Report of the Supervisory Board

In 2020, the Supervisory Board of Fresenius SE & Co. KGaA fulfilled its obligations in accordance with the provisions of the law, the articles of association and the rules of procedure. It regularly advised the Management Board of the general partner, Fresenius Management SE, on the management of the Company. It also monitored the management as part of its responsibilities as Supervisory Board.

Dr. Gerd Krick Chairman of the Supervisory Board

Cooperation between the management and the supervisory board

Carrying out its monitoring and advisory activities, the Supervisory Board was regularly kept informed by the management in a timely and comprehensive oral and written manner about, among other things:

  • all important matters relating to business policy
  • the course of business
  • profitability
  • the situation of the Company and of the Group
  • corporate strategy and planning
  • the risk situation
  • risk management and compliance and
  • important business events.

Based on the reports provided by the Management Board of the general partner, the Supervisory Board discussed all significant business transactions in the Audit Committee and in its plenary meetings, depending on their areas of responsibility. The Management Board of the general partner discussed the Company’s strategic direction with the Supervisory Board. The Supervisory Board passed resolutions within its legal and company statutory authority.

The Supervisory Board of Fresenius SE & Co. KGaA convened for four regular meetings in 2020 – in March, May, October and December. Before the meetings, the Management Board of the general partner sent detailed reports and comprehensive approval documents to the members of the Supervisory Board. At the meetings, the Supervisory Board discussed in detail the sales and earnings growth and decisions of importance to the Company, based on the reports provided by the general partner’s Management Board.

All matters requiring Supervisory Board approval were submitted with sufficient time for proper scrutiny. After reviewing the related approval documents and following detailed consultation with the Management Board of the general partner, the Supervisory Board approved all matters submitted to it.

The Supervisory Board was also informed about any important business events occurring between meetings. In addition, the Chairman of the general partner’s Management Board regularly informed the Chairman of the Supervisory Board in separate meetings about the latest devel­opment of the business and forthcoming decisions and discussed them with him.

All meetings of the Supervisory Board and its committees in 2020 were attended by all current members of the Supervisory Board of Fresenius SE & Co. KGaA or of the respective committee.

Participation in meetings of the Supervisory Board and the Audit Committee is reported individually for each member on the Company’s website. Information on this can be found under “Supervisory Board”.

Main focus of the supervisory board’s activities

In 2020, the Supervisory Board mostly focused its monitoring and consulting activities on business operations and investments carried out by the business segments. The Supervisory Board thoroughly reviewed and discussed all business activities of significance to the Company with the Management Board of the general partner. The Supervisory Board also dealt with the following items:

  • budget for 2021
  • medium-term planning of the Fresenius Group
  • business segment strategies (particularly the business outlook for Fresenius Medical Care and Fresenius Helios)
  • FCPA monitor at Fresenius Medical Care
  • Management and Supervisory Board remuneration system

At its meetings and within the Audit Committee, the Supervisory Board also kept itself regularly informed about the Group’s risk situation and risk management activities as well as compliance.

At the meeting on March 12, 2020, the Supervisory Board dealt in detail with the audit and approval of the financial statements, the consolidated financial statements (IFRS) as well as the management report and the Group management report of Fresenius SE & Co. KGaA. The results for 2019 were discussed on the basis of a detailed report provided by the Chairman of the Audit Committee and statements by the auditor. At the same meeting, a resolution was passed on profit distribution proposed by the general partner, Fresenius Management SE and the separate Group Non-financial Report for 2019. In addition, the business segments reported in detail on the course of business in the first two months of the fiscal year. The focus was on Fresenius Medical Care. Another item discussed was the agenda of the Annual General Meeting of Fresenius SE & Co. KGaA, which was planned for May 20, 2020. Finally, the Supervisory Board conducted its annual efficiency review at this meeting.

At its meeting on May 20, 2020, the Supervisory Board elected Ms. Grit Genster as Deputy Chairwoman of the Supervisory Board and as a member of the Audit Committee. In addition, the Management Board reported on business performance for the months January through April 2020. The focus was on the consequences of the COVID-19 pandemic. The Supervisory Board also discussed the holding of the Annual General Meeting, which was postponed due to the COVID-19 pandemic.

At the Supervisory Board meeting on October 13, 2020, the members of the Supervisory Board were informed in detail about business performance from January through September 2020. The focus was on the Fresenius Helios business segment. Information was also provided on the declaration of conformity with the German Corporate Governance Code.

The meeting of the Supervisory Board on December 3, 2020, focused on the development of business in 2020. In addition, plans for the years 2021 to 2023 for the Group and separately for all four segments were also presented and discussed in detail. The Chairman of the Audit Committee reported in detail on the status of preparation of the financial statements. In addition, the Supervisory Board dealt with the Management Board remuneration system. Furthermore, a resolution was passed on the declaration of conformity with the German Corporate Governance Code.

Corporate Governance

On December 20, 2020, the Supervisory Board and the Management Board of the general partner jointly issued a Declaration of Conformity in accordance with the German Corporate Governance Code under Section 161 of the German Stock Corporation Act (AktG).

The Management Board of the general partner and the Supervisory Board of Fresenius SE & Co. KGaA have a duty to act in the best interests of the Company. In performing their activities, they do not pursue personal interests or bestow unjustified benefits on others. Any secondary activities or dealings with the Company by members of the corporate bodies must immediately be reported to, and approved by, the Supervisory Board.

There were no conflicts of interest of Supervisory Board members in 2020.

There are regular separate preliminary meetings of the employee representatives and consultations among the shareholder representatives.

The members of the Supervisory Board independently undertake necessary training and further education measures required for their tasks. They keep themselves regularly informed, through internal and external sources, about the latest requirements with regard to their supervisory activities. The Supervisory Board at all times ensures that its members are suitably qualified, keep their professional knowledge up to date and further develop their judgment and expertise. They are supported appropriately by the Company in accordance with the Code. External experts as well as experts from the Company provide information about important developments, for example about relevant new laws and precedents or changes in the IFRS accounting and auditing standards. In addition, the Company holds an onboarding event for new members of the Supervisory Board.

For more information on Corporate Governance at Fresenius, please see the Corporate Governance Declaration. Fresenius has disclosed the information on related parties in the Notes of the Annual Report.

Seperate Group Non-financial Report

PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft, Frankfurt am Main, audited the separate Group Non-financial Report for 2020.

The separate Group Non-financial Report and the audit report of the appointed auditor were made available to each member of the Supervisory Board of the Company in good time. At their meetings on March 15 and 16, 2021, the Audit Committee and then the Supervisory Board discussed all the documents in detail.

The auditor delivered a detailed report on the results of the audit at each of these meetings. The Audit Committee and the Supervisory Board approved the auditor’s findings. The Audit Committee’s and the Supervisory Board’s own review also found no objections to the separate Group Non-financial Report. At its meeting on March 16, 2021, the Supervisory Board approved the separate Group Non-financial Report submitted by the general partner.

Work of committees

The Audit Committee held three meetings in the reporting year. It also held four teleconferences. The focus of its mon­itoring activities was on the preliminary audit of the annual financial statements and the consolidated financial statements for 2019. It also discussed the audit reports and the focal points of the audit with the auditor. Another matter dealt with by the Audit Committee was its recommendation to the Supervisory Board regarding which auditing firm to propose as auditor for the annual financial statements and consolidated financial statements for 2020. The Supervisory Board has proposed to the 2020 Annual General Meeting that PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft, Frankfurt am Main, be elected as auditors of the annual financial statements and auditors of the consolidated financial statements for 2020 and as auditors for any review of interim financial information within the meaning of Section 115 (7) of the German Securities Trading Act (WpHG) that is prepared before the 2021 Annual General Meeting.

This proposal was based on a recommendation to this effect by the Audit Committee. The Audit Committee also dealt with the following items in detail:

  • the 2020 quarterly reports
  • assessment of the quality of the audit
  • monitoring reports on progress of acquisitions
  • compliance and internal audit
  • review of the risk management system, the internal control system, and the internal auditing system and
  • approval of non-audit services by KPMG AG Wirtschaftsprüfungsgesellschaft, Berlin, and Price­waterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft, Frankfurt am Main.

The Chairman of the Audit Committee reported regularly in subsequent Supervisory Board meetings on the work of the committee.

The Chairman of the Audit Committee maintains a regular dialog between the Supervisory Board and the Audit Committee, on the one hand, and auditors on the other, even outside of meetings.

The Company’s Nomination Committee did not meet in 2020.

The Joint Committee is responsible for approving certain important transactions of Fresenius SE & Co. KGaA and certain legal transactions between the Company and the Else Kröner-Fresenius-Stiftung. In 2020, no transactions were carried out that required its approval. For this reason, the Joint Committee did not meet in 2020.

There is no Mediation Committee because the Super­visory Board of Fresenius SE & Co. KGaA does not appoint the Management Board members of Fresenius Management SE.

For more information about the committees, their compo­sition and their work methods, please refer to the Corporate Governance Declaration.

Personnel

Dr. Karl Schneider resigned from the Joint Committee as of December 31, 2019. Mr. Klaus-Peter Müller was appointed his successor with effect from January 1, 2020. Mr. Niko Stumpfögger resigned from the Supervisory Board and the Audit Committee as of April 30, 2020. Ms. Grit Genster succeeded him on the Supervisory Board with effect from May 1, 2020, and on the Audit Committee with effect from May 20, 2020. Dr. Jürgen Götz resigned from the Management Board of the general partner Fresenius Management SE as of June 30, 2020. Dr. Sebastian Biedenkopf was appointed to the Management Board effective December 1. Otherwise, there were no changes to the composition of the Management Board of the general partner Fresenius Man­agement SE and the Supervisory Board of Fresenius SE & Co. KGaA and its committees in 2020.

Financial statements and consolidated financial statements

PricewaterhouseCoopers GmbH Wirtschaftsprüfungsge­sellschaft, Frankfurt am Main, audited the accounting records, the annual financial statements and the Company’s management report and the consolidated financial statement, and the Group management report for 2020. The firm was elected as auditor in accordance with a resolution passed at the Annual General Meeting of Fresenius SE & Co. KGaA on August 28, 2020, and was subsequently commissioned by the Supervisory Board. The auditor attended all meetings of the Supervisory Board and all meetings and conference calls of the Audit Committee.

The Company’s financial statements, management report and Group management report were prepared in accordance with the accounting principles of the German Commercial Code (HGB) and the consolidated financial statements were prepared in accordance with IFRS accounting principles, as applicable in the EU, and with the regulations governing such statements under Section 315e of the German Commercial Code (HGB). The auditors of KPMG issued their unqualified audit opinion for these statements.

The financial statements, the consolidated financial statements, the management reports and the auditor’s reports were submitted to each member of the Company’s Super­visory Board within the required time. The auditor reported on the main results of their audits at the meetings on March 15 and 16, 2021. The auditor found no weaknesses in the risk management system or the internal control system with regard to the accounting process. At these meetings, first the Audit Committee and then the Supervisory Board discussed in detail all the documents submitted and the results of the audit presented by the auditors.

The Audit Committee and the Supervisory Board approved the auditor’s findings. Independent reviews by the Audit Committee and the Supervisory Board raised no objections to the Company’s financial statements and management report or the consolidated financial statements and the Group management report. At its meeting on March 16, 2021, the Supervisory Board approved the financial statements and management reports submitted by the general partner. It also approved the statements they contained on the future development of the Company.

The Supervisory Board concurs with the general partner’s proposal for the 2020 profit distribution.

The Supervisory Board would like to thank the members of the Management Board of the general partner and all employees for their achievements.

Bad Homburg v. d. H., March 16, 2021

The Supervisory Board of Fresenius SE & Co. KGaA

Dr. Gerd Krick
Chairman

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Fresenius SE & Co. KGaA
Else-Kröner-Str. 1
61352 Bad Homburg v.d.H.
Germany
T +49 (0) 6172 608-2294
pr-fre@fresenius.com

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