NYSE Disclosure
On November 16, 2004, Signet moved its listing of American Depositary Shares to the New York Stock Exchange (NYSE), and became subject to NYSE listing rules and corporate governance standards. Under those rules, Signet must disclose any significant ways in which its corporate governance practices differ from those required by the NYSE listing standards. The Board is committed to achieving a high level of corporate governance and monitor compliance with such rules as applicable to foreign registrants. Signet complies with the Combined Code, the statement of UK corporate governance standards and its practices do not differ significantly from the corporate governance standards set forth in section 303A of the NYSE Listed Company Manual, with the following exceptions:
Nominating Committee - NYSE Rule 303A.04 requires all members of the nominating committee to be independent, whereas the Combined Code and the terms of reference for Signet’s Nomination Committee only require a majority of such members to be independent. As is normal practice in the UK, the Chairman of the Board is a member of the Nomination Committee, and he is not independent under the Combined Code. The other members of the Nomination Committee are independent.
Corporate Governance Oversight - NYSE Rule 303A.04 also requires that the nominating committee be responsible for corporate governance oversight. The terms of reference of Signet’s Nomination Committee, which follow the requirements of the Combined Code, do not require the committee to monitor corporate governance principles. Signet’s Board, which is not comprised entirely of independent directors, is responsible for overseeing the Group’s compliance with corporate governance standards.
Sarbanes-Oxley Act of 2002
As a Foreign Private Issuer, Signet is required to comply with Section 404 of the Sarbanes-Oxley Act of 2002 (“the Act”) for fiscal years ending on or after 15 July 2006. The primary requirement of the Act is that management perform appropriate due diligence to conclude on the design and operating effectiveness of key internal controls over financial reporting.
In 2005/06 management assessed the state of readiness for Sarbanes-Oxley compliance by performing a detailed review of the design of key controls throughout all process streams in scope. This involved the US, UK and Group functions and included an extensive review of IT general controls across the organisation. In addition to the business processes review, management has performed a comprehensive analysis of entity wide controls, utilising best practice templates, sourced from external advisors, to ensure adequate coverage of the Committee of Sponsoring Organisations (“COSO”) Risk and Control framework.
In addition to the detailed design work during 2005/06, Signet’s management has undertaken limited operational testing of those key controls that have passed the initial design assessment.
The Group’s external auditors have been closely involved in the project and have executed walkthrough tests of the design of all key controls.