INTERNAL CONTROL

The objective of Aspo Plc’s internal control is to ensure the profitability and efficiency of operations, reliable financial reporting, and compliance with the applicable laws and regulations and the agreed practices and operating principles. Aspo Plc’s internal control includes the control integrated into
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 terms of the following:

• Operational profitability and efficiency and capital management
• 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 brands

The responsibility to arrange internal control lies with the Board of Directors and the CEO both at Group level and in the different businesses. The internal audit function supports the Group and business management in their internal control responsibility, and the aim is to provide Aspo Plc’s Board of Directors with sufficient certainty of the effectiveness of internal control. The Audit Committee monitors the operations and effectiveness of the company’s internal control at its meetings and reviews the plans and reports of internal control.

FINANCIAL REPORTING

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

Consolidated financial statements are prepared in accordance with the IFRS standards as adopted by the EU. The financial statements of the parent company and the Finnish subsidiaries are prepared in accordance with the Finnish Accounting Standards. Each separate company complies with the legislation of the country the company is located in, but reports the information in accordance with Aspo’s internal accounting guidelines. Separate companies may have their own chart of accounts, but all information is consolidated based on a common chart of accounts to the unit level, where its reliability is assessed before the information is transferred to Group level.

Aspo Group’s financial information is verified and assessed on a monthly basis. In 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 a monthly basis.

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

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

INTERNAL AUDIT

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

The operating principles for internal audit are approved as a part of the internal control principles provided by the Board of Directors. The Group’s SVP, Legal and Sustainability, 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 expertise are
acquired if necessary.

Audits are based on risk assessment. The target of the assurance work and assessment include the profitability and effectiveness of operations, the reliability of financial and operational reporting, compliance with laws, and the safeguarding of assets. Written audit reports are prepared and distributed to the Group’s CEO, the senior management of the audited business, and the management of the audited operation 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 Plc’s Board of Directors. The Audit Committee monitors the operations and effectiveness of the company’s internal audit at its meetings and reviews the plans and reports of internal audit.

With the regulatory changes in sustainability reporting, Aspo will integrate sustainability reporting as part of its risk management and internal audit processes in the next few years.