The Audit Committee

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The Audit Committee

The Audit Committee has three members elected by the Board from among its members. All members qualify as independent as defined by the US Securities and Exchange Commission (SEC). One member is designated as chairman. All members are designated as Audit Committee financial experts as defined by the US Securities and Exchange Commission (SEC). Two members are designated as financial experts as defined in Danish law.

In 2009, 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 2009 elected the following to the Audit Committee: Kurt Anker Nielsen (Audit Committee Chairman and Financial Expert under US law), Hannu Ryöppönen (Audit Committee member and financial expert under Danish and US law) and Jørgen Wedel (Audit Committee Member and Financial Expert under Danish and US law).

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 controls, auditing or financial reporting matters and business ethics matters ('whistleblower function'), d) financial reporting, and e) post-completion review's and postinvestment reviews of fixed asset investments previously approved 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.

Public Audit Committee Reporting

The Audit Committee works according to an Annual Work Plan with fixed agenda items such as 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 2009 the Audit Committee dealt with the following matters:

• The Audit Committee discussed with the CFO, Head of Finance, Head of Group Internal Audit and the General Counsel:
  • 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.
• The CFO presented for review the Annual Report and Form-20 F.
• The head of Group Internal Audit and the external auditor reported on the audit planning and audit resources. In addition, the head of Group Internal Audit reported on the results of audits conducted each quarter including the assessment of internal controls over financial reporting.
• 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 long term incentive Programme for management
  • performed a review of proposed changes to the Groups Treasury policy and risks related to business licenses.
• The Audit Committee performed oversight activities related to the Business Ethics Compliance Programme including initiated activities in relation to the Deferred Prosecution Agreement.
• The Audit Committee Secretary gave updates on issues reported via the Compliance Hotline and the Audit Committee agreed on the performed investigations and conclusion reached.
• The Audit Committee Secretary presented for review and approval the fee to external auditors for services performed for the year and pre-approval of audit and non-audit services 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 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 Group Internal Audit and external auditors.”

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