Internal regulations of the audit, good governance and risk management committee

The board of directors has established an audit, good governance and risk management committee. Taking into account the size of the company and the specifics of its activities the board of directors does not deem it wise to establish an appointment and/or remuneration committee. The responsibilities which the ten principles normally reserve for the latter will be assumed by the board of directors.

The committee has an advisory role. The decision-making process remains the competence and the responsibility of the board of directors.

6.1. Composition and operation

The board of directors selects the members of the audit, good governance and risk management committee. The committee is composed exclusively of independent directors. The streamlined nature of the group’s financial structure and the limited number of directors justifies that the committee only has two members. Because of the same reason it is deemed unnecessary to have an in-house auditor.

The committee will decide whom it invites to its meetings. At least once a year it will meet the authorized auditor without the executive directors being present.

The audit, good governance and risk management committee will convene at least twice a year at the invitation of the chairman or at the request of two of its members. The legal and financial structure of the group which only convenes twice a year justifies the fact that the committee does not have to convene more often.

The board of directors ensures that the audit, good governance and risk management committee has the means to fulfil its duties. Following mutual consultation with the chairman of the board of directors the committee can appeal to external consultants and this at the expense of the company.

A copy of the minutes of the audit, good governance and risk management committee will be sent to the board of directors and the chairman will report to the board of directors

6.2. Role

The audit, good governance and risk management committee will assist the board of directors with its tasks in the field of financial reporting and supervision and this in the broadest sense of the term and with risk management too.

  • Biannual and annual accounts

The audit, good governance and risk management committee regularly assesses the efficiency of the financial reporting system. It will ensure that the financial information provided by the company renders an honest and reliable image of the activities of the company. It will meet the authorized auditor and will supervise the ad interim and annual accounts prior to their publication.

It will ensure that the Luxembourg and international audit and accountancy rules, including the consolidation rules, are relevant and coherent and that these are complied with . It will also suggest possible changes to the audit rules.

  • Internal supervision and risk management

Once a year the audit good governance and risk management committee will assess the internal supervision system together with the authorized auditor and it will ensure that the main risks are identified, managed and communicated. From this point of view it will make suggestions and recommendations to the board of directors.

The approach as a board as described in section 5.2 implies, inter alia, a mutual, almost permanent supervision assumed but the executive directors themselves.

The annual report will inform the shareholders on risk management.

  • Assessment of external supervision

The audit, good governance and risk management committee will advise the board on the selection, the appointment and the remuneration of the auditor.

It will be informed of the tasks of the authorized auditor and will report on his relations with the company’s executive directors. It will determine which services the authorized auditor is permitted to provide besides the audit.

It will ensure that the executive directors reply quickly and appropriately to possible remarks made the authorized auditor.

The authorized auditor is permitted to address the chairman of the audit, good governance and risk management committee and the chairman of the board of directors at any time informing them of any problems he wants to emphasize.

  • Good governance

The audit, good governance and risk management committee will ensure the correct application of the rules concerning good governance, in particular the  X principles of this charter.

At least twice a year the committee will assess its composition and its operation.