Professional risk management and the kind of sustained optimum performance that regularly improve the quality of a company are inextricably linked. That is why RATIONAL’s risk management system has many instruments for the early identification and analysis of risks and opportunities. To this end, our processes and early warning instruments are continually revised and improved.
Key components of RATIONAL’s risk management system include:
- A uniform company-wide planning process used by all corporate divisions worldwide, together with a comprehensive reporting system.
- Descriptions of the processes and internal controlling systems of all corporate divisions, the quality of which and adherence to which are assured worldwide through regular training courses and appropriate monitoring.
- An internal audit, which provides an independent and objective snapshot of the current situation with regard to the Company’s processes and recommends suitable measures to counterract any deviations from targets.
- Risk indicators with threshold values for sales and marketing efficiency, receivables management, supply chain management and the quality of the service network, to help identify undesirable developments at an early stage and allow appropriate countermeasures to be promptly implemented.
- A globally integrated treasury management system for optimum cash and currency management worldwide.
- Customer satisfaction surveys conducted regularly in all the important markets, providing an external perspective on product quality, service quality and the Company’s competitiveness.
- Partner plans agreed annually with key suppliers and designed to increase quality and productivity. As a result of our purchasing department’s close collaboration with suppliers and regular auditing, we are largely able to avoid shortages in supply and problems with quality.
- Special processes and the use of appropriate systems in order to do justice to the great importance that RATIONAL places on information security and the protection of expertise.
- A comprehensive insurance strategy that is updated each year in line with the latest risk situation and organisational structure.
- Cooperation with Coface, one of the largest trade indemnity insurers, to secure our receivables. The use of specific software systems, including for the automatic updating of insurance data, ensures that full transparency regarding possible credit risks is maintained at all times.
- Regular strategy meetings between the Supervisory Board and the Executive Board, which minimise the risk of undesirable strategic developments.
The effectiveness and topicality of the risk management system is continually updated and adjusted through the internal auditing process. Also, external auditors check whether the Executive Board has taken the necessary steps required under § 91 Para. 2 of the German Stock Companies Act to ensure that developments that could put the existence of the company at risk are identified at an early stage.
RATIONAL AG’s internal controlling and risk management system in relation to the accounting process
The main points of the internal controlling and risk management process in place at RATIONAL AG in relation to the (Group) accounting process can be described as follows:
- The accounting processes in place at RATIONAL AG and its subsidiaries are clearly structured in relation to areas of responsibility and management.
- Standardised accounting practice is assured Group-wide through guidelines that are applied Group-wide as well as being constantly updated.
- With regard to the preparation of the closing financial statements, a clear division of functions exists between Finance and Accounting, as well as Controlling, which are the units principally involved in the accounting process, and assignment of reponsibilities is clear.
- Where possible, and subject to country-specific regulations, the actual bookkeeping process for the RATIONAL Group is handled centrally in Landsberg. This assures high quality of recording and processing throughout the Group for all accounting-relevant data.
- Where possible, standard software is used in our financial accounting systems. These systems are protected against unauthorised access through appropriate security and authorisation concepts.
- The units involved in the accounting process are properly equipped to meet requirements. The staff involved have the necessary qualifications and are involved in an ongoing process to improve their qualifications. In addition to this, the units involved in the accounting process throughout the Group hold regular meetings to ensure that methods are standardised.
- Accounting-relevant data is subject to regular spot checks for completeness and correctness.
- The four-eyes principle is applied to all accounting-relevant processes, without exception.
- In order to ensure that accounting practice is not only standardised but conforms with the law, the annual financial statements of all companies within the RATIONAL Group are audited by locally appointed auditors.
- All the accounting-relevant processes of the RATIONAL Group are regularly checked by Internal Audit as part of the audit process for subsidiaries. The processes involved are also subject to rotational checks carried out at the Landsberg site.
The internal controlling and risk management system, the main points of which are described above, ensures that the accounting process is efficient. The controls in place ensure that very few errors occur but that those that do are not only detected but corrected.
This ensures that accounting practice at RATIONAL AG not only conforms with statutory regulations but that, through the controlling and checking mechanisms described above, business transactions are recorded, reported and evaluated correctly and in a standardised manner Group-wide in order to make available, reliable and relevant information.