Financial Statements and Management Report - Thyssenkrupp

1.6 Management report Expected developments and associated opportunities and risks
Risk management system established throughout the Group
Alongside the risk principles, the Group Policy Statement on Risk Management includes other binding
standards for the risk management process. In various reporting elements we communicate information on
operating and strategic risks in a standardized process which permits the identification, assessment, control
and monitoring of risks. Because it is integrated in the Group’s corporate controlling department, risk
management is also closely interlinked with planning and other reporting processes. Risk maps for all Group
entities are prepared with the help of a web-based reporting tool in which Group companies report on the
status of their risk situation using tiered threshold values, identify risk management measures and update
the early warning indicators for assessing risks.
Each business area updates its assessment of the opportunities and risks in the current fiscal year on a
monthly basis and provides information on any changes to material risks in the risk map. The material risks
– clearly defined at Group level on the basis of probability of occurrence and loss amounts - are discussed in
the Risk Committee and then communicated in a systematic and transparent report to the Executive Board
and the Supervisory Board Audit Committee.
This standardized and transparent risk management system was introduced by the Executive Board of
ThyssenKrupp AG for the entire Group and has proven itself to be efficient. In addition, ad hoc risks and
losses incurred are communicated directly to the risk management officers outside the normal reporting
channels.
To ensure the efficient monitoring of the risk management system, Corporate Center Internal Auditing carries
out regular audits worldwide. Their findings help us further improve the way risks are managed throughout
the Group. In addition we continuously optimize the tools and methods for registering and managing risks so
as to enhance the quality of the information generated and further strengthen the interlinking of internal
processes.
Key features of the internal control and risk management system
with regard to the Group accounting process
Our internal control system, defined as the entire body of coordinated principles, processes and measures
applied in the Company to ensure business and control objectives are achieved, is continuously optimized to
guarantee the security and efficiency of business management, the reliability of financial reporting, and
compliance with laws and policies.
For the accounting process at ThyssenKrupp this means that implemented controls adequately ensure that
despite any risks the consolidated financial statements comply with the requirements. Various integrated
and independent supervision measures are in place to help achieve this aim.
Our consolidated financial statements are prepared on the basis of a standard accounting policy which is
regularly updated and made available to all relevant employees via an internal internet platform. A specially
developed consolidation tool based on standard software is used, which ensures a uniform procedure and
minimizes the risk of false statements in the Group’s financial accounting and external reporting.
Financial reporting is organized in clearly defined sub-processes. Clear-cut responsibilities in line with the
principle of segregating functions and the dual-control principle reduce the risk of fraudulent conduct.
As the department responsible for the preparation of the consolidated financial statements, Corporate
Center Accounting and Financial Reporting issues the decentralized units with binding standards for content
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