Page 160 - 2012 Annual Report

160 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
RISK MONITORING AND MANAGEMENT
4.4. RISK MONITORING AND MANAGEMENT
Vivendi’s Risks Committee is in charge of identifying and managing risks
likely to affect the fulfillment of the Group’s objectives. It is chaired by
the Chairman of the Management Board and includes the following
permanent members: the Chief Financial Officer, the General Counsel
and the Internal Audit Director. The business units are invited to attend
meetings depending on the agenda. The committee provides its principal
conclusions and recommendations to the Audit Committee of the
Supervisory Board at each of its meetings.
The Risks Committee is responsible for making recommendations to the
Management Board in the following areas:
✱ the identification and assessment of risks that may arise from the
conduct of operations within the Vivendi Group, including risks
relating to tax, employment and environmental matters, risks in terms
of compliance with laws and regulations, risks relating to ethics,
competition and conflicts of interest and risks associated with the
security of information systems;
✱ the review of the adequacy of risk coverage and the level of residual
risk;
✱ the review of insurable risks and of insurance programs; and
✱ the list of risk factors and forward-looking statements as publicly
disclosed by the Group.
At Group level risks are assessed based on a qualitative and quantitative
approach at the level of each business unit.
In 2012, this committee met three times and, as of the date of this Annual
Report, once during the first quarter of 2013. The main topics addressed
were, in particular:
✱ the review of risk mapping;
✱ sub-contracting risk analysis and the revenue assurance program
at GVT;
✱ the risks and objectives related to regulatory matters at SFR, Canal+
Group, Maroc Telecom, Universal Music Group and GVT; and
✱ ensuring the safety of the Group’s businesses safety in relation to
cybercrime risks: protection of websites, service platforms, distribution
networks and IT systems at Universal Music Group, SFR and Canal+
Group.
The major risks faced by the company are described in Chapter 1 of this
Annual Report, in the risk factors section, and in Chapter 4, Note 23, to
the Consolidated Financial Statements relating to risk management and
financial derivative instruments.
Vivendi’s Legal department provides for the prevention and management
of risks related to ethics, competition and conflicts of interest. The
management of financial risks (liquidity, interest and exchange rates)
is monitored by Vivendi’s Finance and Treasury department through a
centralized organization at the corporate headquarters.
Operational risks are managed by the business units taking into account
the specificities of their operations (e.g., regulatory risks associated
with Telecommunication and Pay TV businesses, risks associated with
the infringement of intellectual property rights for the music business;
risks associated with piracy and counterfeiting for the film and music
businesses).
Coverage of insurable risks (damage and operating losses from a disaster,
third-party liabilities) is monitored by the Risk Management department of
Vivendi in collaboration with the Finance and Legal departments. Current
insurance programs are described in Chapter 1 of this Annual Report.
In 2012, all documentation presented to the Risks Committee was also
presented to the Statutory Auditors of the company. In addition, the
Statutory Auditors receive, at each meeting of the Audit Committee, a
report on the work performed by the Risks Committee.
4.4.1. Internal Control Activities
Control activities are primarily performed by the functional and operational
management teams in accordance with existing reference procedures.
The following bodies ensure the monitoring of internal control measures:
THE AUDIT COMMITTEE
The Audit Committee is comprised of a majority of independent members
of the Supervisory Board. Within the powers conferred upon it, the Audit
Committee prepares the decisions of the Supervisory Board and provides
recommendations or issues opinions to it on a wide range of matters,
including:
✱ the review of the annual and half-year consolidated financial reports
and the annual Consolidated Financial Statements of the company,
prepared by the Management Board;
✱ the review of impairment tests;
✱ the monitoring of the company’s cash and alerting the Board to
potential issues relating thereto;
✱ the review of the assessment and coverage of operational and
financial risks, and of insurance programs;
✱ the appointment of external auditors and fees to be paid to them;
✱ changes in accounting standards, methods and accounting principles,
the company’s consolidation scope, contingent liabilities of the
company;
✱ the monitoring of the consistency and effectiveness of internal control
measures, the review of this report;
✱ the review of tax-related risks;
✱ the review of material internal control weaknesses and, when
applicable, the review of corruption and fraud cases;
✱ the review of ethics compliance; and
✱ the review of the Annual Report on the Compliance Program, the
proposal of any measure likely to improve its effectiveness, and, if
necessary, the formulation of an opinion on its review.