Corporate Governance

StrongPoint ASA’s objective is to create the greatest possible value for its shareholders over time. Good corporate governance is vital to the success of StrongPoint ASA. Thus, corporate governance is a key concern for StrongPoint’s Board and employees, and in StrongPoint’s relations with its underlying companies. The Board has reviewed and updated the company’s corporate governance practice. It is in line with the Accounting Act, paragraph 3-3b and the Norwegian Code of Practice for Corporate Governance published in the revised version in October 2010, and amendments and adjustments to the recommendation issued in October 2012.  The Board’s overall presentation of StrongPoint’s corporate governance policy follows. The presentation adheres to the same order of topics as the fifteen items in the Code of Practice recommendations. There is a great deal of concurrence between the recommendations and StrongPoint’s practice. Deviations from Code recommendations are listed in the table below and discussed under the item in question.

1. Implementation and reporting on corporate governance

StrongPoint ASA’s corporate governance principles are determined by the Board of Directors and are set forth in the company’s management documents.

The Board’s role should be based on the principle of independence in relation to the executive management and the principle of equality and responsibility towards the company’s shareholders. The company’s shares are freely tradable and the Board/executive management considers it a priority to focus on activities that strengthens the liquidity of its shares. The company’s shareholder policy is based on the principle of one share – one vote. Related to potential acquisitions and restructuring situations the Board will exercise particular concern so that all shareholder’s values and interests are considered closely. One of the Boards main tasks is to ensure that the company is based on an optimized capital structure. Equity transactions, including mandates of rights issues and private placements, are to be justified in terms of extent, form and timing.

The Board and executive management must ensure that the company’s information politics are carried out such a matter that information regarding the company is to be published correctly, comprehensive and timely, to provide as correct pricing of the company’s share as possible. Further the information policy should give shareholders the best available foundation to form decisions related to investments and voting at general meetings as possible.

Values, ethical guidelines and guidelines for corporate social responsibility

The Group’s operations shall be conducted in accordance the company’s values, ethical guidelines and guidelines for social responsibility determined by the Board and Executive Management. In addition we shall through our activities contribute to solutions on local and global societal challenges.

StrongPoint ASA’s ethical guidelines, guidelines for corporate social responsibility and procedures for whistle blowing are presented on the company’s website.

2. Business

The company’s business objective is described in the company’s articles of association.

StrongPoint ASA’s mission is to be a leading developer, manufacturer, integrator and marketer of retail technology with a focus on cash handling solutions. The business objective ensures that shareholders have control of the business and its risk profile, without limiting the Board or management’s ability to carry out strategic and financially commercial correct decisions within the defined purpose.  The company’s objectives and main strategies are presented in the annual report and the Board of Directors’ report.

3. Equity and dividends

Equity

The Group’s equity as of 31 December 2016 amounted to NOK 321.0 million, corresponding to an equity ratio of 48.7 percent.

The company’s share capital is NOK 27 513 145, divided into 44.376.040 shares with a nominal value of NOK 0,62.

Dividends

StrongPoint’s shareholders should over time get a competitive return on their investment through a combination of cash dividends and increased value of their shares.

When deciding the annual dividend level, the board of directors will take into consideration expected cash flows, investments in organic growth, plans for growth through mergers and acquisitions, and needs for appropriate financial flexibility. In addition to cash dividends, StrongPoint ASA may buy back shares as part of its total distribution of capital to the shareholders.

Board authorizations

The Board’s proposals for future Board authorizations accord with the recommendations with one exception. This is the Board’s authorization to increase share capital of up to 4,500,000 shares that are not limited to specified conditions. The authorization is valid until the next annual general meeting.

The Board has authorizations to acquire treasury shares at par value of up to NOK 2,728,000 and an overall capital increase of up to 4,400,000 shares (the authorizations are valid to 30 June 2017) are however not limited to the defined circumstances. The Board has asked the General Assembly for authorization to increase the Groups maneuverability.

4. Equal treatment of shareholders and transactions with close associates

The company has a single class of shares, and all shares carry the same rights in the company. Equal treatment of all shareholders is crucial. Transactions in own (treasury) shares are executed on the Oslo Stock Exchange, except for the repurchase of shares towards the shareholders with 500 shares or fewer. In the event of material transactions between the company and a shareholder, Board member, member of executive management, or a party closely related to any of the beforementioned, the Board will ensure that independent valuations are available.

Board members and members of executive management shall report to the chairman of the board and the group CEO if they directly or indirectly has a significant interest in agreements entered into by StrongPoint ASA or companies where StrongPoint ASA has siginificant interests.

Additional information on transactions with related parties appears in note 18 in the consolidated accounts.

Existing shareholders shall have pre-emptive rights to subscribe for shares in the event of share capital increases, unless otherwise indicated by special circumstances. If the pre-emptive rights of existing shareholders are waived in respect of a share capital increase, the reasons for such waiver shall be explained by the board of directors and be published through Newsweb, the Oslo Stock Exchange (ticker: STRONG) and on the company website.

5. Freely negotiable shares

StrongPoint ASA’s shares are freely negotiable. No restrictions on transferability are found in the company’s articles of Association.

6. General meetings

Meeting notification, registration, and participation

The company encourages all shareholders to participate in general meetings. Notice of general meetings and comprehensive accompanying information are made available to shareholders on the company’s website and sent to shareholders within the deadlines stated in the Norwegian Public Limited Liability Companies Act. The deadline for shareholders to register to attend a general meeting is set as close to the date of the meeting as possible, normally two or three days prior to the meeting.

The company is of the opinion that no adequate systems for handling electronic participation at general meetings are currently available. Thus, the Board has decided not to allow such participation at StrongPoint ASA general meetings.

Proxy

Shareholders who are unable to attend a meeting may vote by proxy. The company has prepared proxy forms that enable shareholders to vote on individual issues. Procedures for using such proxies are available on the company’s website.

The company does not appoint an independent proxy to vote on behalf of shareholders. The company considers shareholders’ interests are adequately maintained by the option of participation via an appointed proxy or by shareholders authorizing the Chairman of the Board or a person designated by him to vote according to specific proxy instructions.

Procedures for attendance registration and granting proxy are presented in the notice of meeting, on the attendance and proxy form.

Meeting chair, voting, etc.

Board members, the chairman of the nomination committee, and the company’s auditor are encouraged to attend general meetings. The Board elects indefinitely to deviate from the recommendation that the Board should look at that “there are arrangements to ensure an independent chairman of the general meeting “, and continue to practiced that the general meeting are led by the Chairman of the Board or one elected by the Annual General Meeting.

The nomination committee focuses on composing a board that works as a team, that meets legally established regulations as to equal gender representation on boards of directors, and whose members’ experience and qualifications complement each other.

Minutes of general meetings are published as soon as practical via Newsweb, the Oslo Stock Exchange (ticker: STRONG) and on the company website.

7. Nomination committee

The company has a nomination committee, as stated in the articles of associations which comprises of: Kim Wahl (Chairman), Erik Bergöö and Egil Wickstrand Iversen. The nomination committee is to comprise no fewer than three members. Each member is normally elected for a two-year period. The composition of the nomination committee should reflect the interests of shareholders and independence from the Board and executive management.

Nomination committee members and its chairman are elected by the company’s general meeting, which also determines remuneration payable to committee members.

Pursuant to StrongPoint ASA’s articles of association, the nomination committee recommends candidates for election to the Board of Directors. In addition the nomination committee promotes proposal for Chairman. The nomination committee also makes recommendations as to remuneration of Board members. The nomination committee is to justify its recommendations, how it takes care of the shareholders interests and the companys need for expertise, capacity and diversity. It should be taken into account to enable the Board to function effectively as a collegiate organ. Proposals for Board candidates are to be submitted in reasonable time before the general meeting.

The annual general meeting will, in accordance with the Code of Practice, be presented with the guidelines governing the duties of the nomination committee for approval.

8. Corporate assembly and board of directors, composition and independence

The company does not meet the requirements to have a corporate assembly. Pursuant to the company’s articles of association, the Board comprises between 3 and 12 members. Board members are elected for a period of one year.

The Board members are independent of the company’s executive management and its significant business associates.

No member of the company’s executive management is a Board member. CEO Jørgen Waaler has ownership interests in StrongPoint ASA privately and trough his fully owned company Waaler AS

The current composition of the Board is presented on the company website. The Board members’ expertise is also presented. In 2016, the Board of Directors had 7 meetings. Average participation at the meetings has been 94 %. Two board member has in total been absent from two meetings.

Board members’ shareholdings are presented in Note 9 to the consolidated accounts. Board members are encouraged to invest in the company’s shares. The Board members represent a combination of expertise and experience from finance, industry and organizations.

The nomination committee’s proposal and reasons for candidates will be presented on the company website. The General Assembly elects the Chairman of the Board.

9. The work of the Board of Directors

The Board of StrongPoint ASA annually adopts a plan for its work, emphasizing goals, strategies, and implementation. Also, the Board has adopted board instructions that regulate areas of responsibility, tasks, and division of roles of the Board, the Chairman of the Board, and the Managing Director. The Board instructions also feature rules governing Board schedules, notice and chairing of Board meetings, decision-making, the Managing Director’s duty and right to disclose information to the Board, professional secrecy, impartiality, and other issues.

To reinforce independent treatment of issues in which the Chairman of the Board has material interests, a practice has been established according to which the Deputy Chair or other Board member chairs the Board’s discussions of such issues.

The Board evaluates its own performance and expertise once a year.

The Board has an audit committee, which consists of Chairman of the Board Svein Jacobsen and the Board member Klaus de Vibe. The audit committee review procedures including the company’s in-house reporting systems, risk management, and internal control, keeps in contact with the company’s auditor regarding company audits and prepares the Board’s review of financial reporting.

10. Risk management and internal control

The Board of Directors of StrongPoint ASA is the group’s main responsible for business operations and is to ensure that the company maintains solid in-house control practices and appropriate risk management and systems tailored to the company’s business activities.

As becomes apparent from its balance sheet, StrongPoint ASA is exposed to currency and interest risk, market risk, credit risk, and operational risk at its underlying companies.

Management of operational risk primarily takes place at each underlying operating company. Nevertheless, StrongPoint acts as a driver through its work on their boards of directors. As a rule, all companies have established effective risk management procedures.

Management of financial market exposure, including currency, interest, and counterparty risk, is presented in greater detail in note 17 to the parent company accounts.

StrongPoint has adopted a series of policies to support this, including:

StrongPoint has an accounting manual that all companies in the group are following. It contains rules for internal control and accounting, among other things:

The Audit commitee annually reviews the company’s most important risk areas and internal control systems and procedures, and the main elements of these assessments are presented in the Board of Directors’ report. The audit committee also serves as a preparatory group in connection with the quarterly report and reviews the major events, the directors’ report, balance sheet, income statement items and notes to the interim financial statements together with the administration before the report is presented to the Board.

11. Remuneration of the board of directors

Board remuneration reflects the Board’s responsibility, expertise, time spent, and the complexity of the business. Remuneration does not depend on StrongPoint’s financial performance. There are no option programs for any Board members but the majority has chosen to buy shares in the company.

The annual general meeting determines Board remuneration following recommendations by the company’s nomination committee.

Board members are elected because of their expertise and knowledge. Directors or company to which they are attached should not undertake special assignments for the company in addition to their appointment. If they still do that the whole board should be informed. Fees for such assignments must be approved by the Board. All remunerations are specified in the financial statement.

Additional information on remuneration paid to Board members for 2016 is presented in note 9 to the consolidated accounts.

12. Remuneration of executive personnel

The Board has adopted guidelines for remuneration of executive management in accordance with section 6-16a of the Norwegian Public Limited Liability Companies Act. The Board of Directors determines the remuneration of the CEO.

StrongPoint ASA does not have stock option plans or other such share award programs for employees. Further information on remuneration for 2016 for members of StrongPoint’s executive management is presented in note 9 to the consolidated accounts. The company’s guidelines for remuneration to executive management are discussed in note 9 to the consolidated accounts and will be presented to shareholders at the annual general meeting.

Some members of StrongPoint’s executive management maintain the company’s interests as board members of other StrongPoint companies. They do not personally receive board remuneration for these memberships.

The Board has limited the performance based reward of the Group CEO to a maximum of 40 % of the fixed salary.

13. Information and communications

The company has prepared a policy for investor relations (IR), which determines guidelines for contact with shareholders outside the general meeting. The company’s reporting of financial and other information is based on transparency and equal treatment of interested parties.

The long-term purpose of StrongPoint’s IR activities is to ensure access to capital at competitive terms for the company and correct pricing of shares for shareholders. These goals are to be accomplished through accurate and timely distribution of information that can affect the company’s share price; the company is also to comply with current rules, regulations, and market practices, including the requirement of equal treatment.

All stock exchange notices and press releases are published on the company’s website. Stock exchange notices are also available at: www.newsweb.no. All information that is distributed to shareholders is simultaneously through Newsweb, the Oslo Stock Exchange (ticker: STRONG) and on the company website. The company endeavours to hold public presentations of its financial reporting; these meetings are often broadcast simultaneously via the Internet.

14. Take-overs

In a bid situation, StrongPoint’s Board of Directors and management have an independent responsibility to help ensure that shareholders are treated equally, and that the Company’s business activities are not disrupted unnecessarily.

The Board has a particular responsibility to ensure that shareholders are given sufficient information and time to form a view of the offer. The Board of Directors will not seek to hinder or obstruct take-over bids for the Company’s activities or shares unless there are particular reasons for this. Agreements with providers to limit the company’s ability to obtain other offerings on the company’s shares will only be entered into when it clearly can be attributed to the company and shareholders’ common interest. The same applies to an agreement on compensation to the provider if the offer is not completed. Any compensation shall be limited to the cost the provider has upon the submission of the bid.

Agreements between the company and provider of importance for the market’s assessment of the offer should be made public and no later than the alert that the offer is made. In the event of a take-over bid for the Company’s shares, the Company’s Board of Directors will not exercise mandates or pass any resolutions with the intention of obstructing the take-over bid unless this is approved by the general meeting following announcement of the bid. If an offer is made for the Company’s shares, the Company’s Board of Directors will issue a statement making a recommendation as to whether shareholders should or should not accept the offer. The Board’s statement on the offer will make it clear whether the views expressed are unanimous, and if this is not the case it should explain the basis on which specific members of the board have excluded themselves from the Board’s statement. The Board will arrange a valuation from an independent expert. The valuation will include an explanation, and will be made public no later than at the time of the public disclosure of the Board’s statement.

15. Auditor

The auditor participates in the Board meeting that deals with the annual accounts, and the auditor has with the Board reviewed any material changes in the company’s accounting principles and assessments of material accounting estimates.

Further the auditor has provided the Board with written confirmation that the requirement of independence is met.

The Board and the audit committee meet with the auditor without the presence of representatives of executive management. The audit committee determines guidelines for executive management’s access to use the auditor for services other than auditing and receives an overview of services rendered by the auditor to the company.

Remuneration of auditing and other services are presented in note 5 to the StrongPoint ASA accounts. Such details are presented to the annual general meeting.

 

Board of Directors

Oslo, 16 March 2017