Chrysler 2008 Annual Report Download - page 203

Out of Trade receivables and Other receivables totalling €6,763 million at 31 December 2008 (€6,434 million at 31 December 2007),
balances totalling €101 million (€94 million at 31 December 2007) have been written down on an individual basis. Of the remainder,
balances totalling €363 million (€367 million at 31 December 2007) are past due up to one month, while balances totalling €615
million (€476 million at 31 December 2007) are past due by more than one month.
The increase in the past due component reflects the difficult overall situation, which has also affected the Group’s customers and
dealers, in particular in Eastern Europe. The receivables positions concerned are monitored with particular care and, in general,
are covered by bank guarantees or reservation of title clauses.
Banco CNH Capital S.A. participates in various agricultural development/subsidy programs of the Brazilian government, provided
through the Banco Nacional de Desenvolvimento Economico e Social (“BNDES”). Under such programs BNDES provides credit
lines to Banco CNH, at subsidised interest rates, such that Banco CNH can provide subsidised financing to farmers for purchases
of agricultural equipment. In 2005, 2006 and 2007, in support of the struggling agricultural sector, the Brazilian government granted
a series of payment moratorium extending the loan payment terms and rescheduling, at the same time, the maturity of payments
due on the credit lines provided to Banco CNH and all other financial services participants in the program.
Also in 2008, the Brazilian government announced a new debt relief program that allowed an additional extension of credit terms
to the farmers, mostly subject to the payment of at least 40% of the amount due in 2008. As in previous moratorium, Banco CNH
and other financial institutions participating in the program would receive an equal extension of principal amounts due to BNDES.
As of 31 December 2008, the total remaining value of the outstanding financings and credit lines that are eligible under the
renegotiation programs, was approximately 2.6 billion Reais (€0.8 billion). The final maturity for the minimum downpayment has
been postponed to March 2009.
Liquidity risk
Liquidity risk arises if the Group is unable to obtain under economic conditions the funds needed to carry out its operations.
The two main factors that determine the Group’s liquidity situation are on one side the funds generated by or used in operating
and investing activities and on the other the debt lending period and its renewal features or the liquidity of the funds employed
and market terms and conditions.
As described in the Risk management section, the Group has adopted a series of policies and procedures whose purpose is to
optimise the management of funds and to reduce the liquidity risk, as follows:
centralising the management of receipts and payments, where it may be economical in the context of the local civil, currency and
fiscal regulations of the countries in which the Group is present;
maintaining an adequate level of available liquidity;
diversifying the means by which funds are obtained and maintaining a continuous and active presence on the capital markets;
obtaining adequate credit lines; and
monitoring future liquidity on the basis of business planning.
Details as to the repayment structure of the Group’s financial assets and debt are provided in Notes 19 and 27, which are entitled
respectively Current receivables and Debt.
Fiat Group Consolidated Financial Statements at 31 December 2008202