Carphone Warehouse 2015 Annual Report Download - page 49

Dixons Carphone plc Annual Report and Accounts 2014/15
Corporate Governance
Audit Committee report
47
Chairman’s statement
Introduction
I present to you the report of the Audit Committee, the first of
the merged Carphone Warehouse and Dixons Retail. In this
covering letter I have set out our key areas of activity within
our overarching objective of ensuring that the systems and
controls relating to the financial management and reporting
of Dixons Carphone plc are appropriate.
The Merger has been a significant undertaking. The activities of
integration to create the new organisation have had a major
bearing on our work. We have focused on ensuring that,
notwithstanding the significant change that has been taking
place, the Group has the appropriate internal control and risk
management systems in place to satisfy the financial reporting
and management requirements. We are grateful to our financial
management and internal and external auditors for the
unstinting efforts they have made in this regard.
Merger and induction
All members of the Audit Committee were previously members
of the Carphone Warehouse or Dixons Retail audit committees.
We have therefore had the benefit of significant experience of
the legacy businesses.
We recognised that we needed to inform the committee
members about the entire merged group so embarked upon
an early induction process. This involved sharing papers on
key judgements and significant accounting policies in the
legacy businesses; arranging briefings with management on
topics relating to ‘the other side’; and participating in broader
induction activities on strategy, store visits and the like. Each
committee member was encouraged to request any further
induction information that they required.
Key activities
In addition to assimilating the various sources of information on
the Group, the Audit Committee’s work included the following:
• considered reports by management on how the financial
organisation would be structured and how the financial
reporting would be prepared in the short and longer term;
• debated the accounting and financial reporting for the
Merger, receiving reports from financial management and
the external auditor to support the conclusions reached;
• approved the formation of the merged internal audit group
and the plan of work;
• requested and considered a review by internal audit,
supported by the appropriate commercial management,
on the supplier rebate terms and processes across the
Group; the review concluded that the accounting being
adopted is satisfactory;
• received presentations from management on topics from
the risk agenda including IT strategy (including security and
control) and HR; and
• considered the various corporate transactions that have
taken place in addition to the Merger, the accounting for
these and overall that the financial reporting for the Group
is fair, balanced and understandable.
Looking ahead
It has been a busy year for the Group with much of the
financial reporting priority being on the Merger itself and the
need to maintain a controlled environment across the legacy
businesses.
The Group’s activity will now turn to building the longer term
systems, processes and organisation as well as conforming
with the new requirements of the 2014 UK Corporate
Governance Code and the FRC Guidance on Risk
Management, Internal Control and Related Financial and
Business Reporting. This will include adopting the longer term
viability statement for the first time. The development of the IT
strategy and control framework will remain an area of focus for
the committee in the year ahead.
I will be in attendance at the Annual General Meeting and will
be available to talk to you then. In the meantime if you have
any questions please do get in touch.
Jock Lennox
Chairman of the Audit Committee
16 July 2015