Report of the Supervisory Board

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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 transactions.

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 2021, in March, May, October, and December, as well as two extraordinary meetings in February and June. 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 with them in detail the business development and any important matters based on the reports from 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 transactions 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.

Meeting participation

Prof. D. Michael Albrecht did not attend the meeting of the Supervisory Board on March 16, 2021. Otherwise, all meetings of the Supervisory Board and its committees in 2021 were attended by all sitting members of the Supervisory Board of Fresenius SE & Co. KGaA or of the respective committee.

Participation in meetings of the Supervisory Board and its committees is reported individually for each member on the Company’s website. Information on this can be found under www.fresenius.com/supervisory-board.

Main focus of the Supervisory Board’s activities

In 2021, once again, the Supervisory Board mostly focused its monitoring and consulting activities on supporting 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
Medium-term planning of the Fresenius Group
Cost-cutting and efficiency-enhancing measures
Strategic orientation of the Fresenius Group and its business segments
Further development of the risk management and internal control system

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

At the meeting on February 19, 2021, the Supervisory Board approved the Supervisory Board remuneration system.

At its meeting on March 16, 2021, the Supervisory Board dealt in detail with the audit and approval of the financial statements and the consolidated financial statements (IFRS), as well as the management report and the Group management report of Fresenius SE & Co. KGaA. The results for 2020 were discussed on the basis of a detailed report provided by the Chairman of the Audit Committee and statements by the auditor, PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft, Frankfurt am Main. 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 2020. In addition, the business segments reported in detail on the course of business in the first two months of the fiscal year. Another topic of discussion was the Annual General Meeting of Fresenius SE & Co. KGaA, which was again held virtually due to the ongoing COVID-19 pandemic.

At its meeting on May 21, 2021, following the immediately preceding election of shareholder representatives at the Annual General Meeting, the Supervisory Board reconstituted itself. The Chairman and the two Deputy Chairmen of the Supervisory Board as well as the respective members and chairmen of the Audit Committee and the Nomination Committee were elected. The rules of procedure of the Supervisory Board were also amended. In addition, the Management Board reported to the general partner on business performance for the months January through April 2021.

The meeting of the Supervisory Board on June 17, 2021 focused on cost-cutting and efficiency-enhancing measures. In addition, at this meeting, the Supervisory Board conducted a self-assessment in accordance with Recommendation D.13 of the German Corporate Governance Code.

At the Supervisory Board meeting on October 14, 2021, the members of the Supervisory Board were informed in detail about business performance from January through September 2021. In addition, the progress of the planned cost-cutting and efficiency-enhancing measures, the observations on the strategic orientation of the Fresenius Group and its business segments, and the further development of risk management were reported on. The Supervisory Board also discussed the declaration of conformity with the German Corporate Governance Code.

At the meeting of the Supervisory Board on December 7, 2021, the Management Board reported to the general partner on the further progress of the planned cost-cutting and efficiency-enhancing measures. A further key topic of the meeting was the progress report on the strategic orientation of the Fresenius Group and its business segments. Furthermore, information was provided on plans for the years 2022 to 2024 for the Group and separately for all four business segments. The Management Board of the general partner reported on the business performance from January to October 2021. The Chairman of the Audit Committee reported in detail on the status of preparation of the financial statements. Furthermore, a resolution was passed on the declaration of conformity with the German Corporate Governance Code.

Corporate Governance

On December 20, 2021, the Supervisory Board of Fresenius SE & Co. KGaA and the Management Board of the general partner issued the declaration of conformity with the German Corporate Governance Code in accordance with Article 161 of the German Stock Corporation Act (AktG) and made it permanently available to the shareholders on the Company’s website. In March and October 2021, the Management Board of the general partner and the Supervisory Board of Fresenius SE & Co. KGaA decided to update the previous declaration of conformity from December 2020.

In 2021, the Chairman of the Supervisory Board of Fresenius SE & Co. KGaA was ready, to the extent permitted by law and in close consultation with the Management Board of the general partner, to hold discussions with investors on topics specific to the Supervisory Board. In October 2021, the Chairman of the Supervisory Board of Fresenius SE & Co. KGaA participated in a Corporate Governance Roadshow.

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 the past fiscal year.

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 in the Notes of the Annual Report.

Separate Group Non-financial Report

PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft, Frankfurt am Main, audited the separate Group Non-financial Report for 2021.

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 16 and 17, 2022, 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 17, 2022, the Supervisory Board approved the separate Group Non-financial Report presented by the general partner.

Work of the committees

In order to perform its duties efficiently, the Supervisory Board has formed various committees, which prepare the consultations and resolutions in the plenary session or can pass resolutions themselves. The committees of the Supervisory Board consist of an Audit Committee, a Nomination Committee, and a Joint Committee.

The Audit Committee held four meetings and four conference calls in the reporting year. The main focus of its monitoring activities was the preliminary audit of the annual financial statements and consolidated financial statement for 2020 and discussions with the auditor about their reports and the terms of reference of the audit. 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 2021. Following the recommendation of the Audit Committee, the Supervisory Board proposed to the 2021 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 2021 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.

The Audit Committee also dealt with the following items in detail:

the 2021 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 Pricewaterhouse-Coopers GmbH Wirtschaftsprüfungsgesellschaft, Frankfurt am Main.

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

Represented by the Chairman of the Audit Committee, there is a regular dialog between the Supervisory Board and the Audit Committee, on the one hand, and the auditor, on the other, even outside of meetings.

The Company’s Nomination Committee met three times in 2021. It dealt in particular with preparations for the election of the Supervisory Board in May 2021.

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 2021, no transactions were carried out that required its approval. Accordingly, the Joint Committee did not meet in 2021.

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

With the Annual General Meeting of Fresenius SE & Co. KGaA on May 21, 2021, the term of office of all members of the Company’s Supervisory Board ended.

The six shareholder representatives were re-elected at the Annual General Meeting on May 21, 2021. Mr. Wolfgang Kirsch was elected to the 12-member committee for the first time. Prof. D. Michael Albrecht, Mr. Michael Diekmann, Prof. Iris Löw-Friedrich, Mr. Klaus-Peter Müller, and Ms. Hauke Stars were all re-elected. Ms. Stephanie Balling, Mr. Bernd Behlert, Ms. Grit Genster, Ms. Frauke Lehmann, Mr. Konrad Kölbl, and Mr. Oscar Romero de Paco, all of whom had previously been members of the Supervisory Board, were elected as employee representatives on the European Works Council.

At its constituent meeting on May 21, 2021, the Supervisory Board elected Mr. Wolfgang Kirsch as Chairman of the Supervisory Board of Fresenius SE & Co. KGaA. Mr Kirsch succeeds Dr. Gerd Krick, who did not stand for re-election at the end of the election period and therefore retired from the Supervisory Board of Fresenius SE & Co. KGaA at the end of the Annual General Meeting on May 21, 2021. At the proposal of the shareholder representatives, Mr. Michael Diekmann, and at the proposal of the employee representatives, Ms. Grit Genster, were elected as Deputy Chairpersons of the Supervisory Board. At the same meeting, Ms. Grit Genster, Ms. Hauke Stars, Mr. Wolfgang Kirsch, Mr. Konrad Kölbl, and Mr. Klaus-Peter Müller were elected as members of the Audit Committee. Mr. Klaus-Peter Müller was elected Chairman of the Audit Committee. Furthermore, at the Supervisory Board meeting on May 21, 2021, Mr. Michael Diekmann, Mr. Wolfgang Kirsch, and Mr. Klaus-Peter Müller were elected as members of the Nomination Committee and Mr. Wolfgang Kirsch as its Chairman. By resolution of the Annual General Meeting of May 21, 2021, Ms. Hauke Stars and Mr. Michael Diekmann were appointed members of the Supervisory Board of the Company in the Joint Committee. The general partner Fresenius Management SE delegated Mr. Wolfgang Kirsch and Dr. Dieter Schenk as members of the Joint Committee and appointed Dr. Dieter Schenk as Chairman of the Joint Committee. In appreciation and recognition of his decades of meritorious service to Fresenius, Dr. Gerd Krick was appointed Honorary Chairman of the Supervisory Board of Fresenius SE & Co. KGaA.

The composition of the Management Board of the general partner Fresenius Management SE also changed in the past financial year. As of April 12, 2021, Mr. Michael Sen was appointed as a member of the Management Board of Fresenius Management SE for the business segment Fresenius Kabi. He follows Mr. Mats Henriksson, who left the Company on March 16, 2021.

Financial statements and consolidated financial statements

PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft, Frankfurt am Main, audited the annual financial statements and the management report as well as the consolidated financial statements and the Group management report of the Company for 2021. The firm was elected as auditor in accordance with a resolution passed at the Annual General Meeting of Fresenius SE & Co. KGaA on May 21, 2021, 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 annual financial statement, management report, and Group management report of the Company were prepared in accordance with the accounting regulations of the German Commercial Code (HGB), and the consolidated financial statements of the Company were prepared in accordance with IFRS, as applicable in the EU, and the supplementary provisions of commercial law applicable in accordance with Article 315e of the HGB. The auditors 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 16 and 17, 2022. 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 17, 2022, the Supervisory Board approved the financial statements and management reports presented by the general partner and the statements contained therein with respect to future development.

The Supervisory Board concurs with the general partner’s proposal on the 2021 profit distribution, according to which the shareholders may choose to receive the dividend, which has been increased to €0.92, either in cash or partly in the form of shares of the Company.

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

Bad Homburg v. d. H., March 17, 2022

The Supervisory Board of Fresenius SE & Co. KGaA

Wolfgang Kirsch
Chairman