(The following text is a translation from the original German text to English. The translation below is purely for informative purposes and is not considered legally binding. For exact definitions and information, please refer to the original German text.)
The Management Board and the Supervisory Board of Müller - Die lila Logistik AG, headquartered in Besigheim, are committed to the recommendations of the "Government Commission on the German Corporate Governance Code" and declare that the recommendations of the Code have, in principle, been and will be complied with. The recommendations of Sections 3.8, 4.2.2, 4.2.5, 5.1.2, 5.3.3, 5.4.1, 7.1.1 and 7.1.2 have not yet been fully applied.
It is clarified that the declaration of conformity for the period since the last declaration of compliance refers to the current version of the Code dated 7th February 2017, which was published in the Federal Gazette on 24th April 2017.
|representing the Supervisory Board
Prof. Peter Klaus
Chairman of the Supervisory Board
|representing the Management Board
The individual deviations are based on the following considerations:
Clause 3.8 DCGK: Deductible in the D&O insurance for the Supervisory Board
The last paragraph of section 3.8 of the German Corporate Governance Code recommends that a deductible be agreed on in the D&O insurance policy for the Supervisory Board which complies with the recommendations of the Code for D&O insurances of management boards.
Müller - Die lila Logistik AG is of the opinion that the agreement of such a deductible for Supervisory Board members is not suited to improve the responsibility with which the members of the Supervisory Board perform tasks and functions assigned to them. Incidentally, the insurance serves as a protection for the company.
Clause 4.2.2 DCGK: Consideration of the relationship to the remuneration of senior management and the workforce as a whole when determining the remuneration of the Management Board
The German Corporate Governance Code recommends in Section 4.2.2 Paragraph 2, Sentence 3, that the Supervisory Board should consider the ratio of the remuneration of the Management Board to the remuneration of the upper management and the relevant workforce as a whole in terms of development over time. In accordance with the requirements of the German Stock Corporation Act, the Supervisory Board should ensure that the total remuneration is commensurate with the duties and achievements of the Executive Board member and does not exceed the usual remuneration.
Contrary to this rule, which was designed for large companies, the determination of the remuneration of the Management Board was based on the usual methods of investigation, on the scope of the business, on the economic and financial situation of the company, and on the structures of management board remuneration of comparable companies. In addition, the individual duties and responsibilities of each member of the Executive Board were and are taken into account. The Code has specified the review of a vertical appropriateness of the remuneration of the Management Board, which has already been required by the German Stock Corporation Act, and defined the comparison groups and the time scale of the settlement.
The Supervisory Board did not distinguish between the comparison groups of the Code Recommendation when reviewing vertical reasonableness and did not carry out any surveys on the temporal development of the salary structure.
Clause 4.2.5 DCGK: Executive Compensation Report
The German Corporate Governance Code recommends in Section 4.2.5 (3), Sentence 2: "Furthermore, the compensation report for each member of the Management Board should contain:
For this information, the sample tables attached are to be used. "
The ordinary general meeting of the company on June 15, 2015 has acc. Section 286 (5), Section 314 (3) HGB, pursuant to Section 285 No. 9 lit. a) Sentence 5 to 8 HGB and §§ 315a paragraph 1, 314 Paragraph 1, No. 6 lit. a) Sentence 5 to 8 HGB (in their respective applicable version) are omitted in the annual and consolidated financial statements of Müller - Die lila Logistik AG, which are to be prepared for the financial years 2015 to 2019 (inclusive). In this respect, a presentation of the compensation report as in Section 4.2.5 would not correspond to the resolution of the shareholders.
Müller – Die lila Logistik AG continues to report on the fixed and variable salary components of the entire Management Board in accordance with the provisions of the German Commercial Code and the IFRS. In the opinion of the company, the additional disclosures in accordance with the German Corporate Governance Code lead to a fourfold differentiated statement of one and the same remuneration component. The Company has decided not to report the remuneration of the Management Board in a third and fourth presentation.
In Section 5.1.2, the German Corporate Governance Code recommends that the Supervisory Board should also pay attention to diversity in the composition of the Executive Board. The Supervisory Board should set targets for the proportion of women on the Executive Board.
Müller – Die lila Logistik AG decides on the filling of executive positions according to the qualifications of the applicants and the interests of the company. In this respect, the Supervisory Board considers it to be appropriate in principle to make the selection of Management Board members dependent on their personality and their expertise. Therefore, the Code Recommendation in the currently valid version was not complied with. Of course, the Supervisory Board complies with the applicable legal requirements and has set a target for the proportion of women until June 30, 2022.
The target for the proportion of women in the Executive Board until 30 June 2022 is 15 percent.
The German Corporate Governance Code recommends the formation of a Nomination Committee "... which is composed exclusively of shareholder representatives and which proposes suitable candidates to the Supervisory Board for its nominations to the Annual General Meeting".
The Supervisory Board of Müller - Die lila Logistik AG deals in detail with the proposed resolutions to the Annual General Meeting, including the election proposals of Supervisory Board members. Beyond the existing Audit Committee and the existing Personnel Committee, the formation of a Nomination Committee represents a disproportionate additional expense. Issues to be dealt with in the Nomination Committee are discussed and resolved by the Supervisory Board.
The version of the GCGC of February 7, 2017 recommends in Section 5.4.1 (2) and (3) that the Supervisory Board should specify concrete objectives for its composition and develop a competence profile for the entire Supervisory Board. In terms of its composition, it should include the company's international activities, potential conflicts of interest, the number of independent Supervisory Board members as defined in Number 5.4.2, an age limit to be set for Supervisory Board members, and a regular limit on the length of membership of the Supervisory Board and Diversity. For the elected employee representatives, the special rules of codetermination laws must be observed. In the case of listed companies, to which the Co-Determination Act applies, the Supervisory Board consists of at least 30 percent women and at least 30 percent men. For the other companies covered by the Gender Equality Act, the Supervisory Board is to set targets for the proportion of women. Proposals by the Supervisory Board to the Annual General Meeting should take into account these goals and at the same time strive to fill out the competence profile for the entire Supervisory Board. The status of implementation is to be published in the Corporate Governance Report. The latter is also to inform about the number of independent members of the shareholders and the names of these members, which the Supervisory Board believes to be appropriate.
When making its nominations to the Annual General Meeting, the Supervisory Board of Müller - Die lila Logistik AG complies with all legal requirements and all recommendations of the Code with regard to the personal requirements of Supervisory Board members. Regardless of gender, the focus is on the professional and personal skills of potential candidates, paying particular attention to the company-specific requirements, so that the members of the Supervisory Board, if the nominees are selected, have the necessary knowledge, skills and professional experience to perform their tasks feature. A regular limit on the length of membership of the Supervisory Board is not provided for the members of the Supervisory Board. A maximum length of membership does not appear to the Supervisory Board to be appropriate, especially since the respective term of office for Supervisory Board members stipulated by law and the Articles of Association stipulates a manageable time frame for the mandates.
Therefore, the Code Recommendation in the currently valid version was and will not be complied with. Of course, the Supervisory Board complies with the applicable legal requirements and has set a target for the proportion of women until June 30, 2022.
The target for the proportion of women in the Executive Board until 30 June 2022 is 15 percent.
The German Corporate Governance Code recommends that shareholders and third parties be informed about the consolidated financial statements and the group management report as well as financial information during the year. Insofar as the Company is not obliged to publish quarterly reports, it should inform the shareholders in an appropriate form during the year in addition to the half-yearly financial report about the business development, in particular about material changes in the business prospects and the risk situation.
Müller – Die lila Logistik AG will inform shareholders and third parties through the consolidated financial statements, the group management report, and the half-yearly financial report as part of the statutory provisions of the German Securities Trading Act (WpHG). Other sub-annual financial information, for example, quarterly or monthly information, would be accompanied by seasonal fluctuations that could potentially mislead the company's business performance.
The German Corporate Governance Code recommends that the consolidated financial statements and the group management report be published within 90 days of the end of the financial year and the mandatory interim financial information within 45 days after the end of the reporting period.
Müller – Die lila Logistik AG will publish the consolidated financial statements and the half-yearly financial report as part of the statutory provisions of the German Securities Trading Act (WpHG).
Status: May 2018 Version