Chrysler 2004 Annual Report Download - page 214

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We mourn the passing of Umberto Agnelli. In our bereavement,
we find solace in the thought that our memories of him will
always be in our hearts.
* * *
Dear Stockholders:
Article 153 of Legislative Decree No. 58 of February 24, 1998
envisages that the Board of Statutory Auditors report to the
Stockholders Meeting, convened to approve the statutory
financial statements, the results of its oversight activity,
indicating any omissions or improper transactions it discovered,
and empowers it to put forth motions regarding the financial
statements, their approval and other matters under its
jurisdiction.
This Report is provided in accordance with the abovementioned
provision and pursuant to Article 2429, Section 3, of the Italian
Civil Code.
During the fiscal year just ended, we performed the duties
incumbent upon us under Article 149 of Legislative Decree No.
58 of February 24, 1998, and are able to report specific
information on the subjects listed below.
We attended the meetings of the Board of Directors, where we
received detailed information on the Company’s operations and
on the main operating, financial and asset transactions carried
out or in the process of being carried out by the Company
and/or its subsidiaries. In this area, we determined and
ascertained that all pending or completed transactions comply
with all pertinent provisions of the law and the Articles of
Association, are not in conflict with any resolution adopted by
the Stockholders Meeting or produce no conflicts of interest,
and are consistent with the principles of sound management.
The Company’s organization is adequate, based on the size of
the Company. As part of our work, we met with the executives in
charge of the various Company Departments and with
representatives of the External Auditors, from whom we
obtained comprehensive information indicating that the
Company was complying with the principles of fair and sound
management.
The Board of Directors established an Internal Control
Committee and a Nominating and Compensation Committee.
In addition, a system of internal control, which is constantly
being upgraded, has been created at the Group level and is
operational at Fiat S.p.A. and its subsidiaries. We express a
favorable opinion on the Company’s system of internal control,
and on its ability to check the proper implementation of the
internal operating and administrative procedures adopted to
ensure that the Company is managed correctly and efficiently,
while at the same time identifying, preventing and minimizing
financial and operating risks and the danger of fraud. A member
of the Board of Statutory Auditors was present at all Internal
Control Committee meetings.
Based on our determinations and on the information garnered
in previous fiscal years, we further believe that the Company’s
administrative and accounting system is adequate for the
purpose of presenting fairly the results of operations.
The guidelines provided by Fiat S.p.A. to its subsidiaries
pursuant to Article 114, Section 2, of Legislative Decree No.
58/98 also appear to be adequate.
The Board of Directors provided us with the Report on
Operations for the first half of 2004 within the statutory deadline
and published it in accordance with the formalities required by
the Consob. It also complied with statutory requirements as
regards quarterly reports. With regard to the Consob
Communications of February 20, 1997, March 2, 1998 and April
6, 2001, insofar as they apply to our task, we can confirm the
following:
■The information provided by the Board of Directors in its
Report on Operations, which includes an update on the
implementation of the systems and procedures needed for
the adoption of international accounting principles (Consob
Communication DM E/5015175 of March 10, 2005), is
exhaustive and complete.
■As required by the Consolidated Law on Financial
Intermediation (Legislative Decree No. 58/98), the Board of
Statutory Auditors has been informed on a constant basis on
matters falling under its jurisdiction.
■The checks and audits of the Company conducted by us on a
periodic basis reveal no atypical or unusual transactions.
■With regard to intra-Group transactions, the Board of
Directors mentions in its Report on Operations that numerous
transactions involving the delivery of goods and the provision
of services took place between the Company, other Group
companies and/or related parties. The Report on Operations
further states that these transactions were executed on terms
that were competitive with those available in the marketplace
for goods or services of similar quality.
■The External Auditors’ report neither contains objections nor
does it draw attention to any particular event or set forth
relevant qualifications or suggestions.
■As already mentioned above, the relevant components of the
Company’s organization are adequate for their purpose and
its administrative and accounting system is reliable in
providing a fair presentation of the results of operations.
■The system of internal control is adequate and effective.
■In 2004, the Board of Directors met 11 times. We were present
at all of these meetings. The Board of Statutory Auditors met
17 times. The External Auditors attended five of these
meetings.
■The Board of Statutory Auditors received three complaints
under Article 2408 of the Italian Civil Code, which are
reviewed below. At this point, is not aware of any memoranda
that would require it to take action.
■During the course of the year we issued the various opinions
that the Board of Statutory Auditors is required to provide
pursuant to law.
REPORT OF THE BOARD OF STATUTORY AUDITORS PURSUANT TO ARTICLE 153 OF LEGISLATIVE
DECREE NO. 58/1998, AND ARTICLE 2429, SECTION 3, OF THE ITALIAN CIVIL CODE