The Board Committees
The proper function of the corporate governance of a company requires that Board work be organized as efficiently as possible. For this reason the Company established an Audit and Financial Committee.
The Directors on the committee can concentrate on the matters delegated to the committee more extensively than the entire Board of Directors. The purpose of the committee is to enhance the efficient preparation of matters within the competence of the Board, increase transparency and ensure the quality and efficiency of the decision-making of the Board.
The committee assists the Board by preparing matters falling within the competence of the Board. The Board remains responsible for the duties assigned to the committee. The committee has no autonomous decision-making power, and thus the Board makes the decisions within its competence collectively.
A committee shall regularly report on its work to the Board. The reports shall include at least a summary of the matters addressed and measures taken by the committee.
The central duties and operating principles of the Audit and Financial Committee are described below. The Annual General Meeting decides on the compensation of the members of the Board committee and such compensations can be publicly reviewed from the Company“s website at www.elektrobit.com.
The Audit and Financial Committee has the following duties:
• to monitor the reporting process of financial statements;
• to supervise the financial reporting process;
• to monitor the efficiency of the Company“s internal control, internal audit, if applicable, and risk management systems;
• to review the description of the main features of the internal control and risk management systems pertaining to the financial reporting process, which are included in the Company“s corporate governance statement;
• to monitor the statutory audit of the financial statements and consolidated financial statements;
• to evaluate the independence of the statutory auditor or audit firm and particularly the provision of related services; and
• to prepare the proposal for resolution on the election of the auditor.
The Chairman and the members of the Audit and Financial Committee are appointed by the Board of Directors of the Company. At least one committee member must be a financial expert who has significant knowledge and experience in accounting and accounting principles applicable to the Company. The Board of Directors decided in its assembly meeting held on April 11, 2013 to elect Staffan Simberg (Chairman of the Committee), Seppo Laine, Authorized Public Accountant and Erkki Veikkolainen as members of the Audit and Finance Committee. All members of the committee are independent from immediate interest of both the Company and its significant shareholders and they have long-term experience in business management.
In addition to committee members, other regular participants to the committee meetings are CEO and CFO of the Company and optionally external auditors. Further, the committee members may meet the external auditors without the operative management being present in such meetings.
In 2013, the Audit and Financial Committee convened 6 times to ordinary meetings. The Committee has evaluated, prepared and reviewed the following subject matters during the financial period of January 1, 2013 - December 31, 2013:
• Financial Statements of 2012;
• Interim Reports of 2013;
• Annual audit plan for 2013;
• Observations based on auditing during the financial period;
• Observations by the internal control;
• Cash flow monitoring and evaluation of sufficiency of financing;
• Budget target setting and budgeting process;
• Sale of Test Tools product business and its effects on the result, balance sheet and financing status of the Group;
• Group legal structure related questions;
• Tender process on auditing services for the Group in 2014;
• Repayment of capital to shareholders; and
• Impairment testing of the subsidiary shares and goodwill.
During 2014 the Committee“s focus areas are the further improvement of the division of work between the Group“s and the business segments“ financial administration and the resourcing and skills of the business segments, the improvement and assessment of financial processes of the rapidly grown e.solutions GmbH, a company jointly owned by EB and Audi Electronics Venture GmbH, the further improvement of financial reporting to serve the interests of the investors as well as the improvement of the management of different earning logics and modeling the related financial risks, which were already part of the focus areas in 2013.