Compliance risks

Risks related to changes in EU and tax laws

The EU legal regulations which affect the paints and varnishes industry are constantly becoming more severe and complex. This applies in particular to Śnieżka Group products certified as ecological products.

In order to prevent this risk, the Group constantly monitors legal changes by:

implementing an internal report on legal changes;
related action plans to be undertaken,
monitoring the implementation of recommendations.

In addition, the Group conducts research and development work to adapt the technological process to dynamic regulatory updates.

There is also a risk related to differences in the interpretation of tax regulations. Despite observing by the Group both domestic and EU legal regulations in the field of accounting, tax information included in tax returns and declarations may be considered by the Polish tax authorities to be unlawful. If the tax authorities adopt a different tax interpretation than the one applied by the Group to calculate the tax liability, such a situation may have a material impact on the Group’s financial results.

Risks related to other activities affecting the Group’s reputation

In the group of risks related to other activities affecting the Group’s reputation, the risk of corruption events, the risk of violations, including: the risk of violations of the law or internal policies and procedures, violations of consumer and competition law, and discrimination and mobbing, as well as the risk related to crisis communication management, have been identified.

In order to minimise the risk of potential violations of the law or internal policies and procedures, the Group has implemented internal reporting procedures and made anonymous channels for raising concerns available in all key Group companies, i.e. Śnieżka SA, Śnieżka ToC, Poli-Farbe and Śnieżka-Ukraina. Moreover, the employees of the said companies are regularly trained in the field of internal reporting and are provided with procedures and educational materials in this respect.

Śnieżka Group deters the materialization of corruption risks. The principles it is driven by are regulated in the Anti-Corruption Policy. The document provisions have been communicated to the Group’s employees. In addition, in order to counteract the occurrence of corruption incidents in purchasing processes, the Group has implemented a Procurement Policy and Supplier’s Code of Conduct.

The Group counteracts the risk of incidents of mobbing or discrimination through a developed and implemented mobbing prevention procedure. The Group’s parent company, FFiL Śnieżka SA and Śnieżka ToC, have established an Anti-Mobbing Committee, and the Company organizes anti-mobbing and anti-discrimination training for employees.

The Group is aware that the scale and complexity of its operations involve the risk of events requiring crisis communication. An interdisciplinary Rapid Response Team operates within the Group whose tasks include anti-crisis management related to reputation. This effectively minimizes the risk in the area of crisis communication management.

Operational risks

IT risk – cyber threats