Audi 2010 Annual Report Download - page 181

179
Management Report
132 Audi Group
141 Business and underlying
situation
156 Financial performance
indicators
159 Social and ecological aspects
173 Risks, opportunities
and outlook
173 Risk report
179 Report on post-balance sheet
date events
179 Report on expected
developments
183 Disclaimer
Information and IT risks
A key success factor behind ongoing, sustainable productivity advances is efficient, cost-effective
processes and information technologies that meet the business requirements of the Audi Group.
Moreover, the ready availability of data and information flows across all corporate locations is of
growing importance in keeping procedures throughout the Company swift and efficient. At the
same time the growing prevalence of electronic networks does, however, harbor potential in-
formation and IT risks, which could have a lasting impact on financial performance.
The principal risks are the failure of important IT systems within the value chain, unauthorized
access to the system, and the creation of heterogeneous system landscapes.
These risks are largely mitigated through stable, highly available IT infrastructures. Further-
more, Group-wide security standards play a major role in assuring high continuity in internal
processes and protect the Company against external intervention.
Financial risks
The Audi Group is exposed to financial risks through its business activities. These comprise market
price risks such as from interest rates and raw material prices, as well as issuer risks and liquidity
risks. As a result of the Company’s highly international nature, foreign exchange risks relating in
particular to the U.S. dollar, the pound sterling and the Japanese yen are of special relevance.
Further information on the hedging policy and risk management in the area of financial risks, in
particular relating to the use of derivative financial instruments in hedging transactions, is pro-
vided in the Notes in “Additional disclosures” under Section 34 “Management of financial risks,”
and constitutes part of this Management Report.
Overall assessment of the risk position
Although worldwide demand for cars has recovered much more quickly than expected from the
consequences of the global financial and economic crisis, the further fortunes of the industry
remain very difficult to predict. In particular, the fact that the performance of car markets
worldwide is expected to remain both volatile and heterogeneous represents a substantial risk
to all businesses in the automotive industry.
However, on the basis of all known circumstances and facts, no risks currently exist that could
endanger the Company’s survival in the foreseeable future.
REPORT ON POST-BALANCE SHEET DATE EVENTS
There were no reportable events of material significance after December 31, 2010.
REPORT ON EXPECTED DEVELOPMENTS
Anticipated development of the economic environment
General economic situation
The Audi Group believes that the upturn in the global economy will continue in 2011. The
emerging countries of Asia and Latin America will make dynamic progress, while the pace of
growth in many industrial countries will remain slow.
The Audi Group estimates that most Western European countries will enjoy moderate economic
growth in 2011. Germany’s stable upward trend in the business cycle will be maintained, though
with slightly less vigorous growth. Export activity is likely to decline somewhat, while domestic
demand will become more solid thanks to rising corporate investment and stronger consumer
spending. A further improvement in the labor market will have a positive influence.