sain t-gobain annu al report 2008 annual report

• Reviews the interim and annual consolidated financial
statements and the annual financial statements
of the company as presented by senior management,
prior to their examination by the Board of Directors.
• Reviews the scope of consolidation and the reasons why
any companies have been excluded.
• Reviews material risks and off-balance sheet commitments,
based on an explanatory report drawn up by the Chief
Financial Officer.
• Makes recommendations concerning the organization
of the internal audit function, and receives a copy
of the internal audit program as well as executive
summaries of the internal audit reports.
• Reviews the external auditors’ work plan and conclusions,
as well as the post-audit report prepared by the auditors
setting out their main observations and describing
the accounting options selected for the preparation
of the financial statements.
• Conducts the auditor selection process, issues an opinion
on the proposed statutory audit fee budget, and submits
the results of the selection process to the Board.
• Reviews the advisory and other services that the auditors
and the members of their network are authorized to provide
to the Compagnie de Saint-Gobain and other Group entities
under auditor independence rules.
• Obtains from the auditors the breakdown of the fees paid
to them and to the members of their network by the Group
over the past year, by category of service, and reports
to the Board its opinion concerning the auditors’
independence.
The Committee met four times in 2008, with an attendance
rate of 100%. Three of these meetings were devoted
to reviewing in detail the provisional 2007 consolidated
financial statements (January), the final 2007 consolidated
financial statements and financial statements of the
Compagnie de Saint-Gobain (March) and the 2008 interim
consolidated financial statements (July), and discussing these
accounts with the Chief Executive Officer, the Chief Financial
Officer and the auditors.
At each meeting, it discussed with the auditors the main
audit issues discussed with the Finance department during
the accounts closing process, particularly the key risk
exposures and material commitments described
in the Chief Financial Officer’s explanatory report
to the Committee.
The Committee also received regular updates of the situation
concerning asbestos litigation in the United States.
It discussed in detail with the auditors the financial
and accounting consequences of this litigation for the
American subsidiaries and the Group, in order to present
a report on this issue to the Board at its next meeting.
The Committee also obtained assurance that a provision
was set aside to cover the potential costs arising
from investigations by the European competition authorities
(see page 110).
The Committee also obtained information from each
of the auditors concerning the amount of fees paid to them
by Group companies in 2007 for statutory audit work
and for other services. The auditors’ fees for 2007 and 2008 are
presented on page 108. A procedure issued on October 1, 2003
clearly defines the services that may be provided by
the Group’s auditors and the members of their network,
and the services that are prohibited.
During the year, the Committee also reviewed the 2008
budget, the draft report of the Chairman on internal control,
the auditors’ report on treasury transactions, the Internal Audit
and Internal Control department’s activity report for 2007,
its 2008 internal audit program and its activity report
for first-half 2008, and the technical notes issued by the
Finance department during the first six months of 2008.
Lastly, the Committee held one-to-one discussions
with the auditors, the Vice President – Financial Management,
the Vice President – Treasury, Financing, Risks & Insurance,
the Senior Vice President in charge of Internal Audit & Internal
Control, and the Chief Financial Officer, in accordance
with the recommendations of the AFEP-MEDEF corporate
governance code for public companies.
The Committee reported to the full Board on its activities
during the Board meetings of January 24, March 20, July 24
and September 18, 2008.
Appointments Committee
Jean-Martin FOLZ, Chairman
Bernard GAUTIER, from June 5, 2008
Sylvia JAY
Jean-Cyril SPINETTA
Three members of the Committee, including the Chairman,
are independent directors (see page 92).
The Appointments Committee fulfils the duties of both
the remunerations committee and the nominations
committee provided for in the AFEP-MEDEF corporate
governance code for public companies.
MANAGEMENT REPORT
99
Saint-Gobain - 2008 Annual Report