Investors

Internal Control

Ahtium's Board of Directors bears the overall responsibility for ensuring that an effective system of internal control and risk management is established. The Audit Committee periodically reviews the status of the relevant processes and reports of its findings to the Board. The Audit Committee also oversees that appropriate relations with the auditor are maintained. Operationally, the responsibility for maintaining and improving the internal control and risk management systems is delegated to the CEO and the Executive Committee.

The main features of the internal control and risk management systems pertaining to the financial reporting process

Ahtium’s internal control and risk management practices relating to financial reporting seek to ensure the reliability and objectivity of financial reporting, compliance with applicable laws and regulations, and effectiveness and efficiency of operations.

Whilst Ahtium’s aim has been to continuously improve its internal control and risk management practices, the Company acknowledges that the lack of personnel and financial resources and the uncertainties relating to the continuation of its operations have affected its control environment. Due to the prevailing situation, it has not been possible to develop, nor test the controls. Rather, the existing processes and controls have been adapted to the changing personnel and operational situation to the extent it has practicably been possible. Also, the corporate reorganisation proceedings have introduced an additional element of control through the involvement of the Administrator, whose consent has been obtained for all substantial transactions that are not considered part of the Company’s day-to-day business.

Following the bankruptcy of Talvivaara Sotkamo Ltd, the operating environment to which the monitoring and risk management activities of the Company relate have become less complex.

Risk management

The objective of Ahtium’s risk management is to support the achievement of the Company’s strategic and operational targets while protecting the Company against loss, uncertainty and lost opportunities.

Following the bankruptcy of Talvivaara Sotkamo Ltd on 6 November 2014, the strategic and operational focus of the Company has substantially changed and the Company has lost the control over and responsibility for the Sotkamo mining operations. The risks relating to the operations of the Company have changed accordingly. Therefore, the enterprise risk management policy and other risk management practices of the former Talvivaara Group are no longer applicable as such either from the operational or the organizational point of view. An adequate risk management policy with focus on the risks relevant to the Company’s future business shall be prepared once the new businesses of the Company have been brought into operation.

Control activities

Ahtium’s management is responsible for setting up and maintaining an adequate internal control structure and procedures for reliable financial reporting. The Chief Executive Officer, the Executive Committee and other members of the senior management of Ahtium are responsible for ensuring, under the supervision of the Board of Directors of the Company, that the accounting and governance in their respective lines of duty comply with the applicable laws as well as with the guidance given by the Board of Directors.

For the time being, the previously applied controls continue to be applied to the extent applicable in the organizational and operational circumstances prevailing from time to time.  Also, an additional layer of control has been introduced as part of the corporate reorganisation proceedings, during which Administrator’s consent has been sought to all substantial transactions that are not considered part of the Company’s day-to-day business.

For the time being special attention has been paid to the weekly cash flow forecasting and follow-up of the actual cash balance.

Internal controls are a recurring agenda item in Audit Committee meetings, where they are discussed with the representatives of the senior management as well as the Company’s auditors. The Audit Committee plays an important role in further communicating the status, targets and development of the Company’s internal controls to the Board of Directors.

Monitoring

The effectiveness of the internal controls is overseen by the Board of Directors and operationally monitored by the management.

Ahtium does not have a separate internal audit function to evaluate and test the operating procedures and processes relating to internal controls. The current operational scope of the Company does, in the Board of Directors’ view, not warrant establishment of an internal audit function.

Information and communication

Ahtium aims to keep its personnel as well as the Board of Directors informed of its internal controls and risk management policies in a transparent, accurate and timely manner in order to continuously build on a positive culture of control activities.

The key information channels towards all of the employees include the Company intranet, personnel releases and meetings. Relevant personnel groups are also separately informed of and trained relating to internal controls and risk management procedures. Furthermore, employee input is actively sought when identifying the key risks and controls.