PDF (10.9MB) - ThyssenKrupp AG
PDF (10.9MB) - ThyssenKrupp AG
PDF (10.9MB) - ThyssenKrupp AG
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Management report on the Group<br />
2.7 Management report on the Group Expected developments and associated opportunities and risks<br />
110 | 111<br />
Risk transfer by central service provider<br />
As central service provider, <strong>ThyssenKrupp</strong> Risk and Insurance Services again handled the Groupwide<br />
transfer of risks to insurers in 2010/2011. The scope and structure of insurance cover is determined on the<br />
basis of risk assessments in which insurable risks at the Group companies are identified, evaluated and<br />
reduced or removed through asset-specific protection plans. Depending on the Group’s risk-bearing ability,<br />
we agree appropriate deductibles for individual classes of insurance.<br />
To keep risk prevention at a sustainable and appropriately high level, binding standards are in place for all<br />
Group companies. These standards were developed by experts from all areas of the Group under the<br />
leadership of <strong>ThyssenKrupp</strong> Risk and Insurance Services and are updated on an ongoing basis. Internal and<br />
external auditors regularly check compliance with these standards.<br />
To limit the risk of insurer insolvency, we spread the risk over numerous insurers taking into account the<br />
ratings given to these insurers by recognized agencies.<br />
Financial risks<br />
Central responsibilities of <strong>ThyssenKrupp</strong> <strong>AG</strong> as parent company include the coordination and management<br />
of financial requirements within the Group and securing the financial independence of the Company as a<br />
whole. To this end we optimize Group financing and limit the financial risks. Risks in the individual financial<br />
risk areas are minimized through an ongoing process of monitoring and intensive controls.<br />
Credit risk (default risk): We enter into financial instrument transactions in the financing area only with<br />
counterparties who have a very high credit standing and/or are covered by a deposit guarantee fund.<br />
Transactions are concluded only within specified counterparty risk limits. Outstanding receivables and<br />
default risks in connection with supplies and services are constantly monitored by the Group companies; in<br />
some cases they are additionally insured under commercial credit policies. The credit standing of key<br />
account customers is monitored particularly closely.<br />
Liquidity risk: To secure the solvency and financial flexibility of the Group at all times, we maintain longterm<br />
credit facilities and cash funds on the basis of a multi-year financial planning system and a liquidity<br />
planning system on a rolling monthly basis. The cash pooling system and external financings are<br />
concentrated mainly on <strong>ThyssenKrupp</strong> <strong>AG</strong> and specific financing companies. We use the cash pooling<br />
system to allocate resources to Group companies internally according to requirements.<br />
Market risk: Various measures are used to mitigate or eliminate the risk of fluctuations in the fair values or<br />
future cash flows from non-derivative or derivative financial instruments due to market changes. These<br />
mainly include off-exchange-traded foreign currency forward contracts, interest-rate swaps, interestrate/foreign<br />
currency derivatives and commodity forward contracts with banks and commercial partners. To<br />
hedge against commodity price risks we also use exchange-traded futures. The use of derivative financial<br />
instruments is extensively monitored, with checks being carried out on the basis of policies in the framework<br />
of regular reporting.