APC 2005 Annual Report Download - page 47

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Account closing
and verification process
a) Consolidating data from operating units
The reporting units produce monthly income state-
ments, which are used to determine the Group's
monthly operating profit.
The consolidated financial statements are produced
16 working days after the annual or half-yearly period-
end. To meet this deadline, all of the subsidiaries per-
form a hard close at May 31 and November 30 of each
year and the majority of consolidation adjustments for
the period are also calculated at these dates.
The majority of subsidiaries are consolidated at Group
level; however, the Square D, Crouzet Automatismes
and MGE-UPS subgroups submit consolidated report-
ing packages.
b) Role of the Corporate Management Control
and Accounting Department
The Corporate Management Control and Accounting
Department includes a reporting team that is respon-
sible for producing and distributing reporting packages
throughout the Group and a performance analysis
department that tracks the level to which the operating
units have achieved their targets.
The list of entities to be consolidated or accounted for
by the equity method is drawn up by the Corporate
Management Control and Accounting Department,
which then uses this list to determine with the Legal
Affairs unit the consolidation method to be applied to
each subsidiary, as well as the percentage of the sub-
sidiary's capital and voting rights held by the Group.
The department issues instructions for the closing
process, including the timetable, required data and
any necessary adjustments.
It checks the quality of the reporting packages submit-
ted by the subsidiaries, focusing primarily on intercom-
pany eliminations, the accounting treatment of non-
recurring transactions for the period, and movements
between the opening and closing balance sheet used
to prepare the statement of cash flows.
The department also checks the results of pro-
grammed procedures, including conversions, inter-
company eliminations, transfers to minority interests
and recognition of the effects of changes in scope of
consolidation.
At the same time, the Group's consolidated financial
statements are analyzed in detail, to understand and
check the main contributions by subsidiaries, as well
as the substance of transactions reflected in the
accounts. The key control points concern the prepara-
tion and validation of the statement of changes in
shareholders' equity and the statement of cash flows.
Lastly, the Corporate Management Control and
Accounting Department analyzes consolidated data
and the contribution of each Group unit.
The Corporate Management Control and Accounting
Department is responsible for providing assurance
concerning:
The proper application of Group accounting princi-
ples and policies.
The integrity of the consolidation system database,
which the unit is responsible for administering and
maintaining.
The quality of accounting processes and data.
Training for finance staff in the form of specific sem-
inars.
The department drafts and updates the financial
reporting procedures and guidelines required to pro-
duce high quality information. These procedures and
guidelines are available for consultation by all employ-
ees concerned on the Group intranet. They include:
A glossary of accounting terms used in the reporting
package, including a definition of each term.
A Group statutory and management accounting
standards manual, which includes details of debit/
credit pairings in the consolidation system.
A Group reporting procedures manual.
A manual describing the procedures to be followed
to integrate newly-acquired businesses in the Group
reporting process.
An intercompany reconciliation procedure manual.
Account closing instructions.
Corporate Governance