In accordance with the FRC ‘Guidance on Risk Management, Internal Control and Related Financial Business Reporting’ the Board recognises that it is responsible for the Group’s system of internal control and risk management. The system has been designed to manage rather than eliminate the risk of failure to achieve business objectives, and can only provide reasonable and not absolute assurance against material misstatement or loss.
This system has continued to operate throughout the COVID-19 pandemic. The Board has embedded a continuous process for identifying, evaluating and managing the Group’s significant risks, including risks arising out of Bodycote’s corporate and social engagement. The Board’s monitoring covers all significant strategic, financial, operational and compliance risks. It is based principally on reviewing reports from management and from Internal Audit (IA) to consider whether any significant failings or weaknesses are promptly remedied or indicate a need for more extensive monitoring. The Audit Committee assists the Board in discharging these review responsibilities. The emerging risk review, based around horizon scanning, has explored what the future might look like and seeks to identify early warning signals. These emerging risks are characterised by their high level of uncertainty both in terms of likelihood and potential impact and are therefore more difficult to manage or mitigate. Risks that have been considered by the Board have included:
The Board is satisfied that the Group maintains an effective system of internal controls and that there were no significant failings or weaknesses in the system. The system was in operation throughout 2020 and continues to operate up to the date of the approval of this report. The key elements of the Group’s system of internal control that is monitored by the Board includes:
During 2020, in compliance with provision 29 of the Code, management performed an assessment of its risk management processes for the purpose of this Annual Report. Management’s assessment, which has been reviewed by the Audit Committee and the Board, included a review of the Group’s key strategic, operational and emerging risks. The review was based on work performed by the Group Head of Risk and the Group’s Sustainability and Risk Committee (by means of workshops, interviews, investigations, and by reviewing departmental or divisional risk registers). These risks have been reviewed throughout the year and three new key risks have been added for 2020: contract review, equipment downtime and loss of key accreditations. Two risks previously reported as key are no longer considered as such: capital projects and the loss of key customers. Further information regarding the ways in which the principal business risks and uncertainties affecting the Group are managed is shown on pages 29 to 33of the annual report.
By order of the Board:
U.S. Ball
Group Company Secretary
12 March 2021
Springwood Court Springwood Close
Tytherington Business Park
Macclesfield
Cheshire SK10 2XF
In accordance with the FRC ‘Guidance on Risk Management, Internal Control and Related Financial Business Reporting’ the Board recognises that it is responsible for the Group’s system of internal control and risk management. The system has been designed to manage rather than eliminate the risk of failure to achieve business objectives, and can only provide reasonable and not absolute assurance against material misstatement or loss.
This system has continued to operate throughout the COVID-19 pandemic. The Board has embedded a continuous process for identifying, evaluating and managing the Group’s significant risks, including risks arising out of Bodycote’s corporate and social engagement. The Board’s monitoring covers all significant strategic, financial, operational and compliance risks. It is based principally on reviewing reports from management and from Internal Audit (IA) to consider whether any significant failings or weaknesses are promptly remedied or indicate a need for more extensive monitoring. The Audit Committee assists the Board in discharging these review responsibilities. The emerging risk review, based around horizon scanning, has explored what the future might look like and seeks to identify early warning signals. These emerging risks are characterised by their high level of uncertainty both in terms of likelihood and potential impact and are therefore more difficult to manage or mitigate. Risks that have been considered by the Board have included:
The Board is satisfied that the Group maintains an effective system of internal controls and that there were no significant failings or weaknesses in the system. The system was in operation throughout 2020 and continues to operate up to the date of the approval of this report. The key elements of the Group’s system of internal control that is monitored by the Board includes:
During 2020, in compliance with provision 29 of the Code, management performed an assessment of its risk management processes for the purpose of this Annual Report. Management’s assessment, which has been reviewed by the Audit Committee and the Board, included a review of the Group’s key strategic, operational and emerging risks. The review was based on work performed by the Group Head of Risk and the Group’s Sustainability and Risk Committee (by means of workshops, interviews, investigations, and by reviewing departmental or divisional risk registers). These risks have been reviewed throughout the year and three new key risks have been added for 2020: contract review, equipment downtime and loss of key accreditations. Two risks previously reported as key are no longer considered as such: capital projects and the loss of key customers. Further information regarding the ways in which the principal business risks and uncertainties affecting the Group are managed is shown on pages 29 to 33of the annual report.
By order of the Board:
U.S. Ball
Group Company Secretary
12 March 2021
Springwood Court Springwood Close
Tytherington Business Park
Macclesfield
Cheshire SK10 2XF
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