Risk Management and Internal Control

Risks related to Saga Furs Oyj’s operations are divided into business risks, hazard and property risks, financial risks and operational risks. Within these risk categories, the Company has specified economic and exchange rate fluctuations, image risks and political risks related to fur breeding and pelt trading, changes in the production of fur pelts and financial risks as the major risks and uncertainties at the moment.

The company seeks to manage and limit the risks by applying a consistent policy, which aims to ensure appropriate risk identification, assessment, management and supervision throughout the Group. It is an integral part of the Group’s planning and management process, decision-making, day-to-day management and operations and supervision and reporting procedures. The risk management process yields information on risks and on the progress of risk management measures, which forms the basis for taking corrective measures if necessary or considering strategy changes.

However, should the risks materialize, they could have a significant adverse effect on Saga Furs Oyjs business, financial position and results.

Due to its small size, the Company does not have a specific organisation for internal control. The Board of Directors familiarises itself with the auditors’ Control Audit Plan and may possibly give an additional report in regard thereto. In connection with the Control Audit, the auditors analyse the company’s and the Group’s accounts, Group-level interim reports and the company’s receivables with the objective of ensuring that the reports published by the company provide correct information about the company’s finance to a sufficient degree. In addition, in connection with the Control Audit, the auditors suggest (and have suggested) ways to develop and improve the company’s internal controls. Based on this, the Board has required and requires the management of the company to develop operational processes and controls.

Insider Regulations

OMX Nordic Exchange Helsinki Oy (the “Exchange”), the Central Chamber of Commerce and the Confederation of Finnish Industries published updated Guidelines for Insiders on 2 June 2008 (www.omxnordicexchange.com). Saga Furs Oyj complies with these new Guidelines. The company’s insiders are the directors and their deputies, the members of the Management Group, members of the management group of Finnish Fur Breeders’ Association (STKL), the directors and deputies of the Board of Directors of STKL, the secretary of STKL’s Board of Directors, the auditors taking care of the continuous company auditing and persons who, in the performance of their duties, come into possession of information having a substantial effect on the value of the company’s securities. The company maintains its Shareholder Register in Finnish Central Securities Depository Ltd’s SIRE system.

List of the persons subject to the disclosure requirement in Saga Furs Oyj.

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For more information, please contact our finance department.

Updated: January 2014