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the Annual Report and Form 20F, which is filed annually with the United States Securities and Exchange Commission, the Irish Stock Exchange and the London Stock Exchange, is considered and approved;
the procedures and safeguards which the external auditors have put in place to ensure their objectivity and independence in accordance with regulatory and professional requirements are reviewed;
the letters of engagement and representation are reviewed; and the fees paid to the external auditors for audit and non audit work are reviewed, to ensure that the fee levels are appropriate and that audit independence is not compromised through the level of non audit fees and the nature of non audit work carried out by the external auditors.
In addition the Audit Committee completed an evaluation questionnaire on the external auditor process.
The last external audit tender was conducted in 2010. Detailed consideration was given to the external audit arrangements in 2013. It was concluded that, in the light of the performance of the external auditors and partner rotation plans that a decision as to the timing of the next tender process would be made following consideration of the FRC guidance and new EU regulations in this area. KPMG have been auditors to the Company since its incorporation in 1985.
The Board of Directors established the Remuneration Committee in September 1996. This committee has authority to determine the remuneration of senior executives of the Company and to administer the stock option plans described below. Senior Management remuneration is comprised of a fixed basic pay and performance related bonuses which are awarded based on a combination of the achievement of individual objectives and the Company‘s financial performance. The Board of Directors as a whole determines the remuneration and bonuses of the Chief Executive Officer, who is the only executive director. James Osborne, Louise Phelan and Julie O‘Neill are the members of the Remuneration Committee.
The role and responsibilities of the Remuneration Committee are set out in its written terms of reference, which are available on the Company‘s website www.ryanair.com. The terms of Reference of the Remuneration Committee are reviewed annually.
Nomination Committee Messrs. David Bonderman, Michael O‘Leary and Kyran McLaughlin are the members of the Nomination Committee. The Nomination Committee assists the Board in ensuring that the composition of the Board and its
Committees is appropriate to the needs of the Company by:
assessing the skills, knowledge, experience and diversity required on the Board and the extent to which each are represented;
establishing processes for the identification of suitable candidates for appointment to the Board; and overseeing succession planning for the Board and senior management.
The role and responsibilities of the Nomination Committee are set out in its written terms of reference, which are available on the Company‘s website www.ryanair.com. The Nomination Committee use their extensive business and professional contacts to identify suitable candidates. The terms of Reference of the Nomination Committee are reviewed annually.
Air Safety Committee
The Board of Directors established the Air Safety Committee in March 1997 to review and discuss air safety and related issues. The Air Safety Committee reports to the full Board of Directors each quarter. The Air Safety Committee is composed of Michael Horgan and Howard Millar, Chief Financial Officer and the Accountable Manager for Safety (who both act as co-chairman), as well as the following executive officers of Ryanair: Messrs. Michael Hickey, David O‘Brien, Edward Wilson and Chief Pilot, Mr Ray Conway.
Code of Business Conduct
Ryanair‘s standards of integrity and ethical values have been established and are documented in Ryanair‘s Code of Business Conduct. This code is applicable to all Ryanair employees. There are established channels for reporting code violations or other concerns in a confidential manner. The Head of Internal Audit investigates any instances and reports findings directly to the Audit Committee. The Code is available on the Company‘s website, www.ryanair.com.
Attendance at Board and Committee meetings during the year ended March 31, 2014:
Performance Evaluation The Board has established a formal process to annually evaluate the performance of the Board, that of its principal Committees, the Audit, Nomination and Remuneration committees, and that of the Chief Executive, the Chairman and individual non-executive directors. The Board anticipates that the formal evaluation will be completed yearly. Based on the evaluation process completed, the Board considers that the principal Committees have performed effectively throughout the year. As part of the Board evaluation of its own performance, questionnaires are circulated to all directors. The questionnaire is designed to obtain directors‘ comments regarding the performance of the Board, the effectiveness of Board communications, the ability of directors to contribute to the development of strategy and the effectiveness with which the Board monitors risk and oversees Ryanair‘s progress. Directors are also invited to make recommendations for improvement.
The Chairman, on behalf of the Board, reviews the evaluations of performance of the non-executive directors on an annual basis. The non-executive directors, led by the Senior Independent Director, meet annually without the Chairman present to evaluate his performance, having taken into account the views of the executive director. The non-executive directors also evaluate the performance of the executive director. These evaluations are designed to determine whether each director continues to contribute effectively and to demonstrate commitment to the role.
The Audit, Nomination and Remuneration committees carry out annual reviews of their own performance and terms of reference to ensure they are operating at maximum effectiveness and recommend any changes they consider necessary to the Board for approval.
The Board considers the results of the evaluation process and any issues identified. The above evaluations were conducted in May 2013 and were presented to the Board at the September 2013 Board meeting in respect of the year under review.
Shareholders Ryanair recognises the importance of communications with shareholders. Ryanair communicates with all of its shareholders following the release of quarterly and annual results directly via road shows, investor days and/or by conference calls. The Chief Executive, senior financial, operational, and commercial management participate in these events.
During the year ended March 31, 2014 the Company held discussions with a substantial number of institutional investors.
The Board is kept informed of the views of shareholders through the executive director‘s and executive management‘s attendance at investor presentations and results presentations. Furthermore, relevant feedback from such meetings and investor relations analyst reports are provided to the entire Board on a regular basis. In addition, the Board determines, on a case by case basis, specific issues where it would be appropriate for the Chairman and/or Senior Independent Director to communicate directly with shareholders or to indicate that they are available to communicate if shareholders so wish. If any of the non-executive directors wishes to attend meetings with major shareholders, arrangements are made accordingly.
General Meetings All shareholders are given adequate notice of the AGM at which the Chairman reviews the results and comments on current business activity. Financial, operational and other information on the Company is provided on our website at www.ryanair.com.
Ryanair will continue to propose a separate resolution at the AGM on each substantially separate issue, including a separate resolution relating to the Directors‘ Report and financial statements. In order to comply with the 2012 Code, proxy votes will be announced at the AGM, following each vote on a show of hands, except in the event of a poll being called. The Board Chairman and the Chairmen of the Audit and Remuneration Committees are available to answer questions from all shareholders.
The Chief Executive makes a presentation at the Annual General Meeting on the Group‘s business and its performance during the prior year and answers questions from shareholders. The AGM affords shareholders the opportunity to question the Chairman and the Board.
All holders of Ordinary Shares are entitled to attend, speak and vote at general meetings of the Company, subject to limitations described under note ―Limitations on the Right to Own Shares‖ on page 127. In accordance with Irish company law, the Company specifies record dates for general meetings, by which date shareholders must be registered in the Register of Members of the Company to be entitled to attend. Record dates are specified in the notes to the Notice convening the meeting.
Shareholders may exercise their right to vote by appointing a proxy/proxies, by electronic means or in writing, to vote some or all of their shares. The requirements for the receipt of valid proxy forms are set out in the notes to the Notice convening the Meeting.
A shareholder or group of shareholders, holding at least 5% of the issued share capital has the right to requisition a general meeting. A shareholder, or a group of shareholders, holding at least 3% of the issued share capital of the Company, has the right to put an item on the agenda of an AGM or to table a draft resolution for an item on the agenda of the general meeting provided that such item is accompanied by reasons justifying its inclusion or the full text of any draft resolution proposed to be adopted at the general meeting. A request by a member to put an item on the agenda or to table a draft resolution shall be received by the company in hardcopy form or in electronic form at least 42 days before the AGM to which it relates.
Notice of the Annual General Meeting and the Form of Proxy are sent to shareholders at least twenty-one working days before the meeting. The Company‘s Annual Report is available on the Company‘s website, www.ryanair.com. The 2014 Annual General Meeting will be held at 9a.m. on September 25, 2014 in the Ryanair Dublin Office, Airside Business Park, Swords, Co Dublin, Ireland.
All general meetings other than the Annual General Meeting are called Extraordinary General Meetings (EGMs). An EGM must be called by giving at least twenty-one clear days‘ notice. Except in relation to an adjourned meeting, three members, present in person or by proxy, entitled to vote upon the business to be transacted, shall be a quorum. The passing of resolutions at a general meeting, other than special resolution, requires a simple majority. To be passed, a special resolution requires a majority of at least 75% of the votes cast. Votes may be given in person by a show of hands, or by proxy.
At the Meeting, after each resolution has been dealt with, details are given of the level of proxy votes cast on each resolution and the numbers for, against and withheld. This information is made available on the Company‘s website following the meeting.
Risk Management and Internal Control The directors have overall responsibility for the Company‘s system of risk management and internal control and for reviewing its effectiveness. The directors acknowledge their responsibility for the system of risk management and internal control which is designed to manage rather than eliminate the risk of failure to achieve business objectives, and can provide only reasonable and not absolute assurance against material misstatement or loss.
In accordance with the revised FRC (Turnbull) guidance for directors on internal control published in October 2005, ‗Internal Control: Revised Guidance for Directors on the Combined Code‘, the Board confirms that there is an ongoing process for identifying, evaluating and managing any significant risks faced by the Group, that it has been in place for the year under review and up to the date of approval of the financial statements and that this process is regularly reviewed by the Board.
In accordance with the provisions of the 2012 Code the directors review the effectiveness of the
Company‘s system of internal control including:
Financial Operational Compliance Risk Management The Board is ultimately responsible for the Company‘s system of risk management and internal controls and for monitoring its effectiveness. The key procedures that have been established to provide effective risk
management and internal control include:
a strong and independent Board which meets at least 4 times a year and has separate Chief Executive and Chairman roles;
a clearly defined organisational structure along functional lines and a clear division of responsibility and authority in the Company;
a comprehensive system of internal financial reporting which includes preparation of detailed monthly management accounts, providing key performance indicators and financial results for each major function within the Company;
preparation and issue of financial reports to shareholders and the markets, including the Annual Report and consolidated financial statements, is overseen by the Audit Committee. The Company‘s financial reporting process is controlled using documented accounting policies and reporting formats, supplemented by detailed instructions and guidance on reporting requirements. The Company‘s processes support the integrity and quality of data, including appropriate segregation of duties. The financial information of the parent entity and all subsidiary entities, which form the basis for the preparation of the consolidated financial statements are subject to scrutiny by Group level senior management. The Company‘s financial reports, financial guidance, and Annual Report and consolidated financial statements are also reviewed by the Audit Committee of the Board in advance of being presented to the full Board for their review and approval;
quarterly reporting of the financial performance with a management discussion and analysis of results;