100 JUST GROUP PLC Annual Report and Accounts 2019
Directors’ Report continued
AUDITORS Disclosure of information to the auditor
annuities) policies written from 1 July 2004 to 30 June 2012 and underwritten using the Merica underwriting system; and • the Nomura treaty between Just Retirement Limited and Nomura Reinsurance 51C Limited (dated 30 September 2015 and amended and restated 3 April 2019) in relation to Just Retirement Limited’s GIfL (individual underwritten annuities) policies written from 1 July 2009 to 1 July 2013 and underwritten using the Merica underwriting system. In the case of the Achmea Re treaty, the reinsurer can immediately terminate if there is any material change in the ownership, management or control of Just Retirement Limited. In the case of the Hannover Rueck SE and Hannover Life Reassurance Bermuda Ltd treaties (“Hannover”), and in the case of the Nomura treaty, within three months of change of control, the reinsurer may terminate upon three months’ prior written notice, if (i) the new controller has a long-term credit rating below BBB as rated by Standard and Poor’s or if Standard and Poor’s does not provide a credit rating, an equivalent rating of Moody’s or Fitch; or (ii) if the new controller does not have a long-term credit rating and such change of control has or is likely to have a material adverse effect on the creditworthiness of Just Retirement Limited; or (in the case of Hannover Rueck SE and Hannover Life Reassurance Bermuda Ltd only) the new controller of Just Retirement Limited is a major competitor). If such termination occurs, the reinsurer may exercise an option either to continue the treaty in respect of business already ceded or to require recapture of that business, which has the effect of withdrawing the reinsurance in respect of past business (subject to any repayment by Just Retirement Limited not causing it to breach its PRA minimum capital requirements). The Company does not have any agreements with any Non-Executive Director, Executive Director or employee that would provide compensation for loss of office or employment resulting from a change of control. Financial instruments Derivatives are used to manage the Group’s capital position which entails a surplus of long dated fixed interest assets when liabilities are measured on a realistic basis. Details of these derivatives are contained in note 27 to the financial statements. Disclosure with respect to financial risk is included on pages 36 to 39 of the Strategic Report and in note 33 to the financial statements. Political contributions No political contributions were made, or political expenditure incurred, by the Company and its subsidiaries during the year (2019: £nil). POST BALANCE SHEET EVENTS On 9 January 2020 4,612 ordinary shares of 10p were allotted out of the block listing in respect of an exercise of an option under the Group SAYE share scheme by an employee. The Directors’ Report has been approved by the Board and is signed on its behalf by:
Each of the persons who is a Director of the Company at the date of approval of this Directors’ Report has confirmed that, so far as the Director is aware, there is no relevant audit information of which the Company’s auditor is unaware. Each Director has taken all the steps that he or she ought to have taken as a Director in order to make himself or herself aware of any relevant audit information and to establish that the Company’s auditor is aware of that information. This confirmation is given and should be interpreted in accordance with the provisions of Section 418 of the Companies Act 2006. Audit tender During the year, a tender for the role of external auditor was carried out. This process was overseen by the Audit Committee. Further information on the process followed and the selection criteria used in the audit tender can be found in the Report of the Audit Committee on page 76. The Board has agreed, based on the recommendation of the Audit Committee, that a resolution will be put to shareholders at the forthcoming Annual General Meeting for the appointment of PwC as auditor of the Company for the period ending 31 December 2020 and to authorise the Board’s Audit Committee to determine the remuneration of the auditor. It is intended that KPMG LLP will step down as the Company’s external auditor at the conclusion of the 2020 AGM. The Audit Committee reviews the appointment of the auditor and the auditor’s effectiveness and relationship with the Group, including the level of audit and non-audit fees paid. Further details on the work of the Audit Committee is set out on pages 72 to 77 in the Corporate Governance Report. OTHER DISCLOSURES Change of control provisions There are a number of agreements that take effect, alter or terminate upon a change of control of the Company, such as commercial contracts, bank loan agreements, property lease arrangements and employee share plans. In the context of the Group as a whole, none of these are deemed to be significant in terms of their potential impact except for those listed below. The following reinsurance treaties may be terminated by the reinsurer on a change of control as set out below: • the Hannover Re treaty between Just Retirement Limited and Hannover Rueck SE, Hannover (dated 20 September 2012 and as amended on 16 October 2013, 22 December 2014, 17 December 2015 and 4 April 2019) in relation to Just Retirement Limited’s GIfL (non-profit pension annuities) policies written from 1 July 2004 to 31 December 2015 and underwritten using the Merica underwriting system; • the Hannover Re treaty between Just Retirement Limited and Hannover Life Reassurance Bermuda Ltd (dated 17 December 2015 and as amended on 19 May 2017 and 4 April 2019 ) in relation to Just Retirement Limited’s GIfL (non-profit pension annuities) policies written for the underwriting years 2004/05, 2005/06 and 2006/07, and underwritten using the Merica underwriting system; • the RGA lead treaty between Just Retirement Limited and RGA International Reinsurance Company Limited (acting as lead reinsurer) and the treaty between Just Retirement Limited and RGA Americas Reinsurance Company Ltd (acting as following reinsurer) (both treaties dated 19 June 2013 and as amended on 26 September 2013, 1 January 2014, 23 July 2014, 1 June 2015 and 5 April 2019) in relation to Just Retirement Limited’s GIfL (non-profit pension annuities) policies written from 1 July 2012 to 31 December 2014 and underwritten using the Merica underwriting system. Business reinsured under these treaties has been fully recaptured in 2019, following the repayment of the deficit loan; • the Achmea Re treaty between Just Retirement Limited and Interpolis Reinsurance Services Limited as novated to Achmea Reinsurance Company NV (dated 1 December 2005 and as subsequently amended, most recently on 23 September 2019) in relation to Just Retirement Limited’s GIfL (non-profit pension
SIMON WATSON Group Company Secretary 11 March 2020
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