Report of the Supervisory Board

Dear Shareholders,

Fiscal 2023 was again a challenging year for Covestro. Continuous geopolitical uncertainty, e.g., the Russian war against Ukraine or the conflicts in the Middle East, impacted on global economic development. Other factors, such as high inflation and low demand from Covestro’s main customer industries, weighed on the company’s 2023 fiscal year.

The Board of Management analyzed this extremely complex and difficult overall global situation very closely and reflected it in the strategy in order to secure Covestro’s business and its long-term future. Alongside continuing to implement the strategic goals, the Board’s efforts focused on improving operational performance. We, the Supervisory Board, closely accompanied the Board of Management and supported it in its deliberations and decisions.

In terms of strategy, it is also our view that Covestro continues to be on the right track and is well-positioned for the future with its focus on establishing the circular economy and overall on innovations for more sustainability. In this regard, the company also reached further milestones and achieved business successes last year. In the course of its internal transformation, these include the continuing shift in production to sustainable raw materials, renewable energy sources, and recycling as well as the ongoing digitalization with the focus on artificial intelligence. With regard to customers, Covestro has also further expanded its range of circular, climate-neutral products and solutions as the basis for sustainable growth.

During this period, the Supervisory Board took important decisions to set the course for the continuity of Covestro’s management: After the termination, agreed at the start of reporting year, of the Board of Management contract with CFO Dr. Thomas Toepfer as of August 31, 2023, the Supervisory began the search for a new CFO, and successfully recruited Mr. Christian Baier for this role, who took over his new position as of October 1, 2023. Dr. Thorsten Dreier, who had already been appointed as Chief Technology Officer (CTO) in the year before, took up office as a member of the Board of Management as of July 1, thus succeeding Dr. Klaus Schäfer. The new Board of Management team works very well together, especially given the current challenging tasks.

Important issues in fiscal 2023 were defining Scope 3 targets for the company, preparing a sustainability component relating to “Social” topics for the compensation of the Board of Management, and reviewing the strategic options for the company in detail, including deliberations on the interest expressed by the Abu Dhabi National Oil Company (ADNOC), Abu Dhabi (United Arab Emirates) in relation to Covestro AG.

During the reporting period, the Supervisory Board of Covestro AG performed its duties with due care in accordance with the law, the Articles of Incorporation, and the rules of procedure. During fiscal 2023, it monitored the conduct of the company’s business by the Board of Management with regular frequency based on detailed written and oral reports received from the Board of Management, and also acted in an advisory capacity. The discussions between the Supervisory Board and Board of Management were always constructive and were conducted in the spirit of openness and trust.

The Supervisory Board Chair was in regular contact with the Board of Management outside of Supervisory Board meetings and remained informed about current developments in the company’s business performance and material transactions. In addition, the Chair of the Supervisory Board was in close contact with the Chair of the Board of Management to discuss important questions and decisions one on one. The full Supervisory Board was informed in detail about the content of these discussions no later than during the next meeting.

In this way, the Supervisory Board was kept regularly and fully informed in the respective meetings about the company’s intended business strategy, corporate planning (including financial, investment, and human resources planning), profitability, the state of the business, and the situation of the company and the Group (including the risk situation, risk management, and the compliance situation). Where Board of Management decisions or actions required the approval of the Supervisory Board during the reporting period, whether by law, or under the Articles of Incorporation or the rules of procedure, the draft resolutions were inspected and discussed in detail by the members of the Supervisory Board at its meetings, sometimes after preparatory work by the responsible committees, or approved in writing on the basis of documents circulated to the members. The Supervisory Board was always directly involved in decisions of material importance to the company. It discussed in detail the business trends described in the reports from the Board of Management and the prospects for the development of the Covestro Group as a whole, the individual segments, and the regions. The Supervisory Board continually ensured that the actions of the Board of Management were lawful, due and proper, and appropriate.

Meetings of the Full Supervisory Board and Member Attendance

In fiscal year 2023, the Supervisory Board held a total of ten meetings, all of which were also attended by at least one member of the Board of Management, except where issues were discussed that required them to be absent. In addition, the various committees of the Supervisory Board convened a total of 21 meetings. The Supervisory Board and the Presidial Committee held more meetings in fiscal 2023 than in prior years because of additional extraordinary meetings in connection with ADNOC’s expression of interest in relation to Covestro AG.

The regular Supervisory Board meetings were held physically, while the extraordinary meetings convened at short notice were held by video conference. Most of the committee meetings were held as video conferences, unless they took place on the same day as one of the Supervisory Board meetings held physically. The Audit Committee meeting for the half-year financial statements was also held physically.

The members of the Supervisory Board attended the meetings of the Supervisory Board of Covestro AG and its committees, as follows:

In total, Supervisory Board members attended meetings of the Supervisory Board and its committees with a 96.7% attendance rate. In addition, some Supervisory Board members attended meetings of the Sustainability Committee intended for guest attendance (the Chairman of the Supervisory Board attended all five meetings, Petra Kronen and Irena Küstner each attended four, Petra Reinbold-Knape three, and Regine Stachelhaus one). Moreover, Dr. Richard Pott attended all four meetings of the Audit Committee as a guest. The Chairman of the Audit Committee, Dr. Sven Schneider, attended as a guest five meetings of the Presidial Committee held to deal with ADNOC’s expression of interest; Frank Löllgen attended one of those meetings as a guest.

Based on its composition and experience, the Supervisory Board as a whole has in-depth industry expertise in the polymer sector in which Covestro operates.

The members of the Supervisory Board once again participated in continuing personal education in the reporting year 2023 in order to enhance the expertise of the Supervisory Board as a whole. A workshop organized by the Board of Management in connection with the strategy meeting was held in October 2023, at which Covestro-specific and other topics of relevance for Covestro were highlighted and discussed: influence of the people strategy on the successful transformation of the company, influence of research and development and of artificial intelligence on the sustainable growth of the company, and achieving climate neutrality through the circular economy.

The Chairman of the Supervisory Board was also available during the past fiscal year for discussions with investors. At one such discussion in October 2023, topics were discussed that fall within the Supervisory Board’s tasks and responsibilities. The special focus here was on Environmental, Social, and Governance (ESG) aspects and the strategy process.

Principal Topics Discussed by the Supervisory Board

The deliberations of the Supervisory Board focused on the Board of Management’s regular reports on business activities, which contained detailed information on the development of the sales and earnings for the Group and the segments as well as on the strategy, opportunities and risks situation, and personnel matters at Covestro.

The current challenging economic situation in connection with the acute crises and their impact on the company were part of every Supervisory Board meeting in the year 2023. At these meetings, the Supervisory Board received very detailed reports, dealt extensively with the existing challenges and the measures adopted by the Board of Management. In addition, the Supervisory Board concentrated on the following topics in individual meetings and also through circular resolutions:

On January 15, the Supervisory Board discussed the issue of bonuses (Covestro Profit Sharing Plan) for the Board of Management for the year 2022 and set them to zero by way of a circular resolution on the recommendation of the Human Resources Committee. A corresponding resolution had been adopted by the Board of Management for the employees.

In a further circular resolution, the Supervisory Board acceded to the request of CFO Dr. Thomas Toepfer for the early termination, on August 31, 2023, of his current contract, which was due to expire on March 31, 2026, in order to give Dr. Toepfer the opportunity to accept a new position as CFO at the European aircraft manufacturer Airbus.

At its two-day meeting on February 28 and March 1, 2023, the Supervisory Board dealt with strategic issues and the topics concerning the Financial Statements. The first day focused on the topic of the corporate strategy, and the Supervisory Board continued its discussions on strategic options under the current prevailing trends and general conditions that had begun in November 2022. On day two, the Supervisory Board discussed in detail the Financial Statements and Consolidated Financial Statements for fiscal 2022, and the Combined Management Report including the nonfinancial Group statement. It also reviewed in detail the audit report and the auditor’s oral report concerning the material results of the audit. In addition, the Supervisory Board examined internal risk reporting, which sets out the material risks for the Group and current developments in this regard, as well as the relevant countermeasures. Furthermore, the organization, statistics, training efforts, processes, and effectiveness of the Group’s compliance management system were reviewed in depth. In addition, items on the agenda and resolution proposals for the 2023 Annual General Meeting were updated or added. Various compensation issues were also discussed, and the Compensation Report of the Board of Management and the Supervisory Board for fiscal 2022 was approved. At this meeting, the Supervisory Board also dealt with its self-assessment regarding the effectiveness and efficiency of its work in fiscal 2022, in which an external review had additionally been carried out. On the whole, members found the Supervisory Board’s activity effective and efficient. They particularly valued the detailed discussions and exchanges with the Board of Management on issues relating to strategy, for which sufficient time was allowed at Supervisory Board meetings and the annual strategy workshop.

At the Supervisory Board meeting on April 19, 2023, the main focus was on the virtual Annual General Meeting taking place on the same day, which was held in the current virtual format in accordance with the amendments to the German Stock Corporation Act (AktG) of July 2022.

A major issue at the Supervisory Board meeting on June 15, 2023 was the continuation and conclusion of the strategy discussions conducted at the previous two Supervisory Board meetings, including the corresponding priorities regarding the next steps. The analysis of the Annual General Meeting held in April and future optimization measures were also discussed. In addition, the Supervisory Board approved the extension of a long-term purchasing contract for a crucial raw material at the meeting.

The Supervisory Board met on August 16, 2023, to appoint a successor for the position of CFO and to discuss the successor for the role of Labor Director. On the recommendation of the Human Resources Committee, the Supervisory Board resolved to appoint Christian Baier for the period from October 1, 2023 as CFO for Covestro AG. For the transition period from September 1 to 30, arising after CFO Dr. Thomas Toepfer stepped down on August 31, 2023, the Supervisory Board appointed Chief Executive Officer Dr. Markus Steilemann as interim CFO. In this context, the Supervisory Board discussed the adjustment of the schedule of duties for the Board of Management.

On the recommendation of the Human Resources Committee, the Supervisory Board resolved on August 18, 2023, by way of circulation to appoint Chief Technology Officer Dr. Thorsten Dreier as Labor Director. Furthermore, the Supervisory Board approved the schedule of duties proposed by the Board of Management from October 1, 2023 and the schedule of duties for the transition period from September 1 to 30.

At the Supervisory Board meeting on October 11, 2023, the focus was on the regularly scheduled topic of the corporate strategy, after the Supervisory Board had, as in previous years, addressed strategy issues in depth on the day before in a strategy workshop organized by the Board of Management. The workshop dealt with updating the corporate strategy after delving deeper into topics such as people strategy, growing digital, climate neutrality and circularity. Another important item of the agenda for this Supervisory Board meeting was looking in more depth at the issue of safety: In addition to the current occupational safety situation at the company, which is always discussed at every Supervisory Board meeting, in-depth analyses and statistics, findings and measures were presented and discussed.

At its meeting on December 6, 2023, the Supervisory Board considered various compensation issues. As regularly scheduled, it reviewed the Board of Management’s fixed compensation and considered the long-term variable compensation for the Board of Management. It decided, in accordance with the existing compensation system, to include a sustainability component relating to “Social” topics in the long-term variable compensation, comprising two metrics relating to occupational safety and employee engagement. The metrics for this sustainability component had been developed in the course of the year on a cross-committee basis and agreed with the Human Resources Committee, the Sustainability Committee, and the Audit Committee. In another important agenda item, the Supervisory Board looked in detail at the corporate planning for fiscal 2024 proposed by the Board of Management and the medium-term outlook also presented. It approved both the corporate plan and the financing framework proposed for fiscal 2024. In addition, it approved the Scope 3 targets adopted by the Board of Management and the accompanying publication schedule, after the Sustainability Committee had issued its corresponding recommendation. At this meeting the Supervisory Board also discussed the agenda and proposed resolutions for the Annual General Meeting 2024. After completion of the share buyback program and the Board of Management resolution on the retirement of the shares bought back and the resulting reduction in the capital stock and in the number of shares, the Supervisory Board approved the corresponding amendment to the Articles of Incorporation. At this meeting, the Supervisory Board also voted to issue an unqualified declaration of conformity with the German Corporate Governance Code (GCGC).

In addition, the Supervisory Board held four extraordinary meetings in the year 2023, on August 16, September 8, September 26, and October 2, and passed circular resolutions on August 23 and October 23, 2023. The extraordinary meetings of the Supervisory Board were used to give this body comprehensive information on the state of affairs of ADNOC’s expression of interest in relation to Covestro AG as well as for extended consultations following the relevant discussions at Presidial Committee meetings. At all four extraordinary Supervisory Board meetings, the Board of Management reported in detail on the state of affairs and on its assessment of the situation, as it had already done at each of the Presidial Committee meetings. On this basis, the Supervisory Board held in-depth discussions, including with the involvement of external advisers, and, as the Presidial Committee before it, agreed the next steps in close consultation with the Board of Management. By way of a circular resolution of August 23, 2023, the Supervisory Board transferred additional decision-making powers on matters of takeovers to the Presidial Committee and took a decision on Dr. Sven Schneider’s attendance at corresponding Presidial Committee meetings. The circular resolution of October 23 was about Frank Löllgen’s attendance at corresponding extraordinary Presidial Committee meetings.

Committees of the Supervisory Board

In the past fiscal year, the Supervisory Board had five permanent committees set up so that it can continue to exercise its duties effectively and efficiently. The committees prepared resolutions by the full Supervisory Board and provided information on other topics to be discussed by this body. Moreover, certain decision-making powers of the Supervisory Board were delegated to the committees to the extent legally permissible. The Supervisory Board currently has the following permanent committees: Presidial Committee, Audit Committee, Human Resources Committee, Nominations Committee, and Sustainability Committee.

The tasks and responsibilities of the standing committees and their current composition are described in greater detail in “Declaration on Corporate Governance” under “Committees of the Supervisory Board” in the Combined Management Report.

The meetings and decisions of all committees, and especially those of the Audit and Sustainability Committees, were prepared on the basis of reports and explanations provided by the Board of Management. The committee chairs regularly provided comprehensive reports on the work of the committees to the full Supervisory Board.

The Presidial Committee, on which shareholders and employees are equally represented, convened for one ordinary meeting in the year 2023. At this meeting on December 6, 2023, the Presidial Committee discussed the annual review of the Qualification Matrix of the Supervisory Board implemented in fiscal 2022. The review showed that the Qualification Matrix continues to be up to date since there were no changes in the composition of the Supervisory Board in the year 2023, and no changes to the qualifications of the individual Supervisory Board members.

In addition, the Presidial Committee held six extraordinary meetings in the year 2023, on July 19, August 15, August 24, September 22, October 18, and October 31, and passed one circular resolution on August 31, 2023. The subject of all extraordinary meetings of the Presidial Committee, as well as of the four extraordinary Supervisory Board meetings, was in-depth discussion of the respective state of affairs of ADNOC’s expression of interest in relation to Covestro AG. The extraordinary meetings of the Presidial Committee were also used to prepare for the subsequent extraordinary meetings of the Supervisory Board. As reported already, five of these extraordinary meetings were attended by the Chairman of the Audit Committee, Dr. Sven Schneider, as a guest participant and expert adviser, and one by Mr. Löllgen as guest participant and expert adviser, in addition to the members of the Presidial Committee, on which shareholders and employees are equally represented. At all extraordinary meetings, the Board of Management reported in detail on the state of affairs of ADNOC’s expression of interest and on its assessment of the situation. On this basis, the Presidial Committee held in-depth discussions, including with the involvement of external advisers, and agreed the next steps in close consultation with the Board of Management. The circular resolution of the Presidial Committee taken on August 31 related to a decision to engage external consultants.

The Audit Committee met a total of four times in the year under review: on February 28, April 26, July 28, and October 26, 2023, each time in the presence of the CFO and the auditor. At a working meeting on June 15, only members of the Audit Committee were present. The Audit Committee conducted a preparatory review of the Financial Statements of Covestro AG, the Consolidated Financial Statements of the Covestro Group, and the Combined Management Report for the Supervisory Board. In particular, it also discussed in detail the respective audit report and the oral report by the auditor on the material results of the audit. The Combined Management Report also included the Group’s nonfinancial statement. In conducting its review, the Audit Committee found no grounds for objections. It recommended to the Supervisory Board to approve the Financial Statements and Consolidated Financial Statements for fiscal 2022 as well as to consent to the Combined Management Report. In addition, the Audit Committee discussed with the Board of Management the half-year financial report in light of the results of the review by the auditor, and the Q1 and Q3 2023 quarterly statements prior to their publication.

The Audit Committee monitored the accounting and financial reporting process and the appropriateness and effectiveness of the internal control system, the risk management system, and the internal audit system, including sustainability-related aspects, and deliberated on the audit of the financial statements and compliance. In doing so, the Committee received reports, including from the heads of Corporate Audit and the Corporate Law, Intellectual Property & Compliance functions and from the auditor. No material weaknesses were identified in the internal control system for financial reporting purposes or the risk early warning system.

The Audit Committee additionally undertook preparations for the Supervisory Board’s proposal for the appointment of the financial statement auditor by the AGM, the engagement of the auditor, and agreement on the auditor’s fee. It monitored the quality of the audit and the independence of the auditor as well as the supplementary non-audit services provided in addition to the financial statement audit. In this context, the committee had the auditor confirm their independence.

The Audit Committee discussed the audit risk assessment, audit strategy, audit planning, key audit matters, and audit results with the auditor. The Chairman of the Audit Committee had regular feedback sessions with the auditor on the audit progress and reported on this to the Audit Committee.

Special topics discussed by the Audit Committee in the fiscal year under review were aspects of opportunities and risks as well as of regulatory requirements, such as the Chemicals Strategy for Sustainability (CSS), the Corporate Sustainability Due Diligence Directive (CSDDD), the cyber risk specifically with regard to the security of production and technical IT systems, and an update on tax positions and tax risks. Other special topics were the results of a readiness assessment of the risk management and internal control system, and dealing with the issue of a sustainability component relating to “Social” topics for the Board of Management compensation with the focus on checking the auditability of the selected metrics.

Furthermore, the Audit Committee obtained information on an ongoing basis on enhancements to the compliance management system (particularly regarding anti-corruption measures), the handling of suspected compliance violations, progress in significant litigation, new legal and regulatory risks, and the risk situation, risk tracking, and risk monitoring in the Group. The Corporate Audit function provided regular reports about risk assessments. The heads of the relevant corporate functions also participated in meetings of the Audit Committee on selected agenda items, reported on these, and answered questions. In addition, the Chair of the Audit Committee discussed important matters between meetings, particularly with the Supervisory Board Chair, the CFO, and the auditor. The key results of these discussions were reported regularly to the Audit Committee and the Supervisory Board. The Audit Committee continued its practice of closed sessions in the year under review. They allow the auditor and the committee during the meeting to have a discussion without the Board of Management being present.

The Human Resources Committee convened for a total of five meetings in the reporting year. Topics of particular importance that year were the search for and appointment of a successor for the position of CFO to replace Dr. Thomas Toepfer, who was stepping down, and the design of a sustainability component relating to “Social” topics for the compensation of the Board of Management with effect from the year 2024.

At its first meeting on January 13, 2023, the Human Resources Committee discussed the issue of bonuses (Covestro Profit Sharing Plan) for the Board of Management for the year 2022 and recommended that the Supervisory Board set it to zero, after the Board of Management had previously adopted a corresponding resolution for the employees.

In a circular resolution on January 15, 2023, the Human Resources Committee dealt with the request of CFO Dr. Thomas Toepfer for the early termination of his Board of Management contract, and recommended that the Supervisory Board agree to conclude a termination agreement with Dr. Toepfer.

At its meeting on February 21, 2023, the Human Resources Committee dealt, among other things, with an amendment to a metric with relevance for the Board of Management compensation that had become necessary, and recommended that the Supervisory Board agree to this amendment.

On August 10, 2023, the Human Resources Committee dealt with the successors for the positions of CFO and Labor Director. It recommended that the Supervisory Board appoint Christian Baier for the period from October 1, 2023 as CFO for Covestro AG. For the transition period from September 1 to 30, arising after CFO Dr. Thomas Toepfer had stepped down on August 31, 2023, the Human Resources Committee recommended the appointment of Chief Executive Officer Dr. Markus Steilemann as interim CFO. It also discussed the successor for the position of Labor Director.

On August 18, the Human Resources Committee recommended by way of circulation that the Supervisory Board appoint Dr. Thorsten Dreier, Chief Technology Officer, as Labor Director from September 1.

At the meeting on October 11, the Human Resources Committee dealt with the human resources planning and succession planning for the Board of Management, and with the design of a sustainability component relating to “Social” topics for the Board of Management compensation starting from 2024.

On December 6, 2023, the Human Resources Committee addressed the final proposal for this sustainability component for the compensation of the Board of Management, after the Sustainability Committee and the Audit Committee had also previously checked the concept, and recommended that the Supervisory Board accordingly approve this component for the variable long-term compensation. Other topics at this meeting included the annual review of the appropriateness of Board of Management compensation, long-term variable compensation of the Board of Management, and short-term variable compensation for the current year.

The Sustainability Committee convened for a total of five meetings. The main topics of their deliberations were the circular economy and the formulation of Scope 3 targets for the company.

At its first meeting on February 14, 2023, the Sustainability Committee dealt with its own targets for fiscal 2023 regarding circular economy and Scope 3 targets, and agreed an appropriate action plan. The current procedures in the industry regarding Scope 3 and the upstream side of Covestro (suppliers) regarding transformation to the circular economy were then examined at this meeting. The corresponding analysis of the downstream (customer) side then followed at the second meeting on March 31, also with initial feasibility studies and potential estimates. Elaboration of the details continued over the course of the year.

One focus of the meeting on May 31, 2023, was on the issue of human rights and corresponding due diligence obligations in the Supply Chain Act. The meeting on September 22, 2023, discussed the concept for the sustainability component relating to “Social” topics for the compensation of the Board of Management requested by the Supervisory Board and developed on a cross-committee basis. At this meeting, the Scope 3 targets were then presented and subsequently adopted, after elaboration of the accompanying implementation recommendations, at the Sustainability Committee meeting on November 20, 2023, and recommended for approval by the Supervisory Board. In addition, the committee looked at the sustainability reporting for the year 2023 at its November meeting.

At all the meetings during the year, current developments and requirements regarding EU chemicals policy, regulations, ratings, and rankings were discussed in addition to the specific topics mentioned. Where relevant, the discussion of all the topics addressed in the Sustainability Committee also included the discussion of company-specific impacts, risks, and opportunities associated with them.

The members of the Nominations Committee did not meet for any official meetings in the reporting year 2023. The aspects of the Qualification Matrix of the Supervisory Board that had still been developed in the previous year by the Nominations Committee were continued by the Presidial Committee. The members of the Nominations Committee will deal in fiscal 2024 with the upcoming elections of shareholder representatives for the 2025 Annual General Meeting since the periods of office for several of the representatives will expire on the day of the Annual General Meeting.

Financial Statements/Audit

The Financial Statements of Covestro AG were prepared in accordance with the requirements of the German Commercial Code (HGB), the German Stock Corporation Act (AktG), and the German Energy Industry Act (EnWG). The Consolidated Financial Statements of the Covestro Group were prepared in accordance with the German Commercial Code and the International Financial Reporting Standards (IFRSs) as adopted by the European Union (EU). The Combined Management Report including the Group’s nonfinancial statement was prepared in accordance with the German Commercial Code. The auditor, KPMG AG Wirtschaftsprüfungsgesellschaft, Düsseldorf, audited the financial statements of Covestro AG, the consolidated financial statements of the Covestro Group, and the Combined Management Report including the Group’s nonfinancial statement. KPMG AG Wirtschaftsprüfungsgesellschaft has audited Covestro’s financial statements since fiscal 2018. Marc Ufer and Dr. Kathryn Ackermann signed the Independent Auditor’s Report for fiscal year 2023. Both of them signed the Independent Auditor’s Report for first time on December 31, 2022. The conduct of the audit, key audit matters, and results of the audit are explained in the auditor’s reports. The auditor finds that Covestro has complied, as appropriate, with the German Commercial Code, the German Stock Corporation Act, and/or the IFRS regulations as adopted by the EU, and issues unqualified opinions on the Financial Statements of Covestro AG, the Consolidated Financial Statements of the Covestro Group, the Combined Management Report, including the nonfinancial Group statement. The Compensation Report was subjected to a substantive audit and issued with an audit opinion, which confirms that the report, including the related disclosures, complies in all material respects with the financial reporting requirements of Section 162 AktG. The Financial Statements of Covestro AG, the Consolidated Financial Statements of the Covestro Group, the Combined Management Report including the Group’s nonfinancial statement, and the audit reports were submitted to all members of the Supervisory Board. The Audit Committee and the Supervisory Board reviewed the financial statement documentation in depth after the auditor’s report was presented. The auditor attended both meetings.

The Supervisory Board examined the Financial Statements of Covestro AG, the Consolidated Financial Statements of the Covestro Group, and the Combined Management Report including the Group’s nonfinancial statement. It had no objections and thus concurred with the result of the audit.

The Supervisory Board approved the Financial Statements of Covestro AG and the Consolidated Financial Statements of the Covestro Group prepared by the Board of Management. The financial statements of Covestro AG are thus adopted. Since no net income was generated, there is no proposal for the use of distributable profit. The Board of Management and Supervisory Board jointly prepared the annual compensation report.

Corporate Governance and Declaration of Conformity

During the reporting year, the Supervisory Board again extensively addressed Covestro’s corporate governance, taking into account the German Corporate Governance Code and, together with the Board of Management, submitted an unqualified declaration of conformity in accordance with Section 161 of the German Stock Corporation Act in December 2023 based on the Code in the April 28, 2022, version. This declaration has been posted on Covestro’s website.

Expression of Appreciation from the Supervisory Board

The Supervisory Board would like to thank the Board of Management and all of Covestro’s employees for their unwavering dedication in the 2023 fiscal year. The Supervisory Board wishes all of them success in dealing with the current economic and geopolitical challenges in a time of multidimensional crises.

The Supervisory Board would also like to thank Covestro’s shareholders for the trust they have placed in the company.

Leverkusen, February 28, 2024

For the Supervisory Board

Dr. Richard Pott
Chair