Audit Committee and its operations

The Board elected in its organisational meeting, held after the Annual General Meeting on 8 April 2019, the following Board members as the Audit Committee members:
  • Jannica Fagerholm, (Chairman)
  • Matti Kyytsönen (Deputy Chairman)
  • Piia Karhu

All members of the Audit Committee are independent of the Company's significant shareholder and the majority is also independent of the Company. In the election of the Audit Committee members, the competence requirements for Audit Committee members have been taken into account.

In accordance with its charter, the Audit Committee:

  • monitors Kesko Group's (Kesko) financial position and funding
  • monitors and assesses Kesko’s financial reporting system, including the process for financial statements reporting
  • monitors and assesses the effectiveness of Kesko's internal control, internal audit and risk management systems
  • approves the operating instructions for the Company’s internal audit and annually assesses the need for changes, approves the annual audit plan, budget and resources and related material changes, and reviews reports submitted to the Committee
  • monitors the statutory auditing of the Company and the Group
  • discusses matters that emerge in connection with auditing and in relation to the Committee’s duties with the Company’s Auditor when necessary and otherwise handles contacts with the Auditor
  • reviews the Auditor’s Report and possible audit minutes and reports presented by the Auditor to the Committee
  • monitors and evaluates the independence of the Company’s Auditor and, in particular, the non-audit services provided to Kesko by the Auditor and its network audit companies
  • prepares the appointment of the Company’s statutory Auditor and recommends an Auditor
  • monitors and assesses how agreements and other legal acts between the Company and its related parties meet the requirements of ordinary course of business and arm’s-length terms
  • prepares a recommendation to the Board of Directors regarding the review of interim reports, the half year financial report, and the financial statements
  • reviews the Company’s Corporate Governance Statement and non-financial report
  • prepares and reviews other tasks given by the Board to the Committee

In 2019, the Audit Committee held seven meetings. The members' attendance rate at the Committee meetings was 100%. At the Committee meetings, the Group's Chief Financial Officer, the Group Controller and the director in charge of internal audit regularly reported on their areas of responsibility to the Committee. The Committee also receives reports on Kesko Group's funding situation, taxation, information management, risk management and insurances.

The Auditor is present at the Committee meetings and presents their audit plan and report to the Audit Committee. During the year, the Committee reviewed the reports on the Group's financial situation, including the financial statements release, the half year financial report and the interim reports and updated forecasts, and made a recommendation to the Board on the review of the reports and the financial statements release. The Committee reviewed the reports of the Group's external and internal audits and risk management and the Corporate Governance Statement. The Audit Committee also reviewed goodwill impairment testing and the Group’s risk reporting in the financial statements.

During the year, the Audit Committee arranged for the tendering of Kesko’s statutory auditing, and gave the Board a recommendation for the proposal for the election of Auditor, based on which the Board submitted a proposal for the election of Auditor to the 2020 Annual General Meeting. The Audit Committee also prepared and submitted to the Board a recommendation for the proposal for the election of Auditor to Kesko’s 2019 Annual General Meeting.

The Audit Committee monitored the implementation of the audit plan for internal audit, the impact of new IFRS standards on the Group’s reporting, the development of associated companies and additional services purchased from firms of auditors, and reviewed the proposal for the Group’s financial targets and cyber security reviews.

The Committee also monitored and evaluated the Auditor's independence and the non-auditing services provided by the Auditor to the Group. The Audit Committee also approved the audit plan, personnel resources and budget for the Group’s internal audit in 2020.

The Audit Committee assessed its operations as part of the Board’s self-assessment. Topics that emerged in the assessment included the Committee’s significant role in monitoring the Group’s risk management and the commitment of Committee members to their duties.

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