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REC Annual Report 2011
26
The Board of Directors’ report on corporate governance
Renewable Energy Corporation ASA (“REC” or the “Company”, including
its subsidiaries worldwide, sometimes also referred to as “REC Group”)
endorses the Norwegian Code of Practice for Corporate Governance
(Code of Practice) issued by the Norwegian Corporate Governance
Board, most recently revised on 20, October 2011. The latest
amendments to the Code of Practice are also incorporated into the
reporting requirements of the Accounting Act. The Code of Practice and
the Accounting Act are available at www.nues.no and at www.lovdata.no
respectively. The Board has adopted the following report that explains
how RECmeets the requirements of the Code of Practice and the
Accounting Act and explains possible deviations for 2011:
1.IMPLEMENTATION AND REPORTING ON CORPORATE GOVERNANCE
REC’s objective is long-term value creation for its shareholders.
REC believes sound business must be based on value-based
management and clear guidelines on ethics and sustainability. REC’s
mission is Smart Energy for a Cleaner Future.
To enable us to carry out the mission, the Board has adopted a common
set of core values:
RESPONSIBILITY
ENTHUSIASM
COMMITMENT
INNOVATION
DRIVE
The core values are part of the Company’s Corporate Governance
Principles and have been introduced to all employees, and the Company
has implemented various programs in order to maintain focus on and live
these values.
The Company’s ethical values and corporate social responsibility are also
described in the Code of Conduct and certain other group policies on
sustainability. The Code of Conduct includes requirements for
compliance with laws, ethical behavior and professional integrity for all
employees and board members of the Company and its subsidiaries. In
addition, REC has adopted the following group policies:
• Business Conduct Policy
• Safety and Health Policy
• Quality and Improvement Policy
• Environment and Climate Policy
The Corporate Governance Principles, the Code of Conduct and the
Group Policies have been adopted by the Board and will be reviewed on
an annual basis. All documents are available to the public on the
Company’s website.
2. BUSINESS
Thepurpose of theCompany is described in theArticles of Association§3:
“The Company’s purpose is development and sale of products and
services related to renewable energy sources, and to perform other
financial operations related to such. The Company may, through
subscription of shares or in any other ways, including granting of loans,
acquire interests in other companies with identical or similar purposes”.
REC believes the solar industry plays a key role as a long-term supplier
of sustainable energy and its business is focused on developing
competitive solar energy solutions. REC‘s strategic ambition is built on
an integrated value chain, reaching from silane and polysilicon
production through wafer, module and systems delivery. To make solar
energy fully competitive with traditional energy sources, REC focuses on
cost reduction and improvement of products. This should be achieved
through introduction of new process and product technologies as well as
continuous productivity improvement and technology development.
REC’s strategies and goals are presented in the annual and quarterly
reports, at the Capital Market Days and at various investor meetings.
3. EQUITYAND DIVIDENDS
The REC Group’s consolidated equity was NOK 12,192million on
December 31, 2011, which was equivalent to approximately 50 percent
of total assets.
The Board considers that the equity capital is appropriate for the
Company’s objectives, strategy and risk profile. Reference is also made
to note 3.3 to the consolidated financial statements regarding capital
structure and financing and to the report of the Board of Directors.
The REC Group’s ambition is to give its shareholders a high and stable
return on their investment and to be competitive compared with
alternative investment opportunities with comparable risk. This should
be achieved, first and foremost, through strong and profitable growth.
To support committed investments and productivity improvements, the
Board’s view so far has been that retained earnings should be put to
profitable use within the Company. Accordingly there has been no
distribution of dividends to the shareholders since the Company was
publicly listed in 2006.
The REC Group and REC ASA reported large losses in 2011 and REC
ASA had no distributable equity at December 31, 2011. Consequently,
the Board of Directors does not propose any dividend payments for the
financial year 2011.
Reference is made to note 3.3 to the consolidated financial statements.
The Board will continue to make a yearly assessment based on the goals
and strategies and the financial situation of the Company.
THE BOARD OF DIRECTOR’S REPORT
ON CORPORATE GOVERNANCE