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62 <strong>Kesko's</strong> <strong>year</strong> <strong>2007</strong><br />
former Corporate Executive Vice President, Deputy to the President<br />
and CEO, renounced his membership in the Corporate Management<br />
Board as of 1 June <strong>2007</strong>.<br />
In <strong>2007</strong>, the members of the Corporate Management Board, excluding<br />
the President and CEO, received* €1,378,699 (€1,358,570 in 2006)<br />
in salaries, €100,172 (€117,879) in fringe benefits and €218,210<br />
(€174,804) in bonuses, €1,697,081 (€1,651,253) in all.<br />
During <strong>2007</strong>, the members of the Corporate Management Board,<br />
excluding the President and CEO, sold 5,000 stock options 2003D,<br />
46,000 stock options 2003E and 90,500 stock options 2003F. At the<br />
end of the <strong>year</strong>, they had a total of 13,000 stock options 2003E, 56,500<br />
stock options 2003F and 145,000 <strong>2007</strong>A stock options, the subscription<br />
period for which will begin on 1 April 2010. Further information<br />
about Kesko’s Corporate Management Board is available on pages<br />
68–69 and at www.kesko.fi.<br />
Auditing<br />
The <strong>2007</strong> Annual General Meeting of Kesko elected one auditor for the<br />
company: PricewaterhouseCoopers Oy, Authorised Public Accountants,<br />
with Pekka Nikula, APA, as the auditor with principal responsibility.<br />
The fees paid in <strong>2007</strong> to firms that belong to the Pricewaterhouse-<br />
Coopers chain in Finland and other countries for auditing Kesko Group<br />
companies totalled €786,815 (€1,122,780 in 2006), while the fees paid<br />
for consulting services, including tax and IFRS consultation, totalled<br />
€363,201 (€411,420). In some Kesko Group companies, auditing is carried<br />
out by auditors other than those belonging to the Pricewaterhouse-<br />
Coopers chain. The amount of auditing fees paid to all auditors totalled<br />
€905,351 (€1,271,860) in <strong>2007</strong>.<br />
Insider administration<br />
Kesko’s insider regulations<br />
Kesko’s Board of Directors has confirmed Kesko’s insider regulations<br />
for permanent and project-specific insiders. They take into account the<br />
regulations of the Market Securities Act and the standard on insider<br />
holdings and insider registers issued by the Financial Supervision<br />
Authority. The contents of the regulations also correspond with the<br />
insider rules of the OMX Nordic Exchange Helsinki. Kesko’s insider<br />
regulations have been distributed to all insiders.<br />
Kesko’s permanent insiders and insider registers<br />
In accordance with the Securities Markets Act, Kesko’s permanent public<br />
insiders include Kesko’s Board members, the President and CEO,<br />
and the auditor with principal responsibility in the firm of auditors.<br />
Kesko Corporation’s Board of Directors has also stipulated that, in<br />
addition to the President and CEO, other members of the Corporate<br />
Management Board are regarded as the company’s permanent public<br />
insiders. All permanent public insiders and the statutory information<br />
about them, their related persons and the corporations that are controlled<br />
by related persons or in which they exercise influence, have been<br />
entered in Kesko’s register of public insiders.<br />
Other permanent insiders of Kesko include such persons working in<br />
positions determined by the Board of Directors, who in their duties<br />
receive insider information on a regular basis and who are thus entered<br />
in the company’s own, non-public insider register. Kesko’s company-<br />
specific insider register is divided into individual registers that consist<br />
of permanent insiders and of possible insider projects and persons<br />
participating in their preparation.<br />
Monitoring<br />
The Group’s Legal Affairs Unit monitors the compliance with insider<br />
regulations and maintains the company’s insider registers in cooperation<br />
with the Finnish Central Securities Depository Ltd. The Legal<br />
Affairs Unit sends, at regular intervals, permanent public insiders an<br />
extract of the information in the insider register and monitors the permanent<br />
insiders’ compliance with trading restrictions. Kesko’s permanent<br />
insiders may not acquire or transfer securities issued by the company,<br />
including securities or derivative financial instruments entitling<br />
to them, during 21 days prior to the publication of interim financial<br />
reports and during 28 days prior to publication of annual financial<br />
statements. These dates of publication are announced annually in<br />
advance by stock exchange release. Furthermore, the persons involved<br />
in possible insider projects may not trade in such securities or derivative<br />
financial instruments during the project.<br />
Further information about the holdings of Kesko’s permanent public<br />
insiders is available on pages 143–144 or see updated information at<br />
www.kesko.fi.<br />
Stock exchange releases<br />
The General Counsel is responsible for ensuring that the rules related<br />
to stock exchange releases are observed at Kesko. The Group’s Senior<br />
Vice President, CFO is responsible for the financial content of stock<br />
exchange releases as well as for investor information. The Corporate<br />
Communications and Responsibility Unit produces Group-level communications<br />
material and is responsible for providing stock exchange<br />
and financial information.<br />
In its investor communications, Kesko follows the principle of<br />
impartiality and publishes all investor information on its Internet<br />
pages in Finnish, Swedish and English.<br />
Risk management at Kesko<br />
The objective of Kesko’s risk management is to ensure the fulfilment of<br />
the Group’s customer promises, the improvement of shareholder value,<br />
good profit performance, the ability to pay dividends and the continuation<br />
of business. Efficient risk management is a competitive advantage<br />
for Kesko. In the Kesko Group, a risk has been defined as any kind of<br />
uncertainty factor that may lead to:<br />
●●<br />
●●<br />
a failure to exploit business opportunities,<br />
events or reasons which prevent or hinder the attainment of objectives<br />
or cause other unwanted consequences.<br />
1 COSO ERM refers to the Enterprise Risk Management (ERM) – Integrated Framework<br />
published by the Committee of Sponsoring Organizations (COSO) of the Treadway Commission<br />
in September 2004. The framework defines essential ERM components, suggests<br />
a common ERM language and provides clear direction and guidance for enterprise<br />
risk management.<br />
*Juhani Järvi is included in the <strong>year</strong> <strong>2007</strong> figures until 31 May <strong>2007</strong>. In the <strong>year</strong> 2006<br />
figures, Juhani Järvi is included for the whole <strong>year</strong>.