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

46 PVA TePla AG Annual Report 2012
14.9. OPPORTUNITIES AND RISKS FROM TAX ISSUES
Because of the volume of major orders from abroad, the
complexity of the related tax issues has increased. In particular,
these issues include intercompany prices for transactions
between companies in the PVA TePla Group, sales taxes
– especially on services – and tax rules for employees
sent abroad. We address these issues in close cooperation
with our tax advisors and have not identified any material
risks in this area. A tax audit is currently underway for all
German locations for the years 2007 to 2011. PVA TePla will
be audited at the end due to its business volume. The first
findings from the tax auditors are available for the subsidiaries
Löt- und Werkstofftechnik GmbH and PVA Control
GmbH. Overall, no relevant risks are expected from these
audits.
There are, however, increasing expenses with respect to
these consultations, the internal administration and the
implementation of regulations and the associated registrations.
14.10. RISKS JEOPARDIZING THE
EXISTENCE OF THE COMPANY
There are no identifiable risks potentially jeopardizing the
continued existence of the Company and the Group as a
going concern.
15. RISk MANAGEMENT
The risk policy is embedded in the corporate strategy and
is designed to secure the continuation of the Company as
a going concern. The resulting risk strategy assesses the
risk and opportunities of business activities. In the core activities
of the Company / the Group, we make a conscious
decision to enter into limited and containable risks, if they
make appropriate compensation likely or are inevitable. In
some cases, we allocate the risks to other parties. This
mainly includes concluding suitable insurance policies. This
process is conducted in close cooperation with an experienced
and specialized insurance broker. It is regularly reviewed
for efficiency and optimized where necessary. Other
risks, which are not related to core and support processes,
are avoided as far as possible. A “Risk Manual” has been
made available to divisions and employees, which includes
instructions on processes and a catalog of measures to
safeguard appropriate and sustainable risk management.
The manual details the concrete processes involved in risk
management. It aims at the completeness of all risk-related
activities and measures, i.e. the identification, assessment,
controlling, reporting and monitoring of risks. Based
on defined risk categories, risks at divisions, operating
units as well as central units are identified and assessed
according to their likelihood and potential damage.
Due to the organizational structure of the Company, risk
management is carried out locally in the divisions and business
processes. The divisions’ managers are therefore responsible
for central processes of the risk management
system. The main objective of the risk management system
is the early recognition of risks, in order to regularly
provide the Executive Board with up to date information
on the current risk situation within PVA TePla. The Management
determines the limits for the reporting structure. The
duties of those in charge include developing and where necessary
installing measures to prevent, mitigate and hedge
against risks. The main risks as well as the implemented
measures are regularly monitored. The risk reports are regularly
compiled and analyzed by central risk management
and checked and discussed by the Executive Board and
Supervisory Board. In addition to regular reporting, a reporting
system has been installed within the Group to immediately
report the occurrence of unexpected risks. The
system also includes an annual risk inventory, in which all
of the risks relevant to the Group are reported and their
relevance and possible effects assessed. The risk management
system enables the Management Board to identify
material risks at an early stage and to implement countermeasures.
The key features of the risk management system
described above are applied throughout the Group.
As far as processes in financial disclosure are concerned,
this means that identified risks are reviewed and assessed
for their potential impact on disclosures in the respective
financial reports. The idea is to provide important information
at an early stage about potential changes in the fair
value of assets and liabilities, possible impairments and
important information to assess the necessity of forming
and reversing provisions.