Joint Report. of the Board of Management of Daimler AG. and. the Management of Daimler Group Services Berlin GmbH

Transcription

1 Joint Report of the Board of Management of Daimler AG and the Management of Daimler Group Services Berlin GmbH pursuant to Section 293a in conjunction with Section 295 (1) Sent. 2 of the German Stock Corporation Act concerning the Amendment of the Control and Profit Transfer Agreement between Page 1 of 8

2 I. Introduction Daimler AG (hereinafter also referred to as: "DAG," formerly HERKULES Neunundachtzigste Verwaltungsgesellschaft mbh) as controlling company and Daimler Group Services Berlin GmbH (formerly Erste Vermögensverwaltungsgesellschaft Zeus mbh, hereinafter also referred to as: "controlled company") as fiscal subsidiary have concluded a Control and Profit Transfer Agreement dated November 14, 2002, registered in the Commercial Register of Erste Vermögensverwaltungsgesellschaft Zeus mbh on December December 5, 2002 (hereinafter also referred to as: "CPTA"). The CPTA is to be amended in accordance with the requirements of the German Act for the Amendment and Simplification of Company Taxation and Taxation under the Travel Expenses Act of February 20, 2013, which entered into force on February 26, The Board of Management of Daimler AG and the management of Daimler Group Services Berlin GmbH jointly issue the following report on the amendment of the CPTA pursuant to the legal provisions of Section 293a in conjunction with Section 295 (1) Sentence 2 of the German Stock Corporation Act (Aktiengesetz (AktG)), applicable to Daimler Group Services Berlin GmbH as a limited liability company. II. Contracting Parties 1. Daimler AG Daimler AG domiciled in Stuttgart, registered in the Commercial Register of the District Court of Stuttgart under HRB 19360, is a publicly listed stock corporation and the parent company of the Daimler Group. The financial year of DAG is the calendar year. The company's business purpose as stated in the Articles of Incorporation is to engage directly or indirectly in the area of development, manufacture and Page 2 of 8

3 sales of products and the performance of services, in particular in the following lines of business: - Land vehicles, - Watercraft, aircraft, spacecraft and other products in the fields of road transport, aerospace and marine technology, - Engines and other propulsion systems, - Electronic equipment, devices and systems, - Communication and information technology, - Financial services, insurance brokerage, and - Management and development of real estate properties. HERKULES Neunundachtzigste Verwaltungsgesellschaft mbh was merged into Daimler Chrysler AG with effect from the Commercial Register registration of the absorbing company, dated August 15, DaimlerChrysler AG was renamed into Daimler AG on October 19, Daimler Group Services Berlin GmbH Daimler Group Services Berlin GmbH performs bookkeeping and accounting functions for the Daimler Group. It is domiciled in Berlin and registered in the Commercial Register of the District Court of Stuttgart under HRB The financial year is the calendar year. The business purpose of the controlled company is to provide services in the area of finance and accounting as well as administrative functions for the Daimler Group. Erste Vermögensverwaltungsgesellschaft Zeus mbh, Stuttgart, moved its headquarters to Berlin on February 8, 2008 and was renamed Daimler Group Services Berlin GmbH. The sole shareholder of the controlled company is DAG with a direct shareholding of 100% in the controlled company. The share capital amounts to EUR 25, and is fully paid-in. In the financial years 2010 to 2012 the controlled company earned the following amounts of net income before profit transfer in accordance with the provisions of the German Commercial Code (HGB) (in thousands of EUR): Page 3 of 8

4 2010: TEUR : TEUR : TEUR 366 The approved financial statements for the controlled company are not yet available for the 2013 financial year; however a significant decline in net income before profit transfer is expected. Regardless, a positive result is expected for 2014 as well. III. Conclusion and Effective Date of the Amendment Agreement DAG and the controlled company intend to conclude the Amendment Agreement, which is appended to this Report in draft form, in writing. The Amendment Agreement must be approved by the Meeting of the Shareholders of Daimler AG to become valid. The Board of Management and the Supervisory Board of DAG will propose to the Annual Meeting of the Shareholders of DAG, which is to be convoked on April 9, 2014, to approve the Amendment Agreement. Moreover, the Amendment Agreement requires the approval of the meeting of the shareholders of the controlled company to become valid. The Amendment Agreement will be presented to the meeting of the shareholders of the controlled company for approval in time close to the Annual Meeting of the Shareholders of DAG. According to Section 294 (2) in conjunction with Section 295 (1) Sentence 2 of the German Stock Corporation Act, the Amendment of the CPTA shall only enter into force if it is registered in the Commercial Register of the registered office of the controlled company. With the registration, the changed conditions will enter into retroactive effect from the beginning of the financial year of the controlled company, in which the registration is effected. Page 4 of 8

5 IV. Legal and Economic Considerations for the Conclusion of an Amendment Agreement The existing CPTA between DAG and the controlled company was concluded in particular for the purpose of creating and maintaining fiscal unity for purposes of income tax pursuant to Sections 14, 17 of the German Corporation Tax Act (KStG). Fiscal unity for income tax enables allocating profits and losses of the controlled company to the fiscal parent, here DAG, under commercial law and tax law, in order to consolidate them at group level with the results of other group companies, which are also members of the fiscal unity for purposes of income tax. To this end, the agreement must satisfy the requirements of Section 17 of the German Corporation Tax Act (KStG). The Law on the Amendment and Simplification of Company Taxation and Taxation under the Travel Expenses Act of February 20, February 20, 2013 changes the requirements of Section 17 Sentence 2 No. 2 of the German Corporation Tax Act (KStG). Under the new law, fiscal unity for income tax purposes based on a control and profit transfer agreement with a controlled company having the legal form of a GmbH now requires that the legal agreement contains a specific reference to the regulations of Section 302 of the German Stock Corporation Act concerning the loss assumption obligation "in its respectively valid form". Article 3 of the present version of the CPTA contains a provision for the assumption of losses, which does not adequately satisfy the new requirements. The aim of the Amendment Agreement is solely to amend the CPTA in conformity with the new provision of the law in order to retain the fiscal unity for purposes of income tax. V. Elaboration of the Provisions of the Amendment Agreement Article 1 of the Amendment Agreement gives due consideration to the new legal regulation by amending the provision for loss assumption in Article 3 of the CPTA to include the new reference to the legal requirements of Section 302 of the German Stock Corporation Act "in its respectively valid version". With this amendment, the tax advantages of the fiscal unity for income tax purposes associated with the CPTA will be retained. Page 5 of 8

6 According to Number 2 Sentence 1 of the Amendment Agreement, the remaining provisions of the CPTA will remain unaffected. Number 2 Sentence 2 half-sentence 1 further states that the amendment according to Number 1 is subject to the approval of the Meeting of the Shareholders of DAG and the Meeting of the Shareholders of the controlled company, with a reference to the provisions of Section 291 (1) and (2) in conjunction with Section 295 ( 1) Sentence 2 of the German Stock Corporation Act, which apply accordingly to fiscal subsidiaries having the legal form of a GmbH limited liability company. Moreover, according to Number 2 Sentence 2 half-sentence 2, the Amendment Agreement shall become valid with retroactive effect as of the beginning of the current financial year of the controlled company, in which the registration in the Commercial Register is effected (see above III.). The registration is to be effected in the year 2014, so that the Amendment Agreement is to come into force with retroactive effect from January 1, Contractual agreement of this retroactive effect of the CPTA amendment limited to the loss assumption provision is possible for legal and tax purposes. VI. No Compensation or Severance Entitlements DAG shall not come under any obligations to make compensation or severance payments pursuant to Sections 304, 305 of the German Stock Corporation Act under the CPTA or its amendment owing to the absence of external shareholders. VII. No Contract Review Since all shares of the controlled company are held by DAG, the Amendment Agreement is not subject to a requirement for a review by a court-appointed auditor (contract auditor) pursuant to Section 293 b ff. in conjunction with Section 295 (1) Sentence 2 of the Stock Corporation Act. Page 6 of 8

7 Stuttgart, February 18, 2014 Daimler AG The Board of Management Dr. Dieter Zetsche (Chairman) Dr. Wolfgang Bernhard Dr. Christine Hohmann-Dennhardt Wilfried Porth Hubertus Troska Bodo Uebber Prof. Dr. Thomas Weber Page 7 of 8

8 Berlin, February 18, 2014 Daimler Group Services Berlin GmbH The Management Wolfgang Kumpf (Chairman) Lars Hansen Wolfgang Musiolik Encl.: Draft Amendment Agreement to the Control and Profit Transfer Agreement between Page 8 of 8