Audit Committee Report continued Composition and operations of the Audit Committee The Chairman of the Committee reports to the Board on The composition of the Committee complies with the how it has discharged its responsibilities at a subsequent 2016 UK Corporate Governance Code (the “Code”), Board meeting. which provides that the Committee should comprise of at least three Independent Non-Executive Directors. Financial reporting The Committee members are Jonathan Muir (Chairman), The Committee received detailed reporting from the Hanna Loikkanen, Cecil Quillen and Andreas Wolf, all of CFO and external auditor in respect of key areas of whom are independent. The Board is satisfied that at management judgement, reporting and audit during the least one member of the Audit Committee has recent and year. The Committee and the external auditor, without relevant financial experience and competence relevant management present, discussed the key areas of audit to the sector in which the Company operates. Mr Muir is focus, the suitability of the accounting policies which a member of the Institute of Chartered Accountants of have been adopted and whether management’s key England and Wales and has both accounting and auditing reporting estimates and judgements were appropriate. experience. Full details of the Committee members’ Considering the external auditor’s assessment of risk, but qualifications can be found on pages 111 to 114 of also using our own independent knowledge of the Group, this Report. we reviewed and challenged where necessary the actions, estimates and judgements of management in relation The Audit Committee works to a planned programme to the preparation of the financial statements. of activities focused on key events in the annual financial reporting cycle and standing items that it considers The significant accounting matters and financial regularly under its Terms of Reference. (The Terms judgements considered by the Committee in relation of Reference, as reviewed and updated in December to the financial statements are addressed below. 2018, are available at: https://bankofgeorgiagroup. Matter considered Action taken com/governance/documents). It also reacts to business Valuation of the Reviewed reports from independent developments as they arise. Bank’s investment valuers on a sample of the Bank’s Attendance at meetings by Committee members property properties, as well as broader market during the year can be found on page 106 of this Report. research results. In addition, The Company Secretary is secretary to the Committee assurance was received from the and attends all meetings. The meetings are also attended external auditor’s review of the by the Bank’s Chief Finance Officer, Chief Risk Officer, valuation agency’s assumptions. Head of Internal Audit and Head of Compliance. The Committee was satisfied that Representatives of EY also attend meetings. The Group’s market conditions did not warrant Chief Executive Officer, General Counsel and UK General a full portfolio revaluation. Counsel attend as required. Separately, the Committee approved the reclassification of a proportion of the portfolio from investment Private meetings property (IAS 40) to assets held During the year, the Committee met privately, without for sale (IFRS 5). management present, with the Bank’s CFO, EY and the Litigation Reviewed litigation that could be Head of Internal Audit. The Chairman of the Committee material to the Company and also held discussions with the lead audit partner in whether a provision for contingent advance of meetings. The focus of these private meetings liabilities was required in respect of was to encourage discussion of any issues of concern such cases. For further information in more detail and directly with the external auditor please see Note 19 on page 243 of and Bank’s Head of Internal Audit. this report. The Chairman of the Audit Committee attends the AGM IFRS 9 and Received regular reports on, and to respond to any shareholder questions that may be IFRS 16 discussed with management, the raised on the Audit Committee’s activities. implementation practical measures being put in place to implement IFRS 9 (from 1 January Key purpose and responsibilities 2018) and IFRS 16 (from 1 January On behalf of the Board, the Audit Committee safeguards 2019), and were satisfied by progress high standards of integrity and oversees conduct in at year-end. financial reporting, internal control and risk management (together with the Risk Committee) and Internal Audit. It also oversees the work of our external auditor. A full description of the Committee’s roles and responsibilities is set out in the Terms of Reference. 122 Annual Report 2018Bank of Georgia Group PLC