MANAGEMENT REPORT PURSUANT TO §§ 289A (1), 315A (1) HGB
1. Composition of subscribed capital
As of December 31, 2018, the share capital of SINGULUS TECHNOLOGIES AG amounted to EUR 8,896,527.00, divided into EUR 8,896,527 bearer shares with a par value of EUR 1.00 each. The share capital has been fully paid up. Different share classes do not exist; all shares are ordinary shares. All shares carry the same rights and obligations. Each share confers one vote and an equal share of profit. The rights and obligations attached to the shares are based on the statutory provisions. Any claim to securitization of their shares by shareholders is excluded pursuant to Article 6.4 of the Company's Articles of Association. In the event of a capital increase, the profit participation of new shares pursuant to Article 6.5 of the Company's Articles of Association can be determined in derogation of § 60 AktG.
2. Restrictions concerning voting rights or the transfer of shares
There are no restrictions concerning voting rights or the transferability of shares in the Company. All shares in the Company can be freely traded in accordance with the statutory provisions that apply to bearer shares.
3. Direct or indirect equity investments exceeding 10 % of the voting rights
In accordance with the German Securities Trading Act (Wertpapierhandelsgesetz, "WpHG"), investors that indirectly or directly reach, exceed or fall below the voting rights thresholds of a listed company pursuant to § 33 WpHG by purchase, sale or by any other means must notify the company of this.
To the best of the Company’s knowledge, only Triumph Science and Technology Group Co., Ltd. held, directly or indirectly, more than 10 % of the voting rights in SINGULUS TECHNOLOGIES AG, holding 13.11 % of the voting rights as of December 31, 2018. The voting rights held by Triumph Science and Technology Group Co., Ltd. are attributed to the following party subject to disclosure: People's Republic of China and China National Building Material Group Co., Ltd.
On the date the threshold was reached on January 22, 2019, the People's Republic of China provided notification that, in the course of this minority shareholding, an additional 3.64 % of voting rights had been acquired in a second stage and ownership of these voting rights had been transferred to Triumph Science and Technology Group Company, LLC. With this, Triumph Science and Technology Group Co., Ltd. now holds a total of 16.75 % of the voting rights in SINGULUS TECHNOLOGIES AG.
4. Shares with special rights conveying powers of control
There are no shares with special rights conveying powers of control.
5. Control of voting rights if employees are shareholders of the Company and do not exercise their control rights directly
There are no employees who are shareholders of the Company and do not exercise their control rights directly.
6. Appointment and dismissal of Executive Board members; amendments to the Articles of Association
Executive Board members are appointed and dismissed in accordance with the provisions of §§ 84, 85 AktG, which stipulates that Executive Board members are appointed by the Supervisory Board for a maximum of five years. Executive Board members may be reappointed or their term of office extended for a maximum of five years in each case. Pursuant to Article 7.1 of the Company's Articles of Association, the Company's Executive Board comprises at least two members. The number of members of the Executive Board is determined by the Supervisory Board. It may appoint a chairman and a deputy chairman of the Executive Board pursuant to § 84 AktG and Article 7.1 of the Company's Articles of Association.
Pursuant to § 179 (1) sentence 1 AktG, any amendment of the Company's Articles of Association must be resolved by the Annual General Meeting. In accordance with § 179 (2) AktG, resolutions brought by the Annual General Meeting to amend the Articles of Association require a capital majority of at least three-fourths of the share capital represented at the time of the resolution. In accordance with Article 17.1 of the Articles of Association, the Supervisory Board is authorized to resolve on amendments to the Articles of Association which relate only to the wording thereof. This also applies to amendments to the Articles of Association due to a change in the share capital.
7. Authorization of the Executive Board to issue and redeem shares
7.1 Authorized capital
By resolution of the Annual General Meeting dated June 28, 2018, the Executive Board was authorized to increase the Company's share capital, with the approval of the Supervisory Board, until June 27, 2023, once or severally by up to a total of EUR 4,448,263.00 in exchange for cash and/or contributions in kind by issuing up to 4,448,263 new bearer shares with a par value of EUR 1.00 per share (Authorized Capital 2018/1). On principle, shareholders are to be granted subscription rights. The new shares may also be subscribed by one or more banks if the bank agrees or the banks agree to offer the shares to the shareholders for subscription (indirect subscription right). The Executive Board is however authorized, with the consent of the Supervisory Board, to exclude the subscription rights of shareholders (1) if this is necessary to eliminate fractional amounts; (2) if the new shares are issued against cash contributions at a price not significantly below the market price of the Company's shares as defined in § 186 (3) sentence 4 AktG and the pro rata amount of the shares issued for which the subscription rights are excluded does not exceed 10 % of share capital as defined in § 186 (3) sentence 4 AktG on the date the authorization is entered in the commercial register or – if the amount is lower – on the respective date it is exercised. During the term of this authorization, this limit includes any new shares that the Company issues as part of a cash capital increase and any shares that the Company sells following repurchase under exclusion of subscription rights pursuant to or in accordance with § 186 (3) sentence 4 AktG. Furthermore, this 10 % limit includes any shares that are tied to conversion or option rights or carrying conversion obligations on the basis of option rights, convertible bonds or participation rights issued by the Company or its subordinated Group companies during the term of this authorization under exclusion of subscription rights in accordance with § 221 (4) sentence 2 in conjunction with § 186 (3) sentence 4 AktG, or if the Company has a redemption right in the form of stocks; (3) if this is necessary in order to grant holders or creditors of option rights, convertible bonds or participation rights that have been or will be issued by SINGULUS TECHNOLOGIES AG or its subordinated Group companies pre-emptive subscription rights to new shares to the extent to which they would have been entitled after exercising the option or conversion rights or satisfying the conversion obligations; (4) for capital increases against in-kind contributions, particularly for acquisition of companies, business units or interests in companies.
7.2 Contingent capital
The Company's share capital was conditionally increased by up to EUR 24,465,157.00 by the issuance of up to 24,465,157 bearer shares with a par value of EUR 1.00 each (Contingent Capital 2015/1). The contingent capital increase is implemented only insofar as holders of option or conversion rights or holders subject to the obligation to convert their bonds or to exercise the options under convertible or warrant-linked bonds – which are issued or guaranteed by SINGULUS TECHNOLOGIES AG or one of SINGULUS TECHNOLOGIES AG's Group companies as defined in § 18 AktG, in which
SINGULUS TECHNOLOGIES AG directly or indirectly holds at least a 90 % interest, on the basis of the authorization approved by the Annual General Meeting on June 9, 2015 under agenda item 8 – exercise their option or conversion rights or, to the extent they are subject to the obligation to convert their bonds or to exercise the options, satisfy such obligations, or to the extent SINGULUS TECHNOLOGIES AG exercises an option to grant ordinary shares in SINGULUS TECHNOLOGIES AG in lieu of paying the cash amount due (either in full or parts thereof). The contingent capital increase will not be implemented if a cash settlement is granted or treasury shares or shares from authorized capital or from another listed company are used to service the bonds.
7.3 Redemption authorizations
The Executive Board is not authorized to repurchase shares in the Company.
8. Material agreements of the Company that are subject to a change of control upon a takeover bid and the resulting effects
In accordance with the conditions of the bonds issued by SINGULUS TECHNOLOGIES AG in July 2016, which have a total nominal value of EUR 12,000,000.00, bondholders have the right to call their bonds and demand their immediate repayment or, at the Company's discretion, demand that they are purchased by the Company or a third party at a price of EUR 100.00 plus accumulated interest in the event of a change of control.
Bondholders must exercise the put option within a period of 30 days following the publication of the notification of the change of control (put period). However, an exercise of the put option only becomes effective if the put notices submitted to the Company by bondholders during the put period account for at least 25 % of the aggregate nominal amount of the bonds still outstanding at that time. A change of control arises if one of the following events occurs: (i) the Company becomes aware that a person or group of persons acting in concert within the meaning of § 2 (5) of the German Securities Acquisition and Takeover Act (Wertpapiererwerbs- und Übernahmegesetz, "WpÜG") has become the legal or beneficial owner (direct or indirect) of more than 30 % of the Company's voting rights; or (ii) the merger of the Company with or into a third person or the merger of a third person with or into the Company, except in connection with legal transactions, as a result of which the holders of 100 % of the Company's voting rights hold at least the majority of the voting rights in the surviving legal entity directly following such a merger.
9. Compensation arrangements agreed by the Company with the members of the Executive Board or employees in the event of a takeover bid
The service agreements of the members of the Executive Board of SINGULUS TECHNOLOGIES AG provide the members of the Executive Board with a special call option in the case of a change of control. If the service agreement of a member of the Executive Board is terminated following a change of control because the member of the Executive Board exercised his special call option or if the service agreement is not renewed following a change of control, the respective member of the Executive Board is entitled to a special payment provided – in the event of exercising the special call option – that the service agreement still has a remaining term of more than nine months at the time of the change of control. The same applies in the event of a change of control if the Company places the member of the Executive Board on leave or terminates the service agreement. The amount of this special payment is capped. The change of control clauses and the compensation benefits are described in further detail in
the remuneration report (see also page 86).
CORPORATE GOVERNANCE DECLARATION IN ACCORDANCE WITH § 289F AND
§ 315D HGB
The corporate governance declaration in accordance with § 289f and § 315d HGB including the diversity concept addressing the composition of the Company’s management and supervisory bodies is contained in the corporate governance report and available on the Company's website at www.singulus.de
Kahl am Main, March 15, 2019
SINGULUS TECHNOLOGIES AG
The Executive Board
Dr.-Ing. Stefan Rinck
Dipl.-Oec. Markus Ehret