Trade credit
In cooperation with the customers, the Group companies apply deferred payment terms with payment periods from a few to 20 days (trade credit). The credit is usually not secured by the borrower in a manner ensuring 100% guarantee of obtaining the funds. Consequently, the Group is exposed to the risk of complete or partial insolvency of a given customer or delay in payment.
Sale to reliable, tested customers helps minimise the risk. In addition, the Group insures the trade credit in professional companies providing such types of services. As at the balance sheet date, over 60% of the Group trade receivables not covered by write-downs were insured.
There is no customer whose balance of receivables or liabilities would exceed 10% of receivables or liabilities disclosed in the balance sheet.
Cash
The Polish companies of the Group are served by the banks operating in Poland, controlled both by the domestic and foreign capital. The foreign companies prefer being served by banks belonging to the same capital groups as the banks cooperating with the Capital Group in Poland. The ratings of the banks may not be lower than BB or BA2 (by Moody’s, S&P, Fitch, or Eurorating rating agencies). To minimise the liquidity loss risk, the Group avails of the services of a few banks as well as monitors their financial standing by way of ratings verification.
