Key features of the Company’s internal control
and risk management systems with respect
to the process of preparation of the financial statements
of Budimex SA and the Budimex Group
The Management Board of Budimex SA is responsible for the implementation and functioning of the internal control system in the process of preparation of separate financial statements of Budimex SA and consolidated financial statements of the Budimex Group.
The obligation to prepare financial statements is carried out in practice by qualified personnel of the Financial Department under the supervision of a Management Board Member — the Chief Financial Officer of Budimex SA.
The preparation of annual financial statements is preceded by the meeting of the Audit Committee with independent auditors in order to determine the scope and plan of the audit, and to discuss potential risk areas which may have bearing on the reliability and accuracy of the financial statements. Additionally, the Budimex Group applies computer software supporting the identification and management of risks related to the preparation of any financial information, including financial statements.
Preparation of the financial statements is a pre-planned process that considers the appropriate allocation of tasks among personnel of the Financial Division of Budimex SA, in correspondence with their competence and qualifications. Separate financial statements of the Company are prepared on the basis of its books of account. The books of account of the most significant Group companies are maintained using the finance and accounting system, SAP R/3, which has been used for financial and management accounting purposes since 1 January 2003. The SAP R/3 system is managed centrally by qualified employees of Budimex SA who define authorisation levels for the entry and modification of transactional data, layouts of key reports and changes in the Company’s chart of accounts.
Consolidated financial statements are drafted on the basis of consistent consolidation packages prepared electronically by individual Group companies. The process of consolidation is executed by the Department of Reporting and Consolidation and is supervised by the Head of the Accounting Department.
The companies of the Budimex Group apply consistent accounting policies approved by the Management Boards of Budimex SA and subsidiary companies. The correctness of application of the accounting policies by individual companies is regularly monitored by the Department of Reporting and Consolidation and by the Controlling Office of Budimex SA.
The Department of Reporting and Consolidation of Budimex SA is responsible for recommending solutions relating to modifying and updating accounting policies and other WSE reporting requirements, as well as for implementing these solutions upon their approval by the Management Board.
During preparation of the financial statements, among others, the following control activities are performed:
- assessment of significant, non-routine transactions in terms of their effect on the financial position of the Group or the manner of their presentation in the financial statements,
- verification of correctness of the assumptions underlying accounting estimates,
- comparative and substantive analysis of financial data,
- verification of arithmetical accuracy and consistency of data,
- analysis of disclosure completeness.
Annual financial statements are forwarded to the Chief Financial Officer for preliminary verification and then to the Management Board for final verification and authorisation.
Annual financial statements are subject to an audit by an independent certified auditor who presents post-audit conclusions and observations to the Audit Committee and then to the Supervisory Board.