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Audit Committee

All members of the Committee are considered to be independent. In accordance with the Combined Code, the Board is satisfied that Jeremy Hicks has ‘recent and relevant financial experience’.

The Chief Financial Officer and the Director of Group Audit Services are normally invited to meetings and other Directors, including the Chief Executive and the Non-Executive Directors, may also attend. The Chairman of the Committee also meets with the external auditors without management present.

The Committee’s duties, which were discharged during the year, include:

  • Monitoring the integrity of the financial statements of the Company and formal announcements relating to the Company’s financial performance, and reviewing the significant financial reporting judgements contained in them.
  • Reviewing the Company’s internal financial controls and the Company’s internal control and risk management systems.
  • Monitoring the effectiveness of the Company’s Group Audit Services function through meetings with the Director of Group Audit Services, the agreement in advance of annual work plans and the review of the results of the work undertaken.
  • The consideration of the appointment, re-appointment and removal of the external auditors and the approval of their remuneration and terms of their engagement.
  • A policy for the engagement of the external auditors to supply non-audit services was approved in 2007 and remains in force. The Audit Committee has concluded that, in some cases, the provision of non-audit services by the incumbent auditors, which does not impact on their independence in providing their primary statutory audit role, is appropriate and this has been communicated to the Board. Auditor independence and objectivity are safeguarded by the Audit Committee monitoring and approving, where appropriate, the nature of the work and the level of fees paid for non-audit services as a proportion of the total audit fees paid.

Audit Committee effectiveness review

An assessment of the effectiveness was conducted during the year by a questionnaire sent by the Company Secretary to members of the Audit Committee and relevant executives. Results from the questionnaires have been collated and the Committee is scheduled to review and debate the findings before the end of 2009.