The aim of internal control and risk management systems related to Raisio Group’s financial reporting process is to ensure the reliability of financial statements and reporting, compliance with laws and regulations, as well as the ethicality, efficiency and profitability of operations.
Raisio’s internal control is based on the Group’s values and policies.
The Board of Directors has the overall responsibility for organizing the internal control and risk management systems related to financial reporting and risk management. The Board has nominated its Audit Committee to ensure, among other things, that the principles established for financial reporting, risk management and internal control are followed. CEO is responsible for maintaining effective supervisory environment and for the internal control related to financial reporting and risk management.
The Group’s internal control is a process in which the Board, Board’s Audit Committee, management and entire personnel participate. Internal control is thus not a separate organization, but part of the Group’s overall operations.
In terms of internal control, appropriate financial reporting means that the financial statements give a true picture of the Group’s operations and financial position. Raisio’s financial reporting is based on harmonised principles in all Group companies. International Financial Reporting Standards (IFRS) are used both in internal and external reporting.
For financial reporting to be reliable, accounting processes must be properly supervised. The Group’s financial reporting is coordinated by the Group’s financial administration, which is in charge of maintaining and developing the financial reporting process and related supervisory systems. The Group’s financial administration and business controllers are responsible for the practical implementation of the control.
The supervision of financial reporting is based on the reporting principles and guidelines defined by the Group. The interpretation and application of financial reporting standards is centrally handled by the Group’s financial administration, which also supervises compliance with standards and guidelines. The Group’s financial administration is also in charge of determining and centrally maintaining the reporting, budgeting and forecasting processes. Raisio uses a uniform reporting system, and the same principles are applied throughout the Group.
The main control and monitoring tool is the Group’s monthly financial and forecast reporting process that analyses the units’ results and deviations against forecasts and against previous year’s results. The performance and other key indicators of the Group and its units are monitored through the Executive Committee’s regular meetings, which also ensure the profitability and effectiveness of operations as well as the functioning of internal control. Moreover, the units monitor the development of their sales and results more frequently.
For the company’s key business operations, Raisio has defined its processes and related control measures supported by the ERP system and other control measures related to the processes. In terms of internal control, information systems play an important role as many control measures are IT-based. Data transfers related to the financial process have been automated as much as possible, and automation is further developed. Raisio has used external auditors to evaluate its systems and data transfer processes.
Risk identification and assessment of risks is important for the success of internal control. In order to control the efficiency and effectiveness of the Group’s operations, it is necessary to be able to manage risks. Raisio’s internal control must provide management with assurance that the established risk management policy is complied with.
Raisio’s Risk Management Policy defines the objectives, principles and responsibilities of risk management. Risk management is defined as an activity aimed at identifying and assessing significant external and internal uncertainties that may threaten the strategy implementation and target achievement. Identified risks are eliminated, avoided, reduced or transferred to the extent possible. Raisio’s risks fall into strategic, operational, damage and financial risks. Special emphasis is placed on preventive action and its development. Risk management is part of the Group’s day-to-day operations and decision-making. Damages caused by products with inadequate safety and related liability risks are a key issue in the risk management of the Group producing foods and feeds.
The Group’s financial administration is responsible for coordinating, developing and monitoring risk management. External advisors are also used, when necessary, to develop risk management. The Group’s financial administration is responsible for the Group-wide insurance schemes. Their scope is assessed, for example, in conjunction with risk surveys carried out at company sites.
The business units carry out practical risk management work in accordance with the risk management policy and the guidelines established by the Group’s financial administration. Operational responsibility rests with each unit and function.
The units survey and identify risks in connection with, among other things, budgeting and financial reporting. Preparations have been made for crisis management and crisis communication.
Each business unit and service function, incl. finance, reports its main risks to the Group’s CFO, who in turn reports on the risks to the President and CEO, the Executive Committee and the Board of Directors.
As a rule, Raisio has opted to include internal auditing tasks in the duties of the Group’s financial administration and business controllers, who report to the Group’s CFO on matters related to risk management, internal control and audit. Possible findings of internal control and business risks are reported to the Board and its Audit Committee as part of monthly financial reporting.
Verification of the functioning of internal controls is included in the annual audit. If necessary, the Group purchases internal audit services for specified targets from outside the Group. Internal audit service purchased from outside the Group reports directly to the Board.
In terms of related party transactions, Raisio plc complies with current legislation and regulations as well as the recommendations of the Finnish Corporate Governance Code for listed companies (2020), available at cgfinland.fi.
Raisio plc’s Board of Directors has approved of an internal policy for recognizing related parties and related party transactions and principles of monitoring and assessment of related party trans-actions. The company’s financial function maintains a register of the related parties and collects the information of the related party transactions in the register annually. The related party register is not public, and any information entered in it will not be disclosed to third parties, with the exception of any authorities and the auditor entitled to receive such information.
The Company’s internal control reviews the information and reports to the auditors and the Board’s Audit Committee. The Board’s Audit Committee monitors and assesses how transactions between the company and its related parties meet the requirements of standard business practices and commercial terms. In case the related party transaction would deviate from these, the transaction shall be decided by the Board.
Relevant related party transactions will be published as stock exchange releases according to applicable laws and regulations. Related party transactions are reported by the Company in the consolidated financial statements and the principles and processes in connection with such transactions in the Corporate Governance Statement.
During the financial period 2022, the company had no significant related party transactions that would have deviated from the company’s ordinary business operations or from normal market conditions.
Since the year 2016 Raisio Group has had a procedure and communication channel providing the Group employees an opportunity to represent their concerns or observations through an independent channel also anonymously. As of autumn 2021 the company has had a system based on the directive (EU) 2019/1937 on the protection of persons reporting on breaches of European union law i.e. whistleblowing system, through which the notification can be made not only by an employee of the Group but also by the Group’s customer, partner or other stakeholder.
The procedure allows to report not only suspicions or observations of misconduct, but also suspected violations related to financial markets and particularly securities markets (Market Abuse Regulation, Article 32; Securities Markets Act, Chapter 12).