To the best of our knowledge, and in accordance with the applicable reporting principles, the Consolidated Financial Statements give a true and fair view of the assets, liabilities, financial position and profit or loss of the Group, and the Group Management Report includes a fair review of the development and per- formance of the business and the position of the Group, together with a descrip- tion of the principal opportunities and risks associated with the expected de- velopment of the Group.
Martinsried, February 14, 2012
Dr. Simon E. Moroney Mr. Jens Holstein
Chief Executive Officer Chief Financial Officer
Dr. Arndt Schottelius Dr. Marlies Sproll
Chief Development Officer Chief Scientific Officer
F i n a n c i a l S t a t e m e n t S
142
aPPenDiX 1: cHaRt OF tHe cOnSOliDateD ent i t Y aS OF DecemBeR 31, 2011
Name and Corporate Seat of the Company local currency
exchange Rate on Dec 31, 2011 one Unit of euro
in local currency capital %Share of
Share capital in local currency total assets in local currency total liabilities in local currency total Revenue in local currency Profit/loss in local currency
CompANY CoNSolIDATED (ApART fRom pARENT CompANY )
MorphoSys USA, Inc., Charlotte, North Carolina, USA US $ 1.29257 100 2,000 2,779 0 0 (1,169)
MorphoSys IP GmbH, Munich, Germany € – 100 25,000 3,326,667 3,294,999 3,343,800 (4,597)
MorphoSys UK Ltd., Oxford, UK £ 0.83819 100 100 7,591,872 2,465,402 9,822,704 12,390
MorphoSys US, Inc., Raleigh, North Carolina, USA US $ 1.29257 100 50,000 2,882,372 803,914 9,670,994 509,448
MorphoSys AbD GmbH, Düsseldorf, Germany € – 100 25,000 1,345,897 85,212 3,035,750 72,247
Poole Real Estate Ltd., Poole, UK £ 0.83819 100 200 835,763 7,400 0 (91,120)
Sloning BioTechnology GmbH, Puchheim, Germany € – 100 951,660 10,532,743 4,449,167 4,200,419 2,478,504
Responsibility Statement
To the best of our knowledge, and in accordance with the applicable reporting principles, the Consolidated Financial Statements give a true and fair view of the assets, liabilities, financial position and profit or loss of the Group, and the Group Management Report includes a fair review of the development and per- formance of the business and the position of the Group, together with a descrip- tion of the principal opportunities and risks associated with the expected de- velopment of the Group.
Martinsried, February 14, 2012
Dr. Simon E. Moroney Mr. Jens Holstein
Chief Executive Officer Chief Financial Officer
Dr. Arndt Schottelius Dr. Marlies Sproll
Chief Development Officer Chief Scientific Officer
143
Notesconsolidation principles used and significant estimates made by the Company´s Board of Managing Directors, as well as evaluating the overall presentation of the consolidated financial statements and the group management report. We believe that our audit provides a rea sonable basis for our opinion.
Our audit has not led to any reservations.
In our opinion, based on the findings of our audit the consolidated financial statements comply with the IFRSs as adopted by the EU, the additional requirements of German commercial law pursuant to Article 315a Section 1 German Commercial Code and supplementary provisions of the articles of incorporation and give a true and fair view of the net assets, financial position and results of operations of the Group in accordance with these requirements. The group management report is consistent with the consolidated financial statements and as a whole provides a suitable view of the Group's position and suitably presents the opportunities and risks of future development.
Munich, February 15, 2012 PricewaterhouseCoopers Aktiengesellschaft
Wirtschaftsprüfungsgesellschaft
Stefano Mulas Dietmar Eglauer
Wirtschaftsprüfer Wirtschaftsprüfer
(German Public Auditor) (German Public Auditor)
We have audited the consolidated financial statements prepared by the MorphoSys AG, Martinsried, comprising the consolidated income statement, consolidated statement of comprehensive income, con solidated balance sheet, consolidated statement of changes in stock holders’ equity, consolidated statement of cash flows and notes, to gether with the group management report for the business year from January 1, 2011 to December 31, 2011. The preparation of the con solidated financial statements and the group management report in accordance with the IFRSs, as adopted by the EU, the additional re quirements of German commercial law pursuant to Article 315a Sec tion 1 German Commercial Code and supplementary provisions of the articles of incorporation are the responsibility of the Parent Com pany's Board of Managing Directors. Our responsibility is to express an opinion on the consolidated financial statements and on the group management report based on our audit.
We conducted our audit of the consolidated financial statements in accordance with Article 317 German Commercial Code and German generally accepted standards for the audit of financial statements promulgated by the Institute of Public Auditors in Germany. Those standards require that we plan and perform the audit such that misstatements materially affecting the presentation of the net assets, financial position and results of operations in the consolidated finan cial statements in accordance with the applicable financial reporting framework and in the group management report are detected with reasonable assurance. Knowledge of the business activities and the economic and legal environment of the Group and expectations as to possible misstatements are taken into account in the determination of audit procedures. The effectiveness of the accountingrelated in ternal control system and the evidence supporting the disclosures in the consolidated financial statements and the group management report are examined primarily on a test basis within the framework of the audit. The audit includes assessing the annual financial state ments of those entities included in consolidation, the determination of the entities to be included in consolidation, the accounting and
Auditor’s Report
discussions focused on the Company’s proprietary drug development plans as well as opportunities to accelerate the growth and increase the value of MorphoSys.
The topics of our regular discussion at the Supervisory Board’s ple nary meetings were revenue and profit development of MorphoSys, as well as the progress and challenges in the three business segments. The discussions were based on comprehensive documentation provided by the Management Board in advance of each meeting.
We also decided on the compensation of Management Board members for the fiscal year 2011 on the basis of external benchmarking and their achievement of performancerelated targets. The appropriateness of the Management Board’s compensation was confirmed by an inde pendent remuneration consultant.
On January 30, 2011, the Supervisory Board reviewed and approved an updated financial plan for the business segment AbD Serotec, and discussed the revised revenue recognition of the agreement with Pfizer, which was signed in December 2010.
At our meeting on February 22, 2011, we primarily discussed the Group Management Report and the Financial Statements according to IFRS for the MorphoSys Group as of December 31, 2010. We also discussed and agreed on the key performance indicators for the newly introduced longterm incentive program for the Management Board and the Senior Management Group. We also approved the recommen dation for the upcoming Annual Shareholders’ Meeting to reelect Prof. Jürgen Drews for another year as member of the Supervisory Board.
Continuous Dialog with the ManageMent BoarD
During 2011, the Supervisory Board performed its duties assigned to it by law, the Company’s Articles of Association and its internal Rules of Procedure. We regularly advised the Management Board on the management of the Company and continuously observed and super vised its conduct of business. The Management Board fulfilled its duty to inform and furnished us with regular written and verbal re ports containing uptodate and comprehensive information on all incidents and activities of relevance to the Company, which were pre pared by the Management Board with the input of the respective departments. In our committees and in full Supervisory Board meet ings we always had the opportunity to critically discuss the reports and resolution proposals of the Management Board and to contribute suggestions. When we had questions about strategic topics impact ing the Company, the Management Board provided sufficiently detailed answers on the basis of the documents presented. Deviations from business plans were explained to us in detail. In justified cases reso lutions were passed outside meetings by written procedure.
In the periods between meetings of the full Supervisory Board and the committees, as the Chairman of the Board, I personally maintained regular contact with the Management Board and especially with the Chief Executive Officer, Dr. Simon Moroney, and was kept informed about the current business situation and key business transactions. I also took the opportunity to talk directly to members of the Senior Management Group.
Main topiCs at the Meetings of the supervisory BoarD in 2011
The Supervisory Board was intensively involved from an early stage in all decisions of significance for the Company. Decisions were based on the Company’s agreed strategy. In 2011, the majority of our