01 02 Governance 03 04 Audit tender and lead audit partner rotation EY were appointed as our Group statutory auditors in 2015 ahead of our listing on the London Stock Exchange, following a competitive tender process. EY appointed Richard Addison as our lead partner in 2018. The external auditor is required to rotate the audit partner responsible for the Group at least every five years. Following a successful tender for the provision of external audit services this year (as detailed below), the Group will be required to put the external audit contract out to tender no later than 2028. The Company Secretary announced the results of the tender on 12 November 2018. EY was re-appointed by shareholders at the 2018 AGM, and the Board was authorised to set the remuneration of the auditor, by 100% votes in favour for each resolution. External audit tender process We undertook a formal tender process for statutory audit services in 2018 for the financial years 2019 to 2021. The process is set out below: Requests for proposals Evaluation and assessment The RFP had outlined the Presentations given to Audit Decision objectives for the tender Committee in October 2018, process, which were: who assessed against the Recommendation from following criteria: the Audit Committee to the 1) To secure high, quality 1) Capability and Competence. Board to re-appoint EY external audit services from 2) Audit Quality and as the Company’s external a provider with high standards Service Quality. audit providers. of professional service. 3) Behaviour and Deliverables. 2) To secure excellent 4) Pricing. value for money. 5) Other specific topics. Request for Proposal (“RFP”(s)) Requests for Proposals/Invitations to Tender were sent in the third quarter of 2018, including to firms outside of the “big four” audit companies. The invited firms were selected on the basis that they were most likely to fulfil the criteria in particular for capability, competence and audit quality across their UK and Georgian teams. Locally based expertise in Georgia was particularly important given the Company’s business is predominantly in Georgia. The RFP explained that the tender was for the periods stated above and that the auditor would also be subject to re-appointment at the Company’s Annual General Meetings. The RFP outlined that Georgia Healthcare Group’s objectives for the tender process were to: • Secure high-quality external audit services; • Appoint a firm who will provide high standards of professional service; and • Appoint a firm who will provide excellent value for money. To ensure all participating firms had equal and sufficient information to understand the Group’s business, the RFP provided general information about the business, timeline and description of tender process, outline of evaluation criteria, scope of work and tender response format. The RFP contained detailed information on the required contents of their Proposals from the firms. We received responses from four companies who confirmed their willingness to participate in the tender process, confirmed their independence and signed non-disclosure agreements. Tender process All firms provided a proposal and were invited to present to the Committee in October 2018. All Audit Committee members attended all presentations alongside the CFO and IFRS Advisory Manager. Attendees from the firms were a combination of their UK and Georgian based teams, and each were given sixty minutes to present, including time for discussion with the Committee. The RFP had set out the criteria that the Committee used in making a recommendation to the Board on auditor appointment. These were broken down as follows, with each section given equal weighting: • Capability and Competence; • Audit Quality and Service Quality; • Behaviour and Deliverables; and • Pricing. A summary of proposal was prepared for each firm and circulated to the Committee members along with the full proposals. The Committee discussed the strengths and weaknesses for each firm. Based on this process, the Committee determined that EY had the highest capability, competence and quality for the role. The Committee recommended two firms to the Board for it to consider for the provision of external audit and audit-related services for the three years (2019, 2020 and 2021) indicating a preference for EY. This recommendation was accepted by the Board and separate resolutions proposing EY’s re-appointment and determination of EY’s remuneration by the Committee will be proposed at the 2019 AGM. We announced the outcomes for the tender process upon completion to the London Stock Exchange. In making this recommendation, the Committee confirmed in accordance with clause 489(5) of the Companies Act 2006 that (i) they were free from the influence of a third party and (ii) there was no contractual term of the kind mentioned in Article 16(6) of the Audit Regulation (Regulation (EU) No 537/2014 restricting the choice by the general meeting of shareholders as regards the appointment of a particular statutory auditor or audit firm. 79