Gschäftsbericht 2018

Galenica financial statements 2018 | 121 Finance Notes to the consolidated financial statements of the Galenica Group 25.2 Credit risk Credit risk management Credit risks arise when a customer or a third party fails to meet its contractual obligations and causes Galenica a financial loss. Credit risks are minimised and monitored by restricting business relations to known, reliable partners. Corporate policy ensures that credit checks are performed for customers who are supplied on credit. Trade receivables are subject to active risk management procedures. They are continually monitored and credit risks are reviewed in the process of reporting to management. Allowances for expected credit losses are made in accordance with uniform guidelines on the measurement of outstanding receivables. In addition, credit risks arise in relation to financial assets, comprising cash and cash equivalents, securities, loans and certain derivative financial instruments. The creditworthiness of the counterparties is regularly monitored and reported to management. in thousand CHF 2018 2017 Cash and cash equivalents (without cash on hand) 103,542 94,951 Trade and other receivables 371,648 386,754 Loans and other financial assets 13,908 12,580 Financial assets subject to credit risk 489,098 494,285 The financial assets subject to credit risk are primarily receivables. Galenica applies internal risk management guidelines to identify concentrations of credit risks. Galenica’s financial assets are not exposed to a concentration of credit risks. No past due financial assets have been renegotiated. Based on past experience, Galenica considers the creditworthiness of non-past due trade receivables to be good. Trade receivables past due are analysed on an ongoing basis. These receivables are accounted for using individual bad debt allowances, adjusted for forward-looking factors specific to the debtors and the economic environment.