Corporate Governance Practices

ACTIVE PRACTICE OF RESPONSIBLE CORPORATE GOVERNANCE

Our corporate governance practices are driven by fair, transparent and correct collaboration – both with members of staff and with business partners and the general public. For us, responsible corporate governance also means compliance with legal regulations within our decision-making and control processes and, moreover, actively taking recommendations on board that extend beyond these legal regulations.

SHAREHOLDERS AND ANNUAL GENERAL MEETING

The shareholders of All for One Group SE exercise their rights before or during annual general meetings. Pursuant to Article 13 of our statutes, each registered share is entitled to one vote. The annual general meeting is chaired by the chairman of the supervisory board. The annual general meeting adopts resolutions relating to all issues for which it is responsible by law and as defined in the statutes.

SUPERVISORY BOARD

The foremost task of the supervisory board is to advise and oversee the management board. In accordance with the statutes, the company's supervisory board is composed of six members, two of whom are staff representatives. The powers and duties of the supervisory board and its committees are governed by stock corporation law, the statutes, and the rules of procedure for the supervisory board and its committees. The supervisory board has defined specific objectives governing its composition. In addition to requiring sector expertise from all supervisory board members, it has also defined a more detailed skill set for the board as a whole. It forms the basis for all election proposals submitted to the annual general meeting.

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MANAGEMENT BOARD

As the body responsible for managing a stock corporation, the management board manages the affairs of the company »on its own responsibility« (Section 76 (1) Stock Corporation Act) without being subject to instruction, and is bound to respect the interests and business principles of the entity within the framework provided by stock corporation legislation. When exercising its management powers, the management board is also committed to raising the sustainable value of the company. It submits regular and comprehensive reports to the supervisory board on all material issues relating to business performance, corporate strategy and any potential risks. The powers and duties of the management board are governed by stock corporation law, the statutes, and the rules of procedure and delegation of responsibilities for the management board.

REIMBURSEMENT REPORT

The system of reimbursing the management board is explained in the reimbursement report. The combined management report also includes a detailed discussion of the individual reimbursements paid to management and supervisory boards, with separate indication of fixed and variable components, awards and additions. The disclosure of management board reimbursement is compliant with the recommendations of the German Corporate Governance Code from the year 2017. The structure of the reimbursement system is subject to regular review.

SHARES OPTION PLANS AND OTHER SIMILAR INCENTIVE SYSTEMS

There are currently no share option plans or similar incentive systems in place for members of the supervisory or management boards.

SHARES HELD BY MEMBERS OF THE MANAGEMENT AND SUPERVISORY BOARDS

Members of the management and supervisory boards hold shares in the company. The latest disclosure of the same is available at shareholder structure. Any and all changes in shares held by members of the management and supervisory boards are published in compliance with legal regulations.

ACCOUNTING AND FINANCIAL STATEMENT AUDITING

The consolidated financial statements of the company are prepared in accordance with IFRS, the annual financial statements in accordance with the German commercial code [HGB]. Following preparation by the management board, the consolidated and annual financial statements are subjected to external audit, approved and adopted by the supervisory board, and published within 90 days from the end of the financial year. In addition, interim reports are published for the first three quarters of each financial year – two quarterly statements and a half-year financial report. These interim reports are not subject to audit review.

TRANSPARENCY

Since we place great importance on an information policy aligned to providing uniform, comprehensive and prompt information, the company notifies all stakeholders regularly and promptly of the state of the company and reports on material business changes and developments. The internet and the company's website are the foremost tools that we use for communication purposes. Reports are also provided in the form of our annual report, interim reports and quarterly statements, as well as in meetings and conferences with analysts and journalists.

Information is also published in press releases and ad hoc statements. We comply with legal duties of notification – with regard to voting rights, or managers' capabilities, for example. Statements, presentations and reports are, moreover, available for inspection on this website on the internet. The company has established and regularly updates the insider register specified in Article 18 of the Market Abuse Regulation. The relevant individuals are aware of the legal obligations and punishments.

In keeping with the principle of »fair disclosure«, all shareholders and material target groups are always treated equally with regard to the provision of information. For legal reasons, shareholders may receive some information beforehand – such as is required to prepare the consolidated accounts, (interim) consolidated financial reports and consolidated budgets. In such instances, the appropriate recipients of this information are always bound to secrecy and to the confidential treatment of the information.

CODE OF CONDUCT

The corporate governance practices in place at All for One Group include, above all, the directives of our compliance management system that apply to all members of staff within the group. By establishing a code of conduct, we are emphasising the standards of behaviour we require from our staff, managers and management board. It also makes the material principles governing our conduct known to our customers, partners, suppliers, competitors and shareholders. By implementing this code in our day-to-day business, we are also demonstrating our commitment to legally compliant, responsible and honest dealings in the competitive environment, and to the privacy of data. Equally, we reject any form of corruption. Our compliance organisation is charged with monitoring compliance with the code of conduct and other company policies throughout the group. It also subjects them to regular reviews, updates them if necessary, and trains staff and management accordingly.

PERFORMANCE METRICS AND CONTROL SYSTEM

The key metrics for controlling the financial performance of the group are sales revenues and operating profit (EBIT). These financial performance indicators are coordinated to ensure that growth is as sustainable and profitable as possible.

Because »human capital« is so important in so many respects in a services company, we use the following non-financial performance indicators to measure group performance, in addition to the financial performance indicators:

Employee retention

The success of our business is largely dependent on the quality of our efforts to satisfy business partners, such as customers, suppliers or shareholders. Staff continuity and the ability to use it to build and maintain sustainably stable and strong relationships with business partners are also key to shaping the perception of our quality of service. We use employee retention (100% minus ratio of unwanted departures to headcount at start of period plus new recruits during the year under review) as our means of measuring this performance.

Health index

Our health management scheme is designed to maintain and expand the superb performance capabilities of our staff. We also hope it will actively help to reduce illness-related absences. We use a health index (100% minus number of sick days relative to actual work days in a reporting period) as our means of measuring this performance.

We regularly discuss the development of our financial and non-financial performance indicators in our annual and consolidated financial statements.

Pursuant to Section 91 (2) Stock Corporation Act, the management board – in keeping with its responsibility for the Group as a whole – has established a risk early warning system to allow developments jeopardising the company’s continued existence to be identified at an early point in time. The risk early warning system forms an integral part of the planning, control and reporting processes. In addition, the management board has established a group-wide compliance management system. A detailed description of the risk management, internal control and compliance management systems can be found in the discussion of opportunities and risks in the combined management report.

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