91¸£ÀûÉç World Service is responsible for commissioning and scheduling its own programmes and for making programmes for its language
services, but purchases English language programme-making and technical and support services from other divisions of the 91¸£ÀûÉç (the
Supplier Divisions). 91¸£ÀûÉç World Service also receives services from and supplies services to the 91¸£ÀûÉç’s commercial subsidiaries (the
Subsidiaries).
It was agreed by a joint Foreign and Commonwealth Office (FCO)/91¸£ÀûÉç World Service Working Group that the 91¸£ÀûÉç would draw up
guidelines to govern the trading relationship between 91¸£ÀûÉç World Service and other parts of the 91¸£ÀûÉç, in order to ensure that 91¸£ÀûÉç
World Service maintains its distinctive voice and to preserve the clear separation between Grant-in-Aid and licence fee income.These
Trading Protocols were approved by the Governors’ Fair Trading Compliance Committee (FTCC) in 1997. Each of the Supplier Divisions
then drew up detailed agreements with 91¸£ÀûÉç World Service, specifying:
- the services to be provided
- criteria to ensure the quality of the services
- the cost of the services
The FTCC is responsible for monitoring and reviewing compliance with the Trading Protocols.The FTCC receives reports from
management on the effectiveness of the systems and procedures in place to ensure compliance with the Trading Protocols.
KPMG LLP (the external auditors) have reviewed a summary of the value of transactions and the related cash flows which have taken
place during the year between 91¸£ÀûÉç World Service and the Supplier Divisions and Subsidiaries. KPMG LLP have reported to the
Governors that, in their opinion, the information contained in the summary of transactions for the year ended 31 March 2006 has been
accurately extracted from the books and records of 91¸£ÀûÉç World Service and the Supplier Divisions and Subsidiaries, and has been
properly prepared on the bases of cost allocation and apportionment methods set out in the agreements between 91¸£ÀûÉç World Service
and the Supplier Divisions and Subsidiaries and, on this basis, there has been no material cross-subsidy between Grant-in-Aid and licence
fee funds or between Grant-in-Aid and the 91¸£ÀûÉç’s commercial subsidiaries.
Following regular reports to the FTCC by the Head of Fair Trading, and internal and external auditors, the Governors are satisfied that:
- the Trading Protocols reflect the requirements of the FCO/91¸£ÀûÉç World Service Working Group
- agreements are in place which are consistent with the Trading Protocols
- there has been no material cross-subsidy between Grant-in-Aid and licence fee funds or between Grant-in-Aid and the 91¸£ÀûÉç’s
commercial subsidiaries
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Reports on compliance and regulatory matters |
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