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A N N U A L R E P O R T 2 0 0 4 MICHANIKI’s first Financial Statement in 1975 TABLE OF CONTENTS Chairman of the Board of Directors - Statement page 4 Michaniki’s 30th Anniversary page 5 Michaniki Group page 15 Activities in Construction page 16 Construction Projects (photos) page 19 Real Estate Development & Services in Greece page 32 Real Estate Projects in Greece (photos) page 36 Real Estate Development & Services Abroad page 39 Real Estate Projects Abroad (photos) page 42 Energy page 47 Industrial Activities page 50 Industrial Plants (photos) page 54 Michaniki Group - Financial Highlights page 58 Michaniki S.A. - Financial Highlights page 62 Michaniki S.A. Shareholders page 65 Michaniki S.A. Investments page 65 Quality Assurance - Environment page 66 Organizational Chart page 67 Michaniki S.A. Board of Directors page 68 Michaniki S.A. Management page 69 Social Responsibility page 70 Michaniki S.A. Share Price Charts page 74 Dividend Policy page 75 Financial Statements 2004 Michaniki Group and Michaniki S.A. page 76 Subsidiaries (addresses) page 87 FROM THE CHAIRMAN OF THE BOARD OF DIRECTORS Dear Shareholders, On December 31, 2004 we celebrated Michaniki's 30th anniversary. From a small construction company based in Thessaloniki, Michaniki has gradually grown to become one of the largest contractors with activities not only in the construction sector but also in real estate development, energy production and manufacturing in Greece, Bulgaria, Ukraine and Russia. Michaniki's initial equity capital of 20.0 million drachmas (58,694 euros), has grown today to 137.5 million euros. In 1974 the total assets of the newly founded company were around 22.0 million drachmas (64,500 euros), while at the end of 2004 the Michaniki Group of Companies had total assets of 176.0 million euros and current assets amounting to 298.0 million euros. The current value of the Group's land and real estate assets is estimated today at around 220.0 million euros, when in 1974 it was barely 40,000 euros. Michaniki's workforce has significantly increased as well. There were less the 50 people who joined the company in its first steps in 1974, while today the Group has more than 1,250 employees in Greece and abroad. Over its 30 year history of operations Michaniki has participated in more than 120 major infrastructure projects and has made a significant contribution to the development of Greece and the strengthening of the economy. At a technical level, Michaniki has brought innovation and know-how, delivering some of the most complicated construction projects in the country. 2004 was a very important year for Michaniki as the company achieved a further expansion of its market share and a significant improvement of its financial results, with direct benefits for its shareholders and employees. A more specific picture of the consolidated and company results is as follows: Group Revenues (in € million) Group Profit before Tax (in € million) Company Revenues (in € million) Company Profit before Tax (in € million) Dividend per Share (in €) 2004 2003 Change% 152.66 152.12 +0.4% 19.09 16.72 +14,2% 107.61 109.53 -1.7% 15.35 12.22 +25.6% 0.12 0.10 +20.0% Prodromos S. Emfietzoglou 4 THIRTY YEARS MICHANIKI Y E A R S A copy of the Greek Government’s Gazette in 1974, referring to the official establishment of Michaniki S.A. 5 P. Emfietzoglou signs the contract for the Athens Airport in 1981 6 THIRTY YEARS MICHANIKI Y E A R S The group's involvement in Greece and abroad in construction activities for a number of years is highlighted by many infrastructure projects that stand out for their innovative techniques. The size and quality of the projects the company has undertaken in its 30-year history is well reflected by some of the most important infrastructure works in Greece such as the Ilarion Hydroelectric Project, the Hydro Power Intake Tunnel at Mesochora but also large-scale road works on the Egnatia Highway and PATHE, the Papageorgiou Institute Hospital in Thessaloniki, the Kavala Technical Schools Campus and the Olympic Village in Athens. MICHANIKI has brought innovation in the construction of bridges like Platanovrissi bridge at Drama, Krystallopigi at Thesprotia and Votonosio at Metsovo. MICHANIKI was the first construction group to introduce its own tunnel-boring machines (TBM) in the construction of tunnels in Greece, a methodology that was also used in the building of the Athens Metro subway system. Athens International Airport In 1981 MICHANIKI undertook the first landscaping and earthmoving works for the new international airport of Athens. When building of the airport began, MICHANIKI undertook the project of leveling 7 THIRTY YEARS MICHANIKI a nearby hill to enable the safe landing and take-off of aircrafts. At a later stage it also built parts of the runways and taxiways and aircraft parking facilities. Kavala Technical Schools Campus In 1983 MICHANIKI undertook the construction of the Technical Schools Campus of Kavala, northern Greece, a project that involved significant earth and rock moving works to level the land for the construction of the complex of buildings. 8 THIRTY YEARS MICHANIKI Y E A R S Aliakmon River Diversion Tunnel Construction began in 1990. The project involved one of the largest in diameter (13 metres) diversion tunnels in Greece, rerouting the Aliakmon river's waters towards the Ilarion dam. 9 THIRTY YEARS MICHANIKI Hydro Power Intake Tunnel at Mesochora The project began in 1992. The first Hydro Power Intake Tnnel in Greece that was constructed by a Tunnel Boring Machine, applying the relevant methodology. The 8 kilometre tunnel has a diameter of 6.5 metres and was designed to divert water from the Mesochora man made lake to the hydroelectric plant for the production of electricity. 10 THIRTY YEARS MICHANIKI Y E A R S Platanovrissi Bridge at Nestos Construction of the bridge began in 1990 above the river Nestos at Drama, northeastern Greece. The bridge is 60 metres high and 244 metres long. Platanovrissi was the first bridge in Greece that was completed using the cantilever construction bridge builder system. 11 THIRTY YEARS MICHANIKI Papageorgiou Hospital in Thessaloniki The construction on one of the largest building complexes in Greece started in 1993. The Papageorgiou Institute Hospital in Thessaloniki is today one of the largest and most state-of-the-art medical institutions with modern facilities for training of medical and nursing personnel as well as medical research. 12 THIRTY YEARS MICHANIKI Y E A R S Egnatia Highway: Kristallopigi Bridge In 1998 MICHANIKI undertook the construction of the Kristallopigi bridge at the IgoumenitsaIoannina section of the Egnatia Highway, northwestern Greece. It is one of the longest bridges in Greece and the longest along Egnatia Highway. The southern section of the bridge is 858 metres long in a continuous curve with 16 openings. Its northern section is 638 metres long with 12 openings. MICHANIKI completed the construction of the bridge using its own made movable scaffolding system. 13 THIRTY YEARS MICHANIKI Egnatia Highway: Roadworks for the section: Anthochori - Metsovo In 1999 MICHANIKI undertook the construction of the Anthochori tunnel and Votonosio bridge, a challenging project due to the morphology of the land, in northwestern Greece. The bridge features an opening of 230 metres the second largest in Greece. Ita has two independent section one of which is 490 metres long while the second is 477.5 metres long. 14 MICHANIKI GROUP OF COMPANIES Y E A R S THOLOS SOC I E T E A NO NYM E 100 % 100 % 100 % 100 % 95,7 % 100 % 37,83 % 100 % 77,07 % 98,62 % The Company will continue to widen its presence in the three following sectors: construction projects, energy related projects and real estate development. As regards activities abroad, MICHANIKI has focused its attention in the rapidly developing eastern European countries in order to take advantage of the important opportunities for real estate development that can contribute to increased earnings and surplus values. Michaniki has established its presence and is expanding its activities in Bulgaria, Ukraine and Russia. MICHANIKI Group of Companies main activities are: I. Construction II. Real Estate Development & Services III. Energy IV. Industrial Activities 15 16 I. CONSTRUCTION Y E A R S THOLOS SOC I E T E A NO NYM E During 2004 MICHANIKI focused on the timely delivery of major construction projects for the Athens Olympic Games. Athens organized fine Games and MICHANIKI is proud to have participated in some of the most important infrastructure projects that were used to facilitate the Olympic Games in Athens. The list of these projects in which the company participated follows: ■ Olympic Village Construction valued at 23.8 million € ■ Olympic Village Construction valued at 27.4 million € ■ Construction of Vari-Koropi Highway valued at 5.9 million € ■ Construction of Faliro Bay Waterfront valued at 9.7 million € ■ Road works around the Olympic Sports Center valued at 11.1 million € ■ Basketball-Handball and Fencing Facilities valued at 38.2 million € Besides the Olympic projects MICHANIKI participated, during 2004, in the construction of several other infrastructure projects around the country, like: ■ Construction of Isthmus Canal Railway Bridge valued at 8.3 million € ■ Energy Production works at Polyfyto, Kozani valued at 14.6 million € ■ Mesochora Road Tunnel, Bridge of N. Pefki valued at 19.4 million € ■ Anti-spin Asphalt Carpets for "PATHE" Highway valued at 14.6 million € ■ Flood Prevention Works for Vari-Koropi (through THOLOS S.A.) valued at 4.3 million € ■ Egnatia Highway– Section Anthochori-Metsovo Junction valued at 59.0 million € ■ Egnatia Highway - Section Lefkopetra-Veroia-Kouloura valued at 8.3 million € ■ Rehab of free areas in Olympic Village valued at 3.7 million € Moreover, MICHANIKI increased the percentage of private works that is undertaking. The following are construction projects that took in 2004: ■ Construction of shopping center in Pylaia valued at 26.9 million € ■ Lamda Olympia Village-Construction of Buildings valued at 7.6 million € 17 I. CONSTRUCTION So far during 2005, MICHANIKI has already undertaken or is awaiting the final approval for the following contracts for public and private construction projects: A. Public Project ■ PATHE Highway-Part: Skarfia-Lamia-Raches valued at 41.7 million € ■ IONIA ODOS: Detour of Agrinio valued at 31.2 million € ■ Completion of Sikia Dam valued at 96.4 million € ■ Construction of a road traffic junction in Pylaia valued at 2.1 million € ■ Architectural and E/M works in Pylaia valued at 14.0 million € B. Private Projects MICHANIKI is awaiting the final approval from the pertinent authorities in order to sign the contract for the following public projects: ■ Patras detour and Covering of Diakoniaris river Budgeted at 60.0 million € ■ Second Phase of Arta-Philippiada Detour Budgeted at 32.5 million € ■ Extension of the Port of Tinos island (through THOLOS S.A.) Budgeted at 12.9 million € 18 I. CONSTRUCTION Y E A R S The Olympic Village 19 I. CONSTRUCTION The Olympic Main Press Center 20 I. CONSTRUCTION Y E A R S The Faliro Bay Waterfront Roadworks around the Athens Olympic Sports Center 21 I. CONSTRUCTION Basketball-Handball and Fencing Facilities at Hellinikon Complex 22 I. CONSTRUCTION Y E A R S The Isthmus Canal Railway Bridge 23 I. CONSTRUCTION Energy Production works at Polyfyto, Kozani 24 I. CONSTRUCTION Y E A R S Energy Production works, Mesochora Road Tunnel, Bridge of Nea Pefki 25 I. CONSTRUCTION Anti-spin Asphalt Carpets for "PATHE" North-South Highway 26 I. CONSTRUCTION Y E A R S Egnatia Highway: Section Anthochori - Metsovo Junction 27 I. CONSTRUCTION Egnatia Highway: Section Lefkopetra-Veroia-Kouloura Lamda Olympia Village: Office Buildings in Marousi, Attica 28 I. CONSTRUCTION Y E A R S Construction of shopping and entertainment centre "Mediterranean Cosmos" in Pylaia, Thessaloniki 29 I. CONSTRUCTION NEW CONSTRUCTION CONTRACTS SIGNED DURING 2002 - 2004 (in € thousand)* AMOUNT OF CONTRACT PROJECT DESCRIPTION EGNATIA HIGHWAY– Section: ANTHOCHORI– METSOVO JUNCTION 24,795 OLYMPIC PRESS CENTRE (MPC), (J/V MICHANIKI SHARE IS 50%) 27,550 ROADWORKS VARI-KOROPI ROAD (J/V MICHANIKI SHARE IS 50%) 5,947 PORT WORKS AT FALIRO BAY (Olympic Beach Volley) (J/V MICHANIKI SHARE IS 28.33%) 9,736 ROADWORKS AROUND MAIN OLYMPIC STADIUM (J/V 20% SHARE) RAILWAY BRIDGE AND ROADWORKS AT ISTHMUS CANAL 11,112 8,364 RESIDENTIAL COMPLEX IN EKALI 19,500 BASKETBALL-HANDBALL-FENCING FACILITES at HELLINIKON OLYMPIC COMPLEX (J/V 50% SHARE) 38,242 WATER SUPPLY PIPELINE FOR THE HYDROELECTRIC PLANTS OF KARDIA & AG. DIMITRIOS 14,605 CONSTRUCTION OF BUILDINGS – CIVIL ENGINEER WORKS 7,654 CONSTRUCTION OF ANTI-SPIN CARPETS IN PATHE HIGHWAY 14,662 CONSTRUCTION OF ROAD TUNNEL MESOCHORA-DAM, BRIDGE NEAS PEFKIS 19,348 CONSTRUCTION OF SHOPPING COMPLEX IN PYLAIA THESSALONIKI 26,976 RESHAPING OF FREE AREAS OF OLYMPIC VILLAGE 2,281 SEWAGE WORKS AT THE CITY OF PATRAS 1,377 PARKING FACILITIES FOR THE UNIVERSITY OF PATRAS 359 2nd KALLIPOLIS HIGH SCHOOL AT PIRAEUS 1,461 ELECTRICITY NETWORK FOR CORFU & IOANNINA 5,560 EGNATIA ODOS: PREPARATION WORKS FOR SECTION: VALIANO-CHRISOUPOLI TOTAL * 7,900 OLYMPIC VILLAGE, SECTION B-600 HOMES (J/V MICHANIKI SHARE IS 33.3%) 631 248,060 Any differences due to rounding off 30 I. CONSTRUCTION Y E A R S Breakdown of Turnover in Construction Activity 2004 42.5% Buildings 42.5% Roadworks & Bridges 3.5% Hydraulic & Port Works 4.5% Construction of Metal Structures 1.5% Revenues from Parking Facilities 1.0% Electrical Power Production 4.5% Other Services Projects Undertaken by Michaniki S.A. 48% Public Works 43% Private Projects 9% Other Revenues 31 The atrium of "Athina" shopping centre in Odessa, Ukraine 32 II. REAL ESTATE DEVELOPMENT & SERVICES Y E A R S MICHANIKI is seeking to diversify away from conventional public sector construction works through new activities in real estate development, both in Greece and abroad. Michaniki Group has shown an increasing interest in real estate, especially taking into account current and future trends in public project tenders in Greece and Europe that lead away from public projects to the Built Operate Transfer (BOT) concession model. During 2004 MICHANIKI Group of Companies pursued investments in real estate through its subsidiaries in Bulgaria, Ukraine and, most recently, in Russia Residential Complex in Ekali In a land lot of about 28,000 sq.m. MICHANIKI is building "Dryades" a 55 two-floor luxury home complex. The project’s aim is to meet high-quality requirements in a pine forested area of the Athens suburb of Ekali. The area has been divided into integral plots, each featuring two or three homes. The built space will 33 II. REAL ESTATE DEVELOPMENT & SERVICES cover 25 percent of the area with the remaining 75 percent landscaped with cobbled stone terraces, tile covered patios, and gardens among beautiful trees. Each of the homes, which range from 270 to 440 sq.m., includes basements with playrooms, parking garage and auxiliary space, a ground floor with living rooms, a second floor with three or four bedrooms and two or three bathrooms and an attic. Maroussi Building Complex On company-owned land MICHANIKI constructed three buildings which have a combined space of 20,402 square meters. More specifically: ■ The first building houses the company’s headquarters. ■ The second was sold to Insurance Companies, Generali Hellas and Generali Life, in 1994 for 9.2 million euros. ■ The third building was sold to Piraeus Leasing (former ETBA Leasing) for 10.3 million euros and leased back for a 10-year term with a buy back option. Annual revenues from this building amounted to 438.2 thousand euros, during 2004. Komotini Building Located at the centre of Komotini, northern Greece, the 1,300 square meters building (402 sq.m. land property) provides office space and multi-usage area. The building houses the Michaniki’s regional office, while the remaining floors have been rented to various providers of services. During 2004, the annual rental income amounted to 74.5 thousand euros. Corfu Real Estate MICHANIKI REAL ESTATE S.A. has purchased land in the island of Corfu (131,000 square meters) participating with a 66.6% stake in a joint venture with Getem S.A. The company is currently conducting feasibility studies. Mykonos Real Estate Continuing its engagement in real estate development, in 2001 Michaniki Real Estate S.A. purchased land property totaling 26,500 square meters in the popular island of Mykonos, and it is examining the optimal exploitation of the area. 34 II. REAL ESTATE DEVELOPMENT & SERVICES Y E A R S Parking Facility at Kotzia Square The parking facility at Kotzia Square (central Athens) is considered to be one of the first projects in Greece that has been undertaken applying the 'Build-Operate-Transfer' (BOT) method. The parking facility with three-underground levels accommodates 691 cars and the city of Athens has granted operation and management to Michaniki S.A. until to year 2026. In 2004 revenues amounted to 1.4 million euros while pre-tax profit amounted to 667.4 thousand euros. Piraeus and Western Attica Public Cemetery This is the second BOT self-financed project that was assigned to a consortium led by MICHANIKI S.A. with a 97% stake. The project involved in total 330 hectares of land surface and was delivered in February 1998. The cemetery has a full and modern infrastructure network, complying with European Union directives. Moreover, it includes two orthodox churches. According to the initial agreement, MICHANIKI S.A. has the right to sell all the family graves and operate the parking facilities and the refreshments room for a six-year period and other shops for a fifteen-year period. Based on a provision of the contract, the eight municipalities that make up the Piraeus and Western Attica association are obliged to end the operation of the independent cemeteries that already exist and make exclusive use of this particular cemetery. In 2004 MICHANIKI S.A. sold another 211 graves and retains the right to sell an additional number of 6,345 graves. Rhodes Casino MICHANIKI S.A., after taking into consideration the fact that it was not exercising management of the Rhodes Casino, the company sold during 2004 its 36.96% stake for 5.0 million euros. 35 II. REAL ESTATE DEVELOPMENT & SERVICES Model Housing Complex in Ekali, Athens 36 II. REAL ESTATE DEVELOPMENT & SERVICES Y E A R S Building Complex in Maroussi, Athens 37 II. REAL ESTATE DEVELOPMENT & SERVICES Office Building in Komotini, northern Greece Kotzia Square Parking Facility, central Athens Piraeus and Western Attica Public Cemetery 38 II. REAL ESTATE DEVELOPMENT & SERVICES Y E A R S Charigratscko Sosse, Sofia MICHANIKI S.A. through its subsidiary MICHANIKI BULGARIA, has purchased land (17,600 sq.m.) on the motorway that links downtown Sofia with the airport. For this specific land plot, the architectural plans have been completed and they include the construction of five buildings of total surface area of 33,000 sq.m. with offices, stores and apartments. Botanical Garden, Sofia The company has already purchased a land plot of 32,000 sq.m. in the area of the Botanic Garden of Sofia and intends to acquire more land increasing it to around 40,000 sq.m. MICHANIKI intends to develop this specific land plot and construct a residential complex in an area where real estates prices are rising rapidly. MICHANIKI's investment activities in Ukraine, through its subsidiary MICHANIKI UKRAINE, have significantly strengthened the group's financial results, contributing a continuous flow of funds from real estate development in one of the fastest-growing markets in Eastern Europe. Commercial Centre "Athina, Odessa "Athina" Shopping Centre, MICHANIKI's second multi-storey building in Odessa, was officially inaugurated in September 2004, and since then is considered a modern landmark of the city and one of the most impressive buildings in the country. The shopping complex, totalling 30,000 square meters, located at the "Greek Square" of Odessa, consists of seven floors and two underground levels and is decorated with sculptures and artefacts from modern Greek artists. 39 II. REAL ESTATE DEVELOPMENT & SERVICES The sale of stores located in the first underground level, the ground floor and the three first floors, along with office space at the upper floors has exceeded 65% of the shopping centre's total available space. The Mayor of Odessa honoured Michaniki's chairman Mr. Prodromos Emfietzoglou with the City's highest award for his contributions to the local economy and culture. Office and Apartments Building, Greek Square, Odessa During 2004 MICHANIKI sold all available space of the 9,954 sq.m office and apartment building located in the Greek Square in Odessa. This was the first major real estate investment in Ukraine Office Building and Cultural Centre, Marioupolis MICHANIKI is currently in the process of delivering two buildings in Marioupolis, Ukraine. The first is of 2,756 sq. m. surface area with offices which are to be leased or sold. The second building is a community and cultural centre of 1,137 sq.m. Multiple use Building Project in Darnitsa, Kiev In the eastern suburb of Kiev, an ambitious building project is under way. In a land plot of 8,000 sq. m. attractively situated on the eastern shore of Dnieper river, "Darnitsa" will be located on a circular road junction with uninterrupted views to the lavish green of the opposite park. The building complex of 53,400 sq. m. surface will include 198 apartments, stores for shopping, restaurants, clubs, cinemas and other areas for recreational activities. Boritchev Tok, Kiev In the area of Boritsev Tok, construction of a luxurious building of 5,937 square meters for commercial use is planned. Tourgenitscka, Kiev In the Ukrainian capital's area of Tourgenitscka, MICHANIKI plans to construct another office building of a 2,750 sq. m. surface area, consisting of eight floors. “Delfinia" Recreational Urban Complex, Odessa The "Delfinia" Recreational and Park Development Complex in Odessa, Ukraine is located at the city's harbor in the Black Sea. 40 II. REAL ESTATE DEVELOPMENT & SERVICES Y E A R S Delfinia is an ambitious and challenging project of multiple uses and of a total surface area of around 200,000 sq.m. The project will incorporate existing installations while providing high standards for future housing expectations. Commercial Centre, Obolon, Kiev According to the results of a public tender in Ukraine, MICHANIKI will build and then operate a Commercial Centre in the area of Obolon in Kiev. In a land plot of 18,500 sq. m. the company will construct the Centre totaling 30,000 sq. m. of available space, consisting of three different levels. The Commercial Centre is located on a major traffic intersection of the city, and is accommodated by a metro station. In 2004 MICHANIKI established a subsidiary company in the Russian market, MICHANIKI RUSSIA ltd, headquartered in Moscow. MICHANIKI pursues its involvement and participation in public construction projects in Russia, real estate development, as well the promotion and sale of industrial products of its affiliated companies in Greece (marble products, steel pipes, wood products etc). The company is close to striking a deal and beginning operations in Russia: A. To develop a land plot located at the historic part of the Russian capital where it intends to construct buildings for residential and commercial purposes totalling 48,000 sq. m. of surface space. B. To develop a land plot strategically located at the main Lenigratscky Avenue that connects the centre of Moscow with the city's airport. Michaniki plans to build office buildings of approximately 50,000 sq. m. 41 II. REAL ESTATE DEVELOPMENT & SERVICES Charigratscko Sosse, Sofia 42 II. REAL ESTATE DEVELOPMENT & SERVICES Y E A R S Commercial Centre "Athina”, Odessa 43 II. REAL ESTATE DEVELOPMENT & SERVICES Office and Apartments Building, Greek Square, Odessa Office Building and Cultural Centre, Marioupolis 44 II. REAL ESTATE DEVELOPMENT & SERVICES Y E A R S Multiple use Building Project in Darnitsa, Kiev 45 II. REAL ESTATE DEVELOPMENT & SERVICES "Delfinia" Recreational Urban Complex, Odessa 46 Energy Production 47 III. ENERGY Hydroelectric Station at Theodoriana (4 MW) MICHANIKI has completed the first private hydroelectric project in Greece. The company delivered a 4 MW hydroelectric plant at east Tzoumerka. The commercial supply of electrical power started in December 2003 for a ten year period. The investment amounted to 7.6 million euros and the estimated revenues from the sale of electrical power are over one million euros annually. For the year 2004 the revenues from the Electricity sold amounted to 1.03 million euros, while the pre-tax profit stood at 593 thousand euros. Hydroelectric Station at Agios Nikolaos, Arta (93 MW) The second major step of the Company in the energy sector is a hydroelectric plant of multiple power capacity. This is the project of Agios Nikolaos Hydroelectric Plant in Arta Region of Western Greece. The Agios Nikolaos project with a power capacity of 93 MW will have an annual electricity output of 300 GWh. It is budgeted at 147.0 million euros. According to the current price of KW, the estimated revenues of the Company from selling electrical power are forecasted at 20 million euros annually. From a technical point of view the Agios Nikolaos plant will have an 86 m high dam spanning 426 m with the water level between 215 and 240 m. The plant will also feature two diversion tunnels of 266 m. and 297 m. long with a diameter of 8.5 m each, a power tunnel from the dam to the Hydroelectric Station’s main building 7,200 m long and 6.0 m wide. The Hydroelectric Station’s main building will have a power output of 90 MW and will be located northwest of Pteri village. Another small hydroelectric station of 3.0 MW will be installed in the bottom outlet of the project. 48 III. ENERGY Y E A R S Currently, MICHANIKI is expecting the final approval regarding environmental compliance by the Ministries of Environment, Physical Planning and Public Works, Development and the Ministry of Agricultural Development. That is the final step for the realization of the project. Plans for the Agios Nikolaos Dam at Arta 49 50 IV. INDUSTRIAL FACILITIES Y E A R S Greece is in the middle of a post-industrial era and many old economy industrial plants face serious problems due to lack of competitiveness. For these reasons Michaniki’s management is being implementing a strategy of cutting down to absolutely necessary activities in its industrial plants realizing cost savings and streamlining all its industrial activities. MICHANIKI has the following Industrial Plants: The company’s financial results in fiscal year 2004 showed a marginal decrease in sales to 19.5 million euros from 19.8 million euros the year before. Total Revenues were negatively affected by a marked drop in prices for processed wood in the domestic market due to intensified competition from less expensive imports of timber byproducts. According to the net financial results, losses were accelerated to 3.7 million euros due to continued reduction of the workforce and increased depreciation costs. Earnings before interest, tax, depreciation and amortization (EBITDA) stood at 0.3 million in 2004, versus 1.64 million in 2003. Balkan Export’s total liabilities was significantly decreased to 5.4 million euros, from 7.3 million in 2003, while the company maintains zero bank debt. Balkan Export SA expects to benefit after the restructuring of its operations with significant cost containment, coupled with an increase in sales and virtually no long term liabilities playing a role. 51 IV. INDUSTRIAL FACILITIES An adverse business climate internationally during 2004 had an impact on the company’s financial performance as a large portion of its output is addresses to the foreign markets. Exports were negatively affected by the euro/dollar exchange rate movements, particularly orders to the United States. As a percentage of total turnover, in the last two years exports fell to almost 3% from 30% in 2002 because of the downturn in international markets. In 2004 total revenues stood at 9.9 million euros from 11.2 million in 2003. Pre-tax profit were increased marginally to 0.66 million from 0.63 million the year before. Nevertheless, it is worth noting that in the particularly demanding U.S. market, characterized by the high quality of competing products, the company has gained a strong reputation for quality which resulted in a sustained demand for its products by U.S. consumers. Hellenic Pipe Works S.A. is one of the few pipe manufacturers with the right to use the global API (American Petroleum Institute) trademark for pipes of liquid and gas fuels and the unique manufacturer of small-diameter pipes. Furthermore the company pays particular attention to quality of products and services and has developed a Quality Assurance System in accordance with the international standard EN ISO9001. Additionally, Hellenic Pipe Works S.A. is certified by the European Union’s order: 97/23/EC for products under pressure. Marmara Kavalas S.A. is one of the oldest and most well-known Greek marble companies internationally. The primary activities of the company include quarrying, processing and sales of marble products in domestic and foreign markets. For the financial year 2004, the company’s turnover reached 3.5 million euros, while profits before tax reached 72.9 thousand euros. The company has significant export activities to Cyprus, Spain, Germany, Austria and Netherlands. 52 IV. INDUSTRIAL FACILITIES Y E A R S Moreover, it has penetrated and increased its share in the developing Balkan markets (Croatia, Serbia), Ukraine, United Arab Emirates, as well as Brazil. In 2004, company sales showed a significant increase compared to 2003. Productivity is constantly improving and management projects that the share of Marmara Kavalas products in foreign markets will further expand, thus having immediate beneficial effects for the financial performance of the company. MICHANIKI S.A. management has decided to terminate the activites of this company due to the unsatisfactory performance of the investment and is currently examining the prospect of selling of its assets. 53 IV. INDUSTRIAL FACILITIES Balkan Export S.A. 54 IV. INDUSTRIAL FACILITIES Y E A R S Hellenic Pipeworks S.A. 55 IV. INDUSTRIAL FACILITIES Marmara Kavalas S.A. 56 57 MICHANIKI GROUP - FINANCIAL HIGHLIGHTS GROUP FINANCIAL RESULTS 2002 - 2004 (amounts in € thousand)* 2002 2004 Turnover 90,337 105,170 118,137 Turnover from Joint Ventures 30,879 46,948 34,518 121,216 152,118 152,656 Minus: Cost of Construction1 66,862 80,733 92,854 Gross Profit from Turnover1 23,475 24,437 25,283 4,615 4,128 6,932 Operational Profit1 14,910 17,364 18,045 Profit before Tax and Depreciation 26,038 26,411 27,276 Profit before Depreciation 25,863 25,959 26,777 Pretax Profit 14,358 16,407 16,843 Profit before Tax and after Minorities 13,983 16,723 19,089 Profit after Tax and after Minorities 10,094 13,267 13,939 Total Turnover Net Profit from Joint Ventures * 2003 Differences due to rounding off. 1. Before Appreciation for the financial years 2002-2004. 58 MICHANIKI GROUP - FINANCIAL HIGHLIGHTS Y E A R S GROUP RESULTS 2002 - 2004 (in € thousand) 200 2002 2003 152,656 152,118 2004 121,216 150 100 13,939 13,267 10,094 19,089 16,723 13,983 16,843 16,407 14,358 50 0 Total Turnover Pretax Profit Profit before Tax and after Minorities 59 Profit after Tax and after Minorities MICHANIKI GROUP - FINANCIAL HIGHLIGHTS TURNOVER BREAKDOWN 70.5% MICHANIKI S.A. & MICHANIKI JOINT VENTURES 6.5% HELLENIC PIPE WORKS S.A. 12.5% BALKAN EXPORT S.A. 2.5% MARMARA KAVALAS S.A. 5.5% MICHANIKI UKRAINE 2.5% THOLOS S.A. & THOLOS JOINT VENTURES The chart does not include companies whose share in the consolidated turnover is less than 1% of the total turnover (Hellenic Wood Industry S.A., Michaniki Real Estate, Michaniki Bulgaria). GROUP BALANCE SHEETS 2002 - 2004 (amounts in € thousand)* 2002 2003 2004 24,050 22,301 18,200 ASSETS Undepreciated Installation Expenses Undepreciated Intangible Assets Undepreciated Tangible Assets Participation in Affiliated Companies Total Assets Total Current Assets Total Assets 7,911 3,180 3,038 142,079 148,415 161,607 19,371 19,797 11,087 169,853 171,923 176,209 215,887 224,112 246,725 413,965 421,879 445,814 369,209 364,792 374,841 LIABILITIES Equity Capital Provisions 401 253 132 Total Long-Term Liabilities 238 3,167 6,607 Total Short-Term Liabilities 43,795 53,418 63,575 Total Liabilities 44,034 56,585 70,183 413,965 421,879 445,814 4.77 3.93 4.03 Total Liabilities Book Value per Share (in €) * Differences due to rounding off. 60 MICHANIKI GROUP - FINANCIAL HIGHLIGHTS Y E A R S 2004 GROUP TOTAL LIABILITIES 2004 GROUP TOTAL ASSETS 37% Undepreciated Tangible Assets 1% Undepreciated Intangible Assets 4% Undepreciated Installation Expenses 3% Participation in Affiliated Companies 55% Total Current Assets 61 84% Equity Capital 16% Debt MICHANIKI S.A. - FINANCIAL HIGHLIGHTS FINANCIAL RESULTS MICHANIKI S.A. 2002 - 2004 (amounts in € thousand)* 2002 2004 Company Turnover 41,752 63,417 74,568 Turnover from Joint Ventures 29,494 46,119 33,043 71,246 109,536 107,611 33,511 50,190 59,248 Gross Profit from Company’s Turnover (1) 8,240 13,227 15,320 Net Profit after Tax from Joint Ventures 4,512 3,862 6,116 3,876 9,864 11,395 12,199 17,019 20,228 Profit before Tax and Depreciation 11,942 16,733 19,888 Profit before Tax 7,601 12,222 15,349 4,667 8,925 10,561 1,854 8,666 10,528 Total Turnover Minus: Cost of Construction (1) Operational Profit (1) Profit Before Interest, Depreciation and Tax Profit after Tax, Board Fees Profit after Tax, Board Fees and Tax from Previous Fiscal Years * 2003 Differences due to rounding off (1) Before Appreciation for the financial years 2002-2004. 62 MICHANIKI S.A. - FINANCIAL HIGHLIGHTS Y E A R S MICHANIKI FINANCIAL RESULTS 2002 - 2004 (in € thousand) 107,611 109,536 120 2002 2003 2004 80 71,246 100 60 10,528 1,854 8,666 15,349 12,222 7,601 20,228 17,019 12,199 3,876 9,864 20 11,395 40 0 Total Turnover Operational Profit Profit Before Interest, Depreciation and Tax 63 Profit before Tax Profit after Tax, Board Fees and Tax from Previous Fiscal Years MICHANIKI S.A. - FINANCIAL HIGHLIGHTS MICHANIKI S.A. BALANCE SHEET 2002 - 2004 (amounts in € thousand)* 2002 2003 2004 4,192 3,100 1,842 Total Fixed Assets 177,261 159,651 139,885 Total Current Assets 113,557 123,603 146,452 253 368 665 295,263 286,723 288,843 274,027 256,546 249,750 ASSETS Underpreciated Installation Expenses Memo Account Assets Total Assets LIABILITIES Equity Capital Provisions 65 68 69 Total Long-Term Liabilities 0 0 0 Total Short-Term Liabilities 21,171 30,109 38,736 Total Liabilities 21,171 30,109 38,736 0 0 0 295,263 286,723 288,843 3.54 2.76 2.69 Memo Account Liabilities Total Liabilities Book Value per Share (in €) * Differences due to rounding off. 2004 PARENT COMPANY TOTAL ASSETS 2004 PARENT COMPANY TOTAL LIABILITIES 49% Total Fixed Assets 87% Equity Capital 50% Total Current Assets 13% Debt 1% Underpreciated Installation Expenses 64 MICHANIKI S.A. SHAREHOLDERS Y E A R S Michaniki shareholders of common and preferred shares as of March 2005 are shown in the following pie-charts: SHAREHOLDERS OF COMMON SHARES 2004 SHAREHOLDERS OF PREFERRED SHARES 2004 30,35% Emfietzoglou Prodromos 10,02 BALKAN EXPORT 2,98% MICHANIKI S.A. 2,73% MICHANIKI S.A. 87% Investment Public 66,92% Investment Public The above charts depict only those shareholders owning at least 2% of the total amount of share capital for the common and the preferred shares. 2002-2004 MICHANIKI S.A. INVESTMENTS The company’s total investments during the last three fiscal years (2002-2004) is depicted in the following table: INVESTMENTS 2002 - 2004 32% Participations 21% Buildings 7% Transportation Equipment 2% Furniture and Other Equipment 1% Land 37% Technical Equipment 65 QUALITY ASSURANCE & ENVIRONMENT In order to achieve organizational optimization, operational efficiencies and quality improvement in the projects it delivers, MICHANIKI S.A. has developed a Quality Assurance System in accordance with the international standard EN ISO 0992:1994. The initial award of the qualification assurance was delivered in May 1998 and since then and following inspections the certificate remains valid up to date. Since September 2003, the company upgraded the qualification assurance system based on the EN ISO 9001:2000 standard, by the inclusion of design into the auditing process. The qualification assurance system has been authorized by the internationally recognized German Institute of Accreditation DEKRA-ITS. The present Certification (No.20900737/1) is valid until September 28, 2006. The Metal constructions sector of the company has begun the implementation of an Environmental Management system, which is in accordance with international standard EN ISO 14001:1996. The underlying philosophy and objective of the quality assurance system of MICHANIKI S.A. is to ensure quality in the construction projects it delivers and to comply with the conventional or other demands of its clients, the national and international standards. In order to effectively deal with environmental issues, the company takes extra efforts to ensure that projects under construction comply with European Union and Greek laws 66 ORGANIZATIONAL CHART Y E A R S MICHANIKI S.A. on average employed a staff of 912 in 2004, while at a group level employment reached 1.253 on average. 67 BOARD OF DIRECTORS OF MICHANIKI S.A. BOARD MEMBERS Prodromos S. Emfietzoglou Board Chairman General & Technical Manager Melina P. Emfietzoglou Managing Director Nikolaos I. Kampas Member - Legal Counsel Georgios I. Dimakis Member - New Projects Manager Eleftherios S. Triboulidis Member - Head of Project Bidding Apostolos N. Athanasopoulos Member - Chief Financial Officer Eleni G. Vozani Non Executive Member Georgios N. Kalinoglou Independent Non Executive Member Angelos A. Tsaklaganos Independent Non Executive Member 68 MICHANIKI S.A. MANAGEMENT Y E A R S Prodromos Emfietzoglou Christos Kikiantonis Board Chairman and General Technical Manager. Chief Accountant. He is a graduate of the University of Piraeus in Finance. He is a Civil Engineer with graduate studies in Germany. Theodore Iatridis Melina Emfietzoglou Internal Control. Managing Director, in charge of General Affairs and Public Relations. He is a graduate of the Industrial School of Thessaloniki. She is a graduate of Lemania School in Lausanne, Switzerland. Despoina Ioakeimidou Quality Assurance Manager. George Dimakis She is a Mechanical Engineer from the University of Stuttgart, Germany. Manager of New Projects. He is an Electrical and Mechanical Engineer, graduate of the Polytechnic school of Munich, Germany. Apostolos Athanasopulos Chief Financial Officer. He is a graduate of the American College in Athens in economics, and he is working on his executive MBA at Strathclyde University, Scotland. Dimitris Leontidis Project Manager. He is a Civil Engineer with graduate studies in the UK in Management & Implementation of Development Projects. Panagiotis Kostidis Equipment & Procurements Manager. He is a Mechanical Engineer (Msc), graduate from Iowa State University, U.S.A. He has also a BS in Physics from the Aristotelian University of Thessaloniki. 69 A view of the Emfietzoglou Collection at Anavrita, Amaroussion. 70 SOCIAL RESPONSIBILITY Y E A R S MICHANIKI supports social causes by contributing to the cultural, educational, social and economic development of several regional communities both in Greece and abroad. ■ MICHANIKI today has sponsored 24 regional villages in the Florina province (northern Greece) where construction projects along with cultural and social activities focus on improving the quality of life of the local communities, particularly the younger generation. ■ Similar activities are taking place in the Thrace region, in northern Greece. While promoting the region’s economic development, MICHANIKI is also addressing challenges faced by the minorities in Greece, like the Roma and Pomakoi (Bulgarian speaking Greeks). In this aim the company founded the Cultural-Athletic Center of Drosero in the city of Xanthi. ■ In order to preserve and promote the cultural heritage of the Greeks of southern Albania (Northern Epirus), MICHANIKI, in collaboration with the Defense ministry, founded a Cultural Center in Koritsa, Albania. This Center housed the Koritsa Greek Language Preparatory Center and the "Adelfotita" (brotherhood) social club. The aim of the Cultural Center is to establish channels of communication and enhance opportunities for cultural, athletic and educational activities. ■ MICHANIKI has also been responsive to hardship caused by natural disasters. A recent example was the donation of 40 homes in the municipality of Aharnon-Attica to relieve the pain caused by the deadly September 9, 1999 earthquake that hit Athens. ■ The company’s Chairman, Prodromos Emfietzoglou has shown keen interest in supporting cultural development and social causes in the region of Macedonia, Thrace as well as in other Greek communities abroad. ■ The Chairman’s concerns with regards to Greece’s demographic problem has resulted in specific actions to provide assistance for large families with more than three children, and the support of young couples especially in the remote areas of Greece. ■ Orthodoxy and Greece’s Christian heritage is another facet of Prodromos Emfietzoglou’s social contribution. His support of the convents of Agion Oros (Mount Athos) is reflected in the renovation of the Pantokrator Monastery, which serves as the library and conservatory of Byzantine icons, relics and artifacts, as well as the construction of a port at the Esfigmenou Monastery. ■ Moreover, he has contributed in the development of the Balkans through the settlement of problems of Eastern Europe, while he has represented the European Union in the cooperation meetings of the Union with Russia. It was Prodromos Emfietzoglou’s idea the creation of a North – South highway from Helsinki-St Petersburg-Moscow-Kiev-Bucurest to Alexandroupoli that was later adopted by the European Union as the Intereuropean path with the title: No IX. 71 SOCIAL RESPONSIBILITY ■ The group’s support of social causes extends beyond Greek borders. In the Ukraine, Michaniki has established a cultural center for Greek communities in Marioupolis. Similar support is offered to the Greek communities in Bulgaria and Moldova. ■ In 1994, Ecumenical Patriarch Bartholomaios honored Chairman Emfietzoglou for his devotion and social responsibility to Orthodoxy and Hellenism. ■ In 1995 the School of Law and Economics of the Aristotelian University in Thessaloniki presented Mr. Emfietzoglou with an honorary doctorate degree for his efforts and contribution to the Greek society and the economy. Dimitris Kalamaras: “Captain Kottas, Hero of the Strugle for Macedonia”, 1960-1965 Lucas Samaras: “Chair Transformation”, 1969-1970 Iason Molfessis: “Planet”, 1977 ■ In 1997 the Academy of Athens awarded Mr Emfietzoglou the Gold Medal for his national, social and cultural contribution. ■ In 1997, for the same reasons Prodromos Emfietzoglou was awarded the highest honor by Greek Orthodox Patriarch Diodoros of Jerusalem . ■ In 2001 Mr. Emfietzoglou was proclaimed an Honorary Doctor of the Department of Business Administration at Abertay Dundee University in Britain. 72 SOCIAL RESPONSIBILITY Y E A R S ■ The Center of European Studies "Ioannis Kapodistrias" has awarded Prodromos Emfietzoglou the golden metal "Ioannis Kapodistrias 2002" for the continuous promotion of culture through Education and Languages. ■ During 2004 the Mayor of Odessa, Ukraine, honoured Michaniki’s chairman Mr. Prodromos Emfietzoglou with the City’s highest award for his contributions to the local economy and culture. 73 SHARE PRICE CHARTS The price performance of the common shares of Michaniki, during 2004, compared with the General share Index of the Athens Stock Exchange, the Construction Index and trading volume is depicted in the following chart: MICHANIKI COMMON CONSTRUCTION INDEX 140 ATHENS GENERAL INDEX 4.0 120 3.5 100 3.0 2.5 80 2.0 60 1.5 40 1.0 20 0.5 2,500,000 2,500,000 2,000,000 2,000,000 VOLUME 1,500,000 1,500,000 1,000,000 1,000,000 500,000 2004 500,000 January February March April May June July August September October November December The performance of the preferred shares of Michaniki, during 2004, compared with the General Stock Index of the Athens Stock Exchange, the Construction Index and trading volume are shown in the following chart: MICHANIKI PREFERRED CONSTRUCTION INDEX 140 ATHENS GENERAL INDEX 120 3.0 2.5 100 2.0 80 1.5 60 1.0 40 0.5 20 450,000 450,000 350,000 350,000 VOLUME 250,000 250,000 150,000 150,000 50,000 2004 50,000 January February March April May June July 74 August September October November December DIVIDEND POLICY Y E A R S According to Greek Legislation the minimum yearly dividend paid out to the company’s shareholders cannot be less than 35% of the pre tax profits after subtracting the company’s encumbrances, reserves and corresponding taxes, nor less than 6% of the paid in share capital. The dividend to be paid out to shareholders must be the largest of the two amounts. Dividends are paid to the company’s shareholders within two months following the annual General Assembly, which approves the company’s financial statements. DIVIDEND PER SHARE (in euros)* 2002 Number of Shares Total Dividend 2003 2004 77,422,095 92,906,513 92,906,513 3,782,077.13 9,290,651.3 11,148,781.56 0.049 0.10 0.12 Dividend per Share* 8.05% DIVIDEND YIELD** 10 C.S. P. S. 6.09% 6.6% 8 2 1.97% 4 4.27% 3.67% 6 0 2002 2003 2004 * The dividend per share for fiscal year 2002 amounted to 0.034 euros for the common and 0.058 euros for the preferred share. ** According to the average closing price of shares in April in each respective year. 75 76 F I N A N C I A L S T A T E M E N T S 77 2 0 0 4 MICHANIKI GROUP OF COMPANIES CONSOLIDATED BALANCE SHEET DECEMBER 31st, 2004 - S.A. REG. No 8440/06/B/86/16 11th FISCAL YEAR (JANUARY 1st - DECEMBER 31st, 2004) - (AMOUNTS IN EUROS) ASSETS B. Current year end 2004 FROMATION EXPENSES 1. Formation & Start Up Expenses 3. Loan Interests during Construction Period of Fixed Assets 4. Other Installation Expenses Total Establishment Expenses C. FIXED ASSETS I. Intangible assets 1. R & D Expenses 3. Goodwill 5. Other Intangible Assets 5·. Consolidation Differences II. Tangible assets 1. Land 2. Quarries - Mines - Fields Plantations- Forestsi 3. Buildings & Technical Works 4. Machinery - Technical Installations & Equipment 5. Vehicles & Other Transportation Equipment 6. Furniture & Fixtures 7. Fixed Assets under Construction & Advances Total Tangible & Intangible Fixed Assets (CI + CII) III. Investments & other long term financial receivables 1. Investments in Affiliates 7. Other Long-term Receivables Depreciation Net Book value 26,065,415.18 136,008.28 21,447,942.37 ------------------------------------------47,649,365.83 ===================== 11,441,270.99 118,065.72 17,890,204.10 ------------------------------------------29,449,540.81 ===================== 14,624,144.19 17,942.56 3,557,738.27 ------------------------------------------18,199,825.02 ===================== 3,459,768.56 0.00 1,312,882.76 1,001,222.64 ------------------------------------------5,773,873.96 ===================== 919,495.75 0.00 815,438.34 1,001,222.64 ------------------------------------------2,736,156.73 ===================== 35,042,614.62 127,764.02 81,874,169.22 77,567,310.69 7,605,375.79 5,033,795.74 7,515,202.28 ------------------------------------------214,766,234.36 ===================== 220,540,108.32 ===================== Depreciation Net Book value 25,517,455.09 136,008.28 21,059,359.11 ------------------------------------------46,712,822.48 ===================== 8,976,358.23 100,123.14 15,335,138.48 ------------------------------------------24,411,619.85 ===================== 16,541,096.86 35,885.14 5,724,220.63 ------------------------------------------22,301,202.63 ===================== 2,540,272.81 0.00 497,444.42 0.00 ------------------------------------------3,037,717.23 ===================== 3,451,058.36 10,075,062.31 1,309,982.76 1,001,222.64 ------------------------------------------15,837,326.07 ===================== 861,614.73 10,075,062.31 719,325.17 1,001,222.64 ------------------------------------------12,657,224.85 ===================== 2,589,443.63 0.00 590,657.59 0.00 ------------------------------------------3,180,101.22 ===================== 0.00 35,042,614.62 31,961,878.95 0.00 31,961,878.95 0.00 18,850,472.43 127,764.02 63,023,696.79 153,320.82 68,976,833.96 0.00 16,890,987.19 153,320.82 52,085,846.77 27,641,052.69 4,238,366.33 2,428,990.86 0.00 ------------------------------------------53,158,882.31 ===================== 55,895,039.04 ===================== 49,926,258.00 3,367,009.46 2,604,804.88 7,515,204.28 ------------------------------------------161,607,352.05 ===================== 164,645,069.28 ===================== 77,263,238.90 7,599,572.26 4,860,799.77 5,936,597.40 ------------------------------------------196,752,242.06 ===================== 212,589,568.13 ===================== 25,349,741.16 3,904,494.60 2,191,859.70 0.00 ------------------------------------------48,337,082.65 ===================== 60,994,307.50 ===================== 51,913,497.74 3,695,077.66 2,668,940.07 5,936,597.40 ------------------------------------------148,415,159.41 ===================== 151,595,260.63 ===================== Total Fixed Assets (CI + CII + CIII) D. CURRENT ASSETS I. Inventory 1. Merchandise 2. Finished & Semi finished Products 3. Production in progress (Works under Construction) 4., Raw & auxiliary materials - Consumables Spare parts & packing materials 5. Advances for the purchase of inventories II. Receivables 1. Trade Receivables 2. Bills Receivable 3. Bills Receivable Overdue 3·. Cheques Receivable 3b. Cheques Receivable Overdue 4. Capital Receivable in the following fiscal year 5. Short-term receivables from affiliated companies ÂȯÂÈÚ‹ÛÂˆÓ 5·. Short-term receivables from executed construction projects 8. Escrow Accounts 10. Doubtful Receivables 11. Sundry Debtors 12. Prepayment & credit accounts III. Securities 1. Shares 2. Bonds 3. Other securities 4. Own Shares Less provisions for shares & securities devaluation IV. Cash & Banks 1. Cash 3. Time & checking's deposits Total Current Assets (DI+DII+DIII+DIV) E. Previous year end 2003 Acquisition Cost TRANSITORY ACCOUNTS 1. Deferred Expenses 2. Accrued Income 3. Other Interim Accounts TOTAL ASSETS (B+C+D+E) DEBIT MEMORANDUM ACCOUNTS 1. Third party assets - leases 2. Debit accounts guarantees and real securities 3. Reciprocal contract receivables 4. Other memorandum accounts 78 Acquisition Cost 11,086,578.71 476,628.39 ------------------------------------------11,563,207.10 ===================== 176,208,276.38 ===================== 19,796,733.50 531,292.10 ------------------------------------------20,328,025.60 ===================== 171,923,286.23 ===================== 1,177,632.04 42,433,591.35 14,763,724.44 819,859.44 36,204,695.91 9,270,060.41 6,176,417.31 2,036,101.20 ------------------------------------------66,587,466.34 ===================== 10,682,537.68 1,253,692.58 ------------------------------------------58,230,846.02 ===================== 21,723,328.80 531,522.03 903,650.30 23,873,609.91 2,074,928.41 0.00 35,698,831.04 26,300,664.67 4,108.58 5,163,798.96 9,612,239.81 3,775,931.67 ------------------------------------------129,662,614.18 ===================== 23,128,644.02 620,235.16 822,945.98 16,090,022.68 1,802,918.86 0.00 26,342,285.36 26,783,809.39 4,108.58 899,600.63 13,369,963.01 3,522,365.39 ------------------------------------------113,386,899.06 ===================== 13,159,968.57 7.34 556,469.60 4,793,473.70 0.00 ------------------------------------------18,509,919.21 ===================== 14,608,569.00 7.34 1,032,251.66 6,431,102.71 0.00 ------------------------------------------22,071,930.71 ===================== 169,733.40 31,795,026.84 ------------------------------------------31,964,760.24 ===================== 246,724,759.97 ===================== 905,902.96 29,516,040.82 ------------------------------------------30,421,943.78 ===================== 224,111,619.57 ===================== 2,769,498.88 1,662,919.17 248,455.50 ------------------------------------------4,680,873.55 ===================== 445,813,734.92 ===================== 1,627,082.60 1,663,002.55 252,860.76 ------------------------------------------3,542,945.91 ===================== 421,879,054.34 ===================== 12,557,995.79 78,510,941.86 116,635,875.04 8,456,225.80 ------------------------------------------216,161,038.49 ===================== 16,397,545.76 100,490,962.01 149,385,181.28 9,226,425.72 ------------------------------------------275,500,114.77 ===================== MICHANIKI GROUP OF COMPANIES LIABILITIES A. SHAREHOLDER’S EQUITY I. Share capital (Common Shares 66.937.526 Preferred Shares 25.968.987 of 1.48 € each) 1. Paid up Capital 2. Owed II. Share premium 1. Paid up Premium 2. Owed III. Revaluation reserves - Investment grants 1. Revaluation surplus arising from revaluation of investments and securities 2. Revaluation surplus arising from revaluation of tangible fixed assets 3. Tangible fixed assets investments grants IV. Capital reserves 1. Statutory Legal Reserves 3. Special Reserves 4. Extraordinary Reserves 5. Tax Free Reserves under special provision laws 5·. Tax Free Reserve from investments devaluation 6. Taxed Reserve for own shares 6·. ÿ‰È˜ ÌÂÙÔ¯¤˜ 7. Reserves from specially taxed revenues 8. Tax free profits of construction & technical companies 9. Surplus sector spin off L.1297/72 V. Retaining earnings Year Results carried forward profits Year Results carried forward losses Remaining Losses of past fiscal years VIII.Consolidation differences IX. Minority rights Total Shareholder's Equity (AI+AII+AIII+AIV+AV+AVIII+AIÃ) B. PROVISIONS FOR RISKS & EXPENSES 1. Provisions for personnel termination indemnities 2. Other provisions C. LIABILITIES I. Long-term liabilities 2. Long-Term Bank Loans 4. Long-Term Liabillities to affliated companies 8. Other Long-Term Liabilities II. Short-term liabilities 1. Trade Creditors 2. Bills Payable 2·. Cheques Payable 3. Short-term bank loans 4. Customer Advances 5. Taxes-duties Payable 6. Social Security (insurance-pension funds) 7. Long-Term Liabilities payable in the next fiscal year 8. Liabilities to affiliated companies 10. Dividends Payable 11. Sundry creditors Total Liabilities (CI + CII) D. TRANSITORY ACCOUNTS 1. Deferred Revenues 2. Accrued Expenses 3. Other Interim Accounts TOTAL LIABILITIES & SHAREHOLDER’S EQUITY (A+B+C+D) CREDIT MEMORANDUM ACCOUNTS 1. Third party assets - leases 2. Credit accounts guarantees and real securities 3. Reciprocal contract liabilities 4. Other memorandum accounts 79 Current year end 2004 Previous year end 2003 137,501,639.24 0.00 ------------------------------------------137,501,639.24 ===================== 137,501,639.24 0.00 ------------------------------------------137,501,639.24 ===================== 129,628,694.39 0.00 ------------------------------------------129,628,694.39 ===================== 129,628,694.39 0.00 ------------------------------------------129,628,694.39 ===================== 2,153,361.66 4,517,595.93 5,894,180.09 ------------------------------------------12,565,137.68 ===================== 2,153,361.66 4.64 6,143,415.58 ------------------------------------------8,296,781.88 ===================== 3,100,419.35 0.00 373,813.33 7,088,982.04 0.00 4,793,473.70 -498,254.65 995,032.65 848,714.45 10,591,495.68 ------------------------------------------27,293,676.55 ===================== 4,370,616.43 - 28,592.82 427,194.14 7,179,631.44 0.00 6,431,102.71 - 3,179,166.65 1,022,309.25 368,800.18 10,591,495.68 ------------------------------------------27,183,390.36 ===================== 19,539,754.12 -5,476,592.28 -2,194,249.91 ------------------------------------------11,868,911.93 ===================== -8,406,495.66 ===================== 64,389,658.88 ===================== 9,255,862.13 - 1,099,582.67 - 1,812,872.01 ------------------------------------------6,343,407.45 ===================== - 3,871,731.32 ===================== 59,710,192.26 ===================== 374,841,223.01 ===================== 364,792,374.26 ===================== 63,108.54 68,653.48 ------------------------------------------131,762.02 ===================== 63,108.54 190,048.27 ------------------------------------------253,156.81 ===================== 6,607,444.39 0.00 0.00 ------------------------------------------6,607,444.39 ===================== 3,167,064.00 0.00 0.00 ------------------------------------------3,167,064.00 ===================== 16,952,925.85 0.00 10,238,241.68 11,435,905.24 321,855.79 6,655,974.66 1,163,188.00 0.00 1,517.09 12,181,968.11 4,623,560.81 ------------------------------------------63,575,137.23 ===================== 70,182,581.62 ===================== 12,280,869.04 259,223.55 7,776,237.04 10,029,077.85 667,823.00 6,083,052.84 1,159,372.76 0.00 1,517.09 10,237,991.05 4,922,805.72 ------------------------------------------53,417,969.94 ===================== 56,585,033.94 ===================== 584,181.06 65,008.58 8,978.63 ------------------------------------------658,168.27 ===================== 445,813,734.92 ===================== 160,967.83 69,775.74 17,745.76 ------------------------------------------248,489.33 ===================== 421,879,054.34 ===================== 12,557,995.79 78,510,941.86 116,635,875.04 8,456,225.80 ------------------------------------------216,161,038.49 ===================== 16,397,545.76 100,490,962.01 149,385,181.28 9,226,425.72 ------------------------------------------275,500,114.77 ===================== MICHANIKI GROUP OF COMPANIES CONSOLIDATED PROFIT & LOSS STATEMENT AS OF DECEMBER 31st, 2004 (1/1/- 31/12/04) - (AMOUNTS IN EUROS) Current year end (01.01.04 - 31.12.04) I. OPERATING RESULTS Turnover (Sales) a) Company b) Consortiums - Joint Ventures Less: 118,137,326.56 Cost of Sales II. 1. Administrative Expenses 3. Selling Expenses 8,656,874.76 1,808,119.42 ------------------------------------------6,932,408.77 457,720.04 2,816,557.71 132,165.28 ------------------------------------------10,338,851.80 5,333,681.77 631,427.94 ------------------------------------------- 2. Expenses & losses from investment & securities sales 3. Interest & other financial expenses Total Operating Results (profits) EXTRAORDINARY RESULTS PLUS: 1. Extraordinary & Non Operating Income 2. Extraordinary Profits 3. Prior Years Income 4. Prior year’s income from provisions LESS: 1. Extraordinary & Non Operating Expenses 2. Extraordinary Losses 3. Prior Years Expenses Operating & Extraordinary Results (profits) LESS: 1. Total Depreciation of Fixed Assets Less: Depreciation incorporated to the operating cost 2. Year-end consolidation differences depreciation 6,000,440.68 60,192.86 108,579.97 170,694.91 ------------------------------------------1,161,107.66 435,284.90 385,608.14 ------------------------------------------9,934,699.88 8,229,605.14 ------------------------------------------- 1,982,000.70 ------------------------------------------- Minority Rights SALES (in €) 20.20 Construction of timber products and artificial timber products 26.70 Stone cutting and processing for design and construction reasons 28.11 Metallic frameworks and parts of metallic frameworks construction 28.40 Hammering, printing and formation of metals with roling 36.13 Kitchen furniture construction 45.11 Electricity Production 45.21 Building and Technical construction works civil engineering 45.23 Road, street, airport and sport facilities construction 45.24 Hydraulic and port works construction 5.39 Other building installations 51.53 Wholesale of timber products, construction material and sanitary products 70.11 Development and sale of real estate 70.20 Real estate lease 70.32 Real estate management against fees or based upon an agreement 71.21 Lease of other ground transportation means 71.32 Lease of machinery/equipment for construction & civil engineer works 74.12 Accounting, auditing and tax consulting services 74.14 Business consulting and management services 74.20 Architecture, Engineering services and technical advice 74.50 Personnel scouting and provision Total SALES (in €) 45.21 Building and technical work construction civil engineering 45.23 Road, street, airport and sport facilities construction 45.24 Hydraulic construction 70.32 Real estate management against fees or based upon an agreement Total 80 7,982,415.06 2,275,037.10 ------------------------------------------4,127,571.72 712,204.75 168,948.23 182,700.83 ------------------------------------------5,191,425.53 25,602.84 635,121.03 ------------------------------------------- 4,373,742.09 ------------------------------------------14,189,960.15 4,357,907.72 ------------------------------------------18,547,867.87 4,429,673.87 817,195.88 383,265.11 0.00 ------------------------------------------823,514.18 313,958.45 428,114.42 ------------------------------------------9,551,215,.22 7,227,813.99 ------------------------------------------- 1,705,094.74 0.00 ------------------------------------------- 85,703,065.23 ------------------------------------------19,466,649.54 926,231.53 ------------------------------------------20,392,881.07 10,464,994.18 ------------------------------------------9,816,218.06 6,339,908.42 NET RESULTS (profits) before taxes LESS: 105,169,714.77 46,947,962.40 ------------------------------------------152,117,677.17 ===================== 98,884,539.39 ------------------------------------------19,252,787.17 1,028,425.07 ------------------------------------------20,281,212.24 Partial Operating Results (Profits) PLUS: 1. Investment Revenues 2. Bond-Securities Revenues 3. Profits from investment & securities sales 4. Interest & other financial revenues LESS: 105,169,714.77 118,137,326.56 34,518,351.04 ------------------------------------------152,655,677.60 ===================== Gross Operating Results (profits) Plus: Other Operating Revenues Total LESS: Previous year end (01.01.03 - 31.12.03) 1,705,094.74 ------------------------------------------16,842,773.13 ===================== -2,246,037.08 -----------------------------------------19,088,810.21 ===================== 10,257,452.16 ------------------------------------------10,135,428.91 4,530,701.66 ------------------------------------------14,666,130.57 5,630,134.86 1,565,587.05 ------------------------------------------- 4,064,547.81 ------------------------------------------18,730,678.38 2,323,401.23 0.00 ------------------------------------------- (Company) 19,489,028.08 3,496,586.30 4,914,622.78 9,511,941.54 1,026.33 1,032,986.29 39,160,381.66 20,630,624.29 3,332,095.57 2,062,134.27 80,670.51 8,411,277.74 1,980,887.54 817,512.86 60,696.09 510,934.96 924,396.30 577,747.69 808,846.76 332,929.00 ------------------------------------------118,137,326.56 ===================== (KÔÈÓÔÚ·ÍÈÒÓ) 8,789,414.63 25,189,718.65 178,971.02 360,246.74 ------------------------------------------34,518,351.04 ===================== 2,323,401.23 ------------------------------------------16,407,277.15 ===================== -315,791.80 ------------------------------------------16,723,068.95 ===================== MICHANIKI GROUP OF COMPANIES NOTES: 1. The consolidated financial statement of the fiscal year-end 31.12.2004 includes the financial items of the companies: MICHANIKI S.A., HELLENIC PIPEWORKS S.A., BALKAN EXPORT S.A., KAVALA MARBLES S.A., THOLOS S.A., MICHANIKI REAL ESTATE S.A., MICHANIKI BULGA