2012 Annual Report - Italcementi Group

At December 31, 2012 lines of credit and loans subject to covenants stood at 498 million euro of total drawings
represented by gross financial liabilities (2,640 million euro at December 31, 2012 expressed at nominal value,
excluding the fair value effects of derivatives) and 1,575 million euro of total undrawn immediately available
lines of credit (1,682 million euro at December 31, 2012).
At December 31, 2012 the Group complied with all contractual commitments; covenant-related financial ratios
were within the contractual limits agreed by the loans in question. The Group expects to comply with its
covenants for the next 12 months and will provide information as appropriate should its financial situation
deteriorate.
22.2.3 Credit risk
In compliance with Group procedures, customers electing extended terms of payment are vetted for credit
worthiness before and during the life of the contract. Credit checks take the form of customer-balance
monitoring by the administrative department, whose procedures also regulate provisions for overdue
receivables at regular intervals.
The concentration of trade credit risks is limited by virtue of the Group’s broadly based and uncorrelated
customer portfolio. For this reason, management believes that no further provisions for credit risks will be
necessary beyond the allowances normally provided for uncollectible and doubtful receivables.
22.2.4 Counterparty risk
Currency and interest-rate instruments are transacted only with counterparties with high ratings, selected on
the basis of a number of criteria: ratings attributed by specialist agencies, assets and equity as well as the
nature and maturity of transactions. The majority of counterparties are leading international banks.
No financial instruments are negotiated with counterparties in geographical regions exposed to political or
financial risks. All counterparties are in Western Europe or in the USA.
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