Risk Management

Significant business risk
The Board is responsible for reviewing areas of significant business risk to ensure a full analysis is undertaken of the risks involved. These matters are analysed and discussed at least annually as part of the detailed business planning process for each of our individual operating areas and more frequently as required. The Board provides assistance to management in the development and maintenance of processes to minimise and mitigate business risks.
The Board engaged risk management consultants in 2006 to identity the risk culture, risk oversight and risk management occurring within the company, and subsequently to document a formal risk management policy and implement relevant procedures. During 2007, management established a Risk Management Committee to implement relevant processes.

Internal compliance and control
The strength of our risk management and internal control framework is founded on a combination of formal policies, procedures, practices and informal controls including management competence, management skills and safety council committees who monitor the company’s safety, health and environment performance.

Internal control systems currently in place include:
Business and strategic planning, budgeting and forecasting – a comprehensive business and strategic planning and budgeting process by month, including evaluation of strategies, objectives, and risks which underpin business strategic plan and annual budgets approved by the Board. Monthly actual performance is measured against budget and forecast, individual company and business units’ performance are monitored, executive safety, health and environment meetings are conducted and reported to the Board and the Board subcommittees.
Internal audit – the company has established a process in which two teams of appropriately qualified finance executives undertake a program of internal audit work on an annual basis. The program of audits and the scope of the work to be undertaken is approved by the Audit Committee on an annual basis. The results of each audit are reported to the Audit Committee and the external Auditor.

Corporate policies – the Board approves corporate policies which address such matters as Duty of Care, Drug and Alcohol, Environmental, EEO and Affirmative Action, Mobile Phone and CB use, Smoking, Privacy and Safety, Health and Environment and Corporate Governance.

Investment decisions – the company has documented policy for capital expenditure and investment appraisals. These include annual capital budgets, appraisal against finance hurdles, appropriate levels of authority, maintenance capital plans and expenditure review. Post-investment reviews are performed to assess the effectiveness of funds invested in asset acquisitions.

Group assurance and monitoring – these include internal audits, independent branch safety audits, corrective action responses to all incidents, dangerous goods audits, satellite tracking device to monitor activities and regular balance sheet and cash flow reviews.