The Audit Committee

The Audit Committee has three members elected by the Board from among its members. One member is designated as chairman. All members qualify as independent and have been designated as financial experts as defined by the US Securities and Exchange Commission (SEC). Under Danish law, all members qualify as financial experts and two of the members also qualify as independent.

In 2010, the Audit Committee held four meetings and all members participated in all meetings except for one occasion where one member was absent. The CFO also attended all meetings.

The Board has in March 2011 re-elected the following to the Audit Committee:

  • Kurt Anker Nielsen (Audit Committee Chairman)
  • Hannu Ryöppönen (Audit Committee member)
  • Jørgen Wedel (Audit Committee Member).

Roles and responsibilities

The Audit Committee assists the Board with oversight of a) the external auditor, b) the internal audit function, c) the procedure for handling complaints regarding accounting, internal accounting controls, auditing or financial reporting matters and business ethics matters ('whistleblower function'), d) financial reporting, e) post-completion review's and post investment reviews of fixed asset investments previously approved by the Board, and other tasks on an ad hoc basis as specifically decided by the Board.

Under Danish law, the statutory external auditor is elected by the shareholders. All shareholders as well as the Board have the right to propose candidates for election. The Audit Committee recommends to the Board the statutory external auditor to be nominated by the Board and elected by the shareholders at the Annual General Meeting.

Compliance Hotline

Concerns of possible business ethics misconduct and financial fraud may be raised anonymously by employees and stakeholders through the global Compliance Hotline. The Compliance Hotline is managed by the Audit Committee secretariat and monitored by the Audit Committee. The Compliance Hotline is available over the telephone and on the web in nine languages.

Public Audit Committee Reporting

The Audit Committee works according to an Annual Work Plan with fixed agenda items following key events of the annual financial reporting cycle. In addition, The Audit Committee request topics to be discussed on their meetings from time to time.

For the financial reporting year 2010 the Audit Committee dealt with the following matters:

  • The Audit Committee discussed with the CFO, Head of Finance, Head of Group Internal Audit, the General Counsel and the external auditors:
    • material and relevant new accounting pronouncement, implementation of such, review of key accounting policies and the accounting for certain transactions and activities,
    • accounting for significant legal and tax issues
    • critical accounting estimates, and
    • the scope of internal controls over financial reporting in relation to the requirements in the Sarbanes Oxley Act and Danish legislation.
  • The Audit Committee
    • evaluated the performance and the independence of the external auditor
    • recommended the election of the external auditor to the Board of Directors and Annual General Meeting, and
    • reviewed the performance of the internal audit function including a review of the internal audit charter.
  • The Audit Committee reviewed
    • the financial statement releases for the full year and interim financial reports, and
    • the Annual Report including the financial and non-financial statements and the Form-20 F.
  • The head of Group Internal Audit and the external auditor presented the audit planning and audit resources. In addition, they presented the annual conclusion and results of audit activities conducted each quarter for review including the conclusion of the audit of internal controls over financial reporting. Furthermore, the external auditor presented its annual long form report and annual Audit Committee report.
  • The Audit Committee
    • performed a review of the quarterly risk management reporting.
    • performed a review of the risk reporting process.
    • performed a review of the calculation of the long term incentive Programme for management.
    • performed a review of proposed changes to the Groups Treasury policy and risks related to business licenses.
    • performed a review of the global finance organisation.
  • A review of reporting of NN compliance with the three year Deferred Prosecution Agreement entered into with the US Department of Justice and the US Securities and Exchange Commission as of 11 May 2009.
  • The Audit Committee performed oversight of Business Ethics activities including
    • a review of the Business Ethics Compliance Programme including initiated activities following the Deferred Prosecution Agreement, and
    • a review of Compliance reporting from the Corporate Compliance officer and the US compliance officer.
  • The Audit Committee received updates on issues reported via the Compliance Hotline and the Audit Committee agreed on the performed investigations and conclusion reached.
  • The Audit Committee reviewed and approved the pre-approval procedure for audit and non-audit services to external auditors, reviewed the given pre-approvals for the current year and pre-approved the level for the next financial year.
  • The Audit Committee conducted a self assessment including a review of the Audit Committee charter.
  • The Audit Committee performed post completion reviews and post investment reviews of finalized fixed asset investments approved by the Board of Directors.
  • The Audit Committee conducted individual meetings with the CEO, CFO, General Counsel, head of Finance, head of Group Internal Audit, Audit Committee Secretariat, Chief of Staff and external auditors.