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Risk Management

The Ponsse Group’s risk management policy seeks to maintain and further develop a practical and comprehensive system for the management and reporting of risks. This entails a systematic risk assessment for each function and unit, integrating risk management into the business processes, constant quality development and disseminating information on best practices. Internal supervision constitutes an essential part of risk management. The Board of Directors is responsible for the organisation of the operations and their adequacy, whilst the President and CEO are responsible for the implementation of supervision in practice. Methods of internal supervision include internal guidelines, reporting and various technical supervision systems related to activities. An internal auditor is responsible for the company’s internal supervision in practice, and he/she reports to the Board of Directors.

BUSINESS RISKS AND THEIR MANAGEMENT

The effect of general economic fluctuations is cushioned by the fact that the company’s business operations are spread over several geographical areas.
Risks related to raw materials, components and the subcontractor and supplier network are essential to Ponsse’s operations. To control these risks and minimise the adverse effects of changes, the Company is strongly investing in developing supplier network cooperation. The operation of the network
is developed and secured through in-depth partner cooperation and by supporting the positioning of strategic suppliers in the business park for partner companies in the immediate vicinity of Ponsse’s Vieremä factory. Component-related risks are also controlled by manufacturing a large number of key components in the Company’s own production facilities. Raw material and component suppliers’ possible delivery problems may increase the prices of raw materials used in PONSSE products and lengthen their delivery times. Ponsse has strengthened the control of these risks by adjusting the conditions of its supplier agreements and by extending their periods of validity. Ponsse Group’s financing risk management controls liquidity, interest and currency
risks, and secures the availability of debtbased financing on competitive conditions. The use of the euro as the invoicing currency has increased in several market areas, which reduces the Company’s currency risk.