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POLB(10)02
POST OFFICE LIMITED
POST OFFICE LIMITED BOARD
MATTERS RESERVED TO THE POST OFFICE LIMITED BOARD AND
. THE TERMS OF REFERENCE FOR ITS COMMITTEES
Annex A provides a summary of matters reserved to the Post Office Limited Board.
This is very similar to the paper approved by the Board on October 27" 2007.
Annex B and C are the proposed Terms of Reference for the Post Office Limited
i) Audit Committee;
ii) Remuneration Committee.
The Board is invited to approve the matters set out in Annexes A, B and C.
Susan Crichton
November 2010
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ANNEX A
POST OFFICE LIMITED
MATTERS RESERVED TO THE BOARD
STATUTORY REQUIREMENTS
Approval of half year and full year accounts
Approval of financial forecasts to the DTI
Approval of aiiy significant change in accounting policies or practices on the
recommendation of the Audit Committee
Appointment and removal of Directors and Company Secretary
Appointment or removal of auditors on the recommendation of the Audit Committee
MANAGEMENT
Approval of major capital projects (of between £3m - £10m)
Approval of material contracts of the company in the ordinary course of business (the
acquisition and disposal of assets of up to £10m)
Approval of contracts of the company not in the ordinary course of business (including all
strategic acquisitions or joint ventures where the transaction total is up to £10m)
Approval of major investments, including the acquisition or disposal of interests of more
than 5% in the voting shares of any company or the making. of any takeover bid
Approval of risk management strategy including internal control arrangements
Subject to the agreement of the Royal Mail Holdings Board where appropriate, approval of:
the Company's commercial strategy
the Company's strategic plan and annual operating plan
plans for senior management development and succession
changes to the management and control structure
overall pay policy for staff and agents
health and safety policy
environmental policy
equal opportunities policy
MISCELLANEOUS
Appointment of specified individuals to authenticate the Post Office Limited seal
Adoption of a new company seal
Role
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ANNEX B
POST OFFICE LIMITED
AUDIT COMMITTEE - TERMS OF REFERENCE
In respect of the external auditors:
To consider the appointment of the external auditors and assess their independence,
ensuring that key partners are rotated at appropriate intervals. Oversee the process
for selecting the external auditors and make appropriate recommendations to the
Board. .
To agree the audit fee and pre-approve any fees in respect of non-audit services
provided by the external auditors, and ensure that the provision of non-audit sérvices
does not impair the external auditors' independence and objectivity.
To discuss and agree with the external auditors, prior to commencement of services,
the nature and scope of the. work to be conducted by the external auditors, and
review the auditors' quality control procedures and steps taken to respond to changes
in regulatory and other requirements.
To review the external auditors’ management letter and responses of management.
In respect of Internal Audit:
To review the scope and programme of Internal Audit activities to ensure focus is
maintained on key business risks, processes and controls.
To ensure the internal audit function adopts professional standards, is adequately
resourced and has appropriate standing within the company.
To review internal audit and business management reports on the effectiveness of
the company's systems for financial reporting, internal contro! and risk management.
To consider management's response and progress in dealing with significant internal
or external audit recommendations.
In respect of the accounts:
To review, and challenge where necessary, the actions and judgements of
management in relation to the interim and annual financial statements prior to
submission to the Board, paying particular attention to:
a. Accounting policies and practices, including changes.
b. Decisions requiring a major element of judgement.
c. The extent to which unusual transactions impact on the financial statements and
how these have been disclosed.
d. The adequacy and clarity of disclosures.
e. Significant.adjustments resulting from external audit.
f. The going concern assumption.
g. Compliance with accounting standards.
h. Compliance with legal/regulatory requirements.
i. Reviewing the company's statement on internal control systems prior to
endorsement by the Board and reviewing the policies and process for identifying and
assessing the risks the company is exposed to and the management of those risks by
the company.
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Other roles:
* To review the company's procedures for handling allegations from whistleblowers.
Membership
Donald Brydon (Chair)
Moya Greene
Les Owen
TBC - Secretary
Quorum - 2 Directors
Meeting frequency
Quarterly, and as required.
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ANNEX C
POST OFFICE LIMITED
REMUNERATION COMMITTEE
Role.
e to: determine the individual remuneration packages for the. executive. directors and the
Company secretary, subject where necessary to:the consent of the Shareholder
e to agree the targets for any performance-related incentive schemes applicable to
executive directors and other senior executives
* to-agrée, after taking input from the Secretary of State, the level of annual bonus awards
for the executive directors
¢ to agree the standard form of contract'for executive directors and other senior executives
¢ to ensure that for executive directors and senior executives, the contractual terms on
termination, and any payments made, comply with company policy
e to agree the Directors’ Remuneration Report in the Annual Report and Accounts,
ensuring that the requirements forthe appropriate disclosure of remuneration information,
including pensions, are met
e to report the proceedings of the committee to the Board
Membership
Donald: Brydon - Chairman
Moya Greene
Les Owen
TBG - Secretary:
Quorum - two
Meeting frequency
As necessary