Consolidated Financial Statements >
CONSOLIDATED FINANCIAL STATEMENTS AND EXPLANATORY NOTES
186
| 2012 annual report prysmian group
(in millions of Euro)
31 December 2012
31 December 2011
Cash and cash equivalents
812
727
Financial assets held for trading
78
80
Unused committed lines of credit
871
1,033
Total
1,761
1,840
[d] Credit risk
Credit risk is connected with trade receivables, cash and cash
equivalents, financial instruments, and deposits with banks and
other financial institutions.
Customer-related credit risk is managed by the individual
subsidiaries and monitored centrally by the Group
Finance Department. The Group does not have significant
concentrations of credit risk. It nonetheless has procedures
aimed at ensuring that sales of products and services are made
to reliable customers, taking account of their financial position,
track record and other factors. Credit limits for major customers
are based on internal and external assessments within ceilings
approved by local country management. The utilisation of credit
limits is periodically monitored at local level.
During 2012 the Group entered into a global insurance policy
providing coverage for part of its trade receivables against any
losses.
As for credit risk relating to the management of financial and
cash resources, this risk is monitored by the Group Finance
Department, which implements procedures aimed at ensuring
that Group companies deal with independent, high standing,
reliable counterparties. In fact, at 31 December 2012 (like at
31 December 2011) almost all the Group’s financial and cash
resources were held with investment grade counterparties.
Credit limits relating to the principal financial counterparties
are based on internal and external assessments, within
ceilings defined by the Group Finance Department.
[e] Liquidity risk
Prudent management of the liquidity risk arising from the
Group’s normal operations involves the maintenance of
adequate levels of cash and cash equivalents and short-
term securities as well as availability of funds by having an
adequate amount of committed credit lines.
The Group Finance Department uses cash flow forecasts to
monitor the projected level of the Group’s liquidity.
The amount of liquidity reserves at the reporting date is as follows:
