LISI 2012 FINANCIAL REPORT
43
3
Consolidated financial statements
Companies
Head Office
Country
% of control
% interests
LISI AUTOMOTIVE KNIPPING Espana S.A.
Madrid
Spain
100.00
100.00
KNIPPING Ltd
Solihull
UK
100.00
100.00
LISI MEDICAL Division
LISI MEDICAL JEROPA INC.
Escondido (California)
USA
100.00
100.00
LISI MEDICAL
Neyron (Ain (01)
France
100.00
100.00
SEIGNOL / HUGUENY
Neyron (Ain (01)
France
100.00
100.00
LISI MEDICAL Orthopaedics
Hérouville Saint-Clair (14)
France
100.00
100.00
The following company was deconsolidated:
On June 1, 2012: Disposal of KNIPPING Umformtechnik GmbH
The following companies were merged:
On December 31, 2012 with retroactive effect as at January 1,
2012: CREUZET Morocco (absorbed) and INDRAERO Morocco
(absorbing).
2.4 FINANCIAL RISK MANAGEMENT
The Group is exposed to the following risks arising from the use
of financial instruments:
• credit risk,
• liquidity risk,
• market risk,
• currency risk.
This note provides information on the Group’s exposure to each
of the risks listed above, its objectives, policies, measurement
and risk management procedures, as well as its capital
management. Quantitative information is provided in other
parts of the consolidated financial statements.
The aim of the Group’s risk management policy is to identify
and analyze risks which the Group faces, to define the limits
within which risks must be confined and the controls to be
implemented, to manage risk and to ensure compliance with
the prescribed limits.
Cash flow management is centrally administered by the
Financial Department of the LISI Group. Cash flows aremanaged
through a convention on cash pooling with the objective
of maximum liquidity without risk. Current investments
are monetary mutual funds, structured investments and
remunerated deposits.
Credit risk
Credit risk is the Group's risk of financial loss in the event that a
customer or other party in a financial instrument fails to meet
their contractual obligations. This risk derives mainly from
trade receivables and securities held for sale.
Trade and other receivables
Group exposure to credit risk is mainly influenced by individual
customer profiles. The Group has a policy of monitoring trade
receivables, allowing it to constantly control its third party risk
exposure. The Group believes that the credit risk of write-off of
past due receivables is minimal.
Securities risk
LISI S.A’s share portfolio is not a speculative, rather of
investments and holdings, and accordingly no particular share
represents a risk. As at December 31, 2012, the Group's balance
sheet displays cash and cash equivalents for €30.6m. The cash
equivalents are made of marketable securities represented
by monetary mutual funds, invested in very short maturity
securities and representing no risk in capital, in accordance
with the Group's cash management policy. In accordance with
accounting rules, these instruments are valued at their market
price at year-end.
In accordance with IAS 32, own shares are recognized upon
their acquisition. Their value is deducted from equity and
changes in value are not recorded. When own shares are
acquired or disposed of, the shareholders' equity is adjusted
by the amount of the fair value of the securities bought or
sold. The acquisition of 121,223 own shares and the disposal
of 185,047 own shares in 2012 result in a €0.9m reduction of
shareholders' equity over the period.
Liquidity risk
Beyond maximizing the operating cash flows intended to fund
its expansion and the payment of dividends to shareholders,
the LISI Group insists upon maintaining very broad access
to liquidity to face its commitments and expenditure
