Report of the Supervisory Board - tuv nord italia

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een possible. We would also like to thank the members of the staff councils for their constructive cooperation. Risk management The long-term development of a business depends substantially on the extent to which it is able , at all levels throughout the company, to optimise the management of the risks that arise in all fields of business activity. Subsequent to the merger of the classic TÜV activities of TÜV Hannover/Sachsen- Anhalt e.V., TÜV Nord e.V. and RWTÜV AG, the risk management system has been placed on a uniform basis as from 31.12.2004. As a component of the Group’s corporate management system, a six-monthly risk inventory is performed in all Group companies in which TÜV NORD GmbH has either a direct or an indirect holding of more than 50%. In addition, Group companies are required to submit ad-hoc reports in response to developments as they arise. Strict quality assurance and cost management at all levels of the organisation contribute to reducing the identified risks and to strengthening the competitive position of the Group. Wherever necessary, provisions are 24 formed to cover risks emanating from the various segments of the Group’s activities. There are also insurance policies in place with the purpose of limiting the financial effects of any losses that may occur. The risk management system is constantly undergoing further development, its efficiency and effectiveness being regularly monitored by the internal and external auditors. In connection with the audit of the consolidated financial statements, the auditors have confirmed that there is no indication of any risks that might jeopardise the existence of the Group. Such risks do however exist in respect of four smaller companies of the TÜV NORD Group; appropriate measures are being taken to counter them. There are no essential price, credit or liquidity risks affecting the Group, nor any risks arising out of fluctuations in flows of funds within the meaning of Article 289 (2) No. 2 HGB. Risks and opportunities for the future development of TÜV NORD Group’s business units As a Group with international operations, TÜV NORD Group is confronted with numerous risks that are inseparable from entrepreneurial activity. However, the Group’s increasingly supraregional structure and broad-based portfolio also give rise to significant opportunities.
In the Mobility business unit, there is a risk that the increasing activities of competitors and the associated price erosion will lead to increasing losses of market share in core business in the home areas of the parent associations. To counter this development, more effort is to be put into selling new services and products. The risk situation in the Systems business unit is substantially influenced by the progressive deregulation and liberalisation that is taking place in its market environment, in particular with regard to the law on plant subject to mandatory surveillance. Competition in this area will increasingly face the company with new challenges. If it is to hold its own on the market in future, it will have to further optimise its work processes and structures, and introduce new services. As a result of the specific situation in the Energy and Systems Engineering unit, there is a general risk for all companies that volumes of business may be lost, even at very short notice, as a result of unpredictable events. In the International business unit the situation is better than it is in Germany, since these companies offer their services in markets where there is still unsatisfied demand. Although these companies too face increasing pressure from competition, they have good opportunities for expansion in the inspection business world-wide. In the Certification business unit, TÜViT GmbH in particular is continuing to suffer from the downturn in the IT industry. The implementation of the so-called Hartz labour market reforms continues to represent a high risk to the Training business unit, which could potentially put its future in jeopardy. The risk situation in the Traffic Psychology business unit is influenced by political developments as well as by the increasing activities of competitors. To counter these risks, new locations are to be established and other measures taken. Financial statements of TÜV NORD GmbH TÜV NORD GmbH, the managing company of the TÜV NORD Group, also had operations of its own in 2004 in addition to its function as the holding company. This was a result of the spinning off of the entire volume of business (except for the GPSG business – business pursuant to the Safety of Appliances and Products Act) from the two associations (TÜV Hannover/Sachsen-Anhalt e.V. and TÜV NORD e.V.), parts of which remained with TÜV NORD GmbH. As a result, TÜV NORD GmbH generated sales revenues of €165.4 million. In 2005 the whole of this operational business is to be transferred to subsidiary companies, in most cases newly established ones, so that 25
Page 1 and 2: ANNUAL REPORT 2004
Page 3 and 4: Governing bodies Members of the Sup
Page 5 and 6: The Supervisory Board of TÜV NORD
Page 7 and 8: The Mobility business unit felt the
Page 9 and 10: in engines. Exhaustive series of te
Page 11 and 12: These consultancy services, which u
Page 13 and 14: inspection and servicing of transpo
Page 15 and 16: throughout the world and developing
Page 17 and 18: Training and Human Resources Accept
Page 19 and 20: Management Report and Consolidated
Page 21 and 22: products and services. The price cu
Page 23: funds (€486.5 million) reinsuring
Page 27 and 28: Consolidated Annual Financial State
Page 29 and 30: Consolidated Profit and Loss Accoun
Page 31 and 32: Depreciation and amortisation expen
Page 33 and 34: The associated companies are accoun
Page 35 and 36: Apart from directly attributable co
Page 37 and 38: (4) Receivables and other assets Th
Page 39 and 40: (10) Liabilities of which with a re
Page 41 and 42: (15) Cost of materials 2004 € ’
Page 43 and 44: Annual Financial Statements 2004 of
Page 45 and 46: Profit and Loss Account of TÜV NOR
Page 47 and 48: Depreciation and amortisation expen
Page 49 and 50: (4) Receivables and other assets of
Page 51 and 52: (10) Other financial commitments Th
Page 53: (18) Taxes 2004 2003 € ’000 €
Page 56 and 57: List of Shareholdings of TÜV NORD
Page 58 and 59: Name and place of registration Shar
Page 60: TÜV NORD GmbH 30519 Hannover Am T

Report of the Supervisory Board - tuv nord italia

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