Corporate governance declaration pursuant to Art. 289a HGB
Corporate Governance Report in unison
The Executive Board – at the same time also for the Supervisory Board – reports pursuant to Art. 3.10 of the German Corporate Governance Code (the “Code”) about the corporate governance at the SINGULUS TECHNOLOGIES AG as follows:
Responsible and sustainable corporate governance was also very important to the SINGULUS TECHNOLOGIES AG in 2012. For the Executive and Supervisory Boards this means leadership and management of the company aligned for the long-term success. Corporate governance aims to safeguard a targeted and efficient cooperation between Executive Board and Supervisory Board, the respect for the interests of our shareholders and employees, suitable handling of risks and transparency as well as responsibility for all corporate decisions. The Executive and Supervisory Boards regard corporate governance as a process integrated into the company’s development, which is constantly progressed.
Since the Code was amended as of May 15, 2012, the Executive and Supervisory Boards have dealt with meeting the recommendations of the Code in this modified version in detail, in particular considering the size, structure and development of the company. On the basis of these discussions the Supervisory modified its bylaws in January 2013. Furthermore, during the next Annual General Meeting the Executive and Supervisory Boards will recommend an amendment of the Supervisory Board remuneration to a purely fixed component to meet the requirements of the Code. Correspondingly, the Declaration of Conformity to the Code, which can be found on page 35, was resolved. The particular management structure of the company with small Executive and Supervisory Boards as well as the particularities of the sector, in which the company is operating, do not permit the company to comply with all recommendations of the Code, which are often drawn up for much bigger corporations. The current joint Declaration of Conformity of the Executive and Supervisory Boards pursuant to Art. 161 AktG is published under www.singulus.de on our website. Any divergence from the code is explained in the Declaration of Conformity.
The SINGULUS TECHNOLOGIES AG as a German corporation is subject to German Corporate Law and is thus comprised of a two-tiered management and monitoring structure consisting of Executive Board and Supervisory Board. The Executive Board manages the company and is responsible for the company's strategy, accounting, finances and development. It is advised and monitored by the Supervisory Board. The Supervisory Board discusses the business trends and planning, the corporate strategy and its implementation. It approves the quarterly reports with the Executive Board, adopts the annual report and reviews the consolidated financial accounts.
The Supervisory Board regularly discusses the company’s development and plans as well as its strategy and implementation. Significant decisions by the Executive Board such as major acquisitions and financing measures are subject to the Supervisory Board’s approval according to the bylaws for the Executive Board. It issues the audit mandate for the auditor elected as the Annual General Meeting and is informed about the audit.
The Executive Board consists of two members, the Supervisory Board, which advises and monitors the Executive Board, is comprised of three members. The SINGULUS TECHNOLOGIES AG is not subject to the Co-Determination Act. Due to the company’s size and to ensure efficient work, both boards currently only meet the legally required minimum in terms of members.
Close cooperation of Executive and Supervisory Boards
Executive and Supervisory Boards work closely together for the benefit of the company. The Executive Board reports regularly, timely and in detail to the Supervisory Board about the relevant issues of corporate planning, the strategic development, the course of business activities and the overall situation of the Group. The Chairman of the Supervisory Board is in constant contact with the Executive Board. He regularly visits the company to inform himself on-site about the business activities and to advise the Executive Board on decisions. According to the bylaws of the Executive Board, significant business decisions are subject to the approval by the Supervisory Board. In total, the Supervisory Board convened twelve meetings in the business year 2012.
Members and work of the Executive Board
The Executive Board of the SINGULUS TECHNOLOGIES AG is currently comprised of two members. It is the management body of the company. In managing the company the Executive Board is solely obligated to the interests of the company and follows the goal of a sustainable increase in the enterprise value.
The current members of the Executive Board are Dr.-Ing. Stefan Rinck and Mr. Markus Ehret. Since April 1, 2010 Dr.-Ing. Stefan Rinck is the Chief Executive Officer, Mr. Markus Ehret is member of the Executive Board of the SINGULUS TECHNOLOGIES AG since April 19, 2010. Both members of the Executive Board have concluded new employment contracts in 2012.
As Chief Executive Officer Dr.-Ing. Stefan Rinck is responsible for the departments Production, Marketing & Sales, Technology, Research & Development as well as Strategy and International Operations. Mr. Markus Ehret is responsible for the areas Finance, Controlling, Investor Relations, Human Resources, Procurement and IT.
The compensation of the Executive Board is specified in detail in the Compensation Report (c. page 81).
For many years the Executive Board has already been employing women in management positions. Accordingly, two of the three authorized representatives of the SINGULUS TECHNOLOGIES AG are female.
Members and work of the Supervisory Board
The Supervisory Board is comprised of three members. No employee representative is a member of the Supervisory Board.
The Supervisory Board is currently comprised of Dr.-Ing. Wolfhard Leichnitz, Ms. Christine Kreidl WP/StB and Dr. rer. nat. Rolf Blessing. Dr.-Ing. Wolfhard Leichnitz has been a member of the Supervisory Board since 2009 and is Chairman of the Supervisory Board since 2011. Dr. rer. nat. Rolf Blessing is a member of the Supervisory Board since 2011. Until November 30, 2012 Mr. Günter Bachmann served as member of the Supervisory Board of the SINGULUS TECHNOLOGIES AG. Mr. Günter Bachmann had been a member of the Supervisory Board since 2008 and stepped down from his position for personal reasons. Following a corresponding authorization resolution by the Supervisory, the Executive Board recommended Ms. Christine Kreidl as a member of the Supervisory Board to the Local Court Aschaffenburg and she was appointed as a member of the Supervisory Board with effect from December 4, 2012 until the Annual General Meeting on June 6, 2013. Ms. Christine Kreidl was elected as Deputy Chairperson by the Supervisory Board. She is a Certified Public Accountant and Tax Advisor and worked at one of the big international auditing companies, her last position being member of the Executive Board. Accordingly, she can contribute a lot of experience and expertise to the Supervisory Board, amongst others in the areas of accounting and auditing.
The Supervisory Board also refrained from forming audit committees or other Supervisory Board committees in 2012 since committees are not reasonable for a Supervisory Board with three members.
The Supervisory Board amended its bylaws with respect to Art. 5.4.1. of the Code on January 24, 2013; henceforth it is required that the Supervisory Board is to be comprised of two thirds of independent members in the sense of Art. 5.4.2. of the Code. Currently all members of the Supervisory Board are independent. At the same time the Supervisory Board modified the terms for the selection of candidates, which are recommended to the Annual General Meeting for appointment to the Supervisory Board. These candidates should have the following expertise and experience, while not all criteria have to be met:
- know-how of the core business areas, in particular the competitive situation and the customers’ requirements;
- professional expertise regarding the technologic challenges related to the development of new machines;
- experience with complex development projects;
- international business experience, including outside of Europe;
- experience with national and international marketing & sales structure;
- expertise in the areas capital markets and investor relations;
- expertise in the area mergers & acquisitions.
One member of the Supervisory Board should have in-depth knowledge in the areas accounting and auditing. Members should display personality, integrity, professionalism, willingness to perform and independence. Nationality and gender should not play a role in the selection of a candidate. The Supervisory Board has refrained from introducing a fixed women’s quota. Although the Supervisory Board very much welcomes the appointment of a woman to the Supervisory Board with Ms. Christine Kreidl, it does not regard the fixation of a quota for the participation of women as reasonable. The provision that the Supervisory Board should not recommend anyone for appointment to the Supervisory Board for a tenure exceeding the person’s age of 70 remained unchanged.
As an additional modification of the bylaws, the Supervisory Board resolved to generally hold meetings as meetings in presence. In case of an unexpected personal incapability to be present, a participation and involvement of individual Supervisory Board members at a meeting in presence is also possible via telephone or video conference. Provided that all members of the Supervisory Board agree, a meeting and resolution via telephone or video conference is admissible.
The Supervisory Board met in twelve meetings in the business year 2012. The Supervisory Board reviews the efficiency of its work every year.
For detailed information about the work of the Supervisory Board in the business year 2012 please refer to the Report of the Supervisory Board on pages 16 to 23.
There were no advisory or other services and work contracts in place between the members of the Supervisory Board and the company in the past business year.
Transparency and communication
The Executive Board publishes potentially share price-relevant information concerning the SINGULUS TECHNOLOGIES AG immediately unless being exempt in individual cases. All ad hoc announcements published in 2012 are available on the website of the company. In addition, the company keeps an insider register which includes all people with access to insider information. These persons are regularly informed in detail about the resulting legal obligations.
The SINGULUS TECHNOLOGIES AG makes sure that the shareholders of the company are able to gain timely and extensive access about the situation of the company through the information provided on its internet website. SINGULUS TECHNOLOGIES reports about its business trends and the financial and earnings situation to its shareholders four times during the business year. All financial reports, current company presentations, the corporate calendar, all reports and documents regarding corporate governance including the bylaws and the invitations to the Annual General Meeting as well as the meeting’s votes are published under www.singulus.de in the Investor Relations section. To improve transparency and to support the stock price the SINGULUS TECHNOLOGIES AG held several analyst conferences and numerous one-on-one discussions with investors.
Besides the ad hoc announcements and the Directors' Dealing pursuant to § 15a WpHG as well as the voting right announcements pursuant to Art. 21 et seqq.WpHG, the Declaration of Conformity to the German Corporate Governance Code, a reference to the full text of the Code itself, which is available on the internet, as well as the articles of incorporation of the SINGULUS TECHNOLOGIES AG are available on SINGULUS TECHNOLOGIES’ website under Investor Relations.
The Annual General Meeting is held in the first half of the year. With the use of electronic forms of communication, in particular the internet and email, the Executive Board facilitates the shareholders’ participation in the Annual General Meeting and enables them to exercise their voting rights by representatives. In addition, the Executive Board may allow the shareholders to exercise the voting rights in written form and through electronic media without having to participate in the Annual General Meeting. All reports, annual financial reports and other documents, which have to be provided to the Annual General Meeting, as well as the agenda of the Annual General Meeting and counter-motions, if applicable, can be downloaded via the internet.
Accounting principles and audit of financial accounts
Since the business year 2004 the Group’s annual accounts, the annual accounts and the interim accounts have been drawn up according to the International Financial Reporting Standards (IFRS) and are internationally comparable. The annual financial statements were audited by the KPMG AG Wirtschaftsprüfungsgesellschaft, Frankfurt am Main. Interim reports were made public within 45 days after the end of the respective quarter, the consolidated annual accounts and the annual financial statements within 90 days after the end of the business year. Half-year and quarterly financial reports are not subject to an audit. Important aspects are discussed with the Supervisory Board before the publication.
The Annual Report for the business year 2012 is published on SINGULUS TECHNOLOGIES' website.
Similar to the past years SINGULUS TECHNOLOGIES individually reports the fixed and variable components of the compensation as well as the compensation components with long-term incentives for the members of the Executive Board. Furthermore, the additions to provisions to pensions are individually disclosed. The details are set forth in the Compensation Report, which is part of the Status Report and supplements this Corporate Governance Report. The Compensation Report lays out the compensation and the compensation scheme for the Executive Board in detail and also explains the design of the compensation components with long-term incentives. In addition, the remuneration of the members of the Supervisory Board is stated individually. The Compensation Report can be found on pages 81 to 87 of this Annual Report.
The information about securities transactions of the members of the Executive Board and the Supervisory Board of the SINGULUS TECHNOLOGIES AG and related persons pursuant to § 15a German Securities Trading Act (WpHG) as well as shareholdings are listed in the Compensation Report on page 87 and also on the website under Investor Relations / SINGULUS Stock / Directors' Dealings.