Registration Document BOUYGUES

with good future prospects is fuelling expansion
in the hotel business. Prospects are positive for
certain industries such as open cast gold mines
in Africa. The company is also engaged in a
strategy of geographical diversification, focusing
on expanding in countries with strong potential
(Australia, Canada).
The company's order book offers a clear view
of short-term business prospects. The company
uses forecasts to anticipate adverse trends, which
gives it a satisfactory ability to react and reallocate
production resources to less affected markets or
activities.
Finally, Bouygues Construction encourages staff
mobility between businesses and geographical
areas and the development of synergies between
the various group companies. Hence, it is always
well-placed to anticipate, react and adapt to
changes in the economic environment.
Compliance risk
Bouygues Construction has, for some years, been
developing a policy to raise manager awareness
of the challenges of ethics and compliance. This
policy prompted the development of an ambitious
training programme, rolled out in 2011, in the form
of seminars dealing exclusively with compliance.
The training programme's objective was to achieve
flawless commercial practice.
Various measures have also been introduced:
> a whistle-blowing system specific to the
Bouygues Construction group that highlights
anti-competitive behaviour;
> the strengthening of commercial intermediation
procedures, with a systematic referral to
ADIT, an economic and strategic intelligence
company;
> an Ethics Committee, set up in 2010, which is
now operational.
Bouygues Immobilier
Bouygues Immobilier has defined and implemented
an internal control system that aims to ensure:
> laws and regulations are complied with;
> instructions and guidelines issued by senior
management are followed;
> internal processes operate correctly and procedures
are applied;
> financial information is reliable.
Internal control is predicated on identifying and
analysing risk factors that may prevent objectives
from being achieved (the notion of risk). Every year,
Bouygues Immobilier carries out a risk mapping
exercise, backed by action plans.
Bouygues Immobilier is also certified ISO 9001.
This certification was renewed in 2009 according
to the ISO 9001 V2008 standard. The certification,
awarded by Afnor Certification, a highly-regarded
independent body, uses audits to provide customers
with assurance that quality procedures are
being correctly applied.
To further strengthen its quality control system,
Bouygues Immobilier has a group Sustainable
Development, Quality and Safety department,
as well as dedicated Quality Directors in the
Residential Property and Commercial Property
divisions. A Quality/After Sales Service Manager's
post has been created in each regional division.
In 2010, following an audit by Cerqual (an independent
certification body) Bouygues Immobilier
won the right to use the "NF Logement" quality
mark. All residential programmes are certified
against the BBC-effinergie ® low energy label, which
requires each programme to undergo an on-site
assessment by an independent body (Cerqual).
Property development risk
Bouygues Immobilier is a property developer. This
involves specifying and arranging the construction
of property complexes for customers, having first
ascertained the administrative, commercial and
financial feasibility of the project and acquired the
site. Bouygues Immobilier specifies the project
but does not assume responsibility for either the
design (for which an architect is retained) or the
construction (which is usually contracted out to
an engineering consultant). Once the necessary
planning consents have been obtained and the
land has been purchased, Bouygues Construction
delegates the construction work to building companies
under the direction of the engineering
consultant. The company also uses the services
of technical inspection firms to ensure due compliance
with building regulations. Although Bouygues
Immobilier does not assume responsibility for
design and construction, it may nonetheless be
held liable in its capacity as project owner in the
event of an accident or claim. The company has
adequate civil liability insurance in place to meet
such claims. The company may also face claims
from customers for defects in properties sold to
them. Under the terms of the completion warranty,
Bouygues Immobilier arranges for contractors to
remedy defects on the snagging list as soon as
possible. The company also ensures that all parties
(contractors, engineering consultants, technical
consultancy firms, etc.) abide scrupulously by
their obligations under the terms of the standard
ten-year construction insurance policy.
Commitment Committees and
acquisition of land – Commencement
of works
Bouygues Immobilier's business hinges on its
ability to secure building land (once the period for
opposition or appeal against the grant of planning
consents has expired) that meets location and
price criteria that suit the needs of its customers.
The resulting land bank is regularly monitored
to ensure that it is in line with market demand in
each region.
There are strict procedures governing decisions
to purchase land. Any legal document intended to
secure land (or a building) that binds the company
(even with a get-out clause) requires prior approval
from a Commitment Committee. Membership of
these committees is determined on the basis of
Bouygues Immobilier internal procedural rules,
which may be adjusted at any time to improve
risk control. The terms of the transaction, and the
decisions taken by the committee, are recorded in
minutes that are distributed to all the stakeholders.
Until such time as the land purchase is completed
by deed signed before a notary, all approvals
granted at committee level and all commitments
are reviewed on a monthly basis.
Similarly, the decision to issue a notice to proceed
with works on a project is governed by strict procedures
(for example, a specified level of salestake-up
is required).
Industrial and environmental risks
Bouygues Immobilier has a risk prevention policy
that involves systematically retaining the services
of an environmental consultancy firm as soon as it
becomes interested in purchasing a plot of land.
If the report raises question marks, the firm is then
asked to perform a more detailed analysis and to
BOUYGUES • 2011 Registration Document • RISK FACTORS • Business-specific risks • 138