90 348
Consolidated Financial Report |
DIRECTORS’ REPORT
2014 Annual Report
Prysmian Group
90
This comprehensive view of the Group's risks allows the
Board of Directors and Management to reflect upon the
level of the Group's risk appetite, and so identify the risk
management strategies to adopt, meaning the assessment
of which risks and with what priority it is thought necessary
to improve and optimise mitigation actions or simply to
monitor the exposure over time. The adoption of a particular
risk management strategy, however, depends on the nature
of the risk event identified, so in the case of:
• external risks outside
the Group's control, it will be
possible to implement tools that support the assessment
of scenarios should the risk materialise, by defining the
possible action plans to mitigate impacts (eg. continuous
monitoring activities, stress testing of the business plan,
insurance cover, disaster recovery plans, and so on);
• risks partially addressable
by the Group, it will be possible
to intervene through systems of risk transfer, monitoring
of specific indicators of risk, hedging activities, and so
on;
• internal risks addressable
by the Group, it will be possible,
being inherent in the business, to take targeted actions
to prevent risk and minimise impacts by implementing
an adequate system of internal controls and related
monitoring and auditing.
ERM is a continuous process that, as stated in the ERMPolicy,
forms part of the Group's three-year strategic and business
planning process, by identifying potential events that could
affect sustainability, and that are updated annually with the
involvement of key members of management.
In 2014 this process involved more than 30 business
managers, allowing the most significant risk factors to be
identified and assessed; themain information emerging from
this process, along with the strategies adopted to mitigate
the impacts, are reported in the following paragraphs.
The classification used in the Risk Model just described is
used to discuss the significant risk factors for each category
and the strategies adopted to mitigate such risks. Financial
risks are discussed in detail in the Explanatory Notes to the
Consolidated Financial Statements in Section D (Financial
Risk Management).
As stated in the Explanatory Notes to the Consolidated
Financial Statements (Section B.1 Basis of preparation), the
Directors have assessed that there are no financial, operating
or other kind of indicators that might provide evidence of the
Group's inability to meet its obligations in the foreseeable
future and particularly in the next 12 months. In particular,
based on its financial performance and cash generation in
recent years, as well as its available financial resources at
31 December 2014, the Directors believe that, barring any
unforeseeable extraordinary events, there are no significant
uncertainties, such as to cast significant doubts upon the
business's ability to continue as a going concern.
RISK ASSESSMENT CRITERIA
Assessment Criteria
IMPACT
Level of Risk Management
• Impact
• Probability
• Level of Risk Management
Risk INADEQUATELY covered and/or managed
Risk covered and/or managed but
with ROOM FOR IMPROVEMENT
Risk ADEQUATELY covered and/or managed
Remote
Negligible
Low
Moderate
Medium
High
High
Critical
PROBABILITY