RELATIONSHIP BETWEEN THE AUDIT COMMITTEE AND GROUP RISK COMMITTEE.


  • The Audit Committee, in conjunction with the Group Risk Committee, assists the Board in ensuring the Group operates within a framework of prudent and effective controls that allows risk to be identified, assessed and managed.

  • The Chairman of the Audit Committee is a member of the Group Risk Committee. The Chairman of the Group Risk Committee is a member of the Audit Committee.

  • The areas of responsibility of each of the Audit Committee and the Group Risk Committee are defined. The Group Risk Committee provides guidance to the Board on risk management policies and procedures and what constitutes acceptable risk taking, while the Audit Committee looks at the adequacy and effectiveness of the internal control framework encapsulated within those policies and procedures, including financial control.

  • There is active consideration of areas of potential overlap between the Committees and where it would be helpful for an issue considered by one committee to also be considered by the other. The Audit Committee receives input from the Group Risk Committee in the preparation of the internal audit programme and external audit plan.

  • The work of the Audit Committee and the Group Risk Committee assists the Board in discharging its overall responsibility for the Group’s internal control system and for monitoring its effectiveness. Implementation and maintenance of the internal control systems are the responsibility of the executive directors and senior management. Where failings or weaknesses have been identified, actions have been taken to remedy those failings or weaknesses. The Group’s control policies and procedures, which are in accordance with Turnbull Guidance, have been in place during 2011 and up to the date this report was approved.

  • The UK Corporate Governance Code requires directors to review and report to shareholders on the Group’s internal control system, which includes financial, operational and compliance control, and risk management. The system of internal control is designed to manage rather than eliminate risk and can only provide reasonable and not absolute assurance against material loss. The internal control and risk management systems cover the Company’s financial reporting process and the Group’s process for preparation of consolidated financial statements.

  • For 2011, the Board was able to conclude, with reasonable assurance, that appropriate internal control and risk management systems were maintained throughout the year.

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