2.1.1. Legal and Regulatory Compliance The company’s internal control procedures are designed to provide assurance that the operations carried out in all Group companies comply with the laws and regulations in force in each of the countries concerned for the different areas in question (e.g. corporate, customs, labor and tax laws, etc.). 2.1.2. Oversight of Proper Application of General Management Instructions A series of procedures has been put in place to deﬁne the scope and the limits to the powers of action and decision of Group employees at all levels of responsibility. In particular these serve to ensure that the business of the Group is conducted in accordance with the policies and ethical rules laid down by General Management. 2.1.3. Protection of Assets and Optimizing Financial Performance The purpose of the processes in place and procedures to control their application is to optimize the ﬁnancial performance consistently with the company’s short-and medium-term ﬁnancial goals. Internal control procedures contribute to the safeguarding of Group ﬁxed and intangible assets (such as intellectual property, company brands, customer relationships and corporate image, computer data), as well as the Group human capital, all of which play a key role in its property, business activity and growth dynamism. 2.1.4. Reliable Financial Information Among the control mechanisms in place, special emphasis is placed on procedures for preparing and processing accounting and ﬁnancial information. Their aim is to generate reliable, high-quality information that presents a fair view of the company’s operations and ﬁnancial condition. In addition, these procedures are designed to produce timely quarterly and annual ﬁnancial statements, ready for publication thirty days after the close of each quarter at the latest, and a maximum of forty-ﬁve days after ﬁscal year end. 2.1.5. Risk Management The risk management procedures, to which the internal control system contributes, follow objectives that are common or speciﬁc to internal control procedures.
It aims in particular at: – creating and preserving values, assets and the company’s reputation; – securing the decision-making processes and reaching goals; – ensuring coherence between the company’s core values and its actions; – mobilizing employees involved in the management of risks linked to their activity and responsibilities, by sharing the appraisal of the main risk factors. Lectra’s internal control system is designed to reach the speciﬁc risk management objectives. It covers all Group companies, taking into account their diversity in terms of size and the challenges of the different subsidiaries and the parent company. Similarly, the cost of implementing the system’s performance target for covered risks versus residual risks is compatible with the Group’s resources, its size and the complexity of its organization. While this system provides reasonable assurance of fulﬁllment of the aforesaid objectives, it can provide no absolute guarantee of doing so. Many factors independent of the system’s quality, in particular human factors or those attributable to the outside environment in which the Group companies operate, could impair its effectiveness.
2.2. Components of Internal Control
2.2.1. Organization, Decision-Making Process, Information Systems and Procedures (a) Organization and Decision-Making Process As indicated in chapter 1, the Board of Directors is responsible for setting the company’s strategy and direction for the company’s operations, and for overseeing their implementation. The Chairman of the Board is responsible for overseeing the proper functioning of the company’s managing bodies. The Audit Committee discusses the internal control system at least once a year with the Group Statutory Auditors. It gathers their recommendations and, notably, ensures that their level and quality of coverage are adequate. It reports on its proceedings and opinions to the Board of Directors.