly of everance payment, early retirement payment, the cot of unworked notice period, the cot of training for employee affected by the retructuring meaure, and other cot relating to ite cloure. Any write-off of fixed aet or impairment charged againt inventorie and other aet related directly to thee retructuring meaure are alo recorded a retructuring cot. 1.12. Operational profit Operational profit i calculated baed on operating profit and include other income and expene uch a capital gain and loe on dipoal of property, plant, and equipment and intangible aet, impairment of aet, and retructuring cot. 1.13. Finance cot, net Net financial debt conit of all current and non-current financial borrowing and debt, le cah and cah equivalent. Net finance cot conit of income and expene ariing on the item making up net financial debt during the accounting period, including gain and loe on the correponding interet rate and foreign exchange rate hedge. A interet rate derivative are fully effective, no ineffectivene impact finance cot. 1.14. Income tax The income tax charge include the current tax expene payable by each conolidated tax entity and the deferred tax expene. Deferred tax i calculated whenever there are temporary difference between the tax bai of aet and liabilitie and their bai for conolidated accounting purpoe, uing the balance heet liability method. The retatement of aet and liabilitie linked to capital leae contract reult in the booking of deferred tax. Deferred tax include irrecoverable taxation on etimated or confirmed dividend. Deferred tax i meaured uing the tax rate enacted at the cloing date and which will alo apply when the temporary difference revere. Deferred tax aet generated by tax lo carryforward are only recognied to the extent it i probable that the entitie will be able to generate taxable profit againt which they can be utilized. Under the French ytem of tax conolidation, the taxable profit of ome French companie are offet when determining the overall tax charge, which i payable only by L Oréal, the parent company of the tax group. Tax conolidation ytem alo exit outide France. 1.15. Intangible aet 1.15.1. GOODWILL Buine combination are accounted for by the purchae method. The aet, liabilitie and contingent liabilitie of the Company acquired are meaured at fair value at the acquiition date. Any valuation difference identified when the acquiition i carried out are recorded under the correponding aet and liability item. Any reidual difference between the cot of an acquiition and the Group interet in the fair value of the identified aet and liabilitie i recorded a Goodwill and allocated to the Cah- Generating Unit expected to benefit from the acquiition or the related ynergie. Goodwill generated on the acquiition of an aociate i preented in the Invetment in aociate line. Goodwill i not amortied. It i teted for impairment at leat once a year during the fourth quarter or whenever an advere event occur. Advere event may reult among other thing from an increae in market interet rate or from a decreae in actual ale or operational profit compared to forecat. 114 REGISTRATION DOCUMENT / L ORÉAL 2013

2013 CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Impairment tet conit of comparing the carrying amount of aet including goodwill with the recoverable amount of each Cah-Generating Unit. A Cah-Generating Unit correpond to one or more worldwide brand. A Cah-Generating Unit can contain everal brand depending on organiational criteria and particularly when ditribution circuit and commercial/ management tructure are pooled. Recoverable value are determined on the bai of dicounted operating cah flow forecat covering a period of 10 year (the period conidered neceary for the trategic poitioning of an acquiition) and a terminal value. The cah flow are determined in the currencie of the countrie in quetion and are tranlated, in the ame way a the net carrying amount to which they are compared, at the etimated exchange rate for the following year. The dicount rate ued for thee calculation i baed on the weighted average cot of capital (WACC), which amount to 7.9% in 2013, 2012 and 2011 for amount in euro, adjuted where appropriate by a country rik premium according to the geographic zone concerned. The dicount rate are pot-tax rate applied to pottax cah flow, and reult in recoverable amount identical to thoe obtained by applying pre-tax rate to pre-tax cah flow. The aumption adopted in term of ale growth and terminal value are reaonable and conitent with the available market data (generally around 3% for terminal value except in pecific cae). The ue of dicounted cah flow forecat i preferred in order to determine recoverable amount, unle detail of imilar recent tranaction are readily available. Impairment charged againt goodwill cannot be revered. For buine combination carried out after January 1 t, 2010, the main change with regard to previouly applicable accounting principle are et out below: for each acquiition, the Group chooe whether to recognie the full amount of goodwill regardle of the ownerhip interet acquired, or an amount of goodwill correponding to it interet in the acquired company (previouly the only method allowed); deferred tax aet recognied after the initial accounting i complete are included in profit or lo, and in contrat to previou practice, the amount of goodwill that would have been recorded had the deferred tax aet been recognied a an identifiable aet at the acquiition date i not deducted; cot incurred in repect of a buine combination are now expened and no longer included in the cot of the acquiition; the cot of the acquiition, which include contingent conideration, i recognied and meaured at it acquiitiondate fair value. S ubequent change in fair value, affecting in particular the contingent conideration recorded in liabilitie, are taken to Other income and expene in the income tatement and no longer treated a an adjutment to goodwill; any previou interet held in the acquiree prior to the date control wa obtained i now remeaured at it acquiitiondate fair value, with the correponding gain or lo on remeaurement taken to the income; purchae commitment for minority interet are recognied in financial debt at the acquiition-date fair value. Subequent change in fair value of the commitment are recongnied by adjuting equity. 1.15.2. OTHER INTANGIBLE ASSETS Intangible aet are recorded on the balance heet at cot. Intangible aet identified following an acquiition a well a internally generated intangible aet are alo included in thi item. A) INTANGIBLE ASSETS ACQUIRED THROUGH BUSINESS COMBINATIONS They mainly conit of trademark, cutomer relationhip and formula and patent. With regard to trademark, the ue of the dicounted cah flow method i preferred to enable the value in ue to be monitored more eaily following the acquiition. Two approache have been adopted to date: premium-baed approach: thi method involve etimating the portion of future cah flow that could be generated by the trademark, compared with the future cah flow that the activity could generate without the trademark; royalty-baed approach: thi involve etimating the value of the trademark by reference to the level of royaltie demanded for the ue of imilar trademark, baed on ale forecat drawn up by the Group. Thee approache are baed on a qualitative analyi of the trademark in order to enure that the aumption elected are relevant. The dicount rate ued i baed on the weighted average cot of capital (WACC) for the target acquired. Terminal growth rate are conitent with available market data (generally around 3%, except in pecific cae). A trademark may have a finite or an indefinite ueful life pan. Local trademark which are to be gradually replaced by an international trademark already exiting within the Group have a finite ueful life pan. They are amortied over their ueful live a etimated at the date of acquiition. International trademark are trademark which have an indefinite life pan. They are teted for impairment at leat once a year during the fourth quarter, and whenever an advere event occur. Advere event may reult among other thing from an increae in market interet rate or from a decreae in actual ale or operational profit compared to forecat. The impairment tet conit of calculating the recoverable amount of the trademark baed on the model adopted when the acquiition took place. 4 REGISTRATION DOCUMENT / L ORÉAL 2013 115

4 NOTES 2013 CONSOLIDATED FINANCIAL STATEMENTS TO THE CONSOLIDATED FINANCIAL STATEMENTS Cutomer relationhip refer to relation developed with cutomer either through contractual arrangement or by noncontractual mean through contant revenue tream reulting from the target competitive poition or reputation in it market. The ueful life of a cutomer relationhip i limited and varie depending on the etimated attrition rate of exiting cutomer at the time of the acquiition. The Group may decide to identify and value patent and formula that it intend to develop. The value of a patent or a formula i aeed on the bai of the future profit expected from it ownerhip in the future, in accordance with the royalty-baed approach. The amortiation period applicable to patent correpond to the period during which they enjoy legal protection. Formula, which are not protected by legal mean, are amortied over a maximum period of 5 year. B) INTERNALLY GENERATED INTANGIBLE ASSETS Thee mainly conit of oftware. The development cot of oftware for internal ue are capitalied for the programming, coding and teting phae. The cot of ubtantial update and upgrade reulting in additional function are alo capitalied. Capitalied development cot are amortied from the date on which the oftware i made available in the entity concerned over it probable ueful life, which in mot cae i between 5 and 8 year. 1.16. Property, plant and equipment Property, plant and equipment are recorded on the balance heet at cot and are not revalued. Significant capital aet financed through capital leae, which tranfer to the Group ubtantially all of the rik and reward inherent to their ownerhip, are recorded a aet on the balance heet. The correponding debt i recorded within borrowing and debt on the balance heet. Invetment ubidie are recorded a liabilitie under Other current liabilitie. The component of property, plant and equipment are recorded eparately if their etimated ueful live, and therefore their depreciation period, are materially different. Property, plant and equipment are depreciated uing the traight-line method, over the following ueful live: Building Indutrial machinery and equipment Point-of-ale advertiing: tand and diplay Other 10-40 year 5-15 year 3-5 year 3-10 year Depreciation and impairment loe are recorded in the income tatement according to the ue of the aet. In view of their nature, property, plant and equipment are conidered to have a value of zero at the end of the ueful live indicated above. 1.17. Non-current financial aet Non-current financial aet include invetment in nonconolidated companie and long-term loan and receivable maturing after more than 12 month. Invetment in non-conolidated companie are conidered to be financial aet available-for-ale. A uch, they are valued on the bai of their fair value, and unrealied loe and gain are accounted for through equity on the line Other comprehenive income. The fair value of lited ecuritie i determined on the bai of the hare price at the cloing date. If the fair value of unlited ecuritie cannot be reliably determined, thee ecuritie are valued at cot. If the unrealied lo accounted for through equity i repreentative of ignificant or prolonged impairment, thi lo i recorded in the income tatement. Long-term loan and receivable are conidered to be aet generated by the buine. A uch, they are valued at amortied cot. If there i an indication of a lo in value, a proviion for impairment i recorded. 1.18. Inventorie Inventorie are valued at the lower of cot or net realiable value. Cot i calculated uing the weighted average cot method. A proviion i made for obolete and low-moving inventorie on the bai of their probable net realiable value, etimated on the bai of hitoric and projected data. 1.19. Trade account receivable Account receivable from cutomer are recorded at their nominal value, which correpond to their fair value. A proviion i made for any doubtful receivable baed on an aement of the rik of non-recovery. The Group policy i to recommend credit inurance coverage when thi i allowed by local regulation. 1.20. Cah and cah equivalent Cah and cah equivalent conit of cah in bank account, unit of cah unit trut and liquid hort-term invetment with a negligible rik of change in value and a maturity date of le than three month at the date of acquiition. 116 REGISTRATION DOCUMENT / L ORÉAL 2013

2013 CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Invetment in hare and cah, which are held in an account blocked for more than three month, cannot be recorded under cah and are preented under Other current aet. Bank overdraft conidered to be financing are preented in Current borrowing and debt. Unit of cah unit trut are conidered to be aet availablefor-ale. A uch, they are valued in the balance heet at their market value at the cloing date. Any related unrealied gain are accounted for in Finance cot, net in the income tatement. The carrying amount of bank depoit i a reaonable approximation of their fair value. 1.21. Treaury tock Treaury tock i recorded at acquiition cot and deducted from equity. Capital gain/loe on dipoal of Treaury tock net of tax are charged directly to equity and do not contribute to profit for the financial year. 1.22. Share-baed payment: Share ubcription or purchae option Free hare In accordance with the requirement of IFRS 2 Share-baed payment, the value of option or free hare granted a calculated at the grant date i expened in the income tatement over the veting period, which i generally 5 year for purchae option and 4 year for free hare. The fair value of tock option i determined uing the Black & Schole model. Thi model take into account the characteritic of the plan uch a the exercie price and exercie period, and market data at the grant date uch a the rik-free rate, hare price, volatility, expected dividend and behavioural aumption regarding beneficiarie. The fair value of free hare correpond to the value of the hare at the grant date, le dividend expected to be paid during the veting period. The cot of the additional 2-year holding period applicable to French reident i determined baed on the interet rate granted to the employee, conidered equivalent to the rate which would be granted by a bank to a private individual cutomer with an average financial profile. The impact of IFRS 2 on profit for the period i booked on the Selling, general and adminitrative expene line of the income tatement at Group level, and i not allocated to the Diviion or geographic zone. 1.23. Proviion for employee retirement obligation and related benefit The Group operate penion, early retirement and other benefit cheme depending on local legilation and regulation. For obligatory tate cheme and other defined-contribution cheme, the Group recognie in the income tatement contribution payable when they are due. No proviion ha been et aide in thi repect a the Group obligation doe not exceed the amount of contribution paid. The characteritic of the defined benefit cheme in force within the Group are a follow: French regulation provide for pecific length-of-ervice award payable to employee on retirement. An early retirement plan and a defined benefit plan have alo been et up. In ome Group companie there are alo meaure providing for the payment of certain healthcare cot for retired employee. Thee obligation are partially funded by an external fund, except thoe relating to healthcare cot for retired employee; for foreign ubidiarie with employee penion cheme or other pecific obligation relating to defined benefit plan, the exce of the projected benefit obligation over the cheme aet i recognied by etting up a proviion for charge on the bai of the actuarial value of employee veted right. The charge recorded in the income tatement during the year include: ervice cot, i.e. additional right veted by employee during the accounting period; the impact of any change to exiting cheme on previou year or of any new cheme; interet cot, i.e. change in the value of the dicounted right over the pat year; income on external fund calculated on the bai of the dicount rate applied to the benefit obligation. The latter two item repreent the interet component of the penion expene. The interet component i hown within Finance Reult on the Other financial income and expene line. To determine the dicounted value of the obligation for each cheme, the Group applie an actuarial valuation method baed on the final alary (projected unit credit method). The obligation and the fair value of plan aet are aeed each year uing length-of-ervice, life expectancy, taff turnover by category and economic aumption (uch a inflation rate and dicount rate). 4 REGISTRATION DOCUMENT / L ORÉAL 2013 117

4 NOTES 2013 CONSOLIDATED FINANCIAL STATEMENTS TO THE CONSOLIDATED FINANCIAL STATEMENTS Actuarial gain and loe ariing on pot-employment defined benefit obligation are recognied in equity. Actuarial gain and loe in relation to other benefit uch a jubilee award and long-erve bonue are immediately charged to the income tatement. The liability correponding to the Company net defined benefit obligation regarding it employee i recorded in the balance heet on the Proviion for employee retirement obligation and related benefit line. 1.24. Proviion for liabilitie and charge Proviion for liabilitie and charge are et up to cover probable outflow for the benefit of third partie without any equivalent conideration being received by the Group in return. They relate mainly to retructuring cot and tax rik and litigation, indutrial, environmental and commercial rik relating to operation (breach of contract, product return) and employee-related rik. Thee proviion are etimated on the bai of the aumption deemed mot probable or by uing tatitical method, depending on the type of proviion. Proviion for liabilitie and charge are recorded either a Noncurrent liabilitie or a Current liabilitie, depending on their nature. Proviion for liabilitie or litigation which mut be ettled within 12 month of the cloing date, and thoe linked to the normal operating cycle (uch a product return), are recorded a Current liabilitie. Other proviion for liabilitie and charge are recorded a Non-current liabilitie. 1.25. Borrowing and debt Borrowing and debt are valued at amortied cot baed on an effective interet rate. In accordance with the principle of fair value hedge accounting, fixed-rate borrowing and debt wapped at a floating rate are valued on the balance heet at market value. The reulting change in value are recorded a finance cot and are offet by change in the value of the related interet rate wap. The fair value of fixed-rate debt i determined by the dicounted cah flow method uing bond yield curve at the cloing date, allowing for the pread correponding to the Group rik cla to be taken into account. The carrying amount of floating-rate debt i a reaonable approximation of it fair value. Medium- and long-term borrowing and debt are recorded under Non-current liabilitie. Short-term borrowing and debt and the current portion of medium- and long-term borrowing and debt are preented under Current liabilitie. 1.26. Financial derivative Derivative intrument entered into to hedge identifiable foreign exchange and interet rate rik are accounted for in accordance with hedge accounting principle. The accounting principle applicable to foreign exchange rik are et out in detail in note 1.3. With regard to interet rate rik, fixed-rate debt and financial loan hedged by interet rate wap are valued in the balance heet at their market value. Change in the fair value of thee item are recorded a finance cot and offet by adjutment to the fair value of the related hedging derivative. Floating-rate debt and financial loan are valued at cot, which correpond to their market value. The wap or cap which hedge thee item are valued in the balance heet at their market value, with change in value recorded directly through equity on the Other comprehenive income line. The fair value of interet rate derivative intrument i their market value. Market value i calculated by the dicounted cah flow method at the interet rate effective at the cloing date. 1.27. Earning per hare Earning per hare are calculated in accordance with the rule et out in IAS 33. Baic earning per hare are obtained on the bai of the weighted average number of hare outtanding during the year, le the average number of treaury hare held deducted from equity. Where applicable, diluted earning per hare take into account dilutive tock option and free hare in accordance with the Treaury tock method, under which um collected on exercie or purchae are aumed to be allocated firtly to hare buyback at market price. 118 REGISTRATION DOCUMENT / L ORÉAL 2013

2013 CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 2 Change in the cope of conolidation 2.1. 2013 On January 31 t, 2013, L Oréal finalied the acquiition of the Colombia-baed Vogue group, the country leader in mamarket make-up. In 2012, the Vogue group reported conolidated net ale of 35.3 million. Thi acquiition ha been fully conolidated ince February 1 t, 2013. On February 27 th, 2013, Galderma Pharma S.A. finalied the acquiition of Spirig Pharma A.G. Spirig product treat condition uch a un-provoked kin dieae and kin barrier function impairment. The company alo ha a range of medically-proven product that prevent pre-cancerou condition uch a actinic keratoi, a type of non-melanoma kin cancer. Leading brand include Excipial, Daylong and Daylong Actinica. Baed in Egerkingen in Switzerland, Spirig i the leader in dermatology in Switzerland. Spirig generated ale of 80.0 million in 2012 (at 100%), and had 390 employee. Spririg ha been proportionally conolidated ince March 1 t, 2013. On April 15 th, 2013, L Oréal announced it ha acquired the Health & Beauty buine of Interconumer Product Limited (ICP) in Kenya from it founding hareholder. With a turnover of approximately 15 million in 2012, ICP i a ignificant player on the Kenyan beauty market, with trong poition in the hair and kin care market. Thi acquiition ha been fully conolidated ince April 12 th, 2013. On December 13 th, 2013, following the approval of the Brazilian Anti-Trut Authority CADE, The Body Shop finalied the acquiition of 51% of Emporio Body Store in Brazil with the option of increaing it hareholding to 80% by 2019. Founded in 1997 in Porto Alegre by Tobia Chanan, Emporio Body Store offer a complete range of beauty product old through a franchie network. Emporio Body Store achieved in 2012 a conolidated turnover of 20 million Real (approximately 7 million). Since 2011, the buine ha grown trongly and increaed from 36 point of ale in 2010 to 84 in 2012, to reach an etimated 130 point of ale end of 2013. Thi acquiition ha been fully conolidated ince December 31 t, 2013. The cot of thee new acquiition amount to 222.8 million. The total amount of goodwill and other intangible aet reulting from the acquiition wa proviionally etimated at 138.6 million and 37.9 million, repectively. Thee acquiition repreent around 100 million in full-year net ale and 9 million in full-year operating profit. 2.2. 2012 On April 26 th, 2012, L Oréal announced that it had acquired 100% of Cadum, previouly majority-owned by the invetment fund Miletone. In 2011, Cadum had conolidated net ale of 58 million, of which 49 million were made in France, mainly under the Cadum brand. The acquiition wa fully conolidated a from May 1 t, 2012. On July 13 th, 2012, L Oréal announced that it had completed the ale of the home care buine from the Cadum Group to Eau Ecarlate SAS. Thi buine had net ale of 17 million in 2011, two third of which were made in France. The ale of the home care buine reulted in the derecognition of IBA entire aet and liabilitie, with no impact on the Group conolidated net profit. On October 21 t, 2012, L Oréal USA announced that it had igned a contract to acquire the profeional ditribution buine of the New Jerey-baed company Emiliani Enterprie. Well-etablihed in the New York area, New Jerey and Connecticut, Emiliani Enterprie upplie hair alon through a network of repreentative and ale outlet open only to profeional, and in 2011 had net ale of approximately $73 million. Thi acquiition wa finalied on December 18 th, 2012 and wa fully conolidated a from that date. On November 26 th, 2012, L Oréal igned an agreement to acquire Urban Decay, America expert make-up brand. Thi brand fully complement L Oréal Luxe portfolio of brand and trengthen the Group poition in two very dynamic ditribution channel in the USA: aited elf-ervice and e-commerce. Urban Decay had net ale of $130 million in the lat fical year ended June 30 th, 2012. Thi acquiition wa finalied on December 17 th, 2012 and wa fully conolidated from that date. The cot of thee new acquiition amount to 484.7 million. The total amount of goodwill and other intangible aet reulting from the acquiition wa etimated at 313.9 million and 135.6 million, repectively. Thee acquiition repreent around 200 million in full-year net ale and 10.4 million in full-year operating profit in 2012. Their impact on 2012 net ale i approximately 35 million. 4 REGISTRATION DOCUMENT / L ORÉAL 2013 119

4 NOTES 2013 CONSOLIDATED FINANCIAL STATEMENTS TO THE CONSOLIDATED FINANCIAL STATEMENTS 2.3. 2011 On January 1 t, 2011, Matrix Ditribution GmbH, a wholly owned ubidiary of L Oréal Deutchland GmbH, took over the cometic and cior buinee of Germany-baed company Arex GmbH. Arex GmbH ell excluive hairdreing brand and high quality cior excluively to hairdreer. Arex GmbH had ale of 7 million in 2010 and ha been fully conolidated ince January 1 t, 2011. On December 13 th, 2010, Galderma Holding AB, a wholly owned ubidiary of Galderma Pharma S.A., announced that it had launched a cah offer for Q-Med, a company lited on Nadaq OMX Nordic in Stockholm. Created in 1987, Q-Med i a medical device company which develop, market and ell high quality medical implant for aethetic and medical ue. The majority of it product are baed on the company patented NASHA technology for the production of tabilized non-animal hyaluronic acid. Among other product, it current product portfolio include Retylane for moothing out line and improving facial contour, and the Macrolane injection for haping the body. Sale are made through the company own ubidiarie and ditributor in over 70 countrie. Q-Med ha approximately 636 employee in 20 countrie, including around 364 baed at the company head office, R&D laboratorie and production facility in Uppala, Sweden. In 2010, the company had total revenue of SEK1.5 billion and an operating profit of SEK287 million. The acceptance period for the offer tarted on January 4 th and ended on March 11 th, 2011. A price of SEK79.00 in cah wa offered for each hare, with the exception of hare owned by Q-Med founder Bengt Agerup, who old hi 47.5% take at a price of SEK58.94 per hare. An earn-out claue tipulate that the total price can under no circumtance exceed SEK74.96 per hare. On March 15 th, 2011, Galderma declared the offer wholly unconditional and acquired 95,361,096 hare, repreenting 95.95% of the exiting iued hare capital of Q-Med. Galderma decided to requet compulory acquiition of the remaining hare in Q-Med hare, which wa obtained on November 15 th, 2011. Q-Med i proportionally conolidated a from March 1 t, 2011. On December 15 th, 2011, L Oréal announced the completed acquiition of Pacific Biocience Laboratorie Inc., the market leader in the rapidly growing area of onic kin care device. The move give L Oréal acce to patented onic kin care technology enabling the Company to acquire trategic poition in the booming kin care device category. Clarionic i old mainly throughout the US and i alo preent in the UK, Autralia, Mexico, Canada and the Far Eat. It i old through a ditribution network which include dermatologit and cometic urgeon, pa, pretige retail, e-tail, televiion hopping and clarionic.com. In full-year 2010, Clarionic delivered net ale of $105 million. It ha been fully conolidated ince December 15 th, 2011. The cot of thee new acquiition wa 815.2 million. The total amount of goodwill and other intangible aet reulting from the acquiition wa etimated at 426.3 million and 320.8 million, repectively. Thee acquiition repreent around 193 million in ale and 33 million in operating profit in 2011. NOTE 3 Segment information 3.1. Segment information The Cometic branch i organied into four ector, each operating with pecific ditribution channel: Profeional Product Diviion: product ued and old in hair alon; Conumer Product Diviion: product old in ma-market retail channel; L Oréal Luxury Diviion: product old in elective retail outlet, i.e. department tore, perfumerie, travel retail, the Group own boutique and certain online ite; Active Cometic Diviion: product for borderline complexion (i.e. neither healthy nor problematic), old through all health channel uch a pharmacie, parapharmacie, drugtore and medipa. The non-allocated item include expene incurred by the Functional Diviion, fundamental reearch and the cot of tock option not allocated to the Cometic Diviion. It alo include activitie that are auxiliary to the Group core buinee, uch a inurance, reinurance and banking. The The Body Shop branch: The Body Shop offer a wide range of naturally inpired cometic and toiletry product. The brand, originally created in the United Kingdom, ditribute it product and expree it value through a large multi-channel network of excluive retail hop (in more than 60 countrie), a well a through home and online ale. The Body Shop net ale and operating profit are characteried by trong eaonal fluctuation due to a high level of activity during the lat few month of the year. The Dermatology branch, coniting of Galderma, a joint venture between L Oréal and Netlé, meet the need of dermatologit and their patient. Data by branch and by Diviion are prepared uing the ame accounting principle a thoe ued for the preparation of the conolidated financial tatement. The performance of each branch and Diviion i meaured on the bai of operating profit. A of July 1 t, 2013, Turkey and Irael were reclaified from the Africa, Middle Eat geographic zone to the Eatern Europe geographic zone. 120 REGISTRATION DOCUMENT / L ORÉAL 2013

2013 CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Data for 2012 and 2011 ha been adjuted to reflect thee change. million 2013 Sale Operating profit Operational aet (1) Invetment in property, plant and equipment and intangible aet Depreciation, amortiation and proviion Profeional Product 2,973.8 609.5 3,013.9 73.7 126.7 Conumer Product 10,873.2 2,166.7 6,449.2 531.6 494.3 L Oréal Luxury 5,865.2 1,174.2 4,382.5 222.8 239.2 Active Cometic 1,602.4 340.2 832.9 34.2 45.9 COSMETICS DIVISIONS TOTAL 21,314.5 4,290.6 14,678.5 862.3 906.1 Non-allocated -604.5 599.8 128.3 115.8 Cometic branch 21,314.5 3,686.1 15,278.3 990.6 1,021.9 The Body Shop branch 835.8 71.9 1,196.7 40.0 39.9 Dermatology branch 826.3 116.8 1,159.3 42.3 81.6 GROUP 22,976.6 3,874.8 17,634.3 1,072.9 1,143.4 (1) Operational aet mainly include goodwill, intangible aet and property, plant and equipment, trade account receivable and inventorie. million 2012 Sale Operating profit Operational aet (1) Invetment in property, plant and equipment and intangible aet Depreciation, amortiation and proviion Profeional Product 3,002.6 615.2 2,707.4 67.2 103.9 Conumer Product 10,713.2 2,050.8 6,563.2 483.1 402.0 L Oréal Luxury 5,568.1 1,077.0 4,592.1 199.9 197.2 Active Cometic 1,528.0 311.2 851.9 30.0 41.7 COSMETICS DIVISIONS TOTAL 20,811.9 4,054.3 14,714.6 780.2 744.8 Non-allocated -577.2 556.1 122.4 117.6 Cometic branch 20,811.9 3,477.1 15,270.7 902.6 862.4 The Body Shop branch 855.3 77.5 1,169.8 34.8 40.2 Dermatology branch 795.5 142.6 1,017.4 32.6 71.8 GROUP 22,462.7 3,697.3 17,457.9 970.0 974.4 4 (1) Operational aet mainly include goodwill, intangible aet and property, plant and equipment, trade account receivable and inventorie. million 2011 Sale Operating profit Operational aet (1) Invetment in property, plant and equipment and intangible aet Depreciation, amortiation and proviion Profeional Product 2,813.8 578.6 2,728.7 83.0 97.8 Conumer Product 9,835.2 1,859.0 6,167.0 427.6 344.8 L Oréal Luxury 4,800.1 926.3 4,304.5 160.7 184.9 Active Cometic 1,421.7 286.7 857.3 28.0 43.3 COSMETICS DIVISIONS TOTAL 18,870.8 3,650.6 14,057.5 699.3 670.8 Non-allocated -546.2 511.7 107.6 121.2 Cometic branch 18,870.8 3,104.4 14,569.2 806.9 792.0 The Body Shop branch 767.6 68.1 1,163.6 24.0 30.9 Dermatology branch 704.7 120.1 1,017.2 32.8 66.7 GROUP 20,343.1 3,292.6 16,750.0 863.7 889.6 (1) Operational aet mainly include goodwill, intangible aet and property, plant and equipment, trade account receivable and inventorie. REGISTRATION DOCUMENT / L ORÉAL 2013 121

4 NOTES 2013 CONSOLIDATED FINANCIAL STATEMENTS TO THE CONSOLIDATED FINANCIAL STATEMENTS Operational aet can be reconciled to the 2013, 2012 and 2011 balance heet a follow: million 2013 2012 2011 Operational aet 17,634.3 17,457.9 16,750.0 Non-current financial aet 9,208.3 8,531.3 6,900.9 Deferred tax aet (1) 676.5 723.6 677.3 Other current aet 1,171.9 994.9 883.0 Cah and cah equivalent 2,607.3 1,823.2 1,652.2 Non-allocated aet 13,664.0 12,073.0 10,113.5 TOTAL ASSETS 31,298.3 29,530.9 26,863.5 (1) Thee amount have been retated according to change in accounting policie (ee note 1). 3.2. Information by geographic zone All information i preented on the bai of geographic location of the ubidiarie. 3.2.1. CONSOLIDATED NET SALES BY GEOGRAPHIC ZONE 2013 Growth (%) 2012 2011 million % of total Publihed data Excluding exchange effect million % of total million % of total Wetern Europe 8,275.2 36.0% 1.5% 2.4% 8,156.2 36.3% 7,931.1 39.0% of which France 2,619.2 11.4% 3.6% 3.6% 2,528.6 11.3% 2,408.6 11.8% North America 5,866.7 25.5% 1.6% 5.4% 5,773.0 25.7% 4,932.1 24.2% New Market 8,834.7 38.5% 3.5% 10.1% 8,533.4 38.0% 7,479.9 36.8% GROUP 22,976.6 100.0% 2.3% 6.0% 22,462.7 100.0% 20,343.1 100.0% 3.2.2. COSMETICS NET SALES BY GEOGRAPHIC ZONE 2013 Growth (%) 2012 2011 million % of total Publihed data Excluding exchange effect million % of total million % of total Wetern Europe 7,483.4 35.1% 1.1% 1.9% 7,399.6 35.6% 7,246.6 38.4% of which France 2,548.5 12.0% 3.2% 3.2% 2,469.7 11.9% 2,355.7 12.5% North America 5,356.1 25.1% 2.8% 6.5% 5,210.7 25.0% 4,406.2 23.3% New Market 8,475.0 39.8% 3.3% 9.9% 8,201.6 39.4% 7,218.0 38.2% Aia, Pacific 4,382.2 20.6% 2.2% 8.3% 4,287.0 20.6% 3,619.5 19.2% Latin America 1,894.5 8.9% 3.7% 13.5% 1,826.6 8.8% 1,680.9 8.9% Eatern Europe 1,693.3 7.9% 4.2% 8.2% 1,624.6 7.8% 1,527.4 8.1% Africa, Middle Eat 505.1 2.4% 9.0% 17.1% 463.4 2.2% 390.2 2.1% COSMETICS BRANCH 21,314.5 100.0% 2.4% 6.1% 20,811.9 100.0% 18,870.8 100.0% 3.2.3. BREAKDOWN OF OPERATING PROFIT OF COSMETICS BRANCH BY GEOGRAPHIC ZONE million 2013 2012 2011 Wetern Europe 1,658.6 1,576.2 1,512.3 North America 1,003.1 959.7 810.1 New Market 1,628.9 1,518.4 1,328.1 COSMETICS DIVISIONS TOTAL 4,290.6 4,054.3 3,650.6 Non-allocated -604.5-577.2-546.2 COSMETICS BRANCH 3,686.1 3,477.1 3,104.4 122 REGISTRATION DOCUMENT / L ORÉAL 2013

2013 CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 3.2.4. BREAKDOWN OF OPERATIONAL ASSETS AND CONSOLIDATED INVESTMENTS BY GEOGRAPHIC ZONE million Operational aet 2013 2012 2011 Invetment in property, plant and equipment and intangible aet Operational aet Invetment in property, plant and equipment and intangible aet Operational aet Invetment in property, plant and equipment and intangible aet Wetern Europe 8,522.0 336.9 8,462.0 299.0 8,213.4 271.5 North America 4,643.7 261.2 4,699.6 212.5 4,486.9 190.4 New Market 3,868.8 346.5 3,740.2 336.1 3,538.0 294.3 Non-allocated 599.8 128.3 556.1 122.4 511.7 107.6 GROUP 17,634.3 1,072.9 17,457.9 970.0 16,750.0 863.7 NOTE 4 Peronnel cot and number of employee 4.1. Number of employee (1) 4 12.31.2013 12.31.2012 12.31.2011 Wetern Europe 31,794 30,798 30,155 North America 15,497 16,180 15,195 New Market 30,161 25,659 23,536 TOTAL 77,452 72,637 68,886 (1) Including proportionally conolidated companie. 4.2. Peronnel cot million 2013 2012 2011 Peronnel cot (including welfare contribution) 4,606.0 4,414.4 3,976.8 Peronnel cot include the penion expene (excluding the interet component), the cot of any hare-baed payment (tock option and free hare), and payroll taxe. The exceptional olidarity tax on high alarie amounting to 14.6 million i hown in Other operational income and expene (ee note 7) and i not included in peronnel cot. 4.3. Executive compenation Cot recorded in repect of compenation and imilar benefit granted to the Management Committee and the Board of Director can be analyed a follow: million 2013 2012 2011 Director fee 1.1 1.1 1.1 Salarie and benefit including employer welfare contribution 26.7 26.5 25.9 Employee retirement obligation charge 16.3 11.5 10.8 Share-baed payment (Stock option and free hare) 18.2 21.2 21.0 The number of executive who were member of the Management Committee wa 15 at December 31 t, 2013 a at December 31 t, 2012 and December 31 t, 2011. REGISTRATION DOCUMENT / L ORÉAL 2013 123

4 NOTES 2013 CONSOLIDATED FINANCIAL STATEMENTS TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 5 Depreciation and amortiation expene Depreciation and amortiation of property, plant and equipment and intangible aet included in operating expene amount to 900.1 million, 840.8 million and 742.2 million, repectively, for 2013, 2012 and 2011. NOTE 6 Foreign exchange gain and loe Foreign exchange gain and loe break down a follow: million 2013 2012 2011 Time value -28.3-73.7-39.6 Other foreign exchange gain and loe 61.0-66.1 13.2 TOTAL 32.7-139.8-26.4 Foreign currency tranaction are tranlated at the pot rate at the tranaction date. Aet and liabilitie denominated in foreign currencie have been tranlated uing the exchange rate effective at the cloing date. Foreign exchange gain and loe alo include the following item relating to derivative intrument: change in market value linked to variation in the time value; change in market value linked to variation in the pot rate between the inception of the hedge and the date on which the hedged tranaction are completed; reidual ineffectivene linked to exce hedge and recognied directly in the income tatement under other foreign exchange gain and loe for a poitive 0,2 million in 2013, for a negative 0.9 million in 2012 and a negative 0.2 million in 2011. Thee amount are allocated to the appropriate operating expene item a follow: million 2013 2012 2011 Cot of ale 39.3-121.2-15.2 Reearch and development -15.4 10.0-8.0 Advertiing and promotion 5.3-17.8-2.1 Selling, general and adminitrative expene 3.5-10.8-1.1 FOREIGN EXCHANGE GAINS AND LOSSES 32.7-139.8-26.4 124 REGISTRATION DOCUMENT / L ORÉAL 2013

2013 CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 7 Other operational income and expene Thi item break down a follow: million 2013 2012 2011 Capital gain and loe on dipoal of property, plant and equipment and intangible aet - 4.3 1.7 Impairment of property, plant and equipment and intangible aet (1) -35.4 - -69.9 Retructuring cot (2) -71.9-98.0-39.9 Other (3) -27.9-30.1 11.8 TOTAL -135.2-123.8-96.3 (1) Thee impairment charge mainly relate to: in 2013, the Club de Créateur de Beauté goodwill for 35.4 million following the deciion taken in November 2013 to ceae it activity; in 2011, the Softheen Caron brand and goodwill for 32.8 million and 31.8 million repectively a well a Sanoflore goodwill for 5.3 million. (2) Including: in 2013, the reorganiation of Indutrial and logitic activitie in Spain for 11.4 million, the termination of the ditribution of the Helena Rubintein brand in Spain and Portugal for 17.1 million, a voluntary departure plan implemented in Italy for 9.3 million, the deciion to ceae the Club de Créateur de Beauté activity for 28.7 million, a voluntary departure plan implemented at Galderma USA and the Spirig Group for 6.0 million and 7.0 million relating to the reveral of impairment charged againt the building of the Solon plant following it ale at the end of 2013 ; in 2012, the cot of pecialiing operation in European factorie for 16.6 million, of ale force adjutment in Germany for 5.1 million, of reorganiing indutrial operation within the Profeional Product Diviion in the US for 35.1 million, and of treamlining logitic activitie in the Salon Centric Diviion which upplie American hair alon for 27.0 million; in 2011, the reorganiation of indutrial operation in the United State for 34.6 million. (3) In 2013; cot relating to acquiition for 11.7 million, the exceptional olidarity tax on high alarie for 14.6 million; in 2012, the reviion of rik relating to invetigation carried out by competition authoritie for 3.1 million (ee note 22.1) a well a cot relating to acquiition for 12.9 million and reviion of the earn out claue regarding Eie Cometic for 10.4 million; in 2011, the poitive reviion of rik relating to invetigation carried out by competition authoritie for 23 million (ee note 22.1) a well a cot relating to the acquiition of Q-Med and Pacific Biocience Laboratorie Inc. for 9.6 million and reviion of the earn out claue regarding Eie Cometic for 3.0 million. 4 NOTE 8 Other financial income and expene Thi item break down a follow: million 2013 2012 2011 Other financial income - - 0.9 Interet component of penion cot (1) -40.1 - - Other financial expene -7.0-7.8-6.5 TOTAL -47.1-7.8-5.6 (1) See note 1. NOTE 9 Income tax 9.1. Detailed breakdown of income tax million 2013 2012 2011 Current tax 1,055.7 988.2 939.9 Deferred tax 7.3 17.3 85.9 INCOME TAX 1,063.0 1,005.5 1,025.8 REGISTRATION DOCUMENT / L ORÉAL 2013 125

4 NOTES 2013 CONSOLIDATED FINANCIAL STATEMENTS TO THE CONSOLIDATED FINANCIAL STATEMENTS 9.2. Analyi of tax charge The income tax charge may be analyed a follow: million 2013 2012 2011 Profit before tax and non-controlling interet 4,024.4 3,875.9 3,466.7 Theoretical tax rate 30.26% 29.83% 29.91% Expected tax charge 1,217.9 1,156.1 1,036.7 Impact of permanent difference (1) 46.4 8.7 54.9 Impact of tax rate difference (2) -143.0-103.2-50.4 Change in unrecognied deferred taxe -4.0 2.6-8.4 Other (3) -54.3-58.7-7.0 GROUP TAX CHARGE 1,063.0 1,005.5 1,025.8 (1) In 2013, thi amount include 41 million relating to the 3% additional levy on dividend paid. (2) In 2012, thi amount included + 25 million relating to the revaluation of the tax on fair value of Sanofi hare. (3) Including tax credit, withholding taxe on ditribution, tax reaement and proviion for tax liabilitie. Thi amount include in 2013 a tax reimburement in China relating to fical year 2008 to 2011 following a change in tax legilation of 24 million in 2013 compared with 35 million in 2012. The expected tax charge reflect, for each country, the um of pre-tax profit multiplied by the normal taxation rate. The theoretical tax rate reflect the total expected tax charge a a percentage of profit before tax and non-controlling interet. 9.3. Deferred taxe in the balance heet The net change in deferred taxe (aet and liabilitie) can be analyed a follow: million Balance of deferred tax aet at December 31 t, 2010 (1) 631.2 Balance of deferred tax liabilitie at December 31 t, 2010 (1) -463.1 Income tatement impact -85.9 Tranlation difference -5.6 Other effect (2) -77.4 Balance of deferred tax aet at December 31 t, 2011 (1) 677.3 Balance of deferred tax liabilitie at December 31 t, 2011 (1) -678.1 Income tatement impact -17.3 Tranlation difference -7.6 Other effect (2) -15.4 Balance of deferred tax aet at December 31 t, 2012 (1) 723.6 Balance of deferred tax liabilitie at December 31 t, 2012 (1) -764.7 Income tatement impact -7.3 Tranlation difference -10.8 Other effect (2) -68.3 Balance of deferred tax aet at December 31 t, 2013 676.5 Balance of deferred tax liabilitie at December 31 t, 2013-804.0 (1) Thee amount have been retated according to change in accounting policie (ee note 1). (2) Including mainly the tax effect on actuarial gain and loe recognied in equity and in 2011 on newly conolidated companie for 100 million. 126 REGISTRATION DOCUMENT / L ORÉAL 2013

2013 CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Deferred tax aet and liabilitie recorded in the balance heet may be broken a follow: million 12.31.2013 12.31.2012 (2) 12.31.2011 (2) Deferred tax aet Deferred tax liabilitie Deferred tax aet Deferred tax liabilitie Deferred tax aet Deferred tax liabilitie Temporary difference 661.4 444.8 709.5 433.5 651.4 461.9 Deferred tax liabilitie on remeaurement of Sanofi (1) 359.2 331.2 216.2 Tax credit and tax lo carry-forward 15.1 14.1 25.9 DEFERRED TAX TOTAL 676.5 804.0 723.6 764.7 677.3 678.1 (1) In 2012, the deferred tax rate increaed to 4.13% (3.44% in 2011 and 1.72% in 2010). (2) Thee amount have been retated according to change in accounting policie (ee note 1). Deferred tax aet on temporary difference mainly relate to proviion for penion and early retirement ( 268.3 million, 364.5 million and 327.1 million, repectively, at the end of 2013, 2012 and 2011) and proviion for liabilitie and charge ( 173.9 million, 191.6 million and 164.1 million, repectively, at the end of 2013, 2012 and 2011). Deferred tax liabilitie on temporary difference mainly relate to intangible aet acquired in the context of buine combination other than non tax-deductible goodwill. Deferred tax aet whoe recovery i not conidered probable are not recorded in the financial tatement; uch aet amount to 53.1 million at December 31 t, 2013 compared with 66.0 million at December 31 t, 2012 and 67.5 million at December 31 t, 2011. 4 NOTE 10 Net profit attributable to owner of the company excluding non-recurring item Earning per hare 10.1. Reconciliation with net profit Net profit attributable to owner of the company excluding non-recurring item reconcile a follow with net profit attributable to owner of the company: million 2013 2012 2011 Net profit attributable to owner of the company 2,958.2 2,867.7 2,438.4 Capital gain and loe on property, plant and equipment and intangible aet - -4.3-1.7 Impairment of property, plant and equipment and intangible aet 35.4-69.9 Retructuring cot 71.9 98.0 39.9 Other 27.9 30.1-11.8 Tax effect on non-recurring item -17.3-44.8-33.0 Effect of change in tax rate on the deferred tax liability ariing on the remeaurement of Sanofi - 25.0 62.0 Tax effect on the acquiition of Pacific Biocience Laboratorie Inc. - - 19.2 3% additional levy on paid dividend (1) 41.4 - - NET PROFIT ATTRIBUTABLE TO OWNERS OF THE COMPANY EXCLUDING NON-RECURRING ITEMS 3,117.5 2,971.7 2,582.9 (1) The 3% additional levy on the amount of dividend paid by L Oréal repreent an additional tax payment on pat profit ditribution and depending on deciion made at the Annual General Meeting. So a not to ditort the preentation of the Group operational performance in the period, thi urtax i recognied on the income tax line of the income tatement a a non-recurring item. REGISTRATION DOCUMENT / L ORÉAL 2013 127

4 NOTES 2013 CONSOLIDATED FINANCIAL STATEMENTS TO THE CONSOLIDATED FINANCIAL STATEMENTS 10.2. Earning per hare The table below et out earning per hare attributable to owner of the company (excluding the dilutive impact of hare carrying preferential dividend right, ee note 10.5): 2013 Net profit attributable to owner of the company ( million) Number of hare Earning per hare attributable to owner of the company ( ) Earning per hare 2,958.2 597,734,044 4.95 Stock option - 8,053,243 - Free hare - 2,214,120 - DILUTED EARNINGS PER SHARE 2,958.2 608,001,407 4.87 2012 Net profit attributable to owner of the company ( million) Number of hare Earning per hare attributable to owner of the company ( ) Earning per hare 2,867.7 598,482,929 4.79 Stock option - 5,491,789 - Free hare - 1,330,740 - DILUTED EARNINGS PER SHARE 2,867.7 605,305,458 4.74 2011 Net profit attributable to owner of the company ( million) Number of hare Earning per hare attributable to owner of the company ( ) Earning per hare 2,438.4 592,763,295 4.11 Stock option - 4,247,654 - Free hare - 622,154 - DILUTED EARNINGS PER SHARE 2,438.4 597,633,103 4.08 10.3. Earning per hare excluding non-recurring item The table below et out in detail earning per hare attributable to owner of the company excluding non-recurring item (excluding the dilutive impact of hare carrying preferential dividend right, ee note 10.5): 2013 Net profit attributable to owner of the company excluding non-recurring item ( million) Number of hare Earning per hare attributable to owner of the company excluding non-recurring item ( ) Earning per hare excluding non-recurring item 3,117.5 597,734,044 5.22 Stock option - 8,053,243 - Free hare - 2,214,120 - DILUTED EARNINGS PER SHARE EXCLUDING NON-RECURRING ITEMS 3,117.5 608,001,407 5.13 2012 Net profit attributable to owner of the company excluding non-recurring item ( million) Number of hare Earning per hare attributable to owner of the company excluding nonrecurring item ( ) Earning per hare excluding non-recurring item 2,971.7 598,482,929 4.97 Stock option - 5,491,789 - Free hare - 1,330,740 - DILUTED EARNINGS PER SHARE EXCLUDING NON-RECURRING ITEMS 2,971.7 605,305,458 4.91 128 REGISTRATION DOCUMENT / L ORÉAL 2013

2013 CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 2011 Net profit attributable to owner of the company excluding non-recurring item ( million) Number of hare Earning per hare attributable to owner of the company excluding nonrecurring item ( ) Earning per hare excluding non-recurring item 2,582.9 592,763,295 4.36 Stock option - 4,247,654 - Free hare - 622,154 - DILUTED EARNINGS PER SHARE EXCLUDING NON-RECURRING ITEMS 2,582.9 597,633,103 4.32 10.4. Calculation of the number of hare The table below et out the number of potential ordinary hare excluded from the calculation of earning per hare a they correpond to tock option plan with no dilutive effect on the period preented: 2013 2012 2011 Stock option plan - 1,445,000 10,676,150 10.5. Diluted earning per hare including the impact of hare carrying preferential dividend right 4 The table below how the calculation of diluted earning per hare taking into account the 10% preferential dividend payable for 2013 on hare held continuouly in regitered form between December 31 t, 2011 and the 2014 dividend payment date. The number of hare eligible for the preferential dividend cannot exceed 0.5% of the hare capital for any one hareholder. 2013 Number of hare Diluted earning per hare Share carrying ordinary dividend right 571,878,438 4.84 Share carrying preferential dividend right 34,023,449 5.32 2012 Number of hare Diluted earning per hare Share carrying ordinary dividend right 572,786,868 4.71 Share carrying preferential dividend right 32,518,590 5.18 2011 Number of hare Diluted earning per hare Share carrying ordinary dividend right 565,632,481 4.06 Share carrying preferential dividend right 32,000,622 4.46 REGISTRATION DOCUMENT / L ORÉAL 2013 129

4 NOTES 2013 CONSOLIDATED FINANCIAL STATEMENTS TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 11 Goodwill Goodwill i allocated by Cah-Generating Unit or by group of Cah-Generating Unit. A Cah-Generating Unit conit of one or more worldwide trademark. The methodology ued to carry out impairment tet i decribed in note 1. million 2013 12.31.2012 Acquiition/ Dipoal Other movement 12.31.2013 L Oréal Profeionnel/Kératae 351.6 0.6-7.7 344.6 Matrix 356.3 14.5-15.3 355.4 Redken/PureOlogy 485.2-16.2 469.0 Profeional Product Total 1,193.1 15.1-39.2 1,169.0 L Oréal Pari 775.5-4.9 770.6 Maybelline/Garnier 1,087.9-34.4 1,053.4 LaScad 156.4 2.7 159.1 Other 100.0 49.0-42.3 106.7 Conumer Product Total 2,119.8 51.7-81.7 2,089.8 Lancôme 780.8-1.8 779.0 Shu Uemura 146.5-28.8 117.7 YSL Beauté 519.8 519.8 Perfume 334.7-334.7 Clarionic 266.3-8.8 257.5 Urban Decay 126.1 2.0 128.0 Other 63.8-0.3 63.5 L Oréal Luxury Total 2,238.0-37.7 2,200.3 Vichy/Dermablend 268.9-1.8 267.1 Other 110.2-2.2 108.0 Active Cometic Total 379.1-4.1 375.1 Other - - The Body Shop 340.1 40.0-8.3 371.8 Dermatology 208.1 50.7-7.2 251.6 GROUP TOTAL 6,478.2 157.4-178.0 6,457.6 2013 acquiition mainly relate to Spirig, Interbeauty and Emporio Body Store. No ignificant dipoal took place during 2013. Other movement mainly reflect the negative impact of change in exchange rate for 146.4 million and total impairment lo taken againt the full amount of Club de Créateur de Beauté goodwill for 35.3 million. The accumulated impairment loe relating to SoftSheen Caron, Yue Sai, Sanoflore and Club de Créateur de Beauté amount to 125.2 million, 29.1 million, 35.7 million and 34.7 million repectively, at December 31 t, 2013. 130 REGISTRATION DOCUMENT / L ORÉAL 2013

2013 CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS million 2012 12.31.2011 Acquiition/Dipoal Other movement 12.31.2012 L Oréal Profeionnel/Kératae 348.1 5.5-2.0 351.6 Matrix 343.0 18.1-4.8 356.3 Redken/PureOlogy 492.6-7.4 485.2 Profeional Product Total 1,183.7 23.6-14.2 1,193.1 L Oréal Pari 773.8 1.7 775.5 Maybelline/Garnier 1,102.7-14.8 1,087.9 Cadum - 156.4 156.4 Other 98.2 3.3-1.5 100.0 Conumer Product Total 1,974.7 159.7-14.6 2,119.8 Lancôme 780.8 780.8 Shu Uemura 163.9-17.4 146.5 YSL Beauté 519.8 519.8 Perfume 334.0 0.7 334.7 Clarionic 260.0 6.3 266.3 Urban Decay - 126.4-0.3 126.1 Other 63.6 0.2 63.8 L Oréal Luxury Total 2,122.1 126.4-10.5 2,238.0 Vichy/Dermablend 269.4-0.5 268.9 Other 110.8-0.6 110.2 Active Cometic Total 380.2-1.1 379.1 Other 9.2-9.2 - The Body Shop 330.8 1.6 7.7 340.1 Dermatology 203.9 4.2 208.1 GROUP TOTAL 6,204.6 311.3-37.7 6,478.2 4 2012 acquiition mainly relate to Cadum, Urban Decay and Emiliani Enterprie for 306.4 million. No ignificant dipoal took place during 2012. Other movement mainly reflect the negative impact of change in exchange rate for 48.4 million, partly offet by the allocation of the purchae price of Clarionic for 10.6.million. No impairment lo ha been recorded on 2012. The accumulated impairment loe relating to SoftSheen Caron, Yue Sai and Sanoflore amount to 133.4 million, 29.5 million and 35.7 million repectively, at December 31 t, 2012. REGISTRATION DOCUMENT / L ORÉAL 2013 131

4 NOTES 2013 CONSOLIDATED FINANCIAL STATEMENTS TO THE CONSOLIDATED FINANCIAL STATEMENTS million 2011 12.31.2010 Acquiition/ Dipoal Other movement 12.31.2011 L Oréal Profeionnel/Kératae 343.1 5.0 348.1 Matrix 296.3 6.5 40.2 343.0 Redken/PureOlogy 467.7 0.9 24.0 492.6 Other 31.9-31.9 - Profeional Product Total 1,139.0 7.4 37.3 1,183.7 L Oréal Pari 768.1 5.7 773.8 Maybelline/Garnier 1,079.0 23.7 1,102.7 SoftSheen Caron 45.0-32.7 12.3 Other 84.9 1.0 85.9 Conumer Product Total 1,977.0-2.3 1,974.7 Lancôme 775.2 5.6 780.8 Shu Uemura 152.5 11.4 163.9 YSL Beauté 519.8 519.8 Perfume 334.0 334.0 Clarionic - 260.8-0.8 260.0 Other 63.4 0.2 63.6 L Oréal Luxury Total 1,844.9 260.8 16.4 2,122.1 Vichy/Dermablend 268.0 1.4 269.4 Other 114.4-3.6 110.8 Active Cometic Total 382.4-2.2 380.2 Other 9.2 9.2 The Body Shop 321.8 1.1 7.9 330.8 Dermatology 55.3 149.5-0.9 203.9 GROUP TOTAL 5,729.6 418.8 56.2 6,204.6 2011 acquiition mainly relate to Arex GmbH, Q-Med and Pacific Biocience Laboratorie Inc. (Clarionic) for 415.6 million. No ignificant dipoal took place during 2011. Other movement mainly reflect the poitive impact of change in exchange rate for 82.7 million, partly offet by the allocation of the purchae price of the Peel Salon Service for 6.1 million and by impairment loe on Softheen Caron for 31.8 million and on Sanoflore for 5.3 million (included in the Other line of Active Cometic). Impairment loe have been recorded againt thee Cah- Generating Unit a their performance did not meet forecat. The accumulated impairment loe relating to Softheen Caron, Yue Sai and Sanoflore amount to 136.8 million, 29.8 million and 35.7 million, repectively, at December 31 t, 2011. 132 REGISTRATION DOCUMENT / L ORÉAL 2013

2013 CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 12 Other intangible aet million 2013 12.31.2012 Acquiition/ Amortiation Dipoal/ Reveral Change in the cope of conolidation (1) Other movement 12.31.2013 Brand with indefinite ueful life (2) 1,539.1 11.2-54.8 1,495.5 Amortiable brand and product range 79.4 1.0-1.7 19.3-0.8 97.2 Licence and patent 943.0 22.4-0.6 7.4-19.2 952.9 Software 791.9 65.1-25.1 0.2-2.7 829.2 Other 498.8 69.4-5.9 0.0-26.6 535.8 Gro value 3,852.2 157.8-33.4 38.0-104.1 3,910.5 Brand with indefinite ueful life 103.2-1.9 101.4 Amortiable brand and product range 58.0 7.5-1.7-1.0 62.8 Licence and patent 360.6 51.8-0.6 0.1-7.5 404.3 Software 524.6 102.0-25.1 0.0-18.8 582.7 Other 180.5 40.7-3.7-5.8 211.7 Amortiation and proviion 1,226.8 201.9-31.0 0.1-34.9 1,362.9 Other intangible aet net 2,625.4-44.1-2.3 37.9-69.2 2,547.7 4 (1) Thi item conit mainly of change in the cope of conolidation reulting from Spirig, Vogue and Interbeauty. (2) At December 31 t, 2013, brand with an indefinite ueful life conit mainly of The Body Shop ( 497.3 million), Matrix ( 268.1 million), Kiehl ( 120.4 million), Shu Uemura ( 98.8 million) and Clarionic ( 82.3 million). Other movement mainly conited of the negative change in exchange rate over the period. Accumulated impairment loe amount to 14.0 million on Biomedic, 39.9 million on Yue Sai and 47.5 million on Softheen Caron at December 31 t, 2013. million 2012 12.31.2011 Acquiition/ Amortiation Dipoal/ Reveral Change in the cope of conolidation (1) Other movement 12.31.2012 Brand with indefinite ueful life (2) 1,454.3 95.3-10.5 1,539.1 Amortiable brand and product range 74.4 2.8 2.2 79.4 Licence and patent 930.4 19.6-10.2 3.2 943.0 Software 538.6 65.2-10.5 0.3 198.3 791.9 Other 459.8 31.9-0.9 40.1-32.1 498.8 Gro value 3,457.5 119.5-21.6 137.9 158.9 3,852.2 Brand with indefinite ueful life 104.3-1.1 103.2 Amortiable brand and product range 54.8 3.5-0.3 58.0 Licence and patent 319.1 52.4-10.4-0.5 360.6 Software 350.2 93.6-11.0 0.1 91.7 524.6 Other 151.9 29.8-0.4-0.8 180.5 Amortiation and proviion 980.2 179.3-21.8 0.1 89.0 1,226.8 Other intangible aet net 2,477.3-59.8 0.2 137.8 69.9 2,625.4 (1) Thi item conit mainly of change in the cope of conolidation reulting from Cadum, Urban Decay and Emiliani Enterprie. (2) At December 31 t, 2012, brand with an indefinite ueful life conit mainly of The Body Shop ( 507.8 million), Matrix ( 276.8 million), Kiehl ( 123.8 million), Shu Uemura ( 117.2 million) and Clarionic ( 85.1 million). Other movement mainly conited of the reclaification of oftware from property, plant and equipment to intangible aet for 79.3 million, offet by change in exchange rate with a negative 12.7 million impact over the period. Accumulated impairment loe amount to 14.0 million on Biomedic, 40.4 million on Yue Sai and 48.9 million on Softheen Caron at December 31 t, 2012. REGISTRATION DOCUMENT / L ORÉAL 2013 133

4 NOTES 2013 CONSOLIDATED FINANCIAL STATEMENTS TO THE CONSOLIDATED FINANCIAL STATEMENTS million 2011 12.31.2010 Acquiition/ Amortiation Dipoal/ Reveral Change in the cope of conolidation (1) Other movement 12.31.2011 Brand with indefinite ueful life (2) 1,295.5 119.9 38.9 1,454.3 Amortiable brand and product range 66.8 0.7 5.0 2.0 74.4 Licence and patent 725.6 9.0-0.1 185.5 10.4 930.4 Other 906.5 98.6-23.2 9.7 6.9 998.4 Gro value 2,994.3 108.3-23.3 320.1 58.2 3,457.5 Brand with indefinite ueful life (2) 66.3 32.8 5.3 104.3 Amortiable brand and product range 48.6 3.7 2.5 54.8 Licence and patent 270.9 42.4-0.1-0.7 6.6 319.1 Other 431.2 88.3-23.2 5.8 502.1 Amortiation and proviion 816.9 167.2-23.3-0.7 20.1 980.2 Other intangible aet net 2,177.5-58.9 0.0 320.8 38.0 2,477.3 (1) Thi item conit mainly of change in the cope of conolidation reulting from Arex GmbH, Q-Med and Pacific Biocience Laboratorie Inc. (2) At December 31 t, 2011, brand with an indefinite ueful life conit mainly of The Body Shop ( 495.8 million), Matrix ( 281.1 million), Kiehl ( 125.6 million), Shu Uemura ( 129.3 million) and Clarionic ( 86.5 million). (3) Impairment loe were recognied during the period againt the Softheen Caron brand, for 32.8 million. Other movement mainly conited of change in exchange rate with a poitive 44.1 million impact over the period, a well a the allocation of the purchae price of the American ditributor acquired in 2010 (hown on the Other line for 9.8 million). Accumulated impairment loe amount to 14.0 million on Biomedic, 40.8 million on Yue Sai and 49.5 million on Softheen Caron at December 31 t, 2011. 134 REGISTRATION DOCUMENT / L ORÉAL 2013

2013 CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 13 Impairment tet on intangible aet Impairment tet of Cah-Generating Unit for which the carrying amount of goodwill and intangible aet with indefinite ueful live i ignificant, are carried out baed on the following data and aumption: Dicount rate (%) million Net carrying amount of goodwill and brand with indefinite ueful live International excluding USA 2013 TEST Maybelline/Garnier 1,053.4 7.9 8.9 The Body Shop 869.1 8.5 (1) Lancôme 779.0 7.9 8.9 L Oréal Pari 770.6 7.9 8.9 Matrix 623.6 7.9 8.9 Redken/PureOlogy 528.3 7.9 8.9 YSL Beauté 519.8 7.9 (1) L Oréal Profeionnel/Kératae 344.6 7.9 8.9 Clarionic 339.8 7.9 8.9 Vichy/Dermablend 302.3 7.9 (1) 2012 TEST Maybelline/Garnier 1,087.9 7.9 8.9 The Body Shop 847.9 7.9 (1) Lancôme 780.8 7.9 8.9 L Oréal Pari 775.5 7.9 8.9 Matrix 633.1 7.9 8.9 Redken/PureOlogy 546.9 7.9 8.9 YSL Beauté 519.8 7.9 (1) L Oréal Profeionnel/Kératae 351.6 7.9 8.9 Clarionic 351.4 7.9 8.9 Vichy/Dermablend 304.7 7.9 (1) 2011 TEST Maybelline/Garnier 1,102.7 7.9 8.9 The Body Shop 826.6 7.9 (1) Lancôme 780.8 7.9 8.9 L Oréal Pari 773.8 7.9 8.9 Matrix 624.1 7.9 8.9 Redken/PureOlogy 555.6 7.9 8.9 YSL Beauté 519.8 7.9 (1) L Oréal Profeionnel/Kératae 348.1 7.9 8.9 Clarionic 346.5 7.9 8.9 Vichy/Dermablend 305.4 7.9 (1) USA 4 (1) Since the USD amount for the YSL Beauté, The Body Shop and Vichy/Dermablend CGU are not material, no pecific dicount rate ha been ued in thi repect. At December 31 t, 2013, a 1-point increae in the dicount rate on all Cah-Generating Unit would not lead to an impairment lo. The terminal growth rate i conitent in accordance with market data, i.e. 3%. A 1-point decreae in the terminal growth rate on all Cah- Generating Unit would not lead to an impairment lo. A 1-point decreae in the margin rate over the buine plan period on all Cah-Generating Unit would not lead to an impairment lo. REGISTRATION DOCUMENT / L ORÉAL 2013 135

4 NOTES 2013 CONSOLIDATED FINANCIAL STATEMENTS TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 14 Property, plant and equipment million 2013 12.31.2012 Acquiition/ Depreciation Dipoal/ Reveral Tranlation difference Other movement (1) 12.31.2013 Land and building 1,993.1 76.8-21.7-60.5 103.6 2,091.2 Machinery and equipment 2,876.0 205.7-150.5-95.5 24.6 2,860.3 Point-of-ale advertiing: tand and diplay 1,356.0 273.8-186.3-69.4 30.8 1,405.0 Other property, plant and equipment and fixed aet in progre 1,346.1 358.9-69.4-67.0-197.3 1,371.5 Gro value 7,571.1 915.1-427.8-292.4-38.2 7,727.9 Land and building 1,033.4 73.4-16.1-19.8 0.4 1,071.3 Machinery and equipment 1,970.5 243.1-148.4-52.8-59.2 1,953.2 Point-of-ale advertiing: tand and diplay 914.6 274.9-186.1-45.2 0.2 958.3 Other property, plant and equipment 689.9 106.8-68.7-30.5-6.5 691.1 Depreciation and proviion 4,608.4 698.2-419.3-148.3-65.1 4,673.9 Property, plant and equipment net 2,962.8 216.9-8.5-144.1 26.9 3,054.1 (1) Thee mainly include the impact of change in the cope of conolidation and fixed aet in progre allocated to other fixed aet. million 2012 12.31.2011 Acquiition/ Depreciation Dipoal/ Reveral Tranlation difference Other movement (1) 12.31.2012 Land and building 1,888.8 98.0-14.1-12.2 32.6 1,993.1 Machinery and equipment 2,747.1 185.6-79.7-25.4 48.4 2,876.0 Point-of-ale advertiing: tand and diplay 1,245.4 281.6-185.8-5.4 20.1 1,356.0 Other property, plant and equipment and fixed aet in progre 1,425.7 285.4-46.4-17.1-301.5 1,346.1 Gro value 7,307.0 850.6-326.0-60.1-200.4 7,571.1 Land and building 979.1 72.1-12.1-5.5-0.3 1,033.4 Machinery and equipment 1,864.0 231.1-76.2-15.0-33.4 1,970.5 Point-of-ale advertiing: tand and diplay 842.6 258.8-184.9-2.0 0.0 914.6 Other property, plant and equipment 740.5 99.4-46.1-8.0-95.9 689.9 Depreciation and proviion 4,426.2 661.4-319.4-30.5-129.5 4,608.4 Property, plant and equipment net 2,880.8 189.1-6.6-29.6-70.9 2,962.8 (1) Thee mainly include the impact of change in the cope of conolidation and fixed aet in progre allocated to other fixed aet item a well a the reclaification of oftware within intangible aet for a gro value of 176.8 million and a net amount of 79.3 million. million 2011 12.31.2010 Acquiition/ Depreciation Dipoal/ Reveral Tranlation difference Other movement (1) 12.31.2011 Land and building 1,729.4 65.2-35.2 2.3 127.1 1,888.8 Machinery and equipment 2,585.3 156.9-78.7-1.6 85.2 2,747.1 Point-of-ale advertiing: tand and diplay 1,161.0 245.7-191.5 18.5 11.7 1,245.4 Other property, plant and equipment and fixed aet in progre 1,337.5 287.7-64.4 19.2-154.3 1,425.7 Gro value 6,813.2 755.5-369.8 38.4 69.7 7,307.0 Land and building 924.8 68.2-28.3 2.8 11.6 979.1 Machinery and equipment 1,725.2 209.3-75.8 2.6 2.7 1,864.0 Point-of-ale advertiing: tand and diplay 797.9 223.1-190.5 10.8 1.3 842.6 Other property, plant and equipment 687.8 107.1-63.4 12.6-3.5 740.5 Depreciation and proviion 4,135.7 607.7-358.0 28.8 12.1 4,426.2 Property, plant and equipment net 2,677.5 147.7-11.8 9.6 57.7 2,880.8 (1) Thee mainly include the impact of change in the cope of conolidation and fixed aet in progre allocated to other fixed aet item. 136 REGISTRATION DOCUMENT / L ORÉAL 2013

2013 CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Property, plant and equipment include capital leae contract for the following amount: million 12.31.2013 12.31.2012 12.31.2011 Land and building 80.6 114.4 113.4 Machinery and equipment 2.2 2.3 2.4 Other property, plant and equipment and fixed aet in progre 25.5 20.5 18.8 Gro value 108.3 137.2 134.6 Depreciation 54.6 70.4 63.1 Net value 53.7 66.8 71.5 NOTE 15 Non-current financial aet million Financial aet available-for-ale Carrying amount 12.31.2013 12.31.2012 12.31.2011 Acquiition cot Carrying amount Acquiition cot Carrying amount Acquiition cot Sanofi (1) 9,117.7 4,033.5 8,440.2 4,033.5 6,709.4 4,033.5 Unlited ecuritie (2) 6.8 8.7 5.1 7.3 6.0 7.1 Financial aet at amortied cot Non-current loan and receivable 83.8 88.7 86.0 90.8 185.6 190.6 TOTAL 9,208.3 4,130.8 8,531.3 4,131.6 6,900.9 4,231.2 4 (1) L Oréal take in Sanofi wa 8.93% at December 31 t, 2013. The carrying amount at December 31 t, 2011, December 31 t, 2012 and December 31 t, 2013 ( 6,709.4 million, 8,440.2 million and 9,117.7 million repectively) correpond to the market value of the hare baed on the cloing price at each of thee date ( 56.75, 71.39 and 77.12 repectively). The acquiition cot of 4,033.5 million correpond to an entry cot of 34.12. (2) A the fair value of unlited ecuritie cannot be reliably determined, they are tated at cot le any impairment loe. NOTE 16 Inventorie million 12.31.2013 12.31.2012 12.31.2011 Finihed product and conumable 1,885.8 1,792.4 1,839.8 Raw material, packaging and emi-finihed product 522.3 472.7 438.9 Gro value 2,408.1 2,265.1 2,278.7 Valuation allowance 249.5 231.3 226.7 Inventorie net 2,158.6 2,033.8 2,052.1 REGISTRATION DOCUMENT / L ORÉAL 2013 137

4 NOTES 2013 CONSOLIDATED FINANCIAL STATEMENTS TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 17 Trade account receivable million 12.31.2013 12.31.2012 12.31.2011 Gro value 3,297.4 3,253.1 3,042.3 Valuation allowance 43.9 44.3 46.2 Net value 3,253.5 3,208.8 2,996.2 Trade account receivable are due within one year. Group policy i to recommend credit inurance coverage a far a local condition allow. The non-collection rik on trade receivable i therefore minimied, and thi i reflected in the level of the allowance, which i le than 2% of gro receivable at the end of 2013. NOTE 18 Other current aet million 12.31.2013 12.31.2012 12.31.2011 Tax and employee-related receivable (excluding income tax) 354.7 336.8 309.2 Prepaid expene 235.4 234.3 231.3 Derivative 205.5 162.5 114.0 Other current aet 372.3 273.0 249.6 TOTAL 1,167.9 1,006.6 904.1 NOTE 19 Cah and cah equivalent million 12.31.2013 12.31.2012 12.31.2011 Carrying amount Acquiition cot Carrying amount Acquiition cot Carrying amount Acquiition cot Marketable ecuritie 1,024.2 1,023.9 150.0 150.1 598.2 597.0 Bank account and other cah and cah equivalent 1,583.1 1,583.1 1,673.2 1,673.2 1,054.0 1,054.0 TOTAL 2,607.3 2,607.0 1,823.2 1,823.3 1,652.2 1,651.0 Marketable ecuritie conit mainly of SICAV money-market fund and unit trut (on which the return i baed on EONIA). Marketable ecuritie are conidered a Financial aet available-for-ale. Unrealied gain amount to 0.3 million in 2013 compared with - 0.1 million and 1.2 million, repectively, in 2012 and in 2011. Term account with a maturity of le than 3 month at inception are hown on the Bank account and other cah and cah equivalent line. 138 REGISTRATION DOCUMENT / L ORÉAL 2013

2013 CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 20 Equity 20.1. Share capital and additional paid in capital Share capital conit of 605,901,887 hare with a par value of 0.20 at December 31 t, 2013, following the exercie of ubcription option for 5,961,501 hare and 238,200 free hare and the cancellation of 9,108,641 hare. Share capital conited of 608,810,827 hare with a par value of 0.20 at December 31 t, 2012, following the exercie of ubcription option for 5,826,745 hare. Share capital conited of 602,984,082 hare with a par value of 0.20 at December 31 t, 2011, following the exercie of ubcription option for 1,991,097 hare and 400 free hare. 20.2. Treaury tock Share acquired under the hareholder-approved L Oréal hare buyback programme are deducted from conolidated equity. Capital gain or loe relating to thee hare are alo recorded in equity net of tax. A) 2013 The change in the number of hare in 2013 wa a follow: In hare Share capital Treaury tock Common hare outtanding AT 01.01.2013 608,810,827-10,454,165 598,356,662 Share cancelled -9,108,641 9,108,641 - Option and free hare exercied 6,199,701 1,224,058 7,423,759 Treaury tock purchaed - -5,986,391-5,986,391 AT 12.31.2013 605,901,887-6,107,857 599,794,030 4 The change in Treaury tock in 2013 i a follow: In hare Buyback programme Allocated to tock option/free hare plan Total million AT 01.01.2013 5,077,250 5,376,915 10,454,165 904.5 Share cancelled -9,108,641-9,108,641-998.5 Option and free hare exercied -1,224,058-1,224,058-81.7 Treaury tock purchaed 5,986,391 5,986,391 743.8 AT 12.31.2013 1,955,000 4,152,857 6,107,857 568.1 million 244.5 323.6 568.1 B) 2012 The change in the number of hare in 2012 wa a follow: In hare Share capital Treaury tock Common hare outtanding AT 01.01.2012 602,984,082-8,597,659 594,386,423 Share cancelled - Option and free hare exercied 5,826,745 3,220,744 9,047,489 Treaury tock purchaed - -5,077,250-5,077,250 AT 12.31.2012 608,810,827-10,454,165 598,356,662 The change in Treaury tock in 2012 i a follow: In hare Buyback programme Allocated to tock option/free hare plan Total million AT 01.01.2012-8,597,659 8,597,659 644.4 Share cancelled Option and free hare exercied -3,220,744-3,220,744-239.1 Treaury tock purchaed 5,077,250-5,077,250 499.2 AT 12.31.2012 5,077,250 5,376,915 10,454,165 904.5 million 499.2 405.3 904.5 REGISTRATION DOCUMENT / L ORÉAL 2013 139

4 NOTES 2013 CONSOLIDATED FINANCIAL STATEMENTS TO THE CONSOLIDATED FINANCIAL STATEMENTS C) 2011 The change in the number of hare in 2011 wa a follow: In hare Share capital Treaury tock Common hare outtanding AT 01.01.2011 600,992,585-11,336,682 589,655,903 Share cancelled - Option and free hare exercied 1,991,497 2,739,023 4,730,520 Treaury tock purchaed - AT 12.31.2011 602,984,082-8,597,659 594,386,423 The change in Treaury tock in 2011 i a follow: In hare Buyback programme Allocated to tock option/free hare plan Total million AT 01.01.2011-11,336,682 11,336,682 850.9 Share cancelled Option and free hare exercied -2,739,023-2,739,023-206.5 Treaury tock purchaed - - - AT 12.31.2011-8,597,659 8,597,659 644.4 million - 644.4 644.4 20.3. Share ubcription or purchae option Free hare 1) SHARE SUBSCRIPTION OR PURCHASE OPTIONS The table below et out data concerning option plan iued after November 7 th, 2002 and in force at December 31 t, 2013. Grant date Number of option Number of option not yet exercied Exercie period Exercie price 03.24.2004 2,000,000 71,736 03.25.2009 03.24.2014 64.69 12.01.2004 4,000,000 206,250 12.02.2009 12.01.2014 55.54 06.29.2005 400,000 150,000 06.30.2010 06.29.2015 60.17 11.30.2005 4,200,000 505,609 12.01.2010 11.30.2015 61.37 11.30.2005 1,800,000 225,152 12.01.2010 11.30.2015 62.94 04.25.2006 2,000,000 1,000,000 04.26.2011 04.25.2016 72.60 12.01.2006 5,500,000 1,702,062 12.02.2011 12.01.2016 78.06 11.30.2007 4,000,000 1,779,675 12.01.2012 11.30.2017 91.66 03.25.2009 3,650,000 3,433,500 03.26.2014 03.25.2019 50.11 04.27.2010 4,200,000 3,991,000 04.28.2015 04.27.2020 80.03 04.22.2011 1,470,000 1,233,500 04.23.2016 04.22.2021 83.19 from to All plan have a 5-year exercie period and no performancerelated condition, except the April 22 nd, 2011 plan (for all participant) and the April 27 th, 2010 and March 25 th, 2009 plan (for member of the Management Committee). The performance condition aociated with thee plan concern: April 22 nd, 2011 plan: for 50% of option granted, the increae in comparable Cometic revenue for the 2012, 2013, 2014 and 2015 fical year in relation to the growth in revenue for a panel of competitor; for 50% of option granted, the increae over the ame period in Group conolidated operating profit. The calculation will be baed on the arithmetic average of the performance in 2012, 2013, 2014 and 2015 fical year and will ue a predefined allocation cale baed on the performance percentage reached. April 27 th, 2010 and March 25 th, 2009 plan: for 50% of option granted, the increae in comparable Cometic revenue for the 2011, 2012, 2013 and 2014 fical year for the 2010 plan and for the 2010, 2011, 2012 and 2013 fical year for the 2009 plan compared to the growth of the cometic market; for 50% of hare granted, the percentage, over the ame period, reulting from the ratio between the contribution before advertiing and promotion expene, i.e. the um of operating profit and advertiing and promotion expene, and publihed Cometic revenue. 140 REGISTRATION DOCUMENT / L ORÉAL 2013

2013 CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS The calculation will be baed on the arithmetic average of performance in the 2011, 2012, 2013 and 2014 fical year for the 2010 plan and in the 2010, 2011, 2012 and 2013 fical year for the 2009 plan, and will ue a predefined allocation cale baed on the performance percentage achieved. At December 31 t, 2013, the performance condition were deemed to have been met. The fair value of option i determined uing the Black & Schole method baed on the following aumption: Purchae option Subcription option December 2003 November 2005 December 2003 March December 2004 2004 June 2005 November 2005 April December 2006 2006 November 2007 Rik-free rate of return 4.22% 3.16% 3.92% 3.39% 3.17% 2.63% 3.16% 3.80% 3.62% 4.01% 3.15% 2.83% 3.42% Expected life pan 8 year 6 year 6 year 7 year 6 year 6 year 6 year 6 year 7 year 7 year 7 year 7 year 8 year Expected volatility 21.50% 21.00% 21.50% 23.67% 18.70% 17.00% 21.00% 20.50% 22.52% 23.00% 31.95% 23.53% 22.60% Expected dividend 1.00% 1.35% 1.00% 1.20% 1.34% 1.38% 1.35% 1.35% 1.35% 1.24% 2,83% 1.86% 2.10% Share price 63.45 61.30 63.45 60.60 54.60 59.40 61.30 74.10 74.60 94.93 50.94 80.50 85.68 Exercie price 71.90 62.94 63.02 64.69 55.54 60.17 61.37 72.60 78.06 91.66 50.11 80.03 83.19 Fair value 15.24 12.30 15.66 14.67 10.15 9.45 12.88 17.48 17.19 25.88 12.16 17.17 18.58 March 2009 April 2010 April 2011 4 Expected volatility i equal to the implied volatility of the option lited on MONEP at the grant date. A from 2007, in order to mitigate the effect of atypical phenomena, the volatility ued correpond to the average between implied volatility at the grant date and hitoric volatility over the expected life pan of the option. The expected life pan ha been adjuted to take account of behavioural aumption relating to the beneficiarie. Data concerning all hare option plan during fical year 2011, 2012 and 2013 are et out below: Number of option 12.31.2013 12.31.2012 12.31.2011 Weighted average exercie price Number of option Weighted average exercie price Number of option Weighted average exercie price Number of option not exercied at beginning of period 22,210,443 71.90 32,524,432 72.02 37,296,504 71.55 Option granted - - 1,470,000 83.19 Option exercied -7,182,259 70.66-9,047,489 71.96-4,730,120 70.24 Option expired -729,700-1,266,500-1,511,952 Number of option not exercied at end of period 14,298,484 72.24 22,210,443 71.90 32,524,432 72.02 Of which: number of exerciable option at end of period 5,640,484 77.81 13,235,943 73.90 19,450,832 69.63 expired option at end of period 6,500 45,000 214,750 The weighted average hare price wa 123.64, 93.60 and 81.60, repectively, for 2013, 2012 and 2011. The total charge recorded in 2013, 2012 and 2011 amounted to 27.0 million, 41.2 million and 62.8 million, repectively. 2) FREE SHARES On April 26 th, 2013, April 17 th, 2012, April 22 nd, 2011 and April 27 th, 2010 and March 25 th, 2009, the Board of Director decided to grant repectively 1,057,820, 1,325,050, 1,038,000, 450,000 and 270,000 free hare. VESTING CONDITIONS For the conditional grant of hare, the plan provide for a 4-year veting period after which veting i effective and final, ubject to meeting the condition of the plan. After thi veting period, a 2-year mandatory holding period applie for French reident, during which the hare cannot be old. REGISTRATION DOCUMENT / L ORÉAL 2013 141

4 NOTES 2013 CONSOLIDATED FINANCIAL STATEMENTS TO THE CONSOLIDATED FINANCIAL STATEMENTS A total of 237,800 hare were definitively granted on March 26 th, 2013 under the March 25 th, 2009 plan. The performance condition concern: April 26 th, 2013, April 17 th, 2012 and April 22 nd, 2011 plan: for 50% of hare granted, the increae in comparable Cometic revenue for the 2014, 2015 and 2016 fical year under the 2013 plan, for the 2013, 2014 and 2015 fical year under the 2012 plan and for the 2012, 2013 and 2014 fical year under the 2011 plan in relation to the growth in revenue for a panel of competitor; for 50% of hare granted, the increae over the ame period in Group conolidated operating profit. The calculation will be baed on the arithmetic average of the performance in the 2014, 2015 and 2016 fical year under the 2013 plan, in the 2013, 2014 and 2015 fical year under the 2012 plan and in the 2012, 2013 and 2014 fical year under the 2011 plan and will ue a predefined allocation cale baed on the performance percentage achieved. No performance condition applie below a block of 200 hare. April 27 th, 2010 plan: for 25% of hare granted, the increae in comparable Cometic revenue for the 2011, 2012 and 2013 fical year compared with the growth of the cometic market; The calculation will be baed on the arithmetic average of performance in the 2011, 2012 and 2013 fical year and will ue a predefined allocation cale baed on the performance percentage achieved. At December 31 t, 2013, the performance condition were deemed to have been met. FAIR VALUE OF FREE SHARES GRANTED The fair value correpond to the value of the hare at the grant date, le dividend expected to be paid during the veting period. The cot of the additional 2-year holding period applicable to French reident i determined baed on the interet rate granted to the employee, conidered equivalent to the rate which would be granted by a bank to a private individual cutomer with an average financial profile. The cot of the holding period amount repectively to 5.75%, 8.06%, 8.54% and 8.64% of the hare value at the grant date for the 2013, 2012, 2011 and 2010 plan. On the bai of thee aumption, the fair value for the 2013, 2012, 2011 and 2010 plan amount to 112.37, 77.07, 70.36, and 66.78 repectively for French reident, and to 119.87, 84.62, 77.67 and 73.73 repectively, for non-reident, compared to a hare price of 130.45, 93.68, 85.68 and 80.50, repectively. The expene recorded in 2013, 2012 and 2011 amounted to 70.2 million, 45.2 million and 24.0 million. for 75% of hare granted, the percentage, over the ame period, reulting from the ratio between operating profit and publihed Cometic revenue. 20.4. Other comprehenive income The following table indicate movement in thee item: million 12.31.2013 12.31.2012 12.31.2011 Financial aet available-for-ale Reerve at beginning of period 4,406.7 2,675.8 1,624.1 Change in fair value over period 677.5 1,730.9 1,052.2 Impairment lo recorded in profit and lo - - - Change in fair value recorded in profit and lo - - -0.5 Reerve at the end of period 5 084,2 4 406,7 2 675,8 million 12.31.2013 12.31.2012 12.31.2011 Cah flow hedge foreign exchange Reerve at beginning of period 95.4-7.4 0.2 Change in fair value over period 137.2 20.1-16.9 Change in fair value recorded in profit and lo -124.0 82.7 9.3 Reerve at end of period 108.6 95.4-7.4 A 10% increae (decreae) in the euro againt all Group currencie would have had an impact of + 247.5 million (- 212.2 million) on the foreign exchange cah flow hedge reerve and the market value of hedging intrument at December 31 t, 2013. A 10% increae (decreae) in the euro againt all Group currencie would have had an impact of + 209.7 million (- 195.1 million) on the foreign exchange cah flow hedge reerve and the market value of hedging intrument at December 31 t, 2012. A 10% increae (decreae) in the euro againt all Group currencie would have had an impact of + 181.6 million (- 171.1 million) on the foreign exchange cah flow hedge reerve and the market value of hedging intrument at December 31 t, 2011. 142 REGISTRATION DOCUMENT / L ORÉAL 2013

2013 CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS A 10% increae (decreae) in the USD againt the main Group currencie would have had an impact of - 44.5 million (+ 74.0 million) on the foreign exchange cah flow hedge reerve and the market value of hedging intrument at December 31 t, 2013. A 10% increae (decreae) in the USD againt the main Group currencie would have had an impact of - 55.1 million (+ 68.3 million) on the foreign exchange cah flow hedge reerve and the market value of hedging intrument at December 31 t, 2012. A 10% increae (decreae) in the USD againt the main Group currencie would have had an impact of - 12.8 million (+ 25.8 million) on the foreign exchange cah flow hedge reerve and the market value of hedging intrument at December 31 t, 2011. million 12.31.2013 12.31.2012 12.31.2011 Cah flow hedge interet rate Reerve at beginning of period - - -1.7 Change in fair value over the period - - -0.3 Change in fair value recorded in profit and lo - - 2.0 Reerve at end of period - - - million 12.31.2013 12.31.2012 12.31.2011 Actuarial gain/(loe) and impact of aet ceiling Reerve at beginning of period -1,068.4-796.4-624.0 Actuarial gain / (loe) over the period 188.9-272.0-172.5 Impact of aet ceiling - 0.1 0.1 Reerve at end of period -879.5-1,068.4-796.4 4 million 12.31.2013 12.31.2012 12.31.2011 Other comprehenive income Gro reerve 4,313.3 3,433.7 1,872.0 Aociated tax effect 56.8 152.7 182.7 Reerve net of tax 4,370.1 3,586.4 2,054.7 NOTE 21 Pot-employment benefit, termination benefit and other long-term employee benefit The Group operate penion, early retirement and other benefit cheme depending on local legilation and regulation. For obligatory tate cheme and other defined-contribution cheme, the Group recognie in the income tatement contribution payable when they are due. No proviion ha been et aide in thi repect a the Group obligation doe not exceed the amount of contribution paid. The characteritic of the defined benefit cheme in force within the Group are a follow: French regulation provide for pecific length-of-ervice award payable to employee on retirement. An early retirement plan and a defined benefit plan have alo been et up. In ome Group companie there are alo meaure providing for the payment of certain healthcare cot for retired employee. Thee obligation are partially funded by an external fund, except thoe relating to healthcare cot for retired employee: for foreign ubidiarie with employee penion cheme or other pecific obligation relating to defined benefit plan, the exce of the projected benefit obligation over the cheme aet i recognied by etting up a proviion for charge on the bai of the actuarial value of employee veted right. Penion obligation are determined and recognied in accordance with the accounting principle preented in note 1.23. REGISTRATION DOCUMENT / L ORÉAL 2013 143

4 NOTES 2013 CONSOLIDATED FINANCIAL STATEMENTS TO THE CONSOLIDATED FINANCIAL STATEMENTS The actuarial aumption ued to calculate thee obligation take into account the economic condition pecific to each country or Group company. The weighted average aumption for the Group are a follow: In % 12.31.2013 12.31.2012 12.31.2011 Dicount rate 3.8% 3.6% 4.5% Salary increae 4.9% 4.9% 4.7% Expected long-term return on plan aet 3.8% 3.6% 5.5% Initial rate 12.31.2013 12.31.2012 12.31.2011 Final rate Application of final rate Initial rate Final rate Application of final rate Initial rate Final rate Application of final rate Expected rate of health care inflation 4.9% 3.6% 2019 5.7% 3.8% 2019 5.4% 3.7% 2016 The dicount rate are obtained by reference to market yield on high quality corporate bond having maturity date equivalent to thoe of the obligation. Bond quality i aeed by reference to the AA-/Aa3 minimum rating provided by one of the three main credit-rating agencie. They can be broken down by geographic zone a follow: In % 2013 2012 2011 Weighted average (all countrie) 3.8% 3.6% 4.5% of which: euro zone (1) 3.5% 3.4% 4.7% United State 4.3% 3.5% 4.3% United Kingdom 4.5% 4.5% 5.0% (1) The weighted average for 2013 conit of a 3.5% dicount rate on annuity plan with an average term of 22.1 year and a 3.3% dicount rate on capital plan with an average term of 12.7 year. A 50 bai point decreae in the dicount rate would increae the projected defined benefit obligation by 211.2 million for the euro zone, 52.9 million for the United State and 47.7 million for the United Kingdom. The expected return on plan aet i determined on the bai of the aet allocation of the invetment portfolio, taking into account the aociated rik and pat performance for each azet category excepted at December 31 t, 2012 and December 31 t, 2013 where expected return are baed on dicount rate. It can be broken down by geographic zone a follow: In % 2013 2012 2011 Weighted average (all countrie) 3.8% 3.6% 5.5% of which: euro zone 3.5% 3.4% 5.5% United State 4.3% 3.5% 6.0% United Kingdom 4.5% 4.5% 5.8% A 50 bai point decreae in the expected return would decreae the aet a well a the expected return on plan aet by - 7.3 million for the euro zone, - 2.9 million for the United State and - 2.3 million for the United Kingdom. The breakdown of plan aet i a follow: In % 12.31.2013 12.31.2012 12.31.2011 Equity ecuritie (1) 37.5% 35.1% 34.3% Bond 52.5% 55.6% 53.1% Property aet (2) 3.6% 3.5% 4.2% Monetary intrument 1.1% 1.1% 3.9% Other 5.3% 4.7% 4.5% TOTAL 100% 100% 100% (1) Of which L Oréal hare: nil. (2) Of which property aet occupied by Group entitie: nil. 144 REGISTRATION DOCUMENT / L ORÉAL 2013

2013 CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS The allocation of plan aet ha to comply with pecific invetment limit for the different clae of aet and meet minimum rating criteria for monetary intrument and bond. The variation during 2013, 2012 and 2011 are et out below: million Preent value of defined benefit obligation Plan aet Net proviion Balance at December 31 t, 2010 (1) 3,048.8-1,907.6 1,141.2 Service cot 111.7 111.7 Interet cot 131.4 131.4 Expected return on aet -114.5-114.5 Pat ervice cot: new plan / plan amendment 2.8 2.8 Curtailment -1.3-1.3 Settlement -0.1 0.1 - Benefit paid -139.2 102.8-36.4 Contribution paid 6.6-280.0-273.4 Actuarial gain and loe 45.5 126.9 172.4 Tranlation difference 45.4-35.1 10.3 Other movement 1.1-0.3 0.8 Balance at December 31 t, 2011 (1) 3,252.7-2,107.7 1,145.0 Service cot 121.7 121.7 Interet cot 142.8 142.8 Expected return on aet -121.5-121.5 Pat ervice cot: new plan / plan amendment 0.8 0.8 Curtailment -0.1-0.1 Settlement 0.1 0.1 Benefit paid -162.5 117.3-45.1 Contribution paid 5.6-273.2-267.6 Actuarial gain and loe 416.7-144.8 271.9 Tranlation difference -17.5 10.6-6.9 Other movement -0.2 1.8 1.6 Balance at December 31 t, 2012 (1) 3,760.1-2,517.4 1,242.7 Service cot 140.4 140.4 Interet cot 139.8 139.8 Expected return on aet -99.6-99.6 Pat ervice cot: new plan / plan amendment 0.2 0.2 Curtailment -1.5-1.5 Settlement - Benefit paid -183.7 134.3-49.4 Contribution paid 5.1-255.0-249.9 Actuarial gain and loe -136.7-52.2-188.9 Tranlation difference -74.5 53.2-21.3 Other movement (2) 80.9-12.9 68.0 BALANCE AT DECEMBER 31 t, 2013 3,730.1-2,749.6 980.5 4 (1) Thee amount have been retated according to change in accounting policie (ee note 1). (2) Including for the projected benefit obligation in 2013 67.6 million reclaified from employee-related liabilitie to proviion for employee retirement obligation and related benefit and 20.0 million relating to addition to the cope of conolidation. The total preent value of defined benefit obligation break down a follow between wholly or partly funded plan and wholly unfunded plan: million 12.31.2013 12.31.2012 12.31.2011 Preent value of defined benefit obligation wholly or partly funded 3,238.7 3,293.9 2,860.7 Fair value of plan aet 2,749.6 2,517.4 2,107.7 Net poition of defined benefit obligation wholly or partly funded 489.1 776.5 753.0 Preent value of defined benefit obligation wholly unfunded 491.4 466.5 392.0 REGISTRATION DOCUMENT / L ORÉAL 2013 145

4 NOTES 2013 CONSOLIDATED FINANCIAL STATEMENTS TO THE CONSOLIDATED FINANCIAL STATEMENTS The retirement expene charged to the income tatement i recorded within peronnel expene under operational profit and can be analyed a follow: million 2013 2012 2011 Service cot 140.4 121.7 111.7 Interet cot 139.8 142.8 131.4 Expected return on plan aet -99.6-121.5-114.5 Amortiation of actuarial gain and loe - - - New plan / plan amendment 0.2 1.3-0.3 Curtailment -1.5-0.9-2.1 Settlement - 0.1 - TOTAL 179.3 143.5 126.2 Contribution to defined contribution plan recognied a an expene in 2013, 2012 and 2011 amounted to 415.0 million, 388.6 million and 344.8 million, repectively. A change of one percentage point in medical cot inflation would have the following impact: Increae of 1% Decreae of 1% Impact on projected benefit obligation 16.0-12.8 Impact on current ervice cot and interet cot 1.5-1.1 Actuarial gain and loe for the period preented are a follow: 2013 million Preent value of defined benefit obligation Plan aet Net proviion Actuarial gain and loe: experience adjutment -10.4-52.2-62.6 Actuarial gain and loe: demographic aumption 17.1-17.1 Actuarial gain and loe: financial aumption -143.4 - -143.4 TOTAL -136.7-52.2-188.9 2012 million Preent value of defined benefit obligation Plan aet Net proviion Actuarial gain and loe: experience adjutment 7.0-144.8-137.8 Actuarial gain and loe: demographic aumption -139.0 - -139.0 Actuarial gain and loe: financial aumption 548.7-548.7 TOTAL 416.7-144.8 271.9 2011 million Preent value of defined benefit obligation Plan aet Net proviion Actuarial gain and loe: experience adjutment 15.1 126.9 142.0 Actuarial gain and loe: demographic aumption 7.8-7.8 Actuarial gain and loe: financial aumption 22.6-22.6 TOTAL 45.5 126.9 172.4 146 REGISTRATION DOCUMENT / L ORÉAL 2013

2013 CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 22 Proviion for liabilitie and charge 22.1. Cloing balance million 12.31.2013 12.31.2012 12.31.2011 Non-current proviion for liabilitie and charge 182.7 181.7 226.1 Other non-current proviion (1) 182.7 181.7 226.1 Current proviion for liabilitie and charge 557.8 552.3 500.7 Proviion for retructuring 100.1 129.4 93.6 Proviion for product return 251.0 226.3 219.2 Other current proviion (1) (2) 206.6 196.6 187.9 TOTAL 740.5 734.0 726.8 (1) Thi item include proviion for tax rik and litigation, indutrial, environmental and commercial rik relating to operation (breach of contract), peronnel-related cot and rik relating to invetigation carried out by competition authoritie. (2) Invetigation have been launched into the cometic ector by national competition authoritie in everal European countrie. Each of the proceeding i at a different tage: in Spain, the cae wa heard by the Court of Firt Intance and a fine handed down. L Oréal ha filed an appeal againt thi fine, which continue to be covered by a proviion in it book; in Italy, the cae wa heard by the Court of Firt Intance and the reulting fine wa paid in order to avoid any late-payment penaltie. The appeal deciion handed down in April 2012 reduced the fine by 25% but the cae i till pending before the High Court; in France, the cae regarding vertical pricing arrangement in the luxury perfume and cometic indutry ended with the ruling of June 12 th, 2013 by France highet civil court (the Cour de Caation) upholding the deciion iued in 2006 by the French Competition Council. The reulting financial penaltie were already covered by a proviion and have been paid by L Oréal. A tatement of objection wa received from the antitrut authoritie in 2013 concerning the conumer product ector in France. No proviion ha yet been booked in thi repect. L Oréal ha challenged thee objection and the cae i currently under review; in Belgium, the proceeding are in progre; the proceeding brought in Germany in 2008 into the bodycare and peronal care ector are till in progre and an appeal ha been lodged againt the ruling of the Court of Firt Intance of March 14 th, 2013. Accordingly, the 9.7 million fine ha not yet been paid. The proviion relating to thee litigation amount to 43.0 million at December 31 t, 2013 compared with 45.0 million at December 31 t, 2012 and 35.1 million at December 31 t, 2011. 4 22.2. Change in proviion for liabilitie and charge during the period million 12.31.2011 12.31.2012 Charge (2) (ued) (2) Reveral Reveral (not ued) (2) Impact of change in cope/ Exchange rate/ Other (1) 12.31.2013 Proviion for retructuring 93.6 129.4 32.7-46.8-12.6-2.6 100.1 Proviion for product return 219.2 226.3 228.8-171.0-27.4-5.7 251.0 Other proviion for liabilitie and charge 414.0 378.3 145.7-76.9-50.0-7.8 389.3 TOTAL 726.8 734.0 407.2-294.6-90.0-16.2 740.5 (1) Mainly reulting from tranlation difference. (2) Thee figure can be analyed a follow: million Charge Reveral (ued) Reveral (not ued) Other income and expene 33.0-50.6-13.2 Operating profit 329.2-242.5-47.1 Financial (income)/expene 0.3 - - Income tax 44.7-1.5-29.7 REGISTRATION DOCUMENT / L ORÉAL 2013 147

4 NOTES 2013 CONSOLIDATED FINANCIAL STATEMENTS TO THE CONSOLIDATED FINANCIAL STATEMENTS The change in thi caption in 2012 can be analyed a follow: million 12.31.2010 12.31.2011 Charge (2) (ued) (2) Reveral Reveral (not ued) (2) Impact of change in cope/ Exchange rate/ Other (1) 12.31.2012 Proviion for retructuring 90.6 93.6 71.3-32.1-1.2-2.2 129.4 Proviion for product return 209.4 219.2 165.1-137.3-23.0 2.3 226.3 Other proviion for liabilitie and charge 418.2 414.0 157.5-170.2-22.8-0.2 378.3 TOTAL 718.2 726.8 393.9-339.6-47.0-0.1 734.0 (1) Mainly reulting from tranlation difference. (2) Thee figure can be analyed a follow: million Charge Reveral (ued) Reveral (not ued) Other income and expene 84.7-32.1-1.2 Operating profit 268.6-216.6-39.2 Financial (income)/expene 0.2-0.1 - Income tax 40.4-90.8-6.6 The change in thi caption in 2011 can be analyed a follow: million 12.31.2009 12.31.2010 Charge (2) (ued) (2) Reveral Reveral (not ued) (2) Impact of change in cope/ Exchange rate/ Other (1) 12.31.2011 Proviion for retructuring 180.2 90.6 44.2-38.0-6.7 3.4 93.6 Proviion for product return 174.6 209.4 138.2-100.7-36.1 8.4 219.2 Other proviion for liabilitie and charge 280.8 418.2 140.2-100.6-54.9 11.2 414.0 TOTAL 635.6 718.2 322.6-239.3-97.7 23.0 726.8 (1) Mainly reulting from tranlation difference. (2) Thee figure can be analyed a follow: million Charge Reveral (ued) Reveral (not ued) Other income and expene 47.4-71.1-33.2 Operating profit 229.3-164.4-56.9 Financial (income)/expene 0.4-0.3-0.1 Income tax 45.6-3.5-7.6 148 REGISTRATION DOCUMENT / L ORÉAL 2013

2013 CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 23 Borrowing and debt The Group ue bank loan for it medium-term financing need and commercial paper iue in France and in the US for it hort-term financing need. None of thee loan contain an early repayment claue linked to financial ratio (covenant). 23.1. Debt by type 12.31.2013 12.31.2012 12.31.2011 million Non-current Current Non-current Current Non-current Current Short-term paper - - - - - 795.7 MLT bank loan 0.1 - - - - - Debt on capital leae contract 28.0 7.3 39.1 12.5 47.5 11.6 Overdraft - 35.7-20.8-10.3 Other borrowing and debt 65.6 255.9 7.8 167.8 10.0 273.2 TOTAL 93.7 298.9 46.9 201.1 57.5 1,090.8 23.2. Debt by maturity date 4 million 12.31.2013 12.31.2012 12.31.2011 Under 1 year (1) 298.9 201.1 1,090.8 1 to 5 year 75.5 27.7 36.1 Over 5 year 18.2 19.2 21.4 TOTAL 392.6 248.0 1,148.3 (1) At December 31 t, 2013, the Group had confirmed undrawn credit line for 3,236.3 million compared with 2,550.0 million at December 31 t, 2012. Thee line were not ubject to any covenant. At the end of 2013, etimated interet payment were not material due to the debt outtanding at December 31 t, 2013, which conited of very hort-term loan contracted locally by ubidiarie, and payment outtanding under finance leae. At the end of 2012, etimated interet payment were not material due to the debt outtanding at December 31 t, 2012, which conited of very hort-term loan contracted locally by ubidiarie, and payment outtanding under finance leae. At the end of 2011, etimated interet payment totalled around 2.6 million for 2012, 0 million for the period 2013-2016 and 0 million after 2016. Thee etimate are computed on the bai of the effective interet rate at the end of the financial year, after allowing for hedging intrument and auming that no debt i rolled over at maturity. Amount payable under capital leae are not taken into account a they are not material. 23.3. Debt by currency million 12.31.2013 12.31.2012 12.31.2011 Brazilian Real (BRL) (1) 144.7 43.7 55.6 Canadian dollar (CAD) 61.5 30.5 37.9 Yuan (CNY) 43.7 28.9 32.0 Euro (EUR) 22.2 39.1 43.2 Rupiah (IDR) 18.2 20.8 29.8 Sterling pound (GBP) 18.1 19.3 19.5 US dollar (USD) 12.5 14.7 480.1 Swedih Krona (SEK) - 4.4 344.4 Other 71.7 46.6 105.8 TOTAL 392.6 248.0 1,148.3 (1) Including 48.3 million in amount due to non-controlling interet in 2013 in repect of the Emporio Body Store acquiition. REGISTRATION DOCUMENT / L ORÉAL 2013 149

4 NOTES 2013 CONSOLIDATED FINANCIAL STATEMENTS TO THE CONSOLIDATED FINANCIAL STATEMENTS 23.4. Breakdown of fixed rate and floating rate debt (after allowing for interet rate hedging intrument) million 12.31.2013 12.31.2012 12.31.2011 Floating rate 350.2 204.0 1,094.0 Fixed rate 42.4 44.0 54.3 TOTAL 392.6 248.0 1,148.3 23.5. Effective interet rate Effective interet rate on Group debt after allowing for hedging intrument were 1.47% in 2011 for hort-term paper. The Group no longer had any hort-term paper at either December 31 t, 2013 or December 31 t, 2012 and no longer held any bank loan at either December 31 t, 2013 or December 31 t, 2012 and December 31 t, 2011. 23.6. Average debt interet rate The debt by currency i not material (ee note 23.3) and comprie very hort-term loan contracted locally by ubidiarie. 23.7. Fair value of borrowing and debt The fair value of fixed-rate debt i determined for each loan by dicounting future cah flow, baed on bond yield curve at the balance heet date, after allowing for the pread correponding to the Group rik rating. The net carrying amount of outtanding bank loan and other floating-rate loan i a reaonable approximation of their fair value. The fair value of borrowing and debt amounted to 393.4 million at December 31 t, 2013. The fair value of borrowing and debt amounted to 248.5 million at December 31 t, 2012. The fair value of borrowing and debt amounted to 1,148.4 million at December 31 t, 2011. 23.8. Debt covered by collateral No debt wa covered by material amount of collateral at December 31 t, 2013, 2012 or 2011. 23.9. Confirmed credit line At December 31 t, 2013, L Oréal and it ubidiarie had 3,236.3 million of confirmed undrawn credit line, compared with 2,550.0 million at December 31 t, 2012 and 2,438.6 million at December 31 t, 2011. Credit line fall due a follow: 1,086.3 million in le than 1 year; 2,150.0 million between 1 year and 3 year. NOTE 24 Derivative and expoure to market rik To manage it expoure to currency and interet rate rik ariing in the coure of it normal operation, the Group ue derivative negotiated with counterpartie rated invetment grade. In accordance with Group rule, currency and interet rate derivative are et up excluively for hedging purpoe. 24.1. Hedging of currency rik The Group i expoed to currency rik on commercial tranaction recorded on the balance heet and on highly probable future tranaction. The Group policy regarding it expoure to currency rik on future commercial tranaction i to hedge at the end of the year a large part of the currency rik for the following year, uing derivative baed on operating budget in each ubidiary. All the Group future foreign currency flow are analyed in detailed forecat for the coming budgetary year. Any currency rik identified are hedged by forward contract or by option in order to reduce a far a poible the currency expoure of each ubidiary. The term of the derivative i aligned with the Group ettlement. Exchange rate derivative are negotiated by REGEFI (the Group bank) or, in exceptional cae, directly by the Group ubidiarie when required by local regulation. Such operation are upervied by REGEFI. 150 REGISTRATION DOCUMENT / L ORÉAL 2013

2013 CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS A the Group bank, REGEFI i ubject to the European Market Infratructure Regulation (EMIR). Publihed by the European Commiion in September 2012, EMIR i aimed at moving OTC market toward a centralized model, thereby enhancing market tranparency and regulatory overight and decreaing ytemic rik uing a guarantee mechanim. Certain obligation gradually came into force in 2013 and implementation will normally be completed by the end of 2014. Owing to the Group policy of hedging a large part of annual requirement for the following year at the end of the current year, the enitivity of profit or lo to change in foreign exchange rate at December 31 t i marginal. The impact of change in foreign exchange rate on the foreign exchange cah flow hedge reerve i decribed in note 20.4. A the Group companie mut borrow and invet their cah in their own currency, the exchange rate rik generated by managing their own cah and debt are almot non-exitent. The following derivative, all of which have a maturity of le than 18 month at inception, are held for currency rik hedging purpoe: Nominal Market value million 12.31.2013 12.31.2012 12.31.2011 12.31.2013 12.31.2012 12.31.2011 Currency future Purchae of EUR againt foreign currencie 1,960.4 2,499.8 1,662.1 45.9 32.6-52.7 EUR/USD 532.1 425.6 161.6 1.4 1.4-1.6 EUR/CHF 252.2 806.5 265.3 8.3 16.4-20.9 EUR/RUB 203.5 176.6 87.1 5.5 2.1 1.8 EUR/MXN 174.5 198.6 300.7 3.9-3.4 1.5 EUR/CNY 172.7 118.3 85.0-3.3 3.1-6.8 EUR/GBP 88.7 126.2 165.3 1.3 1.3-8.7 EUR/AUD 75.1 80.0 81.0 5.2 3.4 0.3 EUR/CAD 73.3 80.3 4.0 1.8-0.4 0.2 EUR/JPY 58.0 88.8 69.8 2.7 2.0-2.5 EUR/BRL 50.8 89.2 64.9 2.2 1.4-4.9 EUR/Aia Pacific currencie 82.8 140.4 162.9 7.5 6.7-10.1 EUR/Eatern European currencie 106.0 96.0 85.9 3.5-1.3 1.2 EUR/Other currencie 90.8 73.3 128.6 5.9-0.1-2.2 Purchae of USD againt foreign currencie 124.6 159.4 305.3 2.0-5.6 11.7 USD/Latin American currencie 93.0 77.0 133.0 1.4-3.4 5.6 USD/CAD 31.6 27.9 45.2 0.6-0.6 1.4 USD/Aia Pacific currencie - - 112.6 - - 4.3 USD/Other currencie - 54.5 14.5 - -1.6 0.4 Sale of USD againt foreign currencie 355.4 344.4 192.1 8.2 0.3-9.7 USD/CHF 146.5 169.4 192.1 7.5 5.2-9.7 USD/Aia Pacific currencie 154.9 175.0-2.2-4.9 - USD/Other currencie 54.0 - - -1.5 - - Other currency pair 318.3 296.4 245.2 3.0 2.6-3.2 Currency future total 2,758.7 3,300.0 2,404.7 59.1 29.9-53.9 Currency option EUR/USD 313.0 117.9 121.0 11.4 8.3 2.7 EUR/HKD 114.7 56.0 43.7 5.3 3.7 1.1 EUR/CNY 62.9 33.1 33.4 2.6 2.0 0.8 EUR/BRL 59.9 31.7 25.2 7.8 3.1 1.8 EUR/RUB 58.6 - - 4.0 - - EUR/Other currencie 202.4 199.5 202.4 14.2 9.7 7.0 CHF/USD 62.8 64.4 96.3 3.5 4.4 2.9 Other currency pair 40.2 21.1 14.8 3.7 1.2 0.4 Currency option total 914.5 523.7 536.8 52.4 32.4 16.7 of which total option purchaed 914.5 523.7 536.8 52.4 32.4 16.7 TOTAL 3,673.2 3,823.7 2,941.5 111.6 62.3-37.2 4 REGISTRATION DOCUMENT / L ORÉAL 2013 151

4 NOTES 2013 CONSOLIDATED FINANCIAL STATEMENTS TO THE CONSOLIDATED FINANCIAL STATEMENTS The market value by type of hedging are a follow: million 2013 2012 2011 Fair value hedge (1) 13.4 5.8-5.4 Cah flow hedge 98.2 56.5-31.8 Net foreign invetment hedge - - - TOTAL 111.6 62.3-37.2 (1) Fair value hedge relate to currency rik on operating receivable and payable a well a on foreign currency invetment and financing. The fair value of the derivative i their market value. The Group ha no ignificant foreign currency expoure that are not hedged in the balance heet. 24.2. Hedging of interet rate rik The Group did not have any interet rate hedging intrument at December 31 t, 2013, 2012 or 2011. 24.3. Senitivity to change in interet rate An increae of 100 bai point in interet rate would have a direct poitive impact of 22.6 million on the Group net finance cot at December 31 t, 2013, compared with poitive impact of 16.3 million at December 31 t, 2012 and a poitive impact of 5.6 million at December 31 t, 2011. Thi calculation allow for cah, cah equivalent and derivative, and aume that total net debt/net cah remain table and that fixed-rate debt at maturity i replaced by floating-rate debt. The impact of a 100 bai point rie in interet rate on the fair value of the Group fixed-rate financial aet and liabilitie, after allowing for derivative, can be etimated at 0.3 million at December 31 t, 2013 compared with 0.3 million at December 31 t, 2012 and 0.2 million at December 31 t, 2011. 24.4. Counterparty rik The Group ha financial relation with international bank rated invetment grade. The Group thu conider that it expoure to counterparty rik i low. Furthermore, the financial intrument ued to manage exchange rate and interet rate rik are iued by leading international banking counterpartie. 24.5. Liquidity rik undrawn credit line of 3,236.3 million at December 31 t, 2013. The availability of thee credit line i not dependent on financial covenant. The Group no longer had any hort-term paper at the end of December 2013. 24.6. Shareholding rik No cah ha been inveted in hare. Available cah i inveted with top-ranking financial intitution in the form of non-peculative intrument which can be drawn in very hort period. At December 31 t, 2013, marketable ecuritie conit mainly of SICAV money-market fund and unit trut (note 19). At December 31 t, 2013, the Group hold 118,227,307 Sanofi hare for an amount of 9,117.7 million (note 15). A change of plu or minu 10% in the market price of thee hare relative to the market price of 77.12 on December 31 t, 2013 would have an impact of plu or minu 911.8 million before tax on Group equity. If the hare price were to fall ignificantly below 34.12 (the initial cot of the Sanofi hare), or fall below that price for a prolonged length of time, L Oréal may have to recognie an impairment lo on it aet through profit or lo. At December 31 t, 2012, the Group held 118,227,307 Sanofi hare for an amount of 8,440.2 million (note 15). A change of plu or minu 10% in the market price of thee hare relative to the market price of 71.39 on December 31 t, 2012 would have an impact of plu or minu 844.0 million before tax on Group equity. At December 31 t, 2011, the Group held 118,227,307 Sanofi hare for an amount of 6,709.4 million (note 15). A change of plu or minu 10% in the market price of thee hare relative to the market price of 56.75 on December 31 t, 2011 would have an impact of plu or minu 670.9 million before tax on Group equity. The Group liquidity rik can be aeed on the bai of it outtanding hort-term debt under it paper programme. If thee bank facilitie were not renewed, the Group had confirmed 152 REGISTRATION DOCUMENT / L ORÉAL 2013

2013 CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 24.7. Fair value hierarchy IFRS 7 a amended in 2009 require financial aet and liabilitie recognied at fair value in the balance heet to be claified according to three level: level 2: valuation technique uing obervable input; level 3: valuation technique uing unobervable input. level 1: quoted price on an active market; The following table provide an analyi of financial intrument recorded at fair value by level of the fair value hierarchy. million December 31 t, 2013 level 1 level 2 level 3 Total fair value Aet at fair value Foreign exchange derivative 205.5 205.5 Interet rate derivative - Sanofi hare 9,117.7 9,117.7 Marketable ecuritie 1,024.2 1,024.2 TOTAL ASSETS AT FAIR VALUE 10,141.9 205.5-10,347.4 Liabilitie at fair value Foreign exchange derivative 97.8 97.8 Interet rate derivative - TOTAL LIABILITIES AT FAIR VALUE - 97.8-97.8 4 million December 31 t, 2012 level 1 level 2 level 3 Total fair value Aet at fair value Foreign exchange derivative 162.6 162.6 Interet rate derivative - Sanofi hare 8,440.2 8,440.2 Marketable ecuritie 150.0 150.0 TOTAL ASSETS AT FAIR VALUE 8,590.2 162.6-8,752.8 Liabilitie at fair value Foreign exchange derivative 104.7 104.7 Interet rate derivative - TOTAL LIABILITIES AT FAIR VALUE - 104.7-104.7 million December 31 t, 2011 level 1 level 2 level 3 Total fair value Aet at fair value Foreign exchange derivative 114.0 114.0 Interet rate derivative - Sanofi hare 6,709.4 6,709.4 Marketable ecuritie 598.2 598.2 TOTAL ASSETS AT FAIR VALUE 7,307.6 114.0-7,421.6 Liabilitie at fair value Foreign exchange derivative 147.2 147.2 Interet rate derivative - TOTAL LIABILITIES AT FAIR VALUE - 147.2-147.2 REGISTRATION DOCUMENT / L ORÉAL 2013 153

4 NOTES 2013 CONSOLIDATED FINANCIAL STATEMENTS TO THE CONSOLIDATED FINANCIAL STATEMENTS 24.8. Offetting financial aet and financial liabilitie Financial aet and liabilitie reulting from foreign exchange and/or interet rate hedging tranaction entered into with the Group counterparty bank are not offet in the balance heet ince they are FBF (French Banking Federation) or ISDA (International Swap and Derivative Aociation) agreement that only provide for offetting in the event of default by one of the partie to the agreement. Accordingly, they do not meet the offetting criteria et out in IAS 32. Had the agreement been offet at the level of each counterparty bank, aet and liabilitie would have decreaed by 26.7 million, 28.8 million and 41.3 million, repectively, at December 31 t, 2013, 2012 and 2011. NOTE 25 Other current liabilitie million 12.31.2013 12.31.2012 12.31.2011 Tax and employee-related payable (excluding income tax) 1,093.2 1,115.7 1,039.0 Credit balance on trade receivable 676.6 608.2 598.4 Fixed aet payable 152.9 150.1 124.0 Derivative 97.8 104.7 147.2 Other current liabilitie 169.3 162.4 158.0 TOTAL 2,189.8 2,141.1 2,066.7 NOTE 26 Off-balance heet commitment 26.1. Operating leae commitment Thee amount to 1,675.9 million at December 31 t, 2013 compared with 1,789.6 million at December 31 t, 2012 and 1,784.2 million at December 31 t, 2011, of which: 430.5 million wa due in within 1 year at December 31 t, 2013 compared with 452.6 million at December 31 t, 2012 and 416.8 million at December 31 t, 2011; 995.9 million wa due in 1 to 5 year at December 31 t, 2013 compared with 1,082.0 million at December 31 t, 2012 and 1,070.5 million at December 31 t, 2011; 249.5 million wa due in over 5 year at December 31 t, 2013 compared with 255.0 million at December 31 t, 2012 and 296.9 million at December 31 t, 2011. 26.2. Other off-balance heet commitment Confirmed credit line are dicued in note 23. Other ignificant off-balance heet commitment have been identified and meaured. They chiefly fall due within 1 year and are a follow: million 12.31.2013 12.31.2012 12.31.2011 Guarantee given (1) 163.2 134.2 121.5 Guarantee received 61.1 59.9 54.8 Commitment given under Dermatology contract 53.5 75.1 60.2 Commitment received under Dermatology contract 12.1 40.9 33.5 Capital expenditure order 255.0 249.5 229.8 Firm purchae commitment under logitic upply contract 454.1 487.2 448.9 (1) Thee conit mainly of guarantee given to governmental bodie or concerning loan granted to third partie who are partner of the Group, and the net commitment toward the L Oréal Foundation for it long-term action program. 154 REGISTRATION DOCUMENT / L ORÉAL 2013

2013 CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 26.3. Acquiition in progre On Augut 15 th, 2013, L Oréal and Magic Holding International Limited have announced L Oréal propoal to acquire all of the hare of Magic Holding International Limited, a co mpany lited in the Hong Kong Stock Exchange. The propoed price i HK $6.30 per hare. L Oréal propoal i upported by Magic Board of Director. Six key hareholder, repreenting 62.3% of the company equity, are already committed to upporting L Oréal propoal. The tranaction ha been approved by the Minitry of Commerce of the People Republic of China (MOFCOM) in early January 2014. A pecialit in cometic facial mak, Magic turnover in 2012-2013 wa approximately 160 million euro. Facial mak are one of China beauty market fatet growing area with very promiing development propect. Magic MG brand i one of China leading brand in thi category. Thi note i not intended to and doe not contitute, or form part of, any offer to ell or ubcribe for or an invitation to purchae or ubcribe for any ecuritie or the olicitation of any vote or approval in any juridiction puruant to the above mentioned propoal or otherwie, nor hall there be any ale, iuance or tranfer of ecuritie of Magic Holding International Limited in any juridiction in contravention of applicable law. The propoal, if made, will be made olely through the Scheme Document, which will contain the full term and condition of the propoal, including detail of how to vote in favour of the propoal and any retriction applicable to the propoal. Any repone to the propoal, acceptance included, hould be made only on the bai of information in the Scheme Document or any other document by which the Propoal i made, a the cae may be. 26.4. Contingent liabilitie In the coure of it normal operation, the Group i involved in legal action and i ubject to tax aement, cutom control and adminitrative audit. The Group et aide a proviion wherever a rik i found to exit, and the related cot can be reliably etimated. On thi bai, a proviion ha been et aide for rik relating to invetigation carried out by competition authoritie decribed in note 22.1. In term of taxation, in early January 2013, L Oréal Brail received a tax reaement notice regarding the indirect IPI tax for fical year 2008. The reaement concerned an amount of BRL 346 million including BRL 193 million ( 106 million) in interet and penaltie. The Brazilian tax authoritie quetioned the price ued to calculate the IPI tax bae. After conulting it tax advior, L Oréal Brail conider that the Brazilian tax authoritie poition i unfounded and ha challenged thi notice. Conequently, no proviion ha been recorded. At the preent time, no exceptional event or dipute i highly likely to have a material impact on the earning, financial poition, aet or operation of the L Oréal Company or Group. 26.5. Environmental rik The Group trictly complie with regulation and law relating to environmental protection, and doe not expect that they will have any ignificant impact on the future operation, financial poition, earning or aet. The rik identified at December 31 t, 2013 are not material. 4 NOTE 27 Change in working capital Thi caption amount to a negative 155.8 million in 2013, a negative 129.1 million in 2012 and a negative 322.0 million in 2011, and can be analyed a follow: million 2013 2012 2011 Inventorie -225.7 14.6-200.9 Trade account receivable -209.9-214.8-275.2 Trade account payable 160.0 83.2 60.9 Other receivable and payable 119.8-12.1 93.2 TOTAL -155.8-129.1-322.0 REGISTRATION DOCUMENT / L ORÉAL 2013 155

4 NOTES 2013 CONSOLIDATED FINANCIAL STATEMENTS TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 28 Impact of change in the cope of conolidation in the cah flow tatement In 2013, thi item mainly related to the acquiition of Spirig, Vogue, Emporio Body Store and Interconumer Product Limited. In 2012, thi item mainly related to the acquiition of Cadum, Urban Decay and Emiliani Enterprie. In 2011, thi item mainly related to the acquiition of Q-Med and Pacific Biocience Laboratorie Inc. NOTE 29 Tranaction with related partie 29.1. Joint venture Tranaction with proportionally conolidated companie were a follow: million 2013 2012 2011 Sale of good and ervice 1.1 1.0 0.9 Financial expene and income 3.4 4.0 6.4 The following receivable and payable were recorded on the balance heet for the related partie: million 12.31.2013 12.31.2012 12.31.2011 Operating receivable 1.5 2.4 2.8 Operating payable 0.3 0.2 0.1 Financial receivable 279.9 194.1 211.9 29.2. Related partie with a ignificant influence on the Group No ignificant tranaction have been carried out with a member of enior management or a hareholder with a ignificant influence on the Group. 29.3. Aociate The Group had no equity-accounted companie in 2013, 2012 or 2011. 156 REGISTRATION DOCUMENT / L ORÉAL 2013

2013 CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 29.4. Additional information on jointly controlled entitie The information preented below correpond to amount attributable to the Group baed on it ownerhip interet. million 2013 Current aet Non-current aet Current liabilitie Non-current liabilitie Revenue for the Group Expene for the Group Operating profit (lo) Galderma 456.0 889.5 780.3 132.2 826.3-709.5 116.8 Innéov 11.2 0.5 9.4 0.1 26.1-28.5-2.4 million 2012 Current aet Non-current aet Current liabilitie Non-current liabilitie Revenue for the Group Expene for the Group Operating profit (lo) Galderma 333.6 832.4 617.2 134.3 795.5-652.9 142.6 Innéov 13.2 1.1 20.9 0.1 28.8-32.6-3.8 million 2011 Current aet Non-current aet Current liabilitie Non-current liabilitie Revenue for the Group Expene for the Group Operating profit (lo) Galderma 320.2 852.0 690.8 138.0 704.7-584.6 120.1 Innéov 11.5 1.3 21.5 0.1 31.5-32.9-1.4 4 NOTE 30 Fee accruing to Auditor and member of their network payable by the Group PricewaterhoueCooper Audit Deloitte & Aocié million excl. VAT Amount % Amount % Audit 2013 2012 2013 2012 2013 2012 2013 2012 Statutory audit 6.1 6.0 71% 67% 5.9 6.2 75% 76% L Oréal 1.1 1.0 13% 12% 1.0 1.0 13% 12% Fully conolidated ubidiarie 5.0 5.0 58% 55% 4.9 5.2 62% 64% Other directly related audit aignment (1) 1.5 2.5 17% 28% 1.5 1.5 20% 18% L Oréal 0.3 0.6 4% 6% 1.2 1.0 15% 13% Fully conolidated ubidiarie 1.2 1.9 13% 22% 0.3 0.5 5% 5% Audit ub-total 7.6 8.5 88% 95% 7.4 7.7 95% 94% Other ervice Other ervice (legal, tax, employee-related, other) 1.1 0.5 12% 5% 0.4 0.4 5% 6% TOTAL 8.7 9.0 100% 100% 7.8 8.1 100% 100% (1) Mainly concerning acquiition audit. REGISTRATION DOCUMENT / L ORÉAL 2013 157

4 CONSOLIDATED 2013 CONSOLIDATED FINANCIAL STATEMENTS COMPANIES AT DECEMBER 31 t, 2013 NOTE 31 Subequent event On October 17 th, 2013, L Oréal ha extended an offer to the Japanee Group Shieido for the acquiition of Decléor and Carita. Baed on thi offer, Shieido ha granted L Oréal excluive negotiation right. Decléor/Carita achieved a turnover of approximately 100 million in 2012 which rank the group a number two on the worldwide profeional kin care market in beauty intitute, pa and hair alon. Founded in 1974, Decléor i the world leading brand in aromatherapy. Created in 1945 by Maria & Roy Carita, known a hairdreer for tar, Carita incarnate the art of pretigiou French pampering. An agreement could be igned in the coming week. Netlé and L Oréal announced that their repective Board of Director, in meeting held on February 10 th, 2014, have approved by unanimou deciion of their voting member a trategic tranaction for both companie under which L Oréal will buy 48.5 million of it own hare (8% of it hare capital) from Netlé. Thi buyback will be financed: Partially through the dipoal by L Oréal to Netlé of it 50% take in Swi dermatology pharmaceutical company Galderma (a 50/50 joint venture between L Oréal and Netlé) for an enterprie value of 3.1 billion ( 2.6 billion of equity value), paid by Netlé in L Oréal hare (21.2 million hare). Thi tranaction i expected to reult in a pre-tax capital gain of around 2.2 billion for accounting purpoe; For the remainder, correponding to 27.3 million L Oréal hare held by Netlé, in cah for an amount of 3.4 billion. The price per L Oréal hare retained for thi tranaction i the average of it cloing price between Monday November 11 th, 2013 and Monday February 10 th, 2014: 124.48. All the hare bought back by L Oréal will be cancelled. Following the tranaction, Netlé take in L Oréal will be reduced from 29.4% to 23.29% of the hare capital and the Bettencourt Meyer family take in L Oréal will increae from 30.6% to 33.31%. The tranaction i ubject to cutomary condition, including the prior conultation of Galderma and L Oréal work council and the clearance of relevant antitrut authoritie. It i expected to cloe before the end of the firt emeter of 2014. 158 REGISTRATION DOCUMENT / L ORÉAL 2013

2013 CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED COMPANIES AT DECEMBER 31 t, 2013 4.7. CONSOLIDATED COMPANIES AT DECEMBER 31 t, 2013 4.7.1. Fully conolidated companie (1) Company Head office % interet % control (2) Areca & Cie France 100.00 Banque de Réaliation de Getion et de Finncement (Regefi) France 100.00 Beauté Créateur France 100.00 Beauté, Recherche & Indutrie France 100.00 Beautyco International Co. Limited China 100.00 Beautylux International Cometic (Shanghai) Co. Ltd China 100.00 Biotherm Monaco 99.80 Canan Kozmetik Sanayi Ve Ticaret A.S. Turkey 100.00 Centre Logitique d Eigny France 100.00 Centrex France 100.00 Chimex France 100.00 Cobela Cometico, S.A. Spain 100.00 Colainaf Morocco 100.00 Compagnie Thermale Hôtelière et Financière France 99.98 Cobel S.A. de C.V. Mexico 100.00 Comelor KK Japan 100.00 Comelor Ltd Japan 100.00 Comephil Holding Corporation Philippine Philippine 100.00 Comepla S.A.S. Colombia 100.00 Cometil Morocco 49.80 100.00 Cométique Active France France 100.00 Cométique Active International France 100.00 Cométique Active Production France 100.00 Egyptelor LLC Egypt 100.00 Elebelle (Pty) Ltd South Africa 100.00 EpiSkin France 99.89 Erwiton S.A. Uruguay 100.00 Excluive Signature International France 100.00 Fapagau & Cie France 100.00 Faprogi France 100.00 Finval France 100.00 Frabel S.A. de C.V. Mexico 100.00 Gemey Maybelline Garnier France 100.00 Gemey Pari Maybelline New York France 100.00 Goldy International France 100.00 Helena Rubintein France 100.00 Helena Rubintein Italia S.p.A Italy 100.00 Holdial France 100.00 Hygiène Beauté Ditribution France France 100.00 Interbeauty Product Limited Kenya 100.00 Komepol Sp z.o.o Poland 100.00 L & J Ré France 100.00 LOA1 France 100.00 LOA3 France 100.00 La Roche-Poay Laboratoire Pharmaceutique France 99.98 Laboratoire Sanoflore France 100.00 4 (1) Puruant to the proviion of Article R 233-14 of the French Commercial Code, ome of the information provided above i incomplete. (2) Equivalent to the percentage interet unle otherwie indicated. REGISTRATION DOCUMENT / L ORÉAL 2013 159

4 CONSOLIDATED 2013 CONSOLIDATED FINANCIAL STATEMENTS COMPANIES AT DECEMBER 31 t, 2013 Company Head office % interet % control (2) Laboratorio cometico Vogue S.A.S. Colombia 100.00 Lai Mei Cometic International Trading (Shanghai) Co. Ltd China 100.00 Lancôme Parfum & Beauté & Cie France 100.00 LaScad France 100.00 Le Club de Créateur de Beauté Belgium 100.00 Lehoux et Jacque France 100.00 L Oréal Adria d.o.o. Croatia 100.00 L Oréal Argentina S.A. Argentina 100.00 L Oréal Autralia Pty Ltd Autralia 100.00 L Oréal Balkan d.o.o. Serbia 100.00 L Oréal Baltic SIA Latvia 100.00 L Oréal Belgilux S.A. Belgium 100.00 L Oréal Brail Comercial de Comético Ltda Brazil 100.00 L Oréal Brail Licenciamento Empreariai, Cometico e Perfume Ltda Brazil 100.00 L Oréal Bulgaria EOOD Bulgaria 100.00 L Oréal Canada, Inc. Canada 100.00 L Oréal Central America Panama 100.00 L Oréal Central Wet Africa Nigeria 100.00 L Oréal Ceka Republika.r.o Czech Republic 100.00 L Oréal Chile S.A. Chile 100.00 L Oréal (China) Co. Ltd China 100.00 L Oréal Colombia S.A. Colombia 100.00 L Oréal Cometic Indutry SAE Egypt 100.00 L Oréal Danmark A/S Denmark 100.00 L Oréal Deutchland GmbH Germany 100.00 L Oréal Eat Africa Ltd Kenya 100.00 L Oréal Egypt LLC Egypt 100.00 L Oréal Epaña S.A. Spain 100.00 L Oréal Finland Oy Finland 100.00 L Oréal Guatemala S.A. Guatemala 100.00 L Oréal Hella S.A. Greece 100.00 L Oréal Hong Kong Ltd Hong-Kong 100.00 L Oréal India Pvt Ltd India 100.00 L Oréal Invetment B.V. The Netherland 100.00 L Oréal Irael Ltd Irael 92.97 L Oréal Italia S.p.A Italy 100.00 L Oréal Japan Ltd Japan 100.00 L Oréal Kazakhtan LLP Kazakhtan 100.00 L Oréal Korea Ltd Korea 100.00 L Oréal Liban SAL Lebanon 99.88 L Oréal Libramont Belgium 100.00 L Oréal Magyarorzag Kozmetikai Kft Hungary 100.00 L Oréal Malayia SDN BHD Malayia 100.00 L Oréal Manufacturing Midrand Pty Ltd South Africa 100.00 L Oréal Maroc Morocco 50.00 100.00 L Oréal Mexico S.A. de C.V. Mexico 100.00 L Oréal Mexico Servicio S.A. de C.V. Mexico 100.00 L Oréal Middle Eat United Arab Emirate 100.00 L Oréal Nederland B.V. The Netherland 100.00 L Oréal New Zealand Ltd New Zealand 100.00 L Oréal Norge A/S Norway 100.00 L Oréal Oterreich GmbH Autria 100.00 L Oréal Pakitan Private Limited Pakitan 100.00 L Oréal Panama S.A. Panama 100.00 L Oréal Peru S.A. Peru 100.00 (1) Puruant to the proviion of Article R 233-14 of the French Commercial Code, ome of the information provided above i incomplete. (2) Equivalent to the percentage interet unle otherwie indicated. 160 REGISTRATION DOCUMENT / L ORÉAL 2013

2013 CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED COMPANIES AT DECEMBER 31 t, 2013 Company Head office % interet % control (2) L Oréal Philippine, Inc. Philippine 100.00 L Oréal Polka Sp z.o.o Poland 100.00 L Oréal Portugal, Lda Portugal 100.00 L Oréal Produit de Luxe France France 100.00 L Oréal Produit de Luxe International France 100.00 L Oréal Produktion Deutchland Beteiligung GmbH Germany 100.00 L Oréal Produktion Deutchland GmbH & Co. Kg Germany 100.00 L Oréal Romania SRL Rumania 100.00 L Oréal Saipo Indutriale S.p.A Italy 100.00 L Oréal Saudi Arabia Saudi Arabia 75.00 100.00 L Oréal Singapore Pte Ltd Singapore 100.00 L Oréal Slovenija Kozmetika d.o.o Slovenia 100.00 L Oréal Slovenko.r.o Slovakia 100.00 L Oréal SLP S.A. de C.V. Mexico 100.00 L Oréal South Africa Holding Pty Ltd South Africa 100.00 L Oréal Suie S.A. Switzerland 100.00 L Oréal Sverige AB Sweden 100.00 L Oréal Taiwan Co. Ltd Taiwan 100.00 L Oréal Thailand Ltd Thailand 100.00 L Oréal Turkiye Kozmetik Sanayi Ve Ticaret Anonim Sirketi Turkey 100.00 L Oréal UK Ltd United Kingdom 100.00 L Oréal Ukraine Ukraine 100.00 L Oréal Uruguay S.A. Uruguay 100.00 L Oréal USA, Inc. (a a group) United State 100.00 L Oréal Venezuela, C.A. Venezuela 100.00 L Oréal Verwaltung GmbH Germany 100.00 L Oréal Vietnam Co. Ltd Vietnam 100.00 L Oréal Wet Africa Ltd Ghana 100.00 Marelor LLC Egypt 100.00 Matrix Ditribution GmbH Germany 100.00 Nihon L Oréal K.K. Japan 100.00 NLO K.K. Japan 100.00 P.T. L Oréal Indoneia Indoneia 100.00 P.T. Yaulor Indoneia Indoneia 100.00 Parbel of Florida, Inc. United State 100.00 Parfum Cacharel & Cie France 100.00 Parfum Guy Laroche France 100.00 Parfum Paloma Picao & Cie France 100.00 Parfum Ralph Lauren France 100.00 Pretige et Collection International France 100.00 Procoa Producto de Beleza Ltda Brazil 100.00 Producto Capilare L Oréal S.A. Spain 100.00 Redken France France 100.00 Roger & Gallet France 100.00 SLP Aitencia S.A. de C.V. Mexico 100.00 Scental Ltd Hong-Kong 100.00 Shu Uemura Cometic Inc. Japan 100.00 Sicô & Cie France 100.00 Société de Développement Artitique France 100.00 Société Hydrominérale de La Roche-Poay France 99.98 Sofamo Monaco 99.99 Soproco France 100.00 Soproréal France 100.00 Sparly France 100.00 4 (1) Puruant to the proviion of Article R 233-14 of the French Commercial Code, ome of the information provided above i incomplete. (2) Equivalent to the percentage interet unle otherwie indicated. REGISTRATION DOCUMENT / L ORÉAL 2013 161

4 CONSOLIDATED 2013 CONSOLIDATED FINANCIAL STATEMENTS COMPANIES AT DECEMBER 31 t, 2013 Company Head office % interet % control (2) The Body Shop (a a group) United Kingdom 100.00 (3) Venprobel Venezuela 100.00 Viktor & Rolf Parfum France 100.00 Yichang Tianmei International Cometic Co. Ltd China 100.00 YSL Beauté France 100.00 YSL Beauté Votok o.o.o. Ruia 100.00 Zao L Oréal Ruia 100.00 (1) Puruant to the proviion of Article R 233-14 of the French Commercial Code, ome of the information provided above i incomplete. (2) Equivalent to the percentage interet unle otherwie indicated. (3) Except for Body Store S.A. in which the Group ha a 51% interet. 4.7.2. Proportionally conolidated companie Company Head office % interet % control (2) Galderma (a a group) Switzerland 50.00 (1) Innéov Adria d.o.o. for trade and ervice Croatia 50.00 (1) Innéov Argentina S.A. Argentina 50.00 (1) Innéov Belgique Belgium 50.00 (1) Innéov Brail Nutricometico Ltda Brazil 50.00 (1) Innéov Canada, Inc. Canada 50.00 (1) Innéov Chile S.A. Chile 50.00 (1) Innéov CZ.r.o. Czech Republic 50.00 (1) Innéov d.o.o. Slovenia 50.00 (1) Innéov Deutchland GmbH Germany 50.00 (1) Innéov Epaña S.A. Spain 50.00 (1) Innéov France France 50.00 (1) Innéov Hella A.E. Greece 50.00 (1) Innéov Italia S.p.A. Italy 50.00 (1) Innéov Mexico S.A. de C.V. Mexico 50.00 (1) Innéov Nederland B.V. The Netherland 50.00 (1) Innéov Nutrikozmetik Ticaret Ve Sanayi Ltd Sirketi Turkey 50.00 (1) Innéov Oterreich Handelgeellchaft mbh Autria 50.00 (1) Innéov Polka Sp. z.o.o. Poland 50.00 (1) Innéov (Shanghai) Trading Co., Ltd China 50.00 (1) Innéov SK.r.o. Slovakia 50.00 (1) Innéov Suie Switzerland 50.00 (1) Innéov Taiwan Co. Ltd Taiwan 50.00 (1) Laboratoire Innéov France 50.00 (1) Laboratoire Innéov Portugal Unipeoal Lda Portugal 50.00 (1) O.O.O Innéov Ruia 50.00 (1) (1) Companie jointly owned with Netlé. (2) Equivalent to the percentage interet unle otherwie indicated. 162 REGISTRATION DOCUMENT / L ORÉAL 2013

2013 CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED COMPANIES AT DECEMBER 31 t, 2013 4.8. STATUTORY AUDITORS REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS (Year ended December 31 t, 2013) Thi i a free tranlation into Englih of the Statutory Auditor report iued in French and i provided olely for the convenience of Englih peaking reader. The Statutory Auditor report include information pecifically required by French law in uch report, whether modified or not. Thi information i preented below the opinion on the conolidated financial tatement and include explanatory paragraph dicuing the Auditor aement of certain ignificant accounting and auditing matter. Thee aement were conidered for the purpoe of iuing an audit opinion on the conolidated financial tatement taken a a whole and not to provide eparate aurance on individual account caption or on information taken outide of the conolidated financial tatement. Thi report alo include information relating to the pecific verification of information given in the Group Management Report. Thi report hould be read in conjunction with, and contrued in accordance with, French law and profeional auditing tandard applicable in France. In compliance with the aignment entruted to u by your Annual General Meeting, we hereby report to you, for the year ended December 31 t, 2013, on: 4 the audit of the accompanying conolidated financial tatement of L Oréal; the jutification of our aement; the pecific verification required by law. Thee conolidated financial tatement have been approved by the Board of Director. Our role i to expre an opinion on thee conolidated financial tatement, baed on our audit. I. Opinion on the conolidated financial tatement We conducted our audit in accordance with profeional tandard applicable in France. Thoe tandard require that we plan and perform the audit to obtain reaonable aurance about whether the conolidated financial tatement are free of material mitatement. An audit involve performing procedure, uing ampling technique or other method of election, to obtain audit evidence about the amount and dicloure in the conolidated financial tatement. An audit alo include evaluating the appropriatene of accounting policie ued and the reaonablene of accounting etimate made, a well a the overall preentation of the conolidated financial tatement. We believe that the audit evidence we have obtained i ufficient and appropriate to provide a bai for our audit opinion. In our opinion, the conolidated financial tatement give a true and fair view of the aet and liabilitie and of the financial poition of the Group at December 31 t, 2013 and of the reult of it operation for the year then ended in accordance with International Financial Reporting Standard a adopted by the European Union. II. Jutification of our aement In accordance with the requirement of article L. 823-9 of French Commercial Code (Code de commerce) relating to the jutification of our aement, we bring to your attention the following matter: L Oréal perform impairment tet on goodwill and intangible aet with indefinite ueful live at leat once a year and whenever there i an indication that an aet may be impaired, in accordance with the method et out in Note 1.15 and 13 to the conolidated financial tatement. We have reviewed the term and condition for implementing thee impairment tet a well a the aumption applied; Obligation relating to penion, early retirement benefit and other related benefit granted to employee have been valued and recorded in accordance with the accounting policie decribed in Note 1.23 and 21 to the conolidated financial tatement. We have reviewed and analyzed the valuation method of thee obligation and the data ued and the aumption applied. Thee aement were made a part of our audit of the conolidated financial tatement taken a a whole, and therefore contributed to the opinion we formed which i expreed in the firt part of thi report. REGISTRATION DOCUMENT / L ORÉAL 2013 163

III. Specific verification A required by law and in accordance with profeional tandard applicable in France, we have alo verified the information preented in the Group Management Report. We have no matter to report a to it fair preentation and it conitency with the conolidated financial tatement. Neuilly-ur-Seine, February 14 th, 2014 The Statutory Auditor PricewaterhoueCooper Audit Gérard Morin Deloitte & Aocié David Dupont-Noel 164 REGISTRATION DOCUMENT / L ORÉAL 2013

5 PARENT COMPANY FINANCIAL STATEMENTS * 5.1. COMPARED INCOME STATEMENTS 166 5.2. COMPARED BALANCE SHEETS 167 5.3. CHANGES IN SHAREHOLDERS EQUITY 168 5.4. STATEMENTS OF CASH FLOWS 169 5.5. NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS 170 Note 1 Accounting principle 170 Note 2 Sale 173 Note 3 Other revenue 173 Note 4 Average headcount 173 Note 5 Depreciation, amortiation and charge to proviion 173 Note 6 Net financial income 174 Note 7 Exceptional item 174 Note 8 Income tax 174 Note 9 Increae or reduction in future tax liabilitie 175 Note 10 Reearch cot 175 Note 11 Intangible aet 175 Note 12 Tangible aet 176 Note 13 Non-current aet held under finance leae 176 Note 14 Financial aet 177 Note 15 Marketable ecuritie 177 Note 16 Maturity of receivable 178 Note 17 Stock purchae or ubcription option Free hare 178 Note 18 Proviion for liabilitie and charge 179 Note 19 Borrowing and debt 180 Note 20 Maturity of payable 181 Note 21 Unrealied exchange gain and loe 181 Note 22 Derivative financial intrument 182 Note 23 Tranaction and balance with related entitie and partie 183 Note 24 Off-balance heet commitment 183 Note 25 Change in working capital 184 Note 26 Change in other financial aet 184 Note 27 Cah and cah equivalent at the end of the year 184 Note 28 Other dicloure 185 Note 29 Subequent event 185 5.6. TABLE OF SUBSIDIARIES AND HOLDINGS AT DECEMBER 31 t, 2013 186 5.7. OTHER INFORMATION RELATING TO THE FINANCIAL STATEMENTS OF L ORÉAL PARENT COMPANY 189 5.7.1. Expene and charge falling under Article 223 quater of the French Tax Code 189 5.7.2. Trade account payable 189 5.7.3. Net ale (excluding taxe) 189 5.8. FIVE-YEAR FINANCIAL SUMMARY 190 5.9. INVESTMENTS (MAIN CHANGES INCLUDING SHAREHOLDING THRESHOLD CHANGES) 191 5.10. STATUTORY AUDITORS REPORT ON THE FINANCIAL STATEMENTS 192 * Thi information form an integral part of the Annual Financial Report a provided for in article L. 451-1-2 of the French Monetary and Financial Code. REGISTRATION DOCUMENT / L ORÉAL 2013 165

5 COMPARED PARENT COMPANYFINANCIAL STATEMENTS INCOME STATEMENTS The individual financial tatement et out in thi chapter are thoe of L Oréal parent company. They how the financial poition of the parent company tricto enu. Unlike the conolidated financial tatement, they do not include the reult of the Group ubidiarie. The information with regard to the parent company financial tatement that wa previouly included in the Management Report of the Board of Director i now included in thi chapter. The page concerned are the table howing the main change and threhold croed regarding invetment in ubidiarie and holding, the table of ubidiarie and holding and the five-year financial ummary a well a the amount of expene and charge provided for in Article 223 quater of the French Tax Code and the table howing trade account payable provided for by Article L. 441-6-1 and D. 441-4 of the French Commercial Code. The Statutory Auditor Report on the parent company financial tatement complete thi information. 5.1. COMPARED INCOME STATEMENTS million Note 12.31.2013 12.31.2012 12.31.2011 Operating revenue 3,070.0 2,865.5 2,597.7 Sale 2 2,777.0 2,606.8 2,421.1 Reveral of proviion and tranfer of charge 59.2 38.3 28.6 Other revenue 3 233.8 220.4 148.0 Operating expene -2,837.5-2,619.6-2,409.0 Purchae and change in inventorie -215.6-209.2-196.0 Other purchae and external charge -1,486.8-1,380.0-1,275.6 Taxe and imilar payment -140.1-113.2-95.3 Peronnel cot -776.9-698.1-659.4 Depreciation, amortiation and charge to proviion 5-130.0-134.0-102.6 Other charge -88.1-85.1-80.1 Operating profit 232.5 245.9 188.7 Net financial revenue 6 2,236.0 2,234.0 2,033.0 Net charge to (-)/reveral of (+) proviion and tranfer of charge 6-108.3-25.7-74.4 Exchange gain and loe 2.3-62.4-21.8 Net financial income 2,130.0 2,145.9 1,936.8 Profit before tax and exceptional item 2,362.5 2,391.8 2,125.5 Exceptional item 7 8.1 43.1 14.4 Employee Profit Sharing -14.2-15.5-21.4 Income tax 8 9.7-11.4 51.3 NET PROFIT 2,366.1 2,408.0 2,169.8 166 REGISTRATION DOCUMENT / L ORÉAL 2013

PARENT COMPANYFINANCIAL STATEMENTS COMPARED BALANCE SHEETS 5.2. COMPARED BALANCE SHEETS Aet million (net amount) Note 12.31.2013 12.31.2012 12.31.2011 Intangible aet 11 886.1 707.3 669.4 Tangible aet 12 390.7 345.6 299.4 Financial aet 14 9,989.9 9,846.9 9,200.5 Non-current aet 11,266.7 10,899.8 10,169.3 Inventorie 39.2 34.0 34.6 Prepayment to upplier 28.2 23.3 25.1 Trade account receivable 16 548.6 548.4 423.5 Other current aet 16 199.2 171.8 149.6 Marketable ecuritie 15 210.5 309.4 596.5 Cah and cah equivalent 27 974.7 1,093.1 238.4 Current aet 2,000.4 2,180.0 1,467.7 Prepaid expene 31.9 27.0 26.8 Unrealied exchange loe 21 16.2 10.4 18.0 TOTAL ASSETS 13,315.2 13,117.2 11,681.8 Shareholder equity and liabilitie 5 million Note 12.31.2013 12.31.2012 12.31.2011 Share capital 121.2 121.8 120.6 Additional paid-in capital 2,101.2 1,679.0 1,271.4 Reerve and retained earning 7,560.3 7,527.8 6,562.4 Net profit 2,366.1 2,408.0 2,169.8 Regulated proviion 90.4 88.6 82.5 Shareholder equity 12,239.2 11,825.2 10,206.7 Proviion for liabilitie and charge 18 234.9 238.2 268.8 Borrowing and debt 19 32.6 330.4 506.8 Trade account payable 20 454.6 414.0 382.3 Other current liabilitie 20 347.0 304.7 305.9 Other liabilitie 834.2 1,049.1 1,195.0 Unrealied exchange gain 21 6.9 4.7 11.3 TOTAL SHAREHOLDERS EQUITY AND LIABILITIES 13,315.2 13,117.2 11,681.8 REGISTRATION DOCUMENT / L ORÉAL 2013 167

5 CHANGES PARENT COMPANYFINANCIAL STATEMENTS IN SHAREHOLDERS EQUITY 5.3. CHANGES IN SHAREHOLDERS EQUITY The hare capital comprie 605,901,887 hare with a par value of 0.2 each following tranaction carried out in 2013: ubcription to 5,961,501 hare following the exercie of option, and 238,200 of free hare; cancellation of 9,108,641 treaury hare. Change in hareholder equity are a follow: million Share capital Additional paid-in capital 1976 revaluation reerve Reerve and retained earning Net profit Regulated proviion Balance at December 31 t, 2010 before appropriation of net profit 120.2 1,148.3 45.4 5,586.9 1,995.3 66.5 8,962.6 Change in hare capital 0.4 123.1 123.5 Appropriation of 2010 net profit 930.1-930.1 0.0 Dividend paid for 2010-1,065.2-1,065.2 2011 net profit 2,169.8 2,169.8 Other movement during the period 16,0 16,0 Balance at December 31 t, 2011 before appropriation of net profit 120.6 1,271.4 45.4 6,517.0 2,169.8 82.5 10,206.7 Change in hare capital 1.2 407.6 408.8 Appropriation of 2011 net profit 965.5-965.5 0.0 Dividend paid for 2011-1,204.3-1,204.3 2012 net profit 2,408.0 2,408.0 Other movement during the period 6.0 6.0 Balance at December 31 t, 2012 before appropriation of net profit 121.8 1,679.0 45.4 7,482.5 2,408.0 88.5 11,825.2 Change in hare capital -0.6 422.2-995.0-593.4 Appropriation of 2012 net profit 1,027.4-1,027.4 Dividend paid for 2012-1,380.6-1,380.6 2013 net profit 2,366.1 2,366.1 Other movement during the period 1.9 1.9 BALANCE AT DECEMBER 31 t, 2013 BEFORE APPROPRIATION OF NET PROFIT 121.2 2,101.2 45.4 7,514.9 2,366.1 90.4 12,239.2 Total Reerve include an amount of 16.8 million in 2013 correponding to unpaid dividend on treaury hare, compared with 12.3 million in 2012 and 18.2 million in 2011. Regulated proviion conit partially of the proviion for invetment which amounted to 17.2 million at December 31 t, 2013, compared with 21million at December 31 t, 2012 and 23.7 million at December 31 t, 2011. In 2013, no charge wa done to the proviion for invetment conequently to the change of law ( 6.1 million in 2011 and 5.7 million in 2010). Thi proviion include the tranfer to the Company of ome of the proviion et aide by our ubidiarie under a Group agreement. In 2013, an amount of 3.8 million et aide to the proviion in 2008 wa revered (compared with 2.7 million in 2012 and 0.8 million in 2011 ). Accelerated tax-driven depreciation at December 31 t, 2013 amount to 73.1 million compared with 67.3 million at December 31 t, 2012 and 58.4 million at December 31 t, 2011. Detail of hare ubcription option and free hare plan are provided in note 17. 168 REGISTRATION DOCUMENT / L ORÉAL 2013

PARENT COMPANYFINANCIAL STATEMENTS STATEMENTS OF CASH FLOWS 5.4. STATEMENTS OF CASH FLOWS million Note 12.31.2013 12.31.2012 12.31.2011 Operating activitie Net profit 2,366.1 2,408.0 2,169.8 Depreciation and amortiation 90.6 81.2 71.1 Charge to proviion (net of reveral) 100.8 1.4 133.8 Gain and loe on dipoal of non-current aet 9.7 20.1 1.3 Other non-cah tranaction (complete tranfer of aet and liabilitie) - - -45.4 Gro cah flow 2,567.2 2,510.7 2,330.6 Change in working capital 25-17.9-129.1-60.7 Net cah provided by operating activitie 2,549.3 2,381.6 2,269.9 Inveting activitie Invetment in non-current aet -905.3-1,069.4-220.8 Change in other financial aet 26-519.6 474.5-185.7 Dipoal of non-current aet 11.7 33.6 0.4 Net cah from (ued in) inveting activitie -1,413.2-561.3-406.1 Financing activitie Capital increae 423.5 408.8 123.5 Dividend paid -1,381.0-1,204.3-1,065.2 Change in financial debt -34.6-342.0-965.3 Net cah from (ued in) financing activitie -992.1-1,137.5-1,907.0 Cah acquired or old in the period (complete tranfer of aet and liabilitie) 0.4-40.3 Change in cah and cah equivalent 144.3 682.8-2.9 Cah and cah equivalent at beginning of year 829.7 146.9 149.8 CASH AND CASH EQUIVALENTS AT END OF YEAR 27 974.0 829.7 146.9 5 REGISTRATION DOCUMENT / L ORÉAL 2013 169

5 NOTES PARENT COMPANYFINANCIAL STATEMENTS TO THE PARENT COMPANY FINANCIAL STATEMENTS 5.5. NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS DETAILED LIST OF NOTES NOTE 1 Accounting principle 170 NOTE 2 Sale 173 NOTE 3 Other revenue 173 NOTE 4 Average headcount 173 NOTE 5 Depreciation, amortiation and charge to proviion 173 NOTE 6 Net financial income 174 NOTE 7 Exceptional item 174 NOTE 8 Income tax 174 NOTE 9 Increae or reduction in future tax liabilitie 175 NOTE 10 Reearch cot 175 NOTE 11 Intangible aet 175 NOTE 12 Tangible aet 176 NOTE 13 Non-current aet held under finance leae 176 NOTE 14 Financial aet 177 NOTE 17 Stock purchae or ubcription option Free hare 178 NOTE 18 Proviion for liabilitie and charge 179 NOTE 19 Borrowing and debt 180 NOTE 20 Maturity of payable 181 NOTE 21 Unrealied exchange gain and loe 181 NOTE 22 Derivative financial intrument 182 NOTE 23 Tranaction and balance with related entitie and partie 183 NOTE 24 Off-balance heet commitment 183 NOTE 25 Change in working capital 184 NOTE 26 Change in other financial aet 184 NOTE 27 Cah and cah equivalent at the end of the year 184 NOTE 28 Other dicloure 185 NOTE 29 Subequent event 185 NOTE 15 Marketable ecuritie 177 NOTE 16 Maturity of receivable 178 The following note form an integral part of the parent company financial tatement. The financial tatement are preented in million of euro, while the figure in the table detailing ubidiarie and affiliate are expreed in thouand of euro. NOTE 1 Accounting principle The Company annual financial tatement are prepared in accordance with French law and regulation (French Chart of Account) and with French generally accepted accounting principle. The item recorded in the financial tatement are valued at hitorical cot, except for non-current aet revalued in accordance with legal requirement. 1.1. Sale Thee are compried of ale of good (net of rebate and dicount) and ervice (including technological aitance fee). 170 REGISTRATION DOCUMENT / L ORÉAL 2013

PARENT COMPANYFINANCIAL STATEMENTS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS 1.2. Advertiing and promotion expene Expene relating to the advertiement and promotion of product to cutomer and conumer are recognied a expene for the year in which the advertiement or promotional initiative take place. 1.6. Tangible aet Tangible aet are recognied at purchae cot, including acquiition expene. The ueful live of tangible aet are a follow: Ueful live 1.3. Reearch and development cot Building Fixture and fitting Indutrial machinery and equipment Other tangible aet 20-50 year 5-10 year 10 year 3-10 year Reearch and development cot are recognied in expene in the period in which they are incurred. 1.4. Income tax The Company ha opted for the French tax group regime. French companie included in the cope of tax conolidation recognie an income tax charge in their own account on the bai of their own taxable profit and loe. L Oréal, a the parent company of the tax group, recognie a tax income the difference between the aggregate tax charge recognied by the ubidiarie and the tax due on the bai of conolidated taxable profit or lo of the tax group. 1.5. Intangible aet Intangible aet are recorded in the balance heet at purchae cot. The value of newly acquired trademark i calculated baed on a multi-criteria approach taking into conideration their reputation and their future contribution to profit. In accordance with regulation no. 2004-06 on aet, certain trademark have been identified a amortiable in accordance with their etimated ueful life. Non-amortiable trademark are teted for impairment at leat once a year on the bai of the valuation model ued at the time of their acquiition. A proviion for impairment i recorded where appropriate. Initial trademark regitration cot have been recorded a expene ince 2005. Patent are amortied over a period ranging from two to ten year. Buine goodwill i not amortied. It i written down whenever the preent value of future cah flow i le than the book value. Software of material value i amortied uing the traight-line method over it probable ueful life, generally between five and even year. It i alo ubject to accelerated tax-driven amortiation, which i recognied over a 12-month period. Other intangible aet are uually amortied over period not exceeding 20 year. Both traight-line and declining-balance depreciation i calculated over the actual ueful live of the aet concerned. Exceptionally, indutrial machinery and equipment i depreciated uing the traight-line method over a period of ten year, with all additional depreciation claified a accelerated tax-driven depreciation. 1.7. Financial aet 1.7.1. INVESTMENTS AND ADVANCES Thee item are recognied in the balance heet at purchae cot excluding incidental expene. Their value i aeed annually by reference to their value in ue, which i mainly baed on the current and forecat profitability of the ubidiary concerned and the hare of equity owned. If the value in ue fall below the purchae cot, a proviion for impairment i recognied. 1.7.2. OTHER FINANCIAL ASSETS Loan and other receivable are valued at their nominal amount. Loan and other receivable denominated in foreign currencie are tranlated at the exchange rate prevailing at the end of the financial year. If neceary, proviion are recognied againt thee item to reflect their value in ue at the end of the financial year. Treaury tock acquired in connection with buyback programme i recognied in other long-term invetment. At the end of the financial year, other long-term invetment are compared with their probable ale price and a proviion for impairment recognied where appropriate. 1.8. Inventorie Inventorie are valued uing the weighted average cot method. A proviion i made for obolete and low-moving inventorie on the bai of their probable net realiable value, etimated on the bai of hitoric and projected data. 5 REGISTRATION DOCUMENT / L ORÉAL 2013 171

5 NOTES PARENT COMPANYFINANCIAL STATEMENTS TO THE PARENT COMPANY FINANCIAL STATEMENTS 1.9. Trade account receivable and other receivable Trade account receivable and other receivable are recorded at their nominal value. Where appropriate, a proviion i recognied baed on an aement of the rik of non-recovery. 1.10. Marketable ecuritie Marketable ecuritie are recognied at purchae cot and are valued at the end of the financial year at their probable ale price. Treaury tock held that i pecifically allocated to employee tock option plan i recognied in marketable ecuritie. Since January 1 t, 2000, no dicount ha been granted on the exercie price of the option. Provided that the hare are purchaed at a lower price than the exercie price, no proviion for impairment i required. However, a proviion for impairment i recognied in the event of a decline in the market price, repreenting the difference between the book value of the Treaury tock and the average hare price in the month preceding the reporting date. A proviion for liabilitie and charge in repect of hare of Treaury tock allocated to free hare plan for L Oréal parent company employee i recognied over the period during which the right to the free hare vet. Share of Treaury tock allocated to free hare plan for employee of other Group ubidiarie are written down in full. However, the ubidiarie concerned will bear mot of the cot of granting thee free hare. 1.11. Proviion for liabilitie and charge Proviion for liabilitie and charge are recognied to cover probable outflow of reource to third partie, without receipt of equivalent conideration by the Company. They relate mainly to indutrial and commercial contingencie and litigation (legal action, product return, etc.) and to tax and employee-related contingencie. Thee proviion are etimated on the bai of the mot likely aumption or by uing tatitical method, depending on their type. 1.12. Accounting for foreign currency tranaction and exchange rate hedge All receivable and payable denominated in foreign currencie are tranlated at the exchange rate prevailing at the end of the financial year. Exchange rate hedging intrument are contracted to hedge commercial tranaction recognied in the balance heet or future tranaction that are conidered to be highly probable. Gain and loe generated by thee intrument are recognied ymmetrically with the gain and loe ariing on the hedged item. Tranlation difference on operating aet and liabilitie and related hedging intrument are recognied in the balance heet a Unrealied exchange loe or Unrealied exchange gain. A proviion i recognied if the um of thee unrealied exchange gain and loe how a potential exchange lo baed on the overall exchange poition of all currencie taken together. Hedge have already been taken out in repect of forecat operating tranaction for the next financial year. The impact of uch hedge on profit or lo will be recorded during the ame accounting period a the tranaction hedged. 1.13. Accounting for interet rate intrument Gain and loe ariing on interet rate wap and cap hedging financial liabilitie expoed to interet rate rik are recorded on a time-proportion bai ymmetrically with the gain and loe on the item hedged. 1.14. Employee retirement obligation and related benefit L Oréal S.A. operate penion, early retirement and other benefit cheme for employee and retired employee in accordance with local legilation and regulation. Corporate officer are regarded a employee for all additional benefit relating to their remuneration, and are therefore covered by the ame employee benefit cheme. Thee obligation are partially funded by an external cheme where the fund are gradually built up through contribution paid. The contribution are expened a incurred under the Other purchae and external charge caption. The related obligation are meaured uing an actuarial valuation method baed on final alarie. The method take account of length of ervice, life expectancy, turnover by category of peronnel and economic aumption uch a inflation and dicount rate. No proviion i recognied in the balance heet for net unfunded obligation, which are hown in off-balance heet commitment. Since 2004, the obligation in repect of long-ervice award i no longer recognied a an off-balance heet commitment; intead, a proviion i recognied in the balance heet baed on an actuarial valuation of the obligation. 172 REGISTRATION DOCUMENT / L ORÉAL 2013

PARENT COMPANYFINANCIAL STATEMENTS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS NOTE 2 Sale million 12.31.2013 12.31.2012 12.31.2011 Good 919.4 896.6 887.1 Service (1) 1,321.3 1,309.2 1,238.9 Rental 42.5 40.0 46.4 Other revenue from ancillary activitie 493.8 361.0 248.7 TOTAL 2,777.0 2,606.8 2,421.1 (1) Mainly invoicing of technological aitance. The Company generated 1,372.9 million of it ale in France in 2013, compared with 1,289.2 million in 2012 and 1,362.1 million in 2011. NOTE 3 Other revenue Thi account mainly include trademark royaltie. NOTE 4 Average headcount 5 Average headcount can be broken down a follow: 2013 2012 2011 Executive 3,405 3,299 3,146 Supervior 1,982 2,001 2,028 Adminitrative taff 250 270 307 Manual worker 234 239 250 Sale repreentative 292 288 285 TOTAL 6,163 6,097 6,016 of which apprentice 174 166 171 External temporary taff 171 158 166 NOTE 5 Depreciation, amortiation and charge to proviion Depreciation, amortiation and charge to proviion can be broken down a follow: million 12.31.2013 12.31.2012 12.31.2011 Depreciation and amortiation -89.7-79.7-63.5 Impairment of non-current aet - - -7.1 Impairment of current aet -4.4-4.7-2.6 Proviion for liabilitie and charge -35.9-49.6-29.4 TOTAL -130.0-134.0-102.6 REGISTRATION DOCUMENT / L ORÉAL 2013 173

5 NOTES PARENT COMPANYFINANCIAL STATEMENTS TO THE PARENT COMPANY FINANCIAL STATEMENTS NOTE 6 Net financial income Net financial income amount to 2,236.0 million in 2013 ( 2,234.0 million in 2012 and 2,033.0 million in 2011), and mainly include the following item: million 12.31.2013 12.31.2012 12.31.2011 Dividend received 2,205.2 2,187.1 1,957.6 Revenue on other receivable and marketable ecuritie 2.3 1.6 5.0 Interet expene on borrowing and financial debt -0.2-3.3-23.4 Loe ettled at the level of partnerhip entitie (SNC) -7.9-0.8-0.1 Other item not broken down (1) 36.6 49.4 93.9 TOTAL 2,236.0 2,234.0 2,033.0 (1) Including recharge to ubidiarie of the cot of free hare grant for 40 million in 2013, 51.3 million in 2012 and 48.2 million in 2011, and a merger urplu relating to the complete tranfer of aet and liabilitie of Laboratoire Garnier et Cie for 45.4 million in 2011. The Net (charge to)/reveral of proviion and tranfer of charge) caption repreent net charge of - 108.3 million in 2013 compared with net reveral of - 25.7 million in 2012 and net reveral of - 74.4 million in 2011. The caption mainly include: million 12.31.2013 12.31.2012 12.31.2011 Net charge to (-)/reveral of (+) proviion for impairment of financial aet (excluding Treaury tock) -59.8 29.5-16.4 Net charge to (-)/reveral of (+) proviion for impairment of Treaury tock (1) -44.8-54.5-54.8 Net charge to (-)/reveral of (+) proviion for liabilitie and charge relating to financial item -3.7-0.6-5.3 Net charge to (-)/reveral of (+) proviion for impairment of other financial aet n n 1.1 Other movement not broken down n -0.1 1.0 TOTAL -108.3-25.7-74.4 (1) Charge offet by accrued revenue relating to recharge to ubidiarie of the cot of free hare grant in 2013, 2012 and 2011 (refer herebefore). NOTE 7 Exceptional item In 2011, 2012 and 2013, thi caption notably include charge to proviion or reveral of proviion for liabilitie and charge. NOTE 8 Income tax The income tax for the year break down a follow: million 12.31.2013 12.31.2012 12.31.2011 Tax on profit before tax and exceptional item 1.0-21.8 37.6 Tax on exceptional item and employee Profit Sharing 8.7 10.4 13.7 INCOME TAX 9.7-11.4 51.3 The income tax gain booked by L Oréal in 2013 reflect the expene relating to the additional 3% levy on the amount of dividend paid ( 41.4 million), and aving of 79.3 million ( 77.9 million in 2012 and 72.8 million in 2011) reulting from tax conolidation. Thee aving mainly tem from the utiliation of tax loe from companie within the tax group. The 2012 income tax expene included the impact of tax audit. The application of tax legilation led to an increae of 49.5 million in net profit for 2013, chiefly reflecting the net charge to regulated proviion along with reearch and corporate ponorhip tax credit among other. Income tax wa calculated taking account of the exceptional temporary 10.7% contribution for 2013. 174 REGISTRATION DOCUMENT / L ORÉAL 2013

PARENT COMPANYFINANCIAL STATEMENTS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS In accordance with the poition tatement publihed by the French accounting tandard etter (ANC) on February 28 th, 2013, the CICE tax credit introduced in France to boot competitivene and employment wa recognized for the firt time in 2013 a a deduction from payroll cot in an amount of 3.3 million. The CICE tax credit i equal to 4% of alarie paid in repect of 2013 and 6% of alarie paid in ubequent year. It will be collected in 2014 when income tax i paid and it ue will be monitored during that year. NOTE 9 Increae or reduction in future tax liabilitie 12.31.2011 12.31.2012 Change 12.31.2013 million Aet Liability Aet Liability Aet Liability Aet Liability Temporary difference Regulated proviion - 22.2-23.1 7.1 9.2-25.2 Temporarily non-deductible charge 51.3-70.3-23.2 13.6 79.9 - Charge deducted (or revenue taxed) for tax purpoe but not yet recognied - 2.3-1.9 1.9 3.2-3.2 Temporarily non-taxable revenue - - - - - - - - Deductible item Tax loe, deferred item - - - - - - - - Potentially taxable item Special reerve for long-term capital gain - 188.6-188.6 - - - 188.6 The figure have been calculated taking account of 3.3% ocial contribution which increae income tax at both tatutory and reduced tax rate. 5 NOTE 10 Reearch cot Amount inveted in Reearch activitie in 2013 totalled 738.6 million compared with 695.4 million in 2012 and 619.4 million in 2011. NOTE 11 Intangible aet million 12.31.2011 12.31.2012 Acquiition/ Amortiation Dipoal/ Reveral Other movement 12.31.2013 Patent and trademark 452.6 455.1 23.0-1.6 13.6 490.1 Buine goodwill 113.3 113.3 157.2 - -1.7 268.8 Software 204.4 242.4 20.6-6.9 4.1 260.2 Other intangible aet 181.9 187.1 n/ - 24.0 211.1 Intangible aet in progre 30.1 59.9 31.4-5 -42.6 43.7 Gro value 982.3 1,057.8 232.2-13.5-2.6 1,273.9 Patent and trademark 44.2 55.2 14.5-1.6-68.1 Buine goodwill 0.3 0.3 - - - 0.3 Software 134.5 158.7 28.6-6.9-180.4 Other intangible aet 37.4 39.8 2.7 - - 42.5 Amortiation 216.4 254.0 45.8-8.5-291.3 Patent and trademark 34.6 34.6 - - 16.8 51.4 Buine goodwill - - - - 41.6 41.6 Other intangible aet 61.9 61.9 - - -58.4 3.5 Proviion 96.5 96.5 - - - 96.5 NET BOOK VALUE 669.4 707.3 186.4-5 -2.6 886.1 REGISTRATION DOCUMENT / L ORÉAL 2013 175

5 NOTES PARENT COMPANYFINANCIAL STATEMENTS TO THE PARENT COMPANY FINANCIAL STATEMENTS In 2013, the increae in buine goodwill come from the complete tranfer of aet and liabilitie of Cadum. In 2012, change in aet in progre mainly came from the acquiition of Urban Decay trademark. In 2011, the increae in the Patent and trademark and Other intangible aet caption mainly reulted from the acquiition of Pacific Biocience Laboratorie (Clarionic) for 124.7 million, of which 71.1 million relate to patent and trademark. The ret of the increae reult from the complete tranfer of aet and liabilitie involving Laboratoire Garnier & Cie. NOTE 12 Tangible aet million 12.31.2011 12.31.2012 Acquiition/ Depreciation Dipoal/ Reveral Other movement 12.31.2013 Land 63.5 79.4 1.6-5.2 0.3 76.1 Building 464.8 493.5 46.2-2.6 23.5 560.6 Indutrial machinery and equipment 190.9 195.7 9.9-8.8 3.1 199.9 Other tangible aet 110.1 122.1 17.2-4.6 4.5 139.2 Tangible aet in progre 20.5 34.4 19.6-1.5-28.9 23.6 Advance and prepayment 2.8 1.3 0.3 - - 1.6 Gro value 852.6 926.4 94.8-22.7 2.5 1,001.0 Land - - 0.1-0.1 0.2 Building 319.2 338.8 20.3-2.6-0.1 356.4 Indutrial machinery and equipment 161.8 163.8 9.3-8.8-164.3 Other tangible aet 72.2 78.2 15.0-3.8-89.4 Depreciation 553.2 580.8 44.7-15.2-610.3 NET BOOK VALUE 299.4 345.6 50.1-7.5 2.5 390.7 Depreciation and amortiation recognied in 2013 againt tangible and intangible aet included: a charge of 81.0 million on a traight-line bai; a charge of 8.7 million on a declining-balance bai; a charge of 0.9 million relating to exceptional depreciation and amortiation. NOTE 13 Non-current aet held under finance leae Non-current aet held under finance leae at 12.31.2013 Balance heet total including non-current aet held under finance leae million Cot on initial recognition (1) Depreciation (2) Net book value Balance heet caption Period Accumulated Gro value Depreciation Net book value Land and building 9.2-0.5-1.9 7.3 645.9-358.5 287.4 TOTAL AT 12.31.2013 9.2-0.5-1.9 7.3 645.9-358.5 287.4 Total at 12.31.2012 43.5-1.7-22.7 20.8 616.4-361.5 254.9 Total at 12.31.2011 43.5-1.7-21.0 22.5 762.7-501.9 260.8 (1) Value of the aet on the date the leae were igned. (2) Depreciation charge for the year and accumulated depreciation that would have been recognied for thee aet had they been purchaed outright Depreciation method ued: traight-line 2% to 5%. 176 REGISTRATION DOCUMENT / L ORÉAL 2013

PARENT COMPANYFINANCIAL STATEMENTS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS Finance leae commitment million Leae payment made Leae payment outtanding at year-end Balance heet caption Period Accumulated Le than 1 year 1 to 5 year More than 5 year Total payable Reidual purchae price under the leae Land and building 1.1 4.6 1.1 4.4 0.5 6.0 - TOTAL AT 12.31.2013 1.1 4.6 1.1 4.4 0.5 6.0 - Total at 12.31.2012 5.3 67.3 4.9 15.8 1.6 22.3 1.4 Total at 12.31.2011 4.9 62.0 5.4 19.6 2.7 27.7 1.4 NOTE 14 Financial aet million 12.31.2011 12.31.2012 Acquiition/ Subcription Dipoal/ Reduction Other movement 12.31.2013 Invetment 9,047.5 9,488.1 26.5-13.7-104.8 9,396.1 Loan and other receivable 504.8 177.8 126.3-20.9-50.5 232.7 Other (1) 3.8 507.1 1,353.4-1,113.8-746.7 Gro value 9,556.1 10,173.0 1,506.2-1,148.4-155.3 10,375.5 Invetment 314.6 285.0 80.7-20.8-0.4 344.5 Loan and other receivable 40.9 41.0 1.0-1.0-41.0 Other 0.1 0.1 - - - 0.1 Proviion for impairment 355.6 326.1 81.7-21.8-0.4 385.6 NET BOOK VALUE 9,200.5 9,846.9 1,424.5-1,126.6-154.9 9,989.9 5 (1) The balance at the end of 2013 include hare held to be cancelled for 244.1 million, a well a cah-collateral agreement granted to the bank of the group for 491.3 million. The table detailing ubidiarie and affiliate i preented at the end of the preent note. NOTE 15 Marketable ecuritie Thi account can be broken down a follow: million 12.31.2013 12.31.2012 12.31.2011 L Oréal hare 323.6 405.3 644.5 Financial intrument/premium paid on option 41.1 13.4 6.8 Gro value 364.7 418.7 651.3 L Oréal hare -154.2-109.3-54.8 Financial intrument/premium paid on option - - - Proviion for impairment -154.2-109.3-54.8 NET BOOK VALUE 210.5 309.4 596.5 The 4,152,857 L Oréal hare of Treaury tock held in connection with employee tock purchae option plan had a net value of 169.4 million at December 31 t, 2013 againt 296.0 million at December 31 t, 2012 and 589.7 million at December 31 t, 2011. In 2013, tock option were exercied in repect of 1,224,058 hare. Stock purchae option expiring in 2013 repreented a total of 677,570 hare or 49.1 million (gro and net bai). In 2013, the total market value of Treaury tock amounted to 519.8 million baed on the average hare price in December and to 530.3 million baed on the cloing hare price on December 31 t. REGISTRATION DOCUMENT / L ORÉAL 2013 177

5 NOTES PARENT COMPANYFINANCIAL STATEMENTS TO THE PARENT COMPANY FINANCIAL STATEMENTS In 2012, the total market value of Treaury tock amounted to 563.8 million baed on the average hare price in December and to 564.0 million baed on the cloing hare price on December 31 t. In 2011, the total market value of Treaury tock amounted to 679.0 million baed on the average hare price in December and to 693.8 million baed on the cloing hare price on December 31 t. NOTE 16 Maturity of receivable million Le than 1 year More than 1 year Gro Proviion for impairment Loan and other receivable 161.2 71.4 232.6 41.0 191.6 Other financial aet 502.4-502.4-502.4 Trade account receivable 411.9 139.6 551.5 2.9 548.6 Other current aet, of which 199.8-199.8 0.6 199.2 Tax and employee-related receivable 135.5-135.5-135.5 Receivable from Group and hareholder 18.1-18.1-18.1 Other receivable 46.2-46.2 0.6 45.6 Prepaid expene 31.9-31.9-31.9 Net Accrual account included in receivable amounted to 155. 6 million at December 31 t, 2013 compared with 113.8 million at December 31 t, 2012 and 58.9 million at December 31 t, 2011. NOTE 17 Stock purchae or ubcription option Free hare 17.1. Share ubcription or purchae option The table below et out data concerning option plan in force at December 31 t, 2013. Grant date Number of option Number of option not yet exercied From Exercie period To Exercie price 03.24.2004 2,000,000 71,736 03.25.2009 03.24.2014 64.69 12.01.2004 4,000,000 206,250 12.02.2009 12.01.2014 55.54 06.29.2005 400,000 150,000 06.30.2010 06.29.2015 60.17 11.30.2005 4,200,000 505,609 12.01.2010 11.30.2015 61.37 11.30.2005 1,800,000 225,152 12.01.2010 11.30.2015 62.94 04.25.2006 2,000,000 1,000,000 04.26.2011 04.25.2016 72.60 12.01.2006 5,500,000 1,702,062 12.02.2011 12.01.2016 78.06 11.30.2007 4,000,000 1,779,675 12.01.2012 11.30.2017 91.66 03.25.2009 3,650,000 3,433,500 03.26.2014 03.25.2019 50.11 04.27.2010 4,200,000 3,991,000 04.28.2015 04.27.2020 80.03 04.22.2011 1,470,000 1,233,500 04.23.2016 04.22.2021 83.19 All plan have a 5-year exercie period and no performancerelated condition, except the April 22 nd, 2011 plan (for all participant) and the April 27 th, 2010 and March 25 th, 2009 plan (for member of the Management Committee). The performance condition aociated with thee plan concern: April 22 nd, 2011 plan: for 50% of option granted, the increae in comparable Cometic revenue for the 2012, 2013, 2014 and 2015 fical year in relation to the growth in revenue for a panel of competitor; for 50% of option granted, the increae over the ame period in the Group conolidated operating profit. 178 REGISTRATION DOCUMENT / L ORÉAL 2013

PARENT COMPANYFINANCIAL STATEMENTS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS The calculation will be baed on the arithmetic average of the performance in 2012, 2013, 2014 and 2015 fical year and will ue a predefined allocation cale baed on the performance percentage reached. April 27 th, 2010 and March 25 th, 2009 plan: for 50% of option granted, the increae in comparable Cometic revenue for the 2011, 2012, 2013 and 2014 fical year for the 2010 plan and for the 2010, 2011, 2012 and 2013 fical year for the 2009 plan compared to the growth of the cometic market; for 50% of hare granted, the percentage, over the ame period, reulting from the ratio between the contribution before advertiing and promotion expene, i.e. the um of operating profit and advertiing and promotion expene, and publihed Cometic revenue. The calculation will be baed on the arithmetic average of performance in the 2011, 2012, 2013 and 2014 fical year for the 2010 plan and in the 2010, 2011, 2012 and 2013 fical year for the 2009 plan, and will ue a predefined allocation cale baed on the performance percentage achieved. At December 31 t, 2013, the performance condition were deemed to have been met. The hare price ued a the bai for calculating the 10% ocial contribution for the April 22 nd, 2011 plan wa 18.58. 17.2. Free hare On April 26 th, 2013, April 17 th, 2012, April 22 nd, 2011, April 27 th, 2010 and March 25 th, 2009, the Board of Director decided to grant repectively 1,057,820, 1,325,050, 1,038,000, 450,000 and 270,000 free hare. For the conditional grant of hare, the plan provide for a 4-year veting period after which veting i effective and final, ubject to meeting the condition of the plan. After thi veting period, a 2-year mandatory holding period applie for French reident, during which the hare cannot be old. A total of 237,800 hare were definitively granted on March 26 th, 2013, under the March 25 th, 2009 plan. The performance condition concern: April 26 th, 2013, April 17 th, 2012 and April 22 nd, 2011 plan: for 50% of hare granted, the increae in comparable Cometic revenue for the 2014, 2015 and 2016 fical year under the 2013 plan, for the 2013, 2014 and 2015 fical year under the 2012 plan, and the 2012, 2013 et 2014, fical year under the 2011 plan, in relation to the growth in revenue for a panel of competitor; for 50% of hare granted, the increae over the ame period in the Group conolidated operating profit. The calculation will be baed on the arithmetic average of the performance in the 2014, 2015 and 2016 fical year under the 2013 plan, in the 2013, 2014 and 2015 fical year under the 2012 plan, and 2012, 2013 and 2014 fical year under the 2011 plan, and will ue a predefined allocation cale baed on the performance percentage achieved. No performance condition applie below a block of 200 hare. April 27 th, 2010: for 25% of hare granted, the increae in comparable Cometic revenue for the 2011, 2012 and 2013 fical year, compared with the growth of the cometic market; for 75% of hare granted, the percentage, over the ame period, reulting from the ratio between operating profit and publihed Cometic revenue. The calculation will be baed on the arithmetic average of performance in the 2011, 2012 and 2013 fical year, and will ue a predefined allocation cale baed on the performance percentage achieved. At December 31 t, 2013, the performance condition were deemed to have been met. A rebilling agreement concerning the cot of free hare ha been et up ince 2011 between L Oréal parent company and the ubidiarie concerned. The hare price ued a the bai for calculating the ocial contribution wa 112.37 for the April 26 th, 2013 plan, 77.07 for free hare for the April 17 th, 2012 plan and 70.36 for the April 22 nd, 2011 plan. 5 NOTE 18 Proviion for liabilitie and charge million 12.31.2011 12.31.2012 Charge Reveral (ued) Reveral (not ued) Other 12.31.2013 Proviion for litigation 7.4 7.9 4.5-1.0-0.6-10.8 Proviion for foreing exchange loe 6.6 5.7 9.3-5.7 - - 9.3 Proviion for expene 55.8 87.3 59.9-51.3-3.8 2.5 94.6 Other proviion for liabilitie (1) 199.0 137.3 16.1-12.0-21.2-120.2 TOTAL 268.8 238.2 89.8-70.0-25.6 2.5 234.9 (1) Thi caption notably include proviion for tax contingencie and for indutrial and commercial rik relating to operation (contract, product return) and employee-related liabilitie. REGISTRATION DOCUMENT / L ORÉAL 2013 179

5 NOTES PARENT COMPANYFINANCIAL STATEMENTS TO THE PARENT COMPANY FINANCIAL STATEMENTS The change in proviion for liabilitie and charge impact the income tatement a follow: million Charge Reveral (ued) Reveral (not ued) Operating profit 35.9 44.7 5.0 Net financial income 50.7 24.4 - Exceptional item 3.2 0.9 20.6 Income tax 0.0 - - TOTAL 89.8 70.0 25.6 NOTE 19 Borrowing and debt L Oréal obtain financing through medium-term bank loan and from hort-term commercial paper iued in France. The amount of the programme i 2,600 million. None of the Group borrowing or debt contain an early repayment claue linked to financial ratio (covenant). Liquidity on the commercial paper iue i provided by confirmed hort-term credit facilitie with bank, which amounted to 3,200.0 million at December 31 t, 2013 ( 2,550.0 million at December 31 t, 2012 and 2,400.0 million at December 31 t, 2011). All borrowing and debt are denominated in euro and can be broken down a follow: Breakdown by type of debt million 12.31.2013 12.31.2012 12.31.2011 Bond n/ n/ n/ Borrowing and debt due to financial intitution - - 0.1 Commercial paper - - 344.3 Other borrowing and debt 31.9 66.9 71.1 Overdraft 0.7 263.5 91.3 TOTAL 32.6 330.4 506.8 Breakdown by maturity date million 12.31.2013 12.31.2012 12.31.2011 Le than 1 year 1.3 300.1 468.9 1 to 5 year 30.0 29.0 36.7 More than 5 year 1.3 1.3 1.2 TOTAL 32.6 330.4 506.8 Effective interet rate and average interet rate on borrowing and debt At the end of 2013, a the end of 2012, there are no outtanding commercial paper, or bank borrowing. The effective interet rate on borrowing and debt after taking into account hedging intrument wa 3.25% in 2011. 180 REGISTRATION DOCUMENT / L ORÉAL 2013

PARENT COMPANYFINANCIAL STATEMENTS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS NOTE 20 Maturity of payable million Le than 1 year More than 1 year Total Trade account payable 454.6-454.6 Other current liabilitie, of which 338.6 8.4 347.0 Tax and employee-related payable 263.9-263.9 Payable related to non-current aet 32.0 8.4 40.4 Payable to Group and hareholder 4.6-4.6 Other payable 38.1-38.1 Accrual account included in trade account payable and other current liabilitie are a follow: million 12.31.2013 12.31.2012 12.31.2011 Trade account payable 232.5 218.0 205.4 Payable related to non-current aet (1) 47.4 26.3 24.6 Tax and employee-related payable, of which 149.1 145.2 144.6 Proviion for employee Profit Sharing 15.8 18.8 23.0 Proviion for incentive 66.2 62.0 61.1 Other payable 27.9 29.3 29.1 TOTAL 456.9 418.8 403.7 (1) Mainly concerning Eie in 2011, 2012 and 2013. 5 NOTE 21 Unrealied exchange gain and loe The revaluation of foreign currency receivable and payable at the exchange rate prevailing at December 31 t, taking account of the related hedging intrument, led to the recognition of the following unrealied exchange gain and loe: million Unrealied exchange loe Unrealied exchange gain 12.31.2013 12.31.2012 12.31.2011 12.31.2013 12.31.2012 12.31.2011 Financial receivable 9.6 6.2 6.1 - - - Trade account receivable 2.7 2.8 0.1 0.5 0.8 2.9 Borrowing and debt - - 6.2-0.1 6.1 Trade account payable 0.1 0.1 3.5 1.8 1.5 0.1 Other payable - - - - - - Derivative financial intrument 3.8 1.3 2.1 4.6 2.3 2.2 TOTAL 16.2 10.4 18.0 6.9 4.7 11.3 In accordance with the accounting principle decribed above, the overall foreign exchange poition at December 31 t, 2013 i an unrealied lo of 9.3 million ariing mainly on the Venezuelan bolivar. Thi lo wa recognied through profit and lo. At December 31 t, 2012, the overall foreign exchange poition wa an unrealied lo of 5.7 million compared with an unrealied lo of 6.7 million at December 31 t, 2011. REGISTRATION DOCUMENT / L ORÉAL 2013 181

5 NOTES PARENT COMPANYFINANCIAL STATEMENTS TO THE PARENT COMPANY FINANCIAL STATEMENTS NOTE 22 Derivative financial intrument Derivative financial intrument can be broken down a follow: million Notional Market value 12.31.2013 12.31.2012 12.31.2011 12.31.2013 12.31.2012 12.31.2011 Currency future Purchae of EUR againt foreign currencie EUR/CHF (1) 381.4 7.5 7.9 0.2 - -0.1 EUR/RUB 147.9 176.2 264.6 0.3-3.5 0.3 EUR/CNY 98.6 126.3 165.4 - -0.3-9.1 EUR/BRL 68.9 73.1 73.4 4.7 3.0 0.2 EUR/GBP 35.9 29.3 29.8-0.3-1.0 EUR/JPY (1) 35.2 0.1 EUR/AUD (1) 20.0 17.4 16.7 0.4 0.1-1.2 EUR/USD 15.2 74.0 77.2-3.1-6.1 EUR/IDR 12.6 14.9 23.8-0.4-1.4 EUR/CAD 11.6 17.4 15.2 2.2 0.4-0.6 EUR/PLN 10.5 10.2 8.5-0.2-0.4 0.1 EUR/KZT 10.4 13.9 11.1-0.6-0.7 EUR/ZAR 8.8 4.4 3.4 1.3 - -0.2 EUR/THB 7.8 7.0 4.9-0.8 0.2-0.1 EUR/CLP 7.0 6.6 6.3 0.3 - -0.1 EUR/HKD (1) 6.2 1.4 EUR/SEK 6.0 4.3 4.3 0.6-0.1-0.1 EUR/NOK 5.9 4.7 4.6-0.1-0.2-0.1 EUR/INR 3.3 8.3 6.8-0.3 0.2 EUR/MXN 2.4 13.6 11.0 0.2-0.5 EUR/Other currencie 33.0 44.2 31.5 3.3-0.2-0.4 Sale of EUR againt foreign currencie EUR/SGD (1) 10.1 5.0-1.1-0.1 EUR/JPY 15.6 17.5-3.9 0.7 EUR/Other currencie 1.3 1.6-0.1 0.1 Purchae of USD againt foreign currencie USD/BRL 57.2 73.2 64.7 0.7-0.3 3.2 USD/INR 9.5 0.6 USD/RUB 8.3 8.7 9.6 1.8-0.7 0.1 USD/PHP 6.8 7.1 0.1-0.2 USD/ARS 9.8 39.0-0.9-0.3 USD/Other currencie 0.3 0.4 - - Sale of USD againt foreign currencie USD/CNY 22.9 28.4 32.3-0.6 0.6 - USD/IDR 9.6 1.4 8.3-0.9-0.1 Other currency pair JPY/CNY 6.7 11.0 12.7 - -1.3-0.1 PLN/RUB 6.9 - ARS/BRL 4.1 24.4 - -0.4-2.0 Other currencie 6.2 5.2 5.6 0.2 - -0.1 Currency future total 1 072.8 824.4 982.5 14.7-3.7-18.3 Currency option EUR/USD 102.5 43.4 48.5 3.8 3.2 1.1 EUR/CNY 62.9 33.1 33.4 2.6 2.0 0.8 EUR/RUB 58.6 4.0 EUR/BRL 54.6 29.3 22.3 7.1 2.9 1.6 EUR/CAD 10.6 6.0 4.9 0.8 0.4 0.1 EUR/IDR 8.7 5.3-1.3 0.6 - EUR/GBP 5.9 8.9 9.0-0.3 0.2 EUR/MXN 5.6 4.7 4.1 0.4 0.3 0.2 EUR/AUD 5.6 0.5 USD/BRL 31.6 17.7 2.9 1.1 Other currencie 10.2 6.7 10.6 0.7 0.4 0.5 Currency option total 356.8 155.1 132.8 24.1 11.2 4.5 Of which total option purchaed 356.8 155.1 132.8 24.1 11.2 4.5 TOTAL INSTRUMENTS 1,429.6 979.5 1,115.3 38.8 7.5-13.8 (1) The balance at the end of 2013 mainly include hedge of cah-collateral agreement in foreign currencie granted to the bank of the group (refer note 14). 182 REGISTRATION DOCUMENT / L ORÉAL 2013

PARENT COMPANYFINANCIAL STATEMENTS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS NOTE 23 Tranaction and balance with related entitie and partie Related-party data i a follow: million 12.31.2013 12.31.2012 12.31.2011 Financial aet 9,234.0 9,296.9 9,185.2 Trade account receivable/ 300.9 438.3 331.0 Other account receivable 18.5 21.2 2.4 Cah and cah equivalent 967.0 1,080.4 193.5 Borrowing - 287.2 114.3 Trade account payable 126.6 96.4 87.6 Other payable 4.6 n/ n/ Financial expene 8.2 1.4 0.6 Financial revenue 2,207.1 2,242.1 2,059.8 All material related-party tranaction were entered into on an arm length bai. NOTE 24 Off-balance heet commitment 24.1. Leae commitment 5 Operating leae commitment amount to 74.8 million due in le than one year, 195.5 million due between 1 and 5 year and 28.1 million due after 5 year. The breakdown of finance leae commitment i provided in note 13. 24.2. Other off-balance heet commitment Confirmed credit facilitie are et out in note 19. Other off-balance heet commitment can be broken down a follow: million 12.31.2013 12.31.2012 12.31.2011 Commitment granted in connection with employee retirement obligation and related benefit (1) 486.1 565.2 508.5 Commitment to buy out non-controlling interet 6.7 6.7 6.8 Guarantee given (2) 647.1 679.5 662.1 Guarantee received 10.3 10.1 10.1 Capital expenditure order 65.4 72.2 64.0 Documentary credit - 4.4 4.8 (1) The dicount rate ued to meaure thee commitment at December 31 t, 2013 wa 3.25% for plan providing for payment of capital and 3.50% for annuity plan, compared with repectively, 3% and 3.50% at end-2012, and 4.50% and 4.75% at end-2011. An agreement for the pooling of employee-related liabilitie wa et up in 2004. Puruant to thi agreement, commitment are allocated among the French companie in the Group and their financing i organied in proportion to their repective payroll cot (cutomied for each plan) o that the companie are joint and everally liable for meeting the aforementioned commitment within the limit of the collective fund built up. (2) Thi caption include micellaneou guarantee and warrantie, including 618.7 million at December 31 t, 2013 on behalf of direct and indirect ubidiarie ( 642.3 million at December 31 t, 2012 and 659.4 million at December 31 t, 2011). Seller warrantie are alo included in thi amount a appropriate. 24.3. Acquiition in progre On Augut 15 th, 2013, L Oréal and Magic Holding International Limited have announced L Oréal propoal to acquire all of the hare of Magic Holding International Limited, a company lited in the Hong Kong Stock Exchange. The propoed price i HK $6.30 per hare. L Oréal propoal i upported by Magic Board of Director. Six key hareholder, repreenting 62.3% of the company equity, are already committed to upporting L Oréal propoal. The tranaction ha been approved by the Minitry of Commerce of the People Republic of China (MOFCOM) in early January 2014. REGISTRATION DOCUMENT / L ORÉAL 2013 183

5 NOTES PARENT COMPANYFINANCIAL STATEMENTS TO THE PARENT COMPANY FINANCIAL STATEMENTS A pecialit in cometic facial mak, Magic turnover in 2012-2013 wa approximately 160 million euro. Facial mak are one of China beauty market fatet growing area with very promiing development propect. Magic MG brand i one of China leading brand in thi category. Thi note i not intended to and doe not contitute, or form part of, any offer to ell or ubcribe for or an invitation to purchae or ubcribe for any ecuritie or the olicitation of any vote or approval in any juridiction puruant to the above mentioned propoal or otherwie, nor hall there be any ale, iuance or tranfer of ecuritie of Magic Holding International Limited in any juridiction in contravention of applicable law. The propoal, if made, will be made olely through the Scheme Document, which will contain the full term and condition of the propoal, including detail of how to vote in favour of the propoal and any retriction applicable to the propoal. Any repone to the propoal, acceptance included, hould be made only on the bai of information in the Scheme Document or any other document by which the Propoal i made, a the cae may be. 24.4. Contingent liabilitie In the ordinary coure of it operation, L Oréal i involved in legal action and i ubject to tax aement, cutom control and adminitrative audit. The Company et aide a proviion wherever a rik i found to exit and the related cot can be reliably etimated. At the preent time, no exceptional event or dipute i highly likely to have a material impact on the earning, financial poition, aet or operation of the Company. NOTE 25 Change in working capital Change in working capital repreented a negative 17.9 million at December 31 t, 2013, compared to a negative 129.1 million at December 31 t, 2012 and a negative 60.7 million at December 31 t, 2011, and can be broken down a follow: million 12.31.2013 12.31.2012 12.31.2011 Inventorie -5.1 0.7 0.2 Receivable -72.2-173.6-93.0 Payable 59.4 43.8 32.1 TOTAL -17.9-129.1-60.7 NOTE 26 Change in other financial aet Thi caption include flow related to Treaury tock in the year, claified within marketable ecuritie, a well a flow related to cah collateral agreement granted to the bank of the group, claified within financial aet. NOTE 27 Cah and cah equivalent at the end of the year Cah and cah equivalent amount to 974.0 million at December 31 t, 2013 compared with 829.7 million at December 31 t, 2012 and 146.9 million at December 31 t, 2011, and can be broken down a follow: million 12.31.2013 12.31.2012 12.31.2011 Cah 974.7 1,093.1 238.4 Accrued interet receivable - - -0.2 Bank overdraft (note 19) -0.7-263.5-91.3 Accrued interet payable - 0.1 - TOTAL 974.0 829.7 146.9 184 REGISTRATION DOCUMENT / L ORÉAL 2013

PARENT COMPANYFINANCIAL STATEMENTS NOTES TO THE PARENT COMPANY FINANCIAL STATEMENTS NOTE 28 Other dicloure Statutory audit fee are not preented in the note to the parent company financial tatement, but in the note 30 to the Conolidated financial tatement. NOTE 29 Subequent event On October 17 th, 2013, L Oréal ha extended an offer to the Japanee Group Shieido for the acquiition of Decléor and Carita. Baed on thi offer, Shieido ha granted L Oréal excluive negotiation right. Decléor/Carita achieved a turnover of approximately 100 million in 2012 which rank the group a number two on the worldwide profeional kin care market in beauty intitute, pa and hair alon. Founded in 1974, Decléor i the world leading brand in aromatherapy. Created in 1945 by Maria & Roy Carita, known a hairdreer for tar, Carita incarnate the art of pretigiou French pampering. An agreement could be igned in the coming week. Netlé and L Oréal announced that their repective Board of Director, in meeting held on February 10 th, 2014, have approved by unanimou deciion of their voting member a trategic tranaction for both companie under which L Oréal will buy 48.5 million of it own hare (8% of it hare capital) from Netlé. Thi buyback will be financed: partially through the dipoal by L Oréal to Netlé of it 50% take in Swi dermatology pharmaceutical company Galderma (a 50/50 joint venture between L Oréal and Netlé) for an enterprie value of 3.1 billion ( 2.6 billion of equity value), paid by Netlé in L Oréal hare (21.2 million hare); for the remainder, correponding to 27.3 million L Oréal hare held by Netlé, in cah for an amount of 3.4 billion. The price per L Oréal hare retained for thi tranaction i the average of it cloing price between Monday November 11 th, 2013 and Monday February 10 th, 2014: 124.48. All the hare bought back by L Oréal will be cancelled. Following the tranaction, Netlé take in L Oréal will be reduced from 29.4% to 23.29% of the hare capital and the Bettencourt Meyer family take in L Oréal will increae from 30.6% to 33.31%. The tranaction i ubject to cutomary condition, including the prior conultation of Galderma and L Oréal work council and the clearance of relevant antitrut authoritie. It i expected to cloe before the end of the firt emeter of 2014. 5 REGISTRATION DOCUMENT / L ORÉAL 2013 185

5 TABLE PARENT COMPANYFINANCIAL STATEMENTS OF SUBSIDIARIES AND HOLDINGS AT DECEMBER 31ST, 2013 5.6. TABLE OF SUBSIDIARIES AND HOLDINGS AT DECEMBER 31 t, 2013 SUBSIDIARIES AND AFFILIATES AT DECEMBER 31 t, 2013 ( thouand) DETAILED INFORMATION Share capital Other equity % holding BOOK VALUE of invetment PROFIT OR LOSS in lat year DIVIDENDS (1) booked during the year A. Main french ubidiarie (H olding of over 50%) Areca & Cie 35 10 99.78 35 35-216 60 Banque de Réaliation de Getion et de Financement (Regefi) 19,250 109,142 99.99 75,670 75,670 26,669 Beauté Créateur 612 223 100.00 31,599 0-31,613 52 Beauté, Recherche & Indutrie 10,690-2,184 100.00 20,311 16,811 7,841 Centrex 1,800 29 99.99 3,532 3,532 353 671 Chimex 1,958 31,249 100.00 21,501 21,501 3,537 2,649 Cométique Active France 24 19,293 61.97 130 130 28,354 12,788 Cométique Active International 19 19,014 80.43 15 15-4,823 9,166 Cométique Active Production 186 17,656 80.13 5,081 5,081 9,506 3,655 EpiSkin 13,599 4,495 99.96 17,975 17,975 944 Excluive Signature International 10 0 99.00 10 10 4,384 3,114 Fapagau & Cie 15 4,968 79.00 12 12 5,749 3,705 Faprogi 15 4,271 59.90 9 9 4,159 1,260 Finval 2 0 99.00 2 2 4,424 6,886 Gemey Maybelline Garnier 50 676 66.61 34 34 38,362 26,378 Gemey Pari - Maybelline New York 35 5,793 99.96 46 46 17,802 15,661 Goldy International 15 0 99.90 15 15-5 H.B.D.F. 5 0 100.00 5 5 33 Helena Rubintein 30 1 99.95 46,661 46,661 5,234 4,488 Holdial 1 0 98.00 1 1 550 588 L & J Ré 1,500 8,736 99.99 1,500 1,500 1,149 La Roche-Poay Laboratoire Pharmaceutique 380 4,437 99.98 27,579 27,579 18,286 15,362 Laboratoire Innéov 475 370 50.00 30,875 845-6,983 Laboratoire Sanoflore 10 272 100.00 5,197 0 609 Lancôme Parfum & Beauté & Cie 1,192 0 99.99 3,235 3,235 56,433 61,311 LaScad 20 12,776 99.26 12,796 12,796 60,921 54,150 Lehoux et Jacque 39 56 100.00 263 263-364 258 L Oréal Produit de Luxe France 84 56,209 68.55 1,457 1,457 11,112 10,777 L Oréal Produit de Luxe International 98 75,253 77.36 76 76 35,900 31,572 Parfum Cacharel & Cie 1 1 99.00 2 2 404 404 Parfum Guy Laroche 332 54 100.00 1,656 1,656 51 145 Parfum Paloma Picao & Cie 2 0 99.00 2 2 16 32 Parfum Ralph Lauren 2-462 99.00 2 0 10 Pretige & Collection International 32 3,952 81.67 3,823 3,823 22,808 14,573 Roger & Gallet 3,034 10,390 100.00 109,693 109,693 660 665 Sicô & Cie 375 7,089 80.00 999 999 5,488 3,683 Société de Développement Artitique 2 0 99.00 2 2 49 Soproco 8,250 5,900 100.00 11,904 11,904 3,460 Soproréal 15 2,639 99.90 15 15 3,379 Sparly 750 90 100.00 3,826 3,826 540 1,876 Viktor & Rolf Parfum 2 0 99.00 1 1 493 296 YSL Beauté 130,786 11,276 89.80 299,622 299,622 25,786 B. Main french invetment (H olding of le than 50%) Galderma International 466 64,161 26.44 2 2 16,852 Innéov France 130-396 0.00 n/ n/ -732 La Roche-Poay Dermato-Cométique 2 0 1.00 0 0-2 Sanofi (2) 8.93 423,887 423,887 (2) 327,490 (1) The SNC (general patnerhip), and Société Civile (non trading companie), that are not tax conolidated, ditribute all their profit. (2) Sanofi : thi information i not availaible. At the end of 2013 L Oréal own 118,227,307 hare. The market value amount to 9,117,690 thouand euro on the bai of the cloing price. Gro Net 186 REGISTRATION DOCUMENT / L ORÉAL 2013

PARENT COMPANYFINANCIAL STATEMENTS TABLE OF SUBSIDIARIES AND HOLDINGS AT DECEMBER 31ST, 2013 Share capital Other equity % holding BOOK VALUE of invetment PROFIT OR LOSS in lat year DIVIDENDS (1) booked during the year A. Main foreign ubidiarie (H olding of over 50%) Avenamite S.A. (Spain) 0.00 0 0 51 Beautyco International Co. Ltd (China) 52,482 53,933 73.46 46,195 46,195 10,295 Beautylux International Cometic (Shanghai) Co. Ltd (China) 5,629-2,045 100.00 16,871 3,822 405 Biotherm (Monaco) 152 16 99.80 3,545 3,545 5,473 5,749 Canan Kozmetik Sanayi Ve Ticaret A.S. (Turkey) 6,451 13,764 100.00 30,290 30,290 7,222 Club de Créateur de Beauté (Belgium) 81-59 100.00 3,821 22 0 Comelor Ltd (Japan) 3,554 5,890 100.00 35,810 35,810 1,600 1,634 Comephil Holding Corporation (Philippine) 171-141 100.00 400 14 0 Egyptelor LLC (Egypt) 6 100 99.80 7 7 55 Elebelle (Proprietary) Ltd (South Africa) 806 27,015 100.00 61,123 46,783 4,316 4,195 Erwiton S.A. (Uruguay) 739 969 100.00 17 17 8,025 9,762 Galderma Pharma S.A. (Switzerland) 15,694 141,790 50.00 10,124 10,124 125,687 56,283 Komepol Sp. z.o.o. (Poland) 38,844 39,238 99.73 48,965 48,965 6,407 Lai Mei Cometic Int. Trading (Shanghai) Co Ltd (China) 9,500 4,300 100.00 11,197 11,197 470 741 L Oréal Adria d.o.o. (Croatia) 131 1,153 100.00 1,503 1,503 6,513 4,006 L Oréal Argentina SA (Argentina) 16,891 45,299 94.90 103,426 57,512 32,052 L Oréal Autralia Pty Ltd 2,711 17,230 100.00 33,867 33,867 39,298 37,655 L Oréal Balkan d.o.o. (Serbia) 1,283-402 100.00 1,285 1,285 1,182 700 L Oréal Baltic SIA (Latvia) 387 3,132 100.00 529 529 2,584 2,601 L Oréal Belgilux S.A. (Belgium) 16,124 18,192 98.93 77,150 77,150 26,489 15,645 L Oréal Bulgaria EOOD 102 704 100.00 102 102 2,469 2,336 L Oréal Canada Inc. 3,979 10,102 100.00 146,517 146,517 89,334 75,440 L Oréal Central America ( Panama) 8 6 100.00 8 8-165 L Oréal Central Wet Africa (Nigéria) 1,176-2,203 99.91 1,176 1,176-2,625 L Oréal Ceka Republika.r.o. (Czech Republic) 5,939 2,924 100.00 8,678 8,678 5,734 7,267 L Oréal Chile S.A. (Chile) 20,888 7,051 99.99 43,784 43,784 33,458 23,988 L Oréal China Co Ltd (China) 43,498 30,439 100.00 345,733 345,733 237,403 219,285 L Oréal Colombia S.A. (Colombia) 1,931 3,834 94.00 6,395 6,395-1,680 1,459 L Oréal Cometic Indutry S.A.E. (Egypt) 42,319-9,449 99.99 42,299 27,699-5,863 L Oréal Danmark A/S (Denemark) 270 5,406 100.00 8,336 8,336 11,328 10,516 L Oréal Deutchland Gmbh (Germany) 12,647 274,511 100.00 76,855 76,855 217,424 159,661 L Oréal Eat Africa Ltd (Kenya) 191-986 99.90 191 191-1,879 L Oréal Epana S.A. (Spain) 59,911 19,851 63.86 299,154 299,154 39,801 32,410 L Oréal Finland Oy (Finland) 673 17 100.00 1,280 1,280 12,431 11,849 L Oréal Guatemala S.A. 1,044 400 99.99 2,162 2,162 1,222 1,268 L Oréal Hella S.A. (Greece) 9,736 1,991 99.99 35,307 35,307 4,519 5,420 L Oréal Hong-Kong Ltd 3-2,439 99.97 604 604 74,004 149,840 L Oréal India Private Ltd (India) 49,919-12,068 100.00 68,467 47,285 5,405 L Oréal Invetment B.V. (Netherland) 18 0 100.00 18 18 0 L Oréal Irael Ltd 4,137 10,936 92.97 38,497 34,897 6,185 4,767 L Oréal Italia Spa 1,680 56,007 100.00 226,469 226,469 51,118 72,964 L Oréal Japan Ltd (Japan) 370-1,204 100.00 275 0-812 L Oréal Kazakhtan Llp (Kazakhtan) 422 612 100.00 422 422 9,158 8,895 L Oréal Korea Ltd (Korea) 1,991 376 99.99 20,794 20,794 4,764 15,872 L Oréal Liban SAL (Lebanon) 3,139 1,073 99.88 7,694 7,694 13,173 9,376 L Oréal Magyarorzag Kometikai Kft (Hungary) 428-72 100.00 787 787 2,472 2,991 L Oréal Malayia SDN BHD (Malayia) 3,268 93 100.00 6,762 6,762 11,497 11,503 L Oréal Mexico S.A. de C.V. (Mexico) 2,349 81,408 99.99 8,443 8,443 50,657 14,913 L Oréal Middle Eat (United Arab Emirate) 7,761 2,758 100.00 54,379 54,379 42,507 28,588 L Oréal Nederland B.V. (Netherland) 1,178-4 100.00 22,014 22,014 24,565 26,643 L Oréal New Zealand Ltd (New Zeland) 44 2,344 100.00 6,110 6,110 6,319 6,145 L Oréal Norge A/S (Norway) 1,384 2,404 100.00 4,050 4,050 17,447 17,801 L Oréal Oterreich Gmbh (Autria) 2,915 1,353 100.00 3,818 3,818 14,175 12,575 L Oréal Pakitan Private Ltd 11,025-10,438 99.99 11,043 43-2,462 L Oréal Panama S.A. 159 1,447 100.00 168 168 9,887 10,170 Gro Net 5 For foreign ubidiarie and invetment, the capital reerve and retained earning have benn tranlated into thanand of euro on the bai of year-end exchange rate, while profit and loe have been tranlared at average rate. It i pecified that the lit above i not exhautive. (1) The SNC (general patnerhip), and Société Civile (non trading companie), that are not tax conolidated, ditribute all their profit. REGISTRATION DOCUMENT / L ORÉAL 2013 187

5 OTHER PARENT COMPANYFINANCIAL STATEMENTS INFORMATION RELATING TO THE FINANCIAL STATEMENTS OF L ORÉAL PARENT COMPANY Share capital Other equity % holding Gro BOOK VALUE of invetment Net PROFIT OR LOSS in lat year DIVIDENDS (1) booked during the year L Oréal Peru S.A. (Peru) 2,096 214 99.99 3,739 3,739 960 1,835 L Oréal Philippine Inc. 11,811-13,953 99.45 22,226 26-3,523 L Oréal Polka Sp. z.o.o. (Poland) 405 757 100.00 707 707 25,605 20,133 L Oréal Portugal Lda 495 184 100.00 6,459 6,459 8,862 9,699 L Oréal Romania SRL (Romania) 2,187 426 100.00 5,883 5,883 4,605 2,719 L Oréal Saudi Arabia (Saudi Arabia) 5,682-483 74.63 4,260 4,260 761 37 L Oréal Singapore Pte Ltd (Singapore) 1,165 57 100.00 18,991 18,991 6,912 8,220 L Oréal Slovenija kometika d.o.o. (Slovenia) 465 384 100.00 856 856 626 1,024 L Oréal Slovenko.r.o. (Slovaquia) 1,598 790 100.00 1,673 1,673 3,130 4,974 L Oréal Suie S.A. (Switzerland) 346 2,157 100.00 160,311 160,311 32,445 34,969 L Oréal Sverige AB (Sweden) 2,038 379 100.00 2,247 2,247 23,837 12,255 L Oréal Taiwan Co Ltd (Taiwan) 187-82 100.00 17,881 17,881 22,512 22,377 L Oréal Thailand Ltd 3,992-1,053 99.99 5,238 5,238 19,596 18,619 L Oréal Turkiye Kozmetik Sanayi Ve Ticaret Anonim Sirketi 39,142-29,916 100.00 55,093 26,656 11,728 L Oréal UK Ltd (Great Britain) 121,150-107,937 99.99 145,573 145,573 117,622 72,490 L Oréal Ukraine 3,033 2,231 100.00 2,990 2,990 14,814 14,636 L Oréal Uruguay S.A. 485 2,891 100.00 5,435 5,435 4,604 L Oréal USA Inc. (3) 4,402 2,667,033 100.00 3,797,447 3,797,447 428,985 185,452 L Oréal Venezuela C.A. 12,765 11,071 100.00 26,953 13,667 13,701 L Oréal Vietnam Co Ltd 7,340-9,051 100.00 7,449 49-4,202 Marelor LLC (Egypt) 13,844-2,374 99.99 13,731 11,831-5 Nihon L Oréal KK (Japan) 138,845 69,843 100.00 415,182 396,441 24,492 Parbel of Florida Inc. (USA) 40-2,177 100.00 100,317 100,317 27,263 27,267 Procoa Producto de Beleza Ltda (Brail) 100,647 99,032 99.99 170,243 170,243 40,408 6,649 P.T. L Oréal Indoneia 1,510 5,817 99.00 2,305 2,305-8,175 P.T. Yaulor Indoneia 73,931-16,028 99.99 110,022 65,522 1,660 Scental Limited (Hong-Kong) 5 160 99.99 8 8 0 Sofamo (Monaco) 160-41,118 99.99 1,852 0-42 The Body Shop International PLC (Great Britain) (4) 13,597 898,471 100.00 992,445 992,445 67,346 46,831 Venprobel (Venezuela) 20-63 100.00 2,722 0 0 YSL Beauté Votok o.o.o. (Ruia) 3,062-2,588 99.98 5,519 619-303 B. Main foreign invetment (H olding of le than 50%) n/ n/ n/ n/ n/ n/ n/ For foreign ubidiarie and invetment, the capital reerve and retained earning have benn tranlated into thanand of euro on the bai of year-end exchange rate, while profit and loe have been tranlared at average rate. It i pecified that the lit above i not exhautive. (1) The SNC (general patnerhip), and Société Civile (non trading companie), that are not tax conolidated, ditribute all their profit. (2) Sanofi : thi information i not availaible. (3) Figure from the ub-conolidation of L Oréal USA Inc. (4) The Body Shop : Conolidated figure for the ub-group. GLOBAL INFORMATION RELATING TO SUBSIDIARIES AND INVESTMENTS Book value of hare held Subidiarie Other INVESTMENTS French Foreign French Foreign gro (after revaluation) 737,238 8,234,985 423,888 1 net 666,910 7,960,903 423,888 1 Amount of loan and advance granted 48,485 156,386 17,434 Amount of guarantee and ecurity granted 13,758 604,914 Amount of dividend booked 286,250 1,591,451 327,490 1 188 REGISTRATION DOCUMENT / L ORÉAL 2013

PARENT COMPANYFINANCIAL STATEMENTS OTHER INFORMATION RELATING TO THE FINANCIAL STATEMENTS OF L ORÉAL PARENT COMPANY 5.7. OTHER INFORMATION RELATING TO THE FINANCIAL STATEMENTS OF L ORÉAL PARENT COMPANY 5.7.1. Expene and charge falling under A rticle 223 quater of the French Tax Code It i tipulated that the total amount of expene and charge falling under Article 223 quater of the French Tax Code and the amount of tax applicable to uch expene and charge are a follow: Expene and charge Correponding tax amount 1.3 million 0.5 million 5.7.2. Trade account payable In accordance with the French Law on the Moderniation of the Economy of Augut 4 th, 2008 and the reulting Article L. 441-6-1 and D. 441-4 of the French Commercial Code, the breakdown of the balance of trade account payable by L Oréal parent company at year-end i a follow: million 2013 2012 2011 Trade account payable not yet due 197.5 191.6 171.8 including: at 30 day 116.9 122.1 97.8 between 30 day and 45 day 80.6 69.5 74.0 more than 45 day - - - Trade account payable due 14.5 10.5 6.3 5 5.7.3. Net ale (excluding taxe) million Net ale 2013 2012 Variation en % 1 t quarter 743.5 701.6 5.97 2 nd quarter 697.9 635.2 9.87 3 rd quarter 666.4 622.8 7.00 4 th quarter 669.2 647.2 3.39 TOTAL 2,777.0 2,606.8 6.52 N.B: Thee net ale figure include ale of good and finihed product, acceorie, wate and ervice, le reduction in repect of ale. Thee ale include, in particular, upplie of good to variou ubidiarie which are recorded a intercompany ale from a conolidated account tandpoint. REGISTRATION DOCUMENT / L ORÉAL 2013 189

5 FIVE-YEAR PARENT COMPANYFINANCIAL STATEMENTS FINANCIAL SUMMARY 5.8. FIVE-YEAR FINANCIAL SUMMARY L ORÉAL PARENT COMPANY (EXCLUDING SUBSIDIARIES) million (except for earning per hare, hown in euro) 2009 2010 2011 2012 2013 I. Financial poition at financial year-end a) Share capital 119.8 120.2 120.6 121.8 121.2 b) Number of hare 598,972,410 600,992,585 602,984,082 608,810,827 605,901,887 (1) c) Number of convertible bond 0 0 0 0 0 II. Overall reult of operation a) Net pre-tax ale 2,051.1 2,231.0 2,421.1 2,606.8 2,777.0 b) Pre-tax profit before depreciation, amortiation, proviion and reveral of proviion (including proviion for invetment and Profit Sharing reerve) 1,766.3 2,048.4 2,344.8 2,517.5 2,562.0 c) Income tax -114.9-104.6-51.3 11.4-9.7 d) Net profit 1,841.8 1,995.3 2,169.8 2,408.0 2,366.1 e) Amount of ditributed profit 898.9 1,082.5 1,212.4 1,397.4 1,523. 3 (2) III. Reult of operation per hare a) Profit after tax and Profit Sharing, but before depreciation, amortiation and proviion 3.11 3.55 3.94 4.09 4.22 b) Net profit 3.07 3.32 3.60 3.96 3.91 c) Dividend paid on each hare (not including tax credit) 1.50 1.80 2.00 2.30 2.50 (2) IV. Peronnel a) Number of employee 5,855 5,957 6,016 6,097 6,163 b) Total alarie 403.8 426.7 459.0 489.5 515.6 c) Amount paid for welfare benefit (ocial ecurity, provident cheme, etc.) 172.8 182.5 200.4 208.6 261.3 (1) At December 31 t 2013, t he hare capital comprie 605,901,887 hare with a par value of 0.2, following the ubcription of 5,961,501 hare following the exercie of option and 238,200 of free hare, a well a cancellation of 9,108,641 treaury hare. (2) The dividend will be propoed to the Annual General Meeting of April 17 th, 2014. 190 REGISTRATION DOCUMENT / L ORÉAL 2013

PARENT COMPANYFINANCIAL STATEMENTS INVESTMENTS (MAIN CHANGES INCLUDING SHAREHOLDING THRESHOLD CHANGES) 5.9. INVESTMENTS (MAIN CHANGES INCLUDING SHAREHOLDING THRESHOLD CHANGES) INVESTMENTS (main change including hareholding threhold change > 5%) Situation at 12.31.2012 Dipoal Situation at ( thouand) Including revaluation Acquiition Subcription Reduction 12.31.2013 Heading Amount % Amount % Amount % Amount % Amount % Avenamite S.A. 6,215.6 100.00 6,215.6 100.00 (2) 0.0 L oréal Venezuela C.A 16,970.4 100.00 9,982.9 100.00 26,953.3 100.00 L Oréal Argentina S.A. 81,068.5 100.00 22,357.7 82.03 103,426.2 94.90 EpiS kin 9,401.5 100.00 8,573.8 100.00 0.0 0.04 (3) 17,975.3 99.96 Lacad 18.1 99.17 12,778.0 0.09 12,796.1 99.26 Cometique Active Ireland LTD 731.6 99.99 731.6 99.99 (2) 0.0 YSL Beaute Hong-Kong LTD 6,405.0 100.00 6,405.0 100.00 (2) 0.0 YSL Beaute Singapore PTE LTD 336.2 100.00 336.2 100.00 (2) 0.0 L Oreal Central America 7.6 100.00 7.6 100.00 Hygiène Beauté Ditribution France 5.0 100.00 5.0 100.00 Cadum International S.A. 170,520.2 100.00 170,520.2 100.00 (1) 0.0 0.00 Laboratoire Inneov 25,750.0 50.00 5,125.0 50.00 30,875.0 50.00 317,417.1 12.6 58,817.4 184,208.6 192,038.5 (1) Complete tranfer of aet and liabilitie. (2) Liquidation. (3) Merger with EpiS kin Bio materiaux and SkinE thic leading to a capital increae a a remuneration of hare held by SkinE thic minority hareholder. 5 REGISTRATION DOCUMENT / L ORÉAL 2013 191

5 STATUTORY PARENT COMPANYFINANCIAL STATEMENTS AUDITORS REPORT ON THE FINANCIAL STATEMENTS 5.10. STATUTORY AUDITORS REPORT ON THE FINANCIAL STATEMENTS (Year ended December 31 t, 2013) Thi i a free tranlation into Englih of the Statutory Auditor report iued in French and i provided olely for the convenience of Englih peaking reader. The Statutory Auditor report include information pecifically required by French law in uch report, whether modified or not. Thi information i preented below the opinion on the financial tatement and include an explanatory paragraph dicuing the Auditor aement of certain ignificant accounting and auditing matter. Thee aement were conidered for the purpoe of iuing an audit opinion on the financial tatement taken a a whole and not to provide eparate aurance on individual account caption or on information taken outide of the financial tatement. Thi report alo include information relating to the pecific verification of information given in the Management Report. Thi report hould be read in conjunction with, and contrued in accordance with, French law and profeional auditing tandard applicable in France. In compliance with the aignment entruted to u by your Annual General Meeting, we hereby report to you, for the year ended December 31 t, 2013, on: the audit of the accompanying financial tatement of L Oréal; the jutification of our aement; the pecific verification and information required by law. Thee financial tatement have been approved by the Board of Director. Our role i to expre an opinion on thee financial tatement baed on our audit. I. Opinion on the financial tatement We conducted our audit in accordance with profeional tandard applicable in France. Thoe tandard require that we plan and perform the audit to obtain reaonable aurance about whether the financial tatement are free of material mitatement. An audit involve performing procedure, uing ampling technique or other method of election, to obtain audit evidence about the amount and dicloure in the financial tatement. An audit alo include evaluating the appropriatene of accounting policie ued and the reaonablene of accounting etimate made, a well a the overall preentation of the financial tatement. We believe that the audit evidence we have obtained i ufficient and appropriate to provide a bai for our audit opinion. In our opinion, the financial tatement give a true and fair view of the aet and liabilitie and of the financial poition of the Company at December 31 t, 2013, and of the reult of it operation for the year then ended in accordance with French accounting principle. II. Jutification of our aement In accordance with the requirement of article L.823-9 of the French Commercial Code (Code de commerce) relating to the jutification of our aement, we bring to your attention the following matter: Invetment have been valued in accordance with the accounting method decribed in Note 1.7.1 Accounting policie Financial Aet Invetment and advance to the Company financial tatement. A part of our audit, we reviewed whether thee accounting method were appropriate and evaluated the aumption ued. Thee aement were made a part of our audit of the financial tatement taken a a whole, and therefore contributed to the opinion we formed which i expreed in the firt part of thi report. 192 REGISTRATION DOCUMENT / L ORÉAL 2013

PARENT COMPANYFINANCIAL STATEMENTS STATUTORY AUDITORS REPORT ON THE FINANCIAL STATEMENTS III. Specific verification and information In accordance with profeional tandard applicable in France, we have alo performed the pecific verification required by law. We have no matter to report a to the fair preentation and the conitency with the financial tatement of the information given in the Management Report of the Board of Director and in the document addreed to the hareholder with repect to the financial poition and the financial tatement. Concerning the information given in accordance with the requirement of article L. 225-102-1 of the French Commercial Code relating to remuneration and benefit received by corporate officer and any other commitment made in their favor, we have verified it conitency with the financial tatement, or with the underlying information ued to prepare thee financial tatement and, where applicable, with the information obtained by your Company from companie controlling it or controlled by it. Baed on thi work, we attet to the accuracy and fair preentation of thi information. In accordance with French law, we have verified that the required information concerning the purchae of invetment and controlling interet and the identity of hareholder and holder of the voting right ha been properly dicloed in the Management Report. Neuilly-ur-Seine, February 14 th, 2014 The Statutory Auditor PricewaterhoueCooper Audit Gérard Morin Deloitte & Aocié David Dupont-Noel 5 REGISTRATION DOCUMENT / L ORÉAL 2013 193

194 REGISTRATION DOCUMENT / L ORÉAL 2013

6 CORPORATE SOCIAL, ENVIRONMENTAL AND SOCIETAL RESPONSIBILITY * 6.1. HIGHLIGHT FOR 2013 197 6.2. SOCIAL INFORMATION 198 6.2.1. The L Oréal Group Human Reource policy 198 6.2.2. Social information with regard to the conolidated cope of the L Oréal Group 199 Methodological note 211 6.3. ENVIRONMENTAL INFORMATION 212 6.3.1. General environmental policy 213 6.3.2. Pollution and wate management 214 6.3.3. Sutainable ue of reource 216 6.3.4. Contribution to adapting to and combating global warming 218 6.3.5. Protection of biodiverity 219 Methodological note 220 6.4. SOCIETAL INFORMATION 221 6.4.1. Territorial, economic and ocial impact of activitie 221 6.4.2. Relation with takeholder 222 6.4.3. Subcontracting with upplier 224 6.4.4. Fair Buine practice 226 6.4.5. Other action taken in favour of Human Right 228 Methodological note 229 6.5. TABLE OF CONCORDANCE WITH THE REPORTING STANDARDS WITH REGARD TO SOCIAL, ENVIRONMENTAL AND SOCIETAL MATTERS 230 6.6. REPORT BY THE STATUTORY AUDITORS, DESIGNATED AS INDEPENDENT THIRD PARTIES, ON THE CONSOLIDATED SOCIAL, ENVIRONMENTAL AND SOCIETAL INFORMATION INCLUDED IN THE MANAGEMENT REPORT 232 1. Attetation of completene of the CSR information 232 2. Form of conduction on the fair preentation of the CSR information 233 * Thi information form an integral part of the Annual Financial Report a provided for in article L. 451-1-2 of the French Monetary and Financial Code. REGISTRATION DOCUMENT / L ORÉAL 2013 195

6 CORPORATE SOCIAL, ENVIRONMENTAL AND SOCIETAL RESPONSIBILITY The Group preented on October 23 rd, 2013 it commitment with regard to Sutainable Development by 2020 through the Sharing beauty with all program (hereinafter the Commitment for 2020 or Sharing beauty with all ). Thi public announcement tetifie to L Oréal ambition, and the trong commitment of it management and all it team to building and enuring utainable growth. Ten year ago, the Group igned the United Nation Global Compact and ha ince been committed to upporting the ten fundamental principle of the global Compact within it phere of influence. The Group ha reolutely engaged in tep to make progre in the field of Sutainable Development and CSR by etting, in particular a from 2009, an ambitiou objective of reducing the environmental footprint of it production ite and plant. In 2007, the creation of the L Oréal Foundation moreover howed it commitment to corporate philanthropy and patronage. L Oréal therefore now ha a olid Sutainable Development legacy and may therefore et itelf big ambition for the future with commitment integrated into it growth model. The Sharing beauty with all program concern all the Group environmental, ocial and ocietal impact and cover four area: Innovating utainably; Producing utainably; Conuming utainably; Sharing growth. The Group decribe each year the progre made and it achievement in the variou area concerned (Human Right, labour tandard, environmental tandard and anti-corruption meaure), namely through it Sutainable Development Report, the Global Reporting Initiative (GRI) indicator and thoe of the United Nation Global Compact. In 2013, the effort and progre made were recognied and rewarded a in previou year by the mot demanding organiation in thi field: Vigeo, Ethiphere Intitute, Carbon Dicloure Project which ranked L Oréal in 2013 among the 10% bet rated companie, OEKOM. In order to contantly improve the Group tranparency with regard to it action in thi area, L Oréal ha conolidated in thi chapter the information provided for by the French Decree of April 24 th, 2012, namely example of the Group achievement in the ocial, environmental and ocietal field in variou countrie, and a table of concordance putting into perpective the variou publihed indicator (GRI, information under Grenelle II, principle of the Global Compact). Thi table of concordance i et out on page 230 and 231. The reporting cope and the methodology are detailed in the methodological note placed at the end of each ection of thi chapter. L Oréal Statutory Auditor et out on page 232 to 234 their attetation with regard to their preence regarding the conolidated ocial, environmental and ocietal information in thi chapter puruant to the proviion of Article L. 225-102-1 of the French Commercial Code a well a their ubtantiated opinion on the fairne of thi information. 196 REGISTRATION DOCUMENT / L ORÉAL 2013

CORPORATE SOCIAL, ENVIRONMENTAL AND SOCIETAL RESPONSIBILITY HIGHLIGHT FOR 2013 6.1. HIGHLIGHT FOR 2013 The L Oréal Group Sutainable Development commitment for 2020: Sharing b eauty with a ll The new formula ue utainably ourced renewable raw material or raw material derived from Green chemitry. The new packaging ha an improved environmental profile. On October 23 rd, 2013, Jean-Paul Agon, Chairman and Chief Executive Officer of L Oréal, announced the commitment that L Oréal ha et itelf by 2020 to reduce it impact while achieving it growth ambition. Sutainability at the ervice of growth L Oréal ambition i to reach one billion new conumer through it univeraliation trategy which aim to repond to the different beauty need of men and women all over the world. The Group growth trategy i partly baed on it commitment to produce more, with le impact, and to involve conumer, who are at the heart of it buine activitie, by offering them product which are both utainable and apirational, thu inciting them to make utainable choice. For thi purpoe, L Oréal ha undertaken to improve it practice throughout it value chain, from reearch to production, while haring it growth with the urrounding communitie. Thee commitment are the fruit of two year of conultation with variou takeholder throughout the world. L Oréal will regularly communicate on it progre with regard to each of the objective with the aitance of a panel of independent international expert (1), chaired by Joé Maria Figuere, recognied throughout the world for hi commitment to Sutainable Development. The new product ha a poitive ocial impact. 2. PRODUCING SUSTAINABLY BY 2020, THE GROUP COMMITS TO REDUCING ITS ENVIRONMENTAL FOOTPRINT BY 60% WHILST BRINGING BEAUTY TO ONE BILLION NEW CONSUMERS A 60% reduction of CO 2 emiion at our plant and ditribution centre in abolute term, from a 2005 baeline. A 60% reduction in water conumption per finihed product unit from a 2005 baeline. A 60% reduction in wate generation per finihed product unit from a 2005 baeline. Sending zero indutrial wate to landfill. Reducing the CO 2 emiion from tranportation of product by 20% per finihed product/km from a 2011 baeline. 3. CONSUMING SUSTAINABLY BY 2020, THE GROUP WANTS TO EMPOWER ALL L ORÉAL CONSUMERS TO MAKE SUSTAINABLE CONSUMPTION CHOICES A product aement tool will evaluate the environmental and ocial profile of all new product. All brand will make thi information available to allow conumer to make utainable lifetyle choice. 6 Sharing beauty with all : a commitment which cover four area 1. INNOVATING SUSTAINABLY BY 2020, 100% OF OUR PRODUCTS WILL HAVE AN ENVIRONMENTAL OR SOCIAL BENEFIT All L Oréal brand will have aeed their environmental and ocial footprint and will have made commitment to improve it. Every brand will report on it progre and raie awarene among conumer about utainable lifetyle choice. Conumer will be able to influence the Group utainability action through a conumer conultative group on utainability. Whenever the Group brand invent or renovate a product, they will improve it environmental or ocial profile in term of at leat one of the following criteria: The new formula reduce it environmental footprint (and in particular it Water Footprint). 4. SHARING GROWTH a) Employee: by 2020, L Oréal employee will have acce to healthcare, ocial protection and training, wherever they are in the world. (1) The panel of international expert: Sze Ping, Chinee environmentalit, former Greenpeace activit, Executive Director of Greenovation Hub; Mehjabeen Abidi-Habib, Pakitani reearcher in human ecology, pecialit of natural reource management; HRH Celenhle Dlamini, South African, one of the Director of Ubuntu Intitute working on the achievement of the UN Millenium Development; Zem Joaquin, American, eco-luxury pecialit and founder of the Eco-fabulou webite, aiming to make utainability deirable; Analia Balare, American, Founder and CEO of WomenphereTM, developing medial tool, online communitie, and an award to inpire and upport women willing to make a difference in the world; Chritian de Boiredon, French, promoting the concept of impact journalim through Sparknew, in order to give viibility to poitive initiative throughout the world. REGISTRATION DOCUMENT / L ORÉAL 2013 197

6 SOCIAL CORPORATE SOCIAL, ENVIRONMENTAL AND SOCIETAL RESPONSIBILITY INFORMATION Employee will benefit from health coverage which i aligned with the bet practice of the country they are baed in. 20% of trategic upplier will be aociated with the Solidarity ourcing programme preented in 2012. Employee will receive financial protection in the event of unexpected life event, uch a incapacity or permanent diability. c) Communitie: by 2020, through it action, the Group will enable more than 100,000 people from ocially or financially deprived communitie to acce work. Employee will have acce to a training eion per year, wherever they are in the world. b) Supplier: by 2020, 100% of the Group trategic upplier will be participating in the upplier utainability programme. All trategic upplier will be evaluated and elected on ocial and environmental performance. All upplier will have completed a elf-aement of their utainability policy with our upport. All upplier will have acce to L Oréal training tool, in order to improve their utainability policie. Thi goal can be achieved through the following programme: Solidarity ourcing ; Incluive ditribution; P rofeionalization of beauty-related job; Mentoring and community education; Employment of diabled people and under-repreented ocio-ethnic group. 6.2. SOCIAL INFORMATION 6.2.1. The L Oréal Group Human Reource policy L Oréal ha built it human and ocial project around two prioritie: individual performance and ocial performance, two key factor in the ucce of the world leader in beauty. While accelerating the recruitment and development of talent all over the world, in order to enure utainable growth, L Oréal i keen to offer all it employee an environment in which everyone can reveal their talent, improve and thrive and where they all feel that their contribution are recognied and that they receive upport. Thu, L Oréal Human Reource policy i founded on: A viion focuing on performance and individual talent. L Oréal ha alway put the human dimenion at the centre of the Company by projecting a long-term viion for it talent. The miion of the Human Reource Department i currently to develop the talent of every employee and prepare tomorrow leader, by favouring, in particular, the emergence of local talent, to upport the Group ambition to win a billion new conumer. Ongoing recruitment of talented individual. The Group contantly trive to enhance it pool of talent, in all countrie. Recognied a one of the mot attractive companie in the world for young graduate and one of the companie that provide the mot training with regard to leaderhip, the Group conduct a diverified recruitment policy, which i baed both on partnerhip with the bet educational intitution in the world and the ue of corporate gaming attracting ten of thouand of tudent from all over the world and a proactive trategy of looking for candidate via digital technologie. L Oréal alo develop it own election method to recruit the bet talent and thoe which bet repreent the diverity of it conumer from among the million pontaneou application received every year. The ambition of putting each employee in a poition to develop their career. Individual performance monitoring and a large number of career development opportunitie and training programme that are acceible to everyone are aimed at allowing each and every employee to develop. The programme may be rolled out throughout the world, thank to the international location of training tructure and the ue of digital technologie with the My learning portal which offer all employee opportunitie for online training. The large-cale mobility between job and between countrie and the many individual promotion made each year attet to the vitality of career management. Thi management i baed on a network of human reource profeional, who are both in tune with employee expectation and aware of the requirement of our buine. The cloe cooperation between thee human 198 REGISTRATION DOCUMENT / L ORÉAL 2013

CORPORATE SOCIAL, ENVIRONMENTAL AND SOCIETAL RESPONSIBILITY SOCIAL INFORMATION reource profeional and the operational manager make it poible to have a two-way perpective with regard to talent and to define the mot uitable development opportunitie for each of them. Offering a protective and fulfilling working environment. L Oréal pay particular attention to the level of it ocial performance. The Group ha et itelf the target of promoting it value by creating a pleaant and conducive working environment, marked by olidarity and repect, and where all employee can fulfil peronal development with: need of each and every one of our employee and encourage their commitment, will make L Oréal one of the companie with the bet practice in term of ocial performance and wellbeing at work. The L Oréal Share & Care program fall within the cope of the commitment made by the Group by 2020 in the area of Sutainable Development and ocial reponibility, under it Sharing b eauty with a ll programme. The launch of thi programme and it implementation how the trong conviction that ocial performance and economic performance are not only intimately linked but alo provide each other with mutual trength. The deire to recognie the effective contribution made by everyone through a dynamic remuneration policy and hort-, medium- and long-term global incentive ytem. A regular evaluation of the expectation of employee throughout the world through large-cale opinion poll leading to the implementation of action plan. The earch for a work environment and working condition that will help everyone to achieve peronal atifaction. An active dialogue between management and employee and their repreentative at worldwide level. An active policy with regard to diverity a a factor of progre, innovation and creation of a ocial relationhip with three global prioritie of gender, ocial origin and diabilitie. In 2013, the Group choe to go one tep further with regard to ocial performance with the launch of the L Oréal Share & Care program, an ambitiou programme aimed at offering all the Group employee, in all the countrie in which it i located, a et of guaranteed global ocial meaure in four area: ocial protection, healthcare, parenthood and quality of life at work. Thi programme, which will make it poible to addre the eential 6.2.2. Social information with regard to the conolidated cope of the L Oréal Group The workforce indicated in the Total workforce and Geographic ditribution of workforce chart i the total workforce preent in the Group at December 31 t, 2013 (1). For Galderma and Innéov that are proportionally conolidated, the workforce at December 31 t, 2013 i recorded on a prorated bai according to the take held by L Oréal, i.e. 50%. All the other ocial indicator et out in thi chapter relate to Cometic and The Body Shop (2). If an indicator relate to a cope different from that of the Cometic and The Body Shop branche, the cope of conolidation i indicated in a note. 6 (1) Including employee with a permanent or fixed-term contract of employment. (2) Innéov i included, Galderma (dermatology) i excluded. REGISTRATION DOCUMENT / L ORÉAL 2013 199

6 SOCIAL CORPORATE SOCIAL, ENVIRONMENTAL AND SOCIETAL RESPONSIBILITY INFORMATION 6.2.2.1. EMPLOYMENT Total workforce and ditribution of employee by geographic zone, by gender and by age In 2013, L Oréal had 77,452 employee. AVERAGE AGE BY GEOGRAPHIC ZONE 40 year 38 year DISTRIBUTION OF WORKFORCE BY GEOGRAPHIC ZONE 31,794 15,497 30,161 2013 77,452 36 year 34 year 32 year 2012 30,798 16,180 25,659 72,637 30 year Wetern Europe North America New Market 2012 2013 2011 30,156 15,195 23,536 68,886 Wetern Europe North America New Market Recruitment and departure (1) The number of employee hired on permanent contract in 2013 i 11,949. DISTRIBUTION BY GENDER AT 12.31.2013 Wetern Europe North America New Market Total 33% 28% 34% 67% 72% 66% 33% 67% Men Women BREAKDOWN BY AGE AT 12.31.2013 Wetern Europe North America New Market 26.05% 33.31% 33.55% 29.51% 24.55% 43.69% 26.46% 21.04% 17.98% 21.10% 17.25% 5.51% < 30 year 30-40 year 40-50 year > 50 year L Oréal doe not have any problem in recruiting either executive or other categorie of taff. L Oréal i puruing it active recruitment policy for all it buinee and all categorie of taff in the Company. L Oréal aim i to create a durable relationhip with it employee in order to enable each and every one of them to develop their potential and to build long-term growth together, become more competitive, and continue geographic expanion and the promotion of innovation. The number of departure (on the Company initiative) in 2013 i 2,576. To achieve the objective of utainable growth which i the bet guarantee it can offer it employee, L Oréal ha to continually adapt to it environment. Thi may lead to retructuring, particularly in light of the current difficult economic climate. Neverthele, any deciion that may affect the working life and job of employee i made after in-depth conideration and i the ubject of clear, regular communication with regard to employee and an ongoing dialogue with the employee themelve and their repreentative, in accordance with L Oréal value of integrity and tranparency. Remuneration and trend L Oréal remuneration policy i ineparable from the general objective of Human Reource policy and accompanie the Group development trategy defined by the General Management. The principle of thi policy i to reward all it employee everywhere in the world fairly by recogniing the individual contribution made by each of them and by propoing diverified remuneration intended to fulfil the different expectation of it employee. It purpoe i to reward the commitment made by each of them and encourage individual and collective performance. For thi purpoe, it i baed on an annual performance aement ytem (1) Cometic cope excluding The Body Shop. 200 REGISTRATION DOCUMENT / L ORÉAL 2013

CORPORATE SOCIAL, ENVIRONMENTAL AND SOCIETAL RESPONSIBILITY SOCIAL INFORMATION (MAP) for employee applied in all the Group ubidiarie. Thi performance aement ytem make it poible to revie the variou fixed and variable component of remuneration regularly depending on the poition held, the kill ued, the performance and the potential of each and every employee. It alo make it poible to communicate clearly and tranparently on the rule for determining remuneration, the proce and the deciion made. In mot countrie, the minimum alarie paid are much higher than the tatutory minimum wage (at a national or regional level or according to the collective bargaining agreement). A L Oréal want to be one of the mot attractive companie wherever it ha ubidiarie, urvey aimed at poitioning remuneration a compared to the market are conducted by pecialit firm every year. Furthermore, internal opinion poll, carried out periodically, make it poible in particular to evaluate the perception and expectation of employee with regard to remuneration and adapt the Group action plan accordingly. Finally, L Oréal wihe to aociate it employee collectively with the Group reult through global incentive profit haring ytem and thu trike a balance between ocial performance and economic performance. PERSONNEL COSTS (INCLUDING PAYROLL COSTS) ( million) 2011 2012 2013 TOTAL 3,832.1 4,227.9 4,390.3 The comparion between the three year take into account the foreign exchange impact and i not repreentative of the real evolution in peronnel cot. Profit Sharing, Incentive and Mandatory Profit Sharing cheme For many year, L Oréal policy ha been to aociate employee with the reult of the Company aimed at making employee feel that they are part of the Company and enhancing their motivation. Thi led to a reditribution of 236 million in 2013 at the cale of the Group, on the bai of the income for 2012. L Oréal ha implemented a Worldwide Profit Sharing Program WPS ince 2001 in all the Group ubidiarie in which the employee PROFIT SHARING, INCENTIVE AND MANDATORY PROFIT SHARING SCHEMES do not benefit from profit haring arrangement provided for by law. Thi programme i not applied in the countrie which already have a imilar ytem provided for by law, particularly France (ee box below). The amount paid are calculated locally on the bai of ale and profit generated by each ubidiary a compared to budgeted target. Implementation of the programme take place locally and compliance with the principle and rule of the programme i coordinated, at Corporate level, by the International Labour Relation Department. ( million) 2011 2012 2013 TOTAL 204 210 236 6 The comparion between the three year take into account foreign exchange impact and tructural change. FRANCE A mandatory employee profit cheme wa et up in 1968 and an incentive profit haring cheme ha been in force ince 1988. Incentive profit haring i a ytem provided for by law but i of a non-mandatory nature. Renegotiated every 3 year, it wa the ubject of a new Group agreement in 2012. The incentive amount i proportional to the pre-tax profit on ordinary operation after exceptional item and weighted on the bai of the alary/value added ratio. The incentive amount i available immediately, but may alo be frozen in the Company aving plan for 5 year and benefit from a correponding tax exemption. * On a full-time bai, for 12 month preence in 2012. Within the framework of the regulation on haring profit (Article 1 of French Law No. 2011-894 of July 28 th, 2011), L Oréal propoed the payment in 2013 of a gro additional incentive amount of 1,000 per employee in repect of the nonmandatory monetary benefit provided for by the legilation. L Oréal choe to propoe the payment of an additional incentive amount a it correpond to the ytem which i the cloet to the notion of value haring. Company-level agreement providing for the payment of an additional incentive amount of 1,000 gro * were thu entered into with the Work Council of L Oréal and it ubidiarie in France. It wa paid on September 30 th, 2013. The total net amount of incentive allocated in 2013 i 117.5 million, plu the additional incentive payment to hare in profit for 2013 of 12.3 million. REGISTRATION DOCUMENT / L ORÉAL 2013 201

6 SOCIAL CORPORATE SOCIAL, ENVIRONMENTAL AND SOCIETAL RESPONSIBILITY INFORMATION CHANGES IN GROSS INCENTIVE AMOUNT ( million) 2010 (1) (2) 2011 (1) (2) 2012 (1) Paid the following year. (2) Amount after the forfait ocial levy. (1) (2) 106.9 112.6 117.5 For an annual gro alary of The gro Incentive amount for 2012 paid in 2013 repreented Additional Incentive payment to hare in profit for 2013 25,000 6,450 i.e. 3.1 month 1,000 7,450 35,000 7,559 i.e. 2.6 month 1,000 8,559 45,000 8,668 i.e. 2.3 month 1,000 9,668 65,000 10,886 i.e. 2.0 month 1,000 11,886 Total Mandatory employee profit haring i a compulory ytem in France, introduced in 1968, for all profit-making companie with over 50 employee. Signed for a term of 3 year, the mandatory profit haring agreement wa renewed in May 2012. Within the framework of thi Group agreement, which pool the reult of all the companie that are ignatorie, L Oréal ha made favourable adjutment to the legal formula to take account of the Group international development. Mandatory profit haring i available immediately but may be frozen for 5 year in the Company aving plan or the frozen current account, or inveted until retirement in the collective retirement aving plan (PERCO) on which an additional employer contribution i paid equal to +50%, which allow employee to benefit from a tax exemption. CHANGES IN GROSS MANDATORY EMPLOYEE PROFIT SHARING ( million) 2010 (1) (2) 2011 (1) (2) 2012 (1) Paid the following year. (2) Amount after the forfait ocial levy. (1) (2) 34.3 32.8 31.5 Mandatory profit haring for 2012 paid in 2013 repreented the equivalent of 0.6 month alary. For employee who o wih, the amount paid in repect of incentive and mandatory profit haring may be inveted for a minimum period of 5 year in the Company aving plan which propoe, in particular, an employee invetment fund inveted in L Oréal Share, on which an additional employer contribution of 25% i paid for incentive profit haring payment. The employer contribution added to thee payment were repectively 10,735,991 and 1,032,156, which, at the opening trading price for the L Oréal hare on the date of each of thee additional employer contribution, namely 135.35 on April 30 th, 2013 for L Oréal Intéreement and 126.95 on September 30 th, 2013 for the Supplément d Intéreement, repreented the equivalent of 87,450 L Oréal hare. In 2013, the following amount net of CSG, CRDS and the forfait ocial levy wa inveted by the employee of L Oréal and it ubidiarie in France in the fund which i 100% compoed of L Oréal hare, L Oréal Intéreement : 51,762,937, plu the net additional incentive amount to hare in profit for 2013 of 5,009,533. COMPANY SAVINGS PLAN AND FROZEN CURRENT ACCOUNT Outtanding balance for all the companie concerned in France: ( million) 2011 2012 2013 Company aving plan + Frozen current account + collective retirement aving plan 720 863 985 At December 31 t, 2013, 52% of the aving of L Oréal employee were inveted in L Oréal hare, and 9,974 Group employee in France were hareholder of L Oréal through the aving plan. 202 REGISTRATION DOCUMENT / L ORÉAL 2013

CORPORATE SOCIAL, ENVIRONMENTAL AND SOCIETAL RESPONSIBILITY SOCIAL INFORMATION Long-term Incentive Plan At worldwide level, in addition to the mandatory profit haring, incentive profit haring or Worldwide Profit Sharing programme for it employee, the Group ha for everal year granted tock option plan and made conditional grant of hare (ACA) in an international context, in order to aociate thoe who have made big contribution with the future evolution of the Group reult and help to intil a Group pirit. In 2009, L Oréal enlarged it policy by introducing a mechanim for the conditional grant of hare (ACA), in order to reach out to a broader population of potential beneficiarie thank to a longterm incentive tool offering greater motivation than tock-option. The final veting of thee hare i conditional on the achievement of performance criteria. In 2013, the Group continued it policy for conditional grant of hare: 2,092 employee were thu beneficiarie of the April 26 th, 2013 Plan (2,177 in 2012); 61% of the beneficiarie are outide France (62% in 2012); 46% of the beneficiarie are women (45% in 2012). In total, more than 3,000 employee, i.e. over 12% of the manager worldwide, benefit from at leat one tock option plan or plan for the conditional grant of hare (ee chapter 7, ection 7.4. page 245 ). Employee Benefit and penion cheme and other benefit Depending on the legilation and practice in each country, L Oréal adhere to penion cheme, pre-retirement arrangement and Employee Benefit cheme offering a variety of additional coverage for it employee. In 2002, L Oréal et up a Superviory Committee for penion and Employee Benefit cheme offered by it ubidiarie. Thi committee enure the implementation and the monitoring of L Oréal penion and Employee Benefit policy a defined by the L Oréal Executive Committee. Thi policy provide for general principle in the following area: definition and implementation of cheme, relation with employee, financing and cot of the cheme, and management of the cheme. Approval mut firt be obtained from the Superviory Committee prior to the introduction of any new cheme or the modification of any exiting cheme. The Superviory Committee work together cloely with the operational management of the Diviion and Zone. The characteritic of the penion cheme and other preretirement benefit offered by the ubidiarie outide France vary depending on the applicable law and regulation a well a the practice of the companie in each country. In many countrie, L Oréal participate in etablihing additional retirement benefit for it employee through a whole erie of defined benefit cheme and/or defined contribution cheme (e.g. United State, the Netherland, Belgium, Canada, and South American countrie). In ome cae, the defined benefit cheme have been cloed to new recruit who are offered defined contribution cheme (Germany, Belgium and the United Kingdom). Thi erie of defined benefit and defined contribution cheme make it poible to hare the financial rik and enure improved cot tability. In defined contribution cheme, the Company commitment mainly conit in paying a percentage of the employee annual alary into a penion plan each year. The defined benefit cheme are financed by payment into pecialit fund or by etting up proviion, in accordance with the accounting tandard adopted by L Oréal. The performance of the manager of the main fund etablihed, a well a the financial tability rating of the cutodian, are regularly reviewed by the Superviory Committee. Penion exceeding the legal minima required by national ocial ecurity ytem are now paid in 80% of L Oréal ubidiarie throughout the world. In countrie which already offer ufficient ocial coverage, L Oréal doe not propoe company penion cheme. Thi i alo the cae in countrie which do not have an appropriate legal framework or a long-term invetment intrument. The Superviory Committee continue to be attentive to change in local ituation and, when required, additional employee benefit cheme are put in place. 6 FRANCE Penion cheme In France, L Oréal ha upplemented it retirement plan by creating on January 1 t, 2001 a defined benefit cheme with conditional entitlement baed on the employee preence in the Company at the end of hi/her career. Then, on September 1 t, 2003, a defined contribution cheme with accrued entitlement wa introduced. Defined benefit cheme In order to provide additional cover, if applicable, to compulory penion provided by the French Social Security compulory penion cheme, the ARRCO or AGIRC (mandatory French upplementary penion cheme), L Oréal introduced on January 1 t, 2001, a defined benefit cheme with conditional entitlement, the Retirement Income Guarantee for former Senior Manager (Garantie de Reource de Retraité Ancien Cadre Dirigeant). Prior to thi, on December 31 t, 2000, L Oréal cloed another defined benefit cheme, alo with conditional entitlement, the Penion Cover of the Member of the Comité de Conjoncture (Garantie de Retraite de Membre du Comité de Conjoncture). Acce to the Retirement Income Guarantee for former Senior Manager, created on January 1 t, 2001, i open to former L Oréal Senior Manager who fulfil, in addition to the requirement of having ended their career with the Company, the condition of having had the tatu of Senior Manager within the meaning of Article L. 3111-2 of the French Labour Code for at leat ten year at the end of their career. REGISTRATION DOCUMENT / L ORÉAL 2013 203

6 SOCIAL CORPORATE SOCIAL, ENVIRONMENTAL AND SOCIETAL RESPONSIBILITY INFORMATION Thi cheme provide entitlement to payment to the beneficiary retiree of a Life Annuity, a well a, after hi/her death, the payment to the beneficiary poue and/or ex-poue() of a urviving Spoue Penion and, to the children, of an Orphan Penion, ubject to the children fulfilling certain condition. The calculation bai for the Guaranteed Income i the average of the alarie for the bet three year out of the even calendar year prior to the end of the Senior Manager career at L Oréal. The Guaranteed Income i calculated baed on the beneficiary number of year of profeional activity in the Company at the date of the end of hi/her career at L Oréal, and limited to a maximum of 25 year, each year leading to a teady, gradual increae of 1.8% in the level of the Guarantee. At thi date, the gro Guaranteed Income may not exceed 50% of the calculation bai for the Guaranteed Income, nor exceed the average of the fixed part of the alarie for the three year ued for the calculation bai. A gro annuity and gro Lump Sum Equivalent are then calculated taking into account the um of the annual penion accrued on the date when the retiree applie for hi/her penion a a reult of hi/her profeional activity and on the bai of a beneficiary who i 65 year of age. The Life Annuity i the reult of the converion into an annuity at the beneficiary age on the date he/he applie for hi/her penion of the gro Lump Sum Equivalent, le the amount of all payment due a a reult of termination of the employment contract, excluding any paid notice period and paid holiday and le all alarie paid under an early retirement leave plan, if uch lump um equivalent i the reult of thee operation. Around 450 Senior Manager are eligible for thi cheme, ubject to their fulfilling all the condition after having ended their career with the Company. Acce to the Penion Cover for Member of the Comité de Conjoncture ha been cloed ince December 31 t, 2000. Thi former cheme granted entitlement to payment to the beneficiary retiree, after having ended hi/her career with the Company, of a Life Annuity a well a, after hi/her death, the payment to the poue and/or ex-poue() of a urviving Spoue Penion and, to the children, of an Orphan Penion, ubject to the children fulfilling certain condition. The calculation bai for the Penion Cover i the average of the alarie for the bet three year out of the even calendar year prior to the end of the beneficiary career at L Oréal. The Penion Cover i calculated on the bai of the beneficiary number of year ervice and limited to a maximum of 40 year, it being pecified that at the date of cloure of the cheme, on December 31 t, 2000, the minimum length of ervice required wa 10 year. The Penion Cover may not exceed 40% of the calculation bai for the Penion Cover, plu 0.5% per year for the firt twenty year, then 1% per year for the following twenty year, nor exceed the average of the fixed part of the alarie for the three year ued for the calculation bai. Around 120 Senior Manager (active or retired) are eligible for thi cheme ubject to the provio, for thoe in active employment, that they fulfil all the condition after having ended their career with the Company. Defined contribution cheme In September 2003, L Oréal et up a defined contribution penion cheme. A new agreement wa igned in December 2007, with effect from January 1 t, 2008, a well a a upplemental agreement applicable a from January 1 t, 2009. All executive and ale repreentative affiliated with the CIPC-R are beneficiarie of thi cheme. The bai for contribution, which remain unchanged, amount to between once and 6 time the French ocial ecurity ceiling, with a contribution of 4% ince January 1 t, 2008, hared by the Company and the employee. Thi cheme grant entitlement to the payment to the beneficiary retiree, after he/he ha applied for hi/her penion entitlement from the French Social Security compulory penion cheme, of a Life Annuity a well a, after hi/her death, the payment to the poue and/or ex-poue() of a urviving Spoue Penion. The Life Annuity i calculated on the bai of the capital formed by the contribution made and the financial income on uch contribution at the end of the employee career. The employer commitment i limited to the payment of the contribution tipulated. 12.31.2011 12.31.2012 12.31.2013 Number of member 12,594 13,549 13,823 TOTAL NET CONTRIBUTIONS (in million) 8.74 9.20 9.51 Pre-retirement arrangement L Oréal pay cloe attention to the retirement condition of it employee and pre-retirement arrangement that have been in force for a number of year, which have been confirmed and improved within the cope of the agreement on the employment of older worker, igned on December 3 rd, 2009, which provide in particular for the introduction of a time aving account for older employee: the early retirement leave (CFC): thi pre-retirement arrangement conit of exempting employee from the requirement to perform their activitie; but during thi period, they remain employee of L Oréal and continue to receive their remuneration (within the limit of 9,280 gro/month) a well a mandatory profit haring, incentive payment and paid leave; early retirement leave under the time aving account: thi arrangement, linked to the 35-hour working week agreement and the Time Saving Account (Compte Epargne Temp CET), enable an employee who ha aved 3 day leave per year under the CET ince 2001, to benefit from the poibility to terminate hi/her activitie at leat 3 month earlier than cheduled (6 month for ale repreentative), and thi poibility can be combined with the early retirement leave; retirement indemnitie: a new cale of indemnitie at L Oréal wa implemented by a collective agreement a from 2011, which i more favourable than the French National Collective Bargaining Agreement for the Chemical Indutrie. Thu, when he/he retire, an employee may benefit from retirement indemnitie ranging from two month alary for five year ervice, to eight month alary for 40 year ervice. In order to increae the pecial leave prior to retirement, the employee may opt to convert hi/her retirement indemnitie into time, or he/he may chooe to receive payment of the retirement indemnitie which will be made at the time when he/he leave the Company. 204 REGISTRATION DOCUMENT / L ORÉAL 2013

CORPORATE SOCIAL, ENVIRONMENTAL AND SOCIETAL RESPONSIBILITY SOCIAL INFORMATION 12.31.2011 12.31.2012 12.31.2013 Men Women Total Men Women Total Men Women Total Early retirement leave 51 127 178 65 128 193 81 183 264 Compulory retirement on the Company initiative 5 3 0 3 2 0 2 Voluntary retirement 162 66 135 201 80 150 230 Source: HR France tatitic - 2011, 2012 and 2013. Thee commitment are guaranteed partly by external financial cover aimed at gradually building up fund reulting from premium paid to external organiation. The commitment net of fund inveted and the actuarial difference are booked a a proviion in conolidated balance heet liabilitie. The evaluation method adopted to calculate the retirement and pre-retirement benefit commitment i the retropective method baed on etimated calculation of the final alary. Thee commitment take into account the employer contribution to the healthcare cheme for retiree. million 12.31.2011 12.31.2012 12.31.2013 Proviion for penion commitment in conolidated balance heet liabilitie 662.6 706.7 621.3 Source: Adminitration and Finance Diviion. Employee Benefit cheme in France In addition to the compulory Lump Sum Death Benefit for executive under Article 4 and 4 bi of the French National Collective Bargaining Agreement of 1947 (1.5% of Bracket A of income a defined by the French Social Security) and the guarantee accorded under the French National Collective Bargaining Agreement for the Chemical Indutrie, L Oréal ha et up, in France, under an agreement, an Employee Benefit cheme providing additional collective guarantee to it employee. All thee guarantee are baed on the gro income up to 8 time the Social Security ceiling, except for the education annuity which i limited to up to 4 time the ceiling. They are generally financed on Bracket A, B and C of income a defined by the French Social Security, except for the Education Annuity which i baed on Bracket A and B, and the urviving Spoue Penion which i baed on Bracket B and C. Thi Employee Benefit cheme provide guarantee in the event of: temporary diability: for all employee, 90% of their gro income limited to 8 time the French Social Security ceiling, net of all deduction, after the firt 90 day off work; d eath: a) for all employee, the payment of a Lump Sum Death Benefit, increaed depending on the employee family tatu. The amount of thi Benefit i doubled in the event of accidental death, b) for executive and comparable categorie of employee, the payment of a Spoue Penion to the urviving poue. Thi enure the poue ha an income imilar to the Spoue Penion that would have been paid by AGIRC if death had occurred at the age of 65, c) for all employee, the payment of an Education Annuity to each dependent child, according to an age-baed chedule. The total amount of the Lump Sum Equivalent for thee guarantee may not exceed 2.3 million per event. The capital for the Spoue Penion i the firt to be applied, followed by the Education Annuity; the balance of the baic cheme i then ued to calculate the Lump Sum Death Benefit, poibly increaed by the minimum guaranteed Lump Sum Death Benefit. 6 permanent diability: for all employee, a fraction, depending on the extent of the diability, ranging up to 90% of their gro income, limited to 8 time the French Social Security ceiling, net of all deduction; thouand 12.31.2011 12.31.2012 12.31.2013 Net Employee Benefit Contribution for the financial year 10,688 11,445 11,900 (1) (1) Etimated. Minimum guaranteed Lump Sum Death Benefit Since December 1 t, 2004, and January 1 t, 2005 for ale repreentative, L Oréal ha put in place an additional guaranteed Lump Sum Death Benefit that upplement, where applicable, for all employee, the Lump Sum Death Benefit to the extent of three year average income. A maximum limit i et for thi guarantee. The total amount of the capital needed to fund the urviving Spoue Penion and Education Annuity, the Lump Sum Death Benefit and the minimum guaranteed Lump Sum Death Benefit i alo ubject to a ceiling. Healthcare expene The employee of L Oréal parent company and it French ubidiarie benefit from additional cheme covering healthcare cot. REGISTRATION DOCUMENT / L ORÉAL 2013 205

6 SOCIAL CORPORATE SOCIAL, ENVIRONMENTAL AND SOCIETAL RESPONSIBILITY INFORMATION The healthcare cheme i compulory for all the employee of L Oréal and it French ubidiarie. Employee have the option of including their family member in thee cheme. Retiree of L Oréal S.A. and certain companie can continue to benefit from the healthcare cheme, with a contribution by L Oréal, ubject to a memberhip duration claue, pecified in the regulation for additional defined benefit penion. Contribution are generally individual. The contribution by the employee i partly financed by the Company. 6.2.2.2. WORK ORGANISATION Organiation of working time L Oréal complie with the tatutory and contractual obligation with regard to working time in each of it ubidiarie. Working time depend on the local environment and the buine activitie carried out. Employee who have choen to work part-time come from all categorie. The number of part-time employee i 10,284, 9,610 are women and 674 men. UNITED STATES L Oréal USA offer two programme to ait it employee to balance their profeional and peronal commitment, concerning flexible work time and telecommuting. t he Flexible Work Time programme enable eligible employee to work outide etablihed working hour. Thee flexible work hour are propoed for defined period and formally provided for in an agreement with the employee concerned. t he Telecommuting programme offer the poibility for eligible employee to perform their profeional activitie by working from home within the limit of two day a month. ITALY L Oréal Italy made a commitment in 2011 in favour of mum at work, following a project conducted with employee and their repreentative, involving mother of young children. The igned agreement define the proviion which go beyond the legal obligation and which are aimed at improving the private life-profeional life balance for mother of young children; everal of them concern flexible management of working hour. In particular: the variable working hour already in force for all employee are enlarged (poibility of tarting work between 08.30 a.m. and 10.30 a.m.) for mother until their children reach 3 year of age; the poibility of working part-time 6 hour a day i granted, at the mother requet, until the child reache 2 year of age; in cae of ue of the optional parental leave for 6 month following maternity leave, L Oréal Italy upplement the portion of the alary paid by the ocial ecurity ytem, 30% of the alary, to bring it up to 45% in total; 2 half day of paid leave are allowed in order to enable the mother to make arrangement if the child i ick; the annual leave amounting to 40 hour to which employee are entitled for doctor appointment may be ued by mother for examination concerning their child until the child reache 3 year of age; in addition to thee meaure, if the child goe to a day nurery, a contribution of 130/month i paid until the child reache 3 year of age. Within the cope of the L Oréal Share & Care program, the Group ha undertaken to promote initiative of thi kind all over the world. Abenteeim The overall rate of abenteeim for 2013 wa 4.84%, 2.28% of which i due to ickne, calculated uing the following method. Method of calculation: Total abenteeim: B/(A+B); Sickne abenteeim: C/(A+B). (A) Number of day effectively worked by all employee with contract, including training day. (B) Number of day of abence (ick leave, occupational dieae, maternity leave, accident in the workplace and/or travel-to-work accident or any other abence not provided for by contract). (C) Number of day of ick leave (excluding occupational dieae, maternity leave, accident in the workplace and/ or travel to work accident...). 6.2.2.3. LABOUR RELATIONS Organiation of the dialogue between employee and management and in particular the procedure for information and conultation of the employee and negotiation with them The quality of the ocial climate at L Oréal i the fruit of an ongoing dialogue between Management, employee and their repreentative, in accordance with trade union right in each country and with a neutral attitude with regard to the variou trade union organiation. 206 REGISTRATION DOCUMENT / L ORÉAL 2013

CORPORATE SOCIAL, ENVIRONMENTAL AND SOCIETAL RESPONSIBILITY SOCIAL INFORMATION Employee repreentative intitution have been et up in mot of the European ubidiarie, the Aian ubidiarie (China, Indoneia, South Korea ), Africa (Morocco, South Africa), and in North and South America (the United State, Canada, Mexico, Brazil and Argentina ), and alo in Autralia and New Zealand. In the few cae where there i no employee repreentative intitution (eentially in ubidiarie with a mall workforce), the dialogue i conducted directly with the employee, in complete compliance with the principle of tranparency and trut that are applied uniformly throughout the Group. Since 2003, L Oréal ha carried out a global employee opinion poll with the aitance of the international firm of Tower Waton, a urvey that wa repeated in 2011-2012. The reult are hared with the employee and employee repreentative. They are the ubject of action plan implemented in a decentralied manner, a cloely a poible to the expectation expreed. The European Work Council An agreement igned in 1996 between L Oréal and French and European trade union (FECCIA and EMCEF) led to the etablihment of the Company Intance Européenne de Dialogue Social/European Work Council (IEDS/ EWC). The initial agreement ha been regularly updated, in particular in 2009 to introduce a new information and conultation procedure which applie to trannational project involving local conultation procedure. Thi procedure i implemented with the Liaion Secretariat extended to include member from the countrie concerned or with the entire IEDS/EWC, depending on the geographic and trategic dimenion of the project. Thi proce allow for the poibility of an opinion from the IEDS/EWC. Thi reviion of the agreement repreented an important advance which aim to reinforce ocial dialogue at L Oréal while remaining a tep ahead of change in legilation. The agreement ha been renewed, unchanged for the period 2013-2016. The IEDS/EWC contribute to dicuion and formal meeting with it member about the Group current ituation and future propect, on the bai of an agenda prepared with the Liaiion Secretariat following a one-day preparatory meeting between the member of thi body. It ha 30 member, who receive regular training on economic and ocial iue. Today, the IEDS/EWC cover more than 30,000 employee in 26 countrie which are part of the European Economic Area; among whom the 16 countrie with more than 150 employee are repreented. Situation with regard to collective agreement The ocial policy at L Oréal permit the ignature of a certain number of collective agreement in the ubidiarie every year. In 2013, 39 agreement were igned in France and 57 agreement were igned in the ret of the world. In total, the number of agreement in force at December 31 t, 2013 wa 426. 6.2.2.4. HEALTH AND SAFETY For everal year, L Oréal ha applied a well-etablihed policy in the field of health and afety (EHS policy). Thi define the Company commitment to developing, producing, ditributing and elling innovative product of the highet quality, while having an ethical conduct and guaranteeing the health and afety of employee, cutomer and the communitie in which L Oréal perform it activitie. Thi approach i part of an overall environmental, health and afety policy decribed in the ection on Environmental information on page 212 et eq. L Oréal i eager to provide a afe and healthy work environment for it employee. Health and afety are of paramount importance and L Oréal ultimate goal i a zero accident rate. Comprehenive meaure have been taken focued on rik reduction and continuou improvement. A afety culture ha been intilled, etting high tandard and involving employee at all level of the Company. Keen to increae afety in the workplace, the General Management ha et an ambitiou objective to improve the reult obtained. Performance ummary Overall, 2013 wa a good year for the Group a a whole with a healthy improvement at the level of Operation. The ditribution centre had an conventional frequency rate (TFc*) < 1.0. The Group performance improved by 4.7% a compared to 2012. Out of the 195 lot-time accident (L Oréal taff and temporary employee) regitered in the Group in 2013, 21.5% occurred at the plant and ditribution centre, 31% at adminitrative ite, 7.5% in Reearch & Innovation (R&I) laboratorie and centre and 40% in ale force and hop. Site of plant and ditribution centre: TFc = 1.17 v 1.49 in 2012 (-21.5%); Adminitrative ite and R&I: TFc = 1.25 v. 1.28 in 2012 (-2.3%); Sale force & Shop: TFc = 3.15 v 2.84 in 2012 (+10.9%); Group: all ite: TFc = 1.64 v 1.72 in 2012 (-4.7%). Management i the guiding force behind thi change in afety culture, upported and aited by the EHS network. L Oréal ha et up the neceary tool and programme to achieve excellence in thi area. 6 * TFc (conventional frequency rate) - Number of lot-time accident per million hour worked by L Oréal taff. REGISTRATION DOCUMENT / L ORÉAL 2013 207

6 SOCIAL CORPORATE SOCIAL, ENVIRONMENTAL AND SOCIETAL RESPONSIBILITY INFORMATION The baic afety improvement programme ret on the following element: EHS teering committee: overall review of the action plan and the efficiency of the ite EHS programme by the Management Committee; Meur: periodic afety viit in the field and dicuion with a manager; SIO (Safety Improvement Opportunitie): reporting of ituation conidered a involving rik by each employee with followup by direct management of the corrective meaure taken; Contructive Challenge : programme aimed at improving the afety culture and tate of mind of each employee o that each and every one of them take into account both hi/her own afety and that of other. The objective of thi programme i to cover 100% of the ite in 2020. The priority area and EHS focue for 2014 can be claified in the 8 following area: 1. Strategy and action plan to achieve the objective for 2020 (TFc < 0.5 for Operation, adminitrative ite, R&I and ale force & Shop) 2. EHS organiation EHS Culture Audit : an EHS culture audit of the viible commitment by manager and employee with follow-up of action plan to aim for excellence. Safety Target for factorie and ditribution centre The initial target i an 81% improvement in our afety record by 2015 (bae year 2005: TFc = 3.09), repreenting a TFc of < 0.60. PERFORMANCE SUMMARY FOR FACTORIES AND DISTRIBUTION CENTRES SINCE 2005 TFc (conventional frequency rate) - Factorie and ditribution centre 3.50 3.00 2.50 2.00 1.50 1.00 0.50 0.00 2005 2006 2007 2008 2009 2010 2011 2012 2013 3. Commitment and viible participation by management 4. Efficient Health and Safety management ytem at all ite 5. Active participation by employee 6. Better haring of reource and practice 7. Focu on rik 8. Group EHS audit Safety Training for management: In 2013, 68 participant from L Oréal attended eminar open to ite manager on the theme of Safety & Leaderhip, held at the CEDEP, the European Centre for Continuing Education (Centre Européen d Education Permanente) on the campu of INSEAD in France. The main objective of thee eminar are to change the attitude of manager with regard to afety, raie their awarene to the crucial problem poed by afety for companie and their management executive, and to increae their ability to have afer behaviour adopted and maintained over the long term. Ergonomic Attitude : programme rolled out in the factorie and ditribution centre aimed at reducing rik and ergonomic-related accident. 149 people have received ErgoAct training. Thi training will be more widely developed in 2014. Target: zero accident in 2013 (1) Out of 99 factorie and ditribution centre, 73 recorded zero lot-time accident. A decreaing accident everity rate A well a a reduction in the number of accident, it i alo important to note that the accident everity rate ha fallen by 57% ince 2005. It i 0.06 in 2013. Million of hour L Oréal taff - without a lot time accident ince 2005 Operational and adminitrative ite: 3 factorie, 4 ditribution centre and 17 adminitrative/r&i ite reached or paed the threhold of one million hour worked without a lot-time accident. 3 factorie, 1 ditribution centre and 9 adminitrative ite have now exceeded 3 million hour. (1) L Oréal permanent taff. 208 REGISTRATION DOCUMENT / L ORÉAL 2013

CORPORATE SOCIAL, ENVIRONMENTAL AND SOCIETAL RESPONSIBILITY SOCIAL INFORMATION STATUS REPORT ON COLLECTIVE AGREEMENTS WITH REGARD TO HEALTH AND SAFETY L Oréal health and afety tandard are very trict and often exceed the legal obligation in the different countrie. The Health and Safety Committee and their activitie do not necearily lead to the ignature of pecific agreement, but rather to joint monitoring of thi ubject (application of L Oréal tandard and the legal obligation, analyi of ituation, etc ) according to the principle of continuou improvement. 24 agreement have neverthele been identified a being in force at December 31 t, 2013 which deal, totally or partially, with health and afety. 6.2.2.5. TRAINING Training i an integral part of employee development policy at L Oréal. In a continual earch for excellence and creativity and the deire to be one tep ahead to deal with the growing complexity of the challenge of our buine, the Learning for Development team provide employee and manager with ongoing upport to help them not only to be high-performing, but alo to achieve fulfilment. Training ha alway been at the heart of the Human Reource trategy: thi enable L Oréal to attract the bet talent, prepare the leader of the future, but alo provide all the employee throughout the world with the bet poible repone in term of training. The Group ambition i to enable the larget poible number of employee, whatever their profeion, country or poition to have acce to development opportunitie throughout their working life: thi i L Oréal viion of Learning for All. The training offering i tructured into practice, or field of expertie (marketing, commerce, reearch, operation, management, peronal development ). Reponibility for each practice i entruted internally to profeional in thi area, whoe role i to identify the Group current and future need in term of kill and to deign appropriate training olution. Employee benefit from 2 individual interview per year with their manager, one of them being dedicated to identifying development need. Peronal training path are built on the bai of thee exchange, with the help of Training manager. Employee then have acce to a whole et of development reource with a mix of in-room training, training video, digital and ocial experience and coaching in the work ituation. They can thu build their own training experience, while haring their practice with colleague all over the world. Due to the preence of an international network of Learning for Development manager, both at the level of the countrie, but alo in the 5 main region, L Oréal enure global conitency in the major programme and thu promote the haring of the ame corporate culture everywhere in the world. Thi organiation a a network i an eential driver to foter the loyalty of our employee and accelerate their development. It thu make it poible to repond better to the pecificitie and regional prioritie in term of kill need. The Group alo organie large international programme which make it poible to unite employee from all over the world and thu profit from enriching multicultural exchange and experience haring. Thee moment are eential to undertand the Group culture and it trategy, meet the enior manager and hare their challenge, intil a Group pirit and develop an internal international network, which are all key factor for the ucce of each and every one of them, a well a alo being factor for Sutainable Development and long-term ucce for the Group. Finally, within the cope of the Sharing b eauty with a ll programme, the Group undertake to give all it employee acce, all over the world, to at leat one training eion per year by 2020. 6 NUMBER OF HOURS OF TRAINING 2011 2012 2013 TOTAL 1,022,772 1,063,172 1,325,136 N.B.: Thee figure concern the cope defined in the methodological note on page 211. 6.2.2.6. DIVERSITY AND EQUAL OPPORTUNITIES For over 10 year, L Oréal ha been engaged in an innovative, ambitiou policy in favour of Diverity. The Group ha et itelf three prioritie: gender, diability and ocio-cultural and ethnic origin and it action are more particularly focued on the area of human reource, olidarity ourcing and marketing. Today, with a network of more than 86 Diverity coordinator all over the world, the initiative conducted by all the Group ubidiarie make L Oréal a pioneer and one of the recognied major player in the area of diverity at worldwide level. In 2004, L Oréal wa a founding member of the firt Diverity Charter in France. The Group ha now igned eight other charter in Europe (including Germany, Autria, Belgium, Italy, Poland, Spain and Sweden) certain of which were created on it initiative. The mot recent initiative wa at L Oréal Finland which wa a founding member of the Finnih Diverity Charter in 2013. In the field of gender equality, L Oréal wa awarded in 2010 the firt European gender equality label, the Gender Equality European Standard (GEES), by Bureau Verita, for eight of it entitie in Europe: Germany, France, Spain, Italy, Belgium, the United Kingdom, Ireland and L Oréal S.A. Four other entitie were audited at the end of 2012 and awarded the label by Bureau Verita (Baltic countrie, Portugal, Czech Republic and Poland). In 2013, the 8 ubidiarie which had initially obtained the GEES label were ubject to a mid-term audit: 3 ubidiarie had made progre, increaing to 4 the total number of ubidiarie that have achieved the maximum level REGISTRATION DOCUMENT / L ORÉAL 2013 209

6 SOCIAL CORPORATE SOCIAL, ENVIRONMENTAL AND SOCIETAL RESPONSIBILITY INFORMATION of certification. Thi i proof of commitment a thee regular audit meaure the progre made toward gender equality. L Oréal France alo received the Profeional Equality label. Alo in the field of gender equality, L Oréal Mexico received the World Bank Gender Equity Model certification in October 2012. With regard to diability, L Oréal ha been developing a global policy ince 2008 in favour of profeional inertion of the diabled in the Company. Thi policy focue on five prioritie: infratructure, maintenance in employment, recruitment, ubcontracting and partnerhip. To accelerate the mobiliation of it ubidiarie, L Oréal ha put in place ince 2008 award known a Initiative for the Diabled which reward operational entitie for their concrete action in favour of the diabled. Thee award, which are preented every two year, make it poible to howcae and hare the bet practice of the variou L Oréal entitie both in France and in Europe. In 2012, thi initiative wa made international, which enabled 14 countrie from four geographic zone to participate. In 2013, L Oréal Chile received the Sello Incluivo eal which reward effort made with regard to acceibility. L Oréal alo igned the agreement with the International Labour Organiation to become part of thi organiation Diability Network, in order to hare it bet practice and interact with takeholder, uch a Non-Governmental Organiation, civil aociation and other buinee. In 2009 L Oréal created the CSR+Diability network together with the Italian Minitry of Labour, Telefonica and the ONCE Foundation in Spain. The purpoe of thi tri-national network which conit of player from the private and public phere and from aociation, i to promote acce to work for diabled people throughout Europe. In 2013, a a reult of thi partnerhip, we jointly created the 1 t European Award for Social Entrepreneurhip and Diability: Promoting Social Invetment. Thi award aim at identifying and rewarding project from European ocial entrepreneur in the field of incluion of the diabled or innovative project promoted by diabled entrepreneur. December 3 rd i the International Day of p eron with d iabilitie declared by the United Nation. 6 Group ubidiarie went into action and created Diability Awarene Week : Spain, Chile, Mexico, Hong Kong, Italy and Germany. France alo mobilied the head office team to raie awarene on thi topic. Finally, with regard to recruitment, 46 countrie in which the Group i etablihed have implemented action to diverify the origin of their recruitment with one objective: enable all talented individual to aume high-level reponibilitie within the Company, whatever their difference or their origin. L Oréal hoted the European Origin conference at it head office in partnerhip with the ENAR (European Network Againt Racim) in October 2013. L Oréal ha moreover developed a diverity aement in France with a hundred or o indicator that together cover the 6 dimenion of Diverity policy. For the ame purpoe, an automatic Diverity Reporting tool with 30 indicator (recruitment, training, remuneration ) ha been made available to all the ubidiarie. In order to upport thee initiative, L Oréal ha undertaken to train it employee in diverity by organiing Diverity Workhop. Thi one-day training eion made it poible to raie awarene among over 15,000 employee in more than 20 countrie at the end of 2013. 6.2.2.7. PROMOTION AND COMPLIANCE WITH THE PROVISIONS OF THE FUNDAMENTAL CONVENTIONS OF THE INTERNATIONAL LABOUR ORGANISATION L Oréal became a ignatory of the United Nation Global Compact in 2003 and i committed to repecting and promoting the Fundamental Convention of the International Labour Organiation even though not all thee c onvention have been ratified by all the countrie in which L Oréal i preent. Thi mean in particular repecting freedom of aociation and the recognition of the right to collective bargaining, contributing to the elimination of all form of forced or compulory labour, contributing to the effective abolition of child labour and eliminating all form of dicrimination in repect of employment and occupation. L Oréal enure that thee convention are oberved with regard to it employee thank to the action taken by the Human Reource function and at it upplier and ubcontractor thank to the action taken by the Purchaing function (ee the ection on Societal Information, paragraph on Subcontracting with upplier for further detail). Concerning repect of freedom of aociation and recognition of the right to collective bargaining, the meaure taken are decribed in the paragraph on Labour Relation on page 206. In countrie where freedom of aociation and the right to collective bargaining are limited or prohibited, L Oréal enure that other mode of dialogue with employee exit enabling them to report any concern they may have. Concerning the elimination of all form of dicrimination in repect of employment and occupation, the meaure taken are decribed in the paragraph on Diverity and Equal Opportunitie on page 209. Concerning the elimination of all form of forced or compulory labour, recoure to prion labour i poible when it i voluntary within the cope of a profeional reinertion programme, and paid at market price. Supplier or ubcontractor mut requet the authoriation of L Oréal before they have recoure to thi form of labour. 210 REGISTRATION DOCUMENT / L ORÉAL 2013

CORPORATE SOCIAL, ENVIRONMENTAL AND SOCIETAL RESPONSIBILITY SOCIAL INFORMATION Furthermore, all Group entitie are required to enure that none of their employee are ubject to the retention of identity paper or travel document, or are obliged to pay recruitment fee or to depoit money in order to be able to leave their employment. Concerning the abolition of child labour, all L Oréal entitie are required to verify the age of their new employee when they are hired. L Oréal ha choen to et a compulory minimum age of 16 for it entire taff, a minimum age which i higher than that required by the International Labour Organiation. In light of their young age, employee who are between 16 and 18 year old are ubject to pecific meaure and in particular: no night work, no overtime, no work involving the ue of hazardou ubtance or tool, no carrying of heavy load, the implementation of a reinforced training programme, appointment of an internal tutor and incluion on a pecial regiter. In 2013, 570 employee aged between 16 and 18 worked within the Group entitie. L Oréal Open Talk policy enable employee to raie any concern they may have directly with the Group Chief Ethic Officer including via a ecure webite. L Oréal follow, inter alia, the Global Reporting Initiative indicator HR4, HR5, HR6 and HR7 which correpond to the four fundamental convention. Methodological note SOCIAL, HEALTH AND SAFETY DATA SCOPE, INDICATORS, REPORTING METHOD AND SYSTEMS Social data SCOPE OF CONSOLIDATION The workforce indicated in the Total Workforce and Geographic ditribution of workforce chart i the total workforce preent at December 31 t of the year concerned (1). For proportionally conolidated companie, the workforce at December 31 t i recorded on a prorata bai according to the take held by L Oréal. All the other ocial indicator et out in the Social information ection relate to the Cometic and The Body Shop branche (2). If an indicator relate to a cope different from that of the Cometic and The Body Shop branche, the cope of conolidation i indicated in a note. INDICATORS The indicator choen are thoe ued in the management of employee and of the ocial apect of the Company. They reflect the reult of the Human Reource policy. DATA Four method are ued to collect data for the defined cope: Mot of the data are collected uing the dedicated Country Reporting intranet ytem, available in all countrie in which there i a L Oréal ubidiary. The ytem cover everal topic: workforce, ethic, Worldwide Profit Sharing, labour relation, remuneration, Human Reource expene, recruitment and training, and abenteeim. At the beginning of each year, the local Human Reource Director provide the required data for the previou year. When the data are compiled, each country mut validate a charter committing to the accuracy of all the data provided. Other data are collected by each corporate department concerned (i.e. Training, Recruitment) uing dedicated ytem which follow the ame operational and diemination approach. If information i not conolidated for the entire Cometic branch cope, it i recognied that it can be extrapolated from the available reult for the entitie connected to the local Information Sytem (IS), provided that the cope covered by uch entitie i repreentative (3). Latly, the pecific data relating to executive are gathered from the CAROL online career monitoring ytem, deployed in all Cometic ubidiarie. The improvement of the information collection proce at conolidated level ha made it poible to identify agreement that are in force that have not been taken into account up to the preent. The approach to progre in thi field i continuing in all the companie of the L Oréal Group. The monitoring of training at Group level doe not take into account all the hour of training in 2013 uch that the number of hour of training and the number of employee trained are higher than the figure publihed in thi report. An action plan i currently under way in order to cover all employee and in particular thoe who hold certain external or travelling poition. A proce of continuou improvement of thee ytem i in place. The ytem are reviewed each year, taking into account the Statutory Auditor recommendation and monitoring objective for ubequent year: updating the indicator to be monitored, improving their definition, and enhancing the communication, monitoring and control proce. 6 (1) Including employee with a permanent or fixed-term contract of employment. (2) Innéov i included, Galderma (dermatology) i excluded. (3) In France, the gender ditribution of the Cometic workforce wa extrapolated from the gender ditribution of the entitie connected to the France HRIS. The extrapolation method concern 5% of the French workforce, which i not yet connected to the local HRIS. REGISTRATION DOCUMENT / L ORÉAL 2013 211

6 ENVIRONMENTAL CORPORATE SOCIAL, ENVIRONMENTAL AND SOCIETAL RESPONSIBILITY INFORMATION Health and afety data SCOPE OF CONSOLIDATION The afety indicator et out relate to the ite of the Cometic, Dermatology and The Body Shop branche: factorie and ditribution centre but alo the adminitrative ite and reearch centre. Safety reporting cover 93% of factorie and ditribution centre; the data from 8 ite that have recently joined the Group are not included. In 2013, it cover over 80% of the workforce of the adminitrative ite and reearch centre. The afety indicator of the factorie and ditribution centre old or cloed during the financial year are reported in full up to the date of their exit from the cope. The factorie or ditribution centre that join the Group have a maximum period of 2 year to connect to the environmental and afety reporting ytem. DATA The following method i ued to collect data for the defined cope: The health and afety data are collected uing the dedicated ite reporting QIS intranet ytem, available in all countrie in which there i a L Oréal ubidiary. The required data are reported every month by the local manager. When the data are compiled, each ite mut validate the accuracy of all the data provided. A proce of continuou improvement of thee ytem i in place. The ytem are reviewed each year, taking into account the Statutory Auditor recommendation and monitoring objective for ubequent year: updating the indicator to be monitored, improving their definition, and enhancing the communication, monitoring and control proce. INDICATORS The indicator applied are thoe ued in the management of the Company ite. They reflect the reult of the Group Environmental, Health and Safety (EHS) policy. 6.3. ENVIRONMENTAL INFORMATION L Oréal environmental policy i part of the Group EHS policy, aimed at minimiing environmental impact while guaranteeing the health and afety of employee, cutomer and the communitie in which L Oréal perform it buine activitie. Although the cometic indutry ha a limited impact on the environment, thi policy neverthele lead u to ytematically identify the rik inherent in our buine activitie, and to bring them under control. For example, before building or renovating a factory anywhere in the world, and before introducing new manufacturing equipment and procee, L Oréal aee all the potential environmental impact and develop mitigation trategie where required. The health and afety meaure adopted in favour of L Oréal employee are decribed in paragraph 6.2.2.4. Health and Safety, on page 207. The Group EHS policy and manual EHS policy at L Oréal i organied and managed in accordance with an EHS manual, which et out the meaure to be applied by all operational ite under L Oréal control. It cover afety Incentive and Mandatory Profit Sharing cheme meaure and afety objective (zero accident), reource efficiency, greenhoue ga emiion, wate generation, EHS reponibilitie, internal procedure, etc. For L Oréal ite, the EHS manual i a key tool to drive further improvement in their EHS performance. Ditributed to all operational ite ince 2011, it i currently being rolled out in the reearch centre and adminitrative ite. The Group EHS ytem conit of a large number of procedure that make it poible for the ite to control the facilitie and buine activitie, thu limiting, for example, the rik of fire, exploion and environmental incident. Organiation of EHS There are clear accountabilitie for EHS at every level. L Oréal Executive Vice-Preident Operation, who report to the Group Chairman & CEO, i reponible for health, afety and environmental iue. EHS manager enure the deployment of the Group rule and procedure and the aociated performance objective in each entity. The remuneration of factory manager and ditribution centre manager i partly linked to their performance in the field of health, afety and the environment. 212 REGISTRATION DOCUMENT / L ORÉAL 2013

CORPORATE SOCIAL, ENVIRONMENTAL AND SOCIETAL RESPONSIBILITY ENVIRONMENTAL INFORMATION Worldwide audit programme Internal and external expert regularly viit L Oréal production and ditribution ite to ae the compliance of their operation with the Group rule, the progre made and the rik they preent. Third-party audit are alo carried out at upplier ite in accordance with the ame criteria a thoe ued for Group entitie. L Oréal ha a comprehenive programme of EHS audit, which include in particular rik audit, Culture Audit and ubcontractor audit. Rik audit have 2 main objective: enuring that technical equipment, procee and operation method implemented by management and ued by employee do not carry rik of damage to the environment or to their health and afety; giving the Group General Management objective knowledge of control over rik in the EHS field on the L Oréal ite and providing the aurance that they are under control. Thee audit cover all international operation and are carried out by independent expert. A a general rule, it take about five day for a team of three or four auditor to evaluate a factory and around three day to evaluate a ditribution centre. Over the lat 2 year, thee audit have been extended to the adminitrative ite and reearch centre. In 2013, rik audit were carried out at 17 factorie, 12 ditribution centre, 13 adminitrative ite and 4 Reearch centre. Launched in 2009, the EHS Culture Audit programme aim at meauring and developing management leaderhip and internal EHS culture o that EHS i at the core of the reponibilitie of all operational manager. EHS Culture Audit are triggered by a ite performance and conducted by internal EHS pecialit through group interview with 20-30% of the ite employee. In 2013, EHS Culture Audit were carried out at 10 factorie, 7 ditribution centre, and 2 reearch centre. In 2013, a new type of combined audit (a rik and culture audit) wa carried out at 6 pilot ite. Thi principle will be extended to other Group ite in 2014. Furthermore, within the cope of the Group Fire and Environment inurance policie, prevention viit are conducted regularly by expert and inurer. In 2013, viit were made to 8 factorie in 6 countrie with regard to environmental rik (France, Brazil, Germany, Poland, Ruia, Belgium) and 24 ite with regard to fire rik. The Real Etate Department carrie out audit of the Company real etate aet every year on a rotating bai with the aitance of an outide firm. The purpoe of the real etate audit i to check that the building have been brought into compliance with the Group real etate procedure, and on the due and proper completion of extenion or renovation operation and preervation of the aet. Since 2009, thee audit have included apect concerning Quality of interior air and Energy Performance. In 2013, 5 ite were audited in variou countrie. EHS policy training A targeted training programme i provided on L Oréal EHS policy and practice for manager and EHS profeional acro the Group. The objective are a follow: identify and hare EHS viion, challenge and value acro the Group; identify the rik inherent in a role, tak, behaviour or ue of equipment and implement tailored corrective olution; enable manager to implement EHS policy effectively within their team. In 2013, a new training coure wa launched, EHS expertie, dedicated to the EHS team in the factorie and ditribution centre. 20 people have already been trained in Europe, repreenting 11 nationalitie. Thi training coure will be rolled out to the other zone in 2014. Manager continue to receive training in environment, health and afety culture all over the world: 169 manager and upervior took part in EHS Operation, and 68 top manager in Safety & Leaderhip. In addition, within the cope of deployment of the Ergonomic Attitude programme throughout the Group, 149 people received ErgoAct training. Thi training will be developed further in 2014. 6.3.1. General environmental policy Through the Commitment for 2020, the Group i continuing with the proce initiated in 2009 to reduce it environmental footprint for it plant and ditribution centre. The commitment to reducing it direct and indirect carbon emiion in abolute term, it water conumption and it wate generation per finihed product by 50% between 2005 and 2015 ha been increaed to 60% between 2005 and 2020: 60% abolute reduction in greenhoue ga emiion (cope I and II); 60% reduction in wate generated per finihed product; 60% reduction in water conumption per finihed product. Finally, by 2020, the Group undertake to end zero indutrial wate to landfill and to reduce the CO 2 emiion from tranportation of product by 20% per FP/KM from a 2011 baeline. 6 REGISTRATION DOCUMENT / L ORÉAL 2013 213

6 ENVIRONMENTAL CORPORATE SOCIAL, ENVIRONMENTAL AND SOCIETAL RESPONSIBILITY INFORMATION Global indutrial policy alo demand all ite to: enure compliance with the regulation; 6.3.2. Pollution and wate management apply bet practice in energy efficiency or efficient conumption of reource and wate reduction; A) SOLID WASTE roll out breakthrough project in a permanent earch for operational performance allied with environmental performance. Furthermore, all L Oréal factorie mut be ISO-14001 certified. At the end of 2013, 3 plant are till in the proce of being certified [Kaluga (Ruia), Egypt, San Lui Potoi (Mexico)] becaue they have recently tarted operation. SUMMARY OF THE ENVIRONMENTAL PERFORMANCES OF THE L ORÉAL GROUP S FACTORIES AND DISTRIBUTION CENTRES: 25.7% increae (excluding raw material factorie) in volume produced (2005-2013); Greenhoue ga emiion: abolute reduction of 43.1% (tonne of CO 2, direct and indirect, 2005-2013) on a like-forlike bai according to the GHG Protocol (1) ; 26.7% reduction in water conumption (litre per finihed product, 2005-2013); 19.6% reduction in the production of tranportable wate excluding huttle packaging (gram per finihed product, excluding rotation of huttle packaging, at the factorie and ditribution centre, 2005-2013); For many year, L Oréal ha followed an ambitiou wate management policy. Thi goe beyond regulatory compliance and the prevention of human rik to the environment. L Oréal include in tranportable wate everything that come out of a plant or a ditribution centre and which i not a finihed or emifinihed product (for example, the following are concerned for a plant: raw material packaging or packing item, watewater treatment plant ludge, broken pallet, etc ). Tranportable wate doe not include wate from work on an exceptional cale carried out at ite (for example, rubble and other material removed from a ite when work i carried out). All the poible method of wate recovery are ytematically explored reue, recycling, compoting, energy recovery in order to avoid wate to landfill a far a poible. In 2013, effort continued and new initiative were taken in the Group within the cope of the Commitment for 2020. Crofunctional working group have been et up, making it poible to increae the involvement of all buinee and job and all diviion. Similarly, all the initiative aimed at reducing the wate at each of the ite are currently being conolidated within the framework of a roadmap: in 2013, 90.9% of wate wa reued, recycled or recovered for energy and 5,291 tonne of wate were ent to landfill, i.e. 3.7% of tranportable wate with huttle packaging; The wate recycling rate increaed from 89.0% in 2005 to 90.9% in 2013, with 18 factorie at 100% in 2013; Abolute improvement of 30.7% in the watewater quality index (tonne of COD) (2005-- 2013). PROVISIONS FOR ENVIRONMENTAL RISKS The amount of the proviion booked for environmental rik i not material. Two ite have et aide a proviion for the treatment of their oil. Mot of thi proviion correpond to land which doe not require any treatment for the activitie which are currently carried out on the ite. 54% of the ite end zero wate to landfill; wate per finihed product, excluding huttle packaging, increaed by 4.9% a compared with 2012. Thi increae i principally due to one-off detruction of obolete item, during the lat quarter of the year, which could not be offet by a ufficient reduction in the other categorie of wate and which are notably due to reorganiation in the America zone. 2013 Total Tranportable wate with huttle packaging (tonne) fraction repreented by huttle packaging of which huttle pallet 141,664 35,585 16,276 Total recycled wate (tonne) 128,708 Recycling ratio (%) 90.9 Improved recording in repect of huttle packaging ued for tranportation in 2014: In order to improve the ytem of wate performance monitoring and exhautively recording the wate generated by the ue of huttle packaging, a new ytem of recording huttle packing at ource i to be put in place with the Group upplier in 2014. L Oréal will thu record the weight of it huttle packaging at ource in tranportable wate, with each of the ite being reponible for maximiing the rotation rate. (1) Greenhoue Ga Protocol: international method of carbon accounting. 214 REGISTRATION DOCUMENT / L ORÉAL 2013

CORPORATE SOCIAL, ENVIRONMENTAL AND SOCIETAL RESPONSIBILITY ENVIRONMENTAL INFORMATION L Oréal will continue to record the rotation of huttle packaging, which i neceary for the calculation of the wate recovery index (ee the above table). Furthermore, the wate performance indicator (g/pf excluding huttle packaging) will now take into account the material portion of the huttle packaging (excluding pallet), recorded at ource. Several year ago, L Oréal developed an internal procedure which define the ratio to be complied with between the different level of packaging of it finihed product. The procedure ha been extended to the packaging ued to deliver packing item to the factorie or to deliver finihed product from the factorie to the logitical ditribution centre. For uch purpoe, implified pecific tool for life cycle aement and deign procee have been deployed. In thi repect the Emballage PCR PET-G pour capot fond de Teint Luxe, permettant une réduction de prè de 50% de poid de platique (PCR PET-G Packaging for the cap for the Teint Luxe foundation tube, making it poible to reduce the weight of platic by nearly 50% won the Greener Award 2013 in Belgium. B) ATMOSPHERIC EMISSIONS Atmopheric emiion are eentially CO 2 emiion, linked to energy conumption on the ite. The low emiion of SO 2 come from the fuel oil ued (2% of foil energy conumed). The mall quantitie of VOC reult eentially from the alcohol ued in our production procee. Pleae refer to the table below for each of thee emiion: 2012 2013 Direct CO 2 (t) 66,920 67,331 Indirect CO 2 related to energy ued (t) 78,522 68,070 SO 2 (t) 6.1 3.7 VOC (t) 125.6 139 Ozone depleting ubtance Negligible * Negligible * * Thee emiion come from the refrigeration unit ued in our ite. C) WATER EMISSIONS: WASTEWATER On production ite Approximately half of L Oréal ite have on-ite watewater treatment plant. Thee ue a range of method including phyical, chemical and biological procee, or other technologie adapted to the characteritic of the watewater and local dicharge condition. Total COD for the watewater after on-ite treatment ha fallen by 21.3%. It amount to 0.9 g of COD per finihed product. For everal year, L Oréal ha been upporting a reearch project with the Univerity of Newcatle in the United Kingdom, aimed at optimiing the efficiency of watewater treatment. In 2013, a new technology wa put into operation in the Suzhou plant. Thi ha enabled L Oréal to optimie watewater treatment, while reducing both energy conumption and the quantitie of ludge produced. 6 2013 Total Accidental pill (m 3 ) 0 Watewater dicharge (m 3 ) 1,781,730 Tonne of DCO 5,237 On the ite of end cutomer Beyond watewater management on it production ite, L Oréal pay cloe attention to the impact of it product on aquatic environment when they are ued by conumer. Within the cope of it commitment under the Sharing beauty with all program, L Oréal ha undertaken to innovate uch that in 2020 all of it new product have an environmental or ocial benefit. Since 1995, the date of creation of it ecotoxicology laboratory, L Oréal ha developed expertie with regard to the potential impact of it cometic product on aquatic environment. In 2013, L Oréal moreover developed an ecological performance index for a cometic formula. A calculation method for the Water Footprint pecific to cometic product, particularly rined product wa applied (performance index for a formula baed on the environmental profile of it ingredient in term of biodegradability and ecotoxicity). Improvement in the percentage of biodegradability and/or of the Water Footprint of a formula i an eential factor for reducing the impact. Thu, following on from the work carried out to get to know and improve the environmental profile of ingredient which began in 1995, the Reearch & Innovation team are currently working on improving the biodegradability and the Water Footprint of formula. The average biodegradability in 2012 i 87.5% for hampoo and 85.6% for hower gel. Certain hampoo and conditioner with highly biodegradable formula have been launched on the market. REGISTRATION DOCUMENT / L ORÉAL 2013 215

6 ENVIRONMENTAL CORPORATE SOCIAL, ENVIRONMENTAL AND SOCIETAL RESPONSIBILITY INFORMATION For example, among the product launched in 2013, the Garnier Fructi Men Mint Xploion, Keratae Huile Lavante or Biotherm Aquafitne hampoo have biodegradability level of between 95% and 96%. D) NOISE POLLUTION L Oréal indutrial activitie are not particularly noiy. The ite comply with the noie tandard to which they are ubject. Every month, the internal environmental reporting ytem inform L Oréal of any intance of non-compliance on thi topic. According to thi reporting ytem, only one ite exceed the tandard, but doe not generate noie pollution a there are no cloe neighbour. 6.3.3. Sutainable ue of reource L Oréal trategy for raw material i a fundamental component of Sutainable Development viion. The impact of the raw material ued i meaured with the help of the environmental evaluation guide. L Oréal encourage the ue of raw material having a favourable impact, evaluate thoe raw material having an unfavourable profile and give priority to thoe which are renewable and plant-baed, with repect for biodiverity. Water i firt on the lit of reource to be preerved, and L Oréal endeavour to control the ue made of water throughout the entire production cycle. A) WATER L Oréal ha had a global water conervation programme in place ince 2003, which ha made it poible to make ignificant progre in reducing total water ue and increaing eco-efficiency. The Group ha made a ignificant pledge to thi by etting ambitiou target, in particular 60% reduction in water conumption per finihed product (2005-2020). In 2013, water conumption per finihed product wa reduced by 5.1% and overall water conumption in factorie and ditribution centre increaed by 1.4% a compared to 2012, whilt production increaed by 6.8%. Total conumption for 2013 wa 2,969 thouand m 3. Over the pat 9 year (2005-2013), water ue per finihed product ha been reduced by 26.7% and abolute conumption ha fallen by 7.7%, while production (excluding raw material plant) ha increaed by 25.7%. A lot of the water conumed in L Oréal factorie i ued for cleaning production equipment and packaging line to maintain very trict hygiene tandard. Thi repreent 34% of all water conumption in the indutrial ite. To meet the target et, L Oréal team aim to reduce the amount of water ued for cleaning operation a far a poible without affecting product quality. Thi optimiation i very complex, a each cleaning proce depend on the formula of the manufactured product and the pecific equipment ued. An analyi of potential water aving wa defined in 2013 for each Group plant. It take account of each type of water ue, and make it poible to compare current conumption with the attainable target. The action that will make it poible to achieve thee target have been cheduled over time, and form the Group Water Roadmap. It i monitored on a monthly bai. Tranparency in water reporting: Carbon Dicloure Project water dicloure Since 2010, L Oréal ha been communicating water information tranparently via the CDP water reporting initiative (ee page 226 ), of which it wa one of the Founding Reponder. The CDP i a leading, independent, not-for-profit organiation that promote tranparency in climate change reporting. L Oréal report every year on it water management trategy, it performance and the Group initiative within the framework of the Water Dicloure Project. In 2013, L Oréal contacted 17 upplier choen on the bai of their water impact and their importance for the Group in order to include them in the initiative and obtain their replie to the CDP water upply chain quetionnaire. B) PACKAGING Since 2007 L Oréal ha implemented a Packaging and Environment policy baed on three pillar: Repect, Reduce and Replace. Thi policy i accompanied by a whole et of Ecodeign tool developed and deployed in all the Group Packaging Deign centre. Repect: L Oréal impoe the requirement that it paper and cardboard packaging come from reponibly managed foret. To date, over 98% of paper and cardboard packaging come from certified foret. Furthermore the only label claimed on packaging i that of the FSC (Foret Stewardhip Council) of which L Oréal i a member in France. L Oréal extend thi approach to it upply chain, even further than packaging material. L Oréal encourage it printer to obtain FSC certification for their entire activity cope. To date, 88% of paper printer and 97% of cardboard upplier have obtained thi certification. A material vigilance program, et up many year ago, ha been reinforced with the organization of audit in order to identify and correct any deviation far uptream through clear and wellcontrolled action plan. Reduce: weight and volume reduction in packaging, an integral part of deign, i a major area for progre. Every year, action taken in thi area are recognized through indicator. Between 2008 and the beginning of 2013, 3,600 tonne of packaging material were aved due to action reducing them at ource. A concern the volume of packaging, a there are no international regulation in thi area, L Oréal ha developed an internal procedure which define ratio to be complied with for the variou level of packaging contituting a finihed product. In addition, L Oréal ha et up pecific tool to ait it in carrying out Life Cycle Aement (LCA) and reducing the environmental impact of tranport packaging for packing item and finihed product. 216 REGISTRATION DOCUMENT / L ORÉAL 2013

CORPORATE SOCIAL, ENVIRONMENTAL AND SOCIETAL RESPONSIBILITY ENVIRONMENTAL INFORMATION Replace: aware that non-renewable reource are not utainable, L Oréal look for alternative to the material baed on thee reource. Among the catalogue of option being tudied, one of the olution that L Oréal ha implemented i the ue of recycled material to limit the ue of virgin material. A certain number of it brand include up to 100% recycled platic in their bottle (Kiehl, Garnier, L Oréal Profeionnel, Matrix ), or recycled gla in their jar (Vichy, Biotherm, Garnier). More than 3,100 tonne of virgin material were aved in thi way in 2013. Example: 16% reduction in the platic cap of The Body Shop 250 ml hower gel and lotion bottle; 38% reduction in the bottle cap for the Yve-Saint-Laurent L Homme fragrance. C) RAW MATERIALS Renewable raw material In it Commitment for 2020, L Oréal ha undertaken that 100% of it renewable Raw Material will come from utainable ource (by 2020). 100% of the plant-baed raw material ued by the Group (both new and exiting raw material) are aeed baed on Sutainable Development criteria uch a repect for biodiverity and the contribution to the ocio-economic development in the territorie from which they originate. In 2013, L Oréal conidered all raw material of which the carbon content are motly of plant origin a being plant-baed. To date, 43% of the raw material ued by the L Oréal Group are plant-baed. Thi repreent more than a thouand ingredient from nearly 300 pecie of plant. In 2013, 34% of the Group new raw material are plant-baed and 18% repect Green Chemitry principle. Among the product old in 2013, Lancôme Dreamton, Garnier Moiture Match, Revitalift Laer X3 Crème de Nuit contain at leat one Green Chemitry-baed Raw Material. The ue of certain of the 300 plant pecie (20% in number) which are baed on renewable raw material may involve ecological iue (protection meaure, impact of production on natural environment) or ocietal challenge (working condition, fair remuneration, cultural iue) depending on their geographic origin and their extraction or production method. Thi data i conolidated and managed through: plant rik indicator (ecological, ocial & ocietal rik), etablihed uing the Plant Information Sheet that are prepared and are available for all the plant pecie from which renewable raw material are ourced, and updated on a monthly bai for the mot enitive pecie; Corrective action plan are undertaken, if required, with upplier and with the ytematic upport of independent external third partie, in order to handle the real impact on the territorie of origin of the ingredient. Currently, 80% of the raw material repreenting the Group larget volume of purchae (90%) and derived from pecie identified a enitive have been the ubject of improvement plan or action with the upplier concerned in order to enure utainable ourcing. Fair Trade Recognized by the L Oréal Group a a powerful ocial incluion factor, Fair Trade via reponible ourcing of renewable raw material i a major pillar of the Solidarity Sourcing programme launched in 2010. In 2013, more than 20 fair trade ourced raw material were included in 10% of the product manufactured (excluding The Body Shop). For The Body Shop, over 90% of the product old contain ingredient from the Community Fair Trade programme. In 2013, a total of 20,200 people therefore benefited from fair trade ourced raw material purchae (excluding the CFT). In 2013, for example: 100% of the Group hea butter purchae were made through the Solidarity Sourcing programme, thank to which the women gathering hea nut in Burkina Fao receive in April-May, at the end of the dry eaon when tock of food have been almot ued up, pre-financing for their crop and a purchae price that i higher than the market price; a from the econd half of the year, 100% of oya oil upplie come from fair trade ource in Brazil; 80% of eame oil purchae are from fair trade ource; more than 500 product containing eame oil from fair trade ource were manufactured. In addition, purchae of raw material produced under the BIOSOLIDAIRE label alo increaed in 2013, other than in the SANOFLORE buine, with in particular the ue of juniper berry eential oil in the L Oréal Pari Shampoing Ever Strong range, or lavender eential oil in the Kiehl Clearly Corrective range and the L Oréal Pari Age Perfect Hydra Nutrition range. D) ENERGY L Oréal objective i to reduce greenhoue ga emiion linked to it buine activitie. Variou mean have been put in place internally: improving energy efficiency acro all facilitie, green energy purchae, intallation on certain ite of renewable energy production equipment (Bioma or photovoltaic energy, etc). 6 an evaluation of the upply chain by the Raw Material Sutainability Aement framework which i rolled out on a targeted bai at upplier for the mot enitive raw material with regard to thee iue. REGISTRATION DOCUMENT / L ORÉAL 2013 217

6 ENVIRONMENTAL CORPORATE SOCIAL, ENVIRONMENTAL AND SOCIETAL RESPONSIBILITY INFORMATION TOTAL ENERGY CONSUMPTION 1,000 preventing oil eroion which may reult from rainwater runoff or wind eroion during contruction, inter alia by protecting the arable oil layer which i tored to enable it to be reued; 838 808 815 786 791 798 800 747 761 796 maintaining or retoring exiting natural habitat and biodiverity; 600 400 200 0 142 145,2 144,8 157,6 173,6 169,4 169,4 176,9 188,1 2005 E) TRANSPORT 2006 2007 2008 2009 2010 2011 2012 2013 kwh/1,000 PF 1,000 MWh By 2020, the Group ha undertaken to reduce the CO 2 emiion from tranportation of finihed product in g CO 2 /FP/Km by 20% from a 2011 baeline. Since 2006, L Oréal ha implemented a tranport policy taking into account the environmental apect: thi policy ha been deployed in everal phae: firtly, the aignment entruted to the Group tranport manager wa adjuted to include the principle of reducing tranport CO 2 emiion; then, an environmental performance chapter wa included in the corecard for call to tender with regard to tranport; ince 2009, in collaboration with the ADEME, a calculation tool for tranport CO 2 emiion ha been developed and rolled out progreively to all the Group ite; in 2011 and 2012, the tool and it deployment were ubject to an external audit (three entitie: Latin America Zone, the Conumer Product Diviion in Europe and the Operation Diviion conolidation). maximiing the green pace area on the ite (even in exce of the local regulation) and minimiing the impermeable area or natural pace. During operation of the ite, the Group policy i to take all the preventive meaure decribed in internal document in order to avoid oil or rainwater pollution. Thee meaure are verified at the time of audit and ite viit made by inurer. Finally, at the time of the ale of a ite, a pollution aement i conducted according to an internal procedure. Furthermore, at the time of a project for a new ite, preparation of an overall environmental impact tudy i required immediately during the deign phae (with the objective of minimiing the project negative impact on the environment and health), and thi tudy mut then evolve to adapt the project to the condition impoed by the ite and it environment. At the time of the acquiition of land or building, L Oréal conduct a due diligence review which include, in particular, a review of the environmental apect. 6.3.4. Contribution to adapting to and combating global warming To help addre climate change, L Oréal made a ignificant pledge in 2009: to achieve an abolute reduction of 50% in it direct and indirect carbon emiion between 2005 and 2015. Good progre ha been made and in 2013, carbon emiion have been reduced by 43.1% a compared to 2005. The change in the cope taken into account atifie the GHG Protocol (1) rule. F) GROUND USE L Oréal ha everal requirement relating to ground ue: reducing the impact of contruction on the environment, for example by uing a zone which i already indutrially developed, or an exiting indutrial ite or indutrial wateland; if poible, the ite will have to be on a plot of land located over 30 m away from any water body (ea, pond, lake, river, etc.); the ite will avoid land ituated on natural pace, public green pace, land which i the habitat for endangered or diappearing pecie or any other undeveloped zone (for example: farmland, etc.); rehabilitating polluted ite (indutrial wateland) where development i more difficult due to environmental contamination (real contamination or contamination perceived a uch), thu avoiding contruction on natural or undeveloped land; ENERGY AND GREENHOUSE GASES IN MANUFACTURING The cometic indutry ha a relatively low energy demand a compared with other ector. For example, L Oréal i exempt from the European regulation on carbon emiion quota. However, the L Oréal ite are committed to uing energy efficiently and thereby reducing their energy conumption. Wherever poible, natural ga i preferred to fuel oil (which ha a higher ulphur content). Over the lat few year, everal large renewal energy production project have been deployed on the ite, making it poible to ignificantly reduce CO 2 emiion (Bioma and cogeneration in Belgium, Bioma in Rambouillet and Roye in France, Burgo in Spain, etc, Heat network in Germany and Italy, Photovoltaic energy in China, the United State, Spain, etc, Geothermal energy in Vichy, La Roche Poay, etc.) (1) Greenhoue Ga Protocol international carbon accounting tool. 218 REGISTRATION DOCUMENT / L ORÉAL 2013

CORPORATE SOCIAL, ENVIRONMENTAL AND SOCIETAL RESPONSIBILITY ENVIRONMENTAL INFORMATION DATA RELATING TO CONSUMPTION WITH AN IMPACT ON GLOBAL WARMING 2013 Total Electricity (MWh) 408,389 Ga (MWh) 328,807 Fuel oil (MWh) 6,041 Other (MWh) 52,258 Energy conumption (MWh) 795,495 BUS PROJECT (BETTER UTILITIES FOR SUSTAINABILITY) The BUS project i a Group-wide pilot project run by operation manager, which draw on expertie from acro L Oréal to identify method, technical olution and good practice in cleaning, cooling, air compreion and other factory procee. To date, 11 good practice have been identified, notably to improve energy efficiency; they are accompanied by technical recommendation and rolled out throughout the whole Group. METHODOLOGY FOR THE CALCULATION OF INDIRECT EMISSIONS (SCOPE 2) The methodology ued for calculation of the 2005 reference i baed on the 2003 emiion factor of local electricity upplier when they are available. When thee emiion factor are not available, IEA (International Energy Agency) and egrid (1) emiion factor, available in 2006, correponding to IEA factor for 2003 and EPA (2) (egrid) factor for 2000, are ued. ADAPTATION TO CLIMATE CHANGE L Oréal ha alway conidered climate change a one of the priority challenge. The Group ha made a ignificant pledge to thi by etting ambitiou target, in particular an abolute reduction of 60% in it CO 2 emiion between 2005 and 2020. In practice, the action plan are teered on both a worldwide and local cale: by a whole et of action taken to limit the atmopheric emiion of it activitie. For example, ince 2003, L Oréal ha been a member of the CDP (2013 core: performance A, tranparency 93) and aociated 173 upplier with thi project in 2013; when developing it product, L Oréal take care to limit the ue of reource, both for product and for their packaging. Action to achieve reduction at ource undertaken by the team made it poible to ave nearly 300 tonne of packaging material in 2013, making cumulated aving of 3,600 tonne ince 2008. Through a erie of action taken to fight againt deforetation, L Oréal more particularly enure reponible ourcing for commoditie uch a palm oil, oya and paper and cardboard, known to be major caue of deforetation. L Oréal leverage on internationally recognied certification to guarantee utainable ourcing. In 2013, 98% of upplie of palm oil and palm oil and palm kernel derivative are certified a utainable according to RSPO criteria. In 2013, WWF ranked L Oréal among the bet in it ector for the third time. In 2013, aware of the limit of the current certification model in the fight againt deforetation, L Oréal challenged all it upplier and carried out an exploratory miion in Indoneia in order to identify area for improvement to be implemented with it partner. A for the etablihment of reponible upply chain and the take uch a deforetation, the Group ha developed a et of action decribed hereafter under paragraph Protection of biodiverity. 6.3.5. Protection of biodiverity For many year, L Oréal ha implemented a programme for the protection of biodiverity aimed in priority at: limiting the impact of it ingredient on aquatic ecoytem; enuring reponible ourcing of renewable raw material. REDUCTION OF THE IMPACT OF RAW MATERIALS AND PRODUCTS ON THE ENVIRONMENT AND ON ECOSYSTEMS L Oréal commitment to biodiverity goe back to 1995 with the creation of it firt ecotoxicology laboratory. Anticipating and minimiing the potential impact of the ingredient ued in it product on the natural environment and, in particular, on aquatic ecoytem, i of utmot importance to L Oréal. From the product-conception phae onward, therefore, raw material undergo a robut election proce before entering a formulation. The Group ha developed everal tool and procedure to determine the potential impact on biodiverity of the ingredient ued: development in it ecotoxicology laboratory of innovative method for early environmental evaluation of raw material (e.g. automation of the afety tet on microalgae); launch in 2004 of the aement of it entire raw material portfolio for peritence, bioaccumulation and toxicity criteria. 6 (1) The Emiion & Generation Reource Integrated Databae. (2) Environmental Protection Agency. REGISTRATION DOCUMENT / L ORÉAL 2013 219

6 SOCIETAL CORPORATE SOCIAL, ENVIRONMENTAL AND SOCIETAL RESPONSIBILITY INFORMATION A of the end of 2008, 99% of raw material were aeed in thi way. All new raw material now ytematically have to undergo thi aement before they can be accepted into the ingredient portfolio. ESTABLISHMENT OF RESPONSIBLE SUPPLY CHAINS 100% of new and exiting renewable raw material ued by the Group are the ubject of a trict review with regard to utainability criteria in term of repect for biodiverity. L Oréal trategy conit in etimating the impact of it ourcing, for each of the commoditie: paper, palm oil, wood and oya and reducing the impact by turning to increaingly reponible ourcing. Thi proce i under way for certain raw material like paper, and ha already been carried out for other like palm oil or oya, on the bai of exiting certification model (RSPO for palm oil, FSC or PEFC for paper/cardboard, etc.). In 2013, over 98% of paper and cardboard packaging upplie were certified a utainable according to the FSC or PEFC benchmark. In 2013, 60% of oya oil purchae are certified a utainable. The Group action will aim at olving the problem of availability of ource oberved in 2013 in order to return to a level of 100% in 2014. In 2013, L Oréal wa recognied a one of the bet companie in it category for it utainable ourcing by the Carbon Dicloure Project Foret. Currently, 80% of the raw material repreenting the Group larget volume of purchae (90%) and derived from pecie identified a enitive have been the ubject of improvement plan or action with the upplier concerned in order to enure utainable ourcing. Methodological note ENVIRONMENTAL DATA SCOPE, INDICATORS, REPORTING METHOD AND SYSTEMS Scope of conolidation The environmental indicator et out relate to the factorie and the ditribution centre of the Cometic, Dermatology and The Body Shop branche. The Safety reporting cope i defined in the methodological note at the end of the Human Reource information. The environmental indicator of the factorie and ditribution centre old or cloed during the financial year are reported in full up to the date of their exit from the cope. The factorie or ditribution centre that join the Group have a maximum period of 2 year to connect to the environmental reporting ytem. However, for the 2013 financial year, 93% of the factorie and ditribution centre participated in the reporting ytem. Data pertaining to 8 ite, recently integrated to the Group are not yet included in the publihed data. Out of concern for comparability, 2012 data communicated in the chapter have been updated to cover the whole of the 2013 cope. Indicator The indicator choen are thoe ued in the management of the ite of the Company. They reflect the reult of the Group Environment, Health and Safety (EHS) policy. Data The following method i ued to collect data for the defined cope: The data are collected uing the dedicated intranet-baed ite quality information reporting ytem, available in all countrie in which there i a L Oréal ubidiary. Thi ytem cover everal topic: quality, proce performance, EHS data. The required data are reported every month by the local manager. When the data are compiled, each ite mut validate the accuracy of all the data provided. A proce of continuou improvement of thee ytem i in place. The ytem are reviewed each year, taking into account the Statutory Auditor recommendation and monitoring objective for ubequent year: updating the indicator to be monitored, improving their definition, and improving the communication, monitoring and control proce. 220 REGISTRATION DOCUMENT / L ORÉAL 2013

CORPORATE SOCIAL, ENVIRONMENTAL AND SOCIETAL RESPONSIBILITY SOCIETAL INFORMATION 6.4. SOCIETAL INFORMATION 6.4.1. Territorial, economic and ocial impact of activitie The L Oréal Group i a leading economic player in all the geographical zone where it i etablihed. On thi bai, L Oréal contribute to local employment and thu participate in regional development. Within the framework of the Sharing beauty with all program, L Oréal ha made a commitment in favour of the urrounding communitie, in particular to provide acce to work for 100,000 people from communitie in ocial or financial difficulty by 2020. TERRITORIAL IMPACT OF L ORÉAL IN FRANCE ON EMPLOYMENT AND REGIONAL DEVELOPMENT In France, L Oréal S.A. etablihment are ituated in the Pari region: Pari, Clichy-la-Garenne, St Ouen, Anière, Aulnay-Sou- Boi, Chevilly-Larue, Marly-la-Ville and Mitry-Mory. Over the pat three year on all thee ite in France, L Oréal ha hired 4,749 employee on permanent and fixed-term contract and ha thu contributed to the country development. L Oréal promote partnerhip with the local authoritie with regard to employment. Since 2007, the Le Floréal ite in St-Ouen in France, in partnerhip with Un Emploi dan ma ville, ha made it poible to integrate young people into employment in L Oréal workforce in order to carry out variou tak. Since 2009, the L Oréal Group ha linked up with the Ecole de la 2 e Chance which i aimed at promoting the integration into employment of young people between 18 and 25 year of age who have left the educational ytem without any job or training. They are offered a 9- to 12-month training period during which they are confronted with the corporate world. In 2012, the factory in Orme received 10 young people for work placement of from 2 to 8 week between 2011 and 2012. In September 2012, it tarted up a contract offering profeional experience with a young woman from the chool which will enable her to obtain profeional qualification. In 2013, the Vichy ite, which undertook to apply thi programme in 2011 received 20 beneficiarie. L Oréal will have to pay an amount of 25.7 million for the territorial economic contribution (CET) in repect of the 2013 financial year. REGIONAL DEVELOPMENT AND LOCAL POPULATIONS Due to it many indutrial and adminitrative ite all over the world, the L Oréal Group i trongly involved, in the vicinity of it ite, in the life of the urrounding local communitie. A company committed to demontrating good corporate citizenhip, L Oréal make a contribution to many local project. A a general rule, L Oréal etablihment and it ubidiarie build good relation with the communitie in the area in which they operate, and make every effort to limit the impact of their activitie on the environment and to provide exemplary working condition for their employee. The internal competition Environment, Health & Safety Civic Initiative Prize recognie, by awarding a prize, the commitment, mobiliation and involvement of a ite (factory, ditribution centre or adminitrative ite) with regard to the community in which it operate. Award are preented for the bet local initiative conducted each year in partnerhip with local authoritie, local reident and chool in the field of olidarity, education or the environment. By thee initiative, L Oréal i eager to demontrate it good citizenhip, and to how that it firmly repect the ethical value of the urrounding community. Initiative on a few ite Each L Oréal ite ha implemented initiative in order to anchor itelf on a lating bai in it ocio-economic environment. A few example of thee initiative are decribed below. The Soproco indutrial ite in Saint-Quentin in the Aine department in France ha linked up with Envol, a local ESAT (offering aited employment for diabled worker). The firt initiative tarted in 2012 and required development to be made to atify afety tandard at the ite, which i SEVESOclaified. The joint work of the team from Soproco and thoe from Envol have made it poible to et up a lating partnerhip and integrate worker from Envol into the team at the ite. Thu, between April 2012 and July 2013, around twenty people joined the Company to work on a variety of tak (product orting, packing, order preparation), with more than 2,000 day worked. Twelve employee identified for their kill went to Envol to propoe olution for improvement (e.g.: ground marking, monitoring procedure, hygiene rule, ergonomic). The Mourenx ite in France play an active role in everal profeional aociation and competitivene centre (Lacq Plu, UIC Aquitaine, Aquitaine Chimie Durable, the Aociation Chemtartup, ) and i a partner of local chool with the organiation of educational action with the Cité Scolaire de Mourenx, of ESAT (place offering aited employment for diabled worker), and the aociation Vivre Enemble, where employee were able to take part in the Day for the Diabled. In partnerhip with their pallet upplier, they alo conducted the Protège ma Forêt project in order to plant new tree in a part of the Lande foret which wa devatated by a torm. The US plant at North Little Rock in Arkana ha initiated a project which make it poible both to reduce wate and to arrange for the ditribution of food to the mot underprivileged people. The plant ha developed a partnerhip with the Arkana Hunger Alliance and the Food Bank of Arkana which ha made it poible to create a ditribution and delivery circuit for boxe in order to tranport food. Thee cardboard boxe, derived from plant wate, made it poible to ditribute 24,000 meal in 2013. Thi initiative alo contributed to the 3% reduction in it wate and i in line with the Group Commitment for 2020. 6 REGISTRATION DOCUMENT / L ORÉAL 2013 221

6 SOCIETAL CORPORATE SOCIAL, ENVIRONMENTAL AND SOCIETAL RESPONSIBILITY INFORMATION The Solidarity Sourcing program Becaue a company purchaing power i an economic development and ocietal impact factor, L Oréal ha decided to make it purchae a novel way of promoting ocial incluion. The Group thu created a global olidarity purchaing programme in mid-2010: Solidarity Sourcing. It aim i to help to give people from economically vulnerable communitie durable acce to employment and income. Thi programme i in line with the Group Commitment for 2020, and fit in more particularly with the Sharing our Growth ection of the plan which i aimed at local communitie. In 2013, the global Solidarity Sourcing programme continued to be rolled out within the Group different team. Monitoring and reporting ytem have been put in place via an intranet platform acceible to all employee. The variou purchaing team have now been given objective with regard to thi programme, particularly with repect to the number of beneficiarie. The progre made on the different project i monitored in realtime, making a ditinction between the project that come under the Solidarity Sourcing programme and thoe that are part of The Body Shop Community Fair Trade programme. Thi latter programme now include Solidarity Sourcing project and make it poible for the brand to extend it poitive impact on communitie. In 2013, the Programme offered acce to work to 22,000 people all over the world (excluding The Body Shop purchae). Since 2012, the internal auditor have included the Solidarity Sourcing programme in their audit cope with the aim of continuou improvement. Audit have thu been conducted in China, Switzerland and South Africa. In 2013, over 110 upplier were involved in the programme. The purchae concerned were made from the Group traditional upplier or upplier within it Solidarity Sourcing programme who have deployed olidarity action in their repective field. 6.4.2. Relation with takeholder L Oréal attache crucial importance to the dialogue with it takeholder. Admittedly, thi dialogue provide the opportunity for the Group to hare it trategy, it objective and it achievement but it alo nurture progre, a L Oréal i keen to take into conideration the expectation of civil ociety when building it utainability policy in order to alway go further. Becaue the importance and handling of the challenge related to corporate ocial and ocietal reponibility differ from one country to the next, L Oréal ha et up takeholder forum all over the world in order to promote a dialogue at a local level with regard to both local and global iue. Since 2011, forum have been held in Brazil, China, the USA, the United Kingdom, India and South Africa, for which 754 organiation were contacted and a total of 232 actually participated. In line with thi policy, the Group organied a dialogue forum in Scandinavia in April 2013, inviting the country aociation, NGO and ocietal and environmental expert to come and exchange idea. Twenty or o organiation attended, and took part in fruitful dicuion on all ide with regard to topic uch a animal teting, product afety, women right or environmental challenge. Alo in 2013, L Oréal parked the dialogue in France, in the form of thematic forum which made it poible to enter into contact with over 100 organiation, and to meet with 80 of them. Reponible purchaing, Biodiverity, Diverity and nondicrimination, Reponible Communication, Energy and climate change were all ubject choen for dicuion with French takeholder in order to undertand their expectation, be et challenge and, where applicable, to co-build olution ideby-ide. Certain traditional upplier have moreover applied thi approach in their own upply chain. On October 23 rd, the Group announced it utainability commitment for 2020, which have naturally been built on the back of the expectation of the takeholder it ha met all over the world over the lat few year at the forum mentioned above. The announcement wa followed by a forum held in Pari on reponible conumption, the Re-imagining Conumption Summit, in partnerhip with BSR (Buine for Social Reponibility), Forum for the Future, WBCSD (World Buine Council on Sutainable Development), Futerra and Sutainable Brand; thi ummit, which had 260 participant from other companie, but alo from aociation and the public authoritie, offered the opportunity for reflection on how to make progre together on thi crucial topic for the future of the conumer indutrie: an open, public dialogue to inpire one another. RELATIONS WITH EDUCATIONAL ESTABLISHMENTS IN FRANCE AND ASSOCIATIONS Educational etablihment L Oréal ha alway built cloe partnerhip with primary and econdary chool but alo with univeritie, graduate engineering and buine chool and reearch etablihment. L Oréal offer tudent the poibility of dicovering the Company during their coure by offering them internhip every year and, for over 20 year, through apprenticehip contract and contract offering profeional experience acro all it buinee. In 2013, 1,301 intern joined L Oréal under thi type of internhip cheme. L Oréal alo offer conference, factory viit and cae tudie. 222 REGISTRATION DOCUMENT / L ORÉAL 2013

CORPORATE SOCIAL, ENVIRONMENTAL AND SOCIETAL RESPONSIBILITY SOCIETAL INFORMATION 639 young people on work and training contract (320 apprenticehip contract and 319 contract offering profeional experience) were preent in the Group in France at December 31 t, 2013, 323 of whom worked at L Oréal parent company. Over 87% of the apprentice are preparing for qualification at bac+2 level (equivalent to a 2-year coure after A level ) or higher. Their pa rate i approximately 80%. A qualitative aement of the apprentice training centre i carried out each year. In 2014 (for fical year 2013), L Oréal will have to pay an amount of 4,858,105 in apprenticehip tax. L Oréal upport Capital Fille, an aociation created in 2010 in partnerhip with three French Minitrie: the Minitry of Education, the Minitry of Higher Education and Reearch and the Minitry reponible for Apprenticehip. Capital Fille i a programme for young women from econdary chool that come under city education programme and priority education policie. L Oréal workforce include 120 mentor who provide upport to young women from econdary chool in the department of Seine-Saint-Deni (93), in Orléan and in Cambrai (booting their elf-confidence and their belief in their profeional future, helping them learn more about cientific and technological career, aiting them in chooing their tudie, encouraging apprenticehip and opening them up to the world of Buine). Environmental defence aociation Within the cope of it Commitment by 2020, L Oréal ha undertaken to reduce it greenhoue ga emiion, it water conumption and it wate per unit produced by 60% by 2020. L Oréal actively contribute to environmental protection through it commitment in aociation or ocietie at national level (e.g. Eco-Emballage, the French eco-packaging organiation), European level (e.g. Foret Footprint Dicloure project in the United Kingdom) and international level (e.g. the World Buine Council for Sutainable Development). L Oréal i alo a member of the Conumer Good Forum in which the Company ha committed, alongide other companie, to fight againt Deforetation. L Oréal i alo involved in a large number of working group, which play a crucial role in the exchange of expertie and advice. L ORÉAL PHILANTHROPY IN 2013 L Oréal ha alway been committed to worthy caue and taken an interet in it urrounding communitie. In the 1990, the Group created with Uneco the firt programme to upport women in their cientific career called For Women in Science, an initiative that i now implemented throughout the world. Since that time, L Oréal ha never topped developing philanthropy project all over the world, through it ubidiarie, it brand and it Foundation, the creation of which in 2007 howed the Group intention to go one tep further and make commitment to good corporate citizenhip a real trategy in the Company. L Oréal commitment are aimed at promoting cience and cientific career for women, retoring people phyical appearance (a major factor in etablihing ocial relation) or giving everyone a future thank to beauty, all reflecting one ambition: to give meaning to the beauty ector. The L Oréal Foundation Created in 2007, the L Oréal Foundation develop the Group major global programme, which are rolled out in all the countrie in which L Oréal i preent. It develop programme in two main area which reflect the Group value and it buinee: cience and beauty with it dimenion of olidarity. in the field of cience, L Oréal promote cientific education and the participation of women in cientific career, by recogniing the excellence of well-known women reearcher and encouraging young girl to follow cientific vocation; in the field of beauty, L Oréal upport programme which care for appearance to retore confidence to vulnerable people and help them to recover their elf-eteem and re-enter a ocial life. The Foundation alo develop a major profeional inertion programme aimed at offering training in beauty profeion for ocially fragile people. Governance Under the chairmanhip of L Oréal Chairman, the L Oréal Foundation Board of Director ha 12 member, made up of even peronalitie from L Oréal and five from outide the Company, choen for their expertie in the Foundation area of intervention. The main programme upported by the Foundation FOR WOMEN IN SCIENCE To fight againt the lack of repreentation of women in the cientific world, L Oréal created the For Women in Science programme with UNESCO in 1998, which celebrated 15 year of exitence in 2013. Thi programme aim to encourage, recognie and accompany women cientit throughout their entire career, through award and reearch fellowhip in 196 countrie. Some 250 women are thu rewarded every year, making a total of nearly 1,750 women to date, including Eliabeth Blackburn and Ada Yonath, who have ince become Nobel Prize winner in 2009. 49 L Oréal ubidiarie have now developed regional or national fellowhip for promiing young women cientit in their countrie. BEAUTY FROM THE HEART Appearance and taking care of oneelf are intimately linked with the identity of people and change in culture. Indeed, beauty ritual are deeply rooted in the country heritage. Thu, when omeone appearance i damaged by illne or precariou living condition, relationhip with other and with their own community may alo be impaired. Beauty and ocial relationhip are therefore intertwined. Thi i the reaon for the commitment made by the L Oréal Foundation to the variou hopital or welfare tructure for ocio-aethetic programme intended for cancer patient, or thoe uffering from anorexia or living in highly precariou ocial condition. In 2013, more than 2,800 beneficiarie received ocio-aethetic care, particularly women with cancer, people with precariou living condition or young people with eriou pychological problem or eating diorder. 6 REGISTRATION DOCUMENT / L ORÉAL 2013 223

6 SOCIETAL CORPORATE SOCIAL, ENVIRONMENTAL AND SOCIETAL RESPONSIBILITY INFORMATION Furthermore, due to thi contant deire to link beauty in it dimenion of olidarity with profeional inertion, the L Oréal Foundation donated nearly 240,000 peronal hygiene product to uer from two charitable organiation (the Reto du cœur and the Samu ocial) for the 2013/2014 winter campaign. Finally, the L Oréal Foundation alo upported Médecin du Monde aociation recontructive urgery operation ( Opération Sourire ). There are indeed dramatic cae where children or women are outcat from ociety due to an appearance difigured by illne or accident. Alongide Médecin du Monde, the L Oréal Foundation help to retore the lot dignity of thee women and children o that they are accepted back into their communitie. In 2013, 1,224 patient were operated on by Médecin du Monde within the cope of the Opération Sourire programme. BEAUTY FOR A BETTER LIFE Expertie and profeion in the Beauty ector involve a human relationhip, a dialogue with other and a ene of ervice. They are alo profeion involving paion, creation and imagination, all aet for the people in thee job, and help to build a ocial relationhip. Within thi framework, the L Oréal Foundation ha launched an education programme to enable the mot vulnerable population to return to ociety: Beauty for a Better Life. Initiated and deployed throughout the world by the L Oréal Foundation, the purpoe of thi programme i to ait ocially fragile people to recover their elf-eteem and to bounce back through free high-quality training in the beauty profeion (hairdreer, makeup pecialit, aethetician). The beneficiarie are motly women from underprivileged environment: ome of them are unemployed, in precariou living condition or human trafficking victim, other have dropped out of chool or left home and other again have been victim of dometic violence or internal conflict in their country. Beauty for a Better Life develop a made-to-meaure training programme offering a high level of uperviion by pecialit teacher with a limited number of pupil, and both theoretical and practical training in a real beauty alon pecially adapted for the purpoe. In each country in which the programme i developed, L Oréal work with a local partner (NGO, aociation) which ha perfect knowledge of the pecific context in the country concerned and i thu able to identify potential beneficiarie. Thee partner are recognied a expert in the field of ocial aitance and job training. The programme ha now been rolled out in around 20 countrie all over the world: from Latin America to Aia, from Europe to the Middle Eat. Every year, the Beauty for a Better Life programme ait over 1,000 ocially or economically vulnerable people. HAIRDRESSERS AGAINST AIDS For eleven year, L Oréal and Uneco have joined force to fight againt HIV. Thi programme for prevention of the infection centre round profeional hairdreer, whoe pecial relationhip with their cutomer and ability to communicate make them very effective in paing on information and raiing awarene of HIV iue. More than 1.5 million hairdreer have been trained ince the tart of the programme that ha been rolled out in cloe to 40 countrie. Local initiative on all continent In addition to the major global programme initiated by the Foundation and rolled out acro the world, each and every L Oréal entity i encouraged to take local action in relation with the ituation in their particular countrie. In 2013, L Oréal thu upported everal hundred of project throughout the world, involving action in the field of olidarity, education, culture or the environment. A few example: in the United State, at the North Little Rock plant alone, nearly 20,000 product were ditributed to variou local aociation upporting children or people with cancer or working in the field of AIDS prevention; Greece provided financial upport to the NGO Houe of heart which help girl between 6 month and 18 year of age where their family unit ha failed and they are unable to live at home; Autria which ait children of diadvantaged immigrant by giving them grant, in partnerhip with the Crepo Foundation. 6.4.3. Subcontracting with upplier HOW THE COMPANY PROMOTES THE PROVISIONS OF THE FUNDAMENTAL CONVENTIONS OF THE ILO TO ITS SUBCONTRACTORS AND ENSURES THAT ITS SUBSIDIARIES COMPLY WITH THESE FUNDAMENTAL CONVENTIONS L Oréal work with thouand of upplier throughout the world to cover it need in term of packaging, raw material, ubcontracting, production equipment, promotional and advertiing item, and non-production-related product and ervice (commonly referred to a indirect). The global volume of purchae directly related to production (packaging, raw material and ubcontracting) repreented 3.69 billion in 2013 (Cometic cope, excluding The Body Shop). L Oréal, which ha igned the United Nation Global Compact, make ure that Human Right are repected throughout it logitic chain. Thu, our Purchaing policy i aimed at building a balanced, long-lating relationhip with ubcontractor and upplier with repect for ocial and environmental iue. L Oréal Buy & Care program, adhered to by all the Group buyer, thu contribute to haring good Reponible Purchaing practice and the Company value and tandard with it upplier. 224 REGISTRATION DOCUMENT / L ORÉAL 2013

CORPORATE SOCIAL, ENVIRONMENTAL AND SOCIETAL RESPONSIBILITY SOCIETAL INFORMATION Within the framework of thi program, upplier and ubcontractor are aked to comply with the Group general term of purchae, which require them to comply with the Fundamental Convention of the International Labour Organiation a well a local legilation, in particular with regard to minimum wage, working time and health and afety. L Oréal actively eek to work with upplier who hare it ethical value and commitment and therefore attache importance to providing thee upplier with upport during the referencing proce. For indutrial purchae, dedicated purchaing team have the tak of identifying new upplier and integrating them in light of the Group expectation and it trategy via the welcome on board (WOB) upplier referencing proce. Thi make it poible to make ure that the upplier i of real interet, provide it with all the information, document and contact required for it to undertand the expectation and procee at L Oréal, and finally to obtain the upplier commitment to L Oréal value that are hared in thi manner. Following on from thi commitment, L Oréal Buy & Care programme conit, ince 2002, of a ection aimed at an audit of thi compliance with ocial legilation enabling it to enure that it upplier comply with the applicable law, Human Right and labour law, and enure afety for their team and health and hygiene in the workplace. Thu, ubcontractor, wherever they are baed in the world, and upplier of raw material, packaging, production equipment and POS advertiing/promotional item and material located in countrie where there i conidered to be a rik are mandatorily ubject to a ocial audit. To prepare the rik map for the countrie preenting rik, L Oréal ue the MaplecroftTM indexe. The ocial audit are carried out on behalf of L Oréal by independent external ervice provider. The initial audit are financed by L Oréal and the follow-up audit are paid for by the upplier. The audit cover the following 10 chapter: child labour; forced labour; the environment, health and hygiene and afety; compliance with the law relating to trade union; L Oréal ocial audit i baed to a great extent on the internationally recognied SA 8000 tandard, but doe comprie a few exception, particularly with regard to the minimum age for child labour. In thi repect, the Group ha choen to et the compulory minimum age at 16 for all employee working for it upplier, a higher age limit than that required by the Fundamental Convention of the International Labour Organiation (ILO). With regard to the employment of young worker, upplier and ubcontractor may requet waiver from the Group Purchaing Director for the ue of employee under the age of 16 upon preentation of a complete file (chooling, type of contract, working condition, type of work). Puruant to the Supplier/ Subcontractor and Child Labour policy, formally laid down in 2011, waiver of thi kind are only poible for apprenticehip programme or for children carrying out light work if thi work doe not affect their health and afety or their regular attendance at chool, where the local law allow it and when the upplier/ ubcontractor ha appointed an internal tutor for the children. Since 2006 when L Oréal et up a reporting tool, it ha conducted ocial audit at over 3,900 upplier ite. 800 audit were carried out in 2013, making 5,295 audit of thi kind ince 2006. The ocial audit conducted have enabled L Oréal to cover 85% of the portfolio of upplier ubject to audit acro the world. In 2013, 50% of thee audit were carried out in Aia. In 2013, there were major intance of non-compliance at 60% of upplier ite that were audited for the firt time (initial audit). During follow-up audit, there i no longer any major non-compliance at 56% of the upplier who were initially noncompliant. Added to thi are the ocial audit conducted by The Body Shop (TBS). Indeed, ince it integration into the L Oréal Group in 2006, TBS ha purued it longtanding programme of ocial audit. TBS i one of the founding member of the Ethical Trading Initiative (ETI) and ha adopted their Supplier Code of Conduct. The Body Shop ha developed a programme enabling them to upport their commitment to reponible ourcing. One of the activitie under thi programme i control of working condition, defined in the Supplier Code of Conduct, on the production ite of their upplier (67 audit were conducted in 2013). 6 non-dicrimination; diciplinary practice; exual harament or a hotile working environment; due payment of wage/compenation and benefit; working time; SUPPLIERS AND MEASURES TO COMBAT GLOBAL WARMING: WORKING WITH THE GROUP S SUPPLIERS ON ENVIRONMENTAL ISSUES L Oréal conider that the CO 2 emiion of it upplier are part of it wider environmental footprint and that they mut unite their effort to ucceed in reducing them. relation with ubcontractor. Since January 2013, the ocial audit include quetion concerning the environment and in particular compliance with regulation. A member of the Carbon Dicloure Project ( CDP ) ince 2003 and the CDP Supply Chain ince 2007, L Oréal continue to encourage it upplier to meaure and reduce their CO 2 emiion. REGISTRATION DOCUMENT / L ORÉAL 2013 225

6 SOCIETAL CORPORATE SOCIAL, ENVIRONMENTAL AND SOCIETAL RESPONSIBILITY INFORMATION In 2012, L Oréal tepped up it trategy with regard to the CDP: it i no longer only the environmental expert who dicu thee iue with upplier, buyer trained in the CDP have now become ambaador of thi approach. Thi method of functioning made it poible to addre the CDP Supply Chain with upplier at trategic meeting ( Buine Review ), to launch 156 invitation in 2012 a compared with 55 in 2011 and mobilie team to convince upplier that meaure aimed at reducing greenhoue ga emiion from now on play an inevitable part of a company global performance. Going further in thi proce, 173 upplier received invitation in 2013. Thee upplier were elected in 6 field of purchae (raw material, packaging item, production equipment, ubcontracting, POS advertiing/promotional item and material, indirect upplie), everywhere in the world. They conit of trategic upplier, upplier in CO2-generating indutrie, major indutrial group but alo mall and mediumized enterprie. In order to ae upplier environmental performance, a Scorecard ha been developed jointly with the CDP, ummariing upplier anwer to the CDP to make them acceible for purchaing team. In thi way, in 2013, 152 upplier (a againt 133 in 2012), out of the 173 upplier who were invited, reponded poitively to L Oréal invitation to alo join the CDP. Thi number i higher than the average (2,868 participant for more than 5,650 upplier invited) for member of the CDP. The high repone rate obtained due to the joint commitment of the purchaing and environmental team ha led to the CDP recogniing L Oréal a one of the companie that i the mot committed to thi area. L Oréal end reult with comment and opportunitie for improvement to upplier who have participated. The average of upplier reult for 2013 ha improved coniderably: 63 C rating a againt 59 D rating in 2012 (1). Following on from L Oréal work with the CDP and with it upplier on the reduction of it environmental footprint, the Group participated in 2013 in the CDP Water Supply Chain pilot programme. 15 of the 17 upplier invited by L Oréal agreed to take part in thi new programme aimed at meauring and reducing the water footprint. Beyond promoting iue with regard to Reponible Purchaing, and the management of the ocial rik concerning working condition at our upplier, the Buy & Care alo aim at promoting ocial incluion through work. 6.4.4. Fair Buine practice ACTIONS TAKEN TO PREVENT ALL FORMS OF CORRUPTION Commitment L Oréal i a ignatory of the United Nation Global Compact, upport the fight againt corruption, abide by the United Nation Anti-Corruption Convention of October 31 t, 2003 and undertake to repect all applicable law, including anti-corruption law. Thi commitment i upported at the highet level of the Company by L Oréal Chairman and Chief Executive Officer who renew L Oréal commitment to the United Nation Global Compact every year. L Oréal i a member of the International Chamber of Commerce Anti-Corruption Commiion and a member of Tranparency International France. Policy L Oréal Code of Buine Ethic publicly tate a zero-tolerance policy on corruption. It applie to all employee, executive officer and director, member of the Group Executive and Management Committee and thoe of it ubidiarie worldwide. Thi document ha been tranlated into 35 language and each employee receive a copy. In 2013, a pecific anti-corruption guide wa rolled out throughout the Group. Thi guide, which underline the need both to repect local practice and regulation and alo comply with the Group ethical commitment, addree relation with each of L Oréal takeholder and in particular public authoritie and intermediarie. Thi practical Guide i intended to pecify the Group tandard and to ait employee to handle ituation which they may encounter in the performance of their dutie. It reaffirm L Oréal corruption prevention policy which wa approved by the Chairman and Chief Executive Officer and the Executive Committee and preented to the Board of Director. Thi policy poted online on L Oréal webite (www.loreal.com) retate the following principle: the zero-tolerance policy on corruption; the prohibition on facilitation payment; the prohibition on all contribution to political partie or politician with the aim of obtaining a commercial advantage; the prohibition on giving and accepting gift and/or invitation that might influence or be perceived a influencing a buine relationhip; (1) For further information on the CDP upply chain and the rating methodology, viit the following webite: http://www.cdp.net/en-us/programme/page/cdp-supply-chain.apx#member http://www.cdp.net/en-us/reult/page/leaderhip-index.apx 226 REGISTRATION DOCUMENT / L ORÉAL 2013

CORPORATE SOCIAL, ENVIRONMENTAL AND SOCIETAL RESPONSIBILITY SOCIETAL INFORMATION communication of the commitment to preventing corruption to our buine partner; compliance with thee commitment by intermediarie or agent repreenting L Oréal, particularly in countrie where there i a high corruption rik. Other policie uch a The Way We Buy, a practical and ethical guide on the relationhip between upplier and all employee involved in purchaing deciion, alo addre thee iue. Thi document currently exit in 12 language. Implementation The corruption prevention policy i revied periodically by the Executive Committee and preented to the Board of Director. The Director of the Rik Management and Compliance Department i in charge of developing the anti-corruption ytem. Country Manager or, for Corporate or Zone taff, the member of the Group Executive Committee to whom they report, are reponible for the proper deployment of the corruption prevention programme and are guarantor of compliance with the anti-corruption policy. Employee may, in particular, go to their management, their Legal Director, their Adminitrative & Financial Director, or their Ethic Correpondent if they have quetion about the repect of thi commitment. To enure that no concern regarding corruption prevention remain unanwered, employee and other takeholder may contact the Chief Ethic Officer, to whom authority i delegated by the Chairman. All concern raied are thoroughly examined, o that appropriate meaure can be taken, where applicable. In a pirit of tranparency and in order to exchange idea, we regularly communicate, internally and externally, on the implementation of our anti-corruption policy and programme. The rik of corruption i included in the Group-level rik aement: a tool enable Country Manager to ae their poible local ethical rik (including corruption) and to take the neceary corrective action. L Oréal commitment i upported by Human Reource procedure. Thu, a Obtain reult with integrity competence i now included in the annual appraial ytem for all our employee. Within the framework of L Oréal Open Talk policy, employee are encouraged to expre any concern they have and a dedicated webite provide a ecure mechanim for aking quetion or raiing concern directly with the Group Senior Vice Preident & Chief Ethic Officer who ha acce to all the document and information concerning the Group activitie and can rely on the Group team and reource to conduct hi aignment uccefully. Any concern raied in good faith are examined in detail and appropriate meaure are taken, where applicable. L Oréal guarantee that no reprial will be taken againt employee who have reported their concern in good faith. The Group Internal Control ytem provide for control procedure for operational activitie and in particular with regard to eparation of tak. L Oréal Internal Audit team are particularly vigilant in thi repect. Corruption rik are ytematically reviewed during internal audit aignment, through individual interview with regard to Ethic. Thee interview include quetion pecifically concerning corruption and are conducted eparately with the Country Manager and the Adminitrative and Financial Director. They give rie to an individual report reviewed and igned by thee latter peron. Within the cope of the legal due diligence review carried out prior to acquiition, the Group Legal Department include an ethic quetionnaire prepared by the Ethic Department. The anwer to thi quetionnaire are intended to identify, within the internal control ytem exiting in the target company, whether corruption rik prevention ha been taken into account. L Oréal want to hare it anti-corruption commitment with it buine partner and compliance with the law i included in the Group general term of purchae. L Oréal reerve the right to put an end to any relationhip with buine partner who fail to comply with anti-corruption law. Meaure adopted with regard to conumer health and afety POLICY Protection of conumer afety i one of L Oréal abolute prioritie: Safety aement i at the centre of development of new product and a prerequiite before any product i launched on the market. The ame afety requirement are applied throughout the world o that conumer from all over the world have acce to the ame quality of product. The Group ha et up an International Product Safety Aement Department coniting of a team of nearly 100 employee acro 3 continent. IMPLEMENTATION The L Oréal Group ha et up a proce to enure that all product developed, whatever the geographical location of the laboratory in charge of the project, are ubject to a rigorou afety evaluation. Thu, the evaluation by L Oréal International Safety Aement Department, baed on a multidiciplinary cientific approach, are carried out at all tage of the product life cycle. Thi approach alo enable L Oréal to meet the afety 6 REGISTRATION DOCUMENT / L ORÉAL 2013 227

6 SOCIETAL CORPORATE SOCIAL, ENVIRONMENTAL AND SOCIETAL RESPONSIBILITY INFORMATION requirement of the national regulation of all the countrie in which the Group product are put on ale. The product afety evaluation i baed on the evaluation of each ingredient and finihed product on the bai of exiting afety data and the latet medical and cientific knowledge. If neceary, L Oréal conduct additional afety tudie in qualified laboratorie all over the world. The reult of thee tudie are interpreted by experienced cientit who are pecially trained in afety aement with regard to cometic ingredient and product. A afety certificate igned by a afety aement expert wa iued for each product launched on the market. Since July 11 th, 2013, the date when European Regulation EC 1223/2009 came into full application, thi afety certificate ha been replaced by a cometic product afety report containing all the neceary information and documenting the procedure that have been taken to enure the afety of the product launched. Furthermore, L Oréal ethic principle, rooted in both cientific rigour and reponivene to ocietal concern, lead to a pre-emptive approach whereby formulation are evolved by removing and/or replacing ubtance that are the ubject of concern. L Oréal added value, in term of the afety aement of it ingredient and finihed product, lie in it invetment for over twenty year in the development of predictive method and tiue engineering. For many year, L Oréal ha thu been inveting in cience and technology to create new evaluation tool which are ued every day by afety aeor. L Oréal alo work cloely with all the international takeholder involved in relevant indutrie in order to progre the development of alternative multidiciplinary olution in the field of afety aement. Thi longtanding commitment ha enabled the Group to repond with erenity to the latet regulatory requirement which prohibit the ale in Europe of cometic product teted on laboratory animal ince March 11 th, 2013. L Oréal ha no longer conducted animal teting anywhere in the world ince March 2013 and doe not delegate reponibility to do o to anyone ele. In fact, L Oréal product continually evolve a and when technological innovation occur, but with the contant deire to guarantee the highet level of afety for both conumer and profeional. 6.4.5. Other action taken in favour of Human Right L Oréal became a ignatory of the United Nation Global Compact in 2003, and i committed to repecting and promoting Human Right. Thi include, in particular, the Fundamental Convention of the International Labour Organiation (ee the ocial information on page 210 ). L Oréal Chairman and Chief Executive Officer ha given the Senior Vice Preident, Chief Ethic Officer, the miion of overeeing the repect of Human Right. The Chief Ethic Officer report regularly to the Chairman and Chief Executive Officer. He inform the Board of Director and the Executive Committee. Country Manager are in charge of implementing the Human Right policy in their country. The Group Chief Ethic Officer meet ytematically with each Country Manager in order to raie their awarene in particular on Human Right iue and corruption prevention. L Oréal et out it Human Right policy in document uch a The L Oréal Spirit or the Code of Buine Ethic. In the A an Employer ection of The L Oréal Spirit, the Group decribe it principal commitment to it taff, namely in term of diverity. It commitment on the abolition of child labour and forced labour are et out in the A a Reponible Corporate Citizen ection of that document. Furthermore, everal chapter of the Code of Buine Ethic are devoted to the practical implementation of repect for Human Right: health, afety and ecurity, diverity, harament and bullying, exual harament, privacy, contribution to the community, and upplier election and fair treatment of upplier. All new employee receive a copy of the Code of Buine Ethic, which i available in 35 language (43 verion) and in Braille in French and Englih. Thi Code of Buine Ethic i available on the www.loreal.com webite. Training eion and communication on Ethic alo cover Human Right iue. Every year, L Oréal organie an Ethic Day in order to enure ongoing internal communication on thi topic. In 2013, all the Group employee were able to ak L Oréal Chairman and Chief Executive Officer quetion which he anwered during a live webchat. All Country Manager alo had the opportunity to dicu ethic with their employee. More than half the Group employee took part in thi dialogue and over 3,200 quetion were aked worldwide. An e-learning coure on ethic wa deployed in all countrie in October 2013. At Corporate level, the Ethic Department led 23 training eion for 669 employee, repreenting 1,474 hour of training. Furthermore, in 2013, 92% of the Group countrie included ubject related to Human Right (health, afety and ecurity, diverity, harament and bullying, exual harament, privacy, contribution to the community, and upplier election and fair treatment of upplier) in their local training programme.100% of the countrie communicated on at leat one of thee topic. Country Reporting Ethic, an annual reporting ytem on ethical iue, cover all the ubject addreed in the Code of Buine Ethic. Thi information namely help to ae the Group performance in term of the application of Human Right. Within the cope of the legal due diligence review carried out prior to propoed acquiition, the Group Legal Department include an ethic and Human Right quetionnaire prepared by the Ethic Department. The anwer to thi quetionnaire are intended to identify, within the internal control ytem exiting in the target company, whether the rik of non-compliance with 228 REGISTRATION DOCUMENT / L ORÉAL 2013

CORPORATE SOCIAL, ENVIRONMENTAL AND SOCIETAL RESPONSIBILITY SOCIETAL INFORMATION Human Right (abolition of child labour and forced labour, etc.) have been taken into account. An ethic rik aement and analyi tool enable Country Manager to ae their poible ethic rik (including in the field of Human Right) at the level of their countrie and to take the neceary corrective action. The analyi with regard to upplier and ubcontractor rik i carried out by the Purchaing Department, namely through ocial audit (ee ection on Subcontracting with upplier - page 224 et eq.). L Oréal Open Talk policy enable employee to raie concern they may have directly with the Chief Ethic Officer, including thoe relating to Human Right, namely via a ecure webite. Thi ite i acceible in 21 language. All allegation are examined in detail and appropriate meaure are taken, where applicable, in the event of non-compliance with the Human Right policy. Methodological note SOCIETAL COMMITMENT DATA SCOPE, INDICATORS, REPORTING METHOD AND SYSTEMS Scope of conolidation The cope cover, depending on the indicator, L Oréal parent company, France or the Group. The pecific cope i pecified for each indicator. Indicator The indicator choen are thoe within the cope of the Grenelle II regulation, with the aim of data comparability. Data The following method are ued to collect data for the defined cope: a certain amount of data particularly concerning Ethic i collected by the Ethic Department uing the Country reporting intranet ytem, alo ued to collect Human Reource data (ee, in thi repect, the Human Reource data reporting methodology decribed on page 211 ); the other data are collected from the department concerned (Communication and Sutainable Development Department, Human Reource Department, Purchaing Department, International Product Safety Aement Department and the Rik Management and Compliance Department). 6 REGISTRATION DOCUMENT / L ORÉAL 2013 229

6 TABLE CORPORATE SOCIAL, ENVIRONMENTAL AND SOCIETAL RESPONSIBILITY OF CONCORDANCE WITH THE REPORTING STANDARDS WITH REGARD TO SOCIAL, ENVIRONMENTAL AND SOCIETAL MATTERS 6.5. TABLE OF CONCORDANCE IN RESPECT OF SOCIAL, ENVIRONMENTAL AND SOCIETAL MATTERS Page Grenelle II French Decree of April 24 th, 2012 GRI 196, 211, 220, 229 232-234 PRINCIPLES Scope of reporting G4-17 to 23 Comply or explain Principe Data comparability G4-32 Reference to tandard G4-32 Attetation with regard to the exhautivene of information G4-32 Opinion with regard to the true and fair view given by the information G4-32 SOCIAL INFORMATION 200 Employment Total workforce G4-10 Ditribution of employee by gender, by age and by geographic zone G4-10 Recruitment G4- LA1 Dimial G4- LA1 Remuneration and trend G4- LA13 206 Work organiation Organiation of working time G4- LA Abenteeim G4- LA6 206 Labour relation Organiation of the dialogue between employee and management G4- LA4 Situation with regard to collective agreement G4- LA4 207 Health & Safety Health and afety condition at work G4- LA6 to 8 Statu report on agreement igned with trade union organiation with regard to health and afety at work G4- LA8 Frequency and everity of accident at work G4- LA6 Occupational dieae G4- LA7 209 Training Training policy implemented LA11 Total number of hour of training LA10 209 Equality of treatment Meaure taken to promote gender equality G4- LA10 Meaure taken in favour of employment and profeional inertion of the diabled G4- LA12 Policy to combat dicrimination G4- LA12, G4-HR3 210 Promotion & compliance with the proviion of the ILO convention Compliance with freedom of aociation and the right to collective bargaining G4-HR4; G4-LA4 Elimination of dicrimination in repect of employment and occupation G4-HR3; G4-LA13 Elimination of forced or compulory labour G4-HR6 Effective abolition of child labour G4-HR5 Global Compact #1 and 2 #3 to 8 #3 to 8 #3 to 8 # 3 to 8 #3 à 8 #3 à 8 #3 à 8 230 REGISTRATION DOCUMENT / L ORÉAL 2013

CORPORATE SOCIAL, ENVIRONMENTAL AND SOCIETAL RESPONSIBILITY TABLE OF CONCORDANCE WITH THE REPORTING STANDARDS WITH REGARD TO SOCIAL, ENVIRONMENTAL AND SOCIETAL MATTERS Page Grenelle II French Decree of April 24 th, 2012 GRI ENVIRONMENTAL INFORMATION 212 General environmental policy Organiation of the Company to take into account environmental iue and, where applicable, environmental evaluation or certification meaure Training action and proviion of information to employee with regard to environmental protection The mean devoted to prevention of environmental rik and pollution The amount of the proviion and cover with regard to environmental rik, on condition that thi information i not liable to caue eriou harm to the Company in a lawuit in proce 214 Pollution and wate management Meaure for prevention or reduction of, or to remedy, emiion into the air, water and oil eriouly G4-EN31 G4-EN31 and G4-EC2 affecting the environment G4-EN22 to 26 Wate prevention, recycling and elimination meaure G4-EN23 Taking into account noie pollution and any other form of pollution pecific to an activity 216 Sutainable ue of reource Water conumption and water upply depending on local contraint G4-EN8 Raw material conumption and meaure taken to improve efficiency in their ue G4-EN1, G4-EN27 Energy conumption, meaure taken to improve energy efficiency and ue of renewable energie G4-EN3 to EN7 Soil ue 218 Climate change Greenhoue ga emiion Adaptation to the conequence of climate change 219 Protection of biodiverity Global Compact #9 to 11 #9 to 11 #9 to 11 #9 to 11 EN16, EN17, EN 18, EN19, EN20 #9 to 11 EN18, EC2 Meaure taken to preerve or develop biodiverity G4-EN11 to EN 14 #9 to 11 SOCIETAL INFORMATION 221 Territorial, economic and ocial impact of the Company activitie On employment and regional development G4- EC7 and G4-EC8 #16 to 18 G4- EC1, G4-EC 5 and 21 On neighbouring or local population and 6 222 Relation maintained with people or organiation who are takeholder of the Company activitie Particularly, aociation promoting profeional inertion, educational etablihment, environmental defence aociation, conumer aociation and neighbouring population #2 and 16 The condition for the dialogue with thee people or organiation G4-24 to 27 to 18 Partnerhip or philanthropy action 224 Subcontracting and upplier G4-EC9, G4-HR4, 5, Taking into account ocial and environmental iue in purchaing policy 6, 8, 10 The importance of ubcontracting and taking their ocial and environmental reponibility into account G4-EC9, G4-HR4, 5, #2 to 11 in relation with upplier and ubcontractor 6, 8, 10 226 Fair practice The action taken to prevent corruption G4-SO3 to 5 The meaure taken in favour of conumer health and afety G4-PR1; G4-PR2 #12 to 14 228 Other action taken in favour of Human Right G4-HR #3 to 5 6 REGISTRATION DOCUMENT / L ORÉAL 2013 231

6 REPORT CORPORATE SOCIAL, ENVIRONMENTAL AND SOCIETAL RESPONSIBILITY BY THE STATUTORY AUDITORS, DESIGNATED AS INDEPENDENT THIRD PARTIES, ON THE CONSOLIDATED SOCIAL, ENVIRONMENTAL AND SOCIETAL INFORMATION INCLUDED IN THE MANAGEMENT REPORT 6.6. REPORT OF THE STATUTORY AUDITORS, DESIGNATED INDEPENDENT THIRD-PARTY ENTITIES, ON THE REVIEW OF ENVIRONMENTAL, SOCIAL AND SOCIETAL INFORMATION PUBLISHED IN THE GROUP MANAGEMENT REPORT Thi i a free tranlation into Englih of the original report iued in French and i provided olely for the convenience of Englih peaking reader. Thi report hould be read in conjunction with, and contrued in accordance with, French law and profeional auditing tandard applicable in France. In our capacity a Statutory Auditor of L Oréal, and deignated a independent third-party entitie, whoe certification requet ha been approved by the French National Accreditation Body (COFRAC), we hereby preent you with our report on the ocial, environmental and ocietal information preented in the management report prepared for the year ended December 31 t, 2013 (hereinafter the CSR Information ), puruant to Article L.225-102-1 of the French Commercial Code (Code de commerce). Reponibility of the company The Board of Director of L Oréal i reponible for preparing a management report including the CSR Information provided by Article R. 225-105-1 of the French Commercial Code, prepared in accordance with the reporting criteria ued by L Oréal (the Reporting Criteria ), ome of which are preented throughout the management report and which are available on requet from the Human Relation & Environmental executive management team. Independence and quality control Our independence i defined by regulatory text, the profeion Code of Ethic a well a by the proviion et forth in Article L. 822-11 of the French Commercial Code. Furthermore, we have et up a quality control ytem that include the documented policie and procedure deigned to enure compliance with rule of ethic, profeional tandard and the applicable legal text and regulation. Reponibility of the Statutory Auditor Baed on our work, our reponibility i: to attet that the required CSR Information i preented in the management report or, in the event of omiion, i explained puruant to the third paragraph of Article R. 225-105 of the French Commercial Code (Attetation of completene of the CSR information); to expre limited aurance on the fact that, taken a a whole, the CSR Information i preented fairly, in all material apect, in accordance with the adopted Reporting Criteria (Formed concluion on the fair preentation of the CSR Information). Our work wa carried out by a team of fourteen people between November 2013 and February 2014, i.e. a period of around thirteen week. To ait u in conducting our work, we referred to our corporate reponibility expert. We conducted the following procedure in accordance with profeional tandard applicable in France, with the order of May 13 th, 2013 determining the methodology according to which the independent third party entity conduct it aignment and, with regard to the formed concluion on the fair preentation of the Information, with the ISAE (International Standard on Aurance Engagement) 3000 (1). 1. ATTESTATION OF COMPLETENESS OF THE CSR INFORMATION Baed on interview with management, we familiarized ourelve with the Group utainable development trategy, with regard to the ocial and environmental impact of the company buine and it ocietal commitment and, where appropriate, any reulting action or program. We have compared the CSR Information preented in the management report with the lit et forth in Article R. 225-105-1 of the French Commercial Code. (1) ISAE 3000 Aurance engagement other than audit or review of hitorical information 232 REGISTRATION DOCUMENT / L ORÉAL 2013

CORPORATE SOCIAL, ENVIRONMENTAL AND SOCIETAL RESPONSIBILITY REPORT BY THE STATUTORY AUDITORS, DESIGNATED AS INDEPENDENT THIRD PARTIES, ON THE CONSOLIDATED SOCIAL, ENVIRONMENTAL AND SOCIETAL INFORMATION INCLUDED IN THE MANAGEMENT REPORT In the event of omiion of certain conolidated information, we have verified that explanation were provided in accordance with the third paragraph of the Article R. 225-105 of the French Commercial Code. We have verified that the CSR Information covered the conolidated cope, i.e., the company and it ubidiarie within the meaning of Article L. 233-1 of the French Commercial Code and the companie that it control within the meaning of Article L. 233-3 of the French Commercial Code, ubject to the limit et forth in the methodological memo paragraph preented in the management report. Baed on our work and conidering the limitation mentioned above, we attet that the required CSR Information i preented in the management report. 2. FORMED CONCLUSION ON THE FAIR PRESENTATION OF THE CSR INFORMATION Nature and cope of procedure We conducted around ixty interview with the people reponible for preparing the CSR Information in the department in charge of the CSR Information collection proce and, when appropriate, thoe reponible for internal control and rik management procedure, in order to : ae the uitability of the Reporting Criteria with repect to it relevance, completene, reliability, neutrality and clarity, taking into conideration, when relevant, the ector bet practice; verify the et-up of a proce to collect, compile, proce, and check the CSR Information with regard to it completene and conitency. familiarize ourelve with the internal control and rik management procedure relating to the compilation of the CSR Information. We determined the nature and cope of the tet and control according to the nature and ignificance of the CSR Information with regard to the company characteritic, the ocial and environmental challenge of it activitie, it utainable development trategie and the ector bet practice. Concerning the CSR information that we have conidered to be mot important (2) : for the conolidating entity, we conulted the documentary ource and conducted interview to corroborate the qualitative information (organization, policie, action), we implemented analytical procedure on the quantitative information and verified, uing ampling technique, the calculation and the data conolidation, and we verified their conitency with the other information preented in the management report; for a repreentative ample of entitie and ite that we have elected (3) according to their activity, their contribution to the conolidated indicator, their location and a rik analyi, we held interview to verify the correct application of the procedure and implemented ubtantive tet on a ampling bai, coniting in verifying the calculation performed and reconciling the data with upporting evidence. The elected ample repreented on average 18 % of the Group headcount and an average of 18 % of the environmental quantitative information. 6 Regarding the other conolidated CSR Information, we have aeed it conitency in relation to our undertanding of the Group. Finally, we have aeed the relevance of the explanation relating to, where neceary, the total or partial omiion of certain information. We believe that the ampling method and ize of the ample we have ued in exerciing our profeional judgment enable u to expre limited aurance; a higher level of aurance would have required more in-depth verification. Due to the ue of ampling technique and the other limit inherent to the operation of any information and internal control ytem, the rik that a material anomaly be identified in the CSR Information cannot be totally eliminated. (2) Quantitative information: total workforce, fixed term and permanent contract, ditribution of employee by geographic zone, by gender and breakdown by age, number of departure (on the company initiative), number of hired employee, ditribution of peronnel cot by geographic zone, World Profit Sharing 2012 (paid in 2013), overall rate of abenteeim, rate of abenteeim for ickne, number of igned collective agreement in the world, number of collective agreement in force at December 31/12/13 in the world, conventional frequency rate, enlarged frequency rate, accident everity rate, number of hour of training, emiion of Volatile Organic Compound, ton of tranportable wate (with and without huttle packaging), 2013 wate treatment, water conumption, ditribution of water ue, SO2 emiion, Chemical Oxygen Demand before treatment, Chemical Oxygen Demand after treatment, total energy conumption, ditribution by energy ource, direct and indirect CO2 emiion related to energy ued, number of ocial audit 2013, number of upplier invited and who poitively reponded to the invitation to the CDP in 2013. Qualitative information : health and Safety working condition, equal treatment (in the paragraph Diverity and equal opportunitie), benefit and their evolution, organiation of ocial dialogue, meaure for the utainable ue of reource, protection of biodiverity (in paragraph «Renewable raw material» and «Protection of biodiverity»), territorial, economic and ocial impact of the company activitie, meaure adopted with regard to conumer health and afety. (3) For ocial data : the 6 ubidiarie in China, Indoneia, Ruia, the United Kingdom, Germany and Spain. For environmental, health and afety data : 10 entitie in Aulnay, CAP, Chimex in France, DC China, Souzhou and Yichang in China, factorie in Germany and in Ruia, Jababeka in Indoneia and the DC Watermead in the United Kingdom. REGISTRATION DOCUMENT / L ORÉAL 2013 233

Concluion Baed on our work, nothing ha come to our attention that caue u to believe that the CSR Information, taken a a whole, i not preented fairly, in all material repect, in accordance with the Reporting Criteria. Neuilly-ur-Seine, February 11 th, 2014 The Statutory Auditor PricewaterhoueCooper Audit Deloitte & Aocié Gérard Morin Sylvain Lambert David Dupont-Noel Florence Didier-Noaro 234 REGISTRATION DOCUMENT / L ORÉAL 2013

7 STOCK MARKET INFORMATION SHARE CAPITAL 7.1. INFORMATION RELATING TO THE COMPANY 236 7.1.1. Legal Form 236 7.1.2. Law governing the Iuer 236 7.1.3. Buine Activity 236 7.1.4. Date of incorporation and term of the company (article 5 of the article of aociation) 236 7.1.5. Purpoe of the company (extract from article 2 of the article of aociation) 236 7.1.6. Company regitration number 236 7.1.7. Conultation of document relating to the company 236 7.1.8. General Management (article 11 of the article of aociation) 236 7.1.9. Fical year (article 14 of the article of aociation) 237 7.1.10. Statutory ditribution of profit (article 15 of the article of aociation) 237 7.1.11. Annual General Meeting 237 7.1.12. Statutory hare ownerhip threhold 237 7.2. INFORMATION CONCERNING THE SHARE CAPITAL* 238 7.2.1. Statutory requirement governing change in the hare capital and hareholder right 238 7.2.2. Iued hare capital and authoried uniued hare capital 238 7.2.3. Change in the hare capital over the lat five year 240 7.3. SHAREHOLDER STRUCTURE* 240 7.3.1. Legal entitie or individual exerciing control over the Company to the Company knowledge 240 7.3.2. Change in allocation of the hare capital and voting right over the lat three year 241 7.3.3. Employee hare ownerhip 242 7.3.4. Dicloure to the Company of legal threhold croed 242 7.3.5. Shareholder agreement relating to hare in the Company hare capital 242 7.3.6 Buyback by the Company of it own hare 243 7.4. LONG-TERM INCENTIVE PLANS* 245 7.4.1. Preentation of the tock option plan for the purchae or ubcription of hare and plan for the Conditional Grant of Share to Employee (ACA) 245 7.4.2. Stock option plan for the ubcription and purchae of L Oréal parent company hare 246 7.4.3. Plan for the Conditional Grant of Share (ACA) 249 7.5. THE L ORÉAL SHARE / L ORÉAL SHARE MARKET 252 7.5.1. The L Oréal hare 252 7.5.2. L Oréal hare market 253 7.6. INFORMATION POLICY 257 7.6.1. New, modern and complementary communication media 257 7.6.2 A large number of hareholder event for a regular and detailed dialogue 258 7.6.3. Financial calendar for 2014 259 7.6.4. Financial new releae in 2013 259 * Thi information form an integral part of the Annual Financial Report a provided for in the article L. 451-1-2 of the French Monetary and Financial Code. REGISTRATION DOCUMENT / L ORÉAL 2013 235

7 INFORMATION STOCK MARKET INFORMATION SHARE CAPITAL RELATING TO THE COMPANY L Oréal i a French ociété anonyme (limited company) lited on the Pari tock market. Thi chapter et out the information relating to it hare capital and the main detail of it legal form and it Article of Aociation. All the information on the L Oréal hare and L Oréal hare market are alo included in thi chapter 7.1. INFORMATION RELATING TO THE COMPANY 7.1.1. Legal Form L Oréal i incorporated in France a a ociété anonyme. 7.1.2. Law governing the Iuer French law. 7.1.3. Buine Activity L Oréal S.A. i a French company, with it head office in France. It perform a ale activity that i pecific to France. L Oréal parent company alo function a a holding company and ha a role of trategic coordination role a well a a cientific, indutrial and marketing coordination for the Group on a global bai. The group ubidiarie develop the group buine in their repective territory. In thi role, they manufacture or commiion and commercialize the product they decide to ell on their market. L Oréal wholly own the vat majority of it ubidiarie. It alo ha ubtantial invetment in non-conolidated companie, detail of which are et out on page 159 to 162. 7.1.4. Date of incorporation and term of the company (article 5 of the article of aociation) The Company term hall be ninety-nine year, which began to run on January 1 t, 1963 and which hall thu expire on December 31 t, 2061, except in the event of early diolution or of extenion, a provided for in thee Article of Aociation. 7.1.5. Purpoe of the company (extract from article 2 of the article of aociation) The Company corporate purpoe, both in France and/or at any other location anywhere throughout the entire world, hall be a follow: the manufacturing and the ale of cometic product in general; of all device intended for the ame ue a the product lited above; of all houehold maintenance product; of all product and article relating to feminine and/or child hygiene and to the embellihment of human being; the demontration and advertiing of uch product; the manufacturing of packaging article; the filing and acquiition of all patent, licene, procee and manufacturing trademark, their exploitation, their aignment and/or their contribution; all diverification tranaction and all commercial, financial, movable property and/or real property tranaction, made in the Company interet, under any form whatoever; the direct or indirect involvement in all tranaction uch a thoe lited above, in particular by mean of the creation of companie, the contribution to pre-exiting companie, the merger or the alliance with uch companie. 7.1.6. Company regitration number 632 012 100 Pari Trade and Companie Regitry. 7.1.7. Conultation of document relating to the company The Article of Aociation, financial tatement, report and information for hareholder can be conulted at 41 rue Martre, 92117 Clichy, France, preferably by appointment. See alo the www.loreal-finance.com webite. 7.1.8. General Management (article 11 of the article of aociation) 1. In accordance with legal proviion, the General Management of the Company i aumed, under it reponibility, either by the Chairman of the Board of Director, or by another natural peron appointed by the Board of Director and bearing the title of Chief Executive Officer. The choice between thee two mode of exerciing General Management i made by the Board of Director each time a Chairman of the Board of Director or a Chief Executive Officer i appointed or ha hi tenure renewed. The Board of Director mut inform hareholder and third partie of thi choice in accordance with the tatutory proviion. 236 REGISTRATION DOCUMENT / L ORÉAL 2013

STOCK MARKET INFORMATION SHARE CAPITAL INFORMATION RELATING TO THE COMPANY The choice of the Board of Director concerning the mode of exercie of the General Management i made on the bai of a majority vote of the Director preent or repreented. Changing the mode of exercie of the General Management doe not involve a modification of the Article of Aociation. 2. Depending on the choice made by the Board of Director in accordance with the proviion of 1 above, the General Management i carried out either by the Chairman, or by a natural peron, appointed by the Board of Director and bearing the title of Chief Executive Officer. 3. The Chief Executive Officer i granted the mot extenive power to act in all circumtance on behalf of the Company. He exercie thee power within the limitation of the object of the Company, and ubject to the power exprely granted by law to Shareholder Meeting. The Chief Executive Officer repreent the Company in it relation with third partie. The Company i bound even by action of the Chief Executive Officer which are outide the object of the Company, unle the Company can prove that the third party wa aware that the action wa outide the object of the Company, or that the third party could not be unaware of thi in view of the circumtance, it being tated however that the mere publication of the Article of Aociation doe not contitute uch proof. 4. On the propoal of the Chief Executive Officer, whether thi office i aumed by the Chairman of the Board of Director or by another peron, the Board of Director may appoint one or more natural peron in charge of aiting the Chief Executive Officer, with the title of Deputy Chief Executive Officer. In agreement with the Chief Executive Officer, the Board of Director determine the extent and duration of the power granted to the Deputy Chief Executive Officer. 7.1.9. Fical year (article 14 of the article of aociation) Each fical year hall have a duration of twelve month, to begin on January 1 t and to end on December 31 t of each year. 7.1.10. Statutory ditribution of profit (article 15 of the article of aociation) A. From the ditributable profit, the following amount hall be withheld, in the following order: 1. The amount required to pay the primary dividend to the hareholder equal to five percent (5%) of the amount paid up on the unredeemed ecuritie in accordance with call for fund, provided however that (where the profit for a given year do not allow uch dividend to be paid) the hareholder hall not be entitled to claim uch dividend from out of the profit of ubequent year. 2. From the available remainder, the Ordinary General Meeting, upon a propoal by the Board of Director, hall have the authority to reolve to withhold the amount that it deem appropriate (and even the entire amount of uch available remainder), either to be carried forward to the next fical year, or to be paid into a prudential fund or into one or more ordinary, extraordinary or pecial reerve fund. Such reerve fund(), which hall not bear any interet, may be ditributed to the hareholder, or allocated to complete the 5% primary dividend for the hareholder, in the event of inufficient reult during one or more fical year, or to acquire and to cancel hare in the Company, or to redeem in whole or in part uch hare. 3. The remaining balance (if any) hall be divided up among all the hareholder, without any dicrimination, and each hare hall entitle it holder to receive the ame income. However, any hareholder who can prove at the end of a financial year, that hare have been regitered in hi name for at leat two year and that they continue to be regitered in hi name at the date of payment of the dividend paid for uch financial year, will be entitled to a preferential dividend on the hare that are thu regitered, equal to 10% of the dividend (initial dividend and additional dividend) paid on the other hare, including in the event of payment of the dividend in new hare, the preferential dividend thu paid being rounded down to the nearet lower cent, if neceary. Similarly, any hareholder who can prove, at the end of a financial year, that hare have been regitered in hi name for at leat two year and that they continue to be regitered in hi name at the date of completion of an increae in capital carried out through capitaliation of reerve, profit or hare premium by the ditribution of bonu hare, hall be entitled to an increae in the number of bonu hare to be ditributed to him, equal to 10%, thi number being rounded down to the nearet lower unit in the event of fractional hare right. The new hare created in thi manner will be identical, for the purpoe of calculating the right to the preferential dividend and to the increaed hare allocation, to the old hare from which they reult. The number of hare eligible for thee preferential dividend may not exceed 0.5% of the hare capital at the cloing date of the pat financial year, for the ame hareholder. B. The loe (if any) hall be charged to the retained earning from preceding fical year or to the reerve fund, and the balance hall be booked into a pecial carry forward account. 7.1.11. Annual General Meeting Annual General Meeting are governed by all the legal proviion and regulation laid down in thi connection. Since the Annual General Meeting of April 29 th, 2004, double voting right have been eliminated. 7.1.12. Statutory hare ownerhip threhold Any holder, whether direct or indirect, of a fraction of the Company hare capital equal to 1%, or a multiple of thi percentage lower than 5%, i required to inform the Company within a period of fifteen day in the event that thee threhold have been paed in either direction (Article 7, paragraph 2 7 REGISTRATION DOCUMENT / L ORÉAL 2013 237

7 INFORMATION STOCK MARKET INFORMATION SHARE CAPITAL CONCERNING THE SHARE CAPITAL of the Article of Aociation). Thi proviion of the Article of Aociation upplement the legal requirement covering dicloure concerning the croing, upward or downward, of threhold relating to one-twentieth, one-tenth, three-twentieth, one-fifth, one-quarter, three-tenth, one-third, one-half, two-third, eighteen-twentieth or nineteen-twentieth of hare capital or of voting right (Article L. 233-7 of the French Commercial Code). If not dicloed in accordance with the condition tipulated by law or by the Article of aociation, hare exceeding the fraction which hould have been dicloed are deprived of voting right at Shareholder Meeting, in accordance with the condition tipulated in the French Commercial Code, if during a meeting the failure to dicloe i noted, and if one or more hareholder together holding at leat 5% of the hare capital o requet during the meeting (Article 7, paragraph 3 of the Article of Aociation). See alo the complete text of the Company Article of Aociation on the www.loreal-finance.com webite, Regulated information ection. 7.2. INFORMATION CONCERNING THE SHARE CAPITAL 7.2.1. Statutory requirement governing change in the hare capital and hareholder right None. 7.2.2. Iued hare capital and authoried uniued hare capital The hare capital amounted to 121,180,377.40 a of December 31 t, 2013. It wa divided into 605,901,887 hare with a par value of 0.20 each, all of the ame cla and ranking pari pau. 238 REGISTRATION DOCUMENT / L ORÉAL 2013

STOCK MARKET INFORMATION SHARE CAPITAL INFORMATION CONCERNING THE SHARE CAPITAL The table et out below ummarie (particularly in application of Article L. 225-129-1 and L. 225-129-2 of the French Commercial Code) the currently valid authoriation granted to the Board of Director by the Annual General Meeting of hareholder concerning the capital. It how the ue made of uch authoriation over the financial year and preent the authoriation which are to be put to the vote at the Annual General Meeting on April 17 th, 2014. Authoriation in force Authoriation propoed to the Annual General Meeting of April 17 th, 2014 Nature of the authoriation Date of AGM (reolution no.) Length (expiry date) Maximum authoried amount Ue made of the authoriation in 2013 Reolution No. Length Maximum ceiling Share capital increae Capital increae through the iue of hare with maintenance of preferential ubcription right or via the capitaliation of hare premium, reerve, profit or other amount Capital increae reerved for employee April 26 th, 2013 (9 th ) 26 month (June 26 th, 2015) An increae in the hare capital to 169,207,813.88 None None April 26 th, 2013 (11 th ) 26 month (June 26 th, 2015) 1% of hare capital at the date of the Annual General Meeting (i.e. a maximum of 6,054,992 hare) None None Buyback by the Company of it own hare Buyback by the Company of it own hare April 26 th, 2013 (8 th ) 18 month (October 26 th, 2014) 10% of hare capital on the date of the buyback (i.e. 60,549,917 hare at April 26 th, 2013) 5,986,391 hare (9 th ) from October 27 th, 2014 to October 17 th, 2015 10% of hare capital on the date of the buyback (i.e. 60,590,188 hare at December 31 t, 2013) Reduction in the hare capital via cancellation of hare Cancellation of hare purchaed by the Company within the cope of Article L. 225-209 of the French Commercial Code Cancellation of hare purchaed by the Company within the cope of Article L. 225-208 of the French Commercial Code Stock option and free grant of hare Grant of exiting free hare or hare to be iued to the employee April 17 th, 2012 (10 th ) April 17 th, 2012 (10 th ) 26 month (June 17 th, 2014) 26 month (June 17 th, 2014) 10% of hare capital on the date of cancellation per 24-month period (i.e. 60,549,917 hare at April 26 th, 2013) 9,108,641 hare (11 th ) 26 month (June 17 th, 2016) 500,000 hare None (11 th ) 26 month (June 17 th, 2016) 10% of hare capital on the date of cancellation per 24-month period (i.e. 60,590,188 hare at December 31 t, 2013) 650,000 hare 7 April 26 th, 2013 (10 th ) 26 month (June 26 th, 2015) 0.6% of hare capital on the date of the deciion to grant the hare 1,057,820 hare None Since June 22 nd, 2013, the Board of Director no longer ha an authoriation to allocate tock option to purchae or ubcribe for hare. At December 31 t, 2013, 14,073,332 hare ubcription option had been allocated. All thee option are exerciable on the bai of one new hare per option, and are therefore liable to lead to the creation of the ame number of hare. Furthermore, 3,707,020 conditional hare had been granted to Group employee. Out of thee, 395,500 hare will be created when neceary and, where applicable, by capitaliation of reerve, accordingly, the potential hare capital of the Company amount to 124,074,143.80 divided into 620,370,719 hare with a par value of 0.20 each. The Company ha not iued any ecuritie which grant indirect entitlement to hare in the capital. At it meeting on February 11 th, 2013 and November 29 th, 2013, the Board of Director cancelled, firtly, the 5,077,250 hare bought back in 2012 and, econdly, the 4,031,391 hare bought back during the firt half of 2013 within the framework of Article L. 225-209 of the French Commercial Code (10 th reolution voted by the Annual General Meeting on April 17 th, 2012). The Chairman, on the delegation of the Board of Director at it meeting on November 29 th, 2013, recorded the amount of the hare capital at December 31 t, 2013, which wa 121,180,377.40 divided into 605,901,887 hare. REGISTRATION DOCUMENT / L ORÉAL 2013 239

7 SHAREHOLDER STOCK MARKET INFORMATION SHARE CAPITAL STRUCTURE 7.2.3. Change in the hare capital over the lat five year Date Nature of the tranaction Amount of the change in hare capital Share premium Amount of the hare capital on completion of the tranaction Number of hare created or cancelled Number of hare on completion of the tranaction 12.31.2008 120,483,162.00 602,415,810 02.16.2009 Cancellation of hare - 794,120.00 119,689,042.00-3,970,600 598,445,210 02.17 to 12.31.2009 Exercie of hare ubcription option 105,440.00 31,026,370.50 119,794,482.00 527,200 598,972,410 01.01 to 04.26.2010 Exercie of hare ubcription option 149,080.00 44,316,558.00 119,943,562.00 745,400 599,717,810 04.27.2010 Cancellation of hare - 100,000.00 119,843,562.00-500,000 599,217,810 04.27 to 12.31.2010 Exercie of hare ubcription option 354,955.00 107,450,074.75 120,198,517.00 1,774,775 600,992,585 01.01 to 05.30.2011 Exercie of hare ubcription option 233,719.40 71,517,702.03 120,432,236.40 1,168,597 602,161,182 05.30.2011 Conditional grant of hare 80.00 120,432,316.40 400 602,161,582 05.31 to 12.31.2011 Exercie of hare ubcription option 164,500.00 51,578,602.50 120,596,816.40 822,500 602,984,082 01.01 to 12.31.2012 Exercie of hare ubcription option 1,165,349.00 407,590,294.85 121,762,165.40 5,826,745 608,810,827 01.01 to 02.10.2013 Exercie of hare ubcription option 115,508.80 48,046,701.36 121,877,674.20 577,544 609,388,371 02.11.2013 Cancellation of hare - 1,015,450.00 120,862,224.20-5,077,250 604,311,121 02.11 to 03.25.2013 Exercie of hare ubcription option 154,620.00 62,560,063.50 121,016,844.20 773,100 605,084,221 03.26.2013 Conditional grant of hare 47,560.00 121,064,404.20 237,800 605,322,021 03.26 to 05.26.2013 Exercie of hare ubcription option 105,598.00 42,689,529.48 121,170,002.20 527,990 605,850,011 05.27.2013 Conditional grant of hare 80.00 121,170,082.20 400 605,850,411 05.27 to 11.29.2013 Exercie of hare ubcription option 422,853.40 132,489,663.04 121,592,935.60 2,114,267 607,964,678 11.29.2013 Cancellation of hare - 806,278.20 120,786,657.40-4,031,391 603,933,287 11.30 to 12.31.2013 Exercie of hare ubcription option 393,720.00 136,453,362.00 121,180,377.40 1,968,600 605,901,887 7.3. SHAREHOLDER STRUCTURE SHAREHOLDER STRUCTURE AT DECEMBER 31 t, 2013 8.21% French intitutional invetor 24.82% International intitutional invetor 0.70% Employee (1) 5.18% Individual hareholder 30.64% Bettencourt Meyer family 29.44% Netlé 1.01% Treaury tock 7.3.1. Legal entitie or individual exerciing control over the Company to the Company knowledge The Bettencourt Meyer family, on the one hand, and Netlé, on the other hand, are hareholder of the Company and have declared that they are acting in concert (ee the ection on Change in allocation of the hare capital and voting right and Shareholder agreement relating to hare in the Company hare capital). (1) In the L Oréal Company Saving Plan (PEE). 240 REGISTRATION DOCUMENT / L ORÉAL 2013

STOCK MARKET INFORMATION SHARE CAPITAL SHAREHOLDER STRUCTURE 7.3.2. Change in allocation of the hare capital and voting right over the lat three year Over the lat three year, the allocation of the hare capital and the voting right ha changed a follow: Number of hare 12.31.2013 12.31.2012 12.31.2011 % of capital % of voting right (4) Number of hare % of capital % of voting right (4) Number of hare % of capital % of voting right (4) Bettencourt Meyer Family (1) (2) 185,661,879 30.64 30.64 185,661,879 30.50 30.50 185,661,879 30.79 30.79 Netlé S.A. (2) 178,381,021 29.44 29.44 178,381,021 29.30 29.30 178,381,021 29.58 29.58 Concert party (2) 364,042,900 60.08 60.08 364,042,900 59.80 59.80 364,042,900 60.37 60.37 Company Saving Plan (3) 4,252,345 0.70 0.70 4,379,821 0.72 0.72 4,404,950 0.73 0.73 Public 231,498,785 38.21 38.21 229,933,941 37.76 37.76 225,938,573 37.47 37.47 Treaury tock 6,107,857 1.01 1.01 10,454,165 1.72 8,597,659 1.43 TOTAL 605,901,887 100.00 100.00 608,810,827 100 98.28 602,984,082 100 98.57 (1) Including 185,654,833 L Oréal hare held in abolute or beneficial ownerhip by Téthy, a French Société par action implifiée (implified joint-tock company) of which Mr. Liliane Bettencourt hold almot all the hare and attached voting right in beneficial ownerhip. Mr. Françoie Bettencourt Meyer hold 76,441,389 L Oréal hare in bare ownerhip, the beneficial ownerhip of which i held by Téthy of which he i the Chairwoman. (2) The Bettencourt Meyer family and Netlé S.A. act in concert (ee Shareholder agreement relating to hare in the Company hare capital). (3) Company Saving Plan (article L. 225-102 of the French Commercial Code). (4) Calculated in accordance with Article 223-11 of the General Regulation of the Autorité de Marché Financier. To the Company knowledge, at December 31 t, 2013, the member of the Executive Committee held le than 1% of the hare capital. The number of hare held by each of the member of the Board of Director i hown in the information heet on the Director et out in chapter 2. The Company i authoried to trade in it own hare on or off the Stock Exchange in accordance with Article L. 225-209 et eq. of the French Commercial Code, within the limit and in accordance with the purpoe defined by the authoriation that are granted to it by it Annual General Meeting. At December 31 t, 2013, the Company held, on thi bai, 6,107,857 of it own hare (1.01% of the hare capital), which, valued at their purchae price, repreented 567.6 million in L Oréal parent company financial tatement. 225,152 of thee hare were allocated to covering the tock option plan for the purchae of hare allocated to employee and executive officer of Group companie that have not yet expired and 3,311,520 to a plan for the conditional grant of hare to employee. 7 REGISTRATION DOCUMENT / L ORÉAL 2013 241

7 SHAREHOLDER STOCK MARKET INFORMATION SHARE CAPITAL STRUCTURE 7.3.3. Employee hare ownerhip The employee of the Company and it affiliate held 4,252,345 hare a at December 31 t, 2013. The percentage of L Oréal hare held in the Company Saving Plan (article L. 225-102 of the French Commercial Code) amount to 0.70% at December 31 t, 2013. At that date, thi take in the capital i held by 9,974 employee participating in the Group Company Saving Plan. 7.3.4. Dicloure to the Company of legal threhold croed During 2013, the Company wa not informed of any croing of the legal threhold with regard to the holding of it hare or voting right. 7.3.5. Shareholder agreement relating to hare in the Company hare capital The Company i not aware of any hareholder agreement relating to hare in it hare capital other than the agreement decribed below. A memorandum of agreement wa igned on February 3 rd, 2004 between the Bettencourt Meyer family, and Netlé, providing for the merger of Geparal into L Oréal. It contain the following claue: 7.3.5.1. CLAUSES RELATING TO THE MANAGEMENT OF THE L ORÉAL SHARES HELD Claue limiting the hareholding The partie agreed not to increae their hareholding or their voting right held in L Oréal, either directly or indirectly, in any manner whatoever, for a minimum period of three year a from April 29 th, 2004, and in any cae not until ix month have elaped after the death of Mr. Liliane Bettencourt. Lock-up claue (claue expired on April 29, 2009) The partie agreed not to tranfer any or all of their L Oréal hare either directly or indirectly, for a period of five year a from April 29 th, 2004. Exception to the undertaking to limit the hareholding and the lock-up claue a) The undertaking to limit the hareholding doe not apply if the increae in the hareholding reult from a reduction in the number of L Oréal hare or voting right, the acquiition by the Company of it own hare, or the upenion or removal of the voting right of a hareholder. b) The undertaking to limit the hareholding and the lock-up claue will no longer apply in the event of a takeover bid for L Oréal hare, a from the date of publication of the clearance deciion (avi de recevabilité) and up until the day after the publication of the notice of reult (avi de réultat). c) In the event of an increae in the hare capital of L Oréal, the partie may, provided that the other party ha voted in favour of the capital increae, acquire hare or ubcribe for new hare, in order to maintain their holding at the percentage exiting prior to the aid tranaction. d) The partie are free to carry out tranfer of L Oréal hare, in the cae of individual, in favour of an acendant, decendant or poue in the form of a gift, and in the cae of individual or legal entitie, in favour of any company in which the individual or legal entity carrying out the tranfer hold over 90% of the hare capital or voting right. Pre-emption claue (expiring on April 29 th, 2014) The partie have reciprocally granted each other a pre-emption right concerning the L Oréal hare they hold ince the date of the merger, and thoe they will hold after uch date. Thi pre-emption right will come into force on expiry of the lock-up claue for a period of five year (i.e. to end on April 29 th, 2014). No concert party proviion (claue expiring on April 29 th, 2014) The partie have agreed for a period of ten year from the effective date of the merger not to conclude an agreement with any third party and not to form a concert party relating to the hare making up the hare capital of L Oréal. Breach of uch undertaking entitle the other party to exercie it pre-emption right with regard to the hareholding of the party having committed uch breach, for a price per hare equal to the average of the hare price for the lat thirty trading eion prior to notification of exercie of the pre-emption right. 7.3.5.2. BOARD OF DIRECTORS The memorandum of agreement did not provide for any change to the compoition of the Board of Director a compared to it compoition at the date of igning, but did tipulate an undertaking by the partie to vote in favour of the appointment a Director of three member propoed by the other party. The Bettencourt Meyer family and Netlé alo agreed to vote in favour of the appointment of two Vice-Chairmen of the Board of Director, one propoed by the Bettencourt Meyer family, and the other by Netlé. The partie provided for the creation on the Board of Director of L Oréal of a committee called the Strategy and Implementation Committee which ha ix member, and i chaired by the Chairman of the Board of Director of L Oréal and compoed of two member propoed by the Bettencourt Meyer family, two member propoed by Netlé and one other independent Director. The committee meet ix time a year. 242 REGISTRATION DOCUMENT / L ORÉAL 2013

STOCK MARKET INFORMATION SHARE CAPITAL SHAREHOLDER STRUCTURE 7.3.5.3. TERM Unle otherwie tipulated, the memorandum of agreement will remain in force for five year from April 29 th, 2004, and in all cae until a period of ix month ha elaped after the death of Mr. Bettencourt. 7.3.5.4. CONCERTED ACTION BETWEEN THE PARTIES The partie declared that they would act in concert for a period of five year from April 29 th, 2004 onward. On April 9 th, 2009, the Bettencourt Meyer family and Netlé publihed the following pre releae: On February 3 rd, 2004, the Bettencourt family and Netlé igned an agreement organiing their relationhip and the management of their take within the L Oréal Company. The agreement i public and remain unchanged. It foreee the non-tranferability of their repective take in the capital of L Oréal until April 29 th, 2009, the other claue (in particular, limitation on the hareholding, pre-emption, ecrow, prohibition on contituting a concert party with any third party, compoition of the Board of Director and of the Strategy and Implementation Committee) continue to be effective until the expiry date mentioned in the 2004 deed. The Bettencourt family and Netlé will continue to act in concert with regard to the L Oréal Company beyond April 29 th, 2009. 7.3.5.5. AMENDMENT AGREEMENT SIGNED ON FEBRUARY 10 th, 2014 In meeting held on February 10 th, 2014, the repective Board of Director of Netlé and L Oréal approved by unanimou deciion of their voting member a trategic tranaction for both companie under which L Oréal will buy 48.5 million of it own hare (8% of it hare capital) from Netlé. L Oréal and Netlé joint new releae of February 11 th, 2014 decribe thi tranaction in detail (See chapter 3, paragraph 3.3.2.2., p. 103 ). The buyback i ubject to fulfilment of a condition precedent, namely the cloing of the acquiition by Netlé of all the hare held by L Oréal in the companie of the Galderma group. The condition i provided in favour of Netlé which may waive it. For the purpoe of fulfilment of the condition precedent, Netlé and L Oréal have entered into excluive negotiation. All the hare bought back by L Oréal will be cancelled and, following the tranaction, Netlé take in L Oréal capital will be reduced from 29.4% to 23.29% while the Bettencourt Meyer family take will increae from 30.6% to 33.31% of the capital. In order to reflect the change in the take held by Netlé in their agreement, on February 10 th, 2014, the Bettencourt Meyer family and Netlé igned an amendment agreement to their memorandum of agreement of February 3 rd, 2004. Ownerhip ceiling claue Subject to cloing of the tranaction and a from the date thereof, the claue limiting the repective hareholding of the Bettencourt Meyer family and Netlé both in term of capital and voting right will continue to apply under the ame condition, for the term of the memorandum of agreement, namely until the expiry of a period of ix month after the death of Mr. Liliane Bettencourt, and on the bai of their repective take in term of capital and voting right reulting from the tranaction. Board of Director Subject to cloing of the tranaction and a from the date thereof, it i provided that for the remaining term of the memorandum of agreement, the undertaking by the Bettencourt Meyer family to vote in favour of the appointment on L Oréal Board of Director of member propoed by Netlé will from now on only concern two member, a againt three previouly. The reciprocal undertaking by Netlé to vote in favour of the appointment on L Oréal Board of Director of member propoed by the Bettencourt Meyer family will continue to concern three member. Ecrow agreement The ecrow agreement for the L Oréal hare repectively held by the Bettencourt Meyer family and by Netlé hall terminate two day at the latet prior to cloing of the tranaction,. Agreement by the partie to act in concert The partie tated that they would continue to act in concert for the remaining term of the memorandum of agreement. The other proviion of the memorandum of agreement till in force that have not been exprely amended by the amendment agreement will remain unchanged. Joint pre releae iued by the Bettecourt Meyer family and Netlé on February 11 th, 2014. On February 11 th, 2014, Netlé and L Oréal announced a hare buyback of L Oréal hare from Netlé. Subject to completion of the tranaction, Netlé ownerhip in L Oréal will decreae from 29.4% to 23.29%, and the Bettencourt Meyer Family ownerhip will increae from 30.6% to 33.31%. The Bettencourt Meyer Family and Netlé have amended the hareholder agreement of 3 rd February 2004 to take into account the new hareholding tructure, once the tranaction i completed. The number of Netlé repreentative on the Board of Director of L Oréal will be brought down from 3 to 2. The ownerhip ceiling proviion of the agreement will continue to apply to the new level of ownerhip in the ame condition. Thi amendment will be communicated to the Autorité de Marché Financier. The Bettencourt Meyer f amily and Netlé will continue to act in concert with repect to L Oréal for the remaining duration of the hareholder agreement. 7.3.6 Buyback by the Company of it own hare 7.3.6.1. INFORMATION CONCERNING SHARE BUYBACKS DURING THE 2013 FINANCIAL YEAR In 2013, the Company bought back 5,986,391 of it own hare, in accordance with the authoriation voted by the Annual General Meeting of April 17 th, 2012 and April 26 th, 2013. 7 REGISTRATION DOCUMENT / L ORÉAL 2013 243

7 SHAREHOLDER STOCK MARKET INFORMATION SHARE CAPITAL STRUCTURE The table et out below ummarie the tranaction carried out within thi framework, and the ue made of the hare bought back: Date of authoriation of the Annual General Meeting April 17 th, 2012 (9 th reolution) April 26 th, 2013 (8 th reolution) Expiry date of the authoriation October 17 th, 2013 October 26 th, 2014 Maximum amount of authoried buyback 10% of capital on the date of the hare buyback (i.e. 60,881,083 hare at December 31 t, 2012), for a maximum amount of 7,914.5 million 10% of capital on the date of the hare buyback (i.e. 60,549,917 hare at April 26 th, 2013), for a maximum amount of 10,293.5 million Maximum purchae price per hare 130 170 Authoried purpoe Board of Director meeting that decided on the buyback Cancellation Share purchae option Free grant of hare Liquidity and market tabiliation External growth Cancellation Share purchae option Free grant of hare Liquidity and market tabiliation External growth 02.11.2013 02.11.2013 and 11.29.2013 Purpoe of buyback Cancellation Cancellation Period of buyback made*** From February 18 th to April 24 th, 2013 * From April 29 th to May 22 nd, 2013 * and from December 2 nd, to December 20 th, 2013 Number of hare purchaed 2,765,857 * 1,265,534 * and 1,955,000 Average purchae price per hare ** 118.38 * 135.09 * and 124.85 Ue of hare purchaed Cancellation Cancellation * Share cancelled by the Board of Director of November 29 th, 2013. ** Before cot. *** 950,000 hare have been bought back during the period January 2 nd -10 th, 2014. 7.3.6.2. TRANSACTIONS CARRIED OUT BY L ORÉAL WITH RESPECT TO ITS SHARES IN 2013 Percentage of hare capital held by the Company directly and indirectly at December 31 t, 2013 1.01% of which: thoe intended to cover exiting hare purchae option plan 0.04% thoe intended to cover conditional hare 0.55% thoe intended for cancellation 0.32% Number of hare cancelled during the lat 24 month 9,108,641 Number of hare held in the portfolio at 12.31.2013 6,107,857 Net book value of the portfolio at 12.31.2013 567.6 million Market portfolio value at 12.31.2013 780.0 million Total gro tranaction Sale/ Purchae Tranfer* Number of hare 5,986,391 1,220,758 Average tranaction price 124.02 ** Average exercie price 68.89 Amount 742.5 million ** 84.1 million * Exercie of tock option for the purchae of hare granted to employee and corporate officer of Group companie. ** Before cot. No ue wa made of derivative to make the hare buyback. There i no open purchae or ale poition at December 31 t, 2013. 7.3.6.3. RENEWAL BY THE ANNUAL GENERAL MEETING OF THE AUTHORISATION GIVEN TO THE BOARD TO TRADE IN THE COMPANY S SHARES A the exiting authoriation i due to expire in October 2014, it i propoed to the Annual General Meeting of April 17 th, 2014 to give the Board a new authoriation enabling it to continue, where applicable, it hare buyback policy, depending on the opportunitie, to the excluion of period of public offer with regard to the Company capital. The Company would be able to buy it own hare for the following purpoe: their cancellation; their tranfer within the cope of employee hare ownerhip programme and their allocation to free grant of hare for the benefit of employee and executive officer of the Group; tabiliation of the hare price; retaining them and ubequently uing them a payment in connection with external growth operation. Thee hare could be acquired by any mean, on one or more occaion, on the tock market or over the counter, including through purchae of block of hare. The authoriation would enter into force on October 27 th, 2014, namely upon the termination of the current authoriation for the Company to buy back it own hare which will expire on 244 REGISTRATION DOCUMENT / L ORÉAL 2013

STOCK MARKET INFORMATION SHARE CAPITAL LONG-TERM INCENTIVE PLANS October 26 th, 2014. It would expire eighteen month after the Annual General Meeting, on October 17 th, 2015. The purchae price per hare would not be greater than 200. The authoriation would concern up to 10% of the hare capital, i.e. for information purpoe at December 31 t, 2013, 60,590,188 hare, for a maximum amount of 12.12 billion. 7.3.6.4. BUYBACK BY L ORÉAL OF 48.5 MILLION OF ITS OWN SHARES (REPRESENTING 8% OF ITS CAPITAL) FROM NESTLÉ UNDER CONDITION A joint new releae of February 11 th, 2014 by L Oréal and Netlé decribe the tranaction in detail (ee Chapter 3, paragraph 3.3.2.2. Significant event that have occurred ince the beginning of 2014, page 103 ). 7.4. LONG-TERM INCENTIVE PLANS 7.4.1. Preentation of the tock option plan for the purchae or ubcription of hare and plan for the Conditional Grant of Share to Employee (ACA) Policy For everal year, L Oréal ha et up long-term incentive plan in favour of it employee and executive officer in an international context. It purue a dual objective: motivating and aociating thoe who make big contribution with the future evolution of the Group reult; increaing olidarity and helping to intil a group pirit among it manager by eeking to foter their loyalty over time. Until 2009, L Oréal Board of Director excluively granted tock option to the enior manager and executive officer whom L Oréal wihed to reward for their performance and their important role in buine development and in the Group current and future project, wherever they may be located. In 2009, L Oréal Board of Director enlarged it policy by introducing a mechanim for the conditional grant of hare to employee (ACA). The objective wa: to provide a long-term incentive offering greater motivation to all thoe who only received tock option occaionally or in limited number; to reach out to a broader population of potential beneficiarie, particularly internationally, in a context of increaed competition with regard to talent. In 2010, thi policy remained unchanged, and wa applied to an even larger number of beneficiarie. In 2011, L Oréal Board of Director decided to make plan for the conditional grant of hare to employee the primary tool for it long-term incentive policy: thu, except for the Chairman and Chief Executive Officer who received tock option only, the main enior manager of L Oréal, including the member of the Executive Committee, received a mix of tock option and conditional grant of hare. Other eligible employee were timulated by conditional grant of hare only. In 2012, the Board of Director, on the propoal of the Human Reource and Remuneration Committee, went one tep further in thi policy and decided to replace the grant of tock option by conditional grant of hare (ACA) for all beneficiarie including the Chairman and Chief Executive Officer. In 2013, the Board of Director, on the propoal of the Human Reource and Remuneration Committee, continued thi policy to make conditional grant of hare (Aca) for all beneficiarie including the Chairman and Chief Executive Officer, to the excluion of the awarding of any other long-term incentive intrument. The plan are propoed by General Management to the Board of Director which decide, after receiving the opinion of the Human Reource and Remuneration Committee, with regard to the opening of thee plan and the applicable condition and rule. Since 2009, thee grant are made after publication of the financial tatement for the previou financial year, in accordance with the AFEP-MEDEF recommendation. The deciion with regard to each individual grant i, in every cae, contingent on the quality of the performance rendered at the time of implementation of the plan with particular attention being paid to the main talent for the future. According to the eligibility criteria linked to the poition held by the beneficiary and the ize of the entity or the country in which the beneficiary work, in a concern for equity on an international cale, thee grant are made every year, every two year or every three year. The General Management and the Board of Director tre the importance that i given to bringing together the interet of the beneficiarie of tock option and conditional grant of hare and thoe of the hareholder themelve. The employee and executive officer who are the beneficiarie hare with the hareholder the ame confidence in the trong teady growth of the Company with a medium- and long-term viion. Thi i why tock option were granted for a period of 10 year including a 5-year lock-up period, and conditional grant of hare for a period of 4 year followed by a 2 year waiting period for France during which thee hare cannot be old. 7 REGISTRATION DOCUMENT / L ORÉAL 2013 245

7 LONG-TERM STOCK MARKET INFORMATION SHARE CAPITAL INCENTIVE PLANS In all, over 3,000 employee (i.e. over 12% of the enior manager throughout the world) benefit from at leat one currently exiting tock option plan or plan for the conditional grant of hare. The Board of Director draw the attention of the beneficiarie of tock option and conditional grant of hare to the regulation in force concerning peron holding inide information. The beneficiarie of tock option and conditional grant of hare undertake to read the Stock Market Code of Ethic which i attached to the regulation for the tock option plan or the plan for the conditional grant of hare from which they benefit and to comply with the proviion thereof. CHANGE IN THE NUMBER OF BENEFICIARIES OF STOCK OPTIONS AND ACAS SINCE 2004 7.4.2. Stock option plan for the ubcription and purchae of L Oréal parent company hare No tock option for the purchae or ubcription of hare were granted in 2013, a the Board of Director ha decided ince 2012, on the propoal of the Human Reource and Remuneration Committee, to replace the grant of tock option with ACA for all beneficiarie including the Chairman and Chief Executive Officer. In accordance with thi policy, the Board of Director did not propoe to the Annual General Meeting of April 26 th, 2013 to renew the authoriation to grant tock option for the ubcription or purchae of hare. 557 1,037 1,903 2,177 2,092 195 381 531 774 789 839 0 439 434 88 1 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Beneficiarie of ACA Beneficiarie of SO + ACA Beneficiarie of SO 246 REGISTRATION DOCUMENT / L ORÉAL 2013

STOCK MARKET INFORMATION SHARE CAPITAL LONG-TERM INCENTIVE PLANS 7.4.2.1 CURRENTLY EXISTING L ORÉAL PARENT COMPANY SHARE PURCHASE OR SUBSCRIPTION OPTION PLANS (1) The main feature of the plan that exited at December 31 t, 2013 are included in the table et out hereafter: AGM authoriation date 05.22.2003 05.22.2003 05.22.2003 05.22.2003 04.25.2006 Date of Board of Director meeting 03.24.2004 12.01.2004 06.29.2005 11.30.2005 (3) 04.25.2006 Total number of beneficiarie 257 274 3 771 1 Total number of hare that may be ubcribed or purchaed, 2,000,000 4,000,000 400,000 6,000,000 2,000,000 Of which may be ubcribed or purchaed by the executive officer (2) : - Mr. Jean-Paul Agon - Sir Linday Owen-Jone 1,000,000 1,000,000 2,000,000 Start date for exercie of the option 03.25.2009 12.02.2009 06.30.2010 12.01.2010 04.26.2011 Date of expiry 03.24.2014 12.01.2014 06.29.2015 11.30.2015 04.25.2016 Subcription or purchae price (in euro) 64.69 (S) 55.54 (S) 60.17 (S) 61.37 (S) 72.60 (S) 62.94 (A) Number of tock option exercied at 12.31.2013 1,756,764 3,546,500 250,000 4,793,239 1,000,000 Of which hare ubcribed 1,756,764 3,546,500 250,000 3,361,191 1,000, 000 Total number of option for ubcription or purchae of hare that have been cancelled or laped 171,500 247,250 0 476,000 0 Number of option hare remaining to be ubcribed or purchaed at year-end 71,736 206,250 150,000 730,761 1,000,000 AGM authoriation date 04.25.2006 04.24.2007 04.24.2007 04.16.2009 04.22.2011 Date of Board of Director meeting 12.01.2006 11.30.2007 03.25.2009 04.27.2010 04.22.2011 Total number of beneficiarie 788 839 634 815 89 Total number of hare that may be ubcribed or purchaed, 5,500,000 4,000,000 3,650,000 4,200,000 1,470,000 Of which may be ubcribed or purchaed by the executive officer (2) : - Mr. Jean-Paul Agon 500,000 350,000 0 400,000 200,000 (4) Start date for exercie of the option 12.02.2011 12.01.2012 03.26.2014 04.28.2015 04.23.2016 Date of expiry 12.01.2016 11.30.2017 03.25.2019 04.27.2020 04.22.2021 Subcription or purchae price (in euro) 78.06 (S) 91.66 (S) 50.11 (S) 80.03 (S) 83.19 (S) Number of tock option exercied at 12.31.2013 3,189,188 1,759,725 20,000 20,000 7,500 Of which hare ubcribed 3,189,188 1,759,725 20,000 20,000 7,500 Total number of option for ubcription or purchae of hare that have been cancelled or laped 608,750 460,600 196,500 189,000 229,000 Number of option hare remaining to be ubcribed or purchaed at year-end 1,702,062 1,779,675 3,433,500 3,991,000 1,233,500 (1) There are no hare purchae or ubcription option plan at ubidiarie of L Oréal. (2) Thi i the number of tock option granted to the executive officer during their term of office within the cope of each of the above-mentioned plan. Mr. Jean-Paul Agon ha been an executive officer ince April 2006. (3) The tock option plan of November 30 th, 2005 i compoed, for 70%, of a hare ubcription option offer at a price of 61.37 (S) and for 30%, of a hare purchae option offer at a price of 62.94 (A). Each beneficiary received an offer compriing hare ubcription and purchae option, in the above proportion. There were no fractional hare right. (4) The Board of Director meeting of April 22 nd, 2011 allocated 400,000 hare ubcription option to Mr. Jean-Paul Agon. Mr. Agon waived the right to 200,000 of uch option. He therefore benefit from 200,000 tock option under the Plan decided by the Board of Director at it meeting on April 22 nd, 2011. 7 There were 14,298,484 outtanding option granted by the Board of Director within the cope of the authoriation voted by the Annual General Meeting and not yet exercied at December 31 t, 2013, at an average price of 72.24, namely 2.36% of the 605,901,887 hare making up the hare capital at uch date. REGISTRATION DOCUMENT / L ORÉAL 2013 247

7 LONG-TERM STOCK MARKET INFORMATION SHARE CAPITAL INCENTIVE PLANS 7.4.2.2. STOCK OPTIONS TO PURCHASE OR SUBSCRIBE FOR SHARES GRANTED TO EMPLOYEES OTHER THAN EXECUTIVE OFFICERS OF L ORÉAL OR EXERCISED BY THEM DURING THE 2013 FINANCIAL YEAR Option granted by L Oréal parent company to the ten employee (1) to whom the larget number of tock option wa granted Option held with regard to L Oréal parent company exercied by the ten employee (1) who have thu purchaed or ubcribed for the larget number of option Total number of option granted/hare Weighted ubcribed or average purchaed price Plan of 12/03/03 (A) Plan of 12/03/03 (S) Plan of 03/24/04 (S) Plan of 12/01/04 (S) Plan of 06/29/05 (S) Plan of 11/30/05 (A) Plan of 11/30/05 (S) Plan of 04/25/06 (S) Plan of 12/01/06 (S) Plan of 11/30/07 (S) No tock option granted in 2013 NA - - - - - - - - - - 721,934 78.77 30,000 0 0 5,000 50,000 39,934 90,000 0 227,000 280,000 (1) Employee other than executive officer of L Oréal parent company or employee of companie included in the cope of grant of the tock option. 7.4.2.3. OPTIONS THAT MAY BE EXERCISED UNDER THE MARCH 25 th, 2009 PLAN The exercie period for the tock option granted on March 25 th, 2009 will be open a from March 26 th, 2014 and until March 25 th, 2019. The exercie of the option granted to the Executive Committee member at the date of grant wa ubject to fulfilment of performance condition. At it meeting on February 10 th, 2014, the Board of Director recorded that the performance level achieved during the 4 year taken into account within the cope of the March 25 th, 2009 Plan, namely 2010, 2011, 2012 and 2013, exceeded the level et to make it poible to exercie all the tock option granted. Accordingly, a the Executive Committee member will fulfil the condition of the Plan on March 25 th, 2014 and in particular the condition of continued preence in the Company, they will be able exercie their option until March 25 th, 2019. Stock option Plan of 03.25.2009 Performance condition related to the tock option granted to the member of the Executive Committee at the date of grant 2010 2011 2012 2013 50% growth in comparable cometic ale a compared to the increae in the cometic market 50% operating profit + advertiing and promotional expene a compared to cometic ale +1.4 point (+5.6%/+4.2%) 47.05% (8,534.3/18,139.1) * Evolution of cometic market: ource L Oréal (ee chapter1 page 13 ). +0.4 point (+5%/+4.6%) 47.80% (9,017;9/18,870.8) +0.9 point (+5.5%/+4.6%) 47.20% (9,815,7/20,811.9) Arithmetical mean of the performance for financial year 2010/2011/2012/2013 +1.4 point * (+5.2%/+3.8%) * +1 point 47.60% (10,145.6/21,314.5) 47.40% 7.4.2.4. TABLES MONITORING THE PERFORMANCE CONDITIONS UNDER THE STOCK OPTION PLANS IN PROCESS Stock option Plan of 04.27.2010 Performance condition related to the tock option granted to the member of the Executive Committee at the date of grant 2011 2012 2013 2014 50% growth in comparable cometic ale a compared to the increae in the cometic market 50% operating profit + advertiing and promotional expene a compared to cometic ale * Evolution of cometic market: ource L Oréal (ee chapter 1 page 18 ). +0.4 point (+ 5%/+4.6%) 47.80% (9,017.9/18,870.8) +0.9 point (+5.5%/+4.6%) 47.20% (9,815.7/20,811.9) +1.4 point * (+5.2%/+3.8%)* to come 47.60% (10,145.6/21,314.5) to come 248 REGISTRATION DOCUMENT / L ORÉAL 2013

STOCK MARKET INFORMATION SHARE CAPITAL LONG-TERM INCENTIVE PLANS Stock option Plan of 04.22.2011 Performance condition related to the tock option granted to all the beneficiarie 2012 2013 2014 2015 50% growth in comparable cometic ale a compared to that of a panel of competitor * 50% change in the Group operating profit +0.8 point (+5.5%/+4.7%) +12.30% (3,292.6/3,697.3) +1.3 point (+5.2%/+3.9%) to come to come +4.80% (3,697.3/3,874.8) to come to come * Panel of competitor: Procter & Gamble, Unilever, Etée Lauder, Shieido, Beierdorf, Johnon & Johnon, Henkel, LVMH, Kao, Revlon, Elizabeth Arden. 7.4.3. Plan for the Conditional Grant of Share (ACA) 7.4.3.1. AUTHORISATION OF THE ORDINARY AND EXTRAORDINARY GENERAL MEETING OF APRIL 26 th, 2013 The Ordinary and Extraordinary General Meeting of April 26 th, 2013 gave the Board of Director the authoriation to carry out free grant of exiting hare and/or hare to be iued of the Company to employee and executive officer of the Company and of it French or foreign affiliate under the condition of Article L. 225-197-2 of the French Commercial Code. The Ordinary and Extraordinary General Meeting et the period of validity of thi authoriation, which may be ued on one or more occaion, at 26 month a from uch meeting. The total number of free hare granted in thi manner may not repreent more than 0.6% of the hare capital recorded on the date of the Board of Director deciion. The number of free hare granted to the Company executive officer may not repreent more than 10% of the total number of free hare granted during a financial year puruant to the reolution adopted at the above meeting. The Board of Director will determine the identity of the beneficiarie of the free grant of hare and the number of free hare granted a well a the condition to be met in order for the hare to finally vet, and in particular the performance condition. Thee performance condition will take into account: partly, growth in L Oréal comparable cometic ale a compared to thoe of a panel of it bigget direct competitor; partly, growth in L Oréal conolidated operating profit. The grant of uch hare to their beneficiarie will become final and binding, ubject to atifaction of the other condition et at the time of grant, for all or part of the hare granted: The grant of thee hare to their beneficiarie will become final and binding prior to the expiry of the above-mentioned veting period in the event of diability of the beneficiary correponding to claification in the econd or third categorie provided for in Article L. 341-1 of the French Social Security Code (Code de la écurité ociale) and uch hare will be freely tranferable in the event of diability of the beneficiary correponding to claification in the above-mentioned categorie under the French Social Security Code. The Board of Director will be able to provide for veting and holding period which are longer than the minimum period et above. The mechanim for the Conditional Grant of Share to employee complie with the AFEP-MEDEF Code of Corporate governance of June 2013 and in particular: any conditional grant of hare to the executive officer will be decided by the Board of Director after aement of their performance; the final veting of all or part of the hare will be linked to performance condition to be met that are et by the Board; the executive officer will be obliged to retain 50% of the hare that are definitively granted to them at the end of the veting period in regitered form until the termination of their dutie; an executive officer may not be granted any hare at the time of hi departure. 7.4.3.2. CONDITIONAL GRANTS OF SHARES GRANTED WITHIN THE FRAMEWORK OF THE AUTHORISATION OF APRIL 26 th, 2013 (ACA PLAN OF APRIL 26 th, 2013) On the bai of the propoal made by the General Management and examined by the Human Reource and Remuneration Committee, the Board of Director decided, at it meeting on April 26 th, 2013, to make a conditional grant of hare within the cope of the authoriation granted by the Annual General Meeting on the ame date. 7 either at the end of a minimum veting period of four year, in uch cae without any minimum holding period; or at the end of a minimum veting period of two year, it being pecified that the beneficiarie will then be required to hold thee hare for a minimum period of two year after the date of the final award thereof. The hare capital at April 26 th, 2013 conited of 605,540,171 hare, which gave the poibility to ditribute 3,633,241 hare. The Board of Director ued thi authoriation at it meeting of April 26 th, 2013, by granting 1,057,820 free hare to 2,092 beneficiarie, the fair unit value of thee hare amounting to 112.37 for French tax and ocial ecurity reident and 119.87 for non-reident. Thi i a free grant of exiting hare. REGISTRATION DOCUMENT / L ORÉAL 2013 249

7 LONG-TERM STOCK MARKET INFORMATION SHARE CAPITAL INCENTIVE PLANS Veting of the hare i ubject to a dual condition of: preence: the hare granted will only finally vet after a period of 4 year at the end of which the beneficiary mut till be an employee of the Group (ave the exception provided for by law or the Plan regulation); performance: veting of all or part of 50% of the hare granted will depend on the growth in comparable cometic ale for financial year 2014, 2015 and 2016 a compared to thoe of a panel of L Oréal bigget direct competitor coniting of Procter & Gamble, Unilever, Etée Lauder, Shieido, Beierdorf, Johnon & Johnon, Henkel, LVMH, Kao, Revlon and Elizabeth Arden, veting of all or part of 50% of the hare granted will depend on growth in the Group conolidated operating profit, over the ame period. The calculation will be made on the bai of the arithmetical mean of the performance for the 2014, 2015 and 2016 financial year. In order for it to be poible for all the free hare granted to be finally acquired, in repect of the criterion related to ale, for the beneficiarie at the end of the veting period, L Oréal mut achieve a performance which i at leat a good a the average increae in ale of the panel of competitor. No hare will finally vet, in repect of the criterion related to operating profit, if it doe increae in abolute value over the period. The Human Reource and Remuneration Committee i reponible for communicating to the Board of Director the level of indicator recorded for the year to be ued for the calculation of the performance condition. The Board of Director record, at the appropriate time, the level of performance achieved on which the number of hare that finally vet depend. The data recorded year after year to determine the level of performance achieved are publihed in the Annual Financial Report. The veting of the firt 200 conditional hare i not ubject to fulfilment of the performance condition except for the member of the Executive Committee including the Chairman and Chief Executive Officer. At the end of the veting period, beneficiarie who are French reident at the date of grant of the hare will be obliged to retain the hare that have veted for an additional period of 2 year during which thee hare are non-tranferable. 7.4.3.3. EXISTING CONDITIONAL GRANTS OF SHARES AT DECEMBER 31 t, 2013 Date of authoriation by the Extraordinary General Meeting 04.16.2009 04.22.2011 04.22.2011 04.26.2013 Date of grant by the Board of Director 04.27.2010 04.22.2011 04.17.2012 04.26.2013 Total number of hare conditionally 450,000 1,038,000 1,325,050 1,057,820 granted Of which the ten employee other than 6,000 92,000 185,000 146,700 executive officer granted the larget number of hare (1) Number of beneficiarie 1,418 1,991 2,177 2,092 Performance condition: 25% growth in comparable ale a compared to increae in the cometic market 75% ratio of operating profit a compared to publihed cometic ale 50% growth in comparable cometic ale a compared to that of a panel of competitor (2) 50% growth in the L Oréal Group conolidated operating profit 50% growth in comparable cometic ale a compared to that of a panel of competitor (2) 50% growth in the L Oréal Group conolidated operating profit 50% growth in comparable cometic ale a compared to that of a panel of competitor (2) 50% growth in the L Oréal Group conolidated operating profit Date of final veting for French tax 04.27.2014 04.22.2015 04.17.2016 04.26.2017 reident at the date of grant Date of final veting for non-french tax 04.27.2014 04.22.2015 04.17.2016 04.26.2017 reident at the date of grant End of the waiting period for French tax reident at the date of grant 04.27.2016 04.22.2017 04.17.2018 04.26.2019 (1) Employee who are not executive officer of L Oréal parent company or employee of companie included within the cope of the grant of hare. (2) Procter & Gamble, Unilever, Etée Lauder, Shieido, Beierdorf, Johnon & Johnon, Henkel, LVMH, Kao, Revlon, Elizabeth Arden. 250 REGISTRATION DOCUMENT / L ORÉAL 2013

STOCK MARKET INFORMATION SHARE CAPITAL LONG-TERM INCENTIVE PLANS 7.4.3.4. SHARES GRANTED TO THE TEN EMPLOYEES OTHER THAN EXECUTIVE OFFICERS TO WHOM THE LARGEST NUMBER OF SHARES HAVE BEEN GRANTED The total number of hare granted in 2013 to the ten employee other than corporate officer who received the larget number of hare amount to 146,700 hare 7.4.3.5 SHARES THAT HAVE FINALLY VESTED WITHIN THE SCOPE OF THE APRIL 27 th, 2010 PLAN taken into conideration within the cope of the April 27 th, 2010 Plan, namely 2011, 2012 and 2013, exceeded the level et for the conditional grant of all the hare (ACA). Accordingly, the beneficiarie who meet the condition under the Plan on April 27 th, 2014, and in particular the condition of preence in the Company, will receive all the hare that were granted to them. For information purpoe, no conditional grant of hare (ACA) wa made to the executive officer under thi Plan. The Board of Director recorded at it meeting on February 10 th, 2014 that the performance level achieved during the three year TABLE MONITORING PERFORMANCE CONDITIONS: ACA PLAN OF APRIL 27 th, 2010 ACA Plan of April 27 th, 2010 2011 2012 2013 Arithmetical mean of performance for financial year 2011/2012/2013 25% Growth in comparable cometic ale a compared to the increae in the cometic market 75% Ratio of Operating profit for cometic veru publihed cometic ale +0.4 point +0.9 point +1.4 point* +0.9 point (+5%/+4.6%) (+5.5%/+4.6%) (+5.2%/+3.8 %)* 16.50% 16.70% 17.30% 16.80% (3,104.4/18,870.8) (3,477.1/20,811.9) (3,686.1/21,314.5) * Evolution of cometic market: ource L Oréal (ee chapter 1 page 13 ). 7.4.3.6. TABLE MONITORING PERFORMANCE CONDITIONS FOR THE ACA PLANS THAT ARE CURRENTLY IN PROGRESS ACA Plan of 04.22.2011 2012 2013 2014 50% growth in comparable cometic ale a compared to that of a panel of competitor * +0.8 point +1.3 point to come (+5.5%/+4.7%) (+5.2%/+3.9%) 50% change in the Group operating profit +12.30% +4.80% to come (3,292.6/3,697.3) (3,697.3/3,874.8) * Panel of competitor: Procter & Gamble, Unilever, Etée Lauder, Shieido, Beierdorf, Johnon & Johnon, Henkel, LVMH, Kao, Revlon, Elizabeth Arden. ACA Plan of 04.17.2012 2013 2014 2015 7 50% growth in comparable cometic ale a compared to that of a panel of competitor * +1.3 point to come to come (+5.2%/+3.9%) 50% change in the Group operating profit +4.80% to come to come (3,697.3/3,874.8) * Panel of competitor: Procter & Gamble, Unilever, Etée Lauder, Shieido, Beierdorf, Johnon & Johnon, Henkel, LVMH, Kao, Revlon, Elizabeth Arden. ACA Plan of 04.26.2013 2014 2015 2016 50% growth in comparable cometic ale a compared to that of a panel to come to come to come of competitor * 50% change in the Group operating profit to come to come to come * Panel of competitor: Procter & Gamble, Unilever, Etée Lauder, Shieido, Beierdorf, Johnon &Johnon, Henkel, LVMH, Kao, Revlon, Elizabeth Arden. REGISTRATION DOCUMENT / L ORÉAL 2013 251

7 THE STOCK MARKET INFORMATION SHARE CAPITAL L ORÉAL SHARE / L ORÉAL SHARE MARKET 7.5. THE L ORÉAL SHARE / L ORÉAL SHARE MARKET 7.5.1. The L Oréal hare 7.5.1.3 DYNAMIC SHAREHOLDER RETURN POLICY 5.13 (3) net earning per hare. 7.5.1.1. INFORMATION ON THE L ORÉAL SHARE Iin code: FR0000120321. 2.50 (4) dividend per hare. A regular increae in the dividend per hare (in euro): Loyalty Bonu code: Dividend + 10% in 2014: FR0011147487. Dividend + 10% in 2015: FR0011356229. x3.4 IN 10 YEARS 2.50 (4) 2.30 2.00 1.80 Dividend + 10% in 2016: FR0011636133. Minimum lot: 1 hare. Par value: 0.20. Trading on the pot market of the Pari Stock Exchange. 0.73 0.64 0.82 1.38 1.18 1.00 1.50 1.44 Eligible for the Deferred Settlement Service (SRD). Unponored American Depoitary Receipt are freely traded in the United State through certain bank operating in the United State. 7.5.1.2. STOCK MARKET DATA Price at December 31 t, 2013 127.70 Average of lat 30 day cloing price for 2013 124.95 High 137.85 at May 2 nd, 2013 Low 103.65 at January 8 th, 2013 Annual hare price increae at December 31 t, 2013 L Oréal +21.73% CAC 40 +17.99% Euronext 100 +18.97% DJ Euro Stoxx 50 +17.95% Stoxx Europe 600 Peronal and Houehold Good + 14.04% Market capitaliation at December 31 t, 2013 77.37 billion (1) At December 31 t, 2013, the L Oréal hare weighed: in the CAC 40 3.64% in the Euronext 100 (2) 3.95% in the DJ Euro Stoxx 50 1.60% in the Stoxx Europe 600 Peronal and Houehold Good 7.96% 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Share of profit dedicated to dividend (5) (a %): 46.3% 46.8% 43.9% 44.9% 41.1% 41.3% 39.6% 38.5% 36.0% 36.6% 36.8% 48.7% (6) 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 (1) Out of the number of hare at December 31 t, 2013, i.e. 605,901,887 hare. (2) Baed on the total number of hare for the Euronext 100 index. (3) Diluted net profit excluding non-recurring item, group hare, per hare. (4) Dividend propoed to the Annual General Meeting of April 17 th, 2014. (5) Dividend ditribution rate baed on diluted net profit excluding non-recurring item, group hare, per hare. Taking into account Sanofi not conolidated in the period 2002-2003. (6) Baed on the dividend propoed to the Annual General Meeting of April 17 th, 2014. 252 REGISTRATION DOCUMENT / L ORÉAL 2013

STOCK MARKET INFORMATION SHARE CAPITAL THE L ORÉAL SHARE / L ORÉAL SHARE MARKET 7.5.2. L Oréal hare market 7.5.2.1. TRADING VOLUMES AND CHANGE IN THE PRICE OF THE COMPANY S SHARE According to NYSE-Euronext data, the only tock market for which reliable retropective tatitic could be collected. Price in Average daily trading volume ( million) Date High Low Average 2011 January 86.95 82.27 84.30 70.07 February 90.00 82.14 86.14 93.47 March 85.37 76.64 81.33 76.43 April 86.83 81.56 84.01 65.73 May 87.48 84.64 85.93 93.32 June 89.56 83.58 86.23 72.33 July 91.24 82.10 86.32 80.18 Augut 84.95 71.00 78.63 102.92 September 76.17 68.83 73.27 105.28 October 81.84 70.73 77.64 76.56 November 80.32 74.15 77.35 71.32 December 80.96 76.73 78.97 56.07 Average daily trading volume Price in ( million) Date High Low Average 2012 January 83.47 79.22 81.39 57.75 February 86.12 80.93 83.94 73.93 March 92.53 85.27 88.87 78.27 April 94.80 88.82 91.89 123.11 May 93.98 88.85 91.44 77.67 June 93.27 86.80 90.24 78.67 July 99.80 89.80 94.28 77.32 Augut 102.50 95.54 100.12 63.04 September 101.15 96.17 97.84 88.43 October 101.85 94.55 97.98 64.40 November 105.85 95.80 100.94 57.64 December 106.40 103.20 104.86 52.32 Average daily trading volume Price in ( million) Date High Low Average 2013 January 114.50 103.65 107.78 51.95 February 115.90 107.55 111.11 73.20 March 124.40 113.60 119.55 86.67 April 136.05 120.30 126.23 93.74 May 137.85 130.35 134.57 82.46 June 131.25 120.15 125.80 75.29 July 131.00 123.40 127.68 61.67 Augut 130.35 121.00 126.78 61.81 September 129.80 123.60 126.71 61.25 October 130.60 120.50 126.02 64.63 November 126.50 120.80 124.41 66.41 December 127.75 122.30 125.17 86.89 Average daily trading volume Price in ( million) Date High Low Average 2014 January 129.20 119.25 124.21 90.06 February 134.75 120.15 123.10 121.84 7 REGISTRATION DOCUMENT / L ORÉAL 2013 253

7 THE STOCK MARKET INFORMATION SHARE CAPITAL L ORÉAL SHARE / L ORÉAL SHARE MARKET Change in the L Oréal hare price compared to the CAC 40 index from January 1 t, 2008 to February 28 th, 2014: 140 120 L'Oréal CAC 40 rebaed on L'Oréal +25.28% 122.75 97.98 5,614.08 100 80 60-21.48% 4,408.08 40 20 0 12/31/2007 03/31/2008 06/30/2008 09/30/2008 12/31/2008 03/31/2009 06/30/2009 09/30/2009 12/31/2009 03/31/2010 06/30/2010 09/30/2010 12/31/2010 03/31/2011 06/30/2011 09/30/2011 12/30/2011 03/30/2012 06/29/2012 09/28/2012 12/31/2012 03/29/2013 06/28/2013 09/30/2013 12/31/2013 02/28/2014 7.5.2.2. TOTAL SHAREHOLDER RETURN Amongt the variou economic and financial indicator ued to meaure hareholder value, L Oréal ha choen to apply the criterion of Total Shareholder Return (TSR). Thi indicator i a ynthetic meaurement that take into account not only the value of the hare but alo the dividend income received (excluding tax credit before January 1 t, 2005). 7.5.2.2.1. 5-year evolution of a portfolio of approximately 15,000 inveted in L Oréal hare with reinvetment of dividend Date of tranaction Nature of tranaction Invetment ( ) Income ( ) Number of hare after the tranaction 12.31.2008 Purchae of 241 hare, at 62.30 15,014.30 241 04.24.2009 Dividend: 1.44 per hare 347.04 241 Reinvetment: purchae of 7 hare at 52.02 364.14 248 05.05.2010 Dividend: 1.50 per hare 372.00 248 Reinvetment: purchae of 5 hare at 76.77 383.85 253 05.04.2011 Dividend: 1.80 per hare 455.40 253 Reinvetment: purchae of 6 hare at 85.79 514.74 259 05.03.2012 Dividend: 2.00 per hare 518.00 259 Reinvetment: purchae of 6 hare at 92.84 557.04 265 05.10.2013 Dividend: 2.30 per hare 609.50. 265 Reinvetment: purchae of 5 hare at 134.05 670.25 270 TOTAL 17,504.32 2,301.94 TOTAL NET INVESTMENT 15,202.38 Portfolio value at 12.31.2013 (270 hare at 127.70): 34,479.00. The initial capital ha thu been multiplied by 2.30 over 5 year (5-year inflation rate = 7.37% - Source INSEE) and the final capital i 2.27 time the total net invetment. The Total Shareholder Return of the invetment i thu 17.9% per year (auming that the hare are old on December 31 t, 2013, excluding tax on capital gain). Over the ame period, the CAC 40 index increaed by +10.33% per year (1). NOTE: Any income tax that may be paid by the invetor a a reult of the ucceive dividend payment i not taken into account. (1) Reinveted dividend; ource: Datatream. 254 REGISTRATION DOCUMENT / L ORÉAL 2013

STOCK MARKET INFORMATION SHARE CAPITAL THE L ORÉAL SHARE / L ORÉAL SHARE MARKET 7.5.2.2.2. 10-year evolution of a portfolio of approximately 15,000 inveted in L Oréal hare with reinvetment of dividend Date of tranaction Nature of tranaction Invetment ( ) Income ( ) Number of hare after the tranaction 12.31.2003 Purchae of 231 hare, at 65.00 15,015.00 231 05.14.2004 Dividend: 0.73 per hare, excluding tax credit 168.63 231 Reinvetment: purchae of 3 hare at 63.65 190.95 234 05.11.2005 Dividend: 0.82 per hare, excluding tax credit 191.88 234 Reinvetment: purchae of 4 hare at 56.50 226.00 238 05.10.2006 Dividend: 1.00 per hare 238.00 238 Reinvetment: purchae of 4 hare at 72.65 290.60 242 05.03.2007 Dividend: 1.18 per hare 285.56 242 Reinvetment: purchae of 4 hare at 86.67 346.68 246 04.30.2008 Dividend: 1.38 per hare 339.48 246 Reinvetment: purchae of 5 hare at 76.21 381.05 251 04.24.2009 Dividend: 1.44 per hare 361.44 251 Reinvetment: purchae of 7 hare at 52.02 364.11 258 05.05.2010 Dividend: 1.50 per hare 387.00 258 Reinvetment: purchae of 6 hare at 76.77 460.62 264 05.04.2011 Dividend: 1.80 per hare 475.20 264 Reinvetment: purchae of 6 hare at 85.79 514.74 270 05.03.2012 Dividend: 2.00 per hare 540.00 270 Reinvetment: purchae of 6 hare at 92.84 557.04 276 05.10.2013 Dividend: 2.30 per hare 634.80 276 Reinvetment: purchae of 5 hare at 134.05 670.25 281 TOTAL 19,017.04 3,621.99 TOTAL NET INVESTMENT 15,395.05 Portfolio value at 12.31.2013 (281 hare at 127.70): 35,883.70 The initial capital ha thu been multiplied by 2.39 over 10 year (10-year inflation rate = 17.1% Source INSEE) and the final capital i 2.33 time the total net invetment. The Total Shareholder Return of the invetment i thu: 8.92% per year (auming that the hare are old on December 31 t, 2013, excluding tax on capital gain). Over the ame period, the CAC 40 index increaed by +5.64% per year (1). NOTE: Any income tax that may be paid by the invetor a a reult of the ucceive dividend payment i not taken into account. 7 (1) Reinveted dividend; ource: Datatream. REGISTRATION DOCUMENT / L ORÉAL 2013 255

7 THE STOCK MARKET INFORMATION SHARE CAPITAL L ORÉAL SHARE / L ORÉAL SHARE MARKET 7.5.2.2.3. 20-year evolution of a portfolio of approximately 15,000 inveted in L Oréal hare with reinvetment of dividend and hare attribution right Date of tranaction Nature of tranaction Invetment ( ) Income ( ) Number of hare after the tranaction 12.31.1993 Purchae of 75 hare, at 198.95 14,921.25 75 06.28.1994 Dividend: 1.64645 per hare, excluding tax credit 123.48 75 Reinvetment: purchae of 1 hare at 167.69 167.69 76 06.28.1995 Dividend: 1.85988 per hare, excluding tax credit 141.35 76 Reinvetment: purchae of 1 hare at 185.84 185.84 77 06.28.1996 Dividend: 2.02757 per hare, excluding tax credit 156.12 77 Reinvetment: purchae of 1 hare at 260.54 260.54 78 07.01.1996 Iue of bonu hare (1 for 10) 85 07.31.1996 Compenation for 8 unued hare attribution right 182.85 85 at 22.85668 per right Reinvetment: purchae of 1 hare at 236.91 236.91 86 07.01.1997 Dividend: 2.13429 per hare, excluding tax credit 183.55 86 Reinvetment: purchae of 1 hare at 393.93 393.93 87 06.12.1998 Dividend: 2.43918 per hare, excluding tax credit 212.21 87 Reinvetment: purchae of 1 hare at 473.05 473.05 88 06.15.1999 Dividend: 2.82031 per hare, excluding tax credit 248.19 88 Reinvetment: purchae of 1 hare at 586.50 586.50 89 06.15.2000 Dividend: 3.40 per hare, excluding tax credit 302.60 89 Reinvetment: purchae of 1 hare at 825.00 825.00 90 07.03.2000 Ten-for-one hare plit 900 06.08.2001 Dividend: 0.44 per hare, excluding tax credit 396.00 900 Reinvetment: purchae of 6 hare at 78.15 468.90 906 06.04.2002 Dividend: 0.54 per hare, excluding tax credit 489.24 906 Reinvetment: purchae of 7 hare at 74.95 524.65 913 05.27.2003 Dividend: 0.64 per hare, excluding tax credit 584.32 913 Reinvetment: purchae of 10 hare at 61.10 611.00 923 05.14.2004 Dividend: 0.73 per hare, excluding tax credit 673.79 923 Reinvetment: purchae of 11 hare at 63.65 700.15 934 05.11.2005 Dividend: 0.82 per hare 765.88 934 Reinvetment: purchae of 14 hare at 56.50 791.00 948 05.10.2006 Dividend: 1.00 per hare 948.00 948 Reinvetment: purchae of 14 hare at 72.65 1,017.10 962 05.03.2007 Dividend: 1.18 per hare 1,135.16 962 Reinvetment: purchae of 14 hare at 86.67 1,213.38 976 04.30.2008 Dividend: 1.38 per hare 1,346.88 976 Reinvetment: purchae of 18 hare at 76.21 1,371.78 994 04.24.2009 Dividend: 1.44 per hare 1,431.36 994 Reinvetment: purchae of 28 hare at 52.02 1,456.42 1,022 05.05.2010 Dividend: 1.50 per hare 1,533.00 1,022 Reinvetment: purchae of 20 hare at 76.77 1,535.40 1,042 05.04.2011 Dividend: 1.80 per hare 1,875.60 1,042 Reinvetment: purchae of 22 hare at 85.79 1,887.38 1,064 05.03.2012 Dividend: 2.00 per hare 2, 128.00 1,064 Reinvetment: purchae of 23 hare at 92.84 2,135.32 1,087 05.10.2013 Dividend: 2.30 per hare 2,500.10 1,087 Reinvetment: purchae of 19 hare at 134.05 2,546.95 1,106 TOTAL 34,310.14 17,357.69 TOTAL NET INVESTMENT 16,952.45 256 REGISTRATION DOCUMENT / L ORÉAL 2013

STOCK MARKET INFORMATION SHARE CAPITAL INFORMATION POLICY Portfolio value at 12.31.2013 (1,106 hare at 127.70): 141,236.20. The initial capital ha thu been multiplied by 9.47 over 20 year (20-year inflation rate = 36.37% Source: INSEE) and the final capital i 8.33 time the total net invetment. The Total Shareholder Return of the invetment i thu 11.50% per year (auming that the hare are old on December 31 t, 2013, excluding tax on capital gain). Over the ame period, the CAC 40 index increaed by +6.47% per year (1). NOTE: Any income tax that may be paid by the invetor a a reult of the ucceive dividend payment i not taken into account. 7.5.2.3. DIVIDENDS The limitation period for dividend i five year. Any dividend for which payment ha not been requeted are paid to the Caie de Dépôt et Conignation. 7.6. INFORMATION POLICY L Oréal i puruing it policy of ongoing improvement in the quality of it financial information and dialogue with it hareholder and French and international invetor. Beyond it legal obligation, thee effort are aimed at enabling all thoe in contact with the Financial Communication Department to get a better undertanding of L Oréal buine market and the potential of the beauty market. on the calendar: annual reult, Annual General Meeting, half-year reult, utainability commitment for 2020, etc. the www.loreal-finance.com webite, dedicated to financial information, wa revamped and modernied in term of content, architecture and ergonomic in order to offer a better level of ervice and eaier acceibility a from the pring of 2013; 7.6.1. New, modern and complementary communication media In 2013, L Oréal Financial Communication Department provided to the financial community a wealth of information uing variou tool that have now been updated: extra-financial information: hareholder and invetor expect iuer to give more ene to financial performance and to the Company buine activitie. For that reaon, extrafinancial information i now provided to upplement financial information in all the Group publication: Activity Report, letter to hareholder, e-newletter and our hareholder e-magazine; modern digital communication: Alongide our printed communication material, an application and electronic media have been put in place to enrich the circulation of our communication: 1. a mobile application available in French and Englih verion for iphone. ipad and Android led to everal thouand of download and offer a mobility olution that i highly appreciated by both profeional and individual invetor, 2. L Oréal hareholder e-magazine, intended not only for our hareholder but alo for all thoe who are looking for full information on the life of the Group, offer information mainly from a buine angle, enriched with a large number of document, video. interview and tetimonial, 3. in 2013. Five e-newletter were ent to all the contact in the Financial Communication Department databae at the time of the major financial and other important event L Oréal again publihed in 2013 a coherent et of 3 eential document preenting comprehenively all the apect of it buine: Activity Report, Regitration Document and Sutainable Development Report; the guide decribing the 5 reaon to take part in the L Oréal adventure wa re-publihed in the autumn of 2013 for the Actionaria Stock Market fair. Thi publication, which ha innovative content and format, i deigned to fulfil our hareholder deire to make more ene of their invetment; the leaflet decribing the advantage of becoming a regitered hareholder ha alo been revied in order to better anwer the quetion from the Group hareholder regarding thi method of holding hare. In all, L Oréal Financial Communication Department make a vat array of communication tool available to the financial community: the Activity Report; the Regitration Document; financial new releae; extra-financial new releae; letter to hareholder (Finance Letter); the dedicated webite www.loreal-finance.com in it new verion; the hareholder e-magazine (Finance Mag); e-newletter (Finance New); a mobile application available on ipad. iphone and Android. 7 (1) Reinveted dividend; ource: Datatream. REGISTRATION DOCUMENT / L ORÉAL 2013 257

7 INFORMATION STOCK MARKET INFORMATION SHARE CAPITAL POLICY Strongly committed to it communication policy. L Oréal offer all hareholder and invetor unretricted acce to thee media or material. Everyone can acce and download them or can be ent them free-of-charge. 7.6.2 A large number of hareholder event for a regular and detailed dialogue A it doe every year, the Financial Communication Department organied financial information meeting or telephone conference for analyt and intitutional invetor, to which journalit pecialiing in the cometic ector are invited. The preentation of the L Oréal Group financial reult and the buine activitie of the Operational Diviion are broadcat live online on the financial webite www. loreal-finance.com. All the information preented i made available on the webite, on the ame day a their publication, both for the annual reult and the half-year reult. 10 meeting with hareholder, organied in different form in everal large provincial citie in France and alo in foreign countrie, in collaboration with the French Individual Invetor and Invetment Club Federation (Fédération de Invetieur Individuel et de Club d Invetiement F2iC), the Society of Invetor Relation Manager in France (Cercle de Liaion de Informateur Financier en France CLIFF), hareholder aociation and financial newpaper brought together over 2.000 participant. In 2013, the Individual Shareholder Relation Department organied ite viit (to plant) and hareholder meeting in the Group hair academie, which were a great ucce. Participation in the Actionaria Stock Market Fair for the tenth year running offered an opportunity for over 700 people to attend a preentation by Mr. Jean-Paul Agon, Chairman and Chief Executive Officer. Many hareholder were alo able to meet repreentative of the L Oréal Group directly and obtain information on regitering their hare. Through all thee event, the Individual Shareholder Relation Department team had the opportunity to meet nearly 6.000 individual hareholder in 2013. One ymbol of the loyalty of our hareholder who accompany the Group development over the long term i the fact that more and more hareholder are howing an interet in becoming regitered hareholder. Thank to the preferential dividend and the numerou advantage offered by thi method of hareholding, becoming a regitered hareholder enable the Group hareholder to be known to the Group, to have ytematic acce to information, and to be cloely involved in the Group development. Created in 2010, the Shareholder Conultation Committee coniting of 18 hareholder (both regitered and bearer hareholder) who actively participate, through their reflection and their work, in developing and enriching the Group financial communication on theme uch a: the Annual General Meeting, digital communication, Reearch and Innovation or overhaul of the www.loreal-finance.com webite. In 2013, the Shareholder Conultation Committee met four time. The Invetor Relation Department organie numerou meeting throughout the year with intitutional invetor of the main international financial market place. In 2013, they thu met nearly 650 invetor. Finally, a freephone ervice i available to L Oréal hareholder calling from France (0 800 66 66 66) or other countrie (+33 1 40 14 80 50). An interactive vocal erver give hareholder round-the-clock acce to information on the hare price and key date or provide them with a ummary of the latet pre releae. The Shareholder Service Department i alo available on thi number during opening hour. In 2013, the Group received everal award for it financial communication policy: On October 1 t, 2013, L Oréal Financial Communication Department wa awarded two prize: the Tranparency prize for all it financial communication and the Regitration Document prize by the jury at the Tranparency Award; On December 2 nd, 2013, Mr. Chritian Mulliez. Executive-Vice- Preident Adminitration and Finance received the Trophy for the bet Chief Financial Officer in the field of invetor relation for all categorie combined, awarded by the Invetor Relation forum. 258 REGISTRATION DOCUMENT / L ORÉAL 2013

STOCK MARKET INFORMATION SHARE CAPITAL INFORMATION POLICY 7.6.3. Financial calendar for 2014 02.10.2014 2013 Annual reult April 2014 * Firt quarter 2014 ale 04.17. 014 Annual General Meeting 07.31.2014 Firt haft 2014 reult October 2014 * Sale at September 30, 2014 * Exact date will appear on the L Oréal webite: www.moreal-finance.com. 7.6.4. Financial new releae in 2013 02.11.2013 Annual Reult 2012: Strong growth in ale and profit 03.18.2013 Reignation of Sir Linday Owen-Jone from the Board of Director/Appointment of M. Virginie Morgon 03.20.2013 Annual General Meeting on April 26 th, 2013/2012 Reference Document 04.15.2013 L Oréal acquire beauty firm Interconumer Product in Kenya 04.18.2013 Firt quarter 2013 ale: A very olid firt quarter 04.26.2013 Annual General Meeting on April 26 th, 2013 05.17.2013 New appointment within the Executive Committee of L Oréal 07.16.2013 Firt-half 2013 ale: the Group good growth dynamic continue 08.15.2013 L Oréal announce propoal to acquire Magic Holding in China 08.29.2013 Firt-half 2013 reult: Record operating profit 08.30.2013 Poting online of 2013 Half-year Financial Report 09.20.2013 L Oréal acquire Cheryl Comeceutical in India 10.15.2013 L Oréal announce the acquiition by The Body Shop of a majority take in Brazil Emporio Body Store 10.17.2013 Draft agreement between L Oréal and Shieido for the acquiition of Decléor and Carita 10.23.2013 L Oréal announce it new utainability commitment for 2020 Sharing beauty with all 10.30.2013 Sale at September 30, 2013: L Oréal continue to improve it worldwide poition 11.19.2013 Beauté Créateur. a mail order ubidiary of L Oréal, ha announced the intention to ceae it activity 11.21.2013 L Oréal create a Group Travel Retail Diviion 11.29.2013 Board of Director Meeting on November 29 th, 2013 12.13.2013 The Body Shop finalie the acquiition of 51% in Brazil Emporio Body Store 7 REGISTRATION DOCUMENT / L ORÉAL 2013 259

260 REGISTRATION DOCUMENT / L ORÉAL 2013

8 ANNUAL GENERAL MEETING 8.1. DRAFT RESOLUTIONS AND REPORT OF THE BOARD OF DIRECTORS TO THE ANNUAL GENERAL MEETING TO BE HELD ON APRIL 17 th, 2014 (AS OF FEBRUARY 10 th, 2014) 263 8.2. STATUTORY AUDITORS SPECIAL REPORT ON THE CANCELLATION OF SHARES PURCHASED BY THE COMPANY 276 8.1.1. Ordinary part 263 8.1.2. Extraordinary part 272 REGISTRATION DOCUMENT / L ORÉAL 2013 261

8 ANNUAL GENERAL MEETING Thi chapter preent the Report of the Board of Director on the draft reolution and the full text of the reolution which will be ubmitted to L Oréal Ordinary and Extraordinary General Meeting. Thi General Meeting will be held on April 17 th, 2014 at the Palai de Congrè, in Pari. DRAFT AGENDA ORDINARY PART 1. Approval of the 2013 parent company financial tatement 2. Approval of the 2013 conolidated financial tatement 3. Allocation of the Company net income for 2013 and declaration of the dividend 4. Appointment of M. Belen Garijo a Director 5. Renewal of the tenure a Director of Mr. Jean-Paul Agon 6. Renewal of the tenure a Director of Mr. Xavier Fontanet 7. Setting of the annual amount of attendance fee allocated to the member of the Board of Director 8. Adviory vote on the component of remuneration due or allocated to the Chairman and Chief Executive Officer in repect of the 2013 financial year 9. Authoriation for the Company to buy back it own hare 10. Approval of the buyback agreement concerning the acquiition by L Oréal from Netlé of 48,500,000 L Oréal hare repreenting 8% of the hare capital within the cope of related party agreement procedure EXTRAORDINARY PART 11. Authoriation to the Board of Director to reduce the hare capital by cancelling hare purchaed by the Company under Article L. 225-209 and L. 225-208 of the French Commercial Code 12. Amendment of the Article of Aociation to determine the condition in which the Director repreenting the employee are to be appointed 13. Power for formalitie 262 REGISTRATION DOCUMENT / L ORÉAL 2013

ANNUAL GENERAL MEETING DRAFT RESOLUTIONS AND REPORT OF THE BOARD OF DIRECTORS TO THE ANNUAL GENERAL MEETING TO BE HELD ON APRIL 17 th, 2014 (AS OF FEBRUARY 10 th, 2014) 8.1. DRAFT RESOLUTIONS AND REPORT OF THE BOARD OF DIRECTORS TO THE ANNUAL GENERAL MEETING TO BE HELD ON APRIL 17 th, 2014 (AS OF FEBRUARY 10 th, 2014) 8.1.1. Ordinary part RESOLUTIONS 1, 2 AND 3: APPROVAL OF THE PARENT COMPANY AND CONSOLIDATED FINANCIAL STATEMENTS, ALLOCATION OF THE COMPANY S NET INCOME FOR 2013 AND DECLARATION OF THE DIVIDEND Statement of reaon Having reviewed the Report of the Board of Director and the Statutory Auditor, the Annual General Meeting i called on to approve: The detail of thee financial tatement are et out in the 2013 Annual Financial Report and the main data included in the file for calling thi Annual General Meeting. The Board of Director propoe to the Annual General Meeting: the parent company financial tatement, with an income tatement which how net income of 2,366,052,070.73 for 2013, compared with 2,407,976,604.53 in 2012; An ordinary dividend of 2.50 per hare, repreenting an increae of 8.7% compared with the dividend for the previou year. the 2013 conolidated financial tatement. The rate of ditribution of the ordinary dividend (ordinary dividend paid/net income excluding non-recurrent item, diluted, Group hare, per hare) would be 48.7% and would thu continue to rie: Year 2008 2009 2010 2011 2012 Rate of ditribution 41.3% 43.9% 44.9% 46.3% 46.8% A preferential dividend of 2.75 per hare. The preferential dividend will be granted to the hare held in regitered form ince December 31 t, 2011 at the latet, and which continuouly remain in regitered form until the dividend payment date in 2014. The number of hare giving entitlement to uch preferential dividend cannot exceed 0.5% of hare capital for any one hareholder. Firt reolution: Approval of the 2013 parent company financial tatement The Annual General Meeting, having reviewed the Report of the Board of Director and the Statutory Auditor, approve the Report of the Board of Director and the 2013 parent company financial tatement, a preented and the tranaction included in thee financial tatement and ummaried in thee report, howing net income of 2,366,052,070.73 compared with 2,407,976,604.53 for 2012. If the Annual General Meeting approve thi propoal, the ex-dividend date for the dividend (both ordinary and preferential) will be April 29 th, 2014 and they will be paid on May 5 th, 2014. The amount of the ordinary dividend and the preferential dividend i eligible for the tax deduction provided for in Article 158-3-2 of the French Tax Code. Second reolution: Approval of the 2013 conolidated financial tatement The Annual General Meeting, having reviewed the report of the Board of Director and the Statutory Auditor, approve the 2013 conolidated financial tatement. Third reolution: Allocation of the Company net income for 2013 and declaration of the dividend The Annual General Meeting, on the propoal of the Board of Director, decide to allocate the net income for the 2013 financial year amounting to 2,366,052,070.73 a follow: 8 No allocation to the legal reerve which already repreent over one-tenth of the hare capital Amount allocated to the hareholder a a dividend * (including preferential dividend) 1,523,260,579.75 Balance that will be allocated to the Other reerve item 842,791,490.98 * including an initial dividend equal to 5% of the amount paid up on the hare, i.e. on the total amount of the hare capital. REGISTRATION DOCUMENT / L ORÉAL 2013 263

8 DRAFT ANNUAL GENERAL MEETING RESOLUTIONS AND REPORT OF THE BOARD OF DIRECTORS TO THE ANNUAL GENERAL MEETING TO BE HELD ON APRIL 17 th, 2014 (AS OF FEBRUARY 10 th, 2014) Thi amount i calculated on the bai of the number of hare forming the capital at December 31 t, 2013 and will be adjuted to reflect: the number of hare iued between January 1 t, 2014 and the date of payment of thi dividend following the exercie of tock option or the final veting of new free hare granted and giving entitlement to uch dividend; the final number of hare eligible for the preferential dividend, taking into account ale or tranfer to a bearer account between January 1 t, 2014 and the date of payment of the dividend. The Annual General Meeting therefore declare an ordinary dividend to be paid of 2.50 per hare, the preferential dividend entitling eligible holder to a total of 2.75 per hare. The preferential dividend will be granted to the hare held in regitered form ince December 31 t, 2011 at the latet, and which continuouly remain in regitered form until the dividend payment date, it being pecified that the number of hare giving entitlement to uch preferential dividend cannot exceed 0.5% of hare capital for any one hareholder. The ex-dividend date for the dividend (both ordinary and preferential) will be April 29 th, 2014 and they will be paid on May 5 th, 2014. In the event that, at the time of payment of the dividend, the Company hold treaury hare, the ditributable profit correponding to the unpaid dividend due to the holding of uch hare, would be allocated to the Other reerve item. It i pecified that, a the law currently tand, for natural peron who have their tax reidence in France, the dividend i liable for peronal income tax on the bai of the progreive cale of tax rate and i eligible for the tax deduction provided for in Article 158-3-2 of the French Tax Code. The table et out below give the amount of the dividend ditributed, that were fully eligible for the tax deduction provided for in Article 158-3-2 of the French Tax Code, for the lat three financial year: 2010 2011 2012 Ordinary dividend per hare 1.80 2.00 2.30 Preferential dividend per hare * 0.20 0.23 * The preferential dividend wa ditributed for the firt time in 2012 with repect to the 2011 financial year. RESOLUTIONS 4, 5 AND 6: TENURES AS DIRECTORS Statement of reaon The appointment of a new Director i put to the vote of the Annual General Meeting a well a the renewal of two Director whoe tenure a Director expire at the cloe of thi Annual General Meeting. 1. L Oréal Board of Director at December 31 t, 2013 The Director of L Oreal come from different background. They complement one another due to their different profeional experience, their kill and their nationalitie. They have good knowledge of the Company. The Director are preent, active and cloely involved. Thee are all aet which contribute to the quality of the Board deliberation in the context of the deciion that it i called on to make. The Director have a duty of vigilance and exercie complete freedom of judgment. Thi freedom of judgment enable them in particular to participate, in complete independence, in the deciion or work of the Board and it Committee whoe remit have been extended ince 2011. Jean-Paul Agon, age: 57, joined the L Oreal Group in 1978. Following an international career a General Manager of the Conumer Product Diviion in Greece and of L Oréal Pari in France, International Managing Director of Biotherm, General Manager of L Oréal Germany, Executive Vice-Preident of the Aia Zone, Preident and CEO of L Oréal USA, Jean-Paul Agon wa appointed a Deputy Chief Executive Officer of L Oréal in 2005 and then Chief Executive Officer in April 2006 and finally Chairman and CEO in 2011. A Director of L Oréal ince 2006, he i alo Chairman of the L Oréal Corporate Foundation and Chairman of the Strategy and Sutainable Development Committee. Jean-Paul Agon i alo a Director of Air Liquide. Françoie Bettencourt Meyer, age: 60, the daughter of Mr. Liliane Bettencourt, herelf the daughter of the founder of L Oréal, Eugène Schueller, ha been the Chairwoman of the family-owned holding company Téthy ince January 31 t, 2012 and i the Chairwoman of the Bettencourt Schueller Foundation. Françoie Bettencourt Meyer ha been a Director of L Oréal ince 1997 and a member of the Strategy and Sutainable Development Committee ince April 2012. Peter Brabeck-Letmathe, age: 69, of Autrian nationality, hold the main poition outide L Oréal of Chairman of the Board of Director of Netlé. Peter Brabeck-Letmathe ha been a Director of L Oréal and Vice-Chairman of the Board of Director ince 1997. He ha been a member of the Strategy and Sutainable Development Committee ince 2005, and i a member of the Appointment and Governance Committee and the Human Reource and Remuneration Committee. Paul Bulcke, age: 59, of Belgian nationality, joined Netlé in 1979, and ha been it Chief Executive Officer ince 2008. Paul Bulcke ha been a Director of L Oréal ince 2012, a member of the Strategy and Sutainable Development Committee ince April 2012 and i a Board member of Roche Holding in Switzerland. Charle-Henri Filippi, age: 61, pent hi career within the HSBC Group, in which he wa notably Chairman and Chief Executive Officer of HSBC France from 2004 to 2007 and Chairman of the Board of Director in 2007 and 2008. Charle-Henri Filippi ha 264 REGISTRATION DOCUMENT / L ORÉAL 2013

ANNUAL GENERAL MEETING DRAFT RESOLUTIONS AND REPORT OF THE BOARD OF DIRECTORS TO THE ANNUAL GENERAL MEETING TO BE HELD ON APRIL 17 th, 2014 (AS OF FEBRUARY 10 th, 2014) been a Director of L Oréal ince 2007 and i a member of the Audit Committee (Committee Chairman until February 2013), a Board member of France Telecom, a member of the Superviory Board of Euri and a non-voting member of the Board of Director of Nexity. Xavier Fontanet, age: 65, former Chairman and Chief Executive Officer (1996-2009) and former Chairman of the Board of Director of Eilor (2010-2012), member of the Superviory Board of Schneider Electric, ha been a Director of L Oréal ince 2002 and i Chairman of the Appointment and Governance Committee. Bernard Kariel, age: 67, a former Chief Executive Officer of Lafarge, ha been a Director of L Oréal ince 2004, Chairman of the Human Reource and Remuneration Committee ince 2007 and i a member of the Strategy and Sutainable Development Committee. He i alo a Board member of Arkema and Nucor (United State). Chritiane Kuehne, age: 58, of Swi nationality, i the Head of the Food Strategic Buine Unit at Netlé which he joined in 1977. Chritiane Kuehne ha been a member of L Oréal Board of Director and a member of the Audit Committee ince 2012. Marc Ladreit de Lacharrière, age: 73, member of the Intitut and with L Oréal from 1976 to 1991. Marc Ladreit de Lacharrière ha been a Director of L Oréal ince 1984, i Chairman and Chief Executive Officer of Fimalac, Chairman of Fitch (United State), and a Board member of Caino, Lucien Barrière and Renault. Jean-Pierre Meyer, age: 65, ha been a Director of L Oréal ince 1987, Vice-Chairman of the Board of Director ince 1994, and i a member of the Strategy and Sutainable Development Committee, the Audit Committee, the Appointment and Governance Committee and the Human Reource and Remuneration Committee. He i Vice-Chairman of the Superviory Board and Chief Executive Officer of the familyowned holding company Téthy, a Board member of Netlé and Vice-Chairman of the Bettencourt Schueller Foundation. Jean-Victor Meyer, age: 27, ha been a member of the Superviory Board of the family holding company Téthy ince January 2011. He ha been a Director of L Oréal ince February 2012. Virginie Morgon, age: 44, i Chief Invetment Officer of Eurazéo which he joined in 2008 after working for 16 year at Lazard. She ha been a Director of L Oréal ince April 26 th, 2013 and i a member of the Audit Committee. She i alo a Board member of Accor. Annette Roux, age: 71, Chairperon and Managing Director of Bénéteau from 1976 to 2005, then Vice-Chairperon of the Superviory Board. Annette Roux ha been a member of L Oréal Board of Director ince 2007. She i alo Chairperon of the Bénéteau Corporate Foundation. Loui Schweitzer, age: 71, Chairman and Chief Executive Officer of Renault from 1992 to 2005, Chairman of the Board of Director until 2009. Loui Schweitzer ha been a Director of L Oréal ince 2005, i a member of the Audit Committee and Chairman of that Committee ince February 2013, and a member of the Strategy and Sutainable Development Committee. He i alo a member of the Adviory Committee of Allianz AG (Germany) and Boch (Germany). The tenure a Director of L Oréal, which i renewable, cover a period of four year according to the Article of Aociation or may cover a horter period in order to allow for taggered renewal of the tenure of Director. The Director each hold a minimum of 1,000 L Oréal hare. The complete lit of dutie of the Director i et out on page 33 et eq. of the preent document. 2. Review of the independence of the Director The Appointment and Governance Committee propoe to the Board of Director every year to review on a cae-by-cae bai the ituation of each of the Director with regard to their independence according to the criteria et out in the AFEP- MEDEF Code. The Board of Director of L Oréal i well-balanced. It comprie 14 member at December 31 t, 2013: the Chairman and Chief Executive Officer, Jean-Paul Agon, ix Director appointed by the majority hareholder, three of whom are appointed by the Bettencourt Meyer family and three by Netlé (the two Vice-Chairmen of the Board being choen from among thee member) and even independent Director: Annette Roux, Virginie Morgon Charle-Henri Filippi, Xavier Fontanet, Bernard Kariel, Marc Ladreit de Lacharrière and Loui Schweitzer. The review of the independence of thee Director wa made by the Appointment and Governance Committee at the end of 2013 on the bai, in particular, of the tudy of the relation exiting between the Company and the companie in which the director hold office. The Director have no conflict of interet. The other corporate office and directorhip held, their availability, their peronal contribution and their participation in the work and dicuion of the Board and it Committee in 2013 were taken into conideration by the Appointment and Governance Committee to evaluate the compoition and modu operandi of the Board. 3. Appointment of a new Director in 2014 The Appointment and Governance Committee reviewed the candidacy of a new Director that wa approved by the Board of Director. The propoed appointment of M. Belén Garijo i ubmitted to the Annual General Meeting. M. Belén Garijo, age: 53, of Spanih nationality, i a graduate of the Univerity of Medicine in Madrid. After a few year pent a a reearcher in pharmacology at the Univerity of Madrid, he joined the pharmaceutical indutry, the buine ector in which he ha now worked for 25 year. In 2011 he joined Merck-Serono, a pharmaceutical ubidiary of the German Group Merck of which he i Preident and CEO. In 1992, M. Garijo wa elected a a member of the New York Academy of Science. She ha received everal award a a female executive officer, and in particular the title of CEO for 2009 given by the Expanion magazine in Spain. In 2012, he wa appointed a a member of the Board of Director of BBVA, the econd larget Spanih bank, preent in 40 countrie. 8 REGISTRATION DOCUMENT / L ORÉAL 2013 265

8 DRAFT ANNUAL GENERAL MEETING RESOLUTIONS AND REPORT OF THE BOARD OF DIRECTORS TO THE ANNUAL GENERAL MEETING TO BE HELD ON APRIL 17 th, 2014 (AS OF FEBRUARY 10 th, 2014) M. Garijo will bring to the Board of Director of L Oréal her expertie in the health ector, her international experience, her knowledge of a wide variety of corporate culture and her ene of buine opportunity. Since one of the Board member did not want their tenure to be renewed, the appointment of M. Garijo a an independent Director for a period of four year would increae the number of women on the Board to 5 out of 14 Director, thu leading to a percentage of repreentation of women of 35.7%, and with a number of independent Director of 7 out of 14, thi would give a percentage of independent Director of 50%. 4. Renewal of tenure a Director in 2014 A the tenure a Director of Jean-Paul Agon and Xavier Fontanet expire in 2014, the renewal of their tenure for a period of four year i ubmitted to the Annual General Meeting. Mr Marc Ladreit de Lacharrière did not want the renewal of hi tenure to be ubmitted to the Annual General Meeting. For information purpoe, if the Annual General Meeting vote in favour of the appointment and renewal propoed to it in 2014, the expiry date of the term of office of the 14 Director of L Oréal would be a follow: Expiry date of term of office Director 2015 2016 2017 2018 Jean-Paul Agon X Françoie Bettencourt Meyer X Peter Brabeck-Letmathe X Paul Bulcke X Charle-Henri Filippi X Xavier Fontanet X Bernard Kariel X Chritiane Kuehne X Jean-Pierre Meyer X Jean Victor Meyer X Virginie Morgon X Annette Roux X Loui Schweitzer X Belé n Garijo X Number of renewal per year 2 5 4 3 Fourth reolution: Appointment of M. Belén Garijo a Director The Annual General Meeting, having reviewed the Report of the Board of Director, decide to appoint M. Belén Garijo a Director for a period of four year. Her tenure will expire at the end of the Annual General Meeting to be held in 2018 to review the financial tatement for the previou financial year. Fifth reolution: Renewal of the tenure a Director of Mr. Jean-Paul Agon The Annual General Meeting, having reviewed the Report of the Board of Director, renew the tenure of Mr. Jean-Paul Agon for a period of four year. Hi tenure will expire at the end of the Annual General Meeting to be held in 2018 to review the financial tatement for the previou financial year. Sixth reolution: Renewal of the tenure a Director of Mr. Xavier Fontanet The Annual General Meeting, having reviewed the Report of the Board of Director, renew the tenure of Mr. Xavier Fontanet for a period of four year. Hi tenure will expire at the end of the Annual General Meeting to be held in 2018 to review the financial tatement for the previou financial year. 266 REGISTRATION DOCUMENT / L ORÉAL 2013

ANNUAL GENERAL MEETING DRAFT RESOLUTIONS AND REPORT OF THE BOARD OF DIRECTORS TO THE ANNUAL GENERAL MEETING TO BE HELD ON APRIL 17 th, 2014 (AS OF FEBRUARY 10 th, 2014) RESOLUTION 7: SETTING THE ANNUAL AMOUNT OF ATTENDANCE FEES ALLOCATED TO THE MEMBERS OF THE BOARD OF DIRECTORS Statement of reaon Puruant to the French Law on Employment Security of June 14 th, 2013, Director repreenting the employee will erve on the Board of Director, thu leading to an increae in the number of Director receiving attendance fee. Furthermore, the preparation and holding of meeting of the Board of Director, which have increaed in number, and thoe of it committee, whoe remit have been broadened, require greater availability and growing invetment by Director. It i therefore propoed to the Annual General Meeting that it increae the maximum amount of annual attendance fee allocated to the Board of Director from 1,300,000 to 1,450,000, until a new deciion i made on it part. Thi authoriation would replace that given by the Annual Shareholder Meeting on April 22 nd, 2011. Seventh reolution: Setting of the annual amount of attendance fee allocated to the member of the Board of Director It i propoed to the Annual General Meeting that it allocate a maximum total amount of 1,450,000 to the Board of Director a annual attendance fee, until another deciion i made in thi repect by the Annual General Meeting, leaving it to the Board of Director to decide on the breakdown and payment date of uch attendance fee. RESOLUTION 8: ADVISORY VOTE BY THE SHAREHOLDERS ON THE COMPONENTS OF REMUNERATION DUE OR ALLOCATED TO THE CHAIRMAN AND CHIEF EXECUTIVE OFFICER IN RESPECT OF THE 2013 FINANCIAL YEAR Statement of reaon In accordance with the AFEP-MEDEF Code revied in June 2013 to which L Oréal refer, the component of remuneration due or allocated by the Board of Director on the propoal of the Human Reource and Remuneration Committee to the Chairman and Chief Executive Officer, Mr. Jean-Paul Agon, with repect to the 2013 financial year are preented to the Annual General Meeting for an adviory vote. 8 REGISTRATION DOCUMENT / L ORÉAL 2013 267

8 DRAFT ANNUAL GENERAL MEETING RESOLUTIONS AND REPORT OF THE BOARD OF DIRECTORS TO THE ANNUAL GENERAL MEETING TO BE HELD ON APRIL 17 th, 2014 (AS OF FEBRUARY 10 th, 2014) SUMMARY TABLES OF THE COMPONENTS OF REMUNERATION Component of the Amount remuneration due or or value put to allocated in repect of 2013 the vote Decription Fixed remuneration 2,100,000 At it meeting on February 11 th, 2013, the Board of Director decided, on the propoal of the Human Reource and Remuneration Committee, to maintain the annual gro fixed remuneration of Mr. Jean-Paul Agon at an amount of 2,100,000. Annual variable remuneration 1,837,500 At it meeting on February 10 th, 2014, the Board of Director decided, on the propoal of the Human Reource and Remuneration Committee, to allocate gro variable remuneration of 1,837,500 in repect of 2013, repreenting 87.50% of the target objective. Aement criteria: 50% baed on quantitative objective reflecting the Company performance meaured on the bai of change in the following indicator: growth in comparable ale a compared to the budget market hare a compared to the main competitor operating profit plu advertiing and promotion expene a compared to 2012 net earning per hare a compared to 2012 cah flow a compared to 2012 50% on the bai of an aement of the qualitative apect of management: the appropriatene of trategic choice the quality of leaderhip and management the impact of communication action to help ociety addreing the pecific prioritie for the year 0 Not applicable inamuch a the Board of Director ha not allocated any multi-annual variable remuneration. Multi-annual variable remuneration Exceptional 0 Not applicable inamuch a the Board of Director ha not allocated any exceptional remuneration. remuneration Attendance fee 85,000 At it meeting on November 29 th, 2013, the Board of Director allocated an amount of 85,000 to Mr. Jean-Paul Agon in repect of 2013, compriing: a a Director a fixed part of 30,000 and a variable part of 25,000 depending on attendance (100%); a Chairman of the Strategy and Sutainable Development Committee an additional amount of 30,000. Stock option, performance hare (and any other component of longterm remuneration) 40,000 performance hare valued at 4,494,800, the etimated fair value according to the IFRS applied to prepare the conolidated financial tatement Within the cope of the authoriation of the Ordinary and Extraordinary General Meeting of April 26 th, 2013 (reolution No. 10), the Board of Director decided on April 26 th, 2013, on the propoal of the Human Reource and Remuneration Committee, to make a conditional grant of 40,000 hare to Mr. Jean-Paul Agon. It hould be noted that the Board of Director had granted 50,000 ACA (conditional hare) to Mr. Jean-Paul Agon on April 17 th, 2012. In it deciion to decreae the number of ACA granted to Mr. Jean-Paul Agon on April 26 th, 2013, the Board took into account the increae in the etimated fair value of the ACA, directly linked with the increae in the hare value between thee two date ( 130.30 v. 92.70). The etimated fair value according to the IFRS applied for the preparation of the conolidated financial tatement of one conditional hare (ACA) under the April 26 th, 2013 Plan i 112.37 for French tax and/or ocial ecurity reident, which i the cae for Mr. Jean-Paul Agon. Thi fair value wa 77.07 on April 17 th, 2012. The etimated fair value according to the IFRS of the 40,000 conditional hare granted in 2013 to Mr. Jean- Paul Agon i therefore 4,494,800. Final veting of thee hare i ubject to achievement of performance condition which will be recorded at the end of a 4-year veting period a from the date of grant. The number of hare that finally vet will depend, for half of them, on growth in comparable cometic ale a compared to thoe of a panel of competitor, coniting of the following companie: Procter & Gamble, Unilever, Etée Lauder, Shieido, Beierdorf, Johnon & Johnon, Henkel, LVMH, Kao, Revlon and Elizabeth Arden; and for the other half, on growth in the L Oréal Group conolidated operating profit. The calculation will be made on the bai of the arithmetical mean of the performance for the three full financial year of the veting period. The firt full year taken into conideration for aement of the performance condition relating to uch grant i 2014. In order for it to be poible for all the free hare granted to finally vet, in repect of the criterion related to ale, for the beneficiarie at the end of the veting period, L Oréal mut achieve a performance which i at leat a good a the average increae in ale of the panel of competitor. No hare will finally vet, in repect of the criterion related to operating profit, if it doe increae in abolute value over the period. The grant of hare from which Mr. Jean-Paul Agon benefited in 2013 repreent: 3.78% of the total number of ACA granted to the 2,092 beneficiarie of thi ame Plan 3.67% of their etimated fair value according to the IFRS. In accordance with the authoriation given by the hareholder on April 26 th, 2013, thi grant of hare doe not repreent over 0.6% of the hare capital. No tock option to purchae or ubcribe for hare, and no other long-term incentive tool, were granted to Mr. Jean-Paul Agon in 2013. Benefit in kind 0 Mr. Jean-Paul Agon benefit from the neceary material reource for performance of hi term of office uch a, for example, the proviion of a car with a chauffeur. Thee arrangement, which are trictly limited to profeional ue, to the excluion of all private ue, cannot be conidered a benefit in kind. Indemnity for entry into office 0 Not applicable inamuch a Mr. Jean-Paul Agon ha been Chief Executive Officer ince 2006 and Chairman and Chief Executive Officer ince 2011 268 REGISTRATION DOCUMENT / L ORÉAL 2013

ANNUAL GENERAL MEETING DRAFT RESOLUTIONS AND REPORT OF THE BOARD OF DIRECTORS TO THE ANNUAL GENERAL MEETING TO BE HELD ON APRIL 17 th, 2014 (AS OF FEBRUARY 10 th, 2014) Component of remuneration due or allocated in repect of 2013 which have previouly been voted by the Annual General Meeting under the regulated agreement and commitment procedure Termination indemnity and non-competition indemnity Supplementary penion cheme Valuation of benefit of any kind Amount put to the vote Decription Not applicable No indemnity i due in repect of termination of the corporate office. Payment of the indemnitie due under the upended employment contract wa approved by the Annual General Meeting on April 27 th, 2010. Remuneration under the employment contract, to be ued to calculate all the right attached thereto, i etablihed on the bai of the remuneration at the date of upenion of the contract in 2006, namely fixed remuneration of 1,500,000 and variable remuneration of 1,250,000. Thi remuneration i reviewed every year by applying the revaluation coefficient in repect of alarie and penion contribution publihed by the French State penion fund. A of January 1 t, 2014, the fixed remuneration amount to 1,671,000 and variable remuneration to 1,392,500. In the event of departure, and depending on the reaon, Mr Jean-Paul Agon would only be paid the dimial indemnitie, except in the event of gro miconduct or gro negligence, or the retirement indemnitie in the event of voluntary retirement or retirement at the Company requet due puruant to the employment contract that ha been upended. Thee indemnitie, which are attached olely to termination of the employment contract and in trict application of the National Collective Bargaining Agreement for the Chemical Indutrie and the Companylevel agreement applicable to all L Oréal executive, are due in any event puruant to the public policy rule of French labour law. They are not ubject to any condition other than thoe provided for by the National Collective Bargaining Agreement for the Chemical Indutrie or the above-mentioned company-level agreement. The ame applie to the non-competition claue and the related financial conideration. Puruant to the chedule of indemnitie under the National Collective Bargaining Agreement for the Chemical Indutrie, in the event of dimial, except in the event of gro miconduct or gro negligence, the indemnity would be capped, in light of Mr. Jean-Paul Agon length of ervice, at 20 month remuneration under the upended employment contract. In repect of the employment contract, puruant to the proviion of the National Collective Bargaining Agreement for the Chemical Indutrie, in the event of termination of the employment contract, the indemnity due in conideration of the non-competition claue would be payable every month for two year on the bai of two-third of the monthly fixed remuneration attached to the upended employment contract unle Mr. Jean-Paul Agon were to be releaed from application of the claue. For information purpoe, the cumulative amount of the indemnity provided for under the collective bargaining agreement and the indemnity in conideration of the non-competition claue which would have been due to Mr. Jean-Paul Agon had hi employment contract been terminated on December 31 t, 2013 through dimial, except in the event of gro miconduct or gro negligence, would have repreented an amount of le than 24 month of the fixed and variable remuneration which he received in 2013 a a corporate officer. Not applicable Mr. Jean-Paul Agon benefit, under hi upended employment contract, from the Garantie de Retraite de Membre du Comité de Conjoncture (Penion Cover of the Member of the Comité de Conjoncture ) cheme cloed on December 31 t, 2000. The main feature of thi cheme, which fall under Article L. 137-11 of the French Social Security Code, are a follow: around 120 enior manager (active or retired) are concerned; the minimum length of ervice requirement wa 10 year at the time of cloure of the cheme on December 31 t, 2000; the Penion Cover may not exceed 40% of the calculation bai, plu 0.5% per year for the firt twenty year, then 1% per year for the following twenty year, nor exceed the average of the fixed part of the remuneration for the three year ued for the calculation bai out of the even calendar year prior to the end of the beneficiary career in the Company. For information purpoe, the etimated amount of the penion that would be paid to Mr. Jean-Paul Agon, under L Oréal Garantie de Retraite de Membre du Comité de Conjoncture cheme, had he been able to apply for a full-rate penion from the French ocial ecurity cheme on December 31 t, 2013 after more than 35 year length of ervice at L Oréal, would repreent around 40% of the fixed and variable remuneration he received a a corporate officer in 2013. Thi information i given a an indication after etimating the main penion entitlement accrued by Mr. Jean-Paul Agon, at 65 year of age, a a reult of hi profeional activitie, according to the rule regarding the application for payment of uch penion in force at December 31 t, 2013 and which may be ubject to change. The amount of the penion paid to Mr. Jean-Paul Agon, under L Oréal Garantie de Retraite de Membre du Comité de Conjoncture cheme will in fact only be calculated on the date when he applie for all hi penion. A a reminder, the right to the defined benefit penion are uncertain and conditional on the beneficiary ending hi career in the Company. The funding of thi cheme by L Oréal cannot be broken down individually by employee. Benefit from thi cheme puruant to the upended employment contract wa approved by the Annual General Meeting on April 27 th, 2010. Not applicable Mr. Jean-Paul Agon continue to be treated in the ame way a a enior manager during the term of hi corporate office entitling him to continue to benefit from the additional ocial protection cheme and in particular the employee benefit and healthcare cheme available to the Company employee. For information purpoe, the amount of the employer contribution to thee cheme total 5,788 in 2013. The continued poibility to benefit from thi treatment wa approved by the Annual General Meeting on April 27 th, 2010. 8 REGISTRATION DOCUMENT / L ORÉAL 2013 269

8 DRAFT ANNUAL GENERAL MEETING RESOLUTIONS AND REPORT OF THE BOARD OF DIRECTORS TO THE ANNUAL GENERAL MEETING TO BE HELD ON APRIL 17 th, 2014 (AS OF FEBRUARY 10 th, 2014) Eighth reolution : Adviory vote by the hareholder on the component of remuneration due or allocated to the Chairman and Chief Executive Officer in repect of the 2013 financial year The Annual General Meeting, conulted puruant to the recommendation in 24.3 of the AFEP-MEDEF Code of June 2013 which i the Company reference code puruant to Article L. 225-37 of the French Commercial Code, voting in accordance with the quorum and majority requirement for ordinary general meeting, cat a favourable adviory vote on the component of remuneration due or allocated to Mr. Jean-Paul Agon in hi capacity a Chairman and Chief Executive Officer in repect of the 2013 financial year a et out in particular in page 268 and 269 of thi Regitration Document. RESOLUTION 9: AUTHORISATION FOR THE COMPANY TO BUY BACK ITS OWN SHARES Statement of reaon It i propoed that you give the Board of Director a new authoriation to buy back hare of the Company. liquidity proviion; retaining them and ubequently uing them a payment in connection with external growth tranaction. Puruant to the authoriation voted by the Annual General Meeting of April 26 th,2013, the Board of Director bought back L Oréal hare with the aim of their cancellation. A the exiting authoriation i due to expire in October 2014, it i propoed that the Annual General Meeting give the Board a new authoriation which will enable it to purue it hare buyback policy where applicable, depending on the opportunitie that may arie, except during period of public offer with regard to the Company capital. The Company could buy back it own hare with the aim of: their cancellation; their ale within the cope of employee hare ownerhip cheme and their allocation to free grant of hare for the benefit of employee and corporate officer of the L Oréal Group; The purchae of the hare may be carried out by any mean, on one or more occaion, on or off the tock market, including through the acquiition of block of hare. The authorization would enter into force on October 27 th, 2014, namely upon the termination of the current authoriation for the Company to buy back it own hare which will expire on October 26 th, 2014. It would end 18 month after the date pf the Annual General Meeting, namely on October 17 th, 2015. The purchae price per hare may not be greater than 200. The authoriation would concern no more than 10% of the capital, namely, for information purpoe at December 31 t, 2013, 60,590,188 hare for a maximum amount of 12.12 billion, it being tipulated that the Company may at no time hold over 10% of it own capital. Ninth reolution: Authoriation for the Company to buy back it own hare The Annual General Meeting, having reviewed the Report of the Board of Director, authorie the Board of Director, with the poibility for it to delegate to the Chairman and Chief Executive Officer, to purchae hare of the Company, in accordance with Article L. 225-209 et eq. of the French Commercial Code, and ubject to the following condition: the purchae price per hare may not be greater than 200; the number of hare that may be bought by the Company may not exceed 10% of the number of hare forming the capital of the Company at the time the hare are bought back, that i, for information purpoe, a of December 31 t, 2013, 60,590,188 hare for a maximum amount of 12.12 billion, it being tipulated that the Company may at no time hold over 10% of it own capital. In the event of any tranaction affecting the Company capital, the price and number of hare indicated above will be adjuted where applicable. The Company may buy it own hare for the following purpoe: their cancellation by a reduction in capital; their allocation or ale to employee and corporate officer of the Company and affiliate, under the term and condition provided for by French or foreign law, and in particular within the cope of employee profit haring cheme, free grant of hare or all employee hare ownerhip programme a well a for the purpoe of carrying out any tranaction to cover the above-mentioned employee hare ownerhip programme; liquidity proviion through a liquidity agreement entered into with an invetment ervice provider; retaining them and ubequently uing them a payment in connection with external growth tranaction. The purchae of thee hare may be carried out by any mean, on one or more occaion, on or off the tock market, including through the acquiition of block of hare. Thee tranaction may be carried out at any time, in accordance with the regulation in force at the time of the tranaction concerned, except during period of public offer with regard to the Company capital. The Annual General Meeting decide that thi authoriation will expire at the end of a period of 18 month following thi Annual General Meeting and will enter into force on October 27 th, 2014, namely following the termination of the current authoriation for the Company to buy back it own hare that will expire on October 26 th, 2014. 270 REGISTRATION DOCUMENT / L ORÉAL 2013

ANNUAL GENERAL MEETING DRAFT RESOLUTIONS AND REPORT OF THE BOARD OF DIRECTORS TO THE ANNUAL GENERAL MEETING TO BE HELD ON APRIL 17 th, 2014 (AS OF FEBRUARY 10 th, 2014) The Board of Director will have the poibility of allocating all the treaury hare currently held by the Company to any of thee objective under the condition provided for in thi hare buyback programme. Full power are granted to the Board of Director, with the poibility for it to delegate, for the implementation of thi reolution. RESOLUTION 10: APPROVAL OF THE BUYBACK AGREEMENT CONCERNING THE ACQUISITION BY L ORÉAL FROM NESTLÉ OF 48,500,000 L ORÉAL SHARES REPRESENTING 8% OF THE SHARE CAPITAL WITHIN THE SCOPE OF RELATED PARTY AGREEMENTS PROCEDURE Statement of reaon THE REGULATED AGREEMENT WITHIN THE MEANING OF ARTICLE L. 225-38 OF THE FRENCH COMMERCIAL CODE WHICH YOU ARE BEING ASKED TO APPROVE WAS ENTERED INTO IN THE FOLLOWING CONTEXT At meeting held on February 10 th, 2014, the Board of Director of Netlé and L Oréal repectively approved, by unanimou deciion of their voting member, a propoed trategic tranaction for both companie coniting in the purchae by L Oréal of 48.5 million of it own hare (repreenting 8% of it hare capital) from Netlé. Thi buyback will be financed: partially through the ale by L Oréal to Netlé of it 50% take in Swi dermatology pharmaceutical company Galderma (a 50/50 joint venture between L Oréal and Netlé) for an enterprie value of 3.1 billion ( 2.6 billion of equity value), paid by Netlé in L Oréal hare (namely 21.2 million hare); for the remainder, correponding to 27.3 million L Oréal hare held by Netlé, in cah for an amount of 3.4 billion. The price per L Oréal hare retained for thi tranaction i the average of it cloing price between Monday November 11 th, 2013 and Monday February 10 th, 2014, namely 124.48. All the hare bought back by L Oréal will be cancelled and following thi tranaction, Netlé take in the capital of L Oréal will be reduced from 29.4% to 23.29%, the Bettencourt Meyer family take increaing from 30.6% to 33.31% of the capital. In order to reflect the change of Netlé take in L Oréal governance, the number of Netlé repreentative on L Oréal Board of Director will be adjuted from 3 to 2 Director, and the ownerhip ceiling proviion of the hareholder agreement between Netlé and the Bettencourt Meyer family will apply to thee new level of their repective new holding. The tranaction will be accretive by more than 5% on L Oréal recurring earning per hare on a full year bai. Thi buyback will be excluively financed with L Oréal available cah and through the iuance of commercial paper. It will not require the dipoal of Sanofi hare held by L Oréal. Thi tranaction will be ubject to the procedure for prior conultation of Galderma and L Oréal work council and obtaining of the authoriation from the relevant antitrut authoritie. It i expected to cloe before the end of the firt half of 2014. Mr. Jean-Paul Agon, Chairman and Chief Executive Officer of L Oréal aid that thi tranaction will repreent a very poitive trategic move for L Oréal, it employee and it hareholder. L Oréal will focu excluively on it Cometic buine and it Beauty for all miion, it univeraliation trategy and it ambition to win one billion new conumer. L Oréal will benefit from a very ignificant and reinforced preence from the founding Bettencourt Meyer family, who will continue to fully upport the Company a it alway did in the pat. Furthermore, Netlé, which ha alway been a loyal and contructive hareholder, will continue to provide it active upport. Latly, all of L Oréal hareholder will benefit from thi tranaction with an accretive impact on the Company earning per hare, reulting from the buyback and ubequent cancellation of L Oréal hare held by Netlé. THIS AGREEMENT BETWEEN L ORÉAL AND NESTLÉ WAS AUTHORISED PRIOR TO ITS SIGNATURE BY THE BOARD OF DIRECTORS ON FEBRUARY 10 th, 2014 At it meeting on February 10 th, 2014, the Board of Director decided by unanimou deciion of it voting member, to authorie, prior to it ignature, the agreement to purchae hare concerning the acquiition by L Oréal from Netlé of 48,500,000 L Oréal hare repreenting 8% of the hare capital through the implementation by L Oréal of a buyback programme for it own hare and decided that the hare bought back will be immediately cancelled. The buyback i ubject to fulfilment of a condition precedent, namely completion of the acquiition by Netlé of all the hare held by L Oréal in the companie of the Galderma Group. The condition i provided for in favour of Netlé which may waive it. Netlé and L Oréal have entered into excluive negotiation for the purpoe of fulfilment of the condition precedent. The buyback wa agreed for a total price of 6 billion, namely 124.48 per L Oréal hare purchaed. The tranfer of the hare bought back and the cloing of the ale of the Galderma Group will take place at the ame time. The ale price of Galderma would finance part of the purchae price of the hare bought back from Netlé. Inamuch a thi agreement fall within the cope of application of Article L. 225-38 of the French Commercial Code, it i ubject to approval by the Annual General Meeting. 8 * See chapter 2, ection 2.7, page 84. REGISTRATION DOCUMENT / L ORÉAL 2013 271

8 DRAFT ANNUAL GENERAL MEETING RESOLUTIONS AND REPORT OF THE BOARD OF DIRECTORS TO THE ANNUAL GENERAL MEETING TO BE HELD ON APRIL 17 th, 2014 (AS OF FEBRUARY 10 th, 2014) Tenth reolution: Approval of the buyback agreement concerning the acquiition by L Oréal from Netlé of 48,500,000 L Oréal hare repreenting 8% of the hare capital within the cope of related party agreement procedure The Annual General Meeting, voting in accordance with the quorum and majority requirement for ordinary general meeting, after hearing the reading of the Statutory Auditor Special Report on the agreement referred to by Article L. 225-38 et eq. of the French Commercial Code, approve the new agreement mentioned therein concerning the buyback by the Company of a block of 48,500,000 hare held by Netlé. 8.1.2. Extraordinary part RESOLUTION 11: AUTHORISATION TO THE BOARD OF DIRECTORS TO REDUCE THE SHARE CAPITAL BY CANCELLING SHARES PURCHASED BY THE COMPANY UNDER ARTICLES L. 225-209 AND L. 225-208 OF THE FRENCH COMMERCIAL CODE Statement of reaon CONCERNING THE AUTHORISATION GIVEN TO THE BOARD OF DIRECTORS TO CANCEL SHARES BOUGHT BY THE COMPANY UNDER ARTICLE L. 225-209 OF THE FRENCH COMMERCIAL CODE. The authoriation given to the Board of Director in 2012 to cancel hare purchaed by the Company under Article L. 225-209 of the French Commercial Code i due to expire. It i propoed that the Annual General Meeting hould give the Board a new authoriation enabling it to cancel hare, within the limit provided for by law. Thi authoriation would be given for a term of twenty-ix month a from the Annual General Meeting on April 17 th, 2014 and would render ineffective any prior authoriation. CONCERNING THE AUTHORISATION GIVEN TO THE BOARD OF DIRECTORS TO CANCEL SHARES PURCHASED BY THE COMPANY UNDER ARTICLE L. 225-208 OF THE FRENCH COMMERCIAL CODE. hare purchaed by the Company under Article L. 225-209 of the French Commercial Code, referred to above, doe not make it poible to cancel thee hare a the legal treatment applicable to their cancellation i different. The authoriation given to the Board of Director in 2012 to cancel the correponding hare, purchaed by the Company under Article L. 225-208 of the French Commercial Code, i due to expire. It i propoed, within the limit of a maximum of 650,000 hare, repreenting a maximum reduction in the hare capital of 130,000, that the hare correponding to tock option to purchae hare that may no longer be exercied hould be allocated to the policy of cancellation currently being conducted by the Board of Director. Thi authoriation would be given for a period of twenty-ix month a from the Annual General Meeting of April 17 th, 2014 and would render ineffective any prior authoriation. Certain tock option to purchae hare granted in the pat can no longer be exercied a the reult, for example, of their beneficiary departure. The reolution for cancellation of the Eleventh reolution: Reduction of hare capital by cancelling hare purchaed by the Company under Article L. 225-209 and L. 225-208 of the French Commercial Code The Annual General Meeting, having reviewed the report of the Board of Director and the Statutory Auditor Special Report: authorie the Board of Director, in accordance with Article L. 225-209 of the French Commercial Code, to cancel, on one or more occaion, the hare held by the Company puruant to Article L. 225-209 of the French Commercial Code, within the limit of 10% of the capital a of the date of cancellation, per twenty-four month period; Full power are given to the Board of Director, with the poibility for it to delegate, to: reduce the hare capital by cancelling hare; decide on the final amount of the reduction in the hare capital; et the method and record the completion of uch reduction; allocate the difference between the book value of the hare cancelled and their par value to all reerve and available hare premium; amend the Article of Aociation accordingly; authorie the Board of Director, in accordance with Article L. 225-204 and L. 225-205 of the French Commercial Code, to cancel, on one or more occaion, a maximum of 650,000 hare purchaed by the Company on the bai of Article L. 225-208 of the French Commercial Code to cover tock option to purchae hare which currently correpond, or will correpond in future, to option that are no longer exerciable. and more generally, do all that i neceary to implement thi reolution. Thee authoriation are granted for a period of twenty-ix month a from the date of thi Annual General Meeting and render ineffective a of the date hereof any prior authoriation granted for the ame purpoe. 272 REGISTRATION DOCUMENT / L ORÉAL 2013

ANNUAL GENERAL MEETING DRAFT RESOLUTIONS AND REPORT OF THE BOARD OF DIRECTORS TO THE ANNUAL GENERAL MEETING TO BE HELD ON APRIL 17 th, 2014 (AS OF FEBRUARY 10 th, 2014) RESOLUTION 12: AMENDMENT OF THE ARTICLES OF ASSOCIATION TO DETERMINE THE CONDITIONS IN WHICH THE DIRECTORS REPRESENTING THE EMPLOYEES ARE TO BE APPOINTED Statement of reaon A draft amendment to L Oréal Article of Aociation i put to the vote of the Annual General Meeting in accordance with the new Article L. 225-27-1 of the French Commercial Code introduced by the Law on Employment Security of June 14 th, 2013. Puruant to thi law, the Board of Director of companie which, at the end of two conecutive financial year, employ at leat 5,000 permanent employee in the Company and it direct or indirect ubidiarie with their regitered office on French territory, or at leat 10,000 permanent employee in the Company and it direct or indirect ubidiarie with their regitered office on French territory or in other countrie, and which have the obligation to et up a work council, mut include Director repreenting the employee. L Oréal fall within the cope of application of thi law at the end of financial year 2013 and 2012. The Director repreenting the employee are not appointed by the Annual General Meeting of hareholder but are either elected by employee or appointed by bodie repreenting the employee. The number of Director repreenting the employee i equal to at leat two if the number of Director appointed by the Annual General Meeting of hareholder i greater than twelve and at leat one if uch number i lower than or equal to twelve. At the end of thi Annual General Meeting, the Board of Director of L Oréal will comprie of 14 director appointed by the Annual General Meeting, ubject to a vote in favour of the draft reolution for appointment or renewal of tenure of Director preented (Reolution 4, 5 and 6). L Oréal Board of Director will therefore have to have at leat two director repreenting the employee. The Law on Employment Security provide that the Extraordinary General Meeting will proceed with the amendment of the Article of Aociation to determine the condition under which the director repreenting the employee are to be appointed, in accordance with one of the method of appointment provided for by Article L. 225-27-1 of the French Commercial Code. The Board ha endeavoured to provide for a method of appointment that i adapted to the Company pecificitie, conitent with the labour relation arrangement in which it i to be included, compliant with bet practice and not too complex. The Central Work Committee, conulted on the method of appointment of the Director repreenting the employee, iued it opinion on January 30 th, 2014. The Board of Director propoe to the Annual General Meeting that: the firt Director repreenting the employee will be appointed, where hi/her preence i required, by the trade union organiation which obtained the mot vote in the firt round of the election mentioned in Article L. 2122-1 and L. 2122-4 of the French Labour Code at L Oréal and it direct or indirect ubidiarie with their regitered office on French territory; the econd Director repreenting the employee will be appointed, where hi/her preence i required, by the European Work Council; the number of Director repreenting the employee will be limited to two. Article 8 of the Article of Aociation currently provide for the obligation for director to hold 5 hare of the Company. Thi obligation provided for in the Article of Aociation i le than that provided for in the Internal Rule of the Board of Director which provide for the obligation for each Director to hold at leat 1,000 hare (Article 3.7). The Internal Rule are publihed in full in the Regitration Document. Article L. 225-25 of the French Commercial Code provide that the Director repreenting the employee cannot be required to own hare of the Company (the Internal Rule provide for an exception for the Director repreenting the employee). Article 8 of the Article of Aociation would be amended accordingly. 8 REGISTRATION DOCUMENT / L ORÉAL 2013 273

8 DRAFT ANNUAL GENERAL MEETING RESOLUTIONS AND REPORT OF THE BOARD OF DIRECTORS TO THE ANNUAL GENERAL MEETING TO BE HELD ON APRIL 17 th, 2014 (AS OF FEBRUARY 10 th, 2014) Twelfth reolution: Amendment of the Article of Aociation to determine the condition under which the director repreenting the employee are to be appointed The Annual General Meeting, after hearing the report by the Board of Director, decide to amend Article 8 of the Article of Aociation to determine the condition in which the Director repreenting the employee are to be appointed: Current verion: ARTICLE 8 Board of Director The Company i adminitered by a Board of Director coniting of at leat three member and at mot eighteen member; two-third of the Board member mut not exceed 70 year of age. The length of the term of office of director i four year. By way of exception, the Annual General Meeting may appoint a director for a term of office of one, two or three year, in order to provide for taggered renewal of the director term of office. Propoed new verion: ARTICLE 8 Board of Director The Company i adminitered by a Board of Director. The Board of Director conit of at mot eighteen member appointed by the Annual General Meeting. The length of the term of office of director appointed by the Annual General Meeting i four year. By way of exception, the Annual General Meeting may appoint a director for a term of office of one, two or three year, in order to provide for taggered renewal of the director term of office. If the number of director of over 70 year of age i greater than one-third of the director in office, the oldet director i automatically deemed to have reigned; hi tenure will expire at the end of the next Ordinary General Meeting, unle the aid Meeting appoint one or more director, o that the requirement tipulated above i met. The Board of Director include a director repreenting the employee appointed by the trade union organiation which obtained the mot vote in the firt round of the election mentioned in Article L. 2122-1 and L. 2122-4 of the French Labour Code at the Company and it direct or indirect ubidiarie with their regitered office on French territory. The Board of Director will include a econd Director repreenting the employee who i appointed by the European Work Council inamuch a the Board of Director ha more than two director appointed by the Annual General Meeting at the date of uch appointment. If the number of director elected by the Annual General Meeting to the Board of Director then fall to twelve director or le, the term of office of the director repreenting the employee appointed by the European Work Council will continue in force until it expire but will not be renewed. The term of office of a director not appointed by the Annual General Meeting i four year and end at the cloe of the Ordinary General Meeting held during the year in which that director term of office expire to review the financial tatement for the previou financial year. In the event that the condition for application of Article L. 225-27-1 of the French Commercial Code do not continue to apply at the end of a financial year, the term of office of the director repreenting the employee will end at the cloe of the Annual General Meeting that approved the financial tatement for uch financial year. Two-third of the Board member mut not exceed 70 year of age. If the number of director of over 70 year of age i greater than one-third of the director in office, the oldet director i automatically deemed to have reigned; hi tenure will expire at the end of the next Ordinary General Meeting, unle the aid Meeting appoint one or more director, o that the requirement tipulated above i met. If the number of director on the Board i equal to the maximum tipulated by law or by the Article of aociation, the limit on the number of director aged over 70 will be determined after the replacement of the director() deemed to have reigned, and they mut be replaced within a period of three month from the date of reignation. If the number of director on the Board i equal to the maximum tipulated by law or by the Article of aociation, the limit on the number of director aged over 70 will be determined after the replacement of the director() deemed to have reigned, and they mut be replaced within a period of three month from the date of reignation. Each director mut own five hare in the Company. Each director appointed by the Annual General Meeting mut own five hare in the Company. 274 REGISTRATION DOCUMENT / L ORÉAL 2013

ANNUAL GENERAL MEETING DRAFT RESOLUTIONS AND REPORT OF THE BOARD OF DIRECTORS TO THE ANNUAL GENERAL MEETING TO BE HELD ON APRIL 17 th, 2014 (AS OF FEBRUARY 10 th, 2014) RESOLUTION 13: POWERS FOR FORMALITIES Statement of reaon Thi reolution i intended to grant the power neceary to carry out all formalitie reulting from the holding of the Annual General Meeting. Thirteenth reolution: Power for formalitie The Annual General Meeting grant full power to the bearer of an original, copy or extract of thee minute to accomplih all legal and adminitrative formalitie, and to make all filing and announcement precribed by law. 8 REGISTRATION DOCUMENT / L ORÉAL 2013 275

8 STATUTORY ANNUAL GENERAL MEETING AUDITORS SPECIAL REPORT ON THE REDUCTION OF CAPITAL BY CANCELLING SHARES PURCHASED 8.2. STATUTORY AUDITORS SPECIAL REPORT ON THE CANCELLATION OF SHARES PURCHASED BY THE COMPANY Thi i a free tranlation into Englih of the Statutory Auditor pecial report on the cancellation of hare purchaed by the Company iued in French and i provided olely for the convenience of Englih peaking reader. Thi report hould be read in conjunction with, and contrued in accordance with, French law and profeional auditing tandard applicable in France. Ordinary and Extraordinary Shareholder Meeting of April 17 th, 2014 eleventh reolution) In our capacity a Statutory Auditor of L Oréal and puruant to the proviion of article L. 225-204 and L. 225-209 of the French Commercial Code (Code de commerce) relating to capital decreae, in particular a concern the cancellation of hare purchaed by the Company, we hereby report to you on our aement of the reaon for and the term and condition of the propoed hare capital decreae. We performed the procedure we deemed neceary in accordance with French profeional tandard applicable to thi engagement. Thee procedure conited in enuring that the reaon for and the term and condition of the propoed capital decreae, which are not conidered to affect hareholder equality, comply with the applicable legal proviion. Cancellation of hare held by the Company within the cope of article L. 225-204 of the French Commercial Code The propoed capital decreae would take place through the cancellation by the Company of it own hare purchaed in accordance with the condition of article L. 225-208 of the French Commercial Code. Shareholder are aked to grant the Board of Director full power to cancel, on one or more occaion, a maximum of 650,000 hare purchaed by the Company to cover hare purchae option which currently correpond, or will correpond in the future, to option that are no longer exerciable. Thee power would be exerciable for a period of twenty-ix month from the Shareholder Meeting of April 17 th, 2014. We have no matter to report on the reaon for or term and condition of the propoed hare capital decreae, which would reduce the Company hare capital by a maximum of 130,000. Cancellation of hare held by the Company within the cope of article L. 225-209 of the French Commercial Code Shareholder are alo aked to grant the Board of Director full power to cancel, on one or more occaion, the hare acquired by the Company, within the limit of 10% of the capital a of the date of the cancellation, per twenty-four month period. Thee power would be exerciable for a period of twenty-ix month from the Shareholder Meeting of April 17 th, 2014, in accordance with article L. 225-209 of the French Commercial Code. Under the ninth reolution, the Board of Director i eeking an eighteen-month authorization from the Shareholder Meeting to perform thi purchae. We have no matter to report on the reaon for or term and condition of the propoed capital decreae, the implementation of which depend on the Shareholder Meeting approving the purchae of the Company hare, a propoed under the ninth reolution. Neuilly-ur-Seine, February 14 th, 2014 The Statutory Auditor PricewaterhoueCooper Audit Gérard Morin Deloitte & Aocié David Dupont-Noel 276 REGISTRATION DOCUMENT / L ORÉAL 2013

9 APPENDIX 9.1. STATUTORY AUDITORS 278 9.1.1. Auditor 278 9.1.2. Fee of auditor and member of their network charged to the Group 278 9.2. HISTORICAL FINANCIAL INFORMATION INCLUDED BY REFERENCE 278 9.3. PERSON RESPONSIBLE FOR THE REGISTRATION DOCUMENT AND THE ANNUAL FINANCIAL REPORT 279 9.4. DECLARATION BY THE PERSON RESPONSIBLE FOR THE REGISTRATION DOCUMENT AND THE ANNUAL FINANCIAL REPORT 279 9.5. REGISTRATION DOCUMENT TABLE OF CONCORDANCE 280 9.6. ANNUAL FINANCIAL REPORT TABLE OF CONCORDANCE 282 9.7. TABLE OF CONCORDANCE WITH THE AMF TABLES ON THE REMUNERATION OF EXECUTIVE OFFICERS AND DIRECTORS 282 9.8. TABLE OF CONCORDANCE OF THE MANAGEMENT REPORT 283 REGISTRATION DOCUMENT / L ORÉAL 2013 277

9 STATUTORY APPENDIX AUDITORS 9.1. STATUTORY AUDITORS 9.1.1. Auditor 2010, 2011, 2012 and 2013 Current appointment Date of firt appointment Date of appointment Term of office Expiry date Auditor PricewaterhoueCooper Audit Auditor, member of the Compagnie Régionale de Veraille, repreented by Gérard Morin 63 rue de Villier 92200 Neuilly-ur-Seine (France) April 29 th, 2004 April 27 th, 2010 6 year Deloitte & Aocié Auditor, member of the Compagnie Régionale de Veraille, repreented by David Dupont-Noel 185 avenue Charle de Gaulle 92200 Neuilly-ur-Seine (France) April 29 th, 2004 April 27 th, 2010 6 year Subtitute auditor Mr. Yve Nicola 63 rue de Villier 92200 Neuilly-ur-Seine (France) April 29 th, 2004 April 27 th, 2010 6 year Société BEAS 195 avenue Charle de Gaulle 92200 Neuilly-ur-Seine (France) April 27 th, 2010 April 27 th, 2010 6 year AGM reviewing the financial tatement for 2015 to be held in 2016 9.1.2. Fee of auditor and member of their network charged to the Group See note 30 of the Conolidated financial tatement on page 157 of thi document. 9.2. HISTORICAL FINANCIAL INFORMATION INCLUDED BY REFERENCE In accordance with Article 28 of European Regulation EC No. 809/2004 of April 29 th, 2004, thi 2013 Regitration Document contain the following information by reference: the conolidated financial tatement for the year ended December 31 t, 2012, prepared in accordance with IFRS and the related Statutory Auditor Report preented on page 96 to 153 of the 2012 Regitration Document filed with the Autorité de Marché Financier on March 18 th, 2013 under the number D. 13-0171, and alo information extracted from the 2012 Management Report preented on page 78 to 93 of the Regitration Document; the conolidated financial tatement for the year ended December 31 t, 2011, prepared in accordance with IFRS and the related Statutory Auditor Report preented on page 87 to 146 of the 2011 Regitration Document filed with the Autorité de Marché Financier on March 14 th, 2012 under the number D. 12-0155, and alo information extracted from the 2011 Management Report preented on page 70 to 85 of the Regitration Document. 278 REGISTRATION DOCUMENT / L ORÉAL 2013

APPENDIX DECLARATION BY THE PERSON RESPONSIBLE FOR THE REGISTRATION DOCUMENT AND THE ANNUAL FINANCIAL REPORT 9.3. PERSON RESPONSIBLE FOR THE REGISTRATION DOCUMENT AND THE ANNUAL FINANCIAL REPORT Mr. Chritian Mulliez, Executive Vice-Preident Adminitration and Finance, on the authority of L Oréal Chairman and Chief Executive Officer, Mr. Jean-Paul Agon. 9.4. DECLARATION BY THE PERSON RESPONSIBLE FOR THE REGISTRATION DOCUMENT AND THE ANNUAL FINANCIAL REPORT I declare that, having taken all reaonable care to enure that uch i the cae, the information contained in thi Regitration Document i, to the bet of my knowledge, in accordance with the fact and that there i no omiion likely to affect the fairne of the preentation. I certify that, to my knowledge, the financial tatement have been prepared in accordance with the applicable et of accounting tandard and give a true and fair view of the aet and liabilitie, financial poition and profit or lo of the Company and all the other companie included in the cope of conolidation, and that the element of the Management Report included in thi document, a detailed in the table of concordance in ection 9.8. page 283, preent a fair review of the development and performance of the buine and the poition of the Company and all the other companie included in the cope of conolidation, together with a decription of the principal rik and uncertaintie that they face. I have obtained a letter of completion of audit from the Statutory Auditor in which they tate that they have verified the information relating to the financial poition and the financial tatement et out in thi preent document and have read the Regitration Document in it entirety. Clichy, March 11 th, 2014 On the authority of the Chairman and Chief Executive Officer, Chritian Mulliez Executive Vice-Preident Adminitration and Finance 9 REGISTRATION DOCUMENT / L ORÉAL 2013 279

9 REGISTRATION APPENDIX DOCUMENT TABLE OF CONCORDANCE 9.5. REGISTRATION DOCUMENT TABLE OF CONCORDANCE In order to facilitate the reading of thi Regitration Document, the following table provide the page reference of the main information required by Annex 1 of European Regulation no. 809/2004/EC. Schedule baed on annex 1, commiion regulation no. 809/2004/EC Page 1. Peron reponible 1.1. Name and function of the peron reponible 279 1.2. Declaration of the peron reponible 279 2. Statutory Auditor 278 3. Selected financial information 88-102 4. Rik factor 20-27 5. Information about the iuer 5.1. Hitory and development of the iuer 7-10, 236-238 5.2. Invetment 15, 19, 20, 101, 154 6. Buine overview 6.1. Principal activitie 7-9 6.2. Principal market 7, 10-13, 88-91 6.3. Exceptional factor n/a 6.4. Extent to which the iuer i dependent on patent or licene, indutrial, commercial or financial contract or new manufacturing procee 14-16, 23 6.5. Bai for any tatement made by the iuer regarding it competitive poition 13 7. Organiational tructure 7.1. Brief decription of the Group 8-10 7.2. Lit of the ignificant ubidiarie 159-162, 186-188 8. Property, plant and equipment 8.1. Exiting or planned material tangible fixed aet 16-18, 116, 136 8.2. Any environmental iue that may affect the iuer utiliation of the tangible fixed aet 24-25, 214 9. Operating and financial review 9.1. Financial condition 91-102, 106-110 91-93, 96-102, 106, 9.2. Operating reult 127-128, 160 10. Capital reource 10.1. Information concerning the iuer capital reource 108-110, 139, 168-169 10.2. Source and amount of cah flow 101, 110, 169 10.3. Information on the borrowing requirement and funding tructure 25, 149, 180 10.4. Retriction on the ue of capital reource that have materially affected or could materially affect the iuer operation 101, 149-150, 154 10.5. Anticipated ource of fund needed to fulfil invetment on which the management bodie have already made firm commitment and planned material tangible fixed aet 10 11. Reearch and development, patent and licence 15, 23 12. Trend information 13, 104 13. Profit forecat or etimate n/a 14. Board of Director and General Management 14.1. Information about the Board of Director and the General Management 9-10, 32-48 14.2. Conflict of interet 46-47 280 REGISTRATION DOCUMENT / L ORÉAL 2013

APPENDIX REGISTRATION DOCUMENT TABLE OF CONCORDANCE Schedule baed on annex 1, commiion regulation no. 809/2004/EC Page 15. Remuneration and benefit 15.1. Amount of remuneration paid and benefit in kind 61-73, 268-269 15.2. Amount et aide or accrued to provide penion, retirement or imilar benefit 65-66, 70-71, 203-205 16. Board practice 16.1. Date of expiration of the current term of office 33-45, 266 16.2. Service contract with the iuer 47 16.3. Information about the Committee 48-53 16.4. Statement of compliance with the regime of corporate governance 30, 74 17. Employee 17.1. Number of employee 95, 200 17.2. Shareholding and tock option of the executive officer 72-73, 247-248 17.3. Arrangement involving the employee in the iuer capital 201-203, 239, 242, 245-251 18. Major hareholder 18.1. Shareholder having more than a 5% interet in the iuer capital or of voting right 240-243 18.2. Exitence of different voting right 237-238 18.3. Control of the iuer 47, 240-243 18.4. Arrangement, known to the iuer, the operation of which may at a ubequent date reult in a change in control of the iuer 103, 242-243 19. Related party tranaction 47, 84, 103, 156 20. Financial information concerning the iuer aet and liabilitie, financial poition and profit and loe 20.1. Hitorical financial information 102, 106-110, 190, 278 20.2. Pro forma financial information n/a 20.3. Financial tatement 106-110, 166-169 20.4. Auditing of hitorical annual financial information 163, 192, 278 20.5. Age of latet financial information n/a 20.6. Interim and other financial information n/a 20.7. Dividend policy 237, 252, 263 20.8. Legal and arbitration proceeding 24 20.9. Significant change in the iuer financial or trading poition 103-104 21. Additional information 21.1. Share capital 139, 238-241 21.2. Memorandum and Article of Aociation 236-238 22. Material contract n/a 23. Third party information, tatement by expert and declaration of any interet 25, 95 24. Document on diplay 236, 257-259 25. Information on holding 159-162, 186-188, 191 9 REGISTRATION DOCUMENT / L ORÉAL 2013 281

9 ANNUAL APPENDIX FINANCIAL REPORT TABLE OF CONCORDANCE 9.6. ANNUAL FINANCIAL REPORT TABLE OF CONCORDANCE In order to facilitate the reading of Annual Financial Report (Rapport Financier Annuel), the following table provide the page reference of the main information required by Article L. 451-1-2 of the French Monetary and Financial Code and by Article 222-3 of the General Regulation of the Autorité de Marché Financier. Schedule baed on Article L. 451-1-2 of the French Monetary and Financial Code and on Article 222-3 of the General Regulation of the AMF Page 1.2. Annual Statement 2013 166-188 2. Conolidated Financial Statement 2013 106-162 3. 2013 Management Report of the Board of Director 283 4. Declaration by the peron reponible for the 2013 Annual Financial Report 279 5. Statutory Auditor Report on the 2013 financial tatement 192-193 6. Statutory Auditor Report on the 2013 conolidated financial tatement 163 7. Fee of Auditor 157 8. Report of the Chairman of the Board of Director On Internal Control 75-82 9. Statutory Auditor Report on the report prepared by the Chairman of the Board of Director 83 9.7. TABLE OF CONCORDANCE WITH THE AMF TABLES ON THE REMUNERATION OF EXECUTIVE OFFICERS AND DIRECTORS The following thematic table ha been prepared in order to make it poible to look at the information provided on remuneration from the perpective of the preentation in the form of 10 table recommended by the AMF in it recommendation of December 22 nd, 2008 relating to the information to be provided in reference document on the remuneration of corporate officer (ee alo the AFEP-MEDEF Code). It hould be noted that ome information i not preented in table form in light of it content (ee the table marked with an aterik* below). Table with regard to Remuneration provided for in the AMF recommendation Page Table No. 1 Summary of the remuneration, tock option and performance hare granted to each executive officer 72, 3 rd table Table No. 2 Summary of the remuneration of each executive officer 72, 2 nd table Table No. 3 Attendance fee and other remuneration received by non-executive Director 62 Table No. 4 Stock option for the ubcription or purchae of hare granted during the financial year to each executive officer by the iuer and by any Group company * 73, 1 t table Table No. 5 Stock option for the ubcription or purchae of hare exercied during the financial year by each executive officer * 73, 2 nd table Table No. 6 Performance hare granted to each executive officer * 73, 3 rd table Table No. 7 Performance hare that have veted for each executive officer * 251 Table No. 8 Hitory of grant of tock option for the ubcription or purchae of hare 247 Table No. 9 Stock option for the ubcription or purchae of hare granted to the ten employee who are not executive officer receiving the larget number of option and option exercied by them 248, ection 7.4.2.2. Table No. 10 72 282 REGISTRATION DOCUMENT / L ORÉAL 2013

APPENDIX TABLE OF CONCORDANCE OF THE MANAGEMENT REPORT 9.8. TABLE OF CONCORDANCE OF THE MANAGEMENT REPORT In order to review the element of the Management Report, the following thematic table make it poible to identify the main information provided for by Article L. 225-100 et eq., L. 232-1 and R. 225-102 et eq. of the French Commercial Code. Heading of the 2013 Management Report The Group ituation and buine activitie in 2013 Comment on the financial year Analyi of change in the buine, reult and financial ituation of the Company and the Group (including in particular the dividend ditributed in repect of the three previou financial year and the amount of revenue eligible for the tax deduction on dividend) 89-93, 263-264 Significant event that have occurred ince the beginning of 2014 and propect 103-104 Reearch and development 14-16 Operation 16-19 Parent company financial tatement Net ale 166-189 L Oréal parent company balance heet and income tatement 166-167 Expene and charge falling under Article 223 quater of the French Tax Code 189 Trade account payable 189 Five-year financial ummary 190 Subidiarie and holding 186-188, 191 Rik factor Buine rik 20-23 Legal rik (challenge and contraint linked to the legilation, ignificant dipute ) 23-24 Indutrial and environmental rik 24-25 Counterparty rik 25 Cutomer rik 25 Liquidity rik 25 Financial and market rik 25 Inurance 27 Corporate governance Choice of organiation of the general management 32-33 Lit of office and directorhip held by each of the corporate officer in any company during the financial year 33-45 Remuneration of the executive officer and Director 61-73 Stock option granted to and exercied by the executive officer 72-73 Commitment made with regard to the executive officer 65-66, 70-71, 84-85 Summary of trading by Director and executive officer and their cloely related partie in L Oréal hare in 2013 75 Information on ocial, environmental and ocietal commitment Information relating to employee iue and ocial conequence of L Oréal buine activitie 198-212 Environmental information 212-220 Information relating to ocietal commitment in favour of Sutainable Development 221-229 Information concerning the hare capital Statutory requirement governing change in the hare capital and hareholder right 237-238 Structure and change in the hare capital (including the table ummariing the authoriation in force granted by the Annual General Meeting with regard to hare capital increae) 239-241 Individual or legal entitie exerciing control over the Company to the Company knowledge 240-241 Change in allocation of the hare capital and voting right over the lat three year 241 Employee hare ownerhip 240, 242 Dicloure to the Company of legal threhold croed 242 Shareholder agreement relating to hare in the Company hare capital 242-243 Buyback by the Company of it own hare 243-245 Preentation of the L Oréal parent company tock option plan and plan for the conditional grant of hare to employee 245-251 Page 9 REGISTRATION DOCUMENT / L ORÉAL 2013 283

284 REGISTRATION DOCUMENT / L ORÉAL 2013

PRACTICAL INFORMATION TO FIND OUT MORE Conult the whole range of 2013 group publication THE ANNUAL REPORT L Oréal in 2013, with it diviion, brand and countrie, driven by it miion: the univeraliation of beauty and beauty for all. Beauty i univeral / L Oréal, offering beauty for all / Beauty i a cience / Beauty i a commitment THE REGISTRATION DOCUMENT Thi document include the 2013 financial tatement, the Annual Financial Report, the Management Report of the Board of director including a ection on Social and environmental Reponibility. Preentation of the group / Corporate governance / Key figure and comment on the financial year / Conolidated financial tatement / Parent company financial tatement / Corporate ocial, environmental and ocietal reponibility / Stock market information and hare capital / Annual General Meeting / Appendix THE SUSTAINABLE DEVELOPMENT REPORT Preentation and concrete example of the group utainable development trategy. Innovating utainably / Producing utainably / Living utainably / Developing utainably Thee document can be downloaded at www.loreal.com and at www.loreal-finance.com, and are available on requet from the Image and Corporate Communication and the Financial Communication department. ANNUAL REPORT 2013 DIGITAL EDITION Take a look at the multimedia content and excluive article in your digital Magazine L Oréal Finance Mag. KEY INFORMATION FROM L ORÉAL FINANCE AT YOUR FINGERTIPS! Acce the main financial inform L Oréal by downloading the appl created for hareholder and inve Free and eay to ue, it i availab and martphone. Photo credit / copyright : Stéphane de Bourgie, page 2 Terry Richardon, AR and RD, cover Peter Lindberg, SDR, cover. REGISTRATION DOCUMENT / L ORÉAL 2013 III

Incorporated in France a a Société Anonyme with regitered capital of 121,180,377.40 euro 632 012 100 R.C.S. Pari Headquarter: 41, rue Martre 92117 Clichy Cedex France Tel.: +33 1 47 56 70 00 Fax: +33 1 47 56 86 42 Regitered office: 14, rue Royale 75008 Pari France www.loreal.com www.loreal-finance.com