During fiscal 2008, the Executive Board provided the Supervisory Board with regular written and verbal reports on the business development of Merck KGaA and the Merck Group. In particular, the Supervisory Board was informed about the market and sales situation of the company against the background of macroeconomic developments, the financial position of the company and its subsidiaries, as well as their earnings development and corporate planning. The major business policy transactions were also discussed in five joint meetings with the Executive Board, specifically the integration of Serono S.A. No permanent Supervisory Board committees have been set up.
The annual financial statements of Merck KGaA, the consolidated financial statements of the Merck Group and the management reports for Merck KGaA and the Merck Group, including the accounts, were audited by KPMG AG Wirtschaftsprüfungsgesellschaft. The auditors issued an unqualified audit opinion on the annual financial statements and management report for Merck KGaA in accordance with German Auditing Standards. For the consolidated financial statements prepared in accordance with International Financial Reporting Standards, the auditors issued the auditor’s report, reproduced in the Annual Report of the Merck Group. In addition, the auditors audited the calculation of Merck KGaA’s participation in the profits of E. Merck KG in accordance with Art. 27 (3) of the Articles of Association. The annual financial statements of Merck KGaA, the consolidated financial statements of the Merck Group, the management reports for Merck KGaA and the Merck Group, and the proposal by the Executive Board for the appropriation of the net retained profit were presented and distributed to the Supervisory Board, together with the auditor’s reports.
In accordance with Art. 14 (2) of the Articles of Association, the Supervisory Board also examined the annual financial statements of Merck KGaA and the management report for Merck KGaA, the proposal for the appropriation of the net retained profit and the auditor’s report presented in accordance with Art. 27 (3) of the Articles of Association. It also examined the consolidated financial statements of the Merck Group, the management report for the Merck Group, and took note of the auditor’s report of KPMG AG Wirtschaftsprüfungsgesellschaft.
The discussion of the relevant agenda item at the Supervisory Board’s meeting on February 12, 2009 to approve the financial statements was also attended by the auditors signing the audit opinion on the annual financial statements of Merck KGaA and the consolidated financial statements of the Merck Group, who reported on their audit. The Supervisory Board took note of and approved the results of the audit. On completion of its examination, the Supervisory Board raised no objections and thus approves the annual financial statements and management report for Merck KGaA, the consolidated financial statements of the Merck Group and the management report for the Merck Group prepared by the Executive Board, as well as the report presented by the auditors in accordance with Art. 27 (3) of the Articles of Association. The Supervisory Board gives its consent to the proposal for the appropriation of the net retained profit.
In 2008, considerable changes were made to the Supervisory Board in terms of both organization and personnel: The number of employees at Merck KGaA and associated companies in Germany has increased steadily. Merck now has more than 10,000 employees throughout Germany. Therefore the Supervisory Board was enlarged from 12 to a total of 16 members. The term of office of all members of the Supervisory Board legally ended with the 2008 Annual General Meeting. New elections were therefore necessary. The Annual General Meeting elected the following shareholder representatives to the Supervisory Board: Johannes Baillou, Frank Binder, Prof. Dr. Rolf Krebs, Dr. Arend Oetker, Prof. Dr. Theo Siegert and Prof. Dr. Wilhelm Simson. The holder of the registered share appointed Michaela Freifrau von Glenck and Albrecht Merck to the Supervisory Board. Jon Baumhauer, the former member representing the holder of the registered share on the Supervisory Board, no longer stood for re-election. It was not possible to hold an election of the employee representatives on the Supervisory Board in accordance with the applicable rules within the time period available. A procedure for the court appointment of the employee representatives was therefore initiated. Darmstadt District Court appointed Heiner Wilhelm, Claudia Flauaus and Michael Fletterich as the employee representatives, Dr. Daniele Bruns as the senior executive representative and Mr. Osman Ulusoy as the union representative. The District Court appointed Edeltraud Glänzer as the second union representative in place of Klaus Brauer, who was no longer available. Judith Delp and Frieder Kaufmann were appointed as additional members of the Supervisory Board. The election of the employee representatives is expected to be completed in the course of 2009.
The General Partner E. Merck KG, the Supervisory Board and the Executive Board thanked Messrs. Baumhauer and Brauer, who each served as members of the Supervisory Board for over a decade, for their critical and constructive as well as objective work in advising and supervising the Executive Board of Merck KGaA.
Darmstadt, February 12, 2009
The Supervisory Board of Merck KGaA
Prof. Dr. Wilhelm Simson
Chairman
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