Audi 2011 Annual Report Download - page 185

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The situation on the labor market in Germany continues to change as a result of an aging, shrink-
ing population. The Audi Group responded early on to demographic change and took appropriate
action. Human resources management focuses on adapting working conditions to suit an em-
ployee’s age, developing models for the individual’s working life, and offering special part-time
arrangements. Other priorities are to offer preventive health care programs and strengthen
awareness among employees of their individual responsibility for their own financial future.
Information and IT risks
The Audi Group’s enduring success owes a great deal to its ability to realize sustainable produc-
tivity advances on a regular basis. To achieve these, it needs effective, low-cost processes and
information technologies that reflect the needs of an automotive manufacturer with global
operations. In light of the gradual spread in the Company’s worldwide presence, the ready avail-
ability of data and information flows across all Group and production locations is of growing
importance in keeping procedures throughout the Company swift and efficient.
The growing prevalence of electronic networks harbors increased information and IT risks, which
could undermine the financial position, financial performance and net worth of the Audi Group.
Alongside the failure of important IT systems within the value chain and unauthorized access to
the system, one major risk source could be the emergence of heterogeneous system landscapes.
To avert the risks of unauthorized access to data, ongoing measures are taken to safeguard
stable, highly available IT infrastructures.
The risks are also reduced by Group-wide security standards that are designed to uphold the
continuity of internal processes and thus make a major contribution towards Company security.
Financial risks
The Audi Group is also exposed to financial risks through its business activities. These essentially
comprise creditworthiness and liquidity risks, as well as market price risks such as from interest
rates and commodity prices. As a result of the continuing internationalization of the Audi
Group’s business activities, foreign exchange risks concerning in particular the U.S. dollar, the
pound sterling, the Japanese yen and the Chinese renminbi cannot be ruled out. To hold these
risks in check effectively, by way of medium-term precautions the Audi Group has concluded
extensive hedging transactions for foreign currency and purchases of commodities. Above all in
the recent past, financial markets have been experiencing high volatility and in some cases have
suffered considerable upheaval in particular as a result of the sovereign debt crisis in Europe.
Detailed information on the hedging policy and risk management in the area of financial risks
can be found in the Notes in “Additional disclosures” under Section 34 “Management of finan-
cial risks.” The use of derivative financial instruments in connection with hedging transactions is
also explained in full there.
Overall assessment of the risk position
Following the unexpectedly swift recovery from the global financial and economic crisis, economic
activity in a number of countries – in particular in Western Europe – has once again slowed down
since the second half of the past fiscal year. Moreover, increasingly volatile financial markets and
growing uncertainty worldwide especially in the wake of the sovereign debt crises in various
countries make it more difficult to forecast future economic developments.
At the same time, the volatile and varied development of individual car markets that is expected
represents a substantial risk for all carmakers.
However, on the basis of all known circumstances and facts, no risks currently exist that could
endanger the Company’s survival for the foreseeable future.