167
Annual Report -
2013
-
Vivendi
3
Information About The Company | Corporate Governance |
Reports
4.5.
Key procedures for financial and accounting information
The procedures listed below help to reinforce internal controls
concerning the treatment of financial and accounting information
disclosed by Vivendi. The provisions of the guide on applying internal
control procedures in relation to financial disclosures, contained in
the internal control standards published by the AMF, were taken into
account when updating these procedures.
Consolidation and Financial Reports:
the Group’s Consolidated Financial
Statements and its financial reporting were prepared in accordance with
international accounting standards (IFRS) and are based on accounting
data prepared by the management for each business unit. The IFRS
standards and IFRS Interpretations Committee (IFRIC) interpretations
used are those adopted by the European. The main topics addressed
in the Financial Report must comply with specific requirements, which
include, in particular, an impairment test on assets held by the Company
during the 4
th
quarter of each fiscal year, an assessment of liquidity risk,
valuation of employee benefits, duties and taxes (see below) and off
balance sheet commitments. The Consolidated Financial Statements
are closed and approved by the Management Board quarterly and are
reviewed by the Audit Committee. The annual and half yearly financial
statements are reviewed by the Supervisory Board, in reliance on the
observations of the Audit Committee. The Group’s financial statements
are published quarterly. They are subject to an annual audit and limited
semi-annual reviews by the Group’s Statutory Auditors.
Budget and management control:
every year, each business unit
presents its strategy and annual budget for the following year to the
Group’s Senior Management. After approval by Vivendi’s Management
Board, a summary is then presented to the Supervisory Board.
Quantitative and qualitative targets used as a basis to assess annual
performance are then set for each business unit’s management. Budgets
are reviewed each month and updated three times per year.
Investments/divestments:
any investments or divestments exceeding
€15 million must receive prior approval from the Investment Committee
chaired by the Chairman of the Management Board. This procedure
applies to all transactions, including the acquisition of equity interests
and the launch of new businesses, whatever the amount, and to any
other financial commitment, including, among others, the purchase of
rights and property contracts, that was not provided for in the annual
budget. The Investment Committee meets as often as necessary.
The analysis of documents and preparation of reports is done by the
Disposals and Acquisitions department at the Company headquarters.
Any transaction involving amounts greater than €100 million and
€300 million must receive the prior approval of the Management Board
and the Supervisory Board, respectively, pursuant to their Internal
Regulations.
Monitoring of investment transactions:
in connection with the
regular follow-up of value creation, Vivendi’s Management Board has
strengthened the process of post-completion analysis of investment
transactions, supplementing the existing budgetary reviews and
quarterly financial reporting. This analysis aims to validate the
implementation of controls as well as actual financial performance
pursuant to the business plan approved for the acquisition. It takes into
account both the progressive integration of companies acquired by the
business units and the impact of changing market conditions following
the acquisition date. Vivendi’s Internal Audit department reviews the
conclusions, which are then presented to Vivendi’s Senior Management
and, if there are any major issues, to the Management Board. An annual
summary is presented to Vivendi’s Audit Committee.
Monitoring of financial commitments:
as part of the financial reporting
process, the business units compile a list of commitments given and
received on a quarterly basis. These commitments are presented by the
legal and finance officers of the business units at meetings held with
Vivendi’s Group Management, which take place as part of the closing
process for the annual financial statements. They are also presented to
the Audit Committee once per year.
Sureties, endorsements and guarantees:
pursuant to the provisions of
the Company’s by-laws and the Internal Regulations of the Supervisory
Board, the granting of sureties, endorsements and guarantees by
Vivendi to its subsidiaries is subject to prior approval in accordance with
the following dual limitations:
any commitment under €100 million where the aggregate amount
of commitments is under €1 billion is subject to the approval of the
Management Board, which may delegate such power. The approval
requires the signatures of both the Chief Financial Officer and the
General Counsel; and
any commitment over €100 million and any commitment, regardless
of the amount, where the cumulative amount of commitments is
over €1 billion are subject to the approval of the Supervisory Board.
The approval requires the Chairman of the Management Board’s
signature.
Treasury, financing and liquidity:
the management of cash flows and
hedging transactions (foreign exchange and interest rates) is centralized
at the headquarters of Vivendi SA. SFR manages its treasury function
itself, under the supervision of Vivendi SA. GVT and Maroc Telecom’s
treasury functions are managed independently and are tailored to the
Group’s policies and procedures. The liquidity position at the business
unit level, as well as exposure to foreign exchange and interest rate
risks, are monitored on a bi-monthly basis by a Treasury Committee.
The majority of medium- and long-term financing activities occur at
the head office and such activities are subject to the prior approval of
the Management Board and Supervisory Board, in accordance with the
provisions of their Internal Regulations. However, financing deals that
are part of the management of the Company’s debt, when they are being
optimized within the ceilings already authorized by the Supervisory
Board, only require a notification to the Board. A financial management
presentation is made to the Audit Committee once a year.
Duties and taxes:
Vivendi SA’s Tax Department also provides advice
to the Group’s subsidiaries and is responsible for the defense of their
tax audits by local tax authorities, with the exception of the companies
within the GVT business unit in which case it participates in the review
and auditing of duties and taxes as part of the preparation of the Vivendi
Group’s Consolidated Financial Statements.
Litigation:
major disputes are monitored directly or coordinated by the
Group’s General Counsel. A report relating to litigation involving Vivendi
and its business units is prepared by the legal department of the Group
in collaboration with the general counsels and heads of the legal
departments of the main business units. A summary litigation report
is provided to the Management Board on a monthly basis. A table of
current litigation and disputes is updated for each quarterly closing date
based on information provided by each business unit; a summary of this
table is included in the Management Board’s quarterly business report
to the Supervisory Board. The Audit Committee, Supervisory Board and
Management Board are kept informed of material on-going litigation
matters by the General Counsel at all times.
