Audit Committee

Audit Committee

Composition

In accordance with the AFEP/MEDEF Corporate Governance Code, two thirds of the committee’s members are independent and none is a Corporate Officer. Since the Audit Committee was formed on 24 February 2003, its members have always been chosen for their expertise in finance or accounting.

The Audit Committee’s members are Laurence DANON ARNAUD, Chairwoman, independent Director, Pascaline de DREUZY, independent Director, and Pascal GRANGE. Throughout their careers, the members have gained a wealth of experience in corporate management as well as in economics and finance.

Remit

The Audit Committee is tasked, by the Board of Directors and in accordance with the French law, European regulations and the AFEP/MEDEF Code applicable in France, with follow-up on the preparation and monitoring of accounting, financial and non-financial information; internal control and risk management systems; and issues related to the Statutory Auditors;

In particular, it oversees:

■ the process for preparing financial information, which involves the committee:

−  examining the individual and consolidated financial statements before they are presented to the Board,

−  ensuring the appropriateness and consistency of the accounting methods adopted to prepare the financial statements,

−  examining changes that may have a material impact on the financial statements,

−  examining the principal estimates, judgements and options for closing the financial statements, as well as the main changes in the scope of consolidation,

−  establishing if needed recommendations to guarantee the financial information integrity;

■ the effectiveness of the internal control and risk management systems; the internal control procedures for the preparation of the financial statements, while respecting its independence; it oversees:

■ the internal control procedures for the preparation of the financial statements, with the assistance of internal departments and competent advisors; the major accounting and financial risks of the firm, their evolution and and the procedures to control them;

As such, it:

−  examines once a year the major risks, their evolution and the procedures to control them,

−  examines the major risks concerning the information systems,

−  examines once a year the synthesis of the internal control self-assessment,

−  examines at least once a year the major accounting and financial risks, their evolution and the procedures to control them;

■ the audit of the individual and consolidated financial statements by the Statutory Auditors;

As such, it:

−  directs the procedure for selecting and reappointing the Statutory Auditors,

−  makes a recommendation on the Statutory Auditors proposed to the General Meeting for appointment,

−  ensures the independence of the Statutory Auditors as defined by the texts in application, to this end, it examines in detail the fees paid by the company and the Group to the Statutory Auditors and checks the proportion of these fees in the revenues of each audit firm for services other than the statutory audit of the financial statements,

−  validates the supply of services other than the statutory audit of the financial statements ; it adjudicates on it after controling the risks and the management of the Statutory Auditors independence,

−  reports to the Board of Directors on the results of the statutory audit of the financial statements, the way it contributed to the integrity of the financial information and the role it had in the mission;

■ the reports and recommendations to the Board of Directors on the foregoing matters, not only on a periodic basis and at the balance sheet date, but whenever a noteworthy event occurs;

■ the reports to the Board of Directors without delay on any difficulties encountered.