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  • Declaration of Conformity of
    HORNBACH Holding AG & Co. KGaA

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    Declaration of Conformity with the German Corporate Governance Code pursuant to § 161 of the German Stock Corporation Act (AktG)

    The general partner (HORNBACH Management AG, acting via its Board of Management) and the Supervisory Board of HORNBACH Holding AG & Co. KGaA hereby declare pursuant to § 161 of the German Stock Corporation Act (AktG):

    I. Preliminary remarks

    The German Corporate Governance Code (the “Code”) is tailored to companies with the legal form of a stock corporation (“AG”) or a European Company (“SE”) and does not account for the special circumstances of partnerships limited by shares (“KGaA”). Many of the recommendations made in the Code can only be applied in modified form to HORNBACH Holding AG & Co. KGaA. The following factors in particular require consideration:

    1. Management

    Many of the Code recommendations refer to the Board of Management. Unlike an AG, however, the KGaA does not have a Board of Management. At a KGaA, the tasks incumbent on the Board of Management are performed by the general partner, in this case HORNBACH Management AG.

    2. Supervisory Board

    The Code recommendations concerning the Supervisory Board also do not account for the legal form of a KGaA, where the rights and obligations of the Supervisory Board differ from those at an AG. Specifically, the Supervisory Board of a KGaA does not have any personnel competence in respect of any Board of Management at the general partner and also cannot obligate the latter in terms of the company’s management by laying down transactions subject to approval requirements.

    3. Annual General Meeting

    The Annual General Meeting of a KGaA basically has the same rights as that at an AG; it addi-tionally passes resolution on the adoption of the company’s annual financial statements. Unlike at an AG, several of the resolutions adopted by the Annual General Meeting require the approval of the general partner. These include the adoption of the company’s annual financial statements.

    II. Future-related section

    The company will basically comply in future with the recommendations of the Code in the version dated February 7, 2017 and published in the Federal Official Gazette on April 24, 2017 with the exception of the deviations listed below:

    No application will be made of the recommendations in Points 3.4 (1) Sentence 3, 3.8 (3), 4.1.3 Sentence 2, 4.1.5 Sentence 1, 4.2, 4.3, 5.1.2, 5.2 (3), and 5.3.2 (3) Sentence 3.

    These deviations from the recommendations are due to the following considerations:

    a) Point 3.4 (1) Sentence 3::

    The KGaA does not have a Board of Management. By resolution dated October 9, 2015, the Supervisory Board laid down the general partner’s disclosure obligations in a Code of Procedure.

    b) Point 3.8 (3):

    In Point 3.8 (3), the Code recommends agreeing a specified deductible in any D&O insurance policy taken out for the Supervisory Board. No such deductible has been agreed at the expense of Supervisory Board members. This would reduce the attractiveness of Supervisory Board activities, and thus also the company’s chances in the competition to attract qualified candidates. The recommendation made in Point 3.8 (3) is therefore not followed.

    c) Point 4.1.3 Sentence 2:

    According to Point 4.1.3 Sentence 2, the Board of Management should institute appropriate measures reflecting the company’s risk situation (compliance management system) and disclose the main features of those measures. The KGaA does not have a Board of Management. Irrespective of this, the company has a compliance management system and discloses its main features.

    d) Point 4.1.5 Sentence 1:

    According to Point 4.1.5 Sentence 1, when appointing the company’s executives the Board of Management should consider the principle of diversity and in particular endeavor to achieve the appropriate consideration of women for such positions. The KGaA does not have a Board of Management.

    e) Point 4.2:

    In Point 4.2, the Code makes several recommendations concerning the composition and compensation of the Board of Management. The KGaA does not have a Board of Management. The Supervisory Board of HORNBACH Holding AG & Co. KGaA has no responsibility for appointing and dismissing the members of the Board of Management at HORNBACH Management AG or for specifying their contractual terms and conditions.

    f) Point 4.3:

    In Point 4.3, the Code makes several recommendations concerning the treatment of conflicts of interest on the part of members of the Board of Management. The KGaA does not have a Board of Management. Conflicts of interest on the part of members of the Board of Management of the general partner, transactions with persons and enterprises closely related to such and any sideline activities are dealt with by the general partner. Pursuant to § 8 (1) Sentence 2 of the Articles of Association, however, the Supervisory Board represents the company in its dealings with the general partner in respect of all transactions.

    g) Point 5.1.2:

    The KGaA does not have a Board of Management. The Supervisory Board of a KGaA does not have any personnel competence in respect of the Board of Management of the general partner.

    h) Point 5.2 (3):

    The KGaA does not have a Board of Management. Within the framework of the amended responsibilities of the Supervisory Board, the Supervisory Board chairman will nevertheless maintain contact with the general partner, inform the Supervisory Board and also con-vene extraordinary meetings for this purpose where appropriate.

    i) Point 5.3.2 (3) Sentence 3:

    In Point 5.3.2 (3) Sentence 3, the Code recommends that the supervisory board chairman should not simultaneously chair the audit committee. Given the expertise and industry experience of the Chairman and the fact that he also holds the same position in the Audit Committee of HORNBACH Baumarkt AG, we deviate from this recommendation.

    III. Past-related section

    1. Period since submission of previous Declaration of Conformity in December 2016 through to publication of new version of Code on April 24, 2017

    The recommendations of the “German Corporate Governance Code” in the version dated May 5, 2015 and published in the Federal Official Gazette on June 12, 2015 were basically complied with in the period since the submission of the previous Declaration of Conformity dated December 2016 through to publication of the new version of the Code on April 24, 2017 with the exception of the deviations listed below.

    No application was made of the following recommendations included in the old version: Points 3.4 (1) Sentence 3, 3.8 (3), 4.1.5 Sentence 1, 4.2, 4.3, 5.1.2, 5.2 (2), 5.2 (3), 5.4.1 (2) and (3), and 5.4.6 (3) Sentence 1.

    These deviations from the recommendations were due to the following considerations:

    a) Point 3.4 (1) Sentence 3 old version:

    The KGaA does not have a Board of Management. By resolution dated October 9, 2015, the Supervisory Board laid down the general partner’s disclosure obligations in a Code of Procedure.

    b) Point 3.8 (3) old version:

    In Point 3.8 (3), the previous version of the Code recommended agreeing a specified deductible in any D&O insurance policy taken out for the Supervisory Board. No such deductible was agreed at the expense of Supervisory Board members. This would reduce the attractiveness of Supervisory Board activities, and thus also the company’s chances in the competition to attract qualified candidates. The recommendation made in Point 3.8 (3) of the old version was therefore not followed.

    c) Point 4.2 old version:

    In Point 4.2, the previous version of the Code made several recommendations concerning the composition and compensation of the Board of Management. The KGaA does not have a Board of Management. The Supervisory Board of HORNBACH Holding AG & Co. KGaA has no responsibility for appointing and dismissing the members of the Board of Management at HORNBACH Management AG or for specifying their contractual terms and conditions.

    d) Point 4.3 old version:

    In Point 4.3, the previous version of the Code made several recommendations concerning the treatment of conflicts of interest on the part of members of the Board of Management. The KGaA does not have a Board of Management. Conflicts of interest on the part of members of the Board of Management of the general partner, transactions with persons and enterprises closely related to such and any sideline activities are dealt with by the general partner. Pursuant to § 8 (1) Sentence 2 of the Articles of Association, however, the Supervisory Board represents the company in its dealings with the general partner in respect of all transactions.

    e) Point 5.1.2 old version:

    The KGaA does not have a Board of Management. The Supervisory Board of a KGaA does not have any personnel competence in respect of the Board of Management of the general partner.

    f) Point 5.2 (2) old version:

    In Point 5.2 (2), the previous version of the Code recommended that the supervisory board chairman should not simultaneously chair the audit committee. Given the expertise and industry experience of the Chairman and the fact that he also held the same position in the Audit Committee of HORNBACH Baumarkt AG, we deviated from this recommendation.

    g) Point 5.2 (3) old version:

    The KGaA does not have a Board of Management. Within the framework of the amended responsibilities of the Supervisory Board, the Supervisory Board chairman nevertheless maintained contact with the general partner and informed the Supervi-sory Board [and also convened extraordinary meetings for this purpose where ap-propriate].

    h) Point 5.4.1 (2) and (3) old version and Point 4.1.5 Sentence 1 old version:

    According to Point 5.4.1 (2) and (3) of the previous version of the Code, the supervisory board should specify concrete objectives regarding its composition that should be taken into account in the recommendations made by the supervisory board to the competent election bodies and published in the corporate governance report. Furthermore, the supervisory board should specify a regular limit for the length of membership of the supervisory board. Overall, the company deviated from the recommendations made in Point 5.4.1 (2) and (3). In terms of the composition of its Supervisory Board, HORNBACH Holding AG & Co. KGaA accorded priority above all to the knowledge, ability and expert experience of the individual in question. The same criteria applied when the general partner selected candidates for management positions at the company (consistent with Point 4.1.5 Sentence 1 of the previous version of the Code).

    i) Point 5.4.6 (3) Sentence 1 old version:

    In Point 5.4.6 (3) Sentence 1, the previous version of the Code recommended that the compensation of supervisory board members be reported in the notes to the financial statements or the management report on an individual basis and broken down into its constituent components. Given that the amount of compensation paid to the Supervisory Board is governed by the Articles of Association, we saw no need to disclose individual compensation packages. In response to suggestions received from shareholders, however, account was taken of this recommendation starting with the reporting on the 2016/2017 financial year. The 2016/2017 Annual Report was published on May 29, 2017.

    2. Period since publication of new version of Code on April 24, 2017

    The recommendations of the “German Corporate Governance Code” in the version dated February 7, 2017 and published in the Federal Official Gazette on April 24, 2017 were basically complied with apart from the deviations already listed and substantiated for the future in Section II

    Furthermore, the company also did not comply with the recommendations in Point 5.4.1 (2) to (4). Overall, the company deviated from these recommendations. In terms of the composition of its Supervisory Board, HORNBACH Baumarkt AG accorded priority above all to the knowledge, ability and expert experience of the individual in question.

    Neustadt an der Weinstrasse, December 2017

    HORNBACH Holding AG & Co. KGaA

    The Supervisory Board of HORNBACH Holding AG & Co. KGaA

    The Board of Management of HORNBACH Management AG

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    Archive Statements of Compliance

    2016 PDF (104.53 kB)
    2015 PDF (174.02 kB)
    2014 PDF (33.02 kB)
    2013 PDF (26.26 kB)
    2012 (2) PDF (24.31 kB)
    2012 (1) PDF (101.17 kB)
    2011 PDF (24.63 kB)
    2010 PDF (25.60 kB)
    2009 (2) PDF (23.78 kB)
    2009 (1) PDF (21.92 kB)
    2008 PDF (107.50 kB)
    2007 PDF (25.56 kB)
    2006 PDF (22.90 kB)
    2005 PDF (46.27 kB)
    2004 PDF (22.52 kB)
    2003 PDF (23.67 kB)
    2002 PDF (11.38 kB)
  • Declaration of Conformity of
    HORNBACH Baumarkt AG

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    Declaration of Conformity with the German Corporate Governance Code pursuant to § 161 of the German Stock Corporation Act (AktG)

    The Board of Management and Supervisory Board of HORNBACH Baumarkt AG hereby declare pursuant to § 161 of the German Stock Corporation Act (AktG):

    I. Future-related section

    The recommendations of the “German Corporate Governance Code” in the version dated February 7, 2017 and published in the Federal Official Gazette on April 24, 2017 will basically be complied with in future. No application will be made of the recommendations in Points 3.8 (3), 4.2.3 (2) Sentence 3, 4.2.5 (3), 5.4.2 Sentence 3, and 5.4.6 (3) Sentence 1.

    These deviations from the recommendations are due to the following considerations:

    a) Point 3.8 (3):

    In Point 3.8 (3), the Code recommends agreeing a specified deductible in any D&O insurance policy taken out for supervisory board members. No such deductible has been agreed at the expense of Supervisory Board members. This would reduce the attractiveness of Supervisory Board activities, and thus also the company’s chances in the competition to attract qualified candidates. Furthermore, it would also improperly apply to employee representatives. The recommendation made in Point 3.8 (3) is therefore not followed.

    b) Point 4.2.3 (2) Sentence 3:

    According to Point 4.2.3 (2) Sentence 3, variable components of management board compensation should generally have a multiple-year assessment basis that essentially has forward-looking characteristics. The employment contracts currently in place deviate from this new Code recommendation. The adjustments to the employment contracts with members of the Board of Management required to comply with this recommendation at a later point in time are nevertheless in preparation.

    c) Point 4.2.5 (3):

    The compensation paid to the Board of Management is not presented separately for each member. The Annual General Meeting held on July 7, 2016 resolved to uphold the more guarded approach towards reporting management board compensation. For the same reason, no use is made of the “model tables” included in the “German Corporate Governance Code”.

    d) Point 5.4.2 Sentence 3:

    In Point 5.4.2 Sentence 3, the Code recommends that the supervisory board should not include more than two former management board members. This is intended to ensure the autonomy of the supervisory board in its advising and monitoring of the management board. However, the Code does not stipulate any number of years for which a former member of the management board is impaired in this respect following his departure from the management board. As a matter of precaution, the company therefore declares that it deviates from the recommendation made in Point 5.4.2 Sentence 3, even though Dr. Wolfgang Rupf, Albrecht Hornbach and Martin Hornbach retired from their positions on the Board of Management of HORNBACH Baumarkt AG on October 31, 1996, October 31, 2001 and December 31, 2001 respectively.

    e) Point 5.4.6 (3) Sentence 1:

    In Point 5.4.6 (3) Sentence 1, the Code recommends that the compensation of supervisory board members be reported in the notes to the financial statements or the management report on an individual basis and broken down into its constituent components. Given that the amount of compensation paid to the Supervisory Board is governed by the Articles of Association, we see no need to disclose individual compensation packages.

    II. Past-related section

    1. Period since submission of previous Declaration of Conformity in December 2016 through to publication of new version of Code on April 24, 2017

    The recommendations of the “German Corporate Governance Code” in the version dated May 5, 2015 and published in the Federal Official Gazette on June 12, 2015 were basically complied with in the period since the submission of the previous Declaration of Conformity dated December 2016 through to publication of the new version of the Code on April 24, 2017 with the exception of the deviations listed below.

    No application was made of the following recommendations included in the old version: Points 3.8 (3), 4.1.5 Sentence 1, 4.2.3 (4) and (5), 4.2.5 (3), 4.3.3 Sentence 4, 5.3.3, 5.4.1 (2) and (3), 5.4.2 Sentence 3, and 5.4.6 (3) Sentence 1.

    These deviations from the recommendations were due to the following considerations:

    a) Point 3.8 (3) old version:

    In Point 3.8 (3), the previous version of the Code recommended agreeing a specified deductible in any D&O insurance policy taken out for supervisory board members. No such deductible was agreed at the expense of Supervisory Board members. This would reduce the attractiveness of Supervisory Board activities, and thus also the company’s chances in the competition to attract qualified candidates. Furthermore, it would also improperly apply to employee representatives. The recommendation made in Point 3.8 (3) of the old version was therefore not followed.

    b) Point 4.2.3 (4) and (5) old version:

    Furthermore, no application was made of the recommendations made in the previous versions of Point 4.2.3 (4) (“severance payment cap”) and (5) (“change of control compensation cap”) of the Code. These deviations were due to competition-related factors.

    c) Point 4.2.5 (3) old version:

    The compensation paid to the Board of Management was not presented separately for each member. The Annual General Meeting held on July 7, 2016 resolved to uphold the more guarded approach towards reporting management board compensation. For the same reason, no use was made of the “model tables” included in the “German Corporate Governance Code”.

    d) Point 4.3.3 Sentence 4 old version:

    As a matter of precaution, the previous Declaration of Conformity included a deviation to the former version of Point 4.3.3. Due to application of the accounting standard IAS 24, however, the company had already ensured transparency concerning such transactions for many years.

    e) Point 5.3.3 old version:

    In Point 5.3.3, the previous version of the Code recommended that the supervisory board should form a nomination committee composed exclusively of shareholder representatives which should propose suitable candidates to the supervisory board for its election proposals to the Annual General Meeting. The company’s Supervisory Board had not formed such a committee. Based on our previous experience, the establishment of such a committee did not appear to be necessary.

    f) Point 5.4.1 (2) and (3) old version and Point 4.1.5 Sentence 1 old version:

    Overall, the company deviated from the recommendations made in the previous versions of Point 5.4.1 (2) and (3). In the interests of the company, in terms of the composition of its Board of Management and Supervisory Board, HORNBACH Baumarkt AG accorded priority above all to the knowledge, ability and expert experience of the individual in question. The same applied when the Board of Management selected candidates for management positions at the company (Point 4.1.5 Sentence 1 old version).

    g) Point 5.4.2 Sentence 3 old version:

    In Point 5.4.2 Sentence 3, the previous version of the Code recommended that the supervisory board should not include more than two former management board members. This was intended to ensure the autonomy of the supervisory board in its advising and monitoring of the management board. However, the Code did not stipulate any number of years for which a former member of the management board was impaired in this respect following his departure from the management board. As a matter of precaution, the company therefore declared that it deviated from the recommendation made in Point 5.4.2 Sentence 3, even though Dr. Wolfgang Rupf, Albrecht Hornbach and Martin Hornbach retired from their positions on the Board of Management of HORNBACH Baumarkt AG on October 31, 1996, October 31, 2001 and December 31, 2001 respectively.

    h) Point 5.4.6 (3) Sentence 1 old version:

    In Point 5.4.6 (3) Sentence 1, the previous version of the Code recommended that the compensation of supervisory board members be reported in the notes to the financial statements or the management report on an individual basis and broken down into its constituent components. Given that the amount of compensation paid to the Supervisory Board is governed by the Articles of Association, we saw no need to disclose individual compensation packages.

    2. Period since publication of new version of Code on April 24, 2017

    The recommendations of the “German Corporate Governance Code” in the version dated February 7, 2017 and published in the Federal Official Gazette on April 24, 2017 were basically complied with apart from the deviations already listed and substantiated for the future in Section I.

    Furthermore, the company also did not comply with the recommendations included in Point 4.1.5 Sentence 1, 4.2.3 (4) and (5), 4.3.3 Sentence 4, 5.3.3, and 5.4.1 (2) to (4).

    These deviations from the recommendations were due to the following considerations:

    a) Point 4.2.3 (4) and (5):

    No application was made of the recommendations in Point 4.2.3 (4) (“severance payment cap”) and (5) (“change of control compensation cap”) of the Code. These deviations were due to competition-related factors.

    b) Point 4.3.3 Sentence 4:

    As a matter of precaution, a deviation from the unchanged recommendation in Point 4.3.3 Sentence 4 was declared in the previous Declaration of Conformity. Due to application of the accounting standard IAS 24, however, the company had already ensured transparency concerning such transactions for many years.

    c) Point 5.3.3:

    In Point 5.3.3, the Code recommended that the supervisory board should form a nomination committee composed exclusively of shareholder representatives which should propose suitable candidates to the supervisory board for its election proposals to the Annual General Meeting. The company’s Supervisory Board had not formed such a committee. Based on our previous experience, the establishment of such a committee did not appear to be necessary.

    d) 5.4.1 (2) to (4) and Point 4.1.5 Sentence 1:

    Overall, the company deviated from the recommendations made in Point 5.4.1 (2) to (4). In the interests of the company, in terms of the composition of its Board of Management and Supervisory Board, HORNBACH Baumarkt AG accorded priority above all to the knowledge, ability and expert experience of the individual in question. The same applied when the Board of Management selected candidates for management positions at the company (Point 4.1.5 Sentence 1).

    Bornheim bei Landau, December 2017

    HORNBACH Baumarkt AG

    Supervisory Board

    Board of Management

    --

    Archive Statements of Compliance

    2016 PDF (103.55 kB)
    2015 PDF (107.19 kB)
    2014 PDF (42.78 kB)
    2013 PDF (33.06 kB)
    2012 (2) PDF (30.44 kB)
    2012 (1) PDF (112.83 kB)
    2011 PDF (32.25 kB)
    2010 PDF (33.79 kB)
    2009 (2) PDF (31.24 kB)
    2009 (1) PDF (28.38 kB)
    2008 PDF (187.04 kB)
    2007 PDF (31.73 kB)
    2006 PDF (95.41 kB)
    2005 PDF (97.32 kB)
    2004 PDF (26.02 kB)
    2003 PDF (31.28 kB)
    2002 PDF (12.55 kB)

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