Merck 2014 Annual Report Download - page 167

162 CORPORATE GOVERNANCE → Report of the Supervisory Board
REPORT OF THE SUPERVISORY BOARD
The Supervisory Board again properly executed its duties in 2014
in accordance with the law as well as the company’s Articles of
Association and rules of procedure. In particular, the Supervisory
Board monitored the work of the Executive Board diligently and
regularly.
Cooperation with the Executive Board
The cooperation with the Executive Board was characterized by
intensive, trustworthy exchange. During fiscal 2014, the Executive
Board provided the Supervisory Board with regular written and
verbal reports on the business development of Merck KGaA,
Darmstadt, Germany, and the Group. In particular, the Supervisory
Board was informed about the market and sales situation of the
company against the background of macroeconomic development,
the financial position of the company and its subsidiaries, along
with their earnings development, as well as corporate planning.
Within the scope of quarterly reporting, the sales and operating
results were presented for the Group as a whole, and broken down
by division. Aside from the Supervisory Board meetings, the
Chairman of the Supervisory Board also maintained and continues
to maintain a regular exchange of information with the Chairman
of the Executive Board.
Key topics of the Supervisory Board meetings
Five Supervisory Board meetings were held in fiscal 2014. Four of
the meetings were ordinary Supervisory Board meetings while the
one on May9, 2014 was an inaugural meeting. At these meetings,
the Supervisory Board discussed the reports of the Executive
Board in detail and discussed company developments and strate-
gic issues together with the Executive Board.
At the meeting held on February 28, 2014, the Executive
Board first reported on business performance during 2013. In
addition, the Supervisory Board intensively addressed the annual
financial statements and consolidated financial statements for
2013 and the corresponding management reports. The auditor
explained the audit report. The Executive Board reported on the
financial statements. Furthermore, the Supervisory Board resolved
upon the Statement of Compliance with the German Corporate
Governance Code as well as the Statement on Corporate Gover-
nance, which simultaneously includes the joint report of the
Executive Board and Supervisory Board. The Supervisory Board
also approved the proposals to be made to the Annual General
Meeting. Lastly, the Executive Board presented the plans for
fiscal
2014.
Following the Annual General Meeting on May9, 2014, at which
the elections of the new shareholder representatives on the Super-
visory Board were held, an inaugural meeting took place at which
Mr. Wolfgang Büchele was elected the new Chairman of the
Su
per visory Board and Mr. Michael Fletterich was elected Vice
Chairman.
The meeting held on May 13, 2014 focused on current busi-
ness developments in the first quarter of 2014. The report of the
Research and Development Committee of the Board of Partners
of E.MerckKG, Darmstadt, Germany, was a further focus of the
meeting. The Supervisory Board also dealt with the report of the
Group Compliance Officer and the report of the Group Data Privacy
Officer.
At its meeting on July 31, 2014, the Supervisory Board focused
intensively on the report of the Executive Board on business
performance in the second quarter of 2014. In addition, KPMG
explained the report on the first half of 2014. Risk management
within the company was a further topic. The Head of Risk
Management presented the status report for the first half of 2014.
No risks that threaten the continued existence of the company
were identified.
At its fifth meeting on November 11, 2014, the Supervisory
Board elected a new Nomination Committee. Furthermore, the
Super visory Board dealt with the report of the Executive Board
on
the third quarter of 2014. The 2014 status reports of Internal
Auditing as well as on compliance and data protection were addi-
tional topics of focus. The report of the Research and Development
Committee, Chemicals was also discussed. Furthermore, the com-
pany’s strategic direction was reported on and discussed.
Annual financial statements
The annual financial statements of Merck KGaA, Darmstadt, Ger-
many, the consolidated financial statements of the Group, and the
management
reports f or Merck KGaA, Darmstadt, Germany, a nd
th
e Group inc luding the accounts, were audited by KPMG AG
Wirtschaftsprüfungsgesell schaft, Berlin. The auditors issued an
unqualified audit opinion on the annual financial statements
and
management report for Merck KGaA, Darmstadt, Germany, in
a
ccordance with German Auditing Standards. For the consolidated
financial statements prepared in accordance with Inter national
Financial Reporting Standards, the auditors issued the auditor’s
report, reproduced in the Annual Report of the Group. In addition,
the auditors audited the calculation of the participation of Merck
KGaA, Darmstadt, Germany, in the profits of E. Merck KG, Darm-