Report of the Directors
Governance

Audit Committee Report

1 / 2 » Next

“The Audit Committee has a key role to play in ensuring the integrity of Johnson Matthey’s reported financial results and its internal financial controls.”

Alan Ferguson
Chairman of the Audit Committee

Role

The terms of reference of the Audit Committee are summarised in the Corporate Governance Report. They can be found in full in the Investor Relations / Corporate Governance section of our website or may be obtained from the Company Secretary.

Composition

The Audit Committee comprises all the independent non-executive directors. The Committee is chaired by Alan Ferguson. Details of Alan’s experience and qualifications are set out 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.

Meeting Frequency

Meetings are held at least four times per year at appropriate times in the reporting and audit cycle and otherwise as required.

Main Activities in the Year

The Audit Committee met five times during the year ended 31st March 2013, on the following dates, and it conducted the following business:

Meeting date Main activities
31st May 2012
  • Reviewed the group’s preliminary announcement, draft report and accounts for 2011/12.
  • Reviewed key accounting judgments including accounting for metal and in particular the treatment of gains and losses identified by stock takes, impairment considerations, tax and provisioning, accounting for pensions and liquidity and going concern.
  • Reviewed credit controls and credit risk and litigation affecting the group.
  • Considered reports from the external auditor on its audit and its review of the 2011/12 accounts including accounting policies and areas of judgment, and its comments on risk management and control matters and corporate governance matters.
  • Approved the Audit Committee Report for 2011/12.
  • Considered reports from internal audit on internal controls.
  • Reviewed the performance of the external auditor, considered the reappointment of KPMG Audit Plc (KPMG) as auditor for 2012/13 and recommended its appointment to the board.
  • Met with both internal audit and the external auditor without management being present.
24th July 2012
  • Reviewed the group’s interim management statement for the first quarter of 2012/13.
  • Reviewed key accounting judgments.
  • Considered reports from internal audit on internal controls.
  • Reviewed the performance of internal audit.
  • Approved a draft specification for the appointment of a new external lead audit partner in view of the current partner’s prospective rotation in 2013/14.
  • Reviewed the effectiveness of risk management processes and internal controls.
  • Considered finance systems and process improvements and the group’s high performance finance initiative.
  • Received and considered a presentation from the Group Tax Director on the group’s management of global duty.
  • Received and considered a presentation from the Division Finance Director, Fine Chemicals on the division’s key financial risks and key performance indicators.
19th November 2012
  • Reviewed the group’s half-yearly report.
  • Reviewed key accounting judgments including accounting for metal and an update on stock take gains and losses, accounting for pensions and tax and going concern.
  • Reviewed credit control and credit risk and litigation affecting the group.
  • Considered a report from the external auditor on its review of the half-yearly report.
  • Approved the proposed external audit scope and fees for 2012/13 and considered the proposed appointment of a successor to the lead audit partner following the current partner’s prospective rotation in 2013/14.
  • Considered reports from internal audit on internal controls and on the proposed three year internal audit plan.
  • Reviewed the status of actions arising as a result of the operational issues at the Salt Lake City refinery.
  • Received and considered a presentation on the group’s high performance finance initiative.
29th January 2013
  • Reviewed the group’s interim management statement for the third quarter of 2012/13.
  • Reviewed key accounting judgments.
  • Considered reports from internal audit on internal controls.
  • Considered and approved the internal audit and group security plans for 2013/14.
  • 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 2012/13 and the associated authorisation policy.
  • Reviewed the group’s whistleblowing procedures and the matters raised during 2012/13.
  • Approved changes to the Group Control Manual.
  • Received and considered a presentation from the Division Finance Director, Emission Control Technologies on the risks facing that business, associated mitigating actions and key controls.
  • Considered the advantages and disadvantages of tendering the external audit in the current year.
26th March 2013 (ad hoc)
  • Concluded discussions on the topic of tendering the external audit.

Since 31st March 2013, the Audit Committee has met once, on the following date, and it conducted the following business:

Meeting date Main activities
3rd June 2013
  • Reviewed the group’s preliminary announcement, draft report and accounts for 2012/13 and the group’s assessment of going concern.
  • Reviewed key accounting judgments including accounting for metal and in particular the treatment of gains and losses identified by stock takes, impairment considerations, tax and provisioning, accounting for pensions and liquidity and going concern.
  • Reviewed credit controls and credit risk and 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 and corporate governance matters.
  • Approved the Audit Committee Report for 2012/13.
  • Considered reports from internal audit on internal controls, including results of the controls self assessment questionnaire, and assessed the effectiveness of risk management processes and internal controls.
  • Considered the performance of the external auditor, assessed its independence, qualification, expertise and resources, the effectiveness of the audit process and partner rotation; considered the appointment of KPMG LLP for 2013/14 and recommended its appointment to the board.
  • Met with both internal audit and the external auditor without management being present.
  • Reviewed the status of actions arising as a result of the operational issues at the Salt Lake City refinery.
Back to top