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FINANCIAL STATEMENTS
6
CONSOLIDATED FINANCIAL STATEMENTS
NOTE 5
FINANCIAL RISK MANAGEMENT
The Group is exposed to the following risks in its use of financial
instruments:
●
credit risk;
●
market risk;
●
liquidity risk.
This note includes information on the Group’s exposure to each of the
above risks and those resulting from early repayment clauses related to
covenants, as well as its risk management and measurement procedures,
objectives and policy. Quantitative information is provided in the other
notes to these consolidated financial statements.
The Board of Directors defines and oversees the Group’s risk management
framework.
The Group’s risk management policy is aimed at (i) identifying and
analysing the risks to which the Group is exposed, (ii) defining limits for
these risks, and (iii) implementing controls. The risk management policy
and systems are regularly reviewed in order to factor in changes in the
Group’s market conditions and operations.
Through its management and training procedures and rules, the Group
seeks to foster a constructive, rigorous control environment in which
staff members have an effective understanding of their roles and duties.
The Group’s Audit Committee is responsible for ensuring that the Group’s
risk management policy and procedures are effectively applied and for
verifying that the Group’s risk management framework is appropriate
in light of the risks to which it is exposed.
Credit risk
Credit risk represents the risk of the Group incurring a financial loss if a
client or counterparty to a financial instrument fails to fulfil its contractual
obligations.
The Group’s maximum credit risk exposure corresponds to the carrying amount of its financial assets:
In millions of euros
Carrying amount
31/12/2015
31/12/2014
Available-for-sale financial assets
0.2
0.2
Other non-current financial assets
11.8
10.7
Trade receivables
298.2
280.5
Other receivables
66.3
56.5
Cash and cash equivalents
233.8
252.2
TOTAL
610.3
600.1
CUSTOMER CREDIT RISK
In view of the quality of its client portfolio, Management considers that the Group has limited customer credit risk. Beyond a defined threshold
and when they are of an unusual nature, business contracts are systematically validated by the Group’s Legal Affairs and Insurance Department
in order to identify, assess and address related risks prior to any firm and final commitment being entered into.
The following table shows movements in impairment losses on trade receivables in 2014 and 2015.
In millions of euros
2015
2014
Beginning of year (amount recorded in the statement of financial position)
7.7
7.9
Impairment losses recognised/reversed during the year
0.1
(0.4)
Currency translation differences
0.8
0.2
Effect of changes in scope of consolidation
4.0
–
YEAR-END (AMOUNT RECORDED IN THE STATEMENT OF FINANCIAL POSITION)
12.6
7.7
ASSYSTEM
FINANCIAL REPORT
2015
90