The Audit Committee oversees the adequacy and effectiveness of the company’s accounting and financial policies and controls. The key aspects of the terms of reference followed by our Audit Committee are set out in this report. The Audit Committee meets at least quarterly in a separate executive session with the External and Internal Auditor.

Currently, the members of the Audit Committee are Mr Anderson (Chairman), Mr Harrison and Mrs Walter. Mr Hammes was a member until 31 January 2008 when he was appointed Chairman of the Joint and Supervisory Boards and Mr Loudon was a member until his retirement as a director, effective 22 August 2008. 

All members of the Audit Committee must be financially literate and must have sufficient business, industry and financial expertise to act effectively as members of the Audit Committee. At least one member of the Audit Committee shall be an “audit committee financial expert” as determined by the Nominating and Governance Committee and the Supervisory Board in accordance with the SEC rules. These may be the same person. The Nominating and Governance Committee and the Supervisory Board have determined that Messrs Anderson and Harrison are “audit committee financial experts”. 

Under the NYSE listing standards that apply to US companies, if a member of an audit committee simultaneously serves on the audit committees of more than three public companies, the listed company’s board must determine that such simultaneous service will not impair the ability of this member to effectively serve on the listed company’s audit committee. Although the company is not bound by this provision, it follows it voluntarily. Mr Anderson serves on the audit committees of three public companies in addition to our Audit Committee. The Supervisory Board has determined that such simultaneous service does not impair his ability to effectively serve on our Audit Committee.

The Audit Committee provides advice and assistance to the Supervisory Board in fulfilling its responsibilities and, amongst other matters:

• overseeing the company’s financial reporting process and reports on the results of its activities to the Supervisory Board;
• reviewing with management and the External Auditor the company’s annual and quarterly financial statements and reports to shareholders;
• discussing earnings releases as well as information and earnings guidance provided to analysts;
• reviewing and assessing the company’s risk management policies and procedures;
• having general oversight of the appointment and provision of all external audit services to the company and the company’s internal audit function;
• reviewing the adequacy and effectiveness of the company’s internal compliance and control procedures;
• reviewing the company’s compliance with legal and regulatory requirements; and
• establishing procedures for complaints regarding accounting, internal accounting controls and auditing matters, including any complaints from whistleblowers.

Conflicts of interest
The Audit Committee oversees the company’s Code of Business Conduct and Ethics policy and other business-related conflict of interest issues as they arise.

Reporting
The Audit Committee will inform the Supervisory Board of any general issues that arise with respect to the quality or integrity of the company’s financial statements, the company’s compliance with legal or regulatory requirements, the company’s risk management systems, the performance and independence of the External Auditor, or the performance of the internal audit function.

Charter
View the Audit Committee Charter (revised February 2008) (PDF, 65K).