AGRANA is committed to compliance with the Austrian Code of Corporate Governance as amended in 2007. The Austrian Code of Corporate Governance (ACCG, the Code) is a voluntary self-regulatory initiative of private industry and was developed by the Austrian Working Group for Corporate Governance. The Code first came into effect in October 2002 and has since then been continually updated to reflect the changes in the provisions of Austrian stock companies, stock exchange and capital market law, the recommendations of the European Commission regarding the responsibilities of the supervisory board and remuneration of directors, and the OECD Principles of Corporate Governance (available at www.corporate-governance.at).
Voluntary commitment
to the Austrian Code of Corporate Governance and voluntary external evaluation.
The Code is based on the key principles of equal treatment for all shareholders, supervisory board independence, open communication between supervisory board and management board, transparency, avoiding conflicts of interest of board members, and effective oversight by the supervisory board and auditors.
AGRANA embraces these fundamental principles and sees the adherence to the Code’s standards of conduct as an integral component of its corporate culture. In addition to fostering confidence among national and international investors, rigorous standards of good corporate governance and transparency also underpin the company’s long-term ability to increase its enterprise value. Openness and transparency in communications with shareholders and the interested public are of the utmost importance to AGRANA. Information provided to investors during conference calls and road shows is therefore simultaneously made available to all other shareholders via AGRANA’s website at www.agrana.com.
The Supervisory Board of AGRANA Beteiligungs-AG unanimously approved AGRANA’s adherence to the Austrian Code of Corporate Governance in a meeting on 24 February 2005 and renewed the statement of compliance with the Code for the 2008|09 financial year in its meeting on 18 February 2009.
AGRANA’s voluntary adoption of the Code means that, in addition to the compulsory “L rules” which are based on mandatory legal requirements, the code’s “C rules” (“comply or explain”) must also be adhered to. AGRANA endeavours to comply with these provisions to the greatest possible extent. In a very few points, AGRANA departs from the rules of the ACCG. These aspects and the explanations for non-compliance are disclosed on the website.
Rules 38 and 57 (age limit for members of the Management Board and Supervisory Board)
The upper age limit required by rules 38 and 57 for, respectively, the appointment of Management Board members and election of Supervisory Board members is currently not provided for in AGRANA’s Articles of Association. In AGRANA’s opinion, inclusion in the Articles of a specific age limit for members of the Management Board or Supervisory Board is not necessary and would not be productive or effective.
Rule 49 (contracts requiring approval)
Under section 95 (5)(12) of the Austrian Stock Corporation Act, the approval of the Supervisory Board is required for contracts with members of the Supervisory Board by which members undertake, outside their role on the Supervisory Board, to provide a service to the company or a subsidiary for a material consideration. This also applies to contracts with companies in which a Supervisory Board member has a significant economic interest. For competition and business policy reasons, the object and terms of such contracts are not published in the annual report as stipulated in rule 49.
Rule 54 (appointment of an independent Supervisory Board member)
AGRANA Beteiligungs-AG has a free float of more than 20%. From this threshold upward, rule 54 of the ACCG stipulates the election of an independent member of the Supervisory Board who is neither a holder of more than 10% of the company’s share capital nor represents the interests of such a shareholder. The Supervisory Board of AGRANA does not have such a free-float representative.
All other “C rules” of the Austrian Code of Corporate Governance are observed.
In keeping with the Code, the Management and Supervisory Boards, and especially their chairmen, are engaged in continual dialogue regarding the Group’s performance and strategic direction, both at and between Supervisory Board meetings. The business culture of the AGRANA Group has always been rooted in open and constructive teamwork between the Management Board and Supervisory Board, which together ensure that the Code’s requirements are fulfilled.
As recommended by the Code, AGRANA commissioned a voluntary external evaluation by Univ.-Prof. DDr. Waldemar Jud Unternehmensforschung GmbH of compliance with the rules of the ACCG. This analysis employed the questionnaire issued for this purpose by the Austrian Working Group for Corporate Governance.