Reebok 2006 Annual Report Download - page 24

020 ANNUAL REPORT 2006 › adidas Group ›
Supervisory
Board Report
Dear Shareholders,
2006 was another very important year for the adidas Group. The acquisition of Reebok International Ltd. (USA) brought together
two of the most respected and well-known companies in the global sporting goods industry. This helped the Group to expand
both its product portfolio and its geographic reach, achieve a more balanced sales profile and extend research and develop-
ment competencies. The success achieved in 2006 represents a challenge as well as a motivation to continue implementing the
Group’s strategic goals going forward.
Cooperation between Supervisory and Executive Boards
In the year under review, we, as the Supervisory Board, carefully and regularly monitored the Group’s management and advised
the Executive Board on matters relating to the strategic development of the Group as well as major individual activities. To
this end, the Executive Board informed us regularly, extensively and in a timely manner at the Supervisory Board meetings as
well as by verbal and written reports. This information covered the Group’s corporate policy, business and financial position,
profitability, and business planning, including finance, investment and personnel planning as well as all major decisions and
transactions. We were involved in all decisions of fundamental importance at an early stage. We held four Supervisory Board
meetings in 2006. The attendance rate at these meetings was 100% with the exception of one meeting, which one Supervisory
Board member was unable to attend due to urgent business commitments elsewhere. In addition, we passed additional resolu-
tions on urgent matters by way of circular vote. The external auditor KPMG Deutsche Treuhand-Gesellschaft Aktiengesellschaft
Wirtschaftsprüfungsgesellschaft, Frankfurt am Main (KPMG) attended all meetings. Furthermore, as Chairman of the Super-
visory Board, I also maintained regular contact with the Executive Board. We exchanged information and opinions, between
the Supervisory Board meetings, and I was kept thoroughly informed about the current business situation and major business
transactions.
Main Topics Covered and Examined by the Supervisory Board
The positive development of sales and earnings as well as the financial position of the Group and the development of the indi-
vidual segments was presented in detail by the Executive Board and subsequently discussed at all meetings. Furthermore,
items on the agenda included numerous specific topics which were discussed with the Executive Board. At the Supervisory
Board meeting on March 1, 2006, we reviewed the adidas AG annual financial statements, the consolidated financial statements
and the respective management reports for the year ending December 31, 2005, as certified by the auditor, and the proposal put
forward by the Executive Board regarding the appropriation of retained earnings. Additionally, we discussed the resolutions to
be proposed to the 2006 Annual General Meeting, in particular the share split in a ratio of 1: 4 and the change of the company
name from adidas-Salomon AG to adidas AG. Further, the Executive Board reported to us on the current status of the Reebok
integration as well as on various capital increase measures planned at several subsidiaries in connection with the financing of
the Reebok acquisition, which we resolved upon following an in-depth discussion.
At our meeting on May 10, 2006, we dealt with the first quarter 2006 financial results as presented by the Executive Board.
In addition, the Executive Board provided us with detailed information on the continuing progress and results achieved in the
expeditious integration of Reebok into the adidas Group.
At our Supervisory Board Meeting on August 8, 2006, our discussions focused on the half year financial report and the antici-
pated development of business for the remainder of 2006. We also discussed in detail the strategic and financial aspects of
the planned divestiture of the Greg Norman Collection wholesale business. In order to follow the project in a focused manner,
we established an ad hoc “Greg Norman” Supervisory Board committee, comprising an equal number of representatives of
the shareholders and the employees, to which we transferred powers of authorization with respect to the potential divestiture
within a predefined negotiating framework. A further agenda item of this meeting was information concerning the appointment
of KPMG as auditor of the financial statements of adidas AG and the consolidated financial statements for 2006 as well as a
review of the audit points and priorities agreed between the Audit Committee and KPMG.