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ANNUAL REPORT 2014 53Deutsche EuroShop INVESTOR RELATIONS Dear Shareholders, Report of the Supervisory Board During financial year 2014, the SupervisoryBoardperformedthedu- ties incumbent on it according to the law and the Articles of Association and closely oversaw the performance of Deutsche EuroShop AG. The stra- tegic orientation of the Company was coordinated with the Supervisory Board, and the status of the strat- egy implementation was discussed at regular intervals. The Supervisory Board monitored and advised the Ex- ecutive Board on its management of the business, and the Executive Board informed us regularly, promptly and in detail of business developments. Dr Michael Gellen, who had served on the Board for some twelve years, and Dr Bernd Thiemann, who had served for around ten years, end- ed their membership of the Super- visory Board of our company at the Annual General Meeting on 18 June 2014. Both had closely overseen and supported the development of Deutsche EuroShop AG. The Super- visory Board thanked Dr Gellen and Dr Thiemann for their many years of commitment and wished them all the best for the future. Focus of advisory activities We conducted detailed examinations of the Company’s net assets, finan- cial position, results of operations, and risk management at our regular meetings. In this context, we also checked that the formal conditions for implementing an efficient system of monitoring our Company were met and that the means of super- vision at our disposal were effective. We were informed on an ongo- ing basis of all significant factors af- fecting the business. We considered the development of the portfolio properties, specifi- cally their turnover and frequency trends, the accounts receivable and occupancy rates, and the Company’s liquidity position. As the mandates of four members of the Supervisory Board expired in 2014 or will expire in 2015, we discussed our succes- sion ideas and made preparations for the Board’s future composition. The Company’s strategy was discussed in depth at the meeting on 18 June 2014 as well as the question of how the Company should operate in an environment of low interest rates and extremely high demand for re- tail property. Regular discussions were conducted with the Executive Board regarding trends on the capital, credit, real estate and retail markets and the effects of these on the Com- pany’s strategy. The Executive Board and Supervisory Board examined var- ious investment options. We received regular reports detailing the turnover trends and payment patterns of our tenants and banks’ lending policies. The Chairman of the Superviso- ry Board and the Executive Commit- tee of the Supervisory Board also dis- cussed other topical issues with the Executive Board as required. Trans- actions requiring the approval of the Supervisory Board were discussed and resolved upon at the scheduled meetings. Where required, circular resolutions were passed in writing during the meetings by the Super- visory Board for transactions of the Executive Board requiring approval. All resolutions in the reporting pe- riod were passed unanimously. On 8 July 2014 we appointed Mr Wilhelm Wellner as Chairman of the Board with effect on 1 Febru- ary 2015. Mr Wellner will succeed Mr Böge and take over his duties as Executive Board Spokesman on 1 July 2015. Mr Wellner’s term will expire on 30 June 2018. Meetings Four scheduled Supervisory Board meetings and one unscheduled meeting took place during financial year 2014. At each of the meetings held on 23 April 2014, 24 Septem- ber 2014 and 26 November 2014, one member of the Supervisory Board was excused from attending. At the first scheduled meeting, on 23 April 2014, the Supervisory Board’s annual review of efficiency was completed and the agenda for the Annual General Meeting was ap- proved. We selected the auditor, who was proposed to the shareholders for election. In relation to the audit of the annual financial statements, we continuation > Manfred Zaß Chairman of the Supervisory Board Declaration of conformity In November 2014, the Executive and Supervisory Boards of the Company jointly submitted their updated declaration of conformity with the recommendations of the Government Commission on the German Corporate Governance Code for financial year 2014 in accordance with section 161 of the Aktiengesetz (AktG – German Public Companies Act). The declaration was made permanently available to the public on the Company’s website at www.deutsche-euroshop.de. Joint declaration by the Executive and Supervisory Boards of Deutsche EuroShop AG relating to the recommendations of the Government Commission on the German Corporate Governance Code in accordance with section 161 AktG The Executive Board and the Supervisory Board of Deutsche EuroShop AG declare that the Company has complied with, and will continue to comply with, the recommendations of the Government Commission on the German Corporate Governance Code (as published by the German Federal Min- istry of Justice in the official section of the electronic Ger- man Federal Gazette (Bundesanzeiger) on 4 July 2003, and as amended on 24 June 2014), subject to a limited number of exceptions as indicated below: • The existing D&O insurance policy taken out for the Supervisory Board does not provide for any deductible (Section 3.8). The Executive and Supervisory Boards of Deutsche EuroShop AG have acted in a responsible manner, manag- ing and supervising the Company in line with the princi- ples of creating enterprise value ever since the Company was established, preceding the official introduction of corporate governance guidelines. The Company therefore takes the view that the agreement of a deductible was not necessary, in particular as this had no effect on the level of the insurance premium. • The Supervisory Board did not select a senior management team for a comparison of compensation (German Corporate Governance Code Section 4.2.2). Since the staff of Deutsche EuroShop AG consists of just four people, a differentiation between these and a senior management team would not be meaningful. In this re- spect, only the relationship between the compensation paid to the Executive Board and that paid to the overall staff can be considered by the Supervisory Board. • There is no stipulated age limit for members of the Executive Board (Section 5.1.2). The Supervisory Board believes that professional qualifi- cations and skills represent the key criteria for members of the Executive Board. An age limit could force the re- tirement of a suitably qualified and successful Executive Board member. • There is no stipulated age limit for members of the Supervisory Board (Section 5.4.1). The Supervisory Board believes that professional qualifi- cations and skills represent the key criteria for members of the Supervisory Board. An age limit could force the re- tirement of a suitably qualified and successful Supervisory Board member. Thus, there is no stipulated age limit, but board members should not be significantly older than 70. • The consolidated financial statements are published within 120 days of the end of the financial year (Section 7.1.2). It is important to the Company to publish audited financial statements that have been approved by the Supervisory Board. An earlier publication date is not feasible due to the schedules for the preparation, auditing and adoption of the financial statements. Unaudited data of relevance to the capital market is published in advance. Hamburg, 27 November 2014 The Executive Board and the Supervisory Board Deutsche EuroShop AG