opening of the single market for the United Kingdom has
minimized the risks relating to increased tariffs for im-
ports and exports. We expect that the current difficulties in
the administrative processing of imports and exports can
be reduced in a timely manner. The existing EU REACH certifications
of products or raw materials will have to be adjusted
on the basis of the new UK REACH, which will be valid
starting January 1, 2021. However, this regulation is no
longer expected to increase the risk of a significant impact on
earnings.
Legal violations (compliance risks) can give rise to liability
risks or tarnish our reputation, which can have a significant
effect on the Group’s earnings and asset situation.
We counter these risks within the framework of our compliance
management system, inter alia by regularly informing
and training our employees about relevant legal requirements.
An important basis for long-term success are competent
and committed employees. Should we no longer be able
to recruit or retain suitable specialists or managers in the
future, risks could arise for the successful implementa-
tion of our strategy (personnel risks). To counter these risks,
ALTANA offers a sophisticated work environment and an
attractive compensation system, which is supplemented by
various pension plans and wealth creation schemes. Moreover,
we regularly offer further education and training programs
to budding junior staff members, as well as to specialized
and managerial staff.
Compliant Group Accounting
Essential accounting-related risks arise particularly when
extraordinary or non-routine issues are handled. These include
the first-time consolidation of acquired businesses or parts
of companies as well as the recording of the sale of Group
assets. Accounting of financial instruments is also subject
to risks due to the complex evaluation structure. Risks also
arise from fraudulent acts.
At ALTANA, a separate department of the Group’s holding
company coordinates and monitors Group accounting.
A core component of the control system are the guidelines,
process descriptions, and deadlines that this department
defines centrally for all companies, guaranteeing a standardized
procedure for preparing the financial statements. For
complex issues, the instruments needed for uniform accounting
are retained centrally for all Group companies. For
recording extraordinary processes and complex special issues,
we regularly obtain external reports, advice, and statements.
The financial statements of the individual Group companies
are prepared decentrally by the local accounting
departments. Hence the individual companies are responsible
for preparing the financial statements, in keeping with
Group guidelines and country-specific statutory accounting
requirements.
The work steps needed to prepare the financial statements
are defined such that important process controls are
integrated. These include guidelines pertaining to the
separation of functions and allocation of responsibilities, to
control mechanisms, and to IT system access regulations.
The respective management explicitly confirms to the Group’s
management that the annual financial statements are cor-
rect and complete. In addition, important financial statements
are audited by the company or Group auditors in charge.
The local financial statements are recorded and consolidated
via standardized formats and processes in a central
IT system. At the divisional and holding company levels numerous
manual and IT-assisted control mechanisms are applied.
They encompass an analysis and a plausibility examination of
the registered data and the consolidated results by Group
accounting as well as by the controlling department and other
departments with expertise in this area. Required corrections
of the information in the financial statements are generally
made at the level of the individual company to ensure
the data are uniform and are transferred.
82 Expected Developments