Annual report 2005 - Sava dd

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Tangible fixed assets are mainly insured against fire,
machinery breakdown, burglary and certain other hazards.
Due to increased investments in preventive action the risk
exposure to insured hazards is becoming lower.
In production and trading companies receivables are
insured as well. Insurance against production standstills,
civil and occupational liabilities and product liabilities
are becoming increasingly important.
Financial risks
The financial policy and thereby financial risk
management in the Sava Group is adopted by the
financial commission of Sava d.d. and confirmed by the
Board of Management of Sava d.d. The financial policy
determines financial relations within the business
system, as well as relations to banks and other partners
in the business system.
The sensitivity of the Sava Group to financial risks is
described in the financial report of the annual report.
Liquidity risks
Owing to its good rating the Sava Group experiences no
difficulties in providing means of solvency. It is
therefore in a position to acquire financial funds in the
banking system relatively easily and under favourable
conditions. The companies of the Sava Group hire loans
practically with all banks operating in Slovenia.
All types of insurance are systematically reviewed
annually in collaboration with the insurance company
and adapted to the operations of the Sava Group with
regard to the changes in the environment where we
operate and experience we have gained with the
insurance company.
The structural relation between long- and short-term
loans of the Sava Group did not change in 2005.
However, the relation between indebtedness in domestic
and foreign currency has changed, the reason being
lower interest rates for loans in foreign currency and a
stable relation between the euro and the Slovene tolar.
The financial function has been very efficiently
managed by cash and balanced liquidity by an active
allocation of cash surpluses and deficits between
companies.
In relation to the banking system, the Sava Group is
exposed as a whole, therefore the centralised
management of cash flows is essential. Due to relatively
low indebtedness of the entire Group we do not have any
problems with liquidity. One of the indicators for the
good Group rating is also the relation between long- and
short-term items in the balance sheet of the Sava Group.