1.PURPOSE AND USAGE OF BUSINESS STRUCTURES IN BFC

Solvay IFRS reporting is organized per legal companies (one reporting package per legal company) reporting their Financial Statements (P&L, Balance Sheet and Cash Flow Statement) on a monthly basis. To allow Businesses to get their Financial results, each legal company will in addition split its results on Business dimensions. 

The following items of Financial Statements require an allocation per Business:

• P&L until EBIT (Operating Income)
• Internal sales and external sales
• Working Capital (stocks, acc. receivables and payables), CAPEX (capital expenditures), Fixed assets and Investments
• Free Cash flow

It means that Group IFRS Consolidated results can be obtained as sum of legal companies and as sum of Businesses.

This IFRS reporting per Businesses is used by both Businesses and Corporate Controlling teams to prepare the analysis of Solvay Businesses performance included in both Financial press releases every quarter and Annual report.

To be noted that Business structures are also used in Controlling reporting categories (RSB and PREV).

2.BUSINESS STRUCTURES HIERARCHIES IN BFC

3. OVERALL PROCESS FOR BUSINESS STRUCTURES UPDATES 

3.1. PLANNING

Process of Business structures updates is organized yearly through a "3 steps / waves" cycle

Best practice is to start in Q3 Y the identification and setup of Business structures changes expected for Go Live Jan 1st Y+1

Wave 1 - October Y: 1st set of expected changes needed for Budget (Controlling cycle)

• Needed for budget exercise in PREV reporting category
• Only new structure items are created with "NEW " value in "Changes" characteristic of both Actvity1 and Activity2 reference tables from Dimension builder (to avoid usage in on going Y Actuals)

Wave 2 - December Y : 2nd set of changes (late answers from GBU's) / Creation of New objects in BFC

• Late decisions from GBU's (not communicated earlier in October)
• Only new structure items are created with "NEW " value in "Changes" characteristic of both Actvity1 and Activity2 reference tables from Dimension builder (to avoid usage in on going Y Actuals)

Wave 3 - end of January Y+1 : Activation/Deactivation in BFC for Y+1 reportings

• GO to be given by Corporate Controlling - when Year end Y-1 results finalized (usually achieved around end of January)
• BFC set up launched around January 25th to have few days before January Y+1 reporting generation
• In this last round:
  • "NEW" values removed to blank
  • "OLD" values set up to block usage on Activity 1 & 2 not to be used anymore in Y+1 ACTUALS
  • updates in hierarchies content (change of links)
  • update of descriptions to add OLD when required
• Not forgetting impacts on Business users accesses: as Business accesses are based on GBU codes, any creation of a new GBU code is expected to require updates (new GBU code to be added) of accesses of Businesses users belonging to the new GBU
• Not forgetting impacts on Filters from Dimension builder: such filters have been created to allow artificial combination of several GBU's (to keep track of historical business structures)

Any change of Business structures out of this yearly cycle (i.e. during the year) is technically feasible in BFC structures and ERP Master data tables. However never recommended as restatement of past months (since Jan 1st Y+1) is a heavy exercise in ERP's

3.2. ACTORS AND REFERENCE FILE TO COLLECT Y+1 BUSINESS STRUCTURE CHANGES

The following actors are involved:

• Corporate Controlling
  • Coordinates the collection of changes with Businesses and inside Corporate Controlling
  • Challenges, when appropriate, the proposed changes - can consult for advice FSL teams - BFC Admin and SU MAC Master Data team
  • Communicates the changes received to BFC Admin and FSL SU MAC Master Data team
  • Controls the BFC set up of changes of Business structures before piloting to BFC Production database

• BFC Admin team:
  • Create and update the Reference file gathering the BFC Business structures changes for Y+1
    • File maintained in a Google sheet format - Link to example "2022 Business structures"
    • When finalized , Reference file is posted in GAR AODOC Team site  - 1 folder per year

• • "Y+1" Reference file is created from save as of "Y current business structures" Reference file
  • Then it is updated highlighting the different type of changes required for Y+1 (received from Corporate Controlling): 
    • New objects to be created and used from Y+1 reportings - yellow back ground in the example above
      • As explained earlier in this procedure, BFC Admin will propose the BFC codification, checking with FSL SU MAC Master Data team that no constraint with ERP's
    • Old objects not to be used anymore from Y+1 reportings - pink back ground in the example above
    • Change of links (transfers) inside hierarchies - red back ground in the example above

• Once changes collected and new required codifications validated, BFC Admin will perform the associated BFC customizing
• Updates Business users accesses and Business filters, when required, occurs before January Y+1 reporting

• FSL SU MAC Master Data team:
  • Challenges when needed the requested changes
  • Ensure coordination of Business structures updates in the ERP's with Business Data Administrators, FSL Master data teams and IT
  • Collaborates with BFC Admin to align on BFC codifications
  • Ensure communication and global coordination within Finance network (FSL, Businesses...)

4. CREATION / UPDATES OF BUSINESS STRUCTURES IN BFC

4.1. CREATION OF NEW OBJECTS

Timing : Wave 2 - December Y

Sequence of creation: From upper levels to lower ones

• In case of creation of new objects at each level of the hierarchies and linked each others , it is recommended to start the creation at the upper level of the hierarchy.
  • Example below creation of a new Activity 1 associated to a new BU => BFC Admin will create 1st the upper level (BU) and then after the lower one (MARK)

• Also recommended to start 1st creating new CGU "Activity2" codes and then after new MARK "Activity1"

4.1.4 Creation of new GBU / SEGMOP / CLUSTER

Customizing principles are the same than the ones described for the BU "Business Unit" level.

Note that those levels can be created either using the MARK or the CGU hierarchy (no need to create twice in each as single tables for each GBU SEGMOP and CLUSTER levels common to both hierarchies).

Note: As on BU level, no need on those levels to manage the specific characteristics existing on MARK and CGU (change, RSB transfer, value for margin in inventories...) as they are not used for data entry but only for retrieval purposes.

4.2. UPDATE OF OBJECTS: "OLD" & "EMPTY" VALUES (MARK"Activity1" and CGU "Activity2" levels only)

Timing : Wave 3 - end of January Y+1

Connect to BFC_Top:

Select the “Dimension Builder” module in the "Setup" domain.

Then select the MARK and CGU dimensions and expand the hierarchy to access to the upper levels.

4.2.1 SWITCH FROM "NEW" TO "EMPTY" VALUE ON "CHANGE" CHARACTERISTIC

Doing this move, the new created object (either MARK or CGU) will become available for usage in package data entry in Y+1 ACTUAL's reportings thanks to filters integrated in BFC users accesses providing accesses only on MARK and CGU objects with EMPTY value on "Change" characteristic :

4.2.2 FLAG AS "OLD"

Doing this move, the existing object (either MARK or CGU) expected not to be used anymore from Y+1 will become blocked (unavailable) for usage in package data entry in Y+1 ACTUAL's reportings thanks to filters integrated in BFC users accesses providing accesses only on MARK and CGU objects with empty value (different from OLD and NEW) on "Change" characteristic :

4.3. CHANGE OF LINKS INSIDE HIERARCHIES (ANY LEVEL INSIDE THE HIERACHIES)

Timing : Wave 3 - end of January Y+1

This move has not impact on data entry in reporting packages. However, it impacts the aggregation of each level and thus Business results obtained in retrieval reports. 

Note that MARK and CGU hierarchies are not subject to any historisation/archiving. This means that any transfers inside will apply immediately to all reporting periods (past, current and future). This is why set up of manual filters (MARK and CGU dimensions) can be requested to BFC Admin by Corporate Controlling to artificially rebuild the past hierarchies aggregations and allow data retrievals on the past results using those filters. 

Connect to BFC_Top:

Select the “Dimension Builder” module in the "Setup" domain.

Then select the MARK and CGU dimensions and expand the hierarchy to access to the upper levels.

4.4. FINAL VALIDATION & CONSISTENCY CHECKS (APPLICABLE TO EACH WAVE)

Timing : @ each wave of customizing

Step1 - BFC Admin team to perform consistency checks in BFC_TOP (customizing database):

In each MARK and CGU table,

• Select "Load data" mode and display in columns all characteristics  + EN & FR descriptions
  • Filter on "last changed" to see the latest customized objects
  • Compare changes done (codes, descriptions, values on characteristics) versus Reference file to ensure nothing has been missed

• Select "Hierarchy" mode, expand the Hierarchy and
  • Search for NEW objects created from Reference file to check their description and right place in the hierarchy
  • Search for OLD objects listed in Reference file to check that their description has been well updated ("no more used to be used from ...")
  • Search for TRANSFERS listed in reference file to check that they have been moved at the right place in the hierarchy

Example for NEW object NBGH (MARK) and NBGH2 (BU)

Example for OLD object CMPM (MARK)

Example for TRANSFERS of TSDP (MARK) from TSDPH (BU) to TSMIN (BU)

Step 2 - BFC Admin team to pilot changes from BFC_Top (Customizing database) to BFC_WORK (Testing database) for review and validation from Corporate Controlling

• BFC_TOP: Objects to piloted : MARK and CGU references tables members (it includes the full hierarchies content: BU, GBU...)
• BFC_TOP: Type of task to be used: FCWORK code (not to confuse with sending of tasks to Production)
• 

• Connect to BFC_WORK, launch Scan and Reception of FCWORK task
  • Check in Dimension Builder in both MARK and CGU tables that objects (NEW / OLD / TRANSFERS) are there
• Inform Corporate Controlling asking for review and final authorization to pilot to BFC production

5. PILOTING TO BFC_PRODUCTION 

Timing : @ each wave of customizing ONLY when authorized by Corporate Controlling

• Task to be prepared in BFC_TOP: EXPL-GESTION task including MARK and CGU Reference table members

• Launch the sending of the task 
• Connect to BFC_PRODUCTION
  • Launch Scan
  • Once Scan terminated, launch the reception of EXPL-GESTION task
  • Check in Dimension Builder in both MARK and CGU tables that objects (NEW / OLD / TRANSFERS) are there
• Confirm to Corporate Controlling the effective transport of Business structures changes to Production
• Complete the related Internal Controls (archiving of authorization obtained from Corporate Controlling to pilot to production) - refer to BFC Internal controls procedure

6. DOCUMENTATION UPDATES IN GAR AODOC (BFC Admin team in charge)

Timing : Dec Y + "on flow" during Y+1 each time there is a change

Reference file gathering the BFC Business structures changes for Y+1

• Maintained in a Google sheet format - Link to example "2022 Business structures"
• When finalized , Reference file has to be posted in GAR AODOC Team site  - 1 folder per year
• When different versions applicable for the same year, each version has to be posted keeping the past ones (important to keep tracking of the past versions and justification in front of external Auditors)

7. RELATED IMPACTS ON BFC USERS ACCESSES

Timing : January Y+1 + "on flow" during Y+1 in case of GBU creation

3 types of users in BFC:

• Corporate and Transversal teams: as they operate on a WW basis, usually no restriction on legal companies and on Businesses
• Accounting teams - data entry: usually accesses granted using filters on legal companies - meaning that no restriction on Business dimensions
• Business teams (controllers, FD's...) - retrievals: usually accesses granted using filters on GBU's (1 or several granted) - meaning that no restriction on legal companies (access to legal companies reporting on those granted GBU('s)

As a consequence, Business structure changes impacts Business accesses in BFC each time a new GBU is created

Process to be followed:

• Ask GBU FD (Finance Director) who in his/her team has to get access to the new created GBU (support  / advice can be requested from Corporate Controlling if needed)
• Once list obtained, process the updates in BFC Users module - Refer to the BFC Users Access management Procedure for more details:
  • New Filters in MARK and GBU dimensions from the Dimension builder) 
  • New values on data entry analysis accesses
  • New values in Data access groups
  • Users accounts updates
• Inform the impacted users of new accesses granted
• Complete the related Internal Controls (archiving answer from GBU FD as evidence) - Refer to BFC Internal controls procedure

Example : July 2021 creation of new GBU code O&G "Oil&Gas"made of activities previously hosted in both CS "Novecare" and TS" Technology solutions" GBU's

• Contact taken with O&G GBU FD Mark Dahlinger requesting the list of impacted users to get access to the new GBU and confirmation if their existing accesses on CS and TS GBU's should be kept or not

• In the BFC_Production database:

• Dimension builder - Filters on MARK and CGU dimensions : new filters created to manage the different combinations of GBU's listed in GBU FD's file
• 

• Users module  - Data entry-analysis access: new values created to manage the different combinations of GBU's listed in GBU FD's file, integrating the new MARK and CGU filters created in the step before

• Users module - Data access groups: new values created to manage the different combinations of GBU's listed in GBU FD's file and integrating the new Data entry-analysis access values created in the step before

•  
  • Users module  - Users account : User Samantha Harris - Data Access Group updated with the new Data access group "BU OG+CS" value created (added OG "Oil&Gas" GBU while CS "Novecare" access kept (as requested in GBU FD file))

END OF THE PROCEDURE