Marks and Spencer 2013 Annual Report Download - page 54

Governance Marks and Spencer Group plc Annual report and financial statements 2013 52
Audit Committee continued
Plan A – Annual
–reviewed progress made over the last year and the business’
ongoing objectives. The number of objectives has been
increased from 100 to 180, 139 of these have now been
achieved;
–discussed commitments unlikely to be achieved and the
external factors impacting these;
–discussed the business’ improvements in fuel efficiency and
the milestones delivered to become Carbon Neutral;
–received an update on the UK sustainable learning stores,
including Cheshire Oaks;
–reviewed the effectiveness of engaging consumers in Plan A;
–updated on our collaboration with the World Economic Forum
(WEF) consumer industries group, and provided an overview
on how we are actively involved in re-framing the consumer
agenda around sustainable consumption;
–discussed progress of the External Sustainable Retail
Advisory Board and its new appointments (Prof. Yunis and
Joanna Lumley); and
–updated on the significant improvement in our clothing
recycling programme (Shwopping) and the engagement of
Joanna Lumley as our global ambassador for Plan A.
Multi-channel
–updated on the Multi-channel Foundation Programme, the
complexities of integrating legacy systems and the overriding
focus on the customer and the user experience through
design and build process;
–explored how the IT Strategy was educating the business in
the practicalities of multi-channel trading;
–updated on the key risks to the project, security and the
testing process and received an overview of how these are
being managed;
–updated on how the project compares to competitor and
market activity; and
–debated operating concerns with the current platform.
HR shared services
–updated on the new people system integration, including
online payslips, salary exchange, centralised HR, ways of
working and staff roster management;
–reviewed target completion dates and opportunities regarding
our international operations;
–reviewed the internal audit report regarding implementation
and embedding of the new systems within both head office
and store environments; and
–discussed the positive metrics and risk planning for the new
people system project, especially given the significant number
of individual transactions involved.
Customer services
–received an overview of the customer experience, the
operating model, service style and customer contact
management
–updated on improvements in service levels, with particular
focus on furniture delivery where the supplier, the packaging
and the communication had all been changed resulting in a
substantial reduction in refunds in this area;
–reviewed risks and mitigating actions including training, clear
reporting and measurement and escalation procedures; and
–discussed future plans with particular focus on support for the
Multi-channel Foundation Programme.
Food pricing and promotions
–updated on the changes to the Food group covering business
guidelines, processes and methods of monitoring;
–updated on the progress of the Simply M&S range introduced
in May 2012;
–updated on the promotional strategy, brand impact and
customer perceptions;
–reviewed the findings of the internal audit report; and
–discussed overall food safety and product quality and the
development of healthy food ranges, while ensuring value is
maintained for the customer.
On behalf of the Board, the Audit Committee examines the
effectiveness of the Group’s:
–systems of internal control, covering all material controls,
including financial, operational and compliance controls and
risk management systems, primarily through approving the
internal audit plan and reviewing its findings, reviews of the
annual and half year financial statements and a review of the
nature, scope and reports of external audit;
–management of risk by reviewing evidence of risk
assessment activity and an internal audit report on the
process; and
–action taken or to be taken to manage critical risks or to
remedy any control failings or weaknesses identified.
The Audit Committee has completed its review of the
effectiveness of the Group’s systems of internal control during
the year and up to the date of this Annual Report, in
accordance with the requirements of the revised Turnbull
Guidance on Internal Control, published by the FRC. It
confirms that no significant failings or weaknesses were
identified in the review for 2012/13. Where areas for
improvement were identified, processes are in place to ensure
that the necessary action is taken and that progress is
monitored.
Furthermore, the Committee considers the Company has
adopted appropriate accounting policies and where
necessary, made appropriate estimates and judgements. The
Committee also believes that this Annual report and accounts
provides the information necessary for shareholders to
assess the Company’s performance, business model and
strategy.
The key features of the Group’s internal control and risk
management systems that ensure the accuracy and reliability
of financial reporting include: clearly defined lines of
accountability and delegation of authority, policies and
procedures that cover financial planning and reporting,
preparing consolidated accounts, capital expenditure, project
governance and information security, and the Group’s Code
of Ethics and Behaviours.
Assurance