PDF, 3.2 MB - Pfleiderer AG

No liquidity risk exists at present. The proceeds from the sale of the Business Center Poles &
Towers, capital increases performed in Poland and the use of alternative financing instruments
have resulted in net corporate indebtedness being halved again in 2004. Apart from that, the
Company has sufficient short and long-term credit lines available. The capital market was also
successfully used to place a promissory note loan for 40 million euros in 2004 and to restructure
financial debt. Accordingly, the available volume of credit currently provides the Group with
sufficient financial resources and liquidity.
Market price risks mainly relate to currency translation, interest rates and the market value of
financial assets. Pfleiderer’s risk policy aims to limit fluctuations in results and valuations which
can arise through changes in exchange rates, interest rates or valuations. In view of the relatively
small volume of business conducted outside the euro, PLN and dollar areas together with currency
hedging, no significant exchange rate risks are expected. The danger of an increase in base interest
rates which would affect existing credit lines for the planning period, in turn affecting fixed
operating conditions, can be practically excluded.
Legal Risks
Neither Pfleiderer AG nor its affiliated companies are involved in court or arbitration procedures
which by current assessment could have a major, sustained influence on the economic and
financial position of the Group. The Company maintains its own legal department which ensures
that legally relevant matters are handled correctly throughout the Group in terms of form and
content. This particularly applies to contracts and the conduct of legal procedures, where necessary
bringing in external specialists. In order to cover warranty claims which the Company is
inevitably confronted with in the course of its business, the Pfleiderer Group has set up provisions
and, where economically meaningful, covered such risks through appropriate insurance.
IT and Other Risks
Various measures have been implemented to limit potential risk from IT such as unauthorized
access to, or misuse of, data. These measures extend to employees, organization, applications,
systems and networks. Only standard software from leading suppliers is used to support our
technical and commercial procedures. In the coming fiscal year, we shall be drawing up a Groupwide
guideline on how to deal with information, as well as how to operate information systems
safely. In future, technical security measures such as firewall or virus scanners will be subjected
in future to an annual internal IT security audit.
In order to eliminate and limit environmental risks, environmental officers are employed at
Group and Business Segment levels, and appropriate guidelines have been drawn up. According
to expert opinion, historical contamination may occur at individual production sites. Suitable
monitoring and control mechanisms have been introduced and costs accounted for in planning.
52