METKA GROUP | ANNUAL REPORT 2014 - page 40-41

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VI. 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 pow-
er 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 se-
lection 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 finan-
cial 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, em-
ployer liability, machinery, vehicles etc to renowned international
insurance firms.
However, the existing insurance policies cannot always fully
cover possible damages from unexpected events such as natu-
ral 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 Com-
pany due to geopolitical factors. Concern-
ing 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
assured funding and confirmed credit.
Nevertheless, the postponement of works
for a certain period, the necessity for ex-
tremely high safety measures, our extend-
ed 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 continu-
ation, expecting of course a compensation
from the client for all proven over-expenses
which are imposed to us for reasons out-
side our responsibility.
d) Dividend Policy
Regarding the distribution of dividends,
the Company’s management, after taking
into account, inter alia, the uncertain mar-
ket conditions, the tight financing policy of
businesses by the banks, and aiming to
enforce the Group’s available cash in or-
der to self-finance the planned growth in
2015, proposes the distribution of a divi-
dend equal to
0,5000/share, as against
0,3000/share in 2013. The proposed dis-
tribution is subject to the approval of the
Regular General Assembly of the Share-
holders.
e) Group’s structure and consolidation
method
Apart from the parent Company, Group
subsidiaries that are included in the con-
solidated financial statements with the
method of full consolidation are:
Annual Report of the Board of Directors
Group METKA
Liquidity Risk Analysis - Liabilities
(Amounts in thousands
)
2014
up to 6 months 6 to 12 months
1 to 5 years
after 5 years
Total
Long Term Loans
-
-
1,268
822
2,090
Short Term Loans
2,194
156
-
-
2,350
Leasing liabilities
-
-
-
-
-
Trade and other payables
83,729
5,355
13,773
-
102,857
Other payables
5,950
8,320
-
-
14,270
Total
91,872
13,832
15,042
822
121,567
Group METKA
Liquidity Risk Analysis - Liabilities
(Amounts in thousands
)
2013
up to 6 months 6 to 12 months
1 to 5 years
after 5 years
Total
Long Term Loans
-
-
1,268
1,135
2,403
Short Term Loans
7,092
160
-
-
7,252
Leasing liabilities
-
-
-
-
-
Trade and other payables
116,888
5,432
-
-
122,319
Other payables
4,407
-
-
-
4,407
Total
128,387
5,591
1,268
1,135
136,381
METKA S.A.
Liquidity Risk Analysis - Liabilities
(Amounts in thousands
)
2014
up to 6 months 6 to 12 months
1 to 5 years
after 5 years
Total
Long Term Loans
-
-
-
-
-
Short Term Loans
-
-
-
-
-
Leasing liabilities
-
-
-
-
-
Trade and other payables
82,893
5,355
13,773
-
102,022
Other payables
5,222
8,320
-
-
13,542
Total
88,115
13,676
13,773
-
115,564
METKA S.A.
Liquidity Risk Analysis - Liabilities
(Amounts in thousands
)
2013
up to 6 months 6 to 12 months
1 to 5 years
after 5 years
Total
Long Term Loans
-
-
-
-
-
Short Term Loans
4,840
-
-
-
4,840
Leasing liabilities
-
-
-
-
-
Trade and other payables
110,406
7,251
-
-
117,657
Other payables
10,907
-
-
-
10,907
Total
126,153
7,251
-
-
133,404
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