APC 2006 Annual Report Download - page 43

The Audit Committee may ask the Management Board
for copies of any and all documents that it considers
relevant or useful.
Responsibilities
A key component of the Company’s internal control
system, the Audit Committee is responsible for prepar-
ing the decisions of the Supervisory Board, making
recommendations to the Board and issuing opinions
on financial, accounting and risk management issues.
In line with these terms of reference, it:
Prepares the Supervisory Board’s review of the
annual and interim financial statements presented by
the Management Board, in particular by:
– Ensuring that accounting policies used to prepare
the consolidated and parent company financial state-
ments are appropriate and applied consistently, that all
significant transactions are properly reflected in the
consolidated financial statements and that the rules
governing the scope of consolidation are correctly
applied.
– Analyzing risks, off-balance sheet commitments and
the cash position.
Reviews the annual and interim reports drawn up by
the Management Board.
Makes recommendations, based on a review of serv-
ice proposals, concerning the appointment or re-
appointment of the external Auditors.
Examines the scope of audit engagements and the
results of audits, as well as verifying the Auditors' inde-
pendence, in particular by reviewing fees paid by the
Group to their firm and network.
Reviews the internal audit organization and
resources, as well as the internal audit program and
the executive summary of the internal auditors' reports
and the action taken to implement the internal auditors’
recommendations.
Examines proposed dividend distributions and the
amount of financial authorizations submitted for share-
holder approval at the Annual Meeting.
The Audit Committee examines all financial, account-
ing and risk management issues referred to it by the
Management Board, or by the Supervisory Board or its
Chairman.
In addition, prior to the Committee's review of the
annual and interim financial statements, the Audit
Committee Chairman meets with the external Auditors
alone, without any Company representatives present.
The Audit Committee Chairman also meets with the
head of Internal Audit four times a year without any
other Company representative present.
The Audit Committee presents its findings and recom-
mendations to the Supervisory Board and distributes
the minutes of its meetings to the Supervisory Board
members.
Meetings in 2006
In 2006, the Audit Committee of the Board of Directors
or the Supervisory Board met four times. The average
duration of the meetings was 2 hours and 15 minutes
and the average attendance rate was 94%.
Each meeting was attended by members of the
Finance Department and the head of Internal Audit.
The external Auditors were also present for most of the
**Paragraphs 2 through 4 and paragraph 8 make up
the Chairman’s report prepared in accordance with article
L225-68 of the French Commercial Code.
meetings. In addition, the Committee interviewed the
heads of the Operating Divisions. Neither the Chair-
man of the Board of Directors nor the Chairman of the
Management Board attended Audit Committee meet-
ings in 2006.
The Audit Committee reviewed the annual and interim
financial statements and the management reports.
It also reviewed the work of the internal and external
auditors. During its review of risks, the Committee
examined the measures put in place to prevent the
spread of bird flu, as well as the action taken to imple-
ment the RoHS (Restriction of Hazardous Sub-
stances) and WEEE (Waste from Electrical and Elec-
tronic Equipment) directives. It also reviewed the good-
will recognized on recent business combinations.
The Committee made recommendations to the Board
of Directors concerning the 2005 dividend.
It verified the external Auditors' independence, in par-
ticular by reviewing fees paid by the Group to their firm
and network.
The Committee reported on its activities in 2006 at the
Board of Directors’ meeting held on February 15, and
at the Supervisory Board meetings held on July 27 and
December 21, 2006.
Remunerations
and Appointments & Corporate
Governance Committee
Members
The Supervisory Board’s internal rules stipulate that
the Remunerations and Appointments & Corporate
Governance Committee must have at least three
members. It is chaired by the Chairman of the Super-
visory Board.
No changes were made to the membership of the
Remunerations and Appointments & Corporate Gover-
nance Committee following the replacement of the
Board of Directors by the Supervisory Board, except
for the replacement of René Barbier de la Serre as
Committee chairman by Henri Lachmann.
Meetings
The Remunerations and Appointments & Corporate
Governance Committee meets at least three times a
year. Meetings are called by the Committee chairman,
after consulting the Management Board Chairman.
The Committee may make enquiries of any persons of
its choice.
Responsibilities
The Committee makes recommendations to the
Supervisory Board concerning candidates for appoint-
ment to the Management Board, the Supervisory
Board and the Committees of the Supervisory Board It
also makes recommendations concerning the com-
pensation to be paid to the members of the Manage-
ment Board and to the Supervisory Board Chairman,
as well as on stock options and stock grants for Man-
agement Board members.
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