Corporate Governance Statement pursuant to Section 289f and Section 315d of the German Commercial Code

The corporate governance of CENTROTEC Sustainable SE – hereinafter also referred to as CENTROTEC – as a listed German stock corporation is determined primarily by the German Stock Corporation Act and secondarily by the rules of the German Corporate Governance Code as amended.

Modus operandi of Management Board and Supervisory Board, corporate governance practices
In accordance with the 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 jointly bear 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 specify in particular which Management Board members are responsible for which divisions, what matters are to be addressed by the full Management Board, and the passing of resolutions. The Management Board of CENTROTEC was increased from two to three members in the financial year. The Management Board members conduct the duties of the Management Board jointly and with equal rights. We believe that in view of the size of the Management Board and its structure, it is neither appropriate nor in the interests of the company to appoint a CEO or Chairman. The Management Board has not formed any committees.

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. Following the unexpected and sudden loss of the Supervisory Board member Dr Heiss, Mr Andreas Freiherr von Maltzan was appointed by court order as substitute member up until the next Annual General Meeting. The Supervisory Board has agreed on specific targets in respect of its composition; these are explained in the Corporate Governance Report. In view of the size of the Supervisory Board, no committees have been formed because all matters are discussed jointly in plenary session.

Finally, the Articles of Association of CENTROTEC regulate those transactions for which the Management Board requires the approval of the Supervisory Board.

Disclosures pursuant to Section 76 (4) and Section 111 (5) of the German Stock Corporation Act
CENTROTEC selects its employees on the basis of qualifications. As an employer, we wish to create an environment that makes applying to us for employment a proposition that is equally attractive to both women and men. To that end, we create tailormade solutions so that our employees – whether female or male – can achieve the best possible balance of family life and career. We will be delighted if we are able to steadily increase the proportion of women working for us. However our strategic goals are company-specific and business-specific, not gender-specific, so we therefore quote the statutory minimums for the goals which we are now required by law to publish regarding the proportion of women on the Supervisory Board, Management Board and in the first and second management tiers.

At CENTROTEC, the Supervisory Board and Management Board are very small. Both the Supervisory Board and the Management Board comprise three members, all of who are male. In September 2015 it was resolved not to make any changes to the composition of these bodies during the current terms of office, and therefore to retain the quota of 0 % up until the reporting date of June 30, 2017. Because the terms of office had not yet expired at that date, the quota of 0 % is to be retained initially until June 30, 2022, which of course does not exclude an increase in the proportion of female management employees.

For the first management tier of CENTROTEC as the holding company, the Management Board had resolved to uphold the status quo and therefore a quota of 0 % for the period ending with the close of June 30, 2022. This does not of course exclude an increase in the proportion of women in this management tier.

In the second management tier of CENTROTEC, the proportion of women is above 30 %. For the second management tier of CENTROTEC, the Management Board had resolved not to undershoot a 30 % participation rate for women for the period ending with the close of June 30, 2022.

In recruiting new employees, CENTROTEC continues to pursue the goal of improving the balance of cultures and genders in management teams.

German Corporate Governance Code and Declaration of Compliance
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. After due assessment, the Management Board and Supervisory Board of CENTROTEC issued the following currently valid Declaration of Compliance in accordance with Section 161 of the German Stock Corporation Act (AktG) in March 2019:

Declaration by the Management Board and Supervisory Board of CENTROTEC SE, Brilon, on the German Corporate Governance Code (Section 161 of German Stock Corporation Act)

The background

On February 26, 2002 the “Government Commission on the German Corporate Governance Code” first presented a code of practice for listed companies. This Code was last updated on February 7, 2017 and published in the Federal Gazette on April 24, 2017.

Pursuant to Section 161 of German AktG, the Management Board and Supervisory Board of a company listed on the stock exchange are obliged to declare once a year whether and to what extent the code has been and is complied with:

Declaration of Compliance

The Management Board and Supervisory Board of CENTROTEC Sustainable AG declare that the recommendations of the “Government Commission on the German Corporate Governance Code” in the version dated February 7, 2017 are and have been complied with since the last Declaration of Compliance, dated March 2019, with the exceptions stated below.

1) Article 4.2.1 of the Code recommends that the Management Board should have a Chairman or CEO. The Management Board duties are performed jointly and with equal rights by the members of the Management Board. We believe that in view of the size of the Management Board and its structure, it is not appropriate or in the interests of the company to appoint a CEO or Chairman.

2) Article 5.3 of the Code recommends the formation of committees on the Supervisory Board. These shall, however, be dependent on the specific circumstances of the company and the number of members of the Supervisory Board. Our Supervisory Board consists of three members, who consider all matters concerning the company jointly. Consequently, we do not regard the creation of committees to be appropriate in our case. We believe that our view is compatible with the Code, but supply this information as a precautionary measure by way of clarification.

3) Under 5.4.1 the Code recommends that the Supervisory Board, when determining the goals for its composition, should also specify a limit to the period for which a member may serve on it. Bearing in mind the number of upervisory Board members and the shareholder structure, we consider the introduction of a limit to the period of service to be inappropriate in our case.

4) Article 5.4.2 of the Code recommends that the Supervisory Board includes an adequate number of members who – in the board’s own opinion – are deemed to be independent. A member is to be regarded as independent if they have no business or personal relations with the company, its corporate bodies, a controlling shareholder or an affiliated company that could constitute a substantial and not merely temporary conflict of interests. In its own opinion, our Supervisory Board includes an adequate number of independent members. Although individual members of the Supervisory Board are shareholders and occasionally have business relations with the company, this does not constitute a conflict of interests.

Brilon, January 13, 2020

The Management Board:
Dr Thomas Kneip
[Management Board]
Bernhard Pawlik
[Management Board]
Günther Wühr
[Management Board]

On behalf of the Supervisory Board:
Guido A Krass
[Supervisory Board Chairman]


The currently valid version of the Declaration of Compliance as well as the declarations for the past five years are permanently available on the company’s website.

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 2020

CENTROTEC SE

The Management Board

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