APC 2015 Annual Report Download - page 147

2015 REGISTRATION DOCUMENT SCHNEIDER ELECTRIC 145
CORPORATE GOVERNANCE
3
BOARD COMMITTEES (COMPOSITION,OPERATING PROCEDURES ANDACTIVITIES)
–analyzes the scope of consolidation, risks and off-balance
sheet commitments as well as the fi nancial position and the
cash position,
–examines the process for drawing up fi nancial information;
•reviews the draft annual report, which is also the registration
document, and receives any comments by the AMF in this
regard, as well as the reports on the interim fi nancial statements
and other main fi nancial documents;
•makes recommendations concerning the appointment or re-
appointment of the statutory auditors;
•handles follow-up on legal control of annual and consolidated
accounts made by statutory auditors, notably by examining the
external audit plan and results of controls made by 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 effi ciency of internal control and risk management
systems. For this purpose:
–it shall examine the organization and resources used for internal
audit, as well as its annual work program. Receives a quarterly
summary report on the fi ndings of the audits carried out,
–reviews operational risks mapping and its year on year
evolution. It ensures procedures are implemented to prevent
and reduce them,
–reviews risk mitigation and coverage optimization,
–reviews the rollout of the Group’s internal control system
and acknowledges the outcome of entities’ self-assessment
regarding internal control. It ensures procedures are
implemented to identify and handle anomalies;
•reviews the draft report of the Chairman on internal control;
•it shall examine rules of good conduct notably concerning
competition and ethics and the measures implemented to ensure
that these rules are circulated and applied.
The Audit and Risk Committee examines proposals for distribution
as well as the amount of fi nancial authorizations submitted for
approval at Annual Shareholders’ Meetings.
The Audit and Risk Committee reviews all fi nancial and accounting
issues and those related to risk-management submitted to it by the
board of directors.
The Audit and Risk Committee presents its fi ndings and
recommendations to the board. The Chairman of the Audit
Committee keeps the Chairman and the Vice-Chairman independent
lead director promptly informed of any diffi culties encountered.
Activities in 2015
In 2015, the Audit Committee met fi ve times. The average duration
of the meetings was three hours forty-fi ve minutes and the average
attendance rate was 95%.
Each meeting was fully or partially attended by the Deputy CEO
in charge of Finance, members of the Finance Department, the
head of Internal Audit as well as the statutory auditors. Operational
Management also reported to the Committee. In line with the
provisions of the AFEP/MEDEF Code, the Chairman and CEO does
not in principle attend the committee’s meetings.
The topics discussed by the committee were as follows:
1) fi nancial statements and fi nancial disclosures:
–review of the annual and interim fi nancial statements and of the
reports on the fi nancial statements,
–review of goodwill, the Group’s tax position, provisions and
pension obligations or similar obligations,
–review of investor relations documents concerning the annual
and interim fi nancial statements,
–review of the Group’s scope of consolidation,
–review of pension commitments;
2) internal audit, internal control and risk management:
–review of the 2016/Q1 2017 Internal Audit schedule drawn up
after the risk mapping review,
–monitoring the Internal Audit road map realization related to
2015/Q1 2016, and review of main audits’ outcome,
–review of the activities of internal control, particularly the results
of assessments/self-assessments,
–review of reporting on fraud prevention systems,
–review of renewal of information system outsourcing contracts,
–review of procurement-related risks (compliance with ethical
rules, disruption of supplies,etc.),
–review of risk mitigation by means of insurance,
–review of industrial risks (safety of people and property,
industrial investments validation process, positioning versus
markets, business continuity plans, social risk),
–review of the objectives of the «I simplify» program and update
on the reorganization of the marketing function as part of this
program,
–review of the solutions risk,
–review of the Technology risk (technological monitoring and
breakthrough),
–update on the monitoring of standardization (monitoring and
capacity to infl uence),
–update on the risk management and integration of Invensys
and Electroshield Samara,
–review of the Chairman’s draft report on procedures for internal
control and risk management;
3) statutory auditors:
–review of the fees paid to the statutory auditors and to their
networks,
–review of the external audit plan,
–proposal on the renewal/appointment of statutory auditors at
the end of their current terms;
4) corporate governance:
–recommended dividend for 2015,
–study of the relationship between the work of the Audit
Committee and that of the board on major risks,
–review of the fi nancial authorizations, whose renewal was
presented to the Annual Shareholders’ Meeting of April 21,
2015.
The Audit Committee reported on its work in 2015 to the board
at the February 18, June 29 & 30, July 29, October 28, and
December9, 2015 meetings.