Kesko's internal audit function is responsible for the Group's independent evaluation and assurance function required of a listed company, which systematically examines and verifies the efficiency of risk management, control, management and governance. The Audit Committee of Kesko's Board of Directors has confirmed Kesko's internal audit function's operating instructions.
The internal audit function is organised under Kesko's President and CEO and the Audit Committee, and it reports on its findings and recommendations to the Audit Committee, the President and CEO, the management of the audited operation, and the Auditor. The function covers all of Kesko's divisions, companies and functions. Auditing is based on risk analyses, as well as risk management and control discussions conducted with the Group's and divisions' managements. Meetings with the Auditor are arranged on a regular basis in order to ensure sufficient audit coverage and to eliminate overlapping operations.
An internal audit plan, subject to approval by the President and CEO and the Audit Committee, is prepared annually. The audit plan is modified on a risk basis, if necessary. As necessary, the internal audit function purchases external services for added resources or for the purpose of conducting audit operations which require special expertise. Audits can also make use of the expertise and work contribution of Kesko Group's other specialists.
The key focus areas of internal audit operations in 2016 were the progress of the implementation of Kesko’s strategies, the completed acquisitions, quality programmes, the business operations in Russia with related risks, the efficiency of data security and data protection issues.
The key focus areas of internal audit operations in 2017 will be the implementation of Kesko’s strategies, the significant projects in progress as well as data security and data protection matters.
According to the Corporate Governance Code, the company shall evaluate and monitor transactions concluded between the company and its related parties and ensure that any conflicts of interest are taken into account appropriately in the decision-making process of the Company. The Company shall keep a list of parties that are related to the Company.
The Company shall report the decision-making procedure applied in connection with related party transactions that are material to the company and that either deviate from the Company’s normal business operations or are not made on market or market equivalent terms.
Kesko Group’s related party transactions are reported in note 33 to the consolidated financial statements. The related party transactions do not deviate from the Company’s normal business operations and they have been made on normal market terms.
The Market Abuse Regulation ((EU) N:o 596/2014, ”MAR”) entered into force on 3 July 2016. In consequence of the MAR regulation, the main procedures relating to insider administration changed in 2016. The main procedures relating to insider administration followed since 3 July 2016 are described below. Prior procedures relating to insider administration are described in the 2015 CG Statement available at http://kesko.fi/en/investor/corporate-governance/statements/.
Kesko complies with Nasdaq Helsinki Ltd’s guidelines for insiders in force at any given time. In addition, Kesko Corporation’s Board of Directors has confirmed specific insider guidelines for the Company complementing Nasdaq Helsinki Ltd’s guidelines for insiders.
As a result of the MAR regulation, the Company no longer has public insiders. The information on the Shareholdings of public insider register pages has not been updated since 3 July 2016. In the future, Kesko will not maintain a permanent company specific insider register either and will only maintain project specific and event specific insider lists.
As the MAR regulation entered into force, the closed period of 30 calendar days before the publication of the interim reports, half year financial report and the financial statements, provided by the MAR regulation, will be applied to managers defined by Kesko. During the closed period, the managers are prohibited from dealing in Kesko’s financial instruments. The Company has imposed a 30-day closed period preceding the quarterly financial performance disclosures also on persons involved in the preparation of Kesko’s interim reports, half year financial report and financial statements. Information on the closed periods is provided annually in a stock exchange release.
As the public insider register was discontinued, the Company’s obligation to disclose the transactions of the Company’s managers and persons closely associated with them changed as of 3 July 2016. At Kesko, Kesko Corporation’s Board of Directors, the President and CEO, as well as the other Group Management Board members have been defined to be subject to the requirement to notify their transactions.
Kesko’s Legal Affairs Services Department controls the compliance with insider guidelines and maintains the Company’s insider lists and a list of managers and persons closely associated with them. The duties of Kesko’s Legal Affairs Services Department in the area of insider management include the following among others
According to the Articles of Association, Kesko has one (1) Auditor, which shall be an audit firm authorised by Finland's Chamber of Commerce. The Audit Committee submits a proposal to the Annual General Meeting for the Company’s Auditor. The Audit Committee also evaluates the auditor’s operations and services annually. The term of office of the Auditor is the Company’s financial year and the Auditor’s duties end at the close of the Annual General Meeting following the Auditor’s election. As a rule, an audit company belonging to the same chain as the audit firm represented by the Auditor elected by Kesko’s General Meeting acts as the Auditor of the Group’s foreign subsidiaries.
The Auditor provides Kesko’s shareholders with the statutory Auditor’s Report in connection with the Company’s financial statements and regularly reports on its findings to the Audit Committee of Kesko’s Board of Directors.
The Annual General Meeting 2016 elected PricewaterhouseCoopers Oy, the firm of auditors, as the Company’s Auditor, with APA Mikko Nieminen as the Auditor with principal responsibility. He is currently the Managing Director of PricewaterhouseCoopers Oy and the auditor responsible for three Finnish listed companies:
APA Mikko Nieminen has been the Auditor with principal responsibility for the Company since 13 April 2015.
The General Meeting resolved that the Auditor's fee is paid and expenses are reimbursed according to invoices approved by the Company.
|Auditors’ fees in 2015-2016 (€1,000)|
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