ELLAKTOR S.A.
Response to HCMC letter dated 09.09.2008.
In response to your letter dated September 9, 2008 regarding the explanatory disclosures of the accounts "Administrative expenses", "Other operating income/(expenses) (net)", "Profit/(loss) from affiliated companies" and "Financial income (expenses)-net", of the Income Statement of the interim condensed financial statements for the 1 January to 30 June 2008 period, we inform you the following:
The changes in the aforementioned accounts versus the comparable figures are mainly due to the fact that in the first half of 2008 the Group has significantly expanded. As it is derived by note 7 of the interim financial statements dated 30.06.2008, where there is a description of the companies included in the consolidation of the current period in relation to the respective period last year, 24 new subsidiaries are consolidated with the full consolidation method and 9 new affiliated companies with the net equity method.
The majority of them is coming from the merger by absorption of PANTECHNIKI SA, a fact that was already stated in the annual financial statements dated 31.12.2007. As a result of this merger, the companies ATTIKI ODOS SA, ATTIKA DIODIA SA and ATTIKES DIADROMES SA, were converted into subsidiaries and were consolidated with the full consolidation method. Due to the magnitude of their financial figures, the impact of these companies in the consolidated financial statements is substantial.
During the preparation of the interim financial statements dated 30.06.2008 it was not assumed that "the nature and the amount of the data that affect assets, liabilities, net equity, net profits or cash flows, are extraordinary due to their nature, their size and their frequency" (IAS 34, par 16c), as these figures compose the "new" Group ELLAKTOR as it was formed since 31.12.2007 and they present its normal operation and performance. The relative explanatory disclosures have been included in the annual financial statements dated 31.12.2007.
More specifically, the decrease in "Profit/(loss) from affiliated companies" from euro 66.0 mil. in the first half of 2007 to euro 3.8 mil. in the first half of 2008 is due to the extraordinary profit amounting to euro 42.3 mil. from the share exchange of 30% of HELLENIC GOLD SA with 19.9% of EUROPEAN GOLDFIELDS LTD that was consolidated in H1 2007 financial results. Moreover, in the first half of 2007 the account "Profit/(loss) from affiliated companies" also included the results of the affiliated at that time com panies ATTIKI ODOS SA, ATTIKA DIODIA SA and ATTIKES DIADROMES SA, and as stated above, in the current period they were consolidated as subsidiaries (note 4 of the interim financial statements dated 30.06.2008).
As far as it regards the decrease in "Other operating income/(expenses) (net)", which on a consolidated basis shifted from euro 13.8 mil. in the first half of 2007 to euro 7.1 mil. in the first half of 2008 and on a parent company basis shifted from euro 16.1 mil. to euro 0.8 mil., this is mainly due to the fact that in the first half of 2007 the account also includes profit of euro 11.1 mil. on a consolidated basis and euro 15.1 mil. on a company basis, which resulted from the sale of the affiliated company ATTIKA TELECOMM UNICATIONS SA.
The changes in the aforementioned accounts versus the comparable figures are mainly due to the fact that in the first half of 2008 the Group has significantly expanded. As it is derived by note 7 of the interim financial statements dated 30.06.2008, where there is a description of the companies included in the consolidation of the current period in relation to the respective period last year, 24 new subsidiaries are consolidated with the full consolidation method and 9 new affiliated companies with the net equity method.
The majority of them is coming from the merger by absorption of PANTECHNIKI SA, a fact that was already stated in the annual financial statements dated 31.12.2007. As a result of this merger, the companies ATTIKI ODOS SA, ATTIKA DIODIA SA and ATTIKES DIADROMES SA, were converted into subsidiaries and were consolidated with the full consolidation method. Due to the magnitude of their financial figures, the impact of these companies in the consolidated financial statements is substantial.
During the preparation of the interim financial statements dated 30.06.2008 it was not assumed that "the nature and the amount of the data that affect assets, liabilities, net equity, net profits or cash flows, are extraordinary due to their nature, their size and their frequency" (IAS 34, par 16c), as these figures compose the "new" Group ELLAKTOR as it was formed since 31.12.2007 and they present its normal operation and performance. The relative explanatory disclosures have been included in the annual financial statements dated 31.12.2007.
More specifically, the decrease in "Profit/(loss) from affiliated companies" from euro 66.0 mil. in the first half of 2007 to euro 3.8 mil. in the first half of 2008 is due to the extraordinary profit amounting to euro 42.3 mil. from the share exchange of 30% of HELLENIC GOLD SA with 19.9% of EUROPEAN GOLDFIELDS LTD that was consolidated in H1 2007 financial results. Moreover, in the first half of 2007 the account "Profit/(loss) from affiliated companies" also included the results of the affiliated at that time com panies ATTIKI ODOS SA, ATTIKA DIODIA SA and ATTIKES DIADROMES SA, and as stated above, in the current period they were consolidated as subsidiaries (note 4 of the interim financial statements dated 30.06.2008).
As far as it regards the decrease in "Other operating income/(expenses) (net)", which on a consolidated basis shifted from euro 13.8 mil. in the first half of 2007 to euro 7.1 mil. in the first half of 2008 and on a parent company basis shifted from euro 16.1 mil. to euro 0.8 mil., this is mainly due to the fact that in the first half of 2007 the account also includes profit of euro 11.1 mil. on a consolidated basis and euro 15.1 mil. on a company basis, which resulted from the sale of the affiliated company ATTIKA TELECOMM UNICATIONS SA.