Internal control and Information on risks

Internal control

The internal control system in place in our group is designed to ensure that employees comply with prevailing laws and regulations as well as with the standards and principles of our group so as to avoid any risk of error or fraud.

Within the parent company

Thermador Groupe defines and implements the group’s development strategy and co-ordinates its different business activities.

Thermador Groupe defines and monitors the proper implementation of consistent rules on accounting, legal, fiscal and IT issues.

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The group’s longstanding subsidiaries use the same computer system (ACE provided by the company AUREA). Mecafer and Domac use Navision by Microsoft, Sodeco Valves uses AX by Microsoft, FGinox uses Gold by BG Partners and Sanidom/Rousseau XA Essentials by INFOR. In a quest for greater efficiency we will probably choose a single ERP for the companies of the group, which buy and sell products between them.

Thermador Groupe owns all or practically all the capital of its subsidiaries, and is present (as are its top executives) on the Boards of the various subsidiaries.

Our consolidated accounts are prepared internally. This is made easier by the simplicity of our legal structure, having a single chart of accounts and isolated movements within the group, and common principles for the statement of accounts.

For the subsidiaries, the key areas are to do with sales, purchasing and margin controls

Each subsidiary has a general management team, an administrative department, a sales department and a purchasing department: each is autonomous in the definition and implementation of its strategy in line with the regulations defined within the group. Only the Chairman & CEO and the administrative manager are signatories.

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Cross-departmental meetings involving those performing the same roles in the different subsidiaries allow a pooling of experiences and validation of proper implementation of procedures.

Frequent complete or rotating physical inventories means that discrepancies can be detected and the efficiency of procedures checked.

The subsidiary management teams communicate the following data to the group’s management on a monthly basis: cash forecasts, customer receivable aged trial balance, stock levels, matching up of figures for the statistical margin and the accounting gross margin, their balance sheet and pre-tax P&L statement: a comparison against budgets and previous year’s figures for month-by-month analyses.

Earnings policy

Although working to a common model, each subsidiary director is directly responsible for salary levels.

• A fixed part over 13 months,

• And a variable part which depends upon each subsidiary’s results and individual performance. On average, this variable part currently represents 19% of annual salary.

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Jetly and Sferaco also set up a profit-sharing agreement when they went past the 50-employee mark. The FGinox employees also benefit from a profit sharing scheme.

The companies purchased in 2017 kept their existing earnings policy. Convergence studies will be led during 2018 and 2019, respecting earnings packages already in place.

Anticorruption measures

In compliance with the Sapin 2 law, in 2017 we opened two mailboxes for any whistle-blowers wishing to contribute, in French or in Dutch.

We named two ethics officers to answer employees’ questions and ensure that the general mechanism is rolled out efficiently, respecting the confidentiality of the information gathered.

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We also appointed three members to the ethics committee, responsible for processing alerts whilst protecting the confidentiality of the parties concerned, and adopted the ‘Middlenext’ group conduct code, now available on the Thermador Groupe website, as well as the United Nations anti-corruption convention that addresses this subject.

In 2019, we will be mapping our risks and we will set up a formalised anti-corruption system, which will be compliant with what is required for companies employing more than 500 people.

Assessment of internal controls

The procedures described above, approved by the Board on February 19, 2019, have proved efficient thus far.

Information on risks