Reebok 2013 Annual Report Download - page 50

adidas Group
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2013 Annual Report
To Our Shareholders
46
2013
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01.7
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Supervisory Board Report
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The General Committee held six meetings in 2013, two of them by way of a conference call. An additional
meeting, dealing with topics relating to the year under review, took place in February 2014.
The main focus of the meetings of the General Committee was the preparation of the resolutions of the
Supervisory Board as a whole relating to the Executive Board members’ compensation as explained in detail
above – in particular with regard to the concrete assessment of the Executive Board members’ variable
compensation – as well as resolutions relating to personnel changes on the Executive Board. At its meeting in
February 2013, the General Committee thoroughly discussed a resolution proposal for the Supervisory Board
concerning the amount of the Performance Bonuses to be repaid by the Executive Board members for the 2011
financial year and previous years. It also assessed the individual degree of target achievement with respect to
the Performance Bonuses to be paid to the Executive Board members for the 2012 financial year and resolved
upon a corresponding recommendation to the Supervisory Board. Additionally, in March it discussed the new
performance criteria and targets as well as the target bonuses for the Executive Board members’ Performance
Bonus plans for the year under review. In September and December 2013, it dealt with matters relating to
Executive Board compensation. In February 2014, it discussed the termination agreement regarding the Executive
Board service contract concluded with Erich Stamminger, as well as the Performance Bonuses to be granted to
the members of the Executive Board for the year under review. At each of these meetings, the committee resolved
upon respective resolution proposals to present to the Supervisory Board.
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The Audit Committee held five meetings in the year under review and also one meeting in February 2014,
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 focal point of the committee’s work in February 2013 was a preliminary examination of the annual financial
statements and the consolidated financial statements for 2012, including the combined management report
of adidas AG and the Group, as well as the Executive Board’s proposal regarding the appropriation of retained
earnings. Following an in-depth review of the audit reports with the auditor, at its meeting in March the
Audit Committee recommended that the Supervisory Board approve the annual financial statements and the
consolidated financial statements. In addition, after obtaining the auditor’s declaration of independence, the
Audit Committee prepared the Supervisory Board’s proposal to the Annual General Meeting concerning the
selection of the auditor of the annual financial statements and the consolidated financial statements for 2013.
After jointly establishing the priority topics for the audit, the committee discussed in detail the granting of the
corresponding audit assignments. It then dealt in November with the audit fee arrangements and monitored
the auditor’s independence and qualifications by obtaining information on the measures taken by the auditor
to guarantee independence and qualifications, and assured itself that the auditor does not face any conflicts of
interest. Furthermore, the Executive Board provided the Audit Committee with information regarding tax and
customs strategies and the potential risks in these areas. The members of the Audit Committee examined in
detail the quarterly financial reports and the first half year report, together with the Chief Financial Officer and
the auditor, prior to their publication.
At a committee meeting in September, the committee members focused solely on the topic of risk management
and the internal control system as well as the compliance management 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 further 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 2013/2014. 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 comprehensive discussions, inter alia with the
auditor, they assured themselves of the effectiveness of the systems.
In the context of the regular reporting of the Chief Compliance Officer on material compliance issues, the
committee dealt intensively with the compliance case that had arisen at Reebok India Company and the
consequences thereof.