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a it reviews the scope of consolidation and the reasons for excluding any entities;

a it reviews the Risk Management policy and ensures that adequate systems are in place;

a it assesses the material risk exposure and off-balance sheet commitments, and receives a copy of the Chief Financial Officer’s detailed report on these matters;

a it obtains assurance concerning the effectiveness of the Group’s system of internal control, by reviewing the methods used to identify risks and the organizational principles and procedures of the Internal Audit Department. It is also informed of the Internal Audit program and of the results of the Internal Audits carried out;

a it reviews the Statutory Auditors’ audit plan and the results of their audits. It receives a copy of the Statutory Auditors’ post-audit letter setting out the main issues identified during their audit and describing the accounting options selected;

a when the Statutory Auditors’ term is due to expire, it oversees the Auditor selection procedure and reviews the proposals submitted by the various candidates, expresses an opinion on the proposed fee budgets for statutory audit work and makes recommendations to the Board of Directors on the choice of candidate;

a it validates the categories of additional audit-related work that the Statutory Auditors and the members of their networks may be asked to perform in accordance with the applicable laws and regulations;

a at the end of each year, it is informed of the fees paid by Group companies to the Statutory Auditors and the members of their networks during the year, including a detailed breakdown by type of engagement, and reports to the Board of Directors on these fees, as well as on its assessment of the Statutory Auditors’ level of independence.

The Audit and Risks Committee is comprised of three to five members possessing the necessary technical knowledge to fulfill the Committee’s duties. At least two-thirds of the members, including the Committee Chairman, must be independent directors.

The Audit and Risks Committee holds at least three meetings per year. One meeting – attended by the Senior Vice-President, Internal Audit – is devoted to reviewing the effectiveness of the system of internal control.

The Audit and Risks Committee may make enquiries of the Statutory Auditors without the executive directors and/or the Chief Financial Officer being present, after first notifying the Chairman and Chief Executive Officer.

Calls to meetings shall be issued by the Committee Chairman and include the meeting agenda. Meetings to review the interim and annual financial statements are held at least three days prior to the Board meeting called to approve the financial statements. The members of the Audit and Risks Committee must receive all necessary documents on a timely basis. When members are first appointed to the Committee, they are given detailed information about accounting, financial and operational issues that are specific to the Group. The Chairman and Chief Executive Officer, the Chief Financial Officer and the Statutory Auditors shall attend Audit and Risks Committee meetings as needed.

Corporate governance



6.2. The Commitments Committee

The Commitments Committee is comprised of no more than five
members. Meetings of the Committee may be called at any time, in
writing or verbally, by the Committee Chairman or the Chairman and
Chief Executive Officer.

The Commitments Committee’s recommendations are adopted
by a simple majority and must then be discussed by the Board of
Directors before the commitments can be implemented by the Group.
The Commitments Committee is therefore responsible for preparing
Board meetings and making recommendations to the Board on the
following matters:

a any and all transactions that will have a material impact on the
Group’s business base;

a any mergers, demergers or asset transfers;

a any amendments to the Company’s corporate purpose;

a any and all immediate or deferred financial commitments
representing more than €100million per transaction. “Financial
commitments” are defined as:

-any and all acquisitions or disposals of assets and majority or
minority interests in other companies; in the latter case, the
amount of the commitment is considered as being equal to the
entity’s enterprise value,

-any and all direct investments, for example for the creation of a
business, the construction, refurbishment or extension of a hotel
property, or expenditure on technological developments,

-rental investments, measured on the basis of the market value
of the leased asset,

-hotel management contracts with a guaranteed minimum fee,

-any and all loans to entities in which the Company or one of its
subsidiaries does not hold the majority of the shares and voting
rights, and any and all commitments to participate in share issues
by such entities.

In the case of financing transactions, however, the Chairman and
Chief Executive Officer is authorized to make any and all financial
commitments of up to €1billion without a prior recommendation
from the Commitments Committee, provided that such commitment
is consistent and undertaken in accordance with the annual Group
financing policy as previously approved by the Board of Directors. In
this case, the Chairman and Chief Executive Officer shall inform the
Board of Directors of the transactions after they have been completed.
It is noted as well that the Board’s prior approval is not required for
borrowings due in less than one year, whatever the amount borrowed.