PROFESSIONAL PRACTICE REPORTM.Sc.
Accounting, Audit & Control24/11/2017Sathish Kumar RTel: +91 9916781272e-mail: [email protected] TOC o “1-3” h z u Executive Summary PAGEREF _Toc526692815 h 4Introduction of Cargill Incorporated PAGEREF _Toc526692816 h 5History of Cargill PAGEREF _Toc526692817 h 6Mission statement: PAGEREF _Toc526692818 h 7Vision Statement: PAGEREF _Toc526692819 h 7Cargill Objective: PAGEREF _Toc526692820 h 7Products & Services PAGEREF _Toc526692821 h 8Internship Posting and Experience PAGEREF _Toc526692822 h 8Internal audit assessment following COSO PAGEREF _Toc526692823 h 10Strategic Management Accounting Analysis PAGEREF _Toc526692824 h 21Auditing and Controlling Social Responsibility Activities PAGEREF _Toc526692825 h 39Global Reporting Initiative CSR Initiatives PAGEREF _Toc526692826 h 42Personal Development and self-assessment PAGEREF _Toc526692827 h 45How the experience fits in to overall career goals PAGEREF _Toc526692828 h 46Bibliography PAGEREF _Toc526692829 h 47Executive SummaryThis Internship report has been prepared as per the requirement of ISEG Business School Paris.
This report has the CAPSTONE questions based on the course M.Sc. – Accounting, Auditing and Control. The report is split into three parts Contextual, Analytical and Self-Reflective.The purpose of the report is mandatory for all the students who take up M.Sc. program in IESEG and it is compulsory to validate to get Master’s degree certificate.
The report needs to validated by the respective program Director from IESEG university and students get 30 ECTS credits added to their course credits. It is very important because only when the report is completed and validated students gets completion certificate. This also adds value to the students to showcase their knowledge during the interview and demonstrate the competences to tackle the current situation with the knowledge acquired and how candidate could add value to the company.The first part covers the company Introduction and history of the company origin, Executive members of the company, vision and objectives of the company where I have got opportunity to work (Cargill) for Internship and permanent employee. It briefs about the mission statement, Cargill’s different products and services.
It also contains my Job position or work experience in the company describing the objective of my role in the company, and the expectations, and deliverables of my role.Second part covers more on the analytical that is close to the course studied and applying the practical suggestion based on the class room coaching. This part is again split into three parts which cover Internal Audit Assessment, Strategic Management Account, Auditing and Controlling and Corporate Social Responsibility.Third part covers on the self-assessment, personal development, and contribution towards accomplishing my role and company objectives. Demonstrate the areas of improvement I have made and applied competences to achieve my objectives and company’s goal. Overall experience and career goals.
Last part covers about the bibliography and any other appendix supporting the report.Finally, there would be a PPT of about thirteen slides, covering only the major parts which are covered under this report.Introduction of Cargill IncorporatedCargill Incorporated is an American privately held global corporation based in Minnetonka, Minnesota, and incorporated in Wilmington, Delaware. Founded in 1865, it is the largest privately held corporation in the United States in terms of revenue. If it were a public company, it would rank, as of 2015, number 15 on the Fortune 500, behind McKesson and ahead of AT;T.Some of Cargill’s major businesses are trading, purchasing, and distributing grain and other agricultural commodities, such as palm oil; trading in energy, steel, and transport; the raising of livestock, and production of feed; and producing food ingredients such as starch, and glucose syrup, vegetable oils, and fats for application in processed foods, and industrial use. Cargill also has a large financial services arm, which manages financial risks in the commodity markets for the company.
In 2003, it split off a portion of its financial operations into Black River Asset Management, a hedge fund with about $10 billion of assets and liabilities. It owned 2/3 of the shares of The Mosaic Company (sold off in 2011), one of the world’s leading producers and marketers of concentrated phosphate and potash crop nutrients.Cargill declared revenues of $109.
7 billion and earnings of $2.84 billion in the 2017 fiscal year. Employing over 155,000 employees in 70 countries, it is responsible for 25% of all United States grain exports. The company also supplies about 22% of the US domestic meat market, importing more product from Argentina than any other company, and is the largest poultry producer in Thailand. All the eggs used in US McDonald’s restaurants pass through Cargill’s plants.
It is the only US producer of Alberger process salt, which is used in the fast-food and prepared food industries.Cargill remains a family-owned business, as the descendants of the founder (from the Cargill and MacMillan families) own over 90% of it. As a result, most of its growth has been due to reinvestment of the company’s own earnings rather than public financing. Gregory R. Page succeeded former CEO Warren Staley in mid-2007, as Staley reached Cargill’s mandatory retirement age of 65, and was CEO and chairman until 2013, when he in turn was succeeded by Dave MacLennan.History of CargillThe company Cargill was founded by William W Cargill in 1865 when he bought a grain flat house in Conover Iowa. Year later his brother Sam, and William together built grain flat houses and opened a lumberyard.
Later on, brother James joined the family business. Sam Cargill left and moved to Minneapolis in 1887 to manage the office there, Minneapolis was identified as an important emerging grain center. Later Minneapolis and Crosse operation was incorporated under Cargill Elevator Co. and W.
W. Cargill Co.William Cargill became sole owner when Sam Cargill died in 1903. John MacMilan was termed as general manager of Cargill Elevator Company.
William Cargill died in 1909 and created fiscal crisis for the company, MacMilan worked to resolve the credit issues and to force his brother-in-law William S. Cargill out of the company.John Macmilan ran the company till his retirement. Under his leadership Cargill grew expanding out of Midwest and opening office in East Coast offices, Canadian, European and Latin American. At this time, it saw both record profits and cash crunches which includes the debt left by W. W Cargill.
The company had to issue $2.25 million gold notes to pay off its creditors.The US Commodity Exchange Authority and Chicago Board of Trade accused Cargill of trying to corner the corn market.
In 1938, the Chicago Board suspended Cargill and three of its officers from the trading floor. When the Board lifted its suspension a few years later, Cargill refused to rejoin, instead trading through independent traders. In 1962, Cargill did rejoin the Chicago Board of Trade, two years after the death of John MacMillan, Jr. During World War II, MacMillan, Jr., continued to expand the company, which boomed as it stored and transported grain and built ships for the United States Navy.When the Soviet Union entered the grain markets in the 1970s, demand grew to unprecedented levels, and Cargill benefitted. When Whitney MacMillan, nephew of John, Jr.
, took over the company from Kelm in 1976, revenue approached $30 billion. US government put pressure on big grain exporters with allegations of manipulating the market, and Cargill was a major target, but it emerged without any major changes.In 1979 Cargill entered the meat processing business with purchase of beef processor. It expanded to turkey foodservice and food distribution business which is now known as Cargill Meat Solutions.By 2002, Cargill had over $50 billion in annual sales, twice the amount of its closest rival, Archer Daniels Midland, and had 97,000 employees running more than 1,000 production sites and out of 59 countries.
Cargill’s quarterly profits exceeded $1 billion for the first time during the quarter ending on February 29, 2008 ($1.03 billion); the 86% rise was credited to global food shortages and the expanding biofuels industry that, in turn, caused a rise in demand for Cargill’s core areas of agricultural commodities and technology.https://en.wikipedia.org/wiki/Cargill Mission statement: “Committed to helping the world thrive”Providing customers with deicing solutions which would enhance, save lives and reduce environmental impact. Vision Statement: “Vision is intended to unite, inspire and challenge everything Cargill does.
By embracing and acting on the ideas, driving Cargill to achieve its vision in future. Purpose is to be the global leader in nourishing people”Cargill Objective: “Help improve more than 1 million people’s lives by 2020″Products ; ServicesAnimal NutritionFood and BeverageBio IndustrialAgricultureMeat ; PoultryTransportationFood ServiceInternship Posting and ExperiencePosition held in Cargill is Process Lead in Finance department R2R sub department.My responsibility related to the job are listed below:Process knowledge transfer from Costa Rica and USPosting General Ledger entriesPeriodic Reconciliation of various Balance sheet accountsPeriodic reporting of Management reportsPublishing periodic Income report for the center which I am responsibleReviewing the Balance sheet and make sure we close any issues if foundRecording the Dividend incomeMaintaining the Miscellaneous Investment Balance sheet accountMaintaining Accounts Receivable account and reporting aged debt Maintaining Accounts Payable control accountMake sure accounting controls are followedCreating Inter-company transactionsMaintain the Property and sales tax balance sheetsMaintaining the Chart of Accounts in JDE ERPExpectations of My Role in CargillCargill ExpectationsPeople FirstPlaces the team’s priorities above personal objectives.Seeks out the diverse perspectives and talents of others.Supports and facilitates the developmental efforts of self and others.Responds to and provides constructive feedback in performance discussions.
Authentic & InspirationalShows energy and excitement for the organization’s shared purpose and vision.Demonstrates honesty, authenticity, humility, and transparency when working with others to build trust within the team.Is aware of own impact on others and adapts style to be effective.Honestly and respectfully raises and works to address difficult issues.Systems ThinkerAssesses complex issues from multiple angles in order to get the complete picture.
Understands how decisions and others’ work impact the team.StrategicCreates solutions to meet emerging customer needs based on customer feedback.Leverages understanding of how changes in the marketplace affect the business to improve performance.Considers industry and market trends when making decisions and planning work.Agile & ResilientApplies expertise in ways that are unique or innovative.Explores multiple alternatives and approaches, taking well-reasoned risks to overcome obstacles and find solutions.
Bounces back from setbacks or adversity and encourages others in the team to recover quickly.Takes on the unknown to get work done and meet team goals.Decisive & Results DrivenTakes into account relevant issues and stakeholders when making decisions while moving beyond the need for consensus.Initiates timely action to address important issues.Drives tasks to successful completion and closure.
Holds self and team accountable for meeting goals.Internal audit assessment following COSOCOSO stands for the Committee of Sponsoring Organizations. It was formed by the U.S. Congress through the Treadway Commission in 1992 to address internal control practices.Definition of Internal control – Internal control is a process effected by an entity’s Board of directors, management and other personnel designed to provide reasonable assurance regarding the achievement of objective relating to Operations, Reporting and Compliance.Internal control is Intended to achieve three classes of objectives:Operations – objective includes improving financial performance, productivity, quality, innovation and it also includes safeguarding the assets and assist in risk assessment and development of mitigating controls.
Reporting – make sound decisions and transparent financial information, relating to financial and non- financial reporting, internal and external reporting.Compliance – these are subject to laws, rules and regulations that set minimum standards of conduct.An ongoing or continuous processEffected by people at all levels in organizations, ex: Board of Director, management and other employeesAble to provide reasonable assuranceAdaptable to entity structure.The COSO model for internal control is supported within Cargill by the following policies: Corporate Center Internal Control Statement Guiding Principles Cargill Policy on Shared Responsibility Information Protection PolicyThere are five interrelated internal control components in the COSO Model which are framed in Cargill: Control environment Risk assessment Control activities Information and communication MonitoringControl EnvironmentInternal Control-Integrated Framework provides the following information on evaluating the control environment: An evaluator should consider each control environment factor in determining whether a positive control environment exists. Listed below are issues on which one might focus.
This list is not all-inclusive, nor will every item apply to every entity; however, it can serve as a starting point. Although some of the items are highly subjective and require considerable judgment, they generally are relevant to control environment effectiveness.Assignment of Authority and Responsibility Assignment of responsibility and delegation of authority to deal with organizational goals and objectives, operating functions and regulatory requirements, including responsibility for information systems and authorizations for changes.Appropriateness of control-related standards and procedures, including employee job descriptions. Appropriate numbers of people, particularly with respect to data processing and accounting functions, with the requisite skill levels relative to the size of the entity and nature and complexity of activities and systems.Integrity and Ethical ValuesExistence and implementation of codes of conduct and other policies regarding acceptable business practices, conflicts of interest, or expected standards of ethical and moral behavior.
Dealings with employees, suppliers, customers, investors, creditors, insurers, competitors, and auditors, etc. (e.g., whether management conducts business on a high ethical plane, and insists that others do so, or pays little attention to ethical issues). Pressure to meet unrealistic performance targets — particularly for short-term results — and extent to which compensation is based on achieving those performance targets.Cargill Policy for Payment to suppliers and others:Responsibilities Controllers are responsible to ensure the following controls are met by their teams and their service providers (Cargill Business Services, Treasury, and other internal or external third-party service providers): 1. Payment Obligation: Each payment instruction must be backed by a payment obligation supported with an approved purpose for the payment (e.
g., an approved order for goods and services, tax or regulation, etc.) and Cargill Global Compliance Policy Cargill Payment Control Standards sufficient evidence to support everything required to fulfill the purpose has been completed (e.g., receipt confirmation for goods or services, validation of tax or regulation, etc.). Once the payment is executed, the payment obligation must be closed to prevent duplicate payment. 2.
Independent Verification of Payee Data: Payee data (e.g., beneficiary and banking information for electronic payments or beneficiary and address for checks) must be complete, accurate, and independently verified to ensure payments will be made to the correct payee or an applicable alternate payee. Independent verification of payee data is validation of payee data performed by someone who is not the recipient of the data from an appropriate person representing the payee. The purpose is to ensure the data: • comes from a legitimate source • is accurate• has not been manipulated in any way The process to independently verify payee data and any requested changes to payee data is essential and involves three separate individuals: Payee Data Roles: Payee Data Creator submits payee data, provides for verification and approval. Payee Data Verifier Performs independent verification of payee data. Payee Data Approver Ensures independent verification of payee data was completed and independently verified payee data matches payee data provided by the payee data creator. Integrity of the payee data must be maintained throughout all processes.
The payee data verifier and payee data approver must be unable to manipulate or change payee data throughout the independent verification of payee data process or through any further communication of the data (e.g., for the set-up of a repetitive payment template).
A required change discovered by a payee data verifier or approver during the independent verification of payee data process must be independently verified and approved again by individuals other than the person submitting the change. An individual may have more than one payee data role if necessary, but not within the independent verification of payee data process for the same payee data. Independently verified and approved payee data set up in a repetitive payment template must be contained and secured in a payment system. Existing repetitive payment templates must be reviewed at least every two years to eliminate duplicate or unused templates. Audit logs should be used for tracking any additions or changes to repetitive payment templates.
Evidence of independent verification and approval of payee data must be retained for a period of two years.Risk AssessmentInternal Control-Integrated Framework provides the following information on evaluating the risk assessment: “An evaluator will focus on management’s process for objective setting, risk analysis and managing change, including its linkages and relevance to business activities. Listed below are issues an evaluator might consider. The list is not all-inclusive, nor will every item apply to every entity; however, it can serve as a starting point.Activity-Level ObjectivesLinkage of activity-level objectives with entity-wide objectives and strategic plans. Consistency of activity-level objectives with each other.
Relevance of activity-level objectives to all significant business processes. Specificity of activity-level objectives. Adequacy of resources relative to objectives. Identification of objectives that are important (critical success factors) to achievement of entity-wide objectives.
Involvement of all levels of management in objective setting and extent to which they are committed to the objectives.RisksAdequacy of mechanisms to identify risks arising from external sources.Adequacy of mechanisms to identify risks arising from internal sources. Identification of significant risks for each significant activity-level objective. Thoroughness and relevance of the risk analysis process, including estimating the significance of risks, assessing the likelihood of their occurring and determining needed actions.Country Risk Policy of Cargill SCOPE This policy applies to all business units except for TSF and the fund businesses of CarVal and Black River Asset Management. PURPOSE The purpose of this policy is to provide education and guidance to business units related to the three major categories of country risk (cross-border, economic, & confiscation, nationalization, expropriation and disruption risk (CNED)).
Cross border risk limits are established in order to protect Cargill’s information, assets, and interests and to ensure risks taken are appropriate. POLICY REQUIREMENTS: The FRC will establish limits on the amount of financial risk Cargill is willing to take in certain countries. Business Units are required to monitor and report risks in those countries and to operate within established limits and to work with Treasury/TSF as directed in the procedures.
Control ActivitiesInternal Control-Integrated Framework provides the following information on evaluating the control activities: Control activities must be evaluated in the context of management directives to address risks associated with established objectives for each significant activity. An evaluator therefore will consider whether control activities relate to the risk-assessment process and whether they are appropriate to ensure that management’s directives are carried out. This will be done for each significant business activity, including general controls over computerized information systems (These will be each of the activities identified in evaluating risk assessment). An evaluator will consider not only whether established control activities are relevant to the risk-assessment process, but also whether they are being applied properly. At Cargill, we have a summary of key control activities designed to assist evaluators in fulfilling their responsibilities. As a high-level summary, it can be used to initiate discussions about the policies and procedures that help ensure that directives are carried out in accordance with management’s authorizations. The summary of key control activities presents the essential functions related to the control activities component of internal control. It helps identify business risks and define effective controls to minimize them.
Mini-audits and business review plans are tailored to specific businesses and vary in focus and depth. All of these tools can help evaluators ask the right questions and reinforce the importance of control systems.Balance Sheet ItemsAll Balance Sheet items are consistently valued in accordance with Cargill accounting policies.Assets Cash is adequately safeguarded, deposited as soon as possible, and accurately reported. Bank statements are reconciled.Inventory is accurately valued using a consistent method that has been approved by the product line and Corporate Controller. Inventory records are periodically (at least yearly) verified against physical inventories. If there has not been a clean cut off or weigh-up within the last year, the controller one level up should review the inventory valuations.
A physical inventory at outside storage facilities is taken at least yearly. Inventory adjustments and unusual levels of shrink are investigated promptly.Leases are properly categorized and recorded as operating or capitalLiabilities Purchasing authorities and bid requirements are established and adhered to.Payroll is accurately calculated and recorded. Necessary tax payments are made.All reserves are fully supportable and comply with GAAP/Cargill policies.
Analysis and ReconciliationAn analysis and reconciliation schedule is established in conjunction with the controller one level up. The schedule is strictly adhered to and includes as a minimum: Comparing operating results with standards such as budgets or prior period results, and investigating differences. Reconciling balance sheet accounts and ledgers and clearing or resolving all differences. Comparing merchant’s estimates to actual results and investigating differences where relevant.
Balance Sheet Management policy of CargillSCOPE: This covers all business groups except for the fund businesses of CarVal. PURPOSE: The Balance Sheet Management Policy is in place in order to protect Cargill’s information, assets, and interests and to ensure risks taken are appropriate. It also enforces accurate and honest recordkeeping.
POLICY REQUIREMENTS: Business Groups use a variety of transactions to manage their balance sheets, satisfy customer requests, mitigate credit risks or generate liquidity such as: accounts receivable extensions, accounts receivable selling or factoring, sale and repurchase agreements, letters of credit for initial margin deposits, over the counter commodity swap agreements, supplier advances or payable extensions. While they may be useful in managing the balance sheet, most come with financial statement footnote disclosures, making them visible to our credit providers and credit rating agencies. Treasury and TSF, who act as Cargill’s centers of expertise in balance sheet management, must be involved when Business Groups enter into these transactions. RELATED PROCEDURES:• Accounts Receivable- Extended Terms and Structures • Guidelines for Balance Sheet Management Solutions• Business Group Capitalization Process • Accounts Payable – Extended Terms & StructuresInformation and CommunicationSecurity and back-up procedures are maintained to prevent unauthorized access to and modification of data. Provisions of Cargill’s “Information Security Policy” are implemented. Information technology controls are periodically reviewed with I/T and operating managers. Business continuation/disaster recovery plans are established.
Reporting Business records are kept in a manner that accurately reflects the true nature of all business transactions. Internal and external reporting requirements and deadlines are adhered to. Financial Reporting – Financial reports (FRP, LRPC and budget) are prepared in conformance with the instructions provided with the forms.
For the FRP, actuals, not estimates, are submitted. Planning – Annual budgets and LRPC projections are developed in a format that supports management decision-making and performance measurement. Tax and Governmental Reporting – Tax schedules requested by Cargill’s Tax Department are prepared in conformance with requirements and instructions provided by the Tax Department. All facts concerning business transactions are disclosed to the Tax Department.
Other governmental reports are accurate. The content and frequency of various types of reports are periodically evaluated based on the risks of the business and the needs of the various constituencies. Any recommended changes are reviewed with the requesters.Data and Information policy of CargillSCOPE: This policy applies to all business units and functions of Cargill, Incorporated and its subsidiaries and affiliates (“Cargill”). It should be read in conjunction with Cargill’s Code of Conduct. PURPOSE: This policy supports Cargill’s guiding principle to keep accurate and honest records. Accurate and honest records are critical to making sound business decisions and maintaining the integrity of Cargill’s financial reporting. Failure to provide timely and accurate financial information to Tax and Customs can result in significant legal and commercial risk for Cargill.
This policy is driven by external legal requirements.POLICY REQUIREMENTS: Provide Cargill Tax and Customs with accurate and timely information. RELATED PROCEDURES• Prepare information, reconciliations, reports and analysis as required by, and in consultation with, the Tax and Customs function in support of Tax reporting, planning, audit and litigation defense, including tax provision work papers, tax packages, financial analysis, transfer pricing reports, etc.• Identify the personnel responsible for reviewing information related to tax compliance or tax audits before submission to the Tax and Customs function and establish procedures to ensure the accuracy of data submitted. • Ensure that any accounting method change has been communicated and discussed with the Tax and Customs Function.• Domestic & International data collection via portal schedules (Link to the CFR website) • Personal Property Tax and Excise Tax • Cargill files motor fuel/excise tax returns in multiple jurisdictions each month. Any U.S.
business unit with reportable activity must submit all required information to the Tax and Customs function in a download file by the due date. This information must be reconciled to the ledger and all fields must be complete and accurate. The file must be submitted in the proper format to avoid processing delays. • Cargill Global Compliance Policy • Data and Information Requests • Global Indirect Taxes (VAT, GST, Sales and Use, Excise Taxes) procedure • US Motor Fuel Excise Tax procedureMonitoringInternal Control-Integrated Framework provides the following information on evaluating the monitoring: In considering the extent to which the continued effectiveness of internal control is monitored, both ongoing monitoring activities and separate evaluations of the internal control system, or portions thereof, should be considered.
Listed below are issues one might consider. The list is not all-inclusive, nor will every item apply to every entity; however, it may serve as a starting point.Ongoing Monitoring ofExtent to which personnel, in carrying out their regular activities, obtain evidence as to whether the system of internal control continues to function.Extents to which communications from external parties corroborate internally generated information, or indicate problems. Periodic comparison of amounts recorded by the accounting system with physical assets. Responsiveness to internal and external auditor recommendations on means to strengthen internal controls.
Extent to which training seminars, planning sessions and other meetings provide feedback to management on whether controls operate effectively. Whether personnel are asked periodically to state whether they understand and comply with the entity’s code of conduct and regularly perform critical control activities. Effectiveness of internal audit activities.Government Audits, Notifications and Disputes consultationsSCOPE: This policy applies to all business units and functions of Cargill, Incorporated and its subsidiaries and affiliates (“Cargill”). It should be read in conjunction with Cargill’s Code of Conduct.
PURPOSE: To ensure all issues are managed by the Tax and Customs function. Failure to timely notify the Tax and Customs function can result in significant tax, legal and commercial risk for Cargill. POLICY REQUIREMENTS: Immediately refer all governmental contact with respect to matters involving tax, tax returns and tax reporting to the Tax and Customs function for management, direction, and resolution. RELATED PROCEDURES: Refer all governmental tax audits, inquiries, notifications, settlement offers, and disputes to the Tax and Customs Function for management and resolution.• Ensure that all material tax contingencies have been identified and reviewed by the Tax and Customs function.
• Tax Reserves and Valuation Allowances • Obtain the Tax and Customs function’s approval before taking or reversing any tax related reserve or valuation allowance for U.S. GAAP or local statutory accounting purposes. • Global Indirect Taxes (VAT, GST, Sales and Use, Excise Taxes) • US Motor Fuel Excise Tax Below are the proposal or suggestions for the wire payment process in accordance with COSO framework for Cargill for future benefits.Present Control Process Proposed Control ProcessCargill has many businesses and in each sub business unit, wire payments are managed by more than 1 member or group of members All wire payments in business sub unit should be managed by 1 member or 1 particular group to have better controlCurrently, adding account details for wire payments has two approval within same level One approval should be within the team Manager and other should be with the Finance Director or ControllerWire payment has two approval (verifier and approver) within same level One approval should be reporting Manager and other should be Finance Director or ControllerAt present verifier or approvers do not have approval limits Approval limits should be in placed based on the material of transactionPayment are paid when invoices are received via mail or physical invoice is received Purchase order payment system should be in place to have better control over the payment proofCargill recently migrated from all the old systems of Intercompany Departmental Value, Remote Deposit Capture to one system which is Wallstreet Cash Management. Now there is lot of controls in place in terms of adding new payment details, cash forecasting etc. This system was implemented globally across all the operations which made the treasury team to forecast and maintain the cash flow statements reasonable, considering all my above suggestions.
Strategic Management Accounting AnalysisStrategic Management Accounting means merging of strategic business objectives with management accounting information to input a forward-looking tool that assists management in making business decisions. The focus could be internal or external information related to price, costs, cash flow, and other impacting resources.Since Cargill is a very big private limited company with many sub business units, it is very difficult to know the common tools or techniques used. Different business uses different techniques based on their operations and strategic needs towards their business objective. Some of the tools or techniques used in general are below:Target CostingKaizen CostingLife Cycle CostingTheory of constraints (TOC)Bench MarkingAdvertisementsActivity-Based Management (ABM)Just-In-Time Method (JIT)Kaplan and Norton Balanced Scorecard analysis is outlined with possible critical success factors and measures.
Typical balanced scorecard is classified into one of four perspectives on the business.Financial Critical success factors MeasuresSales New produces salesProfits Return on investmentCustomer satisfactionsCritical success factor Financial measures Nonfinancial measureQuality Amounts of defects Price of defectsCustomer satisfaction Amounts of return Market shareInternal business processCritical success factor Financial measures Nonfinancial measureQuality Costs of scrap Price of scrap and re workProductivity Change in company revenue Production per unit and per machine hourLearning and GrowthCritical success factor Financial measures Nonfinancial measureDeveloping new product Research and Development cost Number of new patents appliedHuman resource development Recruiting cost Personnel turnoverCargill has aligned these four scorecard objectives into the business as following. Cargill publishes the scorecard on quarterly basis and even the financial results are published quarterly. Below gives us broader idea of how Cargill design the scorecard and the objectives of each quarter is given below, along with measures and trends of progress.Lead in our markets Do the ordinary extraordinarily well Use size to our advantage Unleash our people’s potential Be the most trusted partnerBring to life Cargill’s new strategic direction with detailed plans for realizing our purpose, vision and key capabilities.
Measure: Establish a coordinated approach and define key milestones for our five capabilities by Oct. 2017.?Drive Cargill’s growth by becoming market leaders as defined by customer preference and business performance.Measure: Execute on enterprise and function strategies while establishing / refining key performance metrics and competitive benchmarking by Jan. 2018.?Achieve $2.45 billion in earnings to fund our future growth.
Measure: Deliver on earnings goals across our enterprises Deliver benefits of being a world-class, integrated operating company by enabling commercial success with functional and operational excellence.Measures: – Implement best-in-class approaches and standardize across the functions and businesses.- Improve operational excellence to reduce cost of goods sold (COGS) by $400M in FY18 and begin a path to create $1 billion in value by FY20. Improve efficiencies to remain competitive and help customers respond to cost pressures.Measure: Achieve $135 million in efficiencies to offset increases in SG&A costs due to inflation and investments in growth. Send our people home safe every day.Measure: Achieve zero fatalities by advancing our use of leading indicators to reduce SIF** injuries and achieve year-over-year improvement in SIF rate and RIFR**.?Build a high-performance culture and create an inclusive environment that develops our people’s potential.
Measure: – Establish corporate values by Oct. 2017.- Implement Cargill Leadership Expectations.- Increase diversity of manager ranks and build bench strength to support succession planning goals. Leverage insights and expertise across our enterprises and functions to become the most trusted source of sustainable products and services.Measure: – Drive year-over-year progress to achieve EHS 2020 goals.- Develop and implement action plans to advance goals in our four focus areas, including our deforestation commitment.Lead in our markets Goal: Bring to life Cargill’s new strategic direction with detailed plans for realizing our purpose, vision and key capabilities.
Measure: Establish a coordinated approach and define key milestones for our five capabilitiesQ3 Progress: From finalizing Cargill’s updated climate change strategy to identifying our thought leadership pillars, all five of our capability teams are working to achieve their milestones for fiscal year 2018. These milestones are helping us further develop each of the capabilities into a competitive advantage.?Digitalization & Analytics: To help build our Digitalization & Analytics (D&A) capability, we’re working to: drive a new cultural norm; build the necessary infrastructure; develop, attract and retain top talent; and uncover new partnership and investment opportunities.
To that end, we’ve identified D&A leaders for several enterprises charged with defining strategies and building competencies. This fiscal year we’ve released seven digital commercial products with an additional 13 in progress. We’re also securing non-traditional partnerships with organizations such as Techstars and Unilever/Level3, which allow us to work directly with start-up communities around the world.
Market Insights & Innovation: The Market Insights & Innovation team developed a three-year roadmap to grow the maturity of the capability with a clear focus on being broader, bolder and more systematic. We also created an adjusted definition of innovation, along with an expanded set of innovation metrics as part of their work toward performance metrics and process alignment. These new guidelines are designed to help drive more consistent innovation portfolio management in fiscal year 2019. Trading & Risk Management:The Trading & Risk Management team is advancing the work streams of analytics, performance metrics & education, talent, and culture. For example, the Risk Management Group is now generating performance metrics and engaging in review sessions with more than 60 percent of relevant businesses. Looking forward, our trading leads are also developing a vision for what trading and risk management will look like at Cargill in 2025.Sustainable Supply Chains: In late 2017, we launched the Sustainability Hub to lead the development of Cargill’s sustainable supply chain strategies.
The Hub will help orchestrate our companywide sustainability efforts as an integrated operating company. Cargill also took a major step forward in February 2018 with our announcement of a new climate commitment: a 10 percent reduction in absolute emissions in our operations by 2025, against a 2017 baseline. This new commitment is aligned with science-based target methodologies, and is a significantly bolder stance for Cargill on addressing climate change. Thought Leadership & Stakeholder Engagement:Our research has confirmed that our unifying theme – creating connections to nourish the world – and our strategic pillars of sustainable nutrition, responsible trade and farmer prosperity are spaces where Cargill can lead.
Work continues to build out an implementation plan for the coming fiscal year through targeted events, brand activation, and communications activities reaching key stakeholders.Q4 Progress: ?Digitalization & Analytics: In July 2017, Cargill was running 15 digital prototypes. One year later, we are running 50. Over the course of fiscal year 2018 we prototyped 138 digital ideas, stopped 35 initiatives after experimenting, and moved 43 digitalization initiatives into production.Market Insights & Innovation:We successfully integrated the “Ten Types of Innovation” lens to broaden innovation exploration opportunities through pilots in FIBI, CAN and CPS. The pilots – designed to generate new business models – help the innovation teams focus on more strategic and transformational innovation.
Feedback has been very positive, and several teams are currently testing these new business models in the market.Trading & Risk Management:During the quarter, the T&RM team launched a nine-module risk education platform on NourishingU to build a deep understanding of risk across the company. The team is now focused on establishing a strategic vision for the future of trading in Cargill and defining the action steps needed to get there. A framework for addressing this is being designed, which will culminate in a workshop in October attended by several members of the Executive Team and other senior trading and risk experts.Sustainable Supply Chains:Cargill is accelerating our efforts to meet our new 10% greenhouse gas emissions reduction target announced in February 2018. Plant Operations and the BOSC sustainability team are working together to develop tools and processes to have more robust energy and greenhouse gas (GHG) forecasting capabilities, including a more robust approach to long-term energy and GHG planning. The Land Use and Forest Protection working team also continues to make progress across our priority supply chains, and will be releasing an updated Land Use policy along with operational guidelines shortly.Thought Leadership and Stakeholder Engagement:In the fourth quarter, we convened several critical Cargill stakeholders – a customer, a NGO partner, a consumer advocate and a producer – as part of an hour-long Thought Leadership salon.
The panel, facilitated by Amy Thesingh, vice president of strategy, marketing and innovation for Cargill’s global poultry group, discussed how to provide protein to a growing population while reducing the toll on the planet. This was an example of thought leadership and stakeholder engagement in action. The session was anchored around three YamJams hosted by Cargill leaders and experts from around the world who continued the engaging discussion throughout the day.
Goal: Drive Cargill’s growth by becoming market leaders as defined by customer preference and business performance.Measure: Execute on enterprise and function strategies while establishing/refining key performance metrics and competitive benchmarking.Q3 Progress: Cargill’s five enterprises are continuing to make good progress executing against their respective growth strategies, improving our competitiveness across regions through a pivot toward value-added products and improved customer relationships. For example, CASC reached an agreement with ADM in February 2018 to launch a soybean meal and oil JV in Egypt to meet growing local demand for higher-quality feed ingredients.
Also in February, FIBI announced the launch of a new Bio industrial Group to better serve customers in non-food applications. In addition to notable acquisitions of Diamond V and Delacon earlier in the year, through the third quarter CAN has strengthened its portfolio via 10 other deals that include two divestments and eight build projects. CPS continues to focus on building their innovation pipeline, and is on track to realize their target of 10 percent growth in value-added products.
In CMS, both Ocean Transportation and Metals are in the midst of jointly developing proposals that target customers that cross both business groups. All five enterprises have established their scorecards and benchmarks well ahead of the January 2018 deadline. Additionally, the enterprises have been driving toward more overarching benchmarks that not only track how we perform within the industry but also at group level on ROIC, EBITDA margins and SG&A productivity. This includes getting more specific on how we track costs.
For example, CPS is assessing the effectiveness of marketing spend separately from how it assesses operational cost efficiency. FIBI is continuing to mature its Integrated Business Planning process globally, and CAN has completed seven Span of Control projects with $7MM in benefits expected to be realized this fiscal year.Q4 Progress: Our five enterprises made strong progress executing against their respective strategies – improving efficiencies, offering more value-added products and cultivating closer customer relationships. For example, CPS has doubled its earnings target with a strong return on gross investment (ROGI) spread of over 10 percent. The enterprise has also executed well on its value-added strategy, recognized by Target, Tyson, McDonald’s and several others for the value they create. CAN has completed nine acquisitions or equity investments, including a transaction in Q4, and has continued to focus on integration efforts.
They also stood up a new Strategic Marketing & Technology organizational structure to be closer to the customer and began implementing the recently completed Digital Business Systems strategy. FIBI launched the Bioindustrial Group and re-organized its Texturizers & Specialties business to sharpen its focus on customer needs in targeted segments and regions, and has streamlined its innovation portfolio by taking a more market-back approach. CASC will post its best Q4 results since 2011; the strong quarter is a result of good margins in NA and EMEA and strategic pricing in China, which will drive significant growth in bulk. Metals continues to drive deeper customer partnerships in mainland China, while Ocean Transportation continues to differentiate itself in the dry-bulk space, including recently issuing the first sustainability report from a trading company in that industry. All five enterprises have established their scorecards and benchmarks well ahead of the January 2018 target deadline and are achieving high performance. CPS is a top performer on SG&A and return on investment capital (ROIC) benchmarks across several groups. CASC has surpassed its targets for Travel & Entertainment (T&E), productivity and CSSP and is refining its benchmarking process to bring in GEOS and segregate biodiesel earnings.
FIBI is refining its target setting to be more granular on tracking contributions from specialty and bio industrial. CAN has outperformed benchmark competitors on SG&A as a percentage of EBITDA and has focused on function spend through better management of control spans and layers, and leveraging technology to reduce T&E costs. During FY18, Metals’ strong customer-centric model with a global footprint allowed it to generate significant earnings while many competitors struggled to remain profitable.
OT has made progress against the entire industry by deploying a fully digital daily P&L capability that provides a faster feedback loop and is unmatched by any competitor.Goal: Achieve $2.45 billion in earnings to fund our future growth.Measure: Deliver on earnings goals across our enterprises.Q3 Progress: We earned $559 million in the third quarter of FY18, exceeding our quarterly target of $549 million. This brings our year-to-date AOE to $2.4 billion.
Our results were negatively impacted this quarter by changes related to the new U.S. Tax Cuts and Jobs Act, which included a one-time transition tax.Across the enterprises, CAN had a strong quarter, with successful growth initiatives and solid ingredient positioning, which added to new earnings from recent acquisitions including Diamond V. While CASC remains in a highly competitive environment and is below target for the year, volatility in markets increased and led to an upward tick in trading results. FIBI came in slightly above target, with Cocoa & Chocolate boosted by increased production and sales out of Asia.
In CPS, Protein continues to excel, with strong domestic and export demand for North American beef. CMS had a great quarter, with Ocean Transportation customers’ improved financial health allowing us to reduce reserves on our books. TSF had diversified performance across regions, but came in a bit short of target.Q4 Progress: We earned $809 million in the fourth quarter of FY18, which marked a record-high fourth quarter on an adjusted operating earnings (AOE) basis, and exceeded our quarterly target of $627 million by 29 percent. This brought our fiscal year 2018 AOE to $3.
2 billion, one of our best performances to date. Across the enterprises, CPS remained the largest contributor, with the Protein group alone contributing over $1 billion for the year. FIBI’s performance was also strong, with multiple businesses exceeding their full-year targets. While CAN didn’t have a particularly strong fourth quarter, they had a good year overall – benefiting from strong ingredient positions and expanding their offerings in premixes and micronutrition. Increased market volatility in the fourth quarter was mostly positive. CASC successfully captured higher soy crush margins as well as sourcing and trading opportunities, particularly in Europe and North and South America. In CMS, Metals positioned itself smartly in the face of market turmoil due to ongoing tariff-related tension in global markets.
Outside the enterprises, increased geo-political and economic concerns caused TSF to pull back in select emerging markets, while renewed ag market volatility led to increased customer demand for risk management services, boosting CRM’s earnings in the fourth quarter.Use size to our advantageGoal: Improve efficiencies to remain competitive and help customers respond to cost pressures.Measure: Achieve $135 million in efficiencies to offset increases in SG&A due to inflation and investments in growth.
Q3 Progress: In the third quarter, we achieved $66 million in efficiency gains, putting us at $102 million year-to-date. The organization saw broad-based improvement across the businesses and functions. While actions taken in Q3 generated strong efficiency gains, there is still much work to be done to build a sustained culture of cost management. The company needs to stay diligent in the fourth quarter, continuing to execute on the action plans developed.
Q4 Progress: We closed fiscal year 2018 with $190 million in efficiency gains, surpassing our goal of $135 million. We achieved $88 million in the fourth quarter alone, bucking the historical trend of a spike in Q4 expenses. While we should all be proud of the hard work and diligence that made these results possible, it is critical that we remember this is not a one-year exercise. To be successful in fiscal year 2019, we need to continue incorporating the culture of cost management into our DNA.Unleash our peoples potentialGoal: Send our people home safe every day.Measure: Achieve zero fatalities by advancing our use of leading indicators to reduce SIF** injuries and achieve year-over-year improvements in SIF rate and RIFR**. Q3 Progress: Third quarter was a fatality-free quarter for the company, and we remained relatively steady in our recordable injury frequency rate (RIFR) and serious injury and fatality (SIF) rate.
Our RIFR as of third quarter was 1.07 (1,667 total injuries year-to-date), while the SIF rate was .13 (203 SIF injuries year-to-date). Across the company we remain focused on improving these results through efforts to reduce exposures to a variety of safety risks.
Take motor vehicles and mobile equipment, two of our leading causes of fatalities. In line with our policy to eliminate the use of motorbikes on public roads, our animal nutrition businesses in India and Vietnam have begun deploying light cars for their commercial teams. In these two countries, nearly 75 percent of our employees currently ride motorbikes for work, and the transition to safer vehicles will reduce their risk of a fatal accident by a factor of 30. Forklifts are another exposure source. During the past two years, our North American protein business has seen about 50 near misses connected to forklift use. In response, the business developed an extensive list of required safety features for all new forklifts, as well as more advanced procedures for their operation.
These requirements are being adopted by other businesses across Cargill. Plus, both projects have been undertaken with the help of our strategic sourcing function, to ensure that acquired equipment meets high standards as cost effectively as possible. Finally, our new leading metrics are helping us identify SIF exposures in our processes and system before incidents occur.
We introduced two leading metrics last quarter, hierarchy of controls and SIF potential (SIFp) observation rate. As of third quarter, hierarchy of controls came in at 25%, up from 19% last quarter. While we have significant work to do to achieve our target of 60% of controls at or above the engineering level to reduce exposure, we are seeing improved safety controls such as those noted above to improve vehicle and mobile equipment safety. The SIFp observation rate is at 2.
11 for the quarter, compared to 1.85 last quarter. In this case, we want a higher number because that means more Cargill people are willing to report potential near miss incidents, and unsafe conditions and behaviors, more frequently. This is a good thing. During the quarter we’ve also introduced a third leading metric – corrective action and preventive action (CAPA) planning. This goal measures the number and percentage of open action plans and actions plans past due from SIF and SIFp reportable incidents. In other words, are we delivering on our commitments to actions designed to reduce SIF/SIFp exposures and provide our workers a safe environment. Our goal is ZERO past due CAPA plans.
These leading metrics will mature and improve over time, but even in these early stages they are critical to our ability to proactively reduce SIF exposure so that everyone who comes to work at Cargill goes home safe every day.Q4 Progress: In April 2018, we sadly suffered our third fatality of the fiscal year when a colleague died at our Salt packaging facility in Tampa, Florida. At this time, the investigation indicates that his death was the result of injuries suffered while operating a front-end loader, a large piece of mobile equipment used at the facility. While we have not achieved our goal of zero fatalities, there are reasons for optimism based on our overall safety performance during the fiscal year.
Our fatality rate continues to drop; our reportable injury frequency rate (RIFR) reached another all-time low for the company at 1.06, and our serious injury & fatality rate is at .12 (248 serious injuries and fatalities versus 280 during fiscal 2017). Our continued focus on LIFE savers gained significant traction over the year and has helped us see and reduce exposure to hazards associated with those 12 high-risk activities. Through our See Say Stop program, employees have identified more than 4,600 potentially unsafe work conditions or near misses, giving us the chance to correct and protect against them. Across the company, we are changing how we work to be a better, safer Cargill. For example, the corporate Environment, Health & Safety team began work on new, more rigorous standards for mobile equipment operations.
These standards will be deployed globally during fiscal year 2019 to ensure work involving mobile equipment can be performed safely every time. Cargill Agricultural Supply Chain (CASC) continues work on a multi-million dollar project to improve barge safety for our operators. In Pandaan, Indonesia, our FIBI facility is back up and running after a five-month shut down of the hydrogen processing line there to proactively address process safety concerns – before a safety incident could occur. Finally, there is progress against our new leading metrics. The SIF-potential observation rate is trending upwards at 2.
17, although there’s still much work to achieve our target rate of 10 (the higher the rate, the better). This indicates our See Say Stop program is working, and our people are willing to report unsafe conditions and near misses in the workplace, and this is a good thing. During the fiscal year, as measured by our hierarchy of controls leading metric, we saw an increase of 45% in the application of engineering or higher levels of control to isolate or eliminate SIF hazards. Because the other two leading metrics – CAPA (corrective & preventative action plans) were deployed later in the fiscal year, data is still being analyzed and will be reported during fiscal year 2019. As noted last quarter, these leading metrics will mature over time, and will improve our ability to proactively reduce exposure to SIF hazards so that everyone who comes to work at Cargill goes home safe every day.Goal: Build a high-performance culture and create an inclusive environment that develops our people’s potential.Measure: – Establish corporate values by Oct.
2017. – Implement Cargill Leadership Expectations. – Increase diversity of manager ranks and build bench strength to support succession planning goalsQ3 Progress: For the first time, last quarter we published the percentage of women (globally) and underrepresented minorities (U.S. only) in leadership positions.
In the third quarter, women made up 27.5% of all leadership positions globally, compared to a June 1, 2015 baseline of 25.2%. In the U.
S., underrepresented minorities held 12.7% of leadership positions compared to a baseline of 9.6%.
While we are making progress in both areas, that progress must accelerate to stay competitive in the market for top talent and to achieve Paradigm for Parity by 2030. To accomplish our Game Plan for Success and address the evolving needs of the world in which we operate, we must actively recruit and engage a diverse workforce, connecting our people across the globe and continually driving a culture of inclusion. ?To support these efforts, inclusion and diversity continues to be a top priority.
In the United States, February was Black History Month. Cargill held an Inclusion and Diversity (I&D) panel and discussed the importance of I&D to our businesses. On March 8, Cargill celebrated International Women’s Day (IWD). Cargill focused on supporting all colleagues on their career paths and discussed the ways men and women can be equal partners on the road to parity. We need to continue to learn from each other and take action to drive growth and innovation through inclusion and diversity. Regarding our goal of building greater bench strength, we continue to identify and move leaders in areas where we have opportunities to increase our depth of talent. In the final months of FY18, we must ensure the Cargill Leadership Expectations are a key factor in how we evaluate performance and are the focus on career development goals across all levels of the organization.
We need to prepare leaders for the future by identifying and developing employees who bring the capabilities needed for Cargill’s short- and long-term success.Q4 Progress: At the end of the fourth quarter, women made up 27.5% of all leadership positions* globally compared to a June 1, 2015, baseline of 25.
2%. While we are making progress with our representation of global women in leadership, that progress must accelerate to stay competitive in the market for top talent and to achieve Paradigm for Parity by 2030. In the U.S., underrepresented minorities’ representation among leadership positions* is currently 15.4% compared to a baseline of 9.
6%. With a 2020 underrepresented minority leadership aspiration of 15%, we have achieved the aspiration two fiscal years early. We need to continue this momentum of increasing our diversity representation among Cargill’s leaders. Regarding our goal of building greater bench strength, we continuously evaluate our talent and work to ensure current and future leaders have opportunities to increase their skills and capabilities.
With the start of fiscal year 2019, we must ensure the Cargill Leadership Expectations are a key factor in how we evaluate performance and are the focus on career development goals for all levels of the organization.Do the ordinary extra ordinally wellGoal: Deliver benefits of being a world-class, integrated operating company by enabling commercial success with functional and operational excellence.Measure: – Implement best-in-class approaches and standardize across the functions and businesses. -Improve operational excellence to reduce cost of goods sold (COGS) by $400M in FY18 and begin a path to create $1 billion in value by FY20.Q3 Progress: Our businesses and functions continue to demonstrate the power of working together under a coordinated, integrated operating model.
This quarter, we reduced the Cost of Goods Sold (COGs) by $80 million, bringing our year-to-date COGS reduction to $290 million. While slightly behind target, we are projected to meet our $400 million goal for the year. A critical driver for capturing value has been the Business Acceleration activities occurring across Cargill.
Business Acceleration is a continuous improvement practice that focuses on helping our businesses create a rigorous process for identifying and prioritizing the best ideas for capturing value.In North America, Business Acceleration prompted Cargill Strategic Sourcing and Procurement (CSSP) to examine the total end-to-end cost implications of how we spend, use and manufacture with chemicals. This has provided CASC and GEOS with opportunities to reduce costs to the tune of $12 million per year. In Brazil, CSSP collaborated with CASC, FIBI and CAN to standardize catering services, menus, and best practices under Business Acceleration.
As a result, we reduced annual catering expenditures by $840,000, improved waste management and implemented a health and wellness culture. The Business Acceleration processes have been instrumental in helping Cargill’s businesses and functions operate in a more integrated manner and unlock value, faster.Q4 Progress: For the fourth quarter, we reduced the Cost of Goods Sold (COGS) by $107 million, bringing our total COGS reduction to $397 million for fiscal year 2018. While slightly behind target, we came within 1 percent of our annual goal of $400 million. One example of how we’re delivering against this goal comes from Cargill Strategic Sourcing & Procurement (CSSP), who implemented a packaging negotiation strategy that will deliver $45 million in value over a four-year period.
By deeply integrating sourcing strategies with the needs of the Protein business, the team was able to drive $11.8 million in cost reduction, $14.4 million in cost avoidance, $11.8 million in rebates, and $7.5 million in packaging equipment credits. This innovative approach to structuring the contract will enable the business to upgrade their packaging lines.Be the most trusted partnerGoal: Leverage insights and expertise across our enterprises and functions to become the most trusted source of sustainable products and services.
Measure: – Drive year-over-year progress to achieve EHS 2020 goals. – Develop and implement action plans to advance goals in our four focus areas, including our deforestation commitment.Q3 Progress: In late 2017, we launched the Sustainability Hub to lead the development of Cargill’s sustainable supply chain strategies. The Hub will help orchestrate our companywide sustainability efforts as an integrated operating company. As a result, the Energy and Natural Resources targets will now be called the Climate and Water goals. These goals will eventually roll up under our broader commitments to our sustainability focus areas: land use, climate change, water resources and farmer livelihoods. Cargill took a major step forward in February 2018 with our announcement of a new climate commitment: a 10 percent reduction in absolute emissions in our operations by 2025, against a 2017 baseline. This new commitment is aligned with science-based target methodologies, and is a significantly bolder stance for Cargill on addressing climate change.
Q4 Progress: Climate Change Cargill is accelerating our efforts to meet our new 10% greenhouse gas emissions reduction target announced in February. Plant Operations and the BOSC sustainability team are working together to develop tools and processes to have more robust energy and greenhouse gas (GHG) forecasting capabilities, including a more robust approach to long-term energy and GHG planning. In addition to planning efforts, sites around Cargill are actively making improvements leading to energy savings. A great example is the implementation of ISO 50001 (the ISO standard for energy management) at several large energy-consuming sites. Eddyville is the most recent facility to complete ISO 50001 certification, which almost immediately led to annualized energy savings of over $800,000. One of the major improvements is a focus on two significant energy users (SEUs) at the plant. The SEUs’ energy use is actively monitored, and when it deviates from where it should be, action is taken to correct it.
Energy losses that sometimes lasted for weeks are now often caught in minutes, leading to significant savings. Other Cargill facilities are either in the certification process (e.g.
Blair) or are planned for certification later this year (Cedar Rapids, Ghent, Antwerp, and Izegem). This is a great example of a low-capital, high-return approach to address our GHG emissions. Land Use The Land Use and Forest Protection working team continues to make progress across our priority supply chains and will be releasing an updated Land Use policy along with operational guidelines shortly. Across our priority supply chains, we continue to make progress. Palm released its annual progress report, with highlights of 96 percent supply chain traceability to mills and 55 percent of all palm volume now under a sustainability transformation program. In our soy supply chain, Cargill launched our first in-house, certified sustainable labeled soy cooking oil “Liza Origens” into the Brazilian retail market. The certification is based on an innovative program developed by Cargill called 3S where producers commit to no deforestation and no natural habitat conversion production.
And our 2014-2018 collaboration with GIZ, Proctor and Gamble, and BASF is set to achieve 1,050 Rainforest Alliance certified coconut producers in 2018. Water ResourcesCargill joined the Expert Advisory Group for Context-Based Water Metrics and Targets (CBWT), an initiative led by several NGOs, including our partners The Nature Conservancy, World Wildlife Fund and World Resources Institute. CWBT is developing an approach to setting corporate water metrics and targets that meet the needs of the basins in which companies operate and address local and global water challenges. The Expert Advisory Group will inform the outcome of the project and help ensure that the final output is credible and useful for establishing meaningful, context-relevant water metrics and targets. Farmer LivelihoodsThe Farmer Livelihoods focus area continues to be a key thread through all our corporate responsibility and sustainability priorities, both in our programs and partnerships, but also in key business activities where we have direct interactions with the farmer. Going into the new fiscal year, a key priority will be to create a common definition on farmer livelihoods with impact areas we can regularly track and measure performance against. We envision this will be a combination of what individual business groups are already articulating as their farmer livelihoods strategies as well as expanding to areas that connect to our goal made in 2017 – training in sustainable agricultural practices and improving access to markets.Auditing and Controlling Social Responsibility ActivitiesCorporate Social Responsibility Past, Present and FutureFrom Earth Day in April to World Environment Day in June, thousands of Cargill employees come together to participate in the company’s largest environment-focused volunteer program. Each year, our employees make a positive impact on the environment by participating in volunteering activities in their communities whether individually or through our Cargill Cares Council network.What Cargill does? Globally, Cargill works at the intersection of food security and sustainability to nourish people and animals while protecting the planet. Our purpose is to be the leader in nourishing the world in a safe, responsible and sustainable way. Thousands of Cargill employees globally team up with local organizations to promote Cargill’s commitment to environmental stewardship. Cargill recognizes that its continued success depends on the growth and health of its communities and partners, as well as the vitality and conservation of natural resources.Goal: Participation from 10,000 Cargill employees globallyWe’re calling on all Cargill employees around the world to help us achieve this goal. Together taking action for the planet from Earth Day to World Environment Day.Cargill cares council eventsOpportunities for employee engagement (example: planting trees, neighborhood cleanup, community gardens, teaching children about Earth Day etc.) Partnering with an organization that is focused on environmental stewardship or community development in your local area, or even with a local school A financial contribution to the partner organization (opportunity to use corporate matching funds)Communication plan about your activity – internal & external communicationReview Cargill’s volunteer safety guidelinesCreating an event as an opportunity on Spark and log employees’ volunteer hoursReview the Earth Day Every Day page on the Community & Civic Engagement Hub for more!Cares council project IdeasClean-up a local watershed, park or riverStart a composting or recycling program at work – or organize a contest (Which department can recycle the most?)Plant species that assist in your local environment (e.g. plants that attract honeybees, local wildflowers, etc.)Coordinate to do an office e-waste recycling drive (computers, cell phones, heaters)Volunteer at a community gardenVolunteer with a local conservation organizationTeach local children through a school or library about Earth dayOrganize a tree planting activity with Cargill customers, suppliers or members of local governmentComplete an environmental audit to help assess environmental needs around your Cargill locationup a farm tour to learn more about sustainable farming practicesSet Give Environmental Hero awards for most creative Earth Day activitiesHost a “Lunch and Learn” by inviting an environmental expert or organization to your Cargill locationRecruiting Volunteers Decide on the characteristics you want your volunteers you haveClearly define physical and time demands of the project, as well as volunteer roles/responsibilitiesFind out what employees’ motivations are for volunteering:Making a difference? Strengthening a community? Learning new skills?Meeting new people?Create a recruitment message to catch people’s attention – existing volunteers, flyers, lunch time information sessionsFuture events (After November 2017)March 21: International Day of ForestsMarch 22: World Water DayApril 2: Game Show for SuccessApril 2: Earth Day Every Day Campaign officially launchesApril 22: Earth DayJune 5: World Environment DayJuly 20: Great Miami River clean sweep Sidney portionGlobal Reporting Initiative CSR InitiativesHealthy seafood for future generations We deliver on our commitment to widen our reporting and build transparency and trust across our value chain. Since Cargill acquired EWOS in 2015, we have worked purposefully to broaden the scope of our sustainability reporting. I am proud to look back at 2017 and be able to say that we now report on all 17 of Cargill Aqua Nutrition’s dedicated feed mill facilities across 12 countries. This covers about 80% of Cargill’s aquafeed production footprint – the remainder coming from multi-purpose mills. After more than a decade of reporting on the sustainability of our salmon feed, we now address feed for shrimp, tilapia and over 30 other species, supporting our customers with sustainability insights and addressing impacts across the value chain. In 2017 we reached an important milestone in our sourcing policy as nearly all of our 700 raw material suppliers signed the Cargill Aqua Nutrition Supplier Code of Conduct. The Code lays out our expectations of suppliers with respect to key aspects of environmental and social impacts and responsibilities of their business. Human rights throughout our supply chain are particularly important and we engage with our suppliers to ensure they share our focus and perspective. In Thailand our membership in the Seafood Task Force is helping to address the specific concerns in local fisheries.In addition to increasing efficiencies and driving sustainability through our supply chains, I will say that managing risk is a key success factor for Cargill Aqua Nutrition, and one of the most exciting elements of being part of Cargill. To help with this, we are constantly working to expand our raw material basket and add new raw materials to it. This year we are supporting HATCH, a startup accelerator program to support early stage entrepreneurs in getting their aquaculture innovations to market.This year’s sustainability report once again follows the value chain – addressing better seafood, better workplace, better operations and better supply chain. It will set a baseline for future sustainability targets, but we can already see that our suppliers are increasing their sustainability commitments, with 29 fisheries currently holding M.SC. certifications and 24 more working to achieve this (45% of the fisheries we used). Our worker safety record continues to improve and our actions to ensure safety are now influencing customers, who increasingly look to us for leadership in this respect.With our continued focus on waste within our own operations, especially plastic, I am also pleased to report that we are recycling about 70% of our waste, a number we seek to increase. Whilst our overall waste production is relatively small, we are keen to play our part. Looking downstream, our customer focus has led to an expansion of our functional feed portfolio globally. Improved salmon feeds are helping customers to meet health challenges,Our Approach and ImpactBetter practices and satisfied stakeholdersOur five core capabilities reflect what we do best: Trading and Risk Management Leveraging our insights to capture value for our customersSustainable Supply Chains Meeting the needs of both today and tomorrow to nourish a growing global populationDigitalization and Analytics Harnessing new technologies and big data to deliver powerful insightsMarket Insights and Innovation Anticipating the future needs of the market and consumers and transforming our business to meet themThought Leadership and Stakeholder Engagement Driving the conversation on issues key to consumers in order to prompt bold actions.Sustainable practices.Better SeafoodOur nutritionists work to optimize the diets we sell, providing the nutrients required by the fish for healthy, vigorous growth, balanced to reduce waste. We also provide a range of functional feeds to help the fish face environmental and health challenges in the farming environment.Better WorkplaceCargill is committed to safety. From constructing new facilities to the daily running of our business, we put safety before profits. Across our operations we run regular training and awareness programs and develop a culture of safety for everyday life, which has inspired our suppliers and our customers. Better OperationsOur operations affect global and local communities. We are working to better assess our raw materials and to minimize our process energy use in order to reduce greenhouse gas emissions. Other emissions and effluents from factories are controlled to reduce local impacts. Better Supply ChainsRaw materials count for more than 85% of our environmental footprint. We work with our suppliers to address the challenges, focusing particularly on marine ingredients, soy and oil palm. More broadly, we are developing novel raw materials and new tools that enable us to widen our raw materials basket.Creating value around worldCustomers and ConsumersWe have improved nutrient resource efficiencies and developed functional feeds. This has reduced the impact of waste and disease on seafood producers. By controlling the nutrients fed to the fish, we support the delivery of safe, healthy and delicious seafood to consumers worldwide.Employees Everyone goes home safely. That is our goal. Our safety culture has spread across our company, from the factory floor to the commute home – for both employees and contractors. Incident rates are above our ambitious targets and are we already taking actions to correct this.Communities We strive to be a good neighbor, not just a compliant one. This involves minimizing any negative impacts in the proximity of our operations, while engaging with local communities to support their economic development, improve education and conserve resources.Suppliers Engagement with suppliers drives our access to sustainable raw materials and our Supplier Code of Conduct lays out our expectations. Fisheries have joined improvement programs and soy processors are working with their suppliers on certification schemes. We are engaging on multiple levels to grow our feed production sustainably.Personal Development and self-assessmenta. Technical competences Sathish is Good in accounting and having fair knowledge on Cargill R&D accounting procedures. Have taken complete ownership on given activities. Has become good analytic on JDE and COA activity in short time of training.Understanding the Chart of Accounts within less span of timeGood at ExcelUnderstanding the JDE (ERP) functioning within less span of timeGood at understanding the flow of accountsGood at understanding the business activity and flowsGood at analyzing and connecting the dotsb. Managerial competencesSathish is self-oriented and efficiently able to manage the stakeholder on any given tasks. Have taken new activities with only minimal support from Business.Managing the work given efficientlyAble to manage different task at given timeManaging the stakeholder efficientlyPeople ManagementManaging Month, Quarter and Year End activitiesManaging the activities on timec. Relational and intercultural competencesHave decent and professional approach with colleagues. Good rapport with BU made his job easy in handling R&D activities.Friendly and Professional approach with colleague and BUEasily adopts to different cultured. Contribution given in terms of initiating / implanting changesStreamlined the Balance sheet reconciliation where most of the accounts had historic issues and resolved all of them and got in the new process to reconcile and justify the closing balances.Sales and Property tax charged to suspense account had challenge in allocating or moving the cost to respective reporting unit and most of the cost where sitting in suspense account and had mis allocation of charges, to overcome all this created the formula based excel file where it gives clear picture of cost where it needs to be allocated and having the backup for future reference.Initiated and worked with stakeholder to complete all the journal entries before the month close and maintain neat books of accounts.How the experience fits in to overall career goalsThe overall experience in getting the report done I got connected with various department and different people and Managers. It was good to know about the peoples’ activity and which helped in building contacts and understanding whom to reach out for specific questions. While preparing this report I also understood what are the most important documents which we should know about the company for which we working and how these are aligned to respective guidelines and principle which are mandatory in those particular zones. Preparing this report also gave me an insight of company and in which they operation into and the reporting structures who are there customers what are their mission and how it is streamlined across the organization. It also helped to stand out of the crowd in terms of understanding the different business requirements. While working on the report I also got an opportunity to fly to Costa Rica for Business transition which helped me lot by getting closer to business and understand how the service center works and how there are communicated and ways of working of service centers. Later I got other opportunity to move to different role in Corporate Financial Reporting Team, which in fact provided more indebt knowledge of Cargill US reporting where 70% of Cargill revenue is generated when compared to across the globe. This role gave more insight of looking at Balance sheet at Business unit level and reconcile and understand the flows between Legal entity and subsidiary, consolidation and how each item is shown in the Balance sheet at higher levels. Overall, I learnt many things which will help to build my career stronger in the fields of Accounting, Reporting and Analysis. BibliographyAll the information given in this report are taken from the web search and company website. Introduction and other few parts were taken from web search and company official website and other information related to Audit assessment, Strategy management are assumptions taken based on how the company operates. As Cargill is one of the big private company where they are into different business sectors and have different entity, each business has its own uniqueness in the applications or systems used to record and report which are not related to each other, so it is difficult to get details of overall business. However, the overall company reporting is done as per US GAPP. The only number or details I can get is the overall operating income at very high level. Considering all these factors, I have explained the answers to questions based on the Business which I look after and the information which I gather from different entities. Most of the information were derived from the company website and however financial figures given are not accurate but are indicative numbers based on my personal analysis of company’s performance history. Few of the actions items also given as per the my understandings based on the contents which studied during the course.