Page 74 - Annual Report 2015 EN
P. 74
Financial Statements
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 and Available-for-sale financial
asset 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 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.
2.22 Associates
Associates are all entities over which the Company has significant influence but not control, generally
accompanying a shareholding of between 20.0% and 50.0% 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 2015 represents
less than 1.0% 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
Company 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
operates under specific rules that have been approved by the Board of Directors.
The recent developments relating to the macroeconomic and financial environment in Greece have not
significantly affected the operations and financial performance of the Company.
Historically, the Company has demonstrated increased resilience in the years of macroeconomic
instability, combining financial performance with operational excellence and quality of services and
therefore Management does not expect that the operations and financial position of the Company will
be significantly affected in the foreseeable future. Despite all adversities, past and future, Management
has and will continue to assess the situation and its possible impact, adjusting its operating strategy
whenever necessary, in order to deliver financial and non-financial value to shareholders and other
stakeholder parties.
3.1.1 Exchange rate risk
Exchange rate risk occurs if future business transactions, recognized assets and liabilities and net
investments in activities outside the euro zone are expressed in a currency other than the functional
currency of the Company (euro).
The Company’s exposure to foreign exchange risk is very limited since its business is substantially
transacted in its functional currency.
3.1.2 Cash ow and fair value interest rate risk
The cash flow interest rate risk is the risk of fluctuations in the future cash flows of a financial
instrument as a result of fluctuations in the market interest rate.
The Company has interest-bearing assets in the form of cash and cash equivalent (short term time
deposits and other highly liquid investments), thus profits and cash flows from investment activities
are dependent in market interest rates. During 2015 the Company’s cash and cash equivalent (short
term time deposits and other liquid investments) earned an effective interest rate (referring to yield
Financial Statements as at 31 December 2015 (Amounts in Euros unless otherwise stated)
31 of 56
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 and Available-for-sale financial
asset 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 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.
2.22 Associates
Associates are all entities over which the Company has significant influence but not control, generally
accompanying a shareholding of between 20.0% and 50.0% 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 2015 represents
less than 1.0% 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
Company 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
operates under specific rules that have been approved by the Board of Directors.
The recent developments relating to the macroeconomic and financial environment in Greece have not
significantly affected the operations and financial performance of the Company.
Historically, the Company has demonstrated increased resilience in the years of macroeconomic
instability, combining financial performance with operational excellence and quality of services and
therefore Management does not expect that the operations and financial position of the Company will
be significantly affected in the foreseeable future. Despite all adversities, past and future, Management
has and will continue to assess the situation and its possible impact, adjusting its operating strategy
whenever necessary, in order to deliver financial and non-financial value to shareholders and other
stakeholder parties.
3.1.1 Exchange rate risk
Exchange rate risk occurs if future business transactions, recognized assets and liabilities and net
investments in activities outside the euro zone are expressed in a currency other than the functional
currency of the Company (euro).
The Company’s exposure to foreign exchange risk is very limited since its business is substantially
transacted in its functional currency.
3.1.2 Cash ow and fair value interest rate risk
The cash flow interest rate risk is the risk of fluctuations in the future cash flows of a financial
instrument as a result of fluctuations in the market interest rate.
The Company has interest-bearing assets in the form of cash and cash equivalent (short term time
deposits and other highly liquid investments), thus profits and cash flows from investment activities
are dependent in market interest rates. During 2015 the Company’s cash and cash equivalent (short
term time deposits and other liquid investments) earned an effective interest rate (referring to yield
Financial Statements as at 31 December 2015 (Amounts in Euros unless otherwise stated)
31 of 56
