Dear shareholders, dear employees and dear friends of SolarWorld AG,
It was not until January 24, 2014 that we were able to adopt the report by the Supervisory Board of SolarWorld AG on the 2012 fiscal year and publish it together with the Annual Group Report. Now, the Supervisory Board, made up of the same members, provides its report on the 2013 fiscal year, with the relevant accounts review meeting held on March 17, 2014. In between, the restructuring was closed and the acquisition of solar activities of the Bosch group was completed. The higher requirements for all corporate bodies of SolarWorld AG resulting from this were also reflected in the frequency of meetings of the Supervisory Board, which met formally 15 times since January 1, 2013 up to the accounts review meeting for this fiscal year. The meetings took place on January 24, February 22, March 18, April 18 and 29, May 15 and 27, July 8 and 18, September 30, November 21 and December 20, 2013 as well as on January 20, February 26 and March 17, 2014. 15 sets of minutes were prepared of these meetings, which were submitted, both during the year and in total, to the company’s auditors for inspection and inclusion in their audit. This meant that until the extraordinary shareholders meeting on August 7, 2013, all the Supervisory Board minutes were signed by Dr. Recktenwald, Dr. Gansen and Dr. von Bossel, the members who were re-elected at the Annual General Meeting on May 21, 2008, and subsequently, due to the departure of the founding Supervisory Board member, Dr. Alexander von Bossel and appointment of Mr. Marc Bamberger as financial expert, they were signed by Mr. Marc Bamberger and the re-appointed Dr. Recktenwald and Dr. Gansen. The latter was confirmed as Deputy Chairman and re-appointed for a further five years, whilst Dr. Recktenwald and Mr. Bamberger put forward their candidatures and were appointed correspondingly only until the end of the General Meeting, which shall be held on May 30, 2014. The Supervisory Board shall be extended to 6 members and provide a better representation of creditors. The Supervisory Board in its role as finding committee will also welcome that there will be thus additional versatility and internationality. If it is not possible to meet the gender-specific diversity requirements of the German Corporate Governance Code (GCGC), which was otherwise complied with, this would have to be tolerated as a result of the creditor’s requirements under the restructuring agreements. On the other hand, at the Supervisory Board meeting of August 10, 2012, the members also passed the resolution regarding the modified composition and independence regulation set forth in section 5.4 GCGC, this being connected with the corresponding Supervisory Board meeting of Solarparc AG. In the meantime, this company has been integrated fully into the SolarWorld group, but it has still maintained its legal independence until today with a Supervisory Board of its own.
The Financial Expert of this company is Mrs. Dr. Kristin Neumann. The following consensus was reached as regards the determination of targets for the relevant Supervisory Board composition:
- “one of the Supervisory Board members shall have an international professional background, which is recognized at Solarparc AG for Dr. Neumann with her activities as international Supervisory Board member and as Chief Financial Officer and at SolarWorld AG for Dr. Gansen with his international management activity in the legal department of an international group of companies,
- two Supervisory Board members shall not maintain any contractual relations with the company, which is, except for the Supervisory Board member Dr. Recktenwald and the engagement of his law firm in legal matters, true for the other members of the Supervisory Board,
- two Supervisory Board members shall also be independent in this sense, i. e. in both private and professional respects, which is also recognized for Dr. Gansen and Dr. von Bossel as well as Dr. Neumann,
- no member of the Supervisory Board should be older than 68 years, whereby this requirement has been fulfilled by all previous Supervisory Board members.”
On August 7, 2013, Mr. Marc Bamberger replaced Dr. Alexander von Bossel, LL.M. (attorney-at-law). Until May 2012, Dr. von Bossel, jointly with Dr. Recktenwald and Dr. Gansen, also formed the Supervisory Board of Solarparc AG, where he was replaced by Dr. Neumann. He was also thanked in this report for the work he had undertaken in the Supervisory Board since the company was founded, which he had carried out with full commitment and maximum professionalism up to the restructuring shareholders’ meeting of August 7, 2013.
During the period covered by this report, the Supervisory Board also performed the tasks that it is obligated to do according to the law, the articles of association and the rules of procedure. Since the inception of the company on December 18, 1998 and its constitution on January 12, 1999, the Supervisory Board has always been granted discharge. The last resolution on discharge, which was passed at SolarWorld AG‘s Annual General Meeting on May 24, 2012 for the 2011 fiscal year, was also not challenged. To the extent that the previous year‘s resolution for the 2010 fiscal year was contested for the first and only time, the Cologne Regional Court initially dismissed the action for annulment by its judgment of January 12, 2012 under file number 91 O 77/11. However, upon an appeal of the plaintiffs challenging the resolution, the Cologne Higher Regional Court modified this judgment of dismissal under file number 18 U 21/12 and in doing so also cancelled the resolution to discharge the Management Board, which had been objected to in connection with approval of formalities on attorneys’ costs. This was associated with fees of € 2,340.00, which the Chairman of the Supervisory Board had been granted with the approval of the Supervisory Board as part of the drawing-up of guidelines for the General Meeting in 2010. To this extent, a full internal Group audit therefore took place regarding all accounting procedures for the 2010 financial year, a joint meeting of the Management Board and Supervisory Board was held on March 18, 2013 as well as the precautionary repayment of the disputed amount as early as February 2013 plus a cost position of € 390.00 for the additional work concerning a Management Board interview regarding the remuneration structure, which was also forwardly cancelled. Moreover, approval was again granted by the Supervisory Board, whereby it was stated on this matter in the minutes of the Management Board on March 19, 2013: “The remaining audit resulted in no further findings. Also as a result it was confirmed by the Management Board that with the exception of the drawing-up of guidelines, for which the fees had already been re-paid, and that of the above-mentioned procedure, for which the fee is still to be requested, exclusively operating Management Board matters, which are not Supervisory Board matters, were included in the handling of the case. To this extent, the Management Board also confirms today the justification of the relevant instruction of the attorney.”
The Supervisory Board was and is in a continuous dialog with the Management Board of the company, which it both advised and supervised in the management of the company pursuant to § 111 German Stock Corporation Act (AktG). At the same time, the Supervisory Board dealt with the examination of its own efficiency. On the whole, no objections resulted from its activities and especially from the supervision of the Management Board. Also for this reason, the Supervisory Board will recommend to the Annual General Meeting that the Management Board be discharged for the 2013 fiscal year. The Management Board kept the Supervisory Board informed about all Management Board meetings through the written agenda, and thereafter by way of minutes of the meetings. The same applies to the Group Committee Meetings, which serve to stimulate a comprehensive exchange of views among the executive staff of the SolarWorld group.
The Supervisory Board was directly and on a timely basis involved in all decisions that were of fundamental importance to the company. The Management Board informed the Supervisory Board regularly, both in writing and verbally, without delay and comprehensively, about all issues relevant to the company regarding strategy, planning, business development, risk situation, risk management and compliance. The Management Board has pointed out and will point out deviations from previously formulated plans and/or targets, indicating the reasons therefor. In addition, comprehensive compliance regulations for the SolarWorld group were adopted, and Dr. Felicia Müller-Pelzer was appointed as “Global Compliance Officer”. She also reports to the Supervisory Board, the last time being at the meeting of February 26, 2014 for the 2013 fiscal year. The Supervisory Board itself complies with the reporting duties both of § 90 AktG and of the GCGC. Its recommendations have been and will be observed. On August 10, 2012, both the Management Board and the Supervisory Board of SolarWorld AG passed the following resolution and, thereafter, published it on the company‘s website: “that the recommendations of the ‚Government Commission of the German Corporate Governance Code‘ in the formerly valid version have been complied with since the last declaration of compliance on December 13, 2011 and that the current version of May 15, 2012, which was published on June 15, 2012, is being and shall continue to be complied with.” Due to the restructuring, a modification declaration followed in this respect on March 18, 2013 with regard to the change in the publication of the Group accounts beyond 90 days after the end of the financial year, which had become necessary. With regard to the new GCGC version, it was then stated in conclusion still in the same year: “At the relevant meeting of December 20, 2013, the Management Board and the Supervisory Board of SolarWorld AG decided on the continued validity of their compliance declaration of August 10, 2012 with its limitation of March 18, 2013 also for the version of the GCGC of May 13, 2013, which was published on June 10, 2013. Hence the Management Board and the Supervisory Board declare that the recommendations of the German Corporate Governance Code taking into account the above-mentioned restriction were complied with in 2013 and will be further complied with.” This declaration has also been made permanently available pursuant to § 161 AktG on the website of the company.
The section “Corporate Governance Report” in this Business/Group Report 2013 contains further details, unless the present report by the Supervisory Board already includes the information as required by section 3.10 GCGC.
Insofar as the Supervisory Board pursuant to section 5.1.2 GCGC has to make sure that there is diversity in the composition of the Management Board with particular emphasis on an adequate representation of women, this was taken up on July 1, 2011, when Mrs. Colette Rückert-Hennen was appointed as Management Board member for the Personnel and Brand executive division. Insofar as section 5.4.1 also provides for a corresponding diversity for Supervisory Board members, we have already referred to the external influences regarding the next election to the Supervisory Board. From the Group‘s point of view, there is also no need to provide a declaration of deviation in this respect, since one third of, at least, the Supervisory Board of Solarparc AG is composed of women. The present Supervisory Board of SolarWorld AG will presumably not yet be able to make a corresponding election proposal for this. On the other hand, in line with the new regulation of section 5.4.6, a proposal for a purely fixed remuneration for the Supervisory Board will be submitted at the next Annual General Meeting. The performance-related compensation, which is no longer included as a recommendation, is not applicable due to the results.
The tasks related to accounting and auditing are performed by the Supervisory Board as a group. The audit company BDO AG Wirtschaftsprüfungsgesellschaft, which was appointed to audit the financial statements and the consolidated financial statements of SolarWorld AG for the 2012 fiscal year, first renewed its declaration of independence as defined in section 7.2.1 GCGC, and thus confirmed that no business, financial, personal or other relationships exist between the auditor and its executive bodies and head auditors on the one hand, and the enterprise and the members of its executive bodies on the other hand, that might give rise to doubts about the auditor’s independence. It was also verified that the overall period of seven years of the authorization to issue an auditor’s certificate had not been exceeded for any of the auditors involved in the audit – and that applies groupwide. On the other hand, since the 2012 financial statements were not adopted before January 24, 2014, it was not possible to appoint the auditors for the 2013 fiscal year so that they had to be appointed by way of a court decision.
The report to be given by the Supervisory Board on the results of its own examination should, according to § 171 Sec. 2 AktG, also include a statement on which committees it has formed. As, however, the Supervisory Board of SolarWorld AG is limited to three members, an extensive formation of committees was not necessary again in the 2013 fiscal year. To the extent that § 175 Sec. 2 AktG requires an explanatory report on the information pursuant to § 289 Sec. 4, § 315 Sec. 4 HGB (German Commercial Code), the Supervisory Board adopts the relevant report by the Management Board fully subscribing to the statements made in it. The management and consolidated management reports affected by this were also audited by BDO AG Wirtschaftsprüfungsgesellschaft, Bonn, which extended the audit to the accounting as well. The annual financial statements for the fiscal year from January 1, to December 31, 2013, drawn up by the Management Board according to the HGB accounting rules and the management report of SolarWorld AG were awarded an unqualified auditor’s certificate. The latter was issued on March 14, 2014, presented in the joint accounts review meeting on March 17, 2014, and taken up in the Supervisory Board‘s resolution concerning the adoption of the financial statements. At the same time, the auditor awarded an unqualified auditor’s certificate to the group management report and the consolidated financial statements of SolarWorld AG, which pursuant to § 315a HGB were again drawn up on the basis of the international accounting rules IFRS. The Supervisory Board approved the financial statements, too, on March 17, 2014.
After its own examination of the annual financial statements, the consolidated financial statements, the management report and the group management report, the Supervisory Board approved the audit result presented by the auditors. It did not see any reasons for objections. No doubts concerning the correctness of the results produced by the auditors were raised, which is why any further investigation was not required and the resolutions concerning the adoption and approval of the annual financial statements as well as the consolidated financial statements could be passed. Previously, the Supervisory Board discussed the audit results of the auditors and the financial statements prepared by the Management Board in the final meeting on February 26, 2014. The Chief Financial Officer attended the meeting. He had also attended the preliminary discussions and meetings pursuant to section 7.1.2 GCGC regarding the relevant publication of the quarterly and half-yearly financial reports. Pursuant to section 3.6 of the GCGC, Supervisory Board meetings without the participation of the Management Board took only place on April 18 and May 15, 2013, whilst the Supervisory Board also integrated additional executive staff of the Group, for example, from the research field, into the two events for training and professional development on June 25 and December 20, 2013, which both took place at SolarWorld Innovations GmbH in Freiberg, Saxony. In this way, the relevant requirements of section 5.4.5 GCGC were also adhered to. Here, the topic of further training and professional development was established as a mutual obligation of the company and of the Supervisory Board.
The Supervisory Board thanks all staff of the Group, who have reacted to the market fluctuations and restructuring requirements in such a professional and committed way. The Supervisory Board is confident that these efforts will also ensure the long-term success of the company.
This report was unanimously approved by the Supervisory Board of Solar World AG immediately following the accounts review meeting on March 17, 2014, and the minutes were signed by all members.
Bonn, March 18, 2014
For the Supervisory Board
Dr. Claus Recktenwald