Annual Report and Accounts 2006 - DCC plc

corporate governance41achieve business objectives and canprovide only reasonable and notabsolute assurance against materialmisstatement or loss.In accordance with the revisedTurnbull guidance for directors oninternal control published in October2005, Internal Control: RevisedGuidance for Directors on theCombined Code, the Board confirmsthat there is an ongoing process foridentifying, evaluating and managingany significant risks faced by theGroup, that it has been in place forthe year under review and up to thedate of approval of the financialstatements and that this process isregularly reviewed by the Board.The key risk management and internalcontrol procedures, which aresupported by detailed controls andprocesses, include:• skilled and experienced Group anddivisional management;• an organisation structure withclearly defined lines of authorityand accountability;• a comprehensive system offinancial reporting involvingbudgeting, monthly reporting andvariance analysis;• the operation of approved riskmanagement policies (includingtreasury and IT);• a Risk Committee, comprisingGroup senior management,whose main role is to keep underreview and report to the AuditCommittee on the principal risksfacing the Group, the controls inplace to manage those risks andthe monitoring procedures;• an independent Enterprise RiskManagement function, whichincorporates Group Internal Auditand Group Environmental, Healthand Safety; and• a formally constituted AuditCommittee which reviews theoperation of the Risk Committeeand the Enterprise RiskManagement function, liaises withthe external auditors and reviewsthe Group’s internal controlsystems.The Board has reviewed theeffectiveness of the Group’s systemof internal control. This review tookaccount of the principal business risksfacing the Group, the controls in placeto manage those risks (includingfinancial, operational and compliancecontrols and risk management)and the procedures in place tomonitor them.Going concernAfter making enquiries, the Directorshave formed a judgement, at the timeof approving the financial statements,that there is a reasonable expectationthat the Company and the Group asa whole have adequate resources tocontinue in operational existence forthe foreseeable future. For thisreason, they continue to adopt thegoing concern basis in preparing thefinancial statements. The Directors’responsibility for preparing thefinancial statements is explained onpage 48 and the reportingresponsibilities of the auditors are setout in their report on pages 49 and 50.Compliance statementDCC has complied, throughout theyear ended 31 March 2006, with theprovisions as set out in Section 1 ofthe Combined Code on CorporateGovernance.