Supervisory Board and committees established by it
In line with German company law, Deutsche EuroShop has a dual management and control structure comprising two executive bodies, the Executive Board and the Supervisory Board. The Supervisory Board consists of six members.
The Supervisory Board supervises and advises the Executive Board in its management activities in accordance with the provisions of German company law and its rules of procedure. It appoints members of the Executive Board, and significant business transacted by the Executive Board is subject to its approval. The Supervisory Board is composed of six members who are elected by the General Meeting.
The Supervisory Board has established the information
and reporting duties to be met by the Executive Board and has formed an Executive Committee, an Audit Committee and a Capital Market Committee, each
comprising three people.
The members of the Supervisory Board are:
Manfred Zaß, Chairman
Dr. Michael Gellen, Deputy Chairman
Thomas Armbrust
Dr. Jörn Kreke
Alexander Otto
Dr. Bernd Thiemann
The members of the Executive Committee are Mr. Zaß, Dr. Gellen and Mr. Armbrust. The
Executive Committee is chaired by the Chairman of the Supervisory Board. The
Committee discusses urgent business matters and passes relevant resolutions.
Moreover, it is responsible for human resources issues concerning the Executive
Board and for reviewing the Company’s corporate governance principles.
The members of the Audit Committee are also Mr. Zaß, Dr. Gellen and Mr. Armbrust. The Audit Committee is chaired by Mr. Armbrust. It is
responsible for issues relating to financial reporting, auditing and the
preparation of the annual and consolidated financial statements. Former members
of the Company’s Executive Board and the Chairman of the Supervisory Board
generally do not chair the Audit Committee, to avoid conflicts of interest.
The members of the Capital Market Committee are once again Mr. Zaß, Dr. Gellen and Mr.
Armbrust. The Capital Market Committee is chaired by Mr. Zaß. The Committee was
formed on 30 June 2009. The Supervisory Board’s powers relating to the
utilisation of approved capital were transferred to the Committee for
decision-making and processing.
Further information on the members of the Supervisory Board can be found here.
Supervisory Board Remuneration
In FY 2009 the remuneration of the members of the Supervisory Board amounted to €232.12 thousand, and is broken down as follows:
€ thousand
remuneration
Manfred Zaß
59.60
Dr. Michael Gellen
44.62
Thomas Armbrust
29.75
Alexander Otto
29.75
Dr. Jörn Kreke
29.75
Dr. Bernd Thiemann
29.75
(incl. 16%
value added tax)
223.12
No advances or loans were granted to the members of the Supervisory Board.
Source: Annual Report 2009, page 137
Report by the Supervisory Board
During the
2009 financial year, the Supervisory Board performed the duties incumbent on it
according to the law and the Articles of Association and closely followed the
performance of Deutsche EuroShop AG. The strategic orientation of the Company
was coordinated with the Supervisory Board and the progress of strategy
implementation discussed at regular intervals. The Supervisory Board monitored
and advised the Executive Board on its management of the business, and the
Executive Board informed us regularly, promptly and in detail of business
developments.
Focus of Advisory
Activities
We examined
our Company’s net assets, financial position and results of operations, as well
as its risk management, regularly and in detail. In this context, we checked
that the formal conditions for implementing an efficient system of monitoring
our Company were met and that the means of supervision at our disposal were
effective. We were informed on an ongoing basis of all significant factors
affecting the business.
Our
discussions focused on the development of the portfolio properties, their sales
trends, outstanding accounts, occupancy rates, construction measures and
liquidity as well as investment cost trends for our new development projects.
Intensive
and repeated discussions were conducted with the Executive Board on the
developments on the capital and credit markets and the effects of these on the
Company’s strategy, as well as on the raising of equity. Various investment
options were also discussed by the Executive Board and Supervisory Board. We
observed the sales trends and payment patterns of our tenants in detail on the
basis of regular reports by the Executive Board on the subject of risk
management.
Other current
topics were discussed by the Chairman of the Supervisory Board and the
Executive Committee of the Supervisory Board together with the Executive Board
as required. Transactions requiring the approval of the Supervisory Board were
discussed and resolved at the scheduled meetings. In addition, for transactions
of the Executive Board requiring approval, a conference call of the Executive
Committee was held and a circular resolution was passed in writing. All
resolutions of the reporting period were passed unanimously.
Meetings
During the 2009 financial year, four scheduled
Supervisory Board meetings took place.
All Supervisory Board members participated in
at least half of the Supervisory Board’s meetings.
At the
first scheduled meeting on 23 April 2009,
the Supervisory Board’s annual review of efficiency was completed and the
agenda for the Annual General Meeting approved. In this context, we selected the auditor who was proposed to the
shareholders for election. With regard to the audit of the annual financial
statements, we once again attached great importance to the explanations of the
Executive Board and those of the auditor on the real estate appraisals. In
addition, the Executive Board reported to us in particular on the expansion of
the Altmarkt-Galerie in
Dresden
and the preparation for the expansion measures for the Main-Taunus-Zentrum.
At the
meeting on 30 June 2009 the first
action was to elect the undersigned once again as Chairman of the Supervisory
Board and Dr Gellen as Deputy Chairman pursuant to section 107 of the
Aktiengesetz (AktG - German Public Companies Act). Regular elections of members
of the Supervisory Board took place at the Annual General Meeting concluded
prior to this.
In addition
to a discussion of business development, the implementation of a measure to
increase capital was also discussed. Given the market environment, which
continues to be very volatile, there was agreement that a decision could only
be made on a very short-term basis. For this reason a “Capital Market”
committee was formed as a precaution, to which the decision-making and
execution authorities of the Supervisory Board were transferred with regard to
the utilisation of the existing authorised capital. This committee is made up
of Mr Armbrust, Dr Gellen and the undersigned (Chair).
At the
third meeting on 17 September 2009,
together with the Executive Board, we drew conclusions from the capital
increase without subscription right that took place in July 2009. In addition,
the Executive Board and the Supervisory Board discussed various investment
options. The Executive Board also presented us with information on the Gesetz
zur Angemessenheit der Vorstandsvergütung (VorstAG - Appropriateness of
Management Board Remuneration Act).
At the last
meeting on 26 November 2009, the
Executive Board reported to us on the specific rental developments of
individual centers and the completion of the renovation measures at City-Point
in
Kassel and the Allee-Center in
Hamm. Following a presentation, the possible acquisition
of the A10 Center in Wildau was discussed intensively during this meeting, as
was the external financing of this investment. Individual members of the
Supervisory Board were already familiar with the A10 Center and their
impressions were positive. A circular resolution on the acquisition of the A10
Center was passed in writing in December 2009 once further information
resulting from the ongoing due diligence process became available. Against the background of the worsening
outlook in general for the retail sector we continued to monitor closely the
statements of the Executive Board on the revenues of our tenants, as well as on
the outstanding rents in our shopping centers. An extensive discussion also ensued on the projection and medium-term
performance planning of the Company presented by the Executive Board.
Committees
In addition
to the two separate committees previously established (an Executive Committee
of the Supervisory Board and an Audit Committee (each with three members)), on
30 June 2009 the Supervisory Board formed a Capital Market Committee, which
also consists of three members. The authorities held by the Supervisory Board
with regard to the utilisation of the existing authorised capital have been
transferred to this committee to enable it to make decisions and take action
independently. Given the size of the Company and the number of Supervisory
Board members, we consider the number of committees and members to be
appropriate.
During the
reporting period, the Executive Committee and the Audit Committee met on 7
April 2009, with the Executive Committee also convening in a conference call on
15 December 2009.
The Capital
Market Committee passed its resolutions on the implementation of the capital
increase in conference calls on 6 and 7 July 2009.
Corporate governance
In December
2009, together with the Executive Board, we issued an updated declaration of
conformity in relation to the recommendations of the government commission
pursuant to section 161 AktG and made this permanently available on the
Deutsche EuroShop website in December 2009. A separate report on the
implementation of the German Corporate Governance Code is included in this
Annual Report. The members of the Supervisory Board and the Executive Board
declared in writing at the beginning of 2010 that no conflicts of interest had
arisen.
Financial statements
of Deutsche EuroShop AG and the Group for the period ended 31 December 2009
At the
Audit Committee meeting on 20 April 2010 and the Supervisory Board meeting on
28 April 2010, the Audit Committee and the Supervisory Board examined in detail
the annual financial statements of Deutsche EuroShop AG in accordance with
German commercial law, and the consolidated financial statements in accordance
with International Financial Reporting Standards (IFRS), each as at 31 December
2009, as well as the management report and group management report for the 2009
financial year.
The
documents relating to the financial statements, the auditor’s reports and the
Executive Board’s proposal for the appropriation of the unappropriated surplus
were presented to us in good time. The auditor elected by the Annual General
Meeting on 30 June 2009 – Hamburg-based BDO Deutsche Warentreuhand AG
Wirtschaftsprüfungsgesellschaft – had audited the financial statements prior to
this and issued an unqualified audit
opinion in each case. The auditor also confirmed that the accounting
policies, assessment and consolidation methods in the consolidated financial
statements complied with the relevant accounting provisions. In addition, the
auditor determined in the course of its assessment of the risk management
system that the Executive Board has undertaken all required measures pursuant
to section 91 (2) AktG in order to identify risks promptly which could jeopardise
the continued existence of the Company.
The
auditor’s representatives took part in the discussion of the annual financial
statements and the consolidated financial statements on the occasions of the
Audit Committee meeting on 20 April 2010 and the Supervisory Board meeting on
28 April 2010 and explained their main findings.
Following
its own examination of the annual financial statements of Deutsche EuroShop AG,
the consolidated financial statements and the management reports appertaining
thereto, the Supervisory Board did not raise any objections, agreed with the
findings of the auditor’s examination and approved the annual financial
statements of Deutsche EuroShop AG and the consolidated financial statements.
The annual financial statements have thus been adopted. The Supervisory Board
endorses the Executive Board’s proposal for the appropriation of the
unappropriated surplus and distribution of a dividend of €1.05 per share.
In the 2009
financial year the real estate sector once again found itself in an adverse environment
and had to deal with difficult credit markets. The Company’s conservative
strategy has continued to prove successful.
In addition
to this, the pleasing development of our Company is also the result of the
dedication shown by the Executive Board and our employees within a small and
effective team. The Supervisory Board would like to express its particular
gratitude for this to the Executive Board and the Company’s employees.
Group
