InformationregardingtheCompanyandcorporategovernance
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LISI 2014FINANCIALREPORT
The specificities of the LISIGroup’s activities require that precisequality
controlbecarriedoutonoperationalprocesses inthe followingareas:
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Production, stock, flowmanagement,
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Quality,
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Health,SafetyandEnvironmental,
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Personnel,payroll,
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Accounting,managementcontrolandcash flow,
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Purchasingand investments,
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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
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Supervisorybodies
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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 a way that
enables their management to carry out the Group’s decisions at
individualdepartment level.
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The Audit Committee, which includes an independent administrator,
is acquainted, in concert with the external auditors and the internal
auditmanager, with the generalmanagement and riskmanagement
environmentatthetimeofpublicationofeach financialstatement.
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The internal audit unit comprises the Group internal audit manager
assistedbyanauditor.Dependingon the scaleandnatureof the task
to be performed, internal and external partnersmay be co-opted to
roundofftheteam.
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Coordinationwith theexternal auditors isparticularlyclose inorder to
direct controls specifically towards areas that havebeen identified as
beinghigh-riskandtoallocatesufficienttimetothetask.
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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, purchasing policy andhuman resources
management.
3.3
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Groupbaseline
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Each division has set up a value charter based on a common set of
values.
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An internal control procedures manual is in circulation, which is
supplementedbyanaccountingandconsolidationproceduresmanual.
Theseproceduresaremadeavailabletoall the individuals involvedand
areregularlyupdated inelectronicformviaadedicated Internetportal.
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Eachdivisionandeachoperationalunit is responsible forensuring that
theseprocedures are followed and adapted to their country’s specific
context.
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Eachmanagerreceivesnotificationofnew levelsof responsibility inthe
formofdelegation letters.
3.4
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Risk-mappingandmonitoringprocesses
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The Group is engaged in a convergent risk-mapping process. This
methodology is currently employed throughout theGroupanddown
to the level of thebasicManagementUnits. It is subject toa complete
andsystematicreviewonceayear.Thepriorityactionplansforthemain
risks identified ineachdivisionare validatedwithin thebudget of the
followingyear.
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Thehealth, safetyandenvironmental risks committee, setup in2001,
identifies and indexes inherent risks, then initiates the necessary
correctiveactions.
3.5
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Main internalcontrol procedures
relating to thedraftingand
processingofaccountingand
financial information
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TheGroupcarriesoutanannual reviewof the4 to5-yearstrategicplan
thathasbeensetoutand,basedonthisreview,definesapriorityaction
plan. The budget for the coming financial year falls within the scope
of this plan for a 12-month period. The planning process is approved
first by the ExecutiveCommittee and thenby theBoardof Directors.
Progressonpreparationof thebudget isassessedmonthlyatall levels:
businessunits (B.U.);GroupandDivisions.
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The monthly consolidation of management indicators, the income
statement, the balance sheet and the funding table allow a precise
measure tobeobtainedwithinashort timeofyear-end.This facilitates
thedecision-makingprocess.
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The purchasing and investment process falls within the scope of the
strategic and budgetary mechanism. Any purchasing or investment
commitment thatdeviates from thebudget authorizationsmusthave
priorapprovalattheappropriate level.
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The sales and contract process is reviewed specifically by the local
teams, BUs, divisionsor theGroupdependingon themateriality level,
beforetheactualcommitment ismade.
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TheCashFlow-Financeprocessalso requiresspecificcommitments.So
for instanceall financial investmentsaremanagedatGroup level.
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The pay process ismanaged at operational unit level and is regularly
reviewedbothbythe internalauditteamandbyexternalauditors.
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TheHealth,Safety,andEnvironment (HSE)processhasbeensubjected
to themonthly reviewofmanagement indicators (industrial accident
rates,non-compliances,etc.)andthemajorresultingactionplans.
