Mercedes 2010 Annual Report Download - page 155

Corporate Governance | Report of the Audit Committee | 151
Internal Auditing department, with the effectiveness of the exist-
ing systems of internal control and risk management, of internal
auditing and of compliance management, also going beyond the
area of accounting. For this purpose, the Audit Committee dealt
with the activity reports of the Internal Auditing and Corporate
Compliance departments, as well as with the systematic aspects
of risk management and risk reporting and with the functionality
of the systems in use. For many years, a key element of the
Group’s internal control system has been internal control over
financial reporting in accordance with Section 404 of the Sar-
banes-Oxley Act. In this context, the Audit Committee held a dis-
cussion with the Board of Management about the continuation
under other conditions of external audits according to Section 404
of the Sarbanes-Oxley Act, which are no longer mandatory due
to deregistration with the US SEC and delisting from the New York
Stock Exchange. Concerning this matter, in the meeting of the
Audit Committee in July, Daimler presented a risk-oriented approach
for reviewing the accounting-related internal control systems
that had previously been discussed with the external auditors,
which provides for the external auditors to issue a statement
of opinion containing the results of their (future) audit of this
issue. The Committee also received the annual activity report of
the Group’s Data Protection Officer and received information
on Treasury risk management and investment strategy, on the
extent of the Group’s insurance cover and on the status and
management of the pension funds. Other matters discussed at
the additional meeting were the method of calculating key
financial indicators at Daimler, the ongoing development of account-
ing regulations resulting from the German Accounting Law
Modernization Act (BilMoG), amendments to the International
Financial Reporting Standards, and fundamental legal ques tions
relating to the activities of members of the Supervisory Board
and the Audit Committee.
In a meeting in September 2010, the Audit Committee dealt
with the results and recommendations of the first report of the
Compliance Monitor. The stage of implementation and the
requirements for the further development of internal guidelines
for securing compliance were discussed intensively.
In two meetings attended by the external auditors at the end of
February 2011, the Audit Committee reviewed the annual com-
pany financial statements for 2010 and the annual consolidated
financial statements for 2010 together with the combined
management report for Daimler AG and the Daimler Group and the
proposal made by the Board of Management on the appropria-
tion of profits. In preparation, the members of the Audit Commit-
tee and the other members of the Supervisory Board were pro-
vided with comprehensive documentation, some of which was in
draft form, 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, and drafts of the reports of the Supervisory Board and
of the Audit Committee. It was no longer necessary to prepare a
report according to Form 20-F due to the delisting and deregis-
tration in the United States. The audit reports and significant
accounting matters were discussed with the external auditors.
The Audit Committee of Daimler AG also dealt with the monitoring
of the accounting process, the effectiveness of the system of
internal control, of the risk management system and of the internal
auditing system, and questions of compliance including anti-
trust issues. This includes the further development and required
adjustments within the Group-wide compliance structures and
activities that were decided upon by the Board of Management.
Following intensive reviews and discussion of the documentation,
the Audit Committee recommended that the Supervisory Board
should approve the annual financial statements and adopt the
Board of Management’s proposal on the appropriation of profits.
The Audit Committee also approved the report of the Audit
Committee in its current version. Furthermore, in that meeting,
the Audit Committee also dealt with the draft agenda of the
2011 Annual Shareholders’ Meeting and the annual audit plan
of the Internal Auditing department.
As in previous years, the Audit Committee once again conducted
a self-evaluation of its own activities in 2010. This did not result
in any need for action with regard to the Committee’s tasks or with
regard to the content or procedure of its meetings.
Stuttgart, February 2011
The Audit Committee
Dr. h. c. Bernhard Walter
Chairman
Bernhard Walter, Chairman of the Audit Committee.