Reporting Critique

This element clearly sets out the strategies, mission, vision and objectives of the company. Such goals include short term and long term targets which companies are required to meet within a specific time period. This sort of performance information gives an idea to the reader about the future performance of the company and also influences their decision making.

The mission and vision of Axfood is easily accessible as it is clearly presented in the contents of the report. The main objective or the mission is clearly stated in bold and on the top of the extract.  Axfood’s objectives can be clearly identified by reading its mission and vision statement and also by analysing the company’s business concept. Apart from this different purposes for which strategies are been framed can also be clearly noticed.

In the annual report, on page number 13, Axfood clearly sets out its mission of making the life of its customers better by providing them good, affordable and sustainable food. Furthermore, the company focuses on close collaborations which make it stronger and more efficient. Apart from this, its main objective is to create value for shareholders by fulfilling its corporate social responsibility. Another factor which counts in Axfood’s objective is that providing the consumers with quality and food and meeting their requirements.   

Conclusion:

This section clearly shows the mission and vision of Axfood and shows the objectives which company will follow to create value for shareholder and the business. So overall, the quality of information is good.

The governance structure of Axfood shows company’s objective to create sustainable value for the shareholders by effectively controlling the risk and by making a sound company culture. This element identifies the rules, regulations and governing bodies of Axfood which consists of its Board of Directors and other committees.

Axfood annual report contains a section named as ‘Governing Bodies, rules and regulations’ that communicates every single information about the governance of the company. This section is presented in the Corporate Governance Report of Axfood for year 2017. It covers the pages from 74-89 and is easily accessible from the contents of company’s annual report.

The element of corporate governance is completely explained starting from the internal and external governance instruments to the explanation of each member of the Board of Directors. It also include the description of individual committee memberships. This extract of report comprehensively defines the roles and work of directors and committees as well as shows the level of transparency of board of directors which enhances the performance information. Axfood follows certain governance codes which helps the company to work ethically and creating value for itself.

The governance section of Axfood also includes a compensation committee and audit committee which is responsible for designing fair compensation and conducting time to time audit of company’s accounts. Axfood also has an executive committee which is made up of company’s president, CEO and nine executive presidents which are held responsible for conducting monthly meetings for addressing matters and discussions.

Conclusion:

It can be concluded that the governance section is been represented in a detailed manner that includes description of various committees and pinpoints the firm’s objective of creating value for its shareholders. Therefore the quality is good. 

Accessibility

Reporting extract:

Report Critique:

The section of risk management shows the structure and processes required for measuring and managing the risk of company.

Axfood has a six page section over Risk and risk management which showcase all the information related to the measurement and management of risk. This section is easily accessible from the content page of Axfood’s annual report, under the head Administration Report 2017.

Axfood has a proper and appropriate risk management process which prevents the risks and mitigate their impact and loss. The process helps in identifying and managing all types of risk along with reporting about the same within the group. Along with this, the company has Group-wide insurance and plans for continuity of business and managing the crisis.  A proper documentation is been there for addressing each type of risk. It includes following steps:

• The risks are assessed or identified by respective owners and then later on documented.
• After that all the identified risk are compiled in risk maps.
• Thereafter, the risk committee consolidate all the risks into a single risk map.

Furthermore, this section also include risk categorization such as operational risk, strategic risk and financial risk. Each type of risks are thoroughly explained along with their sub category.

Conclusion:

Axfood provides a clear understanding about the manner in which company manages and measures its risks. Proper formatting of the section is done with separate explanations and diagrams, making it understandable for the readers. So, it can be concluded that the quality of this element is pretty good. 

Reporting critique:

Remuneration basically represents the rewards paid to the senior management and employees of the company. This includes the basic salary, benefits and other compensations.

This section was not titled on the content page of Axfood’s annual report 2017, therefore bit difficult to access. It is mentioned under the heading ‘Notes to the Financial statements’ and clearly represent the amount paid to the president and executive directors of Axfood.

This section of company’s annual report is very specific as it provides exact information about the amount of remuneration paid and highlights the fact that company is focused on making transparent reporting. The above extract shows the basic pay, variable compensation and other benefits and charges paid to the senior management of parent company and subsidiaries. It clearly shows that the basic salary of Axfood’s president has increased in 2017 as compare to that of in 2016. However, this reduces his variable compensation but the overall remuneration is been increased. The same level of transparency is there in reporting the remuneration of other senior executives also.

Conclusion:

Overall, it can be concluded that remuneration section has complete transparency and exact to the point data related to the compensation paid. The quality of this section or element is good.

Reporting critique:

Financial assets are those instruments or assets which a company owns legally. The section includes the assets, liabilities and currency derivatives.

Accessibility:

The information related to financial assets was difficult to find as it is covered under the head Notes to Financial Statements. Moreover, this section does not appear at the content page of the annual report and the language used is also hard to understand.

The section is been named as financial instruments which includes both financial assets and liabilities. It includes five notes which represents company’s financial assets and liabilities for the year 2017 and 2016. The first paragraph shows the information related to recognition of financial assets and liabilities followed by the classification and valuation of the same. Furthermore, it is also stated in this section that Axfood measures its other financial liabilities at amortized cost. The assets and liabilities of the company are:

• Trade receivables and Loan receivables
• Trade payables
• Loan liabilities
• Available-for-sale financial assets
• Derivatives

Comprehensiveness

In addition to this, the information also contains that company’s cash and cash equivalents are measured at amortized cost and its derivatives include forward exchange contracts.

Conclusion:

The content is been provided for both the years which can be very much helpful for making correct decisions. Also it clearly shows the measurement of Axfood’s financial assets which are measured at fair value and the financial liabilities measured at amortized cost. So, overall the quality of information is good. 

Report extract: 

Reporting Critique:

This section provide details about the physical assets of Axfood which comprises of its property, plant and equipment. It basically shows the present and future efficiency and effectiveness of the company’s assets.

 The information is available in the annual report of Axfood under the Note number 18. It is just extract about the physical assets of the company which shows the calculation of depreciation charge on them and any sort of impairment done. Moreover the data about the fixed assets and their value is also available on the company’s balance sheet which is easily accessible from the contents of the report.

This section explains the depreciation charged on plant, property and equipment in a concise manner. It clearly shows the depreciation percentage and the method of charging it. The section also state that all the physical assets are carried out at the cost after deducting the amount of accumulated amortization and any impairment. Fixed assets of the company are listed below:

• Land and Building
• Equipment, tool, fixtures and fittings
• Construction tools
• Store Equipment

In addition to this, Axfood applied component depreciation to some of its store equipment which means that large machine is broken into sub-components as and when necessary.

Conclusion:

Knowledge about the physical assets and their value is very much helpful for the shareholders to take appropriate decisions. This section includes both year performance but does not showcase the same in detailed manner. Also it does not show the information on future efficacy of the assets. Thus, the quality of information is bad. 

Report extract:

Reporting Critique:

Customers is the performance element of resources and relationships which aims at defining the number of customers and their relationships with the company as well as the amount of revenue they bring.

Accessibility:

Axfood is focused on making strategy regarding its customers in order to enhance its relationship with them. Such related information is easily accessible in the starting pages of the annual report. The section named as ‘Strategy- Customer Offering’ and ‘Strategy- Customer Meeting’.

Comprehensiveness:

Axfood has listed down some strategies that would help the company in better understanding its customers and improving its relations with them. Customer offering strategy is focused on the fact that all the customers should be able to afford and eat good and sustainable food. The company’s stores has started offering fully prepared food which is the prevailing demand of its customers. Also it has proper risk mapping solutions plus the food offered is fully sustainable and properly tested.

The another part of the strategy deals with consumer meeting which aims at providing best shopping experience to all the customers. In regard to this, Axfood has adopted an omnichannel strategy that encompasses of attractive stores, products and competent staff. The company is focused on serving its customers from anywhere and everywhere. In addition to this, it has customer programmes which are a part of digitalized services provided by Axfood. As per the information in the section, 5,000,000 consumers are increased by online offering of Axfood.

Business model

Conclusion:

The information of this element is presented in a detailed manner which shows that Axfood has laid more emphasis on making its customer relationships better and understanding them more clearly. Moreover, there is a clear and easily understandable information about the strategy used by Axfood in this regard with supporting evidences. Though the annual report does not include the exact number of the company’s customers but the overall quality of the information presented is good. 

Report extract:

Reporting Critique:

It is the objective of every company to have a competent and skilled staff who is motivated to work in the best interest of the company and to achieve the targets efficiently. In order to retain employees in the business, the company must formulate an appropriate strategy in this regard and should focus on providing a healthy environment to its employees.

Accessibility:

The annual report contains a full page detailing which shows the detail strategy made by Axfood for its people. It is easily accessible and is available on page number 34 of the Axfood’s annual report 2017. The main agenda of the company is to generate business benefits by creating more and more diversity.

Comprehensiveness:

The company focuses on the concept of diversity which helps it keeping skilled employees in the business. Axfood strategize to increase diversity in the work place in order to have several business benefits. In order to achieve this, the company prepares a good mix of competencies and leaderships for better results in all operations.  Such as, it makes advertisements for job vacancies in an innovative way and also provide recruitment test in many languages.  In 2017, 22% of the employees came from international background. Apart from this, the company completely believes in gender equality with balance of men and women between 40% and 60%. In company’s executive committee, women has a share of 30% and in company managements the share is 36%, as reported last year.

The company also shares core values and state how each employee is to act and behave within the organization. Also Axfood has a high work attendance rate of 94.3% in year 2017. Various other factors such as training and development programmes, whistle-blower functions and many more are also mentioned in this section.

Conclusion:

The section provides a concise information of company’s strategy and policy of following and increasing the diversity in the workplace. It also give appropriate statistics which shows the percentage of women working in Axfood and their share in the company. Overall, information quality is good. 

Reporting Critique:

The performance element of innovation allows the company to reinforce the value creation through offering new and innovative quality products developed by innovative processes.

Accessibility:

The annual report of Axfood does not have a particular section about innovation. However, there is a section about bringing digitalization in the work and the business. This innovative idea helps the company to create value for its shareholders. This section is not easily found as it was not titled as research and development.

Conclusion

Comprehensiveness:

In Axfood’s annual report, on page number 32 and 33, the firm clearly states its strategy of digitalization and moving towards mobile solutions. It aims at increasing the efficiency and controlling the cost in order to make the organization customer centric and dynamic. The company is looking forward for the development and administration of IT systems for making the workplace digitalize. Investments in several innovative ideas and in IT platforms are been made for effective management and control of company’s entire value chain.

Conclusion:

The section briefly provides the innovations done by Axfood and is just a two page extract. Moreover, it does not have a separate sections for the innovations made by Axfood. Therefore, the quality is considered to be bad. 

Report extract: 

Reporting Critique:

The element of brand and intellectual assets basically focuses on the reputation of the company and the value added by brand recognition. This mainly includes the manner in which a company maintain, build and protect its reputation and recognize the brand value as well. 

Accessibility:

There is no section related to intellectual assets and brand in the annual report of Axfood. However, the report contains a performance element of Intellectual Capital which is accessible in the section of ‘value creation’ on the page number 14 and 15.

Comprehensiveness:

Brand reputation is the one factor which is very important that help the company earn revenue without putting any extra efforts on increasing innovation. It is an obvious fact that company’s good reputation will attract more consumers and enable them to make repetitive transactions with the company. However, as per the extract Axfood’s 28% of sales is from privately labelled products that are been produced in collaboration with some 400 suppliers.

In contrast to it, a bad reputation will lead to poor quality and reduction in number of consumers which will directly impact the value created by the company. the brand recognition is usually useful for shareholder who wants to be sure about their investment in a particular company. 

Conclusion:

As it is stated that Axfood’s annual report does not contain any qualitative and quantitative information regarding the brand and intellectual assets, therefor the quality is ugly.

Reporting Critique:

The process of supply chain identifies a useful process adopted by the company in order to create and add value. Along with that, the performance indicator of supply chain also suggest and highlight the improvements required to be made in a company’s supply chain. 

Accessibility:

This section is available on page number of 30 and 31 of the annual report of Axfood. It is easily accessible as it is mentioned in the contents of the report which is easily understandable.

Comprehensiveness:

The extract taken provide details about the strategies used for improving the entire value chain of Axfood. Dagab is responsible for all the logistics of Axfood which handles approx. 3500 deliveries and 600,000 parcels a day. The company strategizes to bring the automated logistics which will lead to the digitalization of society. In addition to this, Axfood is also looking forward for having automated warehouses.

Risk

Apart from this, Axfood has acquired three dark stores for the purpose of e-commerce order-picking. It has also acquired a delivery fleet for the e-commerce orders of customers. Similarly, other strategies are been made for improving the entire supply chain of the company and for adding value. 

Conclusion:

This section does not provide the quantitative data of the supply chain of Axfood. Moreover, it is not presented in a detail manner. Hence, it can be said that quality of information is bad. 

Report extract: 

Reporting Critique:

Performance information about the operational performance of a company reflects the quality of products it offered to its customers, unit cost information its employee’s operational efficiency and level of satisfaction it provides to its customers. 

Accessibility:

Axfood’s operation performance is shown in the starting page of its annual report 2016. This section is represented in page number 3 and is very much easily accessible for the readers. Also it can be easily understood as the information is presented in form of pie charts and exact figures.

Comprehensiveness:

In 2017, company’s operating profit was reported at 4.1% and its sales were above 40,000 SEK million. From different segments, Axfood has made following sales and operating profit:

• Willys: Sales were 25,415 SEK million andthe operating profit amounted to 1020 SEK million.
• Hemkop:It has 67 group owned stores and 120 retail stores. The sales made was 6,189 SEK million along with the operating profit of 196 SEK million.
• Axfood Närlivs: It handled group business customers in 2017 and made a sale of 2,977 SEK million. The operating profit by the same was 189 SEK million.
• Dagab: It is considered as group’s support company for purchasing logistics. The sales made by this company were 11,337 SEK million along with the operating profit of 697 SEK million.

In addition to this, Axfood’s total return has also increased over the period of past five years that is starting from 2013 to 2017. A constant increase is been there in the total return on the company’s shares. The overall sales growth in 2017 was reported at 7.0 percentage.    

Conclusion:

Though the information was not presented on a detailed metrics but it was shown in such a manner that it was easily understandable for the readers. The extract shows that Axfood’s sales has been grown in 2017 as compared to previous year reflecting the good performance of the company in operational terms. So, overall the quality of this element is good. 

Report extract:

Reporting Critique:

The economic performance of a company describes the profits and cash flows and also include useful dollar based ratios which are used to measure the success of company in more quantitative manner.

Accessibility:

This section can be found in the financial statements of Axfood’s annual report which is easily identifiable on the content page of the report. The performance information is also given in Note to Financial Statements in a more detailed manner. It is observed that the total net sales of Axfood has increased in year 2017 and so is its gross profit. However, the operating profit has been reduced in the year 2017.

Conclusion:

The inclusion of ratios show that the economic performance of Axfood is clear and prominent with the report. Transparency is there in the content and therefore the quality of the information is good. 

Report extract: 

Reporting Critique:

The element of social framework says how well a company create values through its social performance.

Accessibility:

On page 14 and 15 of Axfood’s annual report, it is mentioned that company creates value through its social responsibility. It is easy to locate as it is mentioned on the content page of the report.

Comprehensibility:

The above extract contains some quantitative data which includes the salary paid to Axfood’s and society cost, pension costs and other kind of taxes paid by the company. Axfood focus on keeping relationships with 1500 risk assessed suppliers, competence to develop private label products, gaining knowledge in e-commerce and focusing on integrated sustainability.

Conclusion:

This section clearly defines the resources developed by Axfood related to nature, knowledge, facilities, financial, intellectual capital and relationships with suppliers. Presented in a very concise manner and making the quality of element good.

Report extract:

Reporting Critique:

The environmental framework shows the company’s environmental performance through which it creates and add value.

Accessibility:

As such there is no particular section about the environmental performance of Axfood in the annual report. The data about carbon footprint is difficult to access and locate as it is mentioned under the head sustainability which appears in the content of the report.

Comprehensiveness:

The report of Axfood shows it environmental targets which aims at making the company climate-neutral by 2020. Also the portion of carbon footprint has reduced last year as compare to the past years performance. From 2009 to 2016, the company reduced its carbon footprint by 79%. Carbon footprints include:

• Refrigerants – 43%
• Transports – 26%
• Electricity consumptions – 26%
• Business travel – 5%

Conclusion:

The quality of reporting the performance information is pretty much good as numeric data is presented in form of bar graphs and pie charts. The data is in concise manner and is easily understandable. So the quality of this element is good.  

Report extract: 

Reporting Critique:

There are different segments of the company which are responsible for their respective performance. This element of the framework focuses on the segmental performance of the company.

Accessibility:

This section is presented in notes to financial statements on page number 97. This section can be easily located by finding the financial statements in the content.

Comprehensiveness:

This section provides the information about the performance of Axfood’s segment. It shows the net sales and gross profit earned by each of them. The segments of Axfood are:

• Willys
• Hemkop
• Axfood Närlivs
• Dagab

Highest external and internal sales were reported by Willys followed by Hemkop in year 2017.

Conclusion:

The segment performance is given in very much detail and the figures are presented in tabular form. So, the quality of this element is good.

Report extract: 

Reporting Critique:

The annual report of Axfood contains a materiality section which includes materiality analysis and material issues of the company. The issues which are material for Axfood are:

• Animal welfare
• Control of supply chain
• Anti-corruption
• Gender equality
• Diversity
• Reduced carbon footprint and many more.

Materiality analysis provide the basis of reporting in accordance with GRI standards.   

Reference List

Axfood.com. (2018). Axfood – Annual and Sustainability Report 2017. [Online] Available at: https://www.axfood.com/globalassets/startsida/investerare/ar17/axfood-annual-and-sustainability-report-2017.pdf [Accessed 14 June 2018].

PricewaterhouseCoopers. (2018). Pricewaterhouse Coopers (PwC) | Integrated Reporting. [Online] Integratedreporting.org. Available at: https://integratedreporting.org/profile/pricewaterhousecoopers-nv-netherlands-accounting/ [Accessed 14 June 2018].