Page 71 - Annual Report 2013
P. 71
Annual Report 2013
2.19 Leases
Leases under which a significant portion of the risks and rewards of ownership are retained by the
lessor are classified as operating leases. Payments made by the Company under operating leases (net
of any incentives received from the lessor) are charged to the income statement on a straight-line basis
over the period of the lease.
The Company does not lease any material property, plant or equipment under finance leases under
which it substantially retains all the risks and rewards of ownership.
2.20 Dividend distribution
Dividend distribution to the Company’s shareholders is recognised as a liability in the Company’s finan-
cial statements in the period in which the dividends are approved by the Company’s shareholders.
2.21 Fair value estimation and hierarchy
Company uses the following hierarchy for determining and disclosing the fair value of financial instru-
ments by valuation technique:
• Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities.
• Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value
are observable, either directly or indirectly.
• Level 3: techniques which use inputs which have a significant effect on the recorded fair value that are
not based on observable market data.
The carrying value of receivables and payables are assumed to approximate their fair values at the
balance sheet date. The fair value of financial assets held to maturity is assessed using quoted prices
in active market (Level 1). The fair value of loans is estimated by the method of discounting the future
contractual cash flows at the current market interest rate interest rate swaps for the average duration of
the loan which corresponds to the average duration of the relevant debt obligation (Level 2). During the
year there were no transfers between Level 1 and Level 2 and no transfers into and out of Level 3 for the
measurement of fair value. The Company has no financial assets or liabilities measured at fair value at
the balance sheet date.
2.22 Associates
Associates are all entities over which the Company has significant influence but not control, generally
accompanying a shareholding of between 20% and 50% of the voting rights. Investments in associates
are initially recognised at cost and subsequently at cost less any impairment losses. Dividend income is
recognised when the right to such income is established.
The Company’s investment in its associate amounts to €3,25m as of 31 December 2013 represents
less than 1% of total assets at that date. This investment has not been accounted for under the equity
method of accounting on the basis that it is not considered to be material to the Company’s operations
and the departure from IAS 28 is unlikely to influence the economic decision of the users of these
financial statements.
3 Financial risk management
3.1 Financial risk factors
The Company is exposed to financial risk, such as market risk (fluctuations in exchange rates, interest
rates and price risk), credit risk and liquidity risk. The general risk management program of the Com-
pany focuses on the unpredictability of the financial markets, and attempts to minimize their potential
negative influence on the financial performance of the Company.
The financial risk management of the Company is performed internally by a qualified unit, which oper-
ates under specific rules that have been approved by the Board of Directors.
Financial Statements as at 31 December 2013 (Amounts in Euros unless otherwise stated). 30 of 58
2.19 Leases
Leases under which a significant portion of the risks and rewards of ownership are retained by the
lessor are classified as operating leases. Payments made by the Company under operating leases (net
of any incentives received from the lessor) are charged to the income statement on a straight-line basis
over the period of the lease.
The Company does not lease any material property, plant or equipment under finance leases under
which it substantially retains all the risks and rewards of ownership.
2.20 Dividend distribution
Dividend distribution to the Company’s shareholders is recognised as a liability in the Company’s finan-
cial statements in the period in which the dividends are approved by the Company’s shareholders.
2.21 Fair value estimation and hierarchy
Company uses the following hierarchy for determining and disclosing the fair value of financial instru-
ments by valuation technique:
• Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities.
• Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value
are observable, either directly or indirectly.
• Level 3: techniques which use inputs which have a significant effect on the recorded fair value that are
not based on observable market data.
The carrying value of receivables and payables are assumed to approximate their fair values at the
balance sheet date. The fair value of financial assets held to maturity is assessed using quoted prices
in active market (Level 1). The fair value of loans is estimated by the method of discounting the future
contractual cash flows at the current market interest rate interest rate swaps for the average duration of
the loan which corresponds to the average duration of the relevant debt obligation (Level 2). During the
year there were no transfers between Level 1 and Level 2 and no transfers into and out of Level 3 for the
measurement of fair value. The Company has no financial assets or liabilities measured at fair value at
the balance sheet date.
2.22 Associates
Associates are all entities over which the Company has significant influence but not control, generally
accompanying a shareholding of between 20% and 50% of the voting rights. Investments in associates
are initially recognised at cost and subsequently at cost less any impairment losses. Dividend income is
recognised when the right to such income is established.
The Company’s investment in its associate amounts to €3,25m as of 31 December 2013 represents
less than 1% of total assets at that date. This investment has not been accounted for under the equity
method of accounting on the basis that it is not considered to be material to the Company’s operations
and the departure from IAS 28 is unlikely to influence the economic decision of the users of these
financial statements.
3 Financial risk management
3.1 Financial risk factors
The Company is exposed to financial risk, such as market risk (fluctuations in exchange rates, interest
rates and price risk), credit risk and liquidity risk. The general risk management program of the Com-
pany focuses on the unpredictability of the financial markets, and attempts to minimize their potential
negative influence on the financial performance of the Company.
The financial risk management of the Company is performed internally by a qualified unit, which oper-
ates under specific rules that have been approved by the Board of Directors.
Financial Statements as at 31 December 2013 (Amounts in Euros unless otherwise stated). 30 of 58
