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42
MARKS AND SPENCER GROUP PLC
DIRECTORS’ REPORT: GOVERNANCE
ACCOUNTABILITY
AUDIT COMMITTEE
REPORT
INTRODUCTION
As Chairman of the Audit Committee, I am
pleased to present the Audit Committee’s
report for the year ended 2 April 2016.
Over the following pages we share
discussions from the boardroom and
provide insight into the workings of the
Audit Committee and its activities in
the year, as well as update you on the
e ectiveness of our statutory auditor
(Deloitte) and the fees they received for
non-audit work undertaken. It provides an
overview of the signifi cant issues the Audit
Committee assessed and the Committee’s
opinion on the Annual Report when viewed
as a whole, including how it has assessed
the narrative reporting in the front of the
report to accurately refl ect the fi nancial
statements in the back.
This report also shares some of the insight
we received from the executive updates
presented to us from across the business.
These continue to provide the Committee
with real insight into the business’s
challenges and its aspirations. These also
tell us how the risks are being managed and
mitigated throughout the organisation,
as well as helping the Committee
members understand the progress being
made towards the strategic objectives.
The updates provide us with an opportunity
to challenge, discuss and debate with the
presenters whilst sharing our experience
and providing an independent perspective.
Looking forward to the next 12 months,
the Committee will continue to focus on
the audit, assurance, and risk processes
within the business, as well as monitor
changes in EU and UK regulation.
EFFECTIVENESS OF THE AUDIT COMMITTEE
As part of the annual review of the
e ectiveness of the Committee,
the expertise of the members is
considered and reviewed. The Board
is satisfi ed that the Committee
members bring a wide range and
depth of fi nancial and commercial
experience across various industries,
and that Andy Halford meets the
specifi c requirement for recent
and relevant fi nancial experience.
AUDIT COMMITTEE ACTIVITY
> Remained focused on the audit, assurance
and risk processes within the business,
and maintained oversight of fi nancial
and other regulatory requirements.
> Reviewed the Group’s system of internal
control and risk management, and any
changes in accounting policies and
impact on our fi nancial statements.
> Discussed and reviewed the non-
underlying items that may impact
the performance of the business.
> Reviewed the process and timeline
for assessing the e ectiveness of the
external auditor.
> Provided oversight of particular
business risks including International
retail and ethical sourcing.
> Supported the work to draft the
defi nitions of risk appetite for the business.
> Reviewed the design and scope of the
assurance plan, with particular focus
on key strategic priorities.
> Received and discussed specifi c
business presentations relating to
risks within the Group Risk Profi le.
> Reviewed formal announcements on
the Group’s fi nancial performance,
including an assessment of the
estimates and judgements.
Some members of senior management
are invited to attend the Audit Committee
meeting to provide technical business
information as needed. Therefore, we
allocated specifi c time for Committee
members to meet without management
present, prior to each meeting. At the end
of each Committee meeting we meet
separately with the lead audit partner from
Deloitte and the Head of Internal Audit &
Risk, to provide an opportunity to discuss
matters without executive management
being present. In addition, I regularly hold
separate one-to-one meetings with the
Chief Finance O cer, Director of Group
Finance, Head of Internal Audit & Risk,
other senior management, and with the
lead audit partner. These are usually before
Committee meetings as this enables me
to better understand the issues and any
areas of concern, and to allow su cient
time for meaningful discussion at the
subsequent meeting.
The Committee continue to challenge the
risk and assurance programme, ensuring
it is embedded throughout the business.
ANDY HALFORD CHAIRMAN OF THE AUDIT COMMITTEE
MEMBER ATTENDANCE MEMBER
SINCE
1 Jan 2013
Andy Halford (Chairman) 5 5 100%
5 5 100%
4 5 80%
1 1 100%
5 5 100%
11 M a r 2014
Alison Brittain
4 Mar 2015
Miranda Curtis
1 Jun 2007
Martha Lane Fox
(Retired 2 April 2016)
NUMBER OF
MEETINGS
ATTENDED
MAXIMUM
POSSIBLE
MEETINGS
%
OF MEETINGS
ATTENDED
3 Feb 2016
Andrew Fisher
(Appointed 1 December 2015)