INTERNAL CONTROL

The particular objective of Aspo’s internal control is to ensure the profitability and efficiency of operations, reliable financial reporting, as well as compliance with the applicable laws and regulations and the agreed practices and operating principles. Aspo’s internal control includes the control that is built in to the business processes, the Group’s management system, and financial reporting covering the entire Group. Internal control is an integral part of the company’s management, risk management and administration.

The aim of internal control is to create sufficient certainty of goals and objectives being reached in the following issues:

•  Operational profitability and efficiency and capital control
• Reliability and integrity of financial and operational information
• Compliance with laws, regulations and agreements, as well as ethical principles and social responsibility
• Safeguarding and responsible management of assets and brand
  
  

The responsibility to arrange internal control lies with the Board of Directors and the CEO both at Group level and in the different business units. The Board of Directors is responsible to the shareholders and the CEO to the Board.
The internal audit function supports the Group and business management in their internal control responsibility, and the aim is to provide the Aspo Board of Directors with a sufficient certainty of the functioning of internal control.

FINANCIAL REPORTING

The control of financial reporting is based on monitoring of business processes. The information for financial reporting is created as business processes progress, and responsibility for correct information is shared by all participants
in the process. The financial reporting process is decentralized and monitored by the Audit Committee.

Consolidated financial statements are prepared according to the IFRS standards as adopted by the EU. The financial statements of the parent company and the Finnish subsidiaries are prepared according to the Finnish Accounting Standards. Each separate company complies with the legislation of the country where it is located, but reports the information according to Aspo’s internal accounting instructions. Separate companies may have their own chart of accounts, but all information is consolidated on the basis of a common chart of accounts to the unit level, where their reliability is assessed before the information is transferred to Group level. Aspo Group’s financial information is verified, and assessed on monthly basis. At each phase the unit responsible for the quality and generation of information will assess its reliability. The Group-level monitoring and reconciliation mechanisms are used on both monthly and quarterly bases.

The systems required for financial reporting are decentralized and used according to the principles of internal control. Achieving the set targets is monitored on a monthly basis with the Group’s consolidation and reporting system. In addition to actual and comparative figures, the system provides up-to-date forecasts. The reports are provided for the Aspo Board of Directors monthly. The Board of Directors assesses the Group’s position and future based on the provided information. The Board of Directors is responsible for the contents and publication of the financial statement.

In addition to the Audit Committee, the reliability of reporting and processes are assessed by an independent external audit firm.

INTERNAL AUDIT

Internal audit assists the Board of Directors in its control responsibility by assessing the level of internal control maintained to achieve Aspo’s operational targets, for example. Internal audit supports the organization by assessing and verifying the effectiveness of business processes, risk management, as well as management and administration.

The Board of Directors approves the principles of internal audit as part of internal control. The Group’s Director of Legal Affairs is responsible for the coordination of internal audit activities, and internal audit findings are reported to the CEO, the Audit Committee and the Board of Directors. Internal audit is organized corresponding to the size of the Group. Additional resources and special skills will be obtained when required. Audits are based on risk assessments. Audit assessment and assurance target the profitability and effectiveness of activities, the reliability of financial and operational reporting, compliance with the law, and the safeguarding of assets.

Written audit reports are prepared and distributed to the Group’s CEO, the senior managers in the audited subgroup, and the managers of the audited business or unit. Internal audit prepares a summary report on conducted audits, the most significant findings and agreed measures at least quarterly for the Audit Committee of Aspo’s Board of Directors.

The Audit Committee monitors the operations and effectiveness of the company’s internal audit at its meetings and also reviews the plans and reports of internal audit.