Audit Committee

The Audit Committee comprises of Ric Piper, who is the Committee’s Chairman, and Stephen Burke. Both are independent non-executive directors.

The Committee’s central function is review the scope of the external audit, to receive direct reports from the independent external auditors and to review the half yearly and annual financial statements before they are presented to the Board, focusing in particular on accounting policies and compliance, areas of management judgment and estimates and the effectiveness of internal control procedures. Part of each meeting is with the independent external auditors without Executive Board members present. The independent external auditors also have unrestricted access to the Committee and its Chairman.

The key elements of processes used by the Audit Committee to review the effectiveness of internal control include:

• Review of significant Group risks reported by the Group Executive and the Board;
• Discussion with management on risk areas identified by management and/or the audit process

The Board and the Audit Committee monitor the cost effectiveness of audit and non-audit work performed by the independent external auditors and also consider the potential impact, if any, on the corporate relationship with the auditors before awarding any non-audit work. The appointment of independent external auditors and level of fees payable for both audit and non-audit work are agreed by the Committee. The Committee regularly reviews all fees for non-audit work paid to the independent external auditors. Details of these fees can be found in note 3 to the Financial Statements.

The independent external auditors also operate procedures designed to safeguard their objectivity and independence. These include the periodic rotation of audit partner, use of independent concurring partners, use of a technical review panel (where appropriate) and annual independence confirmations by all staff. The independent external auditors report to the Committee on matters including independence and non-audit work on an annual basis.