74 Corporate governance report

Corporate governance report

The purpose of corporate governance is to ensure that the company is managed as effec- tively as possible in the interests of its shareholders, and that Cloetta complies with all applicable rules. Corporate governance is also aimed at creating order and establishing systems for both the Board and the Group Management Team. Well-defined structures, rules and processes allow the Board to ensure that the Group Management Team and employees focus on developing the business thereby creating shareholder value.

Cloetta AB (publ) is a Swedish public limited at 31 December 2018 was 288,619,299 of (the Swedish Official Gazette) and on the company, with corporate identification which 282,884,050 were class B shares and company’s website. At the same time, infor­ number 556308-8144. The company’s class 5,735,249 were class A shares. Each class B mation confirming that notification has taken B shares are traded on the Mid Cap list of share corresponds to one vote and each class place must be published in Dagens Industri. Nasdaq Stockholm. The company is domi­ A share to ten votes, although all shares carry Every shareholder has the right to request ciled in Ljungsbro, Linköping, and its head equal entitlement to the company’s assets that a matter be taken up at the AGM and office is in Stockholm. and profits. The number of shareholders at in such case must submit a written request 31 December 2018 was 23,956 (compared to to the Board. In order to be taken up at the 20,125 at 31 December 2017). On 31 Decem­ Framework for corporate AGM, the request must be submitted to the governance ber 2018 AB Malfors Promotor was Cloetta’s Board no later than seven weeks prior to the Cloetta’s corporate governance is regulated largest shareholder, with a holding corre­ AGM. In accordance with Chapter 7, 32 §, by external steering instruments that include sponding to 37.8 per cent of the votes and 26.7 of the Swedish Companies Act, at a general the Swedish Companies Act, the Swedish per cent of the share capital in the company. meeting of shareholders all shareholders have Annual Accounts Act, Nasdaq Stockholm’s For more information about Cloetta’s shares the right to pose questions to the company Rules for Issuers and the Swedish Corporate and shareholders, see section “Share and about the matters that are taken up at the Governance Code, as well as internal steering shareholders” on pages 56–61. meeting and the financial situation of the instruments such as the Articles of Associ­ company and the Group. ation, instructions, policies and guidelines. 2 General meeting The Swedish Corporate Governance Code is of shareholders Attendance at AGMs/EGMs available at www.bolagsstyrning.se, where a description of the Swedish model for cor­ Votes, % The general meeting of shareholders is 100 porate governance is also provided. During Cloetta’s highest decision-making body. At the year, Cloetta complied with Nasdaq a general meeting, all shareholders have the 80 Stockholm’s Rules for Issuers and good stock opportunity to exert an influence over the 69.4 63.9 market practice. company by exercising the votes attached to 59.6 59.4 60.0 their respective shareholdings. The powers 60 Application of the Swedish and duties of the general meeting are regu­ 158 199 275 203 237 Corporate Governance Code lated by the Swedish Companies Act and the 40 In 2018 Cloetta complied with the Code. Articles of Association, amongst others. Cloetta’s financial year runs from 1 Jan­ 20 uary to 31 December. The Annual General 1 Share and shareholders Meeting (AGM) must be held within a period 0 2014 2015 2016 2017 2018 of six months after the end of the financial The class B shares of Cloetta AB (publ) ● No. of people have been listed on Nasdaq Stockholm since year. The date and location of the AGM must (shareholders, proxies, assistants and guests) 16 February 2009 and have been traded on be communicated on the company’s website the Mid Cap list since 2 July 2012. However, no later than the date of publication of the 2018 AGM Cloetta was originally introduced on the third quarter report. Notice of the AGM must The most recent AGM was held on 16 April stock exchange in 1994 and has been listed be given no earlier than six weeks and no later 2018 in Stockholm. The AGM was attended in a number of different owner constel­ than four weeks prior to the AGM through by 237 individuals representing 60 per cent lations since then. The number of shares publication in “Post- och Inrikes Tidningar” of the votes in the company. The President

Cloetta ANNUAL AND SUSTAINABILITY REPORT 2018 Corporate governance report 75

Governance structure

1 Shareholders

Vote at the general meeting

Information General meeting Auditor3 2 of shareholders 7 Elects the auditor Appoints the nomi- Proposes the Board, auditor and nomi- nation committee nation committee ahead of next AGM

3 Nomination committee1

Elects the Board of Directors 5 Audit committee Board of Directors2 The members of the Board are appointed Information 4 by the AGM. Employee representatives and deputy representatives are appoint- ed by the employee organizations. The members of the audit and remuneration committees are appointed by the Board. 5 Remuneration committee

Goals, strategies, policies, steering instruments, core values, remuneration External steering instruments Reports, structure Important external steering instruments that provide 8 internal control the framework for corporate governance are: • The Swedish Companies Act • The Swedish Annual Accounts Act • Nasdaq Stockholm’s Rules for Issuers 1 The nomination committee prepares proposals • The Swedish Code of Corporate Governance for decision that are presented to the AGM. The AGM decides on principles for appointment of the 6 President and CEO Internal steering instruments nomination committee. Important binding internal control documents 2 The Board installs the committees and appoints include: their members. • The Articles of Association 3 The auditor is responsible, on behalf of the • The Board’s work plan shareholders, for auditing Cloetta’s annual report, • Instructions for the President and CEO, the audit accounts and the administration of the Board of The Group committee, the remuneration committee and Directors and the President and CEO. Reports to 6 Management Team financial reporting the Board of Directors and the shareholders. • Policies

and CEO, a majority of the Board members, Mikael Norman. Alan McLean Raleigh was • Re-election of KPMG AB as the company’s the company’s independent auditor, the elected as a new Board member. The AGM auditor to serve for the period until the end chairman of the nomination committee, and elected Lilian Fossum Biner as the Chair­ of the next AGM; the Group’s CFO and SVP Corporate Com­ man of the Board. Former Board member • Rules for the nomination committee; munications and Investor Relations were also Adriaan Nühn resigned in conjunction with present at the AGM. The AGM approved the the AGM. Aside from the members elected • Guidelines for remuneration of the Group proposals of the Board and the nomination by the AGM, the employee organizations Management Team; committee regarding: PTK and LIVS each appointed an employee representative and a deputy representative • The implementation of a share-based long- • Adoption of the balance sheet and the profit to the Board; term incentive plan. and loss account; • Board fees were set at SEK 620,000 for The complete minutes from the AGM can be • Appropriation of the earnings of the com­ the Board Chairman and SEK 285,000 for viewed at www.cloetta.com. pany through a dividend of SEK 0.75 per each of the other Board members elected share and an extra dividend of SEK 0.75 per by the AGM. Fees for work on the Board 2019 AGM share, in total SEK 1.50 per share; committees were set at SEK 100,000 for The 2019 AGM will be held on Monday, 4 each member of the audit committee, • Discharge from liability for the Board of April 2019, at 3:00 p.m. at Stockholm Water­ SEK 150,000 for the Chairman of the audit Directors and President and CEO; front Congress Centre, Nils Ericsons Plan 4, committee, SEK 100,000 for each member in Stockholm. The Notice of the Annual • That the number of Board members elected of the remuneration committee and General Meeting was published in February by the AGM shall be seven, with no deputies; SEK 150,000 for the Chairman of the remu­ 2019 and contained the Board’s proposals. neration committee; • Re-election of sitting Board members Lilian For more information, see section on “Annual Fossum Biner, Camilla Svenfelt, Mikael • Fees for the auditor are to be paid according General Meeting” on page 161 and Svenfelt, Lottie Knutson, Mikael Aru and to approved account; www.cloetta.com.

Cloetta ANNUAL AND SUSTAINABILITY REPORT 2018 76 Corporate governance report

3 Nomination committee Meetings of the nomination committee For information about the Board members’ During 2018, the nomination committee held assignments outside the Group and holdings Work of the nomination committee two meetings ahead of the 2019 AGM. of shares in Cloetta, see pages 84–85 and The task of the nomination committee is to No fees have been paid for the work of the cloetta.com. prepare recommendations to be put before committee. the AGM for decisions regarding election of Diversity policy Board members and the Board Chairman, 4 Board of Directors Through the nomination committee, Cloetta fees for the Board of Directors, potential applies rule 4.1 of the Swedish Corporate remuneration for committee work, election of Work of the Board Governance Code as its diversity policy to a chairman of the AGM, election of auditors, The primary task of the Board is to serve propose election of directors to the Board. auditing fees and rules for the nomination the interests of the company and the share­ According to this rule, the board composition committee. The Board Chairman presents an holders, appoint the President and CEO and must be set with regard to appropriateness annual evaluation of the Board’s performance ensure that the company complies with all to the company’s operations and phase of during the year to the nomination committee, applicable laws, the Articles of Association development, and must collectively exhibit which provides a basis for the nomination and the Swedish Corporate Governance diversity and breadth of competence, expe­ committee’s work together with the provi­ Code. The Board is also responsible for mak­ rience and background among the directors sions of the Swedish Corporate Governance ing sure that the Group is suitably structured elected by the Annual General Meeting. An Code and Cloetta’s own company-specific so that the Board can optimally exercise its equal balance between the genders is strived requirements. The nomination committee’s governance over the subsidiaries and that the for. The objective of the diversity policy is recommendations for election of Board company’s financial accounting, financial to underline the importance of appropriate members, Board fees and auditors are pre­ management and financial circumstances in diversity within the Board with regard to sented in the notice to attend the AGM and general can be controlled satisfactorily. At gender, age, nationality and experience, pro­ at www.cloetta.com. least once a year the Board shall meet with fessional background and business expertise. the company’s auditor without the presence The nomination committee has confirmed Composition of the nomination of the Group Management Team, and shall that the Board of Cloetta has an almost equal committee continuously and at least once a year evaluate gender balance and an appropriate composi­ In accordance with the decision of the AGM, the performance of the President and CEO. tion in general. Cloetta’s nomination committee shall consist of at least four and at most six members. Of Composition of the Board Independence of the Board these, one shall be a representative of the According to the Articles of Association, In accordance with the Swedish Corporate Board and three shall be members appointed Cloetta’s Board of Directors shall consist of at Governance Code, the majority of the Board by the three largest shareholders in terms of least three and at most ten members that are members elected by the AGM shall be inde­ voting power. The members appointed may elected annually at the AGM for a period until pendent in relation to the company and its themselves appoint one additional member. the next AGM has been held. The AGM on 16 Group Management Team and at least two April 2018 resolved that the Board shall have of these shall also be independent in relation Independence of the nomination seven members appointed by the AGM. On to the company’s major shareholders. Of the committee 16 April 2018, the AGM elected the following Board’s seven members, all are independent The majority of the nomination committee’s Board members to serve for the period until in relation to the company and its Group members shall be independent in relation the end of the next AGM, to be held on 4 April Management Team and five are independent to the company and its Group Management 2019: Lilian Fossum Biner (Chairman), in relation to the company’s major share­ Team, and at least one of these shall also be Lottie Knutson, Mikael Norman, Mikael Aru, holders. independent in relation to the company’s Mikael Svenfelt, Camilla Svenfelt and Alan largest shareholder in terms of voting power. McLean Raleigh. In addition, the employee The Board’s instructions and policies Of the appointed members, all four are in­ organization LIVS appointed one employee On a yearly basis, the Board reviews and dependent in relation to the company and its representative to the Board, Lena Grönedal, adopts a work plan for its own activities and Group Management Team and three are inde­ and one deputy representative, Shahram those of the Board’s audit and remuneration pendent in relation to the company’s largest Nikpour Badr. The employee organization committees. The Board also adopts in­ shareholder in terms of voting power. PTK appointed one employee represent­ structions for the President and CEO and ative to the Board, Mikael Ström, and one instructions for financial reporting. Among Shareholder proposals deputy representative, Christina Lönnborn. other things, these regulate the segregation All shareholders have the right to contact the All Board members have attended Nasdaq’s of duties between the Board of Directors, the nomination committee to propose candidates stock market training course for boards and Board Chairman, the President and CEO and for election to the Board. Proposals shall be management. The average age of the Board the auditor, quorum, conflict of interest, the sent to the chairman of the nomination com­ members elected by the AGM was 55 at year- work of the committees, internal and external mittee by e-mail to nominationcommittee@ end 2018, and three of the seven are women. reporting, routines for notice to attend cloetta.com. general meetings, Board meetings and minutes. In addition, the Board has issued Nomination committee ahead of the 2019 AGM and adopted a Code of Conduct and policies Share of votes at for corporate communications and IR, Member Appointed by Independent1 31 Dec. 2018, % finance, HR, insiders, insurance, internal

Olof Svenfelt, Chairman AB Malfors Promotor No 37.8% control, IT security, mergers and acquisi­ Isabelle De Gavoty Axa IM Yes 1.5% tions, fraud and whistleblowing, trade Johan Törnqvist Ulla Håkanson Yes 1.5% controls, anti-bribery and anti-corruption. Lilian Fossum Biner The Board of Cloetta AB Yes 0% 1) Independent from the company and its Group Management Team/from the company’s largest shareholder in terms of voting power

Cloetta ANNUAL AND SUSTAINABILITY REPORT 2018 Corporate governance report 77

measures that can be taken to improve the ef­ Instructions and policies ficiency of board work, and whether the Board Organization for has a well-balanced mix of competencies. The sustainability work evaluation provides valuable input for the nomination committee ahead of the AGM. In The Board reviews and adopts the following 2018, one of the board members has conduct­ instructions and policies on a yearly basis: The overall strategies for Cloetta’s corporate ed interviews on behalf of the Chairman with • Work plan for the Board responsibility work have been adopted by the • Instructions for the President and CEO all Board members, including the employee Group Management Team and are controlled • Instructions for financial reporting representatives. The results of the evaluation and monitored through business planning • Work plan and instructions for the audit have been reported to and discussed by both processes at several levels of the company. committee The ultimate responsibility for corporate • Work plan and instructions for the the Board and the nomination committee. responsibility matters lies with Cloetta’s remuneration committee President and CEO. • Code of Conduct Board meetings Cloetta’s sustainability work is overseen by • Corporate Communications and IR policy In 2018 the Board held nine scheduled the Corporate Responsibility Director, who • Finance policy functions as a spokesperson for issues related • HR policy meetings, of which one was a statutory to corporate responsibility and is responsible • Insider policy meeting. The President and CEO, the CFO for identifying prioritized areas, acting as the • Insurance policy and the Senior Vice President Corporate stakeholders’ link to the management teams • Policy for internal control Communications & IR, who is also the Board and supporting the implementation of Cloet- • IT security policy ta’s corporate responsibility strategy. Envi- • Mergers and acquisitions policy Secretary, take part in the Board’s meetings. ronmental and occupational health and safety • Fraud and whistleblower policy. Other members of the Group Management managers are in place at all of the factories. (Anonymous reporting of violation of laws, Team participate as needed as rapporteurs the Code of Conduct or other rules at Cloetta) for special items of business. • Anti-bribery and anti-corruption policy committee’s three members, all are inde­ • Trade control policy 5 Board committees pendent in relation to the company and its Group Management Team, and two are inde­ Audit committee pendent in relation to the company’s major In 2018 the Board audit committee consisted shareholders. The work of the audit commit­ Evaluation of Board performance of members Mikael Norman (chairman), tee is regulated by special instructions that The performance of the Board is evaluated Camilla Svenfelt and Mikael Aru. The have been adopted by the Board as part of its yearly in order to continuously improve the majority of the committee’s members shall be work plan. The audit committee is respon­ Board’s working methods and efficiency. The independent in relation to the company and sible for ensuring the quality of the financial Board Chairman is responsible for carrying its Group Management Team, and at least one reporting and the effectiveness of the com­ out the evaluation and presenting the results of these shall also be independent in relation pany’s internal control and risk management to the nomination committee. The purpose to the company’s major shareholders. At least regarding financial reporting. In brief, the of the evaluation is to gather the Board mem­ one member shall be independent and have audit committee, without affecting the other bers’ views on the Board’s performance, the accounting or auditing expertise. Of the audit tasks and responsibilities of the Board, shall

Board meetings in 2018 JANUARY Scheduled meeting; Year-end report, matters ahead of AGM, report from the auditor, incentive scheme, Sweden review, HR organization and strategy. DECEMBER Scheduled meeting; Budget/business plans for the coming year and bonus targets.

J DEC AN F V E O B OCTOBER N MARCH

Scheduled meeting; Interim report for the M Scheduled meeting; Annual Report, period January to September and Sweden T A notice to attend the AGM, refinancing. C review. R O

S APRIL

E R

P P Scheduled meeting; Statutory meeting: decision A on authorized signatories, adoption of instruc- SEPTEMBER tions and policies, election of the remuneration Scheduled meeting; Business strategy, A U Y committee and audit committee, appointment Brand and marketing review and International G A of a Board representative to the nomination M Market review. J committee, decision on dates and locations for UL JUN the upcoming scheduled Board meetings, the AGM and reporting dates. IT-security strategy. Scheduled meeting; Interim report for the period January to March and Supply Chain review. MAY JULY Scheduled meeting; Business strategy, pick & mix Scheduled meeting; Interim report for the period review and site visit to the Jelly Bean Factory in Dublin, January to June. Ireland.

Cloetta ANNUAL AND SUSTAINABILITY REPORT 2018 78 Corporate governance report

meet regularly with the company’s auditors neration committee shall meet at least twice and CEO regularly informs the Board and to remain informed about the focus and scope every financial year. In 2018 the committee Chairman about the financial position and of the audit. The company’s auditor shall be held six meetings. development of the company and the Group. invited to participate in the meetings of the Henri de Sauvage-Nolting has been President audit committee. The audit committee shall Board Chairman and CEO of Cloetta since 15 February 2017, meet at least four times every financial year. The Board Chairman shall be elected by the and in addition to the President and CEO, At least once a year, the committee shall meet general meeting of shareholders, and on the Group Management Team consisted of without the presence of any member of the 16 April 2018 the AGM elected Lilian Fossum the five regional presidents, the President Group Management Team. All meetings of Biner as the Chairman of the Board. The Operations (which includes purchasing and the audit committee are documented. The Chairman shall supervise the work of the production) and the five heads of the central audit committee shall inform the Board about Board and ensure that the Board discharges staff functions Finance/IT, Marketing, HR, the matters dealt with by the committee. In its duties, and has special responsibility for Corporate Communications & IR and Pick 2018 the committee held four meetings. ensuring that the work of the Board is well & mix. For information about the President organized and effectively executed and for and CEO and other members of the Group Remuneration committee monitoring the Group’s development. The Management Team, see pages 86–87. The remuneration committee shall have no Chairman oversees the effective implementa­ The Group Management Team conducts more than four members who are appointed tion of the Board’s decisions and is respon­ management meetings at regular intervals by the Board on a yearly basis. One of the sible for ensuring that the work of the Board and held nine meetings in 2018. The meetings members shall be the chairman of the com­ is evaluated yearly and that the nomination are focused on the Group’s strategic and mittee. The Board’s remuneration committee committee is informed about the results of operational development and financial per­ consists of members Mikael Svenfelt (chair­ this evaluation. formance. In addition to these meetings, the man), Lottie Knutson and Lilian Fossum members of the Group Management Team Biner. The majority of the committee’s mem­ 6 President and work in close daily cooperation regarding bers shall be independent in relation to the Group Management Team various matters. company and its Group Management Team. Of the remuneration committee’s members, The President and CEO is appointed by the 7 Auditor all are independent in relation to the company Board and supervises operations according to and its Group Management Team. The work the instructions adopted by the Board, and is The auditor is elected by the AGM for exami­ of the remuneration committee is regulated responsible for the day-to-day management nation of the company’s annual accounts and by special instructions that are adopted by of the company and the Group in accordance accounting records and the administration the Board as part of its work plan. The main with the Swedish Companies Act. In addition, of the Board of Directors and the President tasks of the remuneration committee are the President and CEO, together with the and CEO. The auditor’s reporting to the to prepare recommendations to the Board Chairman, decides which matters are to be shareholders takes place at the AGM through for decisions on remuneration principles, dealt with at Board meetings. The Board the presentation of the auditor’s report. The remuneration levels and other terms of em­ regularly evaluates the President and CEO’s AGM on 16 April 2018 re-elected the certified ployment for the Group Management Team, duties and performance. The President auditing firm KPMG AB as the company’s in­ to monitor and evaluate programmes for and CEO is responsible for ensuring that dependent auditor to serve during the period variable remuneration completed during the the Board members are supplied with the until the end of the next AGM. Authorized year and ongoing programmes for the Group necessary information and decision data Public Accountant Tomas Forslund is the Management Team as adopted by the AGM and presents reports and proposals at Board Auditor in Charge. and to monitor the current remuneration meetings regarding issues dealt with by the structures and levels in the Group. The remu­ Group Management Team. The President

Organization

President and CEO

Finance/IT HR

Corporate Communications & IR

Marketing Pick & mix

The Netherlands/ Operations Sweden Denmark/Norway Finland International/UK Germany

Cloetta ANNUAL AND SUSTAINABILITY REPORT 2018 Corporate governance report 79

financial information is regularly provided in 8 Financial reporting the form of: Press releases 2018 The Board of Directors is responsible for • Interim reports ensuring that the company’s organization is • The annual report structured in such a way that the company’s • Press releases about important news that financial circumstances can be controlled January is deemed to have a potential impact on the satisfactorily and that external financial • Katarina Tell appointed President Cloetta share price information, such as interim reports and Sweden annual reports to the market, is prepared in • Presentations for financial analysts, inves­ • Michiel Havermans appointed Senior Vice accordance with the legal requirements, rele­ tors and the media on the date of publication President Cloetta International of the year-end and interim reports vant accounting standards and other require­ • Interim report Q4, October – December ments applicable to listed companies. The • Meetings with financial analysts and 2017 tasks of the Board are to oversee the Group’s investors February financial development, assure the quality of • Proposal by the Nomination Committee the Group’s financial reporting and internal Awards for financial regarding the Board of Directors of control and regularly monitor and evaluate communication Cloetta AB operations. The task of the audit committee Web ranking by Comprend March is to support the Board in assuring the quality Cloetta was named the best website in • Annual report 2017 published of the company’s financial reporting. How­ Comprend’s Web ranking survey among the • Notice of the Annual General Meeting ever, the audit committee deals not only with 100 largest listed Swedish companies. the Group’s financial reports and significant • Oskari Vidman appointed Chief Pick & Mix Officer. accounting matters, but also matters related Listed Company of the Year to internal control, compliance, material In the autumn of 2018, for the fourth time, • Thomas Biesterfeldt appointed Chief uncertainty in reported values, events after Cloetta was the overall winner in the Listed Marketing Officer (CMO). the balance sheet date, changes in estimates Company of the Year. The annual Listed April and judgments and other conditions affecting Company of the Year competition, which • Annual General Meeting. the quality of the financial reports. is arranged by Kanton in association with • Interim report Q1, January – March 2018. The President and CEO ensures that the the head sponsor Aktiespararna and others, May financial accounting in the group companies is aimed at promoting exemplary financial • Frans Rydén appointed Chief Financial is carried out in compliance with legal communication among listed companies and Officer (CFO) requirements and that financial management consists of three sub-competitions in which June is conducted in a satisfactory manner. Cloetta the annual reports, interim reports and IR • Cloetta amendeds and extended current AB’s President and CEO is a member of the websites of all companies with a primary loan agreement and launched commercial boards of all operating subsidiaries. Every listing on Nasdaq Stockholm are reviewed. paper programme month, the Group prepares a closing of the July books that is submitted to the Board and the Additional information • Interim report Q2, April – June 2018 Group Management Team. For each upcom­ At www.cloetta.com, the following informa­ September ing financial year, a profit statement, balance tion can be found: The Articles of Associa­ • Cloetta awarded “Listed Company of the sheet and investment budget are prepared for tion, the Code of Conduct, information from Year” the Group and are adopted at the scheduled previous AGMs and corporate governance Nomination committee appointed ahead Board meeting in December. External reports from previous years. •  of 2019 Annual General Meeting of Cloetta AB (publ) October • Interim report Q3, July – September 2018

Cloetta ANNUAL AND SUSTAINABILITY REPORT 2018 80 Corporate governance report

Remuneration of the Group Management Team

Guidelines for remuneration of The short-term variable compensation structure is as follows:

Group Management Team Short-term variable compensation The current guidelines for remuneration as a percentage of base salary of Group Management Team were adopted Target level Maximum level by the AGM on 16 April 2018. The total remuneration shall be market-based and President and CEO 2018 50% 100% Other Group Management Team 2018, average 35% 70% competitive, and shall be proportionate to the individual’s responsibilities and powers. President and CEO 2017 50% 100% In addition to base salary, remuneration of Other Group Management Team 2017, average 35% 70% the President and CEO, other members of the Group Management Team and other execu­ tives reporting directly to the President and Share-based long-term Other benefits CEO can include: variable compensation Other benefits consists mainly of sign-on fees, Share-based long-term variable compensa­ severance pay and company car benefits. Short-term variable compensation tion consists of the share-based long-term Short-term variable compensation is linked incentive plans, which are resolved on yearly Pension benefits to specific business targets and is derived by the AGM. It is aimed at increasing value Pension benefits vary depending on the from the annual business plan approved by for the Group’s shareholders by promoting agreements and practices in the country the Board of Directors. The short-term and upholding the senior management’s where the individual is employed. Defined variable compensation is delivered through commitment to the Group’s development, and contribution plans are strived for, which a cash-based bonus programme. Short-term thereby aligning the interests of the share­ means that pension benefits most often con­ variable compensation is based on three holders with those of the Group Management sist of defined contribution plans for which operating targets: Team and other key employees in order to annual premiums are paid as a percentage of • Net sales growth ensure maximum long-term value creation. pension-qualifying salary up to the age of re­ • Operating profit The targets for share-based long-term varia­ tirement. In almost all cases, variable salary • Cash flow ble compensation are the compound annual and benefits are not pension-qualifying. The growth rate and operating profit. retirement age is not less than 60 years and not more than 67 years.

Total variable remuneration of the Group Management Team incl. the President and CEO Remuneration of the Group Management Team SEK Thousand % incl. the President and CEO 20,000 80 2018 Pension benefits 14% u t Base salary 56%

15,000 60 Other benefits 12% u Share-based long-term 10,000 40 variable compensation 2% u Short-term variable compensation 16% u 5,000 20

0 0 2014 2015 2016 2017 2018 nn Short-term and share-based long-term variable compensation Percentage of base salary

Cloetta ANNUAL AND SUSTAINABILITY REPORT 2018 Corporate governance report 81

The Board has the right to deviate from Share-based long-term incentive plan structures and remuneration levels in the these principles in individual cases where for senior executives company. Pursuant to paragraph 9.1, points there is special reason to do so. On 16 April 2018, the Annual General Meet­ 2 and 3, of the Swedish Code of Corporate ing approved the Board’s proposal for a share- Governance, the Board hereby presents the Termination benefits based long-term incentive plan, similar to following report on the results of the remu­ Upon termination of employment on the part previous years. The plan aligns the interests neration committee’s evaluation: of the company, the notice period shall be no of the shareholders with those of the Group The variable compensation that is pay­ longer than 12 months. Any termination ben­ Management Team and other key employees able according to the guidelines is linked to efits may not exceed one fixed annual salary. in order to ensure maximum long-term value both the individual’s responsibility for results Due to employment contracts entered into creation. and the Group’s profitability targets, which by Leaf prior to Cloetta’s acquisition of the A personal shareholding in Cloetta is contributes to value growth for the company’s company, there are contracts with members required for all participants. See page 60 and shareholders. of the Group Management Team granting Notes 25, 30 and 31 for more information Market surveys are conducted regularly termination benefits exceeding 12 monthly about share-based payment. with respect to salary statistics, remuner­ base salaries. ation structures and levels for variable The Board of Directors’ report on remuneration. In the opinion of the remu­ President and CEO the remuneration committee’s eval- neration committee, Cloetta’s remuneration The retirement age is 65 years. The pension uation of remuneration of the Group structures and remuneration levels have terms consist of a defined contribution plan Management Team allowed Cloetta to recruit and retain the right for which annual premiums are paid up to The Board of Directors has established a personnel to the Group Management Team. the age of retirement in an amount corre­ remuneration committee consisting of three Remuneration of the President and CEO sponding to 30 per cent of pension-qualifying members who prepare recommendations for for the financial year 2018 has been deter­ salary, consisting of base salary. Variable decision by the Board regarding remunera­ mined by the Board. Remuneration of other compensation and other benefits are not tion principles, remuneration levels and other members of the Group Management Team pension-qualifying. terms of employment for the Group Manage­ and of other senior executives has been The President and CEO has a notice ment Team. The recommendations have in­ determined by the President and CEO. Since period of six months. Upon termination on cluded the proportional distribution between the 2018 AGM, the remuneration commit­ the part of the company, the notice period is base salary and variable compensation and tee has met on five occasions. The proposed 12 months. the size of any salary increases. Furthermore, guidelines for remuneration of the Group the remuneration committee has discussed Management Team in 2019 that will be Remuneration in 2018 pension terms and termination benefits. presented by the Board to the AGM on 4 April In 2018, the total remuneration of the Group The remuneration committee is also en­ 2019 for approval, are identical to the current Management Team including the President trusted with the task of monitoring and evalu­ guidelines. and CEO amounted to SEK 57,198 thousand ating programmes for variable remuneration (42,877) including pension benefits, and of the Group Management Team, application SEK 49,326 thousand (35,920) excluding of the guidelines for remuneration adopted pension benefits. by the AGM and the current remuneration

Remuneration cost incurred for the Group Management Team

Short-term variable Share-based compensation incurred long-term 2018 Base in the year, expected to variable Other Pension SEK 000s salary be paid in the next year compensation benefits Sub-total benefits Total

Henri de Sauvage-Nolting, President and CEO 4,541 2,271 1,182 102 8,096 1,362 9,458 Other Group Management Team1 27,490 6,606 122 7,012 41,230 6,510 47,740 Total 32,031 8,877 1,304 7,114 49,326 7,872 57,198 Of which, in the Parent Company 11,210 3,231 –1,141 1,214 14,513 3,052 17,566

Short-term variable Share-based compensation incurred long-term 2017 Base in the year, expected to variable Other Pension SEK 000s salary be paid in the next year compensation benefits Sub-total benefits Total

Henri de Sauvage-Nolting, President and CEO2 3,886 – 704 69 4,659 1,113 5,772 Danko Maras, Interim President and CEO/CFO)3 378 – 143 41 562 114 676 Other Group Management Team4 22,322 – 3,825 4,552 30,699 5,730 36,429 Total 26,586 – 4,672 4,662 35,920 6,957 42,877 Of which, in the Parent Company 13,221 – 3,050 1,327 17,598 3,752 21,349

1) Other Group Management Team comprised 11 persons for the period 1 January 2018 to 28 February 2018, 12 persons for the period 1 March 2018 to 15 July 2018, 11 persons for the period 16 July 2018 to 14 August 2018, 10 persons for the period 15 August 2018 to 11 November 2018. From 12 November 2018 the other Group Management Team consisted of 11 persons. 2) Took up duties on 15 February 2017. 3) Took up duties as interim President and CEO from 1 September 2016 until 14 February 2017. 4) Other Group Management Team comprised 8 people for the period 1 January 2017 to 14 February 2017, 9 people for the period 15 February to 28 April 2017, 10 people for the period 29 April 2017 to 30 September 2017 and 11 people for the period 30 September 2017 to 29 November 2017. From 30 November 2017, the other Group Management Team consisted of 10 people.

Cloetta ANNUAL AND SUSTAINABILITY REPORT 2018 82 Corporate governance report Internal control over financial reporting

Cloetta’s internal control over financial re­ guidelines and principles built on Cloetta’s Central and local financial reporting porting is based on the framework published core values that govern financial reporting. risks are assessed with respect to account by the Committee of Sponsoring Organiza­ • The management’s conduct and working balance assertions such as existence, com­ tions of the Treadway Commission (COSO methods based on a clearly defined working pleteness, rights and obligations, valuation framework). The key objectives of Cloetta’s process described in documents such as: and allocation, presentation and disclosure internal control environment for financial - Rules of procedure for the Board of assertions and financial impact. The internal reporting are that it is appropriately struc­ Directors control environment is designed to mitigate tured and effective, provides reliable reports - Instructions for the President and CEO risks identified to a level considered accept­ and complies with any applicable laws and - Instructions for financial reporting able by management. regulations. - Finance policy Certain specific risks, for example risks The Board of Directors has defined pol­ - Rules of procedure for and instructions related to taxes and legal matters and other icies regarding processes, roles and respon­ to the audit committee financial risks, are reviewed proactively on sibilities that are vital for financial reporting • Rules for representations, commitments a periodic basis. Risks and risk management and the internal control environment of the and disbursements to third parties clearly are reported on separately in more detail in company. defined in the Group’s authorization frame­ the annual report, on pages 69–72. Tax, legal work and other financial risks are reflected based Roles and responsibilities • Processes for leading and developing em­ on management’s best estimate and judge­ The Board of Directors is responsible for es­ ployees in the organization and the atten­ ment, and in accordance with the applicable tablishing fundamental rules and guidelines tion dedicated to these matters by Cloetta’s accounting standards in the consolidated Board of Directors for internal control. The audit committee financial statements. assists the Board of Directors with its over­ sight of the performance of the company’s risk Financial reporting competencies management function and internal control The Group Management Team and local Fraud risk insofar as these affect the company’s quality management teams ensure that the company Cloetta’s Group Management Team, local and integrity of financial reporting. The has employees with the right competency in management teams and the central finance Board of Directors and the audit committee all key (financial) positions and that there are team are responsible for addressing the risk interact directly with the external auditors. procedures in place to ensure that employees of fraud and for carrying out a continuous Where the Board of Directors is respon­ in key (financial) positions have the requisite assessment of the risk for fraud with respect sible for establishing fundamental rules and knowledge and skills. to the prevailing attitudes, incentives and guidelines, the President and CEO is respon­ opportunities to commit fraud. The Board of sible for the design effectiveness, implementa­ Human Resources (HR) Directors issued a fraud and whistleblower tion and supervision of monitoring of the in­ The guidelines and processes for manage­ policy aimed at preventing dishonest and/or ternal control environment within the Group. ment of human resources play a fundamental fraudulent activity and to establish proce­ The CFO is responsible for the design and role in Cloetta’s system of internal control dures for reporting fraudulent activities to operating effectiveness of the internal control and help ensure the effectiveness of internal Cloetta’s management and/or audit commit­ environment within the Group. At a local control. Key processes include compensation tee. level, the design and operating effectiveness and benefits, HR development, recruitment, In addition to the fraud and whistle­ of the internal control environment is the allocation of resources, performance man­ blower policy, Cloetta has adopted an responsibility of each of the area Presidents agement and routines for feedback to the anti-bribery and anti-corruption policy. and local and regional finance teams. employees. The purpose of the policy is to prevent bribery and corruption by any employee or Control environment Risk assessment third party acting on behalf of Cloetta. The foundation for Cloetta’s internal control Central and local risk assessments are pre­ The trade control policy summarizes environment is the company’s corporate pared and monitored periodically. In these potentially applicable sanctions and export culture and behaviour, amongst others, which assessments the likelihood that risks could control rules, and compliance procedures are reflected in: occur and the potential impact they may have to be followed by all Cloetta employees. The • Performing our business with integrity and are assessed. Furthermore, the velocity purpose of this policy is to provide guidelines ethical values. Cloetta’s Code of Conduct, at which a risk could occur is considered. to ensure compliance with all local trade fraud and whistle blower policy, anti-bribery Business risks as well as financial reporting control laws and regulations including coun­ and anti-corruption policy and trade and other risks are considered in the risk tries through which shipments or financial control policy form the platform for a set of assessments. transactions flow.

Basis for risk assessment

Existence, reported Completeness, all trans- Rights and obligations, Valuation and allocation, Presentation and assets and liabilities exist actions during the reporting assets are the rights of all items in the financial re- disclosure, items in on the reporting date. period are recorded and the organization and the porting are reported in com- the financial reports reported. liabilities are its obligations pliance with IFRS valuation are properly described, as of a given date. principles and are correctly sorted and classified. calculated and summarized and appropriately recorded.

Cloetta ANNUAL AND SUSTAINABILITY REPORT 2018 Corporate governance report 83

Process for financial reporting

Monthly

Collection of information Controls Processing and consolidation Reporting Local units report monthly accord- The Group’s reporting system Any corrections are implemented in Reporting of operational and ing to an established timeframe contains embedded controls. In dialogue with the affected parties. financial information to the Board of in compliance with the applicable addition, the central finance team Reconciliation occurs. Directors and the Group Manage- laws, regulations and accounting carries out analytical controls as ment Team. practices and the Group’s account- well controls of completeness and ing manual. reasonability.

Quarterly

Audit committee External reporting The auditor attends every quarterly meeting. Possible actions are carried Cloetta publicly discloses its interim and year-end reports through press out in respect of the audit report. releases and publication on the company’s website.

Monitoring and improvement carried out by the Board of Directors, the Control activities Cloetta continuously strengthens its internal audit committee, the President and CEO, Control activities are the policies and control environment by evaluating the design the Group Management Team, the central procedures that help ensure that manage­ and operating effectiveness of the environ­ finance and treasury team and the Group’s ment’s directives are carried out and that ment. During the year, procedures are per­ various subsidiaries. Every month, financial the necessary actions are taken to address formed to verify the design and operating reports are reviewed against budget and risks that may hinder the achievement of the effectiveness in specific areas. These proce­ established targets, and the results of self- company’s objectives. Control activities oc­ dures are performed on a central and a assessments in the Group’s companies are cur throughout the organization, at all levels local level and are intended to address any reported. This review includes follow-up of and in all functions. They include a range of weaknesses or inefficiencies in the internal observations that are reported by Cloetta’s activities as diverse as approvals, authoriza­ control environment. Internal control auditor. tions, verifications, reconciliations, reviews of deficiencies detected through the ongoing The company’s financial situation is operating performance, security of assets and monitoring activities or separate evaluations discussed at each Board of Directors meeting. segregation of duties. are reported upstream and corrective actions The Board’s audit committee has important Control activities are embedded in are taken to ensure continuous improvement monitoring and control duties with regard to Cloetta’s business processes and play a key of the internal control environment. On a loans, investments, financial management, role in ensuring effective internal control in quarterly basis the follow up and status of any financial reporting and internal control. The the company. Local management is respon­ weaknesses identified by internal procedures audit committee and Board of Directors sible for having all required control activ­ or external audits are reported and discussed review and formally approve interim reports ities in place and maintained within their with the persons involved and members of and the annual report prior to publication. In organizations. The CFO is responsible for Cloetta’s Group Management Team. addition, the audit committee receives regu­ ensuring that control activities are designed lar reports from the independent auditor. and operating effectively and are maintained Reporting routines at the central level. The control environment An effective system for internal control Communication is based on a balanced mix of preventive and requires sufficient, up-to-date and reliable Internal communication detective controls and of automated and information both of a financial and non-finan­ Effective communication ensures the infor­ manual controls. In addition to a standard set cial nature. As far as possible, management mation flows in the organization. Separate of automated controls embedded in Cloetta’s reporting is directly linked to the financial communication channels are used to com­ central ERP system, local management reporting and to the consolidation tool. municate internally, based on what is most teams are encouraged to have as many Local management teams report their effective. automated controls as possible, especially financial results periodically and in ac­ for routine transactions. Nevertheless, there cordance with the Group’s accounting and External communication are also manual control activities in place to reporting policies. This reporting is the basis It is also important to maintain communica­ verify that the automated controls function as for Cloetta’s internal and external reporting tion about relevant policies with external par­ intended and for non-routine transactions. and serves as a basis for legal and business ties such as customers, suppliers, regulators Continuous reviews are performed by the reviews. The business reviews are carried and shareholders. Group Management Team and local manage­ out according to a structure in which sales, External communication is carried out in ment teams to safeguard proper and accurate earnings, cash flow and other key ratios accordance with legal requirements and the financial reporting. These reviews are and trends of importance to the Group are Corporate Communications and IR policy. incorporated into the business processes and compiled and form a basis for analysis and are an important part of Cloetta’s monitoring actions by the management and controllers Evaluation of the need for a controls. The local management teams are at different levels. Other important and separate internal audit function responsible for ensuring compliance with rel­ group-wide components of internal control There is currently no internal audit function evant laws and regulations in their respective and reporting routines include the annual at Cloetta. The Board of Directors has areas of responsibility. All identified financial business planning process and the monthly reviewed this matter and determined that the reporting risks are covered by one or more and quarterly forecasts. existing structures for monitoring and evalu­ control activities. To ensure the efficiency of internal ation provide a satisfactory basis for control. control over financial reporting, reviews are For certain special audit activities, external resources are used.

Cloetta ANNUAL AND SUSTAINABILITY REPORT 2018 84 Corporate governance report Board of Directors

Lilian Fossum Biner Mikael Aru Lottie Knutson Position: Chairman of the Board Position: Board member Position: Board member Member of the Remuneration Committee Member of the Audit Committee Member of the Remuneration Committee Elected: 2016 Elected: 2017 Elected: 2015 Born: 1962 Born: 1953 Born: 1964 Nationality: Swedish Nationality: Swedish Nationality: Swedish Education: B.Sc. Business Administration, M.Sc. Stockholm School of Journalism at Stockholm University, Education: Linköping University, Sweden. Education: Economics, Sweden. Sweden, Diplôme de Culture Francaise, Other assignments: Board Chairman of Paulig L’Université Paris IV, France. Other assignments: Board member of Nobia, Group Ltd, Fuchs Gewurze Gruppe AG, CCS LE Lundbergföretagen, a-connect and Givaudan. Healthcare Nordic AB and AB Axel Granlund. Other assignments: Member of the board of Previous assignments: VP and CFO of Axel Board member of Stenströms Skjortfabrik, Dr Per Stena Line, STS Alpresor, Swedavia and Scandic Johnson, Senior VP and HR Director at Electrolux. Håkanssons Stiftelse and Gorthon Stiftelsen. Hotels. Active as a writer and advisor in the areas Independence: Previous assignments: CEO of Procordia Food of leadership, change and crisis management and In relation to major shareholders: Yes Sweden, as well as leading positions at Kraft Foods tourism. In relation to the company and management: Yes and Nestlé. Previous assignments: Director of Communica- Shareholding Direct: 30,000 class B shares Independence: tions at Fritidsresor Group for the Nordic countries, Related parties: – In relation to major shareholders: Yes at SAS Group’s communications department, In relation to the company and management: Yes journalist at the Swedish newspaper Svenska Shareholding: Direct: 2,855 class B shares Dagbladet and communications consultant at JKL Related parties: – and others. Independence: In relation to major shareholders: Yes In relation to the company and management: Yes Shareholding: Direct: 1,200 class B shares Related parties: –

Alan McLean Raleigh Mikael Norman Camilla Svenfelt Position: Board member Position: Board member Board member Elected: 2018 Chairman of the Audit Committee Member of the Audit Committee Born: 1959 Elected: 2015 Elected: 2016 Nationality: British Born: 1958 Born: 1981 Education: B.Sc. (Hons) Production Engineering Nationality: Swedish Nationality: Swedish and Production Management, University of Education: Bachelor of Laws, Stockholm Education: B.A. Stockholm University, Sweden. Strathclyde, Scotland. University, Sweden. Other assignments: Board member of AB Malfors Other assignments: Board Chairman of Other assignments: Member of the Board of Promotor and a deputy board member of the Robinson plc. Byggmax Group AB, Bravida Holding AB, Bonava Hjalmar Svenfelt Foundation. Accountant at AB Previous assignments: Executive Vice President, AB and Swedavia AB. Chairman of the audit com- Malfors Promotor. Personal Care Supply Chain, Unilever. mittee of Byggmax Group AB, Bravida Holding AB, Previous assignments: – Independence: Bonava AB and Swedavia AB. Independence: In relation to major shareholders: Yes Previous assignments: CFO at Nobia, Group In relation to major shareholders: No In relation to the company and management: Yes Controller at Electrolux, Tax lawyer at Price Water- In relation to the company and management: Yes house and judge at the Administrative Court and Shareholding: Direct: – Direct: 60 class A shares and Administrative Court of Appeal in Stockholm. Shareholding: Related parties: – 466,485 class B shares Independence: Related parties: 55,095 class B In relation to major shareholders: Yes shares In relation to the company and management: Yes Shareholding: Direct: 5,000 class B shares Related parties: –

Cloetta ANNUAL AND SUSTAINABILITY REPORT 2018 Corporate governance report 85

Mikael Svenfelt Lena Grönedal Mikael Ström Position: Board member Position: Employee board member, LIVS Employee board member, PTK Ledarna Chairman of the Remuneration Committee Elected: 2008 Elected: 2016 Elected: 2008 Born: 1962 Born: 1961 Born: 1966 Nationality: Swedish Nationality: Swedish Nationality: Swedish Position at Cloetta: Factory Operative, Cloetta Position at Cloetta: Department Manager, Education: Marketing and Business Economics, Sverige AB Cloetta Sverige AB Tibbleskolan and Law studies, Folkuniversitetet, Shareholding: Direct: – Shareholding: Direct: 32,243 class B shares Sweden. Related parties: – Related parties: – Other assignments: CEO and Board member of AB Malfors Promotor. Previous assignments: Senior positions in Nicator group, Dell Financial Services, GE Capital Equipment Finance AB and Rollox AB. Board Chairman of Fjärilshuset Haga Trädgård AB. Board member of Fjärilshuset Haga Trädgård Café AB. Independence In relation to major shareholders: No In relation to the company and management: Yes Shareholding: Direct: 25 class A shares and 42,535 class B shares Related parties: 5,729,569 class A shares and 72,315,235 class B shares

Shahram Nikpour Badr Christina Lönnborn Deputy employee board member, LIVS. Deputy employee board member, PTK Unionen Elected: 2013 Elected: 2016 Born: 1963 Born: 1962 Nationality: Swedish Nationality: Swedish Position at Cloetta: Factory Operative, Position at Cloetta: Business developer, Cloetta Sverige AB Cloetta Sverige AB Shareholding: Direct: – Shareholding: Direct: – Related parties: – Related parties: –

Composition of the Board

Fees2 Attendance4 Year Board Audit Remuneration Elected by the AGM1 Nationality elected Born in Board fees Committee fees Independent3 meetings committee committee

Chairman Lilian Fossum Biner Swedish 2016 1962 620,000 100,000 Yes/Yes 9/9 5/5 Member Camilla Svenfelt Swedish 2016 1981 285,000 100,000 Yes/No 9/9 5/5 Mikael Aru Swedish 2017 1953 285,000 100,000 Yes/Yes 9/9 5/5 Lottie Knutson Swedish 2015 1964 285,000 100,000 Yes/Yes 9/9 5/5 Mikael Norman Swedish 2015 1958 285,000 150,000 Yes/Yes 9/9 5/5 Alan McLean Raleigh British 2018 1959 285,000 – Yes/Yes 9/9 Mikael Svenfelt Swedish 2008 1966 285,000 150,000 Yes/No 9/9 5/5 1) Education and other assignments are shown on pages 84–85. 2) The fees refer to set amounts during the period from the AGM on 16 April 2018 until the AGM on 4 April 2019. Board fees shall be paid in the amount of SEK 620,000 to the Board Chairman and SEK 285,000 to each other board member elected by the AGM. Fees for committee work will be paid in the amount of SEK 100,000 to members of the audit committee (unchanged) and in the amount of 150,000 to the chair of the audit committee (previously SEK 100,000), and members of the remuneration committee shall receive SEK 100,000 (unchanged). For further details, see Note 6. 3) Independent in relation to the company and its Group Management Team/in relation to the largest shareholder. 4) Attendance refers to meetings during the period from the statutory meeting following the AGM on 16 April 2018 until the publication of this annual report in March 2019. Shareholding stated as at 31 January 2019

Cloetta ANNUAL AND SUSTAINABILITY REPORT 2018 86 Corporate governance report Group Management Team

Henri de Sauvage-Nolting Frans Rydén Jacob Broberg President and CEO Position: Chief Financial Officer (CFO) Position: Senior Vice President Corporate since 15 February 2017. since 12 November 2018. Communications and Investor Relations Employed by Cloetta since 15 February 2017. Employed by Cloetta since 12 November 2018. since 16 February 2012. Employed by LEAF Born: 1962 Born: 1972 since 2010. Nationality: Dutch Nationality: Swedish Born: 1964 Education: M.Sc., Chemistry, Amsterdam Univer- Education: B.Sc. Business Administration, Nationality: Swedish sity, the Netherlands. M.Sc., Chemical Engineering, Stockholm University, Master of Laws, Stockholm Education: B.A., Political Science and Economics, Technical University of Twente, the Netherlands. University. Lund University, Sweden. Post Doc in Business Administration, University of Other assignments: – Other assignments: – Leuven, Belgium. Previous assignments/positions: Various Previous positions: SVP Corporate Communica- Other assignments: Board member of Agra finance positions at Mondelez including Chief tions at LEAF, 2010–2012, Vice President Corporate Industrier, Norway Financial Officer for India, CFO for Indonesia, Communications at TeliaSonera, 2008–2010, Senior Previous positions: Executive Vice President of Finance Director Asia-Pacific, Regional Manager Vice President Corporate Affairs and Communi- Arla in Sweden, Denmark and Finland. Between Financial Planning and Analysis, and Area Manager cation at V&S Vin & Sprit AB, 2005–2008, Vice 1989 and 2013 held positions in sales, marketing Internal controls. Recently Vice President Finance President Media Relations at Electrolux, 2001–2005, and production at Unilever in the Nordics, the at Arla Foods. and Vice President Corporate Communications at Netherlands, UK and China. Last position at Shareholding: Direct: 12,909 B shares Länsförsäkringar, 2000–2001. Various positions, Unilever was as CEO of the Nordics. Related parties: – including Head of Media Relations and Information Shareholding: Direct: 55,058 class B shares for Moderata Samlingspartiet, 1989–2000. Related parties: – Shareholding: Direct: 84,159 class B shares Related parties: –

Regina Ekström Thomas Biesterfeldt Ewald Frenay Position: Senior Vice President Human Resources Position: Chief Marketing Officer (CMO) Position: Pesident Cloetta Middle Region since 1 January 2015. since 1 May, 2018. since 16 February 2012. Employed by LEAF since 2004. Employed by Cloetta since 1 May 2018. Employed by LEAF since 2000. Born: 1963 Born: 1980 Born: 1963 Nationality: Swedish Nationality: German Nationality: Dutch Education: B.Sc. Business Administration and Education: MBA (Major Marketing) at Hamburg Education: M.Sc. Economics, Erasmus University Economics, Lund University, Sweden. University of Applied Sciences. Rotterdam, the Netherlands. Other assignments: – Other assignments: – Other assignments: – Previous positions: SVP Human Resources Previous positions: Marketing Director at L´Oreal Previous assignments/positions: Interim Scandinavia at Cloetta/LEAF, 2004–2014, SVP Paris in the Nordics (based in Denmark). Prior President Cloetta Italy 2016–2017. Various Human Resources Nordic at Findus, 2000– Marketing and Group product manager at L´Oreal positions at Leaf 2000-2012 including President 2004, HR Manager Sweden/Nordic at Nestlé , Paris in Germany and Sweden. Middle at Leaf and Chief Marketing Officer. 1995–2000, Trainee, Product Manager, Human Shareholding: Direct: 6,414 class B shares Member of Leaf Executive Committee, 2008–2012. Resources Manager, Marketing Manager at Mars Related parties: – 2008–2012 Vice President Segment Confection- Sweden and UK, 1987–1995. ery, 2004 –2005, Marketing Director of RBV Leaf Shareholding: Direct: 35,472 class B shares The Netherlands 2000 –2004. Several marketing Related parties: – and sales positions at Mars Inc. Shareholding: Direct: 25,019 class B shares Related parties: –

Cloetta ANNUAL AND SUSTAINABILITY REPORT 2018 Corporate governance report 87

Michiel Havermans Marcel Mensink Christian Boas Linde Position: Senior Vice President Cloetta Position: President Operations Position: President Cloetta Denmark and Norway International since 1 March 2018. since 1 October 2017. since 1 January 2018. Employed by Cloetta since 1 March 2018. Employed by Cloetta since 2017. Employed by Cloetta since 2013. Born: 1973 Born: 1971 Born: 1968 Nationality: Dutch Nationality: Dutch Nationality: Danish Education: M.Sc. Economics, Erasmus University, Education: MBA University of Canterbury United Education: M.Sc. Economics, University of Aarhus, Rotterdam. Kingdom, B.Sc. Food Technology van Hall Institute, Denmark. the Netherlands. Other assignments: – Other assignments: Board member of Crispy Other assignments: – Foods International A/S, Nakskov Mills Foods A/S Previous positions: Regional Director sales and Previous positions: Supply Director, Mars Supply and Anne Linde ApS. marketing for Europe, Middle East and Americas Petcare Europe. Several leading positions at Mars at United Dutch Breweries (UDB). Export Director, in various business units, including Petcare, Food Previous assignments/positions: Country Country Manager UK and Managing Director and Chocolate. Supply Director Mars Care & Treats Director for Mars Danmark A/S, 2008–2013, Vietnam and the Philippines at Perfetti van Melle. Europe. Plant director Mars Food UK, several various commercial positions in PepsiCo, Shareholding: Direct: 5,477 class B shares different operational roles at Mars Chocolate. 2002–2008, HJ Heinz UK, 1999–2002, and Arla Related parties: – Shareholding: Direct: 10,738 class B shares Foods, 1993–1996. Related parties: – Shareholding: Direct: 5,550 class B shares Related parties: –

Ville Perho Katarina Tell Oskari Vidman Position: President Cloetta Finland Position: President Cloetta Sweden, Position: Chief Pick & Mix Officer since 20 July 2015. since 1 July 2018. since 1 April 2018. Employed by LEAF since 2004. Employed by Cloetta since 28 May, 2018. Employed by Cloetta since 2015. Born: 1979 Born: 1970 Born: 1976 Nationality: Finnish Nationality: Swedish Nationality: Finnish Education: M.Sc. Turku School of Economics, Education: Bachelor in Marketing and Adminis- Education: Masters in Marketing and Economics, Finland. tration, Lund University, Masters in Food Nutrition, University of Vasa, Finland. Other assignments: Co-owner and Board Umeå University. – member of Varastoaura Oy. Other assignments: Other assignments: Board member of Previous positions: Sales Director Cloetta Finland Previous positions: Sales Director Cloetta Livsmedelsföretagen and Frozen Cocktails 2010–2015, Category Development Manager LEAF Finland, October 2015–31 March 2018. Various International AB. 2004–2010, Global Account Manager Lidl at LEAF sales and marketing roles at British American 2007–2009. Previous positions: General Manager Findus, Tobacco in the Nordic countries including General Shareholding: Direct: 26,443 class B shares Sweden. Managing Director Heinz Northern and Manager Norway and Finland. Related parties: – Eastern Europe, Retail Sales Manager Heinz Shareholding: Direct: 12,554 class B shares Sweden and Business Development Manager Findus. Related parties: – Shareholding: Direct: 11,903 class B shares Related parties: –

Shareholding stated as at 31 January 2019

Cloetta ANNUAL AND SUSTAINABILITY REPORT 2018