2014 Annual Report 67

on the progress achieved. These action plans are supervised by the general manager responsible for each of the Group s businesses and monitored annually by the Internal Audit Department.

With regard to financial reporting, the preparation of each subsidiary s financial statements involves:

Use of a Group-wide chart of accounts;

Reference to an accounting manual designed to harmonize the Group s accounting policies.

Subsidiaries prepare monthly reports, including prior year comparatives, as well as annual profit forecasts. The Group s Finance Department monitors performance actively and vali- dates the information received from the finance directors responsible for each of the Group s businesses.

Each subsidiary s statutory accounts, as well as the restating entries for the purposes of the Group s half-yearly and annual consolidated financial statements, are also subject to statuto- ry audit at the level of each subsidiary. Subsidiaries statutory auditors are appointed on a coordinated basis with the parent company s auditors. The directors of each subsidiary sign a letter of representation, addressed to the Board of Directors, as to the quality and content of their financial statements.

The process of preparation of the Group s consolidated finan- cial statements is underpinned by an information system enabling the collection of subsidiaries statutory accounts as adjusted for Group reporting purposes, plus the additional information required for the consolidated financial statements.

In order to provide optimal internal control over the consoli- dation process and data used, the abovementioned system is a unique one the access to which is strictly controlled. The reli- ability of the consolidation processing and the faithfulness of the resulting consolidated financial statements are guaranteed by appropriate segregation of duties and supervision.

As part of their verification of the consolidated financial state- ments, the statutory auditors perform an annual review of the procedures contributing to their preparation and issue recom- mendations for their improvement which are acted on in order regularly to improve our existing procedures.

WORK PERF MED FOR THE PURPOSES OF PREPARATION OF THIS REPORT Preparation of this report has been based both on the inter- nal control methods just described, on work performed by the Group s risk management functions at the request of Group Management and in particular, of the Chairman, and on the preparatory work performed by the Audit and Risks Commit- tee which prepared a report on its activity in 2014 that was presented and discussed at the meeting of the Board of Direc- tors held on February 26, 2015.

The same Committee met on February 24, 2015 to interview the persons responsible for preparing the Group s financial and accounting information. The results of those interviews were equally presented and discussed at the meeting of the Board of Directors held on February 26, 2015.

INTERNAL CONTROL AND RISK MANAGEMENT