TABLE OF CONTENTS AGROTIKI INSURANCE S.A.

Transcription

1 ANNUAL FINANCIAL REPORT 2013

2 TABLE OF CONTENTS 2 1. MANAGEMENT REPORT BY THE BOARD OF DIRECTORS AUDIT REPORT BY INDEPENDENT CERTIFIED AUDITOR ANNUAL FINANCIAL STATEMENTS SEPARATE AND CONSOLIDATED BALANCE SHEET SEPARATE AND CONSOLIDATED COMPREHENSIVE INCOME STATEMENT SEPARATE AND CONSOLIDATED CHANGES IN EQUITY STATEMENT SEPARATE AND CONSOLIDATED CASH FLOW STATEMENT GENERAL INFORMATION MAIN ACCOUNTING PRINCIPLES LEGISLATIVE FRAMEWORK INSURANCE AND FINANCIAL RISK MANAGEMENT NET WRITTEN PREMIUMS AND RELATED INCOME COMMISSIONS PAID CLAIMS PAID TO POLICYHOLDERS (RETENTION CHANGES IN INSURANCE PROVISIONS NET INTEREST INCOME NET FEE AND COMMISSION INCOME PROFIT FROM INVESTMENT SALES PROFIT / (LOSSES) FROM VALUATION OF INVESTMENTS (LOSS) FROM PROPERTY VALUATION DIVIDEND INCOME OTHER OPERATING INCOME OPERATING EXPENSES INCOME TAX PROFIT PER SHARE TANGIBLE FIXED ASSETS AND INVESTMENT PROPERTY INTANGIBLE ASSETS HOLDING IN ASSOCIATED COMPANIES INVESTMENT SECURITIES HELD TO MATURITY INVESTMENT SECURITIES AVAILABLE FOR SALE FINANCIAL ASSETS AT FAIR VALUE THROUGH RESULTS INVESTMENTS ON BEHALF OF POLICY HOLDERS (UNIT LINKED) AGROTIKI INSURANCE S.A.

3 TABLE OF CONTENTS 27. RECEIVABLES FROM LOANS RECEIVABLES FROM PREMIUMS RECEIVABLES FROM REINSURERS COMMISIONS AND OTHER DEFERRED PRODUCTION COSTS OTHER ASSETS DEFERRED TAX CASH AND CASH EQUIVALENTS LIABILITIES FROM INVESTMENT INSURANCE CONTRACTS INSURANCE PROVISIONS RETIREMENT BENEFIT LIABILITIES LIABILITIES TO REINSURERS OTHER LIABILITIES OTHER PROVISIONS SHARE CAPITAL RESERVES SEGMENT REPORTING TRANSACTIONS WITH ASSOCIATED COMPANIES AUDITOR REMUNERATIONS (N.3756/ MINIMUL CAPITAL REQUIREMENT AND SOLVENCY LEVEL GUARANTEE FUNDS ADJUSTEMENTS CONTIGENT LIABILITIES AND RELATED EVENTS EVENTS AFTER THE END OF THE REPORTING PERIOD DATA AND INFORMATION FOR THE PERIOD FROM 01/01 TO 31/12/ AGROTIKI INSURANCE S.A. 3

4 1. MANAGEMENT REPORT BY THE BOARD OF DIRECTORS MANAGEMENT REPORT BY THE BOARD OF DIRECTORS OF AGROTIKI INSURANCE SA FOR THE FISCAL YEAR ENDED ON DECEMBER 31, Α. Financial Information Agrotiki Insurance SA (hereinafter the Company ) consolidates with the method of full consolidation the Company ATE Insurance Romania SA, registered in Bucharest, Romania. The consolidated pre-tax results for the fiscal year 2013 amounted to profit 31,5 million, compared to profit 31,9 million for the same period last year. Income tax for the 2013 fiscal year amounted to 5,9 million and deferred tax (asset) to 13,7 million, forming the final results after taxes, to profits 39,3 million compared to profits 26,5 million for the same period last year. During 2013 a valuation of Company's property (owner occupied and investment) was conducted by an independent property appraisal firm and resulted in an impairment of 7,5 million, with a corresponding charge of the results. On December 31, 2013, the Company s equity amounted to 69,9 million, compared to -150,6 million on December 31, 2012, and the Group s equity amounted to 68 million, compared to -152,2 million respectively. Specifically, following analysis, the key economic figures for the Company s results (separated) are as follows: The Company s Gross Written Premiums amounted to 170,1 million, compared to 179,7 million for the same period last year, thus decreasing by 5,3%. This is mainly due to the decrease in nonlife insurance policies. Specifically, from the Company s Total Gross Written Premiums the amount of 36,2 million correspond to life insurance policies (2012: 38,3 million) and 133,9 million correspond to non-life insurance policies (2012: 141,4 million). Claims paid for the 2013 fiscal year amounted to 95,4 million, compared to 100 million for the same period last year. Insurance operating result, amounted to 70,7 million, compared to 53,6 million for the same period last year. Company s investment revenue amounted to 5,8 million, compared to 7 million for the same period last year. Net Interest revenue for the 2013 fiscal year amounted to 9,2 million compared to 10,7 million for the same period last year. Company s operating expenses during the fiscal year 2013 amounted to 47,4 million, compared to 32,5 million for the same period last year, presenting an increase of 45,8% while for the Group operating expenses amounted to 48 million, compared to 33,1 million for the same period last year, presenting an increase of 45%, due to the cost of employees voluntary exit scheme following Piraeus Bank s scheme, amounting to 12,1 million. Staff cost amounted to 11,3 million compared to 11 million for the same period last year, presenting a minor increase of 2,6%. AGROTIKI INSURANCE S.A.

5 1. MANAGEMENT REPORT BY THE BOARD OF DIRECTORS Profits before taxes for the Company amounted to 31,7 million, compared to profits of 31,9 million for the same period last year. Profits after taxes amounted for the Company 39,5 million, compared to 26,5 million for the same period last year. Total taxes, amounting to 7,8 million, arose from income tax of 5,9 million and from benefit amount of 13,7 from deferred tax due to the change of the tax rate from 20% last year to 26% this year. Company's commitments in guarantee funds and solvency margin are mentioned in notes 45 and 46 of the Financial Statements. There are no other commitments or guarantees. MAIN INDICATORS Operating expenses / Operating income 57,4% 50,5% 57,4% 50,5% 2 Receivables collection rate (including premiums on investment contracts) 30% 109 days 26% 95 days 30% 109 days 26% 95 days 3 Claims Paid/ Net written premiums 68,1% 66,7% 68,1% 66,7% Β. Significant events during the 2013 fiscal year and their impact on the annual financial statements The significant events that took place during the period January 1 to December 31, 2013, and up to the preparation of this report, and which had a positive or negative impact on the annual financial statements, are as follows: a) On March 8, 2013, the sole shareholder of the Company, Piraeus Bank, according to the decision of the Ordinary General Meeting of the Shareholders, in their meeting dated on for the increase of Capital Share, made a payment of 172,1 million. As a result, the Company s share capital amounted to ,50 divided into shares of nominal value of 1,50 each. b) On Piraeus Group announced Employees voluntary Exit Program. 124 employees of the Company participated in the program, 83 employees terminated by while the rest will gradually leave during 2014 until the completion of Company s sale. The total cost of the program amounted to 12,1 million and was accounted for in the 2013 fiscal year. c) The unaudited fiscal years for the Company are 2008, 2009 and The tax authorities have commenced auditing the fiscal years 2008 and 2009, but the audits have not been completed yet. The Management estimates that no further charges will arise for the Company, apart from the already formed provisions. As regards the tax audit for the 2011, 2012 and 2013 fiscal years, in accordance with Law 3842/2010 and the Ministerial Circular 1159/2011 in force for balance sheets ended after June 30, 2011, the tax audits for companies that must be audited by Certified Auditors will be conducted from now on by them. The tax audit for 2013 fiscal year will be concluded upon issuing the relevant Tax Compliance Report, while the corresponding report for the year 2012 has already been granted in 2013 and will AGROTIKI INSURANCE S.A. 5

6 ANNUAL FINANCIAL REPORT become permanently accepted by the tax authorities after 18 months from issue date. The corresponding report for the fiscal year 2011 has been finally accepted by the tax authorities as 18 months of the date of issue have elapsed. d) To Required Solvency Margin (R.S.M.) on December 31, 2013 amounts to 32,9 million. The Company meets adequately the Required Solvency Margin with the Available Solvency Margin (A.S.M.), amounted to 74,7 million as it has been calculated and sent to the Supervisory Authority, on the December 31, e) The Company during the year 2013 had its properties valued by a recognized valuation Company. This resulted in their impairment by 7,5 million consequently affecting results. C. Prospects Business developments for the 2014 After the of Share Capital increase that was carried out during 2013, the Company is considered as one of the most dynamic players in the market, with capital adequacy and ready to take the lead again in the coming period. The continuous improvement of financial performance, the promotion of the new dynamic identity in the insurance market and the emphasis on quality services to our customers and partners, will constitute the pillars of the Company s strategy for the current year based on the valuable experience of the past and emphasizing on the points of excellence such as: the position in the Greek insurance market, as one of the most important and leading companies, the expertise in all insurance sectors, the human-centric business philosophy, the continuous and fundamental values of the Company, the transparency, trustworthiness and reliability in our relations with customers and partners, the development and the continuous training of staff and partners, the devoted partners and customers. The strategy and philosophy of the Company s Management dictate prudent business management as well as steady and careful progress, while focusing in keeping only profitable portfolios. The goals for 2014 are as follows: To take measures in order to curb the decline of the portfolio with interventions in the commercial policy and pricing of the Non-Life business focusing on the Motor and Fire branches. Take steps to improve the functionality of the Company in relation to the Supervisory Authority s requirements as well as to the improvement of information - technology systems. In Life sector, after the discontinuance of health guaranteed renewable programs in and the replacement of them with new annually renewable programs, the Company is planning to launch two additional Health programs in order to meet the customer needs. Further control in the cost of claims and the introduction of incentives for the reduction of lapses and surrenders of the Life and Health insurance contracts. AGROTIKI INSURANCE S.A.

7 1. MANAGEMENT REPORT BY THE BOARD OF DIRECTORS The redesign of pension and investment programs with primary concern, the profitability of each new program. Moreover, following Piraeus Bank decision, the Company is undergoing a selling process. The final outcome would affect Company s plans. D. Comments on Equity The Equity of the Company as at meets the requirements set by Law 2190/1920 while at the same time the Company, fully covers the solvency rules (A.S.M.) and guarantee funds set by the supervisory authority. E. Main risks and uncertainties The Company has been active in the insurance market for over 30 years, offering services in all private insurance sectors. During the year 2014, it is expected to continue the difficult and demanding course for the insurance companies, since most of them are affected by the ongoing economic recession and the increased regulatory adjustments in their business and organizational operations, under the supervision and guidance of the regulatory authority. The Company s aim for the 2014 fiscal year is to sustain the reduction in income from insurance operations while maintaining operational profitability. The Company, though, by nature, is exposed to financial risks from fluctuations in the prices of investment products. Investment revenues are to a great extend affected by factors that cannot be influenced, as they are connected with the progress of the country s financial and the international capital market developments. The progress of the money markets during the 2014 fiscal year will have a significant impact on the Company s investment revenue, as well as its Equity, as a large part of the portfolio has been invested in new government bonds that came from the Greek government bond swap. The overall composition of the portfolio is presented in detail in the notes on the Financial Statements. The Company is also significantly exposed to other risks, such as liquidity, guarantees and insurance risk, which, however, are confronted effectively in the manner described in the explanatory notes of the annual financial statements for December 31, Consequently, the management of the aforementioned risks is not expected to have a significant impact on the 2014 fiscal year. AGROTIKI INSURANCE S.A. 7

8 ANNUAL FINANCIAL REPORT 2013 F. Transactions with associated companies The Company s transactions with associated companies during the current fiscal year are as follows: INTER TRANSACTIONS WITH ASSOCIATED COMPANIES (amounts in 000) DESCRIPTION RECEIVABLES LIABILITIES INCOME EXPENSES Α Piraeus Bank (1.060) Β C Other companies of Piraeus Bank ATE Insurance Consolidated Companies 94 (4.761) (6.465) ATE Insurance Consolidated Companies ΑΤΕ Insurance Romania S.A (10) TOTAL (4.761) (7.535) The Company s receivables from Piraeus Bank mainly refer to balances from bank Accounts and time term deposits, since the receivables from the other companies refer to uncollected receivables from insurance policies. The receivables from ATE Insurance Romania refer to the amount of share capital decrease as of December 2013 which was deposited in January The Company s Income mentioned in the table above derives from the sale of insurance policies to other intra-group companies, while the Expenses and Liabilities derive from support and promotional services offered by the intra-group companies. An exception to this is the income earned by ATE Insurance Romania SA, which derives from reinsurance premiums. All transactions between related parties and Piraeus Bank or other companies are conducted within the context of usual business activities and follow the conditions and terms of the market. Transactions with BoD members and management executives from the beginning of the accounting period are outlined below: (amounts in 000) DESCRIPTION Remuneration for executives and members of Management Receivables from executives and members of Management 01/01-31/12/ /01-31/12/ /01-31/12/ /01-31/12/ The aforementioned remuneration for executives and members of the management pertains to salaries paid to Board members and high-ranking Company executives. The nature of the transactions with related parties does not differ compared to the previous fiscal year. 8 AGROTIKI INSURANCE S.A.

9 1. MANAGEMENT REPORT BY THE BOARD OF DIRECTORS G. Events after the end of the reporting period There are no events subsequent to the Company s current Financial Statements which could have a significant impact on the annual financial statements of the Company and the consolidated companies. NEA SMYRNI, FOR THE BOARD OF DIRECTORS THE MANAGING DIRECTOR IORDANIS CHADJIOSSIF AGROTIKI INSURANCE S.A. 9

10 AUDIT REPORT BY INDEPENDENT 2. CERTIFIED AUDITOR To the Shareholders of ATE Insurance Report on the Separate and Consolidated Financial Statements We have audited the accompanying separate and consolidated financial statements of ATE Insurance and its subsidiaries which comprise the separate and consolidated statement of financial position as of 31 December 2013 and the separate and consolidated statement of comprehensive income, statement of changes in equity and cash flow statement for the year then ended and a summary of significant accounting policies and other explanatory information. Management s Responsibility for the Separate and Consolidated Financial Statements 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. Auditor s Responsibility 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. 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. 10 AGROTIKI INSURANCE S.A.

11 2. AUDIT REPORT BY INDEPENDENT CERTIFIED AUDITOR Opinion In our opinion, the separate and consolidated financial statements present fairly, in all material respects, the financial position of the ATE Insurance and its subsidiaries as at December 31, 2013, and their financial performance and cash flows for the year then ended in accordance with International Financial Reporting Standards, as adopted by the European Union. Reference on Other Legal and Regulatory Matters We verified the conformity and consistency of the information given in the Board of Directors report with the accompanying separate and consolidated financial statements in accordance with the requirements of articles 43a, 108 and 37 of Codified Law 2190/1920. PricewaterhouseCoopers S.A. Athens, 16 April 2014 THE CERTIFIED AUDITOR - ACCOUNTANT 268 Kifissias Avenue Halandri Dimitrios Sourmbis SOEL Reg. No SOEL Reg No AGROTIKI INSURANCE S.A. 11

12

13 AGROTIKI INSURANCE S.A. SEPARATE AND CONSOLIDATED FINANCIAL STATEMENTS ON DECEMBER 31, 2013 In accordance with the International Financial Reporting Standards (IFRS) The attached Separate and Consolidated Financial Statements were approved by the Board of Directors of Agrotiki Insurance S.A. on April 15, 2014 and are available on the website SYGGROU AVENUE , NEA SMYRNI - GREECE Tel.: REGISTRATION NUMBER OF INCORPORATED COMPANIES.:12821/05/Β/86/1

14 3. ANNUAL FINANCIAL STATEMENTS SEPARATE AND CONSOLIDATED BALANCE SHEET (amounts in 000) ASSETS NOTES 31/12/13 31/12/12* 31/12/13 31/12/12* Tangible fixed assets Investement property Intangible assets Investments in associated companies Investment securities held to maturity Investment securities available for sale Financial assets in fair value through results Investments on behalf of policyholders (Unit Linked) Receivables from loans Receivables from premiums Receivables from reinsurers Commissions and other deferred production costs Other assets Deferred tax receivables Cash and cash equivalents Total Assets LIABILITIES Mathematical life insurance provisions Insurance provisions for outstanding claims Provisions on unearned premiums Liabilities from investment insurance policies Other insurance provisions Total Insurance Provisions Retirement benefit liabilities Liabilities to reinsurers Other liabilities Other provisions Current tax liabilities Total Liabilities EQUITY Share capital Share premiums Other reserves Results carried forward ( ) ( ) ( ) ( ) Total ( ) ( ) Minority interest Total Equity ( ) ( ) Total Liabilities and Equity THE CHAIRMAN THE MANAGING DIRECTOR THE CHIEF FINANCIAL OFFICER THE CHIEF ACCOUNTANT THE ACTUARY SPYRIDON PAPASPYROU IORDANIS CHADJIOSSIF EVANGELOS ARCHONTOULIS ANTONIOS GOGONIS GEORGIOS KRAVVARITIS 14 *Adjusted amounts due to the amended IAS 19 "Employee Benefits" (see note 47) AGROTIKI INSURANCE S.A.

15 3. ANNUAL FINANCIAL STATEMENTS SEPARATE AND CONSOLIDATED COMPREHENSIVE INCOME STATEMENT (amounts in 000) NOTES 01/01/13 31/12/13 01/01/12 31/12/12* 01/01/13 31/12/13 01/01/12 31/12/12* Gross written premiums and related income Less: Ceded premiums (30.255) (29.878) (30.045) (29.682) Net written premiums and related income Commissions paid 6 (22.634) (20.370) (22.674) (20.423) Claims paid to policyholders (Retention) 7 (95.517) ( ) (95.372) ( ) Change of insurance provisions Insurance Operation Result Net interest income Net fee and commission income Profit from investment sales Profit from investment valuation (Loss) from property valuation 13 (7.461) (7.565) (7.461) (7.565) Dividend income Total Investment Income Other operating income Administrative expenses 16 (48.033) (33.149) (47.415) (32.530) Profit before taxes Income tax (5.397) (5.394) Profit after taxes Parent company shareholders Minority interest (1) Other total income Amounts tranferred to results Profit from valuation of securities available for sale and securities held to maturity Foreign exchange differences (14) (217) Amounts not trasferred to results Actuarial Net Profit net from taxes Other comprehensive income after taxes Total comprehensive income after taxes Parent company shareholders Minority interest (1) 1 Profit after taxes per share Basic (in ) 18 1,4154 0,9714 1,4231 0,9691 The Notes mentioned on pages 19 through to 85 form an integral of the Financial Statements. * Adjusted amounts due to the amended IAS 19 "Employee Benefits" (see note 47) AGROTIKI INSURANCE S.A. 15

16 ANNUAL FINANCIAL REPORT 2013 SEPARATE AND CONSOLIDATED CHANGES IN EQUITY STATEMENT (amounts in 000) SHARE CAPITAL SHARE PREMIUMS RESERVES ACCUMULATED PROFIT/ (LOSS) MINORITY INTEREST TOTAL EQUITY Balance as of January 1, ( ) 36 ( ) Effect of amended IAS (140) - (140) Balance as of January 1, 2012 (Restated) ( ) 36 ( ) Profit for period 1/1/ /12/ Profit from the valuation / sale of available for sale securities Actuarial Profits Other transfers to reserves - - (11.057) Changes in minority interest (1) (1) Foreign exchange differences - - (217) - - (217) Balance as of December 31, ( ) 35 ( ) Balance as of January 1, ( ) 35 ( ) Profit for period 1/1/ /12/ Profit from the valuation / sale of available for sale securities Share Capital Increase Changes in minority interest (13) (13) Actuarial Profits Foreign exchange differences - - (14) - - (14) Balance as of December 31, ( ) The Notes mentioned on pages 19 through to 85 form an integral of the Financial Statements. 16 AGROTIKI INSURANCE S.A.

17 3. ANNUAL FINANCIAL STATEMENTS SHARE CAPITAL SHARE PREMIUMS RESERVES ACCUMULATED PROFIT (LOSS) TOTAL EQUITY Balance as of January 1, ( ) ( ) Effect of amended IAS (140) (140) Balance as of January 2012 (Restated) ( ) ( ) Profit for period 1/1/ /12/ Profit from the valuation / sale of available for sale securities Actuarial Profits Other transfers to reserves - - (11.057) Balance as of December 31, ( ) ( ) Balance as of January 1, ( ) ( ) Profit for period 1/1/ /12/ Profit from the valuation / sale of available for sale and held to maturity securities Share Capital Increase Actuarial Profits Balance as of December 31, ( ) The Notes mentioned on pages 19 through to 85 form an integral of the Financial Statements. AGROTIKI INSURANCE S.A. 17

18 ANNUAL FINANCIAL REPORT 2013 SEPARATE AND CONSOLIDATED CASH FLOW STATEMENT (amounts in 000) NOTES Profit before taxes Plus / minus adjustments for: Depreciations Results from investment activity Interest and related income 9 (9.568) (8.672) (9.836) (7.659) Interest and related expenses Plus / minus adjustments for changes in operating capital accounts or accounts concerning operating activities: (Increase) / Decrease of receivables (8.456) (8.456) Increase / (Decrease) of liabilities (minus liabilities to banks) (452) Increase / (Decrease) of insurance provisions (55.381) (43.110) (55.321) (43.134) (Decrease) / Increase of Unit Linked - (1.619) - (1.619) Sales / (Purchase) of investment securities (shares, securities) Interest revenue Dividends received Minus: Interest and related expenses paid (8.927) (3.832) (8.927) (3.829) Total cash inflow / outflow from operating activities (17.010) (17.032) Investment Activities Purchase of tangible fixed assets (442) 532 (415) 490 Total cash inflow / outflow from investment activities (442) 532 (415) 490 Financial Activities Collection of loans and advances Collection of share capital increase Net cash inflow / outflow from financial activities Net increase / (decrease) in cash and cash equivalents for the period (16.347) (16.411) Foreign exchange differences on cash and cash equivalents (14) (217) - - Cash and cash equivalents at the beginning of period Cash and cash equivalents at the end of period The Notes mentioned on pages 19 through to 85 form an integral of the Financial Statements. 18 AGROTIKI INSURANCE S.A.

19 3. ANNUAL FINANCIAL STATEMENTS 1. GENERAL INFORMATION AGROTIKI INSURANCE S.A. (the Company ) was established in 1980 as AGROTIKI GREEK GENERAL INSURANCE S.A., trading as AGROTIKI INSURANCE. The change in corporate name from AGROTIKI GREEK GENERAL INSURANCE S.A. TO AGROTIKI INSURANCE S.A. was decided on December 20, 2002, by the Extraordinary General Shareholder Meeting, which approved the merger by absorption of the company AGROTIKI LIFE & HEALTH INSURANCE S.A. by AGROTIKI GREEK GENERAL INSURANCE S.A. The company resulting from the merger by absorption of AGROTIKI LIFE & HEALTH INSURANCE S.A. by AGROTIKI GENERAL INSURANCE S.A. has its registered offices in Nea Smyrni, at 173 Syggrou Avenue, Tel , and is registered in the Companies Register with the number 12821/05/B/86/1. The Company s initial operating period has been set at 100 years. Since August 5, 2005, the Company has been using the name ATE Insurance as a logo. On December 31, 2013, the composition of the Board of Directors was as follows: Chairman: S. Papaspyrou Vice Chairman Α : T. Lyssimachou Vice Chairman Β : K. Filippou CEO: I. Chadjiossif Members: P. Alexakis, I. Rokas, S. Koliatsas On March 24, 2014, the BoD was convened, and in replacement of the resigned member and B Vice- Chairman Mr. Konstantinos Filippou, elected Mr. Stefanos Psarrakis as a new member. (Minutes: Board 558/ ). The term of the BoD ends in principle on September 27, The aim of the Company, pursuant to Article 4 of its articles of association, is: a) To engage, on its behalf or on behalf of third parties, in life and non-life insurance activities (insurance and reinsurance) in Greece and abroad, in all risks cited and identified in Article 13 of Law 400/1970. b) To represent any Greek or foreign insurance or reinsurance company. c) To establish other insurance or reinsurance companies in Greece or abroad, regardless of legal form. d) To establish an Insurance Studies & Training Institution. e) To engage in activities related to the above, in Greece or abroad. f) To establish companies in Greece or abroad dealing with financial services or other companies, regardless of activity or legal form, and participate in similar companies even if their scope is not insurance activities, where this is permitted by current or future legislation. g) To engage in any other related activity or not, provided it is not prohibited by the legislation in force. All the aforementioned activities may be carried out in partnership with third parties in Greece or abroad. The Company is active in all contemporary insurance branches, providing innovative and specialized policies, which provide comprehensive insurance coverage both at individual and corporate level. AGROTIKI INSURANCE S.A. 19

20 ANNUAL FINANCIAL REPORT 2013 The Separate and Consolidated Financial Statement for the period ended on December 31, 2013 is composed of the company s and subsidiaries separate financial statements, as mentioned in Note 2.1. The Company s Financial Statements are available on the internet, at This Financial Statement was approved by the Board of Directors for publication on April 15, SHAREHOLDERS The main Company shareholders on December 31, 2013 and December are listed below: 2013 SHAREHOLDERS NO OF SHARES HOLDING % PIRAEUS BANK S.A ,00% Total ,00% 2012 SHAREHOLDERS NO OF SHARES HOLDING % PIRAEUS BANK S.A ,00% Total ,00% According to the BoD s decision No 547/ concerning the increase of Share Capital, were issued new shares with a nominal value of 1,5 each. Regular Auditors The auditing of the Company s Separate and Consolidated Financial Statements for the 2013 fiscal year was conducted by: PricewaterhouseCoopers Auditing Company S.A. 268 Kifisias Avenue, Chalandri. Tax Audits The Company has been audited by the tax authorities up to the 2007 fiscal year. Consequently, the open (unaudited) fiscal years pertain to the years 2008, 2009 and The regular tax audits for the 2008 and 2009 fiscal years are underway, but have not been completed yet. The Company will be audited by the auditing company PwC for the 2013 fiscal year and a relevant mention is made in Note 17. Open Tax Audits for subsidiaries The open tax audits for subsidiary ATE INSURANCE ROMANIA S.A. pertain to the fiscal years 2007 to AGROTIKI INSURANCE S.A.

21 3. ANNUAL FINANCIAL STATEMENTS Other At the end of the current period, the number of employees was 191 for the Company (2012: 260) and 207 for the Group (2012: 276). The Company s financial statements are included in the consolidated financial statements of the PIRAEUS BANK S.A. Group, which is registered in Greece and has a direct holding of 100,00% in AGROTIKI INSURANCE S.A. 2. MAIN ACCOUNTING PRINCIPLES 2.1 Presentation of Financial Statements The Company s financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) as well as the Interpretations issued by the IFRS Interpretations Committee (IFRIC), as adopted by the European Union and in force on December 31, The preparation of financial statements in accordance with the IFRS requires calculating estimates and adopting concessions, which may affect the accounting balances of assets and liabilities, the required disclosures for contingent assets and liabilities on the date of preparation of the financial statements, as well as the amounts of income and expenses identified during the fiscal year. The use of available disclosure and the application of subjective judgment form an integral part of the estimates procedure. The actual future results may vary from the aforementioned estimates, while the deviations may have a significant impact on the financial statements. These estimates and concessions are mentioned in Note The Consolidated Annual Financial Statements include the financial statements of the Company (AGROTIKI INSURANCE S.A.) and the company ATE INSURANCE ROMANIA S.A. (full consolidation method). The consolidation of the aforementioned companies is represented with the indication "Group", while the indication "Company" refers to the Parent Company "AGROTIKI INSURANCE S.A.". The Financial Statements have been compiled based on the historical cost principle, with the exception of securities available for sale, financial assets at fair value through results, investments on behalf of policyholders, investments in property and owner-occupied properties valued at fair value. The amounts in the Financial Statements are provided in thousands of Euros, unless stated otherwise. 2.2 Transactions in foreign currency ΤThe Group and Parent Company use the Euro ( ) as their transaction currency. Subsidiary ATE INSURANCE ROMANIA S.A. uses the Romanian leu (RON). All transactions in foreign currency are converted into the transaction currency, according to the exchange rates in effect on the date of each transaction. Foreign exchange earnings and losses resulting from the settlement of such transactions and from AGROTIKI INSURANCE S.A. 21

22 ANNUAL FINANCIAL REPORT the conversion of monetary assets and liabilities denominated in foreign currencies are identified in the Comprehensive Income Statement. Exchange rate differences arising from the conversion of debt securities and other monetary financial assets revaluated at fair value are included in the Comprehensive Income Statement. Exchange rate differences from the conversion of non-monetary financial assets are a component of the change on their fair value. Depending on the classification of a non-monetary financial asset, exchange rate differences are either identified in the Comprehensive Income Statement or in Shareholders Equity, in the event that the non monetary financial assets have been classified as available for sale securities. When preparing the financial statements, the assets and liabilities of foreign entities are converted into euros at the exchange rates in effect at the balance sheet date, while income and expenses are converted at average rates for the period. Differences arising from the use of exchange rates on the closing date of the Financial Position and average exchange rates of the period and from revaluating a foreign entity s opening equity at closing rate are recorded directly in the Foreign currency exchange rate differences reserve in Shareholders Equity. 2.3 Consolidated accounts Subsidiaries Subsidiaries are the companies in which the Parent Company directly or indirectly has an interest of more than one half of the voting rights or otherwise has power to exercise control over their financial and operating policies. The subsidiary ATE INSURANCE ROMANIA S.A. has been consolidated with the full consolidation method. All intercompany transactions, balances and unrealized earnings and losses on transactions between Group companies are eliminated on consolidation. Wherever necessary, accounting policies for subsidiaries have been modified, in order to ensure consistency with the policies adopted by the Parent Company. 2.4 Investments in Financial Assets The Group classifies its investments in financial assets as Investments at Fair Value through Results, Held to Maturity or Available for sale. Investments on behalf of policyholders are essentially handled in the same manner as the Investments at market value through results. The decision for the classification of the investments is made upon acquisition. Initially, all investments are classified according to the transaction date and are valued at acquisition cost, which is the fair value of the amount paid, including investment-related sales expenses, provided that the investments are available for sale or held to maturity. The investment expenses at fair value through results are not capitalized, but are recorded directly in the income statement. Investments at Fair Value through Results: these investments are acquired aiming at short-term profit and include securities such as shares, bonds and mutual funds. After their initial recognition, the investments AGROTIKI INSURANCE S.A.

23 3. ANNUAL FINANCIAL STATEMENTS classified in this category are valued at fair value. The earnings or losses arising from this valuation are recorded in the Income Statement. Investments Held to Maturity: these are investments with a fixed maturity date and fixed or determinable payments, which the Group has the positive intention and ability to hold to maturity. Investments held to maturity are measured at amortized cost. Investments Available for sale: these are investments which might be held to maturity or be sold in order to cover liquidation needs or achieve earnings from any foreign currency or interest rate fluctuations. After initial recognition, the investments classified as available for sale are recorded at fair value. The earnings or losses arising from the valuation of the investments available for sale are recorded in a separate equity account until any sale, receivables or provision of impairment, and then are transferred to the income statement. Derivative Financial Products: Derivative products are used for hedging and are valued at market value. The Company uses derivative products listed in the Athens Derivatives Exchange and in foreign financial markets. The only derivative that the Company owns, dated on December 31, 2013 resulted from the exchange of Greek bonds (PSI) and is not used for hedging (See note 25). The Group does not follow hedge accounting (Ηedging Αccounting). Investments on behalf of Policyholders: they belong in the Investments at fair value through results category and pertain to investments both in share or bond assets or even cash available, valued at market value, just like the corresponding liabilities to policyholders. The income and expenses arising from the valuation of these assets are reconciled with those of the liabilities, so as to charge the results in the net result concerning the Group s commission. Fair Value Calculation Investments traded in organized financial markets are valued at fair value, which is determined according to the current market capitalization value on the closing date of the financial statements. Investments in unlisted securities are valued according to acquisition cost minus any amortization. All regular purchase and sale transactions of investments in financial assets are recorded on the trade date, which corresponds to the date on which the Group has agreed to acquire or sell the financial asset. The term regular purchase and sale transactions of financial assets requires that the financial asset is handed over within a fixed period, instituted by legislature or established by the usual market practices. 2.5 Tangible assets Tangible assets are used by the Group itself, either for operating activities or administrative purposes. Tangible assets include land, buildings, lease hold improvements, furniture and other equipment, as well as transportation vehicles. As of December 31, 2008, the Group changed its accounting practice and records all tangible assets at fair value minus subsequent depreciation. Under the new established policy, the Group will re-evaluate its land and buildings at fair value every three years, unless there is serious indication of impairment in the meantime. Every increase in market value arising from the valuation of tangible assets is transferred to the Group s equity, crediting the valuation reserve. Every decrease in market value, which AGROTIKI INSURANCE S.A. 23

24 ANNUAL FINANCIAL REPORT 2013 offsets the previous increases for the same asset, is transferred to the Group s equity, debiting the valuation reserve. Any other decrease in market value is recorded directly as a loss in the Income Statement. The Company has assessed the current value on December 31, 2013, as mentioned in note 19. Depreciations: Land is not depreciated. The rest of the tangible assets are depreciated on a straight line basis over their useful life, which is re-examined annually. The useful life of tangible assets per category is as follows: Buildings Other assets: Furniture and other equipment Transportation vehicles years 5 8 years 7 9 years Improvements to third party property are exempted and are depreciated within the minimum time period between the useful life improvement and the lease duration of the leased asset. All other assets are recorded at historical acquisition cost less any depreciation or impairment. Subsequent costs enhance the value of the fixed asset or recognize it as a separate asset, only when it is likely to result in future economic benefits and their cost may be measured reliably. Repair and maintenance costs are charged to the income statement on the date they were incurred. 2.6 Investments in property Investments in property include land and buildings owned by the Company for leasing or for acquiring capital gains and are classified as investment property. Investment property is initially recorded at acquisition value, which also includes acquisition costs. Starting from the year that ended on December 31, 2008, and following the change of the relevant policy, investment property is valued annually at fair value. After the initial registration of investment property, it is valued annually at fair value, as determined by independent valuers. The changes are recorded in the results. The assets are recognized until their sale or earlier, on the date the Company ceases to have future financial benefits from the asset. Any change of use, such as private use of the asset, causes the transfer of said asset to the category of tangible assets. The earnings or losses arising are recorded in the income statement. 2.7 Intangible assets Intangible assets mainly include software programs. The software acquired separately is capitalized at acquisition value. Subsequently it is measured at acquisition value less accumulated depreciation and impairment. Computer software is depreciated over 5 years. The Company s management examines the value of intangible assets annually to determine any impairment or whether their estimated useful life has changed. When the book value of an intangible asset exceeds its recoverable amount, an appropriate provision for impairment is made with an equal charge on the results. 24 AGROTIKI INSURANCE S.A.

25 3. ANNUAL FINANCIAL STATEMENTS 2.8 Cash and cash equivalents Cash and cash equivalents consist of the Company s monetary assets with less than 3 months maturity from the acquisition date. 2.9 Receivables Receivables are recorded in the Balance Sheet, net of provisions for doubtful debts. The collectability of receivables is assessed when the company considers it important. The assessment is based on the economic situation, the debtor s repayment history, the probability of support by reputable credit-worthy guarantors and the realizable value of collateral. The receivables which are not considered important as well as those which are, but without any impairment indications are classified into groups with similar credit risk characteristics. The Company examines the possible impairment provision for every category. In assessing each category, the amount of monitored debts or doubtful debts, the time period the receivables are in arrears, their collectability once considered doubtful, the prevailing market conditions and past experience with regard to the amount of expected losses are considered. When a receivable is described as doubtful, its book value is reduced to its estimated recoverable value, which is defined as the market value of expected future cash inflows, including estimated amounts recoverable from guarantees and tangible collateral, discounted at the real market interest rate. Subsequent changes to the recoverable amounts and the time period within which they are expected to be collected are compared with previous estimates and, in the event of a difference in the established provision, an equivalent charge is recorded in the income statement. Receivables and other loans, when they can no longer be recovered, are deleted by debiting the account of established provisions for doubtful debts. The Company accepts postdated checks from customers and associates for processing receivables from premiums. Nevertheless, the Company s standing policy is to reduce receivables from premiums and pay commissions only after the amount on said checks has been collected Leases The Company as a lessee: Operating leases The Company only participates in operating leases, where the lessor retains a significant portion of the risks and benefits deriving from the leased assets. The costs of operating leases are recorded in the income statement, using the standard method throughout the lease term. AGROTIKI INSURANCE S.A. 25

26 ANNUAL FINANCIAL REPORT 2013 The Company as a lessor: Operating leases The Company participates in operating leases only when the leased assets are recorded in the Company s financial statements and are depreciated based on their useful life. Revenues from leases are recorded in the income statement using the accrual method Offsetting Receivables Liabilities Offsetting financial assets with liabilities and recording the net amount in the Financial Statements is permitted only when there is a legal right to offset the registered amounts and there is intention of either settling the net amount arising from offsetting or simultaneously settling the total amount of both the financial asset and the liability Interest income and expenses For all financial instruments, Interest income and expenses are recorded in the income statement using the effective interest rate method. The effective interest rate method calculates the non-depreciated value of the asset or liability and distributes the interest income or expenses throughout the reporting period. Effective interest rate is the rate which accurately discounts the estimated future payments or receivables throughout the expected duration of the financial instrument. Once a financial asset or group of similar financial assets are undervalued as a result of impairment, interest income is recognized by applying the interest rate used to discount future cash flows for the purpose of measuring the impairment loss Commissions and related income Commissions and related income are recorded in the income statement in the fiscal year during which the relevant services where provided. Commissions and related income deriving from third party transactions are recognized in the results at completion of the transaction. Fees for portfolio management and consulting services are recorded in the results according to the services provision contract, using the accrual method Income tax Income tax is calculated over the fiscal year profit, pursuant to the tax legislation in force and is recognized as an expense in the income statement. Tax losses carried forward to future fiscal years for offsetting are recognized as assets when it seems possible that there will be a realization of future taxable profits, which will be sufficient to offset the accumulated tax losses. Deferred income tax is calculated using the Balance Sheet method, based on temporary differences arising between the book value of assets and liabilities in the Financial Statements and tax value attributed to them in accordance with the tax legislation in force. AGROTIKI INSURANCE S.A.

27 3. ANNUAL FINANCIAL STATEMENTS To calculate the deferred income tax, the Company uses the legislated tax rates expected to come in force in the period over which it is estimated that the liability or debt will be settled, on a later date than the financial statement closing date. Any changes in tax rates after the closing date of the financial statements are not taken into consideration for calculating the deferred tax. Current and deferred tax is either recorded in the income statement or directly in equity if it relates to items recognized directly in equity Employee Benefits Retirement Liabilities The Company s obligation for employee benefits from defined benefit plans is only limited to the program addressed by Law 2112/1920, which refers to the compensation paid to all employees upon retirement. In a program of defined contributions, the Company is obligated to pay the set levies to the insurance funds. A defined benefit plan is essentially a pension plan in which the Company s liability depends on the amount of compensation the employees will receive upon retirement, based on their age, years of employment at the Company and salary. The liability is recorded in the Balance Sheet regarding defined contribution plans, and comprises the market value of the benefit on the date the financial statements are compiled, minus the fair value of the plan s assets, including any adjustments for unrecognized actuarial earnings/losses, the cost of services rendered and past service cost. The liability for defined contribution plans is calculated annually by an independent actuary, using the projected unit credit method. The market value of the liability arising from the defined contribution plan is calculated by the estimated future cash outflows, using interest rates of securities with high credit rating, which have a maturity matching that of the related liability. Possible actuarial earnings or losses arising from readjustment, based on experience, as well as from changes in accounting methods are credited or debited accordingly in the income statement, in accordance with the remaining average employment life. The Company follows the Margin Method of IAS 19, whereby actuarial earnings or losses arising from adjustments based on historical data or a change in actuarial assumptions and are in excess of the amount of the accumulated liability are amortized as described above. The Group from January 1, 2013 adopted the revised IAS 19, according to which the approach with Margin Method, repealed and actuarial profit or losses recognized directly in Equity (see note 36). Termination payout Termination payout is paid whenever an employee leaves the Company before retirement or whenever an employee accepts to depart voluntarily in exchange for such benefits. The Company pays these benefits when it undertakes to do so, either when it terminates to employ individuals that are working in the Company, based on a detailed plan that there is no possibility of it being withdrawn, or when it offers these benefits are an incentive for voluntary retirement. After 12 months from the balance sheet date, the payouts are discounted at market value. AGROTIKI INSURANCE S.A. 27

28 ANNUAL FINANCIAL REPORT Termination of financial asset representation in financial statements A financial asset is not represented in the financial statements of the Company from the moment the Company ceases to control the contractual rights deriving from the financial asset. The control over the financial asset ceases to exist either in the event of sale or when related cash inflows are transferred to an independent third party Statement per activity segment Statement per activity segment is the primary reporting format. The business segment is a group of assets and operations engaged in providing services which are subject to similar risks and returns, and differ from other Group business segments. The geographical activity segment is the secondary reporting format, given that the Company is mainly active in Greece. The geographical segment provides information on the Company s activities in a particular economic environment subject to risks and returns that vary from corresponding risks and returns of other business and geographical segments. The Company s operations are monitored in two key areas: Life insurance and Non-Life insurance, which is divided into Motor Third Party Liability and Other Non-Life risks. The breakdown by business segment is depicted in Note Share Capital Common shares are included in Equity. The mandatory redeemable preferred shares are included in Liabilities. Direct expenses for the issuance of shares appear after deduction of the relevant income tax, as a reduction in the proceeds. Direct expenses incurred for the issuing of new shares for business acquisition are included in the acquisition cost of the acquired business Own Shares The Company s own shares held by the Company itself are recorded at their acquisition cost and are deducted from Company s Equity until nullified. In the case of sale or reissuance of own shares, the price received will not be included in the income statement; instead it will be directly charged to Equity. The Company did not possess own shares on December 31, Insurance Contracts As already mentioned, the Company adopted IFRS 4 as of January 1, 2004, at which time the contracts were classified into Insurance and Investment contracts and the adequacy of insurance provisions was evaluated. In applying the provisions of IFRS 4, the Company conducted a separation of contracts into Insurance contracts and Financial contracts. In the cases where an insurance contract contains both insurance and financial risks, as in the case with Unit Linked contracts, the Company has not separated their financial risk. AGROTIKI INSURANCE S.A.

29 3. ANNUAL FINANCIAL STATEMENTS Α) Insurance Contracts Insurance contracts are defined as those contracts in which a significant insurance risk is transferred from the policyholder to the insurance Company, resulting in the Company s acceptance to compensate the insured party in case of a defined future event that will negatively affect the insured party. The insurance risk is significant only when an insured event could force the insurance company to pay significant additional benefits. The additional benefits refer to amounts exceeding those that would have been paid if the insured risk had not occurred. A contract that exposes the insurance company to financial risk without significant insurance risk is not an insurance contract. Some contracts expose the Insurance Company to financial risk in addition to significant insurance risk. The insurance contracts are classified into two categories depending on the nature of the insured risk. 1. Life insurance contracts Life insurance contracts mainly insure events over a long period of time. The relevant premiums are recognized as revenue when they become payable by the policyholder. Premiums are recorded without reduction due to corresponding commissions. 1.1 Traditional contracts This category includes contracts issued by the Company to cover the risk of death, whole life benefits, pensions, disability, accident and illness for both individuals and groups Life Insurance Contracts with discretionary participation features in profits The bulk of traditional life insurance contracts incorporate discretionary participation features (DPF) as the policyholder is given additional benefits on top of those guaranteed by the contract at the discretion of the Company, in conjunction with the terms of any contract and the Company s investment performance relating to life insurance estimates Life Insurance Contracts without discretionary participation features in profits There are Life Insurance Contracts without discretionary participation features in profits, but their amount is not considered significant in relation to the total amount of all contracts. 1.2 Life Insurance contracts where the insured parties bear the financial risk (Unit Linked) The financial contracts transfer the financial risk to the policyholder. These contracts transfer financial risk to the policyholders, while at the same time the insurance company assumes part of the financial risk by providing a partial guaranteed return. They also contain significant insurance risk (death cover, disability, accident and illness). The part of the contracts covering these risks is recognized as the insurance contract. The part of the Unit Linked contract whereby the fair value of liability is determined by the unit net market value which represents the per unit fair value of the assets linked to the liability, multiplied by the number of units that are attributed to the policy holder on the date of the compilation of the Balance Sheet, is recognized as a Financial Contract. AGROTIKI INSURANCE S.A. 29

30 ANNUAL FINANCIAL REPORT Non-life Insurance Contracts 2.1 Non-Life Insurance Contracts Motor Third Party Liability This category includes policies issued by the Company to cover motor third party liability. 2.2 Non-Life Insurance Contracts Other Risks This category includes policies covering the risk of fire, earthquake, vehicles, theft, transportation, general public liability, aid, craft, crews and others. No embedded derivatives are included in these contracts. Life insurance contracts are recognized as revenue (written premiums), depending on the duration of the insurance policy. On the date of the financial statements, the premium corresponding to subsequent years for the period from the closing of the financial statements until the end of the fiscal year, and which has been recorded in the premiums, is included in the unearned premium reserve. The premiums are recorded before the deduction of the corresponding commissions. Β) Financial Contracts 1. Deposit Αdministration Funds It is group insurance, whereby it is agreed that a defined benefit will be paid when insured parties leave their employment for any reason, or upon reaching the age limit or retirement The administration fund aims at creating the capitals necessary for paying the defined benefits. The fund is credited with an annual interest rate between 3.00% and 5.00% and is debited with the administration expenses and the benefits The Company pays out the defined benefits provided there are adequate funds, and the contract is terminated when the defined benefits have been paid or the fund has been exhausted. At any given time, the Company guarantees the balance of the fund Life insurance contracts where the insured parties bear the financial risk (Unit Linked) After a relevant separation, the Company recognizes as a financial contract a part of the contract where the fair value of the liability is determined by the current net unit price, which reflects the fair value per unit of assets associated with the liability, multiplied by the total units assigned to the policyholder on the Balance Sheet date. These contracts are embedded with derivative products built on additional benefits held to maturity, while there are products for which there is an additional guarantee for a minimum return of 2.5% and 3% after ten years from the commencement of the contract Deferred Acquisition Costs (DAC) Commissions and other acquisition costs for both new and renewed contracts relating to subsequent fiscal years are recorded in the asset account "Commissions and other future acquisition costs" and are distributed proportionately to the fiscal years, depending on the duration of the insurance contracts. For long-term life insurance, the DACs are amortised based on the assumptions used to calculate the liability for future benefits of the contracts AGROTIKI INSURANCE S.A.

31 3. ANNUAL FINANCIAL STATEMENTS 2.22 Insurance provisions Insurance provisions are the insurance company s net contractual obligations that originate from the insurance contracts and are calculated in accordance with the legislation in force. The insurance provisions are analyzed in the following main categories: Mathematical Provisions: They include the life insurance and capitalization mathematical reserve and are the difference arising on the financial statement date between the market value of the cash liabilities that the insurance company has undertaken for every life insurance contract, including the discretionary participation profit reserve, and the net market value of premiums owed by the policyholder which are payable to the insurance company in the future. The difference is calculated using the actuarial methods in force. Unearned premiums provisions: They include the ratio of written premiums that relate to the future fiscal years, for the contracts that are in force on the reporting date. Unexpired risk reserve: It is the additional provision which is formed on the date the financial statements are compiled, when the unearned premium reserve is not considered sufficient to cover the forecasted claims and expenses of contracts in force on that date. Outstanding claims provisions: These are established on the reporting date of the financial statements for providing total cover of insurance risk liabilities that have been incurred before the balance sheet date, regardless of whether they have been reported or not, for which the relevant claims and related expenses have not been paid out or the exact amount has not been determined exactly or there is an uncertainty with regard to the extent of the insurance company s liability. It contains the portfolio-to-portfolio provision as well as the provisions that arise using statistical or accounting methods. The amount of the portfolio-toportfolio provision is calculated according to the available information on the reporting date, such as expert reports, medical reports and court rulings. Payable benefits: These are insurance benefits that are owed to the policyholders but have not been paid off on the reporting date, for various reasons. Provisions for life insurance contracts whereby the policyholder bears the financial risk: These are the provisions for covering liabilities undertaken by the insurance company that are connected to financial instruments within the context of life insurances, whose value or returns are determined in connection to investments, and for which the policyholder bears the financial risk. These provisions are related to insurance contracts that are directly attached to assets (Unit Linked), whereby, from the market value of these, earnings or losses arise during the valuation of the insurance company s Unit Linked Assets and have a direct impact on the amount of insurance provisions. In such cases, the insurance company adjusts the insurance provisions by the same amount as the unrealized earnings or losses on valuations, and the resulting difference in insurance provisions is transferred to the relevant income account. The estimate of the insurance provisions is performed on the date the financial statements are compiled, according to the principles and rules for each insurance risk. It should be noted that Law 400/1970 is used as the basis for calculating the insurance provisions, as amended to date, in accordance with IFRS 4 Insurance Contracts. The balance in insurance provisions (increase / decrease), compared to the previous estimate, is transferred to the income statement. As for the Company s portion of the insurance provision, the balance is transferred to the reinsurers, according to the reinsurance agreements. AGROTIKI INSURANCE S.A. 31

32 ANNUAL FINANCIAL REPORT 2013 The final Outstanding Claims Reserve (OCR) is calculated by the Appointed Actuary, based on the estimates for the final cost expected to arise in claims for insurance risks that have occurred until the date of calculation of the reserve (regardless of whether they were reported to the Company or not) and until the final and definitive settlement of said claims. The aforementioned estimated cost includes claims paid, as well as the direct and indirect settlement expenses. On each reporting date, a liabilities adequacy test is performed to ensure the adequacy, in accordance with IFRS 4, using current estimates of its future contractual cash flows, as well as the processing costs for its losses. Any inadequacy in the results of the liability adequacy test, according to the expected future cash flows, is immediately charged to the income statement Reinsurance contracts Part of the reserve attributable to the reinsurer of the Company is recognized in the asset account Receivables from reinsurers. All other Receivables and Liabilities to reinsurers mainly pertain to payable reinsurance premiums, as well as the proportion of the claims paid. The Company reviews whether the receivables from the reinsurers have been impaired at the financial statement date and, if this is the case, it reduces their book value and recognizes the impairment loss in the results Provisions Other provisions mainly pertain to court cases. Provisions are established when the following apply: 1) the Company has a legal or other liability as a result of past events, 2) it is more likely that a cash payment would be required to fulfill the obligation, 3) the amount of the payment has been calculated using a reliable method. The provisions are recognized at the market value of the future payment considered to be required to settle the liability. 32 AGROTIKI INSURANCE S.A.

33 3. ANNUAL FINANCIAL STATEMENTS RECLASSIFICATIONS RECLASSIFICATIONS DECEMBER 31, 2012 ADJUSTED AMOUNTS REPORTED AMOUNTS RECLASSIFICATION Financial assets available for sale Investments held to maturity Other assets (1.665) Other liabilities (11.121) Other provisions Current Tax Liabilities Net interest income Profits from valuation of investments (3.351) ADJUSTED AMOUNTS REPORTED AMOUNTS RECLASSIFICATION Financial assets available for sale Investments held to maturity Other assets (1.666) Other liabilities (11.088) Other provisions Current Tax Liabilities Net interest income Profits from valuation of investments (3.351) 2.25 Critical accounting estimates and judgments in applying accounting policies The Company makes estimates and assumptions that affect the reported amounts of assets and liabilities of the subsequent fiscal year. These estimates and assumptions are constantly evaluated, based on history and previous experience as well as other factors, including anticipated events which are considered to be reasonable under the circumstances. Insurance Contracts The Group continues to apply the same accounting policies for recognizing and valuing liabilities arising from insurance contracts (including acquisition costs and related intangible insurance assets) and reinsurance contracts held. The Management applied its own judgment in order to create a set of accounting policies for recognizing and valuing the liabilities and receivables from policies issued and reinsurance contracts held, in order to provide the most useful information to readers of the Group s Financial Statements. AGROTIKI INSURANCE S.A. 33

34 ANNUAL FINANCIAL REPORT 2013 The insurance contracts are valued in accordance with the parameters in effect at the time they were issued, the factors mentioned above, and the insurance legislation in force. The estimate of the final liability resulting from damages covered by insurance policies is the most important accounting estimate of the Company. There are many sources of uncertainty that need to be taken into account in calculating the final liability of the Company in such cases. Issues relating to the audits for liability adequacy of insurance policies as well as the sensitivity analysis of basic assumptions are outlined in paragraph 4. The Outstanding Claims Reserve is continuously evaluated and it is revised at the end of each fiscal year. A provision is made for the estimated final cost of all claims which have not been finalized, by deducting the amounts already paid, whether they relate to events that occurred during the fiscal year or in previous fiscal years, regardless of whether they have been reported to the Company or not. Insurance claims are recognized as liabilities when there is sufficient evidence of their existence and when their amount can be calculated. If an existence of a liability is known, but there is uncertainty regarding the final amount, a provision is made based on past experience in similar cases. Insurance claims may represent either a separate amount or a total liability on a category of activities or events. Fair Value of Financial Instruments The fair value of financial instruments is based on estimates. The Company determines the fair value of investments traded in organized markets based on their current financial value at the end of the reporting period, while for non-listed securities, it checks for impairment of acquisition cost. The hierarchy used by the Company for calculating fair value is mentioned in Note 25. Value Impairment of Financial Assets The Group verifies whether the equity securities available for sale have been impaired when their fair value is significantly or for an extended period of time lower than the acquisition cost. This verification requires the use of estimates. Among the factors taken into consideration in such estimates are the normal fluctuation of the share price, the financial health of the issuing company, the returns of the industry, technological changes and financing cash flows. On every financial statement date, the Group calculates whether there is objective evidence that an investment title or any group of them has undergone impairment. In the case of investment share titles that have been identified as available for sale, the substantial or prolonged reduction in the security s fair value below cost is used to assess whether these assets have been impaired. Significant reduction is considered a drop in the market value by at least 20% in relation to the cost and prolonged reduction is considered the event when the securities remain at a market value below the acquisition cost continuously for 24 months. In the case of bond titles identified as available for sale, the Group s policy, which is accordance with the Parent Group s policy, mentions that a reduction in fair value below the book value of the cost does not necessarily constitute a criterion for impairment. In this case, the substantial increase of contingency or an official announcement that the debtor will go bankrupt or will proceed with other financial restructuring constitute significant objective evidence of impairment. 34 AGROTIKI INSURANCE S.A.

35 3. ANNUAL FINANCIAL STATEMENTS If there is such proof for assets available for sale, the cumulative damage (which is measured as the difference between acquisition cost and current fair value) is transferred from equity to results. Impairment loss recorded in the results regarding share titles is not cancelled in the results. If at a subsequent x period the fair value of a security identified as Available for sale and pertaining to bonds is increased and the increase may objectively be correlated with an event that occurred after recording the impairment loss in the results, the impairment loss is cancelled from the results, or otherwise it is recorded in Equity. For financial assets in the categories Held to Maturity and Loans and Liabilities, which are valued at amortized cost, the amount of loss and the value impairment is calculated as the difference between their book value and the market value of expected future cash flows, discounted at the initial real interest rate of the financial asset. The aforementioned facts relating to portfolio are considered valid indications for impairment. Value Impairment of Receivables The Company establishes provisions for value impairment of receivables when there are reasonable indications that the total amount of receivables under the existing contracts will not be collected. On the reporting date, all bad and doubtful debts are revalued in order to determine the level of provision. No receivables are cancelled until all legal and practical measures for their collection have been exhausted. Income Tax The provision for income tax under IFRS 12 is calculated after estimating the taxes to be paid to the tax authorities in the current fiscal year and in subsequent periods, and includes the current income tax for each fiscal year and the provision for deferred taxes. The final statement of income tax may differ from the amounts that have been recorded in the Financial Statements New standards, amendments to standards and interpretations Specific new standards, amendments to standards and interpretations have been issued which are mandatory for accounting periods which commence during the current fiscal year or at a later date. The Group s assessment about the impact of implementation of these new standards, amendments and interpretations is set out below. Standards and Interpretations effective for the current financial year IAS 1 (Amendment) Presentation of financial statements This amendment requires that economic entities segregate the assets presented in the other comprehensive income into two groups based on whether it is likely in the future for them to be transferred to the income statement or not. IAS 19 (Amendment) Employee Benefits This amendment makes major changes to the recognition and measurement of the cost of defined benefit schemes and retirement schemes (abolition of the margin method) and to the disclosures for all employee AGROTIKI INSURANCE S.A. 35

36 ANNUAL FINANCIAL REPORT 2013 benefits. The main changes relate to recognition of actuarial profits and losses, recognition of the cost of past service / cuts, measurement of retirement pensions, the disclosures required, the handling of expenses and taxes relating to defined benefit schemes, and to the distinction between short-term and long-term benefits. IAS 12 (Amendment) Income Taxes The amendment to IAS 12 provides a practical method for measuring the deferred tax liabilities and deferred tax assets when property is measured using the fair value method in accordance with IAS 40 Investment Property. IFRS 13 Fair Value Measurement IFRS 13 provides new guidance on fair value measurements and the necessary disclosures. The requirements of the standard do not extend the use of fair values but provide clarifications about how they are to be applied in the case where their use is mandatory under other standards. IFRS 13 provides a precise definition of fair value and guidance about measurement of fair values and the necessary disclosures, irrespective of which standard requires the use of fair values. In addition, the necessary disclosures have been expanded and cover all assets and liabilities which are measured at fair value and not just financial assets and liabilities. IFRS 7 (Amendment) Financial instruments: Disclosures The IASB issued this amendment in order to include additional disclosures that will assist the readers of an economic entity s financial statements to assess the impact or possible impact that agreements for the settlement of financial assets and liabilities, including the offsetting right related to recognized financial assets and liabilities, will have on the financial position of an economic entity. Amendments of IASB to standards that constitute a part of the annual improvement project for the The following amendments describe the most important changes that enter to IFRS due to the results of the annual improvements project of IASB published on May IAS 1 Presentation of financial statements This amendment provides clarifications depending the required disclosures for the comparative information when for an economical entity, prepares an additional balance sheet either (a) as required by IAS 8 Accounting policies, changes in accounting estimations and errors or (b) voluntarily. IAS 16 Tangible assets The amendment clarifies how spares and other equipment maintenance are classified as assets and not as an inventory when they meet the definition of tangible assets, when they are used for more than one period. IAS 32 Financial instruments: Presentation The amendment clarifies that the income tax associated with the distribution, is recognized on results and income tax which is related with transaction expenses recognized directly in equity, is recognized in equity in accordance with IAS AGROTIKI INSURANCE S.A.

37 3. ANNUAL FINANCIAL STATEMENTS IAS 34 Interim Financing Reporting The amendment clarifies the necessary disclosures for assets and liabilities of the segments in interim financial report, in accordance to IFRS 8 "Operating Segments". Standards and Interpretations mandatory for periods beginning on or after January 1, 2014 IFRS 9 Financial Instruments IFRS 9 is the first phase of the IASB project to replace IAS 39 and relates to classification and measurement of financial assets and financial liabilities. In later phases, the IASB will expand IFRS 9 to add new requirements for value impairment and hedge accounting. The Group is in the process of estimating the impact of IFRS 9 on its financial statements. IFRS 9 cannot be applied earlier by the Group because it has not been adopted by the European Union. Only once approved will the Group decide whether to apply IFRS 9 earlier than January 1, IFRS 9 Financial Instruments: Hedge accounting and amendments in IFRS 9, IFRS 7and IAS 39 The IASB adopted the IFRS 9 Hedge Accounting, the third phase of the replacement of IAS 39, which establishes an approach for hedge accounting based on principles and facing inconsistencies and weaknesses in the current model of IAS 39. The second amendment required to be recognized in other comprehensive income the changes on the fair value of a liability of the entity, which is due to the changes of the credit risk its own entity and the third amendment removes the mandatory implementation date of IFRS 9. These amendments have not been yet adopted by the European Union. IFRS 7 (Amendment) Financial instruments: Disclosures (applicable to fiscal years commencing on or after January 1, 2015) The amendment requires additional disclosures on transition from IAS 39 to IFRS 9. The amendment has not yet been adopted by the European Union. IAS 32 (Amendment) Financial Instruments: Presentation (applicable to fiscal years commencing on or after January 1, 2014) This amendment to the implementation directives for IAS 32 provides clarification with regard to certain receivables for offsetting financial assets and liabilities in the financial position statement. Group of standards regarding consolidation and joint arrangements (applicable to fiscal years commencing on or after January 1, 2014) The IASB published 5 new standards on consolidation and joint arrangements: IFRS 10, IFRS 11, IFRS 12, IAS. 27 (Amendment) and IAS 28 (Amendment). These standards are applicable to fiscal years commencing on or after January 1, They can be implemented earlier, provided that all five standards are implemented simultaneously. These standards have not yet been adopted by the European Union. The Group is in the process of estimating the impact of the aforementioned standards on its financial statements. The main terms of these standards are as follows: AGROTIKI INSURANCE S.A. 37

38 ANNUAL FINANCIAL REPORT IFRS 10 Consolidated Financial Statements IFRS 10 replaces in their entirety the directives regarding control and consolidation provided in IAS 27 and SIC 12. The new standard changes the definition of control as a definitive factor as to whether an economic entity must be consolidated. The standard provides extensive clarifications which lay down various methods under which an economic entity (investor) can control another economic entity (investment). The revised definition of control focuses on the need for there also to be aright (the ability to direct those activities which significantly affect performance) and the performance variables (positive, negative or both) in order for control to exist. The new standard also provides clarifications about participative rights and vetoes (protective rights) and about agent / principal relationships. IFRS 12 Disclosures of interests in other economic entities IFRS 12 relates to the disclosures an economic entity has to make including important judgments and assumptions which permit readers of financial statements to assess the nature, risks, and financial impacts associated with the economic entity s holdings in subsidiaries, affiliated companies, joint arrangements and structured entities. An economic entity can make some or all of the said disclosures without being obliged to implement IFRS 12 in full or IFRS 10 or 11 or the amended versions of IAS 27 or 28. IAS 27 (Amendment) Separate financial statements This standard was published in parallel with IFRS 10 and when read together the two standards replace IAS 27 - Consolidated and Separate Financial Statements. The amended IAS 27 specifies the accounting method and the disclosures needed for holdings in subsidiaries, joint ventures and affiliated companies when an economic entity is preparing its separate financial statements. At the same time, the IASB transferred certain terms from IAS 28 Investments in Associates and IAS 31 - Investments in Joint Ventures, relating to separate financial statements. IAS 28 (Amendment) Investments in Associates and Joint Ventures IAS 28 - Investments in Associates and Joint Ventures replaces IAS 28 - Investments in Associates. The objective of this standard is to specify the accounting method for investments in associates and to set out the requirements for implementing the equity method when accounting for investments in associates and joint ventures, based on the published version of IFRS 11. IFRS 10, IFRS 11 and IFRS 12 (Amendment) "Consolidated financial statements, joint arrangements and disclosure of interests in other economic entities: Transition directions" (applicable to fiscal years commencing on or after January 1, 2014) The amendment in the transition directions of IFRS 10, 11 and 12 provides clarification about the transaction directions in IFRS 10 and reduces the requirements for providing comparative information of the disclosures of IFRS 12 only for the period that is preceding the first annual period in which it applies the IFRS 12.Comparative information for disclosures relating with the interests in structured entities are not required. IFRS 10, IFRS 12 and IAS 27 (Amendment) Investment Companies (applicable to fiscal years commencing on or after January 1, 2014) The amendment of IFRS 10 defines an investment company and provides an exception from the consolidation. Many investment funds and similar companies that meet the definition of investment companies are excluded AGROTIKI INSURANCE S.A.

39 3. ANNUAL FINANCIAL STATEMENTS from the consolidation of several subsidiaries, which are accounted for, as financial assets at fair value through profit or loss, although control is exercised. The amendments to IFRS 12 introduce the disclosures that are necessary to provide an investment company. IAS 36 (amendment) Disclosures of recoverable value of non-financial assets (applicable to fiscal years commencing on or after January 1, 2014) This amendment requires: a) the disclosure of a recoverable amount or a cash-generating unit (CGU), when it has recognized or reversed an impairment loss and b) detailed disclosures regarding fair value measurement minus selling expenses when has recognized or reversed an impairment loss. Furthermore, removes the requirement to disclose recoverable value, when a CGU contains goodwill or intangible assets with an indefinite useful life and there is no impairment. IFRIC 21 Contributions (applicable to fiscal years commencing on or after January 1, 2014) This interpretation states the accounting treatment of a contribution payment obligation that has been imposed by the government and is not an income tax. The interpretation specifies that the obligating event basis on which it should have been formed the obligation of contribution payment (one of the criteria for the recognition of the obligation according to IAS 37) is the action as it descripted to the relevant regislation which causes the contribution payment. The interpretation may has as a result the recognition of the obligation later than what is applicable today, especially in relation with contributions, which are imposed as a result of conditions that apply to a specific date. The interprenting has not yet been adopted by the European Union. IAS 39 (amendment) Financial Instruments: Recognition and Measurement (applicable to fiscal years commencing on or after January 1, 2014) This modification allows the continuation of hedge accounting when a derivative that is designated as a hedging instrument, renewed legaly (novated) in order to be cleared by a basic counterparty as a result of laws or regulations, if certain conditions are met. IAS 19 Revised (amendment) Employee Benefits (applicable to fiscal years commencing on or after January 1, 2014) The limited purpose amendment applies to employee contributions or third parties in defined benefit plans and simplify the accounting of contributions when they are independent of the number of years that the work is carried out, for example, employee contributions are calculated based on a fixed percentage of salary. This amendment has not yet been adopted by the European Union. Annual Improvements to IFRS 2012 (applicable to fiscal years commencing on or after January 1, 2014) The following amendments describe the major changes involved in seven IFRS due to the results of the of annual improvements project of IASB. These amendments have not yet been adopted by the European Union. IFRS 2 Benefits depends on share value The amendment clarifies the definition of vesting condition and states discrete the term of performance and the term of service AGROTIKI INSURANCE S.A. 39

40 ANNUAL FINANCIAL REPORT 2013 IFRS 3 Business Combinations The amendment clarifies that the liability for contingent consideration which meets the definition of a financial asset is classified as a financial liability or equity item based on the definitions in IAS 32 "Financial Instruments: Presentation". It also clarifies that any contingent consideration, financial and non-financial, that is not an item of equity measured at fair value through profit or loss. IFRS 8 Operating Segments The amendment requires the disclosure of management estimations regarding the aggregation of the operating segments. IFRS 13 Fair Value Measurement The amendment clarifies that the standard does not preclude the possibility of measurement of short-term assets and liabilities in the amounts of invoices, in cases where the effect of discounting is insignificant. IAS 16 Tangible Assets and IAS 38 Intangible Assets Both standards have been amended to clarify the way that the gross carrying amount of the asset and the accumulated depreciation are treated when an economical entity follows the revaluation model. IAS 24 Related Component Disclosures The model was modified to include as a related component a company that provides services of basic administrative members to the economical entity or parent company economical entity. Annual Improvements on IFRS 2013 (applicable to fiscal years commencing on or after July 1, 2014) The following amendments describe the major changes involved in four IFRS due to the results of the of annual improvements project of IASB. These amendments have not yet been adopted by the European Union. IFRS 3 Business Coalescence The amendment clarifies that the IFRS 3 does not apply to the accounting of the formation of any shared activity basis on IFRS 11 on its financial statements of the shared activity. IFRS 13 Fair Value Measurement The amendment clarifies that the exemption provided by IFRS 13 for a portfolio of financial assets and liabilities ('portfolio exception') apply to all contracts (including non-financial contracts) within the field of IAS 39/IFRS 9. IAS 40 Investment Property The standard has been amended to clarify that the IAS 40 and IFRS 3 are not mutually exclusive. 40 AGROTIKI INSURANCE S.A.

41 3. ANNUAL FINANCIAL STATEMENTS 3. LEGISLATIVE FRAMEWORK AGROTIKI INSURANCE S.A. is subject to the provisions of Codified Law 2190/1920 On Corporate Companies. Additionally, the Company is subject to the following specific provisions of Legislative Decree 400/1970 on Private Insurance Enterprises as in force following amendments made by: Law 2170/93 (Government Gazette 150/A) Presidential Decree 252/96 (Government Gazette 186/A) on Compliance with the provisions of the 2nd and 3rd EU Directive of Law 2496/97 (Government Gazette 87/A) Presidential Decree 159/1998 (Government Gazette 121/A) on Compliance with the provisions of Directive 95/2b/EC Law 2741/1999 (Government Gazette 199/A) Presidential Decree 169/2000 (Government Gazette 156/A) on Adaptation of Directive 91/674/ EEC transposed in Greek legislation by Presidential Decree 148/1984 (Government Gazette 47/A) and Sectoral accounting plan for insurance undertakings as amended by Presidential Decree 64/1999 (Government Gazette 74/A) The decisions of the Minister of Development K3-3522/97, K3-1695/98, K3-3974, 3975/99, K3-315, 6459, 9479/2000 and K /07/06/2011, which, apart from regulating certain insurance matters, also determine the supervision of settling pending losses, as well as the techniques and methods for calculating technical reserves. In addition to the above, the decisions of the Private Insurance Supervisory Committee 3/133/2008 and 154/5A/2008 also apply. 4. INSURANCE AND FINANCIAL RISK MANAGEMENT IFRS 7 Financial Instruments and Disclosures introduces new disclosures for the purpose of improving the information provided, so as to assess the status of financial instruments for the Group s financial position. This note includes analyses for the Group s report on each of the aforementioned risks and the policies and processes for measuring and managing said risk. The risk management policies are examined periodically in order to incorporate changes that occur in market conditions and Group activities. The supervision of compliance with policies and procedures for risk management has been assigned to the Group s BoD, which has the ultimate responsibility for managing the aforementioned risks, assisted by the Internal Audit Department, the Investment Committee and the Actuarial Department, which report to the Board on a regular basis. The Group is subject to financial and insurance risks. The Assets and Liabilities most exposed to these risks are: AGROTIKI INSURANCE S.A. 41

42 ANNUAL FINANCIAL REPORT FINANCIAL ASSETS / LIABILITIES DESCRIPTION BOOK VALUE FAIR VALUE BOOK VALUE FAIR VALUE Valuation at amortized cost Investment securities held to maturity Cash and cash equivalents Receivables from loans Receivables from premiums Receivables from reinsurers Other assets Valuation at fair value Financial assets at fair value through results Investment securities available for sale Investments on behalf of policyholders (Unit Linked) Assets Valuation at amortized cost Liabilities to reinsurers Other liabilities Valuation at fair value Liabilities from investment insurance contracts (U/L) Liabilities DESCRIPTION BOOK VALUE FAIR VALUE BOOK VALUE FAIR VALUE Valuation at amortized cost Investment securities held to maturity Cash and cash equivalents Receivables from loans Receivables from premiums Receivables from reinsurers Other assets Valuation at fair value Financial assets at fair value through results Investment securities available for sale Investments on behalf of policyholders (Unit Linked) Assets Valuation at amortized cost Liabilities to reinsurers Other liabilities Valuation at fair value Liabilities from investment insurance contracts (U/L) Liabilities AGROTIKI INSURANCE S.A.

43 3. ANNUAL FINANCIAL STATEMENTS 4.1. Financial Risk The Company is exposed to financial risk through financial assets and liabilities. The main components of financial risk are market risk, liquidity risk, exchange rate risk, interest rate risk, guarantees risk and credit risk. Market Risk Market risk refers to the probability of losses due to change in the level or volatility of market prices, such as stock prices, interest rates and exchange rates. The Company regularly evaluates the net market value of its portfolio and assesses the potential losses that might arise from exceptionally unusual financial changes. Value Risk The Group is exposed to the risk of value changes in market prices that has as a result the fluctuation in value of a financial instrument which has been classified either as an available for sale or as a financial asset at fair value through results. The following table summarizes the impact of an increase or decrease in prices of shares and bonds in net profit and Group s equity: % CHANGE CHANGE ON RESULT CHANGE IN EQUITY Financial assets available for sale -1% (389) Financial assets available for sale +1% 389 Financial assets at fair value through results -1% (14) Financial assets at fair value through results +1% 14 Financial assets available for sale -15% (7.686) Financial assets available for sale +15% Financial assets at fair value through results -15% (1.230) Financial assets at fair value through results +15% Net profit for the fiscal year would have increased or decreased as a result of profits / losses of financial assets that have been classified as financial assets at fair value through results. Other components of equity would have increased or decreased as a result of profits / losses of financial assets that has been classified as available for sale. Cash Flow Risk due to the Interest Rate changes The Group monitors the effects of interest rate risk by considering the duration of its securities portfolio securities and its related liabilities, in conjunction with developments in money markets. Group policy is to invest a substantial portion of the portfolio in fixed interest rate bonds with a maturity corresponding to the relevant liabilities. AGROTIKI INSURANCE S.A. 43

44 ANNUAL FINANCIAL REPORT 2013 CLASSIFICATION OF INTEREST BEARING FINANCIAL ASSETS, BASED ON INTEREST RATE DESCRIPTION Fixed interest rate for bonds and loans Interest-bearing deposits Bearing deposits Total ANALYSIS OF INTEREST-BEARING FINANCIAL ASSETS PER AVERAGE 2013 INTEREST RATE DESCRIPTION 0%-3% 3.01% AND ABOVE TOTAL Greek Government Bonds - EFSF Total Bonds Receivable from loans Cash and cash equivalents Total ANALYSIS OF INTEREST-BEARING FINANCIAL ASSETS PER AVERAGE 2012 INTEREST RATE DESCRIPTION 0%-3% 3.01 % AND ABOVE TOTAL Greek Government Bonds - EFSF Total Bonds Receivable from loans Cash and cash equivalents Total In order to manage the interest rate risk, the Company closely monitors the sensitivity of its financial assets and liabilities to interest rate changes, adopting a corresponding increase or decrease on the interest rate curve by 100 basis units over a timeframe of one month and 50 basis units over a timeframe of over one year. The portfolio is identified as symmetrical and so the change is equivalent. The Company is subject to interest rate sensitivity risk only for the term deposits, as the Greek Government Bonds and EFSF have stable interest rate conditions until their expiration date. The portfolio of term deposits is characterized as symmetrical, for this reason the change in case of increase / decrease of interest rates is equal. An increase of 1% to the average interest rate term deposits would increase revenue from interest on deposits amounting to (2012: 751), when a decrease of 1% would decrease of expenses amounts to (2012: 751). 44 AGROTIKI INSURANCE S.A.

45 3. ANNUAL FINANCIAL STATEMENTS Foreign Exchange Risk The Group is not exposed to currency risk as the transactions are carried out in Euros. The Group has interest in a subsidiary company whose head office is in Romania. The equity of this company is exposed to currency risk by converting the foreign currency into Euro. However, the foreign exchange risk is very limited as the subsidiary has no significant activity. Liquidity Risk Liquidity risk relates to the Company s ability to meet its financial liabilities as they become due. The monitoring of liquidity risk focuses on managing the temporal correlation of the cash inflows and outflows, and ensuring sufficient cash for current transactions. To this end, the Company performs a liquidity gap analysis estimating the expected cash flows arising from the assets and liabilities. The following tables were based on residual maturity of assets and liabilities from the date the financial statements were compiled until their maturity date. AGROTIKI INSURANCE S.A. 45

46 ANNUAL FINANCIAL REPORT 2013 LIQUIDITY RISK DESCRIPTION 0 1 YEAR 1-5 YEARS OVER 5 YEARS U/L & DAF TOTAL 0 1 YEAR 1-5 YEARS OVER 5 YEARS U/L & DAF TOTAL Cash and cash equivalent Receivables from loans Investments on behalf of policyholders Total for other liabilities Financial assets at fair value through results Investment securities available for sale Investment securities held to maturity Assets Liabilities to reinsurers Other liabilities Insurance provisions and liabilities from financial contracts Liabilities LIQUIDITY RISK DESCRIPTION 0 1 YEAR 1-5 YEARS OVER 5 YEARS U/L & DAF TOTAL 0 1 YEAR 1-5 YEARS OVER 5 YEARS U/L & DAF TOTAL Cash and cash equivalent Receivables from loans Investments on behalf of policyholders Total for other liabilities Financial assets at fair value through results Investment securities available for sale Investment securities held to maturity Assets Liabilities to reinsurers Other liabilities Insurance provisions and liabilities from financial contracts Liabilities AGROTIKI INSURANCE S.A.

47 3. ANNUAL FINANCIAL STATEMENTS In order to cover the liquidity risk of U / L and DAF the Company has placed insurance investment and property amounting to 2,754 (2012: 2,485) as shown in note 46. On the above tables the rest of the data assets and liabilities of the Group and the Company are shown sorted by expiration date. In cases where there is no contractual maturity date (open accounts) or redefining rate deposits and savings) for assets and liabilities, then they are assigned to the period up to one year. Guarantees risk Due to the long-term coverage that life insurance contracts offer, the interest rate plays a significant role in the calculation of premiums. The interest rate that is used in these calculations is known as the technical interest rate. An inappropriate choice in the guaranteed technical interest rate for calculating premiums is a factor which may lead to a surplus or deficit of the mathematical reserves. The amount of the guaranteed technical interest rate is taken into account in pricing, so the Group can mitigate that risk. The Group also guarantees to cover the risk through the investment choice in high-yield placements. Credit risk The Group is exposed to credit risk, which is the risk associated with a counter party who is unable to meet their liabilities when they become due. Reinsurers who may not be able to cover their share of insurance liabilities or of the insurance claims already paid to policyholders. The policyholders, as well as the Group associates (insurers, agents and others) may not be able to pay the premiums due. The Group assesses the limits of associates and counterparties at regular intervals and adopts relevant measures. The book value of financial assets represents the exposure to credit risk. The financial assets with maximum exposure to credit risk on the balance sheet date were: CREDIT RISK EXPOSURE DESCRIPTION Cash and cash equivalent Receivables from loans Financial assets at fair value through results Investment securities available for sale Investment securities held to maturity Other liabilities Total AGROTIKI INSURANCE S.A. 47

48 ANNUAL FINANCIAL REPORT 2013 The maximum exposure to credit risk for receivables from policyholders for each customer type on the date of the Financial Position statement was: DESCRIPTION Company s Network Agents and associates Other Total There is no particular concentration of risk by geographic area, because the Group is mainly active in Greece. An analysis of financial assets that are either past due or meet the requirements for being written off are listed below: DESCRIPTION Financial assets that are not in arrears and do not fulfill the write-off conditions Financial assets that are in arrears and do not fulfill the write-off conditions Impaired financial assets Provisions for impairment (15.502) (13.527) (15.502) (13.527) Total On the closing date of the financial statements, the long-term credit ratings for these financial assets based on Moody s assessments are listed below: CREDIT RATING TABLE 2013 DESCRIPTION TOTAL Aaa Aa1 TO Α3 Baa2 TO C WITHOUT CREDIT RATING Cash and cash equivalents Receivables from loans Financial assets at fair value through results Investment securities available for sale Investment securities held to maturity Receivables from premiums Receivables from reinsurers Other assets Total AGROTIKI INSURANCE S.A.

49 3. ANNUAL FINANCIAL STATEMENTS 2012 DESCRIPTION TOTAL Aaa Aa1 TO Α3 Baa2 TO C WITHOUT CREDIT RATING Cash and cash equivalents Receivables from loans Financial assets at fair value through results Investment securities available for sale Investment securities held to maturity Receivables from premiums Receivables from reinsurers Other assets Total The bulk of cash is mainly located in Piraeus Bank. Commercial and other receivables The Company s exposure to credit risk is mainly influenced by the nature of each associate through whom the collection of receivables from insurance contracts is made. The Company has set a credit policy under which the creditworthiness of each new associate is examined on an individual basis, before being offered the usual payment terms. The credit rating controls performed by the Company include checking banking sources and other sources of credit ratings, if any. When monitoring their credit risk, associates are grouped according to the distribution network. The Company records an impairment provision which represents the estimate for losses in relation to commercial and other receivables, and investment securities. This provision primarily consists of impairment losses of specific receivables of significant risk and aggregate losses for groups of similar receivables that have been assessed as realized but have not yet been made known. The consolidated provision for similar categories of receivables is determined based on historical data for similar receivables. Investments The Group limits its exposure to credit risk by investing only in liquid securities from counterparties who have high credit ratings and a high level of credibility. The bulk of investments refer to the equity for nonbonds of Greek Banks and Greek government bonds, while a small part refers to equity in an Athens Stock Exchange Company for which relative impairment has been calculated. The credit risk for the Group with regard to securities is low, because they reflect the market prices. Information on the portfolio held to maturity, which is most exposed to credit risk due to the valuation at amortized cost, is provided in the following table. AGROTIKI INSURANCE S.A. 49

50 ANNUAL FINANCIAL REPORT AMORTIZED NOMINAL VALUE COST CLASSIFICATION BY SECURITY CATEGORY VALUE 2013 VALUE 2013 VALUE Greek Government Bonds (GGB) MARKET VALUE AVERAGE NEG. VALUE a) Fixed rate (FXD) ,42 b) Zero bond rate (EFSF) Total AMORTIZED NOMINAL VALUE COST CLASSIFICATION BY SECURITY CATEGORY VALUE 2012 VALUE 2012 VALUE Greek Government Bonds (GGB) MARKET VALUE AVERAGE NEG. VALUE a) Fixed rate (FXD) ,36 b) Floating rate (FRN) ,96 Total Guarantees The Group has a policy of not providing any financial guarantees to third parties, except for those relating to guarantees for repayment of insurance contracts issued by the Group and for participation in various competitions, where this is necessary and always subject to the approval of the Company s BoD. Loans The Group s credit risk on loans provided is low because the loans are issued to employees and to Life Insurance policyholders. Guarantees Received Collaterals In order to secure its loans, the Group requires guarantees (collaterals). The Group accepts the following collaterals for loans: Mortgages Concession of receivables The Group generally requires that loans are covered by a safety value reaching 100% of the loan, so as to minimize the corresponding credit risk. For medium- and long-term loans, the Group generally requires collaterals to have the form of mortgage on property. On the contrary, for loans with maturity of up to 18 months, the Group accepts collaterals in another form, such as the first right to the bank account that the salaries of the debtor are paid in. 50 AGROTIKI INSURANCE S.A.

51 3. ANNUAL FINANCIAL STATEMENTS 4.2 Fair Value Measurement The Company uses the following hierarchy to determine and disclose the fair value: Level 1: Investments measured at fair value based on quoted prices in active markets. Level 2: Investments measured at fair value using the valuation model, whereby all the elements that significantly affect the fair value are based on observable market data. Level 3: Investments measured at fair value using the valuation models, whereby all the elements that significantly affect the fair value are not based on observable market data. All of the Company s investments in shares and mutual funds are measured at fair value using the quoted prices from the Athens Exchange, apart from the non-listed domestic shares, which are measured at cost. It is estimated that their total value does not differ substantially from the total cost. The Company did not use any valuation model due to the non-significance of the relevant funds LEVEL 1 LEVEL 2 LEVEL 3 TOTAL BONDS Government - Domestic Corporate - Listed Foreign Bonds SHARES Listed Domestic Not listed - Domestic Warrants (GGB linked to GDP) Shares MUTUAL FUNDS SHARES M.F. Domestic Mutual Funds Shares Total LEVEL 1 LEVEL 2 LEVEL 3 TOTAL BONDS Government - Domestic Corporate - Listed Foreign Bonds SHARES Listed Domestic Not Listed Domestic Shares MUTUAL FUNDS SHARES Α.Κ. Domestic Mutual Funds Shares TOTAL There were no transfers between Level 1 and Level 2 during the fiscal year. AGROTIKI INSURANCE S.A. 51

52 ANNUAL FINANCIAL REPORT Insurance Risk The risk of any insurance contract is the probability of the occurrence of the insured risk and the uncertainty of the claim amount. The insurance risk is both uncertain and unpredictable, due to the nature of insurance contracts. In an insurance portfolio where the theory of probability is applied for the pricing and the estimate of the insurance reserves, the main risk that the Company faces is the occurrence of higher claims in relation to the insurance provisions. This may occur when the frequency and the amount of claims is greater than originally estimated. The Company has adopted an insurance risk acceptance policy that allows them to minimize the anti-selection risk. This means that the claims arising from the insured population will not significantly differ and may even be lower than the expected claims arising from the general population. The total portfolio of undertaken risks is formed by numerous different insurance risks and by every risk category from a number of similar insurance contracts. The result of such a composition is that the risk is distributed and the possible variability of the expected result is reduced. Moreover, the insurance risk is mitigated via reinsurance. Maximum exposure to risk capital The largest exposure of the Company to risk capital concerns the additional coverage of hospital costs, which are unlimited and without reinsurance coverage. This risk is addressed through readjusting the annual premium and replacing the existing portfolio with a new, more profitable one. Moreover, a large exposure of the Company to risk capital also concerns the fire sector and particularly coverage against earthquake, which is covered by the Catastrophe Excess of Loss contract. The Company s retention reaches 3,000 for every claim or series of claims arising from the same event. 52 AGROTIKI INSURANCE S.A.

53 3. ANNUAL FINANCIAL STATEMENTS INSURANCE RISKS ANALYSIS OF REINSURANCE CONTRACTS INSURED CAPITALS OWN SHARE REINSURERS TOTAL Sector 1. Fire Proportional Catastrophe Excess of loss Excess of loss Technical Insurance (Proportional) 2.1. Engineering & Electronic Equipment General Third Party Liability Professional Indemnity Miscellaneous Accident Cars Excess of loss Unlimited Unlimited Rural insurance 4.1. Agro Proportional Livestock Agro Excess of Loss Transportation Excess of Loss Craft Excess of Loss Life CONCENTRATION OF SIGNIFICANT RISKS BY REGION (EARTHQUAKE ACCUMULATION CAPITAL) RISK ZONE Central Greece (excl. Athens & Piraeus) No OF CONTRACTS INSURED CAPITALS CONCESSION OF RISK No OF CONTRACTS INSURED CAPITALS CONCESSION OF RISK Athens & Piraeus Total AGROTIKI INSURANCE S.A. 53

54 ANNUAL FINANCIAL REPORT 2013 Life Insurance Contracts General These insurance contracts insure events associated with human life (e.g. death or survival) over a long-term period, while life insurance contracts of a short period protect Company customers against consequences of events (such as death or disability) and their ability, or the ability of dependent members, to maintain their current level of income. Guaranteed benefits on these contracts paid to beneficiaries are either fixed or depend on the amount of the financial loss of the insured party. The risks associated with life insurance contracts mainly refer to the mortality, morbidity and survival risk, investment performance risks, risks associated with chargeable fees and risks arising from cancellation or surrender of insurance contracts. Adequacy audit of reserves associated with life insurance contracts IFRS 4 requires an audit on whether all recognized insurance provisions (net of non-accrual acquisition costs and related intangible assets) are sufficient to cover liabilities arising from insurance contracts. In the event that these provisions are not adequate, an equal-amount provision is recorded against the results. The method applied for the products of the life insurance sector was based on current estimates of future cash flows from insurance contracts, including estimates of direct administration costs associated with them. The life insurance programs in the life insurance sector were classified according to the nature of respective coverage, in the following main categories: 1. Traditional Life Insurance Contracts 1.1 Basic Principles Projection of flows A projection is made by the modeling of all future cash flows based on the liabilities of the Company as well as all other information relating to future liabilities (i.e. expenses). The projection period is extended to the life of the contracts. Future flows include all current and future rights of insured customers increased by DPF (cumulative dividends at the end of the year, future dividends from profit sharing). The commissions paid for each existing contract are calculated based on the commission policy of the Company at the time the contract was issued. Future payments related to reserves (i.e. surrenders) are legally calculated and consideration is given for any Zillmer / DAC decreases in calculations, in accordance with the technical specifications for each product. The same applies to any payments for premium refunds / payments due to death / survival payments. 1.2 Assumptions Timing of events The calculations are made on a monthly basis. The Company believes that the payment of all benefits is made directly (i.e. at the end of the month that the event occurred). This "contract" is a cautious assumption. 54 AGROTIKI INSURANCE S.A.

55 3. ANNUAL FINANCIAL STATEMENTS Mortality assumptions Future mortality is evaluated by using the mortality table of the Hellenic Actuarial Association This assumption is based on experience and market practices (which are also assessed by the Greek Insurance Association). This assumption is not based on portfolio data experience, since its size is not sufficient to extract statistically significant information. Assumptions of contract surrenders / liberalizations Future levels of contract surrenders / liberalizations are calculated by evaluating the previous experience of the Company. Future levels of contract surrenders / liberalizations include cancellations and changes and are calculated based on the insurance year. An additional assumption is adopted for pension contracts and pertains to the percentage of contracts that will receive a pension payout instead of pension, when they reach maturity. Cost assumptions The projected future flows include administration fees. The assumptions are based on actual survey analysis and "cost allocation" performed each year, whereby the fixed and variable costs of the Company are classified. The estimate of future inflation cost is based on the economic environment and history. Discount Rate The current value of future cash flows was calculated by using percentages of the residual lives of contracts. The interest rates are based on the interest rate curve issued by the French Institute of Actuaries Adequacy of Modeled Portfolio The projection of flows has been performed after each contract was taken into consideration. The data used is extracted from the computer database and includes all traditional life insurance contracts in effect on the date of assessment. The percentage of the total traditional portfolio included in the calculation is sufficient for an accurate overview of the overall portfolio position with regard to liability adequacy. 2. D.A.F. Contracts (Deposit Administration Funds) The method adopted for testing reserve adequacy mainly relates to the guaranteed interest rates. Discount Rate The same rate as in the traditional life contracts is used for calculating the present value of future cash flows as well as for calculating the amount of future profit sharing. Sensitivity analysis The Company applied sensitivity analysis on some of the assumptions whose change results in significant changes in key results, such as costs, and on additional covers. AGROTIKI INSURANCE S.A. 55

56 ANNUAL FINANCIAL REPORT 2013 The results of the additional calculations are presented in the table below: SCENARIO 2013 RESULTS IN MILLIONS Current scenario 21,91 +10% Expenses 22,35-10% Expenses 21,52 Sensitivity analysis for the Outstanding Claims Reserve The main assumption for calculating OCR using actuarial statistical methods is that the average annual increase in the average cost of claims will be 1%. The sensitivity of the result to a 10% increase in this rate would lead to an increase of approximately 100. Non-life Insurance Contracts General The products offered by the Company cover the full range of non-life risks other than credit risks. The Company has implemented appropriate policies to address risks arising from insurance contracts and mainly pertain to the process of risk assessment and claims management, reinsurance policy and the correct prediction of outstanding claims, as included in the annual Financial Statements. Examination of adequacy of reserves related to non-life insurance contracts To assess the adequacy of reserves, appropriate actuarial models compatible with the Company s portfolio have been implemented. Data acquired during the last decade for all major classes of the Company was used for the examination. The final calculation is the average of the results of each method. PROGRESS OF INSURANCE PROVISIONS FOR MOTOR LIABILITY INSURANCE RISKS YEAR OF CLAIM TOTAL Estimated total cost: - End of year Payment total to date Reserve in Financial Statement Reserve related to previous years Total reserve INSURANCE RISKS YEAR OF CLAIM TOTAL Estimated total cost: - End of year Payment total to date Reserve in Financial Statement Reserve related to previous years Total reserve AGROTIKI INSURANCE S.A.

57 3. ANNUAL FINANCIAL STATEMENTS 5. NET WRITTEN PREMIUMS AND RELATED INCOME 2013 LIFE MOTOR LIABILITY OTHER RISKS TOTAL Written premiums Change in unearned premiums Ceded premiums (1.766) (1.262) (27.226) (30.254) Related income Total LIFE MOTOR LIABILITY OTHER RISKS TOTAL Written premiums Change in unearned premiums Ceded premiums (1.766) (1.262) (27.016) (30.044) Related income Total LIFE MOTOR LIABILITY OTHER RISKS TOTAL Written premiums Change in unearned premiums Ceded premiums (957) (1.365) (27.556) (29.878) Related income Total LIFE MOTOR LIABILITY OTHER RISKS TOTAL Written premiums Change in unearned premiums Ceded premiums (957) (1.365) (27.360) (29.682) Related income Total The premiums are reduced by 2,793 (2012: 2,965), which relates to investment insurance contracts (in accordance with IFRS 4). AGROTIKI INSURANCE S.A. 57

58 ANNUAL FINANCIAL REPORT COMMISSIONS PAID DESCRIPTION COMMISSIONS PAID REINSURER COMMISSIONS TOTAL COMMISSIONS PAID REINSURER COMMISSIONS TOTAL Life (7.826) 268 (7.558) (6.500) 188 (6.312) Motor Liability (8.345) - (8.345) (9.076) - (9.076) Other Risks (10.090) (6.730) (8.183) (4.982) Total (26.261) (22.634) (23.759) (20.370) DESCRIPTION COMMISSIONS PAID REINSURER COMMISSIONS TOTAL COMMISSIONS PAID REINSURER COMMISSIONS TOTAL Life (7.826) 268 (7.558) (6.500) 188 (6.312) Motor Liability (8.345) - (8.345) (9.076) - (9.076) Other Risks (10.130) (6.770) (8.236) (5.035) Total (26.302) (22.674) (23.812) (20.423) 7. CLAIMS PAID TO POLICYHOLDERS (RETENTION) DESCRIPTION COMMISSIONS PAID REINSURER COMMISSIONS TOTAL COMMISSIONS PAID REINSURER COMMISSIONS TOTAL Life Motor Liability Other Risks Total DESCRIPTION COMMISSIONS PAID REINSURER COMMISSIONS TOTAL COMMISSIONS PAID REINSURER COMMISSIONS TOTAL Life Motor Liability Other Risks Total During 2013 conducted repurchase of portfolio of outstanding claims from reinsurers amounting to against amount AGROTIKI INSURANCE S.A.

59 3. ANNUAL FINANCIAL STATEMENTS 8. CHANGES IN INSURANCE PROVISIONS DESCRIPTION COMMISSIONS PAID REINSURER COMMISSIONS TOTAL COMMISSIONS PAID REINSURER COMMISSIONS TOTAL Life Motor Liability (1.762) (175) (1.937) Other Risks (2.505) (2.311) Total DESCRIPTION COMMISSIONS PAID REINSURER COMMISSIONS TOTAL COMMISSIONS PAID REINSURER COMMISSIONS TOTAL Life Motor Liability (1.762) (175) (1.937) Other Risks (2.505) (2.491) Total NET INTEREST INCOME DESCRIPTION Interest and Related Income Reinsurer interest and Bank expenses (194) (247) (194) (247) Other (492) (552) (49) (38) Interest and Related Expenses (686) (799) (243) (285) Total NET FEE AND COMMISSION INCOME DESCRIPTION Commissions from M.F Net income from fees and commissions AGROTIKI INSURANCE S.A. 59

60 ANNUAL FINANCIAL REPORT PROFIT FROM INVESTMENT SALES DESCRIPTION Profit / (Loss) from sale of shares Trading Portfolio (1.832) (1.832) Profit from sale of shares Available for sale (Loss) from sale of bonds Available for sale (14) - (14) - Profit from repurchase of bonds Available for sale Profit from repurchase of bonds Held to maturity Total PROFIT / (LOSSES) FROM VALUATION OF INVESTMENTS DESCRIPTION Results from valuation of securities Trading portfolio Unit Linked impairment (247) (260) (247) (260) Impairment of shares and mutual funds Available for sale (285) (483) (285) (483) Other transactions (129) (129) Total (LOSS) FROM PROPERTY VALUATION DESCRIPTION (Losses) from property valuation (7.461) (7.565) (7.461) (7.565) Total (7.461) (7.565) (7.461) (7.565) 14. DIVIDEND INCOME DESCRIPTION From securities at fair value through results / trading portfolio Dividend Income AGROTIKI INSURANCE S.A.

61 3. ANNUAL FINANCIAL STATEMENTS 15. OTHER OPERATING INCOME DESCRIPTION Income from investment properties Income from previous fiscal year provisions Other Income Total OPERATING EXPENSES DESCRIPTION Staff remunerations and expenses* (26.046) (17.233) (25.682) (16.852) Third party fees (2.560) (2.366) (2.511) (2.325) Marketing and Advertising expenses (461) (165) (457) (161) Third party payments (1.856) (2.619) (1.841) (2.619) Depreciation and impairment of assets (1.591) (1.500) (1.560) (1.462) Rents (314) (338) (279) (296) Taxes and fees (543) (645) (539) (645) Provisions for accrued expenses and impairments (5.000) (1.702) (5.000) (1.702) Other expenses (9.662) (6.581) (9.546) (6.468) Total (48.033) (33.149) (47.415) (32.530) * The following table outlines Staff Remunerations and Expenses DESCRIPTION Payroll cost (11.597) (11.378) (11.310) (11.078) Employer contributions (2.799) (2.344) (2.722) (2.263) Other benefits (2.851) (3.511) (2.851) (3.511) Benefits at retirement (8.800) - (8.800) - Staff remunerations and expenses (26.046) (17.233) (25.682) (16.852) On July 19, 2013, the company decided to operate voluntary retirement program. Totally, 83 employees retired before exercising their right to participate in this program. The total amount of compensation amounted to During 2014, it is expected that 41 employees will retire. AGROTIKI INSURANCE S.A. 61

62 ANNUAL FINANCIAL REPORT INCOME TAX The Greek tax legislation and relevant regulations are subject to interpretations by tax authorities. Tax returns are filed annually, but the profits or losses declared for tax purposes remain provisional until, the tax authorities examine the taxpayer s statements and records at the time when the relevant tax liabilities have been finalized. Tax losses, to the extent in which they are accepted by the tax authorities, can be used to offset profits of the five subsequent years following the fiscal year they were incurred. In accordance with the Greek tax law, the income tax rate was 26% on December 31, 2013 (December 31, 2012: 20%). The Company has not been audited for the fiscal years 2008 to Specifically for 2013, in accordance with Article 17(3) of Law 3482/2010 and Ministerial Circular 1159/2011 effective for balance sheets closing on June 30, 2011 and thereafter, the tax audits for companies that must be audited by Certified Auditors or Auditing Offices registered in the public register of Law 3693/2008 (Government Gazette 174/1) will from now on be conducted by them. The Certified Auditors will issue a Tax Compliance Report. If the Tax Compliance Report does not contain any reservations and the company is not included in the sample of 9% of the companies that will be re-audited by the tax authorities within 18 months from the date that the Tax Compliance Report was submitted, then, in accordance with Article 80 of Law 3842/2010, the fiscal year will be considered as completed for tax purposes. The Company has commissioned the Auditing Company PwC for tax audit for the years 2011, 2012 and For 2011 fiscal year, the tax compliance report, has been approved by the tax authority as the 18 months form the date of issue has been elapsed. DESCRIPTION Income tax (current year) (5.902) (5.333) (5.900) (5.330) Deferred tax (64) (64) Taxes (5.397) (5.394) Profits before taxes Income tax rate 26% 20% 26% 20% Income tax (8.196) (6.373) (8.250) (6.373) Tax-exempt income Non deductible expenses (2.018) (1.052) (2.018) (1.052) Part of the earnings corresponding to tax-free income IFRS differences (745) 655 (688) 655 Other differences 109 (366) 109 (363) Income tax (5.902) (5.333) (5.900) (5.330) 62 AGROTIKI INSURANCE S.A.

63 3. ANNUAL FINANCIAL STATEMENTS 18. PROFIT PER SHARE The basic profit per share are calculated as follows: DESCRIPTION Profit after taxes Average number of shares issued for the period Basic and profits per share (in absolute numbers) 1,4154 0,9714 1,4231 0, TANGIBLE FIXED ASSETS The Group and Company Tangible Fixed Assets on December 31, 2013 and 2012 are outlined in the following table: 2013 FURNITURE & OTHER EQUIPMENT IMPROVEMENTS TO THIRD-PARTY PROPERTY FIXED ASSETS UNDER CONSTRUCTION DESCRIPTION LAND & LOTS BUILDINGS TRANSPORTA- TION VEHICLES TOTAL Opening balance Acquisition cost Accrued Depreciation and impairment (22.328) (26.536) (288) (10.978) (226) (18.129) (78.485) Undepreciated acquisition cost /01/2013 Plus: Purchases Sales & Deregistration - - (85) (2) - - (87) Less: Fiscal year depreciation - (490) (18) (715) - - (1.223) Disposals depreciation Fiscal year impairment (550) (5.819) (6.368) Undepreciated acquisition cost 31/12/ AGROTIKI INSURANCE S.A. 63

64 ANNUAL FINANCIAL REPORT FURNITURE & OTHER EQUIPMENT IMPROVEMENTS TO THIRD-PARTY PROPERTY FIXED ASSETS UNDER CONSTRUCTION DESCRIPTION LAND & LOTS BUILDINGS TRANSPORTA- TION VEHICLES TOTAL Opening balance Acquisition cost Accrued Depreciation (22.328) (26.536) (276) (10.943) (226) (18.129) (78.438) and impairment Undepreciated acquisition cost /01/2013 Plus: Purchases Sales & Deregistration - - (85) (2) - - (87) Less: Fiscal year depreciation - (490) (18) (709) - - (1.217) Disposals depreciation Fiscal year impairment (550) (5.819) (6.368) Undepreciated acquisition cost 31/12/ On December 31, 2013 the Company had all its property (owner-occupied and investment) valued by an independent certified evaluator who impaired the value of property by affecting the results of AGROTIKI INSURANCE S.A.

65 3. ANNUAL FINANCIAL STATEMENTS 2012 FURNITURE & OTHER EQUIPMENT IMPROVEMENTS TO THIRD-PARTY PROPERTY FIXED ASSETS UNDER CONSTRUCTION DESCRIPTION LAND & LOTS BUILDINGS TRANSPORTA- TION VEHICLES TOTAL Opening balance Acquisition cost Accrued Depreciation and (16.375) (20.174) (269) (10.279) (226) (18.129) (65.452) impairment Undepreciated acquisition cost /01/2012 Plus: Purchases Less: Fiscal year depreciation - (527) (19) (699) - - (1.245) Fiscal year impairment (3.287) (1.759) (5.046) Change in category (2.666) (4.076) (6.742) Undepreciated acquisition cost 31/12/ FURNITURE & OTHER EQUIPMENT IMPROVEMENTS TO THIRD-PARTY PROPERTY FIXED ASSETS UNDER CONSTRUCTION DESCRIPTION LAND & LOTS BUILDINGS TRANSPORTA- TION VEHICLES TOTAL Opening balance Acquisition cost Accrued Depreciation and (16.375) (20.174) (262) (10.255) (226) (18.129) (65.421) impairment Undepreciated acquisition cost /01/2012 Plus: Purchases Less: Fiscal year depreciation - (527) (14) (688) - - (1.229) Fiscal year impairment (3.287) (1.759) (5.046) Change in category (2.666) (4.076) (6.742) Undepreciated acquisition cost 31/12/ AGROTIKI INSURANCE S.A. 65

66 ANNUAL FINANCIAL REPORT 2013 The analysis of owner-used Company property on December 31, 2013 is as follows: NO CITY ADDRESS SQ.M. FAIR VALUE OF BUILDINGS FAIR VALUE OF LAND TOTAL PROPERTY VALUE 31/12/ /12/ /12/2013 TYPE OF FACILITY 1 Athens 4, Syggrou Ave storey building 2 Athens 173, Syggrou Ave Complex of 2 multi-storey buildings 3 Piraeus 25, 34th Syntagmatos St th floor 4 Thessaloniki 33, Tsimiski St rd floor 5 Thessaloniki 33, Tsimiski St th floor 6 Thessaloniki 110, Mitropoleos St th floor 7 Thessaloniki 1, Dimokratias Sq. & Monastiriou th floor - Basement 8 Patra 8, Kolokotroni St st- 2nd floor 9 Patra 8, Kolokotroni St th floor 10 Larisa 72, Papanastasiou St th floor 11 Iraklio 29A, Elefterias Sq. - Dorre Mansion th floor 12 Iraklio 3, Dimokratias Ave Ground floor -1st basement -2nd basement 13 Ioannina 24, N. Zerva St st-2nd-3rd floor 14 Alexandroupoli 264, V. Georgiou St nd floor 15 Kavala 8, Mitropoleos St st floor 16 Karditsa 25, Iroon Polytechniou St th floor 17 Agrinio 10, Ilia Iliou St th floor- loft 18 Rio 19 Siteia Charalampopoulou St. (Gounarianika- Agios Vasileios) Lot (outside the planning zone) Agios Spyridonas - Polissos, Siteia Plot (Palaiomandres, Lasithi) Total AGROTIKI INSURANCE S.A.

67 3. ANNUAL FINANCIAL STATEMENTS 20. AND INVESTMENT PROPERTY The Group and Company investment property on December 31, 2013 and 2012 is outlined in the following tables: AND 2013 DESCRIPTION LAND & LOTS BUILDINGS TOTAL Opening balance Acquisition cost Undepreciated acquisition cost 01/01/ Less: Change of fair value (314) (778) (1.092) Undepreciated acquisition cost 31/12/ AND 2012 DESCRIPTION LAND & LOTS BUILDINGS TOTAL Opening balance Acquisition cost Undepreciated acquisition cost 01/01/ Less: Change of fair value (2.222) (297) (2.519) Other changes Change in category Undepreciated acquisition cost 31/12/ Investments in property refer to buildings not used for own purposes and which are held aiming to produce income through rent, as well as through property value increase. Rent income for the fiscal year ended on December 31, 2013, amounted to 1.725, compared to on December 31, The fair value of Group and Company s investment properties, is carries out in annual basis for years 2013 and 2012 from the independent company of valuers American Appraisal. The investment properties are categorized in Level 2 of the fair value. The investment property valuation took place depending on the local market conditions in which they belong and have been evaluated by one of the approach methods of market and annuity. The separation of plot values, curried out by the utilization method. The analysis of the Company property investments on December 31, 2013 and 2012 is outlined in the following tables. AGROTIKI INSURANCE S.A. 67

68 ANNUAL FINANCIAL REPORT NO CITY ADDRESS SQ.M. FAIR VALUE OF BUILDINGS FAIR VALUE OF LAND TOTAL PROPERTY VALUE TYPE OF FACILITY 1 Athens 163, Syggrou Ave floor building 2 Athens 173, Syggrou Ave Piraeus Bank branch & Building 1, (1st, 2nd, 3rd, 4th floor) and parking 3 Athens 1, Filellinon St Offices (4th - 5th floor) 4 Athens 2, Ermou St Offices (3rd floor) 5 Thessaloniki 1, Dimokratias Square & Monastiriou th floor -2nd basement 6 Iraklio 2, Giannitson St. (Kornarou Sq.) th floor 7 Kiato 24, Klisthenous St Ground floor-1st floor 8 Agrinio 10, Ilia Iliou St th floor Total NO CITY ADDRESS SQ.M. FAIR VALUE OF BUILDINGS FAIR VALUE OF LAND TOTAL PROPERTY VALUE TYPE OF FACILITY 1 Athens 163, Syggrou Ave floor building 2 Athens 173, Syggrou Ave Piraeus Bank branch & Building 1, (1st, 2nd, 3rd, 4th floor) and parking 3 Athens 1, Filellinon St Offices (4th - 5th floor) 4 Athens 2, Ermou St Offices (3rd floor) 5 Thessaloniki 1, Dimokratias Square & Monastiriou th floor -2nd basement 6 Iraklio 2, Giannitson St. (Kornarou Sq.) th floor 7 Kiato 24, Klisthenous St Ground floor-1st floor 8 Agrinio 10, Ilia Iliou St th floor Total AGROTIKI INSURANCE S.A.

69 3. ANNUAL FINANCIAL STATEMENTS 21. INTANGIBLE ASSETS DESCRIPTION Software Total The Company assets on December 31, 2013 and 2012 is outlined in the following table: DESCRIPTION Opening balance Acquisition cost Accrued depreciation and impairment (27.151) (26.918) Undepreciated acquisition cost 01/ Plus: Purchases Less: Fiscal year depreciation (344) (233) Undepreciated acquisition cost 31/ HOLDING IN ASSOCIATED COMPANIES 2013 NAME REGISTERED IN HOLDING % BOOK VALUE ΑΤΕ INSURANCE ROMANIA S.A. Romania 99,47% Holdings in Associated Companies NAME REGISTERED IN HOLDING % BOOK VALUE ΑΤΕ INSURANCE ROMANIA S.A. Romania 99,47% Holdings in Associated Companies ATE INSURANCE ROMANIA S.A. is consolidated by using the method of full consolidation. ATE INSURANCE ROMANIA S.A.reduced share capital amounted to on December 2013, which have not paid until December 31, AGROTIKI INSURANCE S.A. 69

70 ANNUAL FINANCIAL REPORT INVESTMENT SECURITIES HELD TO MATURITY DESCRIPTION BOOK VALUE BOOK VALUE BOOK VALUE BOOK VALUE 1. Greek Government Bonds (GGB) a) Fixed Rate Bonds (FXD) - Existing B) Zero Rate (EFSF) Total In June 2013, an EFSF bond expired with a value of 9,753 which had come as a result of the company's participation in the exchange program of Greek bonds (PSI) which was held in December The fair value of bonds on December 31, 2013 amounts to The different results come from the initial recognition of the GGB at fair value at the date of exchange, which reached the level of INVESTMENT SECURITIES AVAILABLE FOR SALE CLASSIFICATION BY SECURITY CATEGORY FAIR VALUE FAIR VALUE FAIR VALUE FAIR VALUE BONDS Government Bonds Domestic EFSF Foreign Bonds SHARES Listed Domestic Not Listed Domestic Shares MUTUAL FUND SHARES Mutual Funds Domestic Mutual Fund Shares Total During the fiscal year ended 2 EFSF bonds amounted to FINANCIAL ASSETS AT FAIR VALUE THROUGH RESULTS In this category are included domestic listed shares as well as a derivative resulting from the exchange of GGB (PSI). 70 AGROTIKI INSURANCE S.A.

71 3. ANNUAL FINANCIAL STATEMENTS 26. INVESTMENTS ON BEHALF OF POLICY HOLDERS (UNIT LINKED) DESCRIPTION Unit Linked Total The amount of consists of investments in Bonds, Mutual Funds and Fixed Deposits. The transactions table for Unit Linked investments is included in Note RECEIVABLES FROM LOANS DESCRIPTION Loans to personnel Loans to life insurance policyholders Total RECEIVABLES FROM PREMIUMS The receivables from premiums are receivables from insurance contracts which were issued by the date the current Financial Statements were compiled, but had not been collected. The balance of these receivables is as follows: DESCRIPTION Receivables from premiums owed Less: Provision for doubtful debts (13.161) (10.342) (13.161) (10.342) Total The time analysis of receivables from premiums is as follows: DESCRIPTION Not expired up to 6 months months to 1 year Over 1 year Total AGROTIKI INSURANCE S.A. 71

72 ANNUAL FINANCIAL REPORT RECEIVABLES FROM REINSURERS Receivables from reinsurers are related to their participation in outstanding claims and insurance reserves, for covering the reinsured risk. DESCRIPTION Receivables from reinsurers in outstanding claims Receivables from reinsurers in other insurance provisions Total COMMISIONS AND OTHER DEFERRED PRODUCTION COSTS DESCRIPTION Commissions and other deferred production expenses (DAC) Life Commissions and other deferred production expenses (DAC) Motor Liability Commissions and other deferred production expenses (DAC) Other Risks Total OTHER ASSETS DESCRIPTION Other accrued revenues falling due next year (interest) Other litigious receivables Receivables from reinsurers Other Provisions for impairment (2.341) (3.185) (2.341) (3.185) Total AGROTIKI INSURANCE S.A.

73 3. ANNUAL FINANCIAL STATEMENTS 32. DEFERRED TAX DESCRIPTION Intangible assets Property investments Benefits to staff Provisions employees litigations Provisions for doubtful debts Insurance provisions Bonds Total The main change on deffered tax of 2013 amounting to 13,511 resulted from the change of tax rate from 20% in 2012 to 26% in Recoverable tax claims within 12 months of 1,711. The balance receivable is recoverable over 12 months. The movement of deferred tax is as follows: DESCRIPTION Starting balance Impact on result (80) (64) Impact on Equity - (69) - (69) Closing balance The analysis of deferred tax that affect Operation Statement is as follows: DESCRIPTION Revaluation of tangible fixed assets 9 (44) 9 (44) Value adjustment of property Retirement and other post-employment benefits (60) (60) Provisions employees litigations Provisions for doubtful debts Insurance provisions (1.368) (372) (1.368) (372) Deferred tax for impairment bonds (1.317) (1.317) Deferred tax (64) (64) According to the Legislative Decree passed in February 2012, legal entities that participated in the exchange program of Greek Government Bonds are entitled to deduct the tax loss resulting from this exchange (debit difference, a difference between the acquisition cost of the old bonds and nominal value of the new bonds) during the life of the new bonds and regardless of the holding period. AGROTIKI INSURANCE S.A. 73

74 ANNUAL FINANCIAL REPORT CASH AND CASH EQUIVALENTS DESCRIPTION Cash Cash Demand deposits Time deposits at domestic financial institutions Time deposits in foreign currency Deposits Total The increase is mainly due to the increase of share capital held on March 8, 2013 amounting to 172,056 and to the mature of 2 EFSF bonds 36,235. The bulk cash is mainly located in Piraeus Bank. 34. LIABILITIES FROM INVESTMENT INSURANCE CONTRACTS DESCRIPTION Life insurance contracts connected to investments that have no insurance risk (Unit Linked) Financial contracts from Deposit Administration Funds (DAF) Total AGROTIKI INSURANCE S.A.

75 3. ANNUAL FINANCIAL STATEMENTS 35. INSURANCE PROVISIONS TOTAL SHARE REINSURER SHARE DESCRIPTION LIFE RESERVES Mathematical life insurance reserves Unearned life premium insurance provisions Provisions for participation in earnings and life insurance premium refunds Life Insurance Outstanding Claims Other insurance provisions Total life reserves MOTOR THIRD PARTY LIABILITY RESERVES Insurance provisions for unearned premiums Outstanding claims Other insurance provisions Total motor liability reserves OTHER RESERVES Insurance provisions for unearned premiums Outstanding claims Total non life reserves Financial contracts from Deposit Administration Contracts Provisions for life insurance premiums where the policyholder bears the risk (Unit Linked) Total liabilities from investment insurance contracts Total insurance provisions On December 31, 2013, the insurance provisions for ATE INSURANCE ROMANIA S.A. amounted to 110 (2012: 86) and therefore the Group s total retention amounted to and the total insurance provisions amounted to AGROTIKI INSURANCE S.A. 75

76 ANNUAL FINANCIAL REPORT 2013 INSURANCE RESERVE MOVEMENTS Movement of Mathematical Life reserves Opening Balance of insurance reserves Net premiums (1) Claims paid (2) (32.816) (35.904) (32.816) (35.904) Credited technical interest rate Other movements (3) (14.115) (5.904) (14.115) (5.904) Closing balance of insurance reserves (1) Net premiums are defined as the net annual premiums in existing contracts. (2) Includes maturities, surrenders, death. (3) Includes credits / reserves increases due to investment income, administration fee charges, acquisition costs, charges to cover deaths, differences between amounts for claims paid and reserves released, differences in reserves that were released due to cancellations and other changes in reserves. MOVEMENT OF UNIT LINKED INSURANCE RESERVES Opening balance of insurance reserves Additional liabilities and changes Reserve release due to deaths, maturities, surrenders, cancellations etc. (4.903) (3.153) (4.903) (3.153) Other movements (154) (154) Closing balance of insurance reserves MOVEMENT OF MOTOR LIABILITY INSURANCE RESERVES 2013 Outstanding Claims Incurred Claims Payouts 2012 (8.226) Payouts for previous fiscal years (26.412) IBNR Changes in outstanding claims for previous year (25.787) Closing balance of insurance reserves Outstanding Claims Incurred Claims Payouts 2011 (8.226) Payouts for previous fiscal years (24.810) IBNR Changes in outstanding claims for previous year (26.889) Closing balance of insurance reserves AGROTIKI INSURANCE S.A.

77 3. ANNUAL FINANCIAL STATEMENTS We note that in the outstanding claims liability of doctors, has included the provision of 75, which relates to losses that have been announced after the period of insurance policyholders but have been made during the period of insurance. The doctors have sued the Company claiming that the term claims made must be considered unlawful. In case of success of lawsuits, the amount of compensation cannot exceed the amount of the insured capital that amounts to 2,103. We consider that the lawsuits will not succeed. 36. RETIREMENT BENEFIT LIABILITIES DESCRIPTION Balance Sheet Liability Retirement benefits Total Liability Α. RETIREMENT BENEFITS DESCRIPTION 31/12/ /12/2012* 31/12/ /12/2012* Current Value of specific benefits Balance Sheet Liability Charge on results Service cost Impact of cutbacks / settlements / retirement benefits (220) (220) Interest / Expenses Total Charge Charge to equity Actuarial profit / (loss) (40) (344) (40) (344) Total Charge (40) (344) (40) (344) Charge for the year Opening balance Change in year (124) (124) Claims paid (8.793) (520) (8.793) (520) Total *Revised amounts according to the modified IAS 19 Benefits to employees. AGROTIKI INSURANCE S.A. 77

78 ANNUAL FINANCIAL REPORT 2013 The actuarial study is reviewed every year. The key assumptions / hypotheses underlying the actuarial study conducted for the current year are as follows: ACTUARIAL STUDY ASSUMPTIONS AND CONCESSIONS LAW Discount rate 3,46% 3,20% Percentage increase of future wages - pensions 1,75% 2,00% Expected average life of employees 13,03 13,57 The aforementioned staff benefits for 2013 were estimated by the company AON-Hewitt. The obligation of December 31, 2013 includes the amount of approximately 5.7 million that has been agreed to be paid to 41 employees who will retire during 2014, under the voluntary retirement program. 37. LIABILITIES TO REINSURERS DESCRIPTION Liabilities to reinsurers Total OTHER LIABILITIES DESCRIPTION Expenses payable and income for subsequent periods Creditors and suppliers Tax & duty liabilities (excluding income tax) Liabilities to the State and State controlled entities Liabilities to insurers, agents, sales consultants Total OTHER PROVISIONS DESCRIPTION Provision for employees litigations Total AGROTIKI INSURANCE S.A.

79 3. ANNUAL FINANCIAL STATEMENTS 40. SHARE CAPITAL DESCRIPTION Number of common shares Paid Capital Share Capital Share premium The share capital of the Company at December 31, 2013 amounts to divided into 27,787,473 shares with a nominal value of 1.50 each. On March 8, 2013 Piraeus Bank as the only Shareholder of the Company, proceeded to payment of under the share capital increase and part of this amount 703,7 paid for share capital increase when amount of transferred to reserve over premium. There were no changes during the current period. The Company throughout the period did not hold any own shares. 41. RESERVES DESCRIPTION Value adjustment reserve for securities available for sale Foreign Exchange differences due to conversion assets of foreign economic entities (1.603) (1.590) - - Total The statutory reserve that has been formed on December 31, 2013 amounted to 16,824 and it has been included to the retained earnings. Provisions formed from specially taxed income are not included in the explicitly specified reserves, as per Decision (Circ. No 1007/2014) of the Ministry of Finance, which are subject to a tax rate of 19% in accordance with the provision of article 72, of Law 4172/2013. Without further interpretation of the article 72, of Law 4172/2013, the Company cannot be driven to a decision relating to the taxation of these provisions. AGROTIKI INSURANCE S.A. 79

80 ANNUAL FINANCIAL REPORT SEGMENT REPORTING The Company is active in and monitors its activities in two key sectors: Life and Non-Life Insurance. Non-Life Insurance is divided into Motor Third Party Liability and Other Risks. The Company s General Management receives and inspects the relevant reports, which are prepared on an at least a quarterly basis by the Budget Department. SEGMENT REPORTING 2013 LIFE MOTOR LIABILITY OTHER RISKS TOTAL Gross Premiums Ceded Premiums (1.766) (1.262) (27.226) (30.255) Commissions paid (7.558) (8.345) (6.730) (22.634) Claims paid to policyholders (55.006) (33.191) (7.320) (95.517) Insurance provision charges Investment income Profit per operation Other income Operating expenses (10.567) (17.292) (20.174) (48.033) Profit before taxes LIFE MOTOR LIABILITY OTHER RISKS TOTAL Gross Premiums Ceded Premiums (957) (1.365) (27.556) (29.878) Commissions paid (6.313) (9.075) (4.982) (20.370) Claims paid to policyholders (54.862) (32.757) (12.645) ( ) Insurance provision charges Investment income Profit per operation Other income Operating expenses (7.624) (10.939) (14.586) (33.149) Profit before taxes AGROTIKI INSURANCE S.A.

81 3. ANNUAL FINANCIAL STATEMENTS OPERATING RESULTS 2013 LIFE MOTOR LIABILITY OTHER RISKS TOTAL Gross Premiums Ceded Premiums (1.766) (1.262) (27.016) (30.045) Commissions paid (7.558) (8.345) (6.770) (22.674) Claims paid to policyholders (55.006) (33.191) (7.175) (95.372) Insurance provision charges Investment income Profit per operation Other income Operating expenses (10.431) (17.069) (19.914) (47.415) Profit before taxes LIFE MOTOR LIABILITY OTHER RISKS TOTAL Gross Premiums Ceded Premiums (957) (1.365) (27.360) (29.682) Commissions paid (6.313) (9.075) (5.035) (20.423) Claims paid to policyholders (54.862) (32.757) (12.417) ( ) Insurance provision charges Investment income Profit per operation Other income Operating expenses (7.482) (10.735) (14.313) (32.530) Profit before taxes AGROTIKI INSURANCE S.A. 81

82 ANNUAL FINANCIAL REPORT TRANSACTIONS WITH ASSOCIATED COMPANIES The Company is controlled by the Piraeus Bank S.A., which holds 100% of its equity. For the Company, its parent company Piraeus Bank S.A., its subsidiaries, its associate companies and any other Piraeus Bank companies are all considered associated parties. The Company s transactions with the associated parties are as follows: 2013 DESCRIPTION RECEIVABLES LIABILITIES INCOME EXPENSES Α Piraeus Bank S.A (1.060) Β Other companies of Piraeus Bank Group 94 (4.761) (6.465) Total (4.761) (7.525) 2012 DESCRIPTION RECEIVABLES LIABILITIES INCOME EXPENSES Α Β ΑΤΕbank Piraeus Bank S.A (2.622) (3.755) Other companies of Piraeus Bank Group (1.950) 257 (1.899) Total (4.572) (5.654) All Company transactions with its subsidiaries have been omitted and are not included in the statement above DESCRIPTION RECEIVABLES LIABILITIES INCOME EXPENSES Α Piraeus Bank S.A (1.060) Β C Other companies of ΑΤΕbank Group Agrotiki Insurance S.A. Consolidated Companies ATE Insurance Romania S.A. 94 (4.761) (6.465) (10) Total (4.761) (7.535) 2012 DESCRIPTION RECEIVABLES LIABILITIES INCOME EXPENSES Α Β C ΑΤΕbank Piraeus Bank S.A. Other companies of ΑΤΕbank Group Agrotiki Insurance S.A. Consolidated Companies ATE Insurance Romania S.A (2.622) (3.755) (1.950) 257 (1.899) (5) Total (4.572) (5.659) 82 AGROTIKI INSURANCE S.A.

83 3. ANNUAL FINANCIAL STATEMENTS Transactions with BoD members and management executives from the beginning of the accounting period are outlined below: TRANSACTIONS WITH MEMBERS OF BOARD AND MANAGEMENT EXECUTIVES DESCRIPTION Remuneration for executives and members of Management Other expenses from executives and members of Management AUDITOR REMUNERATIONS (Ν.3756/2009) DESCRIPTION Annual Audit Remunerations for related audits MINIMUM CAPITAL REQUIREMENT AND SOLVENCY LEVEL The Minimum Capital Requirement (MCR) and the Solvency Level were calculated in accordance with the insurance legislation in force. DESCRIPTION Minimum Capital Requirement (MCR) Required Solvency Margin (RSM) Available Solvency Margin (ASM) (74.539) (74.539) Total Equity ( ) ( ) The Required Solvency Margin (R.S.M.) for December 31, 2013 amounted to 32,9 million. The Company meets the Required Solvency Margin, with the Available Solvency Margin (A.S.M.), as it has been calculated and sent to the Supervisory Authority, amounting to 74,7 million on December 31, AGROTIKI INSURANCE S.A. 83

84 ANNUAL FINANCIAL REPORT GUARANTEE FUNDS The Company has blocked the following assets as guarantee funds DESCRIPTION OTHER RISKS MOTOR LIABILITY LIFE UNIT LINKED DAF TOTAL Property Investments Receivables Reinsurer Share Deferred acquisition costs Secured loans Accrued interest Cash and cash equivalents Total DESCRIPTION OTHER RISKS MOTOR LIABILITY LIFE UNIT LINKED DAF TOTAL Property Investments Receivables Reinsurer Share Deferred acquisition costs Secured loans Accrued interest Cash and cash equivalents Total AGROTIKI INSURANCE S.A.

85 3. ANNUAL FINANCIAL STATEMENTS 47. ADJUSTMENTS FINANCIAL STATEMENT POSITION DECEMBER 31, 2012 ADJUSTED AMOUNTS REPORTED RECLASSIFICATION AMOUNTS Deferred tax assets (34) Providers liabilities after retirement (4.089) (4.259) 170 Retained earnings (136) Total ADJUSTED AMOUNTS REPORTED RECLASSIFICATION AMOUNTS Deferred tax assets (34) Providers liabilities after retirement (4.089) (4.259) 170 Retained earnings (136) Total CONTIGENT LIABILITIES AND RELATED EVENTS COURT CASES The Company is involved (either as a defendant or as a prosecutor) in various court cases and arbitration procedures within the context of its normal operations. The Company s Management and the Legal Department estimate that all pending cases will be resolved without any material effect on the Company s financial position or its operating results. (See also note 35). GUARANTEES On December 31, 2013 the Company had guarantee letters for good execution amounting to and concerning participation in tenders for providing new insurance contracts to various companies. 49. EVENTS AFTER THE END OF THE REPORTING PERIOD There are no other significant events, relating to the Company after the balance sheet date. AGROTIKI INSURANCE S.A. 85

86 DATA AND INFORMATION FOR THE PERIOD 4. FROM 01/01 TO 31/12/2013 AGROTIKI INSURANCE S.A. REGISTRATION NO.: 12821/05/ /86/1 REGISTERED IN: 173 SYGGROU AVE NEA SMYRNI DATE AND INFORMATION FOR THE FISCAL YEAR FROM JANUARY 1, 2013 TO DECEMBER 31, 2013 (Published pursuant Codified Law 2190/20, Article 135 for companies that compile their annual financial statements, consolidated ans separate, in accordance with the IFRS) The following data and information arising from the annual separate and consolidated financial information on December 31, 2013, aim at providing a general overview on the financial situation and results of AGROTIKI INSURANCE S.A. (the Company ). It is therefore recommended that readers refer to the Company s website, where all the financial statements as well as the certified auditor's report are posted, before manking any investment decisions or engaging in transactions with the Company. DETAILS Company registered address: 173 Syggrou Avenue, Nea Smyrni Registration no. of incorporated companies: 12821/05/ /86/1 Competent authority: Bank of Greece Board of Directors: Chairman: S. Papaspyrou, Vice-Chairman:. Lyssimachou, CEO: I. Chadjiossif Members: P. Alexakis, I. Rokas, S. Psarakis Date the BoD approved the annual financial statements (from which the data and information were extracted): Certified auditor: Sourmbis Dimitrios (S.O.E.L. Reg. No ) Auditing Company: PwC S.A. Type of auditors' auditing report: Unqualified opinion Company website: BALANCE SHEET Amounts in thousands of Amounts in thousands of INCOME STATEMENT ASSETS Owner-occupied tangible fixed assets 27,777 35,324 27,745 35,286 Gross written premiums and related income 170, , , ,679 Investment property 20,172 21,264 20,172 21,264 Minus: Ceded premiums -30,255-29,878-30,045-29,682 Intangible assets Minus: commissions paid and production costs -22,634-20,370-22,674-20,423 Financial assets at fair value through results 9,569 5,058 9,569 5,058 Minus: insurance claims - Retention -95, ,265-95, ,037 Financial instruments available for sale 90, ,471 90, ,472 Changes in mathematical and other provisions - Retention 48,750 24,255 48,677 24,075 Investment securities held to maturity 20,373 30,550 20,373 30,550 Net income of insurance investments 6,141 7,515 5,835 7,016 Investmnets in holding interest and associated companies - - 6,084 8,272 Receivables from premiums 44,350 42,097 44,286 41,989 Insurance profit 76,877 61,308 76,508 60,628 Receivables from reinsurance activities 38,371 41,071 38,369 41,069 Other assets 382, , , ,306 Other Income 2,677 3,774 2,639 3,769 TOTAL ASSETS 634, , , ,132 Operating expenses -48,033-33,149-47,415-32,530 LIABILITIES AND EQUITY Profit before taxes 31,522 31,933 31,732 31,867 Liabilities from reinsurance activities 13,982 13,162 13,965 13,071 Provisions / Other liabilities 50,773 38,554 50,672 38,457 Profit after taxes (A) 39,331 26,536 39,543 26,473 Total liabilities (a) 64,755 51,716 64,637 51,528 -Parent company shareholders 39,332 26,536 39,543 26,473 Mathematical life insurance provisions 175, , , ,694 -Minority interest Insurance provisions for outstanding claims 239, , , ,323 Unearned premiums 56,199 60,482 56,199 60,482 Other comprehensive income after taxes (B) 8,903 6,589 8,917 6,806 Liabilities from investment insurance contracts 28,557 28,980 28,557 28,980 Other insurance provisions 2,528 2,706 2,528 2,706 Total comprehensive income after taxes (A) + (B) 48,234 33,125 48,460 33,279 Total insurance provisions (b) 502, , , ,185 -Parent company shareholders 48,235 33,124 48,460 33,279 Share Capital 41,681 40,978 41,681 40,978 -Minority interest Other equity 26, ,220 28, ,559 Total parent company shareholder equity (c) 68, ,242 69, ,581 Profit after taxes per share Basic (in ) Minority interest (d) Total equity (e)=(c)+(d) 68, ,207 69, ,581 Proposed divident TOTAL LIABILITIES & EQUITY (a)+(b)+(e) 634, , , , AGROTIKI INSURANCE S.A.

87 4. DATA AND INFORMATION FOR THE PERIOD FROM 01/01 TO 31/12/2013 CHANGES IN EQUITY STATEMENT CASH FLOW STATEMENT Amounts in thousands of Amounts in thousands of Total equity at the beginning of the year ( and , , , ,720 Total cash inflow / (outflow) from operating activities (a) 31,778-17,011 32,029-17,032 respectively) Total cash inflow / (outflow) from investment activities (b) Effect of amended IAS Total cash inflow / (outflow) from financial activities (c) 172, , Total equity at beginning of period (restated) -185, ,860 Share Capital increase 172, ,056 Net increase / (decrease) in cash and cash equivalents for the period (a)+(b)+(c) Total comprehensive income after taxes (continuing and 203,410-16, ,670-16,411 discontinued activities) 48,234 33,125 48,460 33,279 Effect of exchange rate fluctuations on cash and cash equivalents Changes in minority interest Total cash inflow / (outflow) for the period 203,396-16, ,670-16,411 Total equity at the end of the year ( and respectively) Cash and cash equivalents at the beginning of the period 74,478 91,042 67,795 84,206 68, ,207 69, ,581 Cash and cash equivalents at the end of the period 277,874 74, ,464 67,795 ADDITIONAL DATA AND INFORMATION 1.The accounting principles that the Company has adopted in accordance with the International Financial Reporting Standards (IFRS) have been applied, as presented in detail on The Company has fulfilled-statutory obligations to quarantee funds and solvency margin by For quarantee funds liabilities amounted to Euro million and total assets blocked to Euro million (letter to the Bank of Greece No. prot.167/ ). Commentary on the calculation of the solvency margin is in Note 45 to the Financial Statements. 3. The Company has been audited by the tax authorities for the 2007 fiscal year. With regard to the Group's open fiscal years, there is a mention in Note 1 of the annual separate and consolidated financial statements. 4. The provision amounts for each of the following cases are: a) For open fiscal years, 600,000 for the Group and 600,000 for the Company. b) For litigious receivables and doubtful debts, 15,502 for the Group and 15,502 for the Company. c) For other provisions with regard to the staff retirement benefits, 7,376 for the Group and 7,376 for the Company. d) For third-party claims, including workers litigation against the Company, the amount of 4, The Group companies included in the annual separate and consolidated statements, their respective addresses and holding percentages, as well as their consolidation method are presented in detail in Note 22 of the separate and consolidated financial statements. 6. The amounts of income and expenses for the Group and the Company from to , as well as the balances of receivables and liabilities on which arose from transactions with related parties and members of the management, as defined in IAS 24, are as follows: (Amounts in thousands of ) Income 18,103 18,144 Expenses 7,525 7,535 Receivables 269, ,342 Liabilities 4,761 4,761 Transactions with and remunerations to executives and managers Receivables from executives and managers Liabilities to executives and managers The Group's and Company's other comprehensive income after taxes is outlined below (in thousands of ): Profit/(Loss) from valuation/sale of securities available for sale and held to maturity 8,877 6,531 8,877 6,531 Actuarial Net Profit net from taxes Exchange rate differences Other comprehensive income after taxes 8,903 6,589 8,917 6, On and , the number of employees for Company was 191 and 260 respectively. Moreover, on and , the number of employees for Group was 207 and 276 respectively. 9. There are no encumbrances on the Company s fixed assets. 10. There are no disputes sub judice or in arbitration that might have a considerable impact on the Company s financial position or operation. 11. The financial statements of the Company and the aforementioned subsidiaries are also included in the consolidated financial statements of the Group "PIRAEUS BANK S.A." which is registered in Greece and had a 100% holding percentage in the Company. 12. The Company and its subsidiaries do not hold any own shares. 13. The amounts of the comparison year 2012 have been restated where necessary in accordance with the provisions of the revised IAS 19 "Employee Benefits" (Notes 36 and 47 of the financial statements). 14. The Company has reclassified funds of the Financial Statement of the fiscal year 2012, so as to become comparable with those of the current year (More on the financial statements). 15. On March 24th, 2014, the Board of Directors, which has replaced the resigned member and B-Vice President Constantinos Philippou, elected Mr. Stephanos Psarrakis as a new member. (Minutes: Board of Directors 558/ ). Nea Smyrni, 15 April 2014 THE CHAIRMAN OF THE BoD THE MANAGING DIRECTOR THE CHIEF FINANCIAL OFFICER THE CHIEF ACCOUNTANT THE ACTUARY SPYRIDON PAPASPYROU (ID No: ) IORDANIS CHADJIOSSIF (ID No: ) EVANGELOS K. ARCHONTOULIS (LICENCE No: CLASS ') ANTONIOS D. GOGONIS (LICENCE No: 5232 CLASS ') GEORGIOS D. KRAVVARITIS (ID No: A ) AGROTIKI INSURANCE S.A. 87

88 Design-Production Τel.: