48
49
Statement of Corporate Governance
Moreover, the Group may be affected by adverse political developments or de-
velopments relating to the regulatory framework that could be connected to its
EPC activities in areas outside Greece and mainly in countries with political in-
stability.
IT Safety
Our business operations are supported by different software and data process-
ing systems. However, we cannot fully exclude an eventual non availability of
such systems or violation in terms of data safety.
We mitigate such risks by applying high standards and taking measures in order
to obtain and ensure their availability, reliability, confidentiality and traceability.
In addition and in order to control eventual hazards we regularly invest in the
upgrading of software, hardware and equipment and we conduct regular internal
and external audits supported by international consulting groups and we apply
continuing progress procedures.
Risks relevant to EPC projects
The Group, via its subsidiary (ΜΕΤΚΑ), is exposed, in terms of contracts, 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 afore-
mentioned 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 engi-
neering 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 additional cost
due to the customers’ liability, METKA negotiates with such customers the even-
tual compensation.
Force majeur
Unforeseen events, including natural disasters, acts of war or terrorist attacks,
non scheduled interruption of the production operation/ outage, interruption of
supply or incapacity of the equipment and/or of the processes to meet the speci-
fications may increase the cost and affect the Group’s financial results. Moreo-
ver, the Group’s insurance terms in force may not provide sufficient coverage for
the entire damage 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 re-
sults 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 ac-
tivities, its business operation, its economic perfor-
mance as well as the implementation of its strategy
and the achievement of its goals.
For this reason it has established a specific risk man-
agement approach in all its fields of activities where
certain risks have been recognized as follows:
(i)
Identification and assessment of risk factors
(ii)
Design of a risk management policy
(iii) Implementation and evaluation of risk policies
The Group has applied specific and complete pro-
cesses for the Enterprise Risk Assessment and
Management(ERM). All the senior executives are
involved in a process of initial recognition and as-
sessment 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 inter-
nal audits to ensure the appropriate and effective
implementation of the risk detection and assess-
ment procedures as well as the management policy
for such risks.
c. Internal Audit System
In addition to everything mentioned herein and eve-
rything described above relevant to the competenc-
es of the Audit Committee, the Internal Audit Divi-
sion of the Company is an independent unit which
reports to the BoD. Its competences involve, among
others, the assessment and improvement of risk
management and internal audit systems as well as
monitoring of the compliance with the established
institutional 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 mechanisms, the quality
control systems, the health and safety and environ-
mental systems as well as the business risk man-
agement ones.
• Drafting of the financial statements and of
other important data and information for notification
• The reliability, the qualifications and the inde-
pendence 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 Directors 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 members
of administration regarding the decisions of the responsible bodies /
agencies of the Firm.
i.
The Board of Directors in a continuous and consistent way re-
examines the firm strategy and the principal business risks, in par-
ticular in a constantly changing financial and business environment.
Moreover, in regular time intervals, it receives reports on what is done
regarding the audits made by the Auditor Committee, based on the
annual program of the specific audits 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 services
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 Assem-
bly 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 2015 no share options were granted and no share benefit
plans were in force.
The Company and its Subsidiaries have applied a specific policy
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 objec-
tives. 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 objectives with those of all stakeholders -
such as employees, management, shareholders.
Said policy is based on the following principles:
• Maximizing Performance
• Alignment of remuneration with profitability, risk and Capital ad-
equacy
• Internal transparency
The alignment of the BOD remuneration policy with the Strategy of
each one of the core business sectors of the Group is a continuous
commitment. The procedures for the definition of the amounts of re-
muneration are clearly and transparently depicted. The remuneration
policy is designed by the Human Resources management with the
support of the Group’s Finance 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 variable 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 members with the
right competences, experiences and behavior for the Company and
the Group. The main aim is for the remuneration 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 average . 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 per-
formance.
Regarding the variable BOD remuneration, these
are linked to the member’s, the Company’s and the
Group’s performance in general. The achievement
of objectives at said levels – member/Company/
Group are a basic element of the Group’s corpo-
rate culture. The level of the variable remuneration
is dependent on the actual performance based on
a series of quantitative 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 according 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 environ-
ment.
To be noted that the non-executive members of the
BOD take only fixed remuneration.
