Interim / Quarterly Report • Sep 26, 2018
Interim / Quarterly Report
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SIX-MONTH FINANCIAL REPORT FOR THE PERIOD
JANUARY 1 – JUNE 30, 2018
(IN ACCORDANCE WITH THE INTERNATIONAL FINANCIAL REPORTING STANDARDS AS ADOPTED BY THE EUROPEAN UNION)
| PAGE | ||
|---|---|---|
| Statements of the Members of the Boards of Directors | 3 | |
| Board of Directors' report on the interim condensed financial information | 4 | |
| Report on Review of six-month financial report | 17 | |
| Interim Condensed Statement of Comprehensive Income | 18 | |
| Interim Condensed Statement of Financial Position | 19 | |
| Interim Condensed Statement of Changes in Shareholders' Equity | 20 | |
| Interim Condensed Cash Flow Statement (Indirect Method) | 21 | |
| Notes to the Interim Condensed Financial information | ||
| 1. | Company's establishment and activity | 22 |
| 2. | Basis of Presentation of Financial information | 23 |
| 3. | Principal Accounting Policies | 23 |
| 4. | Property, plant and equipment | 29 |
| 5. | Income tax (current and deferred) | 30 |
| 6. | Other Non-Current assets | 31 |
| 7. | Inventories | 32 |
| 8. | Trade and other receivables | 32 |
| 9. | Cash and cash equivalents | 33 |
| 10. | Share capital | 33 |
| 11. | Reserves | 34 |
| 12. | Government grants | 34 |
| 13. | Provisions | 35 |
| 14. | Provision for staff retirement indemnity | 35 |
| 15. | Long and short term borrowings | 36 |
| 16. | Dividends | 37 |
| 17. | Accrued and other short term liabilities | 37 |
| 18. | Deferred income | 38 |
| 19. | Segment information | 39 |
| 20. | Revenue | 41 |
| 21. | Analysis of Expenses | 41 |
| 22. | Other operating income/ (expenses) | 42 |
| 23. | Financial income/ (expenses) | 42 |
| 24. | Depreciation-Amortization | 42 |
| 25. | Payroll and related costs | 43 |
| 26. | Earnings per share | 43 |
| 27. | Commitments and contingencies | 43 |
| 28. | Related party transactions | 45 |
| 29. | Financial instruments | 47 |
| 30. | Subsequent events | 48 |
(in accordance with article5par. 2 of L. 3556/2007)
The following statements, which are effected in accordance with article 5 par. 2 of the L. 3556/2007, as applicable, are given by the following Members of the Board of Directors of the Company:
The undersigned, in our above-mentioned capacity, and in particular the third as specifically appointed by the Board of Directors of the societe anonyme company under the name "Piraeus Port Authority Societe Anonyme" and trade title "PPA S.A." (hereinafter referred to as "Company" or as "PPA"), we state and we assert that to the best of our knowledge:
Piraeus, September 26, 2018
FU CHENGQIU FENG BOMING ZHU JIANHUI
Chairman of the Member of the Member of the Board of Directors and Managing Director
Board of Directors Board of Directors
Passport No E92044606 Passport No PE0484459 Passport No PE0844394
Regarding the Interim Condensed Financial information for the six month period ended June 30, 2018
The Board of Directors report on the interim condensed financial information was compiled and is in accordance with the prevailing legislation (par. 6 art. 5 of L.3556/2007) and the administrative decisions of the Capital Market Commission's Board of Directors (1/434/3-7-2007, 7/448/11-10-2007). The report aims to inform investors about:
Total revenues for the first semester amounted to € 63.5 million, which - compared to the same period of 2017 (€ 52.0 million) – increased by € 11.5 million or 22.1%. This increase is due to the significant increase in revenue from the concession agreement of Pier II+III, container terminal sector, car terminal sector as well ship repairing sector by 29.5%, 20.1%, 29.7% and 48.3% or by € 6.1 million, € 2.1 million, 1.8 million and € 1.5 million respectively. On the contrary, a slight decrease of 10.0%, or by approximately € 0.4 million, occurred in the revenues of cruise sector.
Other income for the period amounted to € 5.5 million, compared to the corresponding period of 2017 (€ 3.7 million), increased by € 1.8 million or 48.6%. The change is mainly due to the increase in the reverse of unused provision for bad debtors of € 1,4 million as well as the increases in the reversal of provision for legal cases amounting to € 1.4 million (Note 22). This increase mainly mitigated by the decrease by 1.0 million in the other operating income from unused provisions and European Union programs.
The key operating costs are the staff costs which in the 1st semester of 2018 decreased to € 28.8 million from € 30.2 million in the 1st semester of 2017. The significant decrease is mainly due to the granting of voluntary retirement incentives to those employees who have been entitled to retirement with any provisions and according to specific conditions set by the administration. Until June 30, 2018, the use of incentives was made by 7 employees and 1 worker who received voluntary incentives of € 0.3 million. Also, due to the use of incentives by a total of 83 employees of the Company since the initial application of the voluntary retirement, there was a decrease in wages and employers' contributions of € 1.1 million compared to the corresponding semester of 2017.
As far as the other non-personnel costs are concerned, the largest increase is noticed in "Third Party Fees" and ''Concession Agreement Fee'', which amounted to € 7.0 million versus € 5.7 million. The changes were mainly due to the increase from electricity and water supply, in the concession fee to Greek State, insurance premiums mainly on property and the repairs of buildings.
A significant increase to the provision for legal cases by € 1.3 million recorded in the current period, where no such provision for the prior period was recorded.
Depreciation expenses amounted to € 7.0 million (June 30, 2017: € 6.7 million) present an increase, due to the depreciation on period's additions.
Finally, a significant increase by € 2.2 million was noted in the provision for trade debtors and other receivables relating to the expected credit losses due to the change of Company's accounting policy by the adoption of IFRS 9, where no such provision for the prior period was recorded.
Other operating expenses for the period amounted to € 0.4 million, compared to the corresponding period of 2017 (€ 0.8 million), showing a slight decrease of € 0.4 million. The decrease is mainly due to the reduction of the compensation paid to third parties.
Total assets at June 30, 2018 amounted to € 374,6 million, higher by 2.9% or € 10.7 million at (December 31, 2017: € 363.9 million).
The increase in total assets is mainly due to the increase of the net book value of property, plant and equipment by the amount of € 25.1 million which includes the purchase of floating dock and payment for the completion of oil pier, totaling to € 32.5 million.
This increase of above assets was partly offset, mainly by the decrease of € 13.7 million in cash and cash equivalents compared to December 31, 2017.
Total liabilities at June 30, 2018 amounted to € 180.1 million (31.12.2017: € 178.0 million).
The difference in total liabilities is mainly due to the changes in the following:
These decreases were mainly offset by the increase of income taxes payable by € 5.2million as well as the increase in trade payables by € 1.5 million.
| Financial Structure ratios | 30.06.2018 | 31/12/2017 |
|---|---|---|
| 1. Current assets Current liabilities |
76,412,531.06 1.92 39,833,612.46 |
90,100,075.63 2.70 33,349,325.73 |
| 2. Borrowings Total equity |
65,537,484.22 0.34 194,488,237.45 |
68,568,507.92 0.37 185,899,439.73 |
| Performance and efficiency ratios | 30.06.2018 | 30.06.2017 |
| 3. EBITDA Revenue |
25,729,711.88 0.41 63,514,414.55 |
15,169,218.28 0.29 52,038,757.04 |
The Company uses as Alternative Performance Measures ("APMs") the above ratios in the context of making decisions concerning its financial, operational and strategic planning, as well as assessing and publishing its performance. These APMs help to understand better the Company 's financial and operating results, financial position and cash flow statement. Alternative performance measures (APMs) must always be taken into account in combination with the financial results prepared in accordance with International Financial Reporting Standards ("IFRS") and will not replace the latter under any circumstances.
Presented (22.01.2018) at a public consultation the PPA SA proposals for the "Master Plan of the Piraeus Port", as provided by the Concession Agreement between PPA SA and Hellenic Republic, according to:
(i) the laws and regulations of general implementation, together with all the existing applicable regulatory rules,
(ii) the methodology and specifications quoted in the "Specifications of Master Plan" document,
(iii) the regulations and guidelines for the establishment of Program Design as listed in ANNEX 6.2 of the Concession Agreement 2016.
Arrived in March 2018 in Perama ship Repair Zone the new "PIRAEUS III" floating dock of 22,000 tons lifting capacity, which can serve ships up to 240 m. length, 35 m. width, with transport capacity of 80,000 tons (PANAMAX) and on April 2018 completed the procedure for its installation and mooring in a permanent position and performed its trial operation with the first ship's docking. The floating dock has not yet received all the relevant permissions and certifications by the responsible organization, Hellenic Register of Shipping. In addition, in the Ship Repair Zone, extensive works for the infrastructure improvement are carried out, such as:
Started the project of redesigning and replacement of the PPA's network infrastructure (assigned to Huawei Technologies). By modernizing its network infrastructure, PPA SA will enjoy network services of guaranteed availability, high-speed data rates from 20Gbps up to 80Gbps, capable of supporting any future need as well as shielding against network threats.
Approved:
the call of tendering process and afterwards the tender result for the procurement of three (3) engine powered 8-ton forklift trucks for the PPA SA Car Terminal of, at the amount of € 235.200 plus VAT,
the carrying out of tendering process for the procurement of twenty (20) tractors for the operational needs of Container Terminal Department,
the call of tendering process and afterwards the tender result for the procurement of two (2) crane telescopic spreaders for the coverage of Container Terminal operational needs, at the amount of € 478.800 plus VAT.
Passenger traffic in the cruise sector during the first half of 2018 recorded mixed signs. In particular, homeport passengers recorded an increase of 2.8%, while transit passengers decreased by 17.5%. As a result, the total passenger cruise work during the first half of 2018 decreased by approximately 12.1% compared to the first half of 2017, from 377,603 to 336,712 passengers.
The reduction in transit passengers is the result of reduced cruise demand and offerings in the eastern Mediterranean due to the geopolitical instability prevailing in some countries in the region. On the other hand, even the slight increase in homeport passenger (to 127,732 in 2018 from 124,254 in 2017) indicates an improved service provision that helped companies with a long-term strategy in the region to continue to offer routes from Piraeus with an enhanced number of approaches within Greece.
The number of total passenger throughout rose 2.3% to 6.58 million from 6.43 million passengers compared to the previous year, while the throughput of vehicles increased by 1.70% to 1.20 million from 1.18 million vehicles.
More specifically, the increase is due to an increase in the passenger throughput of the domestic and Argosaronikos ferry services by 9.0% and 11.5% respectively, which was partly offset by the reduction in the passenger traffic of the Salamina ferry line by 4.0%. Piraeus continues to be by far the largest passenger port of Europe and is (in many cases) the island's communication hub of the Aegean archipelago with the hinterland, contributing to maintaining the country's social cohesion.
In the first half of 2018, the traffic in the car terminals recorded an increase of about 23.5% compared to the corresponding period of 2017. In total, 243,873 vehicles were transported in the first half of 2018 compared to 197,515 in the corresponding period of 2017. In particular, local and transhipment vehicles increased by 24% and 23% respectively (in absolute figures an increase of 14,047 and 32,311 units of vehicles respectively).
The increase in traffic recorded in the first half of 2018 follows another increase in the same period in 2017, indicating a trend stabilisation. The fact that vehicle traffic for the domestic market for the third consecutive year records a double-digit growth rate creates positive prospects for the car terminal sector that before the Greek financial crisis amounted to about a quarter of a million per year.
Handling of the Container Terminal in Pier I in the first half of 2018 amounted to 253,489 TEU recording an increase of 2.2% compared to the corresponding period of 2017. This change was accompanied by a significant change in the traffic mix as the tranhipment cargo decreased during the period by 2% while domestic cargo (imports and exports) increased by 29%.
The increase in domestic cargo is in line with the increase in exports and imports of the country. In addition, there was a positive impact from the improvement in the quality of services provided and especially the increase in average productivity in the first half of 2018 by 7% compared to the corresponding period in 2017.
In the ship repair sector, an increase was recorded in the hire days and the number of vessels that were serviced. In particular, in all PPA docks, during the first half of 2018, 62 ships were served compared to 43 in the corresponding period of 2017. However, the comparison of the periods is not accurate as in 2017 the «Piraeus I» large floating dock remained out of service for almost the whole first semester period (up to 23th of June).
Undoubtedly, the demand for service immediately after completing the necessary repairs and the reactivation of the «Piraeus I» dock and the procurement of the newly acquired 80,000 tons «Piraeus III» dock provide the necessary conditions for the revitalization of this activity and the improvement of the contribution of the activity to the Company's financial results.
PPA S.A., as a member of the European EcoPorts Network, implements an environmental management program certified according to the European Environmental System focused in port sector: PERS (Port Environmental Review System), established by the European Environmental Ports Organization (ESPO).
Within the framework of the PERS environmental management system, PPA S.A. has developed and implements a specific environmental policy and maintains an updated record of the environmental parameters related to the company's activities. In accordance with European and International standards, PPA S.A. aims at the continuous improvement of its environmental performance, by protecting the environment and preserving natural resources for future generations as follows:
With the provision of the Legislation, PPA S.A. has in recent years succeeded in removing over 100 abandoned and semi-sunken vessels from its areas of responsibility, aiming at upgrading the shipping safety and improving environmental management, in line with European and International standards for the environmental protection. In the above framework were completed the tender processes related with the removing the designated as dangerous and harmful vessels "Dimitra", "Piraeus III" and "Alkyon" outside of ΡΡΑ port area.
Six-month Financial Report for the period ended June 30, 2018 (amounts in Euro, unless stated otherwise)
The Company pays particular attention to social contribution, as demonstrated and expressed through the timeless efforts and initiatives of both Management and Employees.
The Company aims to contribute to the development of its society and especially the creation of added value for the communities that surround it.
PPA S.A. activities, with regards to aiding the community, are related with:
The Company attributes utmost importance to the provision of safe workplaces to employees, but also safe traffic-to-traffic areas for all involved, traders, passengers etc.
All areas of the Port are regularly inspected to ensure that employees comply with health and safety rules of the company and the instructions of those responsible.
PPA S.A. also monitors and controls the compliance of third parties (contractors) with the Occupational Health and Safety legislation, requiring health and safety plans before and during the implementation of technical projects.
For this purpose, a safety engineer and a doctor are employed, reporting any safety issues to the Management of the Company, in accordance with Law No. 3850/2010. Potential accidents are recorded and investigated, and corrective actions are planned in order not to be repeated.
Additionally, at high-risk areas (Container Terminal and Perama Shipyards Zone) the organization provides two ambulances with trained rescue personnel that are available 24/7.
Within the first six months of 2018, the Company, aiming to maintain the level of safety, proceeded with the procedures for the renewal of the contract (amounting to € 416,000) for the provision of emergency pre-hospital care for two years through the staffing of the two ambulances of the PPA S.A. in the areas of Container Terminal and Ship Repair Zone.
Education is PPA's development objective to improve the service and increase productivity.
PPA S.A. is planning employee training programs, in which they are invited to participate at the expense of the Company and is establishing an Annual Training Program which is formed by the Human Resources Dept. This Annual Training Program is either a result of the Department's call to all Departments to submit requests-proposals for training seminars' conduction for their staff or anytime throughout the year if it is considered necessary.
The approval for the implementation of the Annual Training Program is taken by Management. In cases where the conduct of a seminar can be integrated into subsidized programs by LAEK 0,24% the Human Resources Department carry out appropriate actions to take that grant.
In the 1stsemester of 2018, we had 155 participations of PPA's employees in 15 in & out - house seminars and 1 Ιn-Ηouse training for Safe Handling of Machinery and Heavy Vehicles.
Seminars involving staff training (employees and technicians) are related mainly on ISO Certification, Law - Economics – Taxes - Insurance, Internal Control Issues, Administration, Information Technology, Strategic Planning, Crane Control systems and DRONE operator training.
Eight (8) seminars of all were submitted for subsidy at the OAED -LAEK 0, 24%. In total, the above educational programs covered approximately 39% of the total amount approved for 2018.
Respectively the 1stsemester of 2017 we had 118 participations of PPA's staff in 16 in & out –house seminars and in 1 Conference. The educational programs for the 1st semester of 2017 had covered approximately 31% of the total year's budget.
In April 2018, PPA SA has been awarded double certification against ISO 9001:2015 for Quality Management and ISO 14001:2015 for Environmental Management by Lloyd's Register (LR) which covers the:
PPA SA extended the double certification that previously covered only at the Cruise and RoRo Terminal services and achieved the transition to the new versions of the standards (ISO 9001:2015 & ISO 14001:2015)
The effectiveness of the applied Integrated Quality & Environmental Management System was evidenced during the certification audit. Previously, a Risk & Opportunities Assessment and an Environmental Aspects Assessment were conducted. Also, PPA Quality & Environmental Policy has been updated.
In this framework, internal audits are conducted regularly and the top management, through the Management Reviews, assesses the effectiveness of the Integrated Quality & Environmental Management System, the achievement of the objectives set and supports actions to ensure continual improvement.
Also, the certification process for PPA to become an Authorized Economic Operator (AEO/ Security and Safety), is in progress. This certification will offer customs simplifications, thus facilitate customs procedures.
In 2018, PPA SA participates in thirteen European research & development co-funded projects, which are under implementation process:
| 1 | TEN-T | Poseidon MED II | Poseidon MED II |
|---|---|---|---|
| Multidimensional Integrated risk assessment framework and | |||
| 2 | CIP | MITIGATE | dynamic collaborative Risk Management tools for critical |
| information infrastructures (finalized 28/2/2018) | |||
| Automated Serious Game Scenario Generator for Mixed Reality | |||
| 3 | H2020 | AUGGMED | Training (finalized 31/5/2018) |
| PROmoting security and safeTy by crEating a MED clUster on | |||
| 4 | MED | PROTeuS | Maritime Surveillance |
| 5 | TEN-T | ELEMED | Electrification Mediterranean (finalized 31/3/2018) |
| Scalable multidimensionAl sitUation awaReness sOlution for | |||
| 6 | H2020 | SAURON | protectiNg european ports |
| 7 | CBRN | SSEE | Shielding South-East Europe from CBRN-E threats |
| 8 | ADRION | SUPAIR | SUstainable Ports in the Adriatic Ionian Region |
| 9 | ADRION | SUPER-LNG | SUstainability PERformance of LNG-based maritime mobility |
| 10 | ADRION | NEORION | Green ShipBuilding |
| Multidisciplinary approach and solutions to development of | |||
| 11 | ADRION | MultiAPRO | intermodal transport in region |
| 12 | H2020 | PIXEL | Port IoT for Environmental Leverage |
| Robust Risk based Screening and alert System for Passengers and | |||
| 13 H2020 |
TRESSPASS | luggage |
Within 2018, the following proposals related with HORIZON2020 program and which PPA S.A. participates as a partner passed successfully the 1st phase of evaluation. The final evaluation is expected in 2018
| 1 | H2020 | SHIPAIR | Cost-effective systems and tools for assessing airborne shipping emissions in real-world operating conditions |
|---|---|---|---|
| 2 | H2020 | MARLIN | MARitime human factors Lessons for Innovations in Nautical industries |
Within 2018, the following proposals were submitted for evaluation under the Greece-China Program.
| 1 Greece-China |
HYDRAWECS | Cooperative Research on the Hydrodynamic Performance of | |
|---|---|---|---|
| Offshore Multi-Task Wave energy Converters | |||
| Climate-induced Risk and Emergency Management for | |||
| 2 | Greece-China | CiREM | protection of critical infrastructures and transport resilience in |
| line with 'One Belt-One Road' initiative | |||
| Advances in terminal operations in the 'One Belt-One Road' | |||
| 3 | Greece-China | ATOS | strategic context |
The nature of PPA's business activities largely depends on the wider international economic environment, the global geopolitical developments, the political and economic development of the Southeastern Mediterranean countries and of the countries served through the port of Piraeus, the developments taking place in the global port industry in general, but also in the further development of individual port activities which up to a large extent are related to both the investment plan of PPA S.A. and the level of service provided to port users.
In the commercial port (Container and Ro-Ro terminals), in addition to further highlighting the strategic advantage of the port's geographical location as a transshipment hub at the crossroads of three continents, the main challenges come from the international trade environment.
The application of tariffs on European and Chinese products from the US is expected to affect commodity flows in the medium term, while it is expected to limit the pace of international trade expansion. At the same time, it creates conditions for strengthening trade between Europe and China as a counterweight to US tariffs and the reduced competitiveness of products towards the world's largest economy. Against this background, despite the fact that a trade war will undoubtedly affect the growth rate of world trade, the increase in flows between Europe and Asia is expected to positively affect volumes in the port of Piraeus in the medium term.
The recent reduction in Turkey's Lira exchange rate is likely to affect imported products especially those priced in euros. Despite the fact that Turkey is a major trading partner of Greece, the largest volume concerns petroleum products not moving through the port of Piraeus. In addition, a significant number of TIR trucks serviced in Piraeus are from Turkey and the increase in export competitiveness due to the reduction in the Turkish Lira exchange rate, in the absence of extreme economic adjustment, is likely to contribute to the increase in these flows, but without a significant impact on the financial figures of the Company, as this activity is of small economic importance (less than 1% of revenue).
In the field of cruise, the evolution of figures in the first half confirms the estimate that the traffic volumes of 2018 will move around the same levels as in 2017 as the continuing instability in the eastern Mediterranean region still does not allow the full potential of Piraeus to be unvailed. Despite the fact that total traffic volumes registered a small decrease during the first half, there is also a rise in homeport compared to the corresponding period of 2017. Given that the structural change in the passenger mix will be maintained in the second half, revenue is expected to improve despite a small decrease in volumes.
In the ship repair sector, the first half figures indicate a significant improvement due to the increase in the docs availability and the increase in demand for ship services. This trend is expected to continue in the second half, boosted by the demand from large yachts that now choose Piraeus and from merchant ships that will need to be converted in view of the 2020 GHG regulations.
In coastal shipping, during the first half of the year, traffic volumes recorded a small increase, which is expected to remain in peak months as well, contributing to the corresponding financial improvement. In the longer term though, rising fuel prices are expected to have a negative impact both on the cost of providing coastal shipping services and on the competitiveness of the fleet over air transport thus a challenge exists for the future.
The above combined with the concerted effort of internal reorganization of services and regulatory reform, set the necessary bases for the immediate future to strengthen the PPA S.A. position at a national and international level.
Credit Risk: There is no significant credit risk for the Company towards the contracting parties, since it receives advance payments or letters of guarantee from customers. In addition, the Company's deposits are placed in bank financial institutions in Greece with ratings Caa2 (Moody's credit rating).
Foreign Exchange Risk: The Company is neither involved in international trade nor has any long term loans in foreign currency and therefore is not exposed to foreign exchange risk resulting from foreign currency rate fluctuations.
Interest rate risk: The Company bank loans are in Euro at floating interest rates. The Company does not use derivatives in financial instruments in order to reduce its exposure to interest rate risk fluctuation as at the balance-sheet date. The Company management believes that there is no significant risk resulting from a possible interest rate fluctuation.
The Company provides services to certain related parties in the normal course of business. The Company's transactions and account balances with related companies are as follows:
| Relation with the | Period | Sales to related | Purchases from | |
|---|---|---|---|---|
| Related party | Company | ended | parties | related parties |
| PIRAEUS CONTAINER | 30.06.2018 | 26,833,105.23 | 1,169,212.07 | |
| TERMINAL SA | Related Party | 30.06.2017 | 20,715,685.72 | 10,757,113.95 |
| COSCO (Shanghai) | 30.06.2018 | - | 23,835,000.00 | |
| SHIPYARD Co LTD | Related Party | 30.06.2017 | - | - |
| COSCO SHIPPING LINES | Related Party | 30.06.2018 | 61,043.29 | 1,000.00 |
| GREECE S.A. | 30.06.2017 | 9,470.65 | ||
| PCDC S.A. | Related Party | 30.06.2018 | 20,044.93 | 1,000.00 |
| 30.06.2017 | - | |||
| COSCO (HONG KONG) | 30.06.2018 | - | 418,306.44 | |
| INSURANCE BROKERS L.T.D. |
Related Party | 30.06.2017 | - | 345,000.00 |
| Total | 30.06.2018 | 26,914,193.45 | 25,423,518.51 | |
| Total | 30.06.2017 | 20,725,156.37 | 11,102,113.95 | |
| Amounts due | ||||
| Relation with | Year/Period | from related | Amounts due to | |
| Related party | the Company | ended | parties | related parties |
| PIRAEUS CONTAINER TERMINAL SA |
Related Party | 30.06.2018 31.12.2017 |
8,123,672.74 2,530,385.67 |
- 5,890.33 |
| COSCO SHIPPING LINES GREECE S.A. |
Related Party | 30.06.2018 31.12.2017 |
294.20 - |
- 94,616.63 |
| 30.06.2018 | 3,100.00 | 6,000.51 | ||
| PCDC S.A. | Related Party | 31.12.2017 | - | - |
| COSCO (Shanghai) | Related Party | 30.06.2018 | - | 2,383,500.00 |
| SHIPYARD Co LTD | 31.12.2017 | 7,150,500.00 | - | |
| COSCO SHIPPING AIR | ||||
| FREIGHT CO | Related Party | 30.06.2018 | - | 180.00 |
| 31.12.2017 | - | 12,976.00 | ||
| Total | 30.06.2018 | 8,127,066.94 | 2,389,680,51 | |
| Total | 31.12.2017 | 9,680,885.67 | 113,482.96 |
The revenues and receivables from Piraeus Container Terminal S.A. (PCT S.A.) are related to the fixed and variable revenue from the concession agreement (PIER II & III). PCT S.A. is considered as a related party after the acquisition of the majority stake of PPA S.A by the COSCO SHIPPING (Hong Kong) Limited on August 10, 2016. Expenses from PCT S.A. related to invoices to PPA S.A. for the construction of the petroleum pier that has been undertaken by a contractor through PCT S.A.
Τhe transaction with COSCO (HONG KONG) INSURANCE BROKERS L.T.D. relates to the insurance coverage of PPA S.A. regarding third party liability, employer' s liability, property and business interruption and directors and officers liability for the period 1.1-31.12.2018, according to article 17 of the Concession Agreement (Greek Law 4404/2016).
The balance with COSCO (Shanghai) SHIPYARD Co LTD for the year ended December 31, 2017 relates to a payment in advance for the purchase of a floating dock intended to locate at Perama Ship Repair Yard based on a contract signed on September 4, 2017. In the current period the floating dock has been invoiced and delivered but not still in full operational status. The amount due as at June 30, 2018 concerns the same transaction.
Board of Directors Members Remuneration: For the period ended on June 30, 2018, remuneration and attendance costs, amounting to € 288,286.78 (June 30, 2017: € 120,780.45) were paid to the Board of Directors members. Furthermore during the period ended June 30, 2018 emoluments of € 178,615.10 (June 30, 2017: € 207,636.05) were paid to Managers/Directors for services rendered.
The Board of Directors having taken into account:
• the Company's financial position;
• the risks facing the Company that could impact on its business model and capital adequacy; and
• the fact that no uncertainties are identified to the Company's ability to continue as a going concern in the foreseeable future and in any event over a period of at least twelve months from the date of approval of the Interim Condensed Financial Information and states that it considers it appropriate for the Company to continue to adopt the going concern basis in preparing its Financial Statements and that no uncertainties are identified to the Company's ability to continue to adopt the going concern basis in preparing its Financial Information in the foreseeable future and in any event over a period of at least twelve months from the date of approval of Interim Condensed Financial Information.
Piraeus, September 26, 2018
THE CHAIRMAN OF THE BoD
FU Chengqiu
[Translation from the original text in Greek]
We have reviewed the accompanying condensed statement of financial position of Piraeus Port Authority S.A (the "Company"), as of 30 June 2018 and the related condensed statements of comprehensive income, changes in shareholders' equity and cash flow statements for the six-month period then ended, with the selected explanatory notes that comprise the interim condensed financial information and the other data of the six-month financial report. Management is responsible for the preparation and presentation of this condensed interim financial information in accordance with International Financial Reporting Standards as they have been adopted by the European Union and applied to interim financial reporting (International Accounting Standard "IAS 34") and of the other data of the six-month financial report. Our responsibility is to express a conclusion on this six-month financial report based on our review.
We conducted our review in accordance with International Standard on Review Engagements 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity". A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing, as they have been transposed into Greek Law and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim financial information is not prepared, in all material respects, in accordance with IAS 34, and the other data of the six-month financial report in accordance with article 5 of Law 3556/2007.
Pricewaterhouse Coopers S.A 268 Kifissias Avenue 152 32 Halandri SOEL Reg. No. 113 Despina Marinou
Athens, 26 September 2018 The Certified Auditor
SOEL Reg. No. 17681
| Notes | 01.01-30.06.2018 | 01.01-30.06.2017* | |
|---|---|---|---|
| Revenue | 20 | 63,514,414.55 | 52,038,757.04 |
| Cost of sales | 21 | (36,758,352.38) | (37,715,244.16) |
| Gross profit | 26,756,062.17 | 14,323,512.88 | |
| Administrative expenses | 21 | (13,089,513.33) | (8,695,426.87) |
| Other operating expenses | 22 | (420,607.04) | (846,657.91) |
| Other operating income | 22 | 5,522,312.37 | 3,724,481.51 |
| Financial income | 23 | 401,034.76 | 383,219.94 |
| Financial expenses | 23 | (470,687.43) | (273,954.89) |
| Profit before income taxes | 18,698,601.50 | 8,615,174.66 | |
| Income taxes | 5 | (5,438,991.84) | (4,175,196.10) |
| Net profit after taxes (A) | 13,259,609.66 | 4,439,978.56 | |
| Net other comprehensive income not to be reclassified in profit or loss in subsequent period: |
|||
| Actuarial losses | 14 | (30,571.98) | (297,491.92) |
| Income taxes | 5 | 8,865.87 | 86,272.66 |
| Other total comprehensive income after tax (B) | (21,706.11) | (211,219.26) | |
| Total comprehensive income after tax (A)+(B) | 13,237,903.55 | 4,228,759.30 | |
| Profit per share (Basic and diluted) | 26 | 0.5304 | 0.1776 |
| Weighted Average Number of Shares (Basic) | 26 | 25,000,000 | 25,000,000 |
| Weighted Average Number of Shares (Diluted) | 26 | 25,000,000 | 25,000,000 |
*IFRS 9 and 15 have been applied with the cumulative impact recognised in retained earnings without restating the 2017 comparatives (note 3).
The accompanying notes are an integral part of the Interim Condensed Financial Information
Interim Condensed Financial Information for the period ended June 30, 2018 (amounts in Euro, unless stated otherwise)
| Notes | 30.06.2018 | 31.12.2017* | |
|---|---|---|---|
| ASSETS | |||
| Non current assets | |||
| Property, Plant and Equipment | 4 | 284,493,075.84 | 259,362,795.09 |
| Investment property | 734,338.38 | 734,338.38 | |
| Intangible assets | 35,118.75 | 20,276.35 | |
| Other non-current assets | 6 | 4,746,593.14 | 5,094,403.95 |
| Deferred tax assets | 5 | 8,203,057.11 | 8,609,824.57 |
| Total non current assets | 298,212,183.22 | 273,821,638.34 | |
| Current assets | |||
| Inventories | 7 | 2,482,961.42 | 2,313,380.54 |
| Trade and Other Receivables | 8 | 25,562,464.29 | 25,711,258.40 |
| Restricted cash | 9 | 213,267.48 | 213,267.48 |
| Cash and cash equivalents | 9 | 48,153,837.87 | 61,862,169.21 |
| Total Current Assets | 76,412,531.06 | 90,100,075.63 | |
| TOTAL ASSETS | 374,624,714.28 | 363,921,713.97 | |
| EQUITY AND LIABILITIES Equity |
|||
| Share capital | 10 | 50,000,000.00 | 50,000,000.00 |
| Other reserves | 11 | 77,896,081.62 | 77,896,081.62 |
| Retained earnings | 66,592,155.83 | 58,003,358.11 | |
| Total equity | 194,488,237.45 | 185,899,439.73 | |
| Non-current liabilities | |||
| Long-term borrowings | 15 | 59,499,999.99 | 62,499,999.99 |
| Government grants | 12 | 18,003,938.34 | 18,443,135.19 |
| Reserve for staff retirement indemnities | 14 | 11,549,854.02 | 11,391,297.02 |
| Provisions | 13 | 13,700,138.90 | 14,211,380.65 |
| Deferred income | 18 | 37,548,933.12 | 38,127,135.66 |
| Total Non-Current Liabilities | 140,302,864.37 | 144,672,948.51 | |
| Current Liabilities | |||
| Trade accounts payable | 5,240,618.40 | 3,687,754.18 | |
| Short term of long term borrowings | 15 | 6,000,000.00 | 6,000,000.00 |
| Short-term leases | 37,484.23 | 68,507.93 | |
| Income tax | 8,652,778.37 | 3,524,363.03 | |
| Accrued and other current liabilities | 17 | 19,902,731.46 | 20,068,700.59 |
| Total Current Liabilities | 39,833,612.46 | 33,349,325.73 | |
| Total liabilities | 180,136,476.83 | 178,022,274.24 | |
| TOTAL LIABILITIES AND EQUITY | 374,624,714.28 | 363,921,713.97 |
*IFRS 9 and 15 have been applied with the cumulative impact recognised in retained earnings without restating the 2017 comparatives (note 3).
The accompanying notes are an integral part of the Interim Condensed Financial Statements Information
| Notes | Share capital | Statutory reserve (Note 11) |
Other reserves (Note 11) |
Retained earnings |
Total | |
|---|---|---|---|---|---|---|
| Total Equity at January 1, 2017 | 50,000,000.00 | 9,044,583.33 | 68,287,029.53 | 50,259,822.63 | 177,591,435.49 | |
| Net profit after taxes | - | - | - | 4,439,978.56 | 4,439,978.56 | |
| Total comprehensive income after income taxes of the period | - | - | - | (211,219.26) | (211,219.26) | |
| Total comprehensive income after income taxes | - | - | - | 4,228,759.30 | 4,228,759.30 | |
| Dividens | 16 | - | - | - | (2,230,000.00) | (2,230,000.00) |
| Total Equity at June 30, 2017 | 50,000,000.00 | 9,044,583.33 | 68,287,029.53 | 52,258,581.93 | 179,590,194.79 | |
| Total Equity at January 1, 2018 as originally presented | 50,000,000.00 | 9,609,052.09 | 68,287,029.53 | 58,003,358.11 | 185,899,439.73 | |
| Change in accounting policy (IFRS 9 and IFRS 15) | 3 | - | - | - | (369,105.83) | (369,105.83) |
| Restated Total Equity at January 1, 2018 | 50,000,000.00 | 9,609,052.09 | 68,287,029.53 | 57,634,252.28 | 185,530,333.90 | |
| Profit after income taxes | - | - | - | 13,259,609.66 | 13,259,609.66 | |
| Other comprehensive loss after income taxes | - | - | - | (21,706.11) | (21,706.11) | |
| Total comprehensive income after income taxes | - | - | - | 13,237,903.55 | 13,237,903.55 | |
| Dividens | 16 | - | - | - | (4,280,000.00) | (4,280,000.00) |
| Total Equity at June 30, 2018 | 50,000,000.00 | 9,609,052.09 | 68,287,029.53 | 66,592,155.84 | 194,488,237.46 |
The accompanying notes are an integral part of the Interim Condensed Financial Information 27,448,576.54
Interim Condensed Financial Information for the period ended June 30, 2018 (amounts in Euro, unless stated otherwise)
| Notes | 01.01-30.06.2018 | 01.01-30.06.2017* | |
|---|---|---|---|
| Cash flows from Operating Activities | |||
| Profit before income taxes | 18,698,601.50 | 8,615,174.66 | |
| Adjustments for: | |||
| Depreciation and amortisation | 24 | 7,400,654.56 | 7,102,677.41 |
| Amortisation of subsidies | 24 | (439,196.85) | (439,368.74) |
| (Gain)/ Losses on disposal of property, plant & equipment | (2,500.00) | 12,467.27 | |
| Financial income | 23 | 69,652.67 | (109,265.05) |
| Provision for staff retirement indemnities | 14 | 367,985.02 | 374,443.58 |
| Other Provisions | 268,492.70 | (823,647.31) | |
| Operating profit before working capital changes | 26,363,689.60 | 14,732,481.82 | |
| (Increase)/Decrease in: | |||
| Inventories | (169,580.88) | (2,144.30) | |
| Trade and other receivables | (13,828,423.21) | (11,175,957.50) | |
| Other long term assets | 309,534.91 | (16,653.73) | |
| Increase/(Decrease) in: | |||
| Trade accounts payable | (830,635.78) | (187,875.96) | |
| Accrued and other current liabilities | (4,417,391.52) | 725,010.35 | |
| Deferred income | (578,202.54) | (425,429.66) | |
| Decrease in restricted cash | - | 262,090.10 | |
| Interest paid | (376,683.87) | (232,520.98) | |
| Cash receipt from municipality | 6 | 4,608,844.90 | - |
| Payments for staff leaving indemnities | 14 | (240,000.00) | (815,350.50) |
| Interest on debtors late payments | 179,716.42 | 243,701.97 | |
| Net cash from Operating Activities | 11,020,868.03 | 3,107,351.61 | |
| Cash flow from Investing activities | |||
| Procceds from the sale of property, plant and equipment | 2,500.00 | - | |
| Capital expenditure for property, plant and equipment | (21,842,565.84) | (1,627,520.66) | |
| Interest and related income received | 224,385.01 | 136,401.30 | |
| Net cash used in Investing Activities | (21,615,680.83) | (1,491,119.36) | |
| Cash flows from Financing Activities | |||
| Net change in long-term borrowings | (3,000,000.00) | (3,000,000.00) | |
| Interest paid | (82,494.84) | (34,938.65) | |
| Net change in leases | (31,023.70) | (30,616.00) | |
| Net cash used in Financing Activities | (3,113,518.54) | (3,065,554.65) | |
| Net decrease in cash and cash equivalents | (13,708,331.34) | (1,449,322.40) | |
| Cash and cash equivalents at the beginning of the period | |||
| 9 | 61,862,169.21 | 43,763,194.93 | |
| Cash and cash equivalents of the end of the period | 9 | 48,153,837.87 | 42,313,872.53 |
*IFRS 9 and 15 have been applied with the cumulative impact recognised in retained earnings without restating the 2017 comparatives (note 3).
The accompanying notes are an integral part of the Interim Condensed Financial Information
"Piraeus Port Authority S.A" ("PPA S.A." or "Company") was established in 1930 as Civil Law Legal Corporation (C.L.L.C.) by Law 4748/1930, which was revised by L.1559/1950 and was ratified by L.1630/1951 and converted into a Societé Anonyme (S.A.) by Law 2688/1999. The Company is located at the Municipality of Piraeus, at 10 Akti Miaouli Street.
The Company's main objects based on its article of incorporation is to perform its obligations, conduct its activities and exercise its faculties under or in respect of the concession agreement between the Company and the Hellenic Republic dated 13 February 2002 regarding the use and exploitation of certain areas and assets within the Port of Piraeus, as amended and in force.
The Company may, by way of an illustrative but no means exhaustive list, conduct and be engaged in the following activities:
The main activities of the Company are anchoring services of vessels, handling cargo, loading and unloading services as well as goods storage and car transportation service. The Company is also responsible for the maintenance of port facilities, the supply of port services (water, electricity, telephone connection etc. supply), for services provided to travelers (coastal and cruise ships) and for renting space to third parties.
The Company is governed by the principles of Company Law 2190/1920 and the founding Law 2688/1999, as amended by Law 2881/2001 and Law 4404/2016.
The duration period of the Company is one hundred (100) years from the effective date of Law 2688/1999. This period may be extended by special resolution of the shareholders general meeting.
The Company is a subsidiary of COSCO SHIPPING (Hong Kong) Limited which controls 51% of the voting rights, with date of transfer of such rights on 10 August 2016. COSCO SHIPPING (Hong Kong) Limited is 100% held by China Ocean Shipping (Group) Company, which is 100% held by China COSCO SHIPPING Corporation Limited, a Chinese state-owned company. As a result, China COSCO SHIPPING Corporation Limited, by indirectly holding 100% of COSCO SHIPPING (Hong Kong) Limited, indirectly holds 51% of the voting rights in PPA.
The Company's number of employees at June 30, 2018 amounted to 1,023. At December 31, 2017, the respective number of employees was 1,025.
The accompanying interim condensed financial information that refer to the period ended on June 30, 2018, have been prepared in accordance with the International Financial Reporting Standard (IFRS) 34 "Interim Financial Reporting".
The accompanying interim condensed financial information do not include all the information required in the annual financial information and therefore should be examined in combination with the published annual financial information for the year ended 2017, which are available on the internet in the address www.olp.gr.
The Board of Directors of Piraeus Port Authority S.A. approved the six-month financial report for the period ended at June 30, 2018, on September 26, 2018.
The Company makes estimates and judgments concerning the future. Estimates and judgments adopted in the preparation of the interim condensed financial information are consistent with those followed in the preparation of the annual financial statements for the year ended December 31, 2017.
The accounting policies adopted in the preparation of the interim condensed financial information, are consistent with those followed in the preparation of the annual financial statements of the Company for the year ended December 31, 2017, except for the adoption of new standards and interpretations applicable for fiscal periods beginning at January 1, 2018.
New standards, amendments to standards and interpretations: Certain new standards, amendments to standards and interpretations have been issued that are mandatory for periods beginning on or after January 1, 2018. The Company's evaluation of the effect of these new standards, amendments to standards and interpretations is as follows:
IFRS 9 replaces the guidance in IAS 39 which deals with the classification and measurement of financial assets and financial liabilities and it also includes an expected credit losses model that replaces the incurred loss impairment model that was applied under IAS 39. IFRS 9 establishes a more principles-based approach to hedge accounting and addresses inconsistencies and weaknesses in the previous model in IAS 39.
The Company applied the standard retrospectively without restatement of the comparative information for prior years, on January 1, 2018. Therefore the adjustments arising from impairment rules are not reflected in the statement of financial position on December 31, 2017, but are recognised in the opening statement of financial position on 1 January 2018.
The Company applied the IFRS 9 simplified approach to measure expected credit losses (ECLs) on the trade and other receivables balances at the date of initial application. The result of the new requirements was an increase in the Company's impairment allowance for doubtful debts of € 138,455.83 with a corresponding impact in the opening retained earnings.
There was no impact from the classification and measurement of the financial assets and liabilities of the Company.
The Company record an allowance for expected credit losses (ECLs) for all financial assets not held at FVPL.
For trade receivables and other receivables, the Company has applied the simplified approach and have calculated ECLs based on lifetime expected credit losses.
For other financial assets, the ECL is based on the 12-month ECL. The 12-month ECL is the portion of lifetime ECLs that results from default events on a financial instrument that are possible within 12 months after the reporting date. However, when there has been a significant increase in credit risk since origination, the allowance will be based on the lifetime ECL.
IFRS 15 has been issued in May 2014. The objective of the standard is to provide a single, comprehensive revenue recognition model for all contracts with customers to improve comparability within industries, across industries, and across capital markets. It contains principles that an entity will apply to determine the measurement of revenue and timing of when it is recognised. The underlying principle is that an entity recognises revenue to depict the transfer of goods or services to customers at an amount that the entity expects to be entitled to in exchange for those goods or services.
The new standard establishes a five-step model to account for revenue arising from contracts with customers. Under IFRS 15, revenue is recognised at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer. The standard requires entities to exercise judgement, taking into consideration all of the relevant facts and circumstances when applying each step of the model to contracts with their customers. The standard also specifies the accounting for the incremental costs of obtaining a contract and the costs directly related to fulfilling a contract.
The Company performed an assessment on its revenue streams based on the five steps prescribed in the standard in order to identify any impacted areas. Management has determined that contracts in general comprise of a single performance obligation and prices are fixed, based on stand-alone selling prices derived from price lists. Revenue is recognised at a point in time when the service is provided to the customer.
On January 1, 2018, the Company adopted IFRS 15 by using the modified retrospective approach, meaning that the cumulative impact of the adoption was recognized in retained earnings and comparatives were not restated. The result of the adoption was an increase in the Company's contract liabilities of € 230,650.00 with a corresponding impact in the opening retained earnings. As of June 30, 2018 the contract liability has been derecognized as the performance obligation to the customer was satisfied.
Interim Condensed Financial Information for the period ended June 30, 2018 (amounts in Euro, unless stated otherwise)
Revenue is the amount of consideration expected to be received in exchange for transferring promised services to a customer, excluding amounts collected on behalf of third parties (value-added tax, other sales taxes etc.).
Revenue is recognized when (or as) a performance obligation is satisfied by transferring the control of a promised service to the customer. A customer obtains control of a service if it has the ability to direct the use of and obtain substantially all of the remaining benefits from that service. Control is transferred over time or at a point in time when the service is provided to the customer.
Revenue arising from services is recognised at a point in the time in the accounting period in which the services are rendered, and it is measured based on stand-alone selling prices derived from price lists.
A receivable is recognised when there is an unconditional right to consideration for the performance obligations to the customer that are satisfied.
A contract asset is recognized when the performance obligation to the customer is satisfied before the customers pays or before payment is due, usually when services are transferred to the customer before the Company has a right to invoice.
A contract liability is recognized when there is an obligation to transfer services to a customer for which the Company has received consideration from the customer (prepayments) or there is an unconditional right to receive consideration before the Company transfers a service (deferred income). The contract liability is derecognized when the promise is fulfilled and revenue is recorded in the profit or loss statement.
Revenue from rental income arising, from operating leases, is accounted for on a straight-line basis over the lease terms.
Interest is accounted for on accrual basis taking into account the actual investment return.
Interim Condensed Financial Information for the period ended June 30, 2018 (amounts in Euro, unless stated otherwise)
The following table summarizes the adjustments recognised for each individual line item of the statements of financial position on January 1, 2018, because of the adoption of IFRS 9 and IFRS 15:
| 31.12.2017 | IFRS 15 - TRANSITION ADJUSTMENT |
IFRS 9 - TRANSITION ADJUSTMENT |
1.1.2018 - RESTATED |
|
|---|---|---|---|---|
| ASSETS Non current assets |
||||
| Property, Plant and Equipment | 259,362,795.09 | - | - | 259,362,795.09 |
| Investment property | 734,338.38 | - | - | 734,338.38 |
| Intangible assets | 20,276.35 | - | - | 20,276.35 |
| Other non-current assets | 5,094,403.95 | - | - | 5,094,403.95 |
| Deferred tax assets | 8,609,824.57 | - | - | 8,609,824.57 |
| Total non current assets | 273,821,638.34 | - | - | 273,821,638.34 |
| Current assets | ||||
| Inventories | 2,313,380.54 | - | - | 2,313,380.54 |
| Trade and Other Receivables | 25,711,258.40 | - | (138,455.83) | 25,572,802.57 |
| Restricted cash Cash and cash equivalents |
213,267.48 61,862,169.21 |
- - |
- - |
213,267.48 61,862,169.21 |
| Total Current Assets | 90,100,075.63 | - | (138,455.83) | 89,961,619.80 |
| TOTAL ASSETS | 363,921,713.97 | - | (138,455.83) | 363,783,258.14 |
| EQUITY AND LIABILITIES Equity |
||||
| Share capital | 50,000,000.00 | - | - | 50,000,000.00 |
| Other reserves | 77,896,081.62 | - | - | 77,896,081.62 |
| Retained earnings | 58,003,358.11 | (230,650.00) | (138,455.83) | 57,634,252.28 |
| Total equity | 185,899,439.73 | (230,650.00) | (138,455.83) | 185,530,333.90 |
| Non-current liabilities | ||||
| Long-term borrowings | 62,499,999.99 | - | - | 62,499,999.99 |
| Government grants | 18,443,135.19 | - | - | 18,443,135.19 |
| Reserve for staff retirement indemnities | 11,391,297.02 | - | - | 11,391,297.02 |
| Provisions | 14,211,380.65 | - | - | 14,211,380.65 |
| Deferred income | 38,127,135.66 | - | - | 38,127,135.66 |
| Total Non-Current Liabilities | 144,672,948.51 | - | - | 144,672,948.51 |
| Current Liabilities | ||||
| Trade accounts payable | 3,687,754.18 | - | - | 3,687,754.18 |
| Contract liabilities Short term of long term borrowings |
- 6,000,000.00 |
230,650.00 - |
- - |
230,650.00 6,000,000.00 |
| Short-term leases | 68,507.93 | - | - | 68,507.93 |
| Income tax | 3,524,363.03 | - | - | 3,524,363.03 |
| Accrued and other current liabilities | 20,068,700.59 | - | - | 20,068,700.59 |
| Total Current Liabilities | 33,349,325.73 | 230,650.00 | - | 33,579,975.73 |
| Total liabilities | 178,022,274.24 | 230,650.00 | - | 178,252,924.24 |
| TOTAL LIABILITIES AND EQUITY | 363,921,713.97 | - | (138,455.83) | 363,783,258.14 |
The amendments introduce two approaches. The amended standard: a) gives all companies that issue insurance contracts the option to recognise in other comprehensive income, rather than profit or loss, the volatility that could arise when IFRS 9 is applied before the new insurance contracts standard is issued; and b) gives companies, whose activities are predominantly connected with insurance, an optional temporary exemption from applying IFRS 9 until 2021. The entities that have elected to defer the application of IFRS 9 continue to apply the existing financial instruments standard—IAS 39. The IFRS 4 is not applicable for the Company.
(amounts in Euro, unless stated otherwise)
The amendment clarifies the measurement basis for cash-settled, share-based payments and the accounting for modifications that change an award from cash-settled to equity-settled. It also introduces an exception to the principles in IFRS 2 that will require an award to be treated as if it was wholly equitysettled, where an employer is obliged to withhold an amount for the employee's tax obligation associated with a share-based payment and pay that amount to the tax authority. The IFRS 2 is not applicable for the Company.
The amendments clarified that to transfer to, or from, investment properties there must be a change in use. To conclude if a property has changed use there should be an assessment of whether the property meets the definition and the change must be supported by evidence.
The interpretation provides guidance on how to determine the date of the transaction when applying the standard on foreign currency transactions, IAS 21. The interpretation applies where an entity either pays or receives consideration in advance for foreign currency-denominated contracts. The IFRIC 22 is not applicable for the Company.
The amendments clarified that when venture capital organisations, mutual funds, unit trusts and similar entities use the election to measure their investments in associates or joint ventures at fair value through profit or loss (FVTPL), this election should be made separately for each associate or joint venture at initial recognition.
IFRS 16 "Leases" (effective for annual periods beginning on or after 1 January 2019).IFRS 16 has been issued in January 2016 and supersedes IAS 17. The objective of the standard is to ensure the lessees and lessors provide relevant information in a manner that faithfully represents those transactions. IFRS 16 introduces a single lessee accounting model and requires a lessee to recognise assets and liabilities for all leases with a term of more than 12 months, unless the underlying asset is of low value. IFRS 16 substantially carries forward the lessor accounting requirements in IAS 17. Accordingly, a lessor continues to classify its leases as operating leases or finance leases, and to account for those two types of leases differently.
The Company do not intend to adopt the standard before its effective date and they may use the exception for short-term and low-value leases.
The Company expects to recognise a significant amount of new assets and liabilities due to its exclusive right of use and exploitation of port zone land, buildings and facilities of Piraeus Port granted to the Company by the Greek State until 2052, in exchange of an annual percentage payment based on Company's income with a minimum annual fee of Euro 3.5 million.
IFRS 9 (Amendments) "Prepayment Features with Negative Compensation" (effective for annual periods beginning on or after 1 January 2019).The amendments allow companies to measure particular prepayable financial assets with so-called negative compensation at amortised cost or at fair value through other comprehensive income if a specified condition is met—instead of at fair value through profit or loss.
IFRS 17 "Insurance contracts" (effective for annual periods beginning on or after 1 January 2021).IFRS 17 has been issued in May 2017 and supersedes IFRS 4. IFRS 17 establishes principles for the recognition, measurement, presentation and disclosure of insurance contracts within the scope of the Standard and its objective is to ensure that an entity provides relevant information that faithfully represents those contracts. The new standard solves the comparison problems created by IFRS 4 by requiring all insurance contracts to be accounted for in a consistent manner. Insurance obligations will be accounted for using current values instead of historical cost. The standard has not yet been endorsed by the EU.
IAS 28 (Amendments) "Long term interests in associates and joint ventures" (effective for annual periods beginning on or after 1 January 2019).The amendments clarify that companies account for longterm interests in an associate or joint venture—to which the equity method is not applied—using IFRS 9. The amendments have not yet been endorsed by the EU.
IFRIC 23 "Uncertainty over income tax treatments" (effective for annual periods beginning on or after 1 January 2019).The interpretation explains how to recognise and measure deferred and current income tax assets and liabilities where there is uncertainty over a tax treatment. IFRIC 23 applies to all aspects of income tax accounting where there is such uncertainty, including taxable profit or loss, the tax bases of assets and liabilities, tax losses and credits and tax rates. The interpretation has not yet been endorsed by the EU.
IAS 19 (Amendments) "Plan amendment, curtailment or settlement" (effective for annual periods beginning on or after 1 January 2019).The amendments specify how companies determine pension expenses when changes to a defined benefit pension plan occur. The amendments have not yet been endorsed by the EU.
Annual Improvements to IFRS (2015 – 2017 Cycle) (effective for annual periods beginning on or after 1 January 2019).The amendments set out below include changes to four IFRSs. The amendments have not yet been endorsed by the EU.
The amendments clarify that a company remeasures its previously held interest in a joint operation when it obtains control of the business.
The amendments clarify that a company does not remeasure its previously held interest in a joint operation when it obtains joint control of the business.
The amendments clarify that a company accounts for all income tax consequences of dividend payments in the same way.
The amendments clarify that a company treats as part of general borrowings any borrowing originally made to develop an asset when the asset is ready for its intended use or sale.
The Company has not early adopted any standard, interpretation or amendment that has been issued but is not yet effective.
Interim Condensed Financial Information for the period ended June 30, 2018 (amounts in Euro, unless stated otherwise)
| Buildings | Machinery & equipment |
Motor vehicles | Furniture, fixtures and fittings |
Advances & Assets under construction |
Total | |
|---|---|---|---|---|---|---|
| COST | ||||||
| Balance January 1, 2017 | 226,054,079.93 | 165,014,047.17 | 16,359,617.27 | 7,083,597.91 | 6,705,137.93 | 421,216,480.21 |
| Additions | 738,954.46 | 125,538.00 | 2,266,628.98 | 361,570.88 | 14,300,396.04 | 17,793,088.36 |
| Disposals/ write off | - | - | (262,634.53) | (13,266.47) | - | (275,901.00) |
| Transfers | 18,498,261.16 | - | - | - | (18,498,261.16) | - |
| Balance December 31, | ||||||
| 2017 | 245,291,295.55 | 165,139,585.17 | 18,363,611.72 | 7,431,902.32 | 2,507,272.81 | 438,733,667.57 |
| Additions | 1,616,321.38 | 5,155.54 | - | 235,350.70 | 30,669,078.14 | 32,525,905.79 |
| Disposals/ write off | - | (352,16) | - | (7,160.90) | - | (7,513.06) |
| Transfers | 6,530,774.84 | 72,800.00 | - | 616,791.94 | (7,220,366.78) | - |
| Balance June 30, 2018 | 253,438,391.77 | 165,217,188.55 | 18,363,611.72 | 8,276,884.06 | 25,955,984.20 | 471,252,060.30 |
| DEPRECIATION | ||||||
| Depreciation January 1, | ||||||
| 2017 | (66,154,419.32) | (85,972,401.73) | (7,725,341.99) | (5,468,163.63) | - | (165,320,326.67) |
| Depreciation | (7,056,900.82) | (6,311,780.55) | (592,520.17) | (352,777.60) | - | (14,313,979.14) |
| Disposals/ write off | - | - | 262,634.13 | 799.20 | - | 263,433.33 |
| Depreciation December | ||||||
| 31, 2017 | (73,211,320.14) | (92,284,182.28) | (8,055,228.03) | (5,820,142.03) | - | (179,370,872.48) |
| Depreciation (Note 24) | (3,803,784.78) | (3,061,782.27) | (336,991.42) | (193,066.35) | - | (7,395,624.82) |
| Disposals/ write off | - | 352.15 | - | 7,160.69 | - | 7,512.84 |
| Depreciation June 30, | ||||||
| 2018 | (77,015,104.92) | (95,345,612.40) | (8,392,219.45) | (6,006,047.69) | - | (186,758,984.46) |
| NET BOOK VALUE | ||||||
| January 1, 2017 | 159,899,660.61 | 79,041,645.44 | 8,634,275.28 | 1,615,434.28 | 6,705,137.93 | 255,896,153.54 |
| December 31, 2017 | 172,079,975.41 | 72,855,402.89 | 10,308,383.69 | 1,611,760.29 | 2,507,272.81 | 259,362,795.09 |
| June 30, 2018 | 176,423,286.85 | 69,871,576.15 | 9,971,392.27 | 2,270,836.37 | 25,955,984.20 | 284,493,075.84 |
During the period ended June 30, 2018, the total investments of the Company's property, plant and equipment amounted to € 32,525,905.79 and referred mainly to the improvement of port infrastructure and delivery of a floating dock (at 01.01-30.06.2017 amounted to € 11,342,370.15). During the first semester of 2018, a total amount of € 1,169,212.07, which is related to the balance of the supplier who has undertaken the construction of the new oil terminal, was offset equally to its balance as a debtor.
There is no property, plant and equipment that have been pledged as security. The title of the capitalized leased assets has been retained by the lessor. The net book value of the Company's capitalized leased assets at June 30, 2018 and at December 31, 2017, amounted to € 182,160.48 and € 199,941.78 respectively.
Interim Condensed Financial Information for the period ended June 30, 2018 (amounts in Euro, unless stated otherwise)
According to the Greek tax law L.4334/GGΑ' 80/16.07.2015, the tax rate for the Societies Anonymes in Greece, is 29% (31.12.2017: 29%).
The amounts of income taxes which are anaysed as follows:
| 30/06/2018 | 30/06/2017 | |
|---|---|---|
| Current income tax | 5,023,358.51 | 2,169,337.15 |
| Deferred income tax | 415,633.33 | 2,005,858.95 |
| Total | 5,438,991.84 | 4,175,196.10 |
| Other Comprehensive Income | ||
| Deferred income taxes | (8,865.87) | (86,272.66) |
| Total | (8,865.87) | (86,272.66) |
Deferred taxes are defined as timing differences that exist in assets and liabilities between the accounting records and tax records (mainly provisions and differences in depreciation rates of fixed assets) and are calculated by applying the official tax rates.
The movement of deferred tax asset is analyzed as follows:
| 30/06/2018 | 31/12/2017 | |
|---|---|---|
| Opening balance | 8,609,824.57 | 12,532,939.52 |
| Income taxes credit | (415,633.33) | (4,230,012.99) |
| Income taxes debit– | ||
| Other Comprehensive Income | 8,865.87 | 306,898.04 |
| Closing balance | 8,203,057,11 | 8,609,824.57 |
The audit from the tax authorities for the years 2009 to 2010 was completed on 2/5/2017 and the final tax report notified to the Company on 9/6/2017. As a result of the tax audit, an amount of € 534,665.95 and € 260,699.41 arose for the years 2009 and 2010 respectively, for which the Company had adequately provided for in the past.
The tax audit for the financial years 2011 to 2016 was performed by the statutory auditors of the Company. The tax audit for 2017 financial year is in progress by the Company's statutory auditors. The tax certificate will be granted after the publication of the interim financial information.
During the prior year, the Company reassessed the deferred tax assets and proceeded with impairment by the amount of € 3,639,276.83 which relates to a deferred tax asset from a write-off of bad debts that is not expected to be offset in the future. An additional amount of deferred tax asset of € 991,878.25 on prior year provision for bad debts was recognized by the Company.
The deferred tax asset balance has been built mainly in previous years (before 2016) when the Company was operating under specific legislation Law 1559/1950 and Law 2688/1999. According to these the company believes that they have taken the ultimate possible measure for collecting a long outstanding receivable balance which is to assign those balances to tax department for collection. For such balances of € 25 million for which the company has recorded € 7,2 million deferred tax asset the Company intends to utilize this deferred asset when they will write off these balances in the future. That intention was declared in a notice letter to the Ministry of Finance but no response has been received yet. A response is critical for any future action to be determined by the Company.
Interim Condensed Financial Information for the period ended June 30, 2018 (amounts in Euro, unless stated otherwise)
This account consists of the following:
| 30/06/2018 | 31/12/2017 | |
|---|---|---|
| Guarantees to third parties | 322,087.75 | 319,987.75 |
| Car leases guarantees | 66,002.00 | 71,429.75 |
| Receivable from project contractor of Pier I | 3,152,683.35 | 3,535,442.31 |
| Less: Allowance for project contractor of Pier I | (315,268.33) | (353,544.23) |
| Receivable from compulsory seizure of municipality | 1,521,088.37 | 1,521,088.37 |
| Total | 4,746,593.14 | 5,094,403.95 |
The movement of the allowance for project contractor of Pier I is analyzed as follows:
| 30/06/2018 | 30/06/2017 | |
|---|---|---|
| Beginning balance | 353,544.23 | 416,852.02 |
| Provision reversal | (38,275.90) | (37,790.53) |
| Ending balance | 315,268.33 | 379,061.49 |
Receivables from project contractor of Pier I: This claim represents the difference found in incorrect data application on some review rates of the Ministry (IPEXODE) and was recognized by the project contractor of Pier I. At March 9, 2012 the Company and the project contractor of Pier I consigned an "extrajudicial agreement of debt acknowledgment", under which the requirement from the later will be paid in seven (7) instalments up to December 31, 2012. Then on the September 24, 2012, the request of the contractor of the project "Pier I' was partially approved and the debt settled in fourteen (14) monthly instalments starting from September 30, 2012 onwards until October 31, 2013.
Due to non-compliance of settlement, the PPA held in October 2013 in forfeiture contractor's guarantee letters for accrued interest of € 1.5 million and is expected to debate the re-settlement agreement instalments.
Furthermore, due to this non-compliance of settlement, the Company, through its Board of Directors, decided on the 24th of February 2014 to exercise any remedy and recourse to any procedure for the forced recovery of its claim.
Receivable from compulsory seizure of municipality: The Municipality of Piraeus proceeded to the compulsory seizure of the amount of € 6,285,940.08 against the Company, which concerns to municipal charges of cleaning and lighting as well as electrified land taxes over the past years that were imposed to the Company (Note 8). After the final court decisions issued during 2017, the Municipality of Piraeus was forced to return immediately (within 2018) the amount of € 4,764,851.71. For the remaining withheld amount of € 1,521,088.37, the final decision by the court is expected within 2019. On January 29, 2018, the Municipality of Piraeus deposited in favour of PPA the amount of € 4,608,844.90. According to the Company's Legal Department, the cancellation of all charges against the Company is expected considering the virtual certainty.
Interim Condensed Financial Information for the period ended June 30, 2018 (amounts in Euro, unless stated otherwise)
This account is analysed as follows:
| 30/06/2018 | 31/12/2017 |
|---|---|
| 1,115,280.29 | 986,554.71 |
| 1,367,681.13 | 1,326,825.83 |
| 2,482,961.42 | 2,313,380.54 |
The total cost of inventory consumption for the period ended June 30,2018 amounted to € 900,878.76 while that of the respective period ended June 30,2017 amounted to € 845,895.32 (Note 21). There was no inventory devaluation to their net realizable value.
This account is analysed as follows:
| 30/06/2018 | 31/12/2017 | |
|---|---|---|
| Trade Debtors | 59,817,875.65 | 50,129,181.41 |
| Less: Provision for doubtful debts | (39,280,302.33) | (39,698,921.72) |
| Total trade receivables | 20,537,573.32 | 10,430,259.69 |
| Personnel loans | 366,397.96 | 282,194.09 |
| Prepaid Expenses | 535,214.17 | 787,898.14 |
| Receivable from Greek State-Value Added Tax (VAT) | 2,947,558.82 | - |
| Advances to suppliers | 1,331,570.09 | 8,455,698. 00 |
| Other receivable | 2,048,193.47 | 6,625,283. 24 |
| Less: Provision for other receivables and advances | ||
| to suppliers | (2,204,043.54) | (870,074.76) |
| Total other receivables | 5,024,890.97 | 15,280,998.71 |
| Total trade and other receivables | 25,562,464.29 | 25,711,258.40 |
Trade receivables are interest bearing and are normally settled on 10 days' terms. One single customer represents 42% of the Company's total revenue (Note 20) (December 31, 2017: 39%). The outstanding amount of this customer as at June 30, 2018 amounted to € 7,648.33 (December 31, 2017: € 4,457.37).
The movement in the allowance for doubtful accounts receivable is analyzed as follows:
| 30/06/2018 | 30/06/2017 | |
|---|---|---|
| Beginning balance | 39,698,921.72 | 38,557,092.09 |
| Increase in allowance for doubtful accounts |
||
| receivables -Change in accounting policy (IFRS 9) | 138,455.83 | - |
| Provision for the period (Note 21) | 885,063.53 | - |
| Reversal of provision (Note 22) | (1,401,021.95) | - |
| Utilisation of provision | (41,116.80) | (380,956.37) |
| Ending balance | 39,280,302.33 | 38,176,135.72 |
On 1 January 2018, the Company applied the IFRS 9 simplified approach to measure expected credit losses (ECLs) on the trade and other receivables balances at the date of initial application. The result of the new requirements was an increase in the Company's impairment allowances of € 138.455.83 with a corresponding impact in the opening retained earnings.
The reversal of the provision of € 1,401,021.95 concerns two customers who, during the current period, repaid part of their debt and for which provision for doubtful debts had been made in prior years.
The provision utilized for the current period of € 41.116,80 relates to the write-off of a customer's debt based on a decision of the Managing Director and for which a provision for doubtful debts had been made in a previous year. The utilisation of the provision of € 380,956.37 relates to a decision of the Annual General Assembly of June 28, 2017, according to which it was decided the settlement of debts and the signing of contracts by these debtors for their extension of use of premises and in order to continue to operate in the repair zone of PPA S.A.
The movement in the allowance for doubtful other receivable is analyzed as follows:
| 30/06/2018 | |
|---|---|
| Beginning balance | 870,074.76 |
| Provision for the period (Note 21) | 1,333,968.78 |
| Ending balance | 2,204,043.54 |
During the current period and according to the assessment of the likely outcome of the claim from the Company's Legal Department, an additional provision of € 1,333,968.78 was recorded, of which € 870.074,76 concerns the claim from the Municipality of Drapetsona and the remaining amount of € 463.894,02 concerns advances to suppliers.
Personnel loans: The Company provides interest-free loans to its personnel. The loan amount per employee does not exceed approximately € 3,000.00 and loan repayments are made by withholding monthly installments from the employee salaries.
Other receivable: Other receivable includes the short term of the compulsory seizure of Piraeus municipality (Note 6) amounted to € 156,006.81 (31.12.2017: € 4,764,851.71), following the receipt of € 4,608,844.90 on January 29, 2018 from the Municipality of Piraeus (Note 6).
Advances to suppliers: The balance receivable from advances to suppliers as at December 31, 2017 mainly relates to an advance of € 7,150,500.00 for the purchase of floating dock (Note 28). The floating dock has been delivered during 2018 (Note 4).
Cash and cash equivalents are analyzed as follows:
| 30/06/2018 | 31/12/2017 | |
|---|---|---|
| Cash in hand | 64,236.86 | 96,576.52 |
| Cash at banks and time deposits | 48,089,601.01 | 61,765,592.69 |
| Total | 48,153,837.87 | 61,862,169.21 |
| Restricted cash | 213,267.48 | 213,267.48 |
| Total | 48,367,105.35 | 62,075,436.69 |
Cash at banks earns interest at floating rates based on monthly bank deposit rates. Interest earned on cash at banks and time deposits is accounted for on an accrual basis and for the period ended June 30, 2018, amounted to € 221,318.34 (for the period ended June 30, 2017, amounted to € 139,517.97) and is included to financial income in the statement of comprehensive income .
Furthermore restricted cash of € 213,267.48 refers to compulsory seizure of Company's deposits, in favor of a municipality against which there are pending trials.
The Company's share capital amounts to € 50,000,000.00, fully paid up and consists of 25,000,000 ordinary shares, of nominal value € 2.00 each. In the Company's share capital there are neither shares which do not represent Company's capital nor bond acquisition rights.
Reserves are analyzed as follows:
| 30/06/2018 | 31/12/2017 | |
|---|---|---|
| Statutory reserve | 9,609,052.09 | 9,609,052.09 |
| Special tax free reserve L. 2881/2001 | 61,282,225.52 | 61,282,225.52 |
| Specially taxed income reserve | 728,128.36 | 728,128.36 |
| Taxed reserve L. 4171/2013 art. 72 | 6,087,915.56 | 6,087,915.56 |
| Taxed reserve based on general provisions | 188,760.09 | 188,760.09 |
| Total | 77,896,081.62 | 77,896,081.62 |
Statutory reserve: Under the provisions of Greek corporate Law companies are obliged to transfer at least 5% of their annual net profit, as defined, to a statutory reserve, until the reserve equals the 1/3 of the issued share capital. The reserve is not available for distribution throughout the Company activity.
Special tax free reserve Law 2881/2001: This reserve was created during the PPA S.A. conversion to a Societé Anonyme. The total Company net shareholder funds (Equity) was valued, by the article 9 Committee of the Codified Law 2190/1920, at € 111.282.225,52, € 50.000.000,00 out of which was decided by Law 2881/2001 to form the Company share capital and the remaining € 61.282.225,52 to form this special reserve.
Untaxed or specially taxed income reserve: This is interest income which was either not taxed or taxed by withholding 15% tax at source. In case these reserves are distributed, they are subject to tax on the general income tax provision basis. Based on Article 72 par.11 of Law 4172/2013 those reserves are subject (from 1 January 2014) to an independent taxation at a rate of 19%. On December 30th, 2014, the Company proceed to the taxation of those reserves which amounted to € 1,428,029.58. After the tax deduction the taxed reserves of Article 72 N.4172/2013 and the taxed reserve with the general provisions amounting to € 6,087,915.56 and € 188,760.09 respectively were created.
The movement of government grants is analyzed as follows:
| 30/06/2018 | 31/12/2017 | |
|---|---|---|
| Initial value | 28,641,523.86 | 28,655,259.25 |
| Additions for the period | - | (13,735.39) |
| Closing value | 28,641,523.86 | 28,641,523.86 |
| Accumulated amortisation | (10,637,585.52) | (10,198,388.67) |
| Net Book Value | 18,003,938.34 | 18,443,135.19 |
Grants received up to December 31, 2011 relate to the requirements of the Olympic Games of 2004 (€ 11,400,000.00) and on the construction of infrastructure for the OSE S.A. port station (€ 3,700,000.00).
Also, a grant of € 3,653,518.80 has been received in 2012 and is divided in a) € 2,536,168.80, which relates to the widening of the quay Port Alon and b) € 1,117,350.00 for the construction of new dock at the area of Agios Nikolaos in the central port of Piraeus, under the operational program "Improvement of accessibility-energy" of the Attica region. According to a decision of Attica Region issued during 2017, it
was decided to return the amount of € 13,735.39 for the correction of the subsidy for the project "Widening of the quay Port Alon " of the total € 3,653,518.80 collected back in 2012.
Finally, a grant amounted to € 9,901,740.45 has been received in December 2013 and relates to the operational program "Support Accessibility" of the Ministry of Infrastructure, Transport and Network and in particular, in two projects which have been completed.
There are no other obligations regarding the received grants.
Provisions are analyzed as follows:
| 30/06/2018 | 31/12/2017 | |
|---|---|---|
| Provisions for legal claims by third parties | 13,700,138.90 | 14,211,380.65 |
| Total | 13,700,138.90 | 14,211,380.65 |
The Company has made provisions for various pending court cases as at June 30, 2018 amounting to € 13,700,138.90 for lawsuits from personnel and other third party.
The movement of the provision is as follows:
| 30/06/2018 | 30/06/2017 | |
|---|---|---|
| Opening balance | 14.211.380,65 | 15.861.054,00 |
| Provision for the period (Note 21) | 1,283,209.17 | - |
| Reversal of provision (Note 22) | (1,572,290.55) | (189.415,00) |
| Provision used | (222,160.37) | - |
| Closing balance | 13,700,138.90 | 15.671.639,00 |
The movement of the provision relates mainly to legal cases which have been reassessed by the Company's legal department or finalized in favor of the Company.
The relevant provision movement for the period ended on June 30, 2018 and the financial year ended December 31, 2017 is as follows:
| Liability in Statement of Financial Position 31.12.2016 | 11,618,207.02 | ||
|---|---|---|---|
| Current cost of Employment | 522,200.00 | ||
| Interest cost on liability | 224,231.40 | ||
| Gain from financial assumption change-OCI | (155,851.00) | ||
| Experience loss-OCI | 1,214,120.10 | ||
| Benefits paid | (2,031,610.50) | ||
| Liability in Statement of Financial Position 31.12.2017 | 11,391,297.02 | ||
| Current cost of Employment | 258,059.00 | ||
| Interest cost on liability | 109,926.02 | ||
| Loss from financial assumption change-OCI | 30,571.98 | ||
| Benefits paid | (240,000.00) | ||
| Liability in Statement of Financial Position 30.06.2018 | 11,549,854.02 | ||
| 30/06/20188 | 31/12/2017 | The principal actuarial | |
| Discount Rate | assumptions used are | ||
| 1.93% | 1.93% | ||
| Salaries increase | 0.00% | 0.00% | as follows: |
| Average annual growth rate of long-term inflation | 2.00% | 2.00% |
The Long term borrowings as at June 30, 2018 and December 31, 2017 respectively, are as follows:
| 30/06/2018 | 31/12/2017 | |
|---|---|---|
| Total of Long-term borrowings | 65,499,999.99 | 68,499,999.99 |
| Less: Short term portion of long-term borrowings | 6,000,000.00 | 6,000,000.00 |
| Long term portion | 59,499,999.99 | 62,499,999.99 |
Balance included in the following loans between the Company and the European Investment Bank:
1. Loan of € 35,000,000.00 for the construction of Container Terminal Pier I, issued on 30/7/2008.
The repayment of the loan will be in thirty (30) semi-annual installments, payable from December 15, 2013 up to and including June 15, 2028. As amended in October 2, 2017 the loan bears an annual interest rate, that is the sum of a variable interest rate and a margin of 0.25% which is payable quarterly.
From this contract there are obligations and restrictions for the Company, the most important of which are summarized as follows: (i) to submit the annual financial statements within 1 month of publication along with a Certificate of Compliance audited by a recognized firm of certified auditors, and (ii) to hold throughout the duration of the loan and until fully repaid, the following financial ratios, calculated on annual financial statements, audited by certified auditors, for each financial year:
The repayment of the loan will be in thirty (30) semi-annual installments, payable from 15 June 2015 up to and including 15 December 2029. As amended in October 2, 2017 the loan bears an annual interest rate, that is the sum of a variable interest rate and a margin of 0.25% which is payable quarterly.
From this contract there are obligations and restrictions for the company, the most important of which are summarized as follows: (i) to submit the annual financial statements within 1 month of publication along with a Certificate of Compliance audited by a recognized firm of certified auditors, and (ii) to hold throughout the duration of the loan and until fully repaid, the following financial ratios, calculated on annual financial statements, audited by certified auditors, for each financial year:
On September 26, 2017 a Guarantee Issuance Facility Agreement was signed between the Company and the ''Export Import Bank of China'', in respect of the issuance of guarantees of an initial amount of € 75.074.999,99 to support the loans from the European Investment Bank outstanding debt. The amount of guarantee is variable and is based on an amortization table linked to the total outstanding balance of both loans agreements. On June 30, 2018 based on the amortization table the guarantee for both loans amounted to € 68,775,000.00. The guarantee bears an issuance fee of zero point six per cent (0.6%) of the relevant maximum guarantee amount.
Total interest expenses on long-term loans for the periods ended June 30, 2018 and 2017, amounted to € 102,936.40 and € 45,353.17 respectively and are included in financial expenses (Note 23).
The Company has a credit line available for € 50,000,000.00 with National Bank of Greece valid until September 28, 2018. The credit line bears annual variable interest rates of Euribor, plus margin 3.75%. The Company has not utilised any amount under the overdraft agreement.
Proposal for distribution of dividend for the year 2017: The Company's General Assembly of the Shareholders approved on June 22,2018 the proposal of the Board of Directors for a dividend distribution, for the fiscal year 2017, amounted to € 4,280,000.00 or € 0.1712 per share (2016: € 2,230,000.00 or € 0.0892 per share). A withholding tax will be calculated according to the relevant tax rate. The dividend for the year 2017 was paid on July 25, 2018.
This account is analyzed as follows:
| 30/06/2018 | 31/12/2017 | |
|---|---|---|
| Taxes payable (except Income taxes) | 1,013,260.60 | 2,281,593.35 |
| National insurance and other contribution | 1,866,637.54 | 2,392,501.33 |
| Salaries Payable | 322,215.35 | 294,757.41 |
| Concession Agreement Payment | 2,416,285.44 | 4,138,881.92 |
| Other Creditors | 543,592.12 | 1,514,693.48 |
| Other Third Party Short-term obligations | 1,125,519.35 | 1,525,889.26 |
| Regulatory Authority for Ports | 565,172.03 | 356,858.84 |
| Greek State committed dividends | 804,000.00 | 804,000.00 |
| Liability to "Loan and Consignment Fund" | 77,271.48 | 77,271.48 |
| Customer advance payments | 3,732,537.50 | 4,550,351.40 |
| Indemnity for untaken leave | 486,589.31 | 486,589.31 |
| Provision for employee's voluntary retirement | ||
| incentives (Note 25) | 832,500.00 | 787,500.00 |
| Dividends payable(Note 16) | 4,280,000.00 | - |
| Accrued expenses | 1,837,150.74 | 857,812.81 |
| Total | 19,902,731.46 | 20,068,700.59 |
Taxes Payable: Current period amount consists of: a) Value Added Tax € 0 (December 31, 2017: € 961,534.39), b) Employee withheld income tax € 888,727.51 (December 31, 2017: € 1,095,321.01 and c) other third party taxes € 124,553.09 (December 31, 2017: € 224,737.95). The Company has a VAT receivable of € 2,947,558.82 at June 30, 2018 (Note 8).
Concession Agreement Liability: The amount is calculated as 3.5% on total revenues of the year excluding finance income.
The Company receives payments in advance for services rendered on an ordinary basis, which are then settled on a regular basis. Customer payments in advance amounted to € 3,732,537.50 (December 31, 2017: € 4,550,351.40).
a) On April 27, 2009 "PCT S.A." paid € 50,000,000.00 as a one-off consideration for the use of port facilities of Piers II and III of SEMPO of PPA (N.3755/2009). From the aforementioned amount, € 2,930,211.41 was offset with the cost of supplies and parts provided by PCT S.A., while the remaining amount of € 47,069,788.59 is amortized over the concession period.
On August 2009, PPA S.A received from PCT S.A. three letters of guarantee amounted to € 61.4 million, € 21.0 million and € 42.0 million respectively for the concession agreement, the upgrade of PIER I and the construction of PIER II respectively. On September 2016, the last letter of guarantee reduced by 50% upon completion of the project construction of the eastern side of PIER III.
The initial concession period is thirty (30) years, which may be increased to thirty five (35) years, provided that PCT S.A. completes the construction of the port infrastructure on the east side of Pier III. Following the transfer of the cumulative amount € 11,767,447.13 on revenue of the years 2009 until June 30, 2018 the new balance at June 30, 2018 amounted to € 35,302,341.46 (December 31, 2017: € 35,974,767.01).
b) The Company receives Fixed Annual Consideration from PCT S.A based on the length and surface of concessed land. Fixed Annual Considerations is invoiced in advance in April and October of each fiscal year. As a result the Company has recognized a deferred revenue of € 2,210,308.47 and € 2,152,368.65 as at June 30, 2018 and December 31, 2017 respectively.
| 39,430,497.87 |
|---|
| (1,344,851.10) |
| (2,110,879.76) |
| 2,152,368.65 |
| 38,127,135.66 |
| (672,425.55) |
| (2,152,368.65) |
| 2,210,308.47 |
| 37,512,649.93 |
c) Additionally as at June 30, 2018, deferred income includes an amount of € 36,283.19 which relates to the deferred income from rentals.
The Company operates in Greece, regardless of the fact that its clientele includes international companies. Additionally, the Company has no other commercial or industrial activities other than the provision of services solely in the Port area and does not have income or assets from foreign customers (based on the geographical area in which they operate).
The port of Piraeus is a port complex activities, putting work in many areas of port activity , such as containers Car-terminal, shipping, cruise, Ro-Ro, ship repairing, environmental and logistics services.
It is the main port of coastal connecting mainland Greece and the islands, the main cruise port service in the country , the main port container , the main car – terminal port of the country.
The PPA SA provides all the requested port services: water, fuel oil, solid and liquid slot tankers, jack residual oil, electricity, fiber optics and internet, victuals, repairs, environmental services and is fully connected to all activities with modern computer systems.
The management of PPA SA monitors at the level of results of the above activities and takes business decisions based on the implemented internal management information system.
Based on the above and in accordance with the provisions of IFRS 8, the Company has determined to disclose the following segments:
The other segments include activities representing less than 10 % of total revenue and profit in all segments and therefore are not disclosed as separate operating segments.
The Company level, includes revenues and expenses that are not allocated by operating segment because management monitors them at entity level.
Management does not make business decisions and does not monitor periodically the assets and liabilities of the business sectors and for this reason does not make the relevant disclosures as required by the provisions of IFRS 8.
The segment information for the period ended June 30, 2018 and June 30, 2017, is analysed as follows:
| CONTAINER TERMINAL | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| CONTAINER TERMINAL |
CONSESSION ARRANGEMENT |
CAR TERMINAL | COASTING | CRUISE | SHIP REPAIRING (TANKS AND DOCK) |
OTHER SEGMENTS | COMPANY | TOTAL | |
| 30.06.2018 | OPERATION | PIER II&III | |||||||
| Revenues | 12,293,230.25 26,833,105.24 | 7,900,570.35 | 4,481,951.20 | 3,866,643.47 | 4,710,621.02 | 3,428,293.02 | - | 63,514,414.55 | |
| Cost of sales | (16,975,360.54) (2,214,509.19) | (4,574,599.45) | (3,329,935.59) (3,099,408.98) (2,881,145.68) (3,683,392.95) | - | (36,758,352.38) | ||||
| Gross profit/(loss) | (4,682,130.29) 24,618,596.05 | 3,325,970.90 | 1,152,015.61 | 767,234.49 | 1,829,475.34 | (255,099.93) | - | 26,756,062.17 | |
| Other expenses | (1,707,732.11) (3,744,247.34) | (1,095,317.05) | (612,085.07) | (484,347.26) (721,643.29) (628,914.75) (4,515,833.51) | (13,510,120.37) | ||||
| Other income | - | - | - | - | - | 445,571.00 | 1,399,416.31 | 3,677,325.06 | 5,522,312.37 |
| Financial income | - | - | - | - | - | - | - | 401,034.76 | 401,034.76 |
| Financial expenses | (331,746.24) | - | - | - | - | - | - | (138,941.19) | (470,687.43) |
| Profit / (loss) before income taxes | (6,721,608.64) 20,874,348.71 | 2,230,653.85 | 539,930.54 | 282,887.23 | 1,553,403.05 | 515,401.63 | (576,414.88) | 18,698,601.50 | |
| Income taxes | - | - | - | - | - | - | - (5,438,991.84) | (5,438,991.84) | |
| Net profit/(loss) after taxes | (6,721,608.64) 20,874,348.71 | 2,230,653.85 | 539,930.54 | 282,887.23 | 1,553,403.05 | 515,401.63 (6,015,406.72) | 13,259,609.66 | ||
| Depreciation and amortisation | 2,763,591.81 | 1,326,737.74 | 298,352.89 | 601,467.79 | 709,186.58 | 554,067.96 | 708,052.94 | - | 6,961,457.71 |
| Earnings/ (Losses) before income taxes, interest, | |||||||||
| depreciation and amortisation | (3,626,270.59) 22,201,086.45 | 2,529,006.74 | 1,141,398.33 | 992,073.82 | 2,107,471.02 | 1,223,454.57 | (838,508.45) | 25,729,711.88 |
| CONTAINER TERMINAL | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| CONTAINER TERMINAL |
CONSESSION ARRANGEMENT |
CAR TERMINAL | COASTING | CRUISE | SHIP REPAIRING (TANKS AND DOCK) |
OTHER SEGMENTS | COMPANY | TOTAL | |
| 30.06.2017 | OPERATION | PIER II&III | |||||||
| Revenues | 10,238,633.94 20,713,313.39 | 6,091,188.70 | 4,321,618.62 | 4,294,746.14 | 3,176,394.46 | 3,202,861.79 | - | 52,038,757.04 | |
| Cost of sales | (17,535,254.66) (2,163,719.72) | (4,443,976.25) | (3,495,483.00) (3,591,406.85) (2,851,541.18) (3,633,862.50) | - | (37,715,244.16) | ||||
| Gross profit/(loss) | (7,296,620.72) 18,549,593.67 | 1,647,212.45 | 826,135.62 | 703,339.29 | 324,853.28 | (431,000.71) | - | 14,323,512.88 | |
| Other expenses | (1,552,301.94) (2,997,062.85) | (917,312.00) | (646,195.69) | (653,579.39) (485,642.44) (689,478.97) (1,600,511.51) | (9,542,084.78) | ||||
| Other income | - | - | - | - | - | 178,167.88 | 1,622,290.42 | 1,924,023.21 | 3,724,481.51 |
| Financial income | - | - | - | - | - | - | - | 383,219.94 | 383,219.94 |
| Financial expenses | (45,901.00) | - | - | - | - | - | - | (228,053.89) | (273,954.89) |
| Profit / (loss) before income taxes | (8,894,941.64) 15,552,479.24 | 729,850.72 | 179,864.00 | 49,675.66 | 17,330.92 | 501,735.02 | 479,180.74 | 8,615,174.66 | |
| Income taxes | - | - | - | - | - | - | - (4,175,196.10) | (4,175,196.10) | |
| Net profit/(loss) after taxes | (8,894,941.64) 15,552,479.24 | 729,850.72 | 179,864.00 | 49,675.66 | 17,330.92 | 501,735.02 (3,696,015.36) | 4,439,978.56 | ||
| Depreciation and amortisation | 2,856,317.59 | 1,509,974.18 | 278,470.79 | 553,151.86 | 733,664.36 | 401,869.04 | 329,860.85 | - | 6,663,308.67 |
| Earnings/ (Losses) before income taxes, interest, | |||||||||
| depreciation and amortisation | (5,992,723.05) 17,062,453.42 | 1,008,321.51 | 733,015.86 | 783,340.02 | 419,199.96 | 831,595.87 | 324,014.69 | 15,169,218.27 |
Interim Condensed Financial Information for the period ended June 30, 2018 (amounts in Euro, unless stated otherwise)
Revenues are analyzed as follows:
| 1/1-30/06/2018 | 1/1-30/06/2017 | |
|---|---|---|
| Revenue from: | ||
| Loading and Unloading | 15,378,118.32 | 12,850,123.14 |
| Storage | 1,851,541.36 | 1,311,126.79 |
| Supply of water | 1,141,930.19 | 1,116,207.46 |
| Dry docking services | 2,472,381.85 | 1,050,174.76 |
| Cruise services | 2,450,415.98 | 2,631,484.99 |
| Ferry services | 3,362,502.96 | 3,147,044.14 |
| Environmental services | 1,172,134.95 | 1,189,089.64 |
| Mooring services | 4,281,090.54 | 4,346,875.90 |
| Ship repair zone services | 2,238,239.17 | 2,126,219.24 |
| Other supporting services | 2,210,441.62 | 1,437,514.96 |
| Revenue from concession of liquid wastes' collection and | ||
| transportation | 122,512.38 | 119,582.64 |
| Total | 36,681,309.32 | 31,325,443.66 |
| Revenue from Fixed and Variable Consideration: | ||
| Revenue from concession agreement Pier ΙΙ+ΙΙΙ | 26,134,167.68 | 20,019,975.83 |
| Other income from concession agreement Pier ΙΙ+ΙΙΙ | 698,937.55 | 693,337.55 |
| Total | 63,514,414.55 | 52,038,757.04 |
The increase in revenue from the concession Piers II + III is due to the increase in Consolidated Income of PCT S.A. of the prior contractual year which forms the basis of variable consideration received.
Expenses (cost of sales and administrative expenses) are analyzed as follows:
| 01/01-30/06/2018 | 01/01-30/06/2017 | |
|---|---|---|
| Payroll and related costs (Note 25) | 28,779,140.61 | 30,182,667.39 |
| Third party fees | 326,474.58 | 708,014.42 |
| Third party services | 4,557,943.41 | 3,641,943.88 |
| Concession agreement fee | 2,416,285.44 | 2,070,126.05 |
| Depreciation- Amortisation (Note 24) | 6,961,457.71 | 6,663,308.67 |
| Taxes and duties | 384,446.04 | 261,330.99 |
| General expenses | 2,018,997.68 | 1,958,477.27 |
| Provision for doubtful trade receivables (Note 8) | 885,063.53 | - |
| Provisions for compensation of beneficiaries L.4331/2015 | - | 78,907.04 |
| Provision for pending lawsuits (Note 13) | 1,283,209.17 | - |
| Provision for doubtful other receivables (Note 8) | 1,333,968.78 | - |
| Cost of sales of inventory and consumables | 900,878.76 | 845,895.32 |
| Total | 49,847,865.71 | 46,410,671.03 |
| The above expenses are analyzed as follows: | ||
| 01/01-30/06/2018 | 01/01-30/06/2017 | |
| Cost of sales | 36,758,352.38 | 37,715,244.16 |
| Administrative expenses | 13,089,513.33 | 8,695,426.87 |
| Total | 49,847,865.71 | 46,410,671.03 |
| 01/01-30/06/2018 | 01/01-30/06/2017 | |
|---|---|---|
| Rental income | 1,691,297.94 | 1,660,807.08 |
| Income from European Union's programs | 305,239.13 | 557,566.00 |
| Income from reversal of legal provisions (Note 13) | 1,572,290.55 | 189,415.00 |
| Income from unused provisions | - | 704,634.64 |
| Income from reversal of bad debt provisions | ||
| (Note 8) | 1,401,021.95 | - |
| Various other operating income | 552,462.80 | 612,058.79 |
| Total | 5,522,312.37 | 3,724,481.51 |
Rental income concerns land and building rents.
| 01/01-30/06/2018 | 01/01-30/06/2017 | |
|---|---|---|
| Third parties compensation | 105,705.98 | 537,860.34 |
| Research and development cost | 29,875.00 | 36,000.00 |
| Losses on sale of fixed assets | 4,316.36 | 4,316.36 |
| Other expenses | 280,709.70 | 268,481.21 |
| Total | 420,607.04 | 846,657.91 |
The amounts are analyzed as follows:
| 01/01-30/06/2018 | 01/01-30/06/2017 | |
|---|---|---|
| Interest income and related financial income | 221,318,34 | 139,517.97 |
| Interest expense and related financial expenses | (470,687.43) | (273,954.89) |
| Total | (249,369.09) | (134,436.92) |
| Interest income from overdue balances | 179,716.42 | 243,701.97 |
| Total | 69,652.67 | 109,265.05 |
The amounts are analyzed as follows:
| 01/01-30/06/2018 | 01/01-30/06/2017 | |
|---|---|---|
| Depreciation of property, plant and equipment | 7,395,624.84 | 7,091,197.07 |
| Amortisation of intangible assets | 5,029.72 | 11,480.34 |
| Amortization grants (Note 12) | (439,196.85) | (439,368.74) |
| Total | 6,961,457.71 | 6,663,308.67 |
The amounts are analyzed as follows:
| 01/01-30/06/2018 | 01/01-30/06/2017 | |
|---|---|---|
| Wages and salaries (including directors remuneration - note 28) |
22,212,327.09 | 22,962,554.69 |
| Social security costs | 5,444,090.33 | 5,688,256.21 |
| Other staff costs | 507,238.17 | 450,207.21 |
| Employee retirement incentives | 247,500.00 | 707,205.70 |
| Provision for staff leaving indemnities | 367,985.02 | 374,443.58 |
| Total | 28,779,140.61 | 30,182,667.39 |
The Company announced during the prior year the offer of voluntary retirement incentives to those employees who are close to retirement date. Until December 31, 2017 75 employees have used the incentives (€ 1,715,757.12) and a provision was made for another 35 employees who announced their intention to use the incentive in 2018 (€ 787,500).
During the current period, the incentives were used by 7 employees and 1 worker for whom the provision was made as of December 31, 2017. An additional provision amounted to € 225,000.00 for 9 employees and 1 worker was recorded in the current period. The rest of the provision for retirement incentives as at 30 June 2018 amounts to € 832,500.00 (note 17).
The amounts are analyzed as follows:
| 01/01-30/06/2018 | 01/01-30/06/2017 | |
|---|---|---|
| Profit for the period | 13,259,609.66 | 4,439,978.56 |
| Weighted number of shares | 25,000,000.00 | 25,000,000.00 |
| Earnings per share | 0.5304 | 0.1776 |
i) The Company has entered into commercial operating lease agreements for the lease of transportation means. These lease agreements have an average life of 3 to 5 years with renewal terms included in certain contracts. Future minimum rentals payable under noncancellable operating leases as at June 30, 2018 are as follows:
| June 30 2018 |
|
|---|---|
| Within one year | 149,161.38 |
| 2-5 years | 26,259.52 |
| Total | 175,420.90 |
ii) The Greek State transfers its exclusive right of use and exploitation of port zone land, buildings and facilities of Piraeus Port to the Company until 2052, in exchange of an annual percentage payment based on Company's income. Based on the new Concession Agreement signed on 24/6/2016 the percentage to Greek State increased to 3.5% of the Company's consolidated annual income (except financial income) and the annual minimum payment is 3.5 million annually. Future minimum concession agreement payable as at June 30, 2018 is as follows:
| June 30 | ||
|---|---|---|
| 2018 | ||
| Within one year | 3,500,000.00 | |
| Between 2-5 years | 14,000,000.00 | |
| Over 5 years | 103,250,000.00 | |
| Total | 120,750,00.00 |
Future minimum rentals receivable: Future minimum rentals receivable, under non-cancellable operating leases as at June 30, 2018 are as follows:
| June 30, | ||
|---|---|---|
| 2018 | ||
| Within one year | 1,694,562.54 | |
| 2-5 years | 2,712,849.10 | |
| Over 5 years | 14,722,103.67 | |
| Total | 19,129,515.31 |
(d) Contractual commitments: The outstanding balance of the contractual commitments with suppliers on significant infrastructure projects (construction, maintenance, improvements, etc.) at June 30, 2018 amounted to approximately € 2.5 million (December 31, 2017: approximately € 17.9 million).
(amounts in Euro, unless stated otherwise)
The Company provides services to certain related parties in the normal course of business. The Company's transactions and account balances with related companies are as follows:
| Related party | Relation with the Company |
Period ended |
Sales to related parties |
Purchases from related parties |
|---|---|---|---|---|
| PIRAEUS CONTAINER | 30.06.2018 | 26,833,105.23 | 1,169,212.07 | |
| TERMINAL SA | Related Party | 30.06.2017 | 20,715,685.72 | 10,757,113.95 |
| COSCO (Shanghai) | 30.06.2018 | - | 23,835,000.00 | |
| SHIPYARD Co LTD | Related Party | 30.06.2017 | - | - |
| COSCO SHIPPING LINES | 30.06.2018 | 61,043.29 | 1,000.00 | |
| GREECE S.A. | Related Party | 30.06.2017 | 9,470.65 | - |
| 30.06.2018 | 20,044.93 | 1,000.00 | ||
| PCDC S.A. | Related Party | 30.06.2017 | - | - |
| COSCO (HONG KONG) | 30.06.2018 | - | 418,306.44 | |
| INSURANCE BROKERS | Related Party | |||
| L.T.D. | 30.06.2017 | - | 345,000.00 | |
| Total | 30.06.2018 | 26,914,193.45 | 25,423,518.51 | |
| Total | 30.06.2017 | 20,725,156.37 | 11,102,113.95 |
Interim Condensed Financial Information for the period ended June 30, 2018 (amounts in Euro, unless stated otherwise)
| Relation with | Year/Period | from related | Amounts due to |
|---|---|---|---|
| the Company | ended | parties | related parties |
| Related Party | 30.06.2018 | 8,123,672.74 | - 5,890.33 |
| - | |||
| 94,616.63 | |||
| Related Party | 6,000.51 | ||
| 31.12.2017 | - | - | |
| Related Party | 30.06.2018 | - | 2,383,500.00 |
| 31.12.2017 | 7,150,500.00 | - | |
| Related Party | 30.06.2018 | - | 180.00 |
| 31.12.2017 | - | 12,976.00 | |
| Total | 30.06.2018 | 8,127,066.94 | 2,389,680,51 |
| Total | 31.12.2017 | 9,680,885.67 | 113,482.96 |
| Related Party | 31.12.2017 30.06.2018 31.12.2017 30.06.2018 |
Amounts due 2,530,385.67 294.20 - 3,100.00 |
The revenues and receivables from Piraeus Container Terminal S.A. (PCT S.A.) are related to the fixed and variable revenue from the concession agreement (PIER II & III). PCT S.A. is considered as a related party after the acquisition of the majority stake of PPA S.A by the COSCO SHIPPING (Hong Kong) Limited on August 10, 2016. Expenses from PCT S.A. related to invoices to PPA S.A. for the construction of the petroleum pier that has been undertaken by a contractor through PCT S.A.
Τhe transaction with COSCO (HONG KONG) INSURANCE BROKERS L.T.D. relates to the insurance coverage of PPA S.A. regarding third party liability, employer' s liability, property and business interruption and directors and officers liability for the period 1.1-31.12.2018, according to article 17 of the Concession Agreement (Greek Law 4404/2016).
The balance with COSCO (Shanghai) SHIPYARD Co LTD for the year ended December 31, 2017 relates to a payment in advance for the purchase of a floating dock intended to locate at Perama Ship Repair Yard based on a contract signed on September 4, 2017. In the current period the floating dock has been invoiced and delivered but not still in full operational status. The amount due as at June 30, 2018 concerns the same transaction.
Board of Directors Members Remuneration: For the period ended on June 30, 2018, remuneration and attendance costs, amounting to € 288,286.78 (June 30, 2017: € 120,780.45) were paid to the Board of Directors members. Furthermore during the period ended June 30, 2018 emoluments of € 178,615.10 (June 30, 2017: € 207,636.05) were paid to Managers/Directors for services rendered.
Fair Value: The carrying amounts reflected in the accompanying sheets of financial position for cash and cash equivalents, trade and other accounts receivable, prepayments, trade and other accounts payable and accrued and other current liabilities approximate their respective fair values due to the relatively short-term maturity of these financial instruments.
The fair value of variable rate loans and borrowings approximate the amounts appearing in the statements of financial position.
The Company categorized its financial instruments carried at fair value in three categories, defined as follows:
Level 1: Quoted (unadjusted) values from active financial markets for identical negotiable assets or liabilities.
Level 2: Other techniques for which all inflows that have a significant impact on the recorded fair value are identified or determined directly or indirectly from active financial markets.
Level 3: Techniques that use inflows that have a significant impact on the recorded fair value and are not based on quoted prices from active financial markets.
During the period ended June 30, 2018, there were no transfers between Level 1 and Level 2 fair value measurements, and no transfers into and out of Level 3 fair value measurements.
As at June 30, 2018 and December 31, 2017, the Company held the following financial instruments measured at fair value:
| June 30, 2018 | Level 1 | Level 2 | Level 3 | Total |
|---|---|---|---|---|
| Financial liabilities | ||||
| Interest bearing loans and borrowings | ||||
| (including short term portion) | - | 65,499,999.99 | - | 65,499,999.99 |
| December 31, 2017 | Level 1 | Level 2 | Level 3 | Total |
| Financial liabilities | ||||
| Interest bearing loans and borrowings | ||||
| (including short term portion) | - | 68,499,999.99 | - | 68,499,999.99 |
There are no subsequent events after June 30, 2018 that may significantly affect the Company's financial position.
Piraeus, September 26, 2018
CHAIRMAN OF THE BOARD OF DIRECTORS And MANAGING DIRECTOR
MEMBER OF THE BOARD OF DIRECTORS FINANCIAL MANAGER
FU CHENGQIU FENG BOMING IOANNIS KOUKIS
Passport No E92044606 Passport No PE0484459 License No. Ο.Ε.Ε. 0007437 A' Class
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