SENIOR VP AND CFO

2013-08-12T10:39:58-05:00 2012-12-31 135381590 BDO USA LLP 7101 WISCONSIN AVE SUITE 800 BETHESDA MD 208144827 990 2012-01-01 620786018 COTTON INCORPORATED COTT 9196782220 6399 WESTON PARKWAY CARY NC 27513 DAVID BYRD SENIOR VP AND CFO 9196782220 2013-08-12 1 MICHAEL SORRELLS CPA P00001737 3016544900 2012 2016-02-24 21:20:13Z DAVID BYRD 6399 WESTON PARKWAY CARY NC 27513 78845852 0 X WWW.COTTONINC.COM X 1967 TN FROM AGRICULTURAL, FIBER AND TEXTILE RESEARCH, MARKET INFORMATION AND TECHNICAL SERVICES TO ADVERTISING AND PUBLIC RELATIONS, FASHION FORECASTS AND RETAIL PROMOTIONS, WE KEEP ONE GOAL IN MIND: TO ENSURE THAT COTTON REMAINS THE FIRST CHOICE AMONG CONSUMERS IN APPAREL AND HOME PRODUCTS. 110 110 154 110 0 0 70793669 78845852 0 0 0 -3540 0 0 70793669 78842312 126786 457941 0 0 18448691 15720956 0 0 0 53736298 60336419 72311775 76515316 -1518106 2326996 12425003 17950193 15789765 18987959 -3364762 -1037766 X FROM AGRICULTURAL, FIBER AND TEXTILE RESEARCH, MARKET INFORMATION AND TECHNICAL SERVICES TO ADVERTISING AND PUBLIC RELATIONS, FASHION FORECASTS AND RETAIL PROMOTIONS, WE KEEP ONE GOAL IN MIND: TO ENSURE THAT COTTON REMAINS THE FIRST CHOICE AMONG CONSUMERS IN APPAREL AND HOME PRODUCTS. 0 0 CONSUMER MARKETING PROGRAM SERVICE USED A DIVERSIFIED PORTFOLIO OF COMMUNICATION VEHICLES TO PROMOTE THE AWARENESS OF COTTON THROUGH ADVERTISING, STRATEGIC ALLIANCES AND PUBLIC RELATION ACTIVITIES. ADVERTISING CONTINUED TO CREATE NEW THE FABRIC OF MY LIFE (R) TELEVISION COMMERCIALS AND RELATED INTERNET PROPERTIES AS WELL AS TRADE ADVERTISING EXTOLLING THE BENEFITS OF COTTON AS A TEXTILE AND NON-WOVENS FIBER. STRATEGIC ALLIANCES LAUNCHED COTTON'S ROAD TO THE RUNWAY 2012, A LEAD-IN TO THE 2013 COTTON'S 24 HOUR RUNWAY SHOW. THE PROGRAM FOCUSED ON CELEBRATING AMERICA'S STYLE FROM COAST TO COAST. STRATEGIC ALLIANCES ALSO CONTINUED AND GREW THE COTTON. FROM BLUE TO GREEN. (TM) PROGRAM. PUBLIC RELATIONS WORKED TOWARD THE PROMOTION OF WORK OF ALL OF COTTON INCORPORATED'S DIVISIONS AND TO ELEVATE THE PERCEPTION OF COTTON AND THE COTTON INDUSTRY.CORPORATE STRATEGY AND PROGRAM METRICS (CSPM) IS ALSO WITHIN THIS PROGRAM. CSPM CONTINUED WITH ITS ASSESSMENT OF MARKET DATA TO UNDERSTAND COTTON'S COMPETITIVE POSITION, INFLUENCE PRODUCT EFFORTS AND PROMOTE COTTON PRODUCTS TO THE SUPPLY CHAIN. THE DIVISION ESTABLISHED AND SPONSORED INNOVATION CHALLENGES FOR COTTON INCORPORATED AND AIDED IN CORPORATE SUSTAINABILITY EFFORTS. GLOBAL SUPPLY CHAIN MARKETING WORKED WITH COMPANIES, ORGANIZATIONS AND ASSOCIATIONS IN THE WORLD SUPPLY CHAINS FOR FIBER PRODUCTS WITH THE OBJECTIVE OF INFLUENCING THE USE OF COTTON FIBER IN PRODUCTS. THIS PROGRAM SERVICE WORKS TOWARD KEEPING THE INDUSTRY AWARE OF THE LATEST ADVANCES IN COTTON. IT OFFERS TECHNICAL GUIDANCE, INNOVATIONS, TESTING AND MARKETING KNOWLEDGE TO COTTON BUSINESSES. ADDITIONALLY, THE PROGRAM SERVICE DEVELOPS AND DISTRIBUTES SOFTWARE SOLUTIONS THAT CONTRIBUTE TO EFFICIENCIES IN COTTON FIBER INVENTORY MANAGEMENT AND ALLOCATION DECISION MAKING. THIS PROGRAM IS COMPRISED OF THE GLOBAL SUPPLY CHAIN MARKETING DIVISION AND THE COTTON MANAGEMENT SYSTEM DIVISION.THE GLOBAL SUPPLY CHAIN MARKETING DIVISION HOSTED MAJOR INDUSTRY EVENTS, ONE-ON-ONE MEETINGS AND COLLABORATIVE PROJECTS WITH LEADING MANUFACTURERS, BRANDS AND RETAILERS AND INTRODUCED COTTON UNIVERSITY TM.THE CMS CONTINUED TO ENHANCE THE EFS SOFTWARE SYSTEM, INCLUDING IMPROVEMENTS IN HAND-HELD RECEIVING OPERATIONS AND IMPROVEMENTS TO THE MERCHANT VERSION FOR IMPROVED EFFICIENCIES IN LOADING BALES FOR SHIPMENT. THE DIVISION ALSO DEVELOPED A WEB BASED VERSION OF THE EFS-USCROP SOFTWARE AND HELD CUSTOMER SERVICE VISITS DURING THE YEAR. AGRICULTURAL RESEARCH SUPPORTED THE U.S. COTTON INDUSTRY THROUGH ITS FIELD AND LABORATORY RESEARCH. THE PROGRAM SERVICE CONTINUED TO CREATE NEW INNOVATIONS IN COTTON AND SHARE THEM WITH BOTH THE PUBLIC AND PRIVATE SECTORS. WORKSHOPS, SEMINARS AND GUIDES CONTINUED TO PLAY A ROLE IN THE DISSEMINATION OF RESEARCH SUPPORTED BY THIS PROGRAM SERVICE. THIS INCLUDED, BUT NOT LIMITED TO, PEST MANAGEMENT, IRRIGATION, DROUGHT AND HEAT TOLERANCE. THE PROGRAM WAS ALSO ABLE TO, IN COLLABORATION WITH 31 OTHER ORGANIZATIONS, ACHIEVE A BREAKTHROUGH IN SEQUENCING OTHER COTTON GENOME. RESEARCH AND DEVELOPMENT. CORPORATE SERVICES. 0 1 0 0 0 0 0 0 0 1 0 0 0 1 1 1 0 0 1 1 0 0 0 0 0 0 0 1 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 140 0 1 154 1 0 1 CH HK MX JA 0 0 0 0 0 0 X 110 110 0 0 0 0 0 0 0 1 1 0 0 0 1 1 1 1 1 1 1 0 TN NC NY X DAVID BYRD 9196782220 6399 WESTON PARKWAY CARY NC 27513 BUDDY ALLEN BOARD MEMBER 1.00 X 0 0 0 STEVE ALSABROOK BOARD MEMBER 1.00 X 0 0 0 LLOYD ARTHUR BOARD MEMBER 1.00 X 0 0 0 COLEY BAILEY BOARD MEMBER 1.00 X 0 0 0 ROY BAXLEY BOARD MEMBER 1.00 X 0 0 0 RICKEY BEARDEN BOARD MEMBER 1.00 X 0 0 0 ALLEN BELOW BOARD MEMBER 1.00 X 0 0 0 MARVIN BEYER BOARD MEMBER 1.00 X 0 0 0 FRANKIE BEZNER BOARD MEMBER 1.00 X 0 0 0 KEITH BRAM BOARD MEMBER 1.00 X 0 0 0 JIMMY BROOKS BOARD MEMBER 1.00 X 0 0 0 CARL BROWN BOARD MEMBER 1.00 X 0 0 0 TIM BURCH BOARD MEMBER 1.00 X 0 0 0 JOE BURNS BOARD MEMBER 1.00 X 0 0 0 CHUCK BUSS BOARD MEMBER 1.00 X 0 0 0 LINK CARLTON BOARD MEMBER 1.00 X 0 0 0 STEVEN CLAY BOARD MEMBER 1.00 X 0 0 0 RON COLEY BOARD MEMBER 1.00 X 0 0 0 JASON CONDREY BOARD MEMBER 1.00 X 0 0 0 KEITH CORZINE BOARD MEMBER 1.00 X 0 0 0 JOHNNY CRAWFORD BOARD MEMBER 1.00 X 0 0 0 LEE CROMLEY BOARD MEMBER 1.00 X 0 0 0 JERRY DAVIS BOARD MEMBER 1.00 X 0 0 0 HUGH DOLLAR BOARD MEMBER 1.00 X 0 0 0 STEVEN DROKE BOARD MEMBER 1.00 X 0 0 0 DAVID DUNLOW BOARD MEMBER 1.00 X 0 0 0 PHILIP EDWARDS BOARD MEMBER 1.00 X 0 0 0 ROBERT ENGLERT BOARD MEMBER 1.00 X 0 0 0 JASON FELTON BOARD MEMBER 1.00 X 0 0 0 JAMES FERGUSON BOARD MEMBER 1.00 X 0 0 0 KENDALL GARRAWAY BOARD MEMBER 1.00 X 0 0 0 JEREMY GAY BOARD MEMBER 1.00 X 0 0 0 RONNIE GERIK BOARD MEMBER 1.00 X 0 0 0 KC GINGG BOARD MEMBER 1.00 X 0 0 0 BB GRIFFIN VICE CHAIRMAN 1.00 X X 0 0 0 HANK HADDOCK BOARD MEMBER 1.00 X 0 0 0 DAHLEN HANCOCK TREASURER 1.00 X X 0 0 0 JAY HARDWICK BOARD CHAIRMAN 1.00 X X 0 0 0 MYRON HAWES BOARD MEMBER 1.00 X 0 0 0 ART HEIDEN BOARD MEMBER 1.00 X 0 0 0 CRAIG HEINRICH BOARD MEMBER 1.00 X 0 0 0 EDDY HERM BOARD MEMBER 1.00 X 0 0 0 GERRY HILBERS BOARD MEMBER 1.00 X 0 0 0 MIKE HUGHES BOARD MEMBER 1.00 X 0 0 0 JEFF HUX BOARD MEMBER 1.00 X 0 0 0 NEAL ISBELL BOARD MEMBER 1.00 X 0 0 0 JAMES JOHNSON BOARD MEMBER 1.00 X 0 0 0 BERNIE JORDAN BOARD MEMBER 1.00 X 0 0 0 JOHN KING BOARD MEMBER 1.00 X 0 0 0 DONNY LASSITER BOARD MEMBER 1.00 X 0 0 0 CHUCK LEE BOARD MEMBER 1.00 X 0 0 0 RONNIE LEE BOARD MEMBER 1.00 X 0 0 0 JOHN LINDAMOOD BOARD MEMBER 1.00 X 0 0 0 STEPHEN LOGAN BOARD MEMBER 1.00 X 0 0 0 JIM MASSEY BOARD MEMBER 1.00 X 0 0 0 DANNY MAY BOARD MEMBER 1.00 X 0 0 0 GREGG MAYBERRY BOARD MEMBER 1.00 X 0 0 0 BILL MCGOUGAN BOARD MEMBER 1.00 X 0 0 0 WELDON MELTON BOARD MEMBER 1.00 X 0 0 0 CANNON MICHAEL BOARD MEMBER 1.00 X 0 0 0 BOB MILLER BOARD MEMBER 1.00 X 0 0 0 BRADY MIMMS BOARD MEMBER 1.00 X 0 0 0 TRAVIS MIRES BOARD MEMBER 1.00 X 0 0 0 PERCY MORRIS BOARD MEMBER 1.00 X 0 0 0 DANNIE MORRIS BOARD MEMBER 1.00 X 0 0 0 VAN MURPHY BOARD MEMBER 1.00 X 0 0 0 BRENT NELSON BOARD MEMBER 1.00 X 0 0 0 BILL NETHERLIN BOARD MEMBER 1.00 X 0 0 0 MARSHALL NEWTON BOARD MEMBER 1.00 X 0 0 0 MARK NICHOLS BOARD MEMBER 1.00 X 0 0 0 HERRICK NORCROSS BOARD MEMBER 1.00 X 0 0 0 JOHN OLSON BOARD MEMBER 1.00 X 0 0 0 DAVIS OWEN BOARD MEMBER 1.00 X 0 0 0 LYALL PACHECO BOARD MEMBER 1.00 X 0 0 0 MIKE PATSCHKE BOARD MEMBER 1.00 X 0 0 0 DAVID PEARSON BOARD MEMBER 1.00 X 0 0 0 LOUIE PERRY BOARD MEMBER 1.00 X 0 0 0 GLEN PHIPPS BOARD MEMBER 1.00 X 0 0 0 TERRY POLLARD BOARD MEMBER 1.00 X 0 0 0 DIANN PRECHEL BOARD MEMBER 1.00 X 0 0 0 CHUCK PROVANCE BOARD MEMBER 1.00 X 0 0 0 DARRYL QUIGLEY BOARD MEMBER 1.00 X 0 0 0 NATHAN REED BOARD MEMBER 1.00 X 0 0 0 JOHNIE REED BOARD MEMBER 1.00 X 0 0 0 DANNY ROBBINS BOARD MEMBER 1.00 X 0 0 0 BRIAN ROBINSON BOARD MEMBER 1.00 X 0 0 0 GILL ROGERS BOARD MEMBER 1.00 X 0 0 0 LARRY SAYES BOARD MEMBER 1.00 X 0 0 0 HARVEY SCHROEDER BOARD MEMBER 1.00 X 0 0 0 ERIC SEIDENBERGER BOARD MEMBER 1.00 X 0 0 0 MARSH SHERMAN BOARD MEMBER 1.00 X 0 0 0 VANCE SHOAF BOARD MEMBER 1.00 X 0 0 0 TAYLOR SLADE BOARD MEMBER 1.00 X 0 0 0 LEWIE JOE SMITH BOARD MEMBER 1.00 X 0 0 0 SAM SPARKS BOARD MEMBER 1.00 X 0 0 0 AL SPINKS BOARD MEMBER 1.00 X 0 0 0 LARRY STARRH BOARD MEMBER 1.00 X 0 0 0 STEVE STEVENS BOARD MEMBER 1.00 X 0 0 0 RAMEY STILES BOARD MEMBER 1.00 X 0 0 0 MARTIN STOERNER BOARD MEMBER 1.00 X 0 0 0 TUTT SULLIVAN BOARD MEMBER 1.00 X 0 0 0 GUY TEETER BOARD MEMBER 1.00 X 0 0 0 GARY TIDWELL BOARD MEMBER 1.00 X 0 0 0 PHIL VANDIVER BOARD MEMBER 1.00 X 0 0 0 BRUCE VAUGHN BOARD MEMBER 1.00 X 0 0 0 WILL WADE BOARD MEMBER 1.00 X 0 0 0 BOB WALKER BOARD MEMBER 1.00 X 0 0 0 MARK WATTE SECRETARY 1.00 X X 0 0 0 STEWART WEAVER BOARD MEMBER 1.00 X 0 0 0 STEVE WILBUR BOARD MEMBER 1.00 X 0 0 0 J BERRYE WORSHAM PRESIDENT AND CEO 40.00 X 510117 0 126566 DAVID BYRD SR. VP AND CFO 40.00 X 216789 0 68041 JOHN MORGANS VP ADMINISTRATION 40.00 X 168028 0 65614 RICHMOND HENDEE SR. VP CONSUMER MKTG. 40.00 X 221872 0 88633 KATER HAKE VP AGRICULTURE AND ENVIRONMENTAL RESEARCH 40.00 X 220159 0 95673 MARK MESSURA SR. VP GLOBAL SUPPLY CHAIN MARKETING 40.00 X 229641 0 85972 ROBERT TYNDALL VP PROD DEV & IMPLEM. 40.00 X 158278 0 54989 MICHAEL WATSON VP FIBER COMPETITION 40.00 X 166481 0 68230 KIMBERLY S KITCHINGS VICE PRESIDENT, CORP. STRATEGY & PROGRAM METRICS 40.00 X 128365 0 44564 JOHN CHIAVACCI CHIEF TECHNOLOGY OFFICER 40.00 X 133335 0 51740 PATRICIA O'LEARY SR. DIR. AGRIC. RESEARCH 40.00 X 140833 0 47869 ROBERT NICHOLS SR. DIR. AG/ENVIR RESEARCH 40.00 X 135731 0 55221 2429629 0 853112 24 0 1 0 DON BAILEY 7620 ROCK QUARRY ROAD RALEIGH NC 27610 IMPORTER SUPPORT CONSULTANT 121666 BDO USA 5430 WADE PARK BLVD SUITE 300 RALEIGH NC 27607 AUDIT AND TAX 110493 SNR DENTON 233 WAKER DRIVE 7800 CHICAGO IL 60606 LEGAL 109401 3 78845852 78845852 3540 -3540 -3540 -3540 78842312 0 0 -3540 457941 2351493 10760616 -100182 1884528 824501 3191905 161636 170743 322290 2381412 24798532 645412 691551 1705528 2945914 3076636 1398021 271061 RESEARCH AND PROMOTION 14090753 MAINTENANCE 1230034 SPONSORSHIP 1129898 2125093 76515316 3857 2935 7467065 12305213 920788 878116 838789 998544 18094188 14328803 3194504 3765385 12425003 17950193 9368527 14132051 197759 283891 6137347 4658149 15789765 18987959 X -3364762 -1037766 -3364762 -1037766 12425003 17950193 2326996 0 X X 0 1 X 1 0 RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED 1996188 1127594 868594 14372447 11666423 2706024 1725553 1534786 190767 3765385 ACCRUED PENSION COST 4436718 DEFERRED LEASE OBLIGATION 221431 4658149 X 80968899 2123047 2123047 78845852 -3540 -3540 78842312 78641903 2123047 3540 2126587 76515316 0 76515316 DESCRIPTION OF UNCERTAIN TAX POSITIONS UNDER FIN 48: PART X, LINE 2: THE COMPANY IS EXEMPT FROM FEDERAL INCOME TAXES UNDER SECTION 501(C)(6) OF THE INTERNAL REVENUE CODE, EXCEPT FOR ANY UNRELATED BUSINESS INCOME. THERE WAS NO UNRELATED BUSINESS INCOME EARNED DURING THE YEARS ENDED DECEMBER 31, 2012 AND 2011, AND THUS, NO PROVISION FOR INCOME TAXES HAS BEEN MADE. THE COMPANY ACCOUNTS FOR UNCERTAINTY IN INCOME TAXES USING A RECOGNITION THRESHOLD OF MORE-LIKELY-THAN-NOT TO BE SUSTAINED UPON EXAMINATION BY THE APPROPRIATE TAXING AUTHORITY. MEASUREMENT OF UNCERTAINTY OCCURS IF THE RECOGNITION THRESHOLD HAS BEEN MET. MANAGEMENT BELIEVES THAT THERE WERE NO UNCERTAIN TAX POSITIONS THAT MET THE RECOGNITION THRESHOLD IN 2012 OR 2011. THE COMPANY'S TAX RETURNS ARE OPEN FOR EXAMINATION FOR YEARS 2008 THROUGH 2012. PART XI, LINE 4B - OTHER ADJUSTMENTS: LOSS ON DISPOSAL OF FIXED ASSETS -3,540. PART XII, LINE 2D - OTHER ADJUSTMENTS: LOSS ON DISPOSAL OF FIXED ASSETS 3,540. NORTH AMERICA - CANADA AND MEXICO, BUT 1 2 PROGRAM SERVICES TECHNICAL AND INFORMATION SUPPORT 1110420 EAST ASIA AND THE PACIFIC - 3 17 PROGRAM SERVICES TECHNICAL AND INFORMATION SUPPORT 6091985 EUROPE (INCLUDING ICELAND & GREENLAND) - 0 0 PROGRAM SERVICES TECHNICAL AND INFORMATION SUPPORT 1410635 4 19 0 0 4 19 8613040 0 8613040 0 0 0 0 0 0 1 RESEARCH 8 457941 PROCEDURE FOR MONITORING GRANTS IN THE U.S.: PART I, LINE 2: SCHEDULE I, PART I, LINE 2: GRANTS ARE OVERSEEN BY OUR AGRICULTURAL AND ENVIRONMENTAL RESEARCH EMPLOYEES. THESE EMPLOYEES MONITOR THE PROGRESS OF THOSE RECEIVING GRANTS, INCLUDING REQUIRED COMMUNICATIONS OF THEIR PROGRESS AND SITE VISITS. X X 1 1 X X 0 0 0 J BERRYE WORSHAM PRESIDENT AND CEO 419362 0 51250 0 39505 0 94238 0 32328 0 636683 0 0 0 DAVID BYRD SR. VP AND CFO 194578 0 16125 0 6086 0 48601 0 19440 0 284830 0 0 0 JOHN MORGANS VP ADMINISTRATION 152301 0 12600 0 3127 0 36250 0 29364 0 233642 0 0 0 RICHMOND HENDEE SR. VP CONSUMER MKTG. 199788 0 10892 0 11192 0 58252 0 30381 0 310505 0 0 0 KATER HAKE VP AGRICULTURE AND ENVIRONMENTAL RES 196597 0 14208 0 9354 0 61383 0 34290 0 315832 0 0 0 MARK MESSURA SR. VP GLOBAL SUPPLY CHAIN MARKETING 208359 0 15504 0 5778 0 53202 0 32770 0 315613 0 0 0 ROBERT TYNDALL VP PROD DEV & IMPLEM. 144236 0 8400 0 5642 0 38294 0 16695 0 213267 0 0 0 MICHAEL WATSON VP FIBER COMPETITION 148444 0 10404 0 7633 0 38519 0 29711 0 234711 0 0 0 KIMBERLY S KITCHINGS VICE PRESIDENT, CORP. STRATEGY & PRO 118451 0 8475 0 1439 0 26260 0 18304 0 172929 0 0 0 JOHN CHIAVACCI CHIEF TECHNOLOGY OFFICER 122065 0 8925 0 2345 0 32888 0 18852 0 185075 0 0 0 PATRICIA O'LEARY SR. DIR. AGRIC. RESEARCH 123921 0 9916 0 6996 0 39994 0 7875 0 188702 0 0 0 ROBERT NICHOLS SR. DIR. AG/ENVIR RESEARCH 117726 0 9832 0 8173 0 35736 0 19485 0 190952 0 0 0 PART I, LINE 1A THE COMPANY REQUIRES BUSINESS CLASS TICKETS BE PURCHASED FOR TRAVEL TO CERTAIN REGIONS OF THE GLOBE. WHEN THESE TICKETS ARE PURCHASED, FIRST CLASS IS INCLUDED FOR ALL CONNECTING FLIGHTS IN THE U.S. FORM 990, PART VI, SECTION B, LINE 11 THE FORM 990 IS REVIEWED IN DETAIL WITH THE COMPANY'S AUDIT COMMITTEE AFTER COMPLETION AT THE AUGUST BOARD OF DIRECTOR'S MEETING FOR APPROVAL PRIOR TO FILING. SUBSEQUENT TO REVIEW, THE CHAIRMAN OF THE AUDIT COMMITTEE WILL INFORM THE COMPLETE BOARD OF DIRECTOR'S OF THE PROCEEDINGS AND OUTCOME. FORM 990, PART VI, SECTION B, LINE 12C ALL DIRECTORS ARE REQUIRED TO ATTEST THAT THEY ARE FREE OF ANY CONFLICTS OF INTEREST. FORM 990, PART VI, SECTION B, LINE 15 AN INDEPENDENT COMPENSATION COMMITTEE DETERMINES COMPENSATION FOR ALL EMPLOYEES OF THE COMPANY. MINUTES OF THEIR MEETINGS ARE MAINTAINED. FORM 990, PART VI, SECTION C, LINE 19 THE ORGANIZATION MAKES ITS GOVERNING DOCUMENTS, CONFLICT OF INTEREST POLICY, AND FINANCIAL STATEMENTS AVAILABLE UPON REQUEST BY AN APPROPRIATE PARTY. OVERSIGHT OF AUDIT: FORM 990, PART XI, LINE 2C THERE HAVE BEEN NO CHANGES DURING THE YEAR IN THE PROCESS FOR OVERSIGHT OF THE AUDIT OF THE FINANCIAL STATEMENTS.