Pursuant to the Swedish Companies Act and the Swedish Corporate Governance Code, the Board is responsible for internal controls.
Kungsleden's report has been prepared pursuant to section 3.7.2 and 3.7.3 of the Code, and is thus confined to internal control of financial reporting. Control activites have been designed to manage the essential risks associated with financial reporting. At present, internal controls are considered satisfactory and expedient for an organization of the company's scale.
The control environment the Board and management continually utilizes forms the foundation of internal controls, although decision paths, authority and responsibility delegated and communicated within the organization are also important. The company works continuously and actively on mapping, evaluating and managing the risks the company is exposed to in its operations.
Kungsleden is a process-oriented company, and integrates risk assessment routines into its essential business processes. The risks identified regarding financial reporting are managed through the company’s control structure encompassing business controls and business planning processes including supporting IT systems.Tools for monitoring operations, prepared and used both for preparations ahead of property acquisitions and divestments, and for overall monitoring of operations, and as support in valuations, are examples of the company's control documents.
The company has designed its internal controls so that it conducts expedient control activities at an overall level (such as ongoing profit analysis on the basis of operational and legal group structures and analysis of key figures) and more routine and system-oriented controls such as reconciliation, and certification and similar controls intended to prevent, discover and rectify errors and deviations.
The Board of Directors receives ongoing financial reporting, and each scheduled Board meeting considers the group’s financial position. The company’s auditors also personally report their observations from their audit, and their evaluation of internal controls annually.
On assignment from the Board, the company management is conducting a project to document the company's internal control of financial reporting. The company has no internal audit function. At present, internal controls are considered satisfactory and expedient for an organization of Kungsleden’s scale. No indication that internal controls are insufficient has arisen, and accordingly, the Board and management do not perceive any need for an internal audit function.