Consolidated Financial Statements - Minoan Lines

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MINOAN LINES SHIPPING S.A. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENS (Amounts expressed in thousands of drachmae unless otherwise stated) Earnings per share Basic and diluted earnings per share The calculation of basic earning per share is based on the net profit attributable to ordinary shareholders and a weighted average number of ordinary shares outstanding during the period. The weighted average number of ordinary shares as at December is computed as follows: 1999 Unaudited 2000 Ordinary shares at beginning of the year 23,642,000 53,194,500 Effect of shares issued in July 1999 (bonus) 11,821,000 - Effect of shares issued in July 1999 (rights) 7,388,125 - Effect of shares issued in June 2000 (bonus) 14,283,708 17,731,500 Weighted average number of ordinary shares 57,134,833 70,926,000 The effect of the bonus shares issued in 1999 and 2000 has been adjusted retrospectively. The basic earnings per share and diluted earnings per share are equal as the Company does not have dilutive securities outstanding as at June 30, 2000. 15. Reserves Reserves are analysed as follows: 1999 Unaudited 2000 Statutory reserve 3,017,559 3,017,559 Tax free and other reserves 2,895,379 2,895,379 Total share capital (in GRD thousands) 5,912,938 5,912,938 Under Greek corporate law, corporations are required to transfer a minimum of 5% of their annual net profit as reflected in their statutory books to a statutory reserve, until such reserve equals one-third of the outstanding share capital. The above reserve cannot be distributed during the existence of the Company. 16. Dividends In accordance with Greek law, the Company is required to declare, in each year, a dividend of at least 6% of the Company’s paid in share capital or 35% of the Company’s net after tax profit, whichever is greater. These requirements may be varied or completely waived by a vote of the shareholders taken by majorities ranging from 80% to 100% of the paid in share capital (unanimous vote) in the case of a complete waiver of the dividend requirement. Dividends not claimed by beneficiaries within five years after the year of declaration are payable to the Inland Revenue. The Annual General Meeting of Shareholders, which took place on May 28, 2000, approved the recommendation of the Directors for the distribution of dividends of GRD 5,319,450. The distribution period started on June 26, 2000. 21
MINOAN LINES SHIPPING S.A. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENS (Amounts expressed in thousands of drachmae unless otherwise stated) 17. Related Party Transactions Transactions with shareholders or directors The Company and some of its subsidiaries purchase services from related companies in the ordinary course of business. Such related companies consist of companies, which are controlled by individuals who are either shareholders or members of the Board of Directors of certain subsidiaries. The Company believes that all agreements, on the basis of which such transactions are rendered and invoiced, have been entered into on terms which are favourable to the Company and at least comparable to those that would have been attained in the ordinary course of business from unaffiliated third parties under similar circumstances. Such related party transactions can be analysed as follows: Unaudited Fees and Commissions Accounts Receivable Six months ended June 30, 1999 Six months ended June 30, 2000 As at December 31, 1999 As at June 30, 2000 (unaudited) Naftiliakes Metaforikes Touristikes Epichirisis - 1,998 24,590 24,286 Ferries Services Practorevsis - 2,872 87,624 100,314 European Trust Agencies 85,029 92,452 18,152 777,318 European Thallasic Agencies 408,149 451,263 2,129,316 6,502,895 Associates 493,178 548,585 2,259,682 7,404,813 The Company charters the vessels Erotokritos and Fedra from its associate, <strong>Minoan</strong> Flying Dolphins S.A. for a fee of GRD 1,370 per day and GRD 1,096 per day, respectively. The vessel Agia Galini was also chartered from <strong>Minoan</strong> Flying Dolphins at a rate of GRD 5 million per month up to the date of its purchase (April 24, 2000). The expense for the year ended December 31, 1999 amounted to approximately GRD 42,893. The expense for the six months ended June 30, 2000 amounted to GRD 467,767 (unaudited). 18. Acquisitions and Disposals of Subsidiaries and Associates Acquisitions On March 16, 1999 the Company acquired a 51.522% interest of Air Greece S.A., a private air carrier for a consideration of GRD 1.1 billion, satisfied in cash. The acquisition was accounted for using the purchase method and goodwill arising on this acquisition amounted to GRD 774,318. In October 1999 the Company acquired a further 33.20% interest of Air Greece, increasing its participation to 84.72%, for a consideration of GRD 1,725,430 satisfied in cash. The acquisition was not accounted for using the purchase method and goodwill was not determined, as financial statements at the date of the transaction were not prepared. On December 28,1999 the Company acquired a 28% interest in Aegean Airlines S.A., a private air carrier, for a total consideration of GRD 4,686,153, satisfied by the exchange of shares in Air Greece of GRD 2,825,430 and cash of GRD 1,860,723. In April 2000 the Company acquired a further 1.03% stake increasing its participation to 29.03%, for a consideration of GRD 200,004. The 29.03% interest in Aegean Airlines S.A. has been accounted for as an associate. 22
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Consolidated Financial Statements - Minoan Lines

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