Risk Management
strategy | innovation | expertiseThe activities of the Group’s service companies expose each of them to financial and non financial risks.
Although the Directors strategically manage the risks within the Group, it is the responsibility of the Directors of the service companies to adhere to the Group’s ethos in managing their company’s exposure to these risks and, where possible, introduce controls and procedures that mitigate the effects of the exposure to risk.
Dependence on Clients
The service companies derive most income from management contracts, which vary in length but most are for five years. As at the Balance Sheet date almost all of the major contracts had in excess of three years to run.
Liquidity Risk
Liquidity risk is the risk that cash may not be available to pay obligations when due. The billing arrangements of the major management contracts are such that funds are usually received in advance, therefore mitigating liquidity risk for the companies. The cash position of each of the service companies is monitored on a regular basis to ensure that sufficient funds are available to meet liabilities as they fall due.