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LISI 2016 FINANCIAL REPORT
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RISK MANAGEMENT
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INFORMATION ON ISSUER RISKS
1.1
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FOLLOWING COSO GUIDELINES
Since 2004, the Group has been mapping risks in line with COSO
guidelines. More recently it has also been drawing upon the provisions
of Article L. 225-37 of the French Commercial Code on financial
security and the recommendations of the French financial market
authority, the AMF. Having identified and listed risks at the level
of each individual unit (production or distribution sites) the Group
consolidated all of the risks to which it is exposed in a matrix showing
occurrence probability and severity rate. A “top down” approach is
then used to prioritize risks. A periodically reviewed action plan is set
up for each substantial risk identified and, where needed or at the
same time, a proactive preventive approach, insurance, accounting
provision or an operating decision.
1.2
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CLOSE COOPERATION WITH INSURERS
The consistency of the relationship with insurers and risk classification
has helped to structure the Group’s prevention approach. Thus, all of
the insurers’ recommendations regarding damage to property are
included in the Environmental Safety Improvement Plans and are
In an approach meant to analyze the general and specific risks the
Group is exposed to, the following categories have been identified:
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operating risks;
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strategic risks;
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environmental risks;
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legal risks;
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IT-related risks;
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credit, liquidity, market and currency risks (see note 2.4);
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other risks.
subject to periodic monitoring by the Risk Monitoring Committee.
Our insurers revisit a number of sites each year, looking both at
damage to assets and environmental risks, and then present their
recommendations which enhance our action plan. Since 2002,
all the significant sites were audited several times. This ongoing
improvement initiative is improving our prevention policy and enables
us to optimize our INSURANCE premiums. AS such, no major
damage has been observed for years and the loss ratio has been
improving significantly regarding the property damage policy.
1.3
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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, finance and cash flow management.
LISI is not exposed to any risk linked to the sovereign debt crisis in
certain countries that display contrasting growth prospects.
2.1
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OPERATING RISKS
2.1.1
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Exposure to risks of natural disaster
or industrial action
Like any other company, the LISI Group could be disrupted by industrial
strike action or natural disasters such as earthquakes, flooding, or
The Company has carried out a review of the potential risks which could have an unfavorable effect on its business, its financial situation or its
results (or on its capacity to achieve its objectives) and considers that there are no significant risks other than those disclosed.
Risk factors
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