METKA ANNUAL REPORT 2015 - page 116-117

116
117
Annual Financial Statements for FY 2015
04
41.5 Cash Flow Risk and fair value risk due to changes in Interest Rate
The operating income and cash flow of Group is essentially independent from changes at prices of interest rate. The Group does not
possess short-term and long term debt, nor significant interest investment.
Group’s borrowing in 31 December 2015 is € 4.123 th. and concerns short-term borrowing. (See note 27, for further information).
Group’s policy is to continuously monitor interest rate trends and it’s financing needs
The following table illustrates the sensitivity of net result for the year and Group’s equity to a reasonable possible change in interest
rate by + 3% or – 3% (2014: +/- 3%). These changes are considered to be reasonably possible based on observation of current market
conditions.
42. Fair value of financial instruments
Analysis of financial assets and financial liabilities is as follows:
Fair Value Chain
The funds of each type of financial instruments of the balance sheet, valued at the fair value, for disclosure reasons, should
be registered at the following three levels, depending on their data quality used for the evaluation of the fair value:
Level 1:
Investments that are valued at fair value based on quoted (unadjusted) prices in active markets for identical assets
or liabilities.
Level 2:
Investments that are valued at fair value, using valuation techniques for which all inputs, which have a significant
fair value, are based (either directly or indirectly) on observable market data.
Level 3:
Investments that are valued at fair value, using valuation techniques, in which the data, significantly affecting the fair
value, are not based on observable market data.
41.6 Market Risk
The Group’s risk from changes in Group securities is considered
immaterial.
41.7 Other risks and uncertainties
a) Project’s performance and procurement risk
Possible risks which may arise from commercial transactions of
Group is the delay in procurement of plant and equipment and
the delay by subcontractors in the completion of construction
work which may result in overall delay of the completion of the
projects undertaken and therefore the imposition of penalties for
breaching the contractual terms.
Due to the nature of its projects, the Group is exposed to risks
related to the design, procurement, and commissioning of power
plants. The risks are due to:
- Mechanical damages to equipment
- Unforeseen construction circumstances
- Delays due to bad weather
- Unforeseen cost increases of material and equipment
Due to the Group’s long – standing experience, the strict selection
of sub-contractors and suppliers, the Audit Division and the qual-
ity assurance of these, is not exposed to major risks regarding
the proper implementation of works and supplies that assigns. In
addition, guarantees are required from co-suppliers, in the form
of bank assurance (performance, supply materials, etc.).
b) Insurance Risk
The insurance risk arises from the Company’s activities and is
associated with various events, including accidents, injuries,
damage in equipment and force majeure events. All of the above
events are most likely to cause delays and in worst-case cease of
work. Any such developments would hinder the financial position
and results of the Group.
In order to address the above risks, the Group proceeds to the
100% insurance against such risks to cover the total value of
projects and activities with all-risk insurance policies (Erection All
Risks & Construction All Risks), including civil liability, employer
liability, machinery, vehicles etc to renowned international insur-
ance firms.
However, the existing insurance policies cannot always fully
cover possible damages from unexpected events such as natural
disaster, war or terrorist attacks.
c) Risks arising from geopolitical factors
Apart from the Group’s activity in Syria, there is no foreseeable
risk for the Company due to geopolitical factors. Concerning the
activity in Syria, it should be clear that METKA is not subjected
into investor’s risks but to the risks of a manufacturer with as-
sured funding and confirmed credit. Nevertheless, the postpone-
ment of works for a certain period, the necessity for extremely
high safety measures, our extended presence in the Project, the
increased freight and insurance charges, and the extraordinary,
in general, conditions under which the Project continues today,
have increased significantly the cost although not to a degree
which hinders its continuation, expecting of course a compensa-
tion from the client for all proven over-expenses which are im-
posed to us for reasons outside our responsibility.
Amounts in thousands €
31/12/2015
31/12/2014
3%
-3%
3%
-3%
Earnings before tax
(128)
128
(137)
137
Equity
(91)
91
(101)
101
Group METKA
METKA S.A.
2015
2014
2015
2014
(Amounts in thousands €)
Non current assets
Financial Assets Available for Sale
8
31
-
22
Other Long-term Receivables
219,082
78,241
43,505
72,650
Total
219,090
78,272
43,505
72,672
Current assets
Financial assets at fair value through profit or loss
-
2,500
-
2,500
Trade and other receivables
546,046
401,603
471,116
365,052
Cash and cash equivalents
154,621
288,314
140,697
192,866
Total
700,667
692,416
611,813
560,417
Non-Current Liabilities
Long-term debt
1,778
2,090
-
-
Other long-term liabilities
56,856
38,186
27,320
38,186
Total
58,634
40,277
27,320
38,186
Current Liabilities
Short-term debt
2,345
2,350
-
-
Trade and other payables
430,215
297,857
333,038
288,761
Total
432,561
300,207
333,038
288,761
1...,96-97,98-99,100-101,102-103,104-105,106-107,108-109,110-111,112-113,114-115 118-119,120-121,122-123,124-125,126-127,128
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