FFP_REGISTRATION_DOCUMENT_2017

ACTIVITY AND PROFIT FOR THE PERIOD Risk factors – Risk management and insurance

Operating Officer, the Chief Investment Officer, the Chief Financial Officer and the Chief Legal Officer and the Deputy Chief Legal Officer hold a bi-monthly meeting. Description of FFP’s internal control procedures Compliance with laws and regulations The Company’s Legal division monitors current events to inform Executive Management and employees of any new regulations applicable so that the Company: O is aware of the various rules and legislation applicable to it; O is informed in due time of any changes to it; O can factor these rules into its internal procedures; O can inform and train employees about the new rules and legislation affecting them. The Finance division monitors changes in the tax and accounting rules and ensures that they are taken into account in the financial statements of the Company and the FFP group. Implementation of the instructions and direction set by Executive Management Executive Management sets the Company’s objectives and long- term direction and ensures that these are communicated to all employees. Proper functioning of the Company’s internal processes, especially those relating to the protection of its assets A. INVESTMENT DECISIONS Investments in new shareholdings are proposed by Executive Management and given the go-ahead by the Board of Directors, after seeking the opinion of the Investments and Shareholdings Committee. The constraints laid down in the stock market regulations in force are abided by when transactions in listed securities are entered into. Additions to or reductions in the size of existing shareholdings are reviewed by the Investments and Shareholdings Committee and then proposed to the Board of Directors. Investments in or divestments of portfolio investment securities are given the go-ahead by Executive Management, it being specified that investment outlays for all investment transactions must not exceed the maximum allocation allotted by the Board of Directors. B. MONITORING OF INVESTMENTS IN SHAREHOLDINGS AND PORTFOLIO INVESTMENT SECURITIES Executive Management is responsible for monitoring investments in shareholdings and Portfolio Investment Securities. The Chief Investment Officer is closely involved in this process. The monitoring of shareholdings includes regular meetings with the management teams of investees, regular briefings with the investment analysts covering the listed companies, and, more broadly, the various organisations that can help FFP gain the best possible insight into the activities of the investee, its economic and

• control activities proportionate to the implications of each individual process and designed to reduce the risks that could affect the Company’s ability to achieve its objectives; • ongoing monitoring of the internal control system together with a regular review of its effectiveness. Nevertheless, the internal control system cannot provide an absolute guarantee that the Company’s objectives will be achieved. General internal control environment A handbook of procedures and administrative and accounting guides drafted by the Company is provided to employees. This handbook presents the management and accounting tasks, together with the risks and controls performed. The handbook also includes risk mapping that is intended to present: O the nature of risks, their probability of occurrence and severity; O the controls implemented to address them; O an assessment of the relevance of the controls. Main participants in the internal control system The Board of Directors The Board of Directors, with the assistance of the Financial and Audit Committee, is responsible for ensuring the effectiveness of the internal control system, as defined and implemented by Executive Management. If need be, the Board of Directors may make use of its general powers to take the measures and conduct the checks it deems appropriate. Executive Management Executive Management is responsible for defining, implementing and monitoring a suitable and effective internal control system. Should a failure occur, it undertakes to implement the requisite remedial measures. The Company’s Chairman also serves as Chief Executive Officer. In this role, he/she is assisted by the Chief Operating Officer. The Chief Operating Officer oversees implementation on a day-to-day basis of the general policy defined in advance with the Chairman. The powers of the Chairman and Chief Executive Officer and of the Chief Operating Officer are not restricted by either the Articles of Association or by the decision of the Board of Directors concerning their appointment. Even so, the Board of Directors may cap their rights to authorise the grant, on the Company’s behalf, of sureties, endorsements or guarantees, as stated below. The Board of Directors reserves the right to cap the size of investments that may be made by Executive Management in certain asset classes without its formal approval. Executive Committee The Executive Committee implements the decisions concerning FFP’s strategy in line with the long-term direction set by the Board of Directors. The Chairman and Chief Executive Officer, the Chief

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2017 REGISTRATION DOCUMENT