Investor Relations

KROMI is subject to the dual management system prescribed by German stock corporation law.

The Managing Board of KROMI Logistik AG is solely responsible for managing the company with the aim of generating sustainable added value. The principle of overall responsibility applies. In other words, the members of the Managing Board are jointly responsible for managing the entire company. They develop the corporate strategy in consultation with the Supervisory Board, and ensure its implementation. The principles guiding the joint work of KROMI’s Managing and Supervisory boards are set out in the rules of business procedure.

The Managing Board consists of two members: The CEO and Chairman of the Managing Board who is responsible for the Sales and Technology departments, and the CFO who heads the Finance, IT and Human Resources departments. The Managing Board members work closely together irrespective of their individual areas of responsibility. In accordance with the rules of business procedure, the members of the Managing Board keep each other informed on an ongoing basis about all significant events in their business segment. Managing Board resolutions are passed by mutual agreement as a matter of principle. If an amicable agreement cannot be reached, the matter is submitted to the Supervisory Board for examination. The Chair of the Managing Board (CEO) is responsible for the coordination of all business areas of the Managing Board, working to ensure that the management of all business areas is uniformly aligned with the goals set by the resolutions of the Managing Board.

The Managing Board provides the Supervisory Board with regular, up-to-the-minute and comprehensive information on all of the key aspects of business growth for the KROMI Group, key transactions and the current earnings situation, including the risk position, risk management and compliance. Differences between the course of business and previous forecasts and objectives are discussed in detail, and the related reasons are provided. The Managing Board participates in all Supervisory Board meetings unless the Supervisory Board identifies a need to convene alone in compliance with the German Corporate Governance Code. The Managing Board reports in writing and verbally on the individual agenda items and proposed resolutions, and answers questions from the individual members of the Supervisory Board.

In the case of transactions of fundamental importance, in particular for the company’s financial position and results of operations, the rules of business procedure require approval by the Supervisory Board. The same applies to a specific list of transactions that must be approved.

The Supervisory Board advises the Managing Board in the management of the company, and monitors its activities. It appoints and dismisses members of the Managing Board, approves the remuneration system for members of the Managing Board, and defines the respective total remuneration. It is involved in all transactions of funda- mental importance. In line with the number of the company’s employees and its articles of incorporation, the Supervisory Board at present comprises five members elected by the company’s shareholders.

The principles guiding the joint work within the Supervisory Board of KROMI Logistik AG are set out in the rules of business procedure for the Supervisory Board. All members of the Supervisory Board – namely Ulrich Bellgardt, Prof. Dr. Eckart Kottkamp, Jens Grosse-Allermann, Stephan Kleinmann and Felix Höger – are members of the newly formed Audit Committee. The Supervisory Board’s tasks are all discussed and decided upon by the Board. The possibility of passing resolutions by circulating voting papers is used only infrequently, and then only in particularly urgent cases.

The Supervisory Board regularly assesses the effectiveness and efficiency of its activities (self-assessment). The assessment is based on discussions between the Supervisory Board Chair and the other Supervisory Board members. The Supervisory Board discusses the results. Suggestions from the Supervisory Board members for the further development of the Supervisory Board’s work are taken up and implemented.

Together with the Managing Board, the Supervisory Board ensures long-term succession planning. In doing so, the Supervisory Board pays attention to balance and diversity in relation to the knowledge, skills and experience required of future Managing Board members. In the Supervisory Board’s opinion, the basic suitability criteria for filling Managing Board positions include, in particular, professional qualifications, convincing leadership skills and the candidate’s performance to date. Furthermore, the Supervisory Board pays attention to diversity in the composition of the Managing Board. Discussions between the Supervisory Board and the members of the Managing Board as well as contacts with company executives form a basis for long-term succession planning. This gives the Supervisory Board an idea of potential internal successors for the Managing Board. When filling vacant positions on the Managing Board, the Supervisory Board prepares an applicant profile and conducts interviews with suitable internal and external candidates. The Supervisory Board has determined that, as a rule, the members of the Managing Board should not be older than 67 years.

The Managing and Supervisory Boards of KROMI Logistik AG declare that the recommendations of the Government Commission of the German Corporate Governance Code in the version dated December 16, 2019 (“GCGC”), as published in the Bundesanzeiger (Federal Gazette) on March 20, 2020, have been complied with since the last statement of compliance was issued on June 24, 2021, with the following exceptions:

• By way of divergence from recommendation C.2 GCGC, no retirement age has been set for Supervisory Board members. In light of the knowledge, skills and professional experience required for the Supervisory Board office (see Principle 11 DCKG), the specification of an age limit does not appear to be sensible.
• By way of divergence from recommendations D.2 and D.5 GCGC, no committees have been formed for the Supervisory Board – with the exception of the mandatory Audit Committee pursuant to Section 107(4) AktG. Given the Supervisory Board’s size, the formation of further committees is not expedient.
• In deviation from recommendation G.17 GCGC, only the higher time expenditure of the chairman of the audit committee is taken into account in the remuneration; otherwise, the membership in the audit committee is not taken into account when determining the remuneration. In the opinion of the company, the mandatory establishment of an audit committee, which includes all members of the Supervisory Board, does not justify additional remuneration at this time. The fixed total remuneration of the Supervisory Board members reflects the time spent to an appropriate extent.

In addition, the company’s Annual General Meeting on December 7, 2021 approved the remuneration system for members of the Managing Board proposed by the Supervisory Board. The new remuneration scheme applies to all Managing Board service contracts to be newly concluded or extended with effect from the Annual General Meeting on December 7, 2021.

In relation to the other recommendations of the DCKG on Managing Board remuneration in G.1 et seq. DCKG, the employment agreements with the current members of the Managing Board of KROMI Logistik AG will be continued and therefore do not yet take the new remuneration system into account. In managing board employment contracts extended or newly concluded since December 7, 2021, the recommendations on Managing Board remuneration in G.1 to G.16 have been complied with, with the exception of the following deviations:

• In deviation from recommendation G.3 GCGC, no peer group has as yet been used to determine the customary level of the specific total remuneration of the members of the Managing Board. In the assessment of the Supervisory Board, the benefit associated with this has so far been too low in relation to the required effort, as the current remuneration of the Managing Board is appropriate in the opinion of the Supervisory Board.
• According to recommendation G.8 GCGC, a subsequent change of the target values or comparison parameters should be excluded. In contrast, the Supervisory Board is entitled to unilaterally adjust the assessment bases or target figures relevant for determining the amount of long- term variable remuneration for both positive and negative effects, so that recommendation G.8 GCGC is probably not followed in full. The Supervisory Board considers such a regulation to be appropriate in order to avoid accidental influences on the basis of assessment.
• In deviation from recommendation G.10 sentence 1 GCGC, the variable remuneration of the members of the Managing Board on the basis of the Managing Board remuneration system approved on December 7, 2021 was not granted predominantly in the form of shares in the company or correspondingly based on shares. Given the limited free float of the shares of KROMI Logistik AG, it would appear more expedient – including in the interests of the shareholders – to pursue the objective of promoting the company’s strategy and its sustainable and long-term growth by means of variable managing board remuneration in monetary terms, the level of which to be based on more appropriate performance criteria for the company.

The Managing and Supervisory Boards of KROMI Logistik AG also declare that the recommendations of the DCKG in the version dated December 16, 2019, which was published in the Bundesanzeiger (Federal Gazette) on March 20, 2020, will be complied with in future with the following exceptions:

• By way of divergence from recommendation C.2 GCGC, no retirement age has been set for Supervisory Board members. In light of the knowledge, skills and professional experience required for the Supervisory Board office (see Principle 11 GCGC), the specification of an age limit does not appear to be sensible.
• By way of divergence from recommendations D.2 and D.5 GCGC, no committees have been formed for the Supervisory Board – with the exception of the mandatory Audit Committee pursuant to Section 107 (4) AktG. Given the Supervisory Board’s size, the formation of further committees is not expedient.
• In deviation from recommendation G.3 GCGC, no peer group is currently used to determine the customary level of the specific total remuneration of the members of the Managing Board. In the opinion of the Supervisory Board, the benefit associated with this is too small in relation to the effort required, as the current remuneration of the Managing Board is appropriate in the opinion of the Supervisory Board.
• According to recommendation G.8 GCGC, a subsequent change of the target values or comparison parameters should be excluded. In contrast, the Supervisory Board is entitled to unilaterally adjust the assessment bases or target figures relevant for determining the amount of long-term variable remuneration for both positive and negative effects, so that recommendation G.8 GCGC is probably not followed in full. The Supervisory Board considers such a regulation to be appropriate in order to avoid accidental influences on the basis of assessment.
• In deviation from recommendation G.10 sentence 1 GCGC, the variable remuneration of the members of the Managing Board on the basis of the Managing Board remuneration system approved on December 7, 2021 will not be granted predominantly in the form of shares in the company or based on shares. Given the limited free float of the shares of KROMI Logistik AG, it would appear more expedient – including in the interests of the shareholders – to pursue the objective of promoting the company’s strategy and its sustainable and long-term growth by means of variable managing board remuneration in monetary terms, the level of which to be based on more appropriate performance criteria for the company.
• In deviation from recommendation G.17 GCGC, only the higher time expenditure of the chairman of the audit committee is taken into account in the remuneration; otherwise, the membership in the audit committee is not taken into account when determining the remuneration. In the opinion of the company, the mandatory establishment of an audit committee, which includes all members of the Supervisory Board, does not justify additional remuneration at this time. The fixed total remuneration of the Supervisory Board members reflects the time spent to an appropriate extent.

In the course of their activities, KROMI Logistik AG and its international subsidiaries come into contact with a variety of legal systems, rules and regulations. Throughout the Group, the company applies all legally prescribed corporate governance practices and compliance regulations.

KROMI sees this as an essential basis of the actions of the boards, executives and employees of all the Group companies. A code of conduct applies to the entire Group, which serves as a model for coming to terms with ethical and legal challenges in day-to-day work and is intended to provide orientation in conflict situations in order to ensure uniform and exemplary action and conduct.

Compliance management is aimed at communicating and anchoring the values binding under the code of conduct within the Group structure. Problems and violations are investigated in the interest of all concerned parties (employees, customers and shareholders) and the company; in the event of identified defects or violations, appropriate measures are taken to eliminate the causes.

The company upholds the transparency requirements imposed by shareholders and the general public by posting mandatory, up-to-date information on its website. On the website, KROMI publishes information including ad hoc disclosures, financial reports and its financial calendar, information on voting rights, directors’ dealings, information on the shareholder structure, the General Meeting and general press releases.

The company has not formally decided to implement or introduce other company-wide standards, such as ethical, labor and social standards. Compliance with the appropriate requirements is seen as a matter of course for KROMI and the company’s boards. The Managing Board pays personal attention to these issues. Thanks to the company’s size, the Managing Board identifies any misdevelopments immediately, and corrects these as necessary. In view of the number of staff, all employees have easy and direct access to the Managing Board as required. The Managing Board fulfills its responsibility towards staff with the due sensitivity and care. This also relates to the company’s whistleblower scheme. The EQS whistleblower tool is the point of contact for this, which can be used to follow up such information with the necessary discretion and confidentiality.

Management positions in the company are filled in the company’s interests, and in accordance with legal requirements.

The Managing Board has set a target for the proportion of women in the two management levels below the Managing Board of at least 20 % for the first, and of at least 20 % for the second, management level below the Managing Board. These targets are to be achieved by June 30, 2025.

The Managing Board of KROMI Logistik AG consists of two members. At present, the Managing Board does not include a woman. No plans exist to expand the Managing Board of KROMI Logistik AG. Given this, the Supervisory Board has set a target for the proportion of women on the Managing Board of KROMI Logistik AG of at least 0 % by June 30, 2025. Moreover, the Supervisory Board pays attention to diversity in the composition of the Managing Board and takes particular account of the characteristics of age as well as educational and professional background. These criteria are met by the existing members.

The Supervisory Board has set a target for the proportion of women on the Supervisory Board, whereby at least one female member should belong to the Supervisory Board of KROMI Logistik AG by June 30, 2025. As a consequence, by June 30, 2025, the proportion of women on the Supervisory Board of KROMI Logistik AG should total at least 20 %, given a Supervisory Board consisting of five members. Furthermore, in its election proposals to the Shareholders’ General Meeting, the Supervisory Board will also pay attention to diversity in relation to aspects such as age as well as educational and professional background, inasmuch as the proposed candidates should reflect a plurality of opinions and experience. These criteria are met by the existing members.

With regard to the composition of the Supervisory Board, the Supervisory Board of KROMI Logistik AG has determined the following competency profile for the entire Supervisory Board, and has set the following targets for the composition of the Supervisory Board:

1. The Supervisory Board is to be composed in such a way that its members as a whole possess the knowledge, skills and professional experience required in order to perform their duties properly. In particular, the Supervisory Board considers the following knowledge and expertise areas as essential for the performance of its duties within the company (expertise profile):

Knowledge of industry and tools, international industry experience, capital market and investor relations knowledge, financial accounting and auditing, internal control systems, corporate governance and compliance, digitalization expertise, environmental, social and corporate governance (ESG) system expertise, remuneration schemes for the Managing Board.

At least one member of the Supervisory Board must possess expertise in the financial accounting or auditing areas (financial expert in the meaning of Section 100 (5) of the German Stock Corporation Act [AktG]). Furthermore, the members of the Supervisory Board in their entirety must be familiar with the sector in which the company operates.

2. Furthermore, the Supervisory Board specifies the following objectives for its composition

a. In the Supervisory Board’s opinion, it should include an appropriate number of independent members. To this end, more than half of the shareholder representatives should be independent of both the company and the Managing Board. At least one shareholder representative should be independent of the controlling shareholder. The Supervisory Board Chair should be independent of the company and the Managing Board.

b. Conflicts of interest are to be avoided in the Supervisory Board’s composition. The Supervisory Board decides in each individual case in accordance with the law, and taking the German Corporate Governance Code into consideration, as to how to deal with potential or emerging conflicts of interest.

The current composition of the Supervisory Board corresponds to the objectives and competency profile that the Supervisory Board has set itself for its composition. Overall, the members of the Supervisory Board possess the knowledge, skills and professional experience required to perform their duties properly. Furthermore, the Supervisory Board is of the opinion that it includes a reasonable number of independent members. All of the Supervisory Board members are independent of both the company and its Managing Board in the meaning of the GCGC. In addition, Supervisory Board Chair Mr. Bellgardt and Supervisory Board members Prof. Dr. Kottkamp, Mr. Kleinmann and Mr. Höger are independent of the controlling shareholder in the meaning of the GCGC, and Deputy Chair of the Supervisory Board Mr. Grosse-Allermann is also a member of the Managing Board of Investmentgesellschaft für langfristige Investoren TGV, which holds around 83 % of the voting rights in KROMI Logistik AG.

Proposals of the Supervisory Board to the Shareholders’ General Meeting will take into consideration the objectives specified by the Supervisory Board for its composition, and will aim to fill the expertise profile for the entire board. The Supervisory Board decides on its proposals for election to the Shareholders’ General Meeting in the company’s interests, and taking into consideration all circumstances pertaining to the specific case.

The remuneration report, including the auditor’s report pursuant to Section 162 of the German Stock Corporation Act (AktG), as well as the applicable remuneration system pursuant to Section 87a (1) and (2) Clause 1 AktG and the last remuneration resolution pursuant to Section 113 (3) AktG will in future be available on the company’s website under the heading “Investor Relations” at http://ir.kromi.de.