DECLARATION OF THE MANAGEMENT BOARD OF HANSEYACHTS AG IN ACCORDANCE WITH ARTICLE 289A OF THE GERMAN COMMERCIAL CODE (HGB):
This declaration of the management board contains a declaration of compliance in accordance with Art. 161 of the German Stock Corporation Act (AktG) in compliance with the German Corporate Governance Code (DCGK), details on practises of corporate management and a description of the workings of the management and supervisory boards. In so doing, HanseYachts AG is aiming to ensure that the presentation of management remains lucid and meaningful.
The management and supervisory boards of HanseYachts AG are committed to the German Corporate Governance Code (DCGK) and identify with the goals of this Code to promote proper and responsible corporate management, oriented towards that which benefits the shareholders, employees and customers.
This fact is evident from a policy of responsible management and supervision of HanseYachts AG based on maximizing profitability. This also entails transparently presenting its corporate principles and developments in its business, with the aim of ensuring and reinforcing the confidence of customers, business partners and investors in HanseYachts AG. Parameters of proper corporate management continue to be close and efficient cooperation between the management board and the supervisory board, regard for shareholders’ interests, effective corporate communication, correct accounting and auditing as well as responsible risk management.
HanseYachts AG regards corporate governance as an ongoing process and will continue to follow future developments attentively and make use of them accordingly.
DECLARATION ON THE GERMAN CORPORATE GOVERNANCE CODE (DCGK) IN ACCORDANCE WITH ARTICLE 161 OF THE GERMAN STOCK CORPORATION ACT (AKTG)
Since its last declaration of compliance of 20 October 2014, HanseYachts AG has complied, and will continue to comply, with the recommendations of the Government Commission on the German CGC in the version of 05 May 2015 throughout the period reported here, with the exception of the following deviations and will continue to do this in future with the exception of the following non-conformance:
- Contrary to Item 3.8 DCGK (Deductible in the D&O Insurance also for the supervisory board), the D&O insurance taken out by HanseYachts AG for its supervisory board does not provide for a deductíble.
The management and supervisory boards are fundamentally not of the opinion that the motivation and responsibility, with which the members of the supervisory board discharge their duties, could not be improved upon by means of such a de2ductible. Consequently, HanseYachts AG is not planning any changes in its current D&O insurance contracts.
- Contrary to the recommendations in accordance with Item 4.2.1 DCGK, HanseYachts AG has not one, but two spokesmen for the management board.
Both members of the management board have also been appointed as spokespersons, as said management board and the supervisory board are of the opinion that all members of this management board should be fundamentally equal.
- Contrary to Item 4.2.2, Para. 2, Sentence 3 of the Code, determination of the remuneration for the management board also does not take the relation to the remuneration of senior management and the work force into account altogether in developments over time.
With the changes to the German Corporate Governance Code in the version of 13 May 2013, a recommendation was introduced for the first time, by which the supervisory board was also advised to take the relation of the remuneration for the management board to the remuneration of senior management and the work force into account altogether in developments over time. When concluding the current management board contracts in accordance with the dictates of the German Stock Corporation Act prior to implementation of this recommendation, the supervisory board took care to ensure that the total remuneration allotted to the members of the management board remained within a commensurate relation to the general wage and salary structures within the company, thereby maintaining so-called “vertical commensurateness“ with management board remuneration. As far as these had already been substantiated beforehand by the examination for vertical commensurateness of management-board remuneration as demanded by the German Corporate Governance Code and the reference groups relevant for a comparison as well as the time frame of the comparison have been more closely defined, a deviation will be explained to a certain extent as a precaution. While concluding the currently valid management-board contracts within the framework of an examination for commensurateness, the supervisory board did not distinguish between the reference groups in accordance with Item 4.2.2, Para. 2, Sentence 3 and also did not conduct any surveys on developments over time regarding wage and salary structures.
- Contrary to Item 4.2.3, Para. 2, Sentence 3 of the Code, the variable remuneration components stipulated in one management-board member’s contract do not contain a multi-year basis for assessment — a notable exception.
The supervisory board does not consider such a basis for assessment to be mandatory. In the opinion of the supervisory board, remuneration of the management-board members is ensured altogether, even without such a basis for assessment in light of the circumstances of this individual case and the structuring of the variable remuneration components, in that remuneration of the members of the management board is duly oriented to sustained developments of their enterprise.
- Contrary to Items 4.2.4 and 4.2.5, Para. 3 of the Code, reporting on the remuneration for members of the management board will neither be individualised nor broken down according to its constituent parts — in particular according to benefits granted and to benefits received as well as the cost of benefits — using a model salary schedule enclosed as a supplement with the Code in the remuneration report.
At the general meeting on 31 January 2012, the shareholders adopted a resolution to refrain from disclosing management board remuneration. Against this background, the remuneration can also not be subdivided in the remuneration report on the basis of a model salary schedule enclosed with the DCGK, as this would lead to an individualised disclosure of management-board remuneration and would thus go directly against the resolution adopted at the general shareholders’ meeting of 31 January 2012. Moreover, the management and supervisory boards of HanseYachts AG are of the opinion that the disclosures on management-board remuneration resulting from the applicable accounting principles utilised by HanseYachts AG are sufficient. Disclosure of the remuneration for management-board members according to its components – in particular according to benefits granted and according to benefits received as well as the cost of benefits – using the model salary schedule included as a supplement to the Code in the remuneration report, which in light of the above mentioned resolution adopted at the general shareholders’ meeting on 31 January 2012 may not be individually made public, would not provide any additional relevant information for the capital market.
- Contrary to the recommendations in accordance with Item 5.1.2, Paragraph 2, Sentence 3, and Item 5.4.1, Sentence 2 of the German CGC, an age limit for members of the management and supervisory boards has not been fixed.
A generalised age limit does not represent a suitable criterion for quality in the opinion of HanseYachts AG and would unnecessarily restrict the search for particularly qualified and experienced candidates. Moreover, the present age structure of the directors and officers (D&O) would not make fixing such an age limit imperative.
- Contrary to the recommendations in accordance with Item 5.3.3 of the German CGC, a nominating committee has not been formed.
The supervisory board considers it preferable to present the nominations to the general shareholders’ meeting for election to the supervisory board as members in the overall supervisory board in order to permit the diversity already present in said supervisory board to flow into such nominations.
- In the past, the recommendations in accordance with Item 5.4.1, Sentences 2 to 4 of the German CGC (Defining Concrete Goals for the Composition of the Supervisory Board) have not yet been pursued, as a resolution on the goals to be defined has not yet been adopted and will also not be pursued in future. Nevertheless the supervisory board intends to formulate corresponding goals in future and then to include them in subsequent Corporate Governance reports. However, there is no fixed timetable for this as yet.
- The recommendation contained in Item 7.1.2 of the German CGK to make the consolidated financial statements publicly accessible within 90 days after the end of a given fiscal year, has not been observed. HanseYachts AG is nevertheless striving to implement this recommendation in future.
DISCLOSURES ON CORPORATE MANAGEMENT PRACTISES
HanseYachts makes use of any and all legally stipulated corporate management practises. There are no additional guidelines, such as ethical standards or labour and social standards that are valid company-wide.
PROCEDURES OF THE MANAGEMENT AND SUPERVISORY BOARDS
The supervisory and management boards of HanseYachts AG cooperate closely and trustfully with each other. All relevant questions relating to the business situation and developments, financing as well as strategy and planning are discussed between the two management entities.
The supervisory board advises and monitors the management board in managing the HanseGroup and reviews all major business transactions by examining the relevant documents on the basis of the German Stock Corporation Act and the Articles of Incorporation. The supervisory board is elected at the general shareholders’ meeting. The management board is appointed by the supervisory board. The supervisory board decides on the number of members on the management board and determines the chairman (CEO). In the internal bylaws for the management board, the supervisory board stipulates a catalogue of transactions requiring board approval as well as a schedule of responsibilities. The supervisory board acts on the basis of its own rules of procedure.
The supervisory board finalizes the annual financial statements and approves the consolidated financial statements. Each year the chairman of the supervisory board explains the activities of said board in his report to the shareholders and at the general shareholders’ meeting. The supervisory board of HanseYachts AG consists of six members. There is also an audit committee that includes three members of the supervisory board. In addition to advising on examining the annual financial statements, its duties include discussing corporate planning.
The management board currently consists of two members. The management board runs the company on its own responsibility. Individual areas of responsibility are stipulated in the schedule of responsibilities. The heads of the various business units report to the management board about their respective departments/divisions and bear responsibility for the results of their respective units. The management board reports to the supervisory board comprehensively about planning and developments in business as well as the status of the HanseGroup, including risk management, at regular intervals and in timely fashion, both in writing and at regularly scheduled meetings. The management board takes part in all of the meetings of the supervisory board, reports orally and in writing on the individual items on the agenda as well as on drafts of resolutions and responds to questions of individual members of the supervisory board.
Drafts of resolutions are conveyed to the members of the supervisory board in writing prior to the respective meetings. The possibility of drafting resolutions by circulation procedure is especially used in cases that are particularly urgent.
REMUNERATION OF THE MANAGEMENT BOARD (REMUNERATION REPORT) PURSUANT TO ITEM 4.2.5 OF THE GERMAN CGC
Total remuneration for the management board has been fixed at a commensurate level by the supervisory board. Criteria for determining this commensurate level are, in particular, the responsibilities of the respective member of the management board, personal performance, the situation of the economy, the Company’s success and future prospects as well as the usual level of such remuneration in light of that, which is paid in comparable companies and the salary structure otherwise applicable within HanseYachts.
Remuneration for the members of the management board is determined by the supervisory board, which regularly assesses the commensurateness of said remuneration. This remuneration comprises a fixed and a variable component. The variable components are dependent on targets that are determined on a yearly basis. There is a ceiling on the variable components. The variable remuneration component is paid once annually, depending on the results of the past fiscal year relative to achieving the respective targets agreed upon. Furthermore, in cases of extraordinary accomplishments, the supervisory board can grant the management board a special bonus that would also have a ceiling. For the fiscal year reported here, the management board will receive a variable remuneration component. No arrangements have been made for pensions.
In the fiscal year that ended on 30 June 2015, total remuneration for the entire management board, including use of company vehicles and insurance premiums, amounted to EUR 614K (EUR 920K last year). EUR 505K (534K last year) thereof covered fixed salary components and EUR 109 (EUR 386K last year) thereof was paid for variable salary components.
At two-year intervals, the supervisory board reviews total remuneration paid to the management board, considering in particular the earnings situation of HanseYachts AG and the performance of individual members, and adjusts said total remuneration commensurately.
Furthermore, HanseYachts has taken out liability insurance for pecuniary damages for directors and officers (D&O insurance) with a commensurate deductible to be borne by the management-board members themselves.
In the event of revocation of an appointment of a member to the management board, the employment contract, and hence payment of remuneration and other benefits provided by HanseYachts AG, shall end on the date, on which said revocation shall have been received. Should the office as a member of the management board expire or be eliminated due to, or as a result of, a change in corporate form or a restructuring measure, HanseYachts or a legal successor thereof shall have, inter alia, the option of terminating the employment contract of the members of the management board with 6 months notice. If a member of the management board resigns in such a case, any severance payments shall be limited to his or her income for six months. In case of a change of control, within 2 months after it becomes legally binding, the management board shall be entitled to resign by giving 1 month‘s notice and to step down on the date said notice shall expire as well as to demand payment of 12 months salary as compensation for the loss of employment, restricted to a maximum severance payment of their (fixed) remuneration until the regular termination of their contract.
At the general meeting, the chairman of the supervisory board will also inform the shareholders of HanseYachts AG about the basic principles of the remuneration system and any amendments to it.
REMUNERATION OF THE SUPERVISORY BOARD PURSUANT TO SECTION 5.4.6 OF THE GERMAN CGC
Remuneration for members of the supervisory board is determined by the shareholders at the general meeting and has been regulated in Article 14 of the Articles of Incorporation of HanseYachts AG. In addition to reimbursement for expenses, first of all each member of the supervisory board receives fixed annual remuneration of EUR 6000, payable at the end of each fiscal year. In addition each member of the supervisory board receives variable remuneration of EUR 50 for each cent, by which consolidated earnings after taxes per share exceed EUR 1.30. The chairman of the supervisory board receives three times the normal fixed and variable remuneration; the vice-chairman and heads of commissions receive two times the above-mentioned amounts. For the fiscal year reported here, as in previous years, the supervisory board has not received any variable remuneration components.
SHAREHOLDINGS OF THE MANAGEMENT BOARD AND SUPERVISORY BOARD PURSUANT TO SECTION 6.2 OF THE GERMAN CGC
With one exception, the members of the management and supervisory boards of HanseYachts AG do not have any shareholdings above 1% of stock issued by their company that would require disclosure within the scope of Item 6.2 of the German CGC; supervisory board chairman Gert Purkert holds 5.47 % of the shares in Aurelius SE & Co. KGaA (former Aurelius AG), which in turn directly holds 15 % of the stock in HanseYachts AG. In addition, Aurelius SE & Co. KGaA holds 100% of the shares in the HY Beteiligungs GmbH, which in turn holds 59.13% in HanseYachts AG. The total holding of the two management-board members and supervisory board member Dr. Luzi Rageth in stock issued by HanseYachts AG amounts to 1.29 %, whereas management board member Sven Göbel and management board member Dr Jens Gerhard each holds the same number of shares at 0.64 %.
HanseYachts AG publishes extensive information about the shareholdings and stock transactions of the management and supervisory boards. Stock transactions falling under Article 15a of the Securities Trading Act on mandatory disclosure of Directors' Dealings have always been appropriately published on the website of HanseYachts AG.
ADDITIONAL INFORMATION ON CORPORATE GOVERNANCE
Transparency and the requirement to inform shareholders and the public quickly and comprehensively have a high priority at HanseYachts AG. Consequently, current developments and vital company information are made available on HanseYachts AG’s website (http://www.hansegroup.com). In addition to information on corporate governance, the website also publishes details about the management board, the supervisory board and the general shareholders’ meeting, legally required company reports (annual financial statements, six-month financial reports and interim reports from management), a financial calendar including all key dates as well as ad hoc press releases and mandatory disclosure of notifiable securities transactions (Directors’ Dealings).
Greifswald, 23 October 2015
The Supervisory Board The Management Board