Every day counts - Deutsche Beteiligungs AG

For instance, the special accounting principles of the International Financial Reporting
Standards (IFRS) that apply to us as a so-called investment company had not yet been
adapted by November 2003, at the beginning of the new financial year. For the time
being, we will therefore continue to base our accounting on the principles of the German
Commercial Code. In anticipation of the transition to the IFRS, we do, however, report
portfolio valuations semi-annually determined in conformity with valid IFRS fair-value
principles, thereby giving material insights as would be disclosed by IFRS-formatted
accounting.
The Code also requires publishing a list of third-party companies, stating, among other
things, the amount of equity and operating results for the last financial year. We can
only conditionally follow this recommendation. Frequently, confidentiality is a contractual
stipulation with our business partners. Without this confidentiality, many private equity
transactions would not be possible.
We are closely following the Corporate Governance debate. We will adapt our own
practice – for instance, our position on recommendations made in the Code with which
we currently do not comply – should we feel that the circumstances call for this.
Strict insider guidelines
A key factor for success is the performance and motivation of our staff. In 2002,
Deutsche Beteiligungs AG installed a stock option program which is limited to the
members of the Board of Management and a selected group of key employees. The
Company also offers an employee stock ownership that allows the staff to purchase
stock once a year and share in the Company’s long-term performance. Outside these
programs, members of the staff are not permitted to purchase shares of Deutsche
Beteiligungs AG.
We cannot ensure that employees will not possibly gain access to information that
may influence the share price movement – such as an upcoming change in the portfolio.
The trading prohibition is designed to improve transparency and avoid misunderstandings.
Currently-owned shares and those acquired in the future through employees’ stock
ownership programs may only be sold during specified exercise periods that are linked
to the publication of corporate reports. Exercise periods are a certain number of days of
trading following the Annual Meeting and the publication of the annual financial statements
and the quarterly reports.
Employees are also prohibited from dealing in stocks of companies in the portfolio of
Deutsche Beteiligungs AG or of companies undergoing the due diligence process.
Deutsche Beteiligungs AG · Annual Report 2002/2003
Corporate Governance Report
Accounting remains based on
German Commercial Code
The exact exercise periods are
disclosed on our web site at
www.deutsche-beteiligung.de
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