LEGRAND / 2018 Registration document

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CORPORATE GOVERNANCE

ADMINISTRATION AND MANAGEMENT OF THE COMPANY

W to ensure that remedial action is taken in the event of significant weaknesses or flaws; W to examine material risks and off-balance-sheet commitments, to assess the importance of any failures or weaknesses which are communicated to it and if necessary, to inform the Board of Directors; W to ensure the relevance and quality of the Company’s financial reporting; W to hold meetings with the person in charge of Corporate Social Responsibility (CSR) on (i) risks, especially in view of the CSR risk map, (ii) the conclusions of the independent third-party body in charge of reviewing extra-financial data, and (iii) the methods for determining and analyzing the roadmap. The Audit Committee may decide, with approval from the Board of Directors, to entrust special assignments to one of its members, it being stipulated that in accordance with the provisions of article 3.5 of the Board of Directors’ internal rules, undertaking such tasks may give rise to additional attendance fees. At Audit Committee meetings dealing with evaluation of the process for preparing and handling accounting, financial and extra-financial the Statutory Auditors report on the performance of their duties and the conclusions of their work. The Audit Committee is informed of the main findings of the Statutory Auditors and internal audit as regards the effectiveness of internal control and risk management systems. It hears the views of the persons responsible for internal audit and risk management. It is informed about the internal audit program and receives internal audit reports or a regular summary of those reports. W As regards the review of the financial statements , the Board of Directors entrusts the Audit Committee with the following tasks: W tomonitor the financial reporting process and, where appropriate, to make recommendations to ensure its soundness; W to carry out a prior examination of the draft statutory and consolidated financial statements, whether annual, half-yearly or quarterly, in order to ascertain the conditions in which they were prepared and to ensure the relevance and consistency of the accounting rules and principles adopted; W to examine the method and scope of consolidation applied in the financial statements; W to ensure the proper accounting treatment of material transactions at Group level; W to ascertain regularly the financial position, cash flow and significant commitments of the Company and the Group. The review of financial statements by the Audit Committee is accompanied by a presentation from the Statutory Auditors stressing the essential points not only of the results of the statutory audit, in particular the audit adjustments and material internal-control weaknesses identified during the Auditors’ work, but also of the accounting options selected. When reviewing the financial statements, the Audit Committee may consider major transactions in connection with which conflicts of interest could have arisen.

The review of financial statements by the Audit Committee should also be accompanied by a presentation frommanagement describing the Company’s risk exposures, its material off-balance- sheet commitments, as well as the accounting options selected. More generally, for the review of financial statements, the Audit Committee may question, without the presence of executives or directors who play active roles in the Company, any person who, in one capacity or another, takes part in preparing or auditing the financial statements (finance department, internal audit department and statutory auditors). W As regards external control procedures , the Audit Committee’s main task is to ensure the proper examination of the annual statutory and consolidated financial statements by the Statutory Auditors, as well as their independence and objectivity: W by ensuring that the Statutory Auditors fulfill their duty in performing the statutory audit of the annual statutory and consolidated financial statements; W by overseeing the selection procedure for the Statutory Auditors pursuant to the applicable regulations and examining the issues relating to the appointment, renewal or removal of the Company’s Statutory Auditors. At the end of the selection procedure for the Statutory Auditors, the Audit Committee issues a recommendation to the Board of Directors on the Statutory Auditors proposed for appointment or re-appointment by the Shareholders’ General Meeting in compliance with the applicable regulations; W by receiving each year from the Statutory Auditors: (i) their declaration of independence; (ii) information about the fees paid to the network of Statutory Auditors by companies controlled by the Company or the entity controlling the Company; and (iii) information concerning the services performed in respect of Services other than the Certification of Financial Statements; W by approving the provision of Services other than the Certification of Financial Statements by the Statutory Auditors, pursuant to the conditions provided for by the internal procedure of pre-authorization, and in particular after having analyzed the risks to the independence of the Statutory Auditors and the safeguarding measures applied by them; W by examining the amount and details of the remuneration paid by the Group to the Statutory Auditors and to any network to which they may belong. In this respect, the Audit Committee must obtain details of the fees paid by the Company and its Group to the Statutory Auditors and to any network to which they may belong, and to ensure that the amount of such fees, or the fraction they represent of the total revenues of the Statutory Auditors and their network, are not such that the independence of the Statutory Auditors might be affected. W by receiving the supplementary report to the audit report;

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LEGRAND

REGISTRATION DOCUMENT 2018