ANNUAL REPORT 2012

Governance

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

The financial reporting process refers to activities that generate financial information used in managing the Company and the financial information published in accordance with the requirements of legislation, standards, and other regulations covering the Company’s operations.

Internal control related to the financial reporting process

The role of internal control is to ensure that the Company’s management has access to up-to-date, sufficient, and essentiallyaccurate information needed for managing the Company and that the financial reports published by the Company provide an essentially accurate view of the Company’s financial position.

Structure

Fiskars has four operational segments and three business areas. All the business areas have their own financial management organizations.

The business units that operate under the business areas comprise the base level of financial reporting. Business units are responsible for organizing their own financial management and for the accuracy of their financial reporting. The Parent Company also has a Group-level financial management organization that operates under the leadership of the CFO. The financial management organizations of the business areas and the Group as a whole are responsible for monitoring the operations of the finance departments of individual business units. The Internal Audit function audits and monitors the efficiency of the reporting process and assesses the reliability of financial reporting.

Financing and financial risk management belong to the Group Treasury function under the responsibility of the CFO.

Management

Setting and monitoring financial targets is an important part of Fiskars’ management responsibilities. Short-term financial targets are set as part of the annual planning cycle, and progress in achieving these targets is monitored on a monthly basis. Business units report actual financial data monthly and file a projection of how financial performance is expected to develop over the remainder of the reporting period.

Information from business units is consolidated and validated by the Group’s financial organization and the data is used to prepare a monthly report for senior management. Monthly reports contain condensed income statements for Fiskars’ operational segments and business areas, key indicators, and an overview of the major events affecting their businesses. Reports also include a consolidated income statement, balance sheet data, cash flows, and a projection of the expected development of the financial situation covering the remainder of the reporting period. The Group’s Audit Committee, the Group’s Board of Directors, the Corporate Management Team, and the leadership teams of each business area monitor the development of the financial situation and analyze progress on targets on a monthly basis.

Financial IT systems

Business units make use of a number of different account ingand financial reporting systems. Group-level financial reporting is handled using one centrally-managed system. Business units and business areas are responsible for providing data for the Group’s reporting system. The Group level financial management organization is responsible for maintaining the Group’s reporting system and for monitoring that appropriate and correct data is fed into the system.

As part of the five-year development program the Company will implement a common enterprise resource planning system (ERP) in the EMEA region in order to simplify the financial reporting process and reduce risks associated to the management of several different systems in parallel. The implementation of the new system will be performed in steps. The first implementation took place in late 2011, and the implementation of the system in the countries began during 2012. The most important implementations will take place in 2013 and 2014.

Guidelines

Financial reporting is governed by a set of common principles. The Group applies the IFRS accounting standards approved within the EU and has a common Group chart of accounts. The Group’s financial management organization has drawn up guidelines for units, covering the content of financial reporting and the dates within which reporting must take place.

Risk management related to the financial reporting process

The task of risk management is to identify potential threats affecting the financial reporting process that, if they were to become reality, could lead to a situation in which man agementlacked the up-to-date, sufficient, and essentially accurate information needed to manage the Company and in which financial reports published by the Company did not provide an essentially accurate picture of the Company’s financial position.

Fiskars manages the risks associated with its financial reporting process in a number of ways including the following: maintaining and resourcing an appropriate financial management organization, limiting the rights and responsibilities of individual members of staff appropriately, managing the user rights that give access to the Group’s reporting system centrally, issuing guidelines on accounting and reporting, maintaining a common Group chart of accounts, making effective use of IT tools, providing ongoing training for personnel, and validating the accuracy of information that is reported as part of the reporting process.

The Company is currently unifying its financial processes and implementing modern IT tools as part of its five-year development program in the EMEA region. With regards to risk management the objectives are to increase the number of internal checks and controls and to improve the transparency and quality of information used in management decision-making.