2006 - Interparfums

The system of monthly reporting implemented by
Inter Parfums facilitates the analysis of financial performances
and cash flows in addition to operating and net income
forecasts for the period in progress. This reporting system
provides the basis for tracking income statement aggregates
for each operating entity in relation to budget and actual of
prior year.
The reporting system in place and the existence of short
decision-making channels involving reporting lines for the
different operating entities directly to the Chairman and Chief
Executive Officer, assures the company a high degree
of responsiveness and good visibility for financials.
1.1
Key operating processes: product design and
development, the management of production,
sales to distributors
Based on the strategic goals set by the Chairman and Chief
Executive Officer, managers of each operating entity concerned
produce an annual budget presented to the latter for approval.
This budget will then be implemented according to a process
uniformly applied to all departments.
Accordingly, as soon as the Chairman and Chief Executive
Officer has decided to develop a new product, Marketing
& Creation, establishes a budget for the creation and launch
of the new products or promotional products subject
to the agreement of the Chairman that will provide the basis
for determining the amounts and allocations.
Once the process of launching the new products has been
put into motion, Production & Logistics begins the production
phase by developing a budget for the purchase of the
components necessary for the production of the finished
product according to the brief defined by Marketing & Creation.
The budget process implemented is fundamental and
provides a means to ensure the optimal management
of production costs for products.
Before the products are introduced on the market,
the strategic business units (Burberry Fragrances,
Luxe & Fashion and French Distribution) produce monthly
sales budgets that will serve as the basis for comparison with
the subsequent monthly reporting of actual sales. A rigorous
planning process for sales, regular periodic budget revisions
and meetings to monitor performances by the Finance
Department and Executive Management provide the basis
for a reliable reporting system.
1.2
Resource management process of the Finance
Department
The Finance Department is responsible for the resource
management process which covers financial communications,
accounting, consolidation, legal affairs, management control,
cash management and information systems.
The Finance Department, is possible for centralizing Group
cash management and the production of coherent Group
financials ensures that all internal control procedures have
been implemented to guarantee the reliability of the
organization of accounting, reporting and financial statements
necessary to safeguard the corporate assets, comply with
the dates for recognizing transactions ensuring the reality
of the transactions and the exhaustive nature of information.
In this respect, the Finance Department determines notably
the framework for the management of foreign exchange,
cash pooling, trade receivable risks, human resources,
committed fixed costs and overhead, monitoring capital
expenditures and compliance with tax obligations.
This department establishes the consolidated financial
statements of all Group companies under IFRS and US
GAAP and, within this framework, develops methods,
standards and accounting guidelines to ensure the
exhaustive nature, fair presentation and accuracy of
accounting and financial information within a timetable that
complies with reporting requirements imposed by financial
market and legal obligations.
Accordingly, in connection with procedures for closing
accounts and consolidation, the Finance Department defines
for each operating and financial process, the framework for
special treatment, useful information, the parties concerned
and the deadlines for reporting to the accounting department.
1.3
Relations with statutory auditors
In connection with the certification of accounting and financial
information two statutory auditors:
■ perform a limited review of the interim financial statements,
■ conduct a full audit of the annual financial statements
preceding which a pre-closing review is performed
to anticipate the principal issues associated with
the annual closing.
After completing their missions, meetings are held
at which they present their eventual comments
on the financial statements.
They also perform reviews of procedures which completes
the internal process of evaluation by notably verifying the
conditions according to which internal control procedures
are managed and the effectiveness of these internal controls
in respect to the accuracy of financial information.
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