Reebok 2012 Annual Report Download - page 71

adidas Group
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2012 Annual Report
To Our Shareholders
49
2012
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01.5
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Supervisory Board Report
we have delegated the Supervisory Board’s authority to pass resolutions to individual committees. With the exception of the
Audit Committee, the Supervisory Board Chairman also chairs all the standing committees. The respective chairman always
informed the Supervisory Board about the content and results of the committee meetings at the subsequent meeting of the entire
Supervisory Board.
The committees’ work in the year under review is summarised as follows:
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The Steering Committee, which is authorised to pass resolutions on behalf of the entire Supervisory Board in particularly urgent
cases, did not meet in the year under review.
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The General Committee, which prepares the resolutions of the Supervisory Board on Executive Board related matters, held three
meetings in 2012, two of them by way of a conference call. An additional meeting dealing with the determination of the Executive
Board members’ variable compensation for 2012 as well as with possible changes to the previous years’ variable compensation
took place in February 2013. At its meeting on February 8, 2012, the committee discussed the amount of the Performance Bonus
to be granted to each Executive Board member for the 2011 financial year, based on the key financial figures available at the time.
Furthermore, the General Committee focused on the Executive Board’s achievement of the targets of the LTIP Bonus 2009/2011 and
developed detailed resolution proposals to be presented to the Supervisory Board concerning the amount of the 2011 Performance
Bonus and the LTIP Bonus 2009/2011. Another topic of this meeting was the discussion on the 2012 Performance Bonus Plan and
the LTIP 2012/2014. At its meeting on February 29, 2012, the General Committee prepared the corresponding resolution proposals
to be submitted to the Supervisory Board. At its meeting on October 29, 2012, the General Committee discussed an appropriate
increase in the Chief Executive Officer’s annual fixed salary, which had remained unchanged for three years, and prepared a
corresponding resolution proposal for the Supervisory Board. At its meeting in February 2013, the committee members thoroughly
discussed reassessing the Performance Bonuses for the 2011 financial year and the prior years based on the financial figures relevant
for the amount of the Performance Bonuses, given that certain relevant figures had been adjusted in the context of restating the 2011
consolidated financial statements. The restated prior year figures did not necessitate an adjustment of the LTIP Bonus 2009/2011. In
its resolution proposal to the Supervisory Board, the committee recommended a redetermination of the Performance Bonuses as well
as determining the amounts to be repaid by the Executive Board members. After consulting accordingly, the General Committee also
resolved upon the resolution proposal to be submitted to the Supervisory Board with respect to the Performance Bonus to be paid to
each Executive Board member for the 2012 financial year based on the determined degree of individual target achievement.
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The Audit Committee held five meetings in 2012, and also one meeting in March 2013, dealing with topics of the year
under review. The Chief Financial Officer and the auditor were present at all meetings and reported to the committee members
in detail.
The committee members examined the annual financial statements and the consolidated financial statements for 2011,
including the combined management report for adidas AG and the Group, as well as the Executive Board’s proposal regarding
the appropriation of retained earnings and, following an in-depth review of the audit reports with the auditor, recommended that
the Supervisory Board approve the annual financial statements and the consolidated financial statements. After obtaining the
auditor’s declaration of independence, the Audit Committee submitted a recommendation to the Supervisory Board with respect
to its proposal to the Annual General Meeting concerning the selection of the auditor of the annual financial statements and the
consolidated financial statements. Following the selection of the auditor at the Annual General Meeting in May 2012, the Audit
Committee duly commissioned the auditor to carry out the audit on the annual financial statements and the consolidated financial
statements for 2012. Together with the auditor, the Audit Committee established the priority topics for the audit and dealt with
the audit fees. In the course of its examination of the auditor’s independence, the Audit Committee obtained information on the
measures taken by the auditor to guarantee independence and assured itself that the auditor does not face any conflicts of interest.
The members of the Audit Committee also focused on the detailed examination of the quarterly financial reports and the first half
year report, together with the Chief Financial Officer and the auditor, prior to their publication.
At one Audit Committee meeting, the committee members focused solely on the topic of risk management and the internal control
system as well as the compliance system. In this context, the committee members dealt in particular with the main risk factors for
the Group and the related control measures as well as the expansion of the compliance organisation and compliance management.
The committee members critically analysed the audit results of the Internal Audit function and approved the audit plan for 2012/2013.
As part of their examination of the effectiveness of the internal control system and the internal audit system, the committee members
reviewed in depth the applied methods and systems and the effectiveness thereof with the aid of written and oral reports. In the
course of the following detailed discussions, inter alia with the auditor, they assured themselves of the effectiveness of the systems.