Risk management

Risk management

In carrying out its activities, Draka is exposed to a number of business risks. The company’s risk management policy is aimed at sustainably controlling the different risks which (could) influence
Draka’s business in the long term and at limiting and where possible hedging those risks. Despite the attention devoted to these risks and the management and control procedures applied, risks can never be eliminated completely. They are an inherent part of doing business given the wide diversity of markets, customers and geographical areas in which Draka operates. Draka’s long term risks are limited by:

• the great diversity of the markets in which Draka operates (both geographically and in terms of clients);


• the fact that no client accounts for more than 6% of Draka’s worldwide sales;


• a widely spread group of suppliers;


• price movements in important raw materials (copper, aluminium and polymers) which can be passed on within a reasonable period;


• state-of-the-art process technologies, often developed in-house;


• informative, compliant and transparent reporting systems;


• the fact Draka’s interest-bearing debt consists for 77.9% of long term liabilities (4 years), with current liabilities accounting for 22.1% at the end of 2009;
and

• a highly skilled workforce.

Given the diversity of the markets, customers and regions served by Draka and the breadth of its portfolio of activities, it is virtually impossible to quantify all the risks that may be relevant to the Company as a whole. Where those risks can be measured, however, they will be quantified as accurately as possible. The risks described below do not comprise an exhaustive list, but are a selection of the most important risk factors.

• Operational risks
• Financial risks
• Risk management