Morgan Advanced Materials

Internal control and assurance

The Board has overall responsibility for establishing and maintaining a sound system of internal control to safeguard shareholders’ investment and the Group’s assets, and for reviewing the effectiveness of such system.

Through the audit committee, the Board reviews the effectiveness of the internal control system annually. This review covers all material controls, including financial, operational and compliance controls, and risk management systems.

The main features of the Group’s internal control framework are as follows:

Control environment

The Group’s management processes include delegated authorities and the segregation of duties with documented policies and manuals. These cover financial procedures, environmental, health and safety practice and other areas. In addition, there is a schedule of matters reserved for the Board. The Group’s core values statement, ethics policy and other supporting policies and procedures set out the Group’s commitment to the highest standards of corporate and individual behaviour and provide guidance for employees.

Financial reporting

Risk management systems and internal controls are in place in relation to the Group’s financial reporting processes and the process for preparing consolidated accounts.

Performance monitoring

There are regular meetings of the Board and executive committee. Divisional management teams also meet regularly to review performance. In addition, regular site visits are made by members of the executive committee.

Risk factors

Morgan’s businesses are affected by a number of factors, many of which are influenced by macro-economic trends and are therefore outside the Company’s immediate control nut monitored and assessed through the risk process.

Internal audit

The Group’s internal audit function reviews internal control and risk management processes.