Corporate Governance report 2010 REINHOLD POLSKA AB (PUBL)

Transcription

1 Inhouse translation Corporate Governance report 2010 REINHOLD POLSKA AB (PUBL) The corporate governance report is submitted as a specific report in addition to the annual report in accordance with the Swedish Annual Accounts Act (1995: kap. 6 ) and the Polish rules for corporate governance (regulation of 19th February 2009 of the Council of Ministers - on current and periodical information submitted by issuers of securities and conditions of considering information required by laws of a country not being the EU Member State as equivalent art ; and Code of Best Practice for WSE Listed Companies - Appendix to Resolution No. 17/1249/2010 of the WSE Supervisory Board dated 19 May 2010). The report has been audited by the auditor of Reinhold Polska AB in accordance with the Annual Accounts Act and a report from the auditor exists as a part of this report. Corporate governance is the term used for the way of distributing the privileges and duties between the company s organs in accordance with laws, rules, and processes. It consists of the systems for decision making and the structure through which the owners directly or indirectly control the company. The corporate governance resolution adopted by the Board of Directors of Reinhold Polska AB is available on the company website in the investor relations section. The company undertakes all necessary steps to comply with all corporate governance policies. Shareholders Reinhold Polska AB is since December 2007 listed on Warszawa Stock Exchange, WSE, in Poland. The quotation is a listing on a regulated market in EU which implies that the company is under the supervision of the Swedish Finansinspektionen, the Swedish Financial Supervisory Authority. At 31 December 2010 it existed two types of shares, class A and class B shares. Only the company s class B shares are listed on WSE since WSE isn t allowing bigger vote differences than 1:5. The number of registered ordinary shares amounts to a total of of which of class A and of class B. Every share of class A has ten votes per share every share of class B has one vote per share at the shareholders meetings. The company s accounting currency is Euro and the quota value is 0,053 Euro per share for all shares. The Shareholders may make decisions regarding the Company on the Annual General Shareholders Meeting or the Extraordinary General Shareholder Meeting. The list of decisions that are reserved for the Shareholders Meeting is stipulated in the Articles of Association ( 13 & 14). All decisions shall be made in accordance to Swedish law with respect of the applicable provisions of Polish law. The closing share price was 6,05 PLN (7,89) per share at the end of the accounting period at 31 December This correspond to a market value of 42,35 mpln total (with the assumption that the company s class A shares and class B shares has the same value even if the class A shares had been listed). At the end of the period the number of shareholders amounted to approx. 300 shareholders. At 31 December 2010 Gösta Gustafsson owned through companies 16,12 percent of the capital and 60,45 percent of the votes, Straumur Bank owned 17,69 percent of the capital and 8,2 percent of the votes and SEB Stiftelsen owned 6,36 percent of the capital and 2,95 percent of the votes. For further information concerning the share visit the website of Reinhold Polska,

2 Restrictions in share transfers There are no restrictions in the possibilities to transfer shares to or from any shareholder. Changes in the Articles of Association There has during 2010 not been any changes made in the Articles of Association. Changes in the Articles of Association may only be made at General meetings with the shareholders and in compliance with the Swedish Companies Act. According to the Swedish Companies Act any changes of the Articles of Association must be proposed by either a shareholder or the board of directors to come in question if not requested by changes in the Companies Act. New Shares The rules of issuing new shares are regulated by the Swedish Companies Act as well as the company s articles of association - available on the website of Reinhold Polska, Articles of association The articles of association, which are accepted at a share holders meeting, consists information about business, share capital, number of members of the Board and auditors as well as regulations for the notice of shareholders meeting and agenda for the general meeting and exists in full on the company website under the page called Corporate governance. Amendments in the articles of association are made in accordance with the regulations in the Swedish Companies Act. The name of the company is Reinhold Polska AB and the company is a Swedish public company with its registered office in Stockholm at the address Gamla Brogatan 32, 2 tr, Stockholm. The object of the company s business is to, directly or indirectly, through fully-owned or partly owned companies, purchase, own and develop real properties and to conduct any other business compatible therewith. Annual general meeting The ordinary general meeting 2010 were held Friday 7 May 2010 in Stockholm. At the meeting one shareholder were present, Reinhold Group BV, through a representative, and represented 59,84 % of the votes. Gösta Gustafsson was selected chairman. No other of the AGM selected members of the board were present at the meeting. Decisions at the annual general meeting 2010 The minutes from the annual general meeting 2010 can be read on the website of Reinhold Polska, In addition to mandatory matters which are mentioned in the articles of association the meeting decided as follows: To reelect all members of the board except for Jens Engwall who declined being reelected. Remuneration to the Board of Directors and the auditor. Guide lines for remuneration to senior management The Board of Directors and Group management The Board of Directors of Reinhold Polska shall according to the articles of association consist of not less than five and not more than seven members of the board with not more than five deputy members. The Board of Directors of Reinhold Polska consists of five members which were selected at the AGM

3 2010 including the CEO also the CEO of the Group. The assignment for all members of the board leaps until the end of the next AGM. After the end of the accounting period Anders Lettström has chosen to resign from the Board. The Board of Directors therefore has the following composition: Waldemar Tevnell (Chairman of the board), Gösta Gustafsson, André Rosberg, Torgny Krook och Stanislav Dudzik. The Board of Director s independence The Board of Directors opinion considering the members of the Boards state of dependence in proportion to the company and the shareholders is presented in the table below called The composition of the Board. As to be seen Reinhold Polska fulfills the requirements in the Swedish code for corporate governance concerning that the majority of the AGM elected members are independent in relation to the company s larger shareholders. With independence in relation to the company and its main owners means that extensive business connections doesn t exist and also that the members of the Board separate represent less than 10 percent of the highest shares or votes in Reinhold Polska. Of the members of the Board it s only Gösta Gustafsson, directly or through companies who owns class A shares and class B shares and Torgny Krook who owns class B shares in Reinhold Polska. A total for the possessions of the both members of the board of shares, as of which class A shares and class B shares on the 31 December The possessions corresponds to 16,22 percent of the capital and 60,50 percent of the votes. The Board of Director s assignment The Board of Directors is elected by the annual general meeting. According to the Swedish Companies Act the Board is responsible of the company s organization and administration of the company s matters. It is the Board who, for the owners account, administer Reinhold Polska through establishing goals and strategies, evaluating the operative management and guarantee routines and systems for follow-up of the established goals. This implies inter alia that the Board shall continuous consider the company s economic situation and see to it that the company s economic relations are controlled in an adequate way. The Board shall also elect a CEO and examine that the CEO fulfill its obligations and decide the remuneration to the CEO. Further it is the Boards responsibility to secure that correct information are distributed to the interested parties of Reinhold Polska and that Reinhold Polska are acting in accordance with laws and regulations as well as that the company develop and implements internal policies and ethical guide lines. The Board of Reinhold Polska has established rules of procedure as well as an instruction for the CEO where the Board s as well as the CEO s obligations and the distribution of work in-between those two are decided upon. The instruction for the CEO consists inter alia of limitations of which agreements the CEO are allowed to agree upon. Other employees of the Group participate in the board meetings as representative for specific questions. The number of board meetings during 2010 amounted to 14. Main questions: Disposal of real estates Issues of shares and financing Economic reporting Strategy and questions concerning the future Besides the minuted Board meetings the Board has had telephone conferences to discuss the company s future strategies. The performed work by the Board has through the Chairman been evaluated and afterward discussed by the board.

4 The Board s responsibility for the financial reporting The Board, that also functions as auditing committee, secures the quality of the financial reporting through instructions to the CEO, financial reporting to the Board and through the communication policy as well as treating reports from the audit committee in form of kept minutes and observations, recommendations and proposals to decisions and measures. The board also secures the quality in the financial reporting through thorough treatment of the interim report, annual report and press releases at the board meetings. The financial goals which the Board has established are continuous being followed-up in connection to decisions of budgets and quarterly reports. The Board of directors has delegated to the company managements to secure the quality in press releases with financial content as well as presentation material in connection with meetings with media, owners and financial institutions. The board appointed highly professional auditors internal (AT Audit) and external (Ernst and Young) - to guarantee transparency, internal control and risk management while conducting it s everyday business, as well as for the purposes of guaranteeing that the financial statements and consolidated financial reports are as accurate as possible. The Chairman of the Board The chairman of the board is elected within the Board and has a specific responsibility for the Boards work is being well organized and carried out efficiently. The Chairman shall in particular: Keep continuous contact with and function as a discussion partner and support for the CEO as well as consult the CEO in strategic questions See to that the Board receives satisfying information and supporting documents for performing their assignment See to that the Board members through the agency of the CEO continuously receive the information needed to follow the company status and development. Be the Chairman at the board meetings, consult the CEO of the agenda as well as see to that the notice of the meeting is made. Organize and lead the work carried out by the Board, encourage an open and constructive discussion for the Board to create best possible conditions for the work of the Board. See to that the handling of matters isn t carried out in conflict with regulations in the Swedish companies act and the articles of association. See to that the Board members are well up in the insider legislation and the company s insider policy. Be responsible for new members of the Board getting necessary introduction education as well as other education as the Chairman and the member of the board considers be necessary. Be responsible for that the Board continuously update and deepen its knowledge about Reinhold Polska. Take responsibility for contacts with the owners in questions concerning the owners and present point of views from the owners to the board. Follow-up that the Board s decisions are carried out in an efficient and correct way. Be responsible for the work of the Board being evaluated every year. Group management Padraic Coll, CEO since 1 February 2011, manages the business in accordance with the Swedish Companies Act, other laws and regulations, rules in force for stock market companies including Swedish and Polish rules for corporate governance, articles of association as well as the framework established by the Board as an instruction for the CEO. The CEO in consultation with the chairman of

5 the board produces necessary information and documentation as supporting documents for the work of the Board and for the Board to be able to make well-founded decisions, presents matters and justifies proposals of decisions, as well as reporting to the Board about the company s development. The CEO manages the Group management s work and makes decisions in consultation with the rest of the management. The Group management consisted, during 2010, of four persons, CEO excluded; CFO Maciek Gotkiewicz (until September 2010) Vice CEO André Rosberg Project Manager Piotr Jaskowski (until September 2010) Business Development Manager Dominika Pomaranska Reinhold Polska normally holds a Group management meeting every other week. The meetings have a predetermined agenda over matters being handled on every Group management meeting which concern questions of both strategic and operational character as transaction questions, leasing questions and reconciliation between budget and result. Auditors The auditors shall examine the company s annual report and accounting as well as the the Board s and the CEO s management. The auditors shall after every financial year submit an audit report to the annual general meeting. The auditors are elected by the annual general meeting for a term of normally four years. The auditor of Reinhold Polska is the authorized public accountant Mikael Ikonen active at Ernst & Young AB. Amount in EUR The Group Ernst & Young Audit assignment Other audit assignments Tax consultancy 0 0 Other assignments Total AT Audit Sp.z.o.o Audit assignment Other audit assignments 0 0 Tax consultancy 0 0 Other assignments 0 0 Total Parent company Ernst & Young Audit assignment Other audit assignments Tax consultancy 0 0

6 Other assignments Total Remuneration to the Board and senior management The principles below for remuneration to the Board and senior management were decided at the AGM 2010 and are unchanged in relation to previous year. The principles of remuneration to the Board and senior management for Reinhold Polska implies that the company shall offer remunerations adjusted to the conditions on the markets which will result in the company being able to employ, develop and keep the senior management. The remuneration shall consist of a fixed and variable salary, pension and other benefits which in total is the individuals remuneration. Reinhold Polska obtains and evaluates continuously information about the conditions on the market for remuneration for relevant branches and markets. Remuneration and other benefits to other senior management in the Group are decided upon, after principles decided on the AGM for Reinhold Polska, by the Board. Remuneration, benefits and other terms for employment for the CEO of Reinhold Polska and The Group management are presented in the table below. Remuneration to the Board of Directors 2010 The remuneration to the Board shall be paid in accordance with decisions taken on the AGM, for 2010 the remuneration to be divided among the board members as per agreement within the board, amounted to SEK and an additional SEK for attendance at extra board meetings in addition to the four scheduled ones. For 2010 the ordinary remuneration was divided with SEK for the chairman of the board and SEK for the following members; Stanislaw Dudzik, Torgny Krook and Anders Lettström. In addition to this an extra compensation of SEK per extra board meeting is to be paid with SEK to Stanislaw Dudzik, Anders Lettström and Torgny Krook for their participation There does not exist any agreements between members of the Board of Reinhold Polska and Reinhold Polska, or any of its subsidiaries, which gives the Chairman or the members of the Board benefits after their assignment has terminated. Consultancy fees other than salaries to the Members of the Board of Directors who are employed by the company have not been paid out. However an agreement exists between the Chairman of the Board and one of the subsidiaries in Poland according to which the Chairman is entitled to a commission of 1,25 % of the sales price of the Katowice property if and when sold. Remuneration to the CEO During 2010 the CEO for the Company as well as for the Group received a fixed salary of SEK each month. The CEO doesn t receive any bonuses or other variable remuneration. The CEO hasn t had a company car, but a health insurance. The CEO does not have a retirement benefit agreement. Gösta Gustafsson has 1 February 2011 left the assignment as CEO and has, at the same day, been replaced with Padraic Coll. The Board of the company will, after the AGM 2011, negotiate concerning the contract of employment. Remuneration to other senior management The principles for remuneration to other senior management consist of a fixed salary or a fixed consultant s fee. No bonuses are paid. It doesn t exist any agreements on termination payments. The Board s report concerning internal control

7 The Boards responsibility for internal control is regulated in the Swedish Companies Act and the Swedish Code for corporate governance which consists of requirements of annual external information concerning how the internal control concerning financial reporting is organized. Reinhold Polska has defined internal control as a process, which is influenced by the Board, CEO, senior management and other colleagues and is designed to give a reasonable security that the goals of Reinhold Polska are reached when it comes to well adapted and efficient business, reliable reporting and observance of suitable laws and decrees. The process is based on the control environment which creates discipline and structure for the other four components of the process risk assessment, control activities, information and communication as well as evaluation. Reinhold Polska has in accordance with their investment strategy as intention to continue its growth through purchases of real estate and through investment in existing real estates. The company invests in real estates which fulfills the Groups requirements of good yield and balanced risk. Every investment is tried separately at every individual decision opportunity. The Board shall further see to that the company has a good internal control and continuously keep itself informed and evaluate that the system for internal control is working. Control Environment The control environment consists of the values and the ethics that the Board, Audit committee, CEO and the senior management communicate and act upon as well as the Group s organizational structure, leadership, ways of decision-making, authorities, responsibility and the competence the colleagues possesses. The values of Reinhold Polska constitute a long-term commitment which connected to the business concept, goals and strategies, guide the colleagues in the daily business Salary/remuneration 2010 Other benefits Total remuneration Amount in EUR Pension costs Tevnell Waldemar, The Chairman of the Board Patrick Coll, CEO Stanislav Dudzik, Member of the Board Anders Lettström, Member of the Board Torgny Krook, Member of the Board André Rosberg, Member of the Board Gösta Gustafsson, Member of the Board Michal Borowski,

8 Ex- Member of the Board Other senior management Total Salary/remuneration 2009 Other benefits and compensations Total remuneration Amount in EUR Pension expenses Tevnell Waldemar, Chairman of the board Patrick Coll, CEO Stanislav Dudzik, Board member Anders Lettström, Board member Torgny Krook, Board member

9 André Rosberg, Board member Gösta Gustafsson, Board member Michal Borowski, Ex-Board member Other senior management Total Governing for the internal control is also the ways of decision-making, authorities and responsibility which is documented and communicated in a governing document as the Board s rules, instructions for the CEO, financial policy, instruction for financial reporting to the Board and authorization manual. Internal policies, guide lines and manuals are also important for the internal control. The responsibility to maintain an efficient control environment and see to that the continuous work with the internal control is adhered to is delegated to the CEO. Policy document The Board of the company has adopted the following policies: financial policy, information policy, dividend policy, insider policy, personnel policy, sex equality policy, education policy, environment policy, working environment policy, ethical rules and a plan of action concerning alcohol and drugs. In addition the Board annually decides whether or not to revise the instructions for the CEO, the financial reporting, authorization manual and the Board s rules of procedure. A revise of the policies shall be done as soon as it s needed to see to that all policies are of immediate interest and support the business to fulfill stated purposes and goals. An important instrument to secure good internal control is the economic manual with procedural description, authorization manual and similar. The Board shall also have a continuous dialogue with the company s auditors and management to further secure that the systems for internal control works. The insider policy of Reinhold Polskas is aiming at reduce the risk that any colleague at Reinhold Polska violate valid insider legislation. The insider policy is a complement to the insider Dealing Act and is in some respects more severe than the law. The insider policy comprises all persons with insight position, closely related parties to them as well as other persons that have been informed that they are comprised by the policy. The financial policy gives the guidelines and rules for how the financial business in Reinhold Polska is carried out. It is decided upon by the Board and states how the different risks in the financial business shall be limited and which risks Reinhold Polska is allowed to take. The financial policy establishes the assignment of responsibilities and administrative rules and shall also function as guidance in the daily work for the personnel within the financial function. All the companies in the Group are comprised of the financial policy. Information and communication, internal and external External information and communication consists for example of reporting to public authorities and external financial reporting. Internal information and communication consists of creating awareness for the company s colleagues concerning external and internal control instruments, including authorities and responsibility. Internal information and communication also implies that the information which is generated in Reinhold Polska s process for internal control is given to the Board of Reinhold Polska, the CEO and the Group management as supporting documents to be able to take well-founded decisions. The company shall deliver quick, contemporaneous, correct, relevant and reliable information to existing and potential shareholders and other investment parties which not only

10 correspond to the requirements of the WSE and the stock market, but also the company s high stated requirements. The company publishes current stock exchange reports, interim reports for the business every quarter and press releases of unaudited annual earnings figures etc. and an annual report for the financial year, as well as a management report which is always a part of the interim reports. Reinhold Polska is a registered ESPI system user a system for immediate communication with the polish FSA (Komisja Nadzoru Finansowego), WSE and Polish News Agency (Polska Agencja Pracowa), as also uses it s website to be able to quickly deliver information to the stock market. Considerable events are announced through separate press releases. The information policy of Reinhold Polska is aiming on an efficient and correct announcing of information concerning the financial reporting. The information policy shall be followed of all personnel, members of the Board and external engaged consultants. Information to the company s surrounding world is given as press releases and financial reports. The company s insider policy and financial policy also treats information. In certain cases, due to external and/or business circumstances, the Board had to postpone the publication of certain information, however, at the same time, took all possible actions to announce this information without necessary delay. Risk assessment Risk handling is built in the company s processes and different methods are used to estimate and limit risks as well as secure that the risks that Reinhold Polska is exposed to are handled in accordance with established policies and guide lines. In accordance with the rules of procedure the Board, once a year, makes a review of the internal control along with the company s auditors. Identification is made of the considered risks and measures are established to reduce the risks. Control activities Internal control concerning the financial reporting is aiming at giving a reasonable security concerning the reliability of the external financial reporting as interim reports, annual reports and press releases as well as the external financial reporting is created in accordance with law, applicable standards for auditing and other requirements on listed companies. The identified risks concerning the financial reporting is being handled through the company s control structures and results in a number of control activities. The control activities is aiming at prevent, discover and correct mistakes and deviations and comprise for example reconciliation of accounts, follow-up and balancing of the Board s decisions and by the Board established policies, approving and auditing of business transactions, authorization- and competence structures, authorized signatory, group-wide definitions, patterns, reporting tools and auditing- and valuation principles. Continuous follow-up of the result is made on several levels in the Group, at real estate level as well as Group level. Follow-up of the result is done against budget and prognosis. The result is analyzed by the real estate division as well as the financial division. The real estate managers have a clear responsibility for the result of the real estates they are in charge of. Their regular analysis of the real estates financial reporting is together with the analysis carried out on Group level an important part of the internal control. The auditors shall report their observations from the audit and their marking of the internal control. The reporting from the auditors shall be made at least twice a year. The Board has the overall responsibility for the internal control concerning the financial reporting. The need of internal audit The efficiency of the internal audit is mostly depending on the company s organizational structure and the size of the organization. Reinhold Polska has a relatively small organization where the financial- as well as the economic administration is being handled from the company s office in Stockholm. The

11 follow up of the result and balance is made quarterly by the different functions in the company as well as the company management. Put together this implies that it s not motivated to have a special division for internal audit. The auditors remark concerning the corporate governance report It is the Board and the CEO who is responsible for the corporate governance report and that it is created in accordance with the Annual Accounts Act as well as applicable corporate governance rules. As basis for our statement we have reviewed this report as well as the groups consolidated annual accounts and judged its contents required by law based on our knowledge of the company. A corporate governance report has been established, and its statutory information is in accordance with the Annual Accounts Act and the consolidated accounts. Stockholm 30 April 2011 Tevnell Waldemar Gösta Gustafsson André Rosberg Torgny Krook Chairman of the Board Patrick Coll CEO Stanislav Dudzik