Report of the Supervisory Board

First Sensor AG can look back on a successful financial year. The key financial ratios clearly show initial results of the measures relating to the strategic and organizational realignment of First Sensor AG. The new organization makes it possible to address customer requirements in more depth, utilize cross-selling potential and achieve significant cost savings from the improvements in efficiency by streamlining processes. With the new corporate structure and the created business units, the foundations for further growth and a successful future for the Group are in place.

In the reporting year, the Supervisory Board fulfilled its duties as prescribed by law, the articles of incorporation and the rules of procedure. It regularly advised the Management Board in the course of its management of the company, and constantly reviewed and monitored its activity. In addition, it was directly involved in all decisions of strategic and fundamental importance to the company. The Management Board regularly notified the Supervisory Board – verbally and in writing – of the current business situation, status of strategy implementation and restructuring of organizational procedures and processes. Matters relating to the risk position, risk management and compliance were also dealt with. Deviations from planning and changes to targets in relation to the internally forecast business development and measures derived therefrom were communicated to the Supervisory Board as the monitoring body, which then discussed them with the Management Board. All relevant information was passed on promptly and extensively to the Supervisory Board.

Six meetings, including one continued by telephone, and one telephone meeting were held in the last financial year. All the members of the Supervisory Board attended all meetings. In particular, topics such as current business development, the corporate strategy, the realignment of Group structures and the resultant sales and return potential as well as cost savings through efficiency improvements were discussed at the Supervisory Board meetings. These topics were discussed at all meetings of the Supervisory Board. There were also other focal points at the meetings:

At the meeting on February 13, 2014, the members of the Supervisory Board discussed and approved the 2014 budget and the medium-term plan. Furthermore, an early contract extension for CFO Joachim Wimmers was agreed. In addition, the remuneration system of the Management Board and the appropriateness of the remuneration paid to the members of the Management Board were also examined.

The main points of discussion at the Supervisory Board meeting held on March 25, 2014 were the consolidated financial statements and the annual financial statements of the limited company for financial year 2013. In addition, we dealt with the contents of the German Corporate Governance Code and coordinated and approved the declaration of compliance pursuant to Article 161 of the German Stock Corporation Act (AktG) at this meeting.

At the meeting on May 22, 2014, the members of the Supervisory Board prepared for the forthcoming Annual General Meeting and reached agreement on the individual agenda items. Following the Annual General Meeting on May 23, 2014, the members of the Supervisory Board held an extraordinary meeting and confirmed Götz Gollan as the Deputy Chairman of the Supervisory Board. The consultancy work of Marc de Jong was also discussed. As a result, it was confirmed that his consultancy services are in line with his Supervisory Board work and do not constitute any conflict.

The takeover bid by FS Technology Holding S.à.r.l. was discussed in detail in an extraordinary meeting on July 31, 2014. In this telephone meeting, the Supervisory Board was informed of the current status of the takeover bid. This took place in the presence of external capital-market consultants and specialists in capital-market law. In connection with this, the joint statement by the Management Board and Supervisory Board pursuant to Article 27 of the German Securities Acquisition and Takeover Act (WpÜG) was extensively discussed and coordinated, and its publication was approved.

In particular, the strategic alignment of the First Sensor Group was presented by the heads of the business units, the head of the Production Competence Center and the head of sales during the ordinary Supervisory Board meeting on September 2, 2014. This meeting was continued by telephone on October 15, 2015.

The Supervisory Board meeting on December 2, 2014 mainly centered on various strategic topics and budget planning for 2015. In addition, the successful implementation of the harmonization of HR standards was reported on.

In addition to the scheduled meetings, a range of meetings were held between the Management Board and the Chairman and other members of the Supervisory Board. No separate committees were formed.

 An efficiency review of the Supervisory Board’s activity was conducted using a standardized process of Ebner Stolz Wirtschaftsprüfung GmbH & Co. KG. This did not give rise to any anomalies or clear need for improvement.

As per statutory regulations, the auditors Ebner Stolz GmbH & Co. KG Wirtschaftsprufungsgesellschaft Steuerberatungsgesellschaft, Hanover, were appointed by the Annual General Meeting on May 23, 2014 to audit the annual financial statements and the consolidated financial statements. Prior to submitting a proposal for appointment, the Supervisory Board obtained a declaration of independence from the auditors.

The financial statements and management report of First Sensor AG prepared by the Managing Board according to the principles of the German Commercial Code (HGB), as well as the consolidated financial statements and the consolidated management report prepared according to the accounting standards of the International Financial Reporting Standards (IFRS) for the fiscal year 2014, including the accounting, have been audited by Ebner Stolz GmbH & Co. KG Wirtschaftsprufungsgesellschaft Steuerberatungsgesellschaft, Hanover, and granted an unqualified audit opinion.

Throughout the entire auditing process, the Supervisory Board worked closely together with the Management Board and the auditor. The Supervisory Board received all final documentation relating to the annual financial statements of the limited company and the Group, the Management Board’s proposal on the appropriation of net profit, and the longform audit reports from the auditor before its meeting on March 25, 2015 and had access to it during the meeting. The above-mentioned documents were conclusively examined during this Supervisory Board meeting and discussed in full in the presence of the auditor. The Supervisory Board subsequently concurred with the results of the audit by the auditor and did not raise any objections in the course of its own examination. Accordingly, the separate financial statements of First Sensor AG and the consolidated financial statements have thus been adopted in accordance with Article 172 AktG.

The current declaration of compliance of First Sensor AG was also approved at the same Supervisory Board meeting. Detailed information on corporate governance within the First Sensor Group is available after the notes of this annual report. In addition, the declaration of compliance has been made permanently available to interested members of the public on the company’s website at
www.first-sensor.com.

I would like to take this opportunity – both personally and on behalf of my colleagues on the Supervisory Board – to thank the Management Board and all employees for their firm commitment and outstanding performance over the past financial year, and wish them every success in the future projects and challenges.

We are also grateful for the trust placed in us by our shareholders. We would greatly value your continued support as an investor in First Sensor AG.

Berlin, March 25, 2015

First Sensor AG

Prof. Dr. Alfred Gossner

Chairman of the Supervisory Board

• Report of the Supervisory Board (PDF)