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IV. Financial Year and Annual Financial Statements

 

§24   Financial Year

The financial year of the Company shall be the calendar year.
 

§25   Annual Financial Statements; Management Report; Group Financial Statements and Group Management Report

(1)  In the first three months of the financial year, the Executive Board must prepare the annual financial statements (balance sheet and income statement together with notes to the financial statements including the individual divisional financial statements) and management report for the preceding financial year, as well as the consolidated financial statements and the Group management report, and submit them without delay to the Supervisory Board and to the auditor appointed by the General Meeting. At the same time the Executive Board shall provide the Supervisory Board with a proposal for the appropriation of the distributable profit for the year. The regulations of the Third Book of the German Commercial Code for large corporations must be used for the preparation of the financial statements and management reports.

(2)  The Supervisory Board must check the annual financial statements, management report, consolidated financial statements and Group management report as well as the proposal for appropriation of the distributable profit for the year, and submit a written report on the results to the General Meeting. It must forward its report to the Executive Board within one month of receiving the documentation. The Supervisory Board must explain at the end of the report whether it endorses the annual financial statements and consolidated financial statements prepared by the Executive Board. If the Supervisory Board endorses the annual financial statements after auditing them, they are adopted unless the Executive Board and Supervisory Board resolve to leave the adoption of the annual financial statements to the General Meeting.

(3)  The Executive Board must convene the Annual General Meeting immediately after receiving the report from the Supervisory Board. The annual financial statements, individual financial statements endorsed by the Supervisory Board in accordance with Section 325 (2a) of the German Commercial Code, the management report, the consolidated financial statements, the Group management report, the report of the Supervisory Board, the explanatory report of the Executive Board on the statement in accordance with Section 289 (4) and Section 315 (4) of the German Commercial Code and the proposal of the 
Executive Board on the appropriation of the distributable profit for the year must all be displayed for inspection by the shareholders on the Company’s premises as from the time the meeting is convened, and copies must be sent without delay at the request of any shareholder unless they are available for the same period on the company’s website .

 

§26   Revenue Reserves

(1)  If the Executive Board and the Supervisory Board approve the annual financial statements, they can allocate amounts up to half the net profit for the year into other revenue reserves. Amounts which must be allocated to the statutory reserve and a loss carryforward must be deducted in advance from the net profit for the year.

(2)  Allocations to revenue reserves (Section 158 (1) sentence 1 (4) of the AktG), like the formation of profit and loss carryforwards, must, if legally permissible, (i) be undertaken separately for each division taking into account the existing reserves and profit and loss carryforwards in each case, as well as the net profit or losses for the year generated by each of the divisions in question and (ii) always be posted separately for each division of the Group. Sentence 1 shall apply accordingly to the withdrawals on the balance sheet items mentioned there; if legally permissible, these withdrawals are allowed only for the benefit of the division for which these balance sheet items were formed and recorded, and are also to be used for this division only.

(3)  If a division generates a net loss in a financial year, as a result of which the other division’s distributable profit for the year could be reduced or completely eroded, this net loss for the year must be offset, within the boundaries of what is legally permissible, by liquidating the available revenue reserves of the division which generated the net loss for that year.
 

§27   Capital reserves

(1)  Notwithstanding other financing options available to the shareholders, holders of class S shares shall be entitled to make payments into the free capital reserve in accordance with Section 272 (2) (4) of the German Commercial Code at any time.

(2)  These payments to the free capital reserve, like allocations to the tied capital reserve as defined by Section 272 (2) (1 to 3) of the German Commercial Code must, if legally permissible, (i) be undertaken separately for each division of the Company and (ii) always be recorded separately for each division of the company. Sentence 1 shall apply accordingly to the liquidation and withdrawals from the capital reserve; if legally permissible, such withdrawals are allowed only for the benefit of the division for which these balance sheet items were formed and recorded, and must also be used for this division only.

(3)  If a division generates a net loss in a financial year, as a result of which the other division’s distributable profit for the year could be reduced or completely eroded, this net loss for the year must be offset, within the boundaries of what is legally permissible, by liquidating the available free capital reserve of the division which generated the net loss for that year.
 

§28   Appropriation of Profits

The holders of class A shares and class S shares shall together pass a resolution at the General Meeting regarding the appropriation of the Company’s distributable profit for the year determined from the adopted annual financial statements. Both in the proposed appropriation of profits (Section 170 (2) sentence 2 of the AktG) and in the resolution on the appropriation of profits to be adopted by the General Meeting (Section 174 (2) of the AktG), the respective proportions of (i) the distributable profit for the year, (ii) the amount of tangible assets to be distributed among the shareholders, (iii) the amounts to be transferred to the revenue reserves, (iv) the retained earnings and, if applicable, (v) the additional expenses caused by the resolution, allocated to the class S shares and class A shares should be shown separately.