Ryanair 2010 Annual Report Download - page 24

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Internal Control
The directors have overall responsibility for the Company’s system on internal control and for reviewing
its effectiveness. The directors acknowledge their responsibility for the system of internal control which is
designed to manage rather than eliminate the risk of failure to achieve business objectives, and can provide
only reasonable and not absolute assurance against material misstatement or loss.
In accordance with the revised FRC (Turnbull) guidance for directors on internal control published in
October 2005, ‘Internal Control: Revised Guidance for Directors on the Combined Code’, the Board confirms
that there is an ongoing process for identifying, evaluating and managing any significant risks faced by the
Group, that it has been in place for the year under review and up to the date of approval of the financial
statements and that this process is regularly reviewed by the Board.
In accordance with the provisions of the Combined Code the directors review the effectiveness of the
Company’s system of internal control including:
• Financial
• Operational
• Compliance
• Risk Management
The Board is ultimately responsible for the Company’s system of internal controls and for monitoring its
effectiveness. The key procedures that have been established to provide effective internal control include:
• a strong and independent Board which meets at least 4 times a year and has separate Chief Executive
and Chairman roles;
• a clearly defined organisational structure along functional lines and a clear division of responsibility
and authority in the Company;
• a comprehensive system of internal financial reporting which includes preparation of detailed monthly
management accounts, providing key performance indicators and financial results for each major
function within the Company;
• quarterly reporting of the financial performance with a management discussion and analysis of results;
• weekly Management Committee meetings, comprising of heads of departments, to review the
performance and activities of each department in the Company;
• detailed budgetary process which includes identifying risks and opportunities and which is ultimately
approved at Board level;
• Board approved capital expenditure and Audit Committee approved treasury policies which clearly
define authorisation limits and procedures;
• an internal audit function which reviews key financial/business processes and controls, and which has
full and unrestricted access to the Audit Committee;
• an Audit Committee which approves audit plans, considers significant control matters raised by
management and the internal and external auditors and which is actively monitoring the Company’s
compliance with section 404 of the Sarbanes Oxley Act of 2002;
• established systems and procedures to identify, control and report on key risks. Exposure to these risks
is monitored by the Audit Committee and the Management Committee; and
• a risk management programme in place throughout the Company whereby executive management
reviews and monitors the controls in place, both financial and non financial, to manage the risks facing
the business.