Annual Report 2014

Corporate Governance Report

Corporate governance denotes the responsible management and control of companies in a manner that strives for long-term value creation. This includes purposeful, effective collaboration between the Board of Management and Supervisory Board, regard for the interests of shareholders and employees, transparency and responsibility in all entrepreneurial decisions, and the suitable handling of risks. technotrans takes the German Corporate Governance Code as its point of reference.

Responsible corporate management is a high priority at technotrans. The Board of Management and Supervisory Board of technotrans AG again gave in-depth consideration to the fulfilment of the requirements of the German Corporate Governance Code, and in particular to the amendments decided upon by the government commission responsible on May 13, 2013. Both bodies submitted a joint Declaration of Compliance in September 2014 pursuant to Section 161 (1) of the German Stock Corporation Act (AktG):

Declaration of Compliance with the German Corporate Governance Code

The Board of Management and Supervisory Board declare that, since the last Declaration of Compliance in September 2013, technotrans AG has in the 2014 financial year complied with the conduct recommendations of the Code Commission appointed by the German government, in the version dated June 24, 2014, and moreover intends to observe the recommendations in the future. The following exceptions apply:

Article 4.2.5 (Disclosure of Board of Management remuneration)

The German Corporate Governance Code recommends that the benefits granted plus fringe benefits, the maximum and minimum attainable remuneration for variable remuneration components as well as the fixed remuneration, short-term and long-term variable remuneration received, together with the benefit expenses for occupational pensions and other maintenance benefits, be presented in the Remuneration Report for every Board of Management member for financial years commencing after December 31, 2013, and that template specimen tables be used for this information. technotrans AG discloses the remuneration of each individual Board of Management member in agreement with the applicable requirements, broken down into non-performance-related and performance-related pay. The Board of Management and Supervisory Board do not believe that changing the form of presentation for Board of Management remuneration will improve quality and ease of understanding. For that reason, no further sub-classification is practised, nor are the specimen tables used.

Article 5.1.2 (Composition of the Board of Management)

The German Corporate Governance Code recommends that the Supervisory Board also heed diversity in the composition of the Board of Management, and that it should in particular strive for the adequate representation of women. The Supervisory Board considers that belonging to a particular gender is not an attribute that would particularly qualify a female or male candidate for a particular position, and therefore disregards this criterion when selecting the most suitable candidate for a position. When deciding on the appointment of new members of the Board of Management, in future the emphasis will be on the qualifications of the candidates and not on their gender.

Article 5.4.1 (Objective for the composition of the Supervisory Board)

The German Corporate Governance Code contains the recommendation that the Supervisory Board should state specific objectives for its composition that, depending on the specific situation of the company, take account of the international operations of the company, potential conflicts of interest, the number of independent Supervisory Board members, a possible age limit for Supervisory Board members, and diversity. The specific objectives should in particular envisage the appropriate involvement of women. In addition proposals by the Supervisory Board to the election bodies responsible are to reflect these objectives. The Board of Management and Supervisory Board are of the opinion that the intention pursued by the Code can also be achieved without the need to state specific goals, and that defining such goals would actually hinder the Supervisory Board in selecting suitable members. The Supervisory Board of technotrans AG has therefore not stated any specific goals with regard to its composition. In future, the Supervisory Board will however heed the criteria that are stated in the recommendations of the Code, such as diversity, when putting proposals for election to the Shareholders’ Meeting, but regardless of gender will continue to give priority to the knowledge and specialist qualifications of possible candidates. In addition, technotrans AG has for many years applied an age limit of 67 (at the time of election) to membership of its Supervisory Board.

Article 5.4.6 (Remuneration of the Supervisory Board members)

In the event that performance-related remuneration is promised to Supervisory Board members, the German Corporate Governance Code envisages that this be tied to sustainable corporate performance. In accordance with the articles of incorporation the members of the Supervisory Board receive a variable remuneration component that does not expressly reflect sustainable corporate performance.

The Remuneration Report can be found in the Combined Management Report.

In addition to the recommendations, the Corporate Governance Code contains suggestions, compliance with which is not binding. Nor are explanations for departures from the suggestions required. technotrans does not depart from these suggestions.

The recommendations and suggestions of the Corporate Governance Code as well as the statutory requirements form an integral part of the day-to-day working practices of the Board of Management and Supervisory Board. The committees examine compliance with the standards at regular intervals, to ensure that the issues at stake are always observed in the interests of the shareholders, the employees and not least the company itself.

Sustainable economic, ecological and social activity in keeping with applicable law is an indispensable element of entrepreneurial culture for technotrans. It also includes trust, respect and integrity in the way we deal with each other. This is manifested in exemplary behaviour towards employees, business partners, shareholders and the public. technotrans interprets compliance to mean observance of the law, the articles of incorporation, internal rules and any commitments undertaken voluntarily.

technotrans attaches particular importance to establishing a group-wide compliance structure that binds all employees worldwide to the compliance guideline. The purpose of this code of behaviour is to assure a uniform level of ethical and legal standards throughout the entire group of companies. A compliance manager is appointed to ensure the relevant topics are suitably refined and disseminated through training.