The audit committee supports the Supervisory Board in the execution of its supervisory tasks and in the preparation of decision-making in the fields of financial reporting, risk management and internal controls.
The audit committee consists of the financial expert and at least one other member of the Supervisory Board. Since the appointment of the new Supervisory Board members at the General Meeting of Shareholders of April 2018, this committee has consisted of Mr. Van de Weerdhof (member) and Ms. Jansen Heijtmajer (chair). For the sake of continuity, the membership of Mr. Ernsting was extended for the duration of the preparation of the financial statements for the 2018 financial year. As of July 2018, both the internal and external auditors were added as permanent participants in the audit committee meetings.
The Audit committee met five times in 2018 (2017: five times). All members were present at four of the meetings. Mr. Van de Weerdhof was absent at one of the meetings.
The audit committee executes preparatory tasks relating to the:
- Integrity and quality of the financial reporting and effectiveness of the internal risk management control systems of the company;
- Assessment of budget and financial prognoses;
- Financing of the company and compliance with relevant covenants;
- Relationship with the internal auditor and external auditor (including the independence of the external auditor) and the timely compliance with recommendations and follow-up to comments;
- Recommendation of candidates for the appointment of the internal auditor;
- Annual evaluation of the internal audit function;
- Advice on the nomination for appointment or reappointment or contract termination of the external auditor and preparations for the selection of the external auditor;
- Proposals for the commissioning of the audit of the financial statements by the external auditor;
- Annual discussion of the draft audit plan with the external accountant;
- Discussion In control statement and auditor’s report;
- Coordination of and advice on the internal audit plan;
- Application of and compliance with legislation and regulations.
The chair of the audit committee is the first point of contact for the external auditor should the latter find irregularities in the financial reporting of the company.
Fixed items on the agenda are related to:
- Company performance and financial results;
- Internal audit findings and follow-up of same;
- Findings and follow-up of external audits, and
- Effects, preparations and progress in the implementation of new legislation and regulations.
Other topics of discussion in 2018 included the performance in North America, the structuring and further professionalisation of the risk management and internal control framework, the optimisation of the operational model in the context of the refined strategy and the roll-out of the Code of Conduct.
The committee devoted specific attention to the selection of the new CFO, the valuation models for, among other things, the acquisition of Velosophy, the textual formulation on the calculation of the financing covenants in the annual report; the cost developments, including the anticipated progress on cost savings and the monitoring of same with the aid of a tracker methodology, particularly on the supply chain front.