APC 2007 Annual Report Download - page 45

43
Corporate Governance
2
4. Committees of
the Supervisory Board
(members, operating
procedures
and meetings)**
The Supervisory Board has drafted internal rules govern-
ing the operating procedures and missions of the Audit
Committee and the Remunerations and Appointments &
Corporate Governance Committee. Their members are ap-
pointed by the Supervisory Board, based on recommen-
dations from the Remunerations and Appointments &
Corporate Governance Committee. After checking with the
Chairman of the Supervisory Board, the Committees may
commission research from outside consultants, and they
may also invite any persons of their choice to attend their
meetings, as required.
Audit Committee
Members
The Supervisory Board’s internal rules stipulate that the
Audit Committee must have at least three members. Two
thirds of the members must be independent and at least
one must have in-depth knowledge of accounting stan-
dards combined with hands-on experience of applying
these standards and producing financial statements.
No changes were made to the membership of the Audit
Committee following the replacement of the Board of Di-
rectors by the Supervisory Board. The four members –
Gérard de La Martinière (chairman), James Ross, Piero
Sierra and Serge Weinberg, are all independent and have
the necessary accounting experience to perform their
duties.
Meetings
The Audit Committee meets at least four times a year.
Meetings are called by the Committee chairman, the Su-
pervisory Board Chairman or the Management Board
Chairman.
The external Auditors attend the meetings devoted to ex-
amining the annual and interim financial statements and
the Committee may also invite any other persons of its
choice to answer its questions.
The Audit Committee may ask the Management Board for
copies of any and all documents that it considers relevant
or useful. It may also commission studies from outside con-
sultants.
Responsibilities
A key component of the Company’s internal control sys-
tem, the Audit Committee is responsible for preparing the
decisions of the Supervisory Board, making recommen-
dations to the Board and issuing opinions on financial, ac-
counting 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 Man-
agement Board, in particular by:
- Ensuring that accounting policies used to prepare the
consolidated and parent company financial statements are
appropriate and applied consistently, that all significant
transactions are properly reflected in the consolidated fi-
nancial 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 service
proposals, concerning the appointment or re- appointment
of the external Auditors.
Examines the scope of audit engagements and the re-
sults of audits. It verifies the Auditors' independence, 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’ recommenda-
tions.
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, accounting
and risk management issues referred to it by the Manage-
ment 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 Com-
pany 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 mem-
bers.
Meetings in 2007
In 2007, the Audit Committee met four times. The average
duration of the meetings was 2 hours and the average at-
tendance 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 when the interim and annual fi-
nancial statements were reviewed. In addition, the Com-
mittee interviewed the heads of the Operating Divisions.
The Chairman of the Management Board did not attend
any of the Audit Committee’s meetings.
The Audit Committee reviewed the annual and interim fi-
nancial statements and the management reports.
It reviewed the internal audit program, which is based on
risk mapping presented to the Committee, and the results
of the major audits. The Committee also reviewed the work
of the external auditors. As part of its risk review, the Com-
mittee focused in particular on the status of the contract
with Capgemini to build and deploy a core system and out-
source facilities management in Europe. It also reviewed
the goodwill recognized on recent business combinations.
The Committee made recommendations to the Board of
Directors concerning the 2006 dividend and analyzed the
financial authorizations requested at the Annual Meeting.