Report of the Supervisory Board
The Supervisory Board closely followed the business development of SinnerSchrader Aktiengesellschaft and its subsidiaries in the 2004/2005 financial year. At Supervisory Board meetings and in monthly reports, the Management Board kept the Supervisory Board informed of strategy, planning, the current situation, and business development, as well as important business transactions. Furthermore, there were written, telephone, and personal exchanges between the Management Board and the Supervisory Board with regard to current issues. On this basis, the Supervisory Board discharged its duties as required by law and the Statutes of the Company and supervised the business conduct of the Management Board.
Supervisory Board Meetings
In the past financial year, the Supervisory Board assembled for five regular meetings on 27 September 2004, 29 November 2004, 28 January 2005, 6 April 2005 and 29 June 2005, and it also passed a resolution by way of circulation on 21 December 2004. With the exception of the meeting on 29 November which one member was unable to attend, all members of the Supervisory Board were present at these meetings; the member who was unable to attend agreed to the resolutions of 29 November 2004 by countersigning the resolution protocol.
The deliberations focused on the current business development in each quarter, the results of the reorganisation carried out in April 2004, the use of treasury stock, the reduction of spatial capacity, business planning, and the options available for the strategic development of the SinnerSchrader Group. At its meeting on 29 November 2004, the Supervisory Board approved the Consolidated and Annual Financial Statements of SinnerSchrader Aktiengesellschaft for the 2003/2004 financial year.
Constitution of the Boards
In the financial year 2004/2005, there were no changes to the constitution of the Boards of SinnerSchrader Aktiengesellschaft. Mr Thomas Dyckhoff, who has been Chief Financial Officer of the Company since October 1999, was re-elected to the Management Board of SinnerSchrader Aktiengesellschaft for another three years beginning on 1 January 2005.
Corporate Governance
On 21 December 2004, the Supervisory Board and the Management Board submitted the Declaration of Compliance with the Corporate Governance Code which is demanded by Article 161 of the German Stock Corporation Act and which documents general compliance with the courses of action recommended by the Code. On 21 November 2005, the Board renewed this declaration for the current financial year on the basis of the Code amended on 2 June 2005.
Consolidated and Annual Financial Statements
The accounting and Annual Financial Statements of SinnerSchrader Aktiengesellschaft, as well as the Consolidated Financial Statements drawn up under Article 292a of the German Commercial Code with discharging effect on the basis of the Generally Accepted US Accounting Principles (US-GAAP), including the Joint Status Report for the Group and for SinnerSchrader Aktiengesellschaft for the 2004/2005 financial year as of 31 August 2005, were audited by Ernst & Young AG, Wirtschaftsprüfungsgesellschaft, Hamburg, at the request of the Supervisory Board and received an unqualified auditor’s certificate on 21 and 22 November 2005. At its meeting on 25 November 2005 in the presence of the auditor and the Management Board, the Supervisory Board discussed the Annual and Consolidated Financial Statements in detail. The Annual and Consolidated Financial Statements produced by the Management Board and the auditor’s audit report had been given to the members of the Supervisory Board in advance of this meeting. Following detailed examination and discussion at this meeting, the Supervisory Board had no objections and endorsed the results of the auditor. The Board approved both the Consolidated and Annual Financial Statements. The Annual Financial Statements are thereby adopted.
Business Development
After breaking even in the fourth quarter of the previous year, SinnerSchrader visibly achieved a turnaround on an annual basis as well in the 2004/2005 financial year. The restructuring and reorganisation of business have been fruitful: revenues have grown dynamically and the operating profit was clearly positive.
Another welcome development was that the positive cash flow strengthened the liquidity position. This means that after the payment of the special dividend in reporting year 2004/2005, through which shareholders’ equity in the amount of € 1.82 per share was distributed to shareholders at the suggestion of the Supervisory Board and Management Board, SinnerSchrader is absolutely financially solid and capable of taking action to realize its growth options.
Against the backdrop of the growing importance of the Internet for shaping business relations between companies and customers and a cautiously positive outlook for the overall economic environment in Germany, the goal of SinnerSchrader is to carry ahead dynamically with its positive development. The opportunities to do so are good. The Supervisory Board is fully committed to supporting the Management Board in its efforts to exploit these opportunities and help SinnerSchrader forge ahead.
The Supervisory Board would like to thank the Management Board and all employees of the SinnerSchrader Group for their efforts and dedication in the past financial year.
Hamburg, 25 November 2005
Dr Markus Conrad
Chairman of the Supervisory Board
