Corporate Governance.

Semcon AB is a Swedish company active on a global market. The company’s shares are quoted on the Nasdaq Stockholm.

Semcon applies the Swedish code of Corporate Governance and has no deviations to report. The current code is available at bolagsstyrning.se. Semcon is governed in accordance with Swedish corporate law. Semcon’s Articles of Association regulates the alignment of the business, share capital and how and when the notice to attend the AGM takes place. Semcon also complies with other applicable Swedish and foreign laws and regulations.

The summary below summarizes how responsibility for management and control of Semcon AB is divided between shareholders at the Annual General Meeting, the Board and the CEO according to external regulations and internal policies.

Annual General Meeting

The Annual General Meeting (AGM) is Semcon’s highest decision-making body. The notice to attend the Annual General Meeting appears in the Articles of Association. The notice to attend must be published in the Swedish Official Gazette, Post- och Inrikes Tidningar and at semcon.com. That the notice to attend has been published must be advertised in Dagens Industri. At AGMs, shareholders get the opportunity to place their voting rights and, in accordance with Swedish corporate law and Semcon’s Articles of Association, to take decisions concerning the composition of the Board and other central issues. Shareholders or proxies can vote for the number of shares he/she owns or represents at the meeting. AGM decisions made at the AGM are usually made with a simple majority. A qualified majority is however sometimes required for some decisions.

Nominations committee

According to a decision made by the AGM, based on ownership statistics from Euroclear Sweden AB on 31 August for each respective year, the Chairman of the Board must convene the three largest shareholders in the company, who together shall appoint members of the Nominations committee. If any of them decline then the right to nominate transfers to the next shareholder in terms of size, who doesn’t already have the right to nominate members to the Nominations committee. The member nominated by the largest shareholder will be the Nominations committee’s chairman.

The Nominations committee’s members will be announced no later than six months before the AGM. Information about the Nominations committee’s members and how proposals to the AGM can be submitted are available in press releases at: semcon.com and in the Q3 report.

The Board

The Board is ultimately responsible for the organization and management of Semcon’s business activities. The work of the Board is regulated by the Companies’ Act, the Articles of Association and the procedures adopted annually by the Board.

The Annual General Meeting elects Board members and their deputies in Semcon AB. The Board must consist of no fewer than three members and no more than eight members with no more than two deputies. Semcon AB’s Board consists of five members elected by the AGM without deputies and three members with their deputies elected by employees. Of the eight Board members, all are Swedish Citizens. The Board’s structure meets the requirements for being independent set by the Swedish Code for Corporate Governance and in association with the NASDAQ Stockholm.

Audit committee

Semcon has decided the entire Board will carry out the audit committee’s tasks. The entire Board aims at keeping in close contact with the company’s auditors so that it can satisfactorily follow significant issues concerning the company’s accounts, reporting routines, management of company assets and internal control.

Remuneration Committee

Semcon has decided that the entire Board will carry out the Remuneration Committee’s tasks.

Auditors

The auditors are elected by the General Annual Meeting after proposal from the Nomination Committee.

Group Management

Group management consists of the CEO, CFO, General Counsel, Director Corporate Communications & Marketing, Director HR and Sustainability and Presidents for the business areas. Group management holds regular meetings led by the CEO. The meetings follow an agenda and are minuted. In addition to these meetings, a number of meetings are held where all, or parts of, the Group management are present along with to the employees from the Group. Group management works towards close contact with every business area in order to support and provide help and the tools to make the business more effective, marketing, business development and internal exchange of knowledge.

Articles of Association

§ 1 The Company name is Semcon AB. The Company is a public company (publ.).

§ 2 The board shall have its registered office in the municipality of Gothenburg.

§ 3 The Company has as its objective to directly or indirectly carry on consultancy business within the areas of technical production and product development and to pursue other compatible business.

§ 4 The share capital of the Company shall constitute a minimum of fifteen million (15 000 000) kronor and a maximum of SEK 60 million (60 000 000).

§ 5 The number of shares shall be a minimum of 15 000 000 and a maximum of 60 000 000.

§ 6 Two different types of share may be issued: ordinary shares and C shares. A maximum of 60 000 000 ordinary shares and 2 000 000 C shares may be issued. In voting at shareholder meetings, each ordinary share shall have one vote and each C share shall have one tenth of a vote. C shares do not entitle the holder to a share in the company’s dividends. Upon the dissolution of the company, C shares entitle the owner to an equal share of the company’s assets as ordinary shares, although the maximum amount shall correspond to the quota value of the share plus an amount calculated on the day of distribution equal to STIBOR for the relevant period + 2% calculated from the day subscription liquidity for any C shares existing on the day of distribution was first paid. STIBOR for the relevant period shall be fixed on the day subscription liquidity for any C shares existing on the day of distribution was first paid.

Should the company decide to issue, via cash offer or offset offer, new ordinary shares or C shares, the owners of ordinary shares and C shares shall have preferential rights to subscribe for new shares of the same share type in relation to the number of shares previously owned (primary preferential shareholder rights). Shares not subscribed for via primary preferential shareholder rights shall be offered for subscription to all shareholders (subsidiary preferential shareholder rights). If the number of shares offered in this way does not suffice for subscription via subsidiary preferential shareholder rights, then shares shall be divided among subscribers in relation to the number of shares they previously owned, and if this is not possible, shares shall be allocated via lottery.

Should the company decide to issue, via cash offer or offset offer, exclusively new ordinary shares or C shares, all shareholders, irrespective of whether their shares are ordinary shares or C shares, shall have preferential rights to subscribe for new shares of the same share type in relation to the number of shares previously owned.

Should the company decide to issue, via cash offer or offset offer, subscription warrants or convertibles, shareholders shall have preferential rights to subscribe for these subscription warrants or convertibles as though the offer were for those shares that the subscription warrants gave entitlement to subscribe for or the convertibles may be exchanged for.

The above statements shall not entail any restriction of the possibility to decide upon a cash issue or offset issue in deviation of preferential rights of existing shareholders. In the event of an increase in share capital through a bonus issue, new ordinary shares shall be issued in relation to the number of ordinary shares previously held. At such a time, old ordinary shares shall entitle the owner to new ordinary shares. Owners of C shares shall not have the right to participate in a bonus issue. The above statements shall not entail a restriction in the possibility of issuing a new type of share following a change to the company’s articles of association.

§ 7 C shares owned by the company may, following a decision by the Board, be converted into ordinary shares. A decision about conversion shall be reported for registration without delay to the Swedish Companies Registration Office. Conversion is executed when registration has taken place at the Swedish Companies Registration Office and the conversion has been recorded in the register kept by Euroclear.

§ 8 A reduction in share capital, although not below the minimum amount stated in § 4 above, shall take place upon the redemption of C shares at the request of an owner of a C share or following a decision by the Board or shareholder meeting. A request by an owner of a C share shall be made in writing to the company’s Board, and the Board shall address the matter without undue delay. When a decision has been made to reduce share capital, an amount equivalent to the reduction shall be allocated to a reserve fund, if the amount is available. Upon redemption, the owner of the C share shall be obliged to make redemption at an amount per C share equal to the share’s quota value plus an interest amount on the day of redemption equal to STIBOR for the relevant period plus 2% calculated from the day subscription liquidity for any requested, or as appropriate, the Board’s or shareholder meeting’s redemption decision existing C shares, were paid for the first time. STIBOR for the relevant period shall be fixed on the day subscription liquidity for any requested, or as appropriate, the Board’s or shareholder meeting’s redemption decision existing C shares, were paid for the first time. Payment of the redemption amount shall be made as soon as possible after the reduction in share capital has been registered.

§ 9 The Board shall, to the extent it is appointed by the Shareholders’ meeting, be made up of a minimum of three and a maximum of eight Board Members with a maximum of two deputies.

§ 10 The Company shall appoint a minimum of one and a maximum of two auditors and a minimum of one and a maximum of two deputy auditors or one chartered accounting firm.

§ 11 Notification shall be issued by way of advertisement in Post- and Inrikes Tidningar and on the corporate website. An ad about the notification shall be published in Dagens Industri.

§ 12 Shareholders’ wishing to participate in the shareholders’ meeting shall be registered as a shareholder in such transcript of the shareholders’ register, which regards chapter 7, article 28, paragraph 3 of The Companies Act (2005:551) and, which regards conditions five days prior to the shareholders’ meeting, in part, register with the company by 4:00 p.m., at the latest, on the day specified in the notification to the Shareholders’ Meeting.

The latter mentioned day may not fall on a Sunday, other holiday, Saturday, midsummer’s eve, Christmas eve or New Year’s eve and may not occur earlier than the fifth weekday prior to the shareholders’ meeting. Shareholders may, at the Shareholders’ Meeting, be accompanied by one or two assistants, but only if the shareholder has given notice of such according to the preceding paragraph.

§ 13 The Chairman of the Board or a representative appointed by the Board shall open the Shareholders’ Meeting and lead the proceedings until a Chairman is elected.

§ 14 The Shareholders’ Meeting is to be held in Gothenburg or Stockholm.

At the annual general meeting the following issues shall be dealt with:

Election of chairman of the meeting;
Election of two persons to verify the minutes in addition to the Chairman;
Review as to whether the meeting has been duly convened;
Drafting and approval of the voting list;
Approval of the agenda;
Presentation of the annual accounts and auditors’ report as well as the consolidated annual accounts and consolidated auditors’ report;
Resolution regarding adoption of the income statement and balance sheet as well as the consolidated income statement and consolidated balance sheet;
Resolution regarding appropriation of the company’s profit or loss according to the adopted balance sheet and, where applicable, decision regarding record day for dividend;
Resolution regarding indemnification of the board members and the managing director;
Determination of the number of board members and deputies and, where applicable, the number of auditors and deputies;
Determination of board remuneration;
Determination of auditors’ remuneration;
Information as to assignments performed by the board candidates for other companies;
Election of board members and deputies;
Where applicable, election of auditors and deputies;
Other matters brought up at the shareholders’ meeting according to The Companies Act (2005:551) or articles of association.

§ 15. At the Shareholders’ Meeting may each and every voting member vote for the total number of shares that he or she represents.

§ 16. The Company’s fiscal year shall be the calendar year.

§ 17. That the company’s shares shall be registered in a reconciliation register in accordance with the Financial Instruments Accounts Act (1998:1479).

Remuneration

Remuneration to the Board of Directors

The Annual General Meeting 2019 resolved on an increase in fees compared the previous year to the Board of Directors. A total fee of SEK 1,785,000 shall be paid to the Board of Directors elected by the Annual General Meeting, of which SEK 625,000 to the Chairman and SEK 290,000 to each of the other Directors elected by the Annual General Meeting. No additional fees will be paid for work on Board committees.

Remuneration to the auditors

The Annual General Meeting 2019 resolved that auditors’ fees will be paid according to invoice. More information in latest Annual report, note 8.

Remuneration to the CEO and senior executives

The Annual General Meeting 2019 decided on remuneration principles and other employment guidelines concerning the CEO and senior executives that report to him. Remuneration to the CEO is decided by the Board. More information in latest Annual report, note 9.

Auditors

Ernst & Young AB was elected as the company’s auditor by the Annual General Meeting in 2019 until the Annual General Meeting 2020. The company’s main auditor is Nina Bergman (born 1979). Her other assignments include Zenuity AB and New Wave Group AB.

In addition to auditing, Ernst & Young AB will provide advice on accounting issues to Semcon. All services provided in addition to the statutory auditing service are checked specially to ensure that there is no conflict of interest or disqualification issue. No senior executive at Semcon has held any position at Ernst & Young AB. Semcon’s remuneration to auditors and purchase of services in addition to auditing appear in the latest Annual report, note 8.

Nomination Committee

According to the AGM 2019 the following has been elected to form the Nomination Committee.

• Ulf Gillberg, Chairman of the Nominations committee, JCE Group Aktiebolag
• Mats Andersson, Nordea Investment Funds
• Johan Hagberg
• Tore Bertilsson, Chairman of Semcon AB (co-opted member)

The Annual General Meeting of Semcon will be held at the head office in Göteborg, Tuesday April 28, 2020. Proposals to the Nomination Committee shall be e-mailed to valberedning@semcon.com.