168 / 186
REPORTS OF THE BOARD OF DIRECTORS
8
REPORT BY THE CHAIRMAN OF THE BOARD OF DIRECTORS
Budgeting and management control
The various operating units draft and present their strategy and annual
budget to the executive management team. The Group’s annual budget
is then approved by the Audit Committee and the Board of Directors.
The Group Finance Department carries out a monthly analysis and
cross-check of the various key reporting indicators in order to identify
any variation from forecasts, detect any significant shortfalls (notably
in terms of the gross margin on contracts, operating gross margin, the
operational non-billing rate and client payment times) and propose
remedial measures if required.
Purchases
Purchasing procedures are subject to separate controls at the following
stages of the process:
●
issue of the requirement by the internal client;
●
purchase of the equipment or service by the department concerned
(general services, IT, etc.);
●
validation of the service and/or delivery by the department concerned;
●
validation of the payment authorisation and invoice by the Accounting
Department based on the various relevant documents.
Payment of invoices is organised by the Accounting Department, which
ensures that upstream controls have been carried out and checks, using
sampling techniques, the information used as the basis for validating
the invoices.
The Group has strengthened its General Purchase Conditions.
Consolidation
The Group’s consolidated financial statements are prepared in
accordance with International Financial Reporting Standards (IFRS),
based on accounting data prepared under the responsibility of the
heads of its operating units.
Points of particular significance for the Group are dealt with centrally.
For example, the Group Finance Department reviews the accounting
treatment of disposals and acquisitions of assets and shares and the
regular tests carried out on the value of the Company’s assets.
Accounting
The Group Finance Department coordinates the accounts closing
processes and sends out any necessary memorandums and instructions
to all consolidated entities. In addition, it meets regularly with the
Statutory Auditors in order to present specific and significant transactions
carried out during the year and the accounting options selected.
Financing and cash management
The Group has put in place a centralised management system for cash
and investments, by setting up a cash pool for entities in Eurozone
countries and putting in place other cash centralisation procedures for
other entities. The Board of Directors defines the cash management
policy on a yearly basis with the overall aim of guaranteeing the liquidity
and security of investments.
Currency and interest rate hedges as well as the counterparties for
these hedges are centralised at the level of Assystem SA. The number
of banks used for these instruments is limited.
The Group has chosen Swift Net to ensure that its bank messaging is
secure. Combined with its cash management software in Saas mode,
this solution provides an optimised system for centrally managing the
Group’s cash on a day-to-day basis and for minimising financial risk by
offering a fully integrated management solution for cash and payments.
The Group monitors actual and forecast cash flows for each subsidiary
on a monthly basis, in France and in other countries. These reviews cover
the forecasts for the main cash flows related to operating, financing
and investing activities.
In 2016, the Group rolled out across the majority of its consolidated
entities a web-based system for cash flow consolidation, reporting
and analysis, which provides specific responses for highly operational
issues, including:
●
building and structuring processes for monitoring “sliding” and
updated cash flow forecasting;
●
standardising and simplifying the reporting and data collection
processes;
●
analysing, for a given period, gaps between actual and forecast
figures;
●
easily dealing with the other issues that arise as a result of the
Group’s activities (cash pooling, inter-company transactions, multiple
currencies, identification of cash and non-cash flows).
Financial commitments
Financial commitments – including off-balance sheet commitments –
require prior approval. In addition, as part of the accounts closing
process, the operating units are required to list all of the commitments
they have given and received.
Capital expenditure
A capital expenditure authorisation procedure covering all capex
categories is applicable to all Group subsidiaries. Given the Group’s
business, these expenditures are limited and mainly concern computer
hardware and software.
Insurance
The list of insurable risks and the risk coverage policy are managed
by the Group Legal Affairs Department. Assystem’s Human Resources
Department is responsible for overseeing the specific insurance
programmes applicable to employee expatriation assignments (to
and from France). Entities held by MPH Global Services SAS and
which operate in the Middle East and Africa have their own insurance
programme for their expatriation assignments.
Legal disputes
Legal disputes involving Assystem SA and its subsidiaries are monitored
and reported on a continuous basis by the Group Legal Affairs Department
in conjunction with legal experts at the level of the operating division
and/or countries concerned. A quarterly reporting system has been set
up in France whereby the potential financial impact of legal disputes
is analysed by the finance directors of each Operations Department,
and, if required, by the Group Finance Department.
ASSYSTEM
REGISTRATION DOCUMENT
2016
168