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REC Annual Report 2011
21
REC has significant debt maturities in 2013 and 2014. REC will work
on reducing these maturity risks, primarily through refinancing of debt.
According to REC’s finance policy, REC shall at all times maintain
financial ratios within the limits defined in the loan agreements of
REC ASA and subsidiaries, and take the necessary measures that are
available to avoid financial distress. Neither the senior NOK bonds nor
the convertible EUR bond contain financial covenants. There is cross
default between all the loan agreements above certain threshold
amounts. At December 31, 2011, REC complied with all financial
covenants in the loan agreements. Please refer to note 3 and note
17 for further information on the loan agreements and covenants.
The solar market is expected to remain challenging in 2012 and REC’s
margins and cash flow are hence expected to be lower than in 2011.
REC currently has adequate liquidity and ample headroom in its banking
facilities, within its agreed financial covenant levels. However, the
Company has for some time had discussions with its bank group to
improve its flexibility in the loan agreement going forward allowing
the company to focus on further cost improvement initiatives. The
amendments discussed, among other things, address the extension of
the final maturity date, covenant levels and definitions allowing for shut
down of assets in Norway (costs related to shut downs) and capital
expenditures in relation to further cost improvements of the operations.
See note 33 to the consolidated financial statements for amendments
to the bank credit facility agreement after the reporting period.
ORGANIZATION AND SUSTAINABILITY
REC’s mission statement is “Smart Energy for a Cleaner future”, which
signals REC’s commitment to making safe and sustainable solar energy
affordable and accessible globally. This means continuous focus on
reducing the cost and enhancing the value of solar products, while
keeping safety at the forefront and always striving for a high
environmental and governance standard.
REC acknowledges its responsibilities as a company to be held
accountable to shareholders, investors, employees, and society.
Everywhere REC operates it will continuously seek to limit any
negative effects caused by its activities. Sustainability is integral
to the way that REC does business.
Sustainability reporting
REC’s sustainability reporting addresses the issues that are material
for the company and our stakeholders. REC is continuously working to
improve its reporting, and from2011 REC will use the Global Reporting
Initiative (GRI) framework to measure and report on sustainability
performance. The GRI is internationally recognized, and its framework
establishes a transparent means through which to report on the
following six indicator areas: economics, environment, labor, human
rights, society, and product responsibility.
Governing sustainability
The Group Policies on Sustainability define the RECway of workingwith
sustainability both internally and in the variousmarkets REC operates.
The Group Policies consist of Business Conduct Policy, Safety and Health
Policy, Environment and Climate Policy as well as Quality and Improvement
Policy. The policies are governing documents for all REC activities and are
normative for all underlying governing documents within sustainability.
They are reviewed annually by the Board of Directors.
To support the implementation of the Group Policies, an HSE
management systemwas developed and adopted by the Group
Management in January 2011. This consists of 14 HSE principles and
an assessment tool where all internal HSE processes are covered.
Expectations and practical implementation methods are explained in
order to secure and improve HSE standards and share best practices
across the Group, using the REC Business System rules & principles.
All manufacturing plants performed a self-assessment according to the
RECHSE principles both in 2010 and in 2011 and the results are used for
prioritizing improvement actions and programs. In 2012 the ambition is to
further roll-out the HSE principles to other parts of the organization where
applicable, as well as establish cross-assessments between the units.
To ensure compliance with the Group Policies, the performance
management of sustainability has been strengthened through 2011 with
annual objectives, specific KPI’s and quarterly reports to the Board of
Directors, focusing on KPI scorecard and risks. It is a Board responsibility
to secure acceptable performance, also within the sustainability area.
To ensure quality in all parts of the production, REC is using the
ISO9001 certification as a basis framework. Five of eight REC
manufacturing units nowhave ISO9001 certification. To improve the
environmental aspects of the production process, REC has been focusing
on implementation of the ISO14001 standard and all business units in
Singapore have achieved this certification. In addition they implemented
the occupational and health safetymanagement standard of OHSAS
18001 during 2011, and achieved the certification at the end of the year.
RECSilicon in Butte is actively pursuing the USOSHA equivalent to
OHSAS 18001, called theVoluntary Protection Program (VPP). They
submitted their application in December 2011 andwill be audited in 2012.
Business Conduct & Compliance
REC sets high standards of integrity, which are expected of every
employee and in every country where we do business. The REC Code
of Conduct is the integrity framework that describes the behavior
expected of employees and stakeholders. It was revised and approved
by the GroupManagement in February 2012. A training programwill
be rolled out in 2012.
AWhistleblower hotline andprocedurewas launched in2011, and is
available to all employees, contractors, vendors andother stakeholders of
theGroup to report their concerns or complaints related to theRECGroup’s
business conduct. REC investigates all potential integrity concerns and
cooperates fullywith lawenforcement agencies. TheAudit Committeewill
be informedof all complaints related to accounting and auditingmatters.
TheBoardwill be informedof specific complaints as required andwill also
beprovided regularlywith general updates of complaints received. No
adverse actionwill be taken against an employeedue to complaints
submitted in good faith. Complaints can bemade anonymously.
In 2011, REC was subject to one case of alleged corruption, however
after thorough investigation there was nothing found. REC will take
every accusation of corruption seriously, do a thorough investigation and
report to the Board of Directors.
Report from the Board of Directors