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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 and monitored its management activities in the 2020 fiscal year. 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, which were held in 2020 without exception via video conference due to the coronavirus pandemic. 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 2020 fiscal year, the Supervisory Board held four regular meetings and two constitutive meetings. At the regular meetings, the economic situation and the development perspectives of the ALTANA Group, as well as important business events, including acquisitions, 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. In each of the four regular Supervisory Board meetings, the Management Board reported to the Supervisory Board in detail about the effects of the coronavirus pandemic on the company and the measures the management had taken with the help of crisis teams expressly set up for this purpose to protect the health of employees and to minimize the pandemic’s negative effects on business. Furthermore, the Supervisory Board intensively discussed the situation, development, and plans of the BYK and ECKART divisions, after focusing on ELANTAS and ACTEGA the year before. The Supervisory Board received regular updates on the company’s participation in the Israeli Landa Corporation Ltd. (“Landa Digital Printing”) and devoted one of its 2020 meetings to this investment in detail. In addition, the Supervisory Board dealt intensively in 2020 with innovation management at BYK and ECKART and the digital transformation of the Group. The Supervisory Board conducted the biennial Supervisory Board self‑assessment (formerly: efficiency review) in the fall of the year. Furthermore, the Supervisory Board again adopted targets for the proportion of women on the Supervisory Board and the Management Board. At its December meeting, the Supervisory Board dealt in depth with and approved the corporate planning for the next three years and the budget for 2021. At the Supervisory Board’s constituent meeting following the Ordinary Annual General Meeting in March, the then Chairman of the Supervisory Board, Dr. Klaus-Jürgen Schmieder, was reelected as a member of the Supervisory Board by the Annual General Meeting. At a second constituent meeting in May following Dr. Schmieder’s departure from the Supervisory Board, the Board elected Dr. Matthias L. Wolfgruber as its new chairman.
Meetings of the Committees
The Human Resources Committee met thrice in the year under review. At its meetings, it discussed recommendations to the Supervisory Board on the payment of variable compensation components for 2019 and the payments from the ALTANA Equity Performance Program 2016 to the Management Board members, as well as the targets for the short term bonuses of the Management Board members for 2021 and the allocation values in the ALTANA Equity Performance Program of the Management Board members for 2021. The Audit Committee met twice in 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. Also, following a recommendation of the German Corporate Governance Code, the Audit Committee 2020 devised a regular assessment of the quality of the audit of the financial statements. In December, the Audit Committee dealt with cyber risks threatening the Group and how to defend against them. The Mediation Committee, established in accordance with section 27 (3) of the German Codetermination Act, did not convene in the 2020 fiscal year.
Annual Financial Statements
The Annual Financial Statements of ALTANA AG, the Consolidated Financial Statements for the year ended December 31, 2020, 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 17, 2021, 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 2020 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 18, 2020, the Ordinary Annual General Meeting of ALTANA AG reelected Dr. Klaus-Jürgen Schmieder as a member of the Supervisory Board until the end of May 28, 2020. Dr. Schmieder stepped down from the Supervisory Board at this time. Dr. Schmieder had been a Supervisory Board member for almost 20 years, the Chairman of the Audit Committee since 2001, and Chairman of the Supervisory Board since 2012. With effect from May 29, 2020, the Annual General Meeting elected Professor Dr. Frank Richter as a member of the Supervisory Board. His tenure ends following the Annual General Meeting in 2025. After the departure of its chairman Dr. Schmieder, the Supervisory Board elected Dr. Matthias L. Wolfgruber as its new chairman on May 29, 2020. As Chairman of the Supervisory Board, Dr. Wolfgruber has since then also been a member and Chairman of the Human Resources and Mediation Committees by virtue of his office.
The company supported Professor Dr. Richter during his onboarding by familiarizing him with key aspects of the Group through workshops and tours of Wesel.
On February 16, 2021, Beate Schlaven, who had been a member of the Supervisory Board and its Human Resources Committee since 2018, passed away. The employee elected to step in for Ms. Schlaven, Jürgen Bembenek, subsequently became a member of the Supervisory Board.
The Supervisory Board would like to express its gratitude to Dr. Schmieder for his many years of outstanding and successful collaboration. It commemorates Beate Schlaven, who worked for ALTANA for more than 40 years and committed herself greatly to the welfare of the company and its employees. It would also like to thank the members of the Management Board and the management as well as the employees of the Group for their achievements and commitment during the last fiscal year.
Wesel, March 17, 2021
The Supervisory Board
Dr. Matthias L. Wolfgruber
Chairman of the Supervisory Board