Response to the following problem:
During the year, the company and the board continued to support and invest in resources to provide an internal audit and risk-management function. The system of internal control and risk mitigation is deeply embedded in the operations and culture of the company. The board is responsible for maintaining a sound system of internal control and reviewing its effectiveness. The function can only manage, rather than eliminate entirely, and can only provide reasonable and not absolute assurance against material misstatement or loss. Ongoing reviews and assessments took place continually throughout the year.
The company has an internal audit function which is discharged as follows:
Adequate regular audits of the company stock (inventories)
Unannounced visits to the retail units
Monitoring systems which control the company cash The company has key procedures in place as follows:
Clearly defined authority limits and controls over cash-handling purchasing commitments and capital expenditure
Comprehensive budgeting process, with a detailed operating plan for twelve months and a mid-term financial plan, both approved by the board
Business results are reported weekly (for key times), with a monthly comprehensive report in full, and compared with budget
Forecasts are prepared regularly throughout the year for review by the board
Complex treasury instruments are not used; decisions on treasury matters are reserved by the board The directors confirm that they have reviewed the effectiveness of the system of internal control.