CORPORATE GOVERNANCE STATEMENT(SECTION 289A OF THE HGB)

The Corporate Governance Statement pursuant to section 289a of the HGB [Handelsgesetzbuch – German Commercial Code] dated 30 March 2015 is accessible to the public at www.ksb.com > ­Investor Relations > Corporate Governance /  Corporate Governance Statement. The updated Statement will be made accessible to the public in the same way from 30 March 2016.

In addition to the Corporate Governance Report (including the Statement of Compliance in accordance with section 161 of the German Public Companies Act), the Corporate Governance Statement includes relevant information on corporate governance practices applied at KSB AG that go beyond statutory requirements. Also described are the working methods of the Board of Management and Supervisory Board, and the composition and working methods of the committees of the ­Supervisory Board. For the first time, the updated Statement will also include the following information on the gender-­specific staffing of executive positions:

The aim of the Act for the Equal Participation of Women and Men in Executive Positions in Private Industry and Public Service, which entered into force in 2015, is to create more equal opportunities in the world of work and to significantly improve the proportion of women in management positions. For KSB AG, in its capacity as a listed company pursuant to section 3(2) of the AktG [Aktiengesetz – German Public Companies Act] and a company that has co-determination based on parity in accordance with the Mitbestimmungsgesetz [German Co-determination Act], fixed gender quotas of 30 % in each case apply to the inclusion of women and men in the Supervisory Board pursuant to section 96(2) AktG. To date, two women are on our Super­visory Board, one as a shareholder representative and one representing the employees. This means that the proportion of women on the Super­visory Board is just below 17 % and therefore not yet in line with the quota.

At its meeting on 11 September 2015, the Supervisory Board set its target quota of women for the Board of Management at zero percent by 30 June 2017, which corresponds to the current situation. On 22 September 2015, the Board of Management stipulated the targets for the proportion of women in the two management levels below it, with these also to be achieved by 30 June 2017. Based on these targets, at least the current proportions are to be retained, i.e. zero percent with regard to the top level and 10.4 % in the management level below that.

In order to improve the situation in the interests of promoting women, and to make it easier for employees to reconcile working and family life, KSB has developed various offers. For many years now, KSB AG has provided support in relation to child care for different ages of children. Advisory services are also provided with regard to looking after relatives who are in need of care. Both of these offers are complemented by flexible working time models for men and women.

As part of measures to secure the supply of young talent for executive positions, we make a targeted effort to fill attractive vacancies with women. As a result of these measures, just under 30 % of the new junior managers appointed were women. Like their male colleagues, they receive targeted mentoring from managers immediately below the Board of Management level. Global human resources controlling is used to monitor the development of the proportion of women employed in the different countries.

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