Declaration of Compliance

Declaration by the Biotest AG Board of Management and Supervisory Board
on the recommendations of the German Corporate Governance Code in accordance with Section 161 of the German Stock Corporation Act (AktG)

 

Since the last declaration of compliance dated 9 March 2010, which referred to the German Corporate Governance Code of 18 June 2009, Biotest AG has complied with all of the recommendations of the German Corporate Governance Code in said version with the following exceptions:

• Biotest AG has not followed the recommendation in Section 5.3.3 of the German Corporate Governance Code to form a Supervisory Board nomination committee. Biotest AG’s Supervisory Board comprises only four shareholder representatives. Biotest AG considers the formation of a committee from the small number of shareholder representatives to be unnecessary. The improvement in transparency of the selection procedure at which the recommendation is aimed is also ensured at Biotest AG in full meetings of the Supervisory Board.
• Until 30 June 2010, the Company has not followed the recommendation of Section 3.8 (2) of the German Corporate Governance Code. With regard to D&O liability insurance, Biotest AG did not set a deductible for Board of Management members of 10% of the loss up to at least the amount of one and a half times the fixed annual remuneration of the Board of Management member. The Company considered a deductible in this amount as not necessary with regard to responsibility and motivation on the part of Board of Management members in performing their duties. In application of Section 93 (2)(3) of the German Stock Corporation Act, D&O liability insurance coverage for Board of Management members was amended to include an appropriate deductible as of 1 July 2010.

Biotest AG does not currently follow the recommendation in Section 3.8 (3) of the German Corporate Governance Code to set an appropriate deductible in D&O liability insurance coverage for members of the Supervisory Board. Biotest AG has established in its view an appropriate deductible for members of its Supervisory Board. However, this does not meet the deductible amount for Supervisory Board members required by law. In Biotest’s view, an increase in the deductible set would be out of proportion with current remuneration for Supervisory Board duties.

The Board of Management and Supervisory Board further declare their compliance with all other recommendations of the German Corporate Governance Code as amended on 26 May 2010, with the following exceptions:

• The revisions to the German Corporate Governance Code in effect from 26 May 2010 include new recommendations under Section 5.4.1 of the German Corporate Governance Code, which state that the Supervisory Board is to establish specific targets with regard to its composition, taking into account the international activities of the Company, potential conflicts of interest, an age limit for Supervisory Board members (to be defined) and diversity in light of the Company’s specific situation. These specific targets should include adequate female representation. The Supervisory Board should take these targets into account when making recommendations to the selection committees. The targets and the status of their implementation are to be published in the Corporate governance report. The Supervisory Board of Biotest AG has already set a specific target with regard to the maximum age of its members. In addition, female members already make up half of the Supervisory Board. At the time that this Declaration of Compliance is issued, the Supervisory Board will conduct an internal review of the specific targets mentioned in Section 5.4.1 (2) of the German Corporate Governance Code to determine which of these targets is of importance in terms of the composition of the Supervisory Board in light of the specific situation of Biotest AG. Upon completion of this internal analysis, the Supervisory Board shall, if applicable, formulate additional specific targets for its composition. To this extent, a deviation from Section 5.4.1 (2) of the German Corporate Governance Code is provisionally declared. Given the ongoing internal discussions as of the date of issue of this Declaration of Compliance regarding which specific targets, if any, should be set other than those regarding an age limit and adequate female representation, no further targets can be considered in any selection recommendations. Furthermore, a corresponding reporting in the Corporate governance report has not been possible to date. Therefore, a deviation from Section 5.4.1 (3) of the German Corporate Governance Code is also provisionally declared.

Dreieich, 17 March 2011

For the Board of Management		For the Supervisory Board
Prof. Dr. Gregor Schulz	Dr. Michael Ramroth	Dr. Thorlef Spickschen