Board of Directors

According to the formal work plan of the Board, the Audit Committee should consist of at least three AGM-elected board members, and the majority of them should be independent of the company and Group Management. The committee members should have specialist competence, experience of and interest in financial and accounting issues. The Board elects the Chairman of the Audit Committee who may not be the Chairman of the Board. The Audit Committee meets before each reporting date, and in addition if necessary.

The Audit Committee supports the Board in fulfilling its responsibilities in internal control and accounting, and to ensure the quality of Gränges’ financial reporting. The purpose is to increase the quality of the audit and to improve contacts between the Board and the company’s auditor as well as to increase the quality and improve the supervision and control of the Company’s financial risk exposure and risk management.

The Audit Committee analyzes and highlights key accounting issues affecting the Group and monitors the financial reporting process to ensure quality. The committee also takes note of the company’s impairment test and its assumptions, assists the Nomination Committee to prepare proposals for auditors and their fees, and assesses the independence of the external auditor.

The company’s risk management process is based on production processes and flows. The Audit Committee considers the identified risk areas. Based on the outcome of that, the committee determines the focus and scope of the internal auditing and establishes an internal audit plan.

Gränges’ internal audit is reported to the Board and must ensure that the company has sufficient internal control systems for financial reporting. The General Counsel is responsible for internal audit. It is performed on a rolling schedule and is conducted by the company’s group finance function with support from the subsidiaries’ finance functions, except for the business that is the subject of the audit. The purpose of applying so called cross-functional audit between the units is to exchange experiences and achieve best practice within the Group.

In conjunction with the quarterly reviews of the company’s financial performance and position, the Audit Committee takes part of management’s assessment of the areas where estimates are important to the Group.

The Audit Committee annually sets a number of focus areas within Financial and Internal Control, Business Control, Treasury, IT and Strategic Projects. The committee will focus extra on the chosen areas during the year.

According to the Board’s formal work plan, the Remuneration Committee shall comprise the Chairman of the Board, and one or more board members, who should be independent in relation to the company and Group Management.

The Remuneration Committee submits proposals to the Board on CEO’s salary and other terms of employment, and sets out limits for other Group Management members’ salaries and terms of employment by adopting guidelines for remuneration principles. The Remuneration Committee evaluates the application of these guidelines. The committee also has the task of monitoring and evaluating programmes for variable remuneration to Group Management that are ongoing or have been completed during the year.