Terms of Reference of the Audit Committee of the Board of Photo-Me International plc
(as approved by the Board of Directors of the Company on 1 April 2009)
- The membership of the Committee shall be appointed by the Board. The Committee shall consist of not less than two members, all of whom shall be independent non-executive directors of the Company. The Chairman of the Board may also serve on the Committee as an additional member providing that he was considered independent on appointment as Chairman. At least one member of the Committee should have recent and relevant financial experience. A quorum shall be two members.
- The Chairman of the Committee shall be appointed by the Board but shall not be the Chairman of the Board. In the absence of the Chairman of the Committee, the remaining members present shall elect one of their number to chair the meeting.
Attendance at meetings
- The Group Finance Director, Group Internal Audit Manager and a representative of the external auditors shall attend meetings at the invitation of the Committee.
- The Chairman of the Board, the CEO and other Board members shall attend if invited by the Committee.
- There should be at least one meeting (or part thereof) a year where the external auditors attend without management present.
- The Company Secretary, or his nominee, shall be secretary of the Committee.
Frequency of meetings
- Meetings shall be held not less than twice a year, and where appropriate should coincide with key dates in the Company's financial reporting cycle.
- Meetings shall be summoned by the secretary of the Committee at the request of any of its members or at the request of external auditors or internal auditors if they consider it 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 and such advisors may attend meetings as necessary.
- The responsibilities of the Committee shall be:
- to consider the appointment of the external auditor and assess independence of the external auditor, ensuring that key partners are rotated at appropriate intervals;
- to recommend the audit fee to the Board and pre-approve any fees in respect of non-audit services provided by the external auditor and to ensure that the provision of non-audit services does not impair the external auditor's independence or objectivity;
- to discuss with the external auditor, the nature and scope of the audit and to review the auditor's quality control procedures and steps taken by the auditor to respond to changes in regulatory and other requirements;
- to oversee the process for selecting the external auditor and make appropriate recommendations through the Board to the shareholders to consider at the Annual General Meeting;
- to review the external auditor's management letter and management's response;
- to review the internal audit programme and ensure that the internal audit function is adequately resourced and has appropriate standing within the Company;
- to consider management's response to any major external or internal audit recommendations;
- to approve the appointment or dismissal of the Group Internal Audit Manager;
- to review the Company's procedures for handling allegations from whistleblowers;
- to review management's and the internal auditor's reports on the effectiveness of systems for internal financial control, financial reporting and risk management;
- to review, and challenge where necessary, the actions and judgements of management, in relation to the interim and annual financial statements before submission to the Board, paying particular attention to:
- critical accounting policies and practices, and any changes in them
- decisions requiring a major 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
- compliance with FSA and other legal requirements
- reviewing the Company's statement on internal control systems prior to endorsement by the Board and to review the policies and process for identifying and assessing business risks and the management of those risks by the Company; and
- to consider other topics, as defined by the Board.
- The secretary of the Committee shall circulate the minutes of meetings of the Committee to all members of the Board, and the Chairman of the Committee or, as a minimum, another member of the Committee, shall attend the Board meeting at which the accounts are approved.
- The Committee members shall conduct an annual review of their work and these terms of reference and make recommendations to the Board.
- The Committee's duties and activities during the year shall be disclosed in the annual financial statements.
- The Chairman of the Committee shall attend the Annual General Meeting and shall answer questions on the Committee's activities and responsibilities.