coRpoRate goveRnance Statement - Verkkokauppa.com · 2019-03-29 · •The proposals and, if the...

coRpoRate goveRnance Statement

VERKKOKAUPPA.COM · coRpoRate goveRnance Statement 56

Corporate governance statement

Verkkokauppa.comOyj(hereinafter,the“Company”or“Verkkokauppa.com”)isapublicFinnishlimitedliabilitycompany.ThesharesoftheCompanyaretradedontheFirstNorthHelsinkimarketplaceofNasdaqHelsinkiLtd.(“First North”).TheCompany’sgovernanceissubjecttoapplicableEUsecuritiesmarketlegislation(includingtheMarketAbuseRegulation),theFinnishCompaniesAct,theSecuritiesMarketAct,theAccountingAct,therulesofFirstNorthHelsinkiaswellastheCompany’sArticlesofAssociation.

As theCompany’s sharesarenot listedon themainlistofNasdaqHelsinkiLtd.theCompanyisnotsubjecttotheFinnishCorporateGovernanceCode2015 ratifiedby theSecuritiesMarketAssociation(the“CG Code”).However,totheextentpracticable,theCompanyseekstocomplywiththeCGCodeasapplicable.CompliancewiththeCGCodeisbasedonacomply-or-explainprinciple,wherebydeparturesfromtheCGCodeshallbeexplainedanddisclosed.TheCGCodeisavailableatthewebsiteoftheSecuritiesMarketAssociationwww.cgfinland.fi/en.

TheCompanycomplieswithalloftherecommen-dationsoftheCGCode.

TheCompany’sCorporateGovernanceStatement isavailableontheCompany’swebsite www.verkkokauppa.com/en/investors/governance.

group structure

TheparentcompanyofthegroupisVerkkokauppa.comOyj.Thedomicileof theCompany isHelsinki,Finland.Theparentcompanyisthemainoperatingcompany of the Verkokauppa.com group ofcompanies.TheCompanyhasasubsidiary,ArctechoOülocatedinEstonia.Thesubsidiaryisdormantandhasbeendormantforoverthepastseven(7)years.

TheCompanyhascommencedaliquidationprocedureforthedissolutionofArctechoOü.

TheCompany’sgovernanceisorganisedthroughtheGeneralMeeting,theBoardofDirectorsandtheChiefExecutiveOfficer.Further,theCompanyhasamanagement team and an extended management teamledbytheChiefExecutiveOfficer.

General Meeting

Thehighestdecision-makingpowerinVerkkokauppa.comisexercisedbytheCompany’sshareholdersatGeneralMeetings, inwhich the shareholdersmayexercisetheirrighttospeak,askquestionsandvote.TheAnnualGeneralMeetingisheldbytheendofJuneeachyearandithandlesthemattersthatfallunderitsauthorityaccordingtotheArticlesofAssociationaswellasanymattersproposedtoaGeneralMeeting.

ExtraordinaryGeneralMeetingsareconvenedbytheBoardofDirectorsifneededtohandlespecificmattersproposedtoaGeneralMeeting.Shareholdersholding aminimum of 10% of all shares and theCompany’s auditormay request thehandlingof aspecifiedmatter at aGeneralMeeting,which theBoardofDirectorsshallthenconvene.

Usually General Meetings handle themattersplaced on its agenda by the Board of Directors.AccordingtotheFinnishCompaniesAct,shareholdersmayalsorequesttheCompany’sBoardofDirectorstoplaceamatterontheagendaofthenextGeneralMeeting.TheCompanystateswellinadvanceonitswebsitethedatebywhichashareholdermustdeclarehisorherdemandsformatterstobedealtwithattheAnnualGeneralMeeting.Thedemandisdeemedto have arrived in sufficient time, if theBoardofDirectorshasbeennotifiedofthedemandfour(4)

weeksbeforethedeliveryofthenoticeoftheGeneralMeetingatthelatest.TheBoardofDirectorspreparesthe proposals to theGeneralMeeting relating tothecompositionoftheBoardofDirectorsandtheremunerationoftheBoardofDirectors.

Majormatters subject to the decision-makingpowerofaGeneralMeetinginclude:• amendmentstotheArticlesofAssociation;• increasesordecreasesinsharecapital;• issuanceofshares;• decisionsonthenumber,electionandremunerationofmembersoftheBoardofDirectors;• adoptionofthefinancialstatements;and• distributionofprofits/allocationoflosses.

Notice to the General MeetingTheshareholdersoftheCompanyaresummonedtotheGeneralMeetingbypublishingthenoticeontheCompany’swebsite.Thenoticeshallbepublishednotearlier thanthree (3)monthsbeforeandnot laterthannine(9)dayspriortotheGeneralMeetingrecorddate.Inaddition,theBoardofDirectorsmaypublishasummarynoticeoftheGeneralMeetinginone(1)ormorenationaldailynewspapers.ThenoticeshallstatethematterstobehandledattheGeneralMeetingandotherinformationrequiredinFinnishCompaniesActandCGCode.

The notice and theproposals of theBoardofDirectorstotheGeneralMeetingarealsopublishedbymeansofacompanyrelease.

The notice to the General Meeting and thefollowing information aremade available on theCompany swebsiteatleastthree(3)weeksbeforetheGeneralMeeting:• Theproposalsand,iftheGeneralMeetingistodealwiththefinancialstatements,thefinancialstate-

ments,theannualreportandtheauditor’sreport.Ataminimum,thisinformationshallfurtherbekeptavailableatthevenueoftheGeneralMeeting;• Thedocuments tobe submitted to theGeneralMeeting;and• DraftresolutionstotheGeneralMeeting.

Ifadecisionpertainstoashare issue, the issueofoptionrightsorotherspecialrightsentitlingtoshares,theincreaseofthesharecapitalfromreserves,thepaymentofdividend,thedistributionofreservesofunrestrictedequity,thedecreaseofthesharecapital,theacquisitionorredemptionofownshares,ortheCompanygoing into liquidation, and the financialstatementsarenottobedealtwithatthemeeting,thefollowing information ismadeavailableontheCompany swebsiteatleastthree(3)weeksbeforetheGeneralMeeting:• Thelatestfinancialstatements,annualreportandauditor’sreport;• Thepossibledecisionsonthedistributionofassets,made after the end of the preceding financialperiod;• Anyinterimreportspreparedasofadateaftertheendoftheprecedingfinancialperiod;and• AstatementbytheBoardofDirectorsontheeventsoccurringafterthelatestfinancialstatementsorinterimreportandhavinganessentialeffectonthestateoftheCompany

AttendanceShareholdersregisteredintheCompany’sshareholderregisterkeptbyEuroclearFinlandLtdontherecorddateoftheGeneralMeetinghavetherighttoattendtheGeneralMeetingandexercisetheirvotingrights.ShareholdersmayexercisetheirrightsattheGeneral


www.verkkokauppa.com/en/investors/governance

Meetingeither inpersonorthroughanauthorizedproxyrepresentative.

TheminutesoftheGeneralMeetingincludingthevotingresultsandanyappendicesthatarepartofadecisionmadebytheGeneralMeetingshallbepostedontheCompanywebsitewithintwo(2)weeksaftertheGeneralMeeting.ThedecisionsoftheGeneralMeetingarealsopublishedbymeansofacompanyreleaseimmediatelyaftertheGeneralMeeting.ThedocumentsrelatedtotheGeneralMeetingshallbeavailableontheCompany swebsiteatleastforfive(5)yearsaftertheGeneralMeeting.

Attendance of the members of the Board of Directors and the Chief Executive OfficerTheChiefExecutiveOfficer,thechairpersonandthemembersoftheBoardofDirectorsshallattendtheGeneralMeeting. In addition, the auditor shall bepresentattheAnnualGeneralMeeting.AcandidateproposedtobeelectedtotheBoardofDirectorsshallparticipateintheGeneralMeetingthatdecidesonhisorherelection.

Decision-makingThe Company has one (1) series of shares,whichentitleitsholderstoone(1)votepershareownedattheGeneralMeeting.MostresolutionsbytheGeneralMeetingrequireasimplemajorityofthevotescastatthemeeting.Inanelection,thepersonreceivingthehighestnumberofvotesshallbedeemedelected.TheGeneralMeetingmay,however,priortoanelection,decidethattobeelected,apersonshallreceivemorethanhalfofthevotescast.However,thereareseveralmatters,suchasdirectedshareissues,whichaccordingtotheFinnishCompaniesActrequirea2/3majorityofthevotescastandofthesharesrepresentedatthemeeting.

TheArticlesofAssociationofVerkkokauppa.comincludenoredemptionclausesorvotinglimitations.

Board of Directors

Composition and termUnder the Articles of Association, the Board ofDirectorsconsistsofatleastfour(4)andatmosteight(8) members.ThemembersoftheBoardofDirectorsareelectedby theAnnualGeneralMeetingof theshareholdersandthetermofofficeofthemembersoftheBoardofDirectorsexpiresattheendoftheAnnualGeneralMeetingfollowingtheirelection.

The Articles of Association set no limitationsregardingthenumberoftermsthatDirectorsmayserve, nor do they restrict in any other way thedecision-makingpowerof theGeneralMeeting inelectingmembersoftheBoardofDirectors.However,the General Meeting may take into account allrecommendationsstipulatedbytheCGCoderegardingthecompositionoftheBoardofDirectors,especiallywithregardstomeetingtheindependenceandotherrequirementsapplicabletopubliclyormultilaterallylistedcompanies inFinland.TheBoardofDirectorselectsoneofitsmembersasthechairpersonoftheBoardofDirectorsandmayelectadeputychairperson.

TheBoardofDirectorshavedrawnupawrittencharterforitswork.Theessentialcontentsofitareincludedinthefollowing.

Current composition of the Board of DirectorsTheBoardofDirectorsconsistsofthefollowingsix(6) memberselectedattheAnnualGeneralMeetingheldMarch21,2018foratermuntilthecloseofthenextAnnualGeneralMeeting:ChristofferHäggblom,Robert Burén,MikaelHagman, Kai Seikku, SamuliSeppäläandArjaTalma.AttheconstitutivemeetingoftheBoardofDirectors,convenedaftertheAnnualGeneralMeeting,ChristofferHäggblomwaselectedastheChairmanoftheBoardofDirectors.

Based on the evaluation of independence,theBoardofDirectors concluded thatChristoffer

Häggblom,RobertBurén,KaiSeikkuandArjaTalmaareindependentoftheCompany,andthatChristofferHäggblom,RobertBurén,MikaelHagman,KaiSeikkuandArjaTalmaare independentof theCompany’ssignificant shareholders.SamuliSeppälä isneitherindependent of the Company nor its significantshareholders.

Information reported on themembers of theBoardofDirectorscanbefoundonthespread“BoardofDirectors”.

Duties of the Board of Directors ThedutiesoftheCompany’sBoardofDirectorsaresetforthintheCompaniesActandotherapplicablelegislation.TheBoardofDirectorsisresponsibleforthemanagementoftheCompany.Itsresponsibilitiesinclude,interalia,to:• deliberateanddecideontheCompany’sstrategy;• confirmthebusinessplanandbudgetaswellasfinancingtransactions(asfarasnotfallingintotheresponsibilityoftheshareholders);• deliberateonandapprove interim reports and/or interimmanagement statements, theannualaccountsandthereportsbytheBoardofDirectors;

• confirm internal control and risk managementsystemsandreportingprocedures;• decideonpossiblebonusandincentiveschemesforthemanagementandpossiblegeneralorspecialpensionschemes,profitsharingschemesorbonusschemesforemployeesoftheCompany;• decideonanycontractswhich,giventhescopeandnatureofactivitiesoftheCompany,areofunusualnature,orsignificantimportancesuchaslong-termlease contracts;• follow-uponrelatedpartytransactions;and• appoint or dismiss the CEO. Other employeesbelonging to the management team of theCompanyareappointedbytheCEOandapprovedbytheBoardofDirectors.

Board CommitteesTheCompanyestablishedthreeboardcommitteesforthepreparationofboardmattersbeginningfrom2018.TheboardcommitteesareAuditCommittee,Nomination and Remuneration Committee andStrategyCommittee.TheBoardofDirectorselectsthemembersofthesecommitteesfromamongtheBoardmembersatitsconstitutivemeetingaftertheAnnualGeneralMeeting.TheBoardofDirectorshasconfirmedwrittenchartersforthecommittees.ThecommitteesreporttotheBoardofDirectors.

TheAuditCommitteeshallpreparethemonitoringandsupervisiondutiesoftheboardinmattersrelatedtotheCompany’s financial reporting,efficiencyofinternal control and audit and risk management functionand the independenceof theCompany’sauditor.UntiltheAnnualGeneralMeetingheldMarch21, 2018, the Audit Committee consisted of KaiSeikku(Chairman),ChristofferHäggblomandMinnaKurunsaari,whereafterithasconsistedofKaiSeikku(Chairman),ChristofferHäggblom,SamuliSeppäläandArjaTalma.ThemajorityofthemembersoftheAuditCommittee are independentof theCompany andtheCompany’ssignificantshareholders.Qualificationrequirements regarding the members of thecommitteehavebeentakenintoconsiderationwhenappointingthemembers.

TheNominationandRemunerationCommitteeshallensuretheefficientpreparationofnominationand remuneration matters in relation to board members,thechiefexecutiveofficerandtheotherseniormembersofexecutivemanagement.UntiltheAnnualGeneralMeetingheldMarch21,2018, theNominationandRemunerationCommitteeconsistedofChristofferHäggblom(Chairman),RobertBurénandKaiSeikku,whereafter,ithasconsistedofChristofferHäggblom(Chairman),KaiSeikkuandSamuliSeppälä.ThemajorityofthemembersoftheNominationandRemunerationCommitteeare independentof the


CompanyandtheCompany’ssignificantshareholders.TheStrategyCommittee shall assist theBoard

withmattersrelatingtothestrategyoftheCompany,including also strategic level considerations in relation totheCompany’sITissuesanditsretailoperations.The Strategy Committee has consisted of SamuliSeppälä (Chairman),ChristofferHäggblom,RobertBurénandMikaelHagman.

Participations in Board and Committee meetings 2018

TheBoardofDirectorsheld21meetingsduring2018.Theaverageratioofattendanceatthemeetingswas96%percent.

Verkkokauppa.comdoesnothaveasupervisoryboard.

Decision-makingMeetingsoftheBoardofDirectorsareconvenedbyitschairperson.TheBoardofDirectorsconstitutesa quorumwhenmore than half of themembersappointedbytheGeneralMeetingarepresentatthemeeting.Whenvotesarecast,themajorityopinionwillbetheBoardofDirectors’decisionand,inthecase

ofatie,thechairpersonwillhavethecastingvote.TheBoardofDirectors isalwaysobligedtoact

intheCompany’sinterestsandinsuchawaythatitsactsormeasuresarenotlikelytoproduceunjustifiedbenefittoanyshareholderorotherthirdpartyatthecostoftheCompanyoranothershareholder.

AmemberoftheBoardofDirectorsisdisqualifiedfrom participating in the handling of a matterpertainingtoacontractorothertransactionbetweenthe member of the Board of Directors and theCompanyorofsuchmatterwherethememberistoderiveanessentialbenefitandthatbenefitmaybecontrarytotheinterestsoftheCompany.Inprinciple,a

memberoftheBoardofDirectorsmaynotparticipateinthehandlingofamatterifthememberoftheBoardofDirectorsisinvolvedinthematterunderassessmentinanothercapacity.

Meeting practiceTheBoardofDirectorsshallconveneasfrequentlyasnecessarytodischargeitsresponsibilities.TheChiefExecutiveOfficerensuresthattheBoardofDirectorsisprovidedwithsufficientinformationtoassesstheoperationsandfinancialsituationoftheCompany.

ThesecretaryoftheBoardofDirectorswasJussiTallgrenuntilSeptember2018,afterwhichRobertTallbergheldtheposition.

TheBoardofDirectorsconductsannualperfor-manceself-evaluations,inadditiontobrieffeedbacksessionsfollowingeachphysicalmeeting.

Principles concerning the diversity of the Board of DirectorsTheCompanyhasdefinedtheprinciplesconcerningthediversityoftheBoardofDirectorsinaccordancewiththerecommendation9oftheCGCode.

ItisintheCompany’sanditsshareholders’interestthatthemembersoftheBoardofDirectorshaveabroadexpertisefromdifferentfieldsandbusinessareas.ThediversityoftheBoardofDirectorssupportstheCompany’sbusinessanditsdevelopment,opendiscussionandindependentdecision-making.

In the preparation of the proposal for thecomposition of the Board of Directors, therequirements placed by the Company’s strategy,operationsanddevelopmentphaseaswell as thesufficientdiversityoftheBoardofDirectorsaretakenintoaccount.ThediversityoftheBoardofDirectorsisexaminedfromdifferentperspectives.Importantfactors for the Company are the age and genderdistribution,academicandprofessionalbackgroundaswellasstrong,versatileandmutuallycomplementary

expertise,experienceandknowledgeinthedifferentbusinessareasimportanttotheCompany.

TheproposalregardingthecompositionoftheBoardofDirectors isbasedonthecompetenceofthecandidateandtheCompanyaimstoelectBoardmemberswhoseexperienceandprofilecorrespondwith the Company’s current and future businessneeds.TheBoardmembersareelectedannuallyattheAnnualGeneralMeetingoftheshareholders.

The Company’s goal is that both genders arerepresentedontheBoardofDirectorsandthat inthe long-termamorebalanced representationofbothgendersontheBoardisachieved.Asmeanstoachievethisobjective,theBoardofDirectorsseekstoincluderepresentativesofbothgendersintheBoardcandidatesearchandevaluationprocessandtoactivelycommunicatethisobjectivetotheshareholdersoftheCompany.

DuringthisaccountingperiodoneBoardmemberwasafemaleandtheremainingmembersweremale.TheCompany’sgoalconcerningtherepresentationofbothgendershasthusbeenfulfilled.

Name Board of Directors Audit Committee Nomination and Remuneration Committee Strategy Committee

Christoffer Häggblom 21/21(Chairman) 6/6 6/6(Chairman) 4/9

Robert Burén 21/21 - 1/1 3/9

Mikael Hagman 21/21 - - 2/9

Minna Kurunsaari1 5/5 1/1 - -

Panu Porkka1 5/5 - - -

Kai Seikku 17/21 6/6(Chairman) 6/6 -

Samuli Seppälä 21/21 4/5 5/5 9/9(Chairman)

Arja Talma2 15/16 5/5 - -

Henrik Weckström1 5/5 - - -

1)MemberoftheBoardofDirectorsuntilMarch21,20182)MemberoftheBoardofDirectorsfromMarch21,2018


Management team

Management team members during 2018

Name Position Time period

Panu Porkka CEO March22–December31,2018

Samuli Seppälä CEO January1–March21,2018

Timo Halonen1) ServicesDirector January1–April3,2018

Miika Heinonen LogisticsDirector January1–December31,2018

Esa Hjerppe1) WebSalesandMarketingDirector January1–April3,2018

Tommi Jylhä-Vuorio SalesDirector August6–September5,2018

Vesa Järveläinen PurchasingDirector January1–December31,2018

Seppo Niemelä MarketingandCommunicationsDirector August6–December31,2018

Markus Pätilä1) SalesDirector,retailstores January1–April3,2018

Jussi Tallgren CFO January1–December31,2018

Henrik Weckström CTO January1–December31,2018

1) MemberoftheextendedmanagementteamasofApril3,2018.

Inaddition,asofJanuary1,2019themanagementteam includesHRDirectorTaina Suorsa andasofFebruary25,2019ChiefSalesOfficerKalleKoutajoki.

The management team members handle theissuesthatconcernmanagingoftheCompanyintheirrespectiveareas andon thebasisof theguidanceprovidedbytheBoardofDirectors.ThemanagementteamassiststheChiefExecutiveOfficerinrunningtheCompany.ThemanagementteammemberspreparemattersthataretobeputbeforetheBoardofDirectorsfordecision-making,e.g. theCompany’sstrategies,budgetsandpoliciesaswellassignificantacquisitionsanddivestments.Inaddition,themanagementteamhandlesmatterspertainingtoreporting,internalandexternal communication, personnel development,hiringofemployeesandtheirtermsofemploymentaswellasinvestorrelations.Themanagementteamhasnoformalstatusundercompanylaw.

Information reported on themembers of themanagementteamandtheChiefExecutiveOfficercanbefoundonthespread“Management team”.

Chief Executive OfficerTheChiefExecutiveOfficerisresponsiblefortheday-to-daymanagementoftheCompanyinaccordancewith the instructions and guidance given by theBoardofDirectorsandensuringthattheaccountingpracticesoftheCompanycomplywiththelawandthatthefinancialmanagementoftheCompanyhasbeen arranged in a reliable manner.

TheChiefExecutiveOfficerprimarilypresentsthemattershandledinmeetingsoftheBoardofDirectorsand is responsible forpreparingdraft resolutions.TheBoardofDirectorselects theChiefExecutiveOfficer and decides on the remuneration of theChiefExecutiveOfficerandonothertermsoftheChiefExecutiveOfficercontract.TheChiefExecutiveOfficermaynotbeelectedchairpersonoftheBoardofDirectors,norbeamemberoftheNominationandRemunerationCommittee.

Remuneration

In accordance with the CG Code, the CompanyannuallypublishesitsRemunerationStatementontheCompany’swebsite.

Internal control and risk management

InternalcontrolisundertheresponsibilityoftheBoardofDirectors,anditsfunctionis,amongotherthings,toensuretheefficiencyandprofitabilityofoperations,thereliabilityofinformation,andtheadherencetorulesandregulations.Internalcontrolisapartofday-to-daymanagementandcompanyadministration.

Internal audits are an integral part of internalcontrol. TheBoardofDirectors is responsible fororganisingtheinternalaudit,andtheinternalauditservices are purchased from an external serviceprovider.TheinternalauditreportsitsobservationstotheAuditCommitteeandtheBoardofDirectors.The internal audit supports the management indirectingoperationsbyinspectingandevaluatingtheefficiencyofbusinessoperations,riskmanagementandinternalcontrol,andbyproducinginformationand recommendations to enhance efficiency. Theinternalauditalsoinspectstheprocessesofbusinessoperationsandfinancialreporting.Theoperationsoftheinternalauditarebasedonarisk-focusedapproachandthefocusareasofthebusinessoperationsanditsdevelopment.

Risk managementThe Company’s Board of Directors approved onJanuary16,2014ariskmanagementoperatingmodelfortheCompany.AccordingtotheCompany’s riskmanagementoperatingmodel,theobjectiveofriskmanagementistoraiseriskawarenessandenhanceproactive risk management in the organisation,increase the competitiveness of the organisation

by reducingnegative risks and increasingpositiverisks, ensure a sufficient level of risk management for thewhole organisation,manage risks as partofbusinessactivitiesanddefineresponsibilitiesofriskmanagementintheorganisation.TheBoardofDirectorsdecidesontheCompany’sriskmanagementpolicyanddefinestheframeworkforthelevelofriskmanagementintheCompany.TheAuditCommitteemonitorsandregularlyevaluatestheriskmanagementsystems. The Company’s operative managementis responsible for actualmeasures related to riskmanagementinaccordancewiththeCompany’sriskmanagementpolicy.

Main features of the internal control and risk management systems pertaining to the financial reporting processTheBoardofDirectorsandtheCEOhavetheoverallresponsibilityfororganisingtheinternalcontrolandriskmanagementsystemsforfinancialreporting.TheCompany’sChiefFinancialOfficerandtheFinanceandControlDepartmentareresponsibleforthefinancialreporting. The reporting is based on informationfromcommercialandadministrativeprocessesanddataproducedbythefinancialmanagementsystems.The Company’s Finance and Control Departmentdetermines the control measures applied to thefinancial reporting process, which include variousguidelines, process descriptions, reconciliations,andanalysesused for ensuring the validityof theinformationusedinthereportingandthevalidityofthereportingitself.

Thefinancialreportingresultsaremonitoredandanyanomaliesinrelationtoforecastsorincomparisonwith thepreviousyear’sfiguresareanalysedonaregularbasis.SuchanalysesareusedtodetectanyreportingerrorsandtoproducemateriallyaccurateinformationontheCompany’sfinances.


TheCompany’sFinanceandControlDepartmentisresponsiblefortheeffectivenessofinternalcontrol.TheFinanceandControlDepartmentisresponsiblefor assessments of the reporting processes. Theriskspertainingtofinancialreportingandtherelatedmanagementmeasuresaredeterminedaspartoftheriskmanagementprocess.

Disclosure

TheguidingprincipleofthecommunicationsoftheCompanyistocontinuouslyprovidethemarketwithconsistent, correct, relevant, and reliable information on the Company to ensure that capital marketparticipantshaveastransparentandclearapictureoftheCompanyaspossibleonthebasisofwhichtheycanassessthevalueoftheCompany’ssecurities.InitscommunicationtheCompanyadherestotheprinciplesoftheFinnishCompaniesActandSecuritiesMarketActofequalandsimultaneousaccesstoinformationandotherapplicableregulationandstrivestomakedisclosureswithoutunduedelay.

AccordingtotherulesofFirstNorth,companies,thesharesofwhicharesubjecttomultilateraltradingontheFirstNorthmarketplaceofNasdaqHelsinki,shallhaveenteredintoanagreementwithacertifiedadvisor.ThecertifiedadviserofVerkkokauppa.comisNordeaBankOyj(the“Certified Adviser”).

TheCompany’sofficialreporting languagesareFinnishandEnglish.Allpublished releases, annualreports,detailsofthecurrentBoardofDirectorsandmanagement teamand thenameof theCertifiedAdviser iskeptavailableontheCompany’swebsitewww.verkkokauppa.com.

TheBoardofDirectorshasadoptedadisclosurepolicyinaccordancewhichgovernsthedisclosuresofVerkkokauppa.com.

insider administration

TheCompanyobservestheinsiderguidelinesissuedbyNasdaqHelsinkiLtd.andwhichareapplicabletoCompanies,thesharesofwhicharetradedonFirstNorth.TheCompany’sinsiderpolicyapprovedbytheCompany’sBoardofDirectorscomplementsapplicableinsider regulation and sets out guidelines for theCompany’s insidersandthe insideradministration.Verkkokauppa.com’sinsiderpolicyisregularlyupdatedandcompliancetherewithmonitoredonanongoingbasis.TheCompanyhasappointedJussiTallgren,CFO,astheinsiderofficer.

TheMarketAbuseRegulation(MAR)enteredintoforceonJuly3,2016,withprovisionsontheCompany’sduty of disclosure, management of insider information, reportinganddisclosureofmanagement’sandtheirrelatedparties’transactionsandinsiderlists.

Under MAR, the duty of disclosure has beencoupledwiththeemergenceofinsiderinformation.AccordingtoMAR,thedisclosureofinsiderinformationcanbedelayedattheissuer’sriskiftheimmediatedisclosure would likely prejudice the legitimateinterestsoftheissuer,thedelayofdisclosureisnotlikelytomisleadthepublicandissuercanensurethatthe said informationwould stay confidential. TheCompanymustfileawrittennotificationonthedelaytoFinnishFinancialSupervisoryAuthorityimmediatelyafterthedisclosureoftheinformation.

SincetheentryintoforceofMAR,theCompanynolongerhasanobligationtokeepanup-to-datelistoftheownershipofthecurrentpublicinsiders.Forthetimebeing,theCompanyhasdeterminednottoestablishandmaintainalistofpermanentinsidersbutallpersonsinvolvedininsiderprojectswillbeincludedintheproject-specificinsiderlistsinstead.Inthefuture,theestablishmentofalistofpermanentinsidersoftheCompanywouldneedtobedeterminedbytheBoardofDirectors.

ThepersonsdischargingmanagerialresponsibilitiesintheCompanyandpersonscloselyassociatedwiththem shall notify their transactions in Company’sfinancialinstrumentstotheCompanyinaccordancewith the insider policy in two (2) business daysfrom the transaction and to the Finnish FinancialSupervisory Authority in three (3) business daysfrom the transaction. The Company must notifythetransactionswithacompanyreleaseinthree(3)businessdaysfromthetransaction.Inaddition,thepersonsdischargingmanagerialresponsibilitiesintheCompanymustnotifyinwritingthepersonscloselyassociatedwiththemontheemergenceofthedutyofnotification.

According to MAR, the closed period, duringwhich transactions in the Company’s financialinstrumentsareprohibited,is30calendardaysbeforetheannouncementoffinancialreportandtheyear-endreportoftheissuerandappliestothepersonsdischargingmanagerialresponsibilities.TheCompanyapplies the closed period after the end of eachcalendarquarteruntilthedayaftertheannouncementoftheCompany’sfinancialreportoryear-endreport(the“Closed Window”).TheClosedWindowshall,however, always includeat least30 calendardaysimmediately preceding the announcement of thefinancialreportortheyear-endreport,asthecasemaybe,andthedayofpublicationofsuchreport.Incertainspecialcasestheissuermayonacase-by-casebasisallowtransactionsduringtheClosedWindow.

audit

Themain function of the statutory auditing is toverify that the financial statements provide true,accurateandsufficientinformationontheCompany’sperformanceandfinancialpositionforthefinancialyear.TheCompany’sfinancialyeariscalendaryear.

The auditor´s responsibility is to audit thecorrectness of the Company’s accounting in therespectivefinancialyearandtoprovideanauditors’reporttotheGeneralMeeting.Inaddition,FinnishlawrequiresthattheauditoralsomonitorsthelawfulnessoftheCompany’sadministration.TheauditorreportstotheBoardofDirectorsat leastonceayearandquarterlytotheAuditCommittee.ThefeesreceivedbytheauditorshallbereportedtotheshareholdersoftheCompany.

According to the Articles of Association, theauditor of the Company shall be an AuthorizedPublicAccountantsfirmapprovedbythePatentandRegistrationOffice. The Annual GeneralMeetingelects the auditor and the term of an auditorterminatesattheendoftheAnnualGeneralMeetingfollowingtheelection.TheproposalfortheauditorbytheBoardofDirectorsshallbeincludedinthenoticeoftheGeneralMeeting.Theauditor’sfeesfor2018wereapproximatelyEUR113thousandandfeespaidto theauditor fornon-audit services in2018wereapproximatelyEUR23thousand.

PricewaterhouseCoopersOy,afirmofAuthorisedPublicAccountants,waselectedasauditorof theCompany on March 21, 2018 with Ylva Eriksson,AuthorisedPublicAccountant,beingtheauditor-in-charge.

Shareholders’ Agreements

The Company is not aware of any shareholders’agreementsregardingthesharesoftheCompany.


Remuneration Statement 2018

ThisRemunerationStatementbyVerkkokauppa.comOyj(the“Company”)hasbeenpreparedinaccordancewiththeFinnishCorporateGovernanceCode.

Decision-Making Procedure

Board of DirectorsThe General Meeting resolves annually on theremunerationpayabletotheBoardofDirectorsaswellasthebasisforitsdeterminationforBoardandcommitteework.TheNominationandRemunerationCommittee of the Board of Directors preparesthe proposals to theGeneralMeeting relating tothe composition of the Board of Directors andthe remuneration of the Board of Directors. Therecommendationshallbepresentedafterthelargestshareholders havebeengiven the opportunity topresentviewsonthecompositionoftheBoard.

Chief Executive Officer and Management TeamTheNominationandRemunerationCommitteeoftheBoardofDirectorspreparestheframeworkforremuneration of the Company’s Chief ExecutiveOfficer(the“CEO”)andthemanagementteamandtheBoardofDirectorsresolvesontheremunerationoftheCEO.ThechairpersonoftheBoardofDirectorsapprovestheremunerationandotherbenefitsofthemanagementteamoperatingundertheCEO.

Valid authorizations concerning remunerationTheAnnualGeneralMeetingtheCompanyheldonMarch21,2018authorizedtheBoardofDirectorstodecideontherepurchaseofamaximumof4506 513shares in one or more instalments, and furtherauthorized theBoardofDirectors to resolveonashareissueofeithernewsharesorownsharesheld

bytheCompanytoimplementprospectiveincentiveandremunerationschemes.During2018,theBoardofDirectorsrepurchasedatotalof82,500sharesandresolvedtoissueatotalof17,867sharesaspartoftheannualfeetomembersoftheBoardofDirectorsbasedontheaboveauthorizations.

main principles of Remuneration

Board of DirectorsThefeesofthemembersoftheBoardofDirectorsconsistofanannualfeepaidfortheBoardmembershipaswellasCommitteefeespaideitherasanannualfeeormeetingsfees.Thefeesalsovarydependingonthemember’sroleasaChairormemberoftheCommitteeandtheBoard.

InaccordancewiththeresolutionoftheAnnualGeneral Meeting held on March 21, 2018, theremunerationpayabletotheBoardofDirectorsisasfollows:•EUR70,000forthechairman;and•EUR35,000foreachmember.

HalfoftheannualfeeofthemembersoftheBoardofDirectors is intendedtobepaid insharesoftheCompanyaftereachquarterlyreleaseandtheremainingpartoftheannualfeeispaidincash,whichisusedtocovertaxesarisingfromthefees.ThesharesgivenasremunerationtoBoardmembersarenotsubjecttoanyownershiprestrictionsorlock-upprovisions.

TheannualfeespayabletothemembersofthecommitteesoftheBoardofDirectorsforthetermuntil the close of theAnnual GeneralMeeting ofShareholdersin2019arethefollowing:

•EUR 12,000 for the Chairman of the AuditCommittee•EUR6,000foreachmemberoftheAuditCommittee•EUR8,000fortheChairmanoftheNominationandRemunerationCommittee•EUR4,000foreachmemberoftheNominationandRemunerationCommittee.

NoannualfeeispaidfortheStrategyCommitteework,buttheChairmanoftheStrategyCommitteewillbepaidameeting feeofEUR3,000andeachmemberof theStrategyCommitteewillbepaidameetingfeeofEUR1,500foreachStrategyCommitteemeetingtheyattend.Thefeesofthecommitteesarepaidincash.

In addition, reasonable accrued travel and lodging expensesaswellasotherpotentialcostsrelatedtoBoardandCommitteeworkarecompensated.

Chief Executive Officer TheremunerationoftheCEOcomprisesafixedbasesalaryandfringebenefits(suchasrightsforcompanycarandphone), an incentivebonus related to theachievement of financial and operational targetsaswell asa share-based incentive scheme forkeyemployees(see“Short-termandlong-termincentives”below).ThetermsofdutyhavebeenagreeduponinwritingandtheCEOiselectedforatermcontinuinguntil further notice. According to the agreement,thenoticeperiodfortheCEOistwelve(12)months.The statutory pension age is applied to theCEO. A 12-month non-compete and non-recruitingobligationareappliedtotheCEO.TheCEOisentitledtoacompensationcorrespondingtohisbasesalaryforsix(6)months,ifheisdismissedbytheemployerwithoutbeinginbreachofcontract.Thiscompensation

correspondingtothe6-monthsalaryisnotpaidiftheCEOresignsonhisowninitiative.

TheCompanypaystheCEO’sstatutorypensioninsurance premiums. The CEOdoes not have anyadditionalpensionagreementswiththeCompanyandtherearenootheragreements,basedonwhichtheCEOwouldbeentitledtoanyadditionalbenefitsattheendofhisservicecontract.

Management TeamTheremunerationofthemanagementteamconsistsofabasesalaryandfringebenefits(suchasrightsforcompanycarandphone),anincentivebonusrelatedto the achievement of financial and operationaltargetsaswellashare-basedincentiveschemeforkeyemployees(see“Short-termandlong-termincentives”below).Thebasicsalarycanconsistofhourlywageormonthlywage.Certainmanagementteammembersareentitledtoadditionalpayinaccordancewiththecollective agreement for commercial sector (FIN:kaupanalantyöehtosopimus)forworkoutsidenormalworkinghours.

IftheemploymentrelationshipofamemberofthemanagementteamisterminatedforareasonnotattributabletotheCompany,anon-competeperiodofsix(6)monthsisobservedasarule.Thememberof themanagement team isentitled toamonthlycompensationforsuchperiod,correspondingtotheaveragemonthlysalarypaidfornormalworkinghours.

Themanagementteammembersdonothaveanyadditionalpensionagreementswith theCompanyandtherearenootheragreements,basedonwhichthemembersof themanagement teamwouldbeentitledtoanyadditionalbenefitsattheendoftheiremploymentrelationship.

VERKKOKAUPPA.COM · RemuneRation Statement 2018 62

Short-term and long-term incentivesThe variable salary component for the CEO andmanagementteamconsistsofashort-termincentiveprogramme as well as a share-based incentiveprogramme linked to the company’s long-termtargets.

The short-term incentives (“STI”) consistof anannualbonusprogrammewithperformancetargets.The Board of Directors decides annually on theperformancecriteriaandthedeterminationoftheSTIbasedon theproposalof theNominationandRemunerationCommittee.For2018,theperformancetargetswerebased50%onthe2018salestargetand50%onthe2018comparableEBITDAtarget.TheBoardmayalsoinitsabsolutediscretionresolveonseparateone-offcompensations(bonus)fromtimetotime.

OnMay16,2018theCompanyannouncedthattheBoardofDirectorsoftheCompanyhadresolvedto launcha share-based incentive scheme for keymanagementconsistingofamatchingshareplanforthreematchingperiods2018–2020,2019–2021and2020–2022 (“LTI”or “Matching Share Plan 2018–2020”).

Theaimoftheplanistoaligntheobjectivesoftheshareholdersandthekeyemployeesinordertoincreasethevalueofthecompanyinthelong-term,toencouragethekeyemployeestopersonallyinvestinthecompany’sshares,toretainthekeyemployeesatthecompany,andtoofferthemacompetitiveshare-basedrewardplan,whichisbasedontheacquisition,obtainingandaccumulationoftheCompany’sshares

In the Matching Share Plan 2018–2020, theparticipantreceivesafixedamountofmatchingsharesagainst an investment in Verkkokauppa.comOyj’sshares.TheMatchingSharePlan2018–2020includesthreematchingperiods,calendaryears2018–2020,2019–2021and2020–2022.TheBoardwill resolveannuallyonthecommencementanddetailsofeach

matchingperiod.TheprerequisiteforreceivingrewardonthebasisofthisplanisthatapersonparticipatingintheplanallocatesfreelytransferablecompanysharesheldbyhimorheroracquirescompanysharesuptothenumberdeterminedbytheBoardofDirectors.Futhermore,thepaymentofrewardisbasedontheparticipant’semploymentorserviceupontherewardpayment.

TherewardsfromtheMatchingSharePlan2018–2020will be paid partly in the company’s sharesandpartlyincashin2021,2022and2023.Thecashproportionisintendedtocovertaxesandtax-relatedcosts arising from the reward to the participant.Asa rule,no rewardwillbepaid, ifaparticipant’semployment or service ends before the rewardpayment.

Inthefirstmatchingperiod,whichcommenced2018, theparticipant receivesonematchingshareforeachallocatedshare,uptoasetamount,freeofchargeafterathree-yearvestingperiod,providedthattheotherconditionsstipulatedforthereceiptoftheshare-basedincentivebythetermsoftheplanarestillsatisfiedatthetime.Therewardstobepaidonthebasisofthematchingperiod2018–2020correspondto thevalueofanapproximatemaximumtotalof85,000Verkkokauppa.comOyjshares(includingalsotheproportiontobepaidincash).

Remuneration Report

Board of DirectorsTheremunerationpaidtotheBoardofDirectorsforBoardandCommitteeworkandothertasksduring2018wasasfollows:

Name PositionBoard and

Committee workOther benefits

from the CompanyNumber of shares

obtained as remuneration1)

Total (EUR)

ChristofferHäggblom Chairman 69,500 - 5,107 69,500

RobertBurén Member 29,250 - 2,552 29,250

MikaelHagman Member 27,750 19,2202) 2,552 46,970

KaiSeikku Member 42,250 - 2,552 42,250

SamuliSeppälä Member 54,250 5143) 2,552 54,764

ArjaTalma Member 32,250 - 2,552 32,250

total 255,250 19,734 17,867 274,984

1)ValueofsaidsharesincludedintheremunerationforBoardandCommitteework2)RemunerationasanadvisoroftheCompany.3)RemunerationasCEOoftheCompanyuntilMarch22,2018.

Chief Executive Officer and Management TeamFor the financial period 2018, the base salary oftheCompany’scurrentCEOPanuPorkkawasEUR317,347.83includingfringebenefitsasofMarch22,2018.Inaddition,duringthefinancialperiod2018,hereceivedashort-termincentivepayoutofEUR90,000.TheCEOandthemanagementteamiscoveredby

theCompany’sshort-termincentiveprogrammeandshare-based incentiveprogrammes.ThepayoutoftheincentivesunderthefirstmatchingperiodoftheMatchingSharePlan2018-2020occursin2021.

TheremunerationpaidtotheCEOandthemana-gementteamin2018isstatedinthefollowingtable:

Remuneration paid during 2018, EUR CEO Panu Porkka Other members of the management team (in aggregate)1)

Basicsalaryincludingfringebenefits 317,348 822,316

Incentive bonus 90,000 -

Long-termincentives - -

total 407,348 822,3161)MiikaHeinonen,VesaJärveläinen,SeppoNiemelä,JussiTallgrenandHenrikWeckström.FigureincludestheremunerationpaidtoTommiJylhä-VuorioaswellasTimoHalonen,EsaHjerppeandMarkusPätiläuntiltheestablishmentoftheExtendedManagementTeam.

ThetotalannualsalarywithfringebenefitsofthepreviousCEO,SamuliSeppälä,amountedtoEUR514.11untilMarch22,2018,andhedidnotreceivedanyotherbenefitsfromtheCompanyduring2018inrelationtothisposition.TheremunerationpaidtoSamuliSeppälä

forBoardandCommitteeworkispresentedaboveunder“RemunerationReport–BoardDirectors”.

TheBoardofDirectors’,CEO’sandthemanagementteam’s holdings of shares are presented in theCorporateGovernanceStatement2018.

VERKKOKAUPPA.COM · RemuneRation Statement 2018 63

Mikael Hagman

CEO and Board member,

Vitvaruexperten.comNordicAB

Born1968,DIHMDiplomainBusinessAdministration

Boardmembersince2014

Shares and share-based rights and corporations over which control is exercised

5,664shares

Positions of trust

ChairmanoftheBoard, MikaelHagmanAB ChairmanoftheBoard,GreasyLakeAB

Working experience

CEO,Media-SaturnHoldingSwedenAB,2008–2013

MemberofStrategyCommittee

Independent of significant shareholders

Kai Seikku

President and CEO,

OkmeticOyj

Executive Vice President

NationalSiliconIndustryGroup (Shanghai,China)

Born1965,M.Sc.(Econ.)



117,938shares

Positions of trust

MemberoftheBoardofDirectors, RobitOyj,2018– MemberoftheBoardofDirectors, InderesOy,2016–

Working experience

CEO,HKScanCorporation,2005–2009 CEO,Hasan&PartnersOy,1999–2004

ChairmanofAuditCommittee MemberofNominationand RemunerationCommittee

Independent of the Company and significant shareholders

arja talma

Board professional

Born1962,M.Sc.(Econ.),eMBA



2,552

Positions of trust

ChairmanoftheBoard,OnvestOy,2018– ChairmanoftheBoard,SerenaPropertiesAB,2016– MemberoftheBoardofDirectors,ChairmanoftheAuditCommittee,PostiGroupCorporation,2016– MemberoftheBoardofDirectors,ChairmanoftheAuditCommittee,MetsoCorporation,2016– MemberoftheBoardofDirectors,AktiaBankAbp,2013–,ChairmanoftheAuditCommittee2017–,ViceChairman oftheBoard2018–

Working experience

SeniorVicePresident,StoreSitesandInvestments, KeskoCorporation,2013–2015 PresidentandCEO,RautakeskoLtd,2011–2013 SeniorVicePresident,ChiefFinancialOfficer(CFO), KeskoCorporation,2005–2011 VicePresident,CorporateController,KeskoCorporation,2004–2005 ExecutiveVicePresident,OyRadiolinjaAb,2001–2003 Partner,APA,Auditor,KPMGWideriOyAb,1987–2001

MemberofAuditCommittee


Christoffer Häggblom

Managing Partner,

RiteInternetVenturesHoldingAB




5,107shares

Inaddition,ownershipthroughRiteInternetVentures HoldingAB,whichownsindirectly2,172,576sharesintotal.

Positions of trust

ChairmanoftheBoardofDirectors,QliroGroupAB,2018–,MemberoftheBoard(includingsubsidiaries),2017– MemberoftheBoardofDirectors,LemonsoftOy,2016– MemberoftheBoardofDirectors,AcervoAB,2013– MemberoftheBoardofDirectors,RiteInternet VenturesHoldingAB,(includingsubsidiaries),2007–

Working experience

FounderandManagingPartnerofRiteInternetVenturesHoldingAB,2007–

ChairmanofNominationandRemunerationCommittee MemberofAuditCommittee MemberofStrategyCommittee


Samuli Seppälä

Consultant

Born1975,Highschoolgraduate



22,285,048shares

Positions of trust

MemberoftheBoardofDirectors, F.SergejeffinOlut-tehdasOsakeyhtiö2014–

Working experience

Founder,CEOandPurchasingDirector,Verkkokauppa.comOyj,1992–2018

ChairmanofStrategyCommittee MemberofAuditCommittee MemberofNominationandRemunerationCommittee

Robert Buren

Consultant

Born1970,MScstudies,Computer ScienceandTechnology



8,552shares

Positions of trust

MemberoftheBoardofDirectors, QliroAB,2018– MemberoftheBoardofDirectors, GamingInnovationGroup,2018– MemberoftheBoardofDirectors, EatonGateGamingLtd,2016– MemberoftheBoardofDirectors, Bredband2iSkandinavienAB,2014– MemberoftheBoardofDirectors, CygniAB,2006–

Working experience

CIO,Bisnode,2016–2017 CIO,SBABBank,2015 CTO,Unibet,2011–2015

MemberofStrategyCommittee


Board of Directors

VERKKOKAUPPA.COM · BoaRD oF DiRectoRS 64

henrik weckström

CTO, Verkkokauppa.comOyj

Born1976,M.Sc.(Tech.)

Memberofthemanagement teamsince2008

Shares and share-based rights and corporations over which control is exercised10,824shares

Working experienceCIO,Verkkokauppa.comOyj,2000–2015

Vesa Järveläinen

Commercial Director, Verkkokauppa.comOyj

Born1983,Highschoolgraduate


Shares and share-based rights and corporations over which control is exercised10,000

Working experiencePurchasingDirector, Verkkokauppa.comOyj,2018 VicePurchasingDirector, Verkkokauppa.comOyj,2015–2017 PurchasingManager, Verkkokauppa.comOyj,2010–2015

miika heinonen

Logistics Director,Verkkokauppa.comOyj

Born1976,BBA


Shares and share-based rights and corporations over which control is exercised8,583

Working experienceWarehouseManager, Verkkokauppa.comOyj,2005–2011

panu porkka

CEO,Verkkokauppa.comOyj

Born1977,Studiesatcommerce



Working experienceCEO,Suomalainenkirjakauppa2017–2018 Salesdirector,Tokmanni,2013–2016

Jussi Tallgren

CFO, Verkkokauppa.comOyj




Working experienceCFO,VeikonKoneOy,2009–2012

Seppo Niemelä

Director of Marketing and CommunicationsVerkkokauppa.comOyj

Born1981,M.Sc.Engineering

Memberofthemanagementt eamsince2018


Working experienceHeadofmarketingandcampaign, LidlFinland2013–2018

Management team

VERKKOKAUPPA.COM · management team 65

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