BT 2014 Annual Report Download - page 86

83
Governance
Governance
Warren East joined the committee on 1 May 2014.
What we have done
We met six times during the year and in addition we held a joint meeting
with the
Nominating & Governance Committee . You can read about what
we discussed at this joint meeting in the Nominating & Governance
Committee Chairman’s report on page 88. The chart below shows how
we allocated our time, including at the joint meeting.
We set time aside at each meeting to seek the views of the internal and
external auditors in the absence of management.
Allocation of Time
24%
Risk and controls
28%
Financial matters
13%
Internal audit matters
15%
External audit matters
20%
Governance
The committee has an annual work plan. This includes standing items
that the committee considers regularly in addition to any specic
matters that require the committee’s attention and topical items on
which we have chosen to focus. For example, in 2013/14 we asked
management to provide us with greater analysis of our operations in
Latin America and reports on major contracts in BT Global Services,
customer data handling, data security and current trends on security
risks facing BT. We also requested a brieng in relation to the regulatory
nancial statements, including areas of key judgement or estimate.
Some of the more signicant matters we discussed during the year are
set out below.
Financial reporting
We
• reviewed the Annual Report & Form 20-F, together with annual,
half-year and quarterly results announcements for recommendation
to the Board
• considered the appropriateness of the group’s accounting policies and
critical accounting estimates and judgements and
• considered the Annual Report in the context of advising the Board that
the Annual Report presents a fair, balanced and understandable view
of the business and its performance. The processes and controls that
underpin our consideration include appropriate senior managers across
the business providing the content, having been fully briefed on the
fair, balanced and understandable’ requirement a dedicated core team
of senior managers responsible for overall co-ordination, consistency,
and detailed review and challenge of content submissions verication
of all facts, tested by the internal auditors conrmation from the line
of business CEOs, CFOs and key functional heads that they consider the
content in respect of their area of responsibility to be fair, balanced and
understandable and the Disclosure Committee’s review and assessment
of the Annual Report as a whole. We also received an early draft of the
report to enable timely review and comment, and all of this allowed us
to provide positive assurance to the Board.
The signicant issues we considered in relation to the nancial
statements for the year ended 31 March 2014 are set out below.
We have discussed these with the external auditors during the year
Audit & Risk Committee Chairman’s report
Who we are
I chair the Audit & Risk Committee . Our membership and meeting
attendance during the year are set out below. The diverse backgrounds of
the committee members and their combined skills and experience enable
us to full the committee’s remit, as set out in its terms of reference.
We regularly meet with external experts (frequently the big four
accounting rms) to keep ourselves fully aware of market best practices.
Although not members of the committee, the Company Secretary, Group
Finance Director, Deputy Finance Director, Director Group Financial
Control and Director Internal Audit attend each meeting as does the lead
audit partner and representatives from our external auditors. I meet with
this group ahead of the meetings to review key areas for discussion with
the committee. The external auditors are not present when we discuss
their performance and/or remuneration.
We are keen to interact with senior managers below executive level
and representatives from nance and internal audit attend meetings at
our invitation.
The Board has agreed that I have recent and relevant nancial experience
as required by the provisions of the Code and that I constitute an audit
committee nancial expert’ for the purposes of the Sarbanes-Oxley Act.
After each meeting, I report to the Board on the main issues that we
discussed.
Committee members
Meetings
Member Eligible toattendaAttended
Nick Rose (chairman) 7 7
Rt Hon Patricia Hewittb76
Karen Richardson 7 7
Jasmine Whitbread 7 7
a Includes a joint meeting with the
Nominating  Governance Committee in March 2014.
b Patricia +ewitt retired from the committee on 23 March 2014.
Nick Rose
This year the Audit  5isk Committee paid
special attention to several overseas locations
that are important to BT Global Services,
including Italy and Brazil, to data security
and to the increasing cyber security threat.
We have received detailed presentations
from key personnel in each of these areas and
reviewed managementos mitigation plans.
Reports of the Board committees