As a public limited liability company organised under the laws of the Grand Duchy of Luxembourg, the Group is not subject to the Code. However, we acknowledge the importance of good governance and are committed to comply with the principles as set out in the Code. The Executive Board and Supervisory Board believe deviations or qualifications of some individual provisions of the Code are justified. These deviations or qualifications are explained below.
Deviations from the Code
Independence of Supervisory Board members
Under the best practice provision 2.1.7 and 2.1.8, three out of five members of the Supervisory Board are considered not to be independent. Two out of five members have had an important business relationship with the company in the past year and one member has a shareholding in the company of at least ten percent. The Group deviates from this provision as it finds it necessary for its Supervisory Board members to have a good understanding of the complex environment in which the company operates.
Establishment of committees
The Group reserves the right to deviate from provision 2.3.2 for practical reasons. The regulation of committees states that if the Supervisory Board consists of more than four members, it shall appoint an Audit committee, a Remuneration committee and a Selection and Appointment committee. In the period under review, this provision was deviated from as the Selection and Appointment committee and the Remuneration committee were combined to form one committee.
Composition of committees
The Group reserves the right to deviate from provision 2.3.4 for practical reasons. The regulation of committees states that more than half of the members of committees should be independent within the meaning of best practice provision 2.1.8. In the period under review, this provision was deviated from as regards the Audit and Risk Committee. One out of two members is not independent. (as specified above under Members of the Supervisory Board).
The Group deviates from provision 3.2.3 for CEO and CFO with regards to the exceeding of the fixed remuneration component in the event of dismissal. Severance payment for CEO and CFO are set at one year`s salary and 50% of the applicable annual cash bonus, both for the preceding financial year.
Cancelling the binding nature of a nomination or dismissal
Pursuant to the Articles of Association, shareholder Sarabel and Lebaras have a right to nominate candidates for appointment as members of the Supervisory Board. Pursuant to Luxembourg law, if Sarabel or Lebaras, when making use of their nomination rights, include at least two candidates for each position in the proposal for appointment to the Supervisory Board, the General Meeting has to appoint one of the proposed candidates. In that case, it is not possible under Luxembourg law to set aside the binding nature of the nomination right, which would result in a deviation from best practice provision 4.3.3.