Upload
others
View
1
Download
0
Embed Size (px)
Citation preview
ALUMINIUM OF GREECE
Annual Financial Report
for the period
from the 1st of January to the 31st of December 2014
Annual Financial Report for the period from1st of January to 31st of December 2014 2
TABLE OF CONTENTS
A. Representation of the Members of the Board of Directors ................................................................ 5
B. Independent Auditor’s Report ......................................................................................................... 6
C. Annual report of the Board of Directors........................................................................................... 8
D. Annual Financial Statements ........................................................................................................ 23
I. Statement Of Financial Position ............................................................................................. 24
II. Income Statement ............................................................................................................... 25
IΙΙ. Statement Of Comprehensive Income ................................................................................. 26
Iv. Company Statement Of Changes In Equity ........................................................................... 27
V. Cash Flow Statement ........................................................................................................... 28
E. Notes On The Financial Statements .............................................................................................. 29
1. General Information..................................................................................................................... 29
1.2 Company’s purpose................................................................................................................... 29
2. Basis for preparation of the financial statements............................................................................ 30
3. Basic accounting principles ........................................................................................................... 31
3.1 New and amended accounting standards and interpretations of IFRS ............................................ 31
3.2 Consolidation ............................................................................................................................. 37
3.3 Significant accounting judgments, estimates and assumptions ...................................................... 38
3.3.1 Accounting decisions ............................................................................................................... 38
3.3.2 Assumptions and estimations ................................................................................................... 40
3.4 Group Structure ......................................................................................................................... 41
3.5 Significant information ............................................................................................................... 42
3.6 Conversion to foreign currency ................................................................................................... 42
3.7 Segment reporting ..................................................................................................................... 46
3.8 Recognition of income and expenses........................................................................................... 46
3.9 Prior year financial statements’ restatement ................................................................................ 47
3.10 Intangible assets ...................................................................................................................... 50
3.11 Tangible assets ........................................................................................................................ 51
3.12 Impairment of Assets ............................................................................................................... 52
3.13 Leases ..................................................................................................................................... 52
3.14 Financial instruments ............................................................................................................... 53
3.15 Inventories .............................................................................................................................. 54
3.16 Trade Receivables .................................................................................................................... 54
3.17 Cash and cash equivalent ......................................................................................................... 54
3.18 Share capital............................................................................................................................ 54
3.19 Income tax & deferred tax ........................................................................................................ 55
3.20 Employee benefits .................................................................................................................... 56
3.20.1 Short-term benefits ............................................................................................................... 56
3.20.2 Post-employment benefits ..................................................................................................... 56
3.21 Grants ..................................................................................................................................... 57
3.22 Loans ..................................................................................................................................... 57
3.23 Provisions ................................................................................................................................ 58
3.24 Dividend distribution ................................................................................................................ 58
3.25. CO2 emission Liability ............................................................................................................. 58
Annual Financial Report for the period from1st of January to 31st of December 2014 3
3.26 Hedging Accounting ................................................................................................................. 58
4. Business Risk Management .......................................................................................................... 61
4.1 Financial risk management aims and policies ............................................................................... 61
4.2 Fair Value Measurements ........................................................................................................... 61
4.3 Market Risk ............................................................................................................................... 62
4.4 Credit Risk ................................................................................................................................. 64
4.5 Liquidity Risk ............................................................................................................................. 64
4.6 Capital Management .................................................................................................................. 64
5. Segment reporting ....................................................................................................................... 67
5.1 Primary reporting format – business segments ............................................................................ 67
5.2 Secondary reporting format – geographical segments .................................................................. 67
6. Notes on the Financial Statements ................................................................................................ 69
6.1 Tangible Assets ......................................................................................................................... 69
6.2 Intangible Assets ....................................................................................................................... 70
6.3 Investments on Subsidiaries ....................................................................................................... 71
6.4 Investments on associates ......................................................................................................... 71
6.5 Deferred tax assets and liabilities ................................................................................................ 72
6.6 Other long-term assets .............................................................................................................. 73
6.7 Inventories fair value ................................................................................................................. 73
6.8 Customers and other trade receivables........................................................................................ 74
6.9 Other receivables ....................................................................................................................... 75
6.10 Derivative financial instruments ................................................................................................ 76
6.11 Cash and Cash Equivalents ....................................................................................................... 76
6.12 Own Equity .............................................................................................................................. 77
6.12.1 Share capital ......................................................................................................................... 77
6.12.2 Other reserves ...................................................................................................................... 78
6.12.3 Fair value reserves ................................................................................................................ 78
6.13 Benefits for employment termination ......................................................................................... 79
6.14 Loan liabilities .......................................................................................................................... 81
6.15 Other long-term liabilities ......................................................................................................... 82
6.16 Provisions ................................................................................................................................ 82
6.17 Suppliers and other trade liabilities ............................................................................................ 83
6.18 Current tax liabilities ................................................................................................................ 83
6.19 Other short-term liabilities ........................................................................................................ 84
6.20 Cost of goods sold ................................................................................................................... 84
6.21 Administrative & Distribution Expenses ...................................................................................... 85
6.22 Other Operating Income – Expenses ......................................................................................... 85
6.23 Financial revenues and expenses .............................................................................................. 86
6.24 Other Financial results .............................................................................................................. 86
6.25 Earnings/ (losses) per share ..................................................................................................... 86
6.26 Income Tax ............................................................................................................................. 87
6.27 Cash Flows from operating activities ......................................................................................... 88
6.28 Related Party transactions ........................................................................................................ 88
6.29 Dividend .................................................................................................................................. 90
Annual Financial Report for the period from1st of January to 31st of December 2014 4
6.30 Number of employees .............................................................................................................. 90
6.31 Contingent assets and contingent liabilities ................................................................................ 91
6.32 Commitments .......................................................................................................................... 95
6.32.1 Operating lease deposit – the company as a lessor ................................................................. 95
6.32.2 Operating lease deposit – the company as a lessee ................................................................. 95
6.32.3 Warranties ............................................................................................................................ 95
6.33 Financial Instruments ............................................................................................................... 96
6.34 Tax Authorities Control ............................................................................................................. 96
6.35 Post Balance Sheet events ........................................................................................................ 97
F. Figures and Information ............................................................................................................... 98
G. Availability of Financial Statements ............................................................................................... 99
Annual Financial Report for the period from1st of January to 31st of December 2014 5
A. REPRESENTATION OF THE MEMBERS OF THE BOARD OF DIRECTORS
The members of the Board of Directors of ALUMINIUM OF GREECE:
1. Spyridon KASDAS, Chairman of the Board of Directors 2. Dimitrios STEFANIDIS, Chief Executive Officer,
In our above capacity declare that as far as we know:
a. the enclosed financial statements of “ALUMINIUM OF GREECE” for the period of 1.1.2014 to
31.12.2014, drawn up in accordance with the applicable accounting standards, reflect in a true manner
the assets and liabilities, equity and results of “ALUMINIUM OF GREECE”.
b. the enclosed report of the Board of Directors reflects in a true manner the development, performance
and financial position of “ALUMINIUM OF GREECE”, including the description of the principal risks and
uncertainties.
Maroussi, 17 March 2015
The designees
Spyridon KASDAS Dimitrios STEFANIDIS
Chairman of the Board Chief Executive Officer Of Directors of Directors
Annual Financial Report for the period from1st of January to 31st of December 2014 6
B. INDEPENDENT AUDITOR’S REPORT
TO THE SHAREHOLDERS OF ALUMINIUM OF GREECE
Report on the Financial Statements
We have audited the accompanying financial statements of Aluminium of Greece S.A.I.C. (“the
Company”), which comprise of the Statement of Financial Position as at December 31, 2014, and the
Income Statement and Statement of Comprehensive Income, changes in equity and cash flows for the
year then ended and a summary of significant accounting policies and other explanatory information.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these individual and consolidated
financial statements in accordance with International Financial Reporting Standards as adopted by
European Union, and for such internal control as management determines is necessary to enable the
preparation of individual and consolidated financial statements that are free from material misstatement,
whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We
conducted our audit in accordance with International Standards on Auditing. Those standards require
that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance
about whether the individual and consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the individual and consolidated financial statements. The procedures selected depend on the auditor’s
judgment, including the assessment of the risks of material misstatement of the financial statements,
whether due to fraud or error. In making those risk assessments, the auditor considers internal control
relevant to the entity’s preparation and fair presentation of the financial statements in order to design
audit procedures that are appropriate in the circumstances but not for the purpose of expressing an
opinion on the effectiveness of the company’s internal control. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of accounting estimates made by
management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinion.
Opinion
Annual Financial Report for the period from1st of January to 31st of December 2014 7
In our opinion, the financial statements present fairly, in all material respects, the financial position of
the Company as at December 31, 2014, and the financial performance and the cash flows of the
Company for the year then ended in accordance with International Financial Reporting Standards that
have been adopted by the European Union.
Emphasis of matters
We would like to draw your attention to the following:
1. The Company and its supplier PPC, have not yet reached to an agreement for the pricing of
electricity for the term beginning on 1st January and onwards. The finalization of the negotiations
between the two parties may result in the Company’s recognizing assets or liabilities the amount of
which currently cannot be measured reliably.
2. The Company retrospectively restated financial items of the financial years 2013 and 2014, after
it received in December 2014 relative information from its customer INDEPENDENT POWER
TRANSMISSION OPERATOR, concerning prior periods.
We have not qualified our opinion for the above mentioned matters.
Report on Other Legal and Regulatory Requirements
We confirm that the information given in the Director’s Report is consistent with the accompanying
financial statements and complete in the context of the requirements of articles 43a, and 37 of Codified
Law 2190/1920.
Athens, 16 March 2015
The Chartered Accountant
Nikolaos Ioannou
S.O.E.L. Reg. No. 29301
Annual Financial Report for the period from1st of January to 31st of December 2014 8
C. ANNUAL REPORT OF THE BOARD OF DIRECTORS
BOARD OF DIRECTORS ANNUAL MANAGEMENT REPORT
I. 2014 REVIEW - PERFORMANCE AND FINANCIAL POSITION
In 2014, after six consecutive years of recession and of accumulated loss of GDP that exceeded 25%,
the Greek economy, since the 2nd quarter has recorded positive growth rates in economic activity,
resulting in a full-year growth rate of 0.8%. At the same time, the primary surpluses that have been
achieved and the balancing of the Greek state’ current accounts are tangible evidence of the stabilization
achieved by the Greek economy over the past few years.
This improvement, which led to a decline in bond yields and allowed Greece to borrow again from the
international markets in Spring 2014, has not been able to restore the full access for Greece to the
capital markets since it has been interrupted by the uncertainty for the outcome of negotiations with
European partners for the continuation of the program of financing the Greek economy. The result and
the duration of these negotiations are expected to play a decisive role in the performance of the Greek
economy in 2015 and in the subsequent years.
On the global level, the steps taken by the ECB have succeeded in bringing a reduction in borrowing
costs on the economies of Europe while the euro zone as a whole achieved in 2014 a positive growth
rate of GDP of around 0.9%, after two years of economic recession. In this context, the ECB has already
announced its intention to provide additional support through the Quantitative Easing program as the
Eurozone continues facing strong challenges, among which the main challenge is the risk of deflation.
The recent drop in oil and fuel prices has generally intensified the deflationary pressures, while in
Greece, since the beginning of 2013, it has been recorded a negative inflation rate, equal to -2.5% in
December 2014.
Despite the weak growth in the euro zone, the weakening of emerging markets and the environment of
geopolitical instability in Europe and the Middle East, the global economy has recorded a satisfactory
growth rate in 2014 that exceeded 3%. This growth rate is expected to accelerate in the coming months
in an environment characterized by lower oil prices and the strengthening of the US dollar against most
currencies and the Euro.
ALUMINIUM OF GREECE, in this context, has remained committed to strict cost control. The improved
economic performance of the Company compared to the previous year, demonstrates the great progress
that has been although this fact does not leave any room for complacency.
Annual Financial Report for the period from1st of January to 31st of December 2014 9
ECONOMIC ENVIRONMENT
ALUMINA MARKET
The metallurgical Alumina Market in 2014 closed with relative equilibrium (production ~106 million
metric tons vs consumption ~105million metric tons.) while the same is expected for 2015 with an
estimated increase in production and consumption by 6-7%.
The continuous increasing demand for aluminium worldwide in connection with the historically high
production of aluminium in China and the restriction for bauxite export from Indonesia are expected to
positively affect the price, which remains at very good rates for the first semester in 2015.
Low metal prices may have been influenced negatively by the stock market prices of metals in London,
the reduction of premia, the price reduction of raw material and energy and the eventual operating
stoppages of factories mainly outside China.
For ALUMINIUM OF GREECE the long term contract with Glencore for calcined alumina has been
completed in 2014 with a total sales quantity of 330.000 tons and value based 50% on the average of 3
different price index Alumina Price Index FOB Australia (Platts, MB, CRU) and the remaining 50% to a
specified percentage of the price of aluminium.
As for hydrated alumina, ALUMINIUM OF GREECE maintained high profit margins with annual sales of
134,000 tons in a market characterized as difficult and highly competitive.
ALUMINIUM MARKET
In the first quarter of 2014, the LME aluminium prices have recorded the lowest level of the last five
years amounted to $1,640/ton. and have recovered dynamically thereafter up to $ 2,114 / ton in the
third quarter of the year.
Accordingly, during 2014 the exchange rate €/$ moved strongly downwards and from a high level of
1.39 in first quarter it has fallen below 1.21 at the end of the year. Compared to previous year the
average rate of €/$ has remained unchanged at 1.33.
The average price of aluminium during 2014 (LME 3 month) amounted to $ 1,894 / ton, remaining
unchanged (+ 0.38%) compared to the previous year. In contrast to prices in the LME, premia recorded
new historically high levels resulting in final total price LME + Premium to remain above the $ 2,500 /
ton.
The fundamental aluminium market data which have experienced a significant improvement, the
constant reduction in stocks, the preservation of demand at a high level and the reluctance of some
producers, which during the previous period were forced to reduce production or even to cease the
operation of their less efficient industrial plants, to increase again production due to the low price levels
on the LME, have contributed to this performance.
Annual Financial Report for the period from1st of January to 31st of December 2014 10
ALUMINIUM OF GREECE in 2014
In 2014 ALUMINIUM OF GREECE had successfully completed the competitiveness recovery program
"FUTURE" resulting in obvious cost savings.
As regards the production level, it has recorded historical performance in both production of hydrated
alumina due to the historical performance of the pumping availability rate and the production of molten
metal, as a result of initiation of the project of increasing intensity of electricity in potrooms.
The increase of the production of molten metal has contributed in the production of the end products of
Cast house.
The sales of hydrated alumina, a product that yields significant profit margins for ALUMINIUM OF
GREECE, have maintained its market share and amounted to 134 thousand tons.
Aluminum sales are again focused on high added value products.
Aluminium sales in volumes per product amounted to:
- 121,3 thousand tons of Billets in 2014 while 110,3 thousand tons in 2013
- 50,6 thousand tons of Slabs in 2014 while 62,5 thousand tons in 2013
- 0,0 thousand tons of T-ingots in 2014 while 0.0 thousand tons in 2013
From geographical perspective, sales abroad grew over those generated domestically by about 10
thousand tons. The contract with GLENCORE has been served smoothly.
In 2014 the turnover of ALUMINIUM OF GREECE increased compared to 2013, part of which (€
31million) is due to the LNG resale activity (nil of corresponding activity in 2013).
In metallurgy, growth has been recorded from the historically high premia products of Casthouse which
outbalanced the lower performance of the sales price of alumina.
As regards the cost, the contribution of the reduction of gas and basic raw materials prices has been of
particular significance.
From the start of the second quarter of 2014, the calculation for self-generated electricity sales price
was finalized, following the adoption of Law 4254 / 2014.
II. PROSPECTS FOR THE NEW YEAR
The growth in global aluminium demand is expected to remain strong in 2015 at over 7%, being
supportive for prices of aluminium . However, early this year, there has been a decline in premia from
historically high levels and the LME which are offset by the decline in basic production costs, particularly
those resulting from the decline in oil and gas prices as well as the constant strengthening of the US
dollar against the Euro.
Annual Financial Report for the period from1st of January to 31st of December 2014 11
Current aluminium prices on the LME fluctuate within the range of $ 1.800 / ton., a level that comprise
a strong challenge for producers and thus create the conditions for further decline in aluminium stocks
that are steadily declined since early 2013.
Developments regarding the fundamentals measures, the course of the emerging economies, especially
China’s, the energy cost, the development of Euro/dollar exchange rate and the monetary policy pursued
by central banks, are expected to be the main drivers that will determine the course of the sector in the
coming period.
ALUMINIUM OF GREECE is expected to maintain the very good technical results without disregarding the
safety policies and results. The further increase in the electricity intensity in the potroom will be decisive
factor to achieve a new historical record of molten metal production. Furthermore, it will focus on further
strengthening of its competitiveness, based on strict and continuous cost control, expecting to record
strong financial performance in 2015.
ΙΙΙ. ADDED VALUE & PERFORMANCE INDICATORS
ALUMINIUM OF GREECE applies the policy of assessing its results and performance on a monthly basis
effectively identifying timely deviations from targets and taking the relevant corrective measures. The
Company monitors its performance by analyzing specific financial, technical and operational indicators.
Α. Financial Indicators
-EBITDA (Operating Earnings Before Interest, Taxes, Depreciation & Amortization): The
Company defines the «EBITDA» quantity as profits/losses before tax, itemized for financial and
investment results; for total depreciation (of tangible and intangible fixed assets).
- ROCE (Return on Capital Employed): This indicator is derived by dividing profit before tax and
financial results to the total capital employed by the Company, these being the sum of the Net Position,
the sum of loans and long - term forecasts.
- ROE (Return on Equity): This indicator is derived by dividing profit after tax by the company‘s Net
Position.
- EVA (Economic Value Added): This metric is derived by multiplying the total capital employed with
the difference (ROCE – Capital Expenditure) and constitutes the amount by which the financial value of
the company increases. To calculate the capital expenditure, the Company uses the WACC formula – «
Weighted Cost of Capital».
The above indicators for 2014 compared to 2013 are as follows:
Annual Financial Report for the period from1st of January to 31st of December 2014 12
*Adj. EBITDA 2013: EBITDA figure as at 31/12/2013 is adjusted (note 3.9)
Β. Operational And Technical Indices
- LTI : in 2014 the indicator was 1.64 compared to 3.29 in 2013.
- RCR : in 2014 the indicator was 4.37 compared to 6.58 in 2013.
- % Faraday: 93.8 in 2014 compared to 93.4 in 2013.
- % Pumping availability: 97.1 in 2014 compared to 96.4 in 2013.
IV. SIGNIFICANT INFORMATION
During the reporting period, the Company proceeds to the following:
• DEPA and Gazprom Agreement
On 25/2/2014, the Ministry of Environment, Energy and Climate Change announced the agreement
between DEPA and Gazprom for the retroactive price discount for gas supplied by the latter, a discount
that will be passed to consumers.
The discount amounted to 15% over current prices that was valid until 25/02/2014 and had a
retrospective effect. The amount of discount for the Company was €6.1 millon for the period 1/7 –
31/12/2013.
The total discount is recorded in the ALUMINIUM OF GREECE results for the period 01.01.2014 –
31.12.2014.
• Law 4254/07.04.2014
The law 4254/07.04.2014 “Measures of support and development of Greek Economy referred to L.
4046/2012 and other provisions” defined arrangements in order to ensure the viability of the renewable
energy sources (RES) support mechanism, aimed at the consolidation of the special account referred to
2014 2013
EBITDA (in mil. Euro) 65,00 36,19
ROCE 5,45% 1,27%
ROE 3,63% -10,07%
EVA (in mil. Euro) -19,28 -53,80
Annual Financial Report for the period from1st of January to 31st of December 2014 13
in article 40 of law 2773/1999. In addition, the recommended settings are intended to help reduce the
cost of electricity for final consumers and the national economy. More specifically, the present law
consists of three main axes: (a) price adjustment to converge, as far as possible, the benefits from the
RES support mechanism at around the same level for all categories of producers, therefore being an
adjustment that aims, as far as possible, on similar yields between the several types of investment, b)
investor protection taking into account existing financing agreements and c) new tariffs to compensate
producers of electricity from RES and through RES and high efficiency Cogeneration Plants (HeCoGen),
compatible with the requirements of the national electrical system, which will contribute to reduction of
energy costs while at the same time ensuring reasonable returns.
In particular, Sub Paragraph IC 3 of the said law includes the following:
1. Within two (2) months from the entry into force of this law, the RES/HeCoGen producers shall issue a
credit note to provide discount:
a. 35% regarding energy from photovoltaic plants (except in cases of the "special program of
development of photovoltaic systems in buildings") and
b. 10% regarding energy from other RES and HeCoGens, in both cases (a) and (b) calculated on the
total value of energy sold in 2013.
2. On expiry of the period referred to in paragraph 1 and until issuance and delivery of the credit note
referred to in this paragraph, the obligation of LAGIE for the Interconnected System and HEDNO for the
Non Interconnected System, to pay to RES and HeCoGens producers the price for the volume of
electricity delivered from the month of entry into force of said Law and onwards, shall be suspended.
The General Secretariat of Public Revenues is hereby authorized to determine by decision the details
regarding the tax treatment of the transaction described in paragraph 1 and the present.
3. For RES and HeCoGen projects that issue the credit note pursuant to para. 1 the excise tax of L.
4093/2012, as amended and in force, is recalculated on the reduced, after the credit note discount,
proceeds from the sale of energy for the reference year 2013.
The above operation had no impact on results for the period 01/01 - 31/12/2014 as the Company
disputes the issue of credit invoice of l. 4254/2014 as believes that this action is illegal and
unconventional.
• Change of Company’s name
The extraordinary General Meeting of July 11, 2014 took the decision to change the name of the
Company to "ALUMINIUM OF GREECE INDUSTRIAL AND COMMERCIAL SA" and the distinctive title
Annual Financial Report for the period from1st of January to 31st of December 2014 14
"ALUMINIUM OF GREECE". The decision was registered into the General Electronic Commercial Registry
in August 25, 2014 with No. 108715.
• General Court of European Union decision
On 27/7/2011, the Greek Government, via the Ministry of Environment, Energy and Climate Change,
announced to ALUMINIUM OF GREECE, the decision of the European Commission finding the difference
between the energy sale price imposed on ALUMINIUM OF GREECE by PPC in application of the high
voltage regulated tariff (A-150) and the price arising from the application of the Contract of 1960 for the
period from January 2007 to March 2008, in application of a decision of interim measures of the Single-
Member First Instance Court of Athens claiming that the Contract of 1960 has not expired and ordering
the return of the tariffs to the framework of the said contract, discordant with the Community state aid
rules. The said difference between the two tariffs, the recovery of which is asked by the European
Commission with its above decision, amounts to €17.4 million plus interest (according to EU state aid
recovery rules and policies).
The arguments of the European Commission focus on the following:
i) Selective application of the “preferential tariffing” only for ALUMINIUM OF GREECE.
ii) The Commission believes that the seller (PPC) had no right to charge “reduced rates”. Taken into
account that PPC declined the extension of the 1960 Contract, there are reasonable grounds (for the
Commission) that the extension of the agreement secured an advantage given that it did not correspond
to the ‘usual rate” for the big industrial consumers.
iii) Finally, the commission considers that this tariffing method distorts competition and affects the
transactions between member states, because the preferential tariffing was used in a company active in
sectors whose products are widely traded among member states.
According to the Management, the EC decision on the recovery of the amount of € 17.4 million plus
interest by the Greek state, considered state aid, is based on the erroneous believe that the regulated
high voltage tariff (A150), as in force in the reference period of the decision (1/2007 – 3/2008) in the
Greek market, namely in a non-liberated electricity market in breach of the Community Legislation (in
particular Directive 2003/54/EC) in which PPC had a monopoly position, was a competitive, reasonable
electricity supply tariff (“market tariff”). As a consequence, the EC decision is based on the admission
that ALUMINIUM OF GREECE, by paying anything less than the said administratively regulated high-
voltage tariff that PPC as a monopoly and the Ministry of Development as a supervising and
administering authority practically imposed on their customers, received a kind of state aid which,
furthermore, positively affected its position compared to that of its competitors in the European market.
As acknowledged by the European Commission in the framework of the infringement procedure (No.
Annual Financial Report for the period from1st of January to 31st of December 2014 15
2195/2009), the regulated tariff A-150 should have been abolished with the inclusion of the 2nd energy
package (Directive 2003/54/EC) in order to promote the development of a competitive electricity market
and abolish the cross subsidies between consumers of even the same category, something which RAE
already stressed in 2007. Its imposition by PPC on ALUMINIUM OF GREECE with the expiry of the 1960
contract is not an indication of a seller’s behavior in a market economy but an abusive behavior of the
state monopoly taking advantage of its dominant position in order to increase its revenues based on a
state aid. If PPC accepted to negotiate with its customers (High-Voltage Connection where the tariffs
should have been deregulated on 1.7.2008), the rate charging ALUMINIUM OF GREECE with would be
determined in market and competition terms, as shown in RAE’s decisions, No 692/2011 and No
798/2011, a fact certainly leading to a lower tariff. Moreover, in the same period, ALUMINIUM OF
GREECE paid (in application of the decision of interim measures) a power rate higher than the average
power supply rate for the corresponding industries in the other member states and although the decision
acknowledges the fact that ALUMINIUM OF GREECE does not have a domestic competition, it
erroneously determines the “relevant market”, characterizing the tariff difference paid by ALUMINIUM
OF GREECE compared to the other industrial consumes as an illegal state aid.
According to the above, the Management deems that the rationale of the EC decision is a straw man,
erroneous and not adequately justified. On 6.10.2011, the ALUMINIUM OF GREECE brought the matter
before the General Court of the European Union asking for the annulment of the above decision.
The Arbitral Award before the Energy Regulator’s Arbitration Proceedings complies with the above
notion, as, although it concerns a different time-period, it accepted that the standard industrial tariff,
which PPC is trying to impose throughout the period of its dispute with ALUMINIUM OF GREECE, does
not constitute a market tariff.
PPC tried to enforce the aforementioned European Commission decision, through a payment order
issued by the Athens Court of First Instance (13601/2012), which was appealed by ALUMINIUM OF
GREECE. The Athens Court of First Instance, issued an injunction (no 857/2013) accepting company’s
petition for the suspension of the payment order’s enforcement and resolved (decision no. 860/2013)
that the issuance of a final decision on the appeal would be rendered after the decision of the General
Court of the European Union. Following that, PPC achieved to overturn the above injunction and
temporary ruling of the Court and tried again to enforce the payment order to ALUMINIUM OF GREECE.
In order to avoid further legal action before the Hellenic Courts, as well as to ensure that the Hellenic
Republic does not suffer any potential implications that it as a result of further delay in recovering the
amount of the alleged aid, ALUMINIUM OF GREECE has reached an agreement with PPC and paid the
total amount of € 20.56 million (€ 17.4 million plus interest). The remittance of said amount to PPC, as
per the provisions of the agreement signed between the parties, is conditional on the final decision of
Annual Financial Report for the period from1st of January to 31st of December 2014 16
the European Union’s General Court, thus being temporary and not indicative of the final outcome of
said case.
Moreover, the Management of the Company considers that there is a strong possibility for the
Company’s appeal against the EU decision, which was submitted to the competent European Court, to
be successful and, therefore, the “difference” of € 20.56 million (€ 17.4 million plus interest), referred to
in said decision, constitutes a contingent liability which is reasonably considered as unlikely to ultimately
constitute an actual liability. Consequently, following the reimbursement of the payments made by the
Company, no outflow of economic resources will actually take place.
On 04/06/2014, the EU General Court convened for the litigation of the foresaid case. On 08/10/2014, a
positive decision was delivered for ALUMINIUM OF GREECE. There is no impact on the Company’s
Financial Statements.
V. BUSINESS RISK MANAGEMENT
Aims and management polices of business risk
The Company's activities give rise to multiple financial risks, including the current and interest rate
related risks, the volatility in market prices, credit risks and liquidity risks. The Company's risk
management program aims at containing potential negative influence to its financial results, as this may
arise from the inability to predict financial markets and the volatility with respect to cost and sales
variables.
The essential risk management policies are determined by the Company's Management. The risk
management policy is applied by the Corporate Treasury Department. The risk management which is
being created by the main operational activities of the Company, identified and managed by the
Corporate Treasury Department.
Credit Risk
The Company does not exhibit any considerable concentration of credit risk in any of the contracted
parties. Credit risk originates from available cash and cash equivalents, derivative financial instruments
and deposits at banks and financial institutions; also from exposure to client derived credit risk.
Regarding commercial and other claims, the Company is not theoretically exposed to significant credit
risks, as of the multifaceted nature of the Company's activities, there is no significant concentration of
credit risk with respect to its commercial requirements, as this is allocated over a high number of clients.
However, the atypical conditions that dominate the Greek market and several other markets in Europe
are forcing the Company to constantly monitor its business claims and also to adopt policies and
practices to ensure that such claims are collected. By way of example, such policies and practices include
Annual Financial Report for the period from1st of January to 31st of December 2014 17
insuring credits where possible; pre-collection of the value of product sold to a considerable degree;
safeguarding claims by collateral loans on customer reserves; and receiving letters of guarantee.
To minimize credit risk on cash reserves and cash equivalents; in financial derivate contracts; as well as
other short term financial products, the Company specifies certain limits to its exposure on each
individual financial institution and only engages in transactions with creditworthy financial institutions of
high credit rating.
The tables below summarize the maturity profile of the Company's financial assets as at 31.12.2014 and
31.12.2013 respectively:
Liquidity Risk
The liquidity risk is linked to the need to sufficiently finance the Company's activity and growth. The
relevant liquidity requirements are the subject of management through the meticulous monitoring of
debts of long term financial liabilities and also of payments made on a daily basis.
The Company ensures the provision of adequate credit facilities available so as to cover short term
business requirements. In addition, funds for long term solvency needs shall be ensured through an
adequate amount of borrowed capital and the ability of selling long term financial assets.
The maturity of financial liabilities in December 31, 2014 and 2013 for the Company pictured as follows:
(Amounts in €)
Liquidity Risk Analysis -
Trade Receivables
0-3 months 3-6 months 6-12 months > 1 year
2014 11.816.184 3.817.369 - - 64.327.775 79.961.329
2013 29.039.668 14.670.276 (10.715.647) - 29.379.957 62.374.254
ALUMINIUM OF GREECE
Past due but not impaired
Non past due but not
impaired Total
Liquidity Risk Analysis - Liabilities
2014
up to 6
months
6 to 12
months1 to 5 years after 5 years Total
(Amount in €)
Long-term debt - - 111.790.367 - 111.790.367
Short-term debt 18.802.682 29.325.389 - - 48.128.071
Long-term liabil ities payable in the next
period - 20.865.500 - - 20.865.500
Leasing l iabil ities - - - - -
Trade and other payables 128.319.244 25.524.302 - - 153.843.546
Other payables 15.382.577 1.343.088 - - 16.725.665
Total 162.504.503 77.058.279 111.790.367 - 351.353.149
ALUMINIUM OF GREECE
Annual Financial Report for the period from1st of January to 31st of December 2014 18
Market Risk
Exchange rate risk
The Company develops activity at international level and is therefore exposed to exchange rate risk that
arises mainly from the US dollar. Such risk primarily stems from commercial transactions in foreign
currency as well as from net investments in foreign financial entities. For the management of such risk,
the Group’s Financial Management Department establishes financial derivative and non-derivative
instruments with financial organizations.
The Company’s exposure to commodities price risk and the corresponding sensitivity may depending on
the transaction’s quantity in foreign currency as well the level of the prices.
Commodity’s Price Risk
Goods prices that are mainly determined by international markets and global offer and demand result in
the Company’s exposure to the relevant prices fluctuation risk.
Goods’ prices are connected both to variables that determine revenues (e.g. metal prices at LME) and to
the Company’s cost (e.g. natural gas prices). Due to its activity, the Company is exposed to price
fluctuation of aluminium (AL), zinc (Zn), lead (Pb) as well as to price fluctuation of natural gas, as
production cost.
As regards price fluctuation of metals, the Company’s policy is to minimize risk by using financial
derivative instruments (forward deals commodity fulfilling contracts).
The Company's exposure to commodities price risk and the corresponding sensitivity may vary
depending on the volume of transactions and price levels. However, the following analysis is considered
representative of the Company's exposure to this risk for the year 2014.
Interest rate risk
Liquidity Risk Analysis - Liabilities
2013
up to 6
months
6 to 12
months1 to 5 years after 5 years Total
(Amount in €)
Long-term debt - - 131.897.431 - 131.897.431
Short-term debt - 31.865.073 - - 31.865.073
Long-term liabil ities payable in the next
period - 5.655.000 - - 5.655.000
Leasing l iabil ities - - - - -
Trade and other payables 104.059.636 38.682.786 - - 142.742.422
Other payables 10.840.404 - 3.372.954 - 14.213.359
Total 114.900.040 76.202.859 135.270.385 - 326.373.285
ALUMINIUM OF GREECE
Annual Financial Report for the period from1st of January to 31st of December 2014 19
The Company’s assets that are exposed to interest rate fluctuation primarily concern cash and cash
equivalents. The Company’s policy as regards financial assets is to invest its cash in floated interest rates
so as to maintain the necessary liquidity while achieving satisfactory return for its shareholders. In
addition, for the totality of its bank borrowing, the Company uses floating interest rate instruments.
Depending on the level of liabilities in floating interest rate, the Company proceeds to the assessment of
interest rate risk and when necessary examines the necessity to use interest bearing financial derivative
instruments.
The Company’s policy consists in minimizing its exposure to interest bearing cash flow risk as regards
long-term funding.
Effect from risk factors and sensitivities analysis
The effect from the above mentioned factors to Company’s operating results, equity and net results
presented in the following table:
It is noted that an increase of five (5) basis points presume a decrease of €0.9 million on net results and
Equity.
The Company’s exposure in price risk and therefore sensitivity may vary according to the transaction
volume and the price level. However the above sensitivity analysis is representative for the Company
exposure in 2014.
$/t + 50 - 50
EBITDA mil € 7,3 -7,3
Net Results mil € 7,3 -7,3
Equity mil € 7,3 -7,3
€/$ - 0,05 + 0,05
EBITDA mil € 9,3 -9,3
Net Results mil € 9,3 -9,3
Equity mil € 9,4 -9,4
$/t - 50 + 50
EBITDA mil € 0,3 -0,3
Net Results mil € 0,3 -0,3
Equity mil € 0,3 -0,3
€/MWh - 5 + 5
EBITDA mil € 12,7 -12,7
Net Results mil € 12,7 -12,7
Equity mil € 12,7 -12,7
Fuel Oil Price (FOB MED)
Natural Gas
LME AL (Alouminium)
Parity €/$
Annual Financial Report for the period from1st of January to 31st of December 2014 20
VI. CORPORATE GOVERNANCE
The Company has adopted the principles of corporate governance as set forth in current Greek
legislation and international practice. As a set of rules, principles and control mechanisms under which a
company is organized and managed, Corporate Governance seeks to promote transparency for investors
and to safeguard the interests of shareholders and all persons connected with company operation.
The Board of Directors of ALUMINIUM OF GREECE is the trustee of the corporate governance principles.
Today it is comprised of 1 executive and 4 non-executive member.
Internal auditing is a fundamental, necessary condition for corporate governance. ALUMINIUM OF
GREECE Internal Audit Division is an independent unit, which reports to the Group's Audit Committee. Its
duties include evaluating and improving the systems for risk management and internal auditing and also
verifying compliance with established policies and procedures as set in the company’s internal operation
regulations, the applicable legislation and regulatory provisions.
ALUMINIUM OF GREECE has an Internal Audit Division led by Theodoros Pelekis who is a full-time
employee engaged exclusively in internal auditing.
VII. RELATED PARTY TRANSACTIONS
In context of operational activity, materials, inventories and services originate from a number of related
parties of the company. The transactions with these companies take place on purely trade basis,
whereas no business transactions take place. ALUMINIUM OF GREECE did not participate in any
transaction of unusual nature or content which is significant for the Company it participates, or for
companies and the people closely related to it, and does not intend to participate in any kind of similar
transactions in the future. None of these transactions include special terms or conditions.
In the tables below presented the intercompany transactions and balances between the Company,
the BoD members for the fiscal year and the intercompany balances on 31.12.2014 and 31.12.2013 :
(Amounts in €) 31/12/2014 31/12/2013
Short term employee benefits
- Wages and Salaries and BOD Fees 4.957.856 4.810.227
- Insurance service cost 182.414 196.280
Total 5.140.269 5.006.507
Pension Benefits:
- Defined contribution scheme 3.647 3.647
Total 5.143.916 5.010.154
ALUMINIUM OF GREECE
Annual Financial Report for the period from1st of January to 31st of December 2014 21
Transactions with other related party :
VIII. DIVIDEND POLICY
On 30 October 2014 the Extraordinary General Meeting of Shareholders decides to approve the payment
of dividend to the Shareholder Company with the amount of 1,475,000.00 € or 0.25 € / stock from the
part distribution of specially taxed reserve, from revaluation’s differences based on N.3229/04, which is
depicted into a) the Company’s books of taxation, the balance sheet accounts “revaluation’s differences
– Investment Grants” and b) the Company’s books, the balance sheet accounts “Retained Earnings”.
This particular decision is going to be confirmed during the next Regular General Meeting of
Shareholders where will be approved the Financial Statements of 2014. The Board of Directors proposal
(Amounts in €) 31/12/2014 31/12/2013
Other Related Parties 2.469.925 626.171
Total 2.469.925 626.171
Parent Company 14.410.084 16.917.959
Subsidiaries 2.248.733 -
Other Related Parties 8.271.256 8.902.180
Total 24.930.073 25.820.139
Subsidiaries 8.900 10.357
Associates 3.418.343 2.904.601
Other Related Parties 472.583 497.280
Total 3.899.826 3.412.238
Parent Company 17.223.190 6.000.060
Subsidiaries 60.839 43.845
Associates 7.794 1.105.389
Other Related Parties 2.009.390 1.480.005
Total 19.301.213 8.629.298
ALUMINIUM OF GREECE
Shales of goods
Purchases of goods
Sales of Services
Purchases of Services
(Amounts in €) 31/12/2014 31/12/2013
Subsidiaries - 3.613.423
Associates 2.282.618 2.776.514
Other Related Parties 68.804.241 76.805.847
Total 3.581.170 230.465
Total 74.668.029 83.426.249
Parent Company 7.884.715 -
Subsidiaries 1.294.981 19.896
Associates 125.000 1.086.874
Other Related Parties 1.432.243 2.100.552
Management remuneration and fringes 1.349.890 1.304.200
Total 12.086.829 4.511.521
ALUMINIUM OF GREECE
Customers / Debitors
Suppliers / Creditors
Annual Financial Report for the period from1st of January to 31st of December 2014 22
to the General Meeting of Shareholders will be the distribution of dividend to the Shareholder Company
with the amount of 1,475,000.00 € or 0.25 € / stock.
IX. POST BALANCE SHEET EVENTS
On 26/1/2015, was activated the extension of the Company’s goal that had been decided by the
Extraordinary General Meeting on 26/2/2014, as became an adding of secondary activity, the marketing
of chemical products for industrial use and especially the marketing of oxide, hydrogen and peroxide.
There are no other significant subsequent events, apart from the abovementioned, that relate to the
Company, which should be announced for the purposes of I.F.R.S.
Annual Financial Report for the period from1st of January to 31st of December 2014 23
D. ANNUAL FINANCIAL STATEMENTS
The attached Financial Statements are those approved by the Board of Directors of “ALUMINIUM OF
GREECE” at 17.03.2015 and have been published to the electronic address www.alhellas.gr.
It is noted that the published, in the press, brief financial data aim to provide the user with general
information but do not present a full picture of the Company’s financial results and position and cash
flows, according to International Accounting Standards.
The Financial Statements of the comparable periods 2013 and 2012 have adjusted due to change of the
Accounting Policies (note 3.9).
Annual Financial Report for the period from1st of January to 31st of December 2014 24
I. Statement of Financial Position
The notes on pages 69 to 99 are an integral part of these financial statements.
*The comparative Financial Statements of 2013 and 2012 have been adjusted retrospectively (note 3.9).
(Amounts in €) Note 31/12/2014 31/12/2013 31/12/2012
Tangible Assets 6.1 563.727.352 577.330.752 574.305.149
Intangible Assets 6.2 245.141 2.037.955 104.019
Investments in Subsidiary Companies 6.3 17.509.351 19.719.350 19.719.350
Investments in Associate Companies 6.4 500.000 500.000 500.000
Deferred Tax Receivables 6.5 12.067.798 14.347.914 35.567.874
Other Long-term Receivables 6.6 161.594 185.458 163.883
Non current assets 594.211.236 614.121.429 630.360.275
Total Stock 6.7 88.742.386 90.587.071 105.931.950
Trade and other receivables 6.8 79.961.329 62.374.254 78.992.782
Other receivables 6.9 99.727.544 101.754.769 81.039.850
Cash and cash equivalents 6.11 3.206.357 8.727.400 16.581.243
Current assets 271.637.616 263.443.493 282.545.825
Assets 865.848.852 877.564.922 912.906.101
Share capital 6.12 214.760.000 214.760.000 214.760.000
Fair value reserves 6.12 (957.591) (696.986) (759.222)
Other reserves 6.12 55.612.495 57.792.824 63.884.225
Retained earnings 6.12 142.732.982 127.766.832 168.754.321
EQUITY 412.147.886 399.622.671 446.639.325
Long-term debt 6.14 111.790.367 131.897.431 -
Derivatives 6.10 - 270.392 -
Deferred Tax Liability 6.5 40.543.922 39.754.273 33.489.455
Liabil ities for pension plans 6.13 14.686.187 14.196.138 11.203.963
Other long-term liabil ities 6.15 28.147.343 79.641.453 26.062.810
Provisions 6.16 12.651.024 15.473.450 18.872.475
Non-Current Liabilities 207.818.844 281.233.135 89.628.703
Trade and other payables 6.17 153.843.546 142.742.422 154.981.270
Tax payable 6.18 5.025.299 1.806.668 3.537.226
Short-term debt 6.14 48.128.071 31.865.073 163.344.169
Current portion of non-current liabi lities 6.14 20.865.500 5.655.000 30.595.273
Derivatives 6.10 1.294.042 426.594 759.222
Other payables 6.19 16.725.665 14.213.359 23.420.913
Current Liabilities 245.882.123 196.709.116 376.638.073
LIABILITIES 453.700.966 477.942.251 466.266.776
Liabilities & Equity 865.848.852 877.564.922 912.906.101
ALUMINIUM OF GREECE
Annual Financial Report for the period from1st of January to 31st of December 2014 25
II. Income Statement
The notes on pages 69 to 99 are an integral part of these financial statements.
*The comparative Financial Statements of 2013 and 2012 have been adjusted retrospectively (note 3.9).
(Amounts in €) Note 1/1-31/12/2014 1/1-31/12/2013
Sales 5.1, 5.2 462.567.354 428.213.330
Cost of sales 6.20 (415.985.797) (432.015.380)
Gross profit 46.581.556 (3.802.050)
Other operating income 6.22 19.657.318 40.089.354
Distribution expenses 6.21 (904.255) (1.084.934)
Administrative expenses 6.21 (11.712.643) (10.017.225)
Other operating expenses 6.24 (16.676.940) (16.141.674)
Earnings before interest and income tax 36.945.038 9.043.470
Financial income 6.23 6.478.346 4.205.405
Financial expenses 6.23 (21.955.302) (25.610.451)
Other financial results 6.24 (2.209.999) -
Profit before income tax 19.258.083 (12.361.576)
Income tax expense 6.26 (4.291.933) (28.625.913)
Profit for the period 14.966.150 (40.987.489)
Profit for the period 14.966.150 (40.987.489)
Attributable to:
Equity holders of the parent 14.966.150 (40.987.489)
Earnings before income tax,financial results,depreciation and amortization (A) 65.001.361 36.186.144
Oper.Earnings before income tax,financial results,depreciation and amortization (B) 65.001.361 36.186.144
Earnings before interest and income tax 36.945.038 9.043.470
Profit before income tax 19.258.083 (12.361.576)
Profit for the period 14.966.150 (40.987.489)
(A)Definition of line item: Earnings before income tax,financ results,depr&amort
Profit before income tax 19.258.083 (12.361.576)
Plus: Financial results 17.686.955 21.405.046
Plus: Depreciation 28.056.323 27.142.675
Earnings before income tax,financial results,depreciation and amortization 65.001.361 36.186.144
(B)Definition of line item: OperEarnings before income tax,financ.res,depr&amort
Profit before income tax 19.258.083 (12.361.576)
Plus: Financial results 17.686.955 21.405.046
Plus: Depreciation 28.056.323 27.142.675
Subtotal 65.001.361 36.186.144
Plus: Other operating results (ΙΙ) - -
Oper.Earnings before income tax,financial results,depreciation and amortization 65.001.361 36.186.144
ALUMINIUM OF GREECE
Summury of Results from continuing
operations
Annual Financial Report for the period from1st of January to 31st of December 2014 26
IΙΙ. Statement Of Comprehensive Income
The notes on pages 69 to 99 are an integral part of these financial statements.
*The comparative Financial Statements of 2013 and 2012 have been adjusted retrospectively (note 3.9).
(Amounts in €) 31/12/2014 31/12/2013
Net Profit/(Loss) For The Period 14.966.150 (40.987.489)
Amounts not reclassified to the income statement in subsequent period
Actuarial Gain / (Losses) (2.180.330) (6.091.401)
Deferred Tax From Actuarial Gain / (Losses) - -
Amounts reclassified to the income statement in subsequent period
Cash Flow Hedging Reserve (597.055) 62.236
Deferred Tax 336.451 -
Other Comprehensive Income: (2.440.935) (6.029.165)
Total Comprehensive Income For The Period 12.525.215 (47.016.654)
ALUMINIUM OF GREECE
Annual Financial Report for the period from1st of January to 31st of December 2014 27
IV. Company Statement of Changes in Equity
The notes on pages 69 to 99 are an integral part of these financial statements.
*The comparative Financial Statements of 2013 and 2012 have been adjusted retrospectively (note 3.9).
(Amounts in €)Share capital
Fair value
reserves
Other
reserves
Retained
earnings Total
Opening Balance 1st January 2012, according to IFRS
(as published) 214.760.000 (9.501.876) 59.825.059 191.053.881 456.137.064
Change In Equity
Transactions With Owners - - - - -
Net Profi t/(Loss ) For The Period - - - (22.299.560) (22.299.560)
Actuaria l Gain / (Loss es) - - 4.059.166 - 4.059.166
Cas h Flow Hedging Reserve - 8.742.654 - - 8.742.654
Total Comprehensive Income For The Period - 8.742.654 4.059.166 (22.299.560) (9.497.740)
Adjusted Balance 31st December 2012, according to IAS 8 214.760.000 (759.222) 63.884.225 168.754.321 446.639.324
(Amounts in €)Share capital
Fair value
reserves
Other
reserves
Retained
earnings Total
Opening Balance 1st January 2013, according to IAS 8 214.760.000 (759.222) 63.884.225 168.754.321 446.639.324
Change In Equity
Transactions With Owners - - - - -
Net Profi t/(Loss ) For The Period - - - (40.987.489) (40.987.489)
Cas h Flow Hedging Reserve - 62.236 - - 62.236
Actuaria l Gain / (Loss es) - - (6.091.401) - (6.091.401)
Total Comprehensive Income For The Period - 62.236 (6.091.401) (40.987.489) (47.016.654)
Adjusted Balance 31st December 2013, according to IAS 8 214.760.000 (696.986) 57.792.824 127.766.832 399.622.671
(Amounts in €)Share capital
Fair value
reserves
Other
reserves
Retained
earnings Total
Opening Balance 1st January 2014,according to IFRS
(as published) 214.760.000 (696.986) 57.792.824 127.766.832 399.622.671
Change In Equity
Transactions With Owners - - - - -
Net Profi t/(Loss ) For The Period - - - 14.966.150 14.966.150
Cas h Flow Hedging Reserve - (597.055) - - (597.055)
Deferred Tax From Actuaria l Gain / (Loss es) - 336.451 - - 336.451
Actuaria l Gain / (Loss es) - - (2.180.330) - (2.180.330)
Total Comprehensive Income For The Period - (260.605) (2.180.330) 14.966.150 12.525.215
Closing Balance 31/12/2014 according to IFRS 214.760.000 (957.591) 55.612.495 142.732.982 412.147.886
ALUMINIUM OF GREECE
ALUMINIUM OF GREECE
Annual Financial Report for the period from1st of January to 31st of December 2014 28
V. Cash Flow Statement
The notes on pages 69 to 99 are an integral part of these financial statements.
*The comparative Financial Statements of 2013 and 2012 have been adjusted retrospectively (note 3.9).
(Amounts in €) Note 1/1-31/12/2014 1/1-31/12/2013
Cash flows from operating activities 6.27 17.271.603 33.843.639
Interest paid (20.549.554) (26.282.059)
Taxes paid (442.858) (1.141.136)
Net Cash flows continuing operating activities (3.720.810) 6.420.444
Net Cash flow from continuing investing activities
Purchases of tangible assets 6.1 (16.515.219) (31.040.250)
Purchases of intangible assets 6.2 (385) (1.969.612)
Sale of tangible assets 6.1 - 50
Acquisition of associates - (250.000)
Acquisition /Sale of subsidiaries (less cash) - (1.945.000)
Interest received 142.114 2.120.744
Grants received - 7.024.872
Other cash flows from investing activities 23.864 (21.575)
Net Cash flow from continuing investing activities (16.349.626) (26.080.771)
Net Cash flow continuing financing activities
Return of share capital to shareholders - 5.733.150
Proceeds from borrowings 20.204.394 11.728.334
Repayments of borrowings (5.655.000) (5.655.000)
Net Cash flow continuing financing activities 14.549.394 11.806.484
Net (decrease)/increase in cash and cash equivalents (5.521.042) (7.853.843)
Cash and cash equivalents at beginning of period 8.727.400 16.581.243
Net cash at the end of the period 3.206.357 8.727.400
ALUMINIUM OF GREECE
Annual Financial Report for the period from1st of January to 31st of December 2014 29
E. NOTES ON THE FINANCIAL STATEMENTS
1. General Information
“ALUMINIUM OF GREECE” is located at the Amarousion Municipality (8 Artemidos Str., Marousi, P.C. 151
25).
The Company is registered in the Athens Prefecture - East Sector, with Company’s Registration Number
59413/01 ΑΤ/Β/05/228 (07). The General Commercial Register number is: 6550901000.
The company’s website is www.alhellas.gr
The financial statements, for the period which has ended 31/12/2014 (including the syncretic elements
for the period which has ended 31/12/2013), has been approved for publication by the Board of
Directors of the company at 17 March 2015 and are pending definitive approval by the Annual General
Shareholders’ Meeting.
1.2 Company’s purpose
The company’s purpose, according to article 2 of the Articles of Association, is the production and
construction of alumina and aluminium in Greece and their trade in any country, the production and
trade of any source of energy as well as the purchase and trade of Greenhouse Gas Emission Allowances
in Greece and abroad and the provision of services.
Moreover, the company has as a purpose the research, extraction and process of any ore material and
metal in Greece and their trade in any country.
The construction and operation of plumbing, sewerage and other related facilities to serve the purposes
of the Company and / or other physical and / or legal persons who cooperate with it and whose facilities
are adjacent to those of ALUMINIUM OF GREECE.
The production and sale of steam, water (deionized indicative, fire, etc.) as well as the availability of
industrial and potable water to natural and / or legal persons who cooperate with the Company and
whose premises adjacent to those of the Company, as well as the provision of services related to the
above physical and / or legal entities.
The company, in order to achieve the above and in a more general manner, has the right to acquire
licenses or metal research and exploitation, any grants, to acquire, lease and establish, shape and
exploit mines and pits, establish, acquire, lease, and develop factories and industrial branches, as well as
any kind of real estate or equipment. To acquire, to take, to deposit, set to action, exploit and grant
patent diplomas, and diploma licenses, industrial methods and signs. To acquire, lease, develop, and
exploit rural and forest areas, as well services and land and sea transport businesses, an in general do
anything that might contribute in the achieving its purpose.
The company may also proceed to:
Annual Financial Report for the period from1st of January to 31st of December 2014 30
a) Construction and exploitation of electricity production stations as well as the trade of electricity in
Greece and abroad. For this purpose the company has begun utility studies of production processes,
exploitation of electricity production stations and Heat of any kind as well as studies of trade exploitation
of electricity in Greece and abroad. The company invests and participates in investments, constructs,
operates and exploits stations and electricity and Heat plants with the purpose to trade in Greece and
abroad.
b) The supply of services to third parties in relation to study, production and exploitation of
electricity.
c) Acquisition, storage, vaporization, transportation, distribution and transferring to third parties
Natural Gas (Liquefied or not) that origins from domestic deposits or imported from abroad and
generally participating in any kind of transaction related to Natural Gas (Liquefied or not).
The company may also participate, for similar purposes, in any form, in any underlying or future
commendation of a company of any kind, with any purpose, in either domestic or foreign soil, to
establish subsidiaries and to enter trusts of any kind, in either domestic or foreign soil, to cooperate in
any way with either physical or legal entities that pursue similar purposes or coherent to those of the
company.
Moreover, the company is capable of supplying services related to market research, analyses of
investment programs, studies and designs, entrustment, supervision and management, risk
management and strategic programming, development and organization of any consulting company in
any of the related sectors of production and metal trade, energy and related activities.
2. Basis for preparation of the financial statements
The consolidated financial statements of ALUMINIUM OF GREECE as of December 31st 2014 covering
the entire 2014 fiscal year, have been compiled based on the historic cost principle as is amended by the
readjustment of specific asset and liability items into market values, the going concern principle and are
in accordance with the International Financial Reporting Standards (IFRS) that have been issued by the
International Accounting Standards Board (IASB) and their interpretations that have been issued by the
International Financial Reporting Interpretations Committee (IFRIC) of the IASB. The accompanying
standalone financial statements are compiled buy demand of the statutory law 2190/1920.
According to the IFRS, the preparation of the Financial Statements requires estimations during the
application of the company’s accounting principles. Important admissions are presented wherever it has
been judged appropriate.
The reporting currency is Euro (currency of the home country ALUMINIUM OF GREECE) and all the
amounts depicted in euro, except where stated otherwise.
Annual Financial Report for the period from1st of January to 31st of December 2014 31
3. Basic accounting principles
The accounting principles, applied by the Company for the reporting period are consistent with the
accounting principles applied for the fiscal year 2013.
3.1 New and amended accounting standards and interpretations of IFRS
New Standards, Interpretations, Revisions and Amendments to existing Standards that are
effective and have been adopted by the European Union
The following amendments and interpretations of the IFRS have been issued by IASB and their
application is mandatory from or after 01/01/2014.
The most important standards and interpretations are mentioned bellow:
IFRS 10 “Consolidated Financial Statements”, IFRS 11 “Joint Arrangements” and IFRS 12
“Disclosure of Interests in Other Entities”, IAS 27 “Separate Financial Statements” and IAS
28 “Investments in Associates and Joint Ventures” (effective for annual periods starting on
or after 01/01/2014)
In May 2011, IASB issued three new Standards, namely IFRS 10, IFRS 11 and IFRS 12. IFRS 10
“Consolidated Financial Statements” sets out a new consolidation method, defining control as the basis
under consolidation of all types of entities. IFRS 10 supersedes IAS 27 “Consolidated and Separate
Financial Statements” and SIC 12 “Consolidation — Special Purpose Entities”. IFRS 11 “Joint
Arrangements” sets out the principles regarding financial reporting of joint arrangements participants.
IFRS 11 supersedes IAS 31 “Interests in Joint Ventures” and SIC 13 “Jointly Controlled Entities – Non-
Monetary Contributions by Venturers”. IFRS 12 “Disclosure of Interests in Other Entities” unites,
improves and supersedes disclosure requirements for all forms of interests in subsidiaries, under
common audit, associates and non-consolidated entities. As a result of these new standards, IASB has
also issued the revised IAS 27 entitled IAS 27 “Separate Financial Statements” and revised IAS 28
entitled IAS 28 “Investments in Associates and Joint Ventures”.
Transition Guidance: Consolidated Financial Statements, Joint Arrangements and Disclosure
of Interests in Other Entities (Amendments to IFRS 10, IFRS 11 and IFRS 12) (effective for
annual periods starting on or after 01/01/2014)
In June 2012, IASB issued this Guidance to clarify the transition provisions of IFRS 10. The amendments
also provide additional accommodation during the transition to IFRS 10, IFRS 11 Joint Arrangements and
IFRS 12 Disclosure of Interests in Other Entities, limiting the requirements to provide adjusted
comparative information to only the preceding comparative period. Furthermore, in respect to the
Annual Financial Report for the period from1st of January to 31st of December 2014 32
disclosures relating to the unconsolidated entities, the amendments take away the requirement to
present comparative information.
Investment Entities (Amendments to IFRS 10, IFRS 12 and IAS 27) (effective for annual
periods starting on or after 01/01/2014)
In October 2012, IASB issued amendments to IFRS 10, IFRS 12 and IAS 27. The amendments apply to a
particular class of business that qualifies as investment entities. The IASB uses the term ‘investment
entity’ to refer to an entity sole business purpose is to invest funds solely for returns from capital
appreciation, investment income or both. An investment entity must evaluate the return of its
investments on a fair value basis. Such entities could include private equity organizations, venture capital
organizations, pension funds, sovereign wealth funds and other investment funds. The Investment
Entities amendments provide an exception to the consolidation requirements under IFRS 10 and require
investment entities to measure particular subsidiaries at fair value through profit or loss, rather than
consolidate them while making the required disclosures.
Amendments to IAS 32 “Financial Instruments: Presentation” – Offsetting financial assets
and financial liabilities (effective for annual periods starting on or after 01/01/2014)
In December 2011, IASB issued amendments to IAS 32 “Financial Instruments: Presentation”, which
provide clarification on some requirements for offsetting financial assets and liabilities in the Statement
of Financial Position. The amendments affect the Company’s Financial Statements.
Amendment to IAS 36 “Impairment of Assets” - Recoverable Amount Disclosures for Non-
Financial Assets (effective for annual periods starting on or after 01/01/2014)
In May 2013, IASB issued amendments to IAS 36 “Impairment of Assets”. These narrow-scope
amendments address the disclosure of information about the recoverable amount of impaired assets if
that amount is based on fair value less costs of disposal. The amendment does not affect the Company’s
Financial Statements.
Amendments to IAS 39 “Financial Instruments: Recognition and Measurement” - Novation
of Derivatives and Continuation of Hedge Accounting (effective for annual periods starting
on or after 01/01/2014)
In June 2013, IASB issued narrow-scope amendments to IAS 39 “Financial Instruments: Recognition and
Measurement”. The purpose of the amendments is to introduce a limited scope exception in respect to
the suspension of accounting setting off, as per IAS 39. In particular, it allows hedge accounting to
continue in a situation where a derivative, which has been designated as a hedging instrument, is
Annual Financial Report for the period from1st of January to 31st of December 2014 33
novated to effect clearing with a central counterparty as a result of laws or regulation, if specific
conditions are met. Similar relief will be included in IFRS 9 “Financial Instruments”. The amendments do
not affect the Company’s Financial Statements.
IFRIC 21 “Levies” (effective for annual periods starting on or after 01/01/2014)
In May 2013, the IASB issued IFRIC 21. IFRIC 21 provides guidance on when a company recognizes a
liability for a levy imposed by the state in its Financial Statements. IFRIC 21 is an interpretation of IAS
37 “Provisions, Contingent Liabilities and Contingent Assets”. IAS 37 sets out criteria for the recognition
of a liability, one of which is the present obligation resulting from a past event, known as an obligating
event. This interpretation indicates that the obligating event is the activity that triggers the payment of
the levy in accordance with the relevant legislation. The amendments do not affect the Company’s
Financial Statements.
New Standards and Interpretations that have not been applied yet or have not been
adopted by the European Union
Τhe following new Standards, Revised Standards as well as the following Interpretations to the existing
Standards have been publicized but have not taken effect yet or have not been adopted by the
European Union. In particular:
IFRS 9 “Financial Instruments” (effective for annual periods starting on or after
01/01/2018)
In July 2014, the IAB issued the final version of IFRS 9. This version brings together the classification
and measurement, impairment and hedge accounting models and presents a new expected loss
impairment model and limited amendments to classification and measurement for financial assets. The
Company will examine the impact of the above on its Financial Statements, though it is not expected to
have any. The above have not been adopted by the European Union.
IFRS 14 “Regulatory Deferral Accounts” (effective for annual periods starting on or after
01/01/2016)
In January 2014, the IASB issued a new standard, IFRS 14. The aim of this interim Standard is to
enhance the comparability of financial reporting by entities that are engaged in rate-regulated activities.
Many countries have industry sectors that are subject to rate regulation, whereby governments regulate
the supply and pricing of particular types of activity by private entities. The Company will examine the
impact of the above on its Financial Statements, though it is not expected to have any. The above have
not been adopted by the European Union.
Annual Financial Report for the period from1st of January to 31st of December 2014 34
IFRS 15 “Revenue from Contracts with Customers” (effective for annual periods starting on
or after 01/01/2017)
In May 2014, the IASB issued a new standard, IFRS 15. The Standard fully converges with the
requirements for the recognition of revenue in both IFRS and US GAAP. The new standard will
supersede IAS 11 “Construction Contracts”, IAS 18 “Revenue” and several revenue related
interpretations. The Company will examine the impact of the above on its Financial Statements, though
it is not expected to have any. The above have not been adopted by the European Union.
Annual Improvements cycle 2010-2012 (effective for annual periods starting on or after
01/07/2014)
In December 2013, the IASB issued Annual Improvements to IFRSs 2010-2012 Cycle, a collection of
amendments to IFRSs, in response to eight issues addressed during the 2010-2012 cycle. The
amendments are effective for annual periods beginning on or after 1 July 2014, although entities are
permitted to apply them earlier. The issues included in this cycle are the following: IFRS 2: Definition of
'vesting condition', IFRS 3: Accounting for contingent consideration in a business combination, IFRS 8:
Aggregation of operating segments, IFRS 8: Reconciliation of the total of the reportable segments'
assets to the entity's assets, IFRS 13: Short-term receivables and payables, IAS 7: Interest paid that is
capitalised, IAS 16/IAS 38: Revaluation method—proportionate restatement of accumulated depreciation
and IAS 24: Key management personnel. The Company will examine the impact of the above on its
consolidated/separate Financial Statements. The above have been adopted by the European Union at
December 2014.
Annual Improvements cycle 2011-2013 (effective for annual periods starting on or after
01/07/2014)
In December 2013, the IASB issued Annual Improvements to IFRSs 2011-2013 Cycle, a collection of
amendments to IFRSs, in response to four issues addressed during the 2011-2013 cycle.
The amendments are effective for annual periods beginning on or after 1 July 2014, although entities
are permitted to apply them earlier. The issues included in this cycle are the following: IFRS 1: Meaning
of effective IFRSs, IFRS 3: Scope exceptions for joint ventures; IFRS 13: Scope of paragraph 52
(portfolio exception); and IAS 40: Clarifying the interrelationship of IFRS 3 Business Combinations and
IAS 40 Investment Property when classifying property as investment property or owner-occupied
property. The Company will examine the impact of the above on its Financial Statements, though it is
not expected to have any. The above have been adopted by the European Union at December 2014.
Annual Financial Report for the period from1st of January to 31st of December 2014 35
Annual Improvements cycle 2012-2014 (effective for annual periods starting on or after
01/01/2016)
In September 2014, the IASB issued Annual Improvements to IFRSs 2012-2012 Cycle, a collection of
amendments to IFRSs, in response to four issues addressed during the 2012-2014 cycle. The
amendments are effective for annual periods beginning on or after 1 January 2016, although entities are
permitted to apply them earlier. The issues included in this cycle are the following: IFRS 5: Changes in
methods of disposal, IFRS 7: Servicing Contracts and Applicability of the amendments to IFRS 7 to
Condensed Interim Financial Statements, IAS 19: Discount rate: regional market, and IAS 34: Disclosure
of information elsewhere in the interim financial report. The Company will examine the impact of the
above on its Financial Statements, though it is not expected to have any one. The above have not been
adopted by the European Union.
Defined Benefit Plans: Employee Contributions (Amendments to IAS 19) (effective for
annual periods starting on or after 01/07/2014)
In November 2013, the IASB published narrow scope amendments to IAS 19 “Employee Benefits”
entitled Defined Benefit Plans: Employee Contributions (Amendments to IAS 19). The narrow scope
amendments apply to contributions from employees or third parties to defined benefit plans. The
objective of the amendments is to simplify the accounting for contributions that are independent of the
number of years of employee service, for example, employee contributions that are calculated according
to a fixed percentage of salary. The Company will examine the impact of the above on its Financial
Statements, though it is not expected to have any. The above have been adopted by the European
Union.
Amendment to IAS 27: “Equity Method in Separate Financial Statements» (effective for
annual periods starting on or after 01/01/2016)
In August 2014, the IASB published narrow scope amendments to IAS 27 “Equity Method in Separate
Financial Statements “. Under the amendments, entities are permitted to use the equity method to
account for investments in subsidiaries, joint ventures and associates in their separate Financial
Statements – an option that was not effective prior to the issuance of the current amendments. The
Company will examine the impact of the above on its Financial Statements, though it is not expected to
have any . The above have not been adopted by the European Union.
Amendments to IFRS 10 and IAS 28: “Sale or Contribution of Assets between an Investor
and its Associate or Joint Venture” (effective for annual periods starting on or after
01/01/2016)
Annual Financial Report for the period from1st of January to 31st of December 2014 36
In September 2014, the IASB published narrow scope amendments to IFRS 10 and IAS 28 “Sale or
Contribution of Assets between an Investor and its Associate or Joint Venture”. The amendments will be
applied by entities prospectively in respect of sales or contribution of assets performed in the annual
periods starting on or after 01/01/2016. Earlier application is permitted, given that this fact is relatively
disclosed in the financial Statements. The Company will examine the impact of the above on its Financial
Statements, though it is not expected to have any. The above have not been adopted by the European
Union.
Amendments to IAS 16 and IAS 38: Clarification of Acceptable Methods of Depreciation and
Amortisation (effective for annual periods starting on or after 01/01/2016)
In May 2014, the IASB published amendments to IAS 16 and IAS 38. IAS 16 and IAS 38 both establish
the principle for the basis of depreciation and amortisation as being the expected pattern of
consumption of the future economic benefits of an asset. The IASB has clarified that the use of
revenue-based methods to calculate the depreciation of an asset is not appropriate because revenue
generated by an activity that includes the use of an asset generally reflects factors other than the
consumption of the economic benefits embodied in the asset. The Company will examine the impact of
the above on its Financial Statements, though it is not expected to have any. The above have not been
adopted by the European Union.
Amendments to IFRS 11: Accounting for Acquisitions of Interests in Joint Operations
(effective for annual periods starting on or after 01/01/2016)
In May 2014, the IASB issued amendments to IFRS 11. The amendments add new guidance on how to
account for the acquisition of an interest in a joint operation that constitutes a business and specify the
appropriate accounting treatment for such acquisitions. The Company will examine the impact of the
above on its Financial Statements, though it is not expected to have any. The above have not been
adopted by the European Union.
Amendments to IAS 1: « Disclosures Initiative» (effective for annual periods starting on or
after 01/01/2016)
In December 2014, the IASB issued amendments to IAS 1.The aforementioned amendments address
settling the issues pertaining to the effective presentation and disclosure requirements as well as the
potential of entities to exercise judgment under the preparation of financial statements. The Company
will examine the impact of the above on its Financial Statements, though it is not expected to have any.
The above have not been adopted by the European Union.
Annual Financial Report for the period from1st of January to 31st of December 2014 37
Amendments to IFRS 10, IFRS 12 and IAS 28: “Investment Entities: Applying the
Consolidated Exception” (effective for annual periods starting on or after 01/01/2016)
In December 2014, the IASB published narrow scope amendments to IFRS 10, IFRS 11 and IAS 28. The
aforementioned amendments introduce explanation regarding accounting requirements for investment
entities, while providing exemptions in particular cases, which decrease the costs related to the
implementation of the Standards. The Company will examine the impact of the above on its Financial
Statements, though it is not expected to have any. The above have not been adopted by the European
Union.
3.2 Consolidation
Subsidiaries: All the companies that are managed or controlled, directly or indirectly, by another
company (parent) either through the majority of voting rights or through its dependence on the know-
how provided from the Company.
The acquisition of a subsidiary by the Company is accounted for using the purchase method. The
acquisition cost of a subsidiary is the fair value of the assets given as consideration, the shares issued
and the liabilities undertaken on the date of the acquisition plus any costs directly associated with the
transaction. The individual assets, liabilities and contingent liabilities that are acquired during a business
combination are valued during the acquisition at their fair values regardless of the participation
percentage. The acquisition cost over and above the fair value of the individual assets acquired is
booked as goodwill. If the total cost of the acquisition is lower than the fair value of the individual assets
acquired, the difference is immediately transferred to the income statement.
The Company, in the basis of IAS 27 < Consolidated and Separate Financial Statements>,
has chosen to implement the exemption of consolidation and draws only separate financial
statements.
The financial statements of the Company ALUMINIUM OF GREECE are included in the consolidated
financial statements of the Group MYTILINEOS SA, that is located in Greece and owns 100% of
ALUMINIUM OF GREECE and are consolidated under the method of full consolidation. The reader, who
wants to have access to the financial statements, can visit the site www.mytilineos.gr.
Associates: Associates are companies on which the Company can exercise significant influence but not
“control” and which do not fulfill the conditions to be classified as subsidiaries or joint ventures. The
assumptions used by the Company imply that holding a percentage between 20% and 50% of a
company’s voting rights suggests significant influence on the company. Investments in associates are
Annual Financial Report for the period from1st of January to 31st of December 2014 38
initially recognized at cost and are subsequently valued using the Equity method. At the end of each
period, the cost of acquisition is increased by the Company’s share in the associates’ net assets change
and is decreased by the dividends received from the associates.
Any goodwill arising from acquiring associates is contained in the cost of acquisition. Whether any
impairment of this goodwill occurs, this impairment decreases the cost of acquisition by equal charge in
the income statement of the period.
Unrealized profits from transactions between the Company and its associates are eliminated according to
the Company’s percentage ownership in the associates. Unrealized losses are eliminated, except if the
transaction provides indications of impairment of the transferred asset. The accounting principles of the
associates have been adjusted to be in conformity to the ones adopted by the Company.
3.3 Significant accounting judgments, estimates and assumptions
The preparation of financial statements in accordance with IFRS requires management to make
judgments, estimates and assumptions that affect the reported amounts of assets and liabilities, as well
as the disclosure of contingent assets and liabilities at the date of the financial statements and the
reported amounts of revenue and expenses during the reporting period. Actual results could differ from
those estimates.
Estimates and judgments are continually evaluated and are based on historical experience and other
factors, including expectations of future events that are believed to be reasonable under the
circumstances.
3.3.1 Accounting decisions
During the implementation procedure for accounting policies, decisions are made by the management,
which relate to the following:
• Classification of investments
Management classifies Financial assets in the scope of IAS 39 based on their nature and their
characteristics at the following four categories:
• financial assets at fair value through profit and loss,
• loans and receivables,
• held-to-maturity investments, and
• available-for-sale investments.
Financial assets are recognized initially at cost, which represents their fair value (plus, in certain cases,
directly attributable transaction costs). The Company determines the classification of its financial assets
Annual Financial Report for the period from1st of January to 31st of December 2014 39
after initial recognition and, where allowed and appropriate, re-evaluates this designation at each
financial year-end.
(i) Financial assets at fair value through profit and loss: Financial assets are classified as held for
trading if they are acquired for the purpose of selling in the near term. Gains or losses on investments
held for trading are recognized in income.
(ii) Loans and receivables: Loans and receivables which are generated form the Company’s
operations (and are beyond the Company’s normal credit terms) are carried at amortized cost using the
effective interest method. Gains and losses are recognized in the income statement when the loans and
receivables are derecognized or impaired, as well as through the amortization process.
(iii) Held-to-maturity investments: Financial assets with fixed or determinable payments and fixed
maturity are classified as held-to-maturity when the Company has the positive intention and ability to
hold to maturity. Investments intended to be held for an undefined period are not included in this
classification. Held-to-maturity investments are carried at amortized cost using the effective interest
method. For investments carried at amortized cost, gains and losses are recognized in income when the
investments are derecognized or impaired, as well as through the amortization process.
• Recoverability of receivables accounts
Short term receivables are presented in their nominal value, net of provisions for potential non collectible
accounts, while long-term receivables (balances that deviate from the normal credit terms) are
measured at amortized cost based on the effective interest rate method.
At each balance sheet date all potentially uncollectible accounts are assessed individually for purposes of
determining the appropriate allowance for doubtful accounts. The balance of such allowance for doubtful
accounts is appropriately adjusted at each balance sheet date in order to reflect the possible risks. Any
amount written-off with respect to customer account balances is charged against the existing allowance
for doubtful accounts. Any amount provided for in respect to customer account balances is charged in
the profit and loss statement.
• Impairment of inventories
Provision for slow moving, damaged or obsolete inventories is made when necessary. The impairments
at the net realizable value of inventories are charged in the profit and loss statement in the period that
occur.
• Classification of a lease as operating or financial.
Leases where all the risks and rewards of ownership are retained by the lessor are classified as
operating leases. Payments made under operating leases (net of any incentives received from the lessor)
are charged to the income statement on a straight-line basis over the period of the lease. Leases of
property, plant and equipment where the Company has substantially all the risks and rewards of
ownership are classified as finance leases.
Annual Financial Report for the period from1st of January to 31st of December 2014 40
3.3.2 Assumptions and estimations
The presentation of the value of specific assets and liabilities in the financial statements requires the use
of estimations that are based on assumptions relating to the values and conditions not known with
certainty during the compilation date of the financial statements. The Company continuously evaluates
the estimations it makes based on historical data, the research of specialized consultants, the trends and
methods considered appropriate for the estimation of specific conditions as well as estimations regarding
how the assumptions made may change in the future.
The accounting principles, applied by the Company for the reporting period are consistent with the
accounting principles applied for fiscal year 2013. In addition to the abovementioned and more
specifically for the Annual Financial Statements of 2014 the following are noted.
• Possible reductions in Goodwill
The Company test goodwill for impairment annually and whenever events or circumstances make it
more likely than not that an impairment may have occurred, such as a significant adverse change in the
business climate or a decision to sell or dispose of a reporting unit. Determining whether an impairment
has occurred requires valuation of the respective reporting unit, which we estimate using a discounted
cash flow method. When available and as appropriate, we use comparative market multiples to
corroborate discounted cash flow results. In applying this methodology, we rely on a number of factors,
including actual operating results, future business plans, economic projections and market data.
If this analysis indicates goodwill impaired, measuring the impairment requires a fair value estimate of
each identified tangible and intangible asset. In this case we supplement the cash flow approach
discussed above with independent appraisals, as appropriate.
We test other identified intangible assets with defined useful lives and subject to amortization by
comparing the carrying amount to the sum of undiscounted cash flows expected to be generated by the
asset. We test intangible assets with indefinite lives annually for impairment using a fair value method
such as discounted cash flows.
The Company tests annually whether goodwill has suffered any impairment, in accordance with the
accounting policy stated in note 3.10. The recoverable amounts of cash-generating units have been
determined based on value-in-use calculations, these calculation require the use of accounting
estimates.
• Budget of construction contracts
The treatment for income and expenses of a construction contract depends on whether the final result
of the contract can be reliably estimated. When the result of a construction contract can be estimated
reliably then all income and expenses related to the contract are recognized as such during the time
period of the contract. The Company uses the percentage of completion method to determine the
appropriate amount of income and expense to be recognized in each period. The percentage of
Annual Financial Report for the period from1st of January to 31st of December 2014 41
completion is calculated as the contracted cost realized over the total budgeted cost of construction for
each project.
• Income Tax
ALUMINIUM OF GREECE is subject to income taxes in numerous jurisdictions. Significant estimates are
required in determining the provision for income taxes. There are many transactions and calculations for
which the ultimate tax determination is uncertain during the ordinary course of business. The Company
recognizes liabilities for anticipated tax audit issues based on estimates of whether additional taxes will
be due. Where the final tax outcome of these matters is different from the amounts that were initially
recorded, such differences will impact the income tax and deferred tax provisions in the period in which
such determination is made.
• Provisions
Doubtful accounts are reported at the amounts likely to be recoverable based on historical experience of
customer default. As soon as it is learned that a particular account is subject to a risk over and above
the normal credit risk (e.g., low creditworthiness of customer, dispute as to the existence or the amount
of the claim, etc.), the account is analyzed and written down if circumstances indicate the receivable is
uncollectible. Provisions for environmental rehabilitation are reported at the amounts that are likely to be
claimed against the Company in order to settle the liability.
• Contingencies
The Company is involved in litigation and claims in the normal course of operations. Management is of
the opinion that any resulting settlements would not materially affect the financial position of the
Company as at December 31, 2014. However, the determination of contingent liabilities relating to the
litigation and claims is a complex process that involves judgments as to the outcomes and interpretation
of laws and regulations. Changes in the judgments or interpretations may result in an increase or
decrease in the Company’s contingent liabilities in the future.
3.4 Group Structure
The structure of the Group at 31/12/2014 is as follows:
Company
Participation
rate %
Consolidation
method Participation
ALUMINIUM OF GREECE - Maroussi Holding
DELPHI DISTOMON S.A. - Maroussi 100% - Direct
DESFINA SHIPPING COMPANY - Maroussi 100% - Direct
DESFINA MARINE - Marshall Islands 100% - Indirect
MYTILINEOS FINANCIAL PARTNERS S.A. - Luxembourg 25% - Direct
Annual Financial Report for the period from1st of January to 31st of December 2014 42
3.5 Significant information
During the reporting period, the Company proceeds to the following:
• DEPA and Gazprom Agreement
On 25/2/2014, the Ministry of Environment, Energy and Climate Change announced the agreement
between DEPA and Gazprom for the retroactive price discount for gas supplied by the latter, a discount
that will be passed to consumers.
The discount amounted to 15% over current prices that was valid until 25/02/2014 and had a
retrospective effect. The amount of discount for the Company was €6.1 millon for the period 1/7 –
31/12/2013.
The total discount is recorded in the ALUMINIUM OF GREECE results for the period 01.01.2014 –
31.12.2014.
• Law 4254/07.04.2014
The law 4254/07.04.2014 “Measures of support and development of Greek Economy referred to L.
4046/2012 and other provisions” defined arrangements in order to ensure the viability of the renewable
energy sources (RES) support mechanism, aimed at the consolidation of the special account referred to
in article 40 of law 2773/1999. In addition, the recommended settings are intended to help reduce the
cost of electricity for final consumers and the national economy. More specifically, the present law
consists of three main axes: (a) price adjustment to converge, as far as possible, the benefits from the
RES support mechanism at around the same level for all categories of producers, therefore being an
adjustment that aims, as far as possible, on similar yields between the several types of investment, b)
investor protection taking into account existing financing agreements and c) new tariffs to compensate
producers of electricity from RES and through RES and high efficiency Cogeneration Plants (HeCoGen),
compatible with the requirements of the national electrical system, which will contribute to reduction of
energy costs while at the same time ensuring reasonable returns.
In particular, Sub Paragraph IC 3 of the said law includes the following:
1. Within two (2) months from the entry into force of this law, the RES/HeCoGen producers shall issue a
credit note to provide discount:
a. 35% regarding energy from photovoltaic plants (except in cases of the "special program of
development of photovoltaic systems in buildings") and
b. 10% regarding energy from other RES and HeCoGens, in both cases (a) and (b) calculated on the
total value of energy sold in 2013.
2. On expiry of the period referred to in paragraph 1 and until issuance and delivery of the credit note
referred to in this paragraph, the obligation of LAGIE for the Interconnected System and HEDNO for the
Non Interconnected System, to pay to RES and HeCoGens producers the price for the volume of
Annual Financial Report for the period from1st of January to 31st of December 2014 43
electricity delivered from the month of entry into force of said Law and onwards, shall be suspended.
The General Secretariat of Public Revenues is hereby authorized to determine by decision the details
regarding the tax treatment of the transaction described in paragraph 1 and the present.
3. For RES and HeCoGen projects that issue the credit note pursuant to para. 1 the excise tax of L.
4093/2012, as amended and in force, is recalculated on the reduced, after the credit note discount,
proceeds from the sale of energy for the reference year 2013.
The above operation had no impact on results for the period 01/01 - 31/12/2014 as the Company
disputes the issue of credit invoice of l. 4254/2014 as ALUMINIUM OF GREECE believes that this action is
illegal and unconventional.
• Change of Company’s name
The extraordinary General Meeting of July 11, 2014 took the decision to change the name of the
Company to "ALUMINIUM OF GREECE INDUSTRIAL AND COMMERCIAL SA" and the distinctive title
"ALUMINIUM OF GREECE". The decision was registered into the General Electronic Commercial Registry
in August 25, 2014 with No. 108715.
• General Court of European Union decision
On 27/7/2011, the Greek Government, via the Ministry of Environment, Energy and Climate Change,
announced to ALUMINIUM OF GREECE, the decision of the European Commission finding the difference
between the energy sale price imposed on ALUMINIUM OF GREECE by PPC in application of the high
voltage regulated tariff (A-150) and the price arising from the application of the Contract of 1960 for the
period from January 2007 to March 2008, in application of a decision of interim measures of the Single-
Member First Instance Court of Athens claiming that the Contract of 1960 has not expired and ordering
the return of the tariffs to the framework of the said contract, discordant with the Community state aid
rules. The said difference between the two tariffs, the recovery of which is asked by the European
Commission with its above decision, amounts to €17.4 million plus interest (according to EU state aid
recovery rules and policies).
The arguments of the European Commission focus on the following:
i) Selective application of the “preferential tariffing” only for ALUMINIUM OF GREECE.
ii) The Commission believes that the seller (PPC) had no right to charge “reduced rates”. Taken into
account that PPC declined the extension of the 1960 Contract, there are reasonable grounds (for the
Commission) that the extension of the agreement secured an advantage given that it did not correspond
to the ‘usual rate” for the big industrial consumers.
Annual Financial Report for the period from1st of January to 31st of December 2014 44
iii) Finally, the commission considers that this tariffing method distorts competition and affects the
transactions between member states, because the preferential tariffing was used in a company active in
sectors whose products are widely traded among member states.
According to the Management, the EC decision on the recovery of the amount of € 17.4 million plus
interest by the Greek state, considered state aid, is based on the erroneous believe that the regulated
high voltage tariff (A150), as in force in the reference period of the decision (1/2007 – 3/2008) in the
Greek market, namely in a non-liberated electricity market in breach of the Community Legislation (in
particular Directive 2003/54/EC) in which PPC had a monopoly position, was a competitive, reasonable
electricity supply tariff (“market tariff”). As a consequence, the EC decision is based on the admission
that ALUMINIUM OF GREECE, by paying anything less than the said administratively regulated high-
voltage tariff that PPC as a monopoly and the Ministry of Development as a supervising and
administering authority practically imposed on their customers, received a kind of state aid which,
furthermore, positively affected its position compared to that of its competitors in the European market.
As acknowledged by the European Commission in the framework of the infringement procedure (No.
2195/2009), the regulated tariff A-150 should have been abolished with the inclusion of the 2nd energy
package (Directive 2003/54/EC) in order to promote the development of a competitive electricity market
and abolish the cross subsidies between consumers of even the same category, something which RAE
already stressed in 2007. Its imposition by PPC on ALUMINIUM OF GREECE with the expiry of the 1960
contract is not an indication of a seller’s behavior in a market economy but an abusive behavior of the
state monopoly taking advantage of its dominant position in order to increase its revenues based on a
state aid. If PPC accepted to negotiate with its customers (High-Voltage Connection where the tariffs
should have been deregulated on 1.7.2008), the rate charging ALUMINIUM OF GREECE with would be
determined in market and competition terms, as shown in RAE’s decisions, No 692/2011 and No
798/2011, a fact certainly leading to a lower tariff. Moreover, in the same period, ALUMINIUM OF
GREECE paid (in application of the decision of interim measures) a power rate higher than the average
power supply rate for the corresponding industries in the other member states and although the decision
acknowledges the fact that ALUMINIUM OF GREECE does not have a domestic competition, it
erroneously determines the “relevant market”, characterizing the tariff difference paid by ALUMINIUM
OF GREECE compared to the other industrial consumes as an illegal state aid.
According to the above, the Management deems that the rationale of the EC decision is a straw man,
erroneous and not adequately justified. On 6.10.2011, the ALUMINIUM OF GREECE brought the matter
before the General Court of the European Union asking for the annulment of the above decision.
The Arbitral Award before the Energy Regulator’s Arbitration Proceedings complies with the above
notion, as, although it concerns a different time-period, it accepted that the standard industrial tariff,
Annual Financial Report for the period from1st of January to 31st of December 2014 45
which PPC is trying to impose throughout the period of its dispute with ALUMINIUM OF GREECE, does
not constitute a market tariff.
PPC tried to enforce the aforementioned European Commission decision, through a payment order
issued by the Athens Court of First Instance (13601/2012), which was appealed by ALUMINIUM OF
GREECE. The Athens Court of First Instance, issued an injunction (no 857/2013) accepting company’s
petition for the suspension of the payment order’s enforcement and resolved (decision no. 860/2013)
that the issuance of a final decision on the appeal would be rendered after the decision of the General
Court of the European Union. Following that, PPC achieved to overturn the above injunction and
temporary ruling of the Court and tried again to enforce the payment order to ALUMINIUM OF GREECE.
In order to avoid further legal action before the Hellenic Courts, as well as to ensure that the Hellenic
Republic does not suffer any potential implications that it as a result of further delay in recovering the
amount of the alleged aid, ALUMINIUM OF GREECE has reached an agreement with PPC and paid the
total amount of € 20.56 million (€ 17.4 million plus interest). The remittance of said amount to PPC, as
per the provisions of the agreement signed between the parties, is conditional on the final decision of
the European Union’s General Court, thus being temporary and not indicative of the final outcome of
said case.
Moreover, the Management of the Company considers that there is a strong possibility for the
Company’s appeal against the EU decision, which was submitted to the competent European Court, to
be successful and, therefore, the “difference” of € 20.56 million (€ 17.4 million plus interest), referred to
in said decision, constitutes a contingent liability which is reasonably considered as unlikely to ultimately
constitute an actual liability. Consequently, following the reimbursement of the payments made by the
Company, no outflow of economic resources will actually take place.
On 04/06/2014, the EU General Court convened for the litigation of the foresaid case. On 08/10/2014, a
positive decision was delivered for ALUMINIUM OF GREECE. There is no impact on the Company’s
Financial Statements.
3.6 Conversion to foreign currency
a) Functional and presentation currency
The financial statements of the Company are measured using the currency of the primary economic
environment in which the entity operates (functional currency).
The financial statements of ALUMINIUM OF GREECE are presented in Euro (€), which is the operational
currency of the company and all of the subsidiaries.
b) Transactions and Balances
Annual Financial Report for the period from1st of January to 31st of December 2014 46
Transactions in foreign currency are converted in the operational currency using currency par values that
applied at the date of the transactions.
Profit or losses from currency differences that arise from such transactions and from the conversion of
the remaining balances with currency par values at year end are recognized in the income statement
under “other income/(expense)”, Currency differences arising from non-currency figures evaluated at fair
value , are considered as part of the fair value and therefore they are recognized the same way as fair
value .
3.7 Segment reporting
A business segment is defined as a group of assets and operations engaged in providing goods and
services which are subject to different risks and returns than those of other business segments. In
identifying its operating segments, management generally follows the Company's service lines, which
represent the main products and services provided by the Company. According to IFRS 8 – Operating
Segments each one of these operating segments is managed separately as each of these service lines
requires different technologies and other resources as well as marketing approaches.
A geographical segment is engaged in providing products or services within a particular economic
environment that are subject to risks and returns that are different from those of segments operating in
other economic environments.
3.8 Recognition of income and expenses
Income: Income includes the fair value of goods and services sold, net of Value Added Tax, discounts
and returns. Intercompany revenue within the Company is eliminated completely. The recognition of
revenue is done as follows:
- Sale of goods: Sales of goods are recognized when the Company transfers goods to customers,
the goods are accepted by them and the collection of the resulting claim is reasonably assured.
- Provision of services: Income from the provision of services is accounted for in the period
during which the services are rendered, based on the stage of completion of the service in relation to
the total services to be rendered.
- Income Interest: Interest income is recognized on a time proportion basis using the effective
interest rate. When there is impairment of assets, their book value is reduced to their recoverable
amount which is the present value of the expected future cash flows discounted using the initial real
interest rate. Interest is then booked using the same interest rate calculated on the impaired (new book)
value.
Annual Financial Report for the period from1st of January to 31st of December 2014 47
- Income from assigned rights for use of tangible assets (Compensative benefits): The
fair value of the assigned rights is recognized as deferred income and is amortized through the income
statement according to the completion of the contracts for which these rights have been assigned.
When a receivable is impaired, the Company reduces the carrying amount to the amount expected to be
recovered, being the estimated future cash flow discounted at the original effective interest rate of the
instrument, and continues unwinding the discount as interest income. Interest income on impaired loans
is recognized using the original effective interest rate.
- Dividends: Dividends are accounted for as revenue when the right to receive payment is
established.
Expenses: Expenses are recognized in the results on an accrued basis. The payments made for
operating leases are transferred to the results as an expense, during the time the lease is used. Interest
expenses are recognized on an accrued basis.
Cost of capital: Borrowing liabilities are recorded initially on fair value, where bank expenses and
commissions are included.
The company management assumes that the interest rates in relation to the contracted loans equal the
current fair rates of the market and as a result, there is no need for any readjustment to the value that
they are presented. Any difference that may arise between the collection (net from all transaction costs)
and the repayment value is recorded in the income statement during the borrowing period.
Loan liabilities are categorized as short-term except from cases where the company has the right to
postpone the repayment of the liability for at least 12 months after the balance sheet date.
3.9 Prior year financial statements’ restatement
Accounting policy change
During the fiscal year 2014, the Company, changed its accounting policy concerning the assessment of
cash and cash equivalents, as stated in paragraph 47 of IAS 7. In particular, the Company, reassessed
these elements as to include in cash and cash equivalents of Statement of Cash Flows, the balance of
cash deposits and cash at hand (cash registry) as stated in the Statement of Financial Position.
Based on the above, the Company includes in cash and cash equivalents, of Statement of Cash Flows,
the balance of cash deposits and cash at hand (cash registry), as stated by IAS 8, according to which an
entity can make an accounting policy change if this change results to more relevant and reliable
Annual Financial Report for the period from1st of January to 31st of December 2014 48
information about the effects of transactions, on the entity's financial position, financial performance, or
cash flows.
Prior period accounting error
On 17/12/2014, ADMIE sent briefing notes to ALUMINIUM OF GREECE which regarded the issuance of a
credit invoice relating to the Excise Tax (ET) for Gas consumed by the Combined Heat and Power (CHP)
Cogeneration Plant for the period from 28/11/2012 until 31/10/2013 (henceforth the “Period”) which
amounts to €17.4 million (see note 4.36.2, Contingent Liabilities). Regarding the above mentioned, The
Company recognized in the Financial Statements of the years 2012 and 2013, a liability (deducted from
ADMIE’s receivable balance) of € 9.1 million, receivables of €2.8 million and cost of €6.3 million.
During the Period, ADMIE would issue fee notes to the Company, pursuant to which the latter was
compensated for the ET charged for the total amount of Natural Gas consumed during the CHP process,
thus corresponding to the station’s generation of both useful heat and electricity. Moreover, based on
the Private Agreement between the Company and LAGIE, the final settlement of the compensatory price
for High-Efficiency electricity dispatched to the system was to take place following the issuance of the
relevant Ministerial Decision, in accordance with the provisions of Law 4001/2011. However, ADMIE’s
issuance of a briefing note for the return of said Natural Gas SCT constitutes a divergence by ADMIE
from the usual interpretation and application of the relevant Legislative and Regulatory provisions,
especially considering that: (a) there has been no change in the legal framework or the specific Codes
dictating the recovery of the Natural Gas ET by power producers (including HE-CHP) and (b ) the
relevant Ministerial Decision according to which the High Efficiency CHP station would receive a final
price for the high-efficiency electricity dispatched to the system, according to the provisions of the
"Supplementary Agreement for Transactions relating to Electricity from the Dispatchable High-Efficiency
CHP Station” (Government Gazette B’ 3108/23.11.2012), has not been issued. For the purpose of
portraying this divergence in the Subsidiary’s financial statements and for the section of the Natural Gas
ΕT reimbursement which corresponded to consumption for the generation of thermal energy, this
divergence constitutes a prior period accounting error, as defined in IAS 8, particularly as regards
mistakes which “include the effects of…misinterpretations of facts”, given that ADMIE’s aforementioned
divergence as regards the compensation for the Natural Gas ΕT for CHP is accounted for as such.
Moreover, on the basis of the above mentioned regarding said ADMIE briefing notes, for the period from
28/11/2012 to 31/10/2013, the Subsidiary also recognized for the rest of the months of 2013 (i.e.
November and December), a liability (deducted also from ADMIE’s receivable balance) for the part of the
Natural Gas ET which corresponded to consumptions made in generating useful heat (steam for the
Annual Financial Report for the period from1st of January to 31st of December 2014 49
Alumina production process) amount to €1.6 million, a receivable of €0.55 million and cost of €1.05
million.
Consequently, the effect of returning the Natural Gas ΕT which corresponded to consumptions for the
generation of useful heat steam for the Alumina production process), on the Company’s financial
statements is as follows:
Period 2013 As published Adjusted Effect due to IAS 8
Trade and other receivables 73.089.900 62.374.254 (10.715.646)
Other receivables 98.386.981 101.754.769 3.367.788
Current assets 270.791.351 263.443.493 (7.347.858)
Assets 884.912.780 877.564.922 (7.347.858)
Reta ined earnings 135.114.691 127.766.832 (7.347.859)
Equity 406.970.529 399.622.671 (7.347.858)
Liabilities & Equity 884.912.780 877.564.922 (7.347.858)
Income Statement
Period 2013 As published Adjusted Effect due to IAS 8
Gross Profit 2.792.581 (3.802.050) (6.594.631)
Earnings before Interest and Income Tax 15.638.102 9.043.470 (6.594.632)
Earnings before Tax (5.766.945) (12.361.576) (6.594.631)
Earnings after Tax (34.392.857) (40.987.489) (6.594.632)
Oper.Earnings before income tax,financial
results,depreciation and amortization 42.780.776 36.186.144 (6.594.632)
Statement of Comprehensive Income
Period 2013 As published Adjusted Effect due to IAS 8
Net Profit/(Loss) For The Period (34.392.857) (40.987.489) (6.594.632)
Total Comprehensive Income For The Period (40.422.022) (47.016.654) (6.594.632)
Statement of Changes In Equity
Period 2013 As published Adjusted Effect due to IAS 8
Open Balance 1st January 2013 447.392.551 446.639.324 (753.227)
Net Profi t for the Period (34.392.857) (40.987.489) (6.594.632)
Total Comprehensive Income For The Period (40.422.022) (47.016.654) (6.594.632)
Closing Balance 31st December 2013 406.970.529 399.622.671 (7.347.858)
Statement of Financial Position
PERIOD 2012 As published Adjusted Effect due to IAS 8
Trade and other receivables 79.746.009 78.992.782 (753.227)
Other receivables 81.039.850 81.039.850 -
Current assets 283.299.052 282.545.825 (753.227)
Assets 913.659.327 912.906.101 (753.227)
Reta ined earnings 169.507.548 168.754.321 (753.227)
Equity 447.392.551 446.639.325 (753.227)
Liabilities & Equity 913.659.327 912.906.101 (753.227)
Annual Financial Report for the period from1st of January to 31st of December 2014 50
3.10 Intangible assets
An intangible asset is valued initially at historical cost. After their initial recognition, intangible assets are
measured at historical cost less accumulated depreciation and any other impairment loss that may have
occurred.
The expenses related to the maintenance of computer software are recognized in the period expenses in
which they occur.
The useful life of intangible assets is either limited or infinite according to their nature. Intangibles assets
with a limited useful life are amortized during their useful life and their amortization begins when the
asset is available for use and is recognized in the income statement and classified under operational
expenses.
The period and the amortization method are re-evaluated at least at the end of each period, if the
expected useful life or the expected rate of consumption of the future economic benefits, which are
embedded in the asset, the amortization period or method, are altered respectively. Such changes are
considered as changes in accounting estimates.
Software: Software licenses are valued in cost of acquisition less accumulated depreciation.
Depreciation is calculated using the straight-line method during the assets’ useful life that range from 1
to 5 years.
Research and Development Expenses: Research and Development expenditures are recognized as
expenses when they are realized. The expenses which arise from the developing programs (related to
the design and the test of new or improved products) are capitalized if it is possible to produced future
economic benefit. The other development expenditures are booked as an expense in the results when
they are realized. Previous years’ development expenditures recognized as expenses, cannot be
capitalized in the future fiscal years. The capitalized development expenses are depreciated from the
beginning of the product’s economic life using the straight line method during the period of the product’s
future economic benefits.
Legal rights to explore mines: The legal rights to explore mines concern rights that the Company has
acquired mining mineral reserves in several geographical areas. In cost of the mining rights, apart from
nominal value of the rights, any cost that relates to the initial evaluation of the rehabilitation cost of the
area where work has been done, the commitment of the Company either during the acquirement of the
right or as a result of its use for a certain time period.
Annual Financial Report for the period from1st of January to 31st of December 2014 51
Land Stripping & Restoration expenses: Land Stripping & Restoration expenses are recognized as
intangible assets as they offer to the Company economic benefits and their depreciation performed
based on production method.
Emission Rights: The Company acquires CO2 emission rights in order to cover the liability arising from
the actual CO2 emissions of the production units. The liability is measured at fair value to the extent that
the Company has the obligation to cover its emissions by purchasing (after the set of any CO2
allowances held by free allocations). CO2 emission rights acquired and held are recognized as intangible
assets at cost less any accumulated impairment losses.
3.11 Tangible assets
Fixed assets are reported in the financial statements at acquisition cost or deemed cost, as determined
based on fair values as at the transition dates, less accumulated depreciations and any impairment
suffered by the assets. The acquisition cost includes all the directly attributable expenses for the
acquisition of the assets.
Subsequent expenditure is added to the carrying value of the tangible fixed assets or is booked as a
separate fixed asset only if it is probable that future economic benefits will flow to the Company and
their cost can be accurately and reliably measured. The repair and maintenance cost is booked in the
results when such is realized.
Upon sale of the tangible fixed assets, any difference between the proceeds and the book value are
booked as profit or loss to the results.
Depreciation of tangible fixed assets (other than Land which are not depreciated) is calculated using the
straight line method over their useful life, as follows:
� Buildings up to 40 years
� Mechanical equipment up to 30 years
� Cars 4 - 5 years
� Other equipment 10 - 20 years
Self-constructed tangible fixed assets constitute an addition to the acquisition cost of tangible assets at a
value that includes the direct cost of employee’s salaries (including the relevant employer’s
contributions), the cost of materials used and other general costs.
The residual values and useful economic life of tangible fixed assets are subject to reassessment at each
balance sheet date. When the book value of tangible fixed assets exceeds their recoverable amount, the
difference (impairment) is immediately booked as an expense in the income statement.
Annual Financial Report for the period from1st of January to 31st of December 2014 52
3.12 Impairment of Assets
Assets with an indefinite useful life are not depreciated and are subject to an impairment review
annually and when some events suggest that the book value may not be recoverable any resulting
difference is charged to the period’s results. Assets that are depreciated are subject to an impairment
review when there is evidence that their value will not be recoverable. The recoverable value is the
greater between the net sales value and the value in use. An impairment loss is recognized by the
company when the book value of these assets (or cash generating unit- CGU) is greater than its
recoverable amount.
Net sales value is the amount received from the sale of an asset at an arm’s length transaction in which
participating parties have full knowledge and participate voluntarily, after deducting any additional direct
cost for the sale of the asset, while value in use is the present value of estimated future cash flows that
are expected to flow into the company from the use of the asset and from its disposal at the end of its
estimated useful life.
3.13 Leases
Company as Lessee: Leases of fixed assets with which all the risks and benefits related with
ownership of an asset are transferred to the Company, regardless of whether the title of ownership of
the asset is eventually transferred or not, are finance leases. These leases are capitalized at the
inception of the lease at the lower of the fair value of the asset and the present value of the minimum
lease payments. Each lease payment is apportioned between the reduction of the liability and the
finance charge so that a fixed interest rate on the remaining financial liability is achieved. The relevant
liabilities from leases, net of financial expenses, are reported as liabilities. The part of the financial
expense that relates to finance leases is recognized in the income statement during the term of the
lease. Fixed assets acquired through finance leases are depreciated over the shorter of their useful life
and the lease term.
Lease agreements where the lessor transfers the right of use of an asset for an agreed period of time,
without transferring, however, the risks and rewards of ownership of the fixed asset are classified as
operating leases. Payments made with respect to operating leases (net of any incentives offered by the
lessor) are recognised in the income statement proportionately throughout the term of the lease.
Company as lessor: When fixed assets are leased through financial leasing, the present value of the
lease is recognized as a receivable. The difference between the gross amount of the receivable and its
present value is registered as a deferred financial income. The income from the lease is recognized in
Annual Financial Report for the period from1st of January to 31st of December 2014 53
the period’s results during the lease using the net investment method, which represents a constant
periodic return.
Fixed assets that are leased through operating leases are included in the balance sheet’s tangible assets.
They are depreciated during their expected useful life on a basis consistent with similar self-owned
tangible assets. The income from the lease (net of possible incentives given to the lessees) is recognized
using the constant method during the period of the lease.
3.14 Financial instruments
Financial instrument is any contract that creates a financial asset in an enterprise and a financial liability
or Equity instrument in another. The financial instruments of the Company are classified in the following
categories according to the substance of the contract and the purpose for which they were purchased.
i) Financial instruments valued at fair value through the income statement
These comprise assets that satisfy any of the following conditions:
- Financial assets that are held for trading purposes (including derivatives, except those that are
designated and effective hedging instruments, those that are acquired or incurred for the purpose of
sale or repurchase and, finally, those that are part of a portfolio of designated financial instruments).
- Upon initial recognition it is designated by the company as an instrument valued at fair value, with any
changes recognized through the Income Statement.
In the Balance sheet of the Company the exchanges and the assessment at fair value of derivatives they
are portrayed in separate items of Asset and Liabilities with titled « Derivatives Financial Assets ». The
changes at fair value of derivatives are registered in income statement.
ii) Loans and receivables
They include non-derivative financial assets with fixed or predefined payments, which are not traded in
active markets. The following are not included in this category (loans and receivables):
a) Receivables from down payments for the purchase of goods or services,
b) Receivables relating to tax transactions, which have been legislatively imposed by the state,
c) Any receivable not covered by a contract, which gives the company the right to receive cash, or other
financial fixed assets.
Loans and receivables are included in current assets, except those with a maturity date exceeding 12
months from the balance sheet date. The latter are included in the non-current assets.
Annual Financial Report for the period from1st of January to 31st of December 2014 54
(iii) Held-to-maturity investments: Financial assets with fixed or determinable payments and fixed
maturity are classified as held-to-maturity when the Company has the positive intention and ability to
hold to maturity. Investments intended to be held for an undefined period are not included in this
classification.
3.15 Inventories
Inventories include products, raw materials and goods that were acquired. The cost includes all
expenses that were made in order for inventories to reach their present position and condition, and
which are directly distributable to the production process, as well as a part of general expenses related
to production, which is absorbed based on the normal capabilities of the production facilities. Financial
costs are not taken into consideration. At the balance sheet date, inventories are valued at the lower of
acquisition cost and net realizable value. Net realizable value is the estimated sales price during the
normal course of the company’s business less any relevant sales expenses and it is determined based on
the current selling prices of inventories and in line with the normal activity of the Company less any sale
expenses, where necessary.
3.16 Trade Receivables
Receivables from customers are initially booked at their fair value and are subsequently valued at their
amortized cost using the method of the effective interest rate, less the provision for impairment. In the
event that the amortized cost or the cost of a financial asset exceeds the present value, then this asset
is valued at its recoverable amount, i.e. at the present value of the future cash flows of the asset, which
is calculated using the real initial interest rate.
The relevant loss is immediately transferred to the period’s profit and loss. The impairment losses, i.e.
when there is objective evidence that the Company is unable to collect all the amounts owed based on
the contractual terms, are recognized in the income statement.
3.17 Cash and cash equivalent
Cash and cash equivalents include cash at bank and in hand as well as short term highly liquid
investments such as money market instruments and bank deposits. Money market instruments are
financial assets carried at fair value through profit or loss.
3.18 Share capital
Share capital is determined using the nominal value of shares that have been issued. Ordinary shares
are classified as Equity. Increase in share capital with cash includes any difference from premia during
Annual Financial Report for the period from1st of January to 31st of December 2014 55
the initial issue of the share capital. Expenses incurred for the issuance of shares reduce, after deducting
the relevant income tax, the proceeds from the issue.
3.19 Income tax & deferred tax
The tax for the period comprises current income tax and deferred tax, i.e. the tax charges or tax credits
that are associated with economic benefits accruing in the period but have been assessed by the tax
authorities in different periods. Income tax is recognized in the income statement of the period, except
for the tax relating to transactions that have been booked directly to Equity. In such case the related tax
is, accordingly, booked directly to Equity. Current income taxes include the short-term liabilities or
receivables from the fiscal authorities that relate to taxes payable on the taxable income of the period
and any additional income taxes from previous periods (tax audit differences).
Current taxes are measured according to the tax rates and tax laws prevailing during the financial years
to which they relate, based on the taxable profit for the year. All changes to the short-term tax assets or
liabilities are recognized as part of the tax expense in the income statement.
Deferred income tax is determined according to the liability method which results from the temporary
differences between the book value and the tax base of assets or liabilities. Deferred tax is not booked if
it results from the initial recognition of an asset or liability in a transaction, except for a business
combination, which when it occurred did not affect neither the accounting nor the tax profit or loss.
Deferred tax assets and liabilities are valued based on the tax rates that are expected to be in effect
during the period in which the asset or liability will be settled, taking into consideration the tax rates
(and tax laws) that have been put into effect or are essentially in effect up until the balance sheet date.
In the event where it is impossible to identify the timing of the reversal of the temporary differences, the
tax rate in effect on the day after the balance sheet date is used. Deferred tax assets are recognized to
the extent that there will be a future tax profit to be set against the temporary difference that creates
the deferred tax asset.
Deferred income tax is recognized for the temporary differences that result from investments in
subsidiaries and associates, except for the case where the reversal of the temporary differences is
controlled by the Company and it is possible that the temporary differences will not be reversed in the
foreseeable future.
Most changes in the deferred tax assets or liabilities are recognized as part of the tax expense in the
income statement. Only changes in assets or liabilities that affect the temporary differences are
recognized directly in the Equity of the Company, such as the revaluation of property value that results
Annual Financial Report for the period from1st of January to 31st of December 2014 56
in the relevant change in deferred tax assets or liabilities being charged against the relevant Equity
account.
3.20 Employee benefits
3.20.1 Short-term benefits
Short-term employee benefits (except post-employment benefits) monetary and in kind are recognized
as an expense when they accrue. Any unpaid amount is booked as a liability, while in the case where the
amount paid exceeds the amount of services rendered, the company recognizes the excess amount as
an asset (prepaid expense) only to the extent that the prepayment will lead to a reduction of future
payments or to reimbursement.
3.20.2 Post-employment benefits
Post-employment benefits comprise pensions or other benefits (life insurance and medical insurance) the
company provides after retirement as an exchange for the employees’ service with the company. Thus,
such benefits include defined contribution schemes as well as defined benefits schemes. The accrued
cost of defined contribution schemes is booked as an expense in the period it refers to.
• Defined contribution scheme
According to the defined contributions scheme, the (legal or implied) obligation of the Company is
limited to the amount that it has been agreed that it will contribute to the entity (i.e. pension fund) that
manages the contributions and provides the benefits. Thus the amount of benefits the employee will
receive depends on the amount the company will pay (or even the employee) and from the paid
investments of such contributions.
The payable contribution from the company to a defined contribution scheme is either recognized as a
liability after the deduction of the paid contribution, or as an expense.
• Defined benefits scheme
A Defined benefits scheme is a post-employment program that is not included in a defined contribution
scheme. Typically, it defines an amount of benefits that the employee is going to acquire after his
retirement based on factors such as the age, the years of service and the reimbursement. The liability
that is reported in the balance sheet with respect to this scheme is the present value of the liability for
the defined benefit less the fair value of the scheme’s assets (if there are such) and the changes that
arise from any actuarial profit or loss and the service cost. The commitment of the defined benefit is
calculated annually by an independent actuary with the use of the projected unit credit method. The
yield of long-term Greek Government Bonds is used as a discount rate. Given the fiscal situation of that
Annual Financial Report for the period from1st of January to 31st of December 2014 57
time, especially for the wide spreads of the Hellenic Bonds and the financial crisis as well as for the long
term predictive nature of the actuary liability, the discount rate should be set at a lower level than it was
on 31/12/2014. The corresponding discount rate used for the 31/12/2013 valuation was 3.50%,
therefore, based on the above, the discount rate was set to 2.50%.
A Defined benefits scheme is based on various parameters, such as age, years of service, salary, specific
obligations for benefits payable. The provisions that concern the period are included in personnel costs
in the accompanying statements of income and consist of the current and past service cost, the relative
financial costs and any possible additional charges. Regarding unrecognized actuarial gains or losses, is
followed the revised IAS 19R, which includes a number of changes to accounting for defined benefit
plans, including:
- The recognition of actuarial gains / losses in other comprehensive income and permanent exclusion
from the income statement,
- Non-recognition of expected returns on investment of the program in the period but the recognition of
such interest on net liability / (asset) providing calculated using the discount rate used to measure the
defined benefit obligation,
- Recognition of past service cost in the income statement on the earlier of the dates or amend program
recognized when the related restructuring or terminal provision,
- Other changes would entail new disclosures, such as quantitative analysis.
3.21 Grants
The Company recognizes Government Grants that cumulatively satisfy the following criteria:
a) There is reasonable certainty that the company has complied or will comply to the conditions of the
grant and
b) It is probable that the amount of the grant will be received.
Government Grants are booked at fair value and are systematically recognized as revenues according to
the principle of matching the grants with the corresponding costs that they are subsidizing. Government
Grants that relate to assets are included in long-term liabilities as deferred income and are recognized
systematically and rationally as revenues over the useful life of the fixed asset.
3.22 Loans
Bank loans provide long-term financing for the operating activities of the company. All loans are initially
recognized at cost, which is the fair value of the exchange that is included apart from issuance cost in
relation to borrowing.
Annual Financial Report for the period from1st of January to 31st of December 2014 58
Loans are recorded as liabilities at the date the capital is received. Issuance expenses are included in the
income statement. At dates following the balance sheet dates, loans appear at the face unpaid value.
Interest expenses are recognized when paid and at the balance sheet date in the extent that these
expenses are used up and paid for. Loans are categorized as long-term, if they mature in more than a
year and in short-term in they mature in a year or less.
3.23 Provisions
Provisions are recognized when a current obligation is likely to lead to an outflow of financial assets form
the company when this can be valuated reliably. Provisions are reviewed during the date when each
balance sheet is compiled so that they may reflect the present value of the outflow that is expected to
be required for the settlement of the obligation. Contingent liabilities are not recognized in the financial
statements but are disclosed, except if the probability that there will be an outflow of resources that
embody economic benefits is very small. Contingent claims are not recognized in the financial
statements but are disclosed provided that the inflow of economic benefits is probable.
3.24 Dividend distribution
The distribution of dividends to the shareholders of the company is recognized as a liability in the
financial statements at the date on which the General Meeting of the shareholders approves the
distribution.
3.25. CO2 emission Liability
CO2 emissions are recognized according to the net liability approach through which, the Group
recognizes liabilities from CO2 emissions when the actual emissions exceed the distributed emission
rights from E.U. The liability is measured at fair value to the extent that the Company has the obligation
of covering the deficit through the market. Emission rights acquired over the required quantities for
covering the deficit are recognized as intangible assets at cost.
3.26 Hedging Accounting
The Company uses Derivative financial instruments such as Commodity Futures and Currency Forwards
in order to mitigate the risk related to its business activities along with the risk related to the funding of
such activities. At inception of the hedging transaction, the Company validates the hedging relationship
between the underlying and the hedging instrument as far as its risk management strategy is concerned.
The Company also verifies the hedging efficiency from the beginning of the hedging relationship and on
a continuing basis.
Annual Financial Report for the period from1st of January to 31st of December 2014 59
All derivative financial instruments are initially recognized at fair value as at the date of settlement and
are valued on a mark - to - market basis on each balance sheet date. The result of this valuation is
recognized as an asset when positive and as a liability when negative.
When a derivative financial instrument is no longer regarded as hedging instrument any difference in its
fair value is recognized in profit and loss.
There are three kinds of hedges:
A. Fair Value Hedging
Fair value hedging is regarded when hedging the exposure in the fluctuations of the fair value of a
recognized asset, liability, contingent liability or part of them that could have a negative impact on
results.
When hedging accounting, concerning fair value hedge, is followed then any profit or loss from
revaluation is recognized in profit and loss.
B. Cash Flow Hedging
The Company enters into Cash Flow Hedging transactions in order to cover the risks that cause
fluctuations in its cash flows and arise either from an asset or a liability or a forecasted transaction.
On revaluation of open positions, the effective part of the hedging instrument is recognized directly in
Equity as “Hedging Reserve” while the ineffective part is recognized in Profit & Loss. The amounts
recognized in Equity are transferred in profit and loss at the same time as the underlying.
When a hedging instrument has expired, sold, settled or does not qualify for hedging accounting all
accumulated profit or loss recognized in Equity, stays in Equity until the final settlement of the
underlying. If the underlying is not expected to be settled then any profit or loss recognized in Equity is
transferred to profit and loss account.
C. Hedging of a Net Investment
Hedging of a foreign investment is regarded for accounting purposes in a way similar to cash flow
hedging.
The effective part of the hedging result is recognized directly in Equity while any ineffective part is
recognized in profit and loss. Accumulated profit or loss recognized in Equity is transferred in profit and
loss account at the time of disposal of the investment.
Determination of Fair Value
The fair value of financial instruments trading in an active market is defined by the published prices as of
the date of the financial statements. The fair value of financial instruments not traded in active market is
Annual Financial Report for the period from1st of January to 31st of December 2014 60
defined through the use of valuation techniques and assumptions based on relevant market information
as of the date of the financial statements.
Annual Financial Report for the period from1st of January to 31st of December 2014 61
4. Business Risk Management
4.1 Financial risk management aims and policies
The Company's activities give rise to multiple financial risks, including the current and interest rate
related risks, the volatility in market prices, credit risks, and liquidity risks. The Company's risk
management program aims at containing potential negative influence to its financial results, as this may
arise from the inability to predict financial markets and the volatility with respect to cost and sales
variables. The Company uses derivative financial instruments in order to hedge its exposure to specific
categories of risk.
The essential risk management policies are determined by the Company's Management and it’s consort
with the Group’s general policy. The risk management policy is applied by the Corporate Treasury
Department. The Corporate Treasury Department, identifies, quantifies, manages and hedges the
financial risks arising from the main operating activities of the Company.
4.2 Fair Value Measurements
The following table presents financial assets and liabilities measured at fair value in the statement of
financial position in accordance with the fair value hierarchy. This hierarchy groups financial assets and
liabilities into three levels based on the significance of inputs used in measuring the fair value of the
financial assets and liabilities. The fair value hierarchy has the following levels:
- Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
- Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or
liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and
- Level 3: inputs for the asset or liability that are not based on observable market data (unobservable
inputs).
The level within which the financial asset or liability is classified is determined based on the lowest level
of significant input to the fair value measurement.
The financial assets and liabilities measured at fair value in the statement of financial position are
grouped into the fair value hierarchy as follows:
Annual Financial Report for the period from1st of January to 31st of December 2014 62
4.3 Market Risk
Exchange rate risk
The Company develops activity at international level and is therefore exposed to exchange rate risk that
arises mainly from the US dollar. Such risk primarily stems from commercial transactions in foreign
currency as well as from net investments in foreign financial entities. For the management of such risk,
the Group’s Financial Management Department establishes financial derivative and non-derivative
instruments with financial organizations.
The Company’s exposure to commodities price risk and the corresponding sensitivity may depending on
the transaction’s quantity in foreign currency as well the level of the prices.
Commodity’s Price Risk
Goods prices that are mainly determined by international markets and global offer and demand result in
the Company’s exposure to the relevant prices fluctuation risk.
Goods’ prices are connected both to variables that determine revenues (e.g. metal prices at LME) and to
the Company’s cost (e.g. natural gas prices). Due to its activity, the Company is exposed to price
fluctuation of aluminium (AL), zinc (Zn), lead (Pb) as well as to price fluctuation of natural gas, as
production cost.
As regards price fluctuation of metals, the Company’s policy is to minimize risk by using financial
derivative instruments (forward deals commodity fulfilling contracts).
The Company's exposure to commodities price risk and the corresponding sensitivity may vary
depending on the volume of transactions and price levels. However, the following analysis is considered
representative of the Company's exposure to this risk for the year 2014.
(Amounts in thousands €) 31/12/ 2014 Level 1 Level 2 Level 3
Financial Assets
Stock Shares - - - -
Bank Bonds - - - -
Financial assets of the investment portfolio - - - -
Financial Assets Available For Sale - - - -
Foreign Exchange Contracts For Cash Flow Hedging (Forward) - - - -
Financial Assets - - - -
Financial Liabilities
Foreign Exchange Swap Contracts (Swaps) - - - -
Foreign Exchange Contracts For Cash Flow Hedging (Forward) 404 - 404 -
Foreign Exchange Contracts (Forward) - - - -
Options 890 - 890 -
Commodity Futures - - - -
Commodity Options - - - -
Financial Liabilities 1.294 - 1.294 -
ALUMINIUM OF GREECE
Annual Financial Report for the period from1st of January to 31st of December 2014 63
Interest rate risk
The Company’s assets that are exposed to interest rate fluctuation primarily concern cash and cash
equivalents. The Company’s policy as regards financial assets is to invest its cash in floated interest rates
so as to maintain the necessary liquidity while achieving satisfactory return for its shareholders. In
addition, for the totality of its bank borrowing, the Company uses floating interest rate instruments.
Depending on the level of liabilities in floating interest rate, the Company proceeds to the assessment of
interest rate risk and when necessary examines the necessity to use interest bearing financial derivative
instruments.
The Company’s policy consists in minimizing its exposure to interest bearing cash flow risk as regards
long-term funding.
Effect from risk factors and sensitivities analysis
The effect from the above mentioned factors to Company’s operating results, equity and net results
presented in the following table:
It is noted that an increase of five (5) basis points presume a decrease of €0.9 million on net results and
Equity.
$/t + 50 - 50
EBITDA mil € 7,3 -7,3
Net Results mil € 7,3 -7,3
Equity mil € 7,3 -7,3
€/$ - 0,05 + 0,05
EBITDA mil € 9,3 -9,3
Net Results mil € 9,3 -9,3
Equity mil € 9,4 -9,4
$/t - 50 + 50
EBITDA mil € 0,3 -0,3
Net Results mil € 0,3 -0,3
Equity mil € 0,3 -0,3
€/MWh - 5 + 5
EBITDA mil € 12,7 -12,7
Net Results mil € 12,7 -12,7
Equity mil € 12,7 -12,7
Fuel Oil Price (FOB MED)
Natural Gas
LME AL (Alouminium)
Parity €/$
Annual Financial Report for the period from1st of January to 31st of December 2014 64
The Company’s exposure in price risk and therefore sensitivity may vary according to the transaction
volume and the price level. However the above sensitivity analysis is representative for the Company
exposure in 2014.
4.4 Credit Risk
The Company does not exhibit any considerable concentration of credit risk in any of the contracted
parties. Credit risk originates from available cash and cash equivalents, derivative financial instruments
and deposits at banks and financial institutions; also from exposure to client derived credit risk.
Regarding commercial and other claims, the Company is not theoretically exposed to significant credit
risks, as of the multifaceted nature of the Company's activities, there is no significant concentration of
credit risk with respect to its commercial requirements, as this is allocated over a high number of clients.
However, the atypical conditions that dominate the Greek market and several other markets in Europe
are forcing the Company to constantly monitor its business claims and also to adopt policies and
practices to ensure that such claims are collected. By way of example, such policies and practices include
insuring credits where possible; pre-collection of the value of product sold to a considerable degree;
safeguarding claims by collateral loans on customer reserves; and receiving letters of guarantee.
To minimize credit risk on cash reserves and cash equivalents; in financial derivate contracts; as well as
other short term financial products, the Company specifies certain limits to its exposure on each
individual financial institution and only engages in transactions with creditworthy financial institutions of
high credit rating.
The tables below summarize the maturity profile of the Company's financial assets as at 31.12.2014 and
31.12.2013 respectively:
4.5 Liquidity Risk
Liquidity Risk
The liquidity risk is linked to the need to sufficiently finance the Company's activity and growth. The
relevant liquidity requirements are the subject of management through the meticulous monitoring of
debts of long term financial liabilities and also of payments made on a daily basis.
(Amounts in €)
Liquidity Risk Analysis -
Trade Receivables
0-3 months 3-6 months 6-12 months > 1 year
2014 11.816.184 3.817.369 - - 64.327.775 79.961.329
2013 29.039.668 14.670.276 (10.715.647) - 29.379.957 62.374.254
ALUMINIUM OF GREECE
Past due but not impaired
Non past due but not
impaired Total
Annual Financial Report for the period from1st of January to 31st of December 2014 65
The Company ensures the provision of adequate credit facilities available so as to cover short term
business requirements. In addition, funds for long term solvency needs shall be ensured through an
adequate amount of borrowed capital and the ability of selling long term financial assets.
The maturity of financial liabilities in December 31, 2014 and 2013 for the Company pictured as follows:
4.6 Capital Management
The primary objective of the Company’s capital management is to ensure the continuous smooth
operation of its business activities and the achievement of its growth plans combined with an acceptable
credit rating. For the purpose of capital management, the Company monitors the ratios “Net Debt to
EBITDA” and “Net Debt to Equity”. As net debt, the Company defines interest bearing borrowings minus
cash and cash equivalents. The ratios are managed in such a way in order to ensure the Company a
credit rating compatible with its strategic growth.
The table below presents ratio results for the years December 31, 2014 and 2013 respectively:
Liquidity Risk Analysis - Liabilities
2014
up to 6
months
6 to 12
months1 to 5 years after 5 years Total
(Amount in €)
Long-term debt - - 111.790.367 - 111.790.367
Short-term debt 18.802.682 29.325.389 - - 48.128.071
Long-term liabil ities payable in the next
period - 20.865.500 - - 20.865.500
Leasing l iabil ities - - - - -
Trade and other payables 128.319.244 25.524.302 - - 153.843.546
Other payables 15.382.577 1.343.088 - - 16.725.665
Total 162.504.503 77.058.279 111.790.367 - 351.353.149
ALUMINIUM OF GREECE
Liquidity Risk Analysis - Liabilities
2013
up to 6
months
6 to 12
months1 to 5 years after 5 years Total
(Amount in €)
Long-term debt - - 131.897.431 - 131.897.431
Short-term debt - 31.865.073 - - 31.865.073
Long-term liabil ities payable in the next
period - 5.655.000 - - 5.655.000
Leasing l iabil ities - - - - -
Trade and other payables 104.059.636 38.682.786 - - 142.742.422
Other payables 10.840.404 - 3.372.954 - 14.213.359
Total 114.900.040 76.202.859 135.270.385 - 326.373.285
ALUMINIUM OF GREECE
Annual Financial Report for the period from1st of January to 31st of December 2014 66
(Amoints in €) 2014 2013
Long-term debt 111.790.367 131.897.431
Short-term debt 48.128.071 31.865.073
Long-term Liabil ities payable in the next period 20.865.500 5.655.000
Cash and cash equivalents (3.206.357) (8.727.400)
Net debt of continuing operations 177.577.581 160.690.104
Group Net debt 177.577.581 160.690.104
Oper.Earnings before income tax,financial results,depreciation and amortization 65.001.361 36.186.144
EQUITY 412.147.886 399.622.671
Group Net debt / Oper.Earnings before income tax,financial results,depreciation and
amortization 2,73 4,44
Group Net debt / EQUITY 0,43 0,40
ALUMINIUM OF GREECE
Annual Financial Report for the period from1st of January to 31st of December 2014 67
5. Segment reporting
5.1 Primary reporting format – business segments
ALUMINIUM OF GREECE recognizes three sectors (alumina trade, aluminium trade, electric energy trade)
as operational sectors. According to IAS 8, the above operational sectors are those used by management
for internal purposes and strategically decisions are made based on the readjusted results of every
sector, and which are used for measuring their effectiveness. Measurement of each segment’s efficiency
is based on operational results after deletion of intercompany transactions.
Additionally, sectors of smaller importance, for which the required disclosure amount limits are not met,
are included in the following table under the heading “Others”.
The allocation of the consolidated items of the assets and liabilities of the company per business sector
on 31st of December 2014 is the following:
5.2 Secondary reporting format – geographical segments
The Company is active in Greece where it has its Headquarters. It operates also in Euro zone and other
countries.
Company’s sales allocation to geographical segments, are as follows:
(Amounts in Euro) Alumina Aluminium
Electric
energy
Not
Allocated Total
Total gross sales per segment 199.831.740 321.227.611 153.581.154 971.654 675.612.159
In house sales (90.308.440) - (122.736.366) - (213.044.805)
Net Sales 109.523.301 321.227.611 30.844.788 971.654 462.567.354
Operating profit 16.579.927 19.923.521 441.589 - 36.945.038
Financing income - - - 6.478.346 6.478.346
Financing expenses - - - (21.955.302) (21.955.302)
Other Financing Results - - - (2.209.999) (2.209.999)
Profit before taxes 16.579.927 19.923.521 441.589 (17.686.955) 19.258.083
Income Tax - - - (4.291.933) (4.291.933)
Net profit 16.579.927 19.923.521 441.589 (21.978.888) 14.966.150
ALUMINIUM OF GREECE
Sales Non current assets Sales Non current assets
(Amounts in €) 2014 2014 2013 2013
Greece 145.187.012 563.972.493 126.061.096 579.368.707
European Union 256.660.600 - 234.280.029 -
Other Countries 60.719.742 - 67.872.205 -
Regional Analysis 462.567.354 563.972.493 428.213.330 579.368.707
ALUMINIUM OF GREECE
Annual Financial Report for the period from1st of January to 31st of December 2014 68
The Company’s income in Europe and also in the main countries of activity, generated by the Company's
internal information system. This system is the basic information system of the Company for income tax
purposes and declaration of VAT to the tax authorities. The total amounts which are pictured into the
Company’s functional areas consort with the basic financial data as presented in the financial
statements:
(Amounts in €) 1/1-31/12/2014 1/1-31/12/2013
Sales of goods produced 431.943.257 424.563.508
Sales of other inventory 32.210.937 2.573.038
Other (1.586.840) 1.076.784
Sales 462.567.354 428.213.330
ALUMINIUM OF GREECE
Annual Financial Report for the period from1st of January to 31st of December 2014 69
6. Notes on the Financial Statements
6.1 Tangible Assets
The Company’s tangible assets are analyzed, into the Financial Statements, as follows:
Investment on tangible assets, during the fiscal year 2014, for the company amounted to €16.5 million.
Depreciation is analyzed in notes 6.20 and 6.21.
Encumbrances:
Company’s assets are pledged for an amount of € 323.7 million as bank debt collateral.
Commitments:
Company’s commitments due to construction contracts and finance lease at 31/12/2014 amounted to
€15.0 million.
(Amounts in €)
Land &
Buildings
Vehicles &
mechanical
equipment
Furniture and other
equipment
Tangible assets
under
construction Total
Gross Book Value 177.205.585 874.300.853 15.966.890 6.846.828 1.074.320.156
Accumula ted deprecia tion and/or impairment 21.707.935 465.755.030 12.552.041 - (500.015.006)
Net Book value as at 01/01/2013 155.497.650 408.545.822 3.414.849 6.846.828 574.305.149
Gross Book Value 178.811.089 893.192.096 17.667.826 5.512.844 1.095.183.855
Accumula ted deprecia tion and/or impairment 23.546.662 481.273.853 13.032.589 - (517.853.104)
Net Book value as at 31/12/2013 155.264.428 411.918.243 4.635.237 5.512.844 577.330.752
Gross Book Value 179.235.683 894.372.464 18.497.401 8.467.042 1.100.572.590
Accumula ted deprecia tion and/or impairment 25.453.924 497.803.638 13.587.676 - (536.845.238)
Net Book value as at 31/12/2014 153.781.759 396.568.826 4.909.725 8.467.042 563.727.352
(Amounts in €)
Land &
Buildings
Vehicles &
mechanical
equipment
Furniture and other
equipment
Tangible assets
under
construction Total
Net Book value as at 31/12/2013 155.497.650 408.545.822 3.414.849 6.846.828 574.305.149
Additions - 19.477.559 - 12.658.602 32.136.162
Depreciations (1.838.727) (26.769.695) (480.548) - (29.088.969)
Tra nsfers 1.605.504 10.664.556 1.700.936 (13.992.586) (21.590)
Net Book value as at 31/12/2013 155.264.428 411.918.243 4.635.237 5.512.844 577.330.752
Additions - 7.709.664 - 8.805.555 16.515.219
Depreciations (1.907.262) (27.428.213) (555.087) - (29.890.562)
Tra nsfers 424.593 4.369.133 829.575 (5.851.357) (228.057)
Net Book value as at 31/12/2014 153.781.759 396.568.826 4.909.725 8.467.042 563.727.352
ALUMINIUM OF GREECE
ALUMINIUM OF GREECE
Annual Financial Report for the period from1st of January to 31st of December 2014 70
6.2 Intangible Assets
The company’s intangible assets mainly involve acquired licenses and software as well as developing
software. The Company’s intangible assets are analyzed as follows:
The amount which appears in the category 'other intangibles assets" refers to emission rights acquired
more than necessary to cover the deficit of the current year and is expected to be consumed in the next
fiscal year. The depreciations which affect the income statements are appeared at the notes 6.20 and
6.21.
(Amounts in €) Software
Other
Intangible
Assets Total
Gros s Book Va lue 6.610.767 - 6.610.767
Accumulated depreciation and/or impai rment 6.506.748 - 6.506.748
Net Book value as at 01/01/2013 104.019 - 104.019
Gros s Book Va lue 6.632.357 1.969.612 8.601.969
Accumulated depreciation and/or impai rment 6.564.014 - 6.564.014
Net Book value as at 31/12/2013 68.342 1.969.612 2.037.955
Gros s Book Va lue 6.860.414 385 6.860.799
Accumulated depreciation and/or impai rment 6.615.658 - 6.615.658
Net Book value as at 31/12/2014 244.756 385 245.141
(Amounts in €) Software
Other
Intangible
Assets Total
Net Book value as at 31/12/2013 104.019 - 104.019
Addi tions - 1.969.612 1.969.612
Depreciations (57.266) - (57.266)
Trans fers 21.590 - 21.590
Net Book value as at 31/12/2013 68.342 1.969.612 2.037.955
Addi tions - 385 385
Depreciations - (1.969.612) (1.969.612)
Trans fers (51.644) - (51.644)
Net Book value as at 31/12/2014 228.057 - 228.057
Net Book value as at 31/12/2014 244.756 385 245.141
ALUMINIUM OF GREECE
ALUMINIUM OF GREECE
Annual Financial Report for the period from1st of January to 31st of December 2014 71
6.3 Investments on Subsidiaries
In separate financial statements, investments on subsidiaries have been evaluated in the cost of
acquisition.
Summary information about the subsidiaries:
6.4 Investments on associates
Summary information about the associates:
31/12/2014 31/12/2013
Balance at the beginning of the period 19.719.350 19.719.350
Exchange-rate differences - -
Additions - -
Sales/ Cancellations - -
Losses (2.209.999) -
Balance at the end of the period 17.509.351 19.719.350
ALUMINIUM OF GREECE
Name Location Total of shares
Percentage of
contribution
31/12/2014
Percentage of
contribution
31/12/2013
DELFI DISTOMON AME Greece 3.099.000 100% 100%
DESFINA SHIPPING COMPANY Greece 2.210.000 100% 100%
31/12/2014 31/12/2013
Opening Balance 500.000 500.000
Consolidation Of Subsidiaries - -
Additions - -
Sales - Reductions - -
Other changes in equity - -
Closing Balance 500.000 500.000
ALUMINIUM OF GREECE
Name Location
Percentage of
contribution
31/12/2014
Percentage of
contribution
31/12/2013
MYTILINEOS FINANCIAL PARTNERS S.A. Luxembourg 25% 25%
Annual Financial Report for the period from1st of January to 31st of December 2014 72
6.5 Deferred tax assets and liabilities
Deferred tax is calculated on temporary differences, with the use of tax rate in the country where the
company operates. The amounts that appear in the balance sheet are estimated that will be retrieved or
settled after the 31st December 2014. Deferred tax related to assets and liabilities before offsetting for
the year 2014 is analyzed below:
(Amounts in €)At 1st
January
Recognised In
Profit Or Loss
Recognised In Other
Comprehensive Income
As At 31
December
Deferred Tax
Asset
Deferred Tax
Laibility
Non - Current Assets
Intangibl e Assets 512.930 242.774 - 755.704 755.704 -
Tangible Assets (39.288.204) 1.231.991 - (38.056.214) - (38.056.214)
Current Assets
Receivables - (2.218.834) - (2.218.834) - (2.218.834)
Long-term Liabilities
Employee Benefi ts 2.927.831 291.102 - 3.218.933 3.218.933 -
Long-Τerm Loans (466.068) 197.193 - (268.875) - (268.875)
Other Long-Term Liabi l i ti es 3.012.947 (806.761) - 2.206.186 2.206.186 -
Unused Tax Losses 5.743.238 (2.483.076) - 3.260.162 3.260.162
Short-Term Liabilities
Employee Benefi ts 876.968 (422.422) - 454.546 454.546 -
Li abi l i ties From Derivatives - - 336.451 336.451 336.451 -
Other Short-Term Liabi l i ties 1.274.000 561.816 - 1.835.816 1.835.816 -
Total (25.406.358) (3.406.217) 336.451 (28.476.124) 12.067.798 (40.543.922)
Offsetting - - - - - -
Deferred Tax (Liability)/Receivables (25.406.358) (3.406.217) 336.451 (28.476.124) 12.067.798 (40.543.922)
(Amounts in €)At 1st
January
Recognised In
Profit Or Loss
Recognised In Other
Comprehensive Income
As At 31
December
Deferred Tax
Asset
Deferred Tax
Laibility
Non - Current Assets
Intangibl e Assets 491.295 21.636 - 512.930 512.930 -
Tangible Assets (31.688.185) (7.600.020) - (39.288.204) - (39.288.204)
Current Assets
Receivables - - - - - -
Long-term Liabilities
Employee Benefi ts 2.010.136 917.695 - 2.927.831 2.927.831 -
Long-Τerm Loans - (466.068) - (466.068) - (466.068)
Other Long-Term Liabi l i ti es 1.348.705 1.664.242 - 3.012.947 3.012.947 -
Unused Tax Losses 29.263.843 (23.520.605) 5.743.238 5.743.238
Short-Term Liabilities
Employee Benefi ts 652.626 224.343 - 876.968 876.968 -
Li abi l i ties From Derivatives - - - - - -
Other Short-Term Liabi l i ties - 1.274.000 - 1.274.000 1.274.000 -
Total 2.078.419 (27.484.777) - (25.406.358) 14.347.914 (39.754.272)
Offsetting - - - - - -
Deferred Tax (Liability)/Receivables 2.078.419 (27.484.777) - (25.406.358) 14.347.914 (39.754.272)
31/12/2013
ALUMINIUM OF GREECE
31/12/2014
ALUMINIUM OF GREECE
Annual Financial Report for the period from1st of January to 31st of December 2014 73
6.6 Other long-term assets
The Company’s long-term assets are analyzed as follows:
6.7 Inventories fair value
The Company’s inventories are analyzed as follows:
The amount of inventories that was recognized as an expense during the fiscal year and is included in
the cost of sales was € 187.852.950 (2013: € 145.860.418)
The company had no pledged inventories.
For establishing the net realizable sale value of inventories, management takes into account the most
reliable information available at the date of the valuation. The basic part of the business activity is not
subject to continuous technological changes that are likely to lead to obsolete inventories. The future
recovery of the accounting value of inventories is not affected by prices in other sectors.
(Amounts in €) 31/12/2014 31/12/2013
Given Guarantees 88.355 92.866
Other long term receivables 73.239 92.592
Other Long-term Receivables 161.594 185.458
ALUMINIUM OF GREECE
(Amounts in €) 31/12/2014 31/12/2013
Raw materials 12.277.284 14.107.490
Semi-finished products 572.031 660.305
Finished products 23.033.229 22.334.040
Work in Progress 29.310.302 32.005.768
Others 24.852.049 22.781.977
Total 90.044.896 91.889.581
(Less)Provisions for scrap,slow moving and/or
destroyed inventories: (1.302.510) (1.302.510)
Total Stock 88.742.386 90.587.071
ALUMINIUM OF GREECE
Annual Financial Report for the period from1st of January to 31st of December 2014 74
6.8 Customers and other trade receivables
The Company’s customers and other receivables are analyzed as follows:
The total amount of the above receivables is of short-term time horizon. The fair value of the short-term
financial assets is not determined independently since the accounting value is considered as close to fair
value. The company has no receivables in arrears for which it should make a provision for the case of
non collection. All receivables from commercial activity have been insured for the risk of non liquidation.
On 11/4/2014, LAGIE sent a credit note amounting to €8.5 million in total to ALUMINIUM OF GREECE, in
application of subparagraph ΙΓ.3 of Law 4254/2014. Specifically, this regulation provides that producers
of High-Efficiency CHP are obliged to issue a credit invoice by which they provide a 10% discount on the
total value of the energy that they dispatched to the system during 2013. Additionally, said regulation
characteristically states that until the relevant credit invoice is issued and delivered to LAGIE, the latter’s
obligation to pay the tariff for the amount of energy which dispatched but not paid for is suspended.
The special levy imposed by Law 4093/2012 was intended to consolidate the Special Account by way of
an intervention/’haircut’ for high guaranteed prices which applied to RES and (small) High-Efficiency CHP
stations during previous years and during the period of 2012-2014. However, during said time period,
CHP neither issued invoices nor was paid a tariff in accordance with the provisions of Law 4001/2011.
Instead, following the conclusion of the Private Agreement between the Company and LAGIE on
26.4.2013, CHP issued temporary invoices, for the aforementioned period in its entirety, at the minimum
tariff which could have resulted from the application of the mathematical formula established by Law
4001/2011 (if the CC value was set at the unit price, i.e. if the Mean Average Natural Gas Price
amounted to 26€/MWh). It must also be noted that except for ALUMINIUM OF GREECE High-Efficiency
CHP, almost all other H-E-CHP plants (agricultural & district heating) operating in Greece have already
been retrospectively exempted from the special 10% levy by way of the provisions of Laws 4203/2013
and 4123/2013.
(Amounts in €) 31/12/2014 31/12/2013
Customers 78.351.792 61.287.410
Checks receivable 300.587 377.805
Less:Impairment Provisions - -
Net trade Receivables 78.652.379 61.665.215
Advances to trade creditors 1.308.950 709.039
Total 79.961.329 62.374.254
ALUMINIUM OF GREECE
Annual Financial Report for the period from1st of January to 31st of December 2014 75
Furthermore, it is clear from both the letter and the rationale of the provision that if the total value of
the electricity dispatched by the Company’s HE-CHP is unknown or has not been determined because of
the absence of a fixed tariff (failure of the Minister of Environment, Energy and Climate Change to issue
the anticipated Ministerial Decision), the credit invoice cannot be issued in principle. It is noted that the -
de facto- compensation received ALUMINIUM OF GREECE for the electricity dispatched to the system
during the period of 28.11.2012-31.3.2014, which corresponded to the minimum price which could have
resulted from the application of the mathematical formula established by Law 4001/2011 (if the CC value
was set at the unit price, or, otherwise, if the Mean Average Natural Gas Price amounted to 26€/MWh),
cannot in any case be deemed to amount to a “tariff” which would allow for the determination of the
‘total value’ of the High-Efficiency CHP energy dispatched to the system. Therefore, the claim that a
credit invoice may be issued using a temporary price is illegal, since it is contrary to both the letter and
spirit of the law.
Accordingly, the Company has issued the relevant credit invoice to LAGIE, recording all of the
aforementioned reservations, so that LAGIE’s obligation to pay for the electricity that was both
dispatched to the system and invoiced is not suspended, which would unjustifiably burden the
Company’s liquidity, in violation of both the letter and the logic of the law. At the same time, the
Company has recorded said amount amongst its assets, given that, for the reasons mentioned above, it
considers it certain that the respective amount will be recovered in its totality.
6.9 Other receivables
The Company’s other receivables are analyzed as follows:
Company’s receivables from loans given to related parties, regard the loan to the related company
‘MYTILINEOS FINANCIAL PARTNERS’. The amount of interest charged for the period, amounted to €3.4
million.
(Amounts in €) 31/12/2014 31/12/2013
Other Debtors 2.476.365 1.947.661
Receivables from the State 24.863.568 18.585.308
Receivables from Subsidiaries 2.279.811 2.776.514
Loans given to Related Parties 62.855.976 74.255.976
Accrued income - Prepaid expenses 8.150.877 5.088.363
Prepaid expenses for construction contracts (899.053) (899.053)
Total 99.727.544 101.754.769
ALUMINIUM OF GREECE
Annual Financial Report for the period from1st of January to 31st of December 2014 76
6.10 Derivative financial instruments
Derivatives are classified as assets or liabilities. Provided that the maturity date of the derivatives is
within 12 months, the derivatives are recognized as current assets or short-term liabilities and in the
case that their maturity date is over twelve months, they are recognized as long-term assets or long-
term liabilities. The balances of derivatives as at 31/12/2014 are analyzed as follows:
All derivatives open positions have been mark to market. Fair values of the “interest rate swaps”, are
confirmed by the financial institutions that the Company has as counterparties.
The Company manages the exposure to currency risk through the use of currency forwards and options
and thus by “locking” at exchange rates that provide sufficient cash flows and profit margins.
Furthermore, the Company manages the exposure to commodity risk through the use of :
a)commodity futures that hedge the risk from the change at fair value of commodities and
b) commodity swaps that hedge fluctuations in cash flows.
The open positions on financial derivatives is going to be settled in 2015 and concluded new, based on
dynamic risk management strategy of the Company.
6.11 Cash and Cash Equivalents
The Company’s cash and cash equivalents include the following:
(Amount in €) 31/12/ 2014 31/12/ 2013
Foreign Exchange Forward for Cash Flow Hedging - -
Commodity Future - -
Foreign Exchange Forward - -
Derivative financial instruments (receivable) -
Foreign Exchange Forward for Cash Flow Hedging 403.673 507.988
Foreign Exchange Forward - -
Option Contract for Cash Flow Hedging 890.369 188.998
Commodity Future - -
Commodity Option Contract - -
Derivative financial instruments (liability) 1.294.042 696.986
ALUMINIUM OF GREECE
(Amounts in €) 31/12/2014 31/12/2013
Cash 6.734 11.298
Bank deposits 3.199.623 8.716.102
Time deposits & Repos - -
Total 3.206.357 8.727.400
The weighted average interest rate is as: 31/12/2014 31/12/2013
Deposits in Euro 1,61% 1,52%
ALUMINIUM OF GREECE
Annual Financial Report for the period from1st of January to 31st of December 2014 77
6.12 Own Equity
6.12.1 Share capital
As of January 1, 2007, the share capital of the company amounted to € 60.000. After the absorption of
the production, construction, alumina trade, aluminium, ore materials, metal and production and trade of
electricity branch of ALUMINIUM OF GREECE S.A. from ALUMINIUM S.A., the company proceeded in an
increase in share capital at the accounting value of the branch, as in € 294.786.074,51 and at the
amount of € 153.925,48 in cash. In total the increase in share capital amounted in € 294.940.000,00
with the issuance of 5.898.800 new common shares, with voting rights and face value 50 Euro.
On 15 November the Extraordinary General Meeting of "ALUMINIUM S.A." resolved to the decrease of its
share capital by an amount of 50.150.000 € and the equall return to the shareholders in cash, according
to art. 4 par. 4 of L. 2190/1920. The decrease will be effected by a decrease of the company's 5.900.000
shares nominal value by 8,50 € per share. Following the above, the share capital of "ALUMINIUM S.A."
amount to 244.850.000 €, divided in 5.900.000 shares at a nominal value of 41,50 € each.
In September, the Extraordinary General Meeting of ALUMINIUM SA resolved to the decrease of its
share capital by € 30,09m and to the equivalent return of cash to the shareholders. The decrease was
realised by a decrease of the nominal value of its 5.900.000 shares by 5,10€ per share. Therefore, the
shareholder will receive for each one (1) share held by the amount of 5,10 €. After this reduction, the
share capital of the Company will amount to 214.760.000 €, divided into 5,900,000 registered shares
with a nominal value of each 36, 40 €. The reduction of the share capital approved by the District on
September 27,2011.
On 31st December 2013 the share capital of the company amounts € 214.760.000.
Annual Financial Report for the period from1st of January to 31st of December 2014 78
6.12.2 Other reserves
The Company’s other reserves are analyzed as follows:
Under Greek corporate law, corporations are required to transfer a minimum of 5% of their annual net
profit as reflected in their statutory books to a legal reserve, until such reserve equals one-third of the
outstanding share capital. The above reserve cannot be distributed throughout the life of the company.
Tax free reserves represent non distributed profits that are exempt from income tax based on special
provisions of development laws (under the condition that adequate profits exist for their allowance).
These reserves mainly relate to investments and are not distributed.
Specially taxed reserves represent interest income and income from disposal of listed in the Stock
Exchange and non-listed companies and tax free or tax has been withheld at source. Except for any tax
prepayments, these reserves are exempted from taxes, provided they are not distributed to
shareholders.
6.12.3 Fair value reserves
The Company’s fair value reserves are analyzed as follows:
(Amounts in €)
Regular
Reserve
Special &
Extraordinary
Reserves
Tax-free
and Specially
taxed Reserves
Stock Option
Plan Reserve
Actuarial
Gain/Losses
Reserve
Total
Opening Balance 1st January 2013,
according to IFRS (as published) 1.537.933 35.632.600 22.337.227 317.298 4.059.167 63.884.225
Actuaria l Ga in / (Loss es) - - - - (6.091.401) (6.091.401)
Closing Balance 31/12/2013 1.537.933 35.632.600 22.337.227 317.298 (2.032.234) 57.792.824
(Amounts in €)
Regular
Reserve
Special &
Extraordinary
Reserves
Tax-free
and Specially
taxed Reserves
Stock Option
Plan Reserve
Actuarial
Gain/Losses
Reserve
Total
Opening Balance 1st January 2014,
according to IFRS (as published) 1.537.933 35.632.600 22.337.227 317.298 (2.032.234) 57.792.824
Actuaria l Ga in / (Loss es) - - - - (2.180.330) (2.180.330)
Closing Balance 31/12/2014 1.537.933 35.632.600 22.337.227 317.298 (4.212.564) 55.612.495
ALUMINIUM OF GREECE
ALUMINIUM OF GREECE
Fixed Assets
Reassessment
Reserves
Compensation
Financial
Instruments Total
Adjusted Balance 31st December 2013, according to IFRS - (696.986) - (696.986)
Gains / (Losses) of valuation transfered to Equity - (2.183.896) - (2.183.896)
Gains / (Losses) transfered to Financial Results throuhg the sales - 1.586.840 - 1.586.840
Defeared Tax - 336.451 - 336.451
Closing Balance 31st December 2014, according to IFRS - (957.591) - (957.591)
ALUMINIUM OF GREECE
Annual Financial Report for the period from1st of January to 31st of December 2014 79
6.13 Benefits for employment termination
The amounts that are recognized in the balance sheet and the income statement concern defined
benefit plans and pension plan are as follows:
The current part of these liabilities represents liabilities of ALUMINIUM OF GREECE to current employees
which are expected to be settled during 2014. These liabilities come mainly from pensions at the
balance sheet date. Since no employee has the right to an earlier settlement of the pension adjustment,
the remaining of the pension liabilities is considered as long-term.
ALUMINIUM OF GREECE has established a pension plan given to employees and according to which a
certain percentage of their current salary is converted into pension each year. Pensions that fall into this
plan are paid when the beneficiary reach pension age.
From 1 January 2013 the calculation of benefits in accordance with applicable law, that does not exceed
the applicable percentage of the full severance allowance and the current limits of regular monthly
salary. Guaranteed but the accumulated rights corresponding to year of service up to 31 December 2012
and are a result of a more favorable method of calculating the statutory rights as it was.
The amounts that are recognized in the balance sheet are as follows:
The program’s assets that are retained for funding the program do not include own shares of
ALUMINIUM OF GREECE or any other asset that is used by the Group. The real performance of the
program’s assets in 2014 was 283.804 (2013: 584.410).
The amounts that are recognized in the income statement are as follows:
2014 2013
Long-Term Liabi l i ties for pens ion obl igations 14.686.187 14.196.138
Short-term pens ion obl igations - -
Total 14.686.187 14.196.138
Non-funded
Pension Schemes
Defined
Benefit Plans Total
Non-funded
Pension Schemes
Defined
Benefit Plans Total
Present value of Defined Benefi t Plans - 7.495.185 7.495.185 - 8.151.149 8.151.149
Less : Fa ir va lue of pla n assets - (5.189.509) (5.189.509) - (5.215.899) (5.215.899)
Total - 2.305.676 2.305.676 - 2.935.250 2.935.250
Present value of Defined Contributions Plans 12.380.511 - 12.380.511 11.260.887 - 11.260.887
Total 12.380.511 - 12.380.511 11.260.887 - 11.260.887
Net retirement obligation 12.380.511 2.305.676 14.686.187 11.260.887 2.935.250 14.196.137
2014 2013
Annual Financial Report for the period from1st of January to 31st of December 2014 80
The amounts of actuarial gains / losses recognized in other comprehensive income are as follows:
Changes in the current value of a liability for predetermined benefits programs are as follows:
Change in the fair value of the assets of the program during year is as follows:
Non-funded
Pension Schemes
Defined
Benefit Plans Total
Non-funded
Pension Schemes
Defined
Benefit Plans Total
Current employment cost 133.903 - 133.903 246.554 - 246.554
Fina ncia l cos t 394.131 285.290 679.421 472.382 259.295 731.677
Expected return of plan a ssets - 182.556 182.556 - 205.090 205.090
Actuaria l ga ins on pla n assets 460.025 560.818 1.020.843 - - -
Amount included in employees' benefits 988.059 663.552 1.651.611 718.936 54.205 773.141
Expected return of plan a ssets - 182.556 182.556 - 205.090 205.090
Actuaria l ga ins on pla n assets - 101.248 101.248 - 343.320 343.320
Return of plan assets - 283.804 283.804 - 548.410 548.410
2014 2013
Non-funded
Pension Schemes
Defined
Benefit Plans Total
Non-funded
Pension Schemes
Defined
Benefit Plans Total
Opening Balance (1.206.335) (825.899) (2.032.234) 1.607.303 2.451.863 4.059.167
Net a ctua ria ly (profi ts )/ losses real i sed for the
period (1.853.456) (326.874) (2.180.330) (2.813.638) (3.277.763) (6.091.401)
Cumulative amount recognized in OCI (3.059.791) (1.152.773) (4.212.564) (1.206.335) (825.899) (2.032.234)
2014 2013
Non-funded
Pension Schemes
Defined
Benefit Plans Total
Non-funded
Pension Schemes
Defined
Benefit Plans Total
Balance at beginning of year 11.260.887 8.151.149 19.412.036 10.050.680 5.516.908 15.567.588
Employment Cost 133.903 - 133.903 246.554 - 246.554
Interest Cost 394.131 285.290 679.421 472.382 259.295 731.677
Settlement Cost 460.025 560.818 1.020.843 - - -
Actuaria l Gains/Losses 1.853.456 428.122 2.281.578 2.813.638 3.621.082 6.434.721
Gra nts Payable 1.721.891 1.930.194 3.652.085 2.322.367 1.246.136 3.568.503
Total Retirement Obligation 12.380.511 7.495.185 19.875.696 11.260.887 8.151.149 19.412.036
2014 2013
2014 2013
Defined
Benefit Plans
Defined
Benefit Plans
Balance at beginning of year 5.215.899 4.363.625
Anticipated return on as s ets 182.556 205.090
Actuaria ly (profi ts )/ los ses 101.248 343.320
Employer contributions 1.620.000 1.550.000
Contributions pa id 1.930.194 1.246.136
Balance at closing of year 5.189.509 5.215.899
Annual Financial Report for the period from1st of January to 31st of December 2014 81
For determining the pension liability, the following proportional principles were used:
The contributions that are expected to be paid for the program in the fiscal year 2015 amounts to €1.8
million.
Employment Cost
6.14 Loan liabilities
The financial liabilities of the company are analyzed in the following table:
In November 2013 ALUMINIUM OF GREECE issued syndicated loan of € 145 million, which was held by
restructuring existing debt. The loan term is 3 years, extendable for another 2 years, 5 years in total.
2014 2013
Discount rate 2,50% 3,50%
Inflation 1,50% 1,50%
Expected rate of pens ion increases 0,00% 0,00%
(Amounts in €) 31/12/2014 31/12/2013
Wages & Salaries 29.776.787 30.455.817
Employeer Contributions 8.378.410 9.042.286
Amount included in employees' benefits 1.651.611 773.141
Total Personnel Costs 39.806.808 40.271.243
ALUMINIUM OF GREECE
(Amounts in €) 31/12/2014 31/12/2013
Long-term debt
Bonds 111.790.367 131.897.431
Total 111.790.367 131.897.431
Short-term debt
Overdraft 48.128.071 31.865.073
Total 48.128.071 31.865.073
Current portion of non-current liabilities 20.865.500 5.655.000
Total 180.783.938 169.417.503
ALUMINIUM OF GREECE
Annual Financial Report for the period from1st of January to 31st of December 2014 82
6.15 Other long-term liabilities
Other long term liabilities are analyzed as follows:
The amounts which appeared in category “Others” concern energy product supplier‘s liabilities. These
amounts will be settled after the end of 2015.
6.16 Provisions
Provisions referring to Company are recognized if the following are met legal or implied liabilities exist as
a consequence of past events, there is a possibility of settlement that will require the outflow if
economic benefits and the amount of the liability can be measured reliably. Contingent receivables are
not recognized in the financial statements but are disclosed if there is a possibility of an inflow of
economic benefits.
Following is stated analysis of the Company’s provisions on 31/12/2014 and 31/12/2013:
(Amounts in €) 31/12/2014 31/12/2013
Grants
Total Opening 31.084.121 26.062.810
Additions - 7.024.872
Transfer At Profits/Loss - -
Transfer From / (To) Short - Term (1.050.895) -
Depreciation For The Period (1.885.883) (2.003.561)
Closing Balance 28.147.343 31.084.121
Other
Total Opening 48.557.332 -
Transfer From / (To) Short - Term (48.557.332) 48.557.332
Closing Balance - 48.557.332
Total 28.147.343 79.641.453
ALUMINIUM OF GREECE
(Amounts in €)
Environmental
RestorationTax liabilities
Electrolisis Pots
ReliningOther Total
01/01/2013 1.000.000 250.000 14.967.379 2.655.096 18.872.475
Additions From Acquisition/Consolidation Of Subsidiaries - - - - -
Sale Of Subsidiary - - - - -
Additional Provisions For The Period - - 1.862.000 - 1.862.000
Unrealised Reversed Provisions (1.000.000) - - (1.283.671) (2.283.671)
Realised Provisions For The Period - - (2.977.354) - (2.977.354)
31/12/2013 - 250.000 13.852.025 1.371.425 15.473.450
Long -Term - 250.000 13.852.025 1.371.425 15.473.450
Short - Term - - - -
Additions From Acquisition/Consolidation Of Subsidiaries - - - - -
Sale Of Subsidiary - - - - -
Additional Provisions For The Period - - 1.261.759 0 1.261.759
Unrealised Reversed Provisions - - - (1.200.000) (1.200.000)
Exchange Rate Differences - - - - -
Realised Provisions For The Period - - (2.884.185) 0 (2.884.185)
31/12/2014 - 250.000 12.229.599 171.425 12.651.024
Long -Term - 250.000 12.229.599 171.425 12.651.024
Short - Term - - - -
ALUMINIUM OF GREECE
Annual Financial Report for the period from1st of January to 31st of December 2014 83
Environmental Restoration. This provision represents the present value of the estimated costs to
reclaim quarry sites and other similar post-closure obligations.
Tax Liabilities. This provision relates to future obligations that may result from tax audits. This
provision is expected to be in used in the next 3 years.
Electrolysis pots relining. This provision relates to future costs for Electrolysis pots relining. The
provisions for Electrolysis pots relining are expected to be in used in the next 9 years.
Other provisions. Comprise other provisions relating to other risks none of which are individually
material to the Company and to contingent liabilities arising from current commitments.
6.17 Suppliers and other trade liabilities
With the exception of liabilities from financial leases all other liabilities are considered as short-term. The
fair values of trade and other liabilities are not shown separately because of their short-term liabilities,
management considers that their accounting values that are recognized in the balance sheet constitute a
reasonable approach of their fair value. The analysis of trade and other liabilities are shown in the table
below:
6.18 Current tax liabilities
Current tax liabilities of the company are analyzed as follows:
(Amounts in €) 31/12/2014 31/12/2013
Suppliers 137.473.349 132.087.748
Customers' Advances 16.370.196 10.654.674
Total 153.843.546 142.742.422
ALUMINIUM OF GREECE
(Amounts in €) 31/12/2014 31/12/2013
Tax l iabil ities 5.025.299 1.806.668
Total 5.025.299 1.806.668
ALUMINIUM OF GREECE
Annual Financial Report for the period from1st of January to 31st of December 2014 84
6.19 Other short-term liabilities
Other short-term liabilities are analyzed as follows:
6.20 Cost of goods sold
Expenses analysis of the company is analyzed as follows:
(Amounts in €) 31/12/2014 31/12/2013
Liabil ities to Related Parties 125.000 1.086.874
Accrued expense 5.129.629 4.690.477
Social security insurance 1.958.951 2.172.380
Deferred income-Grants 1.050.895 -
Others Liabil ities 8.461.190 6.263.627
Total 16.725.665 14.213.359
ALUMINIUM OF GREECE
(Amounts in €) 31/12/2014 31/12/2013
Retirement benefits 73.883 764.945
Other employee benefits 37.358.767 38.379.501
Cost of materials & inventories 187.852.950 145.860.419
Third party expenses 20.713.337 8.602.554
Third party benefits 132.655.268 200.682.205
Operating leases rent 1.261.175 1.669.274
Taxes & Duties 6.073.389 1.016.503
Advertisement 358.406 198.155
Other expenses 4.459.134 8.770.419
Depreciation - Tangible Assets 27.026.028 28.029.286
Depreciation - Intangible Assets 39.342 45.679
Grants amortization incorporated to cost (1.885.883) (2.003.561)
Total 415.985.797 432.015.380
ALUMINIUM OF GREECE
Annual Financial Report for the period from1st of January to 31st of December 2014 85
6.21 Administrative & Distribution Expenses
6.22 Other Operating Income – Expenses
No impairment loss was recognized in financial assets for the periods presented.
(Amounts in €) 31/12/2014 31/12/2013
Distribution expenses
Other emploee benefits 502.145 535.320
Third party expenses 152.306 258.355
Third party benefits 26.030 32.268
Taxes & Duties 2.688 4.246
Other expenses 208.785 243.157
Depreciation - Intangible Assets 12.301 11.587
Total 904.255 1.084.934
ALUMINIUM OF GREECE
(Amounts in €) 31/12/2014 31/12/2013
Administrative expenses
Other emploee benefits 724.534 1.118.702
Third party expenses 5.938.418 5.902.728
Third party benefits 821.437 882.213
Taxes & Duties 58.899 22.357
Other expenses 1.304.821 1.031.541
Depreciation - Tangible Assets 2.864.535 1.059.683
Total 11.712.643 10.017.225
ALUMINIUM OF GREECE
(Amounts in €) 31/12/2014 31/12/2013
Other operating income
Income from Subsidies 140.994 181.813
Compensations 35.071 (21.953.918)
Profit from foreign exchange differences 11.937.376 7.407.137
Rent income 672.821 681.136
Income from reversal of unrealized provisions 1.702.157 2.519.856
Profit from sale of fixed assets - 50
Other 5.168.899 51.253.279
Total 19.657.318 40.089.354
Other operating expenses
Losses from foreign exchange differences 16.444.604 15.158.677
Operating expenses from services 185.029 913.880
Other taxes 47.307 69.117
Total 16.676.940 16.141.674
ALUMINIUM OF GREECE
Annual Financial Report for the period from1st of January to 31st of December 2014 86
Variations in exchange rates for the years 2014 and 2013 and their consequences are analyzed in the
Annual report of the Board of Directors as well as in note 4 about risk management.
The Company went forward to the reversal of the depreciation’s provision inventory amounting to €
502.157,23 due to the increase in the net realizable value of sale of alumina and aluminium products in
the year 2014.
6.23 Financial revenues and expenses
Financial expenses include any revenue or expense in relation to interest, apart from interest from
financial assets recorded in fair value in the income statement. The following amounts are included in
the income statement and are analyzed as follows:
6.24 Other Financial results
6.25 Earnings/ (losses) per share
Basic earnings per share are calculated by the weighted average number of ordinary shares in issue
during the year.
(Amounts in €) 31/12/2014 31/12/2013
Financial income
Bank deposits 14.846 42.596
Customers 2.947.119 1.085.378
Loans to related parties 3.424.360 2.918.579
Other 92.021 158.851
Total 6.478.346 4.205.405
Financial expenses
Bank Loans 10.561.920 12.079.564
Loans to related parties 7.794 315.313
Letter of Credit commissions 698.643 666.434
Factoring 3.110.311 2.501.240
Other Banking Expenses 7.576.635 10.047.900
Total 21.955.302 25.610.451
ALUMINIUM OF GREECE
(Amounts in €) 31/12/2014 31/12/2013
Other financial results
Profit / (loss) from fair value of other
financial instrument through profit/los (2.209.999) -
Total (2.209.999) -
ALUMINIUM OF GREECE
Annual Financial Report for the period from1st of January to 31st of December 2014 87
6.26 Income Tax
The amount of tax on profit before tax of the company differs from the theoretical amount that would
arise using the tax rate applied in the profit of the consolidated companies. The relationship between
the expected tax expense, based on the true company tax rate, and the tax expense that was actually
recognized in the income statement, is the following:
Starting with the year 2011 and in accordance with paragraph 5 of Article 82 of Law 2238/1994, the
companies whose financial statements are audited by mandatory statutory auditor or audit firm, under
the provisions of Law 2190/1920, are subject to a tax audit by statutory auditors or audit firms and
receives annual Tax Compliance Certificate. In order to consider that the fiscal year was inspected by the
tax authorities, must be applied as specified in paragraph 1a of Article 6 of POL 1159/2011.
For the fiscal years 2012 and 2013, the Company which was subject to tax audit by statutory auditors or
audit firm, under paragraph 5 Article 82 of Law 2238/1994, received a Tax Compliance Certificate free of
disputes.
For fiscal year 2014, the tax audit which is being carried out by the auditors is not expected to result in a
significant variation in tax liabilities incorporated in the financial statements.
(Amount in €) 1/1-31/12/2014 1/1-31/12/2013
Profit/(Loss) attributable to shareholders of the
parent 14.966.150 (40.987.489)
Weighted average shares 5.900.000 5.900.000
Basic earnings per share 2,5366 (6,9470)
Diluted Earnings per Share 2,5366 (6,9470)
ALUMINIUM OF GREECE
(Amount in €) 31/12/2014 31/12/2013
Income Tax - 1.141.136
Deferred taxation 3.406.217 27.484.777
Other Taxes 885.716 -
Total 4.291.933 28.625.913
Earnings before tax 19.258.083 (12.361.576)
Nominal Tax rate 26% 26%
Tax calculated at the statutory tax rate of 26% 5.007.102 (3.214.010)
Non taxable income (442.561) -
Non tax deductible expenses - 3.214.010
Income tax from land - plot & buildings 885.716 1.141.136
Other (1.158.324) 27.484.777
Effective Tax Charge 4.291.933 28.625.913
ALUMINIUM OF GREECE
Annual Financial Report for the period from1st of January to 31st of December 2014 88
Finally, the Finance Ministry carry out the tax audit for the fiscal years 2011, 2012 as concern the
emphasize issues that was framed by the auditors during the auditing of these fiscal years.
6.27 Cash Flows from operating activities
6.28 Related Party transactions
In context of operational activity, materials, inventories and services originate from a number of related
parties of the company. The transactions with these companies take place on purely trade basis,
whereas no business transactions take place. ALUMINIUM OF GREECE did not participate in any
transaction of unusual nature or content which is significant for the Company it participates, or for
companies and the people closely related to it, and does not intend to participate in any kind of similar
transactions in the future.
Related party transactions according to IAS 24 are shown in the table below:
(Amounts in €) 1/1-31/12/2014 1/1-31/12/2013
Profit for the period 14.966.150 (40.987.489)
Adjustments for:
Tax 4.291.933 28.625.913
Depreciation of property,plant and equipment 29.890.562 27.085.408
Depreciation of intangible assets 51.644 57.266
Impairments 1.969.612 -
Provisions (2.822.426) (5.261.025)
Profit/Loss from sale of tangible assets - (50)
Profit/Loss from fair value valuation of financ.assets at fair value through PnL 2.209.999 -
Interest income (6.478.346) (4.205.405)
Interest expenses 21.955.302 25.610.451
Grants amortization (1.885.883) -
Total 49.182.398 71.912.558
Changes in Working Capital
(Increase)/Decrease in stocks 1.844.685 15.344.879
(Increase)/Decrease in trade receivables (9.223.618) (6.991.652)
Increase / (Decrease) in l iabil ities (37.807.731) (2.335.431)
Pension plans (1.690.280) (3.099.226)
Total (46.876.945) 2.918.569
Cash flows from operating activities 17.271.603 33.843.639
ALUMINIUM OF GREECE
Annual Financial Report for the period from1st of January to 31st of December 2014 89
Annual Financial Report for the period from1st of January to 31st of December 2014 90
Transactions with management
Benefits to management are analyzed as follows:
BOD fees include yearly wages as well as bonus related to the achievement of certain goals .No loans
have been given to members of the Board of Directors or other management members of the Company
(and their families).
6.29 Dividend
On 30 October 2014 the Extraordinary General Meeting of Shareholders decides to approve the payment
of dividend to the Shareholder Company with the amount of 1.475.000,00 € or 0,25 € / stock from the
part distribution of specially taxed reserve, from revaluation’s differences based on N.3229/04, which is
depicted into a) the Company’s books of taxation, the balance sheet accounts “revaluation’s differences
– Investment Grants” and b) the Company’s books, the balance sheet accounts “Retained Earnings”.
This particular decision is going to be confirmed during the next Regular General Meeting of
Shareholders where will be approved the Financial Statements of 2014. The Board of Directors proposal
to the General Meeting of Shareholders will be the distribution of dividend to the Shareholder Company
with the amount of 1.475.000,00 € or 0,25 € / stock.
6.30 Number of employees
(Amounts in €) 31/12/2014 31/12/2013
Short term employee benefits
- Wages and Salaries and BOD Fees 4.957.856 4.810.227
- Insurance service cost 182.414 196.280
Total 5.140.269 5.006.507
Pension Benefits:
- Defined contribution scheme 3.647 3.647
Total 5.143.916 5.010.154
ALUMINIUM OF GREECE
31/12/2014 31/12/2013
Full time employees 943 942
Total 943 942
ALUMINIUM OF GREECE
Annual Financial Report for the period from1st of January to 31st of December 2014 91
6.31 Contingent assets and contingent liabilities
Note on Independent Power Transmission Operator S.A. (ADMIE)
On 17.12.2014, Independent Power Transmission Operator S.A. (IPTO or ADMIE) sent briefing notes to
ALUMINIUM OF GREECE (henceforth the “Company”), requesting the issuance of a credit invoice for the
amount of €17.4 million relating to the Excise Tax (ET) on Gas consumed at the Combined Heat and
Power (CHP) Plant for the period of 28/11/2012 until 31/10/2013 (henceforth the “Period”). Said ET was
invoiced to ADMIE during the aforementioned period, pursuant to its related debit notes.
In relation to the above, we note the following:
- The CHP station is a dispatchable cogeneration unit, part of which qualifies as highly efficient (High-
Efficiency Combined Heat and Power/ HE-CHP) under the Code’s provisions, but also under the specific
operational terms which were approved by way of RAE’s Decision No. 700/2012 (as amended by
Decision 341/2013).
- According to Article 197(2) of Law 4001/2011, from 1/9/2011 onwards, all HE-CHP stations, regardless
of their installed capacity, gain priority for the allocation of their loads. In particular, in accordance with
Article 197(3) of the above Law, HE-CHP stations with an installed capacity over 35MW are to be
compensated with the tariff which derives from the table displayed in Law 3468/2006, plus the Natural
Gas Clause Coefficient (CC), which is calculated using the following formula: CC = 1+(AGP-26)/(100 x
nel)
Where:
o AGP: the monthly mean average unitary selling price of natural gas to NG users in
Greece who are also electricity customers, in €/MWh using the gross calorific value
(GCV). This value is determined by the Ministry of Environment, Energy and Climate
Change’s Petroleum Policy Directorate and is communicated to Hellenic Transmission
System Operator S.A. (HTSO or DESMIE) on a monthly basis.
� nel: the electrical efficiency of the provision for High-Efficiency CHP based on
the gross calorific value (GCV) of natural gas, which is defined in accordance
with the station’s technical information, as reported by the relevant Operator.
The CC value cannot be lower than one (1) and is determined on a case-by-case basis by way of a
decision made by the Minister of Environment, Energy and Climate Change (henceforth the “Ministerial
Decision”) following consultation by RAE. RAE’s opinion must also take the plant’s installed capacity into
account, in a way so that the determined value generally decreases as the capacity increases.
Moreover, the AGP is displayed in €/MWh and includes the ET, as specified in the letter sent by the
Ministry of Environment, Energy and Climate Change’s Petroleum Policy Directorate on 2/11/2011.
The High-Efficiency CHP station owned by the Company has an installed capacity of 334MW, of which
134.6MW has priority in entering the system (HE-CHP) in accordance with the aforementioned decisions
Annual Financial Report for the period from1st of January to 31st of December 2014 92
which approved the Specific Operational Terms. From 1/9/2011 until 31/10/2013 (which ADMIE set as
the final date for settling the ET), the CC value, as defined above, had not been established because the
relevant decision had not been issued by the Minister of Environment, Energy and Climate Change,
despite the fact that the Regulatory Authority for Energy had issued two relevant opinions in accordance
with the provisions of Article 197(2) of Law 4001/2011 (RAE 3/2012 and RAE 5/2013). Consequently, the
Company’s HE-CHP neither issued invoices nor received a tariff in accordance with the provisions of Law
4001/2011. Instead, following the signing of a Private Agreement between the Company and the
Operator of Electricity Market (LAGIE) on 26.4.2013, HE-CHP issued temporary invoices, for the entire
aforementioned period, at the minimum price which could have resulted from the application of the
mathematical formula established by Law 4001/2011 (if the CC value was set at the unit price, i.e., if the
AGP amounted to 26€/MWh). According to the Private Agreement, the final settlement was to take place
following the establishment of the CC by way of the issuance of the relevant Ministerial Decision, so that
dispatched HE-CHP energy would be compensated in accordance with the provisions of the
"Supplementary Agreement for Transactions relating to Electricity from the Dispatchable High-Efficiency
CHP Station” (Government Gazette B’ 3108/23.11.2012) which was concluded between the Company
and LAGIE on 28.11.2012.
The aforementioned provisions of Law 4001/2011, in conjunction with the provisions specified in the
letter sent by the Ministry of Environment, Energy and Climate Change’s Petroleum Policy Directorate, as
well as the provisions of both the Company’s Private Agreement with LAGIE and the “Supplementary
Agreement for Transactions relating to Electricity from the Dispatchable High-Efficiency CHP Station”
between the two parties, require that the Natural Gas ET is recovered to the extent that the natural gas
was consumed in generating electricity. Therefore, the Subsidiary also recognized the part of the Natural
Gas ET which corresponded to consumptions made in generating useful heat (steam for the Alumina
production process) as a liability (deducted from ADMIE’s receivables balance), the total value of which
amounted to €9.1 million.
Regarding the remaining balance of ADMIE’s relevant briefing note, which amounts to €8.3 million and
relates to the Natural Gas ET which corresponded to consumptions for electricity generation (HE- CHP),
it is noted that this does not constitute a liability for the Company. Specifically, in accordance with IAS
37, “a liability is a present obligation of the entity arising from past events, the settlement of which is
expected to result in an outflow from the entity of resources embodying economic benefits”. Based on
the above and given that the Company has not received a final compensatory price for the Period (by
way of the CC, see above), while, based on the Private Agreement between the Company and LAGIE,
the final settlement will take place following the issuance of the relevant Ministerial Decision regarding
the establishment of the CC (which has not been issued), the Company believes that it has no
commitment which would legally constitute an obligation to return the amount of €8.3 million. A relevant
Annual Financial Report for the period from1st of January to 31st of December 2014 93
liability may arise once the aforementioned Ministerial Decision regarding the establishment of the CC is
issued, in which case the Company estimates that the final compensation that it will receive for
electricity dispatched to the system as High-Efficiency CHP will exceed the amount of €8.3 million.
Therefore, it is not expected that a loss will result for the Company.
Power purchase agreement between ALUMINIUM OF GREECE and PPC
Following arbitral decision no. ∆1/1/2013, which was issued by RAE’s Permanent Court of Arbitration on
31.10.2013 and which defined the fair, reasonable and worthy price for the electricity supplied by PPC to
ALUMINIUM OF GREECE (henceforth the “Company”) during the period of time between 1-7-2010 and
31-12-2013, the two parties have not signed a power purchase agreement for the period between
1/1/2014 and the date on which the financial statements for the year 2014 were
published.
On 7/1/2014, PPC’s Board of Directors requested the convening of an Extraordinary General Meeting,
the main topic of discussion of which concerned the terms by which the Company would be charged
from 1/1/2014 onwards. PPC’s Extraordinary General Meeting eventually convened on 28/2/2014 and
decided the following:
a) The provision of an exceptional discount of 10% on PPC’s approved tariffs for High Voltage
customers, for 1 + 1 year, from 1.1.2014 onwards.
b) A further 10% discount on top of the aforementioned discount for High Voltage customers with an
annual consumption over 1000 GWH.
c) A further 25% discount on the A4 tariff for all High Voltage customers, apart from those with an
annual consumption over than 1000 GWH, for consumption during off-peak hours of minimum demand
(nighttime and weekends), as an incentive for increasing consumption during these time periods.
The Company considers that the content of the decision taken during PPC’s Extraordinary General
Meeting, under a, b and c above, merely constitutes an offer of pricing terms on behalf of PPC, towards
their large industrial customers. In this respect, the Company has engaged in discussions with PPC in
good faith, expressing both its opinions and its reservations in relation to the terms and content of the
power purchase agreement under negotiation. In particular, the aforementioned decision of the
Extraordinary General Meeting of PPC's shareholders has been considered taking into account relevant
developments in general. Among other things, said developments relate to the rejection of all the judicial
and administrative proceedings instituted by PPC against the Arbitral Award and RAE’s Decision no.
346/2012 (the decision which determined a temporary price to be applied until RAE’s Permanent Court
of Arbitration’s final adjudication) before both the Administrative Court of Appeal of Athens and the
European Commission's Directorate-General for Competition, a fact which confirms and updates the
fairness and reasonableness of the price at which the Court of Arbitration concluded.
Annual Financial Report for the period from1st of January to 31st of December 2014 94
Consequently, given that as of the date of approval of ALUMINIUM OF GREECE’s annual financial
statements for the year 2014, the two parties have not yet reached an agreement in relation to the basic
terms for charging electricity supplied by PPC to the Company, the latter has announced in the results
for the period in question that the competitive component of the electricity price amounts to the value
which has most recently been held to be fair and reasonable (by RAE’s Permanent Court of Arbitration),
plus the Use of System charge, the SGI charge, the Special RES Duty charge and
charges relating to the relevant Special Consumption Tax, Execution of Customs Operations (∆ΕΤΕ) and
provisions for non-recoverable (by way of the compensation mechanism) carbon dioxide (CO2)
emissions costs. The aforementioned price, as announced by the Company in its results for the year
2014, does not differ substantially from the value deriving from the decision of PPC’s Extraordinary
General Meeting, as this has been interpreted/applied by the Subsidiary during negotiations between the
parties.
However, it is noted that during 2014, PPC, acting arbitrarily and unilaterally, invoiced the Company
based on the “A5” tariff, without incorporating the discount decided in the General Meeting, noting that
the discount would only apply retrospectively if the Subsidiary Company accepted and signed PPC’s
terms. Finally, on the 12th and 13th of January 2015, without the Company’s acceptance of the
aforementioned terms, PPC issued credit notes as a result of the re-pricing of electricity for the year
2014, stating that said re-pricing was in accordance with the decision of its General Meeting on
28/2/2014.
The Company contests the way in which PPC’s Management has interpreted and applied the General
Meeting’s decision of 28/2/2014 in relation to the issuance of the aforementioned credit tariffs, stressing
that in no case have they ever reached an agreement with PPC either on the basis of the General
Meeting resolution, or on any other basis, given that decisions taken by a Company’s General Assembly
are only binding to the company issuing the General Assembly resolution and do not bind other
contracting parties.
For the year 2014, the difference between the amount announced in the Company’s results as the cost
for electricity consumption and the amount that it would have announced on the basis of the tariffs
which PPC unilaterally and arbitrarily formed, amounts to €20.6 million. Similarly, the difference between
the amount announced in the Company’s results as the cost for electricity consumption and the amount
that it would have announced in implementation of PPC’s Extraordinary General Meeting resolution, as
this has been interpreted by the Company during negotiations between the parties, amounts to €4.3
million.
However, it is noted that the two parties have not yet, as of the date of approval of the Company’s
Financial Statements, reached an agreement. Therefore, none of the above differences constitute
contingent liabilities, nor can they be considered as such, because contingent claims and contingent
Annual Financial Report for the period from1st of January to 31st of December 2014 95
liabilities which cannot be accurately estimated at this stage may arise for the Company, as a result of
the finalization of negotiations between the two parties, or following new legal or arbitration procedures,
or procedures before another competent authority.
6.32 Commitments
6.32.1 Operating lease deposit – the company as a lessor
The company leases offices and land in various related parties.
6.32.2 Operating lease deposit – the company as a lessee
The expense amount of the lease that was recorded in the income statement for the current fiscal year
amounts to € 79.433,10. The future lease payments based on the non-reversible financial leases on the
31st December 2013 is analyzed as follows:
6.32.3 Warranties
Warranties of ALUMINIUM OF GREECE:
ALUMINIUM OF GREECE also received the following warranties:
(Amounts in €) 31/12/2014 31/12/2013
Until 1 year 192.970 70.000
1 to 5 years 771.880 220.000
> 5 years - -
Total Operating Lease 964.850 290.000
ALUMINIUM OF GREECE
31/12/2014 31/12/2013
Guarantees given on government grants relating to tangible
fixed assets 0 0
Other guarantees (letters of credit) 30.524.210 23.488.040
Total 30.524.210 23.488.040
31/12/2014 31/12/2013
Customer Warranties 8.545.000 10.095.000
Other guarantees (letters of credit) 9.110.599 8.743.585
Total 17.655.599 18.838.585
Annual Financial Report for the period from1st of January to 31st of December 2014 96
6.33 Financial Instruments
Company‘s Financial Instruments are analyzed as follows:
6.34 Tax Authorities Control
For the fiscal year 2012 and 2013, the Company which was subject to tax audit by statutory auditors or
audit firm, under paragraph 5 Article 82 of Law 2238/1994, received a Tax Compliance Certificate free of
disputes.
For fiscal year 2014, the tax audit which is being carried out by the auditors is not expected to result in a
significant variation in tax liabilities incorporated in the financial statements.
Finally, the Finance Ministry carry out the tax audit for the fiscal years 2011, 2012 as concern the
emphasize issues that was framed by the auditors during the auditing of these fiscal years.
The Company’s management considers that apart from the recorded provisions which are amounted on
€ 0.3 million during 2014, additional taxes which may incur, will not have a material impact on the
Financial Position Results and Company’s cash flows.
(Amount in €) 31/12/2014 31/12/2013
Non current assets
Other Long-term Receivables 161.594 185.458
Total 161.594 185.458
Current assets
Trade and other receivables 171.537.996 159.040.659
Cash and cash equivalents 3.206.357 8.727.400
Total 182.895.230 172.856.422
Non-Current Liabilities
Long-term debt 111.790.367 131.897.431
Other long-term liabil ities - 48.557.332
Total 111.790.367 180.454.762
Current Liabilities
Short-term debt 48.128.071 31.865.073
Trade and other payables 20.865.500 5.655.000
Total 170.569.211 156.955.781
Total 239.562.782 194.475.854
ALUMINIUM OF GREECE
Annual Financial Report for the period from1st of January to 31st of December 2014 97
6.35 Post Balance Sheet events
On 26/1/2015, was activated the extension of the Company’s goal that had been decided by the
Extraordinary General Meeting on 26/2/2014, by adding as secondary activity of industrial chemicals and
in particular the trade of oxides, hydroxides and peroxides (No.K.A.D.46.75.12.43).
There are no other significant subsequent events that relate to the Company, which is required by the
International Financial Reporting Standards (IFRS).
Annual Financial Report for the period from1st of January to 31st of December 2014 98
F. FIGURES AND INFORMATION
Annual Financial Report for the period from1st of January to 31st of December 2014 99
G. AVAILABILITY OF FINANCIAL STATEMENTS
The Annual Financial Statements of the Company, the auditor’s report and the report of the Board of
Directors have been posted on the web site of the Company www.alhellas.gr. On Group’s website
www.mytilineos.gr there is, in electronic form, the Annual Financial Statement and the Annual
Newsletter of the previous fiscal and other important information.
THE PRESIDENT OF THE BOARD
SPYRIDON KASDAS
I.D. No ΑΒ050826
THE MANAGING DIRECTOR
DIMITRI STEFANIDIS
I.D. No AI994068
THE DIRECTOR FINANCE CONTROL
IOANNIS BOUBONARIS
I.D. No AM499302
THE CHIEF ACCOUNTANT
STERGIOS KARAMELISSARIS
I.D. No X312904
Reg. No. 65196/A' Class