20645_Scapa_AR_160504

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RISK MANAGEMENT CONTINUED Scapa’s internal control framework consists of the following key components: Control environment – The ‘tone at the top’ of Scapa and the foundation upon which all other components of the framework rest. We have tried to capture the attributes, integrity, values and competencies that Scapa employees display within our Code of Conduct. Risk assessment – Our awareness of the risks we face and the actions we take to address and mitigate the risks identified. Control activities – The policies and procedures that help ensure that actions and directives required by management are carried out. Information and communication – The ability for Scapa employees to capture and exchange the information needed to conduct, manage and control our operations. Employees’ understanding of their own role in the internal control framework. Monitoring activities – Continuous review and improvement where necessary to allow the system to react dynamically and change as needed. Site based teams operate against mandated minimum control standards which are issued by the Group Finance Director. Annual assessments of compliance are completed by site teams as part of a controls selfassessment process introduced during 2012/13. Each site team is subject to regular internal audit, with the objective of assessing the extent of compliance with these standards and to assess the accuracy of the controls self-assessment. Financial reporting follows generally accepted accounting practice in all areas. Central review and approval procedures are in place in respect of major areas of risk such as acquisitions and disposals, major contracts, capital expenditure, litigation, treasury management, taxation and environmental issues. Compliance with legislation is closely monitored and reviewed regularly to ensure that any new legislation is taken into account, including compliance with environmental legislation. High standards and defined targets are set for safety, health and environmental performance. RISK AND CONTROL REPORTING STRUCTURE Our internal control structures are designed to provide assurance that the Group is on track in delivering against its strategic objectives. Scapa has a clear structure for ensuring that accurate and reliable information on the adequacy and effectiveness of internal controls is presented to the Executive Team, Audit and Risk Committee and Board. We operate ‘three lines of defence’: > > First line – established and embedded policies and procedures > > Second line – direction and policy set at Group level to enforce consistency. Oversight functions sit at Group level > > Third line – independent challenge and assurance 14 SCAPA GROUP PLC ANNUAL REPORT AND ACCOUNTS 2016
PRINCIPAL RISKS AND UNCERTAINTIES STRATEGIC REPORT STRONG RISK MANAGEMENT IS AT THE HEART OF OUR BUSINESS The following pages summarise the principal risks and uncertainties which the Group faces together with relevant key controls and mitigating factors. The list does not constitute a list of all risks faced by the Group. Risk Accountable Executive Key controls and mitigating factors Risk movement STRATEGIC Business Strategy The Board develops the wrong business strategy or fails to implement its strategy effectively Impact > > Negative impact on long-term growth prospects Heejae Chae Group Chief Executive > > Clear strategy in place which is reviewed by the Board on a regular basis > > Progress against the strategy is monitored by senior management and the Board on an ongoing basis > > Risks relating to the achievement of the Group’s strategy are reviewed regularly by the Audit and Risk Committee and Board Acquisitions and disposals Poor decision making on organisational restructuring Impact > > Adversely affect the Group’s results, weakening shareholder value Heejae Chae Group Chief Executive > > Significant internal and external due diligence processes > > Acquisitions and disposals approval by the Board > > Monitoring of business portfolio and structure at senior management and Board level > > Integration planning for acquisitions across Finance, Operations, HR and Commercial FINANCIAL Financial and treasury Unavailability and cost of funding and foreign exchange Impact > > The Company does not have access to sufficient funds to permit trading as a going concern Graham Hardcastle Group Finance Director > > Access to committed facility of £40m with an additional £20m accordion > > All treasury policies are approved at Board level > > Committed facility providing sufficient headroom and capability > > The Group uses simple products to hedge exposure with no speculative currency transactions Pensions Liabilities increase due to increasing life expectancy, inflation, poor performance in investments compounded by fluctuations in the discount rate Impact > > The pension liabilities and associated cash requirements have a material adverse impact on the Group’s profits and cash flows Graham Hardcastle Group Finance Director > > No final salary pension schemes are open at the Group > > The UK scheme has been closed to new members and future accruals since 2007 > > Active and ongoing liability management programme, including long term funding agreements Risk remains the same Risk increases Risk decreases 15 ANNUAL REPORT AND ACCOUNTS 2016 SCAPA GROUP PLC
Page 1 and 2: STRATEGIC VALUE CREATION SCAPA GROU
Page 3 and 4: FINANCIAL HIGHLIGHTS STRATEGIC REPO
Page 5 and 6: STRATEGIC REPORT REVENUE BY DIVISIO
Page 7 and 8: STRATEGIC REPORT PERFORMANCE AND DI
Page 9 and 10: STRATEGIC REPORT STRATEGIC PROGRESS
Page 11 and 12: STRATEGIC REPORT 2016 STRATEGIC GOA
Page 13 and 14: STRATEGIC REPORT UNDERLYING CASH FL
Page 15: STRATEGIC REPORT RISK MANAGEMENT MO
Page 19 and 20: STRATEGIC REPORT Risk Accountable E
Page 21 and 22: VIABILITY STATEMENT STRATEGIC REPOR
Page 23 and 24: STRATEGIC REPORT Healthcare has del
Page 25 and 26: STRATEGIC REPORT We continue to inv
Page 27 and 28: STRATEGIC REPORT Umquasperum unt qu
Page 29 and 30: STRATEGIC REPORT OUR STRATEGY 2015/
Page 31 and 32: STRATEGIC REPORT The underlying eff
Page 33 and 34: STRATEGIC REPORT projects that prov
Page 35 and 36: STRATEGIC REPORT OUR EXECUTIVE TEAM
Page 37 and 38: STRATEGIC REPORT ENVIRONMENTAL PERF
Page 39 and 40: CORPORATE GOVERNANCE of Group Finan
Page 41 and 42: CORPORATE GOVERNANCE M C BUZZACOTT
Page 43 and 44: CORPORATE GOVERNANCE The Chief Exec
Page 45 and 46: CORPORATE GOVERNANCE Board diversit
Page 47 and 48: CORPORATE GOVERNANCE REPORT OF THE
Page 49 and 50: CORPORATE GOVERNANCE To assess the
Page 51 and 52: CORPORATE GOVERNANCE REPORT OF THE
Page 53 and 54: REPORT OF THE REMUNERATION COMMITTE
Page 55 and 56: CORPORATE GOVERNANCE REMUNERATION C
Page 57 and 58: CORPORATE GOVERNANCE Purpose Operat
Page 59 and 60: CORPORATE GOVERNANCE Purpose Operat
Page 61 and 62: DIRECTORS’ ANNUAL REMUNERATION RE
Page 63 and 64: CORPORATE GOVERNANCE The performanc
Page 65 and 66: CORPORATE GOVERNANCE HISTORICAL CHI
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CORPORATE GOVERNANCE The salary of
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CORPORATE GOVERNANCE shareholders g
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DIRECTORS’ RESPONSIBILITIES FINAN
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CONSOLIDATED STATEMENT INCOME INCOM
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CONSOLIDATED STATEMENT OF CHANGES O
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GROUP ACCOUNTING POLICIES POLICIES
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GROUP ACCOUNTING POLICIES CONTINUED
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NOTES ON ON THE THE ACCOUNTS FINANC
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FINANCIAL STATEMENTS 2. SEGMENT ASS
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FINANCIAL STATEMENTS current status
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FINANCIAL STATEMENTS 9. TAXATION CO
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NOTES ON THE ACCOUNTS CONTINUED FIN
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FIVE YEAR SUMMARIES FINANCIAL STATE
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COMPANY BALANCE SHEET SHEET AS AT 3
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STATEMENT OF ACCOUNTING POLICIES CO
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COMPANY INFORMATION FINANCIAL STATE
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20645_Scapa_AR_160504

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