Sponsorship principles

Policies and practices concerning donations and sponsorship in the Kesko Group

1 Definitions of donation and sponsorship

In these guidelines, a donation is a gift referred to in Chapter 13, Section 8 of the Finnish Limited Liability Companies Act that may be granted by the decision of the Annual General Meeting for the public good or other corresponding purposes, if the amount of the donation, with regard to the position of the company and other circumstances of the case, can be considered reasonable. No compensation is attached to donations and they do not directly further the company's business. Donations can, for example, be given to support science, arts and political activities.

In these guidelines, sponsorship refers to such payments for which the company gets proper compensation in the form of, for example, increased visibility or awareness of the company or its products.

2 Procedure concerning donations

The Limited Liability Companies Act stipulates that the Annual General Meeting may authorise the company's Board of Directors to make more specific decisions on the use of the funds reserved for donations. In such a case, the Annual General Meeting makes the decision on the total amount of donations.

Kesko Corporation's Board of Directors annually makes a proposal to the Annual General Meeting on the use of distributable earnings. At the discretion of the Board of Directors, the proposal has also included a provision/authorisation to the Board of Directors on the use of the donated amount put forward in the proposal for profit distribution.

Within the authorisation given by the Annual General Meeting, Kesko's Board of Directors decides on the use of the donation funds and authorises the President and CEO to make a certain part of decisions concerning donations. Information about the donation decisions made by the President and CEO by virtue of the authorisation is given to the Board of Directors once a year.

The Group Communications Unit is responsible for the practical arrangements concerning the allocation of donation funds and for the preparation of the decision made by the President and CEO to the Board of Directors in compliance with the definitions set by the President and CEO.

3 Sponsorship rules and division of labour

3.1 Division level
The primary level where sponsorship applications are handled at Kesko is the division level. The divisions make independent decisions on their own sponsorship projects. When recipients are selected Group-level joint policies and definitions are observed as appropriate.

3.2 Group level
Kesko's Group Communications Unit is responsible for the coordination of Group-level sponsorship projects, while district-level projects in Finland are coordinated by Kesko's district directors in their respective areas. Kesko-level sponsorship primarily furthers stakeholder relationships, the employer image and Kesko's role as a responsible corporate citizen.

3.3 District level
Kesko's district directors coordinate district-level sponsorship projects in Finland. The Group Communications Unit assists in the selection of sponsorship projects, if necessary.

4 Sponsorship recipients

Sponsorship policies are built on Kesko's values and support the implementation of the strategy and vision of the whole Group. Kesko is primarily involved in supporting projects that are associated with the everyday life of families with children, promote the quality of living and sustainable development. Socially responsible activities are emphasised when cooperation targets are selected.

With well-planned sponsorship the company reaches its customers where they spend their active leisure hours. When recipients are selected carefully based on the wishes and values of the target groups, the company can get the messages through to these groups by making full use of the positive images attached to the sponsorship recipient.

All sponsorship must benefit the Group's business and brands.

5 Reporting

The division parent companies and district centres report about their sponsorship recipients to the Group Communications Unit, which prepares a summary of the Group's sponsorship recipients to Kesko Corporation's Board of Directors and President and CEO once a year.

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