RiskManagement Policy The Committee has considered and developed a comprehensive Risk Management Policy which has been adopted by the Group. The purpose of the Risk Management Policy is to strengthen the proper management of risks through proactive risk identification, measurement, management, mitigation and reporting in respect of all activities undertaken by the Group. The Risk Management Policy is intended to: ӱ Ensure that major risks are reported to the Board for review; ӱ Result in the management of those risks that may significantly affect the pursuit of the stated strategic goals and objectives; ӱ Embed a culture of evaluation and identify risks at multiple levels within the Group; and ӱ Meet legal and regulatory requirements. Internal controls The Board is responsible for the Company’s internal control system and for reviewing its effectiveness. It has therefore established a process designed to meet the particular needs of the Company in managing the risks to which it is exposed. As part of this process, a risk matrix has been prepared that identifies the Company’s key functions and the individual activities undertaken within those functions. From this, the Board has identified the Company’s principal risks and the controls employed to manage those risks. These are reviewed at each Audit and Risk Committee meeting. Also, the Committee has agreed a programme of additional controls testing which is carried out by the external auditor, in order to provide the Board with comfort that the controls are operating as intended and have been in place throughout the year. The Board also monitors the performance of the Company against its strategy and receives regular reports frommanagement covering all business activities.
The valuation is conducted on a quarterly basis by independent valuers, and is subject to oversight by the Property Valuation Committee. It is a key component of the annual and half-year financial statements and is inherently subjective, requiring significant judgement. Members of the Property Valuation Committee, together with members of the Picton team, meet with the independent valuer on a quarterly basis to review the valuations and underlying assumptions, including the year-end valuation process. The Chair of the Property Valuation Committee reported to the Audit and Risk Committee at its meeting in April 2021 and confirmed that the following matters had been considered in discussions with the independent valuers: ӱ Property market conditions; ӱ Yields on properties within the portfolio; ӱ Letting activity and vacant properties; ӱ Covenant strength and lease lengths; ӱ Estimated rental values; and ӱ Comparable market evidence. The Audit and Risk Committee reviewed the Report from the Chair of the Property Valuation Committee including the assumptions applied to the valuation and considered their appropriateness, as well as considering current market trends and conditions, and valuation movements compared to previous quarters. The Committee considered the valuation and agreed that this was appropriate for the financial statements. The Committee was satisfied that the 2021 Annual Report is fair, balanced and understandable and included the necessary information as set out above, and it has confirmed this to the Board.
Meetings of the Audit and Risk Committee are attended by the Group’s Finance Director and other members of the finance team, and the external auditor. The external auditor is given the opportunity to discuss matters without management The Audit and Risk Committee met three times during the year ended 31 March 2021 and considered the following matters: ӱ External audit strategy and plan; ӱ Audit and accounting issues of significance; ӱ The Annual and Interim Reports of the Group; ӱ Reports from the external auditor; ӱ The effectiveness of the audit process and the independence of KPMG Channel Islands Limited; ӱ Review of the Group’s Risk Management Policy and appetite ӱ Review of the risk matrix and mitigating controls; and ӱ Stock Exchange announcements. Financial reporting and significant reportingmatters The Committee considers all presence. Activity financial information published in the annual and half-year financial statements and considers accounting policies adopted by the Group, presentation and disclosure of the financial information and the key judgements made by management in preparing the financial statements. The Directors are responsible for preparing the Annual Report. At the request of the Board, the Committee considered whether the 2021 Annual Report was fair, balanced and understandable and whether it provided the necessary information for shareholders to assess the Group’s strategy, business model and performance. The key area of judgement that the Committee considered in reviewing the financial statements was the valuation of the Group’s investment properties.
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