Internal Control
The directors acknowledge that they have
overall responsibility for the Group systems of internal control
and for reviewing the effectiveness of these controls.
The Board has taken into account the relevant
provisions of the Combined Code, the Turnbull report and the
Listing Rules and an ongoing process has been established for
identifying, managing and evaluating the risks faced by the
Group.
The systems are designed to manage rather than
eliminate risk of failure to achieve the Group’s objectives.
The systems provide reasonable, not absolute, assurances against
material mis-statement or loss. Such systems are reviewed by
the Board to deal with changing circumstances.
The Group does not have an internal audit
function, although this is continually under review by the Board
and Audit Committee. The Board is presently of the view that
having reviewed considered the current control environment it is
still adequate given the Group’s size and range of businesses.
The Group has a Group finance function that
reports to the Group Finance Director and is independent of the
business units to ensure objectivity and control when preparing
Group financial information.
The Group finance function undertakes
financial reviews of the regional finance functions on an ad hoc
basis and provides technical and commercial support when
required.
Assessment of Business Risk
A system of business risk identification, assessment and
evaluation has been in place during the year within the management
process throughout the Group through a formal risk management
framework led by the Group Director of Risk Management. The Board
regularly reviews strategic risks.
Control Environment
The Group's operating procedures include a comprehensive system
for reporting financial and non-financial information to the Board,
including:
-
A review of monthly management accounts at Group and operational
level, including financial performance, together with balance sheet
and cash flow analysis which are reported against budgets,
forecasts and prior year, with major variances explained; and
Control Procedures
Detailed operational procedures that embody key controls have
been developed for each of the Group's businesses. The implications
of change in law and regulations are taken into account within
those procedures.
Monitoring Process
There are clear procedures for monitoring the system of key
controls. The significant components are:
-
Cyclical and random reviews of operational and financial
controls by the Director of Risk Management, the Group’s quality
managers, the Head of IT, senior finance managers and reviews
by the Group finance team; and
The Board confirms that it has considered the effectiveness of
the Group’s system of internal controls described above for the
financial year.