In accordance with section 161 of the German Stock Corporation Act, the Management Board and Supervisory Board of a listed company are required to issue a statement each year in which they provide information on the extent to which the recommendations of the Government Commission on the German Corporate Governance Code have been complied with in the past and are currently being complied with. For 1 July 2010, the following declaration refers to the version of the Code dated 18 June 2009. Since 2 July 2010, the declaration refers to the requirements of the Code in the new version dated 26 May 2010, which was published in the electronic Bundesanzeiger (German Federal Gazette) on 2 July 2010. This declaration has been published in full on the company’s website www.estavis.de.
The Management Board and Supervisory Board of ESTAVIS AG hereby issue the following declaration:
“Since the last declaration of conformity was issued in September 2010, ESTAVIS AG has complied with the recommendations of the most recent version of the German Corporate Governance Code with the following exceptions and intends to comply with the recommendations of the Code, with the following exceptions, in the coming financial year as well:
Sections 2.3.1 and 2.3.3 (Postal vote)
The company does not currently intend to conduct postal votes before or during the Annual General Meeting in addition to proxy voting by persons authorised to act as voting representatives, particularly since the constitutional basis required for this in accordance with section 118 (2) of the Stock Corporation Act does not exist. In the opinion of the company, the introduction of postal voting in addition to the option already available of contributing indirectly to the votes taken in the Annual General Meeting in the form of a proxy vote by a representative appointed by the company would simply increase the outlay required for the Annual General Meeting without benefiting the shareholder decision-making process in any significant way. This option was not offered at the last Annual General Meeting either.
Section 3.8 (D&O insurance)
The D&O insurance taken out as a Group contract does not currently provide any deductible for members of the Supervisory Board. The company believes that a deductible of this type is not required to urge the members of the Supervisory Board to perform their monitoring duties in the proper manner.
Section 4.2.3 (Compensation)
The total compensation of the Management Board currently consists of fixed and variable components, but no long-term incentives containing risk elements. Moreover, the recommendation that negative developments should be taken into account when determining the variable components of overall remuneration was and is not complied with. According to the Supervisory Board, neither of these aspects is necessary in order to ensure the loyalty of the Management Board and its commitment to the company. A severance pay cap for former members of the Management Board has not currently been agreed, as the Supervisory Board does not consider this to be necessary.
Section 5.1.2 (Composition of the Management Board, age limit and succession planning)
Due to the age structure of the Management Board, no age limit or long-term succession planning is currently specified.
The incumbent members of the Management Board were appointed before the new recommendation in section 5.1.2 of the Code was published. The Supervisory Board and Management Board expressly welcome all endeavours to counteract gender-based as well as all other forms of discrimination and that promote diversity in an appropriate manner. When appointing members of the Management Board, the Supervisory Board places emphasis solely on the competence, qualifications and experience of the persons in question. Therefore, further characteristics such as gender and nationality were and remain of no significance when making these decisions.
Sections 5.3.1, 5.3.2 and 5.3.3 (Committees)
To date, the Supervisory Board has not formed committees, and in particular an audit committee or a nomination committee. In light of the number of three members the Supervisory Board considers efficient work to be possible in joint representation and the formation of committees, which must include at least two people or, for a quorum, at least three people, to be unreasonable given the size of the Supervisory Board.
Section 5.4.1 (Composition of the Supervisory Board)
The new recommendation added to the Code as amended on 26 May 2010 on the formulation of specific objectives regarding the composition of the Supervisory Board, which include in particular the appropriate involvement of women, is not currently complied with as, in the opinion of the Supervisory Board, such a composition is not essential for effective and successful work by the Supervisory Board. The Supervisory Board will examine the extent to which this recommendation can be complied with in future.
Section 5.4.6 (Supervisory Board remuneration)
ESTAVIS AG does not pay remuneration to the members of the Supervisory Board personally for the consultancy and agency services they perform for the company. If remuneration is paid to a law office for consultancy services by a member of the Supervisory Board or for other lawyers of the same law office, these services are not listed in the corporate governance report as, in the opinion of the Management Board and the Supervisory Board, such information is of immaterial value to the capital market.
The remuneration of the members of the Supervisory Board shall take into account the Chair and Deputy Chair positions in the Supervisory Board as well as the chair and membership in committees. The remuneration arrangement for the members of the Supervisory Board of ESTAVIS AG currently considers only the Chair position in the Supervisory Board. Due to the fact that there are only three members, it does not differentiate between the Deputy Chair and ordinary members. Committees have not been formed.
Section 7.1.2 (Discussion of interim reports by the Supervisory Board and publication of interim reports)
At present, quarterly reports are not discussed with the Supervisory Board prior to publication. The Management Board reports to the Supervisory Board on the company’s situation and the course of business each month in writing. The Supervisory Board does not consider additional quarterly reporting to be necessary.”
ESTAVIS AG publishes its interim reports 45 days after the end of the reporting period. In exceptional circumstances there may be a slight delay due to special organizational processes. The legal requirements set out in section 37w of the Securities Trading Act are complied with in all cases.
Berlin, 19 September 2011
Management Board and Supervisory Board
