Carphone Warehouse 2012 Annual Report Download - page 43

Overview Business review Governance Financial statements
Carphone Warehouse Group plc Annual Report 2012 39
In light of the assessments and review undertaken, the Audit
Committee recommended to the Board that Deloitte 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 Audit Committee; and for
which a case‑by‑case decision is required. In order to safeguard
the external auditors’ objectivity and independence, the ratio of
non‑audit fees to audit fees is monitored by the Audit Committee
within an overall limit set by the Board on the recommendation
ofthe Audit Committee.
A statement of fees paid or accrued for services from the external
auditors during the year is set out below:
2012 2011
£m £m
Audit services – statutory audit 0.1 0.1
Tax advisory services 0.6 0.1
Other assurance services 0.2 —
Total 0.9 0.2
Tax and other services in the year ended 31 March 2012 relate
primarily to tax advisory and reporting accountant services associated
with the BestBuyMobile Disposal and the B/C ShareScheme.
In addition to the fees above, the Group’s share of the external auditors’
statutory audit fees for joint ventures was £0.6m (2011:£0.7m) and
the Group’s share of their fees for tax and other services was £0.2m
(2011: £0.1m).
Certain non‑audit services are pre‑approved by the Audit Committee
depending upon the nature and cost of the service. Taxservices
principally comprise 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 Audit Committee hassatisfied itself
that the services undertaken during the year didnot prejudice
theexternal auditors’ independence.
At each of its meetings the Audit Committee reviewed and
considered reports on the status of the Group’s risk management
systems, findings from reviews of internal controls in joint venture
operations, and reports on the status of any weaknesses in internal
controls identified by the internal or external auditors.
RISK MANAGEMENT AND INTERNAL CONTROL
The Company has established a risk management programme
thatassists management throughout the Group to identify,
assessand mitigate business, financial, operational and
compliance risks. The Board views management of risk
asintegralto good businesspractice.
The directors have overall responsibility for the Group’s systems
ofinternal control and for reviewing their effectiveness. The Board
delegates to executive management the responsibility for designing,
operating and monitoring these systems. The systems are based
ona process of identifying, evaluating and managing significant risks
and include the risk management processes set out above.
Executive management of Best Buy Europe and Virgin Mobile France
have direct responsibility for the risk management programmes of
their businesses. Consequently, the Board places reliance as far as
possible on the risk management processes of the joint venture boards.
The Board’s focus is primarily on reviewing the effectiveness of these
processes, more than involving itself in the processes themselves.
Specific controls and processes are detailed further below.
The systems of internal control described above were in place
throughout the year and up to the date of approval of the annual
report and financial statements. The effectiveness of these systems
is periodically reviewed by the Audit Committee in accordance with
the revised guidance in the Turnbull Report. These systems are also
refined as necessary to meet changes in the Group’s business and
associated risks. The systems of internal control are designed to
manage rather than eliminate the risk of failure to achieve business
objectives. They can only provide reasonable and not absolute
assurance against material errors, losses, fraud or breaches
oflaws and regulations.
The Board has conducted an annual review of the effectiveness of
thesystems of risk management and internal control in operation
during the year and up to the date of the approval of the annual
report and financial statements and this was approved by the
AuditCommittee and the Board.