Hermès - Registration Document 2016

2016 REGISTRATION DOCUMENT

HERMÈS INTERNATIONAL

124

CORPORATE GOVERNANCE

REPORT FROM THE CHAIRMAN OF THE SUPERVISORY BOARD ON THE CORPORATE GOVERNANCE PRINCIPLES

Tasks and activity of the Audit Committee in 2016

Missions of the Audit Committee

Activity of the Audit Committee in 2016

The Audit Committee studies and prepares certain proceedings of the

Supervisory Board and submits to the Board its opinions, proposals

and recommendations.

In application of Article L. 823-19 of the French Commercial Code

(

Code de commerce

), and without prejudice to the powers of the

Supervisory Board, which it does not replace, the missions of the

Audit Committee are:

to review and comment on the Company’s parent company and

consolidated financial statements prior to approval by the Executive

Management;

to ascertain that the accounting methods applied are relevant and

consistent;

to verify that internal data collection and control procedures

guarantee the quality of information provided;

to review the work programme and results of internal and external

audit assignments;

to carry out special tasks assigned to it by the Supervisory Board;

monitor the process of preparation of financial information and,

where appropriate, make recommendations to ensure its integrity;

monitor the effectiveness of internal control and risk management

systems, as well as internal audit where appropriate, regarding the

procedures for the preparation and processing of accounting and

financial information, without jeopardising its independence;

issue a recommendation to the Supervisory Board, prepared in

accordance with Article 16 of regulation (EU) 537/2014, on the

Statutory Auditors whose appointment or renewal is proposed to

the General Meeting;

monitor the performance of their duties by the auditors in the light

of the High Commission on Statutory Audit consecutive to controls

made pursuant to Articles L. 821-9 et seq.;

ensure compliance by the auditors of the independence

requirements of Articles L. 821-9 at seq. of the French Commercial

Code (

Code de commerce

), take measures necessary for the

implementation of paragraph 3 of Article 4 of regulation (EU)

537/2014 cited above and ensure compliance with the conditions

mentioned in Article 6 of this regulation;

approve the provision of services mentioned in Article L. 822-11-2;

report regularly to the Supervisory Board on the performance of its

duties;

also report on the results of the engagement regarding the

certification of the financial statements, on the way the

engagement contributed to the integrity of financial reporting and

the role it has played in this process;

promptly inform the Supervisory Board of any difficulties

encountered.

In the performance of these missions, the Audit Committee may

carry out site visits to obtain complete information on the Group and

to appraise the overall consistency of the internal control and risk

management system.

In 2016, the Audit Committee reviewed the following matters:

presentation of the budget for 2016;

organisation of cash;

PwC audit result;

update on incidents in 2015;

review of activities related to risk management, audit and internal control

in 2015;

proposed audit plan for 2016;

parent company and consolidated financial statements for the year ended

31 December 2015;

provisions and destruction of inventories;

presentation of the consensus of financial analysts;

review of the press release on the annual and interim results;

Statutory Auditors’ report on the consolidated financial statements;

behind-closed-doors meeting with the auditors;

risk mapping methodology for the Group;

impact of the reform of the statutory audit;

modification of prudential rules;

site visit to La Montre Hermès (presentation, plant visit and risk mapping).

As part of its mission, the Audit Committee heard from the Group Finance

Director, both with regard to the accounting data and the treasury data,

the Consolidation Director, the Audit and Risk Director, and the Statutory

Auditors.

The work and operation of the Audit Committee were assessed in 2016 as

part of the triennial formal self-assessment of the Supervisory Board, and

were deemed very satisfactory overall.