Assystem - Registration Document 2016

REPORTS OF THE BOARD OF DIRECTORS

REPORT BY THE CHAIRMAN OF THE BOARD OF DIRECTORS

development. The Group’s financial reporting also includes a series of indicators and aggregates which allow for a finely-tuned analysis of the performance of the various subsidiaries and business units. In addition to these indicators, the Group specifically monitors its indirect costs, billable staff time and billing rates. All of the tools implemented are also rounded out by the Group’s internal control measures. 8.1.3.3.2 INTERNAL COMMUNICATION The Intranet and the reporting and consolidation system are the two centralised communication channels used by the Group to relay key information that is necessary for the people concerned to exercise their responsibilities. The QMS manual and the main procedures applicable at local level (relating to IT, human resources and project management) are published on the Intranet. All of the subsidiaries are equipped with the reporting and consolidation system (LINK), which is the platform used for the financial information published by the Group. An accounting guide is distributed to all Group subsidiaries to ensure that information is submitted in a standardised fashion. The Group communicates with its subsidiaries by circulating memorandums and procedures in order to ensure that matters affecting the Group as a whole, such as investments, cash management, the monitoring of trade receivables, etc., are dealt with in a consistent manner. Lastly, subsidiaries are responsible for setting up and maintaining management information systems that are compatible with the Group’s objectives in terms of reporting financial information and managing projects. At this stage, the Group has not opted to implement a shared management information system for all of its subsidiaries as it considers that the nature of its activities does not require a Group-wide system. It does, however, take care to ensure that the descriptions and content of its key performance indicators are harmonised for comparable activities in order to enable cross-business analyses (in particular project profitability analyses) to be carried out based on the same data, and to facilitate the exchange of skills between business units and countries. 8.1.3.3.3 IDENTIFYING, ANALYSING AND MANAGING RISKS The Group attaches critical importance to effectively managing its risks. The main categories of risk to which the Group is exposed are as follows:

Legal management of subsidiaries and equity interests The Corporate Legal Affairs Department has deployed the Enablon software for managing the Group’s subsidiaries and equity interests in France, Germany, Spain, the UK and the Middle East, enabling it to: ● have a cross-functional and centralised management system for holdings and subsidiaries, covering financial, legal, accounting and tax issues; ● introduce a fast, reliable and powerful tool, which can support the Group’s international growth strategy and deal with the increasing complexity of its operations, and which is available to all support functions (consolidation, accounting, cash management, tax, country- level finance directors, legal experts, etc.). Disposals – Acquisitions 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 or 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. 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. Tools The Group has put in place a set of key indicators which enable it to monitor project management. These indicators are tracked during the quarterly project reviews carried out with operations staff by the CFO & Deputy CEO and the Executive Vice-President in charge of HR ● have software with an integrated data security function;

financial risks; contractual risks;

●

●

● employee-related risks;

market-related risks;

●

8

● risks relating to IT systems.

The “Risk Factors” Chapter of this Registration Document (Chapter 5) describes the Group’s main risks as well as the measures implemented to manage them. The quarterly project reviews help to identify the risks involved in ongoing projects and to decide on any actions to be taken to reduce them. These reviews – which mainly relate to fixed-fee projects – are

169

ASSYSTEM

REGISTRATION DOCUMENT 2016