STRATEGIC REPORT
FINANCIAL STATEMENTS
Governance
Financial Reporting Council (“FRC”) review of earnings per share (“EPS”) reported in the Annual Report and Accounts for the year ended 31 December 2021 The Committee reviewed and approved correspondence with the FRC following the enquiry from the Corporate Reporting Review Team. A limited scope review of the Group Annual Report and Accounts for the year ended 31 December 2021 was performed by the FRC in accordance with Part 2 of the FRC Corporate Reporting Review Operating Procedures. The review covered only those aspects of the Annual Report and Accounts that relate to the application of IAS 33, ‘earnings per share’, and compliance with its requirements. The outcome of the enquiry is that the Group has revisited its application of IAS 33 relating to the treatment of the loss on redemption of the Restricted Tier 1 notes issued in 2019 and repurchased in 2021. Accordingly the Group has restated the prior year balances relating to earnings per share and diluted earnings per share. Further details are given in Note 1. Accounting standards No new accounting standards were introduced during 2022. The Committee increased its level of oversight on the progress of the project to implement IFRS 17 and received regular status updates and training on the new requirements, including a briefing on the transition impacts of IFRS 17 and comparisons with the existing reporting basis. Subsequent to the training, the methodology for IFRS 17 was reviewed by the Committee. The Committee also reviewed the disclosures on the implementation and inclusion of IFRS 17 data in the Group Annual Report and Accounts and the architecture of Just’s systems solution for computation of the new IFRS 17 accounting data. Significant accounting judgements The key areas of judgement considered by the Committee in relation to the 31 December 2022 Group Annual Report and Accounts, and how these were addressed, are set out in the table overleaf.
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 the external auditor as outlined later in this report.
Key areas of focus during the year are outlined below.
Financial reporting In 2022 and to date in 2023, 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 including climate related disclosures and IFRS 17; • 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, lifetime mortgages and other illiquid assets; • reviewed documentation prepared in support of the going concern basis and longer-term viability assessment; • reviewed the IFRS operating profits of the Group for the year ended 31 December 2022; • reviewed the existing ten key performance indicators (“KPIs”) used by the Group to assess its financial performance; • 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 2022 Group Annual Report and Accounts and the half-year financial statements to 30 June 2022; • assessed whether the Group 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 annual Group Solvency and Financial Condition Report (“SFCR”), the Group and Solo Regular Supervisory Reports and the Annual Quantitative Reporting Templates prior to submission to the Prudential Regulation Authority (“PRA”). To assist with the execution of their duties, the Committee considered reports from the Group Chief Actuary. It also reviewed reports from the external auditor on the outcomes of their half-year review and financial 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 Group 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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