Assystem - Registration Document 2016

REPORTS OF THE BOARD OF DIRECTORS

REPORT BY THE CHAIRMAN OF THE BOARD OF DIRECTORS

See the risk factors Section in Chapter 5 for further information on the Group’s risks.

The purpose of internal control is to ensure:

● compliance with the applicable legislation and regulations; ● the application of instructions and guidelines stipulated by the Board of Directors; ● the smooth functioning of each entity’s internal procedures, in particular those designed to take into account risks encountered in their activity and consequently, to safeguard assets; However, internal control cannot provide an absolute guarantee that Assystem’s objectives will be met, as any internal control system has inherent limitations. These limitations are due to various factors, such as uncertainties in the external environment, the exercise of judgement, or the cost/benefit relationship of setting up new control mechanisms. Assystem’s internal control system concerns all fully consolidated subsidiaries controlled by the Group. The summary information set out in this report relating to internal control procedures is centred on significant elements that could have an impact on the financial and accounting information published by the Group. The Group has chosen to apply the internal control framework advocated by the AMF in its recommendation no. 2015-01 issued on 12 January 2015. The internal control procedures in place within the Group, and notably those relating to the preparation and processing of accounting and financial information, are broken down on the basis of the five main components of internal control (see Section 8.1.3.3 below). This report also describes the procedures in place for identifying, analysing and managing risks. ● the reliability of financial information.

8.1.3.1 Internal control players and organisation of internal control procedures The Company has a full set of measures in place intended to control and reduce any risks that could prevent it from achieving its objectives. These measures take the form of procedures, instructions, supervisory arrangements, authorisations, delegations of responsibility, etc. The overall internal control system forms an integrated framework covering the entire scope of the Group: divisions, business units, legal entities, countries, departments and all business processes. Assystem’s Board of Directors is ultimately responsible for ensuring that the internal control system is implemented properly and functions effectively. Since it is responsible for initiating and spearheading the Group’s clearly-expressed strategy of deploying an integrated internal control system, Assystem’s management team is the system’s owner. However, all Group players are part-owners in the sense that they are the agents and custodians of the system. Assystem’s various operations are carried out by project teams that work closely with their clients in order to deliver appropriate solutions in a rapid timeframe. In order to ensure the requisite responsiveness and enable each profit centre manager to take the necessary decisions a decentralised organisational structure has been put in place within the operating units.

The table below summarises the main roles and responsibilities of each category of internal control player.

Internal control player

Internal control roles and responsibilities

• Initiates and spearheads the internal control system by relaying clear information and guidelines. • Is responsible for deploying the internal control system across the Group and ensuring that it functions effectively. • Ensures that the internal control system is in line with the Group’s business strategy and risk portfolio. • Ensures that the Group has a consistent internal control system that is compatible with its overall business strategy and risk profile. • Approves the internal control system and is regularly informed of the findings of audits and the recommendations implemented. • Consults the management team in order to form an opinion on the construction and effectiveness of the internal control system. • Ensures the effective functioning of the risk management process related to the preparation of financial information. • Steers the Group’s business strategy and sets the targets for consolidated entities, allocates the resources necessary for their achievement and tracks performance based on those targets. • Operations Committee meetings are held on a monthly basis between the Group executive management team and the management team of each division in order to review all management indicators. During these meetings, particular attention is paid to programmes in the development phase, in terms of indicators related to quality, economic performance and respecting deadlines. • The Financing and Treasury Department, the Management Control Department, the Quality Department, the Legal Affairs Department, and the regional and country-level financial directors play a key role in internal control due to their cross-disciplinary skills. • Is responsible for deploying the internal control system within the scope of its remit (i.e. its BU, legal entity, country or department) and ensuring that it functions effectively. • Ensures that the internal control system is aligned with the structure, strategy, tactics and organisation of its scope of remit.

Board of Directors

Audit Committee

Group executive management team

Operations Committees

8

Finance teams

Operations management

• Are actively involved in implementing the internal control system. • Carry out work and operations in compliance with the established internal control system. • Inform Management of any malfunctions and help determine remedial measures.

Operations and support staff

165

ASSYSTEM

REGISTRATION DOCUMENT 2016