Call for competition process

Call for Competition Call for Competition Type Annual Spending ≥ RMB 20M • Decision made by tender committee • To involve suppliers from market • Any exception need to be validated by sourcing strategy Call for Tender Annual Spending ≥ RMB 200K • Decision made by project team • Can involve suppliers from market if no enough suppliers in the existing vendor pool Bidding

Call for tender process

Propose Pitch & Develop Mock-up Call for Tender Role & Responsibility Initiate Request Sourcing New Supplier Propose Pitch & Develop Mock-up Supplier Selection Awards Tender Committee Purchasing A A A C A R R R R A R A Accountable: Decision maker who has the final say. R Responsible: The process owner who is Responsible to delivery C Consulted: Other stakeholders who must be consulted before the decision is made I Informed: Person who must be informed on process output/decision made Tender Committee Members Include; Purchasing Internal Stakeholder Controlling or 3rd Party (The 3rd party can be formed by Legal & Internal Audit when necessary)

Call for Tender Process Overview Stakeholder Initiate and Confirm Request to Purchasing Purchasing Request for Proposal/Quotation (5-15 working days) Summarize Evaluation (7 working days) Award (1 working day) 13-23 working days Notes: Additional lead time need to be considered if there is no appropriate vendor in L’Oreal China vendor pool. For production item need mock-up or site visit evaluation need additional 10-20 working days. 5

1. Setup Tender Committee 2. Kick-off Tender Meeting Call for Tender Process 1. Setup Tender Committee 2. Kick-off Tender Meeting 3.Sourcing & RFI 6. Complete & Submit RFI Supplier 3. Kick-off Tender ② 8. Determine Short List per RFI Criteria Tender Committee 2.Setup Tender Committee & Sponsor 4. Explore Suppliers for Tender 5.Send RFI for Tender ③ 7. Analyze RFI Buyer A 1. Request for Tender ① Purchasing Manager 2 Working Days 5 Working Days 10-45 Working Days “Request for Tender” accords to purchasing annual tender plan and sourcing strategy, align with internal customer. Kick-off meeting shall include project brief, agree on project objective, retro plan and key milestones. Buyer sends official tender invitation letter in written to all the candidates via e-mail, and send RFI to supplier to complete. Invitation letter includes general message of project brief, but not necessary for specific figures.

Call for Tender Process 4. Credit Check 5. Mock-up 6. RFx 12. Do Mock-up 16. Complete & Submit RFx Supplier 13. Blind Test Mock-up via “Blind Test Evaluation Form” ① 14.Select Mock-up Qualified Supplier 17. Evaluate RFx ① Tender Committee Yes 10. Send Project Specification 15. Send RFx Buyer 11. Do Mock-up? A No B Step 7: Launch RFI process to pre-select supplier and then do supplier evaluation. Increasing tender workload and reducing tender cost. 9. Perform Credit Check Transverse buyer 20 Working Days 10 - 20 Working Days 5-15 Working Days Blind test evaluation and RFx evaluation must be performed by all stakeholder,

Call for Tender Process 7. Site Visit 8. Summarize Evaluation 9. Awards Supplier 19. Visit Supplier & Evaluate via Site Visit Evaluation Form ① 20. Do Tender Summary per RFx Evaluation or Site Visit Evaluation ② 24. Make Tender Conclusion Tender Committee B 27. Tender Summary and Archiving 21.Archive RFx and Site Visit Evaluation Summary 22. Conduct Negotiations ③ 23. Finalize Evaluation of RFx 25. Announce Tender Result ④ 26.Send Award & Non-award Letter Buyer Yes 18.Site Visit? No 10 Working Days 7 Working Days 1 Working Day Buyer organizes site visit with tender committee, and evaluate supplier per “Site visit evaluation form” with tender committee together. Tender summary’s contents refer to appendix 3 “Project Summary Archive Documents”. Buyer conducts negotiation for saving, purchasing condition with selected suppliers. Buyer inform internal customer tender result. Buyer archives tender summary to refer appendix 3 “Project Summary Archive Documents”.

Bidding process

Propose Pitch & Develop Mock-up Bidding Role & Responsibility Initiate Request Sourcing New Supplier Propose Pitch & Develop Mock-up Supplier Selection Awards Internal Stakeholder Purchasing A R C A C I C A R R A R A R A Accountable: Decision maker who has the final say. R Responsible: The process owner who is Responsible to delivery C Consulted: Other stakeholders who must be consulted before the decision is made I Informed: Person who must be informed on process output/decision made

Bidding Process Overview Stakeholder Initiate and Confirm Request to Purchasing Purchasing Request for Proposal/Quotation (5-15 working days) Summarize Evaluation (7 working days) Award (1 working day) 13-23 working days Notes: Additional lead time need to be considered if there is no appropriate vendor in L’Oreal China vendor pool. For production item need mock-up or site visit evaluation need additional 10-20 working days. 11

1. Initiate and Evaluate Request Bidding Process 1. Initiate and Evaluate Request 2. Sourcing New Supplier 1. Submit Sourcing Request via Business Requirement Brief Form ① ② 4. Justification Process via Justification Form for Vendor Creation 5.Vendor Registration Internal Stakeholder Yes Buyer 2. Evaluate Request 3. Non- Centralized? 6. Enough Existing Supplier? 8. Bidder list per Vendor Recommendation Criteria ③ ④ ⑤ No Yes A 7. Sourcing New Supplier No Step1: Create a standard form to support requestor initiate "vendor recruitment" needs. it enhances the communication efficiency between purchasing department and requestor. Step4: After define a clear supplier selecting criteria, buyer is fully authorized to choose supplier from existing vendor pool. It improves their decision-making efficiency. Step 7: Create non-centralized vendor recruitment process Purchasing Manager 9. Approve Bidder List if Spend > 50K RMB 5 Working Days 10-40 Working Days Vendor recruitment also can be initiated by purchasing department when the sourcing strategy in placed. In “Business Requirement Brief Form”, budget manger must be copied if annual spending is more than 500K RMB. Refers to Appendix 1 “Vendor Recommendation Criteria” Bidder list analysis has to be included in project summary Requestor recommended supplier will be considered as one of the candidates.

Bidding Process 3. RFI 4. Credit Check Purchasing Manager Supplier 11.Approval by Purchasing Manager Supplier 14. Complete & Submit RFI 12.Vendor Registration 15. Analyze RFI Buyer Yes 10. One-time? ① 13. Request for Information via RFI Form 16. Archive RFI 17. Shortlist per RFI Criteria ② A B No Step 12: Create onetime vendor recruitment process to support service for trial business. Transverse Buyer 18. Perform Credit Check if Annual spending >RMB 1 M 5 Working Days 20 Working Days One-time supplier is applied for service trial, and subjected to purchasing manager approval. A quarterly review will be applied. Buyer must set RFI criteria weight according to project background before RFI. RFI criteria refer to appendix 2 “Appendix 2: Must Requirement”

Process 5. Mock-up 6. RFx 7. Site Visit Supplier Internal Stakeholder Tender Bidding Order Management Justification Contracting Supplier Management 5. Mock-up 6. RFx 7. Site Visit Supplier 20. Make Mock-up 24. Complete & Submit RFx Internal Stakeholder 27. Visit Supplier & Evaluate via Site Visit Evaluation Form 21. Blind Test Mock-up via “Blind Test Evaluation Form” 22.Select Mock-up Qualified Supplier 25. Evaluate RFx ② 28. Summarize Evaluation per RFx Evaluation Yes 19. Do Mock-up? B Step 23 and 26: RFX evaluation must be performed with stakeholder. Buyer 23. Send RFx Yes No 26.Site Visit? C No 10-20 Working Days 5-15 Working Days 10 Working Days All evaluations (Blind Test Evaluation, Proposal Evaluation, Site Visit Evaluation) are cooperate jobs done by all stakeholders.

Bidding Process 8. Summarize Evaluation 9. Awards Internal Stakeholder 35. Order Management Internal Stakeholder 34. Project Summary and Archiving ① 29. Conduct Negotiation 30. Finalize Evaluation of RFx 31. Announce Winner to Internal Stakeholder 32.Send Award & Non-award Letter Buyer C Accounting 33. Vendor Registration ② 7 Working Days 1 Working Day Project documents for archiving refer to appendix 3 “Project Summary Archive Documents” 1 day lead time for “Welcome to Board” excludes time spent for “Vendor Registration” that needs 5 working days

Exception management

Exception Management We understand there are exceptional cases in daily operation. In order to support business and ensure process efficiency, purchasing developed Justification Process to Manage exception for scenarios; No Bidding for Spending >= RMB 200K or Minimum Quotation from Bidding <3 or New Vendor Creation for; Non-centralize supplier (not covered by purchasing) Supplier imposed by regional or global decision Supplier provide Celebrity or Sponsor Service Monopolized Supplier Public Organization Customer as vendor Non-centralize supplier (not covered by purchasing) Personal Rental Children tuition fee Move & Settle Allowance Insurance Utilities

Appendix 1: Vendor Recommendation Criteria When purchasing recommend existing supplier to end user, buyer has to consider the criteria and make bidder list. Criteria Penetration Rate ≤30% Available Capacity Bad Performance Records Supplier Service Scope

Appendix 2: MUST Requirement The sourcing new supplier, below criteria is must requirements be considered. Criteria Descriptions Credit Rating Financial Risk: Lower than average Penetration Rate ≤ 30% Shareholders Structure No Ethics Issue

Project Summary Archive Documents Appendix 3: Project Summary Archive Documents Project summary should includes documents below; Project Summary Archive Documents Business Requirement Brief to Supplier Proposal / Quotation RFx Evaluation Summary Award / Non-award Letter Justification Form (if applicable)