BMW 2014 Annual Report Download - page 70

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18 COMBINED MANAGEMENT REPORT
18 General Information on the BMW Group
18 Business Model
20 Management System
23 Report on Economic Position
23 General and Sector-specific
Environment
26 Overall Assessment by Management
26
Financial and Non-financial
Performance Indicators
29 Review of Operations
49 Results of Operations, Financial
Position and Net Assets
61 Comments on Financial Statements
of BMW AG
64 Events after the End of the
Reporting Period
65 Report on Outlook, Risks and
Opportunities
65 Outlook
70 Report on Risks and Opportunities
82 Internal Control System and Risk
Management System Relevant for the
Consolidated Financial Reporting Process
83 Disclosures Relevant for Takeovers
and Explanatory Comments
87
BMW Stock and Capital Markets
Report on Outlook, Risks and Opportunities
Report on Risks and Opportunities
As a world-leading manufacturer of premium cars and
motorcycles and provider of premium financing and
mobility services, the BMW Group is exposed to numer-
ous uncertainties and changes. Making full use of the
opportunities that present themselves is the basis for its
corporate success. In order to achieve growth, profita-
bility, efficiency and sustainable levels of business in the
future, the BMW Group consciously takes certain risks.
The prudent management of opportunities and risks is
a fundamental prerequisite for the ability to react appro-
priately
to changes in political, legal, technical or eco-
nomic conditions. Identified opportunities and risks are
addressed in the Outlook Report if they are likely to
materialise. The following sections focus on potential
future developments or events, which could result in a
positive variance (opportunities) or a negative variance
(risks) in the BMW Group’s outlook. The potential im-
pact of risks and opportunities is always presented sepa-
rately and without offset.
Risks and opportunities are assessed as a general rule
over a medium-term period of two years. All potential
risks of losses (individual and accumulated risks)
are
monitored and managed from a risk management per-
spective. As a matter of principle, risks that pose a going-
concern threat are avoided. If there is no specific
reference to a segment, opportunities and risks relate
to
the Automotive segment.
The scope of entities covered by the report on risks
and
opportunities corresponds to the scope of consoli-
dated entities included in the BMW Group Financial
Statements.
Risk management system
The objective of the risk management system and one of
the key functions of risk reporting is to identify, record
and actively manage internal and external risks which
pose a threat to the attainment of corporate targets. The
risk management system covers all significant risks to
the Group, or those which could pose a threat to its going-
concern status. With regard to the structure of the risk
management system, the responsibility for risk reporting
lies with each individual member of staff and manager –
in their various roles – and not with that of any central-
ised unit in particular. Each and every employee and
manager is required to report risks via the available re-
porting channels. This requirement is set out in guide-
lines that apply throughout the Group.
The Group risk management system comprises a de-
centralised
network covering all parts of the business,
which is steered by a centralised risk management func-
tion. Each of the BMW Group’s areas of responsibility
is represented within the risk management network by
so-called network representatives. The network’s
for-
mal organisational structure helps to strengthen its
visibility and underline the importance attached to risk
Risk management in the BMW Group
Analysis and
Measurement
ControllingMonitoring
Reporting
Identification
Risk management
Internal Control System
Group Audit
Compliance
Committee Risk Management
Steering Committee
Effectiveness
Usefulness
Completeness
Supervisory Board
Board of Management
Group-wide risk management