NWG Annual Report 2019 - EN NWG Annual Report 2019 - EN | Page 62
NWG // FINANCIAL INFORMATION
employees, 588 (604) work in production.
The production within the New Wave
Group is attributable to AHEAD
(embroidery), Cutter & Buck (embroidery),
Dahetra, Kosta Boda, Orrefors, Paris
Glove, Seger, Termo and Toppoint.
There is no specifically appointed
remuneration committee for the mana-
gement of salary levels, pension benefits,
incentive matters, and other terms of
employment for the CEO as these issues
are addressed by the Board as a whole. The
terms of employment for other members of
Group Management are decided on by the
CEO and Chairman of the Board.
Shown below are New Wave Group’s
guidelines for compensation to senior
executives. The guidelines have been
applied during 2019 and up to the annual
general meeting 2020:
# # Remuneration to the Group CEO
and other members of Group mana-
gement comprises fixed salaries at
competitive market rates
# # There shall be no special fee for
Board work in Group companies for
senior executives
# # Variable remunerations such as
bonuses may be paid when this
is justified in order to be able to
recruit and maintain key staff so
as to stimulate improvements in
sales and profits as well as the work
involved in achieving specific key
figures set by the Board. Variable
remunerations shall be based
on predetermined, measureable
criteria such as performance of
New Wave Group or return on
equity compared to fixed targets.
The variable remuneration shall
not exceed 50 % of the fixed remu-
neration. Total yearly cost for the
performance-based remuneration
cannot exceed SEK 10 million
# # The Board shall in respect of each
financial year consider whether
a share or share price related
incentive program which covers the
year in question shall be proposed
to the AGM or not. The AGM makes
the final decision regarding such
incentive programs
062 // ANNUAL REPORT
# # Pension benefits shall be equi-
valent to an ITP plan or, for senior
executives outside Sweden, pension
benefits which are standard in the
relevant country
# # A mutual notice period of no more
than six months and no severance
pay shall apply for all senior execu-
tives
The Board may deviate from the
proposed guidelines above in individual
cases if there are specific reasons to
do so.
No deviations have been made from
the guidelines during the current year.
For the AGM 2020, the Board has
prepared a proposal for new guidelines for
compensation to senior executives. These
guidelines can be found on pages 124-125.
Related party
transactions
Lease agreements exist with related
companies. Associated companies to the
CEO have purchased merchandise and
received compensation for consultancy
services performed. In addition, there
are transactions with related parties at
immaterial values. All transactions have
been made on market terms. For further
description, see note 18.
Risks and risk
management
New Wave Group’s international opera-
tions mean that it is continuously exposed
to various financial risks. The financial
risks are interest rate risks, currency
and liquidity and credit risks. In order to
minimize the effect these risks may have
on earnings, the Group has a financial risk
policy.
The Group’s policy is to have short
fixed-rate interest periods, which means
that fluctuating short-term interest rates
have a rapid impact on the Group’s net
interest income.
A significant portion of New Wave
Group’s sales are made in foreign currency
(77%). The Group is exposed to changes
in exchange rates in the future flows of
payments related to firm commitments
and to loans and investments in foreign
currencies, i.e. transaction exposure. The
Group’s financial statements are also
affected by translating the results and net
assets of foreign subsidiaries into SEK, i.e.
translation exposure.
Due to the relatively capital-intensive
nature of its activities and its expansive
growth strategy, New Wave Group has a
need to secure its funding. For a growth
group like New Wave Group it is essential
to ensure that sufficient liquidity is avai-
lable to fund future expansion and that
there is a high degree of flexibility when
acquisition opportunities occur. It is also
important that a sound balance between
equity and financing through debt is kept,
as New Wave Group’s goal is to achieve an
equity ratio in excess of 30 %.
The Group is exposed to credit risk
from its operating activities, primarily
accounts receivable, and from its financing
activities which include deposits at banks
and financial institutions, currency
futures and other financial instruments.
The Group’s total exposure to credit risk
amounted, at year-end, to SEK 1,625.8
(1,485.2) million.
For a more extensive description of
the Group’s risk exposures and risk mana-
gement see note 17.
Environment
New Wave Group has a responsibility to
ensure that our business operations, and
the business operations of our suppliers,
respect the legal provisions of different
countries, as well as basic human rights
and working conditions. New Wave
Group works systematically with regard
to supplier auditing, monitoring, and
dialogue in order to ensure that our
business operations are conducted in the
most responsible manner possible with
regard to people and environment.
New Wave Group understands how
our business operations are so closely