Section 20 of Klöckner & Co SE’s Articles of Association contains provisions re- garding the annual financial statements of the Company as well as the appropria- tion of profits. The provision largely corresponds with Section 19 of Klöckner & Co AG’s Articles of Association, however, contains a change specifically relating to the SE. Additionally, the heading was adjusted as an editorial correction and instead of
“Annual Financial Statements and General Meeting” (the same as Section 19 of the Articles of Association of Klöckner & Co AG) now reads “Annual Financial State- ments and Appropriation of Profits”.
Section 20 para. (1) of Klöckner & Co SE’s Articles of Association corresponds largely unchanged with Section 19 para. (1) of Klöckner & Co AG’s Articles of As- sociation. It stipulates that in the first three months of the business year, the Man- agement Board must submit the annual financial statements and management re- port as well as the consolidated financial statements and group management report
for the business year ended to the Supervisory Board without undue delay after preparation. At the same time, the Management Board shall submit its proposal for the appropriation of the net retained profits to the Supervisory Board whereby the provisions set forth in Section 298 para. 3 and Section 315 para. 3 of the German Commercial Code shall remain unaffected.
However, Section 20 para. (2) of Klöckner & Co SE’s Articles of Association con- tains a deviation from Klöckner & Co AG’s Articles of Association. Firstly, the Man- agement Board, the same as set forth in Section 19 para. 2 of the Articles of Asso- ciation of Klöckner & Co AG, must convene the annual General Meeting without undue delay after receipt of the report of the Supervisory Board. However, the pro- vision that Klöckner & Co SE’s annual General Meeting must be held within the first six months of each business year is new. Klöckner & Co AG’s Articles of Associa- tion, on the other hand, provided that the annual General Meeting be held within the first eight months of each business year. The change is based on Art. 54 para. 1 of the SE Regulation, which stipulates that the General Meeting of an SE must be convened at least once per calendar year within six months of the end of the business year.
Sentence 2 of Section 20 para. (2) of Klöckner & Co SE’s Articles of Association is again identical to Section 19 para. (2) sentence 2 of Klöckner & Co AG’s Articles of Association and contains a non-exhaustive list of topics for resolution by the annual General Meeting. The annual General Meeting thus resolves, in particular, on the appropriation of the balance sheet profits, the choice of auditors as well as the for- mal approval of the actions of the Management Board and Supervisory Board. Section 20 para. (3) of the Articles of Association of Klöckner & Co SE corresponds entirely with Section 19 para. (3) of the Articles of Association of Klöckner & Co AG. According to this, in conjunction with the approval of the annual financial state- ments, the Management Board and the Supervisory Board are authorised to allo- cate all or parts of the annual surplus remaining after the deduction of the amounts to be allocated to the statutory reserves and the loss carry-forward, to other re- serves.
Section 20 para. (4) of the Articles of Association of Klöckner & Co SE provides that the balance sheet profits shall be distributed to the shareholders to the extent that the General Meeting does not resolve a different use. This corresponds with Section 19 para. (4) of the Articles of Association of Klöckner & Co AG.
Also Section 19 para. (5) of Klöckner & Co AG’s Articles of Association was also adopted with the same content in Section 20 para. (5) of Klöckner & Co SE’s Arti- cles of Association; this provision envisages that the General Meeting may also re- solve distributions in kind if the items to be distributed can be traded on a market within the meaning of Section 3 para. 2 of the German Stock Corporation Act. 6.2.21 Amendments to the Articles of Association (Section 21)
The wording of Section 21 of the Articles of Association of Klöckner & Co SE is largely the same as Section 20 of the Articles of Association of Klöckner & Co AG. According to this provision, the Supervisory Board is authorised to resolve on amendments to the Articles of Association which only concern the wording. Fur- thermore, it may adjust the Articles of Association to new statutory provisions which become binding for the Company without a resolution of the General Meeting being
required. However, the clarification that only the German text of the Articles of As- sociation shall prevail and the English text is only for information purposes was not adopted in Klöckner & Co SE’s Articles of Association because the English transla- tion of the Articles of Association of Klöckner & Co SE will be in a separate docu- ment which is only for information purposes in which it will be made clear sepa- rately that only the German version shall be decisive.