Annual report 2015

22 Report by the Board of Directors on Business Activities, Assets, and Financial Performance in 2015 and Information on the Business Plan Report on Assets and Financial Management Assets and Funds The Company’s total assets recognised as at 31 December 2015 in accordance with International Financial Reporting Standards (IFRS) amounted to EUR 270 770 thousand, a year- on-year decrease of EUR 13 143 thousand. The majority of the disposals of assets resulted from the decrease in current assets by EUR 10 991 thousand. The greatest decline was in all items of inventories, including purchased raw materials, semi-finished goods generated internally and finished prod - ucts in stock. The amount of receivables also decreased due to a fall in sales and sales prices. In contrast, the Company’s cash increased by EUR 2 978 thousand during the year. The other part of the disposals of assets (non-current assets) by EUR 2 152 thousand arose from a lower investment rate in 2015 compared to the amortisation of the Company’s prop - erty, plant and equipment. As regards the asset coverage funding, equity decreased slightly by EUR 1 033 thousand in 2015 as the dividends paid were higher than the profit generated in 2015. Neverthe - less, the structure of liabilities improved as the equity to to - tal assets ratio increased from 67.4% to 70.3%. The increase in the equity ratio resulted from a decline in total liabilities by EUR 12 111 thousand. Both long-term and short-term in - terest-bearing loans and borrowings decreased in 2015 by EUR 6 340 thousand and gearing was18.3% as at 31 Decem - ber 2015. As at 31 December 2015, the Company’s trade receivables amounted to EUR 27,086 thousand, a decline of EUR 4 240 thousand over the previous year. Trade payables also decreased (by EUR 6 096 thousand) and amounted to EUR 16 911 at the end of 2015. Throughout the period, overdue trade receivables and overdue trade payables did not exceed 13% of their total amount. The equity-to-total assets ratio increased to 70.3%. Financial Management To finance its operation and CAPEX needs, Železiarne Pod - brezová a.s. uses “club financing” provided by several bank - ing institutions, which helps to maintain financial stability, unify terms for its provision, and facilitate loan manage - ment. Under the integrated documentation, the Company can draw variable amounts from the financial funds provid - ed in the form of long-term loans, fixed tranches, or opera - tive financing through overdraft facilities. The club credit line contracted in 2013 with Tatra banka, a.s., Slovenská sporiteľňa a.s. and Komerční banka a.s., pobočka zahraničnej banky, was extended for 4 years in July 2015 un - til 31 July 2020 and accounts for 56% of the total credit limit available to the Company in 2015. The remaining credit limit is optimally complemented by separate contractual arrangements for short-term financing with three commercial banks and EXIMBANKA SR, which funds the Company’s investments. At the end of 2015, the Company had the option of drawing bank loans in the amount of EUR 56 800 thousand, and had drawn only EUR 32 493 thousand as at 31 December 2015. The average drawing during 2015 amounted to EUR 37 289 thousand and the bank credit exposure decreased year-on- year from 13.9% to 12.0%. Bank loan interest is derived from the Euribor variable market interest rate. Thanks to low (neg - ative) Euribor rates in 2015, the average interest rate was 1.68% p.a., which corresponds with the absolute amount of paid interest of EUR 622 thousand. As at 31 December 2015, the Company recorded no open derivative positions. Credit facilities are secured by a pledge over the tangible, intangible and financial assets of the Company. The value of the assets pledged in favour of a bank is proportionate to the Company’s credit exposure with a specific bank. To ensure financial stability, the Company received an in - tercompany loan in the amount of EUR 17.0 million, which significantly contributes to ensuring stability in financial management.