Aktsiaselts Tallink Grupp - NASDAQ OMX Baltic

FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED AUGUST 31, 2005
NOTES TO THE FINANCIAL STATEMENTS—(Continued)
Note 13 PROPERTY, PLANT AND EQUIPMENT (Continued)
As of August 31, 2005 the Group’s ships with book value of EEK 5,808,722,000 (2004: EEK
5,991,839,000) and market value of EEK 6,563,749,000 (2004: EEK 6,626,352,000) are subject to a first or
second mortgage to secure the Group’s bank loans (see also Note 15). Market value of pledged ships is an
average of values quoted by two shipbrokers as of August 31, 2005 and August 31, 2004.
In the current financial year the Group has changed its estimates of the useful lives of the components of
two new cruise ships. The new estimate is based on the experiences received from the first year of operations
with totally new cruise ships. In the opinion of the management of the Group, these new useful lives are effective
as of the beginning of the current financial year. In the interim reports for the 3-, 6- and 9-month periods ended
on November 30, 2004, February 28, 2005 and May 31, 2005, respectively, the previous estimates of useful lives
were used for calculating and recording depreciation charge. The total annual effect of the change amounts to
EEK 26,051,000 (including the effect of correction of error made in the prior interim financial statements in the
amount of EEK 19,538,000).
Land and
Plant and Other
The Parent
buildings Ships machinery equipment Total
Book value as of August 31, 2003 .............. 2,883 2,832,210 10,073 2,405 2,847,571
Additions .................................. 4,234 235,995 1,108 9,991 251,328
Depreciation for the year ...................... (284) (436,285) (4,074) (1,966) (442,609)
Book value as of August 31, 2004 .............. 6,833 2,631,920 7,107 10,430 2,656,290
Additions .................................. 0 351,896 353 4,236 356,485
Depreciation for the year ...................... (415) (688,064) (4,359) (3,820) (696,658)
Book value as of August 31, 2005 .............. 6,418 2,295,752 3,101 10,846 2,316,118
As of August 31, 2004
—cost ..................................... 7,868 4,067,236 29,048 16,443 4,120,595
—accumulated depreciation ....................
As of August 31, 2005
(1,035) (1,435,316) (21,941) (6,013) (1,464,305)
—cost ..................................... 7,868 4,409,800 29,247 20,060 4,466,975
—accumulated depreciation .................... (1,450) (2,114,048) (26,146) (9,214) (2,150,858)
The Parent has only leased ships from its subsidiaries. For more information about the leased assets see also
Note 15.
Note 14 INTANGIBLE ASSETS
for the year ended August 31,
The Group Goodwill1 Patents and
licenses2 Development
costs Total
Book value as of August 31, 2003 ........................ 194,056 587 7,379 202,022
Additions............................................. 0 3,202 0 3,202
Amortization for the year ................................ (20,908) (811) (7,062) (28,781)
Book value as of August 31, 2004 ........................ 173,148 2,978 317 176,443
Additions............................................. 0 1,076 0 1,076
Amortization for the year ................................ 0 (1,049) (317) (1,366)
Book value as of August 31, 2005 ........................ 173,148 3,005 0 176,153
1 Goodwill is entirely related to the segment of Estonia—Finland routes. For the impairment test the value in use is used for determining
the recoverable amount. Management has calculated the value in use based on the discounted 5-years cash flow projections using the
average gross margins achieved in the current year, the growth rate in revenue of 1-2% per annum and the discount rate of 12% (the
group’s weighted average cost of capital).
2 The useful life of patents and licenses is finite with a maximum of five years.
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