Corporate governance

The Supervisory Board of Migatronic discussed the recommendations put forward in the Nørby-udvalg's (a committee appointed by the Copenhagen Stock Exchange dealing with best practice for board work) report on proper corporate governance from 2001.

The Supervisory Board is already in line with many of the overall principles of the above-mentioned report and would like to highlight a few main items:

The report recommends that the Supervisory Board should assess the appropriateness of any amendments to the Articles of Association with regard to, among other things, equal distribution of voting rights between A shares and B shares, and should state in the annual report whether such an amendment is appropriate and feasible.

The share capital of Migatronic is divided into A shares and B shares, which the Supervisory Board currently considers desirable in order to ensure continuous and stable corporate growth. However, the Supervisory Board is of the opinion that only one class of shares may be favourable in the event that new capital is required. As a consequence, the Supervisory Board will assess the suitability of the mentioned distribution between A shares and B shares on an ongoing basis.

The Nørby-udvalg recommends that a maximum of six directors should be appointed at the Annual General Meeting and that a majority thereof should be non-executive directors. In addition, the Nørby-udvalg recommends that the chairman and the other directors should not be appointed or reappointed for a total period of more than nine years.

Migatronic is in line with the recommendation with regard to the number of directors appointed by the Annual General Meeting. Three out of four of Migatronic's directors appointed by the Annual General Meeting are non-executive directors. The fourth director is the company's CEO and majority shareholder. The board mix is motivated by the fact that the CEO possesses extensive and important professional competence and knowledge and by the notion that he automatically should be a director in his capacity as majority shareholder.

The directors appointed by the Annual General Meeting are appointed for one year and the two directors elected by the employees for four years. There is no limitation in terms of time for how long a director can sit on the board and there is no age limit for the directors. Overall, the appointment of Migatronic's directors is solely based on an actual assessment of the individual directors' and candidates' qualifications and competencies.

Migatronic has not appointed any board committee. Additionally, the resolutions and actions of the Supervisory Board and the CEO as well as their mutual co-operation are not subject to any systematic assessment.

Directors' emoluments and executive remuneration are disclosed in note 2. The Supervisory Board and the CEO have not received any share options or warrants. The shareholdings of the Supervisory Board and the CEO are stated in the section "Shareholder information".

Migatronic has currently chosen not to publish quarterly reports. The Supervisory Board is of the opinion that a period-to-period comparison of the group quarterly results will not ensure a better understanding of group activities or give a more adequate picture of the Group's assets and liabilities, financial position as well as results.

The Supervisory Board will continuously include any other recommendations in the report in its future considerations regarding proper corporate governance in order to safeguard the company's and its stakeholders' interests optimally.