Page 39 - KELAG Annual Report 2019
P. 39

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
                                                         management guideline and presented in a risk portfolio,
           without risk. Consequently, the willingness to take and limit
                                                         which  is  broken  down  by  respective  probabilities  of
           risks has to be defined.
                                                         occurrence and potential losses.

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