AUDIT & RISK COMMITTEE (the Committee)


The Board of the Company shall appoint the Committee. All members of the Committee shall be independent non-executive directors of the Company. The Committee shall consist of not less than three members. A quorum shall be two members.

The Board of the Company shall appoint the Chairperson of the Committee.

At least one member of the Committee should have recent and relevant financial experience.


The Secretary of the Company shall be the secretary of the Committee.

Attendance at meetings

No one other than Committee members shall be entitled to attend Committee meetings. Other persons may attend at the invitation of the Committee.
There should be at least one meeting a year, or part thereof, where the Committee meets the external auditors.

Frequency of meetings

Meetings shall be held not less than four times a year (to coincide with key dates in the Company’s financial reporting cycle).
The external auditor may request a meeting if they consider that one is necessary.


The Committee is authorised by the Board to:

  • investigate any activity within its terms of reference;
  • seek any information that it requires from any employee of the Company and all employees are directed to co-operate with any request made by the Committee; and
  • Obtain outside legal or independent professional advice, at the Company’s expense, and secure the attendance of outsiders with relevant experience and expertise if it considers this necessary.


The duties of the Committee shall be:

Financial Reporting

  • to review, and challenge where necessary, the actions and judgements of management, in relation to the Company’s financial statements, operating and financial review, interim reports, preliminary announcements and related formal statements before submission to, and approval by, the Board, and before clearance by the auditors. Particular attention should be paid to:
    • critical accounting policies and practices and any changes in them;
    • decisions requiring a significant element of judgement;
    • the extent to which the financial statements are affected by any unusual transactions in the year and how they are disclosed;
    • the clarity of disclosures;
    • significant adjustments resulting from the audit;
    • the going concern assumption;
    • compliance with accounting standards; and
    • compliance with company and charity legislation;
  • to consider other topics, as defined by the Board.

Internal control and risk management

  • to review the Company’s procedures for detecting fraud and whistle blowing and ensure that arrangements are in place by which Directors, staff and other persons may, in confidence, raise concerns about possible improprieties in matters of financial reporting, financial control or any other matters;
  • to review management’s reports on the effectiveness of the systems for internal financial control, financial reporting and risk management;
  • to monitor the integrity of the Company’s internal financial controls;
  • to review the statement in the annual report and accounts on the Company’s internal controls and risk management framework, and
  • to assess the scope and effectiveness of the systems established by management to identify, assess, manage and monitor financial and non-financial risks.
  • to ensure that the Company’s risk register and safety statement is reviewed annually.

[Note: the board retains responsibility for the review of the effectiveness of the system of internal control and must form its own opinion despite aspects of that review being delegated to the Committee.]

Internal audit

  • to consider annually whether there is a need for an internal audit function where no such function exists and where one exists;
  • to review the internal audit programme and ensure that the internal audit function is adequately resourced and has appropriate standing within the Company;
  • to ensure that the internal auditor has direct access to the Board Chairperson and the Committee and is accountable to the Committee;
  • to receive a report on the results of the internal auditor’s work on a periodic basis;
  • to review and monitor management’s responsiveness to the internal auditor’s findings and recommendations;
  • to monitor and assess the role and effectiveness of the internal audit function in the overall context of the Company’s risk management system; and
  • to appoint or dismiss the head of internal audit.

External audit

  • to oversee the Company’s relations with the external auditor;
  • to consider, and make recommendations on the appointment, reappointment and removal of the external auditor;
  • to approve the terms of engagement and the remuneration to be paid to the external auditor in respect of audit services provided;
  • to access the qualification, expertise and resources, effectiveness and independence of the external auditors annually. Steps to consider include:
    • seeking reassurance that the auditors and their staff have no family, financial, employment, investment or business relationship with the company (other than in the normal course of business);
    • seeking from the audit firm, on an annual basis, information about policies and processes for maintaining independence and monitoring compliance with relevant requirements, including current requirements regarding the rotation of audit partners and staff;
    • monitoring the external audit firms’ compliance with applicable ethical guidance relating to the rotation of audit partners, the level of fees that the company pays in proportion to the overall fee income of the firm, office and partner and other related regulatory requirements; and
    • agreeing with the board and monitoring the Company’s policy for the employment of former employees of the external auditor;
  • to discuss with the external auditor, before the audit commences, the nature and scope of the audit;
  • to review with the external auditor, the findings of its work, including, any major issues that arose during the course of the audit and have subsequently been resolved and those issues that have been left unresolved; key accounting and audit judgements; levels of errors identified during the audit, obtaining explanations from management and, where necessary the external auditors as to why certain errors might remain unadjusted;
  • to review the audit representation letters before consideration by the board, giving particular consideration to matters that relate to non-standard issues;
  • to assess, at the end of the audit cycle, the effectiveness of the audit process by:
    • reviewing whether the auditor has met the agreed audit plan and understanding the reasons for any changes in perceived audit risks and the work undertaken by the external auditors to address those risks;
    • consideration of the robustness and perceptiveness of the auditors in their handling of the key accounting and audit judgements identified and in responding to questions from the audit committee, and in their commentary, where appropriate, on the systems of internal control; and
    • obtaining feedback about the conduct of the audit from key people involved;
  • to review and monitor the content of the external auditor’s management letter, in order to assess whether it is based on a good understanding of the Company’s business and establish whether recommendations have been acted upon and, if not, the reasons why they have not been acted upon;
  • to develop and recommend to the Board the Company’s policy in relation to the provision of non-audit services by the auditor and ensure that the provision of such services does no impair the external auditor’s independence or objectivity. In doing so, the Committee should:
    • consider whether the skills and experience of the audit firm make it a suitable supplier of the non-audit services;
    • consider whether there are safeguards in place to ensure that there is no threat to objectivity and independence in the conduct of the audit resulting from the provision of such services by the external auditor;
    • consider the nature of the non-audit services, the related fee levels, and the fee levels individually and in aggregate relative to the audit fee;
    • consider the criteria that govern the compensation of the individuals performing the audit; and
    • set and apply a formal policy specifying the types of non-audit work; from which the external auditors are excluded; for which the external auditors can be engaged without referral to the Committee; and for which a case-by-case decision is necessary.


The Secretary shall circulate the minutes of meetings of the Committee to all members of the Board, and the Chairperson of the Committee shall, at a minimum, attend the Board meeting at which the accounts are approved.

The Committee shall annually review its terms of reference and its own effectiveness and recommend to the Board any necessary changes.

The Committee shall prepare a report on its role and responsibilities and the actions it has taken to discharge those responsibilities for inclusion in the annual report and accounts. Such a report should specifically include:

  • a summary of the role of the Committee;
  • the names and qualifications of all members of the Committee during the period;
  • the number of Committee meetings and attendance by each member and
  • the way the Committee has discharged its responsibilities.

Where disagreements between the Committee and the Board cannot be resolved, the Committee shall report such an issue to the members as part of the report on its activities in the Company’s annual report.

If the Board does not accept the Committee’s recommendation regarding the appointment, reappointment and removal of the external auditor, the Committee shall include a statement explaining its recommendation and reasons why the Board has taken a different stance in the annual report.

The Committee Chairperson shall attend the AGM and shall answer questions, through the Chairperson of the Board, on the Committee’s activities and its responsibilities.