My Annual Report
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My Annual Report
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Report of the Supervisory Board
The Supervisory Board of technotrans AG performed the duties incumbent upon it under the law and in accordance with the Articles of Incorporation and the Rules of Procedure with considerable care in the past financial year of 2017. We regularly advised the Board of Management on the running of the company and continuously oversaw its activities. The Supervisory Board was involved directly and at an early stage in all decisions of fundamental significance for the company.
The Board of Management reported to us regularly, promptly and comprehensively, both in writing and orally, on the current status of transactions, the business performance and the economic position, the prevailing risks, risk management as well as relevant issues concerning compliance, strategy and planning. The business transactions of significance for technotrans were discussed in the committees and the plenary meetings on the basis of the Board of Management’s reports. Deviations in the business performance from the prepared plans and targets were explained individually to the Supervisory Board and discussed at length by the Supervisory Board. The Board of Management complied fully with the statutory reporting obligations as well as with the reporting obligations under the German Corporate Governance Code. In my capacity as Supervisory Board Chairman, I was moreover in regular contact with the Board of Management. I was informed in a timely manner by the Board of Management of important occurrences that are of material significance for evaluating the situation, progress and management of the company.
In all, the Supervisory Board met for four regular meetings in the presence of the Board of Management in the 2017 financial year, which took place on March 13, May 11, September 20/21 and December 8, 2017. The recurring subject matters of the ordinary meetings were the written and oral reports of the Board of Management on the business situation of technotrans AG and the group, in particular the current revenue and earnings performance as well as the financial performance and net worth. The Supervisory Board was informed in detail of and discussed significant business occurrences within the company, as well as its strategy and the implementation thereof, and also its approach to risk management. All members of the Supervisory Board and Board of Management were present at all meetings, except for the meeting on December 8, 2017, which Dr Soest did not attend.
The Supervisory Board again oversaw the management activities of the Board of Management in the 2017 financial year, regularly advised the Board of Management on the running of the company, and – following thorough examination and consultations – approved the transactions that require its consent in accordance with the law and the Articles of Incorporation. These include decisions and measures which are of fundamental significance for the financial position and financial performance of the company.
Key themes of the Supervisory Board meetings in 2017
A hallmark of the past financial year was the methodical development of the business activities of technotrans AG and the operational and strategic development of its participating interests and the divisions, as well as the integration into the technotrans Group of the subsidiaries acquired in the previous year. This was most notably the case for the integration of GWK Gesellschaft Wärme Kältetechnik mbH. Other recurring discussion and agenda items were the planned conversion of technotrans AG into a European Company (Societas Europaea, SE) as well as human resources developments affecting the Board of Management. At its scheduled meetings the Supervisory Board also considered the reports by the Board of Management on the business situation, the general acquisitions strategy, the strategic direction of the company, aspects of risk management, preventive compliance work and corporate governance.
The first meeting on March 13, 2017 focused on the presentation and discussion of the 2016 annual financial statements of technotrans AG, the technotrans 2016 Consolidated Financial Statements and the accompanying resolution, as well as approval of the agenda for the Annual General Meeting on May 12, 2017 together with the resolution proposals set forth therein. The appointment of KPMG AG Wirtschaftsprüfungsgesellschaft, Bielefeld, as the auditors of the annual financial statements and Consolidated Financial Statements for the 2017 financial year was made on the recommendation of the Audit Committee and pursuant to the resolution of the Annual General Meeting of May 12, 2017. Other agenda items included in particular status reports on the integration of GWK Gesellschaft Wärme Kältetechnik mbH and on current projects. Other business included the consent given by the Supervisory Board for the purchase of land and the construction of a new production and office building in Baden-Baden, for the exercising of a call option in respect of Ovidius GmbH, for a capital increase at technotrans group (Taicang) co. Ltd. and for the establishment of technotrans Grundstücksverwaltungs GmbH.
The Supervisory Board meeting held on May 11, 2017 before the Annual General Meeting addressed such matters as preparations for the Annual General Meeting on the following day and an update on the motions submitted. As there were no counterproposals, the Supervisory Board considered at length the report on the business performance in the first four months of 2017. The Board of Management also gave a status report on the integration and operational development of GWK Gesellschaft Wärme Kältetechnik mbH. The examination of a possible conversion of technotrans AG into an SE was in addition discussed.
As well as the business performance of the group between January 1, 2017 and August 31, 2017, the main areas for discussion at the meeting on September 20 and 21, 2017 were the integration and operational development of GWK Gesellschaft Wärme Kältetechnik mbH, the technical developments in individual product lines of the technotrans Group and the corporate strategy, the development of the Baden-Baden location, corporate governance of the group and future sustainability reporting under the CSR Directive Implementation Act. Business conducted at this meeting included the agreement of new Rules of Procedure for the Supervisory Board, targets for the proportion of women on the Supervisory Board and Board of Management pursuant to Section 111 (5) of the German Stock Corporation Act and for the composition of the Supervisory Board, as well as a current Declaration of Compliance.
The final meeting of the Supervisory Board on December 8, 2017 was devoted to planning the forecast and budgeting for the 2018 financial year including revenue, cost, profit, investment and human resources planning, rough planning for the next few years as well as the concluding of new target agreements for the 2018 financial year. After full discussions and consultations, the Supervisory Board approved the annual plans submitted by the Board of Management for the 2018 financial year. Finally, the current status of the planned conversion of technotrans AG into a European Company was discussed at this meeting, for example in respect of future changes to the Articles of Incorporation and the forthcoming negotiations between the Special Negotiating Committee and the Board of Management.
The members of the Supervisory Board are sufficiently independent and have sufficient time to serve as non-executive directors. They always had ample opportunity to assess the reports and resolution proposals of the Board of Management with a critical eye in plenary meetings, and also to contribute their own suggestions. In accordance with the recommendation in the German Corporate Governance Code, the Supervisory Board members of technotrans AG disclose any conflicts of interest to the Supervisory Board without delay. Dr Norbert Bröcker, the Deputy Chairman of the Supervisory Board, is partner in the law firm Hoffmann Liebs Fritsch & Partner. The firm provided legal advice for technotrans AG on a variety of topics in the past financial year. The Supervisory Board of technotrans AG approved the individual activities of Hoffmann Liebs Fritsch & Partner as well as the consultancy fees arising, in each case in the context of the Supervisory Board meetings stated above. To avoid any conflicts of interest, Dr Bröcker abstained from those votes. No other potential conflicts of interest that are to be disclosed to the Supervisory Board and would need to be reported at the Annual General Meeting arose in the year under review. To enable it to fulfil its duties more efficiently, the Supervisory Board has formed three committees.
The Supervisory Board has an Audit Committee, a Committee for Board of Management Affairs and a Nominating Committee with the task of proposing suitable Supervisory Board candidates to the Supervisory Board for its election proposals to the Annual General Meeting.
The Nominating Committee did not meet in the 2017 calendar year.
The Committee for Board of Management Affairs met on June 8, 2017, November 9, 2017 and December 7, 2017 and addressed in particular general human resources developments concerning the composition of the Board of Management, the new appointment to be made in connection with the exit of Dr Soest and the personnel selection process that this necessitated. Beyond the meetings, this task also included identifying suitable successor candidates, interviewing applicants and preparing the signing of contracts. Other aspects discussed in the Committee for Board of Management Affairs concerned especially the remuneration development of and extending of existing contracts with the Board of Management members Henry Brickenkamp and Dirk Engel.
The Audit Committee met twice in the past financial year, on March 6, 2017 and December 7, 2017, in each case in the presence of representatives of the auditors as well as Board of Management members (except that Dr Soest did not attend the committee meeting on December 7, 2017), and addressed matters concerning the annual financial statements for the 2016 financial year, the presentation of the accounts, controlling and risk management. Other aspects included fiscal matters, compliance audits, assuring the necessary independence of the auditors, the recommendation of the Audit Committee to mandate the auditors with the audit task for 2017 as well as the audit of the 2015 annual financial statements by the Financial Reporting Enforcement Panel (FREP). The Chairman of the Audit Committee also maintained a close, regular exchange of information and views with myself between the committee meetings.
The audit reports and accounting records for the 2017 financial year as well as the Board of Management’s proposal on the appropriation of profit for the 2017 financial year were sent to all Supervisory Board members in good time. These were discussed at length and in detail both by the Audit Committee at its meeting on March 5, 2018 and by the Supervisory Board at its meeting on March 12, 2018. At both meetings, the responsible representatives of the auditors of the accounts also reported in person on the key findings of their examinations and were available for additional questions and information. For the first time the Supervisory Board also examined the new non-financial group declaration, which technotrans AG must now prepare under the CSR Directive Implementation Act. The Supervisory Board had already addressed this new declaration on sustainability and CSR aspects ahead of time at the Supervisory Board meeting on September 20/21, 2017 and the audit obligation in that respect. No material weaknesses in the internal accounting system were reported. The Chairman of the Audit Committee, too, reported at length to the Supervisory Board on the examinations of the Audit Committee. Both the annual financial statements of technotrans AG for the 2017 financial year prepared by the Board of Management in accordance with the German Commercial Code (HGB) and the Consolidated Financial Statements for the 2017 financial year, which were prepared pursuant to Section 315a of HGB on the basis of the International Financial Reporting Standards (IFRS), as well as the Combined Management Report, were examined by the auditors and were in each case granted an unqualified audit certificate.
Following the conclusion of our own examination of the annual financial statements, the Consolidated Financial Statements and the Combined Management Report, we raised no objections to the findings of the audit and at our meeting on March 12, 2018 signed off the annual financial statements and Consolidated Financial Statements prepared by the Board of Management. Nor did the examination of the non-financial declaration give rise to any objections. The annual financial statements for the 2017 financial year are thus established. Following its own examination the Supervisory Board supports the proposal of the Board of Management on the appropriation of profit.
The Supervisory Board takes this opportunity to thank the Board of Management and all employees of the group for their commendable dedication. Together they all showed great dedication in shaping the company’s ambitious development in the 2017 financial year. My particular thanks are moreover due to the employees’ representatives, who yet again cooperated constructively and openly with the company’s corporate bodies, and to the shareholders, many of who have now been involved in technotrans AG for quite a number of years. We would also like to thank Dr Soest, who left the Board of Management at his own request with effect from the end of 2017, for his work, through which he has made a dedicated and effective contribution to the company’s successful development in recent years.
We take this opportunity to welcome the new Board of Management members Hendirk Niestert and Dr Andreas J Schmid, and wish them a successful future in the technotrans Group. The appointment of two new Board of Management members comes in anticipation of the fact that Chief Executive Officer Henry Brickenkamp has decided not to renew his contract, which expires mid-way through the year. We the Supervisory Board will lend our constructive support to the newly composed Board of Management for the further development of the technotrans Group in its future legal form of a European Company.
On behalf of the Supervisory Board
Heinz HarlingChairman of the Supervisory Board