Risk Management

Risk management at KH Group is based on a risk management policy approved by the Board of Directors which targets a comprehensive and proactive management of risks. The Company strives to detect and identify the factors which might have injurious effect on achieving the targets of the Company either in short or long-term time frame, as well as initiate necessary actions to control this kind of factors. Risk management of business area level plays a significant role in risk management and is mainly organized by the business areas. KH Group strives to improve the risk management of its  business areas by active corporate governance and contribution to the operation of Board of Directors. KH Group assesses the most relevant risks  and enhances the implementation of risk management  at the business area level.

KH Group is a conglomerate. The Board of Directors of KH Group confirms the Company’s strategy and business plan in which among other things targets for new investments and exits are defined. The Board makes the investment decisions concerning new  investments and oversees the implementation of the investment activities. Due to the Company’s investment strategy and the nature of investments a significant part of KH Group’s most relevant risks are related to the Company’s business areas.

Internal Control and Audit

Internal control at KH Group is an ongoing process to secure the profitability of the business and its continuity. The objective of monitoring is to minimize risks by securing that reporting is reliable and that laws and regulations are being followed.

Considering the structure and scope of the Company’s business, setting up a separate internal audit organisation has not been considered applicable. The Company’s management is responsible for the internal control system. Internal control is an active part of the Company’s management and governance.

The basis of financial monitoring is formed by the controls included in operational processes, which enable fast anomaly detection and reaction. A material part of the financial monitoring is monthly reporting by management. The metrics followed in the monthly reporting have been set so that they support the Company in reaching targets and raise issues that require controlling actions. Due to the nature of the business, budgeting in its traditional form is not used in the parent company. The interpretation and appliance of the accounting standards is managed by the corporate financial administration.