Annual Report 2017

Rothschild & Co | Annual Report 2017

1. Overview

4. Financial statements

Management report

2. Business review

1.2.6.5 ASSESSMENT OF THE SUPERVISORY BOARD’S

ORGANISATION AND WORKING METHODS

At the date of publication of this report on the Company’s website, the

Company Secretary, in liaison with the Chairman of the Supervisory Board,

conducted a self-assessment of the Supervisory Board’s organisation and

working methods as regards the 2017 financial year.

Bearing in mind in the context of the meeting schedule that a self-

assessment could not be implemented before the meeting of the

Supervisory Board on 13 March 2018 convened mainly to review the

consolidated and solo parent company accounts as at 31 December 2017,

the Supervisory Board, following the opinion of its Remuneration and

Nomination Committee, considered it more appropriate to discuss the

results of this self-assessment during its meeting on 17 May 2018 following

the shareholders’ annual general meeting.

The same report for the next financial year will provide the results of this

self-assessment of the Supervisory Board, and the main considerations

and actions if any, decided accordingly.

1.2.7 Specialised committees of the Supervisory

Board

In accordance with legal and regulatory provisions, the Supervisory Board

set up an Audit Committee, a Remuneration and Nomination Committee

and a Risk Committee, and defined the composition of those committees

as well as their tasks and practices.

Only members of the Supervisory Board may sit on these committees and

only for their term of office on the Supervisory Board. The composition of

each committee is decided by the Supervisory Board.

Members of the Management Board of the Company’s Managing Partner

may attend a meeting of a Supervisory Board’s committee if so requested

or at the invitation of the committee’s chairman.

1.2.7.1 AUDIT COMMITTEE

1.2.7.1.1 COMPOSITION

As at 31 December 2017, the Audit Committee was composed of

four members: Mr. Peter Smith (Chairman and independent member),

Ms. Carole Piwnica (independent member), Mr. Sylvain Héfès and

Mr. André Lévy-Lang (independent member).

1.2.7.1.2 RESPONSIBILITIES

The Audit Committee is mainly responsible for:

• reviewing the process of drawing up financial information such

as annual accounts, half-year accounts and quarterly information;

• reviewing the statutory audit of the annual accounts and consolidated

accounts by the Statutory Auditors;

• reviewing the independence and objectivity of the Statutory Auditors;

• giving a recommendation regarding the appointment of the Statutory

Auditors proposed to the Ordinary General Meeting of Shareholders; and

• reviewing the effectiveness of the Group’s internal control systems.

The Audit Committee is empowered to obtain any information it considers

necessary to fulfil its task from the Company’s executive body, its staff,

and the Company’s or its subsidiaries’ Statutory Auditors. Audit Committee

members have the opportunity, if necessary, to seek the opinion of the

senior executives of the Group as well as that of the Statutory Auditors.

1.2.7.1.3 ACTIVITY

The Audit Committee meets at least four times a year or more frequently

if so required. As a result of the change of year end from 31 March to

31 December, a new meeting schedule has been adopted to reflect

this change.

During the nine months to 31 December 2017, the Audit Committee met

four times, with an average rate of attendance of 87.5% for all meetings.

Before each meeting, every member receives a file containing all the

documentation, notes and reports relating to each item on the agenda.

The Group Chief Financial Officer, the Group External Reporting Director,

the Group Head of Internal Audit, the Group Head of Legal & Compliance,

the Group Head of Risk, the Group Company Secretary (and General

Counsel of the Company) and the Statutory Auditors are permanent

attendees at the meetings of the Audit Committee.

As from the change of year end from 31 March to 31 December, the March

and September meetings are mainly focused, respectively, on the review

of the solo parent company and consolidated accounts and the half-year

accounts and the presentation by the Statutory Auditors of its report after

its review of such accounts. In addition, at the March meeting, the Audit

Committee reviews the report on risk management and accounting

procedures implemented by the Company on pages 72 onwards of

this report.

At the March meeting the Audit Committee receives for consideration,

the Group annual internal control report to be submitted to the French

Prudential and Control Authority (

Autorité de contrôle prudentiel et de

resolution

In advance of each meeting, the Audit Committee members receive

the Internal Audit activity report and the status of Statutory Auditors

recommendations. The activities of the Group subsidiary audit committees

are also presented to the Audit Committee during those two meetings.

This year, the Audit Committee also reviewed the list of non-audit fees and

took note of the new auditor partner’s rotations and audit governance

requirements under the revised Statutory Audit Directive.

At the end of each meeting, the Audit Committee usually meets with

the Group Head of Internal Audit and the Statutory Auditors without the

presence of any representative of senior management.

After each meeting of the Audit Committee, the Chairman of the Audit

Committee submits a report on the work of the Audit Committee to the

Supervisory Board members.

In addition, the Audit Committee receives, in advance of each meeting,

the Group Risk and Compliance quarterly report addressed also to the

Group Risk Committee.

Furthermore, every year, at the request of the Chairman of the Audit

Committee, the Company Secretary coordinates a review of the annual

work programme of the Audit Committee with the committee members,

to ensure that the Audit Committee discharges its responsibilities in

accordance with its Terms of Reference.