JUST GROUP PLC Annual Report and Accounts 2020
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audit Committee Report continued
Accounting standards No new accounting standards were introduced during 2020. The Committee continued to monitor the progress towards being in a position to implement IFRS 17 and received regular status updates. Work continues in parallel to develop Just’s systems solution for computation of the new IFRS 17 accounting data. There were amendments to IFRS 3 “Business Combinations”, IAS 1 and IAS 8 “Definition of Material”, and IFRS 9, IAS 39 and IFRS 7 “Interest Rate Benchmark Reform” during the year. These amendments do not have any material impact on the Group. Significant accounting judgements The key areas of judgement considered by the Committee in relation to the 2020 accounts, and how these were addressed, are set out in the following table.
AREAS OF FOCUS The Committee follows an annual rolling forward agenda with standing items considered at each meeting in addition to any matters arising and topical business or financial items which the Committee has decided to focus on. Regular reporting is received from Internal Audit and External Audit as outlined later in this report. Key areas of focus during the year included the following matters. Financial reporting In 2020 and to date in 2021, the Committee: • reviewed the quality and acceptability of accounting policies and practices; • reviewed the appropriateness and clarity of the disclosures and compliance with financial reporting standards and relevant financial and governance reporting requirements; • reviewed material areas in which significant judgements have been applied or there has been discussion with the external auditor; • reviewed the assumptions critical to assessing the value of assets and liabilities, in particular insurance liabilities and lifetime mortgages; • reviewed documentation prepared in support of the going concern basis and longer-term viability assessment, including the impact of COVID-19; • reviewed the nine key performance indicators (“KPIs”) used by the Group to assess its financial performance and approved the replacement of the current KPI “in-force operating profit” with “management expenses” and “underlying organic capital generation/ (consumption)” to reflect the focus on management expenses and controlling costs and growing capital; • reviewed the alternative performance measures (“APMs”) used by the Group and how these are disclosed within the Annual Report and Accounts; • reviewed the 31 December 2020 Group Annual Report and Accounts and the half-year statements to 30 June 2020; • assessed whether the Annual Report and Accounts, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Group’s performance, business model and strategy and concluded that they are; and • oversaw the preparation and review of the Group Solvency and Financial Condition Report (“SFCR”) as at 31 December 2019, the Group and Solo Regular Supervisory Reports and the Annual Quantitative Reporting Templates for the PRA submission in April 2020. To assist with the execution of their duties, the Committee considered reports from the Group Chief Financial Officer and the Group Chief Actuary. It also reviewed reports from the external auditor on the outcomes of their half-year review and year-end audit. The Committee encouraged the external auditor to display the necessary professional scepticism its role requires throughout the year. The Committee was pleased to advise the Board that the judgements and assumptions are appropriate and that the Annual Report and Accounts are fair, balanced and understandable, and provide the necessary information for shareholders to assess the Group’s position, prospects, business model and strategy.
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