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REPORT FROM THE AUDIT COMMITTEE
Membership
The Audit Committee (the Committee) comprised throughout the year
four non-executive directors, Lord Stewartby, Deputy Chairman, who
is chairman of the Committee, and Messrs Kennedy, Mylvaganam and
Sanders. On 1 January 2004, Mr Joslin joined the Committee as an
additional member. The Chairman of the Company, the Group Chief
Executive, the Finance Director and the head of Audit & Compliance
usually attend the Committee’s meetings. At least once a year the
Committee meets, both on its own and with the external auditors,
without any executive management present.
The Board has satisfied itself that, upon the New Combined Code
coming into effect for the Company on 1 January 2004, the
Committee had at least one member with recent and relevant
financial experience.
Terms of reference
The Committee’s terms of reference enable it to take an independent
view of the appropriateness of the Group’s accounting policies and
practices. It also considers the appointment and fees (both audit and
non-audit) of the external auditors, who have unrestricted access to
it, and monitors the Group’s compliance, internal control and risk
management procedures. The Committee’s revised terms of reference,
adopted for the Committee by the Board in November 2003, take
full account of the Smith Report on the role of audit committees,
for instance providing that all its members must be independent
non-executives rather than just a majority.
The Committee's terms of reference are available in the corporate governance section of the Amlin website
and from the Secretary on request.
Meetings
The Committee meets a minimum of four times a year. It met five times
during 2003, when attendance by committee members was as follows:
Audit Committee attendance 2003
| Committee member |
Number of Committee
meetings attended |
|
| J M Kennedy |
5 |
| R W Mylvaganam |
5 |
| J R Sanders |
4 |
| Lord Stewartby |
5 |
|
| Average % attendance |
95% |
|
Activities
In addition to reviewing accounting policies, the Company’s interim
and preliminary results statements and its Annual Report, the
Committee reviewed and reported to the Board on: the managed
syndicate’s Annual Report; the external auditors’ engagement and
service plan; the plans, and work undertaken during the year, of the
Group’s Internal Audit and Compliance Department; the external
auditors’ independence and the extent and reasons for them providing
non-audit services (a break down of the fees for which is set out in
note 10 to the Accounts); and other related matters. Reports were
received from the external auditors in respect of each set of financial
statements, highlighting the material judgemental areas, which were
then discussed by the Committee with executive management and the
auditors at the relevant Committee meeting.
During the year the Committee operated enhanced procedures for
approving any appointments of the external auditors (or its associated
entities) to provide non-audit services.
Details of the Committee’s role regarding internal control issues are set
out in the ‘Accountability and internal control’ section of the Board
corporate governance statement.
The Committee also monitored the Group’s compliance with Lloyd’s,
Financial Services Authority and other regulatory requirements and
recommendations. Reports to the Committee from the Group’s Audit
and Compliance department included summaries of the findings of
internal audit reports, enabling members of the Committee to question
the head of Audit and Compliance on such reports and to monitor the
measures taken by management to respond to issues raised.
The Committee was updated during the year on technical accounting
developments both by the external auditors and by the Group Finance
Director. A special session, to which all directors were invited, was
held to consider the nature, impact and timing of the introduction of
International Accounting Standards to the Group’s financial reporting.
By Order of the Board, on the recommendation of its Audit Committee
C C T Pender Secretary
9 March 2004
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