Varta : Corporate Governance Declaration / Declaration of Conformity 2021

Corporate Governance Statement

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

dated March 29, 2022

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 30, 2021, 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))

An Executive Board contract terminating on September 30, 2021 did not stipulate any contractually defined upper limits. As from October 1, 2021, all Executive Board contracts will include contractually defined upper limits.

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)

The Supervisory Board has appointed a Chief Technology Officer as an addition to the Executive Board from internal circles. In the event of new appointments to management positions and to the Executive and Supervisory Boards, the Supervisory Board will always keep gender and diversity issues in mind, however, the decisive factors will be the education, experience and competence of the candidates.

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 business relations with VARTA AG or the VARTA AG Group, the Chairman of the Supervisory Board, who is also Chairman of the HR Committee, cannot be regarded as independent of the Company and the Executive Board according to the indicators in recommendation C.7. The Supervisory Board has no doubt that the Chairman of the Supervisory Board and of the HR Committee is exclusively oriented towards the welfare of the Company in his Supervisory Board activities.

Determination of the amount of variable remuneration components (Recommendations G.6 and G.10 sentence 1)

The Supervisory Board has decided to split the variable remuneration amounts equally between emoluments based on short term incentives and long term incentives. From an incentive perspective, the Supervisory Board currently considers an equal weighting of the short and long term incentives to be appropriate in the interests of sustainable corporate development.

Ellwangen, March 2022

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, 2021, the Executive Board of VARTA AG, Ellwangen (Jagst) consisted of two members: Herbert Schein (CEO) and Armin Hessenberger (CFO).

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

No member of the Executive Board shall hold more than two supervisory board mandates or chairs supervisory boards of listed companies outside the Group or supervisory bodies of companies outside the Group with comparable requirements. The Executive Board manages the Company on its own responsibility, determines the strategic direction of the Company, agrees this with the Supervisory Board and ensures its implementation. In addition, it determines the corporate goals and shapes corporate policy and the Group's organization. Furthermore, it ensures appropriate risk management and controlling as well as compliance with legal requirements and internal guidelines. It is bound to the interests of the company and is oriented to the goal of a sustainable increase 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. 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 cooperation 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 stated in the Declaration of Conformity, the Supervisory Board has not yet defined a diversity concept for the Executive Board.

The Executive Board has set the target for the proportion of women in the first two management levels in the VARTA AG Group below the Executive Board of VARTA AG at 30%. March 16, 2026 has been set as the deadline for achieving the target figure.

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 2026.

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 and experience to Supervisory Board activities. In the opinion of the Supervisory Board, members Martin Ohneberg, Dr. Michael Pistauer, Sven Quandt, Dr. Harald Sommerer and Prof. Dr. Werner Tillmetz meet the requirement of independence. The Supervisory Board considers the number of five independent shareholder representatives on the Supervisory Board to be appropriate. The members of our Supervisory Board do not perform any board functions or advisory duties for significant competitors of the Company. Compliance with the general age limit of 75 years at the time of election was taken into account in the appointment process, with the exception of 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 Group, taking into account the auditor's reports, and decides on 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. 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 composition of the Executive Board is the best possible for the Company. Experience and industry knowledge as well as professional and personal qualifications play an important role in this. The HR Committee submits proposals to the Supervisory Board on the structure of the remuneration system for the Executive Board and on appropriate overall remuneration for the individual Executive Board members. Further information on Executive Board remuneration is summarized in the Remuneration Report. The most recent resolution of the Annual General Meeting on the remuneration of Supervisory Board members pursuant to Section 113 (3) AktG is available on the Company's website at https://www.varta-ag.com/de/ueber-varta/unternehmen/aufsichtsrat.

To increase the efficiency of its work and to deal with complex issues, the Supervisory Board has formed four standing committees from among its members which, among other duties, prepare its resolutions or in some cases, pass resolutions on behalf of the Supervisory Board. These are the Audit Committee, the HR Committee, which also performs the duties of the Nomination Committee, the Related Parties Committee and the Investment Committee. The chairpersons of the committees report regularly to the plenary Supervisory Board on the results of their work.

The composition of the committees can be found in the Supervisory Board Report.

The Rules of Procedure for the Supervisory Board are available on the Company's website at https://www.varta-ag.com/de/ueber-varta/unternehmen/aufsichtsratand govern not only the personal requirements placed on the members but also their duties and responsibilities as well as the procedure to be followed for meetings and resolutions. The Supervisory Board Report provides information on the activities of the Supervisory Board and its committees in the reporting year.

The members of the Supervisory Board undertake the training and further education measures required for their tasks on their own responsibility and are supported in this by VARTA AG.

The Company regularly informs the Supervisory Board about current changes in legislation and external training opportunities.

The Supervisory Board regularly reviews the efficiency of its activities and the activities of the committees using questionnaires and individual interviews. These provide suggestions for even better cooperation.

Avoidance of conflicts of interest

The members of the Executive Board and Supervisory Board are obliged to disclose any conflicts of interest to the Supervisory Board without delay. Significant transactions between the Company and members of the Executive Board or related parties require the approval of the Supervisory Board. Agreements between the Company and members of the Supervisory Board also require the approval of the Supervisory Board. The Supervisory Board reports to the Annual General Meeting on any conflicts of interest and how they are handled. Conflicts of interest that arose in the reporting year were resolved by related party transactions being carefully examined by the Related Party Committee and the Supervisory Board member involved in related party transactions not taking part in the decision-making process of the Supervisory Board. Further information on related party transactions can be found in the Supervisory Board Report.

Succession planning

The Supervisory and Executive Boards have been addressing the issue of organizational development for some time. This is also being carried out in order to be able to recruit suitable candidates for future Executive Board positions internally wherever possible. The focus is on knowledge and experience as well as professional and personal competencies with reference to the corporate strategy and corporate culture.

Annual General Meeting

The Annual General Meeting is the third corporate body of the Company. Shareholders exercise their rights at the Annual General Meeting, including their voting rights. VARTA AG has only issued shares with full voting rights. Each share grants one vote. The Annual General Meeting is held once a year within the first eight months of the fiscal year. The Chairman of the Supervisory Board chairs the Annual General Meeting. The agenda for the Annual