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A Group Management Report and Management Report on Salzgitter AG IV. Risk Report 166 167
Qualified top-down rules to complement decentralized activities
Our subsidiaries and associated companies apply the risk management system autonomously. It is the
task of the management holding company to specify guidelines that constitute the basis on which
adequate and uniform consideration and communication of risks are ensured within the Group. We
convey our understanding of risk management through a risk manual and risk guidelines which are
distributed to the companies and include principles through which we harmonize groupwide risk
inventories and ensure the informative value for our Group. As before, we will meet the challenge of
developing our risk management system on an ongoing basis in line with requirements in the future as
well.
Methodology and reports
We include risks as an integral part of our intra-year forecasting, medium-term planning and strategy
discussions. To manage these risks, processes, regulations and tools are established. The aim is to avoid
potential risks, to control them or to take the relevant preventive measures,
while remaining appropriately aware of opportunities that might present
themselves.
Risk
evaluation
Risk
management
Super-
Measures to cope with and delimit risks can be introduced
at an early stage and in a targeted manner as a result of the
vision
transparency gained with respect to risk-inherent developments
and potential risks. At Salzgitter AG there is a clear demarcation
Risk
identification
Communication
between risk management and controlling, which are nonetheless
geared towards complementing each other. Actual risks can therefore
be handled either through the medium of controlling (for example,
by way of provisioning) or via the risk management system (by taking action
to overcome the risk), or via both approaches augmenting each other.
A reporting system used by the entire Group ensures that management is provided with pertinent
information. Group companies report on the risk situation in monthly controlling reports or ad hoc
and directly to the Executive Board. Almost all companies subject to reporting requirements use the
Group data bank developed specially to enhance the effective handling of data. We analyze the risks
identified and assessed at Group level, monitor them punctiliously and allocate them to risk categories
and to our overall economic situation.
Evaluation aspects
A distinction is drawn between improbable and probable risks determined by the likelihood of their
occurrence. Improbable risks are events that, after careful commercial, technical and legal consideration
of the circumstances, are deemed unlikely to occur and therefore tend not to be expected. The
conditions that must be fulfilled for this judgment to stand are documented, periodically examined
and if necessary updated. Consideration of the sustained validity of the conditions defined is an aspect
of controlling and internal auditing at Salzgitter AG. The definition of probable risk means that loss or
damage to the company resulting from an undesirable event can no longer be ruled out. In the interest
of traceability and controllability, the quantitative extent of the calculated loss or damage is documented
in the light of the relevant influencing factors.
Risk Report