AT&S World

Group Management Report 2010/11
112
mobile devices segment, AT&S has already consistently focused
on the high-end segment. In addition to smartphones and tablet
PC, this segment also includes other products such as game consoles,
digital cameras and portable music players and will continue
to be regarded as growth driver in the coming years. With
its capacities, manufacturing technologies and highest quality
standards, AT&S is able to globally service the most renowned
providers of these products worldwide. Uncertainties and opportunities
depend on the market development itself as well as
the extent to which the Company will be able to distinguish itself
successfully from competitors.
The industrial market is characterised by various technology
requirements from a variety of customers. Utmost flexibility
and the ability to adjust very quickly to changing specifications
and technologies constitute a basic requirement to be successful
in this segment. The Austrian plants of AT&S in particular are
very well prepared for these requirements to constantly advance
technologies and projects with the customers. In India, the possibility
exists to produce longer-term projects cost-effectively.
These special plant focuses, complemented by AT&S Korea for
the manufacture of flexible printed circuit boards, furthermore
additional demand potentials, for instance in medical technology,
present a comprehensive range of potential opportunites
for AT&S.
In the automotive segment, further opportunities for growth
arise for AT&S due to the growing electronic portion and the
demand for higher integrated systems and the more complex,
higher-quality printed circuit boards required for that. In one
of the most successful years of the global automobile industry,
AT&S in the reporting financial year managed to take the lead
among printed circuit board suppliers also in this market. Current
trend areas, such as security, information, environment and
the general worldwide desire for increasing mobility, provide
AT&S with further opportunities for growth also in this market.
The strong capitalization, the technological top position and the
positioning of AT&S through the combination of locations in
Austria and Asia are considered an advantage over competitors.
The European and the American market can be serviced by swift
production and short delivery terms of the Austrian plants as
well as low-cost production capacities in Asia. For the global
market, the Group has long years of experience in the HDI technology,
and the plant in Shanghai is not only the largest plant of
the AT&S Group, but actually the largest plant in China specializing
in HDI technology. As a result of the current extension of
the existing plants and the construction of an additional plant in
China (Chongqing) and, accordingly, additional capacities, ample
opportunities arise for sales and profit increases.
Regarding the use of financial instruments and the explanation
of the financial risk management, reference is also made to the
risk report in the notes to the consolidated financial statements.
With regard to currency risks, from the group perspective, the
impact on the operating result of AT&S was reduced by the fact
that, in addition to the dependence of sales on the US dollar, the
production capacities have also been established largely in the
extended US dollar area. Apart from residual effects on the financial
result, currency fluctuations of the functional currencies
in the Group against the reporting currency euro are recognized
mainly in equity. Not least due to the appreciation of the euro in
the fourth quarter, the designated maximum value of net gearing
of 80% was somewhat exceeded. After the current expansion
phase, the target value of 80%, however, is expected to be reached
or undercut again in the medium term.
7. Internal control system and risk management relating to
accounting
AT&S has adopted a code of ethics and conduct which sets out
how AT&S conducts its businesses in an ethical and socially responsible
manner. These guidelines apply to all activities worldwide,
with each employee being responsible to comply with this
code without exception in the performance of his profession and
the daily work. For certain regions, countries and functions, even
stricter and more detailed regulations may apply.
The accounting-related internal control and risk management
system is an integral part of the group-wide risk management
system. According to the framework concept of COSO (The Committee
of Sponsoring Organization of the Treadway Commission),
under the concept of company-wide risk management, the risk
management proper as well as the internal control system (ICS)
are subsumed. The main criteria of the risk management, the
internal control system and the internal audit in the AT&S Group
are specified in a company-wide risk management and audit
manual. Reference is also made to the disclosures in the notes
to the consolidated financial statements under “II. Risk report”.
In terms of organizational structure, a staff unit has been established
directly with the Management Board, which coordinates or
directs the risk management and internal control system across
the Group, as well as the activities of the internal audit. According
to the rules of procedure for the Management Board, the staff
unit reports to the Chief Financial Officer (CFO). Special areas of
responsibilities of the Supervisory Board’s audit committee also
include monitoring the effectiveness of the internal control system,
the internal audit and the risk management system, as well
as monitoring the accounting process. In addition to including
the audit committee in the accounting process in the quarterly