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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 : 4069H
Helesi PLC
11 July 2012
11 July 2012
Helesi PLC
("Helesi", "the Company" or "the Group")
In the initial announcement of these results released this morning at 0858h (RNS number 3778H), there was a typographical error in the headline, which read 'Final results for the year to 31 December 2010'. These results are for the year to 31 December 2011. The corrected heading, and the unchanged announcement is below.
Final results for the year to 31 December 2011
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 2011.
CHAIRMAN'S STATEMENT
Greece being in deep recession for a fifth consecutive year, and the Group realizing losses for the second time, I would describe 2011 as the worst year in the Group's life cycle.
Whilst Greece seems to have avoided a Eurozone exit for the near term, the Group continues to operate in a volatile environment. The area of focus is to reposition operations to enable the Company to operate in an uncertain and rapidly changing environment.
Outlook
We expect 2012 to be a better year compared to 2011. The Greek Public sector is launching new Waste Management Projects, and collection of state receivables seems to be improving. However a lot of difficulties are ahead of us. Italy's economy shows signs of fatigue affecting our operations. We will continue to manage our cost base and our receivables to ensure our future prospects.
Dimitri Kainaros
Non-Executive Chairman
10 July 2012
CHIEF EXECUTIVE'S REVIEW OF OPERATIONS
The recession of the Euro area and the Greek market uncertainty in particular, affected Helesi's operations. The prolonged collection of receivables did not allow the reduction of our level of borrowings as planned. The year 2011 is characterized as a year of little and slow progress across all the markets in which Helesi operates. Liquidity problems arose in Greece, Italy and Cyprus. Activity has slowed down across the market place.
Results
As a result of sluggish activity, Group sales revenue decreased by 32% in 2011 to EUR33.9 million (2010: EUR50.1 million). A contribution in sales from the Greek market was not present throughout the whole year. The first signs of Greek market recovery appeared in the last two months of 2011, with the release of new waste management projects, and waste collection vehicles supplies after almost 18 months of delay.
EBITDA of 2010 was eliminated in 2011, resulting in losses of EUR2.1 million (2010: EUR2.7 million profit). The operating costs in combination with the EUR4.9 million impairment cost of goodwill created a total loss of EUR20.4 million (2010: loss EUR5.1 million).
Dividend
No dividend will be paid.
Operations
The reduced activity across all regions, the lack of new sizable projects, and restraints in working capital changed Helesi's sales mix. In 2011, revenues were split 67%, 9%, 22% in terms of Plastic Products (principally bins and pallet boxes), Vehicles and Services. This compares with 56%, 29% and 15% in 2010 . The absence of sales in Vehicles is evident.
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 remained stable but both the Greek and Italian markets were weaker compared to previous years.
Waste Management Services
Services Revenue stood at the same levels as in 2010 at EUR7.6 million (2010: EUR7.3 million) as the first sizable long term projects were released from December 2011 onwards.
Waste Management Vehicles and Equipment
The contribution of vehicles sales revenue was absent in 2011. The Greek public sector totally stopped large scale projects, postponing new supplies over 18 months. Thus the significant vehicles income of approximately EUR35 million in 2008 - 2009, gave way to a modest EUR15 million revenue in 2010 and a weak EUR3.3 million for 2011.
Outlook
The new elections in Greece produced a pro-bailout government but the new Government faces large challenges ahead. If Greece manages to prolong the application period of the extremely unpopular austerity measures, and convinces its European partners to introduce growth measures together with the fiscal adjustment programme, Helesi's operations in Greece will recover faster than expected. As recession remains in Italy and Cyprus, Group subsidiaries will not be able to contribute to Group recovery in the near term.
The management's decision in 2011 to reposition Group operations towards Municipal Waste Collection benefiting from new legislation changes in the Greek Waste Services Sector seems to be the right direction. Helesi is participating in tenders of BOT projects for Waste Treatment Plants, joining forces with key market players which will prove to be "cash cow" projects in the future.
Moreover, managements' focus on international sales of plastic products mitigated the effect of the slowdown of the Greek and Italian markets. We will continue in the same direction, repositioning sales again if needed and minimizing our costs drastically if market recession deepens.
Sakis Andrianopoulos
Chief Executive Officer
10 July 2012
For further information please visit www.helesi.com or contact:
Helesi PLC +30 (0) 2299 0 82700 Sakis Andrianopoulos, Chief Executive Ioannis Tolias, Finance Director itolias@helesi.com Panmure Gordon (Nomad and broker) +44 (0) 20 7459 3600 Andrew Godber Tavistock Communications +44 (0) 20 7920 3150 Simon Hudson shudson@tavistock.co.uk
The full text of the Independent Auditor's Report to the Members of Helesi PLC as it appears in the Financial Statements of the Company for the year ended 31 December 2011 is set out below.
Report on the Financial Statements and the Consolidated Financial Statements
We have audited the accompanying separate financial statements and the consolidated financial statements of Helesi PLC (the "Company") and its subsidiaries ('the Group') on pages 12 to 46, which comprise the statement of financial position and the consolidated statement of financial position of the Company and the Group as at 31 December 2011, 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 separate 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 separate 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 separate 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 separate 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 separate 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 separate 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 separate 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 audit opinion.
Opinion
In our opinion, the separate 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 2011, and of its financial performance and their cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by the EU and the requirements of the Cyprus Companies Law, Cap. 113.
Emphasis of Matter
Without qualifying our opinion, we draw attention to note 2 to the consolidated financial statements which indicates that the Group's current liabilities exceed its current assets by EUR14.7 million. The Group also incurred a loss of EUR20.4 million for the year ended 31 December 2011. 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.
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:
Hot Features
Premium
-- We have obtained all the information and explanations
we considered necessary for the purposes of our audit.
-- In our opinion, proper books of account have been kept
by the Company.
-- The Company's financial statements and 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 consolidated financial statements give
the information required by the Cyprus Companies Law,
Cap. 113, in the manner so required.
-- In our opinion, the information given in the report
of the Board of Directors on pages 5-9 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 July 2012
Statement of comprehensive income The Group
Notes 31 December 31 December
2011 2010
EUR000 EUR000
Sales revenue 3 33.929 50.085
Other revenue 4 781 1.232
Changes in inventories of finished
goods (1.451) (1.296)
Cost of materials used (16.165) (25.882)
Personnel-related costs 5 (6.732) (8.216)
Directors' emoluments 27 (109) (287)
Depreciation charges 6 (4.718) (4.664)
Impairment of goodwill 6 (4.900) -
Other operating expenses 7 (12.425) (12.895)
Cost of financing, net 8 (6.263) (4.016)
------ ------
(Loss) / Profit before taxes (18.053) (5.939)
Income taxes 9 (2.379) 856
------ ------
(Loss) / Income of the year (20.432) (5.083)
------ ------
EBITDA (2.173) 2.740
Currency translation adjustments - 79
Total comprehensive (loss) / income (20.432) (5.161)
------ ------
Basic and diluted earnings per
share (in euro) 25 (0.51) (0.13)
------ ------
Statement of financial position
The Group
Notes 31 December 31 December
2011 2010
Assets
Non current assets EUR000 EUR000
Property Plant and Equipment 12 77.069 80.853
Goodwill 13 7.659 12.559
Other intangible assets 13 1.593 1.413
Other long-term assets 14 81 13
Investment in subsidiaries - -
------ ------
Total non current assets 86.402 94.838
------
Current assets
Inventories 15 4.873 8.851
Trade and other receivables 16 33.776 36.568
Cash and cash equivalents 17 1.198 1.002
------ ------
Total current assets 39.847 46.421
------ ------
Total assets 126.249 141.259
------ ------
Share capital 23 (3.981) (3.981)
Share premium 23 (33.641) (33.641)
Capital reserves 24 (9.981) (9.981)
Currency translation adjustments 24 - 1.029
Retained earnings 17.351 (3.081)
------ ------
Total equity (30.252) (49.655)
Non current liabilities
Long-term borrowings 18 (36.651) (29.613)
Current liabilities to supplier 20 (1.258) -
Employee benefits 21 (251) (150)
Deferred tax liabilities 26 (3.309) (1.152)
------ ------
Total non current liabilities (41.469) (30.915)
Current liabilities
Trade and other payables 20 (24.191) (25.447)
Current tax payable (706) (998)
Short-term borrowings 18 (29.631) (34.244)
------ ------
Total current liabilities (54.528) (60.689)
------ ------
Total liabilities (95.997) (91.604)
------ ------
Total liabilities and equity (126.249) (141.259)
------ ------
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
2009 3.981 33.641 9.981 (950) 8.163 54.816
Total comprehensive
income for the year - - - (79) (5.082) (5.161)
------ ------ ------ ------ ------ ------
Balances, as at 31 December
2010 3.981 33.641 9.981 (1.029) 3.081 49.655
------ ------ ------ ------ ------ ------
Balances, as at 31 December
2010 3.981 33.641 9.981 (1.029) 3.081 49.655
Total comprehensive
loss 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
------ ------ ------ ------ ------ ------
Statements of cash flows
The Group
31 December 31 December
2011 2010
Cash flows related to operating activities EUR000 EUR000
(Loss)/ profit before taxes (18.053) (5.939)
Adjustments in respect of non-cash transactions: - -
Depreciation of fixed assets 4.720 4.664
Interest expense, net 5.010 4.016
Profit/loss from sale of fixed asset 528 549
Employee retirement benefits 102 31
Other non cash items 1.026 (229)
Impairment of goodwill 4.900 -
Exchange differences reconciled in P&L 1.253 -
------ ------
(514) 3.092
Decrease (increase) in inventories 3.977 3.097
Decrease (increase) in receivables 2.725 7.665
Increase (decrease) in payables - (5.296)
------ ------
6.188 8.558
Net interest received (paid) (5.027) (4.132)
Exchange differences reconciled in P&L (1.253) -
Income taxes paid (513) (1.188)
------ ------
Net operating cash inflows (outflows) (605) 3.238
------ ------
Cash flows related to investing activities
Acquisition of tangible fixed assets (1.451) (5.228)
Disposal of tangible fixed assets 132 1.387
Investment grants received - 10.143
Acquisition of intangible fixed assets (323) (807)
Interest received 18 117
------ ------
Net investment cash inflows (outflows) (1.624) 5.612
------ ------
Cash flows related to financing activities
Proceeds of new shares issued -
Loans contracted (repaid) 2.286 (9.281)
Finance lease payments 139 (8)
Interest paid - -
------ ------
Net financing cash inflows (outflows) 2.425 (9.289)
------ ------
Increase (decrease) of cash balances 196 (439)
Cash balances, at the beginning of the period 1.002 1.411
Effect of currency translation adjustments - 30
------ ------
Cash balances, at the end of the period 1.198 1.002
------ ------
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 EUR490thousand 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.
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 10(th) July 2012.
Helesi PLC Group structure
The Helesi PLC Group comprises the following entities:
Entity Country of Incorporation Equity Interest
Helesi PLC Cyprus Holding entity
Helesi SA* Greece 100%
Helesi UK Ltd United Kingdom 100% via Helesi
SA
Helesi Italia srl* Italy 99,99% via Helesi
SA
AZ Perivallontiki Ltd Cyprus 100%
Helesi Trans Ltd Cyprus 100%
JV Perivallontiki Mesogeios
SA Greece 60%
(*) Entities with production facilities
2. Accounting polices
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 Group 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 2011. This adoption did not have a material effect on the accounting policies of the Group.
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
Amendments
IFRS Interpretations Committee
* IFRS 7 (Amendment) Financial Instruments: Disclosures
-- Transfers of Financial Assets (effective for
annual periods beginning on or after 1 July 2011)
(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).
* IFRS 10 "Consolidated Financial Statements""
(effective for annual periods beginning on or after 1
January 2013).
* IFRS 11 "Joint Arrangements"" (effective for
annual periods beginning on or after 1 January 2013).
* IFRS 12 "Disclosure of Interests in Other
Entities"" (effective for annual periods beginning
on or after 1 January 2013).
* IFRS 13 "Fair Value Measurement"" (effective for
annual periods beginning on or after 1 January 2013).
Amendments
* Amendments to IAS 1, "Presentation of Financial
Statements" (effective for annual periods beginning
on or after 1 July 2012).
* Amendments to IAS 12 -- "Deferred tax": Recovery of
Underlying Assets: (effective for annual periods
beginning on or after 1 January 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 2013).
* Amendment to IAS32 "Offsetting Financial Assets and
Financial Liabilities" (effective for annual periods
beginning on or after 1 January 2014).
* Amendments to IFRS 1 - Severe Hyperinflation and
Removal of Fixed Dates for First--Time Adopters
(effective for annual periods beginning on or after 1
July 2011).
--
* 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 1, "Presentation of items of other
Comprehensive Income" (effective for annual periods
beginning on or after 1 July 2012).
* IFRS 7 (Amendment) Financial Instruments: Disclosures
-- "Offsetting Financial Assets and Financial
Liabilities" (effective for annual periods beginning
on or after 1 January 2013)
* IFRS 19 "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).
New IFRICs
* IFRIC 20: "Stripping Costs in the Production Phase
of a Surface Mine" (effective for annual periods
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 consolidated
financial statements of the Group Director.
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 EUR14.7 million. Furthermore the Group incurred a loss for the year of EUR20.4million caused by the reduced activity in the market place.
As disclosed and explained in note 18, the Group was in breach of its loan covenants in 2011but as at the time of this report successfully restructured significant parts of its loans and received waivers from two banks for its breaches. The Group's projections and budget for 2012 reflect sustainable net operating cash-flow. However the Group relies on its long term relationships and support of domestic banks and its suppliers. The budget assumes that the Group will receive the tail of EUR1.7 million Italian State Grants and the EUR7 million Greek State receivables funded by the "Theseus" program in 2012. Their collection will reduce net debt levels and will allow the banks to provide additional headroom. It also assumes that the Group will be able to prolong repayments of its current liabilities as in previous years.
The management's view that Helesi does not face a high collection risk despite the prolongation of Greek State due receivables is confirmed in the first half of 2012 when it received approximately 5.3 million. The budget reflects the deeper than expected recession that has spread to Cyprus and Italy, the group's other main markets. However the group anticipates it will continue to receive the support of the domestic banks in its trade activity allowing it to meet its budget for 2012 and to continue meeting its obligations as they fall due and to continue as a going concern.
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 and infrastructural 20-40 Years works Landscaping 5 Years Industrial machinery and equipment 15-20 Years Other installations and equipment 4-8 Years 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
2011 2010
EUR 000 EUR 000
Sales of plastic products 23.009 28.243
Sales of vehicles 3.303 14.459
Fees for services rendered 7.617 7.383
------ ------
33.929 50.085
------ ------
4. Other revenue
The Group
2011 2010
EUR 000 EUR 000
Government grants 190 522
Recharging of transportation
costs 100 140
Gain from disposal of tangible
assets 242 437
Other revenues 249 133
------ ------
781 1.232
------ ------
5. Persons employed and related costs
The Group
31 December 31 December
2011 2010
Number Number
Number of persons employed
(at year end) 290 353
------ ------
2011 2010
EUR000 EUR000
Salaries and wages (5.284) (6.606)
Social insurance costs (1.437) (1.695)
Other personnel costs (85) (117)
Employment termination benefits (146) (148)
Payroll costs capitalised 220 350
------ ------
(6.732) (8.216)
------ ------
Average cost per employee (in
Euro) 23.213 23.275
------ ------
6. Analysis of depreciation charges
The Group
2011 2010
EUR000 EUR000
Buildings and building installations (682) (670)
Plant and machinery (3.025) (2.958)
Vehicles (605) (659)
Furniture and other equipment (270) (227)
Computer software (139) (150)
Impairment of goodwill (4.900) -
Depreciation charges recapitalized 3 -
------ ------
(9.618) (4.664)
------ ------
7. Other operating expenses
The Group
2011 2010
EUR000 EUR000
Transportation expenses (2.740) (2.848)
Electricity (1.041) (1.051)
Telecommunication (170) (192)
Rental expenses (257) (367)
Exhibition and advertising
expenses (151) (237)
Travel expenses (331) (408)
Repair and maintenance (1.405) (1.050)
Insurance expenses (281) (259)
Other taxes (280) (382)
Work subcontracted to third
parties (3.385) (3.411)
Bad debts provision (400) (700)
Other (2.005) (2.019)
Impairment adjustments - -
Capitalised costs 21 29
------ ------
Total (12.425) (12.895)
------ ------
8. Cost of financing
The Group
2011 2010
EUR000 EUR000
Interest charges on bank loans (4.722) (3.702)
Finance lease charges (13) (1)
Cost of letters of credit,
letters of guarantee and similar
instruments (293) (429)
Release of exchange difference
in profit & loss (1.253) -
------ ------
(6.281) (4.132)
Interest income 18 116
------ ------
Net financing costs (6.263) (4.016)
------ ------
9. Income taxes
The Group
2011 2010
EUR000 EUR000
(Loss) / Profit, before taxes,
per the statement of earnings (18.053) (5.939)
------ ------
Income taxes, at the nominal
tax rate (3.292) (1.510)
Taxes on permanent differences
between accounting and taxable
profits 909 159
Effect of tax losses carried
forward 2.044 425
Additional tax - -
Income not subjected to taxation (21) -
Extra ordinary tax - 514
Tax relief (Charge) due to
the reduction (increase) of
the tax rate 53 (444)
Tax losses previous years 2.686 -
for which income tax assets
was recognized
------ ------
Total tax charge 2.379 (856)
------ ------
Current tax charge 221 575
Deferred tax charge 2.158 (1.431)
------ ------
Total tax charge 2.379 (856)
------ ------
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 and 17% for 2014 and thereafter (in 2011 the rate was 15% up to 30 August 2011 and 17% thereafter until the end of the year).
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.
10. Segmental analysis
.
The Group 2011
Environmental Environmental Helesi PLC
products services 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 loss, before finance
charges (11.473) (317) (11.790)
Cost of financing (5.346) (917) (6.263)
------ ------ ------
Segmental loss, before taxes (16.819) (1.234) (18.053)
Elimination of intersegmental
profits - - -
------ ------ ------
Loss from ordinary activities (16.819) (1.234) (18.053)
Income taxes (2.444) 65 (2.379)
------ ------ ------
Net loss, after taxes (19.263) (1.169) (20.432)
------ ------ ------
The Group 2010
Environmental Environmental Helesi PLC
products services Group
EUR000 EUR000 EUR000
Third-party sales 42.521 7.564 50.085
Other third-party revenues 1.133 99 1.232
------ ------ ------
Total revenues 43.654 7.663 51.317
Cost of Sales (26.862) (316) (27.178)
Personnel-related costs (4.995) (3.221) (8.216)
Directors' emoluments (287) - (287)
Depreciation charges (4.053) (611) (4.664)
Other operating expenses (9.819) (3.076) (12.895)
------ ------ ------
Segmental profit, before finance
charges (2.362) 439 (1.923)
Cost of financing (3.515) (501) (4.016)
------ ------ ------
Segmental profit, before taxes (5.877) (62) (5.939)
------ ------ ------
Income taxes 841 15 856
------ ------ ------
Net profit, after taxes (5.036) (47) (5.083)
------ ------ ------
The Group 31 December 2011
Environmental Environmental Helesi PLC
products services Group
EUR000 EUR000 EUR000
Total assets 117.408 8841 126.249
Total liabilities to third
parties (90.907) (5.090) (95.997)
------ ------ ------
Net assets 26.501 3.751 30.252
------ ------ ------
The Group 31 December 2010
Environmental Environmental Helesi PLC
products services Group
EUR000 EUR000 EUR000
Total assets 131.596 9.663 141.259
Total liabilities to third
parties (88.098) (3.506) (91.604)
------ ------ ------
Net assets 43.498 6.157 49.655
------ ------ ------
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 2011
Greece Italy Elimination Helesi
of intersegment PLC Group
transactions
Third-party sales 27,211 6,718 - 33,929
Intersegment sales 4,312 550 (4,862) 0
------ ------ ------ ------
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 0
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) 0 0
Elimination of intercompany
receivables/liabilities (2,400) 2.400 0 0
------ ------ ------ ------
Segmental loss, before finance
charges (11,411) 107 (486) (11,790)
Cost of financing (6,068) (195) - (6,263)
------ ------ ------ ------
Segmental loss, 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 loss, after taxes (20.018) (414) - (20.432)
The Group 2010
Greece UK Italy Elimination Helesi PLC
of intersegment Group
transactions
EUR000 EUR000 EUR000 EUR000 EUR000
Third-party sales 39.434 2.412 8.239 - 50.085
Intersegment sales 4.067 487 317 (4.871) 0
------ ------ ------ ------ ------
Total sales 43.501 2.899 8.556 (4.871) 50.085
Other third-party revenues 823 231 178 - 1232
------ ------ ------ ------ ------
Total revenues 44.324 3.130 8.734 (4.871) 51.317
Cost of Sales (16.167) (5.429) (5.582) - (27.178)
Cost of intersegment use
of materials (3.660) (438) (285) 4.383 0
Personnel-related costs (7.015) (218) (983) - (8.216)
Directors' emoluments (287) - - - (287)
Depreciation charges (4.079) (37) (548) - (4.664)
Other operating expenses (10.136) (689) (2.070) - (12.895)
------ ------ ------ ------ ------
Segmental profit, before
finance charges 2.980 (3.681) (734) (488) (1.923)
Cost of financing (3.878) (6) (132) - (4.016)
------ ------ ------ ------ ------
Segmental profit, before
taxes (898) (3.687) (866) (488) (5.939)
Elimination of intersegmental
profits (456) - (32) 488 0
------ ------ ------ ------ ------
Profit, before taxes (1.354) (3.687) (898) - (5.939)
Income taxes 693 - 163 - 856
------ ------ ------ ------ ------
Net profit, after taxes (661) (3.687) (735) - (5.083)
------ ------ ------ ------ ------
The Group 31 December 2011
Greece Italy Elimination Helesi PLC
of intersegment Group
balances
EUR000 EUR000 EUR000 EUR000
Intersegment investments 5.046 (5.046) -
Intersegment receivables/payables 5.935 (5.935) - -
Total 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 Group 31 December 2010
Greece UK Italy Elimination of Helesi PLC
intersegment Group
balances
EUR000 EUR000 EUR000 EUR000 EUR000
Intersegment investments 5.046 - - (5.046) 0
Intersegment receivables/payables 12.882 (3.211) (9.671) - 0
Toatal other assets 119.504 671 21.084 - 141.259
Total liabilities to third
parties (86.763) 3.210 (8.051) - (91.604)
------ ------ ------ ------ ------
Net assets 50.669 670 3.362 (5.046) 49.655
------ ------ ------ ------
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 UK Italy Other Other Helesi
European (non-EU) PLC
Union states Group
The Group states
EUR000 EUR000 EUR000 EUR000 EUR000 EUR000
2011
Value of sales 14.328 -- 6.860 9.345 3.396 33.929
Trade receivables,
at year end 23.072 -- 6.441 3.969 294 33.776
------ ------ ------ ------ ------ ------
2010
Value of sales 28.187 2.538 8.206 9.011 2.143 50.085
------ ------ ------ ------ ------ ------
Trade receivables,
at year end 24.825 591 8.459 2.183 510 36.568
------ ------ ------ ------ ------ ------
11. 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 700 EUR thousand. These two distinguished stages of the project, construction and operation, have been recognised at their fair value. The stage of construction is in progress and is 68% complete as the Goverment of Cyprus has been unable to provide an acceptable site for the second station (see note 28). Income and expenses related to the stage of construction have been recognised in the present financial statements by the percentage mentioned above. On 31 December 2011 the total assets are EUR3.038 thousand (2010:EUR2.744 thousand) and the total liabilities are EUR2.967 thousand (2010:EUR2.378 thousand). In August 2010 one of the two stations commenced operations. Pending the construction period of the second station, Helesi agreed with the Cypriot State to operate three waste transfer stations at the area of Larnaca. On 31 December 2011 the revenues from operations are EUR 1.366 thousand (2010:EUR360 thousand). The Gross Profit from operations is EUR1.143 (2010:EUR296 thousand).
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 EUR1229 thousand and net profit after tax was EUR2 thousand. On 31 December 2011 the total assets are EUR253 thousand (2010: EUR352 thousand) and the total liabilities are EUR218thousand (2010: EUR319thousand).The JV has been proportionally consolidated in the group statements.
12. Tangible fixed assets
Land Buildings and Plant and Vehicles Furniture and Assets under Total
building machinery other equipment construction
The Group installations or installation
EUR000 EUR000 EUR000 EUR000 EUR000 EUR000 EUR000
At cost or
valuation
As at 31
December 2009 2.609 21.237 57.669 4.918 1.229 2.695 90.357
------ ------ ------ ------ ------ ------ ------
Effect of
currency
translation - - 61 1 (3) - 59
Additions 2010 - 1.687 4.095 262 260 2.246 8.550
Disposals 2010 - - (3.180) (127) - - (3.307)
Transfers - 954 (1.506) - - 552 -
------ ------ ------ ------ ------ ------ ------
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
------ ------ ------ ------ ------ ------ ------
Accumulated
depreciation
As at 31
December 2009 - (1.432) (7.387) (2.474) (427) - (11.720)
------ ------ ------ ------ ------ ------ ------
Effect of
currency
translation - - 60 (1) (1) - 58
Depreciation
charges 2010 - (670) (2.958) (659) (228) - (4.515)
Disposals 2010 - - 1.265 106 - - 1.371
------ ------ ------ ------ ------ ------ ------
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)
------ ------ ------ ------ ------ ------ ------
Net book values
As at 31
December 2011 2.609 22.309 47.352 1.317 774 2.708 77.069
As at 31
December 2010 2.609 21.776 48.119 2.026 830 5.493 80.853
------ ------ ------ ------ ------ ------ ------
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
2011 EUR000 EUR000 EUR000
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
------ ------ ------
2010
Land 2.609 - 2.609
Buildings and building
installations 32.581 (8.703) 23.878
Plant and machinery 98.633 (41.494) 57.139
Vehicles 6.051 (997) 5.054
Furniture and other equipment 1.902 (416) 1.486
Assets under construction 5.493 - 5.493
------ ------ ------
147.269 (51.610) 95.659
------ ------ ------
In 2011, the development costs that have satisfied the capitalisation criteria set, amounted to EUR223, while for 2010 was EUR380 thousand. These costs comprised (in EUR'000):
2011 2010
Personnel related costs 220 351
Miscellaneous other expenses 3 29
------ ------
223 380
------ ------
As at 31 December 2011 and 2010, 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 EUR61 million.
13. Intangible fixed assets
Computer Goodwill Total
The Group software
EUR000 EUR000 EUR000
At cost or valuation
As at 1st January 2010 1.993 12.559 14.552
Reclassification to
tangible assets (1.051) 0 (1.051)
Effect of currency
translation 3 - 3
Additions 2010 807 - 807
Transfers (46) - (46)
------ ------ ------
As at 31st December
2010 1.706 12.559 14.265
------ ------ ------
Effect of currency
translation - - -
Additions 2011 322 - 322
Transfers (4) - (4)
------ ------ ------
As at 31st December
2011 2.024 12.559 14.583
------ ------ ------
Accumulated depreciation
As at 31st December
2009 (226) - (226)
Reclassification to
tangible assets 84 - 84
------ ------ ------
As at 1st January 2010 (142) - (142)
Depreciation charges
2010 (150) - (150)
------ ------ ------
As at 31 December 2010 (292) - (292)
------ ------ ------
As of January 1(st) (292) - (292)
Depreciation charges
2011 (139) (139)
Impairment goodwill - (4.900) (4.900)
------ ------ ------
As at 31 December 2011 (431) (4.900) (5.331)
------ ------ ------
Net book values
As at 31 December 2011 1.593 7.659 9.252
As at 31 December 2010 1.413 12.559 13.972
(as restated)
During the year 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. The carrying value of EUR12.5 million of goodwill which arose on the acquisition of the vehicles division is decreased to EUR7.6 million 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:
-- Revenues will drop to 1/3 of 2009 levels for 2012 (2009:
EUR34.5 million) due to management's focus only on projects
funded by the National Strategic Reference Framework (NSRF)
or various EU funds,
-- Operating Margin will drop to 22% compared to 32% the
previous year, as competition for EU funded projects will
be strong,
-- Discount Rate of increased to 13% compared to 10% the
previous year, reflecting a higher market risk.
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.
14. Other long-term assets
Other long-term assets primarily comprise guarantee deposits given in relation to operating leases.
15. Inventories
The Group
31 December 31 December
2011 2010
EUR000 EUR000
Vehicles 677 2.267
Manufactured goods 2.304 3.853
Raw and packaging
materials 1.892 2.731
------ ------
4.873 8.851
------ ------
16. Trade and other receivables
The Group
31 December 31 December
2011 2010
EUR000 EUR000
Trade receivables 25.660 27.725
Receivables doubtful
of collection (1.805) (993)
------ ------
23.855 26.732
Advances to suppliers 2.741 2.664
State receivables
(including VAT,grants
and refundable taxes) 4.455 4.046
Blocked deposit accounts 30 30
Other receivables 2.695 3.096
------ ------
33.776 36.568
------ ------
The provision for bad debts was increased by EUR812 thousand (2010: EUR993 thousand). The past due receivables that have not been impaired amounted to EUR10,3 million and are past due 3 months more or less 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
31December 31December
2011 2010
Period
Up to 6 months 10.390 11.831
6 to 9 months 1.152 2.471
9 to 12 months 817 2.080
Over 12 months 11.496 10.350
------ ------
23.855 26.732
------ ------
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 Group are analysed as follows:
The Group
31 December 31 December
2011 2010
EUR000 EUR000
Short-term borrowings
Bank loans (27.439) (30.060)
Short-term portion of
long-term loans (2.042) (4.175)
Finance lease obligations (150) (9)
------ ------
(29.631) (34.244)
------ ------
Long-term borrowings
Debenture loan (36.648) (29.607)
Finance lease obligations (3) (6)
------ ------
(36.651) (29.613)
------ ------
Depending on the date of maturity, long-term borrowings are analysed as follows:
The Group
31 December 31 December
2011 2010
EUR000 EUR000
Long-term borrowing repayable
in:
1 to 2 years (6.819) (6.335)
2 to 5 years (21.274) (19.272)
Over 5 years (8.558) (4.006)
------ ------
(36.651) (29.613)
------ ------
The following are the contractual maturity of bank loans including interest payment:
The Group
31 December 31 December
2011 2010
EUR000 EUR000
1 to 2 years (9.478) (8.444)
2 to 5 years (25.195) (22.630)
Over 5 years (8.927) (4.271)
------ ------
(43.600) (35.345)
------ ------
Banks continued to pass on to Helesi their increased cost of borrowing. Consequently the weighted average cost of borrowing for 2011 increased to 7.3% (2010: 5.8%).
The Greek Subsidiary Helesi SA was in breach of its loan covenants for 2011 totalling to EUR23.5 million. The company's long term exposure to Alpha Bank was EUR9.1 million, to Piraeus Bank EUR 8.3 million, to FBB EUR1.8 million and to Bank of Cyprus EUR4.3 million. Alpha Bank, Piraeus Bank and FBB rescheduled EUR19,2 million of debenture loans during the first half of 2012. Also bank of Cyprus received also a credit approval for rescheduling EUR4.3 million of loans, extending the grace period up to 28/02/2013.
In 2011 the Group provided a pledge on its fixed assets in the amount of EUR61 million as form of security.
Finally, at the first quarter of 2011, RBS agreed to extend EUR4 million of debenture loans and EUR2 million of short term debt up to 2016 with a grace period until 31 December 2011. Currently the group is negotiating a new viable schedule of payments within the same terms and conditions.
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. As at 31 December 2011 and 2010 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 Group to 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. 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.
The following tables detail the Group's remaining contractual maturity for its financial liabilities. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group can be required to pay. The table includes both interest and principal cash flows.
31 December Contractual Between Between More
2011 Carrying cash 3 months 3--12 1--5 than
amounts flows or less months years 5 years
EUR EUR EUR EUR EUR EUR
Bank loans 66,283 78,450 1,264 33,422 34,837 8,927
Trade and
other payables 25,448 25,448 2,947 19,140 3,361
91,731 103,898 4,211 52,562 38,199 8,927
--------- ------------ --------- -------- -------- ---------
20. Trade and other payables
The Group
31 December 31 December
2011 2010
EUR000 EUR000
Trade creditors (20.800) (22.933)
Accrued expenses (991) (479)
Social security contributions
payable (1.618) (383)
Payable salaries (235) (479)
Liabilities due to related - -
parties
Taxes (other than income
tax) payable (296) (487)
Other payables (1.509) (686)
------ ------
(25.449) (25.447)
------ ------
Long term portion (1.258) -
Short term portion (24.191) (25.447)
------ ------
(25.449) (25.447)
------ ------
21. Employee benefits
The obligation of the Helesi PLC Grouptowards 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 2011 and 2010 was as follows:
The Group
EUR000
Provision as at 31 December 2009 (115)
Charge for the year in respect of employment
termination benefits (165)
Amounts actually disbursed 130
------
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)
------
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 2009 (45.827)
New grants secured in 2010 (413)
Effective reduction of the depreciation charges,
in 2010 1.778
-----
Effective reduction of the value of tangible fixed
assets, as at 31 December 2010 (44.462)
------
Effective reduction of the value of tangible fixed
assets, as at 31 December 2010 (44.462)
New grants secured in 2011 -
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
------
23. Share capital and share premium
Company's authorised share capital is divided into 60.000.000 shares (2010: 60.000.000 shares) of a nominal value of EUR0.10 each.
Company's issued share capital is divided into 39,805,754 shares (2010:39.805.754 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 2011 the shareholders holding shares of Helesi PLCexceeding 3% of the total number of issued and outstanding shares and the shareholders who serve the Helesi PLC Group as 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 SA were, 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.
The currency translation adjustments that arise in the consolidation process, on the conversion of the financial statements of Helesi UK Ltd from Pounds Sterling into Euro, are reflected directly in shareholders' equity and are reported under the caption "currency translation adjustments".
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
2011 2010 2011 2010
EUR000 EUR000 EUR000 EUR000
Net profit attributable
to the shareholders (in
Euro thousand) (20.432) (5.083) (20.432) (5.083)
Weighted average number
of issued shares (in
thousands) 39.806 39.806 39.806 39.806
------ ------ ------ ------
Earnings per share (in
EUR) (0,51) (0.13) (0,51) (0.13)
------ ------ ------ ------
For 2011, 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
EUR000 EUR000
Tax impact of the differentiation
of the accounting and the
tax depreciation rates (5.154) (3.960)
Anticipated tax burden on
the disposal of revalued
land - -
Providing for doubtful receivables,
while tax relief entails
a write-off 1.401 191
Reducing the value of stocks
to eliminate the effect
of tax depreciation 41 71
Tax relief from taxable
losses 79 2.081
Miscellaneous timing differences
between accounting profits
and taxable income 324 465
------ ------
Income taxes, which will
burden future accounting
periods (3.309) (1.152)
------ ------
27. Related party transactions and balances
The transactions of the Helesi PLC Group, in the year 2011 and 2010, with and the receivables from and payables to related parties, as at 31 December 2011 and 2010, are analysed as follows:
The Group Purchases Receivable Payable
Sales to from from to
EUR000 EUR000 EUR000 EUR000
2011
TECMEC AE 133 2.183 2.152 -
2010
TECMEC AE 241 3.787 4.091 -
The compensation of the members of the Board of Directors and certain other key management personnel executives, in the years 2011 and 2010, was as follows:
The Group The Company
2011 2010 2011 2010
EUR000 EUR000 EUR000 EUR000
Dimitrios Goulandris - (60) - (60)
Athanassios Andrianopoulos,
CEO (18) (70) (18) (70)
Christina Thanassoulia
(Deputy CEO) (18) (35) (18) (35)
Apostolos Binomakis-
Non executive member (17) (40) (17) (40)
George Papangelis - Non
executive member (5) - (5) -
Elena Paraskeva - Non
executive member (25) (25) (25) (25)
Ioannis Riskakis - Executive
member (26) (57) (26) (57)
------ ------ ------ ------
(109) (287) (109) (287)
------ ------ ------ ------
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 accordance with the contract, the group is entitled to significant compensation for delays and non-performance 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 and will depend upon whether or not an alternative site will be found and the estimated time required to be able to start its construction and operation. Income from compensation will be realised as these uncertainties are resolved.
According to Greek Corporate Tax Law, corporate tax is 20%, but in case of dividend distribution, an additional 25% tax is calculated
The Helesi PLC Group is contractually committed under operating leases for the leasing of office space and warehouses, as follows:
Within Within 2-5
1 year 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 9.096 thousand.
Expect as disclosed in notes 12 and 18 the Group had no other contingencies and commitments at 31 December 2011.
29. Audit fee
The audit fees for the whole of the Helesi Group, for the year ended 31 December 2011 amounted to EUR100 thousand (2010: EUR100 thousand). The audit fees charged by Group auditors for the year ended 31 December 2011 amounted to EUR28 thousand (2010: EUR31 thousand). There were no other fees charged by the Group's auditors.
30. Post balance sheet events
Except as disclosed in Note 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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