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Declaration on the company management

Corporate Governance

 

Principles of responsible company management and control geared to the long-term creation of value. Key aspects of good corporate governance include efficient cooperation between the Management Board and the Supervisory Board, upholding shareholder interests and transparent corporate communications.

At HAMBORNER, maintaining and living out sound corporate governance is a top priority. Via a host of information and communications channels, our shareholders, all other capital market participants, financial market analysts, press and media representatives and our employees are regularly, promptly and comprehensively informed of the company’s situation.

Information sources particularly include the annual report, the half-year financial report and the regular quarterly announcements posted in the Investor Relations section of our homepage. In addition, we publish ad-hoc announcements, changes and voting rights and announcements on own-account transactions by managers in line with capital-market requirements. We also provide information on recent developments at the company through press releases and presentations, regularly take part in financial-market events and visit our existing shareholders and potential new investors at national and international roadshows.

Decleration on Company Management

 

In accordance with Section 289f of the German Commercial Code as well as Section 22 of the current German Corporate Governance Code (“the Code”) in the version of 16 December 2019, the Management Board and Supervisory jointly report on the management and corporate governance of HAMBORNER REIT AG in the declaration on company management.

Along with the most recent declaration of compliance as per Section 161 of the German Stock Corporation Act, the declaration on company management contains further details on corporate management practices, a description of the operating procedures of the Management Board and Supervisory Board as well as information on the composition of the administrative bodies and their committees. The declaration also contains the report on the equal participation of women and men in management positions and the diversity concept.

 

 

  • Declaration of compliance

    The Government Commission published the first German Corporate Governance Code on 26 February 2002. In addition to various statutory requirements, the Code contains recommendations and suggestions for sound and responsible company management. On 16 December 2019, the Government Commission on the German Corporate Governance Code resolved to streamline and thoroughly overhaul the rules in order to further increase the relevance and acceptance of the Code among companies and investors. The current version, published in the German Federal Gazette on 20 March 2020, is available to download below.

    The German Corporate Governance Code

     

    Commitment

     

    HAMBORNER REIT AG is fully committed to the German Corporate Governance Code. Even before the Code was first published, HAMBORNER complied with many of the assessment criteria for sound company management contained therein. Immediately after the Corporate Governance Code came into force in August 2002, HAMBORNER instigated measures to implement it. These measures were and are continuously supplemented and adapted to changed requirements.

    HAMBORNER REIT AG closely aligns its corporate governance standards with the German Corporate Governance Code, which is why it still does not issue separate company-specific regulations. At present, there are no Code provisions that do not apply on account of overriding statutory provisions.

    Since the German Corporate Governance Code came into force, the Management Board and Supervisory Board of HAMBORNER REIT AG have issued a declaration of compliance as per Section 161 of the German Stock Corporation Act at least once a year. The declaration was last updated in November 2021, and is available to download below.

    Declaration of compliance November 2021

    Archive of the declarations of compliance

    The declarations of compliance of previous years are available for download here as a PDF file.

    Declaration of compliance November 2020

    Declaration of compliance November 2019

    Declaration of compliance December 2018

    Declaration of compliance December 2017

    Declaration of compliance December 2016

    Declaration of compliance December 2015

    Declaration of compliance December 2014

    Declaration of compliance December 2013

    Declaration of compliance December 2012

  • Corporate Governance report

  • Tasks for company management practices

    Shareholders and general shareholders' meeting

    The shareholders of HAMBORNER REIT AG exercise their rights at the Annual General Meeting and any Extraordinary General Meetings. The Annual General Meeting takes decisions on all statutory matters with a binding effect on all shareholders and the company. The Chairman of the Supervisory board usually chairs the Annual General Meeting. When votes are held, each share entitles the holder to one vote.

    Each shareholder who registers in time is authorised to attend the Annual General Meeting. Shareholders who are unable to attend in person have the opportunity to have their vote cast by a shareholder association, a bank, a proxy provided by HAMBORNER and bound by their instructions, or another authorised representative of their choice.

    The agenda of the Annual General Meeting and all documents required for passing resolutions are published in line with the requirements of the German Stock Corporation Act and made available in the Annual General Meeting section of the HAMBORNER website.

    Supervisory Board

     

    In accordance with Article 9 (1) of the Articles of Association, the Supervisory Board of HAMBORNER REIT AG has nine members, and is made up of six shareholder representatives and three employee representatives as per Section 96 (1) of the German Stock Corporation Act and Sections 1 (1) and 4 (1) of the German One-Third Employee Representation Act. The six shareholder representatives are elected by the Annual General Meeting, and the three employee representatives are elected in line with the provisions of the German Works Constitution Act.

    The electoral term of the Supervisory Board is five years. The period of office of the current Supervisory Board expires at the end of the Annual General Meeting that votes on formal approval of the actions of the Supervisory Board for the 2024 financial year. Dr Andreas Mattner was elected as the Chairman of the Supervisory Board, and Mr Claus-Matthias Böge was elected as the Deputy Chairman

    The Supervisory Board has set itself Rules of Procedure that take the requirements of the German Corporate Governance Code into account. You can view the current Rules of Procedure of the Supervisory Board here (currently only available in German):

    Rules of Procedure of the Supervisory Board of HAMBORNER REIT AG

    Some of the Supervisory Board activities are also carried out in committees. At present, these committees are the Executive Committee, the Audit Committee and the Nomination Committee. The Chairman of the Executive Committee and the Nomination Committee is the Chairman of the Supervisory Board, Dr Andreas Mattner. Mr Claus-Matthias Böge is the Chairman of the Audit Committee. You can view further information on the composition of the Supervisory Board committees here

    In accordance with recommendation C.1 of the German Corporate Governance Code and section 289f (2) no. 6 of the German Commercial Code, the Supervisory Board has developed an expertise and diversity concept that forms the basis for its composition and the formulation of election recommendations to the Annual General Meeting. The aim of the diversity concept for the Supervisory Board is to actively harness diversity as a factor in the company’s success and ensure that different perspectives, skills and backgrounds are reflected in the activities of the Supervisory Board.

    The concept states that, in addition to personal and professional suitability, the following aspects in particular must be taken into account in the composition of the Supervisory Board:

    - Different career and educational backgrounds

    - Appropriate gender representation

    - Balanced age structure

    - Majority of independent members

    - Criteria of internationality

    The Supervisory Board has defined a profile of skills and expertise within the meaning of the Code. This profile states that the Supervisory Board must be composed in such a way that its members collectively have the knowledge, skills and professional expertise required to properly perform their supervisory duties. The Supervisory Board must collectively cover all of the areas of expertise that are relevant to HAMBORNER’s business activities. This includes sector-specific knowledge of the real-estate industry and expertise in the areas of accounting, auditing, controlling, financing, capital markets, risk management, technology/digitalisation, and legal, compliance and corporate governance. Within this, the individual skills of the individual members may complement each other.

    The Supervisory Board in its current composition satisfies all of the defined objectives and collectively covers the entire profile of skills and expertise. The Supervisory Board members have different career and educational backgrounds and have the necessary professional and personal qualifications. The expert knowledge in the fields of accounting and auditing required under Section 100 (5) of the German Stock Corporation Act is fully provided by the Supervisory Board members Mr Claus-Matthias Böge and Mr Rolf Glessing in particular. The employee representative Mr Klaus Hogeweg has relevant experience and expertise in the field of IT and information security.

    You can find further information on the skills profile and the allocation of authority within the Supervisory Board in the following document:

    Skills profile and authority matrix of HAMBORNER REIT AG

    In accordance with the “German Act on the Equal Participation of Women and Men in Leadership Positions in the Public and Private Sectors”, a target gender quota of 30% has been defined for the composition of the Supervisory Board. The Supervisory Board currently has a total of nine members including three women, meaning it meets the defined quota in full.

    To meet the requirements concerning a balanced age structure, the Rules of Procedure of the Supervisory Board define a regular limit of 15 years for membership of the Supervisory Board. In addition, no one may be recommended for election if they are more than 75 years of age. The above criteria are currently met and the Supervisory Board has a suitably balanced age structure.

    In accordance with recommendation C.1 of the German Corporate Governance Code, the Supervisory Board should include what it considers to be an appropriate number of independent members. According to recommendation C.7 of the Code, a Supervisory Board member is particularly not regarded as independent if the respective Supervisory Board member or a close family member of the Supervisory Board member

    - was a member of the company's Management Board in the two years prior to appointment;

    - currently is maintaining (or has maintained) a material business relationship with the company or one of the entities dependent upon the company (e.g. as customer, supplier, lender or advisor) in the year up to his/her appointment, directly or as a shareholder, or in a leading position of a non-group entity;

    - is a close family member of a Management Board member; or

    - has been a member of the Supervisory Board for more than 12 years.

    Bearing in mind the above indicators and the current composition of the Supervisory Board, all of the shareholder representatives are to be regarded as independent, namely Dr Andreas Mattner, Claus-Matthias Böge, Maria Teresa Dreo, Rolf Glessing, Ulrich Graebner and Christel Kaufmann-Hocker. The Supervisory Board will continue to have a majority of independent members in future.

    In addition, the Supervisory Board as a whole must have sufficient international experience. The majority of the current Supervisory Board members have extensive experience and expertise from international activities and meet the requirements in full.

    In accordance with recommendation D.13 of the German Corporate Governance Code, the Supervisory Board should regularly assess the effectiveness of the work of the overall body and its committees. A corresponding self-assessment of the activity of the Supervisory Board was last conducted in 2015 in connection with the election of new members of the body at the time. In view of the recent election of new Supervisory Board members in 2020, a further self-assessment involving an external consulting firm is planned for the second half of 2021.

    Along with due monitoring of the Management Board, ensuring long-term succession planning for the Management Board is a key task of the Supervisory Board. Recommendation B.2 of the German Corporate Governance Code expressly points out that, together with the Management Board, the Supervisory Board shall ensure that there is long-term succession planning.

    Vacancies on the Management Board are always filled in the context of a structured selection process involving an external recruitment consulting firm. The Executive Committee of the Supervisory Board is responsible for managing and implementing the process. Along with personal and professional suitability criteria, the principle of diversity is applied when selecting potential candidates. The Supervisory Board particularly regards diversity as differing, complementary profiles and appropriate gender representation.

    The entire Supervisory Board is responsible for deciding on the appointment of Management Board members. Appointments are made at the suggestion of the Executive Committee in the company’s interest and with due consideration of the above criteria.

     

    Management Board

     

    The Management Board of HAMBORNER REIT AG currently consists of two members. It has sole responsibility for managing the company. The members of the Management Board are appointed by the Supervisory Board. The allocation of responsibilities and cooperation in the Management Board are governed by the Rules of Procedure. After the entry into force of the German Corporate Governance Code in 2002, and taking into account the consequences arising from the changes/additions passed by the Government Commission, the Rules of Procedure applicable to the Management Board have also been adapted accordingly.

    The Supervisory Board has also developed an expertise and diversity concept for the Management Board that takes into account personal and professional expertise as well as a balanced gender and age structure. The current Management Board members have the necessary career and life experience to ensure the successful and proper management of the company and have professional profiles that complement each other.

    Further information on the members of the Management Board and the allocation of responsibilities can be found here

    The Supervisory Board has also defined a target gender quota of 30% for the Management Board to be met by 30 June 2022. This quota is not met at present.

    The Management Board has also addressed the requirements of the German Act on the Equal Participation of Men and Women in Leadership Positions and set a gender quota of 20% for the management level below the Management Board, which is not met at present either. The deadline for achieving this target is 30 June 2022.

    To meet the requirements concerning a balanced age structure, the Rules of Procedure of the Supervisory Board define that nobody over the age of 67 should be appointed to the Management Board.

    Declaration of voluntary commitment to the Institute for Corporate Governance in the German property business (ICG)

    The ICG The ICG has developed “principles for value-oriented company management in the property sector” as an overarching set of guidelines for companies of all legal structures. The principles form the basis for value-oriented, professional and sustainable company management. HAMBORNER has signed up to these principles in a voluntary declaration of commitment.

    Principles of value-based coporate governance in the real estate sector

    Accounting and auditing

    HAMBORNER REIT AG prepares a set of financial statements in line with the International Financial Reporting Standards (IFRS) and another in line with the German Commercial Code. Both sets of financial statements are prepared by the Management Board, audited by the auditor and the Supervisory Board, and published within 90 days after the end of the financial year. The half-year financial report and the quarterly announcements are published within 45 days after the end of the reporting period, and the Audit Committee discusses them with the Management Board in advance.

    Deloitte GmbH Wirtschaftsprüfungsgesellschaft, Düsseldorf, has been the auditor of HAMBORNER REIT AG since the 2008 financial year. The auditor is appointed for a year on the basis of a corresponding approval by the Annual General Meeting. At the 2020 Annual General Meeting, Deloitte GmbH Wirtschaftsprüfungsgesellschaft, Düsseldorf, was elected for the 13th time at the recommendation of the Supervisory Board. Since the 2020 financial year, the responsible audit partners involved in the audit have been Mr Neu and Prof. Reichmann, who is also the responsible auditor.

    In accordance with Article 16 of Regulation (EU) No. 537/2014 of the European Parliament and of the Council of 16 April 2014 (EU Audit Regulation), the company held a call for tender for selection of the auditor in the 2017 financial year. The Audit Committee of the Supervisory Board was responsible for conducting the tendering process. At the recommendation of the Audit Committee and in line with its preference, in March 2018, the Supervisory Board decided initially to propose Deloitte GmbH Wirtschaftsprüfungsgesellschaft, Düsseldorf, to the Annual General Meeting for election as the auditor.

    It was agreed in principle with the statutory auditor that the Chairman of the Audit Committee should be immediately informed regarding grounds for exclusion or lack of impartiality which arise during the audit, in so far as they are not immediately rectified. Furthermore, it was agreed that the Chairman of the Supervisory Board and the Chairman of the Audit Committee should be immediately informed if specific findings or incidents arise in the execution of the audit of financial statements which could be of significance for the proper discharge of the functions of the Supervisory Board. This includes the discovery of facts that comprise an inaccuracy in the declarations on the German Corporate Governance Code submitted by the Managing Board and Supervisory Board.

    Key performance indicators and risk management

    The management system is geared towards making a contribution to target achievement. It ranges from standardised capital expenditure accounts for individual properties through to an integrated budget and medium-term plan at the company level. At the company level, corporate management is aligned with the performance indicators funds from operations (FFO) and net asset value (NAV) per share. Rental income, the vacancy rate, personnel, administrative, maintenance and interest expenses are particularly important operational value drivers and factors for the development of FFO. The fair value of the property portfolio is one of the main influences on NAV per share. Remuneration of the Management Board is geared towards the above key performance indicators and other factors.

    A responsible approach to risk by the company is one of the principles of sound corporate governance. Systematic risk management within the framework of company management ensures that risks are recognised and assessed early and risk positions are optimised. HAMBORNER’s early risk detection system is also subject to the review of the statutory auditor. It is continuously enhanced and adjusted to the changing economic conditions. In addition, important company processes are regularly subjected to an internal review conducted by an external auditing firm. The Management Board regularly informs the Supervisory Board of existing risks and the development thereof. Details on risk management can be found in the risk report within the annual report.

  • Working practices of the Management Board and Supervisory Board

    The German Stock Company Act applies to HAMBORNER REIT AG as a company under German law. A fundamental principle of German corporation law is the dual management system with the executive bodies of the Supervisory Board and Management Board, both of which have independent responsibilities in each case. The Management Board and Supervisory Board work closely together on a basis of trust in managing and monitoring the company.
    The two-person Management Board manages the business of the company with the objective of sustainable value enhancement and in the interests of the company.

    The Management Board advises the Supervisory Board promptly and comprehensively in writing and verbally at the regular meetings about business developments, the position of the company - including risk management - as well as the short and medium-term plans. Use is only made of the possibility of passing resolutions in the written circulation procedure in cases of particular urgency. This is mainly the case with property purchases and sales.

    In particular, the Chairman of the Supervisory Board is in regular contact with the Management Board in order that they can inform each other about the current development of the business environment, significant business transactions and upcoming decisions.

    The company has concluded a pecuniary loss liability insurance policy (D&O liability insurance) for members of the Management Board and members of the Supervisory Board. This covers pecuniary losses from the work as a member of the executive bodies and supervisory bodies of HAMBORNER REIT AG. The sum insured is €15.0 million per claim and not more than €30.0 million per insurance year. In accordance with section 93(2) AktG and item 3.8 of the Code, deductibles for members of the Management Board and Supervisory Board have also been agreed, amounting to at least 10% of the claim and up to at least one and a half times the annual fixed renumeration of the officer. The insurance cover does not apply in the event of wilful intent, such that cover previously granted lapses retroactively were applicable in the event of (subsequent) discovery and benefits provided must be reimbursed to the insurer. The annual insurance premium currently amounts to around €24 thousand plus insurance tax.
     
    The current report of the Supervisory Board is reproduced in the annual report in each case.

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    Christoph Heitmann
    Investor Relations /
    Public Relations


    Tel.: +49 (0) 203 54405-32
    Fax: +49 (0) 203 54405-49
    info(at)ir.hamborner.de

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    Jacqueline Steuer
    Investor Relations /
    Public Relations


    Tel.: +49 (0) 0203 54405-63
    Fax: +49 (0) 0203 54405-49
    info(at)ir.hamborner.de

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