Audit Committee report
The Audit Committee is appointed by the Board from the non-executive directors of the Company. The terms of reference are regularly reviewed by the Audit Committee and are then referred to the Board for approval. These are available at www.kingfisher.com.
During the year, the Chairman of the Committee was Phil Bentley. View full details of Committee membership, the qualifications of Committee members and the number and attendance of Committee meetings.
All members of the Committee receive appropriate induction, which is in addition to the induction which all new directors receive. The induction programme covers an overview of the business, its financial dynamics and risks. New Committee members also obtain access to its operations and staff, and all members of the Committee may undertake ongoing training as required.
The Audit Committee has an agenda linked to events in the Group’s financial calendar. 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, Audit and Risk Management Director, Group Financial Controller and the external auditors. Private meetings were also held with the external and internal auditors at which management were not present.
A summary of the role of the Audit Committee is set out here. During the year ended 30 January 2010, the Committee:
- agreed the terms, areas of responsibility and scope of the audit work to be undertaken by the external auditors and agreed a programme of work for the Company’s Internal Audit function;
- considered the Internal Audit function’s reports on the effectiveness of internal controls, significant frauds and any fraud that involved management or employees with a significant role in internal controls;
- monitored progress on the programme announced during 2008/09 to standardise and improve control processes in a number of key areas including the B&Q China business unit and IT systems;
- received reports from the external auditors on their findings including any control observations relevant to their audit work;
- reviewed the annual and interim financial statements, together with the reports received from the external auditors on their audits;
- considered regular reports on the output from the Group-wide process used to identify, evaluate and mitigate risks;
- reviewed and approved the scope of non-audit services provided by the auditors to ensure that there was no impairment of independence and objectivity, and subsequently monitored the non-audit work performed to ensure it was within policy guidelines;
- received presentations from the senior management of all operating companies and certain key Group functions;
- undertook the annual review of the Committee’s effectiveness;
- reviewed and updated the policy and process enabling employees within the Group to make confidential disclosures about suspected financial and operational improprieties;
and in particular the Committee:
- reviewed the services of the external auditor, PricewaterhouseCoopers LLP, and following a tender process, recommended the appointment of Deloitte LLP to serve as the Company’s auditor. The review included an assessment of the qualifications, expertise and resources of the external auditors.
As a result of its work during the year, the Audit Committee has concluded that it has acted in accordance with its terms of reference and has ensured the independence and objectivity of the external auditors.
After seven years on the Board, Phil Bentley retired as a non-executive director on 17 March 2010 and the Committee thanks Phil for his invaluable contribution over these years. Andrew Bonfield, who joined the Board as a non-executive director on 11 February 2010, has succeeded Phil Bentley as Chairman of the Committee. Both Phil Bentley and Andrew Bonfield are chartered accountants and have recent and relevant financial experience.
The Chairman of the Audit Committee will be available at the Annual General Meeting to answer any questions about the work of the Committee.
For and on behalf of the Audit Committee
Chairman of the Audit Committee
24 March 2010