Declaration regarding Corporate Management
Disclosures regarding corporate management as per sections 289 f, 315 d of the German Commercial Code (HGB)
亚博vip群1 Aktiengesellschaft treats Corporate Governance as a system for managing and monitoring the company. This includes the business policies and guidelines as well as internal and external regulatory and monitoring mechanisms. Effective and transparent Corporate Governance encourages our shareholders, employees and business partners, as well as the public, to have confidence in the management and supervision of the company. At 亚博vip群1 Aktiengesellschaft, corporate management and supervision is structured as follows:
Shareholders and Annual General Meeting
Our shareholders exercise their rights at the Annual General Meeting. The ordinary Annual General Meeting is regularly held during the first six months of the financial year. The Annual General Meeting shall be chaired by the chairperson of the Supervisory Board or by another person designated by the shareholders’ representatives on the Supervisory Board. The shareholders at the Annual General Meeting decide on all tasks assigned to them, as required by law.
Our goal is to make the shareholders’ participation in the Annual General Meeting as easy as possible. All documentation required for participation is published in advance on the Internet. Proxies may be appointed by shareholders to exercise their voting rights at the Annual General Meeting in accordance with their instructions.
亚博vip群1 Aktiengesellschaft’s Supervisory Board consists of twelve members as per the Articles of Association, of which six represent the shareholders and six the employees. The Supervisory Board chairperson is elected from the Supervisory Board members. The Chairman of the Supervisory Board is Dr. Yanmin (Andy) Gu. The Deputy Chairman of the Supervisory Board is Mr. Michael Leppek.
The employee representatives were elected to the Supervisory Board on April 10, 2018 in accordance with the provisions of the German Act on Company Co-Determination (Mitbestimmungsgesetz). The members of the Supervisory Board representing the shareholders were lastly elected by the Annual General Meeting on June 6, 2018.
The term of office of the Supervisory Board members representing the employees and the members representing the shareholders ends upon adjournment of the Annual General Meeting in 2023. The same applies to substitute members and other successors in office of employees and shareholders who subsequently join the Supervisory Board. This is because section 10 para. 4 sent. 1 of the Articles of Association stipulates that where a Supervisory Board member leaves office early, the term of office of the new Supervisory Board member runs only for the remaining term of office of the retiring member.
Specifically, this concerns two shareholder representatives who were appointed to the Supervisory Board by court order of the Augsburg Local Court dated June 12, 2019 and by court order of the Augsburg Local Court dated January 23, 2020.
The Supervisory Board appoints the members of the Executive Board. It supervises and advises the Executive Board regarding the company’s management. Supervisory Board approval is required for key Executive Board decisions. The Supervisory Board meets at least four times per year and also meets without the entire Executive Board or individual Executive Board members as necessary. The Supervisory Board formed five committees from among its members, which prepare and supplement its work. These are:
(i) the Mediation Committe as per section 27 para. 3 of the German Act on Company Codetermination (MitbestG)
(ii) the Personnel Committee
(iii) the Audit Committee
(iv) the Nomination Committee
(v) the Strategy and Technology Committee.
The Supervisory Board adopts the financial statements and approves the consolidated financial statements.
Pursuant to section 111 para 5 of the German Stock Corporation Act (AktG), the Supervisory Board has set target figures for the percentage of women on the Executive Board with a target value of 0% to be achieved by March 31, 2022. There was no cause to alter the set target figures during the reference period (see also the report of the Supervisory Board). The figure for the Supervisory Board did not have to be determined as the quota is already stipulated in section 96 para 2, section 111 para 5 sentence 5 of the German Stock Corporation Act (AktG).
The Executive Board is responsible for managing the company. It has two members. The Executive Board reports to the Supervisory Board regularly, in a timely manner and comprehensively regarding all relevant issues related to business development, planning, financing and business performance. 亚博vip群1 Aktiengesellschaft maintains a Directors & Officers liability insurance (D&O insurance) for all members of the Executive and Supervisory Boards. The deductible for members of the Executive Board amounts to 10% of damages or one-and-a-half times their fixed annual remuneration, as per statutory requirements. For Supervisory Board members, the D&O insurance does not contain any deductible.
Percentage of women first and second management level
Furthermore, pursuant to section 76 para. 4 of the Stock Corporation Act, the Executive Board has determined that the target percentage of women for the two management levels below the Executive Board must be reached by March 23, 2022 at the latest (“target date”).
The target percentage of women has been set at 20% for the first management level below the Executive Board and at 20% for the second management level below the Executive Board. As at December 31, 2019, the percentage of women was 33% at the first management level and 22% at the second management level.
For the members of the Supervisory Board of 亚博vip群1 Aktiengesellschaft, the Rules of Procedure for the Supervisory Board contain diversity standards (inter alia, as to minimum and maximum age and to sector-specific experience). With respect to the Executive Board of 亚博vip群1 Aktiengesellschaft, there is no indication to setup a specific diversity concept pursuant to section 289 para. 2 no. 6 of the German Commercial Code since the Executive Board only comprises three persons.
Accounting and annual audit
Since 2004, the annual financial statements of 亚博vip群1 Group have been prepared in accordance with the International Accounting Standards (IAS) and the International Financial Reporting Standards (IFRS) as adopted by the European Union. An independent auditor elected at the Annual General Meeting audits the annual financial statements and the consolidated financial statements. At the recommendation of the Supervisory Board, shareholders at the 2019 Annual General Meeting chose KPMG AG Wirtschaftsprüfungsgesellschaft, Berlin, as auditor for the annual financial statements and Group auditor for fiscal 2019 as well as for a potential review of the midyear report for fiscal 2019.
In accordance with the provisions of the Corporate Governance Code, the Supervisory Board’s Audit Committee reviewed the independence of the auditor, commissioned the auditor to carry out the audit, determined the key audit points and agreed on the fee.
It has been agreed with the independent auditor that the independent auditor will immediately report to the Supervisory Board any material findings or occurrences related to the Supervisory Board’s work that arise in the course of auditing the financial statements. Finally, it has also been agreed with the independent auditor that the independent auditor will inform the Supervisory Board and/or note in the audit report any finding of facts during the performance of the audit, indicating that the declarations issued by the Executive Board and the Supervisory Board with respect to the Code are in any way incorrect.
亚博vip群1 Aktiengesellschaft assigns a high priority to providing consistent, comprehensive and timely information. 亚博vip群1 Aktiengesellschaft uses the Annual Report, the financial results press conference, the quarterly reports and the midyear report to report on business performance and results.
The scheduled dates of key recurring events and publications, such as the Annual General Meeting, the Annual Report and the interim reports, are summarized in a financial calendar. The calendar is published well in advance and is always available on 亚博vip群1 Aktiengesellschaft’s website.
In addition, the company provides information by way of press releases and ad hoc announcements as required by law. All announcements and press releases can be viewed at www.亚博vip群1.com.
亚博vip群1 Aktiengesellschaft has prepared an insider directory as per statutory requirements. The affected individuals have been informed of their legal obligations and potential sanctions.
Declaration of compliance in accordance with section 161 AktG
Declaration of Compliance 2020
The declaration of the Executive Board dated January 30, 2020 and the Supervisory Board dated February 7, 2020 in accordance with section 161 para. 1 sent. 1 of the German Stock Corporation Act (AktG) and the German Corporate Governance Code (GCGC) reads as follows:
Since issuing the latest declarations of compliance of the Executive Board (January 28, 2019) and of the Supervisory Board (February 15, 2019), 亚博vip群1 Aktiengesellschaft has complied with the recommendations of the Government Commission on the German Corporate Governance Code as on February 7, 2017, which were published in the Bundesanzeiger (German Federal Gazette) dated April 24, 2017, with the exception of the divergences mentioned in these declarations of compliance and will continue to comply with these recommendations with the following deviations:
亚博vip群1 Aktiengesellschaft does not follow the recommendation for the Supervisory Board outlined in section 3.8 para. 3 of the GCGC. The Group D&O insurance policy does not provide for a deductible for members of the Supervisory Board. In 亚博vip群1 Aktiengesellschaft’s view, Supervisory Board members do not require a deductible to ensure that they properly fulfill their monitoring role.
亚博vip群1 Aktiengesellschaft does not follow the recommendation for the chair of the Audit Committee outlined in section 5.3.2 para. 3 of the GCGC. The chairman of the Audit Committee is not to be considered independent pursuant to section 5.4.2 GCGC because this person is an officer of 亚博vip群1 Aktiengesellschaft’s controlling shareholder. As CFO of Midea Group, the chairman of the Audit Committee possesses special knowledge and experience in the application of accounting principles and internal control procedures
亚博vip群1 Aktiengesellschaft adheres to almost all the other suggestions contained in the Code.
Augsburg, January/February 2020
Executive Board Supervisory Board