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The Audit Committee consists entirely of independent Non-Executive Directors:
Andrew Dougal is an accountant who previously held a number of senior executive positions, including Chief Executive of Hanson plc, the international building materials company after its demerger from Hanson, the international diversified industrial group, where he was Finance Director. Andrew was appointed to the Audit Committee in October 2011.
Alison Horner was appointed to the Audit Committee in December 2013. Alison is Chief People Officer of Tesco.
Ceri Powell is the Executive Vice President for Global Exploration of Royal Dutch Shell and is accountable for (i) delivery of the international exploration operations and new business development for Asia, the Middle East, Australia, Africa, Europe and Russia and (ii) Head of the Exploration Function oversight of the strategy, portfolio and technical capability of Global Exploration.
Keith Cochrane is the Chief Executive of Weir Group, the FTSE100 engineering business. He joined the Weir Group as Finance Director in July 2006 and was appointed Chief Executive in November 2009.
Appointments to the Committee are made by the Board.
The Audit Committee has in attendance at meetings, by invitation of the Committee, Executive Directors, representatives of the external auditors, (KPMG Audit Plc), the Group Head of Risk and the Head of Internal Audit. It is also able to invite others as it requires from time to time. The Committee also meets privately with both the external and internal auditors.
The responsibilities of the Audit Committee include:
The Committee is authorised by the Board to (i) seek any necessary information to fulfil its duties (ii) call any member of staff to be questioned at a meeting of the Committee as and when required and (iii) obtain external professional advice, at the Company's expense, which might be necessary for the fulfilment of its duties.
The members of the Committee receive fees as Non-Executive Directors which also reflect their membership of the Audit Committee and other Board Committees. The chairman of the Audit Committee receives and additional fee for this role.
The Audit Committee and Board place great emphasis on the objectivity of the Group's auditor, KPMG Audit plc, in their reporting to shareholders.
The KPMG audit director and manager is present at Audit Committee meetings to ensure full communication of matters relating to the audit.
The overall performance of the auditor is reviewed annually by the Audit Committee, taking into account the views of management, and feedback is provided to senior members of KPMG unrelated to the audit. This activity also forms part of KPMG's own system of quality control. The Audit Committee also has discussions with the auditor, without management being present, on the adequacy of controls and on any judgmental areas. These discussions have proved satisfactory to date.
The scope of the forthcoming year's audit is discussed in advance by the Audit Committee. Audit fees are reviewed by the Audit Committee after discussions between the businesses and the local KPMG offices and are then referred to the Board for approval. Rotation of audit director's responsibilities within KPMG is required by their profession's ethical standards. The current audit director responsible for the Carillion engagement is in his second year of signing the report. There is also rotation of key members within the audit team.
Assignments awarded to KPMG and its associates have been and are subject to controls by management that have been agreed by the Audit Committee so that audit independence is not compromised. In summary, the procedures are:
Other than audit, the Group Finance Director is required to give prior approval of work carried out by KPMG and its associates in excess of a predetermined threshold; part of this review is to determine that other potential providers of the services have been adequately considered.
These controls provide the Audit Committee with adequate confidence in the independence of KPMG in their reporting on the audit of the Group.