LISI FINANCIALREPORT2013 I
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INFORMATIONREGARDINGTHECOMPANYANDCORPORATEGOVERNANCE
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3
| COMPANY'S INTERNALCONTROL
Descriptionoftheinternalcontrolenvironment
3.1
|
GENERALDESCRIPTION
The wider internal control environment is based on a decentralized
organizationwithineachdivision.AnExecutiveCommittee isresponsible
forratifyingaglobalpolicy,whichmustthenbechanneleddowntoeach
individualdepartment.
TheGrouphassetoutanumberofprocedures,summarizedinaninternal
Group controlmanual, which is available to all relevant Group staff via
an intranet site. This manual is supplemented by a Group accounting
procedures manual. In addition, the Group has deployed a uniform
reporting and information system in each division using an identical
procedureeachtime.
The specificities of the LISIGroup’s activities require that precisequality
controlbecarriedoutonoperationalprocesses inthe followingareas:
n
Production, stock, flowmanagement,
n
Quality,
n
Health,SafetyandEnvironmental,
n
Personnel,payroll,
n
Accounting,managementcontrolandcash flow,
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Purchasingand investments,
n
Sales.
Action is taken within the Group on a continual basis to ensure that
thesemechanisms are effective. This action is regularly assessedusing
performancetables.
3.2
|
SUPERVISORYBODIES
n
The Group’s Board of Directors is the most senior decision-making
entity. The group’s Executive Committee channels the information
to the divisions, which are themselves organized in such away that
enables their management to carry out the Group’s decisions at
individualdepartment level.
n
TheAudit Committee,which includes an independent administrator,
is acquainted, in concert with the external auditors and the internal
auditmanager,with thegeneralmanagement and riskmanagement
environmentatthetimeofpublicationofeach financialstatement.
n
The internal audit unit comprises the Group internal auditmanager
assistedbyanauditor.Dependingon the scaleandnatureof the task
tobe performed, internal and external partnersmay be co-opted to
roundofftheteam.
n
Coordinationwiththeexternalauditors isparticularlyclose inorderto
direct controls specifically towardsareas thathavebeen identifiedas
beinghigh-riskandtoallocatesufficienttimetothetask.
n
Certain tasks identified as critical are monitored in the Group in
a cross-departmental manner: financial management, accounts
management, consolidation, legal services, insurance cover, security
policy, environmental policy, purchasingpolicyandhuman resources
management.
3.3
|
GROUPBASELINE
n
Each division has set up a value charter based on a common set of
values.
n
An internal control procedures manual is in circulation, which is
supplemented by an accounting and consolidation procedures
manual. These procedures aremade available to all the individuals
involvedandare regularlyupdated inelectronic formviaadedicated
Internetportal.
n
Eachdivisionandeachoperationalunit isresponsibleforensuringthat
theseproceduresare followedandadapted to their country’s specific
context.
n
Eachmanagerreceivesnotificationofnewlevelsofresponsibility inthe
formofdelegation letters.
3.4
|
RISK-MAPPINGANDRISKMONITORINGPROCESSES
n
The Group is engaged in a convergent risk-mapping process. This
methodology iscurrentlyemployed throughout theGroupanddown
to the levelof thebasicManagementUnits. It issubject toacomplete
and systematic review once a year. The priority action plans for the
main risks identified ineachdivisionare validatedwithin thebudget
ofthe followingyear.
n
Thehealth, safetyandenvironmental riskscommittee, setup in2001,
identifies and indexes inherent risks, then initiates the necessary
correctiveactions.
3.5
|
MAIN INTERNALCONTROLPROCEDURES
RELATINGTOTHEDRAFTINGANDPROCESSING
OFACCOUNTINGANDFINANCIAL INFORMATION
n
The Group carries out an annual review of the 4 to 5-year strategic
planthathasbeensetoutand,basedonthisreview,definesapriority
action plan. The budget for the coming financial year falls within
the scopeof this plan for a 12-monthperiod. Theplanningprocess is
approved firstby theExecutiveCommitteeand thenby theBoardof
Directors. Progressonpreparationof thebudget isassessedmonthly
atall levels:businessunits (B.U.);GroupandDivisions.
