Report by the Supervisory Board
of Telefónica Czech Republic
In keeping with the Company’s Articles of Association, the Supervisory Board of Telefónica Czech Republic in 2011 supervised the discharge of the Board of Directors’ powers and the running of the Company’s business. Supervisory Board members have the power to inspect all documents and records concerning the Company’s activities; check whether the accounting records are kept to reflect the reality; determine whether the business of Telefónica Czech Republic is done in compliance with the law, Articles of Association and instructions of the General Meeting.
The Supervisory Board continuously monitored the activities of Telefónica Czech Republic and key decisions made by the Board of Directors and the management. Further, the Supervisory Board addressed the suggestions raised by its committees and its members individually. Board of Directors and the management provided the Supervisory Board with the documentation and information necessary for the discharge of its functions in accordance with the legislation and the Articles of Association. The Supervisory Board worked in close contact with the Audit Committee of Telefónica Czech Republic regarding all principal matters falling to the authority of both the governing bodies.
At the meeting held on 17 February 2012, the Supervisory Board reviewed the audited annual financial statements for the year 2011 (unconsolidated and consolidated) prepared in accordance with the International Financial Reporting Standards. The Supervisory Board also reviewed the Board of Director’s proposal for the distribution of profit for the year 2011 and of the retained earnings of the Company, and, as the case may be, any disposable funds of the Company, and the determination of royalties for the year 2011. In both instances, the Supervisory Board issued a recommendation to the General Meeting of the Company to approve the proposals.
In Prague, 17 February 2012
José María Álvarez-Pallete López
Chairman of the Supervisory Board
