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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Helesi | LSE:HLS | London | Ordinary Share | CY1010102113 | ORD EUR0.10 (DI) |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 1.75 | 0.00 | 00:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Jan 2020 to Jan 2025
TIDMHLS
RNS Number : 3136V
Helesi PLC
11 December 2013
December 11th 2013
Helesi PLC
("Helesi", "the Company" or "the Group")
Final results for the year to 31 December 2012
Helesi PLC (AIM: HLS), the Greece, Italy and Cyprus based waste management products manufacturer and services supplier announces final results for the year to 31 December 2012.
CHAIRMAN'S STATEMENT
Greece remains in deep recession for a sixth consecutive year (one of the largest recessions in post-war history surpassing a 25% reduction of the country's GDP), and the Group realizing losses for the third consecutive year. Nonetheless, despite the fall in revenues, the enterprise managed to improve many key profitability components, such as the EBITDA and raw material costs. Additionally, the company experienced high growth rates in most market segments in the local market (such as vehicles and services). Moreover, it started reconstructing its debt and as a result expects to minimize capital costs. Furthermore, it is expecting to gain precious capital through divesting its operations in Italy.
Outlook
Although the Group continues to operate in a very volatile market, we expect growth in all market segments and that the Group will be able to capitalize on this growth potential by generating revenues through new projects in the local market, as well as by increasing exports. We will persevere in our efforts on improving the bottom line (costs and gross margins) and to improve working capital management in order to aggressively expand exports.
Dimitris Kainaros
Non-Executive Chairman
For further information please visit www.helesi.com or contact:
Helesi PLC Christina Thanassoulia +30 22990 82 801 Panmure Gordon Andrew Godber +44 (0)20 7886 2500
CHIEF EXECUTIVE'S REVIEW OF OPERATIONS
The continuous adverse market conditions within 2012 did not allow Helesi to accomplish the turnaround it anticipated. The lack of working capital, led to a slight revenue reduction. Nevertheless, the company managed to improve EBITDA profitability. Throughout 2012 the management adopted a conservative strategy with the main aims being the survival of the firm and aggressive cost-cutting. Concurrently, the firm initiated an open communication with all the crediting banks, in order that in 2013 the following are secured:
-- A required grace period -- The required capital and financial tools that will enable company growth -- The reduction of cost of capital to levels that will support company viability
The net debt as of 31 December 2012 was EUR65.7 million. As previously disclosed, the Group continues to be in breach of some of its banking covenants and is dependent on the continuing support of domestic and other financial institutions. Additional information about the Group's financial position and borrowings are further described in notes 2 (Going Concern) and 18. Your attention is drawn to the emphasis of matter in the independent auditor's report.
Results
In 2012, revenues fell by 15% to EUR28.8 million (2011: EUR33.9 million). A closer inspection of revenue analysis per sector in 2012 for the Greek company leads to the following critical remarks:
Within 2012 the market revitalized and illustrated a72% sales growth (2012: EUR5.7 2011: EUR3.3 million) for the vehicle market segment due to the signing and implementation of the first vehicle equipment contracts funded by EU funds, a 26% growth for bins (2012: EUR4.9 2011: EUR3.9 million) for the local market, though there was a significant reduction in exports leading to a 34% decline in group sales for plastic products (2012: EUR15.1 million 2011: EUR23.0 million) and a 4.6% increase private waste collection services (2012: EUR7.95 2011: 7.6 million). This sales increase is the indicator of the large market growth we expect for the next years in the private waste collection services market segment.
In the same period, exports declined by 43% (2012: EUR11.0 million 2011: EUR19.6 million). However, the international demand increased. The export decrease is attributed to difficulties in executing orders on time, due to liquidity problems and lack of working capital to fund raw material requirements. This decrease illustrates the immediate need to resolve the issue of working capital, in order to ensure the timely procurement of raw materials and efficient service of overseas clients. Furthermore, it illustrates the need to provide export-oriented financial tools, to enable presence in international exhibitions and in the growing overseas market.
Despite the revenue decrease, EBITDA improved by almost EUR2.2 million to a breakeven postion (2011: EUR2.17 million loss). Furthermore, there was a significant enhancement in the overall result with a reduction in losses of EUR6 million to EUR14.3 million loss (2011: EUR20.4 million loss). The Group can quickly return to profitability if it is able to increase capacity utilization (which is currently below 25% of total capacity). This is largely a factor of liquidity, not demand.
The board has taken the decision to sell the investment in Pisticci Italy, due to the low capacity utilization rates and the overall economic climate in Italy, It is expected to produce positive results, as the proceeds will be used to fund the Group's working capital requirements and will directly impact revenue potential and profitability.
Market Outlook
Local market:
The waste management services sector is expected to be among the sectors that will flourish after the end of the recession in the local market. The crisis caused a severe cut in waste management spending for local authorities for at least the last 3 years. As a result, also bearing in mind there are increased EU funds allocated for these expenditures for the next 3 years, we expect a significant growth in the local market.
Besides, the Greek state is obliged to reduce the number of state employees. Consequently, the local municipalities as well as not having the ability to hire their own employees, will also face increasing pressure for more efficient (cost-efficient and effective) services that the private sector offers. Hence, it is reasonable to expect that local municipal authorities will subcontract such services to specialized vendors (such as Helesi). Helesi has already gained significant waste management service contracts for the period 2013-2015 in touristic and other regions of Greece and expects the market to grow in 2014.
Export market:
The market is expanding globally offering considerable growth potential. Even though our Group faced formidable working capital financing problems and as a consequence was offering non-favorable terms (in terms of credit and delivery times) to its clients, the Group exported EUR11.0 million in 33 countries. The fact that our Group maintains a presence even temporarily small for many countries, offers huge potential once the working capital issues are dealt with. Our production operations, which are among the most technically advanced and efficient in the world, provide us with considerable product and cost competitive advantages.
Dividend
No dividend will be paid.
Operations
The decline in exporting activity due to financing constraints, the lack of sizable projects in the local market, and restraints in working capital changed Helesi's sales mix. In 2011, revenues were split 68%, 10%, 22% in terms of Plastic Products (principally bins and pallet boxes), Vehicles and Services. This compares with 53%, 20%, 27% in 2012. The decrease of the plastic products segment contribution was due to the fall in exports.
Plastic Products
As in the previous year the utilisation rates across all production sites were below 50% of the actual capacity. Exports to overseas countries decreased considerably due to the working capital issues mentioned before. Nevertheless, the local market had a rebound.
Waste Management Services
Services revenues grew by almost 4.6% in 2012 despite the low performance of the Greek market, due to the ongoing fiscal crisis. However, the Group expects a much stronger increase for 2013 (around 30%-40%) and significant growth for 2014 and thereafter.
Waste management Vehicles and Equipment
There was a comeback for the vehicles sales, despite the constraints imposed in the Greek state spending (especially for local authorities) with a 72.5% surge in revenues.
Sakis Andrianopoulos
Chief Executive Officer
December 9(th) 2013
Statement of the members of the Board of Directors and other responsible persons of the Company for the financial statements
In accordance with Article 9, sections (3) (c) and (7) of the Transparency Requirements (Securities for Trading on regulated Market) Law of 2007 ("Law"), we the members of the Board of Directors and the other responsible persons for the consolidated financial statements of Helesi PLC for the year ended 31 December 2012 we confirm that, to the best of our knowledge:
(a) the annual consolidated financial statements that are on pages 12 to 45:
(i) were prepared in accordance with the International Financial Reporting Standards as adopted by the European Union, and in accordance with the provisions of Article 9, section (4) of the Law, and
(ii) give a true and fair view of the assets and liabilities, the financial position and the profit of Helesi PLC and the businesses that are included in the consolidated accounts as a total , and
(b) the directors' report gives a fair review of the developments and the performance of the business as well as the financial position of Helesi PLC and the businesses that are included in the consolidated accounts as a total, together with a description of the principal risks and uncertainties that they are facing.
Members of Board of Directors:
Kainaros Dimitrios Non - Executive Chairman ----------------------- ------------------------- Athanassios (Sakis) Chief Executive Officer Andrianopoulos ----------------------- ------------------------- Christina Thanassoulia Deputy Chief Executive ----------------------- ------------------------- Elena Paraskeva Non Executive Director ----------------------- -------------------------
Nicosia Cyprus
December 9(th) 2013
DIRECTORS' REPORT
The directors present their annual report together with the audited financial statements and the consolidated financial statements of the Company and its subsidiary companies, as at and for the year ended 31 December 2012.
Incorporation & Legal Status
Helesi PLC was incorporated in Cyprus on 31 May 2006, under registration number 177536, as a limited liability company, in accordance with the provisions of Companies Law, Cap. 113. Soon after incorporation, the Company was transformed into a public limited company, in anticipation of the listing of its shares on the AIM market operated by the London Stock Exchange, which admission was realised on 23 November 2006.
Share Capital
The composition of and the changes in the share capital of the Company, in the period covered by the financial statements, are set out, in the notes to the financial statements.
Company's authorised share capital is divided into 60.000.000 shares (2011: 60.000.000 shares) of a nominal value of EUR0.10 each. Company's issued share capital is divided into 39.805.754 shares (2011: 39.805.754 shares) of a nominal value of EUR0.10 each.
Principal Activities
The Helesi Group (Helesi) is a specialist designer and manufacturer of plastic products for use in the waste management industry and a provider of waste management services. The Group also produces other injection moulded plastic products, such as pallet boxes and other material handling products. Its activities comprise:
-- the design and manufacture of a broad range of plastic waste containers including 2 and 4 wheeled bins, pre-sorting bins and the full range of EN 840 standard containers selling into the waste management market;
-- the design and manufacture of material handling plastic products (pallet boxes and crates) for agricultural, domestic and industrial use as well as other injection-moulding plastic products, such as pre-sorting waste bins, fish crates, and stadium seats;
-- the supply of special vehicles and equipment for the waste management industry; -- the recycling of used vehicle tyres and
-- the provision of waste management services (mainly waste collection, container washing, street sweeping and recyclable materials collection).
The principal current role of Helesi PLC is to serve as the ultimate holding entity of the Group.
Financial Results
The results for the year as well as the contribution for each segment of the Group's business are set out in the attached financial statements. The Group's net after tax loss for the year amounted to EUR14.29 million. (2011: EUR20.4 million loss)
Helesi Plc does not intent to pay a dividend in 2012. (2011: no dividend paid)
The main risks and uncertainties faced by the Company and the steps taken by the firm to manage these risks, are described in note 19.
Board of Directors
The directors support the idea of an effective Board. The Board is responsible for approving Group policy and strategy. It meets once every two months and has an agenda of matters specifically reserved to it for decision. Management supplies the Board with appropriate and timely information and the directors are entitled to seek any further information they consider necessary.
The Board currently consists of two executive directors, who hold the key operational positions in the Group, and two non-executive directors, who are independent of management. The Board's decision-making is not dominated by any individual.
On the 11(th) of January 2013, Mr. Papaggelis resigned from being a member of the Group's board of directors
The Directors of the Company, as of today, are:
Athanassios (Sakis) Andrianopoulos Chief Executive ----------------------------------- ------------------------- Dimitrios Kainaros(1) Non Executive - Chairman ----------------------------------- ------------------------- Christina Thanassoulia Director ----------------------------------- ------------------------- Elena Paraskeva(1) Non-executive - Director ----------------------------------- -------------------------
(1) Members of the Audit Committee and the Remuneration Committee.
All the directors intend to continue in office. Their beneficial interest in the share capital of the Company and certain share options held by the directors are disclosed in the following table:
Name of Board Number of Shares Shareholding as Member held at 31.12.2012 a % ------------------------- -------------------- ---------------- Athanassios (Sakis) Andrianopoulos 6.262.424 15.73% ------------------------- -------------------- ---------------- Christina Thanassoulia 4.763.658 11.97% ------------------------- -------------------- ---------------- Elena Paraskeva 17.500 0.0004% ------------------------- -------------------- ----------------
Audit and Remuneration Committees
The Audit and Remuneration Committees, chaired by Dimitri Kainaros, are an important part of the Group's implementation of the principles of good corporate governance.
The Audit Committee meets at least twice each year. The external auditors are invited to attend the meetings and have direct access to the non-executive directors for independent discussions without the presence of the executive directors. The Audit Committee may examine any matters relating to the financial affairs and risk issues affecting the Group. This includes reviews of the annual financial statements and announcements, internal control procedures, accounting policies, compliance with accounting standards, the appointment of external auditors and other such functions as the Board may require.
he Remuneration Committeereviews and approves the remuneration of all the key executives as well as the overall compensation policy of the Group.
Internal Control
The Board is responsible for maintaining an adequate system of internal control to safeguard shareholders' investment and the Group's assets, and for reviewing its effectiveness. The Group's system of internal control is designed to manage rather than to eliminate the risk of failure to achieve business objectives. It can only provide reasonable but not absolute assurance against loss or misstatement.
Corporate Governance
As an AIM listed group, Helesi PLC is not required to comply with the Combined Code (2003). However, where sensible, bearing in mind its size, the Group seeks to adhere to the principles of good governance embodied in the Combined Code.
Employees
Helesi recognises the importance of good internal communications and all employees are encouraged to discuss with management factors affecting Helesi and any matters about which they are concerned. Helesi regularly updates employees regarding Helesi's objectives and performance and all employees are entitled to participate in Helesi's discretionary bonus scheme.
Helesi always fully and fairly considers matters relating to employment regardless of race, sex, disability, religious belief or sexual orientation. It is Helesi's policy to facilitate the ongoing development of all staff through appropriate training and continuing professional development.
Relations with Shareholders
The Board considers relations with shareholders to be particularly important. Regular presentations are given to institutional shareholders and the Board considers the Annual General Meeting as an opportunity to communicate with all shareholders. As a publicly quoted company, we seek to communicate our progress regularly and openly to our shareholders. Presently, that communication is focused on the announcement of the interim and final results in September and April, respectively, and this is supplemented by updates on current trading in February and August. In addition to these formal progress reports we will continue to announce any material developments, as and when they occur.
Directors' Responsibilities for the Financial Statements
The Board aims to present a balanced and readily understandable view of Helesi's financial position, results of operations and prospects. The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and the International Financial Reporting Standards (IFRS). Company law requires the Directors to prepare accounts for each financial year, which give a true and fair view of the state of affairs of the Company and the Group and of the profit or loss of the Company and the Group for that year. In preparing those accounts, the Directors are required:
a. to select suitable accounting policies and apply them consistently;
b. to make judgements and estimates that are reasonable and prudent;
c. to determine whether the applicable accounting standards have been followed.
The Directors are responsible for keeping proper accounting records, which disclose with reasonable accuracy, at any time, the financial position of the Company and the Group and which enable them to ensure that the financial statements comply with the requirements of the law. The Directors are also responsible for safeguarding the assets of the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The Directors are also responsible for the maintenance and integrity of the corporate and financial information provided on the Helesi PLC website.
Auditors
The auditors of the Company, BDO Ltd, have expressed their willingness to continue in office. A resolution giving authority to the Board to re-appoint the auditors will be proposed at the annual general meeting.
By order of the Board
Dimitri Kainaros
Chairman
Nicosia Cyprus December 9(th) 2013
REMUNERATION REPORT
Composition and Function of the Remuneration Committee
The Remuneration Committee comprises the non- executive directors, Dimitris Kainaros and Elena Paraskeva. It determines all aspects of the executive directors' remuneration. The remuneration of non-executive directors is determined by the Board, following recommendations by the executive directors.
Policy on Executive Directors' Remuneration
Executive remuneration packages are designed to attract, motivate and retain directors of the calibre necessary to manage the Group's response to the changes in the economic environment, to achieve its long term goal of achieving growth and profitability and to reward them for enhancing shareholder value and return. Performance measurement and the determination of their annual remuneration are undertaken by the Remuneration Committee.
The remuneration of executive directors is reviewed annually by the Committee. In deciding appropriate levels of remuneration, the Committee considers the pay rates for similar roles in comparable businesses. Executive directors' remuneration was last reviewed in December 2008.
Share Options
The Board believes that share ownership strengthens the links between employees, directors and shareholders. The Remuneration Committee is responsible for supervising the Company's share option scheme. Details of the share options granted to directors, to date, are set out below:
Elena Paraskeva 37,086
These options were granted on 23 November 2006, are exercisable between 23 November 2009 and 23 November 2013, at an exercise price of 116p, which is the IPO floating price. The options were not exercised by Ms. Paraskeva and as a result, they are not valid any more. The market price of the Helesi PLC shares, on the 7(th) of December 2013. The Helesi share have been suspended from trading in the AIM market of the London stock exchange, since June 2013 (last transaction made on the 7th of June 2013).
Service Contracts
Sakis Andrianopoulos and Christina Thanasoulia both have service contracts, which are terminable by the Company at 3 months' notice. No compensation is payable to any director on leaving office. None of the non-executive directors have service contracts.
Details ofDirectors' Remuneration
The emoluments of the executive and the non-executive directors are set out below (in EUR'000):
Hot Features
Premium
2012 2011
------------------------------------ ----- -----
Athanassios (Sakis) Andrianopoulos
CEO 18 18
------------------------------------ ----- -----
ainaros Dimitrios Non 12 -
Executive Chairman
------------------------------------ ----- -----
Christina Thanassoulia
Director 18 18
------------------------------------ ----- -----
Apostolos Binomakis Non
Executive Director - 17
------------------------------------ ----- -----
Ioannis Riskakis Executive
Director - 26
------------------------------------ ----- -----
George Papagelis, Non-executive
director 12 5
------------------------------------ ----- -----
Elena Paraskeva, Non-executive
director 13 25
------------------------------------ ----- -----
Independent Auditor's Report
To the Members of Helesi PLC
Report on the Financial Statements and the Consolidated Financial Statements
We have audited the accompanying financial statements and the consolidated financial statements of Helesi PLC (the "Company") and its subsidiaries ('the Group') on pages 12 to 45, which comprise the statement of financial position and the consolidated statement of financial position of the Company and the Group as at 31 December 2012, and the respective statements of comprehensive income, changes in equity and cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information.
Board of Directors' Responsibility for the Financial Statements and the Consolidated Financial Statements
The Board of Directors is responsible for the preparation of financial statements and consolidated financial statements that give a true and fair view in accordance with International Financial Reporting Standards as adopted by the European Union (EU) and the requirements of the Cyprus Companies Law, Cap. 113, and for such internal control as the Board of Directors determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express an opinion on these financial statements and consolidated financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements and consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements and the consolidated financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements and the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation of financial statements and consolidated financial statements that give a true and fair view 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 the Board of Directors as well as evaluating the overall presentation of the financial statements and the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion.
Basis for qualified opinion
The group did not recognise an impairment provision for bad debts amounting to EUR1.4 million and consequently the receivables in the statement of financial position appear overstated by the above amount, the equity and the deferred tax liabilities appear overstated by EUR1.2 million and EUR0.2 million respectively, whereas losses as presented in the statement of comprehensive income for the year appear understated by EUR1.2 million.
In addition, we were not able to obtain sufficient and appropriate audit evidence to satisfy ourselves as to the fair value of goodwill amounting to EUR7.6 million and therefore whether any impairment provision should be recognised in respect of this.
Qualified opinion
In our opinion, except for the issues explained in the basis for qualified opinion paragraphs, the financial statements and the consolidated financial statements give a true and fair view of the financial position of Helesi PLC and its subsidiaries as at 31 December 2012, 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 and the requirements of the Cyprus Companies Law, Cap. 113.
Emphasis of Matter
We draw attention to note 2 to the consolidated financial statements which indicates that the Group's current liabilities exceed its current assets by EUR45.4 million. The Group also incurred a loss of EUR14.3 million for the year ended 31 December 2012. The Group's ability to continue as a going concern is dependent upon receiving the continuing support of domestic and other financial institutions and suppliers. These factors together with other uncertainties and the continuing financial crisis of the Greek and European economy and public sector also explained in note 2 indicate the existence of a material uncertainty that may cast significant doubt about the Group's ability to continue as a going concern. The financial statements do not include the adjustments that would result if the company was unable to continue as a going concern. Our opinion is not qualified in respect of the above matter.
Report on Other Legal and Regulatory Requirements
Pursuant to the requirements of the Law of 2009 on Statutory Audits of Annual and Consolidated Accounts, we report the following:
-- We have obtained all the information and explanations we considered necessary for the purposes of our audit, except that the scope of our work was limited by the matters discussed in the basis for qualified opinion paragraphs.
-- In our opinion, proper books of account have been kept by the Group and the Company, except in the cases as discussed in the basis for qualified opinion paragraphs.
-- The financial Statements and the consolidated financial statements are in agreement with the books of account.
-- In our opinion and to the best of our information and according to the explanations given to us, the financial statements and the consolidated financial statements give the information required by the Cyprus Companies Law, Cap. 113, in the manner so required, except as discussed in the basis for qualified opinion paragraphs.
-- In our opinion, the information given in the report of the Board of Directors is consistent with the financial statements and the consolidated financial statements.
Pursuant to the requirements of the Directive DI190-2007-04 of the Cyprus Securities and Exchange Commission, we report that a corporate governance statement has been made for the information relating to paragraphs (a), (b), (c), (f) and (g) of article 5 of the said Directive, and it forms a special part of the Report of the Board of Directors.
Other Matter
This report, including the opinion, has been prepared for and only for the Company's members as a body in accordance with Section 34 of the Law of 2009 on Statutory Audits of Annual and Consolidated Accounts and for no other purpose. We do not, in giving this opinion, accept or assume responsibility for any other purpose or to any other person to whose knowledge this report may come to.
Panicos Constantinou
Certified Public Accountant
and Registered Auditor
for and on behalf of
BDO Ltd
Certified Public Accountants
(CY) and Registered Auditors
Nicosia, 10 December 2013
Statements of comprehensive The Group The Company
income
Notes 31 December 31 December 31 December 31 December
2012 2011 2012 2011
EUR000 EUR000 EUR000 EUR000
Sales revenue 3 28.795 33.929 - -
Other revenue 4 1.154 781 630 1.131
Changes in inventories
of finished goods (1.399) (1.451) - -
Cost of materials
used (12.698) (16.165) - -
Personnel-related
costs 5 (6.550) (6.732) (36) (39)
Directors' emoluments 27 (73) (109) (73) (109)
Depreciation charges 6 (4.974) (4.718) - -
Impairment of goodwill (400) (4.900) - -
Write off receivables (1.831) (400) - -
Other operating expenses 7 (9.224) (12.025) (308) (449)
Cost of financing,
net 8 (5.205) (6.263) (5) (2)
------ ------ ------ ------
(Loss) / Profit before
taxes (12.405) (18.053) 208 532
Income taxes 9 (1.885) (2.379) (23) (58)
------ ------ ------ ------
(Loss) / Income of
the year (14.290) (20.432) 185 474
------ ------ ------ ------
EBITDA 5 (2.173) 185 532
Currency translation
adjustments - - - -
Total comprehensive
(loss) / income (14.290) (20.432) 185 474
------ ------ ------ ------
Basic and diluted
earnings per share
(in euro) 25 (0.36) (0.51) - 0.01
------ ------ ------ ------
The attached notes form an integral part of these
financial statements
Statements of financial position as at 31.12.2012
The Group The Company
Notes 31 December 31 December 31 December 31 December
2012 2011 2012 2011
Assets
Non current assets EUR000 EUR000 EUR000 EUR000
Property Plant and Equipment 12 74.152 77.069 - -
Goodwill 13 7.259 7.659 - -
Other intangible assets 13 1.303 1.593 - -
Other long-term assets 14 81 81 - -
Investment in subsidiaries - - 39.383 39.383
------ ------ ------ ------
Total non current assets 82.795 86.402 39.383 39.383
------ ------ ------ ------
Current assets
Inventories 15 4.322 4.873 - -
Trade and other receivables 16 24.081 33.776 193 199
Cash and cash equivalents 17 452 1.198 1 -
------ ------ ------ ------
Total current assets 28.855 39.847 194 199
------ ------ ------ ------
Total assets 111.650 126.249 39.577 39.582
------ ------ ------ ------
Share capital 23 (3.981) (3.981) (3.981) (3.981)
Share premium 23 (33.641) (33.641) (33.641) (33.641)
Capital reserves 24 (9.981) (9.981) - -
Retained earnings 31.966 17.351 (638) (453)
------ ------ ------ ------
Total equity (15.637) (30.252) 38.260 (39.582)
Non current liabilities
Long-term borrowings 18 (14.692) (36.651) - -
Current liabilities to supplier 20 (1.575) (1.258) - -
Employee benefits 21 (381) (251) - -
Deferred tax liabilities 26 (5.069) (3.309) - -
------ ------ ------ ------
Total non current liabilities (21.717) (41.469) - -
Current liabilities
Trade and other payables 20 (22.568) (24.191) (1.294) (1.445)
Current tax payable (726) (706) (22) (62)
Short-term borrowings 18 (51.002) (29.631) (1) -
------ ------ ------ ------
Total current liabilities (74.296) (54.528) (1.317) (1.507)
------ ------ ------ ------
Total liabilities (96.013) (95.997) (1.317) (1.507)
------ ------ ------ ------
Total liabilities and equity (111.650) (126.249) (39.577) (39.582)
----------- ----------- ---------- ----------
The attached notes form an integral part of these
financial statements
Statements of changes
in equity The Group
Share Share Capital Currency Retained Total
Capital premium Reserves translation earnings
adjustments
'EUR 000
Balances, as at
31 December 2010 3.981 33.641 9.981 (1.029) 3.081 49.655
Total comprehensive
income for the
year - - - (224) (20.432) (20.656)
Elimination of
exchange difference
through P&L - - - 1.253 - 1.253
------ ------ ------ ------ ------ ------
Balances, as at
31 December 2011 3.981 33.641 9.981 - (17.351) 30.252
------ ------ ------ ------ ------ ------
Balances, as at
31 December 2011 3.981 33.641 9.981 - (17.351) 30.252
Total comprehensive
loss for the year - - - - (14.290) (14.290)
Prior year adjustment (325) (325)
------ ------ ------ ------ ------ ------
Balances, as at
31 December 2012 3.981 33.641 9.981 - (31.966) 15.637
------ ------ ------ ------ ------ ------
The Company
Share Share Retained Total
capital premium earnings
Balances, as at 31
December 2010 3.981 33.641 (20) 37.602
Total comprehensive
income for the year - - 473 473
------ ------ ------ ------
Balances, as at 31
December 2011 3.981 33.641 453 38.075
------ ------ ------ ------
Balances, as at 1
January 2012
Total comprehensive
loss for the year - - 185 185
------ ------ ------ ------
Balances, as at 31
December 2012 3.981 33.641 638 38.260
------ ------ ------ ------
The attached notes form an integral part of
these financial statements
Statements of cash flows The Group The Company
31 December 31 December 31 December 31 December
2012 2011 2012 2011
Cash flows related to
operating activities EUR000 EUR000 EUR000 EUR000
(Loss)/ profit before
taxes (12.406) (18.053) 209 532
Adjustments in respect
of non-cash transactions:
Depreciation of fixed
assets 4.974 4.720 - -
Interest expense, net 4.205 5.010 1 2
Profit/loss from sale
of fixed asset 253 528 - -
Employee retirement benefits 130 102 - -
Other non cash items - 1.026 - -
Impairment of goodwill 400 4.900 - -
Exchange differences
reconciled in P&L - 1.253 - -
------ ------ ------ ------
(1.726) (514) 209 534
Decrease (increase) in
inventories 551 3.977 - -
Decrease (increase) in
receivables 9.695 2.725 221 (107)
Increase (decrease) in
payables (1.305) - (368) (427)
------ ------ ------ ------
7.215 6.188 147 -
Net interest received
(paid) (5.236) (5.027) - (2)
Exchange differences
reconciled in P&L - (1.253) - -
Income taxes paid (104) (513) - -
------ ------ ------ ------
Net operating cash inflows
(outflows) 1.875 (605) 62 (2)
------ ------ ------ ------
Cash flows related to
investing activities
Acquisition of tangible
fixed assets (2.251) (1.451) - -
Disposal of tangible
fixed assets 226 132 - -
Acquisition of intangible
fixed assets (39) (323) - -
Interest received 31 18 61 -
------ ------ ------ -----
Net investment cash inflows
(outflows) (2.033) (1.624) 1 -
------ ------ ------ ------
Cash flows related to
financing activities
Loans contracted (repaid) (441) 2.286 8
Finance lease payments (148) 139 - -
Interest paid - - - (1)
------ ------ ------ ------
Net financing cash inflows
(outflows) (588) 2.425 8 (1)
------ ------ ------ ------
Increase (decrease) of
cash balances (747) 196 (9) (2)
Cash balances, at the
beginning of the period 1.198 1.002 9 2
------ ------ ------ ------
Cash balances, at the
end of the period 452 1.198 - -
------ ------ ------ ------
The attached notes form an integral part of these
financial statements
Notes to the financial statements
1. Incorporation and principal activities
Helesi PLC is a publicly listed company registered in Cyprus, which serves as the ultimate holding company of the Group. Its registered office is located at the Tseri Industrial Zone, near Nicosia. The Company was incorporated in Cyprus, in May 2006, as part of a Group restructuring process, entailing the exchange of Helesi AE shares for Helesi PLC shares, in anticipation of the admission of the Group to trading on AIM, which materialised in November 2006.
Helesi PLC holds 100% of Helesi SA, the Group's principal operating entity. Helesi SA is an Anonymos Eteria (corporation) registered in Greece. The full, formal name of the Helesi AE is Hellenic Industrial Environmental Systems SA (Helliniki Viomichania Perivallontikon Systimaton Anonymi Emporiki - Viomichaniki Eteria). Helesi SA was established in 1997, its registered office is located at 19 Agiou Ioannou Street, Aegeo, GR-25100, Greece and its administrative offices are located at Industrial Park of Markopoulo, Location Ntorovateza GR-19003 Attiki Greece. The Company is primarily engaged in the production and trading of injection-moulded refuse containers and in the recycling of rubber tyres, at a production plant located at Komotini, Northern Greece. In the course of 2007, Helesi SA merged with Perivallontiki Environmental Services SA (a wholly owned subsidiary of Helesi PLC at the time) and during the course of the same year with the Vehicles Division of Perivallontiki AE. As a result of these transactions Helesi SA also provides waste management services and special waste management vehicles.
On 3 January 2008, Helesi PLC acquired Perivallontiki AZ Ltd and Helesi Trans Ltd, which were wholly owned subsidiaries of Perivallontiki AE. Perivallontiki AZ Ltd is a company incorporated in Cyprus, engaged in the distribution of Helesi products in Cyprus. Helesi Trans Ltd is also a company incorporated in Cyprus, engaged in the provision of international transportation services, mainly to the group. The consideration paid for acquiring the shares of these two entities amounted, in total, to EUR 952 thousand. The existing minority interests were also acquired for EUR 28 thousand. The acquisition cost of these two entities was impaired in 2010 by EUR490 thousand in total. The impairment was EUR275 thousand for Perivallontiki AZ Ltd and EUR215 thousand for Helesi Trans Ltd.
Helesi UK Limited is a wholly-owned subsidiary of Helesi SA, registered in England, whose registered address is Units 14-17 Iron Park Works, Bowling Back Lane, Bradford, England. Helesi UK Limited, which was incorporated on 4 February 2004 was primarily engaged in the production and trading of injection-moulded refuse containers. In 2010 Helesi UK Limited sold the business and some of the assets which constitute Helesi's UK based two-wheeled bin manufacturing operations, to Straight Plc. The company does not operate the facility in Bradford North UK any longer.
Early in 2009 Helesi commenced the waste management of the Western Macedonia area under a profit sharing agreement with Mesogios AE, in which Mesogios AE is entitled to a share of 40% of the profits generated. The Group is in 60% control of the operations and is responsible for its financing and accordingly has recognised 60% of revenues and related costs in the Consolidated Financial Statements.
Helesi Italia srl is also a wholly-owned subsidiary of Helesi SA, registered in Italy, whose registered address is via Giovanni XXIII, N.106, Capri, Modena, Italy. By the first half of 2009, Helesi Italia completed the construction of its factory and commenced its operations. However, the Group is in the process of divesting its operations in Italy, due to the crisis in the local economy and market. Helesi SA is expected to benefit with an amount near EUR 2million in 2014.
The consolidated financial information of Helesi PLC includes Helesi SA, Helesi UK Ltd, Helesi Italia srl, Perivallontiki AZ Ltd ,Helesi Trans Ltd and JV Mesogios S.A.
The financial statements of Helesi PLC are also set in this report to the shareholders. Helesi PLC is referred to as "The Company".
Intragroup balances and intragroup transactions as well as the Helesi PLC Group profits that have arisen on intragroup transactions and have not been realised (at Helesi PLC Group level) as yet, are eliminated on consolidation.
The assets and the liabilities of foreign operations are converted into Euros at the rates of exchange prevailing on the balance sheet date, while the revenues and costs of foreign operations are converted into Euros at rates which tend to approximate the rates prevailing on the dates the transactions are entered into. The currency translation gains or losses that arise from the restatement of assets and liabilities of foreign operations are taken directly to equity and are reported in the "currency translation adjustments".
The financial statements have been compiled on the basis of the International Financial Reporting Standards (IFRS) that have been adopted by the European Union. The financial statements have been compiled on the basis of historical cost and the amounts reported therein are stated in Euro thousand.
These financial statements have been approved for publication by the Board of Helesi PLC, at its meeting held on 9(th) December 2013.
Helesi PLC Group structure
The Helesi PLC Group comprises the following entities:
Entity Country of Equity Interest
Incorporation
Helesi PLC Cyprus Holding entity
Helesi SA* Greece 100%
Helesi UK Ltd United Kingdom 100% via Helesi
SA
Helesi Italia Italy 99,99% via
srl* Helesi SA
AZ Perivallontiki
Ltd Cyprus 100%
Helesi Trans
Ltd Cyprus 100%
JV Periv/ki Mesogeios SA Greece 60%
JV Periv/ki Mesogeios SA-W.A.T.T Greece
50%
JV Periv/ki Mesogeios SA-ES Greece 60%
(*) Entities with production facilities
2. Accountingpolices
Basis of preparation
The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union (EU) and the requirements of the Cyprus Companies Law, Cap.113. The consolidated financial statements have been prepared under the historical cost convention.
The preparation of financial statements in conformity with IFRSs requires the use of certain critical accounting estimates and requires Management to exercise its judgement in the process of applying the Group's accounting policies. It also requires the use of assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although these estimates are based on Management's best knowledge of current events and actions, actual results may ultimately differ from those estimates.
Adoption of new and revised IFRSs
During the current year the Company adopted all the new and revised International Financial Reporting Standards (IFRS) that are relevant to its operations and are effective for accounting periods beginning on 1 January 2012. This adoption did not have a material effect on the accounting policies of the Company.
At the date of approval of these financial statements the following accounting standards were issued by the International Accounting Standards Board but were not yet effective:
(i) Standards and Interpretations adopted by the EU
New standards
* IFRS 10 "Consolidated Financial Statements"
(effective for annual periods beginning on or after 1
January 2014).
* IFRS 11 "Joint Arrangements" (effective for annual
periods beginning on or after 1 January 2014).
* IFRS 12 "Disclosure of Interests in Other Entities"
(effective for annual periods beginning on or after 1
January 2014).
* IFRS 13 "Fair Value Measurement" (effective for
annual periods beginning on or after 1 January 2013).
Amendments
IFRS Interpretations Committee
* Amendments to IFRS 1 - Government loans (effective
for annual periods beginning on or after 1 January
2013).
* Amendments to IAS 1, "Presentation of items of other
Comprehensive Income" (effective for annual periods
beginning on or after 1 July 2012).
* Amendments to IAS 19 -- "Employee Benefits"
(amendments) (effective for annual periods beginning
on or after 1 January 2013).
* IAS 27 (Revised): "Consolidated and Separate
Financial Statements" (effective for annual periods
beginning on or after 1 January 2014).
* IAS 28 (Revised): "Investments in Associates"
(effective for annual periods beginning on or after 1
January 2014).
* Amendment to IAS32 "Offsetting Financial Assets and
Financial Liabilities" (effective for annual periods
beginning on or after 1 January 2014).
* Improvements to IFRSs 2009--2011issued in May 2012
(effective for annual periods beginning on or after 1
January 2013)
* IFRS 7 (Amendment) Financial Instruments: Disclosures
-- "Offsetting Financial Assets and Financial
Liabilities" (effective for annual periods beginning
on or after 1 January 2013)
* Transition Guidance for IFRS 10, 11 & 12 (effective
for annual periods beginning on or after 1 January
2014).
New IFRICs
* IFRIC 20: "Stripping Costs in the Production Phase
of a Surface Mine" (effective for annual periods
beginning on or after 1 January 2013).
(ii) Standards and Interpretations not adopted by the EU
New standards
* IFRS 9 "Financial Instruments" issued in November
2009 and amended in October 2010 introduces new
requirements for the classification and measurement
of financial assets and financial liabilities and for
derecognition. (effective for annual periods
beginning on or after 1 January 2013).
Amendments
* Amendment to IAS 36 "Recoverable Amount --
Disclosures for Non--Financial Assets" (effective
for annual periods beginning on or after 1 January
2014).
* Amendment to IAS 39 "Financial Instruments:
Recognition and Measurement", Novation of
Derivatives and Continuation of Hedge Accounting
(effective for annual periods beginning on or after 1
January 2014).
* IFRS 9 "Financial Instruments" (issued 12 November
2009) and subsequent amendments (amendments to IFRS 9
and IFRS 7 issued 16 December 2011) (effective for
annual periods beginning on or after 1 January 2015).
* Investment Entities amendments to IFRS 10, IFRS 12,
and IAS 27 (effective for annual periods beginning on
or after 1 January 2014).
New IFRICs
* IFRIC 21 "Levies" (effective the latest as from the
commencement date of its first annual period
beginning on or after 1 January 2014).
The Board of Directors expects that the adoption of these standards or interpretations in future periods will not have a material effect on the financial statements of the Company.
Going concern
The financial statements are prepared under the going concern assumption. As at the balance sheet date, the Group's current liabilities exceed its current assets by an amount of EUR45.4 million. This is attributed to the fact that as at the balance sheet date, negotiations with creditor banks for rescheduling their debt had not been finalized and except for Alpha Bank, waivers had not been received in respect of breaches in the loan covenants resulting in the majority of borrowings being classified as short term liabilities.
Greece, which is currently the main country that the group operates, is in deep recession for a sixth consecutive year. This fact did not allow Helesi to accomplish the turnaround in 2012 as anticipated. The lack of working capital resulted in further slight revenue reduction.
Furthermore, the Group incurred a loss for the year of EUR14.3 million reflecting continued depression in the market place. This constitutes an improvement of EUR6.1 million compared to the prior year and is attributed to more effective management of costs. It is important to note that EUR5.4 million of losses were caused by depreciation and goodwill impairment (thus not directly affecting actual cash-flow). EBITDA turned positive reflecting an improvement of EUR2.2 million on the previous year.
In addition, as explained in note 11 and 30, the Company until the date of this report has reduced its operations in Italy and Cyprus and has concentrated its efforts to further improve the operating results in Greece where it sees the more potential for growth and improved profitability.
The Group is continuing discussions with its Bankers to restructure its loans, to extend the repayment terms, reduce the borrowing costs and also to obtain the necessary headroom to enable new orders to be accepted and fulfilled. The financial statements assume that the Group will succeed in this regard.
The Group ability to continue as a going concern also requires the continuation of the long-term relationships it has formed with its creditors and vendors, and their continued support in providing extended repayment terms.
Fixed assets
Fixed assets are reported in the financial information at acquisition cost, after deduction of (a) the government grants received that partially cover their acquisition cost, (b) accumulated depreciation and, if applicable, (c) any permanent impairment.
The costs incurred for the replacement of substantial component parts of fixed assets are capitalised. The remaining costs that are incurred subsequent to the installation of fixed assets are capitalised only if they enhance the future economic benefits that will be derived through the use of the affected assets. All other costs and expenses that are incurred for the maintenance, repair etc. of fixed assets are charged to operations at the time they are incurred.
Depreciation is computed and charged to operations on the basis of the straight-line method, over the estimated useful life of the fixed assets. Land is not depreciated. The estimated useful life of each category of assets, is as follows:
Buildings, installations 20-40 Years and infrastructural works Landscaping 5 Years Industrial machinery and 15-20 Years equipment Other installations and 4-8 Years equipment Furniture and other equipment 4-8 Years Vehicles 4-8 Years
The intangible fixed assets acquired by the Helesi PLC Group are reported at their acquisition cost reduced by accumulated amortisation and, if applicable, by any permanent impairment of their value. The costs associated with internally generated goodwill are charged to operations in the period in which they are incurred.
The amortisation of intangible fixed assets, comprising computer software, is charged to operations on the basis of the straight-line method, over their estimated useful life. The estimated useful life of computer software is 5 - 8 years.
Capitalisation of Development Costs
The Helesi PLC Group invests substantial amounts in research and development and, in particular, in the development of new moulds and techniques that are instrumental in the lowering of costs and in attaining higher levels of operational efficiency. Such development costs are capitalised if, and only if, the following conditions are satisfied:
(a) the technical feasibility of completing the work undertaken (so that it will be available for use) is evident;
(b) the commitment and ability to complete such work and use its outcome exists;
(c) the generation of future economic benefits through the use of such development work is highly probable;
(d) the necessary technical, financial and other resources to complete the development work and to place it into use are available;
(e) the ability to measure reliably the expenditure attributable to such development work exists.
Participation in joint ventures
Joint Ventures are proportionally consolidated in the group's financial statements.
Inventories
Inventories are reported at the lower of their purchase or production cost and their corresponding net realisable value. Net realisable value is the estimated re-sale value of the inventories, reduced by the cost of disposal. The cost of inventories is quantified on the basis of the weighted average method and is inclusive of the costs associated with their acquisition or production (in the case of internally produced goods) and the costs incurred in bringing them to their present location and condition.
The specialised spare parts of machinery and equipment that are purchased at the stage of the acquisition of the machinery and equipment they relate to, are considered to be an integral part of and are depreciated along with the assets they are destined to support, while the replacements of such spare parts are expensed at the time of their purchase. In contrast, maintenance materials and general-use spare parts are included in inventories and are expensed as and when they are used.
Trade and other receivables
Receivables are reported net of the amounts that are deemed to be doubtful of collection.
Cash and cash equivalents
Cash is inclusive of cash equivalents, such as current account balances and short-term deposits. Bank overdrafts repayable on demand that form part of the cash management system of the Helesi PLC Group, are reported, in the statement of cash flows, as forming part of cash balances.
Transactions in foreign currencies
The transactions that are denominated in foreign currencies are stated in the functional currency of each entity forming part of the Helesi PLC Group, on the basis of the exchange rates ruling on the date of the transaction. On the balance sheet date, monetary assets and liabilities that are denominated in foreign currencies are re-stated in the reporting currency on the basis of the exchange rates ruling on this date. The gains and losses arising on restatement are taken to operations.
In contrast, the currency translation adjustments that arise in the consolidation process, on the conversion of the financial statements of subsidiaries that are compiled in currencies other than the Group's reporting currency, are reflected directly in shareholders' equity.
Dividends
Dividends payable are reported as a liability at the time that they are declared as payable by the shareholders in general meeting.
Employee retirement benefits
The obligations of the Helesi PLC Group towards its employees, who are based in Greece, for the payment of certain benefits at the stage of retirement that are dependent on the length of service, are quantified and reported by reference to the accrued, as at the date of the balance sheet, benefit that is anticipated to be paid to each employee in the future, discounted to its present value, having regard to the anticipated time of payment. The discount rate used is equal to the yield, as at the balance sheet date, of Greek Government bonds.
Provisions
Provisions are set up when the Helesi PLC Group has a legal or constructive obligation, in relation to a past event, and it is deemed likely that the settlement of the obligation will absorb resources embodying economic benefits.
Financial instruments
The basic financial instruments used by the Helesi PLC Group are cash, bank deposits, short-term receivables and payables and certain other forms of financing. Given the short-term nature of these instruments, Helesi PLC Group management believes that their fair value is essentially identical to the value at which they are reported in the accounting records of the Helesi PLC Group. Furthermore, Helesi PLC Group management believes that the interest rates paid in relation to the contracted loans are equivalent to the current fair market rates and, consequently, there are no grounds for adjusting the value at which these obligations are reported. The Helesi PLC Group does not use any financial derivatives.
Revenues
Sale of goods and services
The revenue derived from the sale of goods is recognised (reported in the statement of comprehensive income) at the stage when the basic risks and benefits associated with the ownership of the goods, are transferred to the buyer. The revenue derived from the rendering of services is recognised (reported in the statement of comprehensive income) on the basis of the stage of completion of the project, at the date of the balance sheet. Revenue is not recognised, if there is substantial uncertainty as to the likelihood of collecting the consideration agreed upon or the possible return of the goods.
Government grants
Government grants are accounted for when there is reasonable certainty that they will be collected and the Helesi PLC Group is in a position to conform to the terms and conditions imposed for their collection. The grants that are intended to partly finance the acquisition of fixed assets are deducted from the cost of the acquisition of the related assets. The grants, which aim at compensating the business for expenses incurred, are reported as income of the period in which the subsidised expenses are charged.
Expenses
Payroll Costs
Payroll costs are charged to operations as incurred, except for the element of these costs that is associated with the development of new products or new components of existing products, which may be capitalised, if appropriate.
Operating leases
The payments effected under operating leases are charged to operations in line with the usage of the leased asset.
Finance leases
Finance leases are treated as financing arrangements, resulting in the leased assets being reported as assets of the Helesi PLC Group (and depreciated accordingly) with a corresponding liability being reported towards the lessor or the lessors. The cost of financing is taken to operations as an expense, as it accrues.
Cost of financing
The net cost of financing comprises interest paid or accrued on contracted loans as well as on finance leases, calculated on the basis of the real interest rate, less interest income generated by the short-term investment of surplus cash funds. Exceptionally, the cost of financing the construction of fixed assets is treated as a component part of the cost of these assets, provided that the conditions set for such capitalisation are satisfied.
Income taxes
The income tax charge in the period comprises the current tax charge and the deferred tax element, that is the tax (or the tax relief), which is associated with revenues (or costs) that are reported, for accounting purposes, in the current period but will generate a tax burden or relief in future accounting periods. Income tax charges are shown in the statement of earnings, except for the tax, which relates to transactions taken directly to equity. This tax is also taken directly to equity.
The current tax charge is quantified by reference to the taxable income of the period of each entity forming part of the Helesi PLC Group, on the basis of the nominal rates of tax applicable as at the balance sheet date, plus any additional taxes likely to be imposed on the examination of the tax returns filed. In the case that different tax rates apply to distributed and retained earnings, the quantification of the current tax is based on the rates applicable to each category and by reference to the corresponding amounts. This inevitably results in the differentiation of the effective tax rate over time, depending on the policy followed by the Helesi PLC Group with respect to the distribution or the non-distribution of profits.
The deferred tax charge is quantified by the application of the relevant tax rates on the differences between the accounting and tax base of assets and liabilities, to the extent that such differences comprise timing differences that are anticipated to reverse in the future.
A deferred tax asset is recognised, only to the extent that is likely that taxable profits will be generated in the future, sufficient to absorb the tax relief obtained through the recognition of the deferred tax asset. A deferred tax asset is appropriately reduced to the extent that it becomes uncertain whether the anticipated future tax relief will, in fact, be secured.
Segmental analysis
A "segment" is defined as a separate and distinct group of business activities with common characteristics as to the nature of the activities and the business risk associated with such activities (business segment). A corresponding distinction is made on the basis of the business environment within which the activities are undertaken (geographic segment). The group has two distinct business segments: the environmental products segment and the environmental services segment. .
The business activities of the Helesi PLC Group can be distinguished between the production, marketing and distribution of environment-related products and environment-related services. At present, the Helesi PLC Group has two production and trading units - one in Greece and one in Italy, under the corporate umbrellas of Helesi Sa and Helesi Italia Srl, respectively. The financial results and the financial position of these two business and geographic segments are summarised in note 10 to the financial information. The third-party transactions and balances of Helesi PLC, Helesi Trans, AZ Perivallontiki, JV Perivallontiki-Mesogeios and Helesi Italia srl, which are not eliminated on consolidation, still comprise relatively immaterial amounts that are included in the Greek segment.
On the basis of business risks and, in general, the economic environment of each country in which Helesi PLC Group customers are based, an analysis is provided in note 10 of (a) the value of sales and (b) the value of the trade receivables outstanding at each year end.
For the purposes of this analysis, a distinction is made between the following geographic segments: Greece, Italy, rest of European Union, Other (non-EU) states. In the previous year UK was also, recognised as a geographical segment prior to the closure of its operations.
3. Sales revenue
The Group The Company
2012 2011 2012 2011
EUR 000 EUR 000 EUR 000 EUR 000
Sales of plastic products 15.148 23.009 - -
Sales of vehicles 5.697 3.303 - -
Fees for services rendered 7.950 7.617 - -
------ ------ ------ ------
28.795 33.929 - -
------ ------ ------ ------
4. Other revenue
The Group The Company
2012 2011 2012 2011
EUR 000 EUR 000 EUR 000 EUR 000
Government grants 101 190 - -
Recharging of transportation
costs 459 100 - -
Gain from disposal
of tangible assets 520 242 - -
Other revenues 74 249 630 1.131
------ ------ ------ ------
1.154 781 630 1.131
------ ------ ------ ------
5. Persons employed and related costs
The Group The Company
31 December 31 December 31 December 31 December
2012 2011 2012 2011
Number Number Number Number
Number of persons employed
(at year end) 277 290 3 3
------ ------ ------ ------
2012 2011 2012 2011
EUR000 EUR000 EUR000 EUR000
Salaries and wages (4.940) (5.284) (33) (36)
Social insurance costs (1.360) (1.437) (3) (3)
Other personnel costs (86) (85) - -
Employment termination
benefits (164) (146) - -
Payroll costs capitalised - 220 - -
------ ------ ------ ------
(6.550) (6.732) (36) (39)
------ ------ ------ ------
Average cost per employee
(in Euro) 23.646 23.213 12.000 13.000
------ ------ ------ ------
6. Analysis of depreciation charges
The Group The Company
2012 2011 2012 2011
EUR000 EUR000 EUR000 EUR000
Buildings and building
installations (729) (682) - -
Plant and machinery (3.188) (3.025) - -
Vehicles (443) (605) - -
Furniture and other
equipment (286) (270) - -
Computer software (328) (139) - -
Depreciation charges
recapitalized - 3 - -
------ ------ ------ ------
(4.974) (4.718) - -
------ ------ ------ ------
7. Other operating expenses
The Group The Company
2012 2011 2012 2011
EUR000 EUR000 EUR000 EUR000
Transportation expenses (1.479) (2.740) - -
Electricity (758) (1.041) - -
Telecommunication (133) (170) (2) (2)
Rental expenses (188) (257) (6) -
Exhibition and advertising
expenses (58) (151) - -
Travel expenses (403) (331) - -
Repair and maintenance (742) (1.405) -
Insurance expenses (222) (281) (11) (11)
Other taxes (303) (280) (1) -
Work subcontracted
to third parties (3.583) (3.385) (287) (433)
Other (1.355) (2.005) (1) (3)
Capitalised costs - 21 - -
------ ------ ------ ------
Total (9.224) (12.025) (308) (449)
------ ------ ------ ------
8. Cost of financing
The Group The Company
2012 2011 2012 2011
EUR000 EUR000 EUR000 EUR000
Interest charges
on bank loans (4.942) (4.722) (5) (2)
Finance lease charges (22) (13) - -
Cost of letters of
credit, letters of
guarantee and similar
instruments (272) (293) - -
Release of exchange
difference in profit
& loss - (1.253) - -
------ ------ ------ ------
(5.236) (6.281) (5) (2)
Interest income 31 18 - -
------ ------ ------ ------
Net financing costs (5.205) (6.263) (5) (2)
------ ------ ------ ------
9. Income taxes
The Group The Company
2012 2011 2012 2011
EUR000 EUR000 EUR000 EUR000
(Loss) / Profit,
before taxes, per
the statement of
earnings (12.405) (18.053) 208 532
------ ------ ------ ------
Income taxes, at
the nominal tax rate (4.081) (3.292) 21 53
Taxes on permanent
differences between
accounting and taxable
profits 1.813 909 - -
Effect of tax losses
carried forward (14) 2.044 - -
Additional tax - - 2 5
Net expense/(income)
not tax allowed/
(subject to tax) 22 (21) - -
Tax relief (Charge)
due to the reduction
(increase) of the
tax rate - 53 - -
Tax losses previous
years for which income
tax assets was recognized 4.145 2.686 - -
------ ------ ------ ------
Total tax charge 1.885 2.379 23 58
------ ------ ------ ------
Current tax charge 125 221 23 58
Deferred tax charge 1.760 2.158 - -
------ ------ ------ ------
Total tax charge 1.885 2.379 23 58
------ ------ ------ ------
The fact that, in certain cases, revenues and expenses are recognised for accounting purposes in a different period than the period in which these income items are taxed or expense items provide tax relief requires the recognition of deferred tax assets and liabilities.
The nominal tax rate applicable to Helesi PLC is 10%. However, the dividends payable to physical persons, who are tax residents of Cyprus, are subject to a withholding tax of 20% for the tax years 2012 and 2013 (in 2011 the rate was 15% up to 30 August 2011 and 17% thereafter until the end of the year).
According to Greek Corporate Tax Law, corporate tax is 20%, but in case of dividend distribution, an additional 25% tax is calculated. However, for the fiscal year 2013 corporate tax rates will change to 26% for profits and 10% for dividend distribution.
The tax relief that is associated with profits that are not taxed or are taxed at reduced rates primarily emanates from the profits derived from the Greek activities of the Helesi PLC Group. In Greece, the taxation of certain forms of income may be deferred indefinitely, provided that the said income is transferred to reserves and its distribution is, likewise, deferred.
The tax returns of the entities forming part of the Helesi PLC Group, for certain years, have not been examined by the tax authorities as yet. As a consequence, it is possible that additional taxes may be assessed at the time of such an examination. These financial statements reflect a provision in respect of this contingent liability, based on management's best estimate of the amount that is likely to be assessed.
Segmental analysis
.The Group 2012
Environmental Environmental Helesi PLC
products services Group
EUR000 EUR000 EUR000
Third-party sales 20.844 7.951 28.795
Other third-party
revenues 1.062 92 1.154
------ ------ ------
Total revenues 21.906 8.043 29.949
Cost of Sales (13.675) (422) (14.097)
Personnel-related
costs (3.641) (2.909) (6.550)
Directors' emoluments (73) - (73)
Depreciation charges (4.477) (497) (4.974)
Other operating expenses (7.213) (4.242) (11.455)
------ ------ ------
Segmental loss, before
finance charges (7.173) (27) (7.200)
Cost of financing (3.945) (1.260) (5.205)
------ ------ ------
Segmental loss, before
taxes (11.118) (1.287) (12.405)
Income taxes (1.885) - (1.885)
------ ------ ------
Net loss, after taxes (13.003) (1.287) (14.290)
------ ------ ------
The Group 2011
Environmental Environmental Helesi
products services PLC Group
EUR000 EUR000 EUR000
Third-party sales 26.312 7.617 33.929
Other third-party
revenues 781 - 781
------ ------ ------
Total revenues 27.093 7.617 34.710
Cost of Sales (17.162) (454) (17.616)
Personnel-related
costs (3.657) (3.075) (6.732)
Directors' emoluments (109) - (109)
Depreciation charges (9.052) (566) (9.618)
Other operating expenses (8.586) (3.839) (12.425)
------ ------ ------
Segmental profit,
before finance charges (11.473) (317) (11.790)
Cost of financing (5.346) (917) (6.263)
------ ------ ------
Segmental profit,
before taxes (16.819) (1.234) (18.053)
Income taxes (2.444) 65 (2.379)
------ ------ ------
Net profit, after
taxes (19.263) (1.169) (20.432)
------ ------ ------
The Group 31 December 2012
Environmental Environmental Helesi PLC
products services Group
EUR000 EUR000 EUR000
Total assets 104.642 7.008 111.650
Total liabilities
to third parties (91.464) (4.550) (96.014)
------ ------ ------
Net assets 13.178 2.458 15.636
------ ------ ------
The Group 31 December 2011
Environmental Environmental Helesi PLC
products services Group
EUR000 EUR000 EUR000
Total assets 117.408 8.841 126.249
Total liabilities
to third parties (90.907) (5.090) (95.997)
------ ------ ------
Net assets 26.501 3.751 30.252
------ ------ ------
The Helesi PLC Group now operates two production units - one in Greece and one in Italy, under the corporate umbrellas of Helesi SA and Helesi Italia srl, respectively. The third production unit in UK ceased production in March 2010. The financial results and the financial position of these operations are set out below.
The Group 2012
Greece Italy Elimination Helesi
of intersegment PLC Group
transactions
Third-party sales 25.166 3.629 - 28.795
Intersegment sales 2.289 1.252 (3.541) -
------ ------ ------ ------
Total sales 27.455 4.881 (3.541) 28.795
Other third-party
revenues 1.127 27 - 1.154
Intersegment other
sales 2.500 (2.500) -
------ ------ ------ ------
Total revenues 28.582 7.408 (6.041) 29.949
Cost of Sales (10.544) (3.553) - (14.097)
Cost of intersegment
use of materials (651) (22) 673 -
Personnel-related
costs (5.500) (1.050) - (6.550)
Directors' emoluments (73) - - (73)
Depreciation charges (4.363) (611) - (4.974)
Other operating expenses (9.632) (1.823) - (11.455)
------ ------ ------ ------
(2.181) 349 (5.368) (7.200)
Elimination of intercompany
receivables/liabilities (2.500) - 2.500 -
------ ------ ------ ------
Segmental loss, before
finance charges (4.681) 349 (2.868) (7.200)
Cost of financing (5.037) (168) - (5.205)
------ ------ ------ ------
Segmental loss, before
taxes (9.718) 181 (2.868) (12.405)
Income taxes (1.885) - - (1.885)
------ ------ ------ ------
(11.603) 181 (2.868) (14.290)
Net loss, after taxes ------ ------ ------ ------
The Group 2011
Greece Italy Elimination of Helesi
intersegment PLC Group
transactions
EUR000 EUR000 EUR000 EUR000
Third-party sales 27,211 6,718 - 33,929
Intersegment sales 4,312 550 (4,862) -
------ ------ ------ ------
Total sales 31,523 7,268 (4,862) 33,929
Other third-party
revenues 678 103 - 781
------ ------ ------ ------
Total revenues 32,201 7.371 (4.862) 34,710
Cost of Sales (12,396) (5,220) - (17,616)
Cost of intersegment
use of materials (3,881) (495) 4,376 -
Personnel-related
costs (5,858) (874) - (6,732)
Directors' emoluments (109) - - (109)
Depreciation charges (9,011) (607) - (9,618)
Other operating expenses (9,957) (2,468) (12,425)
------ ------ ------ ------
(9.011) (2.293) - -
Elimination of intercompany
receivables/liabilities (2,400) 2.400 - -
------ ------ ------ ------
Segmental profit,
before finance charges (11,411) 107 (486) (11,790)
Cost of financing (6,068) (195) - (6,263)
------ ------ ------ ------
Segmental profit,
before taxes (17,479) (88) (486) (18,053)
Elimination of intersegmental
profits (431) (55) 486 -
------ ------ ------ ------
Loss, before taxes (17.910) (143) - (18.053)
Income taxes (2.108) (271) - (2.379)
------ ------ ------ ------
Net profit, after
taxes (20.018) (414) - (20.432)
------ ------ ------ ------
The Group 31 December 2012
Greece Italy Elimination Helesi
of intersegment PLC Group
balances
EUR000 EUR000 EUR000 EUR000
Intersegment investments
Intersegment receivables/payables 2.992 (2.992) - -
Total other assets 94.880 16.770 - 111.650
Total liabilities
to third parties (88.019) (7.994) - (96.013)
------ ------ ------ ------
Net assets 9.853 5.784 - 15.637
------ ------ ------ ------
The Group 31 December 2011
Greece Italy Elimination of Helesi
intersegment PLC Group
balances
EUR000 EUR000 EUR000 EUR000
Intersegment investments 5.046 (5.046) -
Intersegment receivables/payables 5.935 (5.935) - -
Toatal other assets 108.541 17.708 - 126.249
Total liabilities
to third parties (89.827) (6.170) - (95.997)
------ ------ ------ ------
Net assets 29.695 5.603 (5.046) 30.252
------ ------ ------ ------
The third-party sales and the value of the related trade receivables outstanding at each year end, on the basis of the location at which the customers operate (inclusive of the balances that are doubtful of collection and have been provided for), is analysed as follows:
Greece Italy Other European Other Helesi
Union states PLC
Group
(non-EU)
The Group states
EUR000 EUR000 EUR000 EUR000 EUR000
2012
Value of sales 17.093 3.654 4.467 3.581 28.795
Trade receivables,
at year end 11.758 1.027 980 155 13.920
------ ------ ------ ------ ------
2011
Value of sales 14.328 6.860 9.345 3.396 33.929
------ ------ ------ ------ ------
Trade receivables,
at year end 14.936 4.711 3.914 294 23.855
------ ------ ------ ------ ------
10. Interest in joint ventures
In the year 2007, Helesi SA acquired the 70% of the joint venture in Cyprus with the purpose of construction and operation of two transhipment stations in Cyprus. In the beginning of 2008, the company purchased the other 30% for an amount of 0,7 million. By the 31st of December 2012 the generated revenues amounted EUR0.647 million (2011: EUR1.366 million) with the gross profit totalling EUR0.515 million (2011: EUR1.143 million). Total assets amounted to EUR2.6 million including deferred income from Cyprus government amounting to EUR1.4 million. Total liabilities amounted to EUR2.6 million including bank loans amounting to EUR1.4 million.
Towards the end of 2012 the consortium ceased project execution due to a Government of Cyprus initiative, breaching contract terms. Since that time the consortium is negotiating with the Ministry of Interior of the Republic of Cyprus to reach an amicable settlement for damages.
During 2009, Helesi SA and Mesogeios SA formed JV Perivallontiki - Mesogeios with purpose the waste management of West Macedonia perfecture. Helesi's participation is 60%. Revenues for the current financial year are EUR0.578 million (2011: EUR1.229 million) and net loss after tax was EUR4 thousand (2011: EUR2 thousand profit). The JV has been proportionally consolidated in the group statements. The operations of the JV have been completed within 2012.
During 2012 the Helesi SA in co-operation with Mesogeios SA and W.A.T.T. SA launched the consortium "Perivallontiki-Mesogeios E.S. S.A. W.A.T.T." aiming to manage waste for the West Macedonia prefecture. Helesi SA participated with a 50% share. In 2012 the consortium's income reached EUR0.648 million incurring a EUR10 thousand loss after tax.
Additionally, in 2012 the Helesi SA collaborating with Mesogeios SA launched the consortium "Perivallontiki-Mesogeios E.S." targeting waste management projects for the West Macedonia prefecture. Helesi SA share is 60%. The project had not started by the end of 2012.
11. Tangible fixed assets
Land Buildings Plant Vehicles Furniture Assets Total
and building and machinery and other under
installations equipment construction
The Group or installation
EUR000 EUR000 EUR000 EUR000 EUR000 EUR000 EUR000
At cost or valuation
As at 31 December
2010 2.609 23.878 57.139 5.054 1.486 5.493 95.659
------ ------ ------ ------ ------ ------ ------
Effect of currency
translation - - 5 - - - 5
Additions 2011 - 1.215 2.735 62 223 (2.785) 1.450
Disposals 2011 - - (668) (427) (15) - (1.110)
Transfers - - - - 4 - 4
------ ------ ------ ------ ------ ------ ------
As at 31 December
2011 2.609 25.093 59.211 4.689 1.698 2.708 96.008
Additions 2012 - 412 749 126 52 911 2.251
Disposals 2012 - (31) (366) (341) (19) - (757)
Transfers - - (14) - - - (14)
------ ------ ------ ------ ------ ------ ------
As at 31 December
2012 2.609 25.474 59.581 4.474 1.731 3.620 97.489
------ ------ ------ ------ ------ ------ ------
Accumulated depreciation
As at 31 December
2010 - (2.102) (9.020) (3.028) (656) - (14.806)
------ ------ ------ ------ ------ ------ ------
Effect of currency
translation - - (1) - - - (1)
Depreciation
charges 2011 - (682) (3.025) (605) (270) - (4.582)
Disposals 2011 187 261 2 - 450
------ ------ ------ ------ ------ ------ ------
As at 31 December
2011 - (2.784) (11.859) (3.372) (924) - (18.939)
Effect of currency
translation
Depreciation
charges 2012 - (729) (3.189) (443) (289) - (4.649)
Disposals 2012 109 164 6 278
Transfers - - (27) - - (27)
------ ------ ------ ------ ------ ------ ------
- (3.513) (14.967) (3.653) (1.204) - (23.337)
As at 31 December
2012
------ ------ ------ ------ ------ ------ ------
Net book values
As at 31 December
2012 2.609 21.961 44.614 821 527 3.620 74.152
------ ------ ------ ------ ------ ------ ------
As at 31 December
2011 2.609 22.309 47.352 1.317 774 2.708 77.069
------ ------ ------ ------ ------ ------ ------
The cost of the acquisition of tangible fixed assets is reported net of the grants received for partly financing their purchase. The full purchase cost of these assets and the related grants that have been utilised to partially finance their acquisition is reflected in the following table:
The Group Full purchase Investment Reported
cost grants acquisition
costs
2012 EUR000 EUR000 EUR000
Land 2.609 - 2.609
Buildings and building
installations 34.177 (8.703) 25.474
Plant and machinery 101.075 (41.494) 59.581
Vehicles 5.471 (997) 4.474
Furniture and other
equipment 2.147 (416) 1.731
Assets under construction 3.620 - 3.620
------ ------ ------
149.099 (51.610) 97.489
------ ------ ------
2011
Land 2.609 - 2.609
Buildings and building
installations 33.796 (8.703) 25.093
Plant and machinery 100.705 (41.494) 59.211
Vehicles 5.686 (997) 4.689
Furniture and other
equipment 2.114 (416) 1.698
Assets under construction 2.709 - 2.708
------ ------ ------
147.619 (51.610) 96.008
------ ------ ------
In 2012, the development costs that have satisfied the capitalisation criteria set, amounted to EUR0, while for 2011 was EUR233 thousand. These costs comprised (in EUR'000):
2012 2011
Personnel related costs - 220
Miscellaneous other expenses - 3
------ ------
- 223
------ ------
On the31(st) of December 2012, there were mortgages and other charges on the property of the Helesi PLC Group, as a form of security for the financing facilities placed at the disposal of the Helesi PLC Group which amounted, in aggregate, to EUR63.8 million (2011: EUR61 million).
12. Intangible fixed assets
Computer Goodwill Total
The Group software
EUR000 EUR000 EUR000
At cost or valuation
As at 31st December
2010 1.706 12.559 14.265
Additions 2011 322 - 322
Transfers (4) - (4)
------ ------ ------
As at 31st December
2011 2.024 12.559 14.583
------ ------ ------
Additions 2012 39 - 39
------ ------ ------
As at 31st December
2012 2.063 12.559 14.622
------ ------ ------
Accumulated depreciation
As at 31st December
2010 (292) - (292)
------ ------ ------
As at 1st January
2011 (292) - (292)
Depreciation
charges 2011 (139) (139)
Impairment goodwill - (4.900) (4.900)
------ ------ ------
As at 31 December
2011 (431) (4.900) (5.331)
------ ------ ------
As of January
1(st) 2012
Depreciation
charges 2012 (328) - (328)
Impairment goodwill (400) (400)
------ ------ ------
As at 31 December
2012 (760) (5.300) (6.060)
------ ------ ------
Net book values
As at 31 December
2012 1.303 7.259 8.562
------ ------ ------
As at 31 December
2011 1.593 7.659 9.252
------ ------ ------
During 2011 one of the Group operating units, the environmental products unit, experienced a pause in vehicles new tenders. This had an adverse impact on the projected value in use of the operation concerned and consequently resulted in impairment to goodwill of EUR4.9 million. In 2012 an additional goodwill impairment of EUR0.4 million was incurred. The carrying value of EUR12.5 million of goodwill which mainly arose on the acquisition of the vehicles division decreased from EUR7.7 million in 2011, to EUR7.3 million in 2012 and will continue to be assessed annually for impairment based on management's forecasts to perpetuity. The key assumptions on which management based its cash flow projections are:
Helesi's management reviewed a five year earnings forecast of the vehicles distribution division based on past experience, the Greek market uncertainty and the increased pressure on the already strained Greek public sector. The management's approach is based on the assumption that revenue contribution from vehicles operations will be reduced since only EU funded projects are attractive for the company, and moreover because it is uncertain if these will be released at a pace that will satisfy market needs.
13. Other long-term assets
Other long-term assets primarily comprise guarantee deposits given in relation to operating leases.
14. Inventories
The Group The Company
31 December 31 December 31 December 31 December
2012 2011 2012 2011
EUR000 EUR000 EUR000 EUR000
Vehicles 2.080 677 - -
Manufactured
goods 807 2.304 - -
Raw and packaging
materials 1.435 1.892 - -
------ ------ ------ ------
4.322 4.873 - -
------ ------ ------ ------
15. Trade and other receivables
The Group The Company
31 December 31 December 31 December 31 December
2012 2011 2012 2011
EUR000 EUR000 EUR000 EUR000
Trade receivables 19.938 25.660 - -
Receivables doubtful
of collection (6.018) (1.805) - -
------ ------ ------ ------
13.920 23.855 - -
Advances to suppliers 2.577 2.741 2 13
State receivables
(including VAT,grants
and refundable
taxes) 5.500 4.455 31 84
Blocked deposit
accounts 30 30 - -
Other receivables 2.054 2.695 160 102
------ ------ ------ ------
24.081 33.776 193 199
------ ------ ------ ------
The provision for bad debts was increased by EUR4.213 thousand (2011: EUR812 thousand). The past due receivables that have not been impaired amounted to EUR7 million and are past due approximately 3 months from the contractual maturity. Management considers that these receivables will be collected in full.
The ageing analysis of trade receivables is as follows:
The Group The Company
31December 31December 31 December 31 December
2012 2011 2012 2011
Period
Up to 6 months 7.019 10.390 193 199
6 to 9 months 337 1.152 - -
9 to 12 months 506 817 - -
Over 12 months 6.058 11.496 ------ ------
----- ------
13.920 23.855 193 199
------ ------ ------ ------
17. Cash and cash equivalents
Cash and cash equivalents comprise notes held by the Helesi PLC Group as well as bank deposits available on demand.
18. Borrowings
The loans contracted by the Helesi PLC Grouphave been advanced by Greek and Italian banks and are denominated in Euros. The amounts that are repayable within one year of the balance sheet date are reported as short-term liabilities while the amounts that are repayable at a subsequent stage, are reported as long-term obligations. The loans of the Helesi PLC Groupare analysed as follows:
The Group The Company
31 December 31 December 31 December 31 December
2012 2011 2012 2011
EUR000 EUR000 EUR000 EUR000
Short-term borrowings
Bank loans (49.852) (27.439) - -
Short-term portion
of long-term loans (1.150) (2.042) - -
Finance lease obligations - (150) - -
------ ------ ------ ------
(51.002) (29.631) - -
------ ------ ------ ------
Long-term borrowings
Debenture loan (14.270) (36.648) - -
Finance lease obligations (422) (3) - -
------ ------ ------ ------
(14.692) (36.651) - -
------ ------ ------ ------
Depending on the date of maturity, long-term borrowings are analysed as follows:
The Group The Company
31 December 31 December 31 December 31 December
2012 2011 2012 2011
EUR000 EUR000 EUR000 EUR000
Long-term borrowing
repayable in:
1 to 2 years (3.677) (6.819) - -
2 to 5 years (10.575) (21.274) - -
Over 5 years (440) (8.558) - -
------ ------ ------ ------
(14.692) (36.651) - -
------ ------ ------ ------
Banks continued to pass on to Helesi their increased cost of borrowing. Consequently, the weighted average cost of borrowing for 2012increased to around 8% (2011: 7.3%). On the other hand, the Group is undergoing a debt restructuring process in collaboration with its creditors. As a result, the cost of borrowing is expected to fall from 2014 and onwards to less than 6% (5.5%).
The Helesi Group was in breach of its loan covenants for 2012. Due to non compliance with loan covenants and the fact that negotiations with the main banks had not been finalized by the end of the year, almost all of the long term loans were classified into the short term borrowings of the Group.
The group's main debt exposure on the 31(st) of December 2012 to various financial institutions is as follows:
Greece
-- EUR23.7 million to Piraeus Bank (Piraeus 14,1- Cyprus 5,6 - Hellenic 1,6 - General 2,5) -- EUR13.7 million to Alpha Bank -- EUR 6.6 million to RBS -- EUR 6.5 million to EFG Eurobank -- EUR 5,9 million to National Bank of Greece( National 1,2 - FBB 4,8) -- EUR 2.26 million to HSBC -- EUR1.0 million to Panellinia Bank
Cyprus
-- EUR1.4 million to EFG Eurobank -- EUR 0,3 million to Laiki
Italy
-- EUR 3.4 million to Unicredit -- EUR 0.3 million to Carisbo
In 2012 the Group provided a pledge on its fixed assets in the amount of EUR63.8 million (2011: EUR61 million) as form of collateral. Currently the group is negotiating a new viable schedule of payments with its creditors.
19. Financing risks
Currency risk
The Helesi PLC Group is not exposed to foreign currency risk.
Credit risks
The Helesi PLC Group has a clearly defined policy, which is followed consistently. The exposure to credit risks is monitored and assessed on a regular basis, thus ensuring that the credit given does not exceed the authorised credit limits of each customer. On the 31(st) of December 2012 no receivables were secured by letters of credit or other forms of guarantee. Nonetheless, on the 31(st) of December 2011 receivables, amounting to EUR825 thousand and EUR 257 thousand, respectively, were secured by letters of credit, letters of guarantee, state guarantees and distributor guarantees.
The maximum exposure of the Helesi PLC Groupto credit risk, assuming that all customers will fail to honour their obligations, is the amount reported under receivables, less the aforementioned amounts of the guarantees secured.
Interest rate risks
Most of the interest-bearing receivables and payables of the Helesi PLC Group are linked to floating interest rates that are adjusted in line with interest-rate market fluctuations. Recent developments in ECB interest rates provided a reduction of the total cost of capital. The Helesi PLC Group does not use financial derivatives.
Liquidity risk
Liquidity risk arises from the differences in the timing of the maturity of payables and receivables. The liquidity risk is increased due to the high bank borrowing of the Group and the delay in the collection of receivables.
Given the debt restructuring process the Group is undergoing, it would be difficult to include accurate cash-flow and debt maturity projections. Two banks have already approved debt restructuring and the remaining negotiations show promising prospects.
20. Trade and other payables
The Group The Company
31 December 31 December 31 December 31 December
2012 2011 2012 2011
EUR000 EUR000 EUR000 EUR000
Trade creditors (18.888) (20.800) (770) (199)
Accrued expenses (767) (991) (129) -
Social security contributions
payable (2.662) (1.618) (3) (2)
Payable salaries (287) (235) (4) (361)
Liabilities due to
related parties - - - (750)
Taxes (other than
income tax) payable (621) (296) (10) (21)
Other payables (918) (1.509) (378) (112)
------ ------ ------ ------
(24.143) (25.449) (1.294) (1.445)
------ ------ ------ ------
Long term portion (1.575) (1.258) - -
Short term portion (22.568) (24.191) (1.294) (1.445)
------ ------ ------ ------
(24.143) (25.449) (1.294) (1.445)
------ ------ ------ ------
21. Employee benefits
The obligation of the Helesi PLC Group towards its employees based in Greece, to provide them with certain future benefits depending on their length of service is quantified and reported on the basis of the accrued entitlement, as at the date of the balance sheet, that is anticipated to be paid, discounted to its present value by reference to the anticipated time of payment. The discount rate used is broadly equal to the yield of Greek Government bonds. The movement of the account of employee benefits, in the years 2012 and 2011 was as follows:
The Group
EUR000
Provision as at 31 December 2010 (150)
Charge for the year in respect of employment
termination benefits (183)
Amounts actually disbursed 82
------
Provision as at 31 December 2011 (251)
------
Charge for the year in respect of employment
termination benefits (145)
Amounts actually disbursed 15
------
Provision as at 31 December 2012 (381)
------
22. Government grants
Government grants relate to Helesi SA and Helesi Italia srl and have been granted in relation to investments in fixed tangible assets, effected in the period from 2000 to 2010 or currently under construction. The reported value of the acquired fixed tangible assets has been reduced by the grants received and receivable for the purposes of partially financing their acquisition cost. Depending on the provisions of the law, under which the grants were advanced, certain restrictions apply as to the transfer of the ownership of the subsidised assets and to changes of the legal status of the entity to which the grants were advanced. The inspections carried out by the supervisory authorities, to date, have not disclosed cases of non-compliance with these restrictions that had not been approved, in advance.
The amount of government grants received and receivable, for the purposes of financing the purchase of fixed assets, is reported under the note covering fixed tangible assets. The resultant reduction of the depreciation charges that would have, otherwise, burdened the operations of the Helesi PLC Group is quantified in the following table:
The Group EUR000
Effective reduction of the value of
tangible fixed assets, as at 31 December
2010 (44.462)
Effective reduction of the depreciation
charges, in 2011 1.706
-----
Effective reduction of the value of
tangible fixed assets, as at 31 December
2011 (42.756)
------
Effective reduction of the value of tangible fixed assets,
as at 31 December 2011 (42.756)
Effective reduction of the depreciation
charges, in 2012 1.661
-----
Effective reduction of the value of
tangible fixed assets, as at 31 December
2012 (41.095)
------
23. Share capital and share premium
Company's authorised share capital is divided into 60.000.000 shares (2011: 60.000.000 shares) of a nominal value of EUR0.10 each.
Company's issued share capital is divided into 39,805,754 shares (2011:39.805.754 shares) of a nominal value of EUR0.10 each.
By the decision of the General Shareholders Meeting, dated 7 April 2009 and the Extraordinary General Shareholders Meeting dated 22 June 2009 the share capital of Helesi PLC increased by EUR703,125 through the issuance of 7,031,249 new ordinary shares at a price of 0,64 Euro per share. The total of both increases was contributed by the company TECMEC SA. Costs of issuance amount to EUR105,000 have been deducted from the share premium reserve.
The share premium generated on the exchange of the Helesi SA shares for Helesi PLC shares of EUR15,753 thousand plus the share premium raised on the admission to AIM of EUR16,093 thousand has been reduced by the AIM admission costs of EUR2,301 thousand less the tax relief generated by these costs of EUR405 thousand, i.e. by a net amount of EUR1,896 thousand.
In September 2006, a Share Option Plan was introduced, entailing the granting of options to acquire shares of Helesi PLC, at specified exercise prices and within a specified period of time exceeding three but not exceeding seven years, to directors and key employees of the Group. The options, which may be granted under this Plan, may cover a maximum of 10% of the issued and outstanding shares of Helesi PLC. The operation of this Plan could have a dilutive effect on the issued and outstanding shares of Helesi PLC. The dilutive effect is a function of (a) the number of shares that may be acquired through the exercise of such rights, (b) the exercise price at which the options are granted, (c) the market price of the shares thus acquired and (d) the overall market capitalisation of the Company.
618,100 share options have been granted, under this Plan, to certain directors and key-managers of the Group. These options, which represent 1.5% of the issued and outstanding shares of Helesi PLC, mature over a period of three years and have an exercise price that is equal to the price at which the shares were listed on IPO (EUR1.71 per share). The exercise of the options is conditional on the attainment of certain overall financial targets of the Group.
According to the Register of shareholders of Helesi PLC, as at 31 December 2012 the shareholders holding shares of Helesi PLC exceeding 3% of the total number of issued and outstanding shares and the shareholders who serve the Helesi PLC Groupas members of its management, were the following:
Athanasios Andrianopoulos 15,73% Christina Thanasoulia (wife of A. Andrianopoulos) 11,97% Tecmec SA 22,69% National Bank of Greece 8,81% Emmanouil Anyfantakis 5,90% Lazard Asset Management 3,87% Dimitrios Karaiskos 3,80% Hansa Capital 3,79% ----------------------------- -------
Certain other members of Helesi PLC Groupmanagement hold shares in Helesi PLC but in no case do such holdings exceed 1%.
24. Reserves
The corporate restructuring process has, in effect, rendered "non-distributable" all the pre-restructuring reserves and retained earnings of the Group. A substantial part of the pre-structuring reserves of Helesi SAwere, in any event, non-distributable either because they had, by law, been taken to capital reserves or because they had been allocated to untaxed reserves for the purposes of deferring the payment of the taxes (that would have been, otherwise, payable) on the profits so transferred.
The post-restructuring profits that have been taken to reserves, mainly by the Greek entities forming part of the Helesi Group, either by the operation of law or on the basis of provisions of Greek tax legislation, which permit the indefinite deferral of the incidence of taxation on otherwise taxable profits (as a form of an investment incentive, on condition that the said profits are re-invested in the business) are reported under "capital reserves". The tax thus deferred is precipitated by the disposal of the assets acquired, within a period of 5 years of their acquisition, or whenever the untaxed reserves are distributed. The tax liability that will precipitate on the distribution of these reserves, estimated, as at 31 December 2010, at EUR 4.3 million, shall be recognised as and when a decision to distribute these reserves, or part thereof, is taken.
25. Earnings per share and proposed dividends
Earnings per share are calculated by dividing the profit attributable to the shareholders of Helesi PLC by the weighted average number of issued and outstanding shares in the accounting period covered by the financial statements.
Basic EPS Diluted EPS
------------------------ ------------------------
The Group 31 December 31 December 31 December 31 December
2012 2011 2012 2011
EUR000 EUR000 EUR000 EUR000
Net profit attributable
to the shareholders
(in Euro thousand) (14.290) (20.432) (14.290) (20.432)
Weighted average
number of issued
shares (in thousands) 39.806 39.806 39.806 39.806
------ ------ ------ ------
Earnings per share
(in EUR) (0,36) (0,51) (0,36) (0,51)
------ ------ ------ ------
For 2012 the Board of Directors has decided not to propose dividend, taking into account the financial environment.
26. Deferred tax assets and liabilities
Deferred tax assets and liabilities are quantified at the level of each separate entity forming part of the Helesi PLC Groupand, to the extent that deferred tax assets and deferred tax liabilities arise, they are off set against each other. The deferred tax assets and liabilities emanate from the following causes:
The Group The Company
2012 2011 2012 2011
EUR000 EUR000 EUR000 EUR000
Tax impact of the
differentiation of
the accounting and
the tax depreciation
rates (6.817) (5.154) - -
Providing for doubtful
receivables, while
tax relief entails
a write-off 1.103 1.401 - -
Reducing the value
of stocks to eliminate
the effect of tax
depreciation 92 41 - -
Tax relief from taxable
losses 229 79 -
Miscellaneous timing
differences between
accounting profits
and taxable income 324 324 - -
------ ------ ------ ------
Income taxes, which
will burden future
accounting periods (5.069) (3.309) - -
------ ------ ------ ------
27. Related party transactions and balances
The transactions of the Helesi PLC Group, in the year 2012 and 2011, with and the receivables from and payables to related parties, as at 31 December 2012 and 2011, are analysed as follows:
The Group Purchases Receivable Payable
Sales to from from to
EUR000 EUR000 EUR000 EUR000
2012
TECMEC AE 115 1.326 3.056 -
2011
TECMEC AE 133 2.183 2.152 -
The compensation of the members of the Board of Directors and certain other key management personnel executives, in the years 2012 and 2011, was as follows:
The Group The Company
2012 2011 2012 2011
EUR000 EUR000 EUR000 EUR000
Athanassios Andrianopoulos,
CEO (18) (18) (18) (18)
Christina Thanassoulia
(Deputy CEO) (18) (18) (18) (18)
Apostolos Binomakis-
Non executive member - (17) - (17)
George Papangelis
- Non executive
member (12) (5) (12) (5)
Elena Paraskeva
- Non executive
member (13) (25) (13) (25)
Ioannis Riskakis
- Executive member - (26) - (26)
Dimitrios Kainaros
- Non executive
member (12) - (12) -
------ ------ ------ ------
(73) (109) (73) (109)
------ ------ ------ ------
28. Commitments and contingencies.
The construction of one of the two waste transfer stations in Cyprus has not proceeded according to the contract with the Cyprus government as the local community of the original site strongly opposes its construction. In addition during the year, the government terminated the waste management project contracted with Helesi. In accordance with the contract, the group is entitled to significant compensation for delays, non-performance and/or termination based upon a number of criteria. The Group is presently negotiating the level of compensation that will be finally paid with the appropriate authorities, but no provision has been made in these financial statements as the final figure cannot be determined with any degree of accuracy at the present time.
The Helesi PLC Group is contractually committed under operating leases for the leasing of office space and warehouses, as follows:
Within Within
1 year 2-5 years
EUR000 EUR000
Office premises 17 17
------ ------
17 17
------ ------
The banks cooperating with the Group have provided guarantees in favour of third parties amounting to EUR EUR6.9 million (2011: EUR9.1 million).
Except as disclosed in notes 12 and 18 the Group had no other contingencies and commitments at 31 December 2012.
29. Audit fee
The audit fees for the whole of the Helesi Group, for the year ended 31 December 2012 amounted to EUR54.5 thousand (2011: EUR100 thousand). The audit fees charged by Group auditors for the year ended 31 December 2012 amounted to EUR31 thousand (2011: EUR28 thousand). There were no other fees charged by the Group's auditors.
30. Post balance sheet events
Helesi Italia ceased production operations in 2013. The group's management is in negotiations to divest its investment in Helesi Italia either by disposing part of its operating unit or to dispose the assets of this subsidiary. As at 31 December 2012, the following amounts were included in the consolidated Financial Statements:
Statement of Comprehensive Income
Amount in thousand EUR
-- Turnover 3.629 -- Loss before tax (3.571)
-- Tax -
-- EBITDA (2.791)
Statement of Financial Position
-- Property Plant and Equipment 10,059 -- Total assets 14.120
-- Total liabilities (5.653)
Except as disclosed above and in note 11 and 18, there were no material events after the reporting period which have a bearing on the understanding of the financial statements.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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