Every day counts - Deutsche Beteiligungs AG

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REPORT OF THE SUPERVISORY BOARD
In financial year 2002/2003, the Supervisory Board regularly fulfilled the assignments
and responsibilities imposed by law and by the Articles of Association and monitored the
Company’s position and progress. The Supervisory Board supported the Board of Management
in an advisory capacity concerning its intended business policy and other fundamental
issues regarding the future conduct of the Company’s business, and oversaw
the management of the Company’s business. The Supervisory Board was kept informed,
both verbally and in writing, about significant business transactions.
In six meetings, the Supervisory Board extensively dealt with the Company’s position,
with completed and proposed investments and sales, the annual financial statements,
the monitoring of existing investments, personnel issues relating to the Board of Management,
and the Board of Management’s risk management and surveillance system.
The Supervisory Board reviewed significant business transactions and made decisions on
transactions requiring its endorsement.
The Supervisory Board directed particular attention to the furtherance of corporate
governance practices and actively participated in developing the Declaration of Conformity
to the German Corporate Governance Code. In some instances, the Board changed
its rules of procedure to meet the recommendations and suggestions of the Code.
Between regular meetings, the Chairman of the Supervisory Board maintained close
contact with the Board of Management concerning the Company’s business development
and specific portfolio companies. The Supervisory Board received reports on these issues
(item 5.2 of the German Corporate Governance Code).
The Executive Committee, consisting of the Chairman and the Vice Chairman of the
Supervisory Board and Dr. Binder, convened four times this past financial year. The Chairman
of the Supervisory Board has the chair on the Executive Committee. This Committee
is a consultant to the Supervisory Board on personnel issues regarding the Board of
Management; it is responsible for employment contracts of the members of the Board
of Management and amendments to such contracts.
In addition to the Executive Committee, the Supervisory Board had resolved to form
an Audit Committee. The Audit Committee consists of six members of the Supervisory
Board; a minimum of three members forms a quorum. Prof. Rolf-Dieter Leister has the
chair. The Audit Committee, in particular, dealt with issues concerning the accounting
and the risk management, the required independence of the auditors, the commissioning
of the audit assignment to the auditors, the determination of focal points of the audit
and audit fees. The Audit Committee had no objections to raise to the Company’s current
practice.
In financial year 2002/2003, the Supervisory Board developed methods to evaluate its
own work and has implemented these methods for the first time beginning this current
financial year (item 5.6 of the Code). The remuneration of the Supervisory Board members,
which, in addition to fixed emoluments, is linked to dividends paid, is planned to
be converted to a new system (item 5.4.5 of the Code); a recommendation will be presented
to shareholders at the 2004 Annual Meeting.