Corporate Governance

  1.  

1.      Statement

 
For Blom ASA it is important that investors, clients, partners and others who follow the company have confidence in the fact that the company’s operations are managed properly in accordance with sound ethical guidelines. Reliability, honesty and integrity are key to the company’s core values. These are values that are important for a good reputation and the realisation of Blom’s business goals. 

Blom is concerned about having an adequate level of independence between the company’s bodies and confidence in the fact that the company is managed in accordance with principles that promote ethical and sustainable business practices.

Blom ASA, which is the parent company of the group, is the company in which the group’s supervisory board and management functions are carried out. The group’s management structure is based on Norwegian company law, the Articles of Association, the rules of procedure for the Board of Directors, and the instructions for the company’s management adopted by the Board of Directors. The company has prepared ethical guidelines and guidelines for corporate social responsibility. 

Non-conformance with the recommendation: None



 2.      Operations

 
Blom is a leading European supplier for the collection, processing and modelling of geographic information. Blom possesses unique European databases with maps, images and models. The company delivers data and solutions to customers in the public and private sectors, as well as the consumer market, and it allows partners to develop applications based on the company’s databases, location-based services and navigation solutions. The object of the company is established in its Articles of the Association.

The Board of Directors views it as its duty to continuously adapt the company’s strategy so as to optimise the shareholders’ return, based on the resources represented by the company at any given time. The Board of Directors works to develop the company based on the resources represented by the competence of its employees and the recognition the company enjoys in the market. Blom will use the financial platform and instruments that are available to achieve this goal.

Non-conformance with the recommendation: None



 3.      Share capital and dividends

 
Capital

The total assets at the end of the year 2012 were NOK 430 million, with an equity ratio of 12.3 per cent. Dividends will be considered on an ongoing basis as a result of the company’s strategy and earnings.

Capital increase

On 25 April 2012, the Extraordinary General Meeting of Blom approved a combination of the shares, so that 100 shares with a nominal value NOK 0.10 were combined into one share with a nominal value of NOK 10.00. The General Meeting subsequently resolved to reduce the company's share capital by NOK 24,191,484 by reducing the nominal value of the company's shares from NOK 10.00 to NOK 0.50. 

The General Meeting also adopted the conversion of NOK 312 million in debt into equity. The subscription price was NOK 10.00 per share for each share with a nominal value of NOK 0.50. Conversion of the bond loan took place in the form of a capital increase, where the bonds and the accrued interest were used to subscribe for shares. The company did thus not receive any injection of cash, but the balance sheet was improved by converting the debt to equity.

NOK 35 million of the 2009 bond loan was replaced by a new convertible bond loan with a nominal value of NOK 10,729,762. Bonds in the convertible bond issue can be converted to shares during the two first years of the term of the loan at a subscription price equal to 120 per cent of the volume-weighted average price for the two days following the Extraordinary General Meeting. 

Authorisation to increase capital

The earlier authorisation to increase the share capital granted at the company's General Meeting on 1 June 2011 was not renewed at the Annual General Meeting in 2012. 

Authorisation to acquire treasury shares

The Board of Directors does not have any authorisation to acquire treasure shares.

Non-conformance with the recommendation: None



 4.      Equal treatment of shareholders and transactions with close associates

The Board of Directors of Blom ASA is concerned about equal treatment of the company’s shareholders. This is accomplished by informing Oslo Børs, the company’s shareholders, securities firms and the rest of the market on a continuous basis about the company’s performance, activities and special events that may affect the price of the company’s shares. Blom ASA only has one class of shares. The liquidity of the share is good, and the share is listed under OB Match on Oslo Børs.

If the Board of Directors proposes that the existing shareholders’ pre-emptive rights be waived, the waiver will be based on the common interests of the company and the shareholders. The reasons will be made public in a stock exchange disclosure in connection with the capital increase.

If any not immaterial transactions are conducted between the company and shareholders, senior executives and their close associates, the board will ensure that an independent valuation of the transactions in question is performed by a third party as required. 

Non-conformance with the recommendation: None



 5.      Free negotiability

 
Shares in Blom ASA are freely negotiable. The Articles of Association do not restrict the negotiability of shares. 

Non-conformance with the recommendation: None

 

 
6.     
General Meeting

The Board of Directors will make arrangements so that as many shareholders as possible can exercise their rights by participating in the company’s General Meeting and that the General Meeting can function as an effective meeting place for the shareholders and Board of Directors.

  • A complete notice will be sent to all the shareholders in writing at least 21 days in advance and will be available on Blom’s website 21 days prior to the General Meeting. Enclosures to the notice and documents concerning the items on the General Meeting's agenda will be published on the company's website and not sent to the shareholders. A shareholder may nevertheless request that the documents concerning the items to be discussed are sent free of charge.
  • The registration deadline is normally the day prior to the meeting.
  • The right to participate or vote at the General Meeting may only be exercised when the acquisition of shares has been entered in the register of shareholders on the fifth working day prior to the date of the General Meeting (registration date).
  • Shareholders who cannot be present at the General Meeting will be given an opportunity to vote. The Board of Directors will:
    • Provide information on the procedure for attending by proxy
    • Appoint a person who can vote by proxy on behalf of shareholders
    • Prepare a proxy form so that individual items to be considered and candidates to be elected can be voted on.
  • The Board of Directors and auditor will be present at the General Meeting.
  • The Board of Directors and chairperson will make arrangements so that the General Meeting has an opportunity to vote on each of the individual candidates for positions in the company’s bodies.
  • The Board of Directors will put forth a proposal for an independent chairperson if such a chairperson is required to ensure a proper execution of the General Meeting.
  • The Ordinary General Meeting elects the Board of Directors, determines the directors’ fees, approves the annual accounts and dividend proposed by the Board of Directors, elects the auditor and approves the auditor’s remuneration, and deals with any other items stated in the notice of the meeting.
  • The Board Chairman is elected by the General Meeting.
  • Minutes of the General Meeting will be available on the company’s website www.blomasa.com.

Non-conformance with the recommendation: None. See Item 7 with regard to nomination committee non-conformance.



 7.      Nomination Committee

 
Blom ASA does not have a nomination committee. The Board of Directors believes that the duties of the Nomination Committee can be performed satisfactorily by the Board of Directors in dialogue with various shareholder groups and the company’s principal shareholders. 

Non-conformance with the recommendation: One instance of non-conformance. 

 

 
8.     
Composition and independence of the Board of Directors

The object of the Board of Director’s work is to manage the shareholders’ assets in the best possible manner and treat all shareholders equally. In electing Board Members, emphasis is, therefore, placed on having a Board of Directors that can safeguard the common interests of shareholders and the company’s need for competence, capacity and diversity. Board members are elected for a term of two years. 

At the Annual General Meeting on 31 May 2012, Board Members Gunnar Hirsti and Hege Skryseth announced that they wished to resign from the Board. Siv Sandvik and Tom H. Knoff were elected as new board members. Tom H. Knoff was elected as the new Board Chairman. Johnny Andersson was elected as a new member of the Board at the company's Extraordinary General Meeting on 11 July 2012. 

At least two of the board members are independent of the company's day-to-day management, important business associates and the company's largest shareholders. The Board Chairman is elected by the General Meeting. The Board of Directors will elect a deputy chairman if it is appropriate for the proper performance of the Board of Directors.

Non-conformance with the recommendation: None

 

 
9.     
Work of the Board of Directors

In accordance with Norwegian law, the Board of Directors is responsible for the supervisory management of the company, while the CEO is responsible for the day-to-day management. The Board Chairman should follow the development of the operations in close cooperation with the CEO, plan the board meetings and ensure that the Board Members receive the information that is required so that they can perform their functions properly in accordance with the legislation.

The Board Chairman chairs the board meetings. If it is appropriate for the proper performance of the Board of Directors, the Board of Directors will appoint another board member to head the discussion at board meetings. The CEO participates at board meetings. Other members of the management ordinarily participate whenever appropriate. The Board of Directors held a total 21 meetings in 2012.

In accordance with the rules of procedure, the Board of Directors shall have an annual plan for its work with emphasis on goals, strategy and execution. The Board of Directors has established and appointed members to an audit committee and a remuneration committee. The Board of Directors will consider the use of other board committees if it is appropriate to ensure that the Board of Directors performs its work in an independent manner. The Board of Directors has not made use of other board committees in 2012. 

Non-conformance with the recommendation: None.

 

10.  Risk management and internal control 

The Board of Directors is concerned about the company having sound internal control and an appropriate system for risk management. This includes elements such as risk management of significant business risks, execution of significant management controls, and control of financial reporting and monitoring mechanisms.

Significant risks include strategic risks, financial risks, liquidity risks and operational risks. The company’s significant risks are assessed on an ongoing basis and at least once a year, and they are included in the company’s annual report. 

Blom’s internal control of financial reporting encompasses guidelines and procedures to ensure that the accounts are prepared in accordance with IFRS and provide a true picture of the company’s operations and financial position. 

Management controls are performed at a senior level in the company. The organisation was restructured in 2012, and the reporting system was changed accordingly in order to enable closer follow-up and cooperation within the group. Country Managing Directors (CMDs) and Regional Managing Directors (RMDs) report directly to the Chief Executive Officer (CEO). The CEO holds monthly meetings with each individual CMD and RMD.

Non-conformance with the recommendation: None

 

11.  Remuneration of the Board of Directors 

The General Meeting determines the remuneration for the Board of Directors. NOK 1,125,000 was paid in directors’ fees for the period from 1 July 2011 to 31 May 2012. 

Provisions totalling NOK 1,350,000 have been allocated in the accounts for 2012 for the remuneration of the Board of Directors for the period from 31 May 2012 to the Annual General Meeting in 2013. The remuneration breaks down into NOK 450,000 for the Board Chairman and NOK 225,000 for other board members. 

The remuneration of the Board of Directors shall reflect the Board’s responsibility, expertise and time spent, and the compensation is not performance-based. No options have therefore been issued or any other performance-linked remuneration given to members of the Board of Directors. For special tasks that are carried out by the members of the Board of Directors, the Board of Directors can approve separate remuneration for these services. 

Non-conformance with the recommendation: None.

 

12.  Remuneration of senior executives

The Board of Directors has prepared separate guidelines for remuneration of the executive management in accordance with the Limited Liability Companies Act. The guidelines will be presented to the General Meeting. 

Special instructions have been prepared for the Chief Executive Office. Reference is also made to his responsibilities and duties in the company’s rules of procedure for the Board of Directors. The remuneration for the Chief Executive Officer is set by the Board of Directors. 

The company’s senior executives are paid a fixed salary that reflects the employee’s education, experience and professional qualifications. It is important that the remuneration is at a level that makes it possible to attract the best-qualified persons to the company’s key positions. A bonus can be agreed on in addition to the base salary. The size of the bonus paid to the individual employees will be dependent in part on the achievement of individual targets and in part on the performance of the group.

Senior executives receive free telephone, mobile phone, Internet, newspapers and canteen as benefits in kind. Senior executives are members of the company's defined contribution scheme in the same manner as other employees. Two of the company's senior executives have an early retirement agreement from age 62. Blom believes that the company’s performance-based bonus agreements with senior executives have a motivating effect and are in the best interest of the company and its shareholders. 

The company does not currently have any agreements with senior executives concerning the allocation of shares, subscription rights, options and other forms of remuneration linked to shares or the performance of the company's share or shares of other companies within the group. The Board of Directors will, however, continuously consider incentive schemes that are appropriate to secure a qualified management for the company, including the use of various share option schemes. 

Non-conformance with the recommendation: None.

 

13.  Information and communication

Blom ASA seeks to maintain an open information policy in relation to shareholders, the media and other interested parties within the bounds of the securities legislation, accounting law and stock exchange regulations. The group has its own website, www.blomasa.com, which contains IR information and other information that is useful for understanding the group’s overall operations and development. Open presentations with webcasts are held in connection with the reporting of interim results. The Company follows the recommendations of Oslo Børs for reporting IR information.

The Board Chairman and CEO or CFO are authorised to speak on behalf of the company.

Non-conformance with the recommendation: None.

 

14.   Takeovers 

The Board of Directors will not attempt to influence, hinder or complicate the submission of bids for the acquisition of the company's operations or shares, or prevent the execution thereof. The Board of Directors will help ensure that shareholders are treated equally.

If a bid is made for the company’s shares, the Board of Directors will obtain a valuation from an independent expert and issue a recommendation to shareholders as to whether they should accept or reject the bid. 

Non-conformance with the recommendation: None.

 

15.  Auditor 

The company’s auditor will prepare an annual plan for the performance of audit work and present the plan to the audit committee. The auditor will attend the board meeting that reviews the annual accounts. The auditor otherwise performs the activities he is required to perform in accordance with Norwegian law and the generally accepted auditing standards. 

The auditor will review the company’s internal control, including the identification of weaknesses and recommendations for improvements, annually together with the audit committee. 

The Board of Directors has given the management access to use the auditor, to a limited extent, for the performance of services for the company other than pure auditing. This applies in particular to matters of a particularly complicated nature, such as tax issues, acquisitions and mergers/demergers. The Board of Directors feels that such consulting does not affect the auditor's independence in relation to the company. 

Non-conformance with the recommendation: None.

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