ASSYSTEM_Registration_Document_2017

MANAGEMENT REPORT

INTERNAL CONTROL AND RISK MANAGEMENT PROCEDURES PUT IN PLACE BY THE COMPANY RELATING TO THE PREPARATION AND PROCESSING OF ACCOUNTING AND FINANCIAL INFORMATION

In line with the above, the internal control system has five main objectives which can be summarised as follows:

Reasonable assurance

Objective

Finance

That the financial information produced and published is reliable.

Compliance Operations

That the applicable laws, regulations, standards and all other obligations are respected.

That operations, activities and processes work effectively and efficiently. That assets (human, tangible and intangible) are secure and protected.

Integrity Strategy

That the Group's strategy and the resources put in place to implement it contribute to achieving the objectives of growth, profitability and business sustainability.

3.8.3 COMPONENTS OF THE INTERNAL CONTROL SYSTEM

The main procedures of the internal control system, in particular those relating to the preparation and processing of accounting and financial information, are described in the Section below, “Organisation, responsibilities, operating procedures and tools”.

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3.8.3.1 Organisation, responsibilities, operating procedures and tools ORGANISATION The Group’s organisational structure is largely decentralised, which by definition results in a high degree of delegation of operational, functional and legal responsibilities to company officers and managers. Its internal control system and information systems therefore need to be adapted to this structure in order to effectively contribute to monitoring its operations. Delegations of authority and responsibilities are drawn up in writing after approval by executive management. The Group's Code of Conduct, validated by the Board of Directors, is available to all employees. RESPONSIBILITIES The responsibilities assigned to employees are set out in writing in job descriptions which are validated by their line managers and supplemented, where applicable, by delegations of authority. Job descriptions help to clarify the nature of the work and transactions for which the employees are responsible by clearly describing the type and method of supervision applicable and by integrating, where required, the internal control dimension by setting out their responsibilities related to complying with and updating procedures, etc. The delegations of authority describe the permanent or temporary transfer of responsibilities and chiefly relate to the departments involved in financial transactions (incurring and authorising capital expenditure, ceilings set regarding procurement, supplier payments, etc.). The bank signing powers put in place at local level must reflect these delegations of authority as closely as possible. Having suitable resources to achieve its objectives is essential for the Group, notably due to the level of staff turnover. The Human Resources Departments play a key role in guaranteeing this suitability. In conjunction with the operations departments, they draw up staff training plans and coordinate annual performance appraisals during which the achievements for the past year are reviewed, targets for

the following year are set and the skills that need to be acquired or consolidated are identified.

OPERATING PROCEDURES Business operating procedures

In France, the Group has put in place a quality management system (QMS) which is available on its Intranet. The QMS – which is a key repository of information on quality for the Group's operations – is also applicable in other countries that are significant for the Group's business. It includes a map of business processes and a set of related procedures and instructions. The quality managers use this system to carry out periodic audits aimed at assessing whether the applicable quality standards are being respected. Pre-sales and client contracts Pre-sales and client contract processes are defined in the QMS. Before any bid is submitted, an internal decision-making process takes place on whether or not to actually respond to the client's invitation to tender. If the decision is positive, a technical and commercial bid is drawn up and is then subject to validations concerning its technical, financial, and legal aspects. Performing services and reviewing ongoing projects The performance of contracts is overseen by project managers. Monthly reviews are organised, at an operational level, for major fixed-fee projects, involving an examination of the project's technical status, costs and revenues, cash flow curve and margin on completion. In addition, within the Group, a task force (essentially made up of operations managers) conducts periodic project audits covering all of the Group's business units. This project management system has been rounded out via the creation of the Project Management Community, which now provides a forum for around 50 of the Group's leading project managers to exchange ideas, share experiences and achieve continuous improvement. Assystem also has a Project Management Institute, which was created at the same time as the Project Management Community with a view to strengthening the project culture within the Group. The Project Management Institute provides a specific and structured training programme each year, facilitating the development and assessment of project managers' skills.

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ASSYSTEM

REGISTRATION DOCUMENT 2017