2010 REGISTRATION DOCUMENT (3.4 Mo) - Groupe Casino

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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
CORPORATE GOVERNANCEChairman’s Report5Group Accounting and Group Financial Control have producedand circulated a Financial Reporting Guide designed to ensure thatinformation reported is reliable and consistent throughout the Group.This guide describes Group accounting policies, consolidationprinciples, and consolidation adjustments and entries, as well asmanagement accounting principles and the accounting treatmentof complex transactions. All users of the Group’s financial reportingsystem have received a copy of the guide.In addition, a compliance watchdog unit has been set up to assessand anticipate changes in accounting regulations that may impactthe Group’s accounting standards, particularly IFRSs. Any regulatorydevelopments that have an impact on the Group’s accountingprocedures are explained in memos. Similar arrangements are in placefor tax matters. Each business unit, together with the Group Taxationdepartment for French units, monitors tax regulations to identify anydevelopments that could affect the Group’s taxable results. All relevantinformation is sent to employees responsible for their application.• ToolsThe Group’s information systems are described in section 5.3.2 ofthis report.Each business unit has a team responsible for ensuring that localinformation systems used for financial reporting conform to localregulations and accounting standards.IFRS-compliant accounting and financial data, adjusted to complywith Group standards, are reported by the business units through asingle consolidation and financial reporting software package. TheGroup’s reporting system has a dedicated administration unit.Financial reporting process• Identifi cation of risks affectingthe fi nancial reporting processThe Management of each business unit is responsible for identifyingrisks affecting the financial reporting process. Duties in the upstreamaccounting production process are segregated to prevent fraud andaccounting and financial regularities. Control activities appropriate tothe level of risk are implemented.In early 2011, a weakness in the process for recording benefitsnegotiated with suppliers was identified in a subsidiary that accountsfor less than 1.5% of Group revenue.The Group has already implemented an action plan to remedy theinitial irregularities identified and the accounting consequences wererecognised in the 2010 financial statements.Additional investigations are currently ongoing to identify the actionsrequired to improve the subsidiary’s internal control system.• Control activities aimed at ensuringthe reliability of published accountingand fi nancial informationPreparation and consolidation of financial and accountinginformationThe accounting production processes are organised with a view toproviding high quality, reliable published accounting and financialinformation. Against a background of shorter deadlines, the accountsare now closed on an intermediate basis to preserve informationreliability.Most consolidation adjustments are made by the business units.Group Accounting and Group Financial Control arrange training for thebusiness units in how to use the reporting system and the FinancialReporting Guide, to guarantee high quality data and reliable financialand accounting information.The system checks data consistency through automatic controls andthrough double checking of both local and consolidated data.Group Accounting monitors and checks changes in percentageownership of subsidiaries and associates. It is responsible for applyingthe appropriate consolidation treatment (scope of consolidation,change of consolidation method, etc.).As required by law, Casino, Guichard-Perrachon has two StatutoryAuditors, appointed in 2010. Their network of local audit firms may alsobe involved in auditing accounting information, including consolidationadjustments, produced by various Group subsidiaries. Their dutiesinclude verifying that the annual financial statements are prepared inaccordance with generally accepted accounting principles and givea true and fair view of the Group’s results of operations for the yearand its financial position and net assets at the year-end.The Group Accounting department acts as the interface withthe external auditors of the Group’s various entities. The Group’sStatutory Auditors are appointed through a competitive tenderprocedure arranged and overseen by the Audit Committee in linewith the recommendations made in the AFEP-MEDEF corporategovernance code.Management of external financial informationThe Investor Relations department is in charge of communicatingfinancial information to the financial community (analysts, investors,etc.).Financial information is validated by the Financial Control departmentprior to release.The Board of Directors is also presented with information concerningthe publication of results or acquisitions and mergers, and may makecomments and proposals. Financial news releases are, in addition,submitted to the Statutory Auditors for comment prior to issue.Financial information is disclosed to the markets through the followingcommunication channels:■■■■■■■media releases;conference calls for quarterly releases of sales figures;annual and interim results presentations;presentations to financial analysts and investors, including roadshows organised in France and abroad;Annual General Meetings;annual reports, business reviews and sustainable developmentreports;the Group’s corporate website.Group Investor Relations is also involved in monitoring financialinformation drawn up by listed majority-controlled subsidiaries andensures consistency between the various communication mediaused by the Group.ConclusionThe Casino Group takes a continuous progress approach to its riskmanagement and internal control system to promote the systematicspread of best internal control practices.The Group’s objective is to pursue and extend the implementationof adequate processes to further enrich the existing systems. Thediversity of the Group’s business operations and geographical scopedemands ongoing monitoring of risk management and internal controlprocesses to encourage even greater standardisation.Registration Document 2010 | Casino Group191
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Registration Document2010
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KEEPING AHEADIN A CHANGING WORLDCas
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1PRESENTATION OFTHE CASINO GROUP1.1
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PRESENTATION OF THE CASINO GROUPBus
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SCCR/SS/GE/13/3 Prov.page 945. The
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PRESENTATION OF THE CASINO GROUPRea
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2MANAGEMENTREPORTAT 31 DECEMBER 201
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31 DECEMBER 2010Business Review22.1
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2010 REGISTRATION DOCUMENT (3.4 Mo) - Groupe Casino

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