Nabaltec_E_GB2016

14 REPORT OF THE SUPERVISORY BOARD in written reports as well. In particular, the Supervisory Board was notified of market trends, the risk and competitive situation, the development of sales, revenues and earnings and the degree to which projections were met in monthly and quarterly reports. To this end, the Chairman of the Supervisory Board maintained a close and routine exchange of information and thoughts with the Management Board. The following issues were the subject of particularly intensive consideration by the full Super- visory Board in Financial Year 2016: the proposal for the appropriation of distributable profit; ■ the 2015 annual financial statements and consolidated financial statements including ■ the composition of the Management Board as of 2016/2017; ■ corporate governance, particularly the goals for composition of the Supervisory Board; ■ the situation of the US subsidiary Nashtec LLC and the preparation of a stand-alone ■ planning for 2017 and mid-term planning through 2019; ■ solution; investment and financing planning for 2017–2019. The goals and realization status of innovative projects, the effectiveness of the risk manage- ment system, the accounting process in Nabaltec AG and Nabaltec Group, as well as the moni- toring of the internal controlling system were also focuses of the Supervisory Board’s work in Financial Year 2016. The joint 2016 Declaration of Compliance was permanently made available to shareholders on the company's website On 4 March 2016, the joint 2016 Declaration of Compliance with the German Corporate Governance Code was issued by the Supervisory Board and Management Board and has been permanently made available for shareholders on the company’s website, www.nabaltec.de. The recommendations of the German Corporate Governance Code as of 5 May 2015 were the subject of intensive discussion in both bodies. Further information about corporate governance at Nabaltec AG can be found in the Corporate Governance Report on the company’s website, www.nabaltec.de, in the Investor Relations/Corporate Governance section. 2016 ANNUAL FINANCIAL STATEMENTS AND CONSOLIDATED FINANCIAL STATEMENTS Deloitte GmbH Wirtschaftsprüfungsgesellschaft, Nuremberg, has audited the annual finan- cial statements and management report of Nabaltec AG, which were prepared in accordance with the German Commercial Code, as well as the consolidated financial statements, which were prepared based on the IFRS (International Financial Reporting Standards) pursuant to § 315a of the German Commercial Code, and the consolidated management report, each for 31 December 2016, and has issued an unqualified auditor’s opinion. The Supervisory Board engaged the auditor in accordance with the resolution of the Annual General Meeting of 30 June 2016. The auditor’s independence declaration was obtained by the Supervisory Board in advance pursuant to Section 7.2.1 of the German Corporate Govern- ance Code. No circumstances were evident which established doubts as to the auditor’s independence. Moreover, the auditor was obligated to immediately notify the Supervisory Board of circumstances which could establish a bias on its part and to report any services it performed in addition to the audit. The focus of the audit for Financial Year 2016 was set on “capitalization of fixed assets” and “valuation of Nashtec LLC.” |||| Nabaltec AG | Annual Report 2016

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