Audit, Risk Management & Compliance Committee

The Audit, Risk Management and Compliance Committee assists the Board in fulfilling its responsibilities relating to accounting and financial reporting practices, the management of business and operational risks, and the placement and monitoring of internal controls. Specifically, the Committee:

1. oversees the integrity and quality of financial information presented to the Board;
2. reviews the independence and appointment of the auditor;
3. oversees the scope and the quality of the external audit;
4. evaluates the need for and scope of internal audit processes, taking account of the Company’s risk profile;
5. gains assurance that there are processes in place for appropriate management of identified risks;
6. ensures that the management of identified risks is monitored through a number of activities including internal and external audits; and
7. ensures compliance with statutory responsibilities.

Correspondingly, the Committee has the following duties and responsibilities:

1. to review the audit plan with the external auditors in advance;
2. to determine that no management restrictions are being placed upon the external auditors by inter alia meeting alone with the auditor at least annually;
3. to evaluate the overall effectiveness of the external audit;
4. to evaluate the adequacy of the Company’s accounting control system by reviewing written reports from the external auditors and monitor the Board’s and management’s responses and actions to correct any noted deficiencies;
5. to review management’s response to the external auditor’s letter prior to remittance of that response;
6. to review all financial reports to be made public prior to their release;
7. to review and consult on all significant accounting policy changes;
8. to review the financial statements contained in the statutory accounts and annual report with the Managing Director, the Chief Financial Officer and external auditors and recommend acceptance to the Board;
9. to oversee the assessment of the risk profile for the Company, to understand the key risks affecting the financial, regulatory and operational exposures of Genea;
10. to review the risk management systems for the adequacy of systems to monitor and manage the key risks, by setting prudent limits, and requiring adequate and timely reporting processes;
11. to review the effectiveness of the policies and procedures designed to minimise risk exposure;
12. to plan internal audit practices and projects including communicating expectations, approving the scope, monitoring management’s response and assessing the effectiveness of the internal audit;
13. to prepare a report to the Board summarising the work performed by the Committee to fully discharge its duties during the year;
14. to review the existence and adequacy of the Company’s insurance policies and ensure they are sufficient to cover the nature and value of potential loss from insurable events;
15. to review management of cash and other assets;
16. to advise the Board on any regulatory compliance and reporting issues likely to affect the Company’s financial performance, operation or service; and
17. each year, to review these the terms of reference.

Composition of the committee

The Committee must have at least three members and:

• each member must be a non-executive director;
• the majority of members must be independent directors; and
• the Committee must be chaired by an Independent Chair who is not Chair of the Board.

The Board confirms membership of the Committee annually and appoints one of the members to chair the Committee. The Committee has unfettered access to the external auditors and to senior management of the Company, and may seek external advice and outsource projects where it deems this necessary. The Committee has adopted an Audit Independence Policy which addresses the selection and appointment of the external auditor, the rotation of external audit engagement partners and policies to ensure audit independence. The Committee holds at least three meetings per year and such additional meetings as the Chair shall decide in order to fulfil its duties. In addition, the Chair calls a meeting of the Committee if required to do so by any Committee member, the Managing Director, the Board, or the external auditors. If a Committee member cannot attend a meeting, he or she may appoint an alternate for such a meeting. The alternate must be a non-executive member of the Board. A quorum consists of a majority of Committee members, and the executive provides secretarial assistance to the Committee. All directors of the Company who have not formally been appointed by the Board to the Committee have the right to attend Committee meetings. All directors of the Company are provided with copies of the agenda papers and minutes of the meetings in the same manner and at the same time as members of the Committee.

Risk management

The Company has a comprehensive system of risk management and oversight, administered by the Chief Risk Officer who reports to each meeting of the Audit, Risk Management and Compliance Committee on the effectiveness of the Company’s management of its material business risks. The risk management system includes extensive policies addressing the identification, control and management of material risks, including management of appropriate insurances.