ASTIR PALACE VOULIAGMENIS ATHENS ANNUAL REPORT 2011

Transcription

1 ASTIR PALACE VOULIAGMENIS ATHENS ANNUAL REPORT 2011 (under Law 3556/2007) March 2012

2 CONTENTS STATEMENTS OF THE BOARD OF DIRECTORS.4 CORPORATE GOVERNANCE STATEMENT.5 ANNUAL REPORT OF THE BOARD OF DIRECTORS 19 ANNUAL FINANCIAL STATEMENTS 23 INDEPENDENT AUDITOR S REPORT..24 Statement of comprehensive income.25 Statement of financial position 27 Statement of changes in equity..29 Statement of cash flows 31 Notes to the Financial Statements 33 Note 1 General Information..33 Note 2 Significant accounting policies and estimates.35 Note 3 Capital and risk management..43 Note 4 Business segments..44 Note 5 Turnover & other operating income..45 Note 6 Cost of sales.45 Note 7 Administrative and distribution expenses..46 Note 8 Real estate taxes..46 Note 9 Financial income..46 Note 10 Financial expenses 46 Note 11 Income tax.46 Note 12 Income statement for the year 46 Note 13 Losses per share.47 Note 14 Intangible fixed assets 47 Note 15 Tangible fixed assets..47 Note 16 Deferred tax assets and liabilities.48 Note 17 Inventories.48 Note 18 Accounts receivable.48 Note 19 Cash and cash equivalents..49 Note 20 Other assets..49 Note 21 Bank debt 49 Note 22 Employee benefits 50 Note 23 Other short-term liabilities.51 Note 24 Finance lease obligations.52 Note 25 Provisions 52 Note 26 Tangible fixed asset subsidies..52 Note 27 Non-cash transactions..52 Note 28 Share capital.52 Note 29 Reserves..53 Note 30 Financial instruments.53 Note 31 Certified Public Accountants fees.54 Note 32 Post balance sheet events..55 Note 33 Related party transactions..55 Note 34 Contingent liabilities and commitments 56 DISCLOSURES UNDER ARTICLE 10 OF LAW 3401/ CAPITAL INCREASE ALLOCATION REPORT 58 REPORT ON FINDINGS IN RESPECT OF AGREED-UPON PROCEDURES REGARDING CAPITAL INCREASE ALLOCATION REPORT..59 2

3 INFORMATION AND DATA.61 AVAILABILITY OF FINANCIAL STATEMENTS 63 3

4 2011 ANNUAL FINANCIAL REPORT STATEMENTS OF THE BOARD OF DIRECTORS Statement of the Chairman of the Board of Directors, the Managing Director and the Deputy Managing Director as per Article 4, Law 3556/07 We, the Directors of ASTIR PALACE VOULIAGMENIS SA declare that, to the best of our knowledge: The annual financial statements for the year ended 31 December 2011 were prepared in line with the applicable accounting standards and give a true picture of the assets and liabilities, the net position and the profit and loss account of ASTIR PALACE VOULIAGMENIS SA. The annual report of the Board of Directors depicts the true progress, performance and position of ASTIR PALACE VOULIAGMENIS SA, including a description of the main risks and uncertainties that have arisen. CHAIRMAN of the BOARD Athens, 21 March 2012 VICE CHAIRMAN and MANAGING DIRECTOR DEPUTY MANAGING DIRECTOR APOSTOLOS TAMVAKAKIS LEONIDAS THEOKLITOS VASILEIOS DOULTSINOS 4

5 CORPORATE GOVERNANCE STATEMENT (pursuant to Law 3873/2010) Under Law 3873/2010, which as of 6 September 2010 incorporated into Greek legislation (amending Article 43a.3 (case d) of the Companies Act 2190/20) the provisions of European Directive 2006/46/EC, the Company is under obligation to include a Corporate Governance Statement as a special section of the Board s annual report. As per the said provisions, the Company s Corporate Governance Statement is provided below, arranged under the following sections: 1. The Company s Code of Corporate Governance 2. Corporate Governance practices implemented by the Company beyond what is required by law 3. The General Meeting and rights of the Company s Shareholders 4. The Board of Directors and other Management, Administrative, and Supervisory bodies 5. The Company s Internal Control and Risk Management System related to the Preparation of Financial Statements 6. Data required as per article 10, par. 1 (c), (d), (f), (h) and (i), European Parliament Directive 2004/25/EC 1. The Company s Code of Corporate Governance The Corporate Governance Code (hereinafter CGC or the Code ) sets out in a clear and comprehensive way the spirit in which the Company embraces its corporate governance for the benefit of Shareholders, employees, all other stakeholders and the members of the Board. The CGC provides a framework for promoting the Company s governance and the continuity, consistency and effectiveness of the Board s workings, and constitutes a key component of effective governance. In essence, the CGC is a code of conduct that reiterates the most important parts of the Charter of Association (which, by law, constitute the fundamental institutional text of the Company), together with a series of best practices which, as a whole, comprise the framework that promotes continuity, consistency and effectiveness of the Board s modus operandi and the governance of the Company. The CGC of the Company has been designed on the basis of the relevant Corporate Governance Guidelines adopted by National Bank of Greece (hereinafter NBG ), of whose group of companies the Company is a member, as well as on the basis of best international practices. On adopting the Code, the Company and its Board aspire to embrace the philosophy of these practices and to translate the provisions of the CGC, clearly and free of legalisms, into everyday business practice. The CGC has been prepared in line with the relevant Greek legal framework to which the Company is subject. It is however noted that in the event of divergence between the legal framework and the Charter of Association and individual Code provisions, the former two 5

6 shall prevail. Last, the CGC concerns the internal workings of the Company and its Board and does not affect the powers of representation assigned to its bodies under the Law and the Charter of Association in their transactions with third parties. The Company s CGC can be viewed at ( 2. Corporate Governance practices implemented by the Company beyond what is required by law Beyond what is foreseen by the applicable legal framework, the Company implements the following corporate governance practices and policies. Insurance coverage for Board members Pursuant to NBG s Corporate Governance Guidelines, the Board members of subsidiaries are entitled to adequate insurance coverage against legal or other risks related to their duties in subsidiary companies. Within this context, NBG has drawn up a multi-insurance contract to cover the civil liability of Board members and Managers of all NBG Group companies, to cover civil liability due to negligence, errors and omissions of officers and employees, and to cover losses due to fraud, including electronic fraud. Internal Staff Regulations The Company has adopted a set of Internal Staff Regulations which set out the key principles and values governing the status and conduct of all employees in the workplace. The Staff Regulations apply to all the Company s staff. Whistle-blowing Policy To enhance the effectiveness of Corporate Governance, the Company has introduced a policy for the submission, anonymous or otherwise, of confidential reports by any interested party. The said reports shall concern primarily actions that may be committed by the Company s officers giving cause for concern about their involvement in irregular activities and accounting and auditing practices that are incompatible with the international practice and applicable provisions. Such activities could affect the Company s reputation and customers, Shareholders and employees interests. The said whistle-blowing reports are forwarded to the Company s Audit Committee, which ensures the confidentiality and secrecy of reports as well as the anonymity of those submitting them. This policy enhances the authorities assigned to the Company s Audit Committee which supervises the overall formulation and introduction of the policy, monitors its implementation, and supervises the deployment of the necessary corrective measures. Contact details for the submission of confidential reports can be found on the Company s website: 3. The General Meeting and rights of the Company s Shareholders The Company s Charter of Association set out the modus operandi of the General Meeting of Shareholders, its basic powers and authorities, and the Shareholders rights. 6

7 Operation and authorities of the General Meeting The General Meeting of Shareholders ( GM ) is the Company s supreme corporate body entitled to decide on each single matter concerning the Company. Its lawful resolutions shall be binding on all shareholders, even those absent or dissenting. All of the Company s shareholders are entitled to participate in the GM, while they may be represented at the GM by other, duly authorized persons. Each share shall entitle the holder to one vote. The GM is the sole corporate body vested with authority to decide on: a) Extension of duration, merger, split-off, transformation, revival or dissolution of the Company. b) Amendment to the Company s Charter of Association. c) Share capital increase or decrease. d) Election of Board members. e) Election of auditors. f) Appointment of liquidators. g) Approval of the Company s annual financial statements. h) Appropriation of the annual profits. The following corporate decisions, however, are not subject to a-h above: i) capital increases by Board resolution pursuant to Article 13.1 and of the Companies Act, or capital increases imposed by provisions of other laws, ii) amendments to the Charter of Association introduced by the Board under Article 11.5, Article 13.2 and 13.13, and Article 17b.4 of the Companies Act, iii) the election of Directors in replacement of Directors resigned, deceased or having forfeited their office for whatever reason, in line with the Charter of Association pursuant to Article 18.7 of the Companies Act, iv) the absorption of a company fully owned by another company as per Article 78 of the Companies Act, and v) the option for distribution of profits or non-mandatory reserves within the current financial year by resolution of the Board, subject to prior GM authorization. The GM shall be convoked by the Board and convene duly at the Company s registered office or in the region of another municipality within the prefecture where the Company s registered office is located, at least once a year (the Annual General Meeting or AGM ), always within six months as of the end of the financial year. The GM may also convene extraordinarily ( EGM ) whenever deemed expedient, at the discretion of the Board. With the exception of repeat GMs and GMs deemed similar thereto, the GM shall be convoked at least 20 days prior to the date set for it (i.e., at least 20 calendar days must intervene between the date of publication of the invitation and the date the GM is held). The invitation to the GM shall include, at least, the place, i.e. the premises along with the exact address, where the GM is to be held, the date and time thereof, the items on the agenda, clearly specified, the Shareholders entitled to participate therein, along with precise instructions as to the method of participation and exercise of the rights thereof in person or by proxy, or the possibility of distance-participation, and shall be published according to law. Without prejudice to the above, according to Law 3884/2010, the invitation: 7

8 a) Includes at least the following information: aa) shareholders rights pursuant to par. 2, 2a, 4 and 5 of Article 39 of the Companies Act 2190/1920, setting out the period during which any right may be exercised within the respective deadlines specified in the said paragraphs of Article 39 or, alternatively, the closing date up to which these rights can be exercised, provided that more detailed information related to the said rights and exercise conditions thereof shall be available on the Company s website (domain name), while an express reference thereto shall be included in the invitation. ab) the procedure applying to the exercise of voting rights by representative and especially the forms used by the Company for this purpose as well as the means and methods, provided for in the Charter of Association, as per Article 28a.3 of the Companies Act 2190/1920, by which the Company is notified with regard to the appointment and revocation of representatives via a fax sent to the number each time specified in the invitation of the GM. ac) the procedures applying to the exercise of voting rights by correspondence or electronic means, if such is the case, pursuant to Article 28a.7 and 28a.8 of the Companies Act 2190/1920, b) sets the Shareholder registration date as per Article 28a.4 of the Companies Act 2190/1920, stating that only those holding Shareholder status on that date are entitled to participate and vote in the GM. c) announces the place where the full texts of the documents and draft resolutions provided for under Article 27.3 cases c & d of the Companies Act 2190/1920 are available, as well as how they may be obtained. d) states the Company s website address, where the information under Article 27.3 of the Company s Act 2190/1920 is available. Invitation to the GM is not required in the event that shareholders representing the entire share capital are present or represented at the meeting and none of them objects to the GM being held or taking decisions. If the place and time of the repeat meetings prescribed by law in the event that no quorum is formed are specified in the original invitation, no further invitation is required, on condition that the repeat GM takes place at least ten (10) full days after the cancelled GM. The Chairman of the Board shall provisionally chair the GM or should the Chairman be unable to attend the GM, he shall be replaced by his substitute. The Chairman shall also designate the person who shall provisionally act as a Secretary. The GM shall subsequently elect the Chairman thereof and one Secretary and one vote counter. For as long as the Company s shares are listed, the Shareholders shall duly and in a timely manner observe formalities provided for by law and the relevant GM invitation, otherwise their participation in the GM, in person or by representative, will only be allowed following permission granted by the GM. 8

9 At least 24 hours before each GM, a duly prepared list of the names of the shareholders entitled to vote thereat shall be displayed in a prominent place at the Company s Head Office. Should a shareholder or proxy thereof object to the list, such objection may be raised prior to deliberation on the agenda. A Shareholder may appoint or revoke a proxy in writing and shall notify the Company by fax at least 3 days before the date set for the GM. Each Shareholder may appoint up to 3 proxies. The GM shall form a quorum and validly deliberate on the items of the agenda when shareholders owning at least 20% of the paid-up share capital are present or represented thereat. Should there be no such quorum at the first GM, the GM shall reconvene within 20 days as of the date of the meeting that was cancelled, by at least 10 days' prior invitation to this effect; at such repeat meeting the GM shall form a quorum and validly deliberate on the original agenda irrespective of the percentage of the paid-up share capital represented thereat. If the place and time of the repeat meetings prescribed by law in the event that no quorum is formed are specified in the original invitation, no further invitation is required, on condition that the repeat GM takes place at least 10 full days after the cancelled GM. Resolutions shall be adopted by absolute majority of the votes represented at the GM. Exceptionally, the GM shall form a quorum and validly deliberate on the items of the agenda when shareholders representing 2/3 of the paid-up share capital are present or represented thereat with respect to resolutions concerning: a) Extension of duration, merger, split-off, transformation, dissolution or revival of the Company. b) A change in corporate nationality. c) A change in corporate activities. d) Any share capital increases other than increases provided for by Article 5.2 & 5.4a of the Charter of Association, or imposed by Law or implemented through the capitalization of reserves. e) A decrease in share capital unless carried out in accordance with Article 16.6 of the Companies Act. f) A change in the method of profit appropriation. g) An increase in shareholder liability. h) Delegation or renewal of powers to the Board to decide on a share capital increase or the issue of a bond loan as per Article 5.3 of the Charter of Association, and 1. Any other matter for which the Law specifies that resolutions can be adopted by the GM only if the quorum stipulated in the present paragraph is formed. 9

10 2. Should no quorum be formed at the first meeting, as described in the preceding paragraph, a first repeat meeting shall convene within 20 days of the first meeting, with at least 10 days' prior invitation and shall form quorum and validly deliberate on the original agenda when at least 1/2 of the paid-up share capital is represented thereat. If the place and time of the repeat meetings prescribed by law in the event that no quorum is formed are specified in the original invitation, no further invitation is required, on condition that the repeat GM takes place at least 10 full days after the cancelled GM. 3. If, again, no quorum is formed, a second repeat meeting shall convene within 20 days, with at least 10 full days' prior invitation, and shall form quorum and validly deliberate on the original agenda when at least 1/5 of the paid-up share capital is represented thereat. If the place and time of the repeat meetings prescribed by law in the event that no quorum is formed are specified in the original invitation, no further invitation is required, on condition that the repeat GM takes place at least 10 full days after the cancelled GM. 4. All resolutions on items relating to issues under Article 7.1 of the Charter of Association shall be adopted by a majority of 2/3 of the votes represented at the GM. Deliberation and resolutions adopted by the GM shall be recorded in a special book in summary form. Should a shareholder so request, the Chairman of the GM shall enter an accurate summary of the shareholder's opinion in the minutes. A list of the names of the shareholders present at the GM in person or by proxy, to be prepared as per Article 27.2 of the Companies Act 2190/1920, shall be entered in the said book also. The Boards of listed companies shall publish the outcome of the vote on their website within 5 days of the date the GM is held, stating for each resolution at least the number of shares corresponding to valid votes, the percentage of the share capital represented by these votes, the total number of valid votes as well as the number of votes in favour and against each resolution and the number of abstentions. Copies of or excerpts from the GM minutes shall be ratified by the Chairman of the Board or the legal substitute thereof, as per Article 19 of the Charter of Association. Following approval of the annual financial statements, the AGM shall, by special voting by roll-call, decide on the discharge from personal liability of the Board and the auditors. The members of the Board and employees that are shareholders of the Bank may take part in the roll-call only on the basis of the number of shares they hold. Such discharge shall have no effect in cases falling under Article 22a of the Companies Act 2190/1920. Minority Rights With regard to GMs, Shareholders have the rights specified under Article 39 of the Companies Act 2190/1920, including the following: a) At the request of shareholders representing 1/20 of the paid-up share capital, the Board shall record on the agenda of the GM convened additional items, if the relevant request is submitted to the Board at least 15 days prior to the GM. The additional items shall be published or announced by the Board, as per Article 26 of the Companies Act 2190/1920, at least 7 days prior to the GM. The said request with 10

11 regard to recording additional items on the agenda shall be accompanied by justification or a draft of the decision submitted for approval to the GM and the revised agenda shall be published as in the case of the previous agenda, 13 days prior to the date set for the GM, and shall at the same time be available to Shareholders on the Company s website together with the justification or the draft decision submitted by the shareholders as per Article 27.3 of the Companies Act 2190/1920. b) At the request of shareholders representing 1/20 of the paid-up share capital, the Board shall provide to the Shareholders as per Article 27.3 of the Companies Act 2190/1920 and at least 6 days prior to the date set for the GM, drafts of the decisions on matters included in the original or any revised agenda, if the relevant request is submitted to the Board at least 7 days prior to the date set for the GM. c) The Board shall not record items on the agenda or publish or announce the said items together with the justification and drafts of decisions submitted to the shareholders as per Article 39.2 and 2a, should their content be incompatible with the law and proper practice. d) At the request of shareholders representing 1/20 of the paid-up share capital, the Chairman of the GM shall postpone, only once, decision-taking by the GM, whether an AGM or an EGM, on all or specific matters, for a new GM to be held on the date indicated in the shareholders request, but not later than 30 days as of the said postponement. The GM held following such postponement, being a continuation of the previous GM, is not subject to publication requirements as regards the invitation to shareholders, and new shareholders may also participate therein. e) At the request of a shareholder filed with the Company at least 5 full days before the date of the GM, the Board shall provide the GM with any such specific information on the Company s business as may be requested, insofar as it serves for real assessment of items on the agenda. The Board may file a single response to all Shareholders requests with the same content. No such obligation to provide information applies in the event that the said information is available on the Company s website, particularly in the form of questions and answers. Shareholders rights Additionally, information related to the Company s Shareholder Rights and the way they are exercised is included in Other Information of the Board s Annual Report to the Shareholders. 4. The Board of Directors and other Management, Administrative, and Supervisory Bodies The Board is responsible for the management (administration and disposal) of corporate assets and the representation of the Company. The Board may, only in writing, assign all powers and authorities (except for those requiring collective actions), as well as the Company s representation to one or more persons, directors, Company employees or other persons properly qualified, lawyers or third parties in general, also specifying the scope thereof. 11

12 Board membership and term of office The Company is managed by the Board, which is composed of between 5 and 11 directors. At least 1/3 of the Company s Board are non-executive members, who are not Company employees and are not involved in its daily business. At least 2 Board members shall be independent, non-executive members, as per the Company s CGC. According to law, independent directors are appointed by the GM. Board members are elected by the Company s GM for a 3-year term of office, which can be extended automatically until the first AGM upon expiry of their term of office, which cannot exceed four years. Legal entities may also be Board members. In such a case, the legal entity is required to appoint an individual to exercise its powers as a director. Board members may be revoked at any time by the GM. In addition, the GM may also elect substitute directors, the number of which cannot be higher than the ordinary directors elected by the GM. Substitute directors so elected shall, in order of election, replace any elected directors who resign, die, or forfeit their office or capacity for whatever reason. The directors can be reelected. Remunerations of the Board members are determined by resolution of the AGM, following the Board proposal as prescribed by law. The Board members are not liable against any shareholder or third party. They are only liable against the Company, which is a legal entity, with regard to the management of corporate affairs, which they are to manage with the due diligence of a prudent businessman. Board constitution Following its election, the Board shall convene and be duly constituted into a body to elect its Chairman and Vice-Chairman. The Board may elect one or two Managing Directors from among its members only, specifying their authorities. Moreover, the Board shall appoint the Secretary who may or may not be a member thereof. Board Meetings Minutes The Board of Directors shall meet at the Company s registered office when required by law or corporate needs, or when the Chairman sees fit, or at the request of directors, as provided for in the Company s Charter of Association. Exceptionally, the Board may hold meetings at places other than the Company s registered office, in cities of Greece where the Company has a branch or office. Under all circumstances, Board meetings can be validly held at any place other than the Company s registered office, whether in Greece or abroad, provided that at any such meeting all directors are present or represented and no director objects to the meeting being held or to resolutions being adopted thereat. The Board shall be convened by the Chairman thereof and the meeting shall be announced by means of an invitation to the directors at least 2 business days prior to the meeting. The invitation must clearly specify the items on the agenda, otherwise resolutions may not be adopted at the meeting unless all directors are present or represented and no director objects to resolutions being adopted thereat. By request of two directors, to be filed with the Chairman or his substitute, the Chairman or his substitute shall call a Board meeting to convene within 7 days as of the date the request is filed. The said directors should clearly specify in their request the agenda of the Board 12

13 meeting requested; failure to do so carries a penalty of inadmissibility. In the event that such meeting is not convened within the 7-day deadline as above, the directors are allowed to convene a Board meeting themselves within 5 days as of expiry of the said deadline, by communicating the relevant invitation to the rest of the directors. At the request of two directors, the Chairman shall enter any item proposed to him in the agenda of the first meeting held following such request. The Chairman of the Board shall chair the meetings or should the Chairman be unable to attend the meeting, he shall be replaced to the full extent of his powers by the Deputy Managing Director and should the latter also be unable to attend, following a Board resolution, the Managing Director. The Board may meet by teleconference, in which case the Invitation to the directors shall include the information necessary for their participation in the meeting. Board deliberations and resolutions shall be recorded in summary form in a special book, which may be maintained in electronic form also. At the request of a director, the Chairman shall enter an accurate summary of the director s opinion in the Board minutes. A list of the names of the directors present or represented at the meeting shall also be recorded in the said book. Board minutes drafted and signed by all directors or the representatives thereof shall be equivalent to a Board resolution, even where no Board meeting has been held. Copies of Board meeting minutes that are subject to filing with the Companies Register pursuant to Article 7a of the Companies Act, as amended, shall be filed with the Ministry of Trade within 20 days as of the Board meeting. Board meeting minutes shall be signed by the Board Chairman or Secretary; copies of and excerpts from the said minutes issued by the said persons shall be official without further validation, as per Article 20.8 of the Companies Act also. Quorum Board Majority A director unable to attend the meeting shall be represented by another director. Each director may represent only one director who is absent. The Board shall form a quorum and validly deliberate when one half plus one of the directors is present or represented, but under no circumstances may the number of directors present in person be less than 5. For resolutions to be validly adopted by the Board an absolute majority of the votes of directors present or represented is required, except for cases subject to Article 5.2 of the Company s Charter of Association, according to which during the first five years as of the Company s establishment, the Board shall by resolution of the same a) increase in part or in all the corporate capital by the issue of new shares, the total amount of which may not exceed the initial share capital, b) issue a bond loan by the issue of convertible bonds, the total amount of which may not exceed half of the paid-up share capital; the adoption of the said resolution requires a majority of at least 2/3 of its members. In such case the provisions of Article 3a.2 and 3a.3 of the Companies Act 2190/1920 apply, as amended. Board authorities The Board is the corporate body vested with the authority to decide on any Company matter, within the context of the Company s corporate objectives; excluded are matters that by law fall within the sole jurisdiction of the GM. The Board may assign its authorities pursuant to the Corporate Governance Code as well as pursuant to the Company s Charter of Association. 13

14 The Board may also delegate the Company s internal control to one or more persons other than members of the Board, or to members of the Board also, insofar as this is not prohibited by law. The persons referred to in the previous sub-paragraphs may, insofar as this is provided for under the relevant Board resolutions, further delegate all or part of the functions delegated to them to, and further confer the powers conferred on them on, other persons, directors, employees, attorneys or third parties in general. The GM has assigned to the Board the right to issue a bond loan for an amount that may not exceed half of the paid-up share capital by resolution of the same, the adoption of which resolution requires a majority of at least 2/3 of its members. Board acts, even if in excess of corporate objectives, shall be binding on the Company against third parties, unless there is proof that the third party was, or should have been, aware of such excess; observance alone of the publication formalities as regards the Bank's Charter of Association or amendments thereto does not constitute proof. Limitations on the Board powers pursuant to the Charter of Association or to GM resolutions, even if subjected to the publication formalities, may not be asserted against third parties. All Board authorities are subject to the Companies Act 2190/1920 and other provisions of applicable legislation. Replacement of Directors If, for any reason whatsoever, a director vacancy occurs and such cannot be filled, as per Article 21.2 of the Charter of Association, by a substitute director who may have been elected by the GM the remaining directors, who should be at least five, shall elect a provisional substitute for the term remaining for the director being replaced. This election is announced by the Board during the next ordinary or extraordinary GM, which may replace the elected even if the relevant item has not been recorded on the agenda. In any case whatsoever, the remaining directors, regardless of the number, may convene a GM exclusively for the election of a new Board. Board member authorities The Company s Board members are responsible for the administration, management and representation of the Company. Their duty is to continuously pursue the enhancement of the long-term economic value of the Company and the protection of the corporate interest in general. The directors and any third parties to whom the Board has delegated powers and authorities shall not pursue own interests conflicting with interests of the Company and shall disclose to the other directors in a timely manner own interests that may arise from corporate transactions within their responsibility, and any other conflict of interests between them and the Bank or any affiliate thereof that may arise in the course of their duties, in the sense of Article 42e.5 of the Companies Act. The Board draws up a report which sets out the Company s transactions with any affiliate thereof as per Article 42e.5 of the Companies Act 2190/1920. This report is prepared on an annual basis and communicated to the supervisory authorities. The Company has established a minimum or maximum number of shares that each Board director shall hold, except for independent non-executive Board directors who, during their term of office, are not to hold more than 0.5% of the Company s share capital or have relations of dependence with the Company or any of its affiliates, as per Article 4.1, Law 3016/

15 All Board members are subject to Law 3340/2005 and must notify the Company in writing regarding any stock exchange transactions, in accordance with the applicable law, involving shares issued by the Company or derivatives or other financial instruments not associated with the Company, within at least two business days as of execution of the said transactions, and subsequently the Company forwards this notification to the Capital Market Commission and the Athens Exchange within the following business day. This obligation also applies to entities which are closely related to the Company s Board members. Authorities of non-executive members Non-executive Board members are responsible for the handling of every-day Company Management issues. Authorities of non-executive and independent non-executive members Non-executive members are responsible for advancing all corporate issues. The independent non-executive Board members are individuals who, during their term of office, do not hold more than 0.5% of the Company s share capital or have relations of dependence with the Company as per Article 4, Law 3016/2002. Relations of dependence, as per the legislation mentioned above, are cases when a Board member: maintains a business or other kind of professional relationship with the Company or any affiliate as per Article 42e.5 of the Companies Act 2190/1920, which relationship by nature affects the Company s business activity particularly when a significant Company supplier or customer is involved, is the Company s Board Chairman or an executive officer as well as when s/he has the said capacities or is an executive Board member of an affiliate to the Company business as per Article 42e.5 of the Companies Act 2190/1920 or has entered a dependent employment contract with the Company or its affiliates, has a second-degree kinship with or is the spouse of an executive Board member or manager or shareholder holding the Company s or an affiliate s share capital majority as per Article 42e.5 of the Companies Act 2190/1920. Independent Board members may submit other reports, besides those submitted by the Board, to the ordinary or extraordinary GM, as they see fit. Other Management, Administrative and Supervisory bodies The Company s Board set up an Audit Committee on 29 March The Audit Committee has been assigned with the task of supporting the Board in fulfilling its obligation against the Company s Shareholders, investors and any other parties doing business with the Company. On 17 April 2007, the Board introduced the Charter of the said Committee. The Audit Committee has been assigned with the following authorities: monitoring the financial reports or other financial data and information published by the Company in terms of completeness and accuracy; verifying the effectiveness of the Company s control systems including financial statements control mechanisms; 15

16 submission of proposals to the Board for the appointment of a Certified Auditor, approval of the latter s remuneration and employment terms following his/her appointment by the GM; monitoring and control of the independence, objectivity and effectiveness of the Certified Auditor s work; preparation and implementation of a policy for the provision of non-auditing services by the Certified Auditor; monitoring and control of the independence, adequacy and effectiveness of the Company s Internal Control Service; supervision of the Company s Internal Control System and regulatory compliance following relevant notification of the Board. The Committee members are appointed by the Company s Board following proposals which are submitted to the Board Chairman. The Committee consists of three members; at least one of the said members shall be experienced and specialized in financial matters. The Chairman of the Committee is appointed by the Board. The term of office of the Committee members is for one year and may be renewed. The Committee shall convene in quorum when at least two members are present, one of which is the Chairman, while participation by representative is not permitted. Resolutions shall be adopted by absolute majority of the members present. In the event of a tie, the Chairman s vote decides. The composition of the Audit Committee, whose term of office shall expire by 2012 by resolution of the Board, shall be as follows: 1. Ioannis Syggelidis* Chairman Non-executive independent Board member 2. Charalambos Mazarakis* Member Non-executive Board member 3. Athanasios Martinos Member Non-executive Board member * Expert on financial matters Committee members shall not receive remuneration for their participation in the same. 5. The Company s Internal Control and Risk Management System related to the Preparation of Financial Statements For the purposes of ensuring the good reputation and credibility of the Company against its Shareholders, customers, investors as well as regulatory and independent authorities, the Company provides for the continuous enhancement and strengthening of the Internal Control System (ICS). The ICS is the set of control mechanisms and procedures that monitor on a continuous basis all the business activities and ensure the effective and safe operation of the Company. The Company s ICS focuses in particular on the attainment of the following targets: identification and handling of any kind of risks undertaken, including operational risk; ensuring completeness and reliability of data and information required for the accurate and timely determination of the Company s status and preparation of reliable financial statements which are submitted to Greek authorities; 16

17 compliance not only with internal principles, procedures and codes of ethics, but also with external regulations, including national and European legislation, as well as other international directives; adoption of international best practices and principles of corporate governance; prevention and avoidance of wrongful acts and irregularities which could put at risk the reputation and interests of the Company, Shareholders and parties conducting business with it. The Company s Board is responsible for adopting the appropriate policies designed for the development of an adequate and effective ICS. The Management is responsible for developing and incorporating the appropriate control mechanisms and procedures in line with the range, risks and nature of the Company s units business, assessing any weaknesses and shortcomings that may emerge and taking the necessary corrective action. Management of risks related to the preparation of financial statements Audit Committee The Company s Audit Committee is responsible for monitoring and assessing on an annual basis the adequacy and effectiveness of the ICS on the basis of reports received from the internal audit division and external auditors. The Audit Committee supervises the procedure for preparing the Company s annual and periodical financial statements which are drafted on the basis of the International Financial Reporting Standards (IFRS) and notifies the Company s Board accordingly. Moreover, the Audit Committee is updated on the assessment of the ICS related to the financial information provided annually by the Management of the Company and monitors the progress of corrective measures. Within the course of the year, external auditors notify the Audit Committee on any problems or weaknesses identified in ICS during the performance of controls. The Audit Committee submits proposals to the Board for the purposes of addressing the said weaknesses and monitors the implementation of corrective measures. In addition, the Committee provides authorization for any services offered by external auditors to the Company and reviews the relationship between auditing and non-auditing services, ensuring the independence of the audit function. 6. Data required as per par. 1 (c), (d), (f), (h) and (i), Article 10, European Parliament Directive 2004/25/EC The Company does not have shareholdings. NBG, the principal shareholder of ASTIR PALACE VOULIAGMENIS SA, holds 85.35% of the Company s share capital as at No other individual or legal entity holds more than 5% of the share capital. No control rights are provided to holders of securities unless provided for by law. No statutory restrictions apply to the voting right and the deadlines related to the exercising of the voting right unless provided for by law. 17

18 Athens, 21 March 2012 THE CHAIRMAN OF THE BOARD OF DIRECTORS APOSTOLOS TAMVAKAKIS 18

19 ANNUAL REPORT OF THE BOARD OF DIRECTORS This Annual Report 2011 was prepared by the Board of Directors of Astir Palace Vouliagmenis SA ( Astir Palace or the Company ) in conformity with the provisions of Article 4.7 of Law 3556/2007. In 2011, the adverse economic environment and associated social unrest generated a negative image of Greece on an international level. As a consequence, arrivals at Athens International Airport dropped considerably to 14,446,963 from 15,411,099 in 2010 (down 6.3%) (source: Athens International Airport). However, despite the reduction in arrivals, the average room occupancy in international luxury hotels in Attica stood at 55.80% (2010: 54.7%) in 2011, while the average daily room rate fell slightly to EUR (2010: EUR ) (source: Attica Hotels Association). The business of Astir Palace in 2011 needs to be seen in light of this backdrop. The relative contraction in turnover vis-à-vis 2010 was chiefly due to the Posidonia Analyst and Investor Day held in 2010, which generated an income spike that year of EUR 2.5 million. The Company s performance in 2012 will depend on developments in the domestic and international macroeconomic environment. Investment In 2011 the Company invested EUR 1.6 million to improve its hotel premises and prepare design studies for the implementation of the Aphrodite Hotel project and the construction of a new conference centre and other infrastructure. Financial results The Company s turnover in 2011 amounted to EUR 28.7 million vis-à-vis EUR 31.3 million in 2010, down by 8.2%. The total occupancy days in Arion Resort & Spa and The Westin Athens amounted to 59,495 in 2011 vis-à-vis 59,264 in 2010, while occupancy income fell by 2.8%, reflecting the reduction in the average daily room rate by 3.5%. The result before tax, interest, depreciation and real property tax was a loss of EUR 640 thousand vis-à-vis a profit of EUR 997 thousand in Note that, in 2011, the Liquidity Ratio, the Debt-to-Equity Ratio and the Bank Debt to Equity Ratio stood at 0.40 (2010: 0.53), 0.23 (2010: 0.19) and 0.11 (2010: 0.09), respectively. The change in the ratios is chiefly due to an increase in short-term bank borrowing and a reduction in equity. Subsequent events There are no significant events subsequent to the balance sheet of 31 December 2011 regarding the Company and warranting reporting under IFRS. Environmental and labour issues The Company does not face any significant environmental and labour issues. Significant events that took place in 2011 and their impact on financial statements Long-term lease of the Marina of Vouliagmeni On the Company was provisionally awarded the long-term (40-year) lease of the Marina of Vouliagmeni (hereinafter the Marina ) in an international call for tenders, bidding the total amount of EUR 43 million plus annual inflation and other adjustments for the whole term of the contract. The long-term lease contract had not been signed by the date of approval of the financial statements, and consequently it did not affect them. Furthermore, in the framework of the long-term lease contract the Company is going to establish a subsidiary that will undertake the lease and management of the Marina, as well as its upgrade and renovation. Charge of Extraordinary Special Tax on Power-Supplied Surface Areas Under Law 4021/11, the Company was charged with an Extraordinary Special Tax on Power-Supplied Surface Areas of EUR 597 thousand, which the Company paid, but expects that it will recover EUR 348 thousand on the basis of the fact that part of its property is not supplied with power and that Government Gazette /12/2011 provides for reductions in such cases. Accordingly, the 19

20 Company s results before tax were reduced by EUR 249 thousand, while the Company has a claim for EUR 348 thousand. Description of key risks and uncertainties Foreign-exchange risk The Company s invoices are issued solely in euro. The invoices the Company accepts in foreign currency are of a limited amount, while foreign exchange trading to meet the needs of customers is made on a daily basis for petty amounts. Accordingly, the FX risk is insignificant. Credit risk Exposure to credit risk is limited to the amount of claims against customers. The Company has a clear and consistently applied credit policy. The level of credit risk to which the Company is exposed is monitored on a continuous basis to ensure that credit granted to each customer does not exceed a specific credit and time limit. There is no accumulation of credit risk resulting from claims against customers, as the Company has a large number of customers and the credit risk is dispersed. Interest-rate risk The Company s interest bearing claims and liabilities are connected to the Euribor and the interest rate fluctuation risk results chiefly from borrowing at a floating rate. The Company does not use financial derivatives, but monitors interest rate fluctuations and takes measures to reduce the financial cost by managing its funds rationally. Liquidity risk The Company manages its liquidity by monitoring its cash flows on a constant basis and ensuring adequate funds and financing to meet its operational and investment outflows. List of significant transactions between the issuer and associated persons. The transactions between the Company and associated parties between and and the respective balances as at are as follows: (in EUR thousands) Associated party Description of transaction National Bank of Greece Rental expenses - 6 National Bank of Greece Interest expenses 1, National Bank of Greece Interest income National Bank of Greece Income from provision of services National Bank of Greece Bank fees and expenses National Bank of Greece Cost of borrowed staff fees - 90 National Bank of Greece Income from lent staff fees EHGI* SA Income from provision of services 2 EHGI SA Insurance premium expenses EHGI SA Staff insurance premium expenses Ethnoplan SA** Software development services 5 15 Ethnodata SA Provision of services 3 1 Ethniki Leasing SA Leasing interest 1 4 NBG (Cyprus) LTD Interest expenses 9 8 Associated Party Description of balance National Bank of Greece Sight and time deposits 6,512 4,511 National Bank of Greece Loan principal due 24,882 23,110 National Bank of Greece Loan interest due National Bank of Greece Claims from provision of services National Bank of Greece Letters of guarantee 3,377 2,377 Ethniki Ins. SA Staff insurance premiums due 5 3 Ethniki Ins. SA Insurance premiums due Ethniki Ins. SA Claims from provision of services 3 - Ethnoplan SA* Claims from provision of services - 15 Ethnodata SA Claims from provision of services 7 - Ethniki Leasing SA Leasing Obligations

21 NBG (Cyprus) LTD Loan principal due NBG (Cyprus) LTD Loan interest due 4 15 *Ethnoplan SA and Ethnodata SA have merged The Company s Directors and senior officers are not entitled to any benefits after they retire from office or any bonus based on the value of the shares. The Company s managing officers have not taken loans of a significant amount from the parent company. The remunerations paid to the Board amounted to circa EUR 11 thousand (2010: EUR 30 thousand) and the remunerations to managing directors plus contributions and other benefits and compensations to EUR 758 thousand (2010: EUR 910 thousand) approximately. Other information Structure of share capital The Company s share capital amounts to EUR 191,700 thousand, divided into 63,900,000 ordinary registered shares of a nominal value of EUR 3.00 each. The shares are listed on the Athens Exchange. The share-related rights of the Company s shareholders are proportional to the percentage of capital represented by the paid-up value of the share. Each share incorporates all the rights and liabilities provided for by law and the Company s Charter of Association. The General Meeting of the Company s shareholders retains all its rights during the Company s liquidation (Article 35 of the Charter of Association). The liability of the Company s shareholders is limited to the nominal value of the shares they hold. Limitation to the transfer of the Company s shares The Company s shares can be transferred as provided for by law. NBG is under obligation to hold 51% of the Company s share capital. Significant direct or indirect shareholding as provided for by Presidential Decree 51/1992 NBG holds 85.35% of the Company s share capital. Apart from this, there is no other significant direct or indirect participation amounting, as provided for by Presidential Decree 51/1992, to a percentage directly or indirectly higher than 5% of the total number of the Company s shares. Shares providing special control rights No share of the Company gives special control rights to its holders. Limitation to the voting right No limitation to the voting right of any share is provided for in the Company s Charter of Association. Agreements between the Company s shareholders The Company is not aware of any agreement between its shareholders that limits the right of transfer of shares or the exercise of the voting rights thereof. The limitation to the transfer of the Company s shares is in force. Regulations regarding appointment and replacement of Board members and amendment to the Charter of Association The provisions of the Company s Charter of Association regarding appointment and replacement of Board members and amendment to such provisions are not contrary to the provisions of Codified Law 2190/1920. BoD s power to issue new shares or redeem own shares 1) Under Article 13 par. 1 of Codified Law 2190/1920, the Company s Board is authorized, following a General Meeting resolution subject to the publication provisions of Article 7b of Codified Law 2190/1920, to increase the Company s share capital by issuing new shares, provided that the relevant decision is taken by a majority of at least two thirds (2/3) of all Board members. In such a 21