Introduction

Striving constantly for excellence: our commitment

Within FPT Sector, the Compliance Officer, appointed in the organizational chart in staff to CEO, monitors the Internal Control System adequacy with the operative support of the Group's Internal Audit Company (Fiat REVI S.c.r.l.).

In order to strengthen Corporate Governance and to assimilate current standards concerning business ethics, Companies within FPT Sector (e.g. Fiat Powertrain Technologies S.p.A., F.M.A. S.r.l., FPT Racing S.r.l.) have adopted an Organisational, Management and Control Model as required by ex D. Lgs. 231/01 ("Rule that regulates the administrative responsibility of legal persons, companies and associations even without legal responsibility in accordance with art. 11 of Law n.300 of 29 September 2000 ").

"Organismi di Vigilanza" of Legal Entities constantly monitor the Model application, reporting periodically to their respective Board of Directors and Board of Auditors.
Necessary training, whose effectiveness is verified systematically with independent training organisations, is given to employees who are involved in "sensitive processes" (as defined by regulations). All employees are also subject to compliance with the "Code of Conduct "adopted by the Fiat Group; suppliers and consultants are also required to be in compliance with it too.

In order to be compliant with the Law n. 262 of 28 December 2005, FPT works with suitable methodologies, procedures and resources to achieve what is required in terms of risk assessment, process mapping, definition of controls to cover the identified risks, evaluation of Internal Control System over Financial Reporting effectiveness, according to the latest international standards (COSO Framework e PCAOB Auditing Standard n. 05).
Management, through a dedicated team, and the Group Internal Auditor (Fiat REVI S.c.r.l) perform all the controls required for compliance. Activities are monitored during specific meetings in which reference people belonging to FPT Sector and Fiat Group are involved.

During whole accounting year, the external Auditors carry out independent audits, applying the International Auditing Standards.
Companies belonging to FPT Sector have also entrusted to the external auditors the task of certifying their statutory financial statements and consolidated financial statements, even preparing interim reports.
All Companies within the FPT Sector have their own independent Board of Auditors, whose members meet the legal requirements where duties and honour a debt are concerned.

The Audit Plan is implemented regularly by the Companies, its results and Management commitments are monitored by the Compliance Office, and systematically communicated to the
Board of Directors and Auditors.
Every six months, the Compliance Officer prepares a report for the FPT Sector's CEO on the Internal Control System adequacy, classifying weaknesses, action plans and priority action.
FPT CEO, assisted by Management, constantly monitors the main risks impacting on the Sector and the relative corrective action. The Information System Security Officer operates in the Sector to evaluate and protect against possible IT risks.

Monitoring of the objectives assigned to Management and of the operating, economic and financial results is an ongoing process, that is constantly monitored by the CEO.
A system of internal Committees, organised by topic and by level of responsibility, simplifies the regular flow of information and decisions.