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BRAIN FORCE pursues a strategy to ensure the sustainable enhancement of shareholder value. The goal of the Management and Supervisory Boards is to implement a strict policy focusing on good cor-porate governance and transparency, and the ongoing further development of an efficient system of corporate control. This approach is designed to create confidence in the company and establish the basis for long-term value creation.
BRAIN FORCE is committed to complying with the Austrian Corporate Governance Code (ÖCGK), and has pledged to adhere to the guidelines contained in it. Accordingly, the company oriented its business operations in the 2009/10 fiscal year from October 1, 2009 to September 30, 2010 to the January 2010 version of the Austrian Corporate Governance Code. In addition to observing the obligatory “L-Rules“ (Legal Requirements), the BRAIN FORCE Group abided by the currently valid Austrian Corporate Governance Code during the past fiscal year, bearing in mind the explanations provided below.
“C-Rule 18“: No separate internal audit department has been set up in the light of the company’s size. However, BRAIN FORCE has established an internal controlling and reporting system enabling the Management Board to identify risks and quickly implement an appropriate response. The Supervisory Board, particularly the Audit Committee, is regularly informed about the internal control mechanisms and risk management throughout the Group. The Audit Management Letter prepared by the auditors and their report on the proper functioning of risk management procedures were presented to the Chairman of the Supervisory Board and discussed in a Supervisory Board meeting. Further information on risk management can be found in the annual report 2009/10 on pages 40 and 73.
“C-Rule 36“: The Supervisory Board strives to continually improve its organization, work procedures and efficiency. An explicit self-evaluation did not take place in the fiscal year under review.
“C-Rule 45“: The Supervisory Board member Peter Kotauczek (term of office until February 24, 2010), in his capacity as Chief Executive Officer of BEKO HOLDING AG, also serves on the Supervisory Board of its subsidiary, BEKO Engineering & Informatik AG, which operates in the field of Professional Services as does BRAIN FORCE SOFTWARE GmbH, Vienna. The Supervisory Board member Josef Blazicek alsoserves on the Supervisory Board of update software AG, which offers front office business solutions for similar branches as does BRAIN FORCE Software GmbH, Munich.
The updated version of the Austrian Corporate Governance Code and the Corporate Governance Report are available at www.brainforce.com under the heading “Investors”. A compliance code implementing the provisions contained in the Issuer Compliance Regulation of the Austrian Financial Market Authority was enacted in the company as a means of preventing insider trading. Adherence to the guidelines is continually monitored by a compliance officer.
BRAIN FORCE HOLDING AG is committed to the principle of trans-parency and the goal of providing a “true and fair view” for the benefit of all shareholders. All relevant information is published in our annual report, quarterly reports, on the corporate Website and within the context of our ongoing press relations work. Reports are prepared in accordance with the internationally recognized accounting principles contained in the International Financial Reporting Standards (IFRS). BRAIN FORCE HOLDING AG also informs its shareholders about all issues and developments of relevance to the company by means of ad-hoc announcements and corporate news. The financial calendar already points out important dates in a timely manner. Comprehensive information is published in the “Investors” section of the BRAIN FORCE Website, and is thus available to all shareholders at the same time.
The company has issued a total of 15,386,742 ordinary, no-par value bearer shares. There are no preferential shares or restrictions on these no-par value bearer shares. Accordingly, the principle of “one share – one vote” fully applies. The Austrian Takeover Act ensures that every shareholder will receive the same price for BRAIN FORCE shares in the case of a takeover bid (public tender offer). The shareholder structure is depicted on pages 27 and 28 of this annual report.
The Management Board manages the business of the company under its own responsibility in compliance with valid legal regulations, the Articles of Association of BRAIN FORCE HOLDING AG and the internal rules of procedure. The internal rules of procedure primarily stipulate the assignment of responsibilities as well as a list of measures requiring the approval of the Supervisory Board. The Supervisory Board conducts its business in accordance with valid legal regulations, the Articles of Association and its internal rules of procedure.
The Management Board provides information to the Supervisory Board within the framework of regular meetings (at least one in each quarterly period). Additional meetings are held when necessary, for example to prepare an Annual General Meeting, to consult on the budget or discuss current strategic decisions. As a result, the Supervisory Board has access to all the relevant information required enabling it to perform its consulting and supervisory duties. Four meetings of the Supervisory Board were held in the fiscal year from October 1, 2009 to September 30, 2010. In line with the Austrian Corporate Governance Code, the Management Board and Supervisory Board maintain ongoing contact above and beyond the formal sessions to discuss the development and strategic orientation of the company. Depending on the significance and type of duty to be fulfilled, the Supervisory Board has also established committees to carry out specific functions. The members and designated responsibilities of the Supervisory Board committees are presented on page 19. Every Supervisory Board member took part in more than half of the Supervisory Board meetings during the 2009/10 fiscal year.
The Supervisory Board has enacted guidelines to determine the independence of Supervisory Board members of BRAIN FORCE HOLDING AG in accordance with C-Rule 53 of the Austrian Corporate Governance Code:
All Supervisory Board members of BRAIN FORCE HOLDING AG are to be considered as independent in line with the above-mentioned guide-lines. Corresponding declarations were submitted by all Supervisory Board members. The main responsibility of the Supervisory Board is to supervise the work of the Management Board in accordance with Section 95 Austrian Stock Corporation Act. This responsibility is being completely carried out by the currently appointed Supervisory Board. The company has a free float exceeding 20% and less than 50%. Two members of the Supervisory Board (Christoph Senft and Wolfgang Hickel) are not owners of the company with a stake of more than 10%, nor do they represent the interests of a large shareholder. Employees of BRAIN FORCE HOLDING AG have not elected a works council. For this reason, no employee representative is a member of the Supervisory Board.
BRAIN FORCE HOLDING AG has neither granted loans to Management or Supervisory Board members, nor has it concluded contractual agreements with these individuals. Based on the approval granted by the Supervisory Board (with Josef Blazicek abstaining from voting), the company concluded a Letter of Engagement in August 2009 contracting Ocean Consulting GmbH, a company in which Josef Blazicek is a partner, to provide M&A consulting services. The fees stipulated in the agreement correspond to prevailing market rates and were subsequently invoiced in the course of the 2009/10 fiscal year. Hofer Management GmbH, a company in which Michael Hofer owns a 100% stake, placed one employee at the disposal of BRAIN FORCE at prevailing market terms and conditions for the period September 2009 to March 2010. Moreover, one employee was put at the disposal of our German subsidiary at prevailing market terms and conditions to carry out a customer project. A transfer agreement with Hofer Management GmbH has been in effect since October 2009 to put a management board member at the disposal of BRAIN FORCE. On December 16, 2009, BRAIN FORCE HOLDING AG concluded a sale and purchase agreement with BEKO Engineering & Informatik, AG, Nöhagen, in which BEKO acquired all shares of BRAIN FORCE SOFTWARE GmbH, Vienna. This sale was in line with prevailing standards in the IT sector. The acquisition price was within the range objectively determined by an independent chartered accountant. Service relationships exist with the associated company SolveDirect Service Management GmbH, Vienna in some isolated cases, the scope of which does not have a material impact on the financial situation of the company.
All vacant job positions in the BRAIN FORCE Group are filled regardless of gender and in accordance with objective qualification criteria. In this company, a specific program to promote the career advancement of women has not been set up.
PwC Inter-Treuhand GmbH Wirtschaftsprüfungs- und Steuerberatungsgesellschaft was appointed by the 12th Annual General Meeting to serve as the auditors of the consolidated annual financial statements and annual financial statements of BRAIN FORCE HOLDING AG for the fiscal year between October 1, 2009 and September 30, 2010. In addition to this work, PwC and partner offices around the world also sporadically perform tax and financial consulting services on behalf of the BRAIN FORCE Group. In the 2009/10 fiscal year between October 1, 2009 and September 30, 2010, total consulting fees invoiced by PwC to BRAIN FORCE HOLDING AG amounted to EUR 0.07 million. The fee charged for auditing the consolidated financial statements and carrying out audit-related services totaled EUR 0.12 million.