Consolidated Annual Report 2012 and Single-Entity ... - PVA TePla AG

44 PVA TePla AG Annual Report 2012
14.6. OPPORTUNITIES AND RISKS IN CONNECTION
WITH INFORMATION TECHNOLOGY
The risk of IT equipment failures and the threat posed by
software viruses and other malware (such as so-called Trojans)
are reduced through regular and appropriate backups,
adopting suitable protective measures against external
influences (e.g., up-to-date virus protection systems and
firewalls) and maintaining suitable access control systems.
Other technical measures include the use of high-availability
systems with appropriate redundancies and centralized
storage solutions. In 2012, the Company’s storage solution
was updated and the available storage capacity was significantly
expanded. Besides the availability of the latest
hardware, the advantages of this storage solution include
guaranteed support in the event of a failure and even faster
data recovery through the use of snap-vault technology.
In addition, the virtual server farm was updated. In 2012,
further preliminary work was carried out on the central
UPS installation for all systems and a central mobile phone
administration to protect corporate data, which will be implemented
in 2013.
14.7. NATURAL HAZARDS AND
ENVIRONMENTAL RISKS
Risks from natural hazards at individual locations are evaluated
regularly (including in the annual risk inventory) as
a central component of the risk management system. We
consider natural hazard risks to be primarily risks of natural
disasters such as earthquakes and floods.
Our major locations are in temperate regions, therefore the
risk of natural disasters is limited. Two individual risks were
identified, namely the danger of an earthquake at the Corona
location and a limited flood risk at the location in Jena.
As its share of the Group’s total capacity is small, the capacity
of the Corona location can be quickly compensated by
other locations in the Group. Overall, appropriate insurance
policies were concluded for natural hazards.
Due to the Company’s business structure, with its focus
on engineering and assembly and to a very limited extent
its use of hazardous materials and other substances with
risks for safety and the environment, the extent of environment
risk posed by the activities of PVA TePla is very
limited. Nevertheless, an environmental liability and accidental
damage insurance policy with adequate coverage
was concluded for this, too.
14.8. OPPORTUNITIES AND RISKS IN CONNECTION
WITH FINANCIAL INSTRUMENTS
Financial instruments arise as part of PVA TePla’s core business
activities (e.g. trade receivables and payables). Financial
instruments are employed to finance business activities
(e.g. loans from banks) or they arise from business activities
(e.g. investment of excess current liquidity). In addition,
derivative financial instruments are utilized to eliminate
or limit risks from operating activities (e.g. exchange rate
risks) or from financing (e.g. interest rate risks). Financial
instruments are not used in isolation without connection to
actual business activities. Opportunities and risks in connection
with the respective relevant financial instrument
categories are presented below (for further information
see note 31 of the Group notes):
Trade receivables:
Liquidity and credit risks involved in financing business
operations are reduced, in the case of major orders, by
means of customer / supplier financing. A contractual installment
payment schedule is negotiated in most cases,
starting at an average of 30% minimum due upon receipt
of the order for a single system. Collateral arrangements
(e.g. letters of credit) are also frequently required to protect
against default on receivables, in combination with intensive
receivables monitoring.
In contrast, the Group itself only has to make advance
payments to a few suppliers. In addition, the Group optimizes
its external cash flow requirements through rolling
cash flow forecasts for Group companies and short-term
intra-Group loans. The Group has sufficient credit lines for
short-term financing operations, including the expansion
of business, and sufficient guarantee lines for providing
advance payment guarantees to customers. In this area,
special project lines for large orders may additionally be
negotiated with our regular banks to leave existing lines
available for normal business operations and expansion.
Due to the short-term nature of the items, there is no significant
market risk.
Other receivables:
Due to the short-term nature of the items, there is no significant
market risk.
Other financial assets:
Other financial assets include a short-term bonded loan guaranteed
by the German government’s Deposit Protection
Fund.