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Report of the Supervisory Board
The Supervisory Board of ALTANA AG, carrying out the functions stipulated by law and the Articles of Association, closely followed the work of the Management Board again in 2019 and monitored its management activities.
The Supervisory Board dealt in depth with the situation and development of the company as well as with various current issues. The Supervisory Board was regularly informed by the Management Board about the respective agenda items through presentations and oral reports in meetings. The Supervisory Board also regularly received additional written reports. Between Supervisory Board meetings, the Chairman of the Management Board informed the Chairman of the Supervisory Board about significant developments and events, and discussed pending or planned decisions with him. The Supervisory Board was involved in all major company decisions.
Meetings of the Supervisory Board
In the 2019 fiscal year, the Supervisory Board held four regular meetings and one constitutive meeting. At the regular meetings, the economic situation and the development perspectives of the ALTANA Group, as well as important business events, were discussed and deliberated on in detail. In addition to regular reporting on ALTANA’s sales, earnings, and financial development, the Supervisory Board dealt in depth with the strategy of ALTANA and its individual divisions. Furthermore, the Supervisory Board intensively discussed the situation, development, and plans of the ELANTAS and ACTEGA divisions as well as that of ACTEGA Metal Print GmbH, in the 2019 fiscal year. The Supervisory Board also had the Group’s current corporate venturing activities presented to it and in this context dealt in particular with the company’s investment in the American company CiDRA Holdings LLC and the Israeli company Landa Corporation Ltd. In 2019, the Supervisory Board also dealt extensively with innovation management, ALTANA’s plan to become CO2 neutral by 2025, and the Finance Roadmap for the strategic development of the finance functions in the coming years. At its June meeting, the Supervisory Board reappointed Mr. Martin Babilas as Chairman of the Management Board and Labor Director for a period of five years until April 30, 2025, and resolved to extend his employment contract accordingly. Moreover, the Supervisory Board resolved to change the compensation system for members of the Management Board. At its December meeting, the Supervisory Board dealt in detail with the corporate planning for the next few years as well as the budget for 2020, which it approved. In the constituent Supervisory Board meeting following the Annual General Meeting in March of 2019, the Chairman of the Supervisory Board was re-elected, and the Annual General Meeting reelected him as a member of the Supervisory Board.
Meetings of the Committees
The Human Resources Committee met thrice in the year under review. At the meetings, it dealt with the reappointment of Mr. Babilas as Chairman of the Management Board and Labor Director and the corresponding extension of his contract, as well as with issues relating to Management Board compensation, in particular the change to the compensation system, which was subsequently resolved by the Supervisory Board. The Audit Committee met twice during the year under review and reported regularly to the Supervisory Board. In the presence of the auditor as well as members of the Management Board, the Audit Committee discussed the annual financial statements of ALTANA AG and the ALTANA Group. In addition, it dealt with the statutory audit process mandating the auditor, the setting of audit fees, monitoring the auditor’s independence, and the approval of non-auditing services of the auditor. Furthermore, the Audit Committee addressed the identification and monitoring of risks in the Group, the Group’s internal auditing activities, ALTANA’s Compliance Management System, as well as the good corporate governance, in particular the amendments to the German Corporate Governance Code and the German Stock Corporation Act by implementing the Second Shareholder Rights Directive (ARUG II). The Mediation Committee, established in accordance with section 27 (3) of the German Codetermination Act, did not convene in the 2019 fiscal year.
Annual Financial Statements
The annual financial statements of ALTANA AG, the consolidated financial statements for the year ended December 31, 2019, and the management report of ALTANA AG, as well as the Group management report, were audited by PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft, which was appointed by the Annual General Meeting and engaged by the Audit Committee of the Supervisory Board, and it issued an unqualified audit opinion in each case. The system for early risk recognition set up for the ALTANA Group pursuant to section 91 of the German Stock Corporation Act was audited, and the examination revealed that the system is capable of fulfilling its objectives.
The financial statement documentation, the Corporate Report, the reports of PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft on the audit of the annual financial statements and the consolidated financial statements, as well as the Management Board’s proposal for the distribution of the profit, were made available to all Supervisory Board members. The Audit Committee of the Supervisory Board dealt at length with this documentation. The Supervisory Board inspected the documentation and dealt with it in depth at its balance sheet meeting in the presence of the auditor, who reported on the main results of the examination. The Supervisory Board is in agreement with the findings of the audit without objections and its meeting of March 18, 2020, approved the annual financial statements and consolidated financial statements prepared by the Management Board. The annual financial statements are thereby adopted. The Supervisory Board evaluated the Management Board’s proposal for the distribution of the profit and is in agreement with its recommendation.
Report in Accordance with Section 312 of the German Stock Corporation Act
The Management Board prepared a report in accordance with section 312 of the German Stock Corporation Act on relations with affiliated companies for the 2019 fiscal year. The Supervisory Board inspected this report and found it to be accurate. The auditor issued the following audit opinion:
“On completion of our audit and assessment in accordance with professional standards, we confirm that the factual statements of the report are correct and that the consideration paid by the company for the legal transactions in the report was not inappropriately high.”
The Supervisory Board approved the auditor’s findings. Following the completion of its own review, the Supervisory Board has no objections to the Management Board’s statement at the end of the report.
On March 12, 2019, the Ordinary Annual General Meeting of ALTANA AG re-elected Dr. Klaus-Jürgen Schmieder as a member of the Supervisory Board. His tenure ends following the Annual General Meeting in 2020. Stefan Weis resigned from his position as the member of the Supervisory Board representing trade unions with effect from June 28, 2019. In view of this, on September 17, 2019, the Duisburg Local Court appointed Stefan Soltmann as the member of the Supervisory Board representing the unions. On October 1, 2019, the Supervisory Board elected Mr. Soltmann to its Audit Committee, of which Mr. Weis was previously also a member. In the Supervisory Board meeting of June 27, 2019, Martin Babilas was reappointed Chairman of the Management Board and Labor Director of ALTANA AG for a period of five years until April 30, 2025.
The Supervisory Board would like to express its gratitude to Mr. Weis for the good and trusting cooperation. The Supervisory Board would also like to thank the members of the Management Board, the company’s management, and the Group’s employees for their achievements and commitment during the last fiscal year.
Wesel, March 18, 2020
The Supervisory Board
Dr. Klaus-Jürgen Schmieder
Chairman of the Supervisory Board