Financial and business reporting
When reporting externally, the Board aims to present a fair, balanced and understandable assessment of the Group’s position and prospects. During the year, the Board satisfied itself that appropriate assurance processes are in place to enable it to state that this annual report, taken as a whole, is fair, balanced and understandable and provides the information necessary for users to assess the Company’s position and performance, business model and strategy. A statement of this responsibility, together with additional responsibilities of the Directors in respect of the preparation of the annual report, is set out on page 98. The auditors’ report on page 107 includes a statement by PricewaterhouseCoopers LLP about their reporting responsibilities. As set out on page 36, the Directors are of the opinion that GKN’s business is a going concern. An explanation of how the Board has assessed the prospects of the Company, taking into account its current position and principal risks, can be found on the same page.
The Group has in place a number of controls to manage risk in respect of financial reporting and the preparation of consolidated accounts. These include: • the implementation of Group accounting policies and procedures, supported by regular bulletins from the central and divisional finance teams on the application of accounting standards and reporting protocols • Group and divisional policies governing the maintenance of accounting records, transaction reporting and key financial control procedures • a proprietary internal control monitoring system, GKN Reporting and Integrity Procedures (GRiP), to assess compliance with key financial controls on monthly, quarterly and annual cycles • monthly operational review meetings which include, as necessary, reviews of internal financial reporting issues and financial control monitoring • divisional certifications in relation to internal financial controls, accounting judgements and representations of divisional financial results • ongoing training and development of financial reporting personnel. Other controls in place to minimise risk and ensure the efficient conduct of the Group’s business include: • the regular review of the GKN Code and policies to ensure that areas of potential risk are adequately covered. The Code and policies define the behaviours expected of all GKN employees and are available on the Group intranet • the development and dissemination of training programmes to educate employees on relevant topics such as competition law or anti-bribery and to reinforce the behaviours expected of them • clearly defined approval limits and delegated authorities, particularly in relation to treasury transactions, capital expenditure submissions and major projects • an employee disclosure hotline which employees can use to report any instances of suspected wrongdoing. The Board has carried out a robust assessment of the principal risks facing the Company, including those that would threaten its business model, future performance, solvency or liquidity. A description of these risks, together with details of how they are managed or mitigated, is set out on pages 40 to 47.
Risk management and internal control