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Risk manage­ment and inter­nal control

Endomines Finland Plc’s risk management process and internal control are based on Finnish Companies Act (624/2006, as amended), the Articles of Association of the Company, Securities Market Association’s Finnish Corporate Governance Code (2020) and on the Company’s internal plan. Risks related to Company’s business and business environment as well as risks related to the Company’s financial position and financing are extensively presented in the Company’s Corporate Governance – Business Model -manual, and Corporate Governance – Finance and Administration -manual.

Risk management, internal control and Code of Conduct are a key part of good corporate governance at Endomines.

Objectives and principles of risk management

The Group’s risk management seeks to ensure that the financial reports published by the Company provide materially correct information about the Company’s financial standing.

The central principle of risk management is continuous, systematic and pre-emptive action to identify risks, to define the level of risk the Company accepts, to evaluate and manage risks and, in the event of risk realisation, to see to their effective management so that the Company will meet its strategic and financial goals.

Endomines Finland Plc’s Board of Directors confirms the Company’s risk management principles, strategical goals and focus points. It also directs and monitors the planning and implementation of risk management. The Group’s Audit Committee appointed by the Company’s Board of Directors monitors risk management in the Group. The risk management is a part of the Group’s management, monitoring and reporting systems. Risk management covers identifying a risk, its assessment and contingency plans.

The risk management process is based on the business plan implementing the company’s strategy, prepared by the CEO. Internal and external events that have a material effect on the Company’s objectives are identified and divided into risks and opportunities. The probability and impact of the risks in the event of risk realisation is assessed, and an action plan regarding risks that are identified as significant is drafted.

Key risks and risk management measures are reported annually in the Company’s annual report, interim reports and on a case-by-case basis as necessary.

The Company divides risks into strategic risks, operative risks, risks of damage and financial risks. The Company has sought to hedge against insurable risks with standard property insurance, loss of profits insurance and liability insurance.

New or not yet identified risks are assessed systematically as part of operational environment analysis and regular risk assessments. 

The purpose of establishing principles for internal control is to provide guidelines for the proper safeguarding of the Company’s assets and to ensure that the financial statements are accurate and provide a reliable basis for making business decisions. The internal control is a process which enables minimizing the probability of errors related to accounting. Internal control also helps to assess the adequacy of the Company’s risk management in practice.

The Company has documented and evaluated the control measures that are connected to the risks related to unreliable accounting. This documentation is maintained by the CFO. Control measures are designed to prevent and detect errors and/or fraud, taking into account the size and complexity of the operation in an appropriate manner and scope. These include well-established accounting principles, process checks and reconciliations, rules for approving transactions, restrictions on system access rights, and analysis of all financial items.

Endomines has financial reporting regulations and procedural guidelines, which also include the Corporate Governance Manual and Finance and Administration Manual. The manual contains e.g. accounting principles, financial policy, procurement practices and reporting procedures, as well as rules regarding the distribution of powers and the approval of internal and external transactions.

The purpose of the internal control of the Company’s financial reporting is to ensure a high level of reliability of external reporting. The internal control of financial reporting focuses on ensuring that e.g. purchase and sale transactions, other income and the Company’s financing are processed and reported efficiently and reliably.