Annual Report - SABMiller India

5.6 The corporate accountability andrisk assurance committee (CARAC)Lord Fellowes chaired the committee throughout the year.Mr Kahn, Mr Mackay, Mr Manser, Mr Manzoni, Mr Ramaphosaand Mr Wyman served as members. Additionally, the Directorof Corporate Affairs, Ms Clark, met regularly with the chairmanof CARAC to discuss implementation and planning issues, andattended all meetings of the committee.The objective of CARAC is to assist the board in the discharge ofits responsibilities in relation to corporate accountability, includingsustainable development, corporate social responsibility, corporatesocial investment and ethical commercial behaviour. More detailsof the committee’s activities can be found in the sustainabledevelopment review section of this report and in the company’sseparate Sustainable Development Report which is availableon the company’s website and, upon request, in hard copy.During the year, the CARAC focused on company-specific andindustry issues which are critical to protecting the company’slicence to operate.6.Relationship with auditorsPricewaterhouseCoopers were appointed as auditors of thecompany on 8 February 1999, subsequently becomingPricewaterhouseCoopers LLP (PwC) in 2003.The company has in place a formal policy on auditorindependence and non-audit services, with which the externalauditors are required to comply, to ensure that the independenceof the auditors is not impaired by the nature of non-audit work.The policy stipulates work which is permitted or not permittedto be performed by the auditors, and provides for appropriateapproval and oversight processes. As a further safeguard, PwCconfirms in a formal report to the audit committee that processesto ensure compliance with this policy are in place and that theseprocesses are monitored regularly. This report includes astatement that, in its opinion, PwC believes that the nature ofits non-audit services has not impaired the audit of the company.Note 3 to the consolidated financial statements has a breakdownof non-audit services provided to the group by the auditors forthe year under review.The audit committee is satisfied that, for the period under review,the independence of the auditors has not been affected by theprovision of non-audit services.The committee has also implemented a formal system for thereview of the effectiveness of the external auditors. This processinvolves the external auditors presenting to the committee theirproposed audit strategy followed by the output of their initialdiscussions with management. At the audit committee meetingin May, the external auditors present the output of their detailedyear-end work. In making its assessment of external auditoreffectiveness, the committee reviews the audit engagement lettersbefore signature by management, reviews the external auditors’summary of group and subsidiary issues and management’sresponse to the summary, and conducts an overall review ofthe effectiveness of the external audit process and the externalauditors. This review is facilitated by the use of templates thatrate effectiveness across 18 critical criteria.7.Relations with shareholdersDuring the year the company has continued to promote dialoguewith its major institutional shareholders. All shareholders wereagain encouraged to attend the annual general meeting, whichprovides shareholders with the opportunity to ask questionsof the board and chairmen of all the board committees. Allresolutions were put to a poll at the annual general meeting in2007. Voting at the meeting was conducted electronically, withthe results being published on the Regulatory News Service andon the company’s website.Alongside the facilities offered by the Company Secretary’sdepartment, the company maintains a dedicated investor relationsfunction which reports to the Director of Corporate Affairs. Theinvestor relations team builds and maintains long-term relationshipswith institutional investors and analysts and, in partnership with ourcorporate and divisional management teams and within the scopeof regulatory constraints, gives presentations on regional businessoutlooks and strives to ensure that these are understood acrossthe global equity markets in subsequent one-to-one meetingswith investors. Occasional business site visits are also arranged.Dialogue on socially responsible investment is handled bythe Head of Sustainable Development in the corporate affairsdepartment, who undertakes focused briefings with interestedinvestors and stakeholders.In addition to scheduled management-led programmes in whichexecutives interact with investors and analysts, the Chairman has,independently, initiated formal contact with all shareholders (ortheir representatives) holding more than 1% of the issued sharecapital of the company. The purpose of this contact is to enablethe Chairman to address any queries shareholders may haveregarding the governance of the company or non-operationalaspects of company strategy. It is also, more broadly, designedto give the board a greater awareness of shareholder concerns.Alongside the Chairman, the Senior Independent Director is alsoavailable to discuss issues with shareholders and views expressedwill be communicated by the Chairman to the board. As partof this initiative, the Chairman offers to meet with significantshareholders in the month before the annual general meetingspecifically to deal with issues arising from the annual reportand notice of the annual general meeting. All non-executivedirectors of the company are invited to participate in this process.Comment on the annual report is conveyed through the auditand remuneration committees and the Company Secretaryto the board.8.Risk managementThe group’s risk management system is subject to regular reviewto ensure full compliance with the requirements of the CombinedCode and the Turnbull Guidance (2005) on internal control andrisk management and is designed to deliver improved value tothe operating businesses.8.1 Risk and the board of directorsThe directors are ultimately responsible for the group’s riskmanagement system and for reviewing its effectiveness. The riskmanagement system is designed to manage, rather than eliminate,the risk of failure to achieve business objectives and there is anongoing process in place for identifying, assessing, managing,monitoring and reporting on the significant risks faced by individualgroup companies and by the group as a whole. This process hasbeen in place for the year under review up to and including thedate of approval of the annual report and accounts. The principalrisks and uncertainties facing the group are set out on page 8.Overview Operating and financial review Governance Financial statements Shareholder informationCorporate governance 39SABMiller plc Annual Report 2008