TIDMIRF
RNS Number : 4533J
IRF European Fin Investments Ltd
30 March 2010
IRF European Finance Investments Ltd
('IRF' or the 'Company')
Full Year 2009 Results
IRF European Finance Investments Ltd announces its audited financial results for
the fiscal year ended 31 December 2009.
Financial Highlights
+---------------------------------+---------------+----------------+
| Amounts in EUR 000 | Fiscal Year | Fiscal Year |
| | ended 31 | ended 31 |
| |December 2009 | December 2008 |
| | | (as restated) |
+---------------------------------+---------------+----------------+
| Income Statement Items: | | |
+---------------------------------+---------------+----------------+
| (Loss)/Operating Income | 44,462 | 25,900 |
+---------------------------------+---------------+----------------+
| (Loss)/Profit before income tax | (50,994) | (218,795) |
+---------------------------------+---------------+----------------+
| Income tax expense | (96) | - |
+---------------------------------+---------------+----------------+
| (Loss)/Profit after tax from | (51,090) | (218,795) |
| continuing operations | | |
+---------------------------------+---------------+----------------+
| Net (Loss)/Profit from | - | (87,139) |
| discontinued operations | | |
+---------------------------------+---------------+----------------+
| (Loss)/Profit after Tax | (51,090) | (305,934) |
+---------------------------------+---------------+----------------+
| Other Comprehensive income net | 4,978 | 12,599 |
| of tax | | |
+---------------------------------+---------------+----------------+
| (Loss)/Total Comprehensive | (46,112) | (293,336) |
| income after tax | | |
+---------------------------------+---------------+----------------+
| Attributable to equity holders | (46,112) | (261,559) |
| of IRF | | |
+---------------------------------+---------------+----------------+
| Minority Interests | - | (31,776) |
+---------------------------------+---------------+----------------+
| Basic earnings (loss) per share | (0.41) | (2.12) |
| (in euro/share) | | |
+---------------------------------+---------------+----------------+
| Basic earnings (loss) per share | | |
| (in euro/share) from continuing | (0.41) | (1.75) |
| operations | | |
+---------------------------------+---------------+----------------+
| Balance Sheet Items: | | |
+---------------------------------+---------------+----------------+
| Cash and cash equivalents | 126,842 | 148,610 |
+---------------------------------+---------------+----------------+
| Total Assets | 340.504 | 403,689 |
+---------------------------------+---------------+----------------+
| Total Liabilities | 201,027 | 200,148 |
+---------------------------------+---------------+----------------+
| Total Equity | 139,478 | 203,541 |
+---------------------------------+---------------+----------------+
| Equity attributable to equity | 139,478 | 203,541 |
| holders of IRF | | |
+---------------------------------+---------------+----------------+
Dividend Payment and Reduction of Share Premium
The Company believes it is appropriate to make periodic distributions to
its shareholders. Notwithstanding the Company having sufficient cash reserves
to distribute funds to its shareholders, Bermuda law restricts the Company from
declaring a dividend currently. The Company therefore intends to propose to
shareholders that the Company reduce the share premium account so it can make a
distribution to the shareholders.
Commenting on this proposal, Angeliki Frangou said: 'We have previously
indicated a desire to provide shareholders with a current return. We believe we
can meet this intention in respect of 2009 by agreeing to reduce share premium.
We intend to recommend to the shareholders that we reduce share premium to allow
for a distribution to the shareholders and will commence the process of
obtaining shareholder approval shortly.'
Net Asset Value
IRF determined that its shares had a net asset value ('NAV') of $1.61 per share
as at 31 December 2009. The equity holdings portfolio of IRF is marked to
market on the balance sheet as at 31 December 2009. As of this date, the total
assets of the Company, including the cash balance of EUR126.8 million, was EUR340.5
million. The total liabilities were EUR201.0 million. Consequently, the equity
value was EUR139.5 million. The Euro/$ exchange rate of 1.4406 on 31 December
2009 was used to compute the NAV.
As of 31 December 2009, IRF had 124.8 million common shares outstanding.
IRF intends to determine and publish NAV on a periodic basis. This estimated NAV
is provided for information purposes only and should not be relied upon for
investment decisions.
Information
A copy of our annual financial report can be found on our website
(www.irf-finance.com) and copies will be sent to our shareholders shortly.
+---------------------------------+-------------------------------+
| For further information, please | |
| contact: | |
+---------------------------------+-------------------------------+
| | |
+---------------------------------+-------------------------------+
| IRF European Finance | |
| Investments Ltd | |
+---------------------------------+-------------------------------+
| Angeliki Frangou, Chairperson | Tel: +30 210 428 0560 |
| | |
+---------------------------------+-------------------------------+
| Sheldon M. Goldman | Tel: +1 212 404 5740 |
| | |
+---------------------------------+-------------------------------+
About IRF
IRF's principal investment strategy is to seek investment opportunities in
global financial institutions, with a complementary focus on investments in
distressed opportunities in other industries. The Company was initially listed
on AIM until 19 January 2009 when it transferred to the SFM (Specialist Fund
Market), both markets operated by the London Stock Exchange plc. The Company's
registered office is at Canon's Court 22 Victoria Street, Hamilton HM12,
Bermuda.
Forward-looking statements
All statements, other than statements of historical fact, included in this
release are forward looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. These statements are based upon
current expectations and are subject to a number of risks, uncertainties and
assumptions that could cause actual results to differ materially from those
described in the forward-looking statements. IRF assumes no obligation and
expressly disclaims any duty to update the information contained herein except
as required by law.
IRF European Finance Investments Ltd
Financial Statements
for the year ended
31 December 2009
In accordance with the International
Financial Reporting Standards
The accompanying consolidated financial statements of "IRF European Finance
Investments Ltd" (the "Company" or "IRF" ) and its subsidiaries (together the
"Group"), for the year ended 31 December 2009 were approved by the Company's
Board of Directors on 26 March 2010.
Contents
+----------------------------------------------------------------+
| BOARD OF DIRECTORS |
+----------------------------------------------------------------+
| MANAGEMENT REPORT FOR THE YEAR ENDED 31 DECEMBER 2009 |
+----------------------------------------------------------------+
| CORPORATE GOVERNANCE |
+----------------------------------------------------------------+
| STATEMENT OF DIRECTORS RESPONSIBILITIES IN RESPECT OF THE |
| ANNUAL ACCOUNTS |
+----------------------------------------------------------------+
| INDEPENDENT AUDITOR'S REPORT |
+----------------------------------------------------------------+
| CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME |
+----------------------------------------------------------------+
| CONSOLIDATED STATEMENT OF FINANCIAL POSITION |
+----------------------------------------------------------------+
| CONSOLIDATED STATEMENT OF CHANGES IN EQUITY |
+----------------------------------------------------------------+
| CONSOLIDATED CASH FLOW STATEMENT |
+----------------------------------------------------------------+
| NOTES TO THE FINANCIAL STATEMENTS |
+----------------------------------------------------------------+
| 1. GENERAL INFORMATION |
+----------------------------------------------------------------+
| 2. BASIS OF FINANCIAL STATEMENT PREPARATION |
+----------------------------------------------------------------+
| 3. SUMMARY OF IMPORTANT ACCOUNTING POLICIES |
+----------------------------------------------------------------+
| 4. CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS |
+----------------------------------------------------------------+
| 5. STRUCTURE OF THE GROUP |
+----------------------------------------------------------------+
| 6. RISK MANAGEMENT |
+----------------------------------------------------------------+
| 7. INTEREST INCOME & INTEREST EXPENSE |
+----------------------------------------------------------------+
| 8. FEE AND COMMISSION INCOME & EXPENSE |
+----------------------------------------------------------------+
| 9. DIVIDEND INCOME |
+----------------------------------------------------------------+
| 10. GAINS FROM DERIVATIVE FINANCIAL INSTRUMENTS |
+----------------------------------------------------------------+
| 11. REALISED GAINS/(LOSSES) FROM DISPOSAL OF |
| AVAILABLE-FOR-SALE FINANCIAL ASSETS |
+----------------------------------------------------------------+
| 12. REALISED GAIN FROM DISPOSAL OF FINANCIAL ASSETS AT FAIR |
| VALUE THROUGH PROFIT & LOSS |
+----------------------------------------------------------------+
| 13.UNREALISED GAIN FROM VALUATION OF FINANCIAL ASSETS AT FAIR |
| VALUE THROUGH PROFIT & LOSS |
+----------------------------------------------------------------+
| 14. IMPAIRMENT LOSSES |
+----------------------------------------------------------------+
| 15. STAFF COSTS |
+----------------------------------------------------------------+
| 16. OTHER OPERATING EXPENSES |
+----------------------------------------------------------------+
| 17. DISCONTINUED OPERATIONS |
+----------------------------------------------------------------+
| 17.1 NET PROFIT FROM DISCONTINUED OPERATIONS |
+----------------------------------------------------------------+
| 17.2 LOSS ON DISPOSAL OF PROTON BANK |
+----------------------------------------------------------------+
| 18. PROPERTY, PLANT AND EQUIPMENT AND INVESTMENT PROPERTY |
+----------------------------------------------------------------+
| 19. GOODWILL AND OTHER INTANGIBLE ASSETS |
+----------------------------------------------------------------+
| 20. INVESTMENTS IN ASSOCIATES |
+----------------------------------------------------------------+
| 21. LOANS AND ADVANCES TO CUSTOMERS |
+----------------------------------------------------------------+
| 22. INVESTMENT PORTFOLIO |
+----------------------------------------------------------------+
| 23. TRADING PORTFOLIO AND OTHER FINANCIAL ASSETS AT FAIR VALUE |
| THROUGH PROFIT & LOSS |
+----------------------------------------------------------------+
| 24. DERIVATIVE FINANCIAL INSTRUMENTS |
+----------------------------------------------------------------+
| 25. OTHER ASSETS |
+----------------------------------------------------------------+
| 26. NON CURRENT ASSETS HELD FOR SALE |
+----------------------------------------------------------------+
| 27. DEFERRED TAX - INCOME TAX EXPENSE |
+----------------------------------------------------------------+
| 28. CASH AND BALANCES WITH CENTRAL BANK |
+----------------------------------------------------------------+
| 29. LOANS AND ADVANCES TO FINANCIAL INSTITUTIONS |
+----------------------------------------------------------------+
| 30. CASH AND OTHER EQUIVALENTS |
+----------------------------------------------------------------+
| 31. ISSUED DEBT SECURITIES |
+----------------------------------------------------------------+
| 32. RETIREMENT BENEFIT OBLIGATION |
+----------------------------------------------------------------+
| 33. LONG TERM LOANS |
+----------------------------------------------------------------+
| 34. DUE TO FINANCIAL INSTITUTIONS |
+----------------------------------------------------------------+
| 35. DUE TO CUSTOMERS |
+----------------------------------------------------------------+
| 36. FINANCIAL LIABILITIES AT FAIR VALUE THROUGH PROFIT & LOSS |
+----------------------------------------------------------------+
| 37. CURRENT INCOME TAX LIABILITIES |
+----------------------------------------------------------------+
| 38. OTHER LIABILITIES |
+----------------------------------------------------------------+
| 39. SHARE CAPITAL & SHARE PREMIUM |
+----------------------------------------------------------------+
| 40. OTHER RESERVES |
+----------------------------------------------------------------+
| 41. EARNINGS PER SHARE |
+----------------------------------------------------------------+
| 42. CASH AND CASH EQUIVALENTS - CASH FLOW STATEMENT |
+----------------------------------------------------------------+
| 43. ASSETS HELD FOR SALE AND LIABILITIES ASSOCIATED WITH |
| ASSETS CLASSIFIED AS HELD FOR SALE. |
+----------------------------------------------------------------+
| 44. RELATED PARTIES TRANSACTIONS |
+----------------------------------------------------------------+
| 45. STOCK OPTION PLAN |
+----------------------------------------------------------------+
| 46. COMMITMENTS, CONTINGENT ASSETS AND LIABILITIES |
+----------------------------------------------------------------+
| 47. FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES |
+----------------------------------------------------------------+
| 48. CLASSIFICATION OF FINANCIAL ASSETS AND LIABILITIES |
+----------------------------------------------------------------+
| 49. POST REPORTING DATE EVENTS |
+----------------------------------------------------------------+
| 50. APPROVAL OF FINANCIAL STATEMENTS |
+----------------------------------------------------------------+
BOARD OF DIRECTORS
+------------------------+--------------------------+
| Name | Position |
+------------------------+--------------------------+
| Angeliki Frangou | Chairman, Non - |
| | Executive Director |
+------------------------+--------------------------+
| Sheldon Goldman | Deputy Chairman, Non - |
| | Executive Director |
+------------------------+--------------------------+
| Loukas Valetopoulos | Chief Executive Officer, |
| | Director |
+------------------------+--------------------------+
| Alexander Meraclis | Secretary of the Company |
| | and Non - Executive |
| | Director |
+------------------------+--------------------------+
MANAGEMENT REPORT FOR THE YEAR ENDED 31 DECEMBER 2009
Financial highlights
+--------------------------------+-------------------+-------------------+---------+
| | IRF Group |
+--------------------------------+-------------------------------------------------+
| Amounts in EUR 000 | 31 | 31 | % |
| | December | December | |
| | 2009 | 2008 | |
+--------------------------------+-------------------+-------------------+---------+
| Statement of comprehensive | | | |
| income items | | | |
+--------------------------------+-------------------+-------------------+---------+
| Total operating income | 44,462 | 25,900 | 71.67% |
+--------------------------------+-------------------+-------------------+---------+
| Total operating expenses | 95,456 | 244,695 | -60.99% |
+--------------------------------+-------------------+-------------------+---------+
| Loss after tax (attributable | (51,090) | (264,129) | 80.66% |
| to equity holders of the | | | |
| Company) | | | |
+--------------------------------+-------------------+-------------------+---------+
| Other comprehensive income | 4,978 | 12,599 | -60.49% |
+--------------------------------+-------------------+-------------------+---------+
| Total comprehensive income | (46,112) | (293,336) | 84.28% |
| (attributable to equity | | | |
| holders of the Company) | | | |
+--------------------------------+-------------------+-------------------+---------+
| Basic earnings per share | (0.41) | (2.12) | 80.62% |
| (EUR/share) | | | |
+--------------------------------+-------------------+-------------------+---------+
| | | | |
+--------------------------------+-------------------+-------------------+---------+
| Balance sheet items | | | |
+--------------------------------+-------------------+-------------------+---------+
| Cash and cash equivalent | 126,842 | 148,610 | -14.65% |
+--------------------------------+-------------------+-------------------+---------+
| Trading portfolio | 18,499 | 5,965 | 210.14% |
+--------------------------------+-------------------+-------------------+---------+
| Investment portfolio | 193,886 | 248,508 | -21.98% |
+--------------------------------+-------------------+-------------------+---------+
| Total assets | 340,504 | 403,689 | -15.65% |
+--------------------------------+-------------------+-------------------+---------+
| | | | |
+--------------------------------+-------------------+-------------------+---------+
| Loans from banks | 198,104 | 198,393 | -0.15% |
+--------------------------------+-------------------+-------------------+---------+
| Total liabilities | 201,027 | 200,148 | 0.44% |
+--------------------------------+-------------------+-------------------+---------+
| | | | |
+--------------------------------+-------------------+-------------------+---------+
| Total Equity | 139,478 | 203,541 | -31.47% |
+--------------------------------+-------------------+-------------------+---------+
| | | | |
+--------------------------------+-------------------+-------------------+---------+
| Ratios | | | |
+--------------------------------+-------------------+-------------------+---------+
| Current assets / current | 50 | 88 | -43.34% |
| liabilities | | | |
+--------------------------------+-------------------+-------------------+---------+
| Total assets / total | 1.69 | 2.02 | -16.02% |
| liabilities | | | |
+--------------------------------+-------------------+-------------------+---------+
| Net loss after tax / total | -150 | -542 | 72.32% |
| assets | | | |
+--------------------------------+-------------------+-------------------+---------+
| Long term debt/equity | 1.42 | 0.97 | -45.72% |
+--------------------------------+-------------------+-------------------+---------+
Performance of the Company and major events during the year 2009
Market conditions
The markets were volatile for much of 2009, with sentiment widely divergent
regarding prospects for a recovery to the global financial system that had been
badly in 2008. Toward the second half of 2009, sentiment improved significantly
as financial institutions, with the governmental assistance, were able to repair
their balance sheets and restore profitability.
Investment strategy and objectives
The Company's investment strategy is to seek control and non-control investment
opportunities in the financial sector and select distressed opportunities in
other industries. The Company intends to reinvest capital gains and income from
its investments with the aim of achieving capital growth. In addition, the
Company intends, at the discretion of the Directors, to distribute capital and
income on a periodic basis.
Key risk factors
IRF is exposed to various risks relating to financial instruments.
In addition, the existing budget deficits in the Hellenic Republic has had an
adverse effect on investors' appetite for securities listed on the Athens Stock
Exchange, adversely affecting prices and liquidity.
The exposure of IRF to risks is presented in note 6 of the Financial Statements.
Performance and position of the Company
During 2009, IRF invested opportunistically and increased its interest in Marfin
Investment Group ('MIG'), a public company traded on the Athens Stock Exchange,
to approximately 11%. In addition, during the second half of 2009, IRF was able
to generate returns by investing in distressed fixed income and other
opportunities in the US markets. Throughout the year, the company realised a
profit of approximately EUR 22.8 million from the sale of securities in the Greek
and US markets.
As at 31 December 2009, IRF had cash and cash equivalents of EUR127 million. IRF
held investments in equity and debt securities valued at about EUR212 million,
including EUR178.3 million shares in MIG.
Events after the reporting period
On 19 March 2010, the Companyexercised the right to participate in a convertible
bond loan issue of MIG. Under the terms of the issue, the Company acquired
10,482,180 bonds for a price of EUR4.77 per bond, paying approximately EUR50
million. The bonds bear 5% fixed annual interest, they are convertible into
common registered shares of MIG and on 26 March 2010 they shall commence trading
on the Athens Stock Exchange. The bonds will mature in 5 years.
Other events
At a Special General Meeting of the Company held on 21 May 2009, the
shareholders resolved to reduce the Company's share premium account from
US$520,344,639.17 to US$495,378,160.37, enabling an amount of US$0.20 per common
share to be paid to holders of the Company's common shares. The total amount of
EUR17,951,163.93 was paid to shareholders on 9 June 2009. The reduction of share
premium does not reduce the authorised or issued share capital of the Company or
the nominal value of the shares of the Company.
On 14 November 2009 the 13,596,541 listed Warrants of the Company expired, with
no notice from the warrant holders prior to the expiry for relevant exercise.
The Board approved on 20 November 2009 the delisting of the Warrants from the
SFM and the clearance of the Warrant holders register.
CORPORATE GOVERNANCE
There is no corporate governance regime applicable to the Company in Bermuda. In
addition, companies listed on the SFM are not required to comply with the
Combined Code. Nevertheless, the Directors recognise the importance of sound
corporate governance and intend to continue to develop policies and procedures
which, taking into account the size and nature of the Company, will create an
effective corporate governance regime.
STATEMENT OF DIRECTORS RESPONSIBILITIES IN RESPECT OF THE ANNUAL ACCOUNTS
The directors are responsible for preparing the Annual Report and the financial
statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each
financial year. Under that law and in accordance with appropriate regulations
of the listing authority, the directors have elected to prepare financial
statements in accordance International Financial Reporting Standards as adopted
by the European Union.
The financial statements are required by law to give a true and fair view of the
state of affairs of the Group and of the profit or loss of the Group for that
period. In preparing these financial statements, the directors are required to:
· select suitable accounting policies and then apply them consistently;
· make judgments and estimates that are reasonable and prudent;
· state whether applicable International Financial Reporting Standards as
adopted by the European Union have been followed, subject to any material
departures disclosed and explained in the financial statements; and
· prepare the financial statements on a going concern basis unless it is
inappropriate to presume that the Company will continue in business.
The directors, to the best of their knowledge, state that:
· the financial statements, prepared in accordance with International
Financial Reporting Standards as adopted by the European Union, give a true and
fair view of the assets, liabilities, financial position and loss of the Group;
and
· the management report includes a fair review of the development and
performance of the business and the position of the Company and the undertakings
included in the consolidation taken as a whole, together with a description of
the principal risks and uncertainties that they face.
The directors are responsible for keeping proper accounting records that
disclose with reasonable accuracy at any time the financial position of the
Company and enable them to ensure that the financial statements comply with the
Companies Act 1981 of Bermuda. They are also responsible for safeguarding the
assets of the Company and hence for taking reasonable steps for the prevention
and detection of fraud and other irregularities.
In so far as the directors are aware:
· there is no relevant audit information of which the Company's auditors
are unaware; and
· the directors have taken all steps that they ought to have taken to make
themselves aware of any relevant audit information and to establish that the
auditors are aware of that information.
Legislation in Bermuda governing the preparation and dissemination of financial
statements may differ from legislation in other jurisdictions.
Angeliki Frangou
_________________________________
Chairman, Non - Executive Director
INDEPENDENT AUDITOR'S REPORT
To the Shareholders of IRF European Finance Investments Ltd
Report on the Financial Statements
We have audited the accompanying financial statements of IRF European Finance
Investments Ltd (the "Company") and its subsidiaries (which, together with the
company form the "Group"), which comprise the consolidated Statement of
Financial Position as at 31 December 2009, and consolidated Statement 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.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these
financial statements in accordance with International Financial Reporting
Standards as adopted by European Union, and for such internal control as
management 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 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 about whether the
financial statements are free from material misstatement. An audit involves
performing procedures to obtain audit evidence about the amounts and disclosures
in the financial statements. The procedures selected depend on the auditor's
judgment, including the assessment of the risks of material misstatement of the
financial statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the entity's
preparation and fair presentation of the financial statements in order to design
audit procedures that are appropriate in the circumstances but not for the
purpose of expressing an opinion on the effectiveness of the Company's internal
control. An audit also includes evaluating the appropriateness of accounting
policies used and the reasonableness of accounting estimates made by management,
as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the financial statements present fairly, in all material
respects, the financial position of the Company as at 31 December 2009, and its
financial performance and its cash flows for the year then ended in accordance
with International Financial Reporting Standards that have been adopted by the
European Union.
Athens, 26 March 2010
+------------------------------------+------------------------------------+
| The Chartered Accountant | The Chartered Accountant |
+------------------------------------+------------------------------------+
| | |
| | |
+------------------------------------+------------------------------------+
| Vassilis Kazas | Panagiotis Christopoulos |
+------------------------------------+------------------------------------+
| SOEL Reg. No 13281 | SOEL Reg. No 28481 |
+------------------------------------+------------------------------------+
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
+--------------------------------------+------+----------+-----------+
| Amounts presented in EUR '000 | Note | 1/1 - | 1/1 - |
| | |31/12/09 | 31/12/08 |
| | | | (as |
| | | |restated) |
+--------------------------------------+------+----------+-----------+
| Income | | | |
+--------------------------------------+------+----------+-----------+
| Interest and similar income | 7 | 2,417 | 8,158 |
+--------------------------------------+------+----------+-----------+
| Fee and commission income | 8 | - | 86 |
+--------------------------------------+------+----------+-----------+
| Dividend and other income | 9 | 18,360 | 729 |
+--------------------------------------+------+----------+-----------+
| Exchange differences | | - | 7,303 |
+--------------------------------------+------+----------+-----------+
| Realised gain from disposal / | 10 | 22 | 9,624 |
| settlement of derivative financial | | | |
| instruments | | | |
+--------------------------------------+------+----------+-----------+
| Realised gain from disposal of | 11 | 7,939 | - |
| available for sale financial assets | | | |
+--------------------------------------+------+----------+-----------+
| Realised gain from disposal of | 12 | 14,837 | - |
| financial assets held for trade | | | |
+--------------------------------------+------+----------+-----------+
| Unrealised gain from valuation of | 13 | 670 | - |
| financial assets held for trade | | | |
+--------------------------------------+------+----------+-----------+
| Unrealized gain from valuation of | 10 | 1 | - |
| derivative financial instruments | | | |
+--------------------------------------+------+----------+-----------+
| Share of profits / (losses) of | 20 | 216 | - |
| associates | | | |
+--------------------------------------+------+----------+-----------+
| Total operating income | | 44,462 | 25,900 |
+--------------------------------------+------+----------+-----------+
| | | | |
+--------------------------------------+------+----------+-----------+
| Expenses | | | |
+--------------------------------------+------+----------+-----------+
| Interest and similar expenses | 7 | (9,223) | (11,309) |
+--------------------------------------+------+----------+-----------+
| Fee and commission expense | 8 | (393) | (881) |
+--------------------------------------+------+----------+-----------+
| Exchange differences | | (2,244) | - |
+--------------------------------------+------+----------+-----------+
| Realised loss from disposal of | 11 | - | (44,282) |
| Available-for-sale financial assets | | | |
+--------------------------------------+------+----------+-----------+
| Unrealised loss from valuation of | | - | (904) |
| financial assets held for trade | | | |
+--------------------------------------+------+----------+-----------+
| Impairment losses on | 14 | (81,717) | (185,146) |
| available-for-sale financial assets | | | |
+--------------------------------------+------+----------+-----------+
| Staff costs | 15 | (100) | (100) |
+--------------------------------------+------+----------+-----------+
| Other operating expenses | 16 | (1,778) | (2,074) |
+--------------------------------------+------+----------+-----------+
| Total operating expenses | | (95,456) | (244,695) |
+--------------------------------------+------+----------+-----------+
| | | | |
+--------------------------------------+------+----------+-----------+
| Loss for the period from continuing | | (50,994) | (218,795) |
| operations | | | |
+--------------------------------------+------+----------+-----------+
| Less: Income tax | 27 | (96) | - |
+--------------------------------------+------+----------+-----------+
| Loss after tax from continuing | | (51,090) | (218,795) |
| operations | | | |
+--------------------------------------+------+----------+-----------+
| Net loss from discontinued | 17 | - | (87,137) |
| operations | | | |
+--------------------------------------+------+----------+-----------+
| | | | |
+--------------------------------------+------+----------+-----------+
| Loss after tax | | (51,090) | (305,934) |
+--------------------------------------+------+----------+-----------+
| | | | |
+--------------------------------------+------+----------+-----------+
| Other comprehensive income | | | |
+--------------------------------------+------+----------+-----------+
| Current year gains (losses) | | 12,701 | (11,253) |
+--------------------------------------+------+----------+-----------+
| Reclassification to profit or loss | | (7,727) | 23,852 |
+--------------------------------------+------+----------+-----------+
| Exchange differences on translating | | 3 | - |
| foreign operations | | | |
+--------------------------------------+------+----------+-----------+
| Other comprehensive income for the | | 4,978 | 12,599 |
| period net of tax | | | |
+--------------------------------------+------+----------+-----------+
| Total comprehensive income for the | | (46,112) | (293,336) |
| period after tax | | | |
+--------------------------------------+------+----------+-----------+
| Profit after tax attributable to: | | | |
+--------------------------------------+------+----------+-----------+
| Owners of the parent Company | | (51,090) | (264,129) |
+--------------------------------------+------+----------+-----------+
| Minority rights | | - | (41,806) |
+--------------------------------------+------+----------+-----------+
| Total comprehensive income | | | |
| attributable to: | | | |
+--------------------------------------+------+----------+-----------+
| Owners of the parent Company | | (46,112) | (261,559) |
+--------------------------------------+------+----------+-----------+
| Minority rights | | - | (31,776) |
+--------------------------------------+------+----------+-----------+
| Earnings per share attributable to parent company's |
| shareholders ( EUR/share ) |
+--------------------------------------------------------------------+
| From continuing and discontinued | | | |
| operations | | | |
+--------------------------------------+------+----------+-----------+
| - Basic | 41 | (0.41) | (2.12) |
+--------------------------------------+------+----------+-----------+
| From continuing operations | | | |
+--------------------------------------+------+----------+-----------+
| - Basic | 41 | (0.41) | (1.75) |
+--------------------------------------+------+----------+-----------+
The accompanying notes constitute an integral part of the financial statements.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
+-------------------------------+------+-----------+-----------+-----------+
| Amounts presented in EUR '000 |Note | 31 | 31 | 31 |
| | | December | December | December |
| | | 2009 | 2008 | 2007 |
| | | | (as | (as |
| | | |restated) |restated) |
+-------------------------------+------+-----------+-----------+-----------+
| ASSETS | | | | |
+-------------------------------+------+-----------+-----------+-----------+
| | | | | |
+-------------------------------+------+-----------+-----------+-----------+
| Non-current assets | | | | |
+-------------------------------+------+-----------+-----------+-----------+
| Property, plant and equipment | 18 | - | - | 27,880 |
+-------------------------------+------+-----------+-----------+-----------+
| Goodwill & other intangibles | 19 | - | - | 166,784 |
+-------------------------------+------+-----------+-----------+-----------+
| Investments in associates | 20 | 228 | - | 3,886 |
+-------------------------------+------+-----------+-----------+-----------+
| Loans and advances to | 21 | - | - | 1,165,057 |
| customers (long term) | | | | |
+-------------------------------+------+-----------+-----------+-----------+
| Investment portfolio | 22 | 193,886 | 248,508 | 259,944 |
+-------------------------------+------+-----------+-----------+-----------+
| Total non-current assets | | 194,114 | 248,508 | 1,623,551 |
+-------------------------------+------+-----------+-----------+-----------+
| Current assets | | | | |
+-------------------------------+------+-----------+-----------+-----------+
| Trading portfolio and other | 23 | 18,499 | 5,965 | 179,802 |
| financial assets at fair | | | | |
| value through profit & loss | | | | |
+-------------------------------+------+-----------+-----------+-----------+
| Derivative financial | 24 | 80 | - | 11,529 |
| instruments | | | | |
+-------------------------------+------+-----------+-----------+-----------+
| Loans and advances to | 21 | - | - | 202,968 |
| customers | | | | |
+-------------------------------+------+-----------+-----------+-----------+
| Other assets | 25 | 969 | 607 | 91,474 |
+-------------------------------+------+-----------+-----------+-----------+
| Deferred tax assets | 27 | - | - | 7,098 |
+-------------------------------+------+-----------+-----------+-----------+
| Cash and balances with | 28 | - | - | 52,796 |
| Central Bank | | | | |
+-------------------------------+------+-----------+-----------+-----------+
| Loans and advances to | 29 | - | - | 205,055 |
| financial institutions | | | | |
+-------------------------------+------+-----------+-----------+-----------+
| Cash and other equivalents | 30 | 126,842 | 148,610 | 322,355 |
+-------------------------------+------+-----------+-----------+-----------+
| Total current assets | | 146,390 | 155,182 | 1,073,077 |
+-------------------------------+------+-----------+-----------+-----------+
| Non current assets held for | 26 | - | - | 53,727 |
| sale | | | | |
+-------------------------------+------+-----------+-----------+-----------+
| TOTAL ASSETS | | 340,504 | 403,689 | 2,750,355 |
+-------------------------------+------+-----------+-----------+-----------+
| EQUITY AND LIABILITIES | | | | |
+-------------------------------+------+-----------+-----------+-----------+
| Shareholders equity | | | | |
+-------------------------------+------+-----------+-----------+-----------+
| Share capital | 39 | 147 | 147 | 147 |
+-------------------------------+------+-----------+-----------+-----------+
| Share premium | 39 | 382,491 | 400,443 | 400,443 |
+-------------------------------+------+-----------+-----------+-----------+
| Revaluation reserve | | 4,975 | - | (2,570) |
+-------------------------------+------+-----------+-----------+-----------+
| Other reserves | 40 | 3 | - | 16,587 |
+-------------------------------+------+-----------+-----------+-----------+
| Retained (losses) /earnings | | (248,139) | (197,049) | 72,491 |
+-------------------------------+------+-----------+-----------+-----------+
| Total equity attributable to | | 139,478 | 203,541 | 487,099 |
| shareholders' of the parent | | | | |
| Company | | | | |
+-------------------------------+------+-----------+-----------+-----------+
| Minority rights | | - | - | 290,248 |
+-------------------------------+------+-----------+-----------+-----------+
| TOTAL EQUITY | | 139,478 | 203,541 | 777,347 |
+-------------------------------+------+-----------+-----------+-----------+
| LIABILITIES | | | | |
+-------------------------------+------+-----------+-----------+-----------+
| Non-current | | | | |
+-------------------------------+------+-----------+-----------+-----------+
| Issued debt securities | 31 | - | - | 25,283 |
+-------------------------------+------+-----------+-----------+-----------+
| Retirement benefit | 32 | - | - | 1,140 |
| obligations | | | | |
+-------------------------------+------+-----------+-----------+-----------+
| Long term loans | 33 | 198,104 | 198,393 | - |
+-------------------------------+------+-----------+-----------+-----------+
| Total non-current liabilities | | 198,104 | 198,393 | 26,422 |
+-------------------------------+------+-----------+-----------+-----------+
| Current liabilities | | | | |
+-------------------------------+------+-----------+-----------+-----------+
| Due to financial institutions | 34 | - | - | 433,941 |
+-------------------------------+------+-----------+-----------+-----------+
| Due to Customers | 35 | - | - | 1,422,139 |
+-------------------------------+------+-----------+-----------+-----------+
| Financial liabilities at fair | 36 | 1,687 | - | - |
| value through profit & loss | | | | |
+-------------------------------+------+-----------+-----------+-----------+
| Derivative financial | 24 | 21 | - | 14,570 |
| instruments | | | | |
+-------------------------------+------+-----------+-----------+-----------+
| Current tax liabilities | 37 | - | - | 10,498 |
+-------------------------------+------+-----------+-----------+-----------+
| Deferred tax liability | 27 | 99 | - | 6,928 |
+-------------------------------+------+-----------+-----------+-----------+
| Other liabilities | 38 | 1,115 | 1,755 | 14,170 |
+-------------------------------+------+-----------+-----------+-----------+
| Total current liabilities | | 2,923 | 1,755 | 1,902,247 |
+-------------------------------+------+-----------+-----------+-----------+
| Liabilities directly | 43 | - | - | 44,339 |
| associated with assets held | | | | |
| for sale | | | | |
+-------------------------------+------+-----------+-----------+-----------+
| TOTAL LIABILITIES | | 201,027 | 200,148 | 1,973,008 |
+-------------------------------+------+-----------+-----------+-----------+
| | | | | |
+-------------------------------+------+-----------+-----------+-----------+
| TOTAL LIABILITIES AND EQUITY | | 340,504 | 403,689 | 2,750,355 |
+-------------------------------+------+-----------+-----------+-----------+
The accompanying notes constitute an integral part of the financial statements
Athens, 26 March 2010
+------------------------------------+------------------------------------+
| Angeliki Frangou | Loukas Valetopoulos |
| | |
| | |
| | |
| _________________________________ | _________________________________ |
| Chairman, Non - Executive Director | Chief Executive Officer, Director |
+------------------------------------+------------------------------------+
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
+--------------------------+------+---------+----------+-------------+----------+-----------+----------+----------+----------+
| | | Attributable to shareholders of the Parent Company | |
+--------------------------+------+--------------------------------------------------------------------+---------------------+
| |Note | Share | Share |Revaluation | Other | Retained | Total |Minority | Total |
| | |Capital | Premium | Reserve |Reserves | Earnings | |Interest | |
| | | | | | | / | | | |
| | | | | | | (losses) | | | |
+--------------------------+------+---------+----------+-------------+----------+-----------+----------+----------+----------+
| | | | | | | | | | |
+--------------------------+------+---------+----------+-------------+----------+-----------+----------+----------+----------+
| Amounts presented in EUR | | | | | | | | | |
| '000 | | | | | | | | | |
+--------------------------+------+---------+----------+-------------+----------+-----------+----------+----------+----------+
| Opening balance as at | | 147 | 400,443 | - | - | (197,049) | 203,541 | - | 203,541 |
| 1st January 2009 | | | | | | | | | |
+--------------------------+------+---------+----------+-------------+----------+-----------+----------+----------+----------+
| Share premium reduction | 39 | - | (17,951) | - | - | - | (17,951) | - | (17,951) |
| & return to shareholders | | | | | | | | | |
+--------------------------+------+---------+----------+-------------+----------+-----------+----------+----------+----------+
| Transactions with owners | | - | (17,951) | - | - | - | (17,951) | - | (17,951) |
+--------------------------+------+---------+----------+-------------+----------+-----------+----------+----------+----------+
| | | | | | | | | | |
+--------------------------+------+---------+----------+-------------+----------+-----------+----------+----------+----------+
| Net result for the | | - | - | - | - | (51,090) | (51,090) | - | (51,090) |
| period 01/01-31/12/2009 | | | | | | | | | |
+--------------------------+------+---------+----------+-------------+----------+-----------+----------+----------+----------+
| Other comprehensive | | | | | | | | | |
| income: | | | | | | | | | |
+--------------------------+------+---------+----------+-------------+----------+-----------+----------+----------+----------+
| Available for sale: | | | | | | | | | |
+--------------------------+------+---------+----------+-------------+----------+-----------+----------+----------+----------+
| - Gains/ losses | | - | - | 12,701 | - | - | 12,701 | - | 12,701 |
| directly recognized in | | | | | | | | | |
| equity | | | | | | | | | |
+--------------------------+------+---------+----------+-------------+----------+-----------+----------+----------+----------+
| - Reclassification to | | - | - | (7,727) | - | - | (7,727) | - | (7,727) |
| profit or loss | | | | | | | | | |
+--------------------------+------+---------+----------+-------------+----------+-----------+----------+----------+----------+
| Exchange differences on | | - | - | - | 3 | - | 3 | - | 3 |
| translating foreign | | | | | | | | | |
| operations | | | | | | | | | |
+--------------------------+------+---------+----------+-------------+----------+-----------+----------+----------+----------+
| Total comprehensive | | - | - | 4,975 | 3 | (51,090) | (46,112) | - | (46,112) |
| income / (loss) | | | | | | | | | |
| recognised for the | | | | | | | | | |
| period | | | | | | | | | |
+--------------------------+------+---------+----------+-------------+----------+-----------+----------+----------+----------+
| | | | | | | | | | |
+--------------------------+------+---------+----------+-------------+----------+-----------+----------+----------+----------+
| Balance as at 31 | | 147 | 382,491 | 4,975 | 3 | (248,139) | 139,478 | - | 139,478 |
| December 2009 | | | | | | | | | |
+--------------------------+------+---------+----------+-------------+----------+-----------+----------+----------+----------+
The accompanying notes constitute an integral part of the financial statements
+-------------------------+---------+----------+-------------+----------+-----------+-----------+-----------+-----------+
| | Attributable to shareholders of the Parent Company | |
+-------------------------+---------------------------------------------------------------------+-----------------------+
| | Share | Share |Revaluation | Other | Retained | Total | Minority | Total |
| |Capital | Premium | Reserve |Reserves | Earnings | | Interest | |
| | | | | | / | | | |
| | | | | | (losses) | | | |
+-------------------------+---------+----------+-------------+----------+-----------+-----------+-----------+-----------+
| | | | | | | | | |
+-------------------------+---------+----------+-------------+----------+-----------+-----------+-----------+-----------+
| Amounts presented in EUR | | | | | | | | |
| '000 | | | | | | | | |
+-------------------------+---------+----------+-------------+----------+-----------+-----------+-----------+-----------+
| Opening balance as at | 147 | 400,443 | (2,570) | 16,587 | 72,492 | 487,099 | 290,248 | 777,347 |
| 1st January 2008 | | | | | | | | |
+-------------------------+---------+----------+-------------+----------+-----------+-----------+-----------+-----------+
| Dividend relating to | - | - | - | - | - | (22,105) | (9,829) | (31,935) |
| 2008 | | | | | | | | |
+-------------------------+---------+----------+-------------+----------+-----------+-----------+-----------+-----------+
| Sale of subsidiary | - | - | - | (16,587) | 16,694 | 107 | (248,643) | (248,536) |
+-------------------------+---------+----------+-------------+----------+-----------+-----------+-----------+-----------+
| Transactions with | - | - | - | (16,587) | 16,694 | (21,998) | (258,472) | (280,470) |
| owners | | | | | | | | |
+-------------------------+---------+----------+-------------+----------+-----------+-----------+-----------+-----------+
| | | | | | | | | |
+-------------------------+---------+----------+-------------+----------+-----------+-----------+-----------+-----------+
| Net result for the | - | - | - | - | (264,129) | (264,129) | (41,806) | (305,934) |
| period 01/01-31/12/2008 | | | | | | | | |
+-------------------------+---------+----------+-------------+----------+-----------+-----------+-----------+-----------+
| Other comprehensive | | | | | | | | |
| income: | | | | | | | | |
+-------------------------+---------+----------+-------------+----------+-----------+-----------+-----------+-----------+
| Available for sale: | | | | | | | | |
+-------------------------+---------+----------+-------------+----------+-----------+-----------+-----------+-----------+
| - Gains/ losses | - | - | (2,318) | - | - | (2,318) | (8,935) | (11,253) |
| directly recognized in | | | | | | | | |
| equity | | | | | | | | |
+-------------------------+---------+----------+-------------+----------+-----------+-----------+-----------+-----------+
| - Reclassification to | - | - | 4,888 | - | - | 4,888 | 18,964 | 23,852 |
| profit or loss | | | | | | | | |
+-------------------------+---------+----------+-------------+----------+-----------+-----------+-----------+-----------+
| Total comprehensive | - | - | 2,570 | - | (264,129) | (261,559) | (31,776) | (293,336) |
| income / (loss) | | | | | | | | |
| recognised for the | | | | | | | | |
| period | | | | | | | | |
+-------------------------+---------+----------+-------------+----------+-----------+-----------+-----------+-----------+
| | | | | | | | | |
+-------------------------+---------+----------+-------------+----------+-----------+-----------+-----------+-----------+
| Balance as at 31 | 147 | 400,443 | - | - | (174,944) | 203,541 | - | 203,541 |
| December 2008 | | | | | | | | |
+-------------------------+---------+----------+-------------+----------+-----------+-----------+-----------+-----------+
The accompanying notes constitute an integral part of the financial statements
CONSOLIDATED CASH FLOW STATEMENT
+------------------------------------+-----------+-----------+------------------------+
| Amounts presented in EUR '000 | Note | 31 | 31 |
| | | December | December |
| | | 2009 | 2008 |
+------------------------------------+-----------+-----------+------------------------+
| Cash flows from operating | | | |
| activities | | | |
+------------------------------------+ +-----------+------------------------+
| (Loss)/Profit before tax of | | (50,994) | (218,795) |
| continuing operations | | | |
+------------------------------------+-----------+-----------+------------------------+
| Adjustments for: | | | |
+------------------------------------+-----------+-----------+------------------------+
| Add: Impairment losses on loans, | | 81,717 | 185,146 |
| financial and non financial | | | |
| assets | | | |
+------------------------------------+-----------+-----------+------------------------+
| Profit /(loss) from revaluation of | | (671) | 904 |
| financial assets at fair value | | | |
| through Profit & Loss | | | |
+------------------------------------+-----------+-----------+------------------------+
| Profit/(loss) from sale of a.f.s. | | (7,939) | 44,282 |
| portfolio at fair value | | | |
+------------------------------------+-----------+-----------+------------------------+
| Share of profit /loss from | | (216) | - |
| associates | | | |
+------------------------------------+-----------+-----------+------------------------+
| Interest and other non cash | | 6,806 | 3,151 |
| expenses | | | |
+------------------------------------+-----------+-----------+------------------------+
| Dividends received | | (18,360) | (729) |
+------------------------------------+-----------+-----------+------------------------+
| Exchange differences | | 2,444 | (7,304) |
+------------------------------------+ +-----------+------------------------+
| Cash Flows from operating | | 12,588 | 6,665 |
| activities before changes in | | | |
| working capital | | | |
+------------------------------------+-----------+-----------+------------------------+
| Changes in working capital: | | | |
+------------------------------------+-----------+-----------+------------------------+
| Net (increase)/decrease in trading | | (11,570) | (6,869) |
| securities | | | |
+------------------------------------+-----------+-----------+------------------------+
| Net (increase)/decrease in other | | (362) | (1,916) |
| assets | | | |
+------------------------------------+-----------+-----------+------------------------+
| Net increase/(decrease) in other | | (647) | (171) |
| liabilities | | | |
+------------------------------------+-----------+-----------+------------------------+
| Cash flows from operating | | 9 | (2,301) |
| activities before payment of | | | |
| income tax | | | |
+------------------------------------+-----------+-----------+------------------------+
| Net cash flows from operating | | - | (69,445) |
| activities of discontinued | | | |
| operations | | | |
+------------------------------------+-----------+-----------+------------------------+
| Net cash flows from operating | | 9 | (71,746) |
| activities | | | |
+------------------------------------+-----------+-----------+------------------------+
| Cash flows from investing | | | |
| activities | | | |
+------------------------------------+-----------+-----------+------------------------+
| Acquisition of financial assets | | 1,628 | - |
| at fair value through profit & | | | |
| loss | | | |
+------------------------------------+-----------+-----------+------------------------+
| Acquisition/Sale of subsidiaries | | - | (1,877) |
| and associates | | | |
+------------------------------------+-----------+-----------+------------------------+
| Proceeds from a.f.s. portfolio | | 2,075 | (448,727) |
+------------------------------------+-----------+-----------+------------------------+
| Interest received | | 2,417 | 8,158 |
+------------------------------------+-----------+-----------+------------------------+
| Dividend received from investment | | 1,905 | 729 |
| activities | | | |
+------------------------------------+-----------+-----------+------------------------+
| Dividends received from financial | | 198 | |
| assets at fair value through P&L | | | |
+------------------------------------+-----------+-----------+------------------------+
| Net cash flows from investing | | - | (58,776) |
| activities of discontinued | | | |
| operations | | | |
+------------------------------------+ +-----------+------------------------+
| | | | |
+------------------------------------+-----------+-----------+------------------------+
| Net cash flow from investing | | 8,223 | (500,493) |
| activities | | | |
+------------------------------------+-----------+-----------+------------------------+
| Cash flows from financing | | | |
| activities | | | |
+------------------------------------+-----------+-----------+------------------------+
| Share premium return | | (17,951) | - |
+------------------------------------+-----------+-----------+------------------------+
| Dividend paid | | | (22,105) |
+------------------------------------+-----------+-----------+------------------------+
| Repayments of borrowings | | (289) | (70,000) |
+------------------------------------+-----------+-----------+------------------------+
| Interest paid | | (9,223) | (11,309) |
+------------------------------------+-----------+-----------+------------------------+
| Proceeds from borrowings | | - | 268,393 |
+------------------------------------+-----------+-----------+------------------------+
| Net cash flows from financing | | - | (10,804) |
| activities of discontinued | | | |
| operations | | | |
+------------------------------------+-----------+-----------+------------------------+
| Net cash flow from financing | | (27,463) | 154,174 |
| activities | | | |
+------------------------------------+-----------+-----------+------------------------+
| | | | |
+------------------------------------+-----------+-----------+------------------------+
| Net increase/(decrease) in cash | | (19,231) | (418,066) |
| and cash equivalents | | | |
+------------------------------------+-----------+-----------+------------------------+
| Cash and cash equivalents at the | | 148,610 | 559,372 |
| beginning of the period | | | |
+------------------------------------+-----------+-----------+------------------------+
| Effect of exchange rate | | (2,537) | 7,304 |
| fluctuations on cash and cash | | | |
| equivalents | | | |
+------------------------------------+-----------+-----------+------------------------+
| Cash and cash equivalents at the | 30 | 126,842 | 148,610 |
| end of the financial year | | | |
+------------------------------------+-----------+-----------+------------------------+
The accompanying notes constitute an integral part of the financial statements.
NOTES TO THE FINANCIAL STATEMENTS
1. GENERAL INFORMATION
Country of incorporation
IRF was incorporated on 8 September 2005 under the Bermuda Companies Act 1981.
The Company was initially listed on AIM on 14 November 2005 and on 19 January
2009 transferred to the Specialist Fund Market (the "SFM"), a regulated market
operated by the London Stock Exchange plc. The Company's registered office is at
Canon's Court 22 Victoria Street, Hamilton HM12, Bermuda.
Principal Activities
The Group was initially engaged in the provision of banking, financial and
insurance services. IRF was formed as an investing company to serve as a vehicle
for the acquisition of one or more businesses in the financial services industry
in Europe, with a primary focus on credit institutions and insurance companies
in Greece, Bulgaria, Romania and Turkey.
On 29 June 2006, the Company acquired a controlling interest in Proton
Investment Bank, a Greek bank listed on the Athens Stock Exchange. Subsequent to
this acquisition, Proton Investment Bank merged with Omega Bank, resulting in
IRF having an interest in the newly merged entity, Proton Bank. Proton Bank and
its subsidiaries operate in the sectors of retail, corporate and investment
banking, portfolio management, insurance and other financial services. Proton
Bank is licensed by the Bank of Greece to operate as a financial institution in
Greece. Proton Bank, which is established in Greece and is supervised by the
Bank of Greece, operates through a network of 28 branches.
On 24 September 2008, IRF sold a 15.95% interest in Proton Bank from its 20.6%
holding in Proton Bank. Following such disposal, the IRF directors holding
positions on the Board of Directors of Proton Bank resigned. As at 31 December
2008, IRF had disposed of its entire investment in Proton Bank. The results of
Proton Bank's Group were consolidated in the financial statements of IRF, as
discontinued operations, up to the date of the disposal (see notes 5 and 17).
IRF holds approximately 11% of the issued shares in Marfin Investment Group
('MIG') which, as at 31 December 2009, is the most significant investment in the
Company's portfolio. MIG invests in private equity, privatisations and
infrastructure projects and principally operates in Greece, Cyprus and South
East Europe. All equity holdings are publicly listed in stock exchanges.
2. BASIS OF FINANCIAL STATEMENT PREPARATION
* 2.1 Statement of Compliance
The financial statements of the Group for the year ended 31 December 2009 have
been prepared according to the International Financial Reporting standards
(IFRS), which were published by the International Accounting Standards Board
(IASB) and in compliance with their interpretations, which have been published
by the International Financial Reporting Interpretations Committee (IFRIC) and
have been adopted by the European Union.
The Group has adopted all International Accounting Standards, IFRS and their
interpretations which apply to the Group's activities.
* 2.2 Basis of Measurement
The financial statements have been prepared on the historical cost basis except
for the following items which are measured at fair value:
· Financial assets and liabilities at fair value through Profit & Loss
(including derivatives),
· Financial assets available for sale, and
· Investment Properties, and
· Land and Buildings.
* 2.3 Functional and Presentation Currency
The current financial statements are presented in Euro, which is the functional
currency of the parent company. The functional currency is the currency of the
primary economic environment in which an entity operates and is normally the one
in which it primarily generates and expends cash. Management used its judgment
to determine the functional currency that most faithfully represents the
economic effects of the underlying transactions, events and conditions.
All amounts are presented in thousand Euros unless mentioned otherwise. Due to
rounding, percentages and numbers presented throughout the condensed separate
and consolidated financial statements may not match the counterparts in the
financial statements. All amount expressed in dollars, are US dollars.
* 2.4 Comparative Figures
Consolidated financial position and statement of comprehensive income for the
comparative periods of 2008 and 2007 have been adjusted, in order to follow the
"current - non current" format of financials statements that most funds use. Due
to the fact that in previous periods, the consolidation included accounts of
Proton Bank, the comparative periods were originally presented in "order of
liquidity" format that is used by financial institutions. This adjustment is for
presentation purposes only and has no effect on total profit and loss or
reclassifications between financial position accounts.
Also due to the implementation of changes in IAS 1 "Presentation of Financial
statements" and the adjustment to the presentation of financial statements, a
third comparative period (2007) must be presented in the statement of financial
position.
* 2.5 Use of Estimates
The preparation of the financial statements in accordance with the IFRS requires
management to make estimates, judgements and assumptions that affect the
application of accounting policies and the reporting amounts of assets,
liabilities, income and expenses.
Assumptions and estimates are reviewed on an ongoing basis and are revised based
on experience and other factors. Revisions of the accounting estimated are
recognised in the period in which estimates are revised and in any future
periods affected. Assumptions and estimates include expectations on future
events and outcomes that are considered as reasonable given the current
conditions. Actual results may differ from these estimates.
Significant areas of estimates uncertainty and items that are significantly
affected by judgements in applying accounting policies are presented in
paragraph 4.
* 2.6 Adoption of new standards, amendments and interpretations with effective
date as of 1 January 2009:
* 2.6.1 Change in accounting policies
Certain new standards, amendments to standards and interpretations have been
issued that are mandatory for periods beginning during the current reporting
period and subsequent reporting periods. The Group's evaluation of the effect
of these new standards, amendments to standards and interpretations is as
follows:
- IAS 1 "Presentation of Financial Statements" (revised in 2007 and applied by
companies for annual periods starting on or after 01/01/2009). IAS 1 (Revised
2007) affects the presentation of owner changes in equity. Furthermore, the
revised version of the Standard brings forward changes in terms used as well as
the presentation of the Financial Statements (in certain cases the presentation
of a third Statement of Financial Position is required for the commencement of
the earliest comparative period). The new definitions however do not create any
changes to the rules for recognition, measurement, or disclosure of certain
transactions and other events required by the rest of the Standards. The revised
Standard foresees the presentation of one statement, the Statement of
Comprehensive Income, or the presentation of two statements (one separate Income
Statement and one Statement of Comprehensive Income). The Group has decided to
present one statement. The interim financial statements have been prepared based
on the requirements of IAS 1.
Moreover, in previous periods the management prepared the consolidated financial
statements in the format of "order of liquidity" according to IAS 1 due to the
nature of the operations of the consolidated group of Proton Bank. The format of
"order of liquidity" is used as best practise by all financial institutions. Due
to the disposal of the entire Proton Group, the management has decided to adopt
the presentation of "current and non-current assets", and "current and
non-current liabilities", as separate classifications in its statement of
financial position, as most funds and investing entities implement in their
financial statements. The aforementioned adoption did not lead to any
reclassifications of assets or liabilities.
The statement of comprehensive income analysis is based upon the 'nature of
expense' method.
- IFRS 8 "Operating Segments" (issued in 2006 and applied by companies for
periods starting on or after 01/01/2009). IFRS 8 replaces IAS 14 "Segment
Reporting". The new IFRS requires a "management approach" to the Group's
presentation of financial information under segment reporting. Information
disclosed is basically information that the management uses for internal
reporting so as to assess the productivity of segments, as well as the manner in
which resources are allocated. Such reporting might differ from information used
during the preparation of the balance sheet and the income statement
* In previous periods management prepared consolidated segment analysis based
upon the operations of the consolidated group of Proton Bank. After the
disposal of Proton Bank, the directors determined that IRF's continuing
business, as an investment company, would be managed by the directors as a
whole, and no segmental information would be reported to the CEO. Therefore, IRF
does not present segmental financial information. Approximately 88% of the
Groups dividend income (16,3 million euros) is from its investment in a listed
company in Athens Stock exchange and all dividend income is from investements in
Europe. The revenues of IRF for the period ending 31 December 2009 derive from
the following geographical areas:
+----------------------------------------+---------+--------+---------+
| Amounts presented in EUR '000 | Europe | USA | Total |
+----------------------------------------+---------+--------+---------+
| Income | | | |
+----------------------------------------+---------+--------+---------+
| Interest and similar income | 1,768 | 649 | 2,417 |
+----------------------------------------+---------+--------+---------+
| Dividend Income | 18,360 | - | 18,360 |
+----------------------------------------+---------+--------+---------+
| Realised gain from disposal of | 12 | 10 | 22 |
| derivative financial instruments | | | |
+----------------------------------------+---------+--------+---------+
| Realised gain from disposal of | 7,939 | - | 7,939 |
| available-for-sale financial assets | | | |
+----------------------------------------+---------+--------+---------+
| Realised gain from disposal of | 13,630 | 1,208 | 14,837 |
| financial assets at fair value through | | | |
| Profit & Loss | | | |
+----------------------------------------+---------+--------+---------+
| Unrealised gain from valuation of | (300) | 970 | 670 |
| financial assets at fair value through | | | |
| Profit & Loss | | | |
+----------------------------------------+---------+--------+---------+
| Unrealised gain from valuation of | - | 1 | 1 |
| derivative financial instruments | | | |
+----------------------------------------+---------+--------+---------+
| Share of profits / (losses) of | - | 216 | 216 |
| associates | | | |
+----------------------------------------+---------+--------+---------+
| Total operating income | 41,409 | 3,053 | 44,462 |
+----------------------------------------+---------+--------+---------+
| | | | |
+----------------------------------------+---------+--------+---------+
All revenues from continuing operations for the period ending 2008 derive
exclusively from European activities.
- IFRS 7 "Improvement on disclosure requirements for financial instruments" The
improvement inducts additional disclosure requirements regarding fair value
measurements and reinforces existing principles for disclosures about the
liquidity risk associated with financial instruments. Relating to fair value,
the improvement introduce a three-level hierarchy for fair value measurement
disclosures and requires entities to provide additional disclosures about the
relative reliability of fair value measurements.
* In addition, the amendments clarify and enhance the existing requirements
for the disclosure of liquidity risk regarding derivatives and other assets used
for managing liquidity. Comparative information has not been adjusted since it
is not required.
* 2.6.2 Other new standards, amendments and interpretations with effective
date as of 1 January 2009, with no applicability or significant impact:
(a) IAS 23: (Revised 2007) "Borrowing Costs" (effective from 1 January 2009)
The revised IAS 23 removes the option of immediately expensing borrowing costs
directly attributable to the acquisition, construction, or production of a
qualifying asset as part of the cost of that asset;
(b) IFRS 2: "Share-based Payment" - Amendment 2008: Vesting Conditions and
Cancellations (effective from 1 January 2009)
This amendment clarifies that only service conditions and performance conditions
are vesting conditions, while all other features need to be included in the
grant date fair value. The amendment is not applicable at present for Group
activities;
(c) IAS 32: Financial Instruments: Presentation and IAS 1: Presentation of
Financial Statements - Amendment 2008: Puttable Financial Instruments and
Obligations Arising on Liquidation (effective from 1 January 2009)
These amendments address the classifications of some puttable financial
instruments as well as instruments or their components that impose on the entity
an obligation to deliver to another party a pro rata share of the net assets of
the entity only on liquidation. The above mentioned amendments are not
applicable at present for Group activities;
(d) IAS 39 (Amendment) - "Financial instruments: recognition and measurement -
Reassessment of embedded derivatives"
This amendment requires that an entity assesses whether an embedded derivative
is required to be separated from the host contract and accounted for as a
derivative on reclassification of a financial asset out of the fair value
through profit or loss category.
(e)Amendments of IAS 27: "Consolidated and Separate Financial Statements" and
IFRS 1 "First-Time adoption of International Financial Reporting Standards" with
reference to cost of investments in subsidiaries, joint ventures and associates.
This amendment mainly addresses the issue that the cost of investments in
subsidiaries, associates and joint ventures, in the standalone financial
statements of an entity, is no longer affected by profit distribution formulated
prior to the purchase date of these investments. This amendment has also led to
changes in IAS 36: "Impairment of Assets", with the addition of indications on
the impairment of investments based on the effect on equity due to dividend
distribution of such companies to companies that have invested in them.
(f) IFRIC 13 - "Customer Loyalty Programmes"
This interpretation clarifies the treatment of entities that grant loyalty award
credits such as "points" and "travel miles" to customers who buy other goods
or services. This interpretation is not relevant to the Group's operations.
(g) IFRIC 15 - "Agreements for the construction of real estate"
This interpretation addresses the diversity in accounting for real estate sales.
Some entities recognise revenue in accordance with IAS 18 (i.e. when the risks
and rewards in the real estate are transferred) and others recognise revenue as
the real estate is developed in accordance with IAS 11. The interpretation
clarifies which standard should be applied to particular. This interpretation is
not relevant to the Group's operations.
(h) IFRIC 16 - "Hedges of a net investment in a foreign operation"
This interpretation applies to an entity that hedges the foreign currency risk
arising from its net investments in foreign operations and qualifies for hedge
accounting in accordance with IAS 39. The interpretation provides guidance on
how an entity should determine the amounts to be reclassified from equity to
profit or loss for both the hedging instrument and the hedged item. This
interpretation is not relevant to the Group as the Group does not apply hedge
accounting for any investment in a foreign operation.
(i) IFRIC 18 "Transfer of assets from customers"
This interpretation does not apply to the Group's activities.
(j) Annual improvements 2008
During 2008, IASB issued the annual improvements to IFRS for 2008, as a part of
the annual improvement program. These improvements include small amendments to
some Standards, which aim to induct more accurate definition of rules and to
eliminate possible inconsistency between Standards.
* 2.6.3 New standards, amendments and interpretations to existing standards
that are not yet effective and have not been adopted early by the Group:
(a) IFRS 3: "Business Combinations" - Revised 2008 and subsequent amendments in
IAS 27, 28 and 31 (effective the first annual reporting period beginning on or
after 1 July 2009)
The revised standard introduces significant amendments for the application of
the acquisition method for business combinations. Among other changes the
standard introduces changes to the accounting requirements for the loss of
control of a subsidiary and for changes in the Group's interest in subsidiaries.
The revised IFRS 3 applies for business combinations for which the acquisition
date is on or after the beginning of the first annual reporting period beginning
on or after 1 July 2009, while no consolidation adjustments are required for the
period before the revised standard will become effective. Thus, the adoption of
the revised standards will have no significant impact on the Group's financial
statements.
(b)IAS 39 (Amended) "Financial Instruments: Recognition and Measurement" -
Eligible Hedged Items
This amendment clarifies how the principles that determine whether a hedged risk
or portion of cash flows is eligible for designation should be applied in
particular situations.
(c)IFRS 2 (Amendment) - "Group Cash-settled Share-based Payment Arrangements"
The amendment clarifies how an individual subsidiary in a group, in its own
financial statements, should account for some share-based payment arrangements
that are settled in cash on group level. The amendment is effective for periods
beginning on or after 1 January 2010. This amendment is not applicable for the
Group.
(d) IFRS 9: "Financial Instruments": On 12 November 2009, the IASB issued IFRS 9
Financial Instruments as the first step in its project to replace IAS 39
Financial Instruments: Recognition and Measurement. IFRS 9 introduces new
requirements for classifying and measuring financial assets that must be applied
starting 1 January 2013, with early adoption permitted. The IASB intends to
expand IFRS 9 during 2010 to add new requirements for classifying and measuring
financial liabilities, derecognition of financial instruments, impairment, and
hedge accounting. By the end of 2010 IFRS 9 will be a complete replacement for
IAS 39.
The new standard negates the four classification categories of IAS 39 and
imposes the classification of all financial assets in two categories (amortized
cost and fair value), according to the business model of each corporate entity
and the characteristics of the financial asset. IFRS 9 eliminates the
requirement of IAS 39, for the separation of embedded derivates in financial
assets. The standard imposes the overall evaluation of both derivative and
financial asset for the determination of cash flows being capital and capital on
interest. IFRS permits reclassifications between fair value and amortized cost
categories only if there is a change in the business management model of the
financial assets.
IFRS 9 obligatory adoption is for periods beginning on or after 1 January 2013
and has a retrospective effect. Early adoption is permitted. The standard has
not yet been endorsed by the European Union.
Management is now in the process of evaluating the effect of the new standard on
the Company's financial statements.
(e) IFRS for SME's: This standard was issued by IASB on 9 July 2009 and
constitutes a simplified version of the IFRS's that are aimed at the financial
reporting requirements of non public enterprises that wish to apply IFRS
accounting. IRF will not adopt this standard since its shares are admitted to
trading on the SFM.
(f) Amendment to IAS 24 "Related Party Disclosures". The amended standard aims
to omit some of the required details for related party transactions between
state-controlled entities, while still providing sufficient information to users
of financial statements.
(g) IAS 32 (Amendment) - "Financial instruments: Presentation - Classifications
of rights issues"
The amendment revises the definition of financial liability of IAS 32 in order
to classify options or rights on stocks as debt instruments. The amendment is
effective for periods beginning on or after February 1st 2010.
(h)IFRS 1(Amendment) "First time adoption - Additional exemptions for first
time adopters" (effective for annual periods beginning on or after 1 July 2010)
The amendments exempt retrospective application of IFRS to assets measurement
for oil, gas and lease sectors. This amendment does not apply to the Group.
(i) IFRS 1 (Amendment) "First time adoption - Limited Scope Exemption for IFRS
7 Disclosures" (effective for annual periods beginning on or after 1 July 2010)
This amendment provides exemptions for first time adopters relating to
presentation of comparative financial information that is required from IFRS 7.
This amendment does not apply to the Group.
(j) IFRIC 14 (Amendment) - "Prepayments of a Minimum Funding Requirement"
(effective date for mandatory adoption 1st January 2011)
The amendment applies in the limited circumstances when an entity is subject to
minimum funding requirements and makes an early payment of contributions to
cover those requirements. The amendment permits such an entity to treat the
benefit of such an early payment as an asset. This amendment does not apply to
the Group.
(k) IFRIC 17: "Distribution of non-cash assets to owners" (effective for annual
periods beginning on or after 1 July 2009)
This interpretation, issued on 27 November 2008, provides guidance to an entity
in order to recognize and subsequently measure a liability arising from the
distribution of non-cash assets to owners;
(l) IFRIC 19 "Extinguishing Financial Liabilities with Equity Instruments"
IFRIC 19 considers the accounting treatment when an entity renegotiates the
terms of a financial liability with its creditor and the creditor agrees to
accept the entity's shares or other equity instruments to settle the financial
liability fully or partially.
Before the issuance of IFRIC 19, there were multiple choices in accounting
treatment of these transactions. The interpretation is effective for annual
periods beginning on or after 1 July 2010 with earlier application permitted.
IFRIC 19 is relevant only for the debtor's accounting treatment for these
transactions. It does not apply when the creditor is also an immediate or
intermediate stock holder and acts upon his status, or the debtor and the entity
are controlled by the same party after the transaction, and the substance of the
transaction relates to a capital return from or to the entity. Financial
liabilities that are extinguished with equity instruments in accordance with the
initial terms of the financial liability are also outside the scope of this
IFRIC.
(m) Annual improvements 2009
During 2009, IASB issued the annual improvements to IFRS for 2009, a series of
adjustments in 12 Standards, as a part of the annual improvement program. The
annual improvement program of IASB aims to make necessary but not urgent
adjustments to IFRS's and will not be a part of bigger revision program.
Most adjustments are effective for annual periods begging on or after 1 January
2010, with early adoption allowed. The Group has no intention of early adoption.
Based on the current Group structure, management does not expect significant
effect from the application of new Standards and interpretations.
3. SUMMARY OF IMPORTANT ACCOUNTING POLICIES
* 3.1 Consolidation
Subsidiaries: Subsidiaries are entities controlled by the Company. Control
exists when the Company has the power to govern the financial and operating
policies of an entity so as to obtain benefits from its activities. Control is
presumed to exist if the Company has ownership, directly or indirectly, over
more than half of the voting rights. The Group has also adopted a policy to
consider as a subsidiary an entity over which the Company is in the position to
have effective control, even though it has the ownership of less than half of
the voting rights. The Group has developed several criteria in order to
determine whether it has the "de facto" control over the entity, including the
actual representation of the Company in the Board of Directors and the
management of the subsidiary and the fact that there is no realistic possibility
that all the other shareholders of the subsidiary will be organised and take
control over the entity.
Subsidiaries are fully consolidated using the purchase method from the date on
which control commences until the date that control ceases. The acquisition cost
of a subsidiary is measured at the fair value of the assets given, the shares
issued and the liabilities undertaken on the date of the exchange, plus any
other cost directly attributable to the acquisition. Identifiable assets
acquired, liabilities and contingent liabilities assumed in a business
combination are measured at their fair values on the acquisition date. The
excess between the cost of acquisition and the fair value of the net assets
acquired is recorded as goodwill. If the cost of acquisition is less than the
fair value of the net assets of the subsidiary acquired, the difference is
recognized directly in the income statement.
Intra-group transactions, balances and unrealized gains on transactions between
Group companies are eliminated. Unrealised losses are also eliminated unless the
transaction provides evidence of impairment of the asset transferred. All Group
subsidiaries follow the same accounting policies as those adopted by the Group.
Associates: Associates are entities over which the Group has significant
influence but not control. Significant influence is presumed to exist if the
Group holds between 20% and 50% of the voting rights of another company.
Investments in associates are initially recognised at acquisition cost and
subsequently are accounted under the equity method. At each balance sheet date,
the investments carrying amount is increased by the Group's proportion in the
associate's changes in equity and decreases by the amount of dividends received
from the associate.
The Group's share in the associate's profits or losses, after the acquisition
date, is recognised in the Income Statement whereas, the Group's share in
changes in reserves is recognised directly in equity accounts.
In instances when the Group's participation in the associate's losses is equal
or exceeds its cost of participation, inclusive of any doubtful debts, the Group
does not account for any further losses, except if it has covered all
liabilities or has made payments on behalf of the associate as well as those
arising in the context of the shareholding.
* 3.2 Foreign Currency
The consolidated financial statements are presented in Euro, which is also the
functional currency of the parent company.
(a) Foreign Operations
The assets and liabilities of foreign operations, including goodwill and fair
value adjustments due to business combinations, are translated into Euro at
exchange rates applicable on the balance sheet date. The income and expenses are
translated into Euro at the exchange rate on the dates of transactions or, if it
is impractical, based on the average exchange rates during the reporting period.
Any differences arising from the translation of the assets, liabilities, income
and expenses are recognized into "Other reserves" within equity.
(b) Foreign Currency Transactions
Foreign currency transactions are translated into the respective functional
currency of the Group entities at the exchange rates on the dates of
transactions. Monetary asset and liability denominated in foreign currencies at
the reporting date are retranslated into the functional currency at the exchange
rate on that date. The non-monetary assets denominated in foreign currencies
that are measured at fair value are retranslated to the functional currency at
the exchange rate on the date that the fair value was determined. Foreign
currency differences arising on the execution of foreign currency transactions
and on the retranslation of monetary assets and liabilities are recognized in
profit or loss.
* 3.3 Interest income and expense
Interest income and expense are recognised on an accrual basis in the income
statement for all interest bearing assets and liabilities, based on the
effective interest method. Interest income and expense include the amortization
of any discount or premium, transaction costs or other differences between the
initial cost of an interest bearing financial asset and the amount to be
received or paid at maturity using the effective interest rate method.
The effective interest rate is the rate that exactly discounts any estimated
future payment or receipt through the expected life of a financial instrument
(or until the next date of interest reset), to the carrying amount of the
financial instrument, including any fees or transaction costs incurred.
* 3.4 Fee and commission income
Fees and commissions are generally recognised on an accrual basis when the
relevant services have been provided. Commission and fees arising from
negotiating, or participating in the negotiation of, a transaction for a third
party are recognised on completion of the underlying transaction. Portfolio
management fees and other advisory and service fees are recognized in the income
statement according the applicable service contract, usually on a
time-apportionate basis.
*
* 3.5 Dividend Income
Dividend income is recognized in the income statement when the right to receive
payment is established.
* 3.6 Financial instruments
A financial instrument is any contract that gives rise to a financial asset of
one entity and a financial liability or equity instrument of another entity.
3.6.1 Initial Recognition
Financial assets and liabilities are recognized at the trade date which is the
date when the Group becomes a party to the contractual provision of the
instruments. The financial assets and liabilities are initially measured at fair
value plus, in the case of a financial asset or financial liability not at fair
value through profit or loss, transaction costs that are directly attributable
to the acquisition or issue of the financial asset or financial liability.
* 3.6.2 Classification and Measurement of Financial Assets
Management determines the classification of its investments at initial
recognition. Financial assets are classified into the following categories:
(a) Financial Assets and Liabilities at Fair Value through Profit & Loss
This category has two sub-categories: financial assets held for trading and
those designated at fair value through profit or loss at inception. A financial
asset is classified in the "held for trading" category if acquired principally
for the purpose of generating a profit from short-term fluctuations in price.
Derivative financial instruments are also categorised as "held for trading"
unless they are designated as accounting hedges in which case hedge accounting
is applied. Financial assets designated as at fair value through profit or loss
at inception are those that are managed and their performance is evaluated on a
fair value basis, in accordance with a documented investment strategy.
Information about these financial assets is provided internally on a fair value
basis to key management personnel. Financial assets and liabilities designated
as at fair value through profit or loss, are subsequently measured at fair value
and any change in the fair value is recorded in the income statement.
(b) Loans and Receivables
These include non-derivative financial assets with fixed or determinable
payments that are not quoted in an active market and which the Group does not
indent to sell in the short-term. They arise when the Group provides money,
goods or services directly to a debtor with no intention of trading the
receivable. Loans and receivables are measured at amortized cost using the
effective interest method.
(c) Held to maturity investments
Held-to-maturity financial assets are non-derivative financial assets with fixed
or determinable payments and fixed maturities that the management has the
positive intention and ability to hold to maturity. When the Group sells other
than an insignificant amount of held-to-maturity assets, then the entire
category is tainted and reclassified as available-for-sale. Held-to-maturity
financial assets are measured at amortised cost, using the effective interest
method
(d) Available for sale investment
Available-for-sale investments are those intended to be held for an indefinite
period of time, which may be sold in response to needs for liquidity or changes
in interest rates, exchange rates or equity prices.
Purchases and sales of financial assets at fair value through profit or loss,
held-to-maturity, and available-for-sale are recognized at trade date - the date
on which the Group commits to purchase or sell the asset. Loans are recognized
when cash is advanced to the borrowers.
Financial assets are initially recognized at fair value plus transaction costs
for all financial assets not carried at fair value through profit or loss.
Financial assets are derecognized when the rights to receive cash flows from the
financial assets have expired or where the Group has transferred substantially
all risks and rewards of ownership.
Available-for-sale financial assets are subsequently carried at fair value and
any change in fair value is recognized directly into equity.
* 3.6.3 Off setting
Financial assets and liabilities are offset and the net amount is presented in
the balance sheet when there is a legally enforceable right to offset the
recognised amounts and there is an intention to settle on a net basis, or
realize the asset and settle the liability simultaneously.
Income and expenses are offset only when permitted by the accounting standards,
or for gains and losses arising from a group of similar transactions.
* 3.6.4 Fair value measurement
For the measurement of assets and liabilities at fair value, the Group uses
current market prices for every financial instrument. For those assets and
liabilities whose current market price was not available, the values that were
derived by applying valuation methods do not differ much from their carrying
values.
* 3.6.5 Impairment of financial assets
Assets carried at fair value
The Group assesses at each balance sheet date whether there is objective
evidence that a financial asset or group of financial assets is impaired. In
the case of equity investments classified as available-for-sale, a significant
or prolonged decline in the fair value of the security below its cost is
considered in determining whether the asset is impaired. If any such evidence
exists for available-for-sale financial assets, the cumulative loss measured as
the difference between the acquisition cost and the current fair value, less any
impairment loss on that financial asset previously recognized in profit or loss
is removed from equity and recognized in the income statement. Impairment losses
recognized in the income statement on equity instruments are not reversed
through the income statement. If, in a subsequent period, the fair value of a
debt instrument classified as available-for-sale increases and the increase can
be objectively related to an event occurring after the impairment loss was
recognized in profit or loss, the impairment loss is reversed through the income
statement.
* 3.6.6 Derivative financial instruments and hedge accounting
Derivative financial instruments include forward exchange contracts, currency
and interest rate swaps, stock, currency and index futures, equity and currency
options and other derivative financial instruments. These are initially
recognised in the balance sheet at fair value, and subsequently are remeasured
at their fair value. Fair values are obtained from quoted market prices,
discounted cash flow models and other appropriate pricing models. All
derivatives are shown as financial assets at fair value through profit or loss
when fair value is positive and as financial liabilities when fair value is
negative.
The best evidence of the fair value of a derivative at initial recognition is
the transaction price (i.e. the fair value of the consideration given or
received).
Certain derivatives embedded in other financial instruments are treated as
separate derivatives when their economic characteristics and risks are not
closely related to those of the host contract and the host contracts is not
carried at fair value through profit or loss. These embedded derivatives are
measured at fair value with changes in fair value recognized in the income
statement.
The Group has designated all derivatives as trading and has not applied hedging
accounting.
* 3.6.7 Sale and repurchase agreements
The Group enters into agreements for purchases (sales) of investments and to
resell (repurchase) substantially identical investments at a certain date in the
future at a fixed price. Investments purchased, on condition that they will be
resold in the future (reverse repos), are not recognized in the balance sheet.
The amounts paid for purchase thereof are recognized as receivables from other
banks or customers. The difference between the sale and repurchase consideration
is recognized as interest income or expense during the repurchase agreement
period on an accrual basis.
Investments sold under repurchase agreements continue to be recognized in the
balance sheet and are measured in accordance with the accounting policy for
either assets held for trading or available-for-sale as appropriate. The
proceeds from the sale of the investments are reported as liabilities to either
banks or customers.
* 3.7 Insurance contracts
Through its insurance subsidiaries, the Group issues insurance contracts to
customers. Under these contracts the Group accepts significant insurance risk,
by agreeing to compensate the contract holder on the occurrence of a specified,
uncertain future event.
The Group's insurance company issues only insurance contracts covering property
and casualty risks up to one year of duration.
Property and casualty insurance contracts are separated in two categories:
a) Automobile third party liability. This category includes insurance contracts
covering the risk of automobile third party liability.
b) Non-automobile lines. This category includes insurance contracts covering the
risk of fire and allied lines, marine, general liability, legal protection, road
assistance, etc.
Gross insurance premiums are recognized in the income statement over the period
covered by the related insurance contract. The insurance premiums are recognized
before the deduction of the relevant commissions.
Contract costs
Costs incurred for the initiation or the renewal of insurance contract, such as
brokers commission, are deferred and recognized as an asset. The relevant
amounts are amortized to Profit or Loss on a systematic basis over the
contractual term of the relevant insurance contract.
Liabilities from insurance contracts
Provisions for outstanding claims are revised at each balance sheet date and any
change is recognized in Profit or Loss to the extent that it refers to claim
covered by the Group, while any amount covered by reinsurance is recognized as
an asset (receivable) according to the reinsurance contracts.
(a) Unearned Premiums
Gross insurance premiums for general insurance business are recognized in the
income statement over the period covered by the related insurance contract. The
proportion of premiums which relates to periods of risk extending beyond the end
of the year is reported as unearned premium and is calculated on a daily basis.
(b) Provisions for claims incurred
Provisions for outstanding claims are based on the estimated ultimate cost of
all claims incurred but not settled at the balance sheet date, whether reported
or not, together with related claims handling costs. The amount of provisions
is estimated based on available information (adjuster reports, court decisions
etc.) at the balance sheet date.
Provisions for outstanding claims include reserves for incurred claims, which
are not reported to the company at the balance sheet date (I.B.N.R.). Provisions
for outstanding claims are reported at the balance sheet date according to the
requirements of regulatory authority legislation in force (law 400/1970).
Specifically the automobile third party liability related claims reserves, are
checked according to the ?3-3975/11.10.1999 decision of The Ministry of
Development, forming the greater possible reserve. I.B.N.R. provisions are
estimated based on the ?3-3974/11.10.1999 decision of The Ministry of
Development.
Provisions for outstanding claims include reserves for incurred claims, which
are not reported to the Company at the balance sheet date (I.B.N.R.). Provisions
for outstanding claims are reported at the balance sheet date according to the
requirements of regulatory authority legislation in force (law 400/1970).
Specifically the automobile third party liability related claims reserves, are
checked according to the ?3-3975/11.10.1999 decision of The Ministry of
Development, forming the greater possible reserve. I.B.N.R. provisions are
estimated based on the ?3-3974/11.10.1999 decision of The Ministry of
Development.
The difference in non-life insurance contract liabilities (increase / decrease)
related to their previous assessment is transferred to the profit and loss
accounts as far as the Company's own retention, while the rest is transferred to
the reinsurance accounts, according to the reinsurance agreements.
Reinsurance contracts
Reinsurance contracts are contracts entered into by the Group's insurance
subsidiaries, under which the Group is compensated for losses incurred under
insurance contracts issued by the Group's insurance subsidiaries. The
reinsurance contracts entered into by the Group's insurance subsidiaries, in
which the issuer of the insurance contract is another insurer (inwards
reinsurance) are included in reinsurance contracts.
Any amounts recovered from reinsurers, that derive from the reinsurance
contracts of the Group, are recognized in assets. The amounts recovered from or
to reinsurers are calculated based on the amounts related with the reinsurance
contracts and are based on the terms of each reinsurance contract. The
reinsurance liabilities are mainly premiums payable for reinsurance contracts
and are recognized as expenses on an accrual basis.
The Group evaluates its reinsurance assets for impairment. If there is objective
evidence that the reinsurance assets have incurred an impairment, the Group
reduces the carrying amount of the reinsurance asset to its recoverable amount
and recognizes the reduction in its value in the income statement.
Liability adequacy test
At each balance sheet date, liability adequacy tests are performed by the
Group's insurance companies to ensure the adequacy of liabilities that arise
from their operations. In performing these tests, current best estimates of
operational and investment income and operational and administration expenses
are based on past experience and financial results.
In case when the adequacy test reveals insufficient reserves, provisions are
adjusted accordingly. The liability is derecognized when the contract expires,
is discharged or is cancelled.
The Group has no insurance subsidiary after the disposal of its shareholding in
PROTON in 2008.
* 3.8 Cash and cash equivalents
For the purposes of the cash flow statement, cash and cash equivalents comprise
balances with less than three months maturity and include cash and non
restricted balances with Central Bank, government bonds and treasury bills and
amounts due from other banks and short-term government securities.
* 3.9 Intangible assets
The Group has included in this category goodwill from acquisitions and software
which is carried at amortised cost less accumulated amortization.
(a) Goodwill
Goodwill represents the excess of the cost of an acquisition over the fair value
of the net identifiable assets of the acquired undertaking at the date of
acquisition. Goodwill on acquisitions of subsidiaries is included in the balance
sheet in "Goodwill and other intangible assets".
Negative goodwill is recognised immediately as gain in the income statement.
Goodwill is tested for impairment annually and whenever there are indications of
impairment and is carried at cost less accumulated impairment losses. Goodwill
is allocated to cash-generating units for the purpose of impairment testing,
using the country of operation and economic segment as the allocation bases.
(b) Other intangible assets arisen from business combinations
An intangible asset acquired in a business combination is recognized if it is
identifiable; it is probable that the expected future economic benefits
associated with the asset will flow to the Group and its cost can be measured
reliably. Identifiable is an asset when it is separable, i.e. is capable of
being separated or divided from the entity and transferred individually or
together with a related contract, or arises from contractual or other legal
rights, regardless of whether those rights are transferable or separable from
the entity or from other rights and obligations.
The Group, has recognized the following intangible assets in their fair value
that was acquired at the take-over of Omega Bank as part of a business
combination on 30 September 2006:
· Intangible asset from conventions of customer loans
· Intangible asset from conventions of customer deposits
· Intangible asset from conventions of financial brokerage
Amortisation of other intangible assets arising from a business combination is
calculated using the straight-line method to allocate their cost to their
residual values over their estimated useful lives, which extends from 4 to 5
years. Other intangible assets coming from a business combination that are
subject to amortizations are reviewed for impairment whenever events or changes
in circumstances indicate that the carrying amount may not be recoverable.
Amortisation charge is included within "Depreciation" in the income statement.
(c) Computer software
Costs that are directly associated with identifiable and unique computer
software products controlled by the Group and that will probably generate
economic benefits exceeding costs beyond one year are recognised as intangible
assets. Subsequently computer software is carried at cost less any accumulated
amortisation and any accumulated impairment losses. Expenditure, which enhances
or extends the performance of computer software programmes beyond their original
specifications is recognised as a capital improvement.
Costs associated with maintenance of computer software programmes are recognised
as an expense when incurred. Computer software costs are amortised using the
straight-line method over their useful lives, not exceeding a period of five
years. Amortisation commences when the computer software is available for use
and is included within "Depreciation" in the income statement.
* 3.10 Property, plant and equipment
All plant and equipment are stated at historical cost less depreciation, except
land and buildings which are shown at fair value based on valuations by external
independent valuers, less subsequent depreciation for buildings.
Historical cost includes expenditure that is directly attributable to the
acquisition of the items. Expenditure for repairs and maintenance of property
and equipment is charged to the income statement of the year in which they were
incurred. Depreciation on buildings and other tangible assets are calculated
using the straight line method to allocate their cost or fair value to their
residual values over their estimated useful lives.
The carrying amount of impaired assets is written down to their recoverable
amounts. Gains and losses from disposals are recognised in the income statement.
Land is not depreciated but is reviewed for impairment. Depreciation on other
property and equipment is calculated using the straight-line method to allocate
the cost or revalued amount of each asset less their residual values, over their
estimated useful lives. The estimated useful lives are as follows:
· Buildings: 50 years
· Lease hold improvements: depreciated on a straight-line basis over the
term of the lease
· Computers: 3 years
· Vehicles: 5-7 years
· Furniture and equipment: 10 years
· The commercial value of leased assets is depreciated over the lease
period
The assets residual values and useful lives are reviewed, and adjusted if
appropriate, at each balance sheet date. When the carrying amount of an asset is
greater than its estimated recoverable amount, it is written down immediately to
its recoverable amount. The recoverable amount is the higher of the asset's fair
value less costs to sell and value in use.
Gains and losses on disposal of property and equipment are determined by
comparing proceeds to carrying amount and are included in the income statement.
* 3.11 Investment property
Investment property are properties held by the Group either to earn rental
income or for capital appreciation. The Group records investment property at
fair value as determined by an independent valuation company having an
appropriate recognised professional qualification. Initially investment property
is recorded at cost including acquisition expenses. Any gain or loss arising
from a change in fair value is recognised in profit or loss.
* 3.12 Assets held for sale
The Group classifies an asset as held for sale if it is committed to recover its
carrying amount principally through a sale transaction rather than through
continuing use. For this to be the case, these assets should be available for
immediate sale in their present condition subject only to terms that are usual
and customary for sales of such assets and their sale is highly probable. The
category of assets held for sale comprises of two type of assets:
- Property acquired from auctions with the intention to recover loans and
receivables past due.
- Group of assets forming a disposal group that the Group intends to dispose
together at a single transaction. Liabilities associated with this disposal
group are also classified separately.
Assets held for sale, according to IFRS 5 "Non current assets held for sale" are
measured at the lower of their carrying amount and fair value less costs to
sell. Assets held for sale are not depreciated but are subject to impairment.
Gains/ losses from sale of these assets are recognized in the income statement.
* 3.13 Leases
* 3.13.1 A Group company is a lessee
(i) Finance lease
The Group has not entered into a finance lease agreement in the capacity of a
lessee.
(ii) Operating leases
Leases where the risks and rewards of ownership remain with the lessor are
classified as operating leases. Payments made under operating leases (net of any
incentives received by the lessor) are charged to the income statement on a
straight line basis over the period of the lease.
* 3.13.2 A Group company is a lessor
(i) Finance lease
When assets are leased out under finance lease / hire purchase, the present
value of the lease payments is recognized as a receivable. Lease income and hire
purchase fees are recognized in the income statement in a systematic manner,
based on instalments receivable during the year so as to provide a constant
periodic rate using the net investment method.
(ii) Operating leases
Assets leased out under operating leases are carried on the Group's financial
statements and are depreciated over their useful economic lives. Payments
received under operating leases are recorded in the income statement on a
straight line basis.
* 3.14 Financial liabilities
Financial liabilities are treated as held for trading if:
(a) acquired principally for the purpose of selling or repurchasing them in the
near term;
(b) a derivative financial instrument (except for a designated and effective
hedging instrument).
Financial liabilities are initially recognised at fair value. Subsequently any
changes in their fair value are recognised in the income statement.
* 3.15 Share capital
(a) Share issue costs
Incremental costs directly attributable to the issue of new shares are deducted
from equity.
(b) Dividends on ordinary shares
The dividend distribution to ordinary shareholders is recognized in the period
in which the dividend is approved by the Company's shareholders.
(c) Treasury Shares
Where the Company or other members of the Group purchase the Company's equity
share capital, the consideration paid is deducted from total shareholders'
equity as treasury shares. Where such shares are subsequently sold or reissued,
any consideration received is included in shareholders' equity.
* 3.16 Fiduciary activities
Assets and income arising thereon together with related undertakings to return
such assets to customers are excluded from these financial statements where the
Group acts in a fiduciary capacity such as nominee, trustee or agent.
* 3.17 Provisions
Provisions are recognised when the Group has a present legal or constructive
obligation as a result of past events, when it is more likely than not that an
outflow of resources will be required to settle the obligation, and a reliable
estimate of the amount of the obligation can be made. If the effect is material,
provisions are determined by discounting the expected future cash flows at a
pre-tax rate that reflects current market assessments of the time value of
money.
Where the Group expects a provision to be reimbursed, the reimbursement is
recognised as a separate asset but only when the reimbursement is virtually
certain.
The Group recognises a provision for onerous contracts when the expected
benefits to be derived from a contract are less than the unavoidable costs of
meeting the obligations under the contract.
* 3.18 Employee benefits
(a) Defined contribution plans
A defined contribution plan is a plan under which the Company and the employees
pay fixed contributions into a separate fund. The benefits provided to the
employees participating in defined contribution plans are based on the return of
the fund. Each fund is governed by specified regulations as agreed between the
two parties and in compliance with relevant statutory obligations. The
contributions of the Group to the defined contribution plans are charged to the
income statement in the year in which they arise.
Proton Group's personnel are insured for medical care in multiemployer funds. In
these funds, there are no separate accounts for each company, hence accounting
for defined contribution is followed. Once the contribution has been paid, the
Group has no further payment obligations.
(b) Defined benefit plans
The Group former subsidiary's defined benefit plan regards the legal commitment
to pay lump-sum severance grant, pursuant to L.2112/1920. Typically defined
benefit plans define an amount of pension benefit that an employee will receive
on retirement, usually dependent on one or more factors such as years of service
and compensation. The liability recognised in the balance sheet for defined
benefit pension plans is the present value of the defined benefit obligation at
the balance sheet date less unrecognised actuarial gains or losses and past
service costs. The defined benefit obligation is calculated on an annual basis
by an independent actuary with the use of the projected unit credit method.
The present value of the liability of the defined benefit plan is calculated by
discounting the future cash outflows of the plan with the long-term Greek bonds'
rate.
Actuarial gains and losses are not recognised as an expense unless the total
unrecognised gain or loss exceeds 10% of the greater of the obligation and
related plan assets. The amount exceeding this 10% corridor is charged or
credited to profit or loss over the employees' expected average remaining
working lives. Actuarial gains and losses within the 10% corridor are disclosed
separately. Past-service costs are recognized immediately in the income
statement, unless the changes to the pension plan are conditional on the
employees remaining in service for a specified period of time (the vesting
period). In this case, the past service
Costs are amortised on a straight-line basis over the vesting period.
(c) Share based employee remuneration
The Group's former subsidiary (Proton) operates equity-settled share-based
remuneration plans for remuneration of its employees.
All employee services received in exchange for the grant of any share-based
remuneration are measured at their fair values at the date at which they are
granted. These are indirectly determined by reference to the fair value of the
share options awarded. Their value is appraised at the grant date and excludes
the impact of any non-market vesting conditions (for example, profitability and
sales growth targets).
All share-based remuneration is ultimately recognised as an expense in the
income statement with a corresponding credit to "stock option reserve", net of
deferred tax where applicable. If vesting periods or other vesting conditions
apply, the expense is allocated over the vesting period, based on the best
available estimate of the number of share options expected to vest.
Non-market vesting conditions are included in assumptions about the number of
options that are expected to become exercisable. Estimates are subsequently
revised, if there is any indication that the number of share options expected to
vest differs from previous estimates.
No adjustment is made to expense recognised in prior periods if fewer share
options ultimately are exercised than originally estimated.
Upon exercise of share options, the proceeds received net of any directly
attributable transaction costs up to the nominal value of the shares issued are
allocated to share capital with any excess being recorded in share premium
account.
* 3.19 Income Tax
Current tax liabilities and assets for the current and prior periods are
measured at the amount expected to be paid to or recovered from the taxation
authorities using the tax rates and laws that have been enacted or substantially
enacted by the balance sheet date.
Deferred income taxes are calculated using the liability method on temporary
differences. This involves the comparison of the carrying amounts of assets and
liabilities in the consolidated financial statements with their respective tax
bases. Deferred tax assets are recognised to the extent that it is probable that
they will be able to be offset against future taxable income. Deferred tax
liabilities are recognised for all taxable temporary differences.
However, in accordance with the rules set out in IAS 12, no deferred taxes are
recognised in conjunction with goodwill.
No deferred taxes are recognised to temporary differences associated with shares
in subsidiaries if reversal of these temporary differences can be controlled by
the Group and it is probable that reversal will not occur in the foreseeable
future. In addition, tax losses available to be carried forward as well as other
income tax credits to the Group are assessed for recognition as deferred tax
assets.
No deferred taxes are recognised from the initial recognition of an asset or
liability in a transaction that is not abusiness combination and, at the time of
the transaction, affects neither the accounting profit nor taxable profit or
loss
Deferred tax assets and liabilities are calculated, without discounting, at tax
rates that are expected to apply to their respective period of realisation,
provided they are enacted or substantively enacted at the balance sheet date.
Most changes in deferred tax assets or liabilities are recognised as a component
of tax expense in the income statement. Only changes in deferred tax assets or
liabilities that relate to a change in value of assets or liabilities that is
charged directly to equity are charged or credited directly to equity.
4. CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS
Accounting estimates and judgements are continually evaluated and are based on
historical experience and other factors, including expectations of future events
that are believed to be reasonable under the circumstances.
The Group makes estimates and assumptions concerning the future. The resulting
accounting estimates will, by definition, seldom equal the related actual
results.
The estimates, judgements and assumptions that have a significant risk of
causing a material adjustment to the carrying amounts of assets and liabilities
within the next financial year are discussed below:
a) Impairment of available for sale financial assets
The Group follows the guidance in IAS 39 to determine if an investment has been
impaired. This decision requires critical judgement. Available for sale equity
investments are impaired when there has been a significant or prolonged decline
in fair value below its cost.
When the declines in fair value are considered significant or prolonged, the
fair value reserve is transferred to the income statement.
b) Financial Instruments Classification
The Group's accounting policies require financial assets and liabilities to be
classified into different categories at their inception:
· Investments held to maturity. Management judgement is required when
applying this classification, which takes into account the Group's intention &
ability to hold investment to maturity.
· Financial instruments for trading purposes include Investments and
derivatives held to achieve short-term profit.
5. STRUCTURE OF THE GROUP
The structure of the Group as at 31 December 2009:
+-----------------+--------+--------+--+-------+---+------+--------+--+----------+----------+
| Name | Country | Direct | Relation | Note |
| | | and | that | |
| | | indirect | dictated | |
| | | holding | the | |
| | | |consolidation | |
+--------------------------+-----------+-----------+---------------+------------------------+
| IRF EUROPEAN FINANCE | BERMUDA | Parent | | |
| INVESTMENTS LIMITED | | | | |
+--------------------------+-----------+-----------+---------------+------------------------+
| MIMOSA TRADING SA | MARSHALL | 100% | Percentage | Direct Stake |
| | ISLANDS | | Ownership | |
+--------------------------+-----------+-----------+---------------+------------------------+
| MYRTLE TRADING COMPANY | MARSHALL | 100% | Percentage | Direct Stake |
| | ISLANDS | | Ownership | |
+--------------------------+-----------+-----------+---------------+------------------------+
| IRF US | USA | 100% | Percentage | Direct Stake |
| | | | Ownership | |
+--------------------------+-----------+-----------+---------------+------------------------+
| ASSOCIATES | | | | | | | |
+-----------------+--------+--------+----------+----------+-----------+----------+----------+
| S.GOLDMAN ASSET | USA | 49% | |Indirect stake through |
| MANAGEMENT LLC | | | | "IRF US" |
+--------------------------+-----------+-----------+---------------+------------------------+
| | | | | | | | | | | |
+-----------------+--------+--------+--+-------+---+------+--------+--+----------+----------+
The following table indicates the Group structure as at 31 December 2008 and 31
December 2007:
+-----------------+----------+--------------+--------------+----------+---------------+----------+
| Name | Country | Direct | Indirect | Direct | Relation | Note |
| | |Shareholding |Shareholding | and | that | |
| | | % | % |Indirect | dictated | |
| | | | | Holding | the | |
| | | | | |consolidation | |
+-----------------+----------+--------------+--------------+----------+---------------+----------+
| IRF EUROPEAN | BERMUDA | | | Parent | | |
| FINANCE | | | | | | |
| INVESTMENTS | | | | | | |
| LIMITED | | | | | | |
+-----------------+----------+--------------+--------------+----------+---------------+----------+
| MIMOSA TRADING |MARSHALL | 100.00% | 0.00% | 100% | Percentage | Direct |
| SA | ISLANDS | | | | Ownership | Stake |
+-----------------+----------+--------------+--------------+----------+---------------+----------+
| MYRTLE TRADING |MARSHALL | 100.00% | 0.00% | 100% | Percentage | Direct |
| COMPANY | ISLANDS | | | | Ownership | Stake |
+-----------------+----------+--------------+--------------+----------+---------------+----------+
| PROTON BANK GROUP (Discontinued | | | | |
| operations) | | | | |
+-------------------------------------------+--------------+----------+---------------+----------+
| PROTON BANK SA | GREECE | 20.60% | 0.00% | 20.60% | Control | Direct |
| | | | | | | Stake |
+-----------------+----------+--------------+--------------+----------+---------------+----------+
| FIRST GLOBAL | SERBIA | 0.00% | 16.63% | 16.63% | Control |Indirect |
| BROKERS SA | | | | | | stake |
| | | | | | | through |
| | | | | | | "Proton |
| | | | | | | Bank" |
+-----------------+----------+--------------+--------------+----------+---------------+----------+
| PROTON MUTUAL | GREECE | 0.00% | 20.58% | 20.58% | Control |Indirect |
| FUNDS SA | | | | | | stake |
| | | | | | | through |
| | | | | | | "Proton |
| | | | | | | Bank" |
+-----------------+----------+--------------+--------------+----------+---------------+----------+
| OMEGA INSURANCE | GREECE | 0.00% | 13.60% | 13.60% | Control |Indirect |
| BROKERS SA | | | | | | stake |
| | | | | | | through |
| | | | | | | "Proton |
| | | | | | | Bank" |
+-----------------+----------+--------------+--------------+----------+---------------+----------+
| PROTON | GREECE | 0.00% | 18.80% | 18.80% | Control |Indirect |
| INSURANCE SA | | | | | | stake |
| | | | | | | through |
| | | | | | | "Proton |
| | | | | | | Bank" |
+-----------------+----------+--------------+--------------+----------+---------------+----------+
| INTELLECTRON | GREECE | 0.00% | 11.46% | 11.46% | Control |Indirect |
| SYSTEMS SA | | | | | | stake |
| | | | | | | through |
| | | | | | | "Proton |
| | | | | | | Bank" |
+-----------------+----------+--------------+--------------+----------+---------------+----------+
| ASSOCIATES | | | | | | |
+-----------------+----------+--------------+--------------+----------+---------------+----------+
| Omega Portfolio | GREECE | 0.00% | 6.01% | 6.01% | |Indirect |
| Investment SA | | | | | | stake |
| | | | | | | through |
| | | | | | | "Proton |
| | | | | | | Bank" |
+-----------------+----------+--------------+--------------+----------+---------------+----------+
DISPOSAL OF SHAREHOLDING IN PROTON: On 24 September 2008, IRF sold 10 million
shares in Proton Bank for a gross sales price of EUR65 million. The consideration
for this disposal was in the form of cash. Following IRF's disposal of these
shares in Proton Bank, the IRF directors holding positions on the Board of
Directors of Proton Bank resigned. As at 30 September 2008, IRF held
approximately 2.9 million shares in Proton Bank, representing an interest of
approximately 4.65%. As at 31 December 2008, IRF had disposed of its entire
investment in Proton Bank. The results of Proton Bank's Group were consolidated
in the financial statements of IRF, as discontinued operations, up to the date
of the disposal (note 17).
Proton Bank is fully consolidated in the 2007 and the 9 month period of 2008
accounts because of the "de facto" power of the Company to control its financial
and operating activities. In particular, IRF owned 20.60% of the voting rights
of Proton Bank while the percentage of voting rights controlled by the Company
was increased to 27.14% after taking into consideration the holding of two other
shareholders of Proton Bank who were committed to vote in accordance with IRF's
instructions based on an agreement. IRF had exercised its effective power and
appointed six members in the eleven-member Board of Directors of Proton Bank,
including Proton Bank's chairman.
The Company's directors used their judgment in order to ascertain whether IRF
had the effective control of Proton Bank according to the accounting policy
adopted. Based on all relevant information available, the Company concluded that
it had the ability to control Proton Bank and therefore fully consolidated its
financial statements. The following reasons support the fact that IRF had
control over Proton Bank:
(a) IRF had exercised its effective power and appointed six members in the
eleven-member Board of Directors of Proton Bank, including Proton Bank's
chairman;
(b) Based on the Purchase Agreement, the vendors, who were directors and
shareholders of Proton Bank, agreed to vote in such a way that would protect
IRF's power to appoint the majority of the Proton Bank's Board of Directors;
(c) There was no realistic possibility that all the other shareholders, who
represented the 72.86% of the voting rights, would be organized in such a way as
to in practice block the exercise of IRF's power. In particular, the 72.86% of
the shares of Proton Bank was held by more than 10,000 investors, the majority
of whom did not usually attend the Shareholders' Meeting. Moreover, only 3 of
them controlled more than 5% of the entity; and
(d) The relevant judgment was in compliance with the relevant Greek
regulations.
Information on consolidation
MIMOSA TRADING SA: This company is duly incorporated and filed articles of
incorporation under the provisions of the Marshall Islands Business Corporation
Act on 6 July 2007. IRF is the owner of five hundred (500) fully paid and
non-assessable shares of the capital stock of the corporation. The aggregate
number of shares of stock that this company is authorized to issue is five
hundred (500) registered and/or bearer shares without par value.
MYRTLE TRADING COMPANY: This company is duly incorporated and filed articles of
incorporation under the provisions of the Marshall Islands Business Corporation
Act on 6 July 2007. IRF is the owner of five hundred (500) fully paid and
non-assessable shares of the capital stock of the corporation. The aggregate
number of shares of stock that this company is authorized to issue is five
hundred (500) registered and/or bearer shares without par value.
IRF US INVESTMENTS INC: During the period, IRF US Investments inc. (IRF US) was
organized as a wholly owned subsidiary under the laws of the State of Delaware.
IRF US's only activity is to hold the 49% interest in S.Goldman Asset Management
LLC (SGAM). IRF US is fully consolidated in IRF's Group financial statements.
S.Goldman Asset Management LLC (SGAM)is a limited liability company formed under
the law of the State of Delaware. IRF US holds a 49% interest in SGAM. SGAM is
an investment manager on a "managed account" and fund basis. SGAM is classified
as an associate company and it is consolidated under the equity method.
6. RISK MANAGEMENT
IRF Group is exposed to various risks in relation to financial instruments.
After the disposal of Proton Bank, the extent of these risks has been reduced.
IRF intends to minimise its exposure to credit, liquidity and interest rate
risk, while it is exposed to market risks due to its investments in listed
equity shares.
All comparative figures for the year 2007 include the consolidated accounts of
Proton BankGroup.
6.1 Credit Risk
The Group is exposed to credit risk, which is the risk that the counterparty of
a financial instrument will cause losses to the Group by failing to discharge
its obligations.
6.1.1 Maximum credit risk exposure before collateral held or other credit
enhancements:
The below table presents the maximum credit risk exposure as at 31 December
2009, 31 December 2008 and 31 December 2007 respectively, without taking into
account any collaterals or other credit enhancements pledged.
For on-balance-sheet assets, the exposures set out above are based on net
carrying amounts as reported in Statement of Financial Position.
+-------------------------------------------+------------+------------+------------+
| Amounts presented in EUR '000 | | | |
+-------------------------------------------+------------+------------+------------+
| Total exposure to credit risk | | | |
+-------------------------------------------+------------+------------+------------+
| Exposure to credit risk of the Statement |31.12.2009 |31.12.2008 |31.12.2007 |
| of Financial Position items: | | | |
+-------------------------------------------+------------+------------+------------+
| Cash and other equivalents | 126,842 | | 322,354 |
| | | 148,609 | |
+-------------------------------------------+------------+------------+------------+
| Due from other Banks | - | - | 205,055 |
+-------------------------------------------+------------+------------+------------+
| Loans and advances to Banks | - | - | 45,906 |
+-------------------------------------------+------------+------------+------------+
| Loans to retail customers | | | |
+-------------------------------------------+------------+------------+------------+
| -Credit Cards | - | - | 37,232 |
+-------------------------------------------+------------+------------+------------+
| -Consumer / Personal loans | - | - | 159,010 |
+-------------------------------------------+------------+------------+------------+
| -Housing | - | - | 48,341 |
+-------------------------------------------+------------+------------+------------+
| Corporate loans | - | - | 1,113,216 |
+-------------------------------------------+------------+------------+------------+
| Derivative financial instruments | - | - | 11,529 |
+-------------------------------------------+------------+------------+------------+
| Trading portfolio and other financial | 15,585 | 3,688 | 126,792 |
| assets at fair value through Profit & | | | |
| Loss | | | |
+-------------------------------------------+------------+------------+------------+
| Securities at fair value as at initial | - | - | 5,421 |
| recognition | | | |
+-------------------------------------------+------------+------------+------------+
| Investing portfolio securities | - | | |
+-------------------------------------------+------------+------------+------------+
| -Held to maturity | - | - | 9,717 |
+-------------------------------------------+------------+------------+------------+
| -Available for sale | - | - | 242,144 |
+-------------------------------------------+------------+------------+------------+
| Other assets | 923 | 607 | 91,475 |
+-------------------------------------------+------------+------------+------------+
| Exposure to credit risk pertaining to off | | | |
| Statement of Financial Position items: | | | |
+-------------------------------------------+------------+------------+------------+
| Letters of Guarantee & Letters of Credit | - | - | 113,358 |
+-------------------------------------------+------------+------------+------------+
| Undrawn loans (approved) & other | - | - | 3,830 |
| commitments | | | |
+-------------------------------------------+------------+------------+------------+
| Total | 143,349 | 152,904 | 2,535,381 |
+-------------------------------------------+------------+------------+------------+
6.1.2 Concentration of risks of financial assets with credit risk exposure:
analysis per industry
The table below breaks down the Group's main credit exposure at their carrying
amounts, as categorized by the industry sectors of our counterparties.
+-------------+--------------+------------+-----------+---------+---------+---------+--------+------------+-------------+-----------+
| Amounts | Financial |Manuf/ring |Transport | Public | Trade |Leasing |Energy | Other |Individuals | Total |
| presented |institutions | | telecomm | sector | | | |industries | and | |
| in EUR | | | | | | | | | households | |
| '000 | | | | | | | | | | |
+-------------+--------------+------------+-----------+---------+---------+---------+--------+------------+-------------+-----------+
| Cash and | 126,842 | - | - | - | - | - | - | - | - | 126,842 |
| other | | | | | | | | | | |
| equivalents | | | | | | | | | | |
+-------------+--------------+------------+-----------+---------+---------+---------+--------+------------+-------------+-----------+
| | 2,296 | - | 2,574 | - | 2,714 | - | 986 | 4,307 | 2,708 | 15,585 |
| Trading | | | | | | | | | | |
| portfolio | | | | | | | | | | |
| and other | | | | | | | | | | |
| financial | | | | | | | | | | |
| assets at | | | | | | | | | | |
| fair | | | | | | | | | | |
| value | | | | | | | | | | |
| through | | | | | | | | | | |
| Profit & | | | | | | | | | | |
| Loss | | | | | | | | | | |
+-------------+--------------+------------+-----------+---------+---------+---------+--------+------------+-------------+-----------+
| Other | 713 | - | 44 | - | 22 | - | 14 | 74 | 56 | 923 |
| assets | | | | | | | | | | |
+-------------+--------------+------------+-----------+---------+---------+---------+--------+------------+-------------+-----------+
| Total | 129,850 | - | 2,618 | - | 2,736 | - | 1,000 | 4,381 | 2,765 | 143,350 |
| maximum | | | | | | | | | | |
| credit | | | | | | | | | | |
| risk as | | | | | | | | | | |
| at 31 | | | | | | | | | | |
| December | | | | | | | | | | |
| 2009 | | | | | | | | | | |
+-------------+--------------+------------+-----------+---------+---------+---------+--------+------------+-------------+-----------+
| Total | 149,151 | - | - | - | - | - | - | 3,753 | - | 152,904 |
| maximum | | | | | | | | | | |
| credit | | | | | | | | | | |
| risk as | | | | | | | | | | |
| at 31 | | | | | | | | | | |
| December | | | | | | | | | | |
| 2008 | | | | | | | | | | |
+-------------+--------------+------------+-----------+---------+---------+---------+--------+------------+-------------+-----------+
| Total | 836,155 | 120,820 | 207,525 | 160,314 | 281,160 | 69,858 | - | 497,778 | 244,583 | 2,418,193 |
| maximum | | | | | | | | | | |
| credit | | | | | | | | | | |
| risk as | | | | | | | | | | |
| at 31 | | | | | | | | | | |
| December | | | | | | | | | | |
| 2007 | | | | | | | | | | |
+-------------+--------------+------------+-----------+---------+---------+---------+--------+------------+-------------+-----------+
6.1.3 Debt securities
The table below presents an analysis of debt securities, and other eligible
bills by rating agency designation at 31 December 2009 and 31 December 2008,
based on Moody's (or equivalent) rating system :
+------------------+--------+-------+
| | Trading |
| | portfolio |
| | through |
| | profit or |
| | loss |
+------------------+----------------+
| Amounts | 2009 | 2008 |
| presented in EUR | | |
| '000 | | |
+------------------+--------+-------+
| AAA to A | 205 | - |
+------------------+--------+-------+
| Baa to B | 4,808 | - |
+------------------+--------+-------+
| Caa toC | 8,926 | - |
+------------------+--------+-------+
| Unrated | 1,645 | 3,688 |
+------------------+--------+-------+
| Total | 15,585 | 3,688 |
+------------------+--------+-------+
The table below presents an analysis of debt securities, and other eligible
bills by rating agency designation at 31 December 2007, based on Standard &
Poor's rating system :
+-----------+---------+----------+-----------+----------+-----------+----------+------------------+----------+--------------------+----------+---------+
| Amounts | Due | | Trading | |Financial | |Held-to-maturity | |Available-for-sale | | Total |
| presented | from | |portfolio | |assets at | | investments | | financial assets | | |
| in EUR | banks | | | | fair | | | | | | |
| '000 | | | | | value | | | | | | |
| | | | | | through | | | | | | |
| | | | | |profit or | | | | | | |
| | | | | | loss | | | | | | |
+-----------+---------+----------+-----------+----------+-----------+----------+------------------+----------+--------------------+----------+---------+
| AAA | - | | 4,735 | | - | | - | | 51,334 | | 56,069 |
+-----------+---------+----------+-----------+----------+-----------+----------+------------------+----------+--------------------+----------+---------+
| AA- to | 14,579 | | 81,733 | | - | | - | | 12,402 | | 108,714 |
| AA+ | | | | | | | | | | | |
+-----------+---------+----------+-----------+----------+-----------+----------+------------------+----------+--------------------+----------+---------+
| A- to | 6,441 | | 18,684 | | - | | 6,659 | | 129,805 | | 161,589 |
| A+ | | | | | | | | | | | |
+-----------+---------+----------+-----------+----------+-----------+----------+------------------+----------+--------------------+----------+---------+
| Lower | 94,590 | | 15,474 | | - | | - | | 8,531 | | 118,595 |
| than | | | | | | | | | | | |
| A- | | | | | | | | | | | |
+-----------+---------+----------+-----------+----------+-----------+----------+------------------+----------+--------------------+----------+---------+
| Unrated | 411,800 | | 6,166 | | 5,421 | | 3,058 | | 40,072 | | 466,517 |
+-----------+---------+----------+-----------+----------+-----------+----------+------------------+----------+--------------------+----------+---------+
| | | | | | | | | | | | |
+-----------+---------+----------+-----------+----------+-----------+----------+------------------+----------+--------------------+----------+---------+
| Total | 527,410 | | 126,792 | | 5,421 | | 9,717 | | 242,144 | | 911,484 |
+-----------+---------+----------+-----------+----------+-----------+----------+------------------+----------+--------------------+----------+---------+
"Due from unrated financial institutions" mainly refer to deposits in
subsidiaries of banking groups which have not been rated. The parents of these
subsidiaries are included in the bracket "Lower than A-".
6.2 Market Risk
The Group takes on exposure to market risks. Market risk is the risk of
occurring possible losses caused by the fluctuation and volatility of market
prices, such as share prices, interest rate and foreign exchange rate
fluctuations.
Market risks arise from open positions in interest rate, currency and equity
products, all of which are exposed to general and specific market movements and
changes.
The table below, presents the results in the carrying value of the assets of the
Group by implementing a stress test scenario on the factors concerning the
aforementioned market risks.
As of 31 December 2009
+------------------------+------------+----------+
| Amounts presented in | | |
| EUR '000 | | |
+------------------------+------------+----------+
| Market Prices | Price | Impact |
| |Volatility | on |
| | | Equity |
| | | and |
| | | Profit |
| | |and Loss |
+------------------------+------------+----------+
| Foreign-exchange rate | -10% | (9,045) |
+------------------------+------------+----------+
| Prices of listed | -40% | (84,279) |
| securities | | |
+------------------------+------------+----------+
| Interest Rates | +1,00% | (740) |
+------------------------+------------+----------+
As of 31 December 2008
+------------------------+------------+--------------+
| Amounts presented in | | |
| EUR '000 | | |
+------------------------+------------+--------------+
| Market Prices | Price | Impact |
| |Volatility | on |
| | | Equity |
| | | and |
| | | Profit |
| | | and Loss |
+------------------------+------------+--------------+
| Foreign-exchange rate | -10% | (12,842) |
+------------------------+------------+--------------+
| Prices of listed | -50% | (127,210) |
| securities | | |
+------------------------+------------+--------------+
| Interest Rates | +2,5% | (4,390) |
+------------------------+------------+--------------+
Foreing-exchange rate
The tables above illustrate the sensitivity of profit and equity in relation to
the Group's financial assets and financial liabilities and mainly the USD/EURO
exchange rates "all other things being equal".
Prices of listed securities
For listed securities a price volatily of -40% (2008: -50%) has been considered
to be a suitable basis for estimating how profit or loss and equity would have
been affected by changes in the market risk that were reasonably possible at the
market date. It is noted that as at 31 December 2009 the Group held shares of a
total value EUR 178.3 million in one listed company on the Athens Stock Exchange.
Interest Rates
The changes in the tables above are considered to be reasonably possible based
on observations of current market conditions. The calculations are based on a
change in the average market interest rate for each period, and the financial
instruments held at each reporting date that are sensitive to changes in
interest rates. All other variables are held constant.
For the year 2007 the Group applied the VAR methodology (due to consolidation
with Proton Bank). For these reason the presentation is not comparable.
6.3 Currency Risk
The Group undertakes currency risk arising from the exposure to the effects of
fluctuations in the prevailing foreign currency exchange rates on its financial
position and cash flows. The following tables summarize the Group's exposure to
currency risk. The Group's assets and liabilities at carrying amounts,
categorized by currency are included in the table.
+--------------------+----------+--------+--------+--------+----------+
| ASSETS | EUR | USD | GBP | AUD | TOTAL |
+--------------------+----------+--------+--------+--------+----------+
| Cash and other | 51,282 | 75,560 | - | - | 126,842 |
| equivalents | | | | | |
+--------------------+----------+--------+--------+--------+----------+
| Trading portfolio | 1,977 | 16,236 | - | 286 | 18,499 |
| and other | | | | | |
| financial assets | | | | | |
| at fair value | | | | | |
| through Profit & | | | | | |
| Loss | | | | | |
+--------------------+----------+--------+--------+--------+----------+
| Investment | 193,886 | - | - | - | 193,886 |
| portfolio | | | | | |
| securities | | | | | |
+--------------------+----------+--------+--------+--------+----------+
| Derivative | - | 80 | - | - | 80 |
| financial | | | | | |
| instruments | | | | | |
+--------------------+----------+--------+--------+--------+----------+
| Other assets | 35 | 934 | - | 1 | 969 |
+--------------------+----------+--------+--------+--------+----------+
| Total assets | 247,179 | 92,810 | - | 287 | 340,276 |
+--------------------+----------+--------+--------+--------+----------+
| LIABILITIES | EUR | USD | GBP | AUD | TOTAL |
+--------------------+----------+--------+--------+--------+----------+
| Long term loans | 198,104 | - | - | - | 198,104 |
+--------------------+----------+--------+--------+--------+----------+
| Financial | - | 1,687 | - | - | 1,687 |
| liabilities at | | | | | |
| fair value through | | | | | |
| profit & loss | | | | | |
+--------------------+----------+--------+--------+--------+----------+
| Derivative | - | 21 | - | - | 21 |
| financial | | | | | |
| instruments | | | | | |
+--------------------+----------+--------+--------+--------+----------+
| Other liabilities | 175 | 875 | 58 | - | 1,109 |
+--------------------+----------+--------+--------+--------+----------+
| Total liabilities | 198,279 | 2,584 | 58 | 0 | 200,921 |
+--------------------+----------+--------+--------+--------+----------+
| Net Balance Sheet | 48,900 | 90,226 | -58 | 287 | 139,355 |
| position | | | | | |
+--------------------+----------+--------+--------+--------+----------+
As of 31 December 2008
Amounts presented in EUR '000
+--------------------------------+---------+---------+-------+---------+
| ASSETS | EUR | USD | GBP | TOTAL |
| | | | | |
+--------------------------------+---------+---------+-------+---------+
| Total assets | 275,280 | 128,374 | 34 | 403,689 |
+--------------------------------+---------+---------+-------+---------+
| Total liabilities | 198,646 | 916 | 586 | 200,148 |
+--------------------------------+---------+---------+-------+---------+
| | 76,634 | 127,458 | (551) | 203,541 |
| Net Balance Sheet position | | | | |
+--------------------------------+---------+---------+-------+---------+
As of 31 December 2007
+--------------------------------+-----------+---------+---------+-------------+--------+-----------+
| Amounts presented in EUR '000 | EUR | USD | GBP | JPY | OTHER | TOTAL |
| | | | | | | |
+--------------------------------+-----------+---------+---------+-------------+--------+-----------+
| Total assets | 2,451,882 | 261,836 | 4,600 | 3,397 | 28,639 | 2,750,354 |
+--------------------------------+-----------+---------+---------+-------------+--------+-----------+
| Total liabilities | 1,622,938 | 160,859 | 4,630 | 183,153 | 1,429 | 1,973,009 |
+--------------------------------+-----------+---------+---------+-------------+--------+-----------+
| Net Balance Sheet position | 828,944 | 100,977 | (30) | (179,756) | 27,21 | 777,346 |
+--------------------------------+-----------+---------+---------+-------------+--------+-----------+
6.4 Interest Rate Risk
Interest rate risk is the risk of a negative impact on the Group's financial
condition due to its exposure to interest rates.
The following tables summarise the Group's exposure to interest rate risks.
Included in the tables are the Group's assets and liabilities at carrying
amounts categorized by contractual reprising date for floating rate items and
maturity day for fixed rate items.
+--------------------+--------+---------+----------+-------+-------+---------------+---------+
| Amounts presented | Less | From | From | From | More |Uncategorized | Total |
| in EUR '000 | than | 1 to | 3 to | 1 to | than | | |
| As at 31 December | 1 | 3 | 12 | 5 | 5 | | |
| 2009 | month | months | months |years |years | | |
+--------------------+ + + + + + + +
| ASSETS | | | | | | | |
+--------------------+--------+---------+----------+-------+-------+---------------+---------+
| Cash and other | 24,486 | 102,356 | - | - | - | - | 126,842 |
| equivalents | | | | | | | |
+--------------------+--------+---------+----------+-------+-------+---------------+---------+
| Trading portfolio | 1,195 | 7,624 | 6,765 | - | - | 2,914 | 18,499 |
| and other | | | | | | | |
| financial assets | | | | | | | |
| at fair value | | | | | | | |
| through Profit & | | | | | | | |
| Loss | | | | | | | |
+--------------------+--------+---------+----------+-------+-------+---------------+---------+
| Investment | - | - | - | - | - | 193,886 | 193,886 |
| portfolio | | | | | | | |
+--------------------+--------+---------+----------+-------+-------+---------------+---------+
| Derivative | - | - | - | - | - | 80 | 80 |
| financial | | | | | | | |
| instruments | | | | | | | |
+--------------------+--------+---------+----------+-------+-------+---------------+---------+
| Other assets | - | - | - | - | - | 969 | 969 |
+--------------------+--------+---------+----------+-------+-------+---------------+---------+
| Total assets | 25,681 | 109,980 | 6,765 | - | - | 197,850 | 340,276 |
+--------------------+--------+---------+----------+-------+-------+---------------+---------+
| | | | | | | | |
| As at 31 December | | | | | | | |
| 2009 | | | | | | | |
+--------------------+--------+---------+----------+-------+-------+---------------+---------+
| LIABILITIES | | | | | | | |
+--------------------+--------+---------+----------+-------+-------+---------------+---------+
| Long term loans | - | - | 198,104 | - | - | - | 198,104 |
+--------------------+--------+---------+----------+-------+-------+---------------+---------+
| Financial | - | - | 1,687 | - | - | - | 1,687 |
| liabilities at | | | | | | | |
| fair value through | | | | | | | |
| profit & loss | | | | | | | |
+--------------------+--------+---------+----------+-------+-------+---------------+---------+
| Derivative | - | - | - | - | - | 21 | 21 |
| financial | | | | | | | |
| instruments | | | | | | | |
+--------------------+--------+---------+----------+-------+-------+---------------+---------+
| Other Liabilities | - | - | - | - | - | 1,109 | 1,109 |
+--------------------+--------+---------+----------+-------+-------+---------------+---------+
| Total Liabilities | - | - | 199,791 | - | - | 1,130 | 200,921 |
+--------------------+--------+---------+----------+-------+-------+---------------+---------+
| Net interest gap | 25,681 | 109,980 | -193,026 | - | - | 196,720 | 139,355 |
+--------------------+--------+---------+----------+-------+-------+---------------+---------+
+--------------------+-----------+---------+-----------+---------+----------+---------------+-----------+
| Amounts presented | Less | From | From | From | More |Uncategorized | Total |
| in EUR '000 | than | 1 to | 3 to | 1 to | than | | |
| | 1 | 3 | 12 | 5 | 5 | | |
| | month | months | months | years | years | | |
+--------------------+ + + + + + + +
| As at 31 December | | | | | | | |
| 2008 | | | | | | | |
+--------------------+-----------+---------+-----------+---------+----------+---------------+-----------+
| Total assets | 76,155 | 72,455 | 3,688 | - | - | 251,392 | 403,689 |
+--------------------+-----------+---------+-----------+---------+----------+---------------+-----------+
| Total Liabilities | - | - | 198,393 | - | - | 1,755 | 200,148 |
+--------------------+-----------+---------+-----------+---------+----------+---------------+-----------+
| Net interest gap | 76,155 | 72,455 | (194,705) | - | - | 249,637 | 203,541 |
+--------------------+-----------+---------+-----------+---------+----------+---------------+-----------+
| | | | | | | | |
+--------------------+-----------+---------+-----------+---------+----------+---------------+-----------+
| As at 31 December | Less | From | From | From | More |Uncategorized | Total |
| 2007 | than | 1 to | 3 to | 1 to | than | | |
| | 1 | 3 | 12 | 5 | 5 | | |
| | month | months | months | years | years | | |
+--------------------+-----------+---------+-----------+---------+----------+---------------+-----------+
| Total assets | | | | | | | |
+--------------------+-----------+---------+-----------+---------+----------+---------------+-----------+
| Total liabilities | 1,326,590 | 418,754 | 109,784 | 12,405 | 28,400 | 77,076 | 1,973,009 |
+--------------------+-----------+---------+-----------+---------+----------+---------------+-----------+
| Net interest gap | 92,803 | 17,106 | 112,442 | 241,634 | (12,546) | 325,899 | 777,347 |
+--------------------+-----------+---------+-----------+---------+----------+---------------+-----------+
6.5 Liquidity Risk
Liquidity risk arises from the Group's financing process and management of the
open positions in the market. Liquidity risk is the risk that the Group is
unable to meet its payment obligations associated with financing liabilities
when they fall due and to replace funds when they are withdrawn. The consequence
may be the failure to meet obligations to repay depositors, to fulfil
commitments to lend, and to liquidate its financial assets at fair value.
The Group has a significant amount of cash and cash equivelants as well as
significant tradable investments as at 31 December 2009. There are no material
uncertainties regarding the going concern of the Group.
6.5.1 Non derivative contractual cash flows
The table below presents the cash flows payable by the Group under
non-derivative financial liabilities remaining contractual maturities at the
balance sheet date. The amounts disclosed in the table are the contractual
undiscounted cash flows.
Amounts presented in EUR '000
+---------------+---------+--------+--------+---------+--------+---------+
| As at 31 | | | | | | |
| December | | | | | | |
| 2009 | | | | | | |
+---------------+---------+--------+--------+---------+--------+---------+
| LIABILITIES | Less | 1-3 | 3-12 | 1-5 |over 5 | Total |
| | than 1 |months |months | years | years | |
| | month | | | | | |
+---------------+---------+--------+--------+---------+--------+---------+
| Long term | - | 1,729 | 5,282 | 205,243 | - | 212,253 |
| loans | | | | | | |
+---------------+---------+--------+--------+---------+--------+---------+
| Financial | - | | 106 | 1,262 | 750 | 2,119 |
| liabilities | | | | | | |
| at fair value | | | | | | |
| through | | | | | | |
| profit & loss | | | | | | |
+---------------+---------+--------+--------+---------+--------+---------+
| Other | - | 969 | - | - | - | 969 |
| liabilities | | | | | | |
+---------------+---------+--------+--------+---------+--------+---------+
| Total | - | 2,698 | 5,387 | 206,505 | 750 | 215,341 |
| liabilities | | | | | | |
+---------------+---------+--------+--------+---------+--------+---------+
+---------------+-----------+---------+---------+---------+---------+-----------+
| As at 31 | | | | | | |
| December | | | | | | |
| 2008 | | | | | | |
+---------------+-----------+---------+---------+---------+---------+-----------+
| LIABILITIES | Less | 1-3 | 3-12 | 1-5 | over 5 | Total |
| | than 1 | months | months | years | years | |
| | month | | | | | |
+---------------+-----------+---------+---------+---------+---------+-----------+
| Due to other | - | 2,976 | 11,808 | 220,639 | - | 235,423 |
| banks | | | | | | |
+---------------+-----------+---------+---------+---------+---------+-----------+
| Other | - | 1,755 | - | - | - | 1,755 |
| liabilities | | | | | | |
+---------------+-----------+---------+---------+---------+---------+-----------+
| Total | - | 4,731 | 11,808 | 220,639 | - | 237,178 |
| liabilities | | | | | | |
+---------------+-----------+---------+---------+---------+---------+-----------+
| | | | | | | |
+---------------+-----------+---------+---------+---------+---------+-----------+
| As at 31 | | | | | | |
| December | | | | | | |
| 2007 | | | | | | |
+---------------+-----------+---------+---------+---------+---------+-----------+
| LIABILITIES | Less | 1-3 | 3-12 | 1-5 | over 5 | Total |
| | than 1 | months | months | years | years | |
| | month | | | | | |
+---------------+-----------+---------+---------+---------+---------+-----------+
| Due to other | 288,506 | 145,435 | - | - | - | 433,941 |
| Banks | | | | | | |
+---------------+-----------+---------+---------+---------+---------+-----------+
| Due to | 1,041,364 | 278,979 | 112,359 | 13,852 | 3,733 | 1,450,287 |
| customers | | | | | | |
+---------------+-----------+---------+---------+---------+---------+-----------+
| Bonds issued | - | 580 | 984 | 3,998 | 30,556 | 36,118 |
+---------------+-----------+---------+---------+---------+---------+-----------+
| Other | 260 | 10,615 | - | - | 5 | 10,880 |
| liabilities | | | | | | |
+---------------+-----------+---------+---------+---------+---------+-----------+
| Total | 1,330,130 | 435,609 | 113,343 | 17,850 | 34,294 | 1,931,226 |
| liabilities | | | | | | |
+---------------+-----------+---------+---------+---------+---------+-----------+
6.5.2 Derivative contractual cash flows
The table below analyses the Group's derivative financial liabilities that will
be settled on a net basis into relevant maturity groupings based on the
remaining period at the balance sheet date to the contractual maturity date. The
amounts disclosed in the table are the contractual undiscounted cash flows.
+-------------------+------------+--------+--------+-------+-------+-------+
| As at 31 | | | | | | |
| December 2009 | | | | | | |
| | | | | | | |
| Amounts presented | | | | | | |
| in EUR '000 | | | | | | |
+-------------------+------------+--------+--------+-------+-------+-------+
| LIABILITIES | Less than | 1-3 | 3-12 | 1-5 | over |Total |
| | 1 month |months |months |years | 5 | |
| | | | | |years | |
+-------------------+------------+--------+--------+-------+-------+-------+
| Derivative | | 21 | | | | |
| financial | | | | | | |
| instruments | | | | | | |
+-------------------+------------+--------+--------+-------+-------+-------+
| Total liabilities | - | 21 | - | - | - | - |
+-------------------+------------+--------+--------+-------+-------+-------+
There were no derivatives outstanding at 31 December 2008.
As at 31 December 2007
+--------------------+------------+---------+---------+---------+-------+--------+
| Amounts presented | Less than | 1 - 3 |3 - 12 | 1 - 5 | Over | Total |
| in EUR '000 | 1 month | months | months | years | 5 | |
| | | | | |years | |
+--------------------+------------+---------+---------+---------+-------+--------+
| Derivatives held for trading: | | | | | |
+---------------------------------+---------+---------+---------+-------+--------+
| -Other derivative | 1,444 | - | (297) | - | - | 1,147 |
| contracts | | | | | | |
+--------------------+------------+---------+---------+---------+-------+--------+
| Total | 1,444 | - | (297) | - | - | 1,147 |
+--------------------+------------+---------+---------+---------+-------+--------+
The table below analyses the Group's derivative financial instruments that will
be settled on a gross basis into relevant maturity groupings based on the
remaining period at the balance sheet date to the contractual maturity date. The
amounts disclosed in the table are the contractual undiscounted cash flows.
+----------+----------------------+----------+----------+--------+---------+--------+---------+---------+----------+
| As at 31 December 2007 | Less than 1 month | 1 - 3 | 3 - | 1 - 5 | Over 5 | Total | |
| | | months | 12 | years | years | | |
| | | | months | | | | |
+---------------------------------+---------------------+--------+---------+--------+---------+---------+----------+
| Derivatives held for trading: | | | | | | |
+-------------------------------------------------------+--------+---------+--------+---------+---------+----------+
| -Foreign exchange derivatives | | | | | | | |
+---------------------------------+---------------------+--------+---------+--------+---------+---------+----------+
| | -Outflow | 180,428 | 46,529 | 37,258 | - | - | 264,214 |
+----------+---------------------------------+----------+--------+---------+--------+---------+--------------------+
| | -Inflow | 177,738 | 46,444 | 36,781 | - | - | 260,963 |
+----------+---------------------------------+----------+--------+---------+--------+---------+--------------------+
| | -Interest rate derivatives | | | | | | |
+----------+---------------------------------+----------+--------+---------+--------+---------+--------------------+
| | -Outflow | 197 | 2,152 | 6,139 | 8,943 | 15,737 | 33,168 |
+----------+---------------------------------+----------+--------+---------+--------+---------+--------------------+
| | -Inflow | 62 | 1,124 | 7,730 | 9,760 | 15,539 | 34,215 |
+----------+---------------------------------+----------+--------+---------+--------+---------+--------------------+
| | -Other derivative contracts | | | | | | |
+----------+---------------------------------+----------+--------+---------+--------+---------+--------------------+
| | -Outflow | | | | | | |
+----------+---------------------------------+----------+--------+---------+--------+---------+--------------------+
| | -Inflow | - | 4 | 13 | 52 | - | 70 |
+----------+---------------------------------+----------+--------+---------+--------+---------+--------------------+
| Total Outflow | 180,625 | 48,681 | 43,397 | 8,943 | 15,737 | 297,383 | |
+---------------------------------+---------------------+--------+---------+--------+---------+---------+----------+
| Total Inflow | 177,800 | 47,572 | 44,525 | 9,812 | 15,539 | 295,248 | |
+---------------------------------+---------------------+--------+---------+--------+---------+---------+----------+
| | | | | | | | | | |
+----------+----------------------+----------+----------+--------+---------+--------+---------+---------+----------+
6.6 Financial instruments measured at fair value
The Group adopted the amendments to IFRS 7 Improving Disclosures about Financial
Instruments effective from 1 January 2009. These amendments require the Group to
present certain information about financial instruments measured at fair value
in the statement of financial position.
In the first year of application comparative information need not be presented
for the disclosures required by the amendment. Accordingly, the disclosure for
the fair value hierarchy is only presented for the 31 December 2009 year end.
The following table presents financial assets and liabilities measured at fair
value in the statement of financial position in accordance with the fair value
hierarchy.
This hierarchy groups financial assets and liabilities into three levels based
on the significance of inputs used in measuring the fair value of the financial
assets and liabilities. The fair value hierarchy has the following levels:
· Level 1: quoted prices (unadjusted) in active markets for identical
assets or liabilities;
· Level 2: inputs other than quoted prices included within Level 1 that are
observable for the asset or liability, either directly (ie as prices) or
indirectly (ie derived from prices); and
· Level 3: inputs for the asset or liability that are not based on
observable market data (unobservable inputs).
The level within which the financial asset or liability is classified is
determined based on the lowest level of significant input to the fair value
measurement.
The financial assets and liabilities measured at fair value in the statement of
financial position are grouped into the fair value hierarchy as follows:
+------------------------+---------+-------+-------+
| Amounts presented in | LEVEL |LEVEL |LEVEL |
| EUR '000 | 1 | 2 | 3 |
+------------------------+---------+-------+-------+
| Assets | | | |
+------------------------+---------+-------+-------+
| Listed securities and | 212,385 | - | - |
| debentures | | | |
+------------------------+---------+-------+-------+
| Listed derivatives | 80 | - | - |
+------------------------+---------+-------+-------+
| Total | 212,465 | - | - |
+------------------------+---------+-------+-------+
| | | | |
+------------------------+---------+-------+-------+
| Liabilities | | | |
+------------------------+---------+-------+-------+
| Listed debentures | 1,687 | - | - |
+------------------------+---------+-------+-------+
| Listed derivatives | 21 | - | - |
+------------------------+---------+-------+-------+
| Total | 1,709 | - | - |
+------------------------+---------+-------+-------+
| | | | |
+------------------------+---------+-------+-------+
| Net fair value | 210,756 | - | - |
+------------------------+---------+-------+-------+
There have been no transfers between levels 1 and 2 in the reporting period.
6.7 Capital management
The Group' s capital management objectives are:
- to ensure the Group's ability to continue as a going concern; and
- to provide an adequate return to shareholders
The Group manages the capital structure and makes adjustments to it in the light
of changes in economic conditions and the risk characteristics of the underlying
assets. In order to maintain or adjust the capital structure, the Group may
adjust the amount of dividends paid to shareholders, return capital to
shareholders, issue new shares, or sell assets to reduce debt.
The Group monitors capital on the basis of the debt-to-capital ratio. This ratio
is calculated as net debt ÷ capital. Net debt is calculated as long term loans
(as shown in the statement of financial position) less cash and cash
equivalents. Capital comprises all components of equity (ie share capital, share
premium, non-controlling interests, retained earnings, and revaluation reserve).
+---------------------------------+------------+------------+
| Amounts presented in EUR '000 |31/12/2009 |31/12/2008 |
+---------------------------------+------------+------------+
| Net debt | | |
+---------------------------------+------------+------------+
| Long term loans | 198,104 | 198,393 |
+---------------------------------+------------+------------+
| Less cash and cash equivalents | -126,842 | -148,610 |
+---------------------------------+------------+------------+
| Total | 71,262 | 49,783 |
+---------------------------------+------------+------------+
| | | |
+---------------------------------+------------+------------+
| Total equity | 139,478 | 203,541 |
+---------------------------------+------------+------------+
| Net debt-to capital- ratio | 0.51 | 0.24 |
+---------------------------------+------------+------------+
7. INTEREST INCOME & INTEREST EXPENSE
+---------------------------------+---------------------------+------------+
| Amounts presented in EUR '000 | 31/12/2009 |31/12/2008 |
+---------------------------------+---------------------------+------------+
| Interest and similar income | | |
+---------------------------------+---------------------------+------------+
| From deposits in financial | 1,767 | 7,374 |
| institutions | | |
+---------------------------------+---------------------------+------------+
| From securities | 650 | 52 |
+---------------------------------+---------------------------+------------+
| From loans and receivables | - | 732 |
+---------------------------------+---------------------------+------------+
| Total | 2,417 | 8,158 |
+---------------------------------+---------------------------+------------+
| | | |
+---------------------------------+---------------------------+------------+
| Interest and similar expenses | | |
+---------------------------------+---------------------------+------------+
| Due to financial institutions | (9,158) | (10,946) |
+---------------------------------+---------------------------+------------+
| Other interest related expenses | (65) | (363) |
+---------------------------------+---------------------------+------------+
| Total | (9,223) | (11,309) |
+---------------------------------+---------------------------+------------+
8. FEE AND COMMISSION INCOME & EXPENSE
+---------------------------------+------------+------------+
| Amounts presented in EUR '000 |31/12/2009 |31/12/2008 |
+---------------------------------+------------+------------+
| Fee and commission income from: | | |
+---------------------------------+------------+------------+
| Loans and advances to third | - | 86 |
| parties | | |
+---------------------------------+------------+------------+
| Total | - | 86 |
+---------------------------------+------------+------------+
| | | |
| Fee and commission expense | | |
| from: | | |
+---------------------------------+------------+------------+
| Securities brokerage & | (393) | (556) |
| safekeeping | | |
+---------------------------------+------------+------------+
| Loans fees and commissions | - | (325) |
+---------------------------------+------------+------------+
| Total | (393) | (881) |
+---------------------------------+------------+------------+
9. DIVIDEND INCOME
+---------------------------------+----------------------+------------+
| Amounts presented in EUR '000 | 31/12/2009 |31/12/2008 |
+---------------------------------+----------------------+------------+
| Dividends from | 18,162 | 729 |
| available-for-sale securities | | |
+---------------------------------+----------------------+------------+
| Dividends from trading | 198 | - |
| securities | | |
+---------------------------------+----------------------+------------+
| Total | 18,360 | 729 |
+---------------------------------+----------------------+------------+
From the total amount of dividend from AFS securities, the amount of EUR
16,257,139 is related to dividends received from a listed company on the Athens
Stock Exchange.
10. GAINS FROM DERIVATIVE FINANCIAL INSTRUMENTS
+---------------------------------+-----------------------+---------------------+
| Realised / settlement gains | | |
+---------------------------------+-----------------------+---------------------+
| Amounts presented in EUR '000 | 31/12/2009 | 31/12/2008 |
+---------------------------------+-----------------------+---------------------+
| Listed derivatives | 22 | |
| | | - |
+---------------------------------+-----------------------+---------------------+
| Share swaps | | 9,624 |
| | - | |
+---------------------------------+-----------------------+---------------------+
| Total | 22 | 9,624 |
+---------------------------------+-----------------------+---------------------+
| | | |
| Valuation Gains | | |
+---------------------------------+-----------------------+---------------------+
| Amounts presented in EUR '000 | 31/12/2009 | 31/12/2008 |
+---------------------------------+-----------------------+---------------------+
| Listed derivatives | 1 | - |
+---------------------------------+-----------------------+---------------------+
| Total | 1 | - |
+---------------------------------+-----------------------+---------------------+
11. REALISED GAINS/(LOSSES) FROM DISPOSAL OF AVAILABLE-FOR-SALE FINANCIAL
ASSETS
+---------------------------------+---------------------+-------------------+
| Amounts presented in EUR '000 | 31/12/2009 | 31/12/2008 |
+---------------------------------+---------------------+-------------------+
| Listed stocks | 7,939 | (44,282) |
+---------------------------------+---------------------+-------------------+
| Total | 7,939 | (44,282) |
+---------------------------------+---------------------+-------------------+
12. REALISED GAIN FROM DISPOSAL OF FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT
& LOSS
+---------------------------------+---------------------+------------+
| Amounts presented in EUR '000 | 31/12/2009 |31/12/2008 |
+---------------------------------+---------------------+------------+
| Listed shares | 13,586 | - |
+---------------------------------+---------------------+------------+
| Listed bonds | 1,251 | - |
+---------------------------------+---------------------+------------+
| Total | 14,837 | - |
+---------------------------------+---------------------+------------+
13.UNREALISED GAIN FROM VALUATION OF FINANCIAL ASSETS AT FAIR VALUE THROUGH
PROFIT & LOSS
+---------------------------------+-----------------------+------------+
| Amounts presented in EUR '000 | 31/12/2009 |31/12/2008 |
+---------------------------------+-----------------------+------------+
| Listed shares | 34 | - |
+---------------------------------+-----------------------+------------+
| Listed bonds | 636 | - |
+---------------------------------+-----------------------+------------+
| Total | 670 | - |
+---------------------------------+-----------------------+------------+
14. IMPAIRMENT LOSSES
+---------------------------------+-------------------+------------------+
| Amounts presented in EUR '000 | 31/12/2009 | 31/12/2008 |
+---------------------------------+-------------------+------------------+
| Listed stocks | (81,717) | (185,146) |
+---------------------------------+-------------------+------------------+
| Total | (81,717) | (185,146) |
+---------------------------------+-------------------+------------------+
As of 31 December 2009 and 31 December 2008, the total of approximately EUR
81,717,403 and EUR 185,145,946 respectively, was generated from the difference
between the acquisition cost of the investments classified as available-for-sale
and fair value of the aforementioned portfolio. The management of IRF, taking
into consideration the following factors:
a) the large decline in the fair value of the investments;
b) the budget crises in the Hellenic Republic
c) the prolonged negative trend on the Athens Stock Exchange; and
d) the combined effect of the above on international economic and market
conditions,
has concluded that there is an objective evidence of impairment of the
available-for-sale investments.
Following the stipulations of IAS 39 paragraphs 59 and 67, when a decline in the
fair value of an available-for-sale financial asset has been recognised directly
in equity and there is objective evidence that the asset is impaired, the
cumulative loss that had been recognised directly in equity shall be removed
from equity and recognised in profit or loss even though the financial asset has
not been derecognised.
15. STAFF COSTS
+---------------------------------+------------+------------+
| Amounts presented in EUR '000 |31/12/2009 |31/12/2008 |
+---------------------------------+------------+------------+
| Wages and salaries | (100) | (100) |
+---------------------------------+------------+------------+
| Total | (100) | (100) |
+---------------------------------+------------+------------+
| | | |
+---------------------------------+------------+------------+
| |31/12/2009 |31/12/2008 |
+---------------------------------+------------+------------+
| Number of employees | 1 | 1 |
+---------------------------------+------------+------------+
The CEO, is the sole employee of the Company.
16. OTHER OPERATING EXPENSES
+---------------------------------+----------------------------+------------+
| Amounts presented in EUR '000 | 31/12/2009 | 31/12/2008 |
+---------------------------------+----------------------------+------------+
| Consulting and other third | (1,270) | (1,740) |
| party fees | | |
+---------------------------------+----------------------------+------------+
| Legal fees | (155) | (189) |
+---------------------------------+----------------------------+------------+
| Other operating expenses | (354) | (144) |
+---------------------------------+----------------------------+------------+
| Total | (1,778) | (2,074) |
+---------------------------------+----------------------------+------------+
17. DISCONTINUED OPERATIONS
17.1 NET PROFIT FROM DISCONTINUED OPERATIONS
On 24 September 2008, IRF sold 15.95% investment in Proton Bank from its 20.6%
percent interest. The results of Proton Bank's Group were consolidated in the
financial statements of IRF, as discontinued operations, up to the date of the
disposal and for the comparative periods.
Net profit from discontinued operation is analyzed as follows:
+---------------------------------------+------------+
| Amounts presented in EUR '000 | 31/12/2008 |
+---------------------------------------+------------+
| Interest and similar income | 98,772 |
+---------------------------------------+------------+
| Interest and similar charges | (65,261) |
+---------------------------------------+------------+
| Net interest income | 33,511 |
+---------------------------------------+------------+
| | |
+---------------------------------------+------------+
| Fee and commission income | 21,569 |
+---------------------------------------+------------+
| Fee and commission expense | (7,451) |
+---------------------------------------+------------+
| Net fee and commission income | 14,118 |
+---------------------------------------+------------+
| Income from insurance services | 24,045 |
+---------------------------------------+------------+
| Expenses from insurance services | (7,119) |
+---------------------------------------+------------+
| Net Income from insurance services | 16,926 |
+---------------------------------------+------------+
| | |
+---------------------------------------+------------+
| Dividend income | 1,872 |
+---------------------------------------+------------+
| Net trading income | (20,455) |
+---------------------------------------+------------+
| Loss on investment portfolio | (23,852) |
| recognised in profit and loss due to | |
| disposal of subsidiary. | |
+---------------------------------------+------------+
| Net income from financial instruments | 4,425 |
| designated at fair value | |
+---------------------------------------+------------+
| Gains less losses from investment | (40) |
| securities | |
+---------------------------------------+------------+
| Other operating income | 1,648 |
+---------------------------------------+------------+
| | (36,402) |
+---------------------------------------+------------+
| Total net income | 28,152 |
+---------------------------------------+------------+
| | |
+---------------------------------------+------------+
| Staff costs | (20,851) |
+---------------------------------------+------------+
| Other operating expenses | (19,078) |
+---------------------------------------+------------+
| Write-off of goodwill | (5,757) |
+---------------------------------------+------------+
| Depreciation | (14,323) |
+---------------------------------------+------------+
| Insurance claims | (17,716) |
+---------------------------------------+------------+
| Impairment losses on financial assets | - |
| and non financial assets | |
+---------------------------------------+------------+
| Total operating expenses | (77,726) |
+---------------------------------------+------------+
| Share of (losses)/profits of | (1,273) |
| associates | |
+---------------------------------------+------------+
| (Loss)/Profit before tax | (50,847) |
+---------------------------------------+------------+
| Less: Income tax | (1,621) |
+---------------------------------------+------------+
| (Loss)/Profit after tax from | (52,468) |
| discontinued operations | |
+---------------------------------------+------------+
| Loss from disposal of discontinued | (26,952) |
| operations | |
+---------------------------------------+------------+
| | |
+---------------------------------------+------------+
| Impairment of goodwill previously | (7,720) |
| recognised | |
+---------------------------------------+------------+
| | |
+---------------------------------------+------------+
| Net profit from discontinued | (87,139) |
| operations | |
+---------------------------------------+------------+
The amount of approximately EUR 23,852,000 in the period of 2008, refers to losses
from the valuation of Proton's available-for-sale portfolio, recognised directly
to equity. Because of the disposal of the subsidiary the relevant amount is
recognised as a loss in the income statement. The amount of approximately EUR
7,720,000 in the period of 2008, refers to an impairment loss recognised during
the second quarter of the year, before the sale of the subsidiary.
17.2 LOSS ON DISPOSAL OF PROTON BANK
The assets and the liabilities of Proton as of the disposal date are as follows:
+---------------------------------------------+------------+
| Amounts presented in EUR '000 | |
+---------------------------------------------+------------+
| Cash and balances with the Central Bank | 60,270 |
+---------------------------------------------+------------+
| Loans and advances to banks | 55,646 |
+---------------------------------------------+------------+
| Loans and receivables | 1,316,680 |
+---------------------------------------------+------------+
| Derivative financial instruments | 28,208 |
+---------------------------------------------+------------+
| Financial assets at fair value through | 147,123 |
| profit or loss | |
+---------------------------------------------+------------+
| Financial assets designated at fair value | 44,524 |
+---------------------------------------------+------------+
| Investment portfolio | 319,943 |
+---------------------------------------------+------------+
| Investments in associates | 2,617 |
+---------------------------------------------+------------+
| Intangible assets | 155,656 |
+---------------------------------------------+------------+
| Property, plant and equipment | 27,325 |
+---------------------------------------------+------------+
| Deferred tax assets | 12,728 |
+---------------------------------------------+------------+
| Other assets | 47,048 |
+---------------------------------------------+------------+
| Non-current assets held for sale | 41,568 |
+---------------------------------------------+------------+
| Total assets | 2,259,336 |
+---------------------------------------------+------------+
| | |
+---------------------------------------------+------------+
| | |
+---------------------------------------------+------------+
| Amounts presented in EUR '000 | |
+---------------------------------------------+------------+
| less | |
+---------------------------------------------+------------+
| Due to banks | 354,658 |
+---------------------------------------------+------------+
| Due to customers | 1,419,834 |
+---------------------------------------------+------------+
| Derivative financial instruments | 19,952 |
+---------------------------------------------+------------+
| Debt securities in issue | 25,219 |
+---------------------------------------------+------------+
| Retirement benefit obligations | 1,528 |
+---------------------------------------------+------------+
| Current income tax liabilities | 9,144 |
+---------------------------------------------+------------+
| Deferred tax liabilities | 4,262 |
+---------------------------------------------+------------+
| Other liabilities | 9,634 |
+---------------------------------------------+------------+
| Liabilities related to non-current assets | 45,163 |
| held for sale | |
+---------------------------------------------+------------+
| Total liabilities | 1,889,394 |
+---------------------------------------------+------------+
| | |
+---------------------------------------------+------------+
| Total net assets | 369,942 |
+---------------------------------------------+------------+
| less: Minority rights | (249,055) |
+---------------------------------------------+------------+
| Total net assets disposed | 120,887 |
+---------------------------------------------+------------+
The loss from the disposal of Proton Group is analysed as follows:
+---------------------------------------------+-----------+
| Amounts presented in EUR '000 | |
+---------------------------------------------+-----------+
| Cash consideration | 64,727 |
+---------------------------------------------+-----------+
| Cost of remaining investment transferred to | 29,208 |
| available for sale portfolio | |
+---------------------------------------------+-----------+
| Total consideration | 93,935 |
+---------------------------------------------+-----------+
| Less: Total net assets disposed | (120,887) |
+---------------------------------------------+-----------+
| Loss on disposal | (26,952) |
+---------------------------------------------+-----------+
The net cash flow from the sale of Proton Group is analysed as follows:
+---------------------------------------------+----------+
| Amounts presented in EUR '000 | |
+---------------------------------------------+----------+
| Consideration paid in cash | 64,727 |
+---------------------------------------------+----------+
| less: cash & cash equivalent of Proton at | (66,604) |
| the date of disposal | |
+---------------------------------------------+----------+
| Cash received from the sale of Proton, net | (1,877) |
| of cash disposed | |
+---------------------------------------------+----------+
18. PROPERTY, PLANT AND EQUIPMENT AND INVESTMENT PROPERTY
+------------------+---------+-----------+-----------+----------+-----------+----------+
| Amounts | Land | Buildings | Machinery | Vehicles | Furniture | Total |
| presented in EUR | | | | | | |
| '000 | | | | | | |
+------------------+---------+-----------+-----------+----------+-----------+----------+
| Balance at 1 | | | | | | |
| January 2008 | | | | | | |
+------------------+---------+-----------+-----------+----------+-----------+----------+
| Cost | 7,233 | 14,900 | 72 | 185 | 10,266 | 32,656 |
+------------------+---------+-----------+-----------+----------+-----------+----------+
| Accumulated | - | (1,824) | (34) | (116) | (2.803) | (4.777) |
| depreciation | | | | | | |
+------------------+---------+-----------+-----------+----------+-----------+----------+
| Net carrying | 7,233 | 13,076 | 38 | 69 | 7,463 | 27,880 |
| amount | | | | | | |
+------------------+---------+-----------+-----------+----------+-----------+----------+
| Year ended 31 | | | | | | |
| December 2008 | | | | | | |
+------------------+---------+-----------+-----------+----------+-----------+----------+
| Opening | 7,233 | 13,076 | 38 | 69 | 7,463 | 27,880 |
| currying amount | | | | | | |
+------------------+---------+-----------+-----------+----------+-----------+----------+
| Exchange | - | 3 | - | - | - | 3 |
| differences | | | | | | |
+------------------+---------+-----------+-----------+----------+-----------+----------+
| Cost | | | | | | |
+------------------+---------+-----------+-----------+----------+-----------+----------+
| Accumulated | | | | | | |
| depreciation | | | | | | |
+------------------+---------+-----------+-----------+----------+-----------+----------+
| Additions | - | 498 | 6 | - | 1,010 | 1,514 |
+------------------+---------+-----------+-----------+----------+-----------+----------+
| Disposals - | - | - | - | - | (158) | (158) |
| cost of | | | | | | |
| acquisition | | | | | | |
+------------------+---------+-----------+-----------+----------+-----------+----------+
| Disposals - | - | - | - | - | 32 | 32 |
| accumulated | | | | | | |
| depreciation | | | | | | |
+------------------+---------+-----------+-----------+----------+-----------+----------+
| Depreciation | - | (778) | (8) | (26) | (1,133) | (1,945) |
| charge | | | | | | |
+------------------+---------+-----------+-----------+----------+-----------+----------+
| Transfer to | (7,233) | (12,799) | (36) | (43) | (7,214) | (27,325) |
| disposal of | | | | | | |
| Proton Bank | | | | | | |
+------------------+---------+-----------+-----------+----------+-----------+----------+
| Closing net | - | - | - | - | - | - |
| carrying amount | | | | | | |
+------------------+---------+-----------+-----------+----------+-----------+----------+
| | | | | | | |
+------------------+---------+-----------+-----------+----------+-----------+----------+
| Balance at 31 | | | | | | |
| December 2008 | | | | | | |
+------------------+---------+-----------+-----------+----------+-----------+----------+
| Net carrying | - | - | - | - | - | - |
| amount | | | | | | |
+------------------+---------+-----------+-----------+----------+-----------+----------+
19. GOODWILL AND OTHER INTANGIBLE ASSETS
+------------------+------+-------------+------------+----------+-----------+
| Amounts presented in EUR | Goodwill | Customer |Software | Total |
| '000 | | relations | | |
| | | & other | | |
| | |intangible | | |
| | | assets | | |
+-------------------------+-------------+------------+----------+-----------+
| Balance at 1 January | | | | |
| 2008 | | | | |
+-------------------------+-------------+------------+----------+-----------+
| Cost | 157,184 | 19,538 | 4,747 | 181,469 |
+-------------------------+-------------+------------+----------+-----------+
| Accumulated | (7,465) | (5,216) | (2,003) | (14,684) |
| amortisation | | | | |
+-------------------------+-------------+------------+----------+-----------+
| Net carrying amount | 149,719 | 14,322 | 2,744 | 166,785 |
+-------------------------+-------------+------------+----------+-----------+
| | | | |
+---------------------------------------+------------+----------+-----------+
| Year ended 31 December 2008 | | | |
+---------------------------------------+------------+----------+-----------+
| Opening net carrying | 149,719 | 14,322 | 2,744 | 166,785 |
| amount | | | | |
+-------------------------+-------------+------------+----------+-----------+
| Transfer in assets held | | | | - |
| for sale: | | | | |
+-------------------------+-------------+------------+----------+-----------+
| -Cost | | | | - |
+-------------------------+-------------+------------+----------+-----------+
| -Accumulated | | | | - |
| amortisation | | | | |
+-------------------------+-------------+------------+----------+-----------+
| Additions | | | 293 | 293 |
+-------------------------+-------------+------------+----------+-----------+
| Write-off, disposals | | | | - |
+-------------------------+-------------+------------+----------+-----------+
| -Cost | | | | - |
+-------------------------+-------------+------------+----------+-----------+
| | (7,720) | | | (7,720) |
| -Accumulated | | | | |
| amortisation | | | | |
+------------------+--------------------+------------+----------+-----------+
| Amortisation charge | | (3,129) | (573) | (3,702) |
+-------------------------+-------------+------------+----------+-----------+
| Transfer in disposal of | (141,999) | (11,193) | (2,464) | (155,656) |
| Proton Bank | | | | |
+-------------------------+-------------+------------+----------+-----------+
| Closing net carrying | - | - | - | - |
| amount | | | | |
+-------------------------+-------------+------------+----------+-----------+
| | | | |
+---------------------------------------+------------+----------+-----------+
| Balance at 31 December 2008 | | | |
+---------------------------------------+------------+----------+-----------+
| Cost | - | - | - | - |
+-------------------------+-------------+------------+----------+-----------+
| Accumulated | - | - | - | - |
| amortisation, | | | | |
| impairment | | | | |
+-------------------------+-------------+------------+----------+-----------+
| Net carrying amount | - | - | - | - |
+-------------------------+-------------+------------+----------+-----------+
| | | | | | |
+------------------+------+-------------+------------+----------+-----------+
+------------------------+------------+------------+----------+----------+
| Amounts presented in | Goodwill | Customer |Software | Total |
| EUR '000 | | relations | | |
| | | & other | | |
| | |intangible | | |
| | | assets | | |
+------------------------+------------+------------+----------+----------+
| Year ended 31 December | | | | |
| 2007 | | | | |
+------------------------+------------+------------+----------+----------+
| Opening net carrying | 168,353 | 18,495 | 3,252 | 190,100 |
| amount | | | | |
+------------------------+------------+------------+----------+----------+
| Transfer in assets | 0 | | | 0 |
| held for sale: | | | | |
+------------------------+------------+------------+----------+----------+
| -Cost | (12,393) | | (126) | (12,519) |
+------------------------+------------+------------+----------+----------+
| -Accumulated | 0 | | 46 | 46 |
| amortisation | | | | |
+------------------------+------------+------------+----------+----------+
| Additions | 1,224 | | 309 | 1,533 |
+------------------------+------------+------------+----------+----------+
| Write-off, disposals | | | | |
+------------------------+------------+------------+----------+----------+
| -Cost | | | (8) | (8) |
+------------------------+------------+------------+----------+----------+
| -Accumulated amortisation | | 1 | 1 |
+-------------------------------------+------------+----------+----------+
| Amortisation charge | | (4,173) | (730) | (4,903) |
+------------------------+------------+------------+----------+----------+
| Impairment charge | (7,465) | | | (7,465) |
+------------------------+------------+------------+----------+----------+
| Closing net carrying | 149,719 | 14,322 | 2,744 | 166,785 |
| amount | | | | |
+------------------------+------------+------------+----------+----------+
Additions to goodwill during the year 2007 are attributable to the acquisition
of an additional stake in Proton and other subsidiaries. The Group on 30 June
2008 reported an impairment loss of approximately EUR 7,720,000 being the excess
of Proton's carrying amount.
The recoverable amount of Proton Group has been determined based on value in use
calculations. This impairment loss, due to the sale of Proton Bank, has been
transferred to loss from discontinued operations (note 17).
20. INVESTMENTS IN ASSOCIATES
+-----------------------------+---------------------+------------+----------------------------+
| Amounts presented in EUR | 31/12/2009 |31/12/2008 | 31/12/2007 |
| '000 | | | |
+-----------------------------+---------------------+------------+----------------------------+
| Investments in associates | 228 | | 3,886 |
| | | - | |
+-----------------------------+---------------------+------------+----------------------------+
| Total | 228 | | 3,886 |
| | | - | |
+-----------------------------+---------------------+------------+----------------------------+
For the year 2007, all investments in associates refer to a 29.20% holding by
Proton Bank to the closed-end fund Omega AEEX, a company listed on ASE. After
the disposal of Proton Bank, as of 31 December 2008, IRF does not hold any
investment in associates for 2008. In 2009, IRF investmented a nominal sum in
exchange for a 49% interest in "S.Goldman Asset Management Llc". Shares of
"S.Goldman Asset Management Llc" are not publicly listed on a stock exchange and
price quotes are thus unavailable.
Some brief financial information as at 31 December 2009 on the associate is
given below:
+-----------------------+----------+--------+-------------+-----------+---------------+
| Amounts presented in | Domicile | Assets | Liabilities | Profits |Participation |
| EUR '000 | | | | /(losses) | % |
+-----------------------+----------+--------+-------------+-----------+---------------+
| S.GOLDMAN ASSET | USA | 1,128 | 662 | 452 | 49% |
| MANAGEMENT LLC | | | | | |
+-----------------------+----------+--------+-------------+-----------+---------------+
21. LOANS AND ADVANCES TO CUSTOMERS
Loans and advances to customers refer to balances from Proton Group. Loans are
measured at amortized cost. Loans fair value is not materially different from
their carrying amount. The loan portfolio at a Group level for 2007 is analyzed
as follows:
+------------------------+-+------+------------+------------+-------------------------------------+
| Amounts presented in | | |31/12/2009 |31/12/2008 | 31/12/2007 |
| EUR '000 | | | | | |
+------------------------+-+------+------------+------------+-------------------------------------+
| Short term | | | | | |
+------------------------+-+------+------------+------------+-------------------------------------+
| Retail customers | | | | | |
+------------------------+-+------+------------+------------+-------------------------------------+
| Consumer loans /loans | | | - | - | 159,010 |
| to individuals | | | | | |
+------------------------+-+------+------------+------------+-------------------------------------+
| Credit cards | | | - | - | 37,232 |
+------------------------+-+------+------------+------------+-------------------------------------+
| Finance lease | | | - | - | 11,286 |
| receivables | | | | | |
+------------------------+-+------+------------+------------+-------------------------------------+
| Less: Allowances for | | | - | - | (4,561) |
| losses (impairment) on | | | | | |
| loans and advances to | | | | | |
| customers | | | | | |
+------------------------+-+------+------------+------------+-------------------------------------+
| Total current loans | | | - | - | 202,968 |
| and receivables | | | | | |
+------------------------+-+------+------------+------------+-------------------------------------+
| | | | | | |
+------------------------+-+------+------------+------------+-------------------------------------+
| Long term | | | | | |
+------------------------+-+------+------------+------------+-------------------------------------+
| Retail customers | | | | | |
+------------------------+-+------+------------+------------+-------------------------------------+
| Mortgages | | | - | - | 48,341 |
+------------------------+-+------+------------+------------+-------------------------------------+
| Corporate customers | | | | | |
+------------------------+-+------+------------+------------+-------------------------------------+
| Agriculture | | | - | - | 57,847 |
+------------------------+-+------+------------+------------+-------------------------------------+
| Mining | | | - | - | 1,309 |
+------------------------+-+------+------------+------------+-------------------------------------+
| Heavy industry | | | - | - | 113,773 |
+------------------------+-+------+------------+------------+-------------------------------------+
| Small Industry | | | - | - | 12,946 |
+------------------------+-+------+------------+------------+-------------------------------------+
| Building / | | | - | - | 139,832 |
| construction | | | | | |
+------------------------+-+------+------------+------------+-------------------------------------+
| Energy | | | - | - | 310 |
+------------------------+-+------+------------+------------+-------------------------------------+
| Commercial / Insurance | | | - | - | 259,391 |
| | | | | | |
+------------------------+-+------+------------+------------+-------------------------------------+
| Transportation | | | - | - | 205,918 |
+------------------------+-+------+------------+------------+-------------------------------------+
| Financial institutions | | | - | - | 45,906 |
+------------------------+-+------+------------+------------+-------------------------------------+
| Services | | | - | - | 29,752 |
+------------------------+-+------+------------+------------+-------------------------------------+
| Other companies | | | - | - | 222,280 |
+------------------------+-+------+------------+------------+-------------------------------------+
| Finance lease | | | - | - | 58,572 |
| receivables | | | | | |
+------------------------+-+------+------------+------------+-------------------------------------+
| Less: Allowances for | | | - | - | (31,119) |
| losses (impairment) on | | | | | |
| loans and advances to | | | | | |
| customers | | | | | |
+------------------------+-+------+------------+------------+-------------------------------------+
| Total non current | | | - | - | 1,165,057 |
| loans and receivables | | | | | |
+------------------------+-+------+------------+------------+-------------------------------------+
Loans and advances to customers include finance lease receivables. Group's
finance lease receivables refer to buildings, machineries and vehicles which are
leased under a finance lease agreement to corporations.
+----------------------------------+------------+------------+-------------------------------------------+
| Amounts presented in EUR '000 |31/12/2009 |31/12/2008 | 31/12/2007 |
+----------------------------------+------------+------------+-------------------------------------------+
| Net investment in finance leases | | | |
+----------------------------------+------------+------------+-------------------------------------------+
| Gross Investment in leased | | | |
| equipment | | | |
+----------------------------------+------------+------------+-------------------------------------------+
| Less than 1 year | - | - | 15,947 |
+----------------------------------+------------+------------+-------------------------------------------+
| Between 1 to 5 years | - | - | 61,795 |
+----------------------------------+------------+------------+-------------------------------------------+
| More than 5 years | - | - | 20,968 |
+----------------------------------+------------+------------+-------------------------------------------+
| Less: unearned finance income | - | - | (28,852) |
+----------------------------------+------------+------------+-------------------------------------------+
| Net investments in leased | - | - | 69,858 |
| equipment | | | |
+----------------------------------+------------+------------+-------------------------------------------+
| | | | |
+----------------------------------+------------+------------+-------------------------------------------+
| | | | |
+----------------------------------+------------+------------+-------------------------------------------+
| The net finance leases | - | - | |
| receivables comprises: | | | |
+----------------------------------+------------+------------+-------------------------------------------+
| Less than 1 year | - | - | 11,286 |
+----------------------------------+------------+------------+-------------------------------------------+
| Between 1 to 5 years | - | - | 43,733 |
+----------------------------------+------------+------------+-------------------------------------------+
| More than 5 years | - | - | 14,839 |
+----------------------------------+------------+------------+-------------------------------------------+
| Total | - | - | 69,858 |
+----------------------------------+------------+------------+-------------------------------------------+
+-----------------------------------+------------+------------+------------+
| Movement in allowances for credit |31/12/2009 |31/12/2008 |31/12/2007 |
| losses | | | |
+-----------------------------------+------------+------------+------------+
| Amounts presented in EUR '000 | | | |
+-----------------------------------+------------+------------+------------+
| Balance at the beginning of the | - | - | 39,298 |
| year | | | |
+-----------------------------------+------------+------------+------------+
| Impairment | - | - | 6,892 |
+-----------------------------------+------------+------------+------------+
| Write-offs | - | - | (10,509) |
+-----------------------------------+------------+------------+------------+
| Balance at the end of the year | - | - | 35,681 |
+-----------------------------------+------------+------------+------------+
The movements in the provisions account are as follows:
22. INVESTMENT PORTFOLIO
The Group's investment portfolio comprises financial instruments available for
sale and held to maturity.
+------------------------------+------------+------------+-----------------------+
| Amounts presented in EUR |31/12/2009 | 31/12/2008 | 31/12/2007 |
| '000 | | | |
+------------------------------+------------+------------+-----------------------+
| Investments held to maturity | - | - | |
+------------------------------+------------+------------+-----------------------+
| Government bonds | - | - | 6,659 |
+------------------------------+------------+------------+-----------------------+
| Corporate bonds | - | - | 3,058 |
+------------------------------+------------+------------+-----------------------+
| Total investment held to | - | - | 9,717 |
| maturity | | | |
+------------------------------+------------+------------+-----------------------+
| Available for sale portfolio | | | |
| (at fair value) | | | |
+------------------------------+------------+------------+-----------------------+
| Corporate bonds | | - | 112,339 |
+------------------------------+------------+------------+-----------------------+
| Equity securities | 275,603 | 433,654 | 5,991 |
+------------------------------+------------+------------+-----------------------+
| Other investments | | - | 2,092 |
+------------------------------+------------+------------+-----------------------+
| Government bonds | | - | 129,805 |
+------------------------------+------------+------------+-----------------------+
| Less: Provision for losses | (81,717) | (185,146) | - |
| (impairment) | | | |
+------------------------------+------------+------------+-----------------------+
| Total available for sale | 193,886 | 248,508 | 250,227 |
| securities | | | |
+------------------------------+------------+------------+-----------------------+
| | | | |
+------------------------------+------------+------------+-----------------------+
| Total Investment portfolio | 193,886 | 248,508 | 259,944 |
+------------------------------+------------+------------+-----------------------+
The movement in the investment portfolio for the year ended 31 December 2009 may
be summarized as follows:
+----------------------------+------------------+
| Amounts presented in EUR |Financial assets |
| '000 | available for |
| | sale 2009 |
+----------------------------+------------------+
| Balance as at 1 January | 248,508 |
| 2009 | |
+----------------------------+------------------+
| Additions | 33,307 |
+----------------------------+------------------+
| Disposals | (18,912) |
+----------------------------+------------------+
| Gains / (losses) from | 12,701 |
| changes in fair value | |
| through equity | |
+----------------------------+------------------+
| Impairment losses | (81,717) |
+----------------------------+------------------+
| Balance as at 31 December | 193,886 |
| 2009 | |
+----------------------------+------------------+
Investment in Marfin Investment Group (MIG) constitutes the major investment in
IRF's portfolio as at 31 December 2009.
Investments in associates are accounted under the equity method.
23. TRADING PORTFOLIO AND OTHER FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT &
LOSS
+---------------------------------+------------+------------+---------------------+
| Amounts presented in EUR '000 | | |
+---------------------------------+------------+----------------------------------+
| Trading Portfolio | 31/12/2009 | 31/12/2008 | 31/12/2007 |
+---------------------------------+------------+------------+---------------------+
| Government bonds | - | - | 23,850 |
+---------------------------------+------------+------------+---------------------+
| Corporate entities bonds | 15,585 | 3,688 | 102,942 |
+---------------------------------+------------+------------+---------------------+
| Mutual funds | - | - | 8,903 |
+---------------------------------+------------+------------+---------------------+
| Equity securities | 2,914 | 2,276 | 38,686 |
+---------------------------------+------------+------------+---------------------+
| | 18,499 | 5,965 | 174,381 |
+---------------------------------+------------+------------+---------------------+
| | | | |
+---------------------------------+------------+------------+---------------------+
| Other financial instruments at | 31/12/2009 | 31/12/2008 | 31/12/2007 |
| fair value through Profit & | | | |
| Loss | | | |
+---------------------------------+------------+------------+---------------------+
| Corporate entities bonds | - | - | 5,421 |
+---------------------------------+------------+------------+---------------------+
| Total | 18,499 | 5,965 | 179,802 |
+---------------------------------+------------+------------+---------------------+
24. DERIVATIVE FINANCIAL INSTRUMENTS
There were no derivative financial instruments at 31 December 2008. The notional
and fair values of derivatives held at 31 December 2009 and 31 December 2007
were:
+----------------+------------+------------+-------------+
| | 31st December 2009 |
+----------------+---------------------------------------+
| | FAIR VALUE |
+----------------+---------------------------------------+
| Amounts | Notional | Assets | Liabilities |
| presented in | amount | | |
| EUR '000 | | | |
+----------------+------------+------------+-------------+
| Derivatives | | | |
| held for | | | |
| trading | | | |
+----------------+------------+------------+-------------+
| a) Trading in | | | |
| exchanges | | | |
+----------------+------------+------------+-------------+
| Options / | 424 | 80 | 21 |
| Warrants | | | |
+----------------+------------+------------+-------------+
| | 424 | 80 | 21 |
+----------------+------------+------------+-------------+
+----------------+-------------------------------------------------------------+-------------------------------------------+-----------------------------------------+
| | 31st December 2007 |
+----------------+---------------------------------------------------------------------------------------------------------------------------------------------------+
| | FAIR VALUE |
+----------------+---------------------------------------------------------------------------------------------------------------------------------------------------+
| Amounts | Notional | Assets | Liabilities |
| presented in | amount | | |
| EUR '000 | | | |
+----------------+-------------------------------------------------------------+-------------------------------------------+-----------------------------------------+
| Derivatives | | | |
| held for | | | |
| trading | | | |
+----------------+-------------------------------------------------------------+-------------------------------------------+-----------------------------------------+
| a) Trading in | | | |
| exchanges | | | |
+----------------+-------------------------------------------------------------+-------------------------------------------+-----------------------------------------+
| Options | 3,583 | | 136 |
| | | - | |
+----------------+-------------------------------------------------------------+-------------------------------------------+-----------------------------------------+
| Forwards / | 9,418 | | |
| Futures | | - | - |
+----------------+-------------------------------------------------------------+-------------------------------------------+-----------------------------------------+
| | 13,001 | | 136 |
| | | - | |
+----------------+-------------------------------------------------------------+-------------------------------------------+-----------------------------------------+
| | | | |
+----------------+-------------------------------------------------------------+-------------------------------------------+-----------------------------------------+
| b) OTC | | | |
+----------------+-------------------------------------------------------------+-------------------------------------------+-----------------------------------------+
| Interest rate | 489,672 | 4,302 | 4,240 |
| swaps | | | |
+----------------+-------------------------------------------------------------+-------------------------------------------+-----------------------------------------+
| Options | 1,770,193 | 6,861 | 6,836 |
+----------------+-------------------------------------------------------------+-------------------------------------------+-----------------------------------------+
| FX forwards | 324,064 | | 3,358 |
| | | - | |
+----------------+-------------------------------------------------------------+-------------------------------------------+-----------------------------------------+
| Credit default | 30,000 | 72 | |
| swaps | | | - |
+----------------+-------------------------------------------------------------+-------------------------------------------+-----------------------------------------+
| Total return | 10,000 | 294 | |
| swap | | | - |
+----------------+-------------------------------------------------------------+-------------------------------------------+-----------------------------------------+
| | 2,623,929 | 11,529 | 14,434 |
+----------------+-------------------------------------------------------------+-------------------------------------------+-----------------------------------------+
| | | | |
+----------------+-------------------------------------------------------------+-------------------------------------------+-----------------------------------------+
| Total | 2,636,930 | 11,529 | 14,570 |
| recognised | | | |
| derivative | | | |
| assets | | | |
| /liabilities | | | |
+----------------+-------------------------------------------------------------+-------------------------------------------+-----------------------------------------+
The notional amount of certain types of derivative financial instruments provide
a basis for comparison with instruments recognised on the balance sheet but do
not necessarily indicate the amounts of future cash flows involved or the
current fair value of the instruments and, therefore, do not indicate the
Group's exposure to credit or price risks.
The derivative instruments become favourable (assets) or unfavourable
(liabilities) as a result of fluctuations in market interest rates, market
prices or foreign exchange rates relative to their terms.
The aggregate contractual or notional amount of derivative financial instruments
on hand, to the extent to which instruments are favourable or unfavourable, and
thus the aggregate fair values of derivative financial assets and liabilities,
can fluctuate significantly from time to time.
The Group does not apply hedge accounting as described in IAS 39, therefore the
gains and losses arising on derivative financial instruments are recognised in
the income statement.
25. OTHER ASSETS
The Group's other assets and the company's other assets account are analysed as
follows:
+------------------------------------+---------------------+------------+--------------------+
| Amounts presented in EUR '000 | 31/12/2009 | 31/12/2008 | 31/12/2007 |
+------------------------------------+---------------------+------------+--------------------+
| Other Assets | | | |
+------------------------------------+---------------------+------------+--------------------+
| Advances to employees | - | - | 28 |
+------------------------------------+---------------------+------------+--------------------+
| Advances to third parties | - | - | 52 |
+------------------------------------+---------------------+------------+--------------------+
| Contributions to Co-Guarantee Fund | - | - | 12,640 |
| and Supplementary Fund | | | |
+------------------------------------+---------------------+------------+--------------------+
| Guarantee fees | - | - | 621 |
+------------------------------------+---------------------+------------+--------------------+
| Prepayments to third parties | 47 | 63 | 139 |
+------------------------------------+---------------------+------------+--------------------+
| Brokerage fees receivables | 666 | 381 | 15,539 |
+------------------------------------+---------------------+------------+--------------------+
| Credit card receivables | - | - | 1,751 |
+------------------------------------+---------------------+------------+--------------------+
| Prepaid taxes and other tax | - | - | 8,963 |
| advances | | | |
+------------------------------------+---------------------+------------+--------------------+
| Sundry debtors and other | 256 | 163 | 17,436 |
| receivables | | | |
+------------------------------------+---------------------+------------+--------------------+
| Bad debts (other than loans and | - | - | 4,206 |
| receivables) | | | |
+------------------------------------+---------------------+------------+--------------------+
| Receivables from related parties | - | - | 2 |
+------------------------------------+---------------------+------------+--------------------+
| Receivables from foreign stock | - | - | 4,608 |
| exchange | | | |
+------------------------------------+---------------------+------------+--------------------+
| Bond subscriptions | - | - | 30,411 |
+------------------------------------+---------------------+------------+--------------------+
| | 969 | 607 | 96,396 |
+------------------------------------+---------------------+------------+--------------------+
| Less:Provisions for losses | - | - | (4,921) |
| (impairment) of receivables | | | |
| besides loans | | | |
+------------------------------------+---------------------+------------+--------------------+
| Total | 969 | 607 | 91,474 |
+------------------------------------+---------------------+------------+--------------------+
26. NON CURRENT ASSETS HELD FOR SALE
+------------------------------------+------------+------------+------------+
| Amounts presented in EUR '000 | 31/12/2009 | 31/12/2008 | 31/12/2007 |
+------------------------------------+------------+------------+------------+
| Asset of "Proton Insurance' | - | - | 53,509 |
+------------------------------------+------------+------------+------------+
| Land | - | - | 148 |
+------------------------------------+------------+------------+------------+
| Buildings | - | - | 70 |
+------------------------------------+------------+------------+------------+
| Total | - | - | 53,727 |
+------------------------------------+------------+------------+------------+
The account includes land and building acquired by means of foreclosure and
auctions.
27. DEFERRED TAX - INCOME TAX EXPENSE
Deferred tax has been calculated based on the nominal tax rate applicable for
the financial years in which a temporary taxable and deductible difference
reversal is expected. Deferred income tax assets and liabilities are
attributable to the following items:
+----------+-------------------------------+----------+------+----------+----+---------+-----------+-------------------------+---------------------+----------+
| Amounts presented in EUR '000 | 31/12/2009 | 31/12/2008 | 31/12/2007 | |
+------------------------------------------+---------------------------------+---------------------+-----------------------------------------------+----------+
| | Deferred Tax | Deferred Tax | Deferred Tax | |
+------------------------------------------+---------------------------------+---------------------+-----------------------------------------------+----------+
| | Asset | Liability | | Liability | Asset | Liability | |
| | | | Asset | | | | |
+------------------------------------------+-----------------+---------------+---------+-----------+-------------------------+---------------------+----------+
| Retirement benefit obligations | | | | | 296 | - | |
+------------------------------------------+-----------------+---------------+---------+-----------+-------------------------+---------------------+----------+
| | Financial liabilities | - | - | - | - | 192 | - |
+----------+------------------------------------------+-----------------+----+---------+-----------+-------------------------+--------------------------------+
| | Property, plant & equipment | - | - | - | - | | 548 |
| | | | | | | - | |
+----------+------------------------------------------+-----------------+----+---------+-----------+-------------------------+--------------------------------+
| | Intangible assets | - | - | - | - | | 3,581 |
+----------+------------------------------------------+-----------------+----+---------+-----------+-------------------------+--------------------------------+
| | Investment in associates | - | 99 | - | - | - | |
| | | | | | | | - |
+----------+------------------------------------------+-----------------+----+---------+-----------+-------------------------+--------------------------------+
| | Staff bonuses and allowances | - | - | - | - | - | - |
+----------+------------------------------------------+-----------------+----+---------+-----------+-------------------------+--------------------------------+
| | Tax Deductible losses | - | - | - | - | | - |
| | | | | | | - | |
+----------+------------------------------------------+-----------------+----+---------+-----------+-------------------------+--------------------------------+
| Commission from loan advances | - | - | - | - | 168 | - | |
+------------------------------------------+-----------------+---------------+---------+-----------+-------------------------+---------------------+----------+
| Finance Leases | - | - | - | - | 567 | - | |
+------------------------------------------+-----------------+---------------+---------+-----------+-------------------------+---------------------+----------+
| | Provision for bad debts | - | - | - | | 1,063 | - |
+----------+------------------------------------------+-----------------+----+---------+-----------+-------------------------+--------------------------------+
| Financial assets at fair value through | - | - | - | - | 1,430 | - | |
| profit or loss | | | | | | | |
+------------------------------------------+-----------------+---------------+---------+-----------+-------------------------+---------------------+----------+
| Available for sale financial assets | - | - | - | - | 3,359 | 2,800 | |
+------------------------------------------+-----------------+---------------+---------+-----------+-------------------------+---------------------+----------+
| | Other financial assets | - | - | - | - | 9 | |
+----------+------------------------------------------+-----------------+----+---------+-----------+-------------------------+--------------------------------+
| Other assets | - | - | - | - | 16 | | |
+------------------------------------------+-----------------+---------------+---------+-----------+-------------------------+---------------------+----------+
| Total | - | 99 | - | - | 7,099 | 6,928 | |
+------------------------------------------+-----------------+---------------+---------+-----------+-------------------------+---------------------+----------+
| Amount set-off | - | - | - | - | (548) | | |
| | | | | | | - | |
+------------------------------------------+-----------------+---------------+---------+-----------+-------------------------+---------------------+----------+
| Balance at 31 December | - | 99 | - | - | 6,551 | 6,928 | |
+------------------------------------------+-----------------+---------------+---------+-----------+-------------------------+---------------------+----------+
| | | | | | | | | | | |
+----------+-------------------------------+----------+------+----------+----+---------+-----------+-------------------------+---------------------+----------+
The Group operates in a number of different jurisdictions. Profits recorded in
the jurisdictions of Bermuda and Marshall Islands are tax free. Income generated
by entities established under United States Law is subject to income tax
according to United States Tax Law. The companies operating in the United States
remain subject to examination for three previous periods by local tax
authorities.
+----------------------+---------------------+
| | 31/12/2009 |
+----------------------+---------------------+
| | Amount |
+----------------------+---------------------+
| Loss before tax | (50,994) |
+----------------------+---------------------+
| Less: loss generated | (51,209) |
| in other | |
| jurisdictions (tax | |
| free) | |
+----------------------+---------------------+
| Taxable in US at | 216 |
| 44,6% | |
+----------------------+---------------------+
| | |
+----------------------+---------------------+
| Income tax expense | 96 |
+----------------------+---------------------+
The tax charge for the year is analyzed below:
+---------+--------+--------+
| | 31/12/2009 |
+---------+-----------------+
| | Amount | Rate |
+---------+--------+--------+
| Federal | 61 | 28,40% |
+---------+--------+--------+
| State | 16 | 7,30% |
+---------+--------+--------+
| Local | 19 | 8,90% |
+---------+--------+--------+
| Total | 96 | 44,60% |
+---------+--------+--------+
28. CASH AND BALANCES WITH CENTRAL BANK
+--------------------------------+-------+------------+------------+------------+
| Amounts presented in EUR '000 | |31/12/2009 |31/12/2008 |31/12/2007 |
+--------------------------------+-------+------------+------------+------------+
| Cash on hand and cash in | | - | - | 34,384 |
| course of collection | | | | |
+--------------------------------+-------+------------+------------+------------+
| Cheques receivable | | - | - | 12,344 |
+--------------------------------+-------+------------+------------+------------+
| Included in cash and cash | | - | - | 46,728 |
| equivalents | | | | |
+--------------------------------+-------+------------+------------+------------+
| Mandatory reserve deposits | | - | - | 6,068 |
| with Central Bank | | | | |
+--------------------------------+-------+------------+------------+------------+
| Total | | - | - | 52,796 |
+--------------------------------+-------+------------+------------+------------+
29. LOANS AND ADVANCES TO FINANCIAL INSTITUTIONS
+---------------------------------+-------+------------+------------+---------------------+
| Amounts presented in EUR '000 | |31/12/2009 |31/12/2008 | 31/12/2007 |
+---------------------------------+-------+------------+------------+---------------------+
| Deposits placed in other | | - | - | 33,787 |
| financial institutions | | | | |
+---------------------------------+-------+------------+------------+---------------------+
| Time deposits | | - | - | 155,133 |
+---------------------------------+-------+------------+------------+---------------------+
| Cheques receivables | | - | - | 1,053 |
+---------------------------------+-------+------------+------------+---------------------+
| Total | | - | - | 189,972 |
+---------------------------------+-------+------------+------------+---------------------+
| Placements with other banks | | - | - | 15,082 |
| (over 90 days) | | | | |
+---------------------------------+-------+------------+------------+---------------------+
| Total | | - | - | 205,055 |
+---------------------------------+-------+------------+------------+---------------------+
30. CASH AND OTHER EQUIVALENTS
+------------------------------+----------+------------+------------+------------+
| Amounts presented in EUR | |31/12/2009 |31/12/2008 |31/12/2007 |
| '000 | | | | |
+------------------------------+----------+------------+------------+------------+
| Petty cash | | 1 | 1 | 1 |
+------------------------------+----------+------------+------------+------------+
| Deposits placed in other | | 4,485 | 3,569 | 322,354 |
| financial institutions | | | | |
+------------------------------+----------+------------+------------+------------+
| Time deposits | | 122,356 | 145,039 | - |
+------------------------------+----------+------------+------------+------------+
| Total | | 126,842 | 148,610 | 322,355 |
+------------------------------+----------+------------+------------+------------+
31. ISSUED DEBT SECURITIES
+------------------------------------------+------------+------------+------------+
| | | | |
| |31/12/2009 |31/12/2008 |31/12/2007 |
+------------------------------------------+------------+------------+------------+
| Eurobond with maturity 2017 | - | - | 25,283 |
+------------------------------------------+------------+------------+------------+
| Total | - | - | 25,283 |
+------------------------------------------+------------+------------+------------+
32. RETIREMENT BENEFIT OBLIGATION
The retirement benefit obligations refer to Proton Group's personnel and it is
described as follows:
+-----------------------------------+------------+------------+---------------------+
| Amounts presented in EUR '000 |31/12/2009 |31/12/2008 | 31/12/2007 |
+-----------------------------------+------------+------------+---------------------+
| Amount recognized in Statement of | | | |
| Financial Position | | | |
+-----------------------------------+------------+------------+---------------------+
| Present value of unfunded benefit | - | - | 1,317 |
| obligations | | | |
+-----------------------------------+------------+------------+---------------------+
| Unrecognised actuarial profits / | - | - | (178) |
| ( losses) | | | |
+-----------------------------------+------------+------------+---------------------+
| Total Liabilities at the end of | - | - | 1,140 |
| period | | | |
+-----------------------------------+------------+------------+---------------------+
+----------------------------------+-----------+-----------+------------+
| Amounts recognized in profit and | | | |
| loss | | | |
+----------------------------------+-----------+-----------+------------+
| Current service cost | | | 277 |
+----------------------------------+-----------+-----------+------------+
| Interest cost | - | - | 44 |
+----------------------------------+-----------+-----------+------------+
| Net actuarial losses recognized | - | - | 1 |
+----------------------------------+-----------+-----------+------------+
| Settlements | - | - | 302 |
+----------------------------------+-----------+-----------+------------+
| Total | - | - | 624 |
+----------------------------------+-----------+-----------+------------+
The change in liabilities is described below:
+----------------------------+------------+------------+---------------------+
| Amounts presented in EUR | | |
| '000 | | |
+----------------------------+------------+----------------------------------+
| Change in liabilities: | 31/12/2009 | 31/12/2008 | 31/12/2007 |
+----------------------------+------------+------------+---------------------+
| Opening balance | - | - | 1,228 |
+----------------------------+------------+------------+---------------------+
| Less: transfer in | - | - | (275) |
| discontinued operations | | | |
+----------------------------+------------+------------+---------------------+
| | - | - | 953 |
+----------------------------+------------+------------+---------------------+
| Increase due to | | | |
| acquisition of Proton Bank | | | |
+----------------------------+------------+------------+---------------------+
| Increase due to business | | | |
| combination with Omega | | | |
+----------------------------+------------+------------+---------------------+
| Expense for the period | - | - | 625 |
+----------------------------+------------+------------+---------------------+
| Compensation paid | - | - | (438) |
+----------------------------+------------+------------+---------------------+
| Total liability recognized | - | - | 1,140 |
| in Balance Sheet | | | |
+----------------------------+------------+------------+---------------------+
The main actuarial assumptions used are provided below:
+------------------------+------------+------------+------------+
| | 31/12/2009 | 31/12/2008 | 31/12/2007 |
+------------------------+------------+------------+------------+
| Discount Rate | - | - | 4.90% |
+------------------------+------------+------------+------------+
| Future salary | - | - | 4.70% |
| increases | | | |
+------------------------+------------+------------+------------+
| Personnel turnover | - | - | 0.50% |
| rate | | | |
+------------------------+------------+------------+------------+
| | EVK | EVK | EVK |
+------------------------+------------+------------+------------+
| Mortality rates | - | - | 2,000 |
+------------------------+------------+------------+------------+
33. LONG TERM LOANS
+----------------------------------+------------+------------+------------+
| Amounts presented in EUR '000 | 31/12/2009 | 31/12/2008 | 31/12/2007 |
+----------------------------------+------------+------------+------------+
| Long-term loans due to banks | 198,104 | 198,393 | - |
+----------------------------------+------------+------------+------------+
| Total | 198,104 | 198,393 | - |
+----------------------------------+------------+------------+------------+
The loan bears interest of 3 month Euribor plus 2.75% spread and 0.6% Greek Law
contribution. From the implementation of IAS 39, the effective rate has been
calculated to 4.06% as at 31 December 2009 and 6.37% as at 31 December 2008.
All investment portfolio and cash accounts of IRF are assigned as collateral to
the loan which is repayable in full by September 2011.
34. DUE TO FINANCIAL INSTITUTIONS
+------------------------------------+------------+------------+------------+
| Amounts presented in EUR '000 | 31/12/2009 | 31/12/2008 | 31/12/2007 |
+------------------------------------+------------+------------+------------+
| Interbank deposits | - | - | 392,371 |
+------------------------------------+------------+------------+------------+
| Sight deposits | - | - | 201 |
+------------------------------------+------------+------------+------------+
| Time deposits | - | - | 28,864 |
+------------------------------------+------------+------------+------------+
| Sale and repurchase agreement | - | - | 12,505 |
| (REPOS) | | | |
+------------------------------------+------------+------------+------------+
| Total | - | - | 433,941 |
+------------------------------------+------------+------------+------------+
35. DUE TO CUSTOMERS
+-----------------------------------+------------+------------+-------------------------------+
| Amounts presented in EUR '000 |31/12/2009 | 31/12/2008 | 31/12/2007 |
+-----------------------------------+------------+------------+-------------------------------+
| Due to Customers | | | |
+-----------------------------------+------------+------------+-------------------------------+
| Retail Customers | | | |
+-----------------------------------+------------+------------+-------------------------------+
| Savings account | - | - | 57,700 |
+-----------------------------------+------------+------------+-------------------------------+
| Sight deposits | - | - | 18,175 |
+-----------------------------------+------------+------------+-------------------------------+
| Time deposits | - | - | 794,343 |
+-----------------------------------+------------+------------+-------------------------------+
| Deposits under notice | - | - | 1,738 |
+-----------------------------------+------------+------------+-------------------------------+
| Total | - | - | 871,956 |
+-----------------------------------+------------+------------+-------------------------------+
| | | | |
+-----------------------------------+------------+------------+-------------------------------+
| Corporate Customers | | | |
+-----------------------------------+------------+------------+-------------------------------+
| Sight deposits | - | - | 67,898 |
+-----------------------------------+------------+------------+-------------------------------+
| | | | |
+-----------------------------------+------------+------------+-------------------------------+
| Time deposits: | | | |
+-----------------------------------+------------+------------+-------------------------------+
| Companies | - | - | 319,249 |
+-----------------------------------+------------+------------+-------------------------------+
| Public organizations | - | - | |
| | | | - |
+-----------------------------------+------------+------------+-------------------------------+
| Public companies | - | - | 5,838 |
+-----------------------------------+------------+------------+-------------------------------+
| Other time deposits | - | - | 55,694 |
+-----------------------------------+------------+------------+-------------------------------+
| Sale and repurchase agreement | - | - | 986 |
| (REPOS) | | | |
+-----------------------------------+------------+------------+-------------------------------+
| Total | - | - | 449,665 |
+-----------------------------------+------------+------------+-------------------------------+
| Blocked deposits | - | - | 184 |
+-----------------------------------+------------+------------+-------------------------------+
| Pledged deposits | - | - | 59,534 |
+-----------------------------------+------------+------------+-------------------------------+
| Margin accounts | - | - | 40,800 |
+-----------------------------------+------------+------------+-------------------------------+
| Total | - | - | 1,422,139 |
+-----------------------------------+------------+------------+-------------------------------+
36. FINANCIAL LIABILITIES AT FAIR VALUE THROUGH PROFIT & LOSS
+--------------------------------------+------------+------------+------------+
| Amounts presented in EUR '000 | 31/12/2009 |31/12/2008 |31/12/2007 |
+--------------------------------------+------------+------------+------------+
| Corporate entities bonds (short | 1,687 | - | - |
| pos.) | | | |
+--------------------------------------+------------+------------+------------+
| Total | 1,687 | - | - |
+--------------------------------------+------------+------------+------------+
All corporate bonds are listed in the US market.
37. CURRENT INCOME TAX LIABILITIES
+--------------------------------------+------------+------------+------------+
| Amounts presented in EUR '000 |31/12/2009 |31/12/2008 |31/12/2007 |
+--------------------------------------+------------+------------+------------+
| Income Tax on Taxable Profits | - | - | 9,671 |
+--------------------------------------+------------+------------+------------+
| Provision of tax liabilities | - | - | 828 |
+--------------------------------------+------------+------------+------------+
| Total | - | - | 10,498 |
+--------------------------------------+------------+------------+------------+
38. OTHER LIABILITIES
+-------------------------------------+------------+------------+------------+
| Amounts presented in EUR '000 | 31/12/2009 | 31/12/2008 | 31/12/2007 |
+-------------------------------------+------------+------------+------------+
| Withholding taxes arising from | - | - | 542 |
| salaries | | | |
+-------------------------------------+------------+------------+------------+
| Taxes and duties payable from | - | - | 439 |
| customers' deposits | | | |
+-------------------------------------+------------+------------+------------+
| Other withholding taxes and duties | - | - | 188 |
+-------------------------------------+------------+------------+------------+
| Prior year income taxes (from tax | - | - | 541 |
| audit) | | | |
+-------------------------------------+------------+------------+------------+
| Social security contributions | - | - | 878 |
+-------------------------------------+------------+------------+------------+
| Dividends payable | - | - | 95 |
+-------------------------------------+------------+------------+------------+
| Contribution to subsidiaries | 7 | - | - |
+-------------------------------------+------------+------------+------------+
| Salaries payable | 17 | 17 | 239 |
+-------------------------------------+------------+------------+------------+
| Brokerage services securities and | 985 | - | 266 |
| derivatives | | | |
+-------------------------------------+------------+------------+------------+
| Suppliers and other third party | 107 | 1,739 | 10,983 |
| liabilities | | | |
+-------------------------------------+------------+------------+------------+
| Total | 1,115 | 1,755 | 14,170 |
+-------------------------------------+------------+------------+------------+
39. SHARE CAPITAL & SHARE PREMIUM
+-------------------------+-----------------+---------+-----------+------------+----------------+-----------------+
| Amounts in EUR' 000 | Number |Nominal | Share | Share | Share | Total |
| | of |value $ | capital | capital | premium | |
| | shares | | in $ | | | |
+-------------------------+-----------------+---------+-----------+------------+----------------+-----------------+
| Closing balance at 31 | 124,832,394 | - | 187 | 147 | 400,443 | 400,590 |
| December 2007 | | | | | | |
+-------------------------+-----------------+---------+-----------+------------+----------------+-----------------+
| Closing balance at 31 | 124,832,394 | - | 187 | 147 | 400,443 | 400,590 |
| December 2008 | | | | | | |
+-------------------------+-----------------+---------+-----------+------------+----------------+-----------------+
| Share premium returned | | | | | (17,951) | (17,951) |
| to shareholders | | | | | | |
+-------------------------+-----------------+---------+-----------+------------+----------------+-----------------+
| Closing balance at 31 | 124,832,394 | - | 187 | 147 | 382,491 | 382,639 |
| December 2009 | | | | | | |
+-------------------------+-----------------+---------+-----------+------------+----------------+-----------------+
At a Special General Meeting of the Company held on 21 May 2009, the
shareholders resolved to reduce the Company's share premium account from
US$520,344,639.17 to US$495,378,160.37, enabling an amount of US$0.20 per common
share to be paid to holders of the Company's common shares. The amount was paid
to shareholders on 9 June 2009. The reduction of share premium does not reduce
the authorised or issued share capital of the Company or the nominal value of
the shares of the Company.
Authorised share capital
+------------------------+-----------+--------+------+-------------+---------+-----+
| | Preference Shares | Common Shares of |
| | of $0.0001 each | $0.0015 each |
+------------------------+---------------------------+-----------------------------+
| | Number |Amount | | Number | Amount | |
| | | in $ | | | in $ | |
+------------------------+-----------+--------+------+-------------+---------+-----+
| Authorized at 31 | 2,500,000 | 250 | | 200,000,000 | 300,000 | |
| December 2009 | | | | | | |
+------------------------+-----------+--------+------+-------------+---------+-----+
Warrants
On 14 November 2009 the 13,596,541 listed Warrants of the Company expired, with
no notice from the warrant holders prior to the expiry for relevant exercise.
The Board approved on 20 November 2009 the delisting of the Warrants from the
SFM and the clearance of the Warrant holders register.
40. OTHER RESERVES
+-----------------------------------+----------+------------+------------+----------+-----------------------+
| Amounts presented in EUR '000 | |31/12/2009 |31/12/2008 | | 31/12/2007 |
+-----------------------------------+----------+------------+------------+----------+-----------------------+
| Statutory reserves | | - | - | | 275 |
+-----------------------------------+----------+------------+------------+----------+-----------------------+
| Reserve of subsidiary's stock | | - | - | | 200 |
| option program | | | | | |
+-----------------------------------+----------+------------+------------+----------+-----------------------+
| Translation of exchange | | 3 | - | | - |
| differences | | | | | |
+-----------------------------------+----------+------------+------------+----------+-----------------------+
| Other reserves | | - | - | | 16,112 |
+-----------------------------------+----------+------------+------------+----------+-----------------------+
| Total | | 3 | - | | 16,587 |
+-----------------------------------+----------+------------+------------+----------+-----------------------+
41. EARNINGS PER SHARE
Basic earnings per share are calculated by dividing the net profit attributable
to shareholders by the weighted average number of shares in issue during the
year. Diluted earnings per share are not calculated due to the expiration of the
company's warrants.
Basic earnings per share are analysed below:
+------------------------------------------------+-----------------+------------------+
| Amounts presented in EUR | |
+------------------------------------------------+------------------------------------+
| Basic Earnings per share | 1/1 - | 1/1 - |
| | 31/12/09 | 31/12/08 |
+------------------------------------------------+-----------------+------------------+
| | | |
+------------------------------------------------+-----------------+------------------+
| Net profit from continuing and discontinued | (51,089,923.69) | (264,128,730.70) |
| operations attributable to the Parent | | |
| Company's Shareholders | | |
+------------------------------------------------+-----------------+------------------+
| Weighted average number of shares in issue | 124,832,395 | 124,832,395 |
+------------------------------------------------+-----------------+------------------+
| Basic earnings per Share ( EUR/Share ) | (0.41) | (2.12) |
+------------------------------------------------+-----------------+------------------+
| Net profit from continuing operations | (51,089,923.69) | (218,795,029.60) |
| attributable to the Parent Company's | | |
| Shareholders | | |
+------------------------------------------------+-----------------+------------------+
| Weighted average number of shares in issue | 124,832,395 | 124,832,395 |
+------------------------------------------------+-----------------+------------------+
| Basic earnings per Share ( EUR/Share ) | (0.41) | (1.75) |
+------------------------------------------------+-----------------+------------------+
42. CASH AND CASH EQUIVALENTS - CASH FLOW STATEMENT
The table below presents the analysis of "cash and cash equivalent" of the Cash
Flow Statement. For the purposes of preparing the Cash Flow Statement of the
Group for 31 Decemeber 2007 (which includes the consolidated cash flows of
Proton Bank), the short-term placements in other financial institutions, which
were either immediately available or available within 90 days, were included in
the cash account.
+--------------------------------------+------------+------------+-----------------+
| Amounts presented in EUR '000 |31/12/2009 | 31/12/2008 | 31/12/2007 |
+--------------------------------------+------------+------------+-----------------+
| Cash and balances with Central Bank | - | - | 46,728 |
+--------------------------------------+------------+------------+-----------------+
| Petty cash | 1 | 1 | 1 |
+--------------------------------------+------------+------------+-----------------+
| Deposits placed in other financial | 4,485 | 3,569 | 322,354 |
| institutions | | | |
+--------------------------------------+------------+------------+-----------------+
| Time deposits | 122,356 | 145,039 | - |
+--------------------------------------+------------+------------+-----------------+
| Loans and advances to financial | - | - | 189,974 |
| institutions | | | |
+--------------------------------------+------------+------------+-----------------+
| Asset held for sale | - | - | 316 |
+--------------------------------------+------------+------------+-----------------+
| Total - Included in cash and cash | 126,842 | 148,610 | 559,372 |
| equivalents | | | |
+--------------------------------------+------------+------------+-----------------+
43. ASSETS HELD FOR SALE AND LIABILITIES ASSOCIATED WITH ASSETS CLASSIFIED AS
HELD FOR SALE.
On 28 December 2007 the Proton Group committed to sell its insurance activities.
In particular, Proton Bank entered into a contractual agreement with the
Commercial Value Societe Anonyme Insurance ("Proton Insurance") to transfer
91.29% of the outstanding common shares of the Proton Societe Anonyme Provision
Insurance. Assets and liabilities of Proton Insurance have been classified as
"Non current assets held for sale" and "Liabilities associated with assets
classified as held for sale" respectively, for the year ended 31 December 2007.
Assets of Proton Insurance, after eliminating all balances with the other group
companies, are as follows:
Amounts presented in EUR '000
+----------+----------------------------------+----------+-----------+----------+
| ASSET | 31.12.2007 | |
+---------------------------------------------+----------------------+----------+
| Cash | 10 | |
+---------------------------------------------+----------------------+----------+
| Loans and advances to banks | 306 | |
+---------------------------------------------+----------------------+----------+
| | Financial assets at fair value through | 12,980 |
| | profit or loss | |
+----------+---------------------------------------------+----------------------+
| | Investments in associates | 625 |
+----------+---------------------------------------------+----------------------+
| | Intangible assets | 12,473 |
+----------+---------------------------------------------+----------------------+
| | Property, plant and equipment | 2,256 |
+----------+---------------------------------------------+----------------------+
| | Investment property | 50 |
+----------+---------------------------------------------+----------------------+
| | Insurance receivables | 19,610 |
+----------+---------------------------------------------+----------------------+
| | Reinsurance contracts | 1,632 |
+----------+---------------------------------------------+----------------------+
| | Deferred tax assets | 69 |
+----------+---------------------------------------------+----------------------+
| Other assets | 3,497 | |
+---------------------------------------------+----------------------+----------+
| Total assets | 53,509 | |
+---------------------------------------------+----------------------+----------+
| | | | | |
+----------+----------------------------------+----------+-----------+----------+
+----------+----------------------------------+----------+----------+----------+
| LIABILITIES | 31.12.2007 | |
+---------------------------------------------+---------------------+----------+
| Debt securities in issue (note 31) | 1,539 | |
+---------------------------------------------+---------------------+----------+
| Retirement benefit obligations | 275 | |
+---------------------------------------------+---------------------+----------+
| | Provisions for insurance contracts | 36,093 |
+----------+---------------------------------------------+---------------------+
| | Deferred tax liabilities | 93 |
+----------+---------------------------------------------+---------------------+
| Other liabilities | 6,339 | |
+---------------------------------------------+---------------------+----------+
| Total liabilities | 44,339 | |
+---------------------------------------------+---------------------+----------+
| | | | | |
+----------+----------------------------------+----------+----------+----------+
Intangible assets include goodwill of EUR 12,393 thousand which was originally
allocated to Proton Insurance. The total net assets (including goodwill) were
measured at their carrying amount which does not exceed the fair value of Proton
Insurance less cost to sale. Fair value of Proton Insurance was determined on
the basis of the binding agreement between the Group and "Commercial Value
Societe Anonyme Insurance".
44. RELATED PARTIES TRANSACTIONS
44.1 Transactions between companies included in Consolidation
+-------------------------+----------+---------+----------+---------+----------+------------+
| Transactions of the | | | |
| parent company with | | | |
| Subsidiaries | | | |
+-------------------------+--------------------+--------------------+-----------------------+
| Amounts presented in EUR '000 | 31/12/2008 | 31/12/2008 |31/12/2007 |
+------------------------------------+--------------------+--------------------+------------+
| Asset accounts | | | |
+------------------------------------+--------------------+--------------------+------------+
| Time deposit | - | - | 28,864 |
+------------------------------------+--------------------+--------------------+------------+
| Total | - | - | 28,864 |
+------------------------------------+--------------------+--------------------+------------+
| | | | |
+------------------------------------+--------------------+--------------------+------------+
| Income | | | |
+------------------------------------+--------------------+--------------------+------------+
| Dividend income | 71,025 | 2,582 | - |
+------------------------------------+--------------------+--------------------+------------+
| Interest income | | 656 | - |
+------------------------------------+--------------------+--------------------+------------+
| Total | 71,025 | 3,238 | - |
+------------------------------------+--------------------+--------------------+------------+
| | | | |
+------------------------------------+--------------------+--------------------+------------+
| Liability accounts | | | |
+------------------------------------+--------------------+--------------------+------------+
| Other liabilities | - | 70,881 | 70,199 |
+------------------------------------+--------------------+--------------------+------------+
| Total | - | 70,881 | 70,199 |
+------------------------------------+--------------------+--------------------+------------+
| | | | | | | |
+-------------------------+----------+---------+----------+---------+----------+------------+
The aforementioned balances of the Company have been eliminated from the
consolidated financial statements.
44.2 Transactions with Associates
+------------------------+------------+------------+------------+
| Amounts presented in |31/12/2009 |31/12/2008 |31/12/2007 |
| EUR '000 | | | |
+------------------------+------------+------------+------------+
| Asset accounts | | | |
+------------------------+------------+------------+------------+
| Other amounts due | - | - | 28 |
+------------------------+------------+------------+------------+
| Total | - | - | 28 |
+------------------------+------------+------------+------------+
| | | | |
+------------------------+------------+------------+------------+
| Liability accounts | | | |
+------------------------+------------+------------+------------+
| Deposits | - | - | 5,188 |
+------------------------+------------+------------+------------+
| Other liabilities | 985 | - | 18 |
+------------------------+------------+------------+------------+
| Capital contribution | 7 | - | - |
+------------------------+------------+------------+------------+
| Total | 992 | - | 5,206 |
+------------------------+------------+------------+------------+
| | | | |
+------------------------+------------+------------+------------+
| Income /Expenses | | | |
+------------------------+------------+------------+------------+
| Interest and similar | - | (143) | 193 |
| expenses | | | |
+------------------------+------------+------------+------------+
| Other expenses (fees) | (1,092) | - | - |
+------------------------+------------+------------+------------+
| Other income | - | 88 | 205 |
+------------------------+------------+------------+------------+
| Total | (1,092) | (55) | 398 |
+------------------------+------------+------------+------------+
44.3 Transactions with Management and Members of the Board of Directors
No salaries or loans were paid to the Directors of the Company for the period,
apart from salaries paid to CEO of the Company.
+---------+------------+------------+------------+------------+
| | Transactions with Management and Members |
| | of the Board of Directors |
+---------+---------------------------------------------------+
| Amounts presented | 31/12/2009 | 31/12/2008 | 31/12/2007 |
| in EUR '000 | | | |
+----------------------+------------+------------+------------+
| Asset accounts | | | |
+----------------------+------------+------------+------------+
| Loans | - | - | 22,467 |
+----------------------+------------+------------+------------+
| Other assets | - | - | 195 |
+----------------------+------------+------------+------------+
| Total | - | - | 22,662 |
+----------------------+------------+------------+------------+
| | | | |
+----------------------+------------+------------+------------+
| Liability accounts | | | |
+----------------------+------------+------------+------------+
| Deposits | - | - | 67,775 |
+----------------------+------------+------------+------------+
| Debt securities in | - | - | 1,539 |
| issue | | | |
+----------------------+------------+------------+------------+
| Other Liabilities | 17 | 1,009 | 177 |
+----------------------+------------+------------+------------+
| Total | 17 | 1,009 | 69,491 |
+----------------------+------------+------------+------------+
| Letters of Guarantee | - | - | 18,195 |
+----------------------+------------+------------+------------+
| | | | |
+----------------------+------------+------------+------------+
| Income | | | |
+----------------------+------------+------------+------------+
| Interest and similar | - | 1,178 | 1,419 |
| income | | | |
+----------------------+------------+------------+------------+
| Other income | - | 1,186 | 394 |
+----------------------+------------+------------+------------+
| Total | - | 2,364 | 1,813 |
+----------------------+------------+------------+------------+
| Expenses | | | |
+----------------------+------------+------------+------------+
| Remuneration | 100 | 3,719 | 5,224 |
+----------------------+------------+------------+------------+
| Interest and similar | - | 2,094 | 3,120 |
| expenses | | | |
+----------------------+------------+------------+------------+
| Other fees & | - | 1,136 | 4,378 |
| expenses | | | |
+----------------------+------------+------------+------------+
| Total | 100 | 6,949 | 12,722 |
+----------------------+------------+------------+------------+
| | | | | |
+---------+------------+------------+------------+------------+
45. STOCK OPTION PLAN
The Company has approved a stock option plan for its directors and employees in
respect of up to 10 per cent of Shares in issue from time to time. Pursuant to
the plan, holders receive options which vest over a period to be determined by
the Board at the date of the granting of each such option. No share option has
been granted to the directors or the employees of the company as of 31 December
2009.
46. COMMITMENTS, CONTINGENT ASSETS AND LIABILITIES
46.1 Contingent legal liabilities
As at 31 December 2009 there was no litigation pending against the Group in
connection with its activities.
46.2 Assets given as collateral
All investment portfolio and cash accounts of IRF, is assigned as collateral to
IRF's long term loan.
47. FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES
The fair value represents the amount for which an asset could be exchanged, or a
liability settled, between knowledgeable, willing parties in an arm's length
transaction. Differences might arise between the carrying amount and the fair
value of financial assets and liabilities. The securities of IRF GROUP are
presented in the financial statements at their fair value.
48. CLASSIFICATION OF FINANCIAL ASSETS AND LIABILITIES
Assets
+------------------------+----------+-----------+----------+-----------+-----------+
| Balance at 31 December | | | | | |
| 2009 | | | | | |
+------------------------+----------+-----------+----------+-----------+-----------+
| Assets | Fair |Available | Held | Loans | Total |
| | value | for sale | to | & | |
| | through | |maturity | advances | |
| | profit | | | | |
| | or loss | | | | |
+------------------------+----------+-----------+----------+-----------+-----------+
| Trading portfolio and | 18,499 | | - | - | 18,499 |
| other financial assets | | | | | |
| at fair value through | | | | | |
| Profit & Loss | | | | | |
+------------------------+----------+-----------+----------+-----------+-----------+
| Investment portfolio | - | 193,886 | - | - | 193,886 |
+------------------------+----------+-----------+----------+-----------+-----------+
| Derivative financial | 80 | - | - | - | 80 |
| instruments | | | | | |
+------------------------+----------+-----------+----------+-----------+-----------+
| Total | 18,579 | 193,886 | 0 | 0 | 212,465 |
+------------------------+----------+-----------+----------+-----------+-----------+
| | | | | | |
| | | | | | |
+------------------------+----------+-----------+----------+-----------+-----------+
| Balance at 31 December | | | | | |
| 2008 | | | | | |
+------------------------+----------+-----------+----------+-----------+-----------+
| Assets | Fair |Available | Held | Loans | Total |
| | value | for sale | to | & | |
| | through | |maturity | advances | |
| | profit | | | | |
| | or loss | | | | |
+------------------------+----------+-----------+----------+-----------+-----------+
| Trading portfolio and | 5,965 | - | - | - | 5,965 |
| other financial assets | | | | | |
| at fair value through | | | | | |
| Profit & Loss | | | | | |
+------------------------+----------+-----------+----------+-----------+-----------+
| Investment portfolio | - | 248,508 | - | - | 248,508 |
+------------------------+----------+-----------+----------+-----------+-----------+
| Total | 5,965 | 248,508 | - | - | 254,473 |
+------------------------+----------+-----------+----------+-----------+-----------+
| | | | | | |
+------------------------+----------+-----------+----------+-----------+-----------+
| Balance at 31 December | | | | | |
| 2007 | | | | | |
+------------------------+----------+-----------+----------+-----------+-----------+
| Assets | Fair |Available | Held | Loans | Total |
| | value | for sale | to | & | |
| | through | |maturity | advances | |
| | profit | | | | |
| | or loss | | | | |
+------------------------+----------+-----------+----------+-----------+-----------+
| Loans & advances to | - | - | - | 527,410 | 527,410 |
| financial institutions | | | | | |
+------------------------+----------+-----------+----------+-----------+-----------+
| Trading portfolio and | 179,802 | - | - | - | 179,802 |
| other financial assets | | | | | |
| at fair value through | | | | | |
| Profit & Loss | | | | | |
+------------------------+----------+-----------+----------+-----------+-----------+
| Derivative financial | 11,529 | - | - | | 11,529 |
| instruments | | | | | |
+------------------------+----------+-----------+----------+-----------+-----------+
| Loans and advances to | - | - | - | 1,368,025 | 1,368,025 |
| customers | | | | | |
+------------------------+----------+-----------+----------+-----------+-----------+
| Investment portfolio | - | 250,227 | 9,717 | | 259,944 |
+------------------------+----------+-----------+----------+-----------+-----------+
| Other assets | - | - | - | 91,474 | 91,474 |
+------------------------+----------+-----------+----------+-----------+-----------+
| Total | 191,331 | 250,227 | 9,717 | 1,986,909 | 2,438,184 |
+------------------------+----------+-----------+----------+-----------+-----------+
Liabilities
+-----------------+-----------+-------------+-----------+
| Balance at 31 December | | |
| 2009 | | |
+-----------------------------+-------------+-----------+
| LIABILITIES | At | At fair | Total |
| |amortized | value | |
| | cost | through | |
| | | profit or | |
| | | loss | |
+-----------------+-----------+-------------+-----------+
| Long term loans | 198,104 | | 198,104 |
+-----------------+-----------+-------------+-----------+
| Financial | - | 1,687 | 1,687 |
| liabilities at | | | |
| fair value | | | |
| through profit | | | |
| & loss | | | |
+-----------------+-----------+-------------+-----------+
| Derivative | - | 21 | 21 |
| financial | | | |
| instruments | | | |
+-----------------+-----------+-------------+-----------+
| Total | 198,104 | 1,709 | 199,813 |
| liabilities | | | |
+-----------------+-----------+-------------+-----------+
| Balance at 31 December | | |
| 2008 | | |
+-----------------------------+-------------+-----------+
| LIABILITIES | At | At fair | Total |
| |amortized | value | |
| | cost | through | |
| | | profit or | |
| | | loss | |
+-----------------+-----------+-------------+-----------+
| Long term loans | 198,393 | | 198,393 |
+-----------------+-----------+-------------+-----------+
| Total | 198,393 | | 198,393 |
| liabilities | | | |
+-----------------+-----------+-------------+-----------+
| | | |
+-----------------------------+-------------+-----------+
| Balance at 31 December | | |
| 2007 | | |
+-----------------------------+-------------+-----------+
| LIABILITIES | At | At fair | Total |
| |amortized | value | |
| | cost | through | |
| | | profit or | |
| | | loss | |
+-----------------+-----------+-------------+-----------+
| Due to | 433,941 | | 433,941 |
| financial | | | |
| institutions | | | |
+-----------------+-----------+-------------+-----------+
| Due to | 1,422,139 | | 1,422,139 |
| customers | | | |
+-----------------+-----------+-------------+-----------+
| Derivative | | 14,570 | 14,570 |
| financial | | | |
| instruments | | | |
+-----------------+-----------+-------------+-----------+
| Issued debt | 25,283 | | 25,283 |
| securities | | | |
+-----------------+-----------+-------------+-----------+
| Total | 1,881,363 | 14,570 | 1,895,933 |
| liabilities | | | |
+-----------------+-----------+-------------+-----------+
For the periods ending 31 December 2009 and 31 December 2008, all financial
assets and liabilities are carried at their value, except from the long term
loans due to financial institutions which are carried at amortized cost. Due to
the fact that the interest rate changes every trimester, the fair value of the
loans will not significantly differ from its carrying amount.
49. POST REPORTING DATE EVENTS
Subsequent events, which regard the Group which, according to the International
Financial Reporting Standards, need to be mentioned, are the following:
In January 2010, the Company transferred approximately US$23.8 million of its
trading portfolio investments to SG Aurora Fund LTD, an investment fund
incorporated in Delaware US, receiving in exchange 23,810.182 shares of the
fund.
On 19 March 2010, the Company exercised the right to participate in a
convertible bond loan issue of MIG. Under the terms of the issue, the Company
acquired 10,482,180 bonds for a price of EUR4.77 per bond, paying approximately
EUR50 million. The bonds bear 5% fixed annual interest, they are convertible into
common registered shares of MIG and on 26 March 2010 they shall commence trading
on the Athens Stock Exchange. The bonds will mature in 5 years.
50. APPROVAL OF FINANCIAL STATEMENTS
The financial statements of IRF European Finance Investments Limited ("the
Company") as well as the consolidated financial statements of the Company and
its subsidiaries ("the Group"), for the year ended 31 December 2009 were
approved by the Company's Board of Directors on 26 March 2010 and are subject
to the final approval of the General Meeting of the Shareholders according the
Company's Bye-laws,
Independent Auditors Report on pages 8 to 9.
Athens, 26 March 2010
+------------------------------------+------------------------------------+
| Angeliki Frangou | Loukas Valetopoulos |
| | |
| | |
| | |
| _________________________________ | _________________________________ |
| Chairman, Non - Executive Director | Chief Executive Officer, Director |
+------------------------------------+------------------------------------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
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