REGISTRATION DOCUMENT AND FINANCIAL REPORT - Iliad

16. FUNCTIONING OF THE COMPANY’S ADMINISTRATIVE AND MANAGEMENT BODIES
16.4 INTERNAL CONTROL
An internal control system can only provide reasonable assurance – and not an absolute guarantee – that the
Company will achieve its objectives.
The Iliad Group’s internal control system is structured around (i) internal rules, which set out regulations to be
respected by employees within each Group company, and (ii) procedures and controls inherent to the individual
systems of each department.
The Group does not currently have a specific Internal Audit department, but the Finance Department, as well as
the accounting and management accounting control teams and the other departments described above are at the
heart of the overall internal control system.
Each Group company reviews its accounting and financial data on a monthly basis.
(iii) Control processes for major risks
The Group has set up an internal control system that enables it to manage the risks relating to its business
strategy, development and decision-making processes.
Risks relating to the Group’s operations and business strategy
In 2000, the Group created a research and development team with a view to safeguarding its capacity to remain
technologically innovative. This team reports directly to Senior Management.
In addition, in view of the Group’s rapid growth and in order to anticipate recruiting needs – notably within the
call center teams – a reporting procedure has been established to measure the volume of calls received and dealt
with, and to monitor queuing time. These reporting schedules are relayed regularly to Management.
Management is also regularly provided with technical information concerning the Group’s platform and network,
as well as recruitment needs (in terms of number of staff and skills), and the financing required in order to
develop the Group’s technical infrastructure.
Risks relating to the Internet and telecommunications sectors
In accordance with the specific regulations relating to the Group’s operations in the field of telecommunications,
the Company’s compliance with the applicable laws and regulations is regularly monitored by the compliance
department. Risks relating to the Group’s business sectors are principally monitored by an internal team
dedicated to tracking regulations within the Internet and telecommunications sectors as well as the financial and
legal impact of these regulations on the Group’s operations.
This team reports to the Senior Vice-President responsible for compliance issues.
Legal risks linked to Internet access
In order to limit the risks relating to the potential liability of Internet access and web hosting service providers,
the subscription procedure set up by Free does not permit any anonymous users on its network. This procedure
does not allow a new user to connect online, as new users must wait until they have received a confirmation letter
with a username and password before they can connect to Free for the first time.
This procedure, which enables the Group to validate the name and address of each new subscriber, was set up
when Free was initially launched and means that the Group has no anonymous users on its network.
Consequently, Free can respond to and assist with any requests concerning the identity of any dubious users in
the event of a legal claim.
Legal risks are monitored by a specific department. In addition, the Company has taken out specific insurance
policies to cover the risks arising from its operations.
Iliad – Registration Document 2007 - 97