Notes to the financial statements - Plasmon

Accountability and Audit
Following the publication in September 1999 of the guidance for
Directors on internal control reviews and disclosures prepared by the
Internal Control Working Party of the Institute of Chartered
Accountants in England and Wales (the Turnbull Guidance), the
Directors confirm that processes have operated throughout the year,
and continue to operate, to identify, evaluate, monitor and manage the
significant risks to the Group’s strategic objectives.
These processes are reviewed at each Audit Committee meeting with
the Executive Directors who present a report detailing the significant
Group risks identified by senior management during the day-to-day
running of the business. The senior management review the risks and
related control procedures at their regular meetings.
The Board has overall responsibility for the Group’s systems of internal
control and for monitoring their effectiveness. The Audit Committee
reports to the Board on the results of their review of the risk
management processes with the Board implementing additional
controls and monitoring processes as considered necessary. Such
processes can only provide reasonable assurance of the management
of risk and cannot eliminate the risk of failure to achieve the Group’s
business objectives. The key elements of the Group’s internal controls
are outlined below.
Control environment – the existence of a clear organisational structure
and well-defined lines of responsibility and delegation of appropriate
authority. The integrity and competence of personnel are ensured
through high recruitment standards, training and development
programmes.
Risk management – business strategy and plans are reviewed by the
Board. Detailed appraisals and evaluations of financial implications are
undertaken prior to commitments on major projects. In addition to the
Audit Committee presentations, the monthly report to the Board
includes commentary on the key risk areas.
Financial reporting – comprehensive systems of budgeting and
forecasting including monthly reporting of actual results against
budgets.
Control procedures and monitoring systems – ensuring authorisation
levels, procedures and other systems of internal financial control are
documented, applied and regularly reviewed. Many of the processes
are documented in the Group’s quality manuals and are subject to
audit by external compliance agencies on a regular basis. In addition,
the Audit Committee meets with the Group’s external Auditors to
discuss the results of their audit work. The Group does not currently
have an internal audit function but as the Group continues to grow this
is kept under review.
Going concern
After making appropriate enquiries, the Directors have a reasonable
expectation that the Company has adequate resources to continue in
operational existence for the foreseeable future. For this reason they
continue to adopt the going concern basis in preparing the accounts.
Plasmon Plc
Annual Report 2003
Corporate governance
19