The Audit Committee comprises:
- Steve Coggins, Chairman of the Committee, Independent Non-Executive Director
- Michael Butler, Independent Non-Executive Director
- Peter Rae, Senior Independent Non-Executive Director
All of the Committee members are Independent Non-Executive Directors and have no personal or financial interests, other than as shareholders, in the matters considered by the Committee.
The Audit Committee has formal terms of reference which set out its duties delegated by the Board. These can be accessed via the above link.
During the last financial year the Committee met three times. Neither the Executive Directors nor the Chairman attend meetings other than by invitation of the Committee members. The Committee invites the auditor to attend certain meetings.
The Committee is authorised by the Board to obtain external professional advice at the Group’s expense in order to perform its duties.
The main function of the Audit Committee is to assist the Board in fulfilling its oversight responsibilities for the integrity of the Company’s financial statements and matters relating to the Group’s system of internal controls and risk management Its principal duties are to:
- make recommendations to the Board on the appointment, re-appointment or removal of the external auditor and the amount of its remuneration;
- discuss and agree the scope of the audit and review the auditor’s management letter and the Group’s response;
- review and agree the scope and work of the Group’s internal audit activities;
- review half-year and annual financial statements and formal announcements relating to financial performance;
- review the adequacy and effectiveness of the Group’s internal financial controls, and internal control and risk management systems;
- consider compliance with relevant laws and regulations;
- consider findings of internal investigations and management’s response;
- review the Committee’s terms of reference and recommend any proposed changes to the Board for approval.
During the financial year the Audit Committee considered the following matters:
- the suitability of the Group’s accounting policies and practices;
- the half-year and full-year financial results;
- the scope and cost of the external audit;
- the auditor’s full-year report for 2016;
- the evaluation of the performance and independence of KPMG LLP as the Group’s external auditor
- the implementation of the approved process and action plan for the tender of the external audit and tax compliance services (explained in more detail below);
- the review and approval of the external auditor's plan for 2017, which detailed the proposed audit scope and risk and governance assessment;
- the review and approval of the external auditor's fees for 2017;
- the review and approval of the proposed process and plan for the tender of the external audit and tax compliance services during 2017;
- the review of the Group policy on the provision of non-audit services by the external auditor
- the internal control environment across the Group;
- the arrangements in respect of internal audit, including its resourcing and the scope of the annual internal audit plan for 2017/18;
- reports on the internal audit activity carried out during the year, including: the audit of internal control questionnaires from across the Group; an audit of the Group’s transfer pricing process; and an audit of the Group’s working capital management;
- reports on the internal audit activity carried out during the year;
- detailed reviews of strategic and operational risks facing the Group, the risk registers and the mitigating actions to minimise risk;
- the annual review of the updated whistleblowing policy;
- the review of the Audit Committee terms of reference and recommendation of the updated terms of reference to the Board for approval;
- the assessment of the internal finance organisation;
- the results of the internally conducted assessment of the Audit Committee's performance and effectiveness in 2017;
- the review of a cyber security report, prepared by the provider of the Company’s outsourced IT services, which reviewed the Group’s IT security and resilience;
- the review of the current status and future roadmap of the Company’s IT infrastructure;
- the training requirements of the Audit Committee members; and
- a technical update detailing accounting standards that would impact the Group over the next few years.