Opportunity and risk management

Group-wide opportunity and risk management

All business involves opportunities and risks. Our Group-wide opportunity and risk management system gives us a head start in dealing with potential changes and events. The process developed to serve this system is built around uniform methods to identify and analyse key trends and to communicate them to management. Clear presentation of opportunities, risks and possible countermeasures helps sustain the company’s ongoing success.

Opportunities and risks are identified and reviewed across the Group every quarter as part of controlling processes. Internal or external factors can cause positive or negative deviations from target. Major impacts of unforeseen events may trigger an ad hoc announcement.

Opportunity and risk analysis involves investigating major influencing factors as well as compiling action plans to avoid risks and make use of opportunities. Early warning indicators are determined to ensure timely detection of critical situations. The potential impact of a range of factors on Group earnings is evaluated using scenarios and each potential risk is assigned to one or more managers who take appropriate action as necessary.

The Group uses a software application to collate and communicate individual risks. This multi-level reporting system ensures that managers are involved across various layers of the hierarchy, and the process is closely dovetailed with controlling to ensure regular exchange between controlling and management. Central risk control is organisationally part of Corporate Controlling and keeps the Board of Management abreast of key opportunities and risks in each division.

The risks which we presently consider to have a significant potential negative impact on our net assets, financial position and results of operations are reported in the Annual Report 2008.