Safeguard integrity in financial reporting
Board committees
The Board has established two committees to assist in the execution of its duties and to allow detailed consideration of complex issues. Current committees of the Board are the Remuneration and Audit committees. Each is comprised entirely of non-executive directors.
Committee charters have been written setting out for each committee its role and responsibilities, composition, structure, membership requirements and the manner in which the committee is to operate. These charters will be available on the Company's website. Matters determined by committees are submitted to the full board as recommendations for board decision unless the Board has delegated the authority for a decision to the appropriate committee. Minutes of committee meetings are tabled at subsequent Board meetings.
Audit committee
The non-executive directors on the committee are:
- Mr Kenneth Gross (Chairman)
- Mr Paul Freiman
Details of the qualification, expertise, experience and attendance of directors at Audit Committee meetings are set out in the Directors' report in the 2005 Annual Report. The Chairman is not an independent director. The members have been selected because of the particular skills and experience they contribute to the committee. The Chief Operating Officer (COO), Chief Financial Officer (CFO) and Auditor attend Audit Committee meetings as required throughout the year. Time is allocated for the Audit Committee to meet with the Auditor in the absence of management. The responsibilities of the Audit Committee are to:
| (a) |
assist the Board to discharge fiduciary responsibilities with regard to SciGen's accounting, control and reporting practices by monitoring the internal control environment and management over corporate assets;
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| (b) |
review internal controls and any changes thereto approved and submitted by SciGen's Chief Financial Officer;
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| (c) |
provide assurance regarding the quality and reliability of financial information used by the Board to enable the Board to maintain confidence in the financial reports;
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| (d) |
oversee the activities of the external audit staff of SciGen and to review SciGen's risk management policies and internal control processes; |
| (e) |
review and recommend to the Board the adoption of SciGen's annual financial statements; and |
| (f) |
liaise with and review the performance of the external auditor, who may be invited to attend Audit Committee meetings to discuss financial matters and business risk. |
Corporate reporting
The CEO and CFO have made the following certifications in writing to the Board:
- that the company's financial reports are complete and present a true and fair view, in all material respects, of the financial condition and operational results of the company and Group and are in accordance with relevant accounting standards.
- that the above statements are founded on a sound system of risk management and internal compliance and control and which implement the policies adopted and that the company's risk management and internal compliance and control are operating efficiently and effectively in all material aspects.
External auditors
The company and audit committee policy is to appoint external auditors who clearly demonstrate quality and independence. The performance of the external auditor is reviewed annually, taking into consideration assessment of performance and existing value.
PricewaterhouseCoopers were appointed as the external auditors in 2 August 1999. It is the policy of PricewaterhouseCoopers to rotate audit engagement partners on listed companies at least every seven years and under CLERP 9, this will become every five years.
An analysis of fees paid to the external auditors, including a breakdown of fees for non-audit services, is provided in note 21 to the financial statements of the 2005 Annual Report. It is the policy of the external auditors to provide an annual declaration of their independence to the audit committee.
Risk assessment and management
The Board is responsible for ensuring that there are adequate policies in relation to risk oversight and management, and internal control systems.
In summary, the company policies are designed to ensure strategic, operational, legal, reputational and financial risks are identified, assessed, addressed and monitored to enable achievement of the Group's business objectives.
Considerable importance is placed on maintaining a strong control environment. The organisational structure has clear lines of accountability and delegation of authority. Adherence to the code of conduct is required at all times and the Board actively promotes a culture of quality and integrity.
Remuneration committee
The remuneration committee consists of the following non-executive directors:
- Mr Paul Freiman (Chairman)
Details of the qualification, expertise, experience and attendance of directors at Audit Committee meetings are set out in the Directors' report in the 2005 Annual Report. The remuneration committee advises the Board on remuneration policies and practices generally, and makes specific recommendations on remuneration packages and other terms of employment for executive and non-executive directors. Further information on directors' remuneration is set out in the directors' report of the 2005 Annual Report.
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