ANNUAL REPORT 2011 A.S. CRÉATION TAPETEN AG

with supplies to joint customers. A.S. Création
Tapeten AG has meanwhile responded in detail
to the letter of accusation and objected to all
allegations. The Federal Cartel Office has not yet
responded to the company’s arguments, which
is why the Managing Board of A.S. Création
is not in a position to make a reliable assessment
of the possible outcome of the administrative
offence proceedings. The same applies
to the two proceedings in France, where the
French anti-trust authorities have not submitted
the letter of accusation yet. There is
generally the risk of significant fines, which
would have an adverse impact on the financial
position of A.S. Création, as both the German
and the French anti-trust laws provide for a
maximum fine of 10% of Group sales revenues
per each violation of anti trust law. Also, there
is a potential risk of claims for damages
being made in the follow-up to anti-trust
proceedings.
The measures taken to build up a wallpaper
production facility in Russia have been
addressed in the chapter “Capital expenditures”.
According to these plans, A.S. Création
Tapeten AG will invest about € 14.0 million
in the project by late 2012. The project will
increase the risk potential for A.S. Création in
several respects. On the one hand, additional
production capacities will be built up, which
must be utilised. It is planned to use the wallpapers
produced in Russia to tap market seg-
ments that have not been served at all or only
to a limited extent by exports from Germany.
On the other hand, this will be the first time
in the history of A.S. Création that material
assets will be tied up in a country exposed
to much higher economic and political risks
than Germany. The Managing Board believes,
however, that the company should take these
additional risks in what is the world’s largest
wallpaper market as they are outweighed
by the resulting opportunities. Moreover, the
size of the additional risk is not considered to
jeopardise the company’s continued existence.
In the past years, the risk management issue
attracted great attention in the public. As mentioned
before, however, any corporate activity
necessarily entails certain risks. Against the
background of the large number of potential
individual risks, it is therefore important not to
neglect the overall risk. The Managing Board
of A.S. Création Tapeten AG considers the overall
risk to be relatively low. The likelihood of risks
materialising that would jeopardise the company’s
continued existence is also relatively
low. In the Managing Board’s opinion, the scope
of the risk management system, which is an
integral element of A.S. Création’s reporting
system, is sufficient.
KPMG AG Wirtschaftsprüfungsgesellschaft,
Cologne, has reviewed the risk management
system of A.S. Création Tapeten AG and con-
GROUP MANAGEMENT REPORT
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