2. Relevant information with regards to corporate governance
2.1 Management structure
As a German stock corporation, the SINGULUS TECHNOLOGIES AG is subject to German stock corporation law and therefore has a two-tier management and control structure consisting of the Executive and Supervisory Boards. The Executive Board manages the business and is responsible for corporate strategy, accounting, finance, and planning. It is advised and monitored by the Supervisory Board.
The Supervisory Board discusses business development and planning, corporate strategy, and its implementation based on reports from the Executive Board. Major Executive Board decisions such as major acquisitions and financing measures are subject to the approval of the Supervisory Board in accordance with the Executive Board’s Rules of Procedure. It commissions the auditor elected by the Annual General Meeting to carry out the audit and receives a report on the audit. Following its own review, the Supervisory Board approves the annual financial statements and the consolidated financial statements.
The Executive Board currently consists of two members and the Supervisory Board of three members. The SINGULUS TECHNOLOGIES AG is not subject to the German Co-Determination Act.
2.2 Risk Management
SINGULUS TECHNOLOGIES AG considers efficient and forward-looking risk management to be an important and value-creating task. Risk management is one of the core functions of entrepreneurial activity and a crucial element for the success of our business activities.
Specifically, risk management supports the achievement of the Company’s objectives by creating transparency about the Company’s risk situation as a basis for risk-conscious decision-making, thus enabling potential threats to the Company’s net assets, financial position, and results of operations to be identified and the necessary action to be taken. Risk management enables risks to be controlled and monitored in a targeted manner. In addition, the aim is to limit risks to an acceptable level and optimize risk costs.
The risk management is integrated into the existing organization of the SINGULUS TECHNOLOGIES AG. It does not form an independent structure. The risk management organization of the SlNGULUS TECHNOLOGIES AG is supported by the respective department heads, who are assisted by the risk manager as well as the Chief Financial Officer. The Chief Financial Officer coordinates all activities in connection with the risk management of the SINGULUS TECHNOLOGIES AG with the other members of the Executive Board.
The Executive Board and the risk manager report to the Supervisory Board at least once a fiscal year on the status of risk management and planned improvements. The results of the audit of the risk management system by the auditor and the resulting measures are also discussed.
2.3 Ethics Code
Integrity characterizes the interaction of the SINGULUS TECHNOLOGIES AG with its business partners, employees, shareholders and the public. Respectful, loyal, and fair dealings with each other and with our business partners are essential for the SINGULUS TECHNOLOGIES AG. This fundamental statement is the basis for the self-imposed code of ethics of the SINGULUS TECHNOLOGIES AG, which can be viewed at https://www.singulus.com/de/corporate-governance/. It contains binding internal rules based on high ethical and legal standards. The Code of Ethics focuses on integrity in dealing with business partners, employees, shareholders and the public and is a corporate governance practice applied company-wide. It was adopted by the Executive Board and Supervisory Board in spring 2015 and has since been implemented throughout the Group in several steps. The contents of the Code of Ethics are communicated to various employee groups at regular intervals as part of training programs, some of which are electronic.
The objective of the code of ethics is to inform the employees of the SINGULUS TECHNOLOGIES Group about the most important compliance topics (competition law, corruption, handling conflicts of interest, money laundering, embargo and trade control regulations, data protection, dealing with the media and the public, occupational safety). The Code of Ethics is flanked by an action guideline, which among other things contains rules for the giving and acceptance of gifts, and an action guideline for whistleblowers, which regulates details on the reporting of misconduct and illegal, immoral, or inappropriate activities within the SINGULUS TECHNOLOGIES Group.
2.4 Compliance Management
For the Executive and Supervisory Boards of the SINGULUS TECHNOLOGIES AG the observance of a comprehensive compliance is an indispensable prerequisite for sustainable economic success. As part of the risk management, compliance risk issues are analyzed and controlled. In this context, quarterly reports are submitted to the Chief Financial Officer and once a year to the Supervisory Board. In addition, reports are submitted directly to the Chief Financial Officer in the event of exceptional circumstances.
In the business year 2022 the compliance guideline was further implemented. The employees of the SINGULUS TECHNOLOGIES AG were regularly trained regarding the Code of Ethics, export control and embargoes, information security, insider trading, trading with information and corruption prevention, among others.
In case of actual or suspected compliance violations, employees can contact their supervisor, the person responsible for compliance or the SINGULUS TECHNOLOGIES ombudsperson, anonymously if desired. There were no incidents in the business year 2022
3.1 Close cooperation of Executive and Supervisory Boards
The Executive Board and Supervisory Board work closely together for the benefit of the Company. The Executive Board reports to the Supervisory Board regularly, promptly, and comprehensively on relevant issues of corporate planning and strategic development, as well as on the course of business and the situation of the Group.
In the business year 2022 the Supervisory Board intensively dealt with the business development of the SINGULUS TECHNOLOGIES AG due to the difficult financial situation. A total of 21 Supervisory Board meetings took place, most of them in the presence of the Executive Board. In addition, the Chairman of the Supervisory Board was in contact with the Executive Board on an almost weekly basis in order to stay informed about new developments, to discuss current challenges and to keep the Supervisory Board up to date accordingly.
The basis for the Supervisory Board’s information and monitoring activities is an ongoing reporting system. Additional written and oral reports by the Executive Board, other employees and the auditors supplement the reporting. In the case of important issues, the Supervisory Board also calls in external consultants to supplement the reporting by the Executive Board. The Chairman of the Supervisory Board also regularly discusses the situation of the Company and its further development with the Executive Board in individual meetings and subsequently reports to the other members of the Supervisory Board. The business situation and liquidity situation are discussed internally by the Supervisory Board and at each Supervisory Board meeting, in some cases also jointly with the Executive Board. The Supervisory Board’s rules of procedure stipulate that significant business transactions are subject to approval by the Supervisory Board.
3.2 Members and work of the Executive Board
The Executive Board of the SINGULUS TECHNOLOGIES AG consisted of three members in the business year 2022 until October 31, 2022. Dr. rer. nat. Strahberger resigned from the Executive Board with the expiration of his appointment and service contract. The Supervisory Board believed a reduction of the Executive Board was appropriate due to the difficult situation of the company.
The Executive Board is the management body of the Company. In managing the Company, the Executive Board is bound solely by the interests of the Company and is guided by the goal of sustainably increasing the value of the Company as well as the interests of the shareholders and employees. In addition to long-term economic goals, it also considers ecological and social goals.
The current members of the Executive Board are Dr. Stefan Rinck and Mr. Markus Ehret. Dr. Stefan Rinck has been Chairman of the Executive Board since April 1, 2010, Mr. Markus Ehret has been a member of the Executive Board of the SINGULUS TECHNOLOGIES AG since April 19, 2010. The service agreement and the appointment of Dr. Stefan Rinck was extended on August 16, 2022, until December 31, 2023. The service agreement and appointment of Mr. Markus Ehret runs until March 20, 2024. Dr. Christian Strahberger was a member of the Executive Board from November 1, 2019, to October 31, 2022.
As Chairman of the Management Board, Dr. Stefan Rinck is responsible for Sales, Technology, Research and Development, Strategy and International Activities and, since the departure of Dr. Strahberger, for Production, Semiconductors and Set-up China Manufacturing. Mr. Markus Ehret is responsible for Finance, Controlling, Investor Relations, Human Resources, ESG and IT and, since the departure of Dr. Strahberger, Purchasing.
3.3 Members and work of the Supervisory Board
The Supervisory Board of the SINGULUS TECHNOLOGIES AG consists of three members. The Supervisory Board is not co-determined. The cooperation within the Supervisory Board was characterized by efficiency, professional competence, and trust.
The members of the Supervisory Board in the financial year 2022 were Dr. Wolfhard Leichnitz, Dr. Silke Landwehrmann and Dr. Rolf Blessing.
The terms of office of Dr. Leichnitz and Dr. Blessing expired at the end of the Annual General Meeting on July 19, 2023. Dr. Leichnitz stood for re-election and the Annual General Meeting on July 19, 2023, confirmed the election. Dr. Blessing is retiring from the Supervisory Board as planned on expiry of his term of office for reasons of age. Dr. Changfeng Tu was elected as his successor by the same Annual General Meeting. Dr. Tu is a Chinese citizen and currently lives in Düsseldorf. He works as an independent lawyer and investor. In particular, he advises German and Chinese companies on investments in China and Europe. The Supervisory Board expects that the Company will be able to benefit from Dr. Tu’s expertise in “investments in China” in the important sales market of China.
In the Rules of Procedure of the Supervisory Board, which are available on the Company’s website at www.singulus.de/de/investor-relations/corporate-governance, the Supervisory Board has specified in item 2.3 the expertise and experience that the Supervisory Board should cover in addition to knowledge of the business areas, the competitive situation and the customers of the Company as a whole.
The current members of the Supervisory Board cover the following areas:
The Supervisory Board has again refrained from forming an audit committee or other committees in the 2022 financial year because, in its opinion, they are unlikely to increase efficiency or improve the handling of complex issues or enable the Supervisory Board to perform its duties more efficiently or better in connection with accounting, risk management or auditing issues. Stock corporation law also stipulates that supervisory board committees with decision-making powers must be composed of at least three supervisory board members. Delegation of tasks is not appropriate for this reason either. In particular, the tasks assigned to the Audit Committee by the Code are performed by the Supervisory Board as a whole.
The Supervisory Board regularly conducts a self-assessment regarding the efficiency of its work and identifies improvements. The Supervisory Board follows the requirements of the Code and regularly assesses how effectively the Supervisory Board performs its duties.
A detailed account of the work of the Supervisory Board in fiscal year 2022 can be found in the Report of the Supervisory Board on pages 2 to 15.
There were no consultancy or other service or work contracts between members of the Supervisory Board and the Company in the past financial year.
Dr. Leichnitz has been a member of the Supervisory Board for more than 12 years and is therefore no longer considered independent of the Company pursuant to Section 12.7 of the Code. The two other members of the Supervisory Board are independent within the meaning of the Code.
According to the by-laws of the Supervisory Board, members of the Supervisory Board shall immediately disclose to the Chairman of the Supervisory Board any potential conflicts of interest, which may arise, for example, due to a consulting or board function with business customers, guarantors, lenders or other business partners of the SINGULUS TECHNOLOGIES AG. No conflicts of interest of Supervisory Board members arose during the reporting period.
3.4 Developments since December 31, 2022, in the composition of the
Management Board and Supervisory Board
As already described in section 3.3, Dr. Tu has been a member of the Supervisory Board since the end of the Annual General Meeting on July 19, 2023. He succeeds Dr. Blessing, who stepped down from the Supervisory Board at the end of his term of office.
At its meeting on October 30, 2023, the Supervisory Board resolved to propose to the Annual General Meeting that the Supervisory Board be expanded to four members. The Executive Board and Supervisory Board are of the opinion that a Supervisory Board with four members can better represent the interests of the shareholders in accordance with the current shareholding ratios. The largest single shareholder Triumph Science & Technology Group Co., Ltd. Beijing (“Triumph”); which holds 16.75% of the share capital, is currently not represented on the Supervisory Board. In addition, a further Supervisory Board member will expand the competence profile of the Supervisory Board through his skills and expertise. The Supervisory Board proposes Mr. Denan Chu for election to the Supervisory Board at the Annual General Meeting. Mr. Chu is Board Secretary and General Counsel (Head of the Executive Secretariat and Legal Department) at Triumph.
At the same meeting, the Supervisory Board extended the appointment of Dr. Stefan Rinck to the Executive Board until December 31, 2024, and the appointment of Markus Ehret until December 31, 2028.
5. Diversity concept with respect to the composition of the Executive Board and the Supervisory Board as well as competence profile
The Supervisory Board has anchored the diversity concept and the competence profile on its composition regarding aspects such as age, gender, educational or professional background in its Rules of Procedure. The age limit for membership of the Supervisory Board is 72. Accordingly, the Supervisory Board shall not propose any persons for election to the Supervisory Board for a longer term of office than until they reach the age of 72. Candidates proposed to the Annual General Meeting for election to the Supervisory Board shall have the following expertise and experience (although not all criteria need to be met): (i) knowledge of the core business areas, in particular the competitive situation and the needs of customers, (ii) technical expertise regarding the technological challenges associated with the development of new machines, (iii) experience with complex development projects, (iv) international business experience, including outside Europe, (v) experience with national and international sales structures, (vi) expertise in capital markets and investor relations, and (vii) expertise in mergers & acquisitions. At least one member of the Supervisory Board must have special expertise in the fields of accounting and auditing. The members must be familiar with the sector in which the Company operates. The members shall have personality, integrity, professionalism, willingness to perform and independence. Nationality shall not play a role in the selection of a candidate. In addition, more than half of the Supervisory Board members shall be independent of the Company and the Executive Board. The Supervisory Board shall set a target quota for the proportion of women on the Supervisory Board (see above).
The Supervisory Board is convinced that it fulfills the competence profile and diversity concept described by the appointment of one woman and two men and due to their age, educational and professional background.
Specifications for the diversity concept regarding the Executive Board are also anchored in the Supervisory Board’s Rules of Procedure. Accordingly, the Chairman of the Supervisory Board coordinates long-term succession planning for the Executive Board, whereby an age limit of 65 years is to be provided for Executive Board members. When appointing members to the Executive Board, the Supervisory Board shall also pay attention to diversity. This is done on a case-by-case basis.
The Annual General Meeting on July 19, 2023, reappointed Dr. Leichnitz for the period until the end of the Annual General Meeting which resolves on the formal approval of the actions of the Supervisory Board for the fiscal year 2024. His term of office will therefore end after his 72nd birthday in December 2024. Although this is a formal Although this is a formal violation of the Supervisory Board’s Rules of Procedure, the Supervisory Board Supervisory Board has decided to propose Dr. Leichnitz for re-election for this term because, in this difficult situation his many years of knowledge of the Company and its business is very valuable and his its business is very valuable and his expertise would be lost. The exceeding of the age limit was announced in the invitation to the Annual Stockholders’ Meeting for July 19, 2023, was presented to the shareholders. The Annual General Meeting has elected Dr. Leichnitz with a majority of 98.79 %.
6. Additional corporate governance information
6.1 Transparency and communications
The Executive Board publishes potentially price-sensitive information concerning the SINGULUS TECHNOLOGIES AG without delay unless the company is exempt from this requirement in individual cases.
The SINGULUS TECHNOLOGIES AG takes care that the shareholders of the company can get a timely and comprehensive picture of the situation of the company via the information published on its website. The SINGULUS TECHNOLOGIES AG reports to its shareholders four times per business year about the business development as well as the financial and earnings situation. All financial reports, current company presentations, the corporate calendar as well as the notifications pursuant to Art. 17 MAR, the securities transactions (directors’ dealings) to be reported pursuant to Art. 19 MAR and the voting rights notifications pursuant to Art. 33 et seq. German Securities Trading Act (WpHG) are published at www.singulus.de in the Investor Relations and Corporate News sections. In order to improve transparency and maintain the share price, the SINGULUS TECHNOLOGIES AG held several analyst conferences and conducted numerous one-on-one meetings with investors.
All reports and documents on corporate governance and corporate management including the declaration of compliance with the Code, a reference to the full text of the Code available on the Internet as well as the company’s Articles of Association can also be found under Investor Relations, keyword Corporate Governance. The invitations to the Annual General Meeting and voting results can be viewed on the SINGULUS TECHNOLOGIES website in the Investor Relations section.
6.3 Accounting principles and audit of financial accounts
The consolidated financial statements and the interim reports of the SINGULUS TECHNOLOGIES Group are prepared in accordance with IFRS as well as the applicable commercial law provisions pursuant to Art. 315e Para. 1 HGB. The separate financial statements of the SINGULUS TECHNOLOGIES AG are prepared in accordance with the provisions of the HGB and the AktG as well as supplementary provisions of the Articles of Association. The consolidated and annual financial statements for the business year 2022 prepared by the Executive Board were audited by the auditing firm Baker Tilly GmbH & Co. KG, Frankfurt am Main. For its part, the Supervisory Board examined the financial statements and the results of the audit and adopted the separate financial statements for fiscal 2022 and approved the consolidated financial statements. The Supervisory Board discussed important aspects with the auditor.
Interim reports are made available to the public within 45 days of the end of the quarter. The annual financial statements and the consolidated financial statements are made available to the public within 90 days of the end of the financial year. In the past, the Company has always complied with these deadlines except for the annual financial statements for fiscal years 2020 and 2021, which could not be published until April 11, 2023. The auditor issued the audit opinion only after new financing agreements had been concluded and new contracts awarded. For the reasons stated above under item 6.2, the annual financial statements for the 2022 financial year could also not be made available until after the deadline.
The annual report for the business year 2022 and the interim reports can be viewed on the website of the SINGULUS TECHNOLOGIES AG.
6.4 Compensation of Executive and Supervisory Board members
As in the past years, the SINGULUS TECHNOLOGIES AG discloses both the fixed and the performance-based components of the compensation of the Executive Board members as well as the share-based compensation components with long-term incentive individually. In addition, the addition to the pension plan, which is based on a defined contribution system, is also disclosed individually. The disclosures can be found in the Compensation Report, which can be accessed at www.singulus.de/de/investor-relations/corporate-governance. In accordance with § 162 of the German Stock Corporation Act (AktG), the compensation report presents the compensation and compensation system of the Executive Board comprehensively and on an individualized basis, also addressing the structure of compensation components with a long-term incentive effect. In addition, the compensation of the members of the Supervisory Board is presented on an individualized basis.
Declaration of Conformity 2017
Declaration of Conformity 2018
Declaration of Conformity 2019
Declaration of Conformity 2020
Declaration of Conformity 2021
Declaration of Conformity 2022
Terms of the Supervisory Board
Code of Ethics
Compensation Report 2020
Compensation Report 2021
Compensation Report 2022