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REPORTS OF THE BOARD OF DIRECTORS
8
REPORT BY THE CHAIRMAN OF THE BOARD OF DIRECTORS
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 come 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. Secured financial messaging swaps guarantee
compliance with this principle. In order to reinforce the supervision
and control of certain geographically distanced subsidiaries, the
Group Treasury Department receives details of monthly expenses
incurred;
●
budget and budgetary adjustments: each subsidiary presents the
budget that it has drawn up for the current financial year to the
members of the Executive Committee 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 from the relevant subsidiaries any further information that
it may need to fully understand them.
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 departments and operating divisions.
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 2016 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 this respect, the action plan drawn up for 2016 includes
specifically the following points:
●
ongoing review of the risk map;
●
priority review of recently-acquired subsidiaries. For example, in
2015, the Radicon company, acquired in January 2015, was
integrated through the combined action of the head office, the
Energy & Infrastructure division teams, and local teams. A strategic
Committee was set up every month within the Company, in the
presence of shareholders, thus usefully completing the operational
Committees, to which an Assystem representative is systematically
associated. In addition, an audit of the opening balance and methods
for recognising revenue was carried out during 2015 in order to
identify the risks at the beginning of the year, to provision them and
to apply the Group’s overall rules and methods to Radicon.
Paris, 9 March 2016
Dominique Louis
Chairman of the Board of Directors
183
ASSYSTEM
FINANCIAL REPORT
2015