Declaration on corp. governance pursuant Section 289a of German Commercial Code

The corporate governance of CENTROTEC Sustainable AG – hereinafter also referred to as CENTROTEC – as a listed German stock corporation is determined primarily by German Stock Corporation Law and secondarily by the rules of the German Corporate Governance Code in its current version.

In accordance with the relevant statutory requirements, CENTROTEC has a dual governance system. This is characterised by a strict separation of personnel between the Management Board as the governing body and the Supervisory Board as the monitoring body. The Management Board and Supervisory Board work together closely in the interest of the company.

The Management Board manages the company with the aim of creating lasting value added, acting on its own responsibility. The principle of collective responsibility applies, i.e. all members of the Management Board bear joint responsibility for the overall management of the business. They develop the business strategy and assure its implementation in consultation with the Supervisory Board. The principles of cooperation for the Management Board of CENTROTEC are summarised in the rules of internal procedure for the Management Board. These in particular set out which individual Management Board members are responsible for which divisions, what matters are left to the Management Board as a whole, how resolutions are passed and what majorities are required for these, as well as the rights and obligations of the Management Board’s Chairman. The Management Board of CENTROTEC currently comprises three members.

The Management Board informs the Supervisory Board regularly, promptly and comprehensively of all aspects of material significance for the CENTROTEC Group with regard to business development, significant business transactions and the current earnings situation including the risk situation and risk management. Any deviation in business from previously determined business plans and targets is extensively discussed and explained. In addition the Management Board regularly reports on the subject of compliance, in other words the measures implemented to ensure compliance with statutory provisions and internal company guidelines, a matter which likewise falls within the sphere of responsibility of the Management Board.

The Supervisory Board advises the Management Board on the management of the company and monitors its actions. It appoints and dismisses the members of the Management Board, resolves the remuneration system for Management Board members and determines each such member's overall remuneration. It is involved in all decisions which are of fundamental importance for CENTROTEC. The Supervisory Board of CENTROTEC comprises three members. The principles of cooperation for the Supervisory Board of CENTROTEC are summarised in the rules of internal procedure for the Supervisory Board. These do not envisage the formation of committees in view of the size of the Supervisory Board, because all subjects are discussed jointly in plenary session.

Finally, the articles of incorporation of CENTROTEC regulate those transactions for which the Management Board requires the approval of the Supervisory Board.
CENTROTEC believes that responsible and transparent corporate governance is the basis for sustained commercial success. The guiding principles in this regard are set forth in the current version of the German Corporate Governance Code, which was first introduced in 2002. After due assessment, the Management Board and Supervisory Board of CENTROTEC therefore issued a currently valid Declaration of Compliance in accordance with Section 161 of German Stock Corporation Law (AktG) in December 2011.

CENTROTEC is mindful of its role in society and of the responsibility it bears towards customers, business partners, shareholders and employees, and continually refines its own rules of sound corporate governance.

Brilon, March 2012
CENTROTEC Sustainable AG
The Management Board