Statutes of Kommuninvest Cooperative Society

Adopted at the annual general meeting of Kommuninvest Cooperative Society held on 10 April 2014, 16 April 2015 and 20 April 2017. Registered with the Swedish Companies Registration Office on 31 May 2017.

NOTE: This document represents a certified translation of the Swedish original. In the event of non-conformance between the language versions, the Swedish version will apply.


Section 1
Objects, nature and financing of the activities

Objects
The Society is a membership organisation whose members comprise Swedish municipalities, and whose objects are to put into practice a common business concept and vision in its activities consisting of the promotion of the financial interests of its members by creating the best possible conditions in the long term for the members’ borrowing and the creation of optimal conditions for members’ activities in the financial area by providing support to the members.

Nature of the activities

The Society shall promote the objects, either personally or through companies, by:

• acting as a local debt office for its members and legal entities closely affiliated with members;
• providing financial services to the members and to legal entities closely affiliated with members;
• contributing to effective financing and financial activities in the municipal sector;
• promoting cooperation and skills development within the financial area among the members and the municipal sector;
• actively safeguarding the interests of the municipal sector within the financial area vis-à-vis various public bodies and institutions, in forming public opinion both at the national and international level;
• conducting other activities which have a natural connection and are compatible with the activities referred to above.

The term ”legal entities closely affiliated with members” means legal entities over which a member, either individually or jointly with another member or members, exercises a controlling influence, and foundations created by a member the objects of which are exclusively within the municipal area of expertise. In these Statutes, where applicable, the term ”member” also means a legal entity closely affiliated with a member.

The Society shall conduct activities within the scope of the municipal area of expertise.

Activities shall be conducted based on well-founded economic and commercial principles, taking into account the fact that the Society shall not be managed for the purpose of making a profit.

The Society may conduct all or certain of its activities through companies. Its main activities shall be conducted through a company which shall be a credit market company wholly owned by the Society.

 

Capitalisation and financing of the activities

The Society shall endeavour to ensure that the Society and its company are capitalised such as to ensure the financial independence and development of the Society, and shall endeavour to promote the objects of the Society.

The activities should be financed primarily by means of capital contributions and profits which are transferred from the Society’s companies or which derive from the Society’s activities.

The Society may take up loans from members and/or other financial backers.

 

Section 2
Name and registered office

The name of the Society is Kommuninvest ekonomisk förening (English: Kommuninvest Cooperative Society).

The registered office of the Society is in Örebro, Sweden.

 

Section 3
Membership

Requirements for membership

Members of the Society must be Swedish municipalities. In these Statutes, ”municipality” means a primary municipality or county council/region, or another equivalent body or region which may be formed either in accordance with the Changes to the Division of Sweden into Municipalities and County Councils Act (1979:411) as it stands or as amended in the future, or in accordance with any new Act which may replace such Act. Primary municipalities or other equivalent bodies are referred to in these Statutes as ”primary municipalities”. County councils and other equivalent bodies or regions are referred to in these Statutes as ”county councils/regions”.

Applications for membership must be submitted to the board of the Society, which decides upon the election of new members.
Municipalities that apply for membership and municipalities that are granted membership, as well as legal entities closely affiliated with such members, are required:

• to exercise proper financial management over their activities;
• to conduct their activities such that the municipal expertise defined in the Municipality Act is guaranteed in all material respects;
• to share the Society’s interests and promote its objects in all respects.

Specific provisions regarding a member’s rights and obligations

Only members and legal entities closely affiliated with members may be afforded the opportunity to use the services which the Society shall provide through the Society’s companies.

A member’s right to use services provided through the Society’s companies may be restricted if the provision of a loan or another service is deemed to be incompatible with legislation or guidelines from a supervisory authority, generally accepted practices, the policies and guidelines of the boards of directors of the Society’s companies, or these Statutes.

Each member of the Society shall be jointly and severally liable for all of the obligations of the Society’s companies pursuant to a guarantee entered into separately.
In the event a member is discharged from liability under the guarantee, the member shall be entitled to claim compensation by recourse to other members pursuant to a recourse undertaking entered into separately by all members.

A member shall be obliged to comply with decisions made by the board of the Society and shall, upon demand, provide information about its financial situation and any other information required for the assessment of the member by the Society’s companies.

In addition to the above, a member shall be entitled to the other rights and shall be subject to the other obligations set forth in the Statutes and any agreement(s) applicable from time to time between the Society’s members and the Society’s companies, and as set forth in any applicable law or other enactment.

 

Resignation and expulsion

A member shall be entitled to resign from the Society. Notice of resignation must be given in writing. Notice of resignation may not be given earlier than two years following admission to the Society.

A member leaves the Society upon the expiry of the financial year ending six months after the member gave notice of resignation, unless any mandatory provision of the Cooperative societies Act (1987:667) provides for a right to resign from the Society at an earlier date.

Any member in material breach of its obligations to the Society or the Society’s companies or who otherwise acts in any material respect contrary to the Society’s interests may be expelled following a decision by the general meeting of the Society.

A member’s liability for all of the obligations of the Society’s companies pursuant to a guarantee entered into separately shall, following resignation or expulsion, be limited to those obligations which existed at the time of the member’s resignation from the Society.

Section 4
Freedom of information 

 Right of the general public to obtain documents

The general public shall be entitled to obtain documents relating to the Society and the Society’s companies to the extent applicable to the disclosure of public documents.

Section 5
Members’ capital contributions

 5.1                 Generally

Members shall participate in the Society with mandatory capital contributions calculated in the manner set forth below.

Members’ capital contributions shall be paid or credited in the manner set forth below:
1. Capital contribution upon admission to the Society;
2. Annual mandatory capital contribution;
3. Capital contribution for population increase;
4. Capital contribution for the Society’s regulatory compliance;
5. Capital contribution issue; and
6. Other payment of capital contributions.

Capital which is contributed in forms other than those set forth in 1-6 may not be credited against a member’s capital contribution.

Members may participate with capital contributions in addition to the mandatory capital contribution. Such surplus contributions are governed by Section 6.

5.2                 Calculation of the size, and payment, of the mandatory member’s capital contribution

The lowest level of capital contribution is determined by the board of directors and shall not exceed SEK 200 per inhabitant for primary municipalities, subject to a possible adjustment pursuant to Section 5.9.

Not later than 1 January 2018, all members shall have paid/been credited a member’s capital contribution which, at a minimum, is SEK 200 per resident for a primary municipality, subject to a possible adjustment pursuant to Section 5.9.

A mandatory member’s capital contribution, up to and including SEK 900 per inhabitant for a primary municipality, subject to a possible adjustment pursuant to Section 5.9, shall constitute the basic capital contribution. A contribution in excess of this amount per inhabitant, up to and including the highest contribution with which a member is obligated to participate, shall constitute a supplemental capital contribution.

The maximum capital contribution with which a member is obligated to participate in the Society shall be SEK 1 800 per resident for a primary municipality, subject to a possible adjustment pursuant to Section 5.9. County councils/regions shall participate in the Society in an amount that is one-fifth of the minimum and maximum level determined by the board of directors for primary municipalities, taking into consideration any difference in calculation which may follow from Section 5.9.

A member’s maximum and minimum mandatory capital contribution shall be calculated as follows:

For a primary municipality, the minimum and maximum capital contributions are calculated by multiplying the amounts determined by the board of directors as the minimum and maximum amount per resident by the number of residents of the municipality at the beginning of the calculation year. For county councils/regions, the maximum contribution amount shall be one-fifth of that which applies to the primary municipality, taking into consideration any difference in calculation which may follow from Section 5.9.

The board of directors may decide to apply a lower capital contribution amount per resident where the number of residents exceeds the limits set forth in Section 5.9.
The components of the aggregate mandatory capital contribution are to be paid/credited at different times. The first time shall be upon admission to the Society, and thereafter in the manner set forth for each and every one of the forms used by the Society.

Where a member has paid or been credited a capital contribution amount which exceeds the maximum capital contribution amount which the member is required to contribute, the surplus amount shall be transferred to surplus capital contributions.

5.3 Payment of capital contribution upon admission to the Society

Upon admission to the Society, the member shall pay in cash the minimum mandatory capital contribution amount determined by the board of directors pursuant to Section 5.2 above.

A member’s capital contribution shall be calculated as follows:

A contribution amount per resident in a primary municipality shall be determined annually by the board of directors. Such amount may not exceed SEK 200. For county councils, the capital contribution amount upon admission shall be, at a maximum, one-fifth of the amount which applies to a primary municipality.

The capital contribution upon admission shall be the capital contribution amount per resident determined by the board of directors, multiplied by the number of residents of the primary municipality or county council/region, calculated at the beginning of the admission year.

The board of directors may decide to apply a lower capital contribution amount per resident when the population exceeds the limits set forth in Section 5.9.

5.4                 Annual mandatory capital contribution

Where so decided by the general meeting, members shall participate in the Society by making an annual capital contribution. Following a proposal from the board of directors, the general meeting shall determine the amount of the annual capital contribution which members are required to make, expressed as a percentage of the dividend on the surplus as decided upon by the general meeting, in the form of interest on capital contributions and/or a bonus pursuant to §18.

The general meeting may decide upon different percentages for different forms for surplus dividends. However, the annual capital contribution each member is required to make may not exceed 100% of the adopted surplus dividend in the form of interest and/or a bonus.

Where the member, not later than 31 December of the year preceding the general meeting’s resolution regarding the annual capital contribution, has paid/been credited a member’s capital contribution which, in the aggregate, amounts to one-half, three-quarters, or the maximum of the basic capital contribution established for the member, the annual capital contribution for the member shall be reduced as follows:

Percentage of the maximum capital contribution level which has been paid Reduction of the annual capital contribution level by
< 50% 0%
50% – < 75% 50%
75% – < 100% 75%
100% – 100%

The annual capital contribution shall fall due for payment one month after the resolution is adopted by the general meeting or such later time as resolved by the general meeting, and shall be paid in cash.

5.5                 Other payment of capital contributions

The board of directors may decide that a member may choose to pay one or more separate capital contributions in order to pay the mandatory member’s capital contribution in whole or in part.

5.6                 Adjustment in the event of a population change

As from the time when the member has reached the maximum basic capital contribution which can be calculated for the member pursuant to Section 5.2, the capital contribution shall be revised every tenth year following a decision by the board of directors.

The member’s capital contribution, calculated from the start of the calculation year, shall be compared with the maximum basic capital contribution which can be calculated for the member pursuant to Section 5.2, using the number of residents at the start of the calculation year. Amounts which exceed the member’s maximum basic capital contribution shall be transferred from the member’s capital contribution to surplus capital contributions.

The amount by which the basic capital contribution is below the maximum level shall fall due for payment one month after a decision by the board of directors and shall be paid by the member in cash as a capital contribution for an increase in population.

Where the general meeting has determined, pursuant to Section 5.7, that the members are to pay a contribution for the Society’s statutory compliance which exceeds the maximum basic capital contribution, revision of the capital contribution due to changes in population shall, instead, take place every tenth year following adoption of the resolution of the general meeting.

5.7                 Capital contribution for the Society’s regulatory compliance

If the board of directors anticipates a risk that the Society, or the Society’s companies, or the consolidated capital adequacy situation for the Society’s corporate group, will not meet the statutory minimum capital requirement or minimum permitted capital adequacy, or where the board of directors anticipates the risk of a similar shortfall, an annual or extraordinary general meeting may adopt a resolution obligating the members to pay a capital contribution for the Society’s regulatory compliance.

The maximum of any such amount shall be the difference between the member’s capital contributions already paid by or credited to the member and the amount which is determined to be the highest level of member’s supplemental capital contribution pursuant to Section 5.2

The members shall pay, in cash, the amount determined by the general meeting upon demand as a capital contribution for the Society’s regulatory compliance.

5.8 Capital contribution issue

Subject to the restrictions set forth in legislation regarding cooperative societies in force from time to time, amounts can be transferred to the members’ capital contributions through a capital contribution issue.

Any such capital contribution issue shall be allocated pro rata to the total amount of each member’s paid up capital contributions plus any capital contributions credited to the member through previous capital contribution issues, pursuant to which, upon the production of the calculation key for the capital contribution issue, an adjustment shall be made taking into account the provisions of the third paragraph below.

A member shall not be entitled to participate in any capital contribution issue which is resolved upon in the same financial year as the financial year in which the member was admitted to the Society. A capital contribution issue which is resolved upon in the financial year following the financial year in which the member was admitted to the Society shall be credited to the member in the amount of one-twelfth (1/12) for each month in which the member was a member during the year of admission. The month during which membership was granted is counted as a whole month. Upon resignation or expulsion from the Society, the resigning or expelled member shall be credited with any capital contribution issue resolved upon not later than the same day as the resignation or expulsion.

Amounts transferred to the members’ capital contributions through a capital contribution issue may only be paid to a member upon the member’s withdrawal from the Society as a result of the member’s resignation or expulsion in accordance with the procedure set forth in §5.10.

A participation right in respect of capital contributions which have been credited to the member through a capital contribution issue may not be assigned to any other party.

5.9                 Reduction of capital contribution amount per resident in certain cases

Where the number of residents in a primary municipality exceeds 90,000, or 200,000 in a county council/region, the board of directors may resolve that for the population exceeding this threshold, the capital contribution amount per resident (which is to form the basis of the calculation of the capital contribution) shall be less than the maximum capital contribution amount determined pursuant to Section 5.2, the minimum capital contribution amount determined pursuant to Section 5.2, or the capital contribution upon admission pursuant to Section 5.3.

5.10               Reimbursement of capital contribution

Any member who resigns from or is expelled from the Society shall be reimbursed any capital contribution which the member has paid or which has been credited to it through a capital contribution issue. The capital contribution shall be paid to the member six months after its resignation from the Society.

However, capital contributions may only be reimbursed to the extent the Society’s net assets according to the balance sheet prepared on the date of resignation are sufficient, without recourse to the statutory reserve or revaluation reserve, and to the extent such is not contrary to the equivalent entitlements of other members.

In addition, such reimbursement is contingent upon a determination by the board of directors that reimbursement can be made without having a significant detrimental effect on the capital adequacy situation of the Society’s corporate group or the Society’s companies, or causing another comparable shortfall.

The Society shall be entitled to deduct from any bonus any amount required to settle any counterclaims due to the Society or to the Society’s companies.

5.11 Liability of members for the obligations of the Society

Each member is liable for the Society’s obligations up to the amount of its capital contributions and any due and payable, but as yet unpaid, contributions, and otherwise as set forth in the guarantee entered into separately for all of the obligations of the Society’s companies.

Section 6.
Surplus capital contribution

The board of directors may resolve that the members shall be entitled to contribute capital to the Society in the form of surplus capital contributions. Surplus capital contributions shall not be credited against the member’s mandatory capital contribution. Surplus capital contributions shall otherwise be subject to the provisions of the Associations Act and other applicable legislation and decisions taken by the board of directors. Surplus capital contributions may also arise by a member participating, in another manner, with a capital contribution greater than that stated in Section 5.2, as well as in conjunction with adjustment pursuant to Section 5.6.

A member shall be entitled to request reimbursement of all or parts of the surplus capital contribution. Reimbursement shall be made five years after written notice of withdrawal of the surplus capital contribution or such earlier time as decided by the board of directors and only to the extent that the balance sheet reflects that assets retained by the Society at the time of payment make it possible without recourse to the statutory reserve or the revaluation reserve and provided such can take place without disregarding other members’ equal right.

In addition, such reimbursement is contingent upon a determination by the board of directors that reimbursement can be made without having a significant detrimental impact on the capital adequacy situation of the Society’s corporate group or the Society’s companies, or causing another comparable shortfall.

At a member’s request, the board of directors may decide that all or parts of the surplus capital contribution shall be transferred to supplemental capital contributions in accordance with Section 5.5. The board of directors may also decide to utilise a surplus capital contribution in an amount not to exceed the amount which the member, by virtue of the resolution of the general meeting in accordance with Section 5.7, is to pay as a capital contribution for the Society’s regulatory compliance.
A surplus contribution may not be assigned.

Section 7
Non-convertible debentures

The board of directors may resolve that capital may be contributed through limited term or perpetual separate capital contributions (debenture capital contributions).

Following approval by the board of directors, parties other than members may also make such contributions.

Members may transfer the rights which are associated with the debenture capital contributions (debenture shares) to non-members following approval by the board of directors. Acquisition of any debenture share in contravention of this provision shall be invalid.

Each debenture capital contribution confers a right of priority to annual dividends from the amount which, pursuant to the balance sheet adopted for the financial year, is at the disposal of the general meeting of the Society following deductions for amounts necessary to cover any existing losses from preceding years and after the statutory minimum is allocated to the statutory reserve.

The right of priority shall take precedence over bonuses (whether or not they are calculated as part of the annual profit), interest on capital contributions, and other purposes for which the stated funds may be used.

In the event of debenture capital contributions, the general meeting of the Society shall annually adopt a resolution, to the extent that sufficient funds are available for the purpose proposed in accordance with the Associations Act, regarding whether a dividend shall be paid on the debenture capital contributions pursuant to the provisions of the debenture up to the maximum amount which may be applied.

Any dividend on debenture capital contributions shall fall due for payment within two weeks from the date on which the resolution to that effect was adopted.

Resolutions made be adopted regarding payment of the preceding year’s/outstanding dividend in conjunction with redemption of the debenture capital contribution.

The board of directors shall be entitled to decide what persons may make debenture capital contributions, the amount in which such contributions may be made, and the terms and conditions which, in addition to the foregoing, are to apply in each individual case.

Section 8
Certificate regarding capital contributions and non-convertible debenture

The Society shall issue to the member a certificate regarding the paid-in capital contribution and regarding the member’s share in the Society’s capital contribution issue.

The Society shall also issue certificates regarding debenture shares or, if so resolved by the board of directors, cause debenture shares to be registered with a central securities depository in accordance with the Cooperative Societies Act applicable from time to time.

Section 9
Decision-making and supervisory bodies

Kommuninvest’s decision-making and supervisory bodies

The Society’s decision-making and supervisory bodies are the following:

1. The general meeting
2. The board
3. The managing director
4. The auditors

The following body shall be responsible for preparing the general meeting’s resolutions in respect of appointments:

5. The nominating committee

No individual may be appointed to more than one of the positions/bodies set forth in 2, 3, 4 and 5 at any one time.
Employees of the Society or the Society’s companies are not eligible to be appointed to the positions/bodies set forth in 2, 4 and 5.

 

Section 10
General meetings

Members exercise their right to make decisions relating to the Society’s affairs at general meetings. Each member shall have one vote.

Each member shall appoint a proxy and, in case of the proxy’s absence, a replacement proxy, to represent the member at general meetings.

The annual general meeting shall be held once a year not later than in April.

The following business shall be addressed at the annual general meeting:

1. Election of a chairman of the meeting.

2. Preparation and approval of the voting register.

3. Election of one or two persons to attest the minutes.

4. Determination of whether the meeting has been duly convened.

5. Determination of the agenda.

6. Information about Kommuninvest’s (including the Society’s companies) activities, finances and future plans.

7. Adoption of owner directives for the Society’s companies.

8. Submission of the annual report and auditor’s report for the Society and the group.

9. Resolutions of the Society and the group regarding: (i) the adoption of the income statement and balance sheet; (ii) the allocation of profit or loss of the Society and the group pursuant to the adopted balance sheets; and (iii) discharge from liability for members of the board and the managing director.

10. Determination of the fees for the board, the nominating committee and the auditors.

11. Election of the directors of the board and the chairman and vice chairman of the board.

12. Where applicable, election of auditors and alternate auditors.

13. Election of the nominating committee and a chairman and vice chairman of the nominating committee of the Society.

14. Election of representatives for general meetings of the Society’s companies.

15. Resolution regarding the location of the next meeting.

16. Adoption of rules of procedure for the nominating committee of the Society and rules of procedure for the nominating committee of the Society’s companies or, where applicable, other body of the Society whose rules of procedure are to be addressed by the meeting.

17. Board of directors’ proposals.

18. Motions.

19. Other business incumbent on the meeting pursuant to the legislation regarding cooperative societies in force from time to time or the Statutes.

Extraordinary general meetings

Extraordinary general meetings shall be held where so required by the board. Extraordinary general meetings shall also be held where so requested in writing for a specific purpose by an auditor or not less than one-tenth of the Society’s members. Notice of an extraordinary general meeting shall be given within fourteen (14) days of the date on which such request was received by the Society.

Voting

Voting shall be open. Voting which relates to elections shall be by secret ballot where so requested. In the event of a tied vote, the chairman shall have the casting vote, except in relation to elections, where the outcome shall be determined by a drawing of lots.

Attendance of directors

Directors shall attend general meetings and shall be entitled to speak and make proposals.

Individuals proposed for election to the board may attend the general meeting at which the election of the individual is to be addressed.

Notices of general meetings and other notices

Notice of a general meeting shall be given by the board. Notice shall be given by letter to the Society’s members. Notice of a general meeting shall be given no earlier than four (4) weeks prior to the meeting. Notice shall be given not later than two (2) weeks prior to an annual general meeting and an extraordinary general meeting.

Other notices to the Society’s members shall also be given by letter.

Non-member attendance at general meetings of the Society

Any person who is not a member shall be entitled to attend the proceedings at general meetings of the Society.
The board of directors shall be entitled to disapply this right to attend the proceedings.

Section 11
Board of directors of the Society

Appointments, etc.

The nominating committee shall propose directors for the board, whereby the outcome of the public elections in the member municipalities shall be taken into account in accordance with guidelines set forth in more detail in the rules of procedure for the nominating committee, which shall also contain details of the other matters that shall be taken into account when directors are proposed for the board.

The board shall comprise not less than five (5) and not more than fifteen (15) members, with not less than 5 and not more than 15 alternate directors. Directors and alternate directors are elected annually at the annual general meeting and serve until the close of the next annual general meeting. The annual general meeting shall also appoint a chairman and vice chairman of the board from among elected directors, and shall determine the order in which alternate directors shall serve if a director is prevented from attending a board meeting or participating in the handling of a particular matter.

Only individuals who are elected representatives of a member may be elected as a director or alternate director. An elected representative is an individual elected to perform those duties set forth in Chapter 4, section 1 of the Municipal Act (1991:900) as it stands or as
subsequently amended. However, where so resolved by the general meeting, in special cases individuals who do not fulfil the above criteria may be elected as a director or alternate director.

A director’s appointment as director shall apply until the close of the next year’s annual general meeting, unless the appointment ends prior thereto as a result of a resolution adopted at an extraordinary general meeting or as a result of the resignation of the director following a request to leave the board.

Duties of the board and quorum

The board is responsible for the organisation of the Society and the management of the Society’s affairs. The board shall primarily decide upon matters of a general nature or of major financial importance.

The board of directors shall, on an on-going basis, assess the financial situation of the Society and the group. The board of directors shall ensure that the organisation of the Society is structured such that the accounts, funds management, and the Society’s financial circumstances otherwise are monitored in a satisfactory manner. In the event certain tasks have been delegated, the board of directors shall act with care and, on an on-going basis, verify that such delegation can be maintained.

The board shall adopt an annual plan for meetings comprising not less than two board meetings per year. In addition, board meetings may be called by the chairman of the board, a director or the managing director.

The board shall each year adopt written rules of procedure governing its work.

The board and any individual(s) designated by the board may sign on behalf of the Society.

The managing director shall be entitled to sign on behalf of the Society in accordance with legislation regarding cooperative societies in force from time to time.

All directors must be given notice to attend board meetings. The board is quorate where more than half of the total number of directors is present. Resolutions are adopted by a simple majority of the directors present. In the event of a tied vote, the chairman shall have the casting vote, other than in relation to elections, where the outcome is determined by a drawing of lots.

The board shall each year produce proposed owner directives for presentation to the general meeting concerning the manner in which the Society’s ownership of the Society’s companies is to be exercised. The proposed owner directives shall state the aims and guidelines for conducting the activities.

The board shall each year propose members for the nominating committee of the Society.

The board shall appoint a nominating committee for the Society’s companies and shall appoint a chairman of this committee, and may appoint delegations, standing committees, preparatory committees, and other bodies as required for the Society’s activities.

The annual general meeting shall adopt rules of procedure governing the work of the nominating committee of the Society’s companies.

Special provisions regarding alternate directors

Alternate directors shall be given notice of all board meetings in the same manner as directors. Alternate directors are entitled to attend and speak at board meetings.

The annual general meeting determines the order in which alternate directors attend board meetings in lieu of a director in the event of the non-attendance of a director at board meetings. The nominating committee shall produce a proposal for the order in which alternate directors attend board meetings in the event of the non-attendance of a director at meetings.

 

Section 12
Managing director

The board shall appoint a managing director. The board shall each year adopt instructions for the managing director. The board exercises supervisory authority over the management of the Society by the managing director.

The managing director shall attend to the day-to-day management of the Society in accordance with the guidelines and instructions issued by the board, and ensure that the Society’s accounts are maintained pursuant to law and that the management of funds is conducted satisfactorily.

In addition, the managing director may, in urgent cases, without authorisation by the board, take measures which, in light of the scope and nature of the Society’s operations, are of an unusual nature or of major significance, provided a decision by the board cannot be awaited without significant prejudice to the Society’s activities.

 

Section 13
Election of auditors

The annual general meeting shall appoint (i) an authorised public accountant or registered accounting firm; and (ii) two lay auditors.

Authorised public accountant

The annual general meeting shall appoint an auditor and may appoint an alternate auditor for the period until the close of the annual general meeting which is held in the fourth financial year after the financial year in which the auditor was appointed. Where the same auditor is reappointed upon expiry of the period pursuant to the above, the general meeting may determine that the appointment shall apply until the close of the annual general meeting held during the third financial year after the appointment of the auditor.

Auditors and alternate auditors must be authorised. Registered accounting firms may also be appointed as auditors, in which case the auditor-in-charge must be an authorised public accountant. Prior to the annual general meeting at which a resolution to elect an authorised public accountant or registered accounting firm is to be adopted, the lay auditors shall propose an authorised public accountant or registered accounting firm with an auditor-in-charge.

Lay auditors

The annual general meeting shall appoint two lay auditors for the period until the close of the annual general meeting which is held in the fourth financial year after the election of the lay auditors. Prior to the annual general meeting at which a resolution to elect lay auditors is to be adopted, the nominating committee shall propose lay auditors in accordance with §14.

Any individual appointed as a lay auditor shall be or shall have been an elected representative of a member and shall possess special knowledge and experience of accounting, finance and/or financing activities in the public sector.

The lay auditor shall, in particular, examine whether the activities have been conducted in an expedient and, from a financial perspective, satisfactory manner and whether the activities have been conducted in accordance with rules and principles of municipal law relating to municipal activities conducted through companies.

The general meeting shall adopt rules of procedure containing instructions governing the work of the lay auditors.

Section 14
Nominating committee

The nominating committee is the body of the general meeting which prepares the meeting’s resolutions as regards matters relating to appointments for the purpose of establishing a sound basis for the meeting to decide upon these matters. As stated in §10, the nominating committee is elected each year at the annual general meeting for the period until the close of the next annual general meeting. The nominating committee shall comprise not less than five (5) and not more than seven (7) members. A chairman and vice chairman of the nominating committee are also appointed at the annual general meeting.

Prior to the annual general meeting, the board shall propose members for the nominating committee, as well as a chairman and vice chairman. A member of the nominating committee may not be a member or alternate member of another body of the Society or subsidiary of the Society at any one time.

Only individuals who are elected representatives of a member may be elected as a member of the nominating committee. An elected representative is an individual elected to perform those duties set forth in Chapter 4, section 1 of the Local Government Act (1991:900) as it stands or as subsequently amended. However, where so resolved by the general meeting, in special cases individuals who do not fulfil the above criteria may be elected to the nominating committee.

The nominating committee has the following duties:
• to propose directors for the board, a chairman and vice chairman of the board, and a chairman and persons to attest the minutes for the annual general meeting;
• to propose fees and other compensation;
• to propose lay auditors, where applicable;
• to prepare any other matters to be resolved upon by the meeting.

The annual general meeting shall adopt rules of procedure governing the work of the nominating committee.

A special nominating committee appointed by the board of the Society shall be responsible for preparing resolutions for general meetings concerning appointments for the Society’s companies.

Section 15
Grounds for calculating interest on capital contributions and bonuses

Interest on capital contributions shall be calculated based on the total capital contributions paid plus any capital contributions credited to the member through previous capital contribution issues.

The interest rate on capital contributions which
a) exceed the members’ maximum mandatory capital contributions (surplus contribution) may be set higher or lower than the interest rate for mandatory capital contributions;
b) constitute a supplemental capital contribution may be set higher or lower than the interest rate for the basic capital contribution;
c) constitute a mandatory capital contribution may be set higher or lower, based on the ratio of the member’s capital and the member’s volume of business (loan volume).

Alternatives a), b) and c) may be applied individually or in various combinations.

The bonus shall be calculated based on each member’s volume of business in the Society or in a company wholly or partly owned by the Society. A member’s volume of business shall also include the corresponding volume of business attributable to companies, foundations and municipal associations for which the member has issued a guarantee.

“Volume of business” means an economic measurement reflecting the extent to which the members have used services and other resources during the financial year, based on loan volume, interest paid, compensation and similar grounds.

New members shall be entitled for the first time to receive any surplus, in the form of interest on capital contributions or a bonus based on volume of business, through the resolution adopted by the annual general meeting in the year following the member’s admission to the Society.

 

Section 16
Dissolution of the Society

The Society shall enter into liquidation if a duty to liquidate the Society arises pursuant to legislation regarding cooperative societies in force from time to time or if it resolved at a general meeting to enter into voluntary liquidation.
After the Society’s operations have been wound up and its debts paid off, the remaining assets shall be divided among the members pro rata to each member’s capital contribution, which shall also include any capital contribution issues.

Section 17
Disputes

Any disputes between the Society and the board, a director, the managing director or a member shall be determined in accordance with the procedure stipulated in the Arbitration Act. The aforementioned shall also apply to disputes between the Society and a former member, if the dispute relates to membership or matters connected with membership.

 

Section 18
Annual report and allocation of any surplus

Financial year

The Society’s financial year shall be the calendar year.

                     

Allocation of any surplus

Once the statutory allocation has been made to the statutory reserve, unrestricted equity may be appropriated by the general meeting of the Society as follows:

1. distributed as a dividend on a debenture contribution according to Section 7;

What remains thereafter shall be:

2. distributed as interest on members’ paid up capital contributions according to Section 15; and/or
3. allocated among the members in the form of a bonus based on each member’s volume of business according to Section 15; and/or
4. allocated among the members as a capital contribution issue according to Section 5.8.

Any surplus which is not allocated by the general meeting in accordance with 1-4 above shall be brought forward to the following year’s accounts.

 

Section 19
Motions

A member of the Society may request that a certain matter be addressed at the annual general meeting. Such request must be made in writing to the board not later than 31 January in the same year in which the annual general meeting is held.

The board shall present the motion along with any comments to the general meeting.

 

Section 20
Amendments to the Statutes

Amendments to the Statutes shall be resolved upon by the general meeting in accordance with the procedure stipulated in the legislation regarding cooperative societies in force from time to time.