Basic HTML Version
LISI 2011 —
88
— financial report
Risk factors
3.3
Drawing up action plans
The action plans for safety / environment / prevention identified
within the Group allow for a synthesis of hazard identification on
the one hand, the preventive approach on the other, and finally asset
preservation and control of operations within the Group. The program
is coordinated by the head company of the LISI Group in the areas of
HSE, internal controls and cash flow management.
.4
Information on issuer risks
In an approach meant to analyze the general and specific risks the
Group is exposed to, the following categories have been identified:
– operating risks,
– strategic risks,
– environmental risks,
– legal risks,
– IT-related risks,
– credit, liquidity, market and currency risks (see note 2.4),
– other risks.
4.1
Operating risks
4.1.1 Exposure to risk of natural disaster or industrial action
In common with any other company, the LISI Group could be disrupted
by industrial strike action or natural disasters such as flooding,
earthquake or even pandemic. Such events could negatively affect
Group sales revenue or cause a substantial increase in expenses
required to cover system maintenance or repair. However, due to the
diversity of the sites, the LISI Group cannot be exposed for more than
15% of its overall business.
4.1.2 Acquisitions
In order to manage any risks related to the integration of newly-
acquired companies and to ensure the transfer of Group management
principles, the LISI Group’s policy is to acquire a total or at least
majority controlling stake in the capital of any potential acquisitions.
Any acquisition or sale plans are subject to approval by the Board of
Directors. All the group’s acquisitions are the subject of an in-depth
audit of the risk areas at the target company. The Group generally sets
up mixed teams, using internal and external experts.
4.2
Strategic risks
These risks are identified as major risks likely to compromise durably
the completion of the strategic plan. All identified risks which are
classified in the “High risk” category of occurrence are the subject
of insurance coverage (see paragraph 5.1) or of a corrective action
plan and are treated as a priority by the managements of the various
divisions.
4.3
Environmental risks
The LISI Group is committed to protecting the environment whilst
manufacturing its products. Any negative impact resulting from its
activities isminimal, and specific attention is paid towater, energy and
waste management.
Its industrial and environmental policy aims to manage its major risks,
which are:
– the risk of fire and its potential impact on affected sites or their
environment,
– the risk of soil or water table pollution.
This risk management policy involves:
– the ongoing improvement of the fire protection of the sites, which
are subject to annual monitoring and visits,
– investment in protection systems, with the installation of sprinkler
systems or upgrading of existing systems,
– pollution risk prevention: the Group is implementing an appropriate
prevention policy.
As part of the manufacturing sites’ compliance program, and in the
absence of any ongoing legal disputes, the Group has made provisions
for an overall sum of €8.6m. Concrete measures are being taken to
prevent soil pollution on old sites, including carrying out monitoring
activities in concert with the local authorities, on the one hand, and
implementing retrofitting work, on the other hand.
More specifically, a sum of €4.9m has been established which relates
to the assessed cost of decontaminating the Torrance site (California –
USA) which suffered TCE (solvent) pollution several years ago (before
1975). The process that is currently in progress involves pumping and
filtering undergroundwater downstreamfromthe site. This treatment
has facilitated processing over 15 metric tons of TCE in shallow
pollution, and over 7metric tons in the layers further from the surface.
The estimated amount at December 31, 2011, facilitates handling of
treatment in accordance with the techniques recommended by our
advisors. Liaison with the authorities has led to the swift closure of
the soils file and to the acceptance of measures taken with regard to
the deepest waters.
As part of the Social and Environmental Responsibilities requirements,
LISI Automotive undertakes to reduce the impact of its activities