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The purpose and rules of risk management

ELEKTROBUDOWA Group manages its financial risk with the objective of limiting fluctuations of generated cash flows and gains from its operating activities to its acceptable level.

Main financial instruments used by the Group in 2017 comprised cash, short-term bank deposits, foreign exchange transactions, bank overdrafts and working capital loans, lease agreements.
The main purpose of these instruments is to support and finance the Group’s day-to-day operations through stabilization and neutralization of financial liquidity risk, foreign currency risk and interest risk, and also effective distribution of available financial assets. Other financial instruments, such as trade receivables and payables, arise in connection with current business operations and are their inseparable element.
The Group does not trade in financial instruments. All instruments referred to in this section serve as support for direct business processes associated with core business operations. The Group does not allow the financial instruments to be used for speculative purposes or other purposes not directly connected with core operating activity.

Major financial risks to which the Group is exposed include:

  • market risk (including foreign currency risk, change in fair value or cash flows due to interest-rate risk and price risk;
  • credit risk;
  • liquidity risk;
  • equity price risk.

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