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 the operating instructions for Kesko's internal audit function.
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' management. 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 for internal audit operations in 2017 were the progress made in the implementation of Kesko’s strategies, significant ongoing projects, and data security and data protection matters.
Key focus areas for internal audit in 2018 are the progress made in the implementation of Kesko’s strategies, and projects and changes related to business operations, financial management, cyber security and data protection.
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 Company’s decision-making process. The Company shall keep a list of related parties.
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 5.3 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.
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.
The closed period of 30 calendar days before the publication of interim reports, the half year financial report and the financial statements, as provided by the Market Abuse Regulation (MAR), is applied to specific members of management at Kesko. During the closed period, the management is prohibited from trading 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, the half year financial report and financial statements. Information on 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 management 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. Transactions by Kesko’s management and persons closely associated with them are disclosed in accordance with MAR.
Kesko’s Legal Affairs Services 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 in the area of insider management include the following:
According to the Articles of Association, Kesko has one (1) Auditor, which shall be an audit firm authorised by Finland 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 2017 elected PricewaterhouseCoopers Oy, the firm of auditors, as the Company’s Auditor. The Auditor with principal responsibility for the Company is APA Mikko Nieminen.
He is currently the Managing Director of PricewaterhouseCoopers Oy and the auditor responsible for two 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 2016-2017 (€1,000)|
|Kesko Corporation||Other Group companies||Total||Kesko Corporation||Other Group companies||Total|