AUDIT COMMITTEE (THE ˇ§COMMITTEEˇ¨)
TERMS OF REFERENCE
The Board resolved on 9 August 1993 to establish a committee of the
Board to be known as the Audit Committee (the ˇ§Committeeˇ¨).
The Company shall ensure that these Terms
of Reference are made generally available by means of publication on
the Company's website as required by the Combined Code July 2003.
of the Committee shall be appointed by the Board. The Committee
shall be made up of at least three members.
2.2 All members of the Committee shall be Non-executive Directors
of the Company at least one of whom shall have recent and relevant
financial experience. The Committee shall comprise of a Chairman
and at least two other non-executive directors.
2.3 Only members of the Committee have the right to attend
Committee meetings. However, other individuals such as members of
the board and representatives from the finance function may be invited
to attend all or part of any meeting as and when appropriate.
2.4 The external auditor will be invited to attend meetings of
the Committee on a regular basis.
2.5 Appointments to the Committee shall be for a period of up to
two years, which may be extended with the consent from the Board.
2.6 The Board shall appoint the Committee chairman who shall be
an independent non-executive director.
The Chairman of the Board
shall not be the Chairman of the Committee.
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.
2.7 The members of the
Audit Committee for the time being shall be:
- Frank Attwood (Chairman)
- Ian Taylor
- Louisa Ho
- Mao Tong
The quorum necessary for the transaction of business shall be two
duly convened meeting of the Committee at which a quorum is present
shall be competent to exercise all or any of the authorities, powers
and discretions vested in or exercisable by the Committee.
The company secretary or their nominee shall act as the Secretary of
5. Frequency of meetings
The Committee shall meet at least two times a year at appropriate times
in the company's reporting and audit cycle and in advance of a Board
meeting where financial statements are to be approved, and otherwise as
6. Notice of meetings
Meetings of the Committee shall be called by the Secretary of the
Committee at the request of any of its
members or at the request of external or internal auditors if they
consider it necessary.
otherwise agreed, Notice of
each meeting confirming the venue, time and date together an agenda of
items to be discussed, shall be forwarded to each member of the
Committee, any other person required to attend no later than 3 working
days before the date of the meeting. Supporting papers shall be
sent to committee members and to other attendees as appropriate, at the
7. Minutes of meetings
The Secretary shall minute the proceedings and resolutions of all
Committee meetings, including recording the names of those present and
Secretary shall ascertain, at the beginning of each meeting, the
existence of any conflicts of interest and minute them accordingly.
Minutes of committee meetings shall be circulated promptly to all
members of the Committee and, once agreed, to all members of the board,
unless a conflict of interest exists.
8. Annual General Meeting (AGM)
The Chairman of the Committee shall
attend the Annual General Meeting prepared to respond to any
shareholder questions on the Committee's activities.
The Committee should carry out the duties
below for the group as a whole, as appropriate.
The Committee shall monitor the integrity of the financial statements
of the Company, including its Annual Financial Report announcement and
interim report announcement.
9.1.2 The Committee shall review and challenge where necessary
The consistency of, and any changes to, accounting policies both on a
year on year basis and across the Company/group.
The methods used to account for significant or unusal transactions
where different approaches are possible.
184.108.40.206 Whether the company has followed appropriate accounting
standards and made appropriate estimates and judgements, taking into
account the views of the external auditors.
220.127.116.11 The clarity of disclosure in the company's financial
reports and the context in which statements are made; and
18.104.22.168 All material information presented with the financial
statements such as the operating and financial review and the corporate
governance statement (insofar as it relates to the audit and risk
Internal Control and Risk Assessment
keep under review the effectiveness of the Company's financial internal
control and risk management systems; and
review and approve the statements to be included in the annual report
concerning internal controls and risk management.
9.3 Whistleblowing and fraud
review the Company's arrangements for its employees to raise concerns,
in confidence, about possible 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; and
9.4 Internal audit
consider and approve the remit of the head of the internal audit
function and ensure it has adequate resources and appropriate access to
information to enable it to perform its function effectively and in
accordance with the relevant professional standards.
The Committee shall also
ensure the function has adequate standing and is free from management
or other restrictions.
9.4.2 review the annual internal audit plan.
9.4.3 review promptly all reports on the company from the
9.4.4 review and monitor management's responsiveness to the
findings and recommendations of the internal auditor; and
9.4.5 meet the head of internal audit at least once a year,
without management being present, to discuss their remit and any issues
arising from the internal audits carried out. In addition, the
head of internal audit shall be given the right of direct access to the
chairman of the Board and the Committee.
make recommendations to the Board, to be put to shareholders for
approval at the AGM, in relation to the appointment, re-appointment and
removal of the Company's external auditors. The Committee shall
oversee the selection process for new auditors and if an auditor
resigns the Committee shall investigate the issues leading to this and
decide whether any action is requried.
9.5.2 oversee the relationship with the external auditor,
including (but not limited to):
approval of their remuneration, whether fees for audit or non-audit
services and that the level of fees is appropriate to enable an
adequate audit to be conducted.
22.214.171.124 approval of their terms of engagement, including any
engagement letter issued at the start of each audit and the scope of
126.96.36.199 assessing annually their independence and objectivity
taking into account relevant professional and regulatory requirements
and the relationship with the auditor as a whole including the
provision of any non-audit services.
188.8.131.52 satisfying itself that there are no relationships (such
as family, employment, investment, financial or business) between the
auditor and the Company (other than in the ordinary course of business).
184.108.40.206 monitoring the auditor's compliance with relevant ethical
and professional guidance on the rotation of audit partners, the level
of fees paid by the Company compared to the overall fee income of the
firm, office and partner and other related requirements.
220.127.116.11 assessing annually their qualifications, expertise and
resources and the effectiveness of the audit process which shall
include a report from the external auditor on their own internal
18.104.22.168 considering the risk of the withdrawal of the Company's
present auditor from the market.
meet regularly with external auditor, including once at the planning
stage before the audit and once after the audit at the reporting
stage. The Committee shall meet the external auditor at least
once a year, without management being present, to discuss their remit
and any issues arising from the audit.
review and approve the annual audit plan and ensure that it is
consistent with the scope of the audit engagement.
9.5.5 review the findings of the audit
with the external auditor. This shall include but not be limited
to, the following
a discussion of any major issues which arose during the audit;
22.214.171.124 any accounting and audit
126.96.36.199 levels of errors identified
during the audit.
The Committee shall also review the effectiveness of the audit.
9.5.6 review any representation letter(s) requested by the
external auditor before they are signed by management.
9.5.7 review the management letter and management's response to
the auditor's findings and recommendations.
9.5.8 develop and implement a policy on the supply of non-audit
services by the external auditor, taking into account any relevant
ethical guidance on the matter.
9.6.1 The Committee chairman shall report formally to the Board
on its proceedings after each meeting on all matters within its duties
9.6.2 The Committee shall make whatever recommendations to the
board it deems appropriate on any area within its remit where action or
improvement is needed.
9.6.3 The Committee shall compile a report to shareholders on its
activities to be included in the Company's annual report.
9.7.1 have access to sufficient resources in order to carry out
its duties, including access to the Company secretariat for assistance
9.7.2 be provided with appropriate training, both in the form of
an induction programme for new members and on an ongoing basis for all
9.7.3 give due consideration to laws and regulations, the
provisions of the Combined Code and the requirements of the UK Listing,
Prospectus and Disclosure and Transparency Rules as appropriate.
9.7.4 be responsible for co-ordination of the internal and
9.7.5 oversee any investigation of activities which are within
its terms of reference and act for internal purposes as a court of the
9.7.6 at least once a year, review its own performance,
constitution and terms of reference to ensure it is operating at
maximum effectiveness and recommend any changes it considers necessary
to the Board for approval.
Committee is authorised
to seek any information it requires from any employee of the Company in
order to perform its duties.
to obtain, at the Company's expense, outside legal or other
professional advice on any matter within its terms of reference.
10.3 to call any employee to be
questioned at a meeting of the Committee as and when required.
The Audit Committee has adopted the above Terms of
Reference on 9 October 2009.
This is last updated on 6 December 2011.