Mercedes 2010 Annual Report Download - page 154

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Report of the Audit Committee
Dear Shareholders,
the internal control and risk management system. As a result, the
Audit Committee recommended that the Supervisory Board
should approve the annual financial statements and once again
affirmed its recommendation to the Supervisory Board to adopt
the recommendation of the Board of Management that no dividend
proposal should be made to the shareholders at the Annual Share-
holders’ Meeting. Also in this meeting, the Audit Committee dealt
with the draft agenda of the 2010 Annual Shareholders’ Meeting,
with the annual audit plan of the Internal Auditing department for
the year 2010, and accepted an activity report from the Corpo-
rate Compliance department. Furthermore, the Audit Committee
dealt with the fees paid to the external auditors in the year 2009,
discussed the fees agreed for the year 2010, and approved a list
of permissible non-audit services to be provided by the external
auditors in the 2010 financial year.
The Audit Committee regularly examined the qualifications and
independence of the external auditors and the implementation
of the principles decided upon for the approval of non-audit ser-
vices provided by the external auditors. After receiving the
approval of the Annual Shareholders’ Meeting, the Audit Commit-
tee engaged KPMG AG, Wirtschaftsprüfungsgesellschaft, Berlin,
to conduct the 2010 annual audit, negotiated the audit fee of the
external auditors, determined the important audit issues for the
year 2010, and informed the Supervisory Board accordingly.
In the meetings during the year 2010 relating to the quarterly
results, the Audit Committee dealt with the interim financial
reports including the related risk reports. In those meetings, it
accepted reports on the provision of non-audit services by the
external auditors and activity reports from the Corporate Compli-
ance department, the Internal Auditing department and the
independent Compliance Monitor. In this context, the Chairman
of the Audit Committee is also involved in setting and evaluating
the annual compliance targets for the Board of Management.
The Audit Committee also dealt with notifications that were
received confidentially, and if desired anonymously, through the
Group’s own whistleblower system and processed internally by
the Business Practices Office.
Another key area of the Audit Committee’s work in 2010 was its
own duties of control, which had been made more specific by the
German Accounting Law Modernization Act (BilMoG). In this
context, the Committee held an additional meeting in which it dealt,
supported by statements from the external auditors and the
Seven meetings of the Audit Committee were held in 2010.
These meetings were regularly attended by, in addition to the
members of the Audit Committee, the Chairman of the Super-
visory Board, the Chairman of the Board of Management, the
member of the Board of Management responsible for Finance and
Controlling (CFO), and the external auditors. The heads of
specialist departments were also present for the appropriate items
of the agenda. In addition, the Chairman of the Audit Committee
held regular individual discussions, for example with the external
auditors, the CFO, the heads of Corporate Accounting, Internal
Auditing, Corporate Compliance and Legal, and the Group’s inde-
pendent Compliance Monitor. The Chairman of the Audit Com-
mittee first informed the Audit Committee about the results of those
bilateral discussions. The Chairman of the Audit Committee then
reported to the Supervisory Board about the activities of the Com-
mittee and about its meetings and discussions in the following
Supervisory Board meetings.
In a meeting in mid-February 2010 attended by the external audi-
tors, the Audit Committee dealt with the preliminary figures of
the annual company and consolidated financial statements, pos-
sible alternatives for a dividend proposal, and the recommenda-
tion of the Board of Management not to pay a dividend. In view of
the unusual crisis conditions in the year 2009 and the Group’s
net loss for that year, the Audit Committee recommended to the
Supervisory Board that the recommendation of the Board of
Management should be followed and that no dividend proposal
should be made to the shareholders at the Annual Shareholders’
Meeting. The preliminary figures were published at the Annual
Press Conference on February 18, 2010.
In a meeting attended by the external auditors at the beginning
of March 2010, the Audit Committee dealt with the annual
company financial statements, the annual consolidated financial
statements and the combined management report for Daimler
AG and the Daimler Group for the year 2009, each of which had
been issued with an unqualified audit opinion by the external
auditors. In preparation, the members of the Audit Committee and
the other members of the Supervisory Board were provided with
comprehensive documentation, including the Annual Report, the
audit reports of KPMG on the annual financial statements of
Daimler AG and the annual consolidated financial statements
according to IFRS, the combined management report for Daimler AG
and the Daimler Group, drafts of the reports of the Supervisory
Board and of the Audit Committee, and the annual report according
to Form 20-F. Reports by the Internal Auditing department and
the external auditors revealed no indications of any deficiencies of