RISK FACTORS AND INTERNAL CONTROL holdings or commercial entities whose activities are A summary of financial performance is not related to the distribution of electrical equipment. communicated monthly to the members of the The countries are grouped by geographic regions. Board of Directors. The entities and regions each have their own general The yearly, half-year and quarterly financial management, operating management, and financial statements are presented to the Audit and Risk teams. Committee and approved by the Board of Directors. Each year, a three-year strategic plan, the first year of which is the budget, is established at the entity level 2.3.6.2 Shared guidelines and procedures for and approved by the entities and the related regions’ the approval of financial statements operating management, then subject to an open Rexel Group’s financial statements are prepared in review with Executive Management, the Financial accordance with IFRS as adopted by the European Control Department and Regions’ Management. The Union and are based on information provided by budget, consolidated at the Group level, is submitted the Financial Departments of the entities. The latter for approval to the Rexel Board of Directors after are responsible for ensuring that this information review by the Strategic Investment Committee. complies with the Rexel Group standards (especially This process al lows focusing the responsibility of accounting methods and accounts structure, the whole organization around the Rexel Group included in a Reporting Manual) and observance of objectives and applies to all of the entities included the detailed instructions issued by the Financial and in the Rexel Group scope of consolidation. Administrative Department. The periodic business reviews attended by This data is transmitted by the Financial members of the Executive Management, the Group Departments of the entities in a set format using a Financial Control Department, and the Management single consolidation tool that is used in preparing of the Regions provide insight into financial and monthly reports and external financial information economic changes with respect to activities, the at each stage of consolidation: monthly reporting, assessment of operational decisions to be taken, the budget, forecasting and strategic plan. This single analysis of gaps between targets and performance, format guarantees consistency between the the steering of the financial structure and the different data used for internal steering and external monitoring of the implementation of action plans. The Executive Management rel ies on monthly communication. reporting, comments on observed changes and The Rexel Group’s Financial and Administrative indicators of operational and financial performance. Department ensures the consistency of the inflow At the level of the entities, regions and the Rexel of information from entities before aggregating Group, teams of financial controllers are responsible the results and consolidation entries. It prepares for monitoring the achievement of targets and for detailed and documented analysis of such data, analysing accounting and financial information. explaining, in particular, changes in the scope of Three times a year, forecasts for the current year consol idation, exchange rate impacts and non- are prepared and compared with budget targets recurring operations. in order to implement the necessary corrective As mentioned in paragraph 2.3.3 “Control activities” actions. These forecasts include the usual items of this Registration document, internal controls for the monitoring of the financial structure and of relating to accounting and financial information are the Rexel Group activity, including the forecasting part of the general internal control system. of key ratios defined in the financing agreements (“covenants”). REXEL 2017 – REGISTRATION DOCUMENT 52