Praktiker Bau- und Heimwerkmärkte Holding AG, Kirkel

Risk report
Page 18
The management board of Praktiker Holding AG has implemented a cross-group risk management
system. The risk management system serves the purpose of risk identification as well as risk elimination
or mitigation and encompasses all Praktiker Holding AG’s corporate divisions and all corporations
belonging to the Praktiker Group.
Business activities are subject to risk by virtue of their very nature. Internal risk management guidelines
are characterised by the concept that no action or decision may expose the group to an existential
risk. If risks cannot be avoided, they must be insured to the extent possible and economically feasible.
Residual risks must be controlled by using risk management tools.
The principles underpinning this risk management system are documented in a risk management
manual for the group compiled by the management board. It contains the organisational and procedural
fundamentals applying both to the group’s German operations and to its foreign-based subsidiaries.
As such, the management board complies with its responsibility in respect of the stipulation of the
risk management principles and the organisational setup of the risk management system. In this connection,
the management board also assumes the duty of providing the supervisory board and the
shareholders with the necessary information. Immediately below management board level, a risk
management officer coordinates risk reporting activities throughout the group. The risk management
coordinator is above all responsible for the further development of the risk management system, for
risk reporting coordination and for drawing up the monthly risk reports for the management board.
These reports keep the management board informed about any key changes in the risk landscape and
developments in risk management as well as about the measures taken in terms of risk mitigation or
prevention.
The heads of the divisions are responsible for identifying, logging and valuing the respective risks of
their division. It is their duty to control and monitor the risks applying to the part of the business they
are in charge of. For this purpose, a standardised risk matrix is used and updated on an ongoing basis.
It features all key risks together with their probability of occurence and potential financial implications.
Countermeasures for potential and existing risks are defined for each corporate division. The
manner in which the individual risks have developed and the nature of the countermeasures taken are
documented too.
Every six months, the risk management officer carries out a risk inventory, taking account of all risk
reports and changes relevant to the given risk assessment. The results are submitted to the management
board in the form of an extract from the risk inventory of all key risks.
The process-independent monitoring of the risk management system is the responsibility of Praktiker
Group’s internal audit department, which examines the risk management system in terms of its functionality
on a yearly basis.