Board Committees
1.1 The Committee shall comprise at least three members who shall be appointed by the Board on the recommendation of the nomination committee in consultation with the chairman of the Committee.
1.2. All members of the committee will be independent Non-Executive Directors at least one of whom shall have recent and relevant financial experience. The Chairman of the Board shall not be a member of the Committee.
1.3. The Board shall appoint the Committee members, the Committee Chairman and any deputy. In the absence of the Committee Chairman and/or an appointed deputy, the remaining members present shall elect one of themselves to chair the meeting.
1.4. Only Committee members have the right to attend Committee meetings. However, the Chief Financial Officer, external auditors and other non-members may be invited to attend all or part of any meeting as and when appropriate and necessary although they will not be present at meetings when the Committee discusses their performance and/or remuneration.
1.5. The Company Secretary or the Deputy CFO (Chief Finance Officer) as his nominee shall act as Secretary of the Committee.
2.1. The quorum for Committee meetings shall be two members.
2.2. The Committee shall meet at least three times a year at the appropriate times in the reporting and audit cycle and otherwise as required.
2.3. Any Committee member, the Secretary or Head of Internal Audit may call additional meetings as necessary. The external auditors may also request additional meetings.
2.4. The Committee Chairman will be available and maintain a dialogue with the external auditors and key individuals involved in the Company’s governance, including the chairman of the Board, the chief executive, the chief finance officer to discuss any matters of concern in relation to financial reporting matters, internal control concerns or compliance with the Group’s legal, regulatory and compliance obligations should this be considered necessary by those individuals.
2.5. The Committee will meet regularly with the external auditors and Head of Internal Audit without management present.
3.1 Financial reporting
3.1.1 Review the annual and half year financial results as well as other published information relating to the Group’s financial performance including announcement of preliminary results and any other formal announcement relating to its performance, reviewing and reporting to the Board on significant financial reporting issues and judgements which they contain having regard to matters communicated to it by the auditor.
3.1.2. In particular, the Committee shall review and challenge where necessary:
3.1.2.1. the consistency of, and any changes to, significant accounting policies, both on a year-on-year basis and across the Group;
3.1.2.2. the methods used to account for significant or unusual transactions where alternative accounting approaches can be adopted;
3.1.2.3. whether the Group has followed appropriate accounting standards and made appropriate estimates and judgements, taking into account the views of the external auditor;
3.1.2.4. the clarity and completeness of disclosure in the Group’s externally published financial reports and the context in which the statements are made; and
3.1.2.5. all material information presented with the financial statements, such as the business review and the corporate governance statements relating to the audit and to risk management.
3.1.3. Where the Committee is not satisfied with any aspect of the proposed financial reporting by the Group, it shall report its views to the Board.
3.2. Narrative reporting
Where requested by the Board, the Committee should review the content of the annual report and accounts and advise the Board on whether, taken as a whole, it is fair, balanced and understandable and provides the information necessary for shareholders to assess the Group’s performance, business model and strategy.
3.3. Internal controls and risk management
3.3.1. The Committee shall keep under review the adequacy and effectiveness of the Company’s internal financial controls and internal control and risk management systems; and
3.3.2. Review and approve the statements to be included in the Company’s annual report concerning internal controls and risk management unless this is done by the Board.
3.3.3. To obtain reasonable assurance with respect to work of the internal audit activity, and provide oversight related to:
3.3.3.1 the effectiveness of the internal audit function and the adequacy of the resources available;
3.3.3.2 review and approval of the internal audit strategy and annual audit plan;
3.3.3.3 review and consider any reports issued by internal audit and follow up any concerns; and
3.3.3.4 review major recommendations made by internal audit including management responses.
3.4. Whistleblowing
3.4.1. Review the adequacy and security of the Company’s arrangements for tis employees and contractors to raise concerns, in confidence, about potential wrongdoing in financial reporting or other matters. The Committee shall ensure that these arrangements allow proportionate and independent investigation of such matters and appropriate follow-up action
3.4.2. Review the Company’s procedures for detecting fraud;
3.4.3. Review the Company’s systems and controls for the prevention of bribery and receive reports on non-compliance;
3.4.4. Review regular reports relation to compliance and keep under regular review the adequacy and effectiveness of the Company’s compliance procedures.
3.5. External audit
3.5.1. Review and make recommendations to the Board, to be put to the shareholders for approval at the AGM, in relation to the appointment, re-appointment and removal of the company’s external auditors, and make recommendations to the Board regarding tendering the external audit contract from time to time as required by best practice or regulation.
3.5.2. Ensure that key partners are rotated at appropriate intervals in line with best practice; and consider their resignation and removal and recommend appropriate action.
3.5.3. Review the performance of the external auditors including the scope of their audit and recommend to the Board appropriate remuneration.
3.5.4. Review, at least annually, the effectiveness of the audit and the qualifications, expertise, resources, independence and objectivity of the external auditor, including the nature and extent of non-audit and consultancy services and keep under review, the Group policy on the engagement of the external auditors for these services to ensure that independence or objectivity is not impaired.
3.5.5. Review and approve the engagement letter issued at the start of each audit and the scope of the audit.
3.5.6. Review the scope and results of the external audit and any significant findings reported to the Committee in the management letter, receiving updates from management on action taken as well as a review of any representation letter(s) requested by the external auditor before they are signed by management.
3.5.7. Review and discuss any reports from the external auditors on critical accounting policies, including management’s response.
3.6 Information Security
3.6.1. The Committee shall keep under review and have oversight of the Company’s arrangements in relation to information security.
3.6.2. Review and approve the Company’s policies concerning information security.
3.6.3. Review reports from the Company’s information security officer and review the adequacy and effectiveness of the Company’s controls and risk management in relation to information security risks.
4.1. After each meeting, the Committee Chairman shall report formally to the Board on its proceedings and how it has discharged its responsibilities.
4.2. The Committee shall make whatever recommendations to the Board it deems appropriate on any area within its remit where action or improvement is needed.
4.3. A report to the shareholders on the activities of the Committee in discharging its responsibilities shall be included, as a separate section, in the Annual Report.
4.4. The Committee Chairman shall attend the annual general meeting to answer shareholder questions on the Committee’s activities.
5.1 The Committee has authority to:
5.1.1. oversee any investigation of activities which are within its terms of reference;
5.1.2. require provision of any necessary information to fulfil the above;
5.1.3. obtain, through the Company Secretary, outside legal help and any professional advice, at the Group’s expense, which might be necessary to enable it to fulfil its duties;
5.1.4. call any employee, through the Company Secretary, to be questioned at a meeting of the Committee as and when required; and
5.1.5. delegate any of its powers to one or more of its members, or the Secretary if it deems this appropriate.
The terms of reference and the effectiveness of the Committee shall be reviewed annually, and the necessary recommendations made to the Board for its approval.
