IBERSOL Annual Report and Consolidated Accounts 2017

ANNUAL REPORT 2017 tion of credit sales, the Group has started to monitor its accounts receivable more regularly in order to: i) control the credit granted to customers; ii) analyze the age and recoverability of receivables; iii) analyze the risk profile of customers; d) Liquidity risk As already mentioned, the recent situation of the financial markets has given a new impor- tance to liquidity risk. Systematic financial planning based on cash flow forecasting in diffe- rent scenarios and for periods of more than one year has become an imperative. Short-term cash management is based on the annual plan, which is reviewed quarterly and daily adjus- ted. In line with the dynamics of the underlying businesses, the Group’s Treasury has been improving a flexible management of commercial paper and the negotiation of lines of credit that are available at all times. The policy of open dialogue with all the financial partners has allowed the Group to maintain high standart of trust relationships. As this business is characterized by a financial imbalance, with current liabilities greater than current assets, the Group, in detriment of cost, favors the maintenance of contracted lines of financing, even if little used, to ensure any short-term needs. e) Capital risk The Company seeks to maintain a level of own capital appropriate to its principal business (cash sales and supplier credit) and ensure its continuity and expansion. The balance of the capital structure is monitored based on the financial leverage ratio (defined as net remunerated debt / net remunerated debt + equity) with the aim of staying between 35% -70%. Environmental This area of risk management is coordinated by the Quality Department and its main focus is on implementing the policy deriving from the Ibersol Sustainability Principles which ensures that processes and procedures are applied in the environment. Adoption of good environmental management practices is a matter of concern to Ibersol’s Board of Directors, which promotes a responsible, proactive approach to resource and waste management. The procedures set forth in Ibersol’s Standards Manual as regards environmental matters are focused mainly on the rational use of electricity and the recycling of used oil and packaging. 169