Strategic Report
Financial Statements
Additional Information
Audit, Risks and Internal Controls
Governance
Audit, risks and internal controls
The Board has established procedures to manage risk, oversee the framework of internal controls and determine its risk appetite to achieve its long- term strategic objectives.
The Board and the Audit and Risk Committee are responsible for ensuring that the Group has an effective internal control and risk management system and that the Annual Report provides a fair reflection of the Group’s activities during the year following its review of the methodology. The Property Valuation Committee has oversight of the independent valuers and the valuation process. It recommends the adoption of the quarterly valuations by the Board, following its review of the methodology and assumptions used by CBRE Limited, the independent valuers. Internal control and risk management The Board is responsible for establishing and maintaining the Group’s system of internal controls and reviewing its effectiveness. Internal control systems are designed to manage the achievement of business objectives, rather than eliminate the failure to achieve them and can only provide reasonable, and not absolute, assurance against material misstatement or loss. They have therefore established an ongoing process designed to meet the particular needs of the Group in managing the risks to which it is exposed, consistent with the guidance provided by the Turnbull Committee. Such review procedures have been in place throughout the full financial year, and up to the date of the approval of the financial statements, and the Board is satisfied with their effectiveness. This process involves a review by the Board of the control environment within the Group’s service providers to ensure that the Group’s requirements are met. The Group does not have an internal audit function. Given the scale of the Group’s operations, the Board determined that additional procedures carried out by the external auditor in conjunction with the audit of the Group’s accounts would provide the Board with sufficient assurance regarding
the internal control systems in place. The Board continues to place reliance on the Company’s Administrator’s internal control systems. These systems are designed to ensure effective and efficient operations, internal control and compliance with laws and regulations. In establishing the systems of internal control, regard is paid to the materiality of relevant risks, the likelihood of costs being incurred and costs of control. It follows, therefore, that the systems of internal control can only provide reasonable, but not absolute, assurance against the risk of material misstatement or loss. The effectiveness of the internal control systems is reviewed annually by the Audit and Risk Committee and the Board. The Audit and Risk Committee has a discussion annually with the auditor to ensure that there are no issues of concern in relation to the audit opinion on the financial statements and representatives of senior management are excluded from that discussion.
Picton Property Income Limited Annual Report 2022
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