Page 4 - Annual Report 2019

Supervisory Board Report
Group Management Report
Consolidated Financial Statements
Annexes

Supervisory Board

During the 2019 fiscal year, the Supervisory Board played an advisory and supervisory role for the
Management Board in all key transactions and strategic decisions relating to the Company and the
Group, as stipulated in the German Stock Corporation Act, the Articles of Association and the Board’s
internal rules and procedures. With comprehensive written and oral reports, the Management Board
regularly updated the Supervisory Board on the Group’s business developments and financial
position as well as its divisions, principal subsidiaries and key projects. The Supervisory Board
also played a key role in the Group’s investment, financial and personnel planning through regular
reporting on issues such as order intake, staff development, sales, cash flows, earnings performance,
variance analyses (forecasts vs. actual results) and the current cash position, all of which were
reviewed in detail by the Supervisory Board.

During its meetings, the Supervisory Board dutifully reviewed all measures and transactions
requiring its approval and discussed them in detail with the Management Board.

In addition to regular reporting from the Management Board at Supervisory Board meetings,
the Chairperson of the Supervisory Board was in regular contact with the Management Board and
received updated information on current conditions and all key transactions.
During the year under review, the Supervisory Board met for four regular meetings. No
extraordinary meetings were convened. With the exception of two meetings, for each of which one
member was excused, all members of the Supervisory Board attended each meeting. As in the
previous years, no committees were formed. The Supervisory Board in its present form with nine
members is of a suitable size to deliberate and resolve all matters.

Alongside recurring topics, the Supervisory Board also addressed updates to the Management Board’s
internal rules and procedures during its meeting on 25 March 2019. The matter was resolved
following a thorough Supervisory Board debate. The agenda also included the Management Board’s
report on the current performance of Italian nonwoven manufacturer Resintex Industriale S.r.l.,
which belongs to Tenowo, as well as measures for optimising production at the nonwoven locations
in Hof and Mittweida.
At the 20 May 2019 meeting, the Supervisory Board performed an in-depth review of the annual
financial statements and audit reports as of 31 December 2018 for HOFTEX GROUP AG and the Group.
The Board approved the agenda for the Annual General Meeting, along with the various resolution
proposals. In addition to reporting regarding current business development, the Management Board
informed the Board of the latest status of sales negotiations for the Hoftex division’s spinning mill
Hoftex CoreTech at the Drehbach location.
Along with a presentation of the key figures for the Group as of July 2019, the Management Board
explained in its meeting on 16 September 2019 the various activities regarding the strategic
further development of Neutex and the current status of investments in the Group.

In the final meeting of the fiscal year on 9 December 2019, the Management Board presented the
Group’s current business performance as of October 2019, the 2019 forecast, the Group’s plans for the
2020 fiscal year and the investment budget for 2020 to 2023. After reviewing them in detail and
discussing their inherent opportunities and risks with the Management Board, the Supervisory Board
approved the plans. The Supervisory Board also adopted the proposed investment budget for the
2020 fiscal year. Moreover, the Board received comprehensive information concerning the NEUTEX
division. Based on a 10-point plan to be implemented, the Management Board outlined the future
strategic direction and optimisation of Neutex.

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