Internal control and risk management make sure that the Neo Industrial's operations are as effective and profitable as possible, that the information that it provides is trustworthy and that regulations and operating principles are followed.

The Board of Directors has the highest responsibility of monitoring accounting and capital management in the company. The Managing Director is responsible for organizing the controlling system and risk management in practice. The company's financial situation and development is monitored on a monthly basis, and the information is published in annual and interim reports. A more detailed description of the company's internal control and risk management is included in the company's separate Corporate Governance Statement, section 4.

Internal audit

The company's Board of Directors has established an Audit Committee for the Group's internal control and audit. The committee reports to the Board. An operative internal audit is mainly carried out by the company's own organization, and third party experts are used on a project basis.

Risks and risk management

Neo Industrial's financial risks include currency, interest rate, commodity, liquidity, credit and investment market risks. Financial risks and protection measures are described in more detail in notes to the financial statements. The company's future risk factors are related to the business development of its portfolio companies. The uncertainty of the international economy and financial markets poses a risk to the Group's financial arrangements.

Due to the significant financial arrangements carried out in 2014 the financial situation got better. However, Neo Industrial continues to pay extra attention to ensure the sufficient funding and ensuring liquidity situation. The financial negotiations are continued and to assure liquidity, company intensifies the working capital management and negotiates adjustments to payment terms and agreements.

In the Cable segment, the most significant risks are related to market development, fluctuations of raw material prices and currencies as well as working capital management in various situations. During considerable seasonal changes, suppliers' terms of payment effect significantly on the ability to ensure competitive times through sufficient inventories.