Annual report 2010 - Imperial Tobacco Group

Corporate Governance Report continuedStrategy Performance Governance FinancialsThe Board confirms that an ongoing process for identifying,evaluating and managing the Group’s significant risks hasoperated throughout the year and up to the date of theapproval of this Annual Report and Accounts in accordancewith the requirements of the Code and Turnbull guidance.Measures are also being undertaken to review the contentsof, and the Group’s compliance with, the new UK CorporateGovernance Code which replaces the Combined Codeduring our 2011 financial year.3 Audit Committee and Auditors: How do weformally apply financial reporting and internalcontrol principles?Audit CommitteeMembersMr M D Williamson, CA (SA)(Chairman)Mr M H C HerlihyDr P H JungelsMr C F Knott, FCMA (to 17 July 2010)Mark WilliamsonChairmanMs S E MurrayMr M R Phillips (General Counsel& Company Secretary (from 1 October2010 Group Corporate and LegalAffairs Director), acts as Secretary tothe Committee)OverviewThe Audit Committee oversees our financial reporting andinternal controls and provides a formal reporting link withour Auditors.ResponsibilitiesThe responsibilities of the Audit Committee include:– approval of accounting policies;– reviewing financial statements and announcements;– overseeing the Group’s internal control processes;– appointment of Auditors and monitoring their performanceand independence; and– overseeing our public interest disclosure policy.StructureThe Audit Committee comprises four Independent Non-Executive Directors. In line with the Code and our AuditCommittee’s terms of reference, available on our websitewww.imperial-tobacco.com, it is a requirement that at leastone Committee member is a financial expert. Mr M DWilliamson is a qualified accountant and, therefore, meetsthis requirement.The Finance Director, the Director of Accounting, Forecasting& Tax, the Head of Group Compliance, the Deputy CompanySecretary and other financial managers are invited to attendeach meeting of the Committee. The Head of GroupCompliance meets formally with the Committee, without anyExecutive Director or other manager being present, at eachCommittee meeting.To provide a direct line of communication between ourAuditors and Non-Executive Directors, our Auditors attendeach Committee meeting and have the opportunity to meetCommittee members without any Executive Director or othermanager present.The performance of the Committee was evaluated as part ofthe Board performance evaluation process.How the Audit Committee Met its Responsibilities Duringthe YearDuring the year and up to the date of approval of this AnnualReport and Accounts, our Audit Committee achieved itsresponsibilities by working with a structured agenda ofmatters focused to coincide with key events of our financialreporting cycle, together with standing items that theCommittee is required to consider at each meeting. TheAudit Committee met its responsibilities by:– approving our accounting policies;– monitoring and reviewing the integrity of our financialstatements and any announcements or judgements theycontain including our Half Year Report and Annual Reportand Accounts and recommending that these be approvedby our Board;“In order to ensure theindependence and objectivityof our Auditors we maintainand regularly review ourAuditor Independence Policy.”Mark WilliamsonAudit Committee Chairman70