On 15 April 2015 the Annual General Meeting of Topdanmark A/S was held in Tivoli Congress Center, Arni Magnussons Gade 2-4, 1577 Copenhagen

Transcription

1 Minutes of Topdanmark s AGM 15 April 2015

2 On 15 April 2015 the Annual General Meeting of Topdanmark A/S was held in Tivoli Congress Center, Arni Magnussons Gade 2-4, 1577 Copenhagen Søren Thorup Sørensen, Chairman of Topdanmark's Board of Directors, addressed a few words of welcome to the audience and informed them that according to Article 14(1) of the Articles of Association, Topdanmark's Board of Directors had appointed John Korsø Jensen, lawyer, as meeting chairman. The meeting chairman thanked the Board for the appointment and started out by informing the audience that, as in previous years, the AGM would be broadcast live on Topdanmark's website. The broadcast is saved on Topdanmark's website and will be available from 16 April Furthermore, the meeting chairman said that the press is admitted to Topdanmark's AGMs. This access does not entitle the press to take photos or to audio and video tape. However, in this specific case, after having obtained the acceptance of the meeting chairman in advance, the Board of Directors had exceptionally decided to allow Danmarks Radio (Danish Broadcasting Corporation) to broadcast the opening of the AGM and the very first part of the Chairman's speech. The meeting chairman said that the convening notice, which contained the agenda, had been submitted in accordance with Article 11 of the Articles of Association and legislation. A company announcement containing the agenda was published on 18 March On the same day the convening notice was published via the IT information system of the Danish Business Authority (Erhvervsstyrelsen). It was made available on the Company s website, and the Company sent an invitation informing of the time and place of the AGM to those shareholders who have informed Topdanmark that they want to receive its written invitations. The meeting chairman reported that those shareholders who had registered for the AGM had received an admission card and voting papers. Within three weeks of the AGM, the Annual Report, the convening notice, information of the total number of shares and voting rights on the date of the convening notice, those documents to be presented at the AGM, the agenda and the complete proposals as well as those forms to be used for voting by proxy or letter had been available on the Company's website. 2

3 As no shareholders objected to this, the meeting chairman noted that the AGM had been duly convened. In accordance with the Danish Companies Act and the Company's financial calendar, proposals desired by the shareholders to be transacted at the AGM are to be lodged in writing with the Board of Directors no later than six weeks before the date of the AGM. The meeting chairman reported that the Board of Directors had received no proposals from the shareholders before the expiry of this deadline. No shareholders had, by votes by letter, proxy forms or other, requested in advance a complete review of the voting results, cf. Section 101(5 and 6) of the Danish Companies Act. The meeting chairman reported that the total number of shares was 115,000,000, of which the Company s holding of own shares was 12,979,000. As the Company is not entitled to vote its own shares, the total number of votes of the Company was 102,021,000. Furthermore, the meeting chairman reported that 156 voting shareholders were present. Including proxies and postal votes received in advance, 49,065,500 shares were represented at the AGM, corresponding to 48.09% of the voting capital. The meeting chairman suggested that items I and II of the agenda were considered as one single item. There were no objections. Item I. Report on the Company s activities in the past year Item II. Presentation of the audited Annual Report signed by the Board of Directors and the Executive Board The Chairman of the Board of Directors reported on the Company's activities in the past year. The report is enclosed with the minutes as appendix 106. The Annual Report signed by the Board of Directors and the Executive Board was presented. The meeting chairman pointed out that that both the internal and external auditors had issued an unqualified opinion of the Annual Report. 3

4 The Annual Report is enclosed with the minutes as appendix 107. The meeting chairman gave the floor to Jonas Bhati, portfolio manager of ATP (Danish Labour Market Supplementary Pension), who thanked Topdanmark for another excellent year with an impressive combined ratio and return on shareholders' equity. It is highly value-creating for shareholders. Once more it is proposed to pay out the excellent profit to shareholders by way of share buy-back. Topdanmark's many years' transparent policy for distribution of earnings has been value-creating. The excellent profit was to a large extent due to Topdanmark's own efforts, but also helped along by the currently highly favourable insurance market. Jonas Bhati said that Tryg's future bonus programme is expected to ensure Tryg a competitive advantage over Topdanmark. He asked what measures Topdanmark will take to improve its competitive position as compared to Tryg in order that Topdanmark does not lose too much competitive power due to the bonus programme. Finally, Jonas Bhati thanked Michael Pram Rasmussen for the excellent results he had achieved during his time with Topdanmark. The Chairman said thank you for the kind words and that, in general, the Company does not expect to offer cheaper insurance policies as a consequence of the bonus models. Therefore, basically the competitive environment will remain unchanged even though Tryg introduces a bonus model. But bonus can improve customer loyalty. Bonus is nothing new in the Danish insurance market. For a number of years several mutual companies have used bonus models. During these years, Topdanmark has both taken and lost customers from/to these companies. Therefore, Topdanmark believes that bonus is not crucial in the competition for customers. Topdanmark also pays customer bonus on a minor insurance portfolio we own due to our collaboration with Nærbrand. It is not our experience that bonus improves the retention of customers or the writing of new business. Topdanmark believes that customers want full information about the price of their insurance policies in order to know their precise financial situation. Therefore, Topdanmark prefers to use a pricing structure which informs the customer of the precise price of the policy. We have no wish to offer customers the prospect of an unknown amount which depends on their claims trends and the remaining insurance business. We think it is difficult for customers to relate to this. Additionally, the calculation and payment of bonus every year require many administrative expenses. Topdanmark prefers to save these expenses, and instead to offer the customer a good price right away. Therefore, Topdanmark's measures towards Tryg's and other companies' bonus models is to continue the efforts to improve customer satisfaction on which it has successfully concentrated since

5 The meeting chairman gave the floor to Stig Haldan, who informed the audience that he was a shareholder, and due to his jobs in the financial sector he had followed Topdanmark since 1996, when Michael Pram Rasmussen joined the Company as CEO. Today he spoke as a private shareholder. Stig Haldan praised Topdanmark for its significant value creation for shareholders pointing out that less than 20 of the more than 1,500 companies quoted on the stock exchange in the Nordic countries have managed to create the same added value as Topdanmark. It is characteristic of all these companies that they are from the traditional industries and, like Topdanmark, have an extremely focused and disciplined strategy on organic growth focusing on customers and employees in order to create value for shareholders. It is important to maintain the balance between the stakeholders of the Company, for if the balance tips in favour of the shareholders, there have been several disagreeable examples of value creation having stopped. Stig Haldan commented on Topdanmark's ownership structure saying that a situation in which a shareholders' stake has such a size that, without de facto being main shareholder, the shareholder is able to dictate the development of the company, can be, but not necessarily is, problematic. It will only be problematic, if the shareholder uses his influence to the detriment of the other shareholders. Since, among other factors, share buy-back is typically the most tax-appropriate form of cash distribution, it was very important to Stig Haldan that Topdanmark maintains its announcements about distribution policy, and he asked the Board of Directors to comment on whether it has considered to change Topdanmark's distribution policy to full of partial payment of dividend or it intends to maintain the existing policy of paying out to shareholders all surplus liquidity by way of share buy-backs. The Chairman said thank you for the kind words, further stating that the Board of Directors does not plan to change the share buy-back policy pursued by Topdanmark since 1998 and appreciated by many shareholders, partly because it provides greater discipline in the Company, partly because this form of distribution is most tax-appropriate. The meeting chairman gave the floor to Torben Mejnertsen, The Danish Shareholders Association, who congratulated the Company on the excellent results in 2014, further saying that shareholders' primary interest is to achieve the best possible short and long-term return on their investment. In 2014 the price of Topdanmark's shares increased 40.2%, which is considerably more than the OMXCap, which increased only 17.6%. The price of the share has increased only 8.5% in 2015 so far, while the C20CAP has increased 26.6%. In 2015 the price increased significantly until 19 February, when Topdanmark published its announcement of the 2014 annual results and Michael Pram Rasmussen announced that he wanted to resign as member of Topdanmark's Board of 5

6 Directors. After that the price of the share has declined. Torben Mejnertsen commented on Topdanmark's ownership structure stating that on Sampo's website it says that Topdanmark, like Nordea, is part of the Sampo Group on the basis of a stake exceeding 30% respectively 21.2%. Topdanmark and Nordea are the only companies of the Sampo Group which are not 100% owned subsidiaries. If's/Sampo's de facto control was established as a fact by the EU Commission in If Topdanmark continues its share buy-back, If's stake will exceed 33% in 2015 or In this light Torben Mejnertsen asked the Board of Directors three questions: The Danish Financial Supervisory Authority (DFSA) has said that If can exceed the 33% ownership limit without being liable to make a bid provided that the increase is obtained by passivity due to Topdanmark's share buy-back. Formally, this is correct, but actually it is probably an evasion because, according to the decision made by the EU Commission, If de facto controls Topdanmark. What is the Board's attitude to this question, and will it recommend If to keep its stake under 33% or alternatively to meet the obligation to make a bid when the stakes exceeds 33%? Given a share capital of about DKK 100m and the current share price, the proposal made by the Board of Directors to buy own shares of up to 15% corresponds to a share buy-back exceeding DKK 3bn, which is significantly higher than Topdanmark's annual profit. Why does the Board think that such wide limits are needed for the share buy-back? The proposal made by the Board of Directors to reduce the share capital by 10m of own shares continues the practice of many years. If this practice is continued, you can calculate when Topdanmark is fully owned by If. How far does the Board think it can go before the shares lose their liquidity in the market, and when does it think that private investors should receive an offer to sell their shares? Torben Mejnertsen recommended that in the future new Board candidates are given the opportunity to introduce themselves personally prior to the election, and finally he thanked Michael Pram Rasmussen for his great efforts for the Company wishing him good luck in the future. The Chairman said thank you for the kind words to the Company and commented on the first question asked by The Danish Shareholders Association that as a company quoted on the stock exchange, Topdanmark is for sale on the stock exchange every single day. Topdanmark has no influence on who buys or sells its shares. Topdanmark concentrates on what we can influence, that is, running our insurance business as efficiently as possible. It continues to be Topdanmark's strategy to remain an independent and pre-eminent insurance group. In respect of If's possible obligation to make a bid, it is correct that If has submitted the question to the DFSA, the authority that regulates the area of stock exchange law and sets the guidelines for the interpretation of the 6

7 current rules. In reply to If's specific question, the DFSA said that a shareholder is only liable to make a bid if the shareholder obtains a controlling influence due to an active acquisition, i.e. typically purchase of shares. Basically, controlling influence means that a shareholder holds more than 33% of the votes in the company. In reply to the second question asked by The Danish Shareholders Association, the Chairman admitted that given the 2015 profit forecast, an authorisation to buy own shares allows up to 15% more scope than immediately needed by the Board of Directors. However, the authorisation corresponds to previous authorisations and allows the Board of Directors scope for following the existing, disciplined approach, in which an increase in earnings results in in an increase in share buy-back. For example, in 2014 results, and consequently also the share buy-back, increased DKK 550m. In reply to the third question asked by The Danish Shareholders Association, the Chairman said that even though theoretically Topdanmark's share buy-back will ultimately result in a higher stake in Topdanmark for a shareholder who does not participate in the share buy-back and omits to sell his share, we believe, however, that Topdanmark is far from the time when there is no longer sufficient liquidity in the share due to the share buy-back. Topdanmark's buy-back alone represents a modest share of the shares in circulation. Therefore, the Board of Directors believes that the scenario outlined by he Danish Shareholders Association is not a current problem. There were no further questions or comments on the report from the audience, and the meeting chairman established that the Chairman's report had been noted. Item III. Adoption of the Annual Report and decision on the appropriation of profits according to the financial statements as adopted The meeting chairman reported that post-tax profit was DKK 1,558m as compared to DKK 1,468m the previous year. The Board of Directors recommended that, as in previous years, no dividends be paid to shareholders for the 2014 financial year, but that instead a reduction in capital be implemented given the buy-back of own shares. 7

8 The meeting chairman gave the floor to Ole Mielby, who attended the AGM by proxy representing Torben Wilken, a shareholder. Ole Mielby had been pleased to note that there were no intentions of discharging the directors from their obligations and referred to a newly published book "Det store Containerkup" ( The big container coup) dealing with a set of cases regarding a number of container investments. Ole Mielby considered Topdanmark's behavior in respect of the container cases to be unacceptable and asked the Board of Directors to comment on it. The meeting chairman said that Ole Mielby's question did not relate to the adoption of the Annual Report, but gave the floor to the Chairman of the Board of Directors, who informed the audience that the container cases had been discussed at several previous AGMs. Over the years many assertions have been made regarding these cases. In order to settle all the questions once for all Topdanmark filed a lawsuit against five investors. The City Court of Court of Copenhagen heard all the questions raised. In 2004 the City Court of Copenhagen agreed with Topdanmark in all the questions. The High Court of Eastern Denmark upheld this decision in The Chairman had no further comments on the container cases. The meeting chairman informed the audience that, given the proxies and votes by letter received in advance, the adoption of the Annual Report was supported by at least 97.41% of the voting capital represented at the General Meeting.No one objected to the Annual Report or the recommendation made by the Board of Directors not to pay dividends, and no one requested a complete review of the voting results. The meeting chairman noted that the Annual Report and the recommendation made by the Board of Directors not to pay dividends for the 2014 financial year was adopted with 49,026,260 votes in favour and 25,800 votes against. Item IV. Any proposals submitted by the Board of Directors or the shareholders. Item IVA. Proposal for reduction in share capital The Board of Directors proposed that the share capital be reduced by 10,000,000 of own shares of DKK 1 each (with a total nominal value of DKK 10,000,000), with subsequent cancellation of these shares. Pursuant to Section 188(1) of the Danish Companies Act, it was informed that the reduction in capital would be effected by cancelling own shares previously acquired, i.e. a capital reduction to be paid to the capital owners. The reduction in capital will be at a price of DKK per share, 8

9 corresponding to the average price at which the shares. Consequently, a total of DKK 1,698,926,935 will be transferred. The meeting chairman reported that the adoption of the proposal was conditional upon the affirmative votes of two thirds of both the votes cast and the voting capital represented at the General Meeting. After the expiry of the deadline for creditors to file their claims and the implementation of the reduction in capital, Article 3(1) of the Articles of Association will be amended to read as follows: "The share capital of the Company amounts to DKK 105,000,000 and is fully paid up." Asked by Bo Jacoby, a shareholder, the Chairman answered that the share price had been rounded to two decimal places. This explains why it is not possible to immediately refind the transferred amount of DKK 1,698,926,935 by multiplying the share price by the number of shares reduced. The meeting chairman informed the audience that, given the proxies and votes by letter received in advance, the adoption of the proposal was supported by at least 97.4% of the voting capital represented at the General Meeting. There were no objections to the proposal, and no one requested a complete review of the voting result. The meeting chairman noted that the proposal had been adopted with 49,018,470 votes for and 10,940 votes against. Item IVB. Proposal for authorisation to buy own shares The Board of Directors proposed that the Board of Directors be authorised to acquire own shares, until 15 April 2020, for the purpose of ownership or security. The total of own shares held by the Company and its subsidiaries must not exceed 15% of the share capital. The shares shall be acquired at a minimum price of DKK 1.05 per share of DKK 1 each and a maximum price of the market price plus 10%. The meeting chairman informed the audience that the proposal was based on Topdanmark's continued opportunity to acquire own shares due to, for example, Topdanmark's share buy-back programme, as is the case for other quoted companies. The Danish Companies Act allows the AGM to grant authorisation to buy back own shares for up to five years. Last time when the AGM granted authorisation was in This authorisation expires this year. The Danish Companies Act sets no upper limit for a Company's holding of own shares, but the Act requires that the 9

10 authorisation granted by the AGM states, among other things, the highest value allowed for the own capital shares. The proposal made the Board of Directors is identical with the authorisation which expires now. At previous AGM's the Board of Directors has been authorised to buy own shares. The meeting chairman reported that the adoption of the proposal required a simple majority of votes. The meeting chairman informed the audience that, given the proxies and votes by letter received in advance, the adoption of the proposal was supported by at least % of the voting capital represented at the General Meeting. There were no objections to the proposal, and no one requested a complete review of the voting result. The meeting chairman noted that the proposal had been adopted with 45,174,184 votes for and 3,701,445 votes against. Item IVC. Proposal for remuneration of the Board of Directors The Board of Directors proposed that the ordinary basic remuneration to be paid to the Board of Directors be increased from the existing DKK 325,000 to DKK 350,000 with effect from the financial year 2015 The meeting chairman referred to the Chairman's speech, in which the Chairman gave a reason for the proposal, and reported that the adoption of the proposal required a simple majority of votes. The meeting chairman informed the audience that, given the proxies and votes by letter received in advance, the adoption of the proposal was supported by at least % of the voting capital represented at the General Meeting. There were no objections to the proposal, and no one requested a complete review of the voting result. The meeting chairman noted that the proposal had been adopted with 48,962,725 votes for and 66,258 votes against. Item V. Election of members to the Board of Directors The six existing Board members are up for re-election. Michael Pram Rasmussen is not standing for re-election. The Board proposed election of Bjarne Graven Larsen as a new Board member. The Board proposed re-election of the other members of the Board. 10

11 CVs containing detailed information on each Board candidate's background, qualifications, etc. are available in the folder distributed prior to this AGM and have also been available on the Company's website. There were no comments on the proposal made by the Board of Directors and no one requested a complete review of the voting result. The meeting chairman noted that consequently the nominated candidates had been elected with the votes of: A. Anders Colding Friis 48,572,638 B. Bjarne Graven Larsen 48,908,547 C. Torbjörn Magnusson 48,123,787 D. Birgitte Nielsen 48,861,966 E. Annette Sadolin 48,860,206 F. Søren Thorup Sørensen 48,522,404 Item VI. Election of one state-authorised public accountant to serve as auditor The Board of Directors proposed re-election of Deloitte Statsautoriseret Revisionspartnerselskab. There were no comments on the proposal made by the Board of Directors and no one requested a complete review of the voting result. The meeting chairman noted that Deloitte had been re-elected with 48,706,648 votes. Item VII. Any other business Under this item of the agenda the meeting chairman opened a general debate stressing that only matters relevant for the AGM could be considered. Questions on specific insurance matters could best be considered by directly contacting the Company. The meeting chairman gave the floor to Søren Jarner, previous employee of Topdanmark, now retiree. Søren Jarner thanked Michael Pram Rasmussen for excellent co-operation Nobody else wished to speak, and the Chairman thanked the meeting chairman for his smooth running of the AGM and the audience for their attendance. 11

12 This completed the agenda and the AGM was closed. Chairman of the meeting: John Korsø Jensen 12

13 Topdanmark A/S Borupvang Ballerup Denmark Tel Reg.No topdanmark@topdanmark.dk