The Audit Committee consists of at least three board members who supervise corporate accounts, our own financial reporting and internal audit, financial risk management and the work of the external auditor.
Our audit committee members serve for two years, and the audit committee chair is appointed by the board of directors. The audit committee chair cannot also be the chairperson of the board of directors. We strive to keep the majority of people on the committee independent of Yara, and at least one independent member should also have auditing or accounting experience.
The current Audit Committee members are:
Trond Berger (chair)
Maria Moræus Hanssen
The full Audit Committee Charter is shown below:
The Audit Committee shall be a preparatory body related to the Board’s management and supervisory duties concerning external financial reporting, internal control systems related to financial reporting and external audit. These duties are further specified below.
The Audit Committee is appointed by, and reports to, the Board.
The Audit Committee supports the Board in the administration and execution of its supervisory responsibilities in accordance with:
(a) The current provisions of the Public Companies Act, Accounting Act and Norwegian Securities Act
(b) Prevailing standards for stock exchange listing on stock exchanges where the Company’s shares are listed
(c) Recommendations related to audit committees provided in the Norwegian Code of Corporate Governance.
On this basis the Audit Committee shall consider:
- The integrity of the Company’s external financial reporting.
- The Company’s procedures for financial reporting and control.
- The Company’s system for risk management to the extent this is necessary in order to consider the financial reporting consequences of the major risk exposures in the Company.
- The qualifications, independence and performance of the external auditor.
- Internal Audit Plans and audits conducted by Yara Internal Risk & Audit (YIRA) for areas that are defined to be within the area of financial reporting and control.
The Board appoints at least three of its own members to the Audit Committee and appoints one of those as Chairperson of the Audit Committee. The Audit Committee’s members are nominated for a period of two years.
A member of the Audit Committee shall not have any relations that, in the Board’s opinion, may affect his or her independence as a member of the Audit Committee.
When appointing members of the Audit Committee, the Board shall ensure that the nominee has the necessary knowledge about basic routines for financial and accounting operations, internal controls and accounting principles.
The Head of YIRA and the Chief Financial Officer (CFO) can, based on their own judgement, report issues directly to the Audit Committee.
The Head of YIRA is the Audit Committee Secretary.
- The Audit Committee shall meet at the time of the quarterly and yearly external financial reporting, or as often as the Audit Committee finds necessary.
- The Audit Committee decides which of the Company’s representatives attend its meetings. The Company’s CFO is expected to attend all Audit Committee meetings.
- External auditor attends the meetings in conjunction with relevant items on the agenda.
- Each regular meeting shall conclude with a special executive session for Audit Committee members only.
- The Audit Committee shall meet with each of the Company's CEO, CFO, Head of YIRA and external auditor at least once a year with no other than the Audit Committee present.
The responsibilities of the Audit Committee include the following:
4.1 Supervision of the integrity of the Company’s accounts, the process for financial reporting and the internal control related to financial reporting
The Audit Committee shall:
- Discuss the management control systems linked to risk factors in the Company and understand the consequences of the major risk exposures, on a general basis. Specifically assess the risks associated with financial reporting.
- At least once a year, together with management and external auditor, discuss (a) the Company's approach to and its requirements for external financial reporting, (b) the quality, sufficiency and efficiency of controls and procedures designed to ensure that all relevant financial information (including any material deficiencies) is reported by the company in a timely manner, and (c) the Company's internal controls related to financial reporting (including any material deficiencies).
- Together with management and external auditors, review (a) important accounting principles and practices applied by the company and (b) alternative accounting methods.
- Review the external auditor’s plans and scope for the audit and the results of the external auditor's audit of financial statements.
- Be consulted in advance of all stock exchange notices relating to financial reporting, including "profit warnings".
4.2 Supervision of the relation to the external auditor
The Audit Committee shall:
- Assist the Board in electing (by way of General Meeting) the external auditor for Yara International ASA.
- Assess and suggest to the Board external auditor fees for auditing Yara International ASA, which shall be decided at the General Meeting.
- Ensure that the external auditor does not perform services in a manner that is inconsistent with the role of external auditor. Review, together with the external auditor, the procedures for the external auditor’s provision of services other than auditing. At least once a year conduct a detailed review of the scope of the services actually supplied by the external auditor.
- Evaluate the external auditor’s qualifications, work performance and independence.
- Ensure that the external auditor complies with the requirements of rotating members of the audit team.
4.3 Handling of complaints, irregularities and concerns related to financial reporting and audit issues
The Audit Committee shall ensure that the Company has adequate procedures for receiving, storing and managing issues related to complaints, irregularities and concerns related to financial reporting, internal control over financial reporting and auditing. This includes procedures for confidential and anonymous submissions by Company employees regarding issues related to financial reporting and/or auditing. The Audit Committee shall be informed about all material issues.
4.4 Fraud and corruption
The Audit Committee shall be informed of and assess all cases of fraud and corruption involving employees of the Company.
Management represented by the Chief Compliance Officer shall, at least once a year, submit a list of registered cases with a description of the systems used to detect and handle such events. Management represented by the Chief Compliance Officer shall present serious cases to the Audit Committee on an individual basis without undue delay.
4.5 Supervision of internal audit
The Audit Committee shall:
- At least once a year evaluate the adequacy of the internal audit system in relation to internal control over external financial reporting.
- Regularly evaluate the performance of the work of the YIRA function related to areas within the mandate of the Audit Committee.
- Supervise the Management’s decisions regarding the Head of YIRA, including decisions related to employment, dismissal and remuneration.
4.6 Performance evaluation
- The Audit Committee shall assess its own performance annually.
- The Audit Committee will base its work on the assumption that the external auditor, the Head of YIRA and Management represented by the Chief Compliance Officer have informed the Audit Committee of any issues considered important for the Audit Committee in performance of its tasks as defined in this Mandate.
- The Audit Committee is entitled to inquire about all activities and matters related to the Company’s business which are necessary for the Audit Committee to fulfil this Mandate. The Audit Committee also has the right to demand access to information, facilities and personnel from the CEO.
- The Audit Committee can carry out any investigations considered necessary in order to perform its duties, and may employ the Company’s internal auditor, external auditor and external consultants in this regard.
Minutes of Audit Committee meetings shall be made available to all Board members as soon as possible, and no later than at the second subsequent board meeting.
The Chairperson of the Audit Committee shall report orally on the issues which have been assessed at the previous Audit Committee meeting, provided there is no complete protocol.
The Board may, at any time, require a more detailed oral or written report from the Audit Committee.
7. Limitation of the role of the Audit Committee
The Audit Committee is responsible only to the Board in connection with the execution of its duties. The Board has the complete and sole responsibility for the duties of the Audit Committee.
The CEO is responsible for preparing and presenting the Company’s external financial annual and quarterly reports to the Board. The external auditor is responsible for auditing and reviewing annual reports. On request from the Board, the external auditor will perform a limited audit of the Company’s quarterly financial statements. When performing its duties, the Audit Committee does not give any expert opinions concerning the Company’s accounts, nor does the Audit Committee provide any professional approval of the external auditor’s work to anyone but the Board.
The Audit Committee shall not consider:
- Risk factors or processes related to non-financial areas. YIRA’s work regarding processes related to non-financial factors.
- Compliance with laws and regulations and ethical issues other than those referred to in §§ 4.3 and 4.4 above. These areas are under other supervisory functions and are reported directly to the Board, rather than to the Audit Committee.
However, the Audit Committee shall be informed of and consider potential financial reporting consequences of such risk factors and issues.