Corporate Governance

1. Cencorp Group

Cencorp Corporation (“Cencorp”) is a publicly quoted Finnish limited liability company whose corporate governance is subject to the company’s Articles of Association, the Finnish Companies Act and other applicable legislation. Furthermore, the company observes the Corporate Governance Recommendation for Listed Companies issued by the OMX Nordic Exchanges and the Finnish Central Chamber of Commerce and the Confederation of Finnish Industry and Employers, as well as OMX insider regulations.

Cencorp Group comprises the parent company Cencorp Corporation, a public limited company registered in Finland with its registered office at Lohja, as well as six foreign and four Finnish subsidiaries.

The bodies exercising the ultimate decision-making power within Cencorp include the General Meeting of Shareholders, Board of Directors and Chief Executive Officer.

2. General Meeting of Shareholders

The Annual General Meeting shall be held by the end of June each year on a date determined by the Board of Directors. An Extraordinary General Meeting shall be held whenever deemed necessary by the Board of Directors or required by law. General Meetings of Shareholders shall be held at the company’s place of domicile, Lohja, at Virkkala or, upon the decision of the Board of Directors, in Helsinki.

Notice to convene a General Meeting must be published no earlier than three calendar months and no later than seventeen days before the meeting in one national Finnish-language daily newspaper determined by the Board of Directors. Furthermore, said notice must be published as a stock exchange release and placed on the company’s Web pages.

At the Annual General Meeting, the following shall be presented:

• the financial statements
• the auditor’s report

At the Annual General Meeting, the following shall be decided upon:

• adoption of the financial statements
• measures called for by the profit reported on the adopted balance sheet
• release from their liabilities for the members of the Board of Directors and the Chief Executive Officer
• number of members of the Board of Directors
• remuneration and travel expenses of the members of the Board of Directors

At the Annual General Meeting, the following shall be elected:

• members of the Board of Directors  and if needed their substitutes
• auditor and if needed his/her substitute

Furthermore, at the Annual General Meeting, the following shall be dealt with:

• any other matters specified in the notice to convene the meeting.

3. Board of Directors

3.1. Tasks and Responsibilities

The Board of Directors attends to the company’s management and is responsible for duly arranging the company’s operations. The Board of Directors supervises the company’s operations and management and makes decisions on any significant matters regarding the company’s strategy, organization, financing and investments. The tasks and responsibilities of the Board of Directors are primarily determined on the basis of the Articles of Association and the Finnish Companies Act. The Board of Directors confirms its rules of procedure each year, including provisions on meeting practices and the tasks of the Board of Directors. Cencorp Group’s Vice President of Legal Affairs acts as the secretary of Board meetings. Furthermore, the company’s Chief Executive Officer and Chief Financial Officer are present at Board meetings.

According to the rules of procedure, the Board of Directors’ tasks include:

• Attending to any obligatory tasks imposed on the Board of Directors by the Companies Act, Articles of Association or elsewhere
• Approving the company’s strategy and goals
• Approving the company’s values and ethical principles
• Approving the company’s management system and organizational structure
• Approving the operating plan and any substantial amendments to it
• Approving corporate procedures for internal control and risk management and supervising compliance with these
• Approving interim reports, financial statements and the operating report
• Attending to communication associated with control information on the financial market
• Approving the company’s financing policy
• Attending to the development of the company’s market value and defining the dividend policy
• Approving any acquisitions and divestitures of companies and business operations, as well as any substantial individual investments and commitments
• Approving the company’s incentive scheme and policy
• Appointing and dismissing the Chief Executive Officer and deciding on the applicable contract terms and remuneration
• Appointing a deputy to the Chief Executive Officer
• Deciding on any changes to the Group structure
• Attending to the development of the company’s Corporate Governance procedures
• Conducting annual assessments of its own operations
• Conducting assessments of the CEO’s operations and providing feedback

According to the Articles of Association, Cencorp’s Board of Directors comprises a minimum of three and a maximum of six regular members. The Board of Directors is appointed by the General Meeting of Shareholders for one term at a time. Each member’s term of office starts upon the closing of the General Meeting at which the member was elected and ends upon the closing of the Annual General Meeting following the election. The Articles of Association do not impose any restrictions on the power of the General Meeting to appoint members to the Board. The Board of Directors appoints a Chair and Vice-Chair from among its members and constitutes a quorum when more than one-half of the members are present.

3.2. Members of the Board of Directors

Cencorp’s Board of Directors currently comprises four members: Turo Levänen (Chairman), Ari Anttonen (Vice-Chairman), Heikki Kiesi (Member) and Sauli Kiuru (Member). Board of Cencorp has evaluated its independence. Of the Board members, Mr Turo Levänen and Mr Ari Anttonen are independent of the Company and its significant shareholders

According to Nomination and Compensation Committee four board members is enough taking into consideration the extent of the company’s business. General meeting has decided the amount of board members according to proposal of Nomination and Compensation Committee. Amount of board members will be reviewed annually in General meeting

Shares and options held by members of the Board

3.3. Remuneration of the Board of Directors

The General Meeting of Shareholders decides on remuneration paid to the members of the Board. In 2008 the Members of the Board receive 1500 euros per month and the Chairman receives 2000 euros per month. Furthermore, travelling expenses are covered according to travelling guidelines of the company.

During 2007 the board of Cencorp had 18 meetings. Average participate percentage of the board members was approx. 95%.

3.4. Board Committees

3.4.1. Nomination and Compensation Committee

The Board of Directors has appointed a nomination and compensation committee from among its members for the purpose of dealing with the compensation and benefits of corporate management, finding potential successors to Members of the Board and preparing the appropriate proposals to the General Meeting of Shareholders regarding the composition and remuneration of the Board of Directors for the next term. Furthermore, the committee’s tasks include assessment of the company’s compensation and incentive scheme and its development.

The nomination and compensation committee’s term of office is equal to that of the Board of Directors. The member of the committee in 2008 include Turo Levänen and Ari Anttonen, the latter serving as the Chairman of the committee. Nomination and Compensation Committee had two meetings in 2008.