Mercedes 2013 Annual Report Download - page 127

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C | Combined Management Report | Risk and Opportunity Report
However, responsibility for operational risk management for
risks threatening the existence of the Group and for the control
and risk management processes with regard to the corporate
accounting process remains directly with the divisions, corporate
functions and legal entities. The measures taken by the
GRMC ensure that relevant risks and any existing process weak-
nesses in the corporate accounting process are identified
and eliminated as early as possible.
In the Board of Management and the Audit Committee of
the Supervisory Board of Daimler AG, regular reports are given
regarding the current risk situation and the effectiveness,
functions and appropriateness of the internal control and risk
management system. Furthermore, the responsible managers
regularly discuss the risks of business operations with the Board
of Management.
The Audit Committee of the Supervisory Board is responsible
for monitoring the internal control and risk management
system. The Internal Auditing department monitors whether
the statutory conditions and the Group’s internal guidelines are
adhered to in the Group’s entire monitoring and risk manage-
ment system. If required, measures are then initiated in cooper-
ation with the relevant management. The external auditors
audit the system for the early identification of risks that is inte-
grated in the risk management system for its fundamental
suitability to identify risks threatening the existence of the Group;
in addition, they report to the Supervisory Board on any
significant weaknesses that have been discovered in the internal
control and risk management system.
Opportunity management system
In 2013, the system of opportunity management, which is
related to risk management, was expanded at Daimler in
order to be able to consider risks and opportunities together.
Opportunity management at the Daimler Group is based on
the risk management system with regard to material risks and
risk threatening Daimler’s existence. The objective of oppor-
tunity management is to recognize at an early stage the possi-
ble opportunities arising in business activities as a result of
positive developments, and to utilize them as optimally as pos-
sible for the Group by taking appropriate measures. Taking
advantage of opportunities can lead to goals being achieved or
in the ideal case being overachieved. At the Daimler Group,
a con tinuous process exists for opportunity management which
includes all the opportunities that are relevant and imple-
mentable in the view of the supplying entities. Within the con-
text of the operational planning, potential opportunities are
identified in addition to risks. Those opportunities are considered
that are possible but which have not so far been included
in the planning. Unlike with risks, opportunities are assessed
in relation only to their impact; there is no consideration of
their probability of occurrence. The assessment of the impact
takes place according to the principles described and is
based on the same categories as the risk management system.
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The tasks of the persons responsible for opportunity manage-
ment is, in addition to identifying and assessing the oppor-
tunities, also to develop and if appropriate initiate measures
designed to utilize an opportunity, enhance an opportunity,
or to implement it fully or partially in cooperation with a partner.
When the utilization of opportunities depends on other topics
whose development cannot be directly influenced by the report-
ing unit, those opportunities are to be documented and moni-
tored. When the measures to be taken to utilize an opportunity
are not assessed as being economical, such an opportunity
is no longer pursued. The development of opportunities and the
status of measures being taken are monitored at regular
intervals.
Risks and opportunities
The following text describes in detail the risks and oppor-
tunities that can have a significant influence on the profitabil-
ity, cash flows and financial position of the Daimler Group.
In general, the reporting of risks and opportunities takes place
for the individual segments. If no segment is explicitly men-
tioned, the following risks and opportunities relate to all the auto-
motive divisions: Mercedes-Benz Cars, Daimler Trucks,
Mercedes-Benz Vans and Daimler Buses.
In addition, risks and opportunities that are not yet known
about or assessed as not material can influence our profitability,
cash flows and financial position.
Industry and business risks and opportunities
The following text deals with the industry and business
risks of the Daimler Group. A quantification of these risks
and opportunities is shown in table
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C.51.
Economic risks and opportunities. Economic risks and oppor-
tunities constitute the framework for the risks and oppor-
tunities listed in the following categories and flow as premises
into the quantification of these risks and opportunities.
With regard to the world economy, Daimler along with the
majority of economic research institutes anticipates significant
acceleration of growth. Economic developments in 2013 are
described in detail in the “Economic Conditions and Business
Development” section of this Management Report; growth
assumptions for 2014 are explained in the Outlook section (see
page 142). As the economic conditions have a significant
influence on automobile sales markets and their development
is one of the Group’s biggest risks and opportunities, the
assessment of the economy is connected with potential risks
and opportunities.
Economic risks and opportunities are linked with assumptions
and forecasts on the general development of the individual
topics. Overall, economic risks for the business environment have
tended to decrease slightly compared with the prior year and
the opportunities for the world economy have increased slightly.