ANNUAL REPORT 2008 - Gorenje Group

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60 2008 3.10.2 FINANCIAL RISK MANAGEMENT Financial risk control has pursued the internal financial policies including the starting points for efficient and systematic management of financial risks. The exposure and measures for hedging against them have been taken; it has been judged on the basis of effects on cash flows. Suitable hedging activities have been carried out in scope of ordinary activities in the operating, investing and financial areas. FINANCIAL RISKS: credit risks; currency risks; interest rate risks; liquidity risks. Due to the increasingly difficult macro-economic situation the attention paid to credit risks has been concentrated and includes all risks reducing the economic benefits of the company due to unsettlement of contractual obligations of business partners (customers). The control of exposure by the sets of measures: • security of the major part of operating receivables against credit risks with the Slovene Export Company (Slovenska izvozna družba – Prva kreditna zavarovalnica, d.d., and other insurance companies. • Additional security of more risky receivables due from customers by mortgages, bank guarantees, and other security instruments. • Regular control of operation and financial position of all new and existing business partners and limiting of exposure to individual business partners. • Joint and chain offset with customers. • Systematic and active control processes of credit overdrafts and collection of receivables. The management board of the Gorenje Group has assessed that the exposure to credit risks is moderate due to the measures mentioned. The Group is greatly exposed to currency risks due to the geographic diversification of operation, where the economic benefits of the company may decrease due to changes in the exchange rate of an individual currency. The exposure of cash flows and balance sheet has been considered in the valuation of risks. These risks are high in the markets of Serbia, Great Britain, Czech Republic, Slovakia, Poland, Hungary, Croatia and in all US $ markets. Regardless of the measures taken the management board of the Gorenje Group has assessed that the exposure to currency risks is high due to relevant macro-economic changes and fluctuations of mostly East- European currencies. Great attention has been devoted to interest rate risks reducing the economic benefits of the company due to a change in total interest rates in the market. The hedging scope has reduced and the share of fixed interest rates and derived financial instruments accounts for 37.6 % of credit portfolio of the Group at the end of the financial year 2008. The management board of the Gorenje Group has assessed that the exposure to interest rate risk is high. Liquidity risk includes risks associated with the lack of financial resources available and consequently the inability of the company to settle its liabilities in the term-limits agreed. The financial liabilities of the Gorenje Group amounting to EUR 278 million mature in the year 2009 and therefore discussions with banks relating to the re-financing of the existing financial liabilities started in the last quarter of the year 2008. Thus the refinancing risks reduced. A liquidity reserve amounting to EUR 76.6 million including unused revolving lines and cash of the Group in banks provides short-term regulation of cash flows and reduces short-term liquidity risks. The risk of short-term liquidity of the Group has been assessed as increased due to efficient cash management, appropriate credit lines available for short-term cash flow regulation, high financial flexibility and good access to financial markets and resources. The reason for the increased risk is the reduction in financial resources available from business partners (customers and suppliers). A long-term liquidity risk as a consequence of successful operation, efficient asset management, sustained ability of generating cash flows from operating activities and suitable equity structure has been assessed as moderate. The management board of the Gorenje Group has assessed that the exposure to the liquidity risk is moderate.
61 3.10.3 OPERATING RISK MANAGEMENT Operating risks include a reduction in economic benefits of the Group arising from the ability of unsuitable planning, performance and control of business processes and activities. OPERATING RISKS: production risks; information system risks; fire risks; tax risks. Control of production risks: • operation of key equipment: key machines, tools, production lines and units for material processing, • operation of infrastructure including smooth supply with energy sources, provisions of infrastructural suitability of environmental management with hazardous substances, operation of the central waste water treatment plant, • availability of production capacities and • inadequate direct management of hazardous substances. The management board of the Gorenje Group has assesses that the exposure to product risks is moderate. Risks related to the assurance of availability and response of the information system services depending on hardware and software are relevant among the information system risks. The control of risk exposure includes: • gradual introduction of SAP - uniform information system to all companies in the household appliances division, • measures for individual kinds of failures in the operation of the local computer network, supporting servers, global communications and network connections in the system prepared in advance, • operation of the Disaster Recovery Centre – DRC, • changes in the architecture of server systems (server virtualisation), • planning of actions at the time of information support failure, • regular maintenance of software and hardware, communications and network connections, • control of changes in the development of information systems, • appropriate training of employees and other measures. The management board of the Gorenje Group has assessed that the exposure to information system risks is moderate. 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. The management board of the Gorenje Group has assessed that the exposure to fire risks is moderate.
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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
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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 and 58: 57 3.9 FINANCIAL MANAGEMENT The uni
Page 59: 59 Sales risks are associated with
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.,
Page 108 and 109: 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
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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
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175 Interest rate risk The Company
Page 177 and 178:
177 Information on groups of person
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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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