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mANAGEmENT rEPOrT
risk report
a Integrated risk management ensures transparency
a Material risks in areas of market, production, technology and procurement market
a Risk portfolio free of existence-threatening risks
Our business activities involve opportunities as well as risks.
Our business policy is simultaneously directed at seizing oppor-
tunities and actively controlling identified risks through our risk
management system. The necessary information for this is
prepared in our integrated risk management system, which
conforms to the legal requirements of the German Control and
Transparency Act in the Corporate Sector (Gesetz zur Kontrolle
und Transparenz im Unternehmensbereich; KonTraG). This system
is continuously further developed.
riSK ManageMent witHin DB groUp
The principles of risk policy are set by Group management and
are implemented within DB Group. Within the framework of our
early risk detection system, quarterly reports are submitted to
DB AG’s management Board and Supervisory Board. risks or
negative developments occurring outside of the regular reporting
cycle must be reported immediately. Planned acquisitions are
subject to additional special monitoring. Arriva, which was
acquired during the year under review, has not yet been integrated
into the DB Group’s risk management system. This integration
process will take place during the first half of 2011.
Within our risk management system all risks are shown in
a risk portfolio as well as in a detailed listing, taking materiality
thresholds into account. The risks mentioned in the risk report
are categorized and classified based on the probability of occurrence.
In addition to the possible consequences, the analysis
also contains approaches to and the costs of countermeasures.
In terms of organization, Group controlling serves as the
coordination center for our risk management system within DB
Group. In the context of Group financing, which is strictly oriented
to our operating business, Group Treasury bears responsibility
for the limitation and monitoring of the resultant credit, market
price and liquidity risks. By consolidating the related transactions
(money market, securities, foreign exchange or derivative
transactions) at DB AG level, the associated risks are centrally
controlled and limited. Group Treasury is organized to comply
with the “minimum requirements for risk management”
(marisk) formulated for financial institutions and, applying the
criteria derived from these guidelines, fulfills all requirements
of the KonTraG.
Key characteristics of the internal control
and risk management system with regard to the
Group’s accounting
Our risk management system is supplemented by a Group-wide
internal control system, which also includes accounting-related
processes.
Our internal control system is aligned with criteria defined
by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO) publication: “Internal Control – Integrated
Framework”. The COSO model is a generally accepted theoretical
framework that divides an internal control system into five levels
and then evaluates each level individually. Based on this model,
our accounting-based internal control system is supported by
fundamental control mechanisms such as system-technical and
manual coordination, separate and clearly defined functions,
and the observance of guidelines that are applicable across the
Group, and special work instructions.
In addition to the aforementioned instruments the following
accounting-based control mechanisms are used in DB Group:
unified Group-wide reports based on the standard software
Hyperion Financial management (HFm) are prepared by all of
the consolidated companies that are documented in our core
corporate information system (Firmen Informations System;
FIS), the systematic tracking of changes in accounting rules
based on IFrS or the German Commercial Code (HGB), the
regular and comprehensive update of the corresponding balance
sheet guidelines and accounting-based systems, the uniform
item number plan and the provision of the necessary information
to the persons responsible for preparing the reports. The audit
activities of the corporate auditors, which represent a key
element of our control activities as a process independent
instrument, are focused on evaluating the appropriateness and
effectiveness of our internal control system. Beyond this, audits
are also conducted within the framework of inventories of assets
and reserves. Our control mechanisms are complemented by
the work of the audit and compliance committee, respectively
the Supervisory Board, as well as by the activities of the Group
auditor during the execution of his legally mandated audit.
Based on a binding schedule for closing the books,
accounting materials are prepared by the decentralized bookkeeping
departments in accordance with IFrS principles and
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