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3.3 Liquidity risk
The Orell Füssli Group monitors its liquidity risk through prudent liquidity management by pursuing the principle of its maintaining a liquidity reserve in excess of daily and monthly needs for operating funds. This includes holding sufficient reserves of cash and cash equivalents, funding possibilities by maintaining an adequate amount of credit facilities and the ability to issue shares or bonds on the market. Rolling liquidity planning is therefore conducted based on expected cash flows and is regularly updated. It has to be borne in mind that the book Retailing divisions customarily hold higher liquidity reserves at year-end due to the seasonal nature of their businesses and these are reduced again in the following quarter. Average liquidity reserves are usually much lower than those held at year-end are.
Available liquidity as of the balance sheet date was as follows:
Liquidity reserves and credit facilities
| in CHF thousand | Notes | 31.12.2017 | 31.12.2016 | |||
|---|---|---|---|---|---|---|
| Cash and cash equivalents | 4.11 | 85,961 | 69,957 | |||
| Prepayments PoC / from customers | 4.21 | –31,628 | –29,433 | |||
| Other financial assets / liabilities | 4.14 / 4.23 | –3,625 | –1,086 | |||
| Cash and cash equivalents net | 50,708 | 39,438 | ||||
| Thereof assigned to other shareholders | 11,315 | 19,560 | ||||
| Disposable cash and cash equivalents | 39,393 | 19,878 | ||||
| Available lines of credit | 83,200 | 80,620 | ||||
| ./. Secured guarantees by banks (without prepayment guarantees) | –3,258 | –2,625 | ||||
| ./. Lines of credit used | –1,170 | –1,073 | ||||
| Total disposable cash and cash equivalents and unused lines of credit | 118,165 | 96,800 | ||||
As well as the committed credit facilities in local currencies, sufficient funds should also be available to conduct ordinary business activities in the future. In 2017, the credit facilities in the local currencies are unchanged compared with the prior year; however, they slightly increase in the reporting currency due to the changes in the EUR/CHF exchange rate.
If additional liquidity is required for significant investments in non-current assets and expenditure on future acquisitions, an adjustment of the credit facilities may be considered. However, a mortgage could also be taken out on the unencumbered property at Dietzingerstrasse in Zurich.