Annual Financial Report for the period from1st of January to the 31st of December 2013
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• Classification of investments
Management classifies Financial assets in the scope of IAS 39 based on their nature and their characteristics
at the following four categories:
• financial assets at fair value through profit and loss,
• loans and receivables,
• held-to-maturity investments, and
• available-for-sale investments.
Financial assets are recognized initially at cost, which represents their fair value (plus, in certain cases, directly
attributable transaction costs). The Group determines the classification of its financial assets after initial
recognition and, where allowed and appropriate, re-evaluates this designation at each financial year-end.
(i) Financial assets at fair value through profit and loss: Financial assets are classified as held for trading if
they are acquired for the purpose of selling in the near term. Gains or losses on investments held for trading
are recognized in income.
(ii) Loans and receivables: Loans and receivables which are generated form the Group’s operations (and are
beyond the Group’s normal credit terms) are carried at amortized cost using the effective interest method.
Gains and losses are recognized in the income statement when the loans and receivables are derecognized
or impaired, as well as through the amortization process.
(iii) Held-to-maturity investments: Financial assets with fixed or determinable payments and fixed maturity
are classified as held-to-maturity when the Group has the positive intention and ability to hold to maturity.
Investments intended to be held for an undefined period are not included in this classification. Held-to-
maturity investments are carried at amortized cost using the effective interest method. For investments
carried at amortized cost, gains and losses are recognized in income when the investments are derecognized
or impaired, as well as through the amortization process.
• Recoverability of receivables accounts
Short term receivables are presented in their nominal value, net of provisions for potential non collectible
accounts, while long-term receivables (balances that deviate from the normal credit terms) are measured
at amortized cost based on the effective interest rate method. At each balance sheet date all potentially
uncollectible accounts are assessed individually for purposes of determining the appropriate allowance for
doubtful accounts. The balance of such allowance for doubtful accounts is appropriately adjusted at each
balance sheet date in order to reflect the possible risks. Any amount written-off with respect to customer
account balances is charged against the existing allowance for doubtful accounts. Any amount provided for in
respect to customer account balances is charged in the profit and loss statement.
• Impairment of inventories
Provision for slow moving, damaged or obsolete inventories is made when necessary. The impairments at the
net realizable value of inventories are charged in the profit and loss statement in the period the occur.
• Classification of a lease as operating or financial.
Leases where all the risks and rewards of ownership are retained by the lessor are classified as operating
leases. Payments made under operating leases (net of any incentives received from the lessor) are charged
to the income statement on a straight-line basis over the period of the lease. Leases of property, plant and
equipment where the Group has substantially all the risks and rewards of ownership are classified as finance
leases.
