ELIA GROUP 2011 FINANCIAL REPORT
risk, etc. can be settled in the tariffs, in accordance with the applicable legislation. CREDIT RISK
Credit risk encompasses all forms of counterparty exposure, i.e. where counterparties may default on their obligations to the company in relation to lending, hedging, settlement and other financial activities. The company is exposed to credit risk from its operating activities and treasury activities. In respect of its operating activities, the Group has a credit policy in place, which takes into account the risk profiles of the customers. The exposure to credit risk is monitored on an ongoing basis, resulting in a request to deliver bank guaranties from the counterparty for some major contracts.
147
At the end of the reporting period there were no significant concentrations of credit risks. The maximum credit risk is the carrying amount of each financial asset, including derivative financial instruments. (in million €)
2011
2010
Loans and receivables Cash and cash equivalents Balance at bank
196.2 385,6 13,6
287.0 366.0 13.4
Interest rate swaps used for hedging Assets Liabilities
0.0 (35.2)
0.0 (31.4)
560,2
635.0
Total
The movement in the allowance for impairment in respect of loans and receivables during the year was as follows:
Doubtful debtors
Impairment losses
Remaining balance
3.7
(3.4)
0.3
Changes during the year
11.5
(11.5)
0.0
BALANCE AT 31 DECEMBER 2010
15.2
(14.9)
0.3
BALANCE AT 1 JANUARY 2011
15.2
(14.9)
0.3
6.8
(6.8)
0.0
22.0
(21.7)
0.3
(in million €)
BALANCE AT 1 JANUARY 2010
Changes during the year BALANCE AT 31 DECEMBER 2011
Trade and other receivables are recorded without taking into account receivables which have been impaired. The impairment loss recognised in 2011 is mainly related to a settlement of receivables, which finally could be recovered in the future tariffs.
LIQUIDITY RISK
CURRENCY RISK
The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of bank loans, confirmed and unconfirmed credit facilities, commercial paper program, etc. For medium- to long-term funding, the Group uses bonds. The maturity profile of the debt portfolio is spread over several years. The Group Treasury frequently assesses its funding resources taking into account its own credit rating and general market conditions.
The Group is not exposed to any significant currency risk, either from transactions or from exchanging foreign currencies into euro, since it has only limited foreign investments or activities and less than 1% of its costs are expressed in currencies other than the euro.
Liquidity risk is the risk that the Group may not be able to meet its financial obligations. The Group limits this risk by constantly monitoring cash flows and ensuring that there are always sufficient credit line facilities available.