PDF, 3.2 MB - Pfleiderer AG

Risk Report
Pfleiderer AG’s business policy is directed at continually strengthening its net assets, financial
position and results of operations. As an internationally operating group, the Company is confronted
with a wide range of potential risk situations. Early identification of risk, monitoring and
keeping risk under control while making every use of business opportunities – these are the
main challenges that confront the Board of Management and all employees alike. Accordingly,
the Board of Management and the Supervisory Board ensure that they are kept regularly informed
about risks which could have a serious effect on the development of the Company’s two
Business Segments, Engineered Wood and Infrastructure Technology, or on the Group as a whole.
The Audit Committee of the Supervisory Board was presented with the Risk Management Report
2004 in its meeting on March 17, 2004.
The Company applies a risk management system to identify risk at an early stage, and to assess
and deal appropriately with any major risk or risk which could threaten the Company’s existence.
The risk management system complies with legal requirements and is an integral part of the
Company’s operating and reporting process. The Risk Management System is defined in the Risk
Management Manual which defines
risk identification and assessment,
how to deal with current risk,
new or additional measures to deal with risk and
how risk should be followed up and what measures be taken.
Risk management for the Group is controlled and continually developed by a corporate service
unit. Pfleiderer places particular value on the regular exchange of information with other companies
to ensure that new approaches and ideas flow into the Group’s risk management system.
Apart from the risk management central services unit, individual operating Business Segments
and Units and other central services functions each have nominated a risk manager responsible
for ensuring that the system is upheld within the relevant business or service unit. Apart from
that, senior managers in the Pfleiderer Group are required to ensure that all employees are sensitized
to the need to identify and avoid risks. As well as an instant reporting system which
captures sudden changes in the risk situation, risk officers carry out monthly checks on existing
risk, as well as seeking to identify any new potential risk. The results are compiled in a separate
quarterly report which is presented to the Board of Management and the Chairmen of the Supervisory
Board and the Audit Committee. The current risk management system is also examined
to establish whether it is suitable and effective. This examination is performed by the internal
audit department, as well as by the external auditors.
As in previous years, no risks face the Pfleiderer Group which could be considered either a threat
to its existence, or which could have a major effect on its assets, finances or earnings positions.
The main risks facing Pfleiderer’s activities are given below.
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MANAGEMENT REPORT RISK REPORT