The interest rate risk, the Group is exposed to, results from bank loans, borrowings, debt securities and bank deposits. The Group tends to apply variable interest correlated with market (interbank) rates. At the same time, the Group monitores on an ongoing basis the market interest rates and remain prepared to take action to hedge the risk when indicators to do this occure.
Due to the applied by the Group model of financing, interest rate risk is identified and managed (quantified, hedged) at the level of the Parent company.
The table below, presents financial assets and liabilities by fixed and variable interest rates, showing the Group’s sensitivity to interest rate risk
The table below, presents financial assets and liabilities by fixed and variable interest rates, showing the Group’s sensitivity to interest rate risk:
| 31.12.2014 | 31.12.2013 | |
|---|---|---|
| Fixed rate instruments | ||
| Financial assets | 1 672 984 | 1 299 507 |
| Financial liabilities | (990 825) | (1 033 604) |
| Total | 682 159 | 265 903 |
| Variable rate instruments | ||
| Financial assets | 1 183 632 | 1 854 284 |
| Financial liabilities | (2 121 224) | (847 645) |
| Total | (937 592) | 1 006 639 |
| 31.12.2014 | 31.12.2013 | |||
|---|---|---|---|---|
| Effective interest rate (%) | Carrying amount | Effective interest rate (%) | Carrying amount | |
| Financial instruments held to maturity | 3.75 | 189 789 | - | - |
| Financial assets measured at fair value through profit or loss | 4.68 | 392 350 | 3.61 | 298 199 |
| Cash and cash equivalents | 2.45 | 601 493 | 2.90 | 1 556 085 |
| Finance lease liabilities | 4.31 | (2 566) | 6.83 | (4 724) |
| Bank loans | 2.97 | (977 827) | 3.33 | (814 136) |
| Borrowings | 3.33 | (35 870) | 4.34 | (28 421) |
| Bonds | 4.00 | (1 104 961) | - | - |
| Total | (937 592) | 1 007 003 |
The effective interest rates presented in the table above are determined as the weighted average of interest rates.
The table below presents the impact of interest rate changes on the Group’s net profit.
| Carrying amount as at 31.12.2014 |
Interest rate risk impact on profit (12-month period) | Carrying amount as at 31. 12.2013 |
Interest rate risk impact on profit (12-month period) | |||
|---|---|---|---|---|---|---|
| + 1 p.p. | - 1 p. p. | + 1 p.p. | - 1 p.p. | |||
| Financial assets | ||||||
| Cash | 601 493 | 6 015 | (6 015) | 1 556 085 | 15 561 | (15 561) |
| Financial assets held to maturity | 189 789 | 1 898 | (1 898) | 45 | - | - |
| Financial assets measured at fair value through profit or loss | 392 350 | 3 924 | (3 924) | 298 199 | 2 982 | (2 982) |
| Impact on profit/loss before tax | 11 837 | (11 837) | 18 543 | (18 543) | ||
| 19% tax | (2 249) | 2 249 | (3 523) | 3 523 | ||
| Impact on profit/loss after tax | 9 588 | (9 588) | 15 020 | (15 020) | ||
| Financial liabilities | ||||||
| Bank loans, borrowings and debt securities | (2 118 658) | (21 187) | 21 187 | (842 557) | (8 426) | 8 426 |
| Finance lease liabilities | (2 566) | (26) | 26 | (4 724) | (47) | 47 |
| Financial liabilities measured at fair value through profit or loss | - | - | - | (364) | (4) | 4 |
| Impact on profit/loss before tax | (21 213) | 21 213 | (8 477) | 8 477 | ||
| 19% tax | 4 030 | (4 030) | 1 611 | (1 611) | ||
| Impact on profit/loss after tax | (17 183) | 17 183 | (6 866) | 6 866 | ||
| Total | (7 595) | 7 595 | 8 154 | (8 154) | ||