The Audit Committee has wide-ranging oversight responsibilities assigned to it by the Board. It reports regularly to the Board on compliance in relation to the business activities for which it has responsibility within its terms of reference.
The committee consists of Messrs Davis, Stein and Murray, (pictured) who chairs the committee, all of whom are independent Non Executive Directors. The committee's membership is reviewed by the Nominations Committee and by Mr Murray at regular intervals.
Members of the committee are appointed by the Board following recommendations by the Nominations Committee. Each member of the committee brings relevant financial experience at a senior executive level; the expertise and experience of the members of the committee are summarised on our board section.
The Audit Committee has oversight of and is ultimately responsible for the company's financial reporting processes and the quality of its financial reporting.
The Board considers that each member of the committee is independent within the definition set out in the Code. Mr Stein is considered by the Board to have significant, recent and relevant financial experience, having been, until September 2007, Finance Director of GKN plc.
All members of the committee receive appropriate induction, which is in addition to the induction which all new Directors receive and includes an overview of the business, its financial dynamics and risks. Members of the committee undertake ongoing training as required. Audit Committee members are expected to have an understanding of the following areas:
The committee is required to assist the Board to fulfil its responsibilities related to external financial reporting and associated announcements.
- the principles of, contents of and developments in, financial reporting, including the applicable accounting standards and statements of recommended practice and, in particular, the appropriateness of the Company's accounting policies and integrity of the financial statements; - the Company's wider corporate policies and its financing; and the Company's systems of internal control and matters that require the use of judgement in the presentation of accounts and key figures as well as the role of internal and external auditors.
The committee meets regularly throughout the year and its agenda is linked to events in the Company's financial calendar. The agenda is mostly cyclical although each member of the committee may require reports on matters of interest in addition to the regular items. Members' attendance at the meetings held during the year is set out in the table on the Meetings attendance page of the Annual Report and Accounts.
The committee invites the Chairman, the Group Chief Executive, the Chief Financial Officer, the Director of Group Strategy and Investor Relations and the Head of Internal Audit, together with senior representatives of the Company's external auditors, to attend each meeting and receive its papers, although it reserves part of each meeting for discussions without the invitees being present. Other senior executives are invited to present such reports as are required for the committee to discharge its duties.
The Audit Committee members regularly meet the Head of Internal Audit and the external auditors without the presence of executive management. The Chairman of the Audit Committee attends the Annual General Meeting to respond to any shareholder questions that might be raised on the committee's activities.
More details about the functions and operations of the Audit Committee can be seen in our current Annual Report and Accounts.