Corporate Governance
The German Corporate Governance Code adopted in February 2002, in the current version of 14 June 2007, contains recommendations and suggestions for managing and supervising listed companies in Germany, with reference to shareholders and the General Shareholders’ Meeting, the Management Board, the Supervisory Board, and to transparency, accounting policies and auditing. There is no obligation to comply with the recommendations and suggestions of the Code. The German Stock Corporation Act merely requires the Management Board and Supervisory Board of a listed company to make an annual declaration of which recommendations were not or are not being implemented. However, it is possible to depart from the suggestions contained in the Code without disclosure.(www.corporate-governance-code.de)
Compliance statement according to sec. 161 AktG (German stock corporation Act)
ZhongDe Waste Technology AG complies with the recommendations of the German Corporate Governance Code as amended on 14 June 2007 with the following variations:
As the members of the Management Board of ZhongDe Waste Technology AG have service agreements solely with the Chinese operational Company Fujian FengQuan Environmental Protection Equipment Ltd. but no service agreements with the company, the recommendations under section 4.2.2 and section 4.2.3 of the German Corporate Governance Code do not apply.
As there exists no stock option plan with the company, the recommendation under section 4.2.5 para. 2 of the German Corporate Governance Code does not apply.
As the Company’s supervisory board comprises only three members and no committees exist, the recommendations under section 5.2 para. 2, section 5.3.1 and section 5.3.2 do not apply.
As the Company’s Supervisory Board now only receives a fixed compensation, the Company deviates from the recommendation under section 5.4.7 para. 2 of the German Corporate Governance Code.
As the D&O insurance contracts for the members of the Management Board and the Supervisory Board of the company do not provide for a deductible, the company deviates from the recommendation under section 3.8 para. 2 of the German Corporate Governance Code.
In its first fiscal year after the Company’s IPO, the Company will presumably not precisely meet the 45 day timeline as recommended under section 7.1.2 sentence 2 of the German Corporate Governance Code. However, the Company aims to meet this deadline in the near future.
Hamburg, 4 July 2008
ZhongDe Waste Technology AG
Management Board
Supervisory Board
Investor Relations
