UNBOUNCE - EXAMPLE PAGE-REPORT-ENTERPRISE DOCUMENT-KINGSPAN - Flipbook - Page 56
Credit risks and credit control
Risk and impact
As part of the overall service package,
Kingspan provides credit to customers and as
a result there is an associated risk that the
customer may not be able to pay outstanding
balances.
At the year end, the Group was carrying a
receivables book of €1,022.9m (2020: €770.2m)
expressed net of provision for default in
payment. This represents a net risk of 16%
(2020: 15%) of sales. Of these net receivables,
approximately 61% (2020: 60%) were covered
by credit insurance or other forms of collateral
such as letter of credit and bank guarantees.
Actions to mitigate
- Each business unit has rigorous established procedures and
credit control functions around managing its receivables and
takes action when necessary.
- Trade receivables are primarily managed through strong credit
control functions supplemented by credit insurance to the extent
that it is available. All major outstanding and overdue balances
together with significant potential exposures are reviewed
regularly and concerns are discussed at monthly meetings at
which the Group’s executive directors are present.
- Control systems are in place to ensure that credit authorisation
requests are supported with appropriate and sufficient
documentation and are approved at appropriate levels in
the organisation.
Employee development and retention
Risk and impact
The success of Kingspan is built upon effective
management teams committed to achieving a
superior performance in each division. Failure
to attract, retain or develop these teams could
have an impact on business performance.
Actions to mitigate
Kingspan is committed to ensuring that the necessary procedures
are in place to attract, develop and retain the skill levels needed
to achieve the Group’s strategic goals. These procedures include
strong recruitment processes, succession planning, remuneration
reviews, including both long and short term incentive plans, and
targeted career development programmes.
Fraud and cybercrime
Risk and impact
Kingspan is potentially exposed to fraudulent
activity, with particular focus on the Group’s
online banking systems, online payment
procedures and unauthorised access to
internal systems.
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Actions to mitigate
The security and processes around the Group’s IT and banking
systems are subject to review by divisional management and
internal audit. These systems are continually reviewed with
updates and improvements implemented as required. Robust IT
and security policy documents and related alerts are circulated
by Group management to all divisions to ensure a consistent and
effective approach is taken across the Group.
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