Gesco : Declaration of Corporate Governance (235 KB)

Declaration of Corporate Governance

in accordance with Sections 289f and 315d of the German ­Commercial Code (HGB) Financial year 2022

In this declaration, the Executive Board and the Supervisory Board report on the corporate governance of the Company pursuant to Sections 289f, 315d of the German Commercial Code (HGB) and in accordance with Principle 22 of the German Corporate Governance Code (hereinafter also referred to as "GCGC" or "Code").

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The Executive Board and Supervisory Board of GESCO SE are committed to sustainable corporate governance. The business model is designed for the long term and all measures are geared towards the goal of sustainable positive develop- ment. The Executive Board and Supervisory Board of GESCO SE identify with the aim of the code to promote good, trustworthy corporate governance oriented towards

the benefit of shareholders, employees and customers.

• Section 161 of the German Stock Corporation Act requires an annual declaration of compliance with the Code's rec- ommendations. The preamble to the Code expressly pro- vides for the possibility of a justified deviation from Code recommendations. It is intended to enable companies to take into account sector- or Company-specificparticulari- ties. Accordingly, deviations from the Code should not be seen as negative per se, but can be in the interest of good corporate governance, especially for smaller companies.

In December 2022, the Executive Board and the Supervisory Board issued the legally required declaration of compliance and made it permanently available to the shareholders on the Company's website (www.gesco.de). This declaration is based on the currently valid version of the Code dated

28 April 2022.

The declaration of compliance of December 2022 is part of this corporate governance statement. Historical declarations of conformity are also available to the public on our website www.gesco.de under the heading "ABOUT US/ COMPLIANCE AND CORPORATE GOVERNANCE". The articles of association of GESCO SE are also available on the website under this heading.

Compliance management system

GESCO Group counters compliance risks such as corruption, cartel violations and criminal activity with a suitable compliance management system, which includes a Group-wide code of conduct, accompanying guidelines and work in- structions, an online information system (rulebook) for GESCO Group employees, accompanying training courses, case-related spot checks and a whistleblower system

for employees and outsiders. It is the task of the managing directors of the subsidiaries to anchor the respective requirements and principles in their companies. The code of conduct for GESCO Group employees as well as further information on the whistleblower system can be found on the website www.gesco.de under "ABOUT US/ COMPLIANCE

AND CORPORATE GOVERNANCE".

Shareholders and Annual General Meeting

The shareholders exercise their rights and voting rights at the Annual General Meeting. Each GESCO SE share grants one vote. GESCO SE publishes all documents relevant to the agenda in good time prior to the Annual General Meeting on its website www.gesco.de under the heading "Inves- tor Relations". In the course of the invitation to the Annual General Meeting, the Company expressly requests shareholders to exercise their voting rights. In order to make it easier for shareholders to exercise their voting rights, the Company appoints a proxy to represent them at the Annual General Meeting. The Company provides an online tool for shareholders to order admission tickets and to vote by post.

Via an online tool, the Company enables shareholders to order admission tickets, to cast postal votes and to authorise the Company's proxy. The Company considers the highest possible attendance at the Annual General Meeting to be an important contribution to shareholder democracy and to the formation of a majority of shareholders' will at the Annual General Meeting. GESCO SE publishes the invitation to the Annual General Meeting as well as reports and information required for the adoption of resolutions in accordance with the provisions of stock corporation law. This information is also available on the Company's website. Since the IPO in 1998, the Company has published the voting results on its website on the same day as the Annual General Meeting.

After the Annual General Meeting of 30 June 2021 was held as a virtual Annual General Meeting without the physical presence of the shareholders or their proxies due to the special circumstances of the COVID19 pandemic, the Annual General Meeting on 24 August 2022 was again held in the usual pres- ence. The Executive Board and Supervisory Board have declared their intention to hold future Annual General Meetings in person, provided that external circumstances permit.

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Executive Board and Supervisory Board

The Executive Board is responsible for the management of the Company, while the Supervisory Board monitors the management and advises the Executive Board. The Executive Board and the Supervisory Board work closely together in a spirit of trust within the framework of their legally defined duties. The Executive Board informs the Supervisory Board regularly, promptly and comprehensively about cor-

porate planning, the earnings and financial situation, risk management, strategy development and acquisition pro- jects. A catalogue of transactions requiring the approval of the Supervisory Board defines those decisions of the Ex-

ecutive Board that require the approval of the Supervisory Board.

Neither in the reporting year nor in the previous year were

there any remunerations or benefits granted to members of

the Supervisory Board for personally rendered services such as consulting and mediation services. Conflicts of interest arose neither for members of the Executive Board nor for members of the Supervisory Board.

Executive Board

The Executive Board is responsible for managing GESCO SE and conducting its business. The members of the Executive Board jointly manage the Company's business in accordance with the law, the Articles of Association and the rules of procedure issued by the Supervisory Board. The Executive Board develops the strategic development of the Company, coordinates it with the Supervisory Board and implements it. In addition, the Executive Board defines the goals, de­ velops the planning and manages the Company's internal control and risk management system as well as controlling. In addition, the Executive Board prepares the quarterly re-

ports, the half-yearly financial report, the individual financial statement of GESCO SE and the consolidated financial

statement. The Executive Board bases its actions and decisions on the interests of the Company.

The rules of procedure for the Executive Board issued by the Supervisory Board regulate the responsibilities of the Executive Board and define the work of the committees in more detail. The rules of procedure also regulate the details of the Executive Board's reporting to the Supervisory Board. In addition, they determine which decisions of the Executive Board require the approval of the Supervisory Board. The age limit for the Executive Board is 65 years.

In the reporting year, the Executive Board consisted of

Mr Ralph Rumberg (CEO) and Ms Kerstin Müller-Kirchhofs (CFO) until 30 April 2022 and Ms Andrea Holzbaur (CFO) from 26 September 2022.

Relevant disclosures on corporate ­governance practices

The members of the Executive Board shall conduct the business of the Company with the due care and diligence of a prudent and knowledgeable manager in compliance with the statutory provisions, the Articles of Association and the Rules of Procedure of the Executive Board.

In addition, the GESCO Code of Conduct contains the basic rules and principles for our actions resulting from our self-image,including our conduct towards customers, business partners, competitors, other third parties, and the public. The GESCO Code of Conduct is available on our web- site www.gesco.de under the heading "ABOUT US/ COMPLI-

ANCE AND CORPORATE GOVERNANCE".

GESCO SE does not have any relevant corporate governance practices that go beyond these requirements.

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Long-term succession planning for the Executive Board

Together with the Executive Board, the Supervisory Board ensures long-term succession planning for the Executive Board. The Supervisory Board regularly deals with succession planning for the Executive Board, also irrespective of events. Taking into account the requirements of the German Stock Corporation Act (AktG), the Code and the target set by the Supervisory Board for the proportion of women on the Executive Board, the Supervisory Board develops a

profile of requirements with the essential characteristics and qualifications of candidates to be considered for Executive Board positions. The departments to be headed and the strategic planning of the Company also influence the requirements profile. In the event that a new appointment or

replacement is required on the Executive Board, the Supervisory Board conducts structured selection interviews with selected candidates, based on which the new appointment or replacement is made. If necessary, the Supervisory Board is supported by external consultants in the development of

requirement profiles and the selection of suitable candidates.

Supervisory Board

The Supervisory Board appoints the Executive Board, monitors its management and advises it on the management of the Company. Detailed information on the work of the Supervisory Board in the reporting year is contained in the Report of the Supervisory Board.

The Supervisory Board of GESCO SE is deliberately kept small.

This has proven to be extremely effective, as both strategic

topics and detailed issues can be discussed intensively in the Supervisory Board as a whole. We see the fact that all members of the Supervisory Board are equally involved in all ­topics as a strength. The formation of committees beyond the audit committee, which is required by law from 1 January 2022 and which has been established in the meantime, is therefore not considered appropriate. Accordingly, the Supervisory Board of GESCO SE did not have any other committees

in the reporting year. In this respect, the Executive Board and Supervisory Board declare a deviation from recommendation D.5 DCGK.

In accordance with the requirements of the law and the

Articles­ of Association, the Supervisory Board has drawn up rules of procedure in line with the recommendation in

D.1 DCGK, which are available on the website www.gesco.de under the heading "ABOUT US/ COMPLIANCE AND CORPORATE GOVERNANCE". The Chairman coordinates the work of the Supervisory Board, chairs its meetings and represents the interests of the Supervisory Board externally.

In the year under review, the Supervisory Board consisted of Mr Klaus Möllerfriedrich (Chairman), Mr Stefan Heimöller (Deputy Chairman), Dr Nanna Rapp and Mr Jens Große-­ Allermann. In the opinion of the Supervisory Board, it is appropriate for at least two members of the Company's Supervisory Board to be independent within the meaning of the Code. Currently, all members of the Supervisory Board meet the independence criterion. Mr Möllerfriedrich has been a member of the Supervisory Board for more than twelve years, but the Supervisory Board still considers Mr Möller- friedrich to be independent in the sense of recommendation C.7 DCGK. In view of his performance in office to date, the Supervisory Board is convinced that Mr Möllerfriedrich, despite his many years of activity on the Supervisory Board, continues to possess the critical distance to the Company and its Executive Board necessary for the performance of his office. Apart from that, Mr Möllerfriedrich has no personal or business relationship with the Company or its Executive

Board that could constitute a conflict of interest; he also

does not hold any shares in the Company. All members of

the Supervisory Board also possess the professional qualifi-

cation as financial experts pursuant to § 100 (5) of the German Stock Corporation Act (AktG). As a whole, the members of the Supervisory Board are familiar with the sector in which GESCO SE operates.

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In February 2022, the Chairman of the Supervisory Board

conducted a self-evaluation of the efficiency of the Supervi-

sory Board's work. For this purpose, the Chairman of the Supervisory Board held discussions with the other members of the Supervisory Board based on a structured catalogue

of questions. Overall, the audit confirmed the efficient work

of the Supervisory Board. The approaches for improvement gained during the audit were taken into account in the ­future work of the Supervisory Board.

Composition of the Supervisory Board

and Diversity among the Supervisory Board, Executive Board and Executives

According to recommendation C.1 sentence 1 DCGK, the supervisory board shall specify concrete objectives for its

composition and develop a competence profile for the entire

body. In doing so, the Supervisory Board shall pay attention to diversity.

For the Supervisory Board of GESCO SE, diversity is not

defined­ solely by gender or nationality, but also and espe-

cially by professional diversity and a well-balanced mix

of expertise from different fields. The areas of expertise to

be covered by the Supervisory Board of GESCO SE include, in particular, accounting, auditing and monitoring the ef-

fectiveness of internal control systems ("financial expert"),

capital market experience, entrepreneurial expertise and experience as well as broad-based expertise relating to

strategic, operational and financial entrepreneurial func-

tions. The Supervisory Board considers these competences to be fully covered in the current composition of the Board and represented as follows:

Area of competence		Möllerfriedrich		Heimöller		Dr Rapp		Große-Allermann
Organisation of the Supervisory Board's work		x
Corporate governance		x
Legal		x
Taxes		x
Controlling and risk management		x		x		x		x
Accounting		x		x		x		x
Personnel				x		x		x
Production				x		x
Financing		x		x		x		x
Capital market		x						x
M&A		x		x		x		x
Strategy		x		x
Internationalisation						x		x

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