RISK FACTORS 4 4.11 auditors during their annual reviews of half-year and annual INTERNAL CONTROL AND RISK MANAGEMENT consolidated financial statements. The findings of these tasks are PROCEDURES shared with the Company’s financial management, allowing it to take corrective measures and improve the Company’s internal As part of its listing on Euronext Paris, the Company has control. These findings are also shared with the Audit Committee. implemented an internal control policy and a certain number of procedures. Over time, the Company seeks to conform to AMF 4.11.2.1 Financial risk management recommendations for small and medium-sized companies with Accounting and financial information regard to internal control. The Company’s accounting is operated by both the financial The internal control procedures implemented by the Company department and an independent accounting firm using a dedicated are intended to: ERP system. • Ensure control over operations, employee behavior and optimal The recording of accounting items, preparation of accounting resource management, in accordance with the framework information, reporting and corporate reports and documentation defined by management, laws and applicable regulations; are provided internal ly, while the independent firm provides • Anticipate and control the risks inherent to the Company’s monthly controls, calculation of the research tax credit (CIR) and activities, whether operational, industrial or financial. tax returns. 4.11.1 GENERAL INTERNAL CONTROL The work is reviewed and analyzed within the Company’s finance ORGANIZATION department, which prepares quarterly management reports for operations. These reports enable management to assess current Internal control within the Company is handled, in fine, by the expenses, with respect to the budget and various quarterly Board of Directors, assisted by the audit and compensation forecasts, and to take corrective measures if needed. committees. The Company is managed operational ly by two internal committees, the executive committee and the As of the date of this Registration Document, the Company has management committee. implemented the following internal control procedures related to accounting and financial information, as well as the preparation of Executive committee consolidated financial statements: Upstream of the Board of Directors, and more operationally, an • The Company maintains, internally, a separation between the executive committee (ComEx) ensures compliance with current production and the control of financial operations, accounting procedures. This committee meets once a week, and consists of procedures and the preparation of consolidated financial the chief financial officer, chief medical officer and chief executive statements; officer, who chairs it. • All accounting procedures and operations are sub-contracted The executive committee assists the chief executive officer in the to an independent certified public accounting firm. This firm Company’s strategic and operational management. also provides for payroll management, as well as social security and tax returns; Management committee • Valuation and assessment of specific financial items, either The executive committee is supported by a management committee complex or relying on subjective assumptions, are sub- (CoDir), which is the operational review body for the Company’s contracted to third-party experts. These items include notably projects. The management committee meets once a month and the CIR, the provisions for compensation payable to employees consists of the members of the executive committee and the on their retirement and the expense related to share-based Company’s principal managers. It meets to monitor performance payments; and and adjust the operational orientation, if needed. The Company’s • The Company has implemented an integrated system that management committee is a true place for exchange and reflection, provides for book keeping and securing the purchase-to-pay and plays a role in control ling and coordinating al l operational workflow, including electronic approvals, as well as automated teams. The management committee is responsible for meeting the entries and payments. Company’s annual corporate objectives. • The Company has implemented monthly closing procedures and key controls (Cut-off entries, Bank statement reconciliations, 4.11.2 INTERNAL CONTROL AND RISK Manual journal entries review, Payroll reconciliation, etc.) in MANAGEMENT PROCEDURES order to ensure the reliability of the financial information. The procedures implemented by the Company as part of its • The Company has also implemented expense-control measures, internal control are reviewed and evaluated by the statutory using an electronic purchase order system. Invoice payments 58 – GENSIGHT BIOLOGICS – 2017 Registration Document