Charter of the Audit and Governance Committee of Draka Holding N.V.
Article 1. Responsibilities
1.1 The Audit and Governance Committee advises the Supervisory Board in relation
to its responsibilities and shall prepare resolutions by the Supervisory Board.
The Supervisory Board may delegate its authority to take decisions in relation
to
the activities listed below to the Audit and Governance Committee. However,
the
Supervisory Board remains responsible for all actions by the Audit and
Governance Committee.
Article 2. Activities of the Audit and Governance Committee
2.1 The Activities of the Audit and Governance Committee shall include:
- Supervising the publication of financial information (annual financial
statements, quarterly statements (including all press releases containing
financial information) by the Company. Specifically, the choice of or changes in
accounting policies, application and assessment of the effects of new
legislation in this area, information on the treatment of estimated entries in
the financial statements, forecasts, financial exposures, fraud, development of
financial ratio’s, changes in the Company’s ratings etc.;
- Review of other relevant reports or financial and non-financial information
(including the Company’s disclosures in its Annual Report) to be submitted by
the Company, to any governmental body, or made public, and relevant reports
rendered by the External Auditor (or summaries thereof).
- Review of procedures, structures and controls in place to ensure that
accounting books, records and accounts accurately and fairly reflect, in
reasonable detail, transactions and dispositions of assets of the Company;
- Supervising, monitoring, and advising the Board of Management on the inherent
risks embedded in the companies strategy and/or activities, the effect of
internal risk management and control systems, including supervision of the
enforcement of the relevant legislation and regulations, and supervising the
effect of codes of conduct;
- Reviewing the External Auditor’s certificate and report on Board of
Management’s internal control report;
- Supervising compliance with recommendations and observations by the Internal
and External Auditors;
- Supervising the functioning of the Internal Audit Department; in particular
co-determining the plan of action for the Internal Audit Department and taking
note of the findings and considerations of the Internal Audit Department;
- Supervising the policy and the execution thereof by the Company in the area
of tax planning;
- Supervising the proper financing of the Company;
- Supervising the proper application and adequate status of information and
communication technology (ICT);
- Maintaining frequent contact and supervising the relationship with the
External Auditor, including in particular (i) assessing the External Auditor's
independence and anticipated fees, (ii) determining the involvement of the
External Auditor in respect of the contents and publication of financial
reporting by the Company other than the Annual Accounts, (iii) taking note of
irregularities in respect of the content of the financial reporting as may be
reported by the External Auditor, (iv) ensuring that the External Auditor shall
annually submit to the Audit and Governance Committee a formal written statement
describing all relationships between the External Auditor and the Company, (v)
taking (or recommending that the Supervisory Board takes) appropriate action to
secure the independence of the External Auditor, and (vi) resolving
disagreements between management and the External Auditor regarding financial
reporting;
- Actively engaging in a dialogue with the External Auditor with respect to any
disclosed relationships or services that may impact the External Auditor’s
independence or objectivity;
- Reviewing and pre-approving all audit and non-audit services to be provided
by the External Auditor, as well as the proportion between audit and non-audit
services;
- Recommending to the Supervisory Board the (re)appointment of an External
Auditor by the Company’s General Meeting of Shareholders.
- In consultation with the External Auditor, reviewing the integrity of the
Company and Company employees regarding questionable accounting or auditing
matters.
- Reviewing and discussing twice a year Compliance reports and seeking
clarifications and explanations in ensuring compliance and reports by internal
and external auditors disclosure controls and procedures (both internal and
external);
- Establishing and maintaining procedures for the receipt, retention, and
treatment of complaints regarding accounting, internal accounting controls, or
auditing matters;
- Establishing and maintaining procedures for the confidential, anonymous
submission
- Reviewing and evaluating twice a year the Company’s Corporate Governance in
general, monitoring compliance in relation to Draka’s Code of Conduct and
whistle-blowing policy and recommending improvements to the Supervisory Board
and/or Board of Management if necessary.
The Audit and Governance Committee reports its findings to the Supervisory Board
before the related documents are approved by the Supervisory Board and released
for publication by the Company.
2.2 The External Auditor is initially responsible to the Audit and Governance
Committee
and ultimately to the Supervisory Board. The Audit and Governance
Committee
specific tasks in this respect are:
-
At least once a year, shall the Audit and Governance Committee, shall,
together with the Board of Management, report to the Supervisory Board on the
developments concerning the relationship with the External Auditor, in
particular its independence under applicable law. The report shall address,
inter alia, the desirability of rotation of partners within a firm of external
auditors which is responsible for the Company's audit, and the desirability of
any non-auditing work for the company by the External Auditor. The selection and
recommendation of the External Auditor will also depend on the outcome of this
report.
-
At least every four years, the Audit and Governance Committee, in close
cooperation with the Board of Management, shall thoroughly assess the
functioning of the External Auditor in the various qualities and roles in which
the External Auditor operates. The main conclusions of such assessment shall be
notified to the SB, and subsequently to the General Meeting of Shareholders, for
the purpose of considering the (recommendation for the (re)appointment of)
External Auditor of the Company.
-
The External Auditor shall receive all the relevant financial information
underlying the adoption of the quarterly or half yearly accounts and other
interim financial reports and shall be given the opportunity to respond to such
information.
2.4 The Audit and Governance Committee shall distribute the approved minutes of
its
meetings to all members of the Supervisory Board to inform them of the Audit
and Governance Committee’s deliberations, findings, conclusions and proposals.
2.5 The Audit and Governance Committee shall determine appropriate compensation
for payment of (i) the External Auditor for all audit and related services, (ii)
any
advisors employed by the Audit and Governance Committee, and (iii) ordinary
administrative expenses incurred by the Audit and Governance Committee that
are
necessary or appropriate in carrying out its duties.
Article 3. Composition, expertise and independence of the Audit and Governance
Committee
3.1 The Audit and Governance Committee shall consist of at least three members.
The members of the Audit and Governance Committee shall be designated by
the
Supervisory Board from among its members.
3.2 The following requirements must be observed in composing the Audit and
Governance Committee:
-
at least one of its members must have relevant expertise in financial
administration and accounting for listed companies or other large companies;
-
the majority of the members must be independent within the context of the
Supervisory Board’s Charter;
-
neither the Chairman of the Supervisory Board
nor any of the Company's (current and former) members of the Board of
Management, may be Chairman of the Audit and Governance Committee.
3.3 The Audit and Governance Committee has the right, after having informed the
Chairman of the Supervisory Board and the CEO, to obtain advice and assistance
from outside advisors at the expense of the Company as deemed appropriate to
perform its duties and activities. Such experts will be held to keep absolute
secrecy
on the topics upon which they provide advice.
Article 4. Chairman
4.1 The Supervisory Board appoints one of the Audit and Governance Committee
members as Chairman. The Chairman shall be primarily responsible for the
proper
functioning of the Audit and Governance Committee. He/she shall act
as the
spokesman of the Audit and Governance Committee and shall be the
main contact
for the Supervisory Board and/or the Board of Management on
audit and/or
Governance matters.
Article 5. Audit and Governance Committee meetings (agenda, attendance, minutes)
5.1 The Audit and Governance Committee will hold at least four meetings per year
in
accordance with an annual schedule. Other meetings may be convened by the
Chairman of the Audit and Governance Committee, any of its other members or
the
Board of Management. Audit and Governance Committee meetings are
generally held
at the offices of the Company, but may also take place elsewhere.
5.2 The meetings of the Audit and Governance Committee shall typically be
attended
by the Company’s CFO, the Internal Auditor and/or the External Auditor.
The CEO has a standing invitation to attend the meetings.
5.3 Audit and Governance Committee meetings shall be convened by the CFO of the
Company on behalf of the Chairman of the Audit and Governance Committee, or
on
behalf of any other person as spelled out in article 5.1 requesting a meeting.
Where this is practically possible, notices convening a meeting and the agenda
of items to be considered will be sent at least seven days before such
meeting
to each member of the Audit and Governance Committee.
5.4 Minutes of the meetings shall be prepared by the Committee Secretary. These
minutes shall generally be adopted in the next meeting of the Audit and
Governance
Committee. The approved minutes shall be signed by the Chairman of
the Audit and
Governance Committee and the Company’s CFO and shall be
distributed in their final
form to all members of the Supervisory Board as soon
as practically possible.
5.5 Immediately following each Audit and Governance Committee meeting, its
Chairman
will report about such meeting to the Members of the Supervisory Board
and Board
of Management of the Company.
Article 6. Amendments
6.1 The Audit and Governance Committee shall evaluate this Charter annually to
identify
any specific aspects in respect of which amendments to this Charter
and/or further
regulations are required.
6.2 This Charter can only be amended by a resolution of the Supervisory Board to
that
effect. Any amendment shall be laid down in writing.
This Charter was last amended and approved by the Supervisory Board on 13
November 2006
