annual report 2008 Pelikan Holding AG

Risk management policy and framework
The enterprise risk management policy of Pelikan Group is to identify, measure and control risks that may
prevent the Group from achieving its business objectives. Pelikan Group seeks to apply risk management in all
parts of its business to ensure risks are minimized and opportunities are explored.
Risk management practices have been inherent in the way management has conducted business. The practice,
values and culture that have endured to the present day have always exercised profound effect on
management’s conduct. The Board of Directors has always regarded risk management as an integral part of
this conduct.
The key elements of the Group’s risk management strategies are described below:
- Clearly defined lines of accountability and delegated authority;
- Regular and comprehensive information provided to management, covering operating and financial
performance and key business indicators such as resource utilisation and cash flow performance;
- Detailed budgeting process where operating units prepare budgets for the coming year, which are approved
both at operating unit level and by the Board;
- Monthly monitoring of results against budget, with major variances being followed up and management
action taken; and
- Regular visits to operating units by members of the Board and senior management.
Internal control
The Group’s approach to internal control is based on the underlying principle of line management’s
accountability for risk and control management. The Group adopts the risk-based approach towards internal
control and that the management in the Group is responsible for implementing, operating and monitoring the
system of internal controls, which is designed to provide reasonable but not absolute assurance of achieving
business objectives.
Risk management and internal audit function
The Pelikan Group has an internal audit function that assists the Board of Directors in providing an
independent assurance on risk management and internal controls. The audit focuses on regular and systematic
review of the internal controls and management information systems. The scopes of the internal audit function
cover the audit of the adequacy of risk management, operational controls, compliance with established
procedures, guidelines and statutory requirements of the Group.
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