Full directors report - Mondi

Board committees focus on specific
risks such as safety, and provide
relevant assurance to the Boards.
The finance heads of the business
units provide six-monthly confirmation
that financial and accounting control
frameworks have operated
satisfactorily. The Boards also receive
assurance from the DLC audit
committee, which derives its
information in part from regular
internal and external audit reports of
the Group’s risk and internal controls.
The Group’s internal audit function is
responsible for providing independent
assurance to the DLC executive
committee and Boards on the
effectiveness of the Group’s risk
management process.
Key elements of the Group’s system of
internal control are:
• a clearly-defined organisation
structure with established
responsibilities;
• a simple and focused business
strategy, restricting potential risk
exposure;
• Group financial, business conduct,
operating and administrative policies
and procedures which incorporate
statements of required behaviour;
• a continuous review of operating
performance;
• a comprehensive reporting system,
including monthly results, annual
budgets and periodic forecasts,
monitored by the Boards;
• approval by the Boards of all major
investments, with proposals being
subject to rigorous strategic and
commercial examination;
• a centrally co-ordinated internal
audit programme, using internal
and external resources to support
the Boards in ensuring a sound
control environment;
• completion by business unit
management of a six-monthly
internal control assessment,
confirming compliance with Group
policies and procedures, detailing
controls in operation and listing any
weaknesses;
• assurance activities covering the
key business risks summarised and
reported annually to the Boards,
the DLC audit committee or, where
appropriate, the DLC sustainable
development committee; and
• annual risk-profiling by local
businesses and the Group to
identify, monitor and manage
significant risks, with the results
discussed at business reviews and
internal control, audit and risk
meetings.
Risk management
The Board’s risk management policy
encompasses all significant financial,
operational and compliance-related
risks which could undermine the
Net debt down by
E173 million
Group’s ability to achieve its business
objectives. Mondi’s dynamic risk
management system has the
commitment of the Group’s senior
management and is designed so that
different businesses can tailor their
processes to the specific
circumstances. Clear accountability
for risk management is a key
performance criterion for the Group’s
line managers, who are provided with
appropriate support through Group
policies and procedures. The requisite
risk and control capability is assured
through Board challenge and
appropriate management selection
and skills development. Continuous
monitoring of risk and control
processes across all key risk areas
provides the basis for regular reports
to management, the DLC executive
committee and the Boards.
Principal risks and
uncertainties
It is in the nature of Mondi’s business
that the Group is exposed to risks
and uncertainties which may have an
impact on future performance and
financial results, as well as on its
ability to meet certain social and
environmental objectives. The Group
believes that it has effective systems
and controls in place to manage the
key risks identified below.
Directors’ report
Annual report and accounts 2009 Mondi Group 31