Electrolux 1998 Annual Report Download - page 32

Report by the Board of Directors for 1998
30
Electrolux Annual Report 1998
The euro enables transparency in
pricing in different markets, which
means that greater consideration must
be given to strategic market issues.
No fiscal or contractual problems
have arisen as a result of the launch of
the euro, neither commercially nor
financially. The Group believes that the
launch of the euro will have a positive
effect and will provide greater stability,
primarily through a considerable
reduction of transactional exposure.
The Board of Directors’ activities
in 1998
In addition to the statutory meeting, the
Board met seven times during the year,
twice in connection with visits to
subsidiaries in Sweden and Brazil.
During the year the Board adopted
a set of working procedures, as follows:
●4-6 meetings per year shall
normally be held, of which at
least one in connection with a visit
to a subsidiary.
●The Company’s auditor shall
submit a report to the Board at
least once a year.
●Remuneration to senior manage-
ment shall be proposed by a
committee of Board members.
These procedures also involve detailed
instructions for the President as to
which issues require the Board’s
approval, and the type of financial and
other reports that shall be submitted to
the Board. The instructions specify the
maximum amounts which various
decision-making functions within the
Group have the right to approve for
capital expenditure. They also cover
the financial policy to be applied by
the Group.
The environment
Electrolux operates 135 manufacturing
facilities in 26 countries. The manu-
facturing operations consist mainly of
assembling components made by
suppliers. Other processes include metal
plateworking, molding of plastics,
painting and enameling, and casting of
parts to a limited extent.
Chemicals are used in the form of
process aids such as lubricants and
cleaning fluids, and as part of the
products, e.g. in the form of insulation
material, paint and enamel. The
production processes generate impact
on the environment in the form of
water and air-borne emissions, solid
waste, and noise.
Studies of the total environmental
impact of the Group’s products
during their entire lifetimes, i.e. from
production to final disposal, show that
the greatest environmental impact is
generated indirectly, when the products
are used. The stated Electrolux strategy
is to develop and actively promote
increased sales of products with lower
environmental impact.
ISO certification
Environmental management systems
certified to ISO 14001 shall be in place
by 2000 at all manufacturing facilities.
In 1998, 16 plants were certified, and
7 certified plants were divested. At year-
end 1998, a total of 35 plants had been
certified.
Mandatory permits and notification
in Sweden
The Group operates 19 plants in
Sweden, which account for about 8% of
the total value of production. Permits
are required by the Swedish authorities
for 12 of these plants, while 7 are
required to submit notification. The
permits refer to e.g. maximum per-
missible air- and waterborne emissions
and noise levels. No significant non-
compliance with Swedish environ-
mental legislation was reported during
the year.
For additional information about
the Group’s environmental activities,
see the separate Environmental Report
for 1998.
Electrolux millennium program
Since the beginning of 1996, Electrolux
has been developing solutions for
problems that may arise in connection
with the millennium shift.
The millennium issue is seen as
operational, and is not limited to IT-
applications. It covers information
systems as well as date functions
embedded in other electromechanical
systems. Applications are evaluated in
connection with:
●Products
●Manufacturing processes
●Office and building systems
●Third parties
Program structure
The Electrolux millennium program
comprises:
●Identification of Year-2000 (Y2K)
problems within Electrolux
●Assessment and quantification of
risks
●Proposals and cost estimates for
replacing and/or modifying existing
systems
●Implementation of the necessary
replacements and modifications.
The program is being implemented by
the business sectors with support from
Group staff functions. An appointed
Y2K project manager coordinates the
work on compliance.
Year-2000 audits are being
performed to ensure that business
sectors have identified and are working
on corrective action plans. Activity is
being tracked by internal audit staffs as
well as external auditors.
Costs
The cost of the changes implemented
to date amounts to approximately
SEK 140m. The total cost of Y2K
compliance for Electrolux is estimated
at approximately SEK 320m, of which
approximately SEK 250m refers to
changes in IT-applications.