pact on earnings that could result from increased customs
duties and higher administrative expenses for imports and
exports to be low in absolute terms. In addition, there is
a comparatively low risk that the availability of raw materials
will be restricted by the discontinuation of REACH certifications
for products that have so far only been registered in
the United Kingdom.
Legal violations (compliance risks) can give rise to
liability risks or tarnish our reputation, which can have a significant
effect on the Group’s earnings and asset situation.
We counter these risks within the framework of our compliance
management system, inter alia by regularly inform-
ing 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.
Production processes and / or supply chains can be impaired
or interrupted by the transnational effects of diseases
and any resulting measures that may be necessary to stop
the disease from spreading further. Thus, there is the risk of
economic losses. However, since these risks generally occur
only for a limited time and only in certain places, we assess
the effects on ALTANA generally to be minor due to our
decentralized structures and the fact that our sites are distributed
around the world. The further course of the Corona-
virus (SARS-CoV-2) infections can have an impact on the economic
development, especially in China, but possibly also
in other countries. Both the duration and the concrete effects
on ALTANA’s economic performance in 2020 cannot be
quantified at present.
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 accounting
are retained centrally for all Group companies. For recording
extraordinary processes and complex special issues,
we regularly obtain external reports, advice, and statements.
The financial statements of the individual Group companies
are prepared decentrally by the local accounting
departments. Hence the individual companies are responsible
for preparing the financial statements, in keeping with
Group guidelines and country-specific statutory accounting
The work steps needed to prepare the financial statements
are defined such that important process controls are
integrated. These include guidelines pertaining to the separation
of functions and allocation of responsibilities, to control
mechanisms, and to IT system access regulations. The
respective management explicitly confirms to the Group’s
management that the annual financial statements are cor-
rect and complete. In addition, important financial statements
are audited by the company or Group auditors in charge.
78 Expected Developments