2010 REGISTRATION DOCUMENT (3.4 Mo) - Groupe Casino

5CORPORATE GOVERNANCEChairman’s Report• Ongoing monitoring of internal controlMonitoring of internal control is carried out at several levels under thesupervision of Senior Management. Senior Management is informedregularly of any deficiencies in the internal control system and itsappropriateness for the Group’s business operations, and takes anynecessary remedial action.Monitoring by ManagementManagement plays an ongoing role in monitoring the effectivenessof internal control procedures. It is responsible for implementingremedial action plans and reporting any serious deficiencies to SeniorManagement.Assessment by Internal AuditGroup Internal Audit and the business unit internal audit departmentsregularly review the effectiveness of the internal control systemthrough their internal control assessment work. Group Internal Audit isresponsible for assisting Senior Management and the various Frenchand international business units in exercising their responsibilities. Italso provides information or responses to all requests made by theAudit Committee of parent company Casino, Guichard-Perrachon.The subsidiaries’ internal audit teams report to their SeniorManagement or Administration and Finance department, but alsohave a functional reporting line to Group Internal Audit and GroupInternal Control. Group Internal Audit therefore has a central internalaudit team supported through the functional reporting line by localinternal audit teams in France and abroad, comprising a total of almostone hundred and ten people.Internal audit assignments conducted by the central team are setout in an annual audit plan prepared by Group Internal Audit basedon the Group’s risk map, the principle of audit cycles and any majorissues identified by Senior Management. Business unit internal auditdepartments draw up their own annual audit plans, which are approvedby their senior management and, where applicable, reviewed by theirown Audit Committee.The Group Internal Audit charter, approved by the Audit Committee ofparent company Casino, Guichard-Perrachon, describes the Group’sinternal audit function and how it operates. It was updated in 2010 totake account of the various changes in professional standards, lawsand regulations since the previous update. It is supplemented by formalguidelines for conducting audit assignments, which are based on theprofessional standards of the Institute of Internal Auditors (IIA).All Internal Audit reports are sent to Group Senior Management and theAudit Committee of parent company Casino, Guichard-Perrachon, inaccordance with the provisions set out in the Internal Audit charter.Monitoring by external auditorsThe Statutory Auditors are required to obtain an understanding of theorganisation and operation of the Group’s internal control procedures,to give their opinion on the description of the internal control andrisk management system for the financial reporting process, andto certify that other information required by article L. 225-37 of theFrench Commercial Code (Code de commerce) has been provided.This Chairman’s report on internal control and risk management hastherefore been reviewed by the Statutory Auditors.In addition, the Statutory Auditors are required to have regulardiscussions with Group Internal Audit and Control.Internal control intelligenceGroup Internal Audit and Control is responsible for keeping abreast ofbest internal control practices developed by Groupe Casino businessunits and best practices in the marketplace.Internal control over the financial reportingprocessInternal control over the financial reporting process aims to providereasonable assurance regarding:■■■■■■compliance of published accounting and financial information withthe applicable regulations;compliance with Senior Management instructions and guidanceon financial reporting;reliability of information circulated and used internally for managementor control purposes, where it is used in the preparation of publishedaccounting and financial information;reliability of published financial statements and other publishedinformation;safeguard of assets;prevention and detection of fraud and accounting and financialirregularities.The scope of internal control over the financial reporting processdescribed below covers the parent Company and all companiesincluded in its consolidated financial statements.Monitoring the f inancial reporting processAspects relating to the management of accounting and financial humanresources and the roles of Senior Management and the Board ofDirectors in monitoring and overseeing the financial reporting processare described in sections 5.3.2 and 2 of the annual report.• General organisationEach business unit has its own accounting and finance department toensure that local requirements and obligations are properly handled.Some business units may outsource these activities to sharedsupport functions. Each business unit is responsible for organisingits accounting and finance function in accordance with the principleof segregation of duties.Group Accounting, Financial Control and Corporate Finance monitorand oversee the local departments. They also consolidate datareported by the business units and produce the accounting andfinancial information published by Groupe Casino.The Audit Committee reviews the annual and interim accounts inorder to give an opinion to the Board of Directors on the financialstatements to be published. It also reviews the conclusions of theStatutory Auditors on their work.For this purpose, it obtains information on and monitors the processfor preparing the related accounting and financial information,ensuring that:■■■appropriate control procedures have been applied, through itsreview of internal audit work;the accounts closing process has been properly carried out;the main accounting options chosen are appropriate.• Application and control of accounting policiesThe system aims to ensure that local accounting standards usedcomply with regulations and that they are available to everyoneinvolved in the financial reporting process.As part of the consolidation process, each business unit sends itsIFRS-compliant accounts to Group Accounting and Group FinancialControl, including an income statement, balance sheet, cashflow statement, net cash statement and various key performanceindicators.190 Casino Group | Registration Document 2010