Letter from the Audit Committee Chairman

Neil warner letter

Dear Shareholder

On behalf of the Board I am pleased to present Dechra's Audit Committee Report for the year ended 30 June 2013.

Last year I advised that, following over nine years' service with Dechra, I would be standing down as a Non-Executive of the Group at the 2013 Annual General Meeting and that the recruitment for a replacement Non-Executive Director, with recent and relevant financial experience, had commenced. I am pleased to report that Julian Heslop was appointed as a Non-Executive Director and also a member of the Audit Committee in January 2013 and that Julian has accepted the role of Chairman of the Audit Committee upon my retirement in October 2013.

Julian Heslop brings to the Committee a wealth of experience gained from serving as Chief Financial Officer of GlaxoSmithKline PLC between 2005 and 2011, having previously been appointed its Senior Vice President, Operations Controller between 2001 and 2005 and as Financial Controller of Glaxo Wellcome PLC between 1998 and 2000.

Since Julian's appointment in January 2013, he and I have worked closely together on all Audit Committee matters so that he is aware of any key issues in relation to audit matters and also to ensure a smooth and orderly handover of duties prior to my retirement.

I am also pleased to welcome Ishbel Macpherson as a member of the Audit Committee. Further details in respect of both Ishbel and Julian are provided in the Corporate Governance Report.

Last year you will recall that I reported that the Committee was in the process of defining the scope of an internal audit function with a view to commencing recruitment by the end of 2012. Following the resignation of the Group Finance Director, Simon Evans, in October 2012 it was agreed that the recruitment process be placed on hold until the new Chief Financial Officer, Anne-Francoise Nesmes, had taken up her role with the Company. Following Anne-Francoise's appointment, and a number of discussions in relation to the potential remit of an internal audit function within Dechra, it has been decided that the best approach to take at the current time is to outsource the function for an interim period whilst consideration can be given to the longer term view of the remit and responsibilities of an internal audit function. More details in relation to the tender process are provided within the following report.

Finally, I would like to take this opportunity to thank the Board of Dechra for their support during my tenure as both a Non-Executive of the Company and also Chairman of the Audit Committee. I firmly believe that Julian Heslop is well suited to guiding the Audit Committee forward and I wish him well with this role.

As always, should you have any questions in relation to this report, please feel free to contact me or the Company Secretary.

Neil Warner
Audit Committee Chairman