Report from the Supervisory Board
LADIES AND GENTLEMEN,
Over the course of the 2016 business year, the Supervisory Board continuously monitored the company’s management and received regular, comprehensive reports from the Board of Management on the company’s position, all significant events and company performance, both verbally and in writing.
The Supervisory Board thoroughly discussed all matters requiring its approval either by law or the company’s articles of incorporation and made the necessary decisions. In a total of five meetings in 2016, the Supervisory Board dealt in particular with the annual and consolidated financial statements, the current earnings position (including the risk management system), investments and their financing, and individual transactions of particular importance. The Supervisory Board provided guidance regarding the company’s strategic focus, regarding resolutions on planned offshore investments, regarding expansion of the broadband network expansion in the region and regarding its commitment to the Turkish market in light of the current political situation. The Supervisory Board approved the re-securitisation of global registered shares in EWE AG by providing written consent in lieu of holding a meeting. Additionally, the Supervisory Board passed resolutions to terminate the appointment and dissolve the employment contracts of the members of the Board of Management Ines Kolmsee and Nikolaus Behr. The Group auditing department provided the Supervisory Board with regular reports on the audits carried out. An external forensic investigation has been commissioned following anonymous reports of legal violations, especially in connection with donation promises and the illegal awarding of contracts. The investigations will be ongoing in the 2017 business year and will continue to be the subject of frequent Supervisory Board resolutions.
The Supervisory Board of EWE AG underwent the following changes since 1 January 2016: Following the decrease in the shares of the shareholder EnBW Energie Baden-Württemberg AG, Mr Stefan Brok, Dr Hans-Josef Zimmer and Dr Frank Mastiaux have stepped down from their roles as shareholder representatives on the Supervisory Board. Shortly after his withdrawal, Dr Frank Mastiaux was re-appointed to the Supervisory Board of the company. Additionally, Ms Beatrix Kuhl and Mr Peter Bohlmann were appointed to the Supervisory Board as representatives of the shareholders. Mr Jürgen Humer resigned from his position as employee representative. Ms Heike Klattenhoff has been appointed his successor by the Local Court (Amtsgericht) of Oldenburg. Mr Gregor Heller, who stepped down from the Supervisory Board at the end of 2015, has been replaced by Mr Claus Christ as an employee representative. Dr Hans-Josef Zimmer resigned from his position as a member of the working committee, the finance and audit committee and the mediation committee pursuant to Article 27 (3) of the German Co-determination Act (MitbestG). Ms Beatrix Kuhl was appointed to the working committee, Mr Peter Bohlmann was appointed to the finance and audit committee and Mr Heiner Schönecke was appointed to the mediation committee.
The Supervisory Board thanks its former members for their committed, constructive work and for their efforts to further the interests of the company.
Together with the Board of Management, the Supervisory Board committees prepared the meetings and the resolutions of the Supervisory Board. All in all, the steering committee met eight times, the working committee twice and the finance and audit committee a total of two times. No meetings of the mediation comittee pursuant to Article 27 (3) MitBestG were held.
The annual financial statements of EWE AG prepared by the Board of Management in accordance with the German Commercial Code (HGB), the consolidated financial statements prepared in accordance with IFRS and the combined management report for EWE AG and the Group for the 2016 business year have been audited by the accounting firm Ernst & Young GmbH, which was elected as auditor at the Annual General Meeting on 4 May 2016, and subsequently hired by the Supervisory Board. The auditors’ reports were distributed to the members of the Supervisory Board, officially acknowledged and incorporated into the discussion and review of the annual and consolidated financial statements. The auditors participated in the meeting of the finance and audit committee on 4 April 2016 and the Supervisory Board meeting dealing with the financial statements, where they reported on the major findings of their audit and were available to answer questions. Having conclusively examined the annual financial statements and consolidated financial statements prepared by the Board of Management, the management report for EWE AG and the Group management report as well as the proposal for the appropriation of net profit, the Supervisory Board expresses no objections. The Supervisory Board today adopted the annual financial statements, approved the consolidated financial statements and concurred with the Board of Management’s proposal for the appropriation of net profit.
The Board of Management also prepared a report as required by Article 312 of the German Stock Corporation Act (AktG) on relationships with affiliated companies as per Article 313 AktG. The auditors have audited this report and issued the following auditor’s opinion:
“On the basis of our audit and in our professional opinion, we confirm that:
1. The factual statements of the report are correct
2. The consideration paid by the company for the transactions mentioned was not inappropriately high.”
Each member of the Supervisory Board was provided with a copy of the annual financial statements and management report, the consolidated financial statements and Group management report, as well as the audit reports from the company’s auditor. After our own review of the report, the Supervisory Board concurs with the results of the audit and expressly states that it has no objections to the statements by the Board of Management at the end of the report on transactions with affiliated companies.
The Supervisory Board would like to thank and express its appreciation to the Board of Management, all employees and the members of the works councils for their hard work in the 2016 business year.
Oldenburg, Germany, 25 April 2017
The Supervisory Board
Dr Stephan-Andreas Kaulvers