Chrysler 2004 Annual Report Download - page 215

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■The Company complies with the recommendations of the
Corporate Governance Code issued by the Committee for
the Corporate Governance of Italian listed companies and
publishes an Annual Report on Corporate Governance that
details its activities in this area.
■We have received confirmation from Deloitte & Touche S.p.A.
that Fiat S.p.A. retained its services to perform, in addition to
auditing the statutory financial statements, consolidated
financial statements, limited auditing of the consolidated first
half report, agreed procedures for auditing of the quarterly
reports, and auditing of the Form 20-F consolidated financial
statements, the tasks listed below for which the respective
fees are indicated:
– Requested studies and analyses of the accounting
procedures and disclosures to be made in the Group’s 2003
consolidated financial statements in regard to material,
non-recurring transactions carried out by Fiat S.p.A. or its
subsidiaries in 2003, for a fee of 225,000 euros;
– Requested studies and analyses of the accounting
treatment that should be applied in the Form 20-F filed for
2003, in regard to any material, non-recurring transactions
carried out by Fiat S.p.A. or its subsidiaries in 2003, for a
fee of 296,000 euros;
– Requested studies and analyses in regard to the
introduction of new United States accounting principles
applicable to the Fiat S.p.A. Form 20-F at December 31,
2003, for a fee of 192,000 euros;
– Additional auditing work concerning the consolidated
balance sheet at January 1, 2004 prepared by the Group in
accordance with international accounting principles and to
take into account changes in the relevant regulatory
framework following the enactment of EU Regulation No.
1606 of July 19, 2002, for a fee of 204,000 euros;
– Additional audit activities concerning the execution of
certain financial transactions (“comfort letter”), for a fee of
380,000 euros;
– Additional auditing activities concerning the
implementation of a new data processing platform for the
consolidation process, for a fee of 54,000 euros;
– Auditing of the final statement of costs approved by the
joint committee founded by Fiat S.p.A. and the Turin
Polytechnic University for the establishment of three-year
and five-year university degree courses in automotive
engineering, for a fee of 5,500 euros;
Complaints Pursuant to Article 2408 of the Italian Civil Code
On December 22, 2004, February 25, 2005 and May 10, 2005,
respectively, Marco Bava, a Fiat stockholder, filed three
complaints pursuant to Article 2408 of the Italian Civil Code.
These complaints, which, in each case, were filed shortly before
meetings of the Company’s Board of Directors, were addressed
to the Chairman of the Board of Statutory Auditors of Fiat S.p.A,
with copy to the Boards of Directors of Fiat S.p.A. and Fiat Auto
S.p.A., and the External Auditors Deloitte & Touche S.p.A. In a
nutshell (the actual complaints consist of 15 typewritten pages),
the complainant criticizes the manner in which Fiat S.p.A. is
being managed, alleging that it is jeopardizing the Company’s
ability to function as a going concern and that it will lead to its
liquidation, and asks the Board of Statutory Auditors to
determine whether such practices are consistent with sound
management principles. Specifically, in the complaint dated
February 25, 2005, the complainant asks the Board of Statutory
Auditors to verify that:
a) derivative losses are not being understated;
b) property, plant and equipment, trade accounts receivables
and inventories are not being overstated;
and suggested that the Stockholders Meeting consider filing a
liability action against a former Director “for the damages
caused by his management strategy between 1998 and the date
of his resignation.”
After studying in detail the allegations put forth by the
complainant and reviewing the complaints both individually and
as a whole, we concluded that the portions of the complaints
that contain general criticisms of the Company’s management
practices do not identify improper acts, such as those
specifically referred to in Article 2408 of the Italian Civil Code.
Earlier in this report, we already discussed the soundness of the
Company’s management decisions, insofar as they apply to
those areas that fall under our jurisdiction pursuant to Article
149, Section 1, of Legislative Decree No. 58 of February 24,
1998.
With regard to paragraphs a) and b) above, the complainant
does not point to improper acts, asking instead the Board of
Statutory Auditors to determine if any such acts have occurred
by auditing certain captions of the financial statements of all of
the Group’s companies and the consolidated financial
statements. However, pursuant to Article 41, Section 3, of
Legislative Decree No. 127 of April 9, 1991, this task is the
responsibility of the External Auditors. To complete our review,
we communicated the complainant’s request to Deloitte &
Touche S.p.A. and the External Auditors informed us that:
a) “the accounting principles adopted by Fiat S.p.A. and the
Group to value derivative financial instruments, property, plant
and equipment, trade receivables, accounts receivable from
customers and unconsolidated subsidiaries and inventories at
December 31, 2004 are explained in detail in the notes to the
statutory and consolidated financial statements at the same
date, which were published at the end of March 2005
pursuant to law and in accordance with Consob
recommendations;”
b)“On April 5, 2005 we issued the requisite External Auditors’
reports on the statutory financial statements of Fiat S.p.A. and
the consolidated financial statements of the Fiat Group at
December 31, 2004, as required by Article 156 of Legislative
Decree No. 58 of February 24, 1998. The opinion provided in
our report contained no qualifications or exceptions.”