Annual Report • May 5, 2017
Annual Report
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For the period ended as at December 31, 2016
According to Article 4 of Law 3556/2007
| Α. Representations of the Members of the Board of Directors 4 | |||
|---|---|---|---|
| B. Independent Auditor's Report5 | |||
| C. Annual Report of the Board of Directors7 | |||
| D. Annual Financial Statements 30 | |||
| Statement of Financial Position 31 | |||
| Statement of Comprehensive Income 32 | |||
| Statement of Changes in Equity 33 | |||
| Statement of Cash Flows 35 | |||
| Notes to the Financial Statements 36 | |||
| 1. | General Information 36 | ||
| Basis for preparation of annual financial statements 36 | |||
| 2. | 2.1. | Changes in Accounting Policies 36 | |
| 3. | Summary of accounting policies 42 | ||
| 3.1. | General 42 | ||
| 3.2. 3.3. |
Consolidation and investments in associates 42 Foreign currency translation 42 |
||
| 3.4. | Segment reporting 43 | ||
| 3.5. | Recognition of income and expenditure 44 | ||
| 3.6. | Borrowing costs 45 | ||
| 3.7. | Goodwill 45 | ||
| 3.8. | Other intangible assets and research and development activities 45 | ||
| 3.9. | Property, plant and equipment 46 | ||
| 3.10. | Leases 46 | ||
| 3.11. 3.12. |
Financial Assets 48 Inventories 48 |
||
| 3.13. | Accounting for Income Tax 48 | ||
| 3.14. | Cash and Cash Equivalents 49 | ||
| 3.15. | Equity 49 | ||
| 3.16. | Retirement benefits and short-term employee benefits 50 | ||
| 3.17. | Financial Liabilities 50 | ||
| 3.18. | Other Provisions, Contingent Liabilities and Contingent Assets 51 | ||
| 4. | The Group Structure 52 | ||
| 5. | Notes to financial statements 52 | ||
| 5.1. | Segment reporting 52 | ||
| 5.2. 5.3. |
Analysis of tangible fixed assets 53 Analysis of intangible assets 55 |
||
| 5.4. | Analysis of investments in subsidiaries and associates 55 | ||
| 5.5. | Investments on Joint Ventures 56 | ||
| 5.6. | Analysis of other long term receivables 57 | ||
| 5.7. | Analysis of inventory 57 | ||
| 5.8. | Trade and other Receivables and other Assets 57 | ||
| 5.9. | Analysis of cash available 58 | ||
| 5.10. | Equity analysis 58 | ||
| 5.11. 5.12. |
Analysis of provisions 60 Analysis of suppliers 60 |
||
| 5.13. | Analysis of other liabilities and advance payments 60 | ||
| 5.14. | Current Tax Liabilities 61 | ||
| 5.15. | Deferred Tax Assets and Liabilities 61 | ||
| 5.16. | Analysis of loans 65 | ||
| 5.17. | Other long term liabilities 65 | ||
| 5.18. | Analysis of employee retirement benefits 65 | ||
| 5.19. | Analysis of Income Statement 67 | ||
| 5.20. 5.21. |
Financial income / expenses & Other Financial Results 69 Reconciliation of income tax 70 |
||
| 5.22. | Profit / (Loss) per share 71 | ||
| 5.23. | Transactions with related parties 71 | ||
| 5.24. | Employees Benefits 72 |
| 5.25. | Contingent assets-liabilities 72 | ||
|---|---|---|---|
| 5.26. | Guarantees 74 | ||
| 6. | Risk management policies objectives 75 | ||
| 6.1. | Currency risk 75 | ||
| 6.2. | Sensitivity analysis of interest rate risk 76 | ||
| 6.3. | Credit Risk Analysis 76 | ||
| 6.4. | Liquidity risk analysis 76 | ||
| 7. | Capital management policies and procedures 77 | ||
| 8. | Post Balance Sheet Date events 78 | ||
(under Article 4, par. 2, Law 3556/2007)
We hereby certify that as far as we know:
a) The attached annual separate and consolidated Financial Statements of "LAMPSA HELLENIC HOTELS S.A." for the FY 1/1/2016 – 31/12/2016, prepared according to the effective International Financial Reporting Standards, present truly and fairly the assets and liabilities, the equity and the financial results of the Company as well as of the consolidated companies as a total.
b) The annual management report of the Board of Directors presents in a true and fair view the development, the performance and the financial position of the Company, as well as the companies consolidated as a total, including the description of the main risks and uncertainties they face.
Athens, April 28, 2017
The designees
PRESIDENT OF THE BOARD OF DIRECTORS
CHIEF EXECUTIVE OFFICER MEMBER OF THE BOARD OF DIRECTORS
I.D. No Ξ 282324 I.D. No ΑΙ 506406 I.D. No AK 121283
GEORGE GALANAKIS ANASTASIOS HOMENIDIS FILIPPOS SPYROPOULOS
We have audited the accompanying separate and consolidated financial statements of LAMPSA HELLENIC HOTELS S.A., which comprise the separate and consolidated statement of financial position as at December 31, 2016, and the separate and consolidated statement of comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information.
Management is responsible for the preparation and fair presentation of these separate and consolidated financial statements in accordance with International Financial Reporting Standards, as adopted by the European Union, and for such internal control as management determines is necessary to enable the preparation of separate and consolidated financial statements that are free from material misstatement, whether due to fraud or error.
Our responsibility is to express an opinion on these separate and consolidated financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing which have been transposed into Greek Law (GG/B'/2848/23.10.2012). Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the separate and consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the separate and consolidated financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the separate and consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the separate and consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the separate and consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
In our opinion, the accompanying separate and consolidated financial statements present fairly, in all material respects, the financial position of LAMPSA HELLENIC HOTELS S.A. and its subsidiaries as at December 31, 2016, and its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards, as adopted by the European Union.
We draw attention to Note 5.25 of the financial statements which include statements about the existence of pending court cases of subsidiary company of amount EUR 1.6 million the final outcome of which cannot be estimated at present and therefore has not been recognized any provision in Group's financial
statements in relation to these court cases. In our opinion there is no qualification in relation to this matter.
Taking into consideration, that management is responsibility for the preparation of the Board of Directors' report and Corporate Governance Statement that is included to this report according to provisions of paragraph 5, article 2 of Law 4336/2015 (part B), we note the following:
Athens, 28th April 2017 The Chartered Accountant
Pavlos Stellakis SOEL Reg. 24941
Dear Shareholders,
The current Annual Report of the Board of Directors pertains to the closing year from 1/1/2016 to 31/12/2016 and has been prepared in accordance with the provisions of Law 2190/1920 Article 43a paragraph 3, Article 107 paragraph 3 and Article 136 paragraph 2, and the provisions of Law 3556/2007, Article 4, paragraphs 2 (c), 6, 7 & 8 and the decisions of the Capital Market Commission 7 / 448/11.10.2007 Article 2 1/434/3.7.2007 and the Company's Articles of Association. The current report includes the audited consolidated and corporate financial statements, the notes to the financial statements and the Independent Auditor's Report. The current report summarized information on the Group and the Company «LAMPSA HELLENIC HOTELS S.A.», financial information aimed at providing general information to the shareholders and the investing public about the financial performance and the results, the overall course of development and the changes made during the closing year (01.01.2016 - 31.12.2016), significant events that took place and their impact on the financial statements of the year. Also, there is provided a description of the main risks and uncertainties that the Group and the Company may face in the future, as well as significant transactions between the Issue and its related parties.
The current report accompanies the annual financial statements (01/01/2016 - 31/12/2016) and is included together with the full text of the statements of the BoD members. Given that the Company also prepares consolidated financial statements, this report is unified, with the principal point of reference of the consolidated financial statements and with reference to corporate financial data of «LAMPSA HELLENIC HOTELS S.A.», only where appropriate or necessary for better understanding its contents.
The report presents an in brief but effective way all the necessary significant units, based on the above legislative framework and records, and reflects, in a true and fair manner, all the relevant information, required by legislation, in order to provide essential and thorough information regarding the operations within the aforementioned period on «LAMPSA HELLENIC HOTELS S.A.» (hereinafter «The Company») as well as the Group.
In 2016, the tourism sector in Greece was relatively stabilized, since there was an increase in arrivals, however, simultaneously with a relative decrease in revenue. On the contrary, the consequences of the economic crisis are reflected in the revenue of the Food & Beverage segment, where Greek presence has been traditionally strong, resulting in a lower rate of revenue growth compared to the room revenue increase.
Stagnation can also be observed in the Serbian hotel market, since demand is showing signs of recovery, assisted by the new foundations caused by Serbia's admission to the EU (airports, privatization of air transportation operator etc). Nevertheless revenue is lower owing to the operation of a number of new hotels in the Belgrade area.
Room occupancy ratio of the luxury hotel industry in Athens increased by 3,6% compared to 2015, adjusting the ratio to € 158,19 versus € 153,20 in 2015. Therefore, room occupancy ratio of the luxury hotel industry in Athens increased by 7,0% (also given a decrease in available rooms by 4,9%) while the total room revenue increased by 1,8%.
Turnover of the parent stood at € 42.072 km recording an increase of 1,52%, while ΕΒΙTDA reached € 9.773 k versus € 8.562 k in 2015.
"Grande Bretagne" and "King George" recorded increased room occupancies of 68,39% (versus 66,24% in 2015), but a marginal decrease in ARR (Average room rate) of € 258,56 ( versus € 261,37 in 2015), holding their leading position in Athens Hotel Market. Thus, revenue per available room increased by 2,14%.
Sheraton Rhodes also recorded stable course with a marginal increase (consolidated under Equity method) and turnover of € 9.901 k (2015 : € 9.488 k) and ΕΒΙTDA of 2.126 k € (2015 : €. 1.872 k).
"Grande Bretagne" hotel recorded a 2,0% sales increase versus 2015, while "King George" recorded same amounts as last year. Regarding the Group hotels in Serbia, "Hyatt Regency Belgrade" increased sales by 5.0%, while "Excelsior" decreased sales by 16.5% . Moreover, Sheraton Rhodes hotel, whose results given consolidation under Equity method, have effected the consolidated results of the Group and presented sales increase by 4,1%.
| Results for 31-12-2016 | |||||||
|---|---|---|---|---|---|---|---|
| Grand Bretagne | King George | Hyatt Belgrade | Sheraton Rhodes | Excelsior | |||
| Revenue per available room | 180,64 | 164,83 | 51,27 | 83,71 | 25,53 | ||
| Hotel occupancy rate | 66,64% | 69,18% | 48,70% | 81,52% | 52,43% | ||
| Average hotel room price | 271,06 | 239,72 | 105,29 | 102,68 | 48,70 | ||
| Results for 31-12-2015 | |||||||
| Grand Bretagne | King George | Hyatt Belgrade | Sheraton Rhodes | Excelsior | |||
| Revenue per available room | 175,45 | 165,83 | 51,80 | 76,71 | 31,30 | ||
| Hotel occupancy rate | 65,30% | 69,18% | 40,87% | 71,52% | 53,06% | ||
| Average hotel room price | 268,68 | 239,72 | 126,72 | 105,47 | 58,95 |
Specifically for the Group's Hotels, the figures were as follows:
The Group turnover has also increased by 1,67% (from € 51.522 k to 52.380 € k) and ΕΒΙTDA by 10,88% (from € 11.745 k to € 13.023 k) mainly due to the results recorded by the parent.
The company has improved its borrowings by € 4.882 k, i.e. from € 35.049 k to 0.166 k, focusing on repayment of loans.
The Group Earnings Before Tax recorded profit of € 3.112 k versus profit of € 1.548 k in 2015, presenting an increase of 101,07%. The Company Earnings Before Tax stood at € 5.571 k versus profit of € 5.212 k recorded in 2015.
Finally, net earnings (after tax and before non-controlling interest) of the Group recorded profit of € 2.288 k versus profit of € 1.303 k in 2015. Profit after tax of the Company stood at € 4.641 k versus profit of € 4.695 k in 2015, given losses arising from the impairment of the Company's investment in Excelsior.
The following companies are incorporated in the current period:
| Companies | Func. Currency |
Domicile | Participating interest % |
Consolidation Method |
Participation |
|---|---|---|---|---|---|
| LAMPSA HELLENIC HOTELS S.A | € | GREECE | Parent | ||
| LUELLA ENTERPRISES LTD | € | CYPRUS | 100,00% | Full | Direct |
| BEOGRADSKO MESOVITO PREDUZECE | € | SERBIA | 93,90% | Full | Indirect |
| EXCELSIOR BELGRADE SOCIATE OWNED | € | SERBIA | 80,33% | Full | Direct |
| TOURISTIKA THERETRA S.A. | € | GREECE | 50,00% | Proportionate | Direct |
| MARKELIA ENTERPRISES COMPANY LTD | € | CYPRUS | 100,00% | Full | Indirect |
The Group evaluates results and performance on a monthly basis, timely and effective identifying deviations from the goals and taking corrective measures. The Group's performance is measured using the following international financial performance indicators:
-EBITDA (Operating Earnings Before Interest, Taxes, Depreciation & Amortization): The Group defines "Group EDITDA" sizes as profit / (loss) before taxes adjusted for financial and investment result purposes, in respect of total depreciation and amortization (tangible and intangible fixed assets) as well as the effects of special factors, such as share in operating results of associates when they are active in one of the Business Segments and the effects of write-offs made under transactions conducted with the aforementioned associates.
ROCE (Return on Capital Employed): The index divides the earnings before interest and taxes to total capital of the Group which is the sum of equity, total loans and long-term forecasts.
ROE (Return on Equity): The index divides the profit after tax attributable to equity holders of the parent by the equity attributable to shareholders of the parent.
The above indicators for 2016 compared to 2015 were as follows:
| 31/12/2016 | 31/12/2015 | |
|---|---|---|
| EBITDA | 13.023 | 11.745 |
| ROCE | 6,87% | 5,63% |
| ROE | 2,34% | 1,57% |
Based on the above, the most significant items of the Financial Statements have changed as follows:
The Group and the Company's Financial cost recorded decreased by €196 k and € 200 k respectively, which is due to the decrease of loan liabilities of the Parent Company by an amount of € 4,882 k (from € 35,049 k to € 30,166 k.).
The Group's other financial results were burdened with exchange rate differences which mainly derived from the loan valuation in US Dollars of the Company and from the reclassification of the «Reserve of the Exchange Rate Differences» of the amount of € 502 k. due to voluntary liquidation of the subsidiary Company North Heaven Ltd. Besides the exchange rate differences, the Company's results include the revenues from dividends as at € 650 k versus € 1,535 k in the previous year.
The Parent Company, despite the general negative domestic economic conditions at the reporting date of the Annual Financial Statements, maintain satisfactory capital adequacy and profitability. Also, the Greek companies of the Group continue to regularly settle their liabilities to financial institutions, domestic suppliers, government and insurance organizations.
Within 2016, the Company completed a partial renovation (buildings and equipment) in the rooms, corridors and food departments of Grande Bretagne and King George, totally standing at € 2,565 k. Moreover, the Company acquires commercial property at Voukourestiou Str., 4, totally amounting to € 1,579 k. The investment relates to the configuration of rooms and auxiliary parts (kitchens, etc.). Also, investments of € 824 k were made in other equipment regarding the Group.
On November 10, 2016, the Company signed amendments to the management agreement of Grande Bretagne and King George hotels with Marriott group, thus significantly decreasing the management fees for the three-year period 2017-2019.
In September 2016, an American hotel group "Marriott International" acquired the company Starwood Hotels & Resorts Worldwide Inc. that manages the Group's hotels Grande Bretagne, King George and Sheraton Rhodes. The acquisition in question unites in the same group the hotels Marriott, Ritz Carlton Sheraton, Luxury Collection, Westin, W, Le Meridien and St. Regis. Therefore, Marriott currently unites 30 hotels brands, thus creating the biggest globally chain of hotels, offering over 5.800 hotel facilities with 1.1 million rooms available in more than 110 countries.
In the current period, the company's total borrowing decreased by € 4,882 k and stood at € 35,049 k versus € 30,166 k in 2015, while all the loan liabilities were timely settled.
The Annual General Meeting of the shareholders of LAMPSA S.A. was held on 23/6/2016, with the presence of Shareholders representing 15,058,412 common registered shares on a total of 21,364,000 common registered shares of the Company, i.e. approximately 70,48% and decided unanimously on the items on the agenda as follows:
(1) the AGM approved the annual financial statements of Lampsa S.A. (separate and consolidated) together with the reports of the Board of Directors of the financial year 2015 (1.1.2015-31.12.2015), after the hearing of the independent auditors' report on the annual financial statements of 31.12.2015 (separate and consolidated),
(2) the AGM released the members of the Board of Directors as well as the auditors from any responsibility on the drafting and audit of the annual Financial Statements as well as on the management of the company of FY 2015,
(3) the AGM elected auditing firm for the audit of annual and interim Financial Statements of the Company for FY 2015, GRANT THORNTON SA and set its remuneration,
(4) the AGM approved a total amount of 31.200 Euro as fees for the Board of Directors' member, Ms. Chloe Laskaridi, for the year 2015 and has pre-approved an amount of 35.000 Euro for FY 2016,
(5) Provided information regarding the services rendered by the Chief Executive Officer.
Within the previous year, the Company was informed about the issue of additional audit order regarding additional data for FYs 2003 - 2009 (which were finalized under tax amnesty procedures), prolonging the procedures until 31/12/2015 (instead of 31/12/2013). Following the above, in the beginning of 2015, the additional order specified that the selective tax audit will be conducted in respect of INCOME, VAT and Books and Records items.
On 29/07/2015, the Company received the Note under Article 30, par. 5 of PD 186/92 issued by the Audit Authority for Large Enterprises. The Note, prepared in the context of conducted recurring audit by the aforementioned Authority in respect of income taxation and other tax items for the financial years 2003 to 2009, stated that "under the audit opinion", the accounting books held by the company in respect of the administrative periods in question are considered to have misstatements under the provisions of cases a, c and d of par. 4, Article 30, of P.D. 186/92 in line with the provisions of par. 7, 8 and 9 of the same Article of P.D. 186/92, as added under Law 3052/2002, given that the misstatements are substantial compared to the company financials and negatively affect them. The judgments regarding the "misstatements" in the accounting books is based on breaches of regulations regarding non-receiving and non-recording in the company's accounting books tax data on leasing fixed assets from the company STARWOOD HELLAS HOTELS S.A.
The Audit Authority for Large Enterprises summoned the Company to appear in front of the Ministry of Finance Committee as under Article 30, par. 5 of P.D. 186/92 that is authorized to conclude whether the misstatements referred to in the Note entail rejection of the accounting books and records and extraaccounting definition of taxable items for the administrative periods under audit.
Within the current period, the Audit Authority for Large Enterprises disclosed to the Company its decision, stating that talking into account the Committee's decision under par. 5, Article 30, P.D. 186/92, which regarded that the Company's books were adequate and exact, the Company had not concealed any tax evidence and, therefore, no loss had arisen as for as the Greek State is concerned.
On April 2017, the Group's subsidiary Excelsior signed a hotel management agreement with the company Orbis S.A. of Accor Group. The term of the agreement is ten years with the right to renew it under the same conditions for 10 more years. The agreement is to start on September 1, 2017. The hotel will operate under the title "Mercure Belgrade Excelsior". The management fees include a percentage of revenue and a percentage of gross operating profit provided that the set forth objectives have been met.
Accor Hotels is one of top 5 hotel chains holding a leading position in Europe, Latin America, the Middle East, Africa and Asia. There are 2,300 hotels under direct management agreement and in addition 1,850 hotels under a franchise agreement. On everyday basis, the group hosts 500,000 visitors at over 4,150 hotels in 95 countries. The global size of the company provides real benefits to hotel owners (Proven techniques and large economies of scale, skilled staff with strong know-how and constant support, achieving the financial objectives. Some of the brands of the company are Sofitel, Raffles, Fairmont, Pullman, Swissotel, Mercure, Novotel, Addagio, Ibis.
The Group is exposed to financial risks such as changes in exchange rates, interest rates, credit risk, liquidity risk and fair value interest rate risk. The overall risk management of the Group focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the financial performance of the Group.
Risk management is carried out by the central cash available management service, which identifies and evaluates financial risks in cooperation with the services that face these risks. Prior to the relevant transactions it is taken acceptance by officers with the right to bind the Company to its counterparties.
The Group operates in Greece, Cyprus and Serbia and its operating currency is Euro. However, here is a certain limited exposure to currency translation risk regarding US Dollar, mainly arising from loan and other liabilities in Dollars. The exchange rate risk of this kind arises from the rate of these currencies against the euro, partially offset by corresponding liabilities (e.g. loans) of the same currency.
Financial assets and liabilities in foreign currency converted into Euro at the closing rate are as follows:
| 2016 | 2015 | |
|---|---|---|
| Amounts in 000 € | ||
| Nominal amounts | US\$ | US\$ |
| Financial assets | ||
| Financial liabilities | (2.314) | (2.421) |
| Short-term exposure | (2.314) | (2.421) |
| Financial assets | ||
| Financial assets | (7.611) | (9.360) |
| Long-term exposure | (7.611) | (9.360) |
| Total | (9.925) | (11.781) |
The following tables show the sensitivity of the result for the financial year as well as the equity in relation to financial assets and financial liabilities and the exchange rate Euro / Dollar.
We assume a change of 3.84% in the 31 December 2015 exchange rate of EUR / USD (2015: 4%). These percentages were based on the average market volatility in exchange rates for a period of 3 months from the end of each year (31/12).
In case € increases compared to the above currency, with the percentages mentioned above, the results on the earnings for the year and equity will be as follows:
| Amounts in thousands € | 2016 | 2015 |
|---|---|---|
| US\$ | US\$ | |
| Income statement before tax | 272 | 354 |
| Equity | 193 | 251 |
In case € depreciates compared to the above currency, with the percentage mentioned above, the earning for the year will be affected as follows:
| Amounts in thousands € | 2016 | 2015 |
|---|---|---|
| US\$ | US\$ | |
| Income statement before tax | (294) | (383) |
| Equity | (209) | (272) |
The exposure of the Group to foreign exchange risk varies during the year depending on the volume of transactions in foreign currency. However, the above analysis is considered representative of the Group's exposure to currency risk.
The majority of Group's sales are performed through credit cards, the credit sales though are made to customers with evaluated credit history.
Liquidity risk is kept at low levels by maintaining sufficient cash and credit lines.
Furthermore, due to the imposition of capital control in June 2015, irregularities arose regarding repayment obligations of foreign suppliers, which, however, within the current period were settled and thus, proper operations of the Greek Companies of the Group was restored. The Group Management has examined the alternatives and proceeded with the timely payment of its obligations towards foreign suppliers. Moreover, the Group has common practice of retaining cash in order to meet liquidity needs for periods up to 30 days, which, given capital control, has increased to 90 days.
The Group on 31/12/2016 had negative working capital, as current liabilities exceed current assets by € 2.748 k. (parent company € 6.429 k). The most important part of current liabilities (38% Group and parent company) is long-term debt installments payable in the following year.
Without taking into consideration the short-term loan liabilities, the Group working capital is presented positive by € 2.918 k and the Company's is presented negative by € 1.260 k.
Within the current FY, the parent company received from its subsidies dividends amounting to € 650 k and it is estimated that additional dividends standing at € 500 k will be received in the following FY.
The Management estimates that cash flows from operating activities in the following FY 2017, in line with the dividends to be collected will cover the company's short-term liabilities.
Within the current period, the Group and the Company repaid to the banks an amount of € 5.277 k and € 5.110 k.
Two major shareholders of the parent company "NAMSOS ENTERPRISES COMPANY LIMITED" and "DRYNA ENTERPRISES COMPANY LIMITED" (60,12%), although it is estimated that it will not be necessary, are committed to cover working capital subsequent needs for at least the next twelve months from the date of approval of the annual financial statements of 31/12/2016.
It is noted that the financial statements of the companies included in the consolidation have been prepared based on the going concern principle.
Operational revenue and operational cash flows of the Group are substantially independent of changes in market interest rates. The Group has assets of interest-bearing assets with fixed performance and the policy of the Group is to maintain approximately total borrowings at floating rate. At the end of the administrative period, the total borrowings were in floating interest rate loans.
The following table shows the sensitivity of the results for the financial year as well as the equity to a reasonable possible change of interest rate of +1.0 % or -1.0% (2015: +/-1 %). It is estimated that changes in rates logically reflect the market conditions.
| 01/01-31/12/2016 | 01/01-31/12/2015 | |||
|---|---|---|---|---|
| Amounts in thousands € | 1,0% | -1,0% | 1,0% | -1,0% |
| Income statement before tax | (340) | 340 | (387) | 387 |
| Equity | (241) | 241 | (275) | 275 |
The tourism industry of the country exhibits signs of stabilization. The relative lack of stability of tourism destinations of the wider area has a positive effect on destination Greece, as a safe Eurozone membercountry. Lampsa hotels, boasting the competitive advantage of luxury hotel units, location and history (Grande Bretagne) lead the Group to successfully facing any difficulties that arise, continuing operations regularly, without impediments, in all segments where it's active while improving its financial performance and therefore, at present, concludes that in spite of the unstable environment its Assets will not be negatively affected.
The increase in VAT on the hotel and food sector is adversely affecting the Group's Hellenic hotels in 2016. Specifically, for the hotels "Grande Bretagne" and "King George", a decrease in revenue in the food sector is observed, since the increase in VAT is being absorbed mainly by the Company. The effect on room rentals is less significant since the company's standard policy is to close deals based on the room's net price. This negative effect is expected to be observed on the sales of the «Sheraton Rhodes» hotel, due to the imminent "double up" of the VAT (additional increase of said index regarding the islands) and the bulk of sales (e.g mixed prices on tour operators, intensified competition etc), a fact that is not expected to affect the financials of the Group and Company, given the consolidation method.
Nonetheless, high occupancy coupled with improved room rates and cost containment have led to improved results compared to those recorded in 2015.
Regarding the Hotels in Serbia, stabilization is also expected since demand is showing signs of recovery, assisted by the new foundations caused by Serbia's admission to the EU (airports, privatization of air transportation operator etc). Nevertheless revenue is lower owing to the operation of a number of new hotels in the Belgrade area.
It is expected that the upward trend regarding the hotels operating in Greece will continue in 2017. The contribution of the King George Hotel which has been added to Lampsa Group is estimated to remain significant, mainly due to the economies of scale that have already been achieved through the synergy of two hotels - both at the management and staffing levels – and also due to its contribution to the turnover of the company .
The profitability of the company is also expected to improve due to modification of the management agreement with Marriott Group regarding Grande Bretagne and King George, which drastically reduces management fees for the three-year period 2017-2019.
As far as the hotels in Serbia are concerned, mild growth is expected, since it appears that its forthcoming EU membership together with the foreign (especially Arab) investments in line with the demand for business tourism will start to recover. Hopes for investments in the countries that are on their way to EU membership, coupled with its central location (HUB) in the Balkans allows optimistic projections in respect of the Hotel Industry recovery. It is no coincidence that strong players of travel & tourism segment, such as ETIHAD (Air Serbia), Crown Plaza, Starwood, Radisson and Marriott have installed their facilities in Belgrade. After the investment boom in hotel and other infrastructure, Belgrade market showed the first signs of recovery in 2016 and further new mild growth is expected in 2017. In particular, as far as Excelsior is concerned, the fact that the management has been undertaken by Accor group is expected to make a significant contribution to the increase of its sales.
The Group monitors and continues monitoring carefully the progress in real economy, considering all necessary measures in order to ensure the smooth continuation of the business. Despite the success of the Group, both in Greece and abroad, the management estimates that the current economic crisis, continues to affect the Hotel market in which it operates. The immediate priority for the management of the Group is the maintenance of its smooth functioning in the Greek territory through the continuous identification and evaluation of all risks that may arise in the near future. The Management monitors with interest and attention the investment opportunities created in the country and is ready to act on its own or with the appropriate alliances, if conditions permit, in order to extend the Group.
To achieve the above mentioned objectives and to meet the highly volatile market conditions and the tight financing policy of banks, while aiming to strengthen the Group's cash and the planned growth financing for 2017 through equity, the Management will constantly monitor the progress of work on a monthly basis and will intervene directly to ensure adequate liquidity and will continue to successfully implement the adjustment program of loan liabilities in the new banking environment aiming the conservation of advantageous terms of borrowing. Furthermore, to the same direction will be the proposal of BoD to the Annual Regular General Meeting of shareholders with regard to non distribution of share. With the aim of the revival of liquidity of the Company, its capital support and the examination of possible decrease of its financial cost through the payment of loan capital besides the conventional, it will suggest to the Regular General Meeting of shareholders the non distribution of share from the profits of the year. It has to be mentioned that the suggested distribution remains to be confirmed from the approval of the Annual Regular General Meeting of the shareholders.
Finally, the Management of the Group under the uncertainty dominating from the international financial crisis, the difficulty of defining the depth and the duration of the current depression, and also the difficulty forming reliable estimations for the tourist activity especially of the summer semester, announces that it will not publish estimations for the progress of its economic sizes for the next year 2017.
As a conclusion, the development of the performance of the Company and the Group seems to signal the material recovery of the Tourist Industry after a long period of depression.
This section includes the most significant transactions between the Company and its related parties as defined in International Accounting Standard 24 and in particular:
(a) Transactions between the Company and any related party made during the financial year 2016, which have materially affected the financial position or performance of the Company during the mentioned period,
(b) any changes in the transactions between the Company and any related party described in the last annual report that could have a material effect on the financial position or performance of the Company during the financial year 2016.
It is noted that the reference to those transactions includes the following elements:
(d) any information on transactions that are necessary for understanding the financial position of the Company, but only if such transactions are material and have not been conducted under normal market conditions.
Specifically, transactions and balances with related legal entities and natural persons, as defined by the International Accounting Standard 24 on 31/12/2016 and 31/12/2015 respectively, are as follows:
| Amounts in thousands € | THE GROUP | THE COMPANY | ||
|---|---|---|---|---|
| 01.01- | 01.01- | 01.01- | 01.01- | |
| Sales of goods – services | 31.12.2016 | 31.12.2015 | 31.12.2016 | 31.12.2015 |
| Subsidiaries/jointly controlled entities | 58 | 49 | 58 | 49 |
| Other associates | 134 | 81 | 134 | 81 |
| Total | 191 | 130 | 191 | 130 |
| 01.01- | 01.01- | 01.01- | 01.01- | |
| Acquisition of services | 31.12.2016 | 31.12.2015 | 31.12.2016 | 31.12.2015 |
| Subsidiaries/jointly controlled entities | 9 | 13 | 9 | 13 |
| Other associates | 424 | 397 | 424 | 397 |
| Total | 433 | 411 | 433 | 411 |
| Balance of Receivables | 31.12.2016 | 31.12.2015 | 31.12.2016 | 31.12.2015 |
| Subsidiaries/jointly controlled entities | 545 | 508 | 545 | 508 |
| Other associates | 213 | 1 | 213 | 1 |
| Total | 758 | 510 | 758 | 510 |
| Balance of Payables | 31.12.2016 | 31.12.2015 | 31.12.2016 | 31.12.2015 |
| Subsidiaries/jointly controlled entities | 5 | 6 | 5 | 6 |
| Other associates | 100 | 67 | 100 | 67 |
| Total | 105 | 73 | 105 | 73 |
Out of the above transactions, any transactions and outstanding balances with subsidiary companies have been excluded from the consolidated financial statements of the Group. Receivables / loan liabilities between subsidiary companies of total amount € 2.146 k and accordingly interest income / expenses of € 130 k and FX differences income / expenses of € 92 k are also excluded from the consolidated financial statements.
Outstanding balances at year end are unsecured and settlement is made in cash. No guarantees have been provided or received regarding the above receivables.
It is noted that there are no special agreements between the Parent Company and its subsidiaries and potential transactions are carried out between them under the effective market conditions, within the framework and the particularities of each market.
Regarding the FY ended December 31, 2016, the Company has made no provisions for doubtful debts relating to amounts owed by related parties.
The remuneration of key executives and BoD members was as follows:
| THE GROUP | THE COMPANY | |||
|---|---|---|---|---|
| Amounts in thousands € | 01.01-31.12.2016 | 01.01-31.12.2015 | 01.01-31.12.2016 | 01.01-31.12.2015 |
| Executives & BoD members | ||||
| Salaries – Fees | 1.086 | 1.062 | 649 | 771 |
| Social Insurance Cost | 98 | 95 | 98 | 95 |
| Bonus | 162 | 156 | 162 | 156 |
| Other | 10 | 113 | 10 | |
|---|---|---|---|---|
| Total | 1.356 | 1.426 | 919 | 1.021 |
Finally, it is noted that in the provision made for the staff compensation for both the Group and the Company an amount of € 74 k (20154: 58 k) is included for key management personnel and BoD members respectively while € 7,5 k are included in the Income Statement (2015: 6 k).
No loans have been granted to BoD members and top-level management of the Group or their families.
Taking into account the Company's planned course of development, its investment plans and in order to stimulate its liquidity, capital enhancement as well as a potential reduction of its financial cost through payment of loan capital in excess of the contractual capital, LAMPSA Management proposes to the Regular General Meeting of Shareholders not to distribute dividends from profits for the year. It is noted that the proposed distribution is subject to approval by the Annual Regular General Meeting of Shareholders. In the event of a change in the distribution proposal to the Regular General Meeting, the Company will inform the investing public in good time before and after the decisions of the Annual General Meeting. It should be noted that the proposed distribution is subject to the approval of the Annual Regular General Meeting of Shareholders.
The present explanatory report of the company BoD to the Annual Regular General Meeting of the Shareholders includes information on issues addressed in article 4 of Law 3556/2007.
The Company share capital amounts to twenty three million nine hundred twenty seven thousand six hundred and eighty euro (€ 23.927.680), divided in twenty one million three hundred sixty four thousand (21.364.000) common shares with voting rights of nominal value one euro and twelve cents (€ 1,12) each. Company shares are listed in the Athens Stock Exchange.
Every common share provides one voting right to the General Meeting of Shareholders.
Shareholder rights are proportional to the value of the shares owned. Each share confers all the rights provided by law and the company memorandum of association, and in particular:
• dividend rights from annual profits or liquidation profits of the Company. Each year, an initial dividend equal to 35% of net profits after the deduction of the regular capital reserve is distributed to shareholders, while the payment of an additional dividend is decided by the General Meeting of Shareholders. All shareholders registered in the company Shareholders Registry are entitled to dividends. Dividends are paid to each shareholder within ten days from the Annual General Meeting of Shareholders which approved the annual financial statements. Payment method and place is announced through press. Dividend rights are cancelled and transferred to the State after the expiration of a 5-year period commencing at the end of the year on which the General Meeting of Shareholders approved the dividend distribution,
• rights arising from the liquidation of the company or capital returns decided by the General Meeting of Shareholders,
• pre-emption right to acquire new shares in cash issued by the Company in an issue right,
• right to receive copies of the financial statements and reports issued by the Auditors and the Company Board of Directors,
• right to participate in the General Meeting of Shareholders which includes the following individual rights of legalization, attendance, participation in discussions, submission of proposals on issues included in the agenda, expressing opinions recorded in the minutes of the Meeting and voting.
• The General Meeting of the shareholders of the Company maintains all of its rights in the event of company liquidation (according to paragraph. 4 of Article 38 of the Statute).
The liability of Shareholders is limited to the nominal value of their shares.
The transfer of Company shares is conducted according to the provisions of the Law. There are no restrictions imposed by the Company memorandum of association with regards to the transfer of shares given the fact that the Company is listed on the Athens Stock Exchange.
The significant participations of the Company according to articles 9 -11 of Law 3556/2007 are the following:
| TITLE | PERCENTAGE |
|---|---|
| NAMSOS ENTERPRISES COMPANY LIMITED | 30,06% |
| DRYNA ENTERPRISES COMPANY LIMITED | 30,06% |
| HOMERIC DEPARTMENT STORES S.A. | 8,25% |
| TALANTON INVESTMENTS INC | 5,16% |
| Total | 73,53% |
Shareholders (individuals or legal entities) with a direct or indirect participation greater than 5% of the total number of Company shares, as of 27/04/2017 are presented in the table below:
| TITLE | PERCENTAGE |
|---|---|
| NAMSOS ENTERPRISES COMPANY LIMITED | 30,06% |
| DRYNA ENTERPRISES COMPANY LIMITED | 30,06% |
| HOMERIC DEPARTMENT STORES S.A. | 8,25% |
| TALANTON INVESTMENTS INC | 5,16% |
| Total | 73,53% |
There are no Company shares that provide special controlling rights to their holders.
The Company memorandum of association does not set any restrictions on voting rights provided by its shares.
Major shareholders, NAMSOS ENTERPRISES COMPANY LTD and DRYNA ENTERPRISES COMPANY LTD as of 27/04/2017 had . 6.892.496 common Company shares pledged in favor of EFG EUROBANK SA. As a result, transfer of the above-mentioned shares falls under restrictions.
NAMSOS ENTERPRISES COMPANY LTD and DRYNA ENTERPRISES COMPANY LTD have maintained their voting rights.
The relative rules and regulations set in the Company memorandum of association on the appointment and replacement of BoD members and on the amendment of articles of the memorandum are in line with the provisions of Law 2190/1920.
A) According to Article 13 paragraph 1 element b) and c) of Law 2190/1920 and in conjunction with Article 6 of the Company memorandum of association, the BoD has the right, following a decision of the General Meeting of shareholders which is subject to the disclosure requirements of article 7 b of Law 2190/1920, to increase the Company share capital by issuing new shares. A decision must be taken by a majority of at least two thirds (2/3) of BoD members.
In this case, the share capital may be increased by up to the amount of the paid-up capital up on the date the Board of Directors was given this authority by the General Meeting. This BoD right may be renewed by the General Meeting for a period of up to five years.
B) In accordance with the provisions of Article 13 § 13 of Law 2190/1920, following a decision of the General Meeting of shareholders, a stock option plan may be offered to BoD members and staff in the form of stock options, according to the specific terms of this decision. The General Meeting defines mainly, the maximum number of shares that may be issued, which by law, cannot exceed 1/10 of the existing shares if the holders exercise their options, the price and terms of offering of shares to beneficiaries.
The Board, by resolution, regulates any other relevant details that are not regulated by the General Meeting, issues certificates of stock options and every December issues shares to the beneficiaries who exercise their options, increasing respectively the share capital and confirming the increase.
C) As of today, the General Meeting of shareholders of the Company has not decided to implement a share repurchase program in accordance with the provisions of Article 16 of Law 2190/1920.
There are no agreements which take effect, are altered or terminated in the event of a change in the control of the company following a public tender offer.
There are no agreements between the Company and BoD members or its personnel, which involve compensation in case of resignation or termination of employment with no material cause as a result of the public tender offer. The accumulated Staff Leaving Indemnities as of 31/12/2016, reached € 2.615 k. There is no provision for compensation for BoD members.
Information reported under Law 4403/7.7.2016, which supersedes article 43a of Codified Law 2190/1920. 2190/1920 concerning the Corporate Social Responsibility programs implemented by the Company is presented below.
LAMPSA S.A. has embedded the principles of Sustainable Development and Corporate Social Responsibility in its regulations.
The Company has adopted and consistently implemented an efficient business policy that aims at creatively combining tradition with innovation, seeking to create added value for all its stakeholders and the broader society.
In particular, the main objectives of the Company, in line with the principles of its business policy, are focused on the following:
The Company has recognized as stakeholders all those affected and/ r influencing its operations in a direct and significant way. Thus, stakeholders include Shareholders, Customers/Hotel Visitors, Suppliers, Employees. Partners, Regulatory Authorities, as well as the Broader Society. Communication with all stakeholders is immediate and systematic, to ensure that the Company understands and records their needs.
The Company has adopted the Corporate Governance Principles as defined by applicable Greek legislation and international practices. This Code of Corporate Governance (the "CCG") includes the corporate governance practices applied by the Company so voluntarily and in requirement of existing law (L. 2190/1920, L. 3693/2008, L. 3884/2010 etc.). It aims not only to comply with the provisions of Law 3873/2010, but also to improve information of private and institutional shareholders. The adopted principles of corporate governance code affect the operation, the procedures and decision making at all levels of the Company's activities, seeking to ensure the necessary transparency on equal terms to all stakeholders.
In this context, the Company took into account the general principles of the Greek Corporate Governance Code of Hellenic Corporate Governance Council (HELEX), elaborating the framework for its administrative organization and operation. Further information is provided in the "Corporate Governance Statement" presented below.
With regard to enhancing transparency and combating corruption, the Company has demonstrated zero tolerance to such conduct and for this reason has included a specific reference to the Internal Regulations, approved by the been approved by the Greek Mediation and Arbitration Service (OMED) as well as relevant policies and procedures. The Company is controlled by external, tax and internal auditors. Its Financial Services operate on the basis of strict internal procedures, which are regularly examined. The Internal Auditor submits annual reports and the Audit Committee evaluates them. An annual peer reviews system is in pertain in Financial Services and IT Departments.
Moreover, annually, the employees conduct is certified through analytical training within two key domains:
LAMPSA SA recognizes that its people constitute the corner stone in its development and constantly invests in its human resources, rewards their efforts, provides incentives for productivity and offers a well-organized, fully equipped and pleasant working environment. In this context, it ensures that appropriate working conditions and compliance with health and safety rules are in place in order to protect its people and provide a secure working environment.
The Company pays great attention to professional development and training of its people and provides training programs - both locally and through the multinational Marriott International Company. In this context, it offers the employees individual plans of Information & Training through Wellbeing Activities.
Moreover, the Company makes available to its employees:
Furthermore, in 2016, the Company implemented the Youth Training Program for those aged 20-30.
In December 2016, for one more year, the Company the "Parents Day", during which, at Christmas, the children of the employees come to the Hotels and see the departments where their parents work and are presented with professional orientation data, provided by the departments executives.
Along with the Company's contribution, its employees are also involved insignificant social activities, first launched in 1992, namely, maintaining and reinforcing the "Blood Bank" that they have launched at
Agia Sophia Children's Hospital with regular voluntary blood donations in order to cover the needs of the colleagues and their families. Also, under the new Starwood Associate Relief Fund program, offering their own contributions, the Company employees have created a support fund for their colleagues, suffering from natural disasters, at the global level.
Furthermore, in 2016, the employees participated in a Football Tournament organized by Asteras Vouliagmenis for the purpose of improving the facilities and living standards of the "SOS Baris Village" and the "Smile of the Child".
The Company constantly strives to reduce the impact of its activities on the environment by adopting efficient management technologies and practices as it is committed to integrating environmental and sustainable practices into its business strategy, in line with Starwood Hotels & Resorts' environmental policy. Moreover, it continually invests in its human resources so that they could effectively implement these practices in day-to-day operations. The Company has established a special Environmental Health and Safety Committee, which ensures the Company's harmonization with Greek legislation, EU legislation and environmental initiatives of Marriott International.
The following actions were implemented in 2016:
Grand Bretagne has been holding the Green Key Award, an international ecological quality program for tourism, since 2010, which verifies that the hotel takes care of the protection of the environment, constantly seeking ways to improve and innovate.
LAMPSA regards its contribution to Society as a component of its corporate culture. The Company strives to meet the needs of the people most in need in the difficult times faced by Greece. In particular, the Company:
Analytical description of the Corporate Social Responsibilities activities in 2016 is presented in the Annual CSR Report, prepared in compliance with the international GRI Standards.
In their capacity as healthy, active and socially responsible entities, Grand Bretagne and King George have accorded considerable weight to the support of worthwhile actions and initiatives that are beneficial to the community, focusing on three pillars.
We collaborate with the Hellenic Anticancer Society.
Moreover, in the context of the new program "Starwood Associate Relief Fund", all Starwood hotels employees have made donations to the fund supporting their co-workers worldwide in case of natural disasters.
This Code of Corporate Governance (the "CCG") includes the corporate governance practices applied by the Company so voluntarily and in requirement of existing law (L. 2190/1920, L. 3693/2008, L. 3884/2010 etc.). It aims not only to comply with the provisions of Law 3873/2010, but also to improve information of private and institutional shareholders.
The adopted principles of corporate governance code affect the operation, the procedures and decision making at all levels of the Company's activities, seeking to ensure the necessary transparency on equal terms to all interested parties.
In this context, the Company took into account the general principles of the Draft Greek Corporate Governance Code of Hellenic Corporate Governance Council (HELEX). The Code is posted in the Company's website: http://www.lampsa.gr, in the domain "Press Releases–Announcements".
The BoD should direct the affairs of the company for the benefit of the company and shareholders, ensuring fair and equitable treatment of all shareholders.
In performing its duties, the BoD should take account of the parties, whose interests are connected with those of companies, such as the customers, creditors, employees and the social groups directly affected by the company's operation.
the approval of the annual budget and the business plan,
decisions on significant acquisitions and divestitures,
the selection of senior executives at the company, combined with the monitoring of administrative hierarchy and succession - Ensuring the reliability of financial statements and company details, financial information systems and data and information made publicly available, and ensuring the effectiveness of internal audit and risk management,
the prevention and handling possible cases of conflict of interest between the company and the other by the Management, BoD members or major shareholders (including shareholders with direct or indirect power to shape or influence the composition and behavior of BoD),taking into account transparency and the protection of corporate interests,
ensuring an effective compliance process company with relevant laws and regulations
the responsibility of making decisions and monitoring the effectiveness of the company's management, and
the formulation, dissemination and application of the basic values and principles of the company, governing its relations with all parties, whose interests are associated with the company.
The size and composition of the BoD should allow the effective exercise of their duties, taking into account the size, activity and ownership of the business. The board and senior management should be characterized by a high level of integrity and possess diverse knowledge, skills and experience to meet their corporate objectives. Nominations for the BoD will be made on merit and objective criteria. The board should ensure the smooth succession of members, and senior management, with a view to longterm business success.
Each BoD member is subject to legal liability of loyalty to the Company. It should therefore act with integrity and in the interest of the Company to have sufficient information about the transactions with related companies and to preserve the confidentiality of non- public information available. The board directors and persons holding powers conferred by this, should not have a competitive relationship with the Company and should avoid any role or activity that creates or appears to create a conflict between their personal interests and those of the Company, including having a spot on the Board or management of competing companies without the permission of the General Assembly. Board members should contribute their experience and commit to their duties the necessary time and attention. They should also limit accordingly other professional commitments in particular any Board other companies) . Board members should try to participate in all meetings of the Board and the committees on which they take part. The board should regularly assess its effectiveness in fulfilling its duties, and that of its committees. The independent board members have the right to submit to the General Meeting of Shareholders reports and statements, separately from the other members of the Board, in case they deem it appropriate.
Nominations for the BoD will be made on merit and objective criteria, aiming to the achievement of a balance between adequate representation of the majority, but also to ensure the effective participation of the independent non-executive members.
Depending on business needs, the board should meet with the needed frequency to effectively perform their duties. The Chairman should be responsible for setting the agenda, ensuring the proper organization of the Board's work, but also the efficient conduct of its meetings. The information provided by the Management Board should be timely, so as to enable it to cope effectively with the tasks arising from its responsibilities. It should be the responsibility of the President to ensure accurate and timely information to members of the Board, and effective communication with all shareholders, focusing on a fair and equivalent treatment of the interests of all shareholders.
The BoD should ensure the accuracy and reliability of the financial statements and the correctness of announcements, which are imposed in order to present to investors a clear picture and valuation of real position and prospects of the Company.
The BoD should maintain an effective system of internal audit aiming to safeguard the assets of the Company, and the identification and dealing with the most significant risks. It should monitor the implementation of the Company's strategy and review it regularly. The main risks to be faced and the effectiveness of internal audit in managing these risks should be reviewed periodically.
The review should cover all essential audits, including financial and operational audits, compliance audit and audit of risk management systems. The Board, through the audit committee should also be in direct and regular contact with the statutory auditors in order to receive regular updates from the past in relation to the proper functioning of the internal audit system.
The level and structure of remuneration should aim to attract and retain BoD members, managers and employees in the Company, adding value to the Company with their skills, knowledge and experience. The level of remuneration should be in line with their qualifications and their contribution to the Company. The BoD should have a clear picture of how the Company pays its executives, especially those who have the appropriate qualifications for the effective management of the Company.
The BoD should ensure the continuous and constructive dialogue with shareholders of the Company, particularly those with significant shareholdings and a long-term perspective.
The BoD should ensure that the preparation and conduct of the General Assembly of Shareholders facilitate the effective exercise of shareholders' options, who should be fully informed on all matters related to their participation in the General Assembly, including of the daily agenda items, and their rights at the General Assembly. The board should facilitate, within the framework of the relevant statutory provisions, the participation of all shareholders in the General Assembly, without discrimination. The BoD should utilize the General Assembly of shareholders to facilitate meaningful and open dialogue with the Company.
The roles of both the BoD and Management are identified and clearly documented in the Memorandum of corporation and the internal procedure. It is the competent corporate body which decides each transaction regarding the administration and management of the Company, subject to the exclusive competence of the General Assembly by the law or by the prescribed topics Memorandum.
The BoD adopts clear policy devolution to the Management, which includes a list of issues that the BoD has the authorization to decide. For the achievement of Company's objectives and the efficient and flexible operation of the Company, the BoD may delegate any of its responsibilities, except those that require collective action to one or more members of the BoD or to members outside the BoD.
For the performance of the service may be appointed by the BoD one General Manager either by the members of the BoD, or outside it. The General Manager who is not a director may attend the meetings of the BoD without voting right, after permission by the BoD.
In order for the Company to take validly responsibilities, two signatures are always required for which the Chairman of the BoD, Vice president and General Manager are authorized, if not prevented any of these three, other authorized BoD member appointed for that purpose by the BoD. Besides the persons mentioned above, the BoD may grant an authorization of first or second signature to other persons selected among senior executives in accordance with the requirements of the service.
The Company, in the name of the BoD, is outwardly and before all administrative or judicial authorities represented by the Chairman of the BoD or the Vice President, if any of them is unavailable, the General Manager or one of the BoD members appointed by the BoD.
In order to ensure the effective functioning of the BoD, an audit committee has been established, responsible for monitoring financial information, the effective operation of internal audit and risk management systems, and supervision and monitoring of statutory audit as well as the issues related to
objectivity and independence of statutory auditors. Under Law 4449/2017 (GOVERNMENT GAZETTE Α 7/24.01.2017), the group has implemented the changes regarding composition and functioning of the Audit Committee. The Company has already scheduled all the necessary procedures to be implemented under the new legislation.
Considering that the size and composition of the B.o.D. should allow the effective exercise of its functions and reflect the size, activity and ownership of the business, the Company is managed under the Statute, by a Board of Directors consists of seven to ten (7-10) members, executive and nonexecutive directors in accordance with Law 3016/2002 as applicable, shareholders or not, elected by the General Meeting of shareholders.
The size and composition of the B.o.D. of the Company must ensure balance between executive, nonexecutive and independent non-executive members. So the B.o.D. is for the third at least of nonexecutive members (including independent non-executive directors). The executive, non-executive and independent members of the Board appointed by the General Meeting.
The executive members of the B.o.D. dealing with the daily management of the company and maintain some form of employment relationship with it.
The non-executive members participate in decisions and monitor the activities of the Company. It is responsible for the promotion of all corporate issues, participates in any boards and committees and is particularly responsible for upholding the principles of good corporate governance. Among the nonexecutive members are two (2) independent directors who meet the independence requirements imposed by applicable law.
The non-executive members maintain independence in the investigation of issues to consider, with the goal of providing substantive work and create a climate of trust between the Board of directors and senior executives and managers.
The responsibilities of President and CEO should not be coincided to the same person. Further, if the President of the Board is an executive member will be appointed non-executive Vice Chairman. The B.o.D. of the Company will be assisted by a Secretary, chief executive or lawyer who will attend B.o.D. meetings and keep minutes.
The corporate governance statement should include information on the composition of the B.o.D., and the names of the President of the B.o.D., the Vice-President, CEO , and the Presidents of the Board Committees and their members . Moreover, this statement should be identified and the independent non -executive members the B.o.D. considers that retain their independence. The corporate governance statement should also disclose the term of office of B.o.D. members, including brief CVs.
The B.o.D. members should have a thorough knowledge of both the operation and the objects of the company and the broader market sector to contribute effectively and efficiently to the smooth and efficient operation of the Company.
The continuous abstinence of a consultant, without justifiable cause, who resides at the headquarters of the Company, from the B.o.D. meetings for a period in excess of four months, equates to resignation.
A director who is absent or indisposed, has the right with his own responsibility to delegate his representation to the Council to another counselor. The authorization of his representation may be apply to one or more than one meeting of the B.o.D.. In the absence or incapacity of non-executive members of the B.o.D., the authorized representative shall be similarly non-executive member. The same applies to the independent members of the B.o.D.
The B.o.D. is elected by the General Assembly with a maximum term of three (3) years.
The B.o.D. shall submit to the General Meeting of shareholders, who have the decisive power to do so, state candidate B.o.D. members, after adequate and timely information to shareholders regarding the
profile of the candidates. The B.o.D. should ensure the smooth succession of members, and senior management, with a view to long-term business success.
The B.o.D. should meet with the necessary frequency to effectively perform their duties. The information provided by the Administration should be timely, in order to have the ability to cope effectively with the tasks.
The discussions and decisions of the B.o.D. and its committees should be recorded to the minutes. The minutes of each meeting should be shared and approved at the next meeting of the B.o.D. or the committee.
The B.o.D. members should ensure their own regular information, regarding business developments and the major risks to which the Company is exposed . Also should be informed timely of changes in legislation and the market environment. The B.o.D. members should come in regular contact with the management staff of the Company through regular presentations by head and service sectors.
The B.o.D. members should have the right to ask the Administration, through the CEO, any information they consider necessary for the performance of their duties at any time.
The assessment of the effectiveness of the B.o.D. and its committees should take place at least every two (2) years and be based on a specific procedure . This process should be headed by the President, and its results are discussed by the B.o.D. and following the assessment, the President should take measures to address the identified weaknesses. It is also best practice to meet regularly non-executive directors without the presence of executive members, in order to assess the performance of executive directors and set their fees.
The Company applies control procedures to ensure the reliability of the financial statements and the effectiveness of the operations.
In this context, it's been established the statutory prescribed Audit Committee, which is responsible for monitoring the internal audit department on a periodic basis and whenever requested. The Commission is in constant contact with the Internal Audit and attends to ensure all those requirements and conditions necessary for the non-discontinuing operation of the internal control.
The precise scope of the responsibilities of the two bodies described above in detail of the internal operation of the Company.
The Audit Commission consisting of at least two non-executive Directors an independent non-executive director and, as noted, is objective conduct internal and external audits and effective communication between the auditors and the B.o.D..
Within the responsibilities include ensuring the Company's compliance with the rules of Corporate Governance , as well as ensuring the proper functioning of the Internal Control and supervision of the work of the Internal Audit Department of the Company and evaluating the chief . In addition , the Audit Committee monitors the work of the independent auditors , discusses with them any weaknesses in internal control and has the ability to provide recommendations - advice to the General Meeting of Shareholders regarding the appointment, retention or dismissal of the external auditors of the Company.
To fulfill its tasks, recognizing that the Audit Committee members do not perform the work of auditors and / or accountants. Based on the above, it is not fall the responsibility of those the execution of detailed work book review - support and / or part thereof and / or other similar work.
The B.o.D. has recommended statutory internal audit service, which operates in accordance with the internal operation.
The Internal Audit of the Company is an independent organizational unit, which reports to the B.o.D. of the Company. The responsibilities include the evaluation and improvement of risk management and internal control, as well as verification of compliance with established policies and procedures as outlined in the internal operation of the Company, the applicable legislation (mainly stock) and decisions B.o.D..
The members of the B.o.D., the Management and all members must cooperate and provide all necessary information in this section to facilitate in every way its task.
The B.o.D., with the support of the Audit Committee should adopt appropriate policies on internal control to ensure the effectiveness of the system. You must also specify the procedure to be adopted for monitoring the effectiveness of internal control system, which will include the scope and frequency of reports of the internal audit department that receives and deals with the B.o.D. during the year as and the process of annual assessment of internal control.
The Company shall have developed related policies and procedures which ensure effective risk management activities, maintaining and preserving the overall system of internal control and financial reporting.
The statutory policies should ensure secure protection and preservation of assets of the information system from which derived the historical financial information, proper handling, deal with financials for the preparation of financial and accounting statements of each period.
The main characteristics of the system as applied to the process of preparing financial statements combine:
The process for determining remunerations must be based on objectivity, transparency and professionalism and be independent of any conflict of interest.
The level and structure of remunerations must aim at attracting and maintaining management and employees that add value to the Company with their skills, knowledge and experience. The level of remunerations must be according to the qualifications and contribution of each employee to the Company. The BoD must have a clear understanding on the methods used by the Company to remunerate/reward its employees, especially those employees who possess the right skills to manage the company efficiently.
As far as BoD members are concerned, their remuneration should take into account their duties and responsibilities, their performance compared to predefined targets, the financial status and the future prospects of the Company as well as market conditions. In this framework, fixed remuneration will be combined with extra material benefits and a bonus, all related to the total performance of BoD members.
As far as non-executive members are concerned, their remuneration is proposed to reflect their time spent on Company affairs and their responsibilities. It is recommended that their remuneration is not directly related to their performance so as not to discourage any possible objections against management decisions assuming high business risk.
The remuneration of BoD members is pre-approved by the shareholders' meeting, based on a proposal made by the BoD following the above-mentioned framework. Final approval of the remuneration of BoD members (executive and non-executive) is granted by the General Meeting of the Shareholders according to the provisions of the law.
The BoD must maintain constant and constructive communication with shareholders, especially with those holding a major share with long-term prospects.
The Company must maintain a corporate website with public information on corporate governance, management structure, ownership status as well as with other useful information for shareholders and investors.
The BoD must ensure that the General Meeting of shareholders is prepared and organized in such a way that facilitates shareholders to exercise their rights efficiently. It must also be ensured that shareholders are fully informed on all issues relating to their participation in the General Meeting, including topics for discussion on the agenda and their rights.
In the framework of transparent communication with shareholders, the President of the BoD, the Managing Director, internal and external auditors must be available in order to provide all necessary information to the shareholders. The BoD must follow the principle of equal treatment of all shareholders in relation to the provision of information.
Detailed information on the role of the General Meeting of shareholders, its basic authorities and a description of shareholders' rights and how these are executed is provided in the Corporate Governance Statement, which is included in the annual management report of the Company according to the provisions of the law.
The present Corporate Governance statement is an integral part of the annual report of the BoD of the company.
Athens, April 28, 2017
President of the BoD
GEORGE GALANAKIS
I.D. No Ξ 282324
The accompanying financial statements were approved by the Board of directors of «LAMPSA HELLENIC HOTELS S.A. » on April 28, 2017, and have been published on the Company's website www.lampsa.gr as well as on the Athens Exchange's website, where they will remain at the investing public's disposal for at least 5 (five) years from the date of publication.
| CONSOLIDATED | CORPORATE | ||||
|---|---|---|---|---|---|
| Amounts in thousands € | Note | 31/12/2016 | 31/12/2015 | 31/12/2016 | 31/12/2015 |
| ASSETS | |||||
| Non Current Assets | |||||
| Property, plant and equipment | 5.2 | 111.328 | 114.812 | 73.828 | 72.406 |
| Intangible Assets | 5.3 | 243 | 280 | 60 | 78 |
| Investments in Subsidiaries | 5.4 | - | - | 23.204 | 23.840 |
| Investments in Joint Ventures | 5.5 | - | - | - | - |
| Other Long-term Assets | 5.6 | 371 | 371 | 107 | 107 |
| Deferred Tax Assets | 5.15 | 8.092 | 8.518 | 8.276 | 8.518 |
| Total | 120.034 | 123.980 | 105.475 | 104.948 | |
| Current Assets | |||||
| Inventory | 5.7 | 1.204 | 1.108 | 912 | 809 |
| Trade and other receivables | 5.8 | 1.708 | 1.189 | 1.500 | 974 |
| Other Receivables | 5.8 | 1.068 | 1.154 | 898 | 683 |
| Other Current Assets | 5.8 | 634 | 569 | 487 | 446 |
| Cash and cash available | 5.9 | 7.365 | 5.770 | 3.226 | 2.954 |
| Total | 11.978 | 9.789 | 7.022 | 5.866 | |
| Total Assets | 132.012 | 133.770 | 112.497 | 110.814 | |
| EQUITY AND LIABILITIES | |||||
| Equity | 5.10 | ||||
| Share Capital | 23.928 | 23.928 | 23.928 | 23.928 | |
| Share Premium | 38.641 | 38.641 | 38.641 | 38.641 | |
| Statutory Reserves | 1.019 | 878 | 1.019 | 878 | |
| Other Reserves | 283 | 507 | 270 | 494 | |
| Retained Earnings | 18.116 | 15.968 | 7.307 | 2.806 | |
| Foreign Exchange Difference Reserves Equity attributable to owners of the parent |
5.10 | 81.987 2.962 |
79.922 3.332 |
71.165 | 66.747 |
| Non-controlling interest | 84.949 | 83.254 | 71.165 | 66.747 | |
| Total Equity | |||||
| Long-term liabilities | 5.18 | 2.615 | 2.277 | 2.615 | 2.277 |
| Employee termination benefits liabilities | 5.16 | 25.794 | 31.067 | 24.997 | 29.938 |
| Long-term Debt | 5.16 | ||||
| Deferred Tax Obligations | 5.15 | 3.126 | 3.428 | - | - |
| Other Long-term Liabilities | 5.17 | 181 | 266 | 180 | 265 |
| Other Provisions | 5.11 | 621 | 590 | 89 | 89 |
| Total | 32.336 | 37.628 | 27.881 | 32.569 | |
| Short-term Liabilities | |||||
| Suppliers and other liabilities | 5.12 | 2.547 | 2.272 | 2.434 | 2.189 |
| Income tax payable | 5.14 | 782 | 182 | 778 | - |
| Short-term debt | 5.16 | 82 | 3 | - | - |
| Short-term portion of bond and bank loans | 5.16 | 5.584 | 5.442 | 5.169 | 5.110 |
| Other liabilities | 5.13 | 5.730 | 4.988 | 5.071 | 4.198 |
| Total | 14.726 | 12.887 | 13.452 | 11.497 | |
| Total liabilities | 47.062 | 50.516 | 41.333 | 44.067 | |
| Total Equity and Liabilities | 132.012 | 133.770 | 112.497 | 110.814 |
| CONSOLIDATED | CORPORATE | ||||
|---|---|---|---|---|---|
| 1/1- | 1/1- | 1/1- | |||
| Amounts in thousands € | Note | 1/1-31/12/2016 | 31/12/2015 | 31/12/2016 | 31/12/2015 |
| Sales | 5.19 | 52.380 | 51.522 | 42.072 | 41.443 |
| Cost of Sales | 5.19 | (33.136) | (32.467) | (25.542) | (24.995) |
| Gross Profit | 19.244 | 19.055 | 16.530 | 16.448 | |
| Distribution Expenses | 5.19 | (5.432) | (5.668) | (4.921) | (5.091) |
| Administrative Expenses | 5.19 | (6.836) | (7.139) | (5.385) | (5.744) |
| Other Income | 5.19 | 1.373 | 993 | 902 | 649 |
| Other expenses | 5.19 | (296) | (431) | (106) | (258) |
| Operating Profit | 8.053 | 6.811 | 7.021 | 6.005 | |
| Financial expenses | 5.20 | (1.126) | (1.322) | (1.009) | (1.209) |
| Financial income | 5.20 | 28 | 49 | 1 | 4 |
| Other financial results | 5.20 | (364) | (1.653) | 376 | 412 |
| Earnings (Losses) from impairment of assets | (3.479) | (2.035) | (636) | - | |
| Portion from (loss)/profit of associates 5.205.20 | - | (301) | - | - | |
| Profit / (Loss) before Tax | 3.112 | 1.548 | 5.751 | 5.212 | |
| Income Tax | 5.21 | (1.194) | (294) | (1.110) | (517) |
| Net Profit / (Loss) for the period | 1.919 | 1.254 | 4.641 | 4.695 | |
| Other Comprehensive Income : | |||||
| Other Comprehensive Income reclassified into Income | |||||
| Statement for Subsequent Periods | |||||
| Foreign exchange differences on translation of financial | |||||
| statements of foreign operations | - | 502 | - | - | |
| Other Comprehensive Income not reclassified into | |||||
| Income Statement for Subsequent Periods: | |||||
| Actuarial results reserves | (315) | 228 | (315) | 228 | |
| Effect of tax on actuarial results reserves | 91 | (58) | 91 | (58) | |
| Other total comprehensive income for the period after tax | (223) | 672 | (223) | 170 | |
| Total Comprehensive Income for the Period | 1.695 | 1.926 | 4.417 | 4.865 | |
| Profit for the period allocated to: | |||||
| Owners of the parent | 2.288 | 1.303 | 4.641 | 4.695 | |
| Non-controlling interest | (370) | (48) | |||
| 1.919 | 1.254 | 4.641 | 4.695 | ||
| Total Comprehensive Income for the Period allocated to: | |||||
| Owners of the parent | 2.065 | 1.975 | 4.417 | 4.865 | |
| Non-controlling interest | (370) | (48) | - | - | |
| 1.695 | 1.926 | 4.417 | 4.865 | ||
| Earnings per share allocated to owners of the parent | |||||
| Basic in € | 5.22 | 0,1071 | 0,0610 | 0,2172 | 0,2198 |
| CONSOLIDATED | CORPORATE | |||
|---|---|---|---|---|
| 1/1- 31/12/2016 |
1/1- 31/12/2015 |
1/1- 31/12/2015 |
||
| EBIT | 8.053 | 6.811 | 7.021 | 6.005 |
| EBITDA | 13.023 | 11.745 | 9.773 | 8.562 |
Potential differences are due to rounding
| THE GROUP | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Equity allocated to owners of LAMPSA | |||||||||
| Share | Non Share Forex Differences Other Retained controlling |
Share | |||||||
| Amounts in thousands € | Capital | Premium | Reserves | reserves | earnings | Total | interest | Total | Capital |
| Balances as at January 1, 2015 | 23.928 | 38.641 | (502) | 513 | 15.367 | 77.947 | 3.380 | 81.328 | |
| Transfers | 702 | (702) | - | - | |||||
| Total Comprehensive Income for 2015 | 502 | 170 | 1.303 | 1.975 | (48) | 1.926 | |||
| - | - | ||||||||
| Equity balance as at December 31, 2015 | 23.928 | 38.641 | (0) | 1.385 | 15.968 | 79.922 | 3.332 | 83.254 | |
| Balances as at January 1, 2016 | 23.928 | 38.641 | (0) | 1.385 | 15.968 | 79.922 | 3.332 | 83.254 | |
| Transfer to Statutory Reserves | 140 | (140) | - | - | |||||
| Total Comprehensive Income for 2016 | 0 | (223) | 2.288 | 2.065 | (370) | 1.695 | |||
| Equity balance as at December 31, 2016 | 23.928 | 38.641 | (0) | 1.302 | 18.116 | 81.987 | 2.962 | 84.949 |
| THE COMPANY | ||||||||
|---|---|---|---|---|---|---|---|---|
| Share | Retained | |||||||
| Amounts in thousands € | Share Capital | Premium | Other Reserves | Earnings | Total | |||
| Balances as at January 1, 2015 | 23.928 | 38.641 | 1.202 | (1.889) | 61.882 | |||
| Distribution of dividends in 2014 | - | |||||||
| Trasnfers | - | |||||||
| Total Comprehensive Income for 2015 | 170 | 4.695 | 4.865 | |||||
| Equity balance as at December 31, 2015 | 23.928 | 38.641 | 1.372 | 2.806 | 66.747 | |||
| Balances as at January 1, 2016 | 23.928 | 38.641 | 1.372 | 2.806 | 66.747 | |||
| Distribution of dividends in 2015 | - | |||||||
| Transfer to Statutory Reserves | 140 | (140) | - | |||||
| Total Comprehensive Income for 2016 | (223) | 4.641 | 4.417 | |||||
| Equity balance as at December 31, 2016 | 23.928 | 38.641 | 1.289 | 7.307 | 71.165 |
Potential differences are due to rounding
| THE GROUP | THE COMPANY | |||
|---|---|---|---|---|
| 01/01- | 01/01- | 01/01- | 01/01- | |
| Amounts in thousands € € | 31/12/2016 | 31/12/2015 | 31/12/2016 | 31/12/2015 |
| Operating activities | ||||
| Profit / (Loss) before tax | 3.112 | 1.548 | 5.751 | 5.212 |
| Plus / less adjustments for: | ||||
| Depreciation | 4.970 | 4.935 | 2.753 | 2.558 |
| Profit / (Loss) of asset sale – impairment | 3.519 | 2.034 | 636 | |
| Provisions/ (Revenues from unused provisions of previous years) | 569 | 131 | 534 | 179 |
| Devaluation –Impairment of Goodwill | - | 301 | ||
| Income from Dividends | - | - | (650) | (1.535) |
| Foreign exchange differences | 292 | 1.459 | 228 | 904 |
| - | - | |||
| Interest income | (28) | (49) | (1) | (4) |
| Interest expenses | 1.126 | 1.322 | 1.009 | 1.209 |
| Plus/ less adjustments for changes in working capital accounts | ||||
| or accounts related to operating activities: | ||||
| Decrease / (increase) in inventories | (96) | (237) | (103) | (179) |
| Decrease / (increase) in receivables | (767) | 942 | (831) | 834 |
| (Decrease) / increase in short term liabilities (except for banks) | 479 | 246 | 615 | 98 |
| Less: | - | - | ||
| Interest expense and related expenses paid | (1.613) | (1.227) | (1.470) | (1.100) |
| Taxes paid | (159) | (100) | - | - |
| Total inflows / (outflows) from operating activities (a) | 11.403 | 11.307 | 8.472 | 8.176 |
| Investing activities | ||||
| Acquisition of tangible and intangible assets | (4.556) | (2.793) | (3.741) | (2.480) |
| Dividends Received | - | - | 650 | 1.535 |
| Increase of share capital and amounts paid for capital increase of consolidated companies | - | (500) | (500) | |
| Interest collectable | 28 | 49 | 1 | 4 |
| Total inflows / (outflows) from investing activities (b) | (4.528) | (3.244) | (3.090) | (1.441) |
| Financing activities | ||||
| Payments of loans | (5.277) | (5.255) | (5.110) | (4.923) |
| Repayment of finance lease liabilities | (3) | (11) | ||
| Payments for long-term deposits | - | (84) | ||
| Dividends paid | - | - | ||
| Total inflows / (outflows) from financing activities (c ) | (5.280) | (5.350) | (5.110) | (4.923) |
| Καθαρή αύξηση / (μείωση) στα ταμειακά διαθέσιμα και ισοδύναμα (a) + (b) + (c) | 1.595 | 2.713 | 272 | 1.811 |
| Net increase / (decrease) in cash and cash equivalents (a) + (b) + (c ) | 5.770 | 3.057 | 2.954 | 1.142 |
| Effect of foreign currency translation differences | ||||
| Cash and cash equivalents at the end of year | 7.365 | 5.770 | 3.226 | 2.954 |
LAMPSA Group has fully adopted all the International Financial Reporting Standards and their Interpretations adopted by the European Union mandatory applicable for the preparation of the current FY financial statements.
The parent company of the Group is "LAMPSA HELLENIC HOTELS S.A. based in Athens, Vasileos Georgiou Α1, and is registered in the Companies Register of the Ministry of Economy, Competitiveness and Shipping, No. REG 6015/06 / V/86/135 and GSC Reg. No. 223101000 and its term of duration is set at one hundred (100) years, which began from the publication in the Government Gazette of the Royal Decree approving its memorandum of association. The company has been operating continuously since its foundation, over ninetysix (96) consecutive years. The General Meeting of Shareholders as of 19/06/2015, decided to extend the duration of the company for fifty (50) years, with the corresponding amendment of Article 4 of its Articles of Association.
The parent company's objective is acquisition, construction and operation of hotels in Athens and elsewhere in Greece or abroad, as well as related businesses, such as acquisition and / or exploitation of thermal spring water, resorts, public entertainment, clubs, etc. . The Company website is www.lampsa.gr .
The shares of the group are listed on the Athens Stock Exchange since 1946.
The annual financial statements were approved for issue by the Company Board of Directors on 28 April, 2016.
The company LAMPSA signed management agreement with Starwood Hotels & Resorts Worldwide Inc. and Touristika Theretra S.A., the owner of «Sheraton Rhodes Resort» Hotel. The agreement concerns the assumption of operational management of the hotel (operating services agreement). It is to be noted that LAMPSA holds 50% of the shares of Touristika Theretra S.A.
On 24/12/2012, between the parent company and the bank "Eurobank Ergasias S.A." there was signed a definitive notarized leasing contract of the King George Hotel. The leasing agreement became effective following signing Lease Delivery and Reception Protocol as at 20/3/2013.
The accompanying separate and consolidated financial statements of LAMPSA S.A. have been prepared in accordance with the International Financial Reporting Standards (hereinafter IFRS). The financial statements have been prepared based on historic cost principal as amended following the adjustment of certain assets and liabilities at fair values and the going concern principle and are in accordance with the IFRSs, as issued by the International Accounting Standards Board (IASB) and according to their interpretations, which have been published by the International Financial Reporting Interpretations Committee (IFRIC) of IASB.
All the revised or newly issued Standards and Interpretation applicable to the Group and effective as from December 31, 2015 were taken into account under the preparation of the financial statements for the current tear to the extent they were applicable.
The preparation of financial statements according to IFRSs requires use of accounting estimates. It also requires management estimations under the application of the Company accounting principles. The cases involving a higher degree of judgment or complexity, or the cases where assumptions and estimates are significant to the consolidated financial statements are included in Note 2.2.
In 2003 and 2004, the International Accounting Standards Board (IASB) issued a series of new International Financial Reporting Standards (IFRS) and revised International Accounting Standards (IAS), which are combined with the non-revised International Accounting Standards (IAS) issued by the International Financial Accounting Standards Board, prior to IASB, which is referred to as "the IFRS Stable Platform 2005". The Group applies the IFRS Stable Platform 2005 from January 1, 2005.
The accounting policies based on which the Financial Statements were drafted are in accordance with those used in the preparation of the Annual Financial Statements for the FY 2014, adjusted to the new Standards and revisions imposed by IFRS effective for fiscal years starting as at January 1st, 2016.
The following amendments and interpretations of the IFRS have been issued by the International Accounting Standards Board (IASB), adopted by the European Union, and their application is mandatory from or after 01/01/2016.
Amendments to IAS 19: "Defined Benefit Plans: Employee Contributions" (effective for annual periods starting on or after 01/02/2015)
In November 2013, the IASB published narrow scope amendments to IAS 19 "Employee Benefits" entitled Defined Benefit Plans: Employee Contributions (Amendments to IAS 19). The narrow scope amendments apply to contributions from employees or third parties to defined benefit plans. The objective of the amendments is to simplify the accounting for contributions that are independent of the number of years of employee service, for example, employee contributions that are calculated according to a fixed percentage of salary. The amendments that affect the consolidated and separate Financial Statements have been taken into consideration.
In December 2013, the IASB issued Annual Improvements to IFRSs 2010-2012 Cycle, a collection of amendments to IFRSs, in response to eight issues addressed during the 2010-2012 cycle. The amendments are effective for annual periods beginning on or after 1 July 2014, although entities are permitted to apply them earlier. The issues included in this cycle are the following: IFRS 2: Definition of 'vesting condition', IFRS 3: Accounting for contingent consideration in a business combination, IFRS 8: Aggregation of operating segments, IFRS 8: Reconciliation of the total of the reportable segments' assets to the entity's assets, IFRS 13: Short-term receivables and payables, IAS 7: Interest paid that is capitalised, IAS 16/IAS 38: Revaluation method—proportionate restatement of accumulated depreciation and IAS 24: Key management personnel. The amendments do not affect the consolidated and separate Financial Statements.
In May 2014, the IASB issued amendments to IFRS 11. The amendments add new guidance on how to account for the acquisition of an interest in a joint operation that constitutes a business and specify the appropriate accounting treatment for such acquisitions. The amendments do not affect the consolidated and separate Financial Statements.
In May 2014, the IASB published amendments to IAS 16 and IAS 38. IAS 16 and IAS 38 both establish the principle for the basis of depreciation and amortisation as being the expected pattern of consumption of the future economic benefits of an asset. The IASB has clarified that the use of revenue-based methods to calculate the depreciation of an asset is not appropriate because revenue generated by an activity that includes the use of an asset generally reflects factors other than the consumption of the economic benefits embodied in the asset. The amendments do not affect the consolidated and separate Financial Statements.
In June 2014, the IASB published amendments that change the financial reporting for bearer plants. The IASB decided that bearer plants should be accounted for in the same way as property, plant and equipment in IAS 16. Consequently, the amendments include bearer plants within the scope of IAS 16, instead of IAS 41. The produce growing on bearer plants will remain within the scope of IAS 41. The amendments do not apply to the consolidated and separate Financial Statements.
In August 2014, the IASB published narrow scope amendments to IAS 27 "Equity Method in Separate Financial Statements ". Under the amendments, entities are permitted to use the equity method to account for investments in subsidiaries, joint ventures and associates in their separate Financial Statements – an option that was not effective prior to the issuance of the current amendments. The amendments do not affect the consolidated and separate Financial Statements.
In September 2014, the IASB issued Annual Improvements to IFRSs 2012-2014 Cycle, a collection of amendments to IFRSs, in response to four issues addressed during the 2012-2014 cycle. The amendments are effective for annual periods beginning on or after 1 January 2016, although entities are permitted to apply them earlier. The issues included in this cycle are the following: IFRS 5: Changes in methods of disposal, IFRS 7: Servicing Contracts and Applicability of the amendments to IFRS 7 to Condensed Interim Financial Statements, IAS 19: Discount rate: regional market, and IAS 34: Disclosure of information elsewhere in the interim financial report. The amendments do not affect the consolidated and separate Financial Statements.
In December 2014, the IASB issued amendments to IAS 1. The aforementioned amendments address settling the issues pertaining to the effective presentation and disclosure requirements as well as the potential of entities to exercise judgment under the preparation of Financial Statements. The amendments do not affect the consolidated and separate Financial Statements.
In December 2014, the IASB published narrow scope amendments to IFRS 10, IFRS 12 and IAS 28. The aforementioned amendments introduce explanation regarding accounting requirements for investment entities, while providing exemptions in particular cases, which decrease the costs related to the implementation of the Standards. The amendments do not affect the consolidated and separate Financial Statements.
Τhe following new Standards, Revised Standards as well as the following Interpretations to the existing Standards have been publicized but have not taken effect yet or have not been adopted by the European Union.
In January 2014, the IASB issued a new Standard, IFRS 14. The aim of this interim Standard is to enhance the comparability of financial reporting by entities that are engaged in rate-regulated activities. Many countries have industry sectors that are subject to rate regulation, whereby governments regulate the supply and pricing of particular types of activity by private entities. The Group will examine the impact of the above on its Financial Statements, though it is not expected to have any. The above have not been adopted by the European Union, until the issuance of the final Standard.
In May 2014, the IASB issued a new Standard, IFRS 15. The Standard fully converges with the requirements for the recognition of revenue in both IFRS and US GAAP. The key principles on which the Standard is based are consistent with much of current practice. The new Standard is expected to improve financial reporting by providing a more robust framework for addressing issues as they arise, increasing comparability across industries and capital markets, providing enhanced disclosures and clarifying accounting for contract costs. The new Standard will supersede IAS 11 "Construction Contracts", IAS 18 "Revenue" and several revenue related Interpretations. The Group will examine the impact of the above on its Financial Statement. The above were adopted by the European Union – the effective date is 01/01/2018.
In July 2014, the IASB issued the final version of IFRS 9. The package of improvements introduced by the final version of the Standard, includes a logical model for classification and measurement, a single, forwardlooking "expected loss" impairment model and a substantially-reformed approach to hedge accounting. The Group will examine the impact of the above on its Financial Statement. The above were adopted by the European Union – the effective date is 01/01/2018.
In September 2014, the IASB published narrow scope amendments to IFRS 10 and IAS 28. The objective of the aforementioned amendments is to address an acknowledged inconsistency between the requirements in IFRS 10 and those in IAS 28, in dealing with the sale or contribution of assets between an investor and its associate or joint venture. In December 2015, the IASB postponed the effective date of these amendments indefinitely pending the outcome of its research project on the equity method of accounting. The Group will examine the impact of the above on its Financial Statements, though it is not expected to have any. The above have not been adopted by the European Union.
In January 2016, the IASB issued a new Standard, IFRS 16. The objective of the project was to develop a new Leases Standard that sets out the principles that both parties to a contract, i.e. the customer ('lessee') and the supplier ('lessor'), apply to provide relevant information about leases in a manner that faithfully represents those transactions. To meet this objective, a lessee is required to recognise assets and liabilities arising from a lease. The Group will examine the impact of the above on its Financial Statements. The above have not been adopted by the European Union.
In January 2016, the IASB published narrow scope amendments to IAS 12. The objective of the amendments is to clarify the accounting for deferred tax assets for unrealized losses on debt instruments measured at fair value. The Group will examine the impact of the above on its Financial Statements, though it is not expected to have any. The above have not been adopted by the European Union.
In January 2016, the IASB published narrow scope amendments to IAS 7. The objective of the amendments is to enable users of Financial Statements to evaluate changes in liabilities arising from financing activities. The amendments will require entities to provide disclosures that enable investors to evaluate changes in liabilities arising from financing activities, including changes arising from cash flows and non-cash changes. The Group will examine the impact of the above on its Financial Statements. The above have not been adopted by the European Union.
In April 2016, the IASB published clarifications to IFRS 15. The amendments to IFRS 15 do not change the underlying principles of the Standard, but clarify how those principles should be applied. The amendments clarify how to identify a performance obligation in a contract, how to determine whether a company is a principal or an agent and how to determine whether the revenue from granting a license should be recognized at a point in time or over time. The Group will examine the impact of the above on its Financial Statements. The above have not been adopted by the European Union.
In June 2016, the IASB published narrow scope amendment to IFRS 2. The objective of this amendment is to clarify how to account for certain types of share-based payment transactions. More specifically, the amendments provide requirements on the accounting for the effects of vesting and non-vesting conditions on the measurement of cash-settled share-based payments, for share-based payment transactions with a net settlement feature for withholding tax obligation, as well as, a modification to the terms and conditions of a share-based payment that changes the classification of the transaction from cash-settled to equity-settled. The Group will examine the impact of the above on its Financial Statements, though it is not expected to have any. The above have not been adopted by the European Union.
In September 2016, the IASB published amendments to IFRS 4. The amendments introduce approaches to addressing temporary accounting effects arising from the different effective dates of IFRS 9 "Financial
Instruments" and the upcoming new insurance contracts standard. The amendments to the existing provisions of IFRS 4 allow entities issuing insurance contracts within the scope of IFRS 4 to defer the implementation date of IFRS 9 till 2021 ("temporary exemption"), and enable all the insurance contracts issuers to recognise in the total comprehensive income, rather that in profit or loss, the volatility potentially arising from application of IFRS 9 prior to the issue of the new insurance contracts standard ("(overlay approach"). The Group will examine the impact of the above on its Financial Statements, though it is not expected to have any. The above have not been adopted by the European Union.
In December 2016, the IASB issued Annual Improvements to IFRSs – 2014-2016 Cycle, a collection of amendments to IFRSs, in response to several issues addressed during the 2014-2016 cycle. The issues included in this cycle are the following: IFRS 12: Clarification of the scope of the Standard, IFRS 1: Deletion of short-term exemptions for first-time adopters, IAS 28: Measuring an associate or joint venture at fair value. The amendments are effective for annual periods beginning on or after 1 January 2017 for IFRS 12, and 1 January 2018 for IFRS 1 and IAS 28. The Group will examine the impact of the above on its Financial Statements. The above have not been adopted by the European Union.
In December 2016, the IASB issued a new Interpretation, IFRIC 22. IFRIC 22 provides requirements about which exchange rate to use in reporting foreign currency transactions (such as revenue transactions) when payment is made or received in advance. The Group will examine the impact of the above on its Financial Statements. The above have not been adopted by the European Union.
In December 2016, the IASB published narrow-scope amendments to IAS 40. The objective of the amendments is to reinforce the principle for transfers into, or out of, investment property in IAS 40, to specify that (a) a transfer into, or out of investment property should be made only when there has been a change in use of the property, and (b) such a change in use would involve the assessment of whether the property qualifies as an investment property. That change in use should be supported by evidence. The Group will examine the impact of the above on its Financial Statements, though it is not expected to have any. The above have not been adopted by the European Union.
The preparation of financial statements in accordance with International Financial Reporting Standards (IFRS) requires management to make judgments, estimates and assumptions that affect the reported assets and liabilities at the balance sheet date. They also affect the disclosures of contingent assets and liabilities at the balance sheet date and the reported amounts of revenues and expenses for the period. actual results may differ from these estimates. Estimates and judgments are based on historical experience and other factors, including expectations of future events that are considered reasonable under specific circumstances and are constantly re-assessed using all available information.
The key judgments made by the management of the Group (other than judgments associated with estimates presented below) and that have the most significant effect on the amounts recognized in the financial statements mainly relate to:
Specific amounts included or affecting the financial statements along with relevant acknowledgments are estimated assuming values or conditions which cannot be known with certainty at the time the financial statements are issued. An accounting estimate is considered significant when it is important for the image the financial position of the company and fiscal year results and requires management's most difficult, subjective or complex judgments, often as a result of the need to make estimates regarding the effect of matters that
are uncertain. The Group evaluates these estimations in constant basis, based on past years and experience, by meeting experts, trends and other methods considered rational under the specific circumstances along with provisions of future changes. In § 3 "Synopsis of accounting policy" the accounting policies are mentioned which have been chosen from acceptable alternative policies.
The Group tests annually the existing goodwill for impairment and examines events or conditions that make impairment possible; such as, for example, a significant negative change in the business climate or a decision for the sale or disposal of a unit or an operating segment. The determination of impairment requires the valuation of the corresponding unit, which is evaluated by using the method of discounted cash flows.
The recoverable amounts of units creating cash flows are determined based on calculations of current use value. These calculations require the use of estimates.
If this analysis indicates a need for impairment, the measurement of the impairment requires a fair value estimate for each identified tangible asset. In that case the approach of cash flows is used, as mentioned above, by independent valuators as appropriate.
Moreover, other identified intangible assets with defined useful lives are tested annually for impairment and are subject to amortization by comparing the carrying amount to the sum of the undiscounted cash flows expected to be generated by the asset. The Group annually tests the impairment of goodwill according to accounting policy as mentioned below. It is to be noted that the total of recognised goodwill was fully impaired within the previous year.
LAMPSA is subject to income taxation by various tax authorities. For determining the provision for income taxes, significant estimates are required. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The company recognizes liabilities for anticipated tax audit issues based on estimates for the amount of additional taxes that may be due. If the final tax outcome of these cases differs from the amount initially recognized in the financial statements, these differences will affect the income tax and deferred tax provisions in the period in which the amounts are finalized.
Doubtful accounts are reported at the amounts that may be recovered. Estimates of the amounts expected to be recovered result of analysis as well as from the experience of the Group regarding the possibility of doubtful customer. As soon as it is realized that a specific account is subjected to greater risk than the usual credit risk (e.g. low credibility, argument on demand's existence or amount, etc.), the account is analyzed and recorded as doubtful debt as long as demand remain uncollected.
During ordinary course of business, the Group is involved in legal claims and compensations. The Management judges that any arrangement would not affect significantly the financial position of the Group in 31/12/2016. However, the determination of contingent liabilities that are connected to legal claims and demands is a complicated procedure that includes judgments on possible consequences and law interpretation according laws and regulations. Any change in judgment or interpretation is possible to lead to an increase or decrease of the contingent liabilities in the future.
Upon initial recognition, the assets as well as liabilities of the acquired business are included in the consolidated financial statements at their fair values. During measurement of fair values, management uses estimates regarding future cash flows but actual results may differ. Any other change in measurement upon initial recognition would affect the goodwill measurement.
The Management examines the useful lives of depreciable assets at every reporting period. At 31 December 2016, the management of the company estimates that the useful lives of the depreciated assets, represent the expected utility of these assets. Actual results, however, may differ due to technical gradual depreciation, mainly regarding software and computer equipment.
The significant accounting policies that are used for the constitution of integrated financial statements are synopsized as per below.
It is worth noting, as already mentioned above at "2.2 Significant accounting judgments, estimates and assumptions" that accounting estimations and assumptions are used in the preparation of the financial statements. Despite the fact that these estimations are based on Management's better knowledge on current facts and activities, actual results may differ from the ones estimated.
Amounts in financial statements appear in thousand euros. Any differences in totals are due to rounding.
Subsidiaries are all entities managed and controlled by the Group in regard to their finance and business policies. LAMPSA considers that owns and controls a subsidiary when participates with a percentage greater than the half of voting rights.
To determine the existence of potential voting rights of LAMPSA, that are currently exercisable on another entity, LAMPSA examines the existence and effect of any potential voting rights that are currently exercisable or convertible.
The consolidated financial statements of LAMPSA SA include the financial statements of the parent company as well as economic entities controlled by the Group through full consolidation.
Subsidiaries are consolidated using the full consolidation method from the date on which the Group obtains control and stop to be consolidated to the date on which control ceases.
In addition, the subsidiaries acquired are subject to the application of the market methods. This includes revaluation at fair value of all identifiable assets and liabilities, including contingent liabilities of the subsidiary, at the acquisition date, irrespective of whether they have been included in the financial statements of the subsidiary prior to acquisition. Upon initial recognition, subsidiary's assets and liabilities are included in the consolidated balance sheet at revalued amounts, which are also used as a basis for subsequent measurement in accordance with the accounting policies of the group. Goodwill represents the excess of cost over the fair value of the Group's share in the identifiable assets of the acquired subsidiary of the group during acquisition. If the cost of acquisition is less than the fair value of net assets of the subsidiary acquired, the difference is recognized directly in the result.
Non-controlling interests are recognized as part of profit or loss and net assets that do not belong to the Group. If losses of a subsidiary concerning non-controlling interests exceed non-controlling interests in subsidiary's liabilities, then the excess amount is allocated to the shareholders of the parent company except from the amount that the has an obligation and is able to cover those losses.
The accounting policies of subsidiaries are modified where necessary, in order to be consistent with the policies adopted by the Group
Intercompany account receivables and liabilities, revenues and expenses and unrealized gains or losses between companies are eliminated.
In the separate Statement of Financial Position, participation in subsidiaries is measured at acquisition cost, unless there are indications of impairment. In this case, depreciation is recorded in the income statement as "Income from related companies''.
The consolidated financial statements of LAMPSA S.A. are presented in EURO (€), which is, also, the functional currency of the Holding Company.
Each financial entity of the group defines the functional currency and the elements included in the financial statements, of each entity. In the individual financial statements of the consolidated entities, the transaction in foreign currency is converted to the functional currency of each entity, using the exchange rates, prevailing on the date of the transaction. Transactions in foreign currency are converted into euros using the exchange rates prevailing on the transaction dates.
Exchange gains and losses arising from such transactions and from the conversion of accounts with balances at year end exchange rates are recognized in the "Financial Income / (expenses)", respectively except from the gain or damage incurred by the hedging instrument and directly recognized at the equity account, through the statement of changes in equity.
Changes in the fair value of monetary securities denominated in foreign currency classified as available for sale are distinguished from changes in foreign exchange differences arising from changes in amortized cost of the security and other changes in the carrying value of the securities. Differences from conversion-related changes in the amortized cost are recognized in profit or loss, and other changes in carrying amount are recognized in equity.
Differences arising from converting non- monetary financial assets and liabilities are reported as part of profit or loss in fair value. Differences arising from converting non- monetary assets and liabilities as assets at fair value through profit or loss are recognized in profit or loss as part of the profits or losses from fair value. Differences arising from converting non- monetary financial assets such assets classified as available for sale are included in the reserve of the equity on available-for- sale financial assets.
In the consolidated financial statements, all individual financial statements of subsidiaries and jointly controlled entities, which originally presented in a currency other than the functional currency of the Group (none of which has the currency of a hyperinflationary economy), have been converted into Euro.
Assets and liabilities have been converted into euros at the closing rate at the balance sheet date.
Revenue and expenses have been converted into the Group's presentation currency at the average exchange rates during the reporting period; unless there are significant fluctuations in which case income and expenses are translated at the exchange rate at the transaction dates.
Any differences arising from this procedure have been transferred to the translation reserve in the balance sheet equity.
Goodwill and fair value adjustments arising from an acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated into euros at the closing rate
On consolidation, exchange rate differences arising from the conversion of the net investment in foreign operations, and of borrowings and other currency instruments that are designated hedges of a net investment in a foreign operation directly in equity through the statement of equity changes.
When a foreign operation is partially disposed or sold, exchange differences that were recorded in equity are recognized in profit or loss in the period of disposal or sale as part of the gain or loss on sale.
The Group firstly adopted IFRS 8 "Operating segments" in year 2009.
The adoption of the new standard has not affected the way in which the Group identifies its operating segments for the purpose of providing information and the Group now presents the results of each segment based on the data that is used by the Management for internal reporting.
A business segment is a group of assets and operations engaged in providing products and services which are subject to risks and returns different from those of other business segments. A geographical segment is a geographical region in which products are sold and services provided are subject to risks and returns different from other areas. Geographically, the Group operates mainly in Greece, Cyprus and Serbia, while having interests in other countries (see § 4 «Group Structure").
The going concern Business segments shown are renting rooms, food and beverage sales and other activities (Income SPA-Health Club, Telephone Revenue, etc.).
If total external revenue, which are presented by operating segments constitutes less than 75% of the Group's earnings, then other sectors identified as reportable segments until at least 75% of the Group's earnings is included in the reportable operating sectors.
Operating segments that do not meet any of the quantitative thresholds set by IFRS 8 are not considered reportable segments and are not separately disclosed if the management believes that information about the separate area is not useful to users of financial statements.
The accounting principles used by the Group for the purposes of Reporting by segment under IFRS 8 are the same as those used in the preparation of the financial statements
There have been no changes compared to the previous year valuation methods used to determine gain or damage of the sector. There have been no asymmetrical allocations to the reportable segments. Asymmetric division is for example if a company allocates the depreciation expense to a geographical sector without sharing the depreciable assets.
Revenues are recognized when it is probable that future economic benefits will flow into the entity and these benefits can be measured reliably.
The revenue is measured at the fair value of the consideration received and it is net of value added tax, returns, rebates and any kind of reduction after limiting the sales within the Group.
The amount of revenue is considered that can be reliably measured when all contingencies relating to the sale have been resolved.
Revenue from sale of goods is recognized when the significant risks and rewards of ownership of the goods have been passed to the buyer, usually on dispatch of those goods.
Revenue from fixed price contracts is recognized based on the stage of completion of the transaction at the balance sheet date. Under the percentage of completion method, revenue is generally recognized based on service activity and performance to date as a percentage of total services to be performed.
When the outcome of the transaction involving the rendering of services cannot be estimated reliably, revenue is recognized only to the extent that the following costs are recoverable.
The amount of the selling price associated with an agreement for services to be provided subsequently recorded into deferred amount and is recognized as income over the period in which services are provided. This income (deferred income) is included in the item "other liabilities".
In cases that original revenue estimates are changed, costs or the completion stage is revised. These revisions may result in increases or decreases in estimated revenue or costs and are shown in the Statement of Comprehensive Income of the period. Such cases, should they be revised, are disclosed by the Management.
Income from interest is recognized using the effective interest method that is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument or, when appropriate, a shorter period to the net carrying amount of the financial asset or liability.
When a receivable is impaired, the Group reduces the carrying value of the amount expected to be recovered, which the amount is resulting from the estimated future cash flows discounted at the effective interest rate of the instrument and continues the periodic unwinding of the discount as interest income. Incomes from interest on loans that have been impaired are recognized using the original effective interest rate..
Incomes from royalties are recognized according to the accrual inputs / outputs, depending on the substance of the relevant agreement.
Revenues from dividends are recognized when finalized the Group's right to receive payment from the shareholders..
Operating expenses are recognized in the Statement of Comprehensive Income over the use of the service or the date of creation. Expenditure for warranties is recognized and charged against the related provision when the corresponding revenue is recognized.
Customer loyalty programs give customers incentives to purchase products or services from a company. If a customer buys goods or services, then the company grants award credits « points" which the customer can redeem in the future for free or discounted products / services. These programs may be run by the company itself or by a third party. IFRC 13 can be applied to all the award credits loyalty programs a company can provide to its customers as part of a transaction. IFRC 13 applies to annual periods beginning on or after 1 July 2008. The retrospective application is required while earlier application is encouraged as long as it is disclosed in the notes to the financial statements. The implementation of the above program does not affect the Group's results.
Borrowings are recognized initially at fair value, which included bank charges and commissions.
The Company's management believes that the interest paid in connection with loans is equivalent to the current market interest rates and, therefore, there is no reason for any adjustments to the value at which these liabilities are presented.
Any difference between the proceeds ( net of transaction costs ) and the redemption value is recognized in the income statement over the term of the loan.
Borrowings are classified as current except when the Group has an unconditional right to defer settlement of the liability for at least twelve months after the balance sheet date. Borrowing costs are recognized as expenses in the period in which they are incurred.
The Group capitalizes all borrowing costs that can be directly attributable to acquisition, construction or production of an asset that meets that qualifying conditions.
Goodwill acquired in a business combination will be initially valued at historical cost, as the extra cost of the business combination exceeding the buyers participation in the net fair market value of identifiable assets, to the obligations and potential obligations. After the initial recognition, goodwill will be valued at historical cost less any accumulated impairment losses. The acquirer will test goodwill for impairment on an annual basis or more often if events or changing conditions indicate the possibility of impairment.
The impairment test procedure is described in § 3.10.3 "Impairment test of tangible and intangible assets".
An intangible asset is initially valued at historical cost. The cost of an intangible asset acquired in a business combination is part of the fair value of the asset on the acquisition date.
After the initial recognition, intangible assets are valued at historical cost less accumulated depreciation and any impairment loss.
Acquired licenses regarding software are capitalized based on the purchasing and installation expense.
Expenses related to the maintenance of the software are recorded in the expenses of the period they occurred.
The useful lives of intangible assets are either definite or indefinite depending on their nature.
Intangible assets with definite useful life are amortized over their useful life and depreciation commences when the asset is available for use and is recognized in the category of operating expenses.
The period and depreciation method are reviewed at least in each fiscal year. If the expected useful life or the expected consumption rate of the future economic benefits embodied in the asset are changed, the amortization period or method are changed respectively. Such changes are accounted for as changes in accounting estimates.
Intangible assets with indefinite useful lives are not amortized but are tested at least annually for impairment and to determine whether management's assessment of the indefinite useful lives of these intangible assets is supported. If not supported , the change in the useful life assessment from indefinite to limited is treated as a change in an accounting estimate in accordance with IAS 8. Gains or losses arising from the sale of an intangible asset are determined as the difference between the sale amount and the carrying amount of the asset and is recognized in the income statement in the item " Other income " or "Other expenses".
Intangible assets include acquired software used in the production or management.
The costs capitalized are amortized on a straight-line basis over the estimated useful lives (three to five years). Additionally, the acquired software is also tested for impairment.
Expenses related to research activities are recorded as an expense during the period.
Costs incurred during the development phase of the new, customized to client needs, systems and telecommunications software are recorded as intangible assets if they meet the following conditions:
The directly attributable to development costs include the cost of benefits for employees to develop the software along with an amount of directly attributable costs. The cost of internally generated software development is recognized as an intangible asset. Until the completion of the development project , the assets are subject to impairment review . Depreciation begins with the completion of the asset during the period of expected future sales from the related project, on a straight line method . All other development expenditure is recognized as an expense during the period.
Buildings, technical equipment, furniture are shown at historical cost or at historical cost less any accumulated depreciation and any accumulated impairment losses. The cost also includes the cost of spare parts of some tangible assets that require replacement at regular intervals, if the criteria for acknowledgment are fulfilled. The artwork owned by the Group is not depreciated.
The costs of daily maintenance of property, plant and equipment are recognized in profit or loss when incurred.
If the carrying value of tangible assets has suffered depreciation or an impairment loss, it shall be recorded as described in §3.10.3.
The gain or loss on sale of the land will be determined as the difference between the net disposal proceeds, if any, and the carrying amount of the asset and is recorded in profit or loss statement
Depreciation is calculated using the straight line method over the entire useful life of the assets. For works of art held by the company, no depreciation is calculated.
The buildings that have been acquired through financial leases are depreciated throughout their estimated useful lives (determined in relation to comparable owned assets), if shorter.
The useful lives of tangible assets of the Group (in years) are summarized below:
| Buildings & building facilities | 4-33 |
|---|---|
| Machinery & Equipment | 2-20 |
| Vehicles | 5-8 |
| Furniture | 2-33 |
| Office equipment /telephone devises | 3-33 |
| Printing / Hardware | 4-5 |
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate at each year end.
The assessment of whether an arrangement contains a lease, takes place at the beginning of the agreement, taking into account all available information and specific circumstances. After the beginning of the agreement, a reassessment takes place, as to whether it contains a Lease when any of the following occurs:
a. There is a change in the terms of the contract, unless the change only renews or extends the agreement
b. Renewal option is exercised or an extension is agreed unless term of the renewal or extension was initially included in the lease term
If an agreement is reassessed the accounting treatment for leases applies from the date the change in conditions involving reassessment for (a), (c ) or (d ), and from the date of renewal or extension period for case (b).
The ownership of a leased asset is transferred to the lessee if transferred to him all the risks and rewards associated with the leased asset regardless of the legal form of the contract. At the start of the lease asset is recognized at fair value or , if lower , the present value of the minimum lease payments, including additional payments, if any, borne by the lessee. A corresponding amount is recognized as a liability of the lease regardless of whether some of the lease payments were paid in advance at the beginning of the lease.
The subsequent accounting treatment for assets acquired through financial leasing contracts, e.g. the depreciation method used and the determination of useful life, is the same as that applied to comparable acquired, except leases, assets. The accounting treatment of the respective obligation relates to the gradual reduction of the basis of the minimum lease payments minus finance charges, which are recognized as an expense in finance costs. Financial charges are allocated over the lease period and represent a constant periodic rate of interest on the remaining balance of the liability.
All other leases are treated as operating leases. Payments on operating leases are recognized as an expense on a straight (use link revenue and expense). The related costs, such as maintenance and insurance, are recognized as an expense when incurred.
Leases where the Group does not transfer substantially all the risks and rewards of the asset are classified as operating leases. Initial direct costs incurred by lessors in negotiating and arranging an operating lease are added to the book value of the leased asset and are recognized over the lease term as the lease income.
The Group's goodwill, intangible and tangible assets are subject to impairment tests. For the purposes of assessing impairment, certain assets are grouped in the smallest identifiable group of assets that generates cash inflows from its use (CGUs). As a result, some assets are tested individually for impairment and some are tested as CGUs.
The arising goodwill is allocated to each cash generating unit (CGU) expected to benefit from the synergies of the business combination. The CGUs represent the lowest level within the Group at which the goodwill is monitored for management purposes.
Any losses in value of a CGU to which goodwill has been allocated, first reduce the carrying value of goodwill. Any remaining impairment loss is shared proportionally to the other assets of the CGU.
When the Group sells an activity included in a CGU to which goodwill has been allocated , the goodwill shall be taken into account when determining the gain or loss on sale and apportioned to the sold activity. In this light , the goodwill allocated is measured by the relative values of the activity sold and withheld part of CGU. Alternatively, when the Group can reliably assess and demonstrate that some other method better reflects the goodwill associated with the sold operation , then this method is followed.
The assets or CGU including part of goodwill, other intangible assets with indefinite useful lives and assets not yet available for use are tested for impairment at least on an annual basis. The remaining assets and CGU tested for impairment whenever there are indications that the carrying value may not be recoverable. The impairment loss is the amount by which the carrying value of assets or CGU exceeds its recoverable value. Recoverable amount of an asset or CGU is the higher of fair value and value in use (implied by evaluating discounted future cash flows of the asset of CGU).
With the exception of goodwill, all assets are subsequently reassessed for cases where the impairment loss initially recognized may not exist .
We note that on 31.12.2014 the Group fully impaired the goodwill of € 5.731 k. The derecognition of goodwill in the previous year concerned € 3.483 k of the subsidiary BEOGRADSKO MESOVITO PREDUZECE and € 2.248 k of the subsidiary EXCELSIOR BELGRADE SOCIATE OWNED. The Group no longer recognises goodwill.
The financial assets of the Group include loans and receivables.
The impairment testing takes place at least at every reporting date of the financial statements or when there is material evidence that a financial asset or group of financial assets have suffered impairment or not.
Loans and receivables are non -derivative financial assets with fixed determinants and payments that are not quoted in an active market. They arise when the Group provides money , goods or services directly to a debtor with no commercial intent. Loans and receivables are measured at amortized cost using the effective interest method, less any provision for impairment . Any change in the value of loans and receivables is recognized in profit or loss when the loans and receivables are written off or reduce their value or during the period of depreciation.
Certain receivables are tested for impairment per individual requirement (for example for each customer) where the collection of the receivable is classified overdue at the date of the financial statements or in cases where objective evidence indicates the need for impairment . Other receivables are grouped and tested for impairment in their entirety. These groups have in common the characteristic geographical distribution, activity sector of contractors and, if applicable, other similar credit risk characteristics that characterize them.
Loans and receivables and the loans are included in current assets, except those maturing after 12 months from the balance sheet date. These are characterized as non-current assets. At the balance sheet, they are classified as trade and other receivables and comprise the biggest part of the financial assets of the Group.
Inventories include raw materials, materials and goods purchased. .
Cost includes all costs incurred in bringing the inventories to their present location and condition, which are directly attributable to the production process, as well as a part of general expenses associated with the production, which is absorbed in the normal capacity of the production facilities.
The financial cost is not taken into account .
At the balance sheet date, inventories are valued at the lowest level between cost of acquisition and net realizable value.
Net realizable value is the estimated selling price in the ordinary course of business activities, minus estimated cost which is necessary to make the sale.
Cost is determined using the method of weighted average cost.
The current tax asset / liability includes obligations or receivables by the tax authorities relating to the current or previous reporting periods have not been paid until the balance sheet date.
Calculated according to the tax rates and tax laws applicable to the fiscal period to which they relate, based on the taxable profit for the year. All changes to the current tax assets or liabilities are recognized as tax expense in the income statements.
Deferred income tax is calculated on the liability method focuses on temporary differences. This involves comparing the accounting value of assets and liabilities of the consolidated financial statements with their respective tax bases.
Deferred tax assets are recognized to the extent that it is likely to be offset against future income taxes.
Deferred tax liabilities are recognized for all taxable temporary differences. In addition and in accordance with IAS 12, deferred tax is not recognized in relation to goodwill.
No deferred tax is recognized on temporary differences associated with investments in subsidiaries if reversal of these temporary differences can be controlled by the company while it is expected that the temporary difference will not reverse in the future. In addition, tax losses can be carried to subsequent periods and tax credits to the Group are recognized as deferred tax assets.
No deferred tax is recognized under initial recognition of an asset or liability in a transaction that is not a business combination and at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which they will settle the asset or liability, based on tax rates that have been enacted or substantively enacted by the balance sheet date.
Most changes in deferred tax assets or liabilities are recognized as tax expense in the results. Only changes in deferred tax assets or liabilities related to changes in the value of the asset or liability that is charged directly to equity are charged or credited directly to equity.
The Group recognizes a previously unrecognized deferred tax asset to the extent that it is probable that future taxable profit will allow the recovery of the deferred tax asset.
Deferred tax assets are reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow the benefit of part or all of the deferred tax asset.
Cash and cash equivalents comprise cash at bank and cash available and short term highly liquid investments such as money market securities and bank deposits with original maturities of three months or less. The market values of financial assets are stated at fair value through profit or loss.
For the purpose of the Consolidated Cash Flow statement, cash and cash equivalents consist of cash and cash equivalents as defined above, excluding the outstanding balances of bank overdrafts.
Share capital is determined using the nominal value of the shares issued. Ordinary shares are classified as equity.
The share capital increase through cash payment includes any share premium account in the original version of the share capital. Any transaction costs associated with the issuance of the shares and any related income tax benefit resulting deducted from the share capital increase.
If the economic entity acquired their own equity instruments, those instruments (the "shares") are deducted from equity. If such shares are subsequently reissued, the consideration received (net of related transaction costs and the related income tax benefit) included in equity attributable to shareholders. According to the purchase, sale, issue or cancellation of own equity instruments of the entity do not recognize any profit or loss.
The revaluation reserve comprises gains and losses due to the revaluation of certain financial assets and tangible assets. Exchange differences from the exchange are included in the conversion reserve. Retained earnings include the current results and those of previous periods as disclosed in the results.
A defined benefit plan is a pension plan that does not fall under a defined contribution plan. Typically, defined contribution plans define an amount of benefit that an employee will receive on retirement, usually dependent on factors such as age, years of service and compensation.
The liability recognized in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the balance sheet date of analogue unrecognized gains or losses and past service costs. The defined benefit obligation is calculated annually by independent actuaries using the Projected Credit Unit Method. The present value of the defined benefit obligation is determined by discounting the expected future cash outflows using interest rates of high-yield corporate bonds, which are shown in the currency in which the benefits will be paid and have terms to maturity depending on the terms of the related pension liability.
Actuarial gains and losses arising from experience adjustments and changes in proportionate matters at the end of the previous reporting period exceeded the greater of 10% of the fair value of plan assets or 10% of the defined benefit obligation are charged or credited to results based on the expected average remaining working lives of the employees participating in this program
Past service costs are recognized immediately in income, unless the changes to the pension plans are voluntary for the employees remaining in service for a specified period (vesting date). In this case, the past service costs are amortized on a consistent basis over the vesting period.
A defined contribution plan is a pension plan under which the Group pays fixed contributions into an independent administrative institution in mandatory, contractual or voluntary basis. The company will have no legal or constructive obligation to pay further contributions if the fund does not hold sufficient assets to pay all employee benefits, for services rendered current or prior years. Prepaid contributions are recognized as an asset to the extent possible a refund or a reduction in future payments.
Termination benefits are payable when service employment is terminated by the Group before the normal retirement date, or when an employee accepts voluntary redundancy in exchange for these benefits.
The Group recognizes termination benefits when it is demonstrably committed to either terminate the employment of current employees according to a detailed formal plan without possibility of withdrawal or providing termination benefits as a result of an offer made to encourage voluntary redundancy. When the benefits of retirement are due for more than 12 months, after the balance sheet date they are discounted to present value.
The Group's financial liabilities include bank loans and overdraft accounts (overdraft), trade and other liabilities and finance leases. The Group's financial liabilities (excluding loans) are shown in the balance sheet in the item "Non-current financial liabilities" and in the "Other trading liabilities".
Financial liabilities are recognized when the Group has entered into a contractual agreement of instrument and derecognized when the Group is exempted from or is canceled or expires.
The interests are recognized as an expense in "finance costs" in the income statement.
Liabilities from finance leases are measured at initial value less the amount of financial capital repayments.
Trade payables are recognized initially at their nominal value and subsequently measured at amortized cost less settlement payments.
Dividends to shareholders are included in "Other current financial liabilities' when the dividends are approved by the General Meeting of Shareholders.
Gains and losses are recognized in the income statement when the liabilities are written off, as well as through the amortization.
When an existing financial liability is exchanged with another liability of different form with the same lender but with substantially different terms, or the terms of an existing liability are substantially modified, for example an
exchange or modification, it is treated as a write off of the original liability and the recognition of a new liability. Any difference in the respective numerical amounts is recognized in the income statement.
Bank loans provide long-term and / or short-term financing of the Group operations. All loans are initially recognized at cost, being the fair value of the consideration received excluding the cost of issuing the loan.
After initial recognition, borrowings are measured at amortized cost and any difference between the revenue and the payoff is recognized in the income statement over the period of lending using the effective interest rate method.
The amortized cost is calculated taking into account any issue costs and any discount or premium on settlement amount.
The bond represents the Group's liability for future coupon payments and repayment of principal payment. If the bond loan is convertible then the equity component of the loan represents the value of the right of the bondholders to convert into shares of common stock and is presented in equity (net of applicable tax).
Provisions are recognized when a present obligation is likely to lead to an outflow of economic resources for the Group, in the case that this outflow can be reliably estimated. The timing or amount of the outflow may be uncertain.
A present obligation arises from the presence of a legal or constructive obligation resulting from past events, for example, product warranties, legal disputes or onerous contracts
Restructuring provisions are recognized only if a detailed formal plan has been developed and implemented, or management has at least announced the features of the program to those who are affected by it. Provisions are not recognized for future operating losses.
When some or all of the expenditure required to settle a provision, is expected to be reimbursed by another party, the reimbursement will be recognized when, and only when, it is virtually certain that reimbursement will be received if the entity settles the obligation and the obligation is treated as a separate asset. The amount recognized for the reimbursement shall not exceed the amount of the provision.
The expense relating to a provision is presented in results, net of the amount recognized for the reimbursement.
A provision is used only for expenditures for which it originally formed a prediction. Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate.
Provisions are measured at the expected cost required to determine the present obligation, based on the most reliable evidence available at the balance sheet date, including the risks and uncertainties associated with the present obligation.
When the effect of the time value of money is material, the amount of the provision is the present value of the expenditures expected to be required to settle the obligation.
The pre-tax discount rate reflects current market assessments of the time value of money and the risks specific to the liability. The rate does not reflect risks for which future cash flow estimates have been adjusted.
When the method of discounting is used, the carrying amount of a provision increases in each period to reflect the passage of time. This increase is recognized as borrowing cost in the results. When a number of similar obligations exist, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognized even if the likelihood of an outflow to an element included in the class of obligations may be small.
If it is no longer probable that an outflow of resources embodying economic benefits will be required to settle the obligation, the provision will be reversed.
In such cases where the possible outflow of economic resources as a result of present obligations is considered improbable, or the amount of the provision cannot be estimated reliably, no liability is recognized in the consolidated balance sheet, unless considered in the context of the business combination.
These contingent liabilities are recognized as part of allocating the cost of acquiring the assets and liabilities in the business combination. Subsequently they are measured at the highest amount of a comparable provision as described above and at the amount initially recognized, less any depreciation.
Possible inflows of economic benefits for the Group that do not yet meet the criteria of an asset are considered contingent assets.
The Group structure of LAMPSA S.A. on December 31, 2016 is presented below as follows:
| Company | Func. Currency |
Domicile | Participating interest % |
Consolidation Method |
Participation |
|---|---|---|---|---|---|
| LAMPSA HELLENIC HOTELS S.A . | € | GREECE | Parent | ||
| LUELLA ENTERPRISES LTD | € | CYPRUS | 100,00% | Full | Direct |
| BEOGRADSKO MESOVITO PREDUZECE | € | SERBIA | 93,90% | Full | Indirect |
| EXCELSIOR BELGRADE SOCIATE OWNED | € | SERBIA | 80,33% | Full | Direct |
| TOURISTIKA THERETRA S.A. | € | GREECE | 50,00% | Proportionate | Direct |
| MARKELIA ENTERPRISES COMPANY LTD | € | CYPRUS | 100,00% | Full | Indirect |
On 31/12/2015 the company NORTH HAVEN Ltd was not consolidated because it was under voluntary liquidation and all of its assets have been transferred to Luella Enterprises Ltd, which is the sole 100% shareholder. The item "Foreign Currency Translation Differences Reserves" with a debit balance of € 502 k in the consolidated financial statements was transferred to Retrained Earnings in the income statement. It is noted that there is no burden on Equity, as this is reclassification through profit or loss. There is no effect on the Group from the cessation of consolidation of NORTH HEAVEN Ltd.
In accordance with the provisions of IFRS 8, the identification of operating segments is based on the "management approach". According to this approach, the information to be disclosed regarding the operating segments should be based on internal organizational and management structure of the Group and the main items of internal financial reporting provided to the key decision makers. The Management monitors the operating results of its operating segments separately for the purpose of making decisions on resource allocation and performance assessment thereof. . It is to be noted that the Group applies the same accounting principles for the measurement of operating segment's results as those in the Financial Statements. The Group financing comprises "Financial Expenses" and "Financial income" and income taxes are monitored at the consolidated level without being allocated to result generating operating segments.
Transactions between operating segments are performed within the regular business operations of the Group. Inter-segment sales are eliminated on consolidation.
The operating segments presented include renting rooms, food and beverage sales and other activities (Income SPA-Health Club, Telephone Revenue, etc.). The Group results, assets and liabilities per segment in respect of the presented periods are analyzed as follows:
| RENTING | SALE OF FOOD | OTHER | |||
|---|---|---|---|---|---|
| Segment results as at 31/12/2016 | ROOMS | AND BEVERAGE | ACTIVITIES | NON-ALLOCATED | TOTAL |
| Sales | |||||
| - to external clients | 33.698 | 15.787 | 2.895 | 52.380 | |
| - to other segments | - | ||||
| Net sales of the segment | 33.698 | 15.787 | 2.895 | - | 52.380 |
| Financial Income | 18 | 9 | 2 | 28 | |
| Financial Expenses | (709) | (349) | (68) | (1.126) | |
| Depreciation | (3.638) | (1.120) | (212) | (4.970) | |
| Results (Losses) from assets impairment | (2.192) | (1.079) | (209) | (3.479) | |
| Earnings before tax | 4.153 | 2.043 | 396 | (3.479) | 3.112 |
| Income tax | (617) | (303) | (59) | (215) | (1.194) |
| Earnings after tax | 3.420 | 1.683 | 326 | (3.510) | 1.919 |
| 31/12/2016 | |||||
| Non-current assets | 70.523 | 34.702 | 6.717 | 111.942 | |
| Other Non-current Assets (Deferred Tax | |||||
| Assets) | 8.092 | 8.092 |
| Other assets | 7.546 | 3.713 | 719 | - | 11.978 |
|---|---|---|---|---|---|
| Total Assets | 78.070 | 38.415 | 7.435 | 8.092 | 132.012 |
| Total Liabilities | 29.649 | 14.589 | 2.824 | 47.062 |
| SALE OF FOOD | |||||
|---|---|---|---|---|---|
| RENTING | AND | OTHER | |||
| Segment results as at 31/12/2015 | ROOMS | BEVERAGE | ACTIVITIES | NON-ALLOCATED | TOTAL |
| Sales | |||||
| - to external clients | 33.307 | 15.229 | 2.986 | 51.522 | |
| - to other segments | - | - | |||
| Net sales of the segment | 33.307 | 15.229 | 2.986 | - | 51.522 |
| - | |||||
| Financial Income | 31 | 15 | 3 | 49 | |
| Financial Expenses | (833) | (410) | (79) | (1.322) | |
| Depreciation | (3.612) | (1.112) | (211) | (4.935) | |
| Results (Losses) from assets impairment | (1.241) | (671) | (122) | (2.035) | |
| Earnings before tax | 2.447 | 1.204 | 233 | (2.336) | 1.548 |
| Income tax | (122) | (60) | (12) | (100) | (294) |
| Earnings after tax | 2.324 | 1.144 | 221 | (2.435) | 1.254 |
| 31/12/2015 | |||||
| Non-current assets | 72.741 | 35.793 | 6.928 | 115.463 | |
| Other Non-current Assets (Deferred Tax | |||||
| Assets) | 8.518 | 8.518 | |||
| Other assets | 6.167 | 3.035 | 587 | - | 9.789 |
| Total Assets | 78.909 | 38.828 | 7.515 | 8.518 | 133.770 |
| Total Liabilities | 31.825 | 15.660 | 3.031 | 50.516 |
The headquarters of the Group are in Greece. Geographically, the Group operates mainly in Greece, Cyprus, Serbia, and has investments in other countries (see § 4 "Group Structure").
| 1/1-31/12/2016 | 31/12/2016 | 1/1-31/12/2015 | 31/12/2015 | |
|---|---|---|---|---|
| NON-CURRENT | ||||
| Amounts in thousands € | SALES | ASSETS | SALES | NON-CURRENT ASSETS |
| GREECE | 42.072 | 73.995 | 41.443 | 72.590 |
| CYPRUS | - | - | - | - |
| SERBIA | 10.308 | 37.947 | 10.080 | 42.873 |
| Total | 52.380 | 111.942 | 51.522 | 115.463 |
Land, buildings and equipment valued at the date of transition to IFRS (1/1/2005) at acquisition cost less any accumulated amortization and any impairment losses.
The Group and the Parent Company property items are burdened with liens amounting to € 48,850 as well as \$ 25,500 for outstanding loans amounting to € 31.460 k and € 30.166 k respectively.
| Amounts in thousands € | Land plots and buildings |
Mechanical equipment and vehicles |
Furniture and other equipment |
Fixed assets under construction |
Total |
|---|---|---|---|---|---|
| Net Book Value as at 31/12/2014 | 113.059 | 758 | 5.043 | 124 | 118.983 |
| Additions | 147 | 81 | 918 | 1.572 | 2.718 |
| Disposal of assets | 1.080 | 76 | 370 | (1.526) | (0) |
| Reclassifications | (2.035) | - | - | - | (2.035) |
| Impairment loss recognised in the income | |||||
| statement | (3.640) | (240) | (974) | - | (4.855) |
| Net Book Value as at 31/12/2015 | 108.612 | 674 | 5.357 | 170 | 114.812 |
|---|---|---|---|---|---|
| Additions | 468 | 498 | 2.209 | 1.765 | 4.940 |
| Disposal of assets | - | (285) | (0) | - | (286) |
| Reclassifications | 81 | 14 | 237 | (350) | (19) |
| Impairment loss recognised in the income | |||||
| statement | (3.479) | - | - | - | (3.479) |
| Depreciation costs | (3.594) | (230) | (1.063) | - | (4.887) |
| Depreciation of disposed assets | - | 246 | (0) | - | 246 |
| Net Book Value as at 31/12/2016 | 102.088 | 917 | 6.739 | 1.584 | 111.328 |
| Land plots and | Mechanical equipment and |
Furniture and other |
Fixed assets under |
||
|---|---|---|---|---|---|
| Amounts in thousands € | buildings | vehicles | equipment | construction | Total |
| Gross Book Value and | |||||
| impairment | 163.750 | 9.272 | 23.589 | 170 | 196.782 |
| Accumulated depreciation | (55.138) | (8.597) | (18.233) | (0) | (81.970) |
| Net Book Value as at | |||||
| 31/12/2015 | 108.612 | 674 | 5.357 | 169 | 114.812 |
| Gross Book Value and | |||||
| impairment | 160.820 | 9.498 | 26.035 | 1.584 | 197.937 |
| Accumulated depreciation | (58.732) | (8.581) | (19.296) | (0) | (86.610) |
| Net Book Value as at | |||||
| 31/12/2016 | 102.088 | 917 | 6.739 | 1.584 | 111.327 |
| Land plots and | Mechanical equipment and |
Furniture and other |
Fixed assets under construction |
||
|---|---|---|---|---|---|
| Amounts in thousands € | buildings | vehicles | equipment | Total | |
| Net Book Value as at | |||||
| 31/12/2014 | 69.903 | 158 | 2.313 | 110 | 72.484 |
| Additions | 147 | 71 | 915 | 1.315 | 2.450 |
| Reclassifications | 1.051 | 21 | 195 | (1.267) | - |
| Depreciation costs | (2.091) | (46) | (391) | - | (2.528) |
| Net Book Value as at | |||||
| 31/12/2015 | 69.010 | 205 | 3.032 | 158 | 72.406 |
| Additions | 468 | 286 | 1.811 | 1.579 | 4.143 |
| Disposal of assets | (226) | (0) | (227) | ||
| Reclassifications | 81 | - | 134 | (215) | - |
| Depreciation costs | (2.167) | (60) | (494) | - | (2.721) |
| Depreciation of disposed assets | 226 | (0) | 226 | ||
| Net Book Value as at | |||||
| 31/12/2016 | 67.392 | 431 | 4.482 | 1.522 | 73.828 |
| Amounts in thousands € | Land plots and buildings |
Mechanical equipment and vehicles |
Furniture and other equipment |
Fixed assets under construction |
Total |
|---|---|---|---|---|---|
| Gross Book Value | 100.018 | 5.182 | 12.462 | 158 | 117.821 |
| Accumulated depreciation and impairment | -31.008 | -4.977 | -9.429 | 0 | -45.416 |
| Net Book Value as at 31/12/2015 | 69.009 | 205 | 3.032 | 158 | 72.405 |
| Gross Book Value | 100.567 | 5.242 | 14.404 | 1.522 | 121.738 |
| Accumulated depreciation and impairment | -33.175 | -4.811 | -9.921 | 0 | -47.910 |
| Net Book Value as at 31/12/2016 | 67.391 | 431 | 4.483 | 1.522 | 73.827 |
During the fiscal year for the Company and the Group, net investments in tangible and intangible assets amounted to € 4.940 k and € 4.143 (2015: € 2.718 k and € 2.450 k respectively).
The recoverable amount of subsidiaries Excelsior and BMP was defined as that of € 5.6 m and € 31.9 m respectively on 31/12/2016. Impairment was defined based on fair value less distribution costs applying the discounted cash flows method.
Within the year, the Group recognised impairment loss of € 3,479 k (from subsidiary BMP - by € 1,678 k and from subsidiary Excelsior – by € 1,801 k) in its property, plant and equipment as a results of adverse economic conditions in Serbia. The recoverable amount of € 5.6 m and € 31.9 m, recognised for property, plant and equipment of Excelsior and BMP respectively, was based on fair value less distribution costs applying the discounted cash flows method at a discount rate 12% before tax. Discounted cash flows method includes non-observable data and is therefore classified at Level 3 of the fair value hierarchy.
As at 31 December 2016 and 31 December 2015 the Group and the Company had no commitments for capital expenditures.
The intangible assets of the Group are as follows:
| Software licenses | Other intangible | ||
|---|---|---|---|
| Amounts in thousands € | assets | Total | |
| Net Book Value as at 31/12/2014 | 146 | 157 | 304 |
| Additions | 51 | 5 | 56 |
| Amortization | (49) | (31) | (80) |
| Net Book Value as at 31/12/2015 | 149 | 131 | 280 |
| Net Book Value as at 31/12/2015 | 149 | 131 | 280 |
| Additions | 21 | 8 | 28 |
| Reclassifications | 6 | 12 | 19 |
| Amortization | (53) | (30) | (83) |
| Net Book Value as at 31/12/2016 | 123 | 121 | 244 |
Acquisition value and accumulated amortization are as follows:
| Software licenses | Other intangible | ||
|---|---|---|---|
| Amounts in thousands € | assets | Total | |
| Gross book value | 772 | 436 | 1.208 |
| Accumulated amortization and impairment | (623) | (305) | (929) |
| Net Book Value as at 31/12/2015 | 149 | 131 | 280 |
| Gross book value | 799 | 456 | 1.255 |
| Accumulated amortization and impairment | (676) | (335) | (1.012) |
| Net Book Value as at 31/12/2016 | 123 | 121 | 244 |
Changes in intangible assets of the Company are analytically presented below as follows:
| Amounts in thousands € | Software licenses | Total |
|---|---|---|
| Net Book Value as at 1/1/2015 | 93 | 93 |
| Additions | 15 | 15 |
| Amortization | (30) | (30) |
| Net Book Value as at 31/12/2015 | 78 | 78 |
| Additions | 15 | 15 |
| Amortization | (32) | (32) |
| Net Book Value as at 31/12/2016 | 61 | 61 |
Acquisition value and accumulated amortization are as follows:
| Amounts in thousands €. € | Software licenses | Total |
|---|---|---|
| Gross book value | 491 | 491 |
| Accumulated amortization and impairment | (414) | (414) |
| Net Book Value as at 31/12/2015 | 78 | 78 |
| Gross book value | 506 | 506 |
| Accumulated amortization and impairment | (445) | (445) |
| Net Book Value as at 31/12/2016 | 61 | 61 |
Intangible assets are free of liens.
Analysis of the investments of the parent Company in subsidiaries and associates is presented below as follows:
| ACQ. | ACQ. | ||||||||
|---|---|---|---|---|---|---|---|---|---|
| VALUE | VALUE | ||||||||
| as at | as at | INDIR. PART. |
|||||||
| Amounts in | 31/12/201 | 31/12/201 | DOMICILE | Func. | DIR. PART. | Inter. | RELATIONS | CONS. | OPER. |
| thousands € | 6 | 5 | COUNTRY | Currency | Inter. % | % | HIP | METHOD | SEGMENT |
| LAMPSA HELLENIC HOTELS S.A |
- | - | Greece | € | PARENT | PARENT | - | Hotel services | |
| FULL | |||||||||
| LUELLA | CONSOLID | ||||||||
| ENTERPRISES LTD | 18.732 | 18.730 | Cyprus | € | 100,00% | SUBSIDIARY | ATION | Holding | |
| EXCELSIOR | |||||||||
| BELGRADE SOCIALLY OWNED HOTEL & |
FULL | ||||||||
| CATERING TOURIST | CONSOLID | ||||||||
| ENTERPRISES | 7.434 | 7.435 | Serbia | € | 80,33% | SUBSIDIARY | ATION | Hotel services | |
| BEOGRADSKO | FULL | ||||||||
| MESOVITO | CONSOLID | ||||||||
| PREDUZECE A.D. | - | - | Serbia | € | - | 93,90% | SUBSIDIARY | ATION | Hotel services |
| MARKELIA | FULL | ||||||||
| ENTERPRISES COMPANY LTD |
- | - | Cyprus | € | - | 100,00% | SUBSIDIARY | CONSOLID ATION |
Services |
| TOTAL | 26.166 | 26.166 | |||||||
| PROVISION FOR | |||||||||
| MPAIRMENT | (2.926) | (2.326) | |||||||
| NET VALUE | 23.204 | 23.840 |
As a result of impairment test, a loss of € 636 k has arisen regarding the company EXCELSIOR BELGRADE SOCIATE OWNED burdening the Statement of Comprehensive Income.
Valuation method is based on expected cash flows of two hotels (BEOGRADSKO MESOVITO PREDUZECE and EXCELSIOR BELGRADE SOCIATE OWNED) regarded as cash generating units.
The Management uses assumptions that it considers reasonable and which are based on the best possible information at its disposal, effective as at the Financial Statements reporting date. However, discounted cash flow method includes significant non-observable variables and is classified at hierarchy Level 3.
Within the current year:
The parent company received from LUELLA ENTERPRISE Co dividends totally amounting to € 650 k (2015: € 1.535 k), following the decisions of the General Meetings of the subsidiary made in 2016.
The change in investments of the parent company is as follows:
| Amounts in thousands € | 31.12.2016 | 31.12.2015 |
|---|---|---|
| Opening balance | 23.840 | 23.840 |
| Impairment loss recognized in the income | ||
| statement | (636) | |
| Closing balance | 23.204 | 23.840 |
The Group jointly participates with other parties (50%) in the company "Touristika Theretra S.A.".
Changes in Joint Ventures are presented in the following table:
| Acquisition value 31/12/2015 |
Profit after tax | Value 31/12/2016 (Investment in Joint Ventures) |
|
|---|---|---|---|
| TOURISTIKA THERETRA S.A. | 0 | 0 | 0 |
If positive, the percentage in Equity is presented in the Consolidated Statement of financial Position in the item of Assets "Investments in Joint Ventures".
Joint Venture acquisition cost in the parent company books is recorded as follows:
| Amounts in thousands € | Acquisition Value 31/12/2016 |
Acquisition Value 31/12/2015 |
|---|---|---|
| TOURISTIKA THERETRA S.A. | 9.260 | 9.260 |
| TOTAL | 9.260 | 9.260 |
| Provisions for impairment | (9.260) | (9.260) |
| TOTAL | - | - |
Condensed data on Touristika Theretra S.A. is presented below as follows:
| 31.12.2016 | 31.12.2015 | |
|---|---|---|
| Statement of Financial Position | ||
| Non-current Assets | 31.712 | 32.114 |
| Current Assets | 2.339 | 2.220 |
| Total Assets | 34.051 | 34.334 |
| Total Equity | (1.047) | (556) |
| Long-term Liabilities | 26.908 | 3.260 |
| Short-term Liabilities | 34.879 | 31.630 |
| Total Liabilities | 60.740 | 34.334 |
| Statement of Comprehensive Income | 01.01-31.12.2016 | 01.01-31.12.2015 |
| Sales | 9.901 | 9.488 |
| Total comprehensive income / (loss) | (491) | (1.158) |
| Depreciations | 1.718 | 1.763 |
| Income Tax | 92 | 561 |
Other long term receivables of the Group and the Company are analyzed below as follows:
| THE GROUP | THE COMPANY | |||
|---|---|---|---|---|
| Amounts in thousands € | 31.12.2016 | 31.12.2015 | 31.12.2016 | 31.12.2015 |
| Guarantees | 107 | 107 | 107 | 107 |
| Other receivables | 264 | 264 | - | - |
| Total | 371 | 371 | 107 | 107 |
The Group and the Company inventory is analyzed as follows:
| THE GROUP | ||||
|---|---|---|---|---|
| Amounts in thousands € | 31.12.2016 | 31.12.2015 | 31.12.2015 | |
| Goods | 817 | 713 | 761 | 665 |
| Raw materials | 265 | 257 | 151 | 145 |
| Spare parts | 122 | 137 | - | - |
| Total | 1.204 | 1.108 | 912 | 809 |
The Group has no pledged inventory.
The Group and the Company receivables are analyzed as follows:
| THE GROUP | THE COMPANY | ||||
|---|---|---|---|---|---|
| Amounts in thousands € | 31.12.2016 | 31.12.2015 | 31.12.2016 | 31.12.2015 | |
| Trade receivables from third parties | 1.753 | 1.229 | 1.534 | 1.003 | |
| Cheques receivable | 147 | 103 | 147 | 103 | |
| Less: provision for doubtful receivables | (193) | (143) | (182) | (132) | |
| Trade receivables - net | 1.708 | 1.189 | 1.500 | 974 | |
| Advance payment | 16 | 108 | 9 | 65 | |
| Miscellaneous debtors | 544 | 230 | 389 | 118 |
| Receivables from Greek State | 8 | 315 | - | - |
|---|---|---|---|---|
| Receivables from associates | 500 | 500 | 500 | 500 |
| Other Receivables | 1.068 | 1.154 | 898 | 683 |
| Prepaid expenses | 440 | 401 | 378 | 353 |
| Accrued income | 194 | 169 | 109 | 93 |
| Other current assets | 634 | 569 | 487 | 446 |
| Total other receivables | 1.702 | 1.723 | 1.385 | 1.129 |
| Total trade and other receivables | 3.410 | 2.912 | 2.884 | 2.103 |
All the above receivables are short-term. The fair value of these short-term financial assets is determined independently because the carrying value is considered to approximate their fair value. .
The Group's management periodically reassesses the adequacy of the allowance for doubtful receivables in connection with the credit policy and taking into account information of legal counsel, which arise from processing of historical data and recent developments of the cases they handle.
The provision for doubtful debts has been formed for specific customer balances that have exceeded the credit policy of the Group, for most of which the Group has made legal claims.
There are no liens on the group and the Company receivables.
The receivables of the Group and the parent company parent that are not impaired and are post due (over 90 days) amount to Euro 333 k (Euro 200 k in 2015).
The Group and the Company cash available is analyzed as follows:
| THE GROUP | THE COMPANY | |||
|---|---|---|---|---|
| Amounts in thousands € | 31.12.2016 | 31.12.2015 | 31.12.2016 | 31.12.2015 |
| Cash | 365 | 310 | 296 | 273 |
| Sight deposits | 7.000 | 5.460 | 2.930 | 2.681 |
| Total | 7.365 | 5.770 | 3.226 | 2.954 |
From the above deposits, there arose financial income for the Group and the Company amounting to € 28 k and 1 k respectively (2015: Group € 49 k, Company: € 4 k).
Sight deposits per currency are analyzed as follows:
| THE GROUP | THE COMPANY | ||||
|---|---|---|---|---|---|
| Amounts in thousands € | 31.12.2016 | 31.12.2015 | 31.12.2016 | 31.12.2015 | |
| Sight deposits in € | 6.955 | 5.212 | 2.919 | 2.489 | |
| Sight deposits in \$ | 262 | 208 | 262 | 208 | |
| Sight deposits in RSD | 117 | 107 | 14 | 14 |
The Group and the Company Equity is analyzed as follows:
| THE GROUP | THE COMPANY | |||
|---|---|---|---|---|
| Amounts in thousands € | 31.12.2016 | 31.12.2015 | 31.12.2016 | 31.12.2015 |
| Capital and reserves attributable to parent | ||||
| owners | ||||
| Share capital | 23.928 | 23.928 | 23.928 | 23.928 |
| Share premium | 38.641 | 38.641 | 38.641 | 38.641 |
| Other reserves | 1.302 | 1.385 | 1.289 | 1.372 |
| Retained earnings | 18.116 | 15.968 | 7.307 | 2.806 |
| Total | 81.987 | 79.922 | 71.165 | 66.747 |
| Non-controlling interest | 2.962 | 3.332 | - | - |
| Total Equity | 84.949 | 83.254 | 71.165 | 66.747 |
From the above, the statutory reserve is mandatory formed from the profits of each financial year and remains in equity of the Company to offset any losses incurred in the future and is taxed in each period in which they were formed and therefore is tax exempted.
Reserve actuarial income reflects actuarial gains and losses which are presented in a fiscal year and are recognized completely and directly in Comprehensive income of current year.
As far as the remaining reserves are concerned, they can be distributed to shareholders given that the attributable tax has been paid.
Changes in the "Statutory reserve" and the "Other reserves" of the Group and the Company are analyzed as follows:
| THE GROUP | ||||||
|---|---|---|---|---|---|---|
| Amounts in thousands € | Statutory reserves |
Extraordinary reserves |
Tax exempted reserves under special regulations |
Actuarial results reserves |
Other reserves |
Total |
| Balance as at 31/12/2014 | 878 | 404 | (702) | (194) | 127 | 513 |
| Changes within the FY | 702 | 170 | 872 | |||
| Balance as at 31/12/2015 | 878 | 404 | - | (24) | 127 | 1.385 |
| Changes within the FY | 140 | 0 | - | (223) | (82) | |
| Balance as at 31/12/2016 | 1.019 | 404 | - | (248) | 127 | 1.302 |
| THE COMPANY | ||||||
|---|---|---|---|---|---|---|
| Amounts in thousands € | Statutory reserves |
Extraordinary reserves |
Tax exempted reserves under special regulations |
Actuarial results reserves |
Other reserves |
Total |
| Balance as at | ||||||
| 31/12/2014 | 878 | 404 | - | (207) | 127 | 1.202 |
| Changes within the FY | - | 170 | 170 | |||
| Balance as at | ||||||
| 31/12/2015 | 878 | 404 | - | (37) | 127 | 1.372 |
| Changes within the FY | 140 | - | (223) | (83) | ||
| Balance as at | ||||||
| 31/12/2016 | 1.019 | 404 | - | (261) | 127 | 1.289 |
Detailed description of the change in the Equity of the Group and the Company is presented in the "Statement of Changes in Equity" of this report.
As at 31 December 2016, the Company's share capital amounts to € 23.927.680, divided into 21.364.000 common registered shares of nominal value € 1,12 each. The Company's shares are listed on the Athens Stock Exchange, in the category of low dispersion and specific characteristics, are traded on the stock exchange in Athens 'main market' and participate in the Travel & Leisure Sector, Branch Hotels.
There aren't at the end of the current fiscal year, shares of the parent company held by it or by its subsidiaries or jointly controlled companies.
The management of LAMPSA aiming to boost the liquidity of the Company, capital aid and the examination of a possible reduction of the financial costs through payment of loan capital over conventional will propose to the Annual General Meeting not to distribute dividends from the profit year. It should be noted that the proposed distribution is subject to approval of the annual ordinary general meeting of shareholders.
The profits of LAMPSA S.A. for 2016, amounting to € 4.641 k, are proposed to be distributed as follows:
| Amounts in thousands € | |
|---|---|
| Net profit for the year | 4.641 |
| Profit (Loss) for the previous year | 2.806 |
| Reserves 2016 | (140) |
| Retained earnings balance | 7.307 |
| Less: Proposed statutory reserves | (365) |
| Profits for distribution to shareholders | 6.942 |
| Initial Share | - |
| Additional Share | - |
| Retained earnings | 6.942 |
| Earning per share (in €) |
It should be noted that the proposed dividend is subject to approval of the annual ordinary general meeting of shareholders.
Provisions, made by the Group and the Company, are analyzed as follows:
| THE GROUP | ||||||
|---|---|---|---|---|---|---|
| Loss from shares |
Other provisions |
Tax audit differences |
Other provisions (legal claims) |
Total | Customers provisions |
|
| 31.12.2014 | 9 | 0 | - | 554 | 563 | 96 |
| Additional provisions | - | - | - | 59 | 59 | 132 |
| Used provisions | - | - | - | (29) | (29) | (67) |
| Unused amounts reversed | - | - | (4) | (4) | (19) | |
| Reclassifications | ||||||
| 31.12.2015 | 9 | 0 | - | 580 | 590 | 143 |
| Additional provisions | - | - | - | 42 | 42 | 50 |
| Used provisions | - | - | - | (1) | (1) | |
| Unused amounts reversed | - | - | - | (10) | (10) | - |
| 31.12.2016 | 9 | 0 | - | 611 | 621 | 193 |
| THE COMPANY | ||||||
|---|---|---|---|---|---|---|
| Loss from shares |
Other provisions |
Tax audit differences |
Other provisions (legal claims) |
Total | Customers provisions |
|
| 31.12.2014 | 9 | - | - | 98 | 107 | 80 |
| Additional provisions | - | - | - | 15 | 15 | 132 |
| Used provisions | - | - | - | (29) | (29) | (61) |
| Unused amounts reversed | - | (4) | (4) | (19) | ||
| 31.12.2015 | 9 | - | - | 80 | 89 | 132 |
| Additional provisions | - | - | 50 | |||
| 31.12.2016 | 9 | - | - | 80 | 89 | 182 |
The table above presents provisions for bad debts less receivables.
Analysis of suppliers and other short-term payables of the Group and the Company is presented below as follows:
| THE GROUP | THE COMPANY | |||
|---|---|---|---|---|
| Amounts in thousands € | 31.12.2016 | 31.12.2015 | 31.12.2016 | 31.12.2015 |
| Suppliers | 2.547 | 2.147 | 2.434 | 2.064 |
| Payable cheques | - | 125 | - | 125 |
| Total Suppliers and Other Liabilities | 2.547 | 2.272 | 2.434 | 2.189 |
| THE GROUP | THE COMPANY | ||||
|---|---|---|---|---|---|
| Amounts in thousands € | 31.12.2016 | 31.12.2015 | 31.12.2016 | 31.12.2015 | |
| Suppliers advance payments | 1.440 | 844 | 1.298 | 634 | |
| Social insurance | 695 | 661 | 695 | 661 | |
| Accrued expenses for the period | 844 | 871 | 611 | 602 | |
| Income carried forward | 63 | 77 | 3 | 3 | |
| Dividends | - | 1 | - | 1 | |
| Liabilities from associates | - | - | - | - | |
| Other short-term liabilities | 2.688 | 2.535 | 2.464 | 2.298 | |
| Total | 5.730 | 4.988 | 5.071 | 4.198 |
The fair values of trade and other liabilities are not shown separately since, because of their short duration, management considers that the carrying amounts recognized in the balance sheet are a reasonable approximation of fair values.
Other short-term liabilities mainly pertain to liabilities to the Managing Company and additional liabilities regarding rentals based on contractual terms.
The Group and the Company current tax and other liabilities are presented below as follows:
| THE GROUP | THE COMPANY | |||
|---|---|---|---|---|
| Amounts in thousands € | 31.12.2016 31.12.2015 |
31.12.2016 | 31.12.2015 | |
| Current tax liabilities | ||||
| Income tax | 782 | 182 | 778 | - |
| Total tax liabilities | 782 | 182 | 778 | - |
Offsetting deferred tax assets and liabilities is performed, in terms of company, when there is an enforceable legal right to do so and when the deferred income taxes relate to the same tax authority.
The tax rates for the FY 2016 regarding the companies operating abroad are as follows:
| Country | Tax Rate |
|---|---|
| SERBIA | 15% |
| CYPRUS | 12,5% |
Deferred income tax is provided on temporary differences using the tax rates expected to apply to the countries where the Group companies are active. The amounts shown in the balance sheet are expected to be recovered or settled after 31η Δεκεμβρίου 2016.
Deferred taxation on 31/12/2016 for Group companies operating in Greece has been calculated at the applicable tax rate of 29% established by L. 4334/2015.
Tax losses are recognized as deferred tax assets to the extent that the recovery of the tax benefit through future taxable profits is probable.
As at 31 December 2016, the Group and the Company have no accumulated tax losses carried forward and, therefore, an amount of € 1.064 k, recognized in the previous years, has been fully offset with income tax.
Changes in deferred tax assets and liabilities of the Group are as follows:
| 31.12.2016 | 31.12.2015 | |||
|---|---|---|---|---|
| Amounts in thousands € | Deferred tax asset | Deferred tax liability | Deferred tax asset | Deferred tax liability |
| Property, plant and equipment | 6.638 | (3.275) | 8.343 | (5.169) |
| Intangible Assets | 161 | - | 182 | - |
| Investments | 667 | - | - | - |
| Trade receivables | 11 | - | 29 | - |
| Actuarial results reserves | 106 | - | 15 | - |
| Employees termination benefit obligations | 652 | - | 645 | - |
| Government grants | - | (11) | - | (12) |
| Tax losses for offsetting | - | - | 1.064 | - |
| Provisions – obligations |
17 | - | - | (8) |
| Total | 8.251 | (3.285) | 10.278 | (5.189) |
| Offsetting | (159) | 159 | (1.761) | 1.761 |
| Net deferred tax asset / (liability) | 8.092 | (3.126) | 8.518 | (3.428) |
Changes in deferred tax assets and liabilities of the Group for FYs 2016 & 2015 are as follows:
| THE GROUP | ||||
|---|---|---|---|---|
| Deferred tax assets (liabilities) |
1.1.2016 | Recognized in Other Comprehensive Income |
Recognized in Income Statement |
31.12.2016 |
| Property, plant and equipment | 3.174 | 189 | 3.363 | |
| Intangible Assets | 182 | (22) | 161 | |
| Investments | - | 667 | 667 | |
| Trade receivables | 29 | (18) | 11 | |
| Actuarial results reserves | 15 | 91 | 106 | |
| Employees termination benefit obligations | 645 | 7 | 652 | |
| Government grants | (12) | 2 | (11) | |
| Tax losses to be offset | 1.064 | (1.064) | - | |
| Provisions – obligations |
(8) | 25 | 17 | |
| Total | 5.089 | 91 | (215) | 4.966 |
| THE GROUP | ||||
|---|---|---|---|---|
| Deferred tax assets (liabilities) |
1.1.2015 | Recognized in Other Comprehensive Income |
Recognized in Income Statement |
31.12.2015 |
| Property, plant and equipment | 2.351 | 823 | 3.174 | |
| Intangible Assets | - | 182 | 182 | |
| Trade receivables | 9 | 20 | 29 | |
| Actuarial results reserves | 73 | (58) | 15 | |
| Employees termination benefit obligations | 536 | 110 | 645 | |
| Government grants | (13) | 0 | (12) | |
| Tax loss to be offset | - | 1.064 | 1.064 | |
| Provisions – obligations |
36 | (44) | (8) | |
| Recognition of tax loss | 305 | (305) | - | |
| Recognition of loss offsetting with reserves Law 4172/2013 under provisions of Article 72 | 1.950 | (1.950) | - | |
| Total | 5.247 | (58) | (100) | 5.089 |
Analysis of deferred tax assets and liabilities of the Company for FYs 2016 & 2015 is are as follows:
| 31.12.2016 | 31.12.2015 | |||
|---|---|---|---|---|
| Amounts in thousands € | Deferred tax asset | Deferred tax liability | Deferred tax asset | Deferred tax liability |
| Property, plant and equipment | 6.489 | 7.840 | (1.237) | |
| Intangible Assets | 161 | - | 182 | - |
| Investments | 851 | |||
| Trade receivables | 11 | 29 | ||
| Actuarial results reserves | 106 | 15 | ||
| Employees termination benefit obligations | 652 | 645 | ||
| Government grants | (11) | (12) | ||
| Tax loss to be offset | 1.064 | |||
| Provisions – obligations |
17 | (8) | ||
| Total | 8.287 | (11) | 9.775 | (1.257) |
| Offsetting | (11) | 11 | (1.257) | 1.257 |
| Net deferred tax asset / (liability) | 8.276 | - | 8.518 | - |
Changes in deferred tax assets and liabilities of the Company for FY 2016 & 2016 are as follows:
| THE COMPANY | |||||||
|---|---|---|---|---|---|---|---|
| 1.1.2016 | Recognized in Other Comprehensive Income |
Recognized in Income Statement |
31.12.2016 | ||||
| Property, plant and equipment | 6.603 | (114) | 6.489 | ||||
| Intangible assets | 182 | (22) | 161 | ||||
| Investments | - | 851 | 851 | ||||
| Trade receivables | 29 | (18) | 11 | ||||
| Actuarial results reserves | 15 | 91 | - | 106 | |||
| Employees termination benefit obligations | 645 | 7 | 652 | ||||
| Government grants | (12) | 2 | (11) | ||||
| Tax loss to be offset | 1.064 | (1.064) | - | ||||
| Provisions – obligations |
(8) | 25 | 17 | ||||
| Total | 8.518 | 91 | (333) | 8.276 |
| THE COMPANY | |||||||
|---|---|---|---|---|---|---|---|
| Deferred tax assets (liabilities | 1.1.2015 | Recognized in Other Comprehensive Income |
Recognized in Income Statement |
31.12.2015 | |||
| Property, plant and equipment | 6.197 | 406 | 6.603 | ||||
| Intangible assets | - | 182 | 182 | ||||
| Trade receivables | 9 | 20 | 29 | ||||
| Actuarial results reserves | 73 | (58) | - | 15 | |||
| Employees termination benefit obligations | 536 | 110 | 645 | ||||
| Government grants | (13) | 0 | (12) | ||||
| Tax loss to be offset | 1.064 | 1.064 | |||||
| Provisions – obligations |
36 | (44) | (8) | ||||
| Recognition of tax loss | 305 | (305) | - | ||||
| Recognition of loss offsetting with reserves Law 4172/2013 under |
|||||||
| provisions of Article 72 | 1.950 | (1.950) | - | ||||
| Total | 9.092 | (58) | (517) | 8.518 |
The borrowings of the Group and of the Company, both long and short term, are analyzed in the following table:
| Amounts in thousands € | THE GROUP | THE COMPANY | |||
|---|---|---|---|---|---|
| 31.12.2016 | 31.12.2015 | 31.12.2016 | 31.12.2015 | ||
| Long-term debt | |||||
| Bond Loans | 24.997 | 29.938 | 24.997 | 29.938 | |
| Long-term bank loans | 797 | 1.129 | - | - | |
| Total long-term debt | 25.794 | 31.067 | 24.997 | 29.938 | |
| Short-term debt | |||||
| Short-term bank loans | 82 | 3 | - | - | |
| Short-term portion of bond and bank | |||||
| loans | 5.584 | 5.442 | 5.169 | 5.110 | |
| Total short-term debt | 5.666 | 5.445 | 5.169 | 5.110 | |
| Total | 31.460 | 36.512 | 30.166 | 35.049 |
On the property of the parent company and the Group there are liens amounting to € 48.550 ,k και \$ 25.500 k for outstanding loans amounting to € 31.460 k και € 36.512 k respectively. Furthermore, there are effective the guarantees provided by the parent, amounting to € 1,300 k and collaterals over 100% of its paid share capital in the company Touristika Theretra S.A. for ensuring its bond loan.
During the period, the Company and the Group received no new loans while they repaid € 5.277 k and € 5.110 k respectively.
The effective weighted average interest rates of the Group, on the balance sheet date are:
| 31/12/2016 | 31/12/2015 | |
|---|---|---|
| Bank loans | 2,95% | 3,18% |
Other long-term obligations to the Company and the Group refer mainly to long-term installments for the inclusion of the Company in Law 4178/ 2013.
Changes in net liabilities in the Group and the Company Balance Sheet are as follows:
Liabilities Retirement benefit from the service:
| 31/12/2016 | ||||
|---|---|---|---|---|
| Defined benefit plans (Non |
Defined benefit plans (Non |
|||
| Amounts in thousands € | financed) | Total | financed) | Total |
| Defined benefits obligation | 2.615 | 2.615 | 2.277 | 2.277 |
| 2.615 | 2.615 | 2.277 | 2.277 | |
| Classified as: | ||||
| Long-tern liability | 2.615 | 2.615 | 2.277 | 2.277 |
| Short-tern liability | 0 | 0 | 0 | 0 |
The change of liability's present value on defined benefits plans is as follows:
| 31/12/2016 | 31/12/2015 | ||||
|---|---|---|---|---|---|
| Defined benefit plans (Non financed) |
Total | Defined benefit plans (Non financed) |
Total | Defined benefit plans (Non financed) |
|
| Defined benefits obligation as at January 1 | 2.277 | 2.277 | 2.340 | 2.340 | |
| Current employment cost | 128 | 128 | 138 | 138 | |
| Interest expenses | 56 | 56 | 47 | 47 |
| Revaluation – actuarial loss /(profit) from changes in financial | ||||
|---|---|---|---|---|
| assumptions | 315 | 315 | (228) | (228) |
| Benefits payable | (189) | (189) | (26) | (26) |
| Cost of previous service | 28 | 28 | 6 | 6 |
| Defined benefits obligation as at December 31st | 2.615 | 2.615 | 2.277 | 2.277 |
The amounts recognized in the Income Statement are as follows:
| 31/12/2016 | 31/12/2015 | ||||
|---|---|---|---|---|---|
| Defined benefit plans (Non |
Defined benefit plans (Non |
Defined benefit plans (Non |
|||
| Amounts in thousands € | financed) | Total | financed) | Total | financed) |
| Current employment cost | 128 | 128 | 138 | 138 | |
| Cost of previous service | 28 | 28 | 6 | 6 | |
| Net interest on benefit obligation | 56 | 56 | 47 | 47 | |
| Total expenses recognized in the Income | |||||
| Statement | 212 | 212 | 191 | 191 |
The amounts recognized in other comprehensive income of the Statement of Other Comprehensive Income are as follows:
| 31/12/2016 | 31/12/2015 | ||||
|---|---|---|---|---|---|
| Amounts in thousands € | Defined benefit plans (Non financed) |
Total | Defined benefit plans (Non-financed) | Total | Defined benefit plans (Non financed) |
| Actuarial profit /(loss) from | |||||
| changes in financial | |||||
| assumptions | (315) | (315) | 228 | 228 | |
| Total profit /(loss) recognized | |||||
| in other comprehensive | |||||
| income | (315) | (315) | 228 | 228 |
The company has commissioned independent actuaries to create an estimation of Company obligation to pay retirement indemnities. The principal actuarial assumptions on 31 December 2016 are as follows:
| 31/12/2016 | 31/12/2015 | |
|---|---|---|
| Discount rate as at December 31st | 1,76% | 2,56% |
| Future salary increases | 1,75% | 1,75% |
| Inflation | 1,75% | 1,75% |
Demographic assumptions:
The assumptions presented below pertain to various causes of employment termination.
1) Mortality
Swiss EVK2000 mortality table has been used for men and women.
2) Morbidity
Swiss EVK2000 mortality table for men and women has been used modified by 50%
3) Regular Employment Termination Ages
The terms of employment termination of the Social Insurance Fund were used regarding every employee considering recognition of average two years service under the provisions of the Insurance Act.
The above results depend on the assumptions (economic and demographic) generated under an actuarial study. Therefore, if a 0.5% higher discount rate had been applied, then the total liability would have been lower by approximately 7.7%. If salary increase assumption by 0.5% had been used, then the total liability would have been higher by approximately 7%.
In 2016, the tourism sector in Greece was relatively stabilized, since there was an increase in arrivals, however, simultaneously with a relative decrease in revenue. On the contrary, the consequences of the economic crisis are reflected in the revenue of the Food & Beverage segment, where Greek presence has been traditionally strong, resulting in a lower rate of revenue growth compared to the room revenue increase.
Stagnation can also be observed in the Serbian hotel market, since demand is showing signs of recovery, assisted by the new foundations caused by Serbia's admission to the EU (airports, privatization of air transportation operator etc). Nevertheless revenue is lower owing to the operation of a number of new hotels in the Belgrade area.
Room occupancy ratio of the luxury hotel industry in Athens increased by 3,6% compared to 2015, adjusting the ratio to € 158,19 versus € 153,20 in 2015. Therefore, room occupancy ratio of the luxury hotel industry in Athens increased by 7,0% (also given a decrease in available rooms by 4,9%) while the total room revenue increased by 1,8%.
Significant items of the Financial Statements are as follows:
identifying of such comparables in view of Serbia's joining the European Union will allow to reverse the performed impairments. .
The following table presents an analysis of the Group's revenues and the Company per major category:
| THE GROUP | THE COMPANY | ||||
|---|---|---|---|---|---|
| 01/01- 31/12/2016 |
01/01- 31/12/2015 |
01/01- 31/12/2016 |
01/01- 31/12/2015 |
||
| Rooms rental income | 33.698 | 33.307 | 27.310 | 26.666 | |
| Sales of food and beverage | 15.787 | 15.229 | 12.648 | 12.503 | |
| SPA-Health Club income | 378 | 352 | - | - | |
| Telephone income | 19 | 21 | - | - | |
| Other income | 2.498 | 2.613 | 2.115 | 2.274 | |
| TOTAL | 52.380 | 51.522 | 42.072 | 41.443 |
Gross profit for the Group was as follows:
| CONSOLIDATED | CORPORATE | |||
|---|---|---|---|---|
| Amounts in thousands €. € | 1/1-31/12/2016 | 1/1-31/12/2015 | 1/1-31/12/2016 | 1/1-31/12/2015 |
| Gross profit | 19.244 | 19.055 | 16.530 | 16.448 |
| Gross profit percentage | 37% | 37% | 39% | 40% |
The Group and the Company expenses per category are as follows:
| THE GROUP | THE COMPANY | ||||||
|---|---|---|---|---|---|---|---|
| 1.1 - 31.12.2016 | Cost of sales |
Administrative expenses |
Distribution expenses |
Cost of sales |
Administrative expenses |
Distribution expenses |
|
| Inventory consumption | 6.657 | 37 | 10 | 4.831 | - | - | |
| Employee fees and expenses | 13.515 | 2.183 | 876 | 10.672 | 1.933 | 851 | |
| Third parties fees and expenses | 313 | 2.295 | 3.433 | 294 | 1.908 | 3.230 | |
| Utilities | 4.112 | 672 | 37 | 4.112 | 604 | 26 | |
| Taxes-duties | 480 | 366 | 20 | 480 | 357 | 6 | |
| Miscellanneous expenses | 3.298 | 990 | 1.053 | 2.608 | 288 | 805 | |
| Depreciation | 4.673 | 294 | 3 | 2.456 | 294 | 3 | |
| Operating provisions | 88 | - | - | 88 | - | - | |
| Total | 33.136 | 6.836 | 5.432 | 25.542 | 5.385 | 4.921 |
| THE GROUP | THE COMPANY | |||||
|---|---|---|---|---|---|---|
| 1.1 - 31.12.2015 | Cost of sales |
Administrative expenses |
Distribution expenses |
Cost of sales |
Administrative expenses |
Distribution expenses |
| Inventory consumption | 6.295 | 27 | 8 | 4.646 | - | - |
| Employee fees and expenses | 13.247 | 2.098 | 934 | 10.525 | 1.929 | 912 |
| Third parties fees and expenses | 313 | 2.947 | 3.450 | 297 | 2.498 | 3.265 |
|---|---|---|---|---|---|---|
| Utilities | 4.160 | 675 | 109 | 4.160 | 599 | 85 |
| Taxes-duties | 520 | 167 | 18 | 520 | 163 | 12 |
| Miscellanneous expenses | 3.238 | 952 | 1.146 | 2.531 | 281 | 814 |
| Depreciation | 4.658 | 274 | 3 | 2.280 | 274 | 3 |
| Operating provisions | 35 | - | - | 35 | - | - |
| Total | 32.467 | 7.139 | 5.668 | 24.995 | 5.744 | 5.091 |
Other income and expenses of the Group and the Company are analyzed as follows:
| THE GROUP | THE COMPANY | |||
|---|---|---|---|---|
| 1.1 - | 1.1 - | 1.1 - | 1.1 - | |
| Other income | 31.12.2016 | 31.12.2015 | 31.12.2016 | 31.12.2015 |
| Income from Grants | 22 | 19 | 22 | 19 |
| Other similar activities income | 283 | 68 | 283 | 68 |
| Income from rentals | 682 | 653 | 333 | 317 |
| Commissions- Brokerage | 57 | 53 | 57 | 53 |
| Income from previous years unused provisions | 44 | - | 17 | - |
| Income from previous years used provisions | - | 15 | - | 15 |
| Invoiced expenses | 178 | 147 | 178 | 147 |
| Profit form disposal of assets | 15 | 0 | - | - |
| Other income | 92 | 38 | 12 | 31 |
| Total | 1.373 | 993 | 902 | 649 |
| THE GROUP | THE COMPANY | |||
|---|---|---|---|---|
| 1.1 - | 1.1 - | 1.1 - | 1.1 - | |
| 31.12.2016 | 31.12.2015 | 31.12.2016 | 31.12.2015 | |
| Other expenses | ||||
| Loss from write off of unrecorded receipts | 1 | - | 1 | - |
| Provision for l legal case compensations | 42 | 187 | - | 143 |
| Interest on past due legal cases compensation | 1 | 1 | 1 | 1 |
| Fines and surcharges | 54 | 19 | 54 | 19 |
| Previous year taxes & Unified Property Tax | 40 | 26 | 40 | 26 |
| Other taxes | 49 | 23 | - | - |
| Other previous years expenses | 9 | 63 | 6 | 63 |
| Miscellaneous expenses | 101 | 112 | 3 | 5 |
| Total other expenses | 296 | 431 | 106 | 258 |
The analysis of the financial results of the Group and of the Company was as follows:
| THE GROUP | THE COMPANY | |||
|---|---|---|---|---|
| Interest income from: | 1.1 - 31.12.2016 | 1.1 - 31.12.2015 | 1.1 - 31.12.2016 | 1.1 - 31.12.2015 |
| - Bank deposits | 23 | 32 | 1 | 4 |
| - Customers interest | 5 | 16 | - | - |
| Financial income | 28 | 49 | 1 | 4 |
| THE GROUP | THE COMPANY | |||
|---|---|---|---|---|
| THE GROUP | THE COMPANY |
1.1 - 31.12.2015 |
1.1 - 31.12.2016 |
1.1 - 31.12.2015 |
| Employees compensation obligation | 56 | 47 | 56 | 47 |
| Bank loans | 1.001 | 1.229 | 918 | 1.156 |
| Finance lease obligations | 8 | 11 | - | - |
|---|---|---|---|---|
| Other bank expenses & | ||||
| commissions | 50 | 15 | 26 | - |
| Letter of Guarantee commissions | 9 | 6 | 9 | 6 |
| Other financial expenses | - | 15 | - | - |
| Financial Cost | 1.126 | 1.322 | 1.009 | 1.209 |
| THE GROUP | THE COMPANY | ||||
|---|---|---|---|---|---|
| Other financial results | 31.12.2016 | 31.12.2015 | 31.12.2016 | 31.12.2015 | |
| Income from dividends | - | - | 650 | 1.535 | |
| Profit from foreign currency translation differences | 127 | 40 | 142 | 40 | |
| Loss from foreign currency translation differences | (491) | (1.693) | (417) | (1.163) | |
| Total | (364) | (1.653) | 376 | 412 |
The amount of tax on profit before tax of the Group and the Company, differs from the theoretical amount that would arise using the weighted average tax rate applicable to profits of consolidated companies. The relationship between the expected tax expense, based on an effective tax rate of the Group, and the tax expense that was really recognized in the income statement, is as follows:
| THE GROUP | THE COMPANY | ||||
|---|---|---|---|---|---|
| 01/01- | 01/01- | 01/01- | 01/01- | ||
| 31/12/2016 | 31/12/2015 | 31/12/2016 | 31/12/2015 | ||
| Current tax expenses | (979) | (194) | (778) | - | |
| Deferred income tax | (215) | (100) | (333) | (517) | |
| Total | (1.194) | (294) | (1.110) | (517) |
| THE GROUP | 01/01-31/12/2016 | 01/01-31/12/2015 |
|---|---|---|
| Earnings before tax | 3.112 | 1.548 |
| Tax rate | 29% | 29% |
| Expected tax expense/income under the statutory tax rate | 903 | 449 |
| Adjustments for differences in tax rates | ||
| Effect of different tax rates in other countries | (432) | 220 |
| - other tax exempt income | 603 | - |
| - other non-removable costs | 520 | 700 |
| Derecognition of previous years deferred tax asset | 355 | 69 |
| Other taxes | - | - |
| Non-recognizable losses for the year for future offsetting | (86) | (64) |
| Recognized previous years loss | (851) | - |
| Other | 182 | (39) |
| Effect of change in tax rate | - | (1.041) |
| Realized tax expenses, net | 1.194 | 294 |
| Weighted tax rate | 38,35% | 18,98% |
| THE COMPANY | 01/01-31/12/2016 | 01/01-31/12/2015 |
|---|---|---|
| Earnings before tax | 5.751 | 5.212 |
| Tax rate | 29% | 29% |
| Expected tax expense/income under the statutory tax rate | 1.668 | 1.511 |
| Adjustments for differences in tax rates | ||
| - other tax exempt income | (189) | (445) |
| - other non-removable costs | 349 | 551 |
| Recognized previous years loss | (851) | |
| Other | 133 | (60) |
| Effect of change in tax rate | - | (1.041) |
| Realized tax expense, net | 1.110 | 517 |
| Weighted tax rate | 19,31% | 9,92% |
Basic profit / (losses) per share are calculated based on profits / (losses) after taxes and Non-controlling interests from continuing operations, on the weighted average number of ordinary shares of the parent company within the accounting period.
The following is an analysis of profit/(loss) per share:
| THE GROUP | THE COMPANY | |||
|---|---|---|---|---|
| Amounts in thousands € | 01/01-31/12/2016 | 01/01-31/12/2015 | 01/01-31/12/2016 | 01/01-31/12/2015 |
| Profit attributable to the owners of the parent | 2.288 | 1.303 | 4.641 | 4.695 |
| Weighted average number of shares | 21.364 | 21.364 | 21.364 | 21.364 |
| Basic earnings/loss per share (in €) | 0,1071 | 0,0610 | 0,2172 | 0,2198 |
None of the transactions incorporate special terms and conditions and no guarantee was given or received.
| Amounts in thousands € | THE GROUP | THE COMPANY | ||
|---|---|---|---|---|
| 01.01- | 01.01- | 01.01- | 01.01- | |
| Sales of services | 31.12.2016 | 31.12.2015 | 31.12.2016 | 31.12.2015 |
| Subsidiaries/jointly controlled | 58 | 49 | 58 | 49 |
| Other related parties | 134 | 81 | 134 | 81 |
| Total | 191 | 130 | 191 | 130 |
| 01.01- | 01.01- | 01.01- | 01.01- | |
| Purchases of services | 31.12.2016 | 31.12.2015 | 31.12.2016 | 31.12.2015 |
| Subsidiaries/jointly controlled | 9 | 13 | 9 | 13 |
| Other related parties | 424 | 397 | 424 | 397 |
| Total | 433 | 411 | 433 | 411 |
| Balance of receivables | 31.12.2016 | 31.12.2015 | 31.12.2016 | 31.12.2015 |
| Subsidiaries/jointly controlled | 545 | 508 | 545 | 508 |
| Other related parties | 213 | 1 | 213 | 1 |
| Total | 758 | 510 | 758 | 510 |
| Balance of liabilities | 31.12.2016 | 31.12.2015 | 31.12.2016 | 31.12.2015 |
| Subsidiaries/jointly controlled | 5 | 6 | 5 | 6 |
| Other related parties | 100 | 67 | 100 | 67 |
| Total | 105 | 73 | 105 | 73 |
The outstanding balances at year's end are unsecured and settlement occurs in cash. No guarantees were provided or received for the above requirements.
It is also noted that between the Parent Company and its subsidiaries there are no special agreements and any transactions carried out between them are within the usual terms and particularities of each market.
For the fiscal year that ended in 31 December 2016, the Company hasn't made a provision for doubtful debt relating to amounts owed by affiliated companies.
From the above transactions, transactions and balances with subsidiaries companies have been eliminated from consolidated financial statements of the Group. Among the subsidiaries of the Group exist requirements / liabilities from the total value of loans € 2.146 k and corresponding income / expense interest of € 130 k, as well as exchange differences of income / expense of € 92 k, which are eliminated on consolidation.
The salaries of directors and members of management were as follows:
| THE GROUP | THE COMPANY | |||
|---|---|---|---|---|
| Amounts in thousands € | 01.01-31.12.2016 | 01.01-31.12.2015 | 01.01-31.12.2016 | 01.01-31.12.2015 |
| Key executives and BoD members | ||||
| Salaries-Fees | 1.086 | 1.062 | 649 | 771 |
| Social insurance cost | 98 | 95 | 98 | 95 |
| Bonus | 162 | 156 | 162 | 156 |
| Compensation | 10 | 113 | 10 | |
|---|---|---|---|---|
| Total | 1.356 | 1.426 | 919 | 1.021 |
The provision made for compensation of the Group's and Company's staff includes an amount of € 74 k (2015:€ 58 k) is included for the executives and members of the board while in the statement of results are recorded € 7,5 k (2015: € 6 k).
No loans have been granted to members of the Board of Directors of the Group or management personnel and their families.
The Employee Benefits of the Company and the Group are as follows:
| Amounts in thousands € | THE GROUP | THE COMPANY | ||
|---|---|---|---|---|
| 01.01-31.12.2016 | 01.01-31.12.2015 | 01.01-31.12.2016 | 01.01-31.12.2015 | |
| Employee salaries-Bonus | 12.724 | 12.389 | 10.278 | 10.147 |
| Social insurance cost | 2.929 | 3.016 | 2.585 | 2.569 |
| Other employee benefits | 765 | 730 | 437 | 506 |
| projected | 189 | 26 | 189 | 26 |
| Provision for employee | ||||
| compensation | (33)* | 118 | (33)* | 118 |
| Total | 16.573 | 16.279 | 13.456 | 13.366 |
* The revenue is due to the balance from of valuation of employee compensation obligation under IAS 19 and the compensation paid.
The number of employees occupied on daily wages basis and salaried employees is as follows:
| THE GROUP | THE COMPANY | |||
|---|---|---|---|---|
| 31.12.2016 | 31.12.2015 | 31.12.2016 | 31.12.2015 | |
| Salary employees | 514 | 517 | 280 | 294 |
| Daily wages employees | 287 | 239 | 287 | 239 |
| Total | 801 | 756 | 567 | 533 |
The Group leases certain offices and shops under non-cancellable operating leases. All leases include a term. They have varying terms, escalation clauses and rights. The following is an analysis of contractual rentals to be collected in the coming years:
| CORPORATE | ||
|---|---|---|
| Amounts in thousands € | 31/12/2016 | 31/12/2015 |
| Operating leases collectable in 1 year | 300 | 304 |
| Subtotal 1: short-term operating leases | 300 | 304 |
| Operating leases collectable in 2 to 5 years | 526 | 752 |
| Subtotal 2 | 526 | 752 |
| Operating leases collectable after 5 years | 282 | 496 |
| Subtotal 3 | 282 | 496 |
| Subtotal 4 (=2+3): Long-term operating | ||
| leases | 808 | 1.248 |
| TOTAL (=1+4) | 1.108 | 1.551 |
On 24/12/2012, a final notarized contract was established between the parent company and the "Eurobank Ergasias SA Bank", for long-term leasing of the King George Hotel, with a lease term of ten (10) years with the Lessee having the right to extend it initially for five (5) years and then for a further five (5) years. Leasing was initiated with the signature of the Protocol of Delivery and Receipt of the
Lease on 20/3/2013. The annual rent is comprised of a Minimum annual lease amount of € 700 k and a percentage of annual rent in proportion to Gross Profit, calculated on the Gross Profit of the Lease and alternatively on the sum of the Gross Profits of King George & Grande Bretagne hotels. An analysis of the minimum conventional rents which will be paid in the following years is as follows:
| CORPORATE | ||
|---|---|---|
| Amounts in thousands € | 31/12/2016 | 31/12/2015 |
| Operating leases collectable in 1 year | 700 | 700 |
| Subtotal 1: short-term operating leases | 700 | 700 |
| Operating leases collectable in 2 to 5 | ||
| years | 2.800 | 2.800 |
| Subtotal 2 | 2.800 | 2.800 |
| Operating leases collectable after 5 years | 852 | 1.552 |
| Subtotal 3 | 852 | 1.552 |
| Subtotal 4 (=2+3): Long-term operating | ||
| leases | 3.652 | 4.352 |
| TOTAL (=1+4) | 4.352 | 5.052 |
a) Administrative procedures for the compensation to former owners of the land on which the Hyatt Hotel (subsidiary company BEOGRADSKO MESOVITO PREDUZECE) and other third party structures have been constructed. The case is under inspection of the Commission for decision on the return of land in the Municipality of New Belgrade (hereinafter: the Commission). Despite the fact that the Supreme Court of Serbia annulled twice the second resolution, the Commission still supports the position that the Company is responsible and could seek compensation for the damage suffered by the legal predecessor of which the Company had acquired the land from. Regarding the aforementioned case, the Group has made a provision amounting to € 526 k as at 31.12.2016, which is estimated adequate.
b) Court cases have been filed against the subsidiary company BEOGRADSKO MESOVITO PREDUZECE standing at 1.6 m (less interest and surcharges). The most significant case is that of the former employees demanding compensation due to termination of the employment relationship relying on non-competition clause amounting to € 1.1 million. The Group's management claims that there are no reasons for compensation concerning the termination of the employment relationship, given that both plaintiffs resigned of their own will. The management of the subsidiary has also acted against the plaintiffs, and interrogations for both conflicts have not yet started. As the cases are still at an early stage, the final outcome cannot presently be determined, and no provision for contingent liability of the Group has been made in the financial statements of the company. The case is reported as emphasis of matter issue in the Independent Auditor's Report.
There are no other litigation or arbitration disputes of courts or arbitration bodies that may have a significant influence on the financial statements or the functionality of the Group, beyond the provisions that have already been made (§ 5.12).
The unaudited tax years of the Group companies are as follows:
| The Company | Unaudited Years |
|---|---|
| LAMPSA HELLENIC HOTELS S.A. | - * |
| LUELLA ENTERPRISES LTD | 2007 - 2016 |
| TOURISTIKA THERETRA S.A. | - |
| EKSCELSIOR BELGRADE SOCIALLY OWNED HOTEL & CATERING TOURIST | |
| ENTERPRISES | 2007 - 2016 |
| BEOGRADSKO MESOVITO PREDUZECE | 2012 - 2016 |
| MARKELIA LTD | 2010 - 2016 |
For the unaudited tax years of the Group companies, there is a probability for additional taxes and penalties to be imposed, during the period that they will be examined and finalized by the relevant t ax authorities.
Furthermore, the Company was informed about the issue of additional audit order regarding additional data for FYs 2003 - 2009 (which were finalized under tax amnesty procedures), prolonging the procedures until 31/12/2015 (instead of 31/12/2013). Following the above, in the beginning of 2015, the additional order specified that the selective tax audit will be conducted in respect of INCOME, VAT and Books and Records items.
On 29/07/2015, the Company received the Note under Article 30, par. 5 of PD 186/92 issued by the Audit Authority for Large Enterprises. The Note, prepared in the context of conducted recurring audit by the aforementioned Authority in respect of income taxation and other tax items for the financial years 2003 to 2009, stated that "under the audit opinion", the accounting books held by the company in respect of the administrative periods in question are considered to have misstatements under the provisions of cases a, c and d of par. 4, Article 30, of P.D. 186/92 in line with the provisions of par. 7, 8 and 9 of the same Article of P.D. 186/92, as added under Law 3052/2002, given that the misstatements are substantial compared to the company financials and negatively affect them. The judgments regarding the "misstatements" in the accounting books is based on breaches of regulations regarding non-receiving and non-recording in the company's accounting books tax data on leasing fixed assets from the company STARWOOD HELLAS HOTELS S.A.
The Audit Authority for Large Enterprises summoned the Company to appear in front of the Ministry of Finance Committee as under Article 30, par. 5 of P.D. 186/92 that is authorized to conclude whether the misstatements referred to in the Note entail rejection of the accounting books and records and extraaccounting definition of taxable items for the administrative periods under audit.
Within the current period, the Audit Authority for Large Enterprises disclosed to the Company its decision, stating that talking into account the Committee's decision under par. 5, Article 30, P.D. 186/92, which regarded that the Company's books were adequate and exact, the Company had not concealed any tax evidence and, therefore, no loss had arisen as for as the Greek State is concerned.
* For the FY 2011-2015 inclusively, the parent company and TOURISTIKA THERETRA S.A. were subject to tax audit of the Certified Public Accountants as provided by Article 82 para 5 Law 2238/1994 and Article 65a , Law 4174/2013.
Within the reporting period the parent company and the company TOURISTIKA THERETRA S.A. received unqualified conclusions Tax Compliance Certificate. Regarding the FY 2016, the tax audit is in progress and the relevant tax certificate is expected to be issued following the publication of the Financial Statements for FY 2016. Should other tax liabilities arise till the tax inspection is finalized, it is estimated that they will not significantly affect the Group and the Company Financial Statements.
Regarding the companies audited by Statutory Auditors and Auditing Firms in respect of tax provisions, the issues are selected for tax inspection in compliance with Article 26, Law 4174/2013, as effective. The tax inspection in question can be conducted within the FY, during which the Tax Authorities are entitled to issue tax identification acts.
For the unaudited tax years of the other companies of the Group, it is estimated that no significant additional tax liabilities will arise, therefore, no relevant provision has been made.
The Group and the Company have contingent liabilities and assets related to banks, other guarantees and other matters arising in the ordinary course of business, as follows:
| THE GROUP | THE COMPANY | |||
|---|---|---|---|---|
| Amounts in thousands € | 31.12.2016 | 31.12.2015 | 31.12.2016 | 31.12.2015 |
| Liens on land plots and building for | ||||
| provision of loan in | 48.850 | 48.850 | 48.850 | 48.850 |
| Liens on land plots and building for | ||||
| provision of loan in \$ | 25.500 | 25.500 | 25.500 | 25.500 |
| Other guarantees to ensure liabilities | 94 | 87 | 94 | 87 |
| Guarantees for other associates | 600 | 1.300 | 600 | 1.300 |
The guarantees of the parent company amounting to € 600 k pertain to collaterals over 100% of its paid up share capital in the company TOURISTIKA THERETRA S.A. for the purposes of ensuring its bond loan.
The Group is exposed to financial risks such as market risk (fluctuations in exchange rates, interest rates, market prices, etc.), credit risk and liquidity risk.
The Group's financial instruments are composed of bank deposits, overdraft rights, trade receivables and payables, loans to subsidiaries, associated companies, dividends payable and lease obligations.
Since 2008, the Group applies a risk management program for such risks. The risk management program aims to limit the negative impact on the financial results of the group caused by the unpredictability of financial markets and the variation in the variables of cost and revenue. The group intends to use, in the near future, derivative financial instruments to hedge its exposure to specific risk categories.
The risk management process applied by the Group, is as follows:
The Group operates in Greece, Cyprus and Serbia and its operating currency is Euro. However, here is a certain limited exposure to currency translation risk regarding US Dollar, mainly arising from loan and other liabilities in Dollars. The exchange rate risk of this kind arises from the rate of these currencies against the euro, partially offset by corresponding liabilities (e.g. loans) of the same currency.
Financial assets and liabilities in foreign currency converted into Euro at the closing rate are as follows:
| 2016 | 2015 | |
|---|---|---|
| Amounts in thousands € | ||
| Nominal amounts | US\$ | US\$ |
| Financial assets | ||
| Fianncial liabilities | (2.314) | (2.421) |
| Short-term exposure | (2.314) | (2.421) |
| Financial asets | - | |
| Financial liabilities | (7.611) | (9.360) |
| Long-term exposure | (7.611) | (9.360) |
| Total | (9.925) | (11.781) |
The following tables show the sensitivity of the result for the financial year as well as the equity in relation to financial assets and financial liabilities and the exchange rate Euro / Dollar.
We assume a change of 3.84% (2015: 0.4%) in the 31 December 2015 exchange rate of EUR / USD takes place. These percentages were based on the average market volatility in exchange rates for a period of 3 months from the end of each year (31/12).
In case € increases compared to the above currency, with the percentages mentioned above, the results on the earnings for the year and equity will be as follows:
| Amounts in thousands € | 2016 | 2015 |
|---|---|---|
| US\$ | US\$ | |
| Income statement | 272 | 354 |
| Equity | 193 | 251 |
In case € depreciates compared to the above currency, with the percentage mentioned above, the earnings for the year and the equity will be affected as follows:
| Amounts in thousands € | 2016 | 2015 |
|---|---|---|
| US\$ | US\$ |
| Income statement | (294) | (383) |
|---|---|---|
| Equity | (209) | (272) |
The exposure of the Group to foreign exchange risk varies during the year depending on the volume of transactions in foreign currency. However, the above analysis is considered representative of the Group's exposure to currency risk.
Long-term financing is related to leasing contracts with variable interest rates (mainly Euribor and Libor).
The Group's policy is to minimize its exposure to cash flow interest rate risk on long-term financing. On 31 December 2016, the Company is exposed to changes in market interest rates, with regard to its bank loans, which are subject to variable interest rate.
The following table shows the sensitivity of the earnings for the year and equity, to a reasonable possible change in interest rate of +1.0% or -1.0% (2015: + / -1%). The changes in interest rates are estimated to be reasonable compared to market conditions.
| 01/01-31/12/2016 | 01/01-31/12/2015 | |||
|---|---|---|---|---|
| Amounts in thousands € | 1,0% | -1,0% | 1,0% | -1,0% |
| Income statement | (340) | 340 | (387) | 387 |
| Equity | (241) | 241 | (275) | 275 |
The Group's exposure to credit risk is limited to financial assets (instruments) which, at the reporting date, are as follows:
| Amounts in thousands € | THE GROUP | THE COMPANY | ||
|---|---|---|---|---|
| Financial assets categories | 31/12/2016 | 31/12/2015 | 31/12/2016 | 31/12/2015 |
| Cash and cash equivalents | 7.365 | 5.770 | 3.226 | 2.954 |
| Trade receivables | 2.776 | 2.343 | 2.398 | 1.657 |
| Total | 10.141 | 8.112 | 5.624 | 4.611 |
The majority of Group's sales are performed through credit cards, the credit sales though are made to customers with evaluated credit history.
For trade and other receivables, the Group is not exposed to significant credit risk. The credit risk on liquidation requirements and other short term financial assets is considered limited.
The Group's management considers that all the above financial assets that are not impaired in previous reporting dates are of high credit quality, including those owed.
None of the financial assets of the Group has been mortgaged or committed to any other form of credit insurance.
The Group manages its liquidity needs by carefully monitoring the long-term financial liabilities as well as the daily payments. Liquidity needs are monitored in various time periods, on a daily and weekly basis and on a rolling 30-day period. The liquidity needs for the next 12 months are determined monthly.
Furthermore, due to the imposition of capital control in June 2015, irregularities arose regarding repayment obligations of foreign suppliers, which, however, within the current period were settled and thus, proper operations of the Greek Companies of the Group was restored. The Group Management has examined the alternatives and proceeded with the timely payment of its obligations towards foreign suppliers. Moreover, the Group has common practice of retaining cash in order to meet liquidity needs for periods up to 30 days, which, given capital control, has increased to 90 days.
The maturity of the Group and the Company liabilities which will be settled on a cash basis are as follows:
| THE GROUP | 31.12.2016 | ||||
|---|---|---|---|---|---|
| Amounts in thousands € | Short-term | Long-term | |||
| within 6 months | 6 to 12 months | within 6 months | 6 to 12 months | ||
| Bank debt | 248 | 248 | 797 | - | |
| Bond loan | 2.585 | 2.585 | 24.841 | 156 | |
| Other long-term liabilities | - | - | 181 | - | |
| Trade liabilities | 2.547 | - | - | - | |
| Other short-term liabilities | 5.730 | - | - | - | |
| Total | 11.110 | 2.833 | 25.819 | 156 | |
| 31.12.2015 | |||||
| Amounts in thousands € | Short-term | Long-term | |||
| within 6 months | 6 to 12 months | within 6 months | 6 to 12 months | ||
| Bank debt | 166 | 166 | 1.129 | - | |
| Bond loan | 2.555 | 2.555 | 29.788 | 151 | |
| Finance lease liabilities | 3 | - | - | - | |
| Trade liabilities | 2.540 | - | - | - | |
| Other short-term liabilities | 4.682 | 39 | 223 | 43 | |
| Total | 9.945 | 2.760 | 31.139 | 194 |
The above contractual maturities reflect the gross cash flows, which may differ from the carrying values of the liabilities at the reporting date.
The Group on 31/12/2016 had negative working capital, as current liabilities exceed current assets by € 2.748 k. (parent company € 6.429 k). The most important part of current liabilities (38% the Group and the parent company) is long-term debt installments payable in the following year.
Without taking into consideration the short-term loan liabilities, the Group working capital is presented positive by € 2.918 k and the Company's is presented negative by € 1.260 k.
Within the current FY, the parent company received from its subsidies dividends amounting to € 650 k and it is estimated that additional dividends standing at € 500 k will be received in the following FY.
The Management estimates that cash flows from operating activities in the following FY 2017, in line with the dividends to be collected will cover the company's short-term liabilities.
Within the current FY, the Group and the Company repaid to the bank capital amounts of € 5, k and € 5,110 k respectively.
Two major shareholders of the parent company "NAMSOS ENTERPRISES COMPANY LIMITED" and "DRYNA ENTERPRISES COMPANY LIMITED", representing 30.06% in the share capital of each (total of 60.12%), although it is estimated that it will not be necessary, are committed to cover working capital subsequent needs for at least the next twelve months from the date of approval of the annual financial statements of 31/12/2016.
The objectives of the Group in order to manage the capital are:
The Group monitors capital on the basis of the amount of equity, less cash and cash equivalents as reflected in the Statement of Financial Position. The capital for the years 2016 and 2015 is analyzed as follows:
| THE GROUP | THE COMPANY | |||
|---|---|---|---|---|
| Amounts in thousands € | 2016 | 2015 | 2016 | 2015 |
| Total equity | 84.949 | 83.254 | 71.165 | 66.747 |
| Plus: Subordinated loans | ||||
| Less: Cash and cash equivalents | (7.365) | (5.770) | (3.226) | (2.954) |
| Capital | 77.585 | 77.484 | 67.939 | 63.793 |
| Total equity | 84.949 | 83.254 | 71.165 | 66.747 |
| Plus: Loans | 31.460 | 36.512 | 30.166 | 35.049 |
| Total Capital | 116.409 | 119.766 | 101.331 | 101.796 |
|---|---|---|---|---|
| Capital to Total capital | 7/10 | 6/10 | 7/10 | 6/10 |
A medium term objective of the Group regarding capital management, and to reverse the negative climate is to maintain the index at the same level.
The Group sets the amount of capital in relation to its overall capital structure, for example equity and financial liabilities. The Group manages its capital structure and makes adjustments at the time when the economic situation and the risk characteristics of existing assets change. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends, return capital to shareholders, issue equity or sell assets to reduce debt.
On April 2017, the Group's subsidiary Excelsior signed a hotel management agreement with the company Orbis S.A. of Accor Group. The term of the agreement is ten years with the right to renew it under the same conditions for 10 more years. The agreement is to start on September 1, 2017. The hotel will operate under the title "Mercure Belgrade Excelsior". The management fees include a percentage of revenue and a percentage of gross operating profit provided that the set forth objectives have been met.
Accor Hotels is one of top 5 hotel chains holding a leading position in Europe, Latin America, the Middle East, Africa and Asia. There are 2,300 hotels under direct management agreement and in addition 1,850 hotels under a franchise agreement. On everyday basis, the group hosts 500,000 visitors at over 4,150 hotels in 95 countries. The global size of the company provides real benefits to hotel owners (Proven techniques and large economies of scale, skilled staff with strong know-how and constant support, achieving the financial objectives. Some of the brands of the company are Sofitel, Raffles, Fairmont, Pullman, Swissotel, Mercure, Novotel, Addagio, Ibis.
Apart from the aforementioned, there are no other significant events as from 2016 closing till currently.
Athens, April 28, 2017
PRESIDENT OF THE BOARD OF DIRECTORS
CHIEF EXECUTIVE OFFICER FINANCIAL DIRECTOR
GEORGE GALANAKIS ANASTASIOS HOMENIDIS KOSTAS KYRIAKOS I.D. No Ξ 282324 I.D. No ΑΙ 506406 I.D. No ΑΖ 512473
Α' Class License 0010932
The Company annual financial statements, the Independent Auditor's Report and the Report of the Board of Directors for FY ended as at December 31st, 2016, have been posted on the Company website www.lampsa.gr.
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