Trinidad Cement Limited
Annual Report 2012
76
Notes to the Consolidated Financial Statements (continued)
For the year ended 31 December, 2012
(Expressed in Thousands of Trinidad and Tobago Dollars, except where otherwise stated)
23. Subsidiary undertakings
(continued)
Key management compensation of the Group
Key management personnel are those persons having authority and responsibility for planning, directing and controlling
the activities of the Group.
2012
2011
$
$
Short-term employment benefits
28,302
24,331
Pension plan and post retirement benefits
637
653
24. Financial risk management
Introduction
The Group’s activities expose it to a variety of financial risks, including the effects of changes in debt prices, interest rates,
market liquidity conditions and foreign currency exchange rates which are accentuated by the Group’s foreign operations,
the earnings of which are denominated in foreign currencies.Accordingly, the Group’s financial performance and position
are subject to changes in the financial markets. Overall risk management measures are focused on minimising the
potential adverse effects on the financial performance of the Group of changes in financial markets.
Risk management structure
The Board of Directors is responsible for the overall risk management approach and for approving the risk strategies,
principles andpolicies andprocedures.Day today adherence to riskprinciples is carriedout by the executivemanagement
of the Group in compliance with the policies approved by the Board of Directors.
Credit risk
Credit risk is the risk that a counter-party will not meet its obligations under a financial instrument or customer contract,
leading to a financial loss.The Group is exposed to credit risks from its operating activities (primarily for trade receivables)
and from its financing activities, including deposits with banks and financial institutions, foreign exchange transactions
and other financial instruments.
Significant changes in the economy, or in the state of a particular industry segment that represents a concentration in the
Group’s portfolio, could result in losses that are different from those provided at the statement of financial position date.
Management therefore carefully manages its exposure to credit risk.
The Group structures the level of credit risk it undertakes by placing limits on the amount of risk accepted in relation
to one customer, or group of customers, and to geographical and industry segments. Such risks are monitored on an
ongoing basis and limits on the levels of credit risk that the Group can engage in are approved by the Board of Directors.
Exposure to credit risk is further managed through regular analysis of the ability of debtors and financial institutions to
settle outstanding balances, meet capital and interest repayment obligations and by changing these lending limits when
appropriate. The Group does not generally hold collateral as security.
The following table shows themaximumexposure to credit risk for the components of the statement of financial position:
Gross
Gross
maximum
maximum
exposure
exposure
2012
2011
$
$
Trade receivables
121,316
126,434
Cash at bank
43,061
57,755
Credit risk exposure
164,377
184,189
