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Risks

The group has a rigorous risk management framework. This is designed to identify the risks that could adversely impact the delivery of the group's strategic aims and to ensure that adequate controls and procedures are in place to mitigate the risks. The group's risks, together with the controls and procedures in place to mitigate the risks, are as follows:

Definition

The risk that a change in external interest rates leads to an increase in the group’s cost of borrowing.

Controls and procedures

  • There is a board approved policy on hedging interest rate risk.
  • The group uses derivative financial instruments to hedge the risk of movements in interest rates.
  • Exposures are monitored by an experienced central treasury department.
  • The interest cost represents a relatively small part of the group’s cost base.
  • See more commentary on interest rate risk.