Porsche 2012 Annual Report Download - page 128

business processes is to identify risks at an early
stage, assess their extent, promptly initiate any
necessary countermeasures and report to the board
of management in accordance with the internal
rules. Each year, the auditors check the processes
and procedures implemented for this as well as the
adequacy of the documentation.
The Scania brand, which has been consolidat-
ed 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 Cor-
porate Governance Report, risk management and
risk assessment are integral parts of corporate
management. Risk areas are evaluated by the Con-
trolling department and reflected in the financial
reporting.
Porsche Holding Salzburg, which was consoli-
dated in 2011, was fully integrated into the
Volkswagen group’s existing systems in the report-
ing period. MAN SE, likewise consolidated in 2011,
and Porsche AG, which was consolidated in 2012,
have already implemented mature structures for a
risk early warning system and are included in the
annual reporting. Ducati Motor Holding S.p.A.,
which was also consolidated in 2012, will gradually
be integrated starting in 2013.
Updating the risk documentation
The risk managers of the individual divisions and the
members of the boards of management and manag-
ing directors of significant investees receive stand-
ardized risk position surveys annually. Their re-
sponses 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 documented. The annual updat-
ing of the risk documentation is coordinated central-
ly by the Governance, Risk and Compliance func-
tion. Under the guidance of the auditors, the plausi-
bility and adequacy of the risk reports are examined
on a test basis in detailed interviews with the divi-
sions and companies concerned. The auditors as-
sessed the effectiveness of the risk early warning
system based on this information and established
both that the risks identified were presented in a
suitable manner and that measures and rules were
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 scheduled checks as part of
the audit of the annual financial statements and
unscheduled checks within the meaning of section
44 of the German Banking Act (KWG) by the German
Federal Financial Supervisory Authority (BaFin), as
well as checks 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 per-
formed by the heads of the Group Internal Audit,
Quality Assurance, Group Treasury, Brand Control-
ling and Group Controlling organizational units.
The risk management system – goals and
operation
The group’s risk management system is designed to
identify potential risks at an early stage so that
suitable countermeasures can be taken to avert the
threat of loss to the company, and any risks that
might jeopardize its continued existence can be
ruled out.
The risk management system is an integral part
of the Volkswagen group’s structure and workflows
and is embedded in its business processes. Events
that may give rise to risk are identified and as-
sessed on a decentralized basis in the divisions and
at the investees. Countermeasures are introduced
immediately, their effects are assessed and the
information is incorporated into the planning in a
timely manner. The results of the operational risk
management process flow into budget planning and
controlling on an ongoing basis. The targets agreed
in the budget planning rounds are continually veri-
fied in revolving planning reviews.
2The company
Group management report
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