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INFORMATION REGARDING THE COMPANY AND CORPORATE GOVERNANCE
149
LISI 2015 FINANCIAL REPORT
3
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COMPANY'S INTERNAL CONTROL
Description of the internal control environment
3.1
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GENERAL DESCRIPTION
The wider internal control environment is based on a
decentralized organization within each division. An Executive
Committee is responsible for ratifying a global policy, which
must then be channeled down to each individual department.
The Group has set out a number of procedures, summarized
in an Internal Group Control manual, 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
procedure each time.
The specificities of the LISI Group’s activities require that
precise quality control be carried out on operational processes
in the following areas:
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Production, stock, flow management,
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Quality,
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Health, Safety and Environment,
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Personnel, payroll,
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Accounting, management control and cash flow,
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Purchasing and investments,
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Sales.
Action is taken within the Group on a continual basis to ensure
that these mechanisms are effective. This action is regularly
assessed using performance tables.
3.2
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SUPERVISORY BODIES
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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 individual department level.
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The Audit Committee, which includes an independent
administrator, is acquainted, in concert with the external
auditors and the internal audit manager, with the senior
management and risk management environment at the time
of publication of each financial statement.
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The internal audit unit comprises the Group internal audit
manager assisted by an auditor. Depending on the scale and
nature of the task to be performed, internal and external
partners may be co-opted to round off the team.
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Coordination with the external auditors is particularly close
in order to direct controls specifically towards areas that have
been identified as being high-risk and to allocate sufficient
time to the task.
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Certain tasks identified as critical are monitored in the Group
in a cross-departmental manner: financial management,
cash management, consolidation, legal services, insurance
cover, security policy, environmental policy, purchasing
policy and human resource management.
3.3
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GROUP BASELINE
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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 and is
supplemented by an accounting and consolidation procedures
manual. These procedures are made available to all the
individuals involved and are regularly updated in electronic
form via a dedicated Internet portal.
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Each division and each operational unit is responsible for
ensuring that these procedures are followed and adapted to
their country’s specific context.
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Each manager receives notification of new levels of
responsibility in the form of delegation letters.
3.4
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RISK-MAPPING AND MONITORING PROCESSES
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The Group is engaged in a convergent risk-mapping process.
This methodology is currently employed throughout the
Group and down to the level of the basic Management Units.
It is subject to a complete and systematic review once a year.
The priority action plans for the main risks identified in each
division are validated within the budget of the following year.
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The Health, Safety and Environmental Risks Committee, set
up in 2001, identifies and indexes the risks involved, then
initiates the necessary corrective actions.
3.5
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MAIN INTERNAL CONTROL PROCEDURES
RELATING TO THE DRAFTING AND PROCESSING
OF ACCOUNTING AND FINANCIAL INFORMATION
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The Group carries out an annual review of the four-year
strategic plan and defines a priority action plan accordingly.
The budget for the coming financial year falls within the
scope of this plan for a 12-month period. The planning