2014 Annual Report66

INTERNAL CONTROL AND RISK MANAGEMENT

GENERAL REMARKS Bongrain SA s internal control procedures are designed in particular to ensure that the accounting and financial infor- mation communicated to its corporate governance bodies provides a true and fair view of the financial performance and financial position of the companies comprising the Group. They are also intended to provide control over the operating processes deployed in the Group s various operating entities.

Internal controls are implemented by each Group entity and by Group general management, with support from the Board of Directors and its Audit and Risks Committee, as an integral part of their missions and with the purpose (in conjunction with the Group s risk mapping) of ensuring that:

The laws and regulations applying in each of the countries in which the Group operates, and the Group s operating poli- cies, are duly complied with; Its assets are safeguarded; The accounting and financial information communicated to its corporate governance bodies provides a true and fair view of the financial performance and financial position of the companies comprising the Group and complies with all the applicable laws and regulations.

The internal control procedures are equally designed to prevent and detect error and fraud.

As with any system, they cannot provide absolute assurance as to the complete identification and control of all risks.

The Group s enterprise risk management at all levels of the Group, based on its risk mapping, aims to control the Group s operating, financial, strategic etc. risks whilst optimizing:

Means of prevention; Means of reducing or covering risks (e.g. via insurance); The acceptance of certain risks.

RISK MAPPING The Group possesses a mapping of its risks prepared by its Risk Management Department in liaison with general management. This mapping is designed to identify the main risks to which the Group is exposed and to evaluate them in terms of their potential impact on the Group s financial position or image. Deployment of our enterprise risk management approach to the Group s main operating subsidiaries is in progress in order to improve the Group s knowledge of the risks with which it is confronted and control its exposure to the most significant risks identified.

CONTROL PHILOSOPHY The Group s internal control and enterprise risk manage- ment procedures reflect its policy of subsidiarity and oper- ating autonomy of its various units, as well as the description of its risks. The parent company controls the operations of its subsidiaries via:

Specialized departments responsible for providing guidance and supervision; The Finance Department which assesses their results and the Group s levels of borrowing.

The Board of Directors Audit and Risks Committee assesses the effectiveness of the controls in place based on the work performed by Internal Audit and by the Group s statutory auditors.

In the framework of a multi-annual plan the Internal Audit Department, which reports to Group general management, assesses the level of internal control prevailing at each entity using for that purpose the framework of reference defined by the Autorité des Marchés Financiers (AMF), France s financial markets oversight board. Its assignments contribute to identi- fying the major risks associated with each entity s operations, in conjunction with the Group s risk description prepared in the framework of the Group-wide enterprise risk management approach currently under deployment. The report prepared at the end of each assignment highlights points for improvement of internal control. The entities involved are then required to prepare and implement action plans and report periodically