Page 128 - KELAG Annual Report 2017
P. 128

The risks are reported by the units and group entities to the
                                                         Board of Directors regularly and as the need arises.

                                                         Key objectives of the risk management system are to create
                                                         transparency  in  order  to  avoid  risks  and  to  manage  risk
                                                         exposures efficiently. Timely notification of all current risks
                                                         is  essential  in  order  to  achieve  these  objectives.  A
                                                         structured risk management process also helps to identify
                                                         potential opportunities.

                                                         Risks are dealt with consistently in accordance with the risk
           Entrepreneurial activity means that opportunity is not
           without risk.                                 management guideline and presented in a risk portfolio,
                                                         which  is  broken  down  by  respective  probabilities  of
           Consequently, the willingness to take and limit risks has to
                                                         occurrence and potential losses.
           be defined.

                                                         Identified  risks  are  classified  into  the  following  risk
           The  company  operates  an  integrated  risk  management
                                                         categories  –  market  and  competitive  risks,  credit  risks,
           system that addresses risks from its own activities as well as
                                                         operational  risks,  financial  risks,  environmental  risks  and
           risks  from  its  market  environment. The  group-wide  rules
                                                         other risks.
           and minimum standards ensure a systematic and uniform
           risk management system. It is the strategic goal to raise risk
                                                         Risks are identified and managed for each business division
           awareness  at  all  levels,  to  consider  risk  aspects
                                                         and  for  material  equity  investments.  The  main  risks  are
           systematically  in  business  decisions,  to  improve
                                                         summarised and described in the following.
           performance of internal control systems and reporting and
           to establish a value-based risk culture at all levels of the
           Group, beyond the scope of the requirements set by the
           legal minimum standards.
                                                         Risks  can  arise  during  the  execution  of  operational
                                                         processes and from personal misconduct, in any business
                                                         division  or  investment.  These  risks  are  minimised
                                                         organisationally,  firstly  through  an  extensive  internal
           The organisation of the risk management system that has
                                                         control  system  which  is  reviewed  and  improved  on  an
           been  implemented  is  designed  to  ensure  that  business
                                                         ongoing  basis  and  secondly  through  an  established
           decisions and business activities are only executed within
                                                         Business Continuity Management (BCM) system. The BCM
           defined risk limits. Risk management is an integral element
                                                         process  includes  a  contingency  plan  which  is  constantly
           of the business structure and organisation of procedures.
                                                         updated and practised through various test processes. In
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