During FY20, the Group conducted an internal review of its risk management framework against the COSO (2017 revised) framework as part of its continuous improvement processes. The review indicated that the Group’s risk management principles and processes are closely aligned to the COSO framework. The Group will continue to review and refine its risk management processes in future periods to ensure they align with good practice and remain effective in managing risk.
Recognise and Manage Risk
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Risk |
Monitoring and Mitigation |
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A significant deterioration in building activity impacting sales growth and margins |
GWA monitors building activity carefully and this is factored into the company’s monthly reporting, forecasting and annual budget and planning processes. Approximately 58 per cent of GWA’s revenue is generated from the Renovation and Replacements segment in Australia which is the largest and most stable segment of the overall market. GWA’s forward order book for commercial projects remains solid with several major projects secured. |
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A significant movement in the Australian dollar impacting the price of imported products leading to changes in market pricing in order to maintain margins and competitiveness |
GWA monitors foreign exchange rates closely and adopts appropriate mitigation strategies. Approximately 77 per cent of US dollar exposure is hedged at US$72 cents for FY20. GWA’s contracts with major customers include provisions for pricing changes based on significant movements in the Australian dollar. |
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Unforeseen disruptions impacting product supply from offshore suppliers leading to reputational damage, lower sales and loss of market share. |
GWA has exclusive long term supply partnerships with experienced suppliers. GWA’s supply chain processes include dual-sourcing strategies to mitigate the risk of supplier disruption. GWA has its own employees located in Asia working directly with its supply partners. |
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Security risks around external threats to the digital network, IT systems and data could potentially result in adverse operational, financial and reputational impacts through possible system failures and security / cyber breaches. |
GWA has established a formal IT security risk and governance framework to address any current gaps and establish sustainable risk management models and practices across the business. |
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Workplace Health and Safety risks could potentially result in physical injury to employees, contractors or others, or damage to the Company’s reputation. |
GWA remains committed to continuous improvement in workplace health and safety performance and has implemented comprehensive safety systems and processes, communication with employees and increased diligence in identifying and removing safety risks. |
COSO Framework
Certification of Risk Management Controls
In conjunction with the certification of financial reports, the Chief Executive Officer and Chief Financial Officer state in writing to the Board each reporting period that in their opinion:
- The financial statements are founded on a sound system of risk management and internal compliance and control which implements the policies adopted by the Board; and
- The Group’s risk management and internal compliance and control systems are operating efficiently and effectively in all material respects.
The statements from the Chief Executive Officer and Chief Financial Officer are based on a formal sign-off framework established throughout the Group and reviewed by the Audit and Risk Committee as part of the financial reporting process.
Environmental and Social Risks
The Board is committed to sustainable practices throughout its operations and continues to work with key stakeholders and communities. The Board recognises that a sustainable business is one that provides a safe, rewarding and diverse environment for its people whilst operating in an environmentally and socially responsible manner. The Board also accept the increasingly important role the Group’s water saving products and solutions play in enabling customers to conserve and use water more efficiently.
GWA has a strong pedigree and history in developing innovative solutions in water. Sustainability in the area of water solutions has been its mantra for over 40 years. Caroma was the first brand in the world to introduce dual flush technology for toilets in 1980 which has saved approximately 32,000 litres of water per household per annum due to the introduction of full/half flush technology. This technology has subsequently been further developed by Caroma to enable enhanced water conservation.
In September 2021, GWA released its Sustainability Report for FY21 to provide shareholders and other stakeholders with detailed information on its on-going approach to sustainability. The Sustainability Report is available on the GWA website at www.gwagroup.com.au under Sustainability. This report includes information and data on workplace health and safety, water sustainability and innovation, environmental impact, ethical sourcing, governance and risk management, community and people (including diversity and inclusion, education and training).
GWA’s approach to sustainability is based around two central objectives:
- Operating in a sustainable manner across the business by managing resources as efficiently as possible and by acting in a socially responsible manner;
- Providing leading edge products and systems that contribute to sustainability by making life better through sustainable water saving solutions for the built environment.
The Board is committed to reducing greenhouse gas emissions, water consumption and waste production across GWA’s operations. GWA is a low emissions intensity entity as our business activities are less carbon intensive than other sectors. We continue to voluntarily report our carbon emissions and energy use with the reports available on GWA’s website at www.gwagroup.com.au under Carbon Reporting. For FY21 total carbon emissions from GWA’s controlled facilities were approximately 1,869 tonnes of carbon dioxide equivalent (CO2e). This represents an 11.8 per cent decrease on the prior year with the main drivers being the improvement focus and implementation of energy efficiency measures across the Group, the sale of the Heshan, China factory and scale down of NZ manufacturing at the Avondale, NZ site during FY21.
The Board is committed to continuous improvement in workplace health and safety performance through comprehensive safety systems and processes, communication with employees and increased diligence in identifying and removing safety risks. The Group aims to provide a safe and healthy workplace with the objective of an injury free work environment. For further information on workplace health and safety, please refer to the Group’s website at www.gwagroup.com.au under Health and Safety.
The Board is committed to providing stakeholders with a comprehensive understanding of the Group’s tax activities, and in FY17 signed up to the Board of Taxation’s Voluntary Tax Transparency Code (Code). The Code is designed to encourage greater transparency within the corporate sector and enhance the community’s understanding of the corporate sector’s compliance with Australian tax laws. The Group follows the recommendations outlined in the Code in preparing the Group’s Tax Transparency Reports.
Refer to the Group’s website at www.gwagroup.com.au under Corporate Governance for a copy of the Board Tax Policy and Tax Transparency Reports.
