About UTV

Internal Control Procedures

Internal Control Procedures

A key element of the Corporate Governance framework is the establishment of internal control procedures. The principal procedures which operated over the period covered by the financial statements, and up to the date of signing the accounts, can be summarised as follows:

• Business Planning and Financial Review Process

The Board undertakes a comprehensive review of the financial cycle and following on from the annual business planning review, approves the annual budget. The Board is provided with relevant, accurate and timely information on key performance metrics enabling performance to be monitored monthly, compared to budget and to the prior year. The reasons for variances are explained and relevant action is taken swiftly, allowing updated forecasts to be produced and tracked, as applicable, throughout the year.

• Management Structure and Delegation of Authority

The Board has overall responsibility for the Group and there is a formal schedule of matters specifically reserved for decision by the Board. Each executive Director has been given responsibility for specific aspects of the Group's affairs with clearly stated lines of responsibility and reporting, supported by a framework for delegation of authority and authorisation to incur expenditure. The executive Directors together with the senior management team constitute a Management Committee which meets to discuss day-to-day operational matters. The Board considers the quality and integrity of its management team as an essential part of the control environment and the ethical standards expected are communicated through a formal Code of Business Conduct which allows staff to raise concerns in confidence.

• Internal Control Systems and Procedures

The Board has overall responsibility for the Group's system of internal control with the primary responsibility for the operation of the internal control systems being delegated to the executive management. Controls are monitored by a number of different parties including all levels of management, by the executive Directors, and by the Internal and External Auditors. The Audit Committee assists the Board in reviewing the Group's system of internal controls, both financial and operational with these parties and considers the relevant action needed in respect of any control issues raised by the Internal and External Auditors.

• Reviewing the Controls over Financial Reporting

The Audit Committee's role includes monitoring the integrity of the Group's financial statements and other formal announcements relating to the Group's financial performance. In addition to considering internal controls over the underlying financial reporting systems, as part of its review of the effectiveness of the systems of internal control, the Audit Committee considers the appropriateness of the Group's accounting policies, (including changes thereto), reviews significant judgements reflected in the Group's financial statements and considers guidance issued by the Financial Reporting Council. Compliance of the financial statements with legislation, regulation and accounting standards is managed by the Group's Finance function, which includes professionally qualified accountants who keep up-to-date on developments in financial reporting.

• Risk Management

The Board of Directors is collectively responsible for identifying the major business risks faced by the Group and for determining the appropriate level of controls and procedures to manage, monitor and mitigate the risks. Throughout the year, these risks are reviewed regularly by the Board assisted by periodic reports from senior management updating the Board on newly identified risk areas, how these are currently being addressed and any further actions or controls that are due to be established.

The executive Directors and the senior management team are responsible for implementing the risk management strategy, ensuring that an appropriate framework for managing risk is operating effectively throughout the Group's operations and activities. They discharge this responsibility by establishing an ongoing risk assessment process whereby key risks in each Business Division are kept under regular review and monitored throughout the year by the Management Committee. These risks are reported to the Board and Audit Committee by the executive Directors and form an integral part of the Board meetings. This ensures that the key risks are given the due level of focus and that responsive action plans are developed and implemented. Various outputs from the ongoing risk assessment process are considered in the development of the internal audit plans and assist the external audit function in planning their work.