BMW 2013 Annual Report Download - page 11

The fee proposals for the audit of the year-end Company and Group Financial Statements 2013 and the
review of the six-month Interim Financial Report were deemed appropriate by the Audit Committee. Sub-
sequent
to the Annual General Meeting 2013, the Audit Committee therefore appointed KPMG AG for the
relevant engagements and, with due consideration to the suggestions made by the full Supervisory Board,
specified audit focus areas, which, in 2013, included the measurement of warranty and pension provisions
as well as the recognition of development costs incurred in conjunction with cooperation agreements.
The Head of Group Financial Reporting reported to the Audit Committee on risk management processes
in place throughout the BMW Group, including an in-depth description of the internal control system (ICS)
underlying financial reporting. The procedures for determining the degree of maturity of a unit’s ICS were ex-
plained on an illustrative basis for a plant, a sales company and a financial services company.
The Chairman of the BMW Group Compliance Committee reported to the Audit Committee on the cur-
rent compliance situation, which, as in the previous year, was deemed satisfactory overall. None of the in-
formation received relating to potential non-compliance or actual incidences of non-compliance identified in
specific cases give any indication of serious or systematic non-compliance with applicable requirements.
The Head of Group Internal Audit reported to us in the Audit Committee on the significant findings of
audits conducted by Group Internal Audit, on both the industrial and financial services sides of the business,
and put forward suggested recommendations for improvement.
We concurred in the Audit Committee with the decision of the Board of Management to raise the Com-
pany’s share capital in accordance with § 4 (5) of the Articles of Incorporation (Authorised Capital 2009) by
€265,570 and to issue a corresponding number of new non-voting bearer shares of preferred stock, each with
a par value of € 1, at favourable conditions to employees.
The Personnel Committee convened four times during the financial year 2013.
In preparation of the full Supervisory Board’s meetings, we reviewed the structure and appropriateness
of Board of Management compensation, including pension entitlements. We also worked on proposals to
increase the extent to which pension contributions for Board of Management members are staggered and to
implement the latest recommendations of the German Government Corporate Governance Code
Commis-
sion relating to compensation and / or changes in employment contracts. In one case, we also gave our approval
for a member of the Board of Management to accept the mandate for membership of the supervisory board
of a non-BMW Group entity.
The Nomination Committee convened twice during the financial year 2013. At these meetings, we de-
liberated
on medium and long-term successor planning for the shareholders’ representatives on the Super-
visory Board and considered proposals for candidates for the Supervisory Board elections at the 2013 and
2014 Annual General Meetings, taking the composition objectives stipulated for the Supervisory Board into
due account.
The statutory Mediation Committee (§ 27 (3)) of the Law on Worker Participation) was not required to be
convened during the financial year 2013.
Composition and organisation of the Board of Management It was with much regret, but also with a great
deal of respect and understanding, that we accepted the decision taken by Frank-Peter Arndt to step down
from his position as Board of Management member responsible for Production with effect from 31 March 2013
11 REPORT OF THE SUPERVISORY BOARD