Excerpts from Deutsche Post AG's 2012 Group Annual Report.
Wulf von Schimmelmann - Chairman
In the 2012 financial year, Deutsche Post DHL continued to grow in a volatile environment and made clear progress towards its three goals of being the provider, investment and employer of choice in its market.
Advising and overseeing the Board of Management
In 2012, the Supervisory Board scrutinised Group and divisional strategy and performance at seven Supervisory Board meetings and one closed meeting. At the meetings, the Board of Management provided us with detailed information on the situation and direction of the company and the Group, strategic initiatives, all key issues related to planning and implementation, and the opportunities and risks for business performance. Special attention was given to the European Commission’s state aid ruling and the additional VAT payment. The Supervisory Board has continued to monitor the global economic situation and the performance of acquisitions and business units in the context of the divisional growth strategies. All important decisions were discussed in detail with the Board of Management. The Board of Management informed us promptly and in a comprehensive manner regarding business performance, key business transactions and projects in the divisions, compliance organisation and compliance management, and the company’s risk exposure and risk management. The Board of Management also provided the chairman of the Supervisory Board with continuous updates between Supervisory Board meetings. Measures requiring the consent of the Supervisory Board were discussed in even greater depth, and in advance by the relevant committees. The results of the deliberations were presented by the respective committee chairs to the plenary meetings.
Seven meetings during the reporting year
Four Supervisory Board meetings took place during the first half of the year and three in the second. All members participated in at least 50% of the meetings. The overall participation rate was approximately 95%.
On 24 January 2012 we met in an extraordinary meeting to address the European Commission’s charge that Deutsche Post had received illegal state aid. In a related ruling, the European Commission required the German federal government to issue an official demand to Deutsche Post for the repayment of state aid. Deutsche Post and the federal government have appealed against the European Commission’s decision.
At the financial statements meeting on 7 March 2012, with the auditors in attendance, we discussed and approved the annual and consolidated financial statements for 2011. At that meeting we also accepted Walter Scheurle’s resignation from the Board of Management. Angela Titzrath had already been appointed in December 2011 to succeed Walter Scheurle. In addition, we adopted the Supervisory Board’s proposed resolutions for the Annual General Meeting (AGM), assessed whether the Board of Management had achieved its targets for the 2011 financial year and discussed ways to provide targeted support to put more women in management positions within the Group. We also discussed the outcome of the review on the efficiency of the Supervisory Board’s work.
A further extraordinary meeting of the Supervisory Board was convened on 31 May 2012 to address the additional VAT payment demanded by German tax authorities for the period from 1998 to 2010.
At the meeting of the Supervisory Board on 28 June 2012, we approved the acquisition of intelliAd Media GmbH. This acquisition strengthens Deutsche Post’s position in the field of online marketing. Matters relating to the Board of Management, including the remuneration of its members, were also dealt with.
On 19 September 2012, the company organised a Directors’ Day to provide Supervisory Board members with basic and further training. Selected speakers gave presentations on the internal control and risk management system and recent changes to accounting standards. In the meeting on 20 September 2012, part of which was conducted without the Board of Management members, we discussed the appropriateness of the Board of Management’s remuneration and its various components. Over the following one-and-a-half days, the Supervisory Board met in closed session for a detailed discussion on implementing Strategy 2015 within the Group and the divisions. In order to provide an outside perspective to supplement its view of the Group, a number of distinguished guest speakers were also invited.
On 3 December 2012 a further extraordinary meeting took place, in which the Supervisory Board authorised the issue of convertible bonds to secure the continued funding of pension obligations. The decision regarding the final terms was delegated to the Finance and Audit Committee.
Following in-depth discussions in the Supervisory Board’s final meeting of the year on 11 December 2012, we adopted the business plan for 2013 and agreed the Board of Management’s targets for 2013. In addition, we considered the Supervisory Board’s remuneration and agreed on a recommendation to the AGM. The target composition of the Supervisory Board was amended, such that the proportion of independent members of the Supervisory Board, as defined in paragraph 5.4.2 of the German Corporate Governance Code, should be at least 75%. Together with the Board of Management, we again submitted an unqualified Declaration of Conformity with the German Corporate Governance Code.
Hard work by the committees
The Executive Committee met five times during the year under review. Meeting agendas focused primarily on business-related questions and Board of Management matters.
The Personnel Committee met four times, examining both existing and planned measures to promote women in management. The committee discussed the global First Choice Way management approach, the Group’s data protection guidelines, and the topics “health management”, “global volunteering day” and programmes for employees and their children. The annual employee opinion survey was also discussed.
The Finance and Audit Committee met nine times. The chairman, Hero Brahms, is a financial expert as defined by sections 100 (5) and 107 (4) of the Aktiengesetz (AktG – German Stock Corporation Act). At its meeting in March, the committee examined the annual and consolidated financial statements for 2011 and recommended that these be approved by a plenary meeting of the Supervisory Board. The auditors attended this meeting. Following the AGM, the Finance and Audit Committee engaged the auditors to perform an audit of the 2012 annual and consolidated financial statements and the interim financial report for the first half of the year. The committee also defined the key audit priorities. In advance of their publication, the reviewed quarterly financial reports and the interim financial report for the first half of the year were discussed by the committee together with the Board of Management and the auditors.
The main risk factors for the Group were also discussed at the March meeting as planned.
At an extraordinary meeting on 31 May 2012, the Finance and Audit Committee discussed the additional VAT payment demanded for the period from 1998 to 2010.
With regard to the acquisition and disposal of companies, in its meeting of 21 June 2012 the committee discussed the acquisition of intelliAd Media GmbH. The committee was apprised of other acquisitions and disposals during the course of the year. The results of the internal audit were also discussed by the committee.
At its meeting on 14 September 2012, the Finance and Audit Committee received a detailed progress report on compliance organisation and compliance management from the Chief Compliance Officer. The main risk factors for the Group were also discussed further.
On 3 and 4 December 2012, the Finance and Audit Committee considered the proposed convertible bond issue and approved the relevant Board of Management resolution. In addition, on 4 December, the committee examined the business plan for the years from 2013 to 2015 and approved the internal audit plan for 2013.
The committee regularly discussed the Group’s business development and the internal control and risk management system. The appropriateness of the Group’s accounting system was discussed by the committee together with the auditors.
The Nomination Committee met on one occasion in 2012 to consider nominations for the 2013 AGM.
The chairs of the committees reported on the committees’ deliberations in the subsequent plenary meetings.
In 2012 there were no meetings of the Mediation Committee, formed pursuant to section 27 (3) of the Mitbestimmungsgesetz (MitbestG – German Co-determination Act).
Changes to the composition of the Supervisory Board and Board of Management
No changes occurred during 2012 with regard to the shareholder representatives on the Supervisory Board of Deutsche Post AG. With respect to employee representatives, Wolfgang Abel stepped down on 12 September 2012 and Stephan Teuscher was appointed by the court on 29 October 2012. In accordance with the Mitbestimmungsgesetz, a Delegate Assembly will be held in April 2013 to elect or re-elect all employee representatives. The elected representatives’ five-year term of office will commence when the AGM closes on 29 May 2013.
The company’s Board of Management changed as follows: Walter Scheurle stepped down from the Board of Management on 30 April 2012. Angela Titzrath took over the position of Board Member for Human Resources and Labour Director on 1 May 2012.
Managing conflicts of interest
No conflicts of interest arose during the reporting year.
Company in compliance with all recommendations of the German Corporate Governance Code
In December 2012, the Board of Management and the Supervisory Board submitted an unqualified Declaration of Conformity pursuant to section 161 of the AktG and published it on the company’s website. The declarations from previous years can also be viewed on this website. In the 2012 financial year, Deutsche Post AG complied with all recommendations of the German Corporate Governance Code, as amended on 26 May 2010, and also intends to comply with the recommendations of the code, as amended on 15 May 2012. The Corporate Governance Report contains further information on corporate governance within the company and the remuneration report.
Annual and consolidated financial statements audited
The auditors appointed by the AGM, PricewaterhouseCoopers Aktiengesellschaft Wirtschaftsprüfungsgesellschaft (PwC), Düsseldorf, audited the annual and consolidated financial statements for the 2012 financial year, including the respective management reports, and issued unqualified audit opinions. PwC also conducted the review of the quarterly financial reports and the interim report for the first half of the year.
Following a detailed preliminary assessment by the Finance and Audit Committee, the Supervisory Board reviewed the annual and consolidated financial statements and the management reports for the 2012 financial year at the financial statements meeting held on 4 March 2013. The review included the Board of Management’s proposal for the appropriation of the unappropriated surplus. The auditors’ reports were made available to all Supervisory Board members and were discussed in detail with the Board of Management and the auditors in attendance. The Supervisory Board concurred with the results of the audit and approved the annual and consolidated financial statements for the 2012 financial year. Based on the final outcome of the examination of the annual and consolidated financial statements, on the management reports and on the proposal for the appropriation of the unappropriated surplus by the Supervisory Board and the Finance and Audit Committee, there are no objections to be raised. The Supervisory Board endorses the Board of Management’s proposal for the appropriation of the unappropriated surplus and the payment of a dividend of €0.70 per share.
We would like to thank the Board of Management and all the Group’s employees for their excellent work in a volatile environment. The Supervisory Board is confident that the company is well on the way to achieving the goals set out in Strategy 2015.
Bonn, 4 March 2013
The Supervisory Board
Wulf von Schimmelmann
|Shareholder representatives||Employee representatives|
|Finance and Audit Committee|
(pursuant to section 27 (3) of the German Co-determination Act)