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Finance management

In the 12 months ended 31 December 2016 ELEKTROBUDOWA SA Group was maintaining the policy of financing its operations from its own funds, partly supported by borrowed capital in the form of liabilities, and also by the released overdraft facilities in current accounts and the working capital loan.

As at 31 December 2016, the Group had maintained overdraft facilities in current accounts (68.5 million PLN), working capital loan limit (36.0 million PLN) and the limit for credit cards (0.2 million PLN), in the total amount available up to 104.7 million PLN. Total liability towards banks as at 31 December 2016 due to used amount of working capital loan was 34.9 million PLN.

As at 31 December 2015, the Group had maintained overdraft facilities in current accounts (108.7 million PLN), working capital loan limit (77.5 million PLN) and the limit for credit cards (0.2 million PLN), in the total amount available up to 186.4 million PLN. Total liability towards banks as at 31 December 2015 due to used amount of working capital loan was 45.9 million PLN.

Cooperation with several banks ensures even employment of the committed capital and maintaining a suitable level of funds for everyday operations. Activity of the Group in respect of foreign exchange transactions was determined by the exchange rates of basic currencies, EUR and USD. The Group’s policy is to use natural hedging of foreign currency exchange risk, by offsetting proceeds and expenses realized in foreign currencies.
ELEKTROBUDOWA SA Group maintained wide cooperation with banks and insurance companies with respect to guarantees, which is reflected in the guarantee lines granted to the entities of the Group for contract guarantees such as bid bonds, advance payment bods, performance bonds and warranty bonds, and also guarantees to secure claims pursued in court and to guarantee timely payment of debt.
The most substantial scope of agreements with banks concerns lines of guarantee within multipurpose limits granted up to the total amount of 660.0 million PLN (of which line of credit: 104.5 million PLN, line of guarantees 555.3 million PLN and limit for credit cards: 0.2 million PLN). As at 31 December 2016 the guarantee lines were utilized in the amount of 318.3 million PLN for contract bonds.

As at 31 December 2015, total amount of agreements with banks was capped at 678.6 million PLN,
of which line of credit:186.2 million PLN, guarantee line: 492.2 million PLN and limit for credit cards: 0.2 million PLN. The guarantee lines were utilized in the amount of 383.7 million PLN for contract bonds.
Within the cooperation with insurance companies, ELEKTROBUDOWA SA Group was granted an aggregate limit of 225.5 million PLN in respect of guarantees, of which 65.4 million PLN was utilized as at 31 December 2016.

At 31 December 2015, the aggregate limit for contract bonds granted the Group entities by insurance companies amounted to 186.0 million PLN, of which 72.3 million PLN was utilized.

Assessing the level of funds owned by the Group and available credit limits, as well as the amounts of expected income and expenses, it must be pointed out that the resources will allow the Group to finance both the investments planned for the first half of 2017 and also its current operating activity, with no exposure to risk of destabilizing the financial liquidity of the Group.

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