Page 169 - MEDIASET ESPAÑA / 2012. Financial Statements, Management and Corporate Governance Report

169
FINANCIAL STATEMENTS AND MANAGEMENT. ANNUAL CORPORATE GOVERNANCE REPORT. BALANCE SHEETS 2012
22.4. Risk management policy
To efficiently manage the risks to which the Mediaset España Group is exposed, certain control and prevention
mechanisms have been designed and implemented, led by the senior executives of the Group in the Audit Committees.
These mechanisms have been put into place in the corporate governance rules and have been applied throughout
the Group.
The measures adopted by the Group to manage risks can be classified into three main categories and were designed
to cover exposure to credit risk, liquidity risk, and market risk.
22.4.1. Credit risk
Credit risk exists when a potential loss may arise from the Company’s counterparty not meeting its contractual obligations,
i.e., the possibility that financial assets will not be recovered at their carrying amount within the established timeframe.
The Group maximum exposure to credit risk at December 31, 2012 and December 31, 2011 was as follows:
(Thousands of euros)
2012 2011
Non-current receivables 4,479 55,462
Non-current financial investments - -
Trade and other receivables 201,762 226,746
Current receivables from Group companies and associates 809 2,867
Current investments 2,065 55,790
Cash and cash equivalents 90,692 58,574
299,806 399,439
For the purposes of credit risk Group management differentiates between financial assets arising from operations and
those arising from investments.
22.4.2. Operating activities
Most of the operating activities of the Group consist of advertising revenues.
Group management has developed a policy whereby credit limit by customer type and authorization levels in order to
approve transactions are established.
The financial assets considered as part of the operating activities are mainly trade receivables for sales and services.
From a business standpoint, the Group considers the advertisers to be the end customer; none of these represents
significant business revenue in terms of the Group’s total turnover. It is standard sector practice to use media agencies
as intermediaries between advertisers and the television channel offering the advertising space.
The Group constantly monitors the age of its debt, and there were no risk situations at year end.