Overview of the Risk Management System
The Board oversees the establishment, implementation, and annual review of the company's Risk Management System. Management has established and implemented the Risk Management System for assessing, monitoring and managing operational, financial reporting, and compliance risks for the company. The Managing Director and Company Secretary have declared, in writing to the Board, that the financial reporting risk management and associated compliance and controls have been assessed and found to be operating efficiently and effectively. The operational and other risk management compliance and controls have also been assessed and found to be operating efficiently and effectively. All risk assessments covered the whole financial year and the period up to the signing of the annual financial report for all material operations in the company, and material associates and joint ventures.
Risk Profile
The Audit Committee reports to the Board half yearly on the status of risks through integrated risk management programs aimed at ensuring risks are identified, assessed and appropriately managed.
Each business operational unit is responsible and accountable for implementing and managing the standards required by the program.
Major risks arise from such matters as actions by competitors, government policy changes, environment, occupational health and safety, property, financial reporting, and the purchase, development and use of information systems.
Risk Management and Compliance and Control
The Board is responsible for the overall internal control framework but recognises that no cost effective internal control system will preclude all errors and irregularities. The Board's policy on internal controls is comprehensive. It comprises the company's internal compliance and control systems, including:
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operating unit controls – operating units confirm compliance with financial controls and procedures including information systems controls detailed in procedures manuals; and
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investment appraisal – guidelines for capital expenditure include annual budgets, detailed appraisal and review procedures, levels of authority and due diligence requirements where businesses are being acquired or divested.
Comprehensive practices have been established to ensure:
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capital expenditure and revenue commitments above a certain size obtain prior Board approval;
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financial exposures are controlled;
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occupational health and safety standards and management systems are monitored and reviewed to achieve high standards of performance and compliance with regulations;
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business transactions are properly authorised and executed;
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the quality and integrity of personnel; and
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financial reporting accuracy and compliance with the financial reporting regulatory framework.
Quality and Integrity of Personnel
Compliance with policies of the Ethical Standards Manual is obtained from all operating units.
Financial Reporting
The Managing Director and the Company Secretary have declared, in writing to the Board that the company's financial reports are founded on a sound system of risk management and internal compliance and control which implements the policies adopted by the Board.
Monthly actual results are reported against budgets and revised forecasts for the year are prepared regularly.
Environmental Regulation
The company is committed to achieving a high standard of environmental performance. The Board aims to ensure that the company and associated investments' environmental policies are adhered to and are in compliance with all relevant environmental legislation. The company's operations are not subject to any significant environmental regulations under Commonwealth or State legislation.