Group Management Report Products Safety and Health Environment Human Resources Social Commitment Consolidated Financial Statements 73
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 twelve 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
countermeasures to prevent or reduce the potential effects
of risks.
The individual risks and risk fields described in the
following pages could have a material adverse effect on the
Group’s earnings, financial, and asset situation in the years
to come and thus give rise to a negative deviation from the
forecast development. For individual risks categorized as
“medium,” “high,” and “very high” we address changes in
our appraisal compared to the previous year.
Economic and Industry Risks
The development of the general economic conditions worldwide
has a decisive impact on our business performance.
The performances of the economies of the U.S., China, and
Germany – industrial nations important for ALTANA – have
a particularly strong impact on the direction and intensity of
demand for our products.
A global economic crisis leading to an economic collapse
would bring about significant sales decreases with corresponding
influences on our earnings. Recessions limited to
certain regions in sales markets important for us could also
significantly impair our business performance. With the global
orientation of our sales activities, we try to shape our dependence
on regional or national markets in such a way that
the effects of geographically confined economic crises on
the Group are limited.
our internal control system, compliance organization, and
risk management in the strict sense, i. e. the identification,
documentation, and evaluation of risks including the derivation
of appropriate precautionary measures and countermeasures.
Our strategic corporate planning is closely tied to our
medium- 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. Apart from an analysis of the current
business situation, our expectations for the current fiscal year
are discussed extensively at the level of the divisions three
times a year. As a result, deviations from planned developments
can be recognized and countermeasures introduced
if necessary.
Our internal control system, which is oriented to
the standards of the internationally recognized COSO model,
defines organizational measures for preventing damage
from being done to the company, among other things. In
connection with our established 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, documentation,
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
German Stock Corporation Act. This system was voluntarily
examined by the auditor.
The audit deemed the system capable of recognizing
risks that can endanger the existence of the company at an
early stage.
Risks that are identified are evaluated in a uniform way.
So-called evaluated risks are assessed based on the probability
of its occurring and the potential damages. Individual