Corinth Pipeworks ensures effectiveness and efficiency of its operations and programmes, reliability and integrity of financial and operational reporting and compliance with applicable laws and regulations through its Internal Auditing System. Corinth Pipeworks targets to maintain an effective Internal Auditing System in order to safeguard its assets as well as to identify, record, and address the key risks. In order to achieve this target, a qualified independent Audit Team supports and guides the Internal Auditing Department of Corinth Pipeworks.
 
Internal Auditing Department verifies the proper implementation of every procedure and internal audit system, regardless if it is accounting related or not and assess the Company through reviews of its operations, acting as a company unit reporting to the Management.
 
Corinth Pipeworks’ Internal Auditing Department conducts numerous audits during the year, examining the implementation of Corporate Responsibility policy, particularly addressing the issues of Environment and Health and Safety. The audit results are collected and submitted to the Company’s Board of Directors at least on a quarterly basis.
 
The Board of Directors of Corinth Pipeworks annually evaluates the internal auditing system. Evaluations are related to the scope of activities and effectiveness of internal auditing team as well as the adequacy of risk management. The Boards also takes into account the reports to the Audit Committee of the Board of Directors, as well as response and effectiveness of the Management in respect of identified errors or weaknesses in internal auditing system.
 
At the same time, the Company’s Internal Control system holds decisive role in effective risk management to which Corinth Pipeworks is exposed. The Internal Control System acts as an identification tool, which delineates, classifies and limits the risks. All corporate risks are related to the Company’s business activities, particularly significant, given that the nature of Corinth Pipeworks and its operations in numerous markets can expose it to various risks. Based on the precautionary principle, Corinth Pipeworks has developed practices and established mechanisms, through which it identifies records, evaluates and manages the risks associated with its operations, as well as its exposure to the markets, in which it operates, and the current economic environment. 
 
Corinth Pipeworks risk management general program aims at minimizing potential adverse effects on the financial performance of the Company and its operations. Risk management policies and related systems are periodically reviewed so as to incorporate the changes in market conditions and the Company’s activities. Corinth Pipeworks risk management policies are implemented in order to identify and analyze the risks faced by the Company, to establish the required limits of undertaken risks and implement appropriate preventive and corrective control procedures. Corinth Pipeworks' strategy is to evaluate, on the on-going basis, the effectiveness of risk management policies and to broaden risk monitoring. 
 
The risks, to which the Company is exposed given the nature of its operations, involve financial and business risks:
 
Financial Risks
The major categories of risk associated with Corinth Pipeworks’ operations are as follows:
  • Market risk (foreign exchange risk, interest rate fluctuation risk, products price fluctuation risk),
  • Credit risk (banks and customers),
  • Liquidity Risk,
  • Capital Risk.
Corinth Pipeworks has issued specific instructions for the purposes of addressing financial risks. The Financial Department implements the policy of managing such risks following the aforementioned instructions. Further information on financial risk management is presented in 2013 Annual Financial Report of Corinth Pipeworks, which is available on the Company website www.cpw.gr (section Investor Relations / Financial Results - Financial Reports).
 
Business Risks
The Company operates in energy sector, thus exposed to the increasing international competition observed in recent years. The business risks may arise due to potential decrease in capital expenditure for the large energy companies, as well as due to possible protectionism that exist for local producers. Furthermore, the fact that many core markets, as well as the cost structure of some major competitors are dollar based, in conjunction with a potential Euro appreciation, ceteris paribus, dictates a more aggressive pricing policy, that may lead to squeezed profit margins. Sales in the energy sector are, mainly, on a project basis, where both selling prices and cost of raw materials are fixed throughout the execution period.

In addition, freight cost, which is a major cost category for the Company, has been extremely volatile in recent years. In order to address this issue, the Company tries to conclude contracts on a project basis for a big part of its transportation requirements. However, in several cases, such practice is not feasible and therefore, chartering is on the spot market that may affect the profitability of the projects.


Apart from financial and business risks, Corinth Pipeworks has recognized environmental and occupational risks, as well as operational risks. In order to address such risks, Company has made investments during the past years aiming to reduce the probability of their occurrence.
 
In particular, Environmental Risk is defined as the Risk associated with air and pollution as well as climate change. Environmental Risk is assessed through the application of Environmental Indicators related to financial indicators in order to record the environmental risk in financial terms. Occupational Risk is defined as the Risks associated with health and safety of the employees from their exposure to any harmful factors of the working environment. Occupational risk is assessed through the application of the occupational risk indicators related to probability and / or frequency of exposure of the workforce to some source of exposure located in the workplace that may lead to serious consequences in terms of Company’s human resources.

The Company addresses potential impacts on environment and occupational Health and Safety of its people by:
  • conducting all the necessary risk assessments, required by the legislation,
  • applying strict criteria for operation in compliance with Greek and European legislation,
  • developing a comprehensive emergency response plan, 
  • closely collaborating with local authorities and Fire Protection Department to facilitate quick and effective response to potential incidents,
  • taking preventive measures to monitor the established relevant indicators (Quality, Environment, Health and Safety). These indicators are monitored on a regular basis and are disclosed to all the Company levels.
Operational risks are associated with production costs risks arising from climate change and natural disasters, as well as problems related with the Company’s internal procedures, labour relations, Company's systems and generally from any malfunction caused by the human factor.
 
In order to manage the operational risks, Corinth Pipeworks:
  • develops and implements comprehensive training programs on issues related to its operations,
  • conducts inspections at regular intervals,
  • develops policies and systems in respect of operation and organization, 
  • implements and monitors the extent to which the ethics regulations are implemented,
  • enters into agreements, aiming at the protection of the Company and / or reduction of its exposure to such risks,
  • collaborates with local authorities facilitate effective response to potential natural disasters.