Annual report 2014

Information about the Company | Corporate Governance |

Reports

The Company manages internal control through a set of procedures

established by Vivendi’s Management Board and implemented by its

employees to ensure that the following objectives are met:

compliance with laws and regulations as well as adherence to the

group’s corporate values;

the implementation of guidelines and strategies established by the

Management Board;

the prevention and monitoring of operational and financial risks as

well as the management of risk of error, fraud, and reputation;

the optimization of internal processes to ensure effectiveness of

operations and efficient use of resources; and

completeness and accuracy of accounting, financial and management

information.

To achieve each of these objectives, Vivendi has defined 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

and updated in 2013, as well as the reference framework of internal

monitoring processes and the recommendations of the French

Autorité

des marchés financiers

(AMF).

These principles are based upon:

a policy that contributes to promoting a culture of internal control and

principles of integrity;

identification and analysis of risk factors that may adversely impact

achievement of the group’s objectives;

the organization and establishment of procedures aimed at ensuring

the implementation of the goals set by the Management Board;

periodic review of control measures and an ongoing search for areas

of improvement; and

the process of channeling information relating to internal control.

However, as with any system of control, the application of these

principles cannot provide an absolute certainty that all risks will be

completely eliminated or controlled.

4.3.2.

Scope of Internal Control

(1)

Vivendi Village includes Digitick, See Tickets, Wengo and Watchever.

4.3.1.

Definition and Objectives of Internal Control

Vivendi is currently organized into three business units: the Canal+

group, the Universal Music Group and Vivendi Village

(1)

. Each of

these entities must implement the strategies set by the Management

Board, including objectives in the area of internal control. SFR and

GVT were classified as assets held for sale pursuant to IFRS 5 - Non-

current Assets Held for Sale and Discontinued Operations. The sale

of SFR was completed on November 27, 2014 and the sale of GVT is

ongoing. Each entity has a tailored set of internal control measures that

includes both the implementation of the group’s procedures and the

definition and implementation of procedures specific to each business

unit, depending on its organization, culture, risk factors and operational

requirements. Vivendi, as the parent company, ensures that such internal

control measures exist and adequately address the needs of each entity,

particularly with respect to the accounting and financial procedures

applied by group entities that are fully consolidated.

4.3.3.

Internal Control Components

■

4.3.3.1.

Control Environment

Rules of Conduct and Ethics Applicable to All Employees

Vivendi ensures that all aspects of corporate responsibility are taken into

account. Vivendi has therefore established a charter of the group’s values

that includes consumer focus, creativity, ethics, cultural diversity and

corporate and social responsibility. Vivendi is a signatory of the United

Nations Global Compact.

A Compliance Program also sets general rules of ethics applicable to

all group employees regardless of their seniority and position. These

rules, available on the Vivendi website at

www.vivendi.com, co

ver the

following areas: employees’ rights, integrity and protection of information

and personal data, prevention of conflicts of interest, commercial

and financial ethics, protection of the group’s assets and resources,

environmental respect and corporate social responsibility.

The Compliance Program has three major purposes:

to raise awareness among the group’s employees and provide them

with a reference tool and guidance for determining appropriate

courses of action;

to minimize to the greatest extent the risk of civil and criminal liability

for both the group’s employees and companies; and

to discuss in depth a cross-disciplinary theme each year. For

this purpose, over the past five years, the following topics have

been addressed: conflicts of interest, protection of personal data,

preservation of tangible and intangible data, anti-corruption measures

and the proper use of digital media within social networks. The 2014

report focuses on the progress made by subsidiaries in implementing

their procedures regarding fraud, corruption and conflicts of interest.

The Compliance Program establishes rules of conduct based on general

principles of international law, including those established by the OECD,

ILO and European Union law, as well as legislation in Europe and various

countries, principally those of France and countries with legal systems

based on common law. Following this approach, each operational

business unit has also established its own Code of Ethics.

The group’s General Counsel and Company Secretary and the Compliance

Officers of the principal business units work to ensure the overall

consistency of the program. An annual Activity Report is presented to the

Audit Committee, which then reports to the Supervisory Board.

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Annual Report 2014