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BOARD OF DIRECTORS

INFORMATION AND CONTROLLING INSTRUMENTS FOR SUPERVISING THE GROUP EXECUTIVE BOARD

The Management Information System (MIS) of the Kuoni Group is structured as follows. The financial statements of the individual subsidiaries are prepared on a monthly, quarterly, semi-annual and annual basis. These figures are aggregated per segment/division and consolidated for the Group. The figures are compared with the previous year and the budget. The attainability of the budget is assessed on the basis of quarterly reporting and forecasts. The heads of the divisions submit monthly written reports on the progress of business to the Group Executive Board and the Board of Directors. These reports are discussed with the Group Executive Board at the Board of Directors’ meetings, as are the implementation and observance of Board resolutions and the company’s liquidity levels.

Any member of the Board of Directors may demand to be informed about the company’s affairs. The CEO is responsible for informing the Board of Directors about the current course of business and important business transactions occurring in the company and in its subsidiaries. The CEO reports to the Chairman of the Board at regular intervals. The CEO must also inform the Chairman immediately of any unusual events, and the Chairman will in turn pass such information on to the members of the Board.

To ensure the direct information of the full Board of Directors, the CEO regularly attends meetings of the Board of Directors and its committees unless the Board or its committees need to conduct a closed meeting session. The CFO also attends all meetings of the Audit Committee and is further present for most agenda items at full Board meetings. The further members of the Group Executive Board attend Board meetings for particular agenda items as and when required. The Chairman of the Board also receives copies of the minutes of all meetings of the Group Executive Board.

The company’s risk management function provides an established risk model for identifying, managing and monitoring strategic and operational risks throughout the Kuoni Group. The groupwide risk profile consists of the risks identified in the Group’s main country organisations (adopting the bottom-up approach) and groupwide strategic risks (adopting the top-down approach). The present risk profile and the current status of risk-reducing measures resolved are regularly monitored and are reported twice-yearly to the Board of Directors.

Internal Audit complements the controlling mechanisms available to the Board of Directors and reports directly to the Board’s Audit Committee. Internal Audit supports the Group Executive Board in special projects as requested by the CEO or other members of the Group Executive Board, and in other matters. Internal Audit’s main task is to conduct an independent assessment of internal control systems and their effectiveness with regard to potential risks. The reports prepared by Internal Audit regarding the audits carried out are submitted to the members of the Audit Committee, the Chairman of the Board, the CEO, the CFO, the Head of IT, the Head of Corporate Controlling, the Group General Counsel and the external auditor. Each report also contains comments by the Group Executive Board regarding the key findings of the audits conducted in addition to suggested improvements.

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