table of contents - veikkaus.fi · statement of comprehensive income ... on 17 july 1940 by the...
TRANSCRIPT
Table of ContentsVeikkaus 75 years ...................................................... 1Veikkaus 2014–2015 .................................................. 2Strategy ...................................................................... 32014 and 2015 objectives .......................................... 5CEO's review.............................................................. 6Key figures ................................................................. 8Business..................................................................... 9Customer understanding .......................................... 10Registered players ................................................... 11Customer contacts ................................................... 12Customer service ..................................................... 13Sales network ........................................................... 14Online channels........................................................ 15Games...................................................................... 16Marketing and communications................................ 18Product development ............................................... 19Market review ........................................................... 21Sponsoring ............................................................... 22Future outlook .......................................................... 23Responsible Operator .............................................. 24Stakeholder cooperation .......................................... 25Responsibility principles ........................................... 29CSR management and organisation ........................ 32Verified responsibility................................................ 33Security and reliability .............................................. 34Consumer protection for players’ advantage............ 35Preventing problem gambling................................... 36Tools to control gaming ............................................ 37Peluuri ...................................................................... 38Profits distributed to Finns ........................................ 39Tax footprint .............................................................. 40The path of the Veikkaus euro.................................. 41Personnel ................................................................. 42Management and supervisors .................................. 43Development of personnel ....................................... 44Remuneration........................................................... 45Cooperation.............................................................. 46Equal opportunities................................................... 47Occupational wellbeing ............................................ 48Actions against corruption ........................................ 49Personnel key figures............................................... 50Environmental responsibility..................................... 52GRI table .................................................................. 54Assurance Report..................................................... 64Corporate Governance .............................................. 0Corporate Governance review 2014 ........................ 65
Governing Bodies ..................................................... 66Supervision of gaming activities ............................... 71Internal control.......................................................... 72Risk management..................................................... 74Supervision and control measures and supervisoryresponsibilities ......................................................... 76Communications and public relations....................... 77Internal and external audit ........................................ 78Monitoring................................................................. 79Corporate Governance Code and deviations ........... 80Supervisory Board .................................................... 81Board of Directors..................................................... 82Executive Team ........................................................ 86Official Supervisors and Auditors ............................ 88Financial Statements ................................................ 89Board of Directors’ Report 2014 ............................... 89Statement of comprehensive income ....................... 94Balance sheet........................................................... 95Cash flow statement ................................................. 96Statement of changes in shareholders' equity.......... 97Accounting principles 2014....................................... 98Notes to the financial statements ........................... 1021. Turnover by games and game groups................ 1022. Development of financial result 2010–2014 ....... 1033. Other operating income...................................... 1044. Depreciation ....................................................... 1055. Services purchased and 6. Other operatingexpenses ................................................................ 1067. Research and development expenses ............... 1078. Financial income and expenses ......................... 1089. Tangible assets and depreciation ....................... 10910. Intangible assets and depreciation ................... 11011. Cash flow from investments and paymenttransactions in progress ..........................................11112. Investments held for sale and other long-termreceivables ............................................................. 11213. Short-term receivables ..................................... 11314. Liquid assets and other short-term investments11415. Shareholders' equity and equity management . 11516. Short-term liabilities .......................................... 11617. Liabilities from employee benefits .................... 11718. Related party transactions................................ 11919. Other leasing agreements and contingentliabilities .................................................................. 12020. Signatures of the financial statements and theBoard of Directors' report ....................................... 121
CSR report and annual report 2014 0
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
Celebratory year full of causes for joyVeikkaus games have already turned Finns intowinners for 75 years.
It was the Swedes’ frighteningly good success insports that triggered the founding of Veikkaus’predecessor Oy Tippaustoimisto Ab. It was foundedon 17 July 1940 by the Finnish National SportsFederation, the Finnish Workers’ Sports Federation,and the Football Association of Finland.
First there was just a single game: 4 September wasthe day the first Football Pools coupons were played.The famous Finnish runner Paavo Nurmidemonstrated to the public how the coupons shouldbe filled in. The first object was an internationalathletics competition between Finland, Sweden, andGermany. On the opening round, up to 140,000columns were filled in for the worth of nearly 300,000
Finnish marks.
In the early years, the proceeds were distributed tobeneficiaries within sports and physical education.More recently, arts, science, and youth work havejoined the beneficiaries.
During Veikkaus 75, our celebratory year, we want toshed even more light on the things that the proceedsfrom Veikkaus games generate and that can beenjoyed by all Finns. For making the good thingspossible, we wish to thank our customers and gamesales staff by organizing events and happenings allover Finland during our celebratory year.Read more about Veikkaus 75 > www.veikkaus.fi/oletvoittaja.
CSR report and annual report 2014 1
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
Bringing joy to lifeVeikkaus' operations bring joy to the lives of each andevery one of us. More than half of the euros spent onVeikkaus games are returned to players as prizes andwinnings. The proceeds from Veikkaus games aredistributed to thousands of beneficiaries engaged inFinnish arts, sports, science and youth work. Thehundreds of millions of euros distributed by theMinistry of Education and Culture bring joy to the livesof people everywhere in Finland – to all of us.
Veikkaus aims at promoting responsible gaming andsustainable growth. We invest especially in thedevelopment of electronic business and the productrange. Our objective is to strengthen the emotionalbond with our customers through better customerexperience and beneficiary awareness.
VValuesalues
FFor the cor the common goodommon good
Veikkaus generates broad-rangingvalue to Finns. Veikkaus gives Finnsthe chance to participate in the creationof the common good by playingsecurely and reliably. We also offerFinns the opportunity to work towardsthe common good. Veikkaus indirectlyemploys tens of thousands of Finns.
RResponsiblyesponsibly
CSR is at the very heart of Veikkaus’strategy and actions in practice. Ourcustomers can rely on us one hundredpercent. Being responsible for ouroperations to society, we shall reporton our operations widely and openly.
RReliablyeliably
Veikkaus employees can rely on eachother under any circumstances.Reliable operations also involve openinteraction. Customers can alwayshave confidence in the gamesVeikkaus offers.
CrCreaeativtivelyely
Veikkaus wants its games, servicesand way of working to reflect creativityand enjoyment. The personnel are alsoencouraged to be innovative.
CSR report and annual report 2014 2
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
Responsible profit maker bringing joy to the lives ofall FinnsVeikkaus’ strategy was updated in spring 2014. Thefive area-specific strategies were merged into onecompany-level strategy and the contents of thestrategy were updated where necessary at the sametime. The strategy chosen aims to ensure that thecompany will reach its targets by acting efficiently,reliably, and responsibly.
In the updated strategy the company’s objectiveshave been summarized with seven adjectives.
RResult, futuresult, future, and fe, and feelingeeling
As the strategy was updated, we also revised themodel for operational steering. According to themodel, the strategy is first opened up and turned intolarge-scale company-level objectives and benchmarksfor the strategy period. After this, the company’s mainpoints of focus and the target levels for thebenchmarks are determined for each year. Theprocess is further concretized as the main focuses ofthe functions, lists of measures to be taken in theunits, and the personal targets of each Veikkaus’employee.
We have selected three practical perspectives thatbalance each other to structure the entity of thestrategic objectives: Financial result, Future, andFeeling. Financial result means achieving the profit
objectives, Future refers to the factors that help us toensure growth in the years to come. Feeling, in turn,reflects how Veikkaus is perceived within and outsideof the company, i.e. how our own staff and otherstakeholders see us.
TTen sen strtraategic benchmarkstegic benchmarks
As the strategy was updated, we also revised the wayof measuring how successfully the strategy isimplemented. Ten strategic benchmarks weredetermined for the company for the strategy periodbetween 2014 and 2017:
1. Financial result
2. Daily number of customers
3. Beneficiary awareness
4. Profit from innovations
5. Market share
6. Customer experience
CSR report and annual report 2014 3
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
7. Web game margin
8. Expenses/game margin
9. Share of registered gaming
10. Personnel motivation index
CorCore pre prococessesesses
In order to develop operations and implement itsbusiness strategy, Veikkaus has defined threeessential core processes: the service process, theproduct development process and the steeringprocess. These three core processes will ensure thatVeikkaus' operations take a customer-orientedapproach and meet customers' needs. Besides thecore processes, Veikkaus also has support processesto ensure that the core processes can function.
The service process is in charge of producingVeikkaus games and services. It produces services ata pre-defined cost and service level (e.g. qualitylevel), enabling the achievement of businessobjectives.
The product development process develops concepts,products and services associated with Veikkaus'business. This process includes the maintenance ofexisting products, as well as the development of newproducts and services. Veikkaus’ productdevelopment process was updated in summer 2014.
The steering process was revised for all of its processphases in connection with the strategy work in spring2014. The principal tasks of the steering process are:
• Understanding the forces for change in theoperating environment and the stakeholders’ needs
• Creating a strategic framework for Veikkaus’operations
• Reconciling the needs of the operating environmentand the business operations at a strategic level
• Converting the strategy into annual points of focusand operating plans that steer the operations
• Converting the operating plans into a goal card anda development plan guiding the operations ofindividual employees
• Reporting on the implementation of the strategy andother operations in order to enable follow-ups andpossible adjustment measures
CSR report and annual report 2014 4
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
2014 and 2015 objectives:SusSustainable grtainable groowth, long-term dewth, long-term devvelopmenelopment,t,and cand cosost-et-efficiencyfficiency
Veikkaus’ objective is to promote responsible gamingand to attain sustainable growth.
Financial objectivFinancial objectives and achiees and achievvemenements 2014ts 2014• Result objective EUR 510.0 million, actual result
EUR 520.4 million (+2.8%)
• Share of total expenses on the gross margin30.95% at the maximum, actual share 31.13%.
CSR objectivCSR objectives and achiees and achievvemenements 2014ts 2014• Increasing the share of registered gaming out of all
euros staked. The share went up by 3.6 percentagepoints.
• Maintaining the level of the brand attributemeasuring the CSR image at the level of 2013 atthe minimum (3.87). The actual level was 3.83.
EnEnvirvironmenonmental rtal responsibility objectivesponsibility objectives andes andachieachievvemenements 2014ts 2014
• The 2014 environmental objective was to set a newenvironmental objective for Veikkaus for the yearsto come. We adopted the objective of reducing ourtotal energy consumption by at least 15% from the2014 level by the end of 2017.
• Veikkaus had committed to reducing its carbondioxide emissions by 35% from the 2009 level bythe end of 2013. According to the final calculationsin 2014, the carbon dioxide emissions went down by46%.
ObjectivObjectives fes for 2015or 2015
In 2015, Veikkaus will focus especially on thedevelopment of electronic business and the productrange. The aim is to strengthen the emotional bondwith customers by improving customer experienceand beneficiary awareness. Cost-efficiency is sought,e.g., by making the internal processes more efficient.We will also pay special attention to ensuring aresponsible operating culture.
Financial objectivFinancial objectives 2015es 2015• Result objective EUR 525 million (+1.0%)
• Share of total expenses on the gross gamemargin 27.02% at the maximum
CSR objectivCSR objectives 2015es 2015• Increasing the share of registered gaming.
• Finns become more aware of the use of Veikkausfunds and their benefit to them personally.
CSR report and annual report 2014 5
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
A year of reforms yielded an excellent result for thebenefit of FinnsVeikkaus’ year 2014 was a success in many ways.We were able to achieve an excellent financial resultin spite of the economic recession and the weakgrowth of 0.4 percent of the gaming market. Veikkaus’share of Finnish gaming went up to over 50 percent in2014.
Thanks to customer-oriented development and cost-efficiency, we managed to increase our turnover by5.4 percent. Thus, our financial result improved by 2.8percent over the previous year, reaching EUR 520.4million.
Our game reforms were especially successful in thepast year: a majority of Finns now know the newNeighbours game, and over 340 000 of them haveplayed it. Nearly one million Finns have already triedLotto’s new Double-Up feature. The Fixed OddsBetting reform was also well received among ourcustomers.
In addition to conscious efforts to develop our gamesand consumer web store veikkaus.fi, we madesignificant changes to our ways of operating in 2014.For example, we revised the way our developmentprocesses are carried out, in order to respond betterto customer feedback and to improve our offerings inan even more flexible and nimble way in the middle ofthe digitalising operating environment.
We wish to offer joy of gaming to a wide customerbasis playing with moderate stakes. In 2014 thenumber of our loyal customers already exceeded thelimit of 1.6 million. Around sixty percent of the gamingtook place through our comprehensive point-of-salenetwork covering the entire country, whereas fortypercent of the games were played via our digitalchannels. Our loyal customers can play registeredboth on the net and at the points of sale. This assuresthat the prizes are paid directly to the winners’accounts, reinforces our customers’ consumerprotection, and enables us to develop the tools for theself-control of gaming. From a social point of view,registered gaming prevents, e.g., the risk of moneylaundering.
Responsibility was a salient part of our operations in
2014. At the beginning of the year, we updated ourcore responsibility tools, and in the autumn, wecarried out a prominent campaign to raise theawareness for recognizing the risks of problemgambling. We are working persistently in favour ofresponsible gaming, bearing our responsibility for theprevention of the drawbacks of gaming, andencouraging people to always seek help to potentialproblem gambling.
In December the Cabinet Finance Committee decidedto launch a project for analysing possibledevelopment models for the Finnish gaming system.The analysis will be based on a continuedcommitment to the exclusive rights system andsecuring the position of the beneficiaries of thegaming proceeds. The project, which will be carriedout under the Ministry of the Interior, will also cover anassessment of the structure of the current threegaming companies. We at Veikkaus trust that ourresponsible, skilful, and forward-looking operationswill be useful whatever the corporate structure will be.
Gaming operations that are supervised and guided bysociety enjoy strong support in Finland. However,there are still many factors causing insecurity. Weakconsumer demand, the shift of gaming towardselectronic channels, the illegal gaming offerings andmarketing that are trying to enter the Finnish market,and the development of EU legislation make itnecessary for us to innovate very fast.
We want to be the best gaming company in the world.To achieve this ambitious goal, we need to set outtargets high. In 2015 we will aim at even betterresults. Besides our customer-oriented, responsible,and nimble ability to innovate, it is our first priority toassure broad-ranging knowhow whilst building thefuture. We will start our year 2015 on a strong basis,although the overall economic situation and weakconsumer demand add to our challenges.
The year 2015 is a celebratory year for Veikkaus: Ithas been 75 years since the company was foundedand the first line of Football Pools was played. It is arespectable period of having provided responsiblegames to be enjoyed by all Finns.
CSR report and annual report 2014 6
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
We are celebrating our persistent work under thetheme ”You are already a winner”. It intends to remindpeople of the fact that the proceeds of Veikkausgames are channelled to the benefit of Finnish arts,sports, science, and youth work – i.e. to the benefit ofeach and every Finn.
I wish to express my warmest thanks to Veikkaus’personnel and our partners in cooperation for theirpersistent work and commitment. My special thanksgo to all Veikkaus’ customers, who have given theirimportant support to Finnish wellbeing by playing ourgames.
Juha KoponenCEO
CSR report and annual report 2014 7
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
Key figuresEconomic responsibility 2014 2013 Change in %
Turnover (EUR million) 1,959.5 1,858.4 5.4 %
Operating profit (EUR million) 519.2 505.2 2.8 %
Result before appropriations 519.2 506.3 2.8 %
Result for the financial year 520.4 506.3 2.8 %
Investments (EUR million) 16.8 12.3 36.6 %
Prize payout to players (EUR million) 1,096.4 1,022.5 7.2 %
Number of POS (end of year) 3,813 3,665 4.0 %
Retail commissions (EUR million) 78.0 79.8 -2.2 %
Lottery tax (EUR million) 104.2 99.8 4.4 %
Return to the Ministry of Education and Culture (EUR
million) 1)517.5 506.3 2.2 %
Social responsibility 2014 2013 Change in %
Registered players (end of year) 1,636,419 1,538,179 6.4 %
Employees (end of year) 332 333 -0.3 %
Employee turnover, incoming, % 6.0 9.9 -39.4 %
Employee turnover, departing, % 6.3 6.0 5.0 %
Average duration of employment in years 11.8 11.7 0.9 %
Performance appraisal discussions held, % 100 100.0
Environmental responsibility 2014 2013 Change in %
Veikkaus’ total energy consumption (MWh) 2) 10900,0 - -
Waste recovery rate at head office, % 3) 99.0 90 10.0 %
1) In addition to the EUR 517.5 million returned to the State, EUR 2.9 million was transferred to the UndistributedPrizes Fund. During the financial year, a total of EUR 23.3 million of undistributed prize funds were paid to theMinistry of Education and Culture, for distribution to Finnish arts, sports, science and youth work.
2) A new key figure, which was adopted in 2014 as part of the new Environmental Programme.
3) Since the launch of the new waste-to-energy plant, even the mixed waste generated at Veikkaus’ head office isreutilized.
CSR report and annual report 2014 8
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
Veikkaus responds to the challenges of the marketsituation by product development and cost-efficiencyThe weak consumer demand was still reflected on theFinnish gaming market in 2014. Veikkaus hasresponded to the challenges by both developing thegame sales channels and paying attention to cost-efficiency. During the year under review Veikkausmanaged to increase its return to society.
Veikkaus develops its games and services in both theretail sales and the digital channels. In 2014 welaunched one completely new game, Neighbours, andrevamped the long-term favourites Lotto and FixedOdds Betting.
Web gaming continued its strong increase. In 2014 upto over 40% of Veikkaus sales came from the web.During the year under review, Veikkaus’ website wasreformed and turned almost entirely responsive,making the user experience uniform irrespective ofterminal equipment. Based on analytics, the gamingpages were made faster, easier to use, and betterpersonified.
Promoting registered gaming is a core part ofVeikkaus’ strategy. During the year under review, thenumber of registered customers exceeded the limit of1.6 million.
CSR report and annual report 2014 9
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
Veikkaus games are known to most FinnsKnowing the world of our customers, games, andgaming is a first priority for Veikkaus’ business. In2014 the number of registered customers exceededthe limit of 1.6 million. More and more Veikkauscustomers play registered either at veikkaus.fi or at apoint of sale by showing their Veikkaus Cards. Theshare of registered gaming out of the total sales was57.3% (+3.6 percentage points) during the year underreview.
Finns are familiar with Veikkaus games. Of adultFinns, 88% say they play Veikkaus gamessometimes. Up to 79% of them say they playVeikkaus games every year, whereas 43% play everyweek (Atlas Study 2014). In 2014 Finns spent anaverage of EUR 364 on Veikkaus games per capita(+10%).
RResponsible business deesponsible business devvelopmenelopment bt byyusing gaming dausing gaming datata
Registered gaming enables us to develop measuresto advance responsible gaming and to prevent
gambling problems. Veikkaus has been developing amathematical model based on its customer base, withthe intention of promoting responsible gaming. TheResponsible Customer Relations Model (VasA) aimsto ensure, e.g., that marketing measures are nottargeted at customers whose gaming behaviourdisplays features generally indicating that theirgaming might be taking a risky turn.
During 2014 the background variables of the VasAmodel were reconsidered, taking into account thechanges that had taken place in the product rangeand the gaming environment. The model was updatedand, in the course of the year, we tested the effect ofmessages with responsibility-related contents on thecustomers’ gaming behaviour.
Since the beginning of 2015 the VasA model has beenan established part of Veikkaus governance system,and the effects of the model are reported regularly tothe company management.
CSR report and annual report 2014 10
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
Over 1.6 million registered customersPlaying registered provides the basis for Veikkauscustomer relations. Our customers can play registeredby showing their Veikkaus Cards at the points of sale,at Veikkaus websites, on their mobile phones, ortablets. Registered playing is genuinely beneficial tothe customers, since the prizes are paid easily anddirectly to their gaming accounts. At the end of theyear under review, Veikkaus had some 1.64 million (+6.5%) registered customers.
When the players register themselves as ourcustomers, they gain access to a set of tools enablingthem to follow their own gaming and game history atthe web service veikkaus.fi. Another concretecustomer benefit for registered customers is Veikkaus’Loyal Customer Programme, which offers manycustomer benefits, including discounts to events,weekly Loyal Customer Draws, and VeikkausTV.
VVeikkeikkaus Caraus Card benefits included benefits includediscdiscounounts on ents on entrtrancance fe fees tees toomuseums, sporting emuseums, sporting evvenents, cts, conconcerts,erts,and moand moviesvies
Veikkaus’ Loyal Customer Programme aims at makingour customers committed and communicatingVeikkaus’ social significance.
The Loyal Customer Programme includes weeklyLoyal Customer Draws in which our players can enrolthemselves over the Internet. During the year underreview, the weekly draws numbered 52. In addition,there were twelve further draws for our LoyalCustomers. The prizes drawn included Lotto bicycles,jewels by Kalevala Jewelry, and a trip to the WorldBasketball Championships. In all, the different drawsattracted nearly 2.4 million entries during the yearunder review. A total of some 311,000* registeredVeikkaus customers took part in the Loyal CustomerDraws.
By showing their Veikkaus Cards, our customers getdiscount on, e.g., entrance fees to museums, sporting
events, theatres, and the cinema. We aim to offerLoyal Customer benefits that are linked to Veikkaus’beneficiaries. In spring 2014 we launched a newbenefit concept called “Take your friend with you”,offering Veikkaus’ loyal customers a chance to by twotickets for the price of one to concerts.
*Number of Loyal Customer Draws as of 17 Feb 2014
ConContentented custed custtomersomers
Veikkaus carried out an extensive customersatisfaction survey in October and November of theyear under review. The respondents were askedabout their experiences and opinions on serviceencounters at the points of sale and on the net, aswell as on Veikkaus’ customer service. They werealso asked to give their views on Veikkaus’ customercommunications and the Loyal Customer Programme,as well as on Veikkaus in general.
According to the survey results, Veikkaus’ strengthsare reliability and ease of gaming. The customers saidthe things we should develop most were increasingthe odds of winning smaller prizes and offeringcompetitive odds in sports games.
The customers’ total satisfaction with Veikkaus and itsservices remained at the level of the year before. Ofthe respondents, 92 percent were very happy orrather happy with Veikkaus operations as a whole.
Distribution of totalsales
Number ofregisteredcustomers
CSR report and annual report 2014 11
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
Customer communications turning electronic andmore accurately targetedVeikkaus keeps its registered customers posted ontopical gaming issues, campaigns and benefits,through targeted customer relations communications.Direct marketing is addressed to registeredcustomers, making use of customer data andresponsibility evaluation.
Registered customers who have given Veikkauspermission to contact them receive direct marketingcommunications via email, mobile messages andmail. In 2014, Veikkaus sent its customers nearly 20million messages. The total number of messagesremained more or less the same as in the previousyear.
We aim to target the messages to as carefullyselected customer groups as possible. Our objectiveis to send out more and more service-mindedmessages that are useful to the customers. Forexample, reminders about Loyal Customer Draws aresent to customers who have participated in the drawof the previous week but who have not yet taken partin the draw of the ongoing week. The customers canalso be reminded, e.g., about the ending of their Lottosubscription.
CusCusttomers' privomers' privacy pracy prootection a ktection a keeyyprioritypriority
As the number of customers and the customer dataincrease, data protection and its development are keypriorities.
When using the data in its consumer-customerregister, Veikkaus strictly complies with the PersonalData Act. The Privacy Policy section on Veikkaus'website explains what the customer data is used forand how the personal information is stored. Customerrelations are developed first and foremost in fullcompliance with the customers' wishes and opinions.
To ensure the usability of its data systems, Veikkauscomplies with a quality system in data systemdevelopment and production. In terms of security,Veikkaus aims to be the leading company in its sector.Veikkaus has a documented security system in place,based on the World Lottery Association's WLA-SCSand the ISO/IEC 27001 security standards, the ISO9001 quality standard, and the effective laws andregulations.The security system is certified in accordance withthese standards.
By providing training and guidelines, Veikkaus seeksto ensure that the retailers act in accordance with thecompany's security requirements.
Veikkaus has a special Privacy Policy Team, whichworks to develop and coordinate issues related to thecustomers' data protection. The practices are jointlydeveloped according to the guidelines issued by theData Protection Ombudsman. The team consists ofexperts from various functions and units.
CSR report and annual report 2014 12
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
Active contacts with customers and sales staffThere is a lot going on in Veikkaus games all the time.Gaming is experiencing a shift from weekly and dailyevents to a rhythm where something happens everyhour or even every minute. This adds to thecustomers’ need to get professional service quicklyand reliably. It is another key priority for us to serveour over 3 800 points of sale, solving problematicsituations and ensuring smooth sales transactions.
ServicService ee evvery daery day oy of the yf the yearear
Veikkaus’ customer and sales staff service is openevery day of the year from 8:00 to 23:00, with a fewexceptions. During the year under review, we handledan average of about 15 000 calls by customers andover 12 000 calls by the game sales staff everymonth. The customer service focused especially onhelping customers to reduce problems of connectionand terminal equipment having to do with webtransactions.
We have developed a distance care model for thesales staff in cooperation with the retailer sales. Theservice staff contacts the game sales clerks and tellsthem about new products and training opportunities,and offers tips for sales promotion. Every month,about a hundred points of sale are contacted.
The customer service has also developed a customercare model in collaboration with the CustomerRelations Management Unit. The customer contactsare carefully planned and, for example, newcustomers are welcomed by giving them a call. In2014 we contacted an average of over 23 000customers on the phone, by email, and sms everymonth.
Most customer calls still take place on the phone.Chat ranked as the second most popular channel,surpassing emails in the autumn. Veikkaus’ customerservice also answers customers’ queries on Facebookand Twitter.
CSR report and annual report 2014 13
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
Retail network growing in grocery storesOf Veikkaus' turnover, 60 percent (64% in 2013)comes from the nationwide retail network. Thestructural change in retail trade and changes inconsumer behaviour are also affecting the structure ofretail sales and the number of customer calls. Theturnover of Veikkaus' retail sales amounted to EUR1.17 billion (–1.2%) during the year under review, ofwhich the jackpot games represented 48% (50%),daily games 36% (34%), and sports games 16%(16%).
At the end of the year, Veikkaus games were sold at3,810 points of sale (+145). The number of new pointsof sale was 292, most of which were placed in grocerystores. During the year under review, 147 point-of-sale contracts were ended.
Kiosks accounted for 43% (44%) of the sales, grocerystores for 39% (37%), and service stations and cafésfor the remainder. Veikkaus paid a total of EUR 78.0million (–2%) in retail commissions during the yearunder review. The retailers received an average of6.7% in retail commissions on the games they hadsold*.
*The figure is based on the total turnover of the retailsales.
VVeikkeikkaus Expraus Express gaming on theess gaming on theincrincreaseease
Veikkaus Express checkout counter games can beplayed at the grocery stores of the S-Group since2014, in addition to the points of sale at the stores ofKesko and Suomen Lähikauppa. Thanks to anationwide ad campaign, the amount of fast Expressgaming taking place at checkout counters increasedsignificantly.
TTrraining faining for game sales clerksor game sales clerks
Veikkaus develops and maintains the professionalskills of its roughly 40,000 game sales clerks working
at different points of sale. Training events are offeredfree of charge around the country every week.
In 2014 Veikkaus' retailer training staff organised over395 training events: basic training, advanced trainingand Boost Your Veikkaus Sales events. These eventswere attended by 12,516 game sales clerks.
The training events focused on groups that weresmaller and better targeted, aiming to delve deeperinto chain-specific practices.
RReetail sales rtail sales respond tespond to the ro the rapidapidchanges in the operchanges in the operaating enting envirvironmenonmentt
The retail sales unit drafted a developmentprogramme for the period between 2015 and 2017, inorder to respond to the consumers’ purchasingbehaviour and the changes in the structure of theretail trade. The programme’s focus areas are first-class customer experience, fast and easytransactions, high-quality and versatile partnershipcooperation, a broad and vital network, as well asraising prominence in the retail industry’s media.
The development programme aims to maintain anddevelop the vitality of the retail network and keep thesales at least at the present level.
Turnover of websales, EUR million
Number of POS
CSR report and annual report 2014 14
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
Internet gaming continues to growInternet gaming continued to grow strongly, as anincreasing number of Veikkaus customers play on theNet.
Internet gaming represented 40% of Veikkaus’ totalsales. The turnover of the web sales amounted toEUR 789.56 million (EUR 674.30 million, +17%). Theyear 2014 meant a breakthrough for mobile gaming:its share of web sales reached about 15 percent.
The digital channels had an average of over 413,000weekly customers who made a purchase (+7%).Veikkaus.fi is one of the biggest consumer web storesin Finland in terms of weekly customers and profit.The most popular games are Fixed Odds Betting,Lotto, and eBingo.
The increasing number of web transactions requiresconstant technological development of our services.For example, during the year under review, we madean extensive reform to Veikkaus’ website, turning italmost totally responsive. The game site was madefaster and easier to use, based on analytics. Itscontents were also better targeted according to the
customers’ behaviour. By sending out customermessages, we pursued even better service andcustomer experiences by tailoring the contents of themessages to the customers’ needs.
TToowwarards mords more personified gamee personified gameservicservicee
In 2014 we launched many pilot projects that will befurther extended in 2015. The personification of thewebsite will be further developed, in order that thecustomers feel they are getting personal service. Wecontinue to make gaming easier and faster, improvingthe customer experience, and offering our customersproducts and services they are interested in.
Veikkaus is among the pioneering companies of theprogrammatic buying of digital media, where themessages can be targeted real time according to thecustomers’ behaviour. Using accurate benchmarksand reporting, we can make the most of theinvestments made.
CSR report and annual report 2014 15
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
Veikkaus develops its games responsibly to meetthe customers’ needsVeikkaus’ objective is to develop versatile gameofferings that Finns find interesting, and to respond tothe changing consumption habits. A portfolio ofgames that has been designed in a customer-orientedand responsible way ensures that Finns will continueto be interested in Veikkaus games even in the future.
Veikkaus’ strategy aims at serving different player-customers optimally, by meeting their personalexpectations. We promise to offer our customers aninteresting, innovative, easy-to-use, entertaining, andresponsible portfolio of games.
In 2014 Veikkaus introduced an entirely new type of agame, as the Neighbours was launched in May. Theplayers enter the game by giving their address, andonly Veikkaus’ registered customers can enter. Thejackpot is drawn among all the entries, but the smallerprizes are distributed according to the player’sdistance from the winner of the jackpot. Neighbours isdrawn every day.
Finland’s most popular game Lotto was revamped inJune 2014. Lotto’s prize tiers were made simpler anda voluntary Double-Up feature of an additional price ofEUR 0.25 was introduced. The Double-Up featuregives a chance to win any prize – even the jackpot –double as big.
The sports game players’ favourite Fixed OddsBetting was overhauled in May 2014. The number ofbetting objects was multiplied and the number ofspecial objects and new series of objects wasincreased significantly. Most of the objects in FixedOdds Betting are currently available as single objects.
Responsible gaming also involves the prevention ofthe drawbacks of gaming. The product developmentprocess includes an assessment of the products andservices from a responsibility perspective, from themoment the idea is born to the stage when it isdeveloped into a final product.
LLootttto, Ko, Keno, and Fixeno, and Fixed Odds Beed Odds Bettingttingcconontinued as the mostinued as the most popular gamest popular games
Veikkaus’ three most popular games, Lotto, Keno, andFixed Odds Betting generate over half of thecompany’s turnover. Lotto and Keno are in a class oftheir own: Lotto’s sales represented 22.0 percent andKeno’s 20.1 percent of Veikkaus’ total turnover.
Finns played Lotto for a total of EUR 431.1 million(–10.3%). The decline in Lotto’s sales was due to,e.g., fewer natural rollover jackpots.
The multinational Eurojackpot’s top prize was landedin Finland three times during 2014 (on rounds 14/2014, 37/2014, and 52/2014). Eurojackpot’s saleswent up by 50.8% over the year before. Finns playedEurojackpot for EUR 160.5 million in 2014.
Besides Eurojackpot, a group of games to increase itspopularity in particular was that of the eInstants. Theirturnover went up to EUR 119.3 million (+71.0%)during the year under review.
Veikkaus’ second most popular game Keno increasedits turnover slightly. Finns played Keno for about 394.2million (+2.8%) in 2014.
The sports games posted a total turnover of EUR427.8 million (+5.9%). The most popular sports gamewas Fixed Odds Betting, which Finns played for aboutEUR 216.6 million (+9.1 %) in 2014. The increase wasboosted especially by the Sochi Winter Olympics andthe FIFA World Cup in June.
OvOver one billion eurer one billion euros tos to plao playyers iners inprizprizeses
Over a half of the euros spent on Veikkaus games arereturned to the players as prizes. The prize payout toplayers amounted to nearly EUR 1.1 billion in 2014,which is 7.2% more than in the year before. A total of106.7 million prizes (+9.0%) of different amounts werepaid, i.e. the players won about 292 000 times everyday.
CSR report and annual report 2014 16
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
PrProduct inoduct infformaormation and rulestion and rulesaavvailable on diffailable on differerenent channelst channels
The product information on Veikkaus products andservices, required by the Consumer Protection Act, isavailable to the customers on playslips and gameinstructions at the points of sale and in the web storeveikkaus.fi.
The Ministry of the Interior approves the game rulesby application. The approved rules are available to thepublic at the points of sale. The rules can also befound in Finnish at the web store's game pages underInformation and rules.
Turnover of Lotto,EUR million
Turnover of Keno,EUR million
Turnover of FixedOdds Betting, EURmillion
Prize payout toplayers,EUR million
CSR report and annual report 2014 17
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
Neighbours and Lotto’s reform at the leading edgeof marketingSome of Veikkaus most significant marketing andcommunications actions were launching the newNeighbours game and the newly introduced DoubleUp feature of Lotto, which is Veikkaus’ most populargame.
Veikkaus spent a total of EUR 18.3 million (+6.5%)during the year under review, which represents 0.9%of the company’s turnover (+0.0 percentage points).
The marketing restrictions specified in the LotteriesAct entail, e.g., that the marketing of harmful gamesand the provision of illegal gaming are forbidden.Complying with these restrictions means, amongother things, that Veikkaus cannot advertise its bettinggames, eInstants, or other Internet games. However,we can offer product information on these games.
The Ethical Marketing Guidelines can be found atveikkaus.fi. During the reporting period, Veikkausreceived one notification on the marketingcommunications from the Council of Ethics inAdvertising in August. The notification concerned avideo advertising betting on the Fifa World Cup atVeikkaus’ website and on Youtube, which wasdeemed to be in bad taste. Veikkaus removed thevideo from its own channels after receiving feedbackfrom the general public.
RReliable and open celiable and open communicaommunicationstions
Veikkaus provides open information on the company,its products, and any changes. We engage in activeand timely communication with media representatives,customers, sales clerks and other stakeholders. In ourmarketing and other communications, we offer openinformation on our games and the odds of winning.Gaming is based on chance and the results can neverbe predicted with certainty.
A major part of Veikkaus' publicity relates to thegames offered, but due to its position in societyVeikkaus is also involved in discussions that do notdirectly concern the company.
During the year under review, Veikkaus sent outnearly 600 different communications. There werealmost 3,700 media hits (the media monitoringcovered the major national newspapers, localnewspapers, magazines, and radio and televisionnews broadcasts). Of all the media hits, 95 percentwere positive or neutral.
CSR report and annual report 2014 18
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
Responsible product development listening closelyto customersThe product development process includes anassessment of the products and services from aresponsibility perspective, from the moment the ideais born to the stage when it is developed into a finalproduct.
The ethical evaluation of the games is carried out incooperation with the Finnish Slot Machine AssociationRAY, using the Responsibility Evaluation Tool (RaVa).The tool enables the analysis of innovations from theperspective of possible gaming addiction.
In 2014 the Responsibility Evaluation Tool wasupdated both for its contents and technology. Alongwith the update, the Tool’s questions were brought up-to-date, and they were supplemented with a couple ofnew ones, in order that the new types of games wouldbe covered. At the same time, in connection with theupdate, the usability of the Tool and the storage of thedocuments generated on the basis of theassessments were improved.
The Responsibility Evaluation Tool has nine sectionsthat measure the possible addiction-provokingfeatures associated with a game idea. On the basis ofthe results, changes can be suggested and commentscan be made regarding the game idea. For example,the evaluation can lead to possible restrictions eitheron the game or its marketing.
In 2014 the Responsibility Evaluation Tool was usedto assess 33 products still at their development stage.
ElemenElements ots of the Gaming Rf the Gaming ResponsibilityesponsibilityEvEvaluaaluationTtionTool:ool:
• Gaming elements
• Risk of financial loss
• Profit/Stake structure
• The role of skills, information, chance and rules
• The attractiveness of the game and the gamingenvironment
• Additional attractions
• Social features
• Availability
• Marketing
To assess the distribution channel solutions andservice concepts, Veikkaus makes use of a set ofethical evaluation questions developed at Veikkaus.The Ethical Evaluation Question Set (RaVa) is basedon the sections of the Responsibility Evaluation Tool.In connection with the update of the Tool, theresponsibility values of different services were enteredinto one and the same system. These tools help toensure that the gaming products and servicesentering the market are ethically designed and asresponsible as possible.
CusCusttomers inomers invvolvolved in theed in thededevvelopmenelopment ot of prf products and servicoducts and serviceses
Veikkaus wants to develop its products and marketingin cooperation with its customers in a more interactiveway than before. This is why we initiated the VeikkausJury consisting of customer members in the yearunder review. At the end of the year the Jury had upto about 6 000 members.
The members of the Veikkaus Jury have a chance to,e.g., comment on the games that are still beingdeveloped, as well as on the development andmarketing of existing games. At the same time, theyget to hear the other Jury members’ views and beamong the first ones to learn about innovations.
In the year under review, we also piloted the VeikkausPoints programme. Veikkaus Points is a part ofVeikkaus’ Loyal Customer Programme, where thecustomers carry out tasks and collect points. Thepoints can be used to claim different prizes. The taskscan be related to, e.g., getting to know VeikkausSocial Media channels, filling out the Game Test,answering questionnaires, or seeing videos.
The Points pilot had 4 000 participants at the end of2014. The pilot will be continued until spring 2015,after which we will make decisions on whether it willstill be continued or not.
CSR report and annual report 2014 19
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
Veikkaus’ product development process has beenupdated to better correspond to the newly adoptedoperating models. The purpose is to make theprocessing of the projects and decision making faster.The reform will also aim at supporting the project-specific launches and nimble system development.
Veikkaus went over to using nimble methods inthe development of its products and services. Thanks
to the methods adopted, Veikkaus’ productdevelopment operations have become more effective.We have achieved results of higher quality by makingthe waiting times shorter, improving communications,making operations simpler and better, and instantlyputting to use what we have learnt.
CSR report and annual report 2014 20
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
Gaming market’s growth slowed downThe weakening of the consumers’ purchasing powerand the overall economic insecurity affected theFinnish gaming market in 2014. The total market interms of game margin amounted to EUR 1,701million. Veikkaus was the only gaming companywhose game margin increased during the year underreview. As a result our share of Finnish gaming wentup to 50.7% (+1.3 percentage points). It is estimatedthat the game margin of cross-border gamingamounted to about EUR 130 million.
Veikkaus’ turnover increased by 5.4 percent over theprevious year. Of the games groups, the Daily Games(+14.7%) and Sports Games (+5.9%) increased theirturnover. The games to show the most increase werethose best suited for the digital environment in termsof their event frequency and other features, such asthe eInstants, Live Betting, together with Eurojackpot,a game of sizeable jackpots.
SStrtrong grong groowth on the Newth on the Nett
Consumer demand is moving over to the electronicchannels to an increasing degree. The share ofVeikkaus’ digital sales (veikkaus.fi and the mobile
channels) of the total turnover exceeded 40 percentfor the first time in 2014.
The retail channel generated 59.7% of the total sales(–4.0 percentage points). The number of points ofsale went up to 3,810 (+145). The retail sales networkthat covers the entire country was supplemented withnew points of sale, especially to the grocery storeunits with increasing customer volumes. The annualnumber of customer calls in the points of sale totalledover 79 million.
The number of Veikkaus’ registered customersexceeded 1.6 million in 2014. A total of over 98,200Finns joined the Loyal Customer Programme duringthe year. The launch of Neighbours, the new game forVeikkaus Loyal Customers, as well as theimprovements made to electronic gaming boosted theregistrations. An increasing share of the customersplay registered. Registered gaming represented57.3% (+3.6 percentage points) of Veikkaus’ totalsales at the end of the year.
CSR report and annual report 2014 21
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
Sponsoring is always profitableVeikkaus’ sponsoring activities entail marketing-basedcooperation with our beneficiary partners. Thesponsorship activities aim at advancing Veikkaus’game sales and game event cooperation, as well asreinforcing our brand in a sustainable way. Thecooperation is guided by the points of focus defined inthe company strategy.
Veikkaus’ partners in cooperation include operatorsfrom all beneficiary sectors: sports, youth work,culture, and science. The sponsorship cooperation
enables us to produce many-sided Loyal Customerbenefits providing joy, benefits, and experiences toVeikkaus’ registered customers.
Veikkaus' sponsorship activities represent sustainableand profitable cooperation, which furthers thecompany's business and which does not involve non-profit support activities. Veikkaus cannot offer financialsupport or distribute its proceeds. Veikkaus’ proceedsare distributed by the Ministry of Education andCulture.
CSR report and annual report 2014 22
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
Future prospectsIn 2015, Veikkaus is pursuing an even better resultthan in the year before. To achieve an improved resultthat will ensure a steady return to our beneficiaries,we must engage in continuous and responsibledevelopment, and seek to attain cost-efficiency.
However, the overall economic situation and the weakgrowth of the consumer demand cast shadows ofinsecurity on the future. The Finnish Ministry ofFinance estimated the economic growth to reach0.9% in 2015. The Finnish gaming market as a wholeis expected to grow in line with the overall economicgrowth, i.e. slightly faster than in the year before.Veikkaus’ share of Finnish gaming is estimated toremain at the 2014 level, i.e. around 50 percent.
SStrtraategy period untegy period until 2017til 2017
As Veikkaus’ strategy was updated in 2014, wedetermined the core objectives for the strategy periodfrom 2014 to 2017. In addition to cost-efficiency, wewill pay special attention throughout the period toinnovation, the customer experience, the stakeholdergroups’ emotional bond to Veikkaus, the share ofregistered gaming, which promotes responsibility, andpersonnel motivation.
Consumer demand is expected to continue its shifttowards the Internet and mobile environments. In2015 Veikkaus will focus on making its systems evenmore efficient. We will also invest in the developmentof the market space, product range, and electronicbusiness, and ensure the implementation ofresponsibility in all of our operations.
Growth and a steady return to the beneficiaries arepursued, e.g., by making gaming easier, introducinglong-term game development ideas, and ensuringinteresting game offerings. The key priority ofresponsible gaming is to increase registered gaming,which furthers our customers’ consumer protection,prevents money laundering, and enables us todevelop tools for gaming control. During the ongoingyear of Veikkaus’ 75th anniversary, our theme is to
shed even more light on the fact that Veikkaus’ totalproceeds are used for the benefit of all Finns.
The Lotto games and other draw games had a total of52 rounds in 2014, i.e. as many as the year before.The lottery tax will remain at the current twelve-percent rate.
YYear oear of Pf Parliamenarliamentary elections andtary elections andanalysis oanalysis of the Finnish gaming sysf the Finnish gaming systemtem
The Parliamentary elections and the new governmentthat will be formed will determine Veikkaus’ futureoperating environment for their part. It is foreseeablethat gaming activities supervised and guided by theState will continue to enjoy very strong societalsupport even in the next electoral term. There is awillingness to secure the opportunities of the legalFinnish gaming companies to develop their activitiesin the midst of the operating environment, which is ina constant state of change and digitalisation.
In March 2015, prior to the government negotiations,we are expecting the launch of a project to analysealternative solutions to the gaming system,commissioned by the Cabinet Finance Committee.
Based on the guidelines laid down by the EuropeanCommission and Parliament in 2013, the Finnishsystem of exclusive rights applied to gaming lies on afirm foundation. Gaming operations have not beenmade subject to harmonisation within the EuropeanUnion. In the summer of 2014, the Commissionissued recommendations on the marketing of games.
During the following strategy period, possibly in 2016,the European Court of Justice will issue a decision onthe Swedish gaming system. Its fairness is beinganalysed on the EU Commission’s request.
The expected ECJ ruling will not be directly connectedto Finland, but since such rulings generate EU caselaw, they will affect even the Finnish gaming system.
CSR report and annual report 2014 23
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
Responsible profit maker bringing joy to all FinnsSuccessful operations can only be based on a widecustomer base and general acceptance of gaming.We want to offer our customers a range ofentertaining and responsible games, meeting ourcustomers' expectations while ensuring that any harmrelated to gaming is minimised.
The justification of the exclusive right – preventing thedetriments of gaming and fighting crime – is assuredby Veikkaus’ own measures to advance responsiblegaming. Achieving business goals, we need to live upto our well-deserved responsible corporate image.Our objective is to attain a steady growth of the profit,securing the beneficiaries’ operational prerequisiteseven in the future.
RResponsibility meaningful tesponsibility meaningful toosstaktakeholders and Veholders and Veikkeikkausaus
The Executive Team is in charge of the focal points ofCSR at Veikkaus. At the end of 2014 we updated themateriality assessment of Veikkaus’ CSR. It involvedconsidering the various aspects of CSR from theperspective of all of our stakeholders and thecompany. Whilst choosing the perspectives, we paidattention to the results of the extensive stakeholdersurvey carried out in the autumn. We also consideredVeikkaus’ updated strategy and the 7 Matchesprinciples of responsibility that had been outlined inthe year before. A large number of Veikkaus’ expertemployees participated in the update of the keypriorities.
KKeey CSR priorities and Vy CSR priorities and Veikkeikkaus’aus’sstaktakeholderseholders
CSR report and annual report 2014 24
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
Interactive cooperation with stakeholdersVeikkaus wants to be in active and regular interactionwith all of its stakeholder groups. It is a keyprerequisite for successful operations that we knowand recognize our stakeholders' expectations and thatthey can trust us and our operations.We aim atgenuine dialogue where stakeholder expectations areheard and listened to more closely.
Veikkaus communicates with its stakeholders in manydifferent ways. In addition to information sharing, weengage in dialogue, carry out surveys, answerqueries, take part in events and seminars andorganise them. Veikkaus is constantly developing newforms and ways of interacting with its stakeholders.The Veikkaus Jury, a new customer panel was set upin 2014.
BesBest grt grades fades for ror reliability andeliability andrresponsibility fresponsibility from som staktakeholderseholders
In August 2014 we carried out an extensiveresponsibility survey, which had over 4 700respondents from the stakeholder groups in a periodof two weeks. The survey’s purpose was to find outhow Veikkaus could act in an even more responsibleway. The link to the survey was shared by email,customer messages, newsletters, on the Net, and viathe social media channels. Most of the respondentswere customers (89%) but we received replies fromrepresentatives of all the stakeholder groups.
In the survey, the respondents gave their opinions onthe development of Veikkaus’ responsibility. After that,they were given the chance to rate ideas suggestedby other respondents’ in order of importance. Wereceived over 3 000 ideas concerning responsibility.The themes to attract most opinions were theresponsibility of advertising, prize distribution, andgame restrictions. The respondents regarded thetransparency of the funds distribution and support tothe underprivileged, children, and youngsters as themost important issues. The stakeholder survey wascarried our in cooperation with Fountain Park.
Veikkaus’ responsibility was given the grade 4.07 (ona scale from 1 to 5). The highest grades were givenby Veikkaus’ partners in cooperation, beneficiaries,and game sales clerks, whereas the lowest grades
came from the authorities, representatives of theMinistry, and the media.
Read also: Personnel strongly committed topromoting responsibility
VVeikkeikkaus Jury caus Jury comes up withomes up withccommenomments and ideasts and ideas
During the year under review, we launched acustomer panel following our customers’ long-termwishes. The panel was named the Veikkaus Jury. It isan interactive community for Veikkaus LoyalCustomers. The members get to take part in thedevelopment of Veikkaus’ products and the customerexperience. They are also among the first to learnabout innovations.
The Veikkaus Jury is a new way of understandingcustomers and develop Veikkaus’ operations towardsan even more customer-oriented direction. The Jurymembers’ opinions were asked while planning andrealising the responsibility campaign in the autumn.Veikkaus’ Loyal Customers have the chance to jointhe Jury at Veikkaus’ website. By the end of the year,the Jury already had some 6 000 customer members.We ask the Jury’s opinions on Veikkaus’ brand,products, and services every week.
Finns’ cFinns’ conconcepeptions about Vtions about Veikkeikkaus’aus’rresponsibility fesponsibility folloollowweded
In a CSR survey commissioned by Veikkaus from theFinnish market research company Taloustutkimus (1002 respondents in May 2014), Veikkaus received thebest grades for reliability and responsibility. Accordingto the respondents, the term “socially responsible”was best suited to Veikkaus out of the thirteencompanies in the survey. The lowest grades wereagain those concerning the transparency andhumanity of our operations. Last time a similar surveywas conducted was in 2012.
See how Veikkaus works with stakeholders in tableformat.
CSR report and annual report 2014 25
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
CusCusttomersomers
Expectations directed towards Veikkaus
• Open, transparent, and reliable operations
• Attractive games, harmless pastime, excitement tospice up everyday life
• Information on where the company's proceeds go
Veikkaus' way of working
• Making proactive use of customer data andfeedback
• Constant development of customer services
• Responsible and attractive game offerings
• Increasing the degree of identified gaming
• Reliable prize payout
• Strong consumer protection
Achievements in 2014
• The number of registered customers went up to 1.6million.
• We continued to make active use of the socialmedia channels(FB,Twitter, Instagram) incommunications and interaction with customers.
• We set up an internal Creative Marketing Team,which seeks and explores various phenomena thatVeikkaus could use in its customer communications.
• We adopted a new system of customersegmentation used for understanding our customersbetter by taking into account what the differentcustomer segments are interested in and how theybehave.
• We set up an open interactive customer community,the Veikkaus Jury, which gives us feedback andideas.
BeneficiariesBeneficiaries
Expectations towards Veikkaus
• Steady income for beneficiaries, guaranteedcontinuity
• Proactive communications and cooperation
Veikkaus' way of working
• Stable profit growth to ensure beneficiaries’continued operations
• Regular contacts
• Game event and marketing cooperation withassociations, clubs, leagues and divisions
Achievements in 2014
• We continued to work in close cooperation with thebeneficiary network.
• We took especially active steps in our cooperationwith the beneficiaries from the field of music.
• We continued our extensive cooperation with theFinnish cinema, music, recreational sports, andcompetitive sports.
PPolitical decision-makolitical decision-makersers
Expectations towards Veikkaus
• Sustainable income to society
• Responsible gaming
• Preventing social problems
• Retaining the exclusive right to operate games
• Openness and reliability of operations
• Preventing crime and fraud
Veikkaus' way of working
• Regular contacts in Finland and within the EU
• General Meeting
• Supervisory Board
• Interim reports
• CSR and annual reports
Achievements in 2014
• We continued our regular and systematicinfluencing work with the European Parliament andthe Parliament of Finland.
• We organised an introduction event for all the newlyelected Finnish MEPs in June.
• We worked jointly with the European Lotteries (EL)to influence, e.g., the preparations of theCommission’s recommendations concerningmarketing and consumer protection. Therecommendations were published in July.
CSR report and annual report 2014 26
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
MinisMinistries and authoritiestries and authorities
Expectations towards Veikkaus
• Controlled, sustainable and guaranteed profitgrowth
• Responsible gaming
• Preventing social problems
• Preventing crime and fraud
Veikkaus' way of working
• Regular contacts
• Interim reports
• CSR and annual reports
Achievements in 2014
• We worked in closer cooperation with the Ministry ofEducation and Culture on beneficiarycommunications.
• We worked jointly with the Ministry of the Interiorand the National Police Board to influence thepreparations of the Commission’s recommendationsconcerning marketing and consumerprotection. Finland’s practices are in harmony withthe recommendations published by the Commissionin July.
MediaMedia
Expectations towards Veikkaus
• Fast and open communications
• Social responsibility and reliability
• Accessibility
• Gaming proceeds crucial to Finnish society
Veikkaus' way of working
• Fast, open and reliable activities towards the media
• Paying attention to the media's interests
• Communications in the social media
• Press releases and publication of winnings
• Regular media contacts
• One-on-one meetings with reporters
• Media follow-up
Achievements in 2014
• We increased our activity in the social media.
• We followed systematically how the messages gotacross and how they received attention.
• When Veikkaus was mentioned in public, the tone ofthe comments was neutral or positive in 96 percentof the cases.
PPartnersartners
Expectations towards Veikkaus
• Open, reliable, long-term relationships
• Innovative, diverse and responsible range of games
Veikkaus' way of working
• Long-term contracts and partnerships
• Centralised procurement
Achievements in 2014
• We carried out a bidding process to choose ourpartners in cooperation: the media, advertisement,and event organization agencies.
• We initiated (Express) checkout counter gamingwith the retail store chain the S-Group.
• We updated several partnership contracts.
• We enabled the 10th anniversary campaign of theFinnish Gambling Helpline Peluuri.
RReetailers and games sales clerkstailers and games sales clerks
Expectations towards Veikkaus
• Good source of income
• Versatile game portfolio
• Customer service
• Sales support
• Active communications
• Information on beneficiaries
Veikkaus' way of working
• Successful sales support through communicationand training
• Smoothly operating sales terminals (game systemoperates smoothly)
CSR report and annual report 2014 27
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
• Continuous learning and training
Achievements in 2014
• We supported product reforms, including Lotto’sDouble-Up feature, Fixed Odds Betting, and thelaunch of Neighbours by offering training to gamesales clerks and sales support.
• The Veikkaus’ game sales clerks’ Facebook groupgrew significantly and established its position as areal time communications channel.
• The advanced-level training of the game salesclerks after the basic course was tailored to bettermeet the special needs of each individual partner incooperation.
• The marketing material at the points of sale wasreplaced with digital advertising screens more often.
• Point-of-sale concepts and product materials weredeveloped further.
PPersonnelersonnel
Expectations towards Veikkaus
• Transparency and open communications
• Equal and impartial treatment
• Fairness
Veikkaus' way of working
• Outstanding workplace
• Ensuring skills development
• Personnel surveys
• Individual performance appraisal discussions
• Staff Intranet (Innet)
• Leadership info events
• News and information forums for the staff
• Support for individual employees and/or workingcommunities where necessary
Achievements in 2014
• We launched the quarterly measurement of thepersonnel’s motivation index.
• The Talent programme was initiated to support theimplementation of the strategy for its part.
• Strategy orientation was reinforced in theperformance appraisal discussion process.
• The joint “Jopo events” (Thinking together events)for Veikkaus’ senior management and keyemployees, as well as the supervisor forums, werecontinued.
CSR report and annual report 2014 28
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
WWe cre creaeate jote joyy
Creating joy is our mission. We generate fundsin a way that prevents risks associated withgaming.
Gaming legislation defines the limits of ouroperations. However, genuine responsibilityemerges from the actions we take and thechoices we make in our work every day.
As Veikkaus’ employees, we do significant andrewarding work for the common good,complying with the following principles:
11 WWe genere generaate jote joy ty tooall Finnsall Finns
• Veikkaus’ mission is to generate funds byoffering games in order to secure thesustainable activities of our beneficiaries.
• Veikkaus’ beneficiaries – Finnish arts,sports, science, and youth work – help us tomake the joy generated by Veikkaus fundsreach all Finns.
• We want Veikkaus funds to be generated ina responsible and cost-efficient way,respecting consumer protection. Veikkaus isEurope’s most efficient gaming company.
22 WWe are are we worth theorth thetrustrustt
• Finns can play our games safely, since wemake use of several systems of monitoringand control in our operations, and ourinformation security has been certified.
• Our responsibility actions have been verifiedby an external body, and they adhere to thestandards of the European Lotteries (EL)and the World Lottery Association (WLA).
• Our gaming operations are monitored veryclosely. The rules of the games, the resultsand prize distribution are approved by Stateauthorities. Further, our customers have thechance to seek help with the authorities inmatters concerning ambiguities in prizepayout.
Responsibility principlesWe generate joy – The seven matches ofresponsibility at Veikkaus
CSR report and annual report 2014 29
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
33 WWe design our gamese design our gameseethicallythically
• We carry out a responsibility evaluation of allnew game ideas and service reforms as partof our product development process. Ourobjective is to combine creativity withresponsibility in a way that our customersfind interesting.
• Our mission is to provide interesting andresponsible games to ensure that Finns willpick the Finnish gaming option.
44 WWe sell our gamese sell our gamesrresponsiblyesponsibly
• Veikkaus’ marketing is based on thepromotion of responsible gaming. Thismeans, for example, that we avoidadvertising that glorifies gaming orencourages people to play to excess.
• In our marketing, we do not glorify excessivegaming or give misleading information aboutour customers’ real odds of winning.
• Our advertisements do not suggest thatgaming would be completely without risks.Nor do we suggest that gaming could be analternative to working or a solution tofinancial problems.
• We do not target our marketingcommunications at minors, nor do we sellour games to people under 18. We makesure that the age limit is clearly visible andthat the means to control one’s gaming arecommunicated in all our sales channels.
• In our marketing, we strictly follow ourGuidelines for Ethical Marketing.
55 WWe fe fososter the joter the joy oy offgaminggaming
• We offer our customers knowledge and toolsfor gaming control in order to preserve thejoy of gaming.
• We take action to fight crime (e.g. moneylaundering) and fraud in gaming.
• We finance Peluuri, the Finnish helpline forproblem gamblers and their families andfriends.
• The Finnish gaming companies financeresearch into Finnish gaming and gamingdetriments, which is carried out by theMinistry of Social Affairs and Health, as laiddown by law.
66 WWe re respect theespect theenenvirvironmenonment in ourt in ouroperoperaationstions
• We recognize the environmental impacts ofour operations and aim to reduce them.
• We are continuously taking new steps to setenvironmental objectives and to realize themin practice.
CSR report and annual report 2014 30
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
77 WWe we work tork togeogether fther fororjojoyy
• We work in open cooperation with all of ourstakeholders, engaging in dialogue andlistening to them, including our customers,retailers and game sales clerks,beneficiaries, decision makers, theauthorities, the media, and partners incooperation.
• For us employees, Veikkaus offers aninteresting and meaningful workplace wherewe can be creative and develop our skillsand knowledge.
• Our joint mission is to make sure that all ourchoices and everything we do serve thecommon good in a responsible, reliable, andcreative way.
Veikkaus’ way of operating has been summarized asthe Seven Matches of Responsibility of Veikkaus.Ourcustomer promise “Joy for Life” is realised by workingtogether according to the responsibility principles wehave jointly agreed upon.
The Seven Matches of Responsibility were drafted in2013.
The principles are based on the personnel survey,workshops, and discussions, and every employee hadthe chance to give their own views on howresponsibility could be furthered atVeikkaus. According to the results of the personnel
survey, 93% of Veikkaus employees make at leastsometimes choices in their work that are related toresponsibility.
The feedback given by the personnel can besummarized into three things that provide theguidelines for updating the responsibility principles:
• Responsibility and profit making must be combinedin a natural way in the company strategy and goalcards.
• The responsibility principles must describeVeikkaus’ operations in as concrete, touching, andpositive ways as possible.
• Veikkaus should shed more light on issues that wemay experience as self-evident facts, such as thereliability, equality, and security of our operations.
PPersonnel sersonnel strtrongly congly committed tommitted toofurthering rfurthering responsibilityesponsibility
In autumn 2014 the employees also answered theresponsibility survey directed at Veikkaus’stakeholders. As compared with the other respondentgroups, the employees rated the responsibility ofadvertising, age limit controls, and game restrictionsmore important when asked to list the significantthemes of responsibility at Veikkaus. Transparencyand openness in funds distribution were alsohighlighted as significant responsibility themes.A totalof 150 Veikkaus’ employees answered the survey.
CSR report and annual report 2014 31
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
CSR management and organisationIt is the Executive Team's duty to ensure thatVeikkaus carries out its activities responsibly,mitigating potential harm and acting in the bestinterests of the various beneficiary groups. The SeniorVice President, Communications and CSR, is amember of the Executive Team, and he is in charge ofthe CSR matters at the Executive Team level. TheBoard of Directors handles themes related to CSRmany times a year.
In the spring the Executive Team made a decision tolaunch a special responsibility campaign. It wasdecided that the campaign, realised in the autumnshould centre on the risks related to gaming andtelling about gambling problems. During the yearunder review, the Executive Team also discussed,e.g., the model of responsible customer relations andthe environmental programme, and evaluated thecore issues of CSR.
Promoting CSR and coordinating the related actionsin practice is the responsibility of the CommunityRelations Unit within the CSR Operations. It has twofull-time employees – the CSR Manager and a CSRSpecialist. The unit is run by Vice President,Community Relations and CSR.
The different aspects of CSR are implemented in all ofVeikkaus’ functions and units. CSR forms part ofevery Veikkaus employee's job, in other words, itforms an integral part of all activities. Responsibilityindicators are used as a basis for the remuneration ofall staff.
Ethical Council prEthical Council proovides an evides an exxternalternalperspectivperspectivee
The Ethical Council is an expert advisory bodyappointed by Veikkaus' Board of Directors to providethe Board and executive management with anexternal perspective on the ethical questions relatedto gaming, particularly on the ethics of games andtheir marketing and on issues such as gamblingaddiction.
The Council does not make decisions; instead, itprovides a wider perspective and added value tosupport the management’s decision making.TheCouncil can also make suggestions and issue ethicalstatements concerning practical issues and debatesconcerning gaming.
In 2014, the Ethical Council convened four times. Inits meetings, the Council discussed, e.g., theconceptions and risks associated with Veikkaus’reputation and brand, sports integrity questions, theextensive stakeholder survey Veikkaus conducted,and the responsibility campaign carried out in theautumn.
Veikkaus’ Board of Directors approves the setup ofthe Ethical Council, proposed by the companymanagement, for two years at a time. Editor-in-chiefEmerita Reetta Meriläinen was appointed a newmember of the Council for the term from 2015 to2016. Otherwise the composition remains as itwasbefore, i.e. the Council has a total of ten membersduring the current term. The Council appoints one ofits members to be the Chairman. In the previous termfrom 2013 to 2014, the Council was chaired byProfessor Olli Alho.
CSR report and annual report 2014 32
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
Responsibility assured regularlyAt the end of2014 Veikkaus passed the EuropeanLotteries’(EL) Responsible Gaming Standards interimcertification. The interim certification required in theEL Responsible Gaming Standards assures Veikkaus’actions to promote responsible gaming. This way, wewant to make sure that working for responsibility is acontinuous process and that the shortcomingsdetected in the previous certification are beingremedied. The regular certification of the ELResponsible Gaming Standards that takes placeevery three years will be done in 2015. Theresponsibility actions required to meet this standardwere verified by PricewaterhouseCoopers Oy.
Veikkaus also holds the WorldLotteryAssociation(WLA) Responsibility Certificate. Veikkaus hasreached the highest level 4 (on a scale from 1 to 4),which requires that the company has verified the ELResponsible Gaming Standards, subject to muchstricter requirements, with an external body. Thus,
Veikkaus’ WLAResponsibility Certificate will also beeffective until the end of 2015.
CertificaCertificates guartes guaranantee rtee reliabilityeliability
Veikkaus has been granted the quality andinformation security certificates ISO 9001:2008 andISO/IEC 27001:2005. Their follow-up evaluations willbe performed once a year. Interviews anddocumentation are used to analyse the compliance ofVeikkaus' practices with the standards’ requirements.
In addition to its quality and information securitycertificates, Veikkaus is WLA-SCS:2012 certified. Thissecurity standard is subject to an annual assessment.The standard has evolved, over time, from the gamingindustry's best practices. The WLA-SCS SecurityCertificate is a prerequisite for participating inmultinational games. It helps to maintain theshareholders' and customers' trust in the company.
CSR report and annual report 2014 33
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
Active cooperation to fight crime and fraudGaming has always involved risks, even if it is madesubject to comprehensive and versatile control.Thereare no absolute ways of preventing criminalendeavours, not even in the gaming industry.Veikkaustakes the risks into account both in its own operationsand the operations between the company and itspartners in cooperation, working actively to promoteactions for the prevention of crime and fraud.
Stake distribution is closely supervised and thesporting events that are used as gaming objects aremonitored in order to detect possible abnormalities.Veikkaus' own monitoring and control systems will betriggered by any game sales transactions that deviatesignificantly from the norm, or if there is reason tobelieve that domestic matches have been fixed ormanipulated.
Veikkaus has employed its present model of fraudprevention ever since 2007, applying it first to footballand then to other sports. The fraud prevention modelspecifies possible forms of fraud and suggests waysof detecting and preventing them. Veikkaus hasagreed with the sports federations on limitationsimposed on team members as regards betting on theirown matches. It is the task of the sports federations todeal with these matters with the individualteams andreferees.
InInternaternational etional exxchange ochange of inf infformaormationtion
Veikkaus is actively involved in the operation of ELMS(European Lotteries Monitoring System). ELMSmonitors the activities and exchanges informationbetween European national gaming companiesoperating betting games. The scope of the ELMSoperations will be extended beyond Europe in 2015,and they will be renamed the Global LotteryMonitoringSystem(GELMS) as of 1 June 2015. The GLMS willprovide the member companies with real-time livebetting alarms in addition to the previous pre-matchalarms associated with suspicious marketmovements.
As regards international football betting, gamingcompanies inform each other if they noticeexceptional gaming behaviour during matchesgoverned by UEFA (Union of European FootballAssociation) and FIFA (International Federation ofAssociation Football). UEFA's Betting Fraud DetectionSystem and FIFA's Early Warning System are meansof detecting and minimising fraudulent and criminalactivities in sports gaming. Any suspicious cases arereported to the competent police authorities, whoinvestigate cases of suspected crime.
VVeikkeikkaus is an activaus is an active ee expert operxpert operaattoror
Through their adoption of the Sport Betting Code ofConduct (since 2007), Sport Charter (2012) andSports Integrity Action Plan – the 7-point programme(2013), EL members are committed to fighting crimeand fraud. Veikkaus has been actively involved inpreparing both programmes and is strongly committedto complying with them in all of its activities.
The European Convention Against Match Fixing wassigned in September 2014 in Switzerland inconnection with the meeting of the Sports Ministers ofthe Council of Europe. The convention was signed byfifteen countries, including Finland.Veikkaussupported the project strongly, offering itsexpertise to help with the preparations of theconvention. The convention lays down the actions tobe taken for the protection of sports integrity againstthe manipulation of sporting events. The objective isto prevent match fixing in sports events, as well asinvestigation, and ensuring the sanctions in nationaland cross-border cases. In addition, the aim is toenhance national and international cooperationbetween the authorities, sports organisations, andsports betting operators.
CSR report and annual report 2014 34
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
Strong consumer protection to safeguardcustomers' rightsStrong consumer protection is an important aspect ofwell-run and responsible gaming operations. Itguarantees the customers' legal protection in caseswhere problems arise and customers feel that theyhave been treated unfairly.
The National Police Board monitors the running ofgaming operations in order to guarantee the players'legal protection, to reduce social and health-relatedproblems, and to prevent malpractice and crime.
CusCusttomers’ romers’ requesequests fts for ror rececommendedommendeddecisions frdecisions free oee of charf chargege
According to section 48 of the Lotteries Act, playerscan seek help with the National Police Board inambiguities concerning prize payout. Therecommended decisions are free of charge to theplayers. Veikkaus gave its statements on a total of 60cases (98 in 2013) to the National Police Board. Mostof the statements concerned betting games.
The National Police Board appoints officialsupervisors to supervise the gaming activities. While
performing these duties, the supervisors are officiallyaccountable for their actions. The official supervisorssupervise the compliance of gaming activities with theapproved rules of play, confirm the results of the poolsand betting results, and the number of prizes for eachround. The official supervisors also supervise thedrawing and mixing of lottery tickets and confirm theresult of the draws, unless a Notary Public performsthese tasks on the National Police Board’s approval.
Game sales clerks' rGame sales clerks' reports help teports help toocconontrtrol moneol money launderingy laundering
When a sum spent on games either as a one-offpayment or several interlinked payments amounts toat least EUR 3 000, the player's identity must beverified. In such a case, the game sales clerk files aMoney Laundering Report and delivers it toVeikkaus.In cases where the game has been playedon the Net or using a Veikkaus Card, the data arestored for possible requests for clarification by theauthorities.
CSR report and annual report 2014 35
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
Striving to maintain the joy of gamingFor the overwhelming majority of Finns, gaming is aharmless pastime and enjoyable entertainment.However, it always involves risks that should berecognized. Like any other form of leisure-timeactivities and entertainment, gaming comes with aprice. Although the possibility of winning is a key partof the attraction of games, it should never beconsidered a source of regular income. When the timeand money spent on gaming is in harmony with theplayer's economic situation and use of time, it iseasier to preserve the joy of gaming.
RResponsibility campaign tesponsibility campaign to supporto supportrrececognition oognition of gambling prf gambling problemsoblems
Veikkaus realized a Play responsibly campaign for thefirst time in the autumn of 2014, aiming to boldly anddirectly encourage citizens to recognize possibleproblem gambling and seek help, if necessary. Thecampaign centred on its most prominent part, twoshort films dealing with problem gambling. The filmswere broadcast on many TV channels and the socialmedia. After broadcasting the films on TV, they wereshown at all of the Finnkino cinemas.
We set up a special Play responsibly website for thecampaign. The website provided a comprehensive setof information on the risks of gaming, recognizingproblem gambling, tools for gaming control providedby Veikkaus, bodies offering help, and blogs kept by aformer problem gambler and Veikkaus’ expertemployees. As part of the campaign, we organized aresponsibility chat dealing with problem gambling forthe first time in cooperation with experts from theFinnish Gambling helpline Peluuri. The chat wasfollowed by over 55 000 Finns. In all, it is estimatedthat the campaign has reached over one million Finnsin some way.
The campaign aimed at reaching Finns as widely as
possible, including those that do not suffer fromproblem gambling. We wanted to lower the thresholdof people recognizing gambling problems withthemselves and with their friends and families. Wealso wanted to show that Veikkaus wants to bear itsresponsibility for the drawbacks of gaming. TheResponsibility campaign videos can be seen here andhere. Read more about the campaign.
The Finnish TV channel MTV elected Veikkaus’ video“In the bicycle store” as the Best AdvertisementSeconds of the month in August 2014. TheMarkkinointi & Mainonta journal’s editorial boardranked the same ad among the top fiveadvertisements of 2014.
ScScope oope of gambling prf gambling problemsoblemsininvvesestigatigated thrted through eough exxtensivtensiveepopulapopulation survtion surveeysys
The Finnish gaming system has managed to preventthe harms related to gambling from increasing, eventhough the total number of players and the provisionof games have grown. While an increasingly largeproportion of Finns engage in gaming activities (2007:74%, 2011: 78%), the share of problem gamblers has,in fact, remained unchanged (2007: 3.1%, 2011:2.7%, population surveys by the Ministry of SocialAffairs and Health 2007 and 2011).The National Institute for Health and Welfare (THL),commissioned by the Ministry of Social Affairs andHealth, conducts an extensive population-basedsurvey on gaming every four years. The next surveywill be carried out in 2015.
This gaming survey and the Finnish GamblingHelpline Peluuri are financed by the Finnish licensedgaming organisations: Finland’s Slot MachineAssociation RAY, Fintoto and Veikkaus.
CSR report and annual report 2014 36
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
Restrictions and tools for keeping gaming undercontrolGaming can only remain enjoyable if players can keepit under control. Veikkaus pays special attention to theprevention of social problems by making its gamessubject to restrictions and offering tools for the self-control of gaming.
At the beginning of 2015, Veikkaus revised its agelimit sign, turning it from K18 to 18+. The sign wasalso supplemented with a text saying Playresponsibly.
RResponsibility actions based on laesponsibility actions based on lawwand rand regulaegulationstions
• The age limit for all Veikkaus games is 18 years(Lotteries Act).
• Veikkaus Card is only available to people over 18(Lotteries Act).
• Games are not sold on credit.
• The identity of anyone who registers as a Veikkaus’player on the Internet is verified with the PopulationRegister Centre (Lotteries Act, Money LaunderingAct).
• eInstants, eBingo, Syke, and Pore are subject to adaily limit of EUR 100 (irrespective of winnings).
• Live Betting is subject to a daily limit of EUR 300(irrespective of winnings).
• Customers can only register one game account
• Money transfers to the game accounts cannot bemade at night (from midnight to 6:00 a.m.).
• Game accounts are subject to a maximum balanceof EUR 3,000.
OpOptional ttional tools fools for gaming cor gaming conontrtrolol• Players can close their game accounts for the rest
of the day, week, month, or year (during this period,the game accounts cannot be used for playing ortransferring money).
• Players can set their own personal limits in euros fora period of one day, a week, or a month.
• Players have access to a summary of their gameaccount history showing all the games playedduring the past month, detailing all the losses, winsand payout percentages.
• The Gaming Habits Test, which players can use toevaluate their own gaming behaviour.
• A website (in Finnish) for keeping gaming undercontrol at veikkaus.fi/pelaavastuullisesti.
PlaPlay ry responsibly section oesponsibly section offffersersininfformaormation and tipstion and tips
Veikkaus.fi website contains a Play responsiblysection, where we have gathered many-sidedinformation on how to keep gaming under control andmaintain the joy of gaming. The section offers, e.g.,tools, tips, information on the odds of winning, and theGame Test, which the players can take to receiveinformation on their gaming behaviour.
RResponsibly in all channelsesponsibly in all channels
Information on how gaming can be kept under controlis available at all the locations where Veikkaus gamesare sold. The points of sale make available the Joy ofgaming responsibly brochure and info leaflets aboutthe Finnish Gambling helpline Peluuri.
CSR report and annual report 2014 37
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
Toll-free Peluuri helpline helps problem gamblersand their families and friendsThe Finnish Gambling helpline Peluuri celebrated itstenth anniversary in 2014. Its mission is to preventand reduce the social and health-related harmscaused by gambling in a comprehensive manner.Peluuri’s services are offered nationwide and they arefree of charge.
Peluuri provides support, guidance, and counselling. Itoffers information on problem gambling and itsprevention, and treatment. Peluuri also providessupport based on self-help and peer support.
Help aHelp avvailable oailable ovver the phone and oner the phone and onthe Nethe Nett
Peluuri’s services include the helpline, Internetcounselling, a data bank, text message services,discussion forums, and the Time to Fold self-helpprogramme on the web.
In 2014 the Peluuri helpline answered a total of 2,333calls, of which 1,187 concerned problem gambling.Out of the calls about problem gambling, 67% camefrom the players, 29% from the players’ families andfriends, and the remaining 4% from people facinggambling problems in their work, as well as peopletaking an interest in problem gambling. Veikkausgames were the principal cause of gambling problemsfor about 11% of the callers.
Peluuri’s website offers a comprehensive set ofinformation on problem gambling, and theeCounselling, where people can ask about problemgambling anonymously and free of charge. In 2014Peluuri’s website had over 127,000 visits, and the
eCounselling answered 120 questions related toproblem gambling. The Time to Fold web therapyprogramme was taken by 145 people.
PPeluuri’eluuri’s tens tenth annivth anniversary a yersary a year oear offrreefforms and campaignsorms and campaigns
In 2014 Peluuri celebrated the tenth anniversary of itsoperations. At the beginning of the year, Peluuriadopted a new motto: “Peluuri helps, when gamblingis the problem”. Peluuri’s visual image, website, andbrochure were updated at the same time. InSeptember Peluuri organised an open event forcitizens telling about Peluuri’s operations.
The figurehead of the anniversary was badmintonplayer Ville Lång, who had previously told about hisown challenges in keeping gaming under control.Lång also played the main role in Peluuri’s campaignfilm, which was shared actively in the social mediaduring the celebratory year. The film was broadcast inAugust in connection with a Lotto draw and later in theautumn on the TV channels of the FinnishBroadcasting Corporation YLE.
Peluuri's services are provided by the A-ClinicFoundation and the Finnish Blue Ribbon, and it worksas part of the Gambling Clinic, which is an umbrellaservice system for national, municipal and variousorganisational operators in the field. Peluuri’soperations are financed by the Finnish nationalgaming companies Veikkaus, Finland’s Slot MachineAssociation RAY, and Fintoto.
CSR report and annual report 2014 38
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
A land of winners: the players of Veikkaus gamesmake the lives of every one of us betterMany unforgettable experiences in arts and sportswould never be experienced without the efficient useof the euros lost by players on Veikkaus games. Theproceeds generated by Veikkaus also play a centralrole in the funding of youth work and science.Veikkaus funds ensure that we can invest in ourcommon good future.
The players of Veikkaus games generate joy to allFinns while playing. Over EUR 500 million makes somany things possible that every Finn, irrespective oftheir place of residence and age, are winners ofVeikkaus games. While Veikkaus games are onlyaccessible to adults, the proceeds are enjoyed byevery one of us.
Veikkaus funds are distributed to Finnish culture inaccordance with the Funds Distribution Act passed byParliament. According to the Act, 38.5 percent of thefunds go to arts, 25.0 percent to sports, 17.5 percentto science, and 9.0 percent to youth work. In addition,the budget contains an annual allocation of 10.0percent to be distributed to the above-mentionedbeneficiaries as determined separately.
Veikkaus funds are the primary source of the Ministryof Education and Culture's funding of sports and youthwork. They also account for about a half of the totalfunds allocated to the arts and a quarter of the fundsto science.
Share of Veikkaus funds out of the total funds distributed by the Ministry of Culture and Education in 2014(based on preliminary financial statements)
EUR million Total funds Veikkaus funds %
Art 465.7 50.9 %
Sports 187.4 78.6 %
Science 382.6 26.8 %
Youth work 74.4 71.0 %
Total 1,110.0 48.6 %
Veikkaus’ proceeds make up the majority of the totalfunding by the Ministry of Education and Culture tosports and youth work. Veikkaus funds represent
around half of the funding allocated to the arts andmore than a third of science funding.
Veikkaus profit funds distributed by the Ministry of Education and Culture in 2010–2014 (based onpreliminary financial statements)
EUR million 2014 Share, % 2013 2012 2011 2010
Art 237.0 43.9 % 224.6 222.4 220.7 197,9
Sports 147.3 27.3 % 145.3 145.0 143.3 128,5
Science 102.4 19.0 % 102.2 101.2 100.3 90,0
Youth work 52.8 9.8 % 52.4 51.9 51.6 46,3
Total 539.5 100.0 % 524.5 520.4 515.8 462.7
More information on Veikkaus funds and beneficiaries
CSR report and annual report 2014 39
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
Tax footprintTax footprint refers to tax revenue and tax-likepayments accrued to society as a result of acompany’s business activities. In addition to the directand indirect taxes, Veikkaus’ tax footprint covers tax-like payments related to the personnel and taxwithheld from salaries.
As a state-owned company Veikkaus takes care of itsobligations related to taxation in an appropriate andtransparent manner. In accordance with the IncomeTax Act, Veikkaus is not liable to pay tax on its profitbut returns its entire profit to the Ministry of Educationand Culture. However, Veikkaus does pay Lottery Taxbased on the game margin incurred by its gamingactivities. Since Veikkaus is not liable to pay VAT, andtherefore cannot deduct the VAT included in itspurchases of goods and services, the VAT paidburdens the company’s financial result in full.
Veikkaus’ tax footprint amounted to a total of EUR138.9 million (+3.7%) in 2014. Taxes representedEUR 126.9 million of this; the tax-like paymentsrelated to the personnel were EUR 5.0 million, and thetax withheld from the employees’ salaries totalledEUR 7.0 million.
Veikkaus' biggest tax items are the Lottery Tax, EUR104.2 million and VAT, EUR 22.5 million. Of thisamount, Veikkaus paid to the State a total of EUR 5.0million of VAT associated with EU procurement. Inaddition, we pay real estate tax and transfer tax.Veikkaus pays all of its taxes to Finland. We have notpaid any taxes, profit, dividends, interest, or groupsubsidies abroad.
TTax fax fooootprintprintt
EUR million (change in %, cf. 2013)
CSR report and annual report 2014 40
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
The path of the Veikkaus euro
CSR report and annual report 2014 41
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
High motivationVeikkaus seeks to be an excellent workplace thatoffers its personnel a challenging and meaningfulworking environment and creates an opportunity forongoing personal development. An excellentworkplace operates efficiently, continually renewsitself, and offers a competitive salary and bonuses.Veikkaus wants to be an attractive and esteemedemployer. An efficient, productive organisation and asatisfied, motivated and competent staff play animportant role in achieving Veikkaus’ dream (vision).
In a continuously changing business environment, anorganisation needs to be nimble and allocate itsresources efficiently. Organisational efficiency isannually assessed from the point of view of vision andstrategy achievement, personnel surveys, and ourthree result perspectives: financial result, future, andfeeling.
VVeikkeikkaus’ emploaus’ employyees saees satisfied withtisfied withtheir emplotheir employyerer
We carried out a personnel survey at Veikkaus in theearly autumn. The response rate was up to 88percent. The overall grade was good (4.08 on a scaleof 1 to 5), showing positive development (+0.15 overthe year 2013).
According to the Personnel survey, Veikkaus’ internalemployer image is excellent and Veikkaus’ employeesare excited about their work: the total motivation indexwent up to 4.27 (+0.17). Of the respondents, 79percent agreed totally or almost totally with thestatement “I am excited about my work”. Of therespondents, 88 percent said they were motivated tomake efforts to achieve common goals. Veikkaus’employees are also still satisfied with their employer:86 percent of them would recommend Veikkaus as anemployer (+0.13).
When compared with last year’s survey, theemployees’ satisfaction was improved most asregards how they felt the issues they had raised hadbeen taken into account in decision-making (average3.98, +0.25). The goals and objectives of the work
were experienced as clear, and the grade for thisindicator continued to rise (average 4.39, +0.09).Interaction with supervisors was also rated high(average 4.36, +0.10). The weakest grades weregiven to the employees’ career developmentopportunities (average 3.63). In their answers to theopen-ended questions, Veikkaus' employees calledfor, e.g., clearer guidelines and shared goal-orientation to reach a common direction.
CourCourage tage to deo devvelopelop
Based on the results of the 2013 Personnel survey,the following company-level development objectiveshad been identified: improving the communication andcooperation throughout the company, clarity ofcommon goals, and development at Veikkaus. Inorder to improve the first one of these, we adopted,e.g., a new social intranet offering a chance foreverybody to publish contents, and CEO lunches toimprove interaction between employees andmanagement. The prerequisites for clarifying thecommon goals were reinforced in June, as thecompany strategy was revised in June.
We decided to continue towards 2015 with largely thesame themes as before, as they are still underdevelopment. We are seeking to clarify a commondirection in 2015, e.g., by supporting supervisors intheir work, planning the operations in a more clear-cutway, and linking the strategy more strongly toeveryday work. The new strategy encourages thepersonnel to boldly work for development. Thisobjective is supported, e.g., by reinforcing a positiveattitude towards change, promoting equalopportunities and cooperation, and turning the cultureof decision making more nimble. We seek to improvethe career development opportunities, e.g., bysupporting the employees’ strategic knowhow and jobrotation.
In the future we will measure the employees' workingzeal every quarter of a year, using a motivation index.This will help us to take actions for improvement anytime throughout the year.
CSR report and annual report 2014 42
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
Management culture encourages to developmentand cooperationAn expert forum named “Thinking together”, convenedby the CEO, met three times during the year underreview. The objective of the forum is to encourageopen discussion and information exchange, and tothink about Veikkaus’ strategy and future direction.The forum has some fifty expert members who aretasked with taking the core messages of the meetingsto their respective working communities. The forumwill continue its operations in 2015.
Veikkaus’ personnel are constantly challenged to thinkabout how the objectives and actions support theimplementation of the strategy in everyday work.According to the strategy updated in 2014, Veikkauswants to be a responsible profit maker bringing joy tothe lives of all Finns. The focus areas of the strategymanifest themselves in the personal targets of eachVeikkaus’ employee in, e.g., the planning ofoperations, in which the members of the teamsparticipate on their supervisors’ request.
CornersCornersttones oones of Vf Veikkeikkaus Culturaus Culturee
Veikkaus' management is essentially based onseeking to achieve results and making progress,pursuing smooth cooperation and an efficientorganization, as well as creating an atmosphere thatis open to change, motivating, and appreciative.These themes are also reflected in the cornerstonesof the corporate culture, which are innovation, results,and interaction.
The cornerstones and succeeding in them aremeasured through management and expertevaluations, as well as through the performancereviews that are carried out for every Veikkaus’employee at the beginning of the year. In order thatVeikkaus’ dream, i.e. vision could come true, everyone of us needs to reach outstanding performance.The supervisors play a central role in turning thestrategy into everyday goals and work, as well as inmotivating the teams to perform even better.
As regards the cornerstone of innovation, Veikkaus’personnel and management need to have a special
ability to define clear and challenging objectives andthe supervisors need to have the courage to ask foroutstanding performance. At the end of the year, thesupervisors went through a “360 managementfeedback” process for the assessment of theirpersonal leadership and cooperation behaviour aspart of the strategy-based development of Veikkaus’management. The objective was to recognise thesupervisors’ strengths and their areas to be improved,as well as to provide the supervisors with individualdevelopment plans.
Mentoring and coaching were continued at Veikkaus,and we also invested in tailored training, instead oflarge mass training events. Veikkaus was a companymember of the DiViA forum of Aalto UniversityExecutive Education (Aalto EE), dealing with digitalbusiness, marketing, and customer relationsmanagement. Thanks to our membership of theforum, Veikkaus’ employees were given unlimitedaccess to the seminars.
The cornerstone of interaction can be seen in manydifferent things in Veikkaus. Team members areoffered the chance to participate in development anddecision-making. Giving feedback, raising eachother’s spirits, and mutual support are encouraged. Ineveryday management, interaction occurs in regularweekly meetings, blogs on the intranet, participatoryworkshops, and info and discussion events. Duringthe year under review, the revamped intranet with itsnew social media features has added to the chancesto interact for not only the expert employees but alsofor the supervisors and the company management.
Achieving the cornerstone of results requires that thesupervisors know how to improve the team members’ability to bear responsibility. The supervisors shouldalso know how to develop operating models andmake sure that the members of their team are able todevelop their skills. These skills are reinforced ineveryday work and the performance reviews, as wellas the objectives and performance appraisaldiscussions.
CSR report and annual report 2014 43
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
Towards a stronger expert organisationDeveloping the employees’ skills is a part of Veikkaus’strategy. In skills development, we focus on strategy-based improvement of the employees’ skills. The planfor skills development is based on the strategy andoperating plans, as well as the needs that have arisenin objectives and performance appraisal discussions.
Learning at work, internal and external training,knowledge sharing, and job rotation offer chances foreverybody to develop their skills.
During the objectives and performance appraisaldiscussions, the supervisors carry out an annualperformance review of their team members. Based onthe performance review, the employees may begranted raises to the employee-specific componentsof their salary.
As Veikkaus’ strategy was updated, the objectivesand performance appraisal discussion process wasalso revised.
KnoKnowledge sharing and tailorwledge sharing and tailorededtrtrainingaining
In 2014 we continued to reinforce our businessknowhow and develop the Veikkaus Culture. We wantto develop Veikkaus into an expert organisation in aneven more target-oriented manner, where results and
responsibility join participatory management. Theactions to promote strategic and professional skillsare targeted to the groups that need them inparticular.
Expert work and cooperation focus on a proactivesharing of the employees’ knowhow and views.During the year under review, this has materialised asinternal training events, organised by Veikkaus’ ownexpert employees. Veikkaus’ personnel also had thechance to attend inspiring lectures given byrepresentatives of Veikkaus’ beneficiaries, includingFinnish front row professionals, such as the hugelypopular rap artist Elastinen.
In 2014 Veikkaus reintroduced its Talent programme,which is part of successor planning at Veikkaus andone of the steps on Veikkaus’ way to becoming theworld’s best gaming company.
Veikkaus’ employees are encouraged to develop theirprofessional skills actively and to acquire extensiveknowledge about Veikkaus and gaming from the veryinitiation of new employees. We also support thosewho wish to study and work by granting local, salariedstudy leaves and a bonus upon graduation.
CSR report and annual report 2014 44
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
Good performance rewardedVeikkaus' salary and incentive scheme encouragesemployees to excellent performance. The schemecovers all personnel and consists of four components:task-specific pay, employee-specific pay, specialbonuses and performance incentives.
The task-specific component is based on the HAYclassification.
The employee-specific component is influenced bythe employee's competence and performance and, inthe case of supervisors, successful supervisory work.Whilst evaluating competence and performance,special attention is paid to work management,performance, way of acting, ability to adopt new ideasand change, and interactive skills.
Special bonuses are granted on the basis of good
one-off performances. As for the performanceincentives, they are granted according to theachievement of the company's strategic objectives.
Performance incentive criteria 2014
• Performing the company’s special task: responsiblegaming and CSR reputation
• Efficiency and return capacity: return to theshareholder
• Achievement of objectives in the operating plans
Veikkaus also grants recognitions for goodperformance. Other recognitions include celebratingbirthdays, service milestones, and otheranniversaries.
CSR report and annual report 2014 45
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
Terms of employment jointly agreedOf Veikkaus personnel, 43.1 per cent are members ofVeikkauksen Henkilöstö ry (Veikkaus StaffAssociation), a trade union under Trade Union PRO.Veikkaus is a member of the Service SectorEmployers' Association PALTA, whose umbrellaorganisation is the Confederation of FinnishIndustries.
Veikkaus' collective labour agreement is company-specific and is approved centrally at union level.Veikkaus also has the option of signing localagreements. The current collective labour agreementwill expire on 30 November 2016. The collective
labour agreement covers all personnel, with theexception of the company management.
Dialogue between the employer and the employeestakes place on the Industrial Safety Committee andthe Codetermination Committee, which convene atregular intervals. Matters discussed atCodetermination Committee meetings in 2014included the use of external workforce, and theorganisational change.
In all changes concerning the organisation andpersonnel, Veikkaus complies with Finnish legislationon codetermination.
CSR report and annual report 2014 46
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
Uniform operating culture enhances equalopportunitiesAt Veikkaus, equality and equal opportunities areunderstood as a broad concept, where respect forindividuals is a key issue. Nobody is treated differentlybecause of their gender, age, religion, race or politicalviews. The employees are treated equally incompliance with the Act on Equality and our ownEqual Opportunities Plan and Code of Conduct.
The implementation of the Equal Opportunities Plan isassessed annually by, e.g., paying attention to thepersonnel's gender distribution, pay differences, andthe number of women in company management andsupervisor positions.
It is key to the implementation of equal opportunitiesthat a person's competence should decide his or herposition and pay. In recruitments, the applicant whohas the best skills and who is best suited to theVeikkaus Culture is chosen. When recruiting fromamongst equally qualified and competent applicants,positive discrimination will be applied and theapplicant representing the minority gender will berecruited.
Employees holding positions with equal requirementstandards will be entitled to the same salary,
irrespective of gender. Salaries are determined on thebasis of personal performance and the task-specificHAY classification.
Women represent 51 percent of Veikkaus employeesand 41 percent of supervisors. In 2014, the ExecutiveTeam had one female member. There are four femalemembers on Veikkaus' Board of Directors and six onthe Supervisory Board.
The Equal Opportunities Plan is updated regularly.Prior to an update, a survey is conducted to identifyany perceived flaws in equality issues. The Personnelsurvey showed that 67 per cent of the respondentsagreed or almost agreed that Veikkaus employees aretreated equally regardless of their age and gender. In2013, 68 percent of the respondents felt this way. Oneof the core development targets recorded in the EqualOpportunities Plan is the development of a uniformVeikkaus Culture.
In the next few years, a couple of employees will retirefrom Veikkaus each year. Veikkaus has prepared forthis, taking steps to ensure the transfer of silentknowledge from retiring employees.
CSR report and annual report 2014 47
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
Investing in employees’ wellbeingVeikkaus invests in its employees' wellbeing in manyways. Our occupational healthcare aims at enhancingand maintaining the personnel's health and workingcapacity.
Veikkaus' occupational healthcare services arecomprehensive: in addition to statutory health checksand examinations, our personnel are entitled toergonomics checkups and, after a four-month trialperiod, to physiotherapy and specialist consultations.Veikkaus also reimburses a percentage of theemployees' pharmaceutical, dental, and spectaclecosts. During the year under review, the wholepersonnel were entitled to free flu vaccination. In 2014we carried out a bidding process covering theoccupational healthcare services, which led us tochange the service provider.
Veikkaus’ entire personnel are represented in theoccupational health and safety activities. During theyear under review, the Industrial Safety Committeehandled especially questions related to the launch ofnighttime work.
Early inEarly intervtervenention and imprtion and improoving oving offwworking capacityorking capacity
During the year under review, we prepared amanagement plan for occupational wellbeing andworking capacity. The plan’s core goals includeensuring the employees’ strategic knowhow, creatinga uniform operating culture, harmonising supervisor
activities, and securing the employees’ workingcapacity throughout the different stages of theiremployment.
Veikkaus employs an early intervention model.Supervisors keep track of absences and, in the caseof recurrent absenteeism, reasons for the employee'sabsence together with possible treatment methodsare considered in a joint discussion with theemployee, his or her supervisor, and representativesof HR and occupational healthcare staff. Tailoredmeasures are used to support the working communityand supervisors, if necessary. The Industrial SafetyCommittee monitors the development of sicknessabsences on an annual basis.
Other measures to promote employee wellbeinginclude a daily breakfast offered to employees, flexibleworking hours, shorter workdays in the summer, thecompany canteen at the head office and luncheonvouchers in the regional offices.
Veikkaus supports its employees' leisure-timeactivities in a range of ways: leisure vouchers, guidedsports classes, a range of leisure time activities; thecompany library, gym, and swimming pool at headoffice; sports vouchers for the personnel at theregional offices, and Veikkaus' own recreationalfacilities in Kirkkonummi, Vierumäki (southern Finland)and Saariselkä (Lapland). Veikkaus also sponsorsemployee teams' participation in sporting events.
CSR report and annual report 2014 48
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
Rules and guidelines on procurement andrepresentation available to everyoneThe rules and guidelines on procurement andrepresentation in Veikkaus are available to allemployees.
It is the responsibility of Veikkaus' procurementfunction to create shared practices and to ensure thatthese are followed, and to build stronger internalprocurement competence. The objective of thesemeasures is to attract high-quality goods and servicessuppliers and to seek cost savings and processefficiency.
The procurement function’s financial responsibilitycentres on the organization of bidding processes andthe overall financial comparison of the suppliers’ bids.The procurement and contracting processes wererevised at the beginning of 2014 by making the role ofthose responsible for procurement bigger from thevery preparation of the contracts. The revision aimedat making the procurement processes more efficientand using the company’s internal knowhow.
All representation at Veikkaus is associated with thecompany's business. The purpose of representation isto support business goals, favourable developmentsin the business environment and/or cooperation withbeneficiaries. All company events have a contentagenda, aimed at building better operating conditionsand fostering a positive corporate image.Representation is always transparent and must staywithin reasonable limits.
Where government officials are concerned, theguidelines of the Ministry of Finance on hospitality,benefits and gifts (23 August 2010) are observed.Invoices incurred from representation and hospitalitymust be accompanied by complete guest and hostlists, information on the company or organisation theguests represent, and the purpose and programme ofthe event.
Accepting hospitality during an ongoing biddingprocess from an operator taking part in the process isstrictly prohibited.
All Veikkaus' employees must avoid actions orfinancial connections that may conflict with their workresponsibilities. Seeking personal gain, such asdiscounts through business relationships, isprohibited.
Veikkaus and its employees may not directly orindirectly give or receive benefits that may beinterpreted as bribes. Accepting hospitality as aprivate person from a third party outside work doesnot render such conduct more acceptable.
As a rule, Veikkaus' premises are only used forbusiness entertainment or company functions. Givingand accepting monetary gifts is always strictlyprohibited.
CSR report and annual report 2014 49
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
Personnel key figuresKey figure 2014 2013 2012
Personnel 1)
Employees 31 Dec, number 332 333 320
Average number of employees 333 332 325
Permanent, % 95 95 95
Fixed-term, % 5 5 5
Full-time, % 88 89 90
Part-time, % 12 11 10
Women, % 51 52 54
Men, % 49 48 46
Women in management positions (Executive Team) % 17 14 23
Women supervisors (%) 41 45 48
Aged under 30, % 4 6 4
Aged 30–49, % 72 72 75
Aged 50+, % 24 22 21
Breakdown of personnel by type and coverage of operations 2)
Executive management 6 7 13
Supervisors 43 46 37
Experts/employees 283 280 270
Average age of employees 43.1 42.8 42.9
Average monthly salary 3) 4,192 4,104 4,099
Bonus payments, management, EUR 259,762.37 131,312.74 312,134.13
Bonus payments, other employees, EUR 1,188,658.27 673,872.49 670,876.25
Employees covered by collective labour agreements, % 96 96 96
Employees who are members of the staff associationVeikkauksen henkilöstö ry, %
43.1 42.3 43.1
Employee turnover
Employee turnover, incoming, % 6.0 9.9 5.9
Employee turnover, departing, % 6.3 6.0 7.2
Number of employees who left the company 21 20 23
Average duration of employment contracts, years 11.8 11.7 11.9
Occupational health
Number of work-related accidents 4) 1 1 4
Sickness absence rate, % 5) 2.72 3.35 3.75
Personnel training 6)
CSR report and annual report 2014 50
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
Training days / employee 0.78 1.74 1.17
Employees who attend regular performance appraisaldiscussions, %
100 100 100
Educational background of personnel, % 7)
Comprehensive school 8.8 9.6 9.7
Secondary school 20.4 20.7 21.8
Lower level tertiary education 17.7 18.0 19.1
Lower university degree 23.9 24.1 21.8
Higher university degree 28.9 27.3 25.5
Information unavailable 0.3 0.3 2.1
1) The personnel figures do not include short-term temporary employees or summer employees.
2) Breakdown of the number of employees by the type of operations has been reported since 2012.
3) Does not include performance incentives for employees or salaries and performance incentives for ExecutiveTeam members.
4) Accidents resulting in at least one day of sickness absence.
5) The occupational health services also cover short-term temporary employees and summer employees.
6) Training and performance appraisal discussions also cover temporary employees
7) Educational background reported since 2012.
CSR report and annual report 2014 51
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
Reducing energy consumption a key objectiveConsidering the environment is a natural part ofVeikkaus’ daily actions. Our persistent environmentalwork of several years has made the environmentalobjectives part of our basic operations.
Our previous environmental objective was finalized in2014. Veikkaus managed to reduce its carbon dioxideemissions by 46 percent from the 2009 level by theend of 2013.
The new environmental programme for the years2015–2017 consists of three main levels: reducingconsumption, advancing energy-efficient solutions inthe properties and the ICT choices, and raising thepersonnel’s environmental awareness. The mainobjective is to reduce Veikkaus’ total energyconsumption by fifteen percent from the 2014 level bythe end of 2017. Veikkaus has signed the Businessand Industry Energy Efficiency Agreement. Thisinvolves a commitment to increase the efficiency ofVeikkaus' non-production-related energy use at thehead office by 9 percent from the 2005 level, by 2016.
In 2014 Veikkaus’ total energy consumption amountedto 10,900 MWh. This figure contains the energyconsumption at Veikkaus’ offices, as well as theconsumption by the game terminals, routers, light-upads, and digital ads at the POS.
EnEnvirvironmenonmental impacts mostal impacts mostly frtly fromomenerenergy cgy consumponsumptiontion
Veikkaus' most significant environmental impacts arecaused by the electricity consumption of gameterminals, servers and telecommunications, as well asthe cooling required by the ICT equipment. Emissionsfrom electricity consumption and district heatingaccount for around a fourth of Veikkaus' totalemissions, and are primarily generated at the headoffice in Vantaa. Other emissions are generated bytravel, purchased goods deliveries, outsourcedmaintenance traffic, waste and office paper, and fuelconsumption on properties and vehicles owned byVeikkaus.
We have attempted to reduce the environmentalimpacts caused by travelling by, e.g., imposing stricteremission limits on company cars, obliging employees
using company cars to take training courses onecological driving, and compensating for theemissions incurred by work-related flights.
In addition to our head office in Vantaa, Veikkaus hassales offices around the country in Tampere (southernFinland), Vaasa (western Finland), Turku (south-western Finland), Kuopio (eastern Finland) and Oulu(northern Finland). Veikkaus also has conferencepremises in the city centre of Helsinki and at theVierumäki Sports Institute, and recreational facilitiesfor personnel in Kirkkonummi and in Saariselkä. Mostof the properties’ energy consumption and waste aregenerated by the head office in Vantaa.
RRececoovvering wering wasaste generte generaated ated at thet thehead ohead officfficee
Sorting waste is an established part of Veikkaus'activities. The waste recovery rate reached 99 percentin 2014 (90% in 2013). Since the new waste-to-energy plant was opened, even the mixed wastegenerated at Veikkaus’ head office has beenreutilized. The total waste amount increased from theprevious year, going up to 145.69 tonnes. (117.4 in2013). The increase was due to the constructionwaste caused by the reparation of the air conditioningengine room that was initiated in 2014.
WWasaste generte generaated ated at point points ots of salef sale
Gaming at the POS generates waste in the form ofplayslips, instant tickets, receipt rolls of gameterminals, and campaign material. All the materialdelivered to the POS by Veikkaus, including thecardboard used for instant tickets, is recyclable. Inaddition, the plastics are suitable for incineration. Forsecurity reasons, any instant tickets returned fromretail outlets are shredded.
The points of sale are given regular guidance onappropriate material sorting, through various gamesales clerks’ channels. Veikkaus aims to reduce itscampaign material deliveries to the POS by tenpercent by the year 2017.
Veikkaus' instants are transported from Canada toFinland mainly by sea, while instant tickets shipped
CSR report and annual report 2014 52
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
from England are transported by truck and ferry. Othertransportations are realised as postage and roadtransport.
PPersonnel’ersonnel’s Ecs Ecological Tological Team ceam celebrelebraatedtedits tenits tenth annivth anniversaryersary
Veikkaus’ head office and the regional office inTampere belong to the WWF’s Green Office system.
We have an active Ecological Team at Veikkaus' headoffice, set up by the employees in 2004 and taskedwith following the environmental trends andenvironmental actions undertaken in the company, aswell as sharing knowledge to the rest of thepersonnel. The Ecological Team acts as thecompany’s Green Office team.
CSR report and annual report 2014 53
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
GRI TableGRI Content Included Links Remarks
1. Strategy and analysis
1.1 CEO’s review Yes CEO’s review
1.2 Key impacts, risks, and opportunities Yes Strategy
ResponsibleOperator
Risk management
Future outlook
2014 and 2015objectives
2. Description of the organisation
2.1 Name of organisation Yes Accountingprinciples
2.2 Key products, services, and trademarks Yes Games
2.3 Operatiivinen rakenne Yes Organisation
2.4 Location of head office Yes Environmentalresponsibility
2.5 Geographic location of operations Yes Environmentalresponsibility
Veikkaus operates in Finland
2.6 Ownership and legal form of theorganisation
Yes Corporategovernance 2014
2.7 Description of the markets
2.8 Scope of the organisation's operations Yes Key figures
1. Turnover bygames and gamegroups
2.9 Significant changes in the size, structureor ownership during the reporting period
Yes Board of Directors’Report 2014
2.10 Awards received in the reporting period Yes Preventing problemgambling
Veikkaus’ advertisement film onproblem gambling was awardedtwo prizes in 2014.
3. Reporting Principles
Description of the report
3.1 Reporting period Yes Content andboundary of thereport
3.2 Publication of the previous report Yes Content andboundary of thereport
CSR report and annual report 2014 54
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
3.3 Reporting frequency Yes Content andboundary of thereport
3.4 Contact information Yes Content andboundary of thereport
Content and scope of report
3.5 Defining the content of the report(materiality, topic priority andstakeholders using the report)
Yes Content andboundary of thereport
3.6 Scope and coverage of the report Yes Content andboundary of thereport
3.7 Special limitations on the scope orcoverage of the report
Yes Content andboundary of thereport
3.8 Principles applied when reporting jointventures, subsidiaries, leased facilitiesand outsourced operations, and thecomparability of information
Yes Content andboundary of thereport
3.9 Measurement and accounting principles Yes Content andboundary of thereport
3.10 Explanation of re-statements Yes Content andboundary of thereport
3.11 Significant changes in the scope orcoverage of the report or inmeasurement methods
Yes Content andboundary of thereport
GRI content index
3.12 GRI content index Yes GRI table
Assurance
3.13 Principles and practices of externalassurance
Yes Verifiedresponsiblility
GRI table
4. Governance, commitments andinteraction
Governance
4.1 Governance structure of the organisation Yes Corporategovernance review2014
Governing Bodies
4.2 Position of the Chairman of the Board Yes Governing Bodies
4.3 Independence of the Board members Yes Governing Bodies
4.4 Mechanisms for shareholders andemployees to provide
Yes Governing Bodies
CSR report and annual report 2014 55
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
recommendations or direction to thehighest governance body
4.5 Impact of organisation's performance oncompensation for the executives and theBoard of Directors
Yes Governing Bodies
4.6 Processes for avoiding conflicts ofinterest in Board work
Yes CorporateGovernance Codeand deviations
Veikkaus complies with theFinnish Corporate GovernanceCode for listed companies in all ofits operations.
4.7 Processes for determining Boardmembers' expertise in strategicmanagement and corporate socialresponsibility
Yes CorporateGovernance Codeand deviations
Veikkaus complies with theFinnish Corporate GovernanceCode for listed companies in all ofits operations.
Board of Directors
4.8 Mission, values and ethical principles Yes Veikkaus2014-2015
Responsibilityprinciples
4.9 Procedures of the Board for overseeingmanagement of CSR performance,including risk management
Yes Monitoring
4.10 Board's self-evaluation process Yes Governing bodies
External commitments
4.11 Application of the prudence concept Yes Risk management
4.12 Commitment to external initiatives Yes Environmentalresponsibility
Security andreliability
4.13 Memberships of organisations,associations, and lobbying organisations
Yes Stakeholdercooperation
Stakeholder Engagement
4.14 The organisation's stakeholders Yes Stakeholdercooperation
4.15 Identification and selection ofstakeholders
Yes Stakeholdercooperation
4.16 Approaches to stakeholder engagement Yes Stakeholdercooperation
4.17 Key topics and concerns raised throughstakeholder engagement
Yes Stakeholdercooperation
Responsibilityprinciples
Personnel
Financial performance indicators
Management approach to financialresponsibility
Yes 2014 and 2015objectives
Risk management
CSR report and annual report 2014 56
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
Strategy
Financial performance
EC1* Economic Value Added (EVA) generatedand distributed to stakeholders
Partly The path of theVeikkaus euro
Profit distributed toFinns
Tax footprint
EC2* Financial implications, risks andopportunities associated with climatechange
No
EC3* Coverage of defined benefit planobligations
Partly 17. Liabilities fromemployee benefits
EC4* Government subsidies Yes No government subsidies werereceived during the reportingperiod.
Markets
EC5 Entry level wage compared to localminimum wage
No
EC6* Policy and practices regarding localsuppliers and the proportion of localsuppliers
No
EC7* Local hiring procedures and proportionof local senior management
No
Indirect economic impacts
EC8* Investment infrastructure and serviceprocurement for public benefit
No
EC9 Indirect economic impacts Yes Profit distributed toFinns
Environmental performance indicators
Management approach toenvironmental responsibility
Yes Environmentalresponsibility
CSR managementand organisation
2014 and 2015objectives
Materials
EN1* Materials used Partly Environmentalresponsibility
EN2* Recycled materials used No
Energy
EN3* Direct energy consumption No
EN4* Indirect energy consumption Partly Environmentalresponsibility
CSR report and annual report 2014 57
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
EN5 Savings from energy conservation andenergy efficiency
No
EN6 Initiatives and actions to develop energy-efficient or renewable energy basedproducts and services
No
EN7 Initiatives to reduce indirect energyconsumption and the reductionsachieved
Partly Environmentalresponsibility
Water
EN8* Water intake No
EN9 Water sources significantly affected bythe organisation's water consumption
No
EN10 Water recycling and reuse No
Biodiversity
EN11* Land owned, leased or managed by thecompany in areas of high biodiversity orin protected areas
Yes Veikkaus does not have landholdings in areas of highbiodiversity or protected areas.
EN12* Significant impact of activities onprotected areas or areas of highbiodiversity
No
EN13 Protected or restored habitats No
EN14 Strategies, actions and plans related tobiodiversity
No
EN15 Endangered species in areas affected byoperations
No
Emissions, effluents and waste
EN16* Total direct and indirect greenhouse gasemissions
No
EN17* Other significant indirect greenhouse gasemissions
No
EN18 Initiatives and actions to reducegreenhouse gas emissions
Partly Environmentalresponsibility
EN19* Emissions of ozone-depletingsubstances
No
EN20* Nitrogen and sulphur oxides and othersignificant emissions by type
No
EN21* Effluents and waste water by type No
EN22* Total amount of waste by type anddisposal method
No
EN23* Total number and volume of significantchemical, oil and fuel spills
Yes Ei vuotoja raportointikaudella.
EN24 Volume of transported, imported,exported, or treated hazardous waste,and the proportion of hazardous wastetransported across the border
No
CSR report and annual report 2014 58
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
EN25 Water bodies affected by theorganisation's effluents
No
Products and services
EN26* Actions to mitigate the environmentalimpacts of products and services
Partly Environmentalresponsibility
EN27* Proportion of products and theirpackaging materials recovered andrecycled of all products sold, by category
Partly Environmentalresponsibility
Compliance
EN28* Significant fines and sanctions for non-compliance with environmentalregulations and legislation
Yes No fines or sanctions during thereporting period.
Transport
EN29 Major environmental impacts oftransportation
Partly Environmentalresponsibility
General
EN30 Total environmental protectionexpenditures and investments
No
Social performance indicators
Employees and working conditions
Management approach to humanresources
Yes Personnel
Management andsupervisors
CSR managementand organisation
Strategy
Workforce
LA1* Total workforce by employment type (fullor part time), employment contract(permanent or temporary) and region
Yes Personnel keyfigures
LA2* Total number and rate of employeeturnover by age group, gender andregion
Partly Personnel keyfigures
LA3 Benefits to full-time employees that arenot provided to temporary or part-timeemployees
Yes Occupationalwellbeing
Employee-management relations
LA4* Employees covered by collective labouragreements
Yes Personnel keyfigures
LA5* Minimum notice period regardingoperational changes
Yes Cooperation
Occupational health and safety
CSR report and annual report 2014 59
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
LA6 Percentage of employees representedon joint health and safety committees
Yes Occupationalwellbeing
LA7* Rates of injury, occupational diseases,lost days, fatalities and absenteeism
Partly Personnel keyfigures
LA8* Education and information on seriousdiseases, provided for employees, theirfamilies and the local community
Partly Occupationalwellbeing
LA9 Health and safety topics covered informal agreements with trade unions
No
Training and education
LA10* Average training hours per year peremployee
Partly Personnel keyfigures
LA11 Competence development and lifelonglearning programmes
Yes Development ofpersonnel
LA12 Employees covered by regularperformance and career developmentreviews
Yes Personnel keyfigures
Diversity and equal opportunities
LA13* Diversity in governance bodies andemployee categories
Yes Personnel keyfigures
LA14* Ratio of basic salary of men to womenby employee category
No
Human rights
Management approach to humanrights
Yes Equal opportunities
CSR managementand organisation
Investment and procurementpractices
HR1* Inclusion of human rights clauses ininvestment agreements and investment-related human rights assessments
No
HR2* Proportion of significant suppliers andcontractors that have undergone ahuman rights assessment and havebeen affected by the resulting actions
No
HR3 Employee training on policies andprocedures concerning human rights
No
Non-discrimination
HR4* Incidents of discrimination and actionstaken
Yes No incidents during the reportingperiod.
Freedom of association and collectivebargaining
HR5* Operations identified in which the right toexercise collective bargaining may be atsignificant risk
Yes Veikkaus' operations do notinvolve risks that would endangerfreedom of association and right
CSR report and annual report 2014 60
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
to collective bargaining. Veikkausoperates in Finland and complieswith the laws of Finland.
Child labour
HR6* Operations identified as being atsignificant risk of involving child labourand prevention measures taken
Yes Veikkaus' own operations do notinvolve risks of child labour.
Forced and compulsory labour
HR7* Operations identified as bearing asignificant risk of the use of forced orcompulsory labour and the preventionmeasures taken
Yes Veikkaus' own operations do notinvolve risks of forced orcompulsory labour.
Security practices
HR8 Number of personnel trained in humanrights policies and practices
No
Indigenous rights
HR9 Incidents involving rights of indigenouspeople and actions taken
No
Society
Management approach to society 2014 and 2015objectives
CSR managementand organisation
Risk management
Security andreliability
Verifiedresponsibility
Actions againstcorruption
Tools to controlgaming
Local communities
SO1* Assessment of impacts on localcommunities and impact managementprogrammes
Partly Peluuri
Corruption
SO2* Percentage and total number ofbusiness units analysed for corruption
No
SO3* Percentage of employees trained in anti-corruption policies and procedures
No
SO4* Actions taken in response to incidents ofcorruption
Yes No incidents during the reportingperiod.
Public Policy
CSR report and annual report 2014 61
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
SO5* Public policy positions and participationin public policy development andlobbying
No
SO6 Contributions to political parties,politicians and related institutions
Yes Veikkaus does not grantcontributions to political parties
SO7 Legal actions associated with non-compliance with anti-trust laws, cartelsand misuse of market dominance
Yes No legal actions during thereporting period.
Määräystenmukaisuus
SO8* Significant fines and sanctions for non-compliance with laws and regulations
Yes No fines or sanctions during thereporting period.
Product responsibility
Management approach to productresponsibility
2014 and 2015objectives
Productdevelopment
Verifiedresponsibility
Security andreliability
Supervision ofgaming activities
Customer health and safety
PR1* Assessment of product health and safetyimpacts
Yes Productdevelopment
PR2 Non-compliance with regulationsconcerning product health and safetyimpacts
Yes No incidents during the reportingperiod.
Product labelling
PR3* Required information on products andservices, and the percentage of majorproducts and services to which therequirement applies
Partly Productdevelopment
PR4 Non-compliance with regulationsconcerning product information andlabelling and with voluntary codes
Yes Games No incidents during the reportingperiod.
PR5 Practices related to customersatisfaction and results of customersatisfaction surveys
Yes Registered players
Marketing communications
PR6* Adherence to laws, standards andvoluntary codes related to marketingcommunications, advertising, promotionand sponsorship
Yes Social responsibility
CSR report and annual report 2014 62
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
PR7 Non-compliance with regulations andvoluntary codes concerning marketingcommunications, advertising, andsponsorshipmainontaan javoluntarycodes concerningmarketingcommunications, advertising,and sponsorship
Yes A reclamation from the Council ofEthics in Advertisingconcerningan ad for betting onthe FIFA World Cup received on27 August 2014.
Customer privacy protection
PR8 Complaints regarding breachesofcustomer privacy andlosses of customerdata
Yes No incidents during the reportingperiod.
Compliance
PR9* Fines for non-complianceconcerning theprovisionand use of products andservices
Yes No fines or sanctionsduring thereporting period.
* GRI Core indicator
CSR report and annual report 2014 63
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
Independent Assurance Report(translation from the Finnish original)
TTo the Managemeno the Management ot of Vf Veikkeikkaus Oyaus Oy
We have been engaged by the Management ofVeikkaus Oy (hereinafter also the Company) toperform a limited assurance engagement on thenumeric information on economic, social andenvironmental responsibility disclosed in VeikkausOy’s CSR report and Annual report 2014 onlinepublication’s sections Veikkaus 75 years, Veikkaus2014–2015, Business, and Responsible Operator forthe reporting period 1 January 2014 to 31 December2014 (hereinafter “Corporate responsibilityinformation”).
ManagemenManagement’t’s rs responsibilityesponsibility
The Management of Veikkaus Oy is responsible forpreparing the Corporate responsibility information inaccordance with the Reporting criteria as set out inVeikkaus Oy’s reporting instructions and the G3Sustainability Reporting Guidelines of the GlobalReporting Initiative.
PrPractitioner’actitioner’s rs responsibilityesponsibility
Our responsibility is to express a conclusion on theCorporate responsibility information based on ourwork performed. Our assurance report has beenmade in accordance with the terms of ourengagement. We do not accept, or assumeresponsibility to anyone else, except to Veikkaus Oyfor our work, for this report, or for the conclusions thatwe have reached.
We conducted our work in accordance with theInternational Standard on Assurance Engagements(ISAE) 3000 “Assurance Engagements Other thanAudits or Reviews of Historical Financial Information”.This Standard requires that we comply with ethicalrequirements and plan and perform the assuranceengagement to obtain limited assurance whether anymatters come to our attention that cause us to believethat the Corporate responsibility information has notbeen prepared, in all material respects, in accordancewith the Reporting criteria.
In a limited assurance engagement the evidence-gathering procedures are more limited than for areasonable assurance engagement, and thereforeless assurance is obtained than in a reasonableassurance engagement. An assurance engagementinvolves performing procedures to obtain evidenceabout the amounts and other disclosures in theCorporate responsibility information. The proceduresselected depend on the practitioner’s judgement,including an assessment of the risks of materialmisstatement of the Corporate responsibilityinformation. Our work consisted of, amongst others,the following procedures:
• Interviewing senior management of the Company.
• Interviewing employees responsible for collectingand reporting the Corporate responsibilityinformation.
• Assessing how employees apply the reportinginstructions and procedures of the Company.
• Testing the accuracy and completeness of theinformation from original documents and systemson a sample basis.
• Testing the consolidation of information andperforming recalculations on a sample basis.
ConclusionConclusion
Based on our work described in this report, nothinghas come to our attention that causes us to believethat the Corporate responsibility reporting has notbeen prepared, in all material respects, in accordancewith the Reporting criteria. When reading ourassurance report, the inherent limitations to theaccuracy and completeness of sustainabilityinformation should be taken into consideration.
Helsinki, 17 March 2015PricewaterhouseCoopers Oy
Sirpa Juutinen
Partner
Sustainability & Climate Change
Maj-Lis Steiner
Director, Authorised Public Accountant
Assurance Services
CSR report and annual report 2014 64
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
Corporate Governance review 2014Veikkaus' mission is to generate broad-ranging valuefor Finnish society by operating games reliably andresponsibly. Veikkaus is a state-owned limited liabilitycompany that operates in the administrative sector ofthe Finnish Ministry of Education and Culture. TheState's commitment to the company's liabilities isequal to its shareholding, and its role is limited to theresponsibilities of a shareholder.
Veikkaus' corporate governance is based on theLotteries Act (1047/2001), the Finnish Limited LiabilityCompanies Act, and the company's Articles ofAssociation. Veikkaus’ exclusive right to operatelotteries, betting, and pools games is laid down by theLotteries Act. The gaming activities are regulated byvirtue of the Government Decree on Gaming Activitiesand the Ministry of the Interior Decree on the Rules ofPlay.
Veikkaus has also adopted the Finnish CorporateGovernance Code 2010, in addition to which the
company’s activities are guided by the effectiveguidelines and principles issued by the Ministry ofEducation and Culture on Corporate Governance.
CSR report and annual report 2014 65
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
General MeetingVeikkaus' supreme administrative body is the GeneralMeeting, which, in accordance with the company'sArticles of Association, elects the Board of Directors,the Supervisory Board and the Auditor. All regular andextraordinary General Meetings are attended by arepresentative of the Ministry of Education andCulture, exercising the owner's decision-makingpower. A State representative attends these meetingsunder power of attorney. This representative is fromthe Ministry of Education and Culture and may be therelevant Minister, the State Secretary, PermanentSecretary, Director of the Administration Department,or another official from the Administration Department.
20142014
The regular General Meeting of the year was held on20 March 2014. It was attended by Mr PaavoArhinmäki, Minister of Education and Culture; MrJarmo Lindén, State Secretary, as the Staterepresentatives; officials from the Ministry ofEducation and Culture: Mr Matti Väisänen, Head ofFinancial Planning, and Mr Esko Pyykkönen, SpecialGovernment Adviser; Ms Suvi-Anne Siimes,Chairman of Veikkaus’ Board of Directors; Mr LauriVeijalainen, Vice Chairman of Veikkaus’ Board ofDirectors; and Mr Ilkka Kanerva, Chairman of theSupervisory Board; Mr Juha Koponen, Veikkaus’CEO; and as Veikkaus’ other representatives Mr OlliSarekoski, Executive Vice President; Ms Maija Hjelt,Senior Vice President, Finance; and Mr PekkaIlmivalta, Senior Vice President, Communications andCSR.
The meeting adopted the Financial Statements of2013; laid down the allocation of the profit for thefinancial year and undistributed prizes fund; decidedto discharge the Board of Directors and SupervisoryBoard from liability; determined the remunerations tothe Supervisory Board, Board of Directors and theAuditors; and appointed a new Supervisory Board,Board of Directors and Auditor to the company.
BoarBoard od of Dirf Directectorsors
According to the company's Articles of Association,Veikkaus' Board of Directors may have a minimum offive and a maximum of eight members. In 2014, the
Board of Directors had eight members. The GeneralMeeting appoints the Board members, the Chairman,and the Vice Chairman for one year at a time. None ofthe members of the Board belongs to the company’sexecutive management.
20142014
The Board of Directors continued to be chaired by MsSuvi-Anne Siimes, CEO of the Finnish PensionAlliance TELA. The Board members to continue wereMr Lauri Veijalainen, Development Director (ViceChairman), Ms Leena Harkimo, Member ofParliament; Ms Riitta Kaivosoja, Director General; MsEva Liljeblom, Rector; Mr Alf Rehn, Professor; Mr TeroOjanperä, CEO; and Mr Jussi Saramo, PoliticalAdviser.
The tasks and responsibilities of Veikkaus' Board aredetermined by the Finnish Limited Liability CompaniesAct. In addition, the Board of Directors must payattention to the company’s special task laid down bythe Lotteries Act, which enjoins the company tooperate games in a way which ensures the legalprotection of those engaging in gaming activities,prevents crime and abuse, and reduces the social andhealth-related detriments caused by gaming.
The Board takes under advisement all issues thathave broad-ranging significance for the company.These include the company's strategic guidelines, keyinvestments, risk management principles, the annualaction plan and budget, and the related follow-up. TheBoard appoints the CEO and the Senior VicePresidents working directly under the CEO, anddetermines their salaries and other benefits.
The Board drafts an annual operational agenda thatincludes the primary tasks of the Board of Directorsand its Chairman, a profile of the Board Committees,a meeting schedule, and the matters to be discussedat the Board meetings. The Board also conducts aself-assessment of its activities for each term.
Every term, the Board members provide a statementto indicate their independence of the company and itsshareholders. Of the Board members, Ms RiittaKaivosoja holds an office at the Ministry of Educationand Culture, and Mr Jussi Saramo is employed by the
CSR report and annual report 2014 66
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
Ministry of Education and Culture. Based on thestatements submitted, the other Board members areindependent of both the company and itsshareholders.
Veikkaus’ Board of Directors convened eight (8) timesduring 2014, with an average participation rate of 94percent. In its meetings the Board focused onupdating the corporate strategy and securing theoperational development through, e.g., productreforms and updates, together with cost-efficiency(especially many acquisitions). The meetings held inthe summer and early autumn covered thedevelopment of the national and internationaloperating environment and the situation of Veikkaus’corporate social responsibility and responsiblegaming. The meetings of the end of the year focusedon the securing of the development of the company’sfinancial performance, follow-up, and planning thefollowing year.
The BoarThe Board Committeesd Committees
The Board has two internal committees, the AuditCommittee and the Personnel Committee. TheCommittees report regularly to the Board on theiractivities.
The Audit CommitteeThe Audit Committee
The Audit Committee assists the Board of Directors inensuring that the company's accounting and financialadministration are appropriately organised andmonitored, and that internal control, risk management,and the external and internal audits are arranged inaccordance with legislation, regulations and theoperating principles approved by the Board ofDirectors. The Audit Committee's composition,meeting practices, and tasks are defined in the AuditCommittee's rules of procedure, which have beenapproved by the Board of Directors.
The Audit Committee:The Audit Committee:• Reviews the information contained in the interim
reports, financial statements, and annual report, andassesses the adequacy of this information.
• Assesses the adequacy and effectiveness of thecompany's internal control and risk managementsystems.
• Reviews the Corporate Governance Statement
• Approves the internal control function's annualaction plan, studies the annual action plan for
external audit, and reviews the company's internalaudit and financial audit reports
• Assesses the company's compliance withlegislation, regulations and internal guidelines
20142014
In 2014 the Audit Committee worked according to therules of procedure approved by the Board ofDirectors. In addition to the mandatory items, otheritems discussed in the Audit Committee meetingsincluded the revision of the company’s financial rulesand measures to secure the protection of thecustomer data held by the company.
The members of the Audit Committee in 2014 wereMr Lauri Veijalainen (Chairman), Ms Riitta Kaivosoja,Ms Eva Liljeblom, and Mr Tero Ojanperä. During thereview period, the Audit Committee met six (6) times(including one email conference). The averageattendance rate was 95 percent.
PPersonnel Committeeersonnel Committee
The Personnel Committee's duty is to assist the Boardof Directors in preparations related to the appointmentand remuneration of the CEO and other executives,employee incentive schemes, and in organisationaldevelopment. The Personnel Committee'scomposition, meeting practices, and tasks are definedin the Personnel Committee's rules of procedure,which have been approved by the Board of Directors.
The PThe Personnel Committee:ersonnel Committee:• Prepares the general remuneration principles for the
management and personnel
• Prepares recommendations on issues relating to theCEO's salary and incentives, as well as the termsand conditions relating to the remuneration of thoseworking directly under the CEO.
• Assesses the performance of the CEO and thesenior management.
• Assesses the organisation's structure andeffectiveness.
• Assesses the company's HR policy and practices
20142014
In 2014, the Personnel Committee focused primarilyon preparing the management compensation scheme,successor planning and evaluation of key employeerisks.
CSR report and annual report 2014 67
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
The members of the Personnel Committee were MsSuvi-Anne Siimes (Chairman), Ms Leena Harkimo, MrAlf Rehn, and Mr Jussi Saramo. During the periodunder review, the Personnel Committee convened
four (4) times with an average attendance rate of 75percent.
The Board of Directors’ monthly and meeting compensations (EUR) and attendance rates in 2014
Attendance
Monthlycompensations
Meetingcompensations
Totalcompensations
Boardmeetings
AuditCommittee
PersonnelCommittee
Chairman Suvi-Anne Siimes 26 400,00 6,000.00 32,400.00 8/8 4/4
Tero Ojanperä 15,600.00 6,500.00 22,100.00 8/8 5/6
Eva Liljeblom 15,600.00 7,000.00 22,600.00 8/8 6/6
Alf Rehn 15 600,00 3,000.00 18,600.00 5/8 1/4
Leena Harkimo 15 600,00 5,500.00 21,100.00 8/8 3/4
Riitta Kaivosoja 15,600.00 7,000.00 22,600.00 8/8 6/6
Jussi Saramo 15,600.00 5,500.00 21,100.00 7/8 4/4
Vice Chairman LauriVeijalainen
19,200.00 7,000.00 26,200.00 8/8 6/6
Compensations total 2014 139 200,00 47,500.00 186,700.00
Supervisory BoarSupervisory Boardd
Veikkaus' Supervisory Board has 14 members. One ofthem is a personnel representative, who also has anamed personal deputy. The other members areappointed according to the power distribution inParliament. As a rule, the General Meeting appointsthe Supervisory Board for a two-year term. TheSupervisory Board appoints a Chairman and a ViceChairman from amongst its members for one year at atime. The Supervisory Board is responsible forsupervising the company governance by the Board ofDirectors and the CEO, and for issuing a statement onthe Financial Statements and the Auditors' Report tothe General Meeting. Due to the special status of thecompany, the Supervisory Board acts as an importantcooperation body and a forum for discussion.
20142014
In 2014 the General Meeting appointed the followingmembers to the Supervisory Board: Members ofParliament Ilkka Kanerva, Timo Heinonen, and LenitaToivakka of the National Coalition Party; Members ofParliament Sirpa Paatero, Tuula Väätäinen, and MattiSaarinen of the Social Democratic Party of Finland,Member of Parliament Timo Soini, and Head of OfficeMarja-Leena Leppänen of the Finns Party; Membersof Parliament Sirkka-Liisa Anttila and Jari Leppä of
the Centre Party; Member of Parliament Kari Uotila ofthe Left Alliance; Member of Parliament Outi Alanko-Kahiluoto of the Green Party; and Member ofParliament Stefan Wallin of the Swedish People’sParty. To replace Ms Lenita Toivakka who wasappointed Minister in June 2014, and to replace MsSirpa Paatero who was appointed Minister inSeptember, the Ministry of Education appointedMember of Parliament Anu Urpalainen of the NationalCoalition Party, and Member of Parliament MaaritFeldt-Ranta of the Social Democratic Party of Finlandto the Supervisory Board. Veikkaus' personnelrepresentative in the Supervisory Board was QAEngineer Reino Långström, and his deputy wasProduction Controller Teijo Loikkanen. TheSupervisory Board appointed Ilkka Kanerva asChairman and Matti Saarinen as Vice Chairman.
The Supervisory Board convened nine (9) timesduring 2014. The special themes of the meetingswere questions related to the development of theoperating environment and the company’s specialmission, as well as product development. Theaverage attendance rate was 86 percent.
The Chairmen and the members of the SupervisoryBoard are only compensated for attending themeetings. The Chairman's meeting compensation isEUR 800, the Vice Chairman's EUR 600, and that ofthe other members EUR 500 per meeting. Thepersonnel representatives employed by Veikkaus do
CSR report and annual report 2014 68
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
not receive separate compensation for participating inthe work of the Supervisory Board.
Supervisory Board members’ meeting compensations in 2014 (EUR) and attendance rates
Meeting compensations Attendance
Kanerva Ilkka, Chairman 6,400.00 8/9
Saarinen Matti, Vice Chairman 5,400.00 9/9
Alanko-Kahiluoto Outi 4,000.00 8/9
Anttila Sirkka-Liisa 4,000.00 8/9
Feldt-Ranta Maarit 1,500.00 3/3
Heinonen Timo 4,000.00 8/9
Leppä Jari 3,500.00 7/9
Leppänen Marja-Leena 4,000.00 8/9
Paatero Sirpa 2,500.00 5/6
Soini Timo 4,000.00 8/9
Toivakka Lenita 1,500.00 3/5
Uotila Kari 3,500.00 7/9
Urpilainen Anu 1,500.00 3/4
Wallin Stefan 4,000.00 8/9
Väätäinen Tuula 4,000.00 8/9
Compensations total 2014 53,800.00
CompanCompany managemeny managementt
The CEO's duty is to manage and supervise thecompany's business operations in accordance withthe Finnish Limited Liability Companies Act and in linewith the strategy and guidelines approved by thecompany's Board of Directors. The Executive Teamassists the CEO in this task. The Executive Team'stasks include drafting the company's strategy, actionplan and a budget proposal for the Board of Directors,as well as decision-making and follow-up in significantprojects and investments.
20142014
In the year under review, the Executive Teamconsisted of the CEO and five other members. TheCEO served as the Team's Chairman. The ExecutiveTeam convened 23 times during the year.
The Board of Directors appoints Veikkaus' CEO andthe Vice Presidents working directly under the CEO.The Executive Team members submitted stakeholder
reports in 2014, according to which all the membersare independent of the company's stakeholders.
Benefits, bonuses and incBenefits, bonuses and incenentivtiveses
The CEO and other management enjoy ordinaryemployee benefits (telephone and car benefit) andhave no stock options.
The CEO's notice period is six months if notice isgiven by the company and three months if notice isgiven by the CEO. If certain criteria specified in theCEO contract are met when the contract is terminatedby the company, the CEO is entitled to severance paycorresponding to six months' salary. The CEO'sretirement age is 65 years. The Executive Teammembers have a two-month notice period when theemployment is terminated by the employee, and anotice period determined in Veikkaus' collectivebargaining agreement (1–6 months) if theemployment is terminated by the employer. Whencertain criteria are met, members of the ExecutiveTeam are entitled to severance pay corresponding tonine months' salary.
Veikkaus has an incentive scheme covering allpersonnel. This scheme includes discretionary
CSR report and annual report 2014 69
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
performance-based bonuses, special bonuses andperformance incentives. The performance incentive isan annual one-time payment based on howsuccessful the company has been in achieving itsstrategic goals. Function and unit-specific targets andbenchmarks are set as part of the operationalplanning process. The company's success inachieving its objectives is assessed at the end of thefinancial year, and the incentives paid are calculatedas a percentage of the recipient's annual salary. Themaximum rate varies from 7 to 30 percent, dependingon the personnel group. The maximum rate for theCEO and the Management Team was 30 percent in2014.
The incentives for the CEO and the Executive Teamconsisted of two target sections in 2014. The firstsection was related to the company’s special mission,covering the promotion of responsible gamingactivities through registered gaming and thedevelopment of the company's public image as aresponsible operator. The second section focused onthe company's profitability.
The Board of Directors determines the incentives forthe Executive Team and the performance bonuscriteria covering all personnel.
Executives’ incentives in 2014 (EUR)
2014 2014 2013 2013
Fixed share Variable share Fixed share Variable share
CEO Juha Koponen 372,840 76,950 373,240
Other Executive Team members 841,022 182,813 962,744 91,688
Total 1,213,862 259,763 1,335,984 91,688
CSR report and annual report 2014 70
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
Supervision of gaming activitiesIn accordance with section 42:2 of the Lotteries Act(506/2009), Veikkaus' lottery, pools, and bettingoperations are supervised by the National PoliceBoard working under the Ministry of the Interior. TheMinistry approves the rules of play and the NationalPolice Board supervises compliance with these rules.In addition, the company engages in continuousdialogue with representatives of both the Ministry ofthe Interior and the National Police Board.
Veikkaus' gaming activities are monitored by officialsupervisors appointed by the Ministry, who alsoconfirm the game results and number of prizes foreach round. The Ministry handles players' complaintsconcerning prize payouts, and issues recommendeddecisions on them.
20142014
In 2014 a total of 60 recommended decisions wereissued, whereas in the previous year, they numbered98.
In addition to the gaming industry's security certificate,Veikkaus has also been awarded information securityand quality certificates. External supervisors ensurethat the company operates according to thesestandards. Det Norske Veritas (DNV) auditedVeikkaus' compliance with the World LotteryAssociation Security Standards WLA-SCS:2012 onceduring the year under review. Compliance with theISO 9001:2008 quality standard and ISO 27001:2005information security standard is assessed by InspectaSertifiointi Oy, which conducted two audits in 2014.The audits concluded that Veikkaus continues to fulfilthe requirements of the standards.
CSR report and annual report 2014 71
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
Internal controlOvOverview oerview of inf internal cternal conontrtrolol
Internal control refers to a process that helps theBoard of Directors and the operative management togain reasonable certainty of the following issues:
• The company's operations are profitable, efficient,responsible, and consistent with the company'sstrategy
• Financial reporting and other information used bythe management are reliable, sufficient, and up-to-date
• The company complies with the applicablelegislation and regulations, the rules of play, andVeikkaus' internal rules and guidelines
Veikkaus' internal control covers all strategies,processes, practices and management structures thatcontribute to the attainment of Veikkaus' targets.
ConContrtrol enol envirvironmenonmentt
CompanCompany mission and vy mission and valuesalues
Veikkaus' mission and values form the basis forinternal control. Veikkaus' mission is to generatebroad-ranging value for Finnish society by operatinggames reliably and responsibly. Veikkaus’ vision is tobe the best gaming company in the world.
The vThe values guiding Values guiding Veikkeikkaus’ operaus’ operaations artions are:e:• For the common good: Veikkaus produces broad-
ranging value for Finns. Veikkaus gives Finns thechance to participate in the creation of the commongood by playing securely and reliably. We also offer
Finns the opportunity to work towards the commongood. Veikkaus indirectly employs tens ofthousands of Finns.
• Responsibly: CSR is at the very heart of Veikkaus’strategy and actions in practice. Our customersmust be able to rely on us one hundred percent.Being responsible for our operations to society, weshall report on our operations widely and openly.
• Reliably: Veikkaus’ employees can rely on eachother under any circumstances. Reliable operationsalso involve open interaction. Customers canalways have confidence in the games Veikkausoffers.
• Creatively: Veikkaus wants its games, services andway of working to reflect creativity and enjoyment.The personnel are also encouraged to beinnovative.
ManagemenManagement and st and steering systeering systemtem
Operational planning and target setting form the basisof Veikkaus’ management. The operational planningand management are based on the company's vision.Long-term strategic goals are derived from Veikkaus'vision and are, in turn, used to set annual goals in theform of a company-level scorecard.
For operational planning, the scorecard objectives areconverted into more detailed function-specific, unit-specific, and employee-specific targets and actionsthat are monitored using applicable benchmarks.Targets and benchmarks must be sufficientlychallenging to ensure a good performance,development and efficiency. Corrective actions takenbased on performance monitoring guide thecompany's operations during the financial year.
The company's administration is organised inaccordance with the Finnish Limited LiabilityCompanies Act and the Finnish CorporateGovernance Code. All functions have their ownsteering groups, which make decisions within theframework of the chairman's powers. In addition tofunction-specific steering groups, operations are alsoguided by separate steering groups whose task is tocoordinate the activities of various functions.
CSR report and annual report 2014 72
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
Veikkaus' management model is functional; coreprocesses have been identified and are used to steerand develop operations. Three core processes havebeen identified for business strategy implementation:the service process, the product developmentprocess, and the steering process. In addition to thesecore processes, Veikkaus has support processes(such as financial and HR management processes),which ensure the appropriate operating conditions forthe core processes.
InInfformaormation systion systemstems
Veikkaus' business relies entirely on technologicalsystems. The gaming system consists of a centralsystem connected to the retailers' sales terminals, theInternet gaming system, and gaming support systems.As reliability is a crucial factor in gaming operations, ahigh degree of availability is a key objective of thesystem. Technological back-ups are in place for thegaming system, as well as for support systems usedto manage and control gaming.
Rules, guidelines, laRules, guidelines, laws and rws and regulaegulationstions
Veikkaus' operations are governed by legislation,company values, rules, guidelines and generaloperating principles. Veikkaus' management and
steering system steers internal controls for ensuringthe efficiency, effectiveness, responsibility andstrategic consistency of operations.
The internal control of financial reporting is a systemdesigned to provide reasonable assurance of thereliability of reporting and compliance with the currentlegislation, regulations and accounting standards.Veikkaus has voluntarily adopted international IAS/IFRS standards in its financial reporting. In addition tolegislation, Veikkaus' financial reporting is alsogoverned by the company's standing orders oncommercial transactions and other financialguidelines. These cover issues such as key financialadministration principles and the authorisation ofindividuals or bodies to grant approvals. Theoperating models for financial reporting have beendescribed and defined in the relevant regulations,working instructions and process descriptions.
The Compliance activities have been defined in aseparate Compliance programme, which is part of riskmanagement and internal control. Within theframework of this programme, Veikkaus regularlymonitors its operations, identifies potential areas fordevelopment, and undertakes measures to correctproblems.
CSR report and annual report 2014 73
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
Risk managementRisk management at Veikkaus is part of thecompany's internal control. A risk is defined as anyreal or potential event, action or omission that wouldweaken the company's chances of attaining itstargets. Risk management has been integrated withoperational planning processes, in order to enableregular identification and evaluation of both the risksinherent in Veikkaus' business operations andstrategic goals, as well as the preparations that havebeen made for such risks.
Responsible parties and risk management measuresare specified for the most significant and central risks.These measures are included in the company's actionplans, operating models and other processes. Riskmanagement measures are monitored as part of thesupervision of operational planning and other internalcontrols.
The Executive Team is responsible for riskmanagement. In addition to company-level riskmanagement, risks associated with financial reporting,compliance, operative functions and businessoperations are evaluated as part of the company'severyday activities. The Vice President in charge ofeach specific responsibility area is in charge ofconducting these assessments
RisksRisks
The most significant risks to target achievement in2015 are factors associated with the development ofconsumer demand and the effects of regulation.
LLegislaegislation and the Finnish gaming systion and the Finnish gaming systemtem
Changes in Veikkaus' operating environment, inparticular within the national gaming system and theLotteries Act, are central to determining whether
Veikkaus will continue to operate as a monopoly. Thishas a considerable impact on the company's marketshare, profitability and operating models. Potentialnew restrictions and stricter regulation could lead to asituation in which Veikkaus' prerequisites for engagingin business would change. The legal environment isaffected by both Finnish and EU legislation.
Gaming regulations are not harmonized within theEuropean Union, so regulation is conducted atnational level. The resolutions of the European Courtof Justice play a central role in steering gamingoperations. Veikkaus continually monitors the ECJ'sresolutions and their impacts.
At the end of October 2012, the EuropeanCommission sent a letter to Finland, requestingdetailed information on national gaming legislationand its application. On the basis of the responseissued by the State of Finland at the end of December2012, the Commission announced in November 2013that it had closed the infringement procedure againstFinland. The Commission concluded that the Finnishlegislation establishing an exclusive right to organisegaming services meets the requirements of EU law,and is applied systematically and consistently.
Digital businessDigital business
Digital business continued to show strong growth.Improving customer services is a key priority withinVeikkaus' strategy. In order to improve its services,Veikkaus continues to invest in digital business.Targeting services, making them faster and ensuringtheir reliability will be among our core objectives evenin the future. Reforming the user interfaces in the webstore guarantees comprehensive terminal support anddynamic development. In 2014 almost all the gamepages at veikkaus.fi were revised and maderesponsive. In both the web business and the digitalcustomer communications, the targeting of analytics-based contents was central to the activities. Customerservice was improved to meet the needs of theincreasing web gaming by developing both the servicechannels and contents.
CSR report and annual report 2014 74
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
ICT and daICT and data systa systemstems
ICT and the gaming systems in particular are at thecore of Veikkaus' business. The growing number ofgame events and the increasing complexity of gamingsystems, as well as the impact they have on systemreliability, pose additional challenges. System integrityand operational reliability affect customer commitmentdirectly and, thus also, the company's profitability. Thereliability of the key systems is monitored actively, and
the systems are evaluated and tested regularly. Toensure the uninterrupted operation of the keysystems, Veikkaus has adequate back-up systems,multiple devices and a continuity plan in place. Thesesystems and plans are tested regularly. In accordancewith a service agreement, an external service provideris in charge of a significant part of the gamingsystem's production and maintenance.
CSR report and annual report 2014 75
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
Supervision and control measures and supervisoryresponsibilitiesSupervision and control measures consist of theprocedures, guidelines and regulations that ensurecompliance with the company's operating principlesand help the company to attain its objectives. Thesesupervision and control measures help to identify andmanage risks posing a threat to the attainment ofthese objectives.
The management and steering system, and theassociated operational planning and monitoring,constitute a core component of Veikkaus' internalcontrol. The control function also includes approvalprocedures, the granting of authorisations,specification of the employees' tasks, back-upprocedures, securing of assets, and informationsystem controls. The company's operativemanagement has been authorised to make decisionsin specific areas.
The internal control responsibilities are divided asfollows:
• The Executive Team is responsible for the efficiencyof operative functions and actual businessoperations.
• The Executive Vice President is responsible for thesteering of business operations
• The Senior Vice President, Finance, is responsiblefor internal control related to financial reporting.
• The Senior Vice President, Legal Affairs and CSR,is responsible for Compliance operations.
• The Senior Vice President, Production, isresponsible for organising the monitoring of ICToperations and information systems.
CSR report and annual report 2014 76
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
Communications and public relationsA key component of internal control is adequate,reliable and timely information that enables thecompany to monitor its progress towards achieving itsobjectives. Effective internal communications andmanagement reporting ensure that the financialresults and any risks threatening the company's keyobjectives are brought to the attention of the companymanagement and the Board of Directors.
Risk factors associated with efficiency, financialobjectives and the operating environment areregularly discussed at meetings of the company'sgoverning bodies. A more extensive risk managementreview is presented to the Board of Directors once ayear. In addition, reports associated with theCompliance programme are submitted to the Board of
Directors and Executive Teams on an annual basis.The Board receives regular reports concerningmaterial changes in legislation and the policies of theEuropean Court of Justice. Furthermore, the seniorexecutives provide reports on their respective areas ofresponsibility.
The personnel receive information on the strategicobjectives, the targets specified in action plans and inbudgets, as well as their implementation, on thecompany intranet and in special briefings. Operatingmodels for financial reporting are available on theintranet and accessible to those involved in financialreporting. Operating models, rules and guidelines arealso communicated to Veikkaus' personnel in trainingsessions.
CSR report and annual report 2014 77
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
Internal and external auditIn addition to the continual monitoring describedabove, internal and external audit are used to assessinternal control and its effectiveness.
The audit was conducted by the Authorised PublicAccounting firm KPMG Oy Ab, with Mr Sixten Nymanas the Authorized Public Accountant in charge of theaudit.
During the year under review, the audit included anassessment of the appropriateness of the internal
financial management control, including thefunctionality of the controls within financialmanagement. The audit conducted during thefinancial year covered the compliance with the speciallegislation concerning the company and with theinternal guidelines; the controls of the game andfinancial management systems, the bookkeeping ofprojects, and the process of calculating the salaries.
CompensaCompensations ttions to the audit co the audit companompany 2014y 2014
EUR 2014 2013
Audit 40,676 44,447
Other services 47,916 125,386
Total 88,592 169,833
In accordance with the company's approved operatingprinciples, the internal audit assesses the adequacy,reliability and effectiveness of the risk management,supervision and administration processes. Theinternal audit also assesses whether the operationscomply with legislation, regulations and guidelines,and seeks to prevent any non-compliance.
The responsibility for the internal audit is assigned toan internal auditor, assisted by an external service
provider. The internal audit falls under the jurisdictionof the CEO and reports to the Board of Directors'Audit Committee. The internal audit covers the entireorganisation.
During the period under review, the internal auditassessments have concerned, e.g., the retailers andthe risk management of sports games.
CSR report and annual report 2014 78
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
MonitoringThe Board of Directors and its Committees are taskedwith assessing the adequacy and effectiveness of theinternal controls and risk management. The duties ofthe Board's Audit Committee include ensuring that theappropriate internal controls are in place for financialadministration and accounting and that the internalcontrol and risk management; auditing, and internalaudit are organised in accordance with the laws,regulations, and the operating principles approved bythe company’s Board of Directors. The Board and theAudit Committee receive regular information on thecompany's progress towards attaining its objectives inthe form of profit reports and forecasts, budget andaction plan reports, and audit results.
The most valuable supervisory tool for Veikkaus'operative management is the weekly monitoring of thetargets, which is used to evaluate the key financialand operative benchmarks. Further, monthly financialreports and quarterly reports are used to assess theperformance by comparing them with the company'sstrategic objectives, business plans, and other plansand measures.
The process of financial reporting is assessedregularly and updated in accordance with currentlegislation, regulations, the reporting standardsgoverning the financial statements, and any otherrequirements concerning financial reporting.
CSR report and annual report 2014 79
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
Corporate Governance Code and deviationsVeikkaus complies with the Finnish CorporateGovernance Code 2010, following the Comply orExplain principle, and the ownership policy guidelinesissued by the Ministry of Education and Culture on 3November 2011. In addition, Veikkaus complies withthe guidelines on compensation paid to the executivemanagement and key personnel of state-ownedcompanies issued by the Cabinet Committee on 13August 2012.
The Corporate Governance Statement has beenprovided separately rather than as part of the Board ofDirectors’ Report. The section covering internalcontrol includes a description of the internal controlsused in financial reporting and the main features ofthe company's risk management systems. TheFinnish Corporate Governance Code 2010 is publiclyaccessible at www.cgfinland.fi.
Veikkaus' deviations from the Finnish CorporateGovernance Code mainly stem from its ownership
structure and relate to the specified aspects (inbrackets) of the following recommendations:recommendation 1 (publishing the minutes of theGeneral Meeting); recommendation 4 (the attendanceof nominees for the Board of Directors at the GeneralMeeting); recommendation 11 (notifying shareholdersof the nominees for the Board of Directors);recommendations 28–30 (the appointment of aNomination Committee and its operations);recommendation 42 (paying Board fees in shares);recommendation 51 (the guidelines for insiders issuedby Helsinki Exchange); recommendation 52(notification of auditor candidates) andrecommendation 55 (notifications on the company'swebsite resulting from some of the aforementioneddeviations).
CSR report and annual report 2014 80
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
Supervisory BoardIlkka Kanerva, Chairmanborn 1948 in LokalahtiMember of Parliament, M.Soc.Sc.
Matti Saarinen, varapuheenjohtajaborn 1947 in LohjaMember of Parliament, Diploma in Social Sciences,Financial Director
Outi Alanko-Kahiluotoborn 1966 in OuluMember of Parliament, Researcher, Ph.D.
Sirkka-Liisa Anttilaborn 1943 in Marttila TKMember of Parliament, Administrative notary
Maarit Feldt-Rantaborn 1968 in KarjaaMember of Parliament, Student Soc. Sc.
Timo Heinonenborn 1975 in LoppiMember of Parliament, MA (Education), Entrepreneur
Jari Leppäborn 1959 in PertunmaaMember of Parliament, Farmer
Marja-Leena Leppänenborn 1948 in RovaniemiOffice Manager, Entrepreneur
Timo Soiniborn 1964 in RaumaMember of Parliament, M.Soc.Sc., Chairman of Party
Lenita Toivakkaborn 1961 in HelsinkiMember of Parliament, M.Sc. (Econ.), Entrepreneur
Kari Uotilaborn 1955 in PertunmaaMember of Parliament, Platemaker
Anu Urpalainenborn 1966 in ImatraMember of Parliament, MA (Education), Rector
Tuula Väätäinenborn 1955 in MaaninkaMember of Parliament, Specialized nurse, Familytherapist
Stefan Wallinborn 1967 in VaasaMember of Parliament, M.Adm.Sc
PPersonnel rersonnel reprepresenesentatativtiveses
Reino Långströmborn 1965 in VihtiQA Engineer
Teijo Loikkanen, deputy personnelborn 1965 in KuopioProduction Controller
CSR report and annual report 2014 81
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
Board of DirectorsSuvi-Anne Siimes, Chairman
born 1963Lic. Soc. Sc.
Member of the Board since 17 March 2011, Chairman of thePersonnel Committee
Professional experience: Minister in the Ministries of Education,Finances, Environment, and ForeignAffairs; Member of Parliament; CEO of Pharma Industry Finland;Lecturer of National Economics at the University of Helsinki.
Other current Board memberships: Member of Board of AEIP (theEuropean Association of ParitarianInstitutions), Posti Group Oy (former Itella), Member of Board of YrjöJahnsson Foundation.
Previous positions of trust: European Union Committee of theRegions, Supervisory Board of the Finnish Fund for IndustrialCooperation Ltd. (FINNFUND); Pohja Municipal Council and Board;Member of the Council of Representatives of the CooperativeSociety; Member of the Supervisory Board of Kemira Oy.
Lauri Veijalainen, Vice Chairman of the Board
born 1968
Bachelor of Science, MBA
Development Director for International Operations, Stockmann OyjAbp
Member of the Board since 13 March 2012, Member of the AuditCommittee
Professional experience: CFO for IKEA Russia and CIS; Financialand Administrative Director for Skanska, Moscow.
Other current Board memberships and positions of trust: Deputymember of the Boards of Directors of Fortrent Oy (JV Cramo -Ramirent) and East Office for Finnish Industries.
CSR report and annual report 2014 82
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
Leena Harkimo, Member of the Board
born 1963
Diploma in Business Studies
Member of Parliament
Member of the Board since 1 January 2008, Member of thePersonnel Committee.
Professional experience as the CEO of the Finnish ice hockey teamJokerit and fourth term as an MP.
Other current Board memberships: Chairman of the Board of theNational Sports Council; Chairman of the Board of Youth Academy;Member of the Board of Trustees of WWF Finland.
Previous positions of trust: Board of the Finnish ice hockey teamJokerit; Member of the Supervisory Boards of Suomen Posti/ItellaCorporation, the Finnish Broadcasting Corporation YLE, andLiikenneturva.
Riitta Kaivosoja, Member of the Board
born 1957Master of Laws (trained on the bench)Director General, Ministry of Education and Culture
Member of the Board since 1 January 2008, Member of the AuditCommittee.
Professional experience in management positions and expert tasksat the Ministry of Education and Culture.
Other current Board memberships: Member of the Board ofNordisk Kulturfond, Member of the Board of Art Merita Foundation.
CSR report and annual report 2014 83
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
Eva Liljeblom, Member of Board
born 1958D.Sc. (Econ.)Rector, Hanken School of Economics
Member of the Board since 18 March 2010.
Other current Board memberships and positions oftrust: Member of the Boards of Pensions Fund of the Central Fund ofthe Evangelical Lutheran Church of Finland; Fennia Mutual InsuranceCompany; Hanken School of Economics; and Stockmann Plc.;Chairman of the Board of Municipality Finance Plc., and Chairman ofthe State Pension Fund's Investment Consultative Committee inFinland.
Previous positions of trust: Member of the Boards of SoneraCorporation; TeliaSonera AB (publ); Metso Corporation; CatellaProperty Oy; and The State Pension Fund - Utlandet, Strategirådet.
Tero Ojanperä, Board member
born 1966D.Sc. (Tech.)Director of Vision+ Fund
Member of the Board since 14 March 2013, Member of the AuditCommittee
Professional experience: Various executive roles at NokiaCorporation, most recently Executive Vice President, Services, andBoard member.
Other current Board memberships and positions of trust: Co-founder and Managing Partner of Visionplus Oy, Chairman of theBoard of Directors of Visionplus Fund I Ky, Chairman of the Board ofTailorframe Oy, Chairman of the TTY Foundation, Kiosked Oy,Advisor to the Board of Directors of Teosto.
CSR report and annual report 2014 84
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
Alf Rehn, Member of the Board
born 1972D.Sc. (Tech.), M.Sc. (Econ.)
Professor, Åbo Akademi
Member of the Board since 17 March 2011, Member of the AuditCommittee
Professional experience: Researcher and Research Director at theRoyal Institute of Technology, Stockholm, Sweden; Professor andChair of Management and Organization at Åbo Akademi.
Other current Board memberships: Chairman of the Board ofAdvertising agency Satumaa; Member of the Board of Logomo Oy;Member of the Board of Nordic Business Forum Oy, Etuma Oy, andTurku S Group regional cooperative.
Jussi Saramo, Member of the Board
born 1979
ICT TechnicianSpecial Adviser to MEP, Political Secretary
Member of the Board since 13 March 2012, Member of the PersonnelCommittee.
Professional experience: Special Adviser at the Ministry ofEducation and Culture; Political Secretary of the Left Alliance;Chairman of the Left Youth of Finland.
Other current Board memberships and positions oftrust: Member of the Board of the European Left; Member of theBoard of Alkuasunnot Oy; Member of Vantaa City Council.
Previous positions of trust: Porvoo City Council 2000–2008,Chairman of Attac Finland 2009–2010
CSR report and annual report 2014 85
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
Executive teamVeikkaus’ operations are led by the followingExecutive Team as of 1 January 2013:
Juha Koponen, President and CEO
born 1966
M.Sc.(Econ.)
Joined Veikkaus in 2012
Previous professional experience in diverse management positions
Member of Veikkaus Executive Team since 2012
Olli Sarekoski, Executive Vice President
b. 1965
M.Sc. (Econ.)
Responsible for operative and business management
Joined Veikkaus in 2003
Previous professional experience in diverse management positions
Member of Veikkaus Executive Team since 2003
Maija Hjelt, Senior Vice President, Finance
born 1970
Diploma in Business Administration
Responsible for internal and external accounting, and real estateservices
Joined Veikkaus in 1988
Member of Veikkaus Executive Team since 2010
CSR report and annual report 2014 86
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
Pekka Ilmivalta, Senior Vice President, Communications and CSR
born 1970
Master of Laws (trained on the bench)
Responsible for communications, sponsorship, stakeholder relations,CSR, and legal affairs and human resources.
Joined Veikkaus in 2003
Previous professional experience as an advocate and with sportsorganizations
Member of the Executive Team since 2004
Esa Valtonen, Senior Vice President, Production
born 1952
B.Sc. (Natural Science)
Responsible for information management, games production,production services and corporate security
Joined Veikkaus in 1991
Previous professional experience includes management positions ininformation management and software production
Member of the Executive Team since 1997
Jari Vähänen, Senior Vice President, Business Development
born 1965
M.Soc.Sc.
Responsible for international affairs and business development
Joined Veikkaus in 1995
Previous professional experience includes positions in the FinnishTrotting and Breeding Association (Hippos)
Member of the Executive Team since 2004
CSR report and annual report 2014 87
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
Official Supervisors and AuditorsOfficial Supervisors oOfficial Supervisors of Vf Veikkeikkaus’aus’gaming opergaming operaationstions
Secretary to Management Sari Aalto
Chief Superintendent Jukka Hertell
Administrative Officer Hannele Juusela
Chief Superintendent Niina Koivisto
Chief Superintendent Mia Poutanen
Senior Constable Sanna Salonen
Senior Police Lawyer Markus Välimäki
Chief of Security Kari Santalahti
Engineer, Forensics Petri Varjos
Senior Detective Constable Markus Metsänen
AuditAuditoror
Authorised Public Accountant Sixten Nyman, KPMGOy Ab
CSR report and annual report 2014 88
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
Board of Directors’ Report 2014In its 74th year of operations, Veikkaus achieved mostof the objectives that had been set to it. We were ableto level off the effects of the economic stagnation andweak consumer demand through consistent, long-term, customer-oriented development and cost-efficiency. We managed to improve our result by over2.8 percent, with the financial result for the periodamounting to EUR 520.4 million.
The turnover of the financial year totalled EUR1,959.5 million (+5.4%). The product group to showthe strongest growth was that of daily games(+14.7%). This is in line with the current tendency ofthe gaming industry – trending increasingly towardsgames with high event frequency. The payoutpercentage in these games is higher than that of thetraditional ones, which is why Veikkaus’ game margin(EUR 863.1 million, +3.3%) did not increase as muchas the turnover. The game margin is calculated bysubtracting the prizes paid to players from theturnover.
The shift in consumer behaviour is also reflected as astrong growth of the digital sales channel. During theperiod under review, the share of the electronicchannels exceeded 40 percent of the total sales forthe first time ever.
In addition to the conscious efforts to develop thesales channels, several product overhauls boostedVeikkaus’ sales. The revisions to Lotto and FixedOdds Betting were successful, and many Finnsalready acquainted themselves with the newNeighbours game.
Changes in the operChanges in the operaating enting envirvironmenonmentt
The Finnish gaming market increased by 0.4% in2014, and the total market amounted to EUR 1,701million in terms of the game margin. Veikkaus was theonly Finnish gaming company whose game margingrew during the year under review. As a result,Veikkaus’ share of the Finnish gaming went up to50.7% (+1.3 percentage points).
In February the Cabinet Finance Committee laid downguidelines for strengthening the national gamingmonopoly system. The legal gaming companies in
Finland shall be ensured a chance to develop theiroperations responsibly. The objective is to make surethat the game offerings can be revised and keptattractive within a constantly changing operatingenvironment, which is becoming increasingly digital.The Cabinet Committee decided to second thegaming companies’ proposal to set up a digitalmonitoring team. The team is tasked with, e.g.,analysing the means of restricting offerings thatviolate the Lotteries Act. Further, efforts are made toincrease citizens’ awareness of safe and legalgaming.
In December the Cabinet Finance Committee decidedto launch a project exploring the option of combiningthe three Finnish gaming companies – Veikkaus, RAY,and Fintoto. The project is based on the changes thatdigitalisation and e-gaming have brought about in theFinnish gaming industry, as well as on therequirements set by EU legislation. Gamingoperations that are supervised and guided by societycontinue to enjoy strong support in Finland.
AlmosAlmost EUR 670 million tt EUR 670 million to socieo societyty
Veikkaus returns EUR 517.5 million of its profit for thefinancial year to the Ministry of Education, to befurther distributed to Finnish arts, sports, science, andyouth work. The rest of the profit, almost EUR 2.9million, will be transferred to the undistributed prizes’fund. During the year under review, a total of EUR23.3 million of funds from the undistributed prizes’fund was paid to the Ministry of Education andCulture.
In addition to the return, Veikkaus paid a total of EUR104.2 million (+4.4%) in lottery tax to the Finnish Stateduring the year under review. Veikkaus is not VATliable, and cannot therefore deduct VAT on itspurchases of goods and services. In 2014 Veikkauspaid a total of EUR 22.5 million (+2.8%) of VAT.
InInvvesestmentments in digital sales andts in digital sales andquality assurquality assurancancee
The expenses incurred during the year under reviewwere in line with the projected budget. Prizes werepaid out to players for a total of EUR 1,096.4 million
CSR report and annual report 2014 89
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
(+7.2%). The retail commissions totalled EUR 78.0million (–2.2%). The draw and result informationexpenses amounted to EUR 9.8 million (+13.0%), andthe playslip and instant ticket expenses were EUR 5.8million (+2.4%).
The product advertising expenditure totalled EUR18.3 million (+6.5%). The increase in productadvertising was based on the costs incurred by thelaunch of the new Neighbours game and the newDouble-Up feature introduced to Lotto. The gameevent cooperation expenses were EUR 3.9 million(+5.5%). Veikkaus purchased services for a total ofEUR 34.9 million (+7.6%). This growth can beexplained by investments in the development of digitalsales systems and operating models, as well as thereinforcing of quality assurance.
OvOver 1.6 million rer 1.6 million regisegistertered cused custtomersomers
Over a third of the Finnish adult population haveregistered as Veikkaus’ customers. The number ofregistered customers exceeded 1.6 million at thebeginning of September. More than 98 200 Finnsjoined our customer loyalty programme during theyear under review. The number of new registrationswas boosted by the new Neighbours game forVeikkaus’ loyal customers, launched in the spring, andthe development of e-gaming.
An increasing share of Veikkaus’ customers playregistered, which reinforces responsibility andstrengthens the customers’ consumer protection. Theshare of registered gaming out of Veikkaus’ total saleswas up to 57.3% at the end of the year (53.7% in2013). People can play registered at our web serviceveikkaus.fi and the mobile channels, as well as at thepoints of sale by showing their Veikkaus Cards.
Sales channels inSales channels invvesest in usability andt in usability andccoovvererageage
In accordance with its strategy, Veikkaus invests in thedevelopment of both the retail channel and the digitalsales channels. During the period under review,59.7% percent of the sales came from the retailchannel, whereas 40.3% came from the digitalchannels.
Veikkaus.fi is Finland’s biggest consumer web storewith a turnover of EUR 789.6 million (17.1%). Duringthe year under review, our website had an average of414,600 (+7.1%) weekly visits. We are continuallydeveloping the usability and targetability of the web
store, in order to improve the digital services we offerto our customers.
The number of the points of sale was increased to3,810 (+145 new POS). Points of sale were added togrocery store units with growing customer flows inparticular. Express gaming, i.e. checkout countergaming was extended to cover the S-Group’s Prismahypermarkets and grocery stores. Checkout countergaming had previously only been possible in some ofthe grocery stores of the retail trade companies Keskoand Lähikauppa, and at certain other points of sale toa limited degree.
Daily games and sports games on theDaily games and sports games on theincrincreaseease
Veikkaus games are divided into three major groupson the basis of their characteristics: jackpot games,daily games, and sports games. In 2014 the dailygames and sports games increased their turnover.The games to post the strongest growth were themultinational Eurojackpot and the digital games atveikkaus.fi, especially the eInstants and Live Betting.
The jackpot games include Lotto, Viking Lotto, Joker,and Eurojackpot. The turnover of this games groupwas EUR 777.6 million (–2.4%) in 2014. Among thejackpot games, Eurojackpot posted unprecedentedlyhigh sales figures in the year under review. Thismultinational game reached a turnover of EUR 160.5million (+50.8%). Eurojackpot’s sales and increase inthe number of players were boosted by historically bigjackpots that were landed in Finland: the biggest ofthem were EUR 57.3 million in April and EUR 61.2million in September. Finns play Eurojackpot the mostper capita. In all, players from sixteen differentEuropean countries participate in the game.
Finland’s favourite game Lotto’s turnover went downto EUR 431.1 million (–10.3%). The downward turnwas centrally affected by the fact that there were nobig jackpots available after the record-high jackpot(EUR 13.3 million) drawn in April. Big jackpots addconsiderably to what can be called random playing,thus affecting the development of the turnoversignificantly. In June a product reform to Lotto wasintroduced. Veikkaus’ customers seemed to find thenew Double-Up feature attractive. Up to 65% of them,i.e. almost half a million Finns, have already playedLotto using the Double-Up option since the reform.
The daily games include Keno, the newly introducedNeighbours, the instant games, and the digital gameseInstants, eBingo, Syke, and Pore. The turnover of
CSR report and annual report 2014 90
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
this games group, which showed the strongestgrowth, went up to EUR 754.1 million (+14.7%).
Keno’s turnover, EUR 394.2 million (+2.8%),increased especially as a result of the new additionalfeature KingOdds. The instant games posted aturnover of EUR 138.8 million (+3.9%). The eInstantsgrew the most, reaching a turnover of EUR 119.3million (+71.0%). Among the newly introducedeInstants, Quick Peck gained success, posting abouta fifth of the total sales of the eInstants on its own.During the period under review, especially playingeInstants on the mobile channels showed stronggrowth.
The Neighbours game that was launched in Mayoffers Veikkaus’ customers a completely new form ofgaming. The game is drawn every day. First, thewinner of the jackpot is drawn and after that, the restof the prizes are distributed to the neighbours, theplayers living closest to the winner. After its launch,the Neighbours game kept increasing its sales everymonth, and by the end of the year, over 340 000 Finnshad already tried it. However, this type of a newgame, which is based on localisation data, needs timeto develop. We expect it to continue to attract moreplayers and increase its turnover steadily even in2015.
The sports games generated a turnover of EUR 427.8million (+5.9%). At the beginning of May, the mostpopular sports game, Fixed Odds Betting underwentthe most important product reform of its entire twenty-year history. The maximum number of the daily bettingobjects was raised from 150 to one thousand. Theincrease showed as completely new betting objectsand as more versatile objects in the individual gameevents.
By reforming Fixed Odds Betting, Veikkaus wanted tomake sure that the sports events that Finns findinteresting and the forms of betting that are populararound the world are comprehensively accessible toits customers. The reform was carried out listeningclosely to the players’ wishes, and it was receivedwell. In all, Fixed Odds Betting was played for a totalof EUR 216.6 million (+9.1%) during the year underreview.
The FIFA World Cup in the summer showed asrecord-breaking sales in many instances. About half amillion Finns placed their bets on the World Cupgames, and the total World Cup game sales went upto EUR 28.2 million. The previous sales record wasexceeded by ca. 40%. In addition to the revised Fixed
Odds Betting, Live Betting also gained morepopularity than previously among the players duringthe World Cup. In all, live gaming with high eventfrequency increased by 63.6% during the year underreview, with a turnover of EUR 29.6 million.
Multibet, in turn, was revamped in July. To thecustomers, the most visible change was the newoption to play Super Multibets, in which the odds aresmaller but the prize amounts are bigger – as thecustomers had wished. Multibet was played for a totalof EUR 67.1 million (–5.4%) during the year underreview. The next game to go through a productrevamp will be Veikkaus’ oldest game, Football Pools.Its turnover was EUR 63.8 million (–9.8%) during theyear under review.
RResearesearch and prch and product deoduct devvelopmenelopmentt
Veikkaus spent a total of EUR 9.7 million (+24.5%) onresearch and product development during the yearunder review.
Veikkaus’ product development focused on thedevelopment of digital business. Improving the webstore and the games played on the web were amongthe central product development investments thataffected the financial result of the year under review.
SusSustainable grtainable groowth as thewth as therresponsibility objectivesponsibility objectivee
Veikkaus’ objective is to promote responsible gamingand attain sustainable growth. We pay specialattention to high-standard consumer protection andthe prevention of gambling addiction. We monitorgaming continuously from the perspective ofresponsibility and aim to create the best possibleoperating models for gaming management. Themeasures to promote responsible gaming costVeikkaus a total of EUR 3.8 million during the yearunder review.
The company’s core responsibility tool RaVa wasupdated for its contents and technology at thebeginning of the year. At the same time, Veikkaus’internal operating model and the responsibilities forthe ethical evaluation were brought up to date. Usingthe RaVa tool in the product development processeshelps us to ensure that the game products andservices ending up on the market are ethically soundand as responsible as possible.
In August and September Veikkaus carried out aprominent campaign about the dangers of gambling
CSR report and annual report 2014 91
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
addiction. The aim was to start debate aboutresponsible gaming and the disadvantages of gaming,as well as to encourage people to spot possiblegambling problems and seek help. The campaign,which covered many channels, reached a total of overa million Finns. Most of those who answered ourcustomer surveys felt it was good that Veikkausbrought up the drawbacks of gaming openly and triedto prevent problems.
Respect for the environment is a significant part ofVeikkaus’ responsibility principles. In its environmentalobjective set in 2009, the company was committed toreducing its carbon dioxide emissions by 35% by theend of 2013. According to the results received duringthe year under review, Veikkaus had exceeded itsenvironmental objective, reducing its emissions by47% in the period between 2009 and 2013. Theobjective activated Veikkaus’ organisation to introducemany improvements.
An extensive stakeholder survey, carried out inAugust, drew over 4,700 participants. The majority ofthe respondents were Veikkaus’ customers (89%).The survey aimed at analysing how Veikkaus couldoperate even more responsibly. As a result, wereceived over 3,000 ideas related to responsibility.The themes to attract most comments were theresponsibility of advertising, prize payout, and gamerestrictions. The transparency of profit distribution,and support to the underprivileged, children, andyoungsters, were cited as the most important things.The respondents gave Veikkaus a good responsibilitygrade 4.07 (on a scale from 1 to 5).
SStrtraategy and opertegy and operaations planningtions planningupdaupdatedted
Veikkaus’ strategy was updated in the spring. Theportfolios of several separate strategies werecombined into one and, at the same time, obsoleteparts were updated. In the same connection,operations planning was also made more simple andturned into a continuous strategic process.
For the period between 2014 and 2017, tenbenchmarks with a strong link to the strategy wereset, which are used for the quarterly monitoring ofhow the strategy is implemented. A more detaileddescription of the company strategy, monitoring, andthe benchmarks is provided in the Strategy section ofthe CSR Report.
PPersonnelersonnel
At the end of the year under review, Veikkaus had 332employees (-1), 88% of whom were salaried full-timeemployees and 12% of whom worked part-time. Themajority of the personnel (95%) had permanentemployment contracts. Women represented 51% andmen 49% of the personnel. More detailed personnelfigures and comparison figures from previous yearsare presented in the Personnel section of the CSRReport.
In 2014 20 new employees were hired and 21employees left the company. The average incomingturnover was 6.0% during the year under review(2013: 9.9%) and departing turnover 6.3% (2013:6.3%).
Veikkaus supports personnel wellbeing in many ways.Employees are supported by, e.g., comprehensiveoccupational healthcare, industrial safety, andactivities to promote personnel's working capacity.Veikkaus also employs an early intervention system.
According to a personnel survey carried out in earlyautumn, Veikkaus’ employees were mainly satisfiedwith their workplace (4.08 on a scale of 1 to 5). Thesurvey showed a positive trend (change +0.15 overthe year 2013).The functionality of Veikkaus’ organisation isevaluated annually from the perspective of howVeikkaus’ dream (vision) and strategy have beenrealised, as well as through the personnel survey andthree benchmarks – the result, the future, and theambiance.
Veikkaus’ compensation schedule covers the entirepersonnel, and its different forms are closelyconnected to the achievement of the company’sstrategic goals.
In 2014 Veikkaus’ personnel expenses totalled EUR27.9 million (+4.8%). Salaries accounted for EUR 22.1million (+4.2%), whereas the remaining EUR 5.8million (+7.0%) covered pension expenses andindirect personnel costs. The increase in salaryexpenses was due to, e.g., additional resourcing tothe reliability of the systems and digital sales, as wellas adopting longer opening hours.
Control and risk management
In accordance with the Lotteries Act (1047/2001),Veikkaus' lottery, pools, and betting operations aresupervised by the National Police Board workingunder the Ministry of the Interior.
CSR report and annual report 2014 92
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
Risk management at Veikkaus is part of the internalcontrol. Veikkaus estimates that the most significantrisks affecting the achievement of the objectives in2015 include the development of consumer demand,and the effects of the regulation of the gaming system.A more detailed review of control and riskmanagement is available in the CorporateGovernance Statement 2014.
FFuturuture pre prospectsospects
Veikkaus is committed to reinforcing responsibleoperations in different sectors, to continuous and long-term development, and cost-efficiency. However, thechanges in the overall economic situation andregulation continue to make the company’s operationssubject to insecurity. The illegal gaming operators onthe Internet that fall outside of the scope of officialsupervision also have a significant impact on thefuture development.
We believe that long-term development and courageto reform will guarantee a steady return to the benefit
of all Finns even in the future. We also believe that theyear 2015 will yield an even better result than that of2014.
Veikkaus' projected profit in the 2015 State Budget isEUR 541.1 million, of which EUR 515.6 million havebeen earmarked for return to the State. The companywill also return EUR 25.5 million at the minimum inundistributed prize funds from previous years to theMinistry of Education and Culture.
BoarBoard od of Dirf Directectors' prors' proposal foposal for theor thedisdistribution otribution of prf profitsofits
Veikkaus' Board of Directors proposes that EUR517,518,647.68 of the company's total profit of EUR520,368,647.68 for the financial year 2014 bereturned to the Ministry of Education and Culture, andthat EUR 2,850,000.00 be transferred to theUndistributed Prizes Fund.
CSR report and annual report 2014 93
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
Statement of comprehensive incomeNote 2014 2013
TURNOVER 1 1,959,489,093.94 1,858,364,821.54
Other operating income 3 1,209,881.73 781,949.68
Prizes 1 1,096,438,509.70 1,022,492,460.18
Lottery tax 104,181,031.39 99,763,241.61
Raw materials and services
Retail commissions 78,045,903.39 79,821,007.66
Payments to authorities and supervision fees 4,879,673.14 4,563,637.40
Playslips and lottery tickets 5,834,891.79 5,696,912.98
Drawing expenses and result information 9,776,685.84 8,653,327.23
Game event cooperation 3,896,514.58 3,692,490.21
Product advertising 18,330,220.91 17,203,615.16
Data communications 472,287.17 543,350.56
121,236,176.82 120,174,341.20
Expenses from employee benefits
Salaries and compensations 22,107,329.54 21,221,913.50
Pension expenses 4,044,412.66 4,192,825.88
Other indirect personnel expenses 1,759,718.94 1,230,979.53
27,911,461.14 26,645,718.91
Services purchased 5 34,893,367.95 32,432,684.00
Depreciation and write-down 4 9 10 24,433,036.93 21,083,220.69
Other operating expenses 6 32,366,623.63 31,382,576.27
OPERATING PROFIT 519,238,768.11 505,172,528.36
Financial income and expenses
Financial income 8 1,131,436.52 1,174,998.71
Financial expenses 8 1,556.95 669.71
1,129,879.57 1,174,329.00
PROFIT FOR THE FINANCIAL YEAR 520,368,647.68 506,346,857.36
Earnings per share *
Number of shares 498 498
Earnings per share 1,044,916.96 1,016,760.76
*Earnings per share were calculated by dividing the profit for the financial year by the number of shares.
CSR report and annual report 2014 94
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
Balance sheetNote 2014 2013
ASSETS
NON-CURRENT ASSETS
Tangible assets 9 30,299,729.07 30,669,221.46
Intangible assets 10 20,161,158.44 34,713,121.23
Investments held for sale 12 481,647.26 481,647.26
Other long-term receivables 12 12,185,291.00 5,316,220.00
CURRENT ASSETS
Advance payments 386,874,381.55 373,516,407.13
Receivables 13 15,451,045.14 28,570,795.19
Liquid assets and other short-term investments 14 269,821,703.73 262,356,054.17
TOTAL ASSETS 735,274,956.19 735,623,466.44
SHAREHOLDERS' EQUITY AND LIABILITIES
SHAREHOLDERS' EQUITY
Share capital 15 445,698.01 445,698.01
Undistributed prize funds 15 82,100,000.00 116,600,000.00
Profit for the financial year 520,368,647.68 506,346,857.36
Total shareholders' equity 602,914,345.69 623,392,555.37
LIABILITIES
LONG-TERM LIABILITIES
Liabilities from employee benefits 17 1,724,000.00 1,509,000.00
Other long-term liabilities 17 150,757.00 166,832.00
SHORT-TERM LIABILITIES
Advances for multi-week subscriptions 16 15,483,342.36 14,888,539.57
Trade payable 16 11,835,749.88 9,001,612.63
Winnings payable 16 48,941,125.01 35,869,328.87
Settlement debt to the State 16 20,543,839.67 20,267,327.27
Accruals and deferred income 16 24,533,443.40 26,608,562.86
Other short-term liabilities 16 9,148,353.18 3,919,707.87
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES 735,274,956.19 735,623,466.44
CSR report and annual report 2014 95
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
Cash flow statementEUR thousand Note 2014 2013
Cash flow from business operations
Operating profit 519,239 505,173
Adjustments
Business transactions involving no payment 24,067 21,327
Change in working capital
Change in non-interest-bearing receivables 13,120 -2,668
Change in trade and other payables 20,130 8,110
Dividends received 4 5
Interest received 1,128 1,170
Interest paid -2 -1
Net cash flow from business operations 577,685 533,116
Cash flow from investments
Investments in tangible and intangible assets 11 -16,759 -12,283
Sale of tangible and intangible assets 744 287
Loans granted 0 0
Net cash flow from investments -16,015 -11,997
Cash flow from financing
Returned to the Ministry of Education and Culture -554,205 -526,654
Net cash flow from financing -554,205 -526,654
Change in liquid funds and other short-term investments 7,466 -5,535
Liquid assets and other short-term investments at the beginning ofthe financial year
262,356 267,891
Liquid assets and other short-term investments at the end ofthe financial year
269,822 262,356
CSR report and annual report 2014 96
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
Statement of changes in shareholders' equity
EUR thousand Share capitalUndistributed
prize fundsRetainedearnings
Totalshareholders'
equity
Shareholders' equity 31 Dec 2012 446 136,815 500,803 638,065
Return to the Ministry of Education andCulture
-503,719
Transfer to the undistributed prizes' fund -2,915 2,915
Additional return to the Ministry ofEducation and Culture
-17,300
Profit for the financial year 506,347
Shareholders' equity 31 Dec 2013 446 116,600 506,347 623,393
Return to the Ministry of Education andCulture
-517,547
Transfer from the undistributed prizes'fund
-11,200 11,200
Additional return to the Ministry ofEducation and Culture
-23,300
Profit for the financial year 520,369
Shareholders' equity 31 Dec 2014 446 82,100 520,369 602,914
CSR report and annual report 2014 97
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
ACCOUNTING PRINCIPLES 2014CorporCorporaate prte profileofile
Veikkaus Oy is a Finnish lottery domiciled in the Cityof Vantaa. Veikkaus is a State-owned, public limitedcompany that operates in the administrative sector ofthe Finnish Ministry of Education and Culture. Thecompany's operations are regulated in accordancewith the Limited Companies Act and the Lotteries Act,according to which Veikkaus' task is to operatelotteries, and pools and betting games in such amanner that the legal protection of those engaging ingaming activities is guaranteed, abuse and criminalactivity are prevented, and the social problemsassociated with gaming are reduced. Veikkaus'gaming operations are supervised by the Ministry ofthe Interior.
The Board of Directors of Veikkaus Oy approvedthese financial statements for publication in itsmeeting of 9 February 2015. According to the LimitedLiability Companies Act, the owner has the right toapprove or reject or decide to make changes to thefinancial statements at the General Meeting followingtheir publication.
Basis oBasis of prf presenesentatationtion
The financial statements were prepared inaccordance with the IFRS standards effective on 31December 2014. The IFRS standards refer to theinternational accounting standards accepted for usewithin the EU.
The notes to the financial statements also comply withthe requirements of the Finnish Accounting Act andLimited Liability Companies Act, supplementing theIFRS standards.
Since 1 January 2014 Veikkaus has applied the newand revised IAS and IFRS standards, of which themost significant are related to consolidationregulations. These do not affect Veikkaus’ financialstatements, as Veikkaus does not prepare groupfinancial statements.
GenerGeneral ral remarksemarks
The figures in the financial statements, except for thebalance sheet and comprehensive income statement,are presented in thousands of euros and, unlessotherwise indicated in the accounting principles below,are based on the original acquisition costs.
Whilst preparing financial statements in accordancewith the international accounting standards, it isnecessary to make estimates and assumptions aboutthe future. These estimates have an effect on theasset and liability figures in the balance sheet, as wellas on the net profits and losses for the financial year.The most important estimates in Veikkaus' financialstatements concern the depreciation periods of fixedassets and the assumptions used for calculatingpension-based liabilities. The figures realized maytherefore deviate from these estimates. Judgementmust also be exercised in the application ofaccounting principles.
Items in fItems in fororeign curreign currencyency
Veikkaus' functional currency is the euro. Foreigncurrency business transactions have been recorded ineuros using the prevailing exchange rate on thetransaction date. Receivables and liabilities havebeen translated into the functional currency using theprevailing rate on the financial statement date. Profitsand losses arising from foreign currency transactionsand the translation of receivables and liabilities havebeen recorded through profit and loss.
The translation profits and losses of businessoperations are included in the respective items abovethe operating profit. The rates used in the translationof the items in foreign currency in the financialstatements are:
Currency Rate on the date of thefinancial statements
CAD 1.4063
CSR report and annual report 2014 98
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
PrPropertyoperty, plan, plant, and equipment, and equipmentt
Property, plant and equipment have been measuredat their original acquisition cost less the accumulateddepreciations in the balance sheet. The share of thecompany's own work, entered into intangible assets,is capitalised as part of the acquisition cost. Anasset's subsequent expenses are capitalised whenthey increase future financial benefit. Other expenses,such as standard maintenance and repair, arerecorded as costs in the income statement on thedate of occurrence. Any expenses incurred from thegame system's joint testing system during gameintroductions, as well as new eInstants are recordedas expenses on the date of occurrence.
Depreciation periods for property, plant andequipment (years):
• Buildings and structures 25
• Basic apartment renovations 5
• Property fixtures, machinery and equipment 5
• Other machinery and equipment 4
• IT equipment 4
Depreciation periods for intangible assets (years):
• IT software and capitalised development costs 4
The profits and losses resulting from the sale orsurrender of property, plant and equipment arerecorded as other operating income and expenses inthe comprehensive income statement. The balancesheet values of property, plant and equipment areexamined in the financial statements to detectpossible impairment.
Veikkaus evaluates, on each date of the financialstatements, whether there are implications towards agiven value of an asset being possibly impaired. Ifnecessary, an impairment test is performed, with thepossible outcome that an impairment loss isrecognized.
If an impairment loss is recognized in a given period,implications of whether the impairment loss could berevoked are also evaluated in the continuation and, ifnecessary, the revocation is performed on the basis ofrespective impairment test calculations, measured atthe value which the asset would have after regulardepreciations if the impairment loss had not beenrecorded in the first place.
Veikkaus does not have such balance-sheet itemsthat would give reason to perform annual impairmenttests.
RResearesearch and dech and devvelopmenelopmentt
Research costs are recorded as expenses for thefinancial year during which they occurred. Expensesrelated to the development of new products, offerings,and processes are capitalised if the intangible assetresulting from the development work will generatefuture financial benefit. Further, any costs incurred bydevelopment must be reliably definable.
LLooyyal Cusal Custtomer Promer Progrogrammeamme
Veikkaus has a Loyal Customer Programme in placeenabling customer registration. The Loyal CustomerProgramme does not contain any benefits based onpurchases. Thus, Veikkaus' Loyal CustomerProgramme does not comply with the IFRS standardIFRIC Interpretation 13 Customer loyaltyprogrammes.
LLeaseseases
In accordance with the rental agreements made byVeikkaus, the lessor retains the risks and benefits ofownership, and payments made under operatingleases are charged to the comprehensive incomestatement on straight-line basis over the period of thelease.
Financial asseFinancial assets and liabilitiests and liabilities
Financial assets are divided into different categoriesat the time of acquisition. The categorization dependson the purpose the financial asset has been acquiredfor. The sales and purchases of financial assets arerecorded on the transaction date.
Long-term investments held for sale include stocks,shares and marketable interest instruments. They aremeasured at fair value and the changes in value andrecorded as other items of the comprehensive incomestatement. Untraded stocks are measured atacquisition cost, when their fair value cannot bedefined reliably.
Loans and other receivables include sales and otherreceivables, as well as bank deposits. The differencebetween retailers' sales and retail commissions andthe prizes they pay out is recorded under salesreceivables.
CSR report and annual report 2014 99
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
The loans and other receivables group, short-terminvestments held for sale, and financial liabilities haveshort maturity periods and their fair values aretherefore considered to correspond to their bookvalue.
Short-term liabilities with no interest included on thefinancial liabilities are recorded at fair value in thefinancial statements. At a later date, they are recordedinto periodical acquisition costs by applying theeffective interest method.
AdvAdvancance pae paymenyments tts to the Miniso the Ministry otry offEducaEducation and Culturtion and Culturee
Veikkaus makes quarterly advance payments on itsfull-year result to its owner. The advance paymentsare presented in the current assets in the balancesheet. Following a decision by the General Meeting,the result for the financial year is charged from theshareholders' equity.
PPosost-emplot-employmenyment benefitst benefits
In accordance with the IFRS, pension schemes areclassified as either defined contribution or definedbenefit plans. Defined contribution schemes includethose in which Veikkaus pays fixed amounts to apension company without any obligation to makeadditional payments even if the fund lacks sufficientassets to pay the pensions. Payments made todefined contribution schemes are recorded aspension expenses in the comprehensive incomestatement. Payments made to the TyEL pensioninsurance scheme are regarded as payments to adefined contribution plan.
The remaining pension schemes are defined benefitplans. For them, a liability based on certainassumptions is recorded in the balance sheet,illustrating the future pensions to be paid on the basisof the scheme. The pension cost recorded in theincome statement illustrates, e.g., the increase inliabilities arising from the work performed bypersonnel during the financial year.
Items recorded from defined benefit schemes arebased on actuarial calculations. These calculationsare made on the basis of assumptions concerning, forexample, the termination of employment of personnelbelonging to the pension scheme before the age ofretirement; the future level of salaries and thediscount rate used in the calculations. The costsbased on service during the financial period and the
net interest of the net defined benefit liability arerecorded through profit and loss and presented in theliabilities from employee benefits. The items incurredby the restatement of the net defined benefit liability(or asset) are recorded as other items in thecomprehensive income statement.
LLong-term emploong-term employyee benefitsee benefits
A one-time payment equivalent to a month's grosssalary is paid as a bonus when an employee hasbeen in the company's employ for 30, 35, 40, and 45years. The compensation liability has been calculatedon the basis of when the employees joined thecompany, by discounting the compensation liabilityrealized at the end of each year to the present.Liabilities based on long-term employee benefits areincluded in the other long-term liabilities in thebalance sheet.
Other short-term liabilities –Other short-term liabilities – the prizthe prizeefundfund
The prize fund is not an actual fund, but thecompany's liability to players. In prize distribution,both the cents accumulated through the rounding ofprize sums and the undistributed share of the totalprizes of games, as determined in the gaming licence,are immediately transferred to the prize fund. After theexpiry of the claiming period of one year, the prizesleft unclaimed in the different games are transferred tothe fund. The assets in the prize fund are used foradditional prize distributions in the games in question.In accordance with Veikkaus' gaming licence, thecompany is obliged to distribute the prize sums intheir entirety to players.
TTurnournovverer
The turnover from game sales is divided according tothe draw date.The draws take place either weekly or daily.
Other operOther operaating incting income and eome and expensesxpenses
Other operating income includes indemnifications,profit from the sale of assets, and profits fromoperations other than those related to the company'sactual business operations, including income fromleasing and the messaging service.Other operating expenses include losses from thesale of assets and expenses related to actualbusiness operations.
CSR report and annual report 2014 100
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
PrizPrizeses
The prizes, as determined in the rules of play, areentered as turnover in the comprehensive incomestatement. In accordance with Veikkaus' gaminglicence, both unclaimed prizes from the previous yearand profit from the rounding of prize sums shall bepaid out on later rounds of the games in question,during the following calendar year at the latest.
RaRaw maw materials and servicterials and serviceses
The payments to authorities and supervision feesinclude game supervision fees, expenses incurredfrom problem gambling research and monitoring, andthe expenses of the Finnish Gambling helplinePeluuri.
Expenses incurred from the printing of lottery tickets,playslips and receipt rolls, as well as those associatedwith the Veikkaus Card, are recorded as expenses onthe acquisition date.
Draw and result information expenses include costsrelated to TV cooperation agreements and otherexpenses associated with the publishing of results.
Game event cooperation covers the expenses arisingfrom the right to use information about the event inquestion. These expenses may be contractualcommitments or they may be entirely determinedaccording to the games' round-specific or annualturnover.
The product advertising expenses include mediaspace purchases related to product advertising, aswell as production and planning expenses.
OperOperaating prting profitofit
Operating profit or loss consists of the turnover andother income from business operations, less theprizes paid out and the lottery tax, expensesassociated with raw material and services,employment benefits, purchase of services, as well asdepreciations and possible impairment losses.
TTaxaxeses
The lottery tax is 12% of the accounted sum that isallocated to a calendar month from the sales ofgames and lottery tickets less the prizes recorded asexpenses on the basis of these tickets. The funds thatare withdrawn from or paid into the prize fund during
the calendar month are added to or subtracted fromthe aforementioned sum.
In accordance with Section 59 of the Value Added TaxAct, Veikkaus is not VAT liable. The company'sexpenses and investments include VAT at the currentrate.
In accordance with Section 21 of the Income Tax Act,Veikkaus is only liable to pay income tax on incomethat is not referred to as business income in theLottery Tax Act. The financial statements of VeikkausOy do not contain any income that is subject toincome tax.
ApplicaApplication otion of new or rf new or reevisedvisedsstandartandards and inds and interprterpreetatationstionseeffffectivective in the upce in the upcoming financialoming financialyyearsears
IFRS 15 Revenue from Contracts with Customers(effective from 1 January 2017 or financial periodsstarting thereafter). The new standard includes five-step guidelines on the recording of revenue fromcontracts with customers, replacing the current IAS 18and IAS 11 standards and the related interpretations.Recording the revenue can be done gradually or at agiven point of time, and the core criterion is thetransfer of the control. The standard also increasesthe number of the notes to be presented.
IFRS 9 Financial instruments and the amendmentsmade to it (effective from 1 January 2018 or financialperiods starting thereafter). The new standard willreplace the current standard IAS 39 FinancialInstruments: Recognition and Measurement. TheIFRS 9 will change the categorization andmeasurement of financial instruments, and it includesa new credit-loss based model for the assessment ofthe depreciation of financial instruments.
The classification and measurement of financialliabilities correspond largely to the requirements of thecurrent IAS 39. As regards hedge accounting, thereare still three types of it. Hedge accounting can covermore risk positions than before, and the hedgeaccounting principles have been harmonised with riskmanagement.
Veikkaus will evaluate the possible effects of the newstandards during the next financial period.
According to the company’s evaluation, other changesto the standard that have been published will notaffect the financial statements.
CSR report and annual report 2014 101
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
1.Turnover by games and game groupsEUR thousand 2014 % ofturnover 2013 % ofturnover
Lotto 431,131 22.0 480,638 25.9
Viking Lotto, VikingPlus 84,706 4.3 102,128 5.5
Eurojackpot 160,514 8.2 106,444 5.7
Joker 101,216 5.2 107,811 5.8
Total jackpot games 777,566 39.7 797,021 42.9
Scratch tickets 138,752 7.1 133,491 7.2
Total scratch tickets 138,752 7.1 133,491 7.2
Keno, KingKeno 394,234 20.1 383,403 20.6
Neighbours 15,497 0.8 0 0.0
Syke 5,667 0.3 4,119 0.2
Pore 8,908 0.5 1,156 0.0
eInstants 119,347 6.1 69,808 3.8
eBingo 71,737 3.7 65,446 3.5
Total arcade games, Keno, andNeighbours
615,391 31.4 523,933 28.2
Total daily games 754,143 38.5 657,424 35.4
Fixed Odds Betting 216,615 11.1 198,621 10.7
Result Odds Betting 40,245 2.1 35,322 1.9
Multibet 67,112 3.4 70,971 3.8
Winner Odds Betting 10,340 0.5 9,732 0.5
Totals sports games, betting games 334,312 17.1 314,646 16.9
Football Pools 63,770 3.3 70,684 3.8
MultiPools 79 0.0 489 0.0
Total sports games, pools games 63,849 3.3 71,173 3.8
Live Winner Odds Betting 29,619 1.5 18,101 1.0
Total Live games 29,619 1.5 18,101 1.0
Total sports games 427,780 21.8 403,920 21.7
Total game groups 1,959,489 100.0 1,858,365 100.0
The turnovers of the games Keno, KingKeno, Neighbours, Syke, Pore, eBingo, Fixed Odds Betting, and Multibetplayed between 29–31 Dec 2014, and the turnovers of games Result Odds Betting, Winner Odds Betting, and LiveWinner Odds Betting are included in the 2014 turnover in accordance with their draw/result dates.
CSR report and annual report 2014 102
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
2. Development of financial result 2010–2014EUR thousand 2014 2013 2012 2011 2010
Turnover 1,959,489 1,858,365 1,775,812 1,792,700 1,689,902
Game margin 863,051 835,872 825,808 831,661 801,930
% of turnover 44.0 % 45.0 % 46.5 % 46.4 % 47.5 %
Operating profit 519,239 505,173 497,922 510,694 501,420
% of turnover 26.5 % 27.2 % 28.0 % 28.5 % 29.7 %
Result before appropriations 520,369 506,347 500,803 514,480 503,724
% of turnover 26.6 % 27.3 % 28.2 % 28.7 % 29.8 %
Result for the financial year 520,369 506,347 500,803 514,480 503,724
% of turnover 26.6 % 27.3 % 28.2 % 28.7 % 29.8 %
CSR report and annual report 2014 103
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
3. Other operating incomeEUR thousand 2014 2013
Rental income 30 34
Messaging service income 15 26
Indemnifications 203 220
Refunds in previous financial years 551 290
Gains on the sale of fixed assets 126 201
Gains on the sale of a housing stock 234 0
Other income 52 11
Total 1,210 782
CSR report and annual report 2014 104
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
4. DepreciationEUR thousand 2014 2013
Intangible assets 20,027 14,871
Buildings and structures 1,000 1,162
Machinery and equipment 3,405 5,050
Total 24,433 21,083
Fixed assets are subject to straight-line depreciation over their economic life.In 2014 a one-off depreciation of EUR5.8 million was recorded on assets which were not expected to generate income in the future years. Lands, housingstocks, and works of art are not subject to depreciation.
CSR report and annual report 2014 105
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
5. Services purchasedEUR thousand 2014 2013
Services purchased abroad, IT and other 17,100 16,710
Services purchased, IT 10,441 8,028
Services purchased, other 7,352 7,695
Services purchased 34,893 32,433
Auditors' fees included in services purchased
Audit 41 44
Other services 48 125
Total 89 170
6. Other operating expensesEUR thousand 2014 2013
Other advertising and marketing expenses 7,781 6,600
Other voluntary personnel expenses 1,166 1,013
Travel expenses 888 752
Representation and negotiation expenses 341 338
Car expenses 358 404
Supplies and freight charges 2,973 3,412
Machinery and equipment 5,563 5,341
Real estate expenses 1,912 2,057
Maintenance and servicing of software 7,165 7,415
Banking expenses 3,026 2,667
Telephone expenses 448 430
Other office expenses 745 954
Total 32,367 31,383
CSR report and annual report 2014 106
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
7. Research and development expensesEUR thousand 2014 2013
R & D expenses 10 8
R & D investments 5 7
Total 15 15
CSR report and annual report 2014 107
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
8. Financial income and expensesEUR thousand 2014 2013
Dividend income from investments held for sale 4 5
Interest income from investments held for sale 94 143
Interest income from deposit and bank accounts 1,020 1,004
Other financial income 14 23
Total financial income 1,131 1,175
Interest expenses 2 1
Total financial expenses 2 1
Total 1,130 1,174
CSR report and annual report 2014 108
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
9. Tangible assets and depreciation
EUR thousandLand and
water
Buildingsand
structures
Machineryand
equipment OtherAcquisitionin progress Total
Acquisition cost 1 Jan 2014 1,906 28,844 31,286 629 242 62,907
Increase 0 0 745 0 3,673 4,417
Decrease 0 -688 -517 0 -3 -1,208
Transfers between items 0 0 3,013 0 -3,013 0
Acquisition cost 31 Dec 2014 1,906 28,156 34,527 629 899 66,116
Accumulated depreciation 1 Jan2014
- -9,626 -22,611 - - -32,238
Depreciation for the financialyear
- -1,000 -3,405 - - -4,406
Accumulated depreciation ondecreases
- 467 360 - - 827
Accumulated depreciation 31Dec 2014
- -10,160 -25,657 - - -35,816
Carrying amount 31 Dec 2014 1,906 17,996 8,870 629 899 30,300
EUR thousandLand and
water
Buildingsand
structures
Machineryand
equipment OtherAcquisitionsin progress Total
Acquisition cost 1 Jan 2013 1,906 30,526 30,093 629 966 64,120
Increase 0 0 752 0 3,054 3,806
Decrease 0 -2,237 -2,776 0 -1 -5,014
Transfers between items 0 555 3,217 0 -3,777 -5
Acquisition cost 31 Dec 2013 1,906 28,844 31,286 629 242 62,907
Accumulated depreciation 1 Jan2013
- -10,701 -21,425 - - -32,126
Depreciation for the financialyear
- -1,162 -4,053 - - -5,215
Accumulated depreciation ondecreases
- 2,237 2,866 - - 5,103
Accumulated depreciation 31Dec 2013
- -9,626 -22,611 - - -32,238
Carrying amount 31 Dec 2013 1,906 19,218 8,674 629 242 30,669
CSR report and annual report 2014 109
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
10. Intangible assets and depreciation
2014
Software andcapitalised
developmentcosts 2013
Software andcapitalised
developmentcosts
Acquisition cost 1 Jan 2014 93,884 Acquisition cost 1 Jan 2013 87,019
Increase 5,475 Increase 8,484
Decrease 1,966 Decrease 1,619
Acquisition cost 31 Dec 2014 97,393 Acquisition cost 31 Dec 2013 93,884
Accumulated depreciation 1 Jan2014
59,171 Accumulated depreciation 1 Jan2013
44,300
Depreciation for the financial year 20,027 Depreciation for the financial year 16,490
Accumulated depreciation ondecreases
1,966 Accumulated depreciation ondecreases
1,619
Accumulated depreciation 31 Dec2014
77,232 Accumulated depreciation 31 Dec2013
59,171
Carrying amount 31 Dec 2014 20,161 Carrying amount 31 Dec 2013 34,713
Carrying amount 1 Jan 2014 34,713 Carrying amount 1 Jan 2013 42,719
The proportion of internallydeveloped work of the capitalisedacquisition cost is minor and is notpresented as a separate item.
CSR report and annual report 2014 110
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
11. Cash flow from investments and paymenttransactions in progressEUR thousand 2014 2013
Software 6,539 13,743
IT equipment 2,811 3,116
Office equipment 202 82
Fittings, fixtures, and other equipment 0 0
Real estate
Basic improvements 0 555
Machinery, equipment, fittings 0 20 575
Shares in housing cooperatives 0
Company cars 745 752
Works of art 0 0
Long-term receivables 6,869 0
Investments in progress -407 -5,983
Total 16,759 12,283
CSR report and annual report 2014 111
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
12. Investments held for sale and other long-termreceivablesInvestments held for sale
EUR thousand 2014 2013
Unlisted stock investments 482 482
Total 482 482
Other long-term receivables
EUR thousand 2014 2013
Security Deposit, Eurojackpot 12,185 5,316
Total 12,185 5,316
CSR report and annual report 2014 112
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
13. Short-term receivablesEUR thousand 2014 2013
Trade receivables 10,079 21,773
Accrued income 1,631 2,440
Other receivables 3,742 4,358
Total 15,451 28,571
The trade receivables consist of uncharged game fees from retailers. The charging period runs from Monday toSunday and the amount for the previous week is charged on Wednesdays on the basis of the payment material.The total number of the points of sale is 3 810. Due to the nature of these trade receivables, there is traditionally nocredit risk. On the closing date, the balance sheet values of the trade receivables do not deviate from their fairvalues.
KEY ITEMS OF ACCRUED INCOME
EUR thousand 2014 2013
Periodic interest income 191 252
Periodic cooperation agreement expenses 23 175
Gtech receivables 8 164
Insurance refunds 0 323
Eurojackpot draw project 507 532
Periodic licence fees 0 779
Other accrued income 104 215
Supervision expenses, State supervision 798 0
Total 1,631 2,440
CSR report and annual report 2014 113
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
14. Liquid assets and other short-terminvestmentsEUR thousand 2014 2013
Cash in hand and at bank 34,733 14,824
Investments held for sale 16,989 33,632
Loans and receivables 218,100 213,900
Total 269,822 262,356
The investments held for sale are certificates of deposit with short maturity.
The loans and receivables are deposits with short maturity.
Principles of financial risk management
In its business operations Veikkaus is exposed to certain financial risks of a limited scale. The principal financialrisks are interest rate risk and CCR (credit risk). To manage these financial risks, Veikkaus has a risk managementpolicy in place, approved by the Board of Directors. Exchange rate risk and liquidity risk are not significant due tothe nature of Veikkaus’ operations.
Interest rate risk
Short-term financial investments expose Veikkaus to an interest rate risk, which is, however, of minor significance.Income and operative cash flows are largely independent of changes in market interest rates.
Credit risk
In its investing activities, Veikkaus complies with the guidelines approved by the Board of Directors. According tothese guidelines, investments are made by securing the capital without exchange rate risks and for a maximum offive years. Investment in shares is not permitted under the investment principles.
The credit risk related to receivables from retailers is largely diversified, and therefore does not involve a significantcredit risk.
CSR report and annual report 2014 114
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
15. Shareholders' equity and equity managementThe share capital is EUR 445 698.01 and there are 498 shares.
UNDISTRIBUTED PRIZES' FUND
The difference between the profit for the financial year and the return to the Ministry of Education and Culture isentered into the undistributed prizes' fund in accordance with a decision by the General Meeting. The GeneralMeeting decides how the undistributed prizes' fund shall be used, and the Ministry of Education and Culturedistributes the funds to the beneficiaries at a later date.
According to a decision by the Council of State, the undistributed prizes' fund can total a maximum of EUR 200million.
On the closing date, the undistributed prizes' fund totalled EUR 82.1 million, including EUR 37.2 million from 2010and EUR 44.9 million from 2011. The undistributed prizes' fund includes EUR 25.5 million of additional returnincluded in the State Budget 2015.
CSR report and annual report 2014 115
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
16. Short-term liabilitiesEUR thousand 2014 2013
Advances for multi-week subscriptions 15,483 14,889
Trade payable 11,836 9,002
Accruals and deferred income
Allocated personnel expenses 7,770 6,836
Accrued winnings payable 9,920 11,139
Expenses of game system maintenance, uninvoiced proportion 3,223 3,290
Other accruals and deferred income 3,620 5,343
Total 24,533 26,609
Winnings payable 48,941 35,869
Settlement debt to the State
Lottery tax 19,221 18,712
Withholding tax liability 544 539
Social security liability 34 32
Value-added tax 745 983
20,544 20,267
Other short-term liabilities 9,148 3,920
Total 130,486 110,555
Winnings payable include uncashed prizes and return payments on betting games, as well as the funds depositedin the Internet players' game accounts.
Other short-term liabilities include, for example, prize funds. In the balance sheet of 31 Dec 2013 these fundstotalled EUR 1.1 million. In 2014 a total of EUR 18.9 million of prize funds were accumulated and they were used topay out a total of EUR 6.1 million of prizes in accordance with the Government Decree on Lotteries and a total ofEUR 7.8 million of other prizes during the financial period. The prize funds totalled EUR 6.1 million in the balancesheet of 31 Dec 2014.
CSR report and annual report 2014 116
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
17. Liabilities from employee benefitsPension liabilities
The defined benefit pension schemes include additional pensions that enable some of Veikkaus' employees toretire at an earlier age without losing part of their pension. Certain pension schemes were granted to employeeswho joined Veikkaus before 1985 and somewhat different schemes to employees who joined before 1994.Thecommitment given to the insured is recorded under liabilities in the balance sheet, while the insurance company'sproportion of this commitment is presented under assets. Pensions and paid-up policies are pension indexadjusted. The costs incurred are borne entirely by Veikkaus, because the insurance company has estimated itscompensation at zero. In the insurance arrangement, the assets are calculated using the same discount rate as theliabilities; consequently, any change in the discount rate will not result in material risk. Similarly, an increase in lifeexpectancy will not result in any material risk because the insurance company bears the majority of the impact ofincrease life expectancy. Meanwhile, Veikkaus is fully liable for the increase in pensions; for example, an increaseof 0.5% in the pension index would raise the liability by 6.7%, while a decrease of 0.5% would lower the liability by6.0%.
EUR thousand 2014 2013
Pension liabilities in the statement of comprehensive income
Defined benefit pension liabilities in the income statement
Costs based on service during the financial period 50 60
Net interest expenses 41 52
Total 91 112
Items arising from restatement 379 -137
Reconciliation of the net defined benefit liability in the balance sheet
Defined benefit liability 3,594 3,462
Fair value of assets 1,870 1,953
Net defined benefit liability in balance sheet on 31 Dec 1,724 1,509
Net defined benefit liability on 1 Jan 1,509 1,882
Recorded in income statement 91 112
Total items arising from restatement recorded in the statement ofcomprehensive income
379 -137
Employer's contributions to the plan -255 -348
Net defined benefit liability in balance sheet on 31 Dec 1,724 1,509
Changes in the net defined benefit liability in the balance sheet
Defined benefit liability on 1 Jan 3,462 3,353
Costs based on service during the financial period 50 60
Interest expenses 98 94
CSR report and annual report 2014 117
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
Items arising from restatement
Gains (–) / losses (+) from changes in population statistical assumptions 0 0
Gains (–) / losses (+) from changes in financial assumptions 0 0
Experience-based gains (–) / losses (+) 409 365
Benefits paid -425 -410
Defined benefit liability on 31 Dec 3,594 3,462
Changes in the fair value of the funds in the scheme
Fair value on 1 Jan 1,953 1,471
Interest income 57 42
Gain from the funds in the scheme (excluding items included in interestexpenses/income)
30 502
Employer's contributions to the plan 255 348
Benefits paid -425 -410
Fair value on 31 Dec 1,870 1,953
The amount the company expects to pay into the defined benefit plans in2015 (EUR thousand)
304 300
No information is available on the assets included in the plan, nor can theybe allocated to various asset groups since the assets are held by theinsurance company.
Most significant actuarial assumptions
Discount rate 1.8 % 3.0 %
Expected future pay rise 3.0 % 3.0 %
Increase in pensions 2.1 % 2.1 %
Duration based on the weighted average of the defined benefit liability 11.0 9.0
OTHER LONG-TERM EMPLOYEE BENEFITS: BONUS FOR YEARS OF SERVICE
Veikkaus grants its personnel a bonus for years of service, and this is classified as a long-term employee benefit.
Liability recorded in the balance sheet
EUR thousand 2014 2013
At the beginning of the financial year 167 168
Change -16 -1
At the end of the financial year 151 167
CSR report and annual report 2014 118
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
18. Related party transactionsVeikkaus' related parties include the CEO, the Executive Team, the Board of Directors, the Supervisory Board, andthe other state-owned companies.
Salaries paid, compensations and employee benefits
EUR thousand 2014 2013
CEO 450 373
Other members of the Executive Team* 1,024 1,054
Board of Directors 187 193
Supervisory Board 55 55
Total 1,715 1,675
The Executive Team had six members at the end of the financial year 2014 and seven members at the end of 2013.
The salaries paid include full-year salaries plus the performance-based bonuses.
The CEO's notice period is six months if notice is given by the company and three months if notice is given by theCEO. If certain criteria specified in the CEO contract are met, the CEO is entitled to a severance pay correspondingto six months' salary. The CEO's retirement age is 65 years.
The notice period of Executive Team members is the period specified in the Employment Contracts Act ifemployment is terminated by the employer, and two months if terminated by the employee. When certain criteriaare met, members of the Executive Team are entitled to a severance pay corresponding to nine months' salaryupon termination of employment.
The CEO and other management enjoy ordinary employee benefits. Company management are entitled to a carand telephone benefit in line with the company's current criteria. The management are not entitled to additionalpension or stock options.
Other related party transactionsVeikkaus may purchase goods or services from other state-owned companies. The purchase prices and deliveryconditions for these goods and services are the same as for any other group of customers, and the volume of thesepurchases is small.
CSR report and annual report 2014 119
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
19. Other leasing agreements and contingentliabilitiesEUR thousand 2014 2013
Other lease payments due in a year 0 18
Most vehicle lease agreements are made for 4 years. New agreements have not been made.
Veikkaus has agreed to purchase 45 person years for the maintenance and development of the gaming system onan annual basis until the end of 2018. In the event that the contract should be terminated prematurely after 1 July2015, Veikkaus has agreed to purchase 23–45 person years in one year.
On 31 Dec 2014, Veikkaus had a total of EUR 38 000 in guarantor's liabilities related to personnel loans from thecompany's financial services office.
CSR report and annual report 2014 120
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.
20. Signatures of the financial statements andthe Board of Directors' reportVantaa, 9 February 2015
Suvi-Anne Siimes Lauri Veijalainen
Chairman of the Board Vice Chairman of the Board
Leena Harkimo Riitta Kaivosoja
Eva Liljeblom Tero Ojanperä
Alf Rehn Jussi Saramo
Juha Koponen
President and CEO
A report on the audit has been issued today.
Helsinki, 12 February 2015
KPMG Oy Ab
Sixten Nyman, Authorised Public Accountant
CSR report and annual report 2014 121
This is self-produced pdf document and may not be as comprehensive as the complete Corporate Social Responsibility Report and Annual Report.