Audit Committee report
The Audit Committee comprises Adrian Martin (Chairman) and Keith Edelman. Meetings of the Audit Committee are also attended when appropriate by the Chief Executive and the Group Chief Financial Officer as well as the Group's external auditors. The Board has satisfied itself that at least one member of the Committee has recent and relevant financial experience and is confident that the collective experience of Committee members enables it to be effective.
The Audit Committee's principal responsibilities are:
- to monitor the integrity of the Group's financial statements and any other formal announcements relating to its financial performance;
- to keep under review the effectiveness of the Group's internal controls and risk management systems;
- to make recommendations to the Board in relation to the appointment of the external auditors and oversee the relationship with the external auditors; and
- to monitor the statutory audit of the annual and consolidated accounts.
The full terms of reference of the Audit Committee, which comply with the UK Corporate Governance Code 2010, are available on the Group's website at www.safestore.com.
During the year the Audit Committee met three times, the meetings being attended, where appropriate, by the Group Chief Executive, the Group Chief Financial Officer, the Company Secretary, as well as the Group's external auditors.
During the period under review, the Audit Committee has:
- assessed the qualifications, expertise and resources of the external auditors and their objectivity and independence and the relationship with the external auditors as a whole, including the provision of any non-audit services;
- assessed the effectiveness of the external audit process;
- considered whether it was appropriate to establish an internal audit function;
- considered the Group's procedures by which employees may, in confidence, raise concerns about improprieties in matters of financial reporting or other matters; and
- reviewed announcements relating to the Group's financial performance during the financial year.
The Audit Committee assesses and reviews on a regular basis the independence of the external auditors. In forming its opinion of the independence and objectivity of the external auditors, the Audit Committee takes into account the safeguards operating within PricewaterhouseCoopers LLP in respect of any non-audit services provided.
The Audit Committee considers on a case-by-case basis whether or not the external audit firm should be permitted to carry out other services for the Group. The two key principles applied are: firstly, whether the provision by the auditors of that service would compromise their independence in any material way; and secondly, whether it would otherwise be inappropriate for them to be engaged, for example in relation to any material accounting irregularities or significant fraud that had previously not been detected during an audit carried out by that firm. Where non-audit services are provided, the fees are based on the work undertaken and are not success related.
Regard is paid to the nature of, and remuneration received for, other services provided by PricewaterhouseCoopers LLP to the Group and, inter alia, confirmation is sought from them that the fee payable for the annual audit is adequate to enable them to perform their obligations in accordance with the scope of the audit.
PricewaterhouseCoopers LLP have been the Company's auditors since 2003. The Audit Committee considers that the relationship with the auditors is working well and remains satisfied with their effectiveness and hence has recommended to the Board that they are proposed for re-appointment. Accordingly, it has not considered it necessary to date to require the firm to tender for the audit work. There are no contractual obligations restricting the Company's choice of external auditors.
In respect of the year ended 31 October 2011, the auditors' remuneration comprised £266,000 for audit work and £129,000 for other work, principally relating to taxation compliance and advisory services.
This report was approved by the Audit Committee and signed on its behalf by:
A H Martin
Chairman of the Audit Committee
26 January 2012