Audit committee

John Warren
Chairman of the Audit committee

• Who is on the Audit committee?
• What is the role of the Audit committee?
• How does the Audit committee operate?
• Does the Audit committee review the performance of the external auditors?
• How frequently did the Audit committee meet during 2009?
• What activities did the Audit committee undertake during the year?
• Does the board evaluate the performance of the Audit committee?

Who is on the Audit committee?

During 2009, the committee comprised the following non-executive directors (all of whom are independent):

	Date first appointed
John Warren (committee chairman since 27 April 2006)	01 Jan 2006
Richard Greenhalgh	03 Mar 2008
Owen O’Donnell	11 Sept 2008
Bill Shannon	03 Apr 2006

The board is satisfied that, taken as a whole, the committee has recent and relevant financial experience. Normally, the chairman, chief executive, finance director, company secretary and group financial controller attend committee meetings, as do representatives of the external auditors.

What is the role of the Audit committee?

In summary, the committee assists the board in reviewing the effectiveness of internal control systems, oversees the establishment, implementation and maintenance of the Company’s code of conduct and monitors the Group’s whistleblowing programme. The committee also reviews financial statements to be published externally before their submission to the board, in order to ensure that they present a fair assessment of the Group’s position and prospects. It also authorises any change in accounting policies. The Audit committee’s terms of reference are available on written request to the company secretary.

How does the Audit committee operate?

The committee meets at least three times a year and at least annually with the external auditors without management being present. The committee keeps under review the independence and objectivity of the external auditors and their effectiveness. In particular, the committee oversees the nature and amount of non-audit work undertaken by PricewaterhouseCoopers LLP each year to ensure that external auditor independence is safeguarded. All non-audit services above a value of £50,000 to be performed by the external auditors are required to be approved by the Audit committee in advance and the Group’s policy is that, where appropriate, non-audit work is put out to competitive tender.

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Does the Audit committee review the performance of the external auditors?

The committee reviews the effectiveness of the external audit process and the external auditors’ performance annually, taking into account the views of management, and feedback is provided to the auditors.

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How frequently did the Audit committee meet during 2009?

There were three meetings of the committee during the year under review

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What activities did the Audit committee undertake during the year?

In 2009 the committee examined the effectiveness of the Group’s approach to:

• Assessment of risk - by reviewing evidence of current and emerging risk.
• Internal control - by approving the internal audit plan and reviewing its findings, reviewing the annual and interim financial statements and reviewing the reports of the external auditors.
• Action plans to address any failings or weaknesses of internal control.
• Action plans to manage significant risks.

This process has been in place during the year and up to the date of approval of the Annual Report and Financial Statements. It has been reviewed by the board and meets the Internal Control Guidance for directors contained within the Combined Code of the Financial Reporting Council.

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Does the board evaluate the performance of the Audit committee?

The audit committee’s performance was assessed by questionnaire to members and other executives who have dealings with the committee in December 2009. The board concluded that the committee continues to function effectively.

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