Corporate Governance
Status: December 2007
Pursuant to § 161 of the German Stock Corporation Act (AktG), the Management Board and Supervisory Board of companies listed on the stock exchange in Germany must make an annual declaration stating that the recommendations of the Government Commission on the German Corporate Governance Code have been and are being complied with or list the recommendations not being applied. This declaration must be made permanently accessible.
The German Corporate Governance Code (the "Code") contains regulations with different binding force. In addition to current stock corporation law regulations, it also contains recommendations from which companies may deviate; they are obliged however, to make full annual disclosure of these deviations. The Code also contains guidelines which may be deviated from without disclosure.
For the period up to to 13.06.07, the following declaration refers to the version of the Code from 12.06.06. For subsequent and future Corporate Governance Code practice of TELES AG, the following declaration refers to the requirements in the Code from 14.06.07.
The Management Board and the Supervisory Board of TELES AG hereby declare that the recommendations of the "Government Commission of the German Corporate Governance Code" published by the Federal Ministry of Justice in the official section of the electronic Federal Journal have been and are being complied with since the last Compliance Statement of December 2006 with the following exceptions.
1. Item 4.2.5 (Management Board - Reimbursement Report and Stock Option Value Information)
As a supplement to Item 4.2.4, the German Corporate Governance Code recommends disclosure of management board reimbursements in a compensation report which also describes the management board reimbursement system in a generally understandable way as part of the Corporate Governance Report.
The description of the concrete configuration of a stock option plan or comparable components with long-term incentive effect and risk character should include their respective values. Pension promise allocations to pension reserves or pension funds should be specified.
Taking into consideration the unforeseeability of the entry of the exercise conditions of the stock option program, as well as the lack of knowledge when exercised, information related to the value of stock options is abstract in nature and is therefore not accounted for in this respect.
As regards the Reimbursement Report, the Management Board refers to the current company report.
2. Item 5.1.2 (Age Limit for Members of the Management Board)
The German Corporate Governance Code recommends that the Supervisory Board specifies an age limit for members of the Management Board. The specification of an age limit does not apply to TELES, particularly due to the public commitment expressed by the founding shareholder on the occasion of the IPO to continue his activities within the company.
3. Item 5.3 (Formation of Committees)
The German Corporate Governance Code recommends that the Supervisory Board forms professionally qualified committees subject to the specific conditions of the company and the number of members. At present, the Supervisory Board of TELES AG consists of three members. The formation of committees is not foreseen as these members deal in their totality with - in addition to their other duties -the committee-related themes referred to in the Code.
4. Item 5.4.7 (Performance-related Reimbursement of the Members of the Supervisory Board)
The German Corporate Governance Code recommends that members of the Supervisory Board receive fixed as well as performance-related reimbursement. With resolution of the General Assembly from 28th August 2007 a performance-related part of the reimbursement for the Supervisory Board, which is attached to a positive consolidated operating profit, has been implemented.
5. Item 7.1.2 (Publication of Consolidated Financial Statements)
The German Corporate Governance Code recommends that the Consolidated Financial Statements are publicly accessible within 90 days of the end of the financial year and Interim Reports are publicly accessible within 45 day of the end of the reporting period. In principle, TELES AG publishes the Consolidated Financial Statements and the Interim Reports – as far as possible – within these respites. In case of need, so in 2007, TELES reserves to take advantage of the legal respites.
Furthermore, the Corporate Governance Code recommends that the annual Corporate Governance Report should contain inter alia details of individual reimbursement structure of the Supervisory Board (Item 5.4.7) and ownership, acquisition and disposal of company stocks by the Management Board and Supervisory Board (Item 6.6), as well as concrete information pertaining to company stock option programs (Item 7.1.3). TELES AG publishes all of these information in its annual company report and refers to detailed internet-published company documents including, for example, the information pursuant to § 15a of the WpHG.
Berlin, December 2007
TELES AG Informationstechnologien
Prof. Dr.- Ing. Sigram Schindler
CEO
Dr. Walter Rust
Supervisory Board Chairman