The Management and Supervisory Boards of ADLER Real Estate Aktiengesellschaft declare the following pursuant to § 161 of the German Stock Corporation Act:
ADLER Real Estate AG has since its last declaration in conformity with § 161 of the German Stock Corporation Act complied with the Recommendations of the Governmental Commission Deutscher Corporate Governance Kodex in its valid form at any one time, currently dating from February 7, 2017 (“Code”) and will also comply with the recommendations in the future with the following exceptions:
- At variance with Section 3.8 (3) of the Code, no deductible has been stipulated with respect to the D&O insurance agreement concluded for the Supervisory Board. The Supervisory and Management Boards are of the opinion that concluding a deductible agreement would not improve incentive and performance at Adler Real Estate AG.
- In deviation from Section 4.2.1 of the Code, ADLER Real Estate AG has appointed neither a Chairman nor a Speaker of the Management Board. This is due to the fact that Management Board members Tomas de Vargas Machuca and Maximilian Rienecker have acted in a dual leadership function (co-CEOs) since their appointment as members of the company’s Management Board. The Supervisory Board believes that the function of neither a Chairman nor a Speaker of the Management Board is compatible with the idea of dual leadership (co-CEOs) because a function of this nature would put focus on one of the members.
- At variance with Section 5.3 of the Code, the Supervisory Board has currently not formed any committees (Section 5.3.1). No audit committee has been set up (Section 5.3.2). The duties of the audit committee are carried out by all the members of the Supervisory Board (Section 5.3.2). The Supervisory Board currently consists of the minimum number of three members prescribed by the Corporation Act. The number of Supervisory Board members is not suited to form an audit or other committees.
- At variance with Section 5.3.3 of the Code, the Supervisory Board has not formed a nomination committee. The entire Supervisory Board nominates suitable candidates for the consideration of the shareholders at the General Meeting. The number of members of the Supervisory Board is not suited to establish a nomination committee.
- At variance with Section 5.4.2 of the Code, Supervisory Board members may also carry out board functions or advisory duties for other major competitors of the Company. The Management and Supervisory Boards are of the opinion that the experience gained from such activities can be used profitably for ADLER Real Estate AG.
- In deviation from Section 7.1.2 of the Code, the interim reports dated 30 June 2018 (semi-annual report) and 30 September 2018 (Q3 report) were not published within the period recommended by the Code, but were within the statutory period. The reason in each case was the initial consolidation of Brack Capital Properties N.V., in which a majority interest was acquired in April 2018. For subsequent years, the company shall again comply with the recommendation under Section 7.1.2 of the Code.
ADLER Real Estate Aktiengesellschaft
Berlin, March 2019