Porsche 2011 Annual Report Download - page 117

Risk early warning system in line with the
KonTraG
The company’s risk situation is ascertained,
assessed and documented annually in accordance
with the requirements of the German Act on Control
and Transparency in Business (KonTraG). Each year,
the auditors check the processes and procedures
implemented for this as well as the adequacy of the
documentation. Risk management, which forms an
operational component of the business processes, is
designed to identify risks in a timely manner, assess
their extent and, where appropriate, take prompt
countermeasures. The Scania brand, which has been
consolidated in the group since 22 July 2008, has not
yet been incorporated into the Volkswagen group’s
risk management system due to various provisions of
Swedish company law. According to Scania’s corpo-
rate governance report, risk management and risk
assessment are integral parts of corporate manage-
ment. Risk areas are evaluated by the controlling
department and reflected in the financial reporting.
Porsche Holding Salzburg and MAN SE, which
were consolidated in 2011, have already implemented
mature structures for risk early warning systems.
Starting in 2012, these will gradually be integrated
into the Volkswagen group’s existing systems.
Updating the risk documentation
Standardized risk position surveys of both the
risk managers of the individual divisions and the
members of the boards of management and manag-
ing directors of significant investees are performed
annually. Their responses are used to update the
overall picture of the potential risk situation. In the
process, the expected likelihood of occurrence and
the expected loss are assigned to each significant
risk identified and the measures taken are docu-
mented. The annual updating of the risk documenta-
tion is coordinated centrally by the Governance, Risk
and Compliance function. Under the guidance of the
auditors, the plausibility and adequacy of the risk
reports are examined on a test basis in detailed inter-
views with the divisions and companies concerned.
The auditors assessed the effectiveness of the risk
early warning system based on this information and
established both that the risks identified were pre-
sented in a suitable manner and that measures and
rules have been assigned to the risks adequately and
in full. The Volkswagen group therefore meets the
requirements of the KonTraG. In addition, the Financial
Services Division is subject to regular special audits
by the German Federal Financial Supervisory Authority
(BaFin) in accordance with Sec. 44 German Banking
Act (KWG) and controls by association auditors.
Workflow rules, guidelines, instructions and
descriptions are systematically recorded and can for
the most part be accessed online. Adherence to
these rules is assured by internal controls performed
by the heads of the Group Internal Audit, Quality As-
surance, Group Treasury, Brand Controlling and Group
Controlling organizational units.
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