Page 73 - Kitron Annual Report 2011

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Corporate governance
Kitron’s corporate governance principles clarify the
division of roles between shareholders, the board of
directors and the corporate management. The princi-
ples are also intended to help safeguard the interests
of shareholders, employees and other stakeholders,
such as customers and suppliers, as well as society at
large. The primary intention is to increase predictabil-
ity and transparency, and thereby reduce uncertainties
associated with the business.
It is Kitron’s intent to practise good corporate govern-
ance in accordance with laws and regulations and
the recommendations of Oslo Børs under the ‘comply
or explain’ concept. This review has been prepared
by the board of Kitron, and it is the board’s intention
to comply with the Norwegian Code of Practice for
Corporate Governance dated 21 October 2010 (“the
Code”). The code is available at www.nues.no
Basic values and ethical guidelines
The board has stated Kitron’s purpose and core val-
ues as presented in the annual report, and the board
has prepared and implemented ethical guidelines
which reflect these values. The ethical guidelines also
include guidelines for corporate social responsibility.
Business
Kitron’s business purpose clause is stated in the com-
pany’s articles of association:
Kitron’s business purpose is manufacturing and devel-
opment activities related to electronics. The business
includes purchase and sale of shares and companies
in the same or related business sectors. The business
may also include related consultancy activities and
other activities associated with the operation.
The company’s main goals and strategies are pre-
sented in the annual report. It is the board’s opinion
that these objectives and strategies are within the
scope of the business purpose clause.
Equity and dividends
The parent company’s share capital at 31 December
2011 amounted to NOK 173 million. Total equity for
the group at the same date was NOK 436.0 million,
corresponding to an equity ratio of 41.1 per cent.
Considering the nature and scope of Kitron’s busi-
ness, the board considers that the company has ad-
equate equity.
Existing mandates granted to the board to issue
shares and to acquire treasury shares are presented
in the shareholder information section of the annual
report. The mandates are in accordance with the
Code.
Kitron’s dividend policy implies an objective to pay a
dividend of 30-50 per cent of net profit for the year,
provided that the company’s equity and liquidity posi-
tion remains adequate after the dividend payment.
Equal treatment of shareholders and
transactions with close associates
The shares are freely negotiable. The articles of as-
sociation include no form of restriction on negotiability.
All shares have equal voting rights and there is only one
class of shares. No new shares were issued in 2011.
Kitron has issued an insider manual with guidelines
and control procedures. According to the company’s
ethical guidelines, board members and the executive
management must notify the board if they have any
direct or indirect material interest in any transaction
contemplated or entered into by the company.
All transactions with close associates are disclosed in
the notes to the annual accounts. Kitron has a long-
term supplier relationship with Kongsberg Gruppen
ASA, who is also a significant shareholder in Kitron.
All business activities are based on arm’s length
terms. In the event of transactions with insiders or
close associates, such transactions will be carried out
in accordance with the relevant recommendations in
the Code.
General meetings
Shareholders exercise the ultimate authority in Kitron
through the annual general meeting. All shareholders
are entitled to attend a general meeting as long as
they are recorded in the company’s share register no
later than the fifth business day before the date of the
general meeting. Representatives of the board, the
nomination committee, and the auditor are present.
Corporate governance