The Group’s risk management processes seek to ensure sustainable development through the conduct of its business in a way which:
The systems are designed to meet the Group’s particular needs and to manage rather than eliminate risks, by their nature, providing reasonable and not absolute assurance against material misstatement or loss. The measures taken, including physical controls, segregation of duties and reviews by management, are considered by the Board to provide sufficient and objective assurance.
The Board maintained its process of hierarchical reporting and review during the year in order to evaluate the effectiveness of the Group’s systems of financial and non-financial controls. A comprehensive series of operating and financial control procedures applying to all businesses has been developed and the Group finance team performs monthly reviews to verify that the businesses are complying with the prescribed operating and financial control procedures. Additionally, the Board reviews risk management arrangements and the Audit Committee receives reports from the external Auditor on matters identified in the course of its statutory audit work. These procedures provide a documented and auditable trail of accountability, the results of which are periodically reviewed for completeness and accuracy.
These procedures also allow for assurances to be provided at each level of management up to the Board. Planned corrective actions are monitored for timely completion. The Board has not identified any failings or weaknesses, or been advised of any failings or weaknesses, which in any case it has determined to be significant during the course of its review of the system of internal control. There were in addition no changes in the Group’s internal controls or financial reporting that have materially affected, or are reasonably likely to adversely affect, the Group’s systems of internal control.
A comprehensive planning system includes detailed reviews at all business and formal reviews and approval of annual plans by the Board. Actual performance is measured on a monthly basis against plan and prior year, including a detailed explanation of significant variances. Revenue, gross margin and cash flow are reported on a daily basis against plan and prior year. The control procedures operated by the Group are designed to ensure complete and accurate accounting for financial transactions and to limit the potential exposure to fraud. Guidelines for capital expenditure and investment appraisal include annual plans, detailed appraisal and review procedures, authority levels and due diligence requirements when businesses are acquired and the acquisition or disposal of a business requiring formal Board approval. These detailed reviews are an important aspect of management reporting in the identification of new and emerging risks.
An ongoing process of risk management and internal control in accordance with the Code has been in place for the financial year under review and up to the date of this report, the careful management of risk is considered to be a key activity in delivering business opportunities.
The ethos of the Group, delegation of responsibility and other control procedures together with accounting policies and procedures are communicated through the Group and employee handbook, supported by the Group’s anti-bribery policy. The integrity and competence of personnel is assessed during the recruitment process and monitored throughout employment.
An executive Risk Committee (comprising the Chief Financial Officer, People Director, Company Secretary, National Health and Safety Manager, and Logistics and Compliance Director) serves as a governance body to provide oversight, review and challenge of the risk management processes, and to confirm that appropriate and proportionate risk management procedures are in place. Investigations are carried out in respect of any accidents or matters warranting further detail. The work of the executive Risk Committee will be reviewed by the Audit Committee going forward.