The Directors acknowledge their responsibility for the Group’s systems of internal control, which are designed to safeguard the assets of the Group and to ensure the reliability of financial information for both internal use and external publication and to comply with Committee guidance. The primary internal control procedures comprise the formal delegation of authorities by the Board to the executive management, and then a Control Framework with number of subsidiary mechanisms including inter alia a financial authorities manual, tendering procedures and various financial and operational policies and procedures.
The control processes are complemented by effective monitoring and reporting mechanisms, not least of which are the annual reports to and reviews by the Audit Committee. The Directors are responsible for the implementation and review of the Group’s system of internal control appropriate to the various business environments in which it operates. The system has been designed to enable the Group to identify, evaluate and manage significant risks faced by the Group and includes the safeguarding of assets from inappropriate use or loss or fraud, the identification and management of liabilities, the maintenance of proper records to ensure quality internal and external reporting and compliance with the applicable laws and regulations governing its conduct of business.
The key internal control and risk management measures that the Directors have implemented in the parent and its subsidiary undertakings in relation to the financial reporting process and the process for preparing the consolidated financial statements are as follows:
The control processes are complemented by effective monitoring and reporting mechanisms, not least of which are the annual reports to and reviews by the Audit Committee. The Directors are responsible for the implementation and review of the Group’s system of internal control appropriate to the various business environments in which it operates. The system has been designed to enable the Group to identify, evaluate and manage significant risks faced by the Group and includes the safeguarding of assets from inappropriate use or loss or fraud, the identification and management of liabilities, the maintenance of proper records to ensure quality internal and external reporting and compliance with the applicable laws and regulations governing its conduct of business.
The key internal control and risk management measures that the Directors have implemented in the parent and its subsidiary undertakings in relation to the financial reporting process and the process for preparing the consolidated financial statements are as follows:
- Risk assessment procedures;
- Employment of competent persons;
- Use of an appropriate system for processing transactions;
- Consideration of appropriateness of accounting policies through the Audit Review Papers;
- Segregation of duties, authorization limits and independent review;
- Monthly control reconciliations;
- Management review of key judgments and estimates;
- Use of specialists, e.g. for valuations, as appropriate;
- Budgetary control, variance analysis and monthly performance reviews;
- An internal audit function;
- A properly constituted and effective Audit Committee; and
- Regular communication with external auditors.
Any system of internal control can provide only reasonable and not absolute assurance that material financial irregularities will be detected or that the risk of failure to achieve business objectives is eliminated. The Directors, having reviewed the effectiveness of the system of internal financial, operational and compliance controls and risk management, consider that the system operated effectively throughout the financial year and up to the date that the financial statements were signed.