Corporate Governance Report and Declaration on Corporate Governance

The legal form of the Company is that of a partnership limited by shares (Kommanditgesellschaft auf Aktien - KGaA). Their corporate bodies provided for by statutory law are the General Meeting, the Supervisory Board and the General Partner, which is Fresenius Medical Care Management AG. In 2016 as the year under review, there were no significant changes to the Group's management and supervision structure.

Read more about our Group's management and supervisory structure.

Please refer also to our Articles of Association, which also specify the responsibilities of the bodies of the company.

The German Stock Corporation Act prescribes a dual management system for stock corporations (Aktiengesellschaft) as well as for partnerships limited by shares consisting of a management body and a supervisory board. The peculiarity in the case of the legal form of a KGaA is that its business activities are conducted by a personally liable shareholder (General Partner). In the case of FMC-AG & Co. KGaA, this is Fresenius Medical Care Management AG, whose Management Board is also responsible for conducting the business activities of the KGaA. Within the scope of statutory allocation of competences, the Supervisory Board is responsible for supervising and advising the Management Board and is involved in making decisions that are fundamental to the Company. The duties and responsibilities of both bodies are clearly defined by legislation and are strictly separated from one another. In addition to the Company's Supervisory Board, Fresenius Medical Care Management AG has its own Supervisory Board.

The Management Board of Fresenius Medical Care Management AG

The General Partner - Fresenius Medical Care Management AG - represented by its Management Board, which acts on its own responsibility, manages the Company and conducts the Company's business. Its actions and decisions are directed towards the interests of the Company. In the year under review, the Management Board was composed of seven members, with a change of personnel taking place at the end of the first quarter of the year under review. With effect as of March 31, 2016 Mr. Roberto Fusté, Management Board member for the Asia-Pacific region, resigned from the Management Board; with effect as of April 1, 2016 Mr. Andreas Hendrik (Harry) de Wit has been appointed as a member of the Management Board for the Asia-Pacific region.

In addition to observing legislation, the Articles of Association and the principles as explained herein, the General Partner’s Management Board conducts the business activities of the Company in accordance with the applicable rules of procedure, as amended on December 29, 2016, within the meaning of section 77 para. 2 of the German Stock Corporation Act (Aktiengesetz – AktG) and section 4.2.1 sentence 2 of the Code. These rules of procedure define the principles of cooperation and provide for the schedule of responsibilities. Matters of special significance and scope are decided by the full Management Board in accordance with the rules of procedure. In order to increase the efficiency of the Management Board’s work, the General Partner’s Supervisory Board established a Management Board Committee for certain cross-departmental matters. Such Management Board Committee essentially deals with corporate matters of subsidiaries of FMC-AG & Co. KGaA or acquisitions that do not reach the minimum relevance and importance level required for being referred to the entire Management Board. Apart from the Chairman of the Management Board and the Chief Financial Officer, the Management Board Committee, which consists of at least three members, must include the Management Board member responsible for the respective matter or another Management Board member appointed by the Chairman at his reasonable discretion in each case. In its meetings the Management Board Committee decides with a simple majority of the votes cast; outside of meetings the Management Board Committee decides with the simple majority of its members.

The rules of procedure determine that meetings of the Management Board are held as the circumstances require, but at least twelve times a year.

The meetings and the taking of resolutions by the Management Board are led by the Chairman of the Management Board. If he is unavailable, this task resides with the Management Board member named by the Chairman, or, if no member has been named, with the participating Management Board member most senior in office. The Chairman of the meeting determines the order of the agenda items and the modus of voting. Unless unanimity or the acting of all members of the Management Board is required by mandatory legal regulations or the Articles of Association, the Management Board adopts resolutions at meetings by simple majority of votes cast, and outside the meetings by simple majority of its members. In case of a voting tie, the Chairman of the Management Board has the casting vote.

The members of the Management Board and their areas of responsibility are introduced in the section Management Board.

In various relevant and important cases, the rules of procedure require the Management Board to obtain the prior approval of the Supervisory Board or the competent Supervisory Board committee of the General Partner.

The Supervisory Board of Fresenius Medical Care Management AG

As a stock corporation, Fresenius Medical Care Management AG also has its own Supervisory Board. According to the Articles of Association the Supervisory Board consists of six members. In the year under review, initially six members were in office and as of June 30, 2016 five members. With effect as of June 30, 2016 Mr. Stephan Sturm has been appointed as Chairman. Until that point in time Dr. Ulf M. Schneider acted as Chairman. Other members of the Supervisory Board of Fresenius Medical Care Management AG were in the year under review Dr. Dieter Schenk (Vice Chairman), Rolf A. Classon, William P. Johnston and Dr. Gerd Krick as well as Dr. Walter L. Weisman until the end of the Annual General Meeting of Fresenius Medical Care Management AG on May 11, 2016 and Dr. Ulf M. Schneider until resigning from the Supervisory Board on June 30, 2016. Mr. Stephan Sturm was elected as member of the Supervisory Board on May 11, 2016. With regard to candidates proposed by the Supervisory Board to the Annual General Meeting of Fresenius Medical Care Management AG the Supervisory Board has ensured that each candidate would be able to meet the time requirements for this position. Further information on the members of the Supervisory Board of Fresenius Medical Care Management AG can be found in the section Supervisory Board.

In addition to this, for the year under review the following information is provided with regard to the chairmen of the Supervisory Board of Fresenius Medical Care Management AG, Dr. Schneider (chairman until June 30, 2016) as well as for Mr. Stephan Sturm (chairman as of June 30, 2016):

Dr. Ulf M. Schneider
Chairman and member of the management board of Fresenius Management SE, general partner of Fresenius SE & Co. KGaA (until June 30, 2016)

SUPERVISORY BOARD:
Fresenius Kabi AG (Chairman and member until June 30, 2016)

OTHERS:
Fresenius Kabi USA, Inc., U.S. (member of the Board of Directors until June 30, 2016)
E. I. du Pont de Nemours and company, U.S. (member of the Board of Directors)

Mr. Stephan Sturm
Chairman of the management board (as of July 1, 2016) and Chief Financial Officer of Fresenius Management SE, general partner of Fresenius SE & Co. KGaA

SUPERVISORY BOARD:
Fresenius Kabi AG (deputy chairman until 29 August 2016, Chairman as of 29 August 2016)
VAMED AG, Austria (deputy chairman)
Deutsche Lufthansa AG

OTHER:
No other mandates

Because of his extraordinary contributions to the development of the Company and his comprehensive experience, Dr. Ben Lipps is honorary chairman of the Supervisory Board of Fresenius Medical Care Management AG.

The Supervisory Board of Fresenius Medical Care Management AG appoints the members of the Management Board and supervises and advises the Management Board in its management responsibilities. In accordance with section 5.1.3 of the Code, the Supervisory Board has established rules of procedure. Irrespective of the independence requirements according to statutory rules and of the recommendations of the Code, the so-called Pooling Agreement entered into, among others, between Fresenius Medical Care Management AG and Fresenius SE & Co. KGaA provides that at least one third (and at least two) of the members of the Supervisory Board of Fresenius Medical Care Management AG must be independent members. Pursuant to the Pooling Agreement, an "independent member" is a member of the Supervisory Board with no substantial business or professional relationship with FMC-AG & Co. KGaA, with its General Partner, with Fresenius SE & Co. KGaA, or with its general partner Fresenius Management SE, or with any affiliates of these companies.

Committees of the Supervisory Board of Fresenius Medical Care Management AG

From the midst of its members, the Supervisory Board forms qualified committees for the efficient exercise of its responsibilities, which prepare the matters for deliberation and resolutions of the Supervisory Board. The Supervisory Board regularly and timely receives briefings on the committees’ work.

The Supervisory Board of FMC-AG & Co. KGaA advises and supervises the business activities as conducted by the General Partner and performs the other duties assigned to it by law and by the Articles of Association. It is involved in strategy and planning as well as all matters of fundamental importance for the Company.

The Supervisory Board of FMC-AG & Co. KGaA consisted in the year under review of the following six members: Dr. Gerd Krick (Chairman), Dr. Dieter Schenk (Vice Chairman), Rolf A. Classon and William P. Johnston. Until the completion of the Annual General Meeting of FMC-AG & Co. KGaA on May 12, 2016 also Dr. Walter L. Weisman and Prof. Dr. Bernd Fahrholz were members of the Supervisory Board; with effect as of that date, Ms. Deborah Doyle McWhinney and Ms. Pascale Witz have been elected as additional members to the Supervisory Board. In accordance with section 5.4.1 para. 4 of the Code, the Supervisory Board has ensured that both candidates proposed to the Annual General Meeting of the Company for election to the Supervisory Board would be able to meet the time requirements for this position.

Information on the members of the Supervisory Board is also available in the Supervisory Board section.

Because of his extraordinary contributions to the Company's development and his comprehensive experience, Dr. Ben Lipps is also honorary chairman of the Supervisory Board of FMC-AG & Co. KGaA.

All members of the Supervisory Board are elected by the General Meeting of FMC-AG & Co. KGaA as the competent election body according to the provisions of the German Stock Corporation Act by a simple majority of the votes cast. Fresenius SE & Co. KGaA is excluded from voting on this issue (further explanations on this matter can be found under “Further Information regarding Corporate Governance” in the section titled “Shareholders”). When discussing its recommendations for the election of members of the Supervisory Board to the General Meeting, the Supervisory Board will take into account the international activities of the enterprise, potential conflicts of interest, what it considers an adequate number of independent Supervisory Board members and diversity. As the composition of the Supervisory Board needs to be aligned with the interests of the enterprise and has to ensure the effective supervision and consultation of the Management Board, it is a matter of principle and of prime importance that each member is suitably qualified. In the company’s interest not to limit the selection of qualified candidates in a general way, the Supervisory Board confines itself in compliance with its statutory obligations (section 111 para. 5 German Stock Corporation Act) to pursue self-defined targets for the representation of female Supervisory Board members (for details see also the paragraph “Diversity and definition of targets”) and particularly refrains from an age limit for its members and from a duration limit on the term of membership of the Supervisory Board. Therefore, with the exception of the determination of target figures for women’s proportion on the Supervisory Board, the Supervisory Board has refrained from determining and taking into account specific objectives with respect to its composition when proposing candidates and from publishing the state of their implementation in the Corporate Governance Report. Accordingly, non-compliance is declared in the declaration of compliance of the 2016 financial year also insofar.

Simultaneous membership in both the Supervisory Board and the Management Board is not permissible. In the year under review, the Supervisory Board did not include any members who were also members of the Management Board of the General Partner during the previous two years. The members of the Company’s Supervisory Board are independent in their decisions and are not bound by requirements or instructions of third parties.

The Supervisory Board consists of what it considers an adequate number of independent members, who also do not entertain any personal or business relations with the Company, its corporate bodies, a controlling shareholder or an enterprise associated with the latter which may cause a substantial and not merely temporary conflict of interests. Details on the treatment of potential conflicts of interests are set out in the section "Legal relationships with members of the Company's corporate bodies" below.

The term of office of the members of the Supervisory Board is five years; the current term of office of all Members of the Supervisory Board of FMC-AG & Co. KGaA ends on conclusion of the General Meeting for 2021.

Details on the election, constitution and term of office of the Supervisory Board, its meetings and the adoption of resolutions, as well as its rights and obligations, are set out in the Company’s Articles of Association. In accordance with section 5.1.3 of the Code, the Supervisory Board has furthermore adopted rules of procedure which set out, among other things, the modalities for convening meetings and the manner in which resolutions are adopted. As a consequence, the Supervisory Board meets regularly at least twice per calendar half year. The deliberations of the Supervisory Board are conducted by the Chairman or, if the latter is unavailable, by his deputy. The chairman of the meeting also determines the order of the agenda items and the type of voting. As a rule, the Supervisory Board decides by simple majority of votes cast if decisions are taken in physical meetings and otherwise with the simple majority of its members, unless other majorities are prescribed by a mandatory provision of law in the individual case. Moreover, the Chairman of the Supervisory Board is responsible for coordinating and directing the Supervisory Board and represents the Supervisory Board vis-à-vis third parties.

In accordance with section 5.6 of the Code, the members of the Supervisory Board regularly carry out efficiency evaluations with regard to their work. These take place in the form of open discussions in plenary meetings. On these occasions, also the complexity and the design of the presentations, as well as the meetings’ procedure and structuring are discussed. The results of the evaluations carried out show that each of the Supervisory Board and the Committees are efficiently organized and that the co-operation of the Supervisory and Management Boards works very well, too.

All members of the Supervisory Board have the capabilities as well as the knowledge required for the proper exercise of their duties and regularly update themselves via in-house sources and via external sources about the current status of supervisory requirements. In addition to information provided to them by several external experts, also experts of the Company’s departments regularly provide reports about relevant developments, such as – for example – relevant new developments in the revision of legal rules or in jurisprudence and also about recent developments in regulations on accounting and auditing. In this way, the Supervisory Board, with the Company’s reasonable assistance, ensures an ongoing qualification of its members and also a further development and updating of their expertise, power of judgment and experience, which is required for the Supervisory Board including its Committees to duly perform their tasks.

In the year under review, six meetings of the Supervisory Board have taken place. In addition, the Supervisory Board had one session via telephone conference. In fiscal year 2016, key aspects of the activities of the Supervisory Board involved the strategic considerations and actions on the expansion of the business areas, in particular medical services which go beyond the dialysis treatment itself (Care Coordination). The compensation of the Management Board was discussed. The business development, the competitive situation and the Management Board’s business planning in the regions have also been key aspects of the consultations. The Supervisory Board was informed on the progress with regard to improve the cost base. The Supervisory Board was also informed on the quality standards system and the qualitative results of the various production sites and, together with the Management Board, deliberated on the expected developments in the volume of the existing sites and its expansions. The Supervisory Board was informed of the compliance situation and, together with the Management Board, it further discussed and deliberated legal disputes. The Supervisory Board was intensely occupied with the preparation of personnel changes.

From the midst of its members, the Supervisory Board forms qualified committees for the efficient exercise of its responsibilities, which prepare the matters for deliberation and resolutions of the Supervisory Board. The Supervisory Board regularly and timely receives briefings on the committees’ work.

Further information on the Audit and Corporate Governance Committee

With the consent of the Supervisory Board, the Audit and Corporate Governance Committee adopted rules of procedure. On the basis of the relevant provisions of the Articles of Association of the Company (section 12 para. 2) the rules of procedure define the composition, work and tasks of the Audit and Corporate Governance Committee. Accordingly, the Audit and Corporate Governance Committee shall consist of at least three and not more than five exclusively independent members. The requirement of independence is met, inter alia, if the respective member fulfills the criteria for independence pursuant to section 12 para. 2 sentence 3 of the Articles of Association as well as to the rules of the New York Stock Exchange.

In addition, pursuant to section 107 para. 4 in connection with section 100 para. 5 of the German Stock Corporation Act, at least one independent member must have expertise in the fields of accounting or auditing. Moreover, in accordance with the recommendations of the Code, the Chairman of the Audit and Corporate Governance Committee shall neither act as Chairman of the Supervisory Board of the Company at the same time nor be a former member of the Management Board whose appointment has ended less than two years ago. In the opinion of the Supervisory Board, the composition of the Audit and Corporate Governance Committee meets these requirements.

Joint Committee

FMC-AG & Co. KGaA also has established a Joint Committee whose composition and activity is provided for in Articles 13a et seq. of the Articles of Association of the Company. The Joint Committee is convened only as required, namely in cases of certain legal transactions defined in the Articles of Association as substantial transactions and for which the General Partner requires the consent of the Joint Committee.

Good corporate governance requires an efficient co-operation between the management and the supervisory board on the basis of mutual trust. The General Partner and the Supervisory Board of the Company work together closely and in a trusting manner in the Company’s interest: their joint goal is to increase the Company’s value in the long term in compliance with good corporate governance principles and compliance regulations. In the expired fiscal year, the Supervisory Board regularly supervised the General Partner and advised its management Board. Deliberations of the Supervisory Board covered all significant questions of business policy, the company planning and the strategy. Further subjects were the risk situation and risk management.

At Fresenius Medical Care, for each selection of personnel the individual qualification is decisive. Irrespective thereof, Fresenius Medical Care duly considers aspects of diversity, e.g. internationality, age or intercultural background when selecting professionally qualified candidates.

In addition, the Supervisory Board of FMC-AG & Co. KGaA is legally obliged to define targets for the representation of female members in the Supervisory Board as well as an implementation period and to report on the defined targets and their achievement during the relevant reference period or in the event of a failure to meet these targets, on the reasons for this, within the scope of the declaration on corporate governance. By contrast, for companies which, like Fresenius Medical Care, are organized in the legal form of a partnership limited by shares the definition of targets for the composition of the Management Board is not expressly required.  Likewise, also the Supervisory Board of Fresenius Medical Care Management AG is not required to define targets for the Management Board, because Fresenius Medical Care Management AG is not in the scope of the relevant legal provisions.

The Supervisory Board of FMC-AG & Co. KGaA has resolved on September 29, 2015 to set the target for the representation of female Supervisory Board members at two Supervisory Board members with a view to its own composition; this corresponds to a percentage share of approximately 33% of all members, of which the Supervisory Board of the Company is required to be composed of according to the Articles of Association. This target was achieved by the election of Ms. Deborah Doyle McWhinney and Ms. Pascale Witz to the Supervisory Board of FMC AG & Co. KGaA by the Annual General Meeting of the Company on May 12, 2016 and, thus, already in the year under review and well before the end of the ongoing initial implementation period ending on June 30, 2017.

Moreover, the Management Board is legally obliged to define targets for female representation in the two top management levels below the Management Board as well as an appropriate implementation period.

In fulfillment of this legal obligation the Management Board, had resolved to define the two top management levels below the Management Board in a first fundamental step already on September 28, 2015 as follows:

• the first management level includes all direct reports worldwide to a member of the Management Board who are participants in the Long Term Incentive Program (or any successive program) of Fresenius Medical Care;

• the second management level includes all direct reports worldwide to a member of the first management level who are participants in the Long Term Incentive Program (or any successive program) of Fresenius Medical Care.

On January 13, 2016, the Management Board also resolved in a second step upon  new targets for female representation envisaged for the two top management levels below the Management Board and upon an additional implementation period to end on December 31, 2020. The corresponding targets were defined at 18.8% for the first management level and at 28.2% for the second management level below the Management Board. Hence, the Management Board pursued the target of at least maintaining the level of female participation existing at the first management level at the end of the previous year and of slightly improving such level of participation on the second management level. Irrespective of the Management Board fully complying with the legal requirements regarding the definition of targets for the proportion of women in the two management levels below the Management Board, the recruiting and staffing practice of Fresenius Medical Care as well as the selection decisions regarding the hiring and promotion to top management levels will continue to be taken with a focus on the specific qualifications of the individual. For this reason, the Management Board will select candidates for the top management of Fresenius Medical Care according to the candidate’s excellence and suitability for the specific role and function in such management positions, regardless of their race, gender or other non-performance related attributes.

Compliance

Global business activities result in global responsibility. As the global market leader in dialysis, Fresenius Medical Care is aware of its responsibility. We are committed to conduct the Company's business activities in compliance with the respective legal provisions.

Our efforts to provide our patients around the world with a better life through excellent products and services are based on our commitment to the core values of our Company: quality, honesty and integrity, innovation and progress, respect and dignity. Our corporate culture and policy as well as our entire business activities are guided by our values. This also applies to our work and business relationships with our patients, customers, business partners, public authorities, investors and the general public, as well as to our employees.

These fundamental values are firmly established in our Code of Ethics and Business Conduct. Our Code of Conduct describes our Company's business standards and emphasizes our commitment to operate in accordance with the applicable laws and regulations and with our own company policies.

The Code of Ethics and Business Conduct is available in the section Compliance.

Each employee is required to ensure, by complying with the laws as well as the values and rules of the Company, that Fresenius Medical Care is appreciated as a partner of integrity and reliability in the healthcare system for patients, customers, business partners, public authorities, investors and the general public. Fresenius Medical Care has developed a compliance program which shall help to abide by these values and by the legal and ethical obligations. Compliance is the responsibility of every single employee.

Compliance organization

Our compliance organization supports managers and employees to live by these values during their daily work.

The Chief Compliance Officer, who is responsible for the worldwide compliance organization, directly reports to the Chairman of the Management Board of Fresenius Medical Care. Furthermore, the Chief Compliance Officer regularly provides a compliance update to the Audit and Corporate Governance Committee of the Supervisory Board of FMC-AG & Co. KGaA and to the Supervisory Board of Fresenius Medical Care Management AG.

Our compliance organization is arranged on a global scale. The compliance officers work together closely on a central, regional and national level to efficiently support the business activities.

In the year under report 2016 we established further resources within the compliance organization. The worldwide teamwork within our compliance organization was further strengthened through various measures.

Compliance program

In order to adequately and effectively address the challenges and compliance risks associated with changes in the economic and regulatory environment, world-wide business activities and business development, we are continuously working on enhancing our compliance program.

The Code of Ethics and Business Conduct is the basis of the compliance program.

In the year 2016, we have revised various other compliance-related internal guidelines, processes and controls. These guidelines and provisions will be implemented in each of our business units and subsidiaries worldwide.

Existing processes and controls are also being reviewed and revised. The efficiency of our compliance program is reviewed through monitoring measures.

All employees are in a position to report potential violations of applicable law or company policies. Information on violations may also be provided anonymously.

We have also continued and further developed our compliance training. Our portfolio of compliance trainings consists of on-site and web-based trainings. On-site trainings enable our employees and executives to discuss issues of relevant correct behavior by reference to practical examples from the daily working routine.

At Fresenius Medical Care, an integrated management system is in place to ensure that risks and opportunities are already identified at an early stage, optimizing the risk profile and minimizing the costs potentially related to the occurrence of risks through timely intervention. Our risk management is therefore an important component of the corporate management of Fresenius Medical Care. The adequateness and effectiveness of our internal control systems for the financial reporting are reviewed on a regular basis by the Management Board and by our auditor.

Further information about the risk and opportunity management system can be found in the risk management section of the management report.

The shareholders of the Company exercise their rights and voting powers in the General Meeting. The share capital of FMC-AG & Co. KGaA is divided exclusively into ordinary shares. Each share of FMC-AG & Co. KGaA entitles the holder to one vote at the General Meeting. Shares with multiple or preference voting rights do not exist. As a matter of principle, the General Partner (as far as it would be a shareholder in the Company, which was not the case in the year under review), respectively, its sole shareholder, Fresenius SE & Co. KGaA, can exercise at the General Meeting the voting rights connected with the shares it holds in FMC-AG & Co. KGaA. However, the General Partner and its sole shareholder are subject to various rules preventing them by law from voting on certain resolutions. These include, among others, the election of the Supervisory Board, formal approval of the actions of the General Partner and the members of the Supervisory Board of FMC-AG & Co. KGaA, as well as the election of the auditor of the annual financial statements. This is to guarantee that the shareholders in the partnership limited by shares (KGaA) can solely decide on these matters, particularly those concerning the control of the management.

According to the principles of the German Stock Corporation Act (Aktiengesetz), shareholders can exercise their voting rights at the Annual General Meeting themselves, by proxy via a representative of their choice, or by a Company-nominated proxy acting on their instructions. Proxy voting instructions to a Company nominee can be issued before and during the Annual General Meeting until the end of the open discussion period.

The Annual General Meeting of FMC-AG & Co. KGaA took place on May 12, 2016 in Frankfurt/Main (Germany). Approximately 78% of the share capital was represented at the Annual General Meeting. At the Annual General Meeting, resolutions were passed on the following topics:

• approval of the annual financial statements for the fiscal year 2015,
• allocation of distributable profit,
• approval of the actions of the General Partner and the Supervisory Board,
• election of the auditors and consolidated group auditors for the fiscal year 2016,
• approval of the modified system for the compensation of the members of the Management Board of the General Partner,
• elections to the Supervisory Board as well as to the Joint Committee,
• adjustment of the compensation of the members of the Supervisory Board and its Committees as well as the adoption of a corresponding new version of section 13 of the Articles of Association of the Company
• authorization to acquire own shares pursuant to section 71 para. 1 no. 8 of the German Stock Corporations Act as well as the exclusion of the subscription right,
• approval to adjust the pooling agreement between the Company, Fresenius SE & Co. KGaA and the so-called Independent Directors as well as the adjustment of the existing authorization to grant subscription rights to executives and members of the management of the Company or an affiliated company (Stock Option Program 2011).

All documents and information are available in the section Annual General Meeting.

When making decisions and in connection with the tasks and activities performed by them, the members of the Management Board of the General Partner and of the Supervisory Board of FMC-AG & Co. KGaA, as well as the Supervisory Board of Fresenius Medical Care Management AG, do not pursue personal interests or give unjustified advantages to other people. Any outside activities or business dealings with the Company by members of the corporate bodies are to be disclosed to the Supervisory Board immediately and are subject to its approval, if necessary. The Supervisory Board reports to the General Meeting about possible conflicts of interests and how to deal with them. Furthermore, Mr. Rice Powell as the Chairman of Fresenius Medical Care Management AG's Management Board, in the year under review, with the approval of Fresenius Medical Care Management AG's Supervisory Board, was at the same time a member of the Management Board of Fresenius Management SE. The members of the Supervisory Board of FMC-AG & Co. KGaA Dr. Krick (Chairman) and Dr. Schenk (Vice Chairman) were, in the year under report, also members of the Supervisory Board of Fresenius Medical Care Management AG (Dr. Schenk as Vice Chairman) and of the Supervisory Board of Fresenius Management SE (Dr. Krick as Chairman, Dr. Schenk as Vice Chairman), the general partner of Fresenius SE & Co. KGaA. Furthermore, Dr. Krick is the Chairman of the Supervisory Board of Fresenius SE & Co. KGaA. Dr. Schenk continues to be chairman of the foundation board of the Else Kröner-Fresenius-Stiftung, the sole shareholder of Fresenius Management SE as well as limited shareholder of Fresenius SE & Co. KGaA, and co-executor of the estate of Ms. Else Kröner. Dr. Krick receives a pension from Fresenius SE & Co. KGaA due to his previous work on the Management Board of the Company. During the year under review, consulting or other service relationships between members of the Supervisory Board and the Company existed only in the case of Dr. Schenk, who was in the year under review a member of the Supervisory Board of the Company and of the Supervisory Board of Fresenius Medical Care Management AG, a member of the Supervisory Board of Fresenius Management SE and, at the same time, a partner of the law firm Noerr LLP. In the year under review, the companies of the internationally operating law firm Noerr acted for FMC-AG & Co. KGaA and affiliated companies as legal advisor. The Supervisory Board of Fresenius Medical Care Management AG and the Supervisory Board of FMC-AG & Co. KGaA have concerned themselves with each of the assignments in a detailed manner; moreover, the Supervisory Board dealt with the fee volume for the legal advice rendered by the law firm Noerr in proportion to the fee volume for other law firms. As regards specific mandates for future services to be provided by law firm Noerr and as regards the first three quarters of the year under review, the Supervisory Board of Fresenius Medical Care Management AG and the Supervisory Board of FMC-AG & Co. KGaA have already given their consent to such activity, with Dr. Schenk abstaining from the vote. The resolutions were in each case passed on the basis of a written document for the Supervisory Board specifically stating each single mandate and the invoices rendered for each mandate. All payments rendered to the law firm Noerr in the year under review were made only after the approval of both Supervisory Boards. Any services rendered in the fourth quarter of the year under review will be topic of the Supervisory Board's Meeting in March 2017 and will also be compensated only after approval has been obtained.

In the year under review, an amount of approximately € 0.9 M (excluding VAT) was paid by Fresenius Medical Care to the law firm Noerr (2015: about € 1.1 M). This represents less than 1% of the legal and other consultancy fees paid by Fresenius Medical Care on a global scale. This amount paid includes also payments for services already provided in 2015 which have been paid in 2016.

According to article 19 of the Regulation (EU) No 596/2014 (Market Abuse Regulation), the members of the Management Board and the Supervisory Board as well as other persons discharging managerial responsibilities and all persons closely associated with the aforementioned persons shall notify the Company of each transaction with shares in Fresenius Medical Care and additional related financial instruments conducted on their own account if the transaction volume reaches a total amount of € 5,000 within a single year.

A detailed overview of managers' transactions undertaken in 2016 is published in the Managers' Transactions section.

Fresenius Medical Care meets all transparency requirements imposed by section 6 of the Code. We attach special importance to informing our shareholders simultaneously and uniformly about our Company in our regular financial reporting events. Ad hoc releases and our corporate website play an essential role in these efforts. They provide investors and other interested persons equally with direct and timely access to the information we release.

To date, Fresenius Medical Care prepares its financial reporting in accordance with the U.S. Generally Accepted Accounting Principles (U.S. GAAP) and in U.S. dollars. In line with this, the Consolidated Financial Statements as well as the Interim Consolidated Quarterly Reports are also prepared in accordance with these principles. The Consolidated Financial Statements are published within the first 90 days of the end of each fiscal year, and the quarterly reports within the first 45 days of the end of each quarter.

As required by law, consolidated financial statements and a Group management report as well as quarterly reports continue to be prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU, too.

The Annual Financial Statements and the Management Report of FMC-AG & Co. KGaA are prepared in accordance with the German Commercial Code (Handelsgesetzbuch, HGB). The Annual Financial Statements are decisive for the distribution of the annual profit.

Moreover, an Annual Report of Fresenius Medical Care, which equally reflects the requirements of U.S. GAAP and the German Commercial Code, is published each year.

From January 1, 2017 on, the financial reporting will be made in accordance with IFRS and in euro. The reporting in accordance with U.S. GAAP and in U.S. . dollars will be discontinued from this moment on. The chance of financial reporting became possible as a consequence of the resolution by the Annual General Meeting 2016 on the adjustment of the pooling agreement. Accordingly, FMC-AG & Co. KGaA can elect if it reports to the U.S. Securities and Exchange Commission according to U.S. GAAP or IFRS. For the purpose of financial reporting at its highest efficiency, financial reporting will be made according to IFRS, starting the next business year.

Fresenius Medical Care’s shares are listed on the stock exchange in the U.S. (as American Depositary Receipts) and in Germany. Fresenius Medical Care is therefore subject to a number of regulations and recommendations regarding the management, administration and monitoring of the Company. On the one hand, in addition to mandatory requirements under stock corporation and commercial law, we comply with the regulations of Deutsche Börse and adhere to most of the recommendations of the German Corporate Governance Code. On the other hand, being a non U.S. company (a “foreign private issuer”) we are subject to the regulations connected to our listing in the U.S. Observance of the Sarbanes-Oxley Act (SOX) and portions of the Corporate Governance Rules of the New York Stock Exchange in particular is required. The Sarbanes-Oxley Act includes provisions governing companies and their auditors and is aimed at improving financial reporting, ensuring auditor independence and implementing other matters. The extension of regulations for financial reporting and internal control systems is intended to increase the trust of investors and other parties interested in the Company. We fully meet all of the current requirements applicable to our Company.