METKA GROUP | ANNUAL REPORT 2012 - page 120

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40.5 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 2012 is € 51.151 th. and concerns short-term borrowing. (See note 25, for
further information).
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% (2011: +/- 3%). These changes are considered to be reasonably
possible based on observation of current market conditions.
The Group’s risk from changes in Group securities is considered immaterial.
40.6 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 Amounts in thousands €3%-3%3%-3%Earnings before
tax(1.187)1.187 (346)346Equity(950)950 (277)27731/12/201231/12/2011
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 quality 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.
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