Vilmorin & Cie - Annual report 2017-2018

PRESENTATION of Vilmorin & Cie 1 ANNUAL REPORT Vilmorin & Cie 60 2017-2018 During the fiscal year, Vilmorin & Cie formalized a commitment framework aimed at limiting the environmental impact of its facilities. Based on compliance with the standards and legislation in force in all the countries where the group operates, this environmental program sets out an action plan and quantified objectives for four key environmental areas: energy and greenhouse gases, water, biodiversity and waste. Resulting from collaborative work carried out on the occasion of several CSR Committees bringing together the Group’s Business Units and Corporate departments (risk management, legal, HR, etc.), these pragmatic and realistic commitments reflect Vilmorin & Cie's desire to operate with a better knowledge and efficiency in terms of environmental impact. The program is described in detail on page 121. Vilmorin & Cie continually strives to strengthen its social, societal and environmental commitment, and to improve the management of its activities over the entire product life cycle. The actions implemented and achievements made in 2017-2018 are described in Chapter 4. 1.7.3.10. Ethical risks Illegal and unethical practices in business management Identification of the risk The complexity of seed production and distribution channels, the multiplicity of public and private market players, Vilmorin & Cie's development strategy on all continents, all make it particularly critical that the group be vigilant in ensuring that its practices comply with ethical principles and anti-corruption laws. Managing the risk During fiscal year 2017-2018, a compliance project relating to the requirements of the Sapin II law in France was run. It enabled the establishment of specific mapping of corruption risks, but also the launch of an update of the guidelines, the Code of Conduct and appropriate training, already in place at Vilmorin & Cie. The project also made it possible to initiate the other tools required by the Sapin II law, such as the disclosure system, third-party evaluation and accounting control measures, which will be deployed during the coming fiscal year. Vilmorin & Cie has also set up a disclosure management Committee involving Human Resources (HR), Governance, Risk, and Compliance (G.R.C.) and CSR functions, in order to examine and process all internal and external disclosures concerning business ethics. Corruption or malpractice of an employee at the expense of the company's interests Identification of the risk Like any company granting a high level of delegation, Vilmorin & Cie, with operational units as close as possible to the markets, is exposed to the risk of corruption or employee malpractice. Managing the risk In 2013, Vilmorin & Cie adopted a Code of Conduct deployed worldwide. Employees are thus well informed about the company's rules of ethics, the principles of segregation of duties and internal control. Occurring very rarely, acts of internal fraud at the expense of the company are dealt with both with regard to the perpetrator and by improving internal control processes. 1.7.4. Financial risks 1.7.4.1. Deterioration of the working capital needs Identification of the risk As previously explained in 1.7.3.2., Vilmorin & Cie is liable to be impacted in its procurement, particularly by climate hazards and the evolution of agricultural markets. If there is an unanticipated deterioration of the different components of its working capital needs, including inventory management, Vilmorin & Cie might see an erosion of its financial ratios and economic performance. Managing the risk The measures implemented to limit risks related to procurement have been described above (cf. paragraph 1.7.3.2.). Efficient management of the quantities and quality of seed inventories is also a key aspect in Vilmorin & Cie’s strategy. With regard to its customer portfolio, Vilmorin & Cie is not globally confronted with excessive concentration of its customers that might lead to a sudden drop in business. 1.7. Risk factors