In fiscal 2010/2011, against a background of overall market recovery at global level, Wincor Nixdorf AG achieved an increase in net sales and maintained an operating profit in line with the previous year. However, it became clear over the reporting year that the recovery was not yet sufficiently rooted in our key markets to allow us to generate the improvement in net sales and profit that we had originally thought possible. Together with the introduction of CINEO, our newly developed and innovative family of systems, this presented a major challenge to the Company. The work of the Supervisory Board in the year under review involved closely monitoring the Company’s response to this challenge and the development of business.
The Work of the Supervisory Board.
In the fiscal year under review, the Supervisory Board of Wincor Nixdorf AG discharged its duties in accordance with statutory requirements, the German Corporate Governance Code, and the Company’s Articles of Association. First and foremost, this task involved advising and monitoring the Board of Directors on a regular basis in matters concerning the strategic direction and management of the Group. This collaboration was characterized by the fact that all decisions of fundamental importance to Wincor Nixdorf AG and its Group companies were agreed directly with the Supervisory Board. Receiving comprehensive information on a regular and timely basis in the form of verbal and written reports, the Supervisory Board was informed by the Board of Directors on all material issues relating to the corporate planning, strategic direction and development, business performance, and state of the Group, including risks and risk management. All business matters of importance to the Company were discussed by the Supervisory Board on the basis of reports furnished by the Board of Directors.
In fiscal 2010/2011, five scheduled Supervisory Board meetings were held, at which the Board of Directors informed the Supervisory Board about the performance of the Company. In addition to these five scheduled meetings, the Supervisory Board convened on November 8, 2010, for an extraordinary Supervisory Board meeting. The main item on the agenda at this meeting was a discussion of the key figures in the financial statements and the outlook for fiscal 2010/2011 before the annual press conference on November 9, 2010. The five scheduled Supervisory Board meetings were held on November 24, 2010, and on January 25, May 3, July 27, and September 27, 2011. The average attendance at these meetings of the Supervisory Board was 94.4%, and no committee members took part in less than half of the meetings. All meetings were attended by representatives of the Board of Directors. At the aforementioned meetings, all necessary resolutions were passed on the basis of documentation prepared in advance. Between each meeting convened by the Supervisory Board, the Board of Directors informed the Supervisory Board promptly and comprehensively about important events of particular significance in assessing the position and performance as well as the overall management of the Company. Furthermore, the Board of Directors remained in continuous contact with the Supervisory Board and informed it about the current business position as well as significant occurrences, developments, and decisions.
At its meeting on September 27, 2011, the Supervisory Board conducted a self-assessment in order to examine the efficiency of its activities.
Key Areas of Deliberation by the Supervisory Board.
At its individual meetings, the Supervisory Board regularly examined the business, net sales, and earnings performance of the Group and its segments, as well as cash flows, implementation of the strategic focus, and HR development. It also discussed measures to exploit potential growth while improving efficiency and reducing costs, including the continued successful implementation of our strategic “ProFuture” program, which was launched in 2009, our cost-reduction program “ProImprove,” and other initiatives for change, with a particular focus on generating stronger regional growth in the emerging market regions of Asia/Pacific/Africa and Latin America.
In addition, the Supervisory Board discussed proposals to approve the issue of share options to members of the Board of Directors and employees (2011 tranche) and the repurchase of Company shares.
At its meeting on July 27, 2011, the Supervisory Board adopted a proposal to extend the term of office of President & CEO and member of the Board of Directors Eckard Heidloff, which was due to expire on January 28, 2012, by a further five years, up to and including January 28, 2017. At the same meeting, the Supervisory Board also agreed to extend the term of office of member of the Board of Directors Dr. Jürgen Wunram, which was due to expire on February 28, 2012, also by a further five years, up to and including February 28, 2017. At its meeting on September 27, 2011, the Supervisory Board gave its approval to the fiscal 2011/2012 budget proposed by the Board of Directors and to the medium-term strategic business development plan. In addition, the Supervisory Board drew up objectives in relation to its own composition with regard to diversity and examined the current state of implementation. Details can be found in the Corporate Governance Report in this Annual Report.
The Supervisory Board is supported in its duties by four committees established by this body. These committees are responsible for preparing the ground for Supervisory Board resolutions and examining issues subsequently to be addressed in plenary sessions. Furthermore, the Supervisory Board has delegated decision-making authority to the committees within specific areas.
With the exception of the Audit Committee, which is chaired by Supervisory Board member Hero Brahms, the committees are presided over by the Chairman of the Supervisory Board.
The Audit Committee convened on three occasions during the fiscal year under review. The main focus of its work was on examining the annual accounts and Group financial statements of Wincor Nixdorf AG and the budget for fiscal 2011/2012. Other issues addressed were the Company’s risk report and risk management policy, reporting by Internal Audit, and measures aimed at further extending the corporate compliance program.
The Personnel Committee met on July 27, 2011, to discuss the extension of the terms of office of Eckard Heidloff and Dr. Jürgen Wunram on the Board of Directors, the corresponding adjustments to their employment contracts, and the compensation payable to the Board of Directors.
During the year under review, the Nomination Committee convened on July 27, 2011, to prepare a proposal of the Supervisory Board to the Annual General Meeting on January 23, 2012, concerning the election of two shareholder representatives to the Supervisory Board.
There was again no need to convene the Mediation Committee during the fiscal year just ended.
Corporate Governance and Declaration of Conformity.
With regard to Corporate Governance, this Annual Report contains a separate section with a report by the Board of Directors, issued also on behalf of the Supervisory Board, pursuant to Section 3.10 of the German Corporate Governance Code. On November 23, 2011, the Board of Directors and the Supervisory Board issued an updated Declaration of Conformity (Glossary) pursuant to Section 161 of the German Stock Corporation Act (AktG) and made the declaration, along with details of non-conformity, permanently available to shareholders on the Company website.
Approval of the Annual Accounts and Adoption of the Group Financial Statements.
On January 24, 2011, the Annual General Meeting appointed the accountancy firm KPMG AG (Bielefeld), as auditor of the accounts. The Group financial statements for the fiscal year 2010/2011, prepared in accordance with Section 315 a of the German Commercial Code (Handelsgesetzbuch – HGB) and IFRS (Glossary) , including an additional Group management report, have been audited by KPMG and given an unqualified audit opinion. This also applies to the separate annual accounts and management report of Wincor Nixdorf AG for the fiscal year 2010/2011, which were prepared on the basis of German accounting regulations.
The documentation pertaining to the financial statements, the Board of Directors’ proposal for the appropriation of profit, and the auditor’s reports were submitted to the Audit Committee and the Supervisory Board in good time prior to their meetings. The information was examined in detail by the Audit Committee and subsequently by the full Supervisory Board, and discussed in the presence of the auditor, who was on hand to take questions and provide further information. Following its own examination of the Group financial statements and the Group management report, as well as the separate annual accounts and management report of Wincor Nixdorf AG, the Supervisory Board took the view that it did not wish to make any objections. Consequently, at its meeting on November 23, 2011, in line with the recommendation of its Audit Committee, the Supervisory Board concurred with the result of the audit and approved the financial statements and management reports drawn up by the Board of Directors. The annual accounts were thus formally adopted.
The Supervisory Board also discussed the proposal for the appropriation of profit and the dividend policy with the Board of Directors. With due regard for the Company’s solid financial situation and the expectations of both shareholders and the capital markets, the Supervisory Board gave its unqualified approval to the proposal of the Board of Directors.
The Supervisory Board determined its proposed resolutions for the agenda of the Company’s Annual General Meeting to be held on January 23, 2012, and approved this Supervisory Board report.
Composition of the Supervisory Board.
In accordance with Section 7 of the Company’s Articles of Association, the Supervisory Board consists of six shareholder representatives and six employee representatives. No conflicts of interest occurred within the Supervisory Board during the period under review. The terms of office of the six employee representatives as well as those of Dr. Alexander Dibelius and Hans-Ulrich Holdenried are due to expire at the end of the Annual General Meeting responsible for adopting a motion on the approval of their actions for fiscal 2014/2015. The terms of office of Walter Gunz and Prof. Dr. Achim Bachem continue until the end of the Annual General Meeting responsible for approving the actions of the members of the Supervisory Board for fiscal 2012/2013. The term of office of Hero Brahms and my own term of office continue until the end of the Annual General Meeting responsible for approving our actions for fiscal 2010/2011.
The Supervisory Board wishes to thank the Board of Directors, all members of staff, and the employee representatives for their constructive and successful work in fiscal 2010/2011. Their tremendous commitment was particularly crucial over the last year and helped Wincor Nixdorf AG to overcome the challenges it faced.
Paderborn, November 23, 2011
Chairman of the Supervisory Board