ASSYSTEM_Registration_Document_2017

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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

The Procurement and General Resources Department then participates at various stages of the negotiation process in order to ensure that leases are effectively tracked, in France, and where necessary, in other countries. Regular budget reviews concerning premises both in and outside France are carried out so that information can be regularly exchanged between the General Services and Management Control Departments and that data on existing premises can be updated and current and future projects analysed. Delegations of authority The principles applicable to the delegations of authority put in place meet a three-fold objective: ● to raise the awareness of operations managers about their responsibilities in terms of health and safety; ● to create a power of representation for the Assystem Group for the benefit of operations managers; ● to set a precise framework within which operations managers exercise their authority (including the possibility of sub-delegation). The delegations mainly concern commitments directly related to operational areas (hiring of consultants or sales managers, signature of client contracts, dispute management, etc.). Bank signing powers are only partly delegated, in France and abroad, and for limited amounts. 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’s executive management team and the Group Finance Department carry 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: ● 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 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 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 the operating units. ● issue of the requirement by the internal client;

The risk analysis procedure created in 2013 has now been fully rolled out across all existing offerings and contracts. Training on this procedure is provided to some 20 project managers every year. Project reviews are also organised on a quarterly basis at the Group's head office in the presence of the CFO & Deputy CEO. These reviews relate to projects that represent amounts exceeding a defined threshold (which varies depending on the scopes and countries concerned) as well as projects that have specific characteristics or are exposed to specific risks. They are used to examine the technical and financial progress of the projects and to update the assessment of associated risks, and where required, to draw up appropriate action plans and determine the ways and means to implement them (both for clients and in-house). Human resources, recruitment, and payroll management Human resource requirements are determined and conveyed by line management, and the corresponding recruitment procedures are defined and managed by each country's human resources department. Overall budgets for pay increases are managed at the level of each operating entity and each country and are reviewed and validated by In France, investigations are carried out before any client account is opened in order to ensure the client's solvency (supported by a monitoring process to alert the Company to any major changes in solvency). All client accounts are covered by a debt recovery procedure based on tailored reminder scenarios. For this purpose, the Company uses client account and debt recovery management software in France. This software is used at various stages of the billing process as from when the invoice is issued: pre-reminders before the due date, reminders, identification of late payments, identification of disputes and monitoring of their resolution, inventory of promises to pay (and verification of invoice payments at the specified dates). Similar procedures, adapted on a case-by-case basis to the specific businesses and countries concerned, are implemented in the Group's non-French entities. Consequently, the measures and procedures put in place to prevent client risks and to improve the effectiveness of trade receivables recovery allow the Group, as far as possible, to limit bad debts and ensure good generation of operating cash flow. In addition, the Group has strict internal rules that apply to all consolidated entities and which stipulate the revenue recognition procedures for the various types of activities and projects (mainly time and materials, work packages and fixed-fee projects). Lastly, the Group has drawn up reinforced General Terms and Conditions of Service, which are systematically integrated into the bids it submits to clients. Real estate If new premises are required for particular operations, a statement of requirements is drawn up by the operations manager concerned, which is then validated by the head of the relevant Business Unit and forwarded to the General Services Department at Group and/or country level for processing and examination of the corresponding business case. The executive management team is then responsible for analysing the project and validating the size and cost of the premises selected. the management team. Administrative procedures Sales

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ASSYSTEM

REGISTRATION DOCUMENT 2017