L'Oréal - 2018 Registration Document

Corporate Governance PREAMBLE

the proposed strategic orientations to be defined by the s Board with a view to consultation of the Central Works Council. More generally, the Committee debates all questions considered essential for the future strategy of the Group and for preserving its main financial balances. Work organisation 5.1.2. It meets when convened by the Chairman/Chairwoman of the Committee whenever he/she or the Board considers this appropriate. The agenda of the meetings is set by the Chairman/ Chairwoman of the Committee, in conjunction with the Board of Directors if the Board initiates the meeting. The Strategy and Sustainable Development Committee reports on its work to the Board whenever necessary, and at least once a year. The Audit Committee, acting under the responsibility of the members of the Board, is responsible for monitoring issues relating to the preparation and control of accounting and financial and non-financial information, the Internal Control and risk management systems, and questions relating to the Statutory Auditors. The Audit Committee must make sure that the General Management has at its disposal the means to enable it to identify and manage the economic, financial, non-financial, and legal risks facing the Group inside and outside France in carrying out its normal or exceptional operations. Without prejudice to the areas of authority of the Board of Directors, this Committee is responsible in particular for: carrying out the process for preparation of financial and s non-financial information and, where applicable, making recommendations to guarantee the integrity thereof. The Committee is informed of the accounting rules applicable within the Group. Any issues that may be encountered in the due and proper application of such rules are referred to it. It examines any proposal for a change in accounting standards or in accounting methods and keeps itself informed in particular with regard to accounting standards at national and international level. The review of the accounts by the Audit Committee is accompanied by a presentation by the Vice-President, Finance describing the Company’s significant off-balance sheet commitments; monitoring the efficiency of the Internal Control and risk s management systems, and Internal Audit, in order to obtain reasonable assurance with regard to their effectiveness and their coherent application. It is also responsible for monitoring the Group’s main risk exposures and sensitivities. The Committee reviews, in Audit Committee 5.2 Remit 5.2.1.

particular, the programme and objectives of the Internal Audit Department and reviews the main topics that it identifies as well as the Internal Control systems methods and procedures used. It conducts an annual review of the section of the Management Report on risk factors and Internal Control and risk management procedures. The Audit Committee’s review of the financial statements is accompanied by a presentation by the Vice- President, Finance describing the Company’s exposure to significant risks; monitoring the performance of the statutory audit in s respect of the annual and, where applicable, the consolidated financial statements by the Statutory Auditors. It reviews the audit plan and the Statutory Auditors’ work programme, the findings of their audits, their recommendations and the follow-up action taken further to such recommendations. It reviews the breakdown of the fees billed by the Statutory Auditors between audit services as such, audit-related work and any other services they provide. It takes into account the findings and conclusions of the Haut Conseil du Commissariat aux Comptes (the Superior Council of Statutory Auditors) following the audits carried out pursuant to Articles L. 821-9 et seq. of the French Commercial Code; making sure that the Statutory Auditors comply with their s independence requirements. It makes a recommendation with regard to the Statutory Auditors proposed for appointment by the Annual General Meeting, and makes further recommendations for the renewal of such appointments, in accordance with Article L. 823-3-1 of the French Commercial Code; approving the provision of the non-audit services s provided by the Statutory Auditors, referred to in Article L. 822-11-2 of the French Commercial Code, in accordance with the “Code of Conduct for the provision of services that may be entrusted to the Statutory Auditors of the L’Oréal Group and to their networks” approved by the Audit Committee at its meeting on 6 December 2016 and approved by the Board of Directors at its meeting on 9 February 2017. It makes a decision on this issue after having analysed the risks with regard to the independence of the Statutory Auditors and the protective measures they apply. The Committee can thus approve each non-audit service on a case-by-case basis or approve a set of services; reporting regularly to the Board on the performance of s its remit. It also reports on the repercussions of the audit engagement, the way in which this engagement contributed to the integrity of financial information and the role that it played in this process. The Committee informs the Board of Directors without delay of any difficulty encountered.

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REGISTRATION DOCUMENT / L'ORÉAL 2018

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