(1) The management board is to report to the supervisory board on the following topics:
1. the business policy it intends to pursue and other fundamental matters of corporate planning (in particular financial planning, investment planning and human resources planning), in which context any instances are to be addressed in which actual developments deviate from the targets previously reported and the reasons therefor are to be provided;
2. the company’s profitability, in particular the return on equity;
3. the course of business, in particular the sales of the company, and its economic situation;
4. transactions that may have a significant impact on the profitability or liquidity of the company.
Where the company is a parent undertaking (section 290 (1), (2) of the Commercial Code), the report also is to address subsidiary undertakings and joint ventures (section 310 (1) of the Commercial Code). Furthermore, a report also is to be submitted to the chairperson of the supervisory board on the occasion of other important events; a business process ongoing at an affiliated enterprise of which the management board has become aware and which is suited to significantly influence the economic situation of the company likewise is to be regarded as an important event occasioning such a report.
(2) The reports pursuant to subsection (1) sentence 1 nos. 1 to 4 are to be submitted as follows:
1. the reports set out in no. 1: at least once a year, unless changes of the situation or new issues mandate that a report be submitted without undue delay;
2. the reports set out in no. 2: at the meeting of the supervisory board at which the annual financial statements are deliberated;
3. the reports set out in no. 3: regularly, at least once per quarter;
4. the reports set out in no. 4: if possible, in such good time that the supervisory board has the opportunity to state its position prior to the transactions in question being entered into.
(3) The supervisory board may demand at any point in time that the management board submit a report to it concerning matters of the company, its legal and business relations with affiliated enterprises, as well as business processes ongoing at these enterprises that are suited to significantly influence the economic situation of the company. An individual member likewise may demand that such a report be submitted, however, the addressee will be solely the supervisory board.
(4) The reports are to comply with the principles of conscientious and faithful accounting. They are to be submitted in as good a time as possible and, to the exception of the report set out in subsection (1) sentence 3, as a rule are to be provided in text form.
(5) Each member of the supervisory board is entitled to obtain knowledge of the reports. Insofar as the reports have been submitted in text form, they also will be transmitted to each member of the supervisory board upon a corresponding demand being made, unless the supervisory board has resolved otherwise. The chairperson of the supervisory board is to notify the members of the supervisory board concerning the reports pursuant to subsection (1) sentence 3 at the latest at the next meeting of the supervisory board.