GFT Technologies : Declaration of Compliance 2025

About this update from Gft Technologies Se

- Convenience Translation - Declaration of Compliance of the Administrative Board of GFT Technologies SE concerning the recommendations of the "Government Commission on the German Corporate Governance Code" pursuant to section 161 AktG (German Stock Corporation Act) (As at: December 8, 2025) On December 12, 2024, GFT Technologies SE issued its last annual Declaration of Compliance to the recommendations of the "German Corporate Governance Code" in the version of April 28, 2022, announced in the German Federal Gazette (Bundesanzeiger) on July 27, 2022 (hereinafter referred to as the "Code"). This Declaration of Compliance was updated on May 5, 2025, against the backdrop of the establishment of a Nomination Committee and a Personnel and Remuneration Committee. Since then, GFT Technologies SE has complied with the recommendations of the Code, subject to the special features of the monistic system of the GFT Technologies SE, and with exception of the deviations explained there. It complies and will comply with the recommendations of the Code with the exception of the deviations explained in section III. The principles for transferring the recommendations of the Code based on a dual management system to the one-tier management system of GFT Technologies SE are presented in section II. I. Preliminary remark As stated in paragraph 3 of its foreword, the objective of the Code is to make the dual German corporate governance system transparent and understandable. Pursuant to section 5 (1) of its Articles of Incorporation, GFT Technologies SE has a one-tier management and control structure. According to article 43 to 45 Council Regulation (EC) No 2157/2001 of October 8, 2001 on the Statute of the European Company (SE) in conjunction with sections 20 et seq. SE Implementation Act (hereinafter referred to as the "SEAG"), the one-tier system is characterised by the fact that a single governance body, the Administrative Board, is responsible for the management of the company. The Administrative Board manages the company, determines the basic policies of its activity and supervises their implementation by the Managing Directors. The Managing Directors conduct the business of the company and represent the company in and out of court. They are bound by instructions of the Administrative Board. The principles, recommendations and suggestions contained in the Code with regard to the dual German corporate governance system are only directly applicable to a one-tier SE to a limited extent. In particular, as is the case for listed credit institutions and insurance undertakings (see paragraph 8 sentence 2 of the foreword to the Code), the principles and recommendations of the Code can only be applied to the extent that they do not contradict any legal stipulations. The transfer of the principles, recommendations and suggestions of the Code to the one-tier structure of GFT Technologies SE is explained below in section II. II. Transfer of the principles, recommendations and suggestions of the Code to the one-tier structure of GFT Technologies SE GFT Technologies SE transfers the principles, recommendations and suggestions of the Code for the supervisory board to its Administrative Board and for the management board to its Managing Directors. The following exceptions apply: The governance tasks of the management board set forth in Principles 1 to 5 are the responsibility of the Administrative Board pursuant to section 22 (1) of the SEAG, or section 22 (3) sentence 3 of the SEAG. These include managing and developing the company's strategic alignment, setting targets for the proportion of women in the two management levels below the Administrative Board, establishing an internal control system and risk management system and compliance. The Recommendations A.1 and A.3 in connection with the ecological and social impacts of the enterprise's activities and sustainability-related objectives as well as the Recommendations A.2 (consideration of diversity when making appointments to executive positions), A.4 (establishment of a whistle-blower system) and A.5 (comment upon the appropriateness and effectiveness of the internal control system and risk management system) addressed to the management board are addressed to the Administrative Board in the one-tier structure based on section 22 (1) of the SEAG. According to Principle 6 (paragraph 1), the supervisory board appoints and discharges the members of the management board, supervises and advises the management board in the management of the enterprise and has to be involved in decisions of fundamental importance to the enterprise. The Administrative Board of a one-tier SE combines the management and control. In derogation from Suggestion A.8, the Administrative Board is responsible for convening the General Meeting. According to Recommendation B.3, the first-time appointment of management board members of a stock corporation shall be for a period of no more than three years. Recommendation B.4 further states that any re-appointment prior to one year before the end of an appointment period at the same time as termination of the current appointment shall only happen if special circumstances apply. These recommendations should be viewed against the background that, pursuant to section 84 (4) AktG, members of the management board of a stock corporation may only be removed if there is good cause. Pursuant to section 40 (5) SEAG, Managing Directors may be dismissed at any time even without good cause. Against this background, Recommendations B.3 and B.4 are not transferred to the one-tier SE. Recommendations C.6 to C.12 concerning the independence of supervisory board members refer only to those members of the Administrative Board who are not appointed as Managing Directors. III. Deviations from the recommendations of the Code Recommendation C.10 sentence 1 "The Chair of the Supervisory Board, the Chair of the Audit Committee, as well as the Chair of the committee that addresses Management Board remuneration, shall be independent from the company and the Management Board." The Chair of the Audit and ESG Committee is independent from the Company and from the Managing Directors. To this extent, this recommendation has been complied with. The recommendation that also the Chair of the Administrative Board as well as the chair of the committee that addresses Management Board remuneration (Personnel and Remuneration Committee) be independent from the Company and from the Managing Directors is not complied with. Immediately prior to taking office in 2017, the Chair of the Administrative Board, who is also the chair of the Personnel and Remuneration Committee, was Chair of the Managing Directors and Deputy Chair of the Administrative Board. Pursuant to the criteria set forth in Recommendation C.7, he is not deemed to be independent from the company. Given the desire for personnel continuity in the management of the Company, the Administrative Board at that time resolved that the former Chair of the Managing Directors should become the Chair of the Administrative Board. Furthermore, the Administrative Board considers it appropriate that the Chair of the Administrative Board of a company with a monistic management and control structure, in which the Administrative Board performs the overall management function, also chairs the Personnel and Remuneration Committee. From the perspective of the Administrative Board, approximately eight years after stepping down as Chairman of the Managing Directors, the necessary distance from the Managing Directors is also given for chairing the Personnel and Remuneration Committee. Recommendation D.4 "The Supervisory Board shall form a Nomination Committee, composed exclusively of shareholder representatives, which names suitable candidates to the Supervisory Board for its proposals to the General Meeting." The recommendation has been complied with since May 5, 2025. It will continue to be complied with in the future. Recommendation G.6 " The share of variable remuneration achieved as a result of reaching long-term targets shall exceed the share from short-term targets." The recommendation is not complied with. In the opinion of the Administrative Board, it is not necessary within the framework of the remuneration system applied by the company, that the variable remuneration based on the achievement of long-term goals to exceed the portion based on short-term goals in order to support the long-term and sustainable development of the company. Two of the three remuneration components with a one-year assessment basis, which account for around 87 percent of the total variable remuneration with a one-year assessment basis if 100 percent of the targets are achieved, support the long-term and sustainable development of the company. One variable remuneration component is linked to the development of sales in the respective fiscal year compared to the previous year. This means that two fiscal years are taken into account, rather than just one. Another variable remuneration component is based on the ratio of EBT to sales for a fiscal year. By combining these two remuneration components and setting the performance criteria at the beginning of the terms of the service agreements without subsequent adjustments, the Administrative Board believes that long-term profitable growth and thus the long-term and sustainable development of the company are supported. Recommendation G.7 sentence 1 "Referring to the forthcoming financial year, the Supervisory Board shall establish performance criteria for each Management Board member covering all variable remuneration components; besides operating targets, such performance criteria shall be geared mainly to strategic goals." Prior to the respective financial year, the Administrative Board sets the performance criteria for each Managing Director covering all variable remuneration components; besides operational targets, these performance criteria are geared mainly to strategic goals. However, not all performance criteria for variable remuneration components are set for the forthcoming financial year, but already when the respective service agreement is concluded. Only one remuneration component is set for the forthcoming financial year. The Administrative Board is of the opinion that this procedure is appropriate within the framework of the remuneration system applied, which is geared to a long-term and consistent approach. Recommendation G.10 "Taking the respective tax burden into consideration, Management Board members' variable remuneration shall be predominantly invested in company shares by the respective Management Board member or shall be granted predominantly as share-based remuneration. Granted long-term variable remuneration components shall be accessible to Management Board members only after a period of four years." The company does not comply with this recommendation. The variable remuneration granted is not predominantly invested in shares in the company or granted on a share-based basis. The service agreements with the Managing Directors stipulate that one third of the total short-term variable remuneration is converted to the respective long-term variable remuneration (LTI) after the end of the financial year in question. The development of the LTI is determined by the performance of the GFT share price. Payment of the LTI is made after three years. By linking to the weighted average price of GFT shares in the financial year prior to conversion and the weighted average price of GFT shares in the financial year prior to payment, a four-year assessment period was chosen. The Administrative Board believes that the overall stipulations made in the service agreements encourage the Managing Directors to focus their efforts on the long-term promotion of the com-pany's well-being and the ensuring of sustainable and long-term corporate success. This is all the more true as the variable remuneration components with a one-year assessment basis are already geared to sustainable and long-term corporate development (see also the explanation for the deviation from recommendation G.6).

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