TSC Annual Report 2024 final - Flipbook - Page 60
Notes - Financial statements
ICT systems. Information security risks involve the risk that
information is divulged to unauthorised parties, distorted or
becomes unavailable. Robust information security policies
and processes are used to manage these risks, along with
training and data backup. Advanced security solutions are
also used, such as firewalls, encryption and continuous
monitoring of systems. ICT risks are also dealt with via
redundancy in critical systems as well as regular testing of
disaster recovery.
External risks, stemming from external events such as natural
disasters are managed via continuity planning, crisis response
plans and collaboration with external experts to identify and
manage external threats.
2. Screening of sanctions: Automated systems to regularly
check customers, vessels and business partners against
global sanctions lists.
3. Risk assessment: Risk analyses to identify high-risk
activities and geographic areas, applying enhanced
measures to identify elevated risk.
4. Training and awareness: Training for employees to
ensure that they are aware of the applicable rules,
sanctions and the Club’s internal policies.
This is how the Swedish Club strives to maintain a high
standard when it comes to regulatory compliance. It is also
how we contribute to there being a secure and transparent
昀椀nancial environment globally.
Financial risk
Compliance risks and legal risks include the risk of sanctions,
legal disputes or reputational damage resulting from a
lack of compliance with applicable laws and regulations.
These types of risks are managed via dedicated compliance
resources that monitor regulatory changes, assurance of
compliance with industry standards, and in-house training
on legal and regulatory requirements.
In order to effectively manage climate risks, efforts are
underway to integrate sustainability risks, including transition
and physical risks, into our risk and solvency assessments.
Transition risks have to do with changes in regulations,
technologies and market requirements that impact our
customers and operations. Physical risks are primarily
extreme weather events, rising sea levels and other
climate-related effects that could impact assets and
insurance portfolios.
The Club has systems support for identifying, measuring
and controlling its operational risks. The operational side of
the business conducts an annual review of its operational
risks and monitoring occurs via such things as the Club’s
incident management system.
Market, credit and liquidity risks are classi昀椀ed as 昀椀nancial risks,
where the Club’s goal is to identify a safe risk level and maximize
long-term investment income. The currency mix in the investment
portfolio is crucial for balancing the Club’s assets with its liabilities.
The investment philosophy focuses on risk diversi昀椀cation and
investments in assets with a high level of creditworthiness.
In order to control risks, the Board of Directors establishes an
investment policy (Risk Management Directive), which governs
the composition, control and authority over asset management.
A model has been developed for measuring the total value at
risk through exposure in shares, currencies, interest rates and
maturities, as well as matching against actuarial provisions.
According to the model, risk exposure has increased from USD
24 million at the beginning of the year to USD 30 million at the
end of 2024, which is in line with the goal of keeping the risk
within the tolerance limits. Results and other relevant information
is reported on a monthly basis to the Managing Director.
Management of the risks of money laundering,
terrorist 昀椀nancing and sanctions violations.
Market risks cover fluctuations in interest rates, exchange rates
and share prices. The Club operates internationally and has
revenue, expenditures and investments in various currencies.
As of 31 December 2024, the duration of interest-bearing
securities was 2.6 (2.6) years. A change in interest rates
of 1 percentage point would result in a value change of
approximately USD 10 (9) million.
The Swedish Club has implemented a framework for
compliance and risk management of these types of risks.
It includes:
1. Know Your Customer (KYC): Procedures for continuous
monitoring of customer relationships to ensure that we
understand our customers’ business and the purpose of
the business relationship.
Currency exposure for the Club’s most important currencies
was, as of 31 December 2024, USD 28.8 (29.1) million.
All decisions regarding currency positions are based on a
US dollar perspective. The Club has thus chosen to regard
free reserves as consisting entirely of US dollars, although
operating costs arise in a variety of currencies.
60 The Swedish Club | Annual Report 2024
