APC 2010 Annual Report Download - page 119

CORPORATE GOVERNANCE
3
SUPERVISORY BOARD COMMITTEES (MEMBERS, OPERATING PROCEDURES AND MEETINGS)
Operating procedures
Meetings are called by the Committee Chairman or at the request of
the Chairman of the Supervisory Board or the President and CEO.
The Committee decided, with the Supervisory Board’s approval, to
increase the number of Annual Meetings from four to fi ve.
It may invite whomever it chooses to its meetings. The Statutory
Auditors attend meetings discussing the fi nancial statements and,
depending on the agenda, all or some of the other meetings.
It can ask the Management Board to provide it with any
documentation it feels necessary. It may also commission studies
from external consultants.
Responsibilities
A cornerstone of the Group’s internal control system, the Audit
Committee is responsible for preparing the work of the Supervisory
Board, making recommendations to the Board and issuing opinions
on fi nancial, accounting and risk management issues. Accordingly it:
•prepares the Supervisory Board’s review of the annual and interim
fi nancial statements, and notably in this respect:
–ensures that accounting policies used to prepare the
consolidated and company fi nancial statements are appropriate
and applied consistently, that all signifi cant transactions are
properly refl ected in the consolidated fi nancial statements
and that the rules governing the scope of consolidation are
correctly applied,
–analyses the scope of consolidation, risks, commitments given
–including off-balance sheet commitments-, as well as the
fi nancial postion and the cash position;
•reviews the draft Registration Document and takes on Board any
comments by the AMF in this regard, as well as the reports on the
interim fi nancial statements;
•makes recommendations concerning the appointment or re-
appointment of the Statutory Auditors;
•supervises the statutory auditing of the annual and consolidated
fi nancial statement, notably by examining the scope of the
external audit schedule and the results of the reviews carried out
by the Statutory Auditors;
•verifi es the auditors’ independence, in particular by reviewing
fees paid by the Group to their fi rm and network and by giving
prior approval for assignments that, strictly speaking, fall outside
the scope of the auditing of the fi nancial statements;
•monitors the effectiveness of internal control and risk management
systems. In particular, the Committee:
–reviews Internal Audit organisation and resources, as well as
its annual audit schedule. Receives a quarterly summary report
on the fi ndings of the audits carried out,
–reviews risk mitigation on the basis of presentations by the
relevant managers or reports by Internal Audit,
–reviews the Company’s internal control system and the draft
report of the Chairman of the Supervisory Board on internal
control,
–reviews codes of conduct, notably concerning fair trading and
ethics and examines the measures taken to ensure they are
circulated and applied.
The Audit Committee examines proposed dividend payouts and
the amount of financial authorisations submitted to the Annual
Shareholders’ Meeting.
The Audit Committee examines all fi nancial, accounting and risk
management issues referred to it by the Management Board, the
Supervisory Board or its Chairman.
The Audit Committee presents its fi ndings and recommendations
to the Board. The Chairman of the Audit Committee immediately
informs the Chairman of the Supervisory Board of any diffi culties
encountered.
Meetings in 2010
In 2010, the Audit Committee met fi ve times. The average duration
of the meetings was 3 hours and the average attendance rate
was 100%.
Each meeting was attended by the CFO, members of the Finance
Department and head of Internal Audit. The Statutory Auditors
were also invited to attended four of the fi ve meetings. In line with
the provisions of the AFEP/MEDEF Code, representatives of the
Finance Department and Internal Audit were not present during the
Statutory Auditors’ presentation at meetings devoted to the fi nancial
statements. The President and CEO did not attend any of the Audit
Committee’s meetings.
The Committee looked at the following topics:
1) fi nancial statements and fi nancial disclosures:
–review of the annual and interim fi nancial statements and of the
reports of the Management Board on the fi nancial statements,
–review of goodwill and retirement or assimilated obligations,
–review of investor relations documents concerning the annual
and interim fi nancial statements,
–review of the process for producing fi nancial information,
–review of AMF recommendations concerning the 2010
Registration Document,
–examination of to what extent the reduction in overheads can
be audited,
2) internal audit, internal control and risk management:
–update on the internal control system’s organisation and
deployment,
–review of the main audits carried out by Internal Audit,
–review of the 2011/Q1 2012 Internal Audit schedule drawn up
on the basis of risk mapping,
–review of legal risks (contracts, industrial property, Compliance),
–review of risk mitigation by means of insurance,
–review of the establishment of business continuity plans,
–update on how performance monitoring refl ects organisational
changes (One),
–update on bridge,
–update on the implementation of shared services,
–update on the implementation of the principles of responsibility,
–review of the draft report of the chairman of internal control,
3) Statutory Auditors:
–review of the fees paid to the Statutory Auditors and their
networks,
–review of the 2010/2011 external audit schedule,
4) corporate governance:
–drawing up of the 2010-2013 schedule covering the work of
the Audit Committee and more specifi cally its risk review,
–review of the fi nancial authorisations presented to the 2010
Annual Shareholders’ Meeting,
–recommended dividend for 2010.
The Audit Committee reported to the Supervisory Board on its work
in 2010 at the February17, July29, October19 and December15,
2010 meetings.
2010 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 117