Carphone Warehouse 2007 Annual Report Download - page 27

The Senior Independent Director also met with the Non-Executive Directors, in
the absence of the Chairman, to assess the Chairman’s effectiveness, having
first reviewed the results of a performance evaluation questionnaire completed
by all the Directors apart from the Chairman. The Board is of the opinion that
the Chairman had no other significant commitments during the period that
would have affected his performance in his role.
External appointments
The Board supports Executive Directors taking up Non-Executive Directorships
as part of their continued development, and the Board believes that this will
ultimately benefit the Company. Further details are provided in the
Remuneration Report on pages 25 to 30.
Board Committees
There are five key Board Committees: Audit, Remuneration, Nomination,
Insurance Compliance and Telecoms Regulatory, the last two Committees
having been created during the period. The Committees are provided with
sufficient resources via the Company Secretary and, where necessary, have
direct access to independent professional advisors to undertake their duties.
Audit Committee
The Committee currently comprises the following Independent Non-Executive
Directors: Adrian Martin (Chairman), Sir Brian Pitman, Baroness Morgan,
David Mansfield, Steven Esom and, following his appointment on 24 April
2007, David Grigson. Both Adrian Martin and David Grigson are deemed by
the Board to be the Committee members with recent and relevant financial
experience. All of the Committee members have extensive commercial
experience. The Committee met formally four times during the period.
All members attended each meeting, with the exception of Sir Brian Pitman
who was absent from the meeting on 26 October 2006 due to a prior
engagement that could not be changed and David Grigson, who was
only appointed on 24 April 2007.
The Chairman of the Committee updates the Board on any significant issues
that may have arisen at the Board meeting following each Committee meeting.
During the period, all the requirements of the Code in respect of the Committee
were met. The work undertaken by the Committee is described within the
following sections of this Report.
The Group’s Chief Financial Officer and other senior management attend
Committee meetings by invitation of the Committee. Representatives of the
Company’s external auditors and the Group Director of Risk also attend these
meetings by invitation of the Committee. The external and internal auditors
have direct access to the Committee during formal meetings and time is set
aside for them to have private discussions with the Committee, in the absence
of management.
The Committee’s terms of reference, which are available on request from the
Company Secretary and are published on the Company’s website, comply with
the Code. During the period, the formal calendar of items considered at each
Audit Committee meeting within each annual cycle embraced the Code
requirements to:
• monitor the integrity of the financial statements of the Company, and any
formal announcements relating to the Company’s financial performance,
including reviewing significant financial reporting judgements contained
in them;
• review the Company’s internal financial controls and its internal control and
risk management systems and to make recommendations to the Board;
• review the Company’s arrangements by which employees may raise
concerns in confidence;
• monitor and review the effectiveness of the Company’s internal audit function;
• make recommendations to the Board in relation to the appointment,
re-appointment and removal of external auditors and to approve
their remuneration and terms of engagement;
• 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:
2007 2006
£’000 £’000
Audit services:
– statutory audit 1,375 1,115
– non-statutory audit –14
Tax services:
– compliance services –7
– advisory services 117 115
Other services 53 22
Total 1,545 1,273
Certain non-audit services are pre-approved by the Committee depending
upon the nature and size of the service. 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
The Committee currently comprises the following independent Non-Executive
Directors: Sir Brian Pitman (Chairman), Baroness Morgan, David Mansfield,
Steven Esom, Adrian Martin, and, following his appointment on 24 April 2007,
David Grigson.
The Committee met formally five times during the period and each member,
except David Grigson who was only appointed on 24 April 2007, attended
every meeting with the exception of Steven Esom who was absent from the
meeting on 26 May 2006 and Baroness Morgan who was absent from the
meeting on 28 September 2006. Both absences were due to prior
engagements that could not be changed. The Company Secretary ensures that
all Committee papers are sent out to non-attending Directors and that, where
possible, any comments they have are received beforehand so that they can
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Governance Financial Statements
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