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Risks relevant to EPC projects
The Group, via its subsidiary (ΜΕΤΚΑ), is exposed, in terms of con-
tracts, to risks that are relevant to engineering and electrical design,
the supply, manufacturing and delivery of turn-key energy facilities
against a determined price. The aforementioned risks involve mainly
cost overruns and/or delays in the implementation due to:
• Unforeseen increases of the cost of raw materials and/or equipment
• Mechanical failures or failures of equipment
• Unforeseen condition during manufacturing
• Delays due to adverse weather conditions
• Performance failure or problems relating to suppliers and
subcontractors
• Additional works at the request of the customers or due to the
customers’ delaying to produce in time the necessary information
for the design or the engineering of the project.
• Unforeseen or unexpected changes relating to sociopolitical
situations mainly in countries with political and governmental
instability
When additional time is required or when METKA Group incurs addi-
tional cost due to the customers’ liability, METKA negotiates with such
customers the eventual compensation.
The most valuable asset of METKA Group is its human resources.
As a result, being unable to retain such resources or approach and
retain new, suitably trained personnel that may allow to the Group to
develop its know-how could significantly influence in current or future
performance.
METKA’s success in this field depends on the ability to recruit, train
and retain a sufficient number of employees, including high rank ex-
ecutives, engineers and technicians that have the appropriate skills
and specialization.
Force majeur
Unforeseen events, including natural disasters, acts of war or terrorist
attacks, non scheduled interruption of the production operation/ out-
age, interruption of supply or incapacity of the equipment and/or of
the processes to meet the specifications may increase the cost and
affect the Group’s financial results. Moreover, the Group’s insurance
terms in force may not provide sufficient coverage for the entire dam-
age generated by such events.
Pendency of proceedings
The Group, mainly via its subsidiaries, has been involved in a number
of cases against third parties, either as complainant or as respondent.
The outcome of such cases may involve expenses or revenues that
can significantly affect the results as well as the financial position of
both the subsidiaries and the Group alike.
b. Organization and implementation of risk management
The Group determines risk as a set of uncertain and unpredictable
situations that may affect all its activities, its business operation, its
economic performance as well as the implementation of its strategy
and the achievement of its goals.
For this reason it has established a specific
risk management approach in all its fields
of activities where certain risks have been
recognized as follows:
• Identification and assessment of risk
factors
• Design of a risk management policy
• Implementation and evaluation of risk
policies
The Group has applied specific and com-
plete processes for the Enterprise Risk As-
sessment and Management(ERM). All the
senior executives are involved in a process
of initial recognition and assessment of any
kind of enterprise risk in order to enhance
the role of the Executive Committees and
BODs in respect of design and approval of
specific actions on the basis of said ERM
procedures.
Last but not least the Group conducts
regular internal audits to ensure the appro-
priate and effective implementation of the
risk detection and assessment procedures
as well as the management policy for such
risks.
c. Internal Audit System
In addition to everything mentioned herein
and everything described above relevant
to the competences of the Audit Com-
mittee, the Internal Audit Division of the
Company is an independent unit which re-
ports to the BoD. Its competences involve,
among others, the assessment and im-
provement of risk management and inter-
nal audit systems as well as monitoring of
the compliance with the established insti-
tutional policies and procedures as those
are determined by the Internal Operation
Regulation, the legislation in force and the
regulatory provisions.
Moreover, the following are examined and
analyzed on a continuous basis:
• The efficiency of the Group’s accounting
and financial systems, the audit mecha-
nisms, the quality control systems, the
health and safety and environmental sys-
tems as well as the business risk manage-
ment ones.
• Drafting of the financial statements and
of other important data and information for
notification
• The reliability, the qualifications and the
independence of chartered auditors
• Cases of conflict between the private
interests of the members of the BoD or its managers and the
Company’s interests
• Relations and transactions of the Company with affiliated
companies as well as relations of the Firm with the firms in the
equity capital of whom participate members of the Board of Di-
rectors in a percentage of at least 10% or shareholders with a
percentage of at least 10%.
• The legality of the fees and any kind of bonuses to the mem-
bers of administration regarding the decisions of the responsi-
ble bodies / agencies of the Firm.
i. The Board of Directors in a continuous and consistent way
reexamines the firm strategy and the principal business risks,
in particular in a constantly changing financial and business
environment. Moreover, in regular time intervals, it receives re-
ports on what is done regarding the audits made by the Auditor
Committee, based on the annual program of the specific au-
dits of the administration of Internal Audit of the firm. The above
mentioned allow the Board of Directors to formulate a complete
opinion on the effectiveness of the systems, processes and
regulations of the firm.
ii. The certified chartered auditors do not offer non audit ser-
vices to the firm.
(D) BOD Remunerations
According to the company’s article of association the BOD
member’s remuneration is set by the BOD and submitted to
the General Assembly for approval. None of the existing BOD
members has an employee relationship to the company except
from the CEO.
The BOD members apart from their approved remuneration do
not receive any other compensation or benefits.
For the year 2014 no share options were granted and no share
benefit plans were in force.
The Company and its Subsidiaries have applied a specific pol-
icy for the remuneration of the BOD members. Said policy is an
integral part of the Corporate Governance policy of Mytilineos
Group, aiming to enhance its Corporate Values and its long
term business objectives. With the view to maximize the Value
for the Shareholders, this remuneration policy is in line with the
Group’s corporate strategy that keeps aligned the business ob-
jectives with those of all stakeholders such as employees, man-
agement, shareholders
Said policy is based on the following principles:
• Maximizing Performance
• Alignment of remuneration with profitability, risk and Capital
adequacy
• Internal transparency
The alignment of the BOD remuneration policy with the Strat-
egy of each one of the core business sectors of the Group is
a continuous commitment. The procedures for the definition
of the amounts of remuneration are clearly and transparently
depicted. The remuneration policy is designed by the Human
Resources management with the support of the Group’s Fi-
nance and Legal departments and the In-
ternal Audit. Said policy is submitted to the
Remuneration Committee of the BOD the
majority of its members being independent
and non – executive members of the BOD.
The structure of the remuneration for the
BOD may include both a fixed and a vari-
able part, assuring the link of remuneration
with short term and long term business
profitability and efficiency.
Regarding the fixed BOD remuneration,
this has to be competitive in order to make
it possible to attract and maintain mem-
bers with the right competences, experi-
ences and behavior for the Company and
the Group. The main aim is for the remu-
neration to be related to the time that the
members consume for the BOD meetings,
to depict the actual performance of their
duties and to be close to the market’s av-
erage . Higher compensation is possible
for those that have special competences
and experience with a heavy impact on the
Group’s business decisions or in cases of
extraordinary performance.
Regarding the variable BOD remunera-
tion, these are linked to the member’s, the
Company’s and the Group’s performance
in general. The achievement of objec-
tives at said levels – member/Company/
Group are a basic element of the Group’s
corporate culture. The level of the variable
remuneration is dependent on the actual
performance based on a series of quanti-
tative criteria. Said criteria, include the mid
to long term strategy, ensure the alignment
of objectives with said strategy and ensure
the Group’s and its Shareholder’s interests
that relate indicatively with the following
KPIs:
• Sustain or Increase in Turnover
• Sustain or Increase of the operating
margin
• Realize positive cash flows from
operations
• Sustain or Increase of net results
Said KPIs are set on a yearly basis accord-
ing to the Group’s Business Plan and the
level of the variable remuneration for the
BOD members is calculated on the back
of the evaluation process for those KPIs,
always considering the general economic
environment.
To be noted that the non-executive mem-
bers of the BOD take only fixed remunera-
tion.
Statement of Corporate Governance
