sain t-gobain annu al report 2008 annual report

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The audits are based on a 20-step audit for manufacturing
units and a 12-step audit for distribution units.
They are performed by staff working in the operating units –
generally in the area of EHS – who have received specific
training in auditing techniques.
In all cases, the audit is performed by an auditor from another
Sector, ensuring that the process is doubly rigorous.
All three areas are covered – environmental protection,
health and safety – in an integrated process. The audit
standards comply with OSHAS 18001 and ISO 14001.
In 2008, 577 twelve-step audits and 259 twenty-step audits
were scheduled within the Group.
To enable unit managers to quickly and easily obtain
an overview of their unit’s EHS performance, a self-assessment
tool has been developed, comprising a detailed list
of questions and a measurement scale. There are two types
of self-assessment packs, one for industrial operations
and the other for distribution operations, for small units
(than 50 employees).
Information Systems Department
In addition to its general responsibilities with regard to
information systems, the Information Systems Department
is tasked with drawing up Group systems and network
security policies.
Risks and Insurance Department
The Risks and Insurance Department defines Group industrial
risk management policies. It issues insurance guidelines
(see below) and organizes visits to key sites by external risk
prevention auditors. In 2008, around 450 such visits took place.
At the end of each audit, recommendations are issued to
enable site managers to draw up an action plan.
In addition to helping to reduce the risk of accidents, these
audits serve to align insurance coverage with potential risks
by setting appropriate limits on claims.
Since January 1, 2004, property and casualty risks at the
manufacturing and distribution units, except in Brazil,
are insured by a wholly-owned captive insurance company,
with a cap of €12.5 million per claim.
The use of a captive insurance company facilitates risk
prevention decisions.
The subsidiaries’ property & casualty and liability insurance
programs are managed by the Risk and Insurance Department
either directly or indirectly through the General Delegations.
Treasury and Financing Department
The Treasury and Financing Department defines financing
policies for the entire Group (Compagnie de Saint-Gobain, the
General Delegations and the subsidiaries).
Cash management transactions are subject to periodic
controls and the Treasury and Financing Department is
audited twice a year. The audit covers financial market
transactions for the previous six months, including positions
that have been settled as of the period-end, and focuses on
their content and any associated risks. In addition, each year
the external auditors perform procedures on the accounting
recognition of cash management transactions as part of their
audit of the accounts.
New information systems are audited when they come
on-stream or subsequently. Systems in production are
reviewed each year by the external auditors to assess their
level of internal security.
The Internal Audit Department performs periodic reviews,
on a rotating basis, of transactions by the General Delegations’
cash management units, to check their compliance
with Treasury and Financing Department policies
and the quality of internal control.
Internal controls over cash management transactions are
an integral part of internal audit plans for the subsidiaries,
and are also examined by the subsidiaries’ external auditors.
At Group level, the cash position is monitored at monthly
intervals based on detailed analyses of gross and net debt
by currency, type of interest rate and maturity, before
and after hedging. Due to Compagnie de Saint-Gobain’s
central role in the Group’s financing, its debt structure is
monitored through a specific monthly reporting system.
Financial Control Department
Capital expenditure, acquisition, divestment and merger
projects and capital transactions prepared by the Sectors are
submitted to the Financial Control Department for validation,
following a detailed analysis of their financial impacts.
The validation process also includes consulting the corporate
departments and the General Delegation concerned about
the project’s legal, tax and employment aspects. The financial
controllers’ analyses are submitted by the Finance Department
with the authorization request to Group senior management
for a decision.
Compagnie de Saint-Gobain’s internal control
and risk management procedures
Compagnie de Saint-Gobain has developed numerous internal
control and risk management procedures for its own needs
and those of its subsidiaries. Key procedures are as follows:
Saint-Gobain - 2008 Annual Report