Annual Report 2005 - Tenaris
Annual Report 2005 - Tenaris
Annual Report 2005 - Tenaris
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The equity position related to the US dollar on December<br />
31, <strong>2005</strong> was as follows:<br />
CURRENT ASSETS<br />
Financial investments (Note 3)<br />
Accounts receivable (Note 4)<br />
Total current assets<br />
CURRENT LIABILITIES<br />
Loans and financing (Note 11)<br />
Suppliers (Note 9)<br />
Total current liabilities<br />
At the end of the financial year, the Company had active<br />
derivative or forward contracts with a principal value equivalent<br />
to R$ 1,229 (US$ 525,000) to cover specific oscillations<br />
in its commercial flow.<br />
(III) Credit risk<br />
These risks are managed and minimized through a specific<br />
policy of granting credit selectively to customers, with<br />
coverage for eventual default established according to the<br />
provisions in explanatory note 4.<br />
(IV) Project volatility risk<br />
The company's economic and financial performance is<br />
dependent on the supply of steel pipes for infrastructure<br />
projects in the petroleum, petrochemical, gas and sanitation<br />
industries.<br />
c. Market Value<br />
The Company and its subsidiaries evaluate their book assets<br />
and liabilities in relation to market values using available<br />
information and appropriate methodologies, a procedure<br />
requiring considerable judgment and reasonable estimates<br />
to produce the most suitable realizable value. The use<br />
of different market assumptions and / or methodologies<br />
for estimates may have a material effect on the estimated<br />
realizable values.<br />
209,271<br />
8,327<br />
217,598<br />
(1,262)<br />
(37,344)<br />
(38,606)<br />
Parent company Consolidated<br />
211,336<br />
15,554<br />
226,890<br />
(1,262)<br />
(9,426)<br />
(10,688)<br />
The market values of financial investments and loans and<br />
financing were calculated based on the current value of the<br />
respective contracts, using indices and interest rates applicable<br />
to instruments of a similar nature, terms and risks.<br />
The book value of the financial instruments is equivalent<br />
to their market value.<br />
19. Insurance Cover<br />
It is the policy of the Company and its subsidiaries to contract<br />
insurance cover against the risk of fire for plant and<br />
equipment and inventories subject to risk for amounts<br />
considered sufficient to cover possible losses, considering<br />
the nature of the operation and based on advice from insurance<br />
consultants.<br />
79. Financial Statements <strong>2005</strong>
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