Experian 2015 Annual Report Download - page 78

Significant issues
The table below summarises the significant issues considered by the Committee in relation to the Group and Company financial
statements and the manner in which they were addressed. These matters, along with any other key issues covered by the Committee,
are reported to the Board. The Board also receives copies of the minutes of each Audit Committee meeting.
Matter considered Conclusion
Impairment review
A summary of the impairment analysis and underlying
process was provided to the Committee. The Committee
scrutinised the methodology applied by management and
reviewed the cost allocation policies applied. The analysis
showed that the headroom within the Asia Pacific and
EMEA cash generating units (‘CGUs’) had declined during
the year, but that there was still headroom in these CGUs.
The Committee concurred with management’s conclusion that no
impairment of goodwill was required.
The Committee noted the reduced headroom and the sensitivity to
changes in assumptions and concurred with the proposed disclosure
of these in the Group financial statements.
Tax
The Committee received an update from management on
the adequacy of provisions in respect of significant open tax
matters across its principal locations. The review included
details of ongoing correspondence with the UK and Brazil
tax authorities and the principal areas of tax challenge.
The Committee agreed that the assessment of the tax provision was
appropriate and that the judgment taken in respect of the year-end
provision was reasonable.
The Committee noted the evolving and complex tax laws that applied to
the Group and the uncertainty that these might bring. It concluded that
the proposed enhanced Group tax risk disclosures were appropriate.
Brazil litigation
An update was provided to the Committee on the litigation
in Brazil relating to the use of credit scores. The Committee
noted the decision by the Superior Tribunal of Justice in
Brazil which ruled that scores are legal and that the cases
against Serasa had no merit under Brazilian law.
The Committee reviewed the progress made in resolving
the significant number of open cases.
The Committee reviewed and agreed the contingency disclosure
proposed in note 41 to the Group financial statements.
Other litigation and regulatory matters
The Committee received an analysis of the open litigation
and regulatory matters affecting the Group, and the
associated financial reporting considerations.
The Committee concluded that these matters had been appropriately
provided for at 31 March 2015.
The Committee considered and concurred with the proposed contingent
liability disclosures included in the Group financial statements.
Independence is an important element of
the external audit. The Committee monitors
this during the year, by reviewing potential
threats to independence and the associated
safeguards. These safeguards include
assessing the relationship between the
external auditor and Experian, avoiding
contingent fee arrangements, ensuring
that non-audit services fall within agreed
monetary limits and requiring the external
auditor to consider the potential impact of
non-audit services on their audit services.
Other safeguards are the rotation of the
lead audit engagement partner and the
use of separate teams, where appropriate.
The Committee concluded that the external
auditor had maintained independence
throughout the year.
Based on the outcome of the evaluation
of the external auditor, the reports on the
audit process that the Committee reviewed
and the conclusion that the external auditor
and the Group had complied with the
FRC’s Guidance on Audit Committees, the
Committee recommended to the Board
(for shareholder approval) that the external
auditor be re-appointed.
Non-audit services
PricewaterhouseCoopers LLP provides
a range of other services to Experian,
which include tax compliance and
advisory services. To ensure auditor
objectivity and independence, the
Company has a policy in relation to
providing such services, which includes
financial limits above which the Chairman
of the Audit Committee must approve any
proposed non-audit services.
The Committee receives half-yearly reports
detailing non-audit assignments carried
out by the external audit firm, together with
the related fees. Non-audit fees paid to the
Company’s auditor are capped at 100% of
the fees for audit and assurance services,
except in exceptional circumstances. An
analysis of fees paid to the external auditor
for the year ended 31 March 2015 is set out
in note 12 to the Group financial statements.
Corporate governance report continued
76 Governance •Corporate governance report