pdf (22.8 MB) - METRO Group

METRO GROUP : ANNUAL REPORT 2011 : BUSINESS
→ GROUP MANAGEMENT REPORT : 4. FiNANciAl ANd AssET POsiTiON
607
4. Financial and asset position
Financial management
Principles and objectives of financial activities
The financial management of MeTRo GRoUp ensures the
permanent liquidity supply of the Company, reduces financial
risks where economically feasible and grants loans to
Group companies. These activities are monitored and performed
centrally by MeTRo aG for the Group through guarantees
and letters of comfort. The objective is to ensure
that Group companies can cover their funding requirements
in a cost-efficient manner and, where possible, via
the international capital markets. This applies to the operating
activities as well as to investments. as a matter of
principle, MeTRo aG bases its selection of financial products
on the maturities of the underlying transactions.
Intra-Group cash pooling reduces the amount of debt and
optimises the money market and capital market investments
of MeTRo GRoUp, which has a positive effect on net
interest income. Cash pooling allows the surplus liquidity
of individual Group companies to be used to fund other
Group companies internally. MeTRo GRoUp’s financial
activities are based on a financial budget for the Group, which
covers all relevant companies and is updated monthly. In
addition, MeTRo aG provides 14-day liquidity plans.
MeTRo aG’s current long-term investment grade rating of
BBB/Baa2 and short-term rating of a-2/p-2 ensure access to
capital markets.
The following principles apply to all Group-wide financial
activities:
Financial unity
By presenting one face to the financial markets, the Group
can optimise financial market conditions.
Financial leeway
In our relationships with banks and other business partners
in the financial arena, we consistently maintain our leeway
with regard to financial decisions to stay independent. In the
context of our bank policy, limits have been defined to ensure
that the Group can replace one financing partner with another
at any time.
→ p. 108
Centralised risk management
MeTRo GRoUp’s financial transactions serve to cover our
financing requirements and are concluded to hedge risks
related to underlying business transactions. MeTRo GRoUp’s
total financial portfolio is centrally controlled by MeTRo aG.
Centralised risk monitoring
Changes in financial parameters, such as interest rate or
exchange rate fluctuations, can impact the financing activ ities
of MeTRo GRoUp. associated risks are regularly quantified in
the context of scenario analyses. open risk positions – for
example financial transactions without an underlying business
transaction – may be concluded only after the appropriate
approval has been granted by the Management Board
of MeTRo aG.
Exclusively authorised contractual partners
MeTRo GRoUp conducts financial transactions only with contractual
partners who have been authorised by MeTRo aG.
The creditworthiness of these contractual partners is tracked
on a daily basis based on their ratings and the monitoring of
their credit risk ratios. on this basis, the risk controlling unit
of MeTRo aG’s finance department continuously monitors the
arranged limits.
Approval requirement
as a matter of principle, all financial transactions of
MeTRo GRoUp are conducted with MeTRo aG. In cases
where this is not possible for legal reasons, these transactions
are concluded directly between a Group company and a
financial partner after MeTRo aG has given its approval.
Audit security
The two-signature principle applies within our Company. all
processes and responsibilities are laid down in Group-wide
guidelines. The conclusion of financial transactions is sep arated
from settlement and controlling in organisational terms.
Ratings
Ratings evaluate the ability of a company to meet its financial
obligations. They communicate the creditworthiness of
a company to potential debt capital investors. In addition,
ratings facilitate access to international capital markets.
MeTRo GRoUp is continuously analysed by two leading international
rating agencies – Moody’s and standard & poor’s.