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A number of changes have taken place involving governance issues within the corporation.
L.R. Wilson retired as an officer and employee of the corporation but will continue as non-executive Chairman of the Board. He will also serve the corporation through his chairmanship of the recently formed Corporate Governance Committee.
Three new directors will stand for election at the BCE Inc. Annual and Special Meeting in April 1999. Micheline Charest is co-founder, Chairman of the Board and co-CEO of CINAR Corporation and a member of the Board of Directors of BCE Mobile Communications Inc. Paul M. Tellier, is President and CEO of Canadian National Railway Company and a member of the Bell Canada Board of Directors. Thomas E. Kierans is president and CEO of the C.D. Howe Institute and a member of the Bell Canada Board of Directors.
Gerald J. Maier, Chairman Emeritus, TransCanada PipeLines Limited, and a director of BCE since 1987, will retire from the board coincident with the corporation's Annual and Special Meeting in April. Mr. Maier has served the corporation extremely well and his counsel will be missed.
In its ongoing efforts to ensure that the highest standards of corporate governance are developed and maintained within the corporation, the BCE Board of Directors has replaced the Management Resources and Nominating Committee by two separate committees: the Corporate Governance Committee (CGC) and the Management Resources and Compensation Committee (MRCC). The CGC reviews and reports on a variety of issues associated with the Board of Directors including board candidates, remuneration and effectiveness. It also assists newly appointed board members in becoming acquainted with the corporation and its governance process. The MRCC reviews and reports on matters primarily related to the appointment and compensation of management.
Environmental Affairs
Bell Canada has for a number of years excelled in the area of corporate environmental affairs. This has included extensive internal recycling programs within Bell as part of its Zero Waste program but also extends into areas such as energy efficiency, management of hazardous materials and environmental site evaluations. Additional information on Bell Canada's environmental activities can be found on its Web site at www.bell.ca.
The accompanying consolidated financial statements of BCE Inc. and its subsidiaries (collectively BCE), and all information in this annual report are the responsibility of management and have been approved by the Board of Directors.
The financial statements have been prepared by management in conformity with Canadian generally accepted accounting principles. The financial statements include some amounts that are based on best estimates and judgements of management, and in their opinion present fairly BCE's financial position, results of operations and changes in financial position. Financial information presented elsewhere in the annual report is consistent with that in the financial statements.
Management of BCE, in furtherance of the integrity and objectivity of the financial statements, has developed and maintains a system of internal controls and supports an extensive program of internal audits. Management believes the internal controls provide reasonable assurance that financial records are reliable and form a proper basis for the preparation of financial statements and that BCE's assets are properly accounted for and safeguarded. The internal control process includes management's communication to employees of policies which govern ethical business conduct.
The Board of Directors carries out its responsibility for the financial statements in this annual report principally through its Audit Committee, consisting solely of outside and unrelated directors. The Audit Committee reviews the Corporation's annual consolidated financial statements and other information in the annual report, and recommends their approval by the Board of Directors. Additional responsibilities of the Audit Committee are outlined on page 67 of this annual report. The internal and the shareholders' auditors have free and independent access to the Audit Committee.
These financial statements have been audited by the shareholders' auditors, Deloitte & Touche LLP, Chartered Accountants, and their report is presented below.
To the Shareholders of BCE Inc.
We have audited the consolidated balance sheets of BCE Inc. and its subsidiaries as at December 31, 1998 and 1997 and the consolidated statements of operations, retained earnings and changes in financial position for the years ended. These financial statements are the responsibility of the Corporation's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.
In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of the Corporation as at December 31, 1998 and 1997 and the results of its operations and the changes in its financial position for the years then ended in accordance with Canadian generally accepted accounting principles.
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