Merck 2010 Annual Report Download - page 123

In order to ensure a high level of protection of insider information, in 2011 the Executive Board
will issue an internal insider guideline applicable throughout the Group worldwide. This
guideline will inform employees about their responsibilities under insider trading laws and give
clear instructions for compliant behavior. In addition, the function of the insider committee will
be described in detail. Moreover, our Code of Conduct, which is binding on all employees, also
contains an explicit, detailed reference to the ban on using insider information. Within the scope
of obligatory training courses, all employees are instructed on the subject of insider trading.
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Merck KGaA prepares its consolidated financial statements and Group management report in
accordance with International Financial Reporting Standards (IFRS), as applicable in the EU, as
well as the supplementary rules applicable under section 315a (1) of the German Commercial
Code (HGB) and as stipulated by our Articles of Association.
The Group financial statements and the Group management report are prepared by the Executive
Board and an auditor, taking into account the generally accepted standards for the audit of
financial statements promulgated by the Institut der Wirtschaftsprüfer (IDW).
The Supervisory Board commissioned KPMG AG Wirtschaftsprüfungsgesellschaft, Berlin, to
audit the Group financial statements and the Group management report for 2010. Neither
party identified any conflicts of interest. Moreover, the Supervisory Board agreed with KPMG
AG that the auditor shall inform the Supervisory Board without delay of any grounds for
bias or disqualification occurring during the audit if these cannot be immediately rectified.
Additionally, the auditor shall immediately report to the Supervisory Board any findings and
issues which emerge during the audit that have a direct bearing upon the tasks of the Super-
visory Board. The auditor shall inform the Supervisory Board or note in the audit report if any
circumstances are determined during the audit that would render inaccurate the Statement of
Compliance made by the Executive Board and the Supervisory Board. It has also been agreed
with the auditor that in order to assess whether the Executive Board has fulfilled its obligations
in accordance with section 91 (2) AktG, the audit will also cover the company’s early warning
risk identification system. Moreover, the auditor is required to examine and evaluate the
accounting-relevant internal control system insofar as this is necessary and appropriate for
assessing the accuracy of financial reporting.
Company 119Consolidated Financial Statements More informationCorporate GovernanceManagement Report
Statement on corporate governance