Declaration pursuant to § 161 of the German Stock Corporation Act (§ 289f para. 2 no. 1HGB)
In December 2021, 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/en/investor-relations-3/corporate-governance/declaration-of-compliance/ in the Corporate Governance section:
“Declaration pursuant to § 161 of the German Stock Corporation Act ׀ December 2021
The Management Board and Supervisory Board of ADLER Real Estate Aktiengesellschaft declare pursuant to § 161 of the German Stock Corporation Act:
“Since issuing its last declaration pursuant to § 161 of the German Stock Corporation Act (AktG) in December 2020 and updating it in May 2021, 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 16 December 2019 (“Code”), with the following exceptions, and will continue to comply with the recommendations in the future with the following exceptions:
- 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 to D.5 of the Code, the Supervisory Board has not currently formed an audit committee, nomination committee or other committees, as the Supervisory Board currently consists of three members and the formation of committees would thus not lead to any increase in the effectiveness of the work of the Supervisory Board.
- 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 2021“
In March 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/en/investor-relations-3/corporate-governance/declaration-of-compliance/ in the “Corporate Governance” section:
Update of the Declaration of Conformity of December 2021 with the German Corporate Governance Code pursuant to section 161 (1) of the German Stock Corporation Act (AktG)
The Management Board and Supervisory Board of ADLER Real Estate AG published their last declara- tion of compliance in December 2021. Due to further deviations from the recommendations of the Ger- man Corporate Governance Code (“Code”) as amended on December 16, 2019, which have occurred in the meantime, it is necessary to update the deviations declared in the Declaration of Compliance of December 2021:
In deviation from Recommendation F.2 of the Code as amended on December 16, 2019, the consoli- dated financial statements and the Group management report for the fiscal year ending December 31, 2021, will not be published within the period recommended by the Code, but within the statutory period. Reason for the deviation is the ongoing audit activities of the auditor of the financial statements and consolidated financial statements.
In deviation from Recommendation F.2 of the Code as amended on December 16, 2019, the interim reports as of March 31, 2022, June 30, 2022 (half-year report) and September 30, 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.
ADLER Real Estate Aktiengesellschaft
Berlin, March 2022
Previous declarations of compliance of the company are provided in the archive.
Information on the remuneration report for the last financial year, including the auditor’s opinion pursuant to section 162 of the German Stock Corporation Act, the applicable remuneration system pursuant to section 87a para. 1 and 2 sentence 1 of the German Stock Corporation Act, and the last remuneration resolution pursuant to section 113 para. 3 of the German Stock Corporation Act (§ 289f para. 2 no. 1a HGB)
This information is publicly available on ADLER Real Estate AG’s website at https://adler-ag.com/en/investor-relations-3/ in the section “Corporate Governance/Remuneration”.
Relevant disclosures on corporate governance practices (§ 289f para. 2 no. 2 HGB)
In our corporate governance, we strictly comply with the legal 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 compliance of December 2021 and the update of the declaration of compliance of March 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/en/investor-relations-3/ in the “Corporate Governance” section.
Respect for shareholders’ interests, long-term value creation, openness and transparency in corporate communication and corporate control geared to the aforementioned parameters are self-evident guide- lines of our corporate governance. Against this background, the Executive Board and the Supervisory Board work closely together in the interest of the company while maintaining a strict separation of personnel (“dual management system”). The provision of an appropriate risk management system and ensuring compliance are also a matter of course for us. Furthermore, the Executive Board and the Supervisory Board are 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/en/sustainability/nonfinancial_reports-3/). Since the 2020 financial year, this has been part of the Adler Group’s sustainability reporting, https://ir.adler-group.com/websites/adler-group/English/4000/sustainability-report.html.
The Supervisory Board shall discuss with the Executive Board, where necessary, long-term succession planning, taking into account the professional potential of future candidates in conjunction with the requirements of diversity and variety.
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 conduct of meetings, the efficient flow of information between the supervisory board and the executive 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 makes use of an external service provider to evaluate its activities, if necessary.
Description of the working methods of the Executive Board and the Supervisory Board as well as the composition and working methods of their committees (§ 289f para. 2 no. 3 HGB)
The Executive Board shall manage the business of the Company, where applicable jointly, in accord- ance with the statutory provisions and, in addition, in accordance with the Articles of Association of the Company, the rules of procedure for the Executive Board issued by the Supervisory Board, the contracts of the Executive Board, and, where applicable, the schedule of responsibilities and the resolutions of the Executive Board. The rules of procedure regulate, among other things, the adoption of resolutions by the Executive Board and reporting to the Supervisory Board and determine – together with the Articles of Association – 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 Board meetings, by telephone conference or by written procedure. During the reporting period, regular Board meetings were held in accordance with the provisions of the Articles of Association. The Executive Board is in continuous exchange about the management of the company’s business. Without prejudice to the responsibility for the proper management of one’s own business area, each member of the Executive Board is responsible for the entire business of the company as soon as the Executive 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 ac- cordance with the statutory 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 Executive Board and is directly involved in decisions of fundamental entre- preneurial importance in accordance with its rules of procedure and the rules of procedure of the Executive Board. It must determine certain types of transactions for which the Executive Board requires the approval of the Supervisory Board. The Chairman of the Supervisory Board maintains regular contact with the Executive Board and discusses the strategy, business development and risk management of the company with the Executive Board. In addition, the Supervisory Board keeps itself continuously 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 conference or by written circulation procedure.
The Executive Board reports to the Supervisory Board in the joint Supervisory Board meetings on the basis of written Executive Board reports. The main topics of discussion at the Supervisory Board meetings are the course of business, the situation and profitability of the company as well as the planned 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 Executive Board by means of written quarterly reports about the course and situation of business, the profitability of the company as well as 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 executive board. Integrity, professionalism, willingness to perform and familiarity with the sector must go hand in hand with special expertise relevant to the business activities of ADLER Real Estate AG. In order to achieve this objective, the Supervisory Board, also supported by the Company, takes part in appropriate training measures.
Particularly against the backdrop of extraordinary events, the Supervisory Board always considers it its duty to support the Executive Board with professional commitment. The ongoing consolidation of the Adler Group and its effects on the ADLER Real Estate AG subgroup, as well as external factors such as the ongoing pandemic, once again presented ADLER Real Estate AG with challenges in 2021 that had to be met jointly. Last but not least, the allegations made against the Adler Group in October 2021 by the short-seller Viceroy, to which the Adler Group responded by commissioning a special audit by KPMG Forensic, also had a direct impact on the work of the Supervisory Board, which, together with the Management Board, set itself the task of refuting the allegations made and safeguarding ADLER Real Estate AG’s reputation on the capital market.
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 opinion of the Supervisory Board, the Supervisory Board meets these requirements.
All members of the Supervisory Board are independent of ADLER and the Executive 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 to form committees. Against the background that the Supervisory Board of the company consists of three members in accordance with the Articles of Association, no committees have been formed. All members of the Supervisory Board regularly deal with all the tasks assigned to the Supervisory Board as part of their work.
Setting targets and deadlines for the proportion of women on the Executive Board and the Supervisory Board (§ 289f para. 2 no. 4 HGB)
The Supervisory Board should and would like to ensure the greatest possible diversity of skills and characteristics (diversity) on both the Executive Board and the Supervisory Board and also give appropriate consideration to women. In a resolution passed in 2018, the Supervisory Board set the target quota for women on both the Supervisory Board and the Executive Board at 0 % until 2023. However, the goal is that in the medium to long term, the Supervisory Board will be composed of at least 30 % women and at least 30 % men. The goal is also to have at least one woman on the Executive Board, which currently consists of three members, in the medium to long term. 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 personalities.
Diversity concept (§ 289f para. 2 no. 6 HGB)
In addition to the desired future participation of women on the Supervisory Board and the Executive Board, the Supervisory Board is also interested in ensuring diverse compositions in terms of age, educational and professional background, always prioritising professional qualifications. Thus, although the Supervisory Board currently has only a small age range, all members of the Supervisory Board are in a phase with regard to their age that optimally combines sustainable professional experience and seniority with professional activity, professionalism and commitment. In terms of educational and professional background, the Supervisory Board is made up of both academic and non-academic professional edu- cations with different career paths, while always maintaining the necessary sector familiarity. Different professional backgrounds, but in all cases directly related to the company’s sector, are also found on the company’s Executive Board, which also has a wide age range among its members.
The Management Board
Berlin, April 2022