Page 158 - 2012 Annual Report

158 VIVENDI l 2012 l Annual Report
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INFORMATION ABOUT THE COMPANY – CORPORATE GOVERNANCE
SECTION 4 - REPORT BY THE CHAIRMAN OF VIVENDI’S SUPERVISORY BOARD ON CORPORATE GOVERNANCE, INTERNAL AUDITS
AND RISK MANAGEMENT – FISCAL YEAR ENDED DECEMBER 31, 2012
INTERNAL CONTROL PROCEDURES
4.3. INTERNAL CONTROL PROCEDURES
Vivendi strives to maintain the highest standards of internal control
and financial disclosure. To this end, the Financial Information and
Communication Procedures Committee meets on a regular basis. In 2012,
this committee met six times.
This committee assists the Chairman of the Management Board and
the Chief Financial Officer to ensure that Vivendi fully complies with
its obligations to disclose information to investors, the public, and the
regulatory and market authorities in France. It is chaired by the General
Counsel and is comprised of representatives from the company’s corporate
operational departments.
The information that Vivendi is obliged to disclosed, and within the
committee’s scope of work, includes periodic documents disclosed to
investors and financial markets in compliance with French financial market
regulations, press releases related to the quarterly, semi-annual and
annual financial results and presentation materials provided to investors
and financial analysts.
A Risks Committee chaired by the Chairman of the Management Board is
responsible for strengthening management and risk prevention measures
within the Group. In 2012, the committee met three times.
The functions and activities of these two committees in 2012 are set forth
in Sections 3.6 and 3.7 of Chapter 3 of this Annual Report.
4.3.1. Definition and Objectives of Internal Control
The company views internal control as a set of procedures established by
Vivendi’s Management Board and implemented by its employees to ensure
that the following objectives are achieved:
✱ compliance with laws and regulations as well as the Group’s corporate
values;
✱ implementation of guidelines and strategies established by the
Management Board;
✱ prevention and control of operational and financial risks as well as
managing the risk of fraud and error;
✱ optimization of internal processes to ensure the effectiveness of
operations and the efficient use of resources; and
✱ completeness and accuracy of accounting and financial disclosure as
well as management information.
To achieve each of these objectives, Vivendi has set out and implemented
general principles of internal control based to a large degree on the
framework established by the report of the Committee of Sponsoring
Organizations of the Treadway Commission (COSO) published in 1992, the
reference framework of internal control process, and the recommendations
published by the French Autorité des Marchés Financiers (AMF).
These principles are based upon:
✱ a policy that contributes to the promotion of a culture of internal
control and integrity principles;
✱ the identification and analysis of risk factors that may adversely
impact the achievement of the Group’s objectives;
✱ a system to support the implementation of the goals set by the
Management Board;
✱ the periodic review of control measures and the continuing search for
areas of improvement; and
✱ the process of distributing information relating to internal control.
However, as with any system of control, these principles, when applied,
may not provide an absolute guarantee that all risks will be fully
eliminated or controlled.
4.3.2. Scope of Internal Control
Vivendi is organized into six business units (Activision Blizzard, Universal
Music Group, SFR, Maroc Telecom, GVT and Canal+ Group) and a holding
entity. Each of them must implement the strategies determined by the
Management Board, including objectives in the area of internal control.
Each entity has a set of tailored internal control measures that include
both the implementation of the Group’s procedures and the definition and
implementation of procedures specific to each business unit according
to its organization, culture, identified risk factors and operational
specificities. Vivendi ensures, as the parent company, that such internal
control measures exist and are adequate, in particular with respect to the
accounting and financial procedures applied by the entities of the Group
that are fully consolidated.
Activision Blizzard, a US company whose shares are listed on the
NASDAQ, complies with all applicable laws and regulations in the United
States and also has its own internal control system.