Pottery Barn 2004 Annual Report Download - page 104

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Did we review the fees billed by Deloitte for fiscal 2004?
Yes, we reviewed and discussed the fees billed by Deloitte for services in fiscal 2004, which are described in
detail below. We determined that the provision of non-audit services was compatible with Deloitte’s
independence.
Did we review the company’s audited financial statements for fiscal 2004?
Yes, we reviewed and discussed the company’s audited financial statements for fiscal 2004, and we
recommended to the Board that the company’s audited financial statements be included in the company’s Annual
Report on Form 10-K for fiscal 2004 for filing with the SEC.
Who prepared this report?
Members of the Audit Committee at the end of fiscal 2004, Michael R. Lynch, Adrian D.P. Bellamy and Jeanne
P. Jackson, prepared this report.
AUDIT AND RELATED FEES
During fiscal 2004 and 2003, Deloitte did not perform any prohibited non-audit services for us, including
financial and systems design and implementation.
Audit fees
Deloitte billed approximately $874,300 for fiscal 2004 and $483,200 for fiscal 2003 for professional services to
audit our consolidated financial statements included in our Annual Report on Form 10-K and to review our
condensed, consolidated financial statements included in our quarterly reports on Form 10-Q. Fees for audit
services billed relating to fiscal 2004 also consisted of fees for the attestation of management’s assessment of
internal control as required by the Sarbanes-Oxley Act of 2002, Section 404.
Audit-Related fees
Deloitte billed approximately $97,110 for fiscal 2004 and $88,490 for fiscal 2003 for audit-related services.
Audit-related services included: (i) the audit of our 401(k) plan; (ii) consultation on various accounting matters;
(iii) consultation on our internal controls; and (iv) assistance with our readiness under Section 404 of the
Sarbanes-Oxley Act of 2002.
Tax fees
Deloitte billed a total of $418,369 for fiscal 2004 and $117,264 for fiscal 2003 for tax services. Tax services
included: (i) $20,385 for fiscal 2004 and $20,070 for fiscal 2003 for tax compliance services, which included
consultation for the preparation of our federal, state and local tax returns; (ii) $0 for fiscal 2004 and fiscal 2003
for tax preparation services; (iii) $328,209 for fiscal 2004 and $35,194 for fiscal 2003 for tax consulting services,
which included consultation on sales taxes and enterprise zone credits for fiscal 2004 and consultation on transfer
pricing and other international tax consulting for fiscal 2003; and (iv) $69,775 for fiscal 2004 and $62,000 for
fiscal 2003 for tax software license fees.
In May 2004, the SEC clarified its position on the provision of services with respect to certain contingent,
findings-based and value-added fee arrangements. In response to this clarification, we converted contingent fee
arrangements to “time and material” fee arrangements and made a payment of $180,000 for tax services
performed through 2003. This payment is included in the $328,209 described above.
All Other fees
Deloitte billed $0 for fiscal 2004 and fiscal 2003 for all other services.
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