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Risk management - The BBC Worldwide Board has responsibility for the identification and management of risks facing the business. An assessment of the exposure to risk, and the extent to which these risks are controlled, is updated and presented to the BBC Worldwide Audit Committee every three months. Management assessments are reviewed by the BBC's Internal Audit function, which reports on this matter to the BBC's Audit Committee (see below). This committee considers risk management across the BBC Group as a whole. BBC Worldwide's risk management team monitors risks facing the business and makes recommendations to develop the internal control environment.

Controls monitoring - The BBC has an Internal Audit department that is a core part of the Business Assurance function. Internal Audit's authority and independence are assured from its joint independent reporting relationship to the BBC's Audit Committee, the Fair Trading and Compliance Committee and the BBC's Director-General. The work programme of Internal Audit is unrestricted and includes BBC Worldwide. The scope of Internal Audit includes the examination and evaluation of the adequacy and effectiveness of the BBC Worldwide systems of internal control and the quality of performance in carrying out assigned responsibilities. The audit plan for BBC Worldwide, which is reported formally once a year, is based on a continuing assessment of key risks and monitoring compliance of key systems and processes. The results of testing are reported at each meeting of the Audit Committee, which scrutinises the operation of controls throughout the year.

Operating units - Key controls over business risks include performance review and exception reporting. The BBC Worldwide (Programme) Investment Committee, a subcommittee of the Board, must approve all programme and product investment over a certain threshold. The Board and the BBC Trust must approve all transactions over certain higher thresholds.

Treasury activities - The BBC's Group Treasury Department manages BBC Worldwide's activities in line with BBC Group policies. Each BBC Worldwide operating unit maintains additional financial controls and procedures appropriate to its own business environment and carries out local treasury activities, in both cases conforming to overall standards and guidelines.

Computer systems - BBC Worldwide has established controls and procedures over the security of data held on computer systems. Arrangements are in place for computer processing to continue and data to be retained in case BBC Worldwide's own data processing facility fails.

Financial reporting - BBC Worldwide has a comprehensive budgeting system, with an annual budget and quarterly forecasts prepared by management and approved by the Board. Monthly financial information, including balance sheets, cash flow statements, trading results and indebtedness are reported against the corresponding figures for the budget and previous year, with corrective action taken by the Directors as appropriate. Fraud awareness - Although incidents of fraud are rare, BBC Worldwide takes its responsibilities to minimise the risk of fraud very seriously. BBC Worldwide operates an Anti-fraud & Corruption Code of Conduct and a Fraud Control Policy, which set out consistent standards across the Group and responsibilities for ensuring adequate controls are in place. In addition, the Risk Management team organises training for key areas. BBC Worldwide has an ongoing process to review its anti-fraud management practices to ensure that they remain appropriate to the scale and complexity of the business. During the year, the BBC's anti-fraud group also continued to meet, chaired by the BBC's Head of Business Assurance, to include representatives from the BBC and its subsidiaries. The key objectives of the group are to embed measures to minimise the risk of fraud and raise overall fraud awareness. BBC Worldwide is responsible for reporting any suspicions of fraudulent activity to the BBC's Investigations Unit.

Whistle-blowing - BBC Worldwide has a 'whistle-blowing' policy to help ensure that any suspicions of malpractice are fully reported. An independent external company administers the process to ensure anonymity. Each reported incident is notified to the BBC's Head of Business Assurance who ensures that every incident is investigated and action taken as appropriate.

AUDIT COMMITTEE

Composition

The constitution of the BBC Worldwide Audit Committee was revised during the year as part of the new Corporate Governance Framework and now comprises solely Nonexecutive Directors, Zarin Patel, chairperson, and Nicholas Eldred. In accordance with the Combined Code, the Board is satisfied that the Audit Committee has an appropriate range of financial experience.