Management can use derivative contracts for the protection of currency, interest, and commodity risks as defined in Financial Risks. Any other use of derivatives needs to be approved by the Board of Directors.
The foundation of the Groups´ management and internal control is its values that are defined together with the personnel:
- Develop and improve – for the benefit of the customer
- Trust and be trustworthy
- Operate profitably
- Entrepreneurship means responsibility
The Groups´ values constitute ground rules aimed at guiding the operation of all employees. They are an important prerequisite for the materialisation of Group strategy. The values are reflected in all day-to-day operations, guide the personnel in achieving set targets and help to achieve the goal of the internal control. Together determined values support the participation of the entire organisation and clarify and facilitate both our internal and external communication.
The company’s Board of Directors is responsible for the arrangement and the functionality of the internal control. Internal control, risk management and financial reporting are overseen by the Audit Committee nominated by the Board of Directors. Financial reporting in the Group is carried out by using the Group´s guidelines concerning the reporting. These guidelines are maintained by the Group´s Financial Administration. Financial Administration also oversees that these guidelines are applied and that the internal communication conserning the guidelines is arranged properly.
Board of Directors has approved principles how to prepare consolidated financial statements. Preparing process and controlling operations for consolidated financial statements are specified, as well as are the job descriptions and responsibilities for preparing consolidated financial statements. Adjustments in consolidated financial statements are made before the balances and profit and loss statements of Group companies are booked to Group reporting system to be sure that all company accounts correspond to principles of consolidated financial statements (IFRS). Validity of consolidation is synchronized. Turnover and profit of group and business units are analyzed and compared to views of management and to information from operational systems in the Control function.
Other processes that are significant for financial statements are fixed assets process and sales process. Sales revenues of Group are booked based on information from operational systems. This process is supervised by Group Financial Department. Significant information from sales systems are synchronized monthly with the information in bookkeeping. In Group there are limits for accepting the purchase of fixed assets and the accounting function of Group is also supervising purchases that are activated as assets. Group has an accepted depreciation policy which specifies economic lifetime for goods and components. Group accounting supervises that the depreciation periods that business units have defined are done according to group policy. Economic lifetimes are supervised by group accounting and inventory of fixed assets is done regularly. Depreciation periods are specified by law and by economic lifetime according to prudence principle.
Effective internal control system requires adequate, well-timed and reliable information so that the management can follow the achievement of goals and functionality of controls. This covers both economic and other information, data from information systems as well as other internally and externally gathered information. Management in different levels of Group is continuously supervising and estimating information from financial and operational systems as well as information from internal and external sources, and evaluates the significance of the information for the Group. Directions for accounting and other relevant directions are available in intranet for all and accounting function organizes on demand education related to these directions. Communication between operational units and accounting function is regular. Profit of Group is supervised internally by monthly reporting and it is completed by rolling forecasts. Group financial results are informed to the personnel immediately after the official stock exchange release is published.
Instructions for insiders are available in intranet for all. President and CEO is responsible for Investor Communications.
The auditors control the validity of Group accounting and financial statements and that the management of the Group is organized properly. Control findings and recommendations related to them made by auditors are reported to the Board of Directors and to the Internal Audit Committee.
In the Group internal control means all actions and processes, principles, instructions and organizational structures that aim to increase the probability that all targets can be reached. Purpose of internal control is to ensure the profitability of operations, observance of legislation and contracts, proper administration of assets and validity of financial reporting. The Group applies its internal control in accordance with international COSO-model.
Nurminen Logistics Group consists of parent company Nurminen Logistics Plc, subsidiaries and associated companies. Functionally significant companies in addition to the parent company and the Finnish subsidiary are Russian and Baltic business units which are managed in own companies.
The Board of Directors is responsible for organizing and functionality of internal control. Internal control is managed by Group Management Team and it is executed by the whole organization. Internal control is not a separate function but elementary part of all functions and it is working in all levels of organization. Operational management has the main responsibility of control. Each manager is responsible for organizing the control of the functions, which he/she is responsible for, and to follow that the controls are continuously functional. Support functions such as financial administration, IT department and risk management are supporting Group Management Team and have responsibility to organize the internal control in support functions. Chief Financial Officer is responsible for processes in financial administration and in reporting and shall organize the internal control for these functions.
Internal audit of the company is organized by President and CEO and the Audit Committee. Together they annually decide the focus, resourcing and actions of internal audit. Goal of internal audit is to evaluate and develop the risk management, control, management and administration processes. Internal audit is carried out as broadened external audit.
The company does not have a separate internal audit function. Instead, the internal audit is part of the group’s financial administration. If necessary the Group buys expert services. Contract risks are also managed locally with the assistance of the lawyers representing Business Units. Local auditors audit the procedures of internal control in accordance with the audit plan. Representatives of the financial administration perform certain controls when they visit subsidiaries. The financial management reports on the findings to the President and CEO and the Audit Committee, which in turn report to the Board of Directors. The main focus areas of risk management have been credit and liquidity risk as well as risks associated with railway logistics business operations.