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The main components in the Apetit Plc (“Apetit” or “the company”) chain of control are as follows:
The roles and responsibilities pertaining to each of the components in the chain of control are described in these guidelines. Seamless cooperation between the components in the chain of control is essential for the success of Apetit Plc and for ensuring growth in shareholder value. The Board of Directors and the operating organisation’s management occupy a critical position and bear the primary responsibility for developing Apetit Plc and increasing the shareholder value.
Beginning from 1 January 2024, The Apetit Group comprises of Apetit Plc and its subsidiaries Apetit Ruoka Oy and Apetit Kasviöljy Oy. Apetit Kantvik Oy merges to Apetit Kasviöljy Oy according to the plan in 31 January 2023.
Apetit is a Finnish public limited liability company, whose decision-making and governance adhere to the Finnish Limited Liability Companies Act (“Limited Liability Companies Act”), other regulations applicable to publicly listed companies, the company’s Articles of Association and the rules of procedure of the company’s Supervisory Board, Board of Directors and its Committees. Furthermore, the company complies with Nasdaq Helsinki Ltd’s rules and guidelines and the Finnish Corporate Governance Code (“Corporate Governance Code”) approved by the Securities Market Association, which entered into force on 1 January 2020.
The company deviates recommendation 5 (concerning the election of the members of the Board) and recommendation 15 concerning the number of members of Audit Committee. The procedure for electing the company’s board deviates from the procedure according to the Corporate Governance Code. Under Apetit Plc’s Articles of Association the Supervisory Board elects the members of the Board based on the proposals of the Nomination Committee and decides on their remuneration, according to the remuneration policy (“Remuneration Policy”) presented to the Annual General Meeting. The company has chosen to deviate from the recommendation because the Supervisory Board, as the body that oversees the company’s Board of Directors, is best placed to assess the composition of the Board of Directors and the attributes required of Board members. According to recommendation 15 of the Corporate Governance Code, the number of committee members should be at least three. Given the size of the company, the number of members of the Board of Directors and the division of labor between the Board of Directors and the Audit Committee, the Board of Directors has appropriately considered that the Audit Committee consists of two members.
Apetit Plc’s highest decision-making authority is exercised by its shareholders at a general meeting of shareholders, which is convened at the invitation of the company’s Board of Directors. General meetings are either Annual General Meetings or Extraordinary General Meetings.
The Annual General Meeting is held each year before the end of May at a time specified by the Board of Directors. The issues to be dealt with at an Annual General Meeting, as set out in the Articles of Association, are discussed at the meeting, together with any other proposals put to the general meeting. The Annual General Meeting is usually held in March or April.
If necessary, an Extraordinary General Meeting will convene to discuss a specific proposal that has been put to a General Meeting. An Extraordinary General Meeting is to be held at the request of shareholders if the ownership share of the shareholders who made the proposal regarding a specific issue adds up to at least 10% of the company’s shares.
Shareholders are invited to general meetings with an invitation, containing a proposed agenda for the meeting, that is published on the company’s web pages at the earliest two months and at the latest 21 days before the meeting. In addition to this, the invitation and the Board of Directors’ proposals to be put to the general meeting are published in a stock exchange release and, if so decided by the Board of Directors, in at least one national newspaper determined by the Board of Directors. The total number of shares and voting rights on the date of the invitation, the documents to be submitted to the general meeting and other items on the agenda of the general meeting are also given on the company website.
Each shareholder has the right to place an item of concern to the general meeting, as laid down in the Limited Liability Companies Act, on the agenda for discussion at the meeting, provided that the shareholder requests this in sufficient time for the item to be included in the invitation to the meeting. The date by which shareholders must notify such a request to the Board of Directors will be given on the company’s website, no later than the end of the fiscal year preceding the annual general meeting.
In order to attend a general meeting, shareholders must notify the company of their attendance in advance by the date specified in the invitation. A shareholder may attend the shareholders’ meeting in person or may authorise a proxy to attend. A shareholder or proxy may also have an assistant at the meeting. Minutes of the meeting are drawn up and made available to the shareholders on the company website within two weeks of the meeting. In addition, a stock exchange release is issued without delay after the general meeting, stating the decisions made at the general meeting.
The CEO, the Chairman of the Board of Directors and Board members must be present at a general meeting. In addition, the auditor must be present at the Annual General Meeting.
The company has one series of shares, and the shares carry equal voting rights. No single shareholder is entitled to exercise voting rights representing more than one tenth of the votes at a General Meeting. When voting, a proposal supported by more than half of the votes cast generally constitutes the General Meeting’s decision. In elections, the selection is based on the number of votes received. In the event of a tie, elections are settled by lot. In other situations, the decision shall follow the proposal supported by the Chairman. However, according to the Limited Liability Companies Act, there are several situations, such as the amendment of the Articles of Association and a decision on private placement, where the decision depends upon the qualified majority as stated in the legislation (2/3 of the votes cast and shares represented at the General Meeting).
The company’s Articles of Association do not include a redemption clause. To the knowledge of the company, there are no shareholder agreements regarding the use of voting rights in the company or any agreements that limit the renunciation of shares.
The company has a Supervisory Board that comprises a minimum of 14 and a maximum of 18 members elected by the General Meeting. The Supervisory Board members’ terms of office end at the close of the third Annual General Meeting following their election. In order to ensure that a third or a number closest to a third of the members’ terms ends annually, new members’ terms can exceptionally be limited to one or two years. In general, the Supervisory Board convenes three times per year.
Based on the proposals of the Nomination Committee, the Supervisory Board elects the members, chairman and vice chairman of the Board of Directors, and decides on their remuneration (which are based on Remuneration policy). The Supervisory Board is also responsible for supervising the corporate administration, issuing instructions to the Board of Directors, issuing an opinion on the Financial Statements, the Board of Directors’ report and the auditors’ report, and other duties that are prescribed for it in the Limited Liability Companies Act.
The Supervisory Board’s Nomination Committee, which prepares the names for election to the Board of Directors, consists of two members chosen by the Annual General Meeting, the Chairman of the Supervisory Board, the Deputy Chairman of the Supervisory Board and the Chairman of the Board of Directors, in accordance with the Articles of Association. The Nomination Committee is chaired by the Chairman of the Supervisory Board, and in his/her absence, by the Deputy Chairman of the Supervisory Board. Based on the Remuneration Policy, The Nomination Committee is tasked with preparing proposals for i) the General Meeting on the remuneration of Supervisory Board members and ii) the Supervisory Board on the number of members of the Board of Directors, the names of the members and the Chairman and Deputy Chairman of the Board of Directors as well as the remuneration payable to them. The Committee’s tasks also include searching for successor candidates to replace members of the Board of Directors, as necessary. The Committee shall ask shareholders with significant voting power for their views concerning the proposals being put to the Supervisory Board.
Proposals for the composition of the Board of Directors and concerning the remuneration to be paid to the members of the Board of Directors are submitted by the Supervisory Board’s Nomination Committee.
In accordance with the Articles of Association, Apetit Plc’s Board of Directors consists of a minimum of five and a maximum of seven members. The term of office of the Board of Directors ends at the close of the first Supervisory Board meeting convened following the first Annual General Meeting after the Board’s election. The composition of the Board of Directors must take into account the needs of the company’s operations and the company’s stage of development. A person elected to the Board of Directors must have the competence required for the task and have enough time to spend dealing with the task. The composition of the board must also take into account that at least one of the board members must have expertise in accounting or auditing. The Articles of Association do not limit the number of terms served by members of the Board of Directors nor is the Supervisory Board’s decision-making power in the election of members of the Board of Directors restricted in any other way.
The general function of the Board of Directors is to direct the operations of the company in such a way that in the long term the amount of added value for the capital invested is maximised, while taking into account the expectations of the different stakeholders at the same time.
To support its activities, the Board has formed and confirmed the rules of procedure, which define the Board’s duties, operating methods, meeting practice and decision-making procedure.
For the purpose of performing its functions, the Board of Directors, among other things:
Based on the proposals presented by the CEO, the Board of Directors, among other things:
The general duty of the Board chairman is to manage the work of the Board in such a way that its tasks can be carried out as effectively and appropriately as possible. To this end, the chairman
If the chairman is prevented from attending to these duties, the vice chairman shall attend to them to the extent separately agreed.
The Board of Directors has carried out an evaluation of the extent to which its members are independent of the company in accordance with recommendation 10 of the Corporate Governance Code.
Member of the board Antti Korpiniemi serves as CEO of Berner Oy. Apetit Group’s subsidiaries have business cooperation with the Berner Oy. In addition, Berner Oy is a significant shareholder in Apetit Plc. Based on the above, Antti Korpiniemi is not independent of the company or its significant shareholder in accordance with the Corporate Governance Code 2020. The evaluation found that all of the other Board members are independent of the company and of significant shareholders as referred to in the Corporate Governance Code recommendation.
The Board of Directors shall also be obligated to act in the interest of the company and in a way that does not lend itself to providing a shareholder or any other party with an unfair advantage at the expense of the company or any other shareholder. Members of the Board shall be disqualified from taking part in the handling of any issue between a member of the Board of Directors and the company. Furthermore, members of the Board of Directors may not participate in handling an issue in the Board of Directors of the company or its subsidiary that involves a party with close ties to themselves as laid out in the Limited Liability Companies Act, and legal action does not constitute regular business of the company, or it is not carried out in conventional commercial terms. A decision regarding such agreements or other legal action shall be valid if they are supported by the required majority of those members of the Board of Directors of the company or its Finnish subsidiary who do not have close ties to the issue at hand. In voting situations, the Board of Directors’ decision shall follow the opinion of the majority. In the event of a tie, the decision shall follow the opinion supported by the Chairman. In personal elections, in the event of a tie, the selection shall be decided by lot.
The Board convenes about ten times a year. The Board has not allocated its members any specific aspects of the company’s operations for them to oversee. The Board has an Audit Committee with rules of procedure confirmed by the Board. The CEO of Apetit Plc, or another member of the corporate management assigned by the CEO, is responsible for presenting the issues to be dealt with at the Board meeting. According to the Board’s rules of procedure, the CEO is responsible for ensuring that the Board is provided with sufficient information in order for it to be able to assess the operations and financial position of the Group. The CEO also supervises the implementation of Board decisions and reports to the Board on any deficiencies or problems in their implementation. The Board secretary is the the employee responsible for the group’s legal affairs or other person decided by the board. The Board regularly evaluates its performance and working methods by carrying out a self-evaluation once a year. The results of the evaluation are submitted to the Supervisory Board for its information.
The Supervisory Board decides on the Board of Directors’ remuneration and the grounds for expenses compensation every year according to the Remuneration policy. The fees for members of the Board are paid as cash compensation. Paid remunerations are stated on the company website. The remuneration report describing the implementation of the Company’s remuneration policy is available on the Company’s website for the first time from the 2020 financial year.
The Board of Directors has elected an Audit Committee from among its members. The purpose of the Audit Committee is:
Apetit Plc has a CEO. It is the CEO’s duty to direct the operations of the company according to the instructions and provisions issued by the Board of Directors and to inform the Board about the development of the company’s business operations and financial situation. The CEO is also responsible for the arrangement of the day-to-day management of the company and that the company’s accounts are in compliance with the law and that its financial affairs have been arranged in a reliable manner.
The CEO is primarily responsible for introducing the issues that will be dealt with at the Board meeting and responsible for drawing up the proposals for decisions. In matters the CEO considers appropriate, the CEO may also delegate these tasks to a member of the Group management. The CEO and is selected by the Board of Directors, which also decides on their salary, performance-related benefits, in accordance with the Remuneration policy, and other conditions of the terms of his/her service. The CEO’s terms of service have been agreed in writing. The CEO does not have a fixed term of office, but has been appointed for the task until further notice.
The retirement age for the CEO is 63.
The salary and fringe benefits paid to the CEO are reported on the company’s website.
The period of notice for the CEO’s contract is 12 months if the company terminates the contract, and 6 months if the CEO terminates the contract.
The Apetit Group has a Corporate Management, which is chaired by the CEO of Apetit Plc. Its members comprise the separately selected members of management. The Corporate Management does not exercise powers based on law or the Articles of Association.
The Corporate management is an advisory body appointed by Apetit’s CEO, whose task is to assist the CEO in the operational management of the Company’s business operations, handling group-wide development projects and group-level principles and procedures when necessary, supervising business operations and promoting group-wide development projects in accordance with the Company’s strategy and goals, managing stakeholder relations and following a unified personnel policy and remuneration practice. In addition, the task of the management team is to create group-level procedures and support risk management processes. The CEO is responsible for choosing the members of the Corporate Management. Personal details about members of the Corporate Management and their shareholding are reported on the company website.
The remuneration and incentive plans for management are made up of monetary remuneration, fringe and pension benefits, and performance-related compensation, by which the degree of success for the year is measured. The level of these plans as a whole is compared annually with the general market level.
The Board of Directors of Apetit Plc decides, in accordance with the Remuneration policy, on the principles for the remuneration and incentive plans for the CEO and other members of the management. The Board also confirms annually the indicators to be used for the plans and their level in relation to the targets set. The indicators include key figures connected with annual budgets as well as development targets selected on a function-specific basis. The maximum amount of short-term performance-related compensation corresponds to 6 months salary in the case of the CEO, and 4 salary for other management.
The primary purpose of the statutory auditing of the accounts is to verify that the Financial Statements provide correct and sufficient information on the Group’s results and financial position for the financial year. Apetit Plc’s financial year is the calendar year.
The auditor is responsible for inspecting the accuracy of the company’s bookkeeping and Financial Statements for the financial year and the Board of Directors’ report, and for issuing an auditors’ report to the general meeting. Under Finnish law, the auditor must also inspect the lawfulness of the company’s administration. The auditors report their observations to the Board of Directors and its Audit Committee at least once a year.
In accordance with the Articles of Association, Apetit Plc has a minimum of two and a maximum of three auditors appointed by the Annual General Meeting. An auditor’s term ends at the close of the next Annual General Meeting following the election of the auditor. The auditors must be auditors or audit firms approved by the Central Chamber of Commerce.
The fees paid to the auditors are stated on the company website.
The achievement of financial targets is monitored by means of monthly reports which cover the entire Group. The reports compare the monthly and cumulative results with the budget, the previous year and regularly updated forecasts. Data from the monthly reports are regularly reconciled with the accounts. The Group CEO and members of the Corporate Management are issued with the reports, and the Group’s Board of Directors is issued with a summary for the Group and summaries of the data for each segment and business unit.
Internal control has been incorporated into the Group’s business operations. The Board of Directors approves the common guidelines for internal control of the entire Group and assesses at least once a year the state of the internal control. The boards of directors of Group companies are responsible for the highest level of management duties related to the internal control of their respective companies. The operating organisation’s management in each of the Group companies is responsible for the implementation of internal control and risk management in line with the pre-determined principles and operating guidelines, and for reporting on the company’s operations, risk-bearing ability and risk situation in accordance the Group’s management system. Group CFO ensures that legislation and Group guidelines are complied with. Internal Group audits are performed by an external service provider. The Group’s internal audit assesses the efficiency of internal control and identifies and reports on aspects that can be further developed. The internal audit reports its observations to the Parent Company Board of Directors and its Audit Committee. Control audits are also carried out by Group auditors as part of the annual audit programme. The auditors report their observations to the director of the unit inspected, the person in charge of financial matters, the Group’s CFO and the CEO.
The Apetit Group has a documented and comprehensive risk management system under which all Group companies and business units regularly identify, assess and report the risks involved in their operations and the adequacy of their control and management methods. The purpose of these risk assessments, which support strategy formulation and decision-making, is to ensure that sufficient measures are taken to control the strategic, operating, financial and hazard risks.
Each year, the Apetit Plc Board of Directors confirms that the Group’s risk management policy and its risk management principles and limits are relevant and up-to-date.
The most significant risks and uncertainties are assessed annually in the Board of Directors’ report. Short-term risks and uncertainties are reported in the Interim Reports and in Financial Statement bulletins.
The governance principles of the business units ensure that the units’ operations comply with decisions that have been taken and that the people in the various units have a clear idea of the responsibilities and powers associated with the tasks in the unit. These same principles are also applied in Apetit Plc’s Group administration and all the subsidiaries.
Directors working in the business units and Group administration must ensure that the operations and decision-making conform to agreed administrative principles. They must also ensure that operations in their business units follow the operating principles approved for them.
Decision-making and responsibility apply at a personal level. The role of the management groups and working groups is to act as bodies that prepare matters for decision-making. The delegation of powers of decision is also at a personal level.
The legal structure of the Group does not correspond to the operational structure of the Group’s business operations. The legal units comprise only the foundation for the broader legal structure of the business operations. The boards of directors of subsidiaries fully owned by the Parent Company are made up of people employed by the Group. One or more members of the Group’s Corporate Management are on the board of the major Group companies.
The companies’ activities are based on operating plans and budgets consistent with company strategy, and these are subject to approval by the company Board of Directors. The Apetit Plc Board of Directors approves the companies’ operating plans and annual plans each year. Decision-making by the company’s CEO is based not only on the Limited Liability Companies Act and the company’s Articles of Association, but also the approved operating plan and budget. The applicability of the operational management system to the company’s operating policy is verified in management reviews held twice a year. Monitoring of the targets set is based on the company’s internal reporting, made on a continuous basis.
Apetit Group complies with the insider regulation in force at any given time and Nasdaq Helsinki Oy’s insider guidelines. In addition, the Group has insider rules approved by the Board on December 21, 2022, which supplement Nasdaq Helsinki Oy’s insider guidelines and which will be updated if necessary.
The Company’s insiders include i) managers subject to the disclosure obligation, ii) knowledgeable core and iii) project-specific insiders.
The Company maintains a non-public register of its managers subject to the disclosure obligation and their related parties. The Company also maintains a non-public register of its project-specific insiders. The people entered into a project-specific insider register are notified of their inclusion and the related obligations in writing or by other verifiable means, such as email. Insiders must confirm receipt of the notification.
A person must submit a basic declaration to the keeper of the Company’s insider register immediately after becoming a manager subject to the disclosure obligation. The basic declaration is provided using a form submitted by the Company. A manager who is subject to the disclosure obligation must submit a new declaration whenever changes occur in the circumstances declared on the form. The declaration of changes in circumstances must be provided without delay. Persons who, according to the information they receive from the Company, will be included in the insider group of the Company’s knowledgeable core have a corresponding reporting obligation.
Project-specific insiders include everyone with access to inside information who works at the Company on the basis of an employment relationship or who is otherwise performing duties that provide them with access to inside information. A person becomes a project-specific insider after receiving undisclosed information about a project and loses their insider status after the project has been made public or the cancellation of the project has been announced. The Company informs the people involved about the establishment of a project and the related obligations and enters these people into a project-specific insider register. The project-specific insider register is updated whenever the grounds for including a person change, a new person gains access to inside information or a person no longer has access to inside information.
Throughout its communications, Apetit complies with Finnish and EU legislation, the rules of Nasdaq Helsinki Ltd and the Financial Supervisory Authority’s regulations.
The principal aim of the disclosure policy is to ensure that sufficient and correct information is available concurrently about the company and its business operations as a basis for determining the price of the company’s securities. The company discloses, as soon as possible, such inside information that if published is likely to have a significant effect on the value of the financial instruments issued by the company. The information is disclosed in a manner that allows the public to access this information quickly and fairly, and that enables a thorough, appropriate and timely assessment of the information.
Company and accounting regulations require that related party transactions are identified and that they are properly carried out and recorded in the accounts and financial statements. The monitoring and control of related party transactions is the responsibility of the Board of Directors. Related party disclosure rules are applied, among other things, to financial statement information on related party loans and guarantees, board work and decision-making.
According to a basic principle of limited liability company law, transactions between a company and its related parties are acceptable when they are in accordance with the purpose of the company’s operations and the company’s interests, have a business justification and are carried out on market terms. In identifying related party transactions, attention must be paid to the actual content of the transaction and the relationship between the parties, and not solely to the legal form. In addition, under limited liability company and accounting legislation, the company must separately disclose information on transactions with related parties in its financial statement and Board of Directors’ report, subject to certain conditions.
Apetit Plc’s related parties are defined in accordance with IAS 24. Related parties consist of natural persons as well as companies and entities that, due to their position or the prevailing circumstances, are particularly close to the company. The Company keeps a register of related parties (“Related Party Register”) as well as records of related party transactions. The registers are GDPR-compliant personal data registers for which privacy and data protection statements have been drawn up. The registers are not public documents.
Company CFO is responsible for the operational management of related parties and for maintaining the Related Party Register and monitoring related party activities.
The Company adheres to the following basic principles in carrying out, monitoring and supervising related party activities:
The Company’s related party administration monitors transactions to identify related party transactions. Persons belonging to related parties of the Company are obliged to report any planned or known related party transactions to the Company’s related party administration without delay. The Company’s executives are obliged to notify the Company of any changes in their and their related parties’ information without undue delay. The Company’s operational management also asks the Company’s executives and any significant shareholders to verify the data in the Related Party Register on an annual basis.
Apetit Group’s internal service sales and purchases as well as Group companies’ loans and other financing arrangements are carried out and documented in accordance with the Limited Liability Companies Act, accounting and tax legislation and the Corporate Governance Code. The Company also takes care of the preparation of transfer pricing documentation if Apetit Group’s operations exceed the limits required for the preparation of transfer pricing documentation.
In decision-making concerning related party transactions to be decided by the Board of Directors, the provisions on disqualification must be taken into account so that a board member may not participate in the decision-making on a matter concerning themselves. A member of the Board is also disqualified from participating in decision-making on a transaction concerning their related parties when the transaction is not in the ordinary course of the Company’s business or is not carried out on normal commercial terms. There are exceptions to the shareholder’s disqualification in related party transactions in the Limited Liability Companies Act.
In accordance with the Corporate Governance Code, the principles governing related party transactions are set out in the annual Corporate Governance Statement. Individual related party transactions are announced in stock exchange releases, if required by regulations (e.g. AML 12.4.2019/511, Section 1a, Stock Exchange Rules).
Apetit Ruoka Oy develops, produces and markets frozen vegetables, potato products and ready meals. The company’s main market area is Finland. The company produces services in IT, financial and environmental administration for the Group companies.
The information technology unit produces IT services for the Group’s business units. The unit is responsible for the Group’s basic information technology and IT infrastructure and for the quality and cost-effectiveness of the IT services produced for the units. The ownership of the business operation systems lies with the business units themselves. In projects concerning these systems, the information technology unit provides support while changes are being made and provides technical and project expertise as well as back-up once a system has been introduced.
The financial administration unit is responsible for the Group’s cash management and payment services and for agreed tasks concerning the invoice processing and invoicing of the Group’s businesses.
The environmental administration is responsible for water issues, waste management and wastewater treatment in the Säkylä industrial area, advises and guides group companies on environmental issues and monitors the implementation of environmental goals.
Apetit Kasviöljy Oy develops, produces and markets vegetable oils, vegetable proteins and protein feeds. The merger procedure of the Finnish subsidiary with Apetit Kasviöljy is underway and the planned date for the merger is 31 December 2023.
Group Administration is responsible for financial management at the Group level and human resources.
The financial management unit is responsible for monthly reporting at the Group level and it produces the Financial Statements, the Annual Report and quarterly Interim Reports. The financial management unit is also responsible for financing and insurance at the Group level, stock exchange releases together with the Group communications, guidance on profit forecasting and the annual plan, monitoring the appropriate arrangement of internal control and risk management, and developing internal control and risk management.
The role of the human resources unit is to support line management and supervisors in achieving the strategic and operating goals by developing and managing the core processes of personnel administration.
Information on Apetit Plc’s corporate governance is regularly updated on the company’s web pages at apetit.fi/en/corporate-governance/ under Corporate Governance of Apetit Plc.
Approved by Board of Directors 21 December 2023.