Wincor Nixdorf regularly finds itself confronted by risks and opportunities that can have both a positive and a negative impact on the Group’s assets, profits and cash flow (Glossary) , as well as on intangibles such as our reputation. In this report, we will present the most important risks we face and describe the principles underlying Wincor Nixdorf’s risk management system.
We see risk as the potential occurrence of internal or external events that may adversely affect our ability to achieve the Company’s short-term goals or implement its long-term strategy. Risks can also take the form of our missing or insufficiently exploiting the opportunities available to us.
In general, opportunities can be defined as strategic and operational developments, both internal and external, that can have a positive impact on the Group’s future performance if used in the right way.
We look on risk management as the ongoing challenge of identifying, analyzing and evaluating the entire range of potential and actual developments so that we can control our response wherever possible. Risk management is an integral part of Wincor Nixdorf’s overall management system, allowing us to spot risks that might jeopardize the Company’s growth and/or existence at an early stage and limit their impact as far as we are able. This approach is not restricted to risk, however. Another key aim of risk management is to identify opportunities and exploit them for the benefit of Wincor Nixdorf.
To this end, we have clearly defined the management and corporate structure of Wincor Nixdorf and separated certain functions in order to preserve the integrity of individual Group functions. A vital principle of risk management is that opportunities and risks should be evaluated wherever they might occur. This means managing risk both in our legally independent units and at Group level, with operating units enjoying a high degree of autonomy so that they can react flexibly to opportunities as they arise.
To be more precise, risks are identified, analyzed and evaluated in each of our operating units on the basis of the Group’s overall aims and the corresponding aims of individual units. Parameter-based reporting processes are used to coordinate the activities of the relevant Group functions and determine the involvement of the Board of Directors. “Risk Review Boards,” whose members are also drawn from the Board of Directors, have been set up to analyze the main issues. Our centralized Risk Management department is responsible for controlling this risk management process and defining our risk standards and risk control tools. By embedding Risk Management within overall Group Controlling, we can ensure that it is treated as an integral component of everyday business management rather than as a response to specific risks, e.g., relating to particular projects. In this context, we produce an annual risk report, and at our meetings to discuss monthly, quarterly and year-end results, we examine the opportunities and risks that concern Wincor Nixdorf and the individual units that make up the Group.
The main elements of Risk Management at Wincor Nixdorf have also been documented in our management handbook and in Group directives.
Internal Control System.
A key item with regard to risk avoidance, especially in accounting and financial reporting, is the internal control system. The main features of our internal control system are as follows:
- At Wincor Nixdorf, the management and corporate structure are clearly defined. Key cross-divisional functions are managed centrally via Wincor Nixdorf AG and Wincor Nixdorf International GmbH, although individual subsidiaries enjoy a high degree of autonomy.
- The principal functions associated with the financial reporting process – accounting, corporate controlling as well as finance and treasury – are clearly divided with well-defined areas of responsibility.
- An appropriate system of guidelines (e.g., Group handbook, payment guidelines, travel cost guidelines, etc.) is in place and is regularly updated.
- With regard to finances and financial reporting, integrity and responsibility are ensured by the inclusion of an obligation to that effect in the Group’s internal Code of Conduct.
- The financial systems we use are protected as far as possible against unauthorized access through the use of appropriate authorization procedures and restrictions on access.
- The financial systems we use are largely based on the SAP standard.
- All departments and divisions involved in the accounting process are appropriately equipped with regard to both quantity and quality.
- All bookkeeping data received or forwarded is checked regularly for completeness and accuracy. Plausibility tests are scheduled and conducted by our software, e.g., during payment runs.
- The four eyes principle is applied to all accounting-related processes.
- To ensure the correctness and reliability of both internal and external financial reporting, we have established appropriate supervisory bodies (e.g., Audit Committee).
- All processes linked to financial reporting are subject to a regular review by the Internal Audit, which is independent of individual processes.
The aim of our risk management and internal control systems is to ensure that our business activities are effective and properly conducted, and that they comply with the applicable statutory regulations.
