Financial Report and Registration Document 2010 - Groupe Seb

2 CHAIRMAN’S
CORPORATE GOVERNANCE
REPORT ON INTERNAL CONTROL
Documentation for this system includes reference to all procedures, tools
and methods relating to the Group’s key processes:
management procedures, definition of Group policy, strategic planning,
constant improvement in quality, and safeguarding the environment;
operational processes including strategic marketing, R&D, sales and
marketing, client order processing and production transfers;
operational support functions, covering human resources, information
systems, purchasing, finance, after-sales service and customer assistance.
The Quality department uses monthly feedback reporting to fi ne-tune its
action plans, which are then submitted to the Group Executive Committee.
THE FINANCIAL COMMUNICATIONS DEPARTMENT
Each year, this department draws up a schedule of the Group’s regular
financial communications for financial markets and institutional investors. It
identifies, in collaboration with the Legal department, legal and regulatory
requirements for publication of Group financial notices.
ACCOUNTING AND FINANCIAL INFORMATION PROCEDURES
Internal control procedures for accounting and financial information aim to
ensure the quality of the financial information provided by the consolidated
subsidiaries, and the fairness and accuracy of the fi nancial information
issued by the Group, while safeguarding against risks of error, inaccuracy
or omission in the Group’s financial statements.
Groupe SEB uses internal control guidelines based on AMF framework
guidelines and accounting and financial audit principles.
CENTRALIZED TREASURY AND FINANCE
OPERATIONS
Local regulations permitting, the Group Finance department ensures the
financing of its subsidiaries via cash pooling, inter-company financing
contracts and the use of currency flows for payments and receipts.
This centralization of operations allows the Finance department to:
control external debt and monitor its development;
manage the risk rate inherent in the contracted debt;
finance its subsidiaries in their local currency where regulations permit;
anticipate and manage currency risk inherent in commercial and financial
flows.
Another important element of internal control is the Group’s centralized
choice of working-partner banks and effective long-term management of
these relations.
This organization enables the Finance department to ensure overall control
of the Group’s treasury operations.
CONSOLIDATED ACCOUNTS MANAGEMENT
AND CONTROL
We have already described the role of Group Management Control in
overseeing monthly consolidated financial management information.
Budgetary control identifi es deviations from performance targets, on the
basis of monthly consolidated data which is compared to an analysis of
Group operational directives. This makes it possible to identify any changes
or discrepancies in relation to financial budget data and previous years.
This decentralized statutory consolidation includes all the companies in
the Group that are directly or indirectly controlled by the Group’s holding
company, SEB S.A.
Each consolidated subsidiary prepares a set of accounts, restated to comply
with the Group’s accounting procedures and based on accounting data from
local information systems. All the Group’s entities apply IFR accounting
standards.
The Finance Managers of the subsidiaries prepare the restated accounts
on the basis of the Group’s accounting procedures manual, which sets out
rules for accounting entries and evaluation.
This manual describes the principles used to draw up financial statements.
The principles cover areas such as preparation of accounts on the
assumption of operational continuity, compliance with accounting periods,
and ensuring the integrity of the information in the fi nancial statements.
It is regularly updated to integrate changes in legislation and regulations
governing the preparation of consolidated accounts in France.
The accounting procedures manual also gives a precise description of the
principles used by the Group for accounting entries, and evaluation and
presentation of the main items in the financial statements:
descriptions of constituent items of the consolidated income statement
with their defi nitions, as well as consistency tests for the purpose of
taxation;
rules governing balance sheet and off-balance sheet items and their
presentation;
regulations concerning the valuation of certain estimated items, such as:
provisions for the impairment of receivables,
provisions for the impairment of stocks of raw materials and finished
products,
provisions for the impairment of non-current assets,
provisions relating to sales (e.g., warranties and unsold returns),
other provisions for risks and charges and in particular, provisions for
restructuring;
accounting principles applied to reporting intra-Group transactions.
54 FINANCIAL REPORT AND REGISTRATION DOCUMENT 2010 GROUPE SEB