Audi 2006 Annual Report Download - page 132

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Additional disclosures pursuant to Section 315 Para. 4 of the German Commercial Code
On the introduction of the German Takeover Directive Implementation Act on July 14, 2006,
Directive 2004/25/EC of the European Parliament and Council of April 21, 2004 on takeover
bids (“EU Takeover Directive”) was implemented in German law. The law envisages among
other aspects changes to the German Commercial Code and necessitates additional particu-
lars in the Management Report, which are provided below:
Capital structure
On December 31, 2006 the share capital of AUDI AG amounted to EUR 110,080,000
(110,080,000) and comprised 43,000,000 bearer individual share certificates. Each share
represents a mathematical share of EUR 2.56 in the issued capital.
Shareholders’ rights and obligations
The shareholder has property and administrative rights.
The property rights include above all the right to a share in the profit (Section 58 Para. 4
of German Stock Corporation Law) and in the proceeds of liquidation (Section 271 of Ger-
man Stock Corporation Law) as well as a subscription right to shares in the event of capital
increases (Section 186 of German Stock Corporation Law).
The administrative rights include the right to participate in the Annual General Meeting
and the right to speak, ask questions, table motions and exercise voting rights there. The
shareholder may assert these rights in particular by means of a disclosure and avoidance
action.
Every share shall carry an entitlement to one vote at the Annual General Meeting. The
Annual General Meeting shall elect the members of the Supervisory Board to be appointed
by it, as well as the auditors; it shall decide in particular on the discharge of the members of
the Board of Management and the Supervisory Board, on amendments to the articles of
incorporation as well as capital measures, on authorisations to acquire treasury shares and,
if necessary, on the conducting of a special audit, the dismissal of members of the Supervi-
sory Board within their term of office and the liquidation of the company.
The Annual General Meeting shall normally pass resolutions by a simple majority of
votes cast, unless a qualified majority is specified by statutory requirements.
A control and profit transfer agreement exists between AUDI AG and Volkswagen AG as
the controlling company. This agreement permits Volkswagen to issue instructions. The
unappropriated profit of AUDI AG available for distribution shall be transferred to Volks-
wagen. Volkswagen AG shall be obliged to make good any loss. Outside Audi shareholders
shall receive a compensatory payment that is tied to the dividend distributed on each
Volkswagen share.
Composition of the Supervisory Board
The Supervisory Board shall comprise 20 members. Half of them shall be representatives of
the shareholders, elected by the Annual General Meeting. The other half of the Supervisory
Board members shall be employees’ representatives who are elected by the employees in
accordance with German Codetermination Law. A total of seven of these employees’ repre-
sentatives shall be employees of the company; the remaining three Supervisory Board
members shall be representatives of the unions. The Chairman of the Supervisory Board, a
shareholders’ representative elected by the members of the Supervisory Board, shall ulti-
mately have two votes on the Supervisory Board in the event of a tied vote, pursuant to
Section 13 Para. 3 of the articles of incorporation.