OUR LOCATIONS

1. Preamble
For reasons of better readability, the simultaneous use of female and male forms of language is avoided in the following. All personal names apply equally to both genders.

1.1 Content and objectives

  1. The Public Corporate Governance Code for the affiliated companies of the Free State of Saxony contains essential provisions for the management, monitoring and auditing of companies as well as internationally and nationally recognized standards of good and responsible corporate governance.
  2. The aim is to improve the management and supervision of the company by its bodies.
  3. The Public Corporate Governance Code is also intended to strengthen public trust in associated companies of the Free State of Saxony and in the Free State of Saxony as a shareholder through transparency, a sense of responsibility and control.

1.2 Structure

  1. The Public Corporate Governance Code of the Free State of Saxony contains obligations, recommendations and suggestions for the bodies of the associated companies.
  2. To the extent that the Code formulates an obligation, it essentially reflects applicable legal provisions (statutory regulation, regulation in the articles of association or rules of procedure of the associated company). If this is not the case, it is a recommendation within the meaning of paragraph 6.
  3. Recommendations of the Public Corporate Governance Code of the Free State of Saxony are identified by the use of the word "should". Companies may deviate from the recommendations, but are obliged to justify these deviations and to disclose them annually in the Corporate Governance Report.
  4. Deviations from the suggestions of the Public Corporate Governance Code of the Free State of Saxony are possible without disclosure; “should” or “can” formulations are used for this purpose.
  5. In part and depending on the legal form, the recommendations and suggestions also reflect the law applicable to the respective company. This is expressed for informational purposes and not exhaustively by references to the legal regulations (“see Section xxx AktG”). In addition, the respective articles of association or rules of procedure can oblige the company's bodies to observe certain recommendations and suggestions.

1.3 Scope

  1. The Public Corporate Governance Code of the Free State of Saxony is aimed at companies in the legal form of a legal entity under private law and partnerships in which the Free State of Saxony directly or indirectly holds a majority interest.
  2. If the Free State of Saxony does not have a majority shareholding, but directly or indirectly holds a share of at least 25 percent and no other Public Corporate Governance Code is applicable, the Free State of Saxony should work towards ensuring that the Public Corporate Governance Code of the Free State of Saxony is applied.
  3. Companies in the legal form of a legal entity under public law that are subject to the supervision of the Free State of Saxony and where the guarantor rights are exercised solely by the State Ministry of Finance are recommended to apply the Public Corporate Governance Code of the Free State of Saxony, provided that legal provisions do not conflict with this. This recommendation also applies to companies in the legal form of a legal entity under private law in which the public law institutions referred to in sentence 1 hold a majority shareholding.

1.4 Anchoring, Corporate Governance Report

  1. The State Ministry of Finance, which is responsible for central investment management in accordance with the State Government's decision on the delimitation of business areas, or the State Ministries of the Free State of Saxony that are otherwise technically responsible, ensure that the Public Corporate Governance Code of the Free State of Saxony adopted by the State Government is observed and anchored in the company's rules and regulations.
  2. The provisions are anchored in the statutes, in rules of procedure, by resolution of the shareholders' meeting or by a voluntary commitment by the bodies. In justified cases, the State Ministry of Finance can allow exceptions to the obligation to apply (e.g. in cases where a company is not active on the market and only has insignificant business operations). The Saxon Court of Auditors must be informed of these exceptions.
  3. The management and supervisory body of the company then declare annually when examining the annual financial statements that the recommendations of the Public Corporate Governance Code of the Free State of Saxony for the relevant financial year have been complied with.

was implemented or which recommendations were not applied (Corporate Governance Report). If recommendations were not complied with, this must be explained in a comprehensible manner. The suggestions in the Code can also be commented on. The report also includes a presentation of the proportion of women in management positions and supervisory bodies. The report should also include, on the basis of the consent of those affected, a presentation of the annual remuneration and fringe benefits for the management and their associated personal data.

2. Shareholders and shareholders’ meeting

2.1 The Free State of Saxony as shareholder

  1. The Free State of Saxony exercises its rights as a shareholder through the central shareholding administration in the State Ministry of Finance. This administration is to be involved in important decisions in a timely and comprehensive manner by the management and supervisory body. It exercises the voting rights for the Free State of Saxony in the shareholders' meeting.

2.2 Shareholders’ meeting

  1. The Free State of Saxony as shareholder decides – if necessary together with the other shareholders or, in the case of indirect shareholdings, as a shareholder of the direct shareholding – on the articles of association and thus on the object of the company as well as its legal basis (also: capital measures, company agreements, etc.).
  2. The shareholders' meeting or the supervisory body decides within the first eight months of the following financial year on the approval of the annual financial statements and the appropriation of profits. To this end, the management prepares the annual financial statements and the management report or the consolidated financial statements and the consolidated management report for the previous financial year within the first three months of the financial year (see Section 65 SäHO, Section 264 HGB) and submits these to the supervisory body or the shareholders' meeting in good time (see Section 42a Paragraph 2 GmbHG). Any shorter statutory or statutory provisions on the form or deadline for the preparation or approval of the annual financial statements or consolidated financial statements remain unaffected by this.
  3. The shareholders' meeting shall decide on the appointment and dismissal of members of the management and, within the first eight months of the following financial year, on the discharge of the management and supervisory body, unless the law provides otherwise (see Section 46 No. 5 GmbHG, Sections 119 Para. 1 No. 4, 120 AktG). No representative of the Free State of Saxony who is himself a member of the supervisory body shall participate in the shareholders' meeting's decision on the discharge of the supervisory body.
  4. When appointing members of the Executive Board, the following principles should be observed:
  • The term of appointment shall not exceed five years (see Section 84 of the German Stock Corporation Act); repeated appointments or extensions of the term of office, each for a maximum of five years, are permitted.
  • A resolution on reappointment shall be taken at least one year before the end of the current term of office (see Section 84 AktG).
  1. The shareholders’ meeting shall elect the auditor (see Section 119 AktG, Section 318 Para. 1 HGB).

2.3 Preparation and conduct of the shareholders’ meeting

  1. The shareholders' meeting should be held at least once a year on the shareholders' own initiative or by convening it by the management, specifying the agenda. The agenda should specify the items to be discussed as precisely as possible. The shareholders should have sufficient opportunity to prepare for the discussions and votes.
  2. Minutes must be taken of the shareholders' meeting (see Section 130 AktG, Section 48 GmbHG). Resolutions passed by shareholders outside of the meeting must also be recorded (see Section 48 GmbHG).

2.4 Financing

  1. If the associated company cannot manage with its own resources, the Free State of Saxony will provide the necessary amount of state funds in accordance with the state budget approved by the Saxon State Parliament and subject to the applicable legislation and other regulations on budget implementation. The associated company will adhere to the principle of economic and thrifty use of resources in its economic management.

3. Management

3.1 Tasks and responsibilities

  1. The management manages the company under its own responsibility and is bound to the company's object and purpose.
  2. The management must exercise the care of a prudent businessman or a prudent and conscientious manager in the affairs of the company (see Section 43 GmbHG, Section 93 AktG). Individual power of attorney, individual commercial power of attorney or general power of attorney should only be granted in justified exceptional cases.
  3. The management should define clear and measurable operational objectives for the implementation of the company's purpose for the company's employees.
  4. The central element of corporate governance is the implementation of the important state interest within the meaning of Section 65 Paragraph 1 No. 1 of the SäHO. In doing so, management should also base its decisions on the financial and performance targets as well as the economic objectives of the sustainability strategy for the Free State of Saxony (see paragraph 94).
  5. The management is responsible for ensuring compliance with legal provisions and internal company guidelines and also works to ensure that the group companies observe these guidelines (compliance).
  6. For the responsibilities of management in the areas of risk management, risk controlling and internal auditing, see the provisions in paragraphs 98–101.
  7. If the management consists of several people, rules of procedure for the management, to be adopted by the shareholders' meeting or by the supervisory body in agreement with the shareholders' meeting, should regulate the allocation of responsibilities and cooperation within the management. The supervisory body can appoint a spokesperson for the management.
  8. The members of the management board are jointly responsible for the management of the company. They should inform each other about important events in their area of ​​responsibility.

3.2 compensation

  1. The remuneration of the members of the management board is agreed by the shareholders' meeting or the supervisory body at an appropriate level, taking into account any group remuneration. Both the total remuneration and the individual remuneration components must be appropriate and may not exceed the usual market remuneration without special reasons. Criteria for the appropriateness of the remuneration also include the tasks of the respective member of the management board (in particular: personnel responsibility, budget responsibility, distribution of business within the management board), their personal performance and the economic situation, success and future prospects of the company, taking into account its peer group.
  2. The total remuneration of the members of the Executive Board includes the monetary remuneration components, the pension commitment, other benefits, fringe benefits of any kind and benefits from third parties that were promised or granted in relation to the Executive Board activities during the financial year.
  3. The employment contracts of the members of the management should not provide for any dynamisation (e.g. collective wage development, consumer price index) of the agreed fixed remuneration.
  4. Variable components of remuneration should be laid down in a target agreement before the start of each financial year. Subsequent changes to the performance targets or comparison parameters should be excluded. Extraordinary developments should also be taken into account appropriately in cases where variable remuneration is calculated using mathematical formulas. To this end, it should be agreed that in these cases variable remuneration that deviates from the calculated result can be decided. If the supervisory body is responsible for the target agreement, this decision should not be passed on to a committee or to the chairman of the supervisory body for approval instead of the supervisory body.
  5. Objective criteria should be used as parameters for calculating variable remuneration. A portion of the variable remuneration, which should not exceed 25%, can also take into account so-called soft factors or be left to the discretion of the supervisory body.
  6. There should be no fixed lower limit for variable remuneration. Instead, an upper limit should be set in the employment contract for variable remuneration components and overall remuneration.
  7. The employment contract can contain provisions regarding payments and fringe benefits to members of the management in the event of early termination (including an upper limit on severance pay).

3.3 Conflicts of interest

  1. Members of the management are subject to a non-competition clause during their employment with the company (see Section 88 AktG); this may also be agreed upon after termination of employment, in accordance with their employment contract.
  2. Members of the management and employees may not request or accept gifts or other advantages from third parties for themselves or for other persons in connection with their activities, or grant unjustified advantages to third parties. This also includes gifts or other amenities that go beyond the usual business practice.
  3. No member of the management may pursue personal interests in his or her decisions or exploit business opportunities available to the company for his or her own benefit.
  4. Each member of the management must immediately disclose any conflicts of interest to the supervisory body and inform the other members of the management. In serious cases, the supervisory body must immediately inform the shareholders' meeting and communicate the results of its investigation.
  5. All transactions between the company on the one hand and the members of the management and persons closely associated with them or companies with personal ties to them on the other hand must comply with customary arm's length conditions. Significant transactions with the aforementioned persons require the approval of the supervisory body, unless the latter is already representing the company when concluding the transaction.
  6. Members of the management board should only undertake secondary activities, in particular mandates in supervisory bodies, with the consent of their own supervisory body, unless consent is already required or the appointment is made by the shareholders' meeting.
  7. The company should not grant loans to members of the management or their relatives due to the risk of conflicts of interest.

4 Supervisory body

4.1 Tasks and responsibilities

  1. The task of the supervisory body is to regularly advise and monitor the management in the management of the company. The members of the supervisory body are committed to the well-being of the respective company. The members of supervisory bodies elected or delegated at the instigation of the Free State of Saxony must also take the special interests of the Free State of Saxony into account in their activities (Section 65 Paragraph 4 SäHO).
  2. The subject of monitoring is the regularity, expediency and economic efficiency of management decisions. This includes in particular whether the company has acted within the scope of its statutory duties and has observed the relevant provisions. Monitoring should also include the establishment and effectiveness of the risk management system and internal auditing set up by management. The supervisory body should deal with the auditor's findings on the list of questions for the audit in accordance with Section 53 HGrG in a documented manner and discuss the consequences.
  3. The subject of the consultation is in particular the future projects and plans of the management. To this end, the supervisory body must inform itself about the intended business policy and other fundamental questions of corporate planning - in particular financial, investment and personnel planning - and obtain reports from the management (see also paragraphs 102 ff. and 97).
  4. Which monitoring measures are necessary and to what extent these must extend to the details of management depends on the circumstances of the individual company. In any case, the supervisory body must inform itself about the situation and development of the company and about the management of the business on the basis of the reports and documents of the managing body and the audit report of the auditor.
  5. The supervisory body of a parent company should also monitor whether the management properly exercises the participation rights in a subsidiary. To this end, efforts should be made to ensure that no transactions are carried out in the subsidiary without the consent of the supervisory body of the parent company, which in the parent company itself are subject to the consent of its supervisory body.
  6. To the extent that, contrary to the general rule in paragraph 18, the appointment of members of the management is assigned to the supervisory body, this decision shall not be submitted to a committee instead of the supervisory body for the purpose of deciding

In these cases, the supervisory body or – where permitted – a committee appointed by the supervisory body shall decide on the employment contract, in particular on the provisions governing remuneration and on the determination of variable remuneration.

  1. If the company does not have a supervisory body, the shareholders' meeting will perform the tasks of the supervisory body.

4.2 Composition

  1. The supervisory body should only include members who have the knowledge, skills and professional experience required to properly perform their duties and who are sufficiently independent and able to perform the duties of a member of the supervisory body in view of their professional demands. The supervisory body should have an appropriate number of independent members. A member of the supervisory body is considered independent within the meaning of this recommendation if he or she is independent of the company and its management and independent of a controlling shareholder.
  2. The Free State of Saxony aims to increase the number of women on supervisory boards and other supervisory bodies and will launch programs to promote young talent and management.
  3. The State Ministry of Finance (department responsible for central investment management) shall appoint at least one member to be sent or elected to the supervisory body.
  4. As a rule, the members of the supervisory body should not hold more than five mandates in supervisory bodies at the same time.
  5. A person who has a business or personal relationship with the company or its management that gives rise to a material and not merely temporary conflict of interest shall not be a member of a supervisory body.
  6. Members of a supervisory body should not hold any executive or advisory positions with any of the company's major competitors and should not have a personal relationship with a major competitor.
  7. No one should be a member of the supervisory body if they have been a member of the management board within the last two years. Former members of the management board should not chair the supervisory body or any of its committees.

4.3 How the supervisory body works

  1. Members of a supervisory body must exercise their mandate personally; they may not have their duties performed by others. Absent members may participate in the decision-making process of the supervisory body by submitting votes.
  2. Each member of a supervisory body shall ensure that he or she has sufficient time to carry out his or her mandate. If a member of a supervisory body has attended fewer than half of the meetings in a financial year, this should be noted in the supervisory body's report.
  3. The members of the supervisory board should undertake the training and further education measures required for their duties on their own responsibility. The Free State of Saxony gives the members of the supervisory bodies elected or delegated at the instigation of the Free State of Saxony the opportunity to regularly attend further education events that are useful for the performance of their duties (cf. Section 65 Paragraph 4 Sentence 3 SäHO).
  4. The chairman of the supervisory body coordinates the work of the supervisory body and represents the supervisory body's interests externally. He should maintain regular contact with the management and also discuss issues relating to the company's strategy, business development, risk management and compliance with them between meetings. At the same time, he should be informed immediately by the management of important events that are of key importance for assessing the situation and development as well as for the management of the company. (See also paragraphs 115 and 117.)
  5. The chairman is responsible for preparing the meetings of the supervisory body. He is supported by the management, which prepares the items to be discussed on the agenda in the form of explanations of the facts and proposed resolutions. The invitation, together with the agenda, proposed resolutions and explanatory documents, should be sent to the members of the supervisory body at least 10 working days before the meeting.
  6. Minutes are taken of the meeting of the supervisory body (see Section 107 AktG, Section 52 GmbHG). Resolutions of the supervisory body outside of a meeting should also be recorded. The chair of the supervisory body should present the draft minutes to the members of the supervisory body four weeks after the meeting or resolution.

4.4 compensation

  1. Remuneration (including expense allowances and attendance fees) for members of the supervisory body may be determined by resolution of the shareholders' meeting.
  2. The remuneration should then be in an appropriate proportion to the duties of the supervisory board members and the situation of the company (see Section 113 AktG).

4.5 Conflicts of interest

  1. Each member of the supervisory body is committed to the company's purpose and objectives. In making decisions, they may not pursue personal interests or exploit business opportunities available to the company for their own benefit.
  2. In connection with their activities, the members of a supervisory body may not request or accept any gifts or other advantages from third parties for themselves or for other persons, or grant unjustified advantages to third parties. This also includes gifts or other amenities that go beyond the usual business practice.
  3. Members of a supervisory body should not participate in the discussion and decision-making on an agenda item if it is assumed that they or persons close to them could gain a personal advantage from a decision to be taken by the supervisory body. This does not apply to internal body elections.
  4. Each member of a supervisory body must disclose to the supervisory body any conflicts of interest, in particular those that may arise as a result of providing advice or holding a function as a member of the supervisory body with customers, suppliers, creditors or other business partners.
  5. In its report to the shareholders' meeting, the supervisory body should report on any conflicts of interest that have arisen and how they have been dealt with. Significant conflicts of interest in the person of a member of the supervisory body should lead to the termination of the mandate.
  6. Consultancy and other service and work contracts between a member of the supervisory body and the company should not be concluded due to the risk of conflicts of interest.
  7. Loans from the company to members of the supervisory body and their relatives should not be granted due to the risk of conflicts of interest.

5 Cooperation between management and supervisory body

5.1 Principles

  1. Management and the supervisory body should work closely together for the benefit of the company. The basis for this is mutual trust, which is created in particular by observing the transparency, disclosure and confidentiality obligations set out in this code. Compliance with these is an essential duty towards the company and its bodies.
  2. The management should coordinate the strategic direction of the company with the supervisory body and discuss the status of strategy implementation with it at regular intervals. Reference is made to paragraph 92 ff. For the involvement of the central investment management, see paragraph 15, sentence 2.
  3. For transactions of fundamental importance, the articles of association should stipulate that the supervisory body must obtain approval. This includes decisions or measures that could lead to a significant change in the business activities within the scope of the articles of association or to a fundamental change in the company's assets, financial position, earnings or risk structure.
  4. The supervisory body's authority to determine additional approval requirements beyond those contained in the Articles of Association remains unaffected.
  5. The scope of transactions requiring approval must be determined in such a way that the personal responsibility of the management is guaranteed.
  6. The management should inform the supervisory body and the central investment management regularly, promptly and comprehensively about all issues relevant to the company relating to planning, business development, the risk situation, risk management and compliance, as well as about changes in the economic environment that are significant for the company. It should address any significant deviations in the course of business from the plans and objectives established, stating the reasons.
  7. The management must immediately inform the chairman of the supervisory body of important events that are of material importance for assessing the situation and development as well as for the management of the company. The chairman of the supervisory body must then inform the supervisory body and, if necessary, convene an extraordinary meeting of the supervisory body.
  8. The content, form and frequency of reporting obligations should also be based on Section 90 of the German Stock Corporation Act (AktG) for companies that are not managed in the legal form of a stock corporation.
  9. In addition, the supervisory body and the central investment management should be informed promptly if unavoidable, success-threatening and significant additional expenses or reduced income are to be expected (ad hoc risk reports).
  10. The supervisory body should work towards timely and proper reporting. It can request additional information from management at any time.

5.2 Confidentiality

  1. Good corporate governance requires open discussion between management and the supervisory body, as well as within these bodies. Full confidentiality is of crucial importance for this.
  2. All members of the board of directors must ensure that third parties they engage observe confidentiality in the same way (see Sections 116, 394, 395 AktG, Section 52 GmbHG).
  3. If necessary, the supervisory body should meet without the management.

5.3 Responsibility

  1. The management and supervisory body observe the rules of proper, good and responsible corporate governance.
  2. If they negligently violate the duty of care of a prudent and conscientious member of the management or member of a supervisory body, they are liable to the company for compensation for the resulting damage in accordance with the statutory provisions (see, among others, Sections 93, 116 AktG, Sections 43, 52 GmbHG). In the case of business decisions, there is no breach of duty if the member of the management or supervisory body could reasonably assume that they were acting for the benefit of the company on the basis of appropriate information (see Section 93 AktG).
  3. A liability insurance policy for financial loss can be taken out for the members of the management and supervisory body (D&O insurance) of the company. If D&O insurance is taken out, an appropriate deductible should be agreed. For the members of the management, this should be at least 10 percent of the damage up to a maximum of one and a half times the fixed annual remuneration.

6 Important government interest, corporate strategy

  1. The Free State pursues a strategy for investment management that secures the corporate goals according to Section 65 SäHO and takes economic, social and ecological factors into account. As part of Saxony's investment policy, the Free State of Saxony sets key objectives and formulates specific strategic objectives within the framework of policy areas. The important state interest within the meaning of Section 65 Paragraph 1 No. 1 SäHO includes an assignment of specific key objectives for each investment company and a concretization of the relevant policy areas through specific strategic objectives. The central investment management regularly develops these strategic objectives with the respective departments. The company's corporate objects take up the strategic objectives.
  2. The management develops the strategic direction of the company on the basis of these owner objectives (important state interest, paragraph 91), coordinates it with the supervisory body and ensures its implementation. The strategic direction should be adjusted in the event of significant changes and updated regularly. For the involvement of the central investment management, see paragraph 15, sentence 2.
  3. As part of strategy implementation, specific measures are usually developed to achieve the strategic goals. The strategic goals are further specified, ranked and linked to medium-term planning. Strategic control includes the follow-up of the measures implemented. Premises, progress and results are regularly monitored. The strategy process should be linked to suitable financial and performance targets (key performance indicators). This can also be the subject of target agreements with management; reference is made to paragraphs 35 to 37.
  4. The central element of corporate governance is the implementation of the important state interest within the meaning of Section 65 Paragraph 1 No. 1 of the SäHO. In doing so, the company's bodies should also base their decisions on the financial and performance targets of paragraph 93 as well as the economic targets of the sustainability strategy for the Free State of Saxony.
  5. In addition, in appropriate cases, portfolio companies can develop a company-specific sustainability strategy.

7 Budget, business plan, risk management, controlling, internal audit

7.1 Budget preparation and implementation

  1. If companies receive state funds, they are expected to provide extensive support to the central investment administration in financial planning, budget planning, budget implementation and accounting of the Free State of Saxony.

7.2 Business plan

  1. The management must prepare a draft business plan (consisting of a profit, investment, finance and staffing plan) for the coming financial year in accordance with a template provided by the State Ministry of Finance and submit it together with the medium-term financial planning (see paragraph 103) and the draft resolution to the central investment administration in good time before the start of the financial year, but no later than six weeks before the meeting of the supervisory body at which it will discuss the business plan.

7.3 Risk management and controlling, internal audit in the associated companies

  1. The management ensures appropriate risk management and risk control and – where necessary – an effective internal audit/control system in the company. Combating corruption is part of risk management/control; the administrative regulations of the Saxon state government for the preventive and repressive fight against corruption in the state administration of the Free State of Saxony in the currently valid version (currently VwV Anti-Corruption of December 11, 2015) should be applied in the associated companies.
  2. In larger companies, parent companies and groups, management should commission internal audits to support them. Internal auditing should report directly to management or the top management. Audit orders should be issued in writing. They should cover accounting and finance, compliance with regulations that are important for the company, management instructions and guidelines, and the economic efficiency of ongoing business and measures. This includes the evaluation of the reports of the subsidiary's internal audit and the audit reports of all group companies.
  3. If there is any doubt as to whether a company needs to set up an internal audit function or whether the internal audits meet the requirements, management should obtain an opinion from the auditor.
  4. The internal audit should report to the management and submit a written report to the supervisory body at regular intervals. The internal audit should participate in the supervisory body's deliberations on the report. If the management itself is affected, the internal audit should report directly to the supervisory body.

7.4 Investment management by the central investment administration

  1. The aim of investment management by the central investment administration in the State Ministry of Finance is to support management in achieving the company's goals and thus the overarching objectives of the Free State of Saxony. The uniform planning and reporting system serves this purpose.
  2. The management should prepare a medium-term financial plan (consisting of a simplified profit plan, and if necessary also an investment and financial plan) for the following three to five financial years and present it to the supervisory body and/or the shareholders' meeting at the same time as the draft business plan.
  3. The quarterly data and reports based on the company planning should be sent to the central investment administration by the 10th working day of the month following the end of the quarter and the data from the annual financial statements should be sent to the central investment administration by the 10th working day after preparation, using a template provided by the State Ministry of Finance. A target/actual analysis is carried out there. Positive and negative deviations from the target figures require deviation analyses; depending on the situation, countermeasures follow. The aim is to identify positive and negative deviations from the plan at an early stage and to estimate their consequences for the investment itself and for the Free State of Saxony as a shareholder.
  4. The central investment management will enable companies to view and enter data in the investment controlling program in electronic form.
  5. The companies should provide the central investment administration with the documents to be sent to the Saxon Court of Auditors (cf. Section 69, Section 102 Para. 1 No. 3, Section 112 SäHO), with the exception of the remuneration report, in electronic form.

8 Accounting and auditing

8.1 Accounting

  1. Unless otherwise provided by law, the annual financial statements and management report or the consolidated financial statements and consolidated management report must be prepared in accordance with the Third Book of the German Commercial Code for large corporations and audited in accordance with these provisions (see Section 65 of the German Commercial Code). The notes to the annual financial statements should explain relationships with shareholders who are to be qualified as related parties within the meaning of the applicable accounting regulations. Investment companies that are permanently financed by third parties on the capital or credit market should disclose climate-related risks in their management report, if they are required to publish it.
  2. The accounting system must at all times reflect a true and fair view of the assets, financial position and earnings. In addition, the accounting system should enable business planning and control of profitability and, to this end, establish cost and performance accounting that is appropriate and suitable for the size of the company.
  3. The annual financial statements or the consolidated financial statements and the management report or the consolidated management report are prepared by the management (see also paragraph 17) and audited by the auditor and the supervisory body (see Section 171 AktG, Section 42a GmbHG, Section 65 SäHO).
  4. The supervisory body shall report the results of its audit to the shareholders’ meeting in writing.
  5. Companies that meet the requirements of Section 289b Paragraph 1 Nos. 1 and 3 of the German Commercial Code (HGB) should submit a non-financial statement or a separate non-financial report within the meaning of Section 289c of the German Commercial Code (HGB). This applies accordingly to a parent company within the meaning of Section 290 of the German Commercial Code (HGB), provided that it only meets the requirements of Section 289b Paragraph 1 No. 3 of the German Commercial Code (HGB) together with subsidiaries.

8.2 Final examination

  1. The auditor supports the supervisory body in monitoring the management, in particular in auditing the financial statements and monitoring the accounting-related control and risk management systems. The auditor's report provides information on the correctness of the financial statements.
  2. Before electing the auditor or submitting the nomination to the shareholders' meeting, the supervisory body should justify its nomination (selection note). The supervisory body should also obtain a declaration from the proposed auditor as to whether and, if so, which business, financial, personal or other relationships exist between the auditor, its bodies and the members of the audit team appointed to carry out the audit on the one hand and the company and its body members on the other hand that could give rise to doubts about the auditor's independence. The declaration should also cover the extent to which other services were provided for the company in the previous financial year, particularly in the consulting sector, or have been agreed for the following year. The declaration should be included in the company files.
  3. The supervisory body should regularly assess the quality of the audit.
  4. Where provided for, the supervisory body, represented by its chairman, issues the audit mandate to the auditor and agrees the fee with him. The audit mandate also includes whether the management has reported on corporate governance (para. 14). If the shareholders make use of their rights under Section 53 HGrG, the audit mandate must be expanded accordingly. The mandate should also include the preparation of a report every four years on the salaries of the members of the management and the company's senior employees, as well as the salaries of the members of the supervisory body, optionally also the salaries of non-payscale employees. Contracts between the management and the auditor for additional consulting or other services should only be concluded with the consent of the supervisory body; in urgent cases, the management should inform the chairman of the supervisory body immediately.
  5. After the audit of five consecutive annual financial statements of a company, there should be a change of auditor (change of audit firm, “external rotation”).
  6. The supervisory body should agree with the auditor that the chairman of the supervisory body will be informed immediately of any possible grounds for exclusion or bias that arise during the audit, even if these are eliminated immediately.
  7. The supervisory body should agree that the auditor immediately reports all findings and events that are material to the supervisory body's duties and that arise during the audit. The supervisory body should agree that the auditor informs it or notes in the audit report if, during the audit, it becomes aware of facts that indicate that the statement made by the management or supervisory body on the Public Corporate Governance Code of the Free State of Saxony is inaccurate.
  8. In the case of companies without a supervisory body, their legal representatives should agree on the relevant reporting and information obligations with the auditor. These reports and information should also be presented to the shareholders' meeting.
  9. The auditor should participate in the deliberations of the supervisory body or the relevant committee of the supervisory body regarding the annual or consolidated financial statements and report on the main results of the audit (see Section 171 Paragraph 1 Sentence 2 AktG).
  10. The company's bodies should commission management letters in appropriate cases. A reference to a management letter must be made in the audit report or in the draft resolution on the audit report.

9 Transparency, Participation Report

  1. The state parliament is informed primarily through the company's annual financial statements and management report or consolidated financial statements and consolidated management report and through the shareholding report. This also applies to the public within the framework of statutory disclosure requirements.
  2. Information published by the company that concerns the company should also be accessible via its website. The documents and information that must be submitted and published in the electronic Federal Gazette within twelve months in accordance with Section 325 of the German Commercial Code (HGB), in particular the approved annual financial statements and the management report, should also be accessible promptly on the company's website.
  3. Irrespective of this, in addition to essential recurring information about the company, important current information during the year should also be made available to the public via the Internet. The most important events can be presented in an annual overview, for example as part of ongoing public relations work.
  4. Excluded from publication are trade and business secrets and confidential information, in particular information relating to the company's competitiveness, as well as personal data.
  5. The Corporate Governance Report pursuant to paragraph 14 must be made publicly available on the company’s website for at least five years.
  6. The state government informs the state parliament and the public once a year by submitting an investment report prepared by the central investment administration about the companies in the legal form of private law in which the Free State of Saxony has an interest. The information also extends to legal entities under public law that are assigned to the area of ​​responsibility of the State Ministry of Finance according to the state government's decision on the delimitation of the business areas of the state ministries.
  1. The investment report presents the investments of the Free State of Saxony in a short and clear form with their key company figures, shows the corporate relationships of the companies and names the members of the bodies. The report includes in particular the company data submitted to the Federal Gazette for publication. In addition, statements are made on the development prospects of the companies and the strategic interest in the companies is presented. For investment companies of the Free State of Saxony to which this code does not apply, an abbreviated presentation is possible. The investment report also includes, on the basis of the corresponding consent of the persons concerned, a presentation of the annual remuneration and fringe benefits for the management and their associated personal data.

10 Other provisions

  1. The Public Corporate Governance Code of the Free State of Saxony is regularly reviewed by the State Ministry of Finance for new developments and adapted if necessary.
  2. The Public Corporate Governance Code of the Free State of Saxony should be applied in companies starting with the first financial year after its enactment. The companies should submit the Corporate Governance Report for the first time for this financial year.

Corporate Governance Report of Sächsische Staatsbäder GmbH for the 2023 financial year  

1. Declaration of conformity  

The recommendations of the PCGK of the Free State of Saxony dated April 12, 2022 were observed with the following exceptions:  

1.1 The recommendation that the shareholders' meeting decide on the approval of the annual financial statements and the appropriation of profits for the previous financial year within the first eight months of the financial year was not complied with. The reasons were the change of processor and the temporary vacancy of the post in 2023.   

1.2 The recommendation that the shareholders' meeting decide within the first eight months of the financial year on the discharge of the management and supervisory body of the previous financial year was not complied with. The reasons were the change of processor and the temporary vacancy of the post in 2023.   

1.3 The recommendation not to grant individual power of attorney or to grant it only in justified exceptional cases was not complied with. In 2023, one of two authorized signatories retired and her power of attorney was revoked. The authorized signatory currently has individual power of attorney in order to safeguard the company's business activities in the event of the unexpected unavailability of the managing director.  

2. Proportion of women in management positions and supervisory bodies  

The proportion of women in management positions is around 65%. The proportion of women on the supervisory board is around 16%. 

3. Presentation of annual remuneration and fringe benefits for the management 

The managing director, Mr Böhmer, has not consented to the disclosure of his annual remuneration and fringe benefits.