Saint Gobain - Registration document 2016

7 RISKS AND CONTROL 2. Internal control

2.5

ORGANIZATION OF INTERNAL CONTROL IN PREPARING AND FOR SHAREHOLDERS PROCESSING FINANCIAL AND ACCOUNTING INFORMATION

2.5.1

company) financial statements Compagnie de Saint-Gobain (parent

compare actual and year-to-date expenses with the initial signature, allowing them to check these expenses and also to budget. Finance Department and the Group’s general management at A summary of these cost accounting reports is sent to the the end of each month. reliability of the financial statements. for managing accounting risks and contributing to the Measures are implemented to strengthen the arrangements level of accounting control by the Finance Department of Financial Control Department, with the aim of increasing the Balance Sheet Review under the direction of the Group For this purpose, in 2016, Group units were subject to a each entity.

opening balance sheet with the prior-period closing balance consistent application of accounting policies, alignment of the including the going concern principle, the principles of generally accepted accounting standards and principles, periods, and substance over form. revenue to which they relate, segregation of accounting sheet, recognition of expenses in the same period as the This information is prepared in accordance with current and third parties in accordance with French legal requirements. financial information for shareholders, partners and other The Accounting Department is responsible for producing works upstream to anticipate the accounting impacts of represented. The organization also has an advisory role and accounts and the true and fair view of the events which are material impact on the Company’s financial statements. events and the regulatory changes that are likely to have a terms of classification of transactions, and complies with the The chart of accounts is aligned with the Company’s needs in Information system. materiality principle. It is linked to the Group’s Financial 2.5.3 Internal control is based on periodic assessments of the process for preparing accounting and financial information. In addition to controlling compliance with payment authorization procedures and the double signature rule for contributes to internal control by acting as guarantor in secure payment means, the Accounting Department enables the monthly reconciliation and substantiation of the and procedures set out in the Group’s doctrine memos. It The accounting organization is based on the rules, methods Internal control and formalized through a cost accounting system organized respect of responsibilities defined by general management monthly schedules listing the expenses incurred under their by cost center. Specifically, cost center managers receive Accounting organization 2.5.2

statements Group consolidated financial

2.5.4

Financial Information System for the Group and all the maintaining and developing consolidation systems and the consolidation process, processing information, and utilizing, procedures, training, and integrating the subsidiaries into the department is also responsible for updating consolidation Group Consolidation and Reporting Department. This The consolidated financial statements are prepared by the

Sectors.

2.5.5

Group standards

English. New consolidation instructions are issued for each intranet site and an online training application in French and previous period-end and enhancements to reporting systems, monthly closing, describing the changes compared with the the consolidation manual, a number of data input manuals, an conjunction with the Sectors and General Delegations, using standards and procedures, in collaboration with the Group’s Doctrine Department. Each year, the Consolidation Department offers training sessions. information and periodic training to subsidiaries in The Consolidation Department is responsible for providing

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SAINT-GOBAIN - REGISTRATION DOCUMENT 2016

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