annual report 2007 - the Admiral Group plc

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26 CORPORATE GOVERNANCE· Reports from the external auditors on their audit, proposed audit scope, fees and auditorindependence;· Performance of the internal audit department through self assessment (the internal auditdepartment is subject to external assessment once every five years);· The Group’s ‘whistleblowing’ procedures.The Committee adopted a policy on non-audit services that, amongst other things, requires thatthe Committee approve all proposals for expenditure of over £30,000 on non-audit services.The policy was last reviewed on 28 November 2007. The Group’s auditors, KPMG Audit plc,provide some non-audit services, the majority of which comprise compliance services on thevarious taxation issues within the Group, and which are not considered by the Committee tocompromise their independence as auditors. In addition, the Committee reviewed the fees withrespect to VAT services in relation to the Group’s Gibraltan insurance Company and agreed thatthe work carried out did not compromise the auditor’s independence. The level of non-audit feesis reviewed at each Committee meeting and details are included in note 10 of the Report andAccounts.The Head of Internal Audit is invited to all Committee meetings and provides a range ofpresentations and papers to the Committee, through which the Committee monitors theeffectiveness of the Group’s internal controls. Committee members receive copies of allinternal audit reports and are given the opportunity to raise questions on the content andrecommendations contained within the reports. The Committee approves the internal auditprogramme at the start of each calendar year and monitors the progress made in achieving theplan.During the year, the Committee received a presentation from the Group’s external actuaries, Ernst& Young, on reserving methodologies used in assessing the Group’s claims reserves.The Committee also approves the annual compliance review plan and receives copies of thesereports. The Group’s Company Secretary, who has responsibility for the Compliance and Riskmanagement functions, provides the Committee with a quarterly Compliance Officer’s reportsummarising the activities in this area.The Committee has a policy that provision of external audit services be tendered every fiveyears. This was last carried out in 2006 when the decision was made to retain the services of theincumbent external auditors. At the same time the external audit partner was rotated.The Nominations CommitteeThe membership at the year-end was Keith James (Chairman), Lucy Kellaway and Alastair Lyons.The Company Secretary acts as Secretary to the Committee. The Committee normally invitesthe Chief Executive to attend meetings.The Committee has formal terms of reference, which were last reviewed on 22 November 2007.The Committee met on two occasions during 2007.The Committee leads the process for making appointments to the Board or where the appointeeis likely to become a Board member. The Committee ensures there is a formal, rigorous andtransparent procedure for the appointment of new Directors to the Board through a fullevaluation of the skills, knowledge and experience of Directors. The Committee also ensuresplans are in place for orderly succession for appointments to the Board, and reviews the plans forother senior management positions. Responsibility for making senior management appointmentsrests with the Chief Executive.
ADMIRAL GROUP plc 27During 2007, the Committee advised the Executive team on the expectations for successionplanning. Planning for the most senior management positions was formerly in place but belowthis, succession planning within the Group was not well documented. The People ServicesManager has started a process of documenting and improving the approach taken by the Groupto assess and monitor succession planning throughout the Group.The Committee reviewed the current Board size, structure, and composition and confirmed thatno further changes were required and that the leadership of the organisation was such that theCompany could continue to compete effectively in the marketplace in which it operates.The Remuneration CommitteeThe membership at the year-end was John Sussens (Chairman), Martin Jackson and MargaretJohnson. The Company Secretary acts as Secretary to the Committee. The Committee invitesthe Chief Executive and Chairman to attend the meetings where it deems appropriate.Corporate governance 22 - 29The Committee has formal terms of reference, which were last reviewed on 22 November 2007.The Committee met five times during 2007.During the year the Committee carried out the following tasks:-· Reviewed the Group’s overall remuneration policy and strategy;· Recommended for approval individual remuneration packages for Executive Directors, andCompany Secretary;· Reviewed the rules and performance measures of the Group share schemes and recommendedfor approval the grant, award, allocation or issue of shares under such schemes.A separate remuneration report is included within the Report and Accounts.The Committee did not use the services of any external consultants during the year but didreceive reports produced by various external agencies to enable it to make judgements on thelevels of remuneration for the Directors and to review the remuneration of the Group’s seniorexecutives.Internal control and risk managementThe Board is ultimately responsible for the Group’s system of internal control and, through theAudit Committee, has reviewed the effectiveness of these systems. The systems of internalcontrol over business, operational, financial and compliance risks are designed to manage ratherthan eliminate the risk of failure to achieve business objectives and can only provide reasonableand not absolute assurance against material misstatement or loss.The Board is of the view that there is an ongoing process for identifying, evaluating and managingthe Group’s internal controls; that it has been in place for the year ended 31 December 2007; andthat, up to the date of approval of the annual report and accounts, it is regularly reviewed by theBoard and accords with the internal control guidance for Directors provided in the Code.A key element of the control system is that the Board meets regularly with a formal schedule ofmatters reserved to it for decision and has put in place an organisational structure with clearlydefined lines of responsibility.
Page 1: annual report 2007
Page 8: 8 CHIEF EXECUTIVE’S STATEMENTChie
Page 11 and 12: ADMIRAL GROUP plc 1167%. Advertisin
Page 13 and 14: ADMIRAL GROUP plc 13Last point of n
Page 15 and 16: ADMIRAL GROUP plc 15UKGROUP£000EUR
Page 17 and 18: ADMIRAL GROUP plc 17Profit commissi
Page 19 and 20: ADMIRAL GROUP plc 19Investments and
Page 21 and 22: ADMIRAL GROUP plc 21Reconciliation
Page 23 and 24: ADMIRAL GROUP plc 23John Sussens ga
Page 25: ADMIRAL GROUP plc 25This is supplem
Page 29 and 30: ADMIRAL GROUP plc 29The Committee h
Page 31 and 32: ADMIRAL GROUP plc 31· Approved Fre
Page 33 and 34: ADMIRAL GROUP plc 33The following t
Page 35 and 36: ADMIRAL GROUP plc 35Awards made und
Page 37 and 38: ADMIRAL GROUP plc 37Corporate respo
Page 39 and 40: ADMIRAL GROUP plc 39Impact Area Usa
Page 41: ADMIRAL GROUP plc 41Manfred Aldag (
Page 44 and 45: 44 FINANCIAL STATEMENTSDirectors’
Page 46 and 47: 46 FINANCIAL STATEMENTSAppointments
Page 48 and 49: 48 FINANCIAL STATEMENTSIndependent
Page 50 and 51: 50 FINANCIAL STATEMENTSConsolidated
Page 52 and 53: 52 FINANCIAL STATEMENTSConsolidated
Page 54 and 55: 54 FINANCIAL STATEMENTSNotes to the
Page 56 and 57: 56 FINANCIAL STATEMENTSInvestment i
Page 58 and 59: 58 FINANCIAL STATEMENTSand expected
Page 60 and 61: 60 FINANCIAL STATEMENTS4. Segment r
Page 62 and 63: 62 FINANCIAL STATEMENTS5. Net insur
Page 64 and 65: 64 FINANCIAL STATEMENTSAnalysis of
Page 66 and 67: 66 FINANCIAL STATEMENTS10. Staff co
Page 68 and 69: 68 FINANCIAL STATEMENTSFactors affe
Page 70 and 71: 70 FINANCIAL STATEMENTS16. Property
Page 72 and 73: 72 FINANCIAL STATEMENTS18. Financia
Page 74 and 75: 74 FINANCIAL STATEMENTSLiquidity ri
Page 76 and 77:
76 FINANCIAL STATEMENTSiii) Effecti
Page 78 and 79:
78 FINANCIAL STATEMENTSD) Analysis
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80 FINANCIAL STATEMENTSF) Reconcili
Page 82 and 83:
82 FINANCIAL STATEMENTS23. Obligati
Page 84 and 85:
84 FINANCIAL STATEMENTSStaff share
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86 FINANCIAL STATEMENTS26. Analysis
Page 88 and 89:
88 FINANCIAL STATEMENTS29. Related
Page 90 and 91:
90 FINANCIAL STATEMENTSParent Compa
Page 92 and 93:
92 FINANCIAL STATEMENTSNotes to the
Page 94 and 95:
94 FINANCIAL STATEMENTS8. Reconcili
Page 96 and 97:
NotesADMIRAL GROUP plc
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annual report 2007 - the Admiral Group plc

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