Mcs Booklet 2021

Minimum Control
Standards - 2021
Introduction
As a global leader in our industry, LafargeHolcim adheres to the highest of

standards when it comes to how we manage and operate our business day to
day everywhere around the world. We see it as our ethical duty. At the same
time, we ensure our license to operate towards government and authorities as
well as our employees, investors and the communities where we work.
With this in mind, we manage a set of Minimum Control Standards that every
country and business in our organization must follow – with clear guidance and
consequence management.
Minimum Control Standards encompass 62 mandatory controls from

Governance and Compliance, Fixed Assets, Revenue, HR, Inventory,
Expenditure, IT, Accounting and Consolidation, Tax and Treasury to
Sustainability.
These minimum control standards are mandatory throughout our

operations.
Each LafargeHolcim employee has an important role in ensuring the

implementation and effectiveness of our Minimum Control Standards and thus
running the Internal Control System.
It is crucial that we engage them in the Minimum Control Standards

implementation and ensure that the right organization is in place to improve
control effectiveness.
The Minimum Control Standards are assessed and tested every year in all our
businesses across the globe. Our local CEOs and CFOs certify through signed
letters to the Group that they are in place and operating effectively.
This booklet aims at supporting the Minimum Control Standards execution and
proper understanding of the standards across the organization.
Group Internal Control

MCS Summary and Contents
Reputational Errors in Operational Financial
MCS P. Compliance
damages financials disruption losses
Fraud
GOVERNANCE AND COMPLIANCE 11
01 Communication and promotion of the Code of Business Conduct and speak-up culture 12 ● ● ● ●
02 Compliance with Fair Competition laws and requirements 14 ● ● ●
03 Related party transactions and conflict of interests 15 ● ● ● ●
04 Board of Directors secretarial requirements 17 ●
05 Health & Safety 18 ● ●
06 Risk assessment 19 ● ● ● ●
07 Mitigation of business risks - Security 20 ● ● ● ●
08 Mitigation of business risks - Group insurance 22 ●
09 Mitigation of business risks - Business Resilience System 24 ● ● ●
10 Mitigation of business risks - Remediation of deficiencies and non-compliance with MCS 25 ● ● ● ● ● ●
11 Personal data protection 26 ● ●
12 Segregation of duties and user access review 28 ● ●
13 Delegation of authorities and approval workflows 30 ● ● ●
14 Litigation disputes 32 ● ●
15 Review of contracts by finance 33 ● ●
FIXED ASSETS 35
16 Management of titles, licenses and permits 36 ● ● ● ●
17 Quarry reserves & provisions for rehabilitation and restoration 38 ● ● ●
18 Classification and depreciation of property, plant & equipment 40 ●
19 Physical verification of fixed assets 41 ● ● ●
REVENUE 43
20 Management of customer and material master data 44 ● ● ● ●
21 Price management 46 ● ● ●
22 Control of customer credit limits 47 ● ●
23 Matching of sales orders, shipments and invoices 48 ● ● ●
24 Accounts receivable valuation 49 ● ● ●

MCS P. Compliance
Fraud
HUMAN RESOURCES 51
25 Execution of onboarding, offboarding and transfers of workers 52 ● ● ● ● ●
26 Payroll 54 ● ●
27 Compliance with payroll and local labor laws 55 ● ●
28 Employee pension and benefit plans 56 ● ●
EXPENDITURE 59
29 Management of supplier master data 60 ● ●
30 Supplier qualification 62 ● ● ● ●
31 Three-way match, two way match and direct vendor invoices 64 ● ● ●
32 Payment processing 66 ● ● ● ● ●
33 Accruals for expenditures not invoiced 68 ●
INVENTORY 71
34 Physical stock take of spare parts and materials and volume reconciliations 72 ● ● ●
35 Inventory valuation 76 ● ● ●
IT 77
36 Management of access to IT systems 78 ● ●
37 Review of IT user access rights to production IT systems 79 ● ●
38 Security configuration settings and batch job management 80 ● ●
39 Data backup, storage and restoration process 81 ● ●
40 Managing changes to IT systems 82 ● ●

MCS P. Compliance
Fraud
ACCOUNTING & CONSOLIDATION 85
41 Compliance with accounting and reporting standards (LHARP) 86 ● ●
42 Reconciliation of general ledger accounts 87 ●
43 Reconciliation of bank accounts 88 ● ● ●
44 Reconciliation of intercompany balances 89 ● ●
45 Manual journal entries 90 ● ● ●
46 Impairment of goodwill, intangible assets and PPE 91 ●
47 Transactions in a foreign currency 93 ●
48 Management of legal structure and consolidation hierarchy 94 ●
49 Consolidation of financial statements 95 ●
50 Statutory financial statements 96 ●
TAX 97
51 Tax risk assessment and reporting 98 ● ●
52 Tax filings and payments 99 ● ●
53 Deferred and current income tax calculations 100 ● ●
54 Transfer pricing 101 ● ●
55 Non-income (indirect) taxes 102 ● ●
TREASURY 103
56 Bank relations 104 ● ●
57 Cash transactions are not permitted without Group CFO approval 106 ● ●
58 Secure payment means 107 ● ●
59 Financial instruments, borrowings, commitments and working capital schemes 109 ● ●
60 Forex, interest rate, commodities risks monitoring and hedging 111 ●
SUSTAINABILITY 113
61 Environmental impacts 114 ● ● ●
62 Social impact: Human Rights & Stakeholders 115 ● ● ●

Governance and
compliance
10 L A F A R G E H O L C I M • M I N I M U M C O N T R O L S TA N D A R D S L A F A R G E H O L C I M • M I N I M U M C O N T R O L S TA N D A R D S 11
1 Communication and promotion
GOVERNANCE AND COMPLIANCE

of the Code of Business Conduct
and speak-up culture
PRIMARY OBJECTIVE CONTROL REQUIREMENTS
Senior management continuously • The Code of Business Conduct (CoBC) is • The organization’s commitment to integrity
communicate and role model the Code of 1. C
EO communication of the communicated to all new employees, with and ethical behavior as defined in the
Code of Business Conduct and a short introduction, at on-boarding. New Supplier Code of Conduct is communicated
Business Conduct (CoBC) while promoting a
integrity line to employees at employees acknowledge that they have to the suppliers outsourced service providers
speak-up culture read and understand the policy and this is (Step 2)
least annually, performance of stored in the employee’s personnel file. The
trainings to risky employees • For existing suppliers, the commitment to
RISK method used for acknowledgment is defined our Supplier Code of Conduct is documented
according to the training plan, by the local Legal and Human Resource
- Poor tone at the top (Step 1, 2) through contractual terms and conditions
- Corruption and Bribery (Step 1, 2, 3) and acknowledgement of departments (or designated department). included in the purchase orders and during
- Money Laundering (Step 1, 2, 3) the Code of Business Conduct (Step 1) the tendering process for the new suppliers.
- Transaction with sanctioned parties (Step 1, 2, 3) by newly joined employee, • At least annually and more frequently as In all other contracts, best efforts are made
- Infringement of Fair Competition regulations maintained by Human the need demands, the CEO communicates for inclusion of a clause which recognizes the
(Step 1, 2, 3) Resources (or designee). to all employees concerning the values of principles of Anti-Bribery and Corruption,
- Data leakage of sensitive information (incl. non LafargeHolcim and the Code of Business either referring to our Code of Business
compliance with GDPR) (Step 1, 2, 3) 2. C
ommunication of the Supplier Conduct and encourages employees to Conduct or our template clause or not. (Step 2)
- Infringement of human rights standards Code of Conduct to suppliers, speak up, report suspected misconduct. • In the event that substantiated breaches
(Step 1, 2, 3) outsourced service providers, (Step 1) occur, remediation (consequential
- Ineffective or unethical vendor selection process must be documented. • Employees, with roles and responsibilities management and effect discipline)
(incl. TPDD process) (Step 2) that encounter significant Code of Business must occur in consultation with Group
3. R
emediation by management of
any confirmed breach. Conduct risks or have a function of reducing Investigations. This process will be governed
IMPACT these risks (as defined by local Legal & by the Country General Counsel at country
- Reputational Damages Compliance) are to undertake periodic level and Region General Counsel or Head of
- Financial Losses training defined locally. (Step 1) Compliance above country level. (Step 3)
- Fraud • The integrity line phone number must be Links to Code of Business Conduct and
working from all our facilities, the access to Supplier Code of Conduct
the website is available through our network
and posters should be placed in all our
locations, the Integrity Line is communicated
in the Intranet, Internet and Supplier Code of
Business Conduct. (Step 1)
2 Compliance with Fair Competition
3 Related party transactions and

laws and requirements conflict of interests
PRIMARY OBJECTIVE CONTROL

PRIMARY OBJECTIVE CONTROL Ensure approval of related
Follow Group Fair Competition party transactions by Legal and 1. M
onitoring by the appropriate person
Directive, Commercial 1. T
raining on fair competition communication to all employees (see Conflict of Interests directive)
Documentation Directive and compliance of highly and medium to declare personal interests that and the local compliance officer
competition law advice and risk exposed employees is completed of potential Conflict of Interests
overlap business decisions they
ensure risk-exposed employees and is documented by Local Legal for situations reported by employees and
trainings at country level and Group need to make
any resulting actions or requirements,
are trained
Legal – Competition Law for trainings with documentations kept by local
at Group Level. RISK Legal and Compliance department.
RISK 2. P
ricing decisions, competitor contacts - Poor tone at the top (Step 2) 2. P
erform Conflict of Interests
- Infringement to Fair Competition and sources of market information are - Corruption and bribery communication annually.
regulations (Step 1, 2) documented in accordance with the (Step 1, 3, 4, 5)
3. R
eview and approval by the legal
IMPACT Commercial Documentation Directive. IMPACT department before initiating any
- Reputational damages Advices by Group Legal - Competition - Reputational damages
business deal or arrangement
- Financial losses Law to Local legal department - Financial losses
- Fraud between a LafargeHolcim entity and a
and business stakeholders are shareholder or director’s company.
documented.
4. T
he privileged information on
LafargeHolcim Ltd, the insiders’ list is
elaborated and handled at Group level
REQUIREMENTS - by Legal & Compliance. Group Legal
and Compliance sends the quarterly
• Employees must comply with the Fair medium exposed employees must be communication. The insiders’ list is
Competition Directive and applicable local trained within six months of taking on cross-checked with LHiNK users list.
competition laws. (Step 1) a job with LafargeHolcim. Successful (Group Level)
completion of an e-learning training must
• All highly exposed employees must 5. T
he privileged information on a listed
be documented by automatic certification
participate in a face to face training generated by the e-learning tool or by Group company, the insiders’ list is
every two years; these trainings are any other verifiable means) with records elaborated and handled at country
organized by the local legal department retained by Local Legal or if at the Group level - by the Legal department or
or if at the Group Level, by Group Legal level, by Group Legal - Competition Law. company secretarial department. The
– Competition Law. All newly recruited (Step 1) country Legal department sends the
highly exposed employees must be trained
within 6 months of taking on a job with • Employees must comply with the quarterly communication.
LafargeHolcim. Participation in the face to Commercial Documentation Directive
face training must be documented using to ensure pricing decisions, competitor
a signed participation list or by any other contacts and sources of market information
verifiable means (paper or electronic form) are properly documented. (Step 2)
with records retained by the Local Legal
or if at the Group level, by Group Legal - • Group Legal – Competition Law regularly
Competition Law. (Step 1) advises legal and business stakeholders on
competition law compliance by guidance
• All medium exposed employees must papers or any other means, whenever
complete an e-learning training every applicable. (Step 2)
three years; this e-learning training is
provided by Group Legal - Competition Links to Fair Competition Directive &
Law to all Local Legal. All newly recruited Commercial Documentation Directive
3 Related party transactions and
4 Board of Directors secretarial

conflict of interests requirements
REQUIREMENTS PRIMARY OBJECTIVE CONTROL

• Employees are to assess their own situation to list employees in the entity that have The local secretary and the
and disclose any Conflict of Interests (COI) access to privileged information. These chairperson of the Board
situation to their manager as soon as it lists shall be updated on an ongoing
1. S
igning by the Board of Directors
becomes apparent. The disclosure will be basis. As soon as privileged information
of Directors (BoD) ensure chairperson and secretary of a letter
reviewed as described in the Conflict of such as consolidated financial data and that all local corporate legal to confirm compliance with all
Interests directive. (Step 1) projects data is available internally a requirements are met corporate legal requirements.
communication informing insiders of
• Training on the Conflict of Interests Directive their obligation not to trade shall be sent
is a mandatory part of the standard Anti- out. The updated list and its previous RISK
Bribery and Corruption (ABC) Compliance versions as well as the communication is - Lack of Board’s oversight
Training for Employees. (Step 2) stored by Group Legal & Compliance (or responsibilities over risk and internal
• Conflict of Interests Directive is the applicable listed entity). Permissions control (Step 1)
communicated once a year to enable regarding access to the folder where - Absence of control and supervision
employees to declare potential conflict of the lists are stored and secured must be over remote or small entities (Step 1)
interests. (Step 2) restricted and controlled. (Step 4)
IMPACT
• Any business deal or arrangement between • Group Companies having Securities listed - Reputational damages
a LafargeHolcim entity and a shareholder on a stock exchange shall adopt a binding
or a director’s company shall be deemed a Insider Dealing and Market Disclosure
related-party transaction. For companies setting at least equivalent standards and
locally listed, related party transactions are processes designed to ensure compliance
to be reviewed by the legal department by that Group Company and its directors REQUIREMENTS
before approval or signature. (Step 3) and employees of their respective
obligations under applicable laws and When required by law, an entity that has • Annual shareholders meeting occur, if
• For Group privileged information, Group regulations. Insider Dealing Market a Board of Directors must ensure that all applicable
Legal and Compliance lists all employees Disclosure Directive. (Step 5) corporate secretarial duties are performed
that have access to that information. and documented in a timely manner in • Any other local legal requirements (the
For other publicly listed entities, the Refer to Conflict of Interest intranet site defined secretary should specify all the
accordance with the local requirements.
entity legal department may also need (including the COI tool), Code of Business local legal requirements or liase with the
On behalf of the Board of Directors, the
Conduct and Conflict of Interest directive local legal team to obtain such information
secretary and chairperson must ensure that
the Board of Directors and its Committees and formalize it.)
(if applicable) operate according to the The Board of Directors chairperson and
provisions of the local corporate laws, secretary shall jointly confirm compliance
company’s articles of incorporation, bylaws, with all applicable corporate legal
charters or other corporate governance requirements by signing a compliance
regulations. This includes in particular that: confirmation letter as part of the annual
• Key corporate documents and records are internal control certification process.
maintained in accordance with applicable Objective of this control is considered
retention policies (local law and Group achieved with the following alternative
regulations) measures: 1) in case the CEO is a member of
the board, a certification letter signed by the
• Meetings of the Board are held at least as CEO in his/her capacity of a board member
frequently as required by local law and by the secretary; 2) in case the CEO is
not a member of the board, a certification
• Minutes are taken at the meetings, are letter signed by the CEO and the secretary,
approved and are maintained as part of presented in the board meeting with
the corporate records formalized meeting minutes signed off by
• Shareholder’s registers are kept the chairperson of the board.
up-to-date
5 Health & Safety
6 Risk assessment

PRIMARY OBJECTIVE CONTROL PRIMARY OBJECTIVE CONTROL
Ensure effective implementation Perform and document a robust
of the four pillars of the Health 1. E
nsure annually the Health & business and compliance risk 1. A
risk assessment is performed
& Safety Management System Safety policy is correctly applied assessment at the country / annually and documented per Group
(Management Review, Objectives by verifying the implementation service center level at minimum Risk management process. Action
and Planning, Operations and of consequence management, annually Plans are defined and monitored
Health & Safety Improvement for all high risks (as a minimum)
Support Processes, Performance
Plan completion, employees and in accordance with the Risk
Evaluation) contractors training plan and Health RISK management guidelines.
& Safety Key Performance Indicators. - Poor tone at the top (Step 1, 2)
- Misalignment of the organization 2. C
ountry and service center risk
RISK with business needs and objectives assessment reports are signed-off by
- Health & Safety issue (injuries, (Step 1, 2) the Country CEOs or heads of service
fatalities) or incident (Step 1)
centers (electronically or physically)
IMPACT
IMPACT and sent to Group Risk Management.
- Reputational damages
- Reputational damages - Operational disruption
- Operational disruption - Financial losses
REQUIREMENTS REQUIREMENTS
Country must ensure that the following 4 • Operations and Support Processes: Ensure • A risk lead is appointed in each country to • Action plans must be defined for all high
pillars of the Health & Safety management that all employees and contractors are in support the local management with the residual risks (at a minimum) in accordance
system are in place and operating with scope of the training plan which must meet risk assessment process and to monitor with the Group Risk Management
regular reviews: minimum expectations of classroom and mitigation actions. (Step 1) guidelines. Action plans (title and
practical per Health & Safety standards. • A risk assessment is performed and signed description), owner and due date have to
• Management Review: Consequence be documented in the risk management
Management program is in place • Performance Evaluation: Group Health & off at least annually and identifies risks
with the greatest likelihood of occurring tool. (Step 1)
Safety Audit and annual self-assessment
• Objectives and Planning: An annual Health performed at unit level. Design Safety And and with the highest potential impact as • Update of the status of actions in the risk
& Safety Improvement Plan (HSIP) is set Construction Quality Program (DSCQP) per the current Group Risk assessment management tool is done when the risk
up following the Group process. Health and Incident Reporting and Investigation methodology (please refer to Group assessment is performed as per the Group
& Safety Improvement Plan completion with incidents correctly classified and Risk Management guidelines. Risks, risk requirement.(Step 1)
is tracked at the country Executive action plans kept up-to-date with relevant comments (i.e. description), likelihood
Committee level and the strategic area actions. Road Key Performance Indicators (initial and residual), impact (initial and
of Health & Safety Improvement Plan is (KPIs) should be reviewed. residual) and risk treatment have to be
tracked in the Group tracking tool. documented in the current Group Risk
Refer to Group Health & Safety site assessment tool . (Step 1,2)
7 Mitigation of business risks -

Security

Implement security measures and Country must implement and manage a d. Manage suppliers providing security
procedures in accordance with 1. A
nnual sign off by the Country Security and Resilience programme, based services in line with LafargeHolcim
the Security & Resilience Policy Chief Executive Officer (CCEO) of on the Security and Resilience Policy, the processes
the Country Ecosystem report and Security & Resilience Management System e. Travel: The Country Travel Security
(SRMS) and the Security Directives. This
Country Security Risk Assessment. Guide is updated annually. All booked
RISK requirement includes functions or other trips must be visible in International-
- Assault on person (Step 1, 2) 2. E
nsure minimum implementation horizontal teams who may operate within SOS applications as per the People
- Attack against business asset requirements of the Security and existing LafargeHolcim countries but have Security directive. Business travellers are
(Step 1, 2) Resilience policy and directives are unique risk profile (LafargeHolcim Trading, monitored continuously
- Theft (Step 1, 2) completed by the Country Security LafargeHolcim Energy Solutions, IT Services
Centers, Business Services Centers, etc). In f. Incidents response: report all Security
Representative. incidents through LafargeHolcim Security
IMPACT case of joint Business Resilience programme
- Reputational damages with a LafargeHolcim Country, a formal Incident Notification Tool (SINT)
- Operational disruption agreement should exist. g. Mitigation controls: implement mitigation
- Financial losses At a minimum, the Country must perform controls at the location of the risk and
- Fraud the following tasks: deploy specific programmes or plans
where Group Level Material Risks (GLMRs)
• Ecosystem: capture on an annual basis have been identified as in scope
the country ecosystem (people, assets,
etc) in the LafargeHolcim Sites mapping • Assessment, Assurance and Performance:
application, including evacuation People (Step 2)
on Board (POB), where applicable. (Step 1) a. Track the implementation of the Country
• Risks: conduct security and resilience risk Security & Resilience Management
assessment at country level on annual System and the deployment of directives;
basis (Step 1) a. Send the Country Security & Resilience
• Minimum implementation requirements Briefing to Country Chief Executive
(Step 2) Officer (CCEO) and Group Security &
Resilience at least annually
a. Structure: appoint a Country Security
Representative (CSR) and organisation Links to People Security Directive, Security
Services with Integrity (SSI) Directive,
b. Trainings are completed and Terrorist & Organised Crime (TOC)
documented for the security organization Monitoring Programme Directive
c. Budget : Annual dedicated security
budget is defined and at least quarterly
cost tracking is performed
The above requirements can be performed more frequently in response to a significant change to the business or
risk landscape, or if specifically mandated by Group Security and Resilience Governance requirements

Group insurance
Follow the Group insurance The Country must comply with the following like installation of building materials, new
process to ensure adequate risk 1. P
ayment of Group insurance 5 priorities: products with different liability risks such as
coverage. • Group insurance premiums are paid by the building material chemicals, etc.). (Step 4)
premiums is done prior to the due date
due date with no delay. (Step 1) • For risks that are not covered by Group
2. A
nnual approval by the local Executive • Property insurance values are provided insurance programs*: (Step 5)
RISK Committee (or designee) of property annually to Group Insurance before the a. L
ocal Executive Committee must put
- Lack of insurance coverage insurance values for accuracy due date to avoid under-insurance. (Step 2) in place local insurances as required by
(Step 1, 2, 3, 4, 5) according to Group methodology, to • All claims and losses that are covered by a local regulations (e.g. motor liability,
IMPACT
ensure replacement value cover Group Insurance policy and that are likely workers compensation insurance)
to exceed the applicable deductible or b. L
ocal Executive Committee may put in
- Financial losses 3. B
y using Group Risk Insurance Tool
exceed EUR 500,000 (or equivalent) have place local insurance for non-mandatory
Incident Report is submitted within been timely declared to Group Insurance local risks as long as these do not
48 hours by the local Executive and Risk Financing (GIRF) within 48 hours overlap Group insurance programs (e.g.
Commiteee (or designee) for all claims of incident via Group Risk Insurance Tool allowed would be fiduciary insurance
and losses that are covered by a Group (GRIT). (Step 3) for local pension fund, trade credit
Insurance policy and that are likely to • Any change in the business that impacts insurance)
exceed the applicable deductible or the Group Insurance programs* are
communicated to Group Insurance and Refer to the Group Insurance Directive
exceed EUR 500,000 (or equivalent).
Risk Financing (e.g. new business activity
4. G
roup Insurance and Risk Financing is
informed before new business activity
is put in place *Group insurance programs:
• Property Damage / Business Interruption (PDBI); Third Party Liability (TPL); Directors & Officers (D&O); Marine
5. L
ocal Executive Committee approves
Protection & Indemnity and Charterers Liability; Marine Cargo
purchase of additional local • Construction All Risk / Erection All Risk (CAR/ EAR) – alternative local insurance allowed if cleared by GIRF before
insurances for risks that are not project commences
Group Insurance and Risk Financing is regularly reviewing the risks situation and reserves the right to define other
covered by a Group insurance program
risks to be covered by a Group insurance program

Business Resilience System Remediation of deficiencies
and non-compliance with MCS
Every entity must have a Business 1. A
nnually verify that the following
Resilience System requirements are in place in Management process is in
accordance with the LafargeHolcim place to identify and correct 1. A
pproval by Group Head of Function
Business Resilience Directive: deficiencies found in monitoring and Group Internal Control for local
RISK control design which do not agree/
- Assault on person (Step 1) a. A
ppointed Business Resilience the MCS
comply with Minimum Control
- Supply chain disruption (Step 1) sponsor, Business Resilience
- Business disruption due to IT/OT Standards requirements/central
coordinator and Business
unavailability (Step 1)- Attack against RISK description. Validation by Regional
Resilience Team
business asset (Step 1) - Poor tone at the top (Step 1) IC correspondent of Not Applicable
b. U pdated Country Business - Misalignment of the organization controls. Deficiencies to Minimum
IMPACT Resilience Plan (‘Plan on a Page’) with business needs and objectives
- Reputational damages
Control Standards are approved
c. C
risis Management Plan and (Step 1, 2) by Region Head (for Countries) /
- Operational disruption
- Financial losses Business Continuity Plan at IMPACT Group management (for Functions)
country level , Emergency - Reputational damages through the certification process.
Response Plan available at the - Errors in financials
2. M
onitoring by the local Executive
location of the risk - Operational disruption
Committee of the progress of all
- Financial losses
d. S pecific country level plans for - Fraud action plans relating to deficiencies
Group Level Material Risks, High to ensure they are resolved and
and Very High risks identified reported to the Group according to
e. P
ost-exercise report which Internal Control instructions.
includes objectives, the risk being
exercised and the lessons learnt
REQUIREMENTS
Management responds timely and • Deficiencies to Minimum Control
REQUIREMENTS appropriately to any deficiencies identified Standards has to be validated by local
through monitoring activities of and takes management, Region Head (for Countries)
All LafargeHolcim (LafargeHolcim) • Nominate a Business Resilience Sponsor adequate and timely actions to correct /Group management (for Functions)
countries must implement and manage a and a coordinator to implement the deficiencies. This process includes: through the certification process. (Step1)
Business Resilience (BR) system, following Business Resilience programme. Appoint a • In case a country is not able to design a • A root cause analysis, a detailed
their Country Security and Resilience Business Resilience Team (BRT) consisting local control description in compliance description of the deficiency and the
Management System (CSRMS) and the at a minimum of Business Resilience Team with the Minimum Control Standards creation of an action plan to remediate the
Business Resilience directive requirements. leader and core members (MCS) requirements, (“Requirements” + weakness identified. (Step 2)
The Country CEO (CCEO) must determine, • Perform and document annually the “Control Description”), the Country internal • Deficiencies are communicated to those
based on the risk, whether a Business training of Business Resilience sponsor, control manager clears with Regional parties responsible for taking corrective
Resilience programme is required in Coordinator and Business Resilience Team IC correspondent, uses MCS Design action, at senior management (Step 2)
addition at the sub-country level. This and Implementation non-compliance
• Prepare a Country Business Resilience • Follow-up of corrective actions and
requirement includes functions or other approval form to seek Group approval.
Plan (‘Plan on a Page’) as per the Business progress towards completion. (Step 2)
horizontal teams who may operate within Submission must be done two weeks prior
Resilience Directive
existing LafargeHolcim countries but have to the Control Design Assessment (CDA) • Action plans relating to deficiencies are
unique risk profile (LafargeHolcim Trading, • Maintain specific country level plans for Group
deadlines. Approvals are to be uploaded/ tracked regularly by the local Executive
LafargeHolcim Energy Solutions, IT Services Level Material Risks (GLMRs), High and Very
linked at SAP Governance, Risk, and Committee and to Group Internal Control
Centers, Business Services Centers, etc). In High risks identified in the LafargeHolcim
Compliance tool (SAP-GRC). (Step 1) at least twice a year. (Step 2)
case of joint Business Resilience programme Security and Resilience Risk assessment tool
• Controls rated as Not Applicable and split • All deficiencies are tracked in SAP
with a LafargeHolcim Country, a formal • Perform an annual Business Resilience Team
of responsibility among entities and Service Governance, Risk, and Compliance tool
agreement should exist. exercise based on your risk assessment
Centers must be formally validated by Regional (SAP-GRC). (Step 2)
Each country must: Refer to Business Resilience directive Internal Control correspondent. (Step 1)
11 Personal data

protection

Ensure personal data/personally If required by the local data protection and or on the company’s website, addendum
identifiable information (PII) 1. T
rain employees in scope, as per privacy laws and regulations, to the existing commercial contract, or it
managed in the company the country defined training cycle, is embedded into the general terms and
• The Data Privacy Notice/Policy is made conditions of the commercial agreement).
(acquired, processed, stored and on how to comply with local Data available to all existing employees and (Step 2)
deleted) is handled in accordance Protection laws and regulations as distributed to new employees during the
well as on recognizing and reporting onboarding process. (Step 1) • Customer’s consent is collected and
with local laws and regulations
data breaches. recorded whenever required. Seek advice
• If required by the local data protection from the Data Protection Responsible /
2. I mplement Data Subject Consent and privacy laws and regulations, relevant Legal and Compliance concerning the
RISK Form (in local language, if necessary) employees are trained to recognize and collection of customer consents. (Links to
- Unauthorized use of company & for different types of data subjects report data breaches or any incidents the control standard on customer master
personal information (incl. non com- relating to personal data which may carry
(e.g. candidates, employees, data).(Step 2)
pliance with GDPR) (Step 1, 2) reporting/notification obligations. Country
- Data leakage of sensitive information customers, suppliers) if required by
is free to determine who are relevant • If required by the local data protection
(incl. non compliance with GDPR) local data protection law. Annual employees.(Step 1) and privacy laws and regulations, when
(Step 1, 2) verification with each department external vendors have access to personal
that Data Processing Agreements • Countries are required to define a data/PII handled by a LafargeHolcim entity,
IMPACT compliance training program for a locally
are signed with vendors processing seek advice from the Data Protection
- Reputational damages defined cycle. They define what training
Personal Data on LafargeHolcim Responsible / Legal and Compliance
- Financial losses they want to deliver, and which is the
behalf. concerning implementation of an
target population within what time period. agreement with the vendors regarding the
All newly recruited relevant employees processing and protection of that personal
must be trained within 6 months of taking data/PII. (Step 2)
on a job with LafargeHolcim.(Step 1)
• If required by the local data protection and
• Seek advice from the Data Protection privacy laws and regulations, a process is
Responsible / Legal and Compliance if put in place and communicated internally
necessary. (Links to the control standard to respond to data subject requests
on employee onboarding). (Step 1, 2) concerning an individual’s personal data
• Consent is collected and recorded when processed by the company. Always inform
the employee’s image (photo/video) is and seek advice from the Data Protection
taken and used by the company.(Step 2) Responsible/ Legal and Compliance
concerning how to respond to a data
• Data Privacy Notice/Policy is made subject request. (Step 2)
available / distributed to all existing, new
customers and prospects (either by email, Refer to General Data Protection Directive
online on a dedicated customer platform
12 Segregation of duties

and user access review
Ensure there is a proper Segregation of Duties (SoD): Business Access Review:
segregation of duties and users 1. I nformation Technology Service • Information Technology Service Centers At least twice a year, the following occurs for
have need based access to IT Centers annually review and validates (ITSCs) annually review the Segregation all critical business applications*:
the Segregation of Duties rule set for of Duties (SoD) rule set for Enterprise
applications. • A review of all user accounts to ensure
Enterprise Resource Planning (ERP) Resource Planning (ERP) system to ensure that users have access according to their
alignment with Group rules and update job roles. Any excessive access that is not
system and provides the confirmation
the local customized objects (transactions) required for the performance of their job
RISK to the Countries / Functions / Service with support from business and provides role should be revoked. (Step 3)
- Unauthorized access, disclosure, Centers. the confirmation to the Countries /
modification, damage or loss of data • IT should provide a report for all business
2. R
eview half yearly, at a minimum, of Functions / Service Centers. Where the
(Step 1, 2, 3, 4) users with the level of access for business
the Enterprise Resource Planning (ERP) Segregation of Duties (SoD) rule set is
to review user access rights to ensure that
IMPACT managed directly by the Countries, this
system Segregation of Duties reports by should be performed at Country. (Step 1)
the access is in line with their job role.
- Financial losses Business must propose corrective actions
- Fraud
the respective Business Process Owners • Risk with zero conflicts (RWZC) are
and the CFO. Segregation of Duties (e.g. revoke access / change access and
eliminated upon identification.There is no send a request to IT for such changes) to be
conflicts are removed or mitigated as tolerance for conflicts over risks mapped as supported by the IT team (Step 3) .
per the Group requirements. “Risk with zero conflicts”. (Step 2)
• Business must obtain the dormant user
3. V
alidation half yearly, at a minimum, • Other Segregation of Duties risks (non report from IT for all critical business
over users’ level of access for all critical RWZC) are to be kept at a minimum. applications and review to ensure that
Whenever removal is not possible, dormant users access is timely revoked /
business applications and corrective they are mitigated by implementing
actions taken within one month after deleted (notify IT to disable/delete
a compensating control. These dormant user ID’s). (Step 4)
the review, if needed. compensating actions must be
4. V
alidation half yearly, at a minimum, documented and monitored to ensure
they are reducing the identified risk. The
over dormant users access deletion/
compensating controls must be tested for
revoked, and corrective actions taken operating effectiveness. (Step 2)
within one month after the review, if • Exceptions of the above, Risk with zero
needed conflicts and non-Risk with zero conflicts
requirements, have to be reviewed and
agreed with Internal Control Regional *Critical business applications are defined and
Correspondent and approved by the Head documented as per Annex 06. IT Controls of the Internal
of Group Internal Control (Step 2) Control permanent instructions
13 Delegation of authorities

and approval workflows
Define clear delegation of Group Delegated Authorities (GDA): • Responsibilities are clearly stated and
authority in compliance with 1. A
pproval by the local Executive The Group defines approving authority communicated within the organization.
Group Delegated Authorities with Committee (and Board of Directors, and threshold for key transactions and
commitments involving LafargeHolcim or • The assignment of responsibilities is clear,
an adequate approval system if applicable) of the authorization including third-party service providers
any of its subsidiaries. These rules provide
policy which includes Group (who carry out activities on behalf of the
a framework to the countries and functions
Delegated Authorities requirements. to make their decisions. These rules must organization), related to the extent of their
RISK decision-making rights.
2. A
ny contractual commitment be complied with and all approvals must be
- Authority and responsibility not documented. (Step 2)
clearly and formally assigned (Step 1) included in the Group Delegated • The Delegation of authority is adhered
- Unauthorised transactions/ contracts Authorities entered into by the Defining the local Delegation of to for every transaction which requires
made on the behalf of LH (Step 2, 3, 4) company must bear dual signature Authority Matrix: (Step 1, 2) approval.
of the authorized persons defined • The delegation of authority matrix is
IMPACT • An authorization policy or delegation
in the local delegation of authority reviewed at least yearly for compliance
- Errors in financials of authority (DoA) matrix must exist to
- Financial losses matrix. establish clear lines of authority for the with the authorization policy or limits
3. R
eview and approval by the approval of all main transactions within definitions and updated as needed.
manager responsible for the monetary limits and other authorizations Maintaining the Delegation of Authority
workflow approval matrix (system in the Country, such as the signing Matrix in the system: (Step 3, 4)
authorities. As monetary thresholds
or manual) for compliance with the
increase, additional approvals from senior • The delegation of authority is loaded in
authorization policy. For any manual levels of management are required, the Enterprise Resource Planning (ERP)
approval processes the method of with the highest monetary thresholds system workflow approval matrix. This
documentation are to be defined requiring Board of Directors and Executive and any subsequent changes require
and evidence must be maintained Committee’s approval. This delegation appropriate approval based on supporting
for each approval. of authority is formally documented, documentation.
kept up-to-date and signed-off by the
4. Q
uarterly verification by the local Executive Committee, and Board of • Quarterly, a report is run of all users set
manager responsible of users set Directors (when applicable). up in the release groups (authorized
up in the approval workflows in the approvers) to verify that they are in line
• Group Delegated Authorities must be with the local approved delegation of
Enterprise Resource Planning (ERP)
respected within the country delegation authority, which respects the Group
system (e.g. the users mapped to of authority matrix. Country authorities Delegated Authorities. The report is
release groups). Exceptions, if any, and threshold defined in the Group reviewed and signed-off by the manager
should be investigated. Review of Delegated Authorities may be delegated responsible. Access to update the release
users with authorization to update locally but such must be documented in groups is restricted to authorized users.
the release groups is performed, the local delegation of authority (DoA) and
errors analyzed and corrected. approved by the local Executive Committee
(and Board of Directors, if applicable).
14 Litigation disputes
15 Review of contracts

by finance
PRIMARY OBJECTIVE CONTROL Contracts and material commit-
Risks related to legal disputes ments are reviewed by Finance 1. R
eview and approval by local finance
are assessed and recorded 1. Q
uarterly approval by the country of contracts in a foreign currency,
quarterly in the Group Legal Case Head of Legal (or designee) of the leases and all material commitments
RISK
Management tool information reported in the Case to ensure proper accounting and
- Unauthorised transactions/ contracts
Management tool to Group Legal made on behalf of LH (Step 1, 2) disclosure before signing or upon
to ensure all required information - Lack of contract management (Step 1) subsequent change.
RISK
is reported, complete and updated - Non-adherence to accounting 2. A
pproval by the CFO of the
- Failure in litigation management
(Step 1, 2)
with the latest assumptions and reporting requirements and accounting impact of significant
according to Group Legal standards (Step 1, 2)
- Inaccurate or fraudulent closing leases based on locally defined
requirements. - Inaccurate or fraudulent closing
entries (incl. judgmental assumptions thresholds and Group Lease
entries (incl. judgmental assumptions
and estimates) (Step 1, 2) 2. Q
uarterly review by the local CFO (or Directive (including material,
and estimates) (Step 2)
- Lack of contract management
designee) of the provisions reported complex and judgmental contracts).
(Step 1, 2) IMPACT
in the Case Management Tool to
- Errors in financials
IMPACT confirm they correspond with the - Financial losses
- Errors in financials amounts in the financial statements.
- Financial losses
REQUIREMENTS
• Each entity should determine the scope or Directive to ensure correctness of the
defined criteria of contracts to be reviewed data captured from each contract (or
REQUIREMENTS by finance based on country’s materiality change to a contract), as well as the
as per SAP- Financial Consolidation determination and valuation of the
• The legal department keeps track of • The Group Legal Case Management tool (SAP-FC) report P780-050. For Leases apply additional valuation parameters (interest
and properly completes the status of must be updated as per the Group Legal the Group Lease Directive. (Step 1,2) rates, probable end date, etc). Countries
all ongoing disputes, including the reporting requirements. At a minimum are asked to avoid any leases that
estimated maximum risk, estimated provision amounts in the Case Management • Contracts are reviewed by finance prior to
signing to ensure: (Step 1,2) result in a foreign exchange exposure
expected risk, classification of the risk tool must correspond with to the amounts (FOREX). Therefore, all leases that are not
as probable, possible or remote and the recorded in the financial statements at that - Contracts in a foreign currency are denominated in the functional currency
related provisions recorded in the financial date. The estimated maximum risk, the communicated to the local financial of the country always require a separate
statements. (Step 1) classification of the risk and the provisions department and approved by CFO (or approval from Group Treasury (regardless
• At year-end (minimum), legal opinion are reviewed by the CFO. (Step 2) designee) before signature. of whether leases are budgeted or not).
letters shall be requested from external • Control must be performed at least every - Financial impacts are properly assessed, • During the Request for Proposal (RfP)
law firms assisting on disputes to receive quarter at closing, and it’s a requirement and are taken into account in the decision process, a financial review must occur to
updated information regarding such for the execution of the Financial making (capital expenditures (CAPEX), support the business decision to buy or
disputes. The legal opinions are reviewed Certifications. (Step 2) operating expenses (OPEX), leases lease an asset, including assessment of the
by the legal department and CFO. (Step 1) per International Financial Reporting financing method (by treasury) and the
Refer to the Group Legal Case Management Standards 16 (IFRS 16), take or pay, off potential impacts to the financial statements
tool. balance sheet clauses, etc.). (from accounting expert). See Lease Directive
- All material commitments are sections 2.1 and 2.2. (Step 1,2)
communicated to the financial • In the case of a volume increase or scope
department to ensure proper accounting changes during the life of a contract
and disclosure. involving foreign currency, all changes
- For International Financial Reporting must be communicated to finance for
Standards 16 (IFRS 16) before signing further actions. (Step 1,2)
the agreement, leases must be formally
approved according to the threshold Refer to LHARP 4.2.1 and IFRS16 checklist &
and the approvers defined in the Lease simulation model and to the Lease Directive
Fixed assets
16 Management of titles, licenses
FIXED ASSETS
and permits

Ensure proper validity, filing and • For all key permits & licenses (e.g. • The land management officer leads a
timely renewal of titles, licenses 1. Annual approval by local Executive environmental, operating permits, review of the land ownership situation
and permits. Committee of the list of permits quarry & mining, production, energy use, twice a year (or according to the local
vessels & ports, construction), roles and requirements). A review of the foreseen
& licenses key to the business are
responsibilities are clearly defined within land acquisition / disposals is led by the
updated and clear ownership is the organization, adequate processes land management officer with the quarry
RISK
assigned together with a procedure are put in place in order to ensure their management and the country raw material
- Lack of valid titles, licenses and
permits (Step 1, 2, 3, 4) for management of different types validity , proper filing & archiving, timely competent person. These reviews include
- Unauthorized land and quarry usage of permit and licenses. renewal, and publication (if required). reviewing all requirements to maintain the
(Step 1, 2, 3, 4) Local laws and regulations, international relevant licenses and permits. (Step 3)
2. Annual approval by the local legal standards when required, as well as
- Corruption and bribery team and the quarry (mine planer) • Renewal of permits, trigger and exercise
(Step 1, 2, 3, 4) LafargeHolcim Code of Business Conduct
and land management officer (or (CoBC), are respected in the management of mining rights and permits occurs before
IMPACT equivalent at your organization) of all permits & licenses related activities. the expiration date. (Step 3)
- Reputational damages of the existing titles of ownership, (Step 1) • Meetings with all stakeholders are
- Operational disruption mining and surface rights, conducted to review the progress of the
- Financial losses • Third Party interfacing with public officials
concessions and permits , including to acquire, renew or review titles, licenses mining activities, monitor compliance
upcoming renewals. and permits are managed through the with the mining regulations and
Third Party Due Diligence (TPDD) tool. permitting obligations. These include
3. Approval, half yearly, by the land Quarry & Plant Management, Sustainable
(control related to TPDD is covered in
management officer (or equivalent Development, Environment, Legal and
MCS30) (Step 1)
at your organization) of the land Land Management. (Step 4)
ownership situation, including • All existing titles of ownership, mining /
proposed or planned land activity surface rights, concessions and permits
(acquisition, disposal), and the effect are reviewed at least annually with the
local legal team and in consultation
on the relevant licenses. with the quarry (mine planner) and land
4. Annual approval by stakeholders management officer to ensure they are
(see requirements) of the progress of valid. (Step 2)
mining activities and the compliance
with mining regulations and permit
requirements.
17 Quarry reserves and
FIXED ASSETS
provisions for restoration
and rehabilitation
Ensure that quarry reserves • Reserves for cement production sites must the restoration/rehabilitation concept as
are secured, restoration and 1. Annual reconciliation of the be classified according to LafargeHolcim well as the evaluation of related costs and
rehabilitation requirements are resources and reserves with the total Accounting and Reporting Principles validate assumptions used to calculate
of extracted tonnages transmitted (LHARP) and the LafargeHolcim Raw site restoration/rehabilitation provisions
implemented for every quarry Material reporting standard for cement (discount rate, timing of future cash costs,
to the accounting department based
and properly recorded in financial and clinker and reviewed and validated by residual life, etc.). If a revision occurs
on the yearly topographic survey a LafargeHolcim raw materials competent that impacts a legal guarantee related
statements
and approval by CFO. Actions have person. For aggregates, resource and to rehabilitation, finance will secure the
been initiated whenever the number reserves are classified according to LHARP corresponding revision. (Step 2)
RISK of years for resources and secured definitions. The yearly topographic survey
and the deposit model (if applicable) • A biodiversity management plan (BMP)
- Failure in quarry rehabilitation reserves have a useful life of less
are used to estimate the reserves and must be in place for quarries categorized
and biodiversity management than 10 years. as of high biodiversity importance (1 or
(Step 1, 3, 4) to reconcile with the total of extracted
2. Annual verification by finance and tonnages transmitted to the accounting 2) according to criteria for biodiversity
- Depletion of our own reserves
land and quarry management of department. (Step 1) importance category. (Step 3)
(Step 1, 4)
- Non-adherence to accounting the validity of the restoration / • Restoration/rehabilitation work contracts
• All resources and reserves acquired are
and reporting requirements and rehabilitation concept and costs must be reviewed on Legal aspects by an
correctly reflected in the accounts and do
standards (Step 2) as well as the assumptions used to not lead to any impairment issues. Actions expert prior to signing and are copied to
- Inaccurate or fraudulent closing calculate the provisions. finance for filing. (Step 4)
have been initiated whenever the number
3. Verify if the quarry is classified of years for resources and secured reserves Refer to LHARP 4.10.2 Site Restoration
and estimates) (Step 4)
have a useful life of less than 10 years.
as high biodiversity importance Costs and the Quarry Rehabilitation and
(Step 1) Biodiversity Directive and 6.6.5.3 Raw
IMPACT according to criteria for biodiversity
- Reputational damages importance category. If yes, annual • A restoration/rehabilitation plan for each Material Reserves / 6.6.5.2 Raw Material
- Operational disruption quarry operation must be developed Resources and criteria for biodiversity
review of BMP by an expert to ensure
- Errors in financials according to Group requirements importance category.
that actions being implemented
and in line with the intended long- • The life (but only for AGG) is defined by
properly address the site biodiversity
term development of the quarry site, 60.6.5.05 Reserves Life [yrs]
issues. specifying the magnitude and schedule of • Accounting is specified in: 4.10.3
4. Review and validation by legal restoration/rehabilitation work. The plan Amortization of Raw Material Reserves / and
of contracts relating to the and its supporting documents are available 4.10.2 Site restoration
rehabilitation / restoration work from both land & quarry management and
finance. (Step 2) • Capex classification defines how to report the
prior to signing. purchase: 3.1.8.2 Classification of CAPEX
• The cost of restoration/rehabilitation work, • 4.2.1 Accounting for Leases under IFRS
based on local historical data or estimates 16 - defines specific exemptions related to
given by recognized specialists, is verified reserves, when we rent the land
and approved by the Country plant
management and is included as an annex • 3.2.1.2.28 Depreciation and Amortization
to the plan, allowing the assumptions to be of Long-Term Operating Assets - defines
verified. (Step 2) depreciation of raw material reserves and
capitalized mining concessions
• At least once a year, finance and land
and quarry management, with legal if
necessary, meets to review the validity of
18 Classification and depreciation
19 Physical verification
FIXED ASSETS
of fixed assets of fixed assets

Ensure the proper recognition Perform periodic verification of
and classification of fixed assets 1. Approval by the appropriate the fixed assets to ensure the 1. C
ompletion of a physical inventory
in the financial statements. finance person to capitalize an accuracy and completeness of of fixed assets is performed at least
expenditure according to the LHARP
the balances in the financial once every three years with counts
classifications and assign the proper
RISK statements. documented and differences identi-
life and depreciation methods.
- Inaccurate or fraudulent recording of fied and adjusted after approval by
fixed assets (Step 2, 3) 2. Quarterly approval by the the CFO.
- Non-adherence to accounting appropriate finance person of the RISK
and reporting requirements and Construction in Progress accounts to - Inaccurate or fraudulent recording of
standards (Step 1) ensure that only active projects are fixed assets (Step 1)
- Non-adherence to accounting
IMPACT
included (i.e. non viable projects are
and reporting requirements and
- Errors in financials written off and completed projects standards (Step 1)
- Financial losses are moved to Property, Plant and
Equipment). IMPACT
3. Approval by the CFO (or designee) - Financial losses
of the write-off of all unused, - Fraud
mothballed and idle assets.
• Assets are properly classified. • The person responsible for Construction • Regular physical inventories of assets are identified. Material differences are
Refer to LHARP 3.1.1.2.4 Property, Plant in Progress (CIP) reviews the status of are performed on a rolling basis (at least investigated to identify the root cause and
and equipment, 4.04 Capitalization, all Construction in Progress to check once every three years) and differences in any adjustments needed are approved by
Accounting and Valuation of Assets and whether assets are ready for use. Based floor to list and list to floor comparisons the CFO then recorded.
4.02 Accounting for Leases. (Step 1) on this review, finance staff responsible
for Property, Plant and Equipment (PPE)
• Depreciation schedules required for reclassifies Construction in Progress to
different purposes are maintained. fixed assets and initiates depreciation
Refer to LHARP 3.2.3.5 Ordinary within 30 days of the recorded actual
depreciation and amortization and finish date. Any journal entries made are
4.4.4 Useful Lives of Property, Plant and reviewed to ensure proper classification
Equipment. (Step 1) and approved. (Step 2)
• For mineral reserves, refer to LHARP • Once assets are identified as unused,
3.1.1.2.4 (section 3 Land and Mineral mothballed or idle, the depreciation and
Reserves). (Step 1) the assumptions should be supported by
• Capitalization of the expenditure and adequate documentation and properly
the timely initiation of depreciation are approved by the CFO. Unused, mothballed
reviewed and approved by the appropriate and idle assets that have been written-off
Finance person. Journal entries, if needed, are supported by adequate documentation
have attached the supporting calculation and are approved by the CFO.
and are signed off by the the appropriate Refer to LHARP G 002-13 Mothballing
Finance person. (Step 1) 2013 in section 3.1.1.2.4. (section 2.10 Idle
Assets). (Step 3)
Revenue
20 Management of customer
REVENUE
and material master data

Ensure only authorized personnel • Before adding a new customer in countries immediately for investigation. Corrective
can create, modify and delete 1. Countries identify if there is a need designated as having a sanctions risk actions are documented and tracked. All
customer and material master data. for screening for any new customer (see Legal & Compliance intranet portal/ exceptions are closed within the locally
sanctions), obtain a sanctions screen defined timeframe. As minimum, in SAP
to validate they are not designated
(or exemption) from local or regional the following fields for customer master
as having a sanctions risks. When compliance and/or Sanctions Board data should be considered as critical:
RISK
required, a sanctions screening is Approval, when required. Sanctioned Customer name, Value Added Tax (VAT),
- Transaction with sanctioned parties
(Step 1) performed and documented locally. entities or individuals cannot be added to Bank details, reconciliation account,
- Failure in customer master data 2. Changes to master data are based on the customer master data. There should be account assignment group, payment
creation or maintenance (Step 2, 3, 4) an ongoing sanctions screening. (Step 1) terms, tolerance group and for material
approved requests and performed by master data: account assignment group,
IMPACT an authorized user only. Quarterly • The addition of a new customer or material valuation class, price control. Other fields
- Reputational damages review and sign-off by the manager and subsequent changes require approval can be added locally above the minimum
- Financial losses responsible for changes to master based on a predefined approval process or (Step 2)
framework with appropriate supporting
- Fraud data for a minimum 25 random
documentation. A check is performed to • Customer records should be reviewed on
samples to ensure such changes confirm that all required information is an annual basis for activity and any record
were based on approved requests completed. (Step 2) with no activity for a long period (e.g. 18
and performed by an authorized months) should be deactivated. (Step 3)
user. • Quarterly, a master data change for report
is run of all creations, modifications and • Changes to customer and material
3. Annually extract a list of inactive deletions to ensure that all the changes master data directly in SAP should only be
customers and ensure they are were duly approved and performed by performed by SCs.(SAP only and whenever
blocked / deactivated. Exceptions, if authorized users. If any exceptions are possible) (Step 4)
any, are documented and approved found, they are documented and reported
by the responsible, identified locally.
4. Quarterly verification and sign-
off by the responsible manager to
ensure only users from Master Data
Management function have access
to change customer and material
master data.
21 Price
22 Control of customer
REVENUE
management credit limits

Prevent unauthorized changes to Grant prior authorization for
prices, discounts or rebates. 1. Approval per the Delegation of customers exceeding their credit 1. P
rior to shipment, ensure there is
authority of standard prices, discounts limit. an automated or manual check to
and rebates, price changes and prevent shipment/ delivery to cus-
RISK
exceptions to standard discounts or tomers exceeding credit limit (credit
- Lack of commercial strategy and RISK
pricing policy (Step 1) rebates are reviewed and documented. block). Approval as per the local Del-
- Unauthorized commercial
- Unauthorized commercial 2. Quarterly verification and sign-off by commitments and conditions (Step 1) egation of authority is required to
commitments and conditions the responsible manager to ensure - Poor credit and risk management change customer credit limit.
(Step 1, 2, 3) only users from commercial function as process resulting in increased bad
IMPACT per Delegation of authority / approved debt (Step 1)
- Errors in financials Business Service Center users have IMPACT
- Financial losses access to change pricing data. - Financial losses
- Fraud - Fraud
3. Quarterly pricing master data
change report (including pricing
condition modifications) is reviewed
and signed-off by the responsible REQUIREMENTS
manager. Unauthorized change to • Orders exceeding a customer’s credit limit • In case the sale is covered by a Letter of
the master data is investigated and are managed and approved according credit or a bank guarantees received : All
corrective actions taken. to an appropriate procedure and local letters of credit/guarantees are supported
Delegation of authority (DoA). by adequate documentation and any
discrepancy is explained. All letters of
REQUIREMENTS • No shipments are allowed when customers credit/guarantees are issued/confirmed
exceed their credit limit until: by a first class bank accepted by the
• All price determination processes are compliance. No backdating of discounts • An increased credit limit has been properly LafargeHolcim Group before the release of
defined in a written pricing policy and and rebates schemes allowed. (Step 1) approved by delegation of authority and the goods/services.
formalized in sales contracts and/or sales updated in the system.
orders, compliant with legal requirements • Exceptions to standard discounts/rebates • Credit line to a single customer to be
as well as fair competition and anti-bribery are specified in accordance with the • The individual order is released following a approved in accordance with the Group
and corruption laws and regulations. A company’s policy and are authorized by documented effective approval process to Delegated Authorities (GDA). In case the
price list of all products and services are the designated approver. (Step 1) avoid unnecessary disruption. sale is covered by a security delivered by a
set by pricing, sales and marketing, taking third party (letter of credit, stand by letter
• Price changes are properly approved, • All invoices, deliveries, credit notes and of credit or a first demand bank guarantee)
into account different pricing aspects accurately reflected in the system and
as per pricing policy, including other orders are computed to calculate the the amount secured shall be deducted
exception reports are leveraged and customer balance and to compare it from the risk exposure only if the security
providers (e.g. transporters, applicators). reviewed before the sale. Corrective actions
A complete list, including effective dates, against their credit limit. is on first demand (confirmed LC/stand by
are duly closed within the process of the LC/first demand guarantee,...) and issued
is communicated to the team responsible company’s policy and documented. (Step 2) • Any practice of bypassing a hold on
for updating the list in the system. No by a first class bank accepted by Group
customer shipments (manual shipment, Treasury . Only in this case, the credit limit/
backdating of effective prices is allowed. • All employees must comply with the fictive cash customer account, etc.) are
(Step 1) line will be submitted for approval based
Commercial Documentation Directive to restricted and tracked by exception on the net risk exposure after deduction of
ensure all pricing decisions, competitor reports. Corrective actions are duly closed
• Standard discount and rebate structures the security.
contacts and sources of market within the process of company’s policy and
are defined for different categories of information are properly documented
customers. Each discount or rebate documented.
(MCS 02)
type is documented in the company’s
policy with specific objectives, clear rules • Pricing master data change report
of application that were approved by available at each region/country is
management and supported by local legal/ reviewed. (Step 3)
23 Matching of sales orders,
24 Accounts receivable
REVENUE
shipments and invoices valuation

Match and reconcile sales orders, Ensure receivable balances are
shipments and invoices to ensure 1. Monthly reconciliation of quantities reviewed and provisions are 1. Quarterly review and approval by
proper revenue recognition. and correction of any differences recorded on a quarterly basis. the designated finance person of the
identified in the matching of sales provision for bad debt.
order, invoices and shipments,
RISK RISK 2. At minimum, quarterly monitoring
including deviations from
- Inefficiency and errors in the sales - Unauthorized or erroneous sales by the Credit Committee of the
weighbridge tolerances, to ensure
invoicing process (Step 1, 3, 4) orders and / or shipments (Step 1, 2) doubtful account balances.
that all deliveries are invoiced.
- Unauthorized commercial - Poor credit and risk management
3. Recording of write-off approved by
commitments and conditions 2. Weekly reconciliation by the billing process resulting in increased bad
the Credit Committee according to
(Step 1, 2, 3, 4) team of unbilled items and resolution debt (Step 1, 2, 3)
- Inaccurate or fraudulent revenue - Inaccurate or fraudulent revenue the Delegation of authority (DoA).
within a week.
recognition (Step 1, 2, 3, 4) recognition (Step 1, 2, 3)
3. Monthly verification and approval by
IMPACT finance of any sales accrual needed at IMPACT
- Errors in financials month-end based on unbilled items. - Errors in financials
- Financial losses - Financial losses
- Fraud 4. Open sales orders with a planned - Fraud
delivery date in the past (not shipped/
invoiced) are reviewed monthly and
resolved on a timely basis
• All sales orders, shipments and invoices are discounts and taxes match the approved • The bad-debt provision must consider the • Review over specific Accounts Receivables
recorded in the applications. (Step 1) parameters in the system from sales order risk of debt recoverability at the end of the which indicates uncollectibility is
• There is a pre-defined tolerance threshold to invoice. (Step 1) reporting period every quarter (Step 1,2): considered for write-off. Uncollectibility
at the weighbridge for dispatched goods. • SAP: All orders shall be processed via SD - The assessment of the bad debt provision is evidenced by significant difficulty of
at least annually, weighbridges and including any discounts and rebates, i.e. no is estimated based on the aging balances, debtor, a high probability of bankruptcy
measurement equipment are re-calibrated direct FI bookings. (Step 1) historical experience and current or other situations as defined in
as per local regulations. (Step 1) situation (e.g. litigation, bankruptcy) of LafargeHolcim Accounting and Reporting
• There is, at least at month end, a follow-up Principles (LHARP) (Step 3).
• Accuracy of amounts invoiced are checked on unbilled items. The report of unbilled the debtor
when manually calculated, or are accurately items is reviewed weekly by the billing team - Any deviation is clearly documented and -W
rite-offs are determined by the Credit
calculated by the application system and all the unbilled items are billed within justifiable by the Country Committee on the basis of appropriate
using standard programmed algorithms one week from the date they first appear supporting documents
- Provisions are reviewed and approved
and established terms of sales (unit price, in the unbilled report and within the same by the appropriate Country finance -W
rite-offs for amount above a locally
discount and rebates rate). (Step 1) reporting month as the delivery. Every person and recorded by the designated defined thresholds approved by the
• Invoices/billing (e.g. quantities, price, month end, the sales manager receives the department. Country CFO.
discount, rebates, product, customer information, documenting any follow-up - I f receivables are collected after being
action. Finance verifies and approves the - The Credit Committee meetings are held
data) are matched with sales orders, regularly(at least quarterly) to monitor the written off, the amounts collected should
quantities shipped & customer master need for a possible adjustment entry (e.g. be directly credited on the company bank
sales accrual) at the end of the month, doubtful accounts receivable balances.
file information. An automated match is account and the information provided to
performed between the invoice and order based on the unbilled items. (Step 2, 3) Accounts Receivable department.
(including all necessary data). (Step 1) • Rules for closure of open sales orders with
• Any differences are investigated and delivery date in the past must be defined
related adjustments are approved and locally in accordance to the sales terms
documented (e.g. returns, redispatch, and conditions, but should be resolved at a
interco mismatch, cut-off). In addition, any minimum half yearly. (Step 4)
Human
Resources
25 Execution of onboarding,
HUMAN RESOURCES
offboarding and transfers of
workers
Ensure onboarding, offboarding • Employment contracts or hiring • User termination process is agreed
and worker transfer processes 1. Signing, by the employee and the documentation exist for all employees between the Human Resources /Business
exist and cover payroll changes, company, of employment contracts and are signed, as per Group Delegated and the IT function - Human Resources/
or hiring documentation for all Authority (GDA) or Delegation of Authority business notifies IT on or before the last
recovery of assets, system access (DoA). Employment contracts or hiring working day of the user who is leaving the
employees, including a Compliance
termination and comply with documentation with all new employees company (e.g. end of contract, resigned,
Reference Check for Senior Leaders refer to the Code of Business Conduct terminated etc.) requesting termination of
legal regulations
Group or Country Executive (CoBC) and indicate that disciplinary access from all IT systems
Committee positions. measures can be taken on the ground
of this document in case of a breach. • Notification is received back from IT in
RISK 2. Notification to IT by Human a timely manner confirming that all IT
- Lack or ineffective HR management For all new appointments to a Senior
Resources or the business to system access is terminated (within 5
process (for example onboard, Leaders Group (SLG) or Country Executive
request termination of access Committee position, the appointing working days from the requested date)
offboarding, worker transfer process)
from all systems before the last manager must request a Compliance
(Step 1, 2, 3) • All employee departures follow a strict
working day of user leaving the Reference Check from the relevant Region written procedure ensuring that all legal
IMPACT company. Confirmation by the Compliance Officer (or delegate) and for requirements have been respected (in
- Reputational damages Human Resources that all assets Group level appointments from Group particular in case of lay-off) and all payroll
- Errors in financials were recovered from terminated Compliance. (Step 1) related payments have been made to the
- Financial losses
- Fraud
employees and employee system • A process is in place for Human Resources employee, once all company assets have
was deactivated prior to final payroll (HR) administration to be informed of all been retrieved. (Step 2)
payments. moves of both employees and temporary • Headcount by department and by site is
workers paid through payroll in a timely verified monthly by managers for accuracy,
3. Monthly verification by Human manner, including on-boarding, off-
Resources that the headcount report ensuring that all employees on the payroll
boarding and changes of position. (Step 2) exist and are still employed (employees
is accurate (only active employees,
• For people changing positions or leaving on leave are coded as such), the pay is
proper coding and classification). coded to the appropriate department and
the company, there is a process to monitor
the recovery of all company assets by site and the classification of employee,
notifying relevant departments of the subcontractor and third party personnel is
change and obtaining confirmation that correct. Any discrepancies found should be
the assets were recovered. This includes a resolved in a timely manner. (Step 3)
confirmation from the IT Manager that the Refer to LHARP 6.11.1 for guidance on
employee access is deactivated. (Step 2) operational indicators relating to personnel
(FTE) and to Compliance Negative
Reference Check procedure
26 Payroll
27 Compliance with payroll
HUMAN RESOURCES
and local labor laws

Review, validate and reconcile Ensure payroll and employment
payroll before and after 1. Monthly payroll approval by Payroll practices are compliant with 1. Annual review and assessment
processing every month. Team for reasonableness and data local labor laws. Work permits by Human Resources of key
accuracy prior to processing. and work contracts are in place, payroll, employment practices,
employee liability and laws to
RISK 2. Reconciliation by Payroll Team of checked, and up-to-date at all
ensure compliance. In case of non
- Non compliance with local HR laws total payments to the payroll journal times. compliance, notification to finance,
and regulations (Step 1, 2, 3) after payroll processing.
- Error in payroll process or
legal and compliance to assess
3. Half yearly approval by the cost any financial impact / provisions /
unauthorized employee benefit RISK
(Step 1, 2, 3) center responsible that the - Non-compliance with HR laws and disclosure.
employee being charged to their regulations (Step 1, 2)
IMPACT 2. Human Resources master data /
department are correct. - Error in payroll process or
- Errors in financials employee files are timely updated in
unauthorized employee benefit
- Financial losses (Step 1, 2, 3) the event of a change.
3. Quarterly review, follow up and closure
IMPACT
REQUIREMENTS - Reputational damages
of open compliance actions related to
- Financial losses local labor laws and regulations.
• Approval prior to processing payroll: - Analytical review comparing one month
- Balancing routine control: For manual to another justifying variance (if any)
is performed before bank transfer
and mass uploading imports, the payroll REQUIREMENTS
manager should perform data accuracy (analytical review covers payroll exception
controls (e.g. verify that the input of total reports to identify unusual amounts e.g.
• The Human Resources (HR) department • Human Resources / employee master
hours worked received from the manager negative value check, zero value check,
should have an updated information / data is maintained up to date. Changes
matches with the total hours worked significant increase between two months)
checklist (of applicable local labor laws and are timely updated in the employee files /
indicated in the payroll system; verify that •R
econciliation after processing payroll regulation). Annual assessment should master data upon notification. (Step 2)
the total amount of bonus received from (Step 2): be performed to ensure compliance. Any
Human Resources matches with the total identified gaps are reported, and followed • Actions related to any non compliance
amount in the payroll system). In case of - For each payroll, the total payment are recorded and followed up quarterly to
up for timely action. In case of non-
Payroll system integration with any other issued (treasury account) is reconciled ensure they are timely closed. (Step 3)
compliance with the local regulation, a risk
system, interface should ensure data with the payroll journal in order to check
analysis is performed and communicated
approval from the source. that amount paid to employees matches
to the Finance, Legal and Compliance
with the amount calculated by payroll
- When bonus or any other payout is departments to determine the potential
department
processed (with or without payroll), needs for provisions, disclosures or actions
secondary approval should be performed •A
t least twice a year, cost centre to achieve compliance. (Step 1)
to ensure accuracy of payout, both at responsible must validate that the
individual and total amount to be paid. employee cost being charged to their
department are correct. (Step 3)
28 Employee pension
HUMAN RESOURCES
and benefit plans

Ensure employee pensions and The Group Pension & Benefits directive • Reporting should be updated in AON tool
post-employment benefit plans 1. Any new plans, amendment or defines the scope and objective together - GI as per the instructions for the relevant
are defined according to Group de-risking project of current with the rules for managing the plans. plans. The local actuary should upload
Group Accounting, Reporting, Consolidation the information related to benefit plans
policies and local labor laws with plans must be communicated by
and Controlling (ARC) issues detailed together with actuarial report. The CFO
proper calculation and recording. the sponsor (local company) to instructions for reporting of post- (or designee) should review and sign-off
Pension and Benefits Governance employment defined benefits plan. the results and accounting entries. CFO (or
Team and approved as per Group (Step 1,2) designee) should have control over inputs
RISK Delegated Authority following (mainly employee data), and then outputs
- Error in payroll process or • Section 4.1 of the directive sets the rules (analytic review of the main parameter
recommendation of the Pension and
unauthorized employee benefit for design of pension plans and other post- and final results) in addition to the control
Benefits Governance Team. Annually, employment benefits which should be in
(Step 1, 2) performed over the assets valuation.
Pensions and Benefits team to accordance with the local regulations and
- Pension fund insufficiently
capitalized or mismanaged or with update the list of all pensions and market practices. • The Group oversees the management of
insufficient transparency regarding post-employment benefit plans and its pension plans through the Pension and
• Approval rules to be followed for defined in Benefits Governance Team (PBGT). This
future obligations (Step 1, 2) validate with Group Pension and
section 4 for each activity (e.g. closing and interdisciplinary team including finance,
Benefits Governance Team that they freezing pension plans, de-risking liability
IMPACT human resources and legal specialists acts
are managed in line with the Group management, de-risking investment
- Errors in financials as a center of expertise in all issues relating
- Financial losses Pension & Benefits Directives. strategy, employer funding contribution to pension and other post employment
etc.)
2. Twice per year, CFO (or designee) benefits and makes recommendations to
should ensure that pensions and • Reporting for post-employment defined Group management. The Sponsor (local
post-employment benefit plans benefit plans should follow the process as company) has to inform the Pension and
per instructions from Group Accounting, Benefits Governance Team of any project
are correctly valued within the of new plans or amendment of current
due date communicated in the Reporting, Consolidation and Controlling.
Actuarial methods and assumptions plans and request approval as per Group
Group Accounting, Reporting, Delegated Authorities (GDA).
to be used should be aligned with the
Consolidation and Controlling instructions Refer to LHARP section 4.5.2.5 and Group
pension instructions. CFO (or
Pension and Benefits Directive
designee) should provide a sign-off
for the actuarial results, at least
annually, in the Group actuary tool
(GI tool) and ensure that inputs
and outputs are correct and proper
accounting entries are booked. A
reconciliation of the actuarial data is
performed by CFO (or designee), with
the support of the Group actuary,
between the Group actuary tool and
the consolidation tool.
Expenditure
29 Management of supplier
EXPENDITURE
master data

Ensure only authorized personnel • A supplier master data management or statement and other acceptable
create, modify and delete 1. Changes to supplier master data are process that defines roles, responsibilities documentation for change request are
financially relevant vendor data. performed by an authorized user and rules for vendor data management defined by the Service Centers. A check
and based on an approved request. is in place and reviewed when required. is performed to confirm that all required
Quarterly review and sign-off by the (Step 1, 3) information is completed. Quarterly, a
RISK master data change report is run of all
manager responsible for changes to • Each entity should formally define its
- Failure in vendor masterfile creations, modifications and deletions
supplier master data for a minimum mandatory and critical fields in SAP/Local to ensure that all the transactions were
maintenance: error, fraud, duplicate,
25 random samples to ensure such ERP, in line with the legal and business performed by authorized users. (Step 1)
etc. (Step 1, 2, 3) requirements. The list should include
- Unauthorized access, disclosure, changes were based on approved
requests and performed by an as minimum legal name, bank details, • If any exceptions are found, they are
modification, damage or loss of data incoterms, reconciliation account (General documented and reported immediately
(Step 1, 3) authorized user. Ledger) and control data (Good Receipt- for investigation. Corrective action is
IMPACT 2. Annually extract a list of inactive based invoice verification).Other fields documented and tracked. All exceptions
- Financial losses suppliers and ensure they are can be locally added above the minimum. are closed in a timely manner (locally
- Fraud blocked / deactivated. Exceptions, if (Step 1) defined) (Step 1)
any, are documented and approved by • The addition of a new supplier or bank •S
upplier records are to be reviewed on an
the responsible identified locally. account and subsequent changes require annual basis for activity; any record with no
3. Quarterly verification and sign-off by appropriate approval based on supporting activity for a long period (e.g. 18 months)
documentation. The following supporting are to be deactivated or blocked for
the responsible manager to ensure documentation are accepted in addition of payment and purchase. Suppliers identified
only users from MDM function have the supplier request for change: supported as part of the procurement supplier
access to change supplier master by a Bank confirmation one of the following: reduction strategies are to be deactivated
data. RIB; IBAN; bank letter of confirmation and flagged for deletion. (Step 2)
30 Supplier
EXPENDITURE
qualification

Screen and qualify suppliers • There are clear rules based on purchasing • Supplier qualification should include the
before their addition to the 1. Screening of potential suppliers categories to identify vendors that are following: Health and Safety, Human
supplier master data and by Procurement (or designee) required to go through a qualification Rights and Labor, Environment and
based on the criteria required by process. Qualification is performed in Bribery and Corruption criteria, as
manage supplier performance. line with the Supplier Code of Conduct, defined in the Suppliers Sustainability
Procurement, Sustainability, and Data Universal Numbering System Management Standard; Commercial
Compliance including sanctions (DUNS) requirements, and certification (financial health of the supplier); Technical
RISK and Third Party Due Diligence, such as International Organization for (goods and services as defined by category
- Ineffective or unethical vendor must occur prior to entering into a Standardization (ISOs). (Step 1) teams) and on-going performance
selection process (incl. TPDD process)
transaction or adding a supplier in evaluation. (Step 1,2)
(Step 1, 2) • All service suppliers that represent the
- Transaction with sanctioned parties the supplier master data or approved company to a government agency, official or • In case of poor performing suppliers, the
(Step 1, 3) supplier list. owned-enterprise to be screened compliant Category Manager agrees with the supplier
2. Review of supplier performance with the TPDD directive before inclusion in on a corrective action plan; if this corrective
IMPACT the supplier master data. (Step 1) action plan is not followed or not efficient,
- Reputational damages by Procurement must occur for
the supplier is blacklisted. (Step 2)
- Financial losses critical and strategic critical criteria • Before adding a new supplier in countries
- Fraud (including suppliers with high ESG designated as having a sanctions risk • During the ongoing qualifications,
impact) with suppliers not meeting (see Legal & Compliance intranet portal/ supplier performance is periodically
the requirements being flagged sanctions), obtain a sanctions screen assessed for at least critical and strategic
as disqualified until action plans (or exemption) from local or regional criteria (including suppliers with high
compliance. Sanctioned entities or Environmental, social, and governance
are completed, or the supplier is
individuals cannot be added to the supplier (ESG) impact) and any supplier that does
blacklisted if there are ongoing issues. master data. (Step 1) not meet the requirements must be
3. Supplier qualification must be flagged as disqualified and consequent
updated at least on annual basis management applied (ex. replacement).
(Step 2,3)
for critical and strategic suppliers
(including suppliers with high ESG
impact)
31 Three-way match, two-way match
EXPENDITURE
and direct vendor invoices

Reconcile purchase orders, Purchases using purchase orders • An exception report (exception to 3-way
receipts and invoices (3-way 1. Approval in the system by the (Step 1, 2): match) is distributed regularly for
match) or approve 2-way match designated approver according to verification and resolution. Only when
• Purchasing instruments (purchase request, the exceptions are cleared and properly
or vendor direct invoices to clear the Delegation of authority of all purchase orders, framework orders or explained can the payment be made. If
invoices for payment. purchase requisitions or purchase contracts) are approved according to discrepancies exceed a defined threshold,
orders (depending on system design). country, regional and Group delegations payment requires approval as per
of authority (involving legal and financial Delegation of Authority. (Step 2)
2. Verification and correction of
RISK departments when required) prior to
exceptions by the designated entering into a commitment with the Purchases using vendor direct invoices
- Fraudulent or incorrect purchase
responsible (business or supplier. (Step 1) (if applicable) with locally defined criteria
order (Step 1, 2, 3)
- Lack of control (quality and quantity) procurement) to the three-way (Step 2,3,4):
match report and approval • Supplier invoices are only cleared for
of goods and services received payment after the system automatically • Any vendor direct invoices (SAP FI invoices)
(Step 3) according to the Delegation of
matches the purchase order, receipts which qualify for payment without a PO
authority if the exception is above and the supplier invoice (3-way match) or are entered into the system and are sent
IMPACT
the locally defined threshold. purchase order and an approved invoice into a workflow immediately for review
- Financial losses 3. Approval by the requisitioner or (2-way match). (Step 1) and approval according to Delegation of
- Fraud authority (DoA). Vendor direct invoices
other designated approver per the • Discrepancies between the invoice, are discouraged and must be limited.
Delegation of authority of any 2-way purchase order (PO) and receipt are Once the responsible employee reviews
match invoices to confirm that the formally identified and the system blocks the invoice to confirm the amount, that
amount and workflow are correct the payment process if the discrepancy the goods or services were received
and goods or services are received. exceeds the locally defined threshold. and approved, the invoice is cleared for
(Defined thresholds must be documented payment.
4. Approval by the designated approver & approved by local Delegation of
per the Delegation of authority in authority (DoA)). (Step 2)
the system of any vendor direct
invoices to confirm that the amount
and workflow are correct and goods
or services are received.
32 Payment
EXPENDITURE
processing

Approve payments/cash • Payments / cash disbursements are • All business trips require appropriate
disbursements in accordance 1. Approval according to the local approved according to the local and Group authorization and controls, to be adhered by
with local and Group Treasury Delegation of authority of all Treasury Directive, Group Delegated both the line managers and employees. The
Authorities and local Delegation of Authority local travel policies shall include an approval
Policy. payments and cash disbursements
prior to actual payment. Cash disbursements system and process in accordance with
prior to payment. are generally discouraged. Any cash Travel and Events directive.(Step 1)
2. Expenditures falling in the Gift, disbursement should be as per locally
RISK defined rules and thresholds. (Step 1) • Incorrect payments: A process must be in
- Unauthorised or erroneous processing Hospitalities, Strategic Social place to prevent incorrect payments (e.g.
of supplier payments (Step 1, 2, 3) Investments, Sponsorship and • Payments related to transactions that did not use of a report to check duplicate payments,
- Corruption and bribery (Step 1, 2) Donations, entertainment and go through the purchase order (PO) or Direct stamping invoices as paid when the payment
- Transaction with sanctioned parties travel and expense categories are Invoice (FI) process are authorized on the is issued or other automatic system control).
(Step 1) identified through the accounting basis of appropriate supporting documents (Step 1)
- Money Laundering (Step 1) system. Payment carried out and according to delegation of authority
prior to actual payment. (Step 1) • Payments made as marketing gifts,
IMPACT in contradiction to the Gifts, hospitalities, entertainments and travels for
- Reputational damages Hospitality, Entertainment and • The payment process ensures that distinct third parties above the threshold defined
- Errors in financials Travel or Sponsorship and Donations persons are in charge of the following tasks: by countries, and for public officials, have
- Financial losses Directives are rejected. 1) approval for payment (persons signing the been approved according to rules defined in
- Fraud check or issuing payment by bank transfer) Gifts, Hospitality, Entertainment and Travel
3. Monthly review and approval by and 2) accounting (preparation of bank (GHET) Directive. No reimbursement for cash
the designated finance person of journal entries). Disbursements should be payments made as GHET is made. (Step 1,2)
the accounts payable subledger processed by a member of staff independent
• In connection with the month-end closing,
accounts and the aging report to from the receipt or matching of invoice
process. (Step 1) the accounts payable subledger is reviewed
examine unusual balances and take to examine unusual balances (e.g. old
corrective actions. • Payments to suppliers that represent the balance, debit amount, incorrect currency
company to government agencies, officials rate etc.). Debit balances within the Accounts
or owned-enterprises have been approved Payable (A/P) subledger are reviewed and
under the Third Party Due Diligence Directive justification is checked for (e.g. credit notes,
before payment can be made. (Step 1) advance payments). The follow-up actions
are described and are monitored in the
• Sponsorship & Donation payments or any following month.(Step 3)
payment made directly or indirectly to public
official without expecting any consideration Refer to LHARP 3.2.1.2.25 Other Cost Center
in return must be reviewed by Compliance Expenses
and authorized according to local Delegation
of Authority (DoA) and Group Delegated
Authority (GDA). (Step 1)
33 Accrual for expenditures
EXPENDITURE
not invoiced

Ensure that all accruals for • There should be a process to review open GR/IR ageing should also be reviewed to
expenditures are properly 1. All goods receipts (GR) and services purchase orders to detect unrecorded ensure items are timely cleared. (Step 2)
recorded in financial statements receipt (SR) should be recorded goods and services received. Open
purchase orders for which the delivery • For direct purchases (FI Invoice), the
in the correct period. before the month end by the responsible department should inform the
date has passed should be monitored and
responsible locations. Purchasing accounting department before month-
purchase orders with open quantities that
manager (or designated) should are no longer needed are closed. (Step 1) end for the invoice not received / recorded.
RISK verify that there are no unrecorded The accounting department reviews the
- Inaccurate or fraudulent recording of goods receipts or service receipt at • All goods receipts (meeting all invoices that are missing to determine
expenditure and accruals the month end for the goods and specifications e.g. quantity, quality) which expenses should be accrued for
(Step 1, 2, 3) and the corresponding vendor invoices proper cut-off. The completeness of
services received as per the Purchase
should be timely recorded in the system. the accrual of rendered services and
IMPACT Order. If the goods are received but the invoice received goods is then validated through
2. Goods Receipt and Invoice Receipt is missing, an accrual is created in the a comparison of costs to budget, where
account (or equivalent system application. The accrual is reviewed for applicable, and by reviewing open POs
account) should be cleared monthly reasonableness on a monthly basis by the or service orders (if complete review is
Purchasing Manager. (Step 1) not possible, certain thresholds based on
(ongoing) before month end closing budget can be defined locally). (Step 3)
by the designated person (business • In SAP GR IR clearing account is an
or procurement) intermediary clearing account for goods • Follow-up: Old accrual entries which were
and invoices in transit. It represents Goods not offset by the system are followed up
3. Accruals are booked monthly Receipt and Invoice Receipt Account. It’s monthly and cleared by the Purchasing
by the accounting function for a balance sheet account therefore will Manager. Any adjustment related to
all purchases and expenses with have a balance at the end of the period. current month accrual is posted by the
pending invoices. Any adjustment GR/IR differences should be reconciled by Accounting personnel and reviewed by the
to the accruals needs to be approved identifying the difference in the account appropriate Financial responsible. (Step 3)
by the appropriate Financial (missing corresponding invoice or GR). The
responsible.
Inventory
34 Physical stock take of spare
INVENTORY
parts and materials and volume
reconciliations
Perform physical stock take of Regular physical stock takes of spare parts -S
tocktaking process identifies items that
spare parts at least annually 1. Physical verification of spare parts is and materials are organized by the plant exist but are not recorded and items that
and materials at least monthly conducted annually (or by rotation team with participation of the finance are recorded but do not exist (i.e. floor to
team and performed according to defined listing and listing to floor).
to ensure that the records throughout the year) with counts
procedures. -O
bsolete items are identified during the
reflect the correct descriptions, documented and discrepancy, if any,
approved and adjusted according to stocktaking.
quantities, and values. SPARE PARTS (Step 1)
defined requirements. 3. Follow-up on stocktaking results
1. Preparation of physical inventory
2. Physical verification of materials is - The plant procedure for stock-taking which
-A
double count is performed in case of
RISK conducted monthly with appropriate quantity discrepancies for above 5%
- Inaccurate or fraudulent recording describes scope, objective, resources and
measuring equipments and method discrepancy per material (specify by
and tracking of inventory (Step 1, 2, timeline is available and applied.
business line)
3, 4)- Inappropriate physical storage
by stock owners with counts - Capitalized spare parts are included in the
documented and discrepancy, - Codification, description and label of stocks
protection and lack of organization scope.
if any, approved and adjusted are checked and updated if needed.
for inventories (Step 1, 2, 3, 4) - Parts with zero /minimum values are
- Inefficient spare parts management according to defined requirements. -S
tock taking results are reconciled with
included in the scope (e.g. obsolete parts
(Step 1, 2, 3, 4) Any discrepancy over 5% for semi- the data from the inventory ledger by
written-off but still in the plant)
- Unreliable production data and independent people (not those in charge
finished and finished goods need to - Off-site inventories are included while
reconciliation process (Step 3) of inventory management).
be investigated and documented consigned stock (customer and supplier)
-T
his reconciliation is reviewed by the
IMPACT with justifications. Finance are excluded.
warehouse manager and the finance
- Errors in financials function participates in the physical - The stocktake planning is validated by the controller.
- Financial losses verification process as observer at site manager and communicated to all
- Fraud -A
fter reconciliation and approval,
least half-yearly. stakeholders.
adjustment entries are recorded in ledgers.
3. An end-of-month production - Count team is composed of maintenance
-D
iscrepancies are analyzed to identify their
data reconciliation is performed experts to help identify the status of parts.
sources and implement corrective actions.
by the Production manager (or - Movement of parts are stopped or
delegated person) as per the defined controlled during the stocktaking 4. I n case full scope stocktake of spare
(reception, issue, return, etc.). parts is not performed at the year end,
requirements. Finance/controlling monthly or quarterly cycle counts are
verifies the stock reconciliation 2. Stocktake organized and ensure that all spare parts
process locally performed in the - Stocktaking is made under adequate were included in the yearly stocktake
plant and when necessary, applies supervision. process.
adjustments to the financial - Count sheets do not show the quantity
statements according to defined recorded in the system (blind count).
Delegation of authority.
4. Annual independent full stock take
of materials (measurements made by
dedicated and skillful team of non-
stock owner, e.g. 3rd party service,
other functions within the company)
is performed with differences
identified, approved and adjusted.
34 Physical stock take of spare
parts and materials and volume
reconciliations
MATERIALS including semi-finished - Make all the bulk material heaps to regular MONTHLY STOCK RECONCILIATION (Step 3) -D
ead stock. For all products, the total
and finished goods (Step 2, 4) geometrical shapes as much as possible. - An end-of-month production data stock taken into account in the production
- Bulk density in loose and compact form of reconciliation is performed by the data report includes the live stock (movable
1. Preparation of physical inventory all bulk materials should be measured and Production manager (or delegated person). automatically with permanent equipment)
- There is a layout map to show the scope of agreed. Each stock loose or compacted will and the dead stock (non movable
- Stock reconciliation is done between all semi- automatically). The value of the dead stock
the stock take. Off-site stocks are included. use the corresponding density. finished / finished goods stock measured is agreed upon between the production
- The stock take planning is validated by the - Prior to the verification, production values, products delivered, materials received, manager and the controller.
plant manager and communicated to all manager and mining engineer should and production / consumption figures for
stakeholders. certify the geometrical shape and the zero the current month. Reconciliations should be -Z
ero & Full stock. For bulk products, it
levels of all the major heaps. performed on a dry basis for semi-finished is recommended to reach at least once a
- Movement of goods are stopped or year a physical zero stock level in order
controlled during the stocktaking - For all bulk materials, the total stock taken and finished goods, on a wet basis for the
other materials (raw materials). to perform a consistency check between
(reception, issue, return, etc). into account should include the ‘live’ and theoretical stock and physical stock. When
- Date & the time of measurements have to ‘dead’ stocks. - The following parameters cannot be a full-stock or zero-stock level is reached,
be recorded. adjusted and must be considered as fixed: discrepancy between book & physical stock
4. Frequency Semi-finished and finished goods tonnages
- Calculating formula should be established must be adjusted.
- The raw materials & semi finished and (Shipments, deliveries and physical
& declared. finished goods stock take is performed by measures of stocks), total operating hours Roles and responsibilities
- All the measured figures must be Production monthly. At least once per year, for the month for each semi-finished and -L
ab manager is responsible to measure
reconciled from the time & date of the the stock take should be performed by an finished goods manufacturing equipment bulk density, calorific value and moisture
measurements to the end of the month at independent expert (eg. 3rd party surveyor - All material physical quantities from stock content at reception and final usage.
24h00. or other functions when necessary). Third take inventory are cross-checked with -P
roduction and Quarry Managers
party survey is mandatory if 1) there is stock information in the data system by are responsible to measure physical
2. Stock take local legal requirement 2) business has independent people (not those in charge of materials stocks, to propose adjustment
- Stocktaking is made under adequate challenge to ensure adequate physical material stock take). of the difference Physical – SAP/JDE when
supervision. inventory due to lack of skills/tools/internal results are out off the defined limits with
resources. - In case of a discrepancy between the
- Count sheets do not show the quantity measured physical stock and stock corrective and/or preventive actions. Must
recorded in the system. 5. Roles and responsibilities information in the data system for all keep record for traceability.
- Stocktaking process identify materials that - Production (stock owner) is primarily physical stocks and before proceeding -P
lant Managers and Manufacturing
exist but are not recorded and materials responsible for the inventory planning & adjustment of production inputs, reliability Directors (as per local Delegation of
that are recorded but do not exist (i.e. floor organization of the stock take to ensure of the information system, accuracy of authority - DoA) are responsible to
to listing and listing to floor). completeness of stock take locations stock take and output of the manufacturing review and approve production and
- Obsolete items are identified during the as well as to provide competencies, lines for the month must be analyzed first. stock adjustments, and to sign off the
stocktaking. methodology and tools for the stocktake A double count is performed in case of adjustment proposal.
team. Production team performs the stock quantity discrepancies above 5%. -F
inance/controlling is overall responsible
3. Specific matters take and signs the stock take report. - Adjustments proposed by the financial for the compliance and reliability of
- Measuring methods and instruments must - Finance/Controlling role is to ensure controller and production manager and the stock reconciliation process locally
be optimized at the maximum to ensure reliability of the work done. Finance/ other relevant functions (e.g. logistics) performed in the plant and when
the reliability of the measures. Controlling is not necessarily executing the must be validated by the plant manager necessary, applies adjustments to the
- Regular calibration of the dosing stock measurement monthly but must be and other person per local Delegation of financial statements according to defined
equipments and weighing devices an independent observer on the field as authority (DoA). Delegation of authority (DoA).
according to defined schedule. part of the count team at least half yearly. - Discrepancies are analyzed to identify their
sources and implement corrective and
preventive actions. Any discrepancy over
5% for semi-finished and finished goods
need to be investigated and documented
with justifications.
35 Inventory
valuation
IT
Record the proper value of
inventory by identifying and 1. Approval of inventory costing,
providing for obsolete or slow- valuation & provisions according to
moving items. local Delegation of authority (DoA).
2. Half yearly, for hard close events,
approval by CFO (or designee) of
RISK
provisions for obsolescence and
- Inaccurate or fraudulent recording
and tracking of inventory (Step 1, 2)
slow moving parts and write-offs
- Inaccurate or fraudulent closing according to LHARP.
and estimates) (Step 1, 2)
- Inefficient spare parts management
(Step 1, 2)
IMPACT
- Financial losses
- Fraud
REQUIREMENTS
• The valuation of each type of inventory inventories must be restated to actual
is reviewed for consistency with Group cost. Standard cost should be updated
Accounting rules. Inventory costs include at a minimum once per year for external
purchasing costs, conversion costs and audit purposes at Year End (or Hard Close
other costs incurred in bringing the November). (Step 1)
inventories to their present location and
condition (excluding storage costs). (Step 1) • Inventory provisions (obsolescence and
slow moving spare parts) and write-offs
• Purchased products are valued at are estimated according to LafargeHolcim
purchase price less any price deductions Accounting and Reporting Principles
such as trade discounts and rebates. (LHARP), based on appropriate supporting
Expenses directly related to the acquisition documents and applied consistently from
(insurance, import duties, transport and one year to another. They are approved
handling costs etc.) are included in the according to the delegation of authority.
value of the inventory. (Step 1) (Step 1)
• Inventory of own produced finished and • Review for obsolescence for slow moving
intermediate products are valued based on parts and related provisions and write-offs
actual cost of goods produced including are performed for half yearly during hard
depreciation and certain distribution costs close events.(Step 2)
(transport to terminals, warehousing,
bagging, etc.). Standard costing can Refer to: Accounting for value adjustment
be used during the year. At year-end, for different types of inventory,
LHARP 3.1.1.1.6 Inventories
36 Management of access
37 Review of IT user access rights
IT
to IT systems to production IT systems

Management of access to IT IT users have appropriate
systems is in place to prevent 1. Access to the IT systems will only access as per their job role and 1. IT performs a half yearly review of all
unauthorized access, disclosure, be granted, changed or terminated authorization. IT user access rights and permissions
modification, damage or loss of based upon a correctly authorized for accounts within the production
data. access request as per defined systems.
RISK
procedure. - Unauthorized access, disclosure, 2. Actions are proposed (lock, disable,
2. In the case of terminations, upon modification, damage or loss of data remove user accounts) if access
RISK
receipt of notification from HR/ (Step 1, 2, 3) rights are inappropriate. Access
- Unauthorized access, disclosure,
modification, damage or loss of data business, IT to terminate all user IMPACT
changes performed are documented
(Step 1, 2) access in a timely manner (3 working - Operational disruption and appropriately retained.
days for a power user, such as an - Fraud 3. Dormant account reviews are
IMPACT
administrator role, and 5 working performed periodically for all IT
- Fraud
days for a regular user). users (e.g. user not logged-in for
30/60/90 days) and actions taken.
Note: Information Technology (IT) Systems Access review of Business users access to
Note: Information Technology (IT) Systems to a shorter period (e.g. three months).
refers collectively to Business Applications and IT systems is covered under MCS12 and
refers collectively to Business Applications and Expiration may be set up at Google / Active
IT Infrastructure (Operating System, Database, therefore not in the scope of this control
IT Infrastructure (Operating System, Database, Directory level where not supported by the
Network, interfaces) (Step 1, 2 and 3)
Network, interfaces) application.
• This control must cover the review of all • An IT user cannot review their own access.
Granting/Changing Access (Step 1): Termination (Step 2):
Information Technology (IT) function users The review confirms that access is in line
• A formal user access request form should • The scope of this controls starts from the (e.g. OS, DB & Network administrators, with the IT users role and responsibilities.
be filled out for every new or change time Human Resources or Business notifies AD administrators, application support (Step 1)
request to LafargeHolcim information IT a request for termination of user. The team from IT and all other IT users who
systems and the corresponding approver control for business notification to IT is have access to production IT systems).
has to approve it ensuring compliance with under MCS25. IT to revoke access within
segregation of duties (SoD) rules. defined timeline upon Human Resources /
• Human Resources should confirm the business notification
identity of all internal users and the
LafargeHolcim sponsor for external users.
• External User IDs and temporary
LafargeHolcim employees must have a
defined expiration date up to 12 months
for these IDs (renewable). Based on the
type of ID and associated risks the sponsor
may choose to further limit this expiry
38 Security configuration settings
39 Data backup, storage
IT
and batch job management and restoration process

Security configuration settings Data backup, storage
are reviewed to provide 1. O
nce a year, the security and restoration process is 1. Backup is performed as per the
reasonable technical assurance configuration settings of IT systems implemented to minimize loss schedule (daily, weekly, monthly
to prevent any unauthorized are reviewed to verify whether of data etc.). Backup logs are monitored
access to IT systems. Batch jobs the settings are appropriate routinely to verify success /
and enforced according to the completeness. Errors, if any, are
are monitored to ensure data RISK
defined security requirements for reported as incidents and resolved.
integrity applications, Operating Systems
- Business disruption due to IT/OT
unavailability (Step 1, 2, 3) 2. When external media is used, backup
and Database. Access to identified is stored offsite and media labeling
RISK critical transactions is restricted to IMPACT
procedures are defined and followed.
users as needed. - Operational disruption
- Successful cyber attack (IT/OT) (Step 1) When online data replication (e.g.
- Financial loss
- Data leakage of sensitive information 2. A
ccess to batch job scheduling SAN) is setup, data is protected
(incl. non compliance with GDPR)
is appropriately restricted to against corruption (ensuring that
(Step 1)
- Unauthorized access, disclosure,
authorized users and reviewed half corrupted production data may not
modification, damage or loss of data yearly. be synced in realtime to the backup).
(Step 2, 3) 3. E
very month the batch jobs and 3. Restoration tests are performed at
interfaces are monitored and least annually. Failures, if any, are
IMPACT
processing errors are timely investigated and resolved.
- Fraud corrected.
REQUIREMENTS
REQUIREMENTS
The IS_S04 IT Infrastructure and Backup strategy should be designed taking
Note: Information Technology (IT) Systems • For IT systems not managed by Operations Standard defines the IT Backup into into consideration that risk of data
refers collectively to Business Applications and LafargeHolcim (e.g. Cloud hosted and requirements. The local backup and restore loss and data corruption is minimized (e.g.
IT Infrastructure (Operating System, Database, managed by third parties) Business or IT procedures should document: controls to prevent backup data corruption).
Network, interfaces) should obtain independent audit report • Scheduling The restoration should be achievable
(e.g. ISAE 3402) from the service provider within the business agreed recovery and
• Minimum Security Baseline requirements at least annually to verify and follow up on • Backup rotation restoration time objective. (Steps 1,2, 3)
are defined in - Security Configuration any IT internal control deficiency reported. • Retention times
baseline approved by the Group IT Security (Step 1)
responsible. (Step 1) • Testing of restoration process
Critical batch jobs (different from end user • Evidence that backup are performed
• ITSC Security officer is responsible to scheduled background jobs) are identified
obtain the IT system configuration • Evidence of tests performed regarding the
(e.g. interfaces between Enterprise restoration procedure
settings and review them to ensure they Resource Planning (ERP) and other critical
are as defined (or stricter) in the Security systems to ensure failures, if any are timely
configuration Baseline.(Step 1) corrected to ensure data integrity). Access to
such scheduled jobs is restricted. (Step 2, 3)
40 Managing changes
IT
to IT systems

Prevent unauthorized changes in Note: Information Technology (IT) Systems • The change approval board (CAB) verifies
IT systems. 1. There is verification that the refers collectively to Business Applications and all changes before providing release
requester is authorized to request IT Infrastructure (Operating System, Database, approval. Changes should not be moved to
Network, interfaces) production without approval. (Step 4)
changes to the relevant IT systems.
RISK
- Unauthorized changes to the IT 2. There is a verification that the • Changes to IT systems should be requested • Developers should not have change access
systems (Step 1, 2, 3, 4, 5, 6) requester has followed defined only by authorized approvers (application to production system. The changes in
super users, business process owners) to production environment should be moved
procedure for requesting changes
IMPACT ensure that only valid changes for business by administrators (BASIS for SAP ERP)
- Operational disruption and that the requests are approved as needs are requested (Step 1). To request (Step 5).
- Fraud required. changes a defined procedure is followed
where the approvals are captured and • Post change monitoring is performed
3. User Acceptance Test is performed to ensure there changes were correctly
recorded (Step 2). User Acceptance Test
(there may be additional tests for implemented (Step 6)
(UAT) should not be performed by the
the Unit and Integration Test, if developer / change responsible to ensure
required). Results of User Acceptance segregation. User Acceptance Test is
Test record who performed the User generally performed by the application
Acceptance Test and when. super users or business / function
approved testers (Step3).
4. There is a verification on the release
authorization (ensures evidence
of who authorized the release and
when).
5. There is verification that segregation
of duties is maintained especially
that the developer does not
move their own changes into the
production environment.
6. There is a verification on the
existence of test and log evidence
to support the assertion of secure
movement of changes into
production (where changes are
applied directly on production
systems e.g. a configuration or
security setting change, it is reviewed
and confirmed for correctness).
Accounting &
Consolidation
41 Compliance with accounting
42 Reconciliation of general
ACCOUNTING & CONSOLIDATION

and reporting standards (LHARP) ledger accounts

Implement and comply with all Reconcile and review balance
LafargeHolcim Accounting and 1. C
onfirmation by the CFO of sheet accounts and CFO sign-off 1. Communication and monitoring by
Reporting Principles (LHARP) compliance to LHARP and IFRS of the trial balance and the CFO (or designee) of a monthly
accounting and reporting through financial certification. non-consolidated financial closing checklist.
standards. Any deficiencies identified in a statements. 2. Approval by the CFO (or designee)
sustainability review conducted by of income statements, balance
the STAP team are remediated per sheet accounts, cash flow at least
RISK the agreed timeline. RISK quarterly.
- Non-adherence to accounting - Inaccurate or fraudulent closing
and reporting requirements and entries (incl. judgmental assumptions 3. Approval by the designated financial
standards (Step 1) and estimates) (Step 1, 2, 3) person of subledger to general
- Non-adherence to accounting ledger (GL) reconciliations and trial
IMPACT and reporting requirements and balance monthly.
- Errors in financials standards (Step 1, 2, 3)
IMPACT
REQUIREMENTS
• The Company’s Chief Financial Officer the Standards and Accounting Principles
REQUIREMENTS
is responsible for ensuring that (STAP) Team. LHARPist must be recorded in
LafargeHolcim Accounting and Reporting the Company List. • The CFO (or designee) prepares and per the subledger agrees with the total
Principles (LHARP) is sustained in the communicates a closing checklist or other per the general ledger. Any differences
Company including updating the internal • Regular LafargeHolcim Accounting and document of key activities that must be are documented, investigated and cleared
policies for the LafargeHolcim Accounting Reporting Principles (LHARP) Sustainability performed during a close, including who (all corrections made to the subledger).
and Reporting Principles change releases. Reviews (cf. 7.4.4 LHARP Sustainability performs the task and the deadline, which The reconciliation is approved by the
Adherence to Group standards is included Review) are conducted by the Standards is monitored. (Step 1) designated finance person. (Step 3)
in the annual certification letter. and Accounting Principles team based on
an annual plan.Any deficiencies identified • The CFO (or designee) performs an • For leases under the scope of International
• The LafargeHolcim Accounting and must be monitored and remedied by the analytical review of the income statement, Financial Reporting Standards 16 (IFRS
Reporting Principles and rules must be CFO (or designee). balance sheet and statement of cash flows 16), lease payments must be reconciled
implemented in the Enterprise Resource to look for variances exceeding the locally between SAP Flexible Real Estate
Planning (ERP) systems ( SAP, JDE, etc.) of • The LafargeHolcim Accounting and defined thresholds (% and amount in local Management (RE-FX) and the local vendor
all LafargeHolcim Group companies. This Reporting Principles Manual includes currency) in comparison to the prior year accounting in the Enterprise Resource
implementation is certified by the Group International Financial Reporting Standards and to forecast or budget. All significant Planning (ERP) system. Right of use assets
Standards and Accounting Principles (IFRS) elements that are relevant for Group deviations are explained in writing and all and the Lease Liability account should be
(STAP) team who conducts a detailed reporting purposes. In the case where errors are corrected prior to final closing. reconciled with the sub-ledger (the detail
review. local circumstances dictate that a specific Significant deviations discovered in the by contract), by comparing fixed asset
International Financial Reporting Standards, review are disclosed in writing. Once ledger and general ledger (GL). (Step 3)
• Each LafargeHolcim Group company which is not documented in the LHARP completed, the CFO (or designee) approves
must have an appointed responsible Manual, is applied, it is the responsibility the trial balance and non-consolidated • After all closing journal entries have been
for LafargeHolcim Accounting and of the Company’s CFOs to ensure that the financial statements. (Step 2) booked, a trial balance, the listing of the
Reporting Principles (LHARPist). The CFO is International Financial Reporting Standards general ledger balances by account on
responsible to appoint the LHARPist, who is followed (in addition to LHARP). • The system automatically posts subledger the last day of the month, is analyzed
is an integrated member of the LHARPist entries to the general ledger and blocks and reviewed. Possible errors in the trial
Virtual Organization - an extension of Refer to the LHARP Manual posting of manual entries directly to the balance, which are noticed as part of the
general ledger. Any adjustments should be review, are corrected before the final
made directly to the subledger. (Step 3) closing. Significant deviations are disclosed
in writing. The trial balance review is
• The subledger is reconciled to the general approved by the designated finance
ledger monthly to ensure the total balance person. (Step 3)
43 Reconciliation
44 Reconciliation of

of bank accounts intercompany balances

All bank accounts are reconciled All intracompany and
to the general ledger regularly, 1. M
onthly bank statements are intercompany balances are 1. Signed contract documented
signed by the CFO, and obtained from the banks and reconciled with the partner to and filed for all intercompany
adjustments are recorded reconciliations with the general ensure accuracy of the general transactions.
ledger (GL) are performed by the
immediately. ledger and proper elimination 2. Review and approval by the
finance responsible. Required
adjusting entries are booked and all upon consolidation. designated financial person of the
unreconciled items are followed up intercompany and intracompany
RISK
- Inaccurate or fraudulent closing for closure within 90 days. The CFO accounts each month, including a
RISK confirmation with each partner (or
entries (incl. judgmental assumptions (or designee) approves the monthly - Inaccurate or fraudulent closing
and estimates) (Step 1) reconciliation. documentation that balances agree
- Non-adherence to accounting and estimates) (Step 1, 2) in Reco-Live).
and reporting requirements and - Non-adherence to accounting
standards (Step 1) and reporting requirements and
IMPACT standards (Step 1, 2)
- Errors in financials IMPACT
- Financial losses - Errors in financials
- Fraud - Financial losses
REQUIREMENTS
REQUIREMENTS
• A proper segregation of duties (SoDs) is aged. Any adjustments required to the
in place between reconciliation, booking general ledger are recorded before closing.
• Each intercompany transaction between Reconciling items must be identified and
and approval activity. The person who All bank reconciliations (even for inactive
performs the bank reconciliations must not or dormant accounts) at each month-end
different legal entities must have a corrected before the end of the close.
have access to recording of transactions in closing are reviewed and approved by the signed contract. Each intercompany The reconciliations should be reviewed
the accounting system or to process cash CFO (or designee). invoice must include relevant details for and approved by the designated
disbursements or receipts. the goods or services provided based on financial person. This ensures that
• Local banking regulation over clearance a signed contract. (Step 1) intercompany balances are fully
• At least monthly, all bank statements are of bank transactions to be taken into eliminated in consolidation. (Step 2)
reconciled to the general ledger account consideration for quick identification of • All balance sheet and income statement
timely. The accounts denominated in unreconciled items. intracompany and intercompany Refer to LHARP 7.3.3 Reconciliation
foreign exchange rates (FOREX) are accounts are formally reconciled with Policy.and Recharges to Corporate
recalculated according to the month-end • All reconciling differences should be each partner unit, including other Directive, Reco-live! tool integrates with
rate and the impact is recorded in the identified. Any necessary journal entries SAP FC.
companies of the LafargeHolcim Group.
general ledger. The bank statement, the to resolve the differences should be
general ledger (GL) balance and the related posted no later than 90 days after the
journal entries are attached in the bank reconciliation is done. The bank should
reconciliation. Reconciling items (identified be contacted concerning any bank errors
differences between the book and bank which should also be resolved within 90
balances) are followed up timely and are days. The usage of suspense accounts are
not allowed.
45 Manual journal
46 Impairment of goodwill,

entries intangible assets
and tangible assets
Manual journal entries are PRIMARY OBJECTIVE CONTROL
properly supported, reviewed 1. Ensure that all manual journal Perform an impairment test for
and approved by appropriate entries are approved as per country
goodwill, intangible assets and 1. Approval by the Group CFO of the
personnel. Delegation of authority by the
tangible assets to ensure that goodwill impairment test template
designated finance person, together
their recorded values are not assumptions and Mid-Term Plan
with supporting documentation
greater than their recoverable (MTP) cash flow data together with
RISK prior to posting.
- Inaccurate or fraudulent closing other additional data used for the
2. Quarterly verification and sign- amount.
entries (incl. judgmental assumptions estimate of value in use. (Group
and estimates) (Step 1, 2, 3) off by the responsible manager to Level)
- Non-adherence to accounting ensure only approved users from RISK 2. At least annually, approval by
and reporting requirements and accounting function have access - Inaccurate or fraudulent closing
standards (Step 1, 2, 3) the Country CFO (or designee) of
to post manual journal entries. entries (incl. judgmental assumptions
the impairment tests for other
IMPACT Quarterly approval by the Countries and estimates) (Step 1, 2, 3)
intangible assets with indefinite
- Errors in financials of a list of approved persons who can - Non-adherence to accounting
and reporting requirements and lives and tangible assets annually
- Financial losses request manual journal entries to
standards (Step 1, 2, 3) or if a triggering event occurs and,
- Fraud the Business Service Centers.
if an impairment exists, review of
3. Monthly verification and sign-off IMPACT
the impairment loss and possible
by the CFO (or designee) of the - Errors in financials
adjustment to the carrying value
analytical review report. and useful life (if applicable).
3. Notification of impairment issues by
REQUIREMENTS the country CFO (or designee) to the
Group Reporting & Consolidations
Scope: Manual Journal Entries (MJEs) are • All manual journal entries are required to team by using the goodwill
Journal Entries posted by a user/person and have adequate supporting information / impairment template at all times as
are not system triggered /automatic entries documentation, appropriate business they occur and before the end of May
in the Enterprise Resource Planning (ERP) rationale, recorded within the right and November.
application (e.g. accounts payable (AP) or period, with the right amount. If the entry
accounts receivable (AR) ledger posting). is performed at a Service Center, these
Manual Journal Entries are prepared by information/documentation have to be
individuals to capture economic activities provided to them in order for the posting
outside of sub-ledgers, i.e. directly in the to take place. (Step 1)
general ledger.
• Only users in the accounting function are
• Proper Segregation of Duties (SoD) lies allowed to post manual journal entries.
between Manual Journal Entries requester, (Step 2)
approver, and those posting the entries.
(Step 1) • The CFO (or designee) performs a monthly
analytical review of manual journal
• Manual journal entries should be posted entries posted.This includes statistics on
in the system after they are reviewed the number of entries, nature/type and
and approved. All Manual Journal amount of journal entries to detect any
Entries require approval before posting. unusual activity as part of the review.
Additionally, entries relating to valuation Countries define locally the thresholds and
adjustments should be approved by the unusual items for the review. The reviewer
CFO.(Step 1) is a person other than someone who is
posting the entries. (Step 3)
46 Impairment of goodwill,
47 Transactions

intangible assets in a foreign currency
and tangible assets
REQUIREMENTS Identify, record and revalue all
transactions in a foreign currency 1. Approval by either IT Service Centers
Cash Generating Unit (Step 1): PPE (Property Plant & equipment) (Step 3):
and recognize foreign currency (ITSCs), CFO (or designee) that
• As from January 1, 2019 a Cash-Generating • Group companies shall use the goodwill gains/losses. the correct Group communicated
Unit (CGU) for goodwill impairment testing impairment template at all times when exchange rates were entered into
purposes shall represent a reportable assessing Property, Plant and Equipment the Enterprise Resource Planning
segment. This emphasizes the level of (PPE) for impairment. RISK (ERP) system daily or at least
responsibility of regional Management - Inaccurate or fraudulent closing
• All designated assets are assessed at monthly.
with focus on segment performance. entries (incl. judgemental
As a consequence, the lowest level at least annually to determine if there is any 2. Analytical review of the foreign
indication of impairment. If indicators assumptions and estimates) (Step
which goodwill is monitored for internal 1, 2, 3) currency gain or loss in the general
management purposes is therefore carried are present, a formal estimate of the
recoverable amount of the asset must - Non-adherence to accounting ledger to ensure all foreign currency
out on a reportable segment level and not and reporting requirements and transactions were properly revalued
anymore based on country or regional be calculated. The review needs to be
documented and must be formally standards (Step 2, 3) using the month end rate.
cluster level. The reportable segments - Improper management of foreign
on which goodwill will be tested for approved by the appropriate finance 3. Review and approval by the CFO (or
person. exchange risk (Step 1, 3)
impairment would be as follows: designee) of the foreign currency
- North America; Europe; Middle East Africa; • If it is determined that there is an IMPACT transactions to determine if hedging
Latin America; Asia Pacific (excluding impairment, the impairment loss must is required.
China) and China. be recognized immediately to the extent
that the carrying value is greater than the
Goodwill: Guidance (Step 1) recoverable amount.
REQUIREMENTS
• Consequently, all goodwill is tested for • If there is an indication that an asset may
impairment by Corporate Reporting in Zug, be impaired, the remaining useful life of • Daily exchange rates published by central • Where a transaction is not settled in the same
Switzerland and not by a Group Reporting the asset should be reviewed and adjusted, banks are usually used to record receivables reporting period as that in which it occurred,
Unit. The Group goodwill impairment if needed, even if no impairment loss is and liabilities relating to the foreign currency it must be revalued using the closing rate of
test template will be used to test for recognized. transaction (settlements, recognized gains/ the reporting currency. Any resulting gain
impairment. The cash flows contained in
losses). The exchange rate used in the or loss must be recognized in the income
the Mid-Term Plan form the basis of the • Group Reporting & Consolidations should
Enterprise Resource Planning (ERP) system statement as a foreign currency gain or loss.
test with additional information required. be notified if any impairment issues arise
on the last day of the month is the official If recorded in the system in the currency of
The calculations and assumptions must be before the end of May and November.
rate calculated and defined by the Group and the transaction (foreign currency), this will
validated and approved by the Group CFO.
Refer to LHARP 4.4.3 Impairment of Assets communicated to all countries. Exception be done automatically by the Enterprise
Other intangibles with indefinite lives (i.e. utilization of daily rates from central bank Resource Planning (ERP) system. If not, this
(Step 2): for the last day of the month, instead of the must be done manually. (Step 2)
rates communicated by the Group) must be
• At least annually or if a triggering approved by Group Reporting & Consolidation, • Foreign exchange, (FX), risks must be
event occurs,a test of impairment of an based on appropriate impact analysis mitigated by natural hedging as much as
intangible asset with an indefinite useful performed on a bi-yearly basis. (Step 1) possible. If not possible, it must be identified
life (or an intangible asset not yet available and managed to the maximum extent
for use) is completed by comparing its • A foreign currency transaction is one possible in cooperation with Group Treasury
carrying amount with its recoverable that requires settlement, either payment and in accordance with the Group Delegated
amount. or receipt, in a foreign currency. Such Authorities (GDA). (Step 3)
transactions are identified and recorded
in the general ledger as a foreign currency Refer to LHARP 3.2.4.4 Foreign Exchange
transaction (denominated in the currency of Losses (Gains), 4.7.1 Accounting for the
the transaction so the Enterprise Resource Effects of Changes in Foreign Exchange
Planning (ERP) system can automatically Rates, LafargeHolcim Treasury Directive
revalue the transaction until settlement).
(Step 2)
48 Management of legal structure
49 Consolidation

and consolidation hierarchy of financial statements
Ensure a complete and correct Review of the reporting
scope of consolidation by proper 1. New legal entity and/or any changes package, including equity 1. Review and approval by the CFO
reporting and disclosure of the in the structure of legal entity must be and consolidation entries, (or designee) of the reconciliation
legal ownership rights. updated in the Umbrella tool within 3 and approval of the reporting of local equity (general ledger)
days of incorporation or change. The and local chart of accounts to
package and supporting
Group Reporting Unit CEO (or designee) the reporting package (SAP-FC)
RISK verifies the legal entity structure and schedules before submission to quarterly.
- Non-adherence to accounting signs off the Legal Entity Management the Group.
2. Review and sign-off by the CFO
and reporting requirements and Tool (Umbrella) information half
standards (Step 1, 2) (or designee) of the SAP- Financial
yearly according to Group Accounting, Consolidation (SAP-FC) reporting
RISK
IMPACT Reporting, Consolidation and - Non-adherence to accounting package before submission as per
- Errors in financials Controlling (ARC)/ Group Legal and reporting requirements and the requirements.
Instructions (e.g. May & Nov). standards (Step 1, 2)
2. Approval by the designated finance - Inaccurate or fraudulent closing
person together with legal of the
and estimates) (Step 1, 2)
consolidation hierarchy percentage
of ownership and any put/call liability IMPACT
to ensure correct accounting and - Errors in financials
reporting treatment (e.g. consolidation
method) and reconciliation to the
financial investments in the statutory
accounts before the start of the country REQUIREMENTS
consolidation.
• A review is performed to ensure the • A reconciliation of local equity (general
amounts reported in the group reporting ledger) to the Group consolidation
package in SAP- Financial Consolidation accounts (SAP- Financial Consolidation) is
REQUIREMENTS (SAP-FC) are correct and complete. The performed at least quarterly and approved
mapping between the local chart of by the CFO (or designee). Differences are
• The creation of any new legal entity must entities, the consolidation methods and accounts and the consolidation package, explained, documented and recorded.
be in accordance with the Group Delegated the legal ownership percentages. In case of if applicable, is formalized and any change (Step 1)
Authorities. The Group Reporting Unit changes and/or doubts, alignment with legal is authorized by the designated finance
(GRU) CEO is responsible to ensure that is required and the Group Consolidations person. (Step 1) • The country reporting package is reviewed
all legal entities with direct or indirect team needs to be informed accordingly. If a and approved by the appropriate finance
control are documented in the Legal Entity transaction is considered to be a change in • When a country performs a sub- person country CFO (or designee) before
Management Tool (Umbrella) (Step 1) structure (CIS), then it must be documented consolidation, the consolidated reporting being submitted to the Group. The CFO
(legal entity, % of ownership, parent, method package is reviewed for the completeness (or designee) formally signs off on the
• All information in Legal Entity Management
of consolidation, etc.). If the transaction and correctness of the consolidation, financial statements to confirm that they
Tool (Umbrella) is updated within 3 days
meets the threshold, it is recorded as a where applicable, including (Step 1): have been reviewed, that the amounts
after any changes occurs. (Step 1)
change in structure (CIS) movement in - Eliminations, taking into consideration reported are correct and that all relevant
• All information in Legal Entity Management the SAP- Financial Consolidation (SAP-FC) information for disclosure purposes has
any non-controlling interest calculation
Tool (Umbrella) is compulsory and must be package. (Step 2) been included in the appendices. (Step 2)
completed accordingly. (Step 1) - Accounting for any deconsolidation,
• Reconciliation over the agreed acquisition or merger.
• On a monthly basis, before the start of the consolidation hierarchy, with Enterprise
country consolidation, the consolidation - Conversion to the reporting currency and
Resource Planning (ERP) system and Legal
hierarchy is reviewed by the local reporting related currency translation adjustment
Entity Management Tool (Umbrella) to take
team to verify the completeness and are reviewed for reasonableness using
place whenever a change occurs, or at
correctness of the Enterprise Resource the rates published by the Group (and
least bi-yearly. (Step 1,2)
Planning (ERP) system set-up of the legal used in SAP- Financial Consolidation).
50 Statutory financial
statements
Tax
Statutory financial statements
are reconciled to Group financial 1. Review and sign-off by the CFO (or
statements, reviewed and signed designee) on 1) the reconciliation
off by the CFO and statutory between the Group reporting package
and the statutory financial statements
audits are completed by April 30th.
and all adjustments made and 2)
the statutory financial statements,
RISK including related disclosures.
- Non-adherence to accounting 2. Audit qualifications on the local
and reporting requirements and
financial statements, if any, must be
standards (Step 1, 2)
- Inaccurate or fraudulent closing reported to the Group ARC together
entries (incl. judgmental assumptions with the signed statutory audit reports
and estimates) (Step 1, 2) of a calendar year by April 30th of the
following year. Any exceptions must
IMPACT
be approved by the Head of Group ARC
before the April 30th deadline.
REQUIREMENTS
• A reconciliation between the financial • For both the statutory and group audits, a
statements per the Group reporting mandatory audit firm rotation is to take
package and the statutory financial place every 10 years the latest (more
statements must be performed to ensure frequent intervals may be applied by the
amounts are correct and complete. (Step 1) management). A previously appointed audit
• Any adjustments made to the SAP- Financial firm, after its rotation, cannot be re-elected
Consolidation (SAP-FC) financial reporting for a period of at least 3 years. Additionally,
package (financial statements) to comply key audit partners must rotate every 7 years
with the regulations of the statutory the latest. A previously appointed key audit
financial statements (e.g. International partner, after his/her rotation, cannot be
Financial Reporting Standards (IFRS) to re-elected, irrespectively of the audit firm
a local Generally Accepted Accounting in which he / she might work for.If local
Principles (GAAP)) must be documented and regulations of each country of incorporation,
approved by the CFO (or designee). (Step 1) dictate a more frequent mandatory rotation
of audit firms or key audit partners and / or
• The CFO (or designee) formally signs off a longer waiting period for re-election, then
on the statutory financial statements to local regulations supersede this guidance
confirm that they have been reviewed and and the more frequent rotation periods
the amounts reported, including all relevant and/or the longer waiting periods should
disclosures, are correct. (Step 1) be applied locally. Refer to the Directive of
• All statutory audits of a calendar year must approval of audit, audit-related and non-
be completed by April 30 of the following audit services. (Step 2)
year. Any exceptions must be approved by • Audit fees negotiation and all additional audit
the Head of Group Accounting, Reporting, related fees for all Group Companies and
Consolidation and Controlling (ARC). The change of auditor at country level approvals
CFO (or designee) ensures that root cause of according to Group Delegated Authorities
delays is analyzed and the organization and (GDA) and Approval of audit, audit-related and
process is improved for the next year. (Step 2) non-audit services Directive.
51 Tax risk assessment
52 Tax filings
TAX
and reporting and payments

Track, monitor and reduce tax Any exceptions to timely tax
risks and ensure they are properly 1. Quarterly review and approval by filings and payments must be 1. Tax Manager and CFO (or designee)
reflected in financial statements the country CFO (or designee) of approved by the Group Head of to implement a tax calendar with all
and disclosures. the provisions reported and the full Tax. tax filing and payment due dates.
list of uncertain tax position as per 2. Approval of the calendar by the local
the requirement, at the Country/ Tax Manager to ensure that all filings
RISK Group Reporting Unit level, and RISK
and payment are made on time. If
- Lack of proper tax risk monitoring confirmation they agree to the - Statutory filings and payments not
and reporting (Step 1, 2) performed timely (Step 1, 2) an extension is needed, the local Tax
amounts in the financial statements. Manager obtains approval from the
- Poor management of tax cases - Poor management of tax cases
(Step 1, 2) 2. Review and approval of tax risks, (Step 1, 2) Group Head of Tax.
- Inaccurate or fraudulent closing at the consolidated Group level, by
entries (incl. judgmental assumptions IMPACT
the Group Head of Tax every quarter - Errors in financials
and estimates) (Step 1, 2) to ensure all required information - Financial losses
IMPACT is reported, complete and updated
- Errors in financials with the latest assumptions. (Group
- Financial losses level)
REQUIREMENTS
• A tax calendar, including filing and •A
process is in place to monitor filings
REQUIREMENTS payment due dates for all taxes, is formally and payments so they are made on time.
set up by the tax manager and CFO (or Entities should be compliant with local
At least quarterly, the finance team keeps Based on this information: designee). (Step 1) rules for timely filing and payment of tax
track of and properly completes the status • Provisions must be adjusted accordingly liabilities. Any extension request for filing
of all uncertain tax positions, including or payment of taxes shall be approved by
(Step 1): • Contingencies must be disclosed Group Head of Tax. (Step 2)
• The estimated maximum risk and This detailed information is reported
estimated loss, to Group Tax using the format and tool
• The classification as not probable, communicated by Group tax with all
probable and virtually certain, balances reconciled to SAP- Financial
Consolidation (SAP-FC). (Step 2)
• The amount of the provisions recorded in
the financial statements. Refer to LHARP 7.3.4.04 Tax Risk Reporting
53 Deferred and current
54 Transfer
TAX
income tax calculations pricing

The deferred and income All tax and legal rules regarding
tax calculations and related 1. R
eview by the Tax Manager and intercompany transfer prices and 1. Determination and confirmation
documentation are prepared approval by the CFO (or designee) documentation are complied with; by Group Tax and Regional Heads
in accordance with the Group of all income tax and deferred transfer prices are entered in the of Tax on the methodology used
consolidation instructions, tax calculations and related relevant systems; where required, for intercompany transactions.
documentation at least quarterly. (Regional & Group level)
tax policies, directives and transactions are reviewed by
guidance and in line with local tax Group Tax. Any exceptions are 2. Agreement by the Head of Tax on
any exception to the LafargeHolcim
regulations. discussed and approved by the
Direct Taxation policy. (Group level)
Group Head of Tax
3. Review and analysis by the Tax
RISK Manager and approval by the CFO (or
- Inaccurate or fraudulent closing RISK designee) to check that the practice
entries (incl. judgmental assumptions - Lack of commercial strategy and of the entity is in compliance with
and estimates) (Step 1) pricing policy (Step 1, 2)
- Lack of proper tax risk monitoring
the Group Transfer Pricing Directive.
- Lack of proper tax risk monitoring
and reporting (Step 1) and reporting (Step 2, 3, 4) 4. Maintenance by the Tax Manager
- Poor management of tax cases (or designee) of transfer pricing
IMPACT
- Errors in financials (Step 1, 2, 3, 4) documentation in accordance with
- Financial losses local requirements.
IMPACT
- Financial losses
REQUIREMENTS
A quarterly review of the deferred and • Reconciliation with amounts booked in the REQUIREMENTS
current income tax calculations and related consolidation package
documentation is performed by the Tax • Group Tax and the Regional Heads of Tax •T
he practice of the entity is regularly
Manager and CFO and includes: • Tax rate reconciliation (prepared, are analyzing, advising and confirming analyzed by the tax manager and the
documented, and validated) the transfer pricing methodology for all CFO to check compliance with the
• Appropriate representation on intercompany transactions. Transfer prices LafargeHolcim Direct Taxation Policy. Risk
outstanding audits • Recoverability of deferred tax assets is are entered into the relevant systems in analysis is communicated to the finance
justified by supporting evidence order to ensure compliance with the Group and legal departments to define potential
• Compliance with requirements of tax Transfer Pricing Directive. (Step 1) needs for provisions or disclosures in
rulings • Account reconciliation ending balances are
verified to ensure all accounts requiring accordance with the Minimum Control
• Any and all intercompany transactions Standards (MCS) on Tax Risks. (Step 3)
• Enacted tax rate changes reconciliation are identified and ending must comply with the arm’s-length
balances on the reconciliations are correct. principle as also required by local laws and •T
ransfer Pricing Documentation is drafted,
• Tax Risks Provisions/Uncertain Tax
Positions (UTPs) and exposures including Refer to LHARP 3.1.1.2.7 Deferred Tax regulation. (Step 1) maintained and filed by the local tax team
analysis of changes and or expirations, Assets, 3.1.2.2.3 Deferred Income Taxes and with the support of the Group Head of
• Any exceptions to the LafargeHolcim Direct Transfer Pricing in accordance to local tax
quantification, and probability assessment 3.2.6 Income Taxes and the LafargeHolcim Taxation policy for goods sold and services
Direct Taxation Directive regulations and requirements. (Step 4)
• Documented analysis of any temporary / intellectual property licenses within the
differences between the tax basis of an Group (including rebates and one offs)
asset or a liability and its carrying amount should be discussed with Group Tax to
per the Statement of Financial Position and evaluate the risk and has to be formally
proofs of all deferred tax balances agreed by the Head of Tax (Step 2)
55 Non-income (indirect)
taxes
Treasury
Non-income tax returns and
related account reconciliations 1. Review and approval of all Value
are prepared, reviewed and Added Tax (VAT) and indirect tax
approved in line with the locally returns by the CFO (or designee).
required frequency and local tax 2. Review and approval by the Tax
requirements. Manager (or designee) of the
reconciliation of current month
activity per the tax calculation
RISK with the amount in the financial
- Statutory filings and payments not statements.
performed timely (Step 1, 2, 3, 4)
- Lack of proper tax risk monitoring 3. Review by record to report (R2R)
and reporting (Step 2) team and approval by the Tax
- Poor management of tax cases Manager of reconciliations of all
(Step 2) Value Added Tax (VAT) accrual and
IMPACT recoverable accounts monthly.
- Errors in financials 4. Review and approval by the Tax
- Financial losses Manager (or designee) of unusual
activity in the Value Added Tax (VAT)
reconciliations including Value Added
Tax (VAT) litigations in progress.
REQUIREMENTS
• Value Added Tax (VAT) and indirect tax • The reconciliations for various Value Added
returns are prepared, reviewed and Tax (VAT) accrual and Value Added Tax
approved in line with local required (VAT) recoverable accounts are performed
frequency and local tax requirements. by local record to report (R2R) process
(Step 1) personnel. The local record to report (R2R)
team will contact the county Tax Manager
• The reconciliation (base revenue, sales, if they notice any unusual payments during
others used to calculate Value Added the reconciliation process. (Step 3)
Tax (VAT) or sales taxes with the recorded
revenue, sales, others in Profit/Loss) • Value Added Tax (VAT) payments are made
summarizes current month sales activity from multipurpose cash accounts. The
to produce the monthly accrual needed. reconciliations for the cash accounts used
Any reconciling items noted during to make Value Added Tax (VAT) payments
the reconciliation will be evaluated to are performed by the local record to
determine a potential impact on the tax report (R2R) cash personnel as part of their
return. The reconciliation summarizes cash account reconciliation process. Any
information based on current monthly unusual Value Added Tax (VAT) payments
accruals, quarterly accruals or annual during the reconciliation process shall be
accruals, based on the jurisdiction. reported to the tax manager. (Step 4)
Miscellaneous issues (missed payments,
audit issues, etc.) are also noted and
tracked on the reconciliation. (Step 2)
56 Bank relations
TREASURY
Bank relationship management • Bank relations, including fees, approved • The country CFO reviews yearly the list
– including all openings bank 1. Approval by Group Treasury of any as per Group Delegated Authorities (GDA), of active and inactive bank accounts and
accounts – are managed and bank accounts that are opened and when applicable, and Group Treasury ensures that the number of banks and
Directive. (Step 1,2) bank accounts is optimized to increase
approved by Group Treasury in notification of closing bank accounts
visibility on cash and reduce risks and
compliance with Treasury Directive to to Group Treasury. (Group level) • Any opening of bank accounts shall be costs. If it is not optimized, a plan is set up
approved by Group Treasury i/o Corporate
requirements. All signatory 2. Approval by Group Treasury of any for closing accounts by a specific deadline.
Finance and Treasury (CFT). Any closing (Step 3)
guidelines in the LafargeHolcim counterparty if not in the “Bank shall be notified to Group Treasury and
Treasury Directive must be in place. List”, monitoring of the credit updated in Legal Entity Management Tool • Local reconciliation over approved bank
exposure within the concentration (Umbrella). (Step 1) accounts list with Enterprise Resource
limit published by Group Treasury. Planning (ERP) system and Legal Entity
• Information to the banks, including legal Management Tool (Umbrella) to take place
RISK (Group level)
and compliance-related questions, needs whenever a change occurs, or at least
- Unauthorized commitment or
3. Annual approval of a list of all bank to be provided in compliance with Group quarterly. Ensure Legal Entity Management
relationship with banks (Step 1, 2, 3, 4)
- Unsecured payment means and cash accounts and optimization plan by Treasury Directive. (Step 1) Tool (Umbrella) is up-to-date. (Step 3, 4)
transactions (Step 3, 4) local CFO (or designee) based on • Business relationships with a bank not
Treasury directive including inactive • A process is in place to: (Step 4)
- Transaction with sanctioned parties listed on the Bank List are subject to
(Step 2) bank account analysis and timely written approval by the Head of Group - Ensure only joint signatory rights are
closing when applicable. Treasury and includes sanctions screening allowed for any transaction with a
IMPACT bank and each signatory has sufficient
as per Group Treasury Directive request for
- Financial losses 4. Quarterly verification by the local seniority to become an authorized
approval (RfA) procedure and form.Within
- Fraud CFO (or designee) of the list of all the Bank List, Relationship Banks should be signatory. Implement authorization limits
open bank accounts reconciled considered over Niche Banks, unless Niche for individual roles appropriate to the size
with Legal Entity Management Banks offer a clear advantage. (Step 2) of the organization.
Tool (Umbrella) and local Treasury/ - Ensure immediate removal of signatory
• In order to limit credit exposure and rights for employees no longer involved
accounting system. At least, concentration on any counterparty,
yearly confirmation of authorized in the payment process and inform the
the Group will only do business with bank immediately in case of signatory
signatories obtained from banks authorized counterparties within assigned changes.
to ensure it is consistent with the limits and guidelines described on the
- Obtain from the banks the list of
delegation of authority (DoA). official LafargeHolcim Bank List. (Step 2)
authorized signatures to confirm it is up
• Cash and deposit limit breaches shall to date and consistent with delegation of
be avoided as much as possible and authority (at least once a year)
immediately reported to the Head Group
Treasury. Corrective actions are subject
to approval by the Head Group Treasury.
(Step 3)
57 Cash transactions are not
58 Secure payment
TREASURY
permitted without Group CFO means
approval
PRIMARY OBJECTIVE Payments are secured to avoid
CONTROL errors and safeguard assets.
Cash transactions are not 1. All users with access to SAP-BCM
permitted without exceptional and/or online banking are approved
1. If applicable, obtain Group CFO by the CFO (or designee)/Business
approval by Group CFO approval for cash transactions. Set RISK
Service Center Head as per the local
- Unsecured payment means & cash
up by the CFO (or designee) a local DoA requiring dual approval for
transactions (Step 1, 2, 3, 4, 5, 6)
RISK procedure with an approval process - Unauthorized access, disclosure, payments.
- Unsecured payment means & cash in line with the LH Group defined modification, damage or loss of data 2. Quarterly review by the Business
transactions (Step 1 ,2 ) rules, controls and thresholds to (Step 1, 2, 3, 4, 5) Service Center Head / CFO (or
- Unsecured payment means & cash safeguard and minimize cash and
transactions (Step 1 ,2 ) IMPACT designee) to validate that the
check transactions. - Financial losses Business Service Centers/ Operating
- Corruption and bribery (Step 1,2)
- Transaction with sanctioned parties 2. Monthly review and approval - Fraud Companies’ user access is restricted
(Step 1,2) by the CFO (or designee) of the to Treasury operation / Cash bank
- Money laundering (Step 1,2) reconciliation of the checking and teams. Users with conflicting access
IMPACT
petty cash accounts. to other processes in ERP (MDM / O2C
- Financial losses / P2P / H2R) should have access be
- Fraud revoked upon identification.
3. Quarterly review of all user with
REQUIREMENTS access to SAP BCM / Online banking
to validate that only authorized
Cash transactions can create opportunities implement a local procedure to: (Step 1,2) users have access. Users that no
for fraud, money laundering and the funding • Safeguard the process to issue and collect longer need access or dormant
of bribes. For this reason, the general rule is cash users over 90 days (with no valid
that cash transactions are not permitted and justification) are revoked within 3
following is applied: (Step 1,2) • Track, record and support with appropriate
documentation all approved cash and working/business days.
• Maximum petty cash limit per site allowed check transactions.
is CHF 500. A petty cash is a small amount of 4. Changes to Business Partners master
cash kept on site to pay for minor expenses, • Maintain segregation of duties between data are performed by an authorized
such as office supplies or reimbursements. the person responsible for physical custody user and based on an approved
of cash/ checkbook and the bank and cash request.
• Supplier payments in cash are not allowed. disbursement authorized signatories.
• No cash collections are accepted from Restrict access to check books/cash and to 5. Quarterly verification and sign-off by
customers. the safe to only designated persons so as to the CFO (or designee) to ensure only
• Avoid using checks. If used, only crossed ensure segregation of duties. users from dedicated function (with
checks are accepted (to be deposited to a • An independent person who is not no conflicting roles) have access to
bank account) responsible for the physical custody of checks change Business Partner data.
• Cash transactions to buy or sell foreign shall physically verify unused checks on hand
and reconcile with the checkbook register on
6. At a minimum, annual validation
currencies at Exchange offices (Bureau de by Treasurer (or designee) of all
change) beside banks are strictly prohibited. a quarterly basis. Random inventory counting
has to be performed several times a year by active direct debits with the relevant
Countries which need to conduct such
transactions must get approval from the an independent person. counterparties (banks). Any direct
Group Head of Treasury. • Perform regularly (at least monthly) a debit not required is notified to the
Validate with Region Head of Finance reconciliation of checks and petty cash to the banks for cancellation
and obtain Group CFO approval for any books. Investigate any variances, within the
exception to the requirements listed above. same period and confirm they are approved
If exceptions are approved, countries must by the appropriate person before booking.
58 Secure payment
59 Financial instruments,
TREASURY
means borrowings, commitments
and working capital schemes
REQUIREMENTS
For bank transfers: Communication Manager (SAP-BCM) for PRIMARY OBJECTIVE CONTROL
An inventory of all banks should be payment approval. (Step 2) All financial instruments,
maintained with list of users with online • Dormant users over 90 days should be borrowings, commitments and
banking and or SAP Bank Communication reviewed. Users who no longer need 1. Approval according to local
Manager (SAP-BCM) access (managed access must be revoked and for other working capital schemes are delegation of authority and Group
by country or Business Service Center) to a justification / explanation should be authorized in accordance with Treasury Directive of any new
ensure controls are applied. Access to any documented as part of the review. (Step 3) the Group Treasury Directive. financial instruments, borrowings,
bank system including but not limited to commitments and working capital
SAP Bank Communication Manager and Business Partner master data (Step 4,5) Outstanding positions are
reconciled with counterparty schemes.
online banking, is strictly controlled. • In case a Business Partner master data
• Each user has a unique ID and password, (Bank details of a counterparty SSI or statements 2. The covenants reported are
user access, for accessing the bank portals Standing Settlement Instructions) has to reconciled with debt contracts and
or SAP Bank Communication Manager. be maintained in a Treasury Management accounting and approved by the
(Step 1) System, Enterprise Resource Planning RISK CFO who verifies that there is no
(ERP) system or any other payment - Inability to maintain an adequate
• At least two authorized signatories potential breach of contract.
platform, a master data management cash flow and liquidity position to pay
approve bank payments (Step 1) process that defines roles, responsibilities 3. Sign-off by the CFO (or designee) of
obligations (Step 2, 3, 4, 5)
• No modification of data (payment files and rules for Business Partner data - Non-adherence to accounting the list of all outstanding financial
generated from a system) is possible along management is in place and reviewed and reporting requirements and instruments, commitments and
the whole transfer process (e.g. supplier when required to ensure only authorized standards (Step 1, 2, 3, 4, 5) working capital schemes.
bank data, amount to be paid, etc.). personnel create, modify and delete - Poor debt management or excessive
Electronic transfers are coded / encrypted financially relevant Business Partner debt (Step 1, 2, 3, 4, 5) 4. Review and approval by the CFO (or
by the system for security (Step 1) data based on the required supporting - Unauthorized transactions/ contracts designee) of the annual financial
• Banks systematically send a confirmation documents (SSI, RIB, IBAN, ...) and bank made on behalf of LH (Step 1) commitments.
ensuring that the electronic file was confirmation when required.
IMPACT 5. Review by Treasurer (or designee)
received without communication errors (a Direct Debit (DD) (Step 6): - Financial losses of the reconciliation of outstanding
negative or positive check or the possibility
to verify) (Step 1) • Usage for vendor payment with direct - Errors in financials positions from Group Treasury to
debit is not permitted unless it is a counterparty statements.
• Minimize fraud risks by reconciling bank mandatory requirement by the authorities
and intercompany accounts on a daily basis (i.e. tax related payments). Any exception
and refraining from communicating any to the rule has to be approved by the local
details regarding the payment process to CFO and must follow all rules defined in the
external parties other than banks (Step 1) Group Treasury Directive.
• Manual transfers (i.e. paper based such • Treasurer (or designee) will ensure such
as fax) must be strictly limited and the direct debit payments are executed based
bank must call back the treasurer (or on the agreements approved by the CFO.
designee) (different from the one issuing
the payment) once the paper transfer is • Inventory of the direct debit contracts
received (to reconfirm before payment signed has to be available for Treasury
execution) (Step 1) whenever applicable. Treasurer (or
designee) will ensure regular confirmation
• Users with access to other processes (on a yearly basis minimum) of the
in Enterprise Resource Planning (ERP) inventory with the relevant counterparties
system (Master Data Management - MDM / (banks)
Order to Cash - O2C / Procure to Pay -
P2P / Hire to Retire - H2R) cannot have
access to online banking or SAP Bank
59 Financial instruments,
60 Forex, interest rate,
TREASURY
borrowings, commitments commodities risks monitoring
and working capital schemes and hedging
REQUIREMENTS PRIMARY OBJECTIVE CONTROL
• Financial instruments, borrowings, off by the CFO (or designee) as well as Exposure to foreign exchange,
commitments (e.g. trade finance facilities, reported as per the reporting guidelines. interest and commodity risks are 1. Sign off by the CFO (or designee) of
surety bonds, guarantees lines…) and An exhaustive, up-to-date database with regularly reported and hedged the exposure in foreign currency to
working capital schemes (e.g. supply chain all bank guarantees, letters of credit and
according to the Group Treasury be reported on a monthly basis to
financing, factoring, inventory financing) any other off balance sheet commitments
can only be entered into after having must be maintained. Group Treasury Directive. Group Treasury.
been approved by appropriate personnel shall have visibility of such database upon 2. Notification by the CFO (or
in accordance with local and Group request.(Step 3) designee) to Group Treasury if there
Delegated Authorities and Group Treasury RISK
• The annual financial commitments is potential foreign exchange or
Directive. - Improper management of foreign
involving financial counterparties (i.e exchange (Step 1, 2, 3) interest rate exposure that may need
• All payments/disbursements related to performance/bid/custom bonds, first - Improper management of interest to be hedged by Group Treasury.
borrowings are authorized as per the demand guarantees, surety bonds, ...) rates risk (Step 1, 2, 3) 3. Review and approval by the CFO
Group Delegated Authorities and are must be reviewed and approved by the - Increase in energy costs (incl. AFR)
recorded timely. The Treasury Manager CFO (or designee) .(Step 4) (or designee) of the consumption
(Step 1, 2, 3)
(or designated person) keeps track of all forecast used to hedge energy
disbursements related to the repayment • Derivatives outstanding positions sent IMPACT price exposure on a quarterly basis
of borrowings and ensures that both the by Group Treasury are reconciled with - Financial losses and notification to the Energy
repayments and the related borrowings counterparties statements. Fair values are
desk if there is any change in the
are properly recorded, including the those indicated by Group Treasury. (Step 5)
underlying index used to procure the
recognition of current and non-current Refer to LafargeHolcim Group Treasury commodity.
portions of the liabilities. (Step 1) Directive; LHARP: 4.09 Financial
• Financing contracts have to be in Instruments, 3.1.5 Commitments,
line with the LafargeHolcim guide on Contingencies and Guarantees , 3.1.2.1.13
loan documentation; any exception for supply chain financing, factoring ,
must be approved by Group Treasury. 3.1.1.1.10 for inventory financing, 3.1.1.1.2 REQUIREMENTS
Existing debt financial covenants are Cash and Cash Equivalents, 3.1.1.1.4 Short-
updated and reconciled with the original Term Financial Receivables, 3.1.2.1.02 • Exposure to foreign exchange, interest possible. Foreign exchange leasing is not
financing contracts. The ratios reported Liabilities From Short-Term Financing, risks are regularly reported and hedged allowed. Foreign exchange exposure must
are reconciled with debt contracts and 3.1.1.2.3 Long-Term Financial Receivables, according to the Group Treasury Directive be identified and mitigated by natural
accounting. Any reporting is approved 3.1.2.2.2 Long-Term Financing Liabilities, and Foreign Exchange & Interest Rate Risk hedging as much as possible. (Step 2)
by the CFO who verifies that there is no 4.9.6.1 Credit Lines and Examples for Management Directive. (Step 1,2)
Illustration Purposes, 7.3.4.3.2 Treasury • Exposure to commodity price risk is
potential breach of contract. (Step 1 & 2) • Speculation is strictly forbidden. Country regularly followed up, hedged and
Information Management Column
• The list of all financial instruments, Descriptions, 7.3.4.3.3 Treasury Information financings and deposits are denominated reported according to the Financial Risk
borrowings, commitments and working Management Row Descriptions, 7.3.4.3.4 in their functional currency whenever Directive for Energy . (Step 3)
capital schemes must be supported by Credit Line Column Descriptions
adequate documentation and signed
Sustainability
61 Environmental
62 Social impact: Human rights
SUSTAINAABILITY
impact & Stakeholders
Monitor and manage air Implement human rights
emissions, water and waste 1. G
roup monitoring and reporting assessment and stakeholders 1. Human Rights assessment is
to identify and address the requirements for emissions, waste engagement plan to identify, performed as per the Group
environmental risks and water are followed and an prevent and mitigate social risks instructions defined in Human
annual management review to verify Rights Manual and approved by the
compliance with Group Directives entity CEO within a timetable agreed
RISK and local regulations is conducted RISK with the Group Sustainability
- Air emissions (dust, Nox, Sox) above - Infringement of human rights
and documented by Plant Manager, 2. Action plans for Human Rights risks
authorized standards (Step 1) standards (Step 1,2,3)
- Excessive waste deposits and soil or
and approved by the Country CEO. - Improper or insufficient stakeholders are reviewed and validated by the
water contamination (Step 1) management (impact & value Local Executive Committee at least
- Failure in quarry rehabilitation and creation) (Step 4,5) annually.
biodiversity management (Step 1) - Ineffective or unethical vendor
- Failure in water management (e.g. selection process (incl. TPDD process) 3. Annually, Stakeholder Questionnaire
liquid effluents with detrimental (Step 1,2,3) with updated action plan are
impact on water resources) (Step 1) - Unauthorized transactions/ contracts submitted by the GRU via iCare and
made on behalf of LH (Step 5) approved by Group Sustainability.
IMPACT
- Reputational damages IMPACT 4. A stakeholder engagement plan is
- Operational disruption - Reputational damages deployed for all operational sites
- Financial losses - Operational disruption and the mapping, prioritization of
- Financial losses stakeholders and action plan exist and
are updated at least every 3 years.
REQUIREMENTS 5. Social investments, inclusive
business and donations are managed
• All plants must have an environmental •F
or Cement Plants, install and operate a
management system in place to ensure continuous emission monitoring equipment
according to Group guidelines and
that all environmental impacts and risks are for dust, nitrogen oxides (NOx) sulfur Delegation of authority (DoA).
effectively managed and mitigated. dioxide (SO2), Volatile Organic Compounds
• Environmental impacts have to be (VOC), carbon monoxide (CO). Calibrate
systematically identified according to the the monitoring equipment once per
following steps: year. LafargeHolcim Emission Monitoring
and Reporting standard is the reference
-Identify environmental aspects of for continuous and periodic emission
activities, products and services over which measurements and related requirements.
plants have control and/or influence
• CO2 emissions must be regularly monitored.
- Assess the risks linked to the identified
environmental aspects that may have a • The progress of environmental management
significant impact activities (compliance, circular economy,
climate, water and nature, emissions) must
- Maintain an up-to-date catalogue of be monitored, evaluated and documented
significant environmental impacts during as required by the local regulations, or at
normal and abnormal operations least on an annual basis.
• Environmental impacts must be • All countries and operating plants must
systematically managed to sustain report environmental data and KPIs
and further improve environmental according to LafargeHolcim Environmental
performance, while controlling Reporting guidelines.
environmental risks not only of our own
operations, but including the supply chain. Refer to Environmental Directive for
Cement operations and Water Directive
62 Social impact: Human rights
& Stakeholders Acronyms
Environmental, social, Foreign Exchange Personally identifiable

REQUIREMENTS and governance (ESG) (forex or FX) information (PII)
• All Group Reporting Units (GRUs) must • A Stakeholder Engagement Plan is Direct Debit (DD) Manual Journal Entries (MJEs) Terrorist & Organised Crime
conduct a human rights assessment based deployed for all operational sites according (TOC)
International Financial SAP- Financial Consolidation
on their risk level pertaining to human to communities and stakeholders Reporting Standards (IFRS) (SAP-FC) Country Security and
rights within a timetable agreed with the engagement directive. (Step 4) Resilience Management
Group Sustainability team and according to Request for Proposal (RfP) Capital expenditures (CAPEX)
System (CSRMS)
Human rights manual. (Step 1) • The mapping, the prioritization of
Accounting, Reporting, Generally Accepted
stakeholders and the action plan are Group Treasury i/o Corporate
Consolidation and Controlling Accounting Principles (GAAP)
• If a critical human rights issue is occurred updated whenever there is significant Finance and Treasury (CFT)
(ARC)
at any time or discovered during the change in the stakeholder landscape (e.g. Mid-Term Plan (MTP)
Property Damage / Business
assessment, it must be reported to the new trade union, new NGO) or at least every Directors & Officers (D&O)
Security & Resilience Interruption (PDBI)
Group Compliance and Group Sustainability 3 years Step 4)
International Organization for Management System (SRMS)
teams, in order to support the country to Third Party Due Diligence
• Strategic social investments, inclusive Standardization (ISOs)
remediate the identified risk. (Step 2) Cash-Generating Unit (CGU) (TPDD)
business and donations are managed based Risk with zero conflicts (RWZC)
• All assessments (impact or self) must result on the local context and group delegated Group Delegated Authorities Country Security
in action plan to address the identified risks. authorities. (Step 5) Anti-Bribery and Corruption (GDA) Representative (CSR)
Mitigation actions must be developed for (ABC)
Refer to Communities & Stakeholder Minimum Control Standards Health & Safety Improvement
each major risk identified. (Step 2) Data Universal Numbering (MCS) Plan (HSIP)
Engagement Directive & Strategic Social
• Implementation of the Human Rights Investment, Sponsorship and Donations System (DUNS)
Security Incident Notification Property, Plant and
action plans and Key Performance Directive Key Performance Indicators Tool (SINT) Equipment (PPE)
Indicators (KPIs) must be reported in the (KPIs)
Stakeholder questionnaire, sent by the Change in structure (CIS) Third Party Liability (TPL)
Group Sustainability team to the countries. SAP Bank Communication
Group Insurance and Risk Delegation of authority (DoA)
This questionnaire shall include a copy of Manager (SAP-BCM)
Financing (GIRF)
the latest updated human rights action Information Technology (IT)
Board of Directors (BoD)
plan. (Step 3) Operating expenses (OPEX)
Record to report (R2R)
Enterprise Resource Planning
Security Services with
Refer to Human Rights Directive and Human (ERP) Uncertain Tax Positions (UTPs)
Integrity (SSI)
Rights Manual
LafargeHolcim Accounting Design Safety And
Conflict of Interests (COI)
and Reporting Principles Construction Quality Program
(LHARP) Group Level Material Risks (DSCQP)
(GLMRs)
SAP Flexible Real Estate Information Technology
Management (RE-FX) Pension and Benefits Service Centers (ITSCs)
Governance Team (PBGT)
Business Resilience Team Record to report (R2R)
(BRT) Segregation of Duties (SoD)
Value Added Tax (VAT)
Flexible Real Estate Construction in Progress (CIP)
Management (RE-FX)
Group Reporting Unit (GRU)
Legal Entity Management
People on Board (POB)
Tool (Umbrella)
Senior Leaders Group (SLG)
SAP Governance, Risk, and
Compliance (SAP-GRC) Country Chief Executive
Officer (CCEO)
Business Service Centers
(BSCs) Group Risk Insurance Tool
(GRIT)
116 L A F A R G E H O L C I M • M I N I M U M C O N T R O L S TA N D A R D S
LafargeHolcim Ltd.
Group Internal Control
Grafenauweg 10
6300 Zug
Group.Internal-Control@lafargeholcim.com
www.lafargeholcim.com

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Minimum Control

As a global leader in our industry, LafargeHolcim adheres to the highest of

Minimum Control Standards encompass 62 mandatory controls from

These minimum control standards are mandatory throughout our

Each LafargeHolcim employee has an important role in ensuring the

It is crucial that we engage them in the Minimum Control Standards

Group Internal Control

GOVERNANCE AND COMPLIANCE 11

02 Compliance with Fair Competition laws and requirements 14 ● ● ●

03 Related party transactions and conflict of interests 15 ● ● ● ●

04 Board of Directors secretarial requirements 17 ●

05 Health & Safety 18 ● ●

07 Mitigation of business risks - Security 20 ● ● ● ●

08 Mitigation of business risks - Group insurance 22 ●

09 Mitigation of business risks - Business Resilience System 24 ● ● ●

10 Mitigation of business risks - Remediation of deficiencies and non-compliance with MCS 25 ● ● ● ● ● ●

11 Personal data protection 26 ● ●

12 Segregation of duties and user access review 28 ● ●

13 Delegation of authorities and approval workflows 30 ● ● ●

15 Review of contracts by finance 33 ● ●

16 Management of titles, licenses and permits 36 ● ● ● ●

17 Quarry reserves & provisions for rehabilitation and restoration 38 ● ● ●

18 Classification and depreciation of property, plant & equipment 40 ●

19 Physical verification of fixed assets 41 ● ● ●

20 Management of customer and material master data 44 ● ● ● ●

22 Control of customer credit limits 47 ● ●

23 Matching of sales orders, shipments and invoices 48 ● ● ●

24 Accounts receivable valuation 49 ● ● ●

25 Execution of onboarding, offboarding and transfers of workers 52 ● ● ● ● ●

27 Compliance with payroll and local labor laws 55 ● ●

28 Employee pension and benefit plans 56 ● ●

29 Management of supplier master data 60 ● ●

31 Three-way match, two way match and direct vendor invoices 64 ● ● ●

33 Accruals for expenditures not invoiced 68 ●

36 Management of access to IT systems 78 ● ●

37 Review of IT user access rights to production IT systems 79 ● ●

38 Security configuration settings and batch job management 80 ● ●

39 Data backup, storage and restoration process 81 ● ●

40 Managing changes to IT systems 82 ● ●

ACCOUNTING & CONSOLIDATION 85

41 Compliance with accounting and reporting standards (LHARP) 86 ● ●

42 Reconciliation of general ledger accounts 87 ●

43 Reconciliation of bank accounts 88 ● ● ●

44 Reconciliation of intercompany balances 89 ● ●

45 Manual journal entries 90 ● ● ●

46 Impairment of goodwill, intangible assets and PPE 91 ●

47 Transactions in a foreign currency 93 ●

48 Management of legal structure and consolidation hierarchy 94 ●

49 Consolidation of financial statements 95 ●

50 Statutory financial statements 96 ●

51 Tax risk assessment and reporting 98 ● ●

52 Tax filings and payments 99 ● ●

53 Deferred and current income tax calculations 100 ● ●

54 Transfer pricing 101 ● ●

55 Non-income (indirect) taxes 102 ● ●

56 Bank relations 104 ● ●

58 Secure payment means 107 ● ●

59 Financial instruments, borrowings, commitments and working capital schemes 109 ● ●

60 Forex, interest rate, commodities risks monitoring and hedging 111 ●

61 Environmental impacts 114 ● ● ●

62 Social impact: Human Rights & Stakeholders 115 ● ● ●

GOVERNANCE AND COMPLIANCE