Declaration of Conformity 2022 with the German Corporate Governance Code
The last declaration of compliance was issued in June 2022. Since that date, SINGULUS TECHNOLOGIES AG (the “Company“) has complied with the recommendations of the Government Commission on the German Corporate Governance Code as amended on December 16, 2019 (“GCGC 2019“) with the exception of the following deviations:
a) According to Recommendation F.2, the consolidated financial statements and the group management report shall be publicly accessible within 90 days of the end of the financial year. The consolidated financial statements and Group management reports for the 2020 and 2021 fiscal years could not be published until April 20, 2023, because the auditor issued the audit certificate only after new financing agreements had been concluded and new contracts awarded due to doubts about the going concern forecast.
b) The consolidated financial statements and the group management report for the financial year 2022 will also not be submitted within the period of 90 days pursuant to recommendation F.2. The Company is required to change auditors due to statutory rotation requirements. However, the new auditor can only begin its audit work after the consolidated financial statements for 2020 and 2021 have been audited and approved.
c) According to recommendation B.5, the Supervisory Board shall set an age limit for Executive Board members. The Supervisory Board has not provided for a general age limit but decides on a case-by-case basis when appointing members. In August 2022, the Supervisory Board extended the service contract of Dr. Rinck for one year beyond his 65th birthday because the Supervisory Board considered continuity in management to be crucial due to the difficult situation of the Company.
d) According to recommendations D. 2, D. 3, D. 4, D. 5 DCGK 2019, the Supervisory Board shall form professionally qualified committees. The Supervisory Board of the Company shall not form committees as long as there is a three-member Supervisory Board, since in the case of a three-member Supervisory Board the proper performance of the Supervisory Board’s tasks can take place in plenary session. In this case, committees are not expected to increase efficiency, 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.
e) Recommendation D.11 provides for the Audit Committee to regularly review the quality of the audit of the financial statements. The Company does not have an audit committee, but the Supervisory Board carries out the assessment as a body.
2. With the exception of the deviations explained in section 1 c), d) and e) the SINGULUS TECHNOLOGIES AG will comply with the recommendations of the GCGC 2019 in the future. The Executive and Supervisory Boards expect that the consolidated financial statements and the group management report for the business year 2023 can be submitted within the 90-day period of recommendation F.2.
Kahl am Main, May 2023
Dr.-Ing. Wolfhard Leichnitz
Chairman of the Supervisory Board
Dr. rer. pol. Silke Landwehrmann
Deputy Chairwoman of the Supervisory Board
Dr. rer. nat. Rolf Blessing
Member of the Supervisory Board
Dr.-Ing. Stefan Rinck
Chief Executive Officer
Dipl.-Oec. Markus Ehret
Executive Board Member
2. Relevant information with regards to corporate governance
2.1 Management structure
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 thebylaws governing 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 and the Supervisory Board are currently comprised of three members each. The SINGULUS TECHNOLOGIES AG is not subject to the Co-Determination Act.
2.2 Risk Management
SINGULUS TECHNOLOGIES AG considers efficient and forward-looking risk management as an important and value-adding task. Risk management is one of the core functions of entrepreneurial endeavors and is a material element for the success of our business activities.
Specifically, risk management supports achieving the Company’s goals by creating transparency about the risk situation of the Company as the basis for risk-aware decisions, the identification of potential threats to the assets, financial and earnings situation of the Company as well as prioritizing risks and the respective requirements to act. In addition, risk management safeguards the explicit management of risks by
respective measures and their monitoring. Furthermore, the risks should be limited to an acceptable level as well as the costs of risks optimized.
The risk management organization is integrated into the existing organization of the SINGULUS TECHNOLOGIES AG. It is not an independent structure. The respective heads of the departments, supported by the risk manager and the Chief Financial Officer, are responsible for the risk management organization at the SINGULUS TECHNOLOGIES AG. The Chief Financial Officer coordinates with the other members of the Executive Board all activities in connection with the risk management of the SINGULUS TECHNOLOGIES AG.
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 interaction within the Company and with our business partners goes without saying for the SINGULUS TECHNOLOGIES AG. The fundamental statement is the basis for the self-imposed ethics code of the SINGULUS TECHNOLOGIES AG. It includes binding internal rules, which are subject to high ethical and legal standards. In this context, the Ethics Code focuses on integrity in the conduct with business partners, employees, shareholders and the public and describes the Company-wide applied management practices. The Ethics Code was adopted by the Executive and Supervisory Boards in spring 2015 and since then has been implemented group-wide in several steps. The content is disseminated to various groups of employees in regular intervals in the course of partially electronic training programs.
The goal of the Ethics Code is to inform the employees of the SINGULUS TECHNOLOGIES Group about the key compliance issues (competition regulations, corruption, handling of conflicts of interest, money laundering, embargo and trade restriction rules, data security, media and public affairs, workplace safety). This Ethics Code is supported by action guidelines to the Ethics Code, which amongst others includes rules regarding the granting and acceptance of gifts, and action guidelines for whistle-blowers, which governs specifics with regards to reporting of misdemeanor and illegal, immoral or inappropriate activities within the SINGULUS TECHNOLOGIES Group.
The complete ethics code is publicly available on the website of the SINGULUS TECHNOLOGIES AG under www.singulus.de/de/investor-relations/corporate- governance.html.
2.4 Compliance Management
For the Executive Board and the Supervisory Board of the SINGULUS TECHNOLOGIES AG, the adherence to extensive compliance is an essential prerequisite for sustainable economic success. As part of the risk management, compliance risk matters are analyzed and managed. In this connection there are quarterly reports to the Chief Financial Officer and annually to the Supervisory Board. In addition, extraordinary events and matters are directly reported to the Chief Financial Officer.
In the business year 2021 the compliance guidelines continued to be implemented. The employees of the SINGULUS TECHNOLOGIES AG were regularly trained, amongst others with respect to the code of conduct, export controls and embargos, information security, insider trading, information handling and prevention of corruption. There was also a training event for managers by an external consultant.
In case of actual or assumed compliance breaches, employees can – if preferred, also anonymously – contact their superiors, the Compliance officer or the SINGULUS TECHNOLOGIES ombudsperson.
3.1 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, 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 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 Supervisory Board, significant business decisions are subject to the approval by the Supervisory Board.
3.2 Members and work of the Executive Board
The Executive Board of the SINGULUS TECHNOLOGIES AG was comprised in business year 2021 of three 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. was member of the Executive Board of the SINGULUS TECHNOLOGIES AG since April 19, 2010. The employment contract of Dr.-Ing.Stefan Rinck expires on December 31, 2023, Mr. Markus Ehret’s contract has a term until March 20, 2024. Dr. rer. nat. Christian Strahberger was member of the Executive Board from November 1, 2019 to to October 31, 2022.
As Chief Executive Officer Dr.-Ing. Stefan Rinck is responsible for the departments 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 and IT. Until October 31, 2022, Dr. rer. nat. Christian Strahberger was responsible for the areas Procurement, Production, Semiconductor and the set-up of the production in China. Since November 1, 2022, Dr. Stefan Rinck has taken over the responsibilities for Production, Semiconductor and the set-up of the production in China. Mr. Markus Ehret took over the Procurement department.
3.3 Members and work of the Supervisory Board
The Supervisory Board of the SINGULUS TECHNOLOGIES AG is comprised of three members. No employee representative is a member of the Supervisory Board. The cooperation of the Supervisory Board was characterized by efficiency, professional competence and trust.
The Supervisory Board is currently comprised of Dr.-Ing. Wolfhard Leichnitz, Dr. Silke Landwehrmann and Dr. rer. nat. Rolf Blessing.
In the business year 2021 there were no changes in the Supervisory Board.
The bylaws of the Supervisory Board are publicly available on the website of the SINGULUS TECHNOLOGIES AG under https://www.singulus.de/de/corporate- governance/.
The Supervisory Board continued to refrain from forming an audit committee or other committees in the fiscal year 2021, 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 Supervisory 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 be comprised of at least three Supervisory Board members. For this reason a delegation of tasks is not reasonable, either.
The possibility for a Supervisory Board member to be appointed for a shorter tenure than the completion of the Annual General Meeting, which resolves on the discharge for the fourth business year after the start of the tenure, is still provided for and stated in the statutes of the Company. Overall, there were thirteen Supervisory Board meetings in the business year 2021, of which one meeting was held in presence.
The Supervisory Board is regularly performing self-assessments with respect to the efficiency of its work and identifies potential improvements. The Supervisory Board adheres to the recommendations of the Code and regularly assesses how efficiently the Supervisory performs its tasks and duties. For detailed information about the work of the Supervisory Board in the business year 2021 please refer to the Report of the Supervisory Board in the Annual Report.
There were no advisory or other services or work contracts in place between the members of the Supervisory Board and the Company in the past business year.
All three members of the Supervisory Board are independent in the meaning of the Code.
According to the bylaws of the Supervisory Board, the Supervisory Board members are obligated to immediately disclose to the Chairperson of the Supervisory Board potential conflicts of interest, which could for example results from an advisory or board function for customers, guarantors, creditors or other business partners of the SINGULUS TECHNOLOGIES AG. No conflicts of interests of members of the Supervisory Board arose during the period under review.
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 competence profile of its composition with respect to for example age, gender, educational and occupational background in the bylaws. Accordingly, the Supervisory Board should not recommend anyone for appointment to the Supervisory Board for a tenureexceeding the person’s age of 72. Candidates recommended to the Annual General Meeting for appointment to the Supervisory Board should have the following expertise and experience (while not all of the criteria have to be met): (i) know-how of the core business areas, in particular the competitive situation and requirements of customers, (ii) professional expertise with regards to technologic challenges, which are connected with the development of new machines, (iii) experience with complex development projects, (iv) international business experience, also outside of Europe, (v) experience with national and international marketing sales structures, (vi) expertise in the areas capital markets and investor relations and (vii) expertise in the area of mergers & acquisitions. At least one member of the Supervisory Board must
possess special, professional know-how in the areas of accounting or auditing. In its entirety the members have to be familiar with the sector, in which the Company is operating. Members should display personality, integrity, professionalism, willingness to perform and independence. Nationality should not play a role in the selection of a candidate. In addition, more than half of the members of Supervisory Board should be independent from the Company and the Executive Board. The Supervisory Board has set a target quota for the share of female members of the Supervisory Board.
The Supervisory Board is convinced that the described competence profile and diversity concept continues to be met by the tenure of one female and two male members and due to their age, educational and professional backgrounds.
Requirements for the diversity concept with respect to the Executive Board are also fixed in the bylaws of the Supervisory Board. Accordingly, the Chairperson of the Supervisory Board coordinates the long-term succession planning for the Executive Board, while a maximum age of 65 years is intended for the members of the Executive Board. For the appointment of the Executive Board, the Supervisory Board is also urged to consider diversity aspects. This is implemented on a case-by-case basis.
6. Additional corporate governance information
6.1 Transparency and communications
The Executive Board publishes potentially share price-relevant information concerning the SINGULUS TECHNOLOGIES AG immediately unless the Company is exempted in individual cases.
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 announcements pursuant to Art. 17 MAR, Directors’ Dealings pursuant to Art. 19 MAR and voting right announcements pursuant to Art. 33ff. Wertpapierhandelsgesetz (WpHG) are published under www.singulus.de in the segments Investor Relations and Press Releases. To improve transparency and to promote the shares of 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 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 throughSINGULUS TECHNOLOGIES’ website in the segment “Investor Relations”.
6.3 Accounting principles and audit of financial accounts
The consolidated financial statements and the interim reports of the SINGULUS TECHNOLOGIES Group are drawn up in accordance with IFRS as well as pursuant to applicable commercial law regulations pursuant to Art. 315e Para. 1 HGB. The individual financial statements of the SINGULUS TECHNOLOGIES AG are drawn up according to HGB and AktG principles as well as supplementary requirements according to the bylaws. The annual financial statements and consolidated statements for the business year 2021 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. Important aspects were discussed with the Supervisory Board and the reports were approved by the Supervisory Board before publication.
Interim reports are published within 45 days after the respective end of the quarter. With the exception of the consolidated financial statements and Group management report for the 2020, 2021 and 2022 fiscal years, the consolidated financial statements and annual financial statements are made available to the public within 90 days of the end of the fiscal year. Half-yearly and quarterly financial reports are not subject to an auditor’s review.
The consolidated financial statements and Group management reports for fiscal years 2020 and 2021 could not be published until April 20, 2023, because the auditor issued the audit certificate only after new financing agreements had been concluded and new orders placed due to doubts about the going concern forecast. Due to the delayed publication of the consolidated financial statements and Group management reports for the 2020 and 2021 fiscal years, the publication of the consolidated financial statements and Group management report for the 2022 fiscal year will also be delayed.
The annual report for the business year 2021 and the interim reports can be viewed on the website of the SINGULUS TECHNOLOGIES AG.
6.4 Compensation of Executive and Supervisory Board members
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 share-based 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 described in the Compensation Report. Pursuant to Art. 162 AktG, the Compensation Report lays out the compensation and the compensation scheme for the Executive Board in detail and on an individual basis 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.
SHAREHOLDINGS AS WELL AS REPORTABLE SECURITIES’ DEALINGS OF EXECUTIVE AND SUPERVISORY BOARD MEMBERS
1. Shareholdings of Executive and Supervisory Board members
No member of the Executive or Supervisory Board holds directly or indirectly a share of the nominal capital of the Company exceeding 1 %.
The following members of the Executive and Supervisory Board held directly or indirectly shares in the SINGULUS TECHNOLOGIES AG as of December 31, 2021:
Shareholdings of Executive and Supervisory Board members
December 31, 2021
December 31, 2020
Dr.-Ing. Wolfhard Leichnitz, Chairman of the Supervisory Board
Dr. Silke Landwehrmann
Dr. rer. nat. Rolf Blessing
Executive Board members
Dr.-Ing. Stefan Rinck, CEO
Dipl.-Oec. Markus Ehret, CFO
Dr. rer. nat. Christian Strahberger, COO*
* member until October 31, 2022
The sitting members of the Executive and Supervisory Boards did not hold subscription rights through stock options or convertible bonds as of December 31, 2021.
2. Directors’ Dealings
Pursuant to Art. 19 MAR, members of the Executive and Supervisory Boards or related persons were obligated in the business year 2021 to report transactions with shares or debt instruments of the Company or related derivatives or with other related financial instruments, if the total volume of the activities within one calendar year exceeds a total volume of € 20,000. The Company was not notified of any relevant transactions for the business year 2021.
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