Audit Committees rules of procedure
1. Role and duties of the Audit Committee
The Audit Committee assists the Board of Directors by preparing matters falling within the competence of the Board. Thus, the Committee is not an autonomous decision making body, although it has several monitoring and oversight responsibilities.The Committee reports to the Board on the matters addressed and measures taken at least four times a year and makes proposals to the Board for decision making as appropriate.
The Audit Committee is responsible for:
• monitoring the statutory auditing and reporting process of the financial statements and consolidated financial statements as well as for overseeing the veracity of them,
• supervising the financial reporting process
• reviewing the efficiency of Stockmann´s internal control, internal audit and risk management systems and monitoring the Group's risks as well as the quality and and scope of risk management,
• approving the internal audit guidelines and reviewing the internal audit plans and reports
• reviewing the description of the main features of the internal control and risk management systems in relation to the financial reporting process, which is included in the company's Corporate Governance Statement,
• evaluating the independence and work of the statutory auditor and proposing a resolution on the election of the auditor and his fee,
• evaluating compliance with laws, regulations and company policies and monitoring significant litigations of Group companies, and
• executing any other duties bestowed upon it by the Board
2. Composition and term of the Audit Committee
At its first meeting following the Annual General Meeting, the Board of Directors elects three members to the Audit Committee from amongst its number and appoints one of them as Chairman of the Committee. The members are elected for a term of one year, concluding at the end of the Annual General Meeting following their election.
The Audit Committee is composed of at least three Board members who are independent of the company. In addition, at least one member must be independent of any major shareholders. The members must possess the competence required for the Committee's duties, and at least one member must possess expertise in accounting, bookkeeping or auditing, in particular.
The Audit Committee shall convene at least four (4) times a year. The Audit Committee is convened by the Chairman. A meeting of the Audit Committee has a quorum if the Chairman and at least one other member is present. The Group’s Chief Financial Officer (CFO) serves as the secretary of the meetings. The members of the company's Board of Directors and the Chief Executive Officer are entitled to attend meetings of the Committee.
The Audit Committee prepares an annual meeting schedule, including main issues on the agenda.
Normally, the meeting material is distributed three working days prior to a meeting . However, material concerning financial statements and interim reports shall be distributed at least 24 hours before a meeting.
Minutes of the Audit Committee's meetings are drawn up without delay and signed by the Chairman and the secretary. The Committee's meeting minutes are distributed to all members of the Board of Directors. In addition, the Committee Chairman reports separately to the Board on the key observations and measures taken by the Committee at least four times a year.
The Audit Committee shall meet with the auditors and internal auditors as well as other internal experts as appropriate. The Audit Committee may use external experts, if necessary.
4. Assessment of the Committee's work
The Audit Committee performs a self-assessment of its work once a year, and the results are reported to the Board of Directors by the Committee Chairman.