The audit committee ischaired by Mr Manser, who has been chairman of the committee since May 2002. Mr Manser qualified as a chartered accountant in 1964 and was made a Fellow of the Institute of Chartered Accountants in 1976.
Lord Fellowes, Mr Morland, Mr Devitre and Ms Doherty also serve on the committee. Mr Morland has been a member of the committee from its first meeting on 13 April 1999. Lord Fellowes was appointed to the committee on 1 June 2001 and Ms Doherty was appointed on 1 April 2006. The Chairman has recent and relevant financial experience, as does Ms Doherty, who is Chief Financial Officer of Brambles Limited and was previously Group International Finance Director of Tesco PLC, and Mr Devitre, who attended his first committee meeting on 4 September 2007, having until 31 March 2008 held the position of Chief Financial Officer of Altria.
The committee met four times during the year to 31 March 2008. The external auditors, the Chief Executive, the Chief Financial Officer and the Chief Internal Auditor attended each meeting by invitation.
Other members of the management team attended as required.
Under its terms of reference, the committee’s key duties include:
-
to review, and challenge where necessary, the annual financial statements and interim and preliminary announcements before their submission to the board for approval;
-
to examine and review the internal control environment and risk management systems within the group and review the group’s statement on internal control systems prior to endorsement by the board and to review the independence, objectivity and effectiveness of the external audit process;
-
to make recommendations to the board regarding the appointment, re-appointment and removal of the external auditors and to approve and recommend to the board the remuneration and terms of engagement of the external auditors;
-
to review annually the effectiveness of the internal audit function throughout the group, with particular focus on the charter, annual work plans, activities, staffing, organisational and reporting structure and status of the function; and
-
to review the effectiveness of the system for monitoring compliance with laws and regulations (including the group’s bi-annual letters of representation) and the results
of management’s investigation and follow-up (including disciplinary action) of any instances of non-compliance.
The audit committee reports its activities and makes recommendations to the board. During the year, the audit committee discharged its responsibilities as they are defined in the committee’s terms of reference, and has been engaged in ensuring that appropriate standards of governance, reporting and compliance are being met. The committee has advised the board on issues relating to the application of accounting standards as they relate to published financial information. The committee has also monitored the further progress which has been made during the year in reviewing and upgrading internal controls in the major business entities across the group, positioning the group to achieve substantive compliance with Sarbanes-Oxley standards in due course (although the company is not an SEC registrant and is not required to comply with Sarbanes-Oxley standards).
The Chief Internal Auditor has direct access to the audit committee, primarily through its chairman. The audit committee has access to subsidiary company internal audit leadership. The reports of the divisional audit committees are also available to the audit committee.
During the year to 31 March 2008, the committee met with the external auditors and with the Chief Internal Auditor without management being present.
In addition to the review of its performance, terms of reference and effectiveness led by the Chairman of the board, the committee critically reviewed its own performance during the year by means of a questionnaire which each member of the committee completed independently. The committee chairman then reviewed the responses and conducted one-to-one discussions with members of the committee where he felt it was necessary. The results of the self-assessment and any action plans arising were then reported to the board.
Note: You can also view our audit committee terms of reference.