Carphone Warehouse 2006 Annual Report Download - page 28

•review and monitor the external auditors’ independence and objectivity
and the effectiveness of the audit process, taking into consideration
relevant UK professional and regulatory requirements; and
•review the Company’s policy on the engagement of the external auditors
to supply non-audit services. In this context the Committee’s remit
requires it to report to the Board identifying any matters in respect of
which it considers that action or improvement is needed and to make
recommendations as to the steps to be taken.
In the light of the assessments and review undertaken, the Committee
recommended to the Board that Deloitte & Touche LLP be retained
as auditors of the Company. This recommendation was endorsed by
the Board.
The policy relating to the provision of non-audit services by the external
auditors specifies the types of work from which the external auditors are
excluded; for which the external auditors can be engaged without referral
to the Committee; and for which a case-by-case decision is required. In
order to safeguard the auditors’ objectivity and independence, the ratio
of non-audit fees to audit fees is monitored by the Committee within an
overall limit set by the Board on the recommendation of the Committee.
A statement of fees paid or accrued for services from the external auditors
during the period is set out below:
2006 2005
£’000 £’000
Audit services:
– statutory audit 1,115 836
– non-statutory audit 14 98
Further assurance services –15
Tax services:
– compliance services 710
– advisory services 115 150
Other services 22 54
Total 1,273 1,163
Certain non-audit services are pre-approved by the Committee depending
upon the nature and size of the service. Non-statutory audit services during
the period primarily related to work undertaken in respect of International
Accounting Standards. Tax services comprise compliance services and
technical advice associated with relevant UK and international fiscal laws
and regulations and, in particular, assessment of the potential implications
of proposed corporate transactions or restructuring.
Having undertaken a review of the non-audit related work the Committee
has satisfied itself that the services undertaken during the period did not
prejudice the external auditors’ independence.
At each of its meetings the Committee reviewed and considered reports
from the Group Director of Risk on the status of the Group’s risk
management systems, findings from the internal audit function concerning
internal controls, and reports on the status of any weaknesses in internal
controls identified by the internal or external auditors.
Remuneration Committee
Prior to the changes to the Board detailed earlier in this Report, the
Committee comprised the following independent Non-Executive Directors:
John Gildersleeve (Chairman), Sir Brian Pitman, Martin Dawes and Adrian
Martin. The Committee currently comprises the following independent
Non-Executive Directors: Sir Brian Pitman (Chairman), Adrian Martin,
David Mansfield, Steven Esom and Sally Morgan.
The Committee met formally five times during the period and each member,
whilst being a Director, attended every meeting with the exception of Martin
Dawes who was absent on the 17 May 2005, Sir Brian Pitman who was
absent on the 26 May 2005 and Steven Esom who was absent from the
meeting on 30 March 2006. All absences were due to prior engagements
that could not be changed. Other Directors, the Company Secretary, the
Group Director of Human Resources, the Head of Compensation and
Benefits and advisers attended by invitation only. A detailed description
of the Committee’s remit and work during the period is contained in the
Remuneration Report on pages 26 to 32. Its terms of reference comply with
the Code, are available on request from the Company Secretary and are
published on the Company’s website. The Chairman of the Committee
updates the Board following each Committee meeting.
Nomination Committee
Prior to the changes to the Board detailed earlier in this Report, the
Committee comprised three independent Non-Executive Directors: Sir
Brian Pitman (Chairman), John Gildersleeve, Martin Dawes and David
Ross. The Committee currently comprises the following Non-Executive
Directors: John Gildersleeve (Chairman), Sir Brian Pitman, Adrian Martin
and David Ross. The Committee meets as and when required and met
five times formally during the period. Every member, whilst being a Director,
attended these meetings with the exception of David Ross who was
absent on 29 March 2006 because he had a prior engagement that
could not be changed.
The Committee’s terms of reference comply with the Code and are
available from the Company Secretary on request and are published on
the Company’s website. The Committee is responsible for succession
planning at Board level, overseeing the selection and appointment of
Directors, regularly reviewing the structure, size and composition of
the Board and making its recommendations to the Board. It assists in
evaluating the commitments of individual Directors and the balance of
skills, knowledge and experience on the Board.
During the period, the work of the Committee reflected succession planning
and a consideration of appropriate appointments to the Board. Spencer
Stuart was used as an external search consultancy for the appointment
of future independent Non-Executive Directors and their work was
carried out in conjunction with potential candidates sourced by the
Group directly. The Committee recommended that Sally Morgan, David
Mansfield and Steven Esom be appointed as independent Non-Executive
Directors. The work of the Committee in respect of the appointment of
John Gildersleeve as Non-Executive Chairman was noted in last year’s
Annual Report.
The Committee did not use an external search consultancy nor open
advertising in respect of the appointments of David Goldie and Andrew
Harrison, although the Committee did follow the other principles of the
Code in leading and making recommendations to the Board. David Goldie
and Andrew Harrison were both existing members of senior management
Corporate Governance continued
The Carphone Warehouse Group PLC Annual Report 2006
24