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Financial resources management

In 2016 ELEKTROBUDOWA SA maintained 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, ELEKTROBUDOWA SA had overdraft facilities in the current accounts (67.5 million PLN), the 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 103.7 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, ELEKTROBUDOWA SA had overdraft facilities in the current accounts (107.7 million PLN), the 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 185.4 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 enables the COMPANY to evenly employ the committed capital and to maintain a suitable level of funds for everyday operations.

Activity of the Company relating to foreign exchange
transactions was determined by the exchange rates
of basic currencies, EUR and USD. The Company’s policy is to use natural hedging of foreign currency exchange risk, by offsetting proceeds and expenses realized in foreign currencies.

ELEKTROBUDOWA SA maintained wide cooperation with banks and insurance companies with respect to guarantees, which is reflected in the guarantee lines granted 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 654.0 million PLN (of which line of credit: 103.5 million PLN, line of guarantees 550.3 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 314.2 million PLN for contract bonds.

As at 31 December 2015, total amount of agreements with banks was capped at 672.6 million PLN, of which line of credit:185.2 million PLN, guarantee line: 487.2 million PLN and limit for credit cards: 0.2 million PLN.
The guarantee lines were utilized in the amount of 381.1 million PLN for contract bonds.

Within the cooperation with insurance companies,
ELEKTROBUDOWA SA was granted an aggregate limit of 220.5 million PLN in respect of guarantees, of which 64.9 million PLN was utilized as at 31 December 2016.

At 31 December 2015, the aggregate limit for contract bonds granted the Company by insurance companies amounted to 181.0 million PLN, of which 71.4 million PLN was utilized.

Assessing the level of funds owned by the Company 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 Company to finance both the investments planned for the first half of 2017 and also its current operating activity, with no risk of destabilizing the financial liquidity.

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