Policy & Guidelines
1. Constitution
1.1 The Board hereby
resolves to establish a committee of the Board, to be known as the Audit
Committee (“the committee”).
2. Membership
2.1 The committee shall
be appointed by the Board. All members of the committee shall be non-executive
directors of the Company. The committee shall consist of not less than
three members. Two members shall comprise a quorum at any meeting of
the committee.
2.2 The chairman of
the committee shall be appointed by the Board from amongst the independent
non-executive directors.
3.
Attendance at Meetings
3.1 Other Board members
and a representative of the external auditors shall attend meetings at
the invitation of the committee. The Finance Director and Chief Executive
will attend every meeting unless specifically requested to be absent.
3.2
There should be at least one committee meeting, or part of a meeting,
each year where the external auditors attend.
3.3 The company secretary
shall be secretary to the committee.
4. Frequency of Meetings
4.1 Meetings
shall be held not less than three times each year and, where appropriate,
shall coincide with key dates in the Company’s
financial reporting cycle.
4.2 Additional meetings
shall be held as required, and any member of the committee, the Company
secretary or the external auditors may request a meeting if they consider
that one is necessary.
5. Authority
The Committee is authorised by the Board: -
- To investigate any activity
within its terms of reference.
- To seek any information that it requires
from any employee (and all employees are directed to co-operate with
any request made by the Committee).
- To obtain external legal or other
independent professional advice and request advisers to attend meetings
as necessary.
6. Responsibilities
The responsibilities of the Committee shall be: -
- To consider the appointment of the external
auditor and assess the independence of the external auditor, ensuring
that key partners are rotated at appropriate intervals.
- To oversee the process
of selecting the external auditor and make appropriate recommendations,
through the Board, to the shareholders for consideration at the annual
general meeting.
- To recommend the audit fee to the Board and
approve any fees in respect of non-audit services provided by the
external auditor, and to ensure that the provision of non-audit services
does not impair the independence or objectivity of the external auditor.
- To
develop and implement policy on the engagement of the external auditor
to supply non-audit services, taking into account relevant ethical
guidance regarding the provisions of non-audit services by the external
auditor.
- To discuss with external auditor, before the
audit commences, the nature and scope of the audit, and any additional
assurance or reporting that may be required, and to review the auditor’s
quality control procedures and the steps taken to respond to changes
in regulatory and other requirements.
- To review the external auditor’s
management letter and management’s
response.
- To monitor and review the effectiveness of the
Company’s
financial accounting processes.
- To ensure that the management is responsive
to the recommendations of the external auditor.
- To review the Company’s
procedures for handling allegations from whistleblowers.
- To review reports
from management on the effectiveness of the systems for internal financial
control, financial reporting and risk management.
- To monitor the integrity,
review, and challenge where necessary, the financial statements relating
to the Company’s financial
performance, the actions and judgements of management in relation to
the interim and annual financial statements before submission to the
Board, paying particular attention to: -
- critical accounting policies
and practices and any changes in them;
- decisions requiring a significant
element of judgement;
- the extent to which the financial statements
are affected by any unusual transactions in the year, and how they
are disclosed;
- the clarity of disclosures;
- significant adjustments resulting
from the audit;
- the going-concern assumption;
- compliance with accounting standards;
and
- compliance with UK Listing authority, stock exchange or other
requirements.
- To review the Company’s statements on
compliance with the Combined Code, going concern and the review of
the effectiveness of the Company’s
system of internal control prior to endorsement by the Board, and in
particular to review: -
- the policies and processes for identifying
and assessing business risks and the management of those risks
to the Company;
- the Company’s policies for ensuring compliance
with relevant legal and regulatory requirements;
- the Company’s
policies for the prevention and detection of fraud; and
- the effectiveness
of such policies and procedures in practice.
- To discuss any problems
and reservations arising from the external audit and any matters
that the external auditors may wish to discuss (in the absence
of management where necessary).
- To consider other topics and issues
as defined by the Board.
7. Reporting Procedures
7.1 The Secretary
shall circulate the minutes of the meeting of the Committee to all members
of the Board.
7.2 The Chairman of
the Committee or another member of the Committee, shall attend the Board
Meeting at which the annual accounts and reports are approved.
7.3 The
committee’s responsibilities and activities during the
year shall be disclosed in the Annual Report and Accounts.
7.4 The Chairman
of the Committee or another member of the Committee, shall attend the
Annual General Meeting and answer questions, through the Chairman of
the Board, on the Committee’s responsibilities
and activities.
8. Self-Assessment and Appraisal
The Committee shall conduct an annual review of its work and terms
of reference, and an annual assessment of its own effectiveness and
make recommendations to the Board.
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