ASSYSTEM_Registration_Document_2017

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

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

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 and a Treasury Management System 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 daily basis for the Eurozone and on a monthly basis for other countries. These reviews cover the forecasts for the main cash flows related to operating, financing and investing activities. The Group has 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.

hardware and software. Acquisitions and disposals

The identification of acquisition targets and their pre-selection are initiated by a dedicated department and/or the operations department concerned and are then validated by the executive management team and the Finance Department. Following the performance of operational, financial, HR, tax and legal audits, aimed at ensuring the targets are compatible with the Group's business model, as well as reviewing their financial performance and identifying potential risks, acquisition proposals are presented to the Board of Directors for approval. Acquired companies are immediately integrated into the Group's operational and management reporting process and, depending on their size, the Group's information systems are deployed to guarantee the reliability of financial information. Disposals of assets and securities are validated by the Board of Directors and the executive management team and are managed and monitored at Group level in conjunction with the operations department concerned. 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 operations departments 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. Communication of results The preparation and validation of press releases and investor presentations concerning the Group's results are governed by a specific procedure involving the Group's executive management team, the Finance Department, the Communications Department and the Statutory Auditors. Draft earnings releases are submitted to the Audit Committee and the Board of Directors for review. The Group takes all reasonable measures to provide regular, reliable, clear and transparent information to its shareholders and financial analysts. Information is provided through press releases, the quarterly publication of the Group's revenue figures and the half-yearly and yearly publication of its results. The Group organises meetings with financial analysts twice a year, when it publishes its results, as well as conference calls four times a year, when it publishes its quarterly revenue figures.

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ASSYSTEM

REGISTRATION DOCUMENT 2017