Compagnie des Alpes - 2017 Registration Document

3 CORPORATE GOVERNANCE

Internal control and risk management procedures

3.5 Internal control and risk management procedures

To constantly improve its internal control and risk management system, Compagnie des Alpes looks to the internal control and risk management procedures reference framework published by the AMF in June 2010. For this report, CDA has used the implementation guide intended for small and mid-cap companies, published in July 2010. INTERNAL CONTROL PROCEDURES Internal control is a set of procedures implemented by the Group’s Executive Management, senior executives, and employees. It is designed to provide reasonable assurance that the following objectives are being met: z compliance with the current laws and regulations; z the application of the Executive Management’s instructions and guidance; z the completion and optimisation of operations, in particular those helping to protect the Group’s assets; z the reliability of financial information. Internal control is one element of the Group’s overall management system, as it helps to ensure that: z the Company’s activities are controlled, its operations are effective and its resources are used efficiently; z operational risks linked to processes, in particular risks of error or fraud, are managed. As is the case with any control system, the system the Group employs cannot provide an absolute guarantee that the risks identified have been eliminated entirely or are completely under control. It is intended to reduce the likelihood of these risks arising through the implementation of appropriate action and prevention plans. The Executive Management of the CDA Group is responsible for implementing and monitoring the effectiveness of the internal control system employed by the Audit and Internal Control Department, on the Executive Management’s initiative, for the holding company and all controlled entities. This system is tailored to the nature and scope of each of the activities and is integrated into existing processes in order to empower actors as closely as possible to the processes. An Internal Control Charter specifies the key operating principles (roles and responsibilities, governance, methodology). It is available in the Group’s reference documents. The internal control system consists of five elements: z an organisation – i.e. clearly defined responsibilities, adequate IT resources and skills based on rules and procedures; z the publication of relevant information; z a risk analysis system; 3.5.1

The AMF’s reference framework stresses that internal control and risk management procedures should be used in a complementary way to control the Company’s activities.

Group organisation The Executive Management of the CDA Group decides on: z organisation, responsibilities and the delegation of powers and/or signing authorities; z the objectives, policies and values of the Group. Group management, which is the responsibility of the Chairman and Chief Executive Officer, assisted by a Deputy Chief Executive Officer, is based on a matrix organisation split between large operational departments, each led by a member of the Executive Committee (Comex). There are six such departments: z three operational departments manage the implementation of Group strategy and are responsible for the achievement of commercial and financial targets, management, and human resources and risk management at all operating entities under their responsibility: z the Ski Area Operations Department, z the Leisure destinations Operations Department, z the Group Development Department, responsible for French and international development, product development, and new business lines; z the Communications Department, responsible for financial and institutional communications; z the Finance, Risk, IT, and Procurement Departments, which have responsibility for the Group’s financial policy, in particular the production of accounting and financial information, procurement policy, the IT master plan and risk and insurance policy; z the Development and Attractiveness of Mountain Resorts Department, responsible for interdisciplinary management of accommodation projects, marketing, and development of new activities. Main Group charters Charters are given to all employees, setting out the Group’s values: z the Corporate Governance Charter defines the areas in which Executive Management decisions are subject to prior approval by the Board of Directors, as well as the conditions for the granting of said approval. The Charter also states the missions and prerogatives of the different Committees of the Board of Directors, particularly the Audit and Finance Committee. The Charter is available on the Group website: www.compagniedesalpes.com;

z proportionate control measures; z a continuous monitoring system.

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Compagnie des Alpes I 2017 Registration Document