Risk factors and threats
Recognizing the importance of risk management in attainment of strategic objectives, in 2017 the Group continued to apply a formalized ERM risk management system. The main purpose of the system adopted and implemented by the Group is to identify potential risk factors and events that may have an adverse impact on the Group.
The Group has in place a comprehensive enterprise risk management system which comprises the Enterprise Risk Management Policy and Procedure (updated in 2017). The amended documents cover risk management issues throughout the Group. Work is currently underway to identify strategic risks arising from the operations conducted by the Group members. The Enterprise Risk Management Policy and Procedure in place describe a systemic approach to risks which covers the key risks occurring in the Group’s business and satisfies the highest ERM standards, thereby contributing to strengthening the Group’s reputation on the market.
Enterprise risk management process
Mindful management of existing threats and opportunities enables the Group to protect its attained value and improve its ability to add extra value. Enterprise risk management is a continuous process and is subject to modifications driven by the changing business environment, the Group’s operations and changes in the impact of specific risks on the Group’s business objectives. Risk management occurs in all links of the organizational structure and in all areas of operations, including: operational, strategic, financial, commercial, and legal and regulatory.
The information prepared about potential and changing threats in the Group is reported regularly to members of the Management Board, Audit Committee and Supervisory Board and to stakeholders. At a later stage, control works are carried out, involving verification and assessment of the consequences of the actions taken and introduction of adjustments to the risk management process, in order to improve its efficiency.
A planned and regular approach to risk management results in the identification of key risks. Below the report presents the risks that have a high potential impact on the Group’s operations, its performance and financial standing and may simultaneously cause its value and share price to fall. Consequently there is a strong need for monitoring and periodic verification of the effectiveness of the existing control mechanisms and response to the risks.
The risks described below are the only factors to which the Group is exposed. Additional risk factors, which are currently unknown, or which are currently believed to be immaterial may also have a material and adverse effect on the Group’s operations, its financial performance and financial standing.