Report of the Directors
Governance

Audit Committee Report

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Alan Ferguson
Chairman of the Audit Committee

“I am pleased to present the Report of the Audit Committee for 2012.”

Role

The terms of reference of the Audit Committee, which were updated during the financial year, are summarised in the Corporate Governance Report. The terms of reference can be found in the Investor Relations / Corporate Governance section of the company’s website or may be obtained from the Company Secretary.

Composition

The Audit Committee comprises all the independent non-executive directors. Biographical details of the independent non-executive directors are set out in the Board of Directors section. Their remuneration is set out in the Remuneration Report.

Alan Ferguson replaced Alan Thomson as Chairman of the Audit Committee in July 2011 on his retirement from the board. Details of Alan Ferguson’s previous roles, experience and qualifications are set in the Board of Directors section.

The group Chairman, the Chief Executive, the Group Finance Director, the Head of Internal Audit and Risk and the external auditor attend Audit Committee meetings by invitation. The Committee also meets separately with the Head of Internal Audit and Risk and with the external auditor without management being present.

The Company Secretary is secretary to the Audit Committee.

Main Activities in the Year

The Audit Committee met four times during the year ended 31st March 2012, on the following dates, and it conducted the following business:

Meeting date Main activities
26th May 2011
  • Reviewed the group’s preliminary announcement, draft report and accounts for the financial year
  • Reviewed papers on key accounting judgments, on credit control and credit risk and on litigation affecting the group
  • Considered reports from the external auditor on its audit and its review of the accounts including accounting policies and areas of judgment, and its comments on risk management and control matters
  • Met with both internal audit and the external auditor without management being present
18th July 2011
  • Reviewed the group’s interim management statement for the first quarter of the financial year
  • Considered reports on internal controls from the internal auditors
  • Reviewed the proposed external audit fees and audit scope for the financial year
  • Assessed the performance of the external auditor. The review of the external auditor was used to confirm the appropriateness of its reappointment and included assessment of its independence, qualification, expertise and resources, and effectiveness of the audit process
  • Recommended to the board the reappointment of KPMG Audit Plc as auditor
  • Considered reports on IT strategy and risks from the Group Director, Information Technology
21st November 2011
  • Reviewed the group’s half year results and announcement and the external auditor’s review
  • Reviewed papers on key accounting judgments, on credit control and credit risk and on litigation affecting the group
  • Considered reports on the group’s treasury activities from the Group Treasurer
  • Considered reports on internal controls from the internal auditors and group security
  • Recommended to the board the approval of revised terms of reference for the Committee
  • Assessed the performance of the internal auditors
31st January 2012
  • Reviewed the group’s interim management statement for the third quarter of the financial year
  • Reviewed the group’s risk register, reports on controls from the internal auditors and group security and reports from management on the effectiveness of the group’s systems for internal financial control and risk management
  • Considered internal audit and security resource requirements and approved the internal audit and group security plans for 2012/13
  • Reviewed metal trading limits and controls
  • Received an update from the external auditor on accounting, reporting and governance developments
  • Reviewed non-audit services provided by the external auditor during the financial year to date and the associated authorisation policy
  • Reviewed the group’s whistleblowing procedures and the matters raised during the year
  • Approved changes to the Group Control Manual, including changes to the group authority levels
  • Received and considered a presentation on the risks facing the Process Technologies business from its finance director

Since 31st March 2012, the Audit Committee has met once, on the following date, and it conducted the following business:

Meeting date Main activities
31st May 2012
  • Reviewed the group’s preliminary announcement, draft report and accounts for the financial year and the group’s assessment of going concern
  • Considered the reappointment of the external auditor for the following year
  • Considered reports on internal controls from the internal auditors and group security
  • Met with both internal audit and the external auditor without management being present
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