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2016 REGISTRATION DOCUMENT
HERMÈS INTERNATIONAL
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CORPORATE GOVERNANCE
3
REPORT FROM THE CHAIRMAN OF THE SUPERVISORY BOARD ON THE CORPORATE GOVERNANCE PRINCIPLES
Audit Committee rules of procedure
Version no. 2 of 8 July 2016
Purpose
These rules of procedure define the composition, missions andmethods
of organisation and operation for the Hermès International Audit
Committee, which acts under the collective and exclusive responsibility
of the Supervisory Board.
Its purpose is to enhance the quality of the Audit Committee’s work by
promoting the application of good corporate governance principles and
best practices, in the interests of ethics and greater effectiveness.
A.
Composition of the Audit Committee
Chairmanship – Number of members
The Chairman of the Audit Committee is appointed by the Supervisory
Board.
TheAudit Committeecomprisesat least fourmembers of theSupervisory
Board.
Proportion of independent members
At least half of the members of the Audit Committee must, at the time
of their appointment and for the term their office, be qualified as inde-
pendent under the Supervisory Board’s rules of procedure.
At least one of the members of the Audit Committee must be appointed
from among the independent members of the Supervisory Board and
have specific expertise in financial or accounting matters or statutory
audit.
Term of appointment to the Audit Committee
The members of the Audit Committee are appointed by the Supervisory
Board for the duration of their term of office as a member of the
Supervisory Board or for any other term defined by the Supervisory
Board. They may be reappointed indefinitely.
B.
Missions of the Audit Committee
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:
s
to review and comment on the Company’s parent company and
consolidated financial statements prior to approval by the Executive
Management;
s
to ascertain that the accounting methods applied are relevant and
consistent;
s
to verify that internal data collection and control procedures gua-
rantee the quality of information provided;
s
to review the work programme and results of internal and external
audit assignments;
s
to carry out special tasks assigned to it by the Supervisory Board;
s
monitor the process of preparation of financial information and,
where appropriate, make recommendations to ensure its integrity;
s
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 prejudice to its independence;
s
issue a recommendation to theSupervisory Board, prepared in accor-
dance with Article 16 of regulation (EU) 537/2014, on the Statutory
Auditors whose appointment or renewal is proposed to the General
Meeting;
s
monitor the performance of 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.;
s
ensure compliance by the auditors with the independence require-
ments of Articles L. 821-9
et seq.
of the French Commercial Code,
take measures necessary for the implementation of paragraph 3 of
Article 4 of regulation (EU) 537/2014 cited above and ensure com-
pliance with the conditions mentioned in Article 6 of this Regulation;
s
approve the provision of services mentioned in Article L. 822-11-2;
s
report regularly to the Supervisory Board on the performance of its
duties;
s
also report on the results of the engagement regarding the certifica-
tion of the financial statements, on the way the engagement contri-
buted to the integrity of financial reporting and the role it has played
in this process.
s
promptly inform the Supervisory Board of any difficulties
encountered.
In the performance of thesemissions, the Audit Committeemay carry out
site visits to appraise the overall consistency of the internal control and
risk management system.
C.
Operation of the Audit Committee
The Audit Committee meets as many times as necessary and at least
twiceayear,beforeannualaccountclosurebytheExecutiveManagement
and before the half-year accounts examination by theSupervisory Board.
The Audit Committee meets when convened by its Chairman, who sets
the agenda of the meeting in writing or verbally, wherever indicated
in the notice of meeting. Before each Audit Committee meeting, Audit
Committee members are sent, in good time, with reasonable lead time
and subject to confidentiality requirements, a file containing documenta-
tion on items on the agenda requiring prior analysis and review.
TheroleofsecretaryoftheAuditCommitteemeetingsisperformed,ifthey
are present, by the Audit and Risk Management Director, otherwise by a
member of the Audit Committee appointed as reporter by the Chairman.
The proceedings are noted in minutes which are entered in a special
register and signed by the Chairman of the Audit Committee.
Certain persons who are not members of the Audit Committee – in
particular the Statutory Auditors, the Audit and Risk Management
Director, the Financial Director and the Executive Management – are
regularly invited to Audit Committee meetings. The Audit Committee may
invite other Senior Executives for targeted exchanges, based on addi-