Adidas 2002 Annual Report Download - page 91

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89
RISK REPORTING /// adidas-Salomon regularly reviews
specific risks within these areas. The Group’s risk reporting
practice includes a systematic reporting framework, ensuring
that timely, accurate and relevant information is available for
the respective decision makers. This process begins with an
assessment of the risk probability and the classification of
those risks according to the likelihood of their occurrence and
possible consequences.
The Group carefully considers the financial impact of risks
on the forecasted earnings of each respective brand and
regional business unit for the current financial year as well
as for the longer term. This process is supported by an
integrated controlling organization throughout all levels of
the Group.
RISK COMMUNICATION /// In addition to risk identification,
we believe that fast and effective communication of risks
across all appropriate functions and levels is necessary to
ensure the required cooperation and decision-making
support to optimally manage exposure. This occurs not only
in regular reports and business reviews but also in everyday
communication. When appropriate, this information is also
communicated externally.
SAFEGUARDING THE ONGOING BUSINESS /// Despite
obvious business risks, adidas-Salomon is operationally and
financially strong, with sizable assets and liquidity. We are
constantly working to reduce and transfer risk as much as
appropriate. For example, in 2002 we founded a captive
insurance company (adidas International Re Ltd.) in Dublin,
which will commence its business activities in 2003, helping
to improve risk management and better utilize the Group’s
financial resources.
With respect to the current business outlook, no immedi-
ate risks have been identified which could jeopardize the
Group’s ongoing business health and viability. The Group’s
equity capitalization and earning power form a solid basis for
our future business development. We have taken appropriate
precautions against typical business risks that could negatively
affect our financial standing and profitability situation.
adidas COLOURS /// 3-STRIPES
KNIT SHORT