171 / 186
REPORTS OF THE BOARD OF DIRECTORS
8
REPORT BY THE CHAIRMAN OF THE BOARD OF DIRECTORS
The various risks thus assessed are positioned on a map with two axes
(impact and probability), which is then used to rank them as follows:
●
high probability/significant impact:
priority risks which require
attention and monitoring by the Board of Directors. These risks are
placed under the direct responsibility of one or more members of
the Board of Directors, who are tasked with ensuring that a related
action plan is in place and that the resulting measures taken effectively
reduce the level of risk;
●
high probability/low to medium impact:
risks requiring that the
Board of Directors is regularly informed in order to provide it with a
reasonable assurance of the proper functioning of controls aimed at
reducing the possibility of the risks occurring;
●
low to medium probability/low to medium impact:
risks requiring
that the Board of Directors is regularly informed in order to provide it
with reasonable assurance of the proper functioning of controls aimed
at mitigating the impact in the event that the risks occur;
●
low probability/low impact:
non-priority risks requiring that the
Board of Directors is periodically informed in order to provide it with
reasonable assurance of the proper functioning of controls aimed at
containing the risks in this category or completely eliminating them.
8.1.3.3.4 CONTROL ACTIVITIES IN LINE WITH OBJECTIVES
In view of the Group’s high degree of decentralisation and its policy
of delegating powers and responsibilities, the scope of the controls
implemented is defined by each subsidiary’s management team based
on the Group’s underlying internal control framework.
The main purpose of the controls performed is to reduce the major risks
to which the Group is exposed.
The principal categories of control activities cover the following areas:
●
contract authorisation: the Group has established delegation
principles which give the appropriate managers the necessary powers
to authorise contracts. The controls performed cover each contract
phase:
●
selection of invitations to tender,
●
submission of bids,
●
definition of billing rates and pricing,
●
contract riders;
●
contract review: the Legal Affairs Department conducts an independent
review of major contracts before they enter into force. In particular,
the Legal Affairs Department is responsible for defining the general
terms and conditions of services, which are stated on client invoices;
●
time management and billing: each subsidiary verifies the time entered
into the applications used for this purpose. The controls carried out
ensure that time is correctly allocated to ongoing projects and also
trigger client invoicing;
●
payments: the Group has introduced a dual signature policy for
means of payment. In line with this policy, the Company defines
thresholds for the authorisation of subsidiaries’ expenses based on
categories of authorised signatories. The secure bank messaging
system, “swaps”, is used to ensure that the policy is respected. In order
to reinforce the supervision and control of certain geographically
distanced subsidiaries, the Group Treasury Department receives
details of monthly expenses incurred and carries out
ex-post
controls
on these expenses;
●
budget and budget adjustments: each subsidiary presents the budget
that it has drawn up for the current financial year to the members of
the executive management team who authorise budgets. The same
procedure applies to budget adjustments that are made during the
year;
●
periodic results and reporting: periodic results are reported every
month
via
the reporting and consolidation application (LINK). The
Group Finance Department conducts a critical review of these results
and obtains any further information that it may require from the
relevant subsidiaries.
The Group also places particular importance on the appropriate
segregation of tasks in order to strengthen the controls undertaken in
relation to critical transactions, particularly payments.
In small-sized entities, the appropriate segregation of tasks is sometimes
difficult to achieve owing to the entity’s organisational structure. In
such cases, specific controls are put in place, essentially in the form of
increased supervision by management, which conducts an independent
review of critical transactions for control and authorisation purposes.
8.1.3.3.5 ONGOING MONITORING OF THE INTERNAL CONTROL PROCESS
Overseeing the internal control process is one of the primary duties
of the Board of Directors and the Audit Committee as well as of the
Group’s support and Operations Departments.
The Group’s executive management team defines the Group’s overall
internal control principles and ensures that they are correctly applied.
The Audit Committee examines the main reports related to the accounts
as well as those concerning internal control.
The internal control process is also assessed by local management
(managing directors and finance directors) by way of letters issued by
these executives certifying compliance with the applicable procedures
for preparing the financial statements and other information provided
in connection with the preparation of the annual accounts.
8.1.3.3.6 2017 ACTION PLAN
The Group has made internal control part of a continuous improvement
plan with the aim of enhancing the operational effectiveness of its
processes. In line with this, the action plan drawn up for 2017 notably
includes carrying out a priority review of recently-acquired subsidiaries,
covering financial and legal issues as well as IT systems.
Paris, 7 March 2017
Dominique Louis
Chairman of the Board of Directors
ASSYSTEM
REGISTRATION DOCUMENT
2016
171