Loreal 2011 Annual Report Download - page 61

59REGISTRATION DOCUMENT − L’ORÉAL 2011
Corporate governance
2
Internal Control procedures (Report of the Chairman of the Board of Directors onInternal Control)
2.4. Summary of trading by Directors and
corporate officers in L’Oréal shares in2011
(Article223-26 of the General Regulation of the Autorité des Marchés Financiers )
Person concerned Date of the transaction Nature of the transaction Unit price Total amount
Fimalac Développement,
legal entity related to Marc Ladreit
de Lacharrière, Director
January3rd, 2011 Sale €85.50 €1,548,840.00
January4th, 2011 Sale €85.8701 €2,587,180.24
January6th, 2011 Sale €86.0328 €5,161,968.00
January10th, 2011 Sale €82.7840 €6,953,856.00
Jean-Paul Agon
Chairman and Chief Executive Officer March4th, 2011 Exercise of share
subscription options €55.54 €1,110,800.00
2.5. Internal Control procedures
(Report of the Chairman of the Board of Directors
onInternal Control)
At the request of the Chairman and Chief Executive Officer, the
Administration and Finance Division compiled the information
contained in this report based on the different types of work carried
out by departments working on Internal Control within the Group.
For the preparation and drafting of this report and the definition
of Internal Control, L’Oréal used the Reference Framework
recommended by the French financial markets authority (the
Autorité des Marchés Financiers ) on July22nd, 2010.
2.5.1. Definition and objectives
ofInternal Control
In L’Oréal, Internal Control is a system that applies to the
Company and its consolidated subsidiaries (“the Group”) and
aims at ensuring that:
♦economic and financial targets are achieved in compliance
with the laws and regulations in force;
♦the orientations set by General Management are followed;
♦the Group’s assets are valued and protected;
♦the Group’s financial and accounting information is reliable
and provides true and fair statements.
By contributing to preventing and managing the risks to which
the Group is exposed, the purpose of the Internal Control system
is to enable the Group’s industrial and economic development
to take place in a steady and sustainable manner in a control
environment appropriate for the Group’s businesses. However, no
absolute guarantee can be given that these objectives will be met.
2.5.2. Components of the system
2.5.2.1. The Internal Control organisation
andenvironment
The control environment, which is critical to the Internal
Control system, good risk management and the application
of procedures, is based on people, behaviour and the
organisational structure. In L’Oréal, it forms part of a culture of
rigour and commitment communicated by senior management
and is also in line with the Group’s strategic choices.
The Group’s values
L’Oréal has built up its business on the basis of strong ethical
values that have guided its development and contributed
to establishing its reputation: Integrity, Respect, Excellence,
Courage and Transparency.
L’Oréal’s Code of Business Ethics exists in 43versions (35 different
languages) and is also published in Braille in French and English.
Issued to all employees throughout the world, it provides insight
into how these values need to be reflected in the behaviour and
actions of its employees through simple rules and a description
of concrete situations to which they may be exposed. Five
supplements to the Code of Business Ethics drawn up since
2010 have made it possible to clarify certain aspects.