Taking risks is an important part of remaining entrepreneurial and succeeding in business, but, at the same time, it's crucial that we manage our exposure to risks to ensure sustainable growth.

An overview of our approach to risk management, with a detailed description of the nature and extent of our exposure to risks, is given in the NXP Annual Report 2006.

As a company, we recognize different categories of risk and have policies and procedures in place to address issues within each category. For example, we acknowledge that the success of our long-term partnerships and our ability to protect our intellectual property can affect our strategic direction. We also realize that unexpected developments resulting from internal processes, people, or systems can impact the actual running of our business. Similarly, we understand that failures to enact appropriate policies and procedures could, among other things, negatively impact the reliability of our financial reporting, and failure to comply with relevant laws could seriously hamper our operations.

Our Sustainability Policy addresses issues, identified by our stakeholders, that a) are significant to our organization, b) have a current or potential impact on our company, and c) over which we have a reasonable degree of control. As a result, it offers real support in our efforts to reduce risk and foster success, since it helps us manage a range of risk scenarios and, at the same time, helps us contribute to making the world a better place.