Ryanair 2008 Annual Report Download - page 26

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26
Internal control
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 mis-statement or loss. In accordance with the
provisions of the Combined Code the directors review the effectiveness of the Group’s system of
internal control including:
• Financial
• Operational
• Compliance
• Risk
• Management
The Board is ultimately responsible for the Group’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 Group;
• 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 Group;
• 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 Group;
• 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 Group’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 Group whereby executive management
reviews and monitors the controls in place, both financial and non financial, to manage the risks facing
the business.
On behalf of the Board, the Audit Committee has reviewed the effectiveness of the Group’s system
of internal control for the year ended March 31, 2008 and has reported thereon to the Board.