Page 130 - KELAG Annual Report 2017

(banks) are carried out only if they have a corresponding
credit rating and an associated available credit limit.
There are risks from the incentives regulation system in the
regulated electricity and gas grid segment. The risk that the
In the case of the company, derivative financial instruments
regulator might fail to factor in existing cost positions when
constitute commodity forwards relating to energy
setting charges is mitigated by means of active regulatory
(electricity and gas) as well as an interest hedging
and cost management.
instrument.
In the other areas of business (production, trading, sales
and heat), legal and regulatory risks stem from government
intervention, such as the introduction of new duties and
fees or the increase of existing duties and fees, and from The Group’s activities are subject to a number of
changes to market models that restrict business activities. increasingly strict legal requirements aimed at protecting
human life, health and the environment. In addition to
increasingly restrictive regulations, there is a related
financial risk for compliance with the required measures.
Investment decisions are based on the investment and
M&A guideline that defines clear profitability and risk
criteria. Observance of high standards for implementing
investments serves to keep technical risks to a minimum. Some of the risk management activities are also dedicated
to the identification and management of legal risks. To this
end, a group-wide compliance system was implemented in
cooperation with an international law firm. This system
ensures that the probability of legal infringements by
Equity investment risks result from potential fluctuations in
employees of the Group is kept as low as possible. The
earnings from investees. Targeted equity investment
compliance system thus serves to protect both the
management in accordance with the guidelines (early
company as well as every individual employee, while
warning indicators and ongoing monitoring and reporting)
making a contribution to safeguarding the business value
is used to mitigate the risk. If impairment testing of the
in the long term.
carrying amounts of equity investments results in the need
for write-downs, impairment losses are recognised
The compliance management system of KELAG and its
accordingly.
subsidiaries (KI-KELAG International GmbH, KNG-Kärnten
Netz GmbH and KELAG Wärme GmbH) should be conducive
to a greater awareness of employees and managers of legal
risks and has been certified since 2014 in accordance with
Interest rate and currency risks are mitigated using an ONR 192050 in the risk areas of anti-corruption law, data
adequate internal control system for all financial products protection legislation, anti-trust law, unfair competition,
used. Austrian Federal Act Against Unfair Competition
[“Bundesgesetz gegen den unlauteren Wettbewerb” (UWG)]
The risk of counterparty default is reduced by written and procurement law. In the course of the annual
regulations for Treasury. Transactions with counterparties surveillance audit performed by the independent