Audit Report / Information • Sep 25, 2015
Audit Report / Information
Open in ViewerOpens in native device viewer
(previously INTRACOM S.A. Hellenic Telecommunications and Electronics Industry)
Financial Statements in accordance with International Financial Reporting Standards as adopted by the EU
31 December 2007
These financial statements have been translated from the original statutory financial statements that have been prepared in the Greek language. In the event that differences exist between this translation and the original Greek language financial statements, the Greek language financial statements will prevail over this document.
Financial Statements in accordance with IFRS 31 December 2007
| Contents | Page | |
|---|---|---|
| Report of the certified auditor – accountant | ||
| Balance Sheet | 4 | |
| Income Statement – Group | 5 | |
| Income Statement – Company | 6 | |
| Statement of changes in equity – Group | 7 | |
| Statement of changes in equity – Company | 8 | |
| Cash Flow Statement | 9 | |
| Notes to the financial statements in accordance with International Financial Reporting Standards |
10 | |
| 1. | General information | 10 |
| 2. | Summary of significant accounting policies | 10 |
| 3. | Financial risk management | 26 |
| 4. | Critical accounting estimates and judgments | 31 |
| 5. | Segment information | 31 |
| 6. | Property, plant and equipment | 35 |
| 7. | Goodwill | 37 |
| 8. | Intangible assets | 38 |
| 9. | Investment property | 40 |
| 10. | Investments in subsidiaries | 41 |
| 11. | Investments in associates | 42 |
| 12. | Joint ventures | 43 |
| 13. | Available-for-sale financial assets | 46 |
| 14. | Deferred income tax | 47 |
| 15. | Trade and other receivables | 49 |
| 16. | Inventories | 51 |
| 17. | Construction contracts | 52 |
| 18. | Financial assets at fair value through profit or loss | 53 |
| 19. | Cash and cash equivalents | 53 |
| 20. | Share capital | 54 |
| 21. | Other reserves | 56 |
| 22. | Borrowings | 57 |
| 23. | Retirement benefit obligations | 59 |
| 24. | Grants | 60 |
| 25. | Provisions | 61 |
| 26. | Trade and other payables | 62 |
Financial Statements in accordance with IFRS 31 December 2007
| 27. | Derivative financial instruments | 62 |
|---|---|---|
| 28. | Expenses by nature | 63 |
| 29. | Employee benefits | 63 |
| 30. | Other operating income - net | 64 |
| 31. | Other gains/ (losses) – net | 64 |
| 32. | Finance expenses / (income) - net | 65 |
| 33. | Income tax expense | 65 |
| 34. | Assets classified as held for sale/ Discontinued operations | 66 |
| 35. | Earnings per share | 68 |
| 36. | Dividends | 68 |
| 37. | Cash generated from operations | 69 |
| 38. | Business combinations | 70 |
| 39. | Commitments | 72 |
| 40. | Contingencies / Outstanding legal cases | 73 |
| 41. | Related party transactions | 74 |
| 42. | Events after the balance sheet date | 75 |
| 43. | Subsidiaries | 76 |
We have audited the accompanying separate and consolidated financial statements of INTRACOM HOLDINGS S.A. ''(the "Company") which comprise of the separate and consolidated balance sheet as at December 31, 2007, and the income statement, statement of changes in equity and cash flow statement for the year then ended and a summary of significant accounting policies and other explanatory notes.
Management is responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards, as adopted by the European Union (EU). This responsibility includes designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Greek Auditing Standards, which are based on International Standards of Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
In our opinion, the aforementioned separate and consolidated financial statements present fairly, in all material respects, the financial position of the Company and the Group as of 31 December 2007 and of its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards, as adopted by the European Union (EU).
The report of the Board of Directors includes the information that is provided by the articles 43a paragraph 3, 107 paragraph 3 and 16 paragraph 9 of C.L. 2190/20 as well as the article 11a of L. 3371/2005. The content of this report is consistent with the aforementioned seperate and consolidated financial statements.
Athens, March 31, 2008
The Certified Auditors Accountants
Alexandros E. Tziortzis Ioannis G. Mystakidis (SOEL Reg. No. 12371) (SOEL Reg. No. 16511) (SOEL Reg. No. 125) (SOEL Reg. No. 107)
SOL S.A Ernst & Young (Hellas) S.A
Zoe D. Sofou (SOEL Reg. No. 14701) SOL S.A (SOEL Reg. No. 125)
(All amounts in €'000)
| Group | Company | ||||
|---|---|---|---|---|---|
| ASSETS | Note | 31/12/2007 | 31/12/2006 | 31/12/2007 | 31/12/2006 |
| Non-current assets | |||||
| Property, plant and equipment | 6 | 277.276 | 144.097 | 39.265 | 55.272 |
| Goodwill | 7 | 60.047 | 11.361 | - | - |
| Intangible assets | 8 | 32.084 | 13.264 | 3.654 | 5.253 |
| Investment property | 9 | 50.049 | 63.170 | 55.244 | 46.603 |
| Investments in subsidiaries | 10 | - | - | 223.982 | 177.682 |
| Investments in associates | 11 | 117.475 | 120.590 | 116.175 | 116.175 |
| Available - for - sale financial assets | 13 | 24.525 | 11.502 | 16.769 | 9.030 |
| Deferred income tax assets | 14 | 1.616 | 5.020 | - | 3.938 |
| Trade and other receivables | 15 | 31.027 | 21.075 | 12.238 | 12.767 |
| 594.099 | 390.079 | 467.327 | 426.722 | ||
| Current assets | |||||
| Inventories | 16 | 48.987 | 49.649 | - | - |
| Trade and other receivables | 15 | 306.071 | 254.807 | 43.683 | 64.289 |
| Construction contracts | 17 | 20.772 | 16.267 | - | - |
| Available - for - sale financial assets | 13 | - | 508 | - | - |
| Financial assets at fair value through profit or loss | 18 | 1.245 | 1.056 | - | - |
| Current income tax assets | 13.848 | 8.453 | 4.971 | 4.629 | |
| Cash and cash equivalents | 19 | 76.573 | 115.477 | 32.935 | 72.531 |
| 467.497 | 446.217 | 81.589 | 141.449 | ||
| Assets classified as held for sale | 34 | - | 80.940 | - | - |
| 467.497 | 527.157 | 81.589 | 141.449 | ||
| Total assets | 1.061.596 | 917.236 | 548.917 | 568.171 | |
| EQUITY | |||||
| Capital and reserves attributable to the Company's equity holders | |||||
| Share capital | 20 | 374.047 | 377.329 | 374.047 | 377.329 |
| Reserves | 136.942 | 186.022 | 137.433 | 159.535 | |
| 510.989 | 563.351 | 511.480 | 536.864 | ||
| Minority interest | 29.005 | 20.197 | - | - | |
| Total equity | 539.993 | 583.549 | 511.480 | 536.864 | |
| LIABILITIES | |||||
| Non-current liabilities | |||||
| Borrowings | 22 | 63.935 | 35.259 | - | 3 |
| Deferred income tax liabilities | 14 | 5.198 | 487 | 355 | - |
| Retirement benefit obligations | 23 | 4.053 | 2.719 | 530 | 438 |
| Grants | 24 | 1.763 | 544 | - | - |
| Provisions for other liabilities and charges | 25 | 957 | 2.606 | - | - |
| Trade and other payables | 26 | 7.928 | 2.096 | - | - |
| 83.834 | 43.711 | 885 | 441 | ||
| Current liabilities | |||||
| Trade and other payables | 26 | 242.094 | 145.174 | 22.645 | 20.931 |
| Current income tax liabilities | 5.948 | 3.139 | 988 | 982 | |
| Construction contracts | 17 | 2.460 | 1.090 | - | - |
| Borrowings | 22 | 180.598 | 82.150 | 12.777 | 4.337 |
| Derivative financial instruments | 27 | - | 4.475 | - | 4.475 |
| Provisions for other liabilities and charges | 25 | 6.668 | 5.256 | 142 | 142 |
| 437.769 | 241.283 | 36.552 | 30.866 | ||
| Liabilities directly associated with non-current assets classified as held for sale | 34 | - | 48.692 | - | - |
| 437.769 | 289.976 | 36.552 | 30.866 | ||
| Total liabilities | 521.603 | 333.687 | 37.436 | 31.307 | |
| Total equity and liabilities | 1.061.596 | 917.236 | 548.917 | 568.171 |
(All amounts in €'000)
| Note | Continuing operations |
Discontinued operations |
Total | Continuing | Discontinued | Total | |
|---|---|---|---|---|---|---|---|
| operations | operations | ||||||
| Sales | 423.000 | - | 423.000 | 352.480 | 171.548 | 524.028 | |
| Cost of goods sold | 28 | (363.239) | - | (363.239) | (299.734) | (126.321) | (426.055) |
| Gross profit | 59.761 | - | 59.761 | 52.746 | 45.227 | 97.973 | |
| Other operating income - net | 30 | 5.232 | - | 5.232 | 5.685 | 1.034 | 6.718 |
| Other gains/ (losses) - net | 31 | 15.239 | - | 15.239 | 4.766 | - | 4.766 |
| Selling and research costs | 28 | (37.831) | - | (37.831) | (32.651) | (24.135) | (56.786) |
| Administrative expenses | 28 | (52.111) | - | (52.111) | (49.297) | (15.342) | (64.640) |
| Loss from the disposal of sub-group | 34 | - | (770) | (770) | - | (19.148) | (19.148) |
| Operating loss | (9.710) | (770) | (10.480) | (18.752) | (12.364) | (31.116) | |
| Finance expenses | 32 | (14.414) | - | (14.414) | (11.315) | (5.441) | (16.756) |
| Finance income | 32 | 4.229 | - | 4.229 | 2.766 | - | 2.766 |
| Finance costs-net | (10.185) | - | (10.185) | (8.549) | (5.441) | (13.990) | |
| Share of losses of associates | 11 | (554) | - | (554) | (15.689) | - | (15.689) |
| Loss before income tax | (20.450) | (770) | (21.220) | (42.991) | (17.805) | (60.796) | |
| Income tax expense | 33 | (15.691) | - | (15.691) | (842) | (7.305) | (8.148) |
| Loss for the year | (36.140) | (770) | (36.910) | (43.833) | (25.111) | (68.944) | |
| Attributable to: | |||||||
| Equity holders of the Company | (34.312) | (770) | (35.082) | (43.584) | (25.219) | (68.803) | |
| Minority interest | (1.828) | - | (1.828) | (249) | 108 | (141) | |
| (36.140) | (770) | (36.910) | (43.833) | (25.111) | (68.944) |
equity holders of the Company during the year
| (expressed in € per share) | |||||||
|---|---|---|---|---|---|---|---|
| Basic | 35 | (0,26) | (0,01) | (0,27) | (0,33) | (0,19) | (0,52) |
| Diluted | 35 | (0,26) | (0,01) | (0,27) | (0,33) | (0,19) | (0,52) |
(All amounts in €'000)
| 1/1 - 31/12/2007 | 1/1 - 31/12/2006 | |||||||
|---|---|---|---|---|---|---|---|---|
| Note | Continuing operations |
Discontinued operations |
Total | Continuing operations |
Discontinued operations |
Total | ||
| Sales | 12.122 | - | 12.122 | 19.207 | - | 19.207 | ||
| Cost of goods sold | 28 | (11.549) | - | (11.549) | (15.230) | - | (15.230) | |
| Gross profit | 574 | - | 574 | 3.977 | - | 3.977 | ||
| Other operating income - net | 30 | 4.192 | - | 4.192 | 3.927 | - | 3.927 | |
| Other gains/ (losses) - net | 31 | (3) | - | (3) | 10.127 | - | 10.127 | |
| Selling and research costs | 28 | (273) | - | (273) | (425) | - | (425) | |
| Administrative expenses | 28 | (7.579) | - | (7.579) | (6.092) | - | (6.092) | |
| Loss from the disposal of sub-group | 34 | - | (770) | (770) | - | (630) | (630) | |
| Operating profit/ (loss) | (3.090) | (770) | (3.860) | 11.513 | (630) | 10.883 | ||
| Finance expenses | 32 | (780) | - | (780) | (2.014) | - | (2.014) | |
| Finance income | 32 | 3.584 | - | 3.584 | 441 | - | 441 | |
| Finance costs-net | 2.805 | - | 2.805 | (1.572) | - | (1.572) | ||
| (Loss)/ Profit before income tax | (285) | (770) | (1.055) | 9.941 | (630) | 9.311 | ||
| Income tax expense | 33 | (4.827) | - | (4.827) | (2.654) | (6.554) | (9.208) | |
| (Loss)/ Profit for the year | (5.112) | (770) | (5.882) | 7.287 | (7.184) | 103 | ||
| Earnings per share for profit attributable to the equity holders of the Company during the year (expressed in € per share) Basic |
35 | (0,04) | (0,01) | (0,05) | 0,06 | (0,05) | 0,01 | |
| Diluted | 35 | (0,04) | (0,01) | (0,05) | 0,06 | (0,05) | 0,01 |
(All amounts in €'000)
| Attributable to equity holders of the Company | |||||||
|---|---|---|---|---|---|---|---|
| Minority interest | Total equity | ||||||
| Note | Share capital Other reserves | Retained earnings | |||||
| Balance at 1 January 2006 | 472.205 | 263.392 | (102.075) | 27.810 | 661.332 | ||
| Loss for the year | - | - | (68.803) | (141) | (68.944) | ||
| Valuation of available - for - sale financial assets | 21 | - | 24 | - | - | 24 | |
| Currency translation differences | 21 | - | 324 | - | 25 | 348 | |
| Total recognised income and expense | - | 347 | (68.803) | (116) | (68.572) | ||
| Treasury shares | 20 | (4.215) | - | - | - | (4.215) | |
| Expenses on issue of share capital | 20 | (29) | - | - | - | (29) | |
| Decrease of share capital | 20 | (92.690) | - | 92.690 | - | - | |
| Employees share option scheme: | - | - | - | - | - | ||
| - value of employee services | 20 | 555 | - | - | - | 555 | |
| - proceeds from shares issued | 20 | 1.503 | - | - | - | 1.503 | |
| Dividends paid | - | - | - | (264) | (264) | ||
| Effect of changes in the group structure | 21 | - | (1.460) | 1.089 | (7.233) | (7.603) | |
| Reclassification due to disposal of subsidiary | - | (71.827) | 71.827 | - | - | ||
| Other movement in net assets of associates | - | 841 | - | - | 841 | ||
| (94.876) | (72.445) | 165.606 | (7.496) | (9.212) | |||
| Balance at 31 December 2006 | 377.329 | 191.294 | (5.272) | 20.197 | 583.549 | ||
| Balance at 1 January 2007 | 377.329 | 191.294 | (5.272) | 20.197 | 583.549 | ||
| Loss for the year | - | - | (35.082) | (1.828) | (36.910) | ||
| Valuation of available - for - sale financial assets | 21 | - | 491 | - | 1.289 | 1.780 | |
| Currency translation differences | 21 | - | (643) | - | (229) | (872) | |
| Total recognised income and expense | - | (152) | (35.082) | (768) | (36.002) | ||
| Treasury shares | 20 | (3.509) | - | - | - | (3.509) | |
| Expenses on issue of share capital | 20 | (14) | - | (499) | - | (512) | |
| Employees share option scheme: | - | - | - | - | - | ||
| - value of employee services | 20 | - | 149 | - | 33 | 182 | |
| - proceeds from shares issued | 20 | 241 | 177 | - | 514 | 932 | |
| Dividends paid | 36 | - | (13.126) | - | (189) | (13.314) | |
| Effect of acquisitions and changes in the share percentage held in | |||||||
| subsidiaries | - | - | 117 | 4.295 | 4.412 | ||
| Effect of changes in the group structure | - | - | - | 4.257 | 4.257 | ||
| Transfer | - | 8.289 | (8.954) | 665 | (0) | ||
| (3.282) | (4.510) | (9.336) | 9.575 | (7.554) | |||
| Balance at 31 December 2007 | 374.047 | 186.632 | (49.690) | 29.005 | 539.993 | ||
Analysis of other reserves is presented in note 21.
(All amounts in €'000)
| Balance at 1 January 2006 472.205 159.563 (92.758) 539.011 Profit for the year - - 103 Valuation / Disposal of available - for - sale financial assets 21 - (63) - Total recognised income and expense - (63) 103 Decrease of share capital 20 (92.690) - 92.690 Treasury shares 20 (4.215) - - Expenses on issue of share capital 20 (29) - - Employees share option scheme: - value of employee services 20 555 - - - proceeds from shares issued 20 1.503 - - (94.876) - 92.690 Balance at 31 December 2006 377.329 159.500 35 536.864 Balance at 1 January 2007 377.329 159.500 35 536.864 Profit for the year - - (5.882) Valuation of available - for - sale financial assets - (3.093) - Total recognised income and expense - (3.093) (5.882) Treasury shares 20 (3.509) - - Expenses on issue of share capital 20 (14) - - Dividend paid 36 - (13.126) - Employees share option scheme: - - - - proceeds from shares issued 20 241 - - (3.282) (13.126) - Balance at 31 December 2007 374.047 143.281 (5.848) 511.480 |
Retained | ||||
|---|---|---|---|---|---|
| Note | Share capital | Other reserves | earnings | Total equity | |
| 103 | |||||
| (63) | |||||
| 40 | |||||
| - | |||||
| (4.215) | |||||
| (29) | |||||
| 555 | |||||
| 1.503 | |||||
| (2.187) | |||||
| (5.882) | |||||
| (3.093) | |||||
| (8.976) | |||||
| (3.509) | |||||
| (14) | |||||
| (13.126) | |||||
| - | |||||
| 241 | |||||
| (16.408) | |||||
Analysis of other reserves is presented in note 21.
(All amounts in €'000)
| Group | Company | ||||
|---|---|---|---|---|---|
| Note | 1/1 - 31/12/2007 | 1/1 - 31/12/2006 | 1/1 - 31/12/2007 | 1/1 - 31/12/2006 | |
| Cash flows from operating activities | |||||
| Cash generated from operations | 37 | 15.176 | 41.669 | (4.217) | 21.364 |
| Interest paid | (14.414) | (16.331) | (780) | (2.014) | |
| Income tax paid | (8.430) | (12.906) | (2.187) | (7.969) | |
| Net cash generated from operating activities | (7.668) | 12.433 | (7.184) | 11.381 | |
| Cash flows from investing activities | |||||
| Purchase of property, plant and equipment (PPE) / investment property | (88.706) | (15.396) | (3.600) | (4.391) | |
| Purchase of intangible assets | 8 | (6.197) | (4.144) | - | - |
| Proceeds from sale of PPE | 11.534 | 3.005 | 8.053 | 1.157 | |
| Proceeds from sale of investment assets | 1.253 | - | 1.253 | - | |
| Proceeds from sale of intangible assets | 33 | 76 | - | - | |
| Acquisition of financial assets at fair value through profit or loss | 18 | (63) | - | - | - |
| Acquisition of available - for - sale financial assets | 13 | (1.775) | (1.043) | (1.735) | (1.043) |
| Sale of financial assets at fair value through profit or loss | 272 | 2.678 | - | - | |
| Sale of available - for - sale financial assets | 22 | 1.990 | - | 100 | |
| Sale of assets held for sale | - | 38.025 | - | 34.865 | |
| Acquisition of subsidiary, net of cash acquired | 38 | (50.620) | (18.909) | (52.300) | (61.204) |
| Increase in share capital of subsidiary classified as held for sale | - | (21.500) | - | - | |
| Proceeds from sale of subsidiaries | 34 | 29.230 | 49.401 | 29.576 | 114.046 |
| Proceeds from sale of associates | 746 | - | - | - | |
| Purchase of associate | 11 | (9.340) | - | (9.340) | - |
| Dividends received | 90 | 388 | 1.600 | - | |
| Interest received | 2.942 | 1.565 | 2.297 | 1.333 | |
| Cash of subsidiary due to change in consolidation method | 34, 38 | 8.803 | - | - | - |
| Net cash from investing activities | (101.773) | 36.136 | (24.194) | 84.864 | |
| Cash flows from financing activities | |||||
| Proceeds from issuance of ordinary shares | 20 | 241 | 1.503 | 241 | 1.503 |
| Purchase of treasury shares | 20 | (3.509) | (4.215) | (3.509) | (4.215) |
| Expenses on issue of share capital | (512) | (29) | (14) | (29) | |
| Proceeds from share options | 590 | - | - | - | |
| Dividends paid to Company's shareholders | (13.373) | (477) | (13.373) | (477) | |
| Dividends paid to minority interests | (189) | (264) | - | - | |
| Proceeds from borrowings | 256.790 | 49.058 | 9.294 | - | |
| Repayments of borrowings | (168.091) | (73.642) | (845) | (87.349) | |
| Grants received | 24 | 1.644 | 150 | - | - |
| Repayments of finance leases | (3.053) | (1.008) | (11) | (8) | |
| Net cash from financing activities | 70.537 | (28.924) | (8.218) | (90.575) | |
| Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year |
(38.904) 115.477 |
19.645 95.832 |
(39.596) 72.531 |
5.669 66.862 |
|
| Cash and cash equivalents at end of year | 19 | 76.573 | 115.477 | 32.935 | 72.531 |
Financial Statements in accordance with IFRS 31 December 2007
(All amounts in €'000)
Intracom Holdings was founded in Greece and the Company's shares are traded in Athens Stock Exchange.
Intracom Group operates, through the subsidiaries and associates, in developing products, providing services and undertaking complex, integrated and advanced technology projects in the telecommunications, defence, public administration, and banking & finance industries and has also activities in the construction sector and the telecommunications sector. The parent company operates as a holding company.
The Group operates in Greece, U.S.A, Bulgaria, Romania, as well as in other foreign countries.
The Company's registered office is at 19 km Markopoulou Ave., Peania Attikis, Greece. Its website address is www.intracom.com.
The financial statements have been approved for issue by the Board of Directors on 28 March 2008 and are subject to approval by the Annual General Meeting of the Shareholders.
These financial statements consist of the stand alone financial statements of Intracom Holdings S.A. (the "Company") and the consolidated financial statements of the Company and its subsidiaries (the "Group") for the year ended 31 December 2007, 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 derivatives, 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 management 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.
Accounting policies used in the preparation of the financial statement of subsidiaries, associates and joint ventures are consistent with those applied by the parent company.
(All amounts in €'000)
IFRS 7 introduces new disclosures to improve the information about financial instruments. It requires the disclosure of qualitative and quantitative information about exposure to risks arising from financial instruments. These new disclosures are included in note 3, as well as in the other notes to the financial statements.
The amendment to IAS 1 introduces disclosures about the level of an entity's capital and how it manages capital. These new disclosures are presented in note 3 of the annual financial statements for the year 2007.
This interpretation is effective for annual periods beginning on or after 1 March 2007 and clarifies the treatment where employees of a subsidiary receive the shares of a parent.
Intracom Holdings has early adopted IFRIC 11 in the financial statements of year 2006 and has recorded an amount of €297 in shareholders' equity, which relates to the total expense for share options granted by the parent to the employees of a subsidiary during the year. The charge has been transferred to the subsidiary through the account "Investment in subsidiaries".
This interpretation requires IFRS 2 Share-Based Payments to be applied to any arrangements in which the entity cannot identify specifically some or all of the goods received, in particular where equity instruments are issued for consideration which appears to be less than fair value. The interpretation is not relevant to the Group's operations.
IFRIC 9 states that the date to assess the existence of an embedded derivative is the date that an entity first becomes a party to the contract, with reassessment only if there is a change to the contract that significantly modifies the cash flows. The interpretation is not relevant to the Group's operations.
IFRIC 10 requires that an entity must not reverse an impairment loss recognised in a previous interim period in respect of goodwill or an investment in either an equity instrument or a financial asset carried at cost. The interpretation did not have any impact on the Group's financial statements.
Amendment to IAS 23 'Borrowing costs' (effective for annual periods beginning on or after 1 January 2009)
The benchmark treatment in the existing standard of expensing all borrowing costs to the income statement is eliminated in the case of qualifying assets. All borrowing costs that are directly attributable to the acquisition or construction of a qualifying asset must be capitalised. A qualifying asset is an asset that necessarily takes a
(All amounts in €'000)
substantial period of time to get ready for its intended use or sale. In accordance with the transitional requirements of the Standard, the Group will adopt this as a prospective change. Accordingly, borrowing costs will be capitalised on qualifying assets with a commencement date after the effective date. No changes will be made for borrowing costs incurred to this date that have been expensed.
The amendment clarifies two issues: The definition of 'vesting condition', introducing the term 'non-vesting condition' for conditions other than service conditions and performance conditions. It also clarifies that the same accounting treatment applies to awards that are effectively cancelled by either the entity or the counterparty. The Group expects that this Interpretation will have no impact on its financial statements.
IFRS 8 'Operating Segments' (effective for annual periods beginning on or after 1 January 2009)
IFRS 8 replaces IAS 14 'Segment Reporting' and adopts a management-based approach to segment reporting. The information reported would be that which management uses internally for evaluating the performance of operating segments and allocating resources to those segments. This information may be different from that reported in the balance sheet and income statement and entities will need to provide explanations and reconciliations of the differences. The Group is in the process of assessing the impact of this standard on its financial statements and will adopt IFRS 8 from 1 January 2009.
A revised version of IFRS 3 Business Combinations and an amended version of IAS 27 Consolidated and Separate Financial Statements were issued by IASB on January 10, 2008. IFRS 3R introduces a number of changes in the accounting for business combinations which will impact the amount of goodwill recognized, the reported results in the period that an acquisition occurs, and future reported results. Such changes include the expensing of acquisition-related costs and recognizing subsequent changes in fair value of contingent consideration in the profit or loss (rather than by adjusting goodwill). IAS 27R requires that a change in ownership interest of a subsidiary is accounted for as an equity transaction. Therefore such a change will have no impact on goodwill, nor will it give raise to a gain or loss. Furthermore the amended standard changes the accounting for losses incurred by the subsidiary as well as the loss of control of a subsidiary. The changes introduced by IFRS 3 and IAS 27 must be applied prospectively and will affect future acquisitions and transactions with minority interests.
Amendments to IAS 32 and IAS 1 Puttable Financial Instruments (effective for annual periods beginning on or after 1 January 2009)
The amendment to IAS 32 requires certain puttable financial instruments and obligations arising on liquidation to be classified as equity if certain criteria are met. The amendment to IAS 1 requires disclosure of certain information relating to puttable instruments classified as equity. The Group does not expect these amendments to impact the financial statements of the Group.
(All amounts in €'000)
IFRIC 12 outlines an approach to account for contractual (service concession) arrangements arising from entities providing public services. It provides that the operator should not account for the infrastructure as property, plant and equipment, but recognise a financial asset and/or an intangible asset. The Group is in the process of assessing the impact of this standard on its financial statements.
IFRIC 13 requires customer loyalty award credits to be accounted for as a separate component of the sales transaction in which they are granted and therefore part of the fair value of the consideration received is allocated to the award credits and deferred over the period that the award credits are fulfilled. The Group expects that this Interpretation will have no impact on its financial statements as no such schemes currently exist.
IFRIC 14 provides guidance on how to assess the limit on the amount of surplus in a defined benefit scheme that can be recognised as an asset under IAS 19 Employee Benefits. It also explains how this limit, also referred to as the "asset ceiling test", may be influenced by a minimum funding requirement and aims to standardize current practice. The Group expects that this Interpretation will have no impact on its financial position or performance as the Group does not operate any funded plans.
Subsidiaries, which are those entities in which the Group has an interest of more than one half of the voting rights or otherwise has power to govern the financial and operating policies, are consolidated. The existence and effect of potential voting rights that are presently exercisable or presently convertible are considered when assessing whether the Group controls another entity.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group and are no longer consolidated from the date that control ceases. The purchase method of accounting is used to account for the acquisition of subsidiaries. The cost of an acquisition is measured as the sum of the fair values, at the date of exchange, of the assets given, liabilities incurred or assumed, and equity instruments issued by the Group, in exchange for control of the acquiree plus any costs directly attributable to the acquisition. The acquired identifiable assets, liabilities and contingent liabilities are measured initially at their fair values at the acquisition date, irrespective of the extent of any minority interests. The excess of the cost of acquisition over the fair value of the net assets of the subsidiary acquired is recorded as goodwill. Where the cost of the acquisition is less than the fair value of the Group's share of the net assets of the subsidiary acquired, the difference is recognised directly in the income statement.
Purchases of minority interests result in goodwill, being the difference between any consideration paid and the relevant share acquired of the carrying value of the net assets of the subsidiary. In case of sale of minority interests, any gain or loss is recorded in the income statement.
(All amounts in €'000)
Inter-company transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised losses are also eliminated unless cost cannot be recovered.
The Company accounts for investments in subsidiaries in its stand alone financial statements at cost less impairment.
Joint ventures or jointly controlled entities are accounted for by proportionate consolidation. The Group combines its share in the joint venture on a line-by-line basis in the financial statements.
The Group recognises the portion of gains or losses on the sale of assets by the Group to the joint venture that is attributable to the other venturers. The Group does not recognise its share of profits or losses from the joint venture that result from the purchase of assets by the Group from the joint venture until it resells the assets to an independent party. However, if a loss on the transaction provides evidence of a reduction in the net realizable value of current assets or an impairment loss, the loss is recognised immediately.
Accounting policies of joint ventures have been changed where necessary to ensure consistency with the policies adopted by the Group.
The Company accounts for investments in joint ventures in its stand alone financial statements at cost less impairment.
Associates are entities over which the Group generally has between 20% and 50% of the voting rights, or over which the Group has significant influence, but which it does not control. 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 reserves is recognised in reserves. The cumulative post-acquisition 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 also eliminated unless the transaction provides evidence of an impairment of the asset transferred. The Group's investment in associates includes goodwill (net of accumulated amortisation) on acquisition. 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.
Accounting policies of associates have been changed where necessary to ensure consistency with the policies adopted by the Group.
The Company accounts for investments in associates in its stand alone financial statements at cost less impairment.
A business segment is a group of assets and operations engaged in providing products or services that are subject to risks and returns that are different from those of other business segments. A geographical segment is
(All amounts in €'000)
engaged in providing products or services within a particular economic environment that are subject to risks and returns that are different from those of segments operating in other economic environments.
The Group prepares primary segmental reporting on a business basis and secondary segmental reporting on a geographical basis.
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. Translation differences on non-monetary items, such as equities classified as available-for-sale financial assets, are included in the fair value reserve in equity.
The results and financial position of all the 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:
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 shareholders' equity. 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.
(All amounts in €'000)
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 the investment property exceed their recoverable amounts, the difference (impairment) is charged directly in the income statement.
The Company classifies all land and buildings rented to subsidiaries as investment property in its stand alone financial statements.
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 higher than the initially expected according to the initial return of the financial asset and under the assumption that the cost of the item can be measured reliably. All other repairs and maintenance are charged to the income statement 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, in order to write down the cost in its residual value. The expected useful life of property, plant and equipment is as follows:
| - Buildings | 33 - 34 | Years |
|---|---|---|
| - Machinery, installations and equipment |
10 | Years |
| - Motor vehicles | 5 - 7 | Years |
| - Telecommunications equipment | 5 - 10 | 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 recognized immediately as an expense in the income statement.
In case of sale of property, plant and equipment, the difference between the sale proceeds and the carrying amount is recognized as profit or loss in the income statement.
Finance costs are recognised in the income statement in the period in which they arise.
Financial Statements in accordance with IFRS 31 December 2007
(All amounts in €'000)
Leases of property, plant and equipment where 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. If there is no reasonable certainty that the Group will obtain ownership by the end of the lease term, the property, plant and equipment acquired under finance leases is depreciated over the shorter of the useful life of the asset or the lease term.
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. 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.
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.
Goodwill on business combinations has been allocated and is monitored by the Group on the basis of the cashgenerating units which have been identified according to the provisions of IAS 36 "Impairment of Assets". The Group has performed impairment tests, at a Group level, on cash-generating units to which goodwill has been allocated, and no impairment loss has resulted.
The caption 'intangible assets' includes:
a) Computer software: Purchased computer software are 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 programmes 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 live, not exceeding a period of 5-10 years.
(All amounts in €'000)
b) One-off connection fees: they relate to one-off connection fees for new customers of the subsidiary company Hellas on Line and are amortised over 12 months, which is the contract period with the client.
c) Customer relationships: they relate to amounts recognised on the acquisition of the subsidiary companies Hellas on Line SA and Attica Telecommunications SA and they are amortised over a period of 9 and 10 years respectively.
d) Trade name: it relates to asset recognised on the acquisition of the subsidiary company Hellas on Line SA. The trade name has an indefinite useful life.
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 an 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 amount obtainable from the sale of an asset in an arms' length transaction between knowledgeable, willing parties, 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 (cashgenerating units).
The Group assesses at each balance sheet date whether there is objective evidence that a financial asset or a 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 nonfinancial 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 asset-specific rate or a rate of a similar financial asset. Any resulting impairment losses are recognised in the income statement.
The Group classifies its investments in the following categories. The classification depends on the purpose for which the investments were acquired. Management determines the classification of its investments at initial recognition and re-evaluates this designation at every reporting date.
(All amounts in €'000)
This category refers to financial assets acquired principally for the purpose of selling in the short term 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 method.
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 method.
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. 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 equity. 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.
Realised and unrealised gains and losses arising from changes in the fair value of the 'financial assets at fair value through profit or loss' category are included in the income statement 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.
(All amounts in €'000)
Derivative financial instruments include forward exchange contracts, currency and interest-rate swaps.
Derivatives are initially recognised on balance sheet at cost (including transaction costs) and are subsequently remeasured at their fair value. Fair values are obtained from quoted market prices and discounted cash flow models.
All derivatives are carried as assets when fair value is positive and as liabilities when fair value is negative.
The gains and losses on derivative financial instruments held for trading are included in the income statement.
The Group uses derivatives to hedge foreign currency and interest rate risks. The Group designates derivatives as either fair value hedges or cash flow hedges when the required criteria are met. For derivatives that do not meet the conditions for hedge accounting, gains or losses from changes in the fair value are included in the income statement.
The Group designates derivatives, for the purposes of hedge accounting, as:
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recorded in the income statement, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges are recognised in equity. The gain or loss relating to the ineffective portion is recognised immediately in the income statement.
Amounts accumulated in equity in relation to cash flow hedges are recycled in the income statement in the periods when the hedged item will affect profit or loss.
When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in equity at that time remains in equity and is recognised when the forecast transaction is ultimately recognised in the income statement. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in equity is immediately transferred to the income statement.
Certain derivatives, while used by the Group as effective hedges, do not satisfy the criteria for hedge accounting of IAS39 and as a result the relevant gains or losses are recognized in the 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.
(All amounts in €'000)
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 the provision is recognised in the income statement.
Trade and other receivables are reduced by the amounts that have been received in advance under factoring agreements without recourse.
Cash and cash equivalents includes cash in hand, deposits held at call with banks and other short-term 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:
(All amounts in €'000)
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 the income statement. Any subsequent increase in fair value will be recognised in the income statement, 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.
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares are shown after the reduction of the relative income tax in reduction to the product of issue. Incremental costs directly attributable to the issue of new shares for the acquisition of other entities are included in the cost of acquisition of the new company.
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 the income statement over the period of the borrowings using the effective interest method.
All borrowing costs are recognized in the income statement as incurred.
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.
Trade payables are recognized initially at fair value and subsequently measured at amortised cost using the effective interest method.
(All amounts in €'000)
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 is provided on temporary differences arising on investments in subsidiaries, joint ventures and associates, except 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 is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date.
The Group contributes to both defined benefit and defined contribution plans.
The regular contributions for defined contribution plans constitute net periodic costs for the year in which they are due and as such are included in staff costs.
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 minus the fair value of plan assets (where funded) together with adjustments for actuarial gains/ losses and past service cost. Independent actuaries using the projected unit credit method calculate the defined benefit obligation annually.
Cumulative actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions in excess of the greater of 10% of the value of plan assets or 10% of the defined benefit obligation are spread to income over the employees' expected average remaining working lives. Past-service costs are recognised immediately in income, unless the changes to the pension plan are conditional on the employees remaining in service for a specified period of time (the vesting period). In this case, the past-service costs are amortised on a straight-line basis over the vesting period.
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.
(All amounts in €'000)
The Group operates an equity-settled, share-based compensation plan. 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 the income statement, 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.
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 the income statement 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 the income statement on a straight-line basis over the expected lives of the related assets
Provisions are recognized when:
The amount can be reliably estimated.
The Group recognizes 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 recognizes a provision with an immediate charge to the income statement 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.
(All amounts in €'000)
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 recognized 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 recognized 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 costs of the total estimated services to be provided under each contract. Costs of services are recognized in the period incurred. When the services to be provided under a contract cannot be reliably estimated, revenue is recognized only to the extent of costs incurred that are possibly recoverable.
Revenue from fixed price contracts are recognized, 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 recognized 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 recognized 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 recognized on the impaired value.
Dividends are recognized 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.
(All amounts in €'000)
Diluted earnings per share is calculated by dividing the 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).
On 4 December 2006 the Company agreed to the sale of 51% of HoL (100% subsidiary), while on 6 July 2007 the Company announced the termination of this sale agreement.
For the period following the signing of the sales agreement and up to its termination, HoL was classified in the consolidated financial statements as held for sale. As a consequence, the results of HoL group in the annual financial statements of 2006 were shown under discontinued operations. In the current year, as well as in the comparative year of 2006, the results from the operations of the subsidiary are shown under continuing operations. As a result, the notes concerning the income statement for 2006 differ from those included in the published annual financial statements of 2006, as the amounts have been reclassified according to the requirements of IFRS 5 'Non-current assets held for sale and discontinued operations'.
Additionally, certain balance sheet and income statement amounts for 2006 have been reclassified compared to the published annual financial statements of 2006 to conform to the current year's presentation.
Differences between amounts presented in the financial statements and corresponding amounts in the notes result from rounding differences.
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, interest rates and market prices), credit risk, liquidity risk and cash flow and fair value interest rate 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 (apart from trade payables) include short-term bank 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 and long-term investments with guaranteed capital arising from operating activities.
At the end of the current period there are no open positions in derivatives. In any case, such 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 from the above are market risk, credit risk, liquidity risk and interest rate risk which are analyzed below.
(All amounts in €'000)
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 short-term liabilities in that currency.
The following table presents the sensitivity of the Group's net profit in possible fluctuations of the foreign exchange rates for the years 2006 and 2007. 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 31st December 2007 and 2006 respectively.
| Increase in EUR/USD rate by |
Effect on net profit 31/12/2007 |
Effect on net profit 31/12/2006 |
|---|---|---|
| 3% | (14) | (116) |
| 6% | (27) | (232) |
| 9% | (41) | (348) |
| 12% | (54) | (463) |
The following table presents the sensitivity of the Company's net profit in possible fluctuations of the foreign exchange rates for the years 2006 and 2007. This analysis takes into consideration borrowings and cash and cash equivalents of the Company as at 31st December 2007 and 2006 respectively.
| Increase in EUR/USD rate by |
Effect on net profit 31/12/2007 |
Effect on net profit 31/12/2006 |
|---|---|---|
| 3% | (78) | (109) |
| 6% | (156) | (218) |
| 9% | (234) | (326) |
| 12% | (312) | (435) |
The Group has limited exposure to changes in the prices of the shares held either for trading or as available for sale financial assets.
(All amounts in €'000)
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 cases that vendor financing to an overseas customer is required, the Group insures its credit risk via the Export Credit Insurance Organisation (ECIO). 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, while at the same time no financial institution has more than 15% of the managed assets.
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.
On 31 December 2007 current and non-current borrowings of the Group amounted to 74% and 26% of total borrowings respectively. The objective for the first 6 months of 2008 is that the above ratio becomes 40% current and 60% non-current borrowings, through the replacement of existing borrowings with medium-term bond loans.
The interest-rate risk arises mainly from the fact that almost all of the Group's borrowings carry floating interest rates. The Group assesses that during the current period, interest rate risk is limited since it is expected that interest rates will either remain stable or drop in the medium-term.
The following tables present the sensitivity of the Group's net profit in possible fluctuations of the interest rates for the years 2006 and 2007. The analysis takes into consideration borrowings and cash and cash equivalents of the Group as at 31st December 2007 and 2006 respectively.
| Increase in interest rates (Base units) |
Effect on net profit 31/12/2007 |
Effect on net profit 31/12/2006 |
|---|---|---|
| 25 | (440) | (5) |
| 50 | (881) | (11) |
| 75 | (1.321) | (16) |
| 100 | (1.762) | (21) |
(All amounts in €'000)
| Increase in interest rates (Base units) |
Effect on net profit 31/12/2007 |
Effect on net profit 31/12/2006 |
|---|---|---|
| 25 | 14 | 11 |
| 50 | 28 | 22 |
| 75 | 43 | 33 |
| 100 | 57 | 45 |
The following tables present the sensitivity of the Company's net profit in possible fluctuations of the interest rates for the years 2006 and 2007. The analysis takes into consideration borrowings and cash and cash equivalents of the Company as at 31st December 2007 and 2006 respectively.
| Increase in interest rates (Base units) |
Effect on net profit 31/12/2007 |
Effect on net profit 31/12/2006 |
|
|---|---|---|---|
| 25 | 41 | 162 | |
| 50 | 83 | 325 | |
| 75 | 124 | 487 | |
| 100 | 165 | 649 |
| Increase in interest rates (Base units) |
Effect on net profit 31/12/2007 |
Effect on net profit 31/12/2006 |
|---|---|---|
| 25 | 7 | 9 |
| 50 | 14 | 18 |
| 75 | 21 | 28 |
| 100 | 28 | 37 |
(All amounts in €'000)
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 the Company's equity holders' as shown in the consolidated balance sheet plus net debt.
| Group | Company | ||||
|---|---|---|---|---|---|
| 1/1 - 31/12/2007 | 1/1 - 31/12/2006 | 1/1 - 31/12/2007 | 1/1 - 31/12/2006 | ||
| Total borrowings (Note 22) | 244.533 | 117.409 | 12.777 | 4.340 | |
| Less: Cash and cash equivalents (Note 19) | (76.573) | (115.477) | (32.935) | (72.531) | |
| Net borrowings | 167.960 | 1.932 | (20.158) | (68.191) | |
| Equity | 539.993 | 583.549 | 511.480 | 536.864 | |
| Total capital employed | 707.953 | 585.481 | 491.322 | 468.672 | |
| Gearing ratio | 23,72% | 0,33% | -4,10% | -14,55% |
The increase in the gearing ratio during 2007 is mainly due to acquisitions and increases of share capital of subsidiaries and associates.
The fair value of financial instruments traded in active markets (stock exchange) (i.e. derivatives, stocks, bonds) is based on quoted market rates at the balance sheet date. The quoted market price used for financial assets held by the Group is the current bid price; the appropriate quoted market price for financial liabilities is the current ask price.
In assessing the fair value of non-traded financial instruments, the Group uses a variety of valuation methods and makes assumptions that are based on market conditions existing at each balance sheet date.
The nominal values less any estimated credit adjustments of financial assets are assumed to approximate their fair values. The fair value of financial liabilities is estimated by discounting the future contractual cash flows at the current market interest rate available to the Group for similar financial instruments.
(All amounts in €'000)
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the 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:
At 31 December 2007, the Group is organised into five business segments:
(All amounts in €'000)
| Telecommunications systems |
Technology solutions for government and banking sector |
Defence systems | Construction | Telecom operations | Unallocated | Total | |
|---|---|---|---|---|---|---|---|
| Sales | 35.641 | 129.202 | 79.285 | 129.303 | 47.965 | 1.604 | 423.000 |
| Operating profit/(loss) Finance costs - net |
(1.730) | 2.901 | 4.291 | 5.792 | (28.256) | 7.292 | (9.710) (10.185) |
| Share of profit/ (loss) of associates Loss before income tax |
(576) | - | - | 244 | (234) | 11 | (554) |
| from continuing operations |
(20.450) |
The segment results from continuing operations for the year ended 31 December 2007 were as follows:
Other segment items included in the income statement are as follows:
| Telecommunications systems |
Technology solutions for government and banking sector |
Defence systems | Construction | Telecom operations | Unallocated | Total | |
|---|---|---|---|---|---|---|---|
| Depreciation of PPE (note | |||||||
| 28) | 446 | 1.340 | 2.017 | 2.954 | 7.294 | 1.702 | 15.752 |
| Amortisation of intangible assets (note 28) |
961 | 1.362 | 1.106 | 508 | 4.477 | 1.600 | 10.013 |
| Depreciation of investment property (note 28) |
- | - | 88 | - | - | 419 | 507 |
| Impairment of receivables (note 28) |
- | 1.141 | - | 1.803 | 1.435 | - | 4.380 |
The segment assets and liabilities at 31 December 2007 and the capital expenditure for the year are as follows:
| Telecommunications systems |
Technology solutions for government and banking sector |
Defence systems | Construction | Telecom operations | Unallocated | Total | |
|---|---|---|---|---|---|---|---|
| Assets | 13.235 | 157.649 | 129.778 | 185.726 | 248.998 | 208.735 | 944.120 |
| Associates (note 11) | - | - | - | 327 | - | 117.148 | 117.475 |
| Total assets | 13.235 | 157.649 | 129.778 | 186.053 | 248.998 | 325.883 | 1.061.596 |
| Total liabilities | 9.647 | 110.647 | 40.518 | 124.853 | 200.784 | 35.155 | 521.603 |
| Capital expenditure (notes 6,8 and 9) |
731 | 2.286 | 825 | 6.574 | 89.441 | 3.610 | 103.466 |
The column unallocated includes the assets and liabilities of the parent company.
(All amounts in €'000)
| Telecommunications systems |
Technology solutions for government and banking sector |
Defence systems | Construction | Telecom operations | Unallocated | Total | |
|---|---|---|---|---|---|---|---|
| Sales | 43.066 | 98.960 | 77.317 | 96.954 | 31.166 | 5.017 | 352.480 |
| Operating profit/(loss) | 884 | -13.733 | 6.715 | (3.101) | (18.951) | 9.434 | (18.752) |
| Finance costs - net Share of profit/ (loss) of |
(8.549) | ||||||
| associates Loss before income tax from continuing |
(17.064) | 205 | - | 1.193 | (23) | (15.689) | |
| operations | (42.991) |
The segment results from continuing operations for the year ended 31 December 2006 were as follows:
Other segment items included in the income statement are as follows:
| Telecommunications systems |
Technology solutions for government and banking sector |
Defence systems | Construction | Telecom operations | Unallocated | Total | |
|---|---|---|---|---|---|---|---|
| Depreciation of PPE (note 28) |
169 | 1.403 | 2.354 | 2.567 | 3.780 | 1.637 | 11.910 |
| Amortisation of intangible assets (note 28) |
368 | 1.693 | 1.080 | 550 | 788 | 1.644 | 6.124 |
| Depreciation of investment property (note 28) |
- | - | 110 | - | - | 458 | 568 |
| Impairment of receivables (note 28) |
- | 618 | 844 | 837 | 932 | 220 | 3.450 |
The segment assets and liabilities at 31 December 2006 and the capital expenditure for the year are as follows:
| Telecommunications systems |
Technology solutions for government and banking sector |
Defence systems | Construction | Telecom operations | Unallocated | Total | |
|---|---|---|---|---|---|---|---|
| Assets | 13.748 | 126.529 | 150.051 | 160.023 | 80.940 | 265.354 | 796.646 |
| Associates (note 11) | 117.686 | 2.266 | - | 638 | - | - | 120.590 |
| Total assets | 131.434 | 128.795 | 150.051 | 160.661 | 80.940 | 265.354 | 917.236 |
| Total liabilities | 8.999 | 87.018 | 63.346 | 97.141 | 48.692 | 28.491 | 333.687 |
| Capital expenditure (notes 6,8 and 9) |
8.247 | 1.734 | 2.873 | 5.357 | - | 3.305 | 21.517 |
Inter-segment transfers or transactions are entered into under the normal commercial terms and conditions that would also be available to unrelated third parties.
(All amounts in €'000)
The main business segments of the Group operate in four geographical areas. The home-country of the Company – which is also the main operating country – is Greece.
| Sales | 1/1 - 31/12/2007 | 1/1 - 31/12/2006 |
|---|---|---|
| Greece | 242.248 | 180.552 |
| European Community | 157.306 | 117.592 |
| Other European countries | 7.275 | 33.442 |
| Other countries | 16.171 | 20.894 |
| Total | 423.000 | 352.480 |
| Total assets | 31/12/2007 | 31/12/2006 |
| Greece | 834.588 | 737.240 |
| European Community | 102.107 | 47.821 |
| Other European countries | 665 | 5.217 |
| Other countries | 6.760 | 6.367 |
| 944.120 | 796.646 | |
| Associates (note 11) | 117.475 | 120.590 |
| Total | 1.061.596 | 917.236 |
| Capital expenditure | 1/1 - 31/12/2007 | 1/1 - 31/12/2006 |
| Greece | 101.230 | 19.015 |
| European Community | 2.011 | 2.016 |
| Other European countries | 56 | 477 |
| Other countries | 169 | 9 |
| Total | 103.466 | 21.517 |
Sales are allocated based on the country in which the customer is located. Property, plant and equipment is allocated based on their geographical location. Capital expenditure is allocated based on where the assets are located.
| 1/1 - 31/12/2007 | 1/1 - 31/12/2006 |
|---|---|
| 26.293 | 67.954 |
| 93.557 | 29.037 |
| 206.326 | 173.728 |
| 96.824 | 81.761 |
| 423.000 | 352.480 |
(All amounts in €'000)
| Telecommunications Furniture & assets under Land - buildings Machinery Vehicles Equipment other equipment construction Total Cost Balance at 1 January 2006 265.052 73.477 5.713 55.799 1.422 401.463 Exchange differences 447 105 114 - 54 4 723 Additions 2.461 5.670 1.067 - 3.521 2.012 14.732 Disposals (1.863) (2.990) (1.013) - (2.534) (60) (8.460) Transfer to investment property (Note 9) (26.733) - - - - - (26.733) Reclassifications 772 (267) - - 267 (772) - Disposal of subsidiaries (111.170) (42.541) (2.672) - (27.789) (297) (184.469) Balance at 31 December 2006 128.966 33.454 3.210 - 29.318 2.309 197.257 Balance at 1 January 2007 128.966 33.454 3.210 - 29.318 2.309 197.257 Exchange differences (139) (85) (49) - (44) (10) (327) Additions 221 4.199 740 18.270 2.128 71.703 97.261 Acquisition of subsidiaries - 13 15 31.579 893 1.750 34.250 Disposals (8.324) (648) (398) (2.148) (1.147) (23) (12.689) Transfer from investment property (Note 9) 12.494 - - - - - 12.494 Reclassifications 6.015 548 - 34.120 371 (41.054) - Transfer from assets held for sale 1.156 (0) 9 28.076 549 3.457 33.246 Disposal of subsidiaries - - - - - (6) (6) Balance at 31 December 2007 140.389 37.481 3.526 109.897 32.069 38.126 361.487 Accumulated depreciation Balance at 1 January 2006 29.157 42.589 3.127 - 42.565 - 117.439 Exchange differences 30 (6) 78 - 47 - 149 Depreciation charge 2.801 4.966 557 - 3.149 - 11.472 Disposals (277) (2.455) (744) - (1.807) - (5.282) Reclassifications - (106) - - 106 - - Transfer to investment property (Note 9) (1.426) - - - - - (1.426) Disposal of subsidiaries (15.014) (29.177) (1.792) - (23.208) - (69.192) Balance at 31 December 2006 15.270 15.811 1.226 - 20.853 - 53.161 Balance at 1 January 2007 15.270 15.811 1.226 - 20.853 - 53.161 Exchange differences (5) (58) (30) - (43) - (136) Depreciation charge 2.557 3.451 455 6.773 2.516 - 15.752 Acquisition of subsidiaries - 3 9 - 748 - 759 Disposals (354) (357) (169) (836) (1.092) - (2.808) Reclassifications - - - - - - - Transfer from investment property (Note 9) 1.405 - - - - - 1.405 Transfer from assets held for sale 726 - 5 14.951 397 - 16.078 Disposal of subsidiaries - - - - - - - Balance at 31 December 2007 19.599 18.851 1.496 20.888 23.378 - 84.212 Net book amount at 31 December 2006 113.696 17.643 1.983 8.465 2.309 144.097 - Net book amount at 31 December 2007 120.790 18.630 2.029 89.010 8.690 38.126 277.275 |
Prepayments and | ||||
|---|---|---|---|---|---|
Depreciation charge of €3.342 relates to discontinued operations for the year 2006 from Intracom Telecom. Depreciation charge of €3.781 relates to operations for the year 2006 from Hellas On Line.
(All amounts in €'000)
The above table includes assets held under finance lease as follows:
| Telecommunications | Furniture & other | |||||
|---|---|---|---|---|---|---|
| Equipment | Machinery | Vehicles | equipment | Total | ||
| 31/12/2006 | ||||||
| Cost | - | 3.467 | 740 | 4 | 4.211 | |
| Accumulated depreciation | - | (2.488) | (116) | (1) | (2.605) | |
| Net book amount | - | 979 | 624 | 3 | 1.606 | |
| 31/12/2007 | ||||||
| Cost | 6.713 | 6.021 | 835 | 4 | 13.574 | |
| Accumulated depreciation | (741) | (3.476) | (142) | (2) | (4.361) | |
| Net book amount | 5.972 | 2.545 | 693 | 2 | 9.213 |
| Prepayments and | ||||||
|---|---|---|---|---|---|---|
| Land - buildings | Machinery | Vehicles | Furniture & other equipment |
assets under construction |
Total | |
| Cost | ||||||
| Balance at 1 January 2006 | 84.731 | 868 | 315 | 7.855 | - | 93.769 |
| Additions | 3.588 | 24 | 3 | 1.018 | 757 | 5.391 |
| Disposals | (1.216) | (0) | (103) | (221) | - | (1.541) |
| Transfer to investment property (Note 9) | (30.997) | - | - | - | - | (30.997) |
| Reclassifications | 672 | - | - | - | (672) | - |
| Balance at 31 December 2006 | 56.778 | 892 | 215 | 8.652 | 85 | 66.623 |
| Balance at 1 January 2007 | 56.778 | 892 | 215 | 8.652 | 85 | 66.623 |
| Additions | 12 | 30 | 3 | 34 | 3.532 | 3.610 |
| Disposals | (7.984) | (22) | (83) | (70) | - | (8.160) |
| Transfer to investment property (Note 9) | (11.533) | - | - | - | - | (11.533) |
| Reclassifications | 3.617 | - | - | - | (3.617) | - |
| Balance at 31 December 2007 | 40.890 | 899 | 135 | 8.616 | - | 50.539 |
| Accumulated depreciation | ||||||
| Balance at 1 January 2006 | 8.711 | 595 | 235 | 3.763 | - | 13.305 |
| Depreciation charge | 707 | 75 | 18 | 715 | - | 1.514 |
| Disposals | (166) | (0) | (97) | (103) | - | (367) |
| Transfer to investment property (Note 9) | (3.102) | - | - | - | - | (3.102) |
| Balance at 31 December 2006 | 6.150 | 670 | 155 | 4.375 | - | 11.350 |
| Balance at 1 January 2007 | 6.150 | 670 | 155 | 4.375 | - | 11.350 |
| Depreciation charge | 501 | 69 | 16 | 719 | - | 1.305 |
| Disposals | (354) | (4) | (82) | (68) | - | (508) |
| Transfer to investment property (Note 9) | (873) | - | - | - | - | (873) |
| Balance at 31 December 2007 | 5.425 | 735 | 89 | 5.026 | - | 11.274 |
| Net book amount at 31 December 2006 | 50.628 | 222 | 60 | 4.277 | 85 | 55.272 |
| Net book amount at 31 December 2007 | 35.465 | 165 | 45 | 3.590 | - | 39.265 |
Leased machinery with net book value at 31 December 2007 of €3 (cost €22 and accumulated depreciation €19) (31 December 2006: net book value €14) is included in the above under finance lease.
(All amounts in €'000)
| Group | |
|---|---|
| Balance at 1 January 2006 | 11.361 |
| Balance at 31 December 2006 | 11.361 |
| Balance at 1 January 2007 | 11.361 |
| Transfer from assets held for sale (Note 38) | 21.120 |
| Other movements (Note 10) | 1.896 |
| Acquisition of subsidiaries / businesses (Note 38) | 25.669 |
| Balance at 31 December 2007 | 60.047 |
Goodwill as at 31 December 2007 resulted from the acquisition of the companies listed below and is allocated to cash generating units as follows:
| Intrasoft International SA | 11.361 |
|---|---|
| Hellas on Line SA | 23.016 |
| Attica Telecommunications SA | 21.069 |
| IT Services Denmark A/S | 4.600 |
| 60.047 |
The transfer from assets held for sale relates to the goodwill that arose from the acquisition of Hellas on Line during the year 2006.
For the acquisitions of the year 2007 (Attica Telecommunications SA and IT Denmark A/S), the Group has not yet completed the allocation of the cost to the assets and liabilities of the acquired subsidiaries / businesses (see note 38). This process will be completed within the 12 month period as set out by IFRS 3, at which time the final amount of goodwill will be determined.
As at 31 December 2006 and 2007, the Group performed impairment tests on the final amounts of goodwill. The recoverable amount of goodwill for each cash generating unit was determined based on the calculation of the fair value less costs to sell.
The recoverable amount of goodwill from Intrasoft International SA was determined using comparable company indicators. This approach takes into consideration among others, the risk profile and the growth prospects of a selected sample of comparable listed companies.
The recoverable amount of goodwill from Hellas on Line SA was determined by calculating the fair value less costs to sell using the methods of discounted free cash flows, comparable transactions indicators and comparable companies indicators. For the discounting of future cash flows, the weighted average cost of capital 8,8% and growth rate in perpetuity of 3% were used. For the ratios of comparable companies, the earnings per share and the revenue per share ratios were used.
(All amounts in €'000)
| Internally generated |
Connection | Customers | |||||
|---|---|---|---|---|---|---|---|
| Software | software | fees | Trade name | Relationships | Other | Total | |
| Cost | |||||||
| Balance at 1 January 2006 | 85.284 | 42.012 | - | - | - | 9.394 | 136.690 |
| Exchange differences | (28) | 7 | - | - | - | (335) | (356) |
| Additions | 1.672 | 2.019 | - | - | - | 452 | 4.144 |
| Disposals | (76) | - | - | - | - | (517) | (593) |
| Disposal of subsidiaries | (64.545) | (22.964) | - | - | - | (6.672) | (94.181) |
| Balance at 31 December 2006 | 22.308 | 21.074 | - | - | - | 2.322 | 45.704 |
| Balance at 1 January 2007 | 22.308 | 21.074 | - | - | - | 2.322 | 45.704 |
| Exchange differences | (16) | (12) | - | - | - | (18) | (46) |
| Additions | 3.765 | - | 2.390 | - | - | 42 | 6.197 |
| Disposals | (64) | - | - | - | - | (298) | (362) |
| Transfer from assets held fos sale | 5.343 | - | 2.028 | 2.353 | 7.058 | - | 16.781 |
| Acquisition of subsidiaries | 2.358 | - | - | - | 8.140 | - | 10.498 |
| Balance at 31 December 2007 | 33.695 | 21.062 | 4.417 | 2.353 | 15.198 | 2.047 | 78.772 |
| Accumulated depreciation | |||||||
| Balance at 1 January 2006 | 55.460 | 20.102 | - | - | - | 6.037 | 81.599 |
| Exchange differences | (28) | 21 | - | - | - | (283) | (290) |
| Amortisation charge | 8.148 | 2.336 | - | - | - | 1.327 | 11.810 |
| Disposals | (58) | - | - | - | - | (459) | (517) |
| Disposal of subsidiaries | (49.194) | (5.405) | - | - | - | (5.564) | (60.163) |
| Balance at 31 December 2006 | 14.328 | 17.054 | - | - | - | 1.058 | 32.440 |
| Balance at 1 January 2007 | 14.328 | 17.054 | - | - | - | 1.058 | 32.440 |
| Exchange differences | (24) | (9) | - | - | - | (14) | (47) |
| Amortisation charge | 4.676 | 742 | 2.748 | - | 832 | 1.016 | 10.013 |
| Disposals | (63) | - | - | - | - | (266) | (329) |
| Transfer from assets held fos sale | 3.390 | - | - | - | 222 | - | 3.612 |
| Acquisition of subsidiaries | 998 | - | - | - | - | - | 998 |
| Balance at 31 December 2007 | 23.306 | 17.787 | 2.748 | - | 1.054 | 1.794 | 46.687 |
| Net book amount at 31 December 2006 | 7.980 | 4.020 | - | - | - | 1.264 | 13.264 |
| Net book amount at 31 December 2007 | 10.390 | 3.276 | 1.670 | 2.353 | 14.144 | 253 | 32.084 |
Amortisation charge of €6.474 relates to discontinued operations for the year 2006 from Intracom Telecom. Amortisation charge of €787 relates to operations for the year 2006 from Hellas On Line.
(All amounts in €'000)
| Software | Internally generated software |
Total | |
|---|---|---|---|
| Cost | |||
| Balance at 1 January 2006 | 8.055 | 4.065 | 12.120 |
| Balance at 31 December 2006 | 8.055 | 4.065 | 12.120 |
| Balance at 1 January 2007 | 8.055 | 4.065 | 12.120 |
| Balance at 31 December 2007 | 8.055 | 4.065 | 12.120 |
| Accumulated depreciation | |||
| Balance at 1 January 2006 | 4.057 | 1.166 | 5.223 |
| Amortisation charge | 1.032 | 612 | 1.644 |
| Balance at 31 December 2006 | 5.089 | 1.778 | 6.867 |
| Balance at 1 January 2007 | 5.089 | 1.778 | 6.867 |
| Amortisation charge | 988 | 612 | 1.600 |
| Balance at 31 December 2007 | 6.077 | 2.390 | 8.466 |
| Net book amount at 31 December 2006 | 2.966 | 2.287 | 5.253 |
| Net book amount at 31 December 2007 | 1.979 | 1.675 | 3.654 |
(All amounts in €'000)
| Group | Company | |
|---|---|---|
| Cost | ||
| Balance at 1 January 2006 | 42.044 | 21.975 |
| Exchange differences | (339) | - |
| Additions | 2.641 | - |
| Transfer from property, plant and equipment (Note 6) | 26.733 | 30.997 |
| Disposal of subsidiaries | (2.641) | - |
| Balance at 31 December 2006 | 68.438 | 52.972 |
| Balance at 1 January 2007 | 68.438 | 52.972 |
| Exchange differences | (307) | - |
| Additions | 8 | - |
| Disposals | (1.407) | (1.407) |
| Transfer from/ (to) property, plant and equipment (Note 6) | (12.494) | 11.533 |
| Balance at 31 December 2007 | 54.239 | 63.098 |
| Accumulated depreciation | ||
| Balance at 1 January 2006 | 3.380 | 2.740 |
| Exchange differences | (23) | - |
| Transfer from property, plant and equipment (Note 6) | 1.426 | 3.102 |
| Depreciation charge | 628 | 526 |
| Disposal of subsidiaries | (142) | - |
| Balance at 31 December 2006 | 5.268 | 6.368 |
| Balance at 1 January 2007 | 5.268 | 6.368 |
| Exchange differences | (26) | - |
| Transfer from/ (to) property, plant and equipment (Note 6) | (1.405) | 873 |
| Depreciation charge | 507 | 766 |
| Disposals | (154) | (154) |
| Balance at 31 December 2007 | 4.190 | 7.854 |
| Net book amount at 31 December 2006 | 63.170 | 46.603 |
| Net book amount at 31 December 2007 | 50.049 | 55.244 |
The amount shown as transfer from property, plant and equipment for the year 2007 for the Company includes additions for the year of approximately €3,5 mil., transferred from assets under construction.
Depreciation charge of €60 for the year 2006 for the Group relates to discontinued operations from Intracom Telecom.
(All amounts in €'000)
Rental income from investment properties from continued operations for 2007 amounted to €2.429 and €2.163 for the Group and the Company respectively (2006: €2.374 and €1.362 for the Group and the Company respectively)
Investments in subsidiaries are analyzed as follows:
| Company | |||
|---|---|---|---|
| 31/12/2007 | 31/12/2006 | ||
| Balance at the beginning of the year | 177.682 | 376.308 | |
| Additions / Share capital increase | 46.300 | 73.090 | |
| Disposals/ Share capital decrease | - | (156.113) | |
| Transfer to associates (Notes 11, 34) | - | (115.900) | |
| Increase due to share options attributable to subsidiaries | - | 297 | |
| Balance at the end of the year | 223.982 | 177.682 |
The transfer to associates for the year 2006 relates to the sub-group Intracom Telecom (note 34)
On 18 July 2007 the Company transferred to its 100% subsidiary company Intracom Holdings International Limited, as contribution in kind, 5.500.000 shares of HoL (percentage 20%), as consideration for the subsidiary's share capital increase by €9.122.
Following this, in July, the subsidiary transferred its total shareholding in HoL to third parties for €15.000. The profit for the Group from this transaction amounted to €12.252 and is included in 'Other gains / (losses) – net' (note 31), while no profit arose from this transaction in the Company financial statements.
The amount of €15.000 will be received through annual interest-bearing instalments of €1.925 each (note 15).
On 27 July 2007, the Annual General Meeting of the shareholders of HoL decided the increase of share capital through capitalisation of reserves of €2.000 and cash of €46.300. The other shareholders did not participate in the share capital increase through cash and as a result, the shareholding of Intracom Holdings increased to 92%.
The above transactions resulted in an increase in the minority interest of €4.644 and recognition of goodwill of €1.896 (note 7).
(All amounts in €'000)
The interests held in subsidiaries and their carrying amounts at 31 December are as follows:
| 31/12/2007 | 31/12/2006 | ||||
|---|---|---|---|---|---|
| Name | Country of incorporation |
% interest held |
Carrying value | % interest held | Carrying value |
| Intracom SA Information Technology | Greece | 100% | 43.152 | 100% | 43.152 |
| Intracom SA Defence Electronic Systems | Greece | 100% | 70.860 | 100% | 70.860 |
| Intrakat SA | Greece | 74% | 9.923 | 74% | 9.923 |
| Intracom Holdings International Ltd | Cyprus | 100% | 17.259 | 100% | 8.139 |
| Hellas on Line SA | Greece | 92% | 82.786 | 100% | 45.608 |
| 223.980 | Total | 177.682 |
The above list contains direct investment in subsidiaries only. A list of all the direct and indirect interests in subsidiaries is presented in note 43.
| Group | Company | |||
|---|---|---|---|---|
| 31/12/2007 | 31/12/2006 | 31/12/2007 | 31/12/2006 | |
| Balance at the beginning of the year | 120.590 | 3.438 | 116.175 | 276 |
| Additions | 9.340 | - | 9.340 | - |
| Disposals | (443) | - | - | - |
| Transfer from / (to) subsidiaries (note 10) | (1.823) | 133.691 | - | 115.900 |
| Transfer from assets held for sale (Note 13) | (9.106) | - | (9.340) | - |
| Share of loss | (554) | (15.689) | - | - |
| Effect of tax, dividends and exchange differences | (528) | (849) | - | - |
| Balance at the end of the year | 117.475 | 120.590 | 116.175 | 116.175 |
On 23 July 2007 the Company announced the submission of a binding offer for the acquisition of 100% of the share capital of "Teledome Systems of Telecommunications - Software and Telematics Commercial and Industrial Societe Anonyme", which offer was initially accepted by the shareholders of Teledome. On 10 August 2007 the Company acquired 39% of the shares of Teledome for €9.340. On 28 November 2007 and following the completion of the financial and legal due diligence, the Company decided to maintain its current shareholding of 39% and not to proceed with the acquisition of the remaining shares.
In these financial statements, Teledome has been consolidated from the acquisition date to 30 September 2007 using the equity method. The resulting goodwill of €5.587 was included in investments in associates. For the period 1/7-30/9/2007, share of profit of associates includes losses of €234 from the consolidation of Teledome.
Subsequent to 30 September 2007 and following the decision not to proceed with the acquisition of any additional shareholding, the Group ceased to exercise significant influence over Teledome, since it has no representation in the Board of Directors of the company and no participation in the decisions relating to the financial and operating policy of the company. Due to the loss of significant influence, the Group has transferred the investment to available-for-sale financial assets and measures it in accordance with IFRS 39 (note 13).
(All amounts in €'000)
In July 2007, the Group disposed of its share in the associate Company Gantek, realising a gain of €303.
The transfer from associate to subsidiary relates to the sub-group Unibrain SA (see note 38).
Information regarding associates of the Group is given below:
| Name | Country of incorporation |
Assets | Liabilities | Revenue | Profit / (Loss) | Interest Held |
|---|---|---|---|---|---|---|
| INTRACOM SA TELECOMMUNICATIONS | GREECE | 509.492 | 264.645 | 314.559 | 543 | 49,00% |
| MOLDOVAN LOTTERY | MOLDOVA | 2.611 | 2.076 | 3.721 | 34 | 32,90% |
| 512.103 | 266.721 | 318.280 | 577 |
| Name | Country of incorporation |
Assets | Liabilities | Revenue | Profit / (Loss) | Interest Held |
|---|---|---|---|---|---|---|
| INTRACOM SA TELECOMMUNICATIONS | GREECE | 567.659 | 327.929 | 153.727 | (34.825) | 49,00% |
| GANTEK | TURKEY | 10.628 | 8.411 | 28.635 | 229 | 20,00% |
| UNIBRAIN (GROUP) | GREECE | 6.927 | 847 | 5.478 | 531 | 29,98% |
| MOLDOVAN LOTTERY | MOLDOVA | 2.470 | 1.912 | 3.653 | (69) | 32,85% |
| 587.684 | 339.099 | 191.493 | (34.135) |
The following amounts show the Group's share of assets and liabilities in joint ventures and companies that are accounted for by proportionate consolidation and are included in the balance sheet.
| 31/12/2007 | |
|---|---|
| Assets | |
| Non-current assets | 1.327 |
| Current assets | 10.557 |
| 11.883 | |
| Liabilities | |
| Non-current liabilities | 251 |
| Current liabilities | 12.875 |
| 13.126 | |
| Equity | (1.243) |
| Income | 19.871 |
| Expenses | (19.821) |
| Profit / (Loss) (after tax) | 50 |
(All amounts in €'000)
Information regarding joint ventures of the Group is given below:
| Name | Country of incorporation |
Interest held |
|---|---|---|
| J/V INTRAKAT - ELTER (N.SECTION MAINTENANCE) | GREECE | 50,00% |
| J/V ΙΝΤRΑΚΑΤ - ΑΤΤΙΚΑΤ (EGNATIA ODOS) | GREECE | 50,00% |
| J/V ΙΝΤRΑΚΑΤ - ELTER (PIPELINE ALEX/LIS) | GREECE | 50,00% |
| J/V ΙΝΤRΑΚΑΤ - ELTER (XIRIA) | GREECE | 50,00% |
| J/V ΙΝΤRΑΚΑΤ - ΕLΤΕR (ROAD DIVERSION ARTAS) | GREECE | 30,00% |
| J/V ΙΝΤRΑΚΑΤ - ΕLΤΕR (NATURAL GAS INSTALLATION PROJECT - SCHOOLS) | GREECE | 30,00% |
| J/V ΙΝΤRΑΚΑΤ - ΕLΤΕR (BROADBAND NETWORKS ΕΤVΑ V.Ι.P.Ε) | GREECE | 50,00% |
| J/V ΙΝΤRΑΚΑΤ - INTRACOM (TELECOMMUNICATION SYSTEMS DEPA) J/V ΕLΤΕR - ΙΝΤRΑΚΑΤ (NATURAL GAS INSTALLATION PROJECT ATTICA |
GREECE | 70,00% |
| NORTHEAST & SOUTH) | GREECE | 49,00% |
| J/V AKTOR- PANTEXNIKI SA - INTRAKAT (J/V MOREAS) J/V ΕLΤΕR - ΙΝΤRΑΚΑΤ (NATURAL GAS INSTALLATION PROJECT ATTICA |
GREECE | 13,33% |
| NORTHEAST & SOUTH) EPA 3 | GREECE | 50,00% |
| J/V ELTER ATE - INTRAKAT (XANTHI SERRES KOMOTINI) | GREECE | 50,00% |
| J/V ELTER ATE - INTRAKAT (NORTHEAST ATTICA) EPA 4 | GREECE | 50,00% |
| J/V ΙΝΤRΑΚΑΤ - ELTER (KATERINI HOSPITAL) | GREECE | 50,00% |
| J/V ΙΝΤRΑΚΑΤ - ELTER (CORFU HOSPITAL) | GREECE | 50,00% |
| J/V ELTER ATE- INTRAKAT (CENTRAL AREA) EPA 5 | GREECE | 50,00% |
| J/V ELTER ATE- INTRAKAT (SOUTH AREA) EPA 6 | GREECE | 50,00% |
| J/V ELTER ATE - INTRAKAT (NATURAL GAS SUPPL.NETWORK LAMIA-THIV | ||
| CHALKIDA) | GREECE | 50,00% |
| J/V ELTER ATE- INTRAKAT ( EPA 7 ) | GREECE | 49,00% |
| J/V ELTER - INTRAKAT (EPA GAS) | GREECE | 45,00% |
| J/V MOHLOS - INTRAKAT (SWIMMING) | GREECE | 50,00% |
| J/V OLYMP. - MOHLOS - CYBARCO - ATH. - Ι.Κ.(PANTHESSALIAN | ||
| STADIUM N. IONIAS VOLOY) | GREECE | 15,00% |
| J/V INTRAKAT - GANTZOULAS (DEPA) | GREECE | 50,00% |
| J/V MOHLOS - INTRAKAT (TENNIS) | GREECE | 50,00% |
| J/V ELTER - INTRAKAT - ENERGY | GREECE | 40,00% |
| J/V "ATH. TECHNIKI-PRISMA DOMI" - INTRAKAT | GREECE | 50,00% |
| J/V INTRAKAT - ERGAS - ALGAS | GREECE | 33,33% |
(All amounts in €'000)
| Name | Country of incorporation |
Interest held |
|---|---|---|
| J/V INTRAKAT - ELTER (N.SECTION MAINTENANCE) | GREECE | 50,00% |
| J/V ΙΝΤRΑΚΑΤ - ΑΤΤΙΚΑΤ (EGNATIA ODOS) | GREECE | 50,00% |
| J/V ΙΝΤRΑΚΑΤ - ELTER (PIPELINE ALEX/LIS) | GREECE | 50,00% |
| J/V ΙΝΤRΑΚΑΤ - ELTER (XIRIA) | GREECE | 50,00% |
| J/V ΙΝΤRΑΚΑΤ - ΕLΤΕR (ROAD DIVERSION ARTAS) | GREECE | 30,00% |
| J/V ΙΝΤRΑΚΑΤ - ΕLΤΕR (NATURAL GAS INSTALLATION PROJECT - SCHOOLS) | GREECE | 30,00% |
| J/V ΙΝΤRΑΚΑΤ - ΕLΤΕR (BROADBAND NETWORKS ΕΤVΑ V.Ι.P.Ε) | GREECE | 50,00% |
| J/V ΙΝΤRΑΚΑΤ - INTRACOM (TELECOMMUNICATION SYSTEMS DEPA) | GREECE | 70,00% |
| J/V ΕLΤΕR - ΙΝΤRΑΚΑΤ (NATURAL GAS INSTALLATION PROJECT ATTICA NORTHEAST & SOUTH) |
GREECE | 49,00% |
| J/V ELTER - INTRAKAT (EPA GAS) | GREECE | 45,00% |
| J/V MOHLOS - INTRAKAT (SWIMMING) | GREECE | 50,00% |
| Κ/Ξ ΜΟΧΛΟΣ-ΑΘΗΝΑΙΚΗ ΤΕΧΝ.- ΙΝΤΡΑΚΑΤ(ΣΤΑ∆ΙΟ Ν.ΙΩΝΙΑΣ | ||
| ΒΟΛΟΥ) | GREECE | 15,00% |
| J/V INTRAKAT - GANTZOULAS (DEPA) | GREECE | 50,00% |
| J/V MOHLOS - INTRAKAT (TENNIS) | GREECE | 50,00% |
| J/V ELTER - INTRAKAT - ENERGY | GREECE | 40,00% |
| J/V "ATH. TECHNIKI-PRISMA DOMI" - INTRAKAT | GREECE | 50,00% |
| J/V INTRAKAT - ERGAS - ALGAS | GREECE | 33,33% |
(All amounts in €'000)
| Group | Company | |||
|---|---|---|---|---|
| 31/12/2007 | 31/12/2006 | 31/12/2007 | 31/12/2006 | |
| Balance at the beginning of the year | 12.010 | 13.896 | 9.030 | 8.528 |
| Exchange differences | - | (30) | - | - |
| Additions | 1.639 | 1.731 | 1.600 | 1.708 |
| Purchase of subsidiary/ Change in consolidation | ||||
| method | 110 | - | - | - |
| Disposals | (15) | (1.990) | - | (100) |
| Fair value gains / (losses) | 1.782 | 55 | (3.093) | (63) |
| Impairment | (107) | (1.063) | (107) | (1.043) |
| Transfer from associates (Note 11) | 9.106 | - | 9.340 | - |
| Disposal of subsidiaries | - | (589) | - | - |
| Balance at the end of the year | 24.525 | 12.010 | 16.769 | 9.030 |
| Non-current assets | 24.525 | 11.502 | 16.769 | 9.030 |
| Current assets | - | 508 | - | - |
| 24.525 | 12.010 | 16.769 | 9.030 | |
| Group | Company | |||
| 31/12/2007 | 31/12/2006 | 31/12/2007 | 31/12/2006 | |
| Listed securities: | ||||
| - equity securities | 6.336 | 1.699 | 47 | 36 |
| Unlisted securities: | ||||
| - equity securities | 12.725 | 5.032 | 11.259 | 3.714 |
| - bonds | 5.464 | 5.280 | 5.464 | 5.280 |
| 24.525 | 12.010 | 16.769 | 9.030 |
Investments in unlisted shares are shown at cost less impairment. With relation to the investment in Teledome, the Group estimated fair value through the market comparable method and the market transaction method, using the price to earnings ratio. The fair value was determined after taking into consideration the findings of the financial and legal due diligence performed for the company (note 11).
The investments in listed companies relate to companies listed in the Athens Stock Exchange, which are measured at their stock prices at the balance sheet date. Bonds to banks are measured at their current value.
Borrowings of the Company amounting to €3.480, included in current borrowings, will be fully repaid using part of the amount to be received on the expiration of the bond of €5.464 included in the above table.
(All amounts in €'000)
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 | |||
|---|---|---|---|---|
| 31/12/2007 | 31/12/2006 | 31/12/2007 | 31/12/2006 | |
| Deferred tax assets | (1.616) | (5.020) | - | (3.938) |
| Deferred tax liabilities | 5.198 | 487 | 355 | - |
| 3.582 | (4.533) | 355 | (3.938) |
The gross amounts are as follows:
| Group | Company | |||
|---|---|---|---|---|
| 31/12/2007 | 31/12/2006 | 31/12/2007 | 31/12/2006 | |
| Deferred tax assets: | ||||
| To be recovered after more than 12 months | (3.960) | (7.145) | (632) | (4.782) |
| To be recovered within 12 months | (2.704) | (1.527) | (39) | (46) |
| (6.664) | (8.672) | (672) | (4.828) | |
| Deferred tax liabilities | ||||
| To be settled after more than 12 months | 8.605 | 2.701 | 967 | 365 |
| To be settled within 12 months | 1.641 | 1.438 | 59 | 526 |
| 10.246 | 4.139 | 1.027 | 890 | |
| 3.582 | (4.533) | 355 | (3.938) |
The gross movement on the deferred income tax account is as follows:
| Group | Company | |||
|---|---|---|---|---|
| 31/12/2007 | 31/12/2006 | 31/12/2007 | 31/12/2006 | |
| Balance at the beginning of the year | (4.533) | (9.434) | (3.938) | (6.035) |
| Exchange differences | 5 | (14) | - | - |
| Charged/ (credited) to the income statement (note 33) | 10.611 | 1.510 | 4.293 | 2.097 |
| Transfer from assets held for sale | (4.561) | - | - | - |
| Charge in equity | (166) | - | - | - |
| Acquisition of subsidiary (Note 38) | 2.226 | - | - | - |
| Disposals of susidiaries | - | 3.405 | - | - |
| Balance at the end of the year | 3.582 | (4.533) | 355 | (3.938) |
An amount of €322 charged to the consolidated income statement for the year 2006 relates to discontinued operations from Intracom Telecom. An amount of €4.939 credited to the consolidated income statement for the year 2006 relates to operations from Hellas On Line.
(All amounts in €'000)
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 / | ||||
|---|---|---|---|---|
| Impairment losses | Tax losses | Other | Total | |
| Balance at 1 January 2006 | (6.496) | (8.785) | (1.710) | (16.990) |
| Exchange differences | - | - | (10) | (10) |
| Charged / (credited) to the income statement | 2.252 | (1.380) | (129) | 744 |
| Disposal of subsidiaries | 3.211 | 4.253 | 120 | 7.584 |
| Balance at 31 December 2006 | (1.032) | (5.912) | (1.728) | (8.672) |
| Balance at 1 January 2007 | (1.032) | (5.912) | (1.728) | (8.672) |
| Exchange differences | 6 | (1) | 5 | |
| Charged / (credited) to the income statement | (821) | 10.167 | 988 | 10.335 |
| Charge in equity | - | - | (166) | (166) |
| Transfer from assets held for sale | (420) | (5.820) | (1.326) | (7.566) |
| Acquisition of subsidiary | (396) | - | (203) | (600) |
| Balance at 31 December 2007 | (2.669) | (1.559) | (2.437) | (6.664) |
| Trade name and | ||||
|---|---|---|---|---|
| customer | Accelerated tax | |||
| relationships | depreciation | Other | Total | |
| Balance at 1 January 2006 | - | 3.857 | 3.699 | 7.556 |
| Exchange differences | - | (5) | (5) | |
| Charged / (credited) to the income statement | - | 348 | 418 | 767 |
| Disposal of subsidiaries | - | (911) | (3.268) | (4.179) |
| Balance at 31 December 2006 | - | 3.289 | 850 | 4.139 |
| Balance at 1 January 2007 | - | 3.289 | 850 | 4.139 |
| Exchange differences | - | - | 1 | 1 |
| Charged / (credited) to the income statement | (208) | 1.553 | (1.070) | 275 |
| Transfer from assets held for sale | 2.297 | - | 709 | 3.006 |
| Acquisition of subsidiary | 2.035 | 776 | 14 | 2.825 |
| Balance at 31 December 2007 | 4.124 | 5.619 | 502 | 10.245 |
On December 2007 the Board of Directors of the subsidiary companies Unibrain SA and Hellas on Line SA decided their merger via the absorption of Hellas on Line by Unibrain (see note 42). According to the tax laws, the tax losses of HoL cannot be transferred to the new company and consequently deferred tax assets on tax losses amounting to €5.820 have been written off in the current year's income statement.
Additionally, deferred tax asset on tax losses of the parent Company amounting to €4.156 has been written off in the current year's income statement, following the tax audit of the years 2005 and 2006.
(All amounts in €'000)
Deferred tax assets:
| Accelerated tax depreciation |
Provisions | Tax losses | Other | Total | |
|---|---|---|---|---|---|
| Balance at 1 January 2006 | (621) | (368) | (5.610) | (4) | (6.603) |
| Charged / (credited) to the income statement | 621 | 242 | 954 | (41) | 1.775 |
| Balance at 31 December 2006 | - | (126) | (4.656) | (46) | (4.828) |
| Balance at 1 January 2007 | - | (126) | (4.656) | (46) | (4.828) |
| Charged / (credited) to the income statement | - | (23) | 4.156 | 23 | 4.156 |
| Balance at 31 December 2007 | - | (149) | (500) | (22) | (672) |
Deferred tax liabilities:
| Accelerated tax | |||
|---|---|---|---|
| depreciation | Other | Total | |
| Balance at 1 January 2006 | - | 568 | 568 |
| Charged / (credited) to the income statement | 354 | (32) | 322 |
| Balance at 31 December 2006 | 354 | 536 | 890 |
| Balance at 1 January 2007 | 354 | 536 | 890 |
| Charged / (credited) to the income statement | 613 | (476) | 136 |
| Balance at 31 December 2007 | 967 | 60 | 1.027 |
| Group | Company | |||
|---|---|---|---|---|
| 31/12/2007 | 31/12/2006 | 31/12/2007 | 31/12/2006 | |
| Trade receivables | 192.168 | 171.670 | 5.255 | 7.117 |
| Less: provision for impairment | (13.670) | (9.902) | - | - |
| Trade receivables - net | 178.498 | 161.768 | 5.255 | 7.117 |
| Prepayments | 11.363 | 11.320 | 315 | 331 |
| Receivables from related parties (note 41) | 41.897 | 39.811 | 33.089 | 25.776 |
| Loans to related parties (note 41) | - | - | 250 | - |
| Prepaid expenses | 5.546 | 5.393 | 639 | 552 |
| Accrued expenses | 19.353 | 9.919 | 50 | 33 |
| Other receivables | 80.440 | 47.672 | 16.322 | 43.247 |
| Total | 337.098 | 275.882 | 55.921 | 77.056 |
| Non-current assets | 31.027 | 21.075 | 12.238 | 12.767 |
| Current assets | 306.071 | 254.807 | 43.683 | 64.289 |
| 337.098 | 275.882 | 55.921 | 77.056 |
Other receivables of the Company include a provision for impairment of €220 recorded during the year 2006.
Additionally, other receivables of the Group on 31/12/2007 include VAT receivable of approximately €21 mil., as well as receivable of €15 mil. from the disposal of shareholding in the subsidiary company HoL (note 10). Furthermore, an amount of €5.903 included under the caption 'Other receivables' concerns amounts deposited in a bank account in accordance with the terms of the bond loan of a subsidiary company.
(All amounts in €'000)
The analysis of trade receivables of the Group and the Company at the end of each year is as follows:
| Group | Company | |||
|---|---|---|---|---|
| 31/12/2007 | 31/12/2006 | 31/12/2007 | 31/12/2006 | |
| Not past due and not impaired at the balance sheet date | 77.967 | 66.649 | 205 | 460 |
| Impaired at the balance sheet date | 19.630 | 15.630 | - | - |
| Provision made for the following amount: | (13.670) | (9.902) | - | - |
| 5.960 | 5.727 | - | - | |
| Not impaired at the balance sheet date but past due in the following periods: | ||||
| < 90 days | 27.038 | 20.081 | 95 | 469 |
| 90-180 days | 9.993 | 9.522 | - | 326 |
| 180-270 days | 6.713 | 5.049 | 6 | 326 |
| 270-365 days | 2.981 | 8.025 | 4 | 1.075 |
| 1- 2 years | 14.874 | 15.803 | 708 | 1.091 |
| >2 years | 32.973 | 30.910 | 4.238 | 3.371 |
| 94.571 | 89.391 | 5.051 | 6.657 | |
| Total trade receivables | 178.498 | 161.767 | 5.255 | 7.117 |
Trade receivables of the Company which are past due for more than 2 years include amounts of €1.133 for which there are respective liabilities. Trade receivables of the Group which are past due for more than one year include receivables from the Greek State of approximately €31 mil.
There is no concentration of credit risk in relation to trade receivables, since the Group has a great 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 are set out in the agreed terms in the contract signed with each customer.
The movement of provision for impairment of trade receivables is analysed as follows:
| Group | Company | |
|---|---|---|
| Balance at 1 January 2006 | 6.880 | - |
| Provision for impairment | 5.047 | - |
| Receivables written-off during year as uncollectible | (299) | - |
| Unused amounts reversed | (1.725) | - |
| Balance at 31 December 2006 | 9.902 | - |
| Provision for impairment | 4.380 | - |
| Receivables written-off during year as uncollectible | (800) | - |
| Acquisition of subsidiaries | 378 | - |
| Unused amounts reversed | (1.797) | - |
| Transfer from assets held for sale | 1.607 | - |
| Balance at 31 December 2007 | 13.670 | - |
(All amounts in €'000)
Trade and other receivables are denominated in the following currencies:
| Group | Company | |||
|---|---|---|---|---|
| 31/12/2007 | 31/12/2006 | 31/12/2007 | 31/12/2006 | |
| Εuro (EUR) | 308.422 | 249.290 | 55.921 | 77.056 |
| Romanian New Lei (RON) | 13.331 | 12.668 | - | - |
| US Dollar (USD) | 5.372 | 2.374 | - | - |
| Hungarian Fiorin (HUF) | 3.522 | 7.344 | - | - |
| Jordan Dinar (JOD) | 3.654 | 2.771 | - | - |
| Other | 2.797 | 1.434 | - | - |
| 337.098 | 275.882 | 55.921 | 77.056 |
| Group | Company | |||
|---|---|---|---|---|
| 31/12/2007 | 31/12/2006 | 31/12/2007 | 31/12/2006 | |
| Raw materials | 31.127 | 28.423 | - | - |
| Semifinished goods | 7.705 | 8.251 | - | - |
| Finished goods | 8.229 | 8.742 | - | - |
| Work in progress | 936 | 3.322 | - | - |
| Merchandise | 4.123 | 3.372 | - | - |
| Other | 125 | 42 | - | - |
| Total | 52.245 | 52.153 | - | - |
| Less: Provisions for obsolete inventories | ||||
| Raw materials | 791 | 499 | - | - |
| Semifinished goods | 151 | 131 | - | - |
| Finished goods | 2 | 1.875 | - | - |
| Merchandise | 2.314 | - | - | - |
| 3.257 | 2.505 | - | - | |
| Net realisable value | 48.987 | 49.649 | - | - |
(All amounts in €'000)
The movement of the provision is as follows:
| Group | Company | |
|---|---|---|
| Balance 1 January 2006 | 6.892 | - |
| Provision for impairment | 2.286 | - |
| Amount of provision reversed during the year | (6.674) | - |
| Balance 31 December 2006 | 2.505 | - |
| Provision for impairment | 713 | - |
| Amount of provision reversed during the year | 40 | - |
| Balance 31 December 2007 | 3.257 | - |
| Group | Company | |||
|---|---|---|---|---|
| 31/12/2007 | 31/12/2006 | 31/12/2007 | 31/12/2006 | |
| Assets | ||||
| Contracts in progress at the balance sheet date | ||||
| Receivables from construction contracts | 20.772 | 16.267 | - | - |
| Total | 20.772 | 16.267 | - | - |
| Liabilities | ||||
| Contracts in progress at the balance sheet date | ||||
| Liabilities from construction contracts | 2.460 | 1.090 | - | - |
| Total | 2.460 | 1.090 | - | - |
| Accumulated contract costs plus accumulated recognised | ||||
| profits less accumulated recognised losses | 222.461 | 87.289 | - | - |
| Less: Progress billings | (204.149) | (72.113) | - | - |
| Construction contracts | 18.312 | 15.177 | - | - |
(All amounts in €'000)
| Group | Company | |||
|---|---|---|---|---|
| 31/12/2007 | 31/12/2006 | 31/12/2007 | 31/12/2006 | |
| Balance at the beginning of the year | 1.056 | 3.441 | - | - |
| Exchange differences | 10 | (2) | - | - |
| Additions | 63 | - | - | - |
| Disposals | (263) | (2.466) | - | - |
| Acquisition of subsidiary / change in consolidation method | 369 | - | - | - |
| Fair value adjustments (Note 31) | 10 | 83 | - | - |
| Balance at the end of the year | 1.245 | 1.056 | - | - |
| Group | Company | |||
| 31/12/2007 | 31/12/2006 | 31/12/2007 | 31/12/2006 | |
| Listed securities | ||||
| - Equity securities - Greece | 1.149 | 786 | - | - |
| - Equity securities - abroad | 33 | 208 | - | - |
| - Mutual funds - Greece | 63 | 62 | - | - |
| 1.245 | 1.056 | - | - |
Cash and cash equivalents include the following for the purposes of the cash flow statement:
| Group | Company | ||||||
|---|---|---|---|---|---|---|---|
| 31/12/2007 31/12/2006 |
31/12/2007 | 31/12/2006 | |||||
| Cash at bank and in hand | 33.787 | 28.734 | 2.742 | 5.721 | |||
| Short-term bank deposits | 42.786 | 86.743 | 30.193 | 66.810 | |||
| Total | 76.573 | 115.477 | 32.935 | 72.531 |
The effective interest rate on short-term bank deposits for the Company was 4,4% (2006: 3,2%).
Cash and cash equivalents are analysed in the following currencies:
| Group | Company | |||
|---|---|---|---|---|
| 31/12/2007 | 31/12/2006 | 31/12/2007 | 31/12/2006 | |
| Euro (EUR) | 36.542 | 26.133 | 12.244 | 6.001 |
| US Dollar (USD) | 8.089 | 7.088 | 2.770 | 3.626 |
| Japanese Yen (JPY) | 23.810 | 77.450 | 16.810 | 62.350 |
| Bulgarian Leva (BGN) | 3.108 | 3.100 | - | - |
| Other | 5.024 | 1.707 | 1.112 | 554 |
| 76.573 | 115.477 | 32.935 | 72.531 |
The Group bank deposits in JPY have fixed exchange rate / fixed return, and as a result there is no exposure to risk from JPY exchange rate changes.
(All amounts in €'000)
| Balance at 1 January 2006 132.413.583 279.393 192.812 - Employee share option scheme Value of services provided - - 555 - Proceeds from shares issued 523.853 739 765 - Expenses on issue of share capital - - (29) - Decrease of share capital - (92.690) - - Treasury shares (815.021) - - (4.215) Balance at 31 December 2006 132.122.415 187.442 194.102 (4.215) Balance at 1 January 2007 132.122.415 187.442 194.102 (4.215) Employee share option scheme Value of services provided 88.581 125 116 - Expenses on issue of share capital - - (14) - 132.210.996 187.567 194.204 (4.215) Treasury shares (865.815) - - (3.509) Balance at 31 December 2007 131.345.181 187.567 194.204 (7.724) |
Number of shares |
Share capital Share premium Treasury shares | Total |
|---|---|---|---|
| 472.205 | |||
| 555 | |||
| 1.503 | |||
| (29) | |||
| (92.690) | |||
| (4.215) | |||
| 377.329 | |||
| 377.329 | |||
| 241 | |||
| (14) | |||
| 377.556 | |||
| (3.509) | |||
| 374.047 |
On 17 December 2007, the Company's share capital increased by 88.581 new shares with nominal value of €1,41 each, due to the exercise of share options during December 2007 (29.667 share options for €2,93 each and 58.914 share options for €2,61 each).
As at 31 December 2007 the share capital of the Company was divided into 133.026.017 shares with nominal value €1,41 each.
During the year 2007, the Company acquired 865.815 of its own shares through purchases on the Athens Stock Exchange. The total amount paid to acquire the shares, net of income tax, was €3.509 which has been deducted from shareholders' equity and is presented at cost.
(All amounts in €'000)
Share options are granted to directors, management and employees of the Group.
A summary of share options granted is as follows:
| Share options | 2007 | 2006 |
|---|---|---|
| Outstanding at 1 January | 361.347 | 775.200 |
| Granted | - | 110.000 |
| Exercised | (88.581) | (523.853) |
| Expired | (86.896) | - |
| Outstanding at 31 December | 185.870 | 361.347 |
The outstanding share options can be exercised wholly or partly within a period of 5 years from the year granted, during the first 15 days of December of each respective year. Consequently, the share options granted during 2006 can be exercised up to December 2011. No share options were granted by the Company during 2007.
During the year 2007, a subsidiary company granted to executives 220 share options which are based on its share price, giving the right to the executives to exchange the share options with a determined amount of cash at the end of the vesting period (3 years). These benefits were accounted partly as an obligation and partly through equity.
The total charge in the consolidated income statement is €496 (liability €314 and equity €182).
During the exercise of the share options, the amounts received net of any transaction costs are included in the share capital (nominal value) and in the share premium.
The charge in the consolidated income statement for the year 2007 amounted to €496 (2006: €555).
The fair value of the share options is determined on grant date using the Binomial model. Fair value reflects the inputs into the model, such as the risk-free interest rate, the expected share volatility, the dividend yield and the expected option life. The f air value is recognised as an expense over the vesting period of the share options. In the case that the share options are cash-settled and thus a liability is recorded, the fair value of the share options is determined at each balance sheet date.
(All amounts in €'000)
| Extraordinary | Fair value | ||||||
|---|---|---|---|---|---|---|---|
| Statutory reserves Special reserves | Tax free reserves | reserves | Other reserves | reserves | Total | ||
| Balance at 1 January 2006 | 31.271 | 8.099 | 155.633 | 70.106 | (1.074) | (642) | 263.392 |
| Fair value gain on available - for - sale financial assets | - | - | - | - | - | 24 | 24 |
| Exchange differences | - | - | - | - | - | 324 | 324 |
| Effect of changes in the group structure | - | - | - | - | (1.459) | - | (1.459) |
| Reclassification due to disposal of subsidiary | (1.877) | - | (42.713) | - | (27.237) | - | (71.827) |
| Other net asset movement of associates | - | - | - | - | 841 | - | 841 |
| Balance at 31 December 2006 | 29.394 | 8.099 | 112.919 | 70.106 | (28.929) | (295) | 191.294 |
| Balance at 1 January 2007 | 29.394 | 8.099 | 112.919 | 70.106 | (28.929) | (295) | 191.294 |
| Fair value profit on available - for - sale financial assets | - | - | - | - | - | 491 | 491 |
| Exchange differences | - | - | - | - | - | (643) | (643) |
| Transfers between reserves | 228 | - | 8.629 | (184) | (385) | - | 8.289 |
| Dividend distribution | - | - | - | (13.126) | - | - | (13.126) |
| Share options | - | - | - | - | 326 | - | 326 |
| Balance at 31 December 2007 | 29.622 | 8.099 | 121.549 | 56.797 | (28.988) | (447) | 186.632 |
| Statutory reserves Special reserves | Tax free reserves | Extraordinary reserves |
Fair value reserves |
Total | ||
|---|---|---|---|---|---|---|
| Balance at 1 January 2006 | 26.719 | 8.069 | 55.376 | 70.106 | (707) | 159.563 |
| Fair value loss on available - for - sale financial assets | - | - | - | - | (63) | (63) |
| Balance at 31 December 2006 | 26.719 | 8.069 | 55.376 | 70.106 | (770) | 159.500 |
| Balance at 1 January 2007 | 26.719 | 8.069 | 55.376 | 70.106 | (770) | 159.500 |
| Dividend distribution | - | - | - | (13.126) | - | (13.126) |
| Fair value loss on available - for - sale financial assets | - | - | - | - | (3.093) | (3.093) |
| Balance at 31 December 2007 | 26.719 | 8.069 | 55.376 | 56.981 | (3.863) | 143.281 |
A legal 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 legal reserve can only be used, after approval of the Annual General meeting of the shareholders, to offset accumulated losses and therefore cannot be used for any other purpose.
The special reserve includes amounts that were created following resolutions of the Annual General meetings, have no specific purpose and can therefore be used for any reason following approval from the Annual General meeting, as well as amounts, which 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 their distribution or capitalisation.
(All amounts in €'000)
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 development laws in force each time. In other words, this reserve is created from profits for which no tax is calculated or paid.
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 above-mentioned 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.
| Group | Company | |||
|---|---|---|---|---|
| 31/12/2007 | 31/12/2006 | 31/12/2007 | 31/12/2006 | |
| Non-current borrowings | ||||
| Bank loans | 4.344 | 7.373 | - | - |
| Finance lease liabilities | 4.555 | 924 | - | 3 |
| Bond loans | 55.036 | 26.962 | - | - |
| Total non-current borrowings | 63.935 | 35.259 | - | 3 |
| Current borrowings | ||||
| Bank loans | 170.627 | 76.516 | 12.774 | 4.326 |
| Bond loans | 7.053 | 4.979 | - | - |
| Finance lease liabilities | 2.917 | 656 | 3 | 11 |
| Total current borrowings | 180.598 | 82.150 | 12.777 | 4.337 |
| Total borrowings | 244.533 | 117.409 | 12.777 | 4.340 |
The carrying amounts of the Group's and the Company's borrowings are denominated in the following currencies:
| Group | Company | |||
|---|---|---|---|---|
| 31/12/2007 | 31/12/2006 | 31/12/2007 | 31/12/2006 | |
| Euro | 240.677 | 105.686 | 12.777 | 4.340 |
| US dollar (USD) | 2.497 | 2.689 | - | - |
| Romanian New Lei (RON) | - | 7.204 | - | - |
| Other | 1.359 | 1.830 | - | - |
| 244.533 | 117.409 | 12.777 | 4.340 |
(All amounts in €'000)
The contractual undiscounted cash flows of the non-current borrowings, excluding finance leases, are as follows:
| Group | Company | |||
|---|---|---|---|---|
| 31/12/2007 | 31/12/2006 | 31/12/2007 | 31/12/2006 | |
| Between 1 and 2 years | 11.958 | 7.703 | - | - |
| Between 2 and 3 years | 10.647 | 10.157 | ||
| Between 3 and 5 years | 44.948 | 17.024 | - | - |
| More than 5 years | 2.020 | - | - | - |
| 69.573 | 34.884 | - | - |
On 31st December 2007 subsidiary companies had non-current bond loans amounting to €55.036 with weighted average floating interest rate of 5%.
The weighted average interest rate for the other borrowings for the Group and the Company for 2007 was around 5% (2006:5%).
Securities relating to the above borrowings are disclosed in note 40.
| Group | Company | |||
|---|---|---|---|---|
| 31/12/2007 | 31/12/2006 | 31/12/2007 | 31/12/2006 | |
| Finance lease liabilities- minimum lease payments | ||||
| Not later than 1 year | 3.213 | 720 | 3 | 12 |
| Between 2 and 5 years | 4.779 | 1.024 | - | 3 |
| Total | 7.991 | 1.743 | 3 | 15 |
| Less: Future finance charges on finance leases | (519) | (164) | (0) | (1) |
| Present value of finance lease liabilities | 7.473 | 1.579 | 3 | 14 |
| Present value of finance lease liabilities: | ||||
| Not later than 1 year | 2.917 | 656 | 3 | 11 |
| Between 2 and 5 years | 4.555 | 924 | - | 3 |
| Total | 7.473 | 1.579 | 3 | 14 |
(All amounts in €'000)
| Group | Company | |||
|---|---|---|---|---|
| 31/12/2007 | 31/12/2006 | 31/12/2007 | 31/12/2006 | |
| Balance sheet obligations for: | ||||
| Pension benefits | 4.053 | 2.719 | 530 | 438 |
| Income statement charge | ||||
| Pension benefits (Note 29) | 2.214 | 1.579 | 305 | (365) |
Charge to the income statement for the Group in 2006 of €910 relates to discontinued operations.
The amounts recognized in the balance sheet are determined as follows:
| Group | Company | |||
|---|---|---|---|---|
| 31/12/2007 | 31/12/2006 | 31/12/2007 | 31/12/2006 | |
| Present value of unfunded obligations | 5.495 | 4.758 | 716 | 718 |
| Unrecognised actuarial losses | (1.443) | (2.039) | (187) | (281) |
| Liability on the balance sheet | 4.052 | 2.719 | 530 | 438 |
The amounts recognised in the income statement are as follows:
| Group | Company | |||
|---|---|---|---|---|
| 1/1-31/12/2007 | 1/1-31/12/2006 | 1/1-31/12/2007 | 1/1-31/12/2006 | |
| Current service cost | 845 | 682 | 59 | 99 |
| Interest cost | 231 | 242 | 31 | 44 |
| Net actuarial losses recognised during the year | 145 | 208 | 27 | 69 |
| Past service cost | 49 | 50 | - | - |
| (Gains) / losses on curtailment | 943 | 397 | 187 | (577) |
| Total, included in staff costs | 2.214 | 1.579 | 305 | (365) |
| Total charge is allocated as follows: | Group | Company | |||
|---|---|---|---|---|---|
| 1/1-31/12/2007 | 1/1-31/12/2006 | 1/1-31/12/2007 | 1/1-31/12/2006 | ||
| Cost of goods sold | 991 | 920 | 80 | (259) | |
| Selling costs | 718 | 510 | 14 | (9) | |
| Administrative expenses | 505 | 150 | 211 | (98) | |
| 2.214 | 1.579 | 305 | (365) |
(All amounts in €'000)
The movement in the liability recognised on the balance sheet is as follows:
| Group | Company | |||
|---|---|---|---|---|
| 31/12/2007 | 31/12/2006 | 31/12/2007 | 31/12/2006 | |
| Balance at the beginning of the year | 2.719 | 6.811 | 438 | 1.133 |
| Exchange differences | 50 | (1) | - | - |
| Total expense charged / (credited) in the income statement | ||||
| (Note 29) | 2.214 | 1.579 | 305 | (365) |
| Contributions paid | (1.357) | (1.503) | (213) | (331) |
| Acquisition of subsidiary (Note 38) | 88 | - | - | - |
| Transfer from assets held for sale | 339 | - | - | - |
| Disposal of subsidiaries | - | (4.168) | - | - |
| Balance at the end of the year | 4.053 | 2.719 | 530 | 438 |
The principal actuarial assumptions used are as follows:
| Group | Company | |||
|---|---|---|---|---|
| 2007 | 2006 | 2007 | 2006 | |
| Discount rate | 4,70% - 5,00% | 4,10% - 4,30% | 4,70% | 4,10% |
| Future salary increases | 4,50% - 4,85% | 4,50% - 4,90% | 4,50% | 4,50% |
| Group | Company | |||
|---|---|---|---|---|
| 31/12/2007 | 31/12/2006 | 31/12/2007 | 31/12/2006 | |
| Balance at the beginning of the year | 544 | 564 | - | - |
| Additions | 1.644 | 150 | - | - |
| Depreciation charge | (425) | (93) | - | - |
| Disposal of subsidiaries | - | (77) | - | - |
| Balance at the end of the year | 1.763 | 544 | - | - |
Depreciation charge of €569 for the year 2006 as shown in note 30 includes depreciation charge of €476 that relates to operations from Hellas On Line.
The grants received in the year 2007 relate to subsidies from the 'Society of Information' to the subsidiary company Hellas on Line for the expansion of its telecommunications network.
(All amounts in €'000)
| Group | Company | |||
|---|---|---|---|---|
| 31/12/2007 | 31/12/2006 | 31/12/2007 | 31/12/2006 | |
| Current liabilities | 6.668 | 5.256 | 142 | 142 |
| Non- current liabilities | 957 | 2.606 | - | - |
| Total | 7.625 | 7.862 | 142 | 142 |
| Unused compensated |
||||
|---|---|---|---|---|
| Warranties | absences | Other | Total | |
| Balance at 1 January 2006 | 4.121 | 162 | 5.036 | 9.319 |
| Exchange differences | (3) | - | - | (3) |
| Additional provisions | 168 | - | 4.269 | 4.437 |
| Unused amounts reversed | - | - | (526) | (526) |
| Provisions used during the year | (105) | - | (2.237) | (2.343) |
| Disposal of subsidiaries | (2.726) | - | (297) | (3.023) |
| Balance at 31 December 2006 | 1.455 | 162 | 6.245 | 7.862 |
| Balance at 1 January 2007 | 1.455 | 162 | 6.245 | 7.862 |
| Exchange differences | - | - | (1) | (1) |
| Additional provisions | 386 | 472 | 2.293 | 3.151 |
| Unused amounts reversed | - | - | (268) | (268) |
| Provisions used during the year | - | - | (3.425) | (3.425) |
| Transfer from assets held for sale | - | - | 307 | 307 |
| Balance at 31 December 2007 | 1.841 | 634 | 5.150 | 7.625 |
The amount of €5.150 included in other provisions as at 31/12/2007 includes an amount of €2.793 that relates to the recognition of losses of loss making contrasts.
| Unused compensated absences |
Other | Total | |
|---|---|---|---|
| Balance at 1 January 2006 | 68 | 74 | 142 |
| Balance at 31 December 2006 | 68 | 74 | 142 |
| Balance at 1 January 2007 | 68 | 74 | 142 |
| Balance at 31 December 2007 | 68 | 74 | 142 |
(All amounts in €'000)
| Group | Company | |||
|---|---|---|---|---|
| 31/12/2007 | 31/12/2006 | 31/12/2007 | 31/12/2006 | |
| Trade payables | 113.902 | 65.127 | 3.800 | 4.535 |
| Prepayments from customers | 45.577 | 37.296 | - | - |
| Deffered income | 7.153 | - | - | - |
| Amounts due to related parties (note 41) | 41.070 | 7.134 | 15.334 | 6.059 |
| Accrued expenses | 10.182 | 9.801 | 267 | 246 |
| Social security and other taxes | 7.140 | 7.879 | 934 | 1.002 |
| Other liabilities | 24.998 | 20.033 | 2.309 | 9.089 |
| Total | 250.023 | 147.270 | 22.645 | 20.931 |
| Non-current liabilities | 7.928 | 2.096 | - | - |
| Current liabilities | 242.094 | 145.174 | 22.645 | 20.931 |
| 250.023 | 147.270 | 22.645 | 20.931 |
Non-current liabilities as at 31 December 2007 include an amount of €3.808 that relates to deferred income.
The credit payment terms enjoyed by 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 | |||
|---|---|---|---|---|
| 31/12/2007 | 31/12/2006 | 31/12/2007 | 31/12/2006 | |
| Euro | 226.453 | 135.222 | 22.409 | 20.663 |
| US Dollar (USD) | 10.512 | 3.115 | 173 | 204 |
| Romanian New Lei (RON) | 6.134 | 5.528 | - | - |
| Hungarian Fiorin (HUF) | 1.995 | - | - | - |
| Bulgarian Leva (BGN) | 1.401 | 1.323 | - | - |
| Other | 3.528 | 2.081 | 63 | 64 |
| 250.023 | 147.270 | 22.645 | 20.931 |
Derivative financial instruments as at 31/12/2006 related to interest-rate swaps of nominal value €100.000. During 2007 the Company settled these positions realising a gain of €1.287 (note 32).
(All amounts in €'000)
| Note | Group | Company | ||||||
|---|---|---|---|---|---|---|---|---|
| 1/1 - 31/12/2007 | 1/1 - 31/12/2006 | 1/1 - 31/12/2007 | 1/1 - 31/12/2006 | |||||
| Employee benefit expense | 29 | 112.530 | 96.475 | 7.784 | 6.935 | |||
| Inventory cost recognised in cost of goods sold | 91.643 | 101.081 | - | - | ||||
| Depreciation of PPE | 6 | 15.752 | 11.910 | 1.305 | 1.514 | |||
| Depreciation of investment property | 9 | 507 | 568 | 766 | 526 | |||
| Amortisation of intangible assets | 8 | 10.013 | 6.124 | 1.600 | 1.644 | |||
| Write-off of PPE | 1.125 | - | - | - | ||||
| Impairment of inventories | 713 | 2.286 | - | - | ||||
| Repairs and maintenance | 1.695 | 1.530 | 383 | 508 | ||||
| Operating lease payments | 6.394 | 3.697 | 689 | 1.209 | ||||
| Subcontractors' fees | 99.521 | 60.081 | - | - | ||||
| Restructuring costs | - | 1.392 | - | - | ||||
| Impairment of receivables | 4.380 | 3.450 | - | 220 | ||||
| Telecommunications cost | 26.565 | 25.955 | - | - | ||||
| Third party fees | 36.725 | 27.189 | 2.661 | 3.275 | ||||
| Advertisement | 12.639 | 4.953 | 207 | 318 | ||||
| Taxes | - | 313 | - | - | ||||
| Other | 32.980 | 34.679 | 4.007 | 5.599 | ||||
| Total | 453.182 | 381.683 | 19.401 | 21.748 | ||||
| Split by function: | ||||||||
| Cost of goods sold | 363.239 | 299.734 | 11.549 | 15.230 | ||||
| Selling costs | 37.831 | 32.651 | 273 | 425 | ||||
| Administrative expenses | 52.111 | 49.297 | 7.579 | 6.092 | ||||
| 453.182 | 381.683 | 19.401 | 21.748 | |||||
| Split of depreciation by function: | ||||||||
| Cost of goods sold | 16.908 | 12.589 | 1.992 | 2.661 | ||||
| Selling costs | 2.053 | 1.481 | 71 | 6 | ||||
| Administrative expenses | 7.310 | 4.531 | 1.608 | 1.018 | ||||
| 26.272 | 18.602 | 3.671 | 3.685 |
| Group | Company | |||
|---|---|---|---|---|
| 1/1 - 31/12/2007 | 1/1 - 31/12/2006 | 1/1 - 31/12/2007 | 1/1 - 31/12/2006 | |
| Wages and salaries | 91.345 | 77.860 | 6.320 | 5.863 |
| Social security costs | 16.723 | 14.821 | 818 | 801 |
| Other employers' contributions and expenses | 2.638 | 2.570 | 341 | 379 |
| Share options granted to employees (Note 20) | 496 | 555 | - | 258 |
| Pension costs - defined contribution plans | 324 | - | - | - |
| Pension costs - defined benefit plans (Note 23) | 2.214 | 669 | 305 | (365) |
| Less: capitalisations to assets under construction | (1.209) | - | - | - |
| Total | 112.530 | 96.475 | 7.784 | 6.935 |
During the year 2007 the subsidiary company Hellas on Line has capitalised employee benefits of €1.209 that are directly attributable to the construction of its telecommunications network.
(All amounts in €'000)
| Group | Company | |||
|---|---|---|---|---|
| 1/1 - 31/12/2007 | 1/1 - 31/12/2006 | 1/1 - 31/12/2007 | 1/1 - 31/12/2006 | |
| Dividend income | 90 | 388 | 1.700 | 1.965 |
| Rental income | 2.429 | 2.374 | 2.163 | 1.362 |
| Depreciation of grants received | 425 | 569 | - | - |
| Income from grants | 248 | 584 | 203 | 584 |
| Other | 2.041 | 1.770 | 126 | 16 |
| Total | 5.232 | 5.685 | 4.192 | 3.927 |
| Group | Company | |||
|---|---|---|---|---|
| 1/1 - 31/12/2007 | 1/1 - 31/12/2006 | 1/1 - 31/12/2007 | 1/1 - 31/12/2006 | |
| (Losses) / gains from sale of PPE | 2.778 | (173) | 402 | (17) |
| (Losses) / gains from sale of intangible assets | (4) | - | - | - |
| Gains from sale of assets held for sale | - | 11.982 | - | 11.982 |
| Fair value gains of financial assets at fair value through profit or loss | ||||
| (note 18) | 10 | 83 | - | - |
| Gains from sale of subsidiaries (note 10) | 12.252 | - | - | - |
| Gains from sale of associates | 268 | - | - | - |
| Gains from sales of financial assets through profit or loss | 10 | 212 | - | - |
| Gains from sale of financial assets available for sale | 9 | - | - | - |
| Impairment / Disposal of investments | - | (1.838) | - | (1.838) |
| Other provisions | (82) | (5.500) | (82) | - |
| Other | (3) | - | (323) | - |
| Total | 15.239 | 4.766 | (3) | 10.127 |
The gain from the sale of assets held for sale for the year 2006 relates to the disposal of 24,8% of the interest held by the Group in Forthnet SA.
(All amounts in €'000)
| Group | Company | ||
|---|---|---|---|
| 1/1 - 31/12/2007 | 1/1 - 31/12/2006 | 1/1 - 31/12/2007 | 1/1 - 31/12/2006 |
| 8.479 | 9.698 | 777 | 1.824 |
| 2.514 | - | - | - |
| 449 | 98 | 1 | 1 |
| 1.348 | 44 | 2 | 6 |
| 1.625 | 1.473 | - | 182 |
| 14.414 | 11.315 | 780 | 2.014 |
| (2.924) | (2.340) | (2.205) | (1.333) |
| 642 | (1.317) | - | - |
| (1.287) | 891 | (1.287) | 891 |
| (661) | - | (93) | - |
| (4.229) | (2.766) | (3.584) | (441) |
| 10.185 | 8.549 | (2.805) | 1.572 |
| Group | Company | |||
|---|---|---|---|---|
| 1/1 - 31/12/2007 | 1/1 - 31/12/2006 | 1/1 - 31/12/2007 | 1/1 - 31/12/2006 | |
| Current tax | 5.080 | 4.594 | 535 | 557 |
| Deffered tax (Note 14) | 10.611 | (3.751) | 4.293 | 2.097 |
| Total | 15.691 | 842 | 4.827 | 2.654 |
(All amounts in €'000)
The tax on the Group's profit before tax differs from the theoretical amount that would arise using the weighted average tax rate applicable to profits of the group companies as follows:
| Group | Company | |||
|---|---|---|---|---|
| 1/1 - 31/12/2007 | 1/1 - 31/12/2006 | 1/1 - 31/12/2007 | 1/1 - 31/12/2006 | |
| (Loss)/ Profit before tax from continuing operations |
(20.450) | (42.991) | (285) | 9.941 |
| Tax calculated at tax rates applicable to Greece | (5.112) | (7.069) | (71) | 2.883 |
| Income not subject to tax | (2.553) | (3.849) | - | (4.045) |
| Expenses not deductible for tax purposes | 3.963 | 10.778 | (292) | 3.653 |
| Differences in tax rates | 425 | 11 | - | (394) |
| Utilisation of previously unrecognised tax losses | (1.166) | (148) | - | - |
| Income tax effect from prior years' tax losses that cannot be carried forward Current year's tax losses for which no deffered tax |
10.476 | - | 4.656 | - |
| asset was created | 8.738 | - | - | - |
| Tax losses for the year | (170) | - | - | - |
| Prior years' taxes | 535 | - | 535 | - |
| Other | 556 | 1.119 | - | 557 |
| Tax charge | 15.691 | 842 | 4.827 | 2.654 |
The Company has not been audited by the tax authorities for the year 2007 and consequently its tax liabilities for this year have not been rendered final. Due to the existence of tax losses the Company does not expect that additional taxes will arise.
Accordingly, there are unaudited tax years for subsidiary companies of the Group and consequently their tax liabilities have not been rendered final.
On 30 June 2006, the Company disposed of 51% holding in its subsidiary company Intracom S.A. Telecom Solutions ("Intracom Telecom Group") to Concern Citronics, subsidiary of Sistema, for €120 million, out of which €85 mil. and €29,2 mil. were received during 2006 and 2007 respectively.
The results from the operations of the group Intracom Telecom for the period 1 January 2006 to 30 June 2006 are presented under results of discontinued operations for the Group for the year 2006.
The share of the consolidated net assets of the sub-group Intracom Telecom times the percentage transferred (51%) amounted to €139.148 at the date of disposal and as a result the Group reported a loss of €19.148 in the consolidated income statement for the year, plus a share transfer tax of €6.554.
In the stand alone financial statements of the parent company, the loss from disposal amounted to €630, plus a share transfer tax of €6.554. During the second quarter of 2007, the sales price was finalized to €119,3 mil. and the Group and the Company recorded an additional loss of €770.
(All amounts in €'000)
On 4 December 2006 the Company signed an agreement in relation to the disposal of 51% of the subsidiary company Hellas on Line ("HoL"), while on 6 July 2007 the Company announced the termination of the above-mentioned agreement. For the period following the signing of the sales agreement and up to its termination, HoL was classified in the consolidated financial statements as held for sale.
As a consequence, the results of HoL group in the annual financial statements of 2006 were shown under discontinued operations. Due to the termination of the sales agreement, the results from the operations of the subsidiary in the current year, as well as in the comparative year of 2006 are shown under continuing operations.
Assets and liabilities of HoL of €80.940 and €48.692 respectively, as analysed in the following table, are presented in separate lines on the balance sheet at 31 December 2006. These assets and liabilities were reclassified following the termination of the sales agreement, while depreciation expense for the whole year were recorded in 2007.
| 31/12/2006 | |
|---|---|
| Property, plant and equipment | 17.169 |
| Intangible assets | 11.141 |
| Deferred income tax assets | 4.561 |
| Trade and other receivables | 20.140 |
| Cash and cash equivalents | 6.600 |
| Other assets | 210 |
| 59.820 | |
| Goodwill on acquisition | 21.120 |
| 80.940 | |
| Liabilities | |
| 31/12/2006 | |
| Borrowings | 20.645 |
| Trade and other payables | 26.635 |
The cash flows from the operations of Hellas on Line for the year 2006 are as follows:
Provisions 1.412
| Group 1/1-31/12/2006 |
|
|---|---|
| Cash flows from operating activities | (17.343) |
| Cash flows from investing activities | (11.094) |
| Cash flows from financing activities | 9.111 |
| Total cash flows from discontinued operations | (19.326) |
48.692
The effect on the cash flows for the year 2007 was the increase in the cash and cash equivalents by €6.680.
(All amounts in €'000)
Basic earnings per share is 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 19).
| Group | Company | |||
|---|---|---|---|---|
| 1/1 - 31/12/2007 | 1/1 - 31/12/2006 | 1/1 - 31/12/2007 | 1/1 - 31/12/2006 | |
| Profit / (loss) attributable to equity holders of the Company | (35.082) | (68.803) | (5.882) | 103 |
| Weighted average number of ordinary shares in issue (thousands) | 131.500 | 132.062 | 131.500 | 132.062 |
| Basic earnings per share (€ per share) | (0,27) | (0,52) | (0,05) | 0,01 |
| - From continuing operations | (0,26) | (0,33) | (0,04) | 0,06 |
| - From discontinued operations | (0,01) | (0,19) | (0,01) | (0,05) |
Diluted earnings per share is 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.
| Group | Company | |||
|---|---|---|---|---|
| 1/1 - 31/12/2007 | 1/1 - 31/12/2006 | 1/1 - 31/12/2007 | 1/1 - 31/12/2006 | |
| Profit / (loss) attributable to equity holders of the Company | (35.082) | (68.803) | (5.882) | 103 |
| Weighted average number of ordinary shares in issue (thousands) Adjustment for |
131.500 | 132.062 | 131.500 | 132.062 |
| Share options (thousands) | 90 | 177 | 90 | 177 |
| Weighted average number of ordinary shares for diluted earnings per | ||||
| share (thousands) | 131.591 | 132.239 | 131.591 | 132.239 |
| Diluted earnings per share (€ per share) | (0,27) | (0,52) | (0,05) | 0,01 |
| - From continuing operations | (0,26) | (0,33) | (0,04) | 0,06 |
| - From discontinued operations | (0,01) | (0,19) | (0,01) | (0,05) |
The Annual General Meeting of the Shareholders of the Company held on 29 June 2007, approved the payment of a dividend of €0,10 per share for the year 2006 out of prior years' taxed reserves, totalling to €13.126. This amount has been accounted for in shareholders' equity as an appropriation of retained earnings during the current year.
(All amounts in €'000)
| Group | Company | ||||
|---|---|---|---|---|---|
| Note | 1/1 - 31/12/2007 | 1/1 - 31/12/2006 | 1/1 - 31/12/2007 | 1/1 - 31/12/2006 | |
| Profit/ (loss) for the year | (36.910) | (68.944) | (5.882) | 103 | |
| Adjustments for: | |||||
| Tax | 15.691 | 8.148 | 4.827 | 9.208 | |
| Depreciation of PPE | 6 | 15.752 | 15.253 | 1.305 | 1.514 |
| Amortisation of intangible assets | 8 | 10.013 | 12.597 | 1.600 | 1.644 |
| Depreciation of investment property | 9 | 507 | 628 | 766 | 526 |
| Write - offs | 552 | 1.063 | - | 1.043 | |
| Loss / (Profit) on sale of PPE | (2.778) | 173 | (402) | 17 | |
| Fair value gains of financial assets at fair value through profit or loss | 31 | (10) | (83) | - | - |
| Gains from sale of financial assets at fair value through profit or loss | 31 | (10) | (212) | - | - |
| Gains from sale of available - for - sale financial assets | 31 | (9) | - | - | - |
| Gains from sale of assets held for sale | 34 | - | (11.982) | 82 | (11.982) |
| Gains on disposal of associates | 31 | (268) | - | - | - |
| (Gains) /Loss on disposal of subsidiaries | 10, 34 | (11.482) | 19.148 | 770 | 1.300 |
| Employees share option scheme | 496 | 555 | - | 258 | |
| Reversal of impairment of subsidiaries | - | - | - | - | |
| Interest income | (2.942) | (1.565) | (2.297) | (1.333) | |
| Interest expense | 14.414 | 16.331 | 780 | 2.014 | |
| Dividend income | 30 | (90) | (388) | (1.700) | (1.965) |
| Depreciation of grants received | 24 | (425) | (93) | - | - |
| Share of profit from associates and joint ventures | 11 | 554 | 15.689 | - | - |
| Movements in subsidiary held for sale | - | 10.924 | - | - | |
| Exchange loss / (gain) | (410) | 23 | - | - | |
| 2.644 | 17.265 | (152) | 2.347 | ||
| Changes in working capital | |||||
| Inventories | 2.291 | 984 | - | - | |
| Trade and other receivables | (50.792) | (37.820) | (8.298) | 61.818 | |
| Trade and other payables | 65.196 | 66.196 | 8.616 | (35.641) | |
| Provisions for other liabilities and charges | (595) | 1.566 | - | - | |
| Retirement benefit obligations | 907 | 76 | 92 | (696) | |
| Derivative financial instruments | (4.475) | (6.596) | (4.475) | (6.464) | |
| 12.533 | 24.404 | (4.065) | 19.017 | ||
| Cash generated from operations | 15.176 | 41.669 | (4.217) | 21.364 |
(All amounts in €'000)
On 23 April 2007, the subsidiary company HoL acquired 100% of the share capital of Attica Telecommunications S.A. for €47.030 in cash.
Hellas on Line made a provisional allocation of the purchase price to the assets and liabilities of the acquired company. The allocation process is expected to be completed within the 12month period as set out by IFRS 3, at which time the final amount of goodwill will be determined.
The carrying amounts of the assets and liabilities of Attica Telecommunications SA at the acquisition date, as well as their fair values at the same date are as follows:
| Carrying | Provisional fair | |
|---|---|---|
| Assets | Amounts | values |
| Property, plant and equipment | 30.291 | 33.397 |
| Intangible assets | 142 | 8.282 |
| Deferred income tax assets | 258 | - |
| Trade and other receivables | 10.252 | 10.252 |
| Cash and cash equivalents | 1.010 | 1.010 |
| Other assets | 40 | 40 |
| 41.994 | 52.982 | |
| Liabilities | ||
| Borrowings | 11.000 | 11.000 |
| Trade and other payables | 13.380 | 13.380 |
| Retirement benefit obligations | 88 | 88 |
| Deferred income tax liabilities | - | 2.553 |
| 24.468 | 27.021 | |
| Equity | 17.526 | 25.961 |
| Purchase price | 47.030 | |
| Goodwill | 21.069 | |
| Purchase consideration seetled in cash | 47.030 | |
| Cash and cash equivalents in subsidiary acquired | (1.010) | |
| Net cash outflow on acquisition | 46.020 |
The provisional fair values include the intangible assets recognised at acquisition, namely the customer relationships of €8.140, the fair value of the telecommunications network, as well as the corresponding deferred tax on these assets of €2.811.
The profit for the Group from the subsidiary company in the year 2007 amounted to €3.027.
(All amounts in €'000)
On 26 July 2007, the newly established subsidiary company IT Services Denmark A/S acquired a business engaging in the provision of services, for a consideration of €4.600. The Group has made a provisional allocation of the purchase price, allocating almost all the cost of acquisition to goodwill, while intangible assets such as trade name, customer relationships and computer software have been identified and are in the process of being valued. This business contributed to the Group losses of €231 for the year 2007.
Up to 31/12/2006, Unibrain SA, in which the Group has a shareholding of 29,98%, was consolidated using the equity method of accounting. In January 2007, the Group obtained control of the company's management through the majority on the Board of Directors and as a result the company was fully consolidated for the first time. Based on the current shareholding of the Group and the great dispersion of the company's shares, the Group has the ability to appoint the majority of the members on the Board of Directors, to control the management and to determine the operating decisions of the company and as a result it was concluded that the requirements of IAS 27 for consolidation are met ("De facto control").
The carrying amounts of the assets and the liabilities at the date of first consolidation are as follows:
| PPE and intangible assets | 1.313 |
|---|---|
| Trade and other receivables | 1.286 |
| Inventories | 1.431 |
| Cash and cash equivalents | 2.123 |
| Other assets | 833 |
| Trade and other payables | (854) |
| Provisions | (52) |
| 6.080 |
The results that have been consolidated for the current period are as follows:
| 1/1 - 31/12/2007 | |
|---|---|
| Sales | 5.765 |
| Operating profit | 225 |
| Finance costs - net | 53 |
| Profit before tax | 278 |
| Net profit | 153 |
For the year 2006, share of profit of associates included profits of €159 from the consolidation of Unibrain.
The effect to equity was the increase in minority interests at the date of first consolidation by €4.257, whereas the effect to the cash flow statement was the increase in cash at the date of first consolidation by €2.123.
(All amounts in €'000)
During the current period the percentage holding of the subsidiary company Intracom IT Services in Dialogos SA decreased from 51% to 39%. The Group continues to have the power to appoint the majority of the members on the Board of Directors and to control the management and as a result the subsidiary continues to be fully consolidated.
HoL was acquired by Intracom on 31 January 2006 for €24.108 payable in cash to EFG Eurobank SA.
The carrying amounts of the assets and liabilities of HoL at the acquisition date as well as their fair values at the same date are as follows:
| Assets | Carrying amount | Fair value |
|---|---|---|
| Property, plant and equipment | 8.705 | 8.705 |
| Intangible assets | 3.143 | 12.553 |
| Deferred income tax assets | 1.974 | (378) |
| Trade and other receivables | 17.803 | 17.803 |
| Cash and cash equivalents | 1.070 | 1.070 |
| Other assets | 175 | 175 |
| 32.870 | 39.928 | |
| Liabilities | ||
| Borrowings | 13.217 | 13.217 |
| Trade and other payables | 22.320 | 22.320 |
| Provisions for other liabilities and charges | 1.403 | 1.403 |
| 36.940 | 36.940 | |
| Net assets | (4.069) | 2.988 |
| Purchase consideration | 24.108 | |
| Goodwill | 21.120 |
The fair values include the intangible assets recognised at acquisition, namely the trade name of the company of €7.010 and the customer relationships of €2.400, as well as the corresponding deferred tax liability of €2.353.
As at the balance sheet date there were capital commitments for PPE of €31.562 for the Group.
(All amounts in €'000)
| Group | Company | |||
|---|---|---|---|---|
| 31/12/2007 | 31/12/2006 | 31/12/2007 | 31/12/2006 | |
| Up to 1 year | 1.351 | 796 | 482 | 563 |
| From 2 to 5 years | 3.260 | 1.247 | 833 | 766 |
| More than 5 years | 1.187 | 174 | 149 | 174 |
| 5.798 | 2.217 | 1.464 | 1.504 |
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 | |||
|---|---|---|---|---|
| 31/12/2007 | 31/12/2006 | 31/12/2007 | 31/12/2006 | |
| Guarrantees for advance payments | 92.771 | 108.577 | 65.159 | 102.057 |
| Guarrantees for good performance | 122.250 | 162.810 | 69.335 | 95.870 |
| Guarrantees for participation in contests | 15.872 | 18.507 | 10.483 | 18.507 |
| Other | 5.183 | - | - | - |
| 236.076 | 289.894 | 144.976 | 216.433 |
The Company has given guarantees to banks for subsidiaries' loans amounting to €271.437 and for finance lease contracts amounting to €4.949.
In addition, the Company has guaranteed the contractual liabilities of an associate company.
There is an outstanding legal case against a subsidiary company from the Ministry of Merchant Marine (MMM) concerning violations during the execution of a project completed and delivered to the MMM in an prior period. The penalties and rebates that were initially claimed amounted to €29 mil., amount which has been reduced to €9 mil., following a settlement, while it is assessed that this amount will be reduced further. The lawyers of the Company in their letter set out that the information on the basis of which the penalties were imposed show serious inadequacies and that the final outcome will be favorable to the Company.
On 4 March 2008, the major shareholders of Teledome S.A. took legal action against Intracom Holdings, two subsidiary companies and key management personnel, due to the annulment of the earlier decision for the merger of Hellas on Line, Unibrain and Teledome. Through this lawsuit, amounts of approximately €90 mil. are claimed from the parent company and from subsidiaries. The Group's management and its lawyers assess that the possibility of any material liabilities arising for the Group in relation to this case is very low.
It is not anticipated that any material liabilities will arise from the contingent liabilities.
(All amounts in €'000)
The following transactions are carried out with related parties:
| Group | Company | ||||
|---|---|---|---|---|---|
| 1/1 - 31/12/2007 | 1/1 - 31/12/2006 | 1/1 - 31/12/2007 | 1/1 - 31/12/2006 | ||
| Sales of goods / services: | |||||
| To subsidiaries | - | - | 10.518 | 13.804 | |
| To other related parties | 16.849 | 5.710 | 1.128 | 1.405 | |
| 16.849 | 5.710 | 11.646 | 15.210 | ||
| Purchases of goods / services: | |||||
| From subsidiaries | - | - | 623 | 379 | |
| From other related parties | 11.341 | 3.441 | 13 | 1 | |
| 11.341 | 3.441 | 635 | 380 | ||
| Rental income: | |||||
| From subsidiaries | - | - | 609 | 368 | |
| From other related parties | 1.068 | 845 | 863 | 427 | |
| 1.068 | 845 | 1.472 | 796 | ||
| Purchases of fixed assets: | |||||
| From subsidiaries | - | - | 3.489 | 49 | |
| From other related parties | 27.526 | 3.731 | - | 2.838 | |
| 27.526 | 3.731 | 3.489 | 2.888 | ||
| Disposals of fixed assets: | |||||
| To subsidiaries | - | - | - | 152 | |
| To other related parties | - | - | - | 37 | |
| - | - | - | 189 |
Services from and to related parties, as well as sales and purchases of goods take place on the basis of the price lists in force with non-related parties. Other related parties are mainly associates and companies in which the major shareholder of the Company holds an interest share.
Sales and purchases of goods and services as well as rental income include transactions effected with Intracom Telecom group up to 30 June 2006. Purchases and sales of fixed assets with other related parties include transactions with the Telecom group.
(All amounts in €'000)
Year-end balances arising from transactions with related parties are as follows:
| Group | Company | |||
|---|---|---|---|---|
| 31/12/2007 | 31/12/2006 | 31/12/2007 | 31/12/2006 | |
| Receivables from related parties: | ||||
| From subsidiaries | - | - | 18.214 | 13.484 |
| From other related parties (Note 15) | 41.897 | 39.811 | 15.125 | 12.293 |
| 41.897 | 39.811 | 33.339 | 25.776 | |
| Payables to related parties | ||||
| To subsidiaries | - | - | 2.182 | 2.811 |
| To other related parties (Note 26) | 41.070 | 7.134 | 13.152 | 3.248 |
| 41.070 | 7.134 | 15.334 | 6.059 |
Total amount of €1.865 has been paid by the Company as directors' remuneration and key management compensation for the year 2007 (2006: €1.323). The outstanding balance due to directors as at 31st December 2007 was €253 (2006: €0).
On 4 March 2008, certain major shareholders of Teledome S.A. took legal action against Intracom Holdings, two subsidiary companies and key management personell (see note 40).
On 5 March 2008, Unibrain and HoL signed a binding merger agreement via the absorption of the second by the first company. The Extraordinary General Meetings of the two companies are expected to approve the timetable of the merger.
(All amounts in €'000)
The companies included in the consolidated financial statements and the related direct percentage interests held are as follows.
| Direct % interest | Indirect % | ||
|---|---|---|---|
| Name | Country of incorporation | interest held | |
| * Intracom S.A Defence Electronic Systems | Greece | 100% | 100% |
| * HELLAS ON LINE | Greece | 92% | 92% |
| - Attica Telecommunications SA | Greece | 100% | 92% |
| * Intracom Holdings International Ltd | Cyprus | 100% | 100% |
| - Intracom Technologies Ltd | Cyprus | 100% | 100% |
| - Fornax RT | Hungary | 67% | 67% |
| - Fornax Integrator | Hungary | 100% | 67% |
| - Fornax Informatika Doo Croatia | Croatia | 100% | 67% |
| - Fornax Slovakia | Slovakia | 100% | 67% |
| - Intracom Operations Ltd | Cyprus | 100% | 100% |
| - Intracom Group USA | USA | 100% | 100% |
| * Intracom IT Services | Greece | 100% | 100% |
| - Global Net Solutions Ltd | Bulgaria | 100% | 100% |
| - Dialogos SA | Greece | 39% | 39% |
| -Data Bank SA | Greece | 90% | 90% |
| - Intracom Jordan Ltd | Jordan | 80% | 80% |
| - Intracom IT Services Denmark AS | Denmark | 100% | 100% |
| - Intracom Exports Ltd | Cyprus | 100% | 100% |
| - Intracom Cyprus Ltd | Cyprus | 100% | 100% |
| - Intrasoft International SA | Luxemburg | 97% | 97% |
| - PEBE SA | Belgium | 100% | 100% |
| - Intrasoft SA | Greece | 100% | 100% |
| - Intrasoft International Belgium | Belgium | 100% | 100% |
| - Switchlink NV | Belgium | 65% | 65% |
| - Unibrain SA | Greece | 30% | 30% |
| - Unibrain Inc | USA | 100% | 30% |
| * Intrakat SA | Greece | 74% | 74% |
| - Inmaint SA | Greece | 60% | 44% |
| - ΚEPA Attica SA | Greece | 51% | 38% |
| - Intracom Construct SA | Romania | 95% | 70% |
| - Eurokat SA | Greece | 82% | 60% |
| - Intrakat International Ltd | Cyprus | 100% | 100% |
| - Intradevelopment SA | Greece | 100% | 74% |
(All amounts in €'000)
| Name | Country of incorporation | Direct % interest | Indirect % |
|---|---|---|---|
| held | interest held | ||
| * Intracom S.A Defence Electronic Systems | Greece | 100% | 100% |
| * HELLAS ON LINE | Greece | 100% | 100% |
| * Intracom Holdings International Ltd | Cyprus | 100% | 100% |
| - Intracom Technologies Ltd | Cyprus | 100% | 100% |
| - Fornax RT | Hungary | 67% | 67% |
| - Fornax Integrator | Hungary | 100% | 67% |
| - Fornax Informatika Doo Croatia | Croatia | 100% | 67% |
| - Fornax Slovakia | Slovakia | 100% | 67% |
| - Intracom Operations Ltd | Cyprus | 100% | 100% |
| - Intracom Group USA | USA | 100% | 100% |
| * Intracom IT Services | Greece | 100% | 100% |
| - Global Net Solutions Ltd | Bulgary | 100% | 100% |
| - Dialogos SA | Greece | 51% | 51% |
| - Intracom Jordan Ltd | Jordan | 80% | 80% |
| - Intracom Exports Ltd | Cyprus | 100% | 100% |
| - Intracom Cyprus Ltd | Cyprus | 100% | 100% |
| - Intrasoft International SA | Luxemburg | 100% | 100% |
| - PEBE SA | Belgium | 100% | 100% |
| - Intrasoft SA | Greece | 100% | 100% |
| - Intrasoft International Belgium | Belgium | 100% | 100% |
| - Switchlink NV | Belgium | 65% | 65% |
| * Intrakat SA | Greece | 74% | 74% |
| - Inmaint SA | Greece | 60% | 44% |
| - ΚEPA Attica SA | Greece | 51% | 38% |
| - Intracom Construct SA | Romania | 87% | 64% |
| - Intrakat Romania SRL | Romania | 100% | 74% |
| - Eurokat SA | Greece | 82% | 60% |
| - Intradevelopment SA | Greece | 100% | 74% |
* Direct investments
Building tools?
Free accounts include 100 API calls/year for testing.
Have a question? We'll get back to you promptly.