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Business review 2009<br />
Other risks<br />
<strong>Refresco</strong>’s businesses are exposed to varying <strong>de</strong>grees of risk<br />
and uncertainty related to other factors, including competitive<br />
pricing, consumption levels, physical risks, legislative, fiscal,<br />
tax and regulatory <strong>de</strong>velopments, terrorism and economic,<br />
political, and social conditions in the environments where we<br />
operate. All of these risks could materially affect the Group’s<br />
business, revenue, operating profit, net profit, net assets<br />
and liquidity. There may be other risks that are unknown to<br />
<strong>Refresco</strong> or that are currently believed to be immaterial.<br />
Insurance<br />
As a multinational group with diverse product offerings and<br />
operations in eight countries, <strong>Refresco</strong> is subject to varying<br />
<strong>de</strong>grees of risk and uncertainty. It does not take out insurance<br />
against all risks and retains a significant element of exposure<br />
to those risks against which it is insured. However, its business<br />
assets in each country are insured against insurable risks as<br />
<strong>de</strong>emed appropriate. It is insured against key risks like fire,<br />
business interruption and product and general liability.<br />
Internal Control and Reporting Procedures<br />
In 2008 we started internal audit procedures supported by<br />
KPMG, which were continued in 2009. These procedures play<br />
a key role in providing an objective view and continuous<br />
reassurance of the effectiveness of risk management and<br />
related control systems throughout <strong>Refresco</strong>, to both business<br />
unit management and the Executive Board. The Group recently<br />
established an in<strong>de</strong>pen<strong>de</strong>nt Audit Committee, comprising<br />
entirely of Supervisory Board members, which started its<br />
activities in 2009. The Committee has met twice to discuss<br />
various internal control and audit measures. The Committee<br />
has discussed IFRS reporting standards and agreed to use<br />
them as of 2009.<br />
<strong>Refresco</strong> has a comprehensive budgeting and monthly reporting<br />
system with an annual budget approved by the Executive and<br />
Supervisory Boards. Monthly reporting routines are used to<br />
monitor performance against budget and previous year.<br />
It is <strong>Refresco</strong>’s practice to bring newly acquired companies into<br />
the Group’s governance procedures as soon as is practicable,<br />
and in any event, by the end of the first full year of operation.
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