2008 was another successful year for the WACKER Group. In spite of the second half-year’s global economic difficulties, sales and EBITDA outperformed the prior-year levels and set new records. With investments at over €1 billion, WACKER entered a new dimension. Although the Group invested substantially more, it succeeded in financing itself without outside help.
The Supervisory Board supported the Executive Board in its successful work during 2008, offering advice on all key issues. To enable WACKER to continue seamlessly building on the good results of past years, the Supervisory Board approved projects that offer WACKER additional growth opportunities.
In 2008, we discharged all the duties incumbent on us by law and under the Group’s Articles of Incorporation and Rules of Procedure. We continuously monitored the activities of the Executive Board and extensively advised it on the management of the Group and business operations. The Supervisory Board was involved in every decision of fundamental significance for the Group at an early stage.
In both written and oral reports, the Executive Board regularly provided us with timely and comprehensive information on corporate planning, strategic development, business operations and the current state of Wacker Chemie AG and the Group, including the risk situation. Actual deviations from business plans and targets were explained to us in detail. Where required by statutory provisions and the Articles of Incorporation, the Supervisory Board voted on the reports and proposals of the Executive Board after detailed examination and discussion. Outside the scheduled Supervisory Board meetings, the Supervisory Board chairman remained in regular contact with the Executive Board, especially its president, and was kept informed about the current business situation and key business transactions.
Six Supervisory Board meetings were held in 2008 – three in the first half-year (including the newly elected Supervisory Board’s constituent session) and three in the second. Between meetings, the Executive Board informed us in detail by means of written reports about all projects and plans of particular importance to the Group.
The Supervisory Board’s Main Areas of Deliberation
The development of sales, earnings and employment in the Group and its individual segments were the subject of regular deliberations at our plenary meetings. At each meeting, the Supervisory Board evaluated the Executive Board’s performance – on the basis of Executive Board reports – and discussed strategic growth opportunities and other key topics with the Executive Board. There wasn’t a need for additional monitoring measures, such as inspection of corporate documents or expert counsel. The plenary meetings were prepared by shareholder and employee representatives in their own separate sessions. In the period under review, every Supervisory Board member attended at least half of the meetings held during their term.
The chief issues that the Supervisory Board deliberated on were:
- Constructing a polysilicon production plant at Nünchritz,
- The integration and reorganization measures relating to the Group’s all-share acquisition of its joint ventures with Air Products and Chemicals, Inc.
- Expanding and capitalizing Siltronic AG’s joint venture with Samsung Electronics Asia Holding Pte Ltd., Increasing our production capacities at Burghausen, Nanjing, Zhangjiagang, Singapore and Jena,
- The impact of the global financial crisis on WACKER’s development, especially with respect to the strategic investment plans, the future liquidity position and the financing.
At its meeting of December 11, 2008, the Supervisory Board discussed the WACKER Group’s fiscal 2009 planning, as well as medium-term plans until 2012. The Supervisory Board approved both sets of planning data. It also approved the 2009 capital expenditure budget.
Work in the Committees
The Supervisory Board is assisted in its work by Supervisory Board committees. WACKER’s Supervisory Board has created three committees – an Audit Committee, an Executive Committee, and a Mediation Committee (as per the German Co-Determination Act [MitbestG], Section 27, Subsection 3). The Audit Committee is chaired by Dr. Bernd W. Voss. The other two are chaired by the Supervisory Board chairman.
The Audit Committee met four times in 2008. Key aspects of its work included thorough audits of 2007’s financial statements for Wacker Chemie AG and the Group, and the consolidated financial statements for the first half-year. The Audit Committee also discussed the consolidated quarterly reports and looked at risk-management and compliance issues. In addition, the Audit Committee oversaw cooperation with WACKER’s independent auditor.
The Executive Committee met twice in 2008. In its meetings, it handled personnel issues relating to the Executive Board.
The Mediation Committee did not need to be convened in the year under review.
The Supervisory Board was regularly informed of the committees’ work.
In its meeting of December 11, 2008, the Supervisory Board dealt with the Group’s implementation of corporate governance principles. At this meeting, the Supervisory and Executive Boards passed the annual Declaration of Conformity – as per § 161 of Germany’s Stock Corporation Act (AktG). The Declaration of Conformity has been published online, where it is permanently available to shareholders.
At its December meeting, the Supervisory Board also reviewed the efficiency of its own activities – arriving at a positive evaluation.
Audit of the Annual Financial Statements of Wacker Chemie AG and the WACKER Group
KPMG AG Wirtschaftsprüfungsgesellschaft (Berlin) audited the annual financial statements (reporting date: December 31, 2008) and the management reports of Wacker Chemie AG and the WACKER Group (including its accounting system) and approved them without qualification. Said financial statements and management reports had been prepared by the Executive Board as per IFRS regulations. The audit contract had been awarded by the Supervisory Board’s Audit Committee in line with the resolution of the Annual Shareholders’ Meeting of May 8, 2008.
The auditors also examined the Group’s risk management system in accordance with Section 91 of Germany’s Stock Corporation Act. The audit verified that the risk management system meets legal requirements. No material business risks were identified. Financial-statement documents (including the auditor’s report, the management reports and the Executive Board’s appropriation-of-profits proposal) were submitted to all Supervisory Board members in a timely manner.
At its meeting of March 4, 2009, the Audit Committee closely examined the above-mentioned statements and reports, and the reports submitted by the (parent-company and Group) auditing team, which was present. The committee thoroughly discussed said information with the auditors, and reported in full to the whole Supervisory Board. At its meeting of March 12, 2009, the whole Supervisory Board intensively discussed and examined the relevant financial statements and reports, giving all due consideration to the reports made by the Audit Committee and auditors. At both meetings, the auditors took part in the deliberations. They reported on the main results of the audit and were available to the Audit Committee and the entire Supervisory Board to answer questions and provide supplementary information.
After concluding our own examination, we found no grounds for disputing the financial statements and management reports of either Wacker Chemie AG or the Group, or the auditor’s report.
Accordingly, we concur with the audit’s result. The financial statements of both Wacker Chemie AG and the WACKER Group – as submitted by the Executive Board as per December 31, 2008 – are hereby approved. Wacker Chemie AG’s financial statements are thus finalized. We approve the Executive Board’s profit-appropriation proposal.
Changes in the Composition of the Supervisory and Executive Boards
New Supervisory Board shareholder representatives were elected at the Annual Shareholders’ Meeting on May 8, 2008. Wacker Chemie AG employees had elected their employee representatives on March 6, 2008. The Annual Shareholders’ Meeting was followed by the Supervisory Board’s constituent session, at which Dr. Peter-Alexander Wacker was appointed as the new Supervisory Board Chairman. Having reached the age limit for Supervisory Board members, the previous chairman, Dr. Karl Heinz Weiss, was not eligible for reelection.
Dr. Peter-Alexander Wacker stepped down as President & CEO of Wacker Chemie AG at the end of the Annual Shareholders’ Meeting on May 8, 2008. He also ceased to be a member of WACKER’s Executive Board.
Dr. Rudolf Staudigl became the new President & CEO at the end of the Shareholder Meeting on May 8, 2008. Dr. Staudigl has been a member of WACKER’s Executive Board since 1995. The Supervisory Board extended his contract for a further five years.
At its session on March 12, 2008, the Supervisory Board decided to appoint Dr. Wilhelm Sittenthaler as a further Executive Board member, likewise effective at the end of the Annual Shareholders’ Meeting on May 8, 2008. Dr. Wilhelm Sittenthaler was President & CEO of Siltronic AG, a wholly-owned subsidiary of Wacker Chemie AG. From 2000 to 2002, he had been a member of the Executive Board of Wacker-Chemie GmbH. His contract runs until 2013. At the same meeting, the Supervisory Board had also extended the contract of Executive Board member Auguste Willems by a further five years until 2013.
The Supervisory Board expresses its thanks to the Executive Board and to the company’s employees and employee representatives. Their efforts have helped achieve another successful year for Wacker Chemie AG.
Munich, March 12, 2009
The Supervisory Board
Dr. Peter-Alexander Wacker