2007 - April

1.0
Management report
Lastly, he works with the findings and recommendations set
out by the internal audit manager in connection with their
audit assignments and the assignments carried out by other
players, including financial controllers, business division
auditors, Statutory Auditors, etc.
The risk manager informs and advises the Group Committee,
and reports on this mission to the Sustainable Development
Committee.
Each type of risk is subject to an in-depth review, with a risk
map and action plan drawn up for each company, aimed
at eliminating, transferring or reducing the residual risk.
The company’s managers are responsible for implementing
the action plan defined in connection with the audits or
mappings, formally reporting on them at least once a year at
June’s Strategic Committee meeting.
At the same time, the Group internal audit manager ensures
the coherency and efficiency of internal control within Group
companies. Lastly, he coordinates and controls the activities
of all the Group’s internal audit departments.
An annual audit plan is drawn up, factoring in the exposure to
risks in the various Group companies. This plan concerns all
the companies in the Group. The plan for Year N is validated
at the end of Year N-1 by the Group Committee. It is formally
reviewed and presented to the Sustainable Development
Committee twice a year for follow-up. It may also be updated
as and when necessary according to the priorities identified
over the course of the year.
This concerns several types of assignments: cross-business
assignments and optimization issues, specific audit and
control assignments, assignments to monitor companies
that have recently been incorporated into the Group,
and assignments to follow up on previous audits. These
assignments are carried out in line with the internal audit
charter, a set of standards that all of the managers of Group
companies are familiar with.
A written report is drafted along with a synopsis of the
recommendations issued further to all such missions, rated
based on three categories: high risk, moderate risk and
low risk. For each recommendation, a deadline is set and a
manager appointed.
The application of recommendations is monitored through
follow-up missions during which progress made against the
planned deadlines and recommendations is checked.
In 2007, 12 internal audit missions were carried out in eight
Group companies, notably covering the following issues:
intellectual protection within the Group, review of insurance
policies, application of the French law on intermediation, preclosing
process, compensation and IT risks. In addition, two
integration follow-up audits were carried out on companies
that joined the Group in 2005.
All of this work aims to consolidate the internal control
process within Group companies.
Market risk (interest rate, foreign exchange, equity, credit)
Link between the business and the risks identified
APRIL GROUP’s business is based around two key areas
with significantly different approaches to market risks:
brokerage, which does not expose the Group to market
risks, and insurance companies, for which market risk
management represents one of their core businesses.
Brokerage
Through its activity and financial model, where cash-flow
generates a negative working capital requirement, the
brokerage business enables the Group to achieve a particularly
low level of debt (total financial debt of only 30,305 thousand
euros on the consolidated balance sheet) and a very high level
of liquidity (177,718 thousand euros in net cash and cash
equivalents on the consolidated balance sheet).
The Group’s financial debt primarily comprises a subordinated
loan representing 1,524 thousand euros, 10,703 thousand
euros in various bank borrowings, 2,294 thousand euros
in credit current accounts and 15,118 thousand euros in
financial liabilities resulting from commitments to buy out
minority interests.
The Group’s cash-flow, excluding current bank borrowings, is
invested in full in short-term financial investments (96,568
thousand euros at December 31 st , 2007) primarily through a
dedicated “monetary equivalent” UCITS (APRIL Trésorerie).
Insurance companies
One of the basic functions of the insurance business involves
investing premiums received from clients, pending payments
for any claims incurred.
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