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POLARGC(12)/1-7 POL ARC(12)1
Post Office Limited
(Company no. 2154540)
Minutes of the meeting of the Audit, Risk and Compliance Committee
(a duly constituted sub-committee of the Board)
held at 148 Old Street, London EC1V 9HQ
on 23 May 2012 at 8.15am
Present
Alasdair Marnoch Chairman of the Meeting
Alice Perkins Chairman, POL
Neil McCausland Senior Independent Director, POL
In Attendance
Susan Crichton Legal & Compliance Director, POL
Chris Day Chief Financial Officer, POL
Sarah Hall Financial Controller, POL
Alwen Lyons Company Secretary, POL
Paula Vennells Chief Executive, POL
Angus Grant Audit Partner, Ernst & Young
Jeremy Midkiff Ernst & Young
POLARC12/1 WELCOME AND GOVERNANCE
As Chairman of POL, Alice Perkins welcomed everyone to the first
formal meeting of the Audit, Risk and Compliance sub-committee
established by the POL Board.
It was agreed that Alasdair Marnoch would act as Chairman of the
Committee.
The terms of reference for the sub-committee, which had been
approved by the Board, were noted.
POLARC12/2 AUDIT RESULTS REPORT
a) Copies of the report produced by Ernst & Young, setting out the
external auditor's preliminary conclusions on the financial position and
results of operations of POL for the financial year ended 25 March
2012, had been circulated to all those present at the meeting. Ernst &
Young anticipated that an unqualified audit report would be issued.
Angus Grant confirmed the independence of the external auditor and
commented on the approach to the audit and its scope.
He explained that many of the issues reported were legacy issues.
The significant audit and accounting issues set out in the report were
discussed in detail, together with the key internal contro! findings.
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b) Going Concern
The auditors had reviewed and agreed the appropriateness of the
Going Concern basis for preparation of the financial statements.
c) IT
It was recognised that the IT controls in the business had improved and
that there had been a change in the governance and management of the
Fujitsu contract. The auditors found that the IT systems were insufficiently
effective to be fully relied upon for audit control purposes. However,
through adopting mitigating procedures, Ernst & Young had been able to
rely on the IT systems supporting the POL financial statements. It was
noted that the POL and Ernst & Young IT teams were working closely on
an agreed plan of further improvements in FY13.
It was recommended that the business insist that Fujitsu provide a
ACTION: Chris Day SAS70/ISA402 certificate to provide a transparent audit of their controls.
d) Counterparty Risk
The auditors recognised management's proactive monitoring of the
Counterparty risks. Further progress had been made during the year.
Angus Grant suggested that some analysis and scenario planning be
undertaken to further understand the risk to the business of any
ACTION: Chris Day _ significant changes to the Euro and the Chairman agreed.
Irrelevant
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POLARC12/6
b)
POLARC 12/7
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~ Chris Day, Paula Vennells, Sarah Hali and Susan Crichton then left
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the meeting.
AUDITOR’S COMMENTS
Alasdair Marnoch asked if there were any other matters of concern
which the external auditor wished to bring to the attention of the
Committee, without the executive team being present.
Angus Grant confirmed that there were no such issues but expressed
Ernst and Young's thanks to the Finance team and other POL
employees for their co-operation and assistance during the audit.
CLOSE
There being no further business, the meeting was then closed.
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