Corporate Governance Statement

Pursuant to Section 289f of the German Commercial Code (HGB), ROY Asset Holding SE (the “Company”) is required to issue a corporate governance statement, which is either included and published in the management report as part of the annual financial statements or, alternatively, is publicly available on the website. ROY Asset Holding SE hereby makes use of the second alternative.

1. declaration of conformity

Since its adoption in 2002, the German Corporate Governance Code has been used as a standard for good corporate governance. The cornerstones of ROY Asset Holding SE’s corporate philosophy, such as a sense of responsibility, transparency and sustainability, comply with the German Corporate Governance Code and are a foundation of the company’s success. The Administrative Board and the Executive Directors pursue and support the objectives and principles of the German Corporate Governance Code.

In October 2020, the Board of Directors adopted the Company’s Declaration of Conformity with the German Corporate Governance Code pursuant to Section 161 of the German Stock Corporation Act (AktG).

The declaration of conformity is published in a separate section on the website of ROY Asset Holding SE (Declaration of Conformity).

2. corporate governance practices of ROY Asset Holding SE

(a) General
ROY Asset Holding SE’s corporate governance practices not only comply with applicable laws and regulations and the German Corporate Governance Code, but are also based on the Rules of Procedure of the Board of Directors and the Executive Directors as well as its best business practices.

The Company has a written Code of Conduct that is made available to all employees of ROY Asset Holding SE and the Group companies (collectively, the “ROY Group”). All employees are required to agree to the ROY Group Code of Conduct prior to employment. Violations of the ROY Group’s accepted policies and procedures are prohibited and will result in sanctions.

The Executive Directors of ROY Asset Holding SE are constantly working on optimizing all aspects of their business activities, e.g. with regard to health and safety in the workplace, sales practices and corporate behavior as a socially responsible company.

D.7 of the Code is not applicable to the Company, as members of the Administrative Board may be appointed as Executive Directors pursuant to Section 40 (1) sentence 1 SEAG, provided that the majority of the Administrative Board continues to consist of non-executive members.

(b) Corporate Compliance
An important part of the corporate governance of ROY Asset Holding SE is compliance with the relevant statutory provisions in its business activities and in the preparation of its internal corporate guidelines. It is one of the central duties of each business unit to ensure compliance with the guidelines applicable to the respective areas of responsibility. In particular, all business activities in Germany and the USA were carried out in strict compliance with local laws and international conventions. Specific compliance requirements are set out in the ROY Group Code of Conduct.

(c) Risk management
The Company’s risk management principles are explained in detail in the relevant section of the combined management report. In accordance with legal requirements, they are designed to ensure that significant risks are identified at an early enough stage so that appropriate measures can be taken by means of which risks can be minimized, diversified, transferred or circumvented in order to ensure the continued existence of the ROY Group. The risk management process is supported by the controlling and auditing functions.

(d) Avoiding and dealing with potential conflicts of interest.
The Board of Directors and the Executive Directors ensure that their decisions are not hindered by potential conflicts of interest. The internal rules of procedure of ROY Asset Holding SE contain regulations to avoid or deal with potential conflicts of interest.

(e) Public availability of the Company’s internal policies.
The Articles of Association of ROY Asset Holding SE (Articles of Association) and the Declaration of Compliance pursuant to Section 161 of the German Stock Corporation Act (Corporate Governance) are published on the Company’s website (www.royasset.de). The other internal guidelines and the Code of Conduct of ROY Asset Holding SE are not available to the public.

3. functioning of the Administrative Board and the Executive Directors

ROY Asset Holding SE has a monistic system, which is characterized by the fact that the management of the SE is the responsibility of a unified management body, the Administrative Board. The Administrative Board manages the Company, determines the basic lines of its business activities and supervises their implementation by the Executive Directors. The Executive Directors manage the business of the Company and represent the Company vis-à-vis third parties. They are bound by instructions of the Board of Directors.

Matthias Herrmann is Deputy Chairman of the Board of Directors and Executive Director. In this dual function, he works for both bodies.

The Board of Directors and the Executive Directors work closely together in the interests of the Company. Their common goal is to achieve sustainable value creation. The internal decision-making process of the Board of Directors and the Executive Directors, as well as the cooperation between the two bodies, are regulated in detail in the respective Rules of Procedure.

The Executive Directors report to the Board of Directors regularly, promptly and comprehensively on all issues of importance to the Company and the ROY Group. This information includes the planned business strategy, the profitability of the Group, recent developments in business activities, the financial and economic situation of the Company, business planning, the actual risk situation, compliance with the law and guidelines, as well as progress in the implementation of the risk management system and the results of the risk management system.

The Executive Directors must obtain the prior approval of the Board of Directors for certain transactions and measures, which are specified in more detail in the Rules of Procedure.

Long-term succession planning within the meaning of Recommendation B.2 GCGC 2019/2020 is carried out through regular discussions between the Board of Directors and its Executive Directors, as well as by regularly addressing the topic at meetings of the Board of Directors. The contract terms and renewal options for current Executive Directors are discussed, as are possible successors.

The Board of Directors has not formed any committees.

4. decisions to promote the participation of women in management positions

According to the Act on Equal Participation of Women and Men in Leadership Positions in the Private and Public Sectors of May 2015, ROY Asset Holding SE (formerly: ROY Ceramics SE) had to set targets for the proportion of women on the Board of Directors, among the Executive Directors and in the two management levels below the Executive Directors by September 30, 2015 at the latest. In addition, a deadline had to be set for the achievement of these targets, which could not go beyond June 30, 2017. In the case of subsequent determinations, the subsequent deadlines for the achievement of the targets may not exceed five years.

The Board of Directors of ROY Asset Holding SE (formerly: ROY Ceramics SE) sees 0% as the target for the proportion of women on the Board of Directors, which must be achieved no later than June 30, 2017.

The Board of Directors of ROY Asset Holding SE (formerly: ROY Ceramics SE) has set 0% as a target for the proportion of women among the Executive Directors, which must be achieved no later than June 30, 2017.

Because the holding company has only two employees, the Board of Directors has not set a target for the proportion of women in the management levels below the Executive Directors.

Statutes

Under the following link you will find the Articles of Association of ROY Asset Holding SE: