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1.3. The basic indicators of management of financial and operational risks in the company


Risks (Key Risk Indicator) it is accepted to name the basic (key) indicators of a management efficiency the limited set of key parametres which are used for tracing and diagnostics of results of activity on management of risks and the subsequent acceptance on their basis of administrative decisions.
Key indicators should reflect the most important information for management of concrete risks.
Key indicators (KRI) in numerical expression show, management actions in the most important for minimisation of risk directions are how much productive. Naturally, for different risks at various times and in different conditions these factors (and, hence, and risk indicators) will differ. Nevertheless, the analysis of practice of the successful companies indicates existence of some general stages and principles of creation of systems of key indicators of a management efficiency risks:
The first step on a way to working out of key indicators of a management efficiency by risk is accurate definition of managerial process by risk, the formulation of the problems facing to the company on its minimisation. It is necessary to find out, how fulfilment of those or other problems influences achievement of the purpose and as problems are connected among themselves;
Simplicity and clearness of system of indicators. The quantity of key indicators of efficiency should be extremely limited (1-3) on one risk. The small number of indicators (indicators) for each level of management allows to concentrate attention to most prominent aspects;

Key indicators of efficiency should be based on authentic data. If data are absent, it is necessary to create data collection system, or to revise system of indicators that they leant on existing data;
Concrete indicators will depend on specificity of the moment;
Indicators should be "operated", i.e. Responsible persons should influence largely size of an indicator within the functions;
Indicators should have potential stable prichinnosledstvennuju communication with other indicators reflecting level of given risk for the company.
At a choice of indicators the accent should be done on the maximum simplicity and convenience of account, and also quality and availability of primary data required for these purposes. The careful analysis of statistics of the previous periods both professional "scent" and experience of the expert (manager) is necessary.
The important stage of formation of key indicators on risks is technique working out on account of actual and target significances of indicators. In a technique the information on should contain in what detailed elaboration and on what objects of the account account of actual values on each indicator should be made. Detailed elaboration degree is dictated by concrete requirements of systems of a running control of activity of divisions.
Monitoring of actual performance of key indicators of a management efficiency by risk for the operative control and acceptance of administrative decisions is carried out in a regular mode.
Periodicity and degree of detailed elaboration of represented data is defined by requirements of the company.
Research has shown, that by working out KRI (Key Risk Indicator) and an establishment of their current and target significances in the company should proceed also from this, that current and target significances KRI should whenever possible
To reflect the positive tendency on risk management, or decrease in rates of negative tendencies and to set possibility of an estimation of results of activity by results of risk management.

At definition KRI it is important, that they adequately reflected communication between the revealed risks and problems of corresponding functional directions, were balanced on structure of indicators, including indicators both financial, and not financial character and, at last, gave the chance involving of all levels and categories of staff in the decision of problems on minimisation of risks to comprehensible level.
Proceeding from the above-stated, examples of a technique of application and a choice of key indicators for concrete risks are more low resulted.
Risk «Change of principles of state regulation of tariffs for a telecommunication service and tariffs for joining and the traffic admission».
Brave event - reduction of a gain of the company, connected with change of the legislation of branch of communication and liberalisation of the market of communication of Russia.
With the purposes of counteraction to the given risk complex actions for the several directions including monitoring of legislative actions and offers of competitors (on a constant basis), formation of package offers on target audiences, pool development bezli - mitnyh internal resources, introduction of services ISS and TSOV, formation of a pool of services on the basis of building of a multiservice optical network and so forth are carried out
For account KRI following formulas are accepted:
Index «outflow of subscribers»: SOt = Xyt ' Ot + yt ' Qt, where
i=OTA,
DSL,
IP-TV
SOt - an integrated indicator of outflow for a quarter
vt - the service weight i, settles up as a share of incomes (I) from service i in general obe -
Ii
me incomes of brave services v. = t)
Z It

O't - Outflow of subscribers on service i for an accounting period equal to the relation of total outflow of subscribers for the period on all segments (KO't) to average quantity of subscribers (AUt) for the period on all segments on the basis of data of billing.
D
DR = Dt-1
V ^_ V,-1
Index «a market share»
Dt - a gain on profile kinds of activity of the company during the period t Vt - market volume (without cellular communication) during the period t
Current significance KRI on an index of "outflow of subscribers» for a year has made - 1,06, on an index «a market share» - 0,92.
Managerial process by the given risk consists in minimisation of financial losses, fulfilment of the plan of incomes and not distortion of the budget as a result of change of requests of the legislation regarding adjustable tariffs for consumers and factors on a telecommunication service, introduction of changes in principles of an establishment and application of tariffs for an adjustable telecommunication service.
Plan of action on management of the given risk acceptance of commercial, technical and other decisions, realisation of actions for cost reduction of services for the purpose of preservation of profitability of business, development of a new telecommunication service, diversifikatsija business should be provided.
Incomes of adjustable services in the course of account of data KRI concern: incomes of services of granting of access and local telephone connections; incomes of a universal telecommunication service; incomes of telegraphic communication (transfer of the internal cable); incomes of services vnutrizonovyh telephone connections.

Actions for decrease in effect of risk of regulation of tariffs for indicators of activity of the company can have some directions:
Decrease in a share of incomes of adjustable services for minimisation of degree of influence of changes on the general indicators of activity of the company. With allowance for relative stagnation (from the point of view of demand) the markets of adjustable services and finishing tarifoobrazovanija a telecommunication service to limiting, probably to draw a conclusion on an effective method of minimisation of a share of incomes of adjustable services - advancing growth rate of incomes on noncontrollable services at the established growth rate of incomes of services of local communication (it is predicted at level to 7 % annually depending on inflation of the corresponding period). Growth characteristics can be expressed by means of two indicators: a share of incomes of an adjustable telecommunication service; a share of incomes of services the Internet and data transfer networks;
Increase of profitability of adjustable services with current positive profitability (local communication, vnutrizonovye telephone connections);
Achievement of positive profitability of adjustable services with current negative profitability (telegraphic communication). Absolute and relative efficiency of activity from the new telecommunication service covering with the increased operating ratio losses of an unprofitable telecommunication service Thereby increases;
Achievement of general positive dynamics of change of profitability on all telecommunication service of the company during the period. Liquidation of an unprofitable telecommunication service or removal of negative profitability on any kinds of services (both regulated, and noncontrollable).
The analysis has shown, that the company used possibility to lower to the beginning of 2009 a share of incomes of an adjustable telecommunication service in aggregate profits from a telecommunication service from 61,4 % to 59 %, and a share of incomes of new services (the Internet and data transfer networks) to raise from 14,3 % to 21,7 %.

Decrease in a share of incomes of an adjustable telecommunication service will allow the company to depend to a lesser degree on state regulation of tariffs, and monitoring of level of profitability on types of service will allow to supervise yield and level of expenses on the services making a significant share in corporate incomes, or yielding the loss. As KRI the share of noncontrollable services in total amount of a telecommunication service, or the average annual growth rate of tariffs on adjustable services can be used.
Risk «Acceptance of the erroneous decision on business development in the chosen direction»
Brave event - loss of incomes of the new telecommunication service, connected with an error of an estimation of demand for new services and distortion prognoznyh budgets.
The basic action for warning effect on the given risk is monitoring and the analysis of offers in the market on new services
Communication and demand for these services. The formula for index account:
= (To a bottom - RNU)
RNU *100 %,
Where: to the BOTTOM - incomes of new services;
RNU - costs from new services;
KRI - a key indicator of efficiency.
Current significance KRI for the investigated period has made 24,7 %.
Risk «the Credit risk connected with fulfilment by the company of the obligations».
Brave event - default by the company of the obligations under loans and as consequence a possible technical default.
Principal cause of the given risk is the big debt load and certain treaty obligations under loans. In this connection, the primary goal on management of the given risk is fulfilment of some indicators, realisation of constant monitoring behind fulfilment of criteria on financial kovenantam on operative accounts and obligatory
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Preaudit of public accounts on observance to the established criteria. Therefore as KRI it is offered to establish limiting and current significances kovenantov, subject to the constant control: Net Debt/Editda (the relation of the pure indebtedness to the corrected profit) and Ebitda/Interest (the relation of the corrected profit to percent to payment). Target significances offered KRI correspond to the limiting significances provided by credit agreements. Current significances of indicators corresponds to reporting data for the last quarter of financial year. Current quarterly indicators cannot be worse (below/above) standard since non-observance of the given request can entail an one-stage presentation of the Company of all sum of a long credit to settlement.
Risk "Interest risks".
Brave event - debt service cost growth. Riskoobrazujushchimi factors are changes of an economic situation, an investment climate, macroeconomic indicators in the state. Probably also influence of world global business factors. World crisis of liquidity was expressed in offer falling in all financial markets and to growth of cost of extra means. Furthermore, financially-credit institution offered from the drawing second half of the year 2008 under the interest rate adhered to market indicators (Mosprime, Libor), thereupon the market has strengthened volatilnost. The fixed rates were offered on significances, is significant above variables with allowance for bank margins.
All telecommunication companies actively use in the activity extra means in the form of various financial instruments (bank credits, loans, bills, bonds, leasing) for replenishment of circulating assets and financing of investment activity. Therefore the given risk is actual for them.
Interest risk for the company as the borrower, has the dual nature. Receiving drawing under the fixed rate, the Company podver
gaetsja to risk because of falling of rates. In case of drawing under the variable rate the company is exposed to risk because of addition of value of external drawing.
For replenishment of circulating assets, financing of investment activity and preparation for performance of the offer by the companies competitive selection of the financial organisations on the right of administration of loans on the terms of the variable interest rate is organised.
At attraction of currency credits for refunding of obligations in 2008 of the company were submitted to influence of the exchange risk connected with sharp growth of the basic world currencies in relation to rouble.
Actions for warning effect on an interest risk:
Realisation of monitoring of the financial market, choice of financial instruments and the organisation of open competitions (auctions) for constant maintenance of open demand lines of credit as with fixed, so with the floating interest rate;
Maintenance and use of several open demand lines of credit with possibility of fast sample of resources with the kind of the interest rate most comprehensible to the current period (fixed, floating) for the purpose of refunding of a credit portfolio on price reduction of cost of service;
Availability use in the agreement bearing a fixed rate of interest conditions about possibility of the preschedule credit repayment without commission payment for preschedule settlement;
Introduction in a text of the agreement of the condition providing the right of the Borrower on the coordination of the interest rate with the creditor.
In connection with the general growth of cost of extra means in the market, increase in a discount rate of the Central Bank of the Russian Federation, the role of active negotiations with creditors on open demand lines of credit on nedopushcheniju interest rate increases under acting credit agreements increases.

Risk «the Presentation taxing authority unreasonable, from the point of view of the company, claims».
Brave event - derivation of money resources on settlement of the significant sums of the presented fines and tax payments in the presence of deficiency of sources of financing.
The Russian tax laws suppose various interpretation and are subject to frequent changes. Succession of events in the Russian Federation indicates recently that taxing authority can take more a hard line at tax laws interpretation. For the last 4 years of check of large communication statements of Russia which the Russian Federations on the largest tax bearers consist on the tax account in inter-regional inspection FNS, came to an end with removal of decisions on bringing to account with donachisleniem the significant sums of taxes, the fine and fines (to 4,5 billion rbl.). Thus the cores on the sums episodes represented tax consequences which have been anyhow connected with interpretation normativnopravovyh certificates in the field of rendering of a telecommunication service.
Thus, managerial process by the given risk consists in minimisation of tax claims by realisation of the constant analysis of arbitration practice on ambiguously treated norms of the legislation, attraction of foreign or internal tax advisers. Taking into consideration imperfection of the current legislation, the given risk is to constants.
The basic criterion defining efficiency of actions on minimisation of given risk in the current register, the sum tax donachisleny and fines is. Current significance of the given indicator or the size of tax claims, have been accepted at level no more than 7 % from the sum of an annual gain, and target significance no more than 5 % from the annual sum of a gain of the company. At definition of target significance it was taken into consideration, that productive monitoring of arbitration practice will allow, using a sou front line
debnuju practice and statistics of the won actions at law, the given risk to minimise.
Risk «Failure of Federal service on supervision in sphere of mass communications, communication and cultural heritage protection in issue of the permission to operation of structures of communication».
Brave event - loss of incomes of care of clients and default of financial indexations, distortion long-term prognoznyh budgets.
Actions on minimisation of the given risk are directed on transfer of the subscribers using technology of radio access CDMA on other technologies in connection with withdrawal of a frequency resource under development of digital TV since 2010. For the control of performance of plans it is offered to establish KRI «quantity of the subscribers connected on technology CDMA». Target significance should be equal to zero that will allow to exclude probability of loss of user's base and incomes in default Federal service on supervision in sphere of mass communications, communication and cultural heritage protection in issue of the certificate of registration of radio-electronic means (RES) at failure of Federal antimonopoly service in issue of the permission to use of radio frequencies for RES.
Risk «Increase of level of a competitiveness».
Brave event - loss of a share of the market and as consequence loss of incomes, reduction of a gain and default of financial indexations.
As indicators following indicators are offered: a company share in the telecommunication market, user's base of the company (the basic telephone sets (OTA), user's base of the company (broadband access (SHPD), thousand ports), a share of incomes of a new telecommunication service in company aggregate profits.
The indicator of a share of the market is key and reflects degree of development of a competitiveness and its strengthening in licence territory of the company. A company share in telecommunication market JUFO (regarding action territory
Licences) on the beginning of 2008 made about 25 % and, owing to competitiveness toughening, will decrease.
The primary goal on management of the given risk is decrease in negative consequences from change of a share of the market of the company in the market, accompanied by change of structure of incomes, decrease in a gain as a result of inability to take advantage of own competitive advantages, absence of possibility of reception of additional revenues, and also decrease in the long term company potential on improvement of indicators of sales and yield.
Among actions for fulfilment of such problem use of position of the in the lead operator in Southern Federal district of a local fixed-line telephony, purchase of local communication statements, reception of new licences, building of communication networks in new territories, working out and introduction of a new telecommunication service, and also expansion of a spectrum of rendered services is offered.
Risk «Cash ruptures».
Brave event - deficiency of financing of activity of the company.
The estimation is made, proceeding from expectations of possible deficiency of money resources on financing of costs. As KRI it is recommended to define following key indicators of a management efficiency liquidity:
The sum of not reduced demand balance on the settlement account, allowing to supply current financing of working costs for maintenance of communication facilities in working order;
The sum of the greatest possible day deficiency of money resources. The given indicator settles up proceeding from periodicity of receipt of money resources according to conditions of acting agreements on rendering of a telecommunication service.
As a whole management of the given risk is directed on prevention of occurrence of deficiency of money resources (cash ruptures), the decision of problems
Duly settlement of the promissory notes, obligations under the concluded contracts, financing prime and the operational expenditure, to an exception of the facts of a presentation from counterparts of fines.
It is expedient to develop the mechanisms promoting creation of conditions of the greatest possible conformity of own sources of financing to requirements of the company and stable work in the conditions of financial crisis for an exception of the facts of approach of the given brave event.
It is necessary to carry out monthly monitoring of size and dynamics of receipts and realisation of costs by means of drawing up of updatings and monitoring of accounting budgets, management a payment calendar, the control of critical significances of indicators of liquidity for the purpose of an exception of the facts testifying to falling of liquidity below admissible level, realisation of monitoring of the financial market, a choice of financial instruments and the organisation of open competitions for constant maintenance of open demand lines of credit with possibility of fast sample of resources with most acceptable conditions of reception, interest rates, use terms in volumes not less than size of cover of planned cash rupture - here the mechanisms used for minimisation of risk.
Realisation of the developed mechanisms is carried out within the limits of realisation of following actions:
Accumulation on settlement accounts of money resources with calculation of interests on srednednevnye the rests on an abacus under the rate exceeding attraction of short-term extra means for the purpose of increase of liquidity and incomes;
Credit management regarding observance of the acting procedure of payments with counterparts under agreements of operational and investment activity, realisation of negotiations and signings of additional agreements on change of schedules of payments under existing contracts. Main principles of an establishment should be staticized on -

rjadka accounts under account agreements at the conclusion of agreements in the conditions of financial crisis.

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A source: Podgornaja Lubov JUrevna. FORMATION of the CONTROL SYSTEM by FINANCIAL RISKS In the TELECOMMUNICATION COMPANY. The dissertation on competition of a scientific degree of a Cand.Econ.Sci. Krasnodar. 2009

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