ANNUAL REPORT 2011 REGISTRATION DOCUMENT - Saft

4 Report
CORPORATE GOVERNANCE
of the Chairman of the Supervisory Board
� for stock options granted under the plan adopted on
2 September 2010, the Group’s consolidated EBIT
margin must be positive in the fi nancial year that the
stock options are granted (if the grant takes place in
the fi rst half of the calendar year) and in the following
two fi nancial years (or the next three fi nancial years if
the stock option grant is made in the second half of the
year). This amendment was ratifi ed by the Supervisory
Board at its meeting on 2 November 2010;
� Management Board members must abstain from exercising
their options during the following windows:
� a period of 60 days prior to publication of the press
releases with regard to the annual results,
� a period of 30 days prior to publication of the press
release with regard to the half-year results,
� a period of 15 days prior to publication of press releases
with regard to quarterly revenues.
Full information on the remuneration of corporate offi cers is
provided in tabular form in section 4.2 “Remuneration and
shareholding of the Management and Supervisory Board
members” of this Annual Report.
4.3.2 RISK MANAGEMENT AND
INTERNAL CONTROL PROCEDURES
a) Internal Control and risk management
procedures
The Company has put in place Internal Control procedures
and risk management processes designed to ensure that the
information contained in the Consolidated Financial Statements
is reliable and to exercise Internal Control over the Group’s
companies. The Saft Group includes the parent company Saft
Groupe SA and its consolidated subsidiaries, detailed in the
notes to the Consolidated Financial Statements. The Group
does not include the ASB joint venture, as it is accounted for
under the equity method.
Defi nition and objectives
The Group’s defi nition of internal control is based on that drawn
up by the Committee of Sponsoring Organisations (COSO) of
the Treadway Commission, whose report was published in the
United States in 1992.
Within the Group, Internal Control is defi ned as the set of
processes contributing to the control of activities and effi ciency
of operations, designed to ensure the rigorous and effective
management of the Group.
The purpose of the Group’s Internal Control system is therefore
to provide reasonable assurance regarding the achievement of
the following objectives:
� compliance with applicable laws and regulations, as
well as with the Group’s defi ned strategies and internal
procedures;
� protection of the Group’s assets;
100 / SAFT - ANNUAL REPORT 2011
� prevention and control of fraud and error, particularly in the
area of accounting and fi nance;
� reliability of fi nancial and accounting information.
Its purpose is also to avoid and control the risks arising from the
Group’s activities.
As in any control system, it cannot provide an absolute
guarantee related to the implementation of the Group’s
objectives and the control of all the risks.
In this respect, the likelihood of achieving these objectives is
subject to the limits inherent in any Internal Control system and
in particular human error, cases of deliberate collusion between
several people making it possible to elude the control system in
place, or cases where the implementation, or maintenance of
control, is more burdensome than the risk which it is supposed
to mitigate.
Persons responsible for Internal Control procedures and risk
management
The Internal Control and risk management system was
designed and implemented by the Management Board, and
applied and deployed by all staff under the responsibility of
the Group’s managers. It is under the control of the Supervisory
Board, which receives regular reports on the functioning of the
Internal Control system and the work carried out.
Since 2010, Audit and Internal Control activities have been
managed by a person working full-time in this area, reporting
to the Group’s Chief Financial Offi cer, but able to refer matters
directly to the Chairman of the Management Board and/or the
Audit Committee, when necessary. To carry out certain tasks,
the Audit and Internal Control Manager regularly uses specifi c
external resources.
The Group’s Internal Control processes
The Group has based its Internal Control approach on the
following fi ve components set out in the COSO report:
� control environment;
� risk assessment;
� control activities;
� information and communication;
� monitoring Internal Control.
Control environment
The Group has created a strict control environment underpinned
by the role of the Saft Management Committee (SMC),
which is responsible for discussing and setting the Group’s
strategic goals. The SMC is chaired by the Chairman of the
Management Board and meets at least once a month. Based
on the fi les presented to it and information exchanged at
meetings, the Committee marks out the path to be followed by
the Group, sets the foundations for the decisions to be taken by
the Group’s corporate governance structures, and monitors all
projects and activities at the highest level.
Furthermore, the Group has an Audit Committee, a
Remuneration and Appointments Committee and a Strategy
and Technology Committee, established in 2011.