Vilmorin & Cie - Annual report 2017-2018

3 Management REPORT Report of the Board of Directors to the Joint Annual General Meeting (Ordinary and Extraordinary) of December 7, 2018 ANNUAL REPORT Vilmorin & Cie 94 2017-2018 A continuous progress approach The reference framework For Vilmorin & Cie’s major risks, the control measures set out in the risk sheets are converted into group guidelines that must be respected at all group sites worldwide; these rules are minimum standards for each risk domain and thus constitute a Group reference framework. Audits In order to check that all the standards defined above are applied efficiently, audit campaigns have been, and will be conducted per risk domain; these involve either field audits or self-assessments. Audit reports and their summaries analyze any non-conformities, measure gaps, and include proposals for improvement. Reporting The audit results are examined in conjunction with the operational managers in order to analyze the causes of the non-conformities and, wherever possible, to adopt measures to eliminate them, or at least improve the situation. Furthermore, feedback from these experiences, together with the audit results, are used to develop and improve preventive measures, thus reducing risk criticality and the number of non-conformities, and ultimately raising the standards. Other rules will be progressively added to enrich the reference framework. Accordingly, this approach can be seen as a tool for permanent progress and continuous improvement. Procedures concerning the production of financial and accounting information Vilmorin & Cie’s consolidated financial statements are set out in accordance with the international accounting standards (IFRS standards) published by the International Accounting Standards Board (IASB) and with the interpretations of the IFRS published by the International Financial Reporting Interpretations Committee (IFRIC) of the IASB, as applied by the European Union on June 30, 2018. The scope of application for internal control concerning the production and processing of financial and accounting information includes the parent company and all the subsidiaries integrated 100% in the consolidated financial statements. Financial organization The production of financial and accounting information comes within an overall process that involves several phases: The mid-term plan A mid-term plan is the working reference that describes the main strategic orientations, and is set out in each Business Unit in conjunction with the management of its division. Every year it is updated and confirmed by the Board of Directors and the Executive Committee at the level of Vilmorin & Cie, and consolidated in accordance with a formal process. The short-term financial budget A short-term financial budget with detailed operations is set out every year by each Business Unit during the first semester. It is also validated by Vilmorin & Cie and consolidated in accordance with a formal process. This budget is updated as a forecast at least once over the course of the fiscal year. Monthly reporting Each company produces monthly performance indicators adapted to its business activity. These are compared to the budget, and any differences are analyzed to detect any significant discrepancies. Data from reporting is also compared to the general accounts. Such monitoring generally concerns business (sales and commercial margins) and results, evolution of the headcount, cash flow and funding, and the investment plan. The main indicators of this reporting are also consolidated every month in accordance with a formalized process. Detailed, non-audited quarterly financial statements complete this organization.