Internal Control and Auditing

Updated: March 2nd, 2022.

INTERNAL CONTROL

Trainers’ House Plc’s Board of Directors is responsible for organizing internal control. The Board has the ultimate responsibility for the company’s vision, strategic objectives and the business objectives based on them. The Board is also responsible for supervising the company’s accounting practices and asset management, and for organizing operations appropriately. The Board approves the internal control guidelines applied to the entire Group. The CEO is responsible for implementing the strategy and any required investments, and for ensuring the legal compliance of the accounting practices and the reliable organisation of asset management. The CEO, with the assistance of the management team, is responsible for day-to-day business operations. The company’s executive management is responsible for internal control, auditors for external auditing and internal auditors appointed by the Board of Directors for internal auditing.

INTERNAL CONTROL PRACTICES AND PROCEDURES

It is the CEO’s duty to organize the accounting and control mechanisms in practice. The CEO supervises all decisions concerning executive personnel as well as important operational decisions. He also ensures that the Group’s subsidiaries act in the interest of the parent company and follow the Group’s strategy. The Group’s management team is responsible for business operations management and administrative supervision in the Group’s day-to-day operations.

INTERNAL CONTROL

The Group has defined authorizations for approving matters related to investments and employees.

INTERNAL AUDITING

Trainers’ House Plc does not have a separate internal audit function that would assess and test the company’s internal control procedures and processes. The company’s Board of Directors annually considers the establishment of an internal audit function or purchasing these services from an external source. In addition, the need for internal auditing is regularly discussed with the company’s auditors. In the opinion of the Board of Directors, the scale of the company’s operations has not, in the company’s current state, given reason for the establishment of an internal audit function. The key factors affecting this opinion are that the Group’s business is mainly operated from one location – the headquarters – and mainly in Finland.

INSIDERS

Trainers’ House Group complies with regulation (EU) No 596/2014 on preventing market abuse in financial markets and the Finnish Securities Markets Act, as well as related regulations and instructions issued by the European Securities Markets Authority, Finnish Financial Supervisory Authority and Nasdaq Helsinki Ltd. In addition, the Group revised its insider regulations in 2018.

After discussing matters with the CFO, the CEO evaluates whether a specific piece of information is considered inside information and also decides whether the company needs to publish this information immediately or whether the conditions are in place for postponing publication. The company documents all decisions concerning postponed publication of inside information along with the grounds for these decisions, and it complies with defined processes as required by applicable regulations.

The company maintains a list of insiders who have access to inside information. If the company’s employees or service providers have access to specific inside information, their names will be added to the project-specific section of the list of insiders. The CEO or CFO can decide to begin keeping a project-specific list of insiders. So far, the company has decided not to keep a permanent list of insiders. Every person included on a project-specific list is notified by email of their inclusion on the list, along with the related obligations and applicable penalties. When a person receives such notification and they are being added to the insider list for the first time, they must confirm receipt in writing. The CEO or CFO can decide to stop keeping a project-specific list of insiders. Every person included the list in question is notified by email that the project-specific insider list is no longer in force. If a person has inside information in their possession, they are always prohibited from entering into transactions. In addition, certain trading restrictions apply to some of the company’s management and employees, even if these parties do not have inside information in their possession. In addition, the company has defined the members of the Board of Directors of Trainers’ House Plc, the CEO, the Deputy CEO and the CFO as personnel holding management positions in accordance with the regulation on preventing market abuse in financial markets. Personnel holding management positions – the members of the Board of Directors and the Group’s management team – and their related parties must inform the company and the Finnish Financial Supervisory Authority of any transactions they enter into involving the company’s shares or debt instruments or related derivatives or other financial instruments. This duty of notification applies to all transactions taking place after a total of EUR 5,000 has been recorded in a calendar year (cumulative gross sum). When the company receives such a notification, it is obliged to publish the notification in a stock exchange release.