Dave Forsey Chief Executive 19 July 2012 - Sports Direct International

Audit Committee
Attendance at meetings of Committees is set out on the previous
page.
Directors who served on the Committee during the Year were:
Simon Bentley (Chairman)
Dave Singleton
Charles McCreevy
Claire Jenkins 25 May 2011
Simon Bentley, the Chairman of the Audit Committee, is a
Chartered Accountant, and has relevant financial experience and
is supported by the rest of the Committee. All of the members of
the Committee are considered independent.
In addition to the Committee members, the external auditors
attend meetings of the Committee, other than when their
appointment is being reviewed. The Group Finance Director also
attends when required. The Committee meets the auditors in the
absence of Executive management at least twice a year and the
Chairman of the Audit Committee meets with the auditors as and
when it is needed.
The Committee met on three occasions during the Year. The Audit
Committee will meet not less than three times a year: this could be
increased depending on the Group’s requirements.
The Committee’s programme is pre-planned to ensure that each
aspect of its responsibilities is discharged as part of an annual cycle
during the Company’s financial year.
Main responsibilities of the Audit Committee are:
• Assisting the Board with the discharge of its responsibilities in
relation to internal and external audits and controls.
• Agreeing the scope of the annual audit and the annual audit
plan and monitoring the same.
• Reviewing and monitoring the independence of the external
auditors and relationships with them and in particular agreeing
and monitoring the extent of the non-audit work that may
be undertaken.
• Monitoring, making judgements and recommendations on the
financial reporting process and the integrity and clarity of the
Group’s financial statements.
• Reviewing and monitoring the effectiveness of the internal
control and risk management policies and systems in place.
• Monitoring the audit of the annual and consolidated accounts.
What has the Committee done during the year?
• Monitored the effectiveness of internal controls, and also
considered the current economic climate and its likely impact
on the Group.
• Considered the reappointment of the auditors.
• Reviewed accounting policies and the financial statements.
• Approved policy for non-audit work.
On an annual basis, the Audit Committee considers the
reappointment of the auditors and their remuneration and makes
recommendations to the Board. The auditors are appointed each
year at the Annual General Meeting. The Committee considers the
level of service provided by the auditors and their independence.
The external auditors are required to rotate audit partners for the
Group audit every five years and the current lead partner has been
in place for three years.
The Committee has approved a policy on the engagement of
the external auditors for non-audit work, in order to ensure that
the objectivity of the auditor’s opinion on the Group’s financial
statements is not or may not be seen to be impaired, and has
established a process to monitor compliance.
The policy identified three categories of potential work.
Auditor Authority Type of Work
Work the auditor may not
provide as completing the
task could create a threat to
independence.
Work the auditor may
undertake with the consent
of the Chairman of the Audit
Committee.
Work the auditor may
undertake
The work includes the
preparation of accounting
entries or financial statements,
IT systems design and
implementation, management
of projects and tax planning
where the outcome would
have a material impact on the
financial statements or where
the outcome is dependent
upon accounting treatment.
Corporate Finance services,
acquisition due diligence,
management consultancy
and secondment of staff other
than for the preparation of
accounting entries or financial
statements.
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There are services that the
auditors may provide as the
work is clearly audit related
and there is no potential threat
to independence, including
regulatory reporting and acting
as reporting accountants.
The Company is satisfied
that its policy falls within the
requirements of the Auditing
Practices Board.