FINANCIAL RISK MANAGEMENT

Risk management objectives and policies

The risk management policy applied by the Group complies with the following procedure:

  • Risk assessment of the Group’s activities and operations,
  • methodology design and selection of appropriate financial products to minimize the risks and,
  • execution / implementation of the risk management strategy, according to the procedure approved by the management.

Financial Risk Factors

The Group is exposed to a limited range of financial risks. The most common risks and uncertainties that it may be subject to relate to market risks (fluctuations in foreign exchange rates, interest rates, price risks), as well as to credit risks, liquidity risks and cash flow risks.

The Group’s general risk management policy focuses primarily on the management of risks related to good project execution, credibility and efficient procurement. Subsequently, priority is given to the credit risks and ultimately market risks.

Risk exposure is managed through the Group’s Finance Division, Projects Division and Quality Assurance Division.

Prior to the execution of relevant transactions, approval must be granted by the executives authorized to do so.

Foreign Currency Risk

The foreign currency risk comes from both transactions with customers and suppliers in Foreign Currency and short–term borrowings in Foreign Currency ($).

This risk does not remarkably affect Group’s operation due to the insignificance of the above transactions which take place in US Dollars

Foreign Currency financial assets and liabilities are translated into Euros, at the closing rate, as follows:

  2014 2013
Ammounts in thousands €             
Nominal Ammounts  USD  SYP  GBP   RON  TRL  DZD  JOD  IQD  USD  SYP  GBP  RON  TRL DZD JOD IQD
Financial Assets  85.877

 481

 33  1.743  14.375  6.162  2.097  0  129.110  567  23  2.215  253  1.986  4.177  -
Financial Liabilities  (32.300)  (958)  (91)  0  (404)  (8.769)  (3.235)  (58)  (82.208)  (695)  (64)  -

 (1.622)

 -4.548

 -2.513  (37)
Total  53.577  (477)  (58)  1.743  13.970  (2.608)  (1.138)  (58)  46.902  (128)  (40)  2.215  (1.369)  (2.562)  1.604  (37)
Short-term exposure  58.737  (477)  (58)  1.743  13.970  (2.608)  (1.138)  (58)  46.902  (128)  (40)  2.215  (1.369)  (2.562)  1.604  (37)
The table below shows the sensitivity analysis of the financial year’s result and equity in combination with the financial assets and the financial liabilities at the exchange rate EUR/USD, EUR/GBP,EUR/RON, EUR/TRL, EUR/SYP, EUR/DZD , EUR/JOD end EUR/IQD. The table was prepared based on the scenario that there is a fluctuation at 31 December 2014 of the above exchange rates by 5% (2013: 5%). The effect on result and equity is as follows: 
  2014 2013
Ammounts in thousands €
   USD  SYP  GBP   RON  TRL  DZD  JOD  IQD  USD  SYP  GBP  RON  TRL  DZD  JOD  IQD
Earnings before taxs  2.679

 (24)

 (3)  87  699  (130)  -57  (3)  2.345  (6)  (2)  111  (68)  (128)  80  (2)

Equity

 2.021  (18)  (2)  70  559  (106)  (49)  (2)  1.821  (5)  (1)  89

 (55)

 (104)

 69  (1)
  2014 2013
Ammounts in thousands €             
   USD  SYP  GBP   RON  TRL  DZD  JOD  IQD  USD  SYP  GBP  RON  TRL  DZD  JOD  IQD
Earnings before taxs  (2.679)

 24

 3  (87)  (699)  130  57  3  (2.345)  6  2  (111)  68  128  (80)  2

Equity

 (2.021)  18  2  (70)  (559)  106  49  2  (1.821)  5  1  (89)

 55

 104

 (69)  1

In order to minimize the exchange currency risk resulting from transactions with non-EU countries  (mainly in US $), the treasury department of the Group enters into currency swaps on the behalf of each company, when this is deemed necessary.

Price Risk

The Group is exposed to the price fluctuation of raw materials and other materials purchased, as well as to the value of portfolio investments, due to their volatility.

The risk of value fluctuations regarding the raw materials and other materials purchased is limited, considering that in the major contracts the Group enters into price readjustment clauses are included. Similarly, the price risk of the portfolio of investments of the Group is also considered limited, as the investments are mainly in Government bonds and they represent a very small portion of the financial assets of Group.

ΜΕΤΚΑ GROUP

CORPORATE BROCHURE

View our Corporate Brochure online or download the pdf file.

ΜΕΤΚΑ GROUP

CONTACT

 8 Artemidos str., GR-15125 Maroussi, Athens

 +30 2102709200

 +30 2102759528

 info@metka.com

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