TYRATECH, INC. • ANNUAL REPORT 2011 • PAGE 21
year. Other firms of advisors were employed during the year
for tax compliance services.
A "whistle blowing" policy has been implemented whereby
employees may contact the Chairman of the Audit Committee
on a confidential basis.
The Nomination Committee is responsible for considering and
making recommendations concerning the composition of the
Board, including proposed appointees to the Board, whether
to fill vacancies that may arise or to change the number of
Board members. The appointments during the year did not
involve open advertising. The Nomination Committee meets
at least two times per year.
INTERNAL CONTROL AND RISK MANAGEMENT
The Directors acknowledge that they are responsible for establishing
and maintaining the Group's system of internal
control and reviewing its effectiveness. The Group is small
and the Directors are closely involved in the management of
the business. At the beginning of the financial year we identified
the key risks that the Group face during the financial
year. The Board has since reviewed these risks as part of the
strategic planning exercise, considering the likelihood of the
risk occurring and the potential impact on the business. The
board will continue to review and update the risk management
process on an ongoing basis. No significant weaknesses
or failings were identified, however, the internal controls are
designed to manage rather than eliminate the risk of failure
to achieve business objectives and the Board recognizes that
any system can only provide reasonable and not absolute
assurance against material misstatement or loss.
The Group operating procedures include a comprehensive
system for reporting financial and non-financial information
to the Directors.
The planning system produces a rolling three year operating
plan annually. The first year of the three year plan is a
proposed operating budget, phased monthly. These are approved
by the Board and forecast updates are carried out
quarterly. The financial projections include income statement,
balance sheet and cash flows.
The Board reviews the actual financial results versus budget
and forecast together with other management reports containing
non-financial information.
Schedules of financial authority limits detailing management
authority limits for commitments in respect of sales orders,
capital and operating expenditure are circulated to relevant
employees and updated at least annually.
The Board considers that there have been no weaknesses in
internal financial controls that have resulted in any material
losses, contingencies or uncertainties requiring disclosure in
the financial statements.
The Executive Chairman ensures that directors take independent
professional advice as required at the Group's expense
in appropriate circumstances and all members of the Board
have access to the advice of the Group Secretary.
