Amended Terms of Reference
The Committee shall be appointed by the Board and shall consist of independent non-executive directors of the Company. The chairman of the board may be a member, but not Chair, of the committee provided he was considered independent upon appointment as chairman.
At least one member of the Committee shall have recent and relevant financial experience.
A Quorum shall be two members. A duly convened meeting of the 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 Committee.
The Committee shall be provided with appropriate and timely training, both in the form of an induction programme for new members and on an ongoing basis for all members.
The Chairman of the Committee shall be appointed by the Board.
The Company Secretary shall be secretary to the Committee.
2. Attendance at meetings
The Group CEO, the Group Finance Director, the internal auditor and representatives of the external auditors shall be invited to attend meetings, at the Committee’s discretion. The Committee may ask other Board members and any relevant senior management to attend meetings.
The committee shall be entitled to meet with the external auditors, without management (including the executive directors of the company), being present, and shall do so on at least one occasion each year.
The committee shall be entitled to meet with the Head of Internal Audit, without management (including the executive directors of the company), being present, and shall do so on at least one occasion each year.
The Company Secretary , in conjunction with the Chairman, shall prepare agendas for meetings which, together with the relevant papers, will be circulated to members and where appropriate, the Group CEO, the Group Finance Director, the internal auditor and the external auditors, at least one week prior to the meeting.
3. Frequency of meetings
Meetings of the Committee shall be held not less than three times per year and at such other times as the Chairman of the Committee shall require.
The external auditors may request a meeting with the Committee, if they consider that one is necessary, such request to be made in writing to the Company Secretary.
Notice of meetings shall be given to all members of the Committee, Chief Executive, Group Finance Director and where appropriate to the external auditors.
The Committee is authorised by the Board to investigate any activity within its terms of reference.
It is authorised to seek and obtain any information it requires from, and compel the attendance at its meetings by, any officer or employee of the Company or its subsidiary companies. All such persons are directed to co-operate with any such request made by the Committee.
The Committee is authorised by the Board to obtain external legal or other independent professional advice as it considers necessary.
The duties of the Committee shall be:
- To make recommendations to the Board in relation to the appointment, re-appointment and removal of the external auditors and to approve their remuneration and terms of engagement
- To review the scope and planning of the external audit and its effectiveness and monitor the external auditor’s independence and objectivity taking into consideration relevant UK professional and regulatory requirements, and to make recommendations to the Board, as appropriate, on any actions needed to address any issues arising from this and to recommend any improvements as necessary
- To ensure that key partners and managers of the external auditors are rotated at appropriate intervals
- To discuss with the external auditors and Group Finance Director, before the external audit commences, the nature and scope of the external audit
- To review the findings of the external auditors and to discuss with them any problems arising from the audit
- To review the external auditors’ management letters and management’s responses
- To develop and implement policy relating to non-audit services performed by the external auditors, taking into account relevant ethical guidance regarding the provision of non-audit services by the external auditors
- To review any representation letter(s) requested by the external auditor before they are signed by management
- To review the annual and interim financial statements and preliminary announcements before their submission to the Board for approval, focusing particularly on:
- all material information presented with the financial statements, such as the operating and financial review and the corporate governance statement, insofar, as it related to audit and risk management
- the accounting policies and that they are in accordance with the law, accounting standards and the Listing Rules of the Financial Services Authority
- any changes in accounting policies and practices and compliance with accounting standards
- major judgmental areas
- the going concern assumption
- significant adjustments arising from the external audit
- the clarity of disclosures in the company’s financial statements
- To review any profit forecasts or working capital statements to be published in any document subject to the Listing Rules of the Financial Services Authority
Risk Management and Internal Control
- To review internal financial controls and internal control and risk management systems prior to their endorsement by the Board
- To review management procedures in order to monitor the effectiveness of accounting and internal control systems
- To monitor and review the effectiveness of the internal audit function and ensure that it is adequately resourced
- To consider the scope and the major findings of internal work done and management’s response thereto
- To review the Company’s arrangements by which its employees may raise concerns, in confidence, about possible improprieties in financial reporting or other matters
- To self assess annually, the Committee’s discharge of its duties hereunder and the scope of its terms of reference
- To consider other topics as are either referred to the Committee by the Board or may be defined by the Committee and notified to the Board
Minutes of Committee meetings shall be circulated to all members of the Committee and to members of the Board.
The Chairman of the Committee will report its findings and recommendations to the Board meetings immediately following the Committee meeting.
The Committee shall have no executive powers.