Audit Committee
Members
Chris Russell (Chairman), Antony Hichens, Lord Jay, Nicholas Jones, Richard Stone
Members
Members of the Committee will be appointed by the Board of the Company. The Committee shall be made up of at least 3 members. All members of the Committee shall 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. The Secretary of the Company will act as secretary of the Committee. The quorum for meetings of the Committee shall be any two members.
Status
The Committee is a committee of the Company’s board established to monitor the quality and reliability of financial information used by the board. The Committee has no executive powers but shall have the authority to seek any information it requires from any officer or employee of the Company or any of its subsidiary companies and such officers or employees shall be instructed by the board of the Company employing them to respond to such enquiries.
The Committee is granted the authority of the board to call for advice or reports from outside consultants, auditors or other appropriate bodies as and when deemed necessary.
Responsibility
The Committee shall consider such matters relating to the financial affairs of the company and its subsidiary companies and to their financial management systems and external audit arrangements as it may from time to time see fit. It will evaluate the standards of internal control and financial reporting within the Company. It will also examine any other matters referred to it by the board.
Meetings and Reporting
The Committee shall meet routinely three times a year: in August/September and February/March, to consider the interim and final results of the Company, and in May/June, to approve the auditors’ fees, review the auditors’ independence and to discuss the audit approach. Ad hoc meetings may be called at other times as required.
The Chairman of the Committee may invite any other person deemed appropriate to attend Committee meetings. The external auditors will always be invited to attend all meetings of the Committee, and may discuss matters arising privately with Committee members alone after each meeting.
The Chairman of the Committee shall make a brief report of the findings and recommendations of the Committee to the board after each Committee meeting. The minutes of all Committee meetings shall be circulated to members of the board.
Terms of Reference
The Committee shall:
- Review and monitor the integrity of the interim and annual financial statements before their submission to the board for approval, reviewing significant financial reporting issues and judgments which they contain.
- Review the investment valuations and their compliance with the Company’s valuation guidelines.
- Review with management and external auditors the effectiveness of the systems of accounting and internal financial control (subject to the ICAEW guidelines on internal controls) and the systems of risk management and (unless done by the board as a whole) shall review and approve the statements to be included in the annual report concerning internal controls and risk management.
- Review with the auditors their management letter.
- Review and recommend, as occasion demands, both the appointment and terms of reference of the external auditors and the fees attaching to the external audit appointment from year to year.
- Review and monitor the external auditors’ independence and objectivity and the effectiveness of the audit process.
- Review the extent to which the external auditor supplies non-audit services and develop and implement a policy on the supply of non-audit services by the external auditor.
- Review the effectiveness of the Company's Compliance Monitoring Procedures.
- Consider and review changes in accounting practice and comment on them to the board.
- Act, when required, as an effective channel of communication with the external auditors.
- Review the Company’s arrangements for its employees to raise concerns, in confidence, about possible wrongdoing in financial reporting or other matters.
- Keep under review whether there is a need for an internal audit function.
- Once a year, review its own performance, constitution and terms of reference to ensure it is operating at maximum effectiveness