Page 63

E_ALT_GB15_160317_online

Group Management Report Corporate Governance Environment, Safety, and Corporate Social Responsibility Consolidated Financial Statements 59 Our strategic corporate planning is closely tied to our medi- um- to long-term financial planning. The extent of the fulfillment of our targets is examined in monthly reports on the company’s business performance and in our short- term financial planning. Deviations can be recognized and countermeasures introduced if necessary. Our internal control system, which is oriented to the standards of the internationally recognized COSO model, de- fines organizational measures for preventing damage from being done to the company. In connection with our estab- lished compliance organization, it aims to prevent possible violations of guidelines and laws on the part of employees. At ALTANA, risk management in the strict sense is viewed as the systematic compilation, evaluation, documen- tation, and communication of relevant risks. Thus it is an essential component of the company’s system for early risk recognition in accordance with section 91 (2) of the Ger- man Stock Corporation Act. This system was voluntarily examined by the auditor and was deemed capable of recogniz- ing risks that can endanger the existence of the company at an early stage. Risks that are identified are evaluated in a uniform way. The risk is assessed based on the probability of its occur- ring and the potential damages. Individual risks can be rated based on this assessment. Risks rated as very high are risks which could cost the company € 25 million or more in the next 12 months. Individual risks that could cost the company between € 12 million and € 25 million are rated as high risks; risks that would cost between € 5 million and € 12 million are categorized as medium risks, and risks that would cost less than € 5 million are deemed low risks. The prioritization resulting from the assessment determines focal points for the development and initiation of counter- measures and strategies to prevent or reduce the potential effects of risks. The individual risks and risk fields described in the fol- lowing pages could have a material adverse effect on the velopment of the absolute values of net working capital should be analogous to the general business development, though we are striving to improve the ratios. Based on the anticipated business performance, we will achieve significant liquidity surpluses from operating ac- tivities, which should be at a level similar to that of 2015. These surpluses will be used to finance investments, for bolt- on acquisitions, and to pay dividends. The promissory note loans will be repaid from 2016 to 2020. We foresee a further slight improvement of the value management key figures in 2016 due to a disproportion- ate increase in operating earnings compared to operating capital. Risks Management and control of the ALTANA Group are geared to the strategy that has been defined and the target levels derived from it. Due to changes in the economic environment or internal factors of influence, it might not be possible to implement the strategy successfully or to achieve target levels in the planned time frame or to the planned extent. To be optimally prepared for such situations, we systematically iden- tify, evaluate, and consider risks within the framework of decision-making processes. To anchor our risk policy at all decision-making levels, we established a Group-wide risk management system that brings together various information, communications, and monitoring systems. Core elements of our risk manage- ment include strategic corporate planning, internal reporting, our internal control system, compliance organization, and risk management in the strict sense, i. e. the identification, documentation, and evaluation of risks including the deri- vation of appropriate precautionary measures and counter- measures.


E_ALT_GB15_160317_online
To see the actual publication please follow the link above