2011 Annual report - touax group

➜ 2.1.3. Components of internal control
The main internal control policies are determined according
to the company’s objectives.
The Group’s objectives are defined by the Managing Partners.
They concern not only its economic performance but also the
areas in which the Group aims to achieve a particular level of
excellence.
These objectives are specified for each entity and are clearly
explained to the employees so that they understand and
adhere to the organization's risk and control policy.
The main components of the internal control system are: (i)
organization, (ii) the information system, (iii) risk management,
(iv) control activities, and (v) constant monitoring of procedures.
The internal control system put in place by the senior
management is in line with the Group's strategy and organization.
The system is supported by the operational and functional
departments whose mission is to make it known within the
organization.
➜ 2.1.4. Scope of internal control
The system of internal control put in place by the company is
appropriate for its size.
TOUAX SCA makes sure that this system is applied by its
subsidiaries. This system is suited to their characteristics and to
the relations between the parent company and its subsidiaries.
➜ 2.1.5. Players involved in internal control
Internal control concerns everyone within the company, from
the management bodies to each member of staff.
❙ Management Board
The Management Board defines, promotes and supervises the
system that is the best suited to the Group's situation and
business.
In this connection, the Managing Partners keep themselves
regularly informed of any malfunctions, inadequacies or
implementation difficulties and ensure that the necessary
corrective action is taken. The management informs the
Supervisory Board of any important points.
❙ Supervisory Board
It is the responsibility of the management to given an account to
the Board of the essential features of the internal control system.
The Board may use its general powers to carry out the controls
and checks that it considers fit, and to take any other action it
considers appropriate in this respect.
An Audit Committee has been formed within the Supervisory
Board, which monitors the process of drawing up financial data
and makes sure that there is an internal control system that is
coherent and compatible with the Group's strategy and risks.
The Audit Committee reports on its work to the Supervisory
Board.
❙ Internal audit
The operational divisions are wholly responsible for the use of
the system within their remit and its proper functioning.
The functioning and effectiveness of the internal control system
is assessed by the financial controllers in each division based
on requests by the management. In addition there is an internal
audit department whose role is to provide constant monitoring
of the internal control system.
❙ Company employees
All employees have the knowledge and information required
for setting up, operating and monitoring the internal control
system at their level of responsibility, according to the targets
they are set.
2.2. Identification of risks
One risk is the possibility that an event may occur whose
consequences could affect persons, assets, the environment,
the company's targets or its reputation.
To safeguard its future development and the achievement of its
targets, the Group makes sure that it identifies analyses and
manages comprehensively the risks to which it is exposed related
to its various areas of activity, processes and assets.
The aims of risk management are to:
• create and safeguard the value and reputation of the Group,
• secure the Group's decision-making and procedures,
• ensure that the Group's actions are consistent with its values,
• mobilize the Group's employees around a common vision of
the main risks.
These risks are identified in section 4 Risk factors, page 21 of
the reference document. One or more of these risks, or other
risks not yet identified or considered as immaterial by TOUAX,
could have an adverse effect on the its business, financial
situation, profits or share price.
2.3. Risk control
Risk management aims to identify and limit risks to the company's
assets, resources, personnel, continued existence, profitability,
reputation and its values in the broad sense of the term.
The risk management activities are implemented on a daily
basis by all members of staff, while performing their duties.
The Administration and Finance Department is in charge of risk
management and coordinates this general system of risk
management and control.
➜ Financial and accounting risks
The financial risks are market risks (interest rate and foreign
exchange risks), liquidity and/or counterparty risk, and equity
price risk.
Report of the Supervisory Board and of the Chairman of the Supervisory Board 135