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BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012 corporate governance OUR DECENTRALISED MODEL EMPOWERS THE MANAGEMENT OF OUR BUSINESSES TO IDENTIFY, EVALUATE AND MANAGE THE RISKS THEY FACE. LOSS OF KEY EMPLOYEES OPERATIONAL RISKS FOOD SAFETY & INTEGRITY GROUP TECHNICAL DIRECTOR COMMODITY PRICE INFLATION HEALTH AND SAFETY MARKET RISKS CONSUMER UNDERSTANDING CHIEF EXECUTIVE OFFICER CUSTOMER RELATIONSHIPS INTEREST RATES, LIQUIDITY AND CREDIT COVENANT COMPLIANCE CHIEF FINANCIAL OFFICER FINANCIAL RISKS RISK IDENTIFICATION AND MANAGEMENT Our decentralised model empowers the management of our businesses to identify, evaluate and manage the risks they face on a timely basis. Key risks and internal control procedures are reviewed at Group level by the Management Board and the management of principal risks is assigned to key members of the Management Board. It is their responsibility to report to the Board on a monthly basis regarding the actions associated with each of those risks. In 2011 we reported eight risks, the mitigation of which is paramount to the day-to-day running of our business and the achievement of our long-term vision. Following a risk assessment in 2012, it was confirmed that all eight identified risks remain key risks to the business. These are: Food safety and integrity, Health & Safety, Loss of key employees, Customer relationships, Consumer understanding, Commodity price Inflation, Covenant compliance and Interest rates, Liquidity & credit. For more information about why these risks are deemed to be key, how we aim to mitigate them and who is responsible for managing them see page 49 and 50. CONTROLS AND COMPLIANCE The Board conducts an annual review of the Group’s systems of internal control. These systems provide an ongoing process that identifies, evaluates and manages the risks that are significant in relation to the fulfilment of the Group’s business objectives. The systems are designed to manage rather than to eliminate all possible risk and to provide reasonable, but not absolute, assurance against material misstatement or loss. The system also supports management’s decision-making, improves the reliability of business performance and assists in the preparation of the Company’s consolidated accounts. RISK MANAGEMENT PROCESS operational risks technical & she* audit team(s) group board management board Responsible for management of principal risks and reviewing key risks and internal control procedures alongside Audit committee financial risks Dedicated teams responsible for assessment and management of risks at operational level internal audit market risks marketing and npd* teams *SHE: Safety, Health and Environment *NPD: New Product Development PAGE 47 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM
BAKKAVOR ANNUAL REPORT AND ACCOUNTS 2012 corporate governance IN 2012 WE HELD OVER 600 MEETINGS AND TELEPHONE CALLS WITH INVESTORS AND ANALYSTS. INVESTOR ENGAGEMENT PROGRAMME 200 one-on-one investor meetings agm quarterly reporting corporate website relaunched >350 attendees or call participants on results days 45 investors who toured our factories AUDIT COMMITTEE The Board has delegated authority to the Audit Committee, which comprises key management across the business, to regularly monitor internal controls. Each year the Audit Committee meets to discuss and approve the nature and scope of the audit programme for the year. The Audit Committee then instructs the internal audit function to undertake the agreed schedule of audits, during which the effectiveness of the controls operating within the business are reviewed. The Group’s internal audit function, which comprises both employees and professionals from an external provider, RSM Tenon, has the skills and experience relevant to the operation of each business. In addition to our internal audit function, the completion of comprehensive internal control questionnaires is required from all Financial Controllers within each business unit. These self-assessment representations are designed to ensure that any material control breakdowns are highlighted and the operation of internal controls is addressed within each business unit. The results of these representations are reviewed by internal audit before being reported to the Audit Committee. AUDITORS The Audit Committee is also responsible for the appointment of the Company’s Auditor, Deloitte LLP. Annually the Committee reviews the relationships the Company has with Deloitte LLP and considers the level of non-audit services provided by the Auditor. The engagement of Deloitte LLP for non-audit services requires approval from the Group Financial Controller and, if significant, the Audit Committee, to ensure that any services provided do not impair the objectivity of the external Auditor. A list of non-audit services provided by Deloitte LLP in 2012 and the associated fees has been provided in Note 6 of the Group’s financial statements. Disclosure of information to Auditor Each of the persons who is a Director at the date of approval of this Annual Report confirms that: • so far as the Director is aware, there is no relevant audit information of which the Company’s Auditor is unaware; and • the Director has taken all the steps that he ought to have taken as a Director in order to make himself aware of any relevant audit information and to establish that the Company’s Auditor is aware of that information. This confirmation is given and should be interpreted in accordance with the provisions of s418(2) of the Companies Act 2006. Deloitte LLP has expressed its willingness to continue in office as Auditor and a resolution to reappoint Deloitte LLP will be proposed at the Company’s Annual General Meeting. ENGAGING WITH INVESTORS The Board delegates the management of Bakkavor’s investor engagement programme to our CEO, CFO and Head of External Affairs. In 2012 the team ran a comprehensive programme and held over 600 meetings and telephone calls with investors and analysts. Please refer to the Investor Relations section on our website for an overview of the 2013 Financial Calendar. PAGE 48 VIEW THE FULL REPORT AT ANNUALREPORT12.BAKKAVOR.COM
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Page 5 and 6: welcome to our Bakkavor 'Fast Read'
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