The Audit Committee’s review of the financial statements is accompanied by a presentation from the Chief Financial Officer describing the Company’s exposure to significant risks;
monitoring the performance of the statutory audit of the annual and consolidated financial statements by the Statutory Auditors and the independent thirdparty, as well as sustainability reporting certification.
It reviews the audit plan and the work programme of the Statutory Auditors and, where applicable, the independent thirdparty, the findings of their audits, their recommendations and the follow-up action taken further to such recommendations.
It reviews the breakdown of fees billed by the Statutory Auditors and, where applicable, the independent thirdparty.
It takes into account the findings and conclusions of the French regulatory body for statutory auditors (Haute Autorité de l’Audit) following the audits carried out;
ensuring that the Statutory Auditors and, where applicable, the independent third-party, comply with their independence requirements.
It makes a recommendation with regard to the Statutory Auditors and, where applicable, the independent thirdparty, proposed for appointment by the Annual General Meeting, and makes further recommendations for the renewal of such appointments;
approving the provision of services, in accordance with the "Code of Conduct for the provision of services that may be entrusted to the Statutory Auditors of the L’Oréal Groupe and to their networks".
The Committee decides on this point after analysing the risks related to the independence of the Statutory Auditors and of any independent third-party, and the safeguards applied by them. The Committee may therefore approve each service on a case-by-case basis or approve a set of services as a whole;
reporting regularly to the Board on the progress of its work. It also reports on the repercussions of the audit and sustainability reporting certification, as well as on the way in which this audit contributed to the integrity of financial information and sustainability reporting. It reports on the role that it has played in this process. The Committee informs the Board of Directors without delay of any difficulties encountered.
This monitoring makes it possible for the Committee to issue recommendations, where necessary, concerning the improvement of existing processes and the possible setting up of new procedures.
The Audit Committee can be consulted for all questions relating to procedures for controlling risks of an unusual nature, particularly when the Board or General Management considers it appropriate to submit such questions to this Committee.
5.2.2. Composition
All Directors who sit on this Committee have the necessary qualifications due to their professional experience and their good knowledge of the Group’s accounting and financial procedures.
As soon as they are appointed, the members of the Audit Committee must receive specific information on the Company’s accounting, financial or operational particularities.
The appointment or re-appointment of the Chairman/Chairwoman of the Audit Committee, proposed by the Nominations and Governance Committee, must be subject to a specific review by the Board.
The Chairman/Chairwoman and Chief Executive Officer, or the Chief Executive Officer where the roles are separated, is not a member of the Audit Committee.
5.2.3. Work organisation
The Chairman/Chairwoman of the Audit Committee issues guidelines for the Committee’s work each year, based on his/her judgement concerning the importance of the specific types of risk faced, subject to approval from General Management and the Board.
The Committee meets when convened by its Chairman/Chairwoman, whenever the Chairman/Chairwoman or Board deem it necessary.
The agenda of the meetings is set by the Chairman/Chairwoman of the Committee, or together with the Board of Directors where the Board calls the meeting. The agenda is sent to the Committee members before the meeting, together with the information which will be useful for their debates.
To carry out its remit successfully, the Audit Committee may also, subject to approval from General Management, obtain information from people who are able to assist it in the performance of its tasks, and in particular senior managers in charge of economic and financial issues and those in charge of information processing.
5.2.3.1. Relations with the Statutory Auditors and, where applicable, the independent third-party
The Committee regularly interviews the Statutory Auditors and, where applicable, the independent third-party, sometimes without management being present.
The Statutory Auditors and, where applicable, the independent third-party, inform the Audit Committee of:
The Statutory Auditors and, where applicable, the independent third-party, also assess, with the Audit Committee, risks related to their independence and the protective measures taken to mitigate these risks. For this purpose, the Committee obtains a statement of independence from the Statutory Auditors and, where applicable, the independent third-party.
They inform the Committee of significant Internal Control weaknesses related to the procedures for preparing and processing accounting and financial information and sustainability reporting, and provide the Committee with the documents required by law every year.
