Corporate Governance

Corporate Governance policy

Adopted by the board of directors on 25 May 2021, effective from the first day of listing of the Company’s shares on Oslo Børs.

1 Governance regime

The Company considers good corporate governance to be a prerequisite for:

In order to secure sound and sustainable corporate governance, it is important that the Company ensures good and healthy business practices, reliable financial reporting and an environment of compliance with applicable legislation and regulations across the Group structure.

To secure good corporate governance, the Company has adopted a set of governance documents setting out principles for how its business should be conducted. The content of these documents apply to the entire Group, effectively from the first day of listing of the Company on Oslo Børs.

2 Legal environment for the Company

2.1 Key corporate details

Overview

Legal status

  • Norwegian public limited liability company.

Country of incorporation

  • Norway.

Regulated market place

  • Oslo Børs.

Applicable legislation

  • The Norwegian Public Limited Liability Companies Act (the “Public Companies Act“);
  • the Norwegian Securities Trading Act (the “Norwegian STA“);
  • the regulations to the Norwegian STA (the “Securities Trading Regulations“);
  • Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation), as implemented in Norway in accordance with section 3-1 of the Norwegian STA (“MAR“);
  • Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017 on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market, as amended and as implemented in Norway in accordance with section 7-1 of the Norwegian STA (the “EU Prospectus Regulation“);
  • the Norwegian Accounting Act (the “Accounting Act“); and
  • other applicable legislation, Norwegian as well as foreign.

Applicable rules and recommendations

  • Euronext Rule Book – Book I: Harmonised Rules (“Rule Book I“) and Oslo Rule Book II – Issuer Rules regarding non-harmonies rules for issuers listed on Oslo Børs (“Rule Book II” and, together with Rule Book I, the “Rule Books“), as interpreted or implemented by “notices” issued by Oslo Børs for the purpose of interpreting or implementing the rules set out in the Rule Books or any other purpose contemplated by the Rule Books;
  • the Norwegian Code of Practice for Corporate Governance (Nw. “Norsk anbefaling for eierstyring og selskapsledelse”), as amended (the “Code“); and
  • other applicable rules and recommendations, Norwegian as well as foreign.

Competent supervisory authorities

  • The Norwegian Financial Supervisory Authority (Nw. Finanstilsynet) (the “NFSA“): The NFSA’s remit is to promote financial stability and well-functioning markets through its supervision of institutions and markets. The NFSA examines the management and control procedures established by institutions and reviews their financial reporting and documentation.
  • Oslo Børs: Oslo Børs monitors market activity and issuers’ compliance with the statutory requirements to which they are subject as a result of having a financial instrument admitted to trading on a trading venue. These requirements include issuers’ obligations in relation to reporting, the disclosure of information, and the prohibition against market abuse. The monitoring activities are the primary responsibility of Oslo Børs’ Market Surveillance Department.

2.2 Compliance and report on corporate governance

In accordance with the Code, Rule Book II and the Accounting Act, the Company will annually report on its compliance with corporate governance requirements and recommendations. The report will be included in the directors’ report, which is included in the annual report or in a document referred to therein, and shall cover every section of the Code.

The Code is based on a “comply or explain principle“, meaning that listed companies must comply with the Code or explain why they have chosen to deviate from the recommendations set out in the Code. The Company will follow the Code, and a justification for deviations from the Code (if any) shall be included in the directors’ report.

Furthermore, a description of the most important corporate governance principles of the Company shall be made available on the Company’s website in accordance with the Company’s “Investor Relations Policy”. By publishing an overview of all aspects of the Company’s corporate governance policy, shareholders, employees and other stakeholders are more equipped to evaluate the extent to which the Company follows principles of good corporate governance.

3 Corporate structure

The Company’s corporate governance policy regulates the division of roles between the Company’s shareholders, board of directors, executive management and committees. The corporate governance policy also provides the structure through which the objectives of the Company are set, and the means of attaining those objectives and monitoring performance are determined.

The Company’s governance structure consists of:

SmartCraft Governance structure

4 Main objectives of the Company’s corporate governance policy

The corporate governance principles set out herein are based on the Code and designed to establish a basis for good corporate governance and support the Company in achieving its core objectives. The manner in which the Company is governed is vital to its value creation over time and achievement of a sustainable profitability. Unless otherwise specified, these corporate governance principles apply to all Group entities. References to certain more specific policies are included in this corporate governance policy where relevant.

The Company believes that good corporate governance involves transparent and trustful cooperation between all parties involved with the Group and its business. This includes the Company’s shareholders, board of directors and executive management team, employees, customers, suppliers, and other business partners, as well as public authorities and society at large.

The board of directors and executive management shall contribute to achieve the following core objectives when honouring the Company’s corporate governance policy:

  • Transparency. Communication with the Company’s shareholders, stakeholders and other interest groups shall be based on transparency and openness on issues relevant for the evaluation of the development and position of the Company.
  • Independence. The relationship between the board of directors, executive management and shareholders shall be based on independence principles. Independence shall ensure that all decisions are made on an unbiased and neutral basis.
  • Equal treatment. A fundamental objective for good corporate governance is equal treatment and equal rights for all of the Company’s shareholders.
  • Control and management. Sound control and corporate governance mechanisms shall contribute to predictability and reduce the level of risk for the Company’s shareholders, stakeholders and other interest groups.

The development and improvement of the Company’s corporate governance principles are ongoing and important focus areas of the board of directors, cf. the Company’s “Instructions for the Board of Directors”.

In this document the “executive management” is defined as the chief executive officer (CEO), the chief financial officer (CFO), the chief technical officer (CTO), the general managers of Bygglet, Cordel Norge, El-Info and Congrid, unless otherwise specified.

5 Business objective

The Company’s business objective, as set out in the Company’s articles of association, reads as follows: “The Company’s business is industry, trade and investments in shares and other assets in other companies and enterprises as well as all other activities related to this.”

The Company’s operations shall comply with the business objective set forth in the Company’s articles of association, which shall be stated in the Company’s annual report together with the Group’s primary objectives and strategies.

The board of directors has defined objectives, strategies and risk profiles for the Company’s business activities as an effort to create value for its shareholders. These objectives, strategies and risk profiles are evaluated annually.

6 Equity and dividends

6.1 Capital adequacy

The board of directors is responsible for ensuring that the Group is adequately capitalised relative to the risk and scope of operations and that the capital requirements set forth in laws and regulations are met.

The Company shall have an equity capital at a level appropriate to its objectives, strategy and risk profile. The board of directors shall continuously monitor the Group’s capital situation. If the equity or liquidity is deemed less than adequate, the board of directors shall immediately take necessary steps, consider public disclosure on the basis of the Company’s “Instructions for Handling Inside Information” and call for a general meeting within a reasonable time in order to report the Company’s financial condition and the proposed measures to rectify the situation.

6.2 Dividend policy

The Company shall, at all times, have a clear and predictable dividend policy. The dividend policy shall be established by the board of directors. The dividend policy forms the basis for the board of directors’ proposals on dividend payments to the Company’s general meeting.

The dividend policy shall be available for the shareholders and prospective investors on the Company’s website.

The reason for any proposal to grant the board of directors an authorisation to approve distribution of dividends should be explained and the explanation should state to which extent the authorisation is based on the Company’s dividend policy. An authorisation granted to the board of directors to approve distribution of dividends shall be limited in time and not be granted for a longer period than until the next annual general meeting.

6.3 Authorisations to the board of directors to increase the Company’s share capital or to purchase treasury shares

Any authorisation granted to the board of directors to (a) increase the Company’s share capital or (b) to purchase treasury shares shall be restricted to defined purposes. If the board of directors proposes that the general meeting grants such authorisations, each authorisation shall be assessed and resolved separately by the general meeting. An authorisation granted to the board of directors to (a) increase the Company’s share capital or (b) to purchase treasury shares shall be limited in time, and shall in no event last longer than two years. The Code recommends that these board authorisations are limited in time to the next annual general meeting, such that any authorisation granted is reassessed annually. The Company shall follow this recommendation. No authorisation granted to the board of directors can be used prior to being registered in the Norwegian Register of Business Enterprises (Nw. Foretaksregisteret) (the “NRBE“).

7 Equal treatment and transactions with closely associated persons

7.1 Basic principles

The Company has only one class of shares. Each share in the Company carries one vote, and all shares carry equal rights, including the right to participate in general meetings and the right to dividends.

All shareholders shall be treated on an equal basis, unless there is a just and factual cause for treating them differently.

7.2 Deviation from existing shareholders’ pre-emption rights

Any decision to waive the pre-emption rights of existing shareholders to subscribe for shares in a share capital increase, shall be justified by the common interest of the Company and the shareholders.

Where the board of directors resolves to issue new shares and deviate from existing shareholders’ pre-emptive rights pursuant to an authorisation granted to the board of directors, the stock exchange announcement issued in connection with the share issue shall also include a justification for the deviation.

7.3 Transactions in treasury shares

The Company’s transactions in treasury shares shall be carried out through Oslo Børs’ trading platform at the prevailing trading price or by making a public offer to all shareholders. If the Company’s shares suffer from weak liquidity, the board of directors shall take particular care even when making purchases and sales through the stock exchange, in order to ensure equal treatment of shareholders.

All transactions in treasury shares must be evaluated in relation to, inter alia, the following rules, requirements and prohibitions as set out in the Norwegian STA and MAR:

  • the rules on duty of disclosure, cf. article 17 of MAR;
  • the requirement for equal treatment of all shareholders, cf. section 5-14;
  • the prohibition of use of inside of inside information, cf. article 8 of MAR;
  • the prohibition of market manipulation, cf. article 12 of MAR; and
  • the prohibition of unreasonable business methods, cf. section 3-7 of the Norwegian STA.

All transactions in treasury shares shall be publicly disclosed in a stock exchange announcement.

7.4 Transactions with shareholders and other closely associated persons

Transactions between the Company and its shareholders, a shareholder’s parent company, members of the board of directors, executive management or closely associated persons to any such party that are deemed material under the Norwegian Public Limited Liability Companies Act[1], are subject to approval by the general meeting. Furthermore, the board of directors is required to arrange for an independent auditor valuation of the transaction.

Pursuant to the Code, independent third party valuations shall also be procured for (i) transactions with shareholders and other closely associated persons that are deemed non-immaterial to either party involved (i.e. transactions that are below the materiality threshold set out in the Norwegian Public Limited Liability Companies Act, but still not deemed immaterial), and (ii) transactions between companies within the Group if any of the companies involved have minority shareholders. In such cases, the third party does not necessarily have to be an independent auditor.

8 Freely transferable shares

The shares of the Company are freely transferable and there are no limitations on any party’s ability to own or vote for shares in the Company.

9 General meetings

9.1 General meetings

9.1.1 Exercising rights

The board of directors shall ensure that the Company’s shareholders can participate and exercise their voting rights in the Company’s general meeting, and that the general meeting is an effective forum for shareholders and the board of directors. This shall, among other actions, be facilitated trough the following actions or documents:

  • the notice of the general meeting and any ancillary documents, the nomination committee’s recommendation and background information on the resolutions to be considered at the general meeting (if any) shall be available on the Company’s website no later than 21 days prior to the date of the general meeting;
  • the resolutions and any ancillary documentation shall be sufficiently detailed and comprehensive, thereby allowing shareholders to understand and make an opinion on all matters to be considered at the general meeting;
  • the deadlines for shareholders to register their attendance at the general meeting shall be set as close to the date of the general meeting as practically possible. The deadline may not expire before the earliest of five days before the date of the general meeting or the number of days set out in the Company’s articles of association;
  • the board of directors and the chairperson of the general meeting shall ensure that the shareholders are able to vote separately on each matter and each candidate nominated for election to the Company’s board of directors, the nomination committee and other corporate bodies of the Company (if applicable);
  • the chair of the board of directors and the CEO shall be present at general meetings. The Company should also ensure that other members of the board of directors are present at general meetings. The chair of the nomination committee should attend annual general meetings in order to present the committee’s recommendations and answer any questions. The auditor shall be present at general meetings where matters of relevance are on the agenda; and
  • an independent person to chair the general meeting shall be appointed.

9.1.2 Participation without being present

Shareholders who are unable to attend the general meeting shall be given the opportunity to be represented by proxy and to vote by proxy. The board of directors shall in this respect, with regards to the notice of the general meeting:

  • provide information on the procedure for attending by proxy;
  • nominate a person who will be available to vote on behalf of non-attending shareholders as their proxy (normally being the chair of the board of directors); and
  • prepare a proxy form, which shall, to the extent possible, be set up so that it is possible to vote separately on each individual matter on the agenda and each candidates nominated for election.

10 Nomination committee

10.1 General

The Company shall have a nomination committee, cf. the Company’s articles of association section 8. The general meeting elects the chairperson and members of the nomination committee and determines their remuneration.

The objectives, responsibilities and functions of the nomination committee shall be in compliance with rules and standards applicable to the Company, which are described in the Company’s “Instructions for the Nomination Committee” adopted by the general meeting on 25 May 2021. The Company shall ensure that shareholders have information about the composition of the nomination committee and deadlines for submitting proposals to the nomination committee.

10.2 Composition

The nomination committee shall consist of two members, whereas one of the members shall be independent from the Company’s board of directors and executive management. No more than one member of the nomination committee shall also be a member of the board of directors, and any such member should not offer him- or herself for re-election to the board of directors. Neither the CEO, nor any other member of the executive management, shall also be members of the nomination committee. The composition of the nomination committee should be such that the interests of shareholders in general are represented.

Rules for rotation of the nomination committee’s members are set out in the Company’s “Instructions for the Nomination Committee”.

10.3 Tasks

The nomination committee shall:

  • recommend candidates for the election to the board of directors and the nomination committee, and
  • recommend a suitable remuneration for the members of the board of directors and the nomination committee.

The nomination committee’s recommendation of candidates to the board of directors shall ensure that the board of directors is composed to comply with legal requirements and principles of corporate governance (cf. item 11 below).

The nomination committee’s recommendation of candidates to the nomination committee shall ensure that they represent a broad group of the Company’s shareholders.

The nomination committee’s candidate recommendation shall include a reasoning for proposing each individual candidate, as well as a statement on how the committee has carried out its work. The nomination committee’s reasoning for its recommendation shall include information about each candidate’s competence, capacity, independence and other relevant factors for the general meeting to adopt a sufficiently informed resolution. The recommendation shall be made available in accordance with the 21 days’ notice rule to call for a general meeting.

Shareholders shall be given the opportunity to submit proposals to the nomination committee for candidates up for election to the board of directors and other appointments in a simple and easy manner. A date for when such proposals must be submitted to be considered by the nomination committee shall be communicated.

11 Composition and independence of the board of directors

The composition of the board of directors should ensure that the board of directors has the expertise, capacity and diversity needed to achieve the Company’s goals, handle its main challenges and promote the common interests of all shareholders.

Each board member should have sufficient time available to devote to his or her appointment as a board member. The number of board members should be decided on this basis, and the board of directors shall consist of minimum three board members. The members of the board of directors shall be willing and able to work as a team, thereby enabling the board of directors to work efficiently as a collegiate body. The board of directors shall be composed so that it can act independently of any special interests. A majority of the members of the board of directors shall be independent of the executive management and the Company’s material business connections. Further, at least two of the members of the board of directors shall be independent of the Company’s major shareholder(s). A shareholder is considered to be a major shareholder if it owns or controls 10% or more of the Company’s shares or votes, and the board members’ independence from such shareholder(s) shall entail that there are no circumstances or relations that may reasonably be expected to influence an independent assessment of the member in question.

Neither the CEO, nor any member of the Company’s executive management, shall also be a member of the board of directors.

At least half of the members of the board of directors shall reside in Norway or another EEA country unless the Norwegian Ministry of Trade, Industry and Fisheries (Nw. Nærings- og fiskeridepartementet) has granted the Company an exemption from this statutory residency requirement. The composition of the board of directors shall be in compliance with the gender representation requirements set out in section 6-11a of the Norwegian Public Limited Liability Companies Act and represent sufficient diversity of experience and expertise to help ensure that the board of directors is able to carry out its work in a satisfactory manner and in accordance with the Group’s objectives.

All members of the board of directors, including whom shall be positioned as the chair, shall be elected by the Company’s general meeting. The term of office for the respective board members shall not be longer than two years at a time. Members of the board of directors may be re-elected. The re-election of the members of the board of directors should be phased, to prevent that the entire board of directors is replaced at once.

The Company’s annual report shall provide information on the expertise, experience and independence of the members of the board of directors, as well as information on their record of attendance at board meetings.

Further, the annual report will identify which members of the board of directors that are considered to be independent. Detailed information on candidates for the board of directors (both appointments and re-elections) shall be made available within the 21 days’ notice period for calling a general meeting.

Members of the board of directors are encouraged to own shares in the Company as this may contribute to increased economic relations between the shareholders and the members of the board of directors. Consideration should be given in this respect, to arrange for members to invest part of their remuneration in shares in the Company at market price, cf. section 14 below. However, caution should be taken not to let this encourage a short-term approach, which is not in the best long-term interests of the Company and its shareholders.

12 The work of the board of directors

12.1 General

The board of directors shall produce an annual plan for its own work, with particular focus on objectives, strategy and implementation. The board of directors shall implement instructions for its own work and the work of the executive management, focusing on determining allocation of internal responsibilities and duties. The objectives, responsibilities and functions of the board of directors and the CEO shall be in compliance with rules and standards applicable to the Group, which are described in the Company’s “Instructions for the board of directors of SmartCraft ASA”.

12.2 Conflict of interests and disqualification

A members of the board of directors and executive management cannot consider matters in which it or any of its related parties have a special financial or prominent personal interest. Each board member shall ensure that the board of directors and executive management are aware of any material interests that they may have in matters to be considered by the board of directors, so that these can be considered on an unbiased and satisfactory manner.

12.3 Committees

12.3.1 Overview

The board of directors is encouraged to appoint sub-committees as such may yield efficiency in the board of directors’ work, as well as secure a more thorough and independent handling of matters under the responsibility of the board of directors. In accordance with Norwegian law, the members of the board of directors, as a collegial body, are jointly responsible for making decisions. This means that no part of the decision making responsibility can be delegated to board committees, thus making the role of appointed sub-committees only preparatory. The final decision lies with the board of directors, jointly.

If sub-committees are appointed, the board of directors shall issue specific instructions for their work. Furthermore, the sub-committees shall have the ability to utilise resources available in the Company or be able to seek advice and recommendations from sources outside of the Company. The board of directors shall provide details of the sub-committees in the Company’s annual report.

12.3.2 Audit committee

Pursuant to section 6-41 of the Norwegian Public Limited Liability Companies Act, Rule Book II and recommendations set out in the Code, the Company is obliged to establish an audit committee. The audit committee shall function as a preparatory and advisory sub-committee of the board of directors in relation to, among other matters, the board of directors’ monitoring of the Company’s financial reporting and internal audit, systems for internal control and risk management and the work of the statutory auditor.

Pursuant to the Code, the entire board of directors should not function as the Company’s audit committee. In addition to fulfilling the requirements set out in section 6-42 and section 6-43 in the Norwegian Public Limited Liability Companies Act, the Code recommends that the composition of the audit committee is such that the majority is independent from the Company’s business.

The objectives, responsibilities and functions of the audit committee shall be in compliance with rules and standards applicable to the Company, as described in the Company’s “Instructions for the audit committee”.

12.3.3 Remuneration committee

The board of directors shall have a remuneration committee, which shall function as a preparatory and advisory sub-committee of the board of directors in questions relating to the Company’s strategy for the compensation of its executive management. The purpose of the remuneration committee is to ensure thorough and independent preparation of matters relating to compensation of the Company’s executive management.

The remuneration committee shall provide the board of directors with a guideline and recommendation for the salary and other remuneration for executive management, which shall be made in accordance with section 6-16a of the Norwegian Public Limited Liability Companies Act. The members of the remuneration committee are elected by and among the members of the board of directors for a term of up to two years. The members of the remuneration committee shall be independent of the Company’s executive management.

The objectives, responsibilities and functions of the remuneration committee shall be in compliance with rules and standards applicable to the Company, as described in the Company’s “Instructions for the Remuneration Committee”.

12.4 Annual evaluations

The board of directors shall annually evaluate its performance and expertise for the previous year. This evaluation shall include the composition of the board of directors and the manner in which its members functions, individually and as a group, in relation to the objectives set out for its work. The report shall be made available to the nomination committee.

13 Risk management and internal control

13.1 General

The board of directors has the responsibility to ensure that the Company has sound and appropriate internal control systems in relation to the scope and nature of the Company’s activities. By implementing effective internal control systems and risk management systems, the Group may be better protected against situations that could damage its reputation or financial standing. Effective and proper internal control and risk management are important factors when building and maintaining trust, to reach the Company’s objectives, and ultimately create value for the Group and its shareholders.

By implementing an effective internal control system, the Company is better suited to manage commercial risk, operational risk, the risk of breaching legislation and regulations as well as other forms of risk that may be material to the Company. The board of directors should be mindful of the correlation between the Company’s internal control systems and effective risk management. The internal control system shall also address the organisation and execution of the Company’s financial reporting, as well as cover guidelines for how the Company integrates considerations related to its stakeholders into its value creation.

SmartCraft shall comply with all laws and regulations that apply to the Group’s business activities.

13.2 Annual review and risk management in the annual report

The board of directors shall annually review the Company’s most important areas of risk exposure and the internal control arrangement in place for such areas. The review shall pay attention to any material shortcomings or weaknesses in the Company’s internal control and how risks are being managed.

In the annual report, the board of directors shall describe the main features of the Company’s internal control and risk management systems, as they are connected to the Company’s financial reporting. This shall cover the control environment in the Company, risk assessment, control activities and information, communication and follow-up. The board of directors is obligated to ensure that it is updated on the Company’s financial situation, and shall continually evaluate whether the Company’s equity and liquidity are adequate in relation to the risk associated with the Company’s activities, and take immediate action if the Company’s equity or liquidity at any time is believed to be inadequate.

The Company’s management shall focus on frequent and relevant reporting of both operational and financial matters to the board of directors. The purpose of such reporting is to ensure that the board of directors has sufficient information for their decision-making and is able to respond quickly to changing conditions.

Board meetings shall be held frequently, and management reports, including financial performance, shall be provided to the board of directors as a minimum on a monthly basis.

14 Remuneration of the board of directors

The remuneration of the board of directors is determined by the shareholders at the Company’s annual general meeting, based on the proposal from the nomination committee.

The remuneration of the board of directors shall reflect:

  • the board of directors’ responsibility and expertise;
  • the complexity of the Company and its business; and
  • the time spent and the level of activity performed in the board of directors and any board committee the board members participate in.

The remuneration of the board of directors shall not be linked to the Company’s performance and share options shall not be granted to board members. The remuneration to the board members shall be such that their independence is protected.

Members of the board of directors, or companies associated with a board member, shall not engage in specific assignments for the Company in addition to their appointment as members of the board of directors. If a board member nonetheless takes on any such assignment, the entire board of directors must be informed, and the fees shall be approved by the board of directors.

The annual report shall provide details of all elements of the remuneration and benefits of each member of the board of directors. This includes a specification of any consideration paid to members of the board of directors in addition to their ordinary board remuneration.

15 Remuneration of executive management

The Company’s guidelines for determining remunerations to the CEO and other members of the executive management as set out in the “Instructions for the Remuneration Committee” should at all times support prevailing strategy and values in the Company. These guidelines shall be communicated to the annual general meeting, and include the main principles for the Company’s remuneration policy as well as contribute to align the interests of shareholders and executive management.

Performance-related remuneration of the executive management shall be linked to value creation for shareholders or to the Company’s profit over time. Such arrangements are meant to incentivise performance and shall be based on quantifiable factors the employee may influence, and then be rewarded accordingly. There should be a cap on performance-related remuneration.

The salary and remuneration of the CEO shall be determined by the board of directors in a board meeting. Based on the guidelines communicated to the annual general meeting and the recommendations of the remuneration committee, the board of directors shall produce a statement in the Company’s report on corporate governance on how the salary and remuneration of the Company’s CEO is determined in addition to the remuneration strategy of the executive management, as well as provide an account of the Company’s remuneration policy the previous financial year. This statement shall be considered by the Company’s annual general meeting before a final resolution regarding remuneration is made by the board of directors.

16 Information and communications

16.1 General information

The Company shall establish guidelines for its reporting of financial and other information based on transparency and taking into account the rules on good stock exchange practice and general requirement of equal treatment in the securities market. The Company is obliged to continually provide its shareholders, Oslo Børs and the securities market and the financial market in general with timely and precise information about the Company and its operations. This information shall be published in accordance with Oslo Børs’ applicable information system (NewsPoint).

Relevant information will be given in the form of annual reports, quarterly reports, press releases, notices to the stock exchange and through published investor presentations in accordance with what is deemed appropriate and required at any given time. Such information shall be published through Oslo Børs’ applicable information system (NewsPoint) and/or be published at the Company’s website.

The Company shall clarify its long-term potential, including strategies, value drivers and risk factors. The Company shall maintain an open and proactive policy for investor relations, a website designed to incorporate “sound practices”, and shall give regular presentations in connection with annual and provisional results.

The Company shall publish an annual, electronic financial calendar with an overview of dates for important events, such as the annual general meeting, interim financial reports, public presentations and payment of dividends, if applicable. The information shall be available in English.

Unless there are applicable exemptions, and these are invoked, the Company shall promptly disclose all inside information (as defined in article 7 of MAR). In any event, the Company will provide information about certain events, e.g. by the board of directors and the general meeting concerning dividends, mergers/demergers or changes to the share capital, the issuing of subscription rights, convertible loans, all agreements of major importance that are entered into by the Company and closely associated persons and any changes to the auditor.

Separate guidelines have been drawn up for handling of inside information, see the Company’s “Instructions for Handling of Inside Information”, “Instructions for Primary Insiders and their closely associated persons” and “Routines for Secure Handling of Inside Information”. The Company shall also have in place a policy on whom in the board of directors who is entitled to publicly speak on behalf of the Company on various subjects. Further, the Company shall have a contingency plan on how to respond to events of a particular character of interest to the media.

16.2 Information to shareholders

In addition to the board of directors’ dialogue with the Company’s shareholders at the general meetings, the board of directors should make suitable arrangements for shareholders to communicate with the Company at other times. This will enable the board of directors to develop an understanding of which matters regarding the Company that are of a particular concern or interest to its shareholders.

A separate investor relation policy has been drawn up to assist the Company in building trust and awareness in the investor community by ensuring that investor relation activities are conducted in compliance with relevant rules, regulations and recommended practices, see the Company’s “Investor Relations Policy”.

17 Takeovers

17.1 General

The board of directors shall have established the main principles for its actions in the event of a takeover offer.

In a takeover process, the board of directors and the executive management each have independent responsibilities to ensure that the Company’s shareholders are treated equally and that there are no unnecessary interruptions to the Company’s business activities. The board of directors has a particular responsibility to ensure that the shareholders are given sufficient information and time to assess the offer.

17.2 Main principles for action in the event of a takeover offer

In the event of a takeover process, the board of directors shall abide by the principles of the Code, and ensure that the following take place:

  • the board of directors shall not seek to hinder or obstruct any takeover offer for the Company’s operations or shares unless they have valid and particular reasons for doing so, including, but not limited to, the valuation of the Company;
  • the board of directors shall not exercise mandates or pass any resolutions with the intention of obstructing the takeover offer unless this is approved by the general meeting following announcement of the bid;
  • the board of directors shall not undertake any actions intended to give shareholders or others an unreasonable advantage at the expense of other shareholders or the Company;
  • the board of directors shall not enter into an agreement with any offeror that limits the Company’s ability to arrange other offers for the Company’s shares, unless it is self-evident that such an agreement is in the common interest of the Company and its shareholders;
  • the board of directors and executive management shall not invoke measures with the intention of protecting their own personal interests at the expense of the interests of shareholders; and
  • the board of directors must be aware of the particular duty it has for ensuring that the values and interests of the shareholders are protected.

In the event of a takeover offer, the board of directors shall, in addition to complying with relevant legislation and regulations, seek to comply with the recommendations set out in the Code. This includes obtaining a valuation from an independent expert. On this basis, the board of directors will make a recommendation as to whether or not the shareholders should accept the offer. The board of directors’ statement on the offer shall make it clear whether the views expressed are unanimous, and if this is not the case it shall explain the basis on which specific members of the board of directors have excluded themselves from the statement.

A takeover process gives rise to a particular duty of care to disclose information, where openness is an important tool for the board of directors to ensure equal treatment of all shareholders. The board of directors shall strive to ensure that neither inside information about the Company, nor any other information that must be assumed to be relevant for shareholders in a bidding process, remains unpublished. In this respect, agreements entered into between the Company and the offeror that are material to the market’s evaluation of the offer should be publicly disclosed no later than at the same time as the announcement that the offer will be made is published.

There are no other written guidelines for procedures to be followed in the event of a takeover offer. The Company has not found it appropriate to draw up any explicit basic principles for the Company’s conduct in the event of a takeover offer, other than the actions described above. The board of directors concurs with what is stated in the Code regarding this issue.

18 Statutory auditor

The Company’s auditor shall annually present the main features of the plan for the audit of the Company to the board of directors or the audit committee.

The auditor shall also provide the audit committee with the following:

  • an annual written confirmation of its independence;
  • information on services other than statutory audit provided to the Company during the course of the financial year; and
  • inform about any threats to the auditor’s independence, and provide evidentiary documentation of the measures implemented to combat such threats.

The auditor shall participate in meeting(s) of the board of directors where any of the following topics is on the agenda: the annual accounts, accounting principles, assessment of any important accounting estimates and other matters of importance where there have been disagreement between the auditor and the Company’s executive management and/or the audit committee.

The auditor shall at least once a year present to the board of directors or the audit committee a review of the Company’s internal control procedures, including identification of weaknesses and proposals for improvement.

The audit committee shall hold a meeting with the auditor at least once a year in which no representative of the executive management can be present. In order to strengthen the board of directors’ work on financial reporting and internal control, the auditor shall provide a report to the audit committee on the main features of the audit in respect to the previous financial year, and especially mention any material weaknesses identified in the internal control relating to the financial reporting process.

The board of directors shall specify the executive management’s right to use the auditor for other purposes than auditing.

The board of directors shall report the remuneration paid to the auditor to the shareholders at the annual general meeting, including a break-down of the fee paid for audit work and fees paid for other specific assignments, if any.

The auditor shall attend the general meeting if the matters to be dealt with are of such nature that his or her presence is deemed necessary. The auditor is in any case entitled to participate in the general meeting.

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[1] Pursuant to the Norwegian Public Limited Liability Companies Act, a transaction is, as a starting point, deemed material if the Company’s consideration under the agreement has a fair market value in excess of 2.5% of the Company’s balance sheet amount.

Investor relations policy

Adopted by the board of directors on 25 May 2021, effective from the first day of listing of the Company’s shares on Oslo Børs.

This investor relations policy (the “IR Policy“) applies to SmartCraft ASA (“SmartCraft” or the “Company“) and is based on Oslo Børs’ recommendations for companies listed on Oslo Børs, in particular the Oslo Børs Code of Practice for IR, last amended on 1 March 2021.

1 Mission

Investor relations shall provide the public with accurate, comprehensive and timely information to form a good basis for making decisions related to valuation and trade of the SmartCraft share. The aim of providing such information is to reduce investors’ risk and the volatility of the SmartCraft share, and contributing to a pricing of the share that reflects the Company’s underlying values and future prospects.

2 Equal information

SmartCraft’s main communication channels are stock exchange releases, press releases and its own web pages (https://www.smartcraftready.com) in order to secure that the same information is made available to all audiences simultaneously. Although SmartCraft holds regular meetings for analysts, investors, journalists and employees, all material new information is first published on the stock exchange news platform www.newsweb.no and on SmartCraft’s web pages. SmartCraft will provide a consistent level of information regardless of whether the news is positive or negative.

3 Authorisations

SmartCraft’s spokespersons to the financial markets (investors, analysts and financial media) are the chief executive officer, the chief financial officer or others authorized by these. Questions from investors and financial analysts to other SmartCraft employees shall be referred to the chief executive officer and the chief financial officer.

4 Reporting dates and silent periods

SmartCraft publishes quarterly financial results according to its financial calendar. The financial calendar is published annually on SmartCraft’s web page and to the stock exchange. Ahead of announcing its quarterly results, SmartCraft exerts caution with regards to information communicated externally, and the Company’s representatives will during this period refrain from discussing the Company’s performance and prospects with analysts, investors, media or others, to minimize the risk of unequal information in the marketplace. The so-called “silent period” lasts for the last 30 days before a quarterly report is published.

5 Guiding

The Company operates in accordance with a set of financial targets, established by the Company’s board of directors. These financial targets govern the Group’s operations within a defined strategic period. Other than these financial targets, the Company shall as a principle rule not publish specific guiding on the Group’s future financial results. Any exceptional deviation from this principle rule shall be approved by the board of directors, and specifically communicated to the financial market.

6 Compliance

All disclosure, communication and reporting shall be in compliance with the applicable laws and regulations, in particular the Norwegian Securities Trading Act, regulation (EU) No. 596/2014 on market abuse (market abuse regulation), as implemented in Norway in accordance with section 3-1 of the Securities Trading Act as of 1 March 2021 (as amended from time to time) (MAR), the Norwegian Accounting Act and the Rule Books. The Company shall also comply with the relevant recommendations and market practices for reporting financial and other IR information. SmartCraft complies with the Oslo Børs Code of Practice for IR of 1 March 2021.

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Articles of Association

for

SmartCraft ASA

Reg. no. 918 356 649

 As of 25 May 2021

§ 1 – Company name

The company’s name is SmartCraft ASA. The company is a public limited liability company.

§ 2 – Registered offices

The company’s business office shall be in the municipality of Ålesund.

§ 3 – The object of the Company

The company’s objects are industry, trade and investments in shares and other assets in other companies and enterprises as well as all other activities related to this.

§ 4 – Share capital

The company’s share capital is NOK 4,496,723, divided into 138,782,400 A-shares (ordinary shares) and 310,889,900 B-shares (preference shares), each with a nominal value of NOK 0.01.

Shares within each share class are equal unless otherwise is stated in these articles of association.

The company’s shares shall be registered in a securities register (the Norwegian Central Securities Depository (VPS)). The company may establish a restricted fund.

§ 5 – Preferential distribution

Each B-share is entitled to a preferential distribution corresponding to (i) NOK 0.50 plus (ii) a preferential dividend of NOK 0.05 for each full year from the date of the subscription of the B-share(s) (such preferential dividend shall be allocated with the same amount per calendar day). The total of (i) and (ii) is hereinafter referred to as the “Preferred Amount”.

If B-shares are subscribed for and issued at a subscription price lower than NOK 0.50, the Preferred Amount shall in any case be calculated on the basis of an assumed subscription price of NOK 0.50 per B-share.

In the event of distributions from the company, including by way of dividends/liquidation dividends, upon redemption of shares and liquidation of the company, the following order shall apply:

All distributions shall be credited to the B-shares until these shares have been repaid the total Preferred Amount.

When the B-shares no longer have dividend rights, all distributions shall be credited to the A-shares.

Distributions on the B-shares shall reduce the Preferred Amount from the date the payment takes place. When the Preferred Amount has been repaid, the B-shares are no longer entitled to dividends. The A-shares are entitled to all distributions from the company that are not to be credited to the B-shares in accordance with the above.

§ 6 – Valuation

In connection with sale of shares, mergers or in other cases, including a listing of the company’s shares on a recognized stock exchange, which involves a valuation of the company’s shares, the value of the A-shares shall be equal to the total equity value of the company less the remaining invested capital and the earned preferential dividends on the B-shares as of the relevant valuation date.

§ 7 – Board of directors

The company’s board of directors shall consist of three to nine shareholder elected members. The board of directors is elected for a period of two years, unless otherwise decided by the general meeting in connection with the election.

§ 8 – Signatory rights

Two members of the board of directors jointly have the right to sign on behalf of the company. The board of directors may grant powers of procuration.

§ 9 – General meeting

Documents concerning matters to be considered at the company’s general meeting, including documents which by law must be included in or enclosed with the notice of the general meeting, need not be sent to shareholders if such documents are made available on the company’s website. Notwithstanding the foregoing, a shareholder may request a copy of documents which concern matters to be considered at the general meeting.

The board of directors may decide that shareholders who want to participate in the general meeting must notify the company thereof within a specific deadline that cannot expire earlier than three days prior to the general meeting.

The shareholders may cast their votes in writing, including through electronic communication, in a period prior to the general meeting. The board of directors may establish specific guidelines for such advance voting. It must be stated in the notice of the general meeting which guidelines have been set.

The annual general meeting shall deal with and decide the following matters:

  1. Approval of the annual accounts and the annual report, including distribution of dividends; and
  2. Other matters which are required by law or the articles of association to be dealt with by the general meeting.

§ 10 – Nomination committee

The company shall have a nomination committee. The nomination committee shall consist of between two and three members as resolved by the general meeting, where the majority of the members shall be independent of the board of directors and the company’s management. The members of the nomination committee, including the chairman, will be elected by the general meeting for a period of two years unless the general meeting decides otherwise in connection with the election.

The nomination committee shall give recommendations to the general meeting for the election of shareholder elected members to the board of directors and the chairperson, and to members of the nomination committee, in addition to recommendations for remuneration to the members of the board of directors and the members of the nomination committee. The general meeting may adopt instructions for the nomination committee.

§ 11 – Redemption

The company may redeem shares by a reduction of the share capital according to the Norwegian Public Limited Liability Companies Act section 12-7, without notice to creditors, cf. the Norwegian Public Limited Liability Companies Act section 12-6, provided that the requirements in section 12-7 are fulfilled.

General Meeting

The shareholders of SmartCraft exercise ultimate authority through the General Meeting, according to Articles of Association and the Norwegian Public Limited Liability Companies Act. The General Meeting deliberates and decides important issues concerning SmartCraft, reflecting the opinions of shareholders.

The Annual General Meeting (AGM) takes place every year within six months of the close of the financial year. Extraordinary general meetings are convened if necessary, according to the Articles of Association and the Norwegian Public Limited Liability Companies Act.

At the AGM the following decisions are made:

  • Election of the shareholders’ representatives to the Board of Directors
  • Election of members of the Nomination committee
  • Election of the external auditor and the auditor’s remuneration
  • Approval of the Board of Directors’ report, the financial statements and any dividend proposed by the Board
  • Other matters according to the Norwegian Public Limited Liability Companies Act

Instructions for the nomination committee

Adopted by the general meeting on 25 May 2021, effective from the first day of listing of the Company’s shares on Oslo Børs

Current members:

Arild Bødal (Chairman), arildbodal@gmail.com
Ingeborg Aavatsmark

1 Composition

SmartCraft ASA (“SmartCraft” or the “Company“) has established a nomination committee, cf. clause 8 of the Company’s articles of association. The nomination committee shall consist of two members, whereas one of the members shall be independent from the board of directors and the executive management. No more than one member of the nomination committee should be a member of the board of directors, and any such member should not offer himself for re-election to the board. Members are elected for two years at a time, unless otherwise has been resolved by the general meeting.

The Company’s general meeting elects the members of the nomination committee and determines their remuneration. Costs incurred by the nomination committee shall be covered by the Company.

2 Responsibilites

The nomination committee shall recommend:

  • candidates for the election of members, including the chair, to (a) the board of directors of the Company and (b) the nomination committee; and
  • remuneration of the members of (a) the board of directors and (b) the nomination committee.

3 Recommendations

3.1 Nominations of candidates for the board of directors

The nomination of candidates for election of members, including the chair, to the board of directors should take the following into account:

  • the board of directors should be composed in such a manner that the interests of the shareholders and the Company’s need for competence and diversity are maintained;
  • the composition of the board of directors must satisfy applicable legal requirements and principles of corporate governance;
  • the candidates should be likely to be approved;
  • the board of directors must function well as a collegiate body; and
  • members should be independent of the executive management and any significant business associates.

Before nominating a candidate for election, the nomination committee must seek confirmation from the individual in question that he or she is willing to accept the appointment if elected (i.e. obtain a declaration of willingness from such person).

3.2 Recommendations for remuneration of board members

Recommendations for remuneration of the members of the board of directors and the nomination committee, respectively, should take into account such body’s significance, and ensure that the proposal is suited to the character and time commitment of the tasks carried out.

4 Reasoning

The recommendations should include explanations detailing how each of the candidates fulfil the shareholders’ and the Company’s needs. Such reasoning shall include information about the competence, capacity and independence of each candidate. The information about a candidate should include his or her age, education and professional experience. Any ownership interest in the Company must be disclosed, as shall any assignments on behalf of the Company and any significant position in or assignments for other companies or organisations.

The nomination committee shall consider the need for changes in the composition of the board of directors, and shall maintain contact with different shareholders, members of the board of directors and the executive management of the Company. The nomination committee must consider the board of directors’ annual evaluation report closely. In the event of a suggestion of re-election of board members, the recommendation should also state how long the candidate has served as a member of the board of directors, and should detail his or her participation in board meetings.

The recommendations should also describe the working process of the nomination committee.

The nomination committee shall be responsible for proposing the remuneration to the members of the board of directors and the nomination committee. The nomination committee’s proposals in this respect shall include an explanation of how the committee has arrived at its recommendations.

5 Working methods

The chairperson of the nomination committee has the main responsibility for the committee’s work, and shall ensure that the committee has adequate access to necessary competence. In relation to this, the committee may use company resources or seek advice and recommendations from external sources.

The nomination committee will hold meetings to reach its decisions. The nomination committee’s meetings are held after they are called for by the chairperson, who is obliged to call for a meeting if one of the members of the committee so requests. The nomination committee’s meetings may be held in person, by phone or by video.

The nomination committee constitutes a quorum when both members are present at the meeting.. Each member has one vote and decisions made by the nomination committee require simple majority of the votes represented at the meeting. In the event of an equal number of votes, the chairperson of the nomination committee has the casting vote. The nomination committee shall produce written minutes of its meetings and shall deliver its minutes to the Company for safekeeping.

The nomination committee must look actively to the shareholders and anchor the recommendation with the Company’s largest shareholders. It must ensure that information of any deadlines for proposing candidates or making suggestions to the nomination committee regarding elections of members of the board of directors and the nomination committee is made available on the Company’s website.

The board of directors will pass on its evaluation of its own activities and competence to the nomination committee. The chairperson of the board and the Chief Executive Officer must be summoned to at least one nomination committee meeting before the committee gives its final recommendation. The committee must collect relevant information from the Company’s administration or other individuals, including from shareholders and the board of directors.

6 Processing of the recommendation to the general meeting

The nomination committee’s recommendations shall be completed in time to be made accessible to the shareholders, together with the notice to the general meeting at the very latest. The recommendation should be submitted in writing to the chairperson of the board of directors.

The chairperson of the nomination committee presents the recommendation to the general meeting.

7 Duty of confidentiality

Given its duties, the nomination committee shall, to the greatest extent possible, ensure that information on the candidates considered for nomination is kept confidential.

The nomination committee shall keep all information it receives or collects on possible candidates confidential, and shall ensure that all such information is stored in a satisfactory manner.

* * * *

Contact

gustav line

Gustav Line
CEO

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Gustav Line

CEO

gustav.line@smartcraft.no
kjartan bøe

Ola Nordmann
Customer Support

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Kjartan Bø

CFO

kjartan.bo@smartcraft.no
gustav line

Gustav Line
CEO

Lorem ipsum..

Gustav Line

CEO

gustav.line@smartcraft.no
kjartan bøe

Ola Nordmann
Customer Support

Lorem ipsum..

Kjartan Bø

CFO

kjartan.bo@smartcraft.no