Annual and Sustainability Report 2011 - Teracom

were examined: revenue processes and salary processes. One
aspect of the critical processes related to the financial statements
is to conduct risk assessment in order to make sure that
controls are in place that provide reasonable assurance on the
accuracy of the company's financial reporting.
Control activities
Control activities exist within each area where management
has assessed that there is the greatest risk of a significant
impact on the financial statements. Among other things,
these activities include reporting on deviations, attestation
controls, follow-up on budgets, review of authorizations and
authorities, and follow-up on investments. They also include
several key controls related to the reporting process, which
are performed by the person in the organization who has
been allocated responsibility for that task. The effectiveness
and design of controls are periodically reviewed and tested.
The Group management team also relies on the information
in employee surveys regarding opportunities for improvement
that exist throughout the organization.
Information and communication
The purpose of the Group's information activities is to regularly
provide employees, as well as external stakeholders,
with true and fair information about the Group. The external
information should be factual, accessible, honest and
relevant. According to the Government Ownership Policy,
external reporting for state-owned companies should be
just as transparent as it is for companies listed on the stock
exchange. Therefore, external reporting should, where applicable,
follow the recommendations set out in Nasdaq OMX
Stockholm's regulations. Annual reports and interim reports
are published at www.teracomgroup.se. Internal information
is primarily communicated via the company's Intranet and
managers. Policies, guidelines and instructions are available
to all employees via the company's intranet and commonly
accessible disks. The Group's information and communication
channels for financial reporting purposes are deemed
to be appropriate and well-known. As such, reporting and
feedback from the business to the Board of Directors and
management team is thus possible. Financial information is
collected in conjunction with the month-end closing. Those
persons in charge of subsidiaries and Group functions are
responsible for commenting on such information as well
as any follow-up. This is compiled in a monthly report that
describes the Group's development. These reports are distributed
to the Board of Directors, the Group management team
and the management teams of each subsidiary.
Follow-up
In this phase of control activities, it is possible to assure
the quality of financial reporting and identify any potential
deficiencies. The company's controller function is responsible
for monitoring the business and reporting to the Group
management team. The Group management team and Board
of Directors are assisted by the audit committee and the
company's auditors, which regularly examine and test how
risk management, controls and the management systems are
functioning within the organization. They also help to ensure
that the internal controls that are in place are working as
intended to achieve the stated goals.
Governance for increased profitability and a sustainable
society
Focus on responsibility and business orientation
The catchwords for the government's administration of
wholly owned companies are openness, active ownership and
orderliness.
The owner expects its fully owned and administered
companies to serve as role models in sustainability issues.
Since 2008, the Group has improved by working on sustainability
issues in a more structured way. This has been a
learning process, where the Group has collected the experiences
of its companies and is always striving to improve
and renew itself. The Teracom Group reports its sustainability
work in accordance with the GRI guidelines at the C+ level.
Policies and guidelines
In order to define the Group's fundamental values, a decision
was made in 2010 to update and develop new Group-wide
policies, which were adopted by the Board in December 2011:
• Ethics policy
• Information and Public Affairs policy
• Investment policy
• Finance policy
• Security policy
• Remuneration policy
In addition, there are also the following Group policies:
• Diversity policy
• Environmental policy
• Information security policy
The policies provide the foundation for sustainability
work and were developed in stages. The ability to understand
and live up to these policies on a daily basis is what provides
real value when conducting business and to the Group's
stakeholders. For this reason, it is important to find ways
of implementing the policies that reach all employees. To a
limited extent, companies belonging to the Group supplement
these with company-specific policies, such as quality,
work environment and network security policies.
Ethics policy
The Ethics policy takes precedence over other policies and
governance documents in the Group. It aims to provide
support and guidance to managers and employees. The
policy is based on the OECD Guidelines for Multinational
Companies and the ten principles in the UN Global Compact,
such as human rights, the environment, diversity, labor law
and anti-corruption.
The purpose of the policy is to ensure that all of the
Group's companies and employees behave in a manner that
strengthens the organization's profitability while simultane-
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