- Reinhard Pöllath, Chairman of the Supervisory Board
Report of the Supervisory Board
The Supervisory Board closely followed the business development of SinnerSchrader Aktiengesellschaft and its subsidiaries in the 2005/2006 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 Statues and supervised the business conduct of the Management Board.
Supervisory Board Meetings
In the past financial year, the Supervisory Board met for five regular meetings on 6 September 2005, 25 November 2005, 27 January 2006, 4 April 2006 and 27 July 2006. All members of the Supervisory Board were present at these meetings, with the exception of the meeting on 27 July 2006, which one member of the Board was unable to attend. On 21 December 2005, the Supervisory Board also passed a resolution by way of circulation.
Focus of Meetings
In its meetings, the Supervisory Board addressed issues such as the business development of the Group and its segments in each quarter, the selection and analysis of potential acquisition partners, the rental of new office space in Hamburg and the move to these premises at the end of the financial year, and the annual plans for the 2006/2007 financial year. At its meeting on 25 November 2005, the Supervisory Board approved the Consolidated Financial Statements and the Annual Financial Statements of SinnerSchrader Aktiengesellschaft for the 2004/2005 financial year.
Constitution of the Boards
At the end of the Annual General Meeting on 27 January 2006, Dr Markus Conrad, Spokesman for the Management Board of Tchibo GmbH, resigned from his position on the Supervisory Board. Dr Conrad had been a member of the Supervisory Board since the founding of the AG in 1999. As Chairman of the Supervisory Board, he played a key role in the successful IPO of SinnerSchrader AG in November 1999, and he helped SinnerSchrader emerge from the boom and bust as one of the five largest interactive service providers in Germany.
On 27 January 2006, Dieter Heyde, Managing Partner of SALT Solutions GmbH, was elected to the Supervisory Board of SinnerSchrader AG by the Annual General Meeting. In its meeting on the same day, the Supervisory Board appointed Mr Pöllath as the new Chairman and Mr Heyde as his deputy.
Corporate Governance
On 21 November 2005, the Supervisory Board and the Management Board submitted the declaration of conformity 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 16 November 2006, the Board renewed this declaration for the current financial year on the basis of the Code amended on 12 June 2006.
Consolidated and Annual Financial Statements
The accounts and Annual Financial Statements of SinnerSchrader AG, as well as the Consolidated Financial Statements including the combined Status Report of the Group and SinnerSchrader AG, which were drawn up for the first time in accordance with International Financial Reporting Standards (IFRS) as required under Article 315a of the German Commercial Code for the 2005/2006 financial year as of 31 August 2006, were audited by Ernst & Young AG Wirtschaftsprüfungsgesellschaft, Hamburg, at the request of the Supervisory Board and received an unqualified auditor’s opinion on 30 October 2006. At its meeting on 16 November 2006, the Supervisory Board discussed the Annual and Consolidated Financial Statements in detail in the presence of the auditor and the Management Board. The Annual and Consolidated Financial Statements prepared by the Management Board and the auditor’s 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. Furthermore, the Supervisory Board approved the suggestion of the Management Board to propose to the Annual General Meeting that the net income be carried forward to the new accounts.
Business Development
SinnerSchrader made good progress in the past financial year. Revenues rose by 10.5 % and the operating margin doubled to 3.8 %. This is an important intermediary step on the path towards a target operating margin of 10 % to 12 % in the medium term with continued double-digit growth in revenues. The welcome economic and industry environment, the good market position of SinnerSchrader, the elimination of rental costs for vacant offices at the end of the reporting year and the solid financial situation have created a good basis for SinnerSchrader to continue its positive development ten years after it was founded. The Supervisory Board will continue to support the Management Board in every respect so that the Company can move forward without losing sight of the risks facing it.
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, 16. November 2006
Reinhard Pöllath
Chairman of the Supervisory Board