Rules of procedure Audit Commitee


 § 1 


Basis of the activities of the Audit Committee

 

The Audit Committee shall undertake the responsibilities it has been assigned pursuant to section 7 (2) of the Supervisory Board Rules of Procedure in accordance with the Statutes, Supervisory Board Rules of Procedure and these Rules of Procedure.

 

 

§ 2


Term of office and composition; chairman of the committee

 

The composition of the Audit Committee and the term of office of the members of the committee shall be based on the rules in the Supervisory Board Rules of Procedure.

 

The chairman of the Audit Committee shall be determined by the Supervisory Board.

 

An independent member of the Audit Committee which can be also its chairman must have expertise in the areas of accounting or auditing. The chairman of the Audit Committee shall have expert knowledge and experience in the application of accounting principles and internal control systems. He must not be a former member of the Management Board of DEUTZ AG.

 

Statements of intent for the Audit Committee shall be submitted by the chairman of the committee.

 

 

§ 3


Convening of meetings

 

Meetings of the Audit Committee shall be convened by the chairman in writing with at least 14 days' notice. An agenda must also be included with the invitation to the meeting. In urgent cases, the notice period can be shortened and a meeting convened by telephone or other means of telecommunication.

 

At least two meetings of the Audit Committee shall be held in each financial year. The meetings of the Audit Committee may also be held in the form of telephone conference calls or video conferences.

 

 

§ 4


Decisions

 

Decisions of the Audit Committee shall be taken in meetings. Decisions taken in writing, by telephone or by other means of telecommunication shall be permitted if so determined by the chairman of the Audit Committee on a case-by-case basis.

 

The decisions of the Audit Committee must be minuted or entered in a record. The chairman of the Audit Committee must sign the minutes or record. He must then make a copy available to each member of the Audit Committee. This shall also apply to decisions taken in writing, by telephone or by other means of telecommunication.

 

For the purposes of preparing the minutes or record, the chairman shall nominate a minute-taker who must not be a member of the Audit Committee.

 

 

§ 5


Quorum

 

The Audit Committee shall be quorate if at least three members of the committee participate in a decision.

 

 

§ 6


Representation

 

Absent members of the Audit Committee may participate in a decision by submitting a written vote via another member of the Audit Committee or by casting a vote by telephone or other means of telecommunication.

 

 

§ 7


Responsibilities of the Audit Committee

 

Pursuant to section 7 (2) of the Supervisory Board Rules of Procedure, the responsibilities of the Audit Committee shall include:

 

(1) Monitoring of the accounting process, of external book-keeping and financial reporting and the preparation of relevant draft resolutions for the Supervisory Board;

 

(2) Analysis and monitoring of internal financial monitoring and control systems and the risk management system;
 

(3)  Analysis of the efficiency and monitoring of the internal auditing system; subject to the consent of the chairman of the Management Board, the head of internal auditing may be invited to participate in deliberations in this regard;

 

(4) Review of compliance with the relevant rules of the German Corporate Governance Code;

 

(5) Review of the work of the independent auditors, in particular their impartiality; as part of these monitoring activities, the Audit Committee shall

 

  • focus on financial accounting and risk management issues, specifically by addressing questions to the auditors of the DEUTZ AG single-entity financial statements and consolidated financial statements;

 

  • propose to the Supervisory Board a firm of auditors to be elected by the Annual General Meeting;

 

  • prepare the audit engagement for the independent auditors, including specification of the key areas of audit and the fees to be paid;

 

  • receive reports from the independent auditors regarding the audit schedule and process, cooperation between the independent auditors, the internal audit department and other departments involved in risk management, and regarding specific findings of the audit;

 

  • demand and control informations on additional services provided by the auditor;

 

  • prepare the Supervisory Board's review of the annual financial statements, management report and audit report on the single-entity annual financial statements and consolidated financial statements, and make a recommendation in this regard;

 

  • if required, in place of or on behalf of the Supervisory Board, itself initiate audits pursuant to section 111 (2) German Stock Corporation Act (AktG);

 

(6) Handling of compliance issues.

 

The Audit Committee shall also be responsible for carrying out any other duties that the Supervisory Board may from time to time assign to this committee.

 

The chairman of the Audit Committee shall deliver a report on the work of the Audit Committee at all meetings of the full Supervisory Board.

 

 

§ 8


Other

 

The rules specified under sections 10 and 11 of the Supervisory Board Rules of Procedure shall also apply mutatis mutandis to the procedures of the Audit Committee unless otherwise specified by the Supervisory Board when the committee was established.

 

 

§ 9


Effective date

 

These Rules of Procedure shall come into effect on 10 December 2009.

 

 

Approved by the Supervisory Board at its meeting held on 10 December 2009.