The Committee considers control environment issues, root causes and management’s responses and follow up activities and is assisted by the work of both internal audit and the external auditor.
Given the level of organisational change during the year, with the appointment of a new group chief financial officer and group financial controller and the integration programme creating the LGAS business division, the Committee has sought to understand the impact of these changes on internal control and risk management. The Committee has been assured that this change has been managed to avoid detrimental impact on the Group’s internal control and risk management framework through the reports it has received from the impacted areas.
In conjunction with the Group Risk Committee, the 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. 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 these. The Group’s control policies and procedures, which are in accordance with Turnbull Guidance, have been in place during 2013 and up to the date this report was approved. The Group’s 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 2013, the Board was able to conclude, with reasonable assurance, that appropriate internal control and risk management systems were maintained throughout the year.