37 External risks The AAK Group is exposed to the fierce competition which characterizes the industry related to fluctuations in raw material prices which affect capital tied up. Operational risk The raw materials used in operations are agricultural products, and availability may therefore vary due to climatic and other external factors. Financial risk The Group’s management of financial risks is described in Note 3, Financial Risk Management. Corporate Governance Report For information on the composition and work, etc., of the Board of Directors, see the Corporate Governance Report on page 77. Parent The Company is the holding company of the AAK Group, and its activities consist mainly of joint Group functions connected to the development and management of the Group. The Parent employs personnel with skills and competencies to execute treasury activities, accounting, information, human resources and IT. The Parent is also responsible for Group strategy and risk management, and provides legal and tax-related services to Group companies. The costs of Group Functions have increased, primarily on account of research and development initiatives. This innovation initiative is an important part of AAKtion. The Parent’s invoicing in 2015 amounted to SEK 80 million (74). The profit after financial items amounted to SEK 1 million (-4). Interest-bearing liabilities minus cash and cash equivalents and interest-bearing assets were SEK -1,007 million (-803). Investments in intangible non-current assets and property, plant and equipment amounted to SEK 4 million (1). The Parent had a total of 29 (26) employees on December 31, 2015. No significant events have occurred after the end of the reporting period. Background to and explanation of the proposed dividend The Board of Directors has proposed that the 2016 Annual General Meeting approve an appropriation of profits under which the shareholders will receive a dividend of SEK 7.75 per share. The proposed dividend therefore totals SEK 328 million. The objective is for the dividend in the long term to correspond to 30 to 50 percent of consolidated profits after tax, while always considering AAK’s long-term financing requirements. The Parent has no financial instruments valued under Chap. 4, Section 14 a, of the Swedish Annual Accounts Act (1995:1554). The Board of Directors hereby makes the following statement regarding the proposed dividend, in accordance with Chap. 18, Section 4, of the Swedish Companies Act (2005:551). Retained profits from the previous year total SEK 4,060 million and the profit for the 2015 financial year is SEK 0 million (SEK 945 million for the Group). Provided that the 2016 Annual General Meeting approves the Board’s proposed appropriation of profits, a total of SEK 3,834 million will be carried forward. The Company’s restricted equity will be fully covered after distribution of the dividend. In the Board’s judgement, the Company and the Group will retain sufficient equity after distribution of the proposed dividend in relation to the nature, scope and risks associated with its business operations. In making this assessment, the Board has taken account of the historical development of the Company and the Group, budgeted performance and the economic situation. Articles of Association The Articles of Association stipulate that Board members shall be appointed by the Annual General Meeting of AAK. The Articles of Association contain no provisions regarding dismissal of Board members or regarding amendment of the Articles of Association. Important agreements affected by change in control resulting from official take-over bid The Group’s long-term financing agreement contains stipulations that, in certain cases, give the lender the right to request advance payment if control of AAK changes substantially. Such a substantial change in control can occur as a result of an official take-over bid. AAK’s assessment is that it has been necessary to accept these stipulations in order to obtain financing on terms which are otherwise acceptable. Guidelines for remuneration of senior executives Guidelines for the remuneration of the CEO and other senior executives were adopted by the 2015 Annual General Meeting. No deviations from these guidelines have been made. The Board of Directors of AAK proposes that the 2016 Annual General Meeting resolve that the same guidelines for remuneration of senior executives be applied in 2016 as in 2015. The present guidelines are contained in Note 8, Remuneration of the Board of Directors and Senior Executives. These guidelines will cover those persons who are in Group management positions during the period of time in which the guidelines apply. The guidelines apply to agreements entered into after a resolution by the Annual General Meeting, and in the event that changes are made to existing agreements after this point in time. The Board will be entitled to diverge from the guidelines if there are particular reasons to do so in an individual case. Product development The Group’s product development operations are described in further detail on pages 12–19. Environment The environmental impact from our plants includes emissions of odorous substances, solvents, smoke and gases into the atmosphere, as well as discharging fats, oxygen-consuming material, and nutrients into the water, and also creating organic waste and noise. We continually review our impact on all levels to further improve environmental performance at AAK. We operate all our plants with appropriate official permits in all countries in which we operate. In Sweden, the operations in Karlshamn are licensable under Swedish law. Employees The recruitment of skilled and competent personnel is an important component in maintaining competitiveness for the AAK Group. The Group therefore has continuous active programmes for personnel development. Risk management and sensitivity analysis All business operations involve risk – a controlled approach to risktaking is a prerequisite for maintaining good profitability. Risks may depend on events in the operating environment and may affect a certain sector or market. A risk may also be purely companyspecific or country-specific. At AAK, effective risk management is a continual process which is conducted within the framework of operational management and forms a natural part of the day-to-day monitoring of operations. For more detailed information, please refer to the section on Risks on page 22 and to Note 3, Financial Risk Management.
AAK Annual Report 2015
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