Close
Search
Searching...
No results
    Corporate Governance
    Code

    Code

    1 Preamble

    1 Preamble

    The German Corporate Governance Code (the "Code") sets out substantive statutory regulations for the management and supervision of German listed companies (corporate governance) and includes internationally and nationally recognised standards for good and responsible corporate governance. The Code is designed to make the German corporate governance system transparent and understandable. Its purpose is to strengthen the trust of international and national investors, customers, employees and the public in the management and supervision of listed German companies.

    The Code highlights the duty of the Executive Board and Supervisory Board to ensure the continued existence of the enterprise and its sustainable added value in accordance with the principles of the social market economy (the interests of the enterprise). These principles demand that its conduct is not only legal but also ethically sound and responsible (principle of the honourable businessman).

    Institutional investors are of particular importance for the enterprise. They are expected to exercise their ownership rights actively and responsibly on the basis of transparent principles that have due regard for sustainability.

    A dual board system is prescribed by law for German stock corporations.

    The Executive Board is responsible for managing the enterprise. The members of the Executive Board are jointly accountable for the management of the enterprise. The chairperson of the Executive Board coordinates the work of the members of the Executive Board.

    The Supervisory Board appoints, supervises and advises the Executive Board and is directly involved in decisions which are of fundamental importance to the enterprise. The chairperson of the Supervisory Board coordinates the work of the Supervisory Board.

    The members of the Supervisory Board are elected by the shareholders at the general meeting. In enterprises with more than 500 or 2,000 employees in Germany, employees are also represented on the Supervisory Board, in which case they comprise one third or one half of the board respectively. In enterprises with more than 2,000 employees, the chairperson of the Supervisory Board, who is almost always a representative of the shareholders, has a casting second vote in the adoption of resolutions. The representatives elected by the shareholders and the representatives of the employees have an equal obligation to act in the interests of the enterprise.

    The European Company (SE) offers businesses in Germany the option of the internationally recognised system of governance by a single management body (board of directors). The form that co-determination takes in the SE is generally established by an agreement between the enterprise’s management and its employees. The employees in EU member states are included.

    The accounting standards of German enterprises are based on the "true and fair view" principle and are to represent a true and fair view of the net assets, financial position and results of operations of the enterprise.

    Recommendations of the Code are marked in the text by the use of the word "shall". Companies can deviate from these recommendations, but must if they do so disclose such deviations annually and explain the reasons for them ("comply or explain"). This makes it possible for companies to take sector and enterprise-specific requirements into account. A justified and reasoned deviation from a Code recommendation can be in the interests of good corporate governance. The Code thereby helps make the German corporate constitution more flexible and more self-regulating. The Code also contains suggestions which can be deviated from without disclosure; for this the Code uses the term "should". The remaining passages of the Code not marked by these terms relate to descriptions of statutory regulations and explanations.

    In provisions of the Code that affect not only the company itself but also its group companies, the term "enterprise" is used instead of "company".

    The Code primarily addresses listed companies and companies with access to capital markets within the meaning of section 161 (1) sentence 2 of the German Stock Corporation Act. It is recommended that companies without a capital market focus nevertheless also observe the Code.

    For the corporate governance of listed credit institutions and insurance companies, the respective regulatory laws provide for specific characteristics which are not reflected in the Code.

    The Code is normally checked once a year in the light of national and international developments and is amended where necessary.

    2 Shareholders and the General Meeting

     

    2 Shareholders and the General Meeting

    2.1 Shareholders

    2.1.1 
    Shareholders pursue their rights before or during the general meeting as provided for in the Articles of Association and by law and exercise their voting right there.

    2.1.2 
    Each share confers one vote in principle. There are no shares with multiple voting rights or preferential voting rights (golden shares), nor are there maximum voting rights.

    2.2 General Meeting

    2.2.1 
    The Executive Board presents the annual financial statements, the management report, the consolidated financial statements and the consolidated management report to the general meeting. The general meeting decides on the appropriation of the net income and on the discharge of the Executive Board and the Supervisory Board, and usually elects the shareholders' representatives to the Supervisory Board and the auditor.

    The general meeting also decides on the content of the Articles of Association, in particular the object of the enterprise and significant structural measures such as intercompany agreements and transformations, the issuance of new shares, convertible bonds or bonds with warrants, and the authorisation of to acquire treasury stock. The general meeting can decide on the approval of the remuneration system for members of the Executive Board.

    2.2.2 
    In the event that new shares are issued, shareholders are in principle entitled to subscribe in the proportion of their share of the registered share capital.

    2.2.3 
    Each shareholder is entitled to participate in the general meeting, to take the floor on matters on the agenda and to submit questions and proposals relating to the matters in hand.

    2.2.4 
    The chair of the meeting ensures that the items on the agenda of the general meeting are dealt with swiftly. The chair should be guided by the fact that an ordinary general meeting should not last more than 4 to 6 hours.

    2.3 Invitation to the General Meeting, Proxies

    2.3.1 
    The general meeting is to be convened by the Executive Board at least once a year, stating the agenda. Minority shareholders are entitled to demand that a general meeting be convened and items added to the agenda. The announcement of the general meeting and the reports and documents required by law for the general meeting, including the annual report, are to be published on the company's website together with the agenda for easy access by the shareholders. 

    2.3.2
    The company shall facilitate shareholders' exercise of their voting rights in person and by proxy. The Executive Board shall arrange the appointment of a proxy to exercise shareholders' voting rights in accordance with instructions. This representative should also be available for contact during the general meeting.

    The proxy for the exercise of voting rights in accordance with instructions is only available until the start of the general meeting of Krones AG.

    2.3.3
    The company should make it possible for shareholders to follow the general meeting using modern means of communication (e.g. the internet).

    The general meeting is not at present transmitted via the internet.

    3 Co-operation between the executive board and the supervisory board

     

    3 Co-operation between the Executive Board and the Supervisory Board

    3.1 
    The Executive Board and the Supervisory Board work in close cooperation for the good of the enterprise.

    3.2 
    The Executive Board coordinates the enterprise's strategic orientation with the Supervisory Board and discusses the progress of strategy implementation with the Supervisory Board at regular intervals.

    3.3 
    For transactions of fundamental importance, the Articles of Association or the Supervisory Board - the latter in individual cases as well, where appropriate - stipulate reservations of consent for the Supervisory Board. Such transactions include decisions or measures which fundamentally affect the enterprise’s net assets, financial position or results of operations.

    3.4 
    The Executive Board is responsible for keeping the Supervisory Board informed. However, the Supervisory Board must in turn ensure that it is adequately informed. For this purpose, the Supervisory Board shall specify the Executive Board's duties of information and reporting.

    The Executive Board informs the Supervisory Board regularly, without delay and comprehensively of all issues of relevance to the enterprise with regard to strategy, planning, business developments, the risk situation, risk management and compliance. It responds to deviations in business development from previously formulated plans and targets, stating the reasons.

    The Executive Board's reports to the Supervisory Board are normally to be submitted in text form. Documents required for decisions are to be sent to the members of the Supervisory Board as early as possible before the meeting.

    3.5 
    Good corporate governance requires open discussion between the Executive Board and Supervisory Board as well as within the Executive Board and within the Supervisory Board. This requires complete confidentiality.

    All board members are responsible for ensuring that the staff they call in for support observe the duty of confidentiality in the same manner.

    3.6 
    On Supervisory Boards with co-determination, shareholder and employee representatives can prepare for the Supervisory Board meetings separately, if appropriate with members of the Executive Board.

    If necessary, the Supervisory Board shall meet without the Executive Board.

    3.7 
    In the event of a takeover offer, the Executive Board and Supervisory Board of the target company must submit a statement of their position on the offer, indicating their reasons, in order to allow shareholders to make an informed decision on the offer.

    Following the announcement of a takeover offer and until such time as the result is announced, the Executive Board may not take any actions that could prevent the offer from being successful unless such actions are permitted under statutory regulations. In making their decisions, the Executive Board and Supervisory Board are bound to act in the best interests of the shareholders and of the enterprise.

    In the event of a takeover offer, the Executive Board should convene an extraordinary general meeting at which shareholders discuss the takeover offer and, if appropriate, decide on corporate actions.

    3.8
    The Executive Board and the Supervisory Board shall comply with the rules of proper corporate governance. If they violate the due care and diligence of a prudent and conscientious director or Supervisory Board member, they will be liable to the company for damages. In the case of business decisions, duties are not deemed to have been breached if the member of the Executive Board or Supervisory Board could reasonably have assumed, on the basis of reasonable information, that he/she was acting in the best interests of the company (business judgement rule).

    If the company concludes a D&O insurance policy for the Executive Board and Supervisory Board, an excess of at least 10% of the loss up to at least one and a half times the fixed annual remuneration of the board member is to be agreed.

    A suitable excess shall be agreed in D&O insurance for the Supervisory Board.

    There is currently no agreed excess in a D&O insurance policy concluded for the Supervisory Board.

    A specific excess for the insured parties has not been agreed because the Supervisory Board carries out its duties correctly at all times regardless of any excess.

    3.9 
    The approval of the Supervisory Board is required before the enterprise grants loans to members of the Executive Board or Supervisory Board or their relatives.

    3.10 
    The Executive Board and Supervisory Board shall report on corporate governance annually (corporate governance report) and shall publish this report with the corporate governance statement. The report should also respond to suggestions regarding the Code The company shall keep previous declarations of conformity with the Code available on its website for five years.

    4 Executive board

    4 Executive Board

    4.1 Duties and Responsibilities

    4.1.1 
    The Executive Board is responsible for managing the enterprise in the interests of the enterprise, i.e. having due regard for the needs of the shareholders, its employees and all other groups associated with the enterprise (stakeholders), with the aim of generating sustainable value.

    4.1.2 
    The Executive Board develops the enterprise's strategy, agrees this strategy with the Supervisory Board and ensures its implementation.

    4.1.3
    The Executive Board must ensure that all statutory provisions and the enterprise’s internal guidelines are adhered to and works to ensure their observance by group enterprises (compliance). It shall take reasonable measures commensurate with the risk situation of the enterprise (Compliance Management System) and publish its underlying principles. Employees shall be given suitable opportunity to report violations of law in the enterprise in a protected manner; third parties shall also be given this opportunity.

    There is no anonymous whistleblower system in place at present.

    A dedicated system allowing employees and external third parties to report violations of law in the enterprise anonymously is being developed and is to be introduced in the enterprise soon.

    4.1.4 
    The Executive Board ensures appropriate risk management and risk controlling in the enterprise.

    4.1.5 
    The Executive Board shall consider diversity when filling management posts within the enterprise, in particular striving for reasonable female representation. The Executive Board defines targets for the proportion of women in both management levels below the Executive Board.

    4.2 Composition and Remuneration

    4.2.1
    The Executive Board shall be comprised of several persons and have a chairperson or spokesperson. Rules of procedure shall govern the work of the Executive Board, in particular the allocation of duties to individual Executive Board members, matters reserved for the full Executive Board and the required majority for Executive Board resolutions (unanimity or majority decision).

    The rules of procedure for the Executive Board are set out in the Articles of Association of KRONES AG. These contain detailed instructions governing the work of the Executive Board. Separate written rules of procedure have therefore not to date been drawn up.

    4.2.2 
    The total remuneration of the individual Executive Board members is set by the full Supervisory Board. If there is a committee that deals with Executive Board contracts, that committee submits its proposals to the full Supervisory Board. The full Supervisory Board decides on and regularly reviews the remuneration system for the Executive Board.

    The total remuneration for individual members of the Executive Board is set by the full Supervisory Board having due regard for any group emoluments and on the basis of a performance appraisal. Criteria for determining the appropriateness of the remuneration include the duties of the specific member of the Executive Board, his/her performance, the economic situation, the success and prospects of the enterprise and whether the sum is comparable with that at similar enterprises and in the light of the remuneration structure otherwise applied in the company. The Supervisory Board shall consider Executive Board remuneration in the light of the remuneration of the upper management tier and of the workforce as a whole in general and over time; the Supervisory Board decides how the upper management tier and relevant workforce are to be defined for the purposes of the comparison.

    If the Supervisory Board commissions a remuneration expert to assess whether the remuneration is reasonable, it must be ensured that they are independent of the Executive Board and the enterprise.

    4.2.3 
    The total remuneration of the Executive Board members comprises the monetary remuneration elements, pension commitments, other guarantees, especially in the event of termination of employment, fringe benefits of all kinds and benefits from third parties guaranteed or granted in the financial year with regard to Executive Board activities.

    The remuneration structure is to be oriented to sustainable corporate development. The monetary elements shall comprise a fixed salary and variable components. Variable components are in principle measured across more than one year and shall essentially be forward-looking. Both positive and negative developments shall be reflected in the variable components. All components of the remuneration must be appropriate both individually and in the aggregate and may in particular not result in exposure to unreasonable risks. The remuneration shall comply with set upper limits both in the aggregate and for the variable components. The variable components shall be based on detailed and relevant comparison parameters. The retroactive modification of the performance targets or the comparison parameters is excluded. Multi-year variable components should not be paid out early.

    In the case of pension commitments, the Supervisory Board shall define the target ratio of pension payments to pay – including after the end of membership of the Executive Board – and the resulting annual and long-term costs of this for the enterprise.

    In concluding Executive Board contracts, care should be taken to ensure that payments including fringe benefits made to an Executive Board member upon the early termination of his or her contract do not exceed the total of two years' remuneration (severance payment cap) and cover no more than the remaining term of the contract. No payments are made to a member of the Executive Board whose contract is terminated for good cause. The severance payment cap should be calculated on the basis of the total remuneration for the past full financial year and if appropriate also the expected total remuneration for the current financial year.

    Payments promised in the event of early termination of an Executive Board member's contract due to a change of control should not exceed 150% of the severance payment cap.

    The chairperson of the Supervisory Board shall outline the salient points of the remuneration system once and subsequently any changes thereto to the general meeting.

    4.2.4 
    The total remuneration of each Executive Board member is published alongside his or her name, broken down into fixed and variable components. The same applies to benefits that have been guaranteed to an Executive Board member for the early or contractual termination of his/her Executive Board activities or that have been altered during the financial year. The remuneration is not published if the general meeting passes a resolution to this effect with a two-thirds majority.

    4.2.5
    The remuneration is published in the notes to the financial statements or in the management report. A remuneration report in the management report sets out the salient aspects of the remuneration system for the members of the Executive Board. The report shall be clear and easily understandable. 

    The remuneration report shall also include information on the nature of the fringe benefits provided by the company. 

    The remuneration report shall also disclose for each member of the Executive Board:

    • the payments including fringe benefits granted for the year under report and, in the case of variable components, the possible maximum and minimum remuneration as well;
    • the total received for the year under report, comprising fixed salary, short-term variable remuneration and long-term variable remuneration, with a breakdown by year of receipt;
    • the costs in or for the year under report for retirement pensions and any other pension benefits.

    The model tables in the appendix shall be used for this information.

    In addition to ambiguities in the interpretation, there are also doubts whether the additional use of model tables promotes the clarity and general comprehensibility of the remuneration report that are desired by the enterprise in compliance with accounting requirements.

    4.3 Conflicts of Interest

    4.3.1 
    Members of the Executive Board have an obligation to act in the interests of the enterprise. They must not pursue personal interests in their decisions, are subject to an extensive restraint on competition during their activities for the enterprise and must not use business opportunities intended for the enterprise for themselves.

    4.3.2 
    Members of the Executive Board and employees may not, in connection with their activities, demand or accept unfair advantages from third parties either for themselves or for other persons, nor may they grant third parties unfair advantages.

    4.3.3 
    Each member of the Executive Board shall disclose conflicts of interest to the Supervisory Board without delay and inform the other members of the Executive Board thereof. Any and all transactions between the enterprise on the one hand and the members of the Executive Board or persons or enterprises associated with them on the other must comply with accepted industry standards. The Supervisory Board represents the company in transactions with members of the Executive Board. Significant transactions with persons or enterprises associated with a member of the Executive Board may only be executed with the consent of the Supervisory Board.

    4.3.4 
    Members of the Executive Board shall only take on ancillary activities, especially Supervisory Board appointments outside the enterprise, with the approval of the Supervisory Board.

    5 Supervisory board

    5 Supervisory Board

    5.1 Duties and Responsibilities

    5.1.1 
    It is the duty of the Supervisory Board to regularly advise and supervise the Executive Board in the management of the enterprise. The Supervisory Board is to be involved in decisions of fundamental importance to the enterprise.

    5.1.2 
    The Supervisory Board appoints and dismisses the members of the Executive Board. The Executive Board shall also consider diversity when appointing the Executive Board members. The Supervisory Board defines targets for the proportion of women in the Executive Board. Together with the Executive Board, the Supervisory Board shall ensure long-term succession planning. The Supervisory Board can delegate to committees preparation for the appointment of Executive Board members and the negotiation of the terms and conditions of an employment contract, including remuneration.

    The maximum possible appointment period of five years should not be the standard term for the first contract. Only under special circumstances may a member be re-appointed earlier than one year before the end of the term of office, with simultaneous cancellation of the current term of office. An age limit for members of the Executive Board shall be defined.

    5.1.3 
    The Supervisory Board shall issue rules of procedure for its work.

    5.2 Duties and Powers of the Chairperson of the Supervisory Board 

    The chairperson of the Supervisory Board is elected by the Supervisory Board from among its members. He or she coordinates the work of the Supervisory Board, chair its meetings and attends to the affairs of the Supervisory Board in external relations.

    The chairperson of the Supervisory Board should be willing to conduct discussions with investors to a reasonable extent on issues specific to the Supervisory Board.

    Between meetings, the chairperson of the Supervisory Board shall maintain regular contact with the Executive Board, in particular with the chairperson or spokesperson thereof, and discuss with him or her issues of strategy, planning, business development, risk, risk management and compliance for the enterprise. The chairperson of the Supervisory Board will be informed without delay by the chairperson or spokesperson of the Executive Board of important events of significance for the assessment of the enterprise's situation or development or for the management of the enterprise. The chairperson of the Supervisory Board must then inform the Supervisory Board and, if required, convene an extraordinary meeting of the Supervisory Board.

    5.3 Formation of Committees

    5.3.1 
    The Supervisory Board shall form professionally qualified committees according to the enterprise's specific circumstances and the number of employees. Each committee chairperson reports regularly to the Supervisory Board on the work of that committee.

    5.3.2 
    The Supervisory Board shall set up an audit committee which - unless another committee is responsible - in particular handles monitoring of the presentation of accounts, the accounting process the effectiveness of the internal monitoring system, the risk management system, the internal audit system, the auditing of the annual financial statements and and compliance.

    The audit committee presents a reasoned recommendation to the Supervisory Board for the election of the auditor, which in the case that the audit mandate is put out to tender must comprise at least two candidates. The audit committee monitors the independence of the auditor and also deals with the services additionally provided by the auditor, the issuance of the audit mandate to the auditor, the determination of focal points for the audit and the fee agreement.

    The chairperson of the audit committee shall have specialist knowledge of and experience in the application of accounting principles and internal control processes. He or she shall be independent and may only be a former member of the company Executive Board if his or her term of office ended at least two years previously. The chairperson of the Supervisory Board shall not hold the chair of the audit committee.

    5.3.3
    The Supervisory Board shall set up a nomination committee composed exclusively of shareholder representatives to appoint suitable candidates for the election of Supervisory Board members for the Supervisory Board's recommendation to the general meeting.

    KRONES AG does not currently have a nomination committee.

    Committees are useful mainly when the size of a body means its work thus becomes more efficient. Six representatives of shareholders sit on the Supervisory Board of KRONES AG and present proposals. We do not therefore believe it necessary to establish a nomination committee. The work in question is conducted by the standing committee.

    5.4 Composition and Remuneration

    5.4.1
    The Supervisory Board must be comprised of members who together have all the necessary knowledge, skills and specialist experience to carry out Supervisory Board duties correctly and in full. 

    The Supervisory Board shall set concrete targets for its composition and draw up a skills profile for the full board. For its composition it shall, in line with the specific situation of the enterprise, take account of the international activities of the enterprise, potential conflicts of interest, the number of independent Supervisory Board members within the meaning of paragraph 5.4.2, a specified age limit for Supervisory Board members, a specified standard limit for the length of service on the Supervisory Board, and diversity. The particular rules of the co-determination laws must be observed for the elected employee representatives.

    In the case of listed companies for which the Co-determination Act, the Coal and Steel Co-determination Act or the Co-determination Supplementary Act applies, the Supervisory Board consists of to at least 30& of women and to at least 30% of men.* For the other companies covered by the Equality Act, the Supervisory Board defines targets for the proportion of women. 

    * From 1 January 2016, the minimum proportion of 30% of women and 30% of men on the Supervisory Board must be observed when there is a need for re-elections and secondments in order to fill one or more seats on the Supervisory Board (section 25 (2) of the Introductory Act of the German Stock Corporation Act as amended by the Equal Participation of Women and Men in Leadership Positions in the Private Sector and Civil Service Act from 24 April 2015, FLG I p. 642).

    Proposals of the Supervisory Board to the general meeting shall consider these targets while simultaneously striving to satisfy the skills profile for the full board. The progress of implementation shall be published in the corporate governance report. This shall also provide information on the Supervisory Board’s assessment of the reasonable number of independent shareholder members and the names of these members. 

    In making its proposals for the election of new Supervisory Board members to the general meeting, the Supervisory Board shall satisfy itself that the respective candidate can devote the amount of time that is expected. The proposal shall be accompanied by a curriculum vitae setting out the relevant skills, abilities and experience of the candidates; this shall be supplemented by an overview of their substantive activities alongside the position on the Supervisory Board and updated annually for all Supervisory Board members and published on the enterprise’s website. 

    When proposing candidates to the general meeting, the Supervisory Board shall disclose any and personal and business relationships of each candidate with the enterprise, the executive bodies of the company or major shareholders in the company. 

    This recommendation to disclose is limited to circumstances that would, in the assessment of the Supervisory Board, be considered by an objective shareholder as significant when deciding how to vote.

    In the view of the Supervisory Board, the requirements of paragraphs 5 and 6 are unclear and vague in detail and may infringe the privacy of the persons concerned.

    A major shareholder within the meaning of this recommendation is any shareholder who directly or indirectly holds over 10% of voting shares in the company.

    5.4.2 
    The Supervisory Board shall have what it judges to be a reasonable number of independent members; the Supervisory Board shall consider the ownership structure accordingly. For the purposes of this recommendation, a Supervisory Board member is in particular not to be considered independent if he or she has a personal or business relationship with the company, with executive bodies of the company, with a shareholder with a controlling interest or an associated enterprise of that shareholder, and that relationship could constitute a significant and not merely temporary conflict of interests. The Supervisory Board shall have no more than two former members of the Executive Board. Supervisory Board members shall not exercise any directorships or advisory roles for any of the enterprise's major competitors.

    5.4.3 
    Elections to the Supervisory Board shall be held on an individual basis. The deadline for an application for the legal appointment of a Supervisory Board member shall be the next annual general meeting. Proposed candidates for the chair of the Supervisory Board shall be announced to the shareholders.

    5.4.4 
    Executive Board members may not join the company’s Supervisory Board within two years of the end of their term of office on the Executive Board unless they are proposed for election by shareholders holding over 25% of the voting rights in the company. In the latter case, the move to become chairperson of the Supervisory Board shall be an exception to be approved by the general meeting.

    5.4.5 
    Each member of the Supervisory Board must ensure they have sufficient time to perform their duties. No member of the Executive Board of a listed company shall hold any more than a total of three Supervisory Board roles in listed companies outside the group or on the supervisory bodies of companies outside the group that have comparable requirements.

    The members of the Supervisory Board are themselves responsible for undertaking the training and professional development measures required for the performance of their duties. The company shall provide reasonable support for these measures.

    5.4.6
    The remuneration of the members of the Supervisory Board is defined by resolution of the general meeting or in the Articles of Association. 

    The chairing or deputy chairing of the Supervisory Board and the chairing or membership of committees shall also be taken into account.

    The remuneration does not take particular account of the chairing of Supervisory Board committees.

    In the view of the Supervisory Board, the current additional remuneration for members of committees is also reasonable and proportionate for the chairs of those committees in the light of the size of these bodies.

    The members of the Supervisory Board receive a remuneration that is commensurate with their functions and with the situation of the company. Any performance-related remuneration guaranteed to the members of the Supervisory Board shall be oriented to sustainable corporate development. 

    The remuneration of members of the Supervisory Board shall be itemised in the notes to the financial statements or in the management report, broken down into its component parts. 

    Payments made by the enterprise to the members of the Supervisory Board or advantages extended for services provided individually, in particular advisory or agency services, shall also be itemised. 

    5.4.7 
    If, during a financial year, a member of the Supervisory Board only attends half or fewer of the meetings of the Supervisory Board and of the committees to which he or she belongs, this shall be noted in the Supervisory Board report. Participation also includes telephone or video conferences, but that should not be the norm.

    5.5 Conflicts of Interest

    5.5.1 
    Each member of the Supervisory Board has a duty to work in the interests of the enterprise. No member of the Supervisory Board may pursue personal interests in their decisions or use business opportunities intended for the enterprise for themselves.

    5.5.2 
    Each member of the Supervisory Board shall disclose to the Supervisory Board any conflicts of interest, in particular those resulting from a consultancy or directorship function for clients, suppliers, lenders or other third parties.

    5.5.3 
    In its report, the Supervisory Board shall inform the general meeting of any conflicts of interest that have occurred and how the conflicts are being handled. Material conflicts of interest and those which are not merely temporary in respect of the person of a Supervisory Board member shall result in the termination of their appointment.

    5.5.4 
    Consultancy and other contracts for work or services between a member of the Supervisory Board and the company require the consent of the Supervisory Board.

    5.6 
    Efficiency Audit

    The Supervisory Board shall examine the efficiency of its activities on a regular basis.

    6 Transparency

    6 Transparency

    6.1 
    The company will treat all shareholders equally under the same conditions with respect to information. It shall make all significant new facts which have been made known to the financial analysts and similar addressees available to the shareholders without delay.

    6.2 
    For the purposes its continuing public relations, the company shall publish the issue dates of the annual reports and interim financial reports and of the general meeting, press and analyst conferences in a "financial calendar" on the company's website in reasonable time beforehand.

     

     

    7 Reporting and Audit of the Annual Financial Statements

    7 Presentation of Accounts and Auditing of the Annual Financial Statements

    7.1 Presentation of Accounts

    7.1.1 
    Shareholders and third parties will informed through the consolidated financial statements and consolidated management report and the interim financial reports. If the company is not under any obligation to publish quarterly reports, it shall inform the shareholders during the year in suitable form of business developments, in particular significant changes in the business outlook and the risk situation, in addition to the half-year financial report.

    7.1.2 
    The consolidated financial statements are prepared by the Executive Board and examined by the auditor and the Supervisory Board. The Executive Board shall discuss in-year financial information with the Supervisory Board or its audit committee prior to publication. The consolidated financial statements shall be available to the public within 90 days of the end of the financial year, the obligatory in-year financial information within 45 days of the end of the reporting period.

    7.1.3 
    The corporate governance report shall contain specific information on stock option programmes and similar securities-based incentive systems where this information is not already contained in the annual financial statements, consolidated financial statements or remuneration report.

    7.1.4 
    Notes on relationships with shareholders considered to be "related parties" pursuant to the applicable accounting regulations shall be provided in the consolidated financial statements.

    7.2 Auditing of Annual Financial Statements

    7.2.1 
    Prior to submitting a proposal for election, the Supervisory Board or the audit committee shall obtain a statement from the intended auditor on whether, and where applicable which, professional, financial, personal or other relationships exist between the auditor and its executive bodies and head auditors on the one hand and the enterprise and the members of its executive bodies on the other hand that could cast doubt on its impartiality. This statement shall include the extent to which other services have been performed for the enterprise in the past financial year or have been contractually agreed for the following year, in particular in the consultancy sector.

    The Supervisory Board shall agree with the auditor that the chairperson of the Supervisory Board or of the audit committee is to be informed without delay of any grounds for disqualification or prejudice that occur during the audit, unless such grounds are eliminated without delay.

    7.2.2 
    The Supervisory Board instructs the auditor to perform the audit and concludes the fee agreement with the auditor.

    7.2.3 
    The Supervisory Board shall arrange for the auditor to report without delay on all facts and events of significance to the work of the Supervisory Board that emerge or arise during the conduct of the audit.

    The Supervisory Board shall arrange for the auditor to inform it and/or note in the auditor's report if, during the conduct of the audit, the auditor establishes facts indicating that the statement on the Code made by the Executive Board and Supervisory Board is incorrect.

    7.2.4 
    The auditor takes part in the Supervisory Board's deliberations on the annual financial statements and consolidated financial statements and reports on the material findings of the audit.

    kronesEN
    kronesEN
    0
    10
    1