TomTom 2009 Annual Report Download - page 28

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The Management Board is responsible for risk
management and internal control systems. The
Management Board believes that the company
maintains an adequate and effective system of risk
management and internal control that complies
with the Dutch Code of Corporate Governance.
Internal control systems are designed to manage,
rather than eliminate, the risk of failure to achieve
business objectives, and can provide reasonable,
but not absolute, assurance against material
misstatement or loss.
The company views the management of risk as a
key management activity. The Board reviews the
effectiveness of the systems of internal control
relative to strategic, financial, operational and
compliance risks and discusses risk management
and internal controls with the Audit Committee on
at least a quarterly basis.
The company embeds risk management into
periodic planning and internal control mechanisms.
A top-down approach is followed, whereby the
major risks are identified that could affect the
business and its preparedness to manage and
mitigate these risks.
This, however, does not imply that the company can
provide certainty as to the realisation of business and
financial strategic objectives, nor can the followed
approach to internal control over financial reporting
be expected to prevent or detect all misstatements,
errors, fraud or violation of law or regulations.
The key features of the systems of internal control
are as follows.
1. Clearly defined lines of accountability and
delegation of authority are in place, together
with comprehensive reporting and analysis
against approved budgets.
2. Operating risk is minimised by ensuring that the
appropriate infrastructure, controls, systems
and people are in place throughout the business.
3. An organisation design is in place that supports
business goals and enables staff to be
successful in their roles.
4. Centralised treasury operations manage the
investment of cash balances and exposure to
currency transaction risks through treasury
policies, risk limits and monitoring procedures
that are approved annually by the Supervisory
Board.
5. A Code of Conduct and a Code of Ethics is
accessible to staff via the intranet site. The Code
of Conduct is also available on the TomTom
website (www.tomtom.com).
Assurance on the function of internal control
systems, and on their effectiveness, is obtained
through management reviews, control self
assessment, internal audits and testing of certain
aspects of the internal financial control systems
by the external auditors during the course of
their annual audit.
During 2009 the following significant improvements
to TomTom’s internal control systems were made:
• restructuring Tele Atlas from a regional to a
more centrally controlled organisation
• implementation of an Enterprise Resource
Planning system to support our Automotive
business unit
INTERNAL CONTROL OVER FINANCIAL REPORTING
Internal control over financial reporting is a process
designed to provide reasonable, but not absolute,
assurance regarding the reliability of management
and financial reporting in accordance with generally
accepted accounting principles. Controls over
financial reporting policies and procedures include
controls to ensure that:
• commitments and expenditures are
appropriately authorised by management
• records are maintained which accurately and
fairly reflect transactions
• any unauthorised acquisition, use or disposal of
the company’s assets that could have a material
effect on the Financial Statements should be
detected on a timely basis
• transactions are recorded as required to permit
the preparation of financial statements, and
• the company maintains an accounting manual
that is designed to enable it to conform to IFRS.
Due to inherent limitations, internal controls
over financial reporting may not prevent or detect
misstatements. Risk management and control
systems provide reasonable assurance that the
financial reporting does not contain any material
inaccuracies. No material weaknesses were
identified during the year. The financial systems
are deemed to have functioned properly during the
year under review, and there is currently no
indication they will not continue to do so in the
forthcoming period.
Management Board
Harold Goddijn – CEO
Marina Wyatt – CFO
Alain De Taeye
18 February 2010
Internal
control report