Supervisory Board Report

Declaration of Compliance and effective corporate governance

The subject of corporate governance is very important to the Supervisory Board. We discussed the implementation of the changes in the German Corporate Governance Code, as amended on June 6, 2008, with the Executive Board, both at Supervisory Board and at Audit Committee meetings. The Supervisory Board also resolved upon the updated Rules of Procedure for the Supervisory Board and the Rules of Procedure for the Audit Committee. Furthermore, we decided to comment not only on the recommendations of the German Corporate Governance Code but, on a voluntary basis, also on the suggestions. We report on corporate governance at adidas together with the Executive Board in the see Corporate Governance Report. On February 11, 2009, together with the Executive Board, we issued an updated Declaration of Compliance with the German Corporate Governance Code in accordance with § 161 AktG. This declaration was made permanently available on the same day on the corporate website at www.adidas-Group.com/corporate_governance.

Detailed examination and discussion of the 2008 consolidated financial statements and the adidas AG annual financial statements

KPMG audited the consolidated financial statements and the Group Management Report prepared in accordance with § 315a German Commercial Code (Handelsgesetzbuch – HGB) in compliance with IFRS and issued an unqualified opinion thereon. The auditor also approved without qualification the 2008 annual financial statements and the Management Report of adidas AG prepared in accordance with HGB requirements.

The financial statements, the proposal put forward by the Executive Board regarding the appropriation of retained earnings and the auditor’s reports were submitted to the Audit Committee and the Supervisory Board in a timely manner. They were examined first by the Audit Committee on February 27, 2009. At our meeting on March 3, 2009, the adidas AG annual financial statements were then examined by the Supervisory Board as a whole and discussed in the presence of the auditor. The auditor reported the material results of the financial statements audit with focus on the 2008 priority topics as agreed with the Audit Committee. These included in particular the regularity of the adidas AG annual financial statements as incorporated in the consolidated financial statements, impairment tests for goodwill and intangible assets as well as the completeness of financial instrument information in accordance with IFRS 7 as presented in the Notes to the Group’s financial statements. The auditor was available for questions and the provision of supplementary information. Having examined the consolidated financial statements and the adidas AG annual financial statements as well as the Management Reports, we came to the conclusion that there were no objections to be raised. Following the recommendation of the Audit Committee, we therefore approved the audit results and adopted the financial statements prepared by the Executive Board at our financial statements meeting. The annual financial statements of adidas AG were thus adopted. We discussed the dividend policy with the Executive Board and, in light of the financial position of adidas AG as well as shareholder and capital market expectations, we approved the proposal regarding the appropriation of retained earnings.

Expression of thanks

At the conclusion of our five-year term in office, which expires at the end of the Annual General Meeting on May 7, 2009, we would like to express our appreciation of the tremendous personal dedication, the performance and the ongoing commitment of the Executive Board, the managements of Group companies, the Works Council and all adidas Group employees.

For the Supervisory Board

Dr. Hans Friderichs

Chairman

March 2009

 1 | 2 | 3 | 4 | 5