Group Management Report Products Safety and Health Environment Human Resources Social Commitment Consolidated Financial Statements 77
of the United Kingdom does not pose any risks that would
necessitate a revaluation of the Group’s assets to a significant
extent.
Legal violations (compliance risks) can give rise to liability
risks or tarnish our reputation, which can have a signifi-
cant effect on the Group’s earnings and asset situation. We
counter these risks within the framework of our compli-
ance management system, inter alia by regularly informing
and training our employees about relevant legal requirements.
An important basis for long-term success are competent
and committed employees. Should we no longer be able
to recruit or retain suitable specialists or managers in the
future, risks could arise for the successful implementation
of our strategy (personnel risks). To counter these risks,
ALTANA offers a sophisticated work environment and an attractive
compensation system, which is supplemented by
various pension plans and wealth creation schemes. Moreover,
we regularly offer further education and training
programs to budding junior staff members, as well as to specialized
and managerial staff.
Compliant Group Accounting
Essential accounting-related risks arise particularly when
extraordinary or non-routine issues are handled. These include
the first-time consolidation of acquired businesses or parts
of companies as well as the recording of the sale of Group
assets. Accounting of financial instruments is also subject
to risks due to the complex evaluation structure. Risks also
arise from fraudulent acts.
At ALTANA, a separate department of the Group’s holding
company coordinates and monitors Group accounting.
A core component of the control system are the guidelines,
process descriptions, and deadlines that this department
defines centrally for all companies, guaranteeing a standardized
procedure for preparing the financial statements. For
complex issues, the instruments needed for uniform accounttion
processes to a large extent and by taking comprehensive
quality-control measures. In addition, we continually conduct
analyses to assess the hazardous potential of our input
materials and products, and we conclude insurances.
Changes in political and regulatory framework conditions
can lead to restrictions on trade or foreign-exchange
transactions. Due to political unrest, it can be more difficult
or even impossible to access the Group’s assets in the
country or countries in question. On account of regulatory
adjustments, it might no longer be possible to process or
sell certain products or ingredients, or only with strong restrictions.
We continually examine the political environment in
the countries important for us and take current tendencies
into account when evaluating business relationships. We
only make direct investments in countries in which we assume
the political environment is highly stable. We actively take
part in legislative procedures and discussions focusing on
changes in the regulatory environment. As a result, we
can anticipate possible new requirements early on.
In the past fiscal year, risks resulting from changed political
and regulatory framework conditions increased due
to the steadily growing probability of higher customs duties
and more stringent trade restrictions.
A possible unregulated exit of the United Kingdom from
the European Union does not pose a significant risk to
ALTANA. Potential short-term burdens on earnings can result
from higher customs duties and increased administrative
expenses for imports and exports, whose effects, however,
are limited due to the fact that an absolute increase would
be on a low level. In addition, the availability of raw materials
can be restricted due to the elimination of REACH
certifications for products that have so far only been registered
in the United Kingdom. All of the Group’s divisions
have carried out an audit of an unregulated exit from their
respective supply flows and, if needed, introduced mea-
sures to increase stocks of raw materials or finished products
or to minimize delivery bottlenecks. An unregulated exit