Compliance statement

Compliance Statement according to Section 161 of the German Stock Corporations Act (AktG)

Under Section 161 of the German Stock Corporations Act (AktG), the Management Board and Supervisory Board of listed German stock corporations are required to declare each year that the recommendations of the Government Commission on the German Corporate Governance Code published by the Federal Ministry of Justice in the official section of the Bundesanzeiger (Federal Gazette) have been and will be complied with or, if not, which recommendations have not been or will not be applied, and why. The Management Board and Supervisory Board of Demag Cranes AG last issued the following Compliance Statement in accordance with Section 161 of the German Stock Corporations Act (AktG) on 30 November 2012:

“Demag Cranes AG can confirm that since issuing the last declaration of conformity on 30 November 2011 and addendum on 5 December 2011 up to 15 June 2012 in accordance with the Code in force on 26 May 2010 and since 16 June 2012 in accordance with the Code in force on 15 May 2012, the recommendations published by the Federal Ministry of Justice in the official section of the Federal Gazette with regard to the Government Commission on the German Corporate Governance Code have been complied with in full, with the following exceptions:

a) Clause 3.8 provides for the agreement of a deductible if the Company takes out a D&O policy on behalf of the Management and Supervisory Boards. Demag Cranes AG’s D&O insurance policy does not include a deductible for the Supervisory Board, since the Management Board and Supervisory Board do not deem this to be either necessary or suitable for controlling the behaviour of the board members.

b) In accordance with Clause 5.4.1 (2), the Supervisory Board must specify concrete objectives regarding its composition. In this connection, provision should notably be made to achieve an appropriate degree of female representation, and the number of independent Supervisory Board members included. The Supervisory Board recognised the importance of diversity with the objectives regarding its composition adopted on 3 September 2010. It aims to achieve an appropriate degree of female representation and is therefore to include women as soon as possible. The Supervisory Board did not specify a precise number or proportion of female members. In addition, the Supervisory Board aims to achieve an appropriate degree of representation by independent Supervisory Board members but has so far not specified any precise number or proportion in this regard. The Supervisory Board did not specify a precise number or proportion either in the case of female members or in that of independent Supervisory Board members, deeming such targets to be inappropriate, since the search for suitable candidates should focus on the specific situation of Demag Cranes AG and the resulting requirements. This is designed to ensure that the composition of the Supervisory Board is determined in the best interests of the Company based on the qualifications and suitability of candidates.

c) In accordance with Clause 5.4.6 of the German Corporate Governance Code that came into force on 26 May 2010, the members of the Supervisory Board should be paid performance-related remuneration in addition to their fixed basic remuneration. The Articles of Association of Demag Cranes AG do not include a performance-related component for members of the Supervisory Board. This is designed to safeguard the independence which the Supervisory Board must have to be able to carry out its monitoring function. The performance of this function should not be tied to any monetary incentives. Clause 5.4.6 of the German Corporate Governance Code that came into force on 15 May 2012 no longer contains any such recommendation.

d) In accordance with Clause 5.4.3, an application for the judicial appointment of a Supervisory Board member should be limited in time up to the next general meeting. On some occasions, an opinion has been expressed that the recommendation also applies to the judicial appointment of employee representatives to the Supervisory Board. As a matter of precaution, the Management Board and Supervisory Board are declaring that this recommendation was not implemented in having employee representatives appointed by court to the Supervisory Board of Demag Cranes AG. As employee representatives on the Supervisory Board are not elected by the general meeting, the Management Board and Supervisory Board believe it is inappropriate to limit their judicial appointment in time up to the next general meeting.

e) In accordance with the third sentence of Clause 4.2.3, the monetary components of remuneration for Management Board members should comprise fixed and variable components. It is unclear whether this recommendation also applies to Supervisory Board members appointed to the Management Board in accordance with Section 105 (2) of the German Stock Corporations Act (AktG). By way of precaution, the Management Board and Supervisory Board declare that Mr. Axel Arendt, the Supervisory Board member appointed to the Management Board in accordance with Section 105 (2) of the German Stock Corporations Act (AktG) with effect from 5 December 2011 up to 30 November 2012 at the latest, received solely a fixed basic remuneration without variable components for his work on the Management Board. In view of Mr. Arendt’s brief tenure which came to an end on 15 May 2012, variable remuneration, which pursuant to Clause 4.2.3, Sentence 4 of the German Corporate Governance Code should be subject to a multi-year basis of assessment, would not have been appropriate.

Aside from the above exceptions relating to Clause 3.8, Clause 5.4.1 (2) and Clause 5.4.3 of the German Corporate Governance Code, the recommendations of the Government Commission on the German Corporate Governance Code in force on 15 May 2012 are fully complied with.”
 

 

Düsseldorf, 30 November 2012

The Management Board                                   The Supervisory Board


 

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