BMW 2015 Annual Report Download - page 68

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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
27 Overall Assessment by Management
27
Financial and Non-financial
Performance Indicators
29 Review of Operations
49 Results of Operations, Financial
Position and Net Assets
59 Comments on Financial Statements
of BMW AG
62 Events after the End of the
Reporting Period
63 Report on Outlook, Risks and
Opportunities
63 Outlook
68 Report on Risks and Opportunities
81 Internal Control System and Risk
Management System Relevant for the
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 worldwide leading manufacturer of premium cars
and motorcycles and provider of premium financing
and mobility services, the BMW Group is exposed to
numerous uncertainties and changes. Making full use of
the opportunities that present themselves is the basis for
its entrepreneurial success. In order to achieve growth,
drive profitability, boost efficiency and maintain sustain-
able levels of business going forward, the BMW Group
consciously takes certain risks.
The prudent management of opportunities and risks is
a fundamental prerequisite for the Group’s ability to
react appropriately to changes in political, legal, techni-
cal or economic conditions. All opportunities and risks
identified are addressed in the Outlook Report, if they
seem likely to materialise. The following sections focus
on potential future developments or events, which could
result in a positive variance (opportunities) or a nega-
tive variance (risks) in the BMW Group’s outlook. The
potential impact of risks and opportunities is assessed
separately as a general rule, i.e. without set-off.
As a general rule, opportunities and risks are assessed
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, any risks capable of
posing a threat to the going-concern status of the BMW
Group are avoided. If there is no specific reference to a
segment, opportunities and risks relate to the Auto-
motive
segment.
The scope of entities covered by the report on risks and
opportunities corresponds to the scope of consolidated
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 any internal or external
risks that could pose a threat to the attainment of the
Group’s corporate targets. The risk management system
covers all significant risks to the Group and any which
could pose a threat to its going-concern status. In terms
of the structure of the risk management system, the re-
sponsibility for risk reporting lies with each individual
employee and manager in their various roles – and not
with any centralised unit in particular. Every person
employed by the Group is required to report any risks
identified via the available reporting channels. This re-
quirement is set out in guidelines that apply throughout
the Group.
The Group risk management system comprises a decen-
tralised network covering all parts of the business and
is steered by a centralised risk management function.
Each of the BMW Group’s fields of responsibility is
represented within the risk management network by
Effectiveness
Usefulness
Completeness
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
Supervisory Board
Board of Management
Group-wide risk management