Annual Report 2016 - Page 49

Annual Report 2016 Nomination Committee In addition to conducting a rigorous process when making appointments to the Board, the Nomination Committee is responsible for reviewing the balance of skills and knowledge on the Board. It also keeps under review the possibility of any actual or potential conflicts of interest. The Nomination Committee is formed on an ad hoc basis, when the need for an appointment to the Board is identified or as otherwise considered appropriate by the Board. Audit Committee The main role and responsibilities of the Audit Committee are set out in written terms of reference and include: • Monitoring the integrity of financial statements and reviewing significant financial reporting judgements contained therein • Reviewing the Group’s internal financial controls • Monitoring and reviewing the effectiveness of the Group’s Internal Audit function • Recommending to the Board the appointment of the external auditor and monitoring the auditor’s independence, performance and effectiveness and approving the nature and scope of material external audits and approving the auditor’s remuneration The members of the Audit Committee are Ram Kumar and Adrian Page, who receive written reports from Internal Audit and the external auditor at least once a year. Deloitte LLP (the Group’s external independent auditor), the Company Secretary, the Group Internal Audit Manager and, where appropriate, other financial management also receive this information and are invited to Audit Committee meetings. The Board is satisfied that the members of the Audit Committee have recent and relevant financial experience and are able to approach matters with a level of independent judgement. Every year the Audit Committee receives an Internal Audit report on the results of internal audit work together with agreed management actions in relation to audit recommendations. The work of the Audit Committee specifically covers group business risks, and the work of Internal Audit and the external auditor. The Group’s external auditor, Deloitte LLP, attend Audit Committee meetings and provide detailed reports regarding audit planning and the results of its external independent audit. In order to facilitate the Group’s risk management process, key risks facing each business within the Group and the Group as a whole are regularly reviewed, documented and summarised by senior management. Every six months the management teams of each business formally discuss, review, approve and document the relevant business risks. The objective of this process is to ensure that each management team is identifying, prioritising and rating all key business risks, and implementing and amending, where necessary, appropriate procedures and controls as required to mitigate these risks. It also allows management to highlight, document and prioritise as appropriate any outstanding actions with respect to the implementation of these procedures and controls. The Internal Audit function also critically assesses the risks, controls and procedures identified and the rating assigned to them. This information is reviewed by the Audit Committee. The internal audit work covers financial and operational risk assurance, regulatory assurance, testing of legal compliance and financial controls and other business commercial support work. The responsibilities of the external independent auditor in the area of financial reporting are set out in its report in each year’s Annual Report. Accountability and audit Financial reporting and systems The Board of Directors recognises the need to present a balanced, understandable and clearly defined assessment of the Group’s operational and financial performance and position including its future prospects. This is provided by a review of the Group’s operations and performance as set out in the Strategic Report of each year’s Annual Report. 47