Statement on Corporate Governance
Pursuant to Section 289 a of the German Commercial Code (HGB) with the Declaration of Conformity by the Executive Board and the Supervisory Board of Phoenix Solar AG in respect of the German Corporate Governance Code pursuant to Section 161 of the German Securities Trading Act (AktG)
Relevant corporate governance practices
Corporate governance at Phoenix Solar AG, as a listed German stock corporation, is determined primarily by the German Stock Corporation Act (AktG) and other statutory provisions under Ger-man commercial and company law.
The Executive and Supervisory boards have also adopted the recommendations of the "Gov-ernment Commission of the German Corporate Governance Code", insofar as no departure from the Code is disclosed in the declaration of conformity. The company's declaration of conformity has been made accessible on the company's website. The German Corporate Governance Code can be accessed on the website of the Government Commission of the German Corporate Governance Code under http://www.dcgk.de/de/kodex/aktuelle-fassung/praeambel.html.
Executive and Supervisory boards' working methodology and composition and working methodology of their committees
The Executive and Supervisory boards constitute the dual board system for the management and supervision of Phoenix Solar AG. The two boards work closely together to ensure that opportuni-ties and risks are managed responsibly with the aim of achieving sustainable growth in the com-pany's value. The two functions of "management" and "supervision" are separated clearly in this context.
The Executive Board members manage the company at their own responsibility, and perform their tasks on the basis of cooperation and a team approach. Rules of business procedure form the basis for their collaboration. The Executive Board develops the corporate strategy, and decides on measures for its implementation at operational level. A clear allocation of tasks, which accords with the schedule of responsibilities, determines the individual Executive Board members' areas of competence. The entire Executive Board decides on all significant measures.
The Executive Board members keep each other informed, and report to one another on such measures. The Chief Executive Officer coordinates the Executive Board's areas of responsibility, and compliance with reporting duties, and is to be informed by the other Executive Board members about all matters of importance.
As a rule, the Executive Board passes resolutions at meetings that the Chief Executive Officer convenes and chairs. Any member of the Executive Board may request that resolutions are also passed outside meetings in accordance with the rules of business procedure. The Executive Board has a quorum when all members have been invited and at least half of the members are present. The Executive Board passes resolutions by way of a simple majority of the votes cast in meetings and, outside meetings, by a simple majority of its members.
The Executive Board informs the Supervisory Board regularly and extensively within an appropriate timeframe about all issues relating to strategy, planning, business trends, the risk position, risk management, and compliance, in other words, adherence to laws and defined codes of conduct. The Supervisory Board is informed immediately in the event of important occurrences that could exert a major impact on the company. Significant measures require approval by the Supervisory Board in accordance with the details set out in the rules of business procedure.
The Executive Board is responsible for ensuring that the statutory provisions and rules and guidelines valid within the company are adhered to, both within the company and the Group. To this end, as well as with a view to observing and disseminating high ethical standards at Phoenix Solar, a standard compliance organisation that is binding on the entire Group is in force. The compliance organisation reflects the Group's current positioning, and encompasses a clearly structured set of guidelines and reporting procedures. It has been approved by the Executive Board and managers, and communicated to employees.
The Executive Board has not formed any committees.
The Supervisory Board, which consists of three members, supervises and advises the Executive Board in the management of the company. The Supervisory Board has established a set of rules of business procedure as the basis for collaboration. The Supervisory Board coordinates the strategy developed by the Executive Board, and is informed about the status of strategy implementation, the financial and investment planning for the next financial year, and medium-term planning. Outside the regular meetings, the Supervisory Board Chair engages in ongoing dialogue with the Chief Executive Officer on issues of strategy, business trends and development, the risk position, risk management and compliance.
The Supervisory Board convenes at least once every calendar quarter. The Supervisory Board meetings are convened and led by its Chair or, in the Chair's absence, the Deputy Chair in ac-cordance with the rules of business procedure. If an agenda item has not been properly an-nounced, it may be put to resolution only if no Supervisory Board member objects before voting. Supervisory Board resolutions are generally passed at meetings, and, in accordance with the rules of business procedure, also outside meetings. The Supervisory Board has a quorum if at least three members participate in the passing of resolutions, and it adopts resolutions by a simple majority.
The Supervisory Board has formed no committees, as this is not expedient given the fact that the Supervisory Board consists of just three members. A Supervisory Board consisting of three members can also fulfil its tasks efficiently and effectively without forming committees.
Joint Declaration of Conformity by the Executive Board and the Supervisory Board of Phoenix Solar AG on the German Corporate Governance Code
The Executive and Supervisory boards of Phoenix Solar AG declare that, since the last declaration of conformity on March 25, 2015, the recommendations of the "German Corporate Governance Code Government Commission" – in each case with the following exception – in the version dates June 24, 2014 (published in the German Federal Gazette [Bundesanzeiger] on September 30, 2014) have been complied with, and will continue to be complied with in the future, in the version dated May 5, 2015 (published in the German Federal Gazette [Bundesanzeiger] on June 12, 2015):
In the variable compensation components, retroactive modification of performance targets or comparison parameters shall be excluded.
(pursuant to section 4.2.3 of the Code)
In a market environment that is subject to dynamic change and development, the Executive and Supervisory boards are of the opinion that it can be reasonable and expedient in justified cases to retroactively adjust performance targets for comparison parameters for variable compensation components.
Sulzemoos, 24 March 2016
Phoenix Solar Aktiengesellschaft
For the Executive Board For the Supervisory Board
Tim P. Ryan Oliver Gosemann
(Chief Executive Officer) (Supervisory Board Chairman)