Annual report - HSE

Changes in allowances for short-term 2012 2011
financial receivables and loans
Balance as at 1 January 449,655 449,655
Collected receivables previously written off and loans -449,655 0
Balance as at 31 December 0 449,655
Changes in allowances for short-term operating receivables 2012 2011
Balance as at 1 January 2,736,960 2,130,436
Written-off receivables collected -353,318 -573,464
Allowances for receivables 5,052,808 1,499,635
Final write-down of receivables -127,374 -319,647
Balance as at 31 December 7,309,076 2,736,960
in €
in €
At the end of 2012, the Group companies possessed a total amount of EUR 7,309,076 of
doubtful short-term operating receivables.
In 2012, the companies were repaid doubtful and disputable short-term operating
receivables in total amount of EUR 353,318.
The allowances for short-term operating receivables mainly refer to receivables that were
due to the Group companies from construction companies, and total EUR 5,052,808.
As at 31 December 2012, the Group had EUR 11,569,608 of overdue short-term operating
liabilities it has already settled.
5.5.8.8.2 Liquidity risk
During financial crisis the liquidity risk management is of extreme importance. The Group
companies manage the liquidity risk successfully, which enables them to ensure optimal
solvency in the settlement of their current liabilities. This comprises diligent monitoring
and planning of short-term solvency, which is provided through a regular coordination and
planning of cash flows on a daily, monthly and annual basis. Due to deteriorated payment
discipline, which is the result of severe economic conditions, all companies, but especially
the controlling company, focus on the risks arising from potential delays in payments by
the customers.
For the purpose of optimisation of companies’ liquidity, cash management is implemented
within the Group. It is performed in accordance with the adopted Internal Regulations of the
Group companies for cash management and cash pooling. The Group’s cash management
consists of borrowing among the Group companies. The primary sources of financing of
short-term deficits of Group companies are surpluses of available cash in other Group
companies. In order to manage liquidity risk, the companies have also credit lines approved
with commercial banks in form of revolving loans and limits on bank accounts. Short-term
liquidity surpluses are allocated to safe and liquid short-term deposits at commercial
banks through cash pooling on treasury account.
5 Financial Report of HSE Group
Annual Report HSE 2012
208
In terms of liquidity risk management, the year of 2012 was one of the most challenging
years for the Group, since the company TEŠ is the investor in the largest Slovenian
investment – construction of the 600 MW replacement Unit 6 in TEŠ. Delays in obtaining
the government guarantee for long-term loans from EIB in the amount of EUR 440
million, had a huge impact on the liquidity of the companies HSE and TEŠ, as well as on
other companies of the HSE Group. As a matter of fact, all activities were aimed at ensuring
short-term bridge financing of the TEŠ’s liabilities arising from the discussed project,
before the company was able to draw the long-term loans from the financial institutions
EIB and EBRD. Since in line with provisions of the contracts with the two banks TEŠ cannot
obtain short-term loans on financial markets, it was forced to bridge financing of the Unit
6 project through borrowing within the scope the HSE Group cash management and with
proper assets. As the Group does not possess a sufficient amount of available funds to