Airbus 2015 Annual Report Download - page 159

AIRBUS GROUP REGISTRATION DOCUMENT 2015 l 127 l
Corporate Governance
Registration Document 2015
4.
4.1 Management and Control
monitoring these procedures. Among the Chief Financial
Officer’s primary tasks is oversight of the preparation of
the Consolidated Financial Statements of AirbusGroupSE,
which are prepared under the direct supervision of the Chief
Accounting Officer (“CAO”). The CAO is responsible for the
operation of the Group’s consolidation systems and rules and
for the definition of group-wide accounting policies which
comply withIFRS, reporting rules and financial guidelines
in order to ensure the consistency and quality of financial
information reported by the Divisions and Business Units.
The Company’s accounting policies are set out in a written
accounting manual, which is agreed with the Company’s
external auditors. Changes to the Company’s accounting
manual require approval by the CAO, and, where significant
changes are involved, the Chief Financial Officer or the Board
of Directors (based upon the advice of the Audit Committee).
Control of the financial planning and reporting processes is
achieved not only through the development of group-wide
accounting systems and policies, but also through an organised
process for providing information from the reporting units on a
timely basis as an up-to-date decision-making tool to control
the operational performance of the Group. This information
includes regular cash and treasury reports, as well as other
financial information used for future strategic and operative
planning and control and supervision of economic risks arising
from the Group’s operations. The Divisional Chief Financial
Officers frequently meet with the CAO and his responsible staff
to discuss the financial information generated by the Divisions.
Prior to being disclosed to the public and subsequently
submitted for approval to the shareholders, the consolidated
year-end financial statements are audited by the Company’s
external auditors, reviewed by the Audit Committee and
submitted for approval by the Board of Directors. A similar
procedure is used for the semi-annual and quarterly closing.
Group auditors are involved before the Company’s financial
statements are submitted to the Board of Directors.
Treasury
Treasury management procedures, defined by the Company’s
Central Treasury department at Group headquarters, enhance
management’s ability to identify and assess risks relating to
liquidity, foreign exchange rates and interest rates. Controlled
subsidiaries fall within the scope of the centralised treasury
management procedures, with similar monitoring procedures
existing for jointly controlled affiliates, such as MBDA.
Cash management. The management of liquidity to support
operations is one of the primary missions of the Company’s
Central Treasury department. Regular cash planning, in
conjunction with the Planning/ Reporting department, as well
as monthly cash reporting by the Central Treasury department,
provide management with the information required to oversee
the Group’s cash profile and to initiate necessary corrective
action in order to ensure overall liquidity. To maintain targeted
liquidity levels and to safeguard cash, the Company has
implemented a cash pooling system with daily cash sweeps
from the controlled subsidiaries to centrally managed accounts.
Payment fraud prevention procedures have been defined and
communicated throughout the Group. For management of
credit risks related to financial instruments, please refer to the
“—Notes to the IFRS Consolidated Financial Statements —
Note35.1: Information about financial instruments — Financial
risk management”.
Hedge management. Commercial operations generate
material foreign exchange and interest rate exposures. A
Group hedging policy is defined and updated regularly by
the Board of Directors. In order to ensure that all hedging
activity is undertaken in line with the Group hedging policy, the
Company’s Central Treasury department executes all hedging
transactions, unless such centralised hedging is not allowed
by local bank regulations. The Central Treasury department
conducts on-going risk analysis and proposes appropriate
measures to the Divisions and Business Units with respect to
foreign exchange and interest rate risk. Subsidiaries are required
to calculate, update and monitor their foreign exchange and
interest rate exposure with the Company’s Central Treasury
department on a monthly basis, in accordance with defined
treasury procedures. See “—Management’s Discussion and
Analysis of Financial Condition and Results of Operations —
2.1.7 Hedging Activities”.
Sales financing. In connection with certain commercial
contracts, the Company may agree to enter into sales financing
arrangements. In respect of sales financing at Airbus, an annual
sales financing budget is defined as part of the Company’s
operative planning process. Sales financing transactions are
approved on a case-by-case basis with the involvement of top
management, in line with certain risk assessment guidelines
and managed by a group-wide integrated organisation.
Sales
Commercial contracts entered into by the Company’s
operating subsidiaries have the potential to expose the Group
to significant financial, operational and legal risks. To control
these risks, management has implemented contract proposal
review procedures that seek to ensure that the Company does
not enter into material commercial contracts that expose it to
unacceptable risk or are not in line with the Group’s overall
objectives. These procedures include (i)Board of Directors-
approved thresholds and criteria for determining the risk and
profitability profiles and (ii)a mandated pre-approval process
for contracts defined as “high-risk”. Contracts falling within
the defined threshold categories require approval by the
respective Divisional Chief Financial Officer. Contracts that
are deemed “high-risk” and exceed certain thresholds must be
submitted to a standing Commercial Committee (with the Chief
Financial Statements 2015
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Annual Report 2015 Financial Statements 2015
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