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7.3.1. Credit risk

Credit risk is defined as the probability of failure by a Group’s trading partner to meet its obligations on time or failure to meet such obligations at all, or the probability that the Group may be unable to recover any monies that have been deposited at a bank or otherwise invested.

The PGNiG Group’s credit exposure arises mostly in connection with the following items:

Maximum risk exposure, equal to the carrying amount of the item 2016 2015
Cash and cash equivalents (cash at banks and bank deposits) 5,829 6,022
Non-current restricted cash 190 217
Trade receivables 3,516 2,541
Loans advanced 249 215
Positive value of derivative financial instruments 623 709
Total 10,407 9,704

As a rule, the Group concludes transactions in financial instruments with multiple entities with high creditworthiness. The key criteria applied by the Group in the selection of trading partners include their financial standing as confirmed by rating agencies, as well as their respective market shares and reputation.

Credit risk exposure associated with the individual items specified above is determined by reference to the carrying amounts of those items.