News
Reply to letter of Athens Stock Exchange
29.03.2005
To: Athens Stock Exchange
Division of Listed Securities
Department of Surveillance of Companies’ Obligations
Office of Surveillance of Listed Companies’ Obligations
Reply to letter of Athens Stock Exchange
In reply to Athens Stock Exchange letter dated March 24th, 2005, under protocol number 13648, ΙΜΑΚΟ MEDIA S.A. notifies the following:
1. We have reviewed the submitted under protocol number 10967, schedule of Additional Elements of Financial Information of period commending of January 1st, 2004 and ending on December 31st, 2004 and more specifically the elements of section 3 under title “Readjusted Elements”, as these are included in the submitted schedule and we confirm their correctness.
2. In the context of application of articles 277 paragraph 1 (c), 289 paragraph 1 (c) and 298 of Athens Stock Exchange Operation Regulation, as approved by the 1/304/10-6-2004 decision of the Capital Market Commission (Issue of Governmental Gazette 900Β-16/6/2004) and the 42/22.7.2004 Resolution of the Board of Directors of Athens Stock Exchange, the Company proceeded to the readjustment of the requested elements. The readjustment was made pursuant to the provisions of paragraph 13 of the 10/21.6.2001 circular of the Capital Market Commission, in which it is mentioned, among others, that the readjustment shall take place pursuant to the observations in the Certificate of the Certified Auditor-Accountant and in accordance with any Company’s notes. More analytically, the Company’s notes on the published Balance Sheet of the fiscal year ending on December 31st, 2004 are purely informative and do not refer to financial sizes affecting either the total of Equity or the Results of the Fiscal Year, contrary to the observations of the Certified Auditor-Accountant, as these are presented in the Audit Certificate, which are taken into account in the readjustment of financial sizes of section 3 under the title “Readjusted Elements” of the schedule of Additional Elements of Financial Information. We set forth below comments on the reasons of differences between the readjusted and the published financial elements based on the Balance Sheet of 31.12.2004.
• Provision for Devaluation of Participations
A readjustment results according to the observation of the Certified Auditor-Accountant from the lack of provision for the devaluation of participations amounting to € 5.654.600, from which the amount of € 146.700 should burden the results of the fiscal year. The Company, consistent with its long-term policy, evaluates its participations pursuant to the provisions of Code of Books and Records, article 28, paragraph 5. Its participations concern long term investments and not short term placements for obtaining immediate profit; we consider that the acquisition price presents with clarity the value of participation pursuant to article 42, paragraph 3, of law 2190/1920. In case the viability of subsidiaries companies is contested, they are set under liquidation proceedings and the mother company makes a provision for devaluation of said participations, since the long term character of said investments is not assured. Also, pursuant to the provisions of law 3229/2004, the Company is under the obligation to modify its financial statements of December 31st, 2003 prepared under the Greek Accounting Standards, in accordance with International Standards of Financial Information. At this stage, the devaluation issue of each participation shall be examined separately, pursuant to the provisions of International Accounting Standards No. 36.
By reviewing each subsidiary company, we notify that the amount of € 5.654.600, derived from the lack of provision for devaluation of participations, is analyzed as follows:
1) A provision has already been made during the previous fiscal years for the subsidiary company under liquidation proceedings Powernet S.A., a devaluation provision of total amount of € 4.248.000 approximately; said provision is deducted from the participations account in the assets of the balance sheet. Provided that the company under liquidation owns assets and claims which are expected to be liquidated during the liquidation procedure, an additional provision (of the amount of € 106.800) for the devaluation of participation in said company was not considered necessary.
2) An amount of € 5.284.600 approximately concerns the difference between the net position of four (4) subsidiaries and the acquisition value thereof as analyzed below :
• Provision for Unsecured Claims
In accordance with the observation of the Certified Auditor-Accountant a readjustment results from the lack of provision for the unsecured claims amounting to € 3.534.800, from which the amount of € 1.318.900 should burden the results of the closing fiscal year. The policy followed by the Company, with regard to the write-off of unsecured claims, takes into account the tax legislation, as well as the legal procedures required and followed. The above claims are indeed overdue and the Company in cooperation with its legal counsels has proceeded to all the actions required for their collection. For a significant part of the overdue claims, we have initiated judiciary procedures against the debtors and we consider that even with a delay a considerable amount of said claims shall be collected. In case that a claim is declared uncollectible by a definite judgment, then said claim is written off from the Company’s books.
A readjustment results according to the observation of the Certified Auditor-Accountant from the lack of provision for the devaluation of participations amounting to € 5.654.600, from which the amount of € 146.700 should burden the results of the fiscal year. The Company, consistent with its long-term policy, evaluates its participations pursuant to the provisions of Code of Books and Records, article 28, paragraph 5. Its participations concern long term investments and not short term placements for obtaining immediate profit; we consider that the acquisition price presents with clarity the value of participation pursuant to article 42, paragraph 3, of law 2190/1920. In case the viability of subsidiaries companies is contested, they are set under liquidation proceedings and the mother company makes a provision for devaluation of said participations, since the long term character of said investments is not assured. Also, pursuant to the provisions of law 3229/2004, the Company is under the obligation to modify its financial statements of December 31st, 2003 prepared under the Greek Accounting Standards, in accordance with International Standards of Financial Information. At this stage, the devaluation issue of each participation shall be examined separately, pursuant to the provisions of International Accounting Standards No. 36.
By reviewing each subsidiary company, we notify that the amount of € 5.654.600, derived from the lack of provision for devaluation of participations, is analyzed as follows:
1) A provision has already been made during the previous fiscal years for the subsidiary company under liquidation proceedings Powernet S.A., a devaluation provision of total amount of € 4.248.000 approximately; said provision is deducted from the participations account in the assets of the balance sheet. Provided that the company under liquidation owns assets and claims which are expected to be liquidated during the liquidation procedure, an additional provision (of the amount of € 106.800) for the devaluation of participation in said company was not considered necessary.
2) An amount of € 5.284.600 approximately concerns the difference between the net position of four (4) subsidiaries and the acquisition value thereof as analyzed below :
• P. Ekdotiki S.A.
An amount of € 164.000 approximately concerns the difference between the accounting net position (financial statements of December 31st, 2004) of said company and the acquisition value thereof. Taking into account that a) the participation concerns a long term placement of investment character and b) the prospects of the company are not negative, a relevant provision for the devaluation of the participation was not considered necessary, since the acquisition price is considered to depict the actual current value of the company in case of its liquidation. In the first application of International Standard of Financial Information Νo 1, the issue of decrease of the accounting value of our participation in P. Ekdotiki S.A. shall be examined pursuant to International Accounting Standard No 36.
An amount of € 164.000 approximately concerns the difference between the accounting net position (financial statements of December 31st, 2004) of said company and the acquisition value thereof. Taking into account that a) the participation concerns a long term placement of investment character and b) the prospects of the company are not negative, a relevant provision for the devaluation of the participation was not considered necessary, since the acquisition price is considered to depict the actual current value of the company in case of its liquidation. In the first application of International Standard of Financial Information Νo 1, the issue of decrease of the accounting value of our participation in P. Ekdotiki S.A. shall be examined pursuant to International Accounting Standard No 36.
• Colour Unit S.A.
An amount of € 463.000 approximately concerns the difference between the accounting net position (financial statements of December 31st, 2004) of said company and the acquisition value thereof. Said amount concerns the surplus value paid for the acquisition of the participation in Colour Unit. Colour Unit presents a significant profitability and considerable prospects. Additionally, ΙΜΑΚΟ collects dividends on an annual basis by said subsidiary company. Taking into account of the above IMAKO’s Administration considers that a provision of devaluation of its participation in Colour Unit is not necessary, since the acquisition value is considered equal to the actual value of the company. Additionally, there is no issue of decrease of the accounting value of our participation in Colour Unit pursuant to International Accounting Standard No 36.
An amount of € 463.000 approximately concerns the difference between the accounting net position (financial statements of December 31st, 2004) of said company and the acquisition value thereof. Said amount concerns the surplus value paid for the acquisition of the participation in Colour Unit. Colour Unit presents a significant profitability and considerable prospects. Additionally, ΙΜΑΚΟ collects dividends on an annual basis by said subsidiary company. Taking into account of the above IMAKO’s Administration considers that a provision of devaluation of its participation in Colour Unit is not necessary, since the acquisition value is considered equal to the actual value of the company. Additionally, there is no issue of decrease of the accounting value of our participation in Colour Unit pursuant to International Accounting Standard No 36.
• Nitro Music S.Α.
An amount of € 4.428.000 approximately concerns the difference between the accounting net position (financial statements of December 31st, 2004) of said company and the acquisition value thereof. Our company, in light of the forthcoming application of International Standards of Financial Information, as also provided for by law 3229/2004, shall proceed to the readjustment of sums of the Balance Sheet of December 31st, 2003, pursuant to the provisions of International Standard of International Information No 1. It is noted that on December 31st, 2003, the inventory of the beginning of the fiscal year 2004, which shall constitute also the required comparable period of financial statements for the fiscal year 2005. Pursuant to the International Standards of Financial Information all the adjustments made with the aim of the financial statements transition from the Greek Accounting Standards to the International Standards of Financial Information, shall be made on the date of the first application of the International Standards of Financial Information which is for our company, as stated above, the 31st of December of 2003. As far as the company Nitro Music S.A. is concerned, our company shall proceed to the adjustment of the participation value to its current value, following the provisions of the relevant International Standards of Financial Information and the differences that result shall be depicted and deducted from the Liabilities Account “Balance of Profits carried forward”.
• Iko Press S.A.
An amount of € 229.000 approximately concerns the difference between the accounting net position (financial statements of December 31st, 2004) of said company and the acquisition value thereof. Taking into account that IMAKO’s participation in Iko Press S.A. concerns a long term placement of investment character and that Iko Press S.A. is a company with a considerable presence and reputation in the field of publications and printing, with an extended clientele, and particularly positive prospects, a relevant provision for the devaluation of the participation was not considered necessary, since the acquisition price is considered to depict the actual current value of the company in case of its liquidation. Additionally, there is no issue of decrease of the accounting value of our participation in Iko Press S.A. pursuant to International Accounting Standard No 36.
3) An amount of € 102.000 approximately mentioned in the observation of the Certified Auditor-Accountant concerns the difference between the accounting net position (financial statements of December 31st, 2003) of the company Aloimonos-Nikolaou S.A. and the acquisition value thereof. Taking into account that the participation concerns a long term placement of investment character and that said company has a considerable presence and reputation in the field of packaging, an extended clientele, and particularly positive prospects, a relevant provision for the devaluation of the participation was not considered necessary, since the acquisition price is considered to depict the actual current value of the company in case of its liquidation. In the first application of International Standard of Financial Information Νo 1 the issue of decrease of the accounting value of our participation in Aloimonos-Nikolaou S.A. shall be examined pursuant to International Accounting Standard No 36.
4) An amount of € 160.500 approximately concerns the difference between the accounting net position (financial statements of December 31st, 2003) of the company Euroforms S.A. and the acquisition value thereof. A relevant provision for the devaluation of the participation was not considered necessary, since the acquisition price is considered to depict the actual current value of the company in case of liquidation. In case there is no improvement of its financial sizes after a reasonable time period the Administration of IMAKO shall examine again the issue of making provision for the devaluation of said participation. In the first application of International Standard of Financial Information Νo 1 the issue of decrease of the accounting value of our participation in Euroforms S.A. shall be examined pursuant to International Accounting Standard No 36.
• Provision for the devaluation of slow moving stock
In accordance with the observation of the Certified Auditor-Accountant a readjustment results from the lack of provision for devaluation of slow moving stock amounting to € 308.600, from which the amount of € 65.700 should burden the results of the closing fiscal year. The slow moving stock concerns mostly merchandizes disposed along with the Company’s magazines as gifts. The note of the Certified Auditor-Accountant for possible devaluation of the slow moving stock is not considered to entail an obligation of making a relevant provision, since the Company from time to time proceeds to the sale of old merchandizes, mostly in the form of offers at prices almost reaching their acquisition cost. Also, the merchandizes may re-circulate accompanying new issues of magazines. In any case, when the stock is liquidated, any difference, either positive or negative, resulting from the acquisition value is recorded in the results.
An amount of € 4.428.000 approximately concerns the difference between the accounting net position (financial statements of December 31st, 2004) of said company and the acquisition value thereof. Our company, in light of the forthcoming application of International Standards of Financial Information, as also provided for by law 3229/2004, shall proceed to the readjustment of sums of the Balance Sheet of December 31st, 2003, pursuant to the provisions of International Standard of International Information No 1. It is noted that on December 31st, 2003, the inventory of the beginning of the fiscal year 2004, which shall constitute also the required comparable period of financial statements for the fiscal year 2005. Pursuant to the International Standards of Financial Information all the adjustments made with the aim of the financial statements transition from the Greek Accounting Standards to the International Standards of Financial Information, shall be made on the date of the first application of the International Standards of Financial Information which is for our company, as stated above, the 31st of December of 2003. As far as the company Nitro Music S.A. is concerned, our company shall proceed to the adjustment of the participation value to its current value, following the provisions of the relevant International Standards of Financial Information and the differences that result shall be depicted and deducted from the Liabilities Account “Balance of Profits carried forward”.
• Iko Press S.A.
An amount of € 229.000 approximately concerns the difference between the accounting net position (financial statements of December 31st, 2004) of said company and the acquisition value thereof. Taking into account that IMAKO’s participation in Iko Press S.A. concerns a long term placement of investment character and that Iko Press S.A. is a company with a considerable presence and reputation in the field of publications and printing, with an extended clientele, and particularly positive prospects, a relevant provision for the devaluation of the participation was not considered necessary, since the acquisition price is considered to depict the actual current value of the company in case of its liquidation. Additionally, there is no issue of decrease of the accounting value of our participation in Iko Press S.A. pursuant to International Accounting Standard No 36.
3) An amount of € 102.000 approximately mentioned in the observation of the Certified Auditor-Accountant concerns the difference between the accounting net position (financial statements of December 31st, 2003) of the company Aloimonos-Nikolaou S.A. and the acquisition value thereof. Taking into account that the participation concerns a long term placement of investment character and that said company has a considerable presence and reputation in the field of packaging, an extended clientele, and particularly positive prospects, a relevant provision for the devaluation of the participation was not considered necessary, since the acquisition price is considered to depict the actual current value of the company in case of its liquidation. In the first application of International Standard of Financial Information Νo 1 the issue of decrease of the accounting value of our participation in Aloimonos-Nikolaou S.A. shall be examined pursuant to International Accounting Standard No 36.
4) An amount of € 160.500 approximately concerns the difference between the accounting net position (financial statements of December 31st, 2003) of the company Euroforms S.A. and the acquisition value thereof. A relevant provision for the devaluation of the participation was not considered necessary, since the acquisition price is considered to depict the actual current value of the company in case of liquidation. In case there is no improvement of its financial sizes after a reasonable time period the Administration of IMAKO shall examine again the issue of making provision for the devaluation of said participation. In the first application of International Standard of Financial Information Νo 1 the issue of decrease of the accounting value of our participation in Euroforms S.A. shall be examined pursuant to International Accounting Standard No 36.
• Provision for the devaluation of slow moving stock
In accordance with the observation of the Certified Auditor-Accountant a readjustment results from the lack of provision for devaluation of slow moving stock amounting to € 308.600, from which the amount of € 65.700 should burden the results of the closing fiscal year. The slow moving stock concerns mostly merchandizes disposed along with the Company’s magazines as gifts. The note of the Certified Auditor-Accountant for possible devaluation of the slow moving stock is not considered to entail an obligation of making a relevant provision, since the Company from time to time proceeds to the sale of old merchandizes, mostly in the form of offers at prices almost reaching their acquisition cost. Also, the merchandizes may re-circulate accompanying new issues of magazines. In any case, when the stock is liquidated, any difference, either positive or negative, resulting from the acquisition value is recorded in the results.
• Provision for Unsecured Claims
In accordance with the observation of the Certified Auditor-Accountant a readjustment results from the lack of provision for the unsecured claims amounting to € 3.534.800, from which the amount of € 1.318.900 should burden the results of the closing fiscal year. The policy followed by the Company, with regard to the write-off of unsecured claims, takes into account the tax legislation, as well as the legal procedures required and followed. The above claims are indeed overdue and the Company in cooperation with its legal counsels has proceeded to all the actions required for their collection. For a significant part of the overdue claims, we have initiated judiciary procedures against the debtors and we consider that even with a delay a considerable amount of said claims shall be collected. In case that a claim is declared uncollectible by a definite judgment, then said claim is written off from the Company’s books.
• Provision for Personnel Indemnification
In accordance with the observation of the Certified Auditor-Accountant a readjustment results from the lack of provision for personnel indemnification amounting to € 565.000, from which the amount of 124.900 should burden the results of the closing fiscal year. The Company, based on the 205/1988 legal opinion (interpreting the new provisions of article 42 e, paragraph 14, law 2190/1920) of all the Administration’s Legal Counsels, has not made a provision for personnel indemnification due to retirement. Our Company, as almost the total of Greek businesses, based on the orientation provided by the supervising authority, interpreting the relevant provision of the Commercial Law, has not proceeded to the making of a provision for personnel indemnification, since none of its employees is entitled to indemnification due to retirement in the forthcoming years. 3. In respect of your question regarding our evaluation of the consequences of the differences to the Equity and the Results, at the first publication of the financial statements pursuant to International Accounting Standards, we would like to note the following: In the context of application of the International Accounting Standards by our Company, there shall be modifications in the Company’s Equity as well as in its Results. As provided for by the International Standard of Financial Information No. 1 regarding “ the first application of the International Standards of Financial Information” our Company must readjust the Financial Statements of fiscal years 2003 and 2004, applying the rules provided for by International Accounting Standards, so that the Financial Statements prepared pursuant to these standards contain information of high quality which a) shall be transparent to all users and comparable for all the periods presented b) shall provide an appropriate point of reference for accounting pursuant to international standards and c) shall be produced at a cost not exceeding the benefit for the users. More specifically, the Company at the first application of the international accounting standards, that is on the 31st December 2003, shall adjust the financial sizes of the accounts “Intangible Immobilizations”, “Real Property and Buildings”, “Participations and Other Long Term Claims”, “Stocks”, “Unsecured Claims” and “Provisions for Personnel Indemnification”. Said adjustment shall affect the total of the Company’s Equity, as expressly provided by International Standard of Financial Information No.1, therefore, readjusting the inventory of the fiscal year commencing on January 1st, 2004 and ending on December 31st, 2004. For the fiscal year 2004, the required readjustment of the above sizes shall affect the Company’s Results as well as the Company’s Equity.In respect of the consequences of the differences, resulting from the observations in the Certified Auditor-Accountant’s Certificate, for the fiscal years of 2003 and 2004, we notify that these differences have resulted, as expressly provided for also by the legislation, from the audit’s execution pursuant to the provisions of article 37 of law 2190/ 1920 regarding the Anonymous Companies and pursuant to the auditing procedures considered appropriate, based on the accounting principles and rules followed by the Body of Certified Auditors-Accountants, which are consistent with the basic principles of International Accounting Standards. Therefore, the adoption of new rules and principles for the preparation of the Financial Statements, within the context of application of the International Accounting Standards, result in the differentiation of the sizes mentioned in the Certificate of the Certified Auditor-Accountant for the fiscal years 2003 and 2004 in comparison with the sizes based on which the Company must adjust the abovementioned accounts. The differentiation of said sizes may be either positive or negative.
Additionally, it should be stressed that the legislation in effect until now, in the context of application of the principle of conservatism, has not provided for the readjustment of certain accounts, due to “positive” surplus value when evaluated under current values, contrary to the rules and principles of International Accounting Standards, under which the appearance of such sizes is allowed, for instance the readjustment of the value of estates and real property to their current market value.
In respect of the differences, resulting from the application and preparation of the Financial Statements pursuant to International Accounting Standards, in the Equity and the Results, the Company notifies that on this particular time for the Balance Sheet of December 31st, 2003 (Balance Sheet of the application commencement) the procedure of modification and harmonization of the Financial Statements pursuant to the rules and principles of the International Accounting Standards, has almost been completed; for the Balance Sheet of December 31st, 2004 the procedure of modification is at a stage of elaboration of the elements of the particular fiscal year. Therefore, the Company is not able to quantify with accuracy its consequences. In any case, we consider that in light of the first publication of the Financial Statements pursuant to International Accounting Standards (that is, the Accounting Statement of the First Quarter of 2005) the Equity shall be considerably decreased, through readjustment of Financial Statements of fiscal years 2003 and 2004; said decrease shall nevertheless, be less than the decrease of the readjusted Equity included in section 3 of Schedule of Additional Elements of Financial Information; the Results of the First Quarter of 2005 shall not be considerably affected.
4. With regard to your question, whether, taking into account of the application of the International Accounting Standards, the Certified Auditor-Accountant’s observation shall be maintained for the application of articles 47 and 48 of law 2190/1920 as to the subsidiaries companies NITRO MUSIC S.A. P. EKDOTIKI S.A. we notify the following:
In accordance with the observation of the Certified Auditor-Accountant a readjustment results from the lack of provision for personnel indemnification amounting to € 565.000, from which the amount of 124.900 should burden the results of the closing fiscal year. The Company, based on the 205/1988 legal opinion (interpreting the new provisions of article 42 e, paragraph 14, law 2190/1920) of all the Administration’s Legal Counsels, has not made a provision for personnel indemnification due to retirement. Our Company, as almost the total of Greek businesses, based on the orientation provided by the supervising authority, interpreting the relevant provision of the Commercial Law, has not proceeded to the making of a provision for personnel indemnification, since none of its employees is entitled to indemnification due to retirement in the forthcoming years. 3. In respect of your question regarding our evaluation of the consequences of the differences to the Equity and the Results, at the first publication of the financial statements pursuant to International Accounting Standards, we would like to note the following: In the context of application of the International Accounting Standards by our Company, there shall be modifications in the Company’s Equity as well as in its Results. As provided for by the International Standard of Financial Information No. 1 regarding “ the first application of the International Standards of Financial Information” our Company must readjust the Financial Statements of fiscal years 2003 and 2004, applying the rules provided for by International Accounting Standards, so that the Financial Statements prepared pursuant to these standards contain information of high quality which a) shall be transparent to all users and comparable for all the periods presented b) shall provide an appropriate point of reference for accounting pursuant to international standards and c) shall be produced at a cost not exceeding the benefit for the users. More specifically, the Company at the first application of the international accounting standards, that is on the 31st December 2003, shall adjust the financial sizes of the accounts “Intangible Immobilizations”, “Real Property and Buildings”, “Participations and Other Long Term Claims”, “Stocks”, “Unsecured Claims” and “Provisions for Personnel Indemnification”. Said adjustment shall affect the total of the Company’s Equity, as expressly provided by International Standard of Financial Information No.1, therefore, readjusting the inventory of the fiscal year commencing on January 1st, 2004 and ending on December 31st, 2004. For the fiscal year 2004, the required readjustment of the above sizes shall affect the Company’s Results as well as the Company’s Equity.In respect of the consequences of the differences, resulting from the observations in the Certified Auditor-Accountant’s Certificate, for the fiscal years of 2003 and 2004, we notify that these differences have resulted, as expressly provided for also by the legislation, from the audit’s execution pursuant to the provisions of article 37 of law 2190/ 1920 regarding the Anonymous Companies and pursuant to the auditing procedures considered appropriate, based on the accounting principles and rules followed by the Body of Certified Auditors-Accountants, which are consistent with the basic principles of International Accounting Standards. Therefore, the adoption of new rules and principles for the preparation of the Financial Statements, within the context of application of the International Accounting Standards, result in the differentiation of the sizes mentioned in the Certificate of the Certified Auditor-Accountant for the fiscal years 2003 and 2004 in comparison with the sizes based on which the Company must adjust the abovementioned accounts. The differentiation of said sizes may be either positive or negative.
Additionally, it should be stressed that the legislation in effect until now, in the context of application of the principle of conservatism, has not provided for the readjustment of certain accounts, due to “positive” surplus value when evaluated under current values, contrary to the rules and principles of International Accounting Standards, under which the appearance of such sizes is allowed, for instance the readjustment of the value of estates and real property to their current market value.
In respect of the differences, resulting from the application and preparation of the Financial Statements pursuant to International Accounting Standards, in the Equity and the Results, the Company notifies that on this particular time for the Balance Sheet of December 31st, 2003 (Balance Sheet of the application commencement) the procedure of modification and harmonization of the Financial Statements pursuant to the rules and principles of the International Accounting Standards, has almost been completed; for the Balance Sheet of December 31st, 2004 the procedure of modification is at a stage of elaboration of the elements of the particular fiscal year. Therefore, the Company is not able to quantify with accuracy its consequences. In any case, we consider that in light of the first publication of the Financial Statements pursuant to International Accounting Standards (that is, the Accounting Statement of the First Quarter of 2005) the Equity shall be considerably decreased, through readjustment of Financial Statements of fiscal years 2003 and 2004; said decrease shall nevertheless, be less than the decrease of the readjusted Equity included in section 3 of Schedule of Additional Elements of Financial Information; the Results of the First Quarter of 2005 shall not be considerably affected.
4. With regard to your question, whether, taking into account of the application of the International Accounting Standards, the Certified Auditor-Accountant’s observation shall be maintained for the application of articles 47 and 48 of law 2190/1920 as to the subsidiaries companies NITRO MUSIC S.A. P. EKDOTIKI S.A. we notify the following:
• Nitro Music S.A.
Upon application of the International Accounting Standards by IMAKO, the Certified Auditor-Accountant’s observation on the consolidated financial statements shall be maintained for the application of articles 47 and 48 of law 2190/1920 as to NITRO MUSIC S.A. The Company is currently reviewing the possibility of liquidation of its subsidiary, in application of the legislation in effect.
Upon application of the International Accounting Standards by IMAKO, the Certified Auditor-Accountant’s observation on the consolidated financial statements shall be maintained for the application of articles 47 and 48 of law 2190/1920 as to NITRO MUSIC S.A. The Company is currently reviewing the possibility of liquidation of its subsidiary, in application of the legislation in effect.
• P. Ekdotiki S.A.
Upon application of the International Accounting Standards by IMAKO, the Certified Auditor-Accountant’s observation on the consolidated financial statements shall be maintained for the application of articles 47 and 48 of law 2190/1920 as to P. EKDOTIKI S.A. P. EKDOTIKI S.A. shall take all necessary measures within the time limits provided for by the legislation in effect, so that the conditions of application of articles 47 and 48 of law 2190/1920 are not fulfilled, pursuant to the certified auditor’s observation.
Upon application of the International Accounting Standards by IMAKO, the Certified Auditor-Accountant’s observation on the consolidated financial statements shall be maintained for the application of articles 47 and 48 of law 2190/1920 as to P. EKDOTIKI S.A. P. EKDOTIKI S.A. shall take all necessary measures within the time limits provided for by the legislation in effect, so that the conditions of application of articles 47 and 48 of law 2190/1920 are not fulfilled, pursuant to the certified auditor’s observation.
