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. In 2019, this committee consisted of Ms. Jansen Heijtmajer (chair) and Mr. Van de Weerdhof (member). The chair of the Audit Committee is the first point of contact for the external auditor should the latter find any irregularities in the company’s financial reporting.
In 2019, the Audit Committee met five times (2018: five times) and all members were present at said meetings. All the meetings of the committee were also attended by the CFO, the Group Finance Director and the internal and external auditors.
The chair of the Committee had regular contact with the CFO to discuss focus items such as the financial performance, the divestment of the North American operations, the progress on IT implementation and other business risks and matters. Similarly, the chair was in regular contact with the head of internal audit to discuss any issues and audit findings. The Committee shared its main deliberations and findings in the Supervisory Board meeting following the audit committee meeting.
In the year under review, the audit committee executed the regular preparatory tasks and responsibilities, which were recurring items in most of the committee meetings, and were related to the:
- Company’s financial performance and progress on budget and financial forecasts;
- Integrity and quality of the financial reporting;
- Effectiveness of the internal risk management control systems and its embedding in the Company;
- Discussion of the financial statements, the “in control statement” and the external auditor’s report on 2018;
- Compliance with relevant bank covenants;
- Relationship with the internal auditor and external auditor, including the independence of the external auditor, as well as the progress on follow-up actions related to key audit findings and other recommendations in the management letter and in internal audit reports;
- Review and approval of the 2019 audit plan and related fee proposal as presented by the external auditor, as well as the effectiveness of the external audit process in 2018;
- Advice on the nomination for the reappointment of the external auditor;
- Annual evaluation of the internal audit function;
- Coordination of and advice on the internal audit plan;
- Assessment of 2020 budget;
- Effects of and preparations and progress in the alignment with new legislation and regulations;
- The 2019 annual report and financial statements, as well as the “in control statement” and the external auditor’s report were discussed in the Audit Committee meeting held on 4 March 2020.
In 2019, the Audit Committee also discussed the embedding of the risk management and internal control framework implemented in 2018, as well as the status of action programmes on a number of prioritised risks. These were recurring items in all of the committee’s meetings. Other specific topics of discussion in 2019 included the development of working capital, as well as costs, the implementation and operation of the new ERP system, and items related to the tax control framework.
The Committee spend specific time and attention to the liquidation and de-consolidation of the company’s North American operations and the impact of this divestment on the company’s balance sheet, the recruitment of a new internal auditor, the recruitment of a new IT director and the overall professionalisation of the finance and IT functions in the context of the refined strategy. The Committee is pleased to note that progress was made and these matters were substantially completed. The Committee also devoted specific attention to cyber security, also in view of the General Data Protection Regulation.