Risk Management
Tatts Group operates a risk management framework that provides the Board with a communication process to continually assure
them that risks inherent in the operations and activities of the Group have been prudently managed.
The Board has delegated the review of risk management practices to the Audit, Risk and Compliance Committee. As part of this
role, the Committee regularly reviews the effectiveness of the risk management system and reports to the Board on the risk
management framework throughout the year. As part of this process, the Board adopted a formal policy to provide a system for
managing risks and informing stakeholders.
Tatts Group management team is responsible for identifying risks to the business, developing and implementing risk mitigation
strategies and reporting the effectiveness of managing these risks to the Board. Internal Audit provides assurance to management,
the Committee and the Board on the adequacy of the risk management and internal control systems. Management reports to the
Committee on the material business risks and the extent to which it believes these risks are being managed, at least annually.
Management has identified risks in four core areas: strategic risk, operational risk, financial risk and compliance risk. By
way of illustration, management identified a series of operational risks which include:
- Narrow markets and reliance on licences;
- Partners and others (e.g. racing industry, Agents and Lottery Bloc);
- Reliance on technology; and
- Reputation/social responsibility.
Management has also identified particular internal controls to mitigate these risks which include:
- Corporate planning and key strategic project implementation;
- The financial practices undertaken pursuant to the policies and procedures such as delegations of authority, budget monitoring and project performance reports;
- The operation and reporting structures of Tatts Group compliance programs in relation to regulatory requirements of Tatts Group businesses and industry practice which deal with specific areas of risk such as licensing requirements, contractual obligations, OH&S and Treasury risk;
- Technology focussed disaster recovery plans and security policy processes and practices and other technology related management structures; and
- An annual review of the insurance program to ensure adequate coverage of insurable risks.
Internal Audit develops an annual audit program in consultation with management and the Audit, Risk and Compliance Committee which focuses on testing the efficacy of operational, financial and compliance risks. Regular reports are provided to the Board.
For the reporting period, management has reported to the Board, in accordance with ASX Recommendation 7.2, as to the
effectiveness of Tatts Group's management of the Group’s material business risks. The Managing Director/Chief Executive and
the Chief Financial Officer have provided assurance to the Board, in accordance with ASX Recommendation 7.3, that the
declaration provided in accordance with Section 295A of the Corporations Act 2001 is founded on a sound system of risk
management and internal control and the system is operating effectively in all material respects in relation to financial
reporting risks. The Board notes that assurance from the Managing Director/Chief Executive and Chief Financial Officer can
only be reasonable assurance rather than absolute. This is because of such factors as the need for judgement and limitations
on internal controls.
View the Tatts Group Risk Management Policy