Annual report - HSE
Annual report - HSE
Annual report - HSE
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In March 2013, the company TEŠ drew the long-term EIB and EBRD loans for financing<br />
the construction of replacement Unit 6; consequently, the company’s and Group’s credit<br />
crunch lessened and the Group’s liquidity improved.<br />
On the basis of the above mentioned, we estimate the 2012 liquidity management as<br />
adequate.<br />
4.5.8.8.3 Currency risk<br />
Currency risk is a risk associated with transactions involving foreign currencies and is subject<br />
to changes in exchange rates. Currency risk in operations is smaller, since the majority<br />
of inflows and outflows are in domestic currency - euro. Currency risk occurs mostly in<br />
relation with exercising our primary activity, i.e. electricity trading in Hungary (purchases<br />
in HUF). The risk is managed through appropriate hedging strategy with the use of<br />
derivatives, namely with currency FX Forward concluded with commercial banks, by which<br />
the exchange rate of a foreign currency against the domestic currency is fixed. By fixation<br />
of the foreign exchange rate the company ensures the requested and known electricity<br />
price in EUR and at the same time the already known cash flow from payments in foreign<br />
currency. Currency swap transactions are concluded on the basis of standard contracts<br />
ISDA with commercial banks and it is estimated that the possibility of non-realisation of<br />
these transactions is minimal. The discussed transactions are concluded exclusively with<br />
the intention to hedge against risks and not for speculation purposes, while from the hedge<br />
accounting perspective they are considered as highly efficient, as the concluded currency<br />
hedging corresponds to all features of the hedged item.<br />
Other currencies are present in minimum amount and therefore the company does not<br />
perform sensitivity analysis for the change in foreign exchange rates, since the change in<br />
exchange rate would not significantly affect the profit or loss.<br />
In 2012, the following exchange rates were used to convert assets and liabilities:<br />
in €<br />
Country Currency designation Closing exchange rate in EUR for 2012 Closing exchange rate in EUR for 2011<br />
Czech Republic CZK 25.1510 25.7870<br />
Bulgaria BGN 1.9558 1.9558<br />
Bosnia and Herzegovina BAM 1.9558 1.9558<br />
Croatia HRK 7.5575 7.5370<br />
Hungary HUF 292.3000 314.5800<br />
Macedonia MKD 61.4870 62.0600<br />
Romania RON 4.4445 4.3233<br />
Serbia RSD 113.3900 103.6300<br />
Switzerland CHF 1.2072 1.2156<br />
USA USD 1.3194 1.2939<br />
<strong>Annual</strong> Report <strong>HSE</strong> 2012<br />
4 Financial Report of the company <strong>HSE</strong><br />
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