Supervisory Board Report
The past fiscal year was very successful. The Supervisory Board would like to thank the Executive Board and the employees of Aurubis AG and all of the Group companies for their dedicated work.
Collaboration between Supervisory Board and Executive Board
The Supervisory Board performed the functions incumbent upon it by law, the Articles of Association and rules of procedure. It regularly supervised and assisted the Executive Board in an advisory capacity in the management of the Company and supported the organization of the Group’s strategic orientation that had been mutually agreed. The joint target of the Executive Board and Supervisory Board was to increase the enterprise value of Aurubis AG and its Group companies long-term.
The Executive Board informed the Supervisory Board regularly in written and verbal reports, promptly and comprehensively, about corporate planning, business development, strategic development and the current situation of the Group including the risk situation, risk management and compliance. The Super visory Board was also informed about individual deviations of the business performance from the established plans.
The Supervisory Board discussed all the transactions that were of importance for the Group in detail on the basis of the Executive Board’s reports. The Supervisory Board agreed on the Executive Board’s suggested resolutions after thorough review and consultation.
Consultations in the Supervisory Board
Four scheduled Supervisory Board Meetings (on January 17, 2012, February 29, 2012, May 25, 2012 and September 21, 2012) were held in fiscal year 2011/12. One resolution was adopted by written consent in lieu of a meeting. Only one member of the Supervisory Board did not attend one of the
meetings. The average participation rate for the Supervisory Board members was therefore nearly 98 %.
The topics of regular Supervisory Board consultation in meetings included the business performance, human resources in the Group and the development of the results and the raw material, foreign exchange and energy markets. The Supervisory Board also dealt with the financial situation and the status of capital expenditure. The respective committee chairman also reported on the committees’ work and the generated suggestions and results at the meetings.
In the meeting on January 17, 2012 the Supervisory Board determined the compensation for the Executive Board members for fiscal year 2011/12 contingent on the established objectives. Details are explained in this annual report under the compensation report.
In the same meeting, consultations focused on the approval of the consolidated financial statements and the separate financial statements for Aurubis AG for 2010/11, including the corporate governance report, and the preparations for the 2012 Annual General Meeting. The Executive Board gave a detailed report about the status of the project to optimize the production structure and to relocate production from the Finspång/Sweden site to the plants in Zutphen (Netherlands) and Buffalo (USA).
On February 2, 2012 the Supervisory Board approved the Executive Board resolution to relocate Business Line Bars & Profiles’ production from Switzerland to Belgium.
In the Supervisory Board meetings on September 29, 2012 and May 25, 2012 the Executive Board reported on the Group’s current business and financial situation after the end of the respective quarter.
The Supervisory Board approved the budget for fiscal year 2012/13 in the meeting on September 21, 2012. Furthemore, the Supervisory Board authorized the “lead refining” replace-ment investment and the “PKE 2013 Project” (large-scale stand still in concentrate processing) at the Hamburg site. After Dr. Wortberg resigned as Chairman, the shareholder representatives elected Prof. Dr. Fuhrmann as Chairman of the Nomination Committee effective October 1, 2012.
The Supervisory Board set up a total of four permanent committees to fulfill its duties, which effectively supported the work in the meetings. The committees prepared the Supervisory Board’s resolutions and the topics to be considered in the meetings. The Conciliation Committee in accordance with Section 27 paragraph 3 Law on Co-determination did not meet during the reporting year.
General statements on the composition and working procedures of the Supervisory Board and its committees can be found in this year’s declaration on corporate governance as part of the Aurubis AG’s management report.
Only one member did not participate in one committee meeting.
Work on the Personnel Committee
The Personnel Committee met twice in the year under review.
In its meeting on January 16, 2012 the Personnel Committee developed a compensation suggestion for the Executive Board’s overall and individual performance in fiscal year 2010/11.
Furthermore, the Personnel Committee developed a sugges-tion regarding compensation for Mr. Willbrandt, the new Chief Executive Officer. In its meeting on September 21, 2012, the Personnel Committee worked on the selection process for Dr. Landau’s successor.
Work on the Audit Committee
The Audit Committee met four times in the reporting period and considered the separate financial statements for Aurubis AG, the consolidated financial statements and the quarterly reports for the past fiscal year, which were discussed with the Executive Board in each case before being published.
The Audit Committee also addressed the monitoring of the accounting process, the effectiveness of the internal control and auditing system and compliance management in the Group. In all of the meetings, the committee dealt with the status of the Federal Financial Supervisory Authority’s procedure. Moreover, the committee dealt intensively with the internal accounting structure during the meeting on February 13, 2012.
Dr. Wortberg, the Chairman of the Audit Committee, has specialist knowledge and experience in the application of accounting principles and internal control procedures. He is independent and not a former member of the Company’s
Apart from the appointment of the auditors and the agreement of the fee with he auditors, the committee established the focuses of the annual audit 2011/12, specifically (i) the follow-up audit of the IT authorization concept and (ii) the audit of the executed SAP release change on the AG level
and, on the level of the former Luvata companies, (i) the audit of the Aurubis Sweden and Aurubis Netherlands SAP server migration to IBM Germany and (ii) the Luvata integration, especially with respect to process mapping, the control test and ensuring the use of unified Group guidelines.
The Audit Committee furthermore monitored the inde-pendence of the auditors and obtained the declaration on their independence recommended by the German Corporate Governance Code and addressed the additional services
performed by the auditors. In this regard, the designated auditors were obligated to inform the Chairman of the Audit Committee without delay about any possible grounds for exclusion or lack of impartiality arising during the audit.
The auditors’ representatives attended one Audit Committee meeting and reported on the audit of the annual accounts.
Work on the Nomination Committee
The Nomination Committee met on September 21, 2012 during fiscal year 011/12. Dr. Wortberg resigned from his position as Chairman effective September 30, 2012 and suggested Prof. Dr. Fuhrmann as the new Chairman. The Nomination Committee concurred with this suggestion.
Corporate Governance and Declaration of Conformity
The regular efficiency review was performed by the Supervisory Board at its meeting on September 21, 2012.
The Executive Board reports on corporate governance at Aurubis AG, also on behalf of the Supervisory Board, in accord ance with Section 3.10 of the German Corporate Governance Code in the declaration and report on corporate governance, which are part of the management report.
On November 9, 2012, the Executive Board and Supervisory Board issued the updated Declaration of Conformity to the Corporate Governance Code in accordance with Section 161 German Companies Act and made it permanently accessible to the public at www.aurubis.com. According to the declaration, Aurubis complies with the Code recommendations with two exceptions. Additional information can be found in the Declaration of Conformity in accordance with Section 161 German Companies Act.
Conflicts of interest
There were no conflicts of interest among Executive Board or Supervisory Board members that should have been disclosed to the Supervisory Board or announced at the Annual General Meeting.
Audit of the separate financial statements of Aurubis AG and the consolidated financial statements
The Company’s financial statements prepared by the Executive Board in accordance with the German GAAP and the consolidated financial statements prepared in accordance with IFRS (International Financial Reporting Standards) for the fiscal year from October 1, 2011 to September 30, 2012 and the manage ment reports for the Company and the Group have been audited by PricewaterhouseCoopers AG, Wirtschaftsprüfungsgesellschaft, Hamburg, in accordance with the resolution passed at the Company’s Annual General Meeting on March 1, 2012 and their subsequent appointment as auditors by the Supervisory Board. The auditors have issued an unqualified auditors’ report.
The meeting of the Supervisory Board to approve the financial statements was held on December 12, 2012. All members of the Supervisory Board received copies of the financial statements and audit reports as well as the Executive Board’s recommendation on the appropriation of the net earnings and all other documents in good time before this meeting.
These documents were discussed in detail at the meeting of the Supervisory Board to approve the financial statements.
The auditors participated in this meeting, reported in detail on how the audit had been performed and their main audit findings and were available to provide the Supervisory Board with further information, discuss the documents and make additional comments.
Following a detailed discussion on the audit and the auditors’ findings and a thorough consideration of the report by the auditors and the recommendation of the Executive Board on the appropriation of the net income, and on the basis of its own review of and discussion on the separate financial statements of Aurubis AG, the consolidated financial statements, the management reports for the Company and the Group and the Executive Board’s recommendation on the utilization of the unappropriated earnings, the Supervisory Board concurred with the results of the audit. The Supervisory Board concluded
that no objections need to be raised, based on the results of its review, and, in accordance with the recommendations of the Audit Committee, approved the separate financial statements of Aurubis AG, which were thus adopted, as well as the consolidated financial statements, the management report for Aurubis AG and the consolidated management report at the meeting on the financial statements. The Supervisory Board concurred with the Executive Board’s recommendation on the utilization of the unappropriated earnings.
Changes in the Supervisory Board and Executive Board
Chief Executive Officer Dr. Bernd Drouven resigned from the Company’s Executive Board on December 31, 2011. Mr. Peter Willbrandt was elected Chief Executive Officer of the Company effective January 1, 2012.
We would like to thank Dr. Drouven for his successful service to the Company.
Hamburg, December 12, 2012
The Supervisory Board
Prof. Dr-Ing. Heinz Jörg Fuhrmann