Internal Controls - Inventory

• There is effective segregation of duties between the receiving of stocks and the updating of the financial records

• Inventory counts are performed in accordance with Company Policies

• Written inventory count instructions are issued to all personnel engaged in counting and valuation

• All differences between inventory count and book records are investigated and cleared within one month of the count or sooner and reviewed by the Finance Director.

• Where perpetual inventory ("PI") counts are performed, the accuracy of the inventory records is tested by periodic cycle counts which provide adequate coverage through an approved cycle count programme. All items are counted at least once annually. Where full counts are in place rather than PI counts, there is a full count performed at least once annually.

• Inventory prices are periodically (at least annually) updated to reflect supplier price changes and regular reviews are performed on valuation accuracy

• Management reviews the levels of inventory & WIP provisions each month, both specific and general, in the light of condition, ageing and turnover