Aktsiaselts Tallink Grupp - NASDAQ OMX Baltic

FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED AUGUST 31, 2005
Note 17 SHARE CAPITAL (Continued)
NOTES TO THE FINANCIAL STATEMENTS—(Continued)
At AS Tallink Grupp Shareholders’ General Meeting on February 5, 2005 AS Tallink Grupp increased the share
capital from EEK 275,000,000 to EEK 1,100,000,000 by issuing 82,500,000 new shares with a par value of EEK 10
each. This increase was a bonus issue, i.e. new shares were issued on account of share premium in the amount of
EEK 414,870,000 and retained earnings in the amount of EEK 410,130,000. Therefore, the Parent’s shareholders
received three new shares for each share they owned before the issue.
Note 18 NOTE TO CASH FLOW STATEMENT
for the year ended August 31
The Group The Parent
2005 2004 2005 2004
Depreciation and amortization ............................... 271,878 273,760 697,483 442,856
Net (gain) / loss on disposals of property, plant and equipment ..... (354) 249 0 18
Net interest expenses ...................................... 159,020 131,633 151,730 130,973
Share of profit of subsidiaries and associates ....................
Net foreign exchange (gain) / loss related to investing and financing
(3,643) (1,360) (782,779) (450,311)
activities .............................................. (44) 17 0 0
Income tax expense ....................................... 356 305 0 0
Total adjustments of profit ................................ 427,213 404,604 66,434 123,536
Non-monetary transactions:
(1) Property, plant and equipment purchased under finance lease terms—see movements in lease assets
disclosed in Note 15;
(2) Bonus issue of shares—see Note 17.
Note 19 CONTINGENCIES AND COMMITMENTS
Legal claim
On 30 June 2005 Tallink Grupp AS submitted an action complaint to the Tallinn Administrative Court
against Estonian Maritime Administration and the Ministry of Economic Affairs and Communications for
unlawfully levying and receiving payment for icebreaker services and lighthouse dues. A court date has not yet
been scheduled.
Previously the invoices for these disputed icebreaker and lighthouse fees were recorded as expenses and
accounts payable in the total amount of EEK 33,554,000. According to the submitted complaint and considering
the results of similar court cases and the decision of the Ministry of Economic Affairs and Communications to
expense the receivables from the Group, the management of the Group has changed its estimate on the
probability of outflow of resources regarding these fees and reversed the related expense. The effect of the
reversal has been recorded as a reduction of current year (in the fourth quarter, i.e. the effect of the changes in
estimate has not been recorded and disclosed in the prior interim consolidated condensed financial statements of
the Group) port expenses under cost of sales.
Income tax on dividends
The Group’s retained earnings as of August 31, 2005 were EEK 1,528,048,000 (2004: EEK 1,465,007,000).
The maximum possible income tax liability as of August 31, 2005, which would become payable if retained
earnings were fully distributed is EEK 366,732,000 (2004: EEK 351,602,000). Income tax rate effective for
dividends paid out before January 1, 2006 was used for the calculation of the maximum income tax liability and
on the assumption of distributable dividends and related income tax together cannot exceed the amount of
retained earnings as of August 31, 2005 and 2004, respectively.
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