The AGRANA Management Board recognises its responsibility for the establishment and design of an internal control system and risk management system in relation to the accounting process and compliance with the relevant legal requirements. AGRANA’s system of internal control is structured in such a way as to provide the necessary assurance of the reliability of financial reporting and the externally published financial statements. Standardised Group-wide accounting rules assure the uniformity of accounting across the AGRANA Group. In addition to the consistent enterprisewide policies, the uniform planning and reporting system gives management a comprehensive toolkit for analysing and managing uncertainties and risks in all business areas.
The Group’s Controlling department produces a monthly standardised report containing information on the performance of the Group companies. The specifics covered in the report are uniform across the Group. In addition to detailed sales data, the report contains the balance sheet and income statement and the financials derived from them, such as cash flow, ROCE, working capital, contribution margin, and other variables. The consolidated financial statements are prepared by the Group Accounting department, whose main areas of responsibility are to ensure the correct and complete data transfer from Group companies, carry out the financial statement consolidation and eliminations, generate analytical reports from the consolidated financial statement data, and prepare the appropriate financial reports.
Amid close cooperation between Controlling and Group Accounting, variance analysis is continually performed. The information in internal and external reporting is based on one and the same database. This is assured by the monthly reciprocal validation and adjustment of the data used in internal versus external reporting.
In the interest of the early detection and monitoring of risks, AGRANA further expanded the internal control system in the 2009|10 financial year. An additional monthly risk report for each business segment provides information on the financial trend up to the end of the year, based on the current profitability factors (such as prices of raw materials and energy, and sales prices of AGRANA’s products). The results are reported monthly to the AGRANA Management Board at the division meetings.
Consistent with AGRANA’s business-segment-based organisational structure, the responsibility for implementation and monitoring of the internal control system rests with each segment’s management. The assignment of the Group subsidiaries to the individual segments is based largely on their core business.
AGRANA has an enterprise-wide risk management system. Through this system, all relevant risks and opportunities are identified and evaluated and courses of action are devised as required. The areas of emphasis are the sources and types of risk relevant to the Group, such as the regulatory and legal environment, raw material procurement, competitive and market risks, and financing.
Based on an annual audit plan approved by the Management Board and on a Group-wide risk assessment of all of AGRANA’s activities, Internal Audit examines operational processes from the point of view of risk management and opportunities for efficiency improvement. It also monitors compliance with legal requirements, internal policies and procedures. Further, Internal Audit performs ad-hoc audits at the request of management, focusing on current and future risks. The findings are regularly reported to the AGRANA Management Board and the respective company’s management. In addition, as part of the audit of the consolidated financial statements, the external independent auditor annually evaluates the effectiveness of the internal control system and of the IT systems used. The results of the audit are reported to the Audit Committee of the Supervisory Board.