Consolidated

Question Response Supplementary Question

Supplementary Questions
Yes
1. Accounts Receivable – Aged Reporting. No

If 'No'- provide details

Is aged reporting of receivables regularly produced, and and reasons why not.
made available for business review in a timely manner?

Yes
2. Accounts Receivable – Aged Reporting. No

If 'No'- provide details

Do aged items reported in HFM accurately reflect amounts and reasons why not.
overdue and are processes in place to pursue aged debt?

Yes
3. Accounts Receivable – Receipting No

If 'No'- provide details

Are collections promptly allocated to Customer Accounts in and reasons why not.
the month of receipt? Are they allocated to the appropriate
invoices (and not just to the oldest outstanding items)?

Yes
4. Accounts Payable - Payments No

Are payments released to banking systems only after If ‘No’, provide details of
approval by an appropriately authorised person – two people where this is not the
(dual authorisation)? case.

Yes
5. Accounts Payable - Invoices No

If ‘No’, provide details of

Are invoices matched to Purchase Orders and Goods Receipt where this is not the
documentation prior to being processed (unless one of the case.
exempt categories listed in the Procurement standard)?

Yes
6. Accounts Payable – Employee Expenses No

If ‘No’, provide details of

Is there a process in place (with regular reviews) to ensure
where this is not the
that reimbursements are made :
case.
-        After line manager review?
-        After Concur audit (where Concur is in use)?

Yes

If ‘No’, provide details of

where this is not the
case.
7. General Accounting – Journal entry No
If ‘No’, provide details of
Is the ability to post general ledger journals restricted to where this is not the
appropriately authorised personnel? case.

8. General Accounting – Balance Sheet Reconciliations Yes

No
With regards to all Balance Sheet reconciliations:

·        Are they prepared to an appropriate level of quality and

independently reviewed by another person within GBS? If ‘No’, provide details of
·        Are reconciling items detailed within the reconciliations, where this is not the
and actioned on a timely basis? case.
·        Are they made available for Business review / sign off in a
timely manner?

Yes
9. General Accounting – HFM Uploads No

If ‘No’, provide details of

Are accounting results uploaded, validated and reviewed in
where this is not the
Hyperion in accordance with the monthly reporting timetable?
case.

Yes
10. General Accounting – Fixed Asset Registers No

If ‘No’, provide details of

Are fixed Asset Registers regularly produced, and made where this is not the
available for business review in a timely manner and do they case.
accurately reflect the assets of Orica?

Specific Questions

11. Compliance with appropriate Accounting Standards. Yes

If 'No', what are the
No details (including the
likely dollar impact on
reported figures) and
Are the financial records and additional information provided
reasons for the accounts
to support the consolidated financial reports prepared in
not complying with
accordance with Orica's Accounting Manual, Australian
appropriate Orica’s
Accounting Standards and the Corporations Act?
Accounting Manual,
Accounting Standards
and/or the Corporations
Act?

12. “True and Fair” view of financial information. Yes

No

If 'No', what are the

details (including the
likely dollar impact on
Do the Balance Sheet, Profit and Loss account, and other
disclosures contained in Hyperion (and other information
requests), present a 'True and Fair' view, in all material If 'No', what are the
respects, of the financial position and performance? details (including the
likely dollar impact on
reported figures) and
reasons for the accounts
not being 'True and
Fair'?

13. Financial Records Yes

No

Are financial records properly maintained to correctly record

and explain the transactions, financial position and
performance? These records must enable true and fair
If 'No', what are the
financial statements to be prepared and have been made
details of the financial
available to auditors for inspection where required.
records not maintained
or made available to
External Audit and why
were they not
maintained/provided?

14. Appropriate Internal Controls Yes

No

Have the statements made in Q11, Q12 and Q13 above been
formed on the basis of a sound system of risk management
and internal control, which is operating effectively?

If ‘No’, what are the

details of where this is
not the case?

Supporting Questions
15. Compliance with Group Standards Yes
No If ‘No’, what are the
details (including the
likely dollar impact on
reported figures) and
reasons for the non-
compliance?
 If ‘No’, what are the
details (including the
Can you confirm there no instances of non-compliance with likely dollar impact on
Group Standards that have resulted in (or are likely to result reported figures) and
in) a significant (>$AUD200k) error in the financial reporting? reasons for the non-
compliance?

Other Questions
16. Post Balance Date Events Yes
No
Can you confirm that, after the completion of this If ‘No’, what are the
questionnaire and up to the release of the half year results on details (including the
the 7th May 2018, if you become aware of any material 'Post likely dollar impact on
Balance Date Events' (i.e. events that occur after balance reported figures) of
date that may have a material impact (>AUD$200k)) on the those events?
financial accounts), you will notify the VP Group Finance
immediately?

Yes
17. Any Other Matters to Report No
N/A
Are there any other matters that could potentially materially If ‘No’, provide details
affect (>AUD$200k) the financial statements that have not (including the likely
been reported elsewhere in this questionnaire, or in writing to dollar impact on reported
the Vice President Group Finance (and Vice President Tax for figures) of those matters,
tax matters)? and why has the Vice
President Group
Finance not yet been
informed?
If ‘Yes’, please provide a
summary of the matter
and who you advised in
writing.

18. Corrective Actions Yes

No

Have actions commenced to address and remediate all If ‘Yes’, what are those
significant issues reported within this questionnaire or actions and when are
previously reported in writing to the Chief Financial Officer N/A they expected to be
and Vice President Group Finance (and Vice President Tax for completed? If ‘No’, why
tax matters)? not?
 Consolidated Response
ary Question
Guidance for question (if applicable)

In responding ‘Yes’, you believe that all accounting treatments are

compliant.

Consideration should be given to the resolution of adjustments raised by

the external auditor and the full disclosure of all contingent liabilities.

Any unreconciled/uncleared balances (>AUD$200k) in the Balance

Sheet should be disclosed.

Also, from discussions with your operation's IT representative, you

should ensure there has been no corruption of data which may have
impacted the accuracy of disclosed results in the financial reporting
pack or monthly management reports.

In responding ‘Yes’, you believe that the financial information provided is

true and fair.

Consideration should be given to the resolution of adjustments raised by

the external auditor and the full disclosure of all contingent liabilities.
In responding ‘Yes’, you believe that the financial information provided is
true and fair.

Consideration should be given to the resolution of adjustments raised by

the external auditor and the full disclosure of all contingent liabilities.

Any unreconciled/uncleared balances (>AUD$200k) in the Balance

Sheet should be disclosed.

Also, from discussions with your operation's IT representative, you

should ensure there has been no corruption of data which may have
impacted the accuracy of disclosed results in the financial reporting
pack or monthly management reports.

You should respond ‘Yes’ to this question only when:

- All transactions have been recorded within the IT platform that are used
in preparing the financial statements of your operation (eg. SAP);
- All transactions are fully supported;
- All safekeeping and archiving of records in your operation are in
accordance with Orica’s Group Standard 1. Group Documents and
Record Retention;
- In line with the current Group Standard, critical records should be
retained for a period of 5 years, in the absence of an applicable retention
period or retention schedule.

The definition of “financial records” in accordance with the Corporations

Act 2001 includes:
(a) invoices, receipts, orders for the payment of money, bills of
exchange, cheques, promissory notes and vouchers;
(b) source documents; and
(c) working papers and other documents needed to explain or support:
(i) the methods by which financial statements are prepared; and
(ii) adjustments to be made in preparing financial statements (ie.
journals).

In responding ‘Yes’, you are asserting that financial reporting risks have
been identified, and that there are processes and controls operating
effectively to ensure that accounting standards are complied with,
financial information provided presents a true and fair view of the current
circumstances of the operation, and the financial records are
appropriately maintained.
Note that all material Post Balance Date Events that you become aware
of after submission of this questionnaire and up to the 7th May 2018,
must be immediately reported to the Vice President Group Finance.

In responding ‘Yes’ you are asserting that all potentially material matters
(>AUD$200k) have been communicated in writing to the Vice President
Group Finance (and Vice President Tax for tax matters).

Examples:
- Plans to abandon product lines, or other plans or intentions that could
result in excess or obsolete inventory (that have not been provided for in
the Balance Sheet).
- Potential financial obligations arising from onerous contracts (ie.
contracts where the unavoidable costs of meeting the obligations exceed
the economic benefits received under the contract) that have not been
recorded in the Balance Sheet.

You should only respond ‘N/A’ where you do not have any other matters
that are potentially material.

You should only answer ‘Yes” if actions have commenced to address and
remediate significant issues identified but have not yet been completed.
You will need to also advise the expected completion date.

You should answer ‘No” if actions have not yet commenced to address
and remediate material issues identified and provide advice as to why
they haven’t commenced.

You should only respond ‘N/A’ where you have not needed to detail any
matters for Group Finance attention within this questionnaire.

Question
Supplementary Questions
1. Accounts Receivable – Aged Reporting.
Is aged reporting of receivables regularly produced, and
made available for business review in a timely manner?
2. Accounts Receivable – Aged Reporting.
Do aged items reported in HFM accurately reflect amounts
overdue and are processes in place to pursue aged debt?
3. Accounts Receivable – Receipting
Are collections promptly allocated to Customer Accounts in
the month of receipt? Are they allocated to the appropriate
invoices (and not just to the oldest outstanding items)?
4. Accounts Payable - Payments
Are payments released to banking systems only after
approval by an appropriately authorised person – two people
(dual authorisation)?
5. Accounts Payable - Invoices
Are invoices matched to Purchase Orders and Goods Receipt
documentation prior to being processed (unless one of the
exempt categories listed in the Procurement standard)?
6. Accounts Payable – Employee Expenses
Is there a process in place (with regular reviews) to ensure
that reimbursements are made :
-        After line manager review?
-        After Concur audit (where Concur is in use)?
7. General Accounting – Journal entry
Is the ability to post general ledger journals restricted to
appropriately authorised personnel?
8. General Accounting – Balance Sheet Reconciliations
With regards to all Balance Sheet reconciliations:
·        Are they prepared to an appropriate level of quality and
independently reviewed by another person within GBS?
·        Are reconciling items detailed within the reconciliations,
and actioned on a timely basis?
·        Are they made available for Business review / sign off in a
timely manner?
Consolidated Response
Response Supplementary Question Responses
Yes
No
Generally, GBS AR prepare and submit Debtor’s Aging reports to business (and GA for HFM upload) at
If 'No'- provide details and WD1, after AR ledgers are closed. Apart from the debtor’s aging, there are several other overdue
reasons why not. reports that GBS AR are preparing for business, highlighting the top overdue and to assists the
collectors in identifying the top non- compliant.
Yes
No
Aged items extracted from BI on Hana are reviewed by GBS AR to ensure that AR Aging balances are
tied up with GL balances before submitting to GA for upload in HFM.
Apparent, GBS AR do not have visibility in HFM, to ensure that correct aged amounts are reflected in
HFM, we set a clear message to GA that Aged reports submitted by GBS AR are the only reports that
If 'No'- provide details and
should be uploaded in HFM.
reasons why not.
GBS AR performs collection activities for Australia & Brazil businesses. Account ownership is split
between local finance and GBS AR follows a standard procedure for chasing debts, the steps are
documented on our SOPs. Collection performance are also measure through our monthly KPI, and so
far we are meeting our target KPI.
Yes
No
Customer payments are applied against customer debts as soon as funds hit the bank and transactions
reflected on the bank statement. Customer invoices are cleared following the details of payment shown
If 'No'- provide details and
on the customer remit. If customer remits are missing, payments are temporarily posted as credit on
reasons why not.
account. GBS AR then sends out email inquiry to customer or country collectors to request for the
customer remits. Once remits are receive corresponding invoices are then cleared.
Yes Yes
No Dual authorisation process is still being followed when processing payments thru the online banking
system for all GBS supported entities (US/CA/AU/NZ/SG/UK/NO/DK/SE/CO/PE/ PA/DE/DO/AR) except
for MX and CO (Citi), FI (Nordea), Sweden (DNB) and Venezuela (BBVA) wherein the bank systems
only require one level of approval. BE also requires two levels of online banking approval but this
process remained on the local team.
If ‘No’, provide details of
where this is not the case.
We have GBS HSBC Bank Administrators who are tasked to ensure that only appropriate users have
access to bank accounts based on their approved bank access profile.
The dual authorization is required in the Old Financial Control Standard however, the dual authorization
requirement is no longer mentioned on the new Group Standard for Finance but still observed by most
regions.
Yes
No
Not all of the time. There are cases wherein the Invoices are processed using the GL Account and Cost
Center provided by the procurement team. My estimate is that only 10% of the transactions that we
processed have this kind of set-up.
If ‘No’, provide details of
where this is not the case. No, there are still invoices processed via GL codes. ECS9 – OIPLA still has GL invoices processed,
same as some of the countries in EMEA.
(The data can be provided per sla report)
Yes
No
If ‘No’, provide details of
No, After R2 has gone live, there are no more reviews performed within GBS after line manager review
where this is not the case.
and after Concur Audit. This is already part of the process for Employee Expenses.
Yes
No
We have a SAP Upload process for Panama, Colombia and Belgium which allows us to post directly to
the cash GL accounts. The journals are prepared daily by processors based on the bank transactions.
This is subject to review and approval by the authorized approver (Officer/ Supervisor).
For NA Mining and Germany, journals are prepared by the processor subject to review and approval by
If ‘No’, provide details of the authorized approver (Officer/ Supervisor) supervisor while the posting is done by the General
where this is not the case. Accounting Journals Team.
Journal entry posting is generally bound by user access in SAP that is approved by the individual line
managers. However, SAP roles are too broad that an employee is granted posting access beyond what
he/she is normally authorized in order to obtain access to other transactions needed to perform his/her
other roles.
Yes
No
There is a process developed and put in place by GBS for accounts reconciliation. All reconciliations are
reviewed by the Recon Team internally and some by the Local Finance. Reconciling items identified are
discussed monthly in the management summary call and actions are noted during the discussion. All
reconciliations are stored in Share Point/Shared Drives/ Directly in SAP and are available to both GBS
If ‘No’, provide details of
and Local Finance.
where this is not the case.
For some of the GBS Managed entities, we are not getting enough substantiation or supporting
documents for some balance sheet accounts, many of which are relatively aged. This has been raised in
the Management Summary Report that is discussed with the local finance monthly.

9. General Accounting – HFM Uploads
Are accounting results uploaded, validated and reviewed in
Hyperion in accordance with the monthly reporting timetable?
10. General Accounting – Fixed Asset Registers
Are fixed Asset Registers regularly produced, and made
available for business review in a timely manner and do they
accurately reflect the assets of Orica?
Specific Questions
11. Compliance with appropriate Accounting Standards.
Are the financial records and additional information provided
to support the consolidated financial reports prepared in
accordance with Orica's Accounting Manual, Australian
Accounting Standards and the Corporations Act?
12. “True and Fair” view of financial information.
Do the Balance Sheet, Profit and Loss account, and other
disclosures contained in Hyperion (and other information
requests), present a 'True and Fair' view, in all material
respects, of the financial position and performance?
13. Financial Records
Are financial records properly maintained to correctly record
and explain the transactions, financial position and
performance? These records must enable true and fair
financial statements to be prepared and have been made
available to auditors for inspection where required.
14. Appropriate Internal Controls
Have the statements made in Q11, Q12 and Q13 above been
formed on the basis of a sound system of risk management
and internal control, which is operating effectively?
Supporting Questions
15. Compliance with Group Standards
reconciliations are stored in Share Point/Shared Drives/ Directly in SAP and are available to both GBS
If ‘No’, provide details of
and Local Finance.
where this is not the case.
For some of the GBS Managed entities, we are not getting enough substantiation or supporting
documents for some balance sheet accounts, many of which are relatively aged. This has been raised in
the Management Summary Report that is discussed with the local finance monthly.
Yes
No
Timing is strictly adhered to and controlled globally by the Corporate Finance Team. An SAP HFM tie-out
has been maintained ensuring that all SAP balances are accurately reported to Hyperion.
If ‘No’, provide details of
where this is not the case. In almost all countries, GBS is required to make manual adjustments to the HFM uploads due to
inconsistent usage of the Global Chart of Accounts by the regions.
Yes
No
SAP Asset Register is maintained for all GBS managed entities and reporting for capital spending is
If ‘No’, provide details of done for North America and Australia. For the other entities and regions, detailed reconciliation of Fixed
where this is not the case. Assets accounts is being managed locally. However, in all cases, Regional Business maintains
ownership of asset verification ensuring the accuracy of the asset registers.
Yes
No Customer and Vendor Master Data:
While we believe that GBS cannot validate the impact, we have noted that there are missclassifications
If 'No', what are the details
of suppliers in the Vendor Masterdata and customers in the Customer Masterdata. This data is owned
(including the likely dollar
by the regions. These noted misclassification may have an impact of mistating the split between trade or
impact on reported figures)
non-trade Payables and Receivables.
and reasons for the
accounts not complying
Fixed Assets:
with appropriate Orica’s
For North America, a reclassification of capital spares from inventory to fixed assets occurs on a monthly
Accounting Manual,
basis. However, based on our understanding of the Spares and Consumables Accounting Standards,
Accounting Standards
many items in this reclass are not compliant to the policy. The journal provided each month contains a
and/or the Corporations
screenshot of the policy, but is outdated. The Regional Controller is aware and is currently working to
Act?
resolve this issue.
Yes
No
If 'No', what are the details
(including the likely dollar
impact on reported figures) Analysis of financial statements as well as decisions on rates used and management adjustments has
and reasons for the been retained locally.
accounts not being 'True
and Fair'?
Yes
No
If 'No', what are the details GBS managed records are maintained in electronic system storages (i.e SAP Databases, Sharepoint,
of the financial records not etc). GBS does not maintain any physical documents.
maintained or made
available to External Audit
and why were they not
maintained/provided?
Yes
No
BC Response:
We prepare daily cash reconciliation, perform clearing of accounts and monitor the movements including
the aging of open items in the cash clearing accounts. Timely and accurate clearing and identification of
the open items helps in the monthly bank reconciliation. We also ensure that the responsible team is
aware of the open items and the actions expected from their end.
In terms of payments, we see to it that we follow the predefined criteria and controls to minimize the risk
of incorrect payments especially in manual processing. These criteria include:
1. Mismatch vendor details, no payment.
-Vendor details in all aspects must be the same in the bank, SAP and in the invoice\
If ‘No’, what are the details
of where this is not the 2. No proper invoice support, no payment.
case? - “Proper invoice support” is required in cases wherein the invoice is not yet available but is
supported by business needs signed in accordance with the approval matrix.
3. No approval, no payment.
- This is especially applicable during the half year and year end period when we must hold payments.
We require a higher lever of approval before processing regular and off cycle payments.
Internal controls are embedded in the processes in which GBS has ownership. Many of the controls are
related to user access, which is reviewed monthly (tracked by AMS). In addition, controls related to
review and approvals exist in banking (see above) and general accounting (journals and reconciliations).
Currently GBS is working to consolidate and standardize all controls received in the lift and shift model,
and will develop a strong monitoring process as well.
Yes
No
In Group Standard 7: Procurement - It is clearly stated that all purchases require a Purchase Order in
SAP prior to a purchase being made except for certain identified transactions in the appendices. Not all
countries are complying with the standard mentioned.
If ‘No’, what are the details In Group Standard 5: Invoice Processing - Match vendor invoice against the approved purchase order
(including the likely dollar and receipt documentation prior to processing the invoice for payment. Where Purchase Orders are
impact on reported figures) used, 3- way match is performed before Invoices are processed, except for those non-GR based PO's
and reasons for the non- where 2-way match is in place. Not all countries are utilizing Purchase Orders.
compliance?
In Group Standard 5: Utilize Orica’s Standard Chart of Accounts, HFM mapping and related Finance
Master Data Objects when SAP is the financial system. Most countries do not fully conform to the
standard usage of the Global Chart of Accounts therefore requiring GBS to make manual adjustments to
the mapping between SAP and HFM each month.
 In Group Standard 7: Procurement - It is clearly stated that all purchases require a Purchase Order in
SAP prior to a purchase being made except for certain identified transactions in the appendices. Not all
countries are complying with the standard mentioned.

Can you confirm there no instances of non-compliance with
Group Standards that have resulted in (or are likely to result
in) a significant (>$AUD200k) error in the financial reporting?
If ‘No’, what are the details
(including the likely dollar
impact on reported figures)
and reasons for the non-
compliance?
In Group Standard 5: Invoice Processing - Match vendor invoice against the approved purchase order
and receipt documentation prior to processing the invoice for payment. Where Purchase Orders are
used, 3- way match is performed before Invoices are processed, except for those non-GR based PO's
where 2-way match is in place. Not all countries are utilizing Purchase Orders.
In Group Standard 5: Utilize Orica’s Standard Chart of Accounts, HFM mapping and related Finance
Master Data Objects when SAP is the financial system. Most countries do not fully conform to the
standard usage of the Global Chart of Accounts therefore requiring GBS to make manual adjustments to
the mapping between SAP and HFM each month.

Other Questions
16. Post Balance Date Events Yes
No
Can you confirm that, after the completion of this
questionnaire and up to the release of the half year results on If ‘No’, what are the details
the 7th May 2018, if you become aware of any material 'Post (including the likely dollar
Balance Date Events' (i.e. events that occur after balance impact on reported figures)
date that may have a material impact (>AUD$200k)) on the of those events?
financial accounts), you will notify the VP Group Finance
immediately?

Yes
17. Any Other Matters to Report No If ‘No’, provide details
N/A (including the likely dollar
impact on reported figures)
Are there any other matters that could potentially materially of those matters, and why
affect (>AUD$200k) the financial statements that have not has the Vice President
Will report any additional items at end of month.
been reported elsewhere in this questionnaire, or in writing to Group Finance not yet
the Vice President Group Finance (and Vice President Tax for been informed?
tax matters)? If ‘Yes’, please provide a
summary of the matter and
who you advised in writing.

18. Corrective Actions Yes

No

Have actions commenced to address and remediate all

If ‘Yes’, what are those
significant issues reported within this questionnaire or
actions and when are they
previously reported in writing to the Chief Financial Officer N/A
expected to be completed?
and Vice President Group Finance (and Vice President Tax for
If ‘No’, why not?
tax matters)?