RISK MANAGEMENT

The objective of risk management is to continuously acquire information, assess, and manage the opportunities, threats, and risks present in the company’s operations to ensure that the company achieves its goals and secures the continuity of its operations. Thus, the purpose of risk management is, among other things, to support the implementation of the strategy, the achievement of financial objectives, the fulfilment of customer promises, dividend payment capacity, shareholder value, responsible practices, and business continuity.

This objective is achieved when the group has:

• Knowledge of the uncertainties, risks, and opportunities related to its objectives and operations;
• Consistent methods to identify, assess, and manage risks and their consequences.

Risk management is a systematic activity aimed at ensuring the proper identification, assessment, management, and monitoring of risks. It is an integral part of Incap’s planning and management process, decision-making, daily operations, and control and reporting procedures. Risks are assessed and managed comprehensively and from a business perspective. This means that key risks are identified, assessed, managed, monitored, and reported as part of the management system’s reporting and business operations.

The President and CEO of Incap is responsible for arranging risk management within the Group according to Risk Management Policy monitored by the Audit Committee and approved by the Board of Directors of Incap. The Board also reviews risks and risk treatment action plans.

Each member of Incap’s Management Team is accountable for handling risks within their respective domains. Incap’s Chief Financial Officer is in charge of the yearly risk management process, financial risk oversight, and risk governance, while leading company’s financial and sustainability reporting, internal controls and financial risk management.

All employees are expected to comprehend and manage business, operational, and hazard risks within their work environment and duties.

Correct financial reporting in Incap mean that its’ financial statements give a true and fair view of the financial performance of the operations and the financial position of the Group. Correct sustainability reporting in Incap means that the sustainability reporting provides an accurate perspective on sustainability matters. Internal control relating to the financial and sustainability reporting process is part of the Group’s internal control system.

Common accounting principles for the Group have been determined based on the applicable laws and ordinances and standards, reviewed by the Audit Committee and approved by the Board. The Group’s finance department gives instructions to the organisation on the reporting principles of monthly financial and quarterly sustainability reporting as well as for budgeting and estimates. The Group’s finance department is accountable for reporting processes and practices connected with the financial and sustainability reporting as well as training for the organisation when necessary.

The Group’s finance department prepares the consolidated financial and sustainability statements and is responsible for the interpretation and application of financial statement and sustainability standards.

External and internal accounting and reporting of the subsidiaries is taken care of by the local finance departments. The subsidiaries report to the Group’s shared financial reporting system monthly. Sustainability reporting is carried out in a dedicated separate Group level reporting system on a quarterly basis. Reported figures are reviewed by finance departments both in the Group and in the subsidiaries, and by expertise departments, such as HR, HSE, quality department, where applicable or when it concerns sustainability data. Part of the Group bookkeeping and financial reporting tasks have been outsourced to an external partner.

The Group’s finance department prepares reports on actual and estimated financial performance to be included in the meeting materials for the Audit Committee and for the Board of Directors. The Group’s finance department supervise compliance with the reporting and control processes. All finance functions monitor the validity of external and internal financial and sustainability reporting data for example by analysing the differences between actual performance to previous year and budget as well as estimates. The key figures are analysed the same way.

The Board of Directors ensure the appropriate arrangement of the control of the company accounts and finances. The Audit Committee is responsible for monitoring the quality and integrity of and reviewing the interim reports, the financial statements, sustainability reporting and reporting processes as well as monitoring the efficiency of internal control, risk and risk management. The Board of Directors reviews and approves the financial statements, interim reports and sustainability reports.

President and CEO, and the directors of subsidiaries are responsible for implementation of internal control relating to financial statement reports and sustainability reporting. 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. The President and CEO is responsible for the legality of accounting practices and for ensuring that the company’s finances are managed reliably and with competence. The subsidiary Managing Directors arrange internal control and risk management in practice. The Group’s management and personnel promote efficient internal control of the financial and sustainability reporting processes with their own actions.