The purpose of Salcomp's risk management is to identify the risks and possibilities that may have an impact on the implementation of Group strategy. The aim of risk management is to support the achievement of goals set out in the strategy by ensuring that the Group's risk-taking activities are in proper equilibrium with its risk-bearing capacity.
Salcomp's values, strategic choices and long-term financial goals form the basis of its risk management.
Salcomp's Board oversees the Company's risk management. It accepts a risk management strategy, which determines its risk-bearing capacity and risk-taking principles, as well as risk management principles. The risk management strategy also details the Company's business risks, risk management functions, responsibilities and organization, risk management processes and risk management control. The Management Team is responsible for organizing and overseeing the risk management process in day-to-day operations. However, the Board of Directors recognizes that it retains the ultimate responsibility for risk management.
The Management Team regularly monitors the key financial figures and indicators on operations. Significant deviations from the budget or forecasts are reported to and handled by the Board. The Board monitors the risk management process, with risk management issues regularly being reported to the Board.
At Salcomp, a separate risk management function has not been established. Instead, risk management has been made an integral aspect of the business process.
Risk management and process development is primarily based on business requirements. The Group aims to prevent risks by developing processes and personnel skills. As far as possible, decision-making, implementation and monitoring are kept as separate entities within the risk management and process development.
Risks
Salcomp has adopted a holistic approach to risk management. Risk has been defined as any internal or external threat or uncertainty that can prevent or jeopardize operations and the achievement of goals. Risks are categorized as strategic and business risks or financial risks. Further information on financial risks and their management can be found on pages 68–71 of the Annual Report 2007.
Risks related to the achievement of strategic goals and the implementation of company strategy are studied and analyzed annually as part of the strategic process, and whenever deemed necessary. At the same time, changes that have taken place or are expected to take place within the business environment and the competitive situation, are evaluated together with their possible effects on the implementation of the strategy.
The most significant operational risks at Salcomp are related to the general development of the mobile phone market, the everincreasing competition, standardization of the charger technology, dependence on key customers, business activities in the developing market, price development in raw materials and components, as well as the availability of professional personnel and management.
The major risks