Mercedes 2012 Annual Report Download - page 120

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3 | Management Report | Remuneration Report | Risk Report
Risks and opportunities
Daimler’s divisions are exposed to a large number of risks
which are inextricably linked with our entrepreneurial activities.
In order to identify, evaluate and deal consistently with those
risks, we make use of effective management and control systems;
we have combined these systems in a uniform risk manage-
ment system, which is described below. Entrepreneurial activity
primarily consists of creating and utilizing opportunities in
order to secure and strengthen the company’s competitiveness.
The divisions have direct responsibility for recognizing and
utilizing opportunities at an early stage. As part of the strategy
process, long-term opportunities for further profitable growth
are identified and included in the decision process. Entrepreneur-
ial opportunities are not reported within our risk management
system; they are identified in the context of strategic and
medium-term planning and are followed up during the year
in the context of periodical reporting. Further information
on this subject is provided on E p age 137 of the Management
Report.
Risk management systems
(Report and explanation provided pursuant to Section 315
Subsection 2 Number 5 and Section 289 Subsection 5 of the
German Commercial Code (HGB))
The risk management system with regard to material risks
and risks threatening the existence of the Group is inte-
grated into the value-based management and planning system
of Daimler AG and the Group. It is an integral part of the
overall planning, management and reporting process in all rele-
vant legal entities, divisions and corporate functions. It aims
to systematically identify, assess, monitor and document mate-
rial risks and risks threatening Daimler’s existence. Risk
assessment principally takes place for a two-year planning
period, although in the discussions for the derivation of
medium-term and strategic goals, Daimler also identifies and
monitors longer-term risks. In the context of the two-year
operational planning – with the use of defined risk categories –
risks are identified for the divisions and operating units,
the major joint ventures and associated companies and the
corporate departments, and they are assessed regarding
their probability of occurrence and possible extent of damage.
Assessment of the possible extent of damage usually takes
place with regard to the risks’ impact on EBIT. In addition, risks
for example for the Group’s reputation are assessed according
to qualitative criteria. The reporting of relevant risks is based
on fixed value limits. The responsible persons also have the
task of developing, and initiating as required, measures to avoid,
reduce and hedge risks. Material risks and the countermea-
sures taken are monitored within the framework of a regular
process. As well as the regular reporting, there is also an
internal reporting obligation within the Group for risks arising
unexpectedly. The Group’s central risk management depart-
ment regularly reports on the identified risks to the Board of
Management and the Supervisory Board.
The internal control and risk management system with
regard to the accounting process has the goal of ensuring
the correctness and effectiveness of accounting and financial
reporting. It is continually further developed and is an integral
part of the accounting and financial reporting process in all rele-
vant legal entities and corporate functions. The system includes
principles and procedures as well as preventive and detective
controls. Among other things, we regularly check that
– the Group’s uniform financial reporting, valuation
and accounting guidelines are continually updated
and regularly trained and adhered to;
– transactions within the Group are fully accounted
for and properly eliminated;
– issues relevant for financial reporting and disclosure
from agreements entered into are recognized and
appropriately presented;
– processes exist to guarantee the completeness
of financial reporting;
– processes exist for the segregation of duties and
for the “four-eyes principle” in the context of preparing
financial statements, and authorization and access rules
exist for relevant IT accounting systems.
Risk Report