Items reviewed during the year include:
Financial reporting
The Committee reviewed the draft annual and interim management report before recommending their publication to the Board. The Committee discussed with the Chief Executive, Chief Financial Officer and external auditors the significant accounting policies, estimates and judgements applied in preparing these reports.
Internal controls
The Committee has an ongoing process for reviewing the effectiveness of the system of internal controls. During 2007/08 it considered reports from the Head of Internal Control summarising the work planned and undertaken, recommending improvements and describing actions taken by management.
Terminal 5 Readiness Programme
The Committee reviewed reports from Internal Control in relation to the Company’s preparation for the move to Terminal 5.
Internal audit
The Committee evaluated the performance of internal audit from the quality of reports and recommendations from the Head of Internal Control. An external quality assessment of internal audit was undertaken by PricewaterhouseCoopers and overall the report commended the Company’s Internal Control team.
Risk group
The Committee reviewed the reports produced by the risk management process during the year. The Committee also reviewed and approved the Company’s new Insurance Governance Statement.
Whistleblowing
The confidential helpline run by Safecall, which allows employees to raise concerns, is working well and confidence in it is continuing. The Committee receives regular reports on the confidential reporting system to ensure that the Company’s whistleblowing processes work appropriately.
Reappointment of external auditors
The Committee may make recommendations to the Board, to be put to shareholders for approval at the annual general meeting, in relation to the appointment, reappointment and removal of the Company’s external auditors.
Auditor independence
The Committee reviews the work undertaken by the external auditor and assesses annually its independence and objectivity. In doing so, it takes into account relevant professional and regulatory requirements and the relationship with the auditor as a whole, including the provision of any non-audit services. The Committee monitors the auditor’s compliance with relevant regulatory, ethical and professional guidance on the rotation of partners, as well as assessing annually its qualifications, expertise, resources and the effectiveness of the audit process, including a report from the external auditor on its own internal quality procedures.
Audit Committee effectiveness
The Committee prepares and reviews with the Board an annual performance evaluation of the Committee. The findings of the review ensure that the Committee is satisfied that it is operating effectively, meeting all applicable legal and regulatory requirements.
Other issues
Details of the fees paid to the external auditor during 2007/08 can be found in note 6 to the financial statements.
The terms of reference of the Committee are reviewed at least annually and any changes are recommended to the Board. As mentioned above, they were changed during the year.