Universal Registration Document 2019

136 LISI 2019 UNIVERSAL REGISTRATION DOCUMENT Risk factors 5 Introduction The Group is engaged in a convergent risk management process. The Group manages risk mapping 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 amatrix 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 a proactive preventive approach, insurance, accounting provision or an operating decision. 1  /  Risk matrix: principal major risks identified and reduction measures We would like to inform the reader that the list of risk factors presented in this section is not exhaustive and that, in view of current global economic events, these factors are liable to vary in terms of both intensity and probability. The management routines put in place within the Group make it possible to update the mapping on a continuous basis and to implement anymeasures that may be needed tomitigate the effects and/ or the assessed severity. We have chosen to present the summary of the risks facing the Group in two families: ■ Risk factors specific to the Group’s business: operational risks. ■ Risk factors independent of the Group’s business. COVID-19 As this risk matrix was prepared prior to the current situation being seriously affected by the ongoing Covid-19 crisis, the risk of a pandemic had indeed been identified, but was not considered to be a major risk due principally to the likelihood of its occurrence. In order to respond to the crisis, the LISI Group immediately formed a Steering Committee in order to put in place: ■ strict measures to safeguard the health of the employees and service providers in the workplace as and when their presence is essential, ■ a business continuity plan to prepare for the gradual resumption of normal activity, ■ measures to protect financial liquidity in order to secure the Group’s future room for maneuver. As for the financial impact, it is impossible to quantify it, but it will have a significant impact on the results for at least the first half without, however, compromising the Group’s financial health or business continuity. In conclusion, it should be noted that the principal risk factors had already been identified pre-COVID-19 and that the risk of a pandemic is not mentioned as such, even if it now proves to be a major risk in the Group’s overall matrix.