Risk management in the Ecology, Energy and Services Division (EES) and Home Interior Division (HI)
Risk management in the Ecology, Energy and Services Division (EES)
Risk management in the Ecology, Energy and Services Division has been presented in detail in annual reports of individual Group companies that belong to the EES Division.
Risk management in the Home Interior Division (HI)
Risk management in the Home Interior division mentioned has been presented in detail in the annual report of the company Gorenje Notranja Oprema, d.o.o. Only the most important risks to which the Home Interior Division is exposed will be presented, as well as the risks that have an impact on the holding company or the Gorenje Group.
Business risks
As for the business risks, full attention was directed to purchase risks in the Home Interior Division. The global and financial crisis increase unpredictability and fluctuations in prices of input materials. Costs of materials of the Division are chipboards of all types that have a major impact on all important production factors (costs, quality, smooth course of the production and others).
Suppliers of chipboards are organised as a cartel and carry out a harmonised price policy. Price competitiveness is also limited in space and time since the materials cannot be exposed to long transport. Risks are controlled by the involvement of all suitable suppliers in our purchase chains, which results in the achievement of optimal prices and smooth deliveries. The Management Board of the Gorenje Group has assessed that the exposure to purchase risks is moderate.
An important field in scope of business risks is also human resources risks. The volume of orders stabilised in the previous year, but cost optimisation still dictates certain reductions in employees. This requires continuation of the social dialogue in increases the risks mentioned. For the purpose of decreasing the human resources risks increased emphasis is put on a proper and due informing of the employees.
The Management Board of the Gorenje Group has assessed that the exposure to human resource risks is moderate.
Financial risks
Due to the serious macro-economic conditions, undivided attention was directed to credit risks, which include all risks where economic benefits of the company may decrease due to non-fulfilment of contractual obligations of business partners. The exposure to credit risks is controlled by the same measures as in the holding company.
The Management Board of the Gorenje Group has assessed that the exposure to credit risks is moderate.
Liquidity risk is mostly associated with the negative profit or loss of the Home Interior Division. To a great extent, this risk is eased by optimal current asset management. Current operation of the Home Interior Division has been financed also by the holding company Gorenje d.d., which means that the liquidity risk is transferred also to it.
The Management Board of the Gorenje Group has assessed that the exposure to the liquidity risk is moderate.
Operating risk
Within the production risks, much attention was devoted to the operation of key equipment, operation of infrastructure including smooth supply with energy products, and provision of infrastructural adequacy of hazardous waste management.
Production risks are higher for production lines which, in our case, refers to ceramics production. It has been controlled by good qualification for work of the employees and regular maintenance of production lines. Risks in the field of hazardous waste management have been limited by constant control, prevention and employee training. The Management Board of the Gorenje Group has assessed that the exposure to production risks is moderate.
Risks associated with the provision of availability and responsiveness of the IT system, depending on hardware and software, are relevant among information systems risks. Exposure to these risks has been controlled by:
- gradual introduction of uniform information system for all programmes,
- preliminary prepared measures for individual types of disturbances in the operation of the local computer network, supporting servers, global communications and network connections in the system,
- planning of procedures viz. actions at the time of failure of the information support,
- regular archiving of data,
- regular maintenance of software and hardware and communication and network connections,
- control of changes in the development of information systems, and
- suitable training of employees and other measures.
The Management Board of the Gorenje Group has assessed that the exposure to the information system risk is moderate.