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Corporate Governance

KMD's Board of Directors and Executive Board are responsible for ensuring that the Group’s management structure and control systems are appropriate and function satisfactorily.

The basis for the management’s work includes the Danish Companies Act, the Danish Financial Statements Act, the company’s articles of association, and generally accepted practice for companies of the same size as KMD.

Furthermore, the Management’s review has been drawn up in accordance with the guidelines of the Danish Venture Capital and Private Equity Association: Active ownership and transparency in private equity funds (see www.dvca.dk).

Ownership and capital structure
At 31 December 2009 the entire share capital of DKK 240 million (240,000 shares) in KMD A/S was owned by the parent company KMD Holding A/S, which is 100% owned by KMD Equity Holding A/S. KMD Equity Holding A/S is owned 83.6% by EQT and 14.7% by ATP. At 31 December 2009 the management of KMD and other shareholders owned 1.7% of the share capital. The company structure is illustrated below. The share capital of KMD A/S is not divided into share classes.

In connection with the acquisition of the share capital in KMD A/S, loans have been taken out in 2009 with FIH, Nykredit, Danske Bank, Nordea and ATP. The loans were taken out on market terms.

General meeting
The Company's articles of association authorise the Board of Directors to take decisions on distribution of extraordinary dividends where the Company's and the Group's financial situation so permit.

The work of the Board of Directors
The Board of Directors held nine board meetings in 2009, including a strategy seminar to follow up on KMD's corporate strategy and action plans. A supervisory board committee has been appointed to prepare board meetings and discuss current topics, and comprises the Chairman of the Board of Directors, EQT’s general partner and the CEO. In addition, the Executive Board reports to the Board of Directors on the Group’s financial development on a monthly basis.

Remuneration of the Board of Directors and management
A total of DKK 18.9 million was paid in remuneration to the Board of Directors and management in the financial year.

Executive Board	DKK 17.7m
Board of Directors	DKK 1.2m
Total	DKK 18.9m

Remuneration to the Executive Board and Board of Directors is discussed in [note 2] to the income statement.

Corporate Governance and Compliance
KMD works with Corporate Governance on several fronts. In 2009 KMD introduced a special Compliance function, which will ensure that KMD acts in accordance with the competition rules. More than 450 employees underwent compliance training in 2009, and follow-up courses and training for new employees are being conducted on an ongoing basis.

KMD also works on an ongoing basis with IT security policies and programmes that support KMD's target of secure and correct data processing.

KMD will step up these efforts in 2010 by introducing a programme for Corporate Governance and Compliance in the Group based on the applicable recommendations for good corporate governance from the Committee for Good Corporate Governance. The Corporate Governance programme is intended to be accompanied by a number of Corporate Compliance initiatives.