Intermediate Capital Group plc
Juxon House
100 St Paul’s Churchyard
London EC4M 8BU
From
Audit Committee
To
ICG employees
CC
Philip Keller
T +44 (0)20 3201 7700
F +44 (0)20 7248 2536
icgplc.com
Subject Policy for non audit services provided by the Company’s external auditors
Date
16 September 2014
Memorandum
1. Overview
ICG plc (ICG) seeks only to use its external auditor to provide non audit services in circumstances
where those services do not impair the auditor’s independence or objectivity, both in fact and
appearance.
The Company’s external auditor is not independent if it, directly or indirectly, maintains a financial,
employment or business relationship with ICG or provides services which:
i.
Create a mutual interest
ii.
Place the auditor in a position of auditing their own work
iii.
Result in the auditor acting as an ICG manager or employee, or
iv.
Place the auditor in a position of advocate for ICG
In addition, EU audit legislation introduces certain restrictions on the provision of non audit services
including a 70% non audit fees services cap. The restrictions on non audit services will become
effective two years from the date of entry into force of the regulation; as such, it is expected to be in
force for the 2016 financial year. The Company will not engage the external auditors for any
engagement that is likely to extend beyond the commencement of the new regulations.
This policy is reviewed and updated on a regular basis to ensure it complies with the latest regulations
on auditor independence and the provision of non audit services. The latest policy was approved by
the Audit Committee on 15 September 2014.
2. Permitted audit and audit related services
The Company’s external auditor is permitted to provide the following audit related services.
Audit related services are assurance services or other work traditionally provided by external
auditors in their role as external auditors.
i.
Audit of Group and subsidiary financial statements
Registered in England No. 6015791 Authorised and regulated by the Financial Conduct Authority.
ii.
Review of half yearly reports
iii.
Review of year end covenant certificates
iv.
Issuance of comfort letters in their capacity as auditors
v.
Services relating to equity or debt offering circulars
vi.
Consultation regarding accounting policies, including the impact of new accounting
pronouncements and accounting for unusual or one off transactions
The external auditor can be appointed to perform these audits and audit related services without the
need for a separate tender process for each engagement.
3. Permitted non audit services
In the absence of any apparent threat to the objectivity and independence of the external auditors, the
following non audit services may be provided by the external auditor:
i.
Tax compliance: Preparation and/or review of tax returns. Consultation regarding appropriate
treatment of items for tax returns, required disclosures, elections and filing positions available
to the company
ii.
Tax consulting: Responding to requests regarding technical interpretations, applicable laws
and regulations, and tax accounting. Tax advice of corporate transactions and assistance
with tax audits and examinations
The Committee is aware of the ongoing debate about the provision of tax services by the external
auditors. This policy will be updated should tax services no longer be permitted to be provided by the
external auditors.
Any non audit services undertaken by the external auditor, in addition to those outlined above, and /or
in excess of £50,000, needs specific and prior approval by both the Chief Financial Officer and the
Audit Committee. The Audit Committee has delegated this responsibility to the Chairman of the
Committee. In all cases the provision of non audit services must not impair the auditor’s independence
or objectivity, both in fact and appearance.
4. Prohibited services
The following non audit services have been identified as presenting a high risk of conflict and likely
impairing the independence and objectivity of the external auditors. Consequently, these services are
(unless it can be clearly shown that no threat to auditor independence is created by the auditor
undertaking such activity and, indeed, it is in the best interests of the Group for such work to be
undertaken by the external auditor) specifically prohibited from being contracted to the external
auditor:
i.
Bookkeeping or other services related to the accounting records or financial statements
ii.
Internal audit services
iii.
Financial information systems design and implementation
iv.
Actuarial services
v.
Management functions
vi.
Valuation services
vii.
Legal services
viii.
Any other service that the Audit Committee determines by regulation is not permissible or
creates a mutuality of interest that could compromise the independence and objectivity of the
external auditor
For further clarification on prohibited services the Chief Financial Officer should be contacted.
5. Monitoring
The Audit Committee will receive a report at each of its meetings analysing fees paid for non audit
services provided by the external auditor.
Each year the Audit Committee will formally review auditor independence as required by its terms of
reference, document its position on this matter and address any changes to this policy as necessary.
The Annual Report & Accounts will disclose the results of this assessment, together with details of the
audit and non audit fees paid to its external auditors during the reporting period.