The Audit Committee consists of four independent Non-Executive Directors. It is chaired by Phil Bentley, who is a qualified accountant and the Group Finance Director of Centrica plc and as such is considered to be suitably qualified to be the Audit Committee Chairman. He, John Nelson and Michael Hepher served for the whole year. Margaret Salmon joined the Committee in September 2005.
At the invitation of the Committee, the Chairman of the Board and the Group Chief Executive regularly attended meetings, as did the Group Finance Director, the Head of Internal Audit and the external auditors. There were also regular private meetings with the external and internal auditors at which management was not present.
The Committee provides an independent overview of the effectiveness of the Group’s internal control systems and financial reporting processes. Its Terms of Reference are available at www.kingfisher.com. The principal responsibilities include monitoring the integrity of the financial statements, including a review of the significant financial reporting judgements contained in them, and overseeing the work of both the internal and the external auditors.
In 2005/06 there were five Committee meetings, with four planned for 2006/07. Should the need arise, ad-hoc meetings are held. A forward agenda covering the whole year was used to ensure that the Committee’s Terms of Reference were fully addressed.
As part of the Board effectiveness evaluation, the Audit Committee was reviewed by Independent Audit Limited, who expressed the opinion that the Committee had fulfilled all of its responsibilities under its Terms of Reference and the Combined Code.
During the year and as part of its normal programme, the Committee has considered and reviewed a number of matters, some of which were:
- IT security
- The systems and processes around stock management at B&Q UK
- Internal audit, which has been strengthened through its continued development as a globally integrated function
- A revised policy on the use of the external auditors for non audit work, which was recommended to and approved by the Board and can be obtained at www.kingfisher.com
20 March 2006