82 John Lewis Partnership plc Annual Report and Accounts 2016 Audit and Risk Committee report


“ We have continued to focus on the financial reporting and control environment including the accounting for significant items, risk and control. We have also completed an audit tender and appointed two new external independent members.”


Baroness Hogg Non-Executive Director and Chair of the Audit and Risk Committee


About the Audit and Risk Committee Role of the Committee


The Committee is responsible to the Board for the oversight of:


a The integrity of the Partnership’s Annual Report and Accounts, and other formal announcements relating to the Partnership’s financial performance


a External audit activities a Internal audit activities


a The Partnership’s systems of risk management and internal control, including an annual review of the effectiveness of their processes


The Committee operates in accordance


with its Terms of Reference that are available at www.johnlewispartnership.co.uk


Committee composition* 2


2


Independent external members


Non-Executive Directors


Membership


The members of the Committee at the date of this report are Baroness Hogg (Chair), Jane Burgess, Kim Lowe, Zarin Patel, Sharon Robson and Keith Williams. There were five Committee meetings held during the year under review. Committee membership during the year under review and Directors’ attendance at those meetings is shown in the table below:


Member Jane Burgess


Baroness Hogg Keith Williams


Left 16 April 2015 Kate Brewer Kevin Payne Dan Smith


Joined 2 June 2015 Steve Gardiner Kim Lowe


Left 3 December 2015 Denis Hennequin


Meetings attended/ eligible to attended


5/5 5/5 4/5


2/2 2/2 2/2


3/3 3/3


4/5 Fair, balanced and understandable – 1 Partners’ Counsellor


Quorum: three members of the Committee to include at least one member who is independent.


At each meeting the Committee meets with the external auditors and the Head of Internal Audit and Risk, without any Executive Director or other executives being present.


At the year-end, the Audit and Risk Committee comprised the following members:


a Two Non-Executive Directors a Two Elected Directors a The Partners’ Counsellor


*at the date of this report 1 Elected Director


what did the Committee consider? The Committee’s assessment of whether the Annual Report and Accounts was fair, balanced and understandable included an analysis of the following:


Fair and balanced


Balanced reporting of performance and prospects Reflection of internal reporting and discussions


Appropriate weighting given to setbacks and challenges


The description of the business model and risk strategy Key audit and accounting issues How the KPIs are presented


Financial measures not defined under IFRS, ensuring that these are not given undue prominence and are used consistently throughout the Annual Report and Accounts


Consistency of the narrative reporting at the front of the report with the financial information at the back


Understandable


A simple explanation of business model, strategy and accounting policies


Important messages, policies, transactions and significant changes from prior periods ensuring these are highlighted and supported, and not obscured by immaterial detail


Clear and concise explanations of KPIs, including how they are measured and what targets are in place for each one


The governance section ensuring it clearly details how decisions are made


Financial measures, ensuring that those which are not defined under IFRS are explained and reconciled to IFRS measures


Avoidance of generic, non-specific ‘boiler plate’ wording, e.g. for risks


Language used aiming for clarity and precision Membership changes since year-end


Zarin Patel and Sharon Rolston were appointed as external independent members of the Committee for an initial three-year term commencing on 2 March 2016. Please see page 87 for their other appointments and relevant experience.


Steve Gardiner stepped down as a member of the Committee, with effect from 12 April 2016.


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