Annual Report Gorenje Group 2009

Information system risks are related to the assurance of availability and response of the information
system (hardware and software). The exposure to these risks has been reduced by the introduction of
the SAP information system to all the companies in the Household Appliances Division and besides
that by:
• measures for individual types of disturbances in the operation of the local computer network,
supporting servers, global communications and network connections in the system prepared
in advance,
• operation of the centre for continuous operation or safe secondary locations (i.e. Disaster
Recovery Center - DRC),
• changes in the architecture of server systems (server virtualisation),
• BCM (business continuity management) process control and the related measures,
• regular maintenance of hardware and software, communications and network connections,
• regular archiving of data,
• planning of actions at the time of information support failure,
• control of changes in the development of information systems.
Organisational changes are associated with non-observing of rules and regulations. Managers or
heads play the key role in the control of these risks since they have to provide compliance of
authorisation and responsibilities of individual employees in co-operation with the Organisation
department. The Gorenje Group would like to encourage innovativeness of the employees by such
procedures and therefore we avoid excessive automation.
Logistic risks are associated with the increase in transport costs of products. Supply and demand are
most important factors influencing prices of sea transport, but oil prices influence road transport to a
maximum extent. Contracts with suppliers include the possibility of a change in transport price upon
changes in oil prices. These risks are assessed under consideration of the movement of oil prices and
prices of sea transport.
Tax risks are associated with potential changes in tax legislation, its implementation and provision of
administrative conditions. The basic control measure is consistent following of regulations of tax
legislation, monitoring of tax and legal practice, establishment of internal control mechanisms and
intensive co-operation among the departments in the Group companies, etc. Transfer prices related to
the operation of subsidiaries are co-ordinated at the Group level.
Fire risks have been limited by regular assessment of fire danger on the basis of which all facilities
have been equipped by active fire protection systems, the supervision over the performance of fire
protection measures has been intensified, and the employees have been additionally trained in the
area of fire protection.
PURCHASING
The prices of raw materials have achieved one of the greatest increases on stock exchanges in the last
decades in spite of the reduction in world economic activities in the year 2009. At the beginning of the
year the decrease of the year 2008 continued and reached the bottom in March 2009. A significant
turning point came and led to strong growth of raw material prices on stock exchanges and the trend
marked by some periodic negative corrections continued to the end of the year.
The early recovery of raw material prices was surprising with respect to the crisis economic conditions.
The growth at the annual level strongly exceeded the recovery of the economy and changes in real
factors of raw material trading (offer, inquiry, inventories, capacities and similar).
The main reason for such development of events is probably speculative purchases of financial
investors that were based on optimism that the state fiscal and monetary incentives would lead to quick
recovery of the world economy. The increase in raw material prices was additionally driven by the
decrease in the US dollar value, large inflows of money to financial markets, record import from China
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Annual Report Gorenje Group 2009