Declaration on Corporate Governance

The actions of the executive and supervisory committees of TAKKT AG are governed by the principles of responsible and good corporate management. In this statement, the Management – also on behalf of the Supervisory Board – reports on corporate governance in accordance with clause 3.10 of the German Corporate Governance Codex and in accordance with Section 289a, paragraph 1 of the German Commercial Code.


I. Declaration of conformity and reporting on corporate governance

TAKKT largely implements corporate governance within the company in accordance with the recommendations and proposals of the German Corporate Governance Code. In the financial year 2010, the Management and Supervisory Boards have dealt several times with corporate governance issues and jointly made the declaration of conformity 2010 in accordance with Section 161 of the German Stock Corporation Act (Aktiengesetz) on 31 December 2010. The declaration of conformity and all former declarations of conformity are permanently available on the internet at www.takkt.com.


Wording of the declaration of conformity as of 31 December 2010

The Management and Supervisory Boards of TAKKT AG declare that the recommendations of the „German Corporate
Governance Codex Government Commission“, published by the Federal Ministry of Justice („Bundesministerium der
Justiz“) in the official part („amtlicher Teil“) of the Electronic Federal Gazette („Elektronischer Bundesanzeiger“), as amended on 26 May 2010, will be met. Management and Supervisory Boards further declare that since the last declaration the recommendations of the „German Corporate Governance Codex Government Commission“, as amended from time to time, have been met. There are the following exceptions:

1. Under clause 4.2.4, the German Corporate Governance Codex recommends that the total compensation of each member of the Management Board is to be disclosed by name, divided into non-performance-related and performance-related components. The same applies to obligations arising from benefits which were granted to a Board Member on the premature or scheduled termination of their role on the Board or which were altered in the course of the financial year. There is no need to disclose these details if the Annual General Meeting passes a resolution to this effect by three-quarters majority. At
   TAKKT AG, this information is not issued individually as the General Meeting made such a resolution on 31 May 2006 for the duration of five years.
2. Under clause 5.3.2, the German Corporate Governance Codex recommends that the Supervisory Board shall establish an Audit Committee. At TAKKT AG, no Audit Committee has been installed. As the Supervisory Board of TAKKT AG with six members is comparatively small, Management and Supervisory Boards still see no need to establish an Audit Committee for the Board.
3. Under clause 5.3.3, the German Corporate Governance Codex recommends that the Supervisory Board shall establish a Nomination Committee. At TAKKT AG, no Nomination Committee has been installed. As the Supervisory Board of TAKKT AG with six members is comparatively small, Management and Supervisory Boards also see no need to establish a Nomination Committee for the Board.
4. Under 5.4.6 paragraph 3, the German Corporate Governance Codex recommends the individual disclosure of compensation paid to the Management Board, and compensation or benefits paid to the members of the Supervisory Board for personal services, especially consulting and agency services. At TAKKT AG, this information is not issued individually. As the compensation of the Management Board is not issued individually, TAKKT AG would like to deal accordingly with the compensation of the Supervisory Board. The terms of the compensation of the Supervisory Board are set forth in the bylaws of TAKKT AG, which is public domain.
5. Under clause 7.1.2, the German Corporate Governance Codex recommends that half-year and any quarterly financial reports shall be discussed by the Supervisory Board or its Audit Committee prior to publication. At TAKKT AG, the Chairman and the Deputy Chairman are continuously informed about the business development. Moreover, all members of the Board receive a written monthly report. Therefore, the Supervisory Board does not consider it necessary to additionally and separately discuss the quarterly financial reports by the whole Supervisory Board or by an Audit Committee.

 
II. Method of working of the Management and the Supervisory Board

Together more successful: Following this principle, the Management and Supervisory Boards at TAKKT AG work together closely and trustingly. The Management Board, which currently consists of three members, steers the company, develops and implements strategies, takes responsibility for the operational business and ensures effective risk management. Important decisions are taken by the Management Board in coordination with the Supervisory Board, which it also informs regularly and comprehensively about developments in the company, its environment, its strategy and its business.

It is the duty of the Supervisory Board to oversee and advise the Management Board in managing the company. It carries out this duty with dedication and thus makes a substantial contribution to the company’s success. It supports the Management Board in fulfilling its responsibilities completely and in good time and is involved in the major decisions. Furthermore, it is the task of the Supervisory Board to appoint the auditors in accordance with the resolution passed at the AGM. According to the Articles of Association, the Supervisory Board of TAKKT AG has six members. Furthermore, there is a personnel committee which has three members. Among other things, the committee's responsibilities include the preparation of issues in connection with the employment of the members of the Management Board and the approval of any additional service contracts of the members of the Supervisory Board with the company.

TAKKT has contracted D&O insurance including the statutory excesses for the members of the Management and Supervisory Boards.


III. Corporate governance practice

Management structures within TAKKT Group are marked by a clear, lean organisation and direct reporting lines. Furthermore, the company operates a value-based remuneration and incentive system. For more information about the remuneration of the Management Board, see the corporate governance section of the annual report and the Share / Corporate Governance section at www.takkt.com. 

Risk management
Responsible handling of business risks is one of the principles of good corporate governance. Comprehensive group-wide and company-specific reporting and controlling systems are available to the Management Board of TAKKT AG and the management of the Group to enable registration, assessment and control of these risks. The systems are continuously improved, adjusted to changing conditions and reviewed by the auditors. The Management Board regularly provides information to the Supervisory Board about existing risks and their development.

Details regarding risk management and the accounting-related internal monitoring and risk management system within the TAKKT Group are described in the risk report section of the annual report.

Transparency
Ever since its foundation, TAKKT AG has attached great importance to open communication with shareholders and all interested parties. Shareholders can direct questions and suggestions to the Management and Supervisory Boards at any time. The web site www.takkt.com provides comprehensive information in both German and English. Alongside the company’s key figures and information about the TAKKT share, the web site contains financial reports, press releases, ad-hoc news as well as the financial calendar.

Financial calendar
The scheduled dates of the key recurring events and publications, such as the annual general meeting, annual financial statements and interim reports, are compiled in a financial calendar. The calendar is published well in advance and permanently available on the website of TAKKT AG.

Obligations to inform
TAKKT meets its statutory obligations to inform and publishes the appropriate information on its homepage where this is required (e.g. the yearly document in accordance with Section 10 Securities Prospectus Act (WpPG)).

Corporate compliance
TAKKT AG attaches the highest priority to its compliance with all statutory and contractual obligations associated with responsible corporate governance. The Management Board also takes care to ensure that internal corporate guidelines are adhered to. Compliance with external and internal regulations is also regularly monitored by external auditors and the internal audit department on behalf of the Management Board.

Corporate responsibility
TAKKT understands corporate responsibility as an integral part of sustainable and good corporate management The company takes various measures for its employees, society and the environment to fulfil its responsibility. TAKKT documents these measures in a corporate responsibility report which is available at www.takkt.com.