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The company name is, according to the Article of Association, Kährs Holding AB and the company is a public limited company (publ). The registered office is in Nybro. The Company is a holding company and the operations comprise buying, selling, owning and managing shares, bonds and other securities as well as to conduct other activities which are compatible with the activities described above.
The corporate governance report has been prepared in accordance with the Swedish Annual Accounts Act (1995: 1544).
Some of the most important governing documents of the Company include:
• The Board’s rules of procedure including instructions to the CEO
• The Audit Committee's rules of procedure
• The strategic plan of Kährs Group
• The financial manual of Kährs Group
• The Communications Policy of Kährs Group
The Annual General Meeting is the highest decision-making body of the company. At the general meeting, shareholders are given the possibility to exercise the influence over the company in accordance to the respective number of shares they represent.
The mission of the Board' is to contribute to a sound business development and control of the operations of the Group. The Board of Kährs Group has as one of its most important tasks to ensure long-term strategy, governance, monitoring and control of the company in order to create value for shareholders, customers and other stakeholders. The Board is also responsible for that laws and regulations are adequately enforced and applied throughout the operations of the Company. The Board appoints the President who is also the CEO of the Group.
The Board shall consist of a minimum of three and a maximum of seven members and a maximum of three deputies. Members and deputies are elected annually at the Annual General Meeting for the period until the next annual general meeting.
The Board of Kährs Group has adopted procedures for their operations that specify how the work should be divided between the Board, its committees and the CEO. The work plan is determined annually by the Board and the applicable rules of procedure and instructions for the CEO were determined on April 19, 2013.
The Board of Kährs Group has appointed an audit committee whose main task is to collaborate with management to ensure the quality of the financial reporting. The work of the Audit Committee is also intended to, on behalf of the Board, regularly monitor and evaluate the auditors' work and also prepare proposals concerning the auditors, the Company's accounting, external audits, financial information and internal control. The committee's work is reported continuously on the forthcoming Board meeting of the Company.
Kährs Group has not had a special remuneration committee regarding remuneration to senior executives during the past fiscal year. The remuneration of the CEO and other senior executives shall be market-based and consist of a fixed and a variable component as well as any benefits and pension. The decisions regarding the fixed and variable remuneration for all senior executives are made under the "grandfather principle".
The external auditors are responsible for auditing the company’s annual accounts and accounting records and the administration of the Board of Directors and the CEO. After every financial year, the auditors shall present an audit report to the Annual General Meeting.
The Annual General Meeting in 2015 re-elected the registered public accounting firm EY (Ernst & Young) as the company’s independent auditor to serve until the end of the next Annual General Meeting.
Under the Companies Act, the Board is responsible for internal control. The CEO and Group Management are governing the process of developing reliable financial statements for external publication in an efficient manner. The cornerstones of Kährs Group’s system of internal control is the control environment, risk assessment, control activities, information and communication as well as follow-up.
The basis of internal control within Kährs Group consists of decisions concerning the organization, authorizations and guidelines made by the Board. The internal control is based on documented policies, guidelines, process descriptions, allocation of responsibilities and tasks as the Board's rules, instructions for the CEO and authorization instructions, financial policy and instruction for financial reporting. By integrated monthly reporting of the financial and operational activities a solid anchoring of the external financial reporting can be ensured. The central Finance Department is responsible for the continuous updating of accounting and reporting instructions with regard to new external and internal requirements.
Risk management and risk assessment are integrated parts of the business governance and decision making processes. The risk areas identified in financial reporting are managed and controlled by the financial controller of the current operations of Kährs Group. The controller organization, in line with the financial responsibility, follows the organizational and responsibility structure in the company. Clear reporting to senior levels takes place regularly, ensuring a solid understanding of how business is reflected in the figures.
The Board also ensures the quality of financial reporting by monthly processing of the company's financial reporting in meetings directly with the company's CEO and CFO.
The Audit Committee prepares interim reports, manages crucial valuation- and accounting matters, as well as analyzing and deciding on risks associated with the financial reporting.
In order to inform, instruct and coordinate financial reporting, Kährs Group has formal internal information and communication channels to the relevant personnel with respect to policies, guidelines, reporting manuals and other instructions. The formal channels are supplemented by frequent dialogue between the central finance department and responsible persons within the operational units.
Regarding external communication requirements, Kährs Group follow the guidelines aiming to ensure efficient and accurate flow of information. The company's guidelines are in line with Swedish legislation and the procedures for issuers regarding publicly traded debt set forth by NASDAQ OMX Stockholm.
Monitoring the performance compared to the budgets and forecasts is continuously taking place at several levels within the company, both at a local level and a corporate level. Monitoring is also performed at the regional and product group level. The teams report to the CEO, management and the Board on a monthly basis.
Through the organization and the work methods described above, the Company has faith in that the internal control systems regarding financial reporting are appropriate in relation to the operations of the Company.