In the financial year 2013/2014, the Supervisory Board of Nordzucker AG carried out the duties required of it in particular by statutes, the company’s Articles of Association and rules of procedure; advising and monitoring the Executive Board of Nordzucker AG and the Nordzucker Group on an ongoing basis.
Chairman of the Supervisory Board
To do so, the Supervisory Board held four ordinary meetings in the financial year 2013/2014, in March, May, October and November 2013. It met for its constitutive meeting after the Annual General Meeting in July 2013 and held an extraordinary meeting in February 2014.
The Executive Board fulfilled its obligations and informed the Supervisory Board regularly, both orally and in writing, promptly and comprehensively about events of importance for the company. They included matters of strategy, company planning, the course of business, the current state of the company, its strategic development, the risk position, risk management and transactions of particular significance. Furthermore, all matters requiring the authorisation of the Supervisory Board were presented to us for approval. After thorough review and discussion, the Supervisory Board gave its approval to the Executive Board proposals. Furthermore, the Supervisory Board discussed in detail the Group’s plans for the financial year 2013/2014, the medium-term planning and the earnings forecasts for the past financial year.
In addition to the Supervisory Board meetings, the Chairman of the Supervisory Board was in regular contact with the Executive Board. He was informed of the current state of business and major transactions and discussed matters of strategy, planning, corporate development, risk exposure, risk management and compliance affecting the company.
In view of the decision that has now been taken to let the European sugar market regime expire on 30 September 2017, the Supervisory Board again concentrated this year on accompanying the Executive Board in its deliberations concerning the strategic development of the Nordzucker Group.
The Supervisory Board welcomes the decision to deploy various project and working groups to look in depth at the changing operating environment.
The Supervisory Board was also kept abreast of European and global developments and prospects for the sugar market and their importance for the Nordzucker Group by the Executive Board. It supports the further internationalisation of the Nordzucker Group, also outside Europe, as planned by the Executive Board. In March 2013 an informative strategy meeting was held on this topic and in February 2014 it was discussed at an extraordinary Supervisory Board meeting.
The Supervisory Board is pleased that, following the departure of Dr Niels Pörksen in September 2013, the Executive Board could be brought back to full strength from within the company with the appointment of Dr Lars Gorissen as of 1 March 2014. The Supervisory Board also extended the period of office of Hartwig Fuchs as Chief Executive Officer and the contracts with Mats Liljestam and Dr Michael Noth, so that the continuity of the Executive Board’s work is assured.
The Supervisory Board prepared the proposal put to the Annual General Meeting on amending the Articles of Association with respect to the remuneration of the Supervisory Board. The Annual General Meeting approved the proposal in July 2013, bringing the variable remuneration of the Supervisory Board members into line with the recommendation of the German Corporate Governance Code, which states that remuneration should be based on sustainable company performance. From the financial year 2013/2014 onwards, the variable remuneration is linked to the average dividend for the past three financial years (see also the Remuneration Report in this Annual Report).
The Supervisory Board welcomes the merger of Nordharzer Zucker Aktiengesellschaft and Nordzucker Holding Aktiengesellschaft voted at the Annual General Meetings in July 2013, which took effect retroactively as of 1 April 2013 in September 2013. In Nordzucker Holding Aktiengesellschaft Nordzucker AG now has an even stronger anchor shareholder, alongside Union-Zucker Südhannover Gesellschaft mit beschränkter Haftung and the direct shareholders, which now holds 84.1 per cent of the shares and voting rights in Nordzucker AG.
The Supervisory Board also received regular information from the Executive Board about the status of the antitrust proceedings. The investigation by the German competition authority was completed in February 2014 after several years. The European Commission also concluded its antitrust investigation, which led to a search of Nordzucker AG’s offices in April 2013, without imposing any penalty. The Supervisory Board believes that the compliance measures taken in the Nordzucker Group, particularly those launched since March 2009, will prove effective.
Furthermore, we discussed the recommendations and suggestions of the German Corporate Governance Code. The Executive Board and Supervisory Board have issued an updated statement of compliance in accordance with Sec. 161 AktG (Stock Corporation Act), which has been made permanently available to shareholders on Nordzucker AG’s website (see also the Corporate Governance Report and the statement of compliance in the Annual Report).
Personnel matters concerning the Supervisory Board and its committees
On 11 July 2013, the Annual General Meeting re-elected the members Hans Jochen Bosse and Helmut Meyer to the Supervisory Board, following the end of their period of office. Hans Jochen Bosse was re-elected until the close of the Annual General Meeting that votes on exonerating the boards for the financial year 2017/2018, and Helmut Meyer, for age reasons, until the close of the Annual General Meeting that votes on exonerating the boards for the financial year 2014/2015.
In its constitutive meeting on 11 July 2013, the Supervisory Board re-elected Hans-Christian Koehler as Chairman of the Supervisory Board of Nordzucker AG. The shareholder representative Helmut Meyer and the employee representative Dieter Woischke were re-elected as Deputy Chairmen. At its constitutive meeting the Supervisory Board also elected the shareholder representatives Michael Gerlif, Dr Harald Isermayer, Jochen Johannes Juister and Andreas Scheffrahn as well as the employee representatives Sigrun Krussmann and Dieter Woischke as members of the Supervisory Board Executive Committee. The Supervisory Board elected Dr Harald Isermeyer and Dieter Woischke to the Human Resources Committee. Gerhard Borchert, Dr Harald Isermeyer, Dr Hans Theo Jachmann and Helmut Meyer were elected to the Nomination Committee. Hans-Christian Koehler is Chairman of the Supervisory Board and therefore a member and Chairman of the Supervisory Board Executive Committee, the Human Resources Committee and the Nomination Committee. In addition the Supervisory Board elected Michael Gerlif, Matts Eskil Rosendahl, Andreas Scheffrahn, Ulf Gabriel and Marina Strootmann to the Audit and Finance Committee. Andreas Scheffrahn was elected as Committee Chairman.
Supervisory Board committees
The Executive Committee of the Supervisory Board met four times in the financial year 2013/2014. The Supervisory Board Executive Committee dealt in particular with the important matters concerning the Nordzucker Group as well as its strategic direction following the expiry of the sugar market regime and discussed these in detail with the Executive Board. In addition, the Executive Committee prepared the Supervisory Board meeting and looked closely at the declaration by Nordzucker AG on the German Corporate Governance Code in line with Section 161 German Stock Corporation Act (AktG).
The Audit and Finance Committee also met four times in the financial year 2013/2014. It dealt regularly with Group and investment planning, quarterly reports and the interim financial statements for the Nordzucker Group and Nordzucker AG, forecasts for the financial year 2013/2014, the risk management system, the effectiveness, capacities and findings of the internal audit department, and the internal control system. In the presence of the auditors, the committee discussed the accounts and management reports for the Nordzucker Group and Nordzucker AG for the financial year 2012/2013. Its work also included appointing the auditors for the financial year 2013/2014 and verifying their independence. Furthermore, the Audit and Finance Committee made a recommendation to the Supervisory Board for its proposal to the Annual General Meeting on the election of auditors for the financial year 2013/2014. The examination and approval of the individual and consolidated financial statements and the dependent company report for the past financial year as well as the proposal for election of the auditors for the financial year 2014/2015 were prepared at an additional meeting outside the period under review.
The Human Resources Committee met twice in the financial year 2013/2014. It dealt in particular with the appointment of Dr Lars Gorissen to bring the Executive Board back to full strength as well as with the changes to the contracts of the other Executive Board members described above, and put forward the corresponding proposals to the Supervisory Board. The committee also reviewed the remuneration of the Executive Board members and prepared the Supervisory Board’s decision on their variable remuneration (see Remuneration report in the Annual report).
The Nomination Committee met once in the financial year 2013/2014 and gave a recommendation to the Supervisory Board on its proposal to the Annual General Meeting concerning elections of shareholder representatives to the Supervisory Board.
Financial statements 2013/2014
The Executive Board presented the Supervisory Board in good time with the annual financial statements for 2013/2014 of Nordzucker AG and the Group, the management report and the Group management report, the proposal for the use of profits and the report on related party transactions.
Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft, Hanover, audited the 2013/2014 financial statements for Nordzucker AG and its management report, the consolidated IFRS financial statements and the Group management report. It issued each with an unqualified audit opinion and presented the auditors’ reports to the Supervisory Board in good time. The auditors also audited the dependent company report, presented it to the Supervisory Board in good time and gave the following opinion: “Following our professional audit and assessment we confirm that 1. the factual statements in the report are correct, and 2. that the consideration paid by the company in the transactions listed in the report was not inappropriately high.”
The aforementioned documents were examined thoroughly by the Audit and Finance Committee and the Supervisory Board, and were discussed in detail in the presence of the auditors following their report on the main findings of the audit. The Supervisory Board concurs with the result of the audit and concluded from its own examination that it has no objections to make. The Supervisory Board approved the annual financial statements as prepared by the Executive Board, which are thereby adopted. The Supervisory Board also approved the Executive Board’s proposal for the use of distributable profit.
Altogether the financial year 2013/2014 went very well. Our thanks go to the Executive Board and all the employees of the Nordzucker Group.
Braunschweig, Germany, 22 May 2014
Chairman of the Supervisory Board