Annual Report • Jul 19, 2018
Annual Report
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INTRACOM HOLDINGS SA
Annual Report for the year 2017 (1 January – 31 December 2017) in accordance with Law 3556/2007
The attached annual financial statements of the Group and the Company were approved for issue by the Board of Directors on 27 March 2018 and have been published on www.intracom.com.
D. C. KLONIS ID No. ΑΚ 121708 / 07.10.2011
G. AR. ANNINOS ID No ΑΚ 760212/28.08.2013
THE CHIEF ACCOUNTANT
SP. B. PETRAKOS ID No Π 056768/28.01.1993 A' Class Licence No 25195
(pursuant to article 4 par. 2 of Law 3556/2007)
state that in our above mentioned capacity we declare that:
As far as we know:
a. the accompanying financial statements of "INTRACOM HOLDINGS SA" for the year 01/01/2017 to 31/12/2017 which were drawn up in accordance with applicable accounting standards, reflect in a true manner the assets and liabilities, equity and results of the Company and of the undertakings included in consolidation, taken as a whole, and
b. the annual report of the Board of Directors is a true representation of the progress, the performance and the financial position of the Company and of the undertakings included in the consolidation, taken as whole, including a description of the major risks and uncertainties they confront.
D. C. KLONIS ID No ΑΚ 121708/07.10.2011
G. AR. ANNINOS ID No ΑΚ 760212/28.08.2013
THE MEMBER OF THE BOD
S. N. FILOS ID No ΑΑ 016774 / 28.01.2005
(Prepared in accordance with the provisions of Codified Law 2190/1920 and Law 3556/2007)
The business activity of companies in the Group during 2017 can be summarised as follows:
In March 2017 INTRAKAT Group signed two exceptionally important contracts with Fraport Greece, with a total budget of € 357 mn, to prepare designs and carry out construction work on 14 regional airports which Fraport Greece has undertaken to run, upgrade and maintain for a period of 40 years. The first contract relates to 7 airports on Crete, mainland Greece and the Ionian islands, while the second relates to 7 airports in the Aegean. The contracts between Fraport Greece and Intrakat include refurbishing and upgrading existing infrastructure at airports, and the design and construction of extensions.
In March, INTRAKAT also signed a contract with the Municipality of Thessaloniki to provide services to implement and run the controlled parking system in Municipal Communities A, C and E of the Municipality of Thessaloniki, worth € 17.3 mn. INTRAKAT has a 95% stake in that project, while its affiliate INTRASOFT International has a 5% stake. The project entails installing and running a controlled parking system in specific areas in the Municipality of Thessaloniki using ICTs, to provide improved services to visitors and residents of the project implementation area, and to cope with heightened demand for parking. The project will run for 5 years.
During the course of the year, construction work to build the Prefecture of Serres Waste Treatment Plant - Phase B.II commenced. The project budget is € 25.4 mn and it will run for 25 years. The project is expected to be completed and operational in 2019. The project is being implemented with the support of the Greek State, the Regional Association of Solid Waste Management Agencies of Central Macedonia (FODSA) and the special purpose vehicle comprised of the companies INTRAKAT, Archiridon and Envitec, and covers the design, financing, construction, maintenance and running of infrastructure.
In July, INTRAKAT signed a contract for the project to build the Pref. of Viotia 2nd municipal unit waste treatment plant covering the Municipalities of Thiva, Aliartos and Tanagra. The project's total budget is € 16.3 mn and around 18 months will be needed to complete construction.
A contract was signed in October by INTRAKAT and the Army Share Fund to lease a 3-storey listed building in the heart of Athens for 20 years to convert it into a 45-room boutique hotel, which will commence business in 2019.
Acknowledging innovation as a driving force for its competitiveness and success, INTRASOFT International made 2017 the "Υear of Ιnnovation" for the company and took a series of initiatives and measures internationally. It supported a well-recognised competition for start-ups in the technology sector, to promote innovative activities domestically, organised an innovation competition for all its subsidiaries and branches and actively supported the MITEF Greece Start-up Competition 2017, by developing a specially designed plan to offer services, know-how and market networking to one of the 10 finalists in the competition.
In January, INTRASOFT International was chosen by the Emirate of Kuwait's Ministry of Finance to develop its Debt management and payments IT system and to develop the Ministry's central public revenues collection system. The contract is for 2 years. INTRASOFT will lead the project, working in close quarters with 2 strategic partners: Counselor's Consulting Company Kuwait and KPMG.
VALEU Consulting was also set up in January in Brussels, with the assistance of INTRASOFT International and Planet S.A. The new company hopes to provide the European Union's institutions and agencies with high added value consultancy services, by specialising in preparing strategy, policymaking and impact assessment studies, and to support and evaluate project implementation.
In February, INTRASOFT International announced: a) completion of works to install the Profits System at Uganda's Centenary Bank, which is another milestone in INTRASOFT's expansion into the African market, b) Successful implementation of Piraeus Bank's customer loyalty scheme "Yellow", which offers benefits to both bank customers and associates via a range of channels (POS, Web Banking and Mobile Banking).
In April 2017, INTRASOFT International signed a new contract with the European Commission's DG Taxation and Customs Union (DG TAXUD) which includes trans-European management and coordination of IT Systems (ITSM3 – TES). The project will run for 8 years up to 2025.
In September, INTRASOFT International announced that the European Union's publication service had re-assigned the CORDIS project, which is the European Commission's key hub and a critically important portal for disseminating information about research projects financed by the EU, and their results in the wider sense.
In September, it also joined forces with the Israeli company Kando to provide solutions to EYDAP to result water pollution from industrial sources.
In October, INTRASOFT International delivered a project to the Danish Ministry of Taxation. The contract is part of a 5-year long programme of reforms, designed to replace the Ministry's current revenue collection system.
Following an international tender procedure in which companies from 10 countries in the programme joint venture took part, IDE (INTRACOM Defense Electronics) undertook to design and develop electronic modules for the improved Block 2 version of the ESSM surface to air missile. The agreement is for USD 5.6 mn.
In February IDE signed a contract worth € 2 mn with Kraus-Maffei Wegmann (KMW) to supply WiSPR intercom systems to fit out Boxer armoured vehicles for the international market. The WiSPR systems are expected to be delivered within 24 months.
In July IDE signed: a) a contract worth € 1.2 mn with Rheinmetall MAN Military Vehicles to supply WiSPR intercom systems to fit out Boxer armoured vehicles for the international market. b) a framework agreement for 3 + 2 years with NSPA (NATO Support and Procurement Agency) under which IDE will provide Depot Level Maintenance (DLM), support, necessary modifications, spare parts and repair materials as well as other related services to support ground equipment arrays for Patriot air defence systems
In July, IDE also launched its new innovative product, Hybrid GENAIRCON, offering an integrated solution for military vehicles, which incorporates a hybrid auxiliary power unit, a cutting-edge power storage system and a vehicle A/C control system, operated from a cutting-edge tech central control panel. Launch of the product coincides with the first contract signed by IDE and BAE Systems under which IDE will complete the Hybrid GENAIRCON in M109 self-propelled howitzers for the Greek Armed Forces, a project expected to be completed during 2017.
In 2017 INTRAKAT increased its share capital. After the increase was completed (in the period from 20.10.2017 to 3.11.2017), the total amount raised was € 10,159,052, and less issue expenses of € 228,773.82, the net figure was € 9,930,278.18.
The Company's share capital was increased by € 7,619,289 by issuing 25,397,630 new ordinary registered shares with a nominal value of € 0.30 each, and € 2,539,763 was credited to the premium on capital stock account. Thus, the share capital of the company stood at € 9,143,146.80 and is divided into 30,477,156 ordinary registered shares with nominal value of € 0.30 each. Our holding stood at 79.56%.
Finally, in January 2018 we were notified about Hellenic Supreme Court Judgment No. 1852/2017 which rejected the application for cassation filed by the main shareholders of TELEDOME S.A. against Athens Court of Appeal Judgment No. 224/2016 which had vindicated the Company. The Hellenic Supreme Court Judgment is non-appealable.
INTRACOM HOLDINGS Group's consolidated sales for 2017 stood at € 397.1 mn compared to € 401.6 mn in 2016.
NTRASOFT International Group, with sales of € 173 mn, reported slight decrease in comparison to 2016 (-1.4%) and accounted for 44% of consolidated sales. It was followed by INTRAKAT Group with consolidated turnover of € 160.3 mn, accounting for 41% of consolidated sales. The 12% drop in INTRAKAT Group's consolidated sales compared to 2016 was due to delays in the commencement of new major projects whose contracts were signed in 2017. Finally, IDE's sales of € 66 mn were up by 14.7%.
The Group's operating profit (EBITDA) for 2017 stood at € 29.3 mn (EBITDA in 2016: € 27.8 mn). Note that the consolidated results include a -€1.0 mn loss of EBITDA from Global Net Solutions, a subsidiary of INTRASOFT International which is currently in liquidation. Excluding the impact of Global Net Solutions, Group EBITDA stood at € 30.3 mn. Excluding that impact, INTRASOFT International Group's sales and EBITDA stood at € 171.6 mn and € 11.4 mn respectively.
The Group's consolidated EBT stood at € 4.2 mn (EBT in 2016: € 2.1 mn). Earnings after tax were losses of -€ 1.1 mn, which were significantly better than in 2016 (EAT in 2016: -€ 3.9 mn). However, Earnings After Tax and Minority Interests (EATAM) stood at € 0.9 mn compared to losses of -€ 2.3 mn in 2016.
Group total equity stood at € 270.3 mn compared to € 272.2 mn as at 31.12.2016. Parent company equity stood at € 268.6 mn.
Group total assets stood at € 789.5 mn compared to € 728.6 mn on 31.12.2016, up € 61 mn, while Company total assets stood at € 335.7 mn compared to € 309.3 mn on 31.12.2016.
Group total borrowing on 31.12.2017 stood at € 243.5 mn. Net borrowing stood at € 95.3 mn compared to € 70 mn on 31.12.2016. This rise financed the increase in assets.
The financial indicators which reflect the Group and Company's financial position are presented in diagram form below:
| 31/12/2017 | 31/12/2016 | 31/12/2017 | 31/12/2016 | |
|---|---|---|---|---|
| Financial Structure ratios | ||||
| Current assets/Total assets | 58,5% | 61,5% | 28,6% | 29,1% |
| Equity/Total liabilities | 52,1% | 59,6% | 400,5% | 655,7% |
| Equity/Fixed assets | 116,0% | 121,2% | 444,7% | 434,1% |
| Current assets/Short-term liabilities | 123,8% | 119,6% | 164,1% | 281,2% |
| 31/12/2017 | 31/12/2016 | 31/12/2017 | 31/12/2016 | |
| Profitability ratios | ||||
| EBITDA/Sales | 7,4% | 8,0% | 53,9% | 39,3% |
| Gross profit/Sales | 18,4% | 17,4% | 14,3% | 12,7% |
| EBT/Sales | 1,0% | 0,2% | -0,4% | -77,1% |
The markets in which the Group operates via its companies are :
INTRAKAT'S strategic focus has traditionally been on investing in infrastructure. Since the need for investments in infrastructure is a given and well-recognised, coupled with assistance from the EU and its financing tools, it is considered that in the years to come major projects will be put out to tender in sectors the company specialises in. We believe that the INTRAKAT Group will play a primary role in shaping the new infrastructure landscape.
The INTRADEVELOPMENT Group seeks to develop tourist and residential infrastructure for development and sale as turnkey products. It is important to note that in partnership with an international strategic investor specialised in real estate, and in particular in the development and running of hotels, the Group is implementing an investment plan to develop a 5 star hotel resort on around 10 hectares of land it owns on Mykonos. Construction is expected to be completed and the hotel operational in 2020.
In the energy sector, the company's strategy includes developing wind and hybrid RES infrastructure. The company runs a 21MW wind farm in Viotia and has already obtained permits to extend it by 12MW. Construction on the extension is expected to commence at the end of 2018 Q3.
In addition to its robust ties with EU institutions which foster trust in its name, INTRASOFT is also closely monitoring developments in the technology market and is ready to pursue a major share of investments in digital technology. The company is also expanding its product base, as it prepares to capitalise on the start-up ecosystem which has emerged in Greece in recent years. Via the VC ecosystem the company seeks to invest in the fintech, smart metering and data analytics sectors.
Thanks to focused R&D, IDE has forecast correctly and invested at the right time in the rapidly developing fields of border security and hybrid power systems, meaning it has won a major share of the market in Greece, as well as in Africa, the Middle East and SE Asia.
To enable the Group to better respond to constantly changing conditions in the extensive range of markets in which it operates, particular emphasis is being placed on generating synergies between subsidiaries and to adapting structures to modern business conditions, with the overall goal of maximising value.
INTRACOM S.A., being a Greek multinational company, is exposed to a variety of financial risks, including market risk (the effects of changes in foreign currency exchange rates, cash flow and fair value risk from changes in interest rates and market prices), credit risk and liquidity risk. The Group's overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the Group as a whole.
The financial liabilities of the Group include short-term bank loans, long-term bank loans, bond loans and finance lease agreements, through which the Group finances its working capital, capital expenditure needs and new projects. Moreover, the Group manages financial assets, mainly shortterm bank deposits arising from operating activities
Derivative financial instruments are used exclusively for the hedging of interest or exchange rate risk, since according to the approved policy, speculative use is not permitted.
In summary, the financial risks that arise are analyzed below.
The foreign exchange risk of the Group is limited, since for most of the foreign currency receivables, there are corresponding payables in the same currency. Almost all foreign currency contracts for both assets and liabilities are denominated in USD.
As a rule, physical hedging of exchange rate risk is used. In cases where natural hedge is not adequate due to large amounts of foreign currency payables the possibility of using currency risk hedging instruments through appropriate banking products or the use of equivalent foreign exchange borrowing is considered.
The Group's policy is to maintain a minimum amount of cash in foreign currency, to meet shortterm liabilities in that currency.
The Group has limited exposure to changes in the prices of the shares held either for trading or as available for sale financial assets.
Interest rate risk has been hedged partly by converting a significant part of the borrowings from fixed to floating rate taking advantage of the negative Euribor rates. Weighted average interest rate for the period 2017 ranged at the same levels of 2016. The Group assesses that during the current year, interest rate risk is limited since it is expected that interest rates will remain stable and if we achieve a more stable financial environment in Greece, we expect a further decrease.
The sales transactions of the Group are made to private companies and public sector organisations with an appropriate credit history, with which in many cases there is a long standing relationship. In any case, however, and given the conditions of the Greek market, the Group companies closely monitor all customer claims and, where appropriate, take immediate judicial and extrajudicial steps to ensure the recovery of claims, thus minimizing any credit risk. As a result, the risk of doubtful debts is considered limited.
Regarding credit risk related to cash deposits, the Group collaborates with financial institutions of high credit rating.
Each subsidiary draws up and monitors on a monthly basis a cash flow schedule that includes the operating as well as the investing cash flows. All subsidiaries submit to Intracom Holdings on a weekly basis a detailed report of their cash and credit position, in order that an effective monitoring and co-ordination on a group level is achieved.
Prudent liquidity management is achieved by an appropriate combination of cash and cash equivalents and approved bank facilities. The Group manages the risks that may arise from lack of adequate liquidity by ensuring there are always approved bank facilities for use. The available undrawn borrowing facilities to the Group, are sufficient to address any potential shortfall in cash.
On 31 December 2017 the Short Term Credit Facility of the Group increased to 56% from 66% in 2016 and the Long Term Credit Facility increased to 44% from 38% in 2016.
With regard to the imposition of capital controls in Greece, the Group's international activity and extroversion, enhance the successful response to adverse conditions and preserve the continuity of its activity.
Through its international investments and strategic partnerships, aims to establish a leading position in the emerging markets of the broader geographic region, which includes Central and Southeast Europe, the Middle East and countries of the Eastern Mediterranean Sea and North Africa. Innovation, excellence in service, leadership in technology, investment in knowledge and the constant pursuit of opportunities for expansion constitute the pillars of company's quest to lead.
Intracom Holdings is committed to conducting its business with high standards of corporate governance, high level of transparency and corporate responsibility, absolute respect for the environment, high level of integrity in safeguarding quality, ensuring optimum working conditions and awareness on issues related to the society as a whole.
In its effort to satisfy its major stakeholders (customers, shareholders, employees), Intracom Holdings has in operation an Integrated Management System, consisting of a Quality Management System, which assures faithful adherence to the above-mentioned principles and compliance with all ISO 9001:2008.
A key asset and a major competitive advantage, for INTRACOM HOLDINGS Group is our highly skilled and strongly motivated workforce that has consistently played a leading role in the company's sustained growth and development. Special emphasis is placed on the selection, training and evaluation procedures. The Group's policy is to attract high-level staff, to create a safe and fair work environment, to establish objective evaluation criteria with the simultaneous development of employees. It offers satisfactory wages and benefits as well as additional hospital and outpatient coverage for all employees..
As at 31.12.2017 the Group had 2.565 employees (2.343 employees in 2016) and the company 15 employees (16 in 2016). Scientific staff stands at 66% of total employees.
Group Companies have always invested heavily in R+D, as much in new innovative products as in the deployment of integrated turn-key solutions. R+D Divisions employ high skilled scientific personnel in telecommunications, engineering and IT.
For almost 40 years, innovation has been at the heart of Intracom's growth model supported by substantial investments in proprietary R&D and new product development, as well as extensive cooperation with higher learning institutions and local research teams.
Our companies have accumulated a wealth of experience in research and innovation management, empowering them to drive sustainable growth, transform our value chain and capitalize on new market opportunities by using innovative technologies to develop highly intelligent environments in key areas from industry and banking to learning and health.
Through strategic partnerships with leading global innovators in diverse fields ranging from IT and electronics to groundbreaking green technologies, we are enhancing our product and services offerings, leveraging our vast experience in technology integration and proven capabilities in service outsourcing.
Moreover, we are actively involved in the development of innovation networks, such as the European Enterprise Network (EEN), and consistently support the broader interconnection of industries with innovation clusters and other recognized centers of excellence.
Intracom Holdings Group places emphasis on the commitment to environmental responsibility. This principle is also confirmed by the fact that the Group, since its first years of operation, has shown a particular social sensitivity, undertaking initiatives to make a real contribution to the protection of the environment.
It is common belief that high technology companies play an important role in protecting ecosystems as they offer a viable alternative to the physical transport process. Intracom Holdings Group is committed to maintaining an environmentally sensitive and accountable position and managing its activities accordingly by applying preventive measures to protect the environment and minimizing any negative environmental impacts that may arise.
To this end, Group companies have developed and implemented Environmental Management Systems (EMS) which provide a well-structured approach to environmental issues and ensure the continuous improvement of environmental performance through the introduction of specific environmental objectives and the documentation and monitoring of programs pursuing To achieve these objectives. In this context, they have defined and documented the methods for identifying and evaluating all environmental issues arising from the activities they develop and the related environmental impacts. The evaluation is based on predefined criteria, including the applicable legislative and other regulatory requirements. Continuous information on developments and future trends in national and EU environmental legislation is achieved through access to legal data bases.
• Environmental Support of local communities
Intracom Holdings is fully aligned with the United Nations Global Compact's ten principles in the areas of human rights, labor, the environment and anti-corruption. Holding steadfast to our core values, we are committed to conducting our business in an environmentally sound and sustainable manner, providing excellent workplace conditions and supporting and enhancing the communities in which we operate with an emphasis on innovation and life-long education projects.
The company has been one of the first Greek enterprises to be SA 8000 certified, ensuring the existence of a safe working environment in which non-discriminatory policies are applied and equal opportunities are offered to all employees irrespective of gender, age, and nationality. Furthermore, employee trade union rights are respected, health & safety procedures are faithfully adhered to and open door policies are consistently implemented, while the rights of our shareholders and the interests of all our stakeholders are safeguarded through transparency and accountability in our all our actions and business dealings. A member of the Hellenic Network for Corporate Social Responsibility since 2001, Intracom Holdings contributes to the growth and advancement of corporate social responsibility in Greece.
Intracom Holdings is committed to modern principles of Corporate Governance, a system of laws, rules, procedures and sound approaches by which corporations are managed and controlled, in accordance with applicable Greek legislation and international best practices. Our Corporate Governance policies aim to safeguard the rights of our shareholders and the interests of all our stakeholders through transparency and accountability in our decision-making process, effective internal controls and auditing, appropriate financial risk management and the timely disclosure of clear and accurate information to all those concerned.
Our Corporate Governance policies reflect our steadfast commitment to ethical and responsible decision making by our directors and company executives to ensure our organization's sustainable growth and the long-term welfare of shareholders and stakeholders alike. Our Code of Corporate Governance together with such matters that concern internal control and auditing, the dissemination of information and the mitigation of business and financial risks is in line with the Corporate Governance Code of the Hellenic Federation of Enterprises (SEV).
The company's significant transactions with related parties as defined in International Accounting Standard 24 relate to transactions with its subsidiaries and affiliates and companies in which the major shareholder of INTRACOM HOLDINGS holds an interest share, which are presented in the tables below:
(amounts in thousands €)
| SUBSIDIARIES | SERVICES | RENTAL INCOME |
OTHER | RECEIVABLES | |
|---|---|---|---|---|---|
| INTRAKAT SA | 826 | 256 | 112 | 2.609 | |
| B.L. BLUEPRO | - | - | 10 | - | |
| INTRASOFT INTERNATIONAL SA (GR) | 1.144 | 743 | 286 | 8.081 | |
| INTRACOM DEFENSE SA | 194 | - | - | 42 | |
| OTHER SUBSIDIARIES | 2 | 23 | - | 72 | |
| Sum | 2.166 | 1.022 | 408 | 10.804 | |
| OTHER RELATED PARTIES | |||||
| INTRALOT | 317 | 556 | 637 | 13.887 | |
| OTHER RELATED PARTIES | - | 4 | - | 3 | |
| Sum | 317 | 560 | 637 | 13.890 | |
| TOTAL | 2.483 | 1.582 | 1.045 | 24.694 |
(amounts in thousands €)
| SUBSIDIARIES | SERVICES | RENTAL INCOME |
OTHER | RECEIVABLES |
|---|---|---|---|---|
| INTRAKAT SA | 814 | 252 | 66 | 4.218 |
| B.L. BLUEPRO | - | - | 1 | 301 |
| INTRASOFT INTERNATIONAL SA (GR) | 1.279 | 684 | 258 | 7.350 |
| INTRACOM DEFENSE SA | 271 | - | - | 80 |
| OTHER SUBSIDIARIES | 2 | 21 | - | 95 |
| Sum | 2.366 | 957 | 325 | 12.044 |
| OTHER RELATED PARTIES | ||||
| INTRALOT | 337 | 556 | 765 | 15.656 |
| OTHER RELATED PARTIES | - | 7 | 14 | 4 |
| Sum | 337 | 563 | 779 | 15.660 |
| TOTAL | 2.703 | 1.520 | 1.104 | 27.704 |
| (amounts in thousands €) | |||||
|---|---|---|---|---|---|
| PURCHASES | |||||
| SERVICES | OF FIXED | OTHER | LIABILITIES | ||
| SUBSIDIARIES | ASSETS | ||||
| INTRAKAT SA | - | - | 1.500 | 1.500 | |
| INTRAPOWER | 138 | 10 | - | 15 | |
| INTRADEVELOPMENT SA | - | - | - | 40 | |
| INTRASOFT INTERNATIONAL SA (GR) | - | 39 | - | - | |
| Sum | 138 | 49 | 1.500 | 1.555 | |
| OTHER RELATED PARTIES | |||||
| INTRALOT | - | - | - | 6.184 | |
| OTHER RELATED PARTIES | - | - | - - | ||
| Sum | 0 | 0 | 0 | 6.184 | |
| TOTAL | 138 | 49 | 1.500 | 7.739 |
| PURCHASES | |||||
|---|---|---|---|---|---|
| SERVICES | OF FIXED | OTHER | LIABILITIES | ||
| SUBSIDIARIES | ASSETS | ||||
| INTRAKAT SA | - | 262 | - | - | |
| IN MAINT SA | 168 | 105 | - | 19 | |
| INTRADEVELOPMENT SA | - | - | - | 40 | |
| OTHER SUBSIDIARIES | - | - | - | - | |
| Sum | 168 | 367 | 0 | 59 | |
| OTHER RELATED PARTIES | |||||
| INTRALOT | - | - | - | 6.544 | |
| OTHER RELATED PARTIES | 38 - | - | 31 | ||
| Sum | 38 | 0 | 0 | 6.575 | |
| TOTAL | 206 | 367 | 0 | 6.634 | |
(amounts in thousands €)
In relation to the above transactions:
The Company's income from services comes mainly from the provision of administrative, accounting, legal and computer support services and other comes from interest.
The purchases from INTRAPOWER SA relate to maintenance of facilities and networks and 'Other Purchases' from INTRAKAT relates to the acquisition of percentage of 50% in INTRADEVELOPMENT.
The transactions have taken place under normal market conditions.
Directors' remuneration and key management compensation amounted to €571 during the year 2017 in comparison (2016 €891). There was no outstanding receivable or payable to directors as at 31st December 2017.
Paiania, 27 April 2018 The Board of Directors
To the Shareholders of INTRACOM HOLDINGS S.A.
We have audited the accompanying separate and consolidated financial statements of INTRACOM HOLDINGS S.A. (the Company), which comprise the separate and consolidated statement of financial position as at 31 December 2017, and the separate and consolidated statements of comprehensive income, changes in equity and cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies.
In our opinion, the accompanying separate and consolidated financial statements present fairly, in all material respects, the financial position of INTRACOM HOLDINGS S.A. and its subsidiaries (the Group) as at 31 December 2017, and their financial performance and their consolidated cash flows for the year then ended in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union.
We conducted our audit in accordance with International Standards on Auditing (ISAs) as incorporated into the Greek Legislation. Our responsibilities under those standards are further described in the "Auditor's Responsibilities for the Audit of the separate and consolidated Financial Statements" section of our report. We are independent of the Company and its consolidated subsidiaries throughout our appointment in accordance with the International Ethics Standards Board for Accountants' Code of Ethics for Professional Accountants (IESBA Code), as incorporated into the Greek Legislation and the ethical requirements that are relevant to the audit of the separate and consolidated financial statements in Greece, and we have fulfilled our other ethical responsibilities in accordance with the requirements of the current legislation and the abovementioned IESBA Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
We draw attention to note 43 "Restatements of items/Correction of error" of the annual financial information, in which is described that the Group and the Company during the closing year proceeded to correction of the error, which concerned the previous period by restating the comparative data. Our opinion is not qualified in respect of this matter.
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the separate and consolidated financial statements of the current period. These matters and the related risks of material misstatement were addressed in the context of our audit
of the separate and consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
| Key audit matter | Addressing the audit matter |
|---|---|
| 1. Acquisition of subsidiary - Recognition of goodwill |
|
| As pointed out in Notes 42 and 7 to the accompanying financial statements, during the year the Group acquired the total number of shares of the company INTRAPAR S.A., by vendors related with the Group's parent company, natural persons, for a total consideration of approximately € 9,7 million. The Group included in the consolidated financial statements for the period ended 31/12/2017 the said participation in accordance with the requirements for business combinations of IFRS 3 and the requirements for the consolidated financial statements of IFRS 10, recognizing goodwill of amount approximately € 17,4 million. Due to the nature of the transaction and the degree of management's judgments in the application of the acquisition method for the incorporation of this subsidiary into the consolidated statements of the Group, as well as the recognition of the goodwill arisen from the above transaction, in conjunction with a court case that is still in progress and concerns property assets of an associate of the acquired subsidiary, we consider the accounting of this acquisition in the consolidated financial statements of the Group as one of most significance matter. |
Our audit approach included among other also the following procedures: We examined the legal documents of the acquisition and assessed the correctness of the Group's management application of the accounting policies and the policy for the accounting of the acquisition as a business combination, in accordance with the requirements of IFRS 3 and the correctness of the incorporation of the acquired in the consolidated financial statements of the Group in accordance with IFRS 10. We examined the appropriateness of application of the acquisition method and, with the involvement of our senior executives, we evaluated the reasonableness of the valuation models' assumptions and, in general, the appropriateness of the methodology used for the determination of fair value of the subsidiary's identifiable assets, taking into account also the subsequent events that affect the formation of the final consideration of the acquisition. We ascertained the correctness of the calculation of recognized goodwill as the difference between, on the one hand, the total acquisition price and, on the other hand, the identifiable assets and liabilities assumed measured at fair value. Also, we assessed the adequacy and appropriateness of the disclosures in notes 42 and 7 to the financial statements. |
| Key audit matter | Addressing the audit matter |
|---|---|
| 2. Recognition of revenue from construction contracts and IT service contracts |
| The Group's turnover for the year ended 31.12.2017 amounted to approximately € 397 million |
Our audit approach included among other also the following procedures: |
|---|---|
| (approximately € 402 million for the year ended 31.12.2016) and includes mainly revenue from the execution of construction contracts (2017 approximately € 123 million and 2016 € 111 million |
We examined the procedures applied by the Group for the recognition of revenue from construction contracts and IT service contracts. |
| approximately) and revenue from the IT services sector (2017 approximately € 145 million and 2016 approximately € 135 million). |
By applying sample testing, we carried out on a number of contracts substantive procedures concerning the recognition of revenue from |
| The accounting recognition of revenue from the execution of construction contracts and IT service contracts is based on the Management's critical judgments and estimates, with a high degree of uncertainty. Possible future changes in accounting estimates may result to significant changes in recognized revenue and relevant profitability. |
construction contracts and IT service contracts, examining qualitative and quantitative criteria, in order to evaluate important and complex areas in their performance and the ascertainment of correctness of the recognition of revenue related to them, in accordance with the accounting policies and methods applied by the Group's management and the requirements of IAS 11. |
| In particular, revenue from construction contracts is recognized over time and as performance |
In addition: |
| obligations are satisfied and their recognition requires estimates and judgments in relation to the following: |
We studied and understood the key terms of the contracts in order to confirm, per project, the performance obligations and the point in time they |
| a) the recognition of performance obligations and the point in time these are satisfied, |
are satisfied, as well as the allocation method of the transaction price to individual performance obligations. |
| b) the allocation of the transaction price (contractual consideration) to performance obligations, |
In addition, we compared the actual results per selected contract to the approved budgeted amounts and the historical data, in order to assess |
| c) the determination of total costs from the date of the contract up to the date of its estimated completion, |
the degree of reliability of the management's judgments and estimates. |
| d) any revisions to the estimated execution costs, | By applying sample testing, we examined the completeness and accuracy of the costs, and other costs incurred for the satisfaction of performance |
| e) the possibility of customer acceptance of any claims for compensation. |
obligations and we correlated them with the relevant projects/contracts, taking into account the respective invoices, contracts and other |
| Relevant reference concerning the recognition of revenue (from IT services and construction |
documents. |
| contracts) is made in the financial statements in Note 2.28 (Summary of significant accounting policies), Note 4 (Critical accounting estimates and judgments of management) and Note 18 (Construction Contracts) and Note 19 (Government |
We recalculated the percentage of satisfaction of performance obligations based on the actual costs incurred, as well as on the signed reports of the project managers. |
| We reviewed the supporting material |
| Financial Assistance) to the financial statements. | (correspondence with customers, subsequent receipts) to assess the probability of collecting claims for compensation. |
|---|---|
| Also, we assessed the adequacy and appropriateness of the disclosures in notes 18 and 19 to the financial statements. |
|
| Key audit matter | Addressing the audit matter |
| 3. Valuation of land and buildings & Investment property |
|
| At 31.12.2017, the value of land and buildings and investment property, disclosed in the Group's financial statements amounts to approximately € 72 |
Our audit approach included among other the following procedures: |
| million (approximately € 72 million at 31.12.2016) and approximately € 63 million (approximately € 78 million at 31.12.2016) respectively. |
We reviewed the valuation report of the assets' fair value carried out by independent valuers and, then we studied the valuation procedure and methods. |
| Property, plant and equipment (PPE) as well as investment property are measured at acquisition cost less accumulated depreciation and impairment. When the book values of investment property exceed their recoverable amount, the difference (impairment) is recognised directly as an |
We assessed the independence, objectivity, appropriateness, adequacy of the qualification and ability of the independent professional valuers used by management for the fair value estimation of property assets at 31.12.2017. |
| expense in the results. The recoverable amount of the assets, which is estimated to approximate the value in use, is determined by independent valuers based on their fair value less the selling costs, using the comparative method based on reliable market information, which is adjusted to the conditions of the said property assets. |
We evaluated of the appropriateness of the valuation method for fair value estimation of each asset in relation to acceptable methods of valuation taking into account the particular characteristics of each property and assessed the consistency of the valuation methods with the respective methods applied in previous independent valuations. |
| The significant value they represent, for the Group, as a percentage (around 17%) on the total assets, the own-used land and buildings and Investment property, the ongoing recession environment prevailing in Greek real estate market, as well as the subjectivity and critical judgments which are applied by Management and included in the fair value estimation procedure make the valuation one of most significance matter. |
We assessed the reasonableness of assumptions used in the valuation reports of the independent professional valuers used by Management and assessed the consistency of those assumptions with the respective assumptions adopted in previous independent valuations. We assessed the independence, objectivity, appropriateness, adequacy of the qualification and ability of the independent professional valuers used by management for the fair value estimation of |
| The recoverable amount of the assets, which is estimated to approximate the value in use, is |
property assets at 31.12.2017. |
| determined by independent valuers based on their fair value less the selling costs, using the comparative method based on reliable market information, which is adjusted to the conditions of the said property assets. Information concerning the fair value estimation procedures is described in notes 2.5 (Investment |
We evaluate the appropriateness, completeness and accuracy of the data used in the valuation reports of the independent professional valuers in order to ascertain whether there was need for impairment of the value of the said assets. Also, we assessed the adequacy and |
|---|---|
| property) and 2.6 (Property, plant and equipment), as well as Note 4 (Critical accounting estimates and judgments of management) to the financial statements. |
appropriateness of the disclosures in Notes 6 (Property, plant and equipment) and 9 (Investment property) to the financial statements. |
| Key audit matter | Addressing the audit matter |
| 4. Estimation of impairment of investments in subsidiaries (separate financial statements) |
|
| At 31.12.2017, the book value of investments in subsidiaries in the separate financial statements amounts to approximately € 154 million (approximately € 132 million at 31.12.2016). |
Our audit approach concerning the impairment of investments in subsidiaries included among other also the following audit procedures: |
| The Company's investments in its subsidiaries are measured at acquisition cost and tested for impairment at least on an annual basis if there are external or internal indications of impairment. This area was considered significant for the audit |
We studied the Management's estimates and we examined the existence of any indications of impairment for each participation in subsidiaries, focusing on the cases in which arose losses charged to the audited year. |
| because in addition to the significance of the amount of investments in subsidiaries in the total financial statements, the determination of the recoverable amount of the subsidiaries contains a large degree of subjectivity regarding the estimation of future cash flows, which depends on |
We held discussions with the Company's Management and we assessed its judgments, related to the impairment test of investments in subsidiaries. |
| many factors, including the expectations on sales in future periods, cost estimates and the use of an appropriate discount rate. |
We evaluated, with the assistance of our senior executives, the appropriateness and consistency of the model of value in use, as well as the assumptions used, for the determination of possible |
| The above-mentioned factors and events involved the risk of over-estimating the value of participations and, as a result, the assessment of |
impairment. |
| the necessity to carry out impairment tests and, where required, the calculation of the recoverable amount were the main objects of our audit. |
We examined the inflows used for the determination of assumptions in the said model, in order to confirm their reasonableness, after comparing with information from external sources |
| Information concerning the procedures for impairment of investments in subsidiaries is referred to in Note 10 (Investments in subsidiaries) and Note 4 (Critical accounting estimates and |
and third parties as well as available historical information of the Company and we tested the mathematical precision of the model. |
| judgments of management) to the financial |
We assessed the adequacy and appropriateness of |
| statements. | the | disclosures | in | Note | 10 | (Investments | in |
|---|---|---|---|---|---|---|---|
| subsidiaries) to the financial statements. |
Management is responsible for the other information. The other information comprises the information included in the Board of Directors' Report for which reference is made to the "Report on Other Legal and Regulatory Requirements", to the Statements of the Members of the Board of Directors, but does not include the financial statements and our auditor's report thereon.
Our opinion on the separate and consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the separate and consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the separate and consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Management is responsible for the preparation and fair presentation of the separate and consolidated financial statements in accordance with IFRSs, 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.
In preparing the separate and consolidated financial statements, management is responsible for assessing the Company's and the Group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company and the Group or to cease operations, or has no realistic alternative but to do so.
The Audit Committee (art. 44 L. 4449/2017) of the Company is responsible for overseeing the Company's and the Group's financial reporting process.
Our objectives are to obtain reasonable assurance about whether the separate and consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs, as incorporated into the Greek Legislation, will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these separate and consolidated financial statements.
As part of an audit in accordance with ISAs as incorporated into the Greek Legislation, we exercise professional judgement and maintain professional skepticism throughout the audit. We also:
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the separate and consolidated financial statements of the current period and are therefore the key audit matters.
Taking into consideration that management is responsible for the preparation of the Board of Directors' Report and the Corporate Governance Statement included in this report, according to the provisions of paragraph 5 of article 2 (part B') of L. 4336/2015, we note that:
a) The Board of Directors' Report includes the Corporate Governance Statement that provides the data and information defined under article 43bb of cod. L. 2190/1920.
b) In our opinion the Board of Directors' Report has been prepared in accordance with the applicable legal requirements of the articles 43a and 107A and the paragraph 1 (cases c' and d') of the article 43bb of cod. L. 2190/1920 and its content corresponds with the accompanying financial statements for the year ended 31/12/2017.
c) Based on the knowledge we obtained during our audit of INTRACOM HOLDINGS S.A. and its environment, we have not identified any material misstatements in the Board of Directors' Report.
Our audit opinion on the accompanying separate and consolidated financial statements is consistent with the Additional Report to the Company's Audit Committee referred to in Article 11 of European Union (EU) Regulation 537/2014.
We have not provided to the Company and its subsidiaries the prohibited non-audit services referred to in Article 5 of EU Regulation 537/2014.
The permitted non-audit services that we have provided to the Company and its subsidiaries, during the year ended 31 December 2017 have been disclosed in the Note 29 of the accompanying separate and consolidated financial statements.
We have been appointed for the first time statutory auditors of the Company by the dated 27/06/2008 decision of the annual ordinary general meeting of shareholders. Since then, our appointment has been constantly renewed for a total period of 10 years based on the annual decisions of the Annual General Meetings of the Company Shareholders.
Athens, 29 April 2018
Certified Public Accountant Auditor Institute of CPA (SOEL) Reg. No. 15161
Associated Certified Public Accountants s.a. member of Crowe Horwath International 3, Fok. Negri Street - 112 57 Athens, Greece Institute of CPA (SOEL) Reg. No. 125
INTRACOM HOLDINGS SA Annual Report 31.12.2017
In accordance with International Financial Reporting Standards
as adopted by the European Union
INTRACOM HOLDINGS SA Financial statements according to IFRS 31.12.2017
| Contents | Page | |
|---|---|---|
| Balance sheet | 26 | |
| Statement of comprehensive income | 27 | |
| Statement of changes in equity – Group |
28 | |
| Statement of changes in equity – Company |
29 | |
| Cash flow statement | 30 | |
| 1. | General information | 31 |
| 2. | Summary of significant accounting policies | 31 |
| 3. | Financial risk management | 47 |
| 4. | Critical accounting estimates and judgments | 52 |
| 5. | Segment information | 53 |
| 6. | Property, plant and equipment | 56 |
| 7. | Goodwill | 58 |
| 8. | Intangible assets | 61 |
| 9. | Investment property | 63 |
| 10. | Investments in subsidiaries | 64 |
| 11. | Investments in companies which are consolidated using the equity method | 67 |
| 12. | Joint operations | 69 |
| 13. | Available-for-sale financial assets | 70 |
| 14. | Deferred income tax | 71 |
| 15. | Long-term borrowings | 73 |
| 16. | Trade and other receivables | 74 |
| 17. | Inventories | 77 |
| 18. | Construction contracts | 78 |
| 19. | Right to payments from the Greek State | 79 |
| 20. | Financial assets at fair value through profit or loss | 79 |
| 21. | Cash and cash equivalents | 80 |
| 22. | Share capital | 80 |
| 23. | Reserves | 81 |
| 24. | Borrowings | 83 |
| 25. | Retirement benefit obligations | 84 |
| 26. | Grants | 86 |
| 27. | Provisions | 86 |
| 28. | Trade and other payables | 87 |
| 29. | Expenses by nature | 88 |
| 30. | Employee benefits | 89 |
| 31. | Other operating income | 89 |
| 32. | Other gains/(losses) - net | 90 |
| 33. | Finance expenses/(income) - net | 90 |
| 34. | Income tax | 91 |
| 35. | Earnings/(losses) per share | 92 |
|---|---|---|
| 36. | Cash generated from operations | 93 |
| 37. | Commitments | 93 |
| 38. | Contingencies/Outstanding legal cases | 94 |
| 39. | Related party transactions | 96 |
| 40. | Post balance sheet events | 97 |
| 41. | Group structure | 98 |
| 42. | Business combinations | 102 |
| 43. | Restatements | 104 |
| Group | Company | ||||
|---|---|---|---|---|---|
| 31/12/2016 | |||||
| ASSETS | Note | 31/12/2017 | Restated* | 31/12/2017 | 31/12/2016 |
| Non-current assets | |||||
| Property, plant and equipment | 6 | 122.586 | 119.726 | 8.384 | 9.824 |
| Goodwill | 7 | 37.565 | 20.177 | - | - |
| Intangible assets | 8 | 10.336 | 6.667 | 31 | 2 |
| Investment property | 9 | 62.513 | 78.097 | 51.994 | 51.995 |
| Investments in subsidiaries | 10 | - | - | 154.158 | 132.312 |
| Investments accounted for using the equity method | 11 | 10.221 | 597 | - | - |
| Available - for - sale financial assets | 13 | 42.714 | 12.873 | 11.969 | 11.637 |
| Deferred income tax assets | 14 | 8.109 | 8.303 | - | - |
| Long-term loans | 15 | 13.024 | 13.304 | 13.024 | 13.304 |
| Trade and other receivables | 16 | 20.606 | 20.487 | 39 | 39 |
| 327.674 | 280.231 | 239.599 | 219.113 | ||
| Current assets | |||||
| Inventories | 17 | 38.952 | 39.309 | - | - |
| Trade and other receivables | 16 | 210.520 | 241.095 | 34.968 | 38.142 |
| Construction contracts | 18 | 39.874 | 36.066 | - | - |
| Right to payments from Greek State | 19 | 18.745 | 14.159 | - | - |
| Financial assets at fair value through profit or loss | 20 | 264 | 167 | - | - |
| Current income tax assets | 5.298 | 9.584 | - | - | |
| Cash and cash equivalents | 21 | 148.226 | 107.971 | 61.130 | 52.005 |
| 461.879 | 448.350 | 96.098 | 90.147 | ||
| Total assets | 789.552 | 728.581 | 335.697 | 309.260 | |
| EQUITY | |||||
| Capital and reserves attributable to the Company's equity holders | |||||
| Share capital | 22 | 187.567 | 187.567 | 187.567 | 187.567 |
| Share premium Reserves |
22 23 |
194.204 166.553 |
194.204 167.237 |
194.204 139.033 |
194.204 138.774 |
| Retained earnings | (291.100) | (297.740) | (252.181) | (252.209) | |
| 257.224 | 251.268 | 268.623 | 268.336 | ||
| Non-controlling interest | 13.071 | 20.927 | - | - | |
| Total equity | 270.295 | 272.196 | 268.623 | 268.336 | |
| LIABILITIES | |||||
| Non-current liabilities | |||||
| Borrowings | 24 | 106.764 | 68.405 | 7.112 | 7.440 |
| Deferred income tax liabilities | 14 | 2.328 | 1.240 | 1.022 | 1.061 |
| Retirement benefit obligations | 25 | 7.691 | 7.046 | 379 | 360 |
| Grants | 26 | 44 | 49 | - | - |
| Provisions | 27 | 1.076 | 1.528 | - | - |
| Trade and other payables | 28 | 28.299 | 3.305 | - | - |
| 146.202 | 81.573 | 8.511 | 8.860 | ||
| Current liabilities | |||||
| Trade and other payables | 28 | 223.831 | 242.075 | 10.963 | 11.286 |
| Current income tax liabilities | 2.266 | 5.253 | - | - | |
| Construction contracts | 18 | 1.324 | 3.733 | - | - |
| Borrowings | 24 | 136.724 | 109.594 | 44.282 | 15.811 |
| Provisions | 27 | 8.911 | 14.157 | 3.316 | 4.966 |
| 373.056 | 374.812 | 58.561 | 32.063 | ||
| Total liabilities | 519.258 | 456.385 | 67.073 | 40.923 | |
| Total equity and liabilities | 789.552 | 728.581 | 335.697 | 309.260 | |
*Refer to note 43.
| Group | Company | ||||
|---|---|---|---|---|---|
| 1/1 - 31/12/2016 | |||||
| Note | 1/1 - 31/12/2017 | Restated* 1/1 - 31/12/2017 1/1 - 31/12/2016 | |||
| Sales | 397.129 | 401.656 | 2.554 | 2.833 | |
| Cost of goods sold | 29 | (324.019) | (331.899) | (2.189) | (2.472) |
| Gross profit | 73.110 | 69.757 | 365 | 361 | |
| Selling and research costs | 29 | (22.079) | (19.102) | - | - |
| Administrative expenses | 29 | (35.753) | (32.551) | (3.619) | (4.074) |
| Other operating income | 31 | 4.382 | 4.790 | 2.197 | 2.687 |
| Other gains / (losses) - net | 32 | 1.557 | (7.118) | 965 | 196 |
| Impairment losses from subsidiaries | 10 | - | - | - | (1.065) |
| Impairment losses from tangible, intangible assets and investment | |||||
| property | 6, 8, 9 | - | (86) | - | (86) |
| Operating gains / (losses) | 21.217 | 15.690 | (91) | (1.981) | |
| Finance expenses | 33 | (21.003) | (16.658) | (1.457) | (1.792) |
| Finance income | 33 | 4.473 | 2.086 | 1.539 | 1.589 |
| Finance income / (expenses) - net | (16.531) | (14.573) | 82 | (203) | |
| Share of loss of associates | 11 | (521) | (117) | - | - |
| Gain/(Loss) before income tax | 4.166 | 1.001 | (9) | (2.184) | |
| Income tax | 34 | (5.273) | (6.024) | 37 | 28 |
| Net loss for the year | (1.107) | (5.023) | 28 | (2.156) | |
| Other comprehensive income : | |||||
| Items that will be reclassified to profit or loss | |||||
| Fair value losses on available-for-sale financial assets, net of tax | 276 | (3.137) | 264 | - | |
| Transfer of available for sale reserve to profit or loss due to impairment/disposal | 44 | 3.151 | - | - | |
| Currency translation differences, net of tax | (1.065) | 92 | - | - | |
| (745) | 106 | 264 | - | ||
| Items that will not be reclassified to profit or loss | |||||
| Actuarial gains / (losses), net of tax | (134) | (62) | (5) | 57 | |
| Other comprehensive income for the year, net of tax | (879) | 44 | 259 | 57 | |
| Total comprehensive income for the year | (1.986) | (4.979) | 287 | (2.099) | |
| Losses attributable to: | |||||
| Equity holders of the Company | 925 | (3.011) | 28 | (2.156) | |
| Non-controlling interest | (2.033) | (2.012) | - | - | |
| (1.107) | (5.023) | 28 | (2.156) | ||
| Total comprehensive income attributable to: | |||||
| Equity holders of the Company | 99 | (2.854) | 287 | (2.099) | |
| Non-controlling interest | (2.085) | (2.125) | - | - | |
| (1.986) | (4.979) | 287 | (2.099) | ||
| Losses per share attributable to the equity holders of the | |||||
| Company during the year (expressed in € per share) | |||||
| Basic and diluted | 0,01 | (0,02) | 0,00 | (0,02) |
*Refer to note 43.
| Attributable to equity holders of the Company | Non | ||||||
|---|---|---|---|---|---|---|---|
| Share | Other | Retained | controlling | Total equity | |||
| Note | Capital | reserves | earnings | Total | interest | ||
| Balance 1 January 2016 | 381.771 | 167.318 | (292.630) | 256.459 | 25.269 | 281.727 | |
| Loss for the year | - | - | (3.011) | (3.011) | (2.012) | (5.023) | |
| Fair value losses on available for sale financial assets | - | (2.283) | - | (2.283) | (854) | (3.137) | |
| Transfer of available-for-sale reserve to profit or loss due to | |||||||
| impairment/disposal | 23 | - | 2.291 | - | 2.291 | 859 | 3.151 |
| Currency translation differences | - | 149 | - | 149 | (56) | 93 | |
| Remeasurements of retirement benefit obligations, net of tax | - | - | - | - | (62) | (62) | |
| Total comprehensive income for the year | - | 158 | (3.011) | (2.853) | (2.125) | (4.978) | |
| Share capital increase of subsidiaries | 10 | - | - | (7) | (7) | (4) | (11) |
| Acquisition of control | - | - | - | - | 66 | 66 | |
| Effect of change in interest held in subsidiaries | 10 | - | 8 | (2.339) | (2.331) | (2.277) | (4.608) |
| Transfer between reserves | 23 | - | (246) | 247 | 1 | (1) | - |
| - | (238) | (2.099) | (2.337) | (2.217) | (4.553) | ||
| Balance 31 December 2016 restated* | 381.771 | 167.237 | (297.740) | 251.269 | 20.927 | 272.196 | |
| Balance 1 January 2017 | 381.771 | 167.237 | (297.740) | 251.269 | 20.927 | 272.196 | |
| Profit/(Loss) for the year | - | - | 925 | 925 | (2.033) | (1.107) | |
| Fair value losses on available for sale financial assets | - | 294 | - | 294 | (18) | 276 | |
| Transfer of available-for-sale reserve to profit or loss due to | |||||||
| impairment | 23 | - | 26 | - | 26 | 18 | 44 |
| Currency translation differences | - | (1.006) | - | (1.006) | (59) | (1.065) | |
| Remeasurements of retirement benefit obligations, net of tax | (140) | - | (140) | 6 | (134) | ||
| Total comprehensive income for the year | - | (826) | 925 | 99 | (2.085) | (1.986) | |
| Share capital increase of subsidiaries | - | - | (178) | (178) | (116) | (294) | |
| Acquisition of control | - | - | - | - | 41 | 41 | |
| Effect of change in interest held in subsidiaries | 10 | - | 515 | 5.524 | 6.039 | (5.734) | 306 |
| Disposal of subsidiaries | - | (23) | (12) | (35) | 67 | 32 | |
| Transfer between reserves | 23 | - | (350) | 381 | 30 | (30) | - |
| - | 142 | 5.714 | 5.856 | (5.771) | 85 | ||
| Balance 31 December 2017 | 381.771 | 166.553 | (291.100) | 257.224 | 13.071 | 270.295 |
*Refer to note 43.
Analysis of other reserves is presented in note 23.
| Share | Other | Retained | |||
|---|---|---|---|---|---|
| Note | capital | reserves | earnings | Total equity | |
| Balance 1 January 2016 | 381.771 | 138.717 | (250.053) | 270.434 | |
| Loss for the year | - | - | (2.156) | (2.156) | |
| Remeasurements of retirement benefit obligations, net of tax | - | 57 | - | 57 | |
| Total comprehensive income for the year | - | 57 | (2.156) | (2.099) | |
| Balance 31 December 2016 | 381.771 | 138.774 | (252.209) | 268.336 | |
| Balance 1 January 2017 | 381.771 | 138.774 | (252.209) | 268.336 | |
| Loss for the year | - | - | 28 | 28 | |
| Fair value gains on available-for-sale financial assets | 13 | - | 264 | - | 264 |
| Remeasurements of retirement benefit obligations, net of tax | - | (5) | - | (5) | |
| Total comprehensive income for the year | - | 259 | 28 | 287 | |
| Balance 31 December 2017 | 381.771 | 139.033 | (252.181) | 268.623 | |
Analysis of other reserves is presented in note 23.
| Group | Company | ||||
|---|---|---|---|---|---|
| Note | 1/1 - 31/12/2017 1/1 - 31/12/2016 1/1 - 31/12/2017 1/1 - 31/12/2016 | ||||
| Cash flows from operating activities | |||||
| Cash generated from / (used in) operations | 36 | 59.237 | 71.797 | (409) | 46.707 |
| Interest paid | (19.908) | (14.981) | (1.352) | (1.778) | |
| Income tax paid | (2.702) | (3.058) | (71) | (74) | |
| Net cash generated from / (used in) operating activities | 36.627 | 53.759 | (1.832) | 44.855 | |
| Cash flows from investing activities | |||||
| Purchase of property, plant and equipment (PPE) | (10.089) | (10.505) | (8) | (189) | |
| Purchase of investment property | (776) | (4.851) | (10) | (247) | |
| Purchase of intangible assets | (4.700) | (2.482) | (39) | - | |
| Proceeds from sale of PPE | 663 | 590 | - | - | |
| Proceeds from sale of investment property | 966 | - | - | - | |
| Proceeds from sale of intangible assets | 1 | - | - | - | |
| Acquisition of available-for-sale financial assets | 13 | (27.070) | (3.735) | (68) | (3.524) |
| Proceeds from sale/liquidation of available-for-sale financial assets | 13 | - | 522 | - | 522 |
| Acquisition of control | - | 85 | - | - | |
| Acquisition of subsidiaries (less subsidiary's cash equivalents) | 10, 11, 42 | (9.000) | - | (17.375) | - |
| Disposal of subsidiaries | (40) | - | - | 957 | |
| Disposal of associates | 11 | 1 | - | - | - |
| Formation of subsidiary | (25) | - | - | - | |
| Formation / acquisition of associates | 11 | (2.106) | (180) | - | - |
| Dividend received | - | 4 | - | - | |
| Proceeds from loans granted | - | - | 300 | - | |
| Loans granted | 15, 16 | - | (400) | - | (2.700) |
| Interest received | 2.730 | 187 | 14 | 4 | |
| Net cash generated from / (used in) investing activities | (49.446) | (20.763) | (17.186) | (5.176) | |
| Cash flows from financing activities | |||||
| Expenses on issue of subsidiary's share capital | (331) | (16) | - | - | |
| Transactions with non-controlling interest in subsidiaries | 10 | (993) | (4.637) | - | - |
| Contribution of non-controlling interest to subsidiary's share capital | 10 | 1.979 | 24 | - | - |
| Proceeds from borrowings | 133.056 | 67.778 | 28.454 | - | |
| Repayments of borrowings | (79.142) | (74.998) | - | (2.846) | |
| Repayments of finance leases | (715) | (2.827) | (311) | (2.494) | |
| Net cash generated from / (used in) financing activities | 53.853 | (14.677) | 28.143 | (5.340) | |
| Net increase / (decrease) in cash and cash equivalents | 41.034 | 18.319 | 9.125 | 34.338 | |
| Cash and cash equivalents at beginning of year | 107.971 | 89.299 | 52.005 | 17.666 | |
| Currency exchange differences in cash and cash equivalents | (779) | 353 | - | - | |
| Cash and cash equivalents at end of year | 21 | 148.226 | 107.971 | 61.130 | 52.005 |
INTRACOM Holdings SA, with the distinctive title "INTRACOM HOLDINGS", was incorporated in Greece and its shares are traded in the Athens Stock Exchange.
Intracom Group operates, through its subsidiaries and associates, in developing products, providing services and undertaking complex, integrated and advanced technology projects and electronic systems in telecommunications and information technology, defence and public administration and has also activities in the construction sector. The parent company operates as a holding company.
The Group operates in Greece, Luxembourg, USA, Bulgaria, Romania as well as in other foreign countries.
The Company's registered office is at 19 km Markopoulou Ave., Peania, Attiki, Greece. The Company's website address is www.intracom.com.
These financial statements were approved for issue by the Board of Directors on 27 April 2018 and are subject to approval by the Annual General Meeting of Shareholders.
The annual financial statements, the independent auditor's reports and the Board of Directors' reports of the companies that are incorporated in the consolidated financial statements of the Group are posted in the Company's website www.intracom.com.
These financial statements consist of the standalone financial statements of Intracom Holdings SA (the "Company") and the consolidated financial statements of the Company and its subsidiaries (together "INTRACOM" or the "Group") for the year ended 31 December 2017, in accordance with International Financial Reporting Standards ("IFRS"), as adopted by the European Union (EU).
These financial statements have been prepared under the historical cost convention, as modified by the available-for-sale financial assets, financial assets at fair value through profit or loss and derivative financial instruments, which are carried at fair value.
The preparation of financial statements in accordance with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise judgement in the process of applying the Company's accounting policies. Moreover, the use of estimates and assumptions is required that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of preparation of financial statements and the reported income and expense amounts during the reporting period. Although these estimates are based on the best possible knowledge of Μanagement with respect to the current conditions and activities, the actual results can eventually differ from these estimates. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in note 4.
Following 2016, in which the Greek economy showed signs of stabilisation, in 2017 the Greek economy returned to growth after a prolonged period of recession. International and domestic developments provide a sturdy ground for growth. The domestic economy is mainly characterised by the increase in deposits, the decreasing dependence of banks on E.L.A., the country's credit rating upgrade as well as the yields of government bonds which have enabled the Greek State's return to international markets.
The timely completion of the fourth and final assessment will mark the successful completion of the 3rd programme and, depending on the decision regarding the debt relief measures, it will shape the economic and entrepreneurial environment in the forthcoming years.
However, concerns still remain regarding the banking system, the development of the above events and state funding after the completion of the current programme.
The above can affect the Group's and the Company's operations as well as financial position and results to some extent only in the short-term, as a result no significant negative effect is expected on the Group's operations in Greece. Management assesses that the Group's international business activity and export-oriented model as well as organic growth and improvement of profitability are the main components that will help the Group and the Company to address macroeconomic risks. In any case, the Group monitors on an ongoing basis the economic environment and adjusts its strategic actions to address risks on time.
As far as liquidity is concerned, the Group holds cash and cash equivalents amounting to €68 mil. in restricted as well as available cash deposits (note 16 and 21) with international credit institutions with credit rating Α2 and above according to Moody's.
Accounting policies used in the preparation of the financial statements of subsidiaries, associates and joint ventures are consistent with those applied by the parent company.
New standards, amendments to standards and interpretations: Certain new standards, amendments to standards and interpretations have been issued that are mandatory for the current financial year. The Group's evaluation of the effect of these new standards, amendments to standards and interpretations is as follows:
These amendments require entities to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities.
The amendment clarified that the disclosures requirement of IFRS 12 are applicable to interest in entities classified as held for sale except for summarised financial information.
New standards, amendments to standards and interpretations have been issued that are mandatory for periods beginning after 1 January 2017 and have not been applied in the preparation of these consolidated financial statements. None of the above is expected to have a significant impact on the consolidated financial statements except for the following:
IFRS 9 replaces the guidance in IAS 39 which deals with the classification and measurement of financial assets and financial liabilities and it also includes an expected credit losses model that replaces the incurred loss impairment model used today. IFRS 9 Hedge Accounting establishes a more principles-based approach to hedge accounting and addresses inconsistencies and weaknesses in the current model in IAS 39.
The Group and the Company are in the process of finalising their assessment regarding the effect of IFRS 9 on their financial statements. Based on Management's initial assessment, the adoption of IFRS 9 is not expected to have a significant impact. More specifically, trade and other receivables which represent the largest portion of financial assets held by the Group will continue to be measured at amortised cost, while available-for-sale financial assets will be measured at fair value through other comprehensive income (including financial assets measured at cost according to IAS 39). Compared to Management's initial assessment, the new provisions for the calculation of impairment losses is not expected to result in significant losses.
IFRS 15 was issued in May 2014. The objective of the standard is to provide a single, comprehensive revenue recognition model for all contracts with customers to improve comparability within industries, across industries, and across capital markets. It contains principles that an entity will apply to determine the measurement of revenue and timing of when it is recognised. The underlying principle is that an entity will recognise revenue to depict the transfer of goods or services to customers at an amount that the entity expects to be entitled to in exchange for those goods or services.
The Group is currently in the process of finalising their assessment regarding the effect of IFRS 15 on its financial statements. The impact on the Group's equity is expected to arise mainly from the integrated information technology solutions for the public sector and banks. The impact on this segment is expected to reach €0.6 mil. The cumulative effect of the adoption of IFRS 15 will impact Group's equity on 1 January 2018, without restating comparatives.
IFRS 16 was issued in January 2016 and supersedes IAS 17. The objective of the standard is to ensure the lessees and lessors provide relevant information in a manner that faithfully represents those transactions. IFRS 16 introduces a single lessee accounting model and requires a lessee to recognise assets and liabilities for all leases with a term of more than 12 months, unless the underlying asset is of low value. IFRS 16 substantially carries forward the lessor accounting requirements in IAS 17. Accordingly, a lessor continues to classify their leases as operating leases or finance leases, and to account for those two types of leases differently. The Group is currently assessing the impact of IFRS 16 on its financial statements.
There are no other standards or interpretations not yet effective that are expected to have a significant impact on the financial statements of the Group.
Subsidiaries are all entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases.
The Group uses the acquisition method of accounting to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Acquisition-related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. On an acquisition-by-acquisition basis, the group recognises any non-controlling interest in the acquiree either at fair value or at the non-controlling interest's proportionate share of the acquiree's net assets.
If the business combination is achieved in stages, the acquisition date fair value of the acquirer's previously held equity interest in the acquiree is remeasured to fair value at the acquisition date.
Any contingent consideration to be transferred by the Group is recognised at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration that is deemed to be an asset or liability is recognised in accordance with IAS 39 either in profit or loss or as a change to other comprehensive income. Contingent consideration that is classified as equity is not remeasured, and its subsequent settlement is accounted for within equity.
Goodwill is initially measured as the excess of the aggregate of the consideration transferred and the fair value of non-controlling interest over the net identifiable assets acquired and liabilities assumed. If this consideration is lower than the fair value of the net assets of the subsidiary acquired, the difference is recognised in profit or loss.
Investments in subsidiaries are accounted for at cost less impairment in the Company's standalone financial statements. Cost is adjusted to reflect changes in consideration arising from contingent consideration amendments.
Inter-company transactions, balances and unrealised gains on transactions between group companies are eliminated. Unrealised losses are also eliminated, unless the transaction provides evidence of an impairment of the assets transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.
The Group treats transactions with non-controlling interests as transactions with equity owners of the Group. For purchases from non-controlling interests, the difference between any consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on disposals to non-controlling interests are also recorded in equity.
When the group ceases to have control or significant influence, any retained interest in the entity is remeasured to its fair value, with the change in carrying amount recognised in profit or loss. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in other comprehensive income are reclassified to profit or loss.
The Group applies IFRS 11 to all joint arrangements. Investments in joint arrangements are classified as either joint operations or joint ventures depending on the contractual rights and obligations of each investor. The Group has assessed the nature of its joint arrangements and determined them to be joint operations. According to this method the Group's share in the receivables, liabilities, income and expenses of the joint operation are combined with the Group's similar items, line by line, in its financial statements.
The Group recognises the portion of gains or losses on the sale of assets by the Group to the joint operations that is attributable to the other investors of the joint operation. The Group does not recognise its share of profits or losses from the joint operation that result from the purchase of assets by the Group from the joint operation until it resells the assets to an independent party. Loss occurring from such a transaction is recognised directly if the loss indicates a reduction in the net realisable value of current assets or impairment.
Accounting policies of joint operations have been adjusted where necessary to ensure consistency with the policies adopted by the Group.
Associates are entities over which the Group has significant influence but not control, generally accompanying a shareholding of between 20% and 50% of the voting rights. Investments in associates are accounted for by the equity method of accounting and are initially recognised at cost. The Group's investment in associates includes goodwill (net of any cumulative impairments losses) identified in acquisition.
Under this method the Group's share of the post-acquisition profits or losses of associates is recognised in the income statement and its share of post-acquisition movements in other comprehensive income is recognised in other comprehensive income. The cumulative postacquisition movements are adjusted against the carrying amount of the investment. Unrealised gains on transactions between the Group and its associates are eliminated to the extent of the Group's interest in the associates. Unrealised losses are eliminated, unless the transaction provides evidence of an impairment of the assets transferred. When the Group's share of losses in an associate equals or exceeds its interest in the associate, the Group does not recognise further losses, unless the Group has incurred obligations or made payments on behalf of the associates.
If the ownership interest in an associate is reduced but significant influence is retained, only a proportionate share of the amounts previously recognised in other comprehensive income are reclassified to profit or loss where appropriate.
On the loss of significant influence, the group shall measure at fair value any investment the group retains in the former associate. The difference between the fair value of any retained investment, the consideration received from the disposal of the interest held in the associate and the carrying amount of the investment in the associate is recognised in profit or loss at the date when significant influence is lost. In addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in other comprehensive income are reclassified to profit or loss.
Accounting policies of associates have been adjusted where necessary to ensure consistency with the policies adopted by the Group.
The Company accounts for investments in associates in its standalone financial statements at cost less impairment.
The segments are determined on the basis of internal information reviewed by the management of the Group and are reported in the financial statements based on this internal component classification.
Items included in the financial statements of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates ("the functional currency"). The consolidated financial statements are presented in Euros, which is the Company's functional and presentation currency.
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement. Translation differences on non-monetary items, such as equities held at fair value through profit or loss, are reported as part of the fair value gain or loss.
The results and financial position of all Group entities (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:
(1) Assets and liabilities for each balance sheet date are translated at the closing rate at the date of the balance sheet;
(2) Income and expenses for each income statement are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions); and
(3) All resulting exchange differences are recognised through other comprehensive income.
On consolidation, exchange differences arising from the translation of the net investment in foreign entities, and of borrowings and other currency instruments designated as hedges of such investments, are taken to other comprehensive income. When a foreign operation is sold, such exchange differences are recognised in the income statement as part of the gain or loss on sale.
Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate. Exchange differences arising are recognised in other comprehensive income.
Investment property, principally comprising land and buildings, is held by the Group for long-term rental yields. Investment property is measured at cost less depreciation. When the carrying amounts of investment property exceed their recoverable amounts, the difference (impairment) is charged directly to profit or loss.
The Company classifies all land and buildings rented to subsidiaries as investment property in its standalone financial statements.
The land classified as investment property is not depreciated. Depreciation on buildings is calculated using the straight-line method to allocate the cost of each asset to its residual value over its estimated useful life, which is 33-34 years.
All property, plant and equipment ("PPE") is shown at cost less subsequent depreciation and impairment. Cost includes expenditure that is directly attributable to the acquisition of the items.
Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.
Land is not depreciated. Depreciation on PPE is calculated using the straight-line method to allocate the cost of each asset to its residual value over its estimated useful life. The expected useful life of property, plant and equipment is as follows:
| - Buildings | 33-34 | years |
|---|---|---|
| - Machinery | 10 | years |
| - Motor vehicles | 5-7 | years |
| - Other equipment | 5-10 | years |
The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date.
When the carrying amount of the asset is higher than its recoverable amount, the resulting difference (impairment loss) is recognised immediately as an expense in profit or loss.
In case of sale of property, plant and equipment, the difference between the sale proceeds and the carrying amount is recognised as profit or loss in the income statement.
Borrowing costs directly attributable to the construction of qualifying assets are added to the cost of those assets until such time as the assets are substantially ready for their intended use or sale. All other finance costs are recognised in the income statement in the period in which they arise.
Leases of property, plant and equipment whereby the Group has substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalised at the lease's inception at the lower of the fair value of the leased property, plant and equipment and the present value of the minimum lease payments. Each lease payment is allocated between the liability and finance charges so as to achieve a constant rate on the finance balance outstanding. The corresponding rental obligations, net of finance charges, are included in other long-term payables. The interest element of the finance cost is charged to the income statement over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The property, plant and equipment leased under a finance lease are depreciated over the shorter of the lease term and their useful life.
Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to the income statement on a straight-line basis over the period of the lease.
Goodwill is not amortised but is tested for impairment annually and whenever there is an indication that the goodwill may be impaired. Goodwill acquired on a business combination is allocated to the cash-generating units or groups of cash-generating units that are expected to benefit from the synergies of the combination. Impairment is determined by assessing the recoverable amount of the cash-generating units, which are related to goodwill.
If the carrying amount of the cash-generating unit, including goodwill that has been allocated, exceeds the recoverable amount of the unit, impairment is recognised. Impairment loss is recognised in profit or loss and cannot be reversed.
Gains and losses on the disposal of a cash-generating unit to which goodwill has been allocated include the carrying amount of goodwill relating to the part sold. The amount of goodwill attributable to the part sold is determined by the relative values of the part sold and the part of the cash-generating unit retained.
Goodwill on business combinations has been allocated and is monitored by the Group on the basis of the cash-generating units which have been identified according to the provisions of IAS 36 "Impairment of Assets".
The caption 'intangible assets' includes:
a) Computer software: Purchased computer software is stated at historical cost less subsequent amortisation. Amortisation is calculated using the straight-line method over the useful economic lives, not exceeding a period of 3-8 years. Costs associated with developing or maintaining computer software programs are recognised as an expense as incurred. Costs that are directly associated with identifiable and unique software products controlled by the Group (internally generated software), are recognised as part of intangible assets. Direct costs include materials, staff costs of the software development team and an appropriate portion of relevant overheads. Internally-generated software is amortised using the straight-line method over its useful life, not exceeding a period of 5-10 years.
b) Customer relationships: they relate to amounts recognised on the acquisition of the subsidiary company Intrasoft International Scandinavia (ex IT Services Denmark AS) and they are amortised over a period of 10 years.
c) Concession rights: Concession rights are stated at historical cost less subsequent amortisation. Amortisation is calculated using the straight-line method over the term of the Concession Agreement (note 2.27).
Goodwill and other intangible assets that have an indefinite useful life are not subject to amortisation and are tested for impairment annually and whenever events indicate that the carrying amount may not be recoverable. Assets that are subject to amortisation are reviewed for impairment at each balance sheet date and are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised, as expense immediately, for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. Fair value less costs to sell is the price that would be received to sell an asset in an orderly transaction between market participants at the measurement date, less the costs of disposal. Value in use is the present value of the future cash flows expected to be derived from an asset. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units). Prior impairments of nonfinancial assets (other than goodwill) are reviewed for possible reversal at each reporting date.
The group classifies its financial assets in the following categories. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition.
This category refers to financial assets acquired principally for the purpose of selling in the shortterm or if so designated by Management. Derivatives are also categorised as held for trading unless they are designated as hedges. If these assets are either held for trading or are expected to be realised within 12 months of the balance sheet date these assets are classified as current assets.
These are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for maturities greater than 12 months after the balance sheet date, which are classified as non-current assets.
Loans and receivables are carried at amortised cost using the effective interest rate method.
These are non-derivative financial assets with fixed or determinable payments which the Group has the intention and ability to hold them to maturity. During the year the Group had no assets classified as held to maturity investments.
These are non-derivatives that are either designated in this category or not classified in any of the other categories. They are included in non-current assets unless management intends to dispose of the investment within 12 months of the balance sheet date.
Purchases and sales of investments are recognised on trade date, which is the date on which the Group commits to purchase or sell the asset. Investments are initially recognised at fair value plus transaction costs for all financial assets not carried at fair value through profit or loss. Financial assets carried at fair value through profit or loss are initially recognised at fair value, and transaction costs are expensed in profit or loss. Investments are derecognised when the rights to receive cash flows from the investments have expired or have been transferred and the Group has transferred substantially all risks and rewards of ownership.
Available-for-sale financial assets and financial assets at fair value through profit or loss are subsequently carried at fair value. Unrealised gains and losses arising from changes in the fair value of investments classified as available-for-sale are recognised in other comprehensive income. When investments classified as available-for-sale are sold or impaired, the accumulated fair value adjustments are included in the income statement as gains and losses from investment securities. Impairment losses recognised in profit or loss are not reversed through profit or loss.
Gains or losses arising from changes in the fair value of the 'financial assets at fair value through profit or loss' category are included in profit or loss in the period in which they arise.
The fair values of quoted investments are based on year-end bid prices. If the market for a financial asset is not active (and for unlisted securities), the Group establishes fair value by using valuation techniques. These include the use of recent arm's length transactions, reference to other instruments that are substantially the same, discounted cash flow analysis, and option pricing models refined to reflect the issuer's specific circumstances. In cases where the fair value cannot be measured reliably, investments are measured at cost less impairment.
Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously.
The Group assesses at the end of each reporting period whether there is objective evidence that a financial asset or group of financial assets is impaired.
The financial assets that are reviewed for impairment (provided that the relative indications exist) are assets stated at cost (investments in subsidiaries and associates in the balance sheet of the parent company), assets measured at amortised cost based on the effective interest rate method (non-current receivables) and available for sale investments.
The recoverable amount of investments in subsidiaries and associates is determined in the same way as for non-financial assets.
For the purposes of impairment testing of the other financial assets the recoverable amount is determined based on the present value of future cash flows, discounted using the original assetspecific rate or a rate of a similar financial asset. Any resulting impairment losses are recognised in profit or loss.
In the case of equity investments classified as available for sale, a significant or prolonged decline in the fair value of the security below its cost is also evidence that the assets are impaired. If any such evidence exists for available-for-sale financial assets, the cumulative loss –measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in profit or loss– is removed from equity and recognised in profit or loss. Impairment losses recognised in the consolidated income statement on equity instruments are not reversed through the consolidated income statement.
Inventories are stated at the lower of cost and net realisable value. Cost is determined using the weighted average method. The cost of finished and semi-finished goods, by-products and work in progress comprises design costs, raw materials, direct labour, other direct costs and related production overheads. Net realisable value is the estimated selling price in the ordinary course of business, less applicable variable selling expenses and in case of work-in-progress estimated costs to completion.
Provisions for slow-moving or obsolete inventories are formed when necessary.
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment. A provision for impairment of trade receivables is established when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of receivables. The amount of the provision is the difference between the asset's carrying amount and the present value of estimated future cash flows, discounted at the effective interest rate. The amount of impairment provision is recognised in profit or loss.
Trade and other receivables are reduced by the amounts collected in advance under factoring agreements without recourse.
Cash and cash equivalents includes cash in hand, deposits held at call with banks and other shortterm highly liquid investments with original maturities of three months or less.
The Group classifies a non-current asset (or disposal group) as held for sale if its carrying amount will be recovered principally through a sale transaction rather than through continuing use.
The basic criteria to classify a non-current asset (or disposal group) as held for sale are that it must be available for immediate sale in its present condition subject only to terms that are usual and customary for sale of such assets and its sale must be highly probable.
For the sale to be highly probable:
Immediately prior to initial classification of a non-current asset (or disposal group) as held for sale, the asset (or the assets and liabilities included in the disposal group) will be measured in accordance with the applicable IFRSs.
Non-current assets (or disposal groups) that are classified as assets held for sale are stated at the lower of carrying amount and fair value less costs to sell and any possible resulting impairment losses are recognised in profit or loss. Any subsequent increase in fair value will be recognised in profit or loss, but not in excess of the cumulative impairment loss which was previously recognised.
While a non-current asset (or non-current assets that are included in a disposal group) is classified as held for sale, it should not be depreciated or amortised.
Share capital consists of the ordinary shares of the Company. Ordinary shares are classified as equity.
Incremental costs directly attributable to issue of shares, after deducting the tax, are reflected as a reduction of the proceeds. Incremental costs directly attributable to the issue of new shares for the acquisition of other entities are shown in reduction to the product of issue.
Where any Group company purchases the Company's equity share capital (treasury shares), the consideration paid, including any directly attributable incremental costs (net of income taxes), is deducted from equity attributable to the Company's equity holders until the shares are cancelled, reissued or disposed of. Where such shares are subsequently sold or reissued, any consideration received, net of any directly attributable incremental transaction costs and the related income tax effects, is included in equity attributable to the Company's equity holders.
Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption value is recognised in profit or loss over the period of the borrowings using the effective interest method.
Borrowing costs directly attributable to the construction of qualifying assets are added to the cost of those assets until such time as the assets are substantially ready for their intended use or sale. All other borrowing costs are recognised in profit or loss in the period in which they are incurred.
The tax expense for the period comprises current and deferred tax. Tax is recognised in the income statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.
Current income tax is computed based on the separate financial statements of each of the entities included in the consolidated financial statements, in accordance with the tax rules in force in Greece and other tax jurisdictions in which foreign subsidiaries operate. Current income tax expense consists of income taxes for the current year based on each entity's profits as adjusted in its tax returns and additional income taxes to cover potential tax assessments which are likely to occur from tax audits by the tax authorities, using the enacted tax rates.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. The deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction, other than a business combination, that at the time of the transaction affects neither accounting nor taxable profit or loss.
Deferred income tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.
Deferred income tax liabilities are provided on taxable temporary differences arising on investments in subsidiaries and associates, except for deferred income tax liability where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred income tax assets are recognised on deductible temporary differences arising from investments in subsidiaries and associates only to the extent that it is probable the temporary difference will reverse in the future and there is sufficient taxable profit available against which the temporary difference can be utilised.
Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realised or the deferred tax liability is settled.
Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.
The Group contributes to both defined benefit and defined contribution plans.
The accrued cost of defined contribution programs is recognised as expense during the relevant period.
The liability in respect of defined benefit pension or retirement plans is the present value of the defined benefit obligation at the balance sheet date. Independent actuaries using the projected unit credit method calculate the defined benefit obligation annually.
Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to equity in other comprehensive income in the period in which they arise.
Past-service costs are recognised immediately in profit or loss.
Termination benefits are payable when employment is terminated before the normal retirement date, or when an employee accepts voluntary redundancy in exchange for these benefits. The Group recognises termination benefits when it is demonstrably committed to either: terminating the employment of current employees according to a detailed formal plan without possibility of withdrawal; or providing termination benefits as a result of an offer made to encourage voluntary redundancy. Benefits falling due more than 12 months after balance sheet date are discounted to present value.
Where there is uncertainty about the number of employees who will accept an offer of termination benefits, the Group discloses information about the contingent liability.
The fair value of the employee services received in exchange for the grant of the share options is recognised as an expense. The total amount to be expensed over the vesting period is determined by reference to the fair value of the options granted. At each balance sheet date, the entity revises its estimates of the number of options that are expected to become exercisable. It recognises the impact of the revision of original estimates, if any, in profit or loss, and a corresponding adjustment to equity over the remaining vesting period. The proceeds received net of any directly attributable transaction costs are credited to share capital (nominal value) and share premium when the options are exercised. The Group does not have any share-based plans on the parent Company's shares.
Grants from the government are recognised at their fair value where there is a reasonable assurance that the grant will be received and the Group will comply with all attached conditions.
Government grants relating to costs are deferred and recognised in profit or loss over the period necessary to match them with the costs they are intended to compensate. Government grants relating to the purchase of property, plant and equipment are included in non-current liabilities and are credited to profit or loss on a straight-line basis over the expected lives of the related assets.
Provisions are recognised when:
The Group recognises a provision that represents the present value of the estimated liability for the repair or replacement of guaranteed products or concerning the delivery of projects/rendering of services at the balance sheet date. This provision is calculated on the basis of historical facts over repairs and replacements.
The claims over compensated absences are recognised as incurred. The Group recognises the expected cost of short-term employee benefits in the form of compensated absences based on their unused entitlement at the balance sheet date.
The Group recognises a provision with an immediate charge to profit or loss for loss-making construction contracts or long-term service contracts when the expected revenues are lower than the unavoidable expenses which are estimated to arise in order that the contract commitments are met.
For public-to-private service concession arrangements, the Group applies IFRIC 12 if the following conditions are met:
(a) the grantor controls or regulates what services the operator must provide with the infrastructure, to whom they must provide them, and at what price; and
(b) the grantor controls —through ownership, beneficial entitlement or otherwise— any significant residual interest in the infrastructure at the end of the term of the arrangement.
According to IFRIC 12, such infrastructure is not recognised by the operator as asset under property, plant and equipment, but as right to receive payments under financial assets according to the financial asset model and/or as Concession right under intangible assets according to the intangible asset model, depending on the contractually agreed terms.
If, according to the concession contract, the operator is paid for the construction services partly by a financial asset and partly by an intangible asset, the Group accounts separately for each component of the consideration, according to the above (Right to receive payments from grantor and Concession right).
The Group recognises and accounts for the revenue and cost arising from construction or upgrade services according to IAS 11 (note 2.28 (c)), while the revenue and cost arising from operation services is recognised and accounted for according to IAS 18 (note 2.28 (b)).
Revenue comprises the fair value of the sale of goods and services, net of value-added tax, rebates and discounts and after eliminating sales within the Group. Revenue is recognised as follows:
Sales of goods are recognised when a Group entity has delivered products to the customer; the customer has accepted the products; and collectibility of the related receivables is reasonably assured.
Sales of services are recognised in the accounting period in which the services are rendered, by reference to the stage of completion of the specific service. The stage of completion is assessed on the basis of the costs of the actual services provided until the balance sheet date as a proportion of the cost of the total estimated services to be provided under each contract. Costs of services are recognised in the period incurred. When the services to be provided under a contract cannot be reliably estimated, revenue is recognised only to the extent of costs incurred that are possibly recoverable.
Revenue from fixed price contracts are recognised, as long as the contract outcome can be estimated reliably, on the percentage of completion method, measured by reference to the percentage of labour hours incurred to date to estimated total labour hours for each contract.
Revenue from cost plus contracts is recognised by reference to the recoverable costs incurred during the period plus the fee earned, measured by the proportion that costs incurred to date bear to the estimated total costs of the contract.
Interest income is recognised on a time-proportion basis using the effective interest method. When a receivable is impaired, the Group reduces the carrying amount to its recoverable amount, being the estimated future cash flow discounted at original effective interest rate. Subsequently, interest is recognised on the impaired value.
Dividends are recognised when the right to receive payment is established.
Dividend distribution to the Company's shareholders is recognised as a liability in the Group's financial statements in the period in which the dividends are approved by the Company's shareholders.
Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the year, excluding ordinary shares held as treasury shares.
Diluted earnings per share is calculated by dividing the net profit attributable to equity holders of the Company (after deducting interest on convertible shares, net of tax) by the weighted average number of ordinary shares outstanding during the year (adjusted for the effect of dilutive convertible shares).
The weighted average number of ordinary shares outstanding during the period and for all periods presented shall be adjusted for events that have changed the number of ordinary shares outstanding without a corresponding change in resources.
Differences between amounts presented in the financial statements and corresponding amounts in the notes result from roundings.
INTRACOM SA, being a Greek multinational company, is exposed to a variety of financial risks, including market risk (the effects of changes in foreign currency exchange rates, cash flow and fair value risk from changes in interest rates and market prices), credit risk and liquidity risk. The Group's overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the Group as a whole.
The financial liabilities of the Group include short-term loans, long-term loans, bond loans and finance lease agreements, through which the Group finances its working capital and capital expenditure needs. Moreover, the Group manages financial assets, mainly short-term bank deposits arising from operating activities.
Where considered necessary, the Group uses derivative financial instruments exclusively for the hedging of interest or exchange rate risk, since according to the approved policy speculative use is not permitted.
In summary, the financial risks that arise are analysed below.
The foreign exchange risk of the Group is limited, since for most of the foreign currency receivables, there are corresponding payables in the same currency. Almost all foreign currency contracts for both assets and liabilities are denominated in USD.
In cases where natural hedge is not adequate due to large amounts of foreign currency payables, the Group may convert part of the borrowings to that currency or may use forward currency contracts.
The Group's policy is to maintain a minimum amount of cash in foreign currency, to meet shortterm liabilities in that currency.
The following table presents the sensitivity of the Group's net results in possible fluctuations of the foreign exchange rates for the years 2017 and 2016. This analysis takes into consideration borrowings and cash and cash equivalents of the Group, as well as trade receivables and payables in USD as at 31 December 2017 and 2016 respectively.
| Increase in EUR/USD | Effect on net results | Effect on net results |
|---|---|---|
| rate by | 31/12/2017 | 31/12/2016 |
| 3,00% | (445) | (212) |
| 6,00% | (889) | (424) |
| 9,00% | (1.334) | (636) |
| 12,00% | (1.779) | (848) |
The following table presents the sensitivity of the Company's net results in possible fluctuations of the foreign exchange rates for the years 2017 and 2016. This analysis takes into consideration borrowings and cash and cash equivalents of the Company, as well as trade receivables and payables in USD as at 31 December 2017 and 2016 respectively.
| Increase in EUR/USD | Effect on net results | Effect on net results |
|---|---|---|
| rate by | 31/12/2017 | 31/12/2016 |
| 3,00% | (24) | (30) |
| 6,00% | (48) | (60) |
| 9,00% | (72) | (89) |
| 12,00% | (96) | (119) |
The Group has limited exposure to changes in the prices of the shares held either for trading or as available for sale financial assets.
The interest-rate risk has been partly mitigated by converting a significant part of borrowings into floating rate taking advantage of the negative Euribor levels. The weighted average interest rate levels of 2017 have remained largely the same as 2016. It is estimated that during the current financial year the specific risk will be limited as it is considered highly probable that interest rates will remain stable in the short-term.
The following tables present the sensitivity of the Group's net results in possible fluctuations of the interest rates for the years 2017 and 2016. The analysis takes into consideration borrowings and cash and cash equivalents of the Group as at 31 December 2017 and 2016 respectively.
| Increase in interest | Effect on net results | Effect on net results |
|---|---|---|
| rates (Base units) | 31/12/2017 | 31/12/2016 |
| 25,00 | (272) | (209) |
| 50,00 | (543) | (418) |
| 75,00 | (815) | (627) |
| 100,00 | (1.086) | (836) |
| Increase in interest | Effect on net results | Effect on net results |
|---|---|---|
| rates (Base units) | 31/12/2017 | 31/12/2016 |
| 25,00 | 29 | 22 |
| 50,00 | 57 | 43 |
| 75,00 | 86 | 65 |
| 100,00 | 115 | 86 |
The following tables present the sensitivity of the Company's net results in possible fluctuations of the interest rates for the years 2017 and 2016. The analysis takes into consideration borrowings and cash and cash equivalents of the Company as at 31 December 2017 and 2016 respectively.
| Increase in interest | Effect on net results | Effect on net results |
|---|---|---|
| rates (Base units) | 31/12/2017 | 31/12/2016 |
| 25,00 | 22 | 70 |
| 50,00 | 45 | 141 |
| 75,00 | 67 | 211 |
| 100,00 | 90 | 281 |
Financial instruments in USD
| Increase in interest | Effect on net results | Effect on net results |
|---|---|---|
| rates (Base units) | 31/12/2017 | 31/12/2016 |
| 25,00 | 2 | 3 |
| 50,00 | 4 | 5 |
| 75,00 | 6 | 8 |
| 100,00 | 8 | 10 |
The sales transactions of the Group are made to private companies and public sector organisations with an appropriate credit history, with which in many cases there is a long standing relationship. In any case, though, and given the current circumstances of the Greek economy, the Group monitors very closely trade receivables and when needed it takes legal and non-legal actions so as to ensure the collectibility of these receivables, thus minimising credit risk. As a result, the risk of doubtful debts is considered limited.
Regarding credit risk related to cash deposits, the Group collaborates only with financial institutions of high credit rating.
Each subsidiary draws up and monitors on a monthly basis a cash flow schedule that includes the operating as well as the investing cash flows. All subsidiaries submit to Intracom Holdings on a weekly basis a detailed report of their cash and credit position, in order that an effective monitoring and co-ordination on a group level is achieved.
Prudent liquidity management is achieved by an appropriate combination of cash and cash equivalents and approved bank facilities. The Group manages the risks that may arise from lack of adequate liquidity by ensuring there are always approved bank facilities for use. The undrawn borrowing facilities available to the Group are sufficient to address any potential shortfall in cash.
On 31 December 2017 current and non-current borrowings of the Group amounted to 56% (2016: 62%) and 44% (2016: 38%) of total borrowings respectively.
As regards capital controls that were enforced in Greece, the Group's international activity and export-oriented model help Group companies to overcome any difficulties that arise and continue to operate properly in every aspect of the business.
The Group's objectives when managing capital are to safeguard the Group's ability to continue as a going concern and to maintain an optimal capital structure to reduce the cost of capital.
Group's capital is considered sufficient on the basis of the gearing ratio. This ratio is calculated as net debt divided by total capital employed. Net debt is calculated as total borrowings (including 'current and non-current borrowings' as shown in the consolidated balance sheet) less 'cash and cash equivalents'. Total capital employed is calculated as 'equity attributable to Company's equity holders' as shown in the consolidated balance sheet plus net debt.
| Group | Company | ||||
|---|---|---|---|---|---|
| 1/1 - 31/12/2017 | 1/1 - 31/12/2016 1/1 - 31/12/2017 | 1/1 - 31/12/2016 | |||
| Total borrowings (note 24) | 243.487 | 177.999 | 51.394 | 23.251 | |
| Less: Cash and cash equivalents (note 21) | (148.226) | (107.971) | (61.130) | (52.005) | |
| Net borrowings | 95.261 | 70.028 | (9.736) | (28.754) | |
| Equity | 270.295 | 272.196 | 268.623 | 268.336 | |
| Total capital employed | 365.556 | 342.224 | 258.887 | 239.582 | |
| Gearing ratio | 26,06% | 20,46% | -3,76% | -12,00% |
The Group provides the required disclosures relating to fair value measurement through a threelevel hierarchy.
At 31 December 2017 the Group had:
At 31 December 2016 the Group had:
There were not any transfers between level 1 and 2 during the year.
The quoted market prices of shares traded in active markets were used for the evaluation of financial assets.
On 31 December 2017 and 2016 the Group does not have any financial assets and liabilities subject to offsetting, enforceable master netting arrangements and similar agreements.
Estimates and judgements are regularly reviewed and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the current circumstances.
The Group makes estimates and assumptions concerning the future. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below:
The estimation of the impairment of land and buildings (including investment property) required the performance of estimations which mainly relate to the cause, the time and the amount of impairment. The Group assesses in each reporting period whether there are indications that the value of PPE and investment property has been impaired based on the accounting principle applied. Management makes significant estimates in order to estimate recoverable value. Impairment testing is performed by Management in cooperation with independent valuers.
The Group tests annually whether goodwill has suffered any impairment. These tests are based either on discounted cash flows (calculation of value in use) of cash generating units, or on fair values less costs to sell.
There are no cases whereby Management was required to exercise significant judgement regarding the application of the accounting policies.
At 31 December 2017, the Group is organised into three main segments:
The segment information for the year ended 31 December 2017 is as follows:
| Technology solutions for government and banking sector |
Defence systems |
Construction | Other | Total | |
|---|---|---|---|---|---|
| Total sales | 175.647 | 65.856 | 160.326 | 2.554 | 404.383 |
| Inter-segment sales | (2.532) | (44) | (2.401) | (2.277) | (7.254) |
| Sales from external customers | 173.115 | 65.812 | 157.925 | 277 | 397.129 |
| Operating profit / (loss) | 9.038 | 2.521 | 10.287 | (628) | 21.217 |
| Earnings before interest, tax, depreciation, amortisation | |||||
| and impairment (EBITDA) | 10.535 | 3.828 | 14.087 | 894 | 29.344 |
| Depreciation (note 29) | (1.497) | (1.307) | (3.757) | (1.522) | (8.083) |
| Finance income (note 33) | 524 | 2.108 | 517 | 1.324 | 4.473 |
| Finance expenses (note 33) | (4.877) | (1.423) | (13.124) | (1.579) | (21.003) |
| Share of profit / (losses) of associates | - | - | (472) | (50) | (521) |
| Income tax | (1.527) | (1.177) | (2.595) | 27 | (5.273) |
| Impairment of receivables (note 29) | 37 | (21) | (2.068) | - | (2.052) |
| Impairment of inventory (note 29) | 4 | 152 | - | - | 156 |
| Total assets | 160.759 | 96.210 | 329.410 | 203.174 | 789.552 |
| Total assets include: | |||||
| Investments in associates (note 11) | 4 | - | 10.218 | - | 10.221 |
| Non-current assets* | 20.792 | 33.165 | 116.234 | 62.808 | 233.000 |
| Additions in non-current assets* (notes 6, 7, 8 and 9) | 3.475 | 826 | 29.635 | 57 | 33.994 |
| Total liabilities | 140.199 | 30.224 | 255.230 | 93.604 | 519.258 |
* Includes PPE, investment property, intangible assets and goodwill.
The segment information for the year ended 31 December 2016 is as follows:
| Technology solutions for government and banking sector |
Defence systems |
Construction | Other | Total | |
|---|---|---|---|---|---|
| Total sales | 180.397 | 57.437 | 182.384 | 3.098 | 423.315 |
| Inter-segment sales | (15.254) | - | (4.103) | (2.301) | (21.659) |
| Sales from external customers | 165.142 | 57.437 | 178.281 | 796 | 401.656 |
| Operating profit / (loss) | 9.358 | 1.543 | 6.370 | (1.581) | 15.690 |
| Earnings before interest, tax, depreciation, | |||||
| amortisation and impairment (EBITDA) | 11.651 | 3.041 | 12.619 | 506 | 27.817 |
| Depreciation (note 29) | (1.390) | (1.497) | (4.002) | (1.538) | (8.428) |
| Impairment of investment property, tangible and | |||||
| intangible assets | - | - | - | (86) | (86) |
| Finance income (note 33) | 665 | 9 | 45 | 1.367 | 2.086 |
| Finance expenses (note 33) | (4.459) | 47 | (10.386) | (1.861) | (16.658) |
| Share of profit / (losses) of associates | - | - | (77) | (39) | (117) |
| Income tax | (2.819) | (688) | (2.541) | 24 | (6.024) |
| Impairment of receivables (note 29) | (187) | - | 65 | - | (122) |
| Impairment of inventory (note 29) | 11 | (2.027) | - | - | (2.016) |
| Total assets | 161.308 | 113.763 | 282.867 | 170.642 | 728.581 |
| Total assets include: | |||||
| Investments in associates (note 11) | - | - | 597 | - | 597 |
| Non-current assets* | 19.200 | 33.646 | 107.213 | 64.608 | 224.668 |
| Additions in non-current assets* (notes 6, 7, 8 and | |||||
| 9) | 896 | 453 | 24.393 | 437 | 26.178 |
| Total liabilities | 140.714 | 49.744 | 224.186 | 41.743 | 456.386 |
* Includes PPE, investment property, intangible assets and goodwill.
The activities of the parent company Intracom Holdings SA, as well as its assets and liabilities are included under the column 'Other'. The assets consist primarily of property, plant and equipment and investment property.
The reconciliation of earnings before interest, tax, depreciation and amortisation (EBITDA) against profit/(loss) before tax is as follows:
31 December 2017
(All amounts in €'000)
| 1/1 - 31/12/2016 | ||
|---|---|---|
| 1/1 - 31/12/2017 | Restated* | |
| Earnings before interest, tax, depreciation, | ||
| amortisation and impairment (EBITDA) | 29.344 | 27.817 |
| Depreciation | (8.083) | (8.428) |
| Impairment losses from tangible, intangible assets and | ||
| investment property | - | (86) |
| Finance cost - net (note 33) | (16.531) | (14.573) |
| Loss from associates | (521) | (117) |
| Impairment of available-for-sale financial assets (note 32) | (44) | (3.613) |
| Gain / (Loss) before income tax | 4.166 | 1.001 |
The Group's adjusted ΕΒΙTDA for financial year 2017 amounts to €30.367, after incorporating the EBITDA of the subsidiary GNS amounting to €-1.022, which is under liquidation.
The Group's adjusted EBITDA for financial year 2016 amounted to €31.677, after incorporating the EBITDA of the subsidiary GNS amounting to €441 and the provision concerning the fine imposed by Hellenic Competition Commission to the subsidiary Intrakat SA which amounts to €-4.300.
Adjusted EBITDA serves the more detailed analysis of the Group's operating results, excluding the effect of non-recurring items and results from discontinued operations.
Intersegment transfers or transactions are conducted under the normal commercial terms and conditions that would also apply to independent third parties.
Information per geographical area:
| Sales | 1/1 - 31/12/2017 | 1/1 - 31/12/2016 |
|---|---|---|
| Greece | 183.025 | 204.285 |
| European Community | 110.864 | 126.876 |
| Other European countries | 10.134 | 8.524 |
| Other countries | 93.106 | 61.972 |
| Total | 397.129 | 401.656 |
| Non-current assets | ||
| Restated * | 31/12/2017 | 31/12/2016 |
| Greece | 228.271 | 204.570 |
| European Community | 9.251 | 15.283 |
| Other European countries | 1.889 | - |
| Other countries | 3.809 | 5.410 |
| Total | 243.220 | 225.264 |
* Includes PPE, investment property, intangible assets, goodwill and investments in associates.
Sales are allocated based on the country in which the customer is located. Assets are allocated based on their geographical location.
| Land-Buildings | Machinery | Vehicles | Telecommunications Equipment |
Furniture & other equipment |
Prepayments and assets under construction |
Total | |
|---|---|---|---|---|---|---|---|
| Cost | |||||||
| Balance 1 January 2016 | 103.392 | 75.411 | 2.451 | 997 | 13.701 | 6.260 | 202.211 |
| Exchange differences | (20) | 2 | 3 | 26 | 7 | - | 18 |
| Additions | 444 | 1.294 | 61 | 19 | 431 | - | 2.248 |
| Disposals | (245) | (1.451) | (97) | (1) | (3.692) | - | (5.487) |
| Impairment | (61) | - | - | - | - | - | (61) |
| Acquisition of control | - | - | - | - | 8 | - | 8 |
| Reclassifications | 44 | - | - | - | - | (44) | - |
| Transfer to investment property (note 9) | (56) | - | - | - | - | (872) | (928) |
| Transfer from investment property (note 9) | 2.829 | - | - | - | - | - | 2.829 |
| Balance 31 December 2016 | 106.325 | 75.255 | 2.417 | 1.041 | 10.456 | 5.345 | 200.839 |
| Balance 1 January 2017 | 106.325 | 75.255 | 2.417 | 1.041 | 10.456 | 5.345 | 200.839 |
| Exchange differences | (23) | (2) | (11) | (108) | (34) | (1) | (179) |
| Additions | 386 | 5.005 | 212 | 428 | 1.560 | 2.987 | 10.578 |
| Disposals/Write-offs | (152) | (1.735) | (298) | (542) | (135) | (2) | (2.864) |
| Acquisition of control | - | - | 36 | - | 38 | - | 73 |
| Reclassifications | 2.866 | 70 | - | - | - | (2.936) | - |
| Transfer to investment property (note 9) | (913) | - | - | - | - | - | (913) |
| Transfer from investment property (note 9) | 193 | - | - | - | - | - | 193 |
| Disposal of branch | - | (26) | (4) | - | (33) | - | (63) |
| Balance 31 December 2017 | 108.682 | 78.567 | 2.352 | 818 | 11.852 | 5.393 | 207.664 |
| Accumulated depreciation | |||||||
| Balance 1 January 2016 | 32.443 | 31.999 | 2.061 | 775 | 12.214 | - | 79.492 |
| Exchange differences | 1 | (2) | 2 | 24 | 6 | - | 31 |
| Depreciation charge | 1.901 | 3.890 | 134 | 105 | 404 | - | 6.433 |
| Disposals | (41) | (1.082) | (91) | - | (3.688) | - | (4.902) |
| Transfer from investment property (note 9) | 60 | - | - | - | - | - | 60 |
| Balance 31 December 2016 | 34.365 | 34.805 | 2.106 | 905 | 8.935 | - | 81.115 |
| Balance 1 January 2017 | 34.365 | 34.805 | 2.106 | 905 | 8.935 | - | 81.115 |
| Exchange differences | (12) | (9) | (5) | (92) | (24) | - | (143) |
| Depreciation charge | 1.970 | 3.451 | 120 | 93 | 526 | - | 6.159 |
| Disposals/Write-offs | (62) | (1.115) | (261) | (540) | (130) | - | (2.107) |
| Additions from acquisitions (note 42) | ` | - | 36 | - | 38 | - | 73 |
| Transfer to investment property (note 9) | (5) | - | - | - | - | - | (5) |
| Transfer from investment property (note 9) | 44 | - | - | - | - | - | 44 |
| Disposal of branch | - | (23) | (4) | - | (30) | - | (56) |
| Balance 31 December 2017 | 36.299 | 37.108 | 1.991 | 365 | 9.316 | - | 85.079 |
| Net book amount at 31 December 2016 | 71.961 | 40.451 | 311 | 136 | 1.520 | 5.345 | 119.726 |
| Net book amount at 31 December 2017 | 72.383 | 41.459 | 361 | 453 | 2.536 | 5.393 | 122.586 |
The Group performed a test for impairment of property, plant and equipment and investment property as at 31 December 2017 and 31 December 2016. The assessment did not result in impairment both for the Group and the Company for 2017 (2016: €86 for the Group and the Company).
Property, plant and equipment include assets held under finance lease as follows:
| Machinery | Vehicles | Total | |
|---|---|---|---|
| 31/12/2016 | |||
| Cost | 568 | - | 568 |
| Accumulated depreciation | (354) | - | (354) |
| Net book amount | 214 | - | 214 |
| 31/12/2017 | |||
| Cost | 3.360 | 44 | 3.404 |
| Accumulated depreciation | (381) | (2) | (383) |
| Net book amount | 2.979 | 42 | 3.021 |
| Furniture & other | |||||
|---|---|---|---|---|---|
| Land-Buildings | Machinery | Vehicles | equipment | Total | |
| Cost | |||||
| Balance 1 January 2016 | 14.714 | 904 | 163 | 3.740 | 19.521 |
| Additions | 114 | - | - | 76 | 189 |
| Disposals/Write-offs | (12) | (796) | (27) | (3.482) | (4.317) |
| Impairment | (28) | - | - | - | (28) |
| Balance 31 December 2016 | 14.788 | 108 | 135 | 333 | 15.365 |
| Balance 1 January 2017 | 14.788 | 108 | 135 | 333 | 15.365 |
| Additions | - | - | - | 8 | 8 |
| Transfer to investment property (note 9) | (1.786) | - | - | - | (1.786) |
| Transfer from investment property (note 9) | 18 | - | - | - | 18 |
| Balance 31 December 2017 | 13.020 | 108 | 135 | 341 | 13.604 |
| Accumulated depreciation | |||||
| Balance 1 January 2016 | 4.910 | 878 | 148 | 3.632 | 9.567 |
| Depreciation charge | 226 | 6 | 7 | 42 | 280 |
| Disposals/Write-offs | (3) | (795) | (27) | (3.482) | (4.307) |
| Balance 31 December 2016 | 5.133 | 89 | 127 | 192 | 5.541 |
| Balance 1 January 2017 | 5.133 | 89 | 127 | 192 | 5.541 |
| Depreciation charge | 209 | 4 | 3 | 18 | 234 |
| Transfer to investment property (note 9) | (561) | - | - | - | (561) |
| Transfer from investment property (note 9) | 6 | - | - | - | 6 |
| Balance 31 December 2017 | 4.787 | 93 | 130 | 210 | 5.220 |
| Net book amount at 31 December 2016 | 9.655 | 19 | 8 | 141 | 9.824 |
| Net book amount at 31 December 2017 | 8.233 | 15 | 5 | 131 | 8.384 |
During prior years, the Company entered into sale and lease back agreements of property and investment property with net book value amounting to €14.867 in 2017 (2016: €15.175).
Liabilities are secured against fixed assets of the Group and the Company for the value of €73.420 and €2.400 respectively.
| Group | |
|---|---|
| Balance 1 January 2016 | 20.061 |
| Acquisition of control | 116 |
| Balance 31 December 2016 | 20.177 |
| Balance 1 January 2017 | 20.177 |
| Acquisition of control | 17.388 |
| Balance 31 December 2017 | 37.565 |
Goodwill has resulted from the acquisition of the companies listed below and is allocated to cash generating units (CGUs) as follows:
| 31/12/2017 31/12/2016 | ||
|---|---|---|
| Intrasoft International SA | 11.361 | 11.361 |
| Intrasoft International Scandinavia (former IT Services Denmark A/S) | 2.211 | 2.212 |
| Intrakat SA | 3.562 | 3.562 |
| INTRAPAR SA | 17.388 | - |
| Prisma - Domi ΑΤΕ (absorbed from Intrakat SA) | 326 | 326 |
| Inestia Touristiki SA | 116 | 116 |
| AMBTILA Enterprises Ltd | 2.600 | 2.600 |
| 37.565 | 20.177 |
In order to assess whether there is goodwill impairment as at 31 December 2017, the Group performed the relevant impairment tests, at Group level, on cash generating units (CGUs) to which goodwill has been allocated.
Τhe recoverable amount of goodwill arising from the acquisition of ΙNTRAPAR SA in 2017 which amounts to €17.388 has been determined using the method and assumptions analysed below.
The recoverable amount of goodwill allocated to other significant CGUs has been determined based on value-in-use. Value-in-use reflects the present value of expected future cash flows of the CGU discounted at a rate that reflects the time value of money and the risks associated with the CGU. The cash flow projections for the cash generating units Intrasoft International SA and Intrasoft International Scandinavia are based on the business plans for the five year period 2018-2022, while for Intrakat SA- construction segments they have been based on the business plans for the threeyear period 2018–2020. The above business plans have been approved by the Boards of Directors of Group companies and have been prepared based on 2017 results, while cash flows beyond the fiveyear and three-year period have been extrapolated using the perpetual growth rate as presented below.
The cash generating unit Ambtila Enterprises Ltd concerns the subsidiary company A. Katselis Energeiaki SA, which has obtained a wind park operation licence. Cash flow projections have been based on the budget of the wind park operation project, the duration of which is estimated at 20 years and which is considered to have zero residual value.
The goodwill amounting to €3.562 in the line "Intrakat SA" has resulted from the absorption of the sectors of three companies from the subsidiary Intrakat SA in financial year 2008. These sectors are not monitored as individual CGUs as they have been fully absorbed, thus the overall evaluation of Intrakat is taken into account for testing goodwill impairment.
The key assumptions used for the most significant CGUs, as described above, are as follows:
| Intrasoft | Intrakat SA | |||
|---|---|---|---|---|
| Intrasoft | International | construction | Ambtila | |
| International SA | Scandinavia | segments | Enterprises Ltd | |
| Revenue growth | 1,6% - 3,0% | 1,5% | 3,5% - 10% | 0,0% |
| Gross margin | 9,19% - 9,99% | 76,7% - 77,8% | 15,0% - 16,0% | - |
| EBITDA margin | 5,35% - 5,81% | 18,4% - 21,3% | 8,9% - 10,2% | 80,4% - 83,6% |
| Perpetuity growth rate | 1,0% | 1,0% | 1,1% | - |
| Discount rate | 7,8% | 7,6% | 13,3% | 9,0% |
The key assumptions used for value-in-use calculation are based on past performance as well as on expectations of the future development of operations and are consistent with external factors.
Based on the tests performed, the recoverable amount of goodwill exceeds its carrying value and there is no impairment loss.
From the sensitivity analysis for the recoverable value of goodwill there were no possible changes in key assumptions, as presented above, that would result in the recognition of impairment loss related to goodwill.
As regards the estimation of the recoverable amount of goodwill generated from the acquisition of INTRAPAR, which is described in detail in note 42, the entire shareholding was considered as CGU and the following facts were taken into consideration:
Based on the above, the recoverable amount of the goodwill generated from the acquisition was estimated using INTRAPAR's fair value (less distribution costs), which was estimated based on its share in KEKROPS assets' fair value.
The fair value of KEKROPS' assets was estimated based on an adjustment of its properties (land and buildings) to current values (less costs to sell), as a result the adjusted equity of KEKROPS was estimated as of the reporting date, which was incorporated in INTRAPAR. As a result, INTRAPAR's recoverable amount was estimated based on its adjusted equity as of the reporting date, after the necessary adjustments in the associate's assets to current values (less costs to sell).
The measurement of properties (owner-occupied, investment and disputed property) at fair value was determined taking into consideration the Company's ability to achieve maximum and optimum use, assessing each item's use provided that it is practically, financially and legally feasible. This assessment is based on physical features, permitted use and opportunity costs of existing investments.
It must be noted that regarding the properties of KEKROPS for which there is a dispute with the Greek State, the Supreme Court issued the decision No 589/2018 which upheld the appeal filed by KEKROPS against the Supreme Court's No 3401/2014 against the Greek State. More specifically, this decision nullified the decision of the Court of Appeals against the Company, as, in breach of article 281 AK, it had rejected as illegitimate the objection for abusive use of the Greek State's right of ownership, by which KEKROPS claimed that the Greek State for at least 70 years expressly acknowledged the Company's ownership through a number of declaratory actions. As a result, the case will be discussed again before the Athens Court of Appeal for essential judgement, according to the above binding for the Court of Appeal judgements of the Supreme Court. The Supreme Court's decision combined with the provisions of IFRS 13 (BC69) provides to Management the basis to support the legally permissible use of the disputed properties.
The valuation methods and assumptions used for KEKROPS' properties per property category are presented in the following table:
| Elements | Method | Main parameters |
|---|---|---|
| Owner-occupied tangible fixed | Comparable data approach | Land plot 5.102,07 sqm |
| assets | Depreciated replacement | Building 1.608,05 sqm |
| cost approach | Surface for additional bulding 3.683,47 sqm | |
| Buildings 1.500 €/sqm | ||
| Land plots 1.600 €/sqm | ||
| Cost 800 €/sqm | ||
| Depreciation index 0,364 | ||
| Investment property | Income approach | Surface 1.388,97 sqm |
| (vacant stores) | Total annual rent € 246 thousand | |
| Annual Yield 8,25% | ||
| Investment property | Comparable data approach | Land plots |
| (land plots in Psychiko & | Residual approach | 1.2000,00 €/sqm - 1.850,00 €/sqm |
| Halandri) | ||
| Properties under law dispute | ||
| Area outside planning zone | Discounted cash flow | Area 224.000 sqm |
| approach | Exploitable area for private urban planning 80.640 sqm (62 x 1.500) | |
| 1.800,00 €/sqm | ||
| Promotion cost 2% | ||
| Infastructure cost € 9,4 ml in 2 years | ||
| Financing 50% | ||
| Interest rate 9% | ||
| Sales of land plots from 2019 (2-years grace period for borrowings) | ||
| Repayment in 8 years | ||
| Discount rate 13,5% | ||
| Area inside planning zone | Comparable data approach | Land plots |
| Land plots in Psychiko | Residual approach | 1.790,00 €/sqm - 1.820,00 €/sqm |
| Apartment | Comparable data approach | Estimated surface 427,46 sqm |
| 5.400,00 €/sqm | ||
| 50% ownership |
According to the results of impairment testing, the adjusted equity of INTRAPAR is higher than its carrying value, as a result no impairment loss has been recognised.
| Software software Trade name Relationships Concession rights Other Total Cost Balance 1 January 2016 20.853 29.262 661 1.707 1.389 234 54.105 - 48 - - - 5 54 99 500 - - 1.857 - 2.457 (1.988) - - - - - (1.988) 17 - - - - - 17 Balance 31 December 2016 18.981 29.811 661 1.707 3.246 239 54.645 Balance 1 January 2017 18.981 29.811 661 1.707 3.246 240 54.645 Exchange differences 199 (406) - - - (182) (389) Additions 739 1.571 - - 2.546 3 4.860 Disposals / write-offs (205) - - - - (6) (211) Balance 31 December 2017 19.713 30.976 661 1.707 5.792 55 58.904 Accumulated amortisation Balance 1 January 2016 19.533 27.676 - 1.707 - 52 48.969 Exchange differences - 21 - - - - 21 Amortisation charge 590 381 - - - - 972 Disposals / write-offs (1.988) - - - - - (1.988) Additions from acquisitions (note 42) 3 - - - - - 3 Balance 31 December 2016 18.139 28.079 - 1.707 - 52 47.977 Balance 1 January 2017 18.139 28.078 - 1.707 - 52 47.977 Exchange differences 207 (302) - - - - (95) Amortisation charge 400 489 - - - - 890 Disposals / write-offs (204) - - - - - (204) Balance 31 December 2017 18.541 28.266 - 1.707 - 52 48.568 Net book amount at 31 December 2016 842 1.732 661 - 3.246 187 6.667 Net book amount at 31 December 2017 1.172 2.710 661 - 5.792 2 10.336 |
Internally generated |
Customers | |||
|---|---|---|---|---|---|
| Exchange differences | |||||
| Additions | |||||
| Disposals / write-offs | |||||
| Additions from acquisitions (note 42) | |||||
The concession right is held by the subsidiary Rural Connect SA, which has been assigned by Information Society SA (the "Grantor") with the construction, operation and maintenance for a 17 year period of the project "Development of broadband infrastructure in disadvantaged rural areas ("white areas") of Greece and operation of the infrastructure". The broadband network infrastructure will return to the Grantor when the concession agreement expires. For the right to receive payments from grantor refer to note 19.
| Software | Total | |
|---|---|---|
| Cost | ||
| Balance 1 January 2016 | 1.980 | 1.980 |
| Write-offs | (1.972) | (1.972) |
| Balance 31 December 2016 | 8 | 8 |
| Balance 1 January 2017 | 8 | 8 |
| Additions | 39 | 39 |
| Balance 31 December 2017 | 47 | 47 |
| Accumulated amortisation | ||
| Balance 1 January 2016 | 1.977 | 1.977 |
| Amortisation charge | 2 | 2 |
| Write-offs | (1.973) | (1.973) |
| Balance 31 December 2016 | 6 | 6 |
| Balance 1 January 2017 | 6 | 6 |
| Amortisation charge | 10 | 10 |
| Balance 31 December 2017 | 16 | 16 |
| Net book amount at 31 December 2016 | 2 | 2 |
| Net book amount at 31 December 2017 | 31 | 31 |
| Group | Company | |
|---|---|---|
| Cost | ||
| Balance 1 January 2016 | 74.193 | 72.448 |
| Exchange differences | 106 | - |
| Additions | 21.356 | 247 |
| Impairment | (25) | (58) |
| Transfer to PPE (note 6) | (2.829) | - |
| Transfer from PPE (note 6) | 928 | - |
| Balance 31 December 2016 restated* | 93.729 | 72.638 |
| Balance 1 January 2017 | 93.729 | 72.638 |
| Exchange differences | (518) | - |
| Additions | 776 | 10 |
| Additions from acquisitions | 320 | - |
| Loss of control in subsidiary (note 11) | (11.875) | - |
| Transfer to receivables | (847) | - |
| Disposals | (910) | - |
| Transfer to PPE (note 6) | (193) | (18) |
| Transfer from PPE (note 6) | 913 | 1.786 |
| Transfer to inventory | (2.361) | - |
| Balance 31 December 2017 | 79.035 | 74.416 |
| Accumulated depreciation | ||
| Balance 1 January 2016 | 14.641 | 19.443 |
| Exchange differences | 28 | - |
| Transfer to PPE (note 6) | (60) | - |
| Depreciation charge | 1.022 | 1.200 |
| Balance 31 December 2016 | 15.632 | 20.643 |
| Balance 1 January 2017 | 15.632 | 20.643 |
| Exchange differences | (105) | - |
| Transfer to PPE (note 6) | (44) | (6) |
| Transfer from PPE (note 6) | 5 | 561 |
| Depreciation charge | 1.034 | 1.225 |
| Balance 31 December 2017 | 16.523 | 22.423 |
| Net book amount at 31 December 2016 | 78.097 | 51.995 |
| Net book amount at 31 December 2017 | 62.513 | 51.994 |
(*) Refer to note 43.
Rental income from investment properties for 2017 amounted to €1.679 and €2.382 for the Group and the Company respectively (2016: €2.382 and €2.687 for the Group and the Company respectively).
For the impairment of investment property refer to note 6.
The movement in investments in subsidiaries is analysed as follows:
| Company | |||||
|---|---|---|---|---|---|
| 31/12/2017 31/12/2016 |
|||||
| Balance at the beginning of the year | 132.312 | 133.377 | |||
| Additions/share capital increases | 21.846 | - | |||
| Impairment | - | (1.065) | |||
| Balance at the end of the year | 154.158 | 132.312 |
The interests held in subsidiaries and their carrying amounts at 31 December are as follows:
| 31/12/2017 | 31/12/2016 | ||||
|---|---|---|---|---|---|
| Country of | % interest | Carrying | % interest | Carrying | |
| Name | incorporation | held | value | held | value |
| Intrasoft International SA | Luxembourg | 99,99% | 52.407 | 99,99% | 52.407 |
| Intracom SA Defence Electronic Systems | Greece | 100% | 52.780 | 100% | 52.780 |
| Intrakat SA | Greece | 79,56% | 34.255 | 61,76% | 22.030 |
| Intradevelopment SA* | Greece | 62,39% | 9.252 | - | - |
| Intracom Holdings International Ltd | Cyprus | 100% | 4.675 | 100% | 4.305 |
| Intracom Group USA Inc** | USA | 2,91% | 65 | 2,91% | 65 |
| Rural Connect SA** | Greece | 30,00% | 725 | 30,00% | 725 |
| 154.158 | 132.312 |
(*) The total shareholding as at 31 December 2017 is 92,31% through the participation of the subsidiary Intrakat SA (2016: 61,76%).
(**) The total shareholding as at 31 December 2017 is 100% through the participation of subsidiaries of the Group (2016: 100%).
(***) The total shareholding as at 31 December 2017 is 87,73% through the participation of the subsidiary Intrakat SA (2016: 67,06%).
The above list contains only the direct investments in subsidiaries. A list of all the direct and indirect interests in subsidiaries is presented in note 41.
Split-up of subsidiary Inmaint
The subsidiary Inmaint decided its split-up into two parts. One part was absorbed by the subsidiary Intrapower SA and the other part was absorbed by a third party outside the Group. The split-up was approved on 31.08.2017.
Assets and liabilities transferred amounted to €887 and €830 respectively.
The activity of the division transferred was not significant.
On 30.03.2017, the subsidiary Ιntrasoft acquired 10% of Rural's shares from non-controlling interests for €242. This amount decreased Group's equity.
On 26 June 2017, the general meeting of the Company's shareholders decided to increase the interest held in the subsidiary Intrakat by offsetting receivables amounting to €3.051. Subsequently, the Company participated in the share capital increase of Intrakat in cash, which was decided by Intrakat's extraordinary general meeting of shareholders held on 7 July 2017 and was completed in October with a payment amounting to €8.180. Minority interests' contribution in the share capital increase amounted to €1.979. Combined with the acquisition of shares from the Stock Exchange for €993, the total interest held reached 79,56%. As a result of the above transactions, Group's equity increased by €986 and the effect on non-controlling interests was a decrease of €6.339.
On 14 June 2017, the Company acquired from its subsidiary Intrakat 50% of the latter's shares in Ιntradevelopment for €1.500. The total consideration as at 31 December 2017 has not been repaid and is included in the Company's liabilities. Subsequently, the Company participated in two share capital increases of Intradevelopment contributing €7.752. As a result of the second share capital increase that took place on 30.11.2017, the direct shareholding of the Company in Ιntradevelopment became 62,39%, while the indirect shareholding reached 92,31% (31.12.2016: 61,76%). As a result of the above transactions, Group's equity increased by €1.199 with an equal increase in non-controlling interests.
The Company also participated in a share capital increase in the subsidiary Intracom Holdings International Ltd with the amount of €370.
The subsidiary Intrakat SA acquired from the minority shareholders 54,71% of its subsidiary EUROKAT ATE for €613 and, as a result, it's interest in the subsidiary reached 100%. The Group's equity decreased by €613 while non-controlling interests decreased by €386.
Intra-hospitality S.A, a subsidiary of Intrakat SA, increased its share capital by €24 which was covered in full by non-controlling interests. This resulted in the increase of the total interest held in Intrablue Hospitality by 50%, with Intrakat SA maintaining control. A further 50% interest was subsequently acquired for €24 by minority shareholders and as a result the total interest held in the subsidiary reached 100%. The above transactions had no effect on the Group's equity, while non-controlling interests increased by €2.
On 21.07.2016 the subsidiary Intrakat SA, acquired a 60% stake in ΑΚ ENERGEIAKI SA for €4.000, which holds an interest of 50% in the subsidiary of the Group Α.KATSELIS ENERGEIAKI SA. As a result, the Group acquired an additional stake of 30% in the subsidiary Α. KATSELIS ENERGEIAKI SA. and its total interest held reached 80%. The decrease in the Group's equity was €4.000 while the decrease in non-controlling interests was €1.897.
The subsidiary Inrakat SA participated, through its own subsidiary, in the share capital increase of the associate INESTIA TOURISTIKI SA for €126. On 12.12.2016 the sub-group Intrakat SA acquired control of INESTIA TOURISTIKI SA, with no change in the interest held. As a result, on 12.12.2016 INESTIA TOURISTIKI SA was derecognised from investments in associates (note 11) and is now included in the Group's financial statements as a subsidiary. The effect of the acquisition of control in the subsidiary was not significant for the Group.
At 31 December 2017, total non-controlling interests amounted to €13.071 (2016: €20.927), out of which €11.694 relates to Intrakat Group (2016: €19.489), €118 relates to Advanced Passport Telematics (2016: €185) and €1.259 to Intrasoft International SA (2016: €1.254).
There are no significant restrictions as regards the Group's assets or settlement of liabilities.
Below is provided the summarised financial information of the subsidiary:
| Intrakat SA | ||||
|---|---|---|---|---|
| 31/12/2017 | 31/12/2016 | |||
| Assets | ||||
| Current assets | 187.688 | 178.311 | ||
| Non-current assets | 140.685 | 110.715 | ||
| Total assets | 328.373 | 289.026 | ||
| Liabilities | ||||
| Current liabilities | 169.960 | 180.802 | ||
| Non-current liabilities | 94.065 | 57.158 | ||
| Total liabilities | 264.025 | 237.960 | ||
| Net assets | 64.347 | 51.066 |
| Intrakat SA | ||||
|---|---|---|---|---|
| 1/1- 31/12/2017 | 1/1- 31/12/2016 | |||
| Sales | 160.326 | 182.384 | ||
| Profit / (losses) before income tax | (6.508) | (3.852) | ||
| Income tax | (1.444) | (2.541) | ||
| Post tax profit / (losses) for the year | (7.952) | (6.392) | ||
| Other comprehensive income | 171 | (351) | ||
| Total comprehensive income | (7.781) | (6.743) | ||
| Total comprehensive income allocated to non-controlling | ||||
| interests | (2.168) | (2.438) | ||
| Summarised cash flow statement: | ||||
| Intrakat SA | ||||
| 1/1- 31/12/2017 | 1/1- 31/12/2016 | |||
| Cash flows from operating activities | ||||
| Cash generated from operations | 40.234 | 17.441 | ||
| Interest paid | (12.958) | (9.314) | ||
| Income tax paid | 831 | 121 | ||
| Net cash generated from operating activities | 28.107 | 8.248 | ||
| Net cash used in investing activities | (19.251) | (16.104) | ||
| Net cash generated from/(used in) financing activities | 18.513 | (9.428) | ||
| Net increase / (decrease) in cash and cash equivalents | 27.369 | (17.284) | ||
| Cash and cash equivalents at beginning of year | 14.040 | 31.324 | ||
| Cash and cash equivalents at end of year | 41.409 | 14.040 | ||
| Group | Company | |||
|---|---|---|---|---|
| 31/12/2017 | 31/12/2016 | 31/12/2017 | 31/12/2016 | |
| Balance at the beginning of the year | 597 | 727 | - | - |
| Additions/Share capital increases | 2.156 | 180 | - | - |
| Additions from acquisitions (note 42) | 815 | - | ||
| Disposals / Liquidations of joint ventures | (1) | (7) | - | |
| Transfer to subsidiary | - | (182) | - | |
| Transfer from subsidiary | 7.108 | - | - | |
| Share of loss | (521) | (117) | - | - |
| Effect of exchange differences and remeasurements | ||||
| of retirement benefit obligations | 68 | (3) | - | - |
| Balance at the end of the year | 10.221 | 597 | - |
Year 2017
On 10.02.2017, the subsidiary Devenetco Ltd, wholly owned subsidiary of INTRADEVELOPMENT, acquired 100% of BENECIELO CO LTD shares for €2 mil. This amount is presented in the cash flow statement.
On 14.02.2017, Devenetco Ltd increased its share capital by €13.599. Intradevelopment participated in the share capital increase by €6.799 and another strategic investor participated by €6.800. After the completion of the share capital increase the interest in Devenetco held by the subsidiary Intradevelopment is 50%. As of 14.02.2017, Devenetco is incorporated in the Group's financial statements as an associate using the equity method (the carrying value on the date of the transfer was €7.108).
Fair values of Devenetco Ltd's assets and liabilities as of 14.02.2017 were as follows:
| 14/2/2017 | |
|---|---|
| Cash | 6.822 |
| Investment property | 11.824 |
| Trade receivables | 41 |
| Trade liabilities | (6.448) |
| Other assets | 1.679 |
| Other liabilities | (11) |
| Net assets | 13.908 |
| Net assets of the Group (50%) | 6.954 |
| Previously held interest | 100,00% |
| Interest transferred | -50,00% |
| Total interest | 50,00% |
| Fair Value of net assets transferred | 6.954 |
| Less: Value of net assets transferred | (7.108) |
| Gains/Losses from associates | (154) |
On 26.05.2017, the subsidiary Intrakat participated by 40% in the formation of two associates with trade names ELMEAS SA and SIRRA SA. The amount of share capital paid on 31.12.2017 was €200.
In addition to the above, as described in note 42, Intrapar participated in the share capital increase of the associate KEKROPS SA with the amount of €1.896.
As disclosed in note 10, the subsidiary Intrakat SA acquired control of INESTIA TOURISTIKI SA, without change in the interest held. As a result, the investment in the subsidiary INESTIA TOURISTIKI SA of €182 was derecognised and it is now included in the financial statements of the Group as investment in subsidiary. This transaction had no significant impact on the Group.
Information about the Group's associates is presented below:
| Name | Country of incorporation |
Assets | Liabilities | Revenue | Profit / (Loss) | Interest Held |
|---|---|---|---|---|---|---|
| ALPHA MOGILANY DEVELOPMENT SP. Z.O.O | POLAND | 6.198 | 5.833 | - | (309) | 25,00% |
| MOBILE COMPOSTING S.A. | GREECE | 472 | 407 | - | (6) | 24,00% |
| FRACASSO HOLDINGS D.O.O. | CROATIA | 929 | 245 | 128 | (24) | 50,00% |
| COMPANY OPERATING THE UNIT OF URBAN SOLID WASTE | ||||||
| TREATMENT FACILITY OF SERRES S.A. (ELMEAS S.A.) | GREECE | 23 | 1 | - | (3) | 40,00% |
| COMPANY MANAGING THE URBAN SOLID WASTE IN THE | ||||||
| MUNICIPALITY OF SERRES S.A. (SIRRA S.A.) | GREECE | 8.468 | 7.586 | 4.445 | (3) | 40,00% |
| KEKROPS S.A. | GREECE | 13.381 | 6.960 | 15 | (932) | 34,06% |
| DEVENETCO LTD | CYPRUS | 16.253 | 2.789 | 122 | (224) | 50,00% |
| ΑΤΗΕNS TECH S.A. | GREECE | 77 | 233 | 350 | (310) | 35,41% |
| 45.801 | 24.055 | 5.061 | (1.810) |
| Επωνυμία | Country of incorporation |
Assets | Liabilities | Revenue | Profit / (Loss) | Interest Held |
|---|---|---|---|---|---|---|
| ALPHA MOGILANY DEVELOPMENT SP. Z.O.O | POLAND | 5.866 | 5.235 | - | (206) | 25,00% |
| MOBILE COMPOSTING S.A. | GREECE | 505 | 170 | 73 | 58 | 24,00% |
| FRACASSO HOLDINGS D.O.O. | CROATIA | 1.226 | 530 | 230 | (1) | 40,00% |
| ΑΤΗΕNS TECH S.A. | GREECE | 66 | 213 | 228 | (226) | 50,00% |
| 7.663 | 6.148 | 531 | (375) |
The following amounts show the Group's share of assets and liabilities in joint operations that are accounted for using the proportionate consolidation method and are included in the balance sheet:
(All amounts in €'000)
| 31/12/2017 | 31/12/2016 | |
|---|---|---|
| Assets | ||
| Non-current assets | 1.487 | 89 |
| Current assets | 12.135 | 22.868 |
| 13.622 | 22.957 | |
| Liabilities | ||
| Non-current liabilities | - | - |
| Current liabilities | 12.920 | 21.335 |
| 12.920 | 21.335 | |
| Equity | 701 | 1.622 |
| Income | 5.775 | 19.265 |
| Expenses | (5.810) | (19.624) |
| Profit / (Loss) (after tax) | (35) | (360) |
Information for the Group's investments in joint operations is included in note 41.
| Group | Company | |||
|---|---|---|---|---|
| 31/12/2017 | 31/12/2016 | 31/12/2017 | 31/12/2016 | |
| Balance at the beginning of the year | 12.873 | 13.258 | 11.637 | 9.095 |
| Additions from acquisitions (note 42) | 2.475 | - | - | - |
| Additions | 27.070 | 3.735 | 68 | 3.524 |
| Fair value (losses) / gains | 295 | (3.137) | 264 | - |
| Impairment | - | (462) | - | (462) |
| Other | - | (520) | - | (520) |
| Balance at the end of the year | 42.714 | 12.873 | 11.969 | 11.637 |
| Non current Assets | 42.714 | 12.873 | 11.969 | 11.637 |
| Current Assets | - | - | - | - |
| 42.714 | 12.873 | 11.969 | 11.637 | |
| Group | Company | |||
| 31/12/2017 | 31/12/2016 | 31/12/2017 | 31/12/2016 | |
| Listed securities: | ||||
| - Equity securities | 2.791 | 2.466 | 2.332 | 2.067 |
| Unlisted securities: | ||||
| - Equity securities | 39.923 | 10.408 | 9.637 | 9.570 |
| 42.714 | 12.873 | 11.969 | 11.637 |
Investments in unlisted shares are shown at cost less impairment.
The investments in listed companies relate to companies listed in the Athens Stock Exchange and are measured at their quoted stock prices at the balance sheet date.
Available-for-sale financial assets include a 3,44% shareholding in Hellenic Energy and Development SA amounting to €1.220 and a 13,33% shareholding in Moreas SA amounting to €8.084 as at 31 December 2017.
From 28/12/2017, the Group participates through the subsidiary Intracom Operations ltd, in Goreward Ltd Group, which operates in China. The cost of investment amounts to €27 mil. and the interest held is 22,31%. The subsidiary Intracom Operations is a passive investor, with no representation in the company's board of directors. As a result, the investment was not consolidated using the equity method, but it was classified in investments available for sale.
The additions in the Group and the Company in the year 2016 refer to the acquisition of listed securities of Intralot of €2.066 as well as the Company's contribution to the share capital increase of Moreas SA by its interest held which amounted to €1.333.
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income taxes relate to the same fiscal authority. The offset amounts are as follows:
| Group | Company | |||
|---|---|---|---|---|
| 31/12/2017 | 31/12/2016 | 31/12/2017 | 31/12/2016 | |
| Deferred tax assets | (8.109) | (8.303) | - | - |
| Deferred tax liabilities | 2.328 | 1.240 | 1.022 | 1.061 |
| (5.781) | (7.063) | 1.022 | 1.061 |
The gross amounts are as follows:
| Group | Company | |||
|---|---|---|---|---|
| 31/12/2017 | 31/12/2016 | 31/12/2017 | 31/12/2016 | |
| Deferred tax assets: | ||||
| To be recovered after more than 12 months | (14.593) | (13.222) | (67) | (61) |
| To be recovered within 12 months | (1.128) | (2.064) | - | - |
| (15.720) | (15.286) | (67) | (61) | |
| Deferred tax liabilities | ||||
| To be settled after more than 12 months | 5.875 | 4.162 | 1.089 | 1.123 |
| To be settled within 12 months | 4.066 | 4.063 | - | - |
| 9.939 | 8.224 | 1.089 | 1.123 | |
| (5.781) | (7.063) | 1.022 | 1.061 |
The gross movement on the deferred income tax account is as follows:
| Group | Company | |||
|---|---|---|---|---|
| 31/12/2017 | 31/12/2016 | 31/12/2017 | 31/12/2016 | |
| Balance at the beginning of the year | (7.063) | (6.749) | 1.061 | 1.066 |
| Exchange differences | (12) | 8 | - | - |
| Charge / (credit) to profit or loss (Note 34) | 1.338 | (276) | (37) | (28) |
| Charge / (credit) to other comprehensive income | (53) | (41) | (2) | 23 |
| Charge / (credit) to equity | (20) | (5) | - | - |
| Disposal of branch | 29 | - | - | - |
| Balance at the end of the year | (5.781) | (7.063) | 1.022 | 1.061 |
The movement in deferred tax assets and liabilities during the year, without taking into consideration the offsetting of balances within the same tax jurisdictions, is as follows:
| Provisions | Tax losses | Other | Total | |
|---|---|---|---|---|
| Balance 1 January 2016 | (9.958) | (4.003) | (1.300) | (15.261) |
| Exchange differences | 8 | - | - | 8 |
| Charge / (credit) to profit or loss | (2.391) | 2.487 | (83) | 13 |
| Credit to other comprehensive income | (41) | - | - | (41) |
| Credit to equity | - | - | (5) | (5) |
| Balance 31 December 2016 | (12.383) | (1.516) | (1.388) (15.286) | |
| Balance 1 January 2017 | (12.383) | (1.516) | (1.388) | (15.286) |
| Exchange differences | (12) | - | - | 12 |
| Charge / (credit) to profit or loss | 736 | (1.037) | (59) | (360) |
| Credit to other comprehensive income | (53) | - | - | (53) |
| Credit to equity | (2) | - | (37) | (39) |
| Disposal of branch | - | - | 30 | 30 |
| Balance 31 December 2017 | (11.714) | (2.553) | (1.453) (15.720) |
| Accelerated tax | |||
|---|---|---|---|
| depreciation | Other | Total | |
| Balance 1 January 2016 | 4.660 | 3.852 | 8.512 |
| Charge / (credit) to profit or loss | (4) | (285) | (288) |
| Balance 31 December 2016 | 4.656 | 3.568 | 8.224 |
| Balance 1 January 2017 | 4.656 | 3.568 | 8.224 |
| Charge / (credit) to profit or loss | 370 | 1.328 | 1.698 |
| Disposal of branch | (2) | - | (2) |
| Balance 31 December 2017 | 5.025 | 4.914 | 9.939 |
Deferred tax assets:
| Provisions | Total | |
|---|---|---|
| Balance 1 January 2016 | (98) | (98) |
| Charge to profit or loss | 13 | 13 |
| Charge to other comprehensive income | 23 | 23 |
| Balance 31 December 2016 | (61) | (61) |
| Balance 1 January 2017 | (61) | (61) |
| Credit to profit or loss | (4) | (4) |
| Credit to profit or loss | (2) | (2) |
| Balance 31 December 2017 | (67) | (67) |
| Accelerated tax depreciation |
|||
|---|---|---|---|
| Balance 1 January 2016 | 1.164 | Total 1.164 |
|
| Credit to profit or loss | (41) | (41) | |
| Balance 31 December 2016 | 1.123 | 1.123 | |
| Balance 1 January 2017 | 1.123 | 1.123 | |
| Credit to profit or loss | (34) | (34) | |
| Balance 31 December 2017 | 1.089 | 1.089 |
The Company has not recognised deferred tax asset on the losses of the previous and the current year. These losses amount to €115.573.
In 2008, the Company participated in the issue of a subordinated bond loan of a total amount of €55.000 by Moreas SA, in which Intracom Holdings holds an interest of 13,33%. The Company participated in the issue of the bond loan up to its shareholding percentage in Moreas SA (13,33%), paying an amount of €7.332. The loan carries a floating interest rate (12m Euribor plus 4,0% margin).
The amount recorded on the balance sheet as at 31 December 2017 consists of the initial capital plus capitalised interest of the period 2008-2017.
Non-current borrowings also include other fixed interest loans granted to third parties amounting to €835 (interest rate ranging between 5,25% and 6,5%).
| Group 31/12/2016 |
Company | ||||
|---|---|---|---|---|---|
| 31/12/2017 | Restated* 31/12/2017 | 31/12/2016 | |||
| Trade receivables | 105.296 | 130.601 | 54 | 88 | |
| Less: provision for impairment | (16.128) | (16.109) | - | - | |
| Trade receivables - net | 89.167 | 114.491 | 54 | 88 | |
| Prepayments | 26.297 | 29.144 | - | - | |
| Receivables from related parties (note 39) | 18.538 | 18.574 | 24.694 | 25.403 | |
| Loans to related parties (note 39) | 2.034 | 337 | - | 2.301 | |
| Prepaid expenses | 5.583 | 6.808 | 84 | 84 | |
| Accrued income | 57.043 | 53.316 | 416 | 416 | |
| Restricted cash | 8.063 | 7.906 | 7.613 | 7.456 | |
| Other receivables | 27.434 | 34.006 | 2.147 | 2.433 | |
| Less: provision for impairment of other receivable | (3.033) | (3.000) | - | - | |
| Total | 231.127 | 261.582 | 35.007 | 38.181 | |
| Non-current assets | 20.606 | 20.487 | 39 | 39 | |
| Current assets | 210.520 | 241.095 | 34.968 | 38.142 | |
| 231.127 | 261.582 | 35.007 | 38.181 |
(*) Refer to note 43.
At 31 December 2017, out of the €27 million of other receivables, the amount of €12,2 million relates to receivables from the Greek State and the amount of €3,4 million relates to receivables from joint ventures.
The analysis of trade receivables of the Group and the Company at the end of each year is as follows:
| Group | Company | ||||
|---|---|---|---|---|---|
| 31/12/2017 | 31/12/2016 | Restated* 31/12/2017 | 31/12/2016 | ||
| Total | 89.167 | 114.491 | 54 | 88 | |
| Not past due and not impaired at the balance | |||||
| sheet date | 57.263 | 58.740 | 24 | 56 | |
| Impaired at the balance sheet date | 16.128 | 16.109 | - | - | |
| Provision made for the following amount: | (16.128) | (16.109) | - | - | |
| - | - | - | - | ||
| Not impaired at the balance sheet date but past due in the following periods: |
|||||
| < 90 days | 8.073 | 14.276 | 7 | 9 | |
| 90-180 days | 9.774 | 8.111 | 6 | 12 | |
| 180-270 days | 11.818 | 17.208 | 8 | - | |
| 270-365 days | 1.237 | 2.931 | 2 | 4 | |
| 1- 2 years | 437 | 4.493 | - | 7 | |
| >2 years | 565 | 8.731 | 6 | - | |
| 31.904 | 55.751 | 29 | 32 | ||
| Total trade receivables | 89.167 | 114.491 | 54 | 88 |
(*) Refer to note 43.
Receivables that are past due more than twelve months and for which no impairment provision has been recognised relate to receivables from the Greek State amounting to €2,1million (2016: €4,9 million).
There is no concentration of credit risk in relation to trade receivables, since the Group has a large number of customers. The Group has developed policies to ensure that the sales agreements take place with customers with sufficient credit quality. The credit policy of the Group is determined on a case by case basis and is set out in the agreed terms in the contract signed with each customer.
The movement of provision for impairment of trade and other receivables is analysed as follows:
| Group | Company | |
|---|---|---|
| Balance 1 January 2016 | 19.679 | - |
| Exchange differences | (40) | - |
| Provision for impairment (note 29) | 462 | - |
| Receivables written-off during the year | (233) | - |
| Provisions used | (417) | |
| Unused amounts reversed (note 29) | (340) | - |
| Balance 31 December 2016 | 19.110 | - |
| Exchange differences | 197 | - |
| Provision for impairment (note 29) | 2.053 | - |
| Provisions used | (2.197) | |
| Unused amounts reversed (note 29) | (1) | - |
| Balance 31 December 2017 | 19.162 | - |
Trade and other receivables are denominated in the following currencies:
| Group | Company | |||
|---|---|---|---|---|
| 31/12/2016 | ||||
| 31/12/2017 | Restated* 31/12/2017 | 31/12/2016 | ||
| Εuro (EUR) | 197.427 | 203.608 | 34.929 | 38.100 |
| US Dollar (USD) | 28.682 | 51.280 | - | - |
| Polish Zloty (PLN) | 1.240 | 1.756 | - | - |
| Romanian Lei (RON) | 1.189 | 1.451 | 79 | 81 |
| Jordanian Dinar (JOD) | - | 1.244 | - | - |
| Danish Corona (DKK) | 41 | 41 | - | - |
| FYROM Dinar (MKD) | 2.248 | 1.501 | - | - |
| Other | 300 | 701 | - | - |
| 231.127 | 261.582 | 35.007 | 38.181 | |
(*) Refer to note 43.
| Group | Company | |||
|---|---|---|---|---|
| 31/12/2017 31/12/2016 31/12/2017 | 31/12/2016 | |||
| Raw materials | 23.447 | 24.429 | - | - |
| Semi-finished goods | 13.415 | 12.573 | - | - |
| Finished goods | 8.281 | 8.522 | - | - |
| Work in progress | 3.283 | 2.327 | - | - |
| Merchandise | 2.095 | 3.144 | - | - |
| Other | 250 | 284 | - | - |
| Total | 50.770 | 51.278 | - | - |
| Less: Provisions for obsolete and destroyed inventories | ||||
| Raw materials | 7.143 | 7.509 | - | - |
| Semifinished goods | 2.823 | 2.633 | - | - |
| Finished goods | 1.551 | 1.527 | - | - |
| Merchandise | 301 | 301 | - | - |
| 11.818 | 11.970 | - | - | |
| Net realisable value | 38.952 | 39.309 | - | - |
The movement of the provision is as follows:
| Group | Company | |
|---|---|---|
| Balance 1 January 2016 | 9.943 | - |
| Provision for impairment (note 29) | 2.084 | - |
| Used provisions during the year (note 29) | (57) | - |
| Balance 31 December 2016 | 11.970 | - |
| Provision for impairment (note 29) | 431 | - |
| Used provisions during the year (note 29) | (583) | - |
| Balance 31 December 2017 | 11.818 | - |
| Group | Company | |||
|---|---|---|---|---|
| 31/12/2017 | 31/12/2016 | 31/12/2017 | 31/12/2016 | |
| Assets | ||||
| Contracts in progress at the balance sheet date: | ||||
| Receivables from construction contracts | 39.874 | 36.066 | - | - |
| Total | 39.874 | 36.066 | - | - |
| Liabilities | ||||
| Contracts in progress at the balance sheet date: | ||||
| Liabilities from construction contracts | 1.324 | 3.733 | - | - |
| Total | 1.324 | 3.733 | - | - |
| Accumulated contract costs plus accumulated recognised profits less accumulated recognised losses |
||||
| 595.866 | 605.073 | - | - | |
| Less: Progress billings | (557.317) | (572.740) | - | - |
| Construction contracts | 38.550 | 32.333 | - | - |
The contractual revenue from construction contracts for financial year 2017 amounts to €105 million (2016: €96 million).
At 31 December 2017, the prepayments received for contracts in progress amount to €67 million (2016: €7 million) and the amounts withheld by project clients amount to €2 million (2016: €2 million).
| Company | |||
|---|---|---|---|
| 31/12/2017 | 31/12/2016 | 31/12/2017 | 31/12/2016 |
| - | |||
| 19.661 | 22.450 | - | - |
| (15.075) | (19.938) | - | - |
| 18.745 | 14.159 | - | - |
| - | - | - | - |
| 18.745 | 14.159 | - | - |
| 18.745 | 14.159 | - | - |
| 9.453 | 14.399 | - | - |
| 14.159 | Group 11.647 |
- |
| Group | Company | |||
|---|---|---|---|---|
| 31/12/2017 | 31/12/2016 | 31/12/2017 31/12/2016 | ||
| Balance at the beginning of the year | 167 | 170 | - | - |
| Fair value adjustments (note 32) | 97 | (3) | - | - |
| Balance at the end of the year | 264 | 167 | - | |
| Group | Company | |||
| 31/12/2017 | 31/12/2016 | 31/12/2017 31/12/2016 | ||
| Listed securities | ||||
| - Equity securities | 264 | 167 | - | - |
| 264 | 167 | - | - |
Cash and cash equivalents include the following for the purposes of the cash flow statement:
| Group | Company | ||||
|---|---|---|---|---|---|
| 31/12/2017 | 31/12/2016 | 31/12/2017 | 31/12/2016 | ||
| Cash at bank and in hand | 140.064 | 106.306 | 61.130 | 52.005 | |
| Short-term bank deposits | 8.162 | 1.665 | - | - | |
| Total | 148.226 | 107.971 | 61.130 | 52.005 |
In 2017, the effective interest rate on short-term bank deposits for the Company was 0% (2016: 0%).
Cash and cash equivalents are denominated in the following currencies:
| Group | Company | |||
|---|---|---|---|---|
| 31/12/2017 | 31/12/2016 | 31/12/2017 | 31/12/2016 | |
| Euro (EUR) | 135.537 | 94.263 | 60.248 | 51.053 |
| US Dollar (USD) | 12.061 | 9.859 | 803 | 951 |
| Japanese Yen (JPY) | - | 1.055 | - | - |
| Romanian Lei (RON) | 109 | 605 | 79 | - |
| Bulgarian Leva (BGN) | 175 | 863 | - | - |
| Polish Zloty (PLN) | - | 446 | - | - |
| Other | 345 | 880 | ||
| 148.226 | 107.971 | 61.130 | 52.005 |
| Number of shares |
Share capital |
Share premium |
Total | |
|---|---|---|---|---|
| Balance 1 January 2016 | 133.025.996 | 187.567 | 194.204 | 381.771 |
| Balance 31 December 2016 | 133.025.996 | 187.567 | 194.204 | 381.771 |
| Balance 1 January 2017 | 133.025.996 | 187.567 | 194.204 | 381.771 |
| Balance 31 December 2017 | 133.025.996 | 187.567 | 194.204 | 381.771 |
On 31 December 2016 and on 31 December 2017 the Company's share capital amounts to €187.567 divided into 133.025.996 shares with a nominal value of €1,41 each.
| Statutory reserves |
Special reserves |
Tax free reserves |
Extraordinary reserves |
Other reserves | Remeasurments of retirement benefit obligations |
Fair value reserves |
Total | |
|---|---|---|---|---|---|---|---|---|
| Balance 1 January 2016 Fair value loss on available-for-sale financial |
30.662 | 8.305 | 107.225 | 56.470 | (29.237) | (2.855) | (3.251) 167.318 | |
| assets Transfer to profit or loss of available-for-sale |
- | - | - | - | - | - | (2.283) | (2.283) |
| financial assets due to impairment | - | - | - | - | - | - | 2.291 | 2.291 |
| Exchange differences | - | - | - | - | - | - | 149 | 149 |
| Effect of change in interest held in subsidiaries | 6 | - | - | - | 2 | - | - | 8 |
| Transfers between reserves | 30 | - | (276) | - | - | - | - | (246) |
| Balance 31 December 2016 | 30.697 | 8.305 | 106.949 | 56.470 | (29.235) | (2.855) | (3.094) 167.237 | |
| Balance 1 January 2017 | 30.697 | 8.305 | 106.949 | 56.470 | (29.235) | (2.855) | (3.094) 167.237 | |
| Fair value loss on available-for-sale financial | ||||||||
| assets | - | - | - | - | - | - | 294 | 294 |
| Transfer to profit or loss of available-for sale | ||||||||
| reserve due to impairment | - | - | - | - | - | - | 26 | 26 |
| Exchange differences | - | - | - | - | - | - | (1.006) | (1.006) |
| Disposal of subsidiaries | - | - | (23) | - | - | - | - | (23) |
| Effect of change in interest held in subsidiaries | 3 | - | - | - | 512 | - | - | 515 |
| Remeasurements of retirement benefit | ||||||||
| obligations, net of tax | - | - | - | - | - | (140) | - | (140) |
| Transfers between reserves | 88 | - | (439) | - | - | - | - | (350) |
| Balance 31 December 2017 | 30.789 | 8.305 | 106.487 | 56.470 | (28.723) | (2.995) | (3.779) 166.553 |
| Remeasurments of retirement |
|||||||
|---|---|---|---|---|---|---|---|
| Statutory | Special | Tax free | Extraordinary | benefit | Fair value | ||
| reserves | reserves | reserves | reserves | obligations | reserves | Total | |
| Balance 1 January 2016 | 26.719 | 8.069 | 47.149 | 56.981 | (201) | - | 138.717 |
| Remeasurements of retirement benefit | |||||||
| obligations, net of tax | - | - | - | - | 57 | - | 57 |
| Balance 31 December 2016 | 26.719 | 8.069 | 47.149 | 56.981 | (144) | - | 138.774 |
| Balance 1 January 2017 | 26.719 | 8.069 | 47.149 | 56.981 | (144) | - | 138.774 |
| Fair value gain on available-for-sale financial | |||||||
| assets | - | - | - | - | - | 264 | 264 |
| Remeasurements of retirement benefit | |||||||
| obligations, net of tax | - | - | - | - | (5) | - | (5) |
| Balance 31 December 2017 | 26.719 | 8.069 | 47.149 | 56.981 | (149) | 264 | 139.033 |
The statutory reserve is created under the provisions of Greek law (Law 2190/20, articles 44 and 45) according to which an amount of at least 5% of the profit (after tax) for the year must be transferred to the reserve until it reaches one third of the paid share capital. The statutory reserve can only be used with the approval of the Annual General Meeting of shareholders to offset accumulated losses and therefore cannot be used for any other purpose.
Special reserves include amounts that were created according to decisions of the Annual General Meetings, have no specific purpose and can therefore be used for any reason following the approval of the Annual General Meeting, as well as amounts that were created under the provisions of Greek law. These reserves have been created from after-tax profits and are therefore not subject to any additional taxation in case of distribution or capitalisation.
This account includes reserves created from profits which were used for the acquisition of new fixed assets employed in the production process and are therefore regarded as tax-free under special provisions of the development laws in force. In essence, this reserve is created from profit for which no tax is calculated or paid.
During financial year 2015, under the provisions of paragraphs 12 and 13 of article 72 of Law 4172/2013, tax-free reserves of the Company amounting to €8.841 were offset against tax losses.
This reserve includes the portion of the net income carried forward every year that comes from tax-free profits and profits taxed under special provisions by using up the tax liability.
The aforementioned reserves can be capitalised or distributed following the approval of the Annual General Meeting, after taking into consideration the restrictions that may apply. In case of capitalisation or distribution, tax is calculated at the current tax rate.
Fair value reserves mainly include foreign currency translation differences from investments denominated in foreign currency.
During the year, a reserve amounting to €26 (2016:€2.291) was transferred to the Group's income statement due to the impairment of investments available for sale.
| Group | Company | ||||
|---|---|---|---|---|---|
| 31/12/2017 | 31/12/2016 | 31/12/2017 31/12/2016 | |||
| Non-current borrowings | |||||
| Bank loans | 69.033 | 33.895 | - | - | |
| Finance lease liabilities | 8.445 | 7.676 | 7.112 | 7.440 | |
| Bond loans | 29.285 | 26.835 | - | - | |
| Total non-current borrowings | 106.764 | 68.405 | 7.112 | 7.440 | |
| Current borrowings | |||||
| Bank loans | 123.787 | 96.024 | 43.954 | 15.500 | |
| Bond loans | 10.798 | 11.950 | - | - | |
| Other loans | 1.132 | 1.086 | - | - | |
| Finance lease liabilities | 1.007 | 534 | 328 | 311 | |
| Total current borrowings | 136.724 | 109.594 | 44.282 | 15.811 | |
| Total borrowings | 243.487 | 178.000 | 51.394 | 23.251 |
The loans of the Group and Company are denominated in the following currencies:
| Group | Company | ||||
|---|---|---|---|---|---|
| 31/12/2017 | 31/12/2016 | 31/12/2017 31/12/2016 | |||
| Euro | 242.698 | 176.641 | 51.394 | 23.251 | |
| US dollar (USD) | 725 | 1.358 | - | - | |
| Other | 64 | - | - | - | |
| 243.487 | 178.000 | 51.394 | 23.251 |
The contractual undiscounted cash flows of the borrowings, excluding finance leases (including interest payments), are as follows:
| Group | Company | ||||
|---|---|---|---|---|---|
| 31/12/2017 | 31/12/2016 | 31/12/2017 31/12/2016 | |||
| Not later than 1 year | 134.762 | 112.154 | 43.954 | 15.500 | |
| Between 1 and 2 years | 8.036 | 6.165 | - | - | |
| Between 2 and 3 years | 16.107 | 6.793 | - | - | |
| Between 3 and 5 years | 18.956 | 21.128 | - | - | |
| More than 5 years | 60.026 | 31.529 | - | - | |
| 237.887 | 177.770 | 43.954 | 15.500 |
The weighted average interest rate of the Group's short-term and long-term borrowings in 2017 was 5,85% and 5,17% respectively (2016: 5,95% and 4,86% respectively).
The weighted average interest rate of the Company's short-term borrowings in 2017 was 5,27% (2016: 5,53%).
Guarantees relating to the above borrowings are disclosed in note 38.
| Group | Company | ||||
|---|---|---|---|---|---|
| 31/12/2017 | 31/12/2016 | 31/12/2017 31/12/2016 | |||
| Finance lease liabilities- minimum lease | |||||
| payments | |||||
| Not later than 1 year | 1.429 | 897 | 654 | 654 | |
| Between 2 and 5 years | 6.556 | 4.398 | 5.148 | 4.134 | |
| More than 5 years | 3.154 | 4.823 | 3.154 | 4.823 | |
| Total | 11.139 | 10.117 | 8.956 | 9.611 | |
| Less: Future finance charges on finance leases | (1.686) | (1.907) | (1.516) | (1.860) | |
| Present value of finance lease liabilities | 9.452 | 8.210 | 7.440 | 7.751 | |
| Present value of finance lease liabilities: | |||||
| Not later than 1 year | 1.007 | 534 | 328 | 311 | |
| Between 2 and 5 years | 5.448 | 3.191 | 4.115 | 2.955 | |
| More than 5 years | 2.997 | 4.485 | 2.997 | 4.485 | |
| Total | 9.452 | 8.210 | 7.440 | 7.751 |
| Group | Company | |||
|---|---|---|---|---|
| 31/12/2017 | 31/12/2016 | 31/12/2017 | 31/12/2016 | |
| Balance sheet obligations for: | ||||
| Pension benefits | 7.691 | 7.046 | 379 | 360 |
| Income statement charge | ||||
| Pension benefits (note 30) | 805 | 954 | 12 | 326 |
| Charge / (credit) to equity | ||||
| Remeasurements of retirement benefit obligations | 198 | 118 | 7 | (80) |
The amounts recognised in profit or loss are determined as follows:
| Group | Company | ||||
|---|---|---|---|---|---|
| 1/1 - 31/12/2017 | 1/1 - 31/12/2016 | 1/1 - 31/12/2017 | 1/1 - 31/12/2016 | ||
| Current service cost | 523 | 380 | 6 | 11 | |
| Interest cost | 68 | 77 | 6 | 10 | |
| Losses on curtailment | 214 | 496 | - | 305 | |
| Total, included in staff costs | 805 | 954 | 12 | 326 |
| Group | Company | |||
|---|---|---|---|---|
| 1/1 - 31/12/2017 | 1/1 - 31/12/2016 | 1/1 - 31/12/2017 | 1/1 - 31/12/2016 | |
| Cost of goods sold | 660 | 482 | - | - |
| Selling costs | 116 | 86 | - | - |
| Administrative expenses | 29 | 386 | 12 | 326 |
| 805 | 954 | 12 | 326 |
The movement in the liability recognised in the balance sheet is as follows:
| Group | Company | |||
|---|---|---|---|---|
| 1/1 - 31/12/2017 | 1/1 - 31/12/2016 | 1/1 - 31/12/2017 | 1/1 - 31/12/2016 | |
| Balance at the beginning of the year | 7.046 | 6.666 | 360 | 485 |
| Total expense charged to the income statement | 805 | 954 | 12 | 326 |
| Contributions paid | (357) | (692) | - | (371) |
| Remeasurements of retirement benefit obligations | 198 | 118 | 7 | (80) |
| Balance at the end of the year | 7.692 | 7.046 | 379 | 360 |
The principal actuarial assumptions used are as follows:
| Group | Company | |||
|---|---|---|---|---|
| 2017 | 2016 | 2017 | 2016 | |
| Discount rate | 1,5% - 1,7% | 1,5% - 1,8% | 1,70% | 1,80% |
| Future salary increases | 1,8% - 2,3% | 1,8% - 2,3% | 2,00% | 2,00% |
In the following table is presented the analysis of the liability's sensitivity to changes in the key assumptions.
| Group | ||||||||
|---|---|---|---|---|---|---|---|---|
| Change in the assumption | Increase / (Decrease) in the present value of the liability in case of an increase in the assumption |
Increase / (Decrease) in the present value of the liability in case of an decrease in the assumption |
||||||
| 2017 | 2016 | 2017 | 2016 | 2017 | 2016 | |||
| Discount rate | 0,5% | 0,5% | (671) | (598) | 415 | 416 | ||
| Future salary increases | 0,5% | 0,5% | 365 | 379 | (635) | (576) | ||
| Company | ||||||||
| Change in the assumption | Increase / (Decrease) in the present | Increase / (Decrease) in the present |
| value of the liability in case of an increase in the assumption |
value of the liability in case of an decrease in the assumption |
|||||
|---|---|---|---|---|---|---|
| 2017 | 2016 | 2017 | 2016 | 2017 | 2016 | |
| Discount rate | 0,5% | 0,5% | (22) | (22) | 23 | 23 |
| Future salary increases | 0,5% | 0,5% | 17 | 21 | (18) | 33 |
| Group | Company | ||||
|---|---|---|---|---|---|
| 31/12/2017 31/12/2016 31/12/2017 | 31/12/2016 | ||||
| Balance at the beginning of the year | 49 | 55 | - | - | |
| Amortisation charge (note 31) | (5) | (5) | - | - | |
| Balance at the end of the year | 44 | 49 | - | - | |
| Non-current portion | 44 | 49 | - | - | |
| Total | 44 | 49 | - | - |
| Group | Company | |||
|---|---|---|---|---|
| 31/12/2017 31/12/2016 |
31/12/2017 | 31/12/2016 | ||
| Current liabilities | 8.911 | 14.157 | 3.316 | 4.966 |
| Non-current liabilities | 1.076 | 1.528 | - | - |
| Total | 9.987 | 15.685 | 3.316 | 4.966 |
| Unaudited tax | ||||
|---|---|---|---|---|
| Warranties | years | Other | Total | |
| Balance 1 January 2016 | 735 | 761 | 9.322 | 10.818 |
| Additional provisions of the year | 400 | - | 10.171 | 10.571 |
| Unused amounts reversed | - | - | (981) | (981) |
| Provisions used during the year | (385) | - | (4.339) | (4.723) |
| Balance 31 December 2016 | 750 | 761 | 14.174 | 15.685 |
| Balance 1 January 2017 | 750 | 761 | 14.174 | 15.685 |
| Additional provisions of the year | 226 | - | 8.679 | 8.905 |
| Unused amounts reversed | - | (107) | (1.766) | (1.872) |
| Provisions used during the year | (131) | - | (12.598) | (12.730) |
| Balance 31 December 2017 | 844 | 654 | 8.489 | 9.987 |
At 31 December 2017, the amount of €8.489 in other provisions includes €367 for the recognition of losses from loss making contracts (2016: €297), €3.415 for accrued employee benefits (2016: €4.137), €2.836 for court decisions and disputes subject to judicial proceedings or arbitration (2016: €2.666) and €550 for provisions related to the agreement for the transfer of Hellas online concerning liabilities that will be assumed by the Company after the sale of Hellas online (2016: €2.200). During the year, €1.650 out of the initial provision, which amounts to €2.200, relating to the transfer agreement of Hellas online was transferred to revenue. This amount is included in "Other profit/(loss)".
As regards the provision of €4.300 recognised in 2016 by Intrakat for the fine imposed by the Hellenic Competition Commission, it is noted that the amount has been finalised and it has been arranged to be repaid in 24 monthly instalments.
Company
| Other | Total | |
|---|---|---|
| Balance 1 January 2016 | 4.966 | 4.966 |
| Balance 31 December 2016 | 4.966 | 4.966 |
| Balance 1 January 2017 | 4.966 | 4.966 |
| Unused amounts reversed | (1.650) | (1.650) |
| Balance 31 December 2017 | 3.316 | 3.316 |
At 31 December 2017, other provisions include a provision for court decisions and disputes subject to judicial proceedings or arbitration amounting to €2.666 and provisions related to the agreement for the transfer of Hellas online concerning liabilities that will be assumed by the Company after the sale of Hellas online amounting to €550. During the year, €1.650 out of the initial provision, which amounts to €2.200, was transferred to revenue due to the finalisation of the Company's liabilities arising from the transfer of Hellas online. This amount is included in "Other profit/(loss)".
| Group | Company | |||
|---|---|---|---|---|
| 31/12/2017 | 31/12/2016 | 31/12/2017 31/12/2016 | ||
| Trade payables | 72.148 | 100.990 | 264 | 1.496 |
| Prepayments from customers | 119.007 | 90.628 | - | - |
| Deferred income | 9.825 | 8.291 | - | - |
| Amounts due to related parties (note 39) | 10.861 | 7.828 | 7.739 | 6.634 |
| Accrued expenses | 14.347 | 15.477 | 236 | 242 |
| Social security and other taxes | 15.686 | 8.264 | 350 | 464 |
| Other liabilities | 10.256 | 13.903 | 2.374 | 2.451 |
| Total | 252.130 | 245.380 | 10.963 | 11.286 |
| Non-current liabilities | 28.299 | 3.305 | - | - |
| Current liabilities | 223.831 | 242.075 | 10.963 | 11.286 |
| 252.130 | 245.380 | 10.963 | 11.286 |
The credit payment terms provided to the Group are determined on a case-by-case basis and are set out in the contracts signed with each supplier.
Trade and other payables are denominated in the following currencies:
| Group | Company | |||
|---|---|---|---|---|
| 31/12/2017 | 31/12/2016 | 31/12/2017 31/12/2016 | ||
| Euro (EUR) | 172.660 | 186.344 | 10.963 | 11.286 |
| US Dollar (USD) | 25.197 | 51.875 | - | - |
| Romanian Lei (RON) | 794 | 1.868 | - | - |
| Polish Zloty (PLN) | 1.299 | 1.445 | - | - |
| Bulgarian Leva (BGN) | 306 | 853 | - | - |
| Jordanian Dinar (JOD) | 504 | 445 | - | - |
| FYROM Dinar (MKD) | 3.451 | 2.504 | - | - |
| British Pound (GBP) | 47.899 | 23 | - | - |
| Other | 19 | 25 | - | - |
| 252.130 | 245.380 | 10.963 | 11.286 |
| Note | Group | Company | |||
|---|---|---|---|---|---|
| 1/1 - 31/12/2017 1/1 - 31/12/2016 1/1 - 31/12/2017 1/1 - 31/12/2016 | |||||
| Employee benefits | 30 | 102.520 | 98.755 | 1.496 | 2.163 |
| Inventory cost recognised in cost of goods sold | 85.464 | 94.589 | - | - | |
| Depreciation of PPE | 6 | 6.159 | 6.433 | 577 | 280 |
| Depreciation of investment property | 9 | 1.034 | 1.022 | 882 | 1.200 |
| Amortisation of intangible assets | 8 | 890 | 972 | 10 | 2 |
| Impairment of inventories | 17 | 431 | 2.016 | - | - |
| Write-off of inventories | (587) | ||||
| Repairs and maintenance of PPE | 2.174 | 1.946 | 154 | 189 | |
| Operating lease payments | 8.239 | 5.216 | - | - | |
| Subcontractors' fees | 119.545 | 149.458 | - | - | |
| Exchange gains/ (losses) | 375 | - | - | - | |
| Impairment of bad debts | 16 | 2.052 | 122 | - | - |
| Telecommunications cost | 1.502 | 1.633 | - | - | |
| Transportation and travelling expenses | 6.378 | 6.531 | 124 | 155 | |
| Third party fees | 30.261 | 1.917 | 627 | 488 | |
| Advertisement | 1.567 | 1.776 | 164 | 81 | |
| Other | 13.848 | 11.166 | 1.774 | 1.988 | |
| Total | 381.851 | 383.552 | 5.808 | 6.546 | |
| Split by function: | |||||
| Cost of goods sold | 324.019 | 331.899 | 2.189 | 2.472 | |
| Selling and research costs | 22.079 | 19.102 | - | - | |
| Administrative expenses | 35.753 | 32.551 | 3.619 | 4.075 | |
| 381.851 | 383.552 | 5.808 | 6.547 | ||
| Split of depreciation and amortisation by function: | |||||
| Cost of goods sold | 4.907 | 5.137 | 144 | 115 | |
| Selling and research costs | 598 | 574 | - | - | |
| Administrative expenses | 2.578 | 2.716 | 1.326 | 1.367 | |
| 8.083 | 8.428 | 1.469 | 1.482 |
(All amounts in €'000)
The fees for the provision of audit services (statutory audit and other services) amount to approximately €570 for the Group and €57 for the Company. During the year, the Company and the Group have not received any non-audit services.
| Group | Company | |||
|---|---|---|---|---|
| 1/1 - 31/12/2017 1/1 - 31/12/2016 1/1 - 31/12/2017 1/1 - 31/12/2016 | ||||
| Wages and salaries | 81.702 | 79.199 | 1.253 | 1.613 |
| Social security costs | 17.616 | 16.093 | 205 | 198 |
| Other employers' contributions and expenses | 610 | 723 | 26 | 26 |
| Pension costs - defined contribution plans | - | 132 | - | - |
| Pension costs - defined benefit plans (note 25) | 805 | 954 | 12 | 326 |
| Other post-employment benefits | 1.787 | 1.654 | - | - |
| Total | 102.520 | 98.755 | 1.496 | 2.163 |
| Group | Company | |||
|---|---|---|---|---|
| 1/1 - 31/12/2017 1/1 - 31/12/2016 1/1 - 31/12/2017 1/1 - 31/12/2016 | ||||
| Dividend income | 3 | 4 | - | - |
| Rental income | 1.679 | 2.382 | 2.197 | 2.687 |
| Amortisation of grants received (note 26) | 5 | 5 | - | - |
| Other income from grants | 43 | 179 | - | - |
| Insurance compensations | 416 | 9 | - | - |
| Other | 2.236 | 2.210 | - | - |
| Total | 4.382 | 4.790 | 2.197 | 2.687 |
The future minimum lease payments expected to be received by the Group and the Company are as follows:
| Group | Company | |||
|---|---|---|---|---|
| 31/12/2017 | 31/12/2016 | 31/12/2017 | 31/12/2016 | |
| Up to 1 year | 1.648 | 1.670 | 2.219 | 2.135 |
| From 2 to 5 years | 7.607 | 7.099 | 10.211 | 9.346 |
| More than 5 years | 8.571 | 10.458 | 8.974 | 11.674 |
| 17.826 | 19.227 | 21.404 | 23.155 |
In financial year 2017, «Other» in the Group and the Company include an amount of €1.650 which relates to an unused provision recognised in a prior year for expenses that might arise from the disposal of Hellas online. In financial year 2016, «Other» include an amount of €841 which relates to an extra receipt as a result of the terms for the sale agreement of Hellas online to Vodafone.
32. Other gains/(losses) - net
| Group | Company | ||||
|---|---|---|---|---|---|
| 1/1 - 31/12/2016 | |||||
| 1/1 - 31/12/2017 | Restated* 1/1 - 31/12/2017 1/1 - 31/12/2016 | ||||
| Finance expenses | |||||
| Interest and related expense | |||||
| - Bank borrowings | 9.907 | 9.245 | 999 | 989 | |
| - Bond loans | 1.563 | 1.214 | - | - | |
| - Finance leases | 382 | 533 | 344 | 483 | |
| - Letters of credit and related costs | 5.299 | 3.862 | - | 342 | |
| - Net foreign exchange gains / (losses) | 1.439 | (586) | 114 | (22) | |
| - Other | 2.412 | 2.391 | - | - | |
| 21.003 | 16.658 | 1.457 | 1.792 | ||
| Finance income | |||||
| Interest income | (58) | (31) | (1) | (4) | |
| Interest income from loans | (1.128) | (644) | (548) | (496) | |
| Other | (3.287) | (1.410) | (990) | (1.088) | |
| (4.473) | (2.086) | (1.539) | (1.589) | ||
| Finance expenses / (income) - net | 16.531 | 14.573 | (82) | 203 |
(*) Refer to note 43.
«Other» in the Group refer mainly to interest income relating to sales to the public sector of €2.056 and interest on due receivables of €1.231. In the Company, other interest income refers exclusively to interest on due receivables.
| Group | Company | |||
|---|---|---|---|---|
| 1/1 - 31/12/2017 1/1 - 31/12/2016 1/1 - 31/12/2017 1/1 - 31/12/2016 | ||||
| Current tax | (3.935) | (6.300) | - | - |
| Deferred tax (note 14) | (1.338) | 276 | 37 | 28 |
| Total | (5.273) | (6.024) | 37 | 28 |
Αt 31/12/2017 the Group has recognised deferred tax assets of €8.109 (31/12/2016: €8.303). The Group expects that within the next years, future taxable profits will be available against which the temporary differences that give rise to the deferred tax asset can be utilised.
The financial years for which the Company and its subsidiaries have not been audited and, therefore, the tax liabilities for these open years have not been finalised, are presented in note 41. The cumulative provision for unaudited tax years for the Group amounts to €654.
The parent company and other Greek companies of the Group, which have been tax audited by the statutory auditors pursuant to the provisions of article 82 paragraph 5 of Law 2238/1994 and article 65A of Law 4174/2013, obtained the Tax Compliance Certificate for financial years 2012-2016, out of which no additional tax liabilities arose in excess of the tax expense and the tax provision recognised in the annual financial statements of these years. The tax audit performed by the statutory auditors for financial year 2017, according to the provisions of Law 4174/2013, article 65Α, paragraph 1, as applicable, is still in progress and the tax compliance report is expected to be issued after the publication of the annual financial statements of year 2017. In any case and according to POL 1006/2016 there are no exemptions from the statutory tax audit by the tax authorities for the companies for which a tax compliance report is issued with no issues for the years after 2014. As a result, tax liabilities from 2012 onwards are not final. The Group's Management do not expect that significant additional tax liabilities will arise at the end of the tax audit, in excess of these provided for and disclosed in the financial statements.
(All amounts in €'000)
The tax on losses before tax of the Group and the Company differs from the theoretical amount that would arise using the weighted average tax rate applicable to profits/losses of group companies as follows:
| Group | Company | |||
|---|---|---|---|---|
| 1/1 - 31/12/2016 | ||||
| 1/1 - 31/12/2017 | Restated* 1/1 - 31/12/2017 1/1 - 31/12/2016 | |||
| Gain / (Loss) before tax | 4.166 | 1.001 | (9) | (2.184) |
| Tax calculated at tax rates applicable to | ||||
| Greece | (1.208) | (290) | 3 | 633 |
| Income not subject to tax | - | 2.684 | - | - |
| Expenses not deductible for tax purposes | (4.093) | (8.273) | (14) | (949) |
| Differences in tax rates | 11 | 752 | - | - |
| Effect of change in applicable tax rate | 325 | 343 | 49 | 343 |
| Utilisation of previously unrecognised tax losses | (276) | (1.143) | - | - |
| Other | (32) | (97) | - | - |
| Tax charge / (income) | (5.273) | (6.024) | 37 | 28 |
(*) Refer to note 43.
Basic earnings per share are calculated by dividing the profit/(loss) attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the year, excluding ordinary shares purchased by the Company and held as treasury shares (note 22).
Diluted earnings/(losses) per share are calculated adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares, such as stock options. For the share options a calculation is done to determine the number of shares that could have been acquired at fair value (determined as the average annual market share price of the Company's shares) based on the monetary value of the subscription rights attached to outstanding share options. The number of shares calculated as above is compared with the number of shares that would have been issued assuming the exercise of the share options.
From the calculation of the weighted average number of ordinary shares of diluted earnings, no difference has occurred in relation to basic earnings per share.
| Group | Company | |||
|---|---|---|---|---|
| 1/1 - 31/12/2016 | ||||
| 1/1 - 31/12/2017 | Restated* 1/1 - 31/12/2017 1/1 - 31/12/2016 | |||
| Profit / (loss) attributable to equity holders of the Company | 925 | (3.011) | 28 | (2.156) |
| Weighted average number of ordinary shares in issue (thousands) | 133.026 | 133.026 | 133.026 | 133.026 |
| Total profit / (losses) per share | 0,01 | (0,02) | 0,00 | (0,02) |
(*) Refer to note 43.
| Group 1/1 - 31/12/2016 |
Company | ||||
|---|---|---|---|---|---|
| Note | 1/1 - 31/12/2017 | Restated* 1/1 - 31/12/2017 | 1/1 - 31/12/2016 | ||
| Profit / (loss) for the year | (1.107) | (5.023) | 28 | (2.156) | |
| Adjustments for: | |||||
| Tax | 5.273 | 6.024 | (37) | (28) | |
| Depreciation of PPE | 6 | 6.159 | 6.433 | 234 | 280 |
| Amortisation of intangible assets | 8 | 890 | 972 | 10 | 2 |
| Depreciation of investment property | 9 | 1.034 | 1.022 | 1.225 | 1.200 |
| Impairment of investment property | 9 | - | 25 | - | 58 |
| Impairment of PPE | 6 | - | 61 | - | 28 |
| (Profit) / loss on sale of PPE | 32 | 92 | (6) | - | 10 |
| (Profit) / loss on sale of investment property Fair value losses / (gains) of financial assets at fair |
32 | (56) | - | - | - |
| value through profit or loss | 32 | (97) | 3 | - | - |
| Losses / (gains) from disposal/liquidation of | |||||
| available-for-sale financial assets | 32 | - | (2) | - | (2) |
| Impairment of available - for - sale financial assets | 32 | - | 3.613 | - | 462 |
| Impairment of subsidiaries | 10 | - | - | - | 1.065 |
| Impairment of loans and trade and other receivables | 29, 32 | 2.737 | 297 | 685 | 174 |
| Interest income | (4.473) | (2.086) | (1.539) | (1.589) | |
| Interest expense | 21.003 | 16.658 | 1.457 | 1.792 | |
| Dividend income | 31 | - | (4) | - | - |
| Amortisation of grants received | 26 | (5) | (5) | - | - |
| Share of loss from associates and joint ventures | 11 | 521 | 117 | - | - |
| Exchange (gains) / losses | (402) | - | - | - | |
| 31.569 | 28.099 | 2.063 | 1.297 | ||
| Changes in working capital | |||||
| (Increase) / decrease in inventories | 2.686 | (2.698) | - | - | |
| (Increase) / decrease in trade and other receivables | 20.933 | 28.521 | 943 | 45.112 | |
| Increase / (decrease) in trade and other payables | 8.774 | 12.630 | (1.777) | 343 | |
| Increase / (decrease) in provisions | (5.698) | 4.867 | (1.650) | - | |
| Increase / (decrease) in retirement benefit | |||||
| obligations | 972 | 379 | 12 | (45) | |
| 27.668 | 43.698 | (2.471) | 45.410 | ||
| Cash generated from operations | 59.237 | 71.797 | (409) | 46.707 | |
(*) Refer to note 43.
There are no capital commitments for property, plant and equipment for the Group at the balance sheet date (2016: €-).
| Group | Company | |||
|---|---|---|---|---|
| 31/12/2017 | 31/12/2016 | 31/12/2017 | 31/12/2016 | |
| Up to 1 year | 4.195 | 3.319 | 100 | 105 |
| From 2 to 5 years | 10.472 | 7.022 | 118 | 182 |
| More than 5 years | 15.158 | 4.222 | - | - |
| 29.825 | 14.563 | 218 | 287 |
The Group and the Company have contingent liabilities in respect of banks, other guarantees and other matters arising in the ordinary course of business as follows:
| Group | Company | |||
|---|---|---|---|---|
| 31/12/2017 | 31/12/2016 | 31/12/2017 | 31/12/2016 | |
| Guarantees for advance payments | 84.486 | 30.646 | 47.080 | 16.546 |
| Guarantees for good performance | 146.339 | 142.455 | 129.785 | 99.827 |
| Guarantees for participation in contests | 19.349 | 19.437 | 11.272 | 8.208 |
| Other | 18.029 | 17.853 | - | 3.500 |
| 268.204 | 210.392 | 188.136 | 128.081 |
The Company has provided guarantees to banks for subsidiaries' and other companies' loans amounting to €126.231.
There is an outstanding legal case against a subsidiary company filed by the Ministry of Mercantile Marine (MMM) concerning violations during the execution of a project completed and delivered to the MMM in a prior period. The penalties and rebates that were initially claimed have been reduced to €9 mil., following relevant appeals of the Company and ministerial decisions. Subsequently, according to a decision by the Administrative Court of Appeals of Piraeus, the above mentioned penalties and rebates were cancelled. On the appeal filed by the Greek State, the Council of State issued decision No 1742/2016 by which the appeal of the Greek State was upheld and the case was referred back to the Administrative Court of Appeal of Piraeus in order to be tried again. The case was discussed on 10.01.2018 and the decision of the Administrative Court of Appeal is pending. The legal advisor assesses that the decision of the Administrative Court of Appeal will be in favour of our subsidiary.
Teledome SA has taken legal action against Intracom Holdings, Hellas online and members of the Management requesting, among others, the revocation of the earlier decisions of key management personnel (Board of Directors and General Meeting) of the Group for the cancellation of the merger of Hellas online, Unibrain and Teledome. Through this lawsuit, an amount of approximately €141 mil. is claimed from the parent company, the former subsidiary Hellas OnLine and the members of the Management, for the loss and the moral damage that the plaintiffs allege to have suffered. Out of these lawsuits, the lawsuits submitted by the major shareholders of Teledome SA against Intracom Holdings SA as of 31/12/2007 (Νο 279874/12598/2007), 18/01/2008 (Νο 38548/1838/2008) and 18/01/2008 (Νο 38520/1835/2008) have been discussed and were partly
accepted by the No 3389/2014 decision of the Multi-Member Court of First Instance of Athens. This decision, however, was nullified by the subsequent No 224/2016 decision of the Athens Court of Appeal. According to the nullified first instance decision, a receivable had been recognised up to the amount of €17,6 million plus interest of €10,9 million as well as the withdrawal of their guarantees up to the amount of €12,4 million, while the plaintiffs were also provided with six (6) letters of guarantee according to No 190/2015 decision for interim relief issued by the Athens Court of First Instance with a Single Judge. This decision was however nullified by virtue of No 224/2016 decision of the Athens Court of Appeal, following which the return of the letters of guarantee to Intracom Holdings SA was ordered. Following the above final decision, the six (6) letters of guarantee were cancelled at 5.2.2016 in accordance with their terms. Subsequently, the plaintiffs filed an appeal before the Supreme Court against decision No 224/2016 of the Athens Court of Appeal. This was discussed in the hearing of 27.3.2017, and subsequently the Supreme Court issued decision No 1852/2017 according to which the above appeal as well as the additional reasons were rejected. Consequently, the above lawsuits have been irrevocably rejected.
In addition, at 10/02/2015 the Company was notified of a lawsuit by which the major shareholders of Teledome SA claims once more the release of the above guarantees to Banks up to approximately the amount of €13 mil. The hearing before the Multi-Member Court of First Instance of Athens had been set for 14.12.2017, but it was cancelled. In light of Supreme Court's decision No 1852/2017, which irrevocably rejected the above main lawsuits, the outcome of this case, which is dependent on this irrevocable outcome, is subject to the plaintiffs' decision to continue or not the judicial proceedings. In any case, it is evaluated that the probability of rejection of the above lawsuit is higher that the probability of a negative for the Company outcome, thus it has not recognised a relevant provision.
The Company was notified within the scope of the judicial assistance provided by the Greek Authorities to the Romanian Authorities that the latter are conducting a criminal investigation against CNLR state lottery for potentially committing the offence of providing gambling services without the necessary licence, which is linked to the latter's activity, as well as for complicity in the said offence. The Company in the past had entered into a contractual cooperation with the aforementioned state lottery CNLR within the scope of the Supply Credit Agreement FN/2003 which was signed between COMPANIA NATIONALA LOTERIA ROMANIA ("CNLR") and the companies LOTROM SA, INTRALOT SA and INTRACOM HOLDINGS SA – former INTRACOM SA According to the aforementioned notification received by the Company, both the Company itself as well as Intralot SA and Lotrom SA (a subsidiary of Intralot SA) are alleged accomplices of the above CNLR state lottery in the said offence. The Company has contested the above accusation through a statement of defence. The early stage and the nature of the case allows neither the provision of further information on the matter nor the assessment of any potential negative financial impact on the Company's results.
Intracom Telecom has filed three law suits before the Athens Multimember Court of First Instance against the Company and the group companies a) Intrakat SA and b) Rural Connect SA requesting:
(a) that the above three companies be ordered and held liable to pay to Intracom Telecom in the form of penalties and unsupported compensation the total amounts of €4,5mil. as regards Intrakat, €2mil. as regards Intracom Holdings and €1mil as regards Rural Connect on the grounds of alleged breaches of specific terms of the contract dated 1.10.2014 entered into between these companies and the claimant
(b) that Intrakat be ordered to pay to Intracom Telecom the total amount of €4,9mil as unpaid and outstanding construction consideration under a sub-construction agreement and
(c) that Intrakat and Rural Connect be ordered to pay to Intracom Telecom, jointly and severally, the amount of €11,4mil. approximately as outstanding (owing to contract termination) construction consideration under a sub-construction agreement as well as the amount of € 200 th. as compensation for moral damage.
The above claims were heard before the Athens Multimember Court of First Instance on 15.02.2017 which issued decision No 4338/2017, by which the discussion was adjurned until the issuance of a final arbitral decision on a relevant jointly tried dispute which was referred to arbitration.
Correspondingly, the Company, jointly with Intrakat and Rural Connect, has filed three arbitral actions in order to be held that termination of the agreement with Intracom Telecom is legitimate, that there is no obligation for compensation against Intracom Telecom for any reason, legal basis or amount whatsoever and that Intracom Telecom is obliged to pay to the claimants, as joint and several creditors, the amount of €10mil as compensation arising from penalty clauses. Developments in the course of arbitral proceedings are pending.
The Company, together with the other co-defendants, has not made any provision on this account, based on its legal advisor's opinion according to which the probability of having Intracom Telecom's claims rejected is clearly stronger than the probability of being upheld.
The Group and the Company have recognised provisions for court decisions and disputes subject to judicial proceedings or arbitration amounting to €2,7 mil.
The following transactions were carried out with related parties:
| Group | Company | ||||
|---|---|---|---|---|---|
| 1/1 - 31/12/2017 1/1 - 31/12/2016 1/1 - 31/12/2017 | 1/1 - 31/12/2016 | ||||
| Sales of goods / services: | |||||
| To subsidiaries | - | - | 2.166 | 2.366 | |
| To other related parties | 5.061 | 3.729 | 317 | 337 | |
| 5.061 | 3.729 | 2.483 | 2.703 | ||
| Purchases of goods / services: | |||||
| From subsidiaries | - | - | 139 | 168 | |
| From other related parties | 573 | 716 | - | 39 | |
| 573 | 716 | 139 | 206 | ||
| Rental income: | |||||
| From subsidiaries | - | - | 1.022 | 957 | |
| From other related parties | 691 | 727 | 560 | 563 | |
| 691 | 727 | 1.582 | 1.520 | ||
| Interest income: | |||||
| From subsidiaries | - | - | 408 | 325 | |
| From other related parties | - | - | 637 | 779 | |
| - | - | 1.045 | 1.104 |
| Group | Company | |||
|---|---|---|---|---|
| 1/1 - 31/12/2017 1/1 - 31/12/2016 1/1 - 31/12/2017 | 1/1 - 31/12/2016 | |||
| Purchases of fixed assets: | ||||
| From subsidiaries | - | - | 49 | 367 |
| - | - | 49 | 367 | |
Services from and to related parties as well as sales and purchases of goods take place based on the price lists that apply to non-related parties. Other related parties are mainly associates and companies in which the major shareholder of the Company holds an interest.
Year-end balances arising from transactions with related parties are as follows:
| Group | Company | |||
|---|---|---|---|---|
| 31/12/2017 | 31/12/2016 | 31/12/2017 | 31/12/2016 | |
| Receivables from related parties | ||||
| From subsidiaries | - | - | 10.804 | 12.044 |
| From other related parties | 20.572 | 18.910 | 13.890 | 15.660 |
| 20.572 | 18.910 | 24.694 | 27.704 | |
| Payables to related parties | ||||
| To subsidiaries | - | - | 1.556 | 59 |
| To other related parties | 10.861 | 7.828 | 6.183 | 6.575 |
| 10.861 | 7.828 | 7.739 | 6.634 |
During 2017 a total of €571 and €3.212 was paid by the Company and the Group respectively as Directors' remunerations, key Management and other related party compensations (2016: €891 and €3.344 respectively). At 31 December 2017 and 2016 there were no receivables or payables from/to Directors with regards to the Company. At 31 December 2017 the Group has outstanding payables to Directors amounting to €26 (2016: €208), while there were no receivables from Directors (2016: €14).
There are no significant post balance sheet events.
The companies and joint ventures included in the consolidated financial statements and the related direct percentage interests held are as follows.
| Country of | Direct % interest | Consolidation | Unaudited tax years | |
|---|---|---|---|---|
| Name | incorporation | held | method | |
| * Intracom S.A Defence Electronic Systems | Greece | 100,00% | Full | 2014-2017 |
| * Intracom Holdings International Ltd | Cyprus | 100,00% | Full | 2012-2017 |
| - Intracom Technologies Ltd | Cyprus | 100,00% | Full | 2012-2017 |
| - Intracom Operations Ltd | Cyprus | 100,00% | Full | 2012-2017 |
| - Intracom Group USA | USA | 100,00% | Full | From establishment until 2017 |
| - Duckelco Holdings Ltd | Cyprus | 100,00% | Full | 2012-2017 |
| - Ingrelenco Trading Co. Ltd | Cyprus | 100,00% | Full | 2012-2017 |
| - Athens Τech Sa | Greece | 35,41% | Equity | 2014-2017 |
| * Intrasoft International S.A. | Luxemburg | 99,99% | Full | 2015-2017 |
| - Intrasoft SA | Greece | 99,00% | Full | 2012-2017 |
| - Intrasoft International Belgium | Belgium | 100,00% | Full | 2012-2017 |
| - Intrasoft International Bulgaria | Bulgaria | 100,00% | Full | 2012-2017 |
| - Global Net Solutions Ltd | Bulgaria | 100,00% | Full | 2009-2017 |
| - Intrasoft International Scandinavia (πρώην IT Services Denmark AS) | Denmark | 100,00% | Full | 2007-2017 |
| - Intracom Exports Ltd | Cyprus | 100,00% | Full | 2012-2017 |
| - Intracom Cyprus Ltd | Cyprus | 100,00% | Full | 2012-2017 |
| - Intrasoft Information Technology UK Ltd | Great Britain | 100,00% | Full | 2011-2017 |
| - Intrasoft International USA Inc | USA | 100,00% | Full | 2014-2017 |
| - Intrasoft International ME FZC | UAE | 80,00% | Full | - |
| - Intracom IT Services Middle East & Africa | Jordan | 100,00% | Full | 2010-2017 |
| - Intrasoft International East Africa | Kenya | 88,00% | Full | 2015-2017 |
| - Valeu Consulting | Belgium | 50,00% | Full | 2017 |
| 89,78% | ||||
| Advanced Transport Telematics SA | Greece | (note 1) | Full | 2014-2017 |
| 87,73% | ||||
| * Rural Connect SA | Greece | (note 2) | Full | 2014-2017 |
| 92,31% | ||||
| * - Intradevelopment SA Estate Development & Management | Greece | (note 3) | Full | 2011-2017 |
| - Anaptyxiaki Kykladon SA Estate Development | Greece | 100,00% | Full | 2014-2017 |
| - Intrakyklades Estate Development | Greece | 100,00% | Full | 2014-2017 |
| 50% | ||||
| - Ιnestia Touristiki SA | Greece | (note 4) | Full | 2015-2017 |
| - Intra-hospitality SA Hotel and Tourism business | Greece | 100,00% | Full | 2015-2017 |
| - Alpha Anaptyxiaki Kykladon SA | Greece | 100,00% | Full | 2016-2017 |
| - Beta Anaptyxiaki Kykladon SA | Greece | 100,00% | Full | 2016-2017 |
| -Intrapar SA** | Greece | 100,00% | Full | 2010-2017 |
| - Kekrops SA** | Greece | 34,06% | Equity | 2010-2012, 2016-2017 |
| - Devenetco Ltd. | Cyprus | 50,00% | Equity | 2017 |
| -Grayalfa Holdings Ltd.** | Cyprus | 100,00% | Equity | 2017 |
| - B.L. Bluepro Holdings Ltd. | Cyprus | 100,00% | Equity | 2016-2017 |
| - Benecielo Co Ltd** | Cyprus | 100,00% | Equity | 2017 |
| - Stuerza Properties Ltd** | Cyprus | 100,00% | Equity | 2017 |
Note 1: The total indirect shareholding in Advanced Transport Telematics (89,78%) results from the participation of the subsidiaries Intrasoft International SA (direct shareholding 50%) and Intrakat SA (direct shareholding 50%).
Note 2: The total indirect shareholding in Rural Connect SA (87,73%) results from the interests held by the Company (direct shareholding 30%) and the subsidiaries Intrakat SA (direct shareholding 60%) and Intrasoft International SA (direct shareholding 10%).
Note 3: The total indirect shareholding in Intradevelopment (92,31%) results from the interests held by the Company (direct shareholding 62,39%) and the subsidiary Intrakat (direct shareholding 37,61%).
Note 4: The control on Inestia Touristiki SA is exercised through the majority of the members of the Board of Directors.
| (All amounts in €'000) | |||
|---|---|---|---|
| -- | ------------------------ | -- | -- |
| Name | Country of incorporation |
Direct % interest held |
Consolidation method |
Unaudited tax years |
|---|---|---|---|---|
| * Intrakat SA | Greece | 79,56% | Full | 2013-2017 |
| - Intracom Construct SA | Romania | 97,17% | Full | 2009-2017 |
| - Oikos Properties SRL | Romania | 100,00% | Full | 2009-2017 |
| - Rominplot SRL | Romania | 99,99% (note 5) |
Full | 2009-2017 |
| - J/V Αktor ΑΤΕ - Lobbe Tzilalis - Eurokat ATE (Total administration of ooze KEL) | Greece | 33,33% | Proportional | 2011-2017 |
| - Intrakat International Ltd | Cyprus | 100,00% | Full | 2008-2017 |
| - Alpha Mogilany Development SP Z.O.O. | Poland | 25,00% | Proportional | 2008-2017 |
| -Κ-Wind Kithaironas SAA( former Α. Katselis Energeiaki SA) | Greece | 80,00% | Full | 2011-2017 |
| - Α.Κ. Energeiaki SA | Greece | 60,00% | Full | 2011-2017 |
| - System of Contrοllable Parking of Thessaloniki SA (STELSTATH)** | Greece | 95,00% | Full | 2017 |
| - Company of special purpose "System of Contrοllable Parking of Thessaloniki SA"** | Greece | 60,00% | Full | 2017 |
| - Company Operating the Unit of Urban Solid Waste Treatment Facility of Serres SA (ELMEAS SA)** | Greece | 40,00% | Equity | 2017 |
| - Company Managing the Urban Solid Waste in the Municipality of Serres SA (SIRRA SA)** | Greece | 40,00% | Equity | 2017 |
| - Intrablue Hotel and Tourist Enterprises | Greece | 68,81% | Full | 2014-2017 |
| - Fracasso Hellas AE Design & construction of road safety systems | Greece | 80,00% | Full | 2016-2017 |
| - Fracasso Holdings D.O.O | Croatia | 40,00% | Equity | 2015-2017 |
| - J/V Intrakat. - "J/V Archirodon Hellas ATE - Prisma Domi ATE" (General Detainment Facility of Eastern Macedonia & Thrace) |
Greece | 80,00% | Full | 2011-2017 |
| - J/V Intrakat - Proteas (Ombria Anavisou) | Greece | 50,00% | Proportional | 2014-2017 |
| - J/V Intrakat - Proteas (Project for completion of Xiria stream) | Greece | 50,00% | Proportional | 2014-2017 |
| - Intrapower SA Energy Projects | Greece | 100,00% | Full | 2016-2017 |
| - β-WIND Power SA | Greece | 30,00% | Full | 2015-2017 |
| (note 6) | ||||
| - Mobile Composting S.A. | Greece | 24,00% | Equity | 2012-2017 |
| J/V Mohlos - Intrakat (Swimming pool) | Greece | 50,00% | Equity | 2011-2017 |
| J/V Panthessaliko Stadium | Greece | 15,00% | Equity | 2011-2017 |
| J/V Intrakat - ΑΤΤΙΚΑΤ (Εgnatia Road) | Greece | 50,00% | Proportional | 2011-2017 |
| J/V Intrakat - Elter (Natural gas school installation project) | Greece | 30,00% | Proportional | 2011-2017 |
| J/Vintrakat - Elter (Gas distribution network expansion Xanthi, Serres, Komotini) | Greece | 50,00% | Proportional | 2011-2017 |
| J/V ΑΚΤOR ΑΤΕ - J&P Avax - Intrakat (J/V Μoreas) | Greece | 13,33% | Proportional | 2011-2017 |
| J/V Intrakat- Elter (EPA 7 - Natural gas pipeline distribution network Attica South Region) | Greece | 49,00% | Proportional | 2011-2017 |
| J/V Anastilotiki - Getem - Eteth - Intrakat (Museum of Patras) | Greece | 25,00% | Proportional | 2011-2017 |
| J/V Anastilotiki - Getem - Intrakat (Peiros-Parapeiros Dam) | Greece | 33,30% | Proportional | 2011-2017 |
| J/V Intrakat - K.Panagiotidis & Co (Project of transfer line 1) | Greece | 60,00% | Proportional | 2011-2017 |
| J/V Intrakat - K.Panagiotidis & Co (Project of transfer line 1) | Greece | 46,90% | Proportional | 2011-2017 |
| J/V Ekter SA - Erteka SA - Themeli SA - Intrakat (Networks of Filothei region in Kifisia) | Greece | 24,00% | Proportional | 2011-2017 |
| J/V Intrakat - G.D.K. Texniki E.P.E. "J/V for the construction of Filiatrinou Dam" | Greece | 70,00% | Proportional | 2011-2017 |
| J/V Intrakat - G.D.K. Texniki E.P.E. "J/V for the construction of Filiatrinou Dam" | Greece | 33,33% | Proportional | 2012-2017 |
| J/V AKTOR ATE - Porto Karras AE - Intrakat (Eschatias Dam) | Greece | 25,00% | Proportional | 2013-2017 |
| J/V Intrakat - Proteas (Xiria Corinth) | Greece | 50,00% | Proportional | 2012-2017 |
| J/V AKTOR ATE - J&P AVAX - Intrakat (Panagopoulas Tunnel) | Greece | 25,00% | Proportional | 2014-2017 |
| J/V AKTOR ATE - INTRAKAT (Tracking Payment Aposelemis reservoir) | Greece | 50,00% | Proportional | 2014-2017 |
| J/V ΑΤΕRMON ΑΤΕ - ΙΝΤΡΑΚΑΤ (Supply of materials & construction of transmission line 400 KV KIΤ | ||||
| Lagada ΚIΤ Philipon and change of transmission line 400 KIΤ Thessalonikis - ΚIΤ Lagada ΚΥΤ | Greece | 50,00% | Proportional | 2014-2017 |
| Philipon) | ||||
| J/V TERNA - ΑKTOR (Votanikos Mosque)** | Greece | 25,00% | Proportional | 2016-2017 |
| J/V INTRAKAT -ΕRGO ΑΤΕ (Construction of distribution network & and gas pipelines in Αttiki) | Greece | 50,00% | Proportional | 2014-2017 |
| J/V ΙΝΤΡΑΚΑΤ - Archirodon-Envitec (Construction of Unit of Urban Solid Waste Treatment Facility Of Serres S.A.) ** |
Greece | 40,00% | Proportional | 2017 |
| J/V INTRAKAT -Watt S.A. (Construction of Unit of Waste Treatment Facility 2nd D.E. S.Voiotias)** | Greece | 50,00% | Proportional | 2017 |
Note 5: The total shareholding in Rominplot SRL is 100% through the participation of another subsidiary.
Note 6: The total shareholding in BWIND Power is 100% through the shareholding of the subsidiary Intrapower which is 70%.
(**) These companies have been included in the Group for the first time in the current year but were not included in the corresponding period of 2016.
On the contrary, the companies Ιnmaint, Ambtila Enterprises Limited and ICMH SA Medical Services were included in the consolidated financial statements of 2016 but are not included in current year's financial statements.
Except for the above, there are no further changes in the consolidation method for the companies included in the consolidated financial statements.
31 December 2016
| Country of | Direct % | Consolidation | ||
|---|---|---|---|---|
| Name | incorporation | interest held | method | Unaudited tax years |
| * Intracom S.A Defence Electronic Systems | Greece | 100,00% | Full | 2010 |
| * Intracom Holdings International Ltd | Cyprus | 100,00% | Full | 2012-2016 |
| - Intracom Technologies Ltd | Cyprus | 100,00% | Full | 2012-2016 |
| - Intracom Operations Ltd | Cyprus | 100,00% | Full | 2012-2016 |
| - Intracom Group USA | USA | 100,00% | Full | From establishment - 2016 |
| - Duckelco Holdings Ltd | Cyprus | 100,00% | Full | 2012-2016 |
| - Ingrelenco Trading Co. Ltd | Cyprus | 100,00% | Full | 2012-2016 |
| - Athens Τech Sa | Greece | 50,00% | Equity | 2014-2016 |
| * Intrasoft International S.A. | Luxemburg | 99,99% | Full | 2015-2016 |
| - Intrasoft SA | Greece | 99,00% | Full | 2010-2016 |
| - Intrasoft International Belgium | Belgium | 100,00% | Full | 2012-2016 |
| - Intrasoft International Bulgaria | Bulgaria | 100,00% | Full | 2012-2016 |
| - Global Net Solutions Ltd | Bulgaria | 100,00% | Full | 2009-2016 |
| - Intrasoft International Scandinavia (πρώην IT Services Denmark AS) | Denmark | 100,00% | Full | 2008-2016 |
| - Intracom Exports Ltd | Cyprus | 100,00% | Full | 2012-2016 |
| - Intracom Cyprus Ltd | Cyprus | 100,00% | Full | 2012-2016 |
| - Intrasoft Information Technology UK Ltd | Great Britain | 100,00% | Full | 2011-2016 |
| - Intrasoft International USA Inc | USA | 100,00% | Full | 2012-2016 |
| - Intrasoft International ME FZC | UAE | 80,00% | Full | - |
| - Intracom IT Services Middle East & Africa | Jordan | 100,00% | Full | 2010-2016 |
| - Intrasoft International East Africa | Kenya | 88,00% | Full | 2015-2016 |
| 80,88% | ||||
| Advanced Transport Telematics Α.Ε. | Greece | (note 1) | Full | 2014-2016 |
| 67,06% | ||||
| Rural Connect ΑΕ | Greece | (note 2) | Full | 2014-2016 |
Note 1: The total indirect shareholding in Advanced Transport Telematics (80,88%) results from the participation of the subsidiaries Intrasoft International SA (direct shareholding 50%) and Intrakat SA (direct shareholding 50%).
Note 2: The total indirect shareholding in Rural Connect SA (67,06%) results from the interests held by the Company (direct shareholding 30%) and the subsidiary Intrakat SA (direct shareholding 60%).
| Name | Country of incorporation |
Direct % interest held |
Consolidation method |
Unaudited tax years |
|---|---|---|---|---|
| * Intrakat SA | Ελλάδα | 61,76% | Ολική | 2016 |
| - Inmaint SA | Greece | 62,00% | Full | 2011, 2015-2016 |
| - Intracom Construct SA | Romania | 97,17% | Full | 2009-2016 |
| - Oikos Properties SRL | Romania | 100,00% | Full | 2009-2016 |
| 99,99% | ||||
| - Rominplot SRL | Romania | (note 3) | Full | 2009-2016 |
| - Eurokat SA | Greece | 100,00% | Full | 2016 |
| - J/V Αktor ΑΤΕ - Lobbe Tzilalis - Eurokat ATE (Total administration of ooze KEL) | Greece | 33,33% | Proportional | 2011-2016 |
| - J/V Eurokat ATE - Proteas ATEE (Rainwater runoff networks in Paiania's | Greece | 50,00% | Proportional | 2011-2016 |
| Municipality) | ||||
| - Intrakat International Ltd | Cyprus | 100,00% | Full | 2008-2016 |
| - Alpha Mogilany Development SP Z.O.O. | Poland | 25,00% | Equity | 2008-2016 |
| - Αmbtila Enterprises Limited | Cyprus | 100,00% | Full | 2008-2016 |
| - Α. Katselis Energeiaki SA | Greece | 80,00% | Full | 2011-2016 |
| - Α.Κ. Energeiaki SA** | Greece | 60,00% | Full | 2011-2016 |
| - Intrablue Hotel and Tourist Enterprises | Greece | 50,00% | Full | 2014-2016 |
| - Intradevelopment SA Estate Development & Management | Greece | 100,00% | Full | 2011-2016 |
| - Anaptyxiaki Kykladon SA Estate Development | Greece | 100,00% | Full | 2014-2016 |
| - Intrakyklades Estate Development | Greece | 100,00% | Full | 2014-2016 |
| - Ιnestia Touristiki SA | Greece | 50% (note 4) |
Full | 2015-2016 |
| - Intra-hospitality SA Hotel and Tourism business | Greece | 50,00% | Full | 2015-2016 |
| - Alpha Anaptyxiaki Kykladon SA ** | Greece | 100,00% | Full | 2016 |
| - Beta Anaptyxiaki Kykladon SA** | Greece | 100,00% | Full | 2016 |
| - Devenetco Ltd. ** | Cyprus | 100,00% | Full | 2016 |
| - B.L. Bluepro Holdings Ltd. ** | Cyprus | 100,00% | Full | 2016 |
| - Fracasso Hellas AE Design & construction of road safety systems | Greece | 80,00% | Full | 2016 |
| - Fracasso Holdings D.O.O | Croatia | 40,00% | Equity | 2015-2016 |
| - J/V Intrakat. - "J/V Archirodon Hellas ATE - Prisma Domi ATE" (General Detainment | Greece | 80,00% | Full | 2011-2016 |
| Facility of Eastern Macedonia & Thrace) | ||||
| - J/V Intrakat - Mesogeios ES SA (Biological purification operation and maintentance in Oinofita Shimatariou) |
Greece | 50,00% | Proportional | 2011-2016 |
| - J/V Intrakat - Proteas (Ombria Anavisou) | Greece | 50,00% | Proportional | 2014-2016 |
| - J/V Intrakat - Proteas (Project for completion of Xiria stream) | Greece | 50,00% | Proportional | 2014-2016 |
| - Intrapower SA Energy Projects | Greece | 100,00% | Full | 2016 |
| 50,00% | ||||
| - ICMH SA Medical Services | Greece | (note 5) | Full | 2014-2016 |
| - β-WIND Power SA | Greece | 30,00% | Full | 2015-2016 |
| (note 6) | ||||
| - Mobile Composting S.A. | Greece | 24,00% | Full | 2012-2016 |
| J/V Mohlos - Intrakat (Swimming pool) | Greece | 50,00% | Equity | 2011-2016 |
| J/V Panthessaliko Stadium | Greece | 15,00% | Equity | 2011-2016 |
| J/V Intrakat - Ergas - ALGAS | Greece | 33,33% | Equity | 2011-2016 |
Note 3: The total shareholding in Rominplot SRL is 100% through the participation of another subsidiary.
Note 4: The control on A. Katselis Energeiaki SA was exercised through the majority of the members of the Board of Directors.
Note 5: The control on ICMH Medical Services SA is exercised through the majority of the members of the Board of Directors.
Note 6: The total shareholding in BWIND Power is 100% through the shareholding of the subsidiary Intrapower which is 70%.
| Name | Country of incorporation |
Direct % interest held |
Consolidation method |
Unaudited tax years |
|---|---|---|---|---|
| J/V Intrakat - ΑΤΤΙΚΑΤ (Εgnatia Road) | Greece | 50,00% | Proportional | 2011-2016 |
| J/V Intrakat - Elter (Natural gas school installation project) | Greece | 30,00% | Proportional | 2011-2016 |
| J/V Intrakat - Intracom Telecom (DEPA Network) | Greece | 70,00% | Proportional | 2011-2016 |
| J/Vintrakat - Elter (Gas distribution network expansion Xanthi, Serres, Komotini) | Greece | 50,00% | Proportional | 2011-2016 |
| J/V ΑΚΤOR ΑΤΕ - J&P Avax - Intrakat (J/V Μoreas) | Greece | 13,33% | Proportional | 2011-2016 |
| J/V Intrakat- Elter (EPA 7 - Natural gas pipeline distribution network Attica South Regio | Greece | 49,00% | Proportional | 2011-2016 |
| J/V Eurokat - Intrakat (Ionios General clinic) | Greece | 100,00% | Proportional | 2011-2016 |
| J/V Anastilotiki - Getem - Eteth - Intrakat (Museum of Patras) | Greece | 25,00% | Proportional | 2011-2016 |
| J/V Anastilotiki - Getem - Intrakat (Peiros-Parapeiros Dam) | Greece | 33,30% | Proportional | 2011-2016 |
| J/V Intrakat - K.Panagiotidis & Co (Project of transfer line 1) | Greece | 60,00% | Proportional | 2011-2016 |
| J/V Altec - Intrakat - Anastilotiki (Thessaloniki Airport) | Greece | 46,90% | Proportional | 2011-2016 |
| J/V Intrakat - Filippos SA (Amfipolis project) | Greece | 50,00% | Proportional | 2011-2016 |
| J/V Ekter SA - Erteka SA - Themeli SA - Intrakat (Networks of Filothei region in Kifisia) | Greece | 24,00% | Proportional | 2011-2016 |
| J/V Intrakat - G.D.K. Texniki E.P.E. "J/V for the construction of Filiatrinou Dam" | Greece | 70,00% | Proportional | 2011-2016 |
| J/V J&P AVAX - AEGEK - Intrakat (Construction of railway Kiato - Rododafni) | Greece | 33,33% | Proportional | 2012-2016 |
| J/V AKTOR ATE - Porto Karras AE - Intrakat (Eschatias Dam) | Greece | 25,00% | Proportional | 2013-2016 |
| J/V Intrakat - Proteas (Xiria Corinth) | Greece | 50,00% | Proportional | 2012-2016 |
| J/V AKTOR ATE - J&P AVAX - Intrakat (Panagopoulas Tunnel) | Greece | 25,00% | Proportional | 2014-2016 |
| J/V AKTOR ATE - INTRAKAT (Tracking Payment Aposelemis reservoir) | Greece | 50,00% | Proportional | 2014-2016 |
| J/V ΑΤΕRMON ΑΤΕ - ΙΝΤΡΑΚΑΤ (Supply of materials & construction of transmission line | ||||
| 400 KV KIΤ-Lagada ΚIΤ Philipon and change of transmission line 400 KIΤ Thessalonikis - | Greece | 50,00% | Proportional | 2014-2016 |
| ΚIΤ Lagada ΚΥΤ Philipon) | ||||
| J/V TERNA - AKTOR ATE (Votanikos Mosque)** | Greece | 25,00% | Proportional | 2016 |
| J/V INTRAKAT -ΕRGO ΑΤΕ (Construction of distribution network & and gas pipelines in Αttiki) |
Greece | 50,00% | Proportional | 2014-2016 |
On 12.06.2017, the subsidiary INTRADEVELOPMENT acquired from natural persons related to the parent company 100% of INTRAPAR SA, shareholder of 25,72% of KEKROPS SA (as described in detail in the Notice of significant changes in the voting rights of KEKROPS SA dated 15.06.2017, pursuant to Law 3556/2007), for €7 mil. and an additional contingent consideration of €2,7 mil. which pertained to conditional payment.
As of that date the relevant shares and voting rights in INTRAPAR SA were transferred and the Company gained control over INTRAPAR SA as stipulated by IFRS 10. The Company followed IFRS 3 guidance to account for this transaction. This acquisition was performed in accordance with the Group's strategy to expand its activities to the real estate industry.
On 12.6.2017, the equity of INTRAPAR SA amounted to -€7,66 mil. including an investment in the associate KEKROPS SA of 25,72% carried at its market value of €815.
The consideration of the transaction was considered fair based on the following:
a) The valuation of the associate KEKROPS SA performed by an independent valuer who determined a fair value range between €67,4 mil. and €74,3 mil.
b) The letter of the legal advisor of KEKROPS SA according to which a positive outcome is expected with respect to the claim filed by KEKROPS SA for the nullification of decision No. 3401/2014 of the Athens Court of Appeal which validated the lawsuit filed by the Greek Government. With the above lawsuit the Greek Government claims the ownership of approximately 30 hectares of land at the Tourkovounia region, part of which belongs to KEKROPS SA.
c) The terms of the purchase and sale agreement of the shares of INTRAPAR SA which include an option to transfer these shares back to the sellers in case of a negative legal outcome for an amount equal to the purchase consideration.
Finally, as expressly stated in the sale and purchase contracts of the shares of INTRAPAR SA, in case the above nullification claim of KEKROPS SA becomes inadmissible, the acquired shares of INTRAPAR SA, including the relevant voting rights, are transferred to the Sellers, who are obliged to refund the consideration received with interest.
The Company has recognised the assets of the subsidiary based on their carrying values of -€7,66 mil. and as a result recognised goodwill of €17,4 mil.
The assets and liabilities of the acquired company are as follows:
| 12/6/2017 | |
|---|---|
| Investments in associates | 815 |
| Trade receivables | 138 |
| Other receivables and borrowings | (11.090) |
| Other assets | 2.475 |
| Net assets | (7.661) |
| Acquisition/Takeover cash outflows: | |
| Acquisition price in cash | 7.000 |
| 7.000 |
The estimation of fair values and the allocation of the consideration were finalised on 31/12/2017 with no adjustments to initial recognition.
The effect of the initial accounting treatment was as follows:
| Acquisition date | 12/6/2017 |
|---|---|
| Acquired shareholding | 100% |
| Acquisition price | |
| Cash | 7.000 |
| Contingent consideration payable in cash | 2.727 |
| Total acquisition price | 9.727 |
| Less:fair value of net assets acquired | (7.661) |
| Goodwill | 17.388 |
The cash outflow for the transaction included in the cash flow statement was €7 million.
It must be noted that following the acquisition, the Supreme Court issued decision No 589/2018 which upheld the appeal filed by KEKROPS against the Supreme Court's decision No 3401/2014 against the Greek State. More specifically, this decision nullified the decision of the Court of Appeals against the company, as, in breach of article 281 AK, it had rejected as illegitimate the objection for abusive use of the Greek State's right of ownership, by which KEKROPS claimed that the Greek State for at least 70 years expressly acknowledged the company's ownership through a number of declaratory actions. As a result, the case will be discussed again before the Athens Court of Appeal for essential judgement, according to the above binding for the Court of Appeal judgements of the Supreme Court.
Following the above development, the transaction of sale and purchase of INTRAPAR shares dated 12.06.2017 and the total purchase consideration have been finalised.
Subsequently, the subsidiary INTRADEVELOPMENT participated in INTRAPAR's share capital increase at 100% with the amount of €4,48 mil.
INTRAPAR participated in the share capital increase of KEKROPS SA which was carried out through initial public offering in the Athens Stock Exchange. Following this, INTRAPAR's interest held in the associate KEKROPS SA became 34,06%.
The Group restated certain amounts in the statement of profit or loss for 2016 and in the balance sheet as at 31.12.2016, in order to rectify errors.
The restatement did not affect the Company's financial statements.
The restatement concerns the following:
The Group transferred the amount of €8.476 from property, plant and equipment to investment property. This amount concerned construction work in progress related to investment property. This transfer did not have any impact on the revenue, profit after tax and total equity of the Group.
The Group transferred trade and other receivables of €6.987 from current assets to non-current assets, as these receivables will not be settled within 12 months from the end of the reporting date. The Group discounted these receivables recognising a loss of €1.138 in profit or loss of 2016, and more specifically of the second half of 2016 (finance expenses), and in the Group's equity.
The effect of the above corrections in the statement of comprehensive income for the year 2016 was €703 attributable to equity holders of the parent and €435 attributable to non-controlling interests.
The effect of the above corrections in equity as at 31 December 2016 was €703 in retained earnings and €435 in non-controlling interests.
No changes in the cash flow statement for 2016 were required as a result of the restatement.
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