Aer Lingus 2014 Annual Report Download - page 55

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and financial statements and its outputs inform the preparation of the Group’s consolidated accounts. The process involves the Board
considering:
 the nature and extent of the key risks facing the Group;
 the likelihood of these risks occurring;
 the impact on the Group should these risks occur;
 the actions being taken to manage these risks at the desired level; and
 the procedures in place to monitor these risks.
The risks facing the Group are regularly reviewed by management and the Risk Committee (as delegated to it by the Audit Committee,
whose terms of reference require it to keep under review the effectiveness of the Company’s internal controls and risk management
systems).
In accordance with the process outlined above, the Board confirms that it has conducted an annual review of the effectiveness of the Group’s
risk management and the internal control systems in operation and that it has approved the reporting lines to ensure the ongoing
effectiveness of the internal controls and reporting structures. This review included a review of all material controls, including financial,
operational and compliance controls and risk management systems. In its review the Board considered the changes since the last annual
assessment in the nature and extent of the risks faced by the Group; the scope and quality of management’s ongoing monitoring of risks; the
communication of the results of the monitoring to the Board and Board Committees; the incidence of control failings or weaknesses that
have been identified; and the effectiveness of the Group’s financial reporting process. The description of the principal risks and uncertainties
that the Group faces are set out on pages 29 to 33. The Board evaluates these risks as required and thereby determines its and the Group’s
risk tolerance in the implementation of strategy.
In addition to the matters described above, the other elements of the Group’s internal control and risk management systems in relation to the
process for preparing the Group’s consolidated accounts are as follows:
 clear governance structures; clearly defined organisation structures and lines of authority;
 employment of competent persons;
 a strong and independent Board that meets regularly during the year;
 corporate policies for financial reporting, treasury and financial risk management, information technology and security, authorization
and expenditure, vendor selection, data protection, project appraisal and corporate governance;
 defined matters reserved to the Board and Board of Directors approval of all major strategic decisions;
 defined Board Sub-Committee Terms of Reference;
 clearly defined process and information system for controlling capital expenditure including use of appropriate authorisation levels;
 long term business plan;
 detailed annual budget process, with budget reviewed and approved by Board;
 monthly monitoring of historic and forecast performance against budget which is reported to the Board;
 comprehensive system of internal financial reporting which includes preparation of detailed financial statements and key performance
indicators on a monthly basis and the preparation of the year end consolidated financial statements;
 an internal audit function which reviews and reports on key business processes and controls;
 corporate compliance monitoring;
 an audit committee which approves audit plans and deals with significant control issues raised by internal or external audit;
 regular communication with external auditors;
 regular Executive Committee meetings (and Quarterly Executive Risk Committee meetings);
 defined expenditure and authorization limits;
 fully integrated purchasing process with online purchasing portal and electronic invoice authorisation workflows;
 defined data protection plan and framework for data protection policy; and
 segregation of duties.
Any system of internal control can provide only reasonable and not absolute assurance that material financial irregularities will be detected
or that the risk of failure to achieve business objectives is eliminated. The Directors, having reviewed the effectiveness of the system of
internal financial, operational and compliance controls and risk management, consider that the system operated effectively throughout the
financial year and up to the date that the financial statements were signed.
Going concern
After making enquiries, considering the net cash available at the reporting date and considering the projections in the Group’s 2015 budget
and five year plan, the Directors consider that the Company has adequate resources to continue operating for the foreseeable future. For this
reason they have continued to adopt the going concern basis in preparing the financial statements.
Accountability and audit
A statement relating to the Directors’ responsibilities in respect of the preparation of the financial statements is set out on pages 45 to 46
with the responsibilities of the Company’s Independent Auditors outlined on page 80.
Table 1.1 Attendance at Board and Board Committee meetings in the year ended 31 December 2014
The attendance statistics are outlined below in the format “A/B”, where ‘A’ represents the number of meetings attended by the Director and
‘B’ represents the total number of meetings held at which that Director was entitled to attend.