annual report - Kendrion

Control environment and
financial reporting risk
management in the year under
review
Control environment
The Executive Board is responsible for the
control environment including internal risk
management and control systems, and for
the optimum management of the strategic,
operational, financial and reporting risks
confronting Kendrion. The internal risk
management and control systems extend to
issues including policy-making, processes,
duties, influencing conduct and other
aspects of the organisation that jointly
provide for the achievement of targets and
the prevention or timely identification of
potentially material errors, loss, fraud, or
infringement of legislation and regulations.
During the year under review the major
elements and foundations of Kendrion’s
internal risk management and control
systems were as follows:
Code of Conduct
Kendrion has implemented a Code of
Conduct in its organisation that applies to
all Kendrion staff. The principles and best
practices established in this Code reflect
the main values that need to guide
Kendrion’s staff in the performance of their
duties, and the actions they need to take in
a variety of circumstances and situations.
The core themes include market position,
authorities, corporate social responsibility,
accountability in general, and the obligation
for due care regarding safety and health,
the environment, and social interests.
Kendrion promotes compliance with the
Code of Conduct by continually bringing the
Code to the attention of (new) managers
and staff.
Whistleblower’s Charter
The Whistleblower’s Charter offers the
Kendrion employees an opportunity to
report irregularities or suspicions of
irregularities to the management without
jeopardising their (legal) position. In 2011,
no irregularities have been reported.
Regulations to prevent insider trading
Kendrion has implemented regulations to
prevent insider trading which are designed
to make a contribution to the prevention of
employee infringement of the prevailing
insider trading and market abuse
regulations. These regulations include a
prohibition on dealing in Kendrion’s shares
in the period prior to the publication of the
quarterly, half-yearly and annual figures.
More details about these regulations are
disclosed on page 13.
Rules and Regulations and Letters
of Representation
Kendrion employs Rules and Regulations
and Letters of Representation. The Rules
and Regulations constitute rules of
behaviour governing all Kendrion Managing
Directors. The Letters of Representation are
submitted once a quarter, in a bottom-up
procedure, to the Managing Directors of the
operating companies and Controllers, and
to the Business Unit Managers and their
Controllers. Each officer is required to sign
the letter to confirm to their managers that
the information and financial information
they have reported is correct and complete.
Group Reporting Manual including
Standard Chart of Accounts
Kendrion has implemented a Group
Reporting Manual governing all operating
companies to provide for correct financial
reporting. The Manual is continually
updated. To this end the company has
implemented measures including the
formation of the Kendrion Group Reporting
Committee, with representatives from
the operating companies. Reporting
sets are standardised.
The ERP HORIZON project includes the
implementation of a global Standard
Chart of Accounts, whereby all operating
companies are required to make use of
one detailed accounting structure. This
Standard was developed during the course
of 2011, and was immediately adopted for
the first two IFS implementations in the
fourth quarter of 2011 (see page 10).
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annual report 2011