(1)
The Audit Committee is a committee of the Board and, as such, is
appointed by and reports to the Board.
(2)
The Audit Committee is not an executive committee; it makes
recommendations to the Board, including in respect of approval
by the Board of the interim and full year accounts of the Company.
Specific authority is delegated to the Committee by the Board
to agree the external audit fee.
The
Audit Committee is authorised by the Board to investigate any
activity within its terms of reference. For this purpose it
may seek any information it requires from external auditors
and any employee, including from internal audit, and employees
are directed to co-operate with any such request made by the
Audit Committee. The Finance Director will be informed of such
requests.
The
Audit Committee is authorised to obtain external legal or other
independent professional advice, including commissioning investigations
by external auditors. The Chairman will be informed.
(3)
The Chairman and members of the Audit Committee shall be appointed
from the independent non-executive members of the Board. The
Committee shall consist of not less than three members. Members
should be free from any business or other relationship which
could materially interfere with the exercise of their independent
judgement.
(4)
The Secretary of the Audit Committee shall be the Company Secretary.
(5)
A quorum shall be two members. In addition to the members of
the Committee, it will be normal for the following to be invited
to attend the meetings:
· The
CEO, the Finance Director and head of internal audit
· A
partner in the accounting firm who are external auditors.
(6)
The Chairman of the Audit Committee may request the attendance
of others at meetings including legal advisors and, if so requested,
Executive Directors will also make themselves available.
(7)
At least once a year a partner representing the external auditors
will meet with the Audit Committee without any executive member
of the Board being present.
(8)
The external auditors and internal audit shall at all times
have the right of direct access to the Chairman of the Audit
Committee.
(9)
The Audit Committee shall meet prior to the Board Meetings
which consider the interim and full year's results and other
meetings will be held as necessary.
Responsibilities
(10)
The responsibilities of the Committee shall be:
(a)
to recommend to the Board approval of the interim and full
year accounts of the Company;
(b)
to consider the appointment of the external auditors and
assess the independence of the external auditors, ensuring
that key partners are rotated at appropriate intervals;
(c)
to recommend the audit fee to the Board and review any fees
in respect of non audit services provided by the external
auditors to ensure that the provision of non audit services
does not impair the external auditors' independence or objectivity;
(d)
to discuss with the external auditors, before the audit commences,
the nature and scope of the audit and to review the auditors'
quality control procedures and steps taken by the auditors
to respond to changes in regulatory and other requirements;
(e)
to oversee the process for selecting the external auditors
and make appropriate recommendations through the Board to
the shareholders to consider at the AGM;
(f)
to review the external auditors’ management letter
and management's response;
(g)
to review the internal audit programme, including whether
the internal audit function is adequately resourced and has
appropriate standing within the Company;
(h)
to consider management's response to any major external or
internal audit recommendations;
(i)
to approve the appointment or dismissal of the head of internal
audit;
(j)
to review the Company's procedures for handling allegations
from whistleblowers;
(k)
to review management's and the internal auditor's reports
on the effectiveness of systems for internal financial control,
financial reporting and risk management including the group
exposure to foreign exchange, metal and credit;
(l)
to review the assets and liabilities of the Pension Fund;
(m)
to review the actions and judgements of management in relation
to the interim and annual financial statements before submission
to the Board, paying particular attention to:
i)
critical accounting policies and practices, and any changes
in them
ii)
decisions requiring a major element of judgement
iii)
the extent to which the financial statements are affected
by any unusual transactions in the year and how they are
disclosed
iv)
the clarity of disclosures
v)
significant adjustments resulting from the audit
vi)
the going concern assumption
vii)
compliance with accounting standards
viii)
compliance with stock exchange and other legal requirements
ix)
reviewing the Company's statement on internal control systems
prior to endorsement by the Board and to review the policies
and process for identifying and assessing business risks
and the management of those risks by the Company; and
(n)
to consider other topics, as defined by the Board.
Reporting
Procedures
(11)
The Secretary shall circulate the minutes of the meetings of
the Committee to all members of the Board, and the Chairman
of the Committee or, as a minimum, another member of the committee,
shall attend the Board meeting at which the accounts are approved.
(12)
The Committee members shall conduct an annual review of their
work and these terms of reference and make recommendations
to the Board.
(13)
The Committee's duties and activities during the year shall
be disclosed in the annual financial statements.
(14)
The Chairman shall attend the AGM and shall answer questions,
through the Chairman of the Board, on the Audit Committee's
activities and its responsibilities.
