BBA Aviation plc Scope of Non - Audit Services that may be provided by the External Auditor
Introduction The purpose of this policy is to ensure the provision of non-audit services does not impair the independence and objectivity of the external auditor. Non-audit services For the purposes of this policy, the Company adopts the definitions of services as set out in the EU Audit Regulation (for the time being that applies to the Company and its auditor). The classification of non-audit services as set out in the EU Audit Regulation are summarised in the appendix although the full definitions set out in the EU Audit Regulation apply. The external auditor may not supply prohibited services to the Company or any company in the Group. The external auditor may supply other services to the Company or the Group subject to this policy. General The general presumption that the external auditor will not be engaged for non-audit services unless there is an appropriate business case for their appointment. The fees agreed with the external auditor for non-audit services cannot be on a contingent basis. The external auditor is subject to a 70% cap on non-audit services in the financial year ending 31 December 2020 as compared to the average audit fee in the three preceding years. The 70% limit will be a guiding factor in any decisions to allow non-audit services to be provided prior to this limit coming into force. Audit related services required by EU or national law are not to be included in the cap. Approval Process Complete the Application for the approval of non-audit services ; and Submit the application to the Company Secretary. If the work is clearly trivial ( Services will not meet the definition of clearly trivial ) and the fee is below 25,000 this is pre-approved and will be reported to the Chairman of the Audit and Risk Committee. If the fee is above 25,000 approval is required from the Chairman of the Audit and Risk Committee. In the absence of the Chairman of the Audit and Risk Committee the Senior Independent Director or the can give the approval. Approval must be obtained before agreeing contractual terms or signing the engagement letter. Reporting to Audit Committee of fees charged by external auditors To ensure oversight of the overall level of fees paid to the external auditors a summary of all fees charged will be prepared for the Audit Committee to review twice a year. 20 December 2017
Appendix Type of Service A Tax services note that contingent fees for any tax services will also be prohibited BBA Aviation plc and EEA subsidiaries Non-EEA subsidiary preparation of tax forms payroll tax customs duties identification of public subsidies and tax incentives unless support from the statutory auditor or the audit firm in respect of such services is required by law support regarding tax inspections by tax authorities unless support from the statutory auditor or the audit firm in respect of such inspections is required by law calculation of direct and indirect tax and deferred tax provision of tax advice B Services that involve playing any part in the management or decision-making of the audited entity C Bookkeeping and preparing accounting records and financial statements D Payroll services E Designing and implementing internal control or risk management procedures related to the preparation and/or control of financial information or designing and implementing financial information technology systems F Valuation services including valuations performed in connection with actuarial services or litigation support services G Legal services, with respect to: the provision of general counsel negotiating on behalf of the audited entity acting in an advocacy role in the resolution of litigation H Services related to the audited entity's internal audit function
Type of Service I Services linked to the financing, capital structure and allocation, and investment strategy of the audited entity, except providing assurance services in relation to the financial statements, such as the issuing of comfort letters in connection with prospectuses issued by the audited entity BBA Aviation plc and EEA subsidiaries Non-EEA subsidiary J Promoting, dealing in, or underwriting shares in the audited entity K Human resources services, with respect to: Management in a position to exert significant influence over the preparation of the accounting records or financial statements which are the subject of the statutory audit, where such services involve searching for or seeking out candidates for such positions; or undertaking reference checks of candidates for such positions Structuring the organisation design Cost control Key the service cannot be provided unless no direct effect or an inconsequential effect in the view of an objective, reasonable and informed third party Threats and safeguards approach The auditor will assess the threats (risks) to their independence of undertaking the work and put in place appropriate safeguards (such as Chinese walls or an independent review) in order to deliver the service.
Application for the approval of non-audit services (to be supplied by the external auditor) BBA Person or team wishing to engage the external auditor must complete this form and send it to the Company Secretary to seek approval on their behalf Summary of the work / project Is this a Service or subject to the Threats and Safeguards approach? Service / Threats and Safeguards* (*delete as appropriate) If this is a Service please confirm that there is no direct effect or an inconsequential effect in the view of an objective, reasonable and informed third party (if not the service is prohibited) and provide reasons. What is the estimated fee? Please confirm fee basis does not include a contingent fee? Which alternative provider(s) been considered? Please provide an explanation of why it is appropriate to appoint the external auditors to undertake this work (i.e. summary of appropriate business case) Has the lead audit partner confirmed the firm is happy to accept the engagement? Name of the Executive Management Committee member sponsoring the application Name of the person submitting the form and contact details Approval The approved non-audit service [was / was not] approved on 2018. Signature