Vitec Software Group AB

VIT B

SE0007871363

Software

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23/04	Vitec Software Group AB Approves Dividend	CI
18/04	Transcript : Vitec Software Group AB, Q1 2024 Earnings Call, Apr 18, 2024

Vitec Software : Corporate governance report and Audit report 2023

April 29, 2024 at 06:46 pm IST


GROUP OPERATIONS	SHARES AND SHAREHOLDERS	ADMINISTRATION REPORT	SUSTAINABILITY REPORT	CORPORATE GOVERNANCE REPORT	FINANCIAL INFORMATION

Comments from the Chairman of the Board	Corporate governance	Board of Directors	Management	Multi-year overview	Appropriation of profits

Corporate governance report

Vitec Annual Report 2023 94

GROUP OPERATIONS	SHARES AND SHAREHOLDERS	ADMINISTRATION REPORT	SUSTAINABILITY REPORT	CORPORATE GOVERNANCE REPORT	FINANCIAL INFORMATION

Comments from the Chairman of the Board	Corporate governance	Board of Directors	Management	Multi-year overview	Appropriation of profits

"Acquisitions are constantly recurring and an essential part of every board meeting."

Comments from the Chairman of the Board

Because Vitec has significantly increased its presence in the Nether- lands, the Board held the annual in- depth meeting in Amsterdam. The CEOs of the Dutch business units introduced themselves and their operations. We also held seminars on cultural differ- ences, differences in legislation, and acquisition potential for Vitec - important knowledge and experiences that the Board has gained for our continued growth.

CURRENT TOPICS

With the interest rate increases during the year, financial issues remained a focus for the Board. Acquisition discussions and decisions are constantly recurring and an essential part of every board meeting this year.

MEETING STRUCTURE

The rules of procedure for the Board state that five meetings are to be held each year, with the annual accounts, interim reports and the budget as the primary items on the agenda. In reality, many more meetings are necessary. During the year, 17 minuted meetings were held, along with a handful of information meetings.

DECISIONS DURING THE YEAR

Increase of our credit facility by SEK 500 million; it now amounts to SEK 3,000 million.
Prepare and propose to the Annu- al General Meeting an incentive pro- gram for all employees.
Six acquisitions
Establishing the vision: "Shaping a wiser and more sustainable future."

Read more about the work of the Board in the corporate governance report.

GENDER-BALANCED BOARD WITH A GOOD CLIMATE FOR DISCUSSION In 2023, our Board consisted of six members, three women and three men. Our combined skills and varied professional backgrounds provide a good climate for dialogue that will move us forward and contribute to carefully considered decision-making.Ongoing Board work requires a high level of commitment from all members.

In conclusion, I would like to thank Group Management for their excellent cooperation, as well as all of our employees, who contributed to Vitec's continued profitable and sustainable growth.

Lars Stenlund, Chairman of the Board

Vitec Software Group

Vitec Annual Report 2023 95

GROUP OPERATIONS	SHARES AND SHAREHOLDERS	ADMINISTRATION REPORT	SUSTAINABILITY REPORT	CORPORATE GOVERNANCE REPORT	FINANCIAL INFORMATION

Comments from the Chairman of the Board	Corporate governance	Board of Directors	Management	Multi-year overview	Appropriation of profits

Corporate governance

Vitec Software Group AB (publ) is a public limited company that was listed on Nasdaq Stockholm on July 4, 2011. The company is headquartered in Umeå, Sweden. Governance in the Vitec Group is provided through external regulations, internal governance documents and policies. Vitec has a decentralized organization model with 40 independent business units, Group Management and common support functions. Corporate governance defines and allocates responsibilities and roles with respect to shareholders, the Board of Directors, management and other stakeholders.

REGULATORY FRAMEWORK

Vitec's corporate governance is based on Swedish legislation. The external framework mainly comprises:

The Swedish Companies Act
The Swedish Annual Accounts Act
The Rulebook for Issuers on Nasdaq Stockholm
The Swedish Corporate Governance Code.

Vitec complies with the Swedish Corporate Governance Code without exception. We also apply internal control instruments, the most important

of which is the Articles of Association adopted by the AGM, followed by the Board of Directors' Rules of Procedure and the Board of Directors' instructions to the CEO. The Board of Directors has also adopted a number of binding poli- cies, guidelines and instructions that are applicable to the Group's operations.

STRUCTURE FOR CORPORATE GOVERNANCE AT VITEC

Shareholders

Nomination Committee	General Meeting of

	Shareholders
	Auditors
	Board of Directors

CEO

Group Management

Business units

External governance documents

The Swedish Companies Act, Swedish Annual Accounts Act, Rule Book for Issuers, Swedish Corporate Governance Code and other relevant laws and regulations.

Internal governance documents

Business concept, goals and strategies, Articles

of Association, the Board of Directors' Rules of Proce- dure, CEO's instructions, Code of Conduct and policies.

Vitec Annual Report 2023 96

GROUP OPERATIONS	SHARES AND SHAREHOLDERS	ADMINISTRATION REPORT	SUSTAINABILITY REPORT	CORPORATE GOVERNANCE REPORT	FINANCIAL INFORMATION

Comments from the Chairman of the Board	Corporate governance	Board of Directors	Management	Multi-year overview	Appropriation of profits

THE SHARE AND SHAREHOLDERS The Vitec Software Group's class B share is listed on the Nasdaq Stock- holm. At the end of 2023 Vitec had 11,601 shareholders. Lars Stenlund and Olov Sandberg were the largest shareholders in terms of votes, with 3.6% of capital and 19.4% of votes, and 3.1% of capital and 18.3% of votes, respective- ly. The company's 3 largest shareholders in terms of votes owned 100% of class A shares and 0.7% of class B shares, and the company's 10 largest shareholders owned 34.8% of class B shares. At the same date, the total market value was SEK 21,977 million. The number of shares was 37,535,487, of which 34,885,487 were class B shares and 2,650,000 were class A shares.

GENERAL MEETING OF SHAREHOLDERS The General Meeting of Shareholders is the highest decision-makingbody in the company. Shareholders are given the opportunity to exercise their influence as represented by their shareholdings at this meeting. Each class A share represents ten votes and each class B share represents one vote. All shareholders who are registered in the share register maintained by Euroclear on the record date and who have notified their intent to participate in due time are entitled to attend the Meeting and to vote. Shareholders who cannot participate in person may elect a representative. A regular meeting of shareholders (AGM) is to be held within six months from the

end of the financial year. The AGM's mandatory tasks include adopting the income statement and balance sheet, and processing the profit/loss for the year. The AGM also resolves on remuneration policies for senior executives and on whether to discharge the Board members and CEO from liability. The AGM chooses Board members, based on proposals from the Nomination Committee (see below), to serve until the end of the next Annual General Meeting. The Articles of Association are amended through resolutions passed by the AGM pursuant to the regulations of the Swedish Companies Act. The AGM is held in Swedish.

2023 Annual General Meeting

The AGM was held on April 25 at Hotel

Clarion in Umeå, Sweden.

Shareholders were invited to attend the meeting physically, by proxy, or by postal voting. Both shareholders and others were offered the opportunity to follow the Annual General Meeting by webcast. A total of 276 shareholders were present, representing 82.5% of the votes.

Minutes of the AGM are available at our website, vitecsoftware.com.

2024 Annual General Meeting
The 2024 AGM will be held at 5:30 p.m.
on April 23 at Universum in Umeå, Swe-
den. For registration and more informa-	▲
tion, see vitecsoftware.com.	Olle Backman at the 2023 AGM.

Vitec Annual Report 2023 97

GROUP OPERATIONS	SHARES AND SHAREHOLDERS	ADMINISTRATION REPORT	SUSTAINABILITY REPORT	CORPORATE GOVERNANCE REPORT	FINANCIAL INFORMATION

Comments from the Chairman of the Board	Corporate governance	Board of Directors	Management	Multi-year overview	Appropriation of profits

NOMINATION COMMITTEE

The Nomination Committee's primary task is to present nominees to the AGM for election as the Board's members and Chairman, and nominees for auditors, in consultation with the Audit Committee. The Nomination Committee's work is to be characterized by transparency and discussion to achieve a well-balanced Board of Directors. The Nomination Committee adopted regulation 4.1 of the Swedish Corporate Governance Code as its diversity policy when preparing the list of candidates for

the Board, with the aim of creating a well-functioning Board composition with respect to diversity and broad representation in terms of gender, nationality, age and industry experience. The purpose of the Nomination Committee is to nominate a Board comprising members who complement each other with their experiences and expertise, so as to enable the Board to contribute to the positive development of the company. The Nomination Committee consistently focuses on diversity, in order to ensure that the Board of Directors has varying perspectives on Board work and the considerations given. The Nomination Committee also considers the need for renewal and carefully investigates whether the nominated Board members are able to devote sufficient time and due attention to Board work. All shareholders have the opportunity to submit motions concerning prospective Board members to the Nomination Committee.

The Nomination Committee has participated in the evaluation of the Board. The Nomination Committee is also tasked with preparing nominees to Chair the AGM, proposals on the remuneration of the Board and any fees to committees and subcommittees, and auditor's fees. The 2023 AGM resolved that each of the three largest shareholders be allowed to appoint their own member in the Nomination Committee. It was also resolved that the Nomination Committee should comprise the Chairman of the Board and three additional members. The members of the Nomination Committee serving until the AGM on April 23, 2024 are:

Patrik Jönsson, Chairman of the Nomination Committee, represents SEB Investment Management
Lars Stenlund, Chairman of the Board of Vitec, largest shareholder in terms of votes
Jerker Vallbo, third largest share- holder in terms of votes
Thomas Eklund

At the time this report was prepared, the Nomination Committee had held four meetings prior to the 2024 Annual General Meeting. No fees were paid for the Nomination Committee's work.

ARTICLES OF ASSOCIATION

The company's activities comprise the purchase, management and sale of real estate and chattels, and other activities

consistent therewith. The share capital shall be not less than SEK 1,600,000 and not more than SEK 6,400,000. The company's shares are to be issuable in two series, referred to as Class A and Class B. When voting at the AGM, each class A share carries ten votes and a class B share carries one vote. If both classes of share are issued, the total number of shares of each share class may not exceed 99 hundredths of the total number of shares in the compa- ny. The Articles of Association can be found in their entirety at our website, vitecsoftware.com.

Vitec Annual Report 2023 98

GROUP OPERATIONS	SHARES AND SHAREHOLDERS	ADMINISTRATION REPORT	SUSTAINABILITY REPORT	CORPORATE GOVERNANCE REPORT	FINANCIAL INFORMATION

Comments from the Chairman of the Board	Corporate governance		Board of Directors	Management	Multi-year overview	Appropriation of profits

Board of Directors

The Board's duty is to manage the company's affairs on behalf of the shareholders. Board work is governed by applicable laws and recommenda- tions, and by the Board of Directors' Rules of Procedure, which comprises rules for the division of duties between the Board and CEO, financial reporting, investments and financing. The Rules of Procedure are adopted annually at the statutory Board meeting in direct connection to the AGM.

The Board's responsibility

The Board of Directors has overarching responsibility for the Group's organization and management, and ensuring that the guidelines for the management of the company's funds are appropriately formulated. The Board of Directors is responsible for ensuring that Vitec is managed pursuant to applicable laws and regulations, and adheres to the Rule Book for Issuers and the Swedish Corporate Governance Code, and the Group's adopted internal regulations. The Board is also responsible for developing and ensuring compliance with the Group's strategies through plans and goals, decisions regarding acquisitions and divestments of business opera- tions, major investments, appointments and remuneration of Group manage- ment, and the continuous monitoring of operations throughout the year. The

Board of Directors adopts the annual accounts, current business plan, business-related policies and the CEO's Rules of Procedure.

The Board of Directors is also to adopt the requisite guidelines for the compa- ny's behavior in society, with the aim of ensuring long-term value creation and that guidelines are adhered to with respect to the company's behavior.

Board composition

According to the articles of association, Vitec's Board is to comprise three to ten members, and a maximum of three deputy members. In 2023, the Board of Directors consisted of six regular members with no deputies, and no member is employed by the company.

Board members are elected by shareholders at the AGM, with a one-year term of office. The CEO is not a member of the Board, but presents reports at all Board meetings, except for when the CEO's work is under evaluation. The CEO reports to the Board about the Group's operational activities and ensures that the Board receives objective and relevant decision data.

Board meetings comply with the requirements of Nasdaq Stockholm and the Swedish Corporate Governance

Code with respect to independent Board members. Further information about each Board member is available at our website, vitecsoftware.com, under About Vitec, Corporate Governance.

▼

The Board held the 2023 in-depth meeting in Amsterdam.

Vitec Annual Report 2023 99

GROUP OPERATIONS	SHARES AND SHAREHOLDERS	ADMINISTRATION REPORT	SUSTAINABILITY REPORT	CORPORATE GOVERNANCE REPORT	FINANCIAL INFORMATION

Comments from the Chairman of the Board	Corporate governance		Board of Directors	Management	Multi-year overview	Appropriation of profits

Chairman of the Board

The Chairman of the Board, Lars Sten- lund, manages Board work to ensure compliance with laws and regulations. The Chairman monitors operations through a dialogue with the CEO, and is responsible for ensuring that other Board members receive the requisite information for high-quality discussions and well-informed decisions. The Chairman also participates in the assessment and career development issues of the Group's senior executives.

The Board's work

In the course of a financial year, Vitec holds a minimum of five regular Board meetings and a statutory Board meeting directly connected to the AGM. Extraordinary Board meetings are held as needed. A longer in-depth meeting is held jointly with the Board of Directors every year. In 2023, a total of 17 Board

interim reports and annual accounts were approved for publication. Issues pertaining to the future were ad- dressed, such as market assessments, potential acquisitions, financing, the focus of business activities and organizational issues. All of the meetings adhered to an approved agenda that was, together with documentation for each item on the agenda, communicated to all Board members about one week prior to the meeting.

Minutes of the meetings were sent to all Board members, in accordance with the Swedish Corporate Governance Code.

At year-end, the Board's work was evaluated.

Evaluation

The Board's work is evaluated once a year, by having Board members answer a number of predefined questions

ANNUAL CYCLE OF BOARD WORK

meetings were held, including statutory meetings and per capsulam meetings.

In early 2023, it was with great sadness that we announced the passing of Board member Crister Stjernfelt. Crister was not replaced during the period until the AGM on April 25. All Board members elected by the AGM were present at all of the Board meetings, with the exception of Anna Valtonen and Birgitta Johansson-Hedberg, who both notified the Board that they would be absent from one meeting each. At minuted meetings, the Group's earnings and financial position were processed, and

about both formal and collaborative relationships. The Chairman compiles the answers, including comments, and presents them to the Nomination Committee. The evaluation for the 2023 financial year indicates well-functioning collaborations and solid efficiency within Board work.

►

Board meeting
Interim report Q3
Audit committee
Budget
Evaluation of the board

►

Board meeting
Interim report Q2
In-depthmeeting
Strategic plan
Financial goals
Sustainability goals

Q	4	Nov	Dec	Jan



	Okt
	Sep
Q	Aug

	3		Jul	Jun

Q 1

Feb ,

Mar

Apr

Maj

2 Q

◀

Board meeting
Year-endreport
Risk assessment
Audit committee
Documents for the AGM

◀

Board meeting
Interim report Q1
Audit committee
AGM and statutory board meeting
Instruction for the CEO
Company signatories appointed

Vitec Annual Report 2023 100

GROUP OPERATIONS	SHARES AND SHAREHOLDERS	ADMINISTRATION REPORT	SUSTAINABILITY REPORT	CORPORATE GOVERNANCE REPORT	FINANCIAL INFORMATION

Comments from the Chairman of the Board	Corporate governance		Board of Directors	Management	Multi-year overview	Appropriation of profits

Key decisions

In late 2023, the existing loan facility with Nordea and SEB was increased by SEK 500 million to SEK 3,000 mil- lion. The acquisitions of Entry Event, Neagen and Codea were partially fi- nanced via convertible issues total- ing SEK 37 million.
The Board of Directors proposed to the Annual General Meeting to re- solve on a share savings plan for employees. The AGM resolved in ac- cordance with the proposal.
Based on the authorization grant- ed to the Board of Directors by the Annual General Meeting on April 25, 2023 on the acquisition of class B treasury shares from the market to ensure delivery of shares to share savings plan participants, the Board of Directors resolved on the acquisi- tion of treasury shares.
Establishment of our vision: Shaping a wiser and more sustainable future

In 2023, the following six corporate acquisitions were completed:

Software company Enova special- izes in developing, delivering and maintaining energy management software for large companies in the Netherlands, as well as provid- ing grid balancing services. Enova's sales averaged EUR 28 million in the 2021 and 2022 financial years.
DL Systems AB develops and de- livers a complete booking system for facilities in the hospitality sec- tor. The company had sales of SEK

8 million during the financial year 2021/2022.

Entry Event develops and delivers a complete business system for the hospitality sector. The company had sales of SEK 14 million during the fi- nancial year 2021/2022.
Neagen develops and delivers med- ical imaging archiving and viewing solutions. The company reported sales of about EUR 5 million in the 2022 financial year.
Memorix develops and delivers soft- ware for managing archives, digital heritage and collections. The com- pany reported sales of EUR 4 million in the 2022 financial year.
Codea develops and delivers criti- cal software for field management of emergency vehicles. The company reported sales of about EUR 1.4 mil- lion in the 2022 financial year.

The Board's Rules of Procedure The Board's Rules of Procedure were adopted on April 26, 2023, and are to be revised annually at the statutory Board meeting, or revised as needed. The Rules of Procedure specify, among other items, the Board of Directors' responsibilities and assignments, the Chairman's assignments and auditing is- sues, and also indicates specific reports and financial information that the Board of Directors should receive in advance of each regular Board meeting. In addi- tion, the Rules of Procedure comprise instructions to the CEO. The Rules

of Procedure also define the Board's

work in its capacity as Remuneration Committee.

AUDIT COMMITTEE AND REMUNERATION COMMITTEE

The Board of Directors, as a whole, acts as both the Audit Committee and Remuneration Committee. The description of the Audit Commit- tee's assignments is attached as an appendix to the current Rules of Procedure. The Remuneration Committee's work is regulated

in the relevant rules of proce- dure. The Rules of Procedure and attachments were adopted at the statutory Board meeting held on April 26, 2023. In 2023, the Audit Committee held three meetings and the Remuneration Committee held meetings in conjunction with regular Board meetings.

In fall 2023, the Audit Committee began a process for procurement of external auditing. This process culminated in a proposal that will be presented at the Annual General Meeting and put to a vote.

▶

DL Systems was acquired in 2023. They provide software for the hospitality sector in Sweden.

Vitec Annual Report 2023 101

GROUP OPERATIONS	SHARES AND SHAREHOLDERS	ADMINISTRATION REPORT	SUSTAINABILITY REPORT	CORPORATE GOVERNANCE REPORT	FINANCIAL INFORMATION

Comments from the Chairman of the Board	Corporate governance		Board of Directors	Management	Multi-year overview	Appropriation of profits

Board of Directors

Lars Stenlund

Founder of the company, together

with Olov Sandberg, in 1985. Employed 1985-2021. CEO 1990-2021.

Board member 1985-2009. Chairman of the Board since 2021. Born in 1958. PhD in applied physics from Umeå University, 1987.

Board member of Umeå University Holding AB, Chairman of Treac AB. Former assistant professor at Umeå University.

Holdings in Vitec: 1,170,000 class A shares, 186,911 class B shares. No warrants.

Dependent in relation to the Company. Is the Company's largest shareholder in terms of votes.

Jan Friedman

Board member since 2010. Born in 1952. MBA from the Stockholm School of Economics in 1978.

Chairman of the Board of Stiftelsen Anna Whitlocks Minnesfond, board member of Agora Networks Oy. Experience from various CEO, board and consultancy assignments.

Holdings in Vitec: 15,440 class B shares through company and privately, no convertibles.