Skip to content

Risk Management


The Board of Directors is responsible that the internal control and risk management are adequately and effectively arranged. In addition, it is the responsibility of the Board to ensure that the internal control of the accounting and financial management is arranged in an appropriate manner. The Audit Committee is responsible for the control of the financial reporting process. The financial management shall inform its findings to the relevant members of the management.

The group has financial reporting systems for the control of the business, financial management and risks. The Board of Directors of the company has approved the management organization and principles, decision-making authorities and approval procedures, operational policies of the organizational sectors, financial planning and reporting as well as remuneration principles.

The group does not have a separate internal audit function but the internal audit is part of the group financial administration. Local auditors shall audit the procedures of internal control in accordance with the audit plan. The representatives of the financial administration shall perform certain controls when they visit the subsidiaries. The financial management shall report the findings to the President and CEO and the Audit Committee, which in turn report to the Board.

The group financial management together with the other management prepares monthly the  financial report. The report contains a summary of  the net sales, gross profit, costs level, results, net working capital, cash flow and personnel development for the previous month, year-to-year period and for the forecasted latter part of the year. Furthermore, the report includes the main risks and possibilities. The report is delivered to the Board of Directors, Executive Management Team and to the financial management of the largest subsidiaries as well as to the auditors when it concerns interim reports. In addition to the monthly reporting the management follows more actively certain actual items in their weekly meeting.

The group financial management oversees the centralized interpretation and application of the accounting standards (IFRS). The group’s financing and hedging against currency risks are centralized in the head office in Finland. The Audit Committee of the Board evaluates the financial statements and interim statements as well as separately certain special subjects.  The Audit Committee reports its findings to the Board, which monitors that the necessary measures are taken.

The principal auditor of Enedo Plc is responsible for the audit and the directions and coordination of the audit in the group. The principal auditor prepares annually an audit plan, which contains focus areas and which the Audit Committee approves. The audit report of the group financial statements and the Board report required by law is issued by the auditor to the company’s shareholders. Furthermore, the auditor reports its findings to the Audit Committee.


The aim of the risk management system of Enedo is to recognize the strategic, operational and financing risks of the group as well as any conventional risk of loss. The risks that the group takes in its operations are risks that are encountered in pursuit of the strategy and goals. Risk management seeks to control these risks in a proactive and comprehensive manner. The measures taken can include risk avoidance, risk reduction or risk transfer by insurance or agreement.

Risk management forms part of the group’s business pro­cesses in all operational units. In this way the risk manage­ment process is tied to internal controls. The group and its operational units assess the risks of their operations, prepare risk management plans and report risks in accordance with the organizational structure. The Audit Committee and Board of Directors address risks in connection with the addressing of other business operations. Risk management is taken into consideration in the group’s quality systems, which include also survival plans. There is a more detailed statement of the group’s different risks and their management which can be found in the Investor Relations section of the Internet pages of the company.

The purpose of Enedo’s risk management system is to identify the strategic, operational and financial risks faced by the company and any conventional risks of loss. The risks that Enedo takes in its operations are risks that are encountered in pursuit of the company’s strategy and goals. Risk management seeks to control these risks in a proactive and comprehensive manner. The measures taken can include risk avoidance, risk reduction, and risk transfer by insurance or agreement.


Enedo has specified the most significant risks and their management from the point of view of the entire Group. According to the Board of Directors’ estimate, the most significant risks are associated with the dependence on the key customers, delays in development projects of new products and materials management. Short term risks are described in Interim Reports.


Challenges to the demand for Enedo products have been caused by dependence on certain main customers.  Strong dependency  on the telecom customers’ demand in the customized products  business model can cause delivery reductions if the demand is weak.  It is difficult for Enedo to rapidly adjust its operations to this fluctuation because products can not be sold to another customers.  Enedo aims to widen its customer base and decrease its dependence on certain customers according to the strategy by developing new accounts and by  increasing the share of standard products and industrial sector. Dependence on main customers is approx. 40 %.


If Enedo’s Product Development is delayed in its projects for new products or that products are unable to meet customer requirements in terms of a product’s performance or quality may have an impact on profitability of the company.

The aim of the risk management is to prevent risks by developing Product Development processes, customer intimacy and by improving the skills of personnel. The company is dependent on the success of its product development projects.


Material and component costs are the largest items in the company’s cost structure and therefore efficient order and supply chain management is important for the profitability of the company’s business operations. Material risk consists of a delivery time and  technical features of the components. Delivery times of certain components are so long that the Company can loose the deal because the customer wants to have shorter delivery times. Components can also be technically defective and all components can not be tested before using them in manufacturing process.  Enedo manages risks associated to material costs and availability by using sophisticated information systems, supply chain management and through appropriate agreements with component suppliers and customers.

Contact us