Упрощенная HTML-версия
Key Risk Factors
RISKS CONNECTED WITH PRODUCTION ACTIVITY OF
THE COMPANY
Risks connected with production activity of the Company
may include personnel risk (lack and loss of qualified
personnel).
In order to minimize personnel risk, Motor Sich JSC has
developed some programs on free professional
development of employees, as well as on free training of
future workers of the Company at higher education
establishments. MOTOR SICH JSC has developed system
of social benefits, motivation and encouragement of
employees. These actions allow leveling of personnel risk,
providing necessary working atmosphere and
prerequisites for improvement of labor discipline and
employee professionalism level in whole.
In order to reduce risk of information leakage, the
Company takes some preventive actions among which
are: availability of information security system,
implementation of preventive measures, detection of
violations, introduction of security system against
unauthorized duplication of information.
To minimize risk of partial or complete suspension of
production, Motor Sich JSC carries out qualitative
personnel policy, provides necessary conditions for
meeting all regulating requirements on labor safety.
FINANCIAL RISKS
Credit risk
is connected with increase of interest rates on
credit, as well as demand of preschedule repayment of
principal debt and interest charges.
The following factors helped to minimize credit risk:
n
thorough selection of banks based on the image and
stability of financial institution;
n
analysis of credit terms and conditions that allowed for
reduction of interest rates under credit agreements, as well
as expenses on credit maintenance;
n
constant control of the Company’s financial state, its
ability and readiness to repay the credit that allowed for
reduction of the Company’s overall credit indebtedness.
Currency risks
are connected with adverse changing of
currency exchange rate. Hryvnia’s exchange rate variability
in relation to foreign currencies resulted in currency risk
increase as generally MOTOR SICH JSC activity is oriented
to external suppliers. There are a number of methods to
minimize currency risk. One of them is diversification of
cash flows on the settlements with external suppliers, as
well as attraction of borrowed funds in foreign currency.
These methods are used byMOTOR SICH JSC, that allowed
leveling of currency risks and optimizing of cash inflows in
foreign currency.
Liquidity risk
is the situation when the Company can’t
settle accounts for liabilities at a stated time, first of all it
is connected with insufficient quantity of high liquid
assets (cash funds) at the Company. To minimize liquidity
risk the Company carries out operating control of levels
of current and instant liquidity, as well as keeping them
at sufficient level by means of optimal financial resources
allocation.
Inflation risk
Inflation risk is characterized by possibility of depreciation
of the real cost of capital (in form of financial assets of the
Company), as well as the expected profits and income of
the Company from financial transactions in conditions of
inflation. The source of this risk is an external environment
in relation to the Company, id est risk that does not depend
on its activity.
The following methods were used to minimize negative
influence of inflation risk upon activity of Motor Sich JSC:
59
annual report
2013