Commitment to the Austrian Code of Corporate Governance
Burgenland Holding Aktiengesellschaft is an Austrian public limited company listed on the Vienna Stock Exchange. Besides the applicable regulations of Austrian law, in particular the Companies Act and Capital Markets Act, corporate governance is governed by the By-Laws of Burgenland Holding Aktiengesellschaft, the Austrian Code of Corporate Governance (ACCG) – see www.corporate-governance.at
– as well as the rules of procedure of corporate bodies.
The Executive and Supervisory Boards of Burgenland Holding Aktiengesellschaft are bound by the Principles of Good Corporate Governance and thus fulfil the expectations of Austrian and international investors with regard to responsible and transparent corporate governance and management control with a long-term perspective. As of 16 March 2018, Burgenland Holding Aktiengesellschaft has fully submitted to
the ACCG as amended in January 2018.
The ACCG provides for a regular external evaluation of compliance of the Company with the ACCG. KPMG Austria GmbH Wirtschaftsprüfungs- und Steuerberatungsgesellschaft, Vienna, audited the corporate governance report of Burgenland Holding Aktiengesellschaft in accordance with § 96 (2) of the Austrian Stock Corporation Act and reported on its findings to the Executive Board and the Supervisory Board. The law firm Schönherr Rechtsanwälte GmbH audited compliance with the C-Rules of the Code (Rules 77 to 83) relating to the audit of the financial statements. The auditors have determined that the declaration issued by Burgenland Holding Aktiengesellschaft of compliance with the ACCG in the January 2018 version corresponds to the actual circumstances.
The standards of the ACCG are subdivided into three groups: The first category (Legal Requirements) is based exclusively on mandatory legal provisions and has to be applied by all listed Austrian companies and is also fulfilled to the letter by Burgenland Holding Aktiengesellschaft. Non-compliance with C-Rules (Comply-or-Explain) is possible, but has to be justified publicly. Burgenland Holding Aktiengesellschaft is posting such declarations in this report as well as on its homepage. R-Rules, by contrast, are of purely recommendatory character and deviations do not require any explanation.
As there is no obligation to prepare consolidated group accounts, IFRS are not applicable. Reporting is effected pursuant to applicable Austrian Financial Reporting requirements; Rules 65, 66, 69 and 70 of the ACCG are not applied.
The Executive and Supervisory Boards of Burgenland Holding Aktiengesellschaft declare, notwithstanding the deviations and explanations listed below, full and complete compliance with the C-Rules of the ACCG; there are also only isolated deviations from R-Rules.
Deviations from C-Rules
Due to the special character of the Company, Burgenland Holding Aktiengesellschaft deviates from the following C-Rules of the ACCG:
- Rule 16: No member of the Executive Board was elected Chairman. The Company is a holding with a minor extent of operating business activities. Given a two-member Executive Board, appointing a Chairman of the Executive Board would also entail certain disadvantages. Therefore, the Supervisory Board chose not to make such appointment. As this is not subject to any temporal restrictions, changes can be made at any time. The Executive Board acts as a collegial body and has always adopted its resolutions unanimously. For the reasons stated above, the Rules of Procedure for the Executive Board, which govern the details of the cooperation of the Executive Board, do not provide for an allocation of responsibilities.
- Rule 18: Burgenland Holding Aktiengesellschaft is contractually integrated in the audit and risk management systems as well as the internal control system of EVN AG, which can be accessed at any time. Given the low complexity and the size of the Company as well as the desire to keep administration as efficient as possible, the Executive Board considers existing checks and controls as sufficient and does not regard a separate audit plan as necessary. Furthermore, Energie Burgenland AG has its own audit system in place.
- Rule 27: No written contracts were concluded with the members of the Executive Board; remuneration is determined by resolution. The remuneration of the Executive Board does not contain any variable components. The size of the Company, the limited influence on investment income as well as the character of the position as sideline employment are good arguments for a simplified remuneration scheme. Therefore, the Supervisory Board chose not to stipulate any provisions to this effect. As this is not subject to any temporal restrictions, changes can be made at any time.
- Rules 27a to 31: Since the Executive Board receives a fixed remuneration and there are no executive employees at Burgenland Holding Aktiengesellschaft, Rules 27a to 31 are applicable only to a limited degree.
- Rule 37: The Chairman of the Supervisory Board communicates with the Executive Board as a whole. The Company is a holding with a minor extent of operating business activities. The Supervisory Board therefore refrained from appointing a Chairman of the Executive Board (see justification of Rule 16). As this is not subject to any temporal restrictions, changes can be made at any time. Coordination of strategy, business development as well as risk management with the full Executive Board has worked very smoothly given the limited number of business transactions.
- Rule 39: The Supervisory Board does not have a separate committee for decision-making in urgent matters. The need for urgent decisions by the Supervisory Board is covered by circular resolutions, which seems adequate given the low business volume of the Company. The Supervisory Board can set up additional committees at any time.
- Rule 83: On the basis of the documents submitted and the documents made available, the auditor must assess the effectiveness of the risk management system and report to the Executive Board. As explained above under Rule 18, Burgenland Holding Aktiengesellschaft has contractual access to the auditing and risk management system and the internal control system of EVN AG. Irrespective of this report, the risk management system was audited by the contractual partner in accordance with Rule 83 of the ACCG and assessed as functioning.
The full Corporate Governance Report 2018/19 can be retrieved here