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Declaration of Compliance

Pursuant to Section 161 AktG, in connection with Section 15 EGAktG [Introductory Law of the Stock Corporation Act], TTL Information Technology AG’s Board of Directors and Supervisory Board declare:

TTL AG has complied with the recommendations published in the official section of the German Federal Gazette of the “Government Committee on the German Corporate Governance Codex” in its version of 5 May 2015 and from its application of 7 February 2017 onwards since the submission of its most recent Declaration of Compliance with the following exceptions and shall comply with it with the following exceptions:

Point 3.4.

The Supervisory Board should determine the information and reporting obligations of the Board of Directors in greater detail.

The Board of Directors reports to the Supervisory Board according to legal regulations, in particular pursuant to Section 90 of the German Stock Corporation Act (Aktiengesetz). The Supervisory Board believes that the statutory regulations on disclosure and reporting obligations already ensure the adequate provision of information.

Point 3.8.

An excess that complies with statutory regulations should be agreed for the Board of Directors in D&O insurance for the Supervisory Board.

The company had and has taken out D&O insurance for the members of the Supervisory Board which does not provide for any excess for Supervisory Board members. We believe that the motivation and responsibility with which members of the Supervisory Board undertake their duties would not be improved as a result of an excess in the D&O insurance.

Point 4.1.3.

Employees should be granted the opportunity, in a suitable manner which protects them, to provide information on legal violations in the company.

Compliance with the recommendation is not reported by an employee due to current staff numbers.

Point 4.2.1.

The Board of Directors should consist of several people and have one Chairman or speaker.

TTL AG's Articles of Association provide for the Board of Directors consisting of at least one person. The number of members of the Board of Directors is determined by the Supervisory Board. In accordance with the Articles of Association the Board of Directors consisted of a sole director until 30 September 2017. Since 1 October 2017, the Board of Directors has consisted of two members and a Chairman has been appointed.

Rules of procedure should govern the work of the Board of Directors, in particular the responsibilities of individual Board Members, the matters reserved for the overall board and the necessary majority with regard to resolutions of the Board of Directors.

To date, the Supervisory Board has not issued any rules of procedures for the Board of Directors as there was a sole director until 30 September 2017. In future, the recommendation should be followed.

Point 4.2.3.

The monetary parts of remuneration should include fixed and variable components.

Due to the previous structure of TTL AG, fixed remuneration was agreed for the sole director. Previously, this payment for the sole director was waived. Since 1 October 2017, a second Board Member has been appointed, with whom fixed and variable remuneration components were agreed according to the recommendation.

Both positive and negative developments should be taken into consideration when designing the variable parts of remuneration.

Performance-related payments (emoluments) and options to “virtual” shares were promised to a member of the Board of Directors as variable remuneration. Pursuant to Point 4.2.3(2)(4) of the Codex, variable parts of remuneration should consider positive and negative developments within the agreed measurement period as payments may transpire to be accordingly higher or lower, or fully fail to materialise. When exercising the options, the Board Member shall receive share-price-dependent payments that are based solely on the stock-market price of the company's share within a reference period. In deviation from Point 4.2.3(2)(7) of the Codex, options to virtual shares therefore do not relate to “demanding, relevant comparison parameters” pursuant to the Codex. We do not believe that an increase in motivation and feeling of responsibility can be achieved through additional comparison parameters.

When concluding agreements for the Board of Directors, it should be ensured that payments to one member of the Board of Directors do not exceed the value of two years of remuneration upon the premature ending of Board activity, including ancillary services, (cap on severance payment) and that remuneration is only awarded for the remainder of the employment agreement.

The company has not and will not agree any cap on severance payments when concluding agreements for the Board of Directors. Such remuneration contradicts the essential understanding of the Board of Directors Agreement that was regularly concluded for the period of the appointment and cannot be ordinarily terminated. Furthermore, the company cannot unilaterally enforce a limitation on severance payments if the Board activity, as is frequently the case in practice, is ended by mutual agreement. In the event of a premature termination of a Board Member Agreement, we will endeavour to bear the fundamental idea of the recommendation in mind.

The Chairman of the Supervisory Board should inform the Shareholders’ Meeting of the basic principles of the remuneration system and its amendment.

Based on the previous situation with a sole director, the remuneration of the Board of Directors could be found in the Annual Account and giving additional information to the Shareholders’ Meeting was superfluous. With the appointment of a further Board Member, the company shall in future follow the recommendation.

Point 5.1.2.

The Supervisory Board should also consider diversity when composing the Board of Directors.

The Supervisory Board decides on the composition of the Board of Directors primarily according to expertise and competence. Further qualities such as gender or national or religious affiliation were and are of secondary importance for decision-making.

Point 5.3.1.

The Supervisory Board should form specially qualified committees depending on the specific circumstances of the company and the number of members.

The Supervisory Board consists of only three members. As a committee of a minimum of two members needs to exist, the formation of committees would not lead to more efficient activity of the Supervisory Board.

Point 5.3.2.

The Supervisory Board should set up an Audit Committee which in particular deals with monitoring invoicing, the invoicing process, the efficacy of the internal control system, risk management and the internal auditing system, the audit and compliance.

The Supervisory Board consists of only three members. As a committee of a minimum of two members needs to exist, the formation of an Auditing Committee would not lead to more efficient activity of the Supervisory Board.

Point 5.3.3.

The Supervisory Board should form a Nominations Committee which is exclusively occupied by shareholder representatives and provides the Supervisory Board with suitable candidates for suggestions to the Shareholders’ Meeting to elect members of the Supervisory Board.

As the Supervisory Board, consisting of three members, only includes shareholder representatives and the previous practice of preparing election suggestions in the full supervisory board has proven to be efficient, the Supervisory Board does not see the need to form a Nominations Committee.

Point 5.4.1.

The Supervisory Board should name specific objectives for its composition and develop a skills profile for the full board. For its composition, within the context of the company-specific situation, it should appropriately consider the company's international activity, potential conflicts of interest, the number of independent members of the Supervisory Board, an age limit for Supervisory Board members to be established, a control limit to be established for the term of belonging to the Supervisory Board and diversity.

With the exception of an age limit for members of the Supervisory Board and in deviation from Point 5.4.1(2) of the Codex, the Supervisory Board did not name any specific objectives for its composition and has not developed any skills profile for the full board and will not name such objectives or develop any formal skills profile. However, the Supervisory Board believes that it currently has an appropriate number of independent members, in its opinion. The Codex does not however conclusively govern the term of independence of Supervisory Board Members, but negatively defines it through examples of rules, in which cases there is no longer any independence “in particular”. Furthermore, the Supervisory Board shall no longer be independent if significant, and not only temporary, conflicts of interest may rise without it depending on whether conflicts of interest actually arise or not. As a result, the question arises for the Supervisory Board as to when independence pursuant to Point 5.4.2 of the Codex can be assumed in individual cases appears to be subject to too much legal uncertainty than the determination of a specific number shows. With regard to the control limit for the term of belonging to the Supervisory Board, the Supervisory Board believes that it is more beneficial for the company’s interests to be able to also rely in individual cases on the many years of experience of individual members in the Supervisory Board and to weigh up continuity and replacement in individual cases. Potential conflicts of interest and competence requirements are also considered without formal specifications by the Supervisory Board. For these reasons, the Supervisory Board has waived formal specifications. Due to no relevant objectives and a skills profile for the full board, in this respect there is no consideration for the election suggestions of the Supervisory Board in the Shareholders’ Meeting nor any publication on the status of implementation, including the number of independent members and their names.

A curriculum vitae should be attached to the candidate suggestion and the Supervisory Board should disclose the personal and commercial relationships of each candidate to the company, the company's bodies and any shareholder who is significantly invested in the company when providing the Shareholders’ Meeting with suggestions for election to the Supervisory Board.

The company does not believe that the recommendation of the German Corporate Governance Codex governs, with sufficient specificity, which candidate relationships need to be disclosed and the extent to which they need to be disclosed when providing suggestions for election to the Shareholders’ Meeting in order to satisfy the recommendation. In the interest of the legal certainty of future elections to the Supervisory Board, the Board of Directors and Supervisory Board have decided to declare a deviation from this recommendation. We believe that the statutory disclosure requirements in Section 124(3)(4) and Section 125(1)(5) of the German Stock Corporation Act (Aktiengesetz) consider the information requirement of shareholders and shall in due course examine and decide whether, when suggestions for election are given to the Shareholders’ Meeting, additional information regarding the candidates should be made accessible on a voluntary basis where the recommendation of the Codex is not binding. To date, the company has not published the curricula vitae of members of the Supervisory Board and candidates for election but is planning to do so in future on its website.

Point 5.4.6.

The deputy chair on the Supervisory Board, the chair and members on committees should be considered in the remuneration of the Supervisory Board.

The company does not believe separate remuneration for the deputy chairs of the Supervisory Board to be necessary as the number of occasions where a deputy chair replaced the Chairman was and is low. There are no committees.

Remuneration of Supervisory Board members should be specified in the Appendix or Management Report, displayed according to their components. Moreover, remuneration paid by the company to the members of the Supervisory Board of the benefits granted for services rendered in person, in particular consultation and brokerage services, must be indicated individually.

The paid remuneration of the Supervisory Board is shown as a total pursuant to IAS 24 in the consolidated notes. Additional consultation fees that go beyond remuneration according to the Articles of Association, if they become due, are not shown as they do not provide any additional information of capital market relevance.

Point 7.1.2.

The consolidated financial statements should be publicly accessible within 90 days of the end of the financial year and the half-yearly financial report should be made publicly accessible within 45 days of the end of the reporting period.

The 2016 consolidated financial statements were made accessible in the first four months of the following year and the 2017 half-yearly financial report was made accessible within three months of the end of the reporting period on the company's website. In future, we will strive to follow the recommendation.


Munich, 1 December 2017 (only available in German)

 

Archive of Declarations of Compliance

Entsprechenserklärung 2017 (only available in German) (88 Kb)

Entsprechenserklärung 2016 (only available in German) (115 Kb)

Entsprechenserklärung 2015 (only available in German) (109 Kb)

Entsprechenserklärung 2014 (only available in German) (21 Kb)

Entsprechenserklärung 2013 (only available in German) (104 Kb)

Entsprechenserklärung 2012 (only available in German) (21 Kb)

Entsprechenserklärung 2011 (only available in German) (21 Kb)

Entsprechenserklärung 2010 (only available in German) (88 Kb)

Entsprechenserklärung 2009 (only available in German) (113 Kb)

Entsprechenserklärung 2008 (only available in German) (47 Kb)

Entsprechenserklärung 2007 (only available in German) (40 Kb)

Entsprechenserklärung 2006 (only available in German) (17 Kb)

Entsprechenserklärung 2005 (only available in German) (14 Kb)

Entsprechenserklärung 2004 (only available in German) (29 Kb)

 

Press contact

Please send your request to the contact stated below

TTL Beteiligungs- und Grundbesitz-AG
Theresienhoehe 28/1
80539 Munich
Germany

Phone: +49 89 381611-0
Fax: +49 89 391592
Email: presse@ttl-ag.de