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Corporate Governance (continued)
To broaden their experience, the Executive Directo6 are
errouragd to tnke external appointrnenb as non€xecutive
dirrtors, usually up to a maxmum of t\ o. They may retain
the remuneration from such appointments. All appotntmenb
must be appored by the Board to aloid conflicts of inter6l
Board committees
The committees established by the Board and their membeEhip
are set out on page 24. Each committee has witten terms of
reference and levels of authority and, except in the case of the
Remuneration Committee, minutes of meetings are circulated
to all Directo6.
The principal committees are the Audrt, Remuneration,
l"lomination and Executi\,e Committees. Reflecting the important
role played by the independent Non€,\ecutrve Directon in
ensuring high standards of corporate gcrrernance, the Audit
and Remuneration Committees comprise all the Non€,\ecutive
Directo6. Follc fiing the retrrement of Sir Peter Watters, the Audit
Committee has been chaired by Kahben O'Doncnran, wfiilst
the Remuneration Committee has been chaired by Sir Dominic
Cadbury the senior independent Non+xeolti\€ Dircctor. The
Nomination Committee comprises the Chairman, in addition to
all the Non+xecutive Directo6, and is also chaired by the senior
Nonexecuttve Director. The Executive Committee comprises the
Chairman, the Group Finance Dircctor and the Chief Executive
fficers of the Companyt two main busines units.
The role of the Remuneration Committee is described on
page 30. tt rneets at least three times each year. The nnin
responsibilities and procedures of the other three principal
Committees are a follovrr:
Audit Conmitte - makes recommendations to the Board
regarding the appointment of the o\ternal auditors, and rans,tus
their independence and obJecttvity. lhe Committee Igr'iqrs the
half-year and annual financial statemen6 with particular €ference
to accounting policies and practices, and the scope and results
of the audit. lt also reviq 6 the nsk assesment and audit plan of
the internal audit department and other control procedures. The
Committee mees three times each year, and iB meetings are
normally attended by the Group Finance Directot the enernal
audito6, the Group Financial Controller and the Head of lnternal
Audit. At least once eadr )€ar the Committee meets with the
e,rternal auditon wi'i*rout the presence of Executive Dircctors or
other management.
N@iinatbn Committ@ - makes recommendations to the Board
on the appointment of Directors and senior executilres and the
reappointment of Non€xe€utrve Directols on the expiry of their
threeyear term of appointment. Ihe Committee meets when
required.
Exer't/tive Cqnmitte - mponsible for the approval of acquisitions,
divestments, capital expenditure and contractual commitrnents
belcn/t/ the leuel vvhich the Board has reserved to rtsetf for deasion,
and for certain operational, administratile and other routine
matters. The Committee also regularly rwie!,\6 and reporb to
the Board on the performance of the Groups businesses. Ihe
Committee meeb at le6t six times each year
Directon' remuneration
lnformation about the Companyb remuneratton policy and
procedures and about the Directo6' remuneration is grven in
the Remuneration Report on pages 30 to 36.
Directors responsibilities
UK company law requires th€ Directors to prepare financial
statemenb for each linancial year which grve a true and fair vis /
oJ the state of affaiE of the Cbmpany an-d of the Group and of
the profh or loss of the Group for that period. ln preparing those
financial statemenE, the Dirccto6 are required to select suhable
accounting policies and then appt them consistently, to make
.iudgements and estimates that are reasonable and prudent
and to state whether applicable accountrng standarcls ha\€ been
followed, subject to any material departures disclosed and
explained in the financial statemenb. The DiEctors confirm that
they have complied with these requiremenb in preparing the
financial statements on pages 38 to 69.
The Directors are responsible for keeping poper accounting
recor* wtrich disdose, with reasonable accuracy at any time, the
financial positron of the Group and enable them to ensure that
the financial statemen$ comply wrth the Companies Act 1985.
They are also responsible for safeguarding th€ assets of the Group
and hence for taking reasonable steps for the praention and
detection of fraud and other inegularities.
Going concern
The Directors belieue, after maktng inquiries that they consider
to be appropriate, that the Group has adequate resources to
continue in operational existence for the foreseeable future. For
this reason, they continue to adopt the going concern basis in
preparing the financial statements.
lntemal control
Ihe Combined Code requires the Board to maintain a sound
q6tem oJ internal control, to revierrv rts effectircness, and to report
to shareholdeE that it has done so. This extends the prwious
requirement ccn€ring internal finarKial controls to those contol
policies and procedures relating to significant business, operational,
compliance and other rsls. Guidance on this section of the
Combined Code was published in September 1999 in /ntemal
Control: Guidance for Dr