Q beyond : Corporate Governance Statement

Corporate Governance Statement

pursuant to §§ 289f, 315d HGB Corporate Governance Report 2023

Contents

01 - 03

04 - 08

Basic Disclosures on Corporate Governance

01 Disclosures on the Company and the Group

01 Declaration in Respect of the German Corporate Governance Code (Declaration of Compliance)

03 Remuneration Systems and Remuneration Report

Management Board

04 Composition, Succession Planning and Requirements Profile

06 Diversity Pursuant to § 111 (5) and § 76 (4) AktG for Supervisory Board, Management Board and

Management Levels

1. Mode of Operation and Company Management
2. Cooperation with the Supervisory Board

09 - 18 Supervisory Board

09	Members and Diversity
09	Targets for Supervisory Board Composition
	and Competence Profile
13	Competence Profile	Met in Full
14	Qualifications Matrix	of the Supervisory Board

1. Mode of Operation of the Supervisory Board and its Committees
2. Self-Assessmentof the Work Performed
   by the Supervisory Board and its Committees

19

20 - 21

Company Reporting and Audit

19 External Financial Reporting and

Sustainability Report

19 Audit

Shareholders and Annual General Meeting

20 Shareholder Structure

1. Transparency and External Reporting
2. Annual General Meeting

Basic Disclosures on Corporate Governance	01

Basic Disclosures on Corporate Governance

Disclosures on the Company and the Group

q.beyond AG ("q.beyond") is a listed stock corpora­ tion governed by German law and is entered in the Commercial Register of Cologne District Court under number HRB 28281. In its corporate management and supervision, the IT service provider chiefly abides by the requirements of German law, the ­provisions of the German Corporate Governance Code (hereinafter the "Code" or "DCGK") and the company's Articles of Association, which can be viewed on the internet at www.qbeyond.de/satzung

(only available­ in German).

iaries at nearshoring locations: SIA Q.BEYOND, which is located in Riga/Latvia, and q.beyond ibérica S.L., which is based in southern Spain. ­Furthermore, q.beyond holds 51% stakes in two further companies: the data analytics specialist q.beyond Data Solutions GmbH, formerly known as productive-data GmbH, and q.beyond logineer GmbH, which markets turnkey IT services for me­ dium-sized logistics companies. q.beyond logineer GmbH in turn owns 100% of the shares in q.beyond logineer India Private Limited. Further subsidiaries address digitalisation in the retail sector and the development of software tailored to the needs of logistics companies.

q.beyond has a dual management structure. The Management Board manages the company under its own responsibility while the Supervisory Board appoints, supervises and advises the Management Board. Members of both boards are bound solely by the company's interests and work together constructively and on a basis of trust.

q.beyond has its domicile in Cologne and locations­ throughout Germany. The Group's structure was simplified in the past financial year, in which the two wholly-owned subsidiaries q.beyond Cloud Solutions GmbH (formerly scanplus GmbH) and q­ .beyond Consulting Solutions GmbH (formerly datac Kommunikationssysteme GmbH) were merged into q.beyond AG. Following these mergers, the company still has two wholly-owned subsid-

Declaration in Respect of the German Corporate Governance Code (Dec­ laration of Compliance)

Since its formation, q.beyond has been committed to good corporate governance and has viewed transparency and value-driven management as essential. The company therefore implements virtually all of the recommendations included in the German Corporate Governance Code and adheres to them in its daily work.

02	Corporate Governance Statement 2023

On 16 November 2023, the Management and Super­ visory Boards of q.beyond submitted the following Declaration of Compliance pursuant to § 161 of the German Stock Corporation Act (AktG):

Since submitting its most recent regular Declaration of Compliance, the company has complied with the recommendations of the Government Commission "German Corporate Governance Code" in the version dated 28 April 2022 with the following exceptions and will continue to comply with these with the following exceptions:

• No disclosure of personal and business relation­ ships of every candidate with the company, the governing bodies of the company, and any share­ holders with a material interest in the company in election proposals to the Annual General Meeting (DCGK C.13)
  In q.beyond's opinion, the recommendation made in the German Corporate Governance Code does not specify clearly enough which relationships of a candidate must be disclosed and the extent to which such disclosures are required to be made for proposed elections at the Annual Gen-

q.beyond views transparency and value-driven management as essential.

eral Meeting in order to comply with the recom­ mendation. In the interests of legal certainty with respect to future elections to the Supervisory Board, the Management Board and Supervisory Board have decided to declare a divergence from the recommendation. q.beyond believes that the existing disclosure requirements set out in § 124 (3) and § 125 (1) AktG are sufficient to meet the informational needs of shareholders and will, at an appropriate date, investigate and decide - voluntarily and without binding itself to the Code's recommendation - whether to disclose additional information about candidates proposed for election at the Annual General Meeting.

• Premature disbursement of individual compo­ nents of variable remuneration at target value and waiving of corresponding target agreements in connection with the departure of Chief Exe­ cutive Officer Jürgen Hermann (DCGK G.12 and G.7 Sentence 1)
  According to Recommendation G.12, if the con- tract of a management board member is termi- nated, the disbursement of any remaining variable remuneration components which are attributable to the period until contract termination should be based on the originally agreed targets and compar- ison parameters and on the due dates or holding periods stipulated in the contract. As already dis- closed in the updated Declaration of Compliance dated 7 December 2022, upon the amicable ter- mination of the activity of Chief Executive Officer Jürgen Hermann as of 31 March 2023 it was agreed that the prorated target amount of those short-term and long-term components of vari- able remuneration (STI and LTI) attributable to his

Basic Disclosures on Corporate Governance	03

activity on the Management Board in the period from 1 January to 31 March 2023 would be prematurely disbursed. Recommendation G.12 was thus not complied with in this respect.

The corresponding target agreements were also waived for the aforementioned three-month period of remuneration, as a result of which a formal divergence from Recommendation G.7 Sentence

1 ("Referring to the forthcoming financial year, the Supervisory Board shall establish the performance criteria for each Management Board member covering all variable remuneration components; besides operating targets, the performance criteria shall be geared mainly towards strategic goals.") may be assumed. As a precautionary measure, the Management and Supervisory Boards therefore declare that Recommendation G.7 Sentence 1 was also not complied with in this respect.

In view of the amicable nature of the departure, the Supervisory Board is of the opinion that the settlement of prorated variable remuneration for the period from 1 January to 31 March 2023 to the extent outlined above is legitimate and in particular that it takes due account of the reduced influence of the retired Management Board member. Given the envisaged disbursement at the target amount, there were also no longer any grounds to conclude an underlying target agree- ment. With regard to other components of variable remuneration, the existing agreements in the Management Board contract continue to apply.

Further details will be disclosed in the current remuneration report compiled in accordance with statutory requirements.

In addition to the current Declaration of Compliance and any updates in such, earlier versions are also available on our website at www.qbeyond.de/en/­

declaration-of-compliance.

Remuneration Systems and Remuneration Report

Consistent with legal requirements, q.beyond ­prepares a separate remuneration report for the Management and Supervisory Boards pursuant to § 162 AktG. This report is submitted for approval by the respective Annual General Meeting. It provides extensive information on the structure of the Management Board remuneration system pursuant to § 87a AktG in the form approved by the Annual General Meeting, and also includes all necessary disclosures on Supervisory Board remuneration. The remuneration report for the 2023 financial year, the auditor's report on its audit of the remuneration report, the remuneration system currently in place for members of the Management and Supervisory Boards, which was most recently approved by the Annual General Meeting on 24 May 2023 with a 93.32% majority of the share capital represented, and the most recent resolutions adopted by the Annual General Meeting in respect of the remuneration systems for the Management and Supervisory Boards and for the remuneration of the Supervisory Board can be viewed on q.beyond's website at

www.qbeyond.de/remuneration.

04	Corporate Governance Statement 2023

Management Board

Composition,

Succession Planning and

Requirements Profile

Pursuant to the Articles of Association, the Management Board of q.beyond AG comprises one or ­several members. The Management Board had the following members in the 2023 financial year: Jürgen Hermann until 31 March 2023 (CEO), Thies Rixen (COO until 31 March 2023, CEO since 1 April 2023) and Nora Wolters (CFO since 1 Jan- uary 2023). The CVs of the current Management Board members can be found at www.qbeyond.de/

management-board.

In line with legal requirements and the ­provisions of the Articles of Association, the Supervisory Board determines the number of Management Board members and the required qualifications and appoints suitable candidates to individual positions. As described further below, within the framework of legal requirements it defines the target values for the share of women in the Management Board, takes due account of diversity and works together with the Management Board to ensure long-term succession planning. In this succession planning, due account is taken of the requirements of German stock corporation law, the Code and the criteria set out in the diversity concept adopted by the Supervisory Board for the composition of the Management Board. Drawing where appropriate on support from external consultants, the Human Resources Committee compiles a selection of suitable candidates with whom further talks are then held. On this basis, the Human Resources Committee submits a recommendation for resolution by the Supervisory Board.

When identifying candidates for a Management Board position, the individual candidate's specialist qualifications for the role to be assumed, management qualities, achievements to date, acquired skills and knowledge of the company represent basic ­eligibility criteria. Assuming that these criteria are met, the following diversity concept currently applies for the composition of the Management Board:

• The members of the Management Board should collectively have the knowledge, skills and pro- fessional expertise necessary to properly perform their duties.
• It should therefore be ensured that the members of the Management Board have the following skills and experience:
• • The Management Board members should as a whole be familiar with the business fields of Cloud, SAP and Microsoft, and here in par- ticular with the market environment, customer needs (especially at small and medium-sized enterprises) and the market segment in which q.beyond AG operates.
  • At least individual Management Board members should have knowledge of the capital market and financing.
  • The Management Board member responsible for the Finance department should have spe- cialist knowledge of accounting or auditing.
    Accounting and auditing also include sustain­ ability reporting and its audit.

Management Board	05

• • At least individual Management Board mem- bers should have experience in management at a small or medium-sized enterprise and in personnel management.
  • At least individual Management Board mem- bers should have expertise in sustainability issues relevant to the company.
• In identifying suitably qualified candidates for the Management Board, due account should also be taken of diversity. Consideration should also be given to the extent to which the activities of the Management Board may benefit from dif- ferent, mutually complementary specialist pro- files, training backgrounds, professional and life experience, as well as from suitable represen­ tation of all genders.
• In keeping with the targets set by the Supervisory Board, at least one member of the Management Board should be female. This target should be reached at the latest by 31 December 2026.
• As a general rule, only persons who are younger than 65 should be members of the Management Board. The age of the Management Board mem- bers should therefore be taken into account when determining the length of appointment.

The Supervisory Board bases its decision as to which person should be selected to hold a specific Management Board position on the company's best interests and takes due account of all circumstances pertaining to the individual case. With Thies Rixen and Nora Wolters, the Management Board of q­ .beyond AG currently comprises two members who have a variety of specialist and personal quali­ fications in different fields. The Supervisory Board believes that this composition satisfies the requirements of the diversity concept.

The diversity concept for the Management Board stipulates clear criteria on which to base the selection of suitable candidates.

06	Corporate Governance Statement 2023

Diversity Pursuant to § 111 (5) and § 76 (4) AktG for Supervisory Board, Management Board and Management Levels

Pursuant to § 111 (5) AktG, the Supervisory Boards of companies that are listed or subject to codeter- mination are required to set targets for the shares of women in their Management and Supervisory Boards.

The Supervisory Board has set targets both for the Supervisory Board (based on a forecast num­ ber of six members) and for the Management Board, namely that each body should include one woman. The deadline for reaching these targets is 31 December 2026.

Given the appointment of Nora Wolters as CFO, q.beyond has met the target for the Management Board since 1 January 2023. The Super­ visory Board has included at least two women since 2013 already.

For the two management levels below the Management Board, the target set by the Management Board pursuant to § 76 (4) AktG involves a 20% share of women in both the first and the second management levels. The deadline for reaching these targets has been set at 31 December 2026. The Management Board of q.beyond AG views the first management level below the Management Board as including all employees at q.beyond AG (excluding affiliated companies) who report directly to the Management Board and have their own personnel responsibilities. Accordingly, the second management level below the Management Board includes all employees at q.beyond AG (excluding affiliated companies) who report directly to the first management level and have responsibility for their own employees.

At the reporting date on 31 December 2023, the first management level comprised 14 employees, of which women made up a 7% share. Women accounted for 15% of the 26 employees in the second management level. To raise the share of women in management positions, the Management Board has now launched initiatives aimed at, among other aspects, improving the attractiveness of q.beyond AG as an employer for women man- agers, boosting networking between women at the

Diversity in practice:

women account for 50% of the ­ Management Board. And one third of the ­Supervisory Board members are female.

Management Board	07

Group and establishing female role models. More- over, eliminating the gender pay gap should assist women in rising further up the career ladder, thus increasing the share of women managers in the years ahead and enabling the self-imposedtargets to be reached by the end of December 2026. The Sustainability Report due to be published by the end of April 2024 will provide details of these ini­ tiatives at www.qbeyond.de/en/sustainability.

Mode of Operation and Company Management

The Management Board is responsible for managing the company in the best interests of such. The Supervisory Board has issued Rules of Procedure for the Management. These were most recently updated in November 2023 and can be found at

www.qbeyond.de/vorstand/geschaeftsordnung

(only available in German). The Management Board develops the company's strategy, coordinates it with the Supervisory Board and ensures its implementa- tion. In this, the Management Board identifies and assesses the risks and opportunities for the company that are associated with social and environmental factors, as well as the ecological and social impacts of the company's activities. Further information about the company's sustainability targets and the measures it has taken to reach these targets can also be found in the Sustainability Report at

www.qbeyond.de/en/sustainability.

The management of the company is based on a system of shared values, the main contents of which are summarised in the Code of Conduct, which can be viewed at www.qbeyond.de/en/code-of-conduct.

The Code of Conduct is binding for the Manage­ ment Board and for all employees and is also expected to shape business dealings with third

parties­ . The Management Board ensures that all provisions of law and internal policies are complied with, for example, by issuing policies and work instructions, and endeavours to achieve ­compliance with such at the company.

To this end, the Management Board draws above all on a compliance management system based on the company's risk system. The Management Board regularly addresses this topic, as do the Supervisory Board and its Audit Committee. These discussions generate major impetus for enhancing the existing management systems on an ongoing basis. A whistleblowing­ system enables employees and third parties to provide tip-offs of any violations of the law at the company in a protected manner.

In keeping with the most recent update to the German Corporate Governance Code in April 2022, the Management Board made targeted extensions to existing management systems to account for sustainability aspects. One focus was on recording and controlling climate-relevant CO2 emissions in accordance with the internationally recognised­ Greenhouse Gas Protocol. This provides a good foundation for identifying company-related areas of action, measuring the success of the mea­ sures already taken to reduce CO2 emissions and achieving the climate neutrality planned for the

company's­ operations from 2025. More recently, these aspects have been supplemented by the com- pany's early steps to address new legislative projects on national and EU levels. Our company has thus long been ­preparing for implementation of the EU Taxonomy and the German Act on Corporate Due Diligence Obligations in Supply Chains (LkSG). In 2023, ­q.beyond was one of the first medium-

08	Corporate Governance Statement 2023

sized IT service providers in Germany to sign up to the (EU Code of Conduct on Data Centre Energy Efficiency) and can thus satisfy most of the technical criteria for sustainable data centre operations in line with the EU Taxonomy. To ensure Group- wide monitoring of and compliance with human rights-related and environment-related due diligence obligations, in 2023 the Management Board appointed a Human Rights Officer, established a Compliance Committee and adopted a Policy Statement in accordance with the requirements of the German Act on Corporate Due Diligence Obligations in Supply Chains (LkSG). This provides a detailed explanation both of the strategy and of the processes in place to protect human rights and satisfy environment-related obligations. Since the 2023 financial year, we have also been preparing for the extended reporting obligations resulting from the Corporate Sustainability Reporting Directive (CSRD), which we will have to meet for the first time for the 2024 financial year.

An effective internal control and risk management system ensures that risks arising from the compa- ny's business activities are managed responsibly. The former also account for material economic, ­ecological and social sustainability aspects. The risk report in the Annual Report provides extensive information about these systems, including the compliance management system, as well as about existing risks and the measures taken to limit these.

Cooperation with the Supervisory Board

The Management Board and the Supervisory Board cooperate on a basis of trust to the benefit­ of the company. They cultivate a culture of open discussion, an approach that requires confidentiality to be comprehensively maintained. The Management Board informs the Supervisory Board regularly, promptly and comprehensively of the objects of statutory reporting obligations pursuant to § 90 AktG, of all issues important to the company with regard to strategy, planning and its overall business performance, of the findings of the risk monitoring system established pursuant to § 91 (3) AktG and of risk management and compliance at q.beyond AG and all material subsidiaries. In this, it addresses departures in the current business development from the prepared budgets and agreed targets, indicates the reasons for any such departures and, if requested, provides the Super­ visory Board with additional information.

The Rules of Procedure for the Management Board

www.qbeyond.de/vorstand/geschaeftsordnung

(only available in German) require Supervisory Board approval to be obtained prior to the conclusion of any major business transactions, such as the adoption of annual planning and major investments, acquisitions and financing measures. These Supervisory Board decisions are discussed in detail in the committees and by the full Supervisory Board.