Audit Committee Add this

Audit Committee meetings are attended by representatives of the group auditor, the chief financial officer, the head of internal audit and the company secretary

The committee considers the Group’s annual and half-yearly financial statements and any questions raised by the auditor on the financial statements and financial systems. It also reviews, amongst other matters, the Group’s internal auditing process, whistle-blowing arrangements, risk management procedures and internal controls.

The Audit Committee is chaired by Mark Seligman.

  • Mark Seligman (Chairman)
  • Bo Lerenius
  • Lord Condon
  • Winnie Kin Wah Fok

Terms of Reference for the Audit Committee

1. Constitution

The Committee has been established by resolution of the board of directors of the Company (the "Board") and is to be known as the Audit Committee.

2. Membership

2.1 The members of the Audit Committee shall be appointed by the Board from amongst the directors of the Company and shall consist of at least three members, all of whom are independent non executive directors.

2.2 At least one member of the Audit Committee shall have recent and relevant financial experience.

2.3 The Board shall appoint a chairman of the Audit Committee (the "Chairman") and shall decide his or her period of office. The Chairman shall be an independent non executive director and shall not be the Chairman of the Company.

2.4 The Board shall regularly review the membership of the Audit Committee to ensure that membership is refreshed and undue reliance is not placed on particular individuals as regards membership of the Audit Committee and other Board committees.

2.5 The Audit Committee may invite the chairman and the chief executive of the Company or any other person to advise and/or to join meetings of the Audit Committee when required notwithstanding that they are not members of the Audit Committee.

3. Quorum

A quorum shall be two members. A duly convened meeting of the Audit Committee at which a quorum is present shall be competent to exercise all or any of the authorities, powers and discretions vested in or exercisable by the Audit Committee.

4. Attendance at Meetings

4.1 No one other than the Audit Committee Chairman and members is entitled to be present or vote at a meeting of the Audit Committee.

4.2 The chairman of the Company, chief executive, finance director, head of internal audit and a representative of the external auditors may be called upon or shall be able to speak at any meeting of the Audit Committee by prior arrangement with the Chairman.

4.3 There should be at least one meeting, or part of a meeting, each year which the external auditors attend without management present.

5. Secretary

The Company Secretary shall act as the secretary of the Audit Committee and shall keep a record of the membership of and the dates of any changes to the membership of the Audit Committee.

6. Frequency of Meetings

6.1 Meetings shall be held at such times as the Audit Committee deems appropriate, and in any event shall be held not less than three times a year. Where appropriate, meetings should coincide with key dates in the company's financial reporting cycle.

6.2 External auditors or internal auditors may request a meeting if they consider that one is necessary.

7. Proceedings

7.1 Unless varied by these terms of reference, meetings and proceedings of the Audit Committee will be governed by the Company's Articles of Association regarding the meetings and proceedings of directors.

7.2 Meetings of the Audit Committee shall be summoned by the Secretary of the Audit Committee at the request of the Chairman or any member thereof.

7.3 Unless otherwise agreed, notice of each meeting confirming the venue, time and date, together with an agenda of items to be discussed and supporting papers, shall be sent to each member of the Audit Committee and any other person required to attend not later than 48 hours prior to the date of the meeting.

7.4 The Secretary to the Audit Committee shall record the proceedings and resolutions of meetings of the Audit Committee and shall circulate the minutes of such meetings to all members of the Audit Committee and, if the Chairman so decides, upon request, to all members of the Board.

7.5 In the absence of the Audit Committee Chairman and/or an appointed deputy, those members present shall elect one of their number to chair the meeting.

8. Authority

8.1 The Audit Committee is authorised by the Board at the expense of the Company to investigate any matter within its terms of reference. It is authorised to seek any information that it requires from any employee in order to perform its duties and all employees are directed to cooperate with any requests made by the Audit Committee.

8.2 The Audit Committee is authorised by the Board at the expense of the Company to obtain external professional advice and to secure the attendance of third parties with relevant experience and expertise at meetings of the Audit Committee if it considers this necessary.

8.3 These terms of reference may be amended from time to time as required, subject to approval by the Board.

9 .Duties

The responsibilities of the Audit Committee shall be to:

External audit

9.1.1 consider the appointment of the external auditor and assess independence of the external auditor, ensuring that key partners are rotated at appropriate intervals;

9.1.2 recommend the audit fee to the board and monitor the provision by the external auditor of non-audit services to ensure that the independence or objectivity of the external auditor is not thereby impaired;

9.1.3 ensure that proper disclosure is made in the annual report of how the Audit Committee's policy in relation to non-audit fees paid to auditors adequately safeguards the independence of the auditor and that proper disclosure is made of all fees paid to the external auditor;

9.1.4 discuss with the external auditor, before the audit commences, the nature and scope of the audit and review the auditor's quality control procedures and steps taken by the auditor to respond to changes in regulatory and other requirements;

9.1.5 oversee the process for selecting the external auditor and make appropriate recommendations through the board to the shareholders to consider at the AGM; and

9.1.6 review the external auditor's audit report (whether in the form of a management letter or otherwise) and any major recommendations of the external auditor and consider management's response.

Internal audit

9.1.7 review the internal audit programme and ensure that the internal audit function is adequately resourced and has appropriate standing within the company;

9.1.8 consider management's response to any major internal audit recommendations; and

9.1.9 approve the appointment or dismissal of the head of internal audit.

Risk management

9.1.10 review the Company's procedures for handling allegations from whistleblowers in order to ensure that arrangements are in place for the proportionate and independent investigation of such matters and for appropriate follow-up action;

9.1.11 review management's and the internal auditor's reports on the effectiveness of systems for internal financial control, financial reporting and risk management;

9.1.12 review the Company's annual statement on its systems of internal control prior to endorsement by the Board, and in particular review:

(A) the procedures for identifying business, operational, financial, compliance and other risks and controlling their impact on the Company having regard, in particular, to any significant failings or weaknesses in internal control that have been reported;

(B) the actions taken to remedy any significant failings or weaknesses, including their timeliness;

(C) the Company's policies for preventing or detecting fraud;

(D) the Company's policies for ensuring that the Company complies with relevant regulatory and legal requirements; and

(E) the operational effectiveness of these policies and procedures;

9.1.13 review co-ordination between the internal audit function and the external auditors;

9.1.14 review significant cases of employee conflicts of interest, misconduct or fraud, or any other unethical activity by employees or the Company; and

9.1.15 review the controls over significant risks;

9.1.16 receive and consider reports from the Company’s Group Risk Committee;

Financial reporting

9.1.17 review, and challenge where necessary, the actions and judgements of management, in relation to the interim and annual financial statements (including preliminary announcements and any other related formal statements) before submission to the Board, paying particular attention to:

(A) critical accounting policies and practices, and any changes in them;

(B) decisions requiring a major element of judgement;

(C) the extent to which the financial statements are affected by any unusual transactions in the year and how they are disclosed;

(D) the clarity of disclosures;

(E) significant adjustments resulting from the audit;

(F) the going concern assumption;

(G) compliance with accounting standards;

(H) compliance with stock exchange and other legal requirements; and

(I) reviewing the company's statement on internal control systems prior to endorsement by the board and to review the policies and process for identifying and assessing business risks and the management of those risks by the company; and

9.1.18 review the annual financial statements of the Company's UK pension fund(s) where not reviewed by the Board as a whole; and

Other

9.1.19 consider other topics, as referred to it by the Board.

10.Reporting Procedures

10.1 The Chairman of the Audit Committee or, as a minimum, another member of the Audit Committee, shall attend the Board meeting at which the accounts are approved.

10.2 Where, following its review, the Audit Committee is not satisfied with any aspect of the proposed financial reporting by the Company, it shall report its views to the Board.

10.3 The Audit Committee members shall conduct an annual review of their work and these terms of reference and make recommendations to the board.

10.4 The Audit Committee's duties and activities during the year shall be disclosed in the annual financial statements.

11.Annual General Meeting

The Chairman of the Audit Committee shall be available at the Annual General Meting to answer questions on the Audit Committee's activities and its responsibilities.

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