A hundred-year balance Annual Report 2010 - Uzin Utz AG

dit insurance. The optimisation of freely available funds
is ensured by group-wide, strict claims management.
» All major liabilities in favour of banks are basically financed
in the long term with fixed interest rates or secured
against interest rate change risks by an interest
rate swap.
» The main finance instruments used by the Uzin Utz
Group include bank loans and current account overdrafts,
financing-leasing agreements and liabilities from deliveries
and services. The main purpose of these finance
instruments is the financing of business activities. The
Group has various financial assets, such as receivables
from deliveries and services, funds and short-term deposits,
which result directly from its business activities.
The Uzin Utz Group also has a very low level of derivative
finance instruments in the form of forward exchange
transactions and an interest rate swap. The purpose of
these finance instruments is to provide security against
interest rate change risks resulting from the business activities
of the Uzin Utz Group and its financing sources.
Investment risks
Risks resulting from major investments are assessed by
standardised investment calculations, and must be approved
by the Board of Uzin Utz AG. External consultants
are also engaged for this purpose if necessary. Possible
acquisitions are analysed with external support, assessed
by the Board and approved by the Supervisory Board.
Risks endangering the company’s existence
None of the above risks currently endanger the company’s
existence. There are at the moment no other identifiable
risks that might endanger the company’s existence.
Description of the risk management system
The Group operates a system for the identification and
control of present and future business and financial risks.
This risk management system was implemented many
years ago in the group. No major changes have been
made to the system. This is nevertheless a living system,
which in the course of continual improvement is subject
to a permanent optimisation process.
» The elements of the risk management system are
−−
the risk management,
−−
the risk controlling and
−−
the risk reporting.
» These are all based on a number of individual evaluations,
analyses, reports and project groups, which analyse
individual processes and circumstances in detail according
to the situation. The responsibility for this task
lies with the responsible departmental or divisional manager
of the relevant shareholding company. These report
direct to the relevant director or board of the company,
who in turn consult on all important matters with
the Chief Financial Officer of Uzin Utz AG, with whom
the overall responsibility lies. The “Central Controlling
(CO)” Department of the parent company coordinates
the risk management elements across the Group. Documents
distributed to the Chief Financial Officer of Uzin
Utz AG are submitted by him if necessary to the complete
Board and the Supervisory Board of Uzin Utz AG
and other circles. The complete risk management system
is designed to identify and counteract risks endangering
the existence of the company at an early stage,
and to ensure the achievement of the business objectives.
The principles, guidelines, processes and responsibilities
of the internal control and risk management system
are defined and established. The risk management
system essentially covers the risk groups described above.
In addition to individual risk management measures,
we act in awareness of risks on the basis of safety-orientated,
professional company management, with appropriate
insurance cover and guidelines and instructions
applicable across the company.
» The highly controlling-orientated and proven cost management
introduced in the past, as an integral component
of controlling, whose importance is even greater
under the existing conditions, will continue to support
the philosophy of revenue-orientated development.
» The statements in the sections “Financial situation”
and “Financial risks” of this report apply for the area of
financial instruments. The result and liquidity risks of
the financial assets are also identified in the form of an
early detection system. The main elements of this system
consist of detailed monthly reporting on al major
balance sheet and P&L positions, a quarterly risk management
report, regular audit discussions on site with
the shareholding companies, an Organisation Manual
which is valid throughout the Group and mandatory, direct
communications channels for the directors of the
shareholding companies with the Board of Uzin Utz AG
on all important matters.
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