Declaration of Conformity 2013 of 26 February 2013

Due to its listing on the Entry Standard of the Frankfurt Stock Exchange, which does not represent an organised or regulated market in accordance with Section 2 Paragraph 5 WpHG (Security Trading Act), BAVARIA Industriekapital AG is not obliged to annually declare the extent to which the company follows the recommendations of the Government Commission on the German Corporate Governance Code. However, the principles of sustainable and transparent corporate governance are an integral component of BAVARIA’s corporate culture. Therefore, the Executive Board and Supervisory Board attach great importance to the German Corporate Governance Code and make every effort to comply with it wherever possible. The Executive Board and Supervisory Board of BAVARIA Industriekapital AG voluntarily declare herewith that the recommendations of the version of the Government Commission on the German Corporate Governance Code dated 15 May 2012 are being complied with except for the following deviations and were complied with in the past:

Executive Board

Item 4.1.5 DCGK: Diversity by filling of management positions
The German Corporate Governance Codex recommends in Item 4.1.5 that when filling vacancies in leadership positions, the Executive Board pay attention to diversity and, in particular, aim for reasonable consideration of women. In deviation from Item 4.1.5, BAVARIA Industriekapital AG fills vacancies in its corporate bodies and leadership positions in accordance with the qualifications of the applicants and the interests of the company.

Item 4.2.4 DCGK: Disclosure of individual Executive Board salaries
The disclosure of individual Executive Board salaries called for under Item 4.2.4 of the Codex was not implemented. In the judgement of BAVARIA Industriekapital AG, such a disclosure would infringe upon personal privacy rights/laws. Thus, the final decision in this matter has been left up to the individual Executive Board Member concerned.

Supervisory Board and Committees

Item 5.1.2 DCGK: Diversity / Succession Planning / Age limit on the Executive Board
In Item 5.1.2 the German Corporate Governance Codex recommends that when filling vacancies on the Executive Board, the Supervisory Board pay attention to diversity and, in particular, aim for reasonable consideration of women, ensure long-term succession planning and set an upper age limit for the Executive Board.

In deviation from Item 5.1.2 of the Codex, there is presently no need for additional, long-term succession planning for the Executive Board, given its present age structure. This is also why no upper age limit for Executive Board members has thus far been established.

In the interests of the company, persons ought to be selected for membership of the Executive Board on the basis of their technical and personal suitability and qualifications. The Supervisory Board takes the view that the special weighting of further criteria prescribed by the Codex for membership of the Executive Board would unduly restrict selection of candidates, both men and women, for the Executive Board. In this connection one must also consider that the Executive Board currently consists of just two members.

Items 5.3.1, 5.3.2 and 5.3.3 DCGK: Committees of the Supervisory Board
In deviation from Items 5.3.1, 5.3.2 and 5.3.3 of the Codex, the Supervisory Board of the Company does not form committees, since the size of the Company and of the Board let not be seem appropriate at the present time.

Item 5.4.1 DCGK: Establishment of concrete objectives for the composition of the Supervisory Board / Age limit for Supervisory Board members / Diversity
In accordance with Article 5.4.1, the Supervisory Board and Executive Board must name with respect to appointments specific goals that take in account the company’s international activities, potential conflicts of interest, number of independent members of the Supervisory Board, age limit to be established for members of the Supervisory Board and diversity and include an appropriate degree of female representation with respect to the company-specific situation. Suggestions of the Supervisory Board made to the selection committees involved should take account of these objectives.

Personal and technical suitability, experience and qualifications should be also the decisive selection criteria for filling vacancies on the Supervisory Board. A link to concrete objectives to be laid down in advance would unduly restrict flexibility with filling future vacancies, without the company deriving other evident advantages. Moreover, the recommendations of the Codex are generally considered anyway when vacancies in the Supervisory Board are filled, without there being a need for establishment of concrete objectives.

There is no general upper age limit for members of the Supervisory Board because it is the competence of each member of or candidate for the Supervisory Board that should be primarily decisive. In particular, experience also plays an important role.


Section 6.2 German Corporate Governance Code: Publication in the event reporting thresholds are exceeded
Section 6.2 governs the publication of the share of voting rights in a company by the Executive Board when certain percentages are exceeded. Since the company is not listed on the stock exchange and is therefore not subject to the Securities Trading Act, the company only publishes information when regulatory reporting thresholds are exceeded.

Financial Statement

Item 7.1.1 and 7.1.2 DCGK: Accounting
In deviation from the recommendation in Item 7.1.1, the Company has opted to continue preparing its accounts pursuant to the German Commercial Code (HGB) rather than IFRS regulations. This because the required changeover would be unlikely to generate added value, especially given the time and expense it would entail. The company has opted not to publish group interim reports within the first and second halves of the year (quarterly reports).

Munich, 26 February 2013

Executive Board, Supervisory Board

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