Internal Control System Set of Procedures - FINANCE

As HeidelbergCement AG is a capital market-oriented company in accordance with § 264d HGB, § 289, section 5 and § 315, section 2 no. 5, HGB require the Management Board to present a report containing newly introduced compulsory disclosures on the internal control and risk management system in relation to the company or Group financial reporting processes.To prepare this report, the Management Board of HeidelbergCement needs descriptions of the main accounting processes and the corresponding internal controls on Country-level. All countries have to prepare descriptions of the main accounting processes and the corresponding internal controls, and have them accessible for all employees. The ICS processes have to cover the following areas

  • Order to cash
  • Purchase to pay
  • Asset management
  • Payroll
  • Financial Statement Closing Process (FSCP)
  • Reporting
  • IT General Controls (ITGC)
  • Master Data Management
  • Guideline on CBCR to governments (Country by Country Reporting)
  • IFRS 16 process documentation
  • Presentation RCC update 2016_CBCR
  • Other[1]
In order to comply with the Group’s instructions we have prepared a set of procedures as the below index

Procedure No

Description

Objectives

1.

HCT-CLS-RPT-01

Closure –reporting procedure

To ensure correct, complete presentation of financial statements including disclosures as per the local GAAP , IFRS and Group instructions as well as completing the tasks on time.

2.

HCT-P2P-PO-01

Purchase to pay - PO procedure

To ensure the expenses and invoices are legitimate and accurate. To ensure that only the invoices which meet the conditions of the purchase procedure will be booked and paid. Prevent paying a fraudulent invoice, an inaccurate invoice, a vendor invoice twice, and to ensure that all expenses are accounted for.

3.

HCT-P2P-FI-01

Purchase to Pay in case no PO is required

To ensure the expenses and invoices are legitimate and accurate. To ensure that only the invoices which meet the conditions of the purchase procedure will be booked and paid. Prevent paying a fraudulent invoice, an inaccurate invoice, a vendor invoice twice, and to ensure that all expenses are accounted for

4.

HCT-P2P-FI-SV-01

Purchase to pay in case no PO required - small values

This procedure describes the responsibilities of the individuals when purchasing directly from supplier without recording the transaction in SAP for direct consumption.

5.

HCT-P2P-EMR-01

Purchase to pay in case of emergency

To ensure Supply of goods and services as fast as possible when imminently needed to prevent business losses on greater value, such as Plant failure, environmental damage and health or safety risks. In such cases it may be justified to circumvent the HC requirements for recording and purchasing of commercial transactions.

6.HCT-P2P-TRS-01Purchase to Pay treasury procedure

To describe treasury management and effective control in the finance department.

7.

HCT-TAX-01

Tax procedure

To ensure comprehensive and accurate Income Tax Reporting and to describe the tax management in Halyps, and the controls implemented.

8.HCT-FA-ACC-01Fixed Assets AccountingTo ensure correct accounting handling of Fixed Assets. Acquisition, depreciation disposal.
9.HCT-FA-VER-01Fixed Assets Verification, safeguarding of FAThe purpose is to confirm the existence and location of all fixed assets owned by Halyps Building Materials SA. It does not include the verification of mineral reserves.
10.HCT-O2C-RCP-01Order to Cash receipt of paymentTo ensure correct, processing of the receipt of payments through cash, cheques or banks.
11.HCT-O2C-CM-01Order to Cash Credit ManagementTo manage trade receivables, in compliance with laws, regulations and corporate guidelines.
12.HCT-O2C-INV-01Order to Cash Invoicing and Customer Master DataTo ensure all goods are being invoiced with the correct price and correct information for customers.
13.HCT-STCK-CNT-01Stock Taking Procedure/ stock adjustmentsThe procedure covers counting of all inventory items in all business lines.
14.Tax ManualComplete tax procedure and tax calendar
15.HCT-P2P-PO-EMR-list of namesTechnical department personnel assigned to following positions of the procedure.

[1] Please clarify if you have additional processes which have a direct impact on financial reporting and are not mentioned above (if necessary with your local auditor).

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