ANNUAL REPORT 2008 - Gorenje Group

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3.9 FINANCIAL MANAGEMENT
The uniform financial policy of controlling operating liabilities and receivables when financing and
investing, in finance risk management and in co-operation with banks and insurance companies.
The performance of the financial policy in relation to banks and other financial institutions, control
of management processes with financial risks and optimisation of cash management are in the
competence of the parent company. The starting conditions of the financial operation are valid for
all companies of the Group under consideration of the characteristics and particularities of individual
national environments where they operate.
Short-term solvency of the Group assured by the efficient cash management and appropriate
height of lines or short-term cash flow management for short-term cash flow regulation. Special attention
was paid to the systematic planning of the anticipated cash flows at the Group level.
• Long-term investment ratio of long-term assets by long-term sources amounted
to 113.8 %.
• Free liquidity resources were available to Group companies in the amount of EUR
76.6 million in form of cash and cash equivalents (EUR 24.1 million) and unused,
granted revolving loans (EUR 52.5 million).
• The parent company strengthened the role in the financing of the Group by the provision
of required financial resources below the market favourable conditions to all
companies. In Slovenia it actively participated in short-term financing of the companies.
• Financial liabilities increased by EUR 175.3 million or 56.1 %. The growth in liabilities
is partly a consequence of the purchase of the company Atag that was financed
by taking a long-term loan and by disposal of own shares and partly it is a consequence
of investments higher than amortisation / depreciation expense and the
growth in working capital.
• Financial liabilities amounted to EUR 487.8 million, of which the amount of loans
received to EUR 468.2 million.
• Maturity of loans received: 46.2 % of long-term loans and 53. 8% of short-term
loans.
• Decline in liquidity in the inter-bank market in the last quarter of the year dramatically
reduced the availability of long-term financial resources. Taking of mostly shortterm
financial resources and thus the change in the structure of loan maturity.
• Currency classification of the loans received: EUR (94.5 %), CZK (3.7 %) and other
currencies (1.8 %).
• Structure of financial liabilities with respect to the type of interest: share of fixed
interest rates 37.6 %, as a consequence of maturity of part of transactions for the
security against interest risk and higher borrowing levels. Other interest rates are
changeable, mostly linked to EURIBOR.
• Increase in long-term and short-term investments due to the increase in short-term
loans granted to business partners.
• Increase in value of investment property and other investments.
• Impairment of the value of market securities in the total amount of EUR 4.8 million
due to the general reduction in the value of market securities with the influence on
the income statement.
An international insurance programme (insurance of property and responsibility) has been concluded
in the field of insurance since 2006. It includes the majority of Group companies and it is
based on contractual relations with the insurance company Generali, d.d., and its contractual partners.
The insurance conditions in the field of transport and car insurance of the Triglav insurance
company were harmonised for all the companies in Slovenia. The programmes concluded have
been annually up-graded and adjusted to the needs of operation and risks.