Disclaimer

The content of this section is intended for investors and for informational purposes only. The content is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation. Kommuninvest does not make representation or warranty (express or implied) of any nature or accept any responsibility or liability of any kind for accuracy or sufficiency of any information, statement, assumption or projection in this information, or for any loss or damage (whether direct, indirect, consequential or other) arising out of reliance upon this content. The reader of the information of this section is solely responsible for making its own independent appraisal of the contents herein.

Cookies

Cookies are small text files that are stored on the visitor’s browser or hard drive of the computer or device. Information contained in cookies can be used to track the surfing of a user on the website and store personal settings. There are two kinds of cookie. Session cookies are deleted from the computer or device when closing the web-browser. Persistent cookies will remain stored on the computer or device until deleted by the user or until they reach their expiry date.

Google Analytics

Kommuninvest website uses Google Analytics, a web analytics service provided by Google. Google Analytics use cookies and the information generated by them, through your use of this website (including your IP address), will be transmitted to and stored by Google on servers in the United States. This information is used to evaluate visitor statistics. Kommuninvest, for example, use reports from the visits on the web site to improve content, navigation and structure. Google may also transfer this information to third parties when it is required by law or when third parties process the information on Google's behalf. Google will not associate IP addresses with any other data held by Google. You may refuse the use of cookies by selecting the appropriate settings in the browser (see below). By visiting Kommuninvest´s site, you agree that Google processes personal information in the manner and for the purposes described above.

How to avoid cookies

If you do not wish to accept cookies, your web browser can be set to automatically deny the storage of cookies or to inform you every time a website requests permission to store a cookie. Previously stored cookies can also be deleted via the web browser. Visit the web browser’s help pages for more information. If you have any questions about this don’t hesitate to contact us. By visiting the web-site of the Swedish Post and Telecom Authority (PTS), that monitors the electronic communications sector, you will find further information about cookies.

Information regarding the treatment of personal data by Kommuninvest i Sverige AB

Kommuninvest has high ambitions regarding openness, traceability and transparency. At the same time, the company complies with regulations aimed at protecting the individual and its integrity. Much of the information pertaining to an individual is referred to as personal data. Personal data are defined as follows: Any information directly or indirectly attributable to a human being who is in life is regarded as personal data. Even images (photos) and sound recordings on individuals treated by computer can be personal data even if no names are mentioned. Encrypted data and various types of electronic identities, such as IP numbers, are counted as personal data if they can be linked to a physical person. This information describes Kommuninvest's considerations and regulations regarding the company's handling of personal information when you visit our websites or have other contacts with us. Kommuninvest i Sverige AB (“Kommuninvest”) is responsible for all personal data that is processed within the entire organization. Below is a brief description of what personal data is processed, the reason why it is processed, and your individual right of access to all data that is held about you. By visiting our site, you agree to these privacy principles. If you do not agree to these data protection principles, stop using this site and refrain from phone contacts. We refer instead to mail correspondence, which is handled through the registrations department. Please feel free to get in touch with us if you need any further information about this by using the contact details below.

Personal data that is being managed

Kommuninvest processes personal data for the administration and execution of contracts that are in force, and to be able to fulfil its legal obligations. Kommuninvest processes personal data that is provided voluntarily when visiting the Kommuninvest website, when entering contracts, or when data is otherwise recorded about the preparation or administration of a contract (for example, about a lending or borrowing agreement). When matters are dealt with on the telephone, personal data is also processed by recording the call. Kommuninvest may also supplement personal data by obtaining further information from public records. Personal data may be disclosed in certain situations where Kommuninvest is obliged by law to provide information to an agency, for example the Swedish Financial Supervisory Authority, or the Swedish Data Protection Authority.

Non-identifiable data

Kommuninvest may occasionally collect anonymous information about the use of its websites to improve the site and the services provided. These usage data may apply among others: the number of visits to the site and their length; the user's geographical position; usage rate of the site different sections; which technique is used; disturbances in the business. The data is not reviewed at an individual level without your express permission.

Identifiable data

When Kommuninvest collects identifiable data, we strive to inform you as to the purpose for which the information is requested. Normally, this information is requested to answer your questions. Kommuninvest may share this type of information within the Group for the purposes mentioned in this information. Kommuninvest uses subcontractors to offer digital services. We may need to share your personal information with these for them to provide us with their services. Our subcontractors may not use this kind of personal data for any other purpose and we assume that their services are covered by privacy. Kommuninvest does not sell and does not exchange personal data with other companies for marketing purposes. Kommuninvest may contact you to complete customer satisfaction and market research.

Personnel management

In an application or request relating to an employment advertised on our website or in any other medium, you may need to provide Kommuninvest personal information, such as your resume. Kommuninvest can use this information on all its units when making employment decisions or for purpose of the request. Kommuninvest can save the data for future use, unless you have prohibited this.

Subcontractors in information management

In some situations, Kommuninvest uses subcontractors who collects, evaluates and otherwise handles data on our behalf. Kommuninvest's principle is that subcontractors commit to our data protection regulations. Normally this is governed by an agreement between Kommuninvest and our suppliers.

The accuracy of your personal data

This site may not be used to publish or disseminate data protected by copyright or other equivalent rights without the permission of the proprietor, or otherwise in a way that is adversely, offensive or harmful to Kommuninvest or third parties. By submitting this type of information through the Website, you grant Kommuninvest the right to use, develop, produce, distribute, publish or transmit the information you send in whole or in part, and / or add the data sent from you without obligation and liability to other material or other products or services.

Transcript from register and the rectification of errors

Once a year you can, free of charge, request a transcript from Kommuninvest whereby you will receive information on the personal data about you that is being held, where this data came from, why it was obtained, the purpose for which it is being held, and to whom any data may be disclosed. If you would like to be sent such a transcript, please send a written request, signed by you, to the address you will find below. You can notify us at the same address if you no longer wish to receive information from Kommuninvest, or if you would like to request the correction of some erroneous or incomplete personal data.

Comments on Kommuninvest's actions

You are welcome to contact Kommuninvest's complaint manager who takes care of your comments. Describe what you are not happy with and who you previously have had contact with. Kommuninvest i Sverige AB Klagomålsansvarig Box 124 701 42 Örebro

Governance and control

The Kommuninvest Cooperative Society is the parent society of the Kommuninvest Group. The Society is owned by a large number of Swedish municipalities and county councils with the purpose of enhanc- ing the efficiency of their financial opera- tions. Together with Kommuninvest i Sverige AB and Kommuninvest Fastighets AB, the Society forms a financial group of companies. Good governance and control are crucial to the Kommuninvest Group, since it is publicly owned and has a role of considerable responsibility. The Corporate Governance Report for Kommuninvest i Sverige AB is included in that company’s Annual Report.

The Kommuninvest Group

The Kommuninvest Cooperative Society (“the Society”, corp. ID no. 716453-2074) owns 100 percent of the shares in Kommuninvest i Sverige AB (“the Company”, corp. ID no. 556281-4409). The Company owns 100 percent of the shares in Kommuninvest Fastighets AB (corp. ID no. 556464-5629) and 50 percent of the shares in Administrative Solutions NLGFA AB (corp. ID no. 556581-0669).

On 31 December 2014, participation capital in the Society amounted to SEK 2,054.0 (1,356.3) million. Each new member of the Society contributes participation capital to
the Society based on number of residents. At 31 December 2014, the Society had 280 (278) members.

Governance principles

The Group is owned by Swedish municipalities and county councils. The Society is a cooperative venture with the principal purpose of providing members and their majority-owned companies access to cost-efficient and stable loan financing. All business operations are conducted within the Company, while the Society deals with matters concerning membership and ownership.

According to its Articles of Association, the Society shall not be operated with the purpose of generating profit. Once consolidation needs have been satisfied, all surpluses shall accrue to the members. The members themselves determine the focus of the operations and no individual member has any decisive influence in isolation. At the Annual General Meeting, each member has one vote.

Presented below are some of the principles that affect internal corporate governance.

Beyond these, the Board of Directors of the company has established principles, stances, limits and target figures in a number of steering documents and instructions.

Member consultations

To stimulate owner influence and dialogue, annual member consultations are conducted at which representatives of the Board of the Society discuss current issues with representatives of the membership in a smaller-scale forum. Member consultations represent important forums for the preparation of matters for resolution by the Annual General Meeting. Ahead of the 2014 Annual General Meeting, member consultations were held in 18 (19) locations around Sweden, with some 391 (330) participating politicians and officials.

Owner directives

The Board of Directors of the Society develops directives for the Company and these are set annually at the Annual General Meeting. The owner directives set out the framework of the operations assigned to the Company by the Society. The owner directives primarily include guidelines regarding risk levels, remuneration principles, principles for business travel and representation, financial knowledge, development of products and services, and for any special assignments set for the Company by the Society. The owner directives are set annually by the Annual General Meeting of the Company.

Targets for operations

The Kommuninvest Group’s overarching objective is to generate the greatest possible benefit for the members of the Society.

Among other measures, this shall be ach-ieved by maintaining a high proportion of satisfied customers, by accounting for a large proportion of members’ loan financing, by maintaining a high level of cost efficiency and having the financial strength to support the long-term focus of the operations. Follow-up on the targets is presented on page 5.

Remuneration principles

The Board of Directors of the Company sets the remuneration principles applicable within the Group, in accordance with the ownership directives. The Society has no salaried employees. Remunerations shall engender conditions to attract, retain and motivate employees so that operations can be conducted in an optimal manner. The basic principle is that remunerations and other terms of employment should be in-line with the market and should consist solely of fixed wages. No variable remunerations are paid. Wages are set taking into consideration the tasks involved and their degree of difficulty, responsibilities, educational requirements and how the employee fulfils the demands imposed and contributes to improvements in operations.

Annual General Meeting

The Annual General Meeting of the Society is the Group’s highest decision-making body. The Annual General Meeting of the Company is held in direct connection with the Annual General Meeting of the Society.

The 2014 Annual General Meeting was held on 10 April 2014 in Stockholm. At the Meeting, 156 (138) municipalities and county councils/regions were represented, corresponding to 56 (50) percent of the members. At the Annual General Meeting, each member has one vote. The resolutions adopted by the Meeting included:

• The first of two resolutions regarding amendments to the Articles of Association for the Society and its companies.

• Annual contribution commitments for 2014.

• Adoption of owner directives for Kommun- invest i Sverige AB, including guidelines for remuneration to the President and CEO, the Deputy CEO and other members of the Executive Management Team of Kommuninvest i Sverige AB.

• Rules of procedure for the work of the Election Committees.

• Rules of procedure for the work of the lay auditors.

Election Committees

There are two Election Committees within the Group; the Election Committee of the Society and the Election Committee of the Society’s companies. The Election Committees bear the ultimate responsibility for the preparation of appointment decisions through a structured and transparent process allowing the members to give their views on proposals and to submit their own proposals regarding appointments and associated issues, thereby establishing favourable conditions for well-founded decisions.

The Election Committee of the Society is elected by the Annual General Meeting based on a proposal submitted by the Board of Directors of the Society. The Election Committee of the companies owned by the Society shall represent the Board of Directors of the Society and consists of members elected by the Board from its own membership. The Board of Directors of the Society has resolved that its working committee shall act as the Election Committee.

The work of the Board of Directors

Board work is conducted in part by the Board of Directors of the Society, and, in part by the Board of Directors of the Company. The main principle is that the Board of Directors of the Society deals with membership and ownership issues, while the Board of Directors of the Company deals with issues involving business operations.

This means that issues concerning new members, withdrawal of members, possible exclusion from membership, guarantee issues, etc. are dealt with by the Board of Directors of the Society. The Board of Directors of the Company deals with financing issues, credit issues (such as limits and analyses), as well as other operational issues.

However, the connection between the two boards is strong, since certain issues concern both the Board of Directors of the Society as well as that of the Company. However, the Board of Directors of the Society, which represents the owners, has no direct right of determination over the Board of Directors of the Company. The Society’s control of the Board of Directors of the Company takes place only by means of resolutions by the Annual General Meeting or by owner directives adopted by the Annual General Meeting.

Working Committee of the Board of Directors of the Society

From among the members of the Board of Directors of the Society, a working Committee is appointed each year, including the Chairman of the Board, the Vice Chairman of the Board and at least one other Board Member. On assignment from the Board of Directors, the Working Committee is responsible for matters including the preparation of the work of the Board of Directors and for annually assessing the work of the President. The Working Committee also acts as the Election Committee of the Society’s companies in accordance with rules of procedure established by the Annual General Meeting. In addition, the Working Committee is tasked with meeting the external and lay auditors of the Society and its subsidiaries to inform itself of the focus and scope of the audit and the view taken of the Society and Group’s risks. The results of the Working Committee’s work are to be reported at Board meeting on an ongoing basis.

President

The President is responsible for the on-going administration of the Society in accordance with the Board’s guidelines and instructions. Since the Society’s owners are democratically governed organisations and the Society’s operations are socially beneficial in nature, the President’s responsibility for on-going administration shall be limited to on-going administrative matters that are not significant in terms of principles or otherwise of special significance for the Society. If, in a particular matter, it is unclear whether the right of determination lies with the Board of Directors or the President, the President shall allow the Board to consider the matter or, if it is not possible to await the position of the Board, he shall consult the Chairman of the Board.

According to the Economic Associations Act (Chapter 6, Section 6), the President is entitled, in certain instances, to undertake measures without the authorisation of the Board. For the reasons stated above, the President shall, in such instances observe very considerable restriction and always seek consultation with the Chairman of the Board.

Leadership assessment

In accordance with the regulations for financial companies under the supervision of Finansinspektionen (the Swedish Financial Supervisory Authority), the members of the Board of the Kommuninvest Cooperative Society and the President are assessed by Finansinspektionen.

Board members

Effective from the Annual General Meeting of 10 April 2014, the Board of Directors of the Kommuninvest Cooperative Society has consisted of Ann-Charlotte Stenkil (Chairman), Alf Egnerfors, (Vice Chairman), Carina Blank, Åsa Herbst, Margreth Johnsson, Elver Jonsson, Ewa-May Karlsson, Niklas Karlsson, Örjan Mossberg, Robert Mörk, Magnus Oscarsson, Jonas Ransgård, Roland Åkesson, Bert Öhlund and Lotta Öhlund. The members are presented on page 35.

Analysis and Finance Committee

The Board of Directors of the Society appoints an Analysis and Finance Committee. The committee is responsible for monitoring the financial status of the member municipalities and the development of the local government sector as a whole. It also has the task of preparing new member applications at the behest of the Board of Directors of the Society. In contrast to other committees in the Society, it is made up of officials. The reason for this is that the tasks call for extensive specialised economic expertise.

The committee’s brief states further that it shall represent different parts of the country, it shall have experience of different types of municipalities and it shall have knowledge of operations in the form of a public enterprise.

Remunerations

The Chairman received a fixed fee of SEK 100,000 and a variable fee of SEK 3,500 per meeting. The Vice Chairman received a fixed fee of SEK 50,000 and a variable fee of SEK 3,500 per meeting. Alongside the Chairman and Vice Chairman, two other members of the Board form the Society’s Working Committee and consequently receive an annual fixed fee of SEK 12,000 and a variable fee of SEK 3,500 per meeting. Other Board members received a fixed fee of SEK 6,000 and a variable fee of SEK 3,500 per meeting. Deputy members received a fixed fee of SEK 3,500 per meeting. All members receive a fixed fee of SEK 1,750 per meeting held by telephone.

Within the framework for fees to the Board of Directors set by the Annual General Meeting, fees of SEK 179,000 (205,000) were paid to the Chairman of the Board of Directors of the Society, Ann-Charlotte Stenkil, in 2014. The fee paid to the Vice Chairman of the Board of Directors, Alf Egnerfors, totalled SEK 127,000 (134,000).

Fees to the other members of the Board of Directors, including deputies, have been paid in accordance with the resolution by the Annual General Meeting and totalled SEK 646,000 (689,000) for 2014. The total fees paid to the members of the Board of Directors of the Society elected by the Annual General Meeting are determined by the Annual General Meeting and amounted to SEK 952,000 (1,027,000) for 2014.

Work of the Board of Directors in 2014

In 2014, the Board of Directors held five (five) ordinary meetings, no (one) extra meetings and one (one) inaugural meeting. Agendas and decisions have involved:

• New Articles of Association for the Society

• Plan for the Group’s build-up of capital

• Member consultation and policy design

• Owner directives

• Follow-up of -members

• Owner survey

• Matters associated with new regulations

• ICA

• Annual report and interim reports