All business opportunities we identify undergo a process where risks are assessed, analysed, mitigated and monitored. Our risk management system identifies corporate and project level risks.

Corporate risks

In 2014 the most important corporate risks identified in our corporate risk log relate to the following categories: markets, organisational structure and culture, project management and working capital management.

Competition strengthened putting pressure on our profitability and growth. To mitigate the risk, we introduced measures including improved client satisfaction through dedicated account management, leverage of our globally leading services and focused geographical growth. New projects in countries with high business or other risks (for example which pose danger to staff) require the approval of the Risk Assessment Board.

Our management system obliges staff to act in line with policies and procedures. We have introduced methods to monitor this and have noticed better compliance. Management attention is still required.

The focus placed on project management within our organisation during the year has already improved skills and results, reducing this category of risk.

To avoid the risk that insufficient funds (both cash and bank facilities) are available to realise the ambitions of the company, we introduced a number of measures to ensure that the working capital position further improves. In 2014 the cash flow reversed from negative to positive. 

Project risks

Our project risk management procedures are integrated in our management system to ensure these procedures are executed in a uniform way throughout the organisation.
Important controls are:
  • The authorisation matrix defining who is allowed to approve commitments and transactions. 
  • Each prequalification and proposal is required to go through a standardised risk assessment. 
  • A periodic project review document has to be prepared by the project manager and discussed with line management. In addition, each project is discussed monthly between business management and business controllers to ensure that risks are identified and reflected correctly in our accounting systems.

Our organisation faces other risks including business integrity and health and safety, which are referenced elsewhere.

Information Security Policy

We formulated a new Information Security Policy aligned with the principles defined by the internationally accepted standard for information security. We prepared a multi-year action plan to implement and embed this security policy in the company. We have two standardised Enterprise Resource Planning applications for project administration. These are in place in most of our legal entities and implementation will continue throughout 2015.

We have policies in place to safeguard the liquidity of our business and to cover the risk of currency fluctuations during the execution of our projects. We limit the issue of corporate guarantees as far as possible by ensuring the solvency of our companies is sufficient to operate independently in the market.

In principle, Royal HaskoningDHV operates pension plans under defined contribution pension schemes. However, at HaskoningDHV UK Limited there is a defined benefit scheme that was closed to future accrual during 2005. At this time all remaining active members became deferred members. The defined benefit scheme deficit under Dutch GAAP in accordance with IAS19 ‘Retirement benefits’ as at 31 December 2014 is €21.7 million with an associated deferred tax asset of €4.2million.

Following the completion of the triennial valuation of the scheme as at 31 October 2012, the level of regular deficit funding increased to £1.1 million per annum from the start of 2014 and increasing thereafter by 3% per annum, plus additional employer contributions of £0.02 million per year to a maximum of £0.1 million per annum thereafter, until completion of the next review.