Assystem - Registration Document 2016

REPORTS OF THE BOARD OF DIRECTORS

REPORT BY THE CHAIRMAN OF THE BOARD OF DIRECTORS

Operating procedures Business operating procedures

Administrative procedures Sales

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 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. ASSYSTEM REGISTRATION DOCUMENT 2016 167

The Group has put in place a quality management system (QMS) which is available on its Intranet in France, the United Kingdom and Germany, the three main countries in which it operates. The QMS – which is a key repository of information on quality for the Group’s operations – is also applicable in other countries that are significant for the Group’s business. It includes a map of business processes and a set of related procedures and instructions. The quality managers use this system to carry out periodic audits aimed at assessing whether the applicable quality standards are being respected. Pre-sales and client contracts Pre-sales and client contract processes are defined in the QMS. Before any bid is submitted, an internal decision-making process takes place on whether or not to actually respond to the client’s invitation to tender. If the decision is positive, a technical and commercial bid is drawn up and is then subject to validations concerning its technical, financial, and legal aspects. Performing services and reviewing ongoing projects Contracts are managed by project managers. Monthly reviews are organised, at an operational level, for major fixed-fee projects, involving an examination of the project’s technical status, costs and revenues, cash flow curve and margin on completion. In addition, within the Group, a task force (essentially made up of operations managers) conducts periodic project audits covering all of the Group’s business units. This project management system has been rounded out via the creation of the Project Management Community, which now provides a forum for around 500 of the Group’s leading project managers to exchange ideas, share experiences and achieve continuous improvement. Assystem also has a Project Management Institute, which was created at the same time as the Project Management Community with a view to strengthening the project culture within the Group. The Project Management Institute provides a specific and structured training programme each year, facilitating the development and assessment of project managers’ skills. In 2015, a new training course on “Earned Value Management” was added to the Institute’s catalogue. 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 50 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 and the Executive Vice-President in charge of HR development. 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 by line management, and the corresponding recruitment procedures are defined and managed by each country’s Human Resources Department. Overall budgets for remuneration increases are managed at the level of each operating entity and each country and are reviewed and validated by the management team.

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