GeoSentric
Corporate Governance
Attendance of a prospective Board members in a General Meeting
Supervisory Board
Major Shareholders (December 31, 2007)
Committees
Redemption Clause
Shareholder Agreement
Auditors
Internal Audit
Applicable Laws And Regulations
Financial risk
Assets and liability risks
Data security risks
Financial risk
Exchange rate risk
Interest rate risk
Liquidity
Credit risks and other counterparty risks
Insiders
The Board of Directors is responsible for appropriately organizing the management and operations of the company and for other tasks and duties stipulated in the Companies Act and in the Articles of Association. In addition, it shall promote the interests of the company and its shareholders. The Board monitors the company’s financial performance by means of information provided by the management and by other information.
In accordance with the Articles of Association, the Board consists of a minimum of three and a maximum of nine members. The Board elects the Chairman from its ranks. The term of the Board of Directors ends at the close of the first Annual General Meeting following their election. In year 2007 the Board of Directors convened 20 times and attendance at the meetings was 100%. No salary or other fee is paid to the Chairman or the members of the Board.
The Board meets normally about once a month and whenever necessary. The Board of Directors shall hold the following regularly scheduled meetings each year:
- Meeting for adopting the Financial statements
At the meeting for adopting the financial statements of the previous financial period, held after the end of the financial period, the Board of Directors reviews and adopts the income statements and balance sheets of the group and the parent company, together with the Board Report .
- Organisation meeting
At its organizing meeting held soonest possible after the Annual General Meeting, the Board of Directors elects a chairman from amongst its number for a term lasting until the conclusion of the next Annual General Meeting.
- Meetings approving the Interim reports
The Board reviews and approves interim reports (1-3, 1-6 and 1-9) upon their completion and within two months from the end of the previous calendar quarter.
- Publication of financial results and the Annual General Meeting
At a meeting held before the conclusion of the present financial period, the Board of Directors confirms the dates on which financial statements and interim reports will be published in the next financial period. The Board calls the Annual General Meeting in accordance with the Articles of Association with an announcement published in one local and one national newspaper 17 days prior to the meeting at the latest. The Board may similarly call an extraordinary general meeting as needed.
Other matters that are part of the Board of Directors’ tasks are handled at meetings convened when needed. The Board of Directors applies Rules of Procedure, which stipulate for example the following issues:
-composition and constitution of the Board of Directors
-conduct and number of meeting
-information on the company to be regularly submitted to the Board
According Rules of Procedure the Board of Directors assesses its own activities and performance.
General Meeting of Shareholders
The shareholders’ General Meeting is the highest decision making body of a limited company where the shareholders exercise the decision power provided to them in the Companies’ Act. The most important annual tasks of the General Meeting include the adoption of the financial statements, discharging the Board and the CEO of liability, deciding about distribution of profits and election of the members of the Board and the auditors. Other tasks of the General Meeting are specified in the Articles of Association of the company and in the Finnish Companies’ Act. The company must call at least one annual General Meeting during each financial year on a date to be determined by the Board of Directors by the end of May. Extraordinary General Meetings are held as needed.
Advance information to shareholders
Before a General Meeting, sufficient information of the matters to be dealt with at the General Meeting shall be made available to the shareholders. The company provides advance information, including the agenda and principal contents of the eventual Board proposals, in the notice to convene the General meeting, and in other bulletins displayed on company’s Web pages. A notice to convene a General Meeting shall be published in one local newspaper published in the Salo region and in one national newspaper not earlier than two months prior to the last date for notification of attendance referred to Article of Association, section 13, and not later than seventeen days prior to the Meeting.
Organisation of the General Meeting
The General Meeting shall be organised as stipulated in the Finnish Companies’ Act in a manner promoting the possibilities of the shareholders to participate regarding the meeting time and the latest entry notification time. In accordance with the Article of Association, the General Meeting shall be held in Salo, Espoo, Helsinki or Halikko and they have mostly been held in Salo.
Attendance of Board members and the CEO in the General Meeting
The Company’s CEO, the Chairman of the Board and a maximum number of Board members make an effort to attend the General Meeting. The presence of the Board members and the CEO is necessary to facilitate the interaction between the shareholders and the management bodies of the company as well as to provide the shareholders’ an opportunity to pose questions. By exercising their right to present questions, the shareholders can attain more detailed information about matters that may impact on the evaluation of the financial statements, the financial position of the company or other matters to be dealt with by the General Meeting.
Attendance of a prospective Board members in a General Meeting
A person proposed for the first time as a Board member shall participate in the General Meeting that decides on his/her election unless there are well founded reasons for their absence. A person proposed for the first time as a Board member shall in principle participate in the General Meeting that decides on his/her election, in order to be introduced to the shareholders and to provide an opportunity to address any questions.
Supervisory Board
At the moment the company has no supervisory board.
Major Shareholders (December 31, 2007)
1. Nordea Pankki Suomi Oyj (hall.rek/custodian)
amount of shares 208 940 340 / 39,83%
2. Scandinaviska Enskilda Banken (hall.rek/custodian)
32 596 614 / 6,21%
3. Jonninen Henry
8 087 057 / 1,54%
4. Halyard Oy
4 126 444 / 0,79%
5. Svenska Handelsbanken AB (hall.rek/custodian)
3 877 098 / 0,74%
6. Uutela Keijo
2 564 114 / 0,49%
7. Nieminen Jorma Uolevi
2 494 807 / 0,48%
8. Vilen Arto
1 809 440 / 0,34%
9. Raimo Seppälä Holding Oy
1 325 000 / 0,25%
10. Finnvera Oyj
1 200 000 / 0,23%
11. Erkki Kiiveri
1 200 000 / 0,23%
Committees
Deviation from the Corporate Governance Recommendation 21-36 The Board of Directors considers the Company’s business not to be so extensive that committees would improve the work of the Board. Thus, Board of Directors has not set up an audit committee, nomination committee or compensation committee.
Redemption Clause
There are no K-shares in the Company, this redemption clause effectively is null and void.
Shareholder Agreement
At the moment the Company has no shareholder agreements.
Auditors
Authorised Public Accountants Ernst & Young as the Company’s Statutory Auditor, with Mr Erkka Talvinko, CPA as the responsible auditor. Mr. Veikko Soinio, CPA as the Deputy Auditor. The Extraordinary General Meeting on November 16, 2007 resolved, in accordance with proposal of the Board, to appoint also PriceWaterhouseCoopers as the Deputy Auditor of the Company.
Authorised Public Accountants Ernst & Young were paid approximately EUR 71,500 in auditing fees and for other consultation assignments in 2006.
Internal Audit
Deviation from the Corporate Governance Recommendation 51, GeoSentric does not have a separate internal audit function. The company’s internal control and risk management functions, which are organized according to the company’s risk management policy, are considered to be sufficient together with the audits carried out by the external auditor to ensure that GeoSentric’s financial reporting is correct and in compliance with all rules and regulations.
Applicable Laws And Regulations
GeoSentric Oyj is a Finnish public limited liability company. Its management and administration system complies with the Finnish Companies Act, other regulations concerning public companies in Finland and the Articles of Association of GeoSentric Oyj.
In addition, GeoSentric Oyj complies with the Guidelines for Insiders given by Helsinki Exchanges and the recommendation for management and control of public companies ("Corporate Governance Recommendation").
Risk Management
Risk management at GeoSentric Oyj is part of the company’s strategy and operational management. Risk management aims to systematically and comprehensively identify and create awareness of the risks to which the company’s operations, assets and personnel are exposed, and minimize any damage. There is no separate organization for risk management but GeoSentric Oyj aims to ensure proper risk management at all organization levels.
Assets and liability risks
GeoSentric aims to avoid damages through preventive risk management action. The company takes no risks that might endanger the safety of the personnel or that could damage the company’s brand and trademarks. GeoSentric has implemented insurance schemes to cover risks relating to property damage, business interruptions, transport and product liability.
Data security risks
GeoSentric Oyj has made secrecy agreements with the key personnel and the main cooperation partners. The company policy is also to maximize the data management security level.
Financial risk
The management of GeoSentric Oyj is responsible for the company’s liquidity, for sufficient financing, and for managing interest rate and foreign exchange risks.
Exchange rate risk
The company’s exchange rate risks arise from exports and imports. The main account currency is the euro which decreases exchange rate risks. The company also has invoicing in US dollars and that risk is minimazed with imports in dollars. GeoSentric Oyj doesn’t have any long-term foreign exchange commitments.
Interest rate risk
The company has no debt with variable interest rate. Changes in market interest rates and margins may have an impact on the company’s financing costs. The company hedges against interest rate risks through its choice of interest rate periods. The company’s Board of Directors decides on hedging activities.
Liquidity
The company maintains essential liquidity by using cash management tools. Surplus liquid funds are invested in non-risk targets.
Credit risks and other counterparty risks
The sales organization has specific credit policies which govern the terms for delivery and payment granted to customers, how these are monitored, and collection of payments.
Insiders
The company’s statutory list of insiders comprises the members of the Board of Directors, the President and CEO, the Vice President and the Auditor. Other permanent insiders are the members of the company’s management team and other persons nominated by the company.
GeoSentric Oyj’s insider register is maintained by the Finnish Central Securities Depository Ltd (APK). Up-to-date information on insiders’ holdings is shown below.
