Internal control

The Board’s description of internal control and risk management regarding financial reporting for the financial year 2016.

The Board is under the Swedish Companies Act responsible for the internal control and governance of the company. The Board ensures that the principles for financial reporting and internal control set by the Board are adhered to and that appropriate dialogue with the company’s auditor is maintained. The Chairman of the Board is also chairman of the Audit Committee.

The Board has evaluated the need to set up a dedicated internal audit function and made the assessment that Duroc’s simple legal and operational structure, combined with control processes and control systems, does not require any special function or internal auditing. The Board as a whole is responsible for the control and governance of the company and the Managing Director is responsible for the day-to-day management and control of the Group’s strategies and business processes as well as the financial reporting and planning. The CEO reports regularly to the Board based on established routines.

The Board shall ensure control and governance of the company by safeguarding that the CEO and other key personnel in the company’s management have the right competence and that the organization is appropriate for the Group’s needs.

The organization – its decision-making, authorities and responsibilities – together with the culture of the company, which is expressed in internal policies and procedures, is important for governance. The Group has a number of policies and instructions that regulate activities such as IT, information, ethics, equality, travel and representation.

The Board has a formalized procedure that clarifies the responsibility of the Board and the division of labor between the members and chairpersons. The Board’s rules of procedure also regulate the division of duties between the CEO and the Board, as well as instructions for financial reporting to the Board.

Duroc has an authorization structure that governs which financial decisions that may be made by the Board, CEO, Subsidiary Board, Subsidiary Head and Individual Officer. The Group management analyzes the ongoing risks and the effectiveness of internal control in the company’s business processes.

A significant part of the company’s internal control is found in the processes linked to financial reporting. In these processes, a number of control activities are performed to ensure the accuracy of internal and external reporting. Duroc’s financial function reports in accordance with established routines in reliable reporting and business systems. The Board’s ongoing dialogue with the company’s auditor also forms an important part of the procedure. The Board receives monthly reports and assessments of the financial situation in the Group’s companies. In connection with quarterly reporting, forecasts and analyzes are made to ensure that the financial reporting is correct, and can be used evaluating the company’s strategies.

Duroc has a defined information policy that ensures that Duroc’s internal and external information management is done properly. Regarding Duroc’s external communication of financial information and other information that may affect the company’s market value, there are established procedures and distribution channels that ensure compliance with NASDAQ Stockholm’s regulatory framework for issuers.