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In application of its internal rules, the Audit Committee meets at least four times a year, mainly to:
- review the accounts and the consistency of the accounting methods used for the Lagardère SCA parent company and consolidated financial statements, and monitor the process for preparing financial information;
- monitor the audit of the parent company and consolidated financial statements by the Statutory Auditors;
- monitor the Statutory Auditors’ independence;
- issue a recommendation on the Statutory Auditors nominated for re-appointment at the General Meeting;
- ensure that the Company has internal control and risk management procedures, particularly procedures for (i) the preparation and processing of accounting and financial information used to prepare the accounts, (ii) risk assessment and management, (iii) compliance of Lagardère SCA and its subsidiaries with the main regulations applicable to them; the Audit Committee is informed of any observations and/or suggestions from the Statutory Auditors regarding these internal control procedures and examines the report of the Chairman of the Supervisory Board on internal control and risk management procedures;
- monitor the efficiency of internal control and risk management systems;
- more specifically, examine all matters pertaining to internal auditing of the Company and its activities, the audit plan, organisation, operation and implementation;
- review the agreements directly or indirectly linking the Group and the senior managers of Lagardère SCA: the Managing Partners' salaries are paid by Lagardère Capital & Management, which is bound to the Group by a service agreement. Application of this agreement, which has been approved by the Board and the shareholders as a related-party agreement, is monitored regularly. The Board has delegated this task to the Audit Committee, which includes the amount of expenses reinvoiced under the contract, essentially comprising the Managing Partners’ remuneration;
- prepare an annual summary of business over the past year for release to the shareholders (through the report of the Supervisory Board and the report of the Chairman of the Supervisory Board).
Audit Committee members are appointed for their financial and/or accounting skills, assessed with particular regard to their past career (positions held in general or financial management or in an audit firm), academic background or specific knowledge of the Company’s business. The expertise of the members of the Audit Committee is described at length in section 7.2.3 of the Reference Document.
At 31 December 2015, the Audit Committee comprised Xavier de Sarrau (Chairman), Nathalie Andrieux, François David, Aline Sylla-Walbaum and Patrick Valroff, all of whom are independent members (see section 1 of this report).
The members of the Audit Committee interview the Group’s main senior executives when necessary, and the Statutory Auditors also present a report on their work. In addition, Audit Committee members reserve the right to interview the Statutory Auditors without Management in attendance and to consult external experts.
The Chairman of the Audit Committee reports to the members of the Board on the work conducted by the Audit Committee.
During 2015, the Audit Committee met six times with an average attendance rate of 90%, including two meetings to review the annual and interim financial statements more than five days before the Supervisory Board’s meetings. The attendance rate was 100% for the 3 March, May and July meetings, and 80% for the 5 March, October and November meetings.
The meeting of 3 March involved a review of the impairment tests on intangible assets for the purposes of the 2014 financial statements as well as a presentation of the latest updates and IT security processes implemented.
The meeting of 5 March was held to examine the 2014 consolidated financial statements, and to present and review the Chairman’s draft report on internal control and risk management.
On 19 May, the Committee focused on the internal audit activity during the first half of 2015 and reviewed the fees of the Statutory Auditors. The Group's tax management processes and tax policy were also presented to the Committee. Lastly, it reviewed relations with Lagardère Capital & Management (LC&M).
On 29 July, the Committee reviewed the Group’s consolidated financial statements for the first half of 2015 and was given a presentation on the Group's financing policy.
On 6 October, accounting firm Deloitte presented the findings of its external review of the internal audit, risk management and internal control, compliance and IT security procedures. The risk map and the results of the internal control self assessment were also presented to the Audit Committee.
Lastly, at the meeting of 17 November, the Committee reviewed internal audit activities during the second half of 2015 and the audit plan for 2016. It was also given a report on legal disputes by the Group Legal Department and a progress report on Group Compliance activities.
When the Audit Committee reviewed the financial statements, the Chief Financial Officer gave a presentation of the Group’s risk exposure and significant off-balance sheet commitments.
These meetings took place in the presence of the Chief Financial Officer, Deputy Chief Financial Officer, the Internal Audit Manager and the Statutory Auditors. Depending on the issues discussed, other executives and, in particular, the Secretary General, Group TaxDirector, Accounting Director, Director of Risk and Internal Control, Group Treasury and Finance Director, the Group IT Director and General Counsel, as well as certain members of their teams were asked to provide input on an as-needed basis.
Arnaud Lagardère Editorial"The Lagardère group is forging ahead with its transformation and we are delivering on our commitments, as demonstrated by our solid operating and financial performance in 2015, especially the sharp improvement in profitability ..."
The group's activities
The Lagardère group is a global leader in content publishing, production, broadcasting and distribution, whose powerful brands leverage its virtual and physical networks to attract and enjoy qualified audiences.
The Group's business model relies on creating a lasting and exclusive relationship between the content it offers and its customers.
It is structured around four business lines.