Page 25 - Hoftex Annual Report 2018 EN

Like other internationally operating companies, the Hoftex Group is exposed to a variety of legal and compliance risks. Risks can arise from potential legal disputes and compliance violations and from failure to meet regulatory requirements. In addition, we are subject to a broad range of public regu- lations worldwide that govern environmental protection, data protection and other legal guidelines. Non-compliance can lead to substantial fines, claims for damage and reputation loss. We work closely with a law firm and consultancy to mitigate these risks. Furthermore, we have a data pro- tection officer, data protection coordinators and occupational safety officers in our various locations and work closely with external consultants.
Pursuant to Section 312 AktG, the Management Board of the Hoftex Group compiled a report about the relationships between the Hoftex Group and its affiliates during the 2018 fiscal year and presented it to the Supervisory Board. The final statement of the report declares: “Based on the circumstances known to it at the time the legal transactions were made with these affiliates, the Company received adequate consideration. No measures subject to reporting requirements occurred during the year under review.”
Economic growth in the Eurozone will remain moderate in 2019 and is expected to slow compared to the previous year. The Brexit situation is still unclear and continues to bring tremendous uncertain- ties along with material risks for the economic development of Europe. The tax reform passed in the US last year and the temporary fiscal stimulus associated with it will begin to wane. If we also look at the trade conflict with China, the decline in available workers and the slump in capital spending, then the US is likewise headed towards an economic cool down. Overall the IMF predicts that growth in advanced economies will slow down to 1.8 %.
5. Closing statement on the subordinate status report
The Chinese economy will not grow as fast in 2019 either. Key factors in the slowdown include the trade conflict with the US, limits to lending growth and the anticipated drop in investments. The IMF also expects emerging and developing economies to cool and is predicting a 4.4 % growth rate.
The results of the ifo economic surveys on the textile and apparel segments indicate an increasingly negative outlook on the future. Possible reasons could lie in the general slowing of the global economy experts are anticipating, the drop in consumer sentiment, political uncertainties such as Brexit or protectionist tendencies in global trade and procurement market prices, which have risen dramati- cally in some areas.
6. Forecasts and outlook
6.1. Outlook on macroeconomic condition
6.2. Outlook on sector-specific conditions
Letter to Shareholders Supervisory Board Report Group Management Report Consolidated Financial Statements Annexes
Compliance risks
Economic experts expect global economic growth to cool in 2019: The International Monetary Fund forecasts global economic growth of 3.3 % in its most recent outlook. Key influencing factors include ongoing trade conflicts, a political landscape shaped by uncertainties and increasingly strict financial conditions overall.
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