ANNUAL REPORT 2008 - Gorenje Group

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58 2008 3.10 RISK MANAGEMENT The risk management council carried out activities for detection and re-definition of individual types of risks that the Gorenje Group is exposed to. Three committees operate with the risk management council: business risk committee, financial risk committee and operation risk committee. Risk detection has been evaluated by the size of influence on the result and assessment of probability for the occurrence of influence and exposure to individual risks by additional criteria which has enabled the preparation of proposals and taking of measures for risk management. Individual risks were joined in groups and classified into a strategic risk map. The risk management council directed and co-ordinated the hedging activities and risk reduction to a business reasonable and acceptable level. Strategic risk map Size of Damage Probability TYPE OF RISK small moderate high very high high medium low very low 1. Business risks 1.1 External risks 1.2 Sales risks 1.3 Purchase risks 1.4 Product risks 1.5 Development risks 1.6 Human resources risks 1.7 Property loss risks 2. Financial risks 2.1 Credit risks 2.2 Currency risks 2.3 Interest rate risks 2.4 Liquidity risks 3. Operating risks 3.1 Production risks 3.2 Information system risks 3.3 Fire risks 3.4 Tax risks 3.10.1 BUSINESS RISK MANAGEMENT Business risks are classified as risks associated with the ability of provision of short-term and longterm generation of operating revenue, control of business processes and maintenance of asset value. BUSINESS RISKS: external risks; sales risks; purchase risks; product risks; development risks; human resources risks; property loss risks External risks are mainly associated with the changes in macroeconomic conditions of operation in individual key markets. The exposure has been greatly increased due to the beginning of the global financial crisis, versatility and complexity of business activities. The management board of the Gorenje Group has assessed that the exposure to such risks is extremely high in individual markets.
59 Sales risks are associated with the competition in the sale of products and services in individual markets and include risks of appropriate marketing strategy (brand name, price and functional competition of products, design etc.), risk of increasing negotiating power of major industrial customers and trade chains and risk of quality of after-sales services. The management board of the Gorenje Group has assessed that the exposure to such risks is moderate and will be very high in the following year. The financial crisis and recession have increased unpredictability in raw-material markets, and daily fluctuations on stock exchanges have reached a two-digit percentage. The measures for the decrease in exposure to purchase risks have been adjusted accordingly. Forward purchases of metals have changed from long-term ones into short-term ones and instead of hedging against the increase purchasing is carried out currently. Long-term partnerships have remained the strategic advantage of purchasing, but exclusively on competitive bases. Hedging measures against purchase risks are also derived financial instruments for raw materials. The development of supply sources in the LCC markets has continued and these are mostly US $ areas by which natural hedging of sales in $ has been provided. In spite of the concluded hedging and the anticipated slow-down of the global economy, and reduction in prices of raw materials in world stock exchanges, the management board of the Gorenje Group has assessed that the exposure to purchase risks is moderate. Product risks have been focused on the control of risks that may lead to incorrect operation of appliances in the market and finally to a mass failure or product responsibility of the producer. Risks are limited by suitable development systems and quality assurance in scope of production, sales and after-sales processes and additionally by the insurance of product liability. A quality management system in accordance with the requirements of SIST EN ISO 9001/2000 and the system of accredited methods under ISO 17025 and the six sigma quality management system have been established. The use of the new program for the SAS cancellation analysis shortens the time to detection of any possible cancellations and limits costs arising from serial failures. The management board of the Gorenje Group has assessed that the exposure to product risks is moderate with respect to the measures mentioned. Risks associated with the achievement of the planned economic of investments, successful activation of investments in the development of new product generation and successful introduction of new technologies are of key importance among investment and development risks. Thereby appropriate planning and control of investment effects is relevant. Risks related to the introduction of new generations and new technologies have been reduced in the preparation project phases by exact preparation of business plans, in the implementation phases by systematic, active project approach where achievement of the objectives set has been regularly monitored as well as the definition of the corrective activities in case of deviations. In spite of all activities reducing the exposure to the risk the management board of the Gorenje Group has assessed that the exposure to investment and development risks is high due to unforeseeable changes in the business environment influencing the reliability of planning. The reduced scope of orders and thus the reduced scope of production dictates a decrease in the number of employees and reduction in labour costs tightening the conditions for a social dialogue and increases human resources risks. Great attention has been now paid to adequate and timely informing, answers to questions and unclear issues that the employees discuss in relation to the reduction of employees, healthy working environment relating to the problems of leaving of quality employees and experts. The management board of the Gorenje Group has assessed that the exposure to human resources risks is moderate due to the activities mentioned. Property loss risks are related to the control of property and transport risks where the Group companies systematically transfer key property risks to insurance companies or business partners and thus reduce the exposure to such risks. The management board of the Gorenje Group has assessed that the exposure to such property loss risks is small.
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ANNUAL REPORT 2008
Page 3 and 4:
LETTER OF THE PRESIDENT OF THE MANA
Page 5 and 6:
5 A review of the operations of man
Page 8 and 9: 8 2008 KEY ACHIEVEMENTS OF THE GORE
Page 10 and 11: FINANCIAL HIGHLIGHTS OF THE GORENJE
Page 12 and 13: 12 2008 EVENTS IN 2008 BUSINESS ACT
Page 14 and 15: 14 2008 REPORT OF THE SUPERVISORY B
Page 16 and 17: 16 2008 The Annual Report of Gorenj
Page 19 and 20: CORPORATE GOVERNANCE
Page 21 and 22: 21 • On 16 January 2008, Gorenje,
Page 23 and 24: 23 Gorenje Budapest Kft., Hungary 1
Page 25 and 26: 25 members of the Management Board,
Page 27 and 28: 27 d. On the Company’s rules on t
Page 29 and 30: 29 of the Management and Supervisor
Page 31: 31 1.3 STATEMENT OF MANAGEMENT RESP
Page 34 and 35: 34 2008 Owing to the intensively ch
Page 37 and 38: BUSINESS REPORT
Page 39 and 40: 39 SLOVENIA • Considerable slowdo
Page 41 and 42: 41 3.2.1 HOME APPLIANCES DIVISION 3
Page 43 and 44: 43 AUSTRIA SCANDINAVIA • Rapid gr
Page 45 and 46: 45 BUSINESS OPERATION OF ATAG EUROP
Page 47 and 48: 47 ENERGY • Sales revenue doubled
Page 49 and 50: 49 3.4 PURCHASING Raw material mark
Page 51 and 52: 51 included a connection to the nat
Page 53 and 54: 53 The appliances have been classif
Page 55 and 56: 55 3.7 PRODUCTION The majority of p
Page 57: 57 3.9 FINANCIAL MANAGEMENT The uni
Page 61 and 62: 61 3.10.3 OPERATING RISK MANAGEMENT
Page 63 and 64: 63 3.11 CREATING VALUE FOR SHAREHOL
Page 65 and 66: 65 3.12 BUSINESS PLAN AND ANTICIPAT
Page 67 and 68: 67 3.13 REPORT ON SOCIAL RESPONSIBI
Page 69 and 70: 69 3.13.2 RESPONSIBILITY TO USERS O
Page 71 and 72: 71 The Kemis Group has co-operated
Page 73 and 74: 73 Costs of goods, materials and se
Page 77 and 78: ACCOUNTING REPORT
Page 79 and 80: 79 Consolidated balance sheet of th
Page 82 and 83: 82 2008 Consolidated statement of c
Page 84 and 85: 84 2008 4.1.1.2 NOTES TO THE CONSOL
Page 86 and 87: 86 2008 (ii) Foreign operations The
Page 88 and 89: 88 2008 tributable to bringing the
Page 90 and 91: 90 2008 or services or for administ
Page 92 and 93: 92 2008 (i) Warranties A provision
Page 94 and 95: 94 2008 that are expected to be app
Page 96 and 97: 96 2008 4. Determination of fair va
Page 98 and 99: 98 2008 hedging of currency risk an
Page 100 and 101: 100 2008 East Europe: Ukraine, Russ
Page 102 and 103: 102 2008 9. Minority interest Minor
Page 104 and 105: 104 2008 The calculation of goodwil
Page 106 and 107: 106 2008 Gorenje Imobilia, d.o.o.,
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108 2008 GEN-I Zagreb, d.o.o. in TE
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110 2008 Other employee benefits ex
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112 2008 and projected on the basis
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114 2008 Movement of intangible ass
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116 2008 Movement of property, plan
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118 2008 Both deferred tax assets a
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120 2008 Net profit or loss is dist
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122 2008 Note 35 - Current financia
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124 2008 Liquidity risk Shown below
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126 2008 31 December 2007 in TEUR N
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128 2008 A portion of hedged items
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130 2008 Note 42 - Business segment
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132 2008 4.1.1.3 POROČILO REVIZORJ
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134 2008 Gorenje Gulf FZE, United A
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136 2008 Gorenje kuhinje, d.o.o., U
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138 2008 Cash flow statement of Gor
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141 Share premium Legal and statuto
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143 (b) Financial instruments (i) N
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145 is based on an independent appr
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147 and work in progress, cost incl
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149 bates. Revenue is recognised wh
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151 The amendments to IFRS 2 are no
Page 153 and 154:
153 The exposure to each type of ri
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155 6. Segment reporting Segment in
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157 Other finance income mostly rep
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159 Note 16 - Property, plant and e
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161 Note 18 - Investments in subsid
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163 Note 20 - Deferred tax assets a
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165 Trade receivables - Group compa
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167 Own shares in the amount of TEU
Page 169 and 170:
169 Maturity of non-current financi
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171 Payables to other suppliers in
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173 31 December 2007 in TEUR Carryi
Page 175 and 176:
175 Interest rate risk The Company
Page 177 and 178:
177 Information on groups of person
Page 179 and 180:
179 • the cost management of raw
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181
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183 ATAG Europe BV Managing Directo
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185 KEMIS, kemični izdelki, predel
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187 Istrabenz Gorenje projekt, svet
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189 Gorenje Bulgaria EOOD Managing
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191 REPRESENTATIVE OFFICES Gorenje,
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ANNUAL REPORT 2008 - Gorenje Group

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