Consolidated Financial Statements - Minoan Lines
Consolidated Financial Statements - Minoan Lines
Consolidated Financial Statements - Minoan Lines
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MINOAN LINES SHIPPING S.A. AND SUBSIDIARIES<br />
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENS<br />
(Amounts expressed in thousands of drachmae unless otherwise stated)<br />
12. Long-term Provisions<br />
Long-term provisions are analysed as follows:<br />
1999<br />
Unaudited<br />
2000<br />
Provision for retirement indemnities 172,775 189,011<br />
Provision for taxes 119,348 119,348<br />
Provision for legal contingency 1,075,750 1,075,750<br />
Other 75,000 75,000<br />
Provision for retirement indemnities<br />
1,442,873 1,459,109<br />
The Company maintains a provision for retirement indemnities for all its employees in conformity with Greek<br />
labour laws. The provision as at December 31, 1998 was based upon the advice of independent actuaries, which<br />
include the following main assumptions:<br />
Rate of Return of Investments 7.12%<br />
Rate of Salary Increases 3%<br />
Mortality Table Greek Model 1980<br />
Age of Retirement<br />
In accordance with labour laws<br />
The anticipated annual cost to build up this provision is approximately 1.2% of administration payroll cost and<br />
0.2% of labour payroll cost.<br />
Income taxes<br />
Greece does not impose any tax on income derived from shipping operations. Income tax is imposed on income<br />
from non-shipping (mainly bank interest earned). In accordance with fiscal rules, the Company’s books, records<br />
and tax returns are subject to tax audits. The unaudited financial years are 1997, 1998 and 1999. In common<br />
practice in Greece, additional taxes are assessed following tax audits and additional tax assessments may vary<br />
from the amounts accrued, however management of the Company believes that any additional tax liability over<br />
and above the amount accrued would not have a material adverse impact on the results of operations or financial<br />
position.<br />
Legal contingency<br />
The Directorate General IV for Competition of the European Commission has determined that the Company,<br />
together with eight other ferry operations have infringed Article 85 of the European Community Treaty. The<br />
fine imposed on the Company is EURO 3.26 million. ? he Company has recorded in the 1997 accounts the full<br />
provision of GRD 1,075,750 for the penalty. The Company is contesting this decision and believes that the<br />
outcome of this decision will not have a material adverse effect on the Company’s results of operations or<br />
financial position since the penalty has been fully provided for.<br />
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