Corporate Governance

Declaration of Compliance

April 2016


Declaration on corporate management


Explanations according to sec. 161 AktG (Declaration of Conformity)

On 27 April 2016 the Management Board and the Supervisory Board of United Power Technology AG (the “Company”) stated the following Declaration of Conformity pursuant to sec. 161 of the German Stock Corporation Act (AktG):
The Company complies with the recommendations of the „Government Commission German Corporate Governance Code“ in the version of the Code as of 5 May 2015 – published in the Federal Gazette on 12 June 2015 – and will comply with them in the future, with the exception of the following recommendations:


In the D&O insurance for the Supervisory Board, a deductible up to a certain amount has been partially agreed (deviation from no. 3.8 para. 3 of the Code). Based on economic considerations and due to the comparatively low remuneration of the Supervisory Board, the Company has decided to introduce a fixed deductible only in certain cases. A general deductible would reduce the attractiveness of Supervisory Board activities, and thus also the Company’s chances in the competition to attract qualified candidates.


When determining the total remuneration of the individual members of the Management Board, the relationship between the remuneration of the Management Board and that of senior management as well as the staff overall has not been taken into consideration yet (deviation from no. 4.2.2 para. 2 s. 3 of the Code). Since this recommendation has come into force on 10 June 2013 the total remuneration of the members of the Management Board has not been redetermined yet. However, the Supervisory Board will consider the implementation of this recommendation when determining the total remuneration in the future.

 

In connection with variable compensation components negative developments are not taken into account (deviation from no. 4.2.3 para. 2 s. 4 of the Code). In addition, with regard to the variable remuneration elements, subsequent amendments to the targets of success or to the comparison parameters are not excluded (deviation from no. 4.2.3 para. 2 s. 8 of the Code). Considering the relatively low performance remuneration for Management Board members, the Supervisory Board is of the opinion that neither such an exclusion nor the taking into account of negative developments is necessary.

 

The remuneration of the Management Board is not limited by fixed caps regarding the long-term share-based variable payment and the overall remuneration of the Management Board (deviation from no. 4.2.3 para. 2 s. 6 of the Code). A retroactive amendment of agreements entered into with the members of the Management Board would be, in view of the principle of contractual fidelity, not appropriate, and for the Company unilaterally not enforceable.

 

As far as pension schemes for members of the Management Board are concerned, the Supervisory Board has not yet established the level of provision aimed for in each case – also considering the length of time for which the individual has been a Management Board member – and has not taken into account the resulting annual and long-term expense for the Company (deviation from no. 4.2.3 para. 3 of the Code). Since 10 June 2013, with this recommendation coming into force, no pension commitment has been made vis-à-vis a member of the Management Board. The Supervisory Board will consider the implementation of this recommendation when making a pension commitment in the future.

 

The Supervisory Board and the Management Board members have not stipulated how to proceed in case of a premature termination of a Management Board member contract (deviation from no. 4.2.3 para. 4 of the Code). Therefore, the provisions of law apply in this case. The Company is of the opinion that the provisions of law are sufficient regarding the respective interests when it comes to the termination of a Management Board member contract and is thus an appropriate basis.


During the shareholders’ meeting there was not and will not be any reporting regarding a general Management Board remuneration system and any changes in such system (deviation from no. 4.2.3 para. 6 of the Code). The information in the remuneration report is insofar considered to be sufficient.


Pursuant to no. 4.3.3 s. 4 of the Code, important transactions with persons closely associated with a member of the Management Board shall only be carried out with the consent of the Supervisory Board. Since the Supervisory Board has not yet decided on such a right to reserve approval, a deviation from no. 4.3.3 s. 4 of the Code is declared preventively.


There is no general age limit for Management Board members (deviation from no. 5.1.2 para. 2 s. 3 of the Code). The Supervisory Board does not consider strict age limits as a rule appropriate. In the opinion of the Company, it is not plausible why qualified persons with comprehensive experience in career and life shall not be eligible for the Management Board only because of their age.


The Supervisory Board has not established any committees (deviation from no. 5.3 of the Code). Due to the fact that the Supervisory Board only consists of three members and thus has a small size, the Company does not consider the establishment of committees necessary and, beyond this, is of the opinion that all items falling within the scope of responsibilities of the Supervisory Board should be discussed and decided by the full Supervisory Board.


Pursuant to no. 5.4.1 para. 2 of the Code, the Supervisory Board shall set specific objectives with regard to its composition that take into account the company-specific situation, the international scope of the company’s business, potential conflicts of interest, the number of independent members of the Supervisory Board pursuant to no. 5.4.2 of the Code, a set age limit for members of the Supervisory Board to be specified and a regular limit of length of membership to be specified for the members as well as diversity. Pursuant to no. 5.4.1 para. 3 of the Code, proposals issued by the members of the Supervisory Board to the responsible corporate electoral bodies shall take those objectives into account and the objective target shall be reported on in the Corporate Governance Report. In the interest of the Company, the Supervisory Board will in each individual case solely base its nomination proposals to the shareholders’ meeting on the skills, abilities and professional expertise. In this regard, the Company deviates from no. 5.4.1 para. 2 and 3 of the Code.


When proposing a person for election as Supervisory Board member to the Annual General Meeting, the Supervisory Board does not intend to disclose the private and business relationships of such a candidate with the Company, its representative bodies and any significant shareholder (deviation from no. 5.4.1 para. 5 of the Code). In the Company’s opinion, the recommendation of the Code does not specify clearly which relationships of a candidate to what extent must be disclosed in order to comply with the recommendation. 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 deviation from the recommendation. The Company is of the opinion that the disclosure requirements of the German Stock Corporation Act are sufficient to meet the informational needs of the shareholders.


Pursuant to no. 5.4.6 para. 1 s. 2 of the Code the exercising of the chair and deputy chair positions in the Supervisory Board as well as the chair and membership in committees shall be considered with regard to the compensation of the members of the Supervisory Board. Since the Supervisory Board of the Company did not form any committees, the Company deviates from the recommendation of no. 5.4.6 para. 1 s. 2 of the Code.


Apart from regularly assessing the efficiency, the Supervisory Board does not carry out any other additional efficiency assessments on a regular basis (deviation from no. 5.6 of the Code) as the Company is convinced of its efficiency considering the size of the Supervisory Board and the size of the Company.


Last year, the Company has not met the deadline of 90 days after the end of the financial year for the publication of its consolidated financial statements (deviation from no. 7.1.2 s. 4 of the Code) and will not meet this deadline this year either. As a young and international company, the Company places emphasis on applying utmost care in preparing its first consolidated financial statements as a listed company. Additionally, the required translations from Chinese make the preparations of the financial statements time-consuming.

Managment Board of                          Supervisory Board of


United Power Technology AG            United Power Technology AG

 

 

Declaration on Compliance // Archive

 

Declaration of Compliance / April 2015 / (Download, PDF 0,1 MB)

 

Declaration of Compliance / April 2014 / (Download, PDF 0,1 MB)

 

Declaration of Compliance / April 2013 / (Download, PDF 0,1 MB)

 

Declaration on Compliance / March 2012 / (Download, PDF 0.6 MB)