RISK MANAGEMENT

The Group’s subsidiaries report to the Group’s shared reporting system on monthly basis. Reported figures are reviewed by finance departments both in the Group and in the subsidiaries. Part of the tasks of the Group’s finance department has been outsourced to a partner, who is taking care of the book-keeping and reporting of the Finnish parent company, among others. External and internal accounting and reporting of the subsidiaries is taken care of by the local finance departments. The Group’s finance department prepares reports on actual and estimated financial performance to be included in the monthly meeting material for the Board of Directors. The Group’s finance and administration monitors the observance of reporting and control processes. All finance functions also monitor the validity of external and internal financial reporting.

The Group’s finance department prepares the consolidated financial statements and is responsible for the interpretation and application of financial statement standards. Common accounting principles for the Group have been determined based on the standards. The Group’s finance department gives instructions to the organisation on the main principles of monthly reporting and is in charge of special instructions for reporting relating to budgeting and estimates. The Group’s finance department further shares internal information on processes and practices connected with the financial reporting and organises targeted and relevant training for the organisation when necessary.

The Board of Directors has the final responsibility for the appropriate organisation of internal control relating to the financial reporting. The Board of Directors reviews and approves the financial statements, half-year and interim reports and other regulated financial reports. President and CEO, and the directors of subsidiaries are responsible for implementation of internal control relating to financial statement reports. In this task they are supported by the Group’s finance and administration.

The Group’s President and CEO is responsible for maintaining an efficient control environment. He arranges internal control and risk management in practice. The president and CEO is responsible for the legality of book-keeping practices and for that the company’s finance and administration is run reliably and with competence. The Group’s management and personnel promote the efficient internal control of the financial reporting process with their own actions.

The control environment of the Group is based on the corporate principles and values. In operative units, the Group-level instructions are observed, including among others guidelines for book-keeping and reporting as well as principles for risk management and internal control relating to financial reporting.

The president and CEO and the directors of different functions are responsible for arranging adequate control actions, as well as training related to the observance of instructions in their units. Moreover, are responsible for ensuring that book-keeping and administration in their own areas of responsibility comply with the laws, Group’s operating principles and the instructions and orders given by the Board of Directors at Incap Corporation. The related control actions are operational instructions and practices, which ensure the implementation of the management’s orders. These actions include, for instance, approvals, authorisations, inspections, balancing, payment monitoring, protection of property and division of tasks.

Own operations in the company are monitored continuously also by means of separate evaluations, such as internal audits and audits of the accounts, supplier audits made by customers, as well as external and internal quality audits.

Control of financial reporting is performed by the Board of Directors, the auditors, the President and CEO, the Group’s Management Team and the Group’s finance departments. The monitoring is done continuously, as a part of daily duties or on specific assignment.

The Group aims at integrating control in all daily operations. Efficient internal control requires that the duties at job are divided in an appropriate manner and that eventual risky combinations of duties are eliminated. Tools for control are among others the Group-level instructions, checkpoints of financial reporting, instructions for book-keeping and reporting as well as the Group’s regular business reviews.

The Group has no specific organisation for internal auditing due to the scope of its business. Internal audit is organised so that the needed audit service is acquired from an external auditing service provider selected by the Group’s Board of Directors. The service provider, usually an authorised public accountant, shall be independent, competent, and equipped  with adequate resources.