ANNUAL REPORT 2011 REGISTRATION DOCUMENT - Saft

2 Credit
RISK FACTORS
and counterparty risks
degrees of Internal Control and risk management awareness
from one entity to another. Moreover, they may be managed
with different information systems.
In this context, Saft cannot rule out a failure of Internal Control
or an instance of fraud that could have a signifi cant fi nancial
impact and/or harm the Group’s reputation.
Risk management
In order to mitigate these risks, Saft has set up a review process
of its Internal Control, based on a set of rules and procedures it
2.3 CREDIT AND COUNTERPARTY RISKS
2.3.1 CREDIT RISK
Types of risks
Credit risk is the risk that a debtor does not settle a debt in
due time. Due to the nature of the Group’s business, trade
receivables constitute the main source of credit risk to which
the Group is exposed.
Risk management
Information on exposure to credit risk and its management is
provided in Note 3 of the Consolidated Financial Statements.
2.4 LIQUIDITY RISK
Types of risks
Liquidity risk relates to the risk of Saft being unable to meet its
monetary needs with the fi nancial resources it generates from
its business activities or those it mobilises through third parties.
The Group’s main liquidity risk is linked to its borrowings.
58 / SAFT - ANNUAL REPORT 2011
has circulated to all its subsidiaries. In addition, regular audits
of different Group sites or audits of processes are carried out
according to a programme established and approved annually
by General Management and the Audit Committee. Lastly, Saft
has implemented a number of initiatives to raise the awareness
of employees of risks relating to fraud, corruption or noncompliance
with the Group’s rules of ethics.
This process is described in more detail in the report prepared
by the Chairman of the Supervisory Board.
2.3.2 COUNTERPARTY RISK
Types of risks
Counterparty risk relates to the inability of a counterparty to
fulfi l its obligations. The Group is exposed to counterparty risks
in relation to the transactions on the fi nancial and banking
markets that it uses to manage foreign exchange and interest
rate risks and to manage its payment fl ows.
Risk management
Information on counterparty risk and its management is
provided in Note 3 of the Consolidated Financial Statements.
Risk management
Information on exposure to liquidity risk and its management is
provided in Note 3 of the Consolidated Financial Statements.
The Company has conducted a review of its liquidity risk
and considers that it is able to meet its future payment terms.
These are presented in Note 18 of the Consolidated Financial
Statements.