Membership and role
The Committee currently comprises four non-executive directors as detailed below. The Chairman, Patrick O'Sullivan, is considered to have recent and relevant financial experience.
Patrick O'Sullivan (Chairman with effect from 1 August 2009)
Alison Carnwath
Dugald Eadie (Chairman until 1 August 2009)
Fred Jolly (appointed 1 August 2009)
Other directors who served on the Committee during the year were:
Phillip Colebatch (until 31 July 2009)
Glen Moreno (until 9 July 2009)
The Committee met six times during the year – four quarterly meetings plus two special purpose meetings ahead of results announcements. All meetings were attended by the Chairman, Finance Director and Financial Controller. The external audit partner attended five meetings and the Head of Group Risk attended four. The Head of Internal Audit, who is also now the Secretary to the Committee, attended all six meetings.
The role of the Committee is to:
After each meeting the Chairman of the Committee reports to the Board on matters discussed by the Committee and on any recommended actions.
Results announcements and financial statements
The Committee holds meetings ahead of results announcements to consider reports from management and the external auditors on key areas of judgement in accounting for and disclosing the Group's results and financial position. This year these meetings took place in November and March. Topics reviewed by the Committee in these focused meetings included impairment testing of goodwill in the Multi-Manager Business; the recoverability of capitalised commission costs from future income on related products; the valuation of proprietary capital positions; and segmental reporting. Key sensitivities behind the accounting judgements were discussed with the Finance Director and external auditors.
All other aspects of the Company's annual and interim results announcements and financial statements are reviewed by the Committee shortly before their submission to the Board for approval. Drafts are distributed sufficiently in advance of Committee meetings to give directors the opportunity to raise questions with the Finance Director and Financial Controller and for resulting changes to be addressed in good time.
External auditors
The Committee considers the reappointment of the external auditors, including the rotation of audit partner, each year and also assesses their independence. As a safeguard to help avoid the objectivity and independence of the external auditors becoming compromised, the Committee has approved a formal policy governing the engagement of the external auditors to provide non-audit services. This policy precludes them from providing certain services (including book keeping, financial IT system design and implementation, financial appraisal and valuation, and internal audit work) and permits other limited services which are subject to low fee thresholds or which require prior approval from the Committee. Details of fees paid to the auditors for the year ended 31 March 2010 are set out in Note 6(b) to the financial statements.
The Committee holds at least one private meeting with the external auditors each year to provide an additional opportunity for open dialogue and feedback from the Committee and the auditors without management being present. Matters typically discussed include the auditors' assessment of business risks and the quality of interaction with management. The Chairman of the Committee meets with the external audit partner prior to Committee meetings depending on the agenda.
