The Board Committees

The proper function of the corporate governance of a company requires that Board work is organized as efficiently as possible. For this reason, the Company has established an Audit 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.

The Committee shall regularly report on its work to the Board. The reports shall include at least a summary of the matters, addresses and measures taken by the Committee.

The central duties and operating principles of the Audit Committee are described in the next chapter. The Annual General Meeting decides on the compensation of the members of the Board Committee and such compensations can be publicly viewed at www.bittium.com.

Audit Committee

The Audit 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 is 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 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 elected in the Annual General Meeting held on April 11, 2018 decided in its assembly meeting held on the same day to elect Mr. Juha Putkiranta (Chairman of the Committee) and Ms. Riitta Tiuraniemi as members of the Audit 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. The Board of Directors decided further in its same meeting to invite authorized public accountant Seppo Laine as external advisor of the Board of Directors.

In addition to Committee members, other regular participants to the committee meetings are CEO, CFO and CLO who acts as the Committee´s secretary and optionally external auditors. Further, the Committee members may meet the external auditors without the operative management being present in such meetings. In 2018, the Audit Committee convened six (6) times to ordinary meetings. The Committee has evaluated, prepared and reviewed, inter alia, the following subject matters during the financial period of January 1, 2018–December 31, 2018:

Financial Statements of 2017;
Half Year Financial Report of 2018;
Annual audit plan for 2018;
Observations based on auditing during the financial period;
Observation by the internal control;
Cash flow monitoring and evaluation of sufficiency of financing;
Budget target setting and budgeting process;
M&A related issues and their effects on the result, balance sheet and financing status of the Group;
Group legal structure related questions; and
Impairment testing of the subsidiary shares and goodwill.

During 2019 the Committee´s focus areas are:

Controlling the valuation processes of inventory; and
Review of the finance process, covering among other things offer calculating and agreement processes, cash flow, internal decision authorizations and compliance of the operations with instructions.