Bank deposits

In 2016, the Group’s short-term funds were primarily held in a current account with PKO Bank Polski S.A., linked under notional cash pooling with the Group companies’ overdraft sublimits. The arrangement enables the Group to optimise its interest income and expenses. Early in the fourth quarter of 2016, the Group implemented, and has used since, a physical cash pooling service, which replaced the notional cash pooling service provided by PKO BP. Physical cash pooling allows the Group to manage the global liquidity limit and optimise its allocation across the Group.

The Group also held free cash in short-term deposits placed with reputable banking institutions offering highest interest rates, in particular rates above 1M WIBOR pa on amounts netted off as part of the cash-pooling arrangement.

As at December 31st 2016, the Group held a total of PLN 1,211,890 thousand in bank accounts and short-term deposits, of which PLN 258,066 thousand was held in the parent’s consolidated current account with PKO BP linked to the physical cash pooling instrument. As at December 31st 2016, the funds were disclosed in the Group’s financial statements under the following items:

• cash and cash equivalents – PLN 641,711 thousand (maturing in up to 3 months);
• other current financial assets – PLN 579,066 thousand (maturing in more than 3 months but less than 1 year).

The Group earned a total of PLN 17,131 thousand (including PLN 748 thousand attributable to the parent) in interest income on fixed-term deposits and from cash pooling services.

As at December 31st 2016, the parent held a total of PLN 326,031 thousand in bank accounts and short-term deposits, of which PLN 258,066 thousand from subsidiaries was held in the parent’s consolidated current account with PKO BP linked to the physical cash pooling instrument. As at December 31st 2016, the funds were disclosed in the parent’s financial statements, under ‘cash and cash equivalents’ of PLN 326,031 thousand (maturing in up to 3 months).