The SINGULUS TECHNOLOGIES AG and its Supervisory Board subscribe to the principles of proper and responsible corporate governance.
All members of the Supervisory Board are independent in the meaning of the German Corporate Governance Code (“Code”). No conflicts of interests of members of the Supervisory Board arose during the period under review. The cooperation of the Supervisory Board was characterized by efficiency, professional competence and trust.
Since the change of the corporate form into a corporation (Aktiengesellschaft) the Supervisory Board is comprised of three members. The Supervisory Board continued to refrain from forming an audit committee or other committees in the fiscal year 2015, because according to its assessment there is neither an increase in efficiency to be expected nor an improved handling of complex issues nor a more efficient or improved execution of tasks of the Super-visory Board in connection with issues about accounting principles, risk management or the audit. In addition, corporate law provides that decision-making Supervisory Board committees have to have at least three Supervisory Board members. For this reason a delegation of tasks is not reasonable either.
The members of the Executive and Supervisory Boards have published a joint Declaration of Conformity pursuant to Art. 161 AktG in January 2016 (cf. page 31 of this Annual Report 2015) and drew up a Corporate Governance Report pursuant to Art. 3.10 of the Code, which can be found on pages 24 to 31 of this Annual Report 2015. This report explains the deviations from recommendations of the Code. The Declaration of Conformity and the report are part of the declaration of corporate governance, which is permanently published at the company’s website. For further information please refer to this declaration.
Corporate Governance Declaration in Accordance with Art. 289a HGB and Corporate Governance Report
The Executive Board – at the same time also for the Supervisory Board – reports pursuant to Art. 3.10 of the German Corporate Governance 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 2015. 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 Super-visory 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.
The modifications of the Code in its version as of May 5, 2015 were discussed by the Supervisory Board and the Executive Board. The Supervisory Board has decided not to adhere to the recommendation of a determination of a statutory limit of tenure to the Supervisory Board (Art. 5.4.1 Para. 2 of the Code as of May 5, 2015). The Supervisory Board does not deem a limit for the SINGULUS TECHNOLOGIES Aktiengesellschaft to be reasonable. The members of the Supervisory Board should exclusively be appointed based on expertise and qualification. The members are to advise and monitor the Executive Board in a competent and efficient manner. The company shall also have at its disposal the expertise of experienced and reliable members of the Supervisory Board. A statutory limit for the time of membership would unduly restrict the flexibility with respect to appointments and the number of potential candidates.
Correspondingly, the Executive and Supervisory Boards resolved the Declaration of Conformity to the Code, which can be found on page 31. 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 also 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.
On the basis of the reports by the Executive Board the Supervisory Board discusses the business trends and planning, the corporate strategy and its 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 at the Annual General Meeting and is informed about the audit. After its own review the Supervisory Board adopts the annual reports and the consolidated financial statements.
The Executive Board currently consists of two members, the Supervisory Board 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.
In addition to the recommendations of the German Corporate Governance Code, which the SINGULUS TECHNOLOGIES AG to a large extent follows, the “Corporate Governance Code” of the SINGULUS TECHNOLOGIES Group is another relevant, company-wide applied corporate governance principle, which exceeds the legal requirements. The Corporate Governance Code was adopted by the Executive and Supervisory Boards in spring 2014 and since then has been implemented group-wide in several steps. The relations within the company, but also with external business partners, shareholders and the public are subject of the corporate governance code. It includes binding internal rules, which are subject to high ethical and legal standards. In this context the code focuses on integrity in the conduct with business partners, employees, shareholders and the public.
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. This holds particularly true in the economically difficult situation, to which the SINGULUS TECHNOLOGIES Group is currently exposed to. The basis of the information and monitoring activities of the Supervisory Board is the detailed monthly reporting. Additional, written and oral reports of the Executive Board, by other employees, the auditors as well as by external consultants supplement the reporting. Furthermore, the Chairman of the Supervisory Board regularly discusses the situation and the future development of the company during individual talks with the Executive Board and subsequently informs the other members of the Supervisory Board about these discussions. The reports are reviewed and discussed within the Supervisory Board and also jointly with the Executive Board. According to the bylaws of the Executive Board, significant business decisions are subject to the approval by the Supervisory Board. Overall, there were twelve Supervisory Board meetings in the business year 2015, of which six were meetings in present.
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 as well as the interests of the shareholders and of the employees.
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. The employment contract of Dr.-Ing. Stefan Rinck expires on August 31, 2017. Mr. Markus Ehret’s contract has a term until December 31, 2019.
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 Remuneration Report (c. page 89 to 101).
The Executive Board has already employed women in management positions for years, if they have the professional and personal qualifications. Currently, two of the four authorized officers of the SINGULUS TECHNOLOGIES AG are female, while the power of attorney of one of the officers is limited to the activities at the branch at Fürstenfeldbruck. The Executive Board has set targets for the share of women at the first management level below the Executive Board to 33 % (currently: approx. 33 %) and to the second management level below the Executive Board to 20 % (currently: approx. 19 %) by June 30, 2017.
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 has been a member of the Supervisory Board since 2011; Ms. Christine Kreidl has been a member of the Supervisory Board since 2012. On June 18, 2013 she was elected as Deputy Chairwoman by the Supervisory Board. The tenures of the members of the Supervisory Board end with the conclusion of the Annual General Meeting, which votes on the discharge for the business year 2015.
The Supervisory Board also refrained from forming audit committees or other Supervisory Board committees in 2015 since committees are not reasonable for a Supervisory Board with three members.
The Supervisory Board met in twelve meetings in the business year 2015. The Supervisory Board regularly reviews the efficiency of its work. For detailed information about the work of the Supervisory Board in the business year 2015 please refer to the Report of the Supervisory Board on pages 8 to 17 of the Annual Report.
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.
The Supervisory Board has set a target for the share of women in the Supervisory Board to 33 % (currently: approx. 33 %) as well as for the Executive Board to 0 % (currently: 0 %) by June 30, 2017.
Transparency and communications
The Executive Board publishes potentially share price-relevant information concerning the SINGULUS TECHNOLOGIES AG immediately unless the company is being exempt in individual cases. All ad-hoc announcements published in 2015 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. The SINGULUS TECHNOLOGIES AG 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 as well as ad-hoc announcements, “Directors’ Dealings” pursuant to Art. 15a WpHG and voting right announcements pursuant to Art. 21ff. WpHG are published under www.singulus.de in the segment “Investor Relations”. 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.
Also, all reports and documents concerning corporate governance including the declaration of conformity to the German Corporate Governance Code, an internet link to the full text of the code itself and the articles of the SINGULUS TECHNOLOGIES AG as well as the invitations to the Annual General Meetings and resolution results can be accessed through 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 in person. 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 consolidated 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 and consolidated statements drawn up by the Executive Board were audited by the auditor KPMG AG, Frankfurt am Main. The Supervisory Board reviewed the statements and the audit and adopted them. Half-year and quarterly financial reports are not subject to an audit. Important aspects were discussed with the Supervisory Board and the reports were approved by the board before publication.
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.
The Annual Report for the business year 2015 and the interim reports are 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. In addition, also the contributions to pensions, which are based on a defined contribution scheme, are disclosed individually. The details are set forth in the Remuneration Report, which is part of the Status Report and supplements this Corporate Governance Report. The Remuneration 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 Remuneration Report can be found on page 89 to 101 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 Remuneration Report on page 89 to 101 and also on the website under Investor Relations / SINGULUS Stock / Directors’ Dealings.