Annual Report 2011
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Corporate Governance Report

Anoto Group AB (publ.) is governed by its Articles of Association and the Swedish Companies Act. Since Anoto is listed on NASDAQ OMX Stockholm, Anoto also applies NASDAQ OMX Stockholm’s Rule Book for Issuers. Since July 1, 2008, Anoto applies the Swedish Code of Corporate Governance (see www.bolagsstyrning.se) Anoto is, in accordance with the Swedish Companies Act and the Swedish Code of Corporate Governance required to present a Corporate Governance Report. 

Corporate Governance Structure

Anoto is governed by several bodies.

 

The shareholders exercise their voting rights at General Meetings of the Shareholders by electing the Board of Directors and external auditors and make decisions on other issues like the adoption of the annual report and stipulating how to appoint the Nomination Committee.

 

The Nomination Committee nominates candidates to the Board of Directors, Chairman of the Board and external auditors. A Nomination Committee is required by the Code, but not by the Companies Act.
The Board is responsible for the appointment of the CEO, the developing of long-term strategy, and controlling and evaluating Anoto’s day-to-day operations.

 

The CEO is in charge of and responsible for the daily operations and the management of Anoto in accordance with the Swedish Companies Act, instructions and guidelines from the Board of Directors.

 

External auditors appointed by the shareholders at the Annual General Meeting examine the Company’s annual report and accounts as well as the management by the Board of Directors and the CEO.

Annual General Meeting

The Annual General Meeting is the corporate body where the shareholders in Anoto can exercise their rights by electing the Board of Directors and deciding on all other issues voted on at Annual General Meetings in accordance with the Companies Act and the Articles of Association.

 

The Annual General Meeting is normally held during the first half of May. The notice of the Annual General Meeting, together with the agenda, is published on Anoto’s website and in the Swedish newspaper Post och Inrikes Tidningar (the Swedish Official Gazette). As a courtesy, the date and place for the Annual General Meeting together with information on how to obtain the agenda is published in the Swedish newspapers Dagens Nyheter and Sydsvenska Dagbladet.

 

All information material for the Annual General Meeting is available in both Swedish and English. The Annual General Meeting is held in Swedish.

 

Annual General Meeting 2015
The Annual General Meeting (AGM) in 2015 took place in Lund on May 21. Jörgen Durban was present from the Board of Directors. Present were also Anoto’s external auditors.

 

The Annual General Meeting made the following decisions:

  • The annual report was presented, and the consolidated income statements and balance sheets were adopted. The Board Members and CEO were discharged from liability. It was resolved that no dividends were to be paid to the shareholders.

  • Board Members Jörgen Durban, Andrew Hur, Joon Hee Won and Antonio Mugica, were re-elected as Board Members until the end of the next Annual General Meeting.

  • Jörgen Durban was re-elected Chairman of the Board.

  • The AGM resolved to authorize the Board of Directors to resolve, on one or several occasions during the period until the next Annual General Meeting, with or without deviation from the shareholders’ preferential rights, against cash payment, for payment in  kind or by way of set-off, to issue shares and/or convertible bonds that involve the issue of  or conversion into a maximum of 83,000,000 shares, corresponding to a dilution of approximately 10.0 percent of the share capital and votes, based on the current number of shares in the Company.

  • The AGM decided to approve the proposed incentive program for senior executives in the Group. The incentive program comprises a maximum of 8,355,000 stock options. The options can be exercised to purchase shares from the date of publication of the Company's quarterly report for the second quarter of 2018, but no later than 1 October 2018, until 30 October 2018.


Anoto's Annual General Meeting 2016
Anoto’s Annual General Meeting 2016 will take place on June 9 at Anoto´s office in Lund.

 

Extra General Meeting

One Extra General Meetings were held during 2015.

 

Extra General Meeting on the 28th of September the following was resolved:

  • The EGM resolved that the Board of Directors until the end of the next Annual General Meeting should consist of six members, that Stein Revelsby and Henric Ankarcrona should be new members of the Board of Directors.
  • The EGM Resolved to grant 9,042,361 stock options, representing approximately 1.00 per cent of the share capital and votes after dilution, to the CEO. The options can be exercised to purchase shares from the date of publication of the Company's quarterly report for the third quarter of2018, but no later than 31 December 2018.
  • The EGM Resolved to grant 9,042,361 stock options, representing approximately 1.00 per cent of the share capital and votes after dilution, to the Chairman of the Board. The options can be exercised to purchase shares from the date of publication of the Company's quarterly report for the third quarter of2018, but no later than 31 December 2018.
  • The EGM Resolved, to ensure delivery of shares to participants pursuant to the incentive schemes of the Company and to cover any social security costs related to the incentive schemes, it was resolved to authorize the Board of Directors, on one or more occasions until the next Annual General Meeting, to issue up to 26,355,000 warrants, representing approximately 2.86 per cent of the share capital and votes after dilution.
  • The EGM Resolved, to authorize the Board of Directors to resolve, on one or several occasions during the period until the next Annual General Meeting, with or without deviation from the shareholders’ preferential rights, against cash payment, for payment in kind or by way of set-off, to issue shares and/or convertible bonds that involve the issue of or conversion into a maximum of 158,000,000 shares, corresponding to a dilution of approximately 15.00 percent of the share capital and votes, based on the current number of shares in the Company.

The Board of Directors

The Board of Directors, which also appoints the CEO, is ultimately responsible for the organization of Anoto and the management of its operations. According to Anoto’s Articles of Association, the Board shall consist of not less than three and not more than eight directors with not more than five deputies.

 

At the Annual General Meeting Jörgen Durban who is the Chairman of the Board, Andrew Hur, Joonhee Won and Antonio Mugica were re-elected as members of the Board of Directors until the end of the next Annual General Meeting.

 

At the EGM Stein Revelsby, who is the CEO of the Company, and Henric Ankarcrona were elected to be new members of the Board of Directors.

 

Andrew Hur resigned from the Board of Directors on the 12th of October 2015. At the time of signing the annual report Stein Revelsby has applied for resignation from the board of directors.  

 

For information about the Board Members and their remuneration, please refer to Note 9 in the Annual Report. The members of the Board are independent of the management of the company. The Board members Andrew Hur and Joonhee Won are dependent of the fourth largest shareholder of Anoto, Aurora Investment Ltd, through their employment in the Korean investment company TStone Corporation which controls Aurora Investment. Andrew Hur and Joonhee Won also has interests in Anoto´s daily business operations through Anoto´s business relations with several of TStone´s portfolio companies. Antonio Mugica has interests in Anoto´s daily business being the CEO of Anoto´s customer Smartmatic International.

 

The other Board members are independent in relation to Anoto and its largest owners. The company does therefore comply with the conditions of the Swedish Code of Corporate Governance requiring that a majority of the members elected by the Annual General Meetings are to be independent from the company and its management and that no less than two of the Board members are independent from the largest shareholders.

 

Rules of Procedures
The Board of Directors has adopted Rules of Procedures that outlines the work procedures and tasks for the Board, the Audit Committee and the Compensation Committee. The Rules of Procedures are reviewed and adopted at least once a year.

 

Work of the Board of Directors 2015
The Anoto Group AB CFO participated in the board meetings and was the secretary of the Board. When appropriate, other employees of the company participate in reporting capacities concerning their particular areas of expertise.

 

The Board continuously evaluated the performance of Anoto, the CEO and Anoto’s management team. The Board held 14 recorded meetings during 2015.

 

The Board Members attendance at Board Meetings and Committee Meetings is set forth below:

 

Board Member:

Number of board meetings:

 

Jörgen Durban 14/14
Gunnel Duveblad* 4/5
Andrew Hur** 9/10
Joonhee Won 10/14
Antonio Mugica 10/14
Henric Ankarcrona*** 4/4
Stein Revelsby*** 4/4

*) Board Member until the Annual General Meting 2015

**) Board Member until October 12, 2015
***) Elected Board Member at the EGM September 28, 2015
 

The board has not decided to delegate any responsibilities to any sub-committees such as Audit committee and Compensation committee. Hence the board in its entirety has the full responsibility for such matters.

 

The 2014 Annual General Meeting adopted guidelines for compensation to senior executives, which can be found in Note 9 in the Annual report.

 

CEO and Management

As of December 31, the Management Team consisted of 11 persons, with the CEO in charge. The CEO and Management Team manage and control Anoto’s daily operations.

Shareholders Controlling More than One Tenth of the Shares in the Company

None of the shareholders had, on the 31st of December, a direct or indirect ownership of more than one tenth of the votes for all shares.

Anoto's Articles of Association

The company´s Articles of Association do not comprise limitations concerning the number of votes each shareholder can represent in the Annual General Meeting, or specific conditions related to appointment or dismissal of Board members or introduction of amendments to the Articles of Association.

Internal Control

The Board of Directors is responsible for the internal control under the Swedish Companies Act and the Swedish Code of Corporate Governance. This section on internal control is focused on the internal control of the financial reporting. Given the size of Anoto, the Board has determined that there is no need for an internal audit department or function, and that Anoto’s finance department sufficiently can carry out the internal control in cooperation with the external auditors.

 

Control environment
The corporate culture of Anoto encourages initiatives while assuming responsibility for meeting the defined strategic objectives of Anoto. Each employee at Anoto has a job description setting out tasks, responsibilities and authorizations.

 

The CEO has adopted guidelines and policies for specific areas that the employees are required to follow.
Anoto has implemented a Code of Conduct that is applicable to Anoto and its suppliers. The Code of Conduct describes Anoto’s requirements with respect to ethical behavior, child labor and the environment.

 

A detailed delegation plan has been drawn up with well- defined levels of attestation and decision levels. This is applied throughout Anoto.

 

Risk assessment
Risk assessments are performed in order to identify and map risks. The most important risks for the internal control of the financial reporting are identified at Group and Company level, as well as at a regional level. The outcomes of the risk assessments result in actions and tasks that support the internal control of the financial reporting.

 

Control measures
The Board has implemented a system for control and risk management based on the Board’s Rules of Procedure - also including instructions for the CEO and reports that are to be made to the Board and the Finance Policy. These rules constitute the framework for the internal control.

 

Anoto’s processes and systems for ensuring effective internal controls are designed with the intention of managing and limiting the risks of material errors in the reporting of financial data, thus ensuring that both strategic and operational decisions are based on accurate financial information.

 

The operational work of controlling the day-to-day activities is carried out by the CEO and the Management Team. Specific guidelines govern the capacity for decision making on different issues. In addition, there are several operational meeting forums like management meetings and steering committees that address specific control issues in the operational activities. These forums effectively steer Anoto towards the defined strategic objectives.

 

Monitoring
There are general as well as detailed control measures aimed at preventing, discovering and correcting faults and deviations. The control organization is evaluated by the CFO on an ongoing basis with the aim of ensuring quality and efficiency.

 

The CEO and the CFO continuously keep the Board informed of the Group’s financial position, performance and any areas of risk. Anoto’s external auditors attend at least two Board meetings per year, at which the auditors provide their assessment and observations on the business processes, accounts and reports. The Chairman of the Board is also in regular contact with the auditors of the Group.

 

The Board continuously monitors Anoto’s financial performance by reports, as well as information from the CFO at Board Meetings. Regular follow-up ensures compliance with the Company’s Finance Policy, thus identifying any deficiencies in the internal control system.

 

The internal control also includes detailed annual budgets split on application areas, geographic areas and cost centers. Forecasts are delivered three times a year; in May, August and November. The forecasting follows the same organizational set-up as the annual budget. In December, the Board adopts the budget for the following year. In addition to the budgeting and forecasting, Anoto’s Management Team continuously works with overall three-year strategic scenarios.

Auditor's Report on Corporate Governance

To the annual meeting of the shareholders in Anoto Group AB (publ.) corporate identity number 556532-3929.

 

It is the Board of Directors and the CEO who are responsible for the corporate governance report for the year 2015 including that it has been prepared in accordance with the Annual Accounts Act.

 

As a basis for our opinion that the corporate governance report has been prepared and is consistent with the annual accounts and the consolidated accounts, we have read the corporate governance report and assessed its statutory content based on our knowledge of the company. In our opinion, the corporate governance report has been prepared and its statutory content is consistent with the annual accounts and the consolidated accounts.

 


Malmö, April 28, 2016
Deloitte AB

 

Per-Arne Pettersson
Authorized Public Accountant