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 service centre of the Group’s financial administration, foreign subsidiaries’ financial administrations and business controllers are responsible for the practical implementation of the control. An independent auditor inspects the accuracy of external financial reporting and also monitors internal reporting.
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 Group’s reporting instructions and principles as well as guideline related to financial reporting and control measures are available to everyone involved in financial reporting on the Group’s intranet.
The main control and monitoring tool is the Group’s monthly financial and forecast reporting process that analyses the Divisions’ results and deviations against forecasts and against previous year’s results. The performance and other key indicators of the Group and its Divisions are monitored through the Group Management Team’s regular meetings, which also ensure the profitability and effectiveness of operations, and the functioning of internal control.
Moreover, the Divisions monitor the development of their sales and results more frequently, usually on a daily basis.
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 play a vital role in the success of internal control. In order to control the effectiveness and profitability of its operations, the Group must be able to manage risks. Raisio’s internal control is to provide the management with assurance that the established risk management policy is followed.
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 activities. 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.
Each Division conducts its practical risk management in line with the risk management policy and the guidelines established by the Group’s financial administration. Operative responsibility is held by the management of each Division and function. The Divisions survey and identify risks in connection with budgeting and financial reporting, among other things. The Group is prepared for operations in crises and for crisis communication.
Each Division and service function, including financing, reports on its main risks to the Group’s CFO, who then reports on the risks to CEO, the Group Management Team 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.
The Raisio Group is committed to operating responsibly and in accordance with its values and Code of Conduct and to comply with laws and authorities’ guidelines and regulations in its business. In order to achieve these goals, it is essential that we are at all times aware of possible violations and abuses related to our operations.
The Raisio Group has a procedure and a communications channel through which a person employed by the Group, or a customer, partner or other member of the Group’s stakeholder may also anonymously report suspected misconduct related to the Raisio Group or its operations.
Reporting suspicions or findings related to unethical activities or misconducts, such as non-compliance with laws and regulations or with Raisio’s Code of Conduct, corruption, bribery, or conflict of interest or infringement of the rules and regulations governing the financial markets, in particular the securities markets.