Varta : Corporate Governance Declaration / Declaration of Conformity 2020

Corporate Governance Statement

Corporate Governance Statement pursuant to Sections 289f, 315d of the German Commercial Code (HGB)

dated March 19, 2021

Declaration on the German Corporate Governance Code (DCGK) pursuant to Section 161 of the German

Stock Corporation Act (AktG)

The Executive Board and Supervisory Board declare:

The recommendations of the "Government Commission on the German Corporate Governance Code" as amended on February 7, 2017 (DCGK 2017), published by the Federal Ministry of Justice in the official section of the Federal Gazette on April 24, 2017, have been complied with in the period since the last Declaration of Conformity dated March 18, 2020 until the entry into force on March 20, 2020 of the reformed DCGK as amended on December 16, 2019, with the exception of the following clauses for the reasons and in the periods stated therein.

Amount of D&O insurance deductible for the Supervisory Board (Point 3.8 (3))

Since the members of the Supervisory Board perform their duties responsibly and in the best interests of the company, the management is of the opinion that a deductible as such is not liable to increase the commitment and sense of responsibility of the Supervisory Board members.

Contractually defined upper limit for Executive Board service contracts (Point 4.2.3 (2))

Currently, not all Executive Board contracts stipulate contractually defined upper limits.

The Supervisory Board does not consider such upper limits to be necessary in view of the parameters set for the variable remuneration components and will act appropriately when setting the variable remuneration.

Age limits for members of the Executive Board (Point 5.1.2 (2))

Given the need to maintain a degree of necessary flexibility, the Supervisory Board is of the opinion that such an age limit does not best reflect the company's best interests. The current service contracts of Executive Board members are not renewed automatically. The Supervisory Board shall consider the age of the candidate in its decision regarding any extension or new employment contracts for members of the Executive Board.

Furthermore, the Executive and Supervisory Boards make the declaration below:

The recommendations of the "Government Commission on the German Corporate Governance Code" in the version dated December 16, 2019 ("DCGK 2020") published by the Federal Ministry of Justice in the official section of the Federal Gazette on March 20, 2020 have been complied with since this version of the DCGK came into force and will continue to be complied with, with the exception of the recommendations set out below, for the reasons and periods stated therein.

Composition of the Executive Board (Recommendation B.1)

In view of the current composition of the Executive Board and the fact that the extension of an appointment or new appointment only occurred last year, the candidate search also included female and diverse applicants. The Supervisory Board subsequently opted to appoint an internal candidate to the post of Chief Financial Officer. If new management, Executive Board member and Supervisory Board member appointments are to be made, the Supervisory Board is committed to always taking into account aspects such as diversity, albeit factors such as candidate training, experience and competence will ultimately be decisive.

Age limit for Executive Board members (Recommendation B.5)

In view of the age of the incumbent members of the Executive Board, VARTA AG has so far not set an age limit for members of the Executive Board. The Supervisory Board of VARTA AG is considering setting an age limit in the future.

Independence of members of the Supervisory Board (Recommendation C.10 Sentence 1)

Due to indirect commercial relationships with VARTA AG and the VARTA AG Group, the Chairman of the Supervisory Board, who is also Chairman of the HR Committee, is, in line with the indicators in recommendation C.7, not to be regarded as independent from the Company and Executive Board. The Supervisory Board is in no doubt that the Chairman of the Supervisory Board and of the HR Committee is guided exclusively by the best interests of the Company in performing his Supervisory Board activities.

Ellwangen, March 2021

Executive Board and Supervisory Board

VARTA AG

Corporate Governance Report in accordance with Principle 22 of the German Corporate Governance Code

Corporate governance stands for responsible, transparent corporate management and control geared toward long-term value creation.

We are convinced that good corporate governance is an essential basis for sustainable corporate success, which strengthens the confidence in our company of our shareholders, business partners, employees and the financial markets. The VARTA AG Group has adopted a Code of Conduct. This code defines behavioral guidelines as minimum standards that are binding for all employees of the VARTA AG Group worldwide. The complete Code of Conduct is published on the VARTA AG website under:www.varta-ag.com/de/investoren/compliance.

Dual Management System

As an internationally active stock corporation with its registered office in Ellwangen, Germany, VARTA AG is subject, among other conditions, to the provisions of German stock corporation law. A basic principle of German stock corporation law is the dual management system, which assigns the management of the company to the Executive Board and the advice and supervision of the Executive Board to the Supervisory Board. These two bodies are strictly separate from each other, both in terms of their members and their competencies. However, both bodies work closely together in the interests of the Company.

Composition and Functioning of the Executive Board

As of December 31, 2020, the Executive Board of VARTA AG, Ellwangen (Jagst) consisted of three members: Herbert Schein (CEO), Armin Hessenberger (CFO) and Steffen Munz.

The members of the Executive Board are jointly responsible for the management of the company.

No member of the Executive Board holds more than two supervisory board mandates or chairs more than one Supervisory Board in non-Group listed companies or in supervisory bodies of non-Group companies with comparable requirements. The Executive Board is responsible for managing the company, defining the strategic direction of the company, coordinating this with the Supervisory Board and ensuring its implementation. In addition, it determines the corporate goals and shapes corporate policy and the Group's organization. It also ensures appropriate risk management and controlling, as well as compliance with legal requirements and internal guidelines. It is bound by the interests of the company and is guided by the goal of sustainable growth in the value of the company.

Without prejudice to the overall responsibility of the Executive Board, the individual members manage the business areas assigned to them by the schedule of responsibilities on their own responsibility. There are no Executive Board committees. In particular, the Chairman of the Executive Board is responsible for corporate development and for coordinating the business areas. The members of the Executive Board inform each other on all significant developments in their business areas and coordinate all interdepartmental measures. Further details on cooperation within the Executive Board are set out in the Rules of Procedure for the Executive Board and the schedule of responsibilities. In particular, these also contain rules on meetings and resolutions in addition to cooperations with the Supervisory Board.

At the Supervisory Board meetings, the Executive Board reports in writing and orally on the agenda items and drafts resolutions and answers the questions put by individual Supervisory Board members.

The Chairman of the Executive Board and the Chief Financial Officer are in regular contact with the Chairman of the Supervisory Board and the Chairman of the Audit Committee to discuss key aspects of the Company's strategy, planning and corporate development, as well as risk management and compliance issues.

In view of the age of the incumbent members of the Executive Board, VARTA AG has so far not set an age limit for Executive Board members. The Supervisory Board of VARTA AG is considering the option of imposing an age limit in the future. For the reasons outlined in the Declaration of Conformity, the Supervisory Board has so far not defined a diversity concept for the Executive Board.

The Executive Board has defined a target of achieving a quota of at least 30 percent of women for the composition of the top two management echelons in the VARTA AG Group below the Executive Board of VARTA AG. The deadline for achieving this target was set at March 16, 2026.

Composition and Functioning of the Supervisory Board

The Supervisory Board of VARTA AG consists of six members. The term of office of all current Supervisory Board members expires at the end of the Annual General Meeting in 2021.

The Supervisory Board regularly deals with its competence profile. The members of the Supervisory Board as a whole have the knowledge, skills and professional experience required to properly perform their duties. In their entirety, they are familiar with the sector in which the Company operates. As they also have extensive knowledge in various professional fields and many years of international experience, they bring a broad range of skills, experience and diversity to Supervisory Board activities. In the opinion of the Supervisory Board, the members Dr. Georg Blumauer, Frank-Dieter Maier, Dr. Michael Pistauer, Sven Quandt and Dr. Harald Sommerer meet the requirement of independence. The Supervisory Board regards the number of five independent shareholder representatives sitting on the Supervisory Board as appropriate. The members of our Supervisory Board do not perform any board functions or advisory duties for major competitors of the Company. Compliance with the age limit of, generally, 75 years at the time of election was taken into account when making appointments, except in one case.

The basis of every Supervisory Board activity is the personal qualification of the Supervisory Board members. For this reason, other important criteria are also taken into account in the proposals of candidates for election. As in the past, attention is paid to personality, integrity and sufficient diversity in terms of specialist and industry knowledge as well as special experience, e.g. in the fields of accounting or auditing. The Supervisory Board monitors and advises the Executive Board on the management of the Company. It is informed regularly, promptly and comprehensively by the Executive Board on the business development, planning and risk position of the company, including compliance, and agrees the corporate strategy and its implementation with the Executive Board. The Supervisory Board examines and approves the annual financial statements of VARTA AG and the VARTA AG Group, taking into account the auditor's reports before reviewing and resolving the proposals put forward by the Executive Board for the appropriation of the balance sheet profit. Furthermore, it decides on the resolution proposals to be submitted to the Annual General Meeting by the Supervisory Board. Certain transactions and measures of the Executive Board of fundamental importance require the prior approval of the Supervisory Board or a committee of the Supervisory Board.

The appointment and dismissal of members of the Executive Board are also among the duties of the Supervisory Board. When appointing members of the Executive Board, the Supervisory Board ensures that the