Knorr Bremse : Declaration on Corporate Governance 2023

Corporate Governance Statement

for the 2023 Fiscal Year

2

K N O R R - B R E M S E A N N U A L R E P O R T 2 0 2 3

C O R P O R AT E G O V E R N A N C E S TAT E M E N T

Corporate Governance Statement for

the 2023 Fiscal Year

The Corporate Governance Statement pursuant to sections 289f, 315d of the German Commercial Code ("HGB") is the key instrument of corporate governance reporting (principle 23 of the German Corporate Governance Code as amended on April 28, 2022, "GCGC"). The Executive Board and Supervisory Board issue the statement jointly and are responsible for the parts of the report that relate to them.

Pursuant to section 317 (2) sentence 6 HGB, the audit of the information provided in accordance with sections 289f (2), 315d HGB by the auditor is to be restricted to establishing whether this information has been provided.

Declaration of Compliance of the Executive Board and Supervisory Board of Knorr-Bremse AG

The Executive Board and Supervisory Board of Knorr-Bremse AG adopted the following declaration of compliance with the German Corporate Governance Code pursuant to section 161 of the German Stock Corporation Act ("AktG") on December 15, 2023:

"The Executive Board and Supervisory Board of Knorr-Bremse AG Aktiengesellschaft (the "Company") declare as follows pursuant to section 161 (1) AktG:

The Executive Board and Supervisory Board of the Company last issued a declaration of compliance on December 8, 2022. Since that date the Company has complied with all recommendations of the German Corporate Governance Code as amended on April 28, 2022 ("GCGC 2022") with the following exception:

According to recommendation G.11 GCGC 2020, the Supervisory Board shall be permitted to retain or reclaim variable compensation of the Executive Board if justified. In the 2023 fiscal year the Company deviated from this recommendation and it will also partly deviate from it in 2024. Nevertheless, the Supervisory Board intends to include the customary clawback and malus provisions in the contracts with Executive Board members from the 2024 fiscal year onward. The necessary changes to the compensation system for the Executive Board will be submitted to the Annual General Meeting on April 30, 2024 for approval and gradually implemented contractually as part of contract extensions or new contracts.

Independently of this, the Supervisory Board believes that the Long-Term Incentive and Share Ownership Guidelines encourage the Executive Board members to act carefully, with a view to the long term and sustainably in the Company's interest. Furthermore, if Executive

K N O R R - B R E M S E A N N U A L R E P O R T 2 0 2 3

C O R P O R AT E G O V E R N A N C E S TAT E M E N T

3

Board members culpably act in dereliction of their duties the Supervisory Board shall be at liberty to claim damages pursuant to section 93 AktG.

Munich, December 15, 2023

Knorr-Bremse Aktiengesellschaft

The Executive Board

The Supervisory Board"

Relevant Details

of Corporate Governance Practice

Corporate Values and Internal Rules

In addition to the statutory regulations and the GCGC, responsible conduct in all areas of the

Group is of key importance for Knorr-Bremse AG.

Our principles of action are summarized in a Code of Conduct, which is binding on all employ- ees; it can be viewed on our website by following this link: knorr-bremse.com/en/company/compliance/. The Code of Conduct offers all employees of the entire Knorr-Bremse Group a guideline for a responsible approach to colleagues, business partners and authorities. As part of our compliance with capital markets legislation we also keep insider lists pursuant to Article 18 of the Market Abuse Regulation ("MAR") on an ad-hoc basis. All persons included in an insider list are instructed about the associated statutory duties and sanctions that apply to insider dealing and the unlawful disclosure of inside information.

Diversity also forms part of Knorr-Bremse's corporate culture beyond the statutory regula- tions. Knorr-Bremse does not tolerate any form of discrimination on account of gender, age, religion, illness, origin, skin color, sexual orientation or for any other reason. We pay attention to diversity and equal opportunity when filling positions. We aim to take women appropriately into account. Flexible working hour models that take individual needs into consideration promote equal opportunity. In view of the international nature of our business, intercultural diversity and tolerance are important values at Knorr-Bremse. The Knorr-Bremse Code of Conduct sets out measures in the fields of occupational safety, human rights and inclusion. Our employees receive separate training on these issues via an e-learning tool. They are able to engage with a variety of positions in talks and workshops on sociopolitical topics. Further details on diversity can be found in the next section, Diversity on the Executive Board and Supervisory Board.

Additional information on how we exercise our social responsibility and promote sustainable growth, and on our further sociopolitical engagement are also set out in our non-financialstatement (pursuant to section 315b HGB) that you can find on page 42 ff. of the annual report. You can also find further information on the website in the Responsibility section.

Compliance Management System

The following aspects are also important to us: At Knorr-Bremse we do not tolerate any criminal acts such as corruption or anti-competitive practices. For us, sustainable growth goes hand in hand with integrity in conduct. We comply with the laws in force and maintain a Group-wide compliance organisation. Anyone who uncovers indications of criminal activity or serious regulatory or statutory breaches within the Knorr-Bremse Group can report them anonymously and, if desired, in a protected manner via our externally operated whistleblower system or our ombudsperson; Every report received here will be investigated. Furthermore, we have no tolerance for retaliation. Whistleblowers who submit reports in good faith should not suffer

4

K N O R R - B R E M S E A N N U A L R E P O R T 2 0 2 3

C O R P O R AT E G O V E R N A N C E S TAT E M E N T

any disadvantages, provided that the Knorr-Bremse Group can influence this in accordance with applicable law.

The key areas of the compliance organization led by the Chief Compliance Officer (CCO) include preventing and combating corruption, ensuring fair competition and avoiding conflicts of interest. This is designed to avoid breaches of our guidelines, primarily our binding Code of Conduct. Preventive measures such as employee training, focused communication with employees and executives on compliance-related topics, instructions of suppliers and an accompanying management of risks are intended to help in this regard. The CCO, who is responsible for compliance with the defined Knorr-Bremse guidelines, reports regularly to the Compliance Committee, which is headed by the Executive Board member for Integrity and Legal, and the Audit Committee of the Supervisory Board. The global locations form an important part of our compliance strategy and organization. Compliance officers with regional responsibility for Asia/Australia, Europe/Africa and the Americas are involved in the regional implementation of compliance management; they are also supported by local compliance officers in the Asia/Australia and Europe/Africa regions.

Further information on the tasks and work of the compliance organisation at Knorr-Bremse can be found in the chapter Sustainability and non-financial statement, Compliance and anti-corruption, in the combined management report 2023.

Remuneration of Executive Board and Supervisory Board members

The applicable compensation system pursuant to section 87a (1) and (2) sentence 1 AktG for the members of the Executive Board and the resolution adopted at the 2020 Annual General Meeting pursuant to section 113 (3) AktG on the compensation and compensation system for the members of the Supervisory Board in addition to the most recent adjustments resolved at the 2022 Annual General Meeting are publicly available on our website by following this link:ir.knorr-bremse.com/websites/knorrbremse_ir/English/7000/corporate-governance.html.The Compensation Report for the past fiscal year pursuant to section 162 AktG was prepared in accordance with statutory requirements and audited by the auditor; it can also be retrieved from our website (including the auditor's opinion) as of the adoption of the corresponding resolution at the Annual General Meeting on April 30, 2024. Moreover, it is also available as part of the annual report. The Compensation Report includes further details of the Executive Board compensation, including variable compensation components, and of the Supervisory Board compensation.

Share Ownership on the Executive Board and Supervisory Board

We publish reportable securities transactions of members of the Executive Board and ­Supervisory Board of Knorr-Bremse AG pursuant to Article 19 MAR (referred to as directors' dealings) immediately following receipt of the notification. You will find an overview of the transaction under the Investor Relations tab of our website in "Investor News."

As of December 31, 2023, the members of the Executive Board held a total of around 0.0168% of shares in Knorr-Bremse AG. Among the members of the Supervisory Board, to our knowledge Franz-Josef Berkeneder, Kathrin Dahnke, Michael Jell, Werner Ratzisberger and Sylvia Walter all held small direct interests in Knorr-Bremse AG as of December 31, 2023.

K N O R R - B R E M S E A N N U A L R E P O R T 2 0 2 3

C O R P O R AT E G O V E R N A N C E S TAT E M E N T

5

Corporate Communications and Transparency

Our corporate communications provide comprehensive and prompt information. Details and explanations of our business performance can be found in the annual report and in our quarterly reports, financial reporting, press releases and ad-hoc reports. All publications are available on our website. We hold press conferences and conference calls at important events.

The Articles of Association, the rules of procedure of the Supervisory Board, the reports of the Supervisory Board from the 2018 fiscal year onward, declarations of compliance from the 2018 fiscal year onward and the corporate governance reports for fiscal years 2018 to

2019 and corporate governance statements from the 2018 fiscal year onward can be found at:ir.knorr-bremse.com/websites/Knorrbremse_ir/English/7000/corporate-governance.html.

Shareholders and Annual General Meeting

Knorr-Bremse AG shareholders exercise their rights at the Annual General Meeting. The Annual General Meeting decides on matters including the appropriation of retained net earnings, the discharge to be granted to members of the Executive Board and Supervisory Board, the approval of the Compensation Report that must be prepared annually and the election of the shareholder representatives to the Supervisory Board. In addition, the compensation system for the Executive Board and the compensation of the members of the Supervisory Board must be submitted to the Annual General Meeting for approval at least every four years. Amendments to the Articles of Association and specific capital measures are also resolved by the Annual General Meeting and implemented by the Executive Board, where necessary with the approval of the Supervisory Board.

Shareholders can exercise their voting rights at the Annual General Meeting either in person or through a representative of their choice, an authorized proxy of the Company who is bound by the shareholder's instructions, or by mailing in their response. The Executive Board makes it easier for shareholders to take part in the Annual General Meeting by using electronic means of communication, in particular the Internet; the authorized proxies can be contacted even while the Annual General Meeting is ongoing.

The Chair of the Supervisory Board chairs the Annual General Meeting and reports on the Supervisory Board's work and that of its committees during the past fiscal year. The Executive Board explains the annual financial statements, the consolidated financial statements, the combined management report, the dependent company report, the remuneration report, the non-financial statement and the proposals for appropriating net profit agreed with the Supervisory Board, as well as any other motions put forward for a resolution.

In particular, shareholders can put forward motions on resolutions proposed by the Executive

Board and Supervisory Board and subsequently challenge resolutions by the Annual General

Meeting.

On the basis of the new statutory regime the 2023 Annual General Meeting of Knorr-Bremse AG on May 5, 2023 was held as a virtual Annual General Meeting without the physical presence of shareholders or their representatives. In the course of this meeting a resolution was passed to add a provision to the Company's Articles of Association enabling the Executive Board to provide for the Annual General Meeting to be held in virtual format for an authorization period limited to 2 years. The Executive Board made use of this authorization for the 2024 Annual General Meeting, which will be held on April 30, 2024, in consultation with the Supervisory Board. The reports, documentation and information required for the Annual

6

K N O R R - B R E M S E A N N U A L R E P O R T 2 0 2 3

C O R P O R AT E G O V E R N A N C E S TAT E M E N T

General Meeting pursuant to the German Stock Corporation Act can be retrieved from our website from March 21, 2024, onward, in addition to the agenda for the Annual General Meeting and any countermotions or nominations by shareholders that are to be made available. Shareholders will be able to cast their vote in accordance with the provisions that apply for the implementation of virtual Annual General Meetings.

Description of the Operations of the Executive Board

and Supervisory Board and the Composition and

Operations of the Supervisory Board Committees

Composition and Operations of the Executive Board

C O M P O S I T I O N O F T H E E X E C U T I V E B O A R D

As stipulated by the Articles of Association, the Executive Board of Knorr-Bremse AG consists of at least two members. As of December 31, 2023, the Executive Board had five members:

• Marc Llistosella was elected as a member of the Executive Board of Knorr-Bremse AG and its Chair with effect from January 1, 2023. As Chief Executive Officer (CEO) he is responsible in particular for Strategy, Communication, IT, Information Security, Corporate Security, Internal Audit and Digitalization.
• Dr. Nicolas Lange was appointed as successor of Dr. Jürgen Wilder on the Executive Board of Knorr-Bremse AG with effect from October 1, 2023, with global responsibility for the Rail Vehicle Systems division. Dr. Wilder resigned from the Executive Board with effect from the end of September 30, 2023, and left the Company.
• Bernd Spies has been a member of the Executive Board of Knorr-Bremse AG since March 12, 2022, with global responsibility for the Commercial Vehicle Systems division.
• Dr. Claudia Mayfeld has been a member of the Executive Board of Knorr-Bremse AG since May 1, 2021. She is responsible in particular for Integrity, Legal and Human Resources.
• Frank Markus Weber has been a member of the Executive Board of Knorr-Bremse AG since July 1, 2020. As Chief Financial Officer (CFO) he is responsible in particular for Finance,
  Controlling,­M&A, Sustainability and Investor Relations.

The following table gives an overview of the current responsibilities of the Executive Board of

Knorr-Bremse AG since October 1, 2023:

Chief Executive Officer (CEO)			Chief Financial Officer (CFO)		Member of the Executive		Member of the Executive
(Llistosella)			(Weber)		Board responsible for Truck		Board responsible for Rail
					(Spies)		(Dr. Lange)
• Strategy & Portfolio			• Accounting / Taxes		Global Division Truck		Global Division Rail
• Communications			• Controlling		• Research / Development		• Research / Development
• Internal Audit			• Risk Management		• Procurement / Supply		• Procurement / Supply
• Security			• Finance & Treasury		Chain Management		Chain Management
• Information Technology			• Insurances		• Production / Quality		• Production / Quality
• Information Security			• Investor Relations		Assurance		Assurance
• Digitalization			• M&A		• Sales / Marketing /		• Sales / Marketing /
• Business Services			• Corporate Social		Distribution		Distribution
(Knorr Excellence)			Responsibility (CSR) &		• Finance / Controlling		• Finance / Controlling
			Environmental, Social, and
• KB Global Care e.V. Affairs
		Governance (ESG)
			• Real Estate Management

Member of the Executive Board responsible for Integrity & Legal

(Dr. Mayfeld)

• Legal for all divisions and all matters
• Compliance
• Data Protection
  (process & regulatory issues)
• Corporate Office
• Intellectual Property
• Human Resources

K N O R R - B R E M S E A N N U A L R E P O R T 2 0 2 3

C O R P O R AT E G O V E R N A N C E S TAT E M E N T

7

With regard to compliance with statutory requirements for the equal participation of women and men in leadership positions on the Executive Board and the diversity concept for the Executive Board please see the description below.

Operations of the Executive Board

The Executive Board as the management body manages the Company's operations, defines the strategy and implements it in consultation with the Supervisory Board. The members of the Executive Board are committed to the Company's interests and are subject to a comprehensive non-compete clause for the duration of their work for the Company. The members of the Executive Board collectively bear responsibility for the entire management of the Company and decide on fundamental questions of business policy and corporate strategy as well as on the annual and multi-year planning. Irrespective of the Executive Board's overall responsibility, the individual members of the Executive Board manage the responsibilities for their divisions.

The Executive Board ensures that legal provisions, official regulations and internal guidelines are followed within the Company and works to make sure they are observed by Group companies (Compliance). The tasks of the Executive Board also include the establishment of an internal control, risk and compliance management system that is appropriate and effective in view of the volume of the Company's business operations and its risk situation; its principles are set out in the Group's non-financialstatement (see p. 42 ff. of the Annual Report).

The Executive Board and Supervisory Board collaborate closely for the benefit of the Company. Rules of procedure adopted by the Supervisory Board regulate the allocation of responsibilities on the Executive Board, the modalities of decision-making and further aspects. The rules of procedure and the associated allocation of responsibilities are regularly reviewed by the Supervisory Board to determine whether they need to be updated.

The Executive Board provides the Supervisory Board with regular and comprehensive reporting on business performance, strategy and risks. In addition to the Supervisory Board meetings, which are usually attended by the Executive Board, the chairs of both boards consult on a regular basis on all relevant current issues, including at short notice and on an ad- hoc basis. In addition, the Chair of the Supervisory Board, working in close consultation with the Executive Board, takes part in investor meetings to an appropriate extent where such meetings relate to the work and tasks of the Supervisory Board. The Report of the Supervisory Board (starting on page 12 of the Annual Report) contains additional information on the ­collaboration of the Executive Board and Supervisory Board in the reporting year.

The second management level in the Group includes the responsible heads of division of Knorr-Bremse AG, the managing directors of the European lead companies Knorr-Bremse Systeme für Schienenfahrzeuge GmbH and Knorr-Bremse Systeme für Nutzfahrzeuge GmbH and the managing directors of the North American and Asia-Pacific lead companies. The managing directors are responsible for the results of their subordinated companies and are in close dialogue with the Executive Board. The departments of Knorr-Bremse AG assist the Executive Board.

Composition and Operations of the Supervisory Board

C O M P O S I T I O N O F T H E S U P E R V I S O R Y B O A R D A S O F D E C E M B E R 31, 2 0 2 3

In accordance with the German Codetermination Act ("MitbestG"), the Supervisory Board of Knorr-Bremse AG is made up of twelve members with equal representation. The six shareholder representatives are elected by the Annual General Meeting while the six employee representatives are elected by the employees at the German Knorr-Bremse locations.

8

K N O R R - B R E M S E A N N U A L R E P O R T 2 0 2 3

C O R P O R AT E G O V E R N A N C E S TAT E M E N T

The Supervisory Board is reelected at least every five years. If a member of the Supervisory Board steps down before the end of their term of office, a successor is appointed by the court or by the Annual General Meeting if an already elected substitute member is not available Supervisory Board members appointed by the court must stand for election at the next Annual General Meeting (shareholder representatives) or at the next election date (employee representatives). The Supervisory Board members currently in office have been appointed until the Annual General Meeting in 2026.

Following the retirement of Erich Starkl, member of the Supervisory Board elected by the em- ployees, at the end of June 30, 2023, Wolfgang Nirschl was appointed by the court as member of the Supervisory Board and successor to Mr. Starkl on July 3, 2023.

The composition of the Supervisory Board as of December 31, 2023, is thus as follows:

Membership of supervisory committees to be established as required by

	Practiced
Name & date of birth		profession
Dr. Reinhard Ploss *	Chair of the
	Supervisory Board
Born in 1955

Franz-Josef Birkeneder	Deputy Chair of the
	Supervisory Board
Born in 1960
	Support for global
	projects
Kathrin Dahnke *	Independent manage-
	ment consultant
Born in 1960

Michael Jell	Full-time member of the
	Works Council of
Born in 1963	Knorr-Bremse Systeme für
	Schienenfahrzeuge GmbH,
	Knorr-Bremse AG,
	Knorr-Bremse Services
	GmbH

Member since

2022

2016

2018

2014

Appointed until

2026

2026

2026

2026

Memberships of committees

• Chair of the Executive Committee
• Member of the Strategy Committee
• Member of the Audit Committee
• Chair of the Nomination Committee
• Chair of the Mediation Committee

• Member of the Executive Committee
• Member of the Strategy Committee
• Member of the Audit Committee
• Member of the Mediation Committee
• Chair of the Audit Committee
• Member of the Nomination Committee
• Member of the Mediation Committee

• Member of the Executive Committee
• Member of the Mediation Committee
• Member of the Strategy Committee (as of July 07, 2023)

law or of comparable German or foreign control committees of commercial enterprises (as of Dec. 31, 2023)

German Supervisory Boards:

• Member of the Supervisory Board of Deutsche Telekom AG
  (since April 2023)

Comparable Control Committees:

• Ordinary member of the TUM University Council
• Member of the Board of Trustees of Foundation for Demoscopy Allensbach
• Member of the Quantum Computing Advisory Board of Deutsches Zentrum für Luft- und Raumfahrt e. V. (DLR)
• Chair of Qutac (Quantum Technology & Application Consortium) Executive Committee
• Honorary member of Board of Trustees, Stifterverband für die Deutsche Wissenschaft
• Chair of the Advisory Board
  of CustomCells Holding GmbH (since September 2023)

German Supervisory Boards:

• None

Comparable Control Committees:

• None

Representative of senior executives

German Supervisory Boards:

• Member of the Supervisory Board and Chair of the Audit Committee of B. Braun SE
• Member of the Supervisory Board and Chair of the Audit Committee of Jungheinrich AG
• Member of the Supervisory Board of Aurubis AG
• Member of the Supervisory Board of Fraport AG (since May 2023)

Comparable Control Committees:

• None

German Supervisory Boards:

• None

Comparable Control Committees:

• None

Employee representative

K N O R R - B R E M S E A N N U A L R E P O R T 2 0 2 3

C O R P O R AT E G O V E R N A N C E S TAT E M E N T

9

Name & date of birth

Dr. Sigrid Evelyn

Nikutta *

Born in 1969

Wolfgang Nirschl

Born in 1977

Werner Ratzisberger

Born in 1967

Annemarie Sedlmair

Born in 1987

Dr. Stefan Sommer *

Born in 1963

Julia Thiele-Schürhoff

Born in 1971

Dr. Theodor Weimer *

Born in 1959

Sylvia Walter

Born in 1965

Practiced profession

Member of the Executive

Board (Goods Traffic)

of Deutsche Bahn AG

and Chair of the Executive

Board of DB Cargo AG

Director and 2nd Authorized Representative of IG Metall trade union, Passau office

Full-time member of the Works Council

of Knorr-Bremse Systeme für Nutzfahrzeuge GmbH

IG Metall district leadership, Bavaria

Chair of the Executive Board of Knorr-Bremse Global Care e. V. and Member of the Executive Board of Heinz Hermann Thiele Family Trust (since April 2023)

Chief Executive Officer of Deutsche Börse AG

Accounting employee - accountant, Member of the Works Council of Hasse & Wrede GmbH

Member since

2022

2023

2006

2019

2021

2016

2020

2021

Appointed until

2026

2026

2026

2026

2026

2026

2026

2026

Memberships of committees

• Member of the Strategy Committee (as of May 04, 2023)
• None
• Member of the Audit Committee
• None

• Chair of the Strategy Committee

• Member of the Nomination Committee
• Member of the Strategy Committee
• Deputy Chair of the Supervisory Board
• None

Membership of supervisory committees to be established as required by

law or of comparable German or foreign control committees of commercial enterprises (as of Dec. 31, 2023)

German Supervisory Boards:

• None

Comparable Control Committees:

• Chair of the Board of Trustees
  of Deutsches Institut für Wirtschafts- forschung (DIW)
• Member of the University Council of Bielefeld University

German Supervisory Boards:

• None

Comparable Control Committees:

• None

Employee representative

German Supervisory Boards:

• None

Comparable Control Committees:

• None

Employee representative

German Supervisory Boards:

• Member of the Supervisory Board of Bosch Rexroth AG
  (as of February 2023)

Comparable Control Committees:

• Member of the Advisory Board of Fachakademie für Arbeitsrecht der Kritischen Akademie Inzell

Employee representative

German Supervisory Boards:

• Chairman of the Supervisory Board of Jost Werke AG

Comparable Control Committees:

• Member of the Presidential Council of DEKRA e.V.
• Member of the Board of Directors of Aeva Inc., California, US (since November 2023)
• Chair of the Advisory Board of In-Tech GmbH (until July 2023)

German Supervisory Boards:

• None

Comparable Control Committees:

• None

German Supervisory Boards:

• Member of the Supervisory Board of Deutsche Bank AG

Comparable Control Committees:

• None

German Supervisory Boards:

• None

Comparable Control Committees:

• None

Employee representative

• The Supervisory Board considers the Supervisory Board member to be independent of the company and its executive board and of the controlling shareholder.

10

K N O R R - B R E M S E A N N U A L R E P O R T 2 0 2 3

C O R P O R AT E G O V E R N A N C E S TAT E M E N T

All Supervisory Board members comply with the recommendation set out in C.4 and C.5 GCGC to limit the number of supervisory board mandates.

The resumes of the Supervisory Board members listed above are available to retrieve online at: knorr-bremse.com/en/company/management/.

The Supervisory Board's composition is such that its members as a whole are familiar with the sector in which the Company operates and have the knowledge, skills and specialist experience to ensure the due and proper performance of its tasks.

With regard to compliance with statutory requirements for the equal participation of women and men in leadership positions on the Supervisory Board, the profile of skills and expertise decided by the Supervisory Board and the diversity concept please see the description below.

The profile of skills and expertise of the Supervisory Board includes stipulations with respect to the independence of the Supervisory Board members that match the recommendations of the GCGC. The Supervisory Board judges that, as of December 31, 2023, five of the six shareholder representatives on the Supervisory Board, namely Dr. Reinhard Ploss, Kathrin Dahnke, Dr. Sigrid Nikutta, Dr. Stefan Sommer and Dr. Theodor Weimer, can be regarded as being independent within the meaning of recommendation C.6 GCGC. By contrast, in the Supervisory Board's assessment Ms. Julia Thiele-Schürhoff is not to be regarded as being independent due to her indirect interests in KB Holding GmbH, Grünwald, which is considered a controlling shareholder within the meaning of the GCGC. This means that, in the Supervisory Board's opinion, the Supervisory Board has a sufficient number of independent members, also taking into account the ownership structure. Recommendation C.9 GCGC is thereby also observed, according to which, if a supervisory board comprises more than six members, at least two shareholder representatives must be independent of the controlling shareholder.

O P E R AT I O N O F T H E S U P E R V I S O R Y B O A R D

The Supervisory Board advises and monitors the Executive Board. It is the responsibility of the Supervisory Board to decide on the appointment of Executive Board members and the rules of procedure and responsibilities of the Executive Board. It examines the annual financial statements, the management report and the recommendation on the appropriation of net profit, the consolidated financial statements and the combined management report and approves the annual financial statements of Knorr-Bremse AG and the consolidated ­financial statements, taking into account the auditor's audit reports and the findings of the audit by the Audit Committee. The Supervisory Board regularly discusses the planning and strategy together with the quarterly and half-yearly financial reports. Material Executive Board decisions - such as major acquisitions, divestments and financial measures - are subject to its approval.

The rules of procedure that the Supervisory Board has adopted can be viewed on our website at:ir.knorr-bremse.com/websites/Knorrbremse_ir/English/7000/corporate-governance.html(German version only). In the event of a tied vote on the Supervisory Board, the Chair has two votes. The Supervisory Board can also make decisions through a written circulation proce- dure. The Supervisory Board regularly meets without the Executive Board.