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FRoSTA AG views corporate governance as a complete system for managing and controlling a company. It includes the commercial principles and guidelines and the system of internal and external control and monitoring mechanisms. Good, transparent corporate governance fosters the trust of investors, employees, business partners and the public in the management and control of FRoSTA AG.
Corporate management structure and control functions at FRoSTA AG are as follows:
– Shareholders and Shareholders' Meeting
Our shareholders exercise their rights in the Company's shareholders' meeting. The annual shareholders' meeting takes place in the first six months of the financial year. The Chairman of the Supervisory Board chairs the shareholders' meeting. The shareholders' meeting decides on all the tasks given to it by law.
Our aim is to make it as easy as possible for shareholders to take part in the shareholders' meeting. With this in mind all documents required to take part are published beforehand on the Internet. The shareholders are nominated a proxy for the shareholders' meeting whom they can instruct to exercise voting rights on their behalf.
– Supervisory Board
FRoSTA AG's Supervisory Board consists of three members, two of whom are elected at the shareholders' meeting. Company employees elect one member. The Chairman of the Supervisory Board is elected from the Supervisory Board itself. The Supervisory Board was elected in the shareholders' meeting in 2009 for two years.
The Supervisory Board appoints the members of the Executive Board. It controls and advises the Executive Board in managing the Company. Significant decisions taken by the Executive Board require the Supervisory Board's approval. The Supervisory Board meets four times a year and if necessary will meet without the Executive Board. The Supervisory Board has a financial and personnel committee. The Supervisory Board has an independent financial expert in the person of Dr Müffelmann. The Supervisory Board approves and passes the Group financial statements.
– Executive Board
The Executive Board manages the Company at its own responsibility. Currently it consists of four members. The Executive Board reports regularly, promptly and comprehensively to the Supervisory Board on all relevant issues regarding business development, planning, financing and the business outlook. D&O insurance policies have been taken out for the Executive Board and the Supervisory Board. A deductible has been agreed.
– Financial accounting and auditing
Consolidated financial statements for the financial year have been prepared since 2005 according to IFRS. The consolidated financial statements are prepared by the Executive Board and checked by the auditor. Consolidated financial statements are made public within 90 days.
It has been agreed with the auditor, Gräwe & Partner GmbH Wirtschaftsprüfungsgesellschaft Steuerberatungsgesellschaft, Bremen, that the chairman of the Supervisory Board will be informed immediately about any reasons for exclusion or exemption that occur during the audit. The auditor reports to the chariman of the Supervisory Board on all the issues and circumstances that occur during the audit that are important for the Supervisory Board to carry out its responsibilities. The chairman is also informed if the auditor establishes facts proving that the declaration of compliance given by the Executive Board and the Supervisory Board according the article 161 AktG (German Corporation Law) is not correct.
– Transparency
Standardised, comprehensive and prompt reporting is a top priority at FRoSTA AG. FRoSTA AG's business outlook and results will be outlined in the financial statement, at the financial press conference, in the quarterly and first-half reports.
Press releases or ad hoc reports will also provide information if this is legally required. All reports and press releases can be found on the Internet at www.frosta-ag.com/InvestorRelations.
FRoSTA AG has set up the required directory of persons with insider information. The persons affected were informed about legal obligations and penalties.
The Executive Board and Supervisory Board declare that the recommendations of the "Government Commission on German Corporate Governance Codes" edition published in the electronic Bundesanzeiger have been followed in the financial year 2009 with the following exception:
The remuneration received by the members of the Executive and Supervisory Board is not shown individually in the notes to the consolidated financial statements as we consider the summarized publication of payments made to the boards to be sufficient. There is no age-limit for Executive and Supervisory Board members as we do not consider the competence and commitment of board members to be dependent on age.
The Executive Board and Supervisory Board hereby declare that a D&O insurance policy has been taken out. The deductible is EUR 5,000 and not as recommended in the Code. With effect from June 30, 2010, the deductible will comply with the legal requirements.
We only follow to a limited extend the recommendation that attention should be paid when making contracts with Executive Board members to ensure that any payments including supplements made on premature resignation for no urgent reason should not exceed the value of two years' remuneration (severance payment cap) or the normal payment for the remaining period of the contract. Specifically, we do not follow the recommendation that severance payments should not exceed two years' remuneration for the remaining period of the contract. A severance payment cap of two years makes a three or five-year contract absurd, and results in a desirable contract for the company becoming unattractive to the Board member in question. Our contracts include a clause which stipulates a ceiling on variable payments.
The financial and personnel committee at FRoSTA AG establishes the level and structure of remuneration for the Executive Board. Dr Herbert Müffelmann and Ulf Weisner sit on the committee.
The members of the Executive Board receive remuneration that comprises:
- fixed annual basic remuneration, paid out monthly.
- remuneration that must be used to purchase shares via the stock exchange at the current rate (only for some members of the Executive Board). This remuneration is paid out once a year.
- a percentage of annual profits, the level of which is contractually linked to the level of consolidated annual profit before taxes. The bonuses are paid in three instalments.
- a long-term bonus payment based on the three-year average ROI of FRoSTA AG (for some members of the Board only).
Year | Basic remuneration TEUR | Remuneration for share purchase TEUR | Variable remuneration TEUR | Insurances TEUR | Total TEUR |
2008 | 937 | 158 | 1,286 | 8 | 2,389 |
2009 | 996 | 170 | 1,271 | 8 | 2,445 |
The total remuneration of former members of the Executive Board at FRoSTA AG and in the Group amounted to TEUR 70 in the business year (2008: TEUR 68).
The members of the Supervisory Board receive remuneration that comprises:
- a fixed annual basic remuneration, paid out once a year.
- a success-related bonus depending on the level of the dividend proposed to be paid out. The bonus is paid out once a year.
Year | Basic remuneration TEUR | Success-related bonus TEUR | Total TEUR |
2008 | 14 | 39 | 53 |
2009 | 14 | 46 | 60 |
The following transactions in securities requiring notification were carried out in 2009 with Company shares and published accordingly:
Date | Name | Type of transaction | Price per share EUR | Number of shares
| Total value EUR |
22.12.2009 | Jürgen Marggraf | Share purchase | 16.00 | 500 | 8,000.00 |
22.12.2009 | Jürgen Marggraf | Share purchase | 16.20 | 500 | 8,100.00 |
29.12.2009 | Jürgen Marggraf | Share purchase | 16.50 | 500 | 8,250.00 |
Member of the Executive Board and the Supervisory Board hold share in FRoSTA AG amounting to a total of 58.6 %.
No member of The Supervisory Board holds more than a 1 % share in FRoSTA AG.
The following members of the Executive Board have shares of more than 1 % in FRoSTA AG:
Dirk Ahlers: 34.7 %
Felix Ahlers: 22.5 %
Bremerhaven, March 18, 2010