LISI 2012 FINANCIAL REPORT
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DOCUMENTS SPECIFIC TO THE ORDINARY GENERAL MEETING
• The Audit Committee, which includes an independent
administrator, is acquainted, in concert with the external
auditors and the internal audit manager, with the general
management and riskmanagement environment at the time
of publication of each financial statement.
• 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.
• 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.
• Certain tasks identified as critical aremonitored in the Group
in a cross-departmental manner: financial management,
accounts management, consolidation, legal services,
insurance cover, security policy, environmental policy,
purchasing policy and human resources management.
Group baseline:
• Each division has set up a value charter based on a common
set of values.
• An internal control procedures manual is in circulation,
which 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.
• Each division and each operational unit is responsible for
ensuring that these procedures are followed and adapted to
their country’s specific context.
• Each manager receives notification of new levels of
responsibility in the form of delegation letters.
Risk-mapping and monitoring processes
• 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 validatedwithin the budget of the following year.
• The health, safety and environmental risks committee,
set up in 2001, identifies and indexes inherent risks, then
initiates the necessary corrective actions.
Main internal control procedures relating to the drafting and
processing of accounting and financial information
• The Group carries out an annual review of the 4 to 5-year
strategic plan that has been set out and, based on this
review, defines a priority action 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 Executive Committee and then by the Board of Directors.
Progress on preparation of the budget is assessedmonthly at
all levels: business units (B.U.); Group and Divisions.
• The monthly consolidation of management indicators, the
income statement, the balance sheet and the funding table
allow a precise measure to be obtained within a short time
of year-end. This facilitates the decision-making process.
• The purchasing and investment process falls within the
scope of the strategic and budgetary mechanism. Any
purchasing or investment commitment that deviates from
the budget authorizations must have prior approval at the
appropriate level.
• The sales and contract process is reviewed specifically by the
local teams, BUs, divisions or the Group depending on the
materiality level, before the actual commitment is made.
• The Cash Flow-Finance process also requires specific
commitments. So for instance all financial investments are
managed at Group level.
• The pay process is managed at operational unit level and is
regularly reviewed both by the internal audit team and by
external auditors.
• The Health, Safety, and Environment (HSE) process has been
subjected to the monthly review of management indicators
(industrial accident rates, non-compliances, etc.) and the
major resulting action plans.
2012 achievements and Outlook
• The Internal Audit Department has developed this year a
new Internal Control Repository, which is based on a self-
declaratory Questionnaire showing all the processes in the
Internal Control Manual: Purchases, Capital Expenditures,
Sales, Inventories, Cash, and Human Resources. Audits were
then used to validate the level of internal control achieve
in each of the business units. Specific monitoring will be
ensured for all those whose level of internal control does
not approach or exceed 80% of the score established on that
questionnaire, which comprises 130 questions.
• In addition, certain initiatives were conducted to provide
assistance to insufficient monitoring and accounting
reporting in some companies recently acquired by the group.
• The "Risk Management" initiative, whose purpose is to
strengthen the Group’s internal controls, is today an integral
part of the process that is in use throughout all the divisions.
