Internal control and risk management

Main features of the internal control and risk management systems pertaining to the financial reporting process.

Internal Control and Risk Management System The Board of Directors of Amer Sports approves and endorses the Risk Management Policy. The policy defines objectives, principles, processes and responsibilities concerning risk management within Amer Sports companies. Identifying and evaluating risks makes it possible to manage them. This identification and evaluation of risks enables sufficient and effective internal controls to be put in place. The process of risk management and the internal controls relating to financial reporting in Amer Sports are designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements.

Risk management process

The risk management process is embedded in the business management and internal control framework in order to support the accomplishment of the company’s strategic business targets and financial reporting objectives. Responsibility for risk management rests with Amer Sports’ business segments/areas, sales and supply chain organizations and support functions, which report regularly to the management of Amer Sports on the main risks connected with their operations. The management of financial risks is centralized within Amer Sports’ Treasury function. The guidelines for risk management are set out in the Financial Risk Management Policy, which is approved by the Board of Directors and which encompasses the principles and risk limits connected with the balance sheet structure, relationships with financial institutions and other financing risks.

Reporting segments

Amer Sports’ primary reporting segments are its business segments: Winter and Outdoor, Ball Sports, and Fitness. Winter and Outdoor is divided into the following business areas: Winter Sports Equipment, Apparel and Footwear, Cycling and Sports instruments. Ball Sports’ business areas are Racquet Sports, Team Sports and Golf. Fitness’ business area is Fitness Equipment. The secondary reporting segments are the regions; the Americas, EMEA and Asia Pacific. In overseeing the operations, the President and CEO and other executives make use of weekly sales reports, monthly financial reports, and regular meetings with the management teams of business segments/areas and regions.

Financial reporting

Financial reporting is carried out in a harmonized way in all group companies. Amer Sports’ accounting policies in both external and internal financial reporting are based on the International Financial Reporting Standards (IFRS). In addition to IFRS, more specific group policies and guidance are provided in Amer Sports’ accounting policies manual (Corporate Manual). The Amer Sports Finance and Control function is responsible for maintaining the accounting policies and reporting systems. It also monitors that these reporting policies are followed.

The business segments are responsible for providing their financial statements. The Amer Sports Finance and Control function consolidates financial statements. Amer Sports is in the process of implementing a group-wide, unified ERP (Enterprise Resource Planning) system (SAP). This includes a harmonized chart of accounts and the control environment. The Amer Sports Finance and Control function is responsible for monitoring the implementation of SAP rollouts.