Plastic Omnium - 2018 Registration Document

1 PRESENTATION OF PLASTIC OMNIUM AND ITS BUSINESSES Risk factors and control www.plasticomnium.com PLASTIC OMNIUM 2018 REGISTRATION DOCUMENT 36 Risk management With regard to product and process quality, the Group’s businesses have implemented dedicated organizations and reliable processes, widely used in industry for many years, especially in the automotive sector. Their robustness and effectiveness are systematically tested by ISO/TS 16949 certification procedures. These risks fall into the area of contractual liability and are covered by specific insurance policies. Intellectual property risk Identification of risk Compagnie Plastic Omnium is mainly exposed to a risk of misappropriation of know-how, as both a victim and an offender, which could give rise to disputes. Risk management Research and Innovation are major priorities for Compagnie Plastic Omnium. A structured approach of actively monitoring and investigating prior claims enables the Company to manage and protect its intellectual property rights. Extensive policies have been established in respect of patent filings for the innovations that result from Research and Development. Despite the measures taken, including research into prior claims, Compagnie Plastic Omnium cannot rule out the possibility of prior intellectual property claims and of the risks of litigation that might result. Competition risk Identification of risk Non-compliance with competition law regulations by one of its employees (in particular, an agreement with a competitor regarding the fixing of sales prices, sales conditions or the sharing of markets) could expose Compagnie Plastic Omnium to penalties that could be imposed by the competition authorities. Risk management Compagnie Plastic Omnium introduced a Code of Conduct in 2010 to ensure compliance with competition law, making sure that all employees who work in sales and purchasing were trained when it was introduced. Compagnie Plastic Omnium has since maintained its training efforts every year, with training sessions organized regularly in various geographical regions where the Group operates. All sales and purchasing employees have been invited every year since 2013 to participate in these e-learning sessions concerning the Group’s Code of Conduct. OTHER RISKS Tax risk The complex, international structure of Compagnie Plastic Omnium means comprehensive monitoring is needed to keep abreast of tax requirements, issues and risks. These risks concern in particular international transactions, in respect of which the tax administrations increasingly require more information, to which the Group intends to respond, or concerning knowledge of local constraints, to which the Group must adhere. Consequently, Compagnie Plastic Omnium has put into place a Tax Department, which works in close collaboration with the Accounting, Legal, and Finance Departments. Comprising three separate units in charge of tax affairs at entity, Division and Group level, it is supported by a network of tax experts at headquarters and in the main countries as well as by corporate and local advisors. The department ensures that subsidiaries fulfill their tax obligations in compliance with local laws and regulations and provides them with the support and expertise they need to carry out all recurring and non-recurring operations related to tax issues. A regular tax reporting system allows current and deferred taxes from all of the tax entities controlled by Compagnie Plastic Omnium to be monitored and managed, and helps to ensure that the consolidated financial statements are prepared rapidly and to a high standard. A transfer pricing documentation system ensures that transfer prices within Compagnie Plastic Omnium are effectively monitored and managed, and contributes to the quality of fiscal management and reducing potential risks in this field. These two information systems and management processes are supplemented by other country-specific tools and provide necessary information to users. This set of means and resources enables the corporate Tax Affairs Department to provide assurance to senior management that all tax obligations, issues and risks inherent in the complex international structure of an expanding business group are closely monitored. INSURANCE AND RISK COVERAGE Compagnie Plastic Omnium has put in place a global program of insurance benefiting all the subsidiaries in which it has a majority interest. This program is coupled with local coverage in all countries where the Company is located. The program is intended to cover the main risks that can affect its operations, results or assets and includes: property, casualty and business interruption insurance; ● operating and product liability insurance; ● environmental liability insurance; ● as well as insurance against specific risks such as shipping, travel, ● vehicles, etc. The levels of cover and the insured amounts are appropriate for the types of risk insured and take into account conditions in the insurance market.