Risk Management
Good corporate governance requires the Board to maintain a sound
system of internal control to safeguard shareholders’ investment and the
Company’s assets and at least annually to conduct a review of the
effectiveness of Edwards’ system of internal controls. The Board relies
on the Audit and Risk Committee to assist this process. The Audit and
Risk Committee reviews the process by which risks are identified and
assessed and the effectiveness of the system of internal controls,
management representations and assertions including reviewing reports on
risk management and internal control from the Head of Internal Audit
together with any reports from the external auditors on internal control
matters noted as part of their work.
The internal control systems
have been designed to manage rather than eliminate the risk of failure
to achieve business objectives and provide reasonable assurance against
material misstatement or loss.
The financial control framework includes the following features: an
annual strategic planning process; an annual budget; a system of monthly
reporting which involves comparison of actual results with the original
budget, updating full year forecasts; monthly reporting of performance
to the Board and the external audit of annual financial statements. The
Company’s auditors are currently Price Waterhouse Coopers LLP.
Other
controls include EMB approval of capital expenditure and Board approval
of all major capital expenditure; Board approval of all M&A
activity; a system of authorisation limits and Board consideration of
any matter having a material effect on the Group.
Details of the Group’s Code of Conduct and Whistleblowing Policy can be foundhere
Internal audit is an important element of the overall process by
which each of the Board and EMB obtain the assurance required that risks
are being properly identified, managed and controlled. Risk based
internal audit plans are approved by the Audit and Risk Committee
annually. The Head of Internal Audit is TY Yeo, his function is
supplemented by services provided by Ernst & Young as an outsource
service provider. The Internal Audit function reports to the Chairman of
the Audit and Risk Committee.