Page 57 - Loomis Annual Report 2017

Loomis Annual Report 2017
Corporate Governance Report 53
• Internal control activities: Over the past few years Loomis has developed methods for scrutinizing and monitoring internal control within the Group. Loomis’ internal control activities consist primarily of:
- Developing the Group’s general policies and guidelines.
- Following up on the external auditor’s work and attend to ma-
terial observations and recommendations.
- Being responsible for control and compliance issues for the
Group and the subsidiaries.
- If necessary, conducting speci c investigations and acting
as project manager on behalf of Group Management in
compliance-related areas.
- Monitor nancial reporting as well as signi cant routines and
control processes. Through visits to di erent countries by
Loomis’ own personnel, or with the assistance of external parties. - Cash auditors within the Loomis Group examine reconciliation routines within the operational cash handling operations on a regular basis. This work includes making an inventory of cash stored at Loomis’ cash processing centers. This inventory work is done in addition to the daily reconciliation performed at all
of the cash processing centers.
• Financial monitoring – Local CFOs in the Group companies play a key role in creating the environment required to ensure that nancial information is transparent, relevant and current. Local Country Presidents and CFOs are responsible for ensuring that the adopted policies and guidelines are complied with and that routines for internal control of nancial reporting are work- ing e ciently in each country.
• Letter of representation – The Group has a system for the rati cation of the annual nancial statements whereby, at the end of the year, Country Presidents and CFOs sign a Letter of Representation in which they con rm that the Group’s policies and guidelines have been followed and that the report package provides a true and fair representation of the nancial position.
Other
Prepartion for the new EU legislation concerning General Data Protection Regulation (GDPR), which will become e ective in May 2018, has been concluded and implementation is ongoing in the organisation.
Managing and monitoring risk – In addition to operational risk management carried out by the subsidiaries and regions, the Loomis Group has a global risk department. The risk department works to prevent operational losses, such as loss of life and good
health as well as loss that is purely nancial. The Executive Group Risk Director reports to the President and CEO, and the Audit Committee. Loomis measures, reports and monitors operational risks on a regular basis. The Group’s overall risk management is also reinforced by comprehensive insurance coverage.
4. Information and communication
Information and communication are essential for an internal con- trol system to be e cient. Loomis has developed routines and an information system to provide Group Management and the Board with reliable reports on the Company’s performance in relation to established targets.
5. Monitoring activity
Loomis’ Board, President and CEO and the Group CFO monitor internal control of nancial reporting. The procedures used by the Board to scrutinize the e ciency of the internal control system include:
• Discussions with Group Management on risk areas identi ed by Group Management and the risk analysis performed.
• Addressing important issues arising from the external audit and other scrutiny/investigations.
• Review of Group Management’s monthly reporting including the actual results compared to budget, analysis of deviations, moni- toring of key performance indicators and forecasting activity.
• Appointment of an Audit Committee to provide independent oversight of the e ectiveness of the Group’s internal control sys- tem and nancial reporting process. The Audit Committee dis- cusses speci c and signi cant accounting principles as well as the estimates and assessments made when the reports are com- piled. The Audit Committee also reviews the interim and annual reports before recommending that the Board approve the re- ports for publication.