RISK MANAGEMENT AND CONTROL 04 RISK FACTORS
RISK MONITORING AND MANAGEMENT
Credit risk Credit risk represents the risk of financial loss to the group in the case of a customer or counter-party to a financial instrument failing to meet its contractual obligations. This risk essentially results from customer debts, investment securities and guarantees given. Customers and other debtors Aéroport de Paris’ exposure to credit risk is mainly influenced by the individual characteristics of the customers. The Direction Générale de l’Aviation Civile (DGAC) issues traffic rights to airlines without informing Aéroports de Paris on their financial solvability. Figures concerning receivables and the age of current receivables are detailed in note 9 to the chapter 20 of Registration document “Analysis of risks related to financial instruments”.
The Debt and Cash division regularly analyses the counterparties and monitors the financial ratings given by rating agencies.
The Company’s policy is to monitor customer non- payments on a daily basis. Financial analysis may be conducted on request from sales staff. Except for agreements with French government authorities and wholly-owned subsidiaries, contracts between Aéroports de Paris and its customers contain guarantees (a deposit cheque, bank endorsement or on-demand bank guarantee, etc. ). In addition, customer balances are the subject of permanent monitoring. As a result, the group’s exposure to bad debts is not significant. Aéroports de Paris determines a level of write-down that represents its estimate of potential losses in relation to customer debts and other debtors, as well as investments. The main component of this write-down corresponds to the potential losses linked to individualised significant risks. The counter-party risk linked to these investments is considered to be marginal. For derivative instruments, the group’s exposure is linked to possible default on the part of the third parties involved, mainly leading financial institutions.
Investments With regard to credit risk relating to the group’s other financial assets (cash, cash equivalents, available-for-sale financial assets and certain derivative instruments), Aéroports de Paris invests its surplus cash in Euro Money market funds subject to the provisions of French law. The maximum exposure is equal to the book value of these instruments. Guarantees given Financial guarantees are included in off-balance sheet commitments (see note 15 to the chapter 20).
The group’s policy is only, where possible, to grant financial guarantees on behalf of wholly-owned owned subsidiaries. At 31 December 2017, there are several guarantees granted by Aéroports de Paris on behalf of ADP Ingénierie and ADP International for the benefit of different clients of these subsidiaries.
AÉROPORTS DE PARIS REGISTRATION DOCUMENT 2017
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