Twice a year, Group Finance identifies the events that may have led to one or several assets being impaired, notably goodwill and intangible assets (in accordance with IFRS). Where appropriate, the carrying amount of the asset concerned is written down in the financial statements.
Segment Chief Executive Officers and their Executive Committees, as well as Region Chairs and Chief Financial Officers review operational and financial reporting (comprising improvement metrics for client retention, sales development and comparable unit revenue growth) before presenting it to the Group Executive Committee. In addition, quarterly reviews with each of the Group’s activities, segments and regions give the Group Chief Executive Officer and Group Chief Financial Officer insight into performance trends for the segments and regions based on the financial reporting and operational information.
Procedures are in place to identify off-balance sheet commitments. This term covers all rights and obligations that may have an immediate or future impact on Sodexo’s financial position but are not recognized (or are only partially recognized) in the balance sheet or income statement. These include items such as assets pledged as security; guarantees relating too perating contracts (for example bid bonds or performance bonds), to borrowings, or to claims and litigation; lease obligations not recognized in the balance sheet; commitments under call or put options. Off-balance sheet commitments are presented regularly to the Board of Directors.
The Sodexo Tax Department defines the Sodexo Group Tax Policy. The policy is designed to achieve tax consistency worldwide and to ensure that appropriate taxes are paid in line with local tax rules and the substance of our business in the various geographic regions in which Sodexo operate. The global tax team ensures that a consistent approach is applied on tax issues in all countries and advises and assists operational teams on all questions relating to tax laws.
The Sodexo Legal Department (comprised of a Group team and regional and local teams) works pro-actively with business development and operational teams to ensure legal compliance and support contract negotiations, so that risks pertain solely to contractual obligations for services and are limited in value and duration.
Lastly, using the financial information reported and consolidated, the Chief Executive Officer, assisted by the Group Financial Communications team, prepares the Group’s financial communication. The Chief Executive Officer also relies on the operating data required to prepare the Universal Registration Document. The interim and annual results press releases are submitted to the Board of Directors for approval.
To enable the Chief Executive Officer to provide reliable information on the Group’s financial situation, a Disclosure Committee comprising representatives from the Group’s corporate functions reviews all financial information prior to publication. Members represent the following functions: Financial Control, Financial Communications, Legal, Internal Control Human Resources, Sustainable Development and Communications and Board Secretary.
The Senior Vice President Group Internal Audit reports directly to the Chairwoman of the Board of Directors and CEO, and functionally to the Audit Committee. The Senior Vice President Group Internal Audit meets the Chairwoman and CEO on a monthly basis and works closely with the Chairwoman of the Audit Committee, holding informal meetings (approximately four times per year).
The team, with an average of 24 staff, is organized in four different hubs for global coverage – Paris, London, Washington and Singapore. The team members come from diverse professional backgrounds and speak multiple languages.
Sodexo’s Group internal audit activities are certified by the French Internal Audit and Internal Control Institute (IFACI). This internationally recognized certification attests to Sodexo’s compliance with and application of 30 general requirements of the Professional Internal Audit Standards (independence, objectiveness, competence, methodology, communication, supervision and continuous assurance program).
IFACI certification is a high-level confirmation of quality and performance that:
The Internal Audit Department performs internal audits of Group entities based on an internal audit plan established annually.
The audit plan is based on the Group Risk Profile (which is established using the approach described under 6.4.2.3 Approach to Risk Assessment) and input from the Chairwoman and CEO, the Chief Financial Officer and other key Sodexo stakeholders. The Audit Committee reviews and approves this annual audit plan.
The responsibilities of the Internal Audit Department include:
The Internal Audit Department may also conduct special assignments at the request of the Chairwoman and CEO, the Audit Committee, or the Executive Committee.
During Fiscal 2022, the Group Internal Audit Department conducted 40 audits in 31 countries. In addition, the network of close to 85 internal control coordinators provides support for internal audit engagements and the remediation of weaknesses identified by the internal audit team.
