Governance

Rana Gruber seeks to maintain high standards for corporate governance and believes that good corporate governance is an important prerequisite for value creation.

The company’s shares were admitted for trading on Euronext Growth Oslo in February 2021 and uplisted to the main list at the Oslo Stock Exchange in March 2022. The company is therefore subject to the Norwegian Code of Practice for Corporate Governance (“the code”), the recommendations of which the company aims to fulfill.

The board of directors (“the board”) of Rana Gruber has prepared and approved of a corporate governance policy. The policy describes the company’s main principles for corporate governance and establishes a framework of guidelines and principles that regulate the relationship between the company’s shareholders, the board, the CEO, and the other management positions of the company.

Corporate governance at Rana Gruber shall be based on the following main principles:

  • Rana Gruber shall at all times comply with all laws and regulations that apply to the company.
  • The board shall ensure that the company has appropriate corporate governance.
  • The company shall at all times seek to comply with the recommendations in the Norwegian Code of Practice for Corporate Governance. If, in the opinion of the board, there are special considerations which indicate that the company should deviate from any of these recommendations, this must be justified separately. In each annual report, the board will give an account of the company’s corporate governance.
  • The company’s operations must be conducted in accordance with high ethical standards. The company shall take an active social responsibility.
  • The company must create value for shareholders in a sustainable way. In its work, the board shall take into account economic, social, and environmental conditions.
  • The board shall ensure that the company has clear goals and strategies for its operations.
  • The company should have equity that is adapted to the company’s goals, strategy, and risk profile.
  • The board shall ensure that the company has a clear and predictable dividend policy.
  • The company shall avoid any unreasonable discrimination of shareholders.
  • The company’s transactions with related parties shall be based on normal business terms and arm’s length principles.
  • The company’s shares must be freely tradeable.
  • The board of directors should facilitate the participation of as many shareholders as possible at the company’s general meeting, so that shareholders can exercise their rights.
  • The board shall ensure that the company has good internal control and appropriate systems for risk management in relation to the scope and nature of the company’s activities.

Rana Gruber’s principles are consistent with the recommendations. A report (as of 31.12.2021) on Rana Gruber’s compliance with the code’s recommendations follows herein.

1. IMPLEMENTATION AND REPORTING ON CORPORATE GOVERNANCE

Rana Gruber’s corporate governance principles are determined by the board, which has the overall responsibility for ensuring that the company has a high standard of corporate governance. The board has prepared a corporate governance policy document addressing the framework of guidelines and principles which regulate the interaction between the shareholders, the board, and the chief executive officer (the CEO).

The corporate governance policy can be changed by the board and will be reviewed by the board on an annual basis.

Deviations from the Code: None

2. BUSINESS

Rana Gruber is a Norwegian iron ore producer and supplier established in 1964, with operations based on more than 200 years of mining experience. The business purpose is set out in the company’s articles of association and reads as follows:

“The company’s objective is to conduct production and sales of mining products and related activities, and through economically sound business operations create lasting and safe jobs in the company. The company shall seek to develop new products and businesses, and the company may participate in other companies as owner or otherwise to fulfil the above objectives.”

It follows from the company’s corporate governance principles that the company must create value for shareholders in a sustainable way, for which purpose the board has defined clear objectives, strategies, and risk profiles related to the company’s business activities. In its work, the board shall consider economic, social, and environmental conditions.

The board of directors evaluates these objectives, strategies, and risk profiles on a yearly basis.

Deviations from the Code: None

3. EQUITY AND DIVIDENDS

The board is committed to maintain a satisfactory capital structure for the company to support its goals, strategy and risk profile, thereby ensuring that there is an appropriate balance between equity and other sources of financing. The board will continuously assess the capital requirements related to the company’s strategy and risk profile.

Equity

At 31 December 2022, the company’s equity totalled NOK 823.1 million, which corresponds to an equity ratio of 57.0 per cent. The board considers Rana Gruber’s financial position to be solid with the necessary capacity to support its objectives, strategy, and risk profile.

Dividends

According to the company’s dividend policy, the adjusted net profit shall constitute the IFRS based net profit after tax, adjusted for unrealised gains and losses from the portfolio of hedging positions related to iron ore and currency. The relevant hedging positions are those related to shipments initiated in the quarter of reporting for which the final price is concluded in the subsequent quarter. From the fourth quarter of 2022, unrealised positions of electric power is included in the net financial income and adjusted for in the adjusted net profit.

The board has the flexibility to utilise approximately 30 per cent of the estimated dividend payments to repurchase Rana Gruber shares for subsequent redemption and reduce the dividend payments correspondingly. Any buyback program to achieve the same purpose for future quarters will be announced separately.

When deciding whether to propose a dividend and when determining the dividend amount, the board of directors will take into account legal restrictions as well as capital expenditure plans related to announced strategic projects, financing requirements, and the volatile nature of the market in which the company operates.

During the financial year 2022, the company’s board of directors has resolved to distribute total dividends of NOK 6.16 per share, equal to NOK 228.8 million. In addition the company puchased NOK 14.2 million in treasury shares.

Board mandates

At the annual general shareholder meeting in 2022, the board was granted the following mandates:

“The board of directors is authorised pursuant to the Public Limited Companies Act section 8-2 (2) to approve the distribution of dividends based on the company annual accounts for 2021. The authorisation shall remain in force until the annual general meeting in 2023. The authorisation is not valid until it is registered with the Norwegian Register of Business Enterprises.”

“The board of directors is authorised pursuant to the Public Limited Liability Companies Act section 9-4 to acquire shares in the company (“own shares”) on behalf of the company with an aggregate nominal value of up to NOK 934 800 (corresponding to 10 per cent of the company’s share capital). The authority also encompasses contractual pledges over own shares. When acquiring own shares, the consideration per share may not be less than NOK 1 and may not exceed NOK 400. The board of directors determines the methods by which own shares can be acquired or disposed of. The authority shall remain in force until the annual general meeting in 2023, but in no event later than 30 June 2023. With effect from the time of registration of this authority with the Norwegian Register of Business Enterprises the previous authority to acquire own shares is withdrawn.”

Both mandates are valid until the annual general meeting in 2023.

In the event that a board mandate is proposed, the mandate should be limited to a specific purpose and treated as a separate issue, subject to vote by the shareholders at the general meeting. Board authorisations are valid for the period of time determined at the shareholders’ meeting. The board’s authorisations to increase the share capital or buy Rana Gruber shares will normally only be given for an interval lasting no longer than until the next annual general meeting after the authorisation is given.

Deviations from the Code: None

4. EQUAL TREATMENT OF SHAREHOLDERS

Rana Gruber has a single class of shares, and all shares carry the same voting and dividend rights. It follows from the company’s guidelines for investor relations that all communication with shareholders shall be based on equal treatment.

Any decision to waive the pre-emption rights of existing shareholders to subscribe for shares in the event of an increase in share capital shall be justified. In the event that the board of directors resolves to carry out an increase in share capital and waive the pre-emption rights of existing shareholders on the basis of a mandate granted to the board, the justification of the increase will be publicly disclosed in a stock exchange announcement.

Deviations from the Code: None

5. SHARES AND NEGOTIABILITY

Rana Gruber’s shares are freely tradeable and there are no restrictions on the ability to own, trade or vote for the shares.

Deviations from the Code: None

6. ANNUAL SHAREHOLDERS’ GENERAL MEETING

Notice calling the annual general meeting

Rana Gruber’s highest decision-making body is the general meeting of shareholders. All shareholders have the right to participate in the general meetings of the company. It follows from Rana Gruber’s corporate governance principles that the board of directors shall facilitate the participation of as many shareholders as possible at the general meeting, so that they can exercise their rights. . The general meeting for 2023 took place 12 April 2023

The full notice for general shareholder meetings shall be sent to the shareholders no later than 21 days prior to the meeting. The board will ensure that the notice includes information about resolutions and that supporting information is sufficiently detailed to allow shareholders to form a view on all matters to be considered at the meeting. Shareholders will be able to vote on each individual proposition, including on each individual candidate nominated for election.

Shareholders who wish to participate in a general shareholder meeting, shall notify the company of this within a deadline which is set out in the notice of the general meeting, and which cannot be set earlier than five days prior to the meeting. The cut-off for confirmation of attendance shall be set as short as practically possible.

Shareholders may also send notification of their attendance, using the form provided, by post or email to the company’s account manager DNB, or via the company’s website, www.ranagruber.no.

In accordance with article 7 of the company’s articles of association, documents relating to matters to be addressed at a general meeting of shareholders may be made available on Rana Gruber’s website. The same applies to documents which by law must be included in or attached to the invitation to attend the general meeting. If the documents are made available in this way, the statutory requirement with respect to distribution to shareholders is not applicable. A shareholder may ask to be sent documents relating to matters to be discussed at the general meeting. The company cannot demand any form of compensation for sending the documents to the shareholders.

Meeting chair and voting

The board, the chair of the nomination committee, and the company’s auditor are expected to attend the general meetings. The general meeting elects a person to chair the meeting. The board of directors shall ensure that the general meeting is able to elect an independent chair.

Shareholders who are unable to attend a general meeting may cast an advance vote on matters to be considered at general meetings of the company. Such votes can also be cast by electronic communication. The right to vote in advance is conditional on the existence of a reassuring method for authenticating the sender. The board decides whether such a method is appropriate prior to the individual general meeting and may lay down more detailed guidelines for written advance votes. It shall be stated in the notice of the general meeting whether access to advance voting has been granted and what guidelines may be laid down for such voting.

Shareholders unable to attend may also vote by proxy and the company will nominate a person who can act as a proxy for shareholders. The procedures for electronic voting and proxy voting instructions are described in the meeting notification and published on the company website. The form provided by the company for shareholders to appoint a proxy should be drawn up so that separate voting instructions can be given for each matter to be considered by the meeting and each of the candidates nominated for election.

Minutes of the general meeting will be published as soon as possible via the Oslo Stock Exchange’s messaging service www.newsweb.no (ticker: RANA) and on the company’s website www.ranagruber.no.

Deviations from the Code: None

7. NOMINATION COMMITTEE

Rana Gruber has appointed a nomination committee as required by article 8 of the company’s articles of association. At 31 December 2022, the nomination committee consisted of the following members:

  • Leif Teksum, chair, elected in March 2021 for two years
  • Lisbeth Flågeng, member, elected in March 2021 for two years
  • Robert Sotberg, member, elected in December 2021 until March 2023

Guidelines for the nomination committee have been approved by the general meeting. The primary tasks of the nomination committee are to recommend and propose to the general meeting candidates and remuneration for the company’s directors and nomination committee, and remuneration to the members of the board committees. The recommendation will include a proposal for appointment of chair and deputy chair to be elected by the general meeting. The members of the nomination committee’s fees shall be determined by the general meeting.

According to the articles of association, the nomination committee shall consist of three members, including the chair, and the nomination committee members shall be shareholders or representatives of shareholders. The members of the nomination committee, including its chair, have been elected by the general meeting. The members of the nomination committee’s period of service shall be two years unless the general meeting decides otherwise.

The nomination committee shall be composed so that the interests of the shareholder community are taken into account, and the members shall be independent of the company’s board and executive management team.

In its work of proposing candidates, the nomination committee shall contact, among others, the largest shareholders, board members and the day-to-day management. A justification for proposing a candidate will be provided for each candidate separately.

The nomination committee’s recommendation to the general meeting regarding the election of shareholder-elected board members, members of the nomination committee and fees should be available early enough to be sent to the shareholders together with the notice of the relevant general meeting.

Information regarding the composition of the nomination committee, which members are up for election, and how input and proposals may be submitted to the committee is posted on Rana Gruber’s website under “Investors”.

Deviations from the Code: None

8. BOARD OF DIRECTORS: COMPOSITION AND INDEPENDENCE

Composition

According to article 5 of Rana Gruber’s articles of associations, the board shall consist of a minimum of three and a maximum of eight directors. Directors are elected by the general meeting for a period of two years. The general meeting elects the chair of the board and the deputy chair of the board.

In appointing members to the board, it is emphasised that the proposed candidates shall have the necessary experience, competence, and capacity to hold in a satisfactory and independent manner, and that there is an appropriate replacement for each individual holding a position. The board should be composed so that it can safeguard the interests of the shareholder community and the company’s need for competence and diversity. It should be taken into account that the board aims to function as a collegial body.

At 31 December 2022, Rana Gruber’s board consisted of eight directors, five of which were elected at the company’s general meeting at 18 March 2021 for a period of two years. Three directors were elected by and among the employees in November 2022 for a two-year period. The current composition of the board is presented on page 32-33 of the annual report, including an overview of each
individual board director’s independence, competence, and attendance at board meetings.

Directors are encouraged to own shares in the company. At 31 December 2022, seven of the directors held shares in Rana Gruber

Independence of the board

Rana Gruber’s board is composed such that it is able to act independently of any special interests. All members of the board of directors are independent from the company’s executive management. Being the chief executive officer of Leonhard Nilsen & Sønner – Eiendom AS, Frode Nilsen is not independent from the company’s largest shareholder, Leonhard Nilsen & Sønner – Eiendom AS, which is also a material business partner to the company.

Deviations from the Code: None

9. THE WORK OF THE BOARD OF DIRECTORS

The board has adopted instructions to lay down rules for the work and management of the board, as well as the CEO’s work in relation to the board.

The board shall ensure proper organisation of the company’s activities and supervise the company’s day-to-day management. The board shall determine the necessary plans and budgets for the company’s activities.

The board’s primary responsibility shall be (i) participating in the development and approval of the company’s strategy, (ii) performing necessary monitoring functions, and (iii) acting as an advisory body for the executive management team. The board is also responsible for ensuring that the operations of the company are compliant with the company’s values and ethical guidelines. The chair of the board is responsible for ensuring that the board’s work is performed in an effective, efficient, and correct manner.

All directors of the board shall receive information about the company’s operational and financial development regularly. The company’s strategies shall also be subject to review and evaluation by the board at a regular basis. It follows from the company’s corporate governance principles that transactions with related parties shall be based on normal business terms and the arm’s length principle. A presentation of transactions and balances with related parties is included in the notes to the financial statements, on page 156 in the annual report.

According to the instructions for the board and CEO, a board director with prominent personal or financial interests in a particular matter (or with relation to a person with such interests, as defined in the Public Limited Liability Companies Act, section 1-5) shall not participate in the consideration of or decision related to that matter. Board directors must also not participate in any action
the board might take concerning a loan or other credit to themselves or actions concerning a guarantee for their own debt.

A board director shall inform the board if he or she, directly or indirectly, has a significant interest in an agreement entered into by the company.

Additional information on transactions with related parties can be found in note 27.2 to the 2022 financial statements.

The board evaluates its own performance and expertise once a year.

Sub-committees of the board

Audit committee

Pursuant to the Norwegian Public Limited Liability Companies Act and the listing rules of the Oslo Stock Exchange, the company shall have an audit committee. The audit committee is appointed by the board.

The committee’s main tasks are to prepare the board’s follow-up of the financial reporting process, monitor the performance of the company’s internal control and risk management systems, and maintain an ongoing dialogue with the elected auditor.

At 31 December 2022, the audit committee comprised the following:

  • Hilde Rolandsen, chair
  • Morten Støver, member

The board has decided not to appoint a remuneration committee.

Deviations from the Code: None

10. RISK MANAGEMENT AND INTERNAL CONTROL

The board shall ensure that Rana Gruber has a sound internal control, and systems for risk management that are appropriate in relation to the extent and nature of the company’s activities. The internal control and the systems for risk management shall also encompass the company’s corporate values and ethical guidelines.

The objective of the risk management and internal control is to manage exposure to risks in order to ensure the successful conduct of the company’s business, and to support the quality of financial reporting and compliance with relevant laws and regulations.

The board shall carry out an annual review of the company’s most important areas of exposure to risk and its internal control arrangements.

The board shall provide an account in the annual report of the main features of the company’s internal control and risk management systems as they relate to the company’s financial reporting.

Internal control of financial reporting is achieved through day-to-day follow-up by the management, and supervision by the audit committee.

Deviations from the Code: None

11. REMUNERATION OF THE BOARD OF DIRECTORS

Remuneration of directors shall be reasonable and reflect the board’s responsibilities, expertise, time invested, and the complexity of the business. The remuneration to the directors is not performance-related and does not include share option elements.

The annual general meeting shall determine the board’s remuneration after considering recommendations by the company’s nomination committee.

The company will establish guidelines for remuneration of the board of directors and executive management for approval at the ordinary general meeting in 2023. Additional information on remuneration paid to directors for 2022 is presented in note 27.1 to the financial statements, pursuant to the Accounting Act section 7-31b and in the annual remuneration report, which will be presented to the shareholders in accordance with the Norwegian Public Limited Liabilities Companies Act section 6-16b.

None of the board directors or companies with which they are associated have assignments for the company other than their appointment as a director of the board.

The board shall be informed if individual directors perform tasks for the company or any company entities other than exercising their role as directors. Fees for any such services shall be approved by the board. Work in sub-committees may be compensated in addition to the remuneration received for board directorship

Deviations from the Code: None

12. REMUNERATION FOR EXECUTIVE PERSONNEL

Following the transfer from Euronext Growth Oslo to the main list at the Oslo Stock Exchange on 28 March 2022, and pursuant to the Norwegian Public Limited Liabilities Companies Act, section 6-16a, the company is required to establish guidelines for the remuneration of the executive management. The guidelines will be presented to the shareholders for approval at the ordinary general
meeting in 2023 in the form of a separate document. Further information about remuneration to executive personnel is provided under note 27.1 to the financial statements pursuant to the Accounting Act, section 7-31b, and in the annual remuneration report, which will be presented to the shareholders in accordance with the Norwegian Public Limited Liabilities Companies Act, section 6-16

Deviations from the Code: None

13. INFORMATION AND COMMUNICATIONS

Investor relations

Rana Gruber has established guidelines for the company’s reporting of financial and other information based on the ideal of transparency and equal treatment of all participants in the securities market. The purpose of these guidelines is to ensure simultaneous access to accurate, relevant and up-to-date information about Rana Gruber. In addition, the guidelines shall contribute to investor relations being exercised in accordance with applicable laws, rules, and recommendations.

These guidelines also include principles for the company’s contact with shareholders other than through general meetings.

The company’s ambition is to comply with the Oslo Stock Exchange’s Code of Practice for IR.

Financial information

The company holds open investor presentations in connection with the company’s quarterly reports. Presentations prepared for investors in connection with the quarterly reports are made publicly available together with the reports. Important events that affect the company will be reported immediately. The company publishes an annual financial calendar with an overview of dates for financial reporting and other important events.

Quiet period

In the 30 days period prior to the publication of results, Rana Gruber will minimise meetings and contact with investors, analysts, media, or other parties as relating to the company’s results and future outlook. This is to ensure that all interested parties in the market are treated equally.

Deviations from the Code: None

14. TAKEOVERS

The board has established guidelines on how to act in the event of a take-over bid.

It follows from these guidelines, that if an offer is made for the purchase of shares in Rana Gruber, the board shall comply with the general principle of equal treatment of all shareholders, and, as far as possible, ensure that the company’s activities are not unnecessarily interrupted. The board will do its best to ensure that shareholders receive the necessary information and time to assess the offer.

The board of directors shall not seek to prevent an offer to purchase shares unless it believes such an action can be defended with regard to the company’s or shareholders’ interests. The board will not exercise any authority or make any decisions aimed at counteracting such offers, unless this has been approved by the company’s general shareholder meeting after the offer has been made public.

If an offer is made for the purchase of shares in the company, the board shall give a statement in accordance with statutory requirements and the Norwegian Code of Practice for Corporate Governance.

If an offer is made for the purchase of shares in the company, the board shall obtain a valuation from an independent expert. If an offer is made by a major shareholder, a member of the board or the day-to-day management, or related parties or related parties thereof, or others who have recently held such a position, who are either buyers or a person with a special interest in the takeover bid, the board shall obtain an independent valuation.

Any transaction that is in effect a disposal of the company’s activities shall be submitted for approval by the general meeting.

Deviations from the Code: None

15. AUDITOR

The auditor makes an annual presentation of the auditing plan to the audit committee. Further, the auditor provides the board with a written confirmation that the requirement of independence has been met.

The auditor participates in all meetings of the audit committee and in the board meeting that deals with the annual report. The auditor reports to the audit committee and board on his assessment of the internal control on the financial reporting process.

At these meetings, the auditor reports on any material changes in the company’s accounting principles and assessments of material accounting estimates and key aspects of the audit, and comments on any material estimated accounting figures. There have been no disagreements between the auditor and management on any material matters.

Once a year, the board of directors reviews the company’s internal control procedures with the auditor, including weaknesses identified by the auditor and proposals for improvement.

The board and the audit committee have met with the auditor without representatives of executive management being present regarding the preparation of the annual report for 2022.

The board of directors has established guidelines in respect of the use of the auditor by the company’s executive management for services other than the statutory financial statement audit.

At the annual general meeting, the board shall present a review of the auditor’s compensation required by law for auditory work and remuneration associated with other specific assignments. Compensation paid is presented in note 6 to the financial statements. The board shall facilitate the attendance of the auditor at all general meetings.

Deviations from the Code: None

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