Assystem - 2015 Registration Document

REPORTS OF THE BOARD OF DIRECTORS

REPORT BY THE CHAIRMAN OF THE BOARD OF DIRECTORS

Because the Group has a diversified client base and works in different business sectors it is able to satisfactorily balance the risks relating to the markets in which it operates. In this respect, the General Management team meets regularly to debate the changes that have occurred or may occur in the Group’s economic and commercial environment and decide on measures to be implemented to take them into account. Management and operational IT systems are vital for the Group to carry out its activities. In order to effectively deal with the risks relating to these systems, the Group has established a series of procedures intended to guarantee the security of systems and information as well as data integrity and the continuity of operations. These key procedures include a business continuity plan. The risk mapping procedure implemented by the Group covers the different categories of major risks to which the Group is exposed and measures these risks in terms of impact and vulnerability ( i.e. net exposure to risks after taking existing controls and risk reduction measures into account). Assystem has opted for a “top-down” approach to allow the Group’s management to obtain an overall view of the risks to which the Group is exposed. This overall view emerges as a result of discussions with members of the management team and with Assystem’s key operations and corporate support managers. The discussions are based on an inventory of the main risk factors, an assessment of their potential impact and likelihood of occurrence, and cover the following main themes:

8.1.3.3.3 IDENTIFYING, ANALYSING AND MANAGING RISKS The Group attaches critical importance to effectively managing its risks. The main categories of risk to which the Group is exposed, to a greater or lesser extent, are as follows:

financial risks; contractual risks;

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● employee-related risks;

market-related risks;

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● risks relating to IT systems.

The “Risk factors” chapter of this Registration Document describes the Group’s main risks as well as the measures implemented to manage them. The quarterly project reviews help to identify the various risks involved in ongoing projects and to decide on any actions to be taken to reduce them. These reviews – which mainly relate to fixed-fee projects – are carried out using check-lists and enable the following areas to be dealt with: ● recognition of revenue in line with the financial progress of the contract; cash flows. Monthly project reviews are also organised inside business units. These reviews cover a virtually exhaustive spectrum of ongoing projects. The General Management team, the operating divisions and the Human Resources Departments are responsible for assessing employee-related risks; These risks mainly stem from the high levels of staff turnover that are a characteristic feature of the engineering and consultancy industries. A member of the general management team is in charge of developing human resources within the Group. Working closely with all the relevant parties, he defines the key aspects of the Group’s human resources policy and the main priorities of annual recruitment campaigns. Our human resources teams also work closely together in order to effectively manage the risks relating to periods between contracts and to the transfer of skills from one sector to another. ● margin on completion; ● contractual risks and related reserves and provisions; ●

business/operations;

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● contract and project management; ● HR/people and skills management;

finance;

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● legal and fiscal compliance; ● results and performance;

● image and reputation. For each of the above categories, the main risks have been identified, defined and assessed in terms of their impact and probability of occurrence. The following criteria are used to assess the impact of identified risks and lielihood of occurrence.

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ASSYSTEM

FINANCIAL REPORT 2015