Declaration pursuant to section 161 of the German Stock Corporation Act (AktG) (section 289f para. 2 no. 1 HGB)
In December 2022, the Management Board and Supervisory Board of ADLER Real Estate Aktiengesellschaft issued the following declaration pursuant to § 161 of the German Stock Corporation Act (AktG), which was published on the shareholders’ website at https://adler-ag.com/investor-relations/corporate-governance/entsprechenserklaerung/ in the Corporate Governance section:
Declaration on the German Corporate Governance Code pursuant to Section 161 of the German Stock Corporation Act ׀ December 2022
“The Management Board and Supervisory Board of ADLER Real Estate Aktiengesellschaft declare pursuant to § 161 AktG:
Since issuing the last declaration pursuant to § 161 of the German Stock Corporation Act (AktG) in December 2021 and the update in March 2022, ADLER Real Estate Aktiengesellschaft has complied with the recommendations of the “Government Commission on the German Corporate Governance Code” as amended from time to time, currently dated 28 April 2022 (“Code“), with the following exceptions, and will continue to comply with the recommendations in the future with the following exceptions:
- In deviation from recommendation A.1 of the Code, the corporate planning does not currently contain any sustainability-related goals due to the special situation of the company, as the current economic situation of the company does not allow for the implementation of CO2 -reducing measures.
- In deviation from Recommendation C.12 of the Code, members of the Supervisory Board may also perform board functions or advisory duties at significant competitors of the Company. The Management Board and Supervisory Board are of the opinion that the experience gained from such activities can be used profitably for ADLER Real Estate AG.
- In deviation from recommendations D.2 and D.4 of the Code, the Supervisory Board has not currently formed a nomination committee or other committees, as the Supervisory Board currently consists of three members and the formation of committees would thus not lead to an increase in the effectiveness of the work of the Supervisory Board. Since the supervisory board consists of only three members, it is also the Audit Committee pursuant to section 107 (4) sentence 2 AktG.
- In deviation from recommendation D.3 of the Code, the Chairman of the Supervisory Board also chairs the Audit Committee. The Supervisory Board consists of only three members. The other members of the company’s Supervisory Board are members of the Board of Directors of the parent company and controlling shareholder Adler Group S.A. The assumption of the chairmanship of the Audit Committee by the Chairman of the Supervisory Board is intended to comply with recommendation C.10 of the Code that the chairman of the Audit Committee should be independent of the controlling shareholder.
- In deviation from Recommendation F.2 of the Code, the consolidated financial statements and the group management report for the financial year ending 31 December 2022 will not be published within the period recommended by the Code, but within the statutory period. Reason for the deviation is the fact that the parent company, which does not reside in Germany, has provided a corresponding schedule for its economic reporting.
- In deviation from Recommendation F.2 of the Code, the interim reports as at 31 March 2023, 30 June 2023 (half-yearly report) and 30 September 2023 will not be published within the period recommended by the Code, but within the statutory period. Reason for the deviation is the fact that the parent company, which does not reside in Germany, has provided a corresponding schedule for its economic reporting.
- In deviation from recommendation G.2, the Supervisory Board does not determine a specific target total remuneration for each individual Executive Board member, but approves the remuneration granted to some Executive Board members by Adler Group S.A. within the framework of Group employment contracts.
ADLER Real Estate Aktiengesellschaft
Berlin, December 2022″
Previous declarations of compliance of the company are provided in the archive.
Information on the remuneration report on the last financial year, the applicable remuneration system pursuant to section 87a para. 1 and 2 sentence 1 of the German Stock Corporation Act (AktG) as well as the last remuneration resolution pursuant to section 113 para. 3 of the German Stock Corporation Act (section 289f para. 2 no. 1a HGB)
This information is publicly available on ADLER Real Estate AG’s website at https://adler-ag.com/investor-relations/corporate-governance/verguetung/ in the “Corporate Governance/Remuneration” section.
Relevant disclosures on corporate governance practices (§ 289f para. 2 no. 2 HGB)
In our corporate governance, we strictly comply with the statutory requirements, the provisions of the Articles of Association of ADLER Real Estate AG and the requirements of the German Corporate Governance Code (GCGC), with which we comply with the exceptions stated in our declaration of conformity dated December 2022. Another guideline is the Code of Conduct of the Company and the Adler Group, which is publicly available on ADLER Real Estate AG’s website at https://adler-ag.com/investor-relations/corporate-governance/code-of-conduct/ in the “Corporate Governance” section.
Respect for shareholder interests, long-term value creation as well as openness and transparency in corporate communication and corporate control geared to the aforementioned parameters are self-evident guidelines of our corporate governance. In compliance with a strict separation of personnel (“dual management system”), the Management Board and the Supervisory Board work closely together against this background in the interest of the company. The provision of an appropriate risk management system as well as ensuring compliance are also a matter of course for us. The Management Board and Supervisory Board are also of the opinion that the consideration of non-financial aspects such as employee and social concerns, but also environmental concerns, must be essential components of responsible corporate management and corporate governance and work together towards these goals. In this context, the company has been publishing its non-financial reporting since the 2017 financial year, https://adler-ag.com/nachhaltigkeit/nichtfinanzielle_berichterstattung/. Since the 2020 financial year, this has been done as part of the Adler Group’s sustainability reporting, https://www.adler-group.com/nachhaltigkeit/nachhaltigkeitsberichte.
The Supervisory Board discusses long-term succession planning with the Management Board, where necessary, taking into account the professional potential of future candidates in conjunction with diversity requirements.
The Supervisory Board regularly assesses its activities with regard to the effectiveness of the fulfilment of its tasks. Due to the small size of the board, it is possible for the Supervisory Board to enter into direct exchange on this matter at all times. The Supervisory Board does this at regular intervals. It specifically reviews its working methods with regard to the planning and execution of meetings, the efficient flow of information between the Supervisory Board and the Management Board, the timely and targeted addressing of issues relevant to the company, and the appropriate performance of its duties as a supervisory body with a supporting function. The Supervisory Board also uses an external service provider to evaluate its activities when necessary.
Description of the working methods of the Management Board and Supervisory Board as well as the composition and working methods of their committees (§ 289f para. 2 no. 3 HGB)
The Management Board conducts the business of the Company under joint responsibility in accordance with the statutory provisions and, in addition, in accordance with the Articles of Association of the Company, the rules of procedure for the Management Board issued by the Supervisory Board, the Management Board contracts, the business allocation plan, if applicable, and the Management Board resolutions. The rules of procedure regulate, among other things, the adoption of resolutions by the Management Board and reporting to the Supervisory Board and – together with the Articles of Association – determine which measures and transactions of the company require the approval of the Supervisory Board.
The rules of procedure of the Management Board of ADLER Real Estate Aktiengesellschaft set an age limit of sixty-seven for the Management Board.
Resolutions are passed either at Management Board meetings, by telephone or video conference, or in writing. During the reporting period, regular meetings of the Management Board were held in accordance with the provisions of the Articles of Association. The Management Board is in continuous communication about the management of the company’s business. Notwithstanding the responsibility for the proper management of one’s own business area, each member of the Management Board is responsible for the entire business of the company as soon as the Management Board consists of several persons.
The Supervisory Board, consisting of the Chairman of the Supervisory Board, the Deputy Chairman of the Supervisory Board and one other member of the Supervisory Board, carries out its activities in accordance with the legal provisions, the Articles of Association and its rules of procedure. The members of the Supervisory Board are not bound by orders or instructions. The Supervisory Board appoints, advises and supervises the Management Board and is directly involved in decisions of fundamental entrepreneurial importance in accordance with its rules of procedure and the rules of procedure of the Management Board. It has to determine certain types of transactions for which the Management Board requires the approval of the Supervisory Board. The Chairman of the Supervisory Board maintains regular contact with the Management Board and consults with it on the strategy, business development and risk management of the company. In addition, the Supervisory Board keeps itself informed about the course of business through regular meetings and individual discussions. It adopts its resolutions in the course of its Supervisory Board meetings, by telephone or video conference, or by written circular.
The Management Board reports to the Supervisory Board in the joint Supervisory Board meetings on the basis of written Management Board reports. The main topics of discussion in the Supervisory Board meetings are the course of business, the situation and the profitability of the company as well as the intended business policy and other fundamental questions of corporate governance, such as risk management and compliance. In addition, the Supervisory Board is regularly informed by the Management Board by means of written quarterly reports on the course and situation of business, the profitability of the company as well as on the intended business policy and other fundamental questions of corporate planning.
The Supervisory Board has set concrete goals for its composition and developed a competence profile for the entire board. According to this, the Supervisory Board should be composed in such a way that it combines all the necessary knowledge, skills and professional experience in such a way that it can properly fulfil its statutory duties, in particular the supervision and advice of the Management Board. Integrity, professionalism, willingness to perform and sector familiarity must go hand in hand with special expertise relevant to ADLER Real Estate AG’s business activities. In order to achieve this objective, the Supervisory Board, also supported by the Company, takes advantage of appropriate training measures.
Especially against the backdrop of extraordinary events, the Supervisory Board always considers it its duty to support the Management Board with professional commitment. As a subsidiary of Adler Group S.A., ADLER Real Estate AG is directly affected by the comprehensive restructuring measures that the Adler Group is currently undergoing and which are being accompanied by bondholders. In this regard, the Supervisory Board considers itself responsible to the Management Board for providing competent and prudent advice and support in its strategic and operational decisions.
In addition, at least one Supervisory Board member must have expertise in the field of accounting and at least one other Supervisory Board member must have expertise in the field of auditing, and all Supervisory Board members must be familiar with the real estate sector (cf. § 100 para. 5 AktG). In the assessment of the Supervisory Board, the Supervisory Board meets these requirements. Likewise, the expertise on sustainability issues required by the German Corporate Governance Code is ensured.
All members of the Supervisory Board are independent of ADLER and the Management Board. The Chairman of the Supervisory Board, Martin Billhardt, is considered independent of Adler Group S.A. – in view of the ownership structure.
The rules of procedure of the Supervisory Board provide for a maximum period of membership of fifteen years and a maximum age limit of seventy-five years.
According to its rules of procedure, the Supervisory Board is authorised and required by the German Corporate Governance Code to form committees. Against the background that the Supervisory Board of the company consists of three members in accordance with the Articles of Association, however, no committees have been formed. All members of the Supervisory Board regularly deal with the entirety of the tasks assigned to the Supervisory Board within the scope of their activities. Since the Supervisory Board consists of only three members, it also forms the Audit Committee in accordance with § 107 para. 4 sentence 2 of the German Stock Corporation Act (AktG) and thus consists of the Chairman of the Supervisory Board Martin Billhardt, the Deputy Chairman of the Supervisory Board Thilo Schmid and the Supervisory Board member Thomas Zinnöcker. The Chairman of the Supervisory Board is also the Chairman of the Audit Committee. The company thus deviates from a corresponding recommendation of the German Corporate Governance Code. However, this ensures that the chairman of the audit committee is independent of the controlling shareholder. The chairperson has expertise in both accounting and auditing.
Further details, including information on professional suitability, can be found in the qualification matrix.
Determination of targets and deadlines for the proportion of women on the Management Board and the Supervisory Board (section 289f (2) no. 4 HGB); diversity concept (section 289f (2) no. 6 HGB)
The Supervisory Board should and would like to ensure the greatest possible diversity of skills and characteristics (diversity) on both the Management Board and the Supervisory Board and also give appropriate consideration to women. In a resolution passed in 2023, the Supervisory Board set the target quota for women on both the Supervisory Board and the Management Board at 0 % by 2028. The goal is still for the Supervisory Board to be composed of at least 30 % women and at least 30 % men in the medium to long term. The goal is also to have at least one woman on the Management Board in the medium to long term.
In addition to the desired future participation of women in the Supervisory Board and the Management Board, the Supervisory Board is also interested in ensuring diverse compositions in terms of age, educational or professional background in both bodies.
However, when selecting suitable candidates, the Supervisory Board always gives priority to their professional qualifications. The Supervisory Board always strives to select the most suitable individuals. ADLER Real Estate AG is a subsidiary of Adler Group S.A. The Adler Group is currently undergoing comprehensive restructuring measures supported by bondholders. Monitoring the implementation of the restructuring measures, also on the part of the Supervisory bodies, requires a great deal of detailed knowledge of the internal constitution of the company as well as the complex corporate structure. Moreover, these requirements must be seen in connection with the high demands placed by the legislator on the expertise of the Supervisory Board. Against this backdrop, the Supervisory Board of ADLER Real Estate has decided, also in view of its responsibility to the Company, to select persons when filling vacant Supervisory Board and Management Board mandates who already meet the aforementioned requirements at the time of assuming the mandate and do not first need to be familiarised with them. This group of persons currently does not include any women and does not fulfil any diversity criteria with regard to age or nationality. However, the Supervisory Board is of the opinion that in this particular situation, priority must be given to selecting the most suitable persons.
The current Supervisory Board has only a small age range, but all members of the Supervisory Board are at a stage in terms of their age that optimally combines sustained professional experience and seniority with professional activity, professionalism and commitment. In terms of educational and professional backgrounds, the Supervisory Board is made up of both academic and non-academic professional educations with different career paths, always maintaining the required sector familiarity. Different professional backgrounds, but always directly related to the company’s sector, also exist among the company’s Management Board.
The Management Board
Berlin, April 2023
Annex to the Corporate Governance Statement pursuant to § 289f HGB FY 2022 of ADLER Real Estate AG
Qualification matrix Supervisory Board members according to recommendation C.1 of the German Corporate Governance Code (‘Code’)
Name | Martin Billhardt | Thilo Schmid | Thomas Zinnöcker | |
Duration of affiliation | Member of the Supervisory Board since/function | 20.03.2020; Chairman | 03.02.2014; Vice Chairman | 31.08.2022 |
Diversity | Date of birth | 01.01.1962 | 09.03.1965 | 28.05.1961 |
Gender | male | male | male | |
Nationality | german | german | german | |
Educational background | Businessman | Computer Science | Dipl.-Kaufmann | |
Committees | Member of the Audit Committee pursuant to section 107 (4) AktG | Chairman | Vice-Chairman | Member |
Personal suitability | Independence according to Code recommendation C.6, C.9 | X | ||
Independence according to Code recommendation C.7 | X | X | X | |
Independence according to Code recommendation C.10 | X | |||
Limitation of offices according to Code recommendation C.4 | X | X | X | |
Expertise and | Expertise pursuant to § 100 para. 5 AktG – Accounting | X | X | X |
professional emphases | Expertise pursuant to § 100 para. 5 AktG – Audit of financial statements | X | X | X |
Business segment and sector confidentiality pursuant to section 100 para. 5 AktG | X | X | X | |
Sustainability expertise according to Code recommendation C.1 | X | X | ||
Finance | X | X | X | |
Distribution and leasing | X | X | X | |
Mergers & Acquisitions | X | X | X | |
Sustainability | X | X | ||
Transformation | X | X | X | |
Law | X | X | X | |
Risk and Compliance Management | X | X | X |