IRF Finance
Company Profile
underline
Admission Documents
underline
Board of Directors
underline
Committees
underline
Constitutional Documents
underline
Financial Statements
underline
Securities
underline
IRF finance
Press Releases
Final Results
IRF European Fin Investments Ltd 

19 March 2007







Press Release 19 March 2007



IRF European Finance Investments Ltd



('IRF' or 'the Company')



Final Results



IRF European Finance Investments Ltd (AIM:IRF) announces its audited financial
results for the 12 months ended 31 December 2006.



Highlights


- Group Net Income increases to €63.8 million
- Dividend declared of $0.26 per share
- Company Net Asset Value per share on 31 December 2006 of $5.36
- Electronic Settlement expected to commence 2 April 2007



Angeliki Frangou, Chairman of IRF said: 'We are delighted with our many
achievements during 2006. The Company located an attractive investment
opportunity in the form of Proton Bank and closed on the acquisition of a
controlling interest in Proton Bank in June 2006. Three months later, in
September of 2006, Proton Bank merged with Omega Bank. As a result of this
merger, the Company has increased exposure to the Greek banking market. We are
confident that the combined bank will enjoy further growth during 2007 given the
synergies from 12 months of combined operation as opposed to the 3 months of
combined operation during 2006. We will continue to survey the market for
attractive investment opportunities relating to control positions in financial
institutions. However, consolidation of the market requires discipline in
selecting an appropriate target or merger partner.'



Ms. Frangou continued that 'the capital gain from the Company's investment and
subsequent sale of shares in Piraeus Bank demonstrates that we can also
opportunistically enjoy the benefits of consolidation in the banking industry
through the purchase of shares in publicly traded companies. We recently
purchased shares in Marfin Popular Bank and believe there is a potential for
capital appreciation and current income from this investment and others.'

Below are the financial highlights of the Company, and that of the Company and
its subsidiaries (the 'Group'), for the 12 months ended 31 December 2006.



Financial Highlights


Amounts in € 000 The Group The Company
Income Statement items
Net Income 63,865 20,659
Profit before income tax 36,825 20,047
Income tax expense 2,916 -
Profit after tax 33,909 20,047
Attributable to equity holders of the 23,571 20,047
Company
Minority Interests 10,338 -
Basic earnings per share (in euro/ 0.41 0.35
share)
Diluted earnings per share (in euro/ 0.37 0.32
share)
Balance Sheet Items
Cash and cash equivalents 203,917 3,880
Total assets 1,745,739 219,082
Total liabilities 1,198,987 185
Total Equity 546,752 218,897
Equity attributable to equity holders 238,607 218,897
of the Company
Minority Interests 308,145 -



Dividend Payment



Based upon 2006 results, the Company has declared a dividend payment of US$0.26
per common share in respect of 2006. The record date has been fixed at 23 March
2007 with 18 April 2007 being the dividend payment date.



Commenting on the declaration of the dividend, Angeliki Frangou said: 'Our 2006
financial results permitted the board to declare a dividend of US$0.26 per
share. While further dividends will depend on future financial performance, the
Board has indicated that it would like to provide shareholders with a current
return.'



Net Asset Value



On 31 December 2006, the Company determined that its shares had a net asset
value ('NAV') of US$5.36 per share, determined as follows:



The Company owned a 20.16% interest in Proton Bank, whose shares trade on the
Athens Stock Exchange. The market value of this holding, based on the closing
share price as of 29 December 2006, the last trading day of 2006, was € 138.5
million. Common shares outstanding equaled 56.9 million shares.



The Company intends to determine and publish NAV on a periodic basis. This
estimated NAV is provided for information purposes only and should not be relied
upon for investment decisions.



Electronic Settlement



The Company is also pleased to announce that CREST members will shortly be able
to settle the transfer of its common shares and warrants within CREST, pursuant
to a depositary interest facility to be established by the Company (the 'DI
Facility'). This is expected to take effect on 2 April 2007.



The Company has arranged for Capita IRG Trustees Limited to issue a depositary
interest in respect of its shares and warrants and the depositary interests may
be held and transferred within CREST. Importantly, the DI Facility will allow
for CREST members to transfer and settle trades in the shares and warrants
electronically.



In CREST, the depositary interests will carry the same ISINs as the security to
which it relates. Please note the ISIN designation for the Company's shares and
warrants are:


Common Shares ISIN BMG443831058
Warrants ISIN BMG493831132



More information on the DI Facility will be provided shortly.

- Ends -


For further information:
IRF European Finance Investments Ltd
Sheldon Goldman, Deputy Chairman Tel: +1 212 404 5740
Collins Stewart Europe Limited
Seema Paterson, Corporate Finance Tel: +44 (0) 20 7523 8321



Media enquiries:
Abchurch
Henry Harrison-Topham / Franziska Boehnke Tel: +44 (0) 20 7398 7700
franziska.boehnke@abchurch-group.com www.abchurch-group.com



About IRF

IRF was formed to invest in the financial services industry throughout Europe
with a primary focus on credit institutions and insurance companies in South
Eastern Europe. IRF's current strategy is the acquisition of financial
institutions having valuations which do not reflect their potential and where
marketing and operational efficiencies are possible. IRF owns a 20.16% interest
in Proton Bank and a 1.6% interest in Marfin Popular Bank.



About Proton Bank

Proton Bank is a full-service financial services institution, including retail
and investment banking as well as the provision of specialized corporate
advisory and investment services. Proton Bank is listed on the Athens Stock
Exchange under the symbol 'PRO'.



About Marfin Popular Bank

Marfin Popular Bank is full-services financial institution that was created
through the recent merger of Marfin Financial Group, Laiki Hellas and Egnatia
Bank. As a result, Marfin is a regional financial institution with 312 branches
in 12 countries. Marfin Popular Bank is listed on the Athens Stock Exchange
under the symbol 'MARFB'.



Forward-looking statements

All statements, other than statements of historical fact, included in this
release are forward looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. These statements are based upon
current expectations and are subject to a number of risks, uncertainties and
assumptions that could cause actual results to differ materially from those
described in the forward-looking statements. IRF assumes no obligation and
expressly disclaims any duty to update the information contained herein except
as required by law.



Below are the financial highlights of the Company, and that of the Company and
its subsidiaries (the 'Group'), for the 12 months ended 31 December 2006.


INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2006


THE GROUP THE COMPANY
Amounts presented in € '000 Note 01/01 - 31/12 08/09 - 31/12/ 01/01 - 31/12/ 08/09 - 31/
/2006 2005 2006 12/2005

Interest and similar income 28,992 6 5,797 6
Interest and similar expenses (12,263) (1,329) (756) (1,329)
Net interest income 8 16,729 (1,323) 5,042 (1,323)
Fee and commission income 10,296 - - -
Fee and commission expense (2,430) - (375) -
Net fee and commission income 9 7,866 - (375) -
Income from insurance activities 7,284 - - -
Expense from insurance activities 506 - - -
Net Income from insurance 10 7,790 - - -
activities
Dividend income 11 1,626 - 15,095 -
Net result from financial 12 28,555 - - -
activities
Other operating income 13 1,299 - 897 -
Total Net Income 63,865 (1,323) 20,659 (1,323)

Staff costs 14 (8,233) - (155) -
Other operating expenses 15 (12,642) (72) (457) (72)
Depreciation 16 (878) - - -
Insurance claims 17 (4,968) - - -
Impairment losses 18 (558) - - -
Total operating expenses (27,280) (72) (612) (72)

Share of profits / (losses) of 240 - - -
associates

Profit before tax 36,825 (1,396) 20,047 (1,396)
Income tax expense 19 (2,916) - - -
Profit after tax 33,909 (1,396) 20,047 (1,396)

Attributable to:
Shareholders of the Company 23,571 (1,396) 20,047 (1,396)
Minority Interest 10,338 - - -
33,909 (1,396) 20,047 (1,396)
Earning per Share ( €/share )
- Basic 47 0.41 (0.05) 0.35 (0.05)
- Diluted 47 0.37 (0.05) 0.32 (0.05)


BALANCE SHEET


Amounts presented in € '000 THE GROUP THE COMPANY
Note 31/12/2006 31/12/2005 31/12/2006 31/12/2005
ASSETS
Cash and balances with Central Bank 20 37,397 - - -
Loans and advances to financial 21 181,885 2,206 3,880 2,206
institutions
Restricted cash held in Trust 22 - 210,294 - 210,294
Trading Portfolio and other financial 23 264,174 - - -
assets at fair value through Profit &
Loss
Derivative financial instruments 24 2,611 - - -
Loans and advances to customers 25 941,214 - - -
Insurance Assets 26 18,060 - - -
Investment Portfolio 27 37,977 - - -
Investments in Subsidiaries 28 - - 126,687 -
Investments in Associates 29 4,604 - - -
Property, plant and equipment 30 33,402 - - -
Investment Property 30 50 - - -
Non current assets held for sale 31 64 - - -
Goodwill and other intangible assets 32 186,216 - - -
Deferred Tax Assets 33 3,200 - - -
Other Assets 34 34,885 5 88,516 5
TOTAL ASSETS 1,745,739 212,506 219,082 212,506

EQUITY AND LIABILITIES
Due to financial institutions 35 90,897 - - -
Due to Customers 36 1,042,157 - - -
Derivative financial instruments 24 6,319 - - -
Issued Debt Securities 37 1,500 - - -
Compound financial instrument 38 - 203,426 - 203,426
Provisions for insurance contracts 39 34,093 - - -
Retirement benefit obligations 40 1,228 - - -
Current income tax liabilities 41 1,349 - - -
Other liabilities 42 21,445 170 185 170
Total Liabilities 1,198,987 203,596 185 203,596

Shareholders equity
Share Capital 43 71 71 71 71
Share Premium 43 200,174 10,234 200,174 10,234
Revaluation Reserve 44 (2) - - -
Other reserves 44 16,156 - - -
Retained Earnings / (losses) 44 22,208 (1,396) 18,652 (1,396)
Total equity attributable to 238,607 8,910 218,897 8,910
shareholders' of the Company
Minority Interest 308,145 - - -
Total equity 546,752 8,910 218,897 8,910

TOTAL LIABILITIES AND EQUITY 1,745,739 212,506 219,082 212,506


CONSOLIDATED STATEMENT OF CHANGES IN EQUITY


Attributable to shareholders of the Company Minority
Amounts presented in € '000 Note Share Share Revaluation Other Retained Total Interest Total
Capital Premium Reserve Reserves Earnings /
(losses)

Opening balance as at 8th September - - - - - - - -
2005
Net result for the period 08/09-31/ - - - - (1,396) (1,396) - (1,396)
12/2005
Total profit /(loss) recognised for - - - - (1,396) (1,396) - (1,396)
the financial year
Issue of common stock to initial 14 - - - - 14 - 14
shareholders
Issue of shares on offering, net of 57 10,234 - - - 10,291 - 10,291
offering costs
71 10,234 - - - 10,305 - 10,305
Balance as at 31st December 2005 71 10,234 - - (1,396) 8,910 - 8,910


Opening balance as at 1st January 71 10,234 - - (1,396) 8,910 - 8,910
2006
Net result for the year 01/01-31/12 - - - - 23,571 23,571 10,338 33,909
/2006
Available for sale instruments:
- Valuation gains /(losses) taken - - 1,740 - - 1,740 (9) 1,731
to equity
- Transferred to Profit & Loss on - - (1,742) - - (1,742) - (1,742)
sale
Exchange Differences on translating - - - 2 - 2 9 11
foreign operations
Total profit /(loss) recognised for - - (2) 2 23,571 23,571 10,337 33,909
the financial year
Decrease in Share Capital due to 43 (0.54) 0.54 - - - (0) - (0)
the cancelled shares
Conversion of Compound Financial 43 - 189,940 - - - 189,940 - 189,940
Instruments to Common Shares
(after the acquisition of PROTON)
Acquisition (absorption) of OMEGA - - - 16,153 - 16,153 297,677 313,831
BANK by PROTON BANK
Purchase of Treasury Shares of - - - - (322) (322)(1,275) (1,597)
PROTON BANK
Sale of Treasury Shares of PROTON - - - - 355 355 1,405 1,760
BANK
(1) 189,941 - 16,153 33 206,126 297,808 503,934
Balance as at 31st December 2006 71 200,174 (2) 16,156 22,208 238,607 308,145 46,752




STATEMENT OF CHANGES IN EQUITY (THE COMPANY)


Attributable to shareholders of the Company
Amounts presented in € '000 Note Share Share Premium Retained Total
Capital Earnings /
(losses)

Opening balance as at 8th September 2005 - - - -
Net results for the period 08/09-31/12/2005 - - (1,396) (1,396)
Total profit /(loss) recognised for the financial - - (1,396) (1,396)
year
Issue of common stock to initial shareholders 14 - - 14
Issue of shares on offering, net of offering 57 10,234 - 10,291
costs
71 10,234 10,305
Balance as at 31st December 2005 71 10,234 (1,396) 8,910

Opening balance as at 1st January 2006 71 10,234 (1,396) 8,910
Net results for the period - - 20,047 20,047
Total profit /(loss) recognised for the financial - - 20,047 20,047
year
Share Capital return to Shareholders due to 43 (0.54) 0.54 - -
cancelled shares
Conversion of Compound Financial Instruments to 43 - 189,940 - 189,940
Common Shares (after the acquisition of PROTON)
(0.54) 189,941 20,047 209,987

Balance as at 31st December 2006 71 200,174 18,652 218,897



CASH FLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2006


THE GROUP THE COMPANY
Amounts presented in € '000 Note 2006 2005 2006 2005
Cash flows from operating activities
Profits before tax 36,825 (1,396) 20,047 (1,396)
Adjustments for:
Depreciation 878 - - -
Profit /(Loss) from investment activities (16,149) - - -
Provision for employee benefit plan 94 - - -
Impairment loss on investment and loans 558 - - -
Share of profit /loss from associates (240) - - -
Profit /(loss) from disposal of fixed (2) - - -
assets
Interest and other non cash income / (1,562) 1,328 (1,562) 1,328
expenses
Dividends Received from subsidiaries - - (15,095) -
Cash flows from operating activities 20,402 (67) 3,390 (67)
before changes in working capital
Changes in working capital
Trading portfolio (72,346) - - -
Cash reserves held in Central Bank (4,196) - - -
Loans and advances to customers 26,748 - - -
Insurance Receivables 3,455 - - -
Reinsurance Receivables 302 - - -
Derivatives 1,789 - - -
Other Assets 38,941 (5) (73,415) (5)
Due to financial institutions 14,926 - - -
Due to customers 92,088 - - -
Provisions for insurance contracts (1,243) - - -
Other Liabilities (145,587) 170 61 170
Cash flows from operating activities (24,720) 97 (69,964) 97
before payment of income tax
Income tax paid (3,048) - - -
Net cash flows from operating activities (27,768) 97 (69,964) 97

Investing activities
Additions /Disposals of investment 9,727 - - -
securities
Purchase of tangible and intangible assets (1,081) - - -
Acquisition of subsidiaries and associates 46.3 22,106 - (126,687) -
Proceeds from sale of property, plant & 61 - - -
equipment & intangible assets
Non current assets held for sale (64) - - -
Release of cash placed on Trust 201,266 (209,493) 201,266 (209,493)
Net cash flow from investing activities 232,014 (209,493) 74,580 (209,493)

Financing activities
Gross proceeds from initial public - 228,538 - 228,538
offering
Payment of costs of initial public - (16,950) - (16,950)
offering
Issuance of common shares - 14 - 14
Amount Repayable to Shareholders of 43 (1,915) - (1,915) -
Negative Vote
Sales of treasury shares 406 - - -
Proceeds from other borrowed funds 75,000 237 75,000 237
Repayments of other borrowed funds (75,000) (237) (75,000) (237)
Net cash flow from financing activities (1,509) 211,602 (1,915) 211,602

Net increase / decrease in cash and cash 202,738 2,206 2,701 2,206
equivalents
Cash and cash equivalents at the beginning 2,206 - 2,206 -
of the financial year
Effect of exchange rate fluctuations on (1,028) - (1,028) -
cash held
Cash and cash equivalents at the end of 45 203,917 2,206 3,880 2,206
the financial year


BOARD OF DIRECTORS

Name Position
Angeliki Frangou Chairman, Non - Executive Director
Sheldon Goldman Deputy Chairman
Loukas Valetopoulos Chief Executive Officer, Director
Alexander Meraclis Secretary of the Company
John Karakadas Non - Executive Director



Changes in the Board of Directors


• On July 6th 2006, Andreas Vgenopoulos Deputy Chairman and Company Secretary resigned and at the same
date Sheldon Goldman was appointed as Deputy Chairman and Alexander Meraclis as Secretary of the
Company.

• On September 29th 2006, George Kintis Chief Executive Officer and Director of the Company resigned
and Loukas Valetopoulos was appointed as Director and as Chief Executive Officer of the Company.

• On January 25th 2007, Dennis Malamatinas Director resigned from the Board of IRF.



STATEMENT OF DIRECTORS' RESPONSIBILITIES IN RESPECT OF THE ANNUAL ACCOUNTS



The Directors are responsible for preparing annual accounts and consolidated
annual accounts for each financial year which present fairly the financial
position and the performance of the Company and that of the Group (ref. Note 5)
in accordance with applicable law and regulations.



They have elected to prepare the financial statements and consolidated financial
statements in accordance with the IFRS as adopted by the EU.



In preparing these annual accounts, the Directors:


• select suitable accounting policies and then apply them consistently;
• make judgments and estimates that are reasonable and prudent;
• state whether they have been prepared in accordance with the IFRS as adopted by EU and;
• prepare the annual accounts on the going concern basis unless it is inappropriate to presume that the
Group will continue in business.



The Directors are responsible for keeping proper accounting records that
disclose with reasonable accuracy at any time the financial position of the
Company and that of the Group and enable them to ensure that their annual
accounts comply with applicable laws and regulations. They have general
responsibility for taking such steps as are reasonably open to them to safeguard
the assets of the Group and the Company and to prevent and detect fraud and
other irregularities.


INDEPENDENT AUDITOR'S REPORT



To the Shareholders of IRF EUROPEAN FINANCE INVESTMENTS LIMITED



Report on the Financial Statements



We have audited the accompanying financial statements of 'IRF European Finance
Investments Limited' ('the Company') as well as the consolidated financial
statements of the Company and its subsidiaries ('the Group'), which comprise
(for both the Company and the Group), the balance sheet as at December 31, 2006,
and the income statement, statement of changes in equity and cash flow statement
for the year then ended, and a summary of significant accounting policies and
other explanatory notes.



Management's Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these
financial statements in accordance with International Financial Reporting
Standards that have been adopted by the European Union. This responsibility
includes designing, implementing and maintaining internal control relevant to
the preparation and fair presentation of financial statements that are free from
material misstatement, whether due to fraud or error; selecting and applying
appropriate accounting policies; and making accounting estimates that are
reasonable in the circumstances.



Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based
on our audit. We conducted our audit in accordance with the Greek Auditing
Standards, which are based on the International Standards on Auditing. Those
standards require that we comply with ethical requirements and plan and perform
the audit to obtain reasonable assurance whether the financial statements are
free from material misstatement.



An audit involves performing procedures to obtain audit evidence about the
amounts and disclosures in the financial statements. The procedures selected
depend on the auditor's judgment, including the assessment of the risks of
material misstatement of the financial statements, whether due to fraud or
error. In making those risk assessments, the auditor considers internal control
relevant to the entity's preparation and fair presentation of the financial
statements in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the entity's internal control. An audit also includes
evaluating the appropriateness of accounting policies used and the
reasonableness of accounting estimates made by management, as well as evaluating
the overall presentation of the financial statements.



We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.



Opinion

In our opinion, the abovementioned financial statements present fairly, in all
material respects, the financial position of the Company and that of the Group
as of December 31, 2006, and the financial performance and the cash flows of the
Company and those of the Group for the year then ended in accordance with
International Financial Reporting Standards that have been adopted by the
European Union.



Emphasis

Without qualifying our opinion, we draw attention to note 50.2 of the
consolidated financial statements. Tax returns of the Greek subsidiaries have
not been inspected by Greek Tax Authorities yet, and therefore can not be
considered as final. It is possible that additional taxes and penalties will be
imposed when Tax Authorities examine the relevant tax returns. The outcome of
the tax inspection could not be estimated at this stage and therefore no
relevant provision has been made.


Athens, March 16th, 2007 Grant Thornton

The Certified Chartered Accountant 44, Vas. Konstantinou Av.

Vassilis Kazas 116 35 Athens, Greece

SOEL Reg. No. 13281 SOEL Reg. No. 127




NOTES TO THE FINANCIAL STATEMENTS



1. GENERAL INFORMATION



Country of incorporation

IRF European Finance Investments Ltd. was incorporated on 8th September 2005
under the Bermuda Companies Act. The Company is listed on AIM, a market
operated by the London Stock Exchange plc. The Company's registered office is
at Canon's Court 22 Victoria Street, Hamilton HM12, Bermuda.



Principal Activities

The Group, through its subsidiaries, is engaged in the provision of banking,
financial and insurance services. IRF was formed as an investing company to
serve as a vehicle for the acquisition of an entity in the financial services
industry in Europe, with a primary focus on credit institutions and insurance
companies in Greece, Bulgaria, Romania and Turkey.



In June 2006, the Company acquired a controlling interest in PROTON BANK, a
Greek bank, listed on the Athens Stock Exchange. Proton Bank and its
subsidiaries operate in the sectors of retail, corporate and investment banking,
portfolio management, insurance and other financial services.



PROTON BANK is licensed by the Bank of Greece to operate as a financial
institution in Greece.



The Bank, which is established in Greece and is supervised by the Bank of
Greece, operates through a network of 21 branches. On 7th September 2006, the
Extraordinary General Meeting of Shareholders of PROTON BANK decided the merger
of the Bank with the companies OMEGA BANK and PROTON SECURITIES. The merger was
completed in September 2006.



2. BASIS OF FINANCIAL STATEMENT PREPARATION



2.1 Statement of Compliance



The financial statements of the Company and the Group for the year ended 31
December 2006 have been prepared according to the International Financial
Reporting standards (IFRS), which were published by the International Accounting
Standards Board (IASB) and in compliance with to their interpretations, which
have been published by the International Financial Reporting Interpretations
Committee (IFRIC) and have been adopted by the European Union.



The Group has adopted all International Accounting Standards, International
Financial Reporting Standards and their interpretations which apply to the
Group's activities.



2.2 Basis of Measurement



The financial Statements have been prepared on the historical cost basis except
for the following items which are measured at fair value:


• Financial assets and liabilities at fair value through Profit & Loss (including derivatives),
• Financial assets available for sale,
• Investment Properties, and,
• Land and Buildings.



2.3 Functional and Presentation Currency



The current financial statements are presented in Euro, which is the functional
currency of the Group. The functional currency is the currency of the primary
economic environment in which an entity operates and is normally the one in
which it primarily generates and expends cash. Management used its judgment to
determine the functional currency that most faithfully represents the economic
effects of the underlying transactions, events and conditions.



As part of this approach, management considers various factors stated in IAS 21.
Priority is given to factors such as the currency that mainly influences costs
and sales. This currency is mainly Euro since the Group is and will be engaged
in a business combination in Europe. The Company has also issued financial
instruments in US$. However, according to par. 12 of IAS 21, this factor is not
given priority.



All amounts are presented in thousand Euro unless mentioned otherwise. It is
essential to mention that due to rounding, numbers presented throughout the
condensed separate and consolidated financial statements, may not add up
precisely to the totals provided in the financial statements, the same applies
to percentages.



2.4 Comparative Figures



The Group's financial statements for the year ended December 31st, 2006 are its
first consolidated financial statements. Consolidated balance sheet,
Consolidated Income statement and Consolidated Cash flow Statement for the year
2006 include the Company's as well as its subsidiaries' items, while the
relevant statements for the year 2005 refer only to the Company. Furthermore,
Consolidated and Separate Income Statement for the year 2005 covers the
four-month period from the incorporation of the Company (8th September 2005)
until the year end (31st December 2005), while Income Statement of 2006 covers
the whole twelve-month period.



Thereby, the balance sheet, income statement and cash flow of the year for the
Company and the Group are not comparable with the respective statements of the
prior year.



2.5 Use of Estimates



The preparation of the financial statements requires management to make
estimates, judgements and assumptions that affect the application of accounting
policies and the reporting amounts of assets, liabilities, income and expenses.



Assumptions and estimates are reviewed on an ongoing basis and are revised based
on experience and other factors. Revisions of the accounting estimated are
recognised in the period in which estimates are revised and in any future
periods affected. Assumptions and estimates include expectations on future
event and outcomes that are considered as reasonable given the current
conditions. Actual results may differ from these estimates.



Significant areas of estimates uncertainty and items that are significantly
affected by judgements in applying accounting policies are presented in
paragraph 4.



2.6 Adoption of new and revised IFRS



In the current year, the Group adopted all new and revised International
Accounting Standards (IAS) and IFRS, which are relevant to its operations and
applicable for annual accounting periods commencing from 1st January, 2006. The
adoption of the new and amended standards and interpretations did not have a
material effect on the Company's and the Group's financial statements:


• IAS 39 (Amendment): The Fair Value Option
• IAS 39 and IFRS 4 (Amendment): Financial Guarantee Contracts
• IAS 19 (Amendment): Employee Benefits



With this amendment, which is compulsory for the financial years commencing as
of 01/01/2006, an additional method is introduced for the recognition of
actuarial gains or losses. Furthermore, it imposes, in some instances,
additional requirements for recognition of benefit programmes in which multiple
employers participate. Lastly, it imposes additional disclosures. The Group
did not alter its accounting policy for recognition of actuarial gains and
losses, nor did it participate in multiple employer programmes. Therefore, the
adoption of the amended standard affects only the structure and extent of the
disclosures provided. This amendment introduces the option of an alternative
recognition approach to actuarial gains and losses. It also adds new
recognition and disclosure requirements for multiemployer plans. The Group did
not change the accounting policy adopted for recognition of actuarial gains and
losses.


• IAS 21 (Amendment): Net Investment in a Foreign Operation
• IAS 39 (Amendment): Cash flow Hedge Accounting of Forecast Intragroup Transactions
• IFRIC 4: Determining whether an Arrangement contains a Lease



The amended standards below as well as the new interpretations require
compulsory application for the financial year presented, but do not have any
effect on the Group's financial statements as they are not relevant to its
activities:


• IFRS 1 (Amendment): First-time Adoption of International Financial Reporting Standards
• IFRS 6 (Amendment): Exploration for and Evaluation of Mineral Resources
• IFRIC 5: Rights to Interests arising from Decommissioning, Restoration and
Environmental Rehabilitation Funds
• IFRIC 6 Liabilities arising from Participating in a Specific Market - Waste
Electrical and electronic Equipment



2.7 New Standards and Interpretations



On the date of approval of these consolidated financial statements, the
following accounting standards have been issued but are not applicable in the
preparation of these consolidated financial statements:


(a) IFRS 7, Financial Instruments: Disclosures and IAS 1 (Revised) Presentation of Financial Statements -
Capital Disclosures (effective from 1st January, 2007):



IFRS 7 introduces new disclosures to improve the information about financial
instruments. It requires the disclosure of qualitative and quantitative
information about exposure to risks arising from financial instruments,
including specified minimum disclosures about credit risk, liquidity risk and
market risk, including sensitivity analysis to market risk. It replaces IAS 30
Disclosures in the Financial Statements of Banks and similar Financial
Institutions, and disclosure requirements in IAS 32 Financial Instruments:
Disclosure and Presentation. The amendment to IAS 1 introduces disclosures
about the level of an entity's capital and how it manages capital. The Group
assessed the impact of IFRS 7 and the amendment to IAS 1 and the additional
disclosures required. The Group will apply IFRS 7 and the amendment to IAS 1
from 1 January, 2007.


(b) IFRS 8 Operating Segments (effective from 1st January 2009):



IFRS 8 replaces IAS 14 'Reporting Financial Information by Segment'. The new
IFRS requires a management approach to information presentation regarding the
different operational segments of the Group. The information disclosed is the
information that management used in assessing the efficiency of each segment as
well as the way financial resources are distributed to each segment. This
information will probably differ from the information used in preparing the
balance sheet and income statement. Lastly, explanations should be provided on
the base of preparation of business segments reporting as well as
reconciliations with the financial statement accounts. The Group is studying
the consequences of IFRS 8 on the quality of disclosures provided as well as the
probability of its prior application.


(c) IFRIC 7, Applying the Restatement Approach under IAS 29 Financial Reporting in Hyperinflationary
Economies (effective for annual periods beginning on 1st March 2006):



This Interpretation is not applicable to the Group's operations.


(d) IFRIC 8, Scope of IFRS 2 (effective for annual periods beginning on 1st May 2006):



The adoption of this interpretation will not affect the Group's financial
statements.


(e) IFRIC 9, Reassessment of Embedded Derivatives (effective for annual periods beginning on 1st June 2006):



The Group assesses whether an embedded derivative needs to be separated from the
host contract and accounted for as a derivative when the Group first becomes a
party to the contract. According to this Interpretation, subsequent
reassessment is prohibited unless there is a change in the terms of the
contract. The Group applies this Interpretation from 1st January, 2007.


(f) IFRIC 10, Interim Financial Reporting and Impairment (effective for annual periods beginning on 1st
November 2006):



This Interpretation requires an entity not to reverse an impairment loss
recognised in a previous interim period in respect of goodwill or an investment
in either an equity instrument or a financial asset carried at cost. The Group
intends to apply this Interpretation from 1st January, 2007.


(g) IFRIC 11, Group and Treasury Share Transactions (effective for annual periods beginning on 1st March
2007):



IFRIC 11 refers to various issues relating to IFRS 2 and in particular to
share-based payment arrangements involving an entity's own equity instruments
and share-based payment arrangements involving equity instruments of the parent.
The Group intends to apply this Interpretation from 1st January, 2008.


(h) IFRIC 12, Service Concession Arrangements (effective for annual periods beginning on 1st January
2008):



The specific interpretation is not applicable to the Group's activities.



3. SUMMARY OF IMPORTANT ACCOUNTING POLICIES



3.1 Consolidation



Subsidiaries: Subsidiary are entities controlled by the Company. Control exists
when the Company has the power to govern the financial and operating policies of
an entity so as to obtain benefits from its activities. Control is presumed to
exist if the Company has ownership, directly of indirectly, over more than half
of the voting rights. The Group has also adopted a policy to consider as a
subsidiary an entity over which the Company is in the position to have effective
control, even though it has the ownership of less than half of the voting
rights. The Group has developed several criteria in order to determine whether
it has the 'de facto' control over the entity, including the actual
representation of the Company in the Board of Directors and the management of
the subsidiary and the fact that there is no realistic possibility that all the
other shareholders of the subsidiary will be organised and take control over the
entity.



Subsidiaries are fully consolidated using the purchase method from the date on
which control commences until the date that control ceases. The acquisition
cost of a subsidiary is measured at the fair value of the assets given, the
shares issued and the liabilities undertaken on the date of the exchange, plus
any other cost directly attributable to the acquisition. Identifiable assets
acquired, liabilities and contingent liabilities assumed in a business
combination are measured at their fair values on the acquisition date. The
excess between the cost of acquisition and the fair value of the net assets
acquired is recorded as goodwill. If the cost of acquisition is less than the
fair value of the net assets of the subsidiary acquired, the difference is
recognised directly in the income statement.



Intra-group transactions, balances and unrealized gains on transactions between
Group companies are eliminated. Unrealised losses are also eliminated unless
the transaction provides evidence of impairment of the asset transferred. All
Group subsidiaries follow the same accounting policies as those adopted by the
Group.



Associates: Associates are entities over which the Group has significant
influence but not control. Significant influence is presumed to exist if the
Group holds between 20% and 50% of the voting rights of another company.
Investments in associates are initially recognised at acquisition cost and
subsequently are accounted under the equity method. At the each balance sheet
date, investments carrying amount is increased by the Group's proportion in the
associate's changes in equity and decreases by the amount of dividends received
from the associate. The Group's share in the associate's profits or losses,
after the acquisition date, is recognised in the Income Statement whereas, the
Group's share in changes in reserves, is recognised directly in equity accounts.



In case when the Group's participation in the associate's losses is equal or
exceeds its cost of participation, inclusive of any doubtful debts, the Group
does not account for any further losses, except if it has covered all
liabilities or has made payments on behalf of the associate as well as those
arising in the context of the shareholding.

3.2 Foreign Currency


(i) Foreign Operations:



The assets and liabilities of foreign operations, including goodwill and fair
value adjustments due to business combinations, are translated into Euro at
exchange rates applicable on the balance sheet date. The income and expenses
are translated into Euro at exchange rate at the dates of transactions or, if it
is impracticable, based on the average exchange rates during the reporting
period. Any differences arising from the translation of the assets,
liabilities, income and expenses are recognised into 'Other reserves' within
equity.


(ii) Foreign Currency Transactions



Foreign currency transactions are translated into the respective functional
currency of the Group entities at the exchange rates at the dates of
transactions. Monetary asset and liability denominated in foreign currencies at
the reporting date are retranslated into the functional currency at the exchange
rate at that date. The non-monetary assets denominated in foreign currencies
that are measured at fair value are retranslated to the functional currency at
the exchange rate at the date that the fair value was determined. Foreign
currency differences arising on the execution of foreign currency transactions
and on the retranslation of monetary assets and liabilities are recognised in
profit or loss.



3.3 Interest income and expense



Interest income and expense are recognised on an accrual basis in the income
statement for all interest bearing assets and liabilities, based on the
effective interest method. Interest income and expense include the amortisation
of any discount or premium, transaction costs or other differences between the
initial cost of an interest bearing financial asset and the amount to be
received or paid at maturity using the effective interest rate method.



The effective interest rate is the rate that exactly discounts any estimated
future payment or receipt through the expected life of a financial instrument
(or until the next date of interest reset), to the carrying amount of the
financial instrument, including any fees or transaction costs incurred.



3.4 Fee and commissions income



Fees and commissions are generally recognised on an accrual basis when the
relevant services have been provided. Commission and fees arising from
negotiating, or participating in the negotiation of, a transaction for a third
party are recognised on completion of the underlying transaction. Portfolio
management fees and other advisory and service fees are recognised in the income
statement according the applicable service contract, usually on a
time-apportionate basis.



3.5 Dividend Income



Dividend income is recognised in the income statement when the right to receive
payment is established.



3.6 Financial instruments



A financial instrument is any contract that gives rise to a financial asset of
one entity and a financial liability or equity instrument of another entity.



3.6.1 Initial Recognition



Financial assets and liabilities are recognised at the trade date which is the
date when the Group becomes a part to the contractual provision of the
instruments. The financial assets and liabilities are initially measured at
fair value plus, in the case of a financial asset or financial liability not at
fair value through profit or loss, transaction costs that are directly
attributable to the acquisition or issue of the financial asset or financial
liability.



3.6.2 Classification and Measurement of Financial Assets



Management determines the classification of its investments at initial
recognition. Financial assets are classified into the following categories:


i) Financial Assets and Liabilities at Fair Value through Profit & Loss



This category has two sub-categories: financial assets held for trading and
those designated at fair value through profit or loss at inception. A financial
asset is classified in the held for trading category if acquired principally for
the purpose of generating a profit from short-term fluctuations in price.
Derivative financial instruments are also categorised as held for trading unless
they are designated as accounting hedges in which case hedge accounting is
applied. Financial assets designated as at fair value through profit or loss at
inception are those that are managed and their performance is evaluated on a
fair value basis, in accordance with a documented investment strategy.
Information about these financial assets is provided internally on a fair value
basis to key management personnel.


ii) Loans and Receivables



These include non-derivative financial assets with fixed or determinable
payments that are not quoted in an active market and which the Group does not
indent to sell in the short-term. They arise when the Group provides money,
goods or services directly to a debtor with no intention of trading the
receivable. Loans and receivables are measured at amortised cost using the
effective interest method.


iii) Held to maturity investments



Held-to-maturity financial assets are non-derivative financial assets with fixed
or determinable payments and fixed maturities that the management has the
positive intention and ability to hold to maturity. When the Group to sell
other than an insignificant amount of held-to-maturity assets, then he entire
category tainted and reclassified as available-for-sale.


iv) Available for sale investment



Available-for-sale investments are those intended to be held for an indefinite
period of time, which may be sold in response to needs for liquidity or changes
in interest rates, exchange rates or equity prices.



Purchases and sales of financial assets at fair value through profit or loss,
held-to-maturity, and available-for-sale are recognised at trade date - the date
on which the Group commits to purchase or sell the asset. Loans are recognised
when cash is advanced to the borrowers.



Financial assets are initially recognised at fair value plus transaction costs
for all financial assets not carried at fair value through profit or loss.
Financial assets are derecognised when the rights to receive cash flows from the
financial assets have expired or where the Group has transferred substantially
all risks and rewards of ownership.



Available-for-sale financial assets and financial assets at fair value through
profit or loss are subsequently carried at fair value. Loans and receivables
and held-to-maturity investments are carried at amortised cost using the
effective interest method.



3.6.3 Off setting



Financial assets and liabilities are offset and the net amount is presented in
the Balance sheet when there is a legally enforceable right to offset the
recognised amounts and there is an intention to settle on a net basis, or
realise the asset and settle the liability simultaneously.



Income and expenses are offset only when permitted by the accounting standards,
or for gains and losses arising from a group of similar transactions.

3.6.4 Fair value measurement



For the measurement of assets and liabilities at fair value, the Group uses
current market prices for every financial instrument. For those assets and
liabilities whose current market price was not available, the values that were
derived by applying valuation methods do not differ much from their carrying
values.



In particular:


• The listed securities are valued at fair value, which is determined according to the current market
price on the day of the balance sheet date
• Non listed securities are valued at cost of acquisition less any impairment.
• The fair value of derivative financial instruments that are not quoted in active markets is
determined by using valuation techniques. These models, even though dependent on measurable data,
may require estimates and judgments (i.e. volatility and credit risk). Those estimates are assessed
regulatory and when market conditions change.



3.6.5 Impairment of financial assets


(a) Assets carried at amortised cost



The Group assesses at each balance sheet date whether there is objective
evidence that a financial asset or group of financial assets is impaired.



A financial asset or a group of financial assets is impaired and impairment
losses are incurred if, and only if, there is objective evidence of impairment
as a result of one or more events that occurred after the initial recognition of
the asset (a 'loss event') and that loss event (or events) has an impact on the
estimated future cash flows of the financial asset or group of financial assets
that can be reliably estimated. Objective evidence that a financial asset or a
group of assets is impaired includes observable data that comes to the attention
of the Group about the following loss events:


(i) significant financial difficulty of the obligor;
(ii) a breach of contract, such as a default or delinquency in interest or principal payments;
(iii) the Group granting to the borrower, for economic or legal reasons relating to the
borrower's financial difficulty, a concession that the lender would not otherwise
consider;
(iv) it becoming probable that the borrower will enter bankruptcy or other financial
reorganisation; or
(v) observable data indicating that there is a measurable decrease in the estimated future
cash flows from a group of financial assets since the initial recognition of those
assets, although the decrease cannot yet be identified with the individual financial
assets in the group; including:
• adverse changes in the payment status of borrower in the group; or
• national or local economic conditions that correlate with defaults on the assets in the group.



The Group first assesses whether objective evidence of impairment exists
individually for financial assets that are individually significant, and
individually or collectively for financial assets that are not individually
significant. If the Group determines that no objective evidence of impairment
exists for an individually assessed financial asset, whether significant or not,
it includes the asset in a group of financial assets with similar credit risk
characteristics and collectively assesses them for impairment. Assets that are
individually assessed for impairment and for which an impairment loss is or
continues to be recognised are not included in a collective assessment of
impairment.



If there is objective evidence that an impairment loss on financial assets has
been incurred, the amount of loss is measured as the difference between the
carrying amount of the financial asset and the present value of estimated future
cash flows (excluding future credit losses that have not been incurred)
discounted at the financial asset's original effective interest rate. The
carrying amount of the asset is reduced through the use of an allowance account
and the amount of the loss is recognised in the income statement. If a loan or
a held-to-maturity investment has a variable interest rate, the discount rate
for measuring any impairment loss is the current effective interest rate
determined under the contract.

The calculation of the present value of the estimated future cash flows of a
collateralised loan reflects the cash flows that may result from foreclosure
less costs for obtaining and selling the collateral, whether or not foreclosure
is probable.



For the purposes of a collective evaluation of impairment, financial assets are
grouped on the basis of similar credit risk characteristics (i.e. on the basis
of the Group's grading process that considers asset type, industry, geographical
location, collateral type, past-due status and other relevant factors). Those
characteristics are relevant to the estimation of future cash flows for groups
of such assets by being indicative of the debtors' ability to pay all amounts
due according to the contractual terms of the assets being evaluated.



Future cash flows in a group of financial assets that are collectively evaluated
for impairment are estimated on the basis of the contractual cash flows of the
assets in the group and historical loss experience for assets with credit risk
characteristics similar to those in the group. Historical loss experience is
adjusted on the basis of current observable data to reflect the effects of
current conditions that did not affect the period on which the historical loss
experience is based and to remove the effect of conditions in the historical
period that do not exist currently.



The methodology and assumptions used of estimating future cash flows are
reviewed regularly by the Group to reduce any differences between loss estimates
and actual loss experience.



When a loan is uncollectible, it is written-off against the related provision
for loan impairment. Such loans are written off after all the necessary
procedures have been completed and the amount of the loss has been determined.
Subsequent recoveries of amounts previously written off decrease the amount of
the provision for loan impairment in the income statement.



If, in a subsequent period, the amount of the impairment loss decreases and the
decrease can be related objectively to an event occurring after the impairment
was recognised, the previously recognised impairment loss is reversed by
adjusting the allowance account. The amount of the reversal is recognised in
the income statement.


(b) Assets carried at fair value



The Group assesses at each balance sheet date whether there is objective
evidence that a financial asset or group of financial assets is impaired. In
the case of equity investments classified as available-for-sale, a significant
or prolonged decline in the fair value of the security below its cost is
considered in determining whether the asset is impaired. If any such evidence
exists for available-for-sale financial assets, the cumulative loss measured as
the difference between the acquisition cost and the current fair value, less any
impairment loss on that financial asset previously recognised in profit or loss
is removed from equity and recognised in the income statement. Impairment
losses recognised in the income statement on equity instruments are not reversed
through the income statement. If, in a subsequent period, the fair value of a
debt instrument classified as available-for-sale increases and the increase can
be objectively related to an event occurring after the impairment loss was
recognised in profit or loss, the impairment loss is reversed through the income
statement.



3.6.6 Derivative financial instruments and hedge accounting



Derivative financial instruments include forward exchange contracts, currency
and interest rate swaps, stock, currency and index futures, equity and currency
options and other derivative financial instruments. These are initially
recognised in the balance sheet at fair value, and subsequently are re-measured
at their fair value. Fair values are obtained from quoted market prices,
discounted cash flow models and other appropriate pricing models. All
derivatives are shown as financial assets at fair value through profit or loss
when fair value is positive and as financial liabilities when fair value is
negative.



The best evidence of the fair value of a derivative at initial recognition is
the transaction price (i.e. the fair value of the consideration given or
received).



Certain derivatives embedded in other financial instruments are treated as
separate derivatives when their economic characteristics and risks are not
closely related to those of the host contract and the host contracts is not
carried at fair value through profit or loss. These embedded derivatives are
measured at fair value with changes in fair value recognised in the income
statement.



The method of recognizing the resulting fair value gain or loss depends on
whether the derivative is designated as a hedging instrument, and if so, the
nature of the items being hedged. The Group designates certain derivatives as
either


(1) hedges of the fair value of recognised assets or liabilities or firm commitments (fair value hedge); or
(2) hedges of highly probable future cash flows attributable to a recognised asset or liability, or a
forecasted transaction (cash flow hedge). Hedge accounting is used for derivatives designated in this
way provided certain criteria are met.



The Group documents, at the inception of the transaction, the relationship
between hedging instruments and hedged items, as well as its risk management
objective and strategy for undertaking various hedge transactions. The Group
also documents its assessment, both at hedge inception and on an ongoing basis,
of whether the derivatives that are used in hedging transactions are highly
effective in offsetting changes in fair values or cash flows of hedged items.



Fair value hedge - For fair value hedges that meet the criteria for hedge
accounting, any profit or loss from the revaluation of the derivative at fair
value is recognised in the income statement. Any profit or loss of the hedged
instrument that is due to the hedged risk, adjusts the book value of the hedged
instrument and is recognised in the income statement, irrespective of the
classification of the financial instrument (e.g. available-for-sale financial
instruments).



If the hedge no longer meets the criteria for hedge accounting, the adjustment
to the carrying amount of a hedged item for which the effective interest method
is used is amortised to profit or loss over the period to maturity. The
adjustment to the carrying amount of a hedged equity security remains in
retained earnings until the disposal of the equity security.



Cash flow hedge - For cash flow hedges that meet the criteria of hedge
accounting, the part of the profit or loss from the derivative that is
designated as an active hedge is recognised directly in reserves and the part
that is designated as a non-active hedge is recognised in the income statement.
Any profit or loss that has been recognised directly into reserves is
transferred to the income statement in the period when the hedged transaction
affects the results.



Hedge accounting is discontinued when the hedging instrument expires or is sold,
is terminated or exercised, or when the hedge no longer meets the criteria for
hedge accounting. In case a hedged transaction is no longer expected to be
realized, the net accumulated profit or loss that has been recognised into the
reserves will be transferred to the income statement.



When derivative instruments are used for hedges of net investments in foreign
operations and the criteria for hedge accounting as set out by IAS 39 are met,
changes in the fair value of the hedging instrument are recognised in reserves.



3.6.7 Sale and repurchase agreements



The Group enters into agreements for purchases (sales) of investments and to
resell (repurchase) substantially identical investments at a certain date in the
future at a fixed price. Investments purchased, on condition that they will be
resold in the future (reverse repos), are not recognised in the balance sheet.
The amounts paid for purchase thereof are recognised as receivables from other
banks or customers. The difference between the sale and repurchase
consideration is recognised as interest income or expense during the repurchase
agreement period on an accrual basis.



Investments sold under repurchase agreements continue to be recognised in the
balance sheet and are measured in accordance with the accounting policy for
either assets held for trading or available-for-sale as appropriate. The
proceeds from the sale of the investments are reported as liabilities to either
banks or customers.




3.7 Insurance contracts



Through its insurance subsidiaries, the Group issues insurance contracts to
customers. Under these contracts the Group accepts significant insurance risk,
by agreeing to compensate the contract holder on the occurrence of a specified,
uncertain future event.



Since January 1st 2005 risk bearing contracts have been separated into insurance
contracts and financial contracts (IFRS 4). Group's insurance company issues
only insurance contracts covering property and casualty risks up to one year of
duration.



Property and casualty insurance contracts are separated in two categories:


a) Automobile third party liability. This category includes insurance contracts covering the risk of
automobile third party liability.
b) Non-automobile lines. This category includes insurance contracts covering the risk of fire and allied
lines, marine, general liability, legal protection, road assistance, etc.



Gross insurance premiums are recognised in the income statement over the period
covered by the related insurance contract. The insurance premiums are
recognised before the deduction of the relevant commissions.



Contract costs

Costs incurred for the initiation or the renewal of insurance contract, such as
brokers commission, are deferred and recognised as an asset. The relevant
amounts are amortised to Profit or Loss on a systematic basis over the
contractual term of the relevant insurance contract.



Liabilities from insurance contracts

Provisions for outstanding claims are revised at each balance sheet date and any
change is recognised in Profit or Loss to the extend that it refers to claim
covered by the Group, while any amount covered by reinsurance is recognised as
an asset (receivable) according to the reinsurance contracts.


(a) Unearned Premiums



Gross insurance premiums for general insurance business are recognised in the
income statement over the period covered by the related insurance contract. The
proportion of premiums which relates to periods of risk extending beyond the end
of the year is reported as unearned premium and is calculated on a daily basis.


(b) Provisions for claims incurred



Provisions for outstanding claims are based on the estimated ultimate cost of
all claims incurred but not settled at the balance sheet date, whether reported
or not, together with related claims handling costs. The amount of provisions
is estimated based on available information (adjuster reports, court decisions
etc.) at the balance sheet date.



Provisions for outstanding claims include reserves for incurred claims, which
are not reported to the company at the balance sheet date (I.B.N.R.).
Provisions for outstanding claims are reported at the balance sheet date
according to the requirements of regulatory authority legislation in force (law
400/1970). Specifically the automobile third party liability related claims
reserves, are checked according to the K3-3975/11.10.1999 decision of The
Ministry of Development, forming the greater possible reserve. I.B.N.R.
provisions are estimated based on the K3-3974/11.10.1999 decision of The
Ministry of Development.



Provisions for outstanding claims include reserves for incurred claims, which
are not reported to the company at the balance sheet date (I.B.N.R.).
Provisions for outstanding claims are reported at the balance sheet date
according to the requirements of regulatory authority legislation in force (law
400/1970). Specifically the automobile third party liability related claims
reserves, are checked according to the K3-3975/11.10.1999 decision of The
Ministry of Development, forming the greater possible reserve. I.B.N.R.
provisions are estimated based on the K3-3974/11.10.1999 decision of The
Ministry of Development.



The difference in non-life insurance contract liabilities (increase / decrease)
related to their previous assessment is transferred to the profit and loss
accounts as far as the company's own retention, while the rest is transferred to
the reinsurance accounts, according to the reinsurance agreements.



Reinsurance contracts

Reinsurance contracts are contracts entered into by the Group's insurance
subsidiaries, under which the Group is compensated for losses incurred under
insurance contracts issued by the Group's insurance subsidiaries. The
reinsurance contracts entered into by the Group's insurance subsidiaries, in
which the issuer of the insurance contract is another insurer (inwards
reinsurance) are included in reinsurance contracts.



Any amounts recovered from reinsures, that derive from the reinsurance contracts
of the Group, are recognised in assets. The amounts recovered from or to
reinsures are calculated based on the amounts related with the reinsurance
contracts and are based on the terms of each reinsurance contract. The
reinsurance liabilities are mainly premiums payable for reinsurance contracts
and are recognised as expenses on an accrual basis.



The Group evaluates its reinsurance assets for impairment. If there is
objective evidence that the reinsurance assets have incurred an impairment, the
Group reduces the carrying amount of the reinsurance asset to its recoverable
amount and recognizes the reduction in its value in the income statement.



Liability adequacy test

At each balance sheet date, liability adequacy tests are performed by the
Group's insurance companies to ensure the adequacy of liabilities that arise
from their operations. In performing these tests, current best estimates of
operational and investment income and operational and administration expenses
are based on past experience and financial results.



In case when the adequacy test reveals insufficient reserves, provisions are
adjusted accordingly. The liability is derecognised when the contract expires,
is discharged or is cancelled.



3.8 Cash and cash equivalents



For the purposes of the cash flow statement, cash and cash equivalents comprise
balances with less than three months maturity and include cash and non
restricted balances with Central Bank, government bonds and treasury bills and
amounts due from other banks and short-term government securities.



3.9 Intangible assets



The Group has included in this category goodwill from acquisitions and software
which is carried at amortised cost less accumulated amortisation.


(a) Goodwill and other intangible assets



Goodwill represents the excess of the cost of an acquisition over the fair value
of the net identifiable assets of the acquired undertaking at the date of
acquisition. Goodwill on acquisitions of subsidiaries is included in the
balance sheet in 'Goodwill and other intangible assets'.



Negative goodwill is recognised immediately as gain in the income statement.



Goodwill is tested for impairment annually and whenever there are indications of
impairment and is carried at cost less accumulated impairment losses. Goodwill
is allocated to cash-generating units for the purpose of impairment testing,
using the country of operation and economic segment as the allocation bases.

(b) Computer software



Costs that are directly associated with identifiable and unique computer
software products controlled by the Group and that will probably generate
economic benefits exceeding costs beyond one year are recognised as intangible
assets. Subsequently computer software are carried at cost less any accumulated
amortisation and any accumulated impairment losses. Expenditure, which enhances
or extends the performance of computer software programmes beyond their original
specifications is recognised as a capital improvement.



Costs associated with maintenance of computer software programmes are recognised
as an expense when incurred. Computer software costs are amortised using the
straight-line method over their useful lives, not exceeding a period of five
years. Amortisation commences when the computer software is available for use
and is included within 'Depreciation' in the income statement.



3.10 Property, plant and equipment



All plant and equipment are stated at historical cost less depreciation, except
land and buildings which are shown at fair value based on valuations by external
independent valuers, less subsequent depreciation for buildings.



Historical cost includes expenditure that is directly attributable to the
acquisition of the items. Expenditure for repairs and maintenance of property
and equipment is charged to the income statement of the year in which they were
incurred. Depreciation on buildings and other tangible assets are calculated
using the straight line method to allocate their cost or fair value to their
residual values over their estimated useful lives.



The carrying amount of impaired assets is written down to their recoverable
amounts. Gains and losses from disposals are recognised in the income
statement.



Land is not depreciated but is reviewed for impairment. Depreciation on other
property and equipment is calculated using the straight-line method to allocate
the cost or revalued amount of each asset less their residual values, over their
estimated useful lives. The estimated useful lives are as follows:


• Buildings: 50 years
• Lease hold improvements: depreciated on a straight-line basis over the term of the lease
• Computers: 3 years
• Vehicles: 5-7 years
• Furniture and equipment: 10 years
• The commercial value of leased assets is depreciated over the lease period



The assets' residual values and useful lives are reviewed, and adjusted if
appropriate, at each balance sheet date. When the carrying amount of an asset
is greater than its estimated recoverable amount, it is written down immediately
to its recoverable amount. The recoverable amount is the higher of the asset's
fair value less costs to sell and value in use.



Gains and losses on disposal of property and equipment are determined by
comparing proceeds to carrying amount and are included in the income statement.




3.11 Assets held for sale



This category includes fixed assets that will be sold within 12 months whose
carrying amount will be recovered principally through the sale transaction.
Assets held for sale, according to IFRS 5 'Non current assets held for sale and
discontinued operations', are valued at the lower of their carrying amount and
fair value less costs to sell. Assets held for sale are not depreciated but are
subject to impairment. Gains / losses from sale of these assets are recognised
in the income statement.




3.12 Leases



3.12.1 A Group company is a lessee


(a) Finance lease



The Group has not entered into a finance lease agreement in the capacity of a
lessee.


(b) Operating leases:



Leases where the risks and rewards of ownership remain with the lessor are
classified as operating leases. Payments made under operating leases (net of
any incentives received by the lessor) are charged to the income statement on a
straight line basis over the period of the lease.



3.12.2 A Group company is a lessor


(a) Finance lease:



When assets are leased out under finance lease / hire purchase, the present
value of the lease payments is recognised as a receivable. Lease income and
hire purchase fees are recognised in the income statement in a systematic
manner, based on instalments receivable during the year so as to provide a
constant periodic rate using the net investment method.


(b) Operating leases:



Assets leased out under operating leases are carried on the Group's financial
statements and are depreciated over their useful economic lives. Payments
received under operating leases are recorded in the income statement on a
straight line basis.



3.13 Financial liabilities



Financial liabilities are treated as held for trading if:


a) acquired principally for the purpose of selling or repurchasing them in the near term
b) a derivative financial instrument (except for a designated and effective hedging instrument).



Financial liabilities are initially recognised at fair value. Subsequently any
changes in their fair value are recognised in the income statement.



The Group has classified in this category derivative financial instruments not
held and qualifying for hedging purposes.



Derivative financial liabilities that are part of a hedging relationship are
measured at fair value. Subsequently, any changes in their fair value are
subject to principles described in note 2.13. Liabilities not included in the
above categories are carried at amortised cost using the effective interest rate
method.



3.14 Share capital


(a) Share issue costs



Incremental costs directly attributable to the issue of new shares are deducted
from equity.


(b) Dividends on ordinary shares



The dividend distribution to ordinary shareholders is recognised in the period
in which the dividend is approved by the Company's shareholders. Dividend for
the year that is declared after the balance sheet date is disclosed in Note 48.

(c) Treasury Shares.



Where the Company or other members of the Group purchase the Company's equity
share capital, the consideration paid is deducted from total shareholders'
equity as treasury shares. Where such shares are subsequently sold or reissued,
any consideration received is included in shareholders' equity.



3.15 Fiduciary activities



Assets and income arising thereon together with related undertakings to return
such assets to customers are excluded from these financial statements where the
Group acts in a fiduciary capacity such as nominee, trustee or agent.



3.16 Provisions



Provisions are recognised when the Group has a present legal or constructive
obligation as a result of past events, when it is more likely than not that an
outflow of resources will be required to settle the obligation, and a reliable
estimate of the amount of the obligation can be made. If the effect is
material, provisions are determined by discounting the expected future cash
flows at a pre-tax rate that reflects current market assessments of the time
value of money.



Where the Group expects a provision to be reimbursed, the reimbursement is
recognised as a separate asset but only when the reimbursement is virtually
certain.



The Group recognises a provision for onerous contracts when the expected
benefits to be derived from a contract are less than the unavoidable costs of
meeting the obligations under the contract.



3.17 Employee benefits


(a) Defined contribution plans



A defined contribution plan is a plan under which the company and the employees
pay fixed contributions into a separate fund. The benefits provided to the
employees participating in defined contribution plans are based on the return of
the fund. Each fund is governed by specified regulations as agreed between the
two parties and in compliance with relevant statutory obligations. The
contributions of the Group to the defined contribution plans are charged to the
income statement in the year in which they arise.



The Group's personnel is insured for its main pension to publicly administered
pension insurance funds (i.e Social Security Foundation and other) depending on
their specialty. The contributions paid by the Group are included in 'Staff
costs'. The Group's personnel is also insured for medical care in multiemployer
funds. In these funds, there are no separate accounts for each company, hence
accounting for defined contribution is followed. Once the contribution has been
paid, the Group has no further payment obligations.


(b) Defined benefit plans



The Group operates defined contribution and benefit plans in Greece. Provisions
for employee retirement, such as compensation defined under Law 2112/20, are
determined actuarially using the projected unit credit method. A defined
benefit plan is a plan that defines an amount of lump sum or pension benefit to
be provided upon retirement which is determined by taking into account factors
such as years of service and employee salary. Retirement benefit costs relating
to the defined benefit plans and which are those included in staff costs are
assessed using the projected unit credit method. Under this method, the cost of
providing defined benefit pensions is charged to the income statement so as to
spread the regular cost over the service lives of employees in accordance with
the advice of professionally qualified actuaries who value the plan at the end
of each year.



The obligation for the defined benefit plans is measured at the present value of
the estimated future cash outflows using interest rates of government
securities, which have terms to maturity approximating the terms of the related
liability less the fair value of the plan assets.



Actuarial gains or losses which exceed 10% of the greater of the present value
of the Group's obligation and the fair value of the plan assets, are amortised
over the expected average remaining working lives of the participating
employees. Actuarial gains or losses below the 10% corridor are not recognised.


c) Share-based compensation



The Group rewards key management executives, according to their efficiency with
options on its own shares. At each balance sheet date, the Group revises its
estimates for the number of options that are expected to become exercisable.
The fair value of the employee services received in exchange for the grant of
the options is recognised as an expense (Staff costs) with a corresponding
increase in equity during the grand date and exercise date. The proceeds
received are credited to share capital and share premium when the options are
exercised.



3.18 Income Tax



Current tax liabilities and assets for the current and prior periods are
measured at the amount expected to be paid to or recovered from the taxation
authorities using the tax rates and laws that have been enacted or substantially
enacted by the balance sheet date.



Deferred tax is provided in full, using the liability method, on all temporary
differences arising between the tax bases of assets and liabilities and their
carrying amounts in the financial statements. Deferred tax is determined using
tax rates and laws that have been enacted or substantially enacted by the
balance sheet date and are expected to apply when the related deferred tax asset
is realised or the deferred tax liability is settled. The following temporary
differences are not provided for: goodwill not deductible for tax purposes, the
initial recognition of assets or liabilities that affect neither accounting nor
taxable differences.



Deferred tax assets are recognised to the extent that it is probable that future
taxable profit will be available against which the temporary differences can be
utilised.



In Greece submitted tax returns are not considered as final until tax
authorities audit the companies books and records, or until the statute of
limitation expires. In Greece the results reported to the tax authorities by an
entity are provisional and are subject to revision until the tax authorities
examine the books and records of the entity and the related tax returns are
accepted as final. Therefore, entities remain contingently liable for
additional taxes and penalties which may be assessed on such tax examination.
It is common practice in Greece for the tax authorities to audit an entity's
books and records and to disallow expenses arbitrarily and to assess additional
taxes.



3.19 Segment reporting



A segment is a distinguishable component of the Group that is engaged either in
providing products or services (business segment) or in providing products or
services within a particular environment (geographical segment), which is
subject to risks and rewards that are different from those of other segments.
Segment is analyzed in Note 7.






This information is provided by RNS
The company news service from the London Stock Exchange EUSWSEFD
IRF Finance Back
 back
IRF Finance
IRF Finance
IRF finance
IRF Finance
News & Events
11/1/2021
Statement re cancellation of admission
news separator
news gap
6/12/2020
Settlement Agreement (3 Dec 2020)
news separator
news gap
6/3/2020
Publication of 2018 Financial Statements and Notice of annual general meeting
news separator
news gap
8/3/2019
Publication of 2017 Financial Statements and Notice of annual general meeting
news separator
news gap
9/3/2018
Notice of annual general meeting
news separator
news gap
IRF Finance
read more news read more
IRF Finance
  Contact Links Sitemap