TASSAL GROUP LIMITED ABN Procedures for the Oversight and Management of Material Business Risks. (Approved by the Board 28 May 2015)

Transcription

1 Prcedures fr the Oversight and Management f Material Business Risks TASSAL GROUP LIMITED ABN Prcedures fr the Oversight and Management f Material Business Risks (Apprved by the Bard 28 May 2015) 1 Apprved by the Bard 28 May 2015

2 Prcedures fr the Oversight and Management f Material Business Risks 1 INTRODUCTION Tassal Grup Limited ( Tassal r the Cmpany ) recgnizes that risk is an integral and unavidable cmpnent f ur business. Tassal strives t fster a risk-aware crprate culture in all decisin making in rder t enhance pprtunities, reduce threats and sustain cmpetitive advantage. T supprt this cmmitment, risk analysis is applied thrughut the business by Management at apprpriate levels, fllwing the principles utlined in these Prcedures. 2 RISK MANAGEMENT SYSTEM The Cmpany s risk management system is generally based n AS/NZS ISO 31000:2009 Risk Management and ASX Crprate Gvernance Principles and Recmmendatins. The fllwing principles frm the basis f the Cmpany s risk management plicy: Risk is an integral element f ding business, and there are regulatry and market requirements fr the Cmpany t have a sund system f recgnizing and managing risk. All material business risks are t be identified, analysed, mnitred and reprted n. Management must regularly assess cmpliance with plicies and prcedures and the verall state f risk management and cntrl. The Bard and Management undertake a structured apprach t risk management in all aspects f the Cmpany s business activities particularly any:- majr prpsed prjects and/r investments; changes in the nature f the Cmpany s activities and/r perating envirnment; r when venturing int new perating envirnments which may present different risk prfiles. Material business risks include, but are nt limited t: credit, prject, market, liquidity, peratinal, envirnmental, cmpliance /regulatry, strategic, reputatin r brand, technlgical, prduct /service quality and human resurces risks. Risk ratings are determined by analysing each risk fr the likelihd f ccurrence and the pssible cnsequence shuld the risk ccur. Cnsideratin is als given t the level f current cntrls, systems and strategies which exist t manage the risk. Mitigatin strategies (where pssible) are identified and cnsidered fr all materially rated risks until thse risks are managed t, and maintained at, a level acceptable t the Bard. 2 Apprved by the Bard 28 May 2015

3 Prcedures fr the Oversight and Management f Material Business Risks Frmal risk management reprts n the Cmpany s management f its material business risks are reprted t the Strategy Grup, the Audit and Risk Cmmittee and the Bard. The Cmpany s risk registers and individual risk ratings are als used t dcument risks, develp mitigatin actins and assign accuntabilities. Due t the limitatins that are inherent in any system f risk management and internal cntrl, thse systems are designed t manage rather than eliminate the risk f failure t achieve business bjectives, and can nly prvide a reasnable but nt abslute level f assurance against material misstatement, adverse events r lsses, r mre vlatile utcmes frm arising. 3 RISK OVERSIGHT AND RESPONSIBILITIES The Bard has verall respnsibility fr verseeing the establishment and implementatin f the risk management system. The Bard is als respnsible fr reviewing the Cmpany s plicies n risk versight and management and satisfying itself that Management has develped and implemented a sund system f risk management. The Bard reviews the apprpriateness f: the Cmpany s risk management plicy and strategy; the risks identified as the material risks facing the Cmpany; the cntrl mnitring and reprting mechanisms in place, with the assistance f the Audit and Risk Cmmittee and Management. The Bard is appraised, at least n an annual basis, n the Risk Prfile f the Cmpany and the adequacy and effectiveness f the risk management system. The Audit and Risk Cmmittee assists the Bard in discharging its respnsibility, in the manner set ut in clause 4 belw. In relatin t the Cmpany s financial reprting the Bard btains n a half - yearly basis, a written declaratin frm bth the CEO and the CFO that the system f risk management and internal cntrl is perating effectively in all material respects in relatin t financial reprting risk. Mre generally, the Bard receives regular reprt frm the CEO and Management n cmpliance with the Cmpany s management plicy. The CEO apprves peratinal risk plicy and strategy; reviews peratinal risk reprts fr the Cmpany as a whle; and supprts an envirnment that prmtes prudent risk management practice. The Chief Risk Officer (CRO) ensures a structured risk management apprach is adpted thrughut the Cmpany; c-rdinates verall risk prfile and risk actin plan reprting; in cnsultatin with the Strategy Grup priritises material risks fr the Cmpany; develps and cmmunicates Cmpany plicy 3 Apprved by the Bard 28 May 2015

4 Prcedures fr the Oversight and Management f Material Business Risks and infrmatin abut the risk management prgram t all staff; and establishes apprpriate reprting prcesses t the Audit and Risk Cmmittee and the Bard. All Management and staff are respnsible fr the management, mnitring and reprting f risks. The Cmpany strives t create an envirnment where managing risk is accepted as the persnal respnsibility f each staff member. The Cmpany als has an bligatin t infrm the market f a change t its risk prfile, where the change is likely t have material impact n the price r value f shares in the Cmpany. 4 INTERNAL AUDIT (OR EQUIVALENT) ACTIVITIES The Cmpany s integrated risk management system and internal cntrl envirnment is subject t an extensive audit regime delivered bth internally and via external accreditatin agencies and key custmers. Via the Audit and Risk Cmmittee and Management, the Bard receives briefings which prvide an verview f: the rbustness f the internal cntrl systems Management has implemented t identify, assess, mnitr and manage risk; the adequacy f cmputer systems and applicatins and the cntingency plans fr prcessing financial infrmatin in the event f a systems breakdwn; and the internal audit type activities which are cnducted thrughut the Cmpany, including details f related audit plans, strategies and breadth f activities. The Audit and Risk Cmmittee reviews and assesses the abve and reprts t the Bard with a view t: (d) prviding an apprpriate level f assurance re the effectiveness f crprate plicies and internal cntrl prcedures fr identifying, assessing, mnitring and managing material business risks; ensuring the adequacy f Managements respnse t material internal cntrl imprvement recmmendatins and ensuring that any significant findings and recmmendatins are received, discussed and acted upn n a timely basis; evaluating whether Management is setting the apprpriate cntrl culture by cmmunicating the imprtance f internal cntrl and the management f risk s that emplyees have an understanding f their related risk management rles and respnsibilities; and identifying any gaps in risk management systems that need t be mre apprpriately dealt with. Apprved by the Bard 28 May

5 Prcedures fr the Oversight and Management f Material Business Risks In the event that an internal auditr is appinted, the functin will be perfrmed by a persn ther than the external auditr. The Audit and Risk Cmmittee s duties with respect t that rle will encmpass selectin, remuneratin, internal audit plan scpe determinatin and assessment, reprt review, perfrmance evaluatin and replacement. 5 COMPLIANCE AND CONTROL Specific risk management and internal cntrl mnitring activities undertaken by the Cmpany encmpass, but are nt limited t the fllwing. Credit risk the Cmpany has adpted the plicy f nly dealing with creditwrthy cunterparties and btaining sufficient cllateral r ther security where apprpriate as a means f mitigating the risk f financial lss frm defaults. the Cmpany has frmalised: custmer accunt apprval prcesses t be cmpleted prir t pening a new accunt fr any prpsed custmers; and custmer credit limit and accunt payment mnitring prtcls the Cmpany maintains apprpriate credit insurance arrangements ver a range f majr custmer accunts. Market risk regular reprts are prvided t Management, the Audit and Risk Cmmittee and the Bard n key perfrmance indicatrs reflecting interest and freign currency expsures, liquidity and funding. Interest rate risk: interest rate risk is managed by maintaining an apprpriate mix between fixed and flating rate brrwings and by the use f interest rate swap cntracts. interest rate hedging activities are evaluated t align with interest rate views and defined risk appetite; ensuring ptimal hedging strategies are applied, by either psitining the balance sheet r prtecting interest expense thrugh different interest rate cycles. Freign currency risk: freign currency risk is managed by entering int frward exchange cntracts where the Cmpany agrees t sell specified amunts f freign currencies in the future at a predetermined exchange rate. Apprved by the Bard 28 May

6 Prcedures fr the Oversight and Management f Material Business Risks the bjective is t match the cntract with anticipated future cash flws frm sales and purchases in freign currencies, t prtect the Cmpany against the pssibility f lss frm future exchange rate fluctuatins. the frward exchange cntracts are nly entered int n a cmmitment basis and are managed within apprved plicy parameters and limits. Liquidity / funding risk: liquidity risk is measured by cmparing prjected net debt levels fr the next twelve mnths, r the review date f the Grup s current primary banking facilities, whichever is the later, against ttal cmmitted facilities. fr lnger term (beynd ne year) management, liquidity prjectins shw expected net debt levels n at least a rlling 12 mnth basis encmpassed within the Cmpany s lnger term strategic plan financial mdel. fr shrt term management, rlling mnthly cash flws are prvided, and these are updated n a daily basis. Operatinal and cmpliance risk Prduct Quality Assurance clearly defined standard perating prcedures are implemented as part f Tassal s Integrated Management System (TIMS), which cver the elements f gd manufacturing practices and fd safety regulatry and standards cmpliance within Tassal; training prgrams are run regularly fr technical and peratinal staff; peridic external audits are undertaken by authrities such as Australian Quarantine Inspectin Service (AQIS) with regular reprts t Management, the Bard Audit and Risk Cmmittee and the Bard; regular custmer and apprved supplier audits are undertaken; stringent labratry testing prgram f raw materials and finished prduct is undertaken. Wrkplace Risk cmpliance audits are undertaken t cnfirm achievement f legislative requirements; envirnmentally sustainable wrk practices are fllwed; Apprved by the Bard 28 May

7 Prcedures fr the Oversight and Management f Material Business Risks frmally cnstituted Safety Cmmittees deliver dcumented utcmes; cmpetency assessment is maintained thrugh learning and develpment prgrams fr peratinal staff ; an active injury management prgram is maintained. Insurance An insurance prgram is maintained cvering majr areas f risk assciated with the Cmpany s peratins. In additin t, and cnsistent with, the abve risk management and internal audit type activities, the Cmpany has put in place the fllwing types f internal cntrl t address ther key peratinal risks f the business with particular fcus n sustainable aquaculture risk mitigatin: (d) (e) (f) An rganisatin structure with well-defined scpes f respnsibility, clear lines f accuntability, apprpriate levels f delegated authrity and apprval limits, and adequate segregatin f duties. A prcess f hierarchical reprting which prvides fr a dcumented and auditable trail f accuntability. A cmprehensive set f dcumented internal plicies and prcedures fr peratinal, financial and human resurce management, which is subject t regular review and imprvement. Regular and cmprehensive infrmatin prvided t Management, the Audit and Risk Cmmittee and the Bard cvering financial and peratinal perfrmance and key business indicatrs, fr effective mnitring and decisin making. A cmprehensive business planning and detailed budgeting prcess which establishes plans and targets against which perfrmance is mnitred n an nging basis. Mnthly mnitring f results against budget by all divisins, with majr variances being fllwed up and Management actin taken, where necessary. 6 DISCLOSURE These Prcedures will be made publicly available by psting n the Cmpany s website in a clearly marked Crprate Gvernance sectin. 7 WHO TO CONTACT Any questins relating t the interpretatin f these prcedures shuld be frwarded t the Cmpany Secretary. 7 Apprved by the Bard 28 May 2015

8 Prcedures fr the Oversight and Management f Material Business Risks 8 HISTORY These Prcedures supersede thse apprved by the Bard n 29 May Apprved by the Bard 28 May 2015