Corporate Governance

German Corporate Governance Code

In February 2002, the German Corporate Governance Code (hereinafter also “Code”) was adopted by the Government Commission responsible and continually updated with the goal of establishing principles for good corporate governance and bolstering trust in German companies. The Code is designed to make the German Corporate Governance system transparent and understandable. Its purpose is to promote the trust of international and national investors, customers, employees, and the general public in the management and supervision of listed German stock corporations.

SAF-HOLLAND S.A. is a Luxembourg société anonyme (S.A.) which is listed solely on a stock exchange in Germany. It is subject to Luxembourg corporate law and not German corporate law. With view to capital markets laws (transparency, insider trading, market abuse etc.) German or Luxembourg laws and regulations can apply depending on the issue at stake. Furthermore, we are not required to comply with the respective German corporate governance regulation applicable to listed German stock corporations.

Nevertheless, we have decided to comply, to a certain extent, with the recommendations of the German Corporate Government Code regarding the principles of good corporate governance as SAF-HOLLAND S.A. regards the German Corporate Governance Code to be an important foundation for responsible corporate governance. However, certain recommendations will apply to our Company only to the extent that they are consistent with Luxembourg corporate law and our corporate structure. SAF-HOLLAND S.A.'s single board structure with a Board of Directors,has a one-tier structure (general meeting of shareholders and a board of directors) instead of a two-tier structure (general meeting of shareholders / supervisory board / management board). This is due to historical reasons given that the two-tier structure was not available for joint-stock companies in Luxembourg, when SAF-HOLLAND S.A. was created. Approx. 5% of all Luxembourg joint-stock companies have a two-tier structure, which is deemed to be more burdensome, cost-intensive and difficult to administer compared to a flat one-tier structure.