Audit Committee report.

Composition

The Audit Committee comprises the following independent non-executive Directors:

Name Audit Committee position
John Sheldrick Chairman
Tufan Erginbilgic Member (from 9 May 2011)
Shonaid Jemmett-Page Member
Richard Parry-Jones Member
Michael Turner Member

The secretary to the Committee is Judith Felton, Company Secretary.

The Committee’s members have, in the Board’s view, recent and relevant financial experience as required by the UK Corporate Governance Code. In particular, John Sheldrick, the Committee Chairman, was Group Finance Director of Johnson Matthey plc from 1995 until his retirement in September 2009 and has chaired GKN’s Audit Committee since 2004; and Shonaid Jemmett-Page has held a number of senior finance roles in Unilever, is a former partner at KPMG and is currently Chief Operating Officer at CDC Group plc.

Role

The primary role of the Audit Committee, which reports its findings to the Board, is to ensure the integrity of the financial reporting and audit processes and the maintenance of sound internal control and risk management systems. The Committee is responsible for monitoring and reviewing:

Written terms of reference that outline the Committee’s authority and responsibility are available on our website at www.gkn.com. The terms were considered as part of the Board’s performance evaluation review as described in the corporate governance statement.

Advice provided to the Committee

In the performance of its duties, the Committee has independent access to the services of Corporate Audit and to the external auditors, and may obtain outside professional advice as necessary. During 2011 no member of the Committee, nor the Committee collectively, sought such outside professional advice beyond that which was provided directly to the Committee by the external auditors. Both the Head of Corporate Audit and the external auditors have direct access to the Chairman of the Committee outside formal Committee meetings.

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