Assystem - Registration Document 2016

8

REPORTS OF THE BOARD OF DIRECTORS

REPORT BY THE CHAIRMAN OF THE BOARD OF DIRECTORS

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 monthly basis, in France and in other countries. These reviews cover the forecasts for the main cash flows related to operating, financing and investing activities. In 2016, the Group 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. 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 hardware and software. Insurance The list of insurable risks and the risk coverage policy are managed by the Group Legal Affairs Department. Assystem’s Human Resources Department is responsible for overseeing the specific insurance programmes applicable to employee expatriation assignments (to and from France). Entities held by MPH Global Services SAS and which operate in the Middle East and Africa have their own insurance programme for their expatriation assignments. 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 operating division 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.

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 Finance Department carries 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 various 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 Group’s 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 its operating units. 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 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. ● issue of the requirement by the internal client;

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ASSYSTEM

REGISTRATION DOCUMENT 2016

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