Tesco 2013 Annual Report Download - page 38

34 Tesco PLC Annual Report and Financial Statements 2013
Corporate governance continued
Ken Hanna Audit Committee Chairman
Audit Committee responsibilities
The Committee’s Terms of Reference can be found at www.tescoplc.com.
The Committee Chairman, Ken Hanna, and Gareth Bullock, a member
of the Committee, both have recent and relevant financial experience.
The key responsibilities of the Committee are to:
• consider the appointment of the external auditors, their reports
to the Committee and their independence, including an assessment
of their appropriateness to conduct any non-audit work;
• review the financial statements and announcements relating
to the financial performance of the Company;
• review the internal audit programme and ensure that the Internal
Audit function is adequately resourced and has appropriate standing
within the Company;
• discuss with the external auditors the nature and scope of the audit;
• 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;
• formally review the effectiveness of the external and internal audit
processes;
• consider management’s response to any major External or Internal
Audit recommendations;
• review the Company’s plans for business continuity;
• review the Company’s plans for the prevention and detection
of fraud, bribery and corruption; and
• report to the Board on how it has discharged its responsibilities.
During the year the Committee received update reports from a number
of businesses, including the Bank and from Internal Audit on its work,
including findings from its internal audit programme. The Committee
also considered a variety of matters including the Group Finance Risk
Register, the arrangements for IT governance and business continuity,
the Grocery Supply Chain Compliance Code and Whistleblowing
arrangements.
In relation to the financial statements the Committee: reviewed and
recommended approval of the quarterly, and half-yearly results and
annual financial statements; conducted impairment reviews; reviewed
and recommended dividend levels; reviewed corporate governance
disclosures; and monitored the statutory audit.
The Committee continually assesses the need for training and
the annual agenda provides substantial time for technical updates
which are generally provided by external experts. During the year
training was provided on: UK Financial Reporting Council’s guidance
of listed companies; developments in corporate governance; the
outputs from the Financial Reporting Review Panel; and regulatory
updates including: the Competition Commission’s issues statement;
the European Commission’s proposals for audit reform; IASB
updates on reporting; direct and indirect tax; pensions; capital
markets; sustainability; assurance and remuneration. Training
is also provided on an ongoing basis to meet the specific needs
of individual committee members.
Audit Committee attendance
Number of
possible
meetings
attended
Actual
meetings
attended
Members
Ken Hanna (Chairman since 5 October 2012) 5 5
Gareth Bullock 5 5
Patrick Cescau 5 4
Past members
Ken Hydon (Chairman until 5 October 2012) 3 3
Introduction from the Committee Chairman
Our business operates in an increasingly challenging environment,
particularly with regard to economic, reputational, political and
regulatory factors. Consequently we have seen a trend towards
increasing risks in the business. The role of the Audit Committee is
now more important than ever in reviewing the effectiveness of the
Group’s internal controls, providing assurance on the Group risk
management processes and assessing and acting upon information
received by external auditors and Internal Audit. We keep the current
risk management and internal controls framework under review,
to ensure that it adapts to the changing environment and remains
as robust as it can be.
Ken Hanna Audit Committee Chairman
Audit Committee