agm-2007-report-supervisory-board by cuiliqing

VIEWS: 37 PAGES: 2

									Report by the Supervisory Board
               Ladies and Gentlemen,

               In 2006, Telekom Austria continued its
               growth and internationalization strategy
               focused on a sustainable increase in            There were also a number of changes to
               shareholder value and, at the same time,        the Supervisory Board in 2006: Peter
               successfully defended its market and            Mitterbauer, Harald Sommerer and Otto G.
               innovation leadership in Austria. The very      Zich retired from the Supervisory Board.
               favorable development of financial results      The election of Wolfgang C. Berndt and
               in previous years reached a new record          Hans Jörg Schelling at the 2006 Annual
               level in the reporting year.                    General Meeting further strengthened the
                                                               expertise of the Supervisory Board in the
               In addition to the continuing focus on          areas of Corporate Governance and Market-
               expansion, 2006 also saw changes at the         ing. Following his election to Parliament,
               top management level in line with the new       Hans Jörg Schelling resigned from the
               holding structure. Boris Nemsic was             Supervisory Board in February 2007.
               appointed Chairman of the Management
               Board of Telekom Austria effective May 24,      The continuation of the value-oriented
               2006, and Rudolf Fischer Vice Chairman of       expansion strategy and the personnel
               the Management Board. Both manage-              decisions outlined above required frequent
               ment mandates were extended until               meetings of the Supervisory Board and its
               April 30, 2011. Based on the new holding        committees. The business development
               structure, which provides for a transparent     and strategic focus of the Telekom Austria
               and future-oriented Group structure with        Group was discussed extensively at nine
               two operational units under the umbrella        meetings of the Supervisory Board,
               of a lean management holding company, the       five meetings of the Audit Committee
               Supervisory Board drew up a qualification       established in compliance with US law,
               profile for the Chief Financial Officer. The    one meeting of the Audit Committee
               Personnel and Nomination Committee was          established under Austrian law, three
               asked to make the necessary preparations        meetings of the Personnel Committee and
               for filling this position.                      a strategy workshop. Particular attention
                                                               was devoted to expansion projects in the
               At a meeting of the Supervisory Board on        wireless segment in Serbia, Bosnia
               October 23, 2006, Hans Tschuden was             Herzegovina, Slovakia, Macedonia and
               appointed to succeed Stefano Colombo,           Kosovo, and the acquisition of eTel in
               effective April 1, 2007, for a period of five   the wireline segment. Other discussions
               years. Mr. Tschuden is a respected financial    focused on strategically positioning and
               expert with in-depth knowledge of south-        asserting the two segments in Austria, risk
               eastern Europe.                                 management and internal control
                                                               systems.


                                                               The role of a financial expert for the
                                                               Audit Committee which was performed
                                                               by Harald Sommerer until his resignation,
                                                               and is now filled by Rainer Wieltsch.
                                                               Wolfgang C. Berndt was voted on to the
                                                               Audit Committee for the first time,
                                                               providing a valuable addition to this body
                                                               with his many years of experience
                                                               on the supervisory boards of several
international companies. In the year under
review, the Audit Committee focused on
the internal control system for financial
reporting which has now been implemented
throughout the Group. Other Audit             the Audit Committee (US law) and the
Committee activities included monitoring      Audit Committee (Austrian law) and
the integrity of the financial statements,    after detailed discussion and review,
the quality, independence and performance     the Supervisory Board approved the
of the auditors, and the functioning of       consolidated financial statements prepared
internal audit controls. In 2006, the         in accordance with § 245 of the Austrian
Audit Committee also carried out a self-      Enterprise Code pursuant to IFRS, the
evaluation for the first time. The Chairman   reconciliation report pursuant to the
of the Audit Committee provided the other     Austrian Enterprise Code, the reconciliation
members of the Supervisory Board with         report pursuant to U.S. GAAP, the
regular and detailed reports on the           management report and the group
Committee’s work.                             management report.

The Supervisory Board of Telekom Austria      The Supervisory Board gave its assent to
is strongly committed to compliance with      the Management Board’s proposal to pay
the Austrian Corporate Governance Code        a dividend of EUR 0.75 per eligible share
and responsible company management            and carry forward the remaining amount.
and control aimed at sustained value
creation. According to the criteria laid      I would like to take this opportunity to
down by the Supervisory Board of              offer my sincere thanks to the management
Telekom Austria, six of the eight share-      and employees for their loyalty and
holder representatives are deemed to be       commitment. In particular, I would like to
independent. Telekom Austria possesses        thank the former Chief Executive Officer,
effective corporate governance                Heinz Sundt, who retired in May 2006,
mechanisms which comply with the              and the retiring Chief Financial Officer,
strict US standards, and is therefore well    Stefano Colombo, who have both per-
prepared for the introduction of similar      formed such excellent work for the
regulations in the European Union.            company.

The annual financial statements of            I would also like to thank all Telekom
Telekom Austria AG and the consolidated       Austria customers and shareholders for
financial statements were audited by          their confidence and support and, at the
KPMG Austria Wirtschaftsprüfungs- und         same time, ask for their continued loyalty
Steuerberatungs GmbH and received             in the future.
unqualified opinions. The management
report and the group management report
are consistent with the annual financial
statements and consolidated financial
statements. After prior consultation with
the Audit Committee established under
Austrian law, and extensive discussions       Peter Michaelis
and review, the Supervisory Board             Chairman of the Supervisory Board
approved the 2006 annual financial            Vienna, March 2007
statements in accordance with § 125 Para. 2
of the Austrian Stock Corporation Act.
Furthermore, after prior consultation with

								
To top