Mercedes 2010 Annual Report Download - page 18

14
Report of the Supervisory Board
Dear Shareholders, the Supervisory Board dealt in detail with the operational and strategic
development of the Daimler Group in eight meetings during the 2010 financial year.
The Supervisory Board had a thoroughly positive assessment of
that pleasing development, while considering that it was not yet
possible to regard the trend as dependably stable. Risk factors or
uncertainty factors resulted for example from the economic
situation in the United States, where experts were of the opinion
that a renewed economic slump during the year 2010 could not be
excluded. In China, another key market for Daimler, it was
necessary to consider the possibility of a growth slowdown. In the
euro zone, high levels of government debt came to be seen as
a significantly negative factor at the beginning of the year,
mainly triggered by the situation in Greece. Against this backdrop,
the Supervisory Board supported the risk-aware approach of
the Board of Management as the year progressed.
Other issues about which the Board of Management continually
informed the Supervisory Board, in addition to providing the
usual key figures, included:
– the Group’s profitability and liquidity,
– the internal control and risk management system,
– the cost of risk in the financial services business,
– vehicles’ residual values,
– the development of raw-material prices, and
– the situation of suppliers.
Detailed discussions were held in the year 2010 also about safe-
guarding the Group’s long-term competitiveness, fundamental
questions of corporate planning including financial, investment
and human resources planning, developments in the companies of
the Group, and the implementation of measures already initiated
to secure pioneering and sustainable mobility for the future.
The Supervisory Board occupied itself with those topics in close
consultation with the Board of Management, and particularly
intensively in a two-day strategy workshop.
The Supervisory Board had to make decisions on numerous special
topics in 2010, such as cooperation projects, capital measures,
investments, the conclusion of agreements, Board of Management
matters, details of the Articles of Incorporation etc. The Board
of Management also informed the Supervisory Board about a large
number of transactions not requiring the Supervisory
Board’s
consent and the two boards discussed those matters together,
for example the development of sales structures,
appoint-
ments to the top management level and the expansion and
restructuring of the Internal Auditing and Compliance depart
ments.
The Supervisory Board discussed the information and
evalua-
tions that were important for its decisions or recommen dations
together with the Board of Management. The Supervisory Board
meetings were regularly prepared in separate discussions by
the members representing the employees and the members
representing the shareholders.
While the beginning of 2010 was still affected by the deep recession
of the prior year, as the year progressed, there was a significant
and continuous upward trend for all key figures of unit sales, reve-
nue and earnings. This positive development was due partially
to the market recovery of some major sales markets, but above
all to the market success of Daimler’s products and services.
Another factor with a sustained positive impact on earnings was
the package of measures taken to enhance efficiency and reduce
costs, which had been initiated by the Board of Management and
monitored by the Supervisory Board since the beginning of the
financial and economic crisis. Figures for the free cash flow and
equity ratio of the industrial business demonstrate the Group’s
sound financial position.