Ryanair's Audit Committee Charter 2012
This charter provides the framework within which the Ryanair Holdings audit committee shall operate. It is periodically reviewed against best practice in the area of corporate governance and is amended as appropriate. The charter is approved by the Audit Committee on an annual basis.
The board of directors will nominate the chairman and the members of the audit committee. The committee will comprise of not less than three members who are all independent non-executive directors of the company. Appointments should be for a period of up to three years, extendable by no more than two additional three year periods (i.e. 9 consecutive years), so long as members continue to be independent. Each member shall be financially literate and have the skills and experience appropriate to the company's business. At least one member will be a financial expert with all of the following attributes:
A quorum of any meeting will be two members. The company secretary will be the secretary of the audit committee. The Chief Financial Officer will act as the secretary of the audit committee if the company secretary is not available.
The board authorises the audit committee, within the scope of its responsibilities, to:
Members of the audit committee should participate in every meeting of the committee (either in person or via telephone communications). Meetings shall be held not less than four times a year and should correspond with the company's financial reporting cycle. Special meetings may be convened as required (external auditors and internal auditors may request a meeting if they consider that one is necessary). At a minimum, the chairman of the committee (or another member of the committee) shall attend the board meeting at which the financial statements are approved.
Only committee members are entitled to attend meetings. The audit committee may invite such other persons (eg. the CEO, CFO, external audit engagement partner & internal auditor) to its meetings, as it deems necessary.
There will be at least one meeting a year, or part thereof, where the audit committee meets the external and internal auditors without executive board members present (this need not be the same meeting).
At the end of each audit, the audit committee and the external auditor will appraise:
During a reasonable period in advance of each meeting the secretary (or CFO if the company secretary is not available) shall circulate the agenda and supporting documentation to the audit committee members. The secretary (or CFO if the company secretary is not available) will also be responsible for distributing the minutes of meetings to the board, members of the committee (and the internal & external auditor where appropriate).
Each audit committee member must be a member of the company's board of directors. To be considered independent for the audit committee, members may not:
The audit committee is appointed by the board of directors to assist the board in discharging its oversight responsibilities. In performing its duties, the committee will maintain effective working relationships with the board of directors, management, the external and the internal auditor. The audit committee is responsible for reporting to the board of directors in respect of any key issues identified below.
The audit committee will oversee:
The audit committee will gain an understanding of the current areas of greatest financial risk and how these are being managed. They will oversee the financial reporting process to ensure the balance, transparency and integrity of published financial information, including guidance. They will review significant accounting and reporting issues, including recent professional and regulatory pronouncements, and understand their impact on financial reports.
The audit committee will meet with management and the external auditors to review the financial statements, the key accounting policies and judgements, and the results of the audit. They will ensure that significant adjustments, unadjusted differences, disagreements with management, critical accounting policies and any other significant issues affecting the quality of earnings, are discussed with the external auditor.
The committee will review the interim and annual financial statements, and preliminary announcements prior to their release. During this review the audit committee will focus particularly on:
The committee will review the clarity and responsiveness to all disclosure requirements and all other sections of the annual report before its release. They will ensure that the information is unbiased, understandable, and consistent with members' knowledge about the company and its operations.
The audit committee must consider the company's major financial risk exposures and the steps management has taken to monitor and control such exposures. The committee must review management policies with respect to risk assessment and risk management.
The audit committee must determine whether the financial statements have been prepared following appropriate accounting standards and that they give a true and fair view. They must then make a recommendation to the Board as to whether to approve the financial statements.
The audit committee will have an understanding of the controls and processes implemented by management to ensure that the financial statements derived from the underlying financial systems, comply with relevant standards and requirements, and are subject to appropriate management review.
The committee will evaluate whether management is setting the appropriate 'control culture' by communicating the importance of internal control and management of risk. They will consider whether management has implemented recommendations made by the internal and external auditors.
The audit committee will consider if the appropriate measures have been taken with regard to:
The audit committee will satisfy themselves that all appropriate regulatory compliance matters have been considered in the preparation of the financial statements. They will do this by reviewing the effectiveness of the system for monitoring compliance with laws and regulations and obtain regular updates from management and company's legal counsel regarding compliance matters that may have a material impact on the company's financial statements. The committee will also review the findings of any examinations by regulatory agencies.
The audit committee will approve all related party transactions. They will be directly responsible for developing guidelines and policies for reviewing and making informed decisions about related party transactions, with input from legal counsel as may be required. They will confirm that management has appropriate policies and practices in place covering management's identification and review of related party transactions.
The audit committee will assess the qualifications, independence and performance of the independent auditor and make recommendations to the board for the appointment, reappointment or termination of the appointment of the external auditor. The audit committee will approve all audit engagement fees and terms (the company shall provide appropriate funding for the compensation of the external auditors).
The audit committee will:
The audit committee will review and approve the appointment, replacement or dismissal of the internal auditor. They will review the proposed internal audit plan for the coming year and ensure that it addresses key areas of risk and ensure that there is appropriate co-ordination with the external auditor.
The audit committee will review the activities, resources and organisational structure of the internal audit function and ensure that there are no unjustified restrictions or limitations made. They will confirm that internal audit activities are being carried out in accordance with professional standards and good practice.