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Declaration of conformance of the Management Board and the Supervisory Board with the German Corporate Governance Code pursuant to Section 161 of the Joint Stock Companies Act

 

The Company conformed to the recommendations of the German Corporate Governance Code (in the version dated May 21, 2003) in fiscal 2003/04 and will continue to do so in the future except in the areas outlined below.

 

3.8 D&O insurance

Nordex has waived a deductible on the D&O liability cover for the members of the Supervisory Board and the Management Board. This is because it is convinced that the members of these two bodies are doing everything to avert potential harm to the Group. Responsibility towards the Company and a sense of motivation are not encouraged by imposing a deductible on D&O cover. In addition, the inclusion of a deductible would not have any effect on the insurance premium.

 

4.2.3 – 4 Individual breakdown of compensation of the members of the Management Board

Nordex continues not to break down the compensation payable to members of its Management Board. As well as this, it does not publicly disclose the basic elements of the existing flexible compensation system for the Management Board as it does not think that details of the compensation system constitute need-to-know information for the capital markets.

 

5.4.5 Compensation of Supervisory Board

The Supervisory Board does not receive any performance-tied remuneration. Nordex is not convinced that this form of remuneration is conducive to an improvement in the quality of supervisory activities. The individualized compensation paid to members of the Supervisory Board is set out in the Company’s bylaws.

 

5.5.2 Potential conflicts of interest

In four cases, members of Nordex AG’s Supervisory Board hold positions on the boards of the Company’s business partners, advise such business partners or maintain business relations with other producers of wind turbines. This does not give rise to any material conflicts of interest. The details are as follows:

 

The Supervisory Board member Flemming Pedersen is simultaneously a member of the Supervisory Board of Welcon A/S. In the year under review, Welcon maintained business relations with Nordex primarily in the form of a supplier of towers. The purchasing relations with Welcon comply strictly with arms-length requirements. Orders are placed only after intensive comparisons of prices and services. As Welcon is one of the most efficient producers of towers in Northern Europe, it has been one of Nordex’s suppliers for many years.

 

HSH Nordbank AG offers Nordex AG credit facilities. Hans Berger, a member of that bank’s Management Board, is also a member of Nordex AG’s Supervisory Board. Mr. Berger is not directly responsible for business relations with Nordex and therefore does not exert any direct influence.

 

G. Siempelkamp GmbH & Co. KG supplies Nordex as well as other producers with cast parts for wind turbines. In his capacity as the spokesman of the management board of Siempelkamp, Dr. Hans Fechner, who is a member of Nordex AG’s Supervisory Board, is not involved in the former company’s operative decisions and does not exert any specific influence on these business relations.

 

The Chairman of the Supervisory Board Dr. Eberhard Freiherr von Perfall advises the law firm Lovells as a specialist attorney. In the past this law firm has assisted Nordex AG on individual occasions. Dr. von Perfall was not personally involved in any of these mandates and did not exert any influence on the business relations at any time whatsoever.

 

Finally, it should be noted that the members of the Supervisory Board hold personal mandates with duties of confidentiality.

 

7.1.2 Reporting dates

Nordex complies with the follow-up admission rules stipulated for the Prime Standard. These transparency standards formulated by Deutsche Börse are amongst the strictest in Europe. Among other things, the stock-market rules stipulate that annual reports must be published within four months and quarterly reports within two months of the end of the period to which they refer. Nordex believes that the 90/45-day rule provided for in the Code does not necessarily heighten transparency. Moreover, the billing practices in the mechanical and plant-engineering sector make it difficult to comply with shorter reporting deadlines.

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