CORPORATE GOVERNANCE REPORT

Transcription

1 GRENKELEASING AG GROUP 11 CORPORATE GOVERNANCE REPORT Responsibility and good corporate governance represent the cornerstones of management activity at GRENKELEASING. The Board of Directors, Supervisory Board and executive employees of GRENKELEASING AG identify with the principles of value-based and transparent company management. They are aware of the special significance of these principles for the assessment and valuation of the company by shareholders and capital providers on the capital market and for increasing confidence among present and future customers, employees, business partners and the public at large. GRENKELEASING AG complies with the recommendations of the German Corporate Governance Code dated June 6, 2008 without exception. The Board of Directors and the Supervisory Board have discussed their compliance with the Code in their meetings and passed the declaration of compliance with the Code reproduced on page 15 of this financial report. The declaration can also be found on the website of GRENKELEASING AG. GROUP MANAGEMENT AND MONITORING GRENKELEASING AG has a Board of Directors consisting of five members and a Supervisory Board composed of six members. The Supervisory Board In the fiscal year 2009, the Board of Directors reported to the Supervisory Board regularly, in detail and comprehensively on the economic and refinancing situation of the company, the status of corporate planning and current events. The Supervisory Board coordinated strategic development with the Board of Directors and discussed issues of risk provisioning and risk management. The responsibilities of the Supervisory Board include appointing and monitoring the members of the Board of Directors and adopting the annual financial statements of GRENKELEASING AG and approving the consolidated financial statements, taking into consideration the reports by the auditors and the findings of the Audit Committee (see the Report of the Supervisory Board on page 5). A further key activity is examining and approving acquisitions of companies. The Rules of Procedure of the Supervisory Board provide for the formation of committees. The Supervisory Board of GRENKELEASING AG has formed two committees to assist in the efficient performance of its duties and has transferred certain authorities to them in line with its Rules of Procedure. The committees prepare the issues and resolutions relevant to them, which are then discussed by the Supervisory Board as a whole. The chairs of the committees report to the Supervisory Board in detail on the work of their committees in its meetings. The Audit Committee The Audit Committee consists of three members with special knowledge in the area of accounting and compliance. It primarily deals with issues of external and internal accounting and the systems of corporate planning and risk management at the company. It reviews and monitors the independence of the auditor in accordance with Article of German Corporate Governance Code, determines the audit focus and is responsible for the fee agreement with the auditor. The Audit Committee also prepares the decision of the Supervisory Board on the adoption of the annual financial statements and the approval of the consolidated financial statements. As part of the Supervisory Board s activities under the German Corporate Governance Code, the Audit Committee also deals with compliance issues. The Board of Directors regularly reports to the Audit Committee on the compliance situation in the company.

2 GRENKELEASING AG GROUP 12 Personnel Committee (Executive Committee) The Personnel Committee consists of three members. In particular, it prepares the personnel decisions of the Supervisory Board and is responsible for concluding, amending and terminating employment agreements with the members of the Board of Directors. The Board of Directors The Board of Directors manages the Group under its own responsibility and is responsible for the strategic development of the company and compliance with principles of corporate policy. In addition, it prepares the quarterly financial statements, the annual financial statements of GRENKELEASING AG and the consolidated financial statements. The Board of Directors reports to the Supervisory Board regularly and comprehensively by way of reports and proposals on the company as a whole, issues of strategy and its implementation, planning, business performance, the financial and earnings situation and business risks. The Rules of Procedure of the Board of Directors contain a list of transactions requiring approval. Key decisions by the Board of Directors such as acquisitions and financial measures require the approval of the Supervisory Board. The Board of Directors and the Supervisory Board are liable to pay damages to the company in the event of culpable neglect. Remuneration Structure and Remuneration of the Board of Directors and the Supervisory Board The principles of the remuneration system for the Board of Directors provide for a fixed basic annual salary and a variable remuneration component. It is calculated on the basis of the company s results for the current fiscal year and criteria relating to the long-term success of the company. Remuneration of the Board of Directors EUR Grenke Konprecht Kostrewa Kindermann Dr. Hack Total 2009 Total 2008 Gross salary 328, , , , , ,024, ,023, Performance bonus 156, , , , , , , Bonus 80, , , , , , , Phantom stocks , , Pensions , , , Total costs 565, , , , , ,077, ,664, Total remuneration for the Board of Directors amounted to EUR 2,078k in the 2009 fiscal year (2008: EUR 1,664k). The criteria for the variable remuneration component are defined in advance each year based on the development of EBIT (earnings before interest and taxes) and the development of the key performance indicators of a balanced scorecard (BSC). The attainment of the EBIT growth target is measured at the end of each year and the BSC criteria are measured at the end of each quarter. The main criteria contained in the BSC correspond to the key performance indicators for the long-term development of the Group, such as number of lease agreements and new business. This is intended to increase enterprise value in the long term. An annual pension premium of EUR 21k is paid to a company provident fund for Dr. Hack. On March 12, 2007, the Chairman of the Supervisory Board of GRENKELEASING AG concluded a phantom stock agreement and a reinvestment offer with Dr. Hack for the fiscal years 2007 to It is treated as a cash settlement plan. Under this agreement, Dr. Hack receives entitlement to payment equal to the increase in value of 30,000 shares in GRENKELEASING AG based on a defined

3 GRENKELEASING AG GROUP 13 underlying share price. The share price is the unweighted arithmetic mean of the Xetra closing prices on all trading days from December 1 to December 23 of the respective prior year. The maximum payment arising from this agreement is limited to EUR 600,000 for the period of three years. If the options have any value, the changes in value are taken to profit or loss in the income statement for the relevant fiscal years. Under the programme, Dr. Hack is required to invest the respective net amount paid plus a personal contribution of 25 percent of that amount in GRENKELEASING AG shares. The basic share price for 2009 was EUR In 2009, the unweighted arithmetic mean of the Xetra closing prices was higher than the defined basic share price, which means that the phantom stocks multiplied by the difference in share price had a value of EUR 300,195 as of December 31, The Company has taken out directors and officers liability insurance for its executive bodies and top managers under which the insured party must pay a fixed deductible of EUR 3,000 per claim. Members of the Board of Directors are therefore also covered by the insurance. The premium cannot be split individually. No further benefits have been agreed with any members of the Board of Directors in connection with the termination of their appointment. Moreover, no member of the Board of Directors received benefits or promises from third parties relating to his position as a member of the Board of Directors in the past fiscal year. Remuneration of the Supervisory Board Name Function Basic remuneration 2009 Audit Committee Personnel Committee Variable remuneration Travel expenses Total 2009* Total 2008* EUR Prof. Dr. Lipp Chairman 9, , , , Münch Supervisory Board 6, , , , Dr. Nass Supervisory Board 6, , , , , Staudt Supervisory Board 6, , , , Dr. Sträter Supervisory Board 6, , , , Witt Deputy Chairman 6, , , , Total 39, , , , , , , * fixed remuneration, variable remuneration and travel expenses In the fiscal year 2009, the members of the Supervisory Board received a total of EUR 68.2k (previous year: EUR 72.3k) including travel expenses in remuneration for their work. The individual summary of Supervisory Board remuneration, broken down by fixed and variable components, is shown in the above table. The remuneration of the members of the Supervisory Board is regulated in the articles of incorporation of GRENKELEASING AG and determined by the Annual General Meeting. As per the articles of incorporation, the members of the Supervisory Board received fixed annual remuneration of EUR 6,000, the Chairman EUR 9,000. There is also variable remuneration if a dividend of more than EUR 0.20 is distributed to shareholders. If this occurs, the fixed remuneration is increased by one quarter of the percentage rate by which the dividend per share exceeds EUR The variable remuneration component is limited to a maximum of 50 percent of the fixed remuneration of a member of the

4 GRENKELEASING AG GROUP 14 Supervisory Board. Remuneration increases by EUR 600 for each Supervisory Board member who is also a member of a committee, or by EUR 900 for the Chairman of a committee per year. If membership of the Supervisory Board is not for a full fiscal year, the fixed remuneration, and thus the basis for variable remuneration, as well as the remuneration for members or chairs of committees is reduced accordingly. In addition, the directors and officers liability insurance of GRENKELEASING AG, which was described in the previous section Remuneration of the Board of Directors, also covers members of the Supervisory Board. The company also reimburses the members of the Supervisory Board for their cash expenses and VAT insofar as they are entitled to invoice the tax separately and actually do so. Accounting, Audits of Financial Statements and Financial Reporting Group accounting for the fiscal year from January 1 to December 31, 2009 was conducted in accordance with the provisions of International Financial Reporting Standards (IFRSs) as adopted in the EU. In preparing the consolidated financial statements and the Group management report, the company also complied with and applied the provisions Section 315 a (1) HGB. The consolidated financial statements were audited in accordance with the provisions of Section 317 HGB and German generally accepted standards for the audit of financial statements promulgated by the Institut der Wirtschaftsprüfer [Institute of Public Auditors in Germany] (IDW, IDW PS 200). The Audit Committee ensures the independence of the auditor and proposes an auditor for election to the Annual General Meeting. The auditor is elected by the Annual General Meeting in accordance with the statutory provisions. Transparency and Reporting to Shareholders GRENKELEASING uses the Internet to report to shareholders, all capital market participants and the media comprehensively, equally and promptly. All ad hoc disclosures and press releases, annual and quarterly reports and notifications in accordance with Section 15 of the German Securities Trading Act are published in German and English. The declarations of compliance with the German Corporate Governance Code are available on the website. Shareholders can also find out about the Group, its management and organisational structure on the Internet. Notifications by the company are published in the electronic Federal Gazette (Bundesanzeiger). Shareholders can watch the report by the Board of Directors and the general debate at the Annual General Meeting on the Internet. Proxies appointed by the company can be entrusted to exercise voting rights, even in absentia. The dates of regular financial reporting are shown in the financial calendar. The GRENKE shares have been reported on in detail in the section Our Shares and Investor Relations on page 16. Controlling and Risk Management The risk management system at the GRENKELEASING AG Group has the function of systematically identifying, assessing, documenting and disclosing risks to the parent company and subsidiaries. It is designed to enable employees and management to address risks responsibly and make the most of the opportunities that present themselves. The GRENKELEASING AG risk management system is continually expanded and operated using a risk management tool on the intranet of GRENKELEASING Group. Since the 2009 Annual Tax Act came into effect, leasing companies must also comply with the Minimum Requirements for Risk Management [Mindestanforderungen an das Risikomanagement (MaRisk)] published by Deutsche Bundesbank and the German Federal Office for Supervision of Financial Services (BaFin). Leasing companies were granted 2009 as a transition period for

5 GRENKELEASING AG GROUP 15 implementation. Full implementation is required in The GRENKELEASING AG Group largely implemented MaRisk in The appropriate risk management and controlling processes demanded by MaRisk for the key types of risks counterparty, market value, liquidity and operational risks have been implemented in the GRENKELEASING AG Group. The functionality of the risk management system and the results of its measures are reviewed by the internal audit department. The internal audit department reports directly to the Board of Directors. Details on the risk management system can be found on page 38. Declaration of Compliance The Board of Directors and Supervisory Board of GRENKELEASING AG issued the following declaration of compliance on April 27, 2009: Following due examination, the Board of Directors and the Supervisory Board of GRENKELEASING AG issue the following declaration of compliance: GRENKELEASING AG complies with the recommendations of the German Corporate Governance Code dated June 6, Since issuing its last declaration on April 7, 2008, GRENKELEASING AG has complied with all recommendations of the German Corporate Governance Code as currently amended. Baden-Baden, Germany, April 27, 2009 GRENKELEASING AG The Supervisory Board The Board of Directors