BBA Group Annual Report 2004 - BBA Aviation

DIRECTORS’ CORPORATE
GOVERNANCE REPORT
Role
The Nomination Committee meets as required. During 2004 the
Committee or its sub-committee met on five occasions and meetings
were attended by all Committee members. This was supplemented
with individual briefings and meetings as required. The principal role
of the Committee is to make recommendations to the Board on the
appointment of the Company’s executive and non-executive directors.
It is responsible for identifying and nominating candidates to fill Board
vacancies. In making appointments, the Committee evaluates the
balance of skills, knowledge and experience on the Board and in the
light of this evaluation considers the capabilities required for the role
and, in the case of a non-executive appointment, the time available to
fulfil the role. Use is made of independent recruitment consultants and
the final appointment rests with the full Board. More information on
the role of the Nomination Committee is set out in ‘Board
Appointments’ above.
Details regarding the Audit Committee are set out in paragraph
9(b) below.
9. Audit and Accountability
(a) Financial Reporting
Directors’ responsibilities for the preparation of
financial statements
The directors are required to prepare financial statements for each
financial year which give a true and fair view of the state of affairs of
the Company and the Group as at the end of the financial year and of
the profit or loss of the Group for that period.
After making enquiries, the directors have a reasonable
expectation that the Company and the Group have 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. In preparing the financial statements the
directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and estimates that are reasonable and prudent;
and
• state whether applicable accounting standards have been followed,
subject to any material departures disclosed and explained in the
financial statements.
The directors are responsible for keeping proper accounting
records which disclose with reasonable accuracy at any time the
financial position of the Company and the Group, and enable them to
ensure that the financial statements comply with the Companies Act
1985. They are also responsible for the system of internal control and
for safeguarding the assets of the Company and the Group, and hence
for taking reasonable steps for the prevention and detection of fraud
and other irregularities.
BBA GROUP
ANNUAL REPORT
2004
46
Going Concern
In compliance with corporate governance requirements, the directors
consider that after a critical review of the Group’s 2004 budget and
medium-term plans the Company and the Group have adequate
resources to continue in operational existence for the foreseeable
future. Accordingly, the financial statements have been prepared
on a going concern basis.
(b) Audit Committee
Composition
During 2004, the Audit Committee comprised the five independent
non-executive directors as follows: John Roques, Chairman,
Bob Phillips, Richard Stillwell, David Rough and Irv Yoskowitz (retired
1 March 2004).
The Chairman has relevant and recent financial experience and
a professional accountancy qualification as required by the Smith
Guidance. In addition the other Committee members all have
experience of corporate financial matters.
During 2004, the Audit Committee met on four occasions,
generally coinciding with key dates in the financial reporting and audit
cycle. There was full attendance by all the Committee members except
that Bob Phillips and David Rough were unable to attend one meeting.
The external auditors and Head of Group Internal Audit regularly
attend these meetings. The Chairman, Group Chief Executive, Group
Finance Director and Group Financial Controller also generally join at
least part of Audit Committee meetings by invitation. The Committee
Chairman may call a meeting at the request of any director or the
Company’s external auditors.
Role
The Committee may consider any matter that might have a financial
impact on the Group. However, its primary role is: first, reviewing the
scope and results of the external audit and the internal audit work
programme; and second, reviewing the annual and interim reports
before they are presented to the Board. In addition, the Committee
reviews the work of the Risk Committee as described and assesses
compliance with the directors’ responsibility statement. The Committee
also reviews the Group’s Disclosure of Unethical Conduct Policy
under which staff may, in confidence, raise concerns about possible
improprieties in matters of financial reporting or other matters.
The Committee is responsible for making recommendations to
the Board regarding the remuneration and appointment of its external
auditors. It is the policy of the Audit Committee to review such
appointment at least every five years. It discharges its responsibilities
through the review of written reports circulated in advance of meetings
and by discussing these reports and any other matters with the
relevant auditors and management. At least once a year the Audit
Committee holds a confidential session without management present
with each of the external auditors and the Head of Group Internal Audit.