pamestihima.gr

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pamestihima.gr

OPAP S.A.
ORGANIZATION OF FOOTBALL MATCH
PROGNOSTICS S.A.
FISCAL YEAR 2004 ANNUAL REPORT
According to the ordinances of Article. 16 of the Hellenic Capital Market
Commission decision 5/204/14.11.2000.
MAY 2005
TABLE OF CONTENTS
1. CHAIRMAN’S LETTER TO THE COMPANY’S SHAREHOLDERS ................................................. 3
2. SUMMARIZED FINANCIAL INFORMATION OF THE COMPANY AND THE GROUP ................... 5
2.1. DEVELOPMENT OF COMPANY’S FINANCIAL INFORMATION ............................................................ 5
2.2. DEVELOPMENT OF CONSOLIDATED FINANCIAL INFORMATION ....................................................... 7
2.3. FINANCIAL RATIOS .......................................................................................................... 9
2.4. CONSOLIDATED FINANCIAL RATIOS .....................................................................................10
3. INFORMATION REGARDING THE ANNUAL REPORT COMPILATION AND THE COMPANY’S
AUDITORS ................................................................................................................................ 11
4. SIGNIFICANT INFORMATION FOR FISCAL YEAR 2004 ....................................................... 19
4.1. COMPLETION OF “KINO” GAME EXPANSION IN GREECE ............................................................19
4.2. ESTABLISHMENT OF TWO NEW SUBSIDIARY COMPANIES ...........................................................19
4.3. CONSOLIDATION ............................................................................................................19
4.4. ARBITRATION DECISION ..................................................................................................19
4.5. PUBLIC OFFERS .............................................................................................................19
5. SHARE STOCK EXCHANGE INFORMATION ........................................................................... 20
6. INFORMATION ABOUT THE COMPANY................................................................................. 21
6.1. GENERAL INFORMATION ...................................................................................................21
6.2. COMPANY’S HISTORY ......................................................................................................23
6.3. COMPANY’S OPERATIONS .................................................................................................26
6.4. AGENCY NETWORK .........................................................................................................35
6.5. CONTRACTS .................................................................................................................36
6.6. SALES PROMOTION .........................................................................................................41
6.7. FIXED ASSETS – ESTABLISHMENTS ......................................................................................41
6.8. INSURANCE CONTRACTS...................................................................................................46
6.9. INVESTMENTS FOR THE PERIOD 2002-2004 .........................................................................47
7. INFORMATION RELATIVE TO THE SHARE CAPITAL, SHAREHOLDERS, ADMINISTRATION
AND PERSONNEL OF THE COMPANY. ....................................................................................... 51
7.1. SHARE CAPITAL EVOLUTION ..............................................................................................51
7.2. TOTAL SHAREHOLDERS EQUITY – SHARE BOOK VALUE .............................................................52
7.3. CONSOLIDATED TOTAL SHAREHOLDERS EQUITY – SHARE BOOK VALUE .........................................52
7.4. SHAREHOLDERS .............................................................................................................52
7.5. SHAREHOLDER RIGHTS ....................................................................................................54
7.6. COMPANY ADMINISTRATION – MANAGEMENT .........................................................................55
7.7. CORPORATE GOVERNANCE ................................................................................................61
7.8. LIST OF INDIVIDUALS SUBJECT TO THE ORDINANCES OF ARTICLE 8 OF DECISION N. 5/204/14-11-2000
OF THE HELLENIC CAPITAL MARKET COMMISSION ..........................................................................63
7.9. ORGANIZATIONAL STRUCTURE CHART ..................................................................................65
7.10. PARTICIPATIONS OF THE COMPANY’S B.D. MEMBERS AND MAJOR SHAREHOLDERS TO THE
ADMINISTRATION AND/OR SHARE CAPITAL OF OTHER COMPANIES .....................................................66
7.11. PERSONNEL ................................................................................................................66
8. INSTITUTIONAL FRAMEWORK OF THE COMPANY’S OPERATION ....................................... 68
8.1. BASIC LAWS - ORDINANCES ..............................................................................................68
8.2. REGULATORY FRAMEWORK OF OPERATIONS OF OPAP S.A. .......................................................68
8.3. SPECIAL TOPICS OF OPAP S.A. FRAMEWORK OF OPERATIONS ...................................................68
9. SUMMARIZED COMPANY SECTOR INFORMATION............................................................... 69
OPAP S.A. Annual Report 2004
Page 1
9.1. INTERNATIONAL MARKET OF GAMING ..................................................................................69
9.2. GREEK MARKET OF GAMING ..............................................................................................69
9.3. COMPANY’S MARKET POSITION - COMPETITION ......................................................................70
10. COMPANY FINANCIAL DATA OF OPERATIONS 2002-2004............................................... 71
10.1. OPERATIONS...............................................................................................................71
10.2. DEVELOPMENT OF RESULTS- PROFIT & LOSS ACCOUNTS .........................................................74
10.3. FINANCIAL EXPENSES ....................................................................................................80
10.4. APPROPRIATION OF PROFITS BEFORE DEPRECIATION ..............................................................81
10.5. BALANCE SHEET ANALYSIS ..............................................................................................82
10.6. FINANCIAL RATIOS .......................................................................................................94
10.7. SOURCES & USES OF FUNDS ...........................................................................................97
11. CONSOLIDATED FINANCIAL STATEMENTS OF FISCAL YEAR-END 2003 AND 2004 .......... 98
11.1. ASSOCIATED COMPANIES THAT ARE INCLUDED IN THE CONSOLIDATION ........................................98
11.2. DEVELOPMENT OF RESULTS- CONSOLIDATED PROFIT & LOSS ACCOUNTS .....................................99
11.3. CONSOLIDATED BALANCE SHEET ....................................................................................101
11.4. CONSOLIDATED FINANCIAL RATIOS .................................................................................104
12. ASSOCIATED COMPANIES................................................................................................ 105
12.1. ASSOCIATED COMPANIES WITH OPAP S.A. .......................................................................105
12.2. OPAP S.A. GROUP STRUCTURE AT 31.12.2004.................................................................105
12.3. SUBSIDIARY COMPANIES ..............................................................................................106
12.4. AFFILIATED COMPANIES ...............................................................................................113
12.5. COMPANIES THAT THE BOARD OF DIRECTORS MEMBERS OF OPAP S.A. PARTICIPATE IN. ...............115
12.6. SUBSIDIARIES OF SUBSIDIARY OR AFFILIATED COMPANIES .....................................................115
12.7. INTER-GROUP TRANSACTIONS .......................................................................................123
13. LONG-TERM GOALS AND COMPANY PROSPECTS............................................................. 125
14. DIVIDEND POLICY ........................................................................................................... 127
14.1. DIVIDEND POLICY .......................................................................................................127
14.2. DIVIDEND TAXATION...................................................................................................128
15. FINANCIAL STATEMENTS OF THE COMPANY FOR FISCAL YEAR-END 2003-2004 BASED ON
THE INTERNATIONAL ACCOUNTING STANDARDS................................................................. 129
16. CONSOLIDATED FINANCIAL STATEMENTS OF COMPANY FOR FISCAL YEAR-END 20032004 BASED ON THE INTERNATIONAL ACCOUNTING STANDARDS ...................................... 159
17. APPENDIX ........................................................................................................................ 187
Page 2
1. CHAIRMAN’S LETTER TO THE COMPANY’S SHAREHOLDERS
Dear Shareholders
The current Administration assumed its duties on May 20th, 2004 and thus it is obvious that it had no
ambitions to, just simply, evolve into a fine “manager” of OPAP S.A. More over it would be an unforgivable
inadvertence to rest at ease, combined with the possible attempt to be credited with the satisfactory fifth
fiscal year-end results. It is to the Administration’s right, however, to explicitly assure you that ever since
it tried and of course will continue to try and work for the best.
During the fiscal year-end of 2004 the Company’s progress, growth and upward course continued, the
dynamics of which are unreservedly recognized and awarded through the Company’s leading position,
positioned and firmly preserved by the investing community in our country and abroad.
The Company’s total turnover (sales) amounted to € 3.067,9 million, against € 2.259,3 million in the fiscal
year-end of 2003 (increase by 35,80%), the gross profit before depreciation amounted to € 656,2 million,
against € 495,9 million in the fiscal year-end of 2003 (increase by 32,3%), and the current year-end
operating profits before depreciation amounted to € 646,5 million, increased by 36,3% against the fiscal
year-end of 2003, i.e. € 474,5 million. Last the Company’s profit before tax amounted to € 736,5 million,
against € 381,4 million in the fiscal year-end of 2003, depicting an increase of 93,1%.
During the second consolidated fiscal year-end of the Group – we already count four subsidiaries and one
affiliated company – the total turnover (sales) amounted to € 3.177,2 million, against € 2.277,2 million of
the first consolidated fiscal year-end of 2003, the gross profit before depreciation amounted to € 673,9
million, against € 498,5 million in the fiscal year-end of 2003 (increase by 35,2%), the operating profits
before depreciation amounted to € 656,1 million against € 475,3 million in the fiscal year-end of 2003
(increase by 38%) and last the consolidated profits before tax amounted to € 742,3 million against € 401
million in the fiscal year-end of 2003 (increase by 85,1%).
During the fiscal year-end of 2004 the Company’s business plan continued smoothly, and it was positively
marked due to the successful completion of the introduction, in the whole country, of KINO, initially
through its expansion in the greater area of Thessalonica and consequently in Attica, that is through the
doubling of the points of sale.
The Administration preoccupied it self, as obliged, in order on the one hand side to ascertain – more
accurately to reaffirm – the technical adequacy of the System and on the other hand side with the
improvement of the related software, in order to reduce the time needed regarding the profit collection
procedure.
During the current fiscal year-end, the matters that came up are known creating a temporary, as we
believe, setback to the PAME STIHIMA figures, mainly because of the completion of the KINO game
introduction but also because of the penetration effort into the domestic market of companies that operate
in Greece with no legal right. From a legal perspective, it is assured that appropriate and necessary
actions, still in progress, were displayed. The fact that the Company’s Administration aspires with trust the
Greek Justice, this does not certainly revoke the efforts put up for the improvement of the terms and
conduct parameters of the game in order to offer more attractive options.
Also, during the fiscal year-end of 2004 all typical procedures required for the beginning of the business
activity of OPAP SERVICES S.A. were completed, ensuring – on a first phase – the general Sales Network
upgrade, and thus lending a uniform corporate image proper and righteous for OPAP S.A.
Omitting, a special reference upon a series of other significant actions and interventions (record of
building needs, negotiations with companies INTRACOM – INTRALOT, creation of the General
Management of the Macedonian Region, confronting Committee against illegal betting etc), I would like to
mention the delayed – but, by general confession, absolutely successful – completion and operation of the
Company’s WEBSITE, especially during the preparatory actions for the conduct of the Public International
Contest that will ensure the Company’s technological update, a particularly crucial point for its evolutionary
course for a number of reasons whose quote is needless of course.
It is necessary to note that within the current fiscal year-end the Company’s new business plan will be
publicized, which will have a five year time horizon emphasizing in goals relating to successful actions and
initiatives. Based on the up to date published information, it is estimated that during the fiscal year of
2005 satisfactory rates of development will be achieved.
Page 3
The Administration, responding to the public investor’s trust, decided, as it is already known, to distribute
an interim dividend of € 0,55 per share, based on the Company’s nine month results of 2004.
Upon the framework of this policy, the Company’s Board of Directors decided to propose to today’s
Ordinary General Assembly of the Shareholders the distribution of a total dividend amounting to € 472,1
million which correspond to € 1,48 per share, increased by approximately 102%, against 2003. Therefore,
with the subtraction of the above mentioned interim dividend of € 0,55 per share, the remaining dividend
amounts to € 0,93, maintaining – even for international standards – the Company’s yearly dividend yield in
exceptionally high levels.
Last, I would like, on behalf of and at the account of the Board of Directors of our Company to express my
gratitude owed to the Shareholders that encircle the Company with their trust, to our collaborating Agents
and of course to our employees whose contribution is considered as decisive regarding the evolutionary
course to the Organization of Football Match Prognostics as it developed to OPAP S.A.
Athens, May 2005
Sotiris Kostakos
Chairman OPAP S.A.
Page 4
2. SUMMARIZED FINANCIAL INFORMATION OF THE COMPANY AND THE GROUP
2.1. Development of Company’s Financial Information
2.1.1. Profit & Loss Accounts 2002-2004
The Company’s Financial Statements have been compiled according to the Greek General Chart of Accounts.
The company’s turnover (sales) and income for the three year period 2002-2004 is summarized below:
PROFIT & LOSS ACCOUNTS 2002-2004*
(€ in thousands)
2002
2003
2004
Net turnover (sales)
1.967.695
2.259.285
3.067.915
Gross profit (before depreciation) (1)
466.560
495.893
656.177
Other Operating Results
3.567
46.405
76.550
Total
470.127
542.298
732.727
Operating Profits (before depreciation) (1)
407.521
474.484
646.541
Profit before Interest, Depreciation and Tax (1)
337.587
401.194
756.014
Profit before Depreciation and Tax (1)
343.103
404.937
762.591
Profit before Tax
318.593
381.366
736.459
Profit after Income Tax & B.D. Fees & Other Gaming
473.223
Payouts non Incorporated to the Operating Cost (2)
201.256
235.002
Profit after Income Tax & B.D. Fees & Other Gaming
Payouts non Incorporated to the Operating Cost & prior
199.552
234.471
473.223
year’s Tax Audit Differences (2)(3)
Total Dividend (4)
213.730
232.870
472.120
Year End Number of Shares (5)
319.000.000 319.000.000 319.000.000
Weighted Number of Shares (6)
319.000.000 319.000.000 319.000.000
PER SHARE (7)
2002
2003
2004
Profit before Depreciation & Tax
1,08
1,27
2,39
Profit before Tax
1,00
1,20
2,31
Profit after Income Tax & B.D. Fees & Other Gaming Payouts non
0,63
0,74
1,48
Incorporated to the Operating Cost
Incorporated to the Operating Cost & prior year’s Tax Audit
0,63
0,74
1,48
Differences
Dividend per Share (4)
0,67
0,73
1,48
*Possible differences in totals are due to number rounding
Notes:
(1) Depreciation is not included in the operating expenses, as in the published year-end results, but subtracted in
total from the profits before depreciation and tax. The depreciation apportion by cost centers is as follows:
Depreciation Analysis (€ in thousands)
Depreciation apportioned to the Cost of Sales
Depreciation apportioned to the Administrative Expenses
Depreciation apportioned to the Selling Expenses
Depreciation Total
2002
22.646
1.641
222
24.509
2003
22.517
891
161
23.569
2004
24.503
1.494
135
26.132
(2)
The Board of Director Fees are incorporated in the Administrative Expenses since they are considered as extra
emolument expenses.
(3)
The prior year’s tax audit results are depicted within the assessed year-end.
(4)
Per share information has been calculated based upon the year-end number of shares. The Company’s Board
of Directors, based upon their decision 21/07.11.2002, distributed an interim dividend for fiscal year-end 2002
which amounted to a total of € 86.130 thousand. This amount is included by subtraction in the Liabilities
account “Dividends Payable”. The Company’s Board of Directors, based upon their decision 43/23.10.2003,
distributed an interim dividend for fiscal year-end 2003 which amounted to a total of € 95.700 thousand. This
amount is included by subtraction in the Liabilities account “Dividends Payable”. The Company’s Board of
Directors, based upon their decision 36/10.11.2004 , distributed an interim dividend for fiscal year-end 2004,
which amounted to a total of € 175.450 thousand. This amount is included by subtraction in the Liabilities
account “Dividends Payable” and is subject to the Ordinary General Shareholders Assembly approval.
(5)
For the calculation of the year-end number of shares, the actual physical number of shares was taken into
consideration at the end of every fiscal year.
Page 5
(6)
The weighted number of shares is based upon the year-end number of shares taking into consideration the
non existent weighting (adjustment of face value, share capital increase etc) during the three year period
2002-2004.
(7)
Based upon the weighted number of shares.
2.1.2. Profit & Loss Account Adjustments for Fiscal Years 2002-2004
Taking into consideration the Company notes and the Auditor’s Report for the three year period 20022004 there are no adjustments according to the Hellenic Capital Market Commission decision
5/204/14.11.2000 (Official Legal Notice Issue 1487Β’/6.12.2000) and the circular No. 10, par. 13.
2.1.3. Company Balance Sheets 2002-2004
BALANCE SHEET ACCOUNTS 2002-2004*
(€ in thousands)
Net Formation Expenses
Intangible Assets
Less: Depreciation
Net Intangible Assets
Tangible Assets
Less: Depreciation
Net Tangible Assets
Investments (participations)
Less: Provisions for Devaluation
Other Long-term Receivables
Total fixed Assets
Total current Assets
Debit Transitory Accounts
GRAND TOTAL ASSETS
Debit Memorandum Accounts
2002
2.521
322.817
(48.423)
274.395
37.891
(20.539)
17.353
0
0
8.625
300.372
457.980
12.690
773.563
180.407
2003
3.120
322.817
(64.563)
258.254
51.197
(26.159)
25.038
27.704
(23.739)
9.341
296.598
408.513
54.366
762.596
144.450
2004
3.289
322.817
(80.704)
242.113
74.032
(34.451)
39.581
52.877
(24.614)
10.018
319.974
565.203
82.250
970.717
31.401
Total Shareholders Equity
Provisions
Total Long-term Liabilities
Total Short-term Liabilities
Total Liabilities
Credit Transitory Accounts
GRAND TOTAL LIABILITIES
Credit Memorandum Accounts
Book Value per share (in €) (1)
137.240
87.488
88.670
459.549
548.219
615
773.563
180.407
0,43
138.841
134.002
51.930
436.342
488.272
1.481
762.596
144.450
0,44
139.984
26.044
30.509
769.950
800.460
4.229
970.717
31.401
0,44
(1)
The book value per share has been calculated based upon the year-end number of shares.
2.1.4. Total Shareholders Equity Adjustments for Fiscal Years 2002-2004
Taking into consideration the Company notes and the Auditor’s Report for the three year period 20022004 there are no adjustments according to the Hellenic Capital Market Commission decision
Page 6
2.2. Development of Consolidated Financial Information
2.2.1. Consolidated Profit & Loss Accounts 2003-2004
Apart from the Company, the first consolidated financial statement of fiscal year 2003 includes the
companies OPAP GLORY LIMITED (incorporated through the aggregate consolidation method), GLORY
TECHNOLOGY LIMITED (incorporated through the net worth method) and OPAP (CYPRUS) LIMITED
(incorporated through the aggregate consolidation method).
companies OPAP GLORY LIMITED (incorporated through the aggregate consolidation method), OPAP
INTERNATIONAL LTD (incorporated through the aggregate consolidation method), OPAP SERVICES S.A.
(incorporated through the aggregate consolidation method), GLORY TECHNOLOGY LIMITED (incorporated
through the net worth method) and OPAP (CYPRUS) LIMITED (incorporated through the aggregate
consolidation method).
The Consolidated Financial Statements have been compiled according to the Greek General Chart of
Accounts.
The consolidated turnover (sales) and income for the two year period 2003-2004 is summarized below:
CONSOLIDATED PROFIT & LOSS ACCOUNTS 2003-2004 (€ in
thousands)*
Gross profit (before depreciation) (1)
Total
Operating Profits (before depreciation) (1)
Profit before Interest, Depreciation and Tax (1)
Profit before Depreciation and Tax (1)
Profit before Tax
Profit after Income Tax & Other Gaming Payouts non Incorporated
to the Operating Cost (2)
to the Operating Cost & prior year’s Tax Audit Differences (3)
to the Operating Cost & prior year’s Tax Audit Differences and
Minority Rights proportion (2) (3)
Year End Number of Shares (4)
Weighted Number of Shares (5)
PER SHARE (6)
Profit before Tax
Profit after Income Tax & Other Gaming Payouts non Incorporated to the
Operating Cost (2)
Operating Cost & prior year’s Tax Audit Differences (3)
Operating Cost & prior year’s Tax Audit Differences and Minority Rights
proportion (2) (3)
2003
2004
2.277.163
498.605
45.621
544.226
475.260
425.701
429.457
401.035
3.177.208
673.897
66.797
740.694
656.050
766.744
773.680
742.311
254.576
478.642
254.045
478.642
253.990
478.734
319.000.000 319.000.000
319.000.000 319.000.000
1,26
2,33
0,80
1,50
0,80
1,50
0,80
1,50
Notes:
(1) Depreciation is not included in the operating expenses, as in the published consolidated year-end results, but
subtracted in total from the profits before depreciation and tax. The depreciation apportion by cost centers is
as follows:
Depreciation Analysis (€ in thousands)
Depreciation Total
2003
22.517
891
161
23.569
2004
24.677
1.748
146
26.571
(2)
The Board of Director Fees are incorporated in the Administrative Expenses since they are considered as extra
emolument expenses.
(3)
The prior year’s Company tax audit results are depicted within the assessed year-end.
Page 7
(4)
For the calculation of the year-end number of shares, the actual physical number of shares was taken into
consideration at the end of every fiscal year.
(5)
The weighted number of shares is based upon the year-end number of shares taking into consideration the
non existent weighting (adjustment of face value, share capital increase etc) during the two year period 20032004.
(6)
Based upon the weighted number of shares.
2.2.2. Consolidated Profit & Loss Account Adjustments for Fiscal Years 2003-2004
Taking into consideration the consolidated Company notes and the Auditor’s Report for the two year
period 2003-2004 there are no adjustments according to the Hellenic Capital Market Commission decision
2.2.3. Consolidated Balance Sheets 2003-2004
CONSOLIDATED BALANCE SHEET ACCOUNTS 2003-2004*
(€ in thousands)
Intangible Assets
Less: Depreciation
Tangible Assets
Less: Depreciation
Net Tangible Assets
Investments (participations)
Other Long-term Receivables
Total fixed Assets
Total current Assets
GRAND TOTAL ASSETS
2003
3.120
347.041
(69.408)
277.633
53.783
(27.513)
26.271
0
9.341
313.244
418.563
54.366
789.293
144.450
2004
3.685
347.041
(90.394)
256.647
77.533
(36.216)
41.317
338
10.024
308.326
605.856
82.541
1.000.408
31.401
Provisions
Total Long-term Liabilities
Total Short-term Liabilities
Total Liabilities
Book Value per share (in €) (1)
158.612
134.002
52.011
443.187
495.198
1.481
789.293
144.450
0,50
165.174
26.044
30.621
773.710
804.331
4.858
1.000.408
31.401
0,52
(1)
The book value per share has been calculated based upon the year-end number of shares.
2.2.4. Consolidated Total Shareholders Equity Adjustments for Fiscal Years 2003-2004
Taking into consideration the consolidated Company notes and the Auditor’s Report for the two year
period 2003-2004 there are no adjustments according to the Hellenic Capital Market Commission decision
Page 8
2.3. Financial Ratios
FINANCIAL RATIOS
FISCAL YEAR-END
GROWTH RATIOS (%)
Profit before Depreciation and Tax
Profit before Tax
Tangible Assets (acquisition cost)
Total Working Capital
2002
2003
2004
9,4%
(14,6%)
(14,8%)
14,8%
18,0%
19,7%
35,8%
88,3%
93,1%
(15,8%)
16,8%
101,4%
5,3%
(4,5%)
35,1%
(1,4%)
44,6%
27,3%
220,7%
41,1%
276,3%
50,0%
528,3%
85,3%
1
31
0
0,7
29
0
0,1
29
0
Debt /Equity
Bank Debt /Equity
4,00
0,89
3,5
0,6
5,7
0,3
LIQUIDITY RATIOS (:1)
Current Ratio
Quick (acid) Ratio
1,02
1,02
0,94
0,93
0,73
0,73
1,4%
2,1%
0,8%
0,1%
0,4%
0,3%
INDEX RATIOS (before tax) (%)
Equity Weighted Average
Working Capital Weighted Average
TURNOVER RATIOS (in days)
Inventories
Suppliers (Trade creditors)
Trade Receivables
DEBT MANAGEMENT RATIOS (:1)
FINANCIAL RATIOS (%)
Financial Expenses/ Gross profit before depreciation
Financial Expenses / Profits before Debit Interest & Tax
Page 9
2.4. Consolidated Financial Ratios
FINANCIAL RATIOS
FISCAL YEAR-END
GROWTH RATIOS (%)
Profit before Tax
2003
2004
-
39,5%
80,2%
85,1%
-
88,0%
44,2%
26,7%
-
458,5%
83,2%
Inventories
Trade Receivables
-
0,1
28
0
Debt /Equity
Bank Debt /Equity
3,13
0,53
4,90
0,28
Current Ratio
Quick (acid) Ratio
0,94
0,94
0,78
0,78
0,8%
1,0%
0,4%
0,4%
Page 10
3. INFORMATION REGARDING THE ANNUAL REPORT COMPILATION AND THE
COMPANY’S AUDITORS
The Annual Report includes all the necessary information and financials for the fair valuation, of the
property, financial status, results and prospects of the company under the legal name OPAP S.A. (hereon
“OPAP S.A.” or the “Company”), by their investors and their investment advisors.
Investors interested for further information may contact, during working days and hours:
•
The Company’s offices, 62 Kifisou Str., P.C. 121-32 Athens, tel.: 210 5798111, contact person, Mr. E.
Magganas, Shareholder Affairs Manager.
The compilation and distribution of the current Annual Report is in accordance with the necessary
information for investors, as defined by the Hellenic Capital Committee decision in effect
5/204/14.11.2000.
The people responsible for the compilation and accuracy of the information within the Annual Report are
listed below:
a.
b.
c.
Mr. S. Kostakos, Chairman of the Board of Directors, 62 Kifisou Str., P.C. 121-32 Athens, tel.: 210
5798149.
Mr. V Niadas, Managing Director, 62 Kifisou Str., P.C. 121-32 Athens, tel.: 210 5798102.
Mr. K. Tsaousis, General Manager of Finance and Development, 62 Kifisou Str., P.C. 121-32 Athens,
tel.: 210 5798205.
The Company’s Board of Directors declares that all of its members have been informed about the contents
of the current Annual Report and along with their editors confirm and believe that:
•
•
•
All information and data included within the Annual Report is complete and actual.
There are no further facts and no other incidents have taken part, concealed or omitted so as to
render the entire or part of the data and information of the Annual Report.
There are no such judicial differences or arbitrations against the Company and its subsidiaries, which
could have significant negative effect on their financial status and that are not mentioned in the
current Annual Report.
The most significant pending judicial cases in which the Company has been implicated are described
below:
At times the Company is implicated in several civil, administrative and criminal procedures in addition to
investigations regarding the broad gaming sector in Greece.
Most significant cases against OPAP S.A.
▪
OPAP S.A. has signed a contract dated March 29th, 1999 with the Joint-Venture INTRALOT S.A.,
INTRALOT INTERNATIONAL LTD and the Betting Company S.A. (hereon “INTRALOT S.A. JointVenture”). The contracts subject refers to the organization, support, and conduct of Betting Fixed and
Variable Odds games (see Section 7.3.4. “Contracts”). The INTRALOT S.A. Joint-Venture through a
recourse petition dated 7.5.2001 appealed to the Three Member Arbitrative Court relevant to the
Company’s obligation to introduce Horse and Greyhound Racing betting to the scope of PAME STIHIMA
game up to March 29th, 2001. Upon the recourse petition appeal of the INTRALOT S.A. Joint-Venture
against the Company, dated 7.5.2001, the 2/2003 decision of the Three Member Arbitrative Court was
issued, which adjudged the amount of € 36,9 million to the INTRALOT S.A. Joint-Venture, lead
manager of the PAME STIHIMA game, for every year that the Horse-Greyhound Racing Betting will be
delayed after 29.3.2001. According to the above decision the Company was obligated to deposit after
29.3.2001 and up to the introduction of the Horse-Greyhound Racing Betting, on a yearly basis, the
above mentioned amount, otherwise up to the contract’s expiry (28.1.2007).
The decision’s mandamus did not include any ordinance regarding default interests. INTRALOT S.A. JointVenture had demanded the amounts due up to March 30th, 2003 in addition to the legal default interest
whose rate was 10,5%, calculated upon the non deposited amounts.
Page 11
▪
The Company on 17.4.2003 had filed a revocation lawsuit towards the ordinary justice (Appeal Court
of Athens) and the court’s hearing took place on 7.10.2003, upon which the appeal decision (4th
department) n. 953/2004 was issued which voided in total the Arbitrative Decision No. 2/2003 of the
Arbitrative Court of Athens. After the decision 953/2004 was issued by the Appeal Court and the
revocation of the Arbitrative Decision, the Company is not liable to pay any amount to the INTRALOT
S.A. Joint-Venture and for that reason the Company proceeded with the reversion of the unutilized
cumulative provision up to 31/12/2003.
The Joint-Venture INTRALOT S.A. – INTRALOT
INTERNATIONAL LTD, INTRALOT S.A. production, support and Software and computer system of
multiple use – instant lottery management company, INTRALOT INTERNATIONAL LTD and Betting
Company S.A. deposited a revocation appeal to the Supreme Court against the 953/2004 decision of
the Appeal Court of Athens and the appeal hearing was appointed for 24/10/2005.
▪
Fixtures Marketing Limited had filed a restraining order petition against OPAP S.A. to the civil Courts
of Athens requesting the prohibition of use of the football match catalogues relating to the English
and Scottish Championships to the tickets of PROPO, PROPO-GOAL and PAME STIHIMA, based on
the rules of database protection that were introduced to the European Union from the E.C. Directive
96/9. The court hearing took place on April 2nd, 2002 from the Athens One-Member Court of First
Instance. The Greek Court, given the fact that other similar pending cases existed in the presence of
the European Community Court (E.C.C.), proceeded with the deposition of a interlocutory question to
the E.E.C., in order for a paralegal decision to be made by the E.E.C., which to its judgment was
necessary in order to issue its final decision. On 9/11/2004 the E.E.C. issued a decision, based upon
the case C - 444/02 Fixtures Marketing against OPAP, which ruled that: “Therefore neither the
acquisition, or the control, or the presentation of a content of football match fixtures prove an
essential investment ready to justify the privilege of protection based upon the particular nature right
instituted by article 7 of the directive”. This decision consequently gives to OPAP S.A. the right to
continue the above activity in addition to being discharged from the obligation to pay, possibly
substantial compensation amounts to Fixtures.
▪
One private individual has filed a lawsuit against the Company with the allegation that a Company’s
B.D. decision (presuming that it discouraged the agents from signing a contract with him regarding
the issuance of an electronic card, similar to a credit card) impeded him form winning a substantial
amount. His claim amounts to approximately € 27,8 million. Also four lawsuits are pending from a
private individual, of total claims amounting to € 1,5 million regarding a betting participation. The
Company estimates that the above mentioned lawsuits will not prosper and will be overruled by the
court.
▪
There are two lawsuits from private individuals regarding loss of profit and moral damage amounting
to € 3.675.163, for which we estimate that they will not prosper and that they will be overruled.
▪
There is a lawsuit pending against the Company from a private individual for betting tickets
amounting to € 3.668.378,60 whose court hearing after an adjourn has been set for 1/12/2005 and
our estimate is that the lawsuit does not have significant chances in being accepted. Even if it is
accepted, the lawsuit does not affect the financial status of the Company since the requested
amount is added to the profit percentage towards the betting players for 2004 (60%) and the debtor
is the lead manager of PAME STIHIMA.
▪
There are 2 lawsuits in total from agents of OPAP S.A. against the Company, amounting to € 633
thousand. The Company estimates that the prosperity percentage will not be high.
▪
There are 39 lawsuits in total from agents against OPAP S.A. for transferring agencies and granting
new licenses. The Company, regarding the above mentioned cases, estimates that even in the
circumstance that some of these cases are accepted it will not affect the financial status of the
Company to the measure that it is possible for the Company’s B.D. to decide upon the transferring of
an agency and its operation elsewhere.
▪
There are 54 lawsuits from the Company’s extraordinary staff against OPAP S.A. regarding labor
differences amounting to € 220.212,00 which are driven towards a final settlement.
▪
There are 14 lawsuits from the Company’s part-time staff against OPAP S.A. amounting to €
1.548.627,60 which will be discussed in the future and that to our estimate have limited chances in
being prospered.
Page 12
▪
There are 6 lawsuits from the Company’s permanent staff that have been discussed or will be
discussed within 2005 regarding performance bonuses of 1998 and 1999 amounting to €
1.099.780,51 and our estimate is that these lawsuits do not have any chances in being prospered.
▪
There are lawsuits of the companies SATO and DROMEAS against the Company regarding the
Company’s B.D. void decision with which the furniture bidding was adjudicated to the company
MOBIUS. The case was discussed to the Athens Multimember Court of First instance on 27/10/2004
and a decision is anticipated.
Regarding the above mentioned cases, the Company estimates that the chances of being prospered are
limited.
Allegations for Malpractice against the previous Board of Directors Members
Based on the allegations of a professional organization of agents in March of 2002, the Public Prosecutor’s
Office of Athens exerted a criminal prosecution against the Company’s B.D. members at that time but also
to the previous Board of Directors in relation to the agents guarantee fund management. The professional
organization of agents allegation was that the Company was not sufficiently attentive concerning the
agents vexation that neglected to fulfill their obligations and that the Company before adequately pursuing
its satisfaction, used amounts from the guaranteed fund in order to cover agency debts.
For the exercised criminal prosecution a nolle prosequi was issued from the Athens Magistrate’s Court
Council n. 2695/2004.
Allegations regarding improper conduct from the former Managing Director, former members and three of
the members of the current Board of Directors and the Administration team of the Company in relation to
some business activity aspects, including its policy in regard to its practice relating to provisions and
advertising, have appeared through anonymous letters and references to the press and as far as the
Company knows these have led to exercised prosecutions by the Public Prosecutor’s Office of Athens.
One of these prosecutions referring to the lease of a building on 62 Kifisou Str., in addition to fees paid to
Committees is still pending. The members of the previous Board of Directors have filed a pleading
memorandum and ask for a nolle prosequi.
For the prosecution referring to the signing of a contract relating to purchasing of media time and space
with Fortune S.A, a Greek advertising company that OPAP S.A. had previously used in order to elaborate
its advertising strategy, a nolle prosequi was issued from the Athens Magistrate’s Court Council n.
5658/2004.
Last there is still a pending criminal prosecution towards eight members of the previous Board of Directors
regarding the acquisition of the companies in Cyprus. The eight members of the previous Board of
Directors have filed a pleading memorandum and ask for a nolle prosequi.
Abrogation Application of the Ministerial Decision 2518/2003 (which constitutes the
Regulation of OPAP S.A. Agencies Operation)
The Pan Hellenic Federation of Professional PROPO Agents (P.F.P.P.A) and two agents of OPAP S.A. have
petitioned to the State Council for the abrogation and suspension of the execution regarding the
Regulatory Decision of the Deputy Minister of Culture responsible for Athletic matters, n. 2518/2003,
which constitutes the “Regulation of Agencies Operation” (Official Legal Notice Issue Β 124/5.2.2003).
OPAP S.A. on 24.3.2003 submitted a Memorandum before the State Council for the dismissal of the
abrogation application execution of the Regulation of Agencies Operation. Upon the Suspension
Application exercised after the deposition of the Abrogation Application against the new Agency
Regulation, decision n. 377/2003 was issued from the Suspension Committee of the State Council with
which the Suspension Application is approved. The Suspension Committee’s decision suspends, until a
decision is reached regarding the Abrogation Application, the implementation of the regulation. Given that,
from the result relating to the above memorandum, the implementation of the new Agency Regulation is
suspended, the Agency Regulation of 1999 comes to effect. The Company’s estimate is that the
Abrogation Application will be accepted for typical reasons.
OPAP S.A. most significant claims from third parties
Page 13
OPAP S.A. has exercised lawsuits and indictments against agents amounting to € 3.462.949. The Company
estimates that the chances of the above lawsuits to prosper are high.
The Company on 10/2/2005 filed before the Athens One-Member Court of First Instance (Restraining
Order Procedure) a petition against the company “EUROBET.CO.UK.” and “MASTER MEDIA SYSTEM S.A.”
in order to prohibit them from offering, projecting and advertising in any way and through whatever
means products and services related to the conduct of illegal betting. The court hearing had been
scheduled for the 11/5/2005 and up to then the court though a temporary ordinance had ordered the
prohibition of all advertising projections of the above mentioned companies. The programmed hearing
dated 1/5/205 was postponed for 8/7/2005 and the court decided the preservation of the temporary
ordinance though which it had ordered the prohibition of all advertising projections of the above
mentioned companies.
The Company filed before the Athens One-Member Court of First Instance (Restraining Order Procedure)
restraining order petitions against the sports newspapers “SPORT TIME”, “FOS TON SPOR” and “GOAL
NEWS” in order to prohibit them from offering, projecting and advertising in any way and through
whatever means products and services related to the conduct of illegal betting. The court hearing has
been scheduled for the 27/5/2005.
OPAP S.A. alleges, among other matters, that the in effect General Regulation of Fixed Odds Betting Game
Operations does not permit the use of Greek Football or Basketball Matches or any other athletic or non
athletic event, that is organized from organizations and physical or legal entities that operate according to
the Greek Legislation to the Fixed Odds Betting Game programs (article 1 par. 7). Also, the participation in
these games is done only through the filling out of special printed matter so called “Betting Tickets” and
only through the authorized agencies of the Company. On the contrary the participation in games through
telephone or through other electronic means (e.g. Internet, digital tv etc) or through any other way is not
allowed. Additionally, according to par. 2 of article 2 of L. 2433/1996 whoever conducts bets, without a
right, publicly or to a broad cycle of people, relevant to the outcome of “fixed or variable odds”
horseracing or individual or sport games and to occurrences whose nature tenders the conduct of bets or
advertises such bets or through any other way attracts third parties to take part, is punished with jail
sentence of at least 6 months in addition to a fine from two thousand nine hundred and thirty five euros
(€ 2.935) up to fifty eight thousand six hundred and ninety four euros (€ 58.694).
Apart from the above mentioned information, the Company is not entangled in any other judicial
procedure or arbitration, nor any of its assets are subject to any pending judicial procedure.
Chartered Auditors-Accountants
The Company’s audit for fiscal year 2002 was conducted by the Chartered Auditors-Accountants Mr.
Deligiannis George (SOEL REG. NO. 15791) and Mr. Paraskevopoulos George (SOEL REG. NO. 11851), of
the company Grant Thornton S.A., 44 Vas. Konstantinou Str., P.C. 116 35 Athens, tel: 210 72 53 315. The
Company’s audit for fiscal year 2003 was conducted by the Chartered Auditors-Accountants Mr. Deligiannis
George (SOEL REG. NO. 15791) and Mr. Kazas Vasilios (SOEL REG. NO. 13281), of the company Grant
Thornton S.A., 44 Vas. Konstantinou Str., P.C. 116 35 Athens, tel: 210 72 53 315. The Company’s audit for
fiscal year 2004 was conducted by the Chartered Auditors-Accountants Mr. Konstantinou Sotirios (SOEL
REG. NO. 13671) and Mr. Kazas Vasilios (SOEL REG. NO. 13281), of the company Grant Thornton S.A., 44
Vas. Konstantinou Str., P.C. 116 35 Athens, tel: 210 72 53 315. The relevant audit report is depicted in the
enclosed Appendix together with the published balance sheet.
The first consolidated audit for fiscal year 2003 was conducted by the Chartered Auditors-Accountants Mr.
Deligiannis George (SOEL REG. NO. 15791) and Mr. Kazas Vasilios (SOEL REG. NO. 13281), of the
company Grant Thornton S.A., 44 Vas. Konstantinou Str., P.C. 116 35 Athens, tel: 210 72 53 315. The
consolidated audit for fiscal year 2004 was conducted by the Chartered Auditors-Accountants Mr.
Konstantinou Sotirios (SOEL REG. NO. 13671) and Mr. Kazas Vasilios (SOEL REG. NO. 13281), of the
company Grant Thornton S.A., 44 Vas. Konstantinou Str., P.C. 116 35 Athens, tel: 210 72 53 315. The
relevant audit report is depicted in the enclosed Appendix together with the published consolidated
balance sheet.
The most significant notes of the Chartered Auditor’s-Accountant’s report for the fiscal year-end of 2004
are presented below:
Fiscal Year-End 2004
Page 14
1)
The Company has been audited by the tax authorities up to and fiscal year-end 2002 and
consequently its tax liabilities for the fiscal year-end 2003 and 2004 have not been finalized.
In addition, the Balance Sheet for the fiscal year-end of 2004 states the following Company notes:
1)
2)
3)
4)
5)
6)
7)
8)
9)
10)
11)
There are no encumbrances on the Company’s fixed assets.
The Company’s permanent personnel as at December 31st 2004 amounted to 300 people.
Analysis of sales per category of transactions (STACOD-927.1) is as follows: “Lottery games and
bets € 3.067.915.115,90”.
Based on the Company’s Legal Department notice, there are law suits from part time employed
personnel and third parties amounting to approximately € 37,69 million. The Company’s
Administration estimates that the material effect, in case of a negative outcome of the above
differences, on its financial results will not be significant and that is the reason why there has
been no provision against the Company’s year-end results.
In the Profit & Loss Account “4. Prior year’s income from provisions” the amount of € 109,39
million is included, which refers to the reversion of the unutilized cumulative provision that was in
effect for the liability coverage that resulted after the decision taken by the Three-member
Arbitration Court on the 21/01/03 in regard to the recourse-petition capital deposit of the
consequential damage, that the Lead Manager faced from the non commencement of the HorseGreyhound Racing Betting in addition to the relevant default interest up to and 31/12/03. But,
after the deposition of the Abrogation Action by OPAP S.A. against the above Arbitration Decision
by the Three-member Athens Court towards the Appeal Court of Athens, decision 953/2004 was
issued, which in turn voided in total the Arbitrative Decision No. 2/2003 and thus there’s no
sustained liability from the Company’s side to pay any amount whatsoever to the above
mentioned company. INTRALOT S.A., in turn deposited a revocation appeal to the above decision
which will be discussed in the Supreme Court on 18/09/2006. The Company’s Legal Department
estimates that the above revocation appeal has limited chances in being accepted.
Acquisitions of assets in fiscal year-end 2004 amounted to € 24.803.381,71.
The Company has been audited by the tax authorities up to and fiscal year-end 2002.
On 22/01/2004 OPAP S.A. established a new subsidiary company in Cyprus by the legal name
OPAP INTERNATIONAL LTD, currently in its first fiscal year-end, with the purpose to expand
further within the Global Market.
In July of 2004, OPAP S.A. established in Greece a subsidiary under the legal name OPAP
SERVICES S.A., with the purpose to operate in matters of advertising, cultural and athletic
content, as well as the formulation of a uniform company image as far as the points of sale are
concerned. OPAP SERVICES S.A., starting from 01/01/204, receives 1% of the KINO sales for the
technological equipment and the improvement of the agencies infrastructure.
During the fiscal year-end 2004, according to L. 2065/1992, modified by article 20 of L.
2443/1996 and the circular 1110587/2000/1287 of the Ministry of Economy and Finance, the
acquisition value of buildings was readjusted, resulting in an increase of the acquisition value of
buildings by € 48.923,64 in addition to the readjusted depreciation by € 9.133,30. The raised
surplus difference amounting to € 39.790,34 was transferred to the Company’s net worth.
The Company’s Board Of Directors, based upon their decision 36/10.11.2004, decided to
distribute an interim dividend amounting to a total of € 175.450.000,00 subject to the Ordinary
General Shareholders Assembly approval.
The most significant notes of the Chartered Auditor’s-Accountant’s report for the consolidated fiscal yearend of 2004 are presented below:
Consolidated Fiscal Year-End 2004
1)
The parent Company has been audited by the tax authorities up to and fiscal year-end 2002 and
consequently its tax liabilities for the fiscal year-end 2003 and 2004 have not been finalized.
In addition, the Consolidated Balance Sheet for the fiscal year-end of 2004 states the following Company
notes:
1)
2)
3)
4)
There are no encumbrances on the Group’s fixed assets.
The Group’s permanent personnel as at December 31st 2004 amounted to 356 people.
Analysis of sales per category of transactions (STACOD-927.1) is as follows: “Lottery games and
bets € 3.177.208.300,68”.
Based on the parent Company’s Legal Department notice, there are law suits from part time
employed personnel and third parties amounting to approximately € 37,69 million. The
Company’s Administration estimates that the material effect, in case of a negative outcome of the
Page 15
5)
6)
7)
8)
9)
10)
11)
12)
13)
above differences, on its financial results will not be significant and that is the reason why there
has been no provision against the Group’s year-end results.
In the Profit & Loss Account “4. Prior year’s income from provisions” the amount of € 109,39
million is included, which refers to the reversion of the unutilized cumulative provision that was in
effect for the liability coverage that resulted after the decision taken by the Three-member
Arbitration Court on the 21/01/03 in regard to the recourse-petition capital deposit of the
consequential damage, that the Lead Manager faced from the non commencement of the HorseGreyhound Racing Betting in addition to the relevant default interest up to and 31/12/03. But,
after the deposition of the Abrogation Action by OPAP S.A. against the above Arbitration Decision
by the Three-member Athens Court towards the Appeal Court of Athens, decision 953/2004 was
issued, which in turn voided in total the Arbitrative Decision No. 2/2003 and thus there’s no
sustained liability from the Company’s side to pay any amount whatsoever to the above
mentioned company. INTRALOT S.A., in turn deposited a revocation appeal to the above decision
which will be discussed in the Supreme Court on 18/09/2006. The Company’s Legal Department
estimates that the above revocation appeal has limited chances in being accepted.
The Group’s acquisitions of assets in fiscal year-end 2004 amounted to € 26.140.996,62.
The parent Company has been audited by the tax authorities up to and fiscal year-end 2002.
On 22/01/2004 OPAP S.A. established a new subsidiary company in Cyprus by the legal name
OPAP INTERNATIONAL LTD, currently in its first fiscal year-end, with the purpose to expand
further within the Global Market.
In July of 2004, OPAP S.A. established in Greece a subsidiary under the legal name OPAP
SERVICES S.A., with the purpose to operate in matters of advertising, cultural and athletic
content, as well as the formulation of a uniform company image as far as the points of sale are
concerned. OPAP SERVICES S.A., starting from 01/01/204, receives 1% of the KINO sales for the
technological equipment and the improvement of the agencies infrastructure.
The consolidation includes the companies OPAP GLORY LTD, OPAP CYPRUS LTD, OPAP
INTERNATIONAL LTD and OPAP SERVICES S.A., incorporated through the aggregate
consolidation method and GLORY TECHNOLOGY LTD, incorporated through the net worth
method. The above companies represent the 5,08% and 3,44% of the Consolidated Grand Total
Assets and Turnover (Sales) respectively.
The comparative data of fiscal year-end 2003, depicted in the consolidated balance sheet, regard
the 4th trimester data, since the subsidiary OPAP CYPRUS LTD started its operations on 01/10/03
and OPAP GLORY LTD (90%) and GLORY TECHNOLOGY LTD (20%) were acquired in October
2003.
The Company’s Board Of Directors, based upon their decision 36/10.11.2004, decided to
distribute an interim dividend amounting to a total of € 175.450.000,00 subject to the Ordinary
General Shareholders Assembly approval.
During the fiscal year-end 2004, according to L. 2065/1992, modified by article 20 of L.
2443/1996 and the circular 1110587/2000/1287 of the Ministry of Economics and Finance, the
acquisition value of buildings was readjusted, resulting in an increase of the acquisition value of
buildings by € 48.923,64 in addition to the readjusted depreciation by € 9.133,30. The raised
surplus difference amounting to € 39.790,34 was transferred to the Company’s net worth.
The Company’s Chartered Auditors-Accountants, Mr. Konstantinou Sotirios (REG. NO. ICPA 13671) and Mr.
Kazas Vasilios (REG. NO. ICPA 13281) certify that there has been no dispute between them and the
Company’s Administration in addition to the fact that the Company has a reliable internal audit system.
Tax Audits
OPAP S.A.
The Company has been audited by the tax authorities (National Audit Center) up to and fiscal year-end of
2002. The audit regarded the assessment of all tax liabilities (income tax, property tax, payroll taxes,
value added tax), and the Company’s financials were judged as final, honest and actual.
The tax audit for fiscal years 1989-1999 was conducted within year 2000 from the National Audit Center
and the accounting differences that resulted amounted to a total of € 16.684 thousand. The tax audit for
Page 16
fiscal years 2000 and 2001 was conducted within year 2002 from the National Audit Center and the
accounting differences that resulted amounted to a total amount of € 1.849 thousand.
The taxes and fines designated after the settlement for fiscal years 1989-1999 amount to € 12.502
thousand and are analyzed below:
Fiscal
Year-End
(in €)*
1989-1994
1995
1996
1997
1998
1999
TOTAL
Accounting
Differences
4.631.323
2.238.499
2.547.358
2.715.595
2.425.123
2.126.583
16.684.481
Main Income Additional
Tax
Income Tax
711.530
339.103
389.504
414.745
374.203
329.422
2.558.507
355.964
126.797
145.697
99.539
134.713
47.437
910.147
Interest Tax
Interest
Increments
908.137
444.657
501.717
535.359
474.649
414.941
3.279.460
1.448.582
666.986
752.575
803.038
313.268
124.482
4.108.932
Value Added
Tax
Increments
and Fines
Other Taxes
31.411
2.521
12.153
10.744
10.454
2.955
70.238
164.528
80.375
619.569
115.196
105.862
77.199
1.162.730
Other Taxes
Increments
and Fines
Total
51.631
25.124
193.637
35.813
71.018
35.059
412.282
3.671.783
1.685.563
2.614.853
2.014.434
1.484.168
1.031.495
12.502.296
The additional taxes of approximately € 8.831 thousand resulting from the tax audit of fiscal years 19951999, charged the related fiscal year results. The additional taxes of € 3.671 thousand resulting from the
tax audit of fiscal years 1989-1994, charged the results of fiscal year 1995.
The tax audit differences related to the income tax (which after the conciliation with the tax authorities
amounted to € 3.469 thousand) mainly refer to the taxation from interest loan income that the Company
had loaned to the G.S.A., its personnel, interest from agency debs and from interest resulting from cash
flow expedites to the Football Societe Anonyme Association. In addition to the above, the tax audit
charged differences relating to the main and additional tax resulting from the property rentals as well as
additional tax resulting from the imputed income from the owner-occupancy of the Company’s buildings.
Thus, the tax audit independently taxed the above income categories and not the accounting result as
depicted cumulatively in the account “Profit carried forward”, based upon the ordinances of article 99 of L.
2238/94 relative to the income tax of non-profit Legal Entities, given that the Company, based upon the
related provisions that ruled, was a non-profit legal entity.
Further on, the tax audit charged significant differences resulting from the non return of 20% income tax
(which after the conciliation with the tax authorities amounted to € 7.390 thousand) upon the interest
from loans mentioned in the previous paragraph above according to the article 54 par. 3 of L. 2238/94,
even though the provision specifically states that the above tax return takes place only in the occasion
were the interest obligor is a physical entity that does not operate a company or a free lance operation,
whereas in the Company’s case the interest obligors were mainly G.S.A. and the Football Societe Anonyme
Association.
With the conclusion of the tax audit and the conciliation that followed with the tax authorities the
Company accounted taxes and increments to the related fiscal years.
The following table presents the tax payment schedule resulting from the tax audit of fiscal years 19891999 amounting to € 12.502 thousand. Ten percent (10%) of the amount was paid with the conciliation
procedure between the Company and the National Audit Center on November 2nd of the year 2000:
Payment in 2.11.2000
24 monthly payments beginning in 27.12.2000 (24 Χ
468.836)
TOTAL
(in €)
1.250.229
11.252.064
12.502.295
For the payment in full of the above taxes and fines, the Company has deposited € 6.270 thousand by
December 31st 2001. The remaining amount of € 5.781 thousand has already been paid in full in monthly
payments up to November 24th of year 2002.
Page 17
The taxes and fines designated after the conciliation for fiscal years 2000 and 2001, which amounted to €
2.449 thousand and were paid one–off after a discount of € 111 thousand, are analyzed below:
Fiscal
Year-End Accounting
Additional
(in €)*
Differences
Income Tax
2000
821.717
372.443
2001
1.027.146
443.348
TOTAL
1.848.863
815.791
One-off payment Deduction
Total
Increments
197.726
0
197.726
Income Tax
Capitalization
0
1.121.604
1.121.604
Other Taxes
Increments Other Taxes Increments
0
55.980
28.508
282.644
5.348
52.403
282.644
61.328
80.911
Total
654.657
1.905.347
2.560.004
111.001
2.449.003
Taxes and fines designated after the conciliation for fiscal year 2002 amount to € 554.501 thousand and
are analyzed below:
Fiscal
Year-End
(in €)*
2002
Total
Accounting
Differences
1.595.861
1.595.861
Additional
Income Tax
530.623
530.623
Increments
23.878
23.878
Income Tax
Capitalization
0
0
Other Taxes
Increments Other Taxes Increments
0
0
0
0
0
0
Total
554.501
554.501
OPAP GLORY LTD
OPAP GLORY LTD has been audited by the tax authorities up to and fiscal year 2003.
GLORY TECHNOLOGY LTD
GLORY TECHNOLOGY LTD has been audited by the tax authorities up to and fiscal year 2003.
OPAP (CYPRUS) LTD
OPAP CYPRUS LTD has not been audited by the tax authorities since its establishment on 08/2003.
OPAP INTERNATIONAL LTD
OPAP INTERNATIONAL LTD has not been audited by the tax authorities since its establishment on
01/2004.
OPAP SERVICES S.A.
OPAP SERVICES S.A. has not been audited by the tax authorities since its establishment on 07/2004.
Page 18
4. SIGNIFICANT INFORMATION FOR FISCAL YEAR 2004
4.1. Completion of “KINO” game Expansion in Greece
OPAP S.A. initiated on 3.11.2003 the KINO game, initially in the region of Rethymno in the island of Crete
and up to the end of year 2003 the game expanded in the whole island in addition to the regions of
Magnesia and Larisis with five-minute lotteries on a daily basis for five hours per day. During the year
2004, KINO gradually expanded in the rest regions of Greece and in Cyprus and completed its disposal in
the region of Attica in the beginning of October of 2004. From 17/1/2005 KINO is played for seven hours
per day.
4.2. Establishment of Two New Subsidiary Companies
On 22/01/2004 OPAP S.A. established a new subsidiary company in Cyprus by the legal name OPAP
INTERNATIONAL LTD, The company’s scope is to support the strategic expansion of OPAP S.A. activities
abroad in addition to the co-ordination of the subsidiary companies based there, OPAP CYPRUS LTD, OPAP
GLORY LTD, OPAP INTERNATIONAL LTD and GLORY TECHNOLOGY LTD.
OPAP SERVICES S.A.
In July of 2004, OPAP S.A. established in Greece a subsidiary under the legal name OPAP SERVICES S.A.
The company’s objective is to exploit the potential of the Company’s sales network and in general the
athletic market (provision of services, organization of athletic and cultural content activities, ticket issuing
and handling for athletic, cultural and other recreational activities, formulation of a uniform company
image as far as the points of sale are concerned, setting up exemplary agencies etc).
4.3. Consolidation
4.4. Arbitration Decision
Decision 953/2004 of the Appeal Court, voided in total the Arbitrative Decision No. 2/2003, relating to the
dispute between the Company and INTRALOT S.A. regarding the non commencement of the Horse Racing
Betting on 29.3.2001. The Arbitrative Court Decision 2/2003, held OPAP S.A. liable against the Lead
manager company INTRALOT S.A. to pay the amount of € 37.417.000, for every year that the HorseGreyhound Racing Betting delayed, and specifically from 29.3.2001 until the contract maturity. After the
decision 953/2004 was issued by the Appeal Court no such liability exists for the Company. INTRALOT
S.A., in turn deposited a revocation appeal to the Supreme Court and the appeal hearing was appointed
for October 2006. In April 2005, with INTRALOT S.A. petition, the President of the Supreme Court
Department D’ appointed the court hearing of the above case on the 24/10/2005.
4.5. Public Offers
During the current and previous year-end the Company has not submitted any public offers in either
buying or exchanging other company shares nor there have been any such offers from third parties for
Company’s shares.
Page 19
5. SHARE STOCK EXCHANGE INFORMATION
The Company’s shares were listed on the Main Market of the Athens Stock Exchange on 25.04.2001, with
a list price of € 5,50 per share. The table below depicts the maximum, minimum and adjusted price per
share in addition to the closing price per share in €, on the last day of each month’s session for fiscal year
2004 in association with the monthly trading volume in terms of shares and value:
Maximum
Price per
Share
€
Minimum
Price per
Share
€
Closing Price
per Share
€
Adjusted Price
per Share
€
January 2004
12,96
12,72
12,84
12,84
176.564.400
13.958.851
February 2004
14,94
14,00
14,74
14,74
276.935.300
19.515.721
13,82
Date
Trading Value
€
Trading
Volume
March 2004
14,00
13,62
13,82
182.715.000
12.962.081
April 2004
16,00
15,84
15,92
15,92
279.012.600
18.699.847
15,74
May 2004
16,20
15,66
15,74
213.830.400
13.456.540
June 2004
15,54
15,40
15,52
15,52
245.458.500
15.992.259
July 2004
16,10
15,42
15,96
15,96
162.985.700
10.279.270
August 2004
15,86
15,70
15,80
15,80
110.726.700
7.008.524
September2004
15,64
15,38
15,58
15,58
150.656.500
9.614.255
October 2004
16,06
15,94
15,98
15,98
205.114.700
12.788.479
November 2004
19,92
19,46
19,60
19,60
312.032.900
17.419.223
20,30
20,36
20,36
269.216.100
13.866.200
December 2004
20,48
The chart below depicts the price per share fluctuations relevant to the trading volume of shares for the
period 2/1/2004-31/12/2004:
€ 25,00
€ 20,00
€ 15,00
€ 10,00
€ 5,00
€ 0,00
20.000.000,00
15.000.000,00
10.000.000,00
5.000.000,00
JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
TRADE VOLUME (PIECES)
OPAP S.A. PRICE PER SHARE
The chart below depicts the price per share fluctuation relevant tot the General Index of the Athens Stock
exchange and the FTSE 20 Index for the period 2/1/2004-31/12/2004:
180
160
140
120
100
80
60
40
20
0
JAN
FEB
MAR
APR
% OPAP S.A.
MAY
JUN
JUL
AUG
% A.S.E. GENERAL INDEX
SEP
OCT
NOV
% FTSE 20 INDEX
Page 20
DEC
6. INFORMATION ABOUT THE COMPANY
6.1. General Information
OPAP S.A. was established in 1958, as a private legal entity, according to P.D. of December 20th 1958,
after the authorization was given according to the provision of par. 2, article 6 of L.D. 3865/1958.
With the P.D. 228/1999 (Official Legal Notice Issue Α’ 193/21.9.99) and under the article 2 par. 1 of L.
2414/1996 “Modernization of Public Companies and Organizations and other provisions” in addition to the
C.L. 2190/1920 “about societe anonyme”, OPAP S.A. converted into a Societe Anonyme company and
formed its initial statute which was published in the Official Legal Notice on 21.9.1999. The new company
name of the organization was defined and the no. 145562 trademark “OPAP at the Service of Athleticism
and Culture” (class 16, 36 and 41) has been approved by the Administrative Trademark Committee of the
Ministry of Development with decision 4446/2000.
The Company’s S.A. Reg. No. is 46329/06/Β/00/15 and its duration was set to 100 years starting on
September 21st, 1999 and ending respectively on the same date of the year 2099.
The Company’s T.I.N. number is 090027346. OPAP S.A. has been registered to the Athens Chamber of
Commerce & Industry with the number 188148.
According to the decision of the Extraordinary General Assembly of the shareholders of the Company,
dated 23.12.2003, its registered office was moved to the municipality of Peristeri Attica, 62 Kifisou Str.,
based upon the ministerial decision with prot. no. Κ2-268/15.1.2004, which approved the amendment of
article 3 of the Company’s statute. This address constitutes the Company’s new registered offices. The
Company may establish branches, agencies and offices in Greece and abroad in order to serve its
purposes.
The Company’s scope, in compliance to its statute, formulated according to the Common Ministerial
decision of the Ministry of Economics and Finance and the Supervisor Minister who was the Deputy
Minister of the Ministry of Culture, dated 21.9.1999 (Official Legal Notice Issue Α’ 193/21.9.99) includes
the following:
(a)
(b)
(c)
(d)
(e)
(f)
(g)
The organization, operation and conduct either by the Company or through the cooperation with
third parties, of the lottery games PROPO, LOTTO, PROTO, PROPOGOAL, JOKER, BINGO, ΚΙΝΟ,
OLYMPIC LOTTERY, LOTTERY NUMBERS, LOTTERY-GAMING, in addition to any other lottery game
that the Company’s B.D. decides, in Greece and abroad for the Hellenic Republic, in addition to the
ticket issuance of “FIXED OR NOT FIXED ODDS BETTING GAMES” in all individual or collective
games as well as incidents whose nature offer the conduct of betting or other games (unmixed,
composite and knowledge games) that the Company deems necessary and essential to organize and
carry out, taking every measure necessary through which the normal and unimpeded gaming
operation will be secured.
The management of the games listed above, in addition to the ones that will be conducted in the
future, is exercised exclusively by OPAP S.A. for the Hellenic Republic.
The structure of economic, feasibility, technical and commercial studies for lottery games for
domestic and international public or private parties.
The technological support of the Company’s lottery games and particularly the Company’s betting
games with the development, installation, operation, management and exploitation of new
technologically improved services such as for e.g. transfer of data, live coverage and in general a
transfer of complete audiovisual information to the points of gaming conduct for the Company’s
lottery games in addition to the football games and moreover all kinds of sport events, individual or
collective, upon which lottery games can be conducted and especially betting games, exploiting all
technological progress in the technology information system sector, the telecommunications sector
and the telematics sector.
The advertising, promotion, publicity and commercial development of the Company’s games in
addition to the reformation of agencies.
Printing operations of the Company’s lottery tickets in addition to other printed matter.
The granting of financial assistance, subsidies and sponsorships to athletic, cultural and social
organizations.
Article 2 of the Company’s statute, which includes its scope, was amended since the Company’s
conversion into a societe anonyme, based on the Common Ministerial Decision by the Ministers of
Economics and Finance and Culture no. 34245/21.12.2000 (Official Legal Notice Issue 1621/29.12.2000),
Page 21
according to which the Company’s statute was amended and codified after the 1st Extraordinary Statutory
(Unsolicited) General Assembly of the shareholders on 15/12/00. With this amendment, article 2 of the
Company’s statute is as follows:
(a)
(b)
(c)
(d)
(e)
(f)
(g)
The organization, operation and conduct of the lottery games PROPO, LOTTO, PROTO,
PROPOGOAL, JOKER, BINGO-LOTTO, ΚΙΝΟ, SUPER 3, SUPER 4, 5 from 35, in addition to the FIXED
OR NOT FIXED ODDS BETTING GAMES, to all individual or collective games as well as incidents
whose nature offer the conduct of betting, in addition to other lottery games or knowledge game or
technical game or game based upon any combination of the above, that its operation and conduct
in the whole country and abroad will be permitted and assigned to the Company in the future. The
Company takes all necessary measures in order to secure the disclosure, irreproachable, in addition
to the ordinary, unimpeded and reliable conduct of its games.
The management of the games conducted by the Company, in addition to the ones that will be
conducted in the future, is exercised exclusively by the Company according to the prevailing
ordinances.
The structure of economic, feasibility, technical and commercial studies for lottery or technical or
knowledge games or games based upon any combination of the above for domestic and
international public or private parties.
The technological support of the lottery games that the Company organizes and operates with the
development, installation, operation, management and exploitation of new technologically improved
services such as the transferring of data, live coverage and in general a transfer of complete
audiovisual information to the points of gaming conduct that the Company has, exploiting all
technological progress and specifically, in the technology information system sector, the
telecommunications sector and the telematics sector.
Advertising of the games the Company conducts in any suitable way and mean as well as the
assumption of sponsorships that serve social or other purposes which can be combined with the
Company’s publicity and sale promotion of its products.
Printing operations regarding the lottery tickets and other printed matter.
The exploitation of the Company’s material and technical infrastructure with the objective to provide
services to third parties.
The Company’s scope today according to article 2 of the Company’s statute, approved by the n.
442/16.1.2001 (Official Legal Notice Issue 23/16.1.2001) Joint Ministerial Decision of the Ministers of
Economics and Finance and Culture amended in the Extraordinary General Assembly of the Shareholders
dated 23/1/2002 (Official Legal Notice Issue 1802/11.3.2000), is the following:
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
The organization, operation and conduct of the lottery games PROPO, LOTTO, PROTO,
PROPOGOAL, JOKER, BINGO-LOTTO, ΚΙΝΟ, SUPER 3, SUPER 4, 5 from 35, in addition to the FIXED
OR NOT FIXED ODDS BETTING GAMES, to all individual or collective games as well as incidents
whose nature offer the conduct of betting, in addition to other lottery games or knowledge game or
technical game or game based upon any combination of the above, that its operation and conduct
in the whole country and abroad will be permitted and assigned to the Company in the future. The
Company takes all necessary measures in order to secure the disclosure, irreproachable, in addition
to the ordinary, unimpeded and reliable conduct of its games.
The management of the games conducted by the Company, in addition to the ones that will be
conducted in the future, is exercised exclusively by the Company according to the prevailing
ordinances.
The structure of economic, feasibility, technical and commercial studies for lottery or technical or
knowledge games or games based upon any combination of the above for domestic and
international public or private parties.
The technological support of the lottery games that the Company organizes and operates with the
development, installation, operation, management and exploitation of new technologically improved
services such as the transferring of data, live coverage and in general a transfer of complete
audiovisual information to the points of gaming conduct that the Company has, exploiting all
technological progress and specifically, in the technology information system sector, the
telecommunications sector and the telematics sector.
Advertising of the games the Company conducts in any suitable way and mean as well as the
assumption of sponsorships that serve social or other purposes which can be combined with the
Company’s publicity and sale promotion of its products.
Printing operations regarding the lottery tickets and other printed matter.
The exploitation of the Company’s material and technical infrastructure with the objective to provide
services to third parties.
The Company can organize, operate and conduct games to countries abroad, with the condition that
the assumption in whatever way of the organization, operation and conduct is done by the Company
Page 22
from an organization of a country based abroad, Public or Private. The Company in that case takes
any necessary measures, in order to secure the disclosure, irreproachable, in addition to the
ordinary, unimpeded and reliable conduct of the games undertaken by the Company, in a way that
their conduct is secure and the Company’s reputation and prestige in the gaming sector is not
offended, complied to the country’s in effect ordinances, in which country the Company will
organize, operate and conduct any game.
In order to achieve its objectives, the Company can by itself or through a cooperation with third parties:
•
•
•
•
•
•
•
•
•
•
To sign contracts with public or private organizations for the provision of services towards these
organizations and with the condition that all expenses arising from the above contracts will burden
the organization to whom the provisions of services will be agreed.
To participate in national, foreign, International or related Organizations.
To establish exclusively, domestically and abroad, branches or offices according to the legislation in
effect with the Company’s B.D. decision, which simultaneously defines their setting up, organization
and operation.
To establish agencies in the whole country that are providing agency services regarding the
Company’s games, and to grant agency operating licenses to physical or legal entities for one or more
of its games, with the terms and conditions that are set each time.
To provide technical and in general consulting services to physical or legal entities, States or
International Organizations domestically or abroad, in the lottery gaming sector or knowledge games
or technical games or games based upon any combination of the above.
To train staff, salaried or not, for their employment in the Company.
To incur loans or to undertake liabilities or to issue bills of exchange, bonds or bond debentures, or
other securities or instruments on behalf of the Company.
To provide credit or loans towards third parties with real security deeds on movable or immovable
assets of third parties or to accept personal guarantees in order to secure the Company’s receivables
for the above mentioned transactions. Especially for the Company’s personnel, the Company may
provide credit or loans satisfying the Company’s receivables by withholding partially or in total their
wages.
To undertake every commercial or other activity and to conduct every material or legal act directly or
indirectly connected to the Company’s purpose.
To proceed in the establishment of companies or joint-ventures, or to manage or participate in
companies or joint-ventures and to obtain stocks or shares of these companies.
The Company can provide or dispose labor or scientific and technically skilled or other personnel to third
parties, with the condition that the personnel expense will burden the third party and the smooth and
secure operation of the Company will not be dent.
The Company’s activity is related to the Lottery Gaming and Betting Sector and based on the sales per
category transactions (STACOD) it belongs to the sector n. 927.1 “Lottery Games and Betting”.
6.2. Company’s History
The most significant events that signaled the Company’s development since its establishment in 1958 are
described below:
1958: Establishment of OPAP
The Organization of Football Prognostics (OPAP) was established in 1958, as a Private Legal Entity. The
Company’s initial scope was to generally organize and operate the Football Pools “play slips” (the known
PROPO sports betting game). The revenues from the above operation were included in the General
Secretariat of Athletics resources, according to the ordinance of article 12 L.D. 3769/1957. The Company,
since its foundation relished an absolute administrative and financial independence (article 6 of L.D.
3865/1958), subject to administration audits from the General Secretariat of Athletics, in addition to
financial due diligence’s from an ad hoc Committee comprised from senior financiers.
1959: Introduction of PROPO
After the 20.12.1958 P.D. (Official Legal Notice Issue 227/27.12.1958) OPAP S.A. introduced the PROPO
sports betting game, the only Company’s game up to 1990 with a wide effect to the public. For 30 years
PROPO, through the Company’s subsidies, was considered as one of the most significant financial
sponsors of Greek Athleticism. In 1959 the Company conducted 33 PROPO games on a yearly basis. Up to
1992, the Company increased the yearly games to 134, which is the number of games currently
conducted.
Page 23
1990: Introduction of LOTTO
In 1990 the Company introduced LOTTO, a numerical lottery game. Initially the game’s introduction
produced substantial earnings exceeding the amount of Grd 100 million (€ 293.470 thousand) in 1991,
whereas up to 1993 a decrease was noted regarding the number series played resulting in a decline of net
revenues. In 1994 an increase was noted regarding the total LOTTO revenues, mainly due to the series by
67%. From 1996 and on, LOTTO continued its declining course mainly due to the introduction of new
antagonistic games in addition to the saturation of the game itself.
1992: Introduction of PROTO
In 1992 the Company introduced PROTO. Up to 1995, the activity of PROTO was characterized by a
continuous increase of both net revenues and series payouts. From 1998 the game’s course started its
decline, possibly due to LOTTO’s respective decline, the game with which PROTO is most commonly
played in combination. It should be noted that PROTO today is played in combination with LOTTO, JOKER,
PROPO and PROPOGOAL and independently by itself in a separate ticket.
1996: Introduction of PROPO-GOAL
In 1996 the Company introduced PROPO-GOAL. The number of PROPO-GOAL competitions showed a
continuous increase since its introduction, but still remained a peripheral game in relation to the remaining
games of the Company as far as total revenues and revenues per competition is concerned.
1997: Introduction of JOKER
In November of 1997 the Company introduced JOKER. From its introduction JOKER became the
Company’s most popular game, repeating on a lesser scale the success of LOTTO. Joker is the Company’s
third most popular game in spite of its recent popularity downturn. In addition to the above, in 1997,
LOTTO’s fourth wining category was introduced.
1999: OPAP converted into a Societe Anonyme Company
In 1999 OPAP converted into a Societe Anonyme company and its new statute was formulated (P.D.
228/1999, Official Legal Notice Issue Α’ 193), where as in article 1 of its statute the new company name
was set “Organization of Football Match Prognostics S.A.”, and in abbreviation “OPAP S.A.”.
1999: Contract Agreement Signature of PAME STIHIMA
After an international tender, the Company came into an agreement with the INTRALOT S.A. JointVenture, concerning the assignment of certain parts of the operation of PAME STIHIMA. The agreement
also includes a risk management arrangement. Under the terms of this arrangement, INTRALOT S.A.
Joint-Venture, guarantees that the payout winnings of PAME STIHIMA participants will not, on an annual
basis, exceed the agreed target annual payout and in the event it does, INTRALOT S.A. Joint-Venture will
undertake to pay any excess amount.
2000: Introduction of PAME STIHIMA
From 28.01.2000, OPAP S.A. introduced the first Fixed Odds Betting game which currently refers to
Football and Basketball matches of foreign championships, Formula 1 racing, international tennis matches
and other sporting events. PAME STIHIMA almost immediately became, and during 2004 remained, the
Company’s most popular game. In contradiction to lottery tickets, were players are based solely on luck,
wagers on athletic events include the skill element and player’s knowledge. This is considered by the
Company’s management as a player loyalty growth factor. PAME STIHIMA generated revenues of € 1,601
billion, representing approximately 52,2% of the Company’s total turnover (sales) for fiscal year-end 2004.
2000: Securitization of OPAP S.A.
According to paragraph 1 of article 27 of L.2843/2000, the Hellenic Republic may offer through the S.E. to
investors a percentage of up to 49% of the Company’s share capital.
2000: Concession Contract between OPAP S.A. and the Hellenic Republic.
With the 15.12.2000 contract signed between the Hellenic Republic and the Company, a 20 year
concession right was agreed for the exclusive conduct, management, organization and operation from
OPAP S.A., regarding the games conducted at the signature date, i.e. PROPO, LOTTO, PROTO, PROPOGOAL, JOKER and PAME STIHIMA, in addition to the games, number lottery 5 FROM 35, SUPER 3, BINGOLOTTO, ΚΙΝΟ and SUPER 4. More over OPAP S.A. received the concession ability to exclusively conduct
any game referring to athletic events in addition to the preemptive right for the exclusive conduct and
management of all new games the operation of which the Hellenic Republic allows and monitors, with the
condition that the Company accepts, within the dead line set by the Hellenic Republic (which according to
the concession contract can not be less than four months) to conduct the new game, according to the
Page 24
terms of article 27 (par. 9a) of L. 2843/2000. The price value of this 20 year concession amounted to €
322,8 million. The biggest part of the concession’s price value was set-off with several claims from
organizations of the Hellenic Republic such as the General Secretariat of Athletics and the Ministry of
Culture. Additionally, € 29,3 million were capitalized and the remaining € 62,9 million, as well as the
additional € 13,2 million that the Company owed to the Hellenic Republic were deposited in two equivalent
payments on June 30th, 2001 and June 30th, 2002.
2001: Initial Public Offering of the Company’s Shares to the Stock Exchange
In continuation from the decision of the Inter-ministerial Committee of Privatizations dated 22.12.2000,
the 3rd Extraordinary Statutory General Assembly of the Company’s Shareholders dated 3.1.2001, decided
to list its shares to the Main Market of the Athens Stock Exchange. On April 25th, 2001, with the relative
approvals of the Athens Stock Exchange Board of Directors and the Hellenic Capital Market Commission
the Company’s listing took place in the Main Market of the Athens Stock Exchange. The Hellenic Republic,
at that time the sole shareholder, sold 5,4% of its shares through a public offering and a private
placement to Company employees and agents. The proceeds from the initial public offering were collected
by the Hellenic Republic as part of its privatization program.
2002: Combined offering of existing shares sold by the Hellenic Republic and the Public
Enterprise of Negotiable Securities S.A.
Based on the 14.2.2002, 9.5.2002 and 19.6.2002 decisions of the Inter-ministerial Committee of
Privatizations a combined offering of existing shares owned by the Hellenic Republic and the Public
Enterprise of Negotiable Securities S.A. was decided.
The Hellenic Republic and the Public Enterprise of Negotiable Securities S.A., on July of 2002, offered
18,9% of the Company’s shares through a Combined Offering to institutional and non institutional
investors in Greece, to international institutional investors, and, through a private placement to the
Company’s employees. The private placement participants received a 10% discount to the offer price. The
negotiation of the existing shares offered through the combined offering begun on July 18th, 2002. The
Hellenic Republic also, distributed one free ordinary share for every ten ordinary shares of which one
investor, other than the institutional investors, held them for at least six months (with a maximum number
of two hundred (200) total free shares per investor), as a retention incentive, resulting to the offering of
an extra 0,007% of the Company’s share capital to the investing public. The proceeds from the public
offering were collected by the Hellenic Republic as part of its privatization program.
2002: Introduction of SUPER 3 and EXTRA 5
On November 25th, 2002, the Company initiated the conduct of two new numerical lottery fixed odds
games, SUPER 3 and EXTRA 5. SUPER 3 is based upon the prediction of one to three numbers from a
three digit number drawn three times per day. EXTRA 5 is based upon the prediction of five numbers out
of thirty five numbers with daily drawings.
2003: New Interstate Agreement between the Hellenic Republic Government and the Cypriot
Republic Government
On February 12th, 2003 a new interstate agreement was signed between the Hellenic Republic
Government and the Cypriot Republic Government, according to which the organization, operation,
conduct and management of the games PROPOGOAL, PROPO, LOTTO, PROTO, JOKER, SUPER 3, EXTRA 5
and ΚΙΝΟ is admitted by OPAP S.A. in Cyprus. The new interstate agreement, in effect from January 1st,
2003, substitutes a series of previous interstate agreements that exist since 1969. Although all existing
agreements anticipated the conduct of the Company’s operations in Cyprus on a non profit speculative
basis, the new interstate agreement sates that from January 1st, 2003, OPAP S.A. will have a financial
benefit from its operations in Cyprus.
2003: Offering of a Third Block of Shares of the Company through the Athens Exchange.
Based on the 17/12.03.2003 and 26/20.06.2003 decisions of the Inter-ministerial Committee of
Privatizations a combined offering of existing shares owned by the Hellenic Republic and the Public
Enterprise of Negotiable Securities S.A. was decided.
The Hellenic Republic and the Public Enterprise of Negotiable Securities S.A., in July 2003, offered
Hellenic Republic also, distributed one free ordinary share for every ten ordinary shares to private
investors (other than institutional investors), with the condition to hold them for at least six months as a
retention incentive (with a maximum number of two hundred (200) total free shares per investor).
Page 25
2003: Introduction of “KINO”
OPAP S.A. initiated on 3.11.2003 the new KINO game, initially in the region of Rethymno in the island of
Crete and up to the end of year 2003 the game expanded in the whole island in addition to the regions of
Magnesia and Larisis with five minute lotteries on a daily basis for five hours per day.
2003: Acquisition of companies OPAP Glory Ltd, Glory Technology Ltd and establishment of
OPAP (CYPRUS) Ltd.
OPAP S.A., based on an agreement, acquired 90% of OPAP GLORY LTD share capital at the price of €
16.000.000. The acquisition was done through the Company’s own capital and the price value was based
upon the valuation of the company by independent certified companies. The company’s main activity is
the management of Collective Payout Companies and Receivers of Collective Payouts that operate within
the Cyprus Republic.
Additionally the Company acquired 20% of GLORY TECHNOLOGY LTD share capital, based on an
agreement, at the price of € 10.000.000. The acquisition was done through the Company’s own capital
and the price value was based upon the valuation of the company by independent certified companies.
The company’s main activity is the provision of computer information services and the planning, organizing
and development of high technology systems in the C.I.S sector. The company specializes in the area of
sports fixed odd betting games in Cyprus and it is the only Cypriot company that has been inspected and
has secured the approval, from the Finance Minister of the Cyprus Republic on 3/11/2003, for the use of a
complete computerized solution on the area of FIX ODDS games in the Cyprus Republic.
Last, OPAP S.A. established (100% shareholder) in Cyprus the company OPAP CYPRUS LTD on August
14th, 2003 which is governed today from Law 34 (ΙΙΙ)/2003 which sanctions the agreement between the
Hellenic Republic and the Government of the Republic of Cyprus, in terms of the organizational rules, the
rules of operation, conduct and management of games conducted by OPAP S.A. The company’s main
activities refer to the organization, operation, conduct and promotion-advertising of all OPAP S.A. games
(except PAME STIHIMA) conducted in Cyprus.
2004: Completion of “KINO” game expansion in Greece
During the year 2004, KINO gradually expanded in the rest regions of Greece and in Cyprus and
completed its disposal in the region of Attica in the beginning of October of 2004. From 17/1/2005 KINO is
played for seven hours per day.
2004: Establishment of two new Subsidiary Companies
On 22/01/2004 OPAP S.A. established in Cyprus a new subsidiary by the name OPAP INTERNATIONAL
LTD, with the objective to support the strategic expansion of the Company’s operations abroad in addition
to the coordination of the subsidiaries based in Cyprus OPAP CYPRUS LTD, OPAP GLORY LTD, OPAP
INTERNATIONAL LTD and GLORY TECHNOLOGY LTD. Also in July of 2004 OPAP S.A. established in
Greece the subsidiary company by the name OPAP SERVICES S.A., with the objective to exploit the
potential given by the Company’s sale network and in general the Athletic sector (provision of services and
organization of athletic and cultural oriented activities, ticket issuing and trade for athletic, cultural and
other recreational activities, formation of a uniform corporate image regarding the points of sale, setting
up exemplary agencies etc).
6.3. Company’s Operations
6.3.1. Subject of Operations
The Company’s scope of operations is the organization, operation and conduct of lottery games. The
Company today conducts six numerical lotto games (JOKER, LOTTO, PROTO, SUPER 3, EXTRA 5 and
ΚΙΝΟ) and three games related to sport events (PAME STIHIMA-in cooperation with INTRALOT S.A. JointVenture-, PROPO and PROPO-GOAL).
6.3.2. Turnover (sales) Analysis
The table below analyzes the Company’s turnover (sales) per game in addition to their progress during
fiscal years 2002-2004:
(€ in thousands)
Game
PROPO
2002
%
change
2003
%
change
2004
66.353
3,9%
80.136
20,8%
78.608
% Total 2002change
2004
-1,9%
Page 26
225.097
LOTTO
PROTO
PROPO-GOAL
JOKER
PAME STIHIMA
SUPER 3
EXTRA 5
ΚΙΝΟ
TOTAL
80.417
52.953
2.206
220.637
1.511.410
20.272
13.447
1.967.695
5,8%
1,3%
-2,3%
-24,2%
15,0%
9,4%
64.726
45.957
2.466
207.145
1.647.693
148.028
52.287
10.847
2.259.285
-19,5%
-13,2%
11,8%
-6,1%
9,0%
630,2%
288,8%
14,8%
55.583
43.586
1.664
250.272
1.601.340
116.542
32.752
887.568
3.067.915
-14,1%
-5,2%
-32,5%
20,8%
-2,8%
-21,3%
-37,4%
8.082,6%
35,8%
200.726
142.496
6.336
678.054
4.760.443
284.842
98.486
898.415
7.294.895
Notes: (1) Possible differences in totals are due to number rounding
(2) The introduction of SUPER 3 and EXTRA 5 took place on 25/11/2002 and thus the revenues from these two games
contribute to the total turnover (sales) of year-end 2002 only for the period from 25/11/2002 to 31/12/2002. The
introduction of ΚΙΝΟ took place on 3/11/2003, through a limited number of agencies, and thus the revenues from this
game contribute to the total turnover (sales) of year-end 2003 only for the period from 3/11/2003 to 31/12/2003.
During the year-end 2004, KINO gradually expanded to the whole of Greece and Cyprus.
The basic factor that influences the demand of each Company’s game, is the introduction of new, mainly
of same characteristic, lottery games, which result in a decreased interest for the existing games on behalf
of the players (see par. 10.1 “Operations”).
The table below depicts the percentage analysis, per game, of the Company’s turnover (sales) for the
fiscal year-end period 2002-2004:
2002
2003
2004
Game
PROPO
3,4%
3,5%
2,6%
LOTTO
4,1%
2,9%
1,8%
PROTO
2,7%
2,0%
1,4%
PROPO-GOAL
0,1%
0,1%
0,1%
JOKER
11,2%
9,2%
8,2%
PAME STIHIMA
76,8%
72,9%
52,2%
SUPER 3
1,0%
6,6%
3,8%
EXTRA 5
0,7%
2,3%
1,1%
ΚΙΝΟ
0,5%
28,9%
TOTAL
100,0%
100,0%
100,0%
Note: (1) The introduction of SUPER 3 and EXTRA 5 took place on 25/11/2002 and thus the revenues from these two
games contribute to the total turnover (sales) of year-end 2002 only for the period from 25/11/2002 to 31/12/2002.
The introduction of ΚΙΝΟ took place on 3/11/2003, through a limited number of agencies, and thus the revenues from
this game contribute to the total turnover (sales) of year-end 2003 only for the period from 3/11/2003 to 31/12/2003.
The table below depicts the turnover (sales) analysis per geographical markets during the last three year
period:
(€ in thousands)*
TOTAL DOMESTIC
MARKET
TOTAL INTERNATIONAL
(CYPRUS) (1)
TOTAL TURNOVER
(SALES)
2002
% on
turnover
(sales) 2002
2003
% on
turnover
(sales) 2003
2004
% on
turnover
(sales) 2004
1.934.224
98,3%
2.230.631
98,7%
3.067.915
100,0%
33.471
1,7%
28.654
1,3%
0
0,0%
1.967.695
100,0%
2.259.285
100%
3.067.915
100,0%
(1) It should be noted that the reduction in international sales (Cyprus) by 14,4%, for fiscal year-end 2003
compared to fiscal year-end 2002, and specifically to the amount of € 28.654 thousand against € 33.471
respectively, is due to the fact that the amount of fiscal year-end 2003 refers to sales that took place for
the period starting from 1.1.2003-30.9.2003. The remaining sales of the 4th quarter of fiscal year-end
2003 amounting to € 13.824 thousand are presented through the consolidated turnover (sales) of the
Company and refer to the sales of the subsidiary OPAP (CYPRUS) LTD in addition to the fiscal year-end of
2004 were all international sales are presented in the consolidated turnover (sales).
6.3.3. Conduct Regulation and Procedures of Games
General Operation Terms of Games
Page 27
Following the Company’s B.D. decision in addition to the approval by the Ministry of Economics and
Finance and the Ministry of Culture the “General Games Operations and Conduct Rules” of OPAP S.A. was
formed and published, which sets out each game’s participation terms, the participation validity, the
establishment of the Control Committee, the ticket cancellation, success (winners) selection, winning
payouts and other terms. In addition, with regard to each game, the “Rules of Operation” are published
which are approved by the Ministers of Economics & Finance and Culture and quote the characteristics,
the operation and organization of each game, the financial terms and conditions, the winning percentages
distributed to players, the agency commissions and the analysis of distributed profits to the winners of
each wining category.
PAME STIHIMA
The Company introduced the PAME STIHIMA game on January 28th, 2000 and in 2004 it remained the
Company’s most successful game in terms of sales. For 2004, the Company’s revenues from the game
contribute by 52,2% to its total revenues. The PAME STIHIMA revenues amounted to € 1,6 billion in 2004
against € 1,65 billion in 2003 and € 1,5 billion in 2002.
PAME STIHIMA is a betting fixed odds (where the profit payouts id fixed and known to the players before
bets are placed) or variable odds game (where the profit payouts alter according to the betting amounts
and players are notified only after the end of the betting period). Fixed or variable odds bets are based
upon all individual o collective games (for example Formula 1, football matches, basketball matches,
international tennis games and other athletic events) in addition to occurrences whose nature offers the
conduct of betting. The most significant athletic events that PAME STIHIMA is currently based upon is the
UEFA Champions League, the European (National teams) Football Championship, the English, Italian,
Spanish, French and Germany Football Championships. PAME STIHIMA schedules currently do not include
Greek football or basketball matches or any other athletic or non athletic events that is organized through
physical or legal entities operating according to the Greek legislation. Up to today the Company has not
conducted bets on non athletic events.
Every bet regards the accurate forecast of the results of a variable number of events (from 1 to 10)
between a series of events determined in each program (up to 216 events).
PAME STIHIMA is played on a daily basis. The wagering amount of PAME STIHIMA is set to € 0,30. The
maximum wagering amount that a player can bet on a PAME STIHIMA ticket is € 29.350. There is no
maximum number of tickets that can be purchased by one player.
The target payout to the players is 60% of the gross yearly revenues of PAME STIHIMA but since it is a
fixed odds betting game the real amounts distributed as profits to the participants vary in each game and
depend upon the amount wagered by each participant and the payout that as been predetermined on the
results that were correctly predicted. It should be noted that the maximum amount distributed as a profit
to the participants is € 733,7 thousand per ticket. PAME STIHIMA and KINO have up to today, the biggest
profit payout, on a yearly basis, to the winners from all other games conducted by the Company.
OPAP S.A. attends to the collection of wagers from the PAME STIHIMA participations. PAME STIHIMA
participation wagers are collected from the agencies. The agent’s commission for the services provided to
players is set at 8%. Additionally, an average of 8,7% of the proceeds from each PAME STIHIMA draw is
paid to the INTRALOT S.A. Joint-Venture, based upon a specific calculation commission formula which is
set out in the contract between OPAP S.A. and the INTRALOT S.A. Joint-Venture.
PAME STIHIMA is conducted by OPAP S.A., whereas certain parts of the games operation have been
assigned to the INTRALOT S.A. Joint-Venture for a period of 7 years ending January of 2007. Information
concerning the above mentioned contract is presented in section 6.5 “Contracts”.
JOKER
JOKER is a numerical lottery game. The Company initiated its conduct in 1997 in response to the declining
revenues from LOTTO. The conduct of JOKER yielded revenues amounting to € 250 million in 2004 against
€ 207 million in 2003 and € 221 million in 2002.
JOKER is played within the agencies and it is based upon drawing five from 45 numbers from the first
ticket field and one from 20 numbers from the second ticket field. Every draw regards the precise
prediction of five numbers that are drawn from one drawing machine which contains 45 numbers and one
number which is drawn from a second drawing machine and contains 20 numbers. The six numbers (five
plus one) drawn from both drawing machines determine the winners. JOKER drawings are done publicly
Page 28
twice a week, every Thursday and Sunday and are broadcasted live on the television and through the
radio. The drawing results are also available through a special telephone line that is destined for that
specific use.
The wager for each single combination is set to € 0,30. Participants have the capability, with an additional
charge, to select more combinations by ticking more than five numbers on the first ticket field and more
than one numbers to the second ticket field.
The wining categories are determined from the number of predictions ticked by the player in every ticket
field that coincides with the numbers drawn from the drawing machine for each field.
The amount distributed as a profit to the JOKER participants is 50% of the gross drawing revenues. If
there is no winner to one of the eight categories, or if to a particular category the corresponding amount
to every winning is smaller than € 0,30, then the corresponding amount is not distributed to the winners,
but is transferred to the next draw and is added up to the amount shared by the same category. If the
profit corresponding to each wining turn of a particular wining category is bigger from the respective profit
of the highest category, the amounts of these two categories are summed up and the profit is equally
shared between the winners of these two categories. One column that wins in one category can not win in
a lower category.
JOKER wagers are collected from the agencies. From that amount 12% commission is paid to the agent
for the services provided to the participants.
LOTTO
LOTTO is a traditional lottery game which in the past was considered as one of the most successful games
of the Company. However, in recent years LOTTO’s popularity has decreased due to the introduction of
new games from the Company. LOTTO’s conduct has generated revenues of € 55,6 million in 2004 against
€ 64,7 million in 2003 and € 80,4 million in 2002.
LOTTO is based on the accurate prediction of 6 numbers that are drawn from a total of 49 numbers, from
number 1 to 49. The six numbers drawn from the drawing machine determine the winners. LOTTO’s
drawings are broadcasted on the television and through the radio and take place twice a week, every
Wednesday and Saturday. The drawing results are also available through a special telephone line that is
destined for that specific use.
Players can play LOTTO in every agency, by ticking a minimum of two sets of six numbers from the three
available fields of each LOTTO ticket. The price for each LOTTO wager is € 0,15 per set (that is, the
minimum wage for each ticket is € 0,30). Players have the capability, at an additional charge, to select
more than two sets, by ticking an extra set of six numbers to the third available set of the LOTTO ticket or
by ticking more than six numbers per field.
The amount distributed as a profit to the LOTTO participants is 45% from the gross drawing revenues
after the subtraction of the agent’s commission (that is, 39,6% of the total amounts played in each draw).
The participation wager is collected from the agencies. From that amount 12% commission is paid to the
agent for the services provided to the participants.
PROPO
The conduct of PROPO generated revenues to the Company amounting to € 78,6 million in 2004 against €
80,1 million in 2003 and € 66,4 million in 2002. PROPO targets a clientele interested in football and is
played mainly by men.
The game of PROPO regards the accurate forecast of the result of a thirteen series of football games and
an additional game with the discrete numbering S 13 (SUPER 13). In SUPER 13 the players that win are
the ones that forecasted correctly the results of the 13 football matches plus one football match that has
the discrete mark “SUPER 13”.
PROPO gives the opportunity to the players to forecast the results of several football matches, including
mainly Greek, English, Italian, German and Spanish Football Championships. The football matches that
constitute the forecasting ticket of each PROPO are selected by OPAP S.A. after the recommendation of
the Ticket Composition Special Committee. This committee has ten members and is composed from 7
members of the Editor’s Association of Daily Morning Newspapers of Athens and more specifically of the
Page 29
Association of Sports Editors with experience in football matters, and with their equivalent substitutes, one
representative of the Hellenic Football Federation (H.F.F.), one representative of the Greek Union of
Societe Anonyme Football Federations (prior Football Societe Anonyme Association) and one
representative of the Pan Hellenic Federation of Professional PROPO Agents (P.F.P.P.A). The appointment
of the Committee’s members is done through a decision of the Company’s Board of Directors.
PROPO takes place from one to three times per week, Wednesday, Saturday and Sunday, depending to
the football match schedule. The results are broadcasted on the television and through the radio. The
drawing results are also available through a special telephone line that is destined for that specific use.
PROPO tickets constitute Greek and European football matches. The PROPO wager is € 0,10 per column
with an obligatory filling of at least two columns (that is, the minimum price for one PROPO ticket amounts
to € 0,20).
Based on the number of the correct football match result forecasts, the winners are classified to the
following categories: a) the special category 13+1 includes the winners that correctly forecasted the
results of 13 football matches plus the additional football match depicted as “SUPER 13”, b) the first
category includes the winners that correctly forecasted the results of 13 football matches, c) the second
category includes the winners that correctly forecasted the results of 12 football matches and d) the third
category includes the winners that correctly forecasted the results of 11 football matches.
The agency commission is 12% of the gross revenues of every PROPO game. Based upon an enactment
law the H.F.F. receives 1,3% from the total bet amounts of each game whereas the percentage received
by the Football Societe Anonyme Association, if the PROPO ticket includes Greek football matches is 9,3%
from the total bet amounts of each game. The amount distributed as a profit to the participants in PROPO
is 53% of the gross revenues of the game after the subtraction of the above mentioned percentages (that
is 41,0% of the total amounts wagered in every draw).
PROTO
The conduct of PROTO generated to the Company revenues amounting to € 43,6 million in 2004 against €
46 million in 2003 and € 53 million in 2002.
PROTO is included on the tickets of all the Company’s games, except PAME STIHIMA, SUPER 3 and EXTRA
5 KINO, but can also be played independently. PROTO is based on the drawing o a seven-digit number
from one drawing machine that contains seven series of numbers from zero to nine, where every digit is
selected from one of the seven series of numbers. The seven-digit number drawn from the drawing
machine determines the winners. Based upon the numbers drawn, winners are classified in six categories
depending on the number of digits matched in addition to whether these digits have the correct sequence,
either from the beginning or from the end of the numbers.
PROTO drawings are broadcasted on the television and take place twice a week, every Thursday and
Sunday. The drawing results are also available through a special telephone line that is destined for that
specific use. When the player purchases a JOKER, LOTTO, PROPO and PROPOGOAL ticket the agencies
terminal automatically issues a random seven-digit PROTO number, which is printed on the numerical
lottery ticket. The player can select to take part in the PROTO draw by depositing the amount of € 0,30 in
order to activate the PROTO number.
The amount distributed as a profit to the participants of PROTO is 60% of the gross revenues of each
draw after the subtraction of the agent commission (that is, 52,8% of the gross revenues). If there is no
winner in one of the six categories, the amount won by this category is transferred to the next draw and is
added to the amount that is distributed as a profit to the winners of the corresponding category.
The participation wager is collected from the agencies. From that amount 12% commission is paid to the
agent for the services provided to the participants.
SUPER 3
The conduct of SUPER 3 initiated on November 25th, 2002 and generated revenues amounting to € 116,5
million in 2004 against € 148 million in 2003 and € 20,3 million in 2002. SUPER 3 is a numerical fixed odds
lottery game based on the prediction of one up to three digits from a three-digit number, which is drawn
three times a day.
Page 30
Draws are taking place through complete cryptographic electronic program that produces random
numbers. Up to April 7th, 2003 two draws were conducted on a daily basis and since three draws are
conducted on a daily basis. (at 2:00 p.m., 6:00 p.m. and 9:00 p.m.), for the whole week. The SUPER 3
results are broadcasted on the television and through the radio. The drawing results are also available
through a special telephone line that is destined for that specific use, in addition to the Teletext and the
Company’s website on the internet.
The player, in each ticket, has the opportunity to select between four different types of games, which are
differentiated according to the number of digits the player has to predict in addition to the correct
sequence of the predicted digits to the three digit number drawn.
Players select at least one digit from at least one of the three digit columns from zero up to nine, which
are included in the SUPER 3 ticket.
The wager for each simple SUPER 3 column (a column is defined every three-digit number o two-digit
number or one-digit number) is € 0,50. Players have the capability, with an additional cost, to select more
columns by selecting more numbers into one or more of the three number series and in addition to that
they have the capability to multiply their bet for every SUPER 3 column and the possible profits, using a
multiplier (2, 3, 4, 5, 6, 10, 20, 50 and/or 100). Alternatively, the player has the capability of a random
number pick from the agency terminal. Additionally, the player has the capability to participate with the
same ticket in up to 10 consecutive draws.
The percentage target of the total payout of profits to the players is 60,0% of the yearly gross revenues.
Given that SUPER 3 is a fixed odds game, its real profit payout to players for every given period might be
smaller or bigger the percentage target.
The amount of profits that are deposited to each winner depend from the amount waged by the player in
every column and from the game’s type. The maximum amount that a player can win with one ticket in
one draw from one winning column amounts to € 120.000 and minimum € 3,00.
The SUPER 3 wagers are collected from the agencies and from that amount, 8,0% related to the agent’s
commission for the services provided to the participants.
EXTRA 5
The conduct of EXTRA 5 initiated on November 25th, 2002 and generated revenues amounting to € 32,8
million in 2004 against € 52,3 million in 2003 and € 13,5 million in 2002.
EXTRA 5 is a numerical fixed odds lottery game based upon the prediction of five numbers from 35
numbers, from 1 up to and 35. The five number draw is taking place through a complete cryptographic
electronic program that produces random numbers. Draws are taking place on a daily basis and are
broadcasted on the television and through the radio. The drawing results are also available through a
special telephone line that is destined for that specific use, in addition to the Teletext and the Company’s
website on the internet.
EXTRA 5 tickets are submitted to the agencies by picking five numbers from one of the three available
fields of the 35 numbers of each EXTRA 5 ticket. Alternatively players also have the capability of a random
pick of five numbers from the agency’s terminal. The wager for every column of EXTRA 5 is € 0,50. With
an additional charge, players can select more than five numbers from one of the three available fields of
the EXTRA 5 ticket. Additionally, players can participate with the same ticket in up to 7 consecutive draws.
In EXTRA 5 the winning categories are determined from the amount of the correctly predicted numbers.
Players that have predicted all five numbers are classified in the first winning category, players that have
predicted four out of five numbers are classified in the second winning category, and the players that have
predicted three out of five numbers are classified in the third winning category.
The profits of the three winning categories of EXTRA 5 are determined as follows:
Winning Category
1st winning category
2nd winning category
3rd winning category
Distributed profits
€ 50.000
€ 125
€5
Page 31
The percentage target of the total payout of profits to the players is 56,0% of the yearly gross revenues.
Given, though, that EXTRA 5 is a fixed odds betting game, its real payout of profits in any period can be
bigger or smaller from the target. Given that the total profits of the first winning category can not exceed
the amount of € 500.000 in every draw, in the case where in one draw there are more than 10 winners of
the first wining category, the amount of € 500.000 is equally distributed between the winners and the
profits of each winner will be less than € 50.000.
The EXTRA 5 wager is collected by the agencies and from that amount 12% is kept by the agent as a
commission for the services provided to the participants.
PROPO-GOAL
PROPO-GOAL generates to the Company very small revenues and the game serves a limited clientele. The
games conduct generated revenues amounting to € 1,7 million in 2004 against € 2,5 million in 2003 and €
2,2 million in 2002.
PROPO-GOAL is a game relevant to athletic events. Winners have to correctly predict the football games
(conducted in Greece or abroad) wit the highest number of goals. Players must correctly predict the eight
football games from the thirty, which will have the highest number of goals. The football games that
constitute each PROPO-GOAL ticket are selected by OPAP S.A. after the Committee’s recommendation that
selects the matches of the PROPO ticket.
PROPO-GOAL is conducted every Sunday that football matches are also conducted. The PROPO-GOAL
wager is deposited to the agencies. There is an obligatory filing of at least two columns of eight football
games from the thirty in each weekly PROPO-GOAL ticket. The PROPO-GOAL wager is € 0,10 per column.
Participants have the capability, with an additional cost, to select more columns by selecting more than
eight games.
The amount distributed as a profit to the participants of PROPO-GOAL is 45% of the gross revenues of the
draw, after the subtraction of the agent commission 12% (that is, 39,6% of the gross revenues of each
draw). Based upon an enactment law the H.F.F. receives 1,3% from the total bet amounts of each game
whereas the percentage received by the Greek Union of Societe Anonyme Football Federations (prior
Football Societe Anonyme Association), if the PROPO-GOAL ticket includes Greek football matches is 9,3%
from the total bet amounts of each game. If there is no winner in one of the three categories, the profits
that were to be distributed in that category are transferred to the next draw and are added to the amount
shared by the corresponding category
ΚΙΝΟ
OPAP S.A. initiated on 3.11.2003 the KINO game, initially in the region of Rethymno in the island of Crete
and up to the end of year 2003 the game expanded in the whole island in addition to the regions of
Magnesia and Larisis with five-minute lotteries on a daily basis for five hours per day. During the year
2004, KINO gradually expanded in the rest regions of Greece and in Cyprus and completed its disposal in
the region of Attica in the beginning of October of 2004. From 17/1/2005 KINO is played for seven hours
per day. ΚΙΝΟ generated revenues amounting to approximately € 888 million in 2004 against € 10,8
million of the period 3.11.2003 to 31.12.2003.
ΚΙΝΟ is a numerical fixed odds lottery game with draws that take place every 5 minutes and are
transmitted through decoders within the agencies. In each draw, 20 numbers are drawn from a total of 80
numbers through an electronic algorithm. Players can select between 12 different types of games, where
every type is differentiated according to the amount of numbers that each player selects. Each game type
has its own winning categories and its own profit ratios. In each game type there are different in total
probabilities for the player to win, ranging from 1 to 2,27 up to 1 to 15,73. In the type of games with 12,
11 and 10 numbers, players win even if they have not correctly predicted any of the 20 numbers of each
draw.
As a calculation base of the fixed odds profit shares, for each draw a 70% of the gross game revenues are
taken into consideration, which is the biggest payout given by OPAP S.A., depending on the type of game.
It is possible though that in game draws the profits to be distributed to winners to exceed or fall short
from the above-mentioned percentages of calculation due to the fact that KINO is a fixed odds game. The
maximum amount shared as a profit to the winners of the 1st category of each draw, to each of the game
types of the 12, 11 and 10 numbers amounts to € 1.000.000. In the case that the analogous amount
exceeds the previous mentioned amount, then the distribution of the € 1.000.000 to the corresponding
winners, is done in shares depending on the value of each participating ticket.
Page 32
The agent commission is 7%. A percentage of 1% of the value of a simple participation, with the
Company’s B.D. decision, is attributed to the subsidiary company OPAP SERVICES S.A. for the
technological equipment and the general improvement of the agency’s infrastructure.
New Games
The Company based upon the concession contract has the following new games, whose regulations have
been approved by the Ministers of Economics & Finance and Culture:
BINGO has a weekly cycle. The total distributed profit will be 60% of the total amounts that will be
deposited fro the participation, with 12% being deposited to agents as a commission. The Company within
2005 will conclude all technical feature matters for the game’s introduction, and the exact introduction
time will depend upon the course of the existing games.
SUPER 4 is a numerical fixed odds lottery game, based on the prediction of a four-digit number. Up to now
the game’s introduction date has not been determined.
Readjustments of Games
Last, the Company plans within the year-end of 2005 to proceed with some readjustments of existing
games in order to restore the player’s interest.
Payment of Prize Money
Upon the verification from the C.I.S. of the Company through the agent terminal machines, winnings of up
to € 5.000 per ticket are paid directly and immediately by the agent. For winnings over € 5.000, winning
tickets are submitted to the Company or to a credit institution authorized by the Company and the
payment of winnings takes place after seven days from the draw date or the wagering event (that is, with
the lapse of the six day objection submission period), except PAME STIHIMA, SUPER 3, EXTRA 5 and ΚΙΝΟ
where winnings over € 5.000 are paid after three days from the date of the wagering event (that is, until
the winner’s information are forwarded to the respective credit institution). Players can not collect
winnings for games after the lapse of six months from the date of the draw or wagering event, except
from PAM STIHIMA, SUPER 3, EXTRA 5 and ΚΙΝΟ, where players can not collect winnings after the lapse
of three months from the date of the wagering event.
It should be noted that the Company is obligated to distribute to the players the winnings that have not
been collected from the winners. The distribution of these profits is realized though:
-cash which increases the distributed amount as profit to the winners of the first category of games ,
-a draw, which takes place once or twice per year where players can win residencies, cars, vacation
packages and other relevant prizes.
Payment of Collected Wagers
Agents deposit to OPAP S.A directly the amounts collected after they subtract their commission and any
profits that they may have paid to winners. Every week is divided into two settlement periods (the first
from Tuesday morning to Thursday evening and the second from Friday morning to Monday evening).
Payments from agents to the Company are due after the lapse of each settlement period and are
deposited to the bank accounts of the Company to the credit institutions authorized by the Company. In
order for the agents to have cash at hand to pay profits to winners, the Company allows them to settle
their debt until the following Monday for the first settlement period and until the following Thursday for
the second settlement period.
Technology Information Systems
The Company’s terminal network, which is installed in its agencies, is interconnected with the central
processing center of the Company with on line lines provided by HELLAS PACK.
Tickets are submitted in the terminals and the data is transferred to the central processing center. The
whole critical processing of data, including the identification and verification of winning tickets and the
transaction settlement with agents, is being conducted through the central processing center. Winning
Page 33
deposits of the respective tickets (up to an amount which is determined by the Company’s B.D.) is done
through the on-line agent terminal machines independent of where the ticket was submitted.
The maintenance of our central processing system is done by INTRAKOM S.A., based on a contract signed
on 17/2/1997. Based on the above contract, INTRAKOM S.A. has further developed and expanded the
existing I.T. system, developed and installed the platform of the software regarding the numerical lotteries
LOTOS (Lottery Operating System developed by INTRALOT S.A.), upgraded the existing and supplied the
Company with new agency terminal machines. Also, INTRAKOM S.A. provides services that relate to the
installation and maintenance of the above and in general the operation of the information technology
system. The maintenance contract of the technology center and the maintenance contract of the agent’s
terminal machines have expired from the 2/2004 and 10/2004 respectively. INTRAKOM S.A. continues to
render the above services and through the Company’s Board of Director decision, INTRAKOM S.A. is paid
the fee that had been agreed in the expired contracts. Already the Company is under negotiation with
INTRAKOM S.A. for the signing of new maintenance contracts.
As part of the Company’s plan to undertake the biggest part of the information technology intra-company
operations, the Company, though a public bid proclamation, proceeded in hiring 75 employees on a
permanent basis with a specialization in I.T. These new employees will be responsible for the operations
of the I.T. systems of OPAP S.A., a service rendered today by INTRAKOM S.A. based on the above. Based
on the contract between OPAP S.A. and INTRAKOM S.A., the latter will train, for a transition period of six
months, the above employees. During this period INTRAKOM S.A. will continue to provide the I.T. services
that the new employees will undertake at the end.
The Company also has a system independent from the previous one for its needs regarding the
administrative and financial applications, which are gradually developed and installed in the system. The
two systems are connected to each other in order for the second to draw data from the first. Within the
Information Technology System of the administrative and financial applications, the Company develops a
complete Administrative Organizational and Information System which includes, except from the
Management Information System (MIS) for the monitoring, valuation, and exploitation of all the
information that are produced and traded through the informational systems and a series of additional
systems, for the effectiveness and performance improvement of the Company’s operations. Amongst
these, the CRM, Complete Human Resource Management System, Geographical Informational System,
Electronic Data management System in addition to the Company’s website in the Internet.
Game Security
The reliability and transparency in relation to the conduct of the Company’s games is secured through the
existence of satisfactory security mechanisms relating to their on-line I.T. conduct in addition to the
operation of special committees during the organizational and game conduct stages and procedures. In
order to ensure the above the Company follows the practices listed below:
Α) Security Mechanisms in the on-line I.T. conduct of lottery games
The Company’s I.T. system secures the integrity of the data saved within the terminal machines in
addition to the central data base, as well as during their network transfer. This is achieved through a
hierarchy security network mode to the terminal machine level, to the network and the central system.
The lottery draws for SUPER 3, ΕΧΤRΑ 5 and ΚΙΝΟ are taking place electronically, with complete
independent cryptographic systems of a secure genesis of fake random numbers that have been
materialized and certified by supreme university research organizations. These systems are installed and
operate in a specially designed and insured space in which access is granted only to the members of the
Control Committee with an obligatory simultaneous presence of two members of the Committee. Systems
are connected with the Central Conduct Game System, in such a way so as to secure the sole broadcast of
the lottery numbers being produced, without the capability of any other communication or electronic
access to it.
Additionally the Company plans to install a Disaster Recovery Center.
Β) Control, Winners Nomination and Objection Trials Committee
For the control and confirmation of the integrity and validity of the transaction data of all lottery games
that have been recorded to the central computer of OPAP S.A., for the authentication of the winner’s
nomination and the trial of possible objections responsible is the 15 member Control, Winners Nomination
and Objection Trials Committee which was formed from state officials-public employees and experts,
Page 34
following the issuance of the relative Joint Ministerial Decisions of the Ministers of Economics and Culture
qualified for Cultural matters (J.M.D. F-17588/18.7.2001, Official Legal Notice Issue 947/24.7.2001 &
J.M.D. 27385/5.10.2001, Official Legal Notice Issue 1297/8.10.2001).
The Committee has the access right to every relevant, to its task, information and can proceed to any
necessary actions. For the expedition of its task the Control Committee has at its disposal a – independent
from the Central – system of computers together with the necessary software. This system is installed and
operates within a room, which is secured with three different keys. In order to be opened so that there
can be a physical entry within the room the presence of at least three members of the Committee is
required.
Apart from the Control, Winners Nomination and Objection Trials Committee there are also special
committees that are operational on subsequent stages and procedures of the organization and conduct of
games listed below:

LOTTO-PROTO-JOKER Lottery Drawing Committee
PROPO and PROPOGOAL Ticket Composition Committee
PROPO Evaluation Committee
PROPO Drawing Committee
6.4. Agency Network
The Company’s conduct of games is taking place through a network of 5.332 agencies with one or more
terminals, connected on-line with the central information system of the Company in Athens. In the Attica
region (including Athens and Piraeus) the number of agencies amount to 2.202, in Central and Southern
Greece (including the islands) there are 1.465 agencies and in Northern Greece 1.665 agencies. Agents
deposit their game earnings directly to the Company after they subtract their proportional compensation
(7% to 12%, depending on the game) and any profits that they have distributed to the game winners.
The table below depicts the geographical allocation of the Company’s registered agencies in Greece on
December 31st, 2004:
Geographical Regions
Attica
Peloponnese
Continental Greece (Sterea Euboia)
Epirus
Crete
Dodekanese
Aegean Islands
Ionian Islands
Central and Southern Greece
Macedonia
Thessaly
Thrace
Northern Greece
TOTAL
Registered Agencies
2.202
474
334
152
210
103
116
76
1.465
1.217
342
106
1.665
5.332
In addition to the above the Company’s subsidiary OPAP (CYPRUS) LTD has 154 agencies in Cyprus
through which the Company’s games are conducted excluding PAME STIHIMA. Also, subsidiary OPAP
GLORY LTD has a network of 103 agencies (51 of which are also agents, for the time being, of OPAP
(CYPRUS) LTD) through which the company conducts fixed odds betting games.
6.4.1. Relationship with Authorized Agents
Page 35
The Company’s current relation with its authorized agents is governed by the regulations of the agencies
operation through Ministerial Decisions from The Minister Of Culture.
The Regulation of Agencies Operation – Obligations and Rights of OPAP Agents (hereon “Regulation of
Agencies Operation”) was approved by the Ministerial Decision 25148/1999 (Official Legal Notice Issue Β’
2004/11.11.1999).
It should be noted that The Pan Hellenic Federation of Professional PROPO Agents (P.F.P.P.A) and two
agents of OPAP S.A. have petitioned to the State Council for the abrogation and suspension of the
execution regarding the Regulatory Decision of the Deputy Minister of Culture responsible for Athletic
matters, n. 2518/2003, which constitutes the “Regulation of Agencies Operation” (Official Legal Notice
Issue Β 124/5.2.2003).
OPAP S.A. on 24.3.2003 submitted a Memorandum before the State Council for the dismissal of the
abrogation application execution of the Regulation of Agencies Operation. Upon the Suspension
Application exercised after the deposition of the Abrogation Application against the new Agency
Regulation, decision n. 377/2003 was issued from the Suspension Committee of the State Council with
which the Suspension Application is approved. The Suspension Committee’s decision suspends, until a
decision is reached regarding the Abrogation Application, the implementation of the regulation. Given that,
from the result relating to the above memorandum, the implementation of the new Agency Regulation is
suspended, the Agency Regulation of 1999 comes to effect.
Based on the Agencies Regulation of 1999, the Company can grant agency licenses that cover all existing
games, in addition to new games that will be introduced in the future. Additionally the Company has the
right to issue licenses for new games, e.g. KINO also to other distributing organizations.
Agents are obligated to deposit approximately € 600 as a guarantee to the Company. These deposits are
summed up and are at the Company’s disposal in case there is a violation regarding the agent’s payment’s
obligation. At the end of each fiscal year, interests that may arise from the above mentioned guarantees,
during the fiscal year-end and any fines that may have been imposed to agents, after violations, are setoff with unpaid delinquencies that may be owed to the Company.
Additionally, the Company’s Board of Directors has set a maximum amount (approximately € 29.350) that
an agent may owe to the Company for the duration of one settlement period. If the agent’s debt exceed
the amount of € 29.350 during one settlement period the terminal machine is automatically blocked and it
can not accept game participations. Agents can apply for the increase of the above maximum amount that
the may owe during one settlement period, by submitting a letter of guarantee or by a cash collateral as
security.
Agents receive 12% of the pay amounts for LOTTO, JOKER, PROTO, PROPO, PROPO-GOAL and EXTRA 5,
8% of the pay amounts for PAME STIHIMA and SUPER 3 and 7% respectively for KINO. The Board of
Directors has the discrete authority to grant additional bonuses to the agents.
6.5. Contracts
The most significant contracts in progress, of € 150.000,00 value and above, signed by the Company for
its operation, technological support, and conduct of games in addition to its organizational needs
processing, are described below:
Organization / Company
Hellenic Republic
INTRALOT S.A. - INTRALOT
INTERNATIONAL LTD Betting Company S.A.
Contract Subject
Year of
contract
signature
Duration- Amount of Contract
Dec-2000
20 years – € 322.817 thousand
Contract granting exclusive rights for the conduct, management,
organization and operation of the games that are conducted by OPAP
S.A. today as well as the games that the Company has already
scheduled to conduct.
Organization, Support and Conduct of Fixed and Variable Odd Betting 29 March-99
7 years - Up to € 58.694
games.
thousand=11% gross receipts of fixed
odd bets. From € 58.694 thousand-€
88.041 thousand=9,5%. From €
88.041 thousand-€ 146.735
thousand=9%. More than € 146.735
thousand = 8,5%
Page 36
INTRAKOM S.A.
Maintenance and Operation of the C.I.S. and terminals.
17 Feb-97
The responsibility of the C.I.S. operational procedures of the
Company has been decided to fall upon the Seller who will be liable
to manage it by using experienced and suitable personnel. This
liability will hold in the beginning for 7 years.
INTRAKOM S.A.
ΚΙΝΟ Software Maintenance
07-04-1999
INTRAKOM S.A.
Administrative and Financial Applications
25-05-2002
INTRAKOM S.A.
Maintenance of Application Software “SUPER 3 and LOTTO 5/35”
25-05-2002
INTRAKOM S.A.
Maintenance of Application Software “AGENCY ACCOUNTING”
25-05-2002
LOGICDIS S.A. &
NEWSPHONE HELLAS S.A.
CRM system supply and organized telecommunications information
and customer service center.
30/04/2004
SAP HELLAS S.A.
Supply, installation and maintenance of managerial networking and
document management system.
NIGICO S.A.
Supply, installation and maintenance of UPS and Computer Terminal
systems for the new building of OPAP S.A.
INFORM LYKOS S.A.
Supply of 780.000.000 lottery tickets
ΤIPOHARTIKI S.A.
200 tons of lottery ticket printing paper
NEUROSOFT
07/06/2003
09/01/2004
31/3/2004
Maintenance Duration of A.T.M.
1.10.1997-30.9.2004.(see section
6.3.3. “Technology information
Systems” par. 3). The invoice
payment continues according to the
B.D. decision 5/17-2-05, Subject 13.
(Yearly rental € 2.856.000,00 plus
V.A.T.) including contractual
adjustments. For the maintenance
services of the new Material in
addition to the Central Software
System: 10 years after the end of the
good operation guarantee. For the
LOTOS software the Seller has
undertaken the maintenance services
for 20 years after the end of the good
operation guarantee. In addition to
the above, the Seller has undertaken
the liability to render instant
intervention services and
maintenance for the existing Software
System as well as the complete C.I.S.
for 7 years from the contractual
signing date and for all the above
cases against an adjusted price value.
Yearly maintenance cost and
personnel fees approximately € 10,9
million.
20 years after the end of the good
operation guarantee (6 months from
the final receipt, 16.6.04). Yearly fee
€ 49.391,04 plus V.A.T.
5 years with extension right, 5 years
with the same conditions. Yearly fee €
44.402,80 plus V.A.T. with a yearly
adjustment ratio of 3%.
10 years after the end of the good
operation guarantee (6 months from
the final receipt). Yearly fee €
82.219,68 plus V.A.T. in addition to
contractual adjustments.
10 years from the contract signature.
Yearly fee € 72.488,28 plus V.A.T. in
addition to contractual adjustments.
Duration of up to 2 years from the
end of the trial operation period.
Total cost: € 2.400.000 plus V.A.T.,
including
the
maintenance
services/technical
support
and
operations cost for 2 years after the
trial period.
Total cost: € 355.400 plus V.A.T.,
including
the
maintenance
services/technical support cost.
Total cost: € 643.000 plus V.A.T.
Cost of maintenance for 2 years
77.000 € plus V.A.T.
According to the absorption quantity
rate partial payments against the total
amount of € 2.502.500 plus V.A.T.
17/03/2005
Total cost € 180.000 plus V.A.T.
Partial deliveries of 70 tons per month
Operation maintenance and support
25/2/2004
Duration 2 years - € 356.667,98
FAST HELLAS
Maintenance (3 contracts) of Decoding and Data Presentation Unit
6/6/2003
18/12/2003
5/2/2004
End 15/6/2006-€190.900 plus V.A.T.
End 1/3/2007 -€ 23.835 plus V.A.T.
End 1/3/2007-€ 45.400 plus V.A.T.
ΕΑΙΤΥ
Monitoring, Maintenance and update of HYPERGEN and CRYPTOGEN
systems used for the conduct of lottery drawings regarding the
Company’s games ΚΙΝΟ, SUPER 3 and EXTRA 5
1/4/2004
Duration 1 year, yearly fee € 387.100
plus V.A.T.
COMPUTERBANK
NETWORKING S.A.
Maintenance and support for the equipment and services rendered
regarding the Company’s new building networking systems
8/12/2003
End of maintenance 19/11/2006 –
€180.491,40 plus V.A.T.
Operations Support for 1 year from
final receipt € 72.000 plus V.A.T.
For the contracts listed below the Company’s Board of Directors has reached a decision and the contract’s
signature status remains pending:
Page 37
Organization / Company
Year of contract
signature
Contract Subject
Duration- Amount of Contract
From 24/1/2005 to 24/5/2005 with
the capability by OPAP S.A. to
unilaterally renew the contract with
the same conditions for 2 months.
The fee is determined to 0,1% of
each advertising budget, on a
monthly basis, with the condition to
return 9,9% of the above fee for
the duration of the contract.
From
25/1/2005-25/4/2005
monthly fee € 98.333,33 including
V.A.T.
SPOT THOMPSON
Allocation planning and advertising time purchasing
Pending
ALTER CHANNEL
Lottery drawings projection for SUPER 3 and EXTRA 5
Pending
INTRAKOM*
Central System Update
Pending
10 working days from signature €
900.000 plus V.A.T.
INTRAKOM*
Reserve System
Pending
3 months from signature
4.800.000 plus V.A.T.
€
INTRAKOM*
Central System transition to a UNIX platform
Pending
6.000.000 plus V.A.T.
€
INTRAKOM*
Agency terminal linkage with Central System
Pending
2.600.000 plus V.A.T.
€
INTRAKOM*
Game software “AMESI NIKI (INSTANT WIN)”
Pending
4 months from signature € 408.000
plus V.A.T.
*Based on the Company’s B.D. decision, a Committee was formulated with the objective to negotiate all existing
pending matters with INTRAKOM S.A. Amongst these pending matters the above mentioned projects are included that
need to be realized.
OPAP S.A. has signed contracts with several companies in order to cover its operational needs, such as the
supply of tickets, supply of paper, the support of its promotional activities, as well as the Company’s
corporate image communication support.
In addition to the above the Company has signed a financial leasing contract for 36 trucks on 25.9.2002
with ETHNIKI LEASING and the Greek Financing and Leasing Group as well as a financial leasing contract
for 1 truck on 1.10.2004, described below:
(€ in thousands)
DURATION
VALUE
15.12.2002
14 MERCEDES BENZ
trucks VITO 113 type
to
22 MERCEDES BENZ
trucks SPRINTER 413/35
15.12.2007
type
1 MERCEDES BENZ truck 1.10.2004 to
ACTROS type*
1.10.2009
CONTRACTUAL
PAYMENTS UP
LEASE
OUTSTANDING
TO 31.3.2005
PAYMENT
337.008
329.244,00
835.912
814.320,00
133.100
268.332,00
RESIDUAL VALUE
82.600
533.664,60
609.899,40
207.680
22.841,14
245.490,86
15.000
*It should be noted that the above lease rental also includes the maintenance cost from YES company.
Also the Company has signed an operating lease contract regarding 15 private cars with ANTENA LTD on
25.2.2004, described below:
(€ in thousands)
DURATION
8 CARS WV BORA
4 CARS WV POLO
2 CARS WV PASSAT
CONTRACTUAL
PAYMENTS UP
LEASE
OUTSTANDING
TO 31.3.2005
PAYMENT
RESIDUAL VALUE
362.496,00
25.2.2004
to
25.02.2009
1 CARS SHARAN
141.600,00
19.824,00
114.829,73
494.050,27
5.994,40
104.784,00
132.396,00
5.900,00
19.932,95
112.463,05
7.000,00
The table below depicts the most significant in progress sponsorship-advertising contracts signed by the
Company:
Page 38
ORGANIZATION/COMPANY
ALPHA SATELLITE TELEVISION S.A.
DATE
20.10.04
FILATHLOS SPORTS NEWSPAPER
10.2.2004
IRAKLIS F.C.
PAOK F.C.
9.9.2004
27.10.2004
REASON FOR SPONSORSHIP
Sponsorship Football Season 2004-2005 of the
football teams OLYMPIAKOS F.C., SKODA
XANTHI F.C., HALKIDON NEAR EAST F.C.,
APOLLON KALAMARIAS F.C., NEOS PANIONIOS
F.C. and IRAKLIS F.C. for the promotion and
publicity of the Company’s games.
Sponsorship of 15 special editions (4page,
monthly) of the sports newspaper FILATHLOS.
Also 20 whole page, 4 color postings on the 3rd
page of the newspaper published within year
2004
Sponsorship for Football Season 2004-2005
APOLLON KALAMARIAS F.C.
1.12.2004
NEW PANIONIOS F.C.
8.11.2004
KALLITHEA F.C.
1.12.2004
KERKIRA F.C.
25.11.2004
ARIS F.C.
17.12.2004
OFI F.C.
15.12.2004
IONIKOS F.C.
20.11.2004
LYTTOS-ERGOTELIS F.C.
25.11.2004
SKODA XANTHI F.C.
24.11.2004
HALKIDON NEAR EAST F.C.
14.12.2004
Football Societe Anonyme
Association
ESAKE
4.11.2004
Sponsorship for Football Season 2004-2005 of
the 1st, 2nd and 3rd Football Divisions
Sponsorship for Men’s Basketball Season 20042005 of A1 Division
Advertising buying time for home games of the
3rd Division Football League
Sponsorship through the 2nd Division Football
Teams
9-9-2004 to 9-9-2005 € 300.000
27-10-2004 until the end of Football Season
2004-2005 € 300.000
2004-2005 € 230.000
2004-2005 € 300.000
2004-2005 € 230.000
2004-2005 € 230.000
2004-2005 € 300.000
2004-2005 € 300.000
2004-2005 € 270.000
2004-2005 € 230.000
2004-2005 € 270.000
2004-2005 € 230.000
2004-2005 € 2.000.000 plus V.A.T.
31-12-2004 until the end of Basketball
Season € 500.000
Until the end of Football Season 2004-2005
€ 1.109.360 plus V.A.T.
Football Season 2004-2005 € 950.000 plus
V.A.T.
Sponsorship through the 3rd Division Football
Teams
Football Season 2004-2005 € 1.000.000
plus V.A.T.
Publicity advertising of OPAP S.A. through the
magazine MATCH PROGRAM
Provision and installment of materials in the
stadium of KALLITHEA with a consideration from
KALLITHEA F.C. of the Company’s advertising
promotion for 20 years
Provision and installment of materials in the
stadium of PROODEFTIKI
Formation of the athletic grounds of the
Municipal Stadium of Aigaleo, were AIGALEO
F.C. plays, so that the Company be publicized
and promoted within the stadium.
Start to end of Football Season 2004-2005
€ 400.000
9.8.2002. Amount of € 1.400.000 plus
V.A.T.
ERT 3
31.12.2004
7.2.2005
SECOND DIVISION TEAMS
ATHLETIC ATTACK
B.D.
Decision
4/10/2/2005
B.D.
Decision
4/10/2/2005
25.10.2004
EDICAT S.A.*
9.8.2002
IDROGIOS TEHNIKI S.A.*
8.8.2002
THIRD DIVISION TEAMS
MUNICIPALITY OF AIGALEO
8.10.2004
DURATION &SPONSORSHIP AMOUNT
20-10-2004 to 31-5-2005 € 2.500.000 plus
V.A.T.
1-5-2004 to 31-7-2005 € 350.000 plus
V.A.T.
8.8.2002. Amount of € 1.060.000 plus
V.A.T.
8-10-2004 to 7-10-2007 € 3.000.000 plus
V.A.T.
*The above project has been completed by a percentage of 68%. The projects completion has been suspended due to
construction obstacles.
**The above project has been completed by a percentage of 45%. The projects completion has been suspended due to
construction obstacles.
For the contracts listed below the Company’s Board of Directors has reached a decision and the contract’s
signature status remains pending:
ORGANIZATION/COMPANY
AIGALEO F.C.
ΕRΤ-ΕRA SPOR
DATE
REASON FOR SPONSORSHIP
B.D. Decision Sponsorship for Football Season 2004-2005
4/10-2-2005
B.D. Decision Sponsorship for the radio broadcasts of the
4/10-2-2005 1st, 2nd, and 3rd Football Division Leagues,
preliminary or friendly matches of the Men’s
and U-23 National Teams, in addition to the
Greek teams that participate in the European
Champions League or League Cups as well as
the National Men’s teams that will participate
DURATION &SPONSORSHIP AMOUNT
24-11-2004 up to the end of for Football
Season 2004-2005, € 280.000
1-2-2005 to 31.1.2006 € 900.000
Page 39
HAZLIS & LIVAS LTD
EUROPEAN CULTURAL CENTER OF
DELPHI
Football Societe Anonyme
Association
B.D.
Decision
4/10-2-2005
B.D.
Decision
6/24-2-2005
B.D.
Decision
6/24-2-2005
in the World Cup (Mundial) of 2006 and the
National Federation Cup.
Sponsorship of the 9th Round Table Discussion
with the Greek Government
18-4-2005 to 20-4-2005 € 250.000
Sponsorship for the “PERIKLIS YEAR, 2.5000
YEARS FROM HIS BIRTH”
1-7-2005 to 8-7-2005 € 200.000
Sponsorship for the Company’s promotion and
publicity in all football fields of the 1st and 2nd
Football Division League until the end of the
current season.
Football Season 2004-2005, € 1.000.000 plus
V.A.T.
Syndicated Bank Loan Contracts
The Company has signed 5 syndicated loans with banks on behalf of organizations of the Hellenic
Republic, described below:
Description – Payment of Outstanding Loan
(€ in thousands)*
Date of Contract
Initial
Outstandi
Loan
Loan
Loan Signature
Bank
Loan
ng
Payments
Payments
/Date of 1st Loan
Amount
31/12/20
within
after 2005
04
2005
20.543
0
0
0
52.825
0
0
0
44.021
24.456
9.782
14.673
29.347
6.456
6.456
0
29.347
16.007
5.336
10.672
Payment
Loan on behalf of the General Secretariat of Athletics
Grd 7 billion (€ 20.543 thousand)
Full payment up to 31/6/2004 in one loan payment
amounting to Grd 775 million (€ 2.274 thousand)
30.6.1997 /
30.6.2000
Full payment up to 31/12/2004 in 2 equal 6 month
loan payments amounting to Grd 2.000 million (€
5.869 thousand)
20.1.1998 /
31.12.2000
Full payment from 30/6/2003 to 30/6/2007 in 5
equal 6 month loan payments amounting to Grd
1.667 million (€ 4.892 thousand)
8.2.2000 /
30.6.2003
Β’ Loan on behalf of the Ministry of Culture Grd 10
billion (€ 29.347 thousand)
Full payment from 1/2/2002 to 30/10/2005 in weekly
loan payments amounting to Grd 50 million (€ 147
thousand)
18.10.1999 /
1.2.2002
C’ Loan on behalf of the Ministry of Culture Grd 10
equal 6month loan payments amounting to Grd 909
million (€ 2.668 thousand)
9.8.2000 /
1.1.2003
NATIONAL
INVESTME
NT BANK
OF
INDUSTRIA
L
DEVELOPM
ENTNATIONAL
BANK OF
GREECE
NATIONAL
BANK OF
GREECE –
EMBORIKI
BANKNATIONAL
INVESTME
NT BANK
OF
INDUSTRIA
L
DEVELOPM
ENT -HSBC
– PIRAEUS
BANK
NATIONAL
BANK OF
GREECE –
HELLENIC
BANK OF
INDUSTRIA
L
DEVELOPM
ENT –
AGRICULTU
RAL BANK
OF
GREECEEMBORIKI
BANK
HELLENIC
BANK OF
INDUSTRIA
L
DEVELOPM
ENT AGRICULTU
RAL BANK
OF GREECE
NATIONAL
BANK OF
GREECE NATIONAL
INVESTME
NT BANK
OF
INDUSTRIA
L
DEVELOPM
ENT HELLENIC
BANK OF
INDUSTRIA
Page 40
L
DEVELOPM
ENT AGRICULTU
RAL BANK
OF GREECE
Total
176.083
46.920
21.575
25.345
6.6. Sales Promotion
The promotion of sales is done mainly through advertising on Greek television and radio, through the
press and through the Internet. OPAP S.A. engages in promotional activities, participates in conferences,
commercial exhibitions whereas it also conducts significant sponsorships of athletic, cultural and other
events.
In 2001 the Company initiated a complete advertising and promotional strategy that includes one new
advertising promotion for each one of its games (excluding PAME STIHIMA) and one new corporate
campaign with the objective to reinforce the Company’s logo and corporate identity. In 2003, OPAP S.A.,
continued the implementation of its advertising promotion, renewing its corporate identity and the
contemporary profile of its existing games. Also, the Company continued to engage in promotional
activities, the prizes of which are financed through uncollected player profits. In more detail prizes can
take the following form:
•
of cash that increase the amount distributed as a profit to the winners first category of the
games, including JOKER, LOTTO and PROTO. For example, from November 2003 to April 2004,
uncollected player profits were used for the cover of a minimum profit amounting to € 300
thousand for the first winning category of Sunday’s PROPO, or
•
of a draw, that takes place once or twice per year, were players can win residencies, cars,
vacation packages and other prizes.
Additionally, the Company maintains its own website on the Internet, at www.opap.gr, that describes and
promotes its games. Also, the INTRALOT S.A. Joint-Venture maintains a separate website on the Internet
for PAME STIHIMA at www.pamestihima.gr. The advertising and promotional activities related to PAME
STIHIMA are managed from the INTRALOT S.A. Joint-Venture based upon the existing contract signed
between them. More specifically according to the conditions of the contract the INTRALOT S.A. JointVenture, from its commission, is obligated to spend at least 1% of the total gross revenues from PAME
STIHIMA for advertising and promotional purposes of the game.
Promotional and publicity expenditures during 2004 amounted to approximately € 47,3 million against
approximately € 43,2 million in 2003 and approximately € 38,4 million in 2002 (the promotional and
publicity expenditures of PAME STIHIMA are not included which are realized from the INTRALOT S.A.
Joint-Venture). The Company’s advertising promotion took place through the television, radio and printed
press on a pan-Hellenic and local level.
6.7. Fixed Assets – Establishments
6.7.1. Intangible Assets
The Company possesses, among others, the rights for the following trademarks “OPAP at the Service of
Athleticism and Culture”, “PAME STIHIMA”, “JOKER”, “LOTTO”, “PROPO”, “PROTO”, “PROPO-GOAL”, and
“KINO”. The above trademarks have been deposited to the Administrative Trademark Committee of the
Ministry of Development. The trademarks and the relevant decisions of the Administrative Trademark
Committee through which the trademarks became acceptable, are listed below:
Trademark
Class
PROPO (no. 145564)
PROPO-GOAL (no. 145565)
LOTTO (no. 145563)
PROTO (no. 145568)
JOKER (no. 145566)
ΚΙΝΟ (no. 145567)
SUPER 3 (no. 165023)
16 and 36
16 and 36
16 and 36
16 and 36
16 and 36
16 and 36
35, 36, 41 and 42
Administrative Trademark
Committee Decisions
9471/2000
4447/2000
9470/2000
4449/2000
4448/2000
9472/2000
10685/2003
Page 41
EXTRA 5 (no. 165024
16, 28, 35, 36, 41 and 42
10686/2003
Regarding the game PAME STIHIMA it should be noted that: on 23.3.2001, the company of the INTRALOT
S.A. Group, under the name Betting Company S.A., has transferred to the Company the relevant, to the
PAME STIHIMA game, trademarks that it had posted, based upon the framework of the contract signed on
29.3.1999 between OPAP S.A. and the INTRALOT S.A. Joint-Venture. The transferred trademarks are the
following:
Α. The n. 155476 trademark “PAME STIHIMA-GOLD FOOTBALL” deposited on 16.2.2001 for classes
16,28,35,36,41,42, transferred to the Company’s name with the prot. N. 5500/30.3.01. The Administrative
Trademark Committee Decision is still pending.
Β. The n. 155477 trademark “GOLD FOOTBALL” deposited on 16.2.2001 for classes 16,28,35,36,41,42,
transferred to the Company’s name with the prot. N.5501/30.3.01. The Administrative Trademark
Committee Decision is still pending.
C. The n. 150958 trademark “PAME STIHIMA IN SPORTS” deposited on 7.6.2000 for classes
16,28,35,36,41,42, transferred to the Company’s name with the prot. N. 5494/30.3.01 partially accepted
with the Administrative Trademark Committee Decision 2914/01 for all products mentioned in the classes
above except from newspapers and magazines of class 16.
D. The n. 150959 trademark “PAME STIHIMA BASKETBALL” deposited on 7.6.2000 for classes
Ε. The n. 146284 trademark “PAME STIHIMA” deposited on 16.9.1999 for classes 16,28,35,36,41,42,
transferred to the Company’s name with the prot. N. 5496/30.3.01 partially accepted with the
Administrative Trademark Committee Decision 6713/01 for all products mentioned in the classes above
except from newspapers and magazines of class 16.
F. The n. 145940 trademark “PAME STIHIMA” deposited on 30.6.1999 for classes 16,28,35,36,41,42,
transferred to the Company’s name with the prot. N. 5497/30.3.01 accepted with the Administrative
Trademark Committee Decision 490/01.
G. The n. 146283 trademark depicted in the “PAME STIHIMA” logo deposited on 16.9.1999 for classes
16,28,35,36,41,42, transferred to the Company’s name with the prot. N. 5498/30.3.01 accepted with the
Administrative Trademark Committee Decision 4394/01 for all products mentioned in the classes above
except from newspapers and magazines of class 16.
Η. The n. 150957 trademark “PAME STIHIMA FOOTBALL” deposited on 7.6.2000 for classes
I. The n. 145940 trademark “PAME STIHIMA” (posted only as a verbal doc) deposited on 30.7.1999 for
classes 16,28,35,36,41,42 transferred to the Company’s name with the n. 5497/30.3.01 Trademark
Secretariat Act of the General Secretariat of Commerce of the Ministry of Development accepted with the
Administrative Trademark Committee Decision 490/01 for all products mentioned in the classes above.
6.7.2. Land – Buildings
The Company’s new offices are based on 62 Kifisou Ave., (National Road), Peristeri, Athens, and include
12.995 sq.m. of offices and 5.980 sq.m. of covered parking space. These new offices were selected based
upon an architectural study done on behalf of OPAP S.A. The Company has leased the building for a
duration of 5 years with an extension right for another 7 years (12 year total) and pays a monthly rental
amounting to € 236.359,24 with a yearly adjustment rate, based upon the Consumer Index Rate of the
National Statistical Service of Greece. The new offices accommodate the Company’s existing personnel in
addition to new employees that the Company estimates that it will hire in the next five year period mainly
due to its operation expansion and the introduction of new games. The new building offices also include a
special studio hall which is used for the Company’s conduct and television broadcast of lottery draws in
addition to a multiple use hall.
The table below depicts the Company’s privately owned land-building plots at December 31st, 2004:
Page 42
LAND
25 Panepistimiou Str. Athens, 1.118,69 sq.m. area
Ioannou Koletti and Kavalas Str., Thessaloniki, 5.818,5 sq.m. area
Antisthenous and Kallirois Str., Neos Kosmos, 490,5 sq.m. area
Mazaraki and Giannitson Str., Thessaloniki, 5.818,5 sq.m. area
28th October, Erythrou Stavrou, Manolopoulou, Petrop., (Kokiloni area), Pirgos
Ilias, 385,70 sq.m. area
20-22 Ipsilantou and 85 Mandilara Str., Larisa, 1.031, 06 sq.m. area
% on
land
Net Book
Value
(€ in
thousands)*
11,5
11,23
1,8
1,65
1.691
1.488
12
239
2,9
54
5,8
105
Esperidon, Aristogitonos, Kalypsous, Grypari, (Sfagia area), Kallithea, 1.027,84
sq.m. area
8,5
170
54 Queen Olga Avenue, Thessaloniki, 307 sq.m. area
23
209
G. Lambraki and Spiliopoulou Str., area Marmarenia Vrisi, Tripoli, 1.020,39 sq.m.
area
9,4
141
90-92 Kyprou Avenue, Peristeri, 1.175,32 sq.m. area
12,2
139
476 Grigoriou Lambraki and Antoniou Bertou Str., Keratsini, 404,88 sq.m. area
Leonidou and Panourgia Str., Lamia, 242,69 sq.m. area
26,7
123
30,6
56
Total
4.427
The tangible assets where valuated either at the value designated by Committee of Article 9 of L.
2190/1920, or for the ones acquired after the estimate at the acquisition cost, reduced with the expected,
by law, depreciation. For the land and buildings the valuation was done based on the adjusted value,
according to the provisions of articles 20 to 27 of Law 2065/1992 and the clarified circular of the Ministry
of Economics (1127/6.12.2004).
Depreciation of all assets in fiscal year-end 2004 has been calculated based on the ordinances of P.D.
229/03.
The net book value of the Company’s privately owned buildings and technical works in addition to building
expenses (arrangements, fixtures etc) regarding third party buildings at 31.12.2004, is described below:
BUILDINGS
5th and 6th floor on 25 Panepistimiou Str., in Athens, total sq.m. area 1.638
Basement, Ground Floor, 1st and 2nd Floor on Ioanou Kolleti and Kavalas Str., in Thessaloniki,
total sq.m. area 2.371,94
1st Floor of building on 1 Antisthenous Str., in N. Kosmos in Athens, approximate total sq.m.
area 50
Loft, Basement and Ground Floor, in Thessaloniki on Mazaraki and Giannitson Str.,
approximate total sq.m. 530
Stores on 90-92 Kyprou Avenue in Peristeri, approximate total sq.m. 143,72**
Two ground floor stores on 54 Q. Olga Avenue, in Thessaloniki, approximate total sq.m. 193 **
Store on 476 Gr. Lambraki and Antoniou Bertou Str., in Keratsini, approximate total sq.m.
122,91**
Store (ground floor) on 1 Esperidon and 23 Aristogitonos Str., in Kallithea, approximate total
sq.m. 203,49**
Store (ground floor and basement) on Leonidou and Panourgia Str., in Lamia, approximate total
sq.m. 231,62**
Store (ground floor and basement) on 28th October and Manolopoulou Str., in Kokiloni area, in
Pirgos Ilias, approximate total sq.m. 161,33**
Three ground floor stores on Gr. Lambraki and Spiliopoulou Str., Marmarenia Vrisi area, in
Tripoli, approximate total sq.m. 142,47**
Store (ground floor) on 20-22 Ipsilantou and 85 Mandilara Str., in Larisa, approximate total
sq.m. 149**
Buildings – Third party installations (2 Kolonou and Balana Str., in Pallini)
Buildings – Third party installations (new building, 62 Kifisou Avenue)
Net Book Value
(€ in thousands)*
1.764
1.010
18
107
861
1.112
718
1.109
710
541
656
664
368
4.794
Page 43
Total
14.432
The 5th floor by 25 Panepistimiou Str., is leased to the Ministry of Economics and Finance against a
monthly lease rental of € 18.000 (plus stamp) with a readjustment from 01/01/2005 the Consumer Index
Rate augmented by 2 percentage points per year and up to 31/05/2008. The 6th floor by 25 Panepistimiou
Str., has been conceded to OPAP SERVICES S.A. The building by Ioanou and Koletti Str., in Thessalonica,
accommodates the Company’s offices in Thessalonica. The 1st floor by Antisthenus Str., in N. Kosmos in
Athens is leased for a monthly lease rental amounting to € 88,04. The building by Mazaraki and Giannitson
Str., accommodates the Company’s offices in Thessalonica.
**In addition the Company during fiscal year-end 2004 acquired the property described above which will
used as District Centers of the Company.
It should be noted that the Company also owns four residencies in the island of Spetses and four in the
island of Naxos. According to the Company the mentioned residencies were acquired through the unappropriated game profits, with the objective to be transferred to the players that won them, with the
relevant transferring expenses also covered from the un-appropriated profits. Due to the fact that these
winners did not show up to the legally designated due date, the Company intends to transfer the above
residencies to game winners of subsequent drawings. During the transition period the above residencies
remain at the Company’s ownership. The above mentioned residencies are described below:
-Residence
-Residence
-Residence
-Residence
-Residence
-Residence
-Residence
-Residence
in
in
in
in
in
in
in
in
the
the
the
the
the
the
the
the
island
island
island
island
island
island
island
island
of
of
of
of
of
of
of
of
Naxos, Exo Tsigoura Area,
Spetses, 96,58 sq.m.
119,25 sq.m.
93,2 sq.m.
87,96 sq.m.
127,04 sq.m.
The Company, in order to cover its needs, leases certain domains. The table below depicts the main
leased domains at 31.12.2004:
Monthly Lease
Address
Sq.m.
Use
(including
Lease Duration
stamp)
Anthousa-Pallini
3.700 sq.m.
Balana-Pallini
750 sq.m.
44 Piraeus and 2
kolonou Str., (5th
Records-Warehouse, Printing
Center
Paper and material
warehouse
System Center and Lottery
380 sq.m.
Parking
Thessalonica
Peristeri, Athens
25-29 Panepistimiou
Str., (4th floor)
€ 3.618,78
Indefinite
€ 12.806,44
30/9/2006
Drawing Hall
19 Mazaraki and 161
62 Kifisou Avenue,
Indefinite
Computer information
1.480 sq.m.
floor)
Monastiriou Str.,
€ 20.143,02
€ 851,28 plus
stamp
31/7/2005
Main Offices of 12.995 sq.m.
18.975 sq.m.
and Parking Space of 5.980
€ 236.359,24
Five years
€ 18.000,00
1.6.2002-31.5.2008
sq.m.
819 sq.m.
Ministry of Finance &
Economy
OPAP S.A. leases the 4th floor of the building by 25-29 El. Venizelou Ave., on behalf of the Ministry of
Economics and Finance. The lease rental charged directly to the Ministry is paid to the Company by the
Ministry from the special account of article 27 of L. 2843/2000.
Page 44
6.7.3. Transportation Equipment
The acquisition cost of the Company’s transportation equipment at 31.12.2004 amounted to approximately
€ 476 thousand against € 516 thousand in 2003 and € 476 thousand in 2002. The Company owns fifteen
cars, one of which is a truck, two buses, twelve private cars and five motorcycles. It should be noted that
7 in total Company owned vehicles (6 private cars and one motorcycle) have been granted to several
organizations, with possession retention. Additionally the Company as mentioned elsewhere has leased
through a financial lease 37 trucks from ETHNIKI LEASING and 15 private cars from ΑΝΤΕΝΑ LTD. Last,
the Company has purchased in total 11 private cars for promotional activities.
6.7.4. Machinery - Technical Installations & other Mechanical Equipment
The acquisition cost of the Company’s machinery and technical installations at 31.12.2004 amounted to €
37.977 thousand against € 29.531 thousand in 2003 and € 22.620 thousand in 2002. The increase by €
8.446 thousand in 2004 against fiscal year-end 2003 is mainly due to the upgrades of agency terminals
amounting to € 2.273 thousand, € 3.333 thousand in mechanical equipment for the new building in 62
Kifisou Str., (Studio machinery etc). The remaining amount of approximately € 2.840 thousand mainly
refers to decoders of KINO game and other equipment.
It should also be noted that the increase of the account “Fixed Assets under Construction & Advances” by
€ 286 thousand refers to KINO decoders that are inactive due to the fact that in certain territories of the
state the game had not been introduced yet.
The Company’s technology information system is comprised from the Central System through which 6.000
agency terminals, owned by OPAP S.A., are connected on line via Hellaspack.
Through this system the on line conduct of the Company’s games is supported in addition to the system
management of all necessary procedures relative to the monitoring and conduct of the games, the payout
of profits to winners, the support and accounting procedures of its agencies, the management of all
relative information etc.
The Company has an up to date technology information system and one of the biggest on line networks in
the country with benefits such as:
1.
2.
3.
4.
5.
6.
7.
8.
Creditability and security regarding the conduct of games with minimal chances for human error.
On line support with simultaneous conduct of many games.
Speed and immediacy regarding the conduct of games, a fact that gives to the Company the
capability to introduce new generation games.
Provision of increased quality services towards the agents and players. It is possible to participate in
the Company’s games even minutes before the drawing procedure or the commencement of matches
in addition to the capability of wining payouts immediately after the drawings are concluded or the
matches end.
Real time information, which gives the opportunity for immediate and crucial decision making.
Capability for an administrative, accounting and historical data management of all games.
Multiple use network capabilities.
Administrative and Financial Application System
The Company also has another system which is independent from the one mentioned above, which covers
administrative and financial applications. These applications are developed and gradually installed in that
system.
This system is comprised of a main server, which is connected on a local network with approximately 1000
personal computers defined as workstations. After the conclusion of the application development, the
system will be connected with the central system of games conduct for the exchange of information.
The acquisition cost of the Company’s furniture and fixtures at 31.12.2004 amounted to € 13.858
thousand against € 11.393 thousand in 2003 and € 9.117 thousand in 2002. The increase by € 2.465
thousand in 2004 against year-end 2003 is mainly due to personal computers and electrical blocks
amounting to € 588 thousand, telecommunication equipment amounting to € 510 thousand and other
fixtures of the new building amounting to € 1.367 thousand.
6.7.5. Evolution of Fixed Assets Book Value
Page 45
The following table presents the evolution of the Company’s fixed assets for the three year period of 2002,
2003 and 2004:
(€ in thousands)*
Asset Category
Acquisition
Additions/
Acquisition Depreciatio Depreciation
Cost
Subtractions
Cost
n
1.1.200231.12.2001 1.1.2002-31.12.04 31.12.2004 31.12.2001 31.12.2004
Depreciation
31.12.2004
Net Book
Value
31.12.2004
Α. Formation Expenses
Formation & start up expenses
Other formation expenses
Total Formation Expenses
Β. Intangible Assets
303, 7
0,85
304,55
60,87
182,73
243,6
60,95
6.968,74
5.574,81
12.543,55
5.397,37
3.917,82
9.315,19
3.228,37
7.272,44
5.575,66
12.848,11
5.458,24
4.100,55
9.558,79
3.289,32
322.817,31
-
322.817,31
32.281,73
48.422,6
80.704,32
242.112,98
C. Tangible Assets
Land
3.429,54
997,85
4.427,39
-
-
-
4.427,39
Buildings & Technical Works
1.529,7
14.261,77
15.791,47
150,77
1.208,58
1.359,35
14.432,11
22.286,35
15.690,59
37.976,94
8.176,73
14.712,98
22.889,71
15.087,23
465,3
10,2
475,5
173,65
282,19
455,84
19,65
8.266,14
5.592,23
13.858,37
4.815,13
4.930,77
9.745,9
4.112,47
Machinery-Technical Installations
Transportation Equipment
Furniture & fixtures
Fixed Assets under Construction
and Advances
-
1.502,07
1.502,07
-
-
-
1.502,06
Total Tangible Assets
35.977,03
38.054,72
74.031,75
13.316,28
21.134,52
34.450,81
39.580,94
Grand Total
366.066,8
43.630,38
409.697,17
51.056,25
73.657,67
124.713,93
284.983,24
6.7.6. Guarantees and Real Securities
There are no encumbrances on the Company's fixed assets. Additionally the Company has not granted any
guarantees towards banks on behalf of third parties nor do exist any granted guarantees from third
parties on behalf of the Company. Guarantees in favor of third parties amounting to € 825 thousand at
31.1.2004 refer to amounts given for rent guarantees and several State Owned Enterprises such as the
Hellenic Telecommunications Organization, Public Power Organization.
6.8. Insurance Contracts
The Company has signed insurance contracts in order to cover its assets. Nonetheless, there is no
guarantee that the Company will not face losses not covered by the insurance police nor that the losses
will not exceed the insurance contract capital.
The Company has signed the following insurance contracts:
•
Contract (insurance contracts with EUROPA S.A.) for the insurance of fixed assets (owned
buildings, equipment, furniture and fixtures) of OPAP S.A.
The contract’s duration is set from 28.2.2005 to 28.2.2006. The yearly insurance premium amounts to €
112.700 plus V.A.T.
The total insured capital amounts to € 69.367.484 and covers the following risks: earthquake, fire,
thunder, terrorist attacks, flood, airplane crash, explosion, vehicle crash, garbage removal 4% of the
insured capital, political riot, stoppage, strikes, tank breaking or heat tubing, theft, damage from theft,
civil liability, short circuit, civil liability up to € 300.000 against adjacent proprietorship. It should be noted
that the above include the building on 62 Kifisou Str.
•
Car Insurance Contract with ΙΝΤΕRLIFE
The duration of the covered period is one year. The insurance covers the transportation means of the
Company for body injuries (lesion), material damage, passenger coverage, third liability during theft,
material damage from an uninsured vehicle, fire and fire from an uninsured vehicle, total and partial loss,
bonus protection, own damages with deductible from € 293,74 per accident. The yearly insurance
premium amounts to € 15.542,44 plus V.A.T. It should be noted that the contracts signature is still
pending.
Page 46
•
Group Insurance for personal accidents - illnesses (n. G11191/1.1.1988) between UNIVERSAL
LIFE and the Union of OPAP S.A. Employees.
The contract’s in effect date was set on 1.1.1988, and is renewed every year on August 1st. This contract
includes, only for OPAP S.A. employees, an insurance coverage for life, permanent total handicap and
permanent partial handicap resulting from an accident in addition to an insurance coverage for loss of
income due to a temporary total handicap for employment from accident or illness. The monthly insurance
premium amounts to € 19.197,87.
•
Group Insurance for personal accidents - illnesses (n. 50707) between ASPIS PRONOIA and the
Union of OPAP S.A. Employees with in effect starting date 1.8.2003.
This insurance contract includes a total of insurance provisions, from death to the recovery allowance. The
monthly insurance premium amounts to € 15.225,24.
•
Group Life Insurance contract (GL 1119/1.1.1988) between UNIVERSAL LIFE and the Union of
OPAP S.A. Employees.
The contract’s in effect date of the above insurance was set on 1.1.1988 and the contract’s duration is
indefinite. Participation rights were settled including all full time employed personnel in addition to the
employees participation on the insurance premium. The insured capital amounts to € 9.538 for each
insured person and the monthly insurance premium amounts to € 1.909,27.
•
Group Life contract (1006) between AGROTIKI INSURANCE and the Union of OPAP S.A.
Employees for the creation of a fund managing capital account with the objective of a lump sum
deposit provision at the completion of the age retirement limit.
The contract’s in effect date of the above insurance was set on 1.1.1988. The first insurance year covered
the period from 1.1.1988 to 31.12.1988. The coming insurance years refer to the 12 month periods
starting from January 1st. The contracts duration is of 35 years, where as the insured capital amounts to €
880 yearly per insured person up to 31.12.2002 and from 1.1.2003 to € 2.934,70 yearly per insured
person. The monthly insurance premium together with the retrogressive liabilities amount to € 86.508,82.
The account’s objective has to do with the creation of uniform capitals that are necessary for the
provisions deposit towards the insured, determined in the General Regulation of Welfare. The above
account will exclusively be supplied from the Union’s contributions. Based on article 9 of the above
insurance contract, the above agreement will end when the Account depletion or when all provisions
deposited are paid from the Insurer.
Based on the Company’s statement, the insurance premiums of the above insurance contracts are paid on
a monthly basis and very often fluctuate since these are dependent from the Company’s number of
employees.
6.9. Investments for the Period 2002-2004
OPAP S.A. during the three year period 2002-2004 invested in total € 76.510 thousand. The table below
depicts the analysis of the above investments:
Description (€ in thousands)*
2002
2003
2004
TOTAL
Formation Expenses
1.851
1.884
1.839
5.574
0
0
0
0
0
461
333
10
851
260
1.915
0
3.766
0
3.120
7.434
41
2.276
957
13.828
3.965
19.677
998
10.629
6.122
0
2.508
2.708
22.965
28.263
53.067
998
14.210
13.889
51
5.635
3.925
38.708
32.228
76.510
Intangible Assets:
Concessions & Royalties of Industrial Ownership
Tangible Assets:
Land
Buildings & Technical Works
Machinery – Technical Installations
Transportation Equipment
Furniture & Fixtures
Fixed Assets under Construction
Total Tangible Assets
Investments (Participations)
Grand Total
Page 47
Fiscal year-end 2004
Investments regarding formation expenses during the fiscal year-end of 2004 amounted to € 1.839
thousand and refer mainly to investments in Software Program Systems of € 1.239 thousand. This amount
was invested for the acquisition of the KINO software in addition to a software of a computerized center,
administrative and financial application programs and a third party software license. The remaining
additions amounting to € 600 thousand refer to the transferring taxes and the notary act expenses for the
acquisition of the eight district centers.
Investments for the acquisition of Company assets amounted to € 11.627 thousand and refer to the
acquisition of eight real estate properties amounting to € 5.037 thousand that will be used as District
Centers in addition to fixtures and arrangements done on the new building on 62 Kifisou Str., where the
Company has its main offices and to existing buildings of third parties (Kolonou and Pallini-Balana) as well
as owned buildings (25th Panepistimiou Str. in Athens and Koletti and Mazaraki Str., in Thessalonica)
amounting to € 6.590 thousand.
Investments in machinery and technical installations amounted to € 8.830 thousand and refer mainly to
agency terminal upgrades amounting to € 2.273 thousand, € 3.333 thousand on technical installations
regarding the Company’s studio in the new building on 62 Kifisou Str. and the remaining amount of
approximately € 3.223 thousand refers to KINO decoders and other mechanical equipment.
Investments in furniture and fixtures amounted to € 2.508 thousand and refer to the acquisition of
personal computers and electrical blocks of the amount of € 588 thousand, telecommunication’s
equipment amounting to € 510 thousand and furniture and other equipment of the new building
amounting to € 1.409 thousand.
On 22/01/2004 OPAP S.A. established a new subsidiary company in Cyprus by the legal name OPAP
INTERNATIONAL LTD, The company’s scope is to support the strategic expansion of OPAP S.A. activities
abroad in addition to the co-ordination of the subsidiary companies based there, OPAP CYPRUS LTD, OPAP
GLORY LTD, OPAP INTERNATIONAL LTD and GLORY TECHNOLOGY LTD.
In July of 2004, OPAP S.A. established in Greece a subsidiary under the legal name OPAP SERVICES S.A.
The company’s objective is to exploit the potential of the Company’s sales network and in general the
athletic market (provision of services, organization of athletic and cultural content activities, ticket issuing
and handling for athletic, cultural and other recreational activities, formulation of a uniform company
image as far as the points of sale are concerned, setting up exemplary agencies etc).
Based on the above the account “Investments and other long-term financial receivables” during the fiscal
year-end of 2004 depicts the accounts “investments in affiliates” which amount to € 42.876 thousand and
“investments in other companies” which amount to € 10.000 thousand.
Investments regarding formation expenses during the fiscal year-end of 2003 amounted to € 1.884
thousand and refer mainly to investments in Software Program Systems of € 1.593 thousand. This amount
was invested for the acquisition of the KINO software in addition to a software of a computerized center,
administrative and financial application programs and other equipment. The remaining additions of the
fiscal year-end refer to the cost of the Company’s website amounting to € 148 thousand and expenses o
feasibility studies for technical installations amounting to approximately € 144 thousand.
Investments in buildings and technical works amounting to € 3.120 thousand refer mainly to feasibility
studies and arrangements of the building on 25th Panepistimiou Str., and the Company’s new building in
62 Kifisou Str. Investments in machinery and technical installations amounting to € 7.434 thousand refer
mainly to agency terminal upgrades amounting to € 4.966 thousand in addition to the upgrade of the
information technology center amounting to € 2.145 thousand. The remaining amount of approximately €
323 thousand refers mainly to KINO decoders and other mechanical equipment. It should be noted that in
the acquisition cost of fiscal year-end of 2003 an increase of € 6.911 thousand is depicted against fiscal
year-end of 2002 instead of the above mentioned amount of € 7.434 thousand. The difference resulting to
€ 523 thousand refers to the decrease in assets (account € 22.620 thousand) of the subsidiary company
OPAP CYPRUS LTD from the mother Company’s balance sheet.
Investments in furniture and fixtures amounted to € 2.276 thousand and refer mainly to the acquisition of
personal computers and electrical blocks of the amount of € 1.848 thousand, telecommunication’s
Page 48
equipment amounting to € 231 thousand and furniture and other equipment of the new building
amounting to € 194 thousand.
Last the investment in fixed assets under construction and advances amounted to € 957 thousand and
refer to the acquisition of KINO decoders that operated in fiscal year-end of 2004.
Within fiscal year-end of 2003 OPAP S.A. with the objective to develop its presence in the fixed odds
betting market in Cyprus and strengthen further more its already leading position in that country, acquired
90% of OPAP Glory Ltd and 20% of Glory Technology Ltd and also established OPAP (CYPRUS) Ltd.
Based on the above the account “Investments and other long-term financial receivables” during the fiscal
year-end of 2003 depicts for the first time the accounts “investments in affiliates” which amounted to €
17.704 thousand and “investments in other companies” which amount to € 10.000 thousand. As
mentioned in note n.9 of the Company’s Balance Sheet “During the valuation of the above investments
(participations) art 31/12/2003, as expected form article 43 of the C.L. 2190/1920, an under value
resulted of the amount of € 23.738.726,40, which burdened the Company’s results of fiscal year-end
2003”.
The increase of formation expenses by € 1.851 thousand refer to, by the amount of € 1.765 thousand,
acquisitions of several software applications (including the software for the new games SUPER 3 and
EXTRA 5), whereas the remaining amount refers mainly to research and feasibility studies expenses of
international games and technical installation feasibility studies.
Investments in buildings and technical works amounting to € 461 thousand refer to, by the amount of €
259 thousand air-conditioning works to the Company’s building in Thessalonica and by the amount of €
161 thousand the arrangement of a hall room for the conduct of SUPER 3.
Investments in machinery amounting to € 333 thousand refer mainly to the acquisition of new terminals
for agents.
Investments in furniture and fixtures amounting to € 851 thousand refer to the acquisition of personal
computers, telecommunication devices and other office equipment.
It should be noted that the Company did not raise funds through the Public Offering and Private
Placement that were conducted in July 2002. The Company’s investments are financed with own cash and
if it is necessary and purposeful investments in the future may be financed through bank loans.
6.9.1. Current Investments
Current investments of the Company that are expected to be concluded within fiscal year-end of 2005
have been scheduled based on the broader strategy development of the Company as it is formed
according to the new facts and needs, dictated by the competition conditions of the market, in which
OPAP S.A. operates in.
In more analysis the Company’s investment program for 2005, as it is currently estimated, will be
approximately around the € 50 million region and will cover:
The provision and installation of information technology centers and terminals in addition to supportive
equipment and services concerning the Company’s technological upgrade. It should be noted that this
amount is only part of the total investment of the current phase and awaiting the submission of the
related Declaration Plan, the total amount can not be precisely defined, but approximately will be around
the € 150 million region based on the previous bid which was cancelled. This amount is estimated, that it
may be disbursed by 31/12/2005, given the bid’s procedure and the gradual delivery of the Agent’s
Terminal Machines.
The provision and installation of a complete Organizational and Informational Administration System for
the monitoring, valuation and exploitation of all the information produced and traded through the
information technology systems, with the objective to improve the efficiency and performance of the
Company’s activities. This investment is budgeted at € 4 million and it includes amongst others the
provision and installation of a business network and document management system of a budget
amounting to € 0,375 million, the provision of a CRM system of a budget amounting to € 1,3 million and
the provision of a business data extraction software of a budget amounting to € 0,9 million. Also it
Page 49
includes and equipment (personal computers, servers, printers, the necessary software etc) for the users
operation servicing as far as new but also older application are concerned.
6.10. Managerial Systems
With the Company’s objective to provide qualitative services towards its game players, its partners but
further more to the wider social entirety, it implements complete Managerial Systems relating to Quality,
Environment Handling and in Social Preoccupation and Responsibility.
OPAP S.A. has been certified for the implementation of a:
-
Complete Quality System according to the requirements of ISO 9001:2000,
Complete Environmental Management System according to the requirements of ISO 14001:1996
Complete Corporate Social Responsibility System according to the requirements of SA 8000:2001
The implementation of these Managerial Systems reflects the Company’s commitment to serve its
important business and social role in a transparent and valid way.
The Company is at a procedural stage of implementing ISO 17799 for the Security of Information, in
addition to the control specifications of lottery security according to the requirements of the World Lottery
Association.
6.10.1. ISO 9001:2000
With the objective to respond to the requirements of its customers so that the services and products
provided will aim towards the achievement of customer satisfaction, covering or exceeding his demand,
through the system implementation, the continuous improvement and the prevention of non compliance,
the Company has been certified from LLOYD’S REGISTER QUALITY ASSURANCE, for its compliance with
the requirements of ISO 9001:2000.
6.10.2. ISO 14001:1996
With its concern to protect the environment, the Company has implemented a complete Environmental
Management System and has been certified with ISO 14001:1996 from BVQI. Through the implementation
framework of the environmental management system, the Company has proceeded with the following
actions:
-
Management of dangerous non stable waste.
Uses of recycling methods wherever feasible.
Establishment of environmental criteria to the Company’s supplies.
Implementation of management and cost saving methods regarding water and natural resources.
6.10.3. SA 8000
The globalization, the political realignments and the technological developments have caused rapid and
radical changes in society global wide. Society’s expectations for the company’s role and responsibilities
are dramatically changing. In the new economy created, companies are not only judged based on their
financial results, products and services, but also based on their environmental and social criteria. OPAP
S.A., having realized its responsibility towards society, has implemented a complete Social Responsibility
Management System, in order to demonstrate its compliance with the requirements of SA 8000:2001. For
this reason the Company has been certified from BVQI.
The Company implements all that is anticipated from the Managerial Systems to its activities. For that the
official certification field upon all of the Company’s certificates describes the following activities:
PLANNING, DEVELOPMENT, ORGANIZATION, OPERATION, CONDUCT and MANAGEMENT OF NUMERICAL
LOTTERY GAMES AND FIXED ODDS OR NON FIXED ODDS BETTING GAMES.
Page 50
7. INFORMATION RELATIVE TO THE SHARE CAPITAL,
ADMINISTRATION AND PERSONNEL OF THE COMPANY.
SHAREHOLDERS,
7.1. Share capital Evolution
The initial share capital of the Company was set according to the paragraph 1 of article 5 of the P.D.
228/1999 (Official Legal Notice Issue Α’ 193/21.9.1999) to the amount of ten billion (10.000.000.000)
drachma, divided in one million (1.000.000) nominal and undividable shares, of a face value of ten
thousand (10.000) drachma each. With the decision of the 1st Extraordinary Unsolicited General Assembly
dated 15.12.2000 the article 5 of the Company’s statute was amended and its share capital amounted to
Grd 10.000.000.000 (29.347.029 €), through a partial capitalization of the difference of the adjustment
that resulted from the valuation of the Company’s assets from Committee of article 9 of C.L. 2190/1920.
On the 3rd assembly of the Company’s Board of Directors, on December 21st, 2000 the deposit of the initial
share capital was certified amounting to Grd 10.000.000.000 (29.347.029 €), whereas on January 22nd,
2001 (prot. n. 37471/00) the certification was submitted by the Company’s B.D. to the registry of Societe
Anonyme companies of the Athens Prefecture (Official Legal Notice Issue 515/24.1.2001).
The 1st Extraordinary General Assembly of the shareholders dated 15.12.2000 unanimously decided with
the articles 29, 31 and 34 of the C.L. 2190/1920 and the articles 5 and 26 of its statute to reduce the face
value of the existing shares from ten thousand (10.000) drachma each to one hundred (100) drachma.
With the n. 34335/21.12.2000 (Official Legal Notice Issue 1622/29.12.2000) Joint Ministerial Decision of
the Ministers of economics and Finance and Culture, through which article 5 of the Company’s statute was
amended, and after the 2nd Extraordinary Unsolicited General Assembly of the shareholders dated
15.12.2000, it was unanimously decided according to the articles 5 and 26 of its statute and paragraphs 2
and 3 of the P.D. 228/1999 a share capital increase by twenty one billion nine hundred million
(21.900.000.000) drachma and the issuance of two hundred and nineteen million (219.000.000) new
nominal shares, of a face value of one hundred (100) drachma each. This share capital was realized as
follows: a) the amount of 1.510.021.575 drachma came from the difference of the adjustment that
resulted from the October 26th, 2000 inventory and valuation of the Company’ assets, as set by paragraph
2 of article 5 of P.D. 228/1999, b) the amount of 10.389.978.425 drachma resulted from the capitalization
of profits carries forward and c) the amount of 10.000.000.000 drachma resulted from the capitalization of
the Company’s liabilities to the Hellenic Republic and the issuance to its favor of equivalent value of shares
according to the contract between the Hellenic Republic and the Company dated December 15th, 2000 and
signed based on the article 27 par. 2 of L. 2843/2000.
On the 3rd assembly of the Company’s Board of Directors, on December 21st, 2000 the deposit of the share
capital increase was certified amounting to Grd 21.900.000.000 (64.269.993 €), whereas on January 22nd,
2001 (prot. n. 37471/00) the certification was submitted by the Company’s B.D. to the registry of Societe
Anonyme companies of the Athens Prefecture (Official Legal Notice Issue 515/24.1.2001).
During the First Ordinary General Assembly of the Company dated June 26th, 2001, it was decided
amongst others and was approved with the number Κ2 –10029 decision of the Ministry of Development,
the expression of the face value of the share and the share capital and in Euros, according to the
ordinances of L. 2842/2000. For this reason the Company’s share capital increased by Grd 709.775.000
with a simultaneous increase of the face value of each share from Grd 100 to Grd 102,225. The
Company’s share capital increase, resulted from the capitalization of reserves from tax free income
amounting to Grd 709.775.000.
In October 17th, 2001 (Official Legal Notice Issue 9340/22.10.2001) the amendment of article 5 of the
Company’s statute was submitted to the registry of Societe Anonyme companies of the Ministry of
Development to which the share capital increase was posted, by Grd 709.775.000 or € 2.082.978,72
according to the decision of its shareholders General Assembly dated 26.06.2001.
Therefore with the above share capital increase and face value of the share to Grd 102,225 (€ 0,30), the
Company’s share capital today amounts to Grd 32.609.775.000 or € 95.700.000, divided into 319.000.000
shares of face value of each share Grd 102,225 (€ 0,30) each.
Page 51
Based on the June 6th, 2003 decision of the Ordinary General Assembly of the shareholders, it was decided
that the Company’s share capital would be converted only in Euros, according to the ordinances of L.
2842/2000. Consequently the Company’s share capital amounts to € 95.700.000, divided into 319.000.000
shares, of face value € 0,30 each.
The table below presents the evolution and the way the Company’s share capital was covered since its
establishment:
General
Assembly
Date
Establishment
Number of
Official Legal
Notice Issue &
Date
Amount of
Share Capital
Increase
Retained
Earnings
Capitalizati
on
(in Grd)
515/24.1.2001
10.000.000.00
0
-
15.12.2000
With
Capitalization of
the revaluation
reserves
difference of the
Company’s assets
according to the
valuation
Committee of
article 9
Through
Liability &
Reserve
Capitalization
10.000.000.000
-
Reduction of face value
15.12.2000
515/24.1.2001
26.06.2001
6.6.2003
9340/22.10.2001
21.900.000.00
0
709.775.000
(in €)
95.700.000
Total
10.389.978.42
1.510.021.575
5
Conversion of Share Capital in €
(in €)
(in €)
30.491.499
33.778.493
10.000.000.000
(1)
709.775.000 (2)
(in €)
31.430.007
Total Share
Capital
Share
Face
Value
(in Grd)
10.000.000.000
10.000
1.000.000
10.000.000.000
100
100.000.000
31.900.000.000
100
319.000.000
32.609.775.000
102,225
319.000.000
(in €)
0,30
319.000.000
(in €)
95.700.000
Number of
Shares
(1) With capitalization of Liabilities towards the Hellenic Republic.
(2) With capitalization of reserves from tax free income.
7.2. Total Shareholders Equity – Share Book Value
The table below analyzes the Company’s total shareholders equity and Company share book value at
31.12.2004:
31.12.2004
Amounts in €
Year-end Number of Shares
Face Value
Share Capital
Fixed Asset Investment Grants
Statutory Legal Reserve
Other Reserves
Retained Earnings
Share Book Value
319.000.000
0,30
95.700.000,00
39.790,34
31.900.000,00
11.159.688,45
1.184.605,69
139.984.084,48
0,44
7.3. Consolidated Total Shareholders Equity – Share Book Value
The table below analyzes the consolidated total shareholders equity and share book value at 31.12.2004:
31.12.2004
Amounts in €
Year-end Number of Shares
Face Value
Share Capital
Fixed Asset Investment Grants
Other Reserves
Retained Earnings
Minority Rights
Share Book Value
319.000.000
0,30
95.700.000,00
39.790,34
31.900.000,00
11.791.584,15
25.582.922,92
160.121,11
165.174.418,53
0,52
7.4. Shareholders
The table below depicts the Company’s shareholder structure based on the share register at 31/3/2005:
Shareholders
Number of Shares
Percentage
Page 52
Hellenic republic
FIDELITY
Investors
Total
162.100.283
18.158.257
138.741.460
319.000.000
50,815%
5,692%
43,493%
100,0%
It should be noted that the Company does not know of the existence any other shareholder, except from
the ones presented above, that possesses, directly or indirectly, a percentage of more or equal to 3% of
its share capital.
At 31/03/2005 the members of the Board of Directors of OPAP S.A. possessed in total 6.470 shares, i.e.
0,002% of the Company’s share capital and the General Managers and Managers of the Company
possessed in total 32.862 shares, i.e. 0,01% of the Company’s share capital.
The Hellenic Republic was the only shareholder of the Company up to the Company’s listing in the Athens
Exchange. For the listing the Hellenic Republic sold 17.132.990 shares of the Company to the public
investors through the public offering and a private placement. The private placement shares were
distributed to the Company’s personnel and agents with a 10% discount. On November 22nd, 2001 the
Hellenic Republic according to the decision of the Inter-ministerial Committee of Privatizations dated
22.12.2000, distributed 1 free for every 10 shares to private investors of the public offering, and they held
them for a period of six months from April 25th, 2001 that is up to October 24th, 2001. The retention
incentive had as a maximum number, one hundred (100) total free shares per investor. The Hellenic
Republic distributed in total 164.926 existing shares. Also, at 8/3/2002 the Hellenic Republic transferred
6.380.000 shares of the Company to the Public Enterprise of Negotiable Securities S.A.
The Hellenic Republic and the Public Enterprise of Negotiable Securities S.A., on July of 2002, offered
Hellenic Republic also, distributed one free ordinary share for every ten ordinary shares of which one
investor, other than the institutional investors, held them for at least six months (with a maximum number
of two hundred (200) total free shares per investor), as a retention incentive. The proceeds from the
public offering were collected by the Hellenic Republic as part of its privatization program.
Last, the Hellenic Republic and the Public Enterprise of Negotiable Securities S.A., in July 2003, offered
Hellenic Republic also, distributed one free ordinary share for every ten ordinary shares to private
investors (other than institutional investors), with the condition to hold them for at least six months as a
retention incentive (with a maximum number of two hundred (200) total free shares per investor). The
proceeds from the public offering were collected by the Hellenic Republic as part of its privatization
program.
It should be noted that according to L. 3336/2005 (Official Legal Notice Issue 96/20.4.2005) par. 1 of
article 27 of L. 2843/2000 (Official Legal Notice Issue 219 Α’) is replaced as follows:
1. The Hellenic Republic may distribute to investors through the Athens Exchange a percentage of up to
sixty six percent (66%) of the occasional share capital of OPAP S.A.
The occasional share capital percentage of the Hellenic Republic of the share capital of OPAP S.A. may not
be less than thirty four percent (34%).
2. The Hellenic Republic sets the half plus one of the members of the B.D. of OPAP S.A. for the duration of
the concession from the Hellenic Republic of the exclusive right of the conduct, management, organization
and operation of the games anticipated from the contract of exclusivity dated 15.12.2000 and signed
between the Hellenic Republic and OPAP S.A. according to article 27 of L. 2843/2000 (Official Legal Notice
Issue 219 Α’), or its possible amendments according to the rules of the contract.
3. The above appointment is done with a jointly decision of the Ministers of Economics and Finance and
Culture in charge of athletic matters.
Page 53
4. The other members of the Company’s B.D. for the above mentioned time duration are elected from the
General Assembly of its shareholders, based on the ordinances of C.L. 2190/1920 relating to societe
anonyme companies in effect.
7.5. Shareholder Rights
Every Company’s share incorporates all rights and obligations designated by the Law and the Company’s
statute, which however, with the reservation regarding the information contained in this chapter, does not
include ordinances that are more restrictive from the ones anticipated by the Law. The possession of the
share’s title implies by the law itself the acceptance by its owner of the Company’s statute’s conditions in
addition to the lawful decisions taken by the General Assemblies of the shareholders, even if the
shareholders were absent.
The Company’s statute does not contain special rights in favor of some specific individuals, except for the
ones that concern the way some members of the B.D. are elected (see section “Company’s AdministrationManagement”).
The Company’s shares are free of negotiation. The negotiation unit is an intangible title of ten (10) shares.
The shareholder’s obligation is limited to the face value of the shares they hold. Shareholders participate
in the Company’s administration and profits according to the Law and the Statute’s ordinances. The rights
and obligations that result from each share follow the share to any catholic or special successor of the
shareholder.
Shareholders exercise their rights in relation to the Company’s Administration on through General
Assemblies, and out of it, only in cases defined by the law.
Shareholders have the preemption right in every future Share Capital Increase of the Company depending
upon their participation on the existing share capital as defined by article 13, paragraph 5 of the Codified
Law 2190/1920.
Every share gives the right of one vote. In order for joint ownership shareholders to have a voting right,
they must nominate, to the Company in writing, a mutual representative for that share, who will represent
them at the General Assembly, and up to determining the representative their exercising rights are
suspended.
Every shareholder has the right to take part to the Company’s General Assembly of the shareholders either
in person or by proxy. Concerning the depositing of shares, in order for the shareholder to participate in
the Company’s General Assembly of the shareholders, the anticipated procedures will be applicable
concerning the Regulation of Operations and Settlements of the Intangible Title System of the Central
Securities Depository, in effect.
Shareholders that do not comply with the above will participate in the General Assembly on with its
permission.
Shareholders representing the 5% of the deposited Share Capital, amongst others:
•
Have the right to request, from the Company’s registered office District Court, the Company’s audit,
according to articles 40, 40e of L. 2190/1920
•
Can request the convocation of the shareholder’s General Assembly. The Board of Directors is
obligated to arrange the convocation of the Assembly within thirty (30) days from the request’s
petition to the Chairman of the Board. Applicants are obliged to state within the petition the subject
matters that the General Assembly will be called upon to decide.
Every shareholder may request, ten (10) days prior to the Ordinary General Assembly, the yearly financial
statements, the respective reports of the Board of Directors and Auditors of the Company and the Annual
Report.
The dividend of each share is paid within 2 months from the date of the Ordinary General Assembly that
approved the yearly financial statements. The place and way of the dividend’s payout is announced
through press publications.
Page 54
Dividends that have not been requested for a period o five years from the time that they were claimed,
are prescribed in favor of the State.
7.6. Company Administration – Management
The 3rd Yearly Ordinary General Assembly of the Shareholders took place on June 6th, 2003 and amended
the Company’s statute and more specifically articles 6, 12, 13, 14, 18, 20, 21 and eliminated articles 22
and 46.
According to article 11 of the Company’s statute the instruments of OPAP S.A., are the Administration
Instrument, the General Assembly and the Auditors. An Administrative instrument of OPAP S.A. is its
Board of Directors.
7.6.1. Board of Directors
The Company’s Board of Directors (B.D.) according to article 12 par. 2 of its statute is comprised of the
following members:
a)
b)
c)
two employee representatives in the Company, that are elected with their substitutes, with direct and
complete voting, according to par. 2 of article 6 of L. 2414/1996 in effect.
one representative designated from the Financial and Social Committee with his substitute, appointed
according to par. 3 of article 6 of L. 2414/1996, in effect.
the remaining members of the B.D. are elected in total, from the General Assembly of the
shareholders, with the pro-viso of article 18 of L. 2190/1920.
The Company’s Board of Directors has he following structure after the 22/3/2005 assembly:
Name
Position in B.D.
Profession
Home Address
Page 55
Kostakos Sotirios of
Konstantinos
Niadas Vasilios of Ioannis
Spanidis Sotirios of Ioannis
Pavlias Nikolaos of Dimitrios
Politis Dimitrios of Ioannis
Anisios Ioannis of Dimitrios
Liapis Serafim of Georgios
Karkasis Christos of Theodore
Nikolaropoulos Sotirios of
Georgios
Likopoulos Dimitrios of
Nikolaos
Kranias Dimitrios of Ilias
Rigopoulos Konstantinos of
Leonidas
Koulosousas Sotirios of
Kontantinos
Chairman
Managing Director
Executive Member,
Employee
Representative
Executive Member,
Employee
Representative
Independent nonexecutive Member,
Representative of
Greek Economic
and Social
Committee
Non- executive
Member
Non- executive
Member
Non- executive
Member
Non- executive
Member
Non- executive
Member
Law School Degree of Athens
University. Public Retiree
Degree in Economics and
Commercial Sciences
(A.S.O.E.E.). Master in
Business Administration
University of Boston
Employee of OPAP S.A.
Degree University of Piraeus
Employee of OPAP S.A.
Degree Panteion University
Civil Engineer
Supreme Court (Arios Pagos)
Lawyer
Economics Degree, Professor
of Regional Development
Veteran Military Officer
6, Metamorfoseos Str.,
Kalithea
21 Platonos Str., N. Erythrea
137-139 Platonos Str.,
Kalithea
16 Galaxidiou Str., Moshato
56 Granikou Str., Vironas
Attica
36 Themistokli Sofouli Str.,
Thessaloniki P.C. 546-55
138A St. Antonios Str.,
Vrilissia
1A Theotokopoulou Str.,
Holargos
Mechanical Engineer
20 Lerou Str., Pefki
Member of EEDIP ΙΙ of the
Architecture Dpt of the
Polytechnic School A.U.T.
8h Ierarhon Str., Pefka
Thessaloniki
Non- executive
Member
Surgeon Dentist
27 Fokionos Negri Str.,
Kypseli
Independent nonexecutive Member
Polytechnic Scholl Degree (Dpt
of Public Administration)
68 Thermopilon Str., P.C.
264 41
Non- executive
Member
Mechanic – Electrician National
Metsovio Polytechnic
22 Hiou Str., Holargos
It should be noted that the Company’s B.D. assembly dated 22/3/2005 and according to the statutory
ordinances that regulate OPAP S.A. unanimously decided:
a) the substitution of the vacant position in the Board of Directors synthesis – due to the filed and
generally accepted resignation of the former Chairman of the Company, Mr. Filippidis Anestis who was
appointed as Chairman of the B.D. since 20/5/2004 – from Mr. Niadas Vasilios. The decision stands with
the condition of approval during the tasks of the impending Ordinary General Assembly of the
shareholders of the Company.
b) The resignation acceptance from the Managing Director position of Mr. Kostakos Sotirios, to whom the
position of the Chairman of the Board of Directors was assigned.
c) the assignment of the Managing Director position duties to Mr. Niadas Vasilios.
According to the article 22 par. 1 of L.2733/1999: “Public enterprises, whose shares represent a
percentage from twenty five percent (25%) to forty nine percent (49%) of their share capital is distributed
to investors, do not come under the ordinances of L. 2414/1996, with the exception of articles 91 and 102.
Within the Board of Directors of these companies, two employee representatives and one representative
from the Economic and Social Committee participate, designated according to par. 2 and 3 of article 6 of
L. 2414/1996, in effect. The Managing Director, that has been selected according to the procedure of
article 7 of L. 2414/1996, continues to exercise his duties until the end of his term or the breach of his
contract, for the reasons mentioned in the Management Contract”.
1
2
Obligations of public organizations to consumers.
Personnel matters.
Page 56
According to the article 6b of L.2843/2000 the ordinances of article 22 par. 1 of L.2733/1999 are applied
to OPAP since its listing in the Athens Exchange independently of the percentage of the share capital that
is distributed to investors.
According to the Company’s statute, the Chairman of the B.D. represents the Company judicially and extra
judicially in the presence of all authorities. Additionally he undertakes every responsibility assigned by the
Board of Directors and signs every contract of the Company that has been approves by the Board of
Directors.
The B.D. is the supreme executive instrument of the Company, it is convoked through the Chairman’s
invitation and confers at the Company’s registered office.
The B.D. term ends in 5 years in December of 2005. The Chairman’s term also ends in December 2005.
According to the Company’s statute, the Managing Director is a member of the Board of Directors and his
capacity is not irreconcilable to the capacity of the Chairman of the Board of Directors. The Board of
Directors assigns to the Managing Director, at its formation into a body, complete managerial and
representational authority. Within the framework of this authority the Managing Director is above all of the
Company’s departments, directs their work, takes the necessary decisions within the framework set by the
Company’s Statute, the Regulations that govern the Company’s operations, the approved programs and
budgets as well as the decisions of the Board of Directors. The Managing Director signs with the Company
an employment contract. The contract’s duration and monthly compensation are determined through a
decision of the Board of Directors. In any case the contract’s duration can not exceed a five (5) year
period.
Τhe Board of Directors of OPAP S.A. during its assembly dated Thursday, March 31st, 2005 and after
taking consideration: a) Its relevant decision n. 8/22.3.05, b) The statutory ordinances that govern the
Company, c) The possibility of the probable redefinition of the authorities and duties of the Chairman of
the Board and the Managing Director at, at its discretion, the proper and necessary time, provided that it
is required, d) The administrative, operational, and business needs of OPAP S.A. as they have been
formed at the current time juncture, has unanimously decided the particular designation of the authorities
and duties of the Chairman of the Board and the Managing Director as follows: 1. The assignment of all
matters relating to the Company’s relations with the Investment Community (Athens Exchange, Hellenic
Capital Market Committee, Relations with Shareholders and especially with Institutional Investors) in
addition to the authorities related to the General Management of Finance and Development, Foreign
Relations Management and the Marketing section, to the Managing Director Mr. Vasilios Niadas 2. The
assignment of all the remaining authorities to the Chairman of the Board of the Company Mr. Sotiris
Kostakos.
In the fiscal year-end of 2004, the total fees paid by the Company to the members of the Board of
Directors for their duties, including the fees of the Managing Director, amounted to approximately € 449
thousand with a maximum fee of approximately € 122 thousand and a minimum of approximately € 1
thousand. Additionally, the members of the B.D. received approximately € 33 thousand, for their
participation in Committees of the Company, as extraordinary fees payable with a decision from the B.D.
The above fees charge the Administration Expenses of the Company.
From the Company’s B.D., Mr. Spanidis and Mr. Pavlias, representatives of the Company’s employees,
have a salaried relation with the Company for which they received fees amounting to € 190 thousand in
total for fiscal year-end 2004.
The brief resumes of the Company’s Chairman of the Board, the Managing Director’s, the members of the
B.D. in addition to the Senior Managers of the Company per department are listed below:
Kostakos Sotirios, of Konstantinos, Chairman.
Mr. Kostakos, age 59, assumed the duties as Chairman of the Company in March of 2005. He is a
graduate of the law School of the University of Athens, public retiree and an executive member of the
Board of Directors. From 21/5/2004 until March of 2005 he was the Managing Director of the Company.
Niadas Vasilios of Ioannis, Managing Director.
Mr. Niadas, age 50, assumed duties as Managing Director of the Company on 23/3/2005. He is a graduate
of the Higher School of Economic and Commercial Sciences and of the Boston University (Master in
Business Administration), executive member of the B.D. of OPAP S.A.
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Spanidis Sotirios of Ioannis, Member of the B.D., Employee Representative.
Mr. Spanidis, age 54, has graduated with a degree in Business Administration from the Piraeus University,
executive member of the B.D. of OPAP S.A.
Pavlias Nikolaos of Dimitrios, of the B.D., Employee Representative.
Mr. Pavlias, age 47, has graduated with a degree in Business Administration from Panteion University,
Manager of OPAP S.A., executive member of the B.D. of OPAP S.A.
Politis Dimitrios of Ioannis, Member of the B.D., Representative of the Greek Economic and Social
Committee
Mr. Politis, age 51, is a graduate civil engineer and vice chairman of the Greek Economic and Social
Committee. He is an employee of the Hellenic Railways Organization S.A., owned by 100% by the Hellenic
Republic. Mr. Politis is also vice chairman of the General Confederation of Labor, independent nonexecutive member of the B.D. of OPAP S.A.
Anisios Ioannis of Dimitrios, Member of the B.D.
Mr. Anisios, age 47, is a Supreme Court (Areios Pagos) Lawyer, nonexecutive member of the B.D. of
OPAP S.A.
Liapis Serafim of Georgios, Member of the B.D.
Mr. Liapis, age 42, is a graduate Economist and Professor of the Regional Development of the Aristotelian
University of Thessalonica, nonexecutive member of the B.D. of OPAP S.A.
Karkasis Christos of Theodore, Member of the B.D.
Mr. Karkasis, age 64, is a Veteran Military Officer, nonexecutive member of the B.D. of OPAP S.A.
Nikolaropoulos Sotirios of Georgios, Member of B.D.
Mr. Nikolaropoulos, age 54, Mechanical Engineer, nonexecutive member of the B.D. of OPAP S.A.
Likopoulos Dimitrios of Nikolaos, Member of the B.D.
Mr. Loukopoulos, age 60, is a member of the EEDIP ΙΙ of the Architectural Department of the Polytechnic
School of the Aristotelian University of Thessalonica, nonexecutive member of the B.D. of OPAP S.A.
Kranias Dimitrios of Ilias, Member of B.D.
Mr. Kranias, age 44, is a Surgeon Dentist, nonexecutive member of the B.D. of OPAP S.A.
Rigopoulos Konstantinos of Leonidas, Member of B.D.
Mr. Rigopoulos, age 43, is a graduate with a Polytechnic Scholl Degree (Dpt of Public Administration),
independent nonexecutive member of the B.D. of OPAP S.A.
Koulosousas Sotirios of Konstantinos, Member of B.D.
Mr. Koulosousas, age 56, is a Mechanic – Electrician from the National Metsovio Polytechnic, nonexecutive member of the B.D. of OPAP S.A.
7.6.2. General Managers
Iliopoulos Michael of Georgios, Human Resources and Administrative Support General Management.
Mr. Iliopoulos, age 60, was hired by the Company on 1/10/1974. From 3/11/2003 he assumed duties as
General Manager of Human Resources and Administrative Support. He is a graduate from the Business
Administration Dpt of the Macedonian University, and also has a degree from the two years C.I.S Dpt of
EL.KE.PA (Productivity Center). From 8/5/2000 he was Head of the Production and Supply Management
and from 14/3/2001 he was simultaneously carrying out duties in the Financial Serviced Dpt.
Tsaousis Konstantinos of Vasilios, Finance and Development General Management.
Mr. Tsaousis, age 46, was by the Company on 3/11/2003 as the General Manager Of Finance and
Development. From 10/2001 he was an Advisor to the Company’s Administration. He received a B.A.
degree from the ECONOMICS-TAMES POLYTECHNIC and also received a master’s degree from the
EUROPEAN STUDIES-READING UNIVERSITY.
Voukelatou-Lambrou Evaggelia of Konstantinos, Marketing General Management.
Mrs. Voukelatou-Lambrou is 44 years old and from 6/11/2003 se assumed duties as General Manager of
Marketing. She is an OPAP S.A. employee since 3/1/1989. On 27/6/2001 she assumed duties as the Head
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of the Advertising Dpt of the Press and Advertising Management. She is a Law School graduate from the
Political Science and Public Administration Dpt.
Pipis Panagiotis of Panagiotis, Information Technology and Business R&D General Management.
Mr. Pipis, age 44, assumed duties as the General Manager of Information Technology and Business R&D
General Management since 3/11/2003. He is an OPAP S.A. employee since 12/9/1988. From 17/8/1999 he
acted as Head of I.T. Management. He has graduated from the Aristotelian University of Thessalonica
(Mathematics Dpt). He also holds a degree in Technology Management and Formation of of Technology
strategies in TECHNOSCOPIOU companies (supplementary educational program).
Moularas Michael of Georgios, General Management of Macedonia region.
Mr. Moularas, age 39, assumed the duties as General manager of the Macedonian region since 9/7/2004.
He is a graduate from the Aristotelian University of Thessalonica –Economics Dpt.
7.6.3. Managers
Tomaras Nikolaos of Anastasios, Legal advisor-Head of Legal Services Dpt.
Mr. Tomaras, age 66, is Head of the Legal Services Dpt. He is an OPAP S.A. employee since 1968, initially
as Head of the Company’s Property Dpt, then as Head of the Special Personnel Dpt of the Administration
Management and finally at the Settlements Dpt of the Financial Management of the orgnization. Since
1989, he has been positioned as Head of the Legal Services Dpt and Legal Advisor of OPAP S.A. and is
responsible for all of the Company’s legal-judicial matters that arise, especially in labor law maters. He is a
graduate of the Panteion School and the Law School of Athens.
Loukaki Maria of Dimitrios, Internal Audit Manager.
Mrs. Loukaki, age 45, is the Internal Audit Manager of the Company. She is an OPAP S.A. employee since
20/2/1984. On 14/2/2003 she assumed duties as Head of the Productivity Dpt of the Financial Audit
Management. On 5/6/2003 she was appointed, by the B.D., as the Company’s Internal Audit Manager.
She is a graduate from the National Kapodistrian University of Athens, Public Law and Political Sciences
Dpt.
Stergiopoulos Evaggelos of Ioannis, Human Resource Manager.
Mr. Stergiopoulos, age 62, is exercising assigned duties in the Human Resource Management. He is an
OPAP S.A. employee since 11/4/1970. From 1992 until 14/7/2004 he was Head of the Game Drawings
Dpt. From 15/1/2004 to 14/7/2004 he was Head of the Games Processing Dpt. He is a High School
graduate.
Bekiaris Pavlos of Panagiotis, Regional Organization Manager.
Mr. Bekiaris, age 56, has been the regional Organizational Manager since 6/11/2003. He is an OPAP S.A.
employee since 17/8/1966. From 2/6/1999 to 5/11/2003 he was Head of the Betting Management. He is a
High School graduate.
Koulouris Antinoos of Konstantinos, Regional Centers Manager.
Mr. Koulouris, age 63, has been the Head of Regional Centers since 6/11/2003. He is an OPAP S.A.
employee since 25/9/1976. From 31/1/2001 until 7/6/2004 he was Head of the B.D. Secretarial Dpt. He is
a graduate of the University of Bolonia in Political Sciences.
Tsilivis Konstantinos of Christos, Accounting and Investor Manager.
Mr. Tsilivis, age 51, is exercising assigned duties in the Accounting, Financial Management and
Investments Management. He is an OPAP S.A. employee since 27/2/1984. On 30/5/2001 he was assigned
duties as Head of the Accounting Dpt. He is a graduate of the Aristotelian University of Thessalonica, Law
and Economics School.
Pavlias Nikolaos of Dimitrios, Cash Flow Manager.
Mr. Pavlias, age 48, is the Cash Flow Manager of the Company since 16/3/2005. He is an OPAP S.A.
employee since 5/11/1984. On 14/12/1999 he was elected as an employee representative of the
Company’s Board of Directors. He was assigned duties as Head of the Profits Dpt from 29/5/2001 until
5/11/2003. From 6/11/2003 until 15/3/2005 he was Head of the Profits and Financial Management of the
Company’s Sales Network Management. He is a graduate of the Panteion University in Business
Administration.
Koukis Minas of Christos, Logistics and Property Manager.
Mr. Koukis, age 57, is the Logistics and Property Manager since 12/7/2004. He is an OPAP S.A. employee
since 10/3/1968. From 7/11/1997 he was Head of the Statistics and Planning Dpt, and Head of the R&D-
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Games Conduct Management until 11/7/2004. Mr. Koukis has assumed duties as Secretary of the
Company’s Board of Directors with its decision. He is a graduate of the Panteion University in Political
Sciences.
Vlavianos Georgios of Dimitrios, Games and Betting Operation Manager.
Mr. Vlavianos, age 60, is the Games and Betting Operation Manager since 12/7/2004. He is an OPAP S.A.
employee since 1/4/1971. From 2/7/1999 until 5/11/2003 he was Head of the Property Management.
From 6/11/2003 he was Head of the Logistics and Property Management until 11/7/2004. He is a graduate
of the Higher School of Economic and Commercial Sciences (A.S.O.E.E.).
Magganas Evaggelos of Aristomenis, Investor Relations Manager.
Mr. Magganas, age 47, is the Investor Relations Manager since 17/3/2005. He is an OPAP S.A. employee
since 11/2/1985. He is a graduate from the Aristotelian University of Thessalonica – Law and Economics
School, Economic Sciences Dpt. From 2000 he was Head of Budgeting and since 2001 Head of the
Company’s Investor Relations. From 6/11/2003 until 16/3/2005 he was Head of the Cash Flow
Management.
Kovaios Ioannis of Panagiotis, Advertising and Promotion Manager.
Mr. Kovaios, age 44, is exercising assigned duties as Manager in the Advertising and Promotion
Management since 19/7/2004. He has also exercised assigned duties as Manager of the Public Relations
and Media Management from 6/11/2003 until 18/7/2004. He is an OPAP S.A. employee since 3/1/1989.
From 20/10/2000 he was Head of the R&D office of the Development Management. He is a graduate from
the University of Patra, Mathematics Dpt.
Aggelopoulou Konstantina of Ioannis, Profit and Financial Management of Sales Network Management.
Mr. Aggelopoulou is 49 years old and since 16/3/2005 she is the Profit and Financial Management of Sales
Network Management. She is an OPAP S.A. employee since 16/8/1982. From 2/6/1999 until 5/11/2003
she was Head of the Personnel Dpt. From 6/11/2003 until 14/7/2004 she was Head of the Human
Resource Management. From 15/7/2004 to 15/3/2005 she was Head of the Company’s Public relation and
Media Management. She is a Law School graduate from the Public Law Political Sciences Dpt.
Koutsopetras Panagiotis of Ioannis, Promotion and Network Development Manager.
Mr. Koutsopetros, age 56, is exercising assigned duties as Manager of the Promotion and Network
Development Management since 15/7/2004. He is an OPAP S.A. employee since 16/2/1972. From
11/6/1990 until February of 1994 he was Head of the Cyprus Region. From 15/1/2004 he was Head of the
Betting Operation Dpt. He is a High School graduate.
Kouskoumvekakis Dimitrios of Emmanuel, Public relations and Media Manager.
Mr. Kouskoumvekakis, age 63, is the Public relations and Media Manager since 15/7/2004. He is an OPAP
S.A. employee since 1/6/1973. He has served as Head of the Internal Auditing, Press and Public relations
and Accounting Dpt. From 20/10/2003 he was exercising assigned duties as Head of the Agency
Management. From 6/11/2003 to 14/7/2004 he was Head of the Marketing and Network Development
Management. From 15/7/2004 until 15/3/2005 he was Head of the Financial Audit Management. He is a
graduate of the Higher School of Economic and Commercial Sciences (A.S.O.E.E.), Economics Dpt.
Filippidou Antonia of Stavros, International Relations Manager.
Mrs. Filippidou, 45 years old, is the International Relations Manager since 6/11/2003. She is an OPAP S.A.
employee since 30/1/1987. From 20/10/2000 until 17/10/2002 she was Head of the Press and Public
Relations Office and from 18/10/2002 until 5/11/2003 she was assigned duties as Head of the Press and
Public Relations Dpt. She is a Law School graduate of the Political Science and Public Administration Dpt.
She also holds a master’s degree (D.E.A.) with a major in Community Law.
Zigoulis Athanasios of Dimitrios, I.T., New technology and Business Center Operations Manager.
Mr. Zigoulis, age 46, is the I.T., New technology and Business Center Operations Manager since
19/7/2004. He is an OPAP S.A. employee since 20/3/1989. From 20/8/2000 to 29/2/2004 he was Head by
assignment in the Branch of Cyprus and from 1/3/2004 until 18/7/2004 he was Head of the Game
Processing and Betting Operation Management. He is a graduate of the Aristotelian University of
Thessalonica, Mathematics Dpt. He is also a master’s degree graduate with a major in Business
Administration of the Productivity Center of Cyprus.
Tsaboulas Evaggelos of Athanasios, Game Conduct R&D Manager.
Mr. Tsaboulas, age 46, is the Game Conduct R&D Manager since 12/7/2004. He is an OPAP S.A. employee
since 25/11/1985. From 6/11/2003 until 11/7/2004 he was Head of the Advertising and Promotion
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Management. He is a polytechnic School graduate of the Technology Mechanics School, Naval Architect
Dpt.
Papoutsis Aggelos of Ioannis, Financial Audit Manager.
Mr. Papoutsis, age 42, is the Financial Audit Manager since 16/3/2005. He is an OPAP S.A. employee since
10/8/1981. From 15/1/2004 until 31/5/2004 he was Head of the Cashier’s Dpt. From 1/6/2004 until
27/9/2004 he was Head of the B.D. Secretariat. From 28/9/2004 until 15/3/2005 he was Head of the
Shareholder Service Dpt. He is a graduate of the National Kapodistrian University of Athens, Political
Science Dpt. He is a candidate professor at the Thrace University.
Iliopoulou Theodora of Christoforos.
Mrs Iliopoulou, age 61, maintains the position of Manager at the Administrations disposal. She is an OPAP
S.A. employee since 1/7/1972. From 12/3/2003 until 5/11/2003 she was Head of the Financial Audit and
Productivity Management. From 6/11/2003 until 7/7/2004 she was Head of the Financial Audit
management. She is a graduate of the National Kapodistrian University of Athens, Mathematics Dpt.
The total fees of the General Managers and Managers of the Company mentioned above for the fiscal
year-end of 2004 amounted to approximately € 2.815 thousand with a maximum fee of approximately €
228 thousand and a minimum fee of approximately € 63 thousand.
The Company also cooperates with special advisors based on signed contracts for the execution of
administrative nature operations. More specifically, the Company has hired special advisors that render
services concerning law matters, business advisory subjects, software development and technology
information services, accounting and tax subjects and engineering and architectural matters. The total
emoluments received by the special advisors amounted to approximately € 560 thousand for the fiscal
year-end of 2004.
It should be noted that there is no relationship of any kind between the members of the B.D. and the
Company’s Managers with the exception of Mrs. Iliopoulou Theodora spouse of Mr. Iliopoulos Michael
Human Resources and Administrative Support General Manager.
Additionally, no one from the B.D. members or managers of OPAP S.A. has ever been condemned for
dishonorable acts, or financial crimes or are involved in judicial pending cases regarding bankruptcy,
criminal acts, or have been prohibited from practicing:
•
•
•
Business activities
Financial transactions
A profession as an investor advisor, or as a banking or insurance company manager, underwriter,
security company manager etc,
except from the information given in chapter 3 “ Information regarding the Annual Report compilation and
the Company’s Auditors” in the section regarding the judicial cases “Allegations for Malpractice against the
previous Board of Directors Members”.
It should be noted that apart from the transactions mentioned above, there has been no other business
relation, or transaction during the last three years and the current year between the administrative,
managerial and supervision instruments of OPAP S.A. with the Company itself.
All B.D. members and managers of the Company have a Greek citizenship. The B.D. members and
Company’s managers postal address is the Company’s registered office, 62 Kifisou Str., P.C. 121 32
Athens.
7.7. Corporate Governance
The members of the Board of Director are distinguished, according to articles 3 and the ones following of
L. 3016/2002, to executive, who can be employed or provide their services to the Company and non
executive members who exercise exclusively duties regarding the Board of Directors.
Executive members are the employee representatives, the Chairman and the Managing Director when they
are assigned with authorities defined by articles 19 and 20 of the Company’s statute. From the remaining
members of the Board of Directors two (2) additional members, maximum, can be permanently employed
or provide services to the Company with a contract of work or salaried relation. These members are
appointed through the General Assembly’s decision, in which amongst others, the time of their
employment, their responsibilities and fee is determined. Non executive members are the Board of
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Directors members that do not have a salaried relation or work contracts, neither render in any other way
their services to the Company. The number of non executive members can not be less than the 1/3 of the
total number of members. If a fraction occurs it is rounded to the next number. Between the non
executive members there must be at least two (2) independent members. The executive or non executive
characteristic of the members of the Board of Directors is determined by the B.D. The independent
members are determined by the General Assembly.
It should be noted that on December 17th 2002, the Company’s Board of Directors approved a new
internal regulation in compliance to the corporate governance law and the regulation of conduct for the
listed companies in the Athens exchange (5/204/14.11.2000 decision of the Hellenic Capital Market
Commission). The new internal regulation has been applied and the implementation of the new
organizational chart has been concluded right after the Company’s relocation.
Additionally, the Managing Director is a member of the Board of Directors, and relishes all privileges,
including the possibility of being elected as Chairman of the Board.
The main managerial executives of the Company according to its organizational structure occupy the
following positions:
•
•
•
•
•
•
•
Managing Director,
Head of Legal Services,
Human Resources and Administrative Support General Manager,
Finance and Development General Manager,
Marketing and public Relations General Manager,
Information Technology and Business R&D General Manager and
Macedonian region General Manager.
By the enforcement of L. 3016/2002 regarding the Corporate Governance, the organizational structure
also includes:
•
•
Committee of Audit and Supervision and Internal Audit Management
Investor Relations Management
The Committee of Supervision and Audit and the Internal Audit Management comprise the instruments of
the Company’s Internal Audit conduct.
The Committee of Supervision and Audit is comprised, according to the Internal Regulation of the
Company, from one to three non executive members of the B.D. and have as its President, one
independent member from the Board. For the time being the Committee’s President is Mr. Konstantinos
Rigopoulos. The Committee’s objective is to monitor the internal audit conduct initiated from the Internal
Audit Management and the valuation and exploitation of the audit work findings.
The Internal Audit Management according to the Internal Regulation is independent, regarding its
operation, it is not subordinated in hierarchy with any other servicing unit of the Company and is
supervised from the Supervision and Audit Committee. The Internal Audit Management is responsible for:
•
•
•
•
•
Monitoring the implementation and keeping of the Internal Regulation of Operations in addition
to the Stock Exchange and the Corporate Legislation.
Reporting to the B.D. cases where there is a conflict of private interest between the members of
the Board and Management with the Company’s interests.
Reports to the Board of Directors in writing at least once every three months concerning the
conducted audits.
Cooperating and servicing the Supervision Authorities with the approval of the Board of Directos,
whenever that is necessary.
Informing the Company’s personnel regarding the current legislation that concerns its activities.
The Shareholder Relations Management is comprised of two departments:
•
•
Shareholder Service Dpt.
Corporate Announcements Dpt.
The Shareholder’s Relations Management objective, according to the Internal Regulation of Operations, is
to service the communication of the shareholders with the Company’s Administration in order to secure an
effective corporate governance and thus through its operation to achieve:
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•
•
•
A. The security of the Shareholder’s interests
B. Reduction of the Company’s capital cost
C. Maximization of the share’s dynamics as a investing option.
More specifically the Management’s authorities pertain:
•
•
•
The information of the investment public regarding the latest corporate developments and events
that may affect the share’s price.
The communication and analytical updating of the institutional investors.
The briefing of financial analysis executives and institutional investors that are or have shown an
interest in becoming shareholders of the Company.
The Shareholder’s Relations Management, as depicted in the organizational chart, is in direct contact with
the Company’s Managing Director, in order for the Managing Director to be able to draw information
promptly and immediately for the updating of the investment public.
The new internal regulation also provides the existence of a Health and Security Service. The Board of
Directors determines a fee and benefit committee, from its non executive members, which counsels the
fees of executive members of the Board, the executive managers and employee fees, apart from the
anticipated Collective Labor Contract.
7.8. List of individuals subject to the ordinances of article 8 of decision n. 5/204/14-11-2000
of the Hellenic Capital Market Commission
According to article 8 of decision n. 5/204/14-11-2000 of the Hellenic Capital Market Commission “during
the 30 day period from the expiry of the period to which the quarterly financial statements of the
Company are referred to, according to the P.D. 360/1985, or to the possibly lesser time period until the
publication of these statements, as well as from the time during the exercise of their authorities, or
through any other way any classified information comes to their possession, as defined by article 2 of P.D.
53/1992, the individuals listed below are allowed to set up transactions with shares of the Company, or
derivative products upon the Company’ shares which are negotiable in the Athens Derivative Exchange or
though an associated, with the Company, company as long as they have previously notified the Company’s
Board of Directors and the notification has been published to the Daily Athens Exchange List one day prior
to the transaction date”. The following table depicts the physical and legal entities that are subject to the
above ordinances at 31.12.2004:
Name
Hellenic Republic
Filippidis Anestis of Anastasios
Kostakos Sotirios of Konstantinos
Iliopoulos Michael of Georgios
Tsaousis Konstantinos of Vasilis
Lambrou Evaggelia of Konstantinos
Pipis Panagiotis of Panagiotis
Moularas Michael of Georgios
Tsilivis Konstantinos of Christos
Loukaki Maria of Dimitrios
Tomaras Nikolaos of Anastasios
Harmantas Glafkos of Ioannis
Melas Christos of Spiridon
Kazas Vasilios of Constantine
Position
Major Shareholder
Chairman OPAP S.A.
Managing Director OPAP S.A.
Member of the Board – Internal Auditing Supervisor
Member of the Board – Manager OPAP S.A.
Member of the Board – Head of Dpt OPAP S.A.
Human Resources and Administrative Support General Manager
Finance and Development General Manager
Marketing General Manager
Information Technology and Business R&D General Manager
General Manager of Macedonia Region
Accounting and Investor Manager
Internal Audit Manager
Legal advisor-Head of Legal Services Dpt
Investor Relations Manager
Investment Relations Consultant
Chartered Auditor Accountant
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Konstantinou Sotirios of Andreas
Papoutsis Aggelos of Ioannis
Mitropolou Eleni of Ioannis
KANAKI S.A. GROUP –COMPANY
ADVISORS
Kanakis Ioannis of George
Head of Shareholder Services Dpt
Head of Corporate Announcements Dpt.
Financial Advisor – Company
Chairman of the Board & Managing Director of Kanakis Group- Financial
Advisor of OPAP S.A.
The following table presents the physical and legal entities that are subject to the above ordinances at
31.03.2005:
Name
Hellenic Republic
Kostakos Sotirios of Konstantinos
Niadas Vasilios of Ioannis
Filippidis Anestis of Anastasios
Iliopoulos Michael of Georgios
Tsaousis Konstantinos of Vasilis
Lambrou Evaggelia of Konstantinos
Pipis Panagiotis of Panagiotis
Moularas Michael of Georgios
Tsilivis Konstantinos of Christos
Loukaki Maria of Dimitrios
Tomaras Nikolaos of Anastasios
Magganas Evaggelos of Aristomenis
Harmantas Glafkos of Ioannis
Melas Christos of Spiridon
Kazas Vasilios of Constantine
Konstantinou Sotirios of Andreas
Papoutsis Aggelos of Ioannis
Mitropolou Eleni of Ioannis
KANAKI S.A. GROUP –COMPANY
ADVISORS
Kanakis Ioannis of George
Position
Major Shareholder
Chairman OPAP S.A. (from 22/3/2005) – Managing Director until 22/3/2005
Managing Director OPAP S.A. (from 22/3/2005)
Chairman OPAP S.A. (until 22/3/2005)
Member of the Board - Internal Auditing Supervisor
Member of the Board – Manager OPAP S.A.
Member of the Board – Head of Dpt OPAP S.A.
Human Resources and Administrative Support General Manager
Finance and Development General Manager
Marketing General Manager
Information Technology and Business R&D General Manager
General Manager of Macedonia Region
Accounting and Investor Manager
Internal Audit Manager
Legal advisor-Head of Legal Services Dpt
Investor Relations Manager (from 17/3/2005)
Investor Relations Manager (up to 31/1/2005)
Investment Relations Consultant
Head of Shareholder Services Dpt (up to 17/3/2005)
Head of Corporate Announcements Dpt.
Financial Advisor – Company
Chairman of the Board & Managing Director of Kanakis Group- Financial
Advisor of OPAP S.A.
During the period of 1/1/2004 to 31/12/2004 the following changes took place on the list of liable
individuals:
-Koskinas Konstantinos of Marinos: Chairman and Managing Director up to 20/5/2004
-Filippidis Anestis of Anastasios: Chairman from 21/5/2004 to 22/3/2005
-Touloupi Eleftheria of Xenofon: Head of Corporate Announcements Dpt. up to 11/7/2004
-Papoutsis Agelos of Ioannis: Head of Shareholder Services Dpt up to 16/3/2005
-Chararas Dimos of Georgios: Head of Shareholder Services Dpt up to 11/7/2004
-Charmantas Glafkos of Ioannis: Investor Relations Manager up to 31/1/2005
Page 64
7.9. Organizational Structure Chart
Page 65
7.10. Participations of the Company’s B.D. Members and Major Shareholders to the
Administration and/or Share Capital of Other Companies
The members of the Board of Directors do not participate in the Administration, management or share
capital (with a percentage of more than 3%) of other companies, with the exception of Mr. Serafim Liapis
who is the Chairman of OPAP SERVICES S.A., Mr. Karkasis Christos who is a member of the B.D. of OPAP
INTERNATIONAL LTD, Mr. Rigopoulos Konstantinos who is a member of the B.D. of OPAP GLORY LTD, OF
Mr. Kranias Dimitrios who is also a member of the B.D. of OPAP GLORY LTD AND Mr. Koulosousas Sotirios
who is a member of the B.D. of OPAP GLORY TECHNOLOGY LTD., as mentioned in Chapter 12 “Associated
Companies”.
The Hellenic Republic is the major shareholder of the Company, which maintains a substantial number of
investments (participations) in state legal entity companies. These investments (participations) are not
presented in the Annual Report due to their significant number.
7.11. Personnel
The Company’s employed personnel is divided into two employee categories. The first category includes
the permanent staff and the second the part time personnel which is hired through a contract that has a
one day duration. The following table, depicts information regarding the number of the permanent staff,
by rank, during the last three year period:
Category
Managing Director
General Managers
Managers
Head of Department
Rest of Employees
Total
2002
2003
2004
1
0
10
24
197
232
1
4
19
47
156
227
1
5
17
53
225
301
The total, per year, number of the part time personnel during the last three year period is analyzed below:
2002
485
Part Time Personnel
2003
514
2004
851
Today the majority of the part time personnel provides security, material transportation, and cleaning
services to the Company.
The personnel fees (permanent staff and part time personnel) are presented below:
Fees (€ in thousands)
Salaries
Employers’ contribution – indemnities - other grants
Total
2002
15.976
5.648
21.624
2003
16.160
6.126
22.286
2004
20.759
7.198
27.957
The relations between the Administration and the Company’s personnel is satisfactory.
The Company has signed a collective labor contract with its employees, which is renewed on a yearly
basis. The Collective Labor Contract for the year of 2005 has not been signed yet and the relevant
negotiations will take place in the near future. The above mentioned collective contract is expected to be
in effect from 1.1.2005, as it was done with all previous collective contracts of the Company’s employees.
At 31/12/2004, from the 300 permanent staff of the Company, 52 are university graduates, 10 are
polytechnic graduates and the remaining 238 are graduates of compulsory and second degree education.
EDUCATION
University graduates
Polytechnic graduates
NUMBER OF PERMANENT PERSONNEL
52
10
%
17%
3%
Page 66
Other
Total
238
300
80%
100%
The Company’s personnel relishes additional insurance benefits since it is permanently insured in collective
life insurance programs (see Section Insurance Contracts).
The Company’s Internal Regulation of Operations anticipates 414 operational positions, and the ones
covered at 31/12/2004 account to 301, i.e. coverage percentage of 72,46%.
Page 67
8. INSTITUTIONAL FRAMEWORK OF THE COMPANY’S OPERATION
8.1. Basic Laws - Ordinances
The Company is governed by the ordinances of L. 2414/1996 “Modernization of Public Companies and
Organizations and other ordinances” and C.L. 2190/20 “for societe anonyme companies”, as amended and
in effect. It should be noted that based on the article 22 par. 1 of L. 2733/1999 (Official Legal Notice Issue
155/30.7.1999), public companies that distribute to investors a percentage from 25% up to and 49% of
their share capital, are not dependent upon the ordinances of L. 2414/96, with the exception of articles 9
and 10. According to article 27, paragraph 6b of L. 2843/2000 (Official Legal Notice Issue
219/21.10.2000), the above ordinance of article 22 par. 1 of L.2733/1999 is implemented to OPAP S.A.
since its listing in the Athens Exchange, independently of the percentage of the share capital distributed to
investors.
Apart for the above the most significant legislations and rules that regulate the Company’s operation, are
the following:
•
Presidential Decree 228/1999 (Official Legal Notice Issue Α’ 193/21.9.99) issued upon the special
authorization of article 2 par. 1 of L. 2414/1996 following the 12/21.10.1998 opinion of the B.D.
of OPAP, published in the Official Legal Notice Issue the statute of OPAP S.A.
•
Article 27-L. 2843/2000 (Official Legal Notice Issue 219 21-10-2000), in effect.
•
Law 3057/2002 in addition to the amendments of par. 1 and 2 of article 102 of L. 2725/1999
according to par. 1 of article 36 of L. 3057/2002 and the added par. 10 according to par. 2 of
article 36 of L. 3057/2002 in article 27 of L. 2843/2000 (Official Legal Notice Issue 219 Α)
•
Law 3037/2002 “Prohibition of Games" (Official Legal Notice Issue Α’ 174/30.7.2002)
•
Concession of exclusive rights Contract between OPAP S.A. and the Hellenic Republic.
•
Law 3336/2005 (Official Legal Notice Issue 96/20.4.2005) in replacement of par.1 of article 27 of
L. 2843/2000 (Official Legal Notice Issue 219 Α’).
8.2. Regulatory Framework of Operations of OPAP S.A.
Also the Regulatory Framework of Operations of OPAP S.A. exists with he following regulations:
1. Game Regulations
2. OPAP S.A. Internal Organization and Operation Regulation
3. OPAP S.A. Supply of Materials and Services Regulation
4. The Regulation of Agencies Operation – Obligations and Rights of OPAP Agents (Ministerial Decision
25148/1999).
8.3. Special Topics of OPAP S.A. Framework of Operations
1. Interstate Agreement between the Hellenic Republic Government and the Cypriot Republic Government
on February 12th, 2003.
2. Subsidy Deposits.
3. Map of Obligations to the Consumer.
4. Lottery Game Duties and Taxes
Page 68
9. SUMMARIZED COMPANY SECTOR INFORMATION
9.1. International Market of Gaming
The gaming sector is globally divided into three sectors. These sectors regard the lottery sector, the casino
sector and the betting sector (for example, betting on athletic events). The Company today operates in
the lottery and betting sector.
The lottery sector includes lotteries of “active participation” and lotteries of “passive participation”. In
“active participation” lotteries players’ place bets by picking a specific number or a series of numbers from
the printed numbers on the lottery ticket. In “passive Participation” lotteries players’ place bets by picking
a ticket from a number of already printed lottery tickets. “Active participation” lotteries are usually
conducted through a network of terminal machines that are installed in agencies. These terminals are
connected through telephone lines, that are destined exclusively for that use, to the central database.
“Passive participation” lotteries are usually distributed through an agency network.
The European Union has not created a legal framework in order to secure monopolistic trends in the
lottery and betting gaming market. The lottery sector constitutes a subject of strict and numerous
settlements on a state level through out the European Union.
9.2. Greek Market of Gaming
The total legal gaming market in Greece amounted to approximately € 5,8 billion in 2004 representing the
3,8% of the G.P.D. of 2003 in current prices, or € 532 per capita.
As in most European countries, The Hellenic Republic still has full control of the domestic sector of lottery
games. The Hellenic Republic issues the STATE LOTTERY and the POPULAR LOTTERY through the State
Lottery Organization, which comprise an additional source of competition. Additionally, the Hellenic
Republic has not yet given its concession operation right of the Instant Lottery (“Scratch Cards”) in
Greece. The above concession right ended in September of 2003.
Mutual bets of domestic horse races are conducted from the state owned company Horseracing Conduct
Organization of Greece S.A. and are supervised by the Hellenic Republic. Fixed odds Greek horse racing
bets and international horse racing bets are for the time being illegal in Greece.
A significant impact in the formation of the lottery gaming sector in Greece during the last decade came
from the introduction of new lottery games from OPAP S.A., and the concession of private casino
operation licenses. After the grant of private casino licenses in 1995, nine casinos operate in Greece, most
of which are private. The total official market of lottery games in Greece, during the five year period 20002004 is presented below:
Income in
thousands €*
OPAP S.A.(1)
STATE OWNED
LOTTERIESSCRATCH CARDS
2000
2001
2002
2003
2004
% change
2000 - 2004
1.420.158
1.766.379
1.934.224
2.230.631
3.067.915
116,03%
472.109
497.814
505.126
462.470
376.895
-20,17%
347.938
349.315
336.359
347.938
328.722
-5,52%
1.509.456
1.639.715
1.825.752
1.509.456
2.061.632
36,58%
4.253.223
4.601.461
4.550.495
5.835.164
55,62%
(2)
HORSERACE
BETTING (2)
CASINOS (2)
SECTOR TOTAL 3.749.661
1) Source: OPAP S.A. Turnover (Sales) in Greece (not including turnover (sales) in Cyprus).
2) Source: National Statistical Service of Greece data. The Casino 2004 data are temporary.
During the above five year period, the volume of the lottery gaming sector increased by approximately
55,62%, from € 3.749 million to € 5.835 million. The sector’s expansion must be mainly attributed, to the
operation of private casinos and to the introduction of PAME STIHIMA and KINO from OPAP S.A.
The Company’s upward course in sales resulted in a higher rate of development during the five year
period of 2000-2004, compared to the other lottery game categories.
Page 69
9.3. Company’s Market Position - Competition
The market shares of the organizations that operate in the domestic lottery game market, based on their
revenues, for the five year period 2000-2004 are presented below:
GAMING MARKET SHARES IN GREECE (in %)
2000
2001
2002
2003
(1)
OPAP S.A.
STATE OWNED LOTTERIESSCRATCH CARDS (2)
HORSERACE BETTING (2)
CASINOS (2)
SECTOR TOTAL
2004
37,87%
41,53%
42,03%
49,02%
52,58%
12,59%
11,70%
10,98%
10,16%
6,46%
9,28%
40,26%
8,21%
38,55%
7,31%
39,68%
7,65%
33,17%
5,63%
35,33%
100,00%
100,00%
100,00%
100,00%
100,00%
1) Source: OPAP S.A. Turnover (Sales) in Greece (not including turnover (sales) in Cyprus).
2) Source: National Statistical Service of Greece data. The Casino 2004 data are temporary.
The Greek gaming market based on the 2004 revenues, is comprised from stated owned lotteries-scratch
cards and sports betting games (59,04%), casinos (35,33%) and horserace betting (5,63%). With the
introduction of the first fixed odds game PAME STIHIMA and KINO, OPAP S.A. significantly increased its
market share from 37,87% in 2000 to 52,58% in 2004, making the Company the biggest gaming company
in Greece today.
The Greek gaming market has developed rapidly during the last years. After 1995, with the Hellenic
Republic issuing operational casino licenses to private companies, OPAP S.A. faced significant competition
from casinos. The casino’s market share decreased from 44,5% in 1998 to 35,33% in 2004.
The Hellenic Republic also supervises the mutual horseracing bet through Horseracing Conduct
Organization of Greece S.A. The domestic fixed odds bets regarding Greek horse racings and bets
regarding international horse racings are not conducted in Greece today.
Page 70
10. COMPANY FINANCIAL DATA OF OPERATIONS 2002-2004
The Company’s first fiscal year-end as a Societe Anonyme started on January 1st, 2000 and ended on
December 31st, 2000. With the certification of the Company’s accounting books in 2000, the Company
adjusted its accounting chart of accounts in order to keep up with the General Hellenic Chart of Accounts.
Also, from January 1st, 2000 the Company’s books of accounts and records are abided by the C.B.R.
whereas during the year end of 2000 the Company received its T.I.N. number: 090027346.
The present chapter analyzes the Company’s financial data of operations as depicted in the Financial
Statements of fiscal year end 2002, 2003 and 2004.
10.1. Operations
OPAP S.A. operates in the gaming sector and its scope of operations has to do with the organization,
operations and conduct of games. During the year end of 2002, 2003 and 2004 the Company games
conducted were the following:
•
•
•
•
•
•
•
•
•
PROPO,
LOTTO,
PROTO,
PROPOGOAL
JOKER
PAME STIHIMA
ΕΧΤRΑ 5
SUPER 3 and
ΚΙΝΟ
During the same period the Company’s total turnover (sales) amounted to € 7.294.895 thousand and is
analyzed below:
OPAP S.A. Turnover (sales), 2002-2004 (€ in thousands)*
(€ in thousands)
Game
PROPO
LOTTO
PROTO
PROPO-GOAL
JOKER
PAME STIHIMA
SUPER 3
EXTRA 5
ΚΙΝΟ
TOTAL
2002
%
change
2003
%
change
2004
66.353
80.417
52.953
2.206
220.637
1.511.410
20.272
13.447
1.967.695
3,9%
5,8%
1,3%
-2,3%
-24,2%
15,0%
9,4%
80.136
64.726
45.957
2.466
207.145
1.647.693
148.028
52.287
10.847
2.259.285
20,8%
-19,5%
-13,2%
11,8%
-6,1%
9,0%
630,2%
288,8%
14,8%
78.608
55.583
43.586
1.664
250.272
1.601.340
116.542
32.752
887.568
3.067.915
% Total 2002change
2004
-1,9%
-14,1%
-5,2%
-32,5%
20,8%
-2,8%
-21,3%
-37,4%
8.082,6%
35,8%
225.097
200.726
142.496
6.336
678.054
4.760.443
284.842
98.486
898.415
7.294.895
Notes: (1) Possible differences in totals are due to number rounding
(2) The introduction of SUPER 3 and EXTRA 5 took place on 25/11/2002 and thus the revenues from these two games
contribute to the total turnover (sales) of year-end 2002 only for the period from 25/11/2002 to 31/12/2002. The
introduction of ΚΙΝΟ took place on 3/11/2003, through a limited number of agencies, and thus the revenues from this
game contribute to the total turnover (sales) of year-end 2003 only for the period from 3/11/2003 to 31/12/2003.
During the three year period of 2002, 2003 and 2004 the Company’s total turnover (sales) increased by
55,9% and more specifically from € 1.967.695 thousand in 2002 to € 3.067.915 thousand in 2004. This
increase is caused mainly due to the KINO game which generated revenues of € 887.568 thousand in 2004
against € 10.847 thousand in 2003 (see note above) and zero amount in 2002. In more detail the
Company’s turnover (sales) evolution per game is described below:
•
During the period of 2002-2004 an increase of the Company’s revenues is depicted regarding
PROPO by 18,5% and more specifically from € 66.353 thousand in 2002 to € 78.608 thousand in
2004. PROPO decreased by 1,9% in 2004 against the fiscal year-end of 2003. The revenues
increase depicted during the two year period of 2003-2004 against 2002 is caused mainly due to
the Company’s strategic decision to subsidize the first winning category through its un-disposed
profits. PROPO is considered as the Company’s fifth most popular game, contributing a
percentage of 2,6% to the total turnover (sales) of fiscal year-end of 2004.
Page 71
•
LOTTO turnover (sales) during the three year period 2002-2004 depicted a decrease of 30,9%
and more specifically from € 80.417 thousand in 2002 to € 55.583 thousand in 2004. The game
was initially introduced in 1990, and as a result, after 14 years, the game is going through a
maturity stage and players have shifted their interest to other numerical lottery games of the
Company. LOTTO is considered as the Company’s sixth most popular game, contributing a
percentage of 1,8% to the total turnover (sales) of fiscal year-end of 2004.
•
PROTO turnover (sales) during the three year period 2002-2004 depicted a decrease of 17,7%
and more specifically from € 52.953 thousand in 2002 to € 43.586 thousand in 2004. The game
was initially introduced in 1992 as an additional game of the LOTTO ticket, and is currently played
with LOTTO, JOKER, PROPO and PROPOGOAL, in addition to the independent PROTO ticket,
resulting in a sales decrease during the three year-end period of 2002-2004. PROTO is
considered as the Company’s seventh most popular game, contributing a percentage of 1,4% to
the total turnover (sales) of fiscal year-end of 2004.
•
PROPOGOAL turnover (sales) during the three year period 2002-2004 depicted a decrease of
24,6% and more specifically from € 2.206 thousand in 2002 to € 1.664 thousand in 2004. The
game was initially introduced in 1996, but the introduction of newer games kept PROPOGOAL as a
peripheral game which on average contributed to the Company’s turnover (sales), during 20022004, a percentage of 0,1% making it the ninth most popular game of the Company.
•
JOKER was the Company’s most popular numerical lottery game until the introduction of KINO.
The game was initially introduced in 1997. In fiscal year-end of 1999, JOKER received the first
place based on the Company’s total turnover (sales) with a substantial difference from the second
best game, but with the introduction of PAME STIHIMA in 2000, JOKER lagged significantly.
JOKER sales during the three year period 2002-2004 increased by 13,4% and more specifically
from € 220.637 thousand in 2002 to € 250.272 thousand in 2004. The fluctuations depicted
during the above three year period reflect the sequence number of jackpots per year. During
fiscal the year-end of 2004, JOKER generated the 8,2% of the Company’s total turnover (sales).
•
PAME STIHIMA began on January 28th, 2000 and was the Company’s first fixed odds game. The
game’s wide effect to the public made it the number one Company game in terms of sales
consecutively from 2000 up to the fiscal year-end of 2004 (2000:69%, 2001:73%, 2002:77%,
2003:73%, 2004: 52%). During the three year period 2002-2004 PAME STIHIMA revenues
increased by a total percentage of approximately 6% and more specifically from € 1.511.410
thousand in 2002 to € 1.601.340 thousand in 2004. During the fiscal year-end of 2004 PAME
STIHIMA revenues decreased by 2,8% against 2003 mainly due to the introduction of ΚΙΝΟ in
addition to the intensified competition resulting from the illegal internet betting. It should be
noted that during the fiscal year-end of 2003, UEFA restructured the Champions League
institution by eliminating the second group stage matches, partially influencing the further
increase of the game’s revenues. During fiscal the year-end of 2004, PAME STIHIMA generated
the 52,2% of the Company’s total turnover (sales).
•
SUPER 3 is a numerical lottery fixed odds game, initially introduced on November 25th, 2002. The
game’s contribution in the Company’s total turnover (sales), during the last month of the fiscal
year-end of 2002, came up to 1%, i.e. € 20.272 thousand. During 2004 the game’s revenues
amounted to € 116.542 thousand against € 148.028 thousand in 2003, i.e. decrease by 21,3%.
This decrease was expected mainly due to the introduction of KINO which has many similarities
with SUPER 3. During fiscal the year-end of 2004, SUPER 3 ranked as the fourth most popular
game generating 3,8% of the Company’s total turnover (sales).
•
EXTRA 5 is a numerical lottery fixed odds game, initially introduced on November 25th, 2002. The
game’s contribution in the Company’s total turnover (sales), during the last month of the fiscal
year-end of 2002, came up to 0,7%, i.e. € 13.447 thousand. During 2004 the game’s revenues
amounted to € 32.752 thousand against € 52.287 thousand in 2003, i.e. decrease by 37,4%. This
decrease was expected mainly due to the introduction of KINO which has many similarities with
EXTRA 5. During fiscal the year-end of 2004, EXTRA 5 ranked as the eighth most popular game
generating 1,1% of the Company’s total turnover (sales).
•
Last, ΚΙΝΟ is a numerical lottery fixed odds game, introduced on 3.11.2003. The new game was
initially introduced in the region of Rethymno and up to the end of 2003 was expanded in the
whole island of Crete in addition to the regions of Magnesia and Larisa. By the beginning of
October 2004 KINO concluded its expansion in the region of Attica with daily five minute draws
Page 72
generating revenues of € 887.568 thousand in fiscal year end 2004. During 2004 KINO ranked as
the second most popular game, contributing 28,9% of the Company’s total turnover (sales).
The game’s full introduction and significant success had repercussions, as expected, to the
remaining Company’s games and especially with SUPER 3 and EXTRA 5 which have similar
characteristics and to a lesser extend with PAME STIHIMA and the other games.
The participation, percentage wise, of the above mentioned games to the Company’s total turnover (sales)
is analyzed below:
Company Turnover (sales) Percentage Point Allocation, 2002-2004
STAKE IN TURNOVER
(SALES)
Game
PROPO
LOTTO
PROTO
PROPO-GOAL
JOKER
PAME STIHIMA
SUPER 3
EXTRA 5
ΚΙΝΟ
TOTAL
2002
2003
2004
2002-2004
3,4%
4,1%
2,7%
0,1%
11,2%
76,8%
1,0%
0,7%
100,0%
3,5%
2,9%
2,0%
0,1%
9,2%
72,9%
6,6%
2,3%
0,5%
100,0%
2,6%
1,8%
1,4%
0,1%
8,2%
52,2%
3,8%
1,1%
28,9%
100,0%
3,1%
2,8%
2,0%
0,1%
9,3%
65,3%
3,9%
1,4%
12,3%
100,0%
Note: (1) The introduction of SUPER 3 and EXTRA 5 took place on 25/11/2002 and thus the revenues from these two
games contribute to the total turnover (sales) of year-end 2002 only for the period from 25/11/2002 to 31/12/2002.
The introduction of ΚΙΝΟ took place on 3/11/2003, through a limited number of agencies, and thus the revenues from
this game contribute to the total turnover (sales) of year-end 2003 only for the period from 3/11/2003 to 31/12/2003.
As depicted above during the three year period 2002-2004, the most significant Company games with a
percentage point contribution of more than 10%, is PAME STIHIMA and ΚΙΝΟ.
Page 73
10.2. Development of Results- Profit & Loss Accounts
The development of the Company’s profit and loss accounts for the fiscal year-end 2002, 2003 and 2004
are presented below:
€ in thousands*
Turnover (Sales)
Less: Cost of Sales (1)
Payments to gaming winners
Gross Profit (before depreciation)
2002
1.967.695
(378.021)
(1.123.114)
466.560
2003
2.259.285
(420.521)
(1.342.871)
495.893
2004
3.067.915
(480.127)
(1.931.611)
656.177
Plus: Other Operating Results
Total
Less: Administrative Expenses (1)(2)
Selling Expenses (1)
Total Expenses
3.567
470.127
(21.718)
(40.888)
(62.606)
46.405
542.298
(20.653)
(47.161)
(67.814)
76.550
732.727
(24.449)
(61.737)
(86.186)
Operating Result (before depreciation)
407.521
474.484
646.541
Plus:
(% on turnover)
(% on turnover)
(% on turnover)
23,7%
3,2%
20,7%
21,9%
3,0%
21,0%
21,4%
2,8%
21,1%
Extraordinary & Non Operating Income
Extraordinary Profits
Prior Year’s Income
Prior Year’s Income from provisions
Less: Extraordinary & Non Operating Expenses
Extraordinary Losses
Prior Year’s Expenses
Provisions for extraordinary risks
Less: Provisions for devaluation of investments &
securities
Profits before Interest, Depreciation & Tax
56
0
501
7.218
(505)
0
(11.723)
(65.481)
11
0
531
635
(2.060)
0
(4.755)
(43.914)
435
19
342
111.478
(677)
0
(1.249)
0
0
337.587
(23.739)
401.194
(875)
756.014
Plus: Credit Interest & Similar Income
Less: Debit Interest & Similar Charges
Profits before Depreciation & Tax
12.273
(6.758)
343.103
7.929
(4.186)
404.937
9.102
(2.525)
762.591
Less: Depreciation (Total)
Profits before Tax
(24.509)
318.593
(23.569)
381.366
(26.132)
736.459
0
0
0
(117.337)
0
(146.364)
0
(263.236)
0
201.256
235.002
473.223
10,2%
10,4%
15,4%
199.552
234.471
473.223
(% on turnover)
(% on turnover)
(% on turnover)
Less: Other Gaming Payouts non Incorporated to the
Operating Cost
Less: Income Tax and Other Taxes
Less: Board of Directors Fees(2)
Profits after Tax, B.D. Fees & Other Gaming
Payouts non Incorporated to the Operating Cost
(2)
(% on turnover)
Less: Taxes from year-end Tax Audit (3)
Profits after Tax, B.D. Fees & Other Gaming
Payouts non Incorporated to the Operating Cost &
Taxes from year-end Tax Audit (2)(3)
(% on turnover)
17,2%
17,4%
16,2%
(1.704)
10,1%
17,8%
17,9%
16,9%
24,6%
24,9%
24,0%
(531)
10,4%
0
15,4%
(1) Before Depreciation incorporated to the Cost of sales, Administrative Expenses and Selling Expenses respectively.
(2) The Board of Director Fees are incorporated in the Administrative Expenses since they are considered as extra emolument
expenses.
(3) The prior year’s tax audit results are depicted within the assessed year-end.
Page 74
Turnover (Sales) – Gross Profit Margin
During the three fiscal year-end period 2002-2004 the Company’s total turnover (sales) increased by
55,9%, specifically from € 1.967.695 thousand in 2002 to € 3.067.915 thousand in 2004. The above
mentioned increase took place mainly due to the increase, in absolute numbers, and successful track of
KINO which yielded € 887.568 thousand in 2004.
The cost of sales before depreciation, following in general terms the turnover (sales) increase, increased
by 27% in 2004 against 2002 and amounted to € 480.127 thousand against € 378.021 thousand
respectively.
The account “Payments to gaming winners” includes the cost of payments to gaming winners, resulting
from the game conduct legislation in effect.
The percentage revenue, paid off by the Company to the winners, during the last three years came up to
63% in 2004 against 57,1% in 2002. The percentage revenue increase paid off to winners during the
above mentioned period is mainly due to the increase of payouts to the PAME STIHIMA game winners
during the two year period of 2003-2004, in addition to the introduction of KINO game which pays out the
biggest percentage to winners from all the other remaining games. The lowest gross profit margin of KINO
has been fully set-off from its significant contribution to the total turnover (sales) of the Company for fiscal
year-end 2004.
Pay offs to game winners on net revenues*(1)
2002
PROPO
LOTTO
PROTO
PROPOGOAL
JOKER
PAME STIHIMA
ΕΧΤRA 5
SUPER 3
ΚΙΝΟ
TOTAL
2003
2004
Amount in €
thousands
% on net
income of
(1)
game
Amount in €
thousands
% on net
income of
(1)
game
Amount in €
thousands
% % on net
income of
(1)
game
28.149
31.845
27.959
874
110.318
904.460
8.820
10.688
48,1%
45,0%
60,0%
45,0%
56,8%
65,1%
74,5%
57,3%
32.901
25.631
24.266
977
103.572
1.031.174
27.168
89.581
46,7%
45,0%
60,0%
45,0%
56,8%
68%
59%
65,8%
32.263
22.011
23.014
659
125.136
1.026.779
17.842
68.831
46,6%
45,0%
60,0%
45,0%
56,8%
69,7%
61,9%
64,4%
-
-
7.601
75,3%
615.077
74,5%
1.123.114
62,6%
1.342.871
65,2%
1.931.611
68,7%
(1) Net revenues refer to receipts after agency commissions
The cost of sales before depreciation, and including the pay offs to gaming winners came up to 78,6% of
the total turnover (sales) for the fiscal year-end 2004 against 78,1% in 2003 and 76,3% in 2002, resulting
in a gross profit margin before depreciation of 21,4% in 2004, 21,9% in 2003 and 23,7% in 2002
respectively. The gross profit margin reduction during the two year period of 2003 and 2004 against 2002
by 2,3% is mainly caused due to the increased appropriation profit percentage of pay offs to gaming
winners against the Company’s turnover (sales). Specifically from 57,08% in 2002 the above mentioned
percentage increased to 59,4% in 2003 and 63% in 2004.
Page 75
In fiscal year-end of 2004, the Company’s cost of sales (before depreciation) is analyzed below:
Cost of Sales Category – Year-end 2004 (€ in thousands)*
Agency Commission
PAME STIHIMA Lead Manager Commission
Third party distributions: Football Societe Anonyme Association
Third party distributions: Hellenic Football Federation
Personnel Fees and Expenses
C.I.S. Cost
Machinery and technical installations maintenance cost
Material Consumption
Other fees and expenses of third parties
Other third party grants
Provisions for personnel indemnities
Other Expenses
Provisions for doubtful receivables & debtors
Cost Of Sales before Depreciation
Depreciation
TOTAL
Amount
255.056
163.038
5.239
1.060
14.290
7.478
6.554
2.867
10.311
5.572
1.593
1.836
5.233
480.127
24.503
504.630
The agency commission is considered as the most significant cost to the Company, amounting to €
255.056 thousand in 2004 against € 198.743 thousand in 2003 and € 174.856 thousand in 2002. During
the fiscal year-end of 2004 the agency commission came up to 53,1% of the Company’s total cost of sales
before depreciation. The agency commission of the Company’s net gaming revenues amounts to 12%,
except from the net revenues commission of PAME STIHIMA and SUPER 3, which amount to 8% and KΙΝΟ
to 7%.
Due to the significant contribution of PAME STIHIMA to the Company’s total turnover (sales)
(2004:52,2%), its organization, support and conduct cost (in which promotion and advertising expenses
are included) came up to 34% of the Company’s cost of sales before depreciation for the fiscal year-end of
2004, i.e. € 163.038 thousand, against 39,9% in 2003, i.e. € 167.688 thousand and 40,7% in 2002, i.e. €
154.018 thousand.
Pay offs to the Football Societe Anonyme Association amounted to € 5.239 thousand in 2004 against €
5.909 thousand in 2003. Up to 25.10.2002 pay offs to the Football Societe Anonyme Association amounted
to 8% upon the Company’s revenues from PROPO and PROPOGOAL after the subtraction of the agents
commission. From 26.10.2002 based upon the legislative regulation (L.3057/2002) the above percentage
amounted to 10,5%, whereas an enactment subsidy percentage of 1,5% was also given to the H.F.F.
upon the Company’s revenues from PROPO and PROPOGOAL after the subtraction of the agents
commission.
According to the information mentioned above the Company’s gross profit before depreciation amounted
to € 656.177 thousand in 2004 against € 495.893 thousand in 2003 and € 466.560 thousand in 2002. As a
percentage margin to the Company’s turnover (Sales) the gross profit before depreciation fluctuated from
23,7% in 2002 to 21,4% in 2004.
The Company’s other operating results for fiscal year-end 2004 are presented below:
Operating income from operations in Cyprus
Other subsequent operating income
Inventory and scrap sale
TOTAL
Amounts in thousand
€*
9.774
66.682
94
76.550
The other subsequent operating income mainly includes revenues, amounting to € 65.975 thousand,
relating to the claim difference resulting from the Company’s contractual liability to pay 60% of the
Page 76
revenues to the gaming winners of PAME STIHIMA with the percentage of 64,12% that resulted from the
profit sorting up to 31.12.2004. Income amounting to € 707 thousand refers to rentals from buildings that
the Company leases to third parties.
The amount of € 9.774 thousand of the account “Operating income from operations in Cyprus” refers to
the 10% commission from the Company’s subsidiary OPAP CYPRUS LTD turnover (sales) for the period
1.1.2004-31.12.2004 as a fee to OPAP S.A. according to the existing Interstate Agreement.
Administrative & Selling Expenses
The Company’s expenditure allocated to the Administrative Expenses (before depreciation) in 2004 are
presented below:
Expenditures by item (fiscal year-end 2004)*
Third party Fees and Expenses
Third party grants
Taxes – Duties
Other expenses
Provisions for personnel indemnities
Total before Depreciation
Depreciation
Administration Expenses
Amount (€ in
thousands)
11.995
4.655
2.925
63
3.556
1.254
24.449
1.494
25.943
Percentage
46,2%
17,9%
11,3%
0,2%
13,7%
4,8%
94,2%
5,8%
100,0%
The administrative expenses before depreciation during the fiscal year-end of 2004 amounted to € 24.449
thousand against € 20.653 thousand in 2003 and € 21.718 thousand in 2002. This timeless improvement,
and specifically from 1,1% of the Company’s turnover (sales) in 2002 to 0,91% in 2003 and 0,8% in 2004,
was mainly due to the significant turnover (sales) increase, where as the reduced provision for personnel
indemnities also played an important role. The provision for personnel indemnities amounted to € 1.254
thousand in 2004 against € 2.071 thousand in 2003 and € 3.107 thousand in 2002.
The Company’s expenditure allocated to the Selling Expenses (before depreciation) in 2004 are presented
below:
Expenditures by item (fiscal year-end 2004)*
Third party Fees and Expenses
Third party grants
Taxes – Duties
Other expenses
Provisions fro personnel indemnities
Total before Depreciation
Depreciation
Selling Expenses
Amount
(€ in thousand)
1.672
10.185
696
3
49.007
174
61.737
135
61.872
Percentage
2,7%
16,5%
1,1%
0,0%
79,2%
0,3%
99,8%
0,2%
100,0%
The selling expenses before depreciation showed a significant increase of 51% during the three year
period of 2002-2004 and more specifically from € 40.888 thousand in 2002 to € 61.737 thousand in 2004.
This increase was the result of the Company’s promotion and advertising expenditure increase of the new
games EXTRA 5 and SUPER 3 in addition to the Company’s sponsorships. More specifically, during the
fiscal year-end of 2004 and against 2002 the sponsorship expenditures increased by 136,7% (from €
10.324 thousand in 2002 to € 24.437 thousand in 2004) and a reduction of 18,9% in the Company’s
advertising expenditures (from € 28.234 thousand in 2002 to € 22.889 thousand in 2004).
The other selling expenses of the amount of € 49.007 thousand mainly refer to the Company’s advertising
expenditure, i.e. € 47.326 thousand, including sponsorships, which constitutes a significant parameter of
Page 77
the Company’s operational activity. Respectively the above expenditure for fiscal year-end of 2002
amounted to € 38.558 thousand.
As a percentage of the Company’s total turnover (sales) the selling expenses before depreciation were
stable around 2% and specifically from 2,08% in 2002 to 2,09% in 2003 and 2,01% in 2004.
Provisions for devaluation of investments & securities
For the valuation of the Company’s investments at 31.12.2004, as expected from article 43 of the C.L.
2190/1920, a readjustment of the realized under value took place of fiscal year-end 2003 from € 23.739
thousand to € 24.614 thousand and thus burdening the fiscal year-end results of 2004 by € 875 thousand.
Credit Interest
The table below presents the total credit interest and similar income at 31.12.2004:
Credit Interest & similar income
Interest income from bank deposits
Credit interest from account in Cyprus
Interest income from personnel loans
Other credit interest
Total
Amount in €
thousands*
8.475
260
84
284
9.102
Credit interest and similar income in fiscal year-end 2004 amounted to € 9.102 thousand against € 7.929
thousand in 2003 and € 12.273 thousand in 2002. The credit interest reduction depicted in fiscal year-end
2003 against 2002 was mainly caused due to the reduction in interest rates and in the reduction of the
average exploited capital. The credit interest increase during fiscal year-end of 2004 against 2003 resulted
mainly due to the increased, by average, Company’s bank deposits.
Extraordinary & Non Operating Income & Expenses
The Company’s extraordinary results are analyzed below:
Extraordinary Results (year-end 2004)*
Amount (€ in
thousands)
Α. Extraordinary Income
Prior year's income from provisions
Prior year’s income
Extraordinary profits
Extraordinary and non operating income
Total Extraordinary Income
Β. Extraordinary Expenses
Extraordinary and non operating expenses
Prior year’s expenses
Total Extraordinary Expenses
Extraordinary Results (Α – Β)
111.478
342
19
435
112.275
677
1.250
1.927
110.348
The amount of € 111.478 thousand of the account “Prior year's income from provisions” of fiscal year-end
of 2004 is analyzed below:
Prior Year’s Income from Provisions (€ in thousands)*
Income from prior year’s utilized provisions
Income from bad debt provisions
Income from unutilized provisions for prior year’s expenses
Total
31.12.2004
1.585
499
109.394
111.478
The most significant account included in the prior year’s income from provisions amounting to €
109.394.404,92, refers to the reversion of the unutilized cumulative provision that was in effect for the
liability coverage that resulted after the decision taken by the Three-member Arbitration Court on the
21/01/03 in regard to the recourse-petition capital deposit of the consequential damage, that the lead
Page 78
manager faced from the non commencement of the Horse-Greyhound racing Betting in addition to the
relevant default interest up to and 31/12/03. But, after the deposition of the abrogation action by OPAP
S.A. against the above Arbitration Decision by the Three-member Athens Court towards the Appeal Court,
decision 953/2004 was issued, which in turn voided in total the arbitrative decision No. 2/2003 and thus
there’s no sustained liability from the company’s side to pay any amount whatsoever to the above
mentioned company (see chapter 3 section “Most significant cases against OPAP S.A.”).
The amount of € 342 thousand of the account “Prior year’s income” of fiscal year-end 2004 is analyzed
below:
Prior Year’s Income (€ in thousands)*
31.12.2004
Income from sponsorship provisions
184
Other prior year’s income
158
Total
342
The amount of € 19 thousand of the account “Extraordinary profits” of fiscal year-end 2004 is analyzed
below:
Extraordinary Profits (€ in thousands)*
Profits from transportation vehicles sales
Profits from furniture and fixtures sales
31.12.2004
10
9
19
Total
The amount of € 435 thousand of the account “Extraordinary and non operating income” of fiscal year-end
2004 is analyzed below:
Extraordinary & non operating income (€ in thousands)*
Forfeiture of guarantees-penalty clauses
Foreign exchange differences
Other extraordinary & non operating income
31.12.2004
10
406
19
Total
435
The amount of € 677 thousand of the account “Extraordinary and non operating expenses” of fiscal yearend 2004 is analyzed below:
Extraordinary & non operating expenses (€ in thousands)*
Tax fines and social security increments
Foreign exchange differences
Other extraordinary & non operating expenses
Arbitration Decision related expenses
Total
31.12.2004
11
101
55
510
677
It should be noted that in the account “Extraordinary and non operating expenses” of fiscal year-end 2003
the amount of € 23.738.726,40 is included, which refers to the provision for devaluation of investments
formed by the Company. The Company, during the fiscal year-end of 2004 readjusted the respective
accounts of the previous year-end of 2003 - as depicted in the table below – in order for the accounts to
be similar and comparable with the respective accounts of fiscal year-end 2004.
(€ in thousands)*
Provisions for devaluation of investments and
securities
Extraordinary & non operating expenses
2003
2003
(previous publication)
23.739
0,00
2.060
25.798
Page 79
The amount of € 1.250 thousand of the account “Prior year’s expenses” of fiscal year-end 2004 is
analyzed below:
Prior Year’s Expenses (€ in thousands)*
31.12.2004
Tax fines and social security increments
34
Personnel fees and expenses
273
Sponsorships – Donations – Football field construction researchers fees
727
Other telecommunication expenses
216
Total
1.250
Depreciation
The depreciation allocation to the operating expenses for the three year-end period 2002-2004 is
presented below:
Depreciation Analysis (€ in thousands)*
Total Depreciation
2002
22.646
1.641
222
24.509
2003
22.517
891
161
23.569
2004
24.503
1.494
135
26.132
Depreciation of all assets in fiscal year-end 2004 has been calculated based on the ordinances of P.D.
229/03.
During the three year-end period of 2002, 2003 and 2004 the most significant portion of the Company’s
depreciation refers to the partial (1/20) depreciation, by € 16.141 thousand, of the acquisition value of the
exclusive gaming conduct rights, amounting to a total of € 322.817 thousand.
Profits before Tax
The Company profits before tax, during the three year-end period of 2002, 2003 and 2004, increased in
absolute numbers by approximately 131,16% and more specifically amounted to € 736.459 thousand in
2004 against € 381.366 thousand in 2003 and € 318.593 thousand in 2002. This significant increase was
mainly due to the general improvement of the majority of the Company’s profit and loss accounts taking
into consideration the turnover (sales) increase by 55,9% respectively, the increase of other operating
results, the marginal improvement of the administrative and selling expenses before depreciation in
addition to the improvement of the extraordinary and financial results. The profit before tax margin was
also improved from 16,2% and 16,9% in 2002 and 2003 respectively to 24% in 2004.
10.3. Financial Expenses
The Company’s financial expenses during the three year-end period 2002-2004 is presented below:
FINANCIAL EXPENSES (€ in thousands)*
Long-Term Loan interest
Other bank expenses
Total
2002
6.709
49
6.758
2003
4.141
45
4.186
2004
2.502
23
2.525
The Company’s long-term loan interest results from the long-term bank loans taken on behalf of the
General Secretariat of Athletics and the Ministry of Culture.
Until the partial offsetting of the concession price value of the exclusive gaming conduct rights from the
Hellenic Republic, amounting to € 322.817 thousand, with the receivables from state organizations
regarding the long-term bank loans that the Company has signed on their behalf, there were no final
charges to the Company’s results from the proportional debit interests, since there was an equivalent
credit balance of the Company’s income with credit interests, claimable fro the above mentioned state
organizations.
After the above mentioned offsetting, which was based upon the financial statements of September 30th,
2000, OPAP S.A. has taken in full the debt service of the long-term bank loans taken on behalf of third
parties, and thus charging the Company’s results with the occasional debit interests.
Page 80
With the existing bank loans being properly paid off, and due to the fact that the outstanding is
diminishing, the financial expenses of the Company have shown a significant decrease of approximately
62,6% during the three year-end period of 2002-2004 and specifically from € 6.758 thousand in 2002 to €
2.525 thousand in 2004.
10.4. Appropriation of Profits before Depreciation
The Company’s profits before depreciation were appropriated during the three year-end period of 20022004 as follows:
APPROPRIATION OF PROFITS BEFORE DEPRECIATION (€ in thousands)*
YEAR-END
20022002
2003
2004 2002-2004
2004 (%)
343.103 404.937 762.591
1.510.631
100,0%
PROFIT FOR APPROPRIATION
343.103 404.937 762.591 1.510.631 100,0%
Depreciation
24.509
23.569
26.132
74.210
4,9%
Tax
117.337 146.364 263.236
526.937
34,9%
Prior year's tax audit differences
1.704
531
0
2.235
0,1%
Board of Directors Fees
0
0
0
0
0,0%
10.299
8.747
0
19.046
1,3%
Extraordinary and Tax-Free Reserves
0
0
0
0
0,0%
Dividends
213.730 232.870 472.120
918.720
60,8%
Profits Carried Forward(1)
(24.477) (7.144)
1.103
-30.518
-2,0%
Total
343.103 404.937 762.591 1.510.631 100,0%
1. For the fiscal year-end of 2002 and 2003 the profits carried forward are presented with a negative sign, since in
2003 an appropriation of profits from the Prior Year’s Profits Carried forward took place and in 2002 an appropriation of
an extraordinary reserve formed in 2001 took place.
During the three year-end period of 2002, 2003 and 2004, 60,8% of the total profits for appropriation
regarded the distribution of dividends, 34,9% in taxes and 4,9% in depreciation. The remaining amount
refers mainly to the reserves (extraordinary, tax-free and statutory legal reserves) in addition to the prior
year’s tax audit differences and profits carried forward.
Page 81
10.5. Balance Sheet Analysis
The table below depicts the development of the Company’s balance sheet for the period 2002-2004:
BALANCE SHEET (€ in thousands)*
ASSETS
Formation Expenses
Less: Accrued Depreciation
Intangible Assets
Tangible Assets
Net Tangible Assets
Investments in affiliates and other companies
Less: Provisions for devaluation
Other long-term receivables
Total Fixed Assets
Inventories
Trade-Bills & Cheques receivables
Long-term receivables for next fiscal year-end
Doubtful Receivables & Debtors
Sundry Debtors
Advances & credit accounts
Securities
Cash and Banks
Total Current Assets
Transitory Accounts
GRAND TOTAL ASSETS
LIABILITIES
Share Capital
Revaluation reserves
Investment grants
Reserves
Retained earnings
Provisions
Long-Term Liabilities
Bank Loan Long-term Liabilities
Other Long-term Liabilities
Total Long-Term Liabilities
Short-term Liabilities
Suppliers (Trade Creditors)
Banks
Trade Advances
Taxes-Duties
Social Security
Long-term liabilities payable next fiscal year-end
Dividends payable
Sundry Creditors
Total Short-Term Liabilities
Total Liabilities
Transitory Accounts
2002
9.125
(6.604)
2.521
322.817
(48.423)
274.395
37.891
(20.539)
17.353
0
0
8.625
300.372
791
31
465
4.610
74.847
18.116
0
359.121
457.980
12.690
773.563
180.407
2002
95.700
0
0
34.313
7.228
137.240
87.488
2003
11.009
(7.890)
3.120
322.817
(64.563)
258.254
51.197
(26.159)
25.038
27.704
(23.739)
9.341
296.598
777
7
170
3.730
94.626
23.196
0
286.005
408.513
54.366
762.596
144.450
2003
95.700
0
0
43.060
82
138.841
134.002
2004
12.848
(9.559)
3.289
322.817
(80.704)
242.113
74.032
(34.451)
39.581
52.877
(24.614)
10.018
319.974
918
0
669
3.856
156.924
19.282
0
383.553
565.203
82.250
970.717
31.401
2004
95.700
0
40
43.060
1.185
139.984
26.044
83.681
4.989
88.670
46.920
5.010
51.930
25.345
5.164
30.509
32.029
0
0
112.201
649
39.036
213.828
61.806
459.549
548.219
615
773.563
180.407
33.417
0
0
165.844
712
36.762
139.726
59.882
436.342
488.272
1.481
762.596
144.450
41.970
0
0
335.443
1.014
21.575
297.819
72.129
769.950
800.460
4.229
970.717
31.401
Page 82
Formation Expenses
The net book value of the Company’s formation expenses amounting to € 3.289 thousand at 31/12/2004
is analyzed below:
Formation Expenses Analysis
A’ Formation and Start up (Foundation) Expenses
Computer Information System Programm Software
Web site construction expenses
Technical installation study expenses
R & D expenses
Share Capital increase expenses
Multiple year depreciation expenses
Asset acquisition expenses
Total Formation Expenses
(Less) Depreciation
Net Book Value of Formation Expenses
(€ in thousands)*
305
7.681
147
321
57
2
3.735
600
12.848
(9.559)
3.289
The Company’s practice has always been to depreciate, the formation and multiple year depreciation
expenses partially and equivalently in five years (20%) and the software programs with a 30% coefficient. Additions during fiscal year-end 2004 amounted to € 1.839 thousand and mainly referred to the
account Computer System Information Program Software amounting to € 989 thousand. This account
refers to the acquisition of a software for the new KINO game in addition to a software for the
computerized center, programs of financial-administrative applications and other mechanical equipment.
The remaining additions of fiscal year-end of 2004, amounting to € 600 thousand, refer to various
acquisition expenses for the purchasing of buildings (conveyance taxes and notary fees of the regional
centers) and the amount of € 250 thousand which refers to a third party software license right.
Intangible Assets
The net book value of the Company’s intangible assets, amounting to € 242.113 thousand, at 31.12.2004
is analyzed below:
Concessions and Royalties of Industrial Ownership 31.12.2004 (€ in thousands)*
Royalties acquisition cost regarding the games conduct from the Ministry of Finance
322.817
Less: Previous year-end depreciation
(64.563)
Less: Depreciation fiscal year-end 2004
(16.141)
Net book value 31.12.2004
242.113
The above mentioned amount refers to the net book price value of the exclusive gaming conduct rights
from the Hellenic Republic, amounting to a total of € 322.817 thousand. The rights concession was signed
between the Company and the Hellenic Republic on December 15th, 2000. The rights duration lasts for
twenty years and ends on October 12th, 2020.
The usage of the lottery gaming rights are depreciated on an equivalent yearly 5% depreciation according
to the C.L. 2190/1920, within the time limit of their productive usage which is for 20 years.
Tangible Assets
The total tangible assets at 31.12.2004 amounted to € 74.032 thousand (acquisition cost) against €
51.197 thousand in 2003 and € 37.891 thousand in 2002, resulting in a cumulative respective increase of
95,4%. The Company’s tangible assets net book value for the fiscal year-end 2004 amounted to € 39.581
thousand against € 25.038 thousand in 2003 and € 17.353 thousand in 2002. The increase by € 14.543
thousand in 2004 against the fiscal year-end of 2003 is caused mainly due to the increase of the accounts
“land”, “buildings and technical works” whose net book value increased by € 10.726 thousand, the
“Machinery - Technical Installations & other mechanical equipment” account by the amount of € 2.312
thousand, the “furniture and fixtures” and “transportation equipment” accounts by the amount of € 1.219
thousand and the “Fixed Assets under Construction & Advances” account by the amount of € 285
thousand.
Page 83
During the current fiscal year-end the value of assets was readjusted according to L. 2065/1992. From the
readjustment a credit difference resulted, which increased the acquisition cost of the assets. This
difference was subject to taxation with 8% and transferred to the account “Revaluation Reserves” of the
total equity increasing thereby the net worth of the Company.
The assets where valuated at their acquisition cost or cost of construction or their adjusted value,
according to the provisions of articles 20 to 27 of Law 2065/1992 and the clarified circular of the Ministry
of Economics and Finance (1127/6.12.2004), augmented with the value of additions and betterments and
reduced with the expected, by law, depreciation. Depreciation of year-end 2004 where calculated
according to the conducts of P.D. 299/2003.
Investments & other Long-Term Financial Receivables
During the fiscal year-end of 2003, OPAP S.A., with the objective to develop its presence in the fixed odd
betting sector in Cyprus and strengthen its already established position in that country, acquired 90% of
OPAP Glory Ltd and 20% of Glory Technology Ltd, and further on established OPAP (CYPRUS) Ltd. During
fiscal year-end 2004 the Company established two more new companies under the company name OPAP
SERVICES S.A. and OPAP INTERNATIONAL LTD (see chapter ‘Associated Companies”).
Based on the above the account “Investments & other Long-Term Financial Receivables” during fiscal
year-end 2003 presents for the first time the account “investments in affiliates” amounting to € 17.704
thousand and the account “investments in other companies” amounting to € 10.000 thousand. During the
fiscal year-end of 2004 the above accounts amounted to € 42.877 thousand and € 10.000 thousand
respectively.
The table below analyzes the Company’s investments at 31.12.2004:
ANALYSIS OF “INVESTMENTS IN AFFILIATES AND OTHER COMPANIES” ACCOUNT
AT 31.12.2004 (€ in thousands)*
COMPANY
NET BOOK
VALUE
OPAP S.A.
% OF OPAP
OPAP S.A.
INVESTMENT
INVESTMENT
S.A.
INVESTMENT
(PARTICIPATION)
(PARTICIPATI
INVESTMENT (PARTICIPATION)
VALUATION PAR.
ON)
(PARTICIPATI BOOK VALUE AT
6 ARTICLE 43 L.
ON)
31.12.2004
ACQUISITION
2190/1920
VALUATION
DIFFERENCE AT
31.12.2004
COST
OPAP (CYPRUS) Ltd.
4.809
100%
4.809
1.704
1.704
0
OPAP Glory Ltd
1.619
90%
1.457
16.000
1.457
(14.543)
Glory Technology Ltd
1.688
20%
338
10.000
338
(9.662)
OPAP
INTERNATIONAL LTD
4.763
100%
4.763
5.172
4.763
(409)
OPAP SERVICES S.A.
27.399
100%
27.399
20.000
20.000
0
Total
40.278
52.876
28.262
24.614
38.766
Investments (participations) to other than S.A. companies are valuated at their lowest value between the
acquisition and current value. For the current value, the internal book value was taken into account,
resulting from the last legally compiled and audited balance sheet.
Investments (participations) to domestic S.A. companies, not listed in the S.E. are valuated at their lowest
value between the acquisition and current value. For the current value, the internal book value was taken
into account, resulting from the last compiled balance sheet dated December 31st 2004.
The remaining amount of the Company’s long-term receivables amounting to € 10.018 thousand at
31/12/2004 is analyzed below:
Other Long-Term Receivables Analysis
(€ in thousands)*
Page 84
Warranty Deposits
Prepayments for retirement benefits according to Article 32 of the Collective
Union Contract
Housing Loans to OPAP S.A. Personnel
Total
825
6.099
3.094
10.018
These amounts are paid to employees in accordance with the parent Company’s collective bargaining
agreement. Since December 31, 2000 these amounts are paid to employees who have completed 17.5
years of service (prior to December 31, 2000 the requirement was 25 years of service). The amount given
is the total retirement compensation for the service rendered to that date (until December 31, 2000 the
amount given was 50% of total retirement compensation for the service rendered). Prepaid amounts are
deducted from the lump-sum retirement benefit payable to the employee upon termination. Interest on
prepaid amounts accrued at the rate of 2% in 2004 and 2003.
Employees who have completed 17,5 years of real service irrespective of their additional service time in
the Company, have the right to receive, at interest (2% yearly), a prepayment equivalent to the half of
the total entitled retirement calculated at the prepayment date, after the completion of the 35year period
minus the tax that is in effect at the date of the prepayment deposit. Prepaid amounts are set-off at the
employee’s retirement year based on the final settlement.
The lease payments of the 25 year duration mortgaged employee housing loans are paid through the
personnel’s monthly salary.
It should be noted that for a housing loan to be granted the applicant must meet certain conditions,
precisely defined by the housing loan regulation. Between the creditor (lender) and the borrower a
relevant contract is signed. The loan’s payment is done through 300 lease rentals (25 years) with an initial
two year grace period. All house loans are mortgaged.
In the case that an employee is pensioned the amount is retained from the indemnity that he or she will
receive at the time of his departure from the Company, and in the case of death the amount is retained
from the house’s beneficiaries. In this particular case there is a delay in the payment of the amortized
lease rentals until the inheritor is finalized and the debt is recognized. The initial amount of each housing
loan depends upon the purpose of the lease (new residence, construction of a new building, residence
repair).
Inventories
The Company’s inventories amounted to € 918 thousand at 31.12.2004, and are analyzed in the table
below:
Inventory Analysis
Raw & auxiliary materials - Consumables - Spare parts & packing materials
Advances for the purchase of inventories
Total
(€ in thousands)*
482
436
918
Purchased inventories were valuated at their lowest value between the acquisition and year-end current
market and net liquidity value.
Remnants and by-products were valuated at their probable selling value, decreased by the estimated
immediate selling costs.
For the acquisition cost of all purchased inventories the last purchase price was taken into account, which
does not significantly differ from the yearly average acquisition value. For the raw materials, the average
production cost value was taken into account.
The Company’s basic inventory is the paper (lottery ticket) and the amount was determined through the
conduct of a physical inventory census on December 31st, 2004.
Receivables
The Company’s receivables amounted to € 180.731 thousand in 2004 against € 121.730 thousand in 2003
and € 98.068 thousand in 2002 presenting an increase of 84,3%. This increase is caused mainly due to
the account “sundry debtors”. Receivables of fiscal year-end 2004 are analyzed in the table below:
Page 85
Receivables Analysis
Trade Receivables
Long-Term Receivables payable in the next Fiscal Year-End
Less: Bad Debt Provisions
Sundry Debtors
Advances & Credit Accounts
Total
(€ in thousands)*
0
669
14.735
(10.879)
156.924
19.282
180.731
The Long-Term Receivables payable in the next Fiscal Year-End refer mainly to housing loans and prepaid
indemnities to the Company’s personnel.
The Doubtful Receivables and Debtors, amounting to € 14.735 thousand at 31/12/2004 against € 9.875
thousand in 2003 and € 8.207 thousand in 2002, refer to delayed agent debts of the Company. The agent
debt outstanding refers mainly to doubtful receivables that resulted from the conduct of PAME STIHIMA.
Within fiscal year-end 2004, the Company received doubtful receivables from agents amounting to € 1.107
thousand, where as additional doubtful receivables were created amounting to € 5.967 thousand.
The account doubtful receivables and debtors depict the total receivables from agents which are
considered as doubtful to collect. At the end of the fiscal year-end an analytical report is formulated which
states the agents that have delayed debts towards the organization which is then approved by the
Company’s Board of Directors and the outstanding is transferred to the respective account.
The Company, with the objective to minimize the possible delinquencies, obligates the agents with net
revenues, meaning revenues after the pay offs to gaming winners, of an accounting period (every week
has two accounting periods), that exceed the amount of € 29 thousand, to deposit for the excess amount,
an equivalent letter of guarantee or cash. Also, doubtful agent receivables can be set off with liabilities
arising from guarantees, guarantee interests in addition to agent fines (see below “Long-Term Liabilities”).
The account “provisions” amounting to € 10.879 thousand which is subtracted from the account “ Doubtful
Receivables and Debtors”, increased by 77% against the respective provisions of fiscal year-end 2003 and
by 202% against the fiscal year-end of 2002.
The table below depicts the activity of the doubtful agents account and its outstanding development within
fiscal year-end of 2004:
DEBT
ADDITIONAL BAD
OUTSTANDING
SETTLEMENTS IN OUTSTANDING
DEBTS IN FISCAL
DESCRIPTION (€ in thousands)*
31.12.2003
FISCAL YEAR31.12.2004
YEAR-END 2004
END 2004
1994 RESIGNED AGENT
1995 RESIGNED AGENT
1996 RESIGNED AGENT
1997 RESIGNED AGENT
1998 RESIGNED AGENT
1999 RESIGNED AGENT
2000 RESIGNED AGENT
2001 RESIGNED AGENT
2002 AGENT DEBTS
2003 AGENT DEBTS
2004 RESIGNED AGENT
Total
DEBTS
DEBTS
DEBTS
DEBTS
DEBTS
DEBTS
DEBTS
DEBTS
DEBTS
231
234
296
151
192
67
3.583
597
2.181
2.343
9.875
0
0
(6)
0
0
0
(20)
(232)
(402)
(447)
5.967
4.860
0
0
0
0
0
0
0
0
0
0
0
0
231
234
290
151
192
67
3.562
365
1.780
1.896
5.967
14.735
Page 86
Sundry Debtors
The sundry debtor balance amounted to € 156.924 thousand in 2004 against € 94.626 thousand in 2003
and € 74.847 thousand in 2002 thus increasing by 109,6% during the three year period. The above
increase is caused mainly due to the increase of the Company’s income tax prepayment for the fiscal yearend of 2004 (due to the increased profitability of the fiscal year-end). The above account at 31.12.2004 is
analyzed below:
Sundry Debtors
Deferred income tax expense fiscal year-end 2005
Hellenic Republic
Agent Debts
Loans and facilities to OPAP S.A. personnel
Trade creditors (suppliers) debit balance
Other Debtors
Receivables from activities (10% from Cyprus month December 2004)
Total
(€ in thousands)*
144.054
0
9.882
1.085
910
222
771
156.924
The income tax prepayment for the fiscal year-end of 2005, amounting to € 144.054 thousand, has been
calculated based on the income tax of 2004.
The account “Agent Debts” amounting to € 9.882 thousand refers to agent debts that are not settled
within the expected dead line. If an agent does not settle his debt, resulting from an account statement
within the dead line, then the debt is recorded in the above account with the objective to be settled in the
following account statement. In the case were the agent does not settle his debt in the following account
statement then either an interest bearing settlement takes place or the cooperation with the specific agent
is terminated and the debt is transferred to the doubtful agent outstanding.
Advances and Credit Accounts
The advances and credit accounts at 31.12.2004 amounted to € 19.282 thousand against € 23.196
thousand in 2003 and € 18.116 thousand in 2002. The above account at 31.12.2004 is analyzed below:
Advances & Credit Accounts
Debit Account Statements – Greek Agent Revenues
Gross revenues from games
Debit Account Statement Differences
OPAP S.A. Employee Association “Solidarity”
Other Transaction Accounts
Total
(€ in thousands)*
10.246
8.584
41
279
132
19.282
The “Advances and Credit” account, monitors managerial type receivables of the Company against its
employees and agents arising from amount nominal deposits, namely for the execution of a defined
project on behalf of the Company.
The balance of the debit account statements (difference between receivables and liabilities of agents
towards the Company twice a week in every accounting period) amounting to € 10.246 thousand refers to
the Company’s receivables from agents based on the account statements. The account is charged with the
account statement issue. In case an agency delays its debt payment either partially or in full, the
Company “locks” the agent’s terminal and will only set it in operation again once the debt has been paid.
The balance of the “Gross revenues from games” account amounting to € 8.584 thousand refers to the
Company’s gross receivables from agents, that is before the receivables off-setting with the Company’s
liabilities towards agents.
The balance of the “Debit Account Statement Differences” account amounting to € 41 thousand, refers to
the differences (debit or credit) resulting from the deposition of the debit account statements to the cash
accounts of OPAP S.A.
Cash and Banks
Page 87
The cash and banks balance at the end of the fiscal year-end of 2004 amounted to € 383.553 thousand
against € 286.005 thousand in 2003 and € 359.121 thousand in 2002. The Company at 31.12.2004
maintained time and checking’s deposits of the amount of € 383.189 thousand.
Time deposit titles were valuated at their current value dated December 31st 2004. Cash in F.X. were
valuated at the official price of the F.X. at December 31st 204 and the resulting foreign exchange
differences where recorded in the profit and loss account.
The Company’s debit transitory accounts at 31/12/2004 are analyzed below:
Transitory Accounts
Deferred expenses – grants – third party fees
Deferred expenses - advertising, sponsorships
Deferred expenses – F.C. football field constructions
Accrued income from “Pame Stihima” lead manager
Accrued deposit interest
Total
(€ in thousands)*
62
8.975
7.226
65.975
12
82.250
Deferred Expenses
The deferred expenses account amounting to € 8.975 thousand at 31/12/2004 refers mainly to advertising
and sponsorship expenses where as the amount of € 62 thousand refers to grants and third party fees.
The amount of € 7.226 thousand refers to F.C. football field constructions.
Accrued Income
The accrued income balance at 31/12/2004 amounted to € 65.975 thousand and refers to income related
to the claim difference resulting from the Company’s contractual liability to pay 60% of the revenues to
the gaming winners of PAME STIHIMA with the percentage of 64,12% that resulted from the profit sorting
up to 31.12.2004.
Share Capital – Total Shareholders Equity
The Company’s share capital at 31/12/2004 amounted to € 95.700 thousand and is divided in 319.000.000
ordinary nominal shares of € 0,30 face value each.
With the First Ordinary General Assembly decision of the Shareholders dated 26/6/2001 and according to
the ordinances of L.2842/2000, in order to convert the Company’s share capital in €, the share capital was
increased by Grd 709.775.000 with a simultaneous increase of the Company’s face value of each share
from Grd 100 to Grd 102,225. The share capital increase resulted from the capitalization of tax-free
income reserves amounting to Grd 709.775.000. Thus, the Company’s share capital amounted to Grd
32.609.775.000 or € 95.700.000.
During the current fiscal year-end the value of assets was readjusted according to L. 2065/1992. From the
readjustment a credit difference of € 40 thousand resulted, which increased the acquisition cost of the
assets. This difference was subject to taxation with 8% and transferred to the account “Revaluation
Reserves” of the total equity increasing thereby the net worth of the Company.
The Company’s Total Shareholder Equity at 31/12/2004 amounted to € 139.984 thousand against €
138.841 thousand in 2003 and € 137.240 thousand in 2002.
Provisions
The provisions balance on December 31st, 2004 amounting to € 26.044 thousand is analyzed below:
Provisions
Provisions for personnel retirement indemnities
Other Provisions
Total
(€ in thousands)*
26.044
0
26.044
Page 88
During fiscal year-end 2004 the Company performed a provision for personnel retirement indemnities by
100% according to the ordinances of article 42e of C.L.2190/1920 and the relevant paragraphs of the
Collective Labor Contract signed between the Company’s Administration and its personnel.
Relating to the calculation of the personnel retirement indemnities, it should be noted that according to
the Collective Labor Contract, in effect, the indemnity, in case an employee retires due to any retirement
aspect and after the completion of one year service to the Company, is calculated based on the monthly
salary (basic salary augmented with all additional fees, allowances, etc).
Every employee is entitled as a retirement indemnity one monthly salary for every year of service up to 35
salaries. The above provision amounting to € 26.044 thousand in fiscal year-end of 2004 has been
calculated on the 100% of the total indemnity that each employee is entitled to, based on the labor
legislation ordinances.
It should be noted that the Company pays the 100% of the total indemnity that each employee is entitled
to at the time of his or her retirement.
The Company’s long-term liabilities on December 31st, 2004 are analyzed below:
Analysis of Long-term Liabilities
Bank loans
Agent warrants
Agent fine reserves
Agent warrant interest reserves
Agent cash warrants
Other Long-Term Liabilities
(€ in thousands)*
25.345
3.429
753
597
273
112
30.509
In the account “Agent warrants” the Company registers the guarantee paid by the agents when their
operations begin. As expected from the “Agent Rights and Obligations Regulation”, the guarantee
deposited by the agent is at the Company’s disposal and summed up constitutes a joint liable fund that
OPAP S.A. secures in every case of any agent’s insolvency. In the case an agent debt occurs for whatever
reason, the Company has the right to undertake the debt amount from the joint fund. The occasional
agent regained debt amounts are deposited by the Company in the joint compensation fund.
The Company places the agent’s guarantees in interest bearing bank accounts and the interest appears in
the “Reserves from interest from agent guarantees”. In the case the agent debts are not paid, the debt
amount is covered by the guarantee interest and if that is not sufficient to cover the agent’s debts, than
they are covered from the agent’s guarantees. The “Reserve from agent fines” has been formulated from
fines imposed to agents according to the Regulation. The above mentioned reserves are considered by
OPAP S.A. as long-term liabilities to the agents.
The Company covers all the doubtful receivables, for the interest of the guaranteed fund that the agents
have deposited, resulting from fines imposed in addition to the joint guaranteed fund.
Long –Term Bank Loans
The account of long-term bank loans refers to loans signed by the Company on behalf of organizations of
the Hellenic Republic. The above account at 31/12/2004 is analyzed below:
Description – Payment of Outstanding Loan
(€ in thousands)*
Date of Contract
Initial
Outstandi
Loan
Loan
Loan Signature
Bank
Loan
ng
Payments
Payments
/Date of 1st Loan
Amount
31/12/20
within
after 2005
04
2005
0
0
Payment
Full payment up to 31/6/2004 in one loan payment
30.6.1997 /
30.6.2000
NATIONAL
INVESTME
NT BANK
OF
20.543
Page 89
0
amounting to Grd 775 million (€ 2.274 thousand)
Full payment up to 31/12/2004 in 2 equal 6 month
loan payments amounting to Grd 2.000 million (€
5.869 thousand)
20.1.1998 /
31.12.2000
equal 6 month loan payments amounting to Grd
1.667 million (€ 4.892 thousand)
8.2.2000 /
30.6.2003
Β’ Loan on behalf of the Ministry of Culture Grd 10
Full payment from 1/2/2002 to 30/10/2005 in weekly
loan payments amounting to Grd 50 million (€ 147
thousand)
18.10.1999 /
1.2.2002
C’ Loan on behalf of the Ministry of Culture Grd 10
equal 6month loan payments amounting to Grd 909
million (€ 2.668 thousand)
9.8.2000 /
1.1.2003
INDUSTRIA
L
DEVELOPM
ENTNATIONAL
BANK OF
GREECE
NATIONAL
BANK OF
GREECE –
EMBORIKI
BANKNATIONAL
INVESTME
NT BANK
OF
INDUSTRIA
L
DEVELOPM
ENT - HSBC
– PIRAEUS
BANK
NATIONAL
BANK OF
GREECE –
HELLENIC
BANK OF
INDUSTRIA
L
DEVELOPM
ENT –
AGRICULTU
RAL BANK
OF
GREECEEMBORIKI
BANK
HELLENIC
BANK OF
INDUSTRIA
L
DEVELOPM
ENT AGRICULTU
RAL BANK
OF GREECE
NATIONAL
BANK OF
GREECE NATIONAL
INVESTME
NT BANK
OF
INDUSTRIA
L
DEVELOPM
ENT –
HELLENIC
BANK OF
INDUSTRIA
L
DEVELOPM
ENT AGRICULTU
RAL BANK
OF GREECE
Total
52.825
0
0
0
44.021
24.456
9.782
14.673
29.347
6.456
6.456
0
29.347
16.007
5.336
10.672
176.083
46.920
21.575
25.345
Long-Term Liabilities Payable Next Fiscal Year-End
The long-term liabilities payable in the next fiscal year-end on December 31st, 2004 are analyzed below:
Long-Term Liabilities payable in the next fiscal year-end
Syndicated Loan Grd. 18.000 million (€ 52.825 thousand) NATIONAL BANK OF GREECE
Syndicated Loan Grd 15.000 million (€ 44.021 thousand) NATIONAL BANK OF GREECE
Syndicated Loan Grd 10.000 million (€ 29.347 thousand) HELLENIC BANK OF INDUSTRIAL
DEVELOPMENT -AGRICULTURAL BANK OF GREECE
Total
(€ in
thousands)*
0
9.782
5.336
6.456
Suppliers (trade Creditors)
Page 90
0
21.575
The suppliers (trade creditors) account at 31/12/2004 is analyzed below:
(€ in thousands)*
Advertising services suppliers
BETTING COMPANY S.A.
INTRAKOM S.A.
Asset Suppliers
Other Suppliers
7.130
10.074
4.973
9.241
10.552
41.970
Total
The following table depicts the maturity of Suppliers at 31/12/2004:
Maturity of Suppliers (31/12/2004)
Up to 15 days
16 – 30 days
More than 31 days**
Total
(€ in
thousands)*
Percentage
11.225
7.966
22.779
41.970
27%
19%
54%
100,0%
**The above analysis took place within the month of February 2005.
Taxes –Duties – Social Security
The Company has no delayed debts towards Public Financial Service enterprises and Social Security funds.
The Company’s liabilities from taxes – duties and Social Security at 31/12/2004, are analyzed below:
Liabilities from Taxes-Duties and Social Security
Income tax
Value Added Tax
Taxes-duties from personnel fees
Taxes-duties from third party fees
Social Security Foundation
Gaming Tax
Other taxes-duties
(€ in thousands)*
326.641
6
2.392
49
1.015
6.247
107
336.457
Total
The game tax retention refers to the Company’s retentions from the game winners. The retention per
game during fiscal year-end 2004 was attained with the following percentages and limits:
Tax-Free Limit in €
PROPO
JOKER
LOTTO
PROTO
PROPOGOAL
PAME STIHIMA
EXTRA 5
SUPER 3
ΚΙΝΟ
100 €
100 €
100 €
100 €
100 €
146,7 €
100 €
100 €
100 €
Tax Percentage
10%
10%
10%
10%
10%
5%
10%
10%
10%
The tax retention is realized through the collection of profits from the winners and not from the
announcement of profits after the selection of the winning, per game, tickets. The profits from special
draws are taxed with 10% in the whole amount. The tax return is realized the following month from the
profit return to the player.
Page 91
Dividends Payable
The Company’s Board of Directors, after the distribution on 15.12.2004 of an interim dividend (total
amount € 175.450 thousand) € 0,55 per share (B.D. decision n. 36/10-11-2004), decided to propose to
the Ordinary General Assembly of the shareholders, the distribution of a total dividend of € 1,48 per share
(which includes the already distributed interim dividend of € 0,55). This results to a total dividend payable
at 31/12/2004 of € 1,48 times 319.000.000 shares = € 472.120.000,00. At 31.12.2004 the balance of the
account “dividends payable” amounted to € 297.819 thousand.
The Company’s Board Of Directors, based upon their decision 36/10.11.2004, decided to distribute an
interim dividend amounting to a total of € 175.450.000,00 subject to the Ordinary General Shareholders
Assembly approval.
Sundry Creditors
The account “Sundry Creditors” on December 31st, 2004 is analyzed below:
Sundry Creditors Analysis
Game Winning Beneficiaries
Liabilities from winning write-offs and rounding
Cheques payable (suppliers-creditors)
Warrants 31.12.2004 under execution (winners profits)
Personnel emoluments payable
Credit Agent Account Statements (mainly winners profits)
Beneficiary rights liabilities (Football Societe Anonyme Association, H.F.F., Ministry of
Culture)
Seizure beneficiaries
JACK POT Liabilities
OPAP SERVICES S.A.
Other sundry creditors
Total
(€ in
thousands)*
26.776
27.496
1.067
332
2.790
559
2.794
173
846
8.876
420
72.129
The “Game winning beneficiaries” account refers to the Company’s obligation to distribute the game
profits to winners, including the tax. The relevant high obligation amount depicted is due to the total
petty-cash amounts that have either shown a collection delay from players, or have not been collected
from players and are transferred to the “Liabilities from winning write-offs” account. PAME STIHIMA,
EXTRA 5, SUPER 3 and ΚΙΝΟ profits are written-off after the expiration of three (3) months from the due
date of the relevant draw, whereas not solicited profits from the remaining games are written-off after the
expiration of six (6) months. The account analysis per game at 31/12/2004 is depicted below:
Game Winning Beneficiaries
Game
PROPO
LOTTO
PROPOGOAL
PROTO
JOKER
PAME STIHIMA
EXTRA 5
SUPER 3
ΚΙΝΟ
Joint Cyprus Account
Return of void lottery ticket liability (PAME STIHIMA)
Total
(€ in thousands)*
411
682
7
1.957
12.567
3.683
228
150
9.575
(4.762)
2.278
26.776
Page 92
The account credit is done with the completion and clearing of every draw. The debit charge is done with
the payment to the winning beneficiaries.
The “Liabilities from winning write-offs and rounding” account refer to amounts, based upon article 10 of
the P.D. 395/90, distributed to players. These profits, after the expiration period expected for their writeoff, do not augment the Company’s profits but instead are once again distributed to the game winners by
increasing the amounts designated from the payout percentages. Essentially these are player profits which
were not yielded due to the fact that the winners did not show up and are given to the players based on a
Company’s B.D. decision, either by reinforcing certain winning categories with extra amounts, or through
promotional activities e.g. presents etc.
Personnel emoluments payable, amounting to € 2.790 thousand refer mainly to the deposit obligation of
an ordinary yearly premium in addition to fees of December 2004 regarding permanent and part time
personnel.
The credit transitory accounts at 31/12/2004 are analyzed below:
Credit Transitory Accounts Analysis
Accrued interest of 31/12/2004 syndicated loan
2005 time interest deposits
Accrued third party fees (Emporiki Bank fee)
Accrued advertising, sponsorships
Accrued expenses-pension indemnities
Accrued expenses rents-maintenance-telecommunications
Total
(€ in thousands)*
20
2
306
2.720
756
425
4.229
Memorandum Accounts
The memorandum accounts at 31/12/2004 are analyzed below:
Memorandum Accounts
Guarantees third parties – suppliers
Agent letters of guarantee
Facilitations of F.C.’s – associations
Guarantees to third parties
Pension retirement obligations and P.C. L. 395 reserve income
Potential obligations from sponsorship contracts
Total
(€ in thousands)*
25.659
616
11
20
2.271
2.823
31.401
Guarantees of third parties to OPAP S.A. are analyzed below:
Guarantees to third parties-suppliers
INTRALOT
INTRAKOM
Inform P. Lykos
H.F.F.
Hellenic Telecommunications Organization
Agent warrants
Megalos S.A.
Other
Total
(€ in thousands)*
16.141
2.226
697
323
602
616
330
4.724
25.659
Page 93
10.6. Financial Ratios
The basic financial ratios, based on the balance sheet of the Company for the fiscal year-end 2002, 2003
and 2004, are presented below:
FINANCIAL RATIOS
FISCAL YEAR-END
GROWTH RATIOS (%)
Profit before Tax
2002
2003
2004
9,4%
(14,6%)
(14,8%)
14,8%
18,0%
19,7%
35,8%
88,3%
93,1%
(15,8%)
16,8%
101,4%
5,3%
(4,5%)
35,1%
(1,4%)
44,6%
27,3%
220,7%
41,1%
276,3%
50,0%
528,3%
85,3%
1
31
0
0,7
29
0
0,1
29
0
Debt /Equity
Bank Debt /Equity
4,00
0,89
3,5
0,6
5,7
0,3
Current Ratio
Quick (acid) Ratio
1,02
1,02
0,94
0,93
0,73
0,73
1,4%
2,1%
0,8%
0,1%
0,4%
0,3%
Inventories
Trade Receivables
Growth Ratios
The Company’s turnover (sales) growth rate during the period 2003-2004 depicted an increase of 35,8%
against 14,8% during the period of 2002-2003 and 9,4% during the period 2001-2002. The continuous
increase of sales during the three year period of 2002-2004 is caused mainly due to the successful
conduct of the first fixed odds game “PAME STIHIMA” in addition to the new game “KINO”.
The Company’s profit before tax growth rate increased by 93,1% during the two year period 2003-2004
against 19,7% in 2002-2003 whereas during the period 2001-2002 the growth rate was negative by
14,8%. The Net Profits after Income Tax & B.D. Fees & Other Gaming Payouts non Incorporated
to the Operating Cost growth rate depicted a substantial increase of 101,4% during the period
2003-2004 against 16,8% for the period 2002-2003 and a decrease of approximately 15,8% for the period
2001-2002. The termination of subsidies during the fiscal year-end of 2001, constituted a significant
development giving the Company the capability to increase its appropriated profits and thus distribute far
more significant dividends.
The total tangible assets (acquisition cost) depicted a continuous positive growth rate, and from 5,3%
during the period 2001-2002 and 35,1% during the 2002-2003 resulted into 44,6% during the period
2003-2004.
Last, the total working capital growth rate from a negative development during the period 2001-2002 and
2002-2003, i.e. 4,5% and 1,4% respectively depicted an increase during the period 2003-2004 by a
percentage of 27,3%.
Page 94
Index Ratios
The Company’s equity weighted average index is exceptionally high. Even though the Company’s total
shareholder equity was doubled during the period 1999-2003, the equity weighted average index of fiscal
year-end 2003 came to 276,3% and to 528,3% for the fiscal year-end of 2004. This development reflects
the Company’s ability to achieve a high profitability, without substantial investments into new installations
and equipment, and as a result the Company’s shareholders do not have to contribute in capital, which is
necessary for the financing of assets.
The Company’s financing, into a great extend, from taxes-duties and dividends and the ensuing formed
debt/equity ratio, is the main reason for the greater efficiency of the equity weighted average index
against the working capital weighted average which resulted to 41,1% in 2002, 50% in 2003 and 85,3%
in 2004.
Turnover Ratios
The suppliers (trade creditors) turnover ratio remained stable during the three year period 2002-2004 to
an average of 30 days. The inventory turnover ratio depicted a decrease in days and from 1 day in 2002
the ratio came up to 0,7 days in 2003 and 0,1 days in 2004. Due to the nature of the Company’s
operations (provision of services), the inventories are limited and do not have any significant impact to the
Company’s financial structure.
Debt Management Ratios
The continuous reduction of the Company’s bank debt during thee three year period 2002-2004 resulted in
the improvement of the Bank Debt to Equity ratio from 0,89:1 in 2002 to 0,6:1 in 2003 and 0,3:1 in 2004.
The debt management ratio Debt to Equity came up to 5,7:1 in 2004 against 3,5:1 in 2003 and 4:1 in
2002. The ratio’s burdening during the fiscal year-end of 2004 is caused mainly due to the increase of the
Company’s short-term liabilities and specifically the “taxes-duties” and “dividends payable” accounts.
Liquidity Ratios
The Company’s liquidity (current and quick liquidity) during the three year period 2002-2004 depicts a
slight aggravation and from 1,02:1 in 2002 the ratio came up to 0,94:1 in 2003 and 0,73:1 in 2004. OPAP
S.A. does not maintain substantial inventories and therefore the quick ratio does not fundamentally
differentiate fro the current ratio.
Financial Ratios
Due to the Company’s increased profitability in addition to its significant cash flow, the Company did not
resort to bank loans for its investment program financing.
The interest from bank loans that the Company has signed during past fiscal years on behalf of state
organizations (Ministry of Culture, General Secretariat of Athletics) have been significantly reduced,
resulting in further improvement of the already satisfactory relevant ratios. The ratio Financial
Expenses/Gross profit before depreciation came up from 1,4% in 2002, to 0,4% in 2004 and the
ratio Financial Expenses/Profits before Debit Interest & Tax came up from 2,1% in 2002 to 0,3% in
2004.
Page 95
FINANCIAL RATIO DEFINITIONS
GROWTH RATIOS (%)
Turnover (sales) =
Profit before Depreciation and Tax =
Profit before tax =
[(Turnover (sales) of current year-end - Turnover (sales) of previous year-end) /
Turnover (sales) of previous year-end]* 100
[(Profit before depreciation and Tax of current year-end - Profit before depreciation
and Tax of previous year-end) / Profit before depreciation and Tax of previous yearend]* 100
[(Profit before tax of current year-end - Profit before tax of previous year-end) /
Profit before tax of previous year-end]* 100
Profit after Income Tax & B.D. Fees & Other Gaming Payouts
non Incorporated to the Operating Cost=
[(Profit after Income Tax & B.D. Fees & Other Gaming Payouts non Incorporated to
the Operating Cost of cuurent year-end - Profit after Income Tax & B.D. Fees &
Other Gaming Payouts non Incorporated to the Operating Cost of previous year-end)
/ Profit after Income Tax & B.D. Fees & Other Gaming Payouts non Incorporated to
the Operating Cost of previous year-end]*100
Tangible Assets (acquisition cost) =
[(Tangible Assets of current year-end - Tangible Assets of previous year-end) /
Tangible Assets of previous year-end]* 100
Total Working Capital =
[(Grand Total Assets of current year-end - Grand Total Assets of previous year-end) /
Grand Total Assets of previous year-end]* 100
Equity Weighted Average =
{(Profits before tax of current year-end/ [(Total shareholders Equity of current yearend + Total shareholders Equity of previous year-end) / 2]}* 100
Working Capital Weighted Average =
(Profits before tax of current year-end + Debit Interest) / [Grand Total Liabilities of
current year-end + Grand Total Liabilities of current year-end) /2]*100
Current Ratio =
(Total Current Assets) / (Total Short-Term Liabilities)
Quick Ratio =
(Total Current Assets - Inventories) / (Total Short-Term Liabilities)
Inventories=
(Inventories of current year-end/ Cost of sales before depreciation of current yearend)*365
Trade Receivables =
[(Trade receivables, Bills & Cheques receivable, Bills & Cheques overdue of current
year-end) / Turnover (sales) of current year-end]*365
Suppliers (trade reditors) =
[(Trade Creditors, Bills & Cheque Payabe of current year-end) / Cost of sales before
depreciation of current year-end]*365
DEBT MANGEMENT RATIOS (:1)
Debt/Equity =
(Long-Term Liabilities+ Short-Term Liabilities + Credit Transitory Accounts) / Total
Shareholders Equity)
Bank Debt/Equity =
(Long-Term Bank Loans + Short-term bank Loans + Long-Term Liabilities payable in
the fiscal Year-end) / Total Shareholders Equity
Financial Expenses/ Gross profit before depreciation =
Debit Interest / Gross profit before depreciation
Financial Expenses / Profits before Debit Interest & Tax =
Debit Interest / (Profit before tax + Debit Interest)
Page 96
10.7. Sources & Uses of Funds
SOURCES & USES OF FUNDS
(€ in thousands)*
SOURCES OF FUNDS
Profit before Tax
Depreciation (total)
Provisions
Share capital increase through fiscal year-end profit
capitalization
Share capital increase through the offsetting of the exclusive
concession exploitation lottery game rights price value
Net Change in Revaluation Reserves – Investment Grants
Long-Term Bank Loan Increase
Other Long-Term Liability Increase
Short-Term Bank Loan Increase
TOTAL
USES OF FUNDS
Change in Working Capital
Change in Cash & Banks
Net change in Assets and Formation Expenses
Increase (Decrease) Investments and Other Long-Term
Financial Receivables
Long-Term Bank Loan Decrease
Other Long-Term Liability Decrease
Short-Term Bank Loan Decrease
B.D. Fees and Personnel Allocation of Profits
Fiscal Year-end profits for Share Capital Increase
Allocated Dividends
Taxes (including taxes from tax audit differences)
Other Gaming Payouts not incorporated to the Operating Cost
TOTAL
2002
318.593
24.509
74.616
2003
2004
381.365 736.459
23.569
26.132
72.801 (102.350)
TOTAL
%
1.436.417
74.210
45.067
92,2%
4,8%
2,9%
0
0
0
0
0,0%
0
0
0
0
0,0%
0
0
39
39
0,0%
0
0
0
0
0,0%
1.406
21
154
1.582
0,1%
0
0
0
0
0,0%
419.125 477.756 660.434 1.557.315 100,0%
15.465
87.938 (259.888)
(12.716) (73.116)
97.548
3.767
15.714
24.804
1.512
28.420
(156.485)
11.716
44.285
(10,0%)
0,8%
2,8%
55.783
3,6%
25.851
78.325
39.035
36.763
0
0
0
0
0
0
0
0
0
0
0
0
213.730 232.870 472.120
119.042 146.895 263.236
0
0
0
419.125 477.756 660.434
154.123
9,9%
0
0,0%
0
0,0%
0
0,0%
0
0,0%
918.720
59,0%
529.173
34,0%
0
0,0%
1.557.315 100,0%
Page 97
11. CONSOLIDATED FINANCIAL STATEMENTS OF FISCAL YEAR-END 2003 AND
2004
11.1. Associated companies that are included in the consolidation
companies OPAP GLORY LIMITED (incorporated through the aggregate consolidation method), GLORY
TECHNOLOGY LIMITED (incorporated through the net worth method) and OPAP (CYPRUS) LIMITED
(incorporated through the aggregate consolidation method).
The table below presents the associated companies that are included in the consolidated financial
statements of OPAP S.A. fro the fiscal year-end of 2003:
COMPANIES THAT PARTICIPATE IN THE CONSOLIDATED BALANCE SHEET OF OPAP S.A. AT 31.12.2003
DIRECT
INDIRECT
PARTICIPATION PARTICIPATION
COMPANY
OPAP GLORY LIMITED
CONSOLIDATION
REASON
C.L. 2190/1920
SUBSIDIARY
90%
-
GLORY TECHNOLOGY LIMITED
20%
-
AFFILIATE
OPAP (CYPRUS) LIMITED
100%
-
SUBSIDIARY
CONSOLIDATION
METHOD
AGGREGATE
CONSOLIDATION
NET WORTH
AGGREGATE
CONSOLIDATION
The table below presents the associated companies that are included in the consolidated financial
statements of OPAP S.A. fro the fiscal year-end of 2004:
COMPANIES THAT PARTICIPATE IN THE CONSOLIDATED BALANCE SHEET OF OPAP S.A. AT 31.12.2004
COMPANY
DIRECT
INDIRECT
PARTICIPATION PARTICIPATION
CONSOLIDATION
REASON
C.L. 2190/1920
100%
-
SUBSIDIARY
OPAP SERVICES S.A.
100%
-
OPAP GLORY LIMITED
90%
-
20%
-
AFFILIATE
100%
-
SUBSIDIARY
SUBSIDIARY
SUBSIDIARY
CONSOLIDATION
METHOD
AGGREGATE
CONSOLIDATION
AGGREGATE
CONSOLIDATION
AGGREGATE
CONSOLIDATION
NET WORTH
AGGREGATE
CONSOLIDATION
It should be noted that the above affiliated companies that are included in the consolidation represent
only 5,1% and 3,4% of the consolidated Grand Total Assets and profit and Loss Accounts respectively.
Taking into consideration the minimal affect of the above mentioned companies to the consolidated
financial figures against the balance sheet of OPAP S.A., the current chapter presents in full analysis the
financial tables of the consolidated profit and loss accounts and balance sheet accounts for the fiscal yearend of 2003 and 2004 and synoptic as far as the analysis of each account is concerned. Further analysis of
each account is presented in the respective accounts of the parent Company.
Page 98
11.2. Development of Results- Consolidated Profit & Loss Accounts
The development of the consolidated profit and loss accounts for the fiscal year-end 2003 and 2004 are
presented below:
Profit & Loss Accounts (€ in thousands)*
Turnover (Sales)
Less: Cost of Sales (1)
Payments to gaming winners
Gross Profit (before depreciation)
2003
2.277.163
(425.519)
(1.353.039)
498.605
2004
3.177.208
(502.601)
(2.000.710)
673.897
Plus: Other Operating Results
Total
Less: Administrative Expenses (1) (2)
Selling Expenses (1)
Total Expenses
45.621
544.226
(21.377)
(47.589)
(68.966)
66.797
740.694
(27.399)
(57.245)
(84.644)
475.260
656.050
Plus:
Extraordinary & Non Operating Income
Extraordinary Profits
Prior Year’s Income
Prior Year’s Income from provisions
Plus: Affiliated Company Investment Profits
Less: Extraordinary & Non Operating Expenses
Extraordinary Losses
Prior Year’s Expenses
Provisions for extraordinary risks
Less : Affiliated Company Investment Losses
Profits before Interest, Depreciation & Tax
11
0
531
635
0
(2.060)
0
(4.755)
(43.914)
(7)
425.701
435
28
342
111.478
338
(677)
0
(1.250)
0
0
766.744
Plus: Credit Interest & Similar Income
Less: Debit Interest & Similar Charges
7.947
(4.191)
429.457
9.548
(2.612)
773.680
Less: Depreciation (Total)
Less: Consolidation Differences Depreciation
Less: Affiliated Company Investment Depreciation Surplus
International Affiliates Consolidation Foreign Exchange Difference
Profits before Tax
(23.569)
(2.846)
(1.999)
(9)
401.035
(26.571)
(2.846)
(1.999)
45
742.311
Less: Other Gaming Payouts non Incorporated to the Operating Cost
Less: Income Tax and Other Taxes
Profit after Income Tax & Other Gaming Payouts non
0
(146.459)
0
(263.669)
254.576
478.642
Less: Taxes from year-end Tax Audit
Differences (3)
(531)
0
(% on turnover)
(% on turnover)
(% on turnover)
(% on turnover)
(% on turnover)
(% on turnover)
(% on turnover)
(% on turnover)
Minority Rights proportion
Differences and Minority Rights proportion (3)
(% on turnover)
21,9%
3,0%
20,9%
18,7%
18,9%
17,6%
11,2%
21,2%
2,7%
20,6%
24,1%
24,3%
23,4%
15,1%
254.045
478.642
(55)
92
11,1%
253.990
11,1%
15,1%
478.734
15,1%
(1) Before Depreciation incorporated in the Cost of Sales, Administrative Expenses and Selling Expenses respectively.
(2) The Board of Director Fees are incorporated in the Administrative Expenses since they are considered as extra emolument expenses.
(3) The prior year’s Company tax audit results are depicted within the assessed year-end.
Page 99
Turnover (Sales) – Gross Profit Margin
At the end of the second consolidated fiscal year-end of 2004 the total consolidated turnover (sales)
amounted to € 3.177.208 thousand against € 2.277.163 thousand in 2003, resulting in an increase of
39,5%.The three associated companies that were consolidated in the fiscal year-end of 2003 contributed
to the total turnover (sales) a percentage of 0,78% and the five associated companies that were
consolidated in fiscal year-end of 2004 contributed respectively a percentage of 3,4%.
The cost of sales before depreciation of the consolidated profit and loss accounts amounted to € 502.601
thousand in 2004 against € 425.519 thousand in 2003. More over the account “Payouts to gaming
winners” amounted to € 2.000.710 thousand in 2004 against € 1.353.039 thousand in 2003. The gross
profit before depreciation amounted to € 673.897 thousand in 2004 against € 498.605 thousand in 2003,
resulting in a gross profit margin (before depreciation) of 21,2% and 21,9% respectively.
Administrative & Selling Expenses
The total amount of the administrative and selling expenses (before depreciation) amounted to € 84.644
thousand in 2004 against € 68.966 thousand in 2003, resulting in a total expense cost margin of 2,7% and
3% respectively on the total consolidated turnover (sales).
The operating result before depreciation increased by 38% in absolute numbers and amounted to €
656.050 thousand in 2004 against € 475.260 thousand in 2003, resulting in margin of 20,6% and 20,9%
respectively.
Extraordinary Results
The consolidated extraordinary results amounted to a credit amount of € 110.357 thousand in 2004,
mainly due to the prior year’s income from provisions (see parent Company analysis) which amounted to €
111.478 thousand against a debit amount of € 49.552 thousand in 2003 mainly due to the amount of
approximately € 43,9 million relating to the parent Company provisions for extraordinary risks (see parent
Company analysis).
Profit before Interest, Depreciation & Tax
The profits before interest, depreciation and tax amounted to € 766.744 thousand in 2004 against €
425.701 thousand in 2003, resulting in a margin of 24,1% and 18,7% respectively of the total
consolidated turnover (sales).
Depreciation
The depreciation of the consolidated profit and loss accounts refers to the depreciation of assets
amounting to € 26.571 thousand in 2004 against € 23.569 thousand in 2003, the depreciation of
consolidation differences amounting to € 2.846 thousand and the depreciation of the affiliated company
investment surplus amounting to € 1.999 thousand.
Moreover the international affiliates consolidation foreign exchange difference is taken into
account, amounting to € 45 thousand in 2004 (credit differences) against € 8,7 thousand in 2003 (debit
differences).
Profit before Tax
The consolidated profits before tax increased by 85,1% in absolute numbers during 2004 and amounted
to € 742.311 thousand against € 401.035 thousand in 2003, resulting in a profit before tax margin of
23,4% and 17,6% respectively.
Profit after Income Tax & prior year’s Tax Audit Differences and Minority Rights proportion
The net consolidated profits for the fiscal year-end 2004 amounted to € 478.734 thousand against €
253.990 thousand in 2003, resulting in a net profit margin of 15,1% and 11,1% respectively.
Page 100
11.3. Consolidated Balance Sheet
The table below depicts the consolidated balance sheet of the Company for the fiscal year-end 2003 and
2004:
BALANCE SHEET(€ in thousands)*
ASSETS
Formation Expenses
Intangible Assets
Tangible Assets
Net Tangible Assets
Investments in affiliates and other companies
Other long-term receivables
Total Fixed Assets
Inventories
Trade-Bills & Cheques receivables
Long-term receivables for next fiscal year-end
Sundry Debtors
Advances & credit accounts
Securities
Cash and Banks
Transitory Accounts
GRAND TOTAL ASSETS
LIABILITIES
Share Capital
Revaluation reserves
Investment grants
Reserves
Retained Earnings
Minority Rights
Provisions
Bank Long-Term Liabilities
Other Long-Term Liabilities
Suppliers (Trade Creditors)
Banks
Trade Advances
Taxes-Duties
Social Security
Long-term liabilities payable next fiscal year-end
Dividends Payable
Sundry Creditors
Total Short-Term Liabilities
Total Liabilities
Transitory Accounts
Credit memorandum Accounts
2003
11.009
(7.890)
3.120
347.041
(69.408)
277.633
53.783
(27.513)
26.271
0
9.341
313.244
777
7
170
3.730
94.137
24.935
0
294.806
418.563
54.366
789.293
144.450
2003
95.700
0
0
43.060
19.601
252
158.612
134.002
2004
13.271
(9.586)
3.685
347.041
(90.394)
256.647
77.533
(36.216)
41.317
338
10.024
308.326
918
713
669
3.856
156.291
19.896
0
423.512
605.856
82.541
1.000.408
31.401
2004
95.700
0
40
43.692
25.583
160
165.174
26.044
46.920
5.092
52.011
25.345
5.276
30.621
33.940
0
0
166.039
712
36.762
139.726
66.009
443.187
495.198
1.481
789.293
144.450
42.648
0
0
337.269
1.017
21.575
297.819
73.382
773.710
804.331
4.858
1.000.408
31.401
Page 101
Formation Expenses
The net book value of the formation expenses of the consolidated balance sheet of fiscal year-end 2004
amounted to € 3.685 thousand against € 3.120 thousand in 2003 and mainly consist of Software Programs
of Computerized Systems and multiple year depreciation expenses of the parent Company.
Intangible Assets
The net book value of the intangible assets of the consolidated balance sheet of fiscal year-end 2004
amounted to € 256.647 thousand against € 277.633 thousand in 2003. The account in 2004 refers mainly
to concessions and royalties of industrial ownership amounting to € 242.113 thousand, consolidation
differences amounting to € 8.539 thousand and other intangible assets amounting to € 5.996 thousand.
Tangible Assets
The net book value of the tangible assets of the consolidated balance sheet of fiscal year-end 2004
amounted to € 41.317 thousand against € 26.271 thousand in 2003 consisting mainly of accounts of the
parent Company assets which in turn amounted to € 39.581 thousand, that is 95,8% of the total tangible
consolidated assets (see parent Company analysis).
Total Fixed Assets
The total fixed asset account of the consolidated balance sheet of fiscal year-end 2004 amounted to €
308.326 thousand against € 313.244 in 2003 consisting mainly of the intangible assets of the amount €
256.647 thousand, that is 83,2% of the total fixed assets.
The total current assets of the consolidated balance sheet of fiscal year-end 2004 amounted to € 605.856
thousand against € 418.563 thousand in 2003 consisting mainly of the cash and banks accounts of the
amount € 423.512 thousand, that is 69,9% of the total current assets, in addition to the sundry debtors
account which amounted to € 156.291 thousand, that is 25,8% of the total current assets (see parent
Company analysis).
Grand Total Assets
Based on the above data the grand total assets of the consolidated balance sheet of fiscal year-end 2004
amounted to € 1.000.408 thousand against € 789.293 thousand in, resulting in an increase of 26,7%. This
increase is mainly due to the pre-mentioned increase of the total current assets. It should be noted that
97% of the consolidated grand total assets in absolute numbers is proportionate to the relevant accounts
of the parent Company during fiscal year-end 2004.
The consolidated total shareholder equity of fiscal year-end 2004 amounted to € 165.174 thousand
against € 158.612 thousand in 2003 consisting mainly of the parent Company’s share capital of € 95.700
thousand, that is 57,9%. The remaining amount of € 69.474 thousand refers mainly to the reserves which
amounted to € 43.692 thousand and the retained earnings which amounted to € 25.583 thousand.
Provisions
The provisions of the consolidated balance fiscal year-end of 2004 amounted to € 26.044 thousand against
€ 134.002 thousand in 2003 and refer to provisions for personnel retirement indemnities (see parent
Company analysis).
The total long-term liabilities of the consolidated fiscal year-end of 2004 amounted to € 30.621 thousand
against € 52.011 thousand in 2003, resulting in a decrease of 41,1%. These liabilities refer to the parent
Company’s bank loans of the amount of € 25.345 thousand and other long-term liabilities of the amount of
€ 5.276 thousand (see parent Company analysis).
Short-Term Liabilities
The total short-term liabilities of the consolidated fiscal year-end of 2004 amounted to € 773.710 thousand
against € 443.187 thousand in 2003. These liabilities mainly concern taxes-duties amounting to € 337.269
thousand and dividends payable amounting to € 297.819 thousand. The remaining amount of € 138.622
thousand refers to the sundry creditors, long-term liabilities payable in the next fiscal year-end, social
security and suppliers (trade creditors).
Grand Total Liabilities
Based on the above the grand total liabilities of the consolidated fiscal year-end of 2004 amounted to €
1.000.408 thousand against € 789.293 thousand in 2003.
Page 102
Page 103
11.4. Consolidated Financial Ratios
The basic financial ratios, based on the consolidated balance sheet of the Company for the fiscal year-end
2003 and 2004, are presented below:
FINANCIAL RATIOS
FISCAL YEAR-END
GROWTH RATIOS (%)
Profit before Tax
2003
2004
-
39,5%
80,2%
85,1%
-
88,0%
44,2%
26,7%
-
458,5%
83,2%
Inventories
Trade Receivables
-
0,1
28
0
Debt /Equity
Bank Debt /Equity
3,13
0,53
4,90
0,28
Current Ratio
Quick (acid) Ratio
0,94
0,94
0,78
0,78
0,8%
1,0%
0,4%
0,4%
Page 104
12. ASSOCIATED COMPANIES
12.1. Associated companies with OPAP S.A.
The Hellenic Republic is the major shareholder of the Company, which maintains a substantial number of
investments (participations) in state legal entity companies. These investments (participations) are not
presented in the Annual Report due to their significant number.
The current chapter depicts the summarized financial information and scope of operations of each of the
companies associated with OPAP S.A.
The table below depicts the Company’s investments (participations) according to their current book value
at 31.12.2004:
COMPANY
OPAP S.A.
PARTICIPATION
PERCENTAGE
OPAP S.A.
INVESTMENT
ACQUISITION
COST
OPAP S.A. INVESTMENT
(PARTICIPATION) BOOK
VALUE AT 31.12.2004
OPAP (CYPRUS) Ltd.
100%
1.704
4.809
OPAP Glory Ltd
90%
16.000
1.457
Glory Technology Ltd
10.000
338
20%
100%
5.172
4.763
OPAP SERVICES S.A.
100%
20.000
27.399
52.876
38.766
(€ in thousands)*
TOTAL:
12.2. OPAP S.A. group structure at 31.12.2004
OPAP S.A.
OPAP
SERVICES
S.A.
OPAP
GLORY
LTD
100%
90%
OPAP
(CYPRUS)
LTD
100%
GLORY
TECHNOLOGY
LTD
OPAP
INTERNATIONAL
LTD
20%
100%
Page 105
12.3. Subsidiary Companies
12.3.1. OPAP GLORY LIMITED
The company was established in Cyprus on October 16th, 2002, as a limited liability company according to
the ordinances regarding companies of Ch. 113 with the company name Glory Leisure Holdings Limited.
The company’s registered office is in the Glory Hall, Corner of Filippou and Kavalas Str., CY-2363 St.
Dometios, Nicosia, Cyprus P.O.B. 22493, CY-1522 Nicosia, Cyprus.
The company was renamed to OPAP Glory Limited on September 29th, 2003 and is the master company of
the Group OPAP Glory Limited.
Up to September 30th, 2003 the master company of OPAP GLORY LTD was Glory Worldwide Holdings Ltd
and its final master company was Quantum Corporation Ltd.
Based on an agreement (date of in effect agreement October 1st, 2003) OPAP S.A. acquired 90% of the
company’s share capital at the price of € 16.000.000. The acquisition was done through the Company’s
own capital and the price value was based upon the valuation of the company by independent certified
companies. The valuations were based upon the multiples valuation method of the Cyprus market,
multiples of international comparable companies, multiples of international acquisitions related to the
sector in addition to the strategic value designation method through discounted cash flows. Based upon
the above four valuation methods, a price range was formulated for each company and the final price
resulted from the total weighted average of each company’s average price.
The company’s main activity is the management of Collective Payout Companies and Receivers of
Collective Payouts that operate within the Cyprus Republic.
The company operates in the sports fixed odd betting sector in Cyprus through 103 agents (51 of which
are, currently, also agents of OPAP CYPRUS LTD). The market share that the company holds in a panCypriot base is estimated around 29%.
The company’s share capital amounts to 1.000.000 Cyprus Pounds, that is € 1.710.512,81 and it is divided
in 1.000.000 ordinary shares, of 1 Cyprus Pound face value, that is € 1,71 each.
The company’s shareholder’s structure is depicted below:
SHAREHOLDER STRUCTURE
Number of Shares
%
100.000
900.000
1.000.000
10%
90%
100%
Glory Worldwide Holdings Ltd
OPAP S.A.
Total
The company’s Board of Directors is depicted below:
MEMBERS OF THE BOARD
Name
Harmantas Glafkos
Kranias Dimitrios
Rigopoulos Konstantinos
Skilakakis Panagiotis
Efthivoulou Andreas
Position
Chairman
Member
Member
Member
Member
The company is represented through the Board of Directors. The Board of Directors member tenure is in
effect by rotation.
The company’s personnel is composed of 27 permanent and 4 temporary employees.
The company’s summarized financial figures for the two year period 2003-2004 are presented below:
Page 106
BALANCE SHEET 2003-2004**
2003**
2004***
Total Fixed Assets
3.718
790
1.255
1.321
GRAND TOTAL ASSETS
4.973
2.111
Share Capital
1.711
1.711
2.152
1.611
2.821
500
4.973
2.111
** Exchange rate (average price) at 31.12.2003 € 1: 0,58462 Cyprus Pounds
*** Exchange rate (average price) at 31.12.2004 € 1: 0,58 Cyprus Pounds
The company’s summarized results for the fiscal year-end 2003 and 2004 are presented below:
PROFIT & LOSS ACCOUNTS** (€ in thousands)*
2003**
2004***
Turnover (Sales)
13.715
11.555
Gross Profit
3.230
2.876
Profit/Loss before Tax
798
(918)
Profit/Loss after Tax
684
(918)
** Exchange rate (average price) for fiscal year-end 2003 € 1: 0,58462 Cyprus Pounds
*** Exchange rate (average price) for fiscal year-end 2004 € 1: 0,58198 Cyprus Pounds
The company depicts consolidated financial statements. These statements of the Group for the fiscal yearend of December 31st, 2004 include the financial statements of OPAP GLORY LIMITED and its dependent
companies. It should be noted that the statement dependent companies refers to those companies
through which the Group has a direct or indirect participation in their share capital voting right that
exceeds 50%.
For the consolidation of the dependent companies’ accounts the acquisition method is used. The
difference between the acquisition value and the fair value of the net assets of each company acquired is
recognized as a commercial favor. Companies acquired during the fiscal year-end are included in the
consolidation financial statements from the date they were acquired.
The consolidated financial statements do not include inter- group sales and balance transactions. Further
more the dependent companies are included in the Company’s balance sheet at their acquisition cost. Any
decrease, in the investment value of these companies that is regarded as permanent is recognized in the
profit and loss account.
The complete dependent companies of the Group at December 31st, 2004 in addition to their main activity
is presented below:
Page 107
COMPANY NAME
MAIN ACTIVITY
Glory Betting Sports (Principal
Cyprus) Ltd
Collective Payout Company
Glory Betting Sports (Cyprus) Ltd
Collective payout receiver of Glory Betting Sports (Principal Cyprus) Ltd
Cashgrove Betting Sports (Principal
Cyprus) Ltd
Cashgrove Betting Sports (Cyprus)
Ltd
Forza Betting Sports (Principal
Cyprus) Ltd
Collective payout receiver of Cashgrove Betting Sports (Principal Cyprus) Ltd
Forza Betting Sports (Cyprus) Ltd
Collective payout receiver of Forza Betting Sports (Principal Cyprus) Ltd
Andromeda Betting Sports (Principal
Cyprus) Ltd (former Ecco Betting
Sports (Principal Cyprus) Ltd)
Andromeda Betting Sports (Cyprus)
Ltd (former Ecco Betting Sports
(Cyprus) Ltd)
Apollo Betting Sports (Principal
Cyprus) Ltd
Collective payout receiver of Andromeda Betting Sports (Principal Cyprus) Ltd
Apollo Betting Sports (Cyprus) Ltd
Collective payout receiver of Apollo Betting Sports (Principal Cyprus) Ltd
Athina Betting Sports (Principal
Cyprus) Ltd
Athina Betting Sports (Cyprus) Ltd
Collective payout receiver of Athina Betting Sports (Principal Cyprus) Ltd
Thiseas Betting Sports (Principal
Cyprus) Ltd
Thiseas Betting Sports (Cyprus) Ltd
Collective payout receiver of Thiseas Betting Sports (Principal Cyprus) Ltd
Aris Betting Sports (Principal Cyprus)
Ltd
Aris Betting Sports (Cyprus) Ltd
Hera Betting Sports (Cyprus) Ltd
Hera Betting Sports (Principal
Cyprus) Ltd
Hermes Betting Sports (Cyprus) Ltd
Hermes Betting Sports (Principal
Cyprus) Ltd
Hercules Betting Sports (Cyprus) Ltd
Hercules Betting Sports (Principal
Cyprus) Ltd
Poseidon Betting Sports (Cyprus) Ltd
Poseidon Betting Sports (Principal
Cyprus) Ltd
Artemis Betting Sports (Principal
Cyprus) Ltd (former Glory Betting
Sports (Overseas) Ltd)
Collective payout receiver of Aris Betting Sports (Principal Cyprus) Ltd
A petition has been submitted in order to secure an operation license as a collective payout
company
company
company
company
company
company
company
company
company
Artemis Betting Sports (Cyprus) Ltd
(former Glory Betting Ltd)
company
The above companies have been established in Cyprus according to the company law Ch. 113.
Page 108
The summarized consolidated financial figures of the company for the three year period 2002-2004 are
presented below:
CONSOLIDATED BALANCE SHEET 2002-2004
Total Fixed Assets
2002**
2003**
1.234
2004***
1.069
790
2.010
1.792
1.321
GRAND TOTAL ASSETS
3.244
2.861
2.111
Share Capital
1.711
1.711
1.711
1.966
2.520
1.611
1.278
341
500
3.244
2.861
2.111
The summarized consolidated results for the fiscal year-end of 2002, 2003 and 2004 are presented below:
CONSOLIDATED PROFIT & LOSS ACCOUNTS (€ in
thousands)*
Turnover (Sales)
Gross Profit
2002**
2003**
2004***
-
13.715
-
3.230
11.555
2.876
256
798
(918)
256
684
(918)
The financial statements were prepared based on the historical cost principal, according to the accounting
principles of the International Accounting Standards as well as the Company Law, Ch. 113.
The company’s prospects arise through the introduction and operation of the UGS lottery gaming
computer information system, which is capable in increasing the speed of transactions with the players, in
addition to the company’s credibility and efficiency improvement regarding betting risk management. Also,
the impending decrease of the sales tax (from 25% to 0%-10%) in Cyprus is expected to significantly
increase the company’s turnover (sales) as well as to improve its profit margins.
No agreements-co operations exist between OPAP S.A. and OPAP GLORY LIMITED.
12.3.2. OPAP (CYPRUS) LIMITED
The company was established in Cyprus on August 14th, 2003 as a private limited liability company
according to Company Law, Ch. 113. Its registered office is in 58 Lycabettus Str., Egomi, 2401, Nicosia.
OPAP CYPRUS LIMITED today is governed from Law 34 (ΙΙΙ)/2003 which sanctions the agreement
between the Hellenic Republic and the Government of the Republic of Cyprus, in terms of the
organizational rules, the rules of operation, conduct and management of games conducted by OPAP S.A.
The company’s main activities refer to the organization, operation, conduct and promotion-advertising of
all OPAP S.A. games (except PAME STIHIMA) conducted in Cyprus.
The company’s share capital amounts to € 1.700.000,00 , that is 996.541 Cyprus Pounds and is divided in
1.700.000 ordinary shares, of € 1 face value, that is 0,58620 Cyprus Pounds each.
Page 109
Number of Shares
%
1.700.000
1.700.000
100%
100%
OPAP S.A.
Total
MEMBER OF THE BOARD
Name
Harmantas Glafkos
Alexandris Efthimios
Kollias Konstantinos
Kiriakou Zaharias
Makridis Isidoros
Hatzikakou Konstantinos
Markou Panagiotis
Pandelis Andreas
Vasos Stavrou
Position
Chairman & Managing Director
Member
Member
Member
Member
Member
Member
Member
Member
The company is represented through its Chairman and Managing Director. The members of the Board
have been appointed by the B.D. decision 28/15.07.2004 of OPAP S.A. and in that specific decision the
member’s tenure duration is not mentioned.
The average number of personnel for the period 01/01/2004-31/12/2004 amounted to 10 employees.
The summarized financial figures of the company for its first fiscal year-end 14/8/2003-31/12/2003 and for
the fiscal year-end 2004 are presented below:
BALANCE SHEET 2003-2004
Total Fixed Assets
2003**
2004***
164
752
8.796
15.530
GRAND TOTAL ASSETS
8.960
16.282
Share Capital
1.705
1.705
1.847
4.809
7.113
11.473
8.960
16.282
The summarized company results for its first fiscal year-end 14/8/2003-31/12/2003 and for the fiscal yearend 2004 are presented below:
PROFIT & LOSS ACCOUNTS (€ in thousands)*
Turnover (Sales)
Gross Profit
2003**
2004***
13.824
97.738
945
7.553
Profit before Tax
160
3.388
Profit after Tax
142
2.967
Page 110
The company’s goal is to expand its turnover (sales) through the introduction of new games in addition to
the upgrade of existing ones. Also investments are anticipated, having to do with the upgrade of
technological equipment at the points of sale as well as the parent company.
No agreements-co operations exist between OPAP S.A. and OPAP CYPRUS LIMITED.
12.3.3. OPAP INTERNATIONAL LTD
The company was established in Cyprus on February 24th, 2004, with the company name OPAP BET
LIMITED and was renamed to OPAP INTERNATIONAL LIMITED on May 5th, 2004, as a private limited
liability company according to Company Law, Ch. 113. Its registered office is in 58 Lycabettus Str., Egomi,
2401, Nicosia.
The company was established with the objective to coordinate and support the existing international
investments of OPAP S.A., the expansion of new investment opportunities, the introduction of new games,
the upgrade of existing ones and the of forwarding of know-how.
The company’s share capital amounts to € 5.172.413,79 (exchange rate €1:0,58 Cyprus Pounds, average
price, at 31.12.2004), that is 3.000.000 Cyprus Pounds and is divided in 3.000.000 ordinary shares, of €
1,724138 face value, that is 1 Cyprus Pounds each.
Number of Shares
%
3.000.000
3.000.000
100%
100%
OPAP S.A.
Total
BOARD OF DIRECTORS
Name
Alexandris Efthimios
Karkasis Christos
Manoulodakis Manthos
Haralambidis Ioannis
Harmantas Glafkos
Name
Chairman
Member
Member
Member
Member
The company is represented through its Chairman Mr. Alexandris Efthimios and the General Manager of
the company Mr. Refenes Apostolos. The Board of Directors member tenure is in effect up to 31/12/2005.
The average number of personnel for the period 24/2/2004-31/12/2004 was 3 employees.
The summarized financial figures of the company for its first fiscal year-end 24/2/2004-31/12/2004 are
presented below:
BALANCE SHEET 2004
Total Fixed Assets
2004**
28
4.789
GRAND TOTAL ASSETS
4.817
Share Capital
5.172
4.763
Page 111
54
4.817
The summarized results of the company for its first fiscal year-end 24/2/2004-31/12/2004 are presented
below:
Turnover (Sales)
Gross Profit
2004**
-
(398)
(410)
The company’s prospects relate to the upgrade of existing games, the development of new ones and the
forwarding of know-how.
No agreements-co operations exist between OPAP S.A. and OPAP INTERNATIONAL LTD.
12.3.4. OPAP SERVICES S.A.
In July of 2004 OPAP S.A. established the subsidiary company in Greece under the company name OPAP
SERVICES S.A. Its objective is to exploit the Company’s sales network potential and in general the sports
sector (provision of services and organization of athletic and cultural oriented activities, ticket issuing and
trade for athletic, cultural and other recreational activities, formation of a uniform corporate image
regarding the points of sale, setting up exemplary agencies etc).
The company’s registered address is 25th, Panepistimiou Str., in Athens. The company’s scope, in
compliance to its statute is the following:
a) The provision of services and the organization of athletic and cultural oriented activities, including the
necessary tourist activities and manifestations in addition to the provision of relevant services.
b) The issuance, handling-trade of tickets for athletic, cultural and other recreational activities.
c) The development and construction of athletic establishments and infrastructures in addition to their
general exploitation.
d) The formation of a uniform corporate image regarding the agencies of OPAP S.A. and the creation of
exemplary agencies, after its decision, with the suitable technological equipment and the general
improvement of the agency’s infrastructure.
e) The creation, improvement, development, exploitation and management of network point of sales.
f) The exploitation of the current and future infrastructure of OPAP S.A., as well as the points of sale pf
services and products, sale of athletic and other relevant items in addition to the provision of financial and
other services.
g) The research, promotion and in general exploitation and utilization of the athletic market subject as well
as the working out of all economic, feasibility technical and commercial studies.
h) The exploitation, management and sale of rights of athletic societe anonymes, associations and any
other athletic organization and their utilization in general in any appropriate way.
The company’s share capital amounts to € 20.000.000,00 and is divided into 20.000.000 shares of € 1 face
value each.
Page 112
Number of Shares
%
19.999.999
1
20.000.000
99,99999%
0,00001%
100%
OPAP S.A.
Vougidis Antonios
Total
BOARD OF DIRECTORS
Name
Liapis Serafim
Bititsios Theodoros
Manousos Konstantinos
Avellas Dimitrios
Alexopoulos Panagiotis
Vougidis Antonios
Balasis Ilias
Razis Dimitrios
Psarrakis Christos
Name
Chairman
Vice Chairman
Managing Director
Member
Member
Member
Member
Member
Member
The company is represented through its managing Director, Mr. Manousos Konstantinos according to the
decision of the Board of Directors dated 3/9/2004. The Board of Directors tenure ends on 30/6/2006.
The average personnel number at 31/12/2004 amounted to 2 employees.
The company is currently going though its first over twelve months fiscal year-end and will issue its
financial statements at 31.12.2005.
The company’s prospects, relating to the commercial activity of the parent Company’s agencies, are
significant especially through the formation of a uniform corporate image upon them given the fact that
the Company’s agency network can become the biggest commercial network in the whole country.
The most significant agreement with the parent Company OPAP S.A. refers to the agreement for the
technological equipment and the improvement of the agencies infrastructure through the formulation of a
uniform corporate image. This cooperation is financed with 1% of the Company’s revenues from the KINO
game as appointed by the Ministerial Decision F’ 55625/17.2.03 (Official legal Notice Issue
1913/Β/23.12.2003).
12.4. Affiliated Companies
12.4.1. GLORY TECHNOLOGY LIMITED
The company was established in Cyprus on December 5th, 2002 as a limited liability company according to
Company Law, Ch. 113. Its registered office is in Nicosia of Cyprus, 25 Filippou Str., St. Dometios, Glory
Hall.
The company’s master company is Glory I.Technology Holdings Ltd and its final master company is
Quantum Corporation Ltd.
Based on an agreement (date of in effect agreement October 1st, 2003) OPAP S.A. acquired 20% of the
company’s share capital at the price of € 10.000.000. The acquisition was done through the Company’s
own capital and the price value was based upon the valuation of the company by independent certified
companies. The valuations were based upon the multiples valuation method of the Cyprus market,
multiples of international comparable companies, multiples of international acquisitions related to the
sector in addition to the strategic value designation method through discounted cash flows. Based upon
the above four valuation methods, a price range was formulated for each company and the final price
resulted from the total weighted average of each company’s average price.
Page 113
The company’s main activity is the provision of computer information services and the planning, organizing
and development of high technology systems in the C.I.S sector. The company specializes in the area of
sports fixed odd betting games in Cyprus and it is the only Cypriot company that has been inspected and
has secured the approval, from the Finance Minister of the Cyprus Republic on 3/11/2003, for the use of a
complete computerized solution on the area of FIX ODDS games in the Cyprus Republic.
The company also provides software and equipment (terminal devices, central management system etc)
for the conduct of on-line lottery games.
The company’s share capital amounts to 20.000 Cyprus Pounds, that is € 34.210,26 and is divided into
20.000 ordinary shares, of 1 Cyprus Pound face value, that is € 1,71 each.
Number of Shares
%
16.000
4.000
20.000
80%
20%
100%
Glory I. Technology Holdings Ltd
OPAP S.A.
Total
BOARD OF DIRECTORS
Name
Nasos Ktoridis
Andreas Efthivoulou
Andreas Dimitriou
Georgios Killas
Koulosousas Dimitrios
Position
Executive Chairman
Executive Vice Chairman
Member
Member
Member
The company is represented through its Board of Directors. Specifically at the company’s General
Assembly of the shareholders, 1/3 of the members of the Board resign with the right to be re-elected. The
members that resign are the ones with the longest period of service.
The company’s personnel consists of 10 permanent and 3 temporary employees.
The summarized financial figures of the company for the first over twelve months period fiscal year-end
2/12/2002-31/12/2003 and fiscal year-end 2004 are presented below:
BALANCE SHEET 2003-2004
2003**
Total Fixed Assets
80
2004***
565
0
2.180
GRAND TOTAL ASSETS
80
2.745
Share Capital
34
34
(33)
1.659
113
1.052
80
2.745
The summarized results of the company for the first over twelve months fiscal year-end 2/12/200231/12/2003 and fiscal year-end 2004 are presented below:
Page 114
2003**
Turnover (Sales)
2004***
64
Managerial Expenses
3.014
(1.183)
(131)
(67)
1.721
(67)
1.721
The company’s prospects are considered positive given the approval from the Cypriot authorities regarding
the computerized betting game system and its successful application in Cyprus. In addition to the above
the delivery of the computerized system for several types of games in Uzbekistan has been concluded.
This development gives to the company the opportunity to gradually participate in the international lottery
game service sector and expand its turnover (sales) by providing complete computerized solutions and
equipment. Based on the company’s business plan it is anticipated that relevant contracts will exist within
the current fiscal year-end.
No agreements-co operations exist between OPAP S.A. and GLORY TECHNOLOGY LIMITED.
12.5. Companies that the Board of Directors Members of OPAP S.A. participate in.
The Company’s Board of Directors Members state that they do not participate in the Board of Directors
Management or Share Capital of other companies, nor do they exercise any managerial influence, nor do
they have any relation with other companies.
12.6. Subsidiaries of Subsidiary or Affiliated Companies
This section depicts the investments (participations) of subsidiary OPAP GLORY LTD.
OPAP GLORY LTD participates in all of the companies listed below as a sole shareholder by 100%.
The Board of Directors of each of the companies depicted below have the same members listed in the
following table:
BOARD OF DIRECTORS
Name
Harmantas Glafkos
Efthivoulou Andreas
Kimonos Kimonas
Zahariadis Leandros
Position
Chairman
Member
Member
Secretary
The companies listed below are represented fro the Chairman of the Board, Mr. Harmantas Glafkos.
In addition to the above all the companies depicted below have the same registered office address which
is in Nicosia of Cyprus, 25th Filippou Str., St. Dometios.
It is pointed out that no agreements-co operations exist between OPAP S.A. and the companies depicted
below.
Last, it should be noted that the financial figures presented below have been converted into € with the
exchange rate (average price) at 31.12.2003 € 1: 0,58462 Cyprus Pounds.
The subsidiary companies of OPAP GLORY LTD are briefly presented below:
12.6.1. COMPANY NAME
Glory Betting Sports (Principal Cyprus) Ltd
YEAR OF ESTABLISHMENT
2000
Page 115
AREA OF OPERATION
FINANCIAL DATA YEAR-END 2004 (€ in
thousands)
SHARE CAPITAL
TOTAL SHAREHOLDERS EQUITY
PROFIT BEFORE TAX
183
Based on an agreement the company’s turnover (sales) is
assigned to OPAP GLORY LTD
-
PROFIT AFTER TAX
-
Glory Betting Sports (Cyprus) Ltd
AREA OF OPERATION
2000
Collective payout receiver of Glory Betting Sports (Principal
Cyprus) Ltd
TURNOVER (SALES)
thousands)
SHARE CAPITAL
171
34
PROFIT BEFORE TAX
46
-
PROFIT AFTER TAX
-
Cashgrove Betting Sports (Principal Cyprus) Ltd
AREA OF OPERATION
2000
thousands)
SHARE CAPITAL
171
TURNOVER (SALES)
PROFIT BEFORE TAX
177
-
PROFIT AFTER TAX
-
Cashgrove Betting Sports (Cyprus) Ltd
AREA OF OPERATION
2000
Collective payout receiver of Cashgrove Betting Sports
(Principal Cyprus) Ltd
TURNOVER (SALES)
thousands)
SHARE CAPITAL
34
PROFIT BEFORE TAX
41
-
PROFIT AFTER TAX
-
Forza Betting Sports (Principal Cyprus) Ltd
AREA OF OPERATION
2000
TURNOVER (SALES)
Page 116
thousands)
SHARE CAPITAL
171
PROFIT BEFORE TAX
210
-
PROFIT AFTER TAX
-
Forza Betting Sports (Cyprus) Ltd
AREA OF OPERATION
1995
Collective payout receiver of Forza Betting Sports (Principal
Cyprus) Ltd
TURNOVER (SALES)
thousands)
SHARE CAPITAL
9
PROFIT BEFORE TAX
47
-
PROFIT AFTER TAX
-
TURNOVER (SALES)
AREA OF OPERATION
thousands)
SHARE CAPITAL
Andromeda Betting Sports (Principal Cyprus) Ltd
(former Ecco Betting Sports (Principal Cyprus) Ltd)
1999
171
PROFIT BEFORE TAX
215
-
PROFIT AFTER TAX
-
TURNOVER (SALES)
AREA OF OPERATION
thousands)
SHARE CAPITAL
Andromeda Betting Sports (Cyprus) Ltd (former Ecco
Betting Sports (Cyprus) Ltd)
1995
Collective payout receiver of Andromeda Betting Sports
(Principal Cyprus) Ltd
34
PROFIT BEFORE TAX
247
-
PROFIT AFTER TAX
-
Apollo Betting Sports (Principal Cyprus) Ltd
TURNOVER (SALES)
AREA OF OPERATION
thousands)
1999
Page 117
SHARE CAPITAL
171
PROFIT BEFORE TAX
200
-
PROFIT AFTER TAX
-
Apollo Betting Sports (Cyprus) Ltd
AREA OF OPERATION
1995
Collective payout receiver of Apollo Betting Sports (Principal
Cyprus) Ltd
TURNOVER (SALES)
thousands)
SHARE CAPITAL
9
PROFIT BEFORE TAX
48
-
PROFIT AFTER TAX
-
Athina Betting Sports (Principal Cyprus) Ltd
AREA OF OPERATION
thousands)
SHARE CAPITAL
2000
TURNOVER (SALES)
171
PROFIT BEFORE TAX
171
-
PROFIT AFTER TAX
-
Athina Betting Sports (Cyprus) Ltd
AREA OF OPERATION
2000
Collective payout receiver of Athina Betting Sports (Principal
Cyprus) Ltd
TURNOVER (SALES)
thousands)
SHARE CAPITAL
34
PROFIT BEFORE TAX
34
-
PROFIT AFTER TAX
-
Thiseas Betting Sports (Principal Cyprus) Ltd
AREA OF OPERATION
thousands)
2000
TURNOVER (SALES)
Page 118
SHARE CAPITAL
171
PROFIT BEFORE TAX
178
-
PROFIT AFTER TAX
-
Thiseas Betting Sports (Cyprus) Ltd
AREA OF OPERATION
2000
Collective payout receiver of Thiseas Betting Sports (Principal
Cyprus) Ltd
TURNOVER (SALES)
thousands)
SHARE CAPITAL
34
PROFIT BEFORE TAX
41
-
PROFIT AFTER TAX
-
Aris Betting Sports (Principal Cyprus) Ltd
AREA OF OPERATION
thousands)
SHARE CAPITAL
2000
TURNOVER (SALES)
171
PROFIT BEFORE TAX
174
-
PROFIT AFTER TAX
-
Aris Betting Sports (Cyprus) Ltd
AREA OF OPERATION
2000
Collective payout receiver of Aris Betting Sports (Principal
Cyprus) Ltd
TURNOVER (SALES)
thousands)
SHARE CAPITAL
9
PROFIT BEFORE TAX
11
-
PROFIT AFTER TAX
-
Hera Betting Sports (Cyprus) Ltd
TURNOVER (SALES)
AREA OF OPERATION
2000
A petition has been submitted in order to secure an operation license
as a collective payout company
Page 119
thousands)
SHARE CAPITAL
34
PROFIT BEFORE TAX
34
-
PROFIT AFTER TAX
-
Hera Betting Sports (Principal Cyprus) Ltd
TURNOVER (SALES)
AREA OF OPERATION
thousands)
SHARE CAPITAL
2000
171
PROFIT BEFORE TAX
171
-
PROFIT AFTER TAX
-
Hermes Betting Sports (Cyprus) Ltd
TURNOVER (SALES)
AREA OF OPERATION
thousands)
SHARE CAPITAL
2000
34
PROFIT BEFORE TAX
34
-
PROFIT AFTER TAX
-
Hermes Betting Sports (Principal Cyprus) Ltd
TURNOVER (SALES)
AREA OF OPERATION
thousands)
SHARE CAPITAL
2000
171
PROFIT BEFORE TAX
171
-
PROFIT AFTER TAX
-
Hercules Betting Sports (Cyprus) Ltd
TURNOVER (SALES)
AREA OF OPERATION
2000
Page 120
thousands)
SHARE CAPITAL
34
PROFIT BEFORE TAX
34
-
PROFIT AFTER TAX
-
Hercules Betting Sports (Principal Cyprus) Ltd
TURNOVER (SALES)
AREA OF OPERATION
thousands)
SHARE CAPITAL
2000
171
PROFIT BEFORE TAX
171
-
PROFIT AFTER TAX
-
Poseidon Betting Sports (Cyprus) Ltd
TURNOVER (SALES)
AREA OF OPERATION
thousands)
SHARE CAPITAL
2000
34
PROFIT BEFORE TAX
34
-
PROFIT AFTER TAX
-
Poseidon Betting Sports (Principal Cyprus) Ltd
TURNOVER (SALES)
AREA OF OPERATION
thousands)
SHARE CAPITAL
2000
171
PROFIT BEFORE TAX
171
-
PROFIT AFTER TAX
-
TURNOVER (SALES)
AREA OF OPERATION
Artemis Betting Sports (Principal Cyprus) Ltd (former
Glory Betting Sports (Overseas) Ltd)
1996
Page 121
thousands)
SHARE CAPITAL
34
PROFIT BEFORE TAX
34
-
PROFIT AFTER TAX
-
TURNOVER (SALES)
AREA OF OPERATION
thousands)
SHARE CAPITAL
Artemis Betting Sports (Cyprus) Ltd (former Glory
Betting Ltd)
2000
2
PROFIT BEFORE TAX
2
-
PROFIT AFTER TAX
-
TURNOVER (SALES)
Page 122
12.7. Inter-Group Transactions
Transaction Report of OPAP S.A. with affiliated companies, based upon the C.L. 2190/1920,
article 42e, par. 5., in effect according to article 2 par. 3 of L. 3016/2002.
OPAP S.A. performs two types of inter-group transactions.
The first is related to OPAP CYPRUS LTD from which the Company receives a fixed charge revenue of 10%
on the subsidiary’s turnover (sales), according to the cross border agreement. In addition to the above
during fiscal year-end 2004 transactions include an amount which refers to the sale of paper from the
parent Company to the subsidiary.
The second is related to OPAP SERVICES S.A. and constitutes an expense for OPAP S.A. More specifically
according to the B.D. decision 29/28-7-04 (Subject 25th), the Company approved the appropriation of 1%
of the KINO sales to the subsidiary company with the objective to improve the technological equipment
and infrastructure of the Company’s agencies.
The tables below depict the analysis of the above inter-group sales and balances at December 31st, 2004.
Between OPAP S.A. and the subsidiary companies, based on the financials of fiscal year 2004, the
following sale transactions and inter-group balances have been realized at 31.12.2004:
INTER-GROUP SALES 31.12.2004*
SALES TO COMPANY (€ in thousands)*
OPAP
SALES FROM COMPANY
OPAP
S.A.
OPAP S.A.
OPAP GLORY LIMITED
GLORY
TECHNOLOGY
LIMITED
OPAP
(CYPRUS)
LIMITED
OPAP
SERVICES
S.A.
OPAP
INTERNATIO
NAL LTD
Total
LIMITED
GLORY
TECHNOLO
GY LIMITED
0
0
9.855**
0
0
9.855
0
0
0
0
0
0
0
0
780
0
0
0
0
0
GLORY
0
0
780
0
0
0
OPAP SERVICES S.A.
0
0
0
0
OPAP
LTD
0
0
0
0
0
0
780
0
9.855
0
Total
INTERNATIONAL
0
0
10.635
** The amount of € 9.855 thousand relates to other operating results amounting to € 9.774 thousand.
These operating results refer to the 10% revenues from the turnover (sales). The remaining € 81
thousand refer to the sale of paper.
Page 123
INTER-GROUP BALANCE 31.12.2004* (€ in thousands)*
CREDIT BALANCE
OPAP
DEBIT BALANCE
OPAP S.A.
OPAP S.A.
OPAP
(CYPRUS)
LIMITED
OPAP
SERVI
CES
S.A.
OPAP
INTERN
ATIONA
L LTD
Total
LIMITED
GLORY
TECHNOLOGY
LIMITED
0
0
0
0
0
0
87
0
0
0
87
0
0
0
0
0
5.534
0
8.876
GLORY
OPAP GLORY LIMITED
0
0
0
5.534
0
0
OPAP SERVICES S.A.
8.876
0
0
0
0
0
0
0
0
14.410
0
87
0
0
Total
0
0
0
Inter-Group transactions are ruled from the market’s standards and common conditions.
Page 124
14.497
13. LONG-TERM GOALS AND COMPANY PROSPECTS
The Company’s objective has always been to create a surplus value for its shareholders and to that
objective it has set its strategy in order to preserve its leading position in the Greek gaming sector and at
the same time increase its market share.
This strategy focuses to the preservation of the Company’s existing clientele within a socially accepted
framework taking into consideration the peculiarities, the intense competition and the social sensitivity that
governs the sector in which the Company operates in.
The basic axes of the above strategy are:
Support of existing games – introduction of new ones
The Company continuously studies the international trends in addition to the needs of the Greek gaming
market and invests in the development of new games and the re-engineering of its existing traditional
games.
After the successful conclusion of the gradual introduction of KINO to all of its agencies in Greece and
Cyprus, the Company’s immediate objective is to support KINO - by exploiting and distinguishing its
characteristics in the best possible way – so as to not only maintain but also increase its significant
contribution to the Company’s total revenue. Towards this direction the Company studies better ways for
the game’s conduct and development.
The Company plans the reformation of existing games, in order for them to become more attractive and
competitive.
The Company also plans the introduction of the BINGO game. This game is conducted in a different way
compared to today’s existing games. The exact timing of its introduction in addition to the implementation
of the existing game’s formation will be determined by valuating the total course and performance of all
existing games.
At this time the Company has not decided yet upon the introduction of the numerical lottery game SUPER
4 in addition to the games PRO-BASKET and PRO-SPOR for which the exclusive conduct, management,
organization and operation right has been granted to OPAP S.A. according to L.3057/2002.
Moreover the Company is looking into possible opportunities, within the Greek gaming market, do not fall
under the Concession Contract.
Reorganization and Exploitation of the Company’s point of sale Network.
OPAP S.A. is currently under a reorganization procedure regarding its point of sale network in order for it
to be able to operate in a more efficient way and exploit possible additional lucrative opportunities.
For this reason OPAP S.A. established its subsidiary company “OPAP SERVICES S.A.” which receives 1% of
KINO revenues on a yearly basis.
OPAP S.A. through its subsidiary company intends to synchronize its agencies, develop and promote a
uniform company image an exploit the ON LINE network through the provision of more services to the
public’s satisfaction.
The Company’s agency network, based on its size and presentation all around the country, constitutes a
unique and effective, from a cost point of view, distribution mean, whose dynamics will continue to be
exploited further by the Company with the intend to strengthen its relations with the players. OPAP S.A.
also intends to materialize a possible potential of expansion in the retail product distribution, not tangible
to the gaming sector (for example sale of tickets regarding cultural or athletic events) and to the provision
of additional commercial services (for example, collection of public utility services and telephone bills).
Technological Updating - new potential and prospects
The Company has already scheduled the necessary procedures for a complete technological update
through the provision of a new and far more advanced and up to date gaming conduct system, with the
objective to optimize its infrastructure. Therefore the Company will have the capability to achieve in a
more effective way:
Page 125
9
A significant quality improvement to the services rendered to players (speed, easiness, alternative
ways of payment etc.)
9
The provision, if and when allowed by legislation, of new alternative ways of game participation
(through internet, mobile phones, interactive television)
9
The introduction of new up to date game patterns and the capability to adapt to contemporary
promotional activities and practices.
9
Provision of commercial services to the public (bill and ticket payments etc.)
Page 126
14. DIVIDEND POLICY
14.1. Dividend policy
During the three year-end period of 2002,20023 and 2004 the Company’s dividend policy was formulated
as follows:
(€ in thousands)*
Differences
Less: Statutory Legal Reserve
Differences & Statutory Legal Reserve
Total Dividend
% on Profit after Income Tax & Other Gaming Payouts non
Differences & Statutory Legal Reserve
2002
2003
2004
199.552
234.471
473.223
10.299
8.747
0
189.253
225.724
473.223
213.730
232.870
472.120
113%
103%
99,8%
According to the Greek Legislation, the minimum dividend distributed on a yearly basis to the shareholders
of the Company can not be less than 35% of the Company’s profits before taxes, after the subtraction of
encumbrances, the statutory legal reserve and the incorporated tax, or the 6% of the paid up share
capital, whichever amount is greater.
Based on the article 27 of L.2843/2000 OPAP S.A., ceased grants and decided upon the distribution of a
dividend amounting to € 0,60 per share for fiscal year-end 2001. It should be noted that on September
25th, 2001 with he board of Director’s decisdion the Company had already distributed an interim dividend
of € 0,17 per share. Based on the above dividend policy during fiscal year-end 2001, 85% of the
Company’s net profits after the formation of the statutory legal reserve was distributed to the
shareholders.
The Company, for the fiscal year-end of 2002, decided upon the distribution of a dividend amounting to €
0,67 per share setting the dividend payment date on July 15th, 2003, as decided from the 3rd Yearly
Ordinary General Assembly of the Company’s Shareholders dated June 6th, 2003. It should be noted that
on January 15th, 2003, based on the Board of Director’s decision on November 17th, 2002, the Company
had already distributed an interim dividend of € 0,27 per share. Based on the above dividend policy during
fiscal year-end 2002, 113% of the Company’s net profits after the formation of the statutory legal reserve
(with the distribution of prior year reserves) was distributed to the shareholders.
The Company, for the fiscal year-end of 2003, decided upon the distribution of a dividend amounting to €
0,73 per share setting the dividend payment date on June 6th, 2004, as decided from the 4th Yearly
Ordinary General Assembly of the Company’s Shareholders dated May 20th, 2004. It should be noted that
based on the Board of Director’s decision on October 10th, 2003, the Company distributed an interim
dividend of € 0,30 per share for fiscal year-end 2003, amounting to € 95.700 thousand. Based on the
above dividend policy during fiscal year-end 2003, 103% of the Company’s net profits after the formation
of the statutory legal reserve due to the prior year distributed profits was distributed to the shareholders.
The Company’s Board of Directors, decided to propose at the Ordinary General Assembly of the
Shareholders the distribution of a dividend amounting to € 1,48 per share. The proposed total dividend
amounts to € 472.120.000. It should be noted that based on the Board of Director’s decision on November
10th, 2004, the Company distributed an interim dividend of € 0,55 per share for fiscal year-end 2004,
amounting to € 175.450 thousand which is subject the approval of the Ordinary General Assembly of the
Shareholders. Based on the above dividend policy during fiscal year-end 2004, approximately 99,8% of
the Company’s period net profits will be distributed to the shareholders.
It should be noted that based upon the article 27, par. 4 of L.2843/2000 (Official Legal Notice Issue
219/12.10.2000), the dividend amount entitled to the Hellenic Republic from its participation to the
Company’s share capital is distributed for the reinforcement of athletic and cultural activities.
Page 127
14.2. Dividend Taxation
According to the in effect legislation (L. 2238/1994, article 109) the companies that have their shares
listed in the Athens Exchange, excluding banks, are charges with a tax of 35% on the taxable profits
before any appropriation.
Therefore, the dividends are distributed from the already taxed, to the legal entity, profits and
consequently the shareholder has no tax obligation on the dividend amount collected.
The date of the Balance Sheet approval from the General Assembly of the Shareholders of the Company is
accounted as the time that income from dividends is acquired.
Page 128
15. FINANCIAL STATEMENTS OF THE COMPANY FOR FISCAL YEAR-END 2003-2004
BASED ON THE INTERNATIONAL ACCOUNTING STANDARDS
Income Statements
For the Twelve-month Periods Ended December 31, 2004, and 2003
(Thousands of Euro, except for per share amounts)
Notes
2004
2003
Revenue
2
3,067,915
2,264,043
Cost of sales
3
(2,369,443)
(1,747,699)
Gross profit
Other operating income
2
698,472
516,344
13,456
5,023
Distribution costs
(61,767)
(47,265)
Administrative expenses
(25,106)
(20,929)
(1,928)
(3,858)
Other operating expenses
Provisions for other operating loss
-
(82,531)
Income from provisions
4
Provisions for unfunded liabilities
28
0,00
Income from subsidiaries
5
6,314
Income from associates
5
338
Amortization of goodwill
14
(2,422)
Profit from operations
Net financing results
6
Profit before tax
Tax expense
8
Deferred taxes
8,24
Net profit for the period
Basic Earnings per Share
10
148,011
(3,566)
728
(7)
(606)
775,368
363,332
6,578
3,743
781,946
367,075
(263,236)
(146,451)
(13,077)
14,477
505,633
235,101
1.59
0.74
Page 129
OPAP S.A.
Balance Sheets
As at December 31, 2004, and 2003
(Thousands of Euro)
Notes
2004
2003
ASSETS
Current assets
Cash and cash equivalents
383,553
286,005
21
Inventories
18
482
541
Trade receivables
19
36,445
41,932
Other current assets
20
226,974
134,400
647,454
462,879
Total current assets
Non-current assets
Intangible assets
13
244,609
261,074
Property, plant and equipment
12
38,609
23,987
Goodwill
14
21,196
23,619
Investments in subsidiaries
15
35,600
4,114
Investments in associates
16
338
0
Other non-current assets
17
11,519
10,558
Deferred tax assets
24
6,538
19,614
358,409
342,965
1,005,863
805,844
Total non-current assets
TOTAL ASSETS
LIABILITIES & SHAREHOLDERS’ EQUITY
Current liabilities
Borrowings
25
21,574
36,762
Trade and other payables
27
115,249
95,855
336,457
166,556
4,230
1,481
477,510
300,654
Taxes payable
Accrued liabilities
Total current liabilities
Non - current liabilities
Borrowings
25
25,345
46,920
Employee benefit plans
28
23,369
23,788
Provisions
4,29
Other non-current liabilities
26
Total non current liabilities
148,012
5,165
5,010
53,879
223,729
Shareholders’ equity
Page 130
Issued capital
22
95,700
95,700
Reserves
23
43,060
43,060
39,044
5,531
296,670
137,170
474,474
281,461
1,005,863
805,844
Retained earnings
Dividends proposed
11
Total shareholders’ equity
TOTAL
LIABILITIES
EQUITY
&
SH,
FINANCIAL STATEMENTS
AS AT DECEMBER 2004 and 2003
(ACCORDING TO INTERNATIONAL FINANCIAL REPORTING STANDARDS)
REPORT OF THE AUDITORS
To the board of directors and shareholders
of OPAP S.A.
We have audited the accompanying balance sheet of OPAP S.A. as of December 31, 2004, the related
income statement and statement of changes in net equity for the year ended December 31, 2004 and the
related cash flow statement for the year ended December 31, 2004, all prepared in accordance with
International Financial Reporting Standards. These financial statements are the responsibility of the
company’s management. Our responsibility is to express an opinion on these financial statements based
on our audit.
We conducted our audit in accordance with standards established by the Greek Institute of Chartered
Accountants, which are in compliance with International Auditing Standards. Those standards require that
we plan and perform the audit to obtain a reasonable assurance about whether the financial statements
are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion the financial statements give true and fair view of the financial position of the Company as
of December 31, 2004 and the results of its operations and its cash flows for the year ended December 31
2004 in accordance with International Financial Reporting Standards.
Page 131
OPAP S.A.
Cash Flow Statements
(Thousands of Euro)
Notes
2004
2003
OPERATING ACTIVITIES
Cash generated from operations
30
642,241
427,199
(2,526)
(4,186)
Income taxes paid
(157,522)
(109,477)
Cash flow from operating activities
482,193
313,536
Interest paid
INVESTING ACTIVITIES
Proceeds from sale of plant and equipment
118
Guaranties
(21)
(1,155)
(422)
-
(10,000)
(25,172)
(16,294)
Purchase of plant and equipment
(15,490)
(13,828)
Purchase of intangible assets
(1,239)
(1,737)
9,102
7,928
(33,857)
(34,353)
(36,762)
(39,036)
(314,026)
(306,973)
(350,788)
(346,009)
Net increase/decrease in cash and
cash equivalents
97,548
(66,826)
Cash
and
cash
beginning of year
286,005
359,121
Loans granted to personnel
Acquisition of associates
Acquisition
acquired
of
subsidiary
net
of
cash
Interest received
Cash flow used in investing activities
FINANCING ACTIVITIES
Proceeds
from
borrowings
non-current
Dividends paid
Cash flow used in financing activities
equivalents
at
Cash contributed to subsidiary
Cash and cash equivalents at end of
year
(6,290)
383,553
286,005
Page 132
OPAP S.A.
Statement of Changes in Net Equity
For the Twelve-month Periods Ended December 2004 and 2003
(Thousands of Euro)
Share
capital
Balance at December 31,
2002
95,700
Other
reserves
34,313
Dividends
Proposed
213,730
Tax correction
Restated balance
95,700
34,313
213,730
Retained
earnings
Total
12,578
356,321
(531)
(531)
12,047
355,790
235,101
235,101
Exchange differences
-
Dividends paid
(309,430)
Dividends proposed
232,870
Transfer to reserves
Balance at 31 December
2003
8,747
95,700
43,060
(232,870)
137,170
5,531
281,461
505,633
505,633
(312,620)
Dividends proposed
-
(8,747)
Dividends paid
(309,430)
(312,620)
472,120
(472,120)
0
296,670
39,044
474,474
Tranfer to reserves
2004
95,700
43,060
Page 133
OPAP S.A.
Notes to Financial Statements
General Information
OPAP S.A. was established as a private legal entity in 1958.
OPAP S.A. was reorganized as a société anonyme in 1999 and its accounting as such began in 2000.
The Company has the sole concession to operate and manage nine existing numerical lottery and sports
betting games as well as two new numerical lottery games, which it has yet to introduce. The Company
also holds the sole concession to operate and manage any new sports betting games in Greece as well as
a right of first refusal to operate and manage any new lottery games permitted by the Hellenic Republic.
The Company currently operates six numerical lottery games (Joker, Lotto, Proto, Extra 5, Super 3 and
Kino ) and three sports betting games (Stihima, Propo and Propo-goal). It has also designed two new
lottery games (Bingo, and Super 4). It distributes its games through an extensive on-line network of
approximately 5,588 dedicated agents.
The Company’s Reorganization
Until 1999, OPAP S.A. operated as a non-profit organization. The Company had the exclusive right to
operate numerical lottery and sports betting games. For the games operated, OPAP S.A. paid the Hellenic
Republic the total revenues from numerical lottery and sports betting games minus a specific percentage
retained to cover its operational expenses and implement its development plans.
At the time OPAP S.A. was reorganized into a société anonyme, a valuation committee was appointed,
under relevant Greek law, to revalue the organization’s assets and liabilities on the basis of their value.
This committee consisted of a chartered accountant, a chartered surveyor and an employee of the Ministry
of Commerce, which do not constitute a "professional valuer" within the meaning of International
Accounting Standards. A professional valuer may have made a different determination as to market value.
The difference between the fair market value and the historical value resulted in the initial share capital of
€29.347.000, with the sole shareholder being the Hellenic Republic.
The Company purchased from the Hellenic Republic the 20-year exclusive right to operate certain
numerical lottery and sports betting games for €322.817.000. Since the date of that agreement, the
Company no longer pays the Hellenic Republic a percentage of its revenue, and its relationship with the
Hellenic Republic has been that of a Company with its shareholder in accordance with Greek corporate
law.
As a non-profit organization, the Company was not subject to income taxation. Since its reorganization
into a société anonyme, it has been subject to income tax applicable to Greek corporations generally.
During 2000, however, its profit subject to tax was determined by deducting from its profits before tax
non-taxable amounts that included the amount of dividends paid by the Company to the Hellenic Republic.
A. Basis of preparation
The consolidated financial statements have been prepared in accordance with International Financial
Reporting Standards. The financial statements have been prepared using the historical cost convention,
except as disclosed in the accounting policies below.
B. Principal Accounting Policies
The significant accounting policies adopted in the preparation of these financial statements and in
determining the results for the year and the financial position are set out below:
(i) Investments in subsidiaries
The company’s investments in its subsidiaries are accounted for under the equity method of accounting.
Subsidiaries are companies in which OPAP directly or indirectly has an interest of more than one half of
the voting rights or otherwise the power to exercise control over their operations. The investments in
subsidiaries are carried on the balance sheet at cost, less goodwill, plus post acquisition changes in the
Company’s share of net assets of the subsidiary, less any impairment value. The statement of income
reflects the Company’s shares of the results of operations of the subsidiaries.
(i) Investments in associates
The company’s investments in its associates are accounted for under the equity method of accounting.
These are entities in which the Company has significant influence and which are neither a subsidiary nor a
Page 134
joint venture of the Company. The investments in associates are carried on the balance sheet at cost less
goodwill, plus post acquisition changes in the Company’s share of net assets of the associate, less any
impairment value. The statement of income reflects the Company’s shares of the results of operations of
the associates.
(iii) Revenues
Revenues from games are recognized upon the completion of games, typically immediately before the
announcement of the results of games, which occurs twice weekly. Revenues from sports betting games
that last longer than three or four days are recognized on a cash basis twice weekly.
Other categories of revenues are recognized under the following methods:
a) other revenues are recognized when the event has occurred; and
b) interest on short-term investments (typically 12 or less days) is recognized on a cash basis,
and at the balance sheet date on an accrual basis.
(iv) Borrowings
Loans are recorded as liabilities at the date funds are received. Loan issuance expenses are included in
results of operations. At subsequent balance sheet dates, loans are shown at their unpaid principal
amount. Interest expenses are recognized when paid and at the balance sheet date to the extent that
these expenses are accrued and unpaid. Loans are classified as long-term if they mature in more than
one year and short-term if they mature in one year or less.
(v) Retirement Costs
Pursuant to the collective bargaining agreement between the Company and its employees, the Company is
obliged to pay its employees retirement benefits following completion of the requisite service period. The
cost of these benefits, determined periodically on an actuarial basis, is recognized as an expense in the
year that the service was rendered. A portion of this benefit may be paid to an employee prior to his
retirement.
(vi) Property, Plant and Equipment
The cost of tangible assets acquired after January 1, 2000 is stated at cost.
The value of tangible assets as at December 31, 1999 was estimated by a valuation committee appointed
in accordance with relevant Greek corporate law. The revalued amounts were recognized in the balance
sheet as of that date, with the revaluation surplus reflected as a fair value revaluation reserve and
subsequently used for the formation of the Company’s initial share capital.
Depreciation is calculated using the straight-line method based on cost or revalued amount as follows:
Land
nil
Buildings
20 years
Plant & Machinery
5-7 years
Vehicles
6.5 years
Equipment
5 years
(vii) Intangible Assets and Goodwill
The 20-year concession granted by the Hellenic Republic to the Company to operate numerical lottery and
sports betting games has been stated at cost, which was determined by independent actuaries.
The cost of software acquired before December 31, 1999 has been stated at its revalued amount.
Software acquired after January 1, 2000 is stated at cost.
The value of software was estimated as at December 31, 1999 by the valuation committee referred to in
(vi) above. The revalued amounts were recognized in the balance sheet as of that date, with the
Page 135
revaluation surplus reflected as a fair value revaluation reserve and subsequently used for the formation of
the Company’s initial share capital.
Amortization is calculated using the straight-line method based on cost or revalued amount as follows:
Concession
20 years
Software
3 years
Goodwill is recorded as an intangible asset and is the surplus of the cost of acquisition over the fair value
of identifiable assets of a subsidiary, associate at the date of acquisition. Any goodwill of the acquired
company is recorded as asset of the company using the exchange rate on the date of the acquisition. It is
amortized to income through “Amortization of goodwill” using the straight-line method over a period of ten
years and Goodwill arising from the acquisition of associate and subsidiary entities is presented separately
in the balance sheet.
(viii) Inventories
Inventories are stated at the lower of cost and net realizable value. Cost is determined using the yearly
weighted average cost formula. The value of raw materials and consumables at December 31, 1999 was
determined by the valuation committee referred to in (vi) above.
(ix) Exchange Differences
At the balance sheet date, foreign currency monetary items are calculated using the relevant currency
exchange rate.
Non-monetary items are stated at historical cost, using the exchange rate at the date of the relevant
transaction.
Foreign currency transactions are recorded at the currency exchange rate prevailing on the date of the
transaction.
(x) Income Tax Expense
Income tax expense is calculated on taxable profits of the year using applicable tax rates. In 2000 and
prior years, taxable profits were calculated after deduction of income not subject to tax, principally
consisting of dividends payable to the Hellenic Republic.
For all deductible temporary differences that arise from the difference between the taxable base used for
the calculation of taxable income and the amount stated in financial statements, a deferred tax liability or
deferred tax asset is recognized. The principal temporary differences that arise are from the provisions for
employee retirement benefit plans and provision for other operating loss.
The tax rate that is used for the calculation of deferred tax is the same as the tax rate used for the
calculation of the Company’s tax liabilities at the balance sheet date.
(xi) Other Non-current Assets
Non-current assets are recorded at their historical cost, without any present value discount from the date
of their anticipated maturity or realization.
Warranty Deposits
Warranty deposits are placed on deposit with certain suppliers to secure the Group’s obligations to those
suppliers. Amounts remain as demands for their duration. Upon the maturity of these obligations, the
amounts on deposit may be applied against all or a portion of the outstanding obligations according to the
terms of the deposit, with any balance being returned to the Group.
Prepayments for Retirement Benefits
Page 136
Housing Loans to Personnel
In accordance with the parent Company’s collective bargaining agreement, eligible full-time employees are
entitled to housing loans. These loans have a term of 25 years with an initial two-year grace period on
repayments of principal and interest. Interest accrued at the rate of 2% in 2003, and 2002.
There are three types of housing loans:
Acquisition
Up to €32,281.73
Construction
Up to €16,140.86
Repair
Up to €8,070.43
(xii) Cash and Cash Equivalents
Cash and cash equivalents include cash in hand, cash in open bank accounts and short-term deposits.
(xiii) Provisions
Provisions are recognized and accounted for when the Group determines that an obligation (legal or
constructive) has arisen, it is probable that the Group will have to expend money or other resources to
satisfy the obligation and a reliable estimate can be made of the amount of the obligation.
Provisions are reconsidered at each balance sheet date so as to reflect the current estimate of the
obligation.
A provision is applied only to expenditures in respect of which the provision was originally recognized.
Provision for Doubtful Receivables
The Group establishes provisions for receivables equal to the amount of receivables from agents that
management of the Group estimates as doubtful. To determine the provisions necessary at a balance
sheet date, guarantees paid by agents are taken into consideration in accordance with regulations
governing the Company’s relationship with its agents. These guarantees are used to offset bad debts
from agents.
Management estimates that its provisions for credit risk are adequate due to its credit risk controls, the
large volume and disparate nature of its receivables and the real-time credit control of the Group's agents
through its on-line network.
(xiv) Use of estimates
The preparation of the financial statements in conformity with International Financial Reporting Standards
requires management to make estimates and assumptions that affect the amounts reported in the
financial statements and accompanying notes. Significant estimates include the estimated useful lives of
tangible and intangible assets and provisions for any potential losses. Actual results could differ from those
estimates.
(xv) Reclassifications
Certain prior year amounts have been reclassified to conform to current presentation.
Page 137
C. Notes to the Financial Statements
1. Segment Information
Business Segments For the Year Ended December, 2004
PROPO
LOTTO
PROPO
GOAL
PROTO
JOKER
STIHIMA
EXTRA 5
SUPER 3
ΚΙΝΟ
TOTAL
(Thousands of euro)
Revenues
78,608
55,583
1,664
43,586
250,272
1,601,339
32,752
116,543
887,568
3,067,915
Gross profit
28,762
25,517
558
14,346
89,469
308,062
9,530
34,413
187,815
698,472
7,257
5,131
154
4,024
23,104
147,829
3,023
10,759
81,937
283,218
16,590
11,730
351
9,199
52,817
337,947
6,912
24,595
187,313
647,454
23,847
16,861
505
13,223
75,921
485,776
9,935
35,354
269,250
930,672
Other
information
Tangible
and
Intangible
Assets
Current Assets
Segment Assets
Unallocated
Assets
TOTAL ASSETS
75,191
1,005,863
Segment
Liabilities
Unallocated
Liabilities
TOTAL
LIABILITIES
4,396
3,108
93
2,437
13,996
89,549
1,832
6,517
49,634
171,562
Additions
of
tangible
and
intangible assets
Depreciation and
amortization
428
303
9
238
1,365
8,732
179
635
4,840
16,729
734
519
16
407
2,338
14,951
305
1,088
8,287
28,645
359,827
531,389
Page 138
Business Segments For the Year Ended December 31, 2003
PROPO
LOTTO
JOKER
PROTO
PROPO
GOAL
Revenues
80,772
65,239
208,785
46,321
2,485
52,701
149,200
1,647,693
10,847
2,264,043
Gross profit
29,814
28,324
71,620
12,978
814
16,896
41,544
312,232
2,122
516,344
10,170
8,214
26,288
5,832
313
6,636
18,785
207,457
1,366
285,061
16,513
13,338
42,686
9,471
508
10,775
30,503
336,868
2,217
462,879
Segment
Assets
Unallocated
Assets
TOTAL ASSETS
26,683
21,552
68,974
15,303
821
17,411
49,288
544,325
3,583
747,940
Segment
Liabilities
Unallocated
Liabilities
TOTAL
LIABILITIES
6,637
Additions
of
tangible
and
intangible
assets
Depreciation
and
amortization
512
413
1,323
294
16
333
946
10,442
69
14,348
839
677
2,166
481
26
547
1,548
17,096
113
23,491
EXTRA 5
SUPER 3
STIHIMA
ΚΙΝΟ
(*)
TOTAL
(Thousands of euro)
Other
information
Tangible
and
Intangible
Assets
Current Assets
57,904
805,844
5,360
17,155
3,806
204
4,331
12,259
135,384
891
186,027
338,356
524,383
(*) Kino was introduced in November 2003 in selective areas (Crete and Larissa)
There are no sales transactions between business segments. Segment assets consist of property, plant
and equipment, intangible assets, inventories, trade and other receivables, cash and cash equivalents.
Unallocated assets principally consist of deferred tax and investments.
Segment liabilities comprise operating liabilities and exclude items such as taxation, employee benefit
plans and provisions.
A portion of cost of sales was allocated to business segments according to the revenues of each business
segment.
Page 139
Geographical Segments
Greece is the home country of the Company.
For the Year Ended December
31, 2004
Greece
Cyprus
Total
3,067,915
-
3,067,915
698,472
-
698,472
Revenues
Gross profit
In 2004 sales in Cyprus comes only from its subsidiary
For the Year Ended December
31, 2003
Greece
Cyprus
Total
2,230,631
33,412
2,264,043
500,576
15,768
516,344
Revenues
Gross profit
Revenues are based on the country in which the customer is located. There are no sales between the
geographical segments.
2. Revenues
The analysis of each category of revenues recognized during the period is as follows:
For
the
Years
December 31,
Ended
2004
2003
(Thousands of Euro)
Revenues from games
Total Revenues
3,067,915
2,264,043
13,456
5,023
3,081,371
2,269,066
Page 140
3. Cost of Sales
The analysis of cost of sales classified by nature of expense is as follows:
For
the
Years
December 31,
Ended
2004
2003
(Thousands of Euro)
Prize payouts to lottery and
betting winners
1,865,636
1,302,712
Lottery agents’ commissions
255,056
199,273
Betting Commissions
163,038
167,688
7,284
5,130
17,386
17,454
7,122
6,129
12,150
9,441
6,299
(*) 6,991
13,968
12,611
Depreciation
Amortization
Repairs
and
expenditures
maintenance
Outside Resourcing
Distributions
Professional
Association
to
Greek
Football
Staff cost
Retirement benefit costs
Other expenses
Provisions for bad debtors
Total cost of sales
926
1,069
15,345
16,638
5,233
2,563
2,369,443
1,747,699
*An amount of 1,082 has been reclassified from “Other expenses” to “Distributions to Greek Professional
Football Association”
Lottery Agents’ commissions are commissions accrued to the Company’s dedicated sales agents. They are
accounted at a fixed rate of 8% on revenues which are generated from Stihima and Super 3, 7% on the
revenues from Kino and 12% for the other games.
Betting commissions are paid to the operator of Stihima for the services that this entity provides in relation
to the operation of Stihima, which was introduced in 2000.
Distributions to the Greek Professional Football Association are related to the Propo and Propo-goal
games.
4. Income from Provisions
In the current period the company, based on the 953/2004 decision of the Athens Court, recognized in the
income statement an amount of €148,011,000 .The amount is the reverse of accumulated provision that
had been recognized by the company until December 31, 2003, based on the 2/21.3.2003 decision of the
Arbitration Court, according which the company should pay to INTRALOT S.A. an amount of € 36,900,000
for every year that it doesn’t include horserace and greyhound race betting as additional Stihima betting
events. Furthermore INTRALOT S.A. exercised its right to appeal against the Athens Court’s decision, by
applying to the supreme court (Arios Pagos) for the reversal of that decision.
5. Income from investments
The income from investments under equity method is as follow:
Page 141
OPAP LTD
OPAP GLORY LTD
GLORY TECHNOLOGY
OPAP
INTERNATI
ONAL
OPAP
SERVICES
TOTAL
(Thousands of Euro)
Profit (loss)
2,934
(918)
1,688
(408)
4,614
Interest in net equity
100%
90%
20%
100%
100%
Share
on
Profit(loss)
2,934
(826)
338
(408)
4,614
the
6. Net Financing Income
For the Years Ended December
31,
2004
2003
(Thousands of Euro)
Interest
expense
borrowings
for
Bank
(2,524)
(4,186)
8,735
7,798
Personnel loans
203
131
Other interest income
164
Total interest income
9,102
7,929
6,578
3,743
Interest income from
Bank deposits
Net Financing Income/Cost
The weighted average interest rate on the Group's borrowings was3,51% in 2004 ,and 3,74 in 2003. The
average interest rate earned on short-term bank deposits was 2,02%in 2004 and 2,36% in 2003.
7. Staff Costs
31,
2004
2003
(Thousands of Euro)
Employee remuneration
21,632
17,767
Social security costs
3,728
2,875
1,731
(*)2,521
Other remuneration
2,032
1,190
29,123
24,353
Total Staff Costs
(*)Current cost, the previous year cost is deducted from <<Provisions for unfunded liabilities(see also
note 28)
The average number of full-time employees was 246 in 2004 and 225 in 2003,. The average number of
part-time personnel was 380 in 2004 and 229 in 2003.
Page 142
7,910
6,652
8. Tax Expense
For the Years
December 31,
Ended
2004
2003
(Thousands of Euro)
Income tax expense
Deferred tax
Total Tax Expense
(263,236)
(146,451)
(13,077)
14,477
(276,313)
(131,974)
Income tax is calculated at 35%. The tax on the Company’s profit before tax amount differs from the
theoretical amount that would arise using the statutory tax rate applicable to the Company.
The charge for the year can be reconciled to the profit of the income statement as follows:
For the Years Ended December 31,
2004
2003
(Thousands of Euro except for percentages)
Profit before tax
Tax at the income tax rate 35%
Tax effect of that expenses are not
deductible in determining taxable profit
781,946
367,075
(273,681)
(128,476)
(2,632)
(3,464)
-
(34)
(276,313)
(131,974)
Additional income tax charges
Income Tax Expense
Prior to December 1999, the Company was not subject to income tax because it operated as a non-profit
organization.
9. Exchange Differences
The exchange differences that resulted during the year, along with the exchange differences from foreign
currency balances at the balance sheet date, are as follows:
31,
2004
2003
(Thousands of Euro)
Revenue
-
4,758
Cost of sales
-
(4,758)
Valuation of monetary items at
December 31
305
(827)
Total exchange differences
305
(827)
Distribution costs
The Company has no foreign currency risk management policy as the operations of Cyprus has sufficient
liquidity to accommodate its operating needs and therefore operations in Cyprus do not give rise to
currency exchange transactions that expose the Company to significant foreign currency risk.
10. Earnings Per Share
The calculation of earnings per share is as follows:
Page 143
2004
2003
Net profit attributable to shareholders (in thousands
of euros)
505,633
235,101
Weighted average number of ordinary shares in issue
319,000,000
319,000,000
1.59
0.74
Basic earnings per share
11. Dividends
Management intends to propose at the annual general meeting of 2005 a dividend in respect of 2004 of
€1.48 (0.73 in 2003) per share, amounting to a total dividend of €472,120,000 (232,870,000 in 2003)
which is shown stated in the Company’s Statement of Changes in Equity (distinguished from retained
earnings) less an interim dividend of € 175,450,000 (or €0.55 per share) which was distributed on
December 03, 2004 through a board decision of November 10, 2004. According to Law 2190/1920, the
minimum dividend distributed to shareholders must be at least 35% of net income.
12. Property, Plant and Equipment
Land &
Buildings
Plant &
Machinery
Vehicles &
Equipment
Total
(Thousands of Euro)
Year ended December 31, 2003
Opening
amount
net
book
Additions
5,444
10,141
1,933
17,518
2,861
7,434
2,317
12,612
Disposals cost
(522)
Depreciation disposals
Depreciation charge
(522)
(522)
(522)
171
4,635
1,338
6,144
Cost or Valuation
8,541
31,234
11,908
51,683
Accumulated
depreciation
(407)
(18,294)
(8,996)
(27,697)
8,134
12,940
2,912
23,986
At
December
2003
31,
Net Book Amount
Opening
amount
net
book
Additions
8,134
12,940
2,912
23,986
12,276
8,446
2,423
23,145
83
83
(1,247)
(8,439)
Disposals cost
Depreciation charge
At
December
2004
(1,059)
(6,133)
31,
Cost or Valuation
20,817
39,680
14,248
74,745
Accumulated
depreciation
(1,466)
(24,427)
(10,243)
(36,136)
Net Book Amount
19,351
15,253
4,005
38,609
Plant and machinery mainly includes equipment for lottery agents. All property, plant and equipment is
currently unencumbered.
Page 144
13.Intangible Assets
Software
Rights
Total
(Thousands of Euro)
Opening net book amount
2,292
274,394
276,686
Additions
1,737
-
1,737
Amortization charge
1,208
16,141
17,349
7,911
322,817
330,728
At December 31, 2003
Cost or Valuation
Accumulated amortization
5,090
64,564
69,654
2,821
258,253
261,074
2,821
258,253
261,074
Additions
1,239
-
1,239
Amortization charge
1,563
16,141
17,704
Cost or Valuation
9,150
322,817
331,967
6,653
80,705
87,358
2,497
242,112
244,609
Net Book Amount
Net Book Amount
Intangible assets are currently unencumbered.
Amortization of the 20-year concession is included in cost of sales, whereas amortization of software is
allocated among cost of sales (40%), administrative expenses (55%) and distribution costs (5%).
14.Goodwill
The analysis of goodwill aroused from the acquisition of <<Opap Glory ltd >> and <<Glory technology
ltd>> is as follows:
Opap Glory ltd
Glory Τechnology ltd
Total
(Thousands of Euro)
At December 31,2003
Additions
Amortization charge
Net Book Amount At December 31,
2003
14,231
9,993
24,224
(356)
(250)
(606)
13,875
9,743
23,618
-
-
-
Additions
Amortization charge
(1,423)
(999)
(2,422)
2004
12,452
8,744
21,196
15.Investments in subsidiaries
The Company’s subsidiaries that were fully consolidated under equity method in the accompanying
financial statements are as follows
Consolidated subsidiary
Ownership
Country of
Principal activities
Page 145
Interest
Incorporation
100%
Cyprus
OPAP GLORY LTD
90%
Cyprus
Sports betting company
OPAP INTERNATIONAL
100%
Cyprus
Holding Company
OPAP SERVICES
100%
Greece
Sports events- Promotion
OPAP (CYPRUS) LTD
Numerical lottery games
The effective date of first consolidation for both «OPAP (CYPRUS) LTD» and «OPAP GLORY LTD»
companies is October 1st ,2003 for «OPAP INTERNATIONAL» is February 24st 2004 and for «OPAP
SERVICES» is September 15th 2004.
Establishment of subsidiary Opap (Cyprus) ltd
The company has signed a new agreement for its operation in Cyprus effective January 1, 2003. According
to this agreement, a new company will be established in order to operate games in the Cypriot market.
Management fees will be paid to OPAP S.A. at a rate of 10% of the revenues from games in Cypriot
market, with the remaining amount after the deduction of all operating expenses being paid to Cypriot
governmental organizations. The cumulative management fees for the first two years of this agreement
will remain in the Cypriot company and will be used to finance its investments. The company were
established August 16th ,2003 , its operations started at October 1st ,2003. The net asset contributed by
company to subsidiary is as follow:
Net assets contributed
Non current assets
Current assets
Cash &cash equivalent
Less current creditors
(Thousands of Euro)
78
549
6,094
(5,311)
1,410
Opap (Cyprus) Ltd contributed € 97,738,400 (€ 13,824,000 in 4th Quarter 2003) of revenue and 3,346,000
(€160,000 in 4th Quarter 2003) of profit before tax.
Acquisition of Opap Glory ltd
In October 2003 the company acquired 90% of Opap Glory Ltd a Cypriot sports betting company, for
€16,000,000. After the allocation of purchase price to the identifiable assets and liabilities the residual
amount of €14,231,000 was attributed to Goodwill which will be amortized over ten years.
The analysis of the transaction is as follow:
Net assets acquired
Net assets acquired
(Thousands of Euro)
1,769
Goodwill
14,231
Total
16,000
Paid by cash
16,000
Less cash acquired
Net cash paid
815
15,185
Opap Glory Ltd contributed €11,555,000 (€4,055,000 in 4th Quarter 2003) of revenue and €918,100 of loss
before tax (€630,700 profit in 4th Quarter 2003).
Establishment of subsidiary Opap International ltd
The company has established in late February, 2004 as a 100% subsidiary company in Cyprus named
“OPAP INTERNATIONAL”. Its share capital amounts to 3,000,000 CYP. The company was established with
Page 146
a purpose of expanding to the international market. Opap International Ltd contributed nil of revenue and
€396,600 of loss before tax.
Establishment of subsidiary Opap Services S.A.
The company has established in early September, 2004 as a 100% subsidiary company in Greece named
“OPAP SERVICES”. Its share capital amounts to 20,000,000 Euros. The company was established with a
purpose of developing sport and promotion events.
Opap Services contributed nil of revenue and € 123,200 of loss before tax (after Inter-company
transactions elimination).
16. Investments in associates
In October 2003 the company acquired 20% of Glory Technology Ltd a Cypriot company, for €10 millions.
After the allocation of purchase price to the identifiable assets and liabilities the residual amount of €
9,993 was attributed to Goodwill which will be amortized over ten years.
The reconciliation of the balance is as follows:
(Thousands of Euro)
At December 31,2002
-
Cost of investment
10,000
Less Goodwill
(9,993)
Less share of post acquisition loss
(7)
2003
-
Plus share of post acquisition earnings
338
2004
338
The company’s interest in the associate Glory Technology ltd is as follows
Associate
Ownership
Interest
Country of
Incorporation
20%
Cyprus
Software services
Glory technology Ltd
17. Other Non-current Assets
As at December 31,
2004
2003
(Thousands of Euro)
Warranty deposits
Prepayments
benefits
of
824
retirement
804
6,099
5,273
Prepayments to assets suppliers
1,502
1,217
Housing loans to personnel
3,094
3,264
11,519
10,558
The current portion of Other Non-current Assets is included in other current assets and deferred expenses.
(See Note 20).
18. Inventories
Page 147
As at December 31,
2004
2003
(Thousands of Euro)
Raw materials
102
200
Consumable materials
380
341
Total inventories
482
541
Inventories consist mainly of paper and printing material that is used for the printing of lottery tickets.
19. Trade Receivables
The analysis of trade receivables is as follows:
As at December 31,
2004
2003
(Thousands of Euro)
Receivables from lottery agencies
28,754
32,692
Bad and doubtful debts
14,735
9,875
(10,879)
(6,145)
1,410
236
Less provisions for bad and doubtful debts
Prepayments to suppliers
Receivables from subsidiaries
Other receivables
Total Trade Receivables
-
505
2,425
4,769
36,445
41,932
Management considers that the Group's main credit risk consists of bad and doubtful debts of agents. As
at December 31, 2004 this debt amounted to € 14,735,000 (€9,875,000 in 2003). To cover this risk the
Group established a provision of € 10,879,000 (€6,145,000 in 2003). A collective warranty deposit fund
that jointly secures the agents’ obligations to the parent Company and Opap Ltd, amounting to €
5,003,000 at December 31, 2004, is also available to cover bad debts (€4,698,000 in 2003). See also
Note 25. Management considers these provisions to be adequate.
20. Other Current Assets and Deferred expenses
The analysis of Other Current Assets is as follows:
As at December 31,
2004
2003
(Thousands of Euro)
Amounts due from the operator of Stihima
65,975
42,558
Loans to personnel
129
125
Prepayments of retirement benefits
540
45
16,276
11,716
Deferred income tax expense
144,054
79,864
Total Other Current Assets
226,974
134,400
Other
Prepaid expenses
92
Amounts due from the operator of Stihima for the year ended at December 31, 2004 are calculated in
accordance with the terms of the contract with its operator. According to the contract if payments to the
winners of Stihima exceed the limit of 60% of total revenues deriving from the game, then the operator
pays to OPAP the exceeding amount
Housing loans to personnel are secured with mortgages on the property purchased.
Page 148
Prepaid expenses mainly consist of prepayments made to the Greek Football Association, and football
clubs for advertising and sponsoring services according to the terms of separate contracts signed with
each of those associations.
Deferred income tax refers to an advance payment of the parent company for the next year’s profit.
According to Greek tax law, companies are obliged to calculate an additional amount of 55% of the
current year’s income tax charge. On the balance sheet date an equal liability to the deferred income tax
is recognized. The amount of Deferred income tax is offset with the next year’s income tax.
21. Cash and Cash Equivalents
As at December 31,
2004
2003
(Thousands of Euro)
Cash in hand
364
356
Cash at bank
383,189
285,649
383,553
286,005
Total
cash
equivalents
and
cash
The average interest rate earned on bank deposits was 2,36% in 2004 and 3,36% in 2003. The average
duration of short-term bank deposits was 5 calendar days in 2004 and the 17 in 2003.
22. Share Capital
When the Company was organized as a societe anonyme in 1999, its articles of association provided that a
valuation committee should value its assets within one year. In accordance with that requirement, the
committee valued the Company’s assets at €33,778,000. Of that amount, €29,347,000 was capitalized
through the issuance of 1.0 million shares. The balance was applied to the revaluation reserve account
within shareholders’ equity.
On December 15, 2000, the ordinary shares of the Company were split to increase the number of shares
outstanding to 100 million. Consequently, the Company’s share capital was increased by €64,270,000 to
€93,617,000 through the issuance of 219,000,000 new shares. The €64,270,000 increase consisted of (a)
retained earnings, (b) an amount released from the revaluation reserve account, and (c) a portion of the
consideration for the concession (€29,347,000).
In 2001, the par value of the Company’s shares was increased from €0.29 to €0.30 through the
capitalization of untaxed reserves.
All the shares issued by the Company are ordinary shares. The total authorized number of ordinary shares
was 319 million at December 31, 2004 with a par value of €0.30 per share (€0.30 in 2003,). All issued
shares are fully paid.
There were no movements in the share capital of the company in either the 2004 or 2003 reporting
periods,
Page 149
23. Reserves
No changes have taken place during the year. The analysis of reserves is as follows:
Other
reserves
Statutory
reserves
2,815
23,153
Untaxed
reserves
Total
(Thousands of Euro)
-
8,747
8,345
34,313
-
8,747
Distribution to Shareholders
2,815
31,900
8,345
43,060
2,815
31,900
8,345
43,060
The nature and purpose of each reserve account within shareholders’ equity is as follows:
Other reserves reflect amounts deducted from the previous years' earnings.
available for distribution to shareholders.
After taxation they are
Statutory reserves reflect the addition of a minimum of 5% of the annual net profit of parent company
added each year, subject to a maximum balance of 1/3 of the outstanding share capital. This amount is
not available for distribution. After the allocation of net profits of 2003 this reserve has reached the
statutory amount and further addition is not obligatory.
Untaxed reserves are drawn from untaxed earnings. Any portion of this reserve distributed to
shareholders becomes subject to income tax. The intention of the Company is not to distribute these
reserves.
Page 150
24. Deferred Taxes
Deferred income tax assets and liabilities are offset when there is a legal right to set off current tax assets
against current tax liabilities and those assets and liabilities relate to the same tax authority.
The movements in deferred tax assets and liabilities are as follows:
Deferred (from
income tax
statement)
Deferred tax
asset
Deferred tax
liabilities
(Thousands of Euro)
Deferred tax assets, net, as at
December 31, 2002
-
5,137
Accrued expenses
(871)
Deferred retirement benefits costs
(net)
1,808
1,808
13,515
13,515
25
25
14,477
20,485
Deferred other operating loss
Deferred amortization costs
Total
Offset
Deferred income from provisions
Offset of defer tax Liability
(871)
(871)
(871)
December 31, 2003
Deferred depreciation costs
-
19,614
(167)
-
(167)
606
606
(13,515)
-
(13,515)
13,076
606
(13,682)
(13,682)
6,538
The rate used for the calculation of deferred taxes is 35.00%, which is the applicable corporate income tax
rate.
Deferred tax for other income from provisions is related to the reverse of provision for the dispute with the
operator of Stihima.
Retirement benefit costs are deducted in determining accounting profit as service is provided by the
employee. However, in determining taxable profit, these costs are deducted when retirement benefits are
paid by the Company. This difference results in the recording of deferred tax assets as economic benefits
will flow to the Company in the form of a deduction from taxable profits when retirement benefits are
paid.
Page 151
25. Borrowings
The Group’s outstanding loans have the following maturities:
As at December 31,
2004
2003
(Thousands of Euro)
Less than one year
21,574
36,762
One year to five years
25,345
46,920
-
-
46,919
83,682
More than five years
Total borrowings
The weighted average effective interest rates were , 3,51% at December 31, 2004, and 3.74% at
December 31, 2003. The Group’s loans are floating rate, consisting of a spread over six- or three-month
EURIBOR ranging from 0.45% to 0.95%, depending on the loan.
The repayment terms of the loans are the following:
Loan
Number of
installments
Installments
First
installment
(Thousands of Euro)
Loan of €29,347
200
Weekly
January 1, 2002
Loan of €29,347
11
Semi-annual
January 1, 2003
Loan of €44,021
9
Semi-annual
June 30, 2003
26. Other Liabilities – Non-current
As at December 31,
2004
2003
(Thousands of Euro)
Warranty
agents
deposits
from
Total Other Liabilities
lottery
5,165
5,010
5,165
5,010
Warranty deposits from lottery agents represent amounts placed on deposit to jointly secure obligations of
the agents.
The warranty deposits are repaid to agents only when they cease to act as agents.
Page 152
27. Trade and Other Payables – Current
As at December 31,
2004
2003
(Thousands of Euro)
Suppliers
41,970
33,417
Prize payouts to the lottery and
betting winners
56,741
54,263
1,149
2,556
15,389
5,618
115,249
95,854
Dividends payable
Other payables
Total trade and other payables current
28. Employee Benefit Plans
The company provides two define benefit plans. None of the subsidiaries provides any retirement plan.
The analysis of each scheme is as follow:
Retirement compensation plans
A lump sum benefit is payable on termination of service equal, for each year of service, to one-fourteenth
of the parent’s company employee's total compensation during the employee's last year of service plus a
proportion of overtime pay and of the allowance payable based on years of service. The liabilities for
these retirement benefits are unfunded, except to the extent the Company prepays retirement benefits to
each employee. See Notes C.16, C.19 and paragraph B(xi) under Accounting Policies. The Company
periodically employs outside actuaries for the purpose of determining its obligations under this plan.
On service rendered up to December 31, 2004, and 2003 the present value of retirement benefits, based
on benefits committed under the terms of the plan and using projected salary levels, is €20,910,850 and
€21,080,092 respectively.
An amount of €1,415,653 is the current cost of the period allocated to cost of sales, administrative and
distribution expenses proportionally, while the cost for 2003 was €2,163,945. An amount of €294,000
charged to “Expenses for unfunded pension liabilities” pertains to the liability up to December 31, 2002.
Benefits based on pension contract
The Company’s pension contract was amended on February 2003, with effect as of January 1, 2003, to
significantly increase the benefits of employees. In light of this increase the Company had an actuarial
study performed in respect of these benefits. In addition, the Company determined that going forward
should recognize this plan as a benefit plan rather than a contribution plan, as it had previously because
of the limited amount of liability.
According to the actuarial study, an amount of €3,272,000 pertains to a liability as of December 31, 2002,
recorded as a change in accounting policy charging the “Expenses for unfunded pension liabilities” . An
amount of €315,767 is the current cost of the period allocated to cost of sales, administrative and
distribution expenses proportionally while the cost for 2003 was 356,832.
The reconciliation of the schemes at the balance sheet date is as follow:
Page 153
(Thousands of Euro)
Retirement
compensation plan
As at December 31, 2003
Total
19,242
0,00
19,242
294
3,272
3,566
19,536
3,272
22,808
-
(921)
(921)
Unfunded liabilities up to December 31,2002
Restated
Pension contract
Payments
Utilized
(620)
Current costs in the income statement
2,164
357
2,521
21,080
2,708
23,788
(565)
(565)
-
(1,585)
(620)
Payments
Utilized
(1,585)
1,416
315
1,731
20,911
2,458
23,369
The principal actuarial assumptions used as at December 31, 2004 and 2003 are as follow:
2004
2003
Discount rate:
4.50%
5.00%
Expected rate of salary increases:
4.50%
2.50%
Average future working life
11,12
9,83
29. Provisions
Provision for bad debts
Other
provisions
Total
(Thousands of Euro)
December 31, 2002
3,597
65,480
69,077
Additional provisions
2,563
82,531
85,094
15
-
15
Utilized during the year
December 31, 2003
6,145
148,011
154,156
5,233
-
5,233
(499)
-
(499)
-
(148,011)
(148,011)
10,879
0
10,879
Reversed provisions
December 31, 2004
The amount of € 148,011,000 classified under “Other provisions” as at December 31, 2003, was intended
to cover the total estimated loss might incur due to the payment of compensation to the company
undertaking to operate Stihima. After the Athens court favorable decision the amount was totally reversed.
See also note C5
Page 154
30. Cash Flows from Operations
The reconciliation of net profit to cash flows generated from operations is as follows:
For the Period
December 31,
ended
2003
2004
(Thousands of Euro)
Net profit
505,633
235,101
Adjustments for:
Income tax
263,236
Deferred tax
13,077
146,451
276,313
(14,477)
131,974
Depreciation
8,518
6,144
Amortization
20,127
17,955
Interest income
(9,102)
(7,928)
2,525
4,186
Interest expense
Changes in working capital
Inventories at the beginning
541
Inventories at the end
482
Trade and other receivables
Payables
Provisions
Retirement benefits
Non-cash charge on income
statement
Cash
generated
operations
from
427
59
541
(114)
(27,133)
(50,214)
15,628
452
(142,779)
85,094
1,166
5,166
(8,714)
(617)
642,241
427,199
The analysis of cash and cash equivalents is presented in Note 21.
Page 155
D. Other Disclosures
1. Contingencies
Contingent liabilities:
There are no material claims by third parties against the company with the exception of those set forth in
a letter by our legal advisor Mr. N. Tomaras, which pertain to the following: a) Lawsuits filed by
G.Kymionis, B.Kymionis, E. Karayianni, and S.Valaki for the amounts of €88.041, €88.041, €27.806.309,
and 1,511,371 respectively, the outcome of which is expected to be in favor of the Company according to
the legal advisor. b) labor cases (typographers and other extraordinary personnel) involving the amount
of €220,212 which are going to be permanently settled c)Lawsuits filed by agents requesting amount of €
633,000. d)Lawsuit by agent requesting compensation for damages amounting to € 3,595,000 e) Lawsuit
for moral damages amounting to € 80,152 f) Lawsuit by a Stihima player requesting compensation
amounting to € 3,668,378. According to the legal advisor the case has limited possibilities to be
unfavorable for the company. In the extreme situation where the outcome is negative the compensation
must be paid by the operator of Stihima.
OPAP S.A. has signed a contract with INTRALOT S.A., in relation to the operation of certain parts of
Stihima. The contract signed by OPAP S.A. and INTRALOT S.A. specifies that the betting coupon will
include a variety of betting events including absolute-fixed odds and variable-fixed odds betting games.
INTRALOT S.A. requested compensation from the Company for damages due to the Company’s failure to
introduce horse and greyhound race betting games. The Company and INTRALOT S.A. sought to resolve
the dispute through arbitration.
A three-member Arbitration Court issued a decision granting INTRALOT S.A., in relation to the operation of
certain parts of Stihima, the amount of €36,900,000 for every year that the commencement of the horse
and greyhound racing betting is delayed from March 29, 2001. According to this decision, OPAP S.A. must
pay this amount for a period commencing from March 29, 2001 until horse and greyhound race betting
begins to operate or until the relevant contract expires (January, 28, 2007). Based on the above decision
the management had established a provision amounted € 148,011,000 until December 31,2003.
Regarding the above decision the legal department of OPAP S.A. had requested from the Athens Court of
Appeal the rescission of the decision. The Appeal was discussed in the Court on October 7th, 2003 and
issued a decision favorable to the company.
Based on the above decision there is no obligation for compensation to INTRALOT S.A. INTRALOT S.A.
exercised its right to appeal against the Athens Court’s decision, by applying to the supreme court (Arios
Pagos) for the reversal of that decision.
OPAP’s management considers that there are limited possibilities for a cassation of the Athens Court’s
decision.
The Greek tax authorities have not audited the Company for the year 2003 and 2004. At the time of any
tax audit, additional liabilities may result, which management estimates will not substantially impact total
liabilities. For this reason a relevant provision has not been established.
2. Commitments
Contracts for operating Stihima:
The Company has entered into arrangements with Intralot SA granting it the exclusive right to operate
certain elements of Stihima for 7 years beginning in 1999. Under the terms of this agreement, the
contractor selects the betting events, sets the odds, prints the tickets, carries out advertisement, monitors
the operation of Stihima and is responsible for the risk management of Stihima. All future fixed odds and
non-fixed odds betting games are also expected to be operated by the same contractor, under the
agreement, including athletics, horseracing (non-domestic) and greyhound racing. Notwithstanding these
agreements, the Company retains the exclusive management of the games and participates actively in
many tasks related to their operation. In addition, the contractor trains the Company’s staff in all matters
relating to the operation of Stihima, as required under the terms of the agreement.
The Company also has the following other main commitments:
a) Obligation for the supply of printing paper and coupons.
OPAP has signed contracts for the purchase of paper for printing coupons for games and a contract for the
purchase of paper coupons for specific games.
Page 156
b) Maintenance – Operation of information technology department.
The central data processing system is maintained by Intracom S.A. pursuant to an agreement dated
February 1997. Under the agreement, Intracom S.A. is required to provide and maintain hardware,
central system software, the LOTOS (Lottery Operating System) lottery software platform which was
developed by Intralot S.A., agency terminals and to develop operational procedures relating to the data
processing system. The term of the agreement varies with the service provided. For maintenance
services in respect of hardware and central software systems, the term extends to 2007.
c) Development and Maintenance of software for games of EXTRA 5 and SUPER 3
Intracom S.A. is required to provide and maintain the software for the operation of the numeric games
EXTRA 5 and SUPER 3. The term of the agreement varies with the service provided and the contract
extends for 10 years starting at May 25th, 2002.
d) Development and Maintenance of ERP software
Intracom S.A. is required to provide and maintain ERP related to management and financial services. The
maintenance is extended to a period of five years starting at May 25, 2002, and the cost varies with the
service provided.
e) As at December 31, 2004 the Group is a party to an operating leasing agreement relating to
transporting vehicles. Future minimum payments under this agreement are as follows:
As at December 31,
2005
2004
(Thousands of Euro)
Less than one year
One to five years
481
538
1,259
2,152
-
-
f) As at December 31, 2004 the Company is a party to a lease agreement relating to administration
building. Future minimum payments under this agreement are as follows:
As at December 31,
2004
2003
(Thousands of Euro)
Less than one year
One to five years
2,836
2,786
10,400
6,965
-
-
g) As at December 31, 2004 the Group is a party to a lease agreement relating to administration building.
Future minimum payments under this agreement are as follows:
As at December 31,
2005
2004
(Thousands of Euro)
Less than one year
3,754
2,882
One to five years
10,690
10,608
-
-
3. Related party disclosures
The wholly owned subsidiary company «OPAP LTD» based on the new interstate agreement effective from
January 1st ,2003, pays 10% of its revenues from games to the parent company. This fee amounted €
Page 157
9,855,455 for the current year. The parent company has also sold paper to its subsidiary which amounted
€349,150. The transaction was conducted on an arm’s length basis at standard market terms and
conditions.
The parent company pays an amount of 1% of its total revenues from KINO to its wholly owned subsidiary
«OPAP SERVICES» with the purpose of improving (i.e. equipment, design etc) agents’ outlets. The total
amount for the current year was € 8,875,000. The amount was outstanding at the balance sheet date.
4. Off Balance sheet events
There are no important matters that have occurred since the balance sheet date that could materially
affect the financial statements.
Page 158
16. CONSOLIDATED FINANCIAL STATEMENTS OF COMPANY FOR FISCAL YEAR-END
2003-2004 BASED ON THE INTERNATIONAL ACCOUNTING STANDARDS
OPAP S.A.
Consolidated Income Statements
(Thousands of Euro, except for per share amounts)
Notes
2004
2003
Revenue
C2,C3
3,177,208
2,281,922
Cost of sales
C4,C7
(2,461,189)
(1,762,865)
716,019
519,057
Gross profit
C3
3,712
4,239
Distribution costs
C7
(57,286)
(47,693)
C7
(28,609)
(21,653)
(1,928)
(3,858)
Other operating expenses
Provisions for other operating loss
C28,D1
-
(82,531)
Income from provisions
C5,C28,
D1
148,011
-
Provisions for unfunded liabilities
C27
Income/Loss from associates
C15
338
(7)
Amortization of goodwill
C14
(2,422)
(606)
777,835
363,382
6,936
3,756
784,771
367,138
Profit from operations
Net financing results
C6
Profit before tax
(3,566)
Tax expense
C8
(266,154)
(146,459)
Deferred taxes
C8,C23
(13,076)
14,477
Profit after tax
505,541
235,156
Minority interest
92
(55)
505,633
235,101
1.59
0.74
Basic Earnings per Share
C10
Page 159
OPAP S.A.
Consolidated Balance Sheets
As at December 31, 2004, and 2003
(Thousands of Euro)
Notes
2004
2003
ASSETS
Current assets
Cash and cash equivalents
C20
423,567
294,806
Inventories
C17
482
541
Trade receivables
C18
36,381
43,181
Other current assets
C19
227,967
134,401
688,397
472,929
Total current assets
Non-current assets
Intangible assets
C13
244,704
261,074
Property, plant and equipment
C12
40,350
25,216
Goodwill
C14
21,196
23,618
Investments in associates
C15
338
-
Other non-current assets
C16
11,526
10,559
Deferred tax assets
C23
6,538
19,614
324,652
340,081
1,013,049
813,010
TOTAL ASSETS
LIABILITIES & SHAREHOLDERS’ EQUITY
Current liabilities
Borrowings
C24
21,574
36,762
Trade and other payables
C26
117,179
102,504
340,771
166,751
4,858
1,481
484,382
307,498
Taxes payable
Accrued liabilities
Total current liabilities
Non - current liabilities
Borrowings
C24
25,345
46,920
Employee benefit plans
C27
23,369
23,788
Provisions
C28
Other non-current liabilities
C25
Total non current liabilities
148,011
5,277
5,092
53,991
223,811
Shareholders’ equity
Issued capital
C21
95,700
95,700
Reserves
C22
43,700
43,060
38,404
5,531
Retained earnings
Page 160
C9
41
(12)
Dividends payables
C11
296,670
137,170
474,515
281,449
161
252
1,013,049
813,010
Total shareholders’ equity
Minority interest
TOTAL
LIABILITIES
EQUITY
&
SH.
CONSOLIDATED FINANCIAL STATEMENTS
AS AT DECEMBER 31, 2004, AND 2003
(ACCORDING TO INTERNATIONAL FINANCIAL REPORTING STANDARDS)
REPORT OF THE AUDITORS
To the board of directors and shareholders
of OPAP S.A.
We have audited the accompanying consolidated balance sheet of OPAP as of December 31, 2004, the
related income statement and statement of changes in net equity for the year ended December 31, 2004
and the related cash flow statement for the year ended December 31, 2004, all prepared in accordance
with International Financial Reporting Standards. These financial statements are the responsibility of the
company’s management. Our responsibility is to express an opinion on these financial statements based
on our audit.
We conducted our audit in accordance with standards established by the Greek Institute of Chartered
Accountants, which are in compliance with International Auditing Standards. Those standards require that
we plan and perform the audit to obtain a reasonable assurance about whether the financial statements
are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion the financial statements give true and fair view of the financial position of the Group as of
December 31, 2004 and the results of its operations and its cash flows for the year ended December 31
2004 in accordance with International Financial Reporting Standards.
Page 161
OPAP S.A.
Consolidated Cash Flow Statements
(Thousands of Euro)
Notes
2004
2003
OPERATING ACTIVITIES
Cash generated from operations
C29
649,353
428,599
Interest paid
(2,525)
(4,191)
Income taxes paid
(158,027)
(109,376)
Cash flow from operating activities
488,801
315,032
118
-
(27)
-
(1,155)
(422)
Investment in associates
-
(10,000)
Acquisition of subsidiary, net of cash
disposed of
-
(15,185)
Purchase of plant and equipment
(16,393)
(13,941)
Purchase of intangible assets
(1,343)
(1,737)
Interest received
9,548
7,947
Cash flow used in investing activities
(9,252)
(33,338)
(36,762)
(39,036)
(314,026)
(306,973)
Cash flow used in financing activities
(350,788)
(346,009)
Net increase/decrease in cash and
cash equivalents
128,761
(64,315)
Cash and cash equivalents at
beginning of year
294,806
359,121
Cash and cash equivalents at end of
year
423,567
294,806
INVESTING ACTIVITIES
Proceeds from sale of plant and equipment
Guarantees
Loans granted to personnel
FINANCING ACTIVITIES
Proceeds from non-current borrowings
Dividends paid
C11
Page 162
OPAP S.A.
Consolidated Statement of Changes in Net Equity
For the Twelve-month Periods Ended December 31, 2004 and 2003
(Thousands of Euro)
Share
capital
Balance at December 31,
2002
95,700
Exchan
ge
differe
nces
Other
reserv
es
Dividend
s
Payables
Retained
earnings
-
34,313
213,730
12,578
356,321
(531)
(531)
12,047
355,790
235,101
235,101
Tax correction
Restated balance
95,700
-
34,313
213,730
(12)
(12)
Dividends paid
(309,430)
Dividends proposed
232,870
2003
8,747
95,700
(12)
43,060
137,170
(309,430)
(232,870)
0,00
(8,747)
0,00
5,531
281,449
505,633
505,633
53
53
Dividends proposed
472,120
640
Dividends paid
2004
Total
(472,120)
-
(640)
-
(312,620)
95,700
41
43,700
296,670
(312,620)
38,404
474,515
OPAP S.A.
Notes to the Consolidated Financial Statements
General Information
OPAP S.A. was established as a private legal entity in 1958.
OPAP S.A. was reorganized as a société anonyme in 1999 and its accounting as such began in 2000.
The Company has the sole concession to operate and manage nine existing numerical lottery and sports
betting games as well as two new numerical lottery games, which it has yet to introduce. The Company
also holds the sole concession to operate and manage any new sports betting games in Greece as well as
a right of first refusal to operate and manage any new lottery games permitted by the Hellenic Republic.
The Company currently operates six numerical lottery games (Joker, Lotto, Proto, Extra 5, Super 3 and
Kino ) and three sports betting games (Stihima, Propo and Propo-goal). It has also designed two new
lottery games (Bingo, and Super 4). It distributes its games through an extensive on-line network of
approximately 5,588 dedicated agents.
The Company’s Reorganization
Until 1999, OPAP S.A. operated as a non-profit organization. The Company had the exclusive right to
operate numerical lottery and sports betting games. For the games operated, OPAP S.A. paid the Hellenic
Republic the total revenues from numerical lottery and sports betting games minus a specific percentage
retained to cover its operational expenses and implement its development plans.
Page 163
At the time OPAP S.A. was reorganized into a société anonyme, a valuation committee was appointed,
under relevant Greek law, to revalue the organization’s assets and liabilities on the basis of their value.
This committee consisted of a chartered accountant, a chartered surveyor and an employee of the Ministry
of Commerce, which do not constitute a "professional valuer" within the meaning of International
Accounting Standards. A professional valuer may have made a different determination as to market value.
The difference between the fair market value and the historical value resulted in the initial share capital of
€29.347.000, with the sole shareholder being the Hellenic Republic.
The Company purchased from the Hellenic Republic the 20-year exclusive right to operate certain
numerical lottery and sports betting games for €322.817.000. Since the date of that agreement, the
Company no longer pays the Hellenic Republic a percentage of its revenue, and its relationship with the
Hellenic Republic has been that of a Company with its shareholder in accordance with Greek corporate
law.
As a non-profit organization, the Company was not subject to income taxation. Since its reorganization
into a société anonyme, it has been subject to income tax applicable to Greek corporations generally.
During 2000, however, its profit subject to tax was determined by deducting from its profits before tax
non-taxable amounts that included the amount of dividends paid by the Company to the Hellenic Republic.
A. Basis of preparation
The consolidated financial statements have been prepared in accordance with International Financial
Reporting Standards. The financial statements have been prepared using the historical cost convention,
except as disclosed in the accounting policies below.
B. Principal Accounting Policies
The significant accounting policies adopted in the preparation of these financial statements and in
determining the results for the year and the financial position are set out below:
(i) Basis of consolidation
The accompanying consolidated financial statements include the accounts of the Company and its
subsidiaries. Subsidiaries are companies in which OPAP directly or indirectly has an interest of more than
one half of the voting rights or otherwise the power to exercise control over their operations have been
consolidated. Subsidiaries are consolidated from the date on which effective control is transferred to the
Company and cease to be consolidated from the date on which control is transferred out of the Company.
All inter-company transactions have been eliminated. Where necessary accounting policies for subsidiaries
have been revised to ensure consistency with those adopted by the Company. The balance sheet of
subsidiaries denominated in foreign currencies are translated in euro using the year-end exchange rates,
average exchange rates are used for the translation of the income statement and cash flow statement.
Translation gains or losses arising are reported as a separate component of shareholders equity.
(ii) Investments in associates
The company’s investments in its associates are accounted for under the equity method of accounting.
These are entities in which the Company has significant influence and which are neither a subsidiary nor a
joint venture of the Company. The investments in associates are carried on the balance sheet at cost less
goodwill, plus post acquisition changes in the Company’s share of net assets of the associate, less any
impairment value. The statement of income reflects the Company’s shares of the results of operations of
the associates.
(iii) Revenues
Revenues from games are recognized upon the completion of games, typically immediately before the
announcement of the results of games, which occurs twice weekly. Revenues from sports betting games
that last longer than three or four days are recognized on a cash basis twice weekly.
Other categories of revenues are recognized under the following methods:
a) other revenues are recognized when the event has occurred; and
b) interest on short-term investments (typically 12 or less days) is recognized on a cash basis,
and at the balance sheet date on an accrual basis.
(iv) Borrowings
Page 164
Loans are recorded as liabilities at the date funds are received. Loan issuance expenses are included in
results of operations. At subsequent balance sheet dates, loans are shown at their unpaid principal
amount. Interest expenses are recognized when paid and at the balance sheet date to the extent that
these expenses are accrued and unpaid. Loans are classified as long-term if they mature in more than
one year and short-term if they mature in one year or less.
(v) Retirement Costs
Pursuant to the collective bargaining agreement between the Company and its employees, the Company is
obliged to pay its employees retirement benefits following completion of the requisite service period. The
cost of these benefits, determined periodically on an actuarial basis, is recognized as an expense in the
year that the service was rendered. A portion of this benefit may be paid to an employee prior to his
retirement.
(vi) Property, Plant and Equipment
The cost of tangible assets acquired after January 1, 2000 is stated at cost.
The value of tangible assets as at December 31, 1999 was estimated by a valuation committee appointed
in accordance with relevant Greek corporate law. The revalued amounts were recognized in the balance
sheet as of that date, with the revaluation surplus reflected as a fair value revaluation reserve and
subsequently used for the formation of the Company’s initial share capital.
Depreciation is calculated using the straight-line method based on cost or revalued amount as follows:
Land
nil
Buildings
20 years
Plant & Machinery
5-7 years
Vehicles
6.5 years
Equipment
5 years
(vii) Intangible Assets and Goodwill
The 20-year concession granted by the Hellenic Republic to the Company to operate numerical lottery and
sports betting games has been stated at cost, which was determined by independent actuaries.
The cost of software acquired before December 31, 1999 has been stated at its revalued amount.
Software acquired after January 1, 2000 is stated at cost.
The value of software was estimated as at December 31, 1999 by the valuation committee referred to in
(vi) above. The revalued amounts were recognized in the balance sheet as of that date, with the
revaluation surplus reflected as a fair value revaluation reserve and subsequently used for the formation of
the Company’s initial share capital.
Amortization is calculated using the straight-line method based on cost or revalued amount as follows:
Concession
20 years
Software
3 years
Goodwill is recorded as an intangible asset and is the surplus of the cost of acquisition over the fair value
of identifiable assets of a subsidiary, associate at the date of acquisition. Any goodwill of the acquired
company is recorded as asset of the company using the exchange rate on the date of the acquisition. It is
amortized to income through “Amortization of goodwill” using the straight-line method over a period of ten
years and Goodwill arising from the acquisition of associate and subsidiary entities is presented separately
in the balance sheet.
(viii) Inventories
Page 165
Inventories are stated at the lower of cost and net realizable value. Cost is determined using the yearly
weighted average cost formula. The value of raw materials and consumables at December 31, 1999 was
determined by the valuation committee referred to in (vi) above.
(ix) Exchange Differences
At the balance sheet date, foreign currency monetary items are calculated using the relevant currency
exchange rate.
Non-monetary items are stated at historical cost, using the exchange rate at the date of the relevant
transaction.
Foreign currency transactions are recorded at the currency exchange rate prevailing on the date of the
transaction.
(x) Income Tax Expense
Income tax expense is calculated on taxable profits of the year using applicable tax rates. In 2000 and
prior years, taxable profits were calculated after deduction of income not subject to tax, principally
consisting of dividends payable to the Hellenic Republic.
For all deductible temporary differences that arise from the difference between the taxable base used for
the calculation of taxable income and the amount stated in financial statements, a deferred tax liability or
deferred tax asset is recognized. The principal temporary differences that arise are from the provisions for
employee retirement benefit plans and provision for other operating loss(reverse of provision).
The tax rate that is used for the calculation of deferred tax is the same as the tax rate used for the
calculation of the Company’s tax liabilities at the balance sheet date.
(xi) Other Non-current Assets
Non-current assets are recorded at their historical cost, without any present value discount from the date
of their anticipated maturity or realization.
Warranty Deposits
Warranty deposits are placed on deposit with certain suppliers to secure the Group’s obligations to those
suppliers. Amounts remain as demands for their duration. Upon the maturity of these obligations, the
amounts on deposit may be applied against all or a portion of the outstanding obligations according to the
terms of the deposit, with any balance being returned to the Group.
Prepayments for Retirement Benefits
Housing Loans to Personnel
In accordance with the parent Company’s collective bargaining agreement, eligible full-time employees are
entitled to housing loans. These loans have a term of 25 years with an initial two-year grace period on
repayments of principal and interest. Interest accrued at the rate of 2% in 2003, and 2002.
There are three types of housing loans:
Acquisition
Up to €32,281.73
Construction
Up to €16,140.86
Repair
Up to €8,070.43
Page 166
(xii) Cash and Cash Equivalents
Cash and cash equivalents include cash in hand, cash in open bank accounts and short-term deposits.
(xiii) Provisions
Provisions are recognized and accounted for when the Group determines that an obligation (legal or
constructive) has arisen, it is probable that the Group will have to expend money or other resources to
satisfy the obligation and a reliable estimate can be made of the amount of the obligation.
Provisions are reconsidered at each balance sheet date so as to reflect the current estimate of the
obligation.
A provision is applied only to expenditures in respect of which the provision was originally recognized.
Provision for Doubtful Receivables
The Group establishes provisions for receivables equal to the amount of receivables from agents that
management of the Group estimates as doubtful. To determine the provisions necessary at a balance
sheet date, guarantees paid by agents are taken into consideration in accordance with regulations
governing the Company’s relationship with its agents. These guarantees are used to offset bad debts
from agents.
Management estimates that its provisions for credit risk are adequate due to its credit risk controls, the
large volume and disparate nature of its receivables and the real-time credit control of the Group's agents
through its on-line network.
(xiv) Use of estimates
The preparation of the financial statements in conformity with International Financial Reporting Standards
requires management to make estimates and assumptions that affect the amounts reported in the
financial statements and accompanying notes. Significant estimates include the estimated useful lives of
tangible and intangible assets and provisions for any potential losses. Actual results could differ from those
estimates.
(xv) Reclassifications
Certain prior year amounts have been reclassified to conform to current presentation.
C. Notes to Financial Statements
1. Investments in subsidiaries
The Company’s subsidiaries that were fully consolidated in the accompanying financial statements are as
follows:
Consolidated subsidiary
Ownership
Interest
Country of
Incorporation
OPAP (CYPRUS) LTD
100%
Cyprus
Numerical lottery games
OPAP GLORY LTD
90%
Cyprus
Sports betting company
OPAP INTERNATIONAL
100%
Cyprus
Holding Company
OPAP SERVICES
100%
Greece
Sports events- Promotion
The effective date of first consolidation for both «OPAP (CYPRUS) LTD» and «OPAP GLORY LTD»
companies is October 1st ,2003 for «OPAP INTERNATIONAL» is February 24st 2004 and for «OPAP
SERVICES» is September 15th 2004.
Establishment of subsidiary Opap (Cyprus) ltd
Page 167
The company has signed a new agreement for its operation in Cyprus effective January 1, 2003. According
to this agreement, a new company will be established in order to operate games in the Cypriot market.
Management fees will be paid to OPAP S.A. at a rate of 10% of the revenues from games in Cypriot
market, with the remaining amount after the deduction of all operating expenses being paid to Cypriot
governmental organizations. The cumulative management fees for the first two years of this agreement
will remain in the Cypriot company and will be used to finance its investments. The company were
established August 16th ,2003 , its operations started at October 1st ,2003. The net asset contributed by
company to subsidiary is as follow:
Net assets contributed
(Thousands of Euro)
Non current assets
78
Current assets
549
Cash &cash equivalent
6,094
Less current creditors
(5,311)
1,410
Opap (Cyprus) Ltd contributed € 97,738,400 (€ 13,824,000 in 4th Quarter 2003) of revenue and 3,346,000
(€160,000 in 4th Quarter 2003) of profit before tax.
Acquisition of Opap Glory ltd
In October 2003 the company acquired 90% of Opap Glory Ltd a Cypriot sports betting company, for
€16,000,000. After the allocation of purchase price to the identifiable assets and liabilities the residual
amount of €14,231,000 was attributed to Goodwill which will be amortized over ten years.
The analysis of the transaction is as follow:
Net assets acquired
Net assets acquired
(Thousands of Euro)
1,769
Goodwill
14,231
Total
16,000
Paid by cash
16,000
Less cash acquired
Net cash paid
815
15,185
Opap Glory Ltd contributed €11,555,000 (€4,055,000 in 4th Quarter 2003) of revenue and €918,100 of loss
before tax (€630,700 profit in 4th Quarter 2003).
Establishment of subsidiary Opap International ltd
The company has established in late February, 2004 a wholly owned subsidiary company in Cyprus named
“OPAP INTERNATIONAL”. Its share capital amounts to 3,000,000 CYP. The company was established with
a purpose of expanding to the international market. Opap International Ltd contributed nil of revenue and
€396,600 of loss before tax.
Establishment of subsidiary Opap Services S.A.
The company has established in early September, 2004 a wholly owned subsidiary company in Greece
named “OPAP SERVICES”. Its share capital amounts to 20,000,000 Euros. The company was established
with a purpose of developing sport and promotion events.
Opap Services contributed nil of revenue and € 123,200 of loss before tax (after Inter-company
transactions elimination).
2. Segment Information
Page 168
PROPO
LOTTO
JOKER
PROTO
PROPOGOAL
EXTRA 5
SUPER 3
STIHIMA
ΚΙΝΟ(*)
TOTAL
Revenues
79,401
61,339
270,665
50,035
1,708
34,114
122,939
1,612,894
944,113
3,177,208
Gross profit
29,193
27,239
93,615
15,366
575
9,775
35,447
313,379
191,430
716,019
7,124
5,503
24,284
4,489
153
3,061
11,030
144,706
84,705
285,055
17,204
13,290
58,644
10,841
370
7,392
26,637
349,461
204,558
688,397
24,328
18,793
82,928
15,330
523
10,453
37,667
494,167
289,263
973,452
(Thousands of euro)
Other
information
Tangible
and
Intangible
Assets
Current Assets
Segment Assets
39,597
Unallocated
Assets
TOTAL ASSETS
1,013,049
Segment
Liabilities
Unallocated
Liabilities
TOTAL
LIABILITIES
4,354
Additions
of
tangible
and
intangible assets
Depreciation
and amortization
443
342
1,511
279
10
190
686
9,004
5,271
17,736
726
561
2,476
458
16
312
1,125
14,755
8,637
29,066
3,364
14,843
2,744
93
1,871
6,742
88,448
51,774
174,233
364,140
538,373
Page 169
PROPO
LOTTO
JOKER
PROTO
PROPOGOAL
EXTRA 5
SUPER 3
STIHIMA
ΚΙΝΟ(*)
TOTAL
Revenues
81,055
66,944
215,270
48,225
2,500
53,297
152,037
1,651,748
10,847
2,281,922
Gross profit
29,883
28,795
72,740
13,254
818
16,964
41,864
312,617
2,122
519,057
10,169
8,399
27,008
6,050
314
6,687
19,074
207,228
1,361
286,290
16,799
13,874
44,615
9,995
518
11,046
31,509
342,325
2,248
472,929
26,968
22,273
71,623
16,045
832
17,733
50,583
549,553
3,609
759,219
(Thousands of euro)
Other
information
Tangible
and
Intangible
Assets
Current Assets
Segment Assets
Unallocated
Assets
TOTAL ASSETS
53,791
813,010
Segment
Liabilities
Unallocated
Liabilities
TOTAL
LIABILITIES
6,847
5,655
18,184
4,074
211
4,503
12,843
139,526
916
192,759
Additions
of
tangible
and
intangible assets
Depreciation
and amortization
514
424
1,364
306
16
337
964
10,468
69
14,461
861
710
2,282
512
27
565
1,613
17,519
115
24,204
338,550
531,309
(*) Kino was introduced in November 2003 in selective areas (Crete and Larissa)
There are no sales transactions between business segments. Segment assets consist of property, plant
and equipment, intangible assets, inventories, trade and other receivables, cash and cash equivalents.
Unallocated assets principally consist of deferred tax and investments.
Segment liabilities comprise operating liabilities and exclude items such as taxation, employee benefit
plans and provisions.
A portion of cost of sales was allocated to business segments according to the revenues of each business
segment.
Geographical Segments
The Group’s operations are located in Greece and Cyprus. Greece is the home country of the parent
Company.
For the Year Ended December 31,
2004
Greece
Cyprus
Total
3,067,915
109,293
3,177,208
698,472
17,547
716,019
Revenues
Gross profit
Page 170
For the Year Ended December 31,
2003
Greece
Cyprus
Total
2,230,631
51,291
2,281,922
501,958
17,099
519,057
Revenues
Gross profit
Revenues are based on the country in which the customer is located. There are no sales between the
geographical segments.
3. Revenues
The analysis of each category of Group’s revenues recognized during the period is as follows:
For
the
Years
December 31,
Ended
2004
2003
(Thousands of Euro)
Revenues from games
3,177,208
2,281,922
3,712
4,239
3,180,920
2,286,161
Total Revenues
4. Cost of Sales
The analysis of cost of sales classified by nature of expense is as follows:
For
the
Years
December 31,
Ended
2004
2003
(Thousands of Euro)
Prize payouts to lottery and
betting winners
1,934,734
1,312,851
Lottery agents’ commissions
266,050
201,143
Betting Commissions
163,038
167,688
7,404
5,130
17,386
17,454
7,636
6,129
Depreciation
Amortization
Repairs
and
expenditures
maintenance
Outside Re sourcing
Distributions
Professional
Association
to
Greek
Football
Staff cost
Other expenses
Provisions for bad debtors
Total cost of sales
12,928
9,602
6,299
(*) 6,991
13,968
12,611
926
1,069
25,587
19,634
5,233
2,563
2,461,189
1,762,865
*An amount of 1,082 has been reclassified from “Other expenses” to “Distributions to Greek Professional
Football Association”
Lottery Agents’ commissions are commissions accrued to the Company’s dedicated sales agents. They are
accounted at a fixed rate of 8% on revenues which are generated from Stihima and Super 3, 7% on the
revenues of Kino and 12% for the other games. The rate for the fixed odds organized in Cyprus is 10%.
Page 171
Betting commissions are paid to the operator of Stihima for the services that this entity provides in relation
to the operation of Stihima, which was introduced in 2000.
Distributions to the Greek Professional Football Association are related to the Propo and Propo-goal
games.
5 Income from provisions
In the current period the company, based on the 953/2004 decision of the Athens Court, recognized in the
income statement an amount of €148,011,000 .The amount is the reverse of accumulated provision that
had been recognized by the company until December 31, 2003, based on the 2/21.3.2003 decision of the
Arbitration Court, according which the company should pay to INTRALOT S.A. an amount of € 36,900,000
for every year that it doesn’t include horserace and greyhound race betting as additional Stihima betting
events. Furthermore INTRALOT S.A. exercised its right to appeal against the Athens Court’s decision, by
applying to the supreme court (Arios Pagos) for the reversal of that decision. See also Note D1.
6. Net Financing Income
31,
2004
2003
(Thousands of Euro)
Interest
expense
borrowings
for
Bank
(2,612)
(4,191)
9,177
7,816
Interest income from
Bank deposits
Personnel loans
Total interest income
Net Financing Income
371
131
9,548
7,947
6,936
3,756
The weighted average interest rate on the Group's borrowings was3,51% in 2004 ,and 3,74 in 2003. The
average interest rate earned on short-term bank deposits was 2,02%in 2004 and 2,36% in 2003.
7. Staff Costs
31,
2004
2003
(Thousands of Euro)
Employee remuneration
23,010
17,964
Social security costs
3,778
2,898
1,731
(*)2,521
Other remuneration
2,032
1,190
30,551
24,573
Total Staff Costs
(*)The amount reflects current cost, the previous year cost is deducted from «Provisions for unfunded
liabilities» (see also note 27)
The average number of full-time employees was 302 in 2004 and 264 in 2003. The average number of
part-time personnel was 387 in 2004 and 233 in 2003.
Page 172
8. Tax Expense
2004
2003
(265,721)
(146,364)
(433)
(95)
(266,154)
(146,459)
(13,076)
14,477
(279,230)
(131,982)
(Thousands of Euro)
Income tax expense
Domestic
Foreign
Deferred tax
Total Tax Expense
Domestic income tax is calculated at 35%. The tax on the Company’s profit before tax amount differs from
the theoretical amount that would arise using the statutory tax rate applicable to the Company. Taxation
for foreign entities is calculated at the rates prevailing in the respective countries.
The charge for the year can be reconciled to the profit of the income statement as follows:
2004
2003
(Thousands of Euro )
Profit before tax
784,771
367,138
(274,670)
(128,498)
Tax effect of that expenses are not
deductible in determining taxable profit
(5,271)
(3,632)
Effect of different tax rates of subsidiaries
operating in other countries
711
182
-
(34)
(279,230)
(131,982)
Tax at the domestic income tax rate 35%
Additional income tax charges
Income Tax Expense
Prior to December 1999, the Company was not subject to income tax because it operated as a non-profit
organization.
9. Exchange Differences
The exchange differences that resulted during the year, along with the exchange differences from foreign
currency balances at the balance sheet date, are as follows:
2004
2003
(Thousands of Euro)
Revenue
-
4,758
Cost of sales
-
(4758)
Translation differences
41
(12)
Valuation of monetary items at
December 31
305
(827)
Total exchange differences
346
(839)
Page 173
The Company has no foreign currency risk management policy as the operations of Cyprus has sufficient
liquidity to accommodate its operating needs and therefore operations in Cyprus do not give rise to
currency exchange transactions that expose the Company to significant foreign currency risk. Translation
differences aroused from the translation of foreign entities are directly deducted from the equity.
10. Earnings Per Share
The calculation of earnings per share is as follows:
2004
2003
Net profit attributable to shareholders (in thousands
of euros)
505,633
235,101
Weighted average number of ordinary shares in issue
319,000,000
319,000,000
1.59
0.74
Basic earnings per share
11. Dividends
Management intends to propose at the annual general meeting of 2005 a dividend in respect of 2004 of
€1.48 (0.73 in 2003) per share, amounting to a total dividend of €472,120,000 (232,870,000 in 2003)
which is shown stated in the Company’s Statement of Changes in Equity (distinguished from retained
earnings) less an interim dividend of € 175,450,000 (or €0.55 per share) which was distributed on
December 03, 2004 through a board decision of November 10, 2004. According to Law 2190/1920, the
minimum dividend distributed to shareholders must be at least 35% of net income.
Page 174
12. Property, Plant and Equipment
Land &
Buildings
Plant &
Machinery
Vehicles &
Equipment
Total
(Thousands of Euro)
Opening
amount
net
book
Additions
Assets
acquired
subsidiaries
by
Disposals cost
Depreciation charge
At
December
2003
5,444
10,141
1,933
17,518
2,859
7,434
2,430
12,723
-
-
1,224
1,224
-
(522)
(522)
-
(522)
171
4,634
1,444
(522)
8,539
31,234
13,245
53,018
407
18,293
9,102
27,802
8,132
12,941
4,143
25,216
4,143
25,216
6,249
31,
Cost or Valuation
Accumulated
depreciation
Net Book Amount
Opening
amount
net
book
Additions
Depreciation charge
At
December
2004
8,132
12,941
12,429
9,860
1,775
24,064
1,064
6,694
1,172
8,930
20,968
41,094
15,020
77,082
1,471
24,987
10,274
36,732
19,497
16,107
4,746
40,350
31,
Cost or Valuation
Accumulated
depreciation
Net Book Amount
Plant and machinery mainly includes equipment for lottery agents. All property, plant and equipment is
currently unencumbered.
Page 175
13.Intangible Assets
Software
Rights
Total
(Thousands of Euro)
2,292
274,394
276,686
Additions
1,737
´-
1,737
Amortization charge
1,208
16,141
17,349
7,911
322,817
330,728
Cost or Valuation
5,090
64,564
69,654
2,821
258,253
261,074
Net Book Amount
2,821
258,253
261,074
Additions
1,344
-
1,344
Amortization charge
1,573
16,141
17,714
9,255
322,817
332,072
Cost or Valuation
Net Book Amount
6,663
80,705
87,368
2,592
242,112
244,704
Intangible assets are currently unencumbered.
Amortization of the 20-year concession is totally included in cost of sales, whereas amortization of
software is allocated among cost of sales, administrative expenses and distribution costs .
14. Goodwill
The analysis of goodwill aroused from the acquisition of Opap Glory ltd (subsidiary) and Glory Technology
ltd (associate) is as follows:
Opap Glory ltd
Glory Τechnology ltd
Total
(Thousands of Euro)
At December 31.2003
Additions
Amortization charge
2003
Additions
14.231
9,993
24,224
(356)
(250)
(606)
13,875
9,743
23,618
-
-
-
Amortization charge
(1,423)
(999)
(2,422)
2004
12,452
8,744
21,196
15. Investments in associates
In October 2003 the company acquired 20% of Glory Technology Ltd a Cypriot company, for €10 millions.
After the allocation of purchase price to the identifiable assets and liabilities the residual amount of €
9,993 was attributed to Goodwill which will be amortized over ten years.
The reconciliation of the balance is as follows:
Page 176
(Thousands of Euro)
At December 31,2002
-
Cost of investment
10,000
Less Goodwill
(9,993)
Less share of post acquisition loss
(7)
2003
-
Plus share of post acquisition earnings
338
2004
338
The company’s interest in the associate Glory Technology ltd is as follows
Associate
Ownership
Interest
Country of
Incorporation
20%
Cyprus
Software services
Glory technology Ltd
16. Other Non-current Assets
As at December 31,
2004
2003
(Thousands of Euro)
Warranty deposits
831
804
6,099
5,274
Prepayments to assets suppliers
1,502
1,218
Housing loans to personnel
3,094
3,263
11,526
10,559
Prepayments
benefits
of
retirement
The current portion of Other Non-current Assets is included in other current assets and deferred expenses.
(See Note 19).
17. Inventories
As at December 31,
2004
2003
(Thousands of Euro)
Raw materials
102
200
Consumable materials
380
341
Total inventories
482
541
Inventories consist mainly of paper and printing material that is used for the printing of lottery tickets.
18. Trade Receivables
The analysis of trade receivables is as follows:
Page 177
As at December 31,
2004
2003
(Thousands of Euro)
Receivables from lottery agencies
29,461
33,736
Bad and doubtful debts
14,735
9,875
Less provisions for bad and doubtful debts
(10,879)
(6,145)
Prepayments to suppliers
1,410
391
Other receivables
1,654
5,324
36,381
43,181
Total Trade Receivables
Management considers that the Group's main credit risk consists of bad and doubtful debts of agents. As
at December 31, 2004 this debt amounted to € 14,735,000 (€9,875,000 in 2003). To cover this risk the
Group established a provision of € 10,879,000 (€6,145,000 in 2003). A collective warranty deposit fund
that jointly secures the agents’ obligations to the parent Company and Opap Ltd, amounting to €
5,003,000 at December 31, 2004, is also available to cover bad debts (€4,698,000 in 2003). See also
Note 25. Management considers these provisions to be adequate.
19. Other Current Assets and Deferred expenses
The analysis of Other Current Assets is as follows:
As at December 31,
2004
2003
(Thousands of Euro)
the
65,975
42,558
Loans to personnel
129
125
Prepayments of retirement
benefits
540
45
Other
758
92
16,511
11,716
tax
144,054
79,865
Current
227,967
134,401
Amounts due from
operator of Stihima
Prepaid expenses
Deferred
expense
Total
Assets
income
Other
Amounts due from the operator of Stihima for the year ended December 31, 2004 are calculated in
accordance with the terms of the contract with its operator. According to the contract if payments to the
winners of Stihima exceed the limit of 60% of total revenues deriving from the game, then the operator
pays to OPAP the exceeding amount
Housing loans to personnel are secured with mortgages on the property purchased.
Prepaid expenses mainly consist of prepayments made to the Greek Football Association, and football
clubs for advertising and sponsoring services according to the terms of separate contracts signed with
each of those associations.
Deferred income tax refers to an advance payment of the parent company for the next year’s profit.
According to Greek tax law, companies are obliged to calculate an additional amount of 55% of the
current year’s income tax charge. On the balance sheet date an equal liability to the deferred income tax
is recognized. The amount of Deferred income tax is offset with the next year’s income tax.
Page 178
20. Cash and Cash Equivalents
As at December 31,
2004
2003
(Thousands of Euro)
Cash in hand
388
363
Cash at bank
404,124
294,443
19,055
-
423,567
294,806
Short term Deposits
Total
cash
equivalents
and
cash
The average interest rate earned on bank deposits was 2,36% in 2004 and 3,36% in 2003. The average
duration of short-term bank deposits was 5 calendar days in 2004 and the 17 in 2003.
21. Share Capital
When the Company was organized as a societe anonyme in 1999, its articles of association provided that a
valuation committee should value its assets within one year. In accordance with that requirement, the
committee valued the Company’s assets at €33,778,000. Of that amount, €29,347,000 was capitalized
through the issuance of 1.0 million shares. The balance was applied to the revaluation reserve account
within shareholders’ equity.
On December 15, 2000, the ordinary shares of the Company were split to increase the number of shares
outstanding to 100 million. Consequently, the Company’s share capital was increased by €64,270,000 to
€93,617,000 through the issuance of 219,000,000 new shares. The €64,270,000 increase consisted of (a)
retained earnings, (b) an amount released from the revaluation reserve account, and (c) a portion of the
consideration for the concession (€29,347,000).
In 2001, the par value of the Company’s shares was increased from €0.29 to €0.30 through the
capitalization of untaxed reserves.
All the shares issued by the Company are ordinary shares. The total authorized number of ordinary shares
was 319 million at December 31, 2004 with a par value of €0.30 per share (€0.30 in 2003,). All issued
shares are fully paid.
There were no movements in the share capital of the company in either the 2004 or 2003 reporting
periods,
22. Reserves
The analysis of reserves is as follows:
Other
reserves
Statutory
reserves
Untaxed
reserves
Total
(Thousands of Euro)
2,815
23,153
8,345
34,313
-
8,747
-
8,747
2,815
31,900
8,345
43,060
640
-
-
640
3,455
31,900
8,345
43,700
The nature and purpose of each reserve account within shareholders’ equity is as follows:
Other reserves reflect amounts deducted from the previous years' earnings.
available for distribution to shareholders.
After taxation they are
Page 179
Statutory reserves reflect the addition of a minimum of 5% of the annual net profit of parent company
added each year, subject to a maximum balance of 1/3 of the outstanding share capital. This amount is
not available for distribution. After the allocation of net profits of 2003 this reserve has reached the
statutory amount and further addition is not obligatory.
Untaxed reserves are drawn from untaxed
shareholders becomes subject to income tax.
reserves.
The amount of € 640,000 is transferred from
years net income from «OPAP LTD» and «OPAP
earnings. Any portion of this reserve distributed to
The intention of the Company is not to distribute these
«retain earnings» to «reserves» and relates to previous
GLORY LTD»».
23. Deferred Taxes
Deferred income tax assets and liabilities are offset when there is a legal right to set off current tax assets
against current tax liabilities and those assets and liabilities relate to the same tax authority.
The movements in deferred tax assets and liabilities are as follows:
Deferred (from
income tax
statement)
Deferred tax
asset
Deferred tax
liabilities
(Thousands of Euro)
December 31, 2002
-
5,137
Accrued expenses
(871)
(net)
1,808
1,808
13,515
13,515
25
25
14,477
20,485
Deferred other operating loss
Deferred amortization costs
Total
Offset
Deferred income from provisions
Offset of defer tax Liability
(871)
(871)
(871)
December 31, 2003
Deferred depreciation costs
-
19,614
(167)
-
(167)
606
606
(13,515)
-
(13,515)
(13,076)
606
(13,682)
(13,682)
6,538
The rate used for the calculation of deferred taxes is 35.00%, which is the applicable corporate income tax
rate.
Deferred tax for other income from provisions is related to the reverse of provision for the dispute with the
operator of Stihima.
Retirement benefit costs are deducted in determining accounting profit as service is provided by the
employee. However, in determining taxable profit, these costs are deducted when retirement benefits are
paid by the Company. This difference results in the recording of deferred tax assets as economic benefits
will flow to the Company in the form of a deduction from taxable profits when retirement benefits are
paid.
Page 180
24. Borrowings
The Group’s outstanding loans have the following maturities:
As at December 31,
2004
2003
(Thousands of Euro)
Less than one year
21,574
36,762
One year to five years
25,345
46,920
-
-
46,919
83,682
Total borrowings
The weighted average effective interest rates were , 3,51% at December 31, 2004, and 3.74% at
December 31, 2003. The Group’s loans are floating rate, consisting of a spread over six- or three-month
EURIBOR ranging from 0.45% to 0.95%, depending on the loan.
The repayment terms of the loans are the following:
Loan
Number of
installments
Installments
First
installment
(Thousands of Euro)
Loan of €29,347
200
Weekly
January 1, 2002
Loan of €29,347
11
Semi-annual
January 1, 2003
Loan of €44,021
9
Semi-annual
June 30, 2003
25. Other Liabilities – Non-current
As at December 31,
2004
2003
(Thousands of Euro)
Warranty
agents
deposits
from
Total Other Liabilities
lottery
5,277
5,092
5,277
5.092
Warranty deposits from lottery agents represent amounts placed on deposit to jointly secure obligations of
the agents.
The warranty deposits are repaid to agents only when they cease to act as agents.
Page 181
26. Trade and Other Payables – Current
As at December 31,
2004
2003
(Thousands of Euro)
Suppliers
42,648
33,940
Prize payouts to the lottery and
betting winners
58,390
55,388
1,149
2,556
14,992
10,620
117,179
102,504
Dividends payable
Other payables
Total trade and other payables current
27. Employee Benefit Plans
The parent company provides two define benefit plans. None of the subsidiaries provides any retirement
plan. The analysis of each scheme is as follow:
Retirement compensation plans
A lump sum benefit is payable on termination of service equal, for each year of service, to one-fourteenth
of the parent’s company employee's total compensation during the employee's last year of service plus a
proportion of overtime pay and of the allowance payable based on years of service. The liabilities for
these retirement benefits are unfunded, except to the extent the Company prepays retirement benefits to
each employee. See Notes C.16, C.19 and paragraph B(xi) under Accounting Policies. The Company
periodically employs outside actuaries for the purpose of determining its obligations under this plan.
On service rendered up to December 31, 2004, and 2003 the present value of retirement benefits, based
on benefits committed under the terms of the plan and using projected salary levels, is €20,910,850 and
€21,080,092 respectively.
An amount of €1,415,653 is the current cost of the period allocated to cost of sales, administrative and
distribution expenses proportionally, while the cost for 2003 was €2,163,945. An amount of €294,000
charged to “Expenses for unfunded pension liabilities” pertains to the liability up to December 31, 2002.
Benefits based on pension contract
The Company’s pension contract was amended on February 2003, with effect as of January 1, 2003, to
significantly increase the benefits of employees. In light of this increase the Company had an actuarial
study performed in respect of these benefits. In addition, the Company determined that going forward
should recognize this plan as a benefit plan rather than a contribution plan, as it had previously because
of the limited amount of liability.
According to the actuarial study, an amount of €3,272,000 pertains to a liability as of December 31, 2002,
recorded as a change in accounting policy charging the “Expenses for unfunded pension liabilities”. An
amount of €315,767 is the current cost of the period allocated to cost of sales, administrative and
distribution expenses proportionally while the cost for 2003 was 356,832.
The reconciliation of the schemes at the balance sheet date is as follow:
Page 182
(Thousands of Euro)
Retirement
compensation plan
0,00
19,242
294
3,272
3,566
19,536
3,272
22,808
-
(921)
(921)
(620)
-
(620)
Payments
Utilized
2,164
357
2,521
21,080
2,708
23,788
-
(565)
(565)
(1,585)
-
(1,585)
Payments
Utilized
Total
19,242
Unfunded liabilities up to December 31,2002
Restated
Pension contract
1,416
315
1,731
20,911
2,458
23,369
The principal actuarial assumptions used as at December 31, 2004 and 2003 are as follow:
2004
2003
Discount rate:
4.50%
5.00%
Expected rate of salary increases:
4.50%
2.50%
Average future working life
11,12
9,83
28. Provisions
Provision for bad debts
Other
provisions
Total
(Thousands of Euro)
December 31, 2002
3,597
65,480
69,077
2,563
82,531
85,094
December 31, 2003
(15)
-
(15)
6,145
148,011
154,156
5,233
-
5,233
(499)
-
(499)
-
(148,011)
(148,011)
10,879
0
10,879
Reversed provisions
December 31, 2004
The amount of € 148,011,000 classified under “Other provisions” as at December 31, 2003, was intended
to cover the total estimated loss might incur due to the payment of compensation to the company
undertaking to operate Stihima. After the Athens court favorable decision the amount was totally reversed.
See also note C5
Page 183
29. Cash Flows from Operations
The reconciliation of net profit to cash flows generated from operations is as follows:
For the Period
December 31,
ended
2004
2003
(Thousands of Euro)
Net profit
505,633
235,101
Adjustments for:
Income tax
266,154
Deferred tax
13,076
146,459
279,230
(14,477)
131,982
Depreciation
8,930
6,249
Amortization
20,136
17,955
Interest income
(9,547)
(7,947)
Interest expense
2,411
4,191
Changes in working capital
Inventories at the beginning
Inventories at the end
541
(482)
Trade and other receivables
427
59
(541)
(114)
(24,849)
(50,917)
Payables
11,371
1,894
Provisions
(142,778)
85,094
1,166
5,166
(92)
55
Non-cash charge on income
statement
(2,317)
(110)
Cash
generated
operations
649,353
428,599
Retirement benefits
Minority interest
from
The analysis of cash and cash equivalents is presented in Note 20.
D. Other Disclosures
1. Contingencies
Contingent liabilities:
There are no material claims by third parties against the company with the exception of those set forth in
a letter by our legal advisor Mr. N. Tomaras, which pertain to the following: a) Lawsuits filed by
G.Kymionis, B.Kymionis, E. Karayianni, and S.Valaki for the amounts of €88.041, €88.041, €27.806.309,
and 1,511,371 respectively, the outcome of which is expected to be in favor of the Company according to
the legal advisor. b) labor cases (typographers and other extraordinary personnel) involving the amount
of €220,212 which are going to be permanently settled c)Lawsuits filed by agents requesting amount of €
633,000. d)Lawsuit by agent requesting compensation for damages amounting to € 3,595,000 e) Lawsuit
for moral damages amounting to € 80,152 f) Lawsuit by a Stihima player requesting compensation
amounting to € 3,668,378. According to the legal advisor the case has limited possibilities to be
unfavorable for the company. In the extreme situation where the outcome is negative the compensation
must be paid by the operator of Stihima.
OPAP S.A. has signed a contract with INTRALOT S.A., in relation to the operation of certain parts of
Stihima. The contract signed by OPAP S.A. and INTRALOT S.A. specifies that the betting coupon will
include a variety of betting events including absolute-fixed odds and variable-fixed odds betting games.
Page 184
INTRALOT S.A. requested compensation from the Company for damages due to the Company’s failure to
introduce horse and greyhound race betting games. The Company and INTRALOT S.A. sought to resolve
the dispute through arbitration.
A three-member Arbitration Court issued a decision granting INTRALOT S.A., in relation to the operation of
certain parts of Stihima, the amount of €36,900,000 for every year that the commencement of the horse
and greyhound racing betting is delayed from March 29, 2001. According to this decision, OPAP S.A. must
pay this amount for a period commencing from March 29, 2001 until horse and greyhound race betting
begins to operate or until the relevant contract expires (January, 28, 2007). Based on the above decision
the management had established a provision amounted € 148,011,000 until December 31,2003.
Regarding the above decision the legal department of OPAP S.A. had requested from the Athens Court of
Appeal the rescission of the decision. The Appeal was discussed in the Court on October 7th, 2003 and
issued a decision favorable to the company.
Based on the above decision there is no obligation for compensation to INTRALOT S.A. INTRALOT S.A.
exercised its right to appeal against the Athens Court’s decision, by applying to the supreme court (Arios
Pagos) for the reversal of that decision.
OPAP’s management considers that there are limited possibilities for a cassation of the Athens Court’s
decision.
The Greek tax authorities have not audited the Company for the year 2003 and 2004. At the time of any
tax audit, additional liabilities may result, which management estimates will not substantially impact total
liabilities. For this reason a relevant provision has not been established.
2. Commitments
Contracts for operating Stihima:
The Parent Company has entered into arrangements with Intralot SA granting it the exclusive right to
operate certain elements of Stihima for 7 years beginning in 1999. Under the terms of this agreement,
the contractor selects the betting events, sets the odds, prints the tickets, carries out advertisement,
monitors the operation of Stihima and is responsible for the risk management of Stihima. All future fixed
odds and non-fixed odds betting games are also expected to be operated by the same contractor, under
the agreement, including athletics, horseracing (non-domestic) and greyhound racing. Notwithstanding
these agreements, the Company retains the exclusive management of the games and participates actively
in many tasks related to their operation. In addition, the contractor trains the Company’s staff in all
matters relating to the operation of Stihima, as required under the terms of the agreement.
The Parent Company also has the following other main commitments:
a) Obligation for the supply of printing paper and coupons.
OPAP has signed contracts for the purchase of paper for printing coupons for games and a contract for the
purchase of paper coupons for specific games.
b) Maintenance – Operation of information technology department.
The central data processing system is maintained by Intracom S.A. pursuant to an agreement dated
February 1997. Under the agreement, Intracom S.A. is required to provide and maintain hardware,
central system software, the LOTOS (Lottery Operating System) lottery software platform which was
developed by Intralot S.A., agency terminals and to develop operational procedures relating to the data
processing system. The term of the agreement varies with the service provided. For maintenance
services in respect of hardware and central software systems, the term extends to 2007.
c) Development and Maintenance of software for games of EXTRA 5 and SUPER 3
Intracom S.A. is required to provide and maintain the software for the operation of the numeric games
EXTRA 5 and SUPER 3. The term of the agreement varies with the service provided and the contract
extends for 10 years starting at May 25th, 2002.
d) Development and Maintenance of ERP software
Intracom S.A. is required to provide and maintain ERP related to management and financial services. The
maintenance is extended to a period of five years starting at May 25, 2002, and the cost varies with the
service provided.
Page 185
e)Contracts for operating Stihima in Cyprus:
On April 2nd 2003 Glory Leisure Ltd (OPAP’s subsidiary since October 1st, 2003) signed an agreement with
Glory Technology Limited regarding the use rights of UGS (Universal Game System INTEGRATED TURNKEY SOLUTION) system of Glory Technology Ltd which automate the on line betting operation. The
duration of the agreement is seven years with the right of three years renewal. The annual charge for the
use of the system is calculated 5% of the total annual turnover(plus value –added tax ). An annual fee for
the service of maintenance that Glory Technology Ltd will provide was also agreed .The maintenance fee
is 14 % (plus value –added tax ) of the annual use charge .
For 2004 the cost of use and maintenance of UGS (Universal Game System INTEGRATED TURN-KEY
SOLUTION) System came up to € 777,171.04 (€ 38,043,51 for 2003 calculated for one month).
f) As at December 31, 2004 the Group is a party to an operating leasing agreement relating to
transporting vehicles. Future minimum payments under this agreement are as follows:
As at December 31,
2005
2004
(Thousands of Euro)
Less than one year
One to five years
481
538
1,259
2,152
-
-
g) As at December 31, 2004 the Group is a party to a lease agreement relating to administration building.
Future minimum payments under this agreement are as follows:
As at December 31,
2005
2004
(Thousands of Euro)
Less than one year
One to five years
3,754
2,882
10,690
10,608
-
-
3. Off Balance sheet events
There are no important matters that have occurred since the balance sheet date that could materially
affect the financial statements.
Page 186
17. APPENDIX
Invitation to the Ordinary General Assembly of the Shareholders for Fiscal Year-End 2004
Financial Statements OPAP S.A.
•
Addendum Appendix Fiscal Year-End 2004
•
Board of Directors Report Fiscal Year-End 2004
•
Balance Sheet 2004
•
Auditors Report Fiscal Year-End 2004
•
Periodic Financial Statements OPAP S.A., quarter, semiannual, nine month 2004
•
Cash-flow Statements 2003 – 2004
Consolidated Financial Statements OPAP S.A.
•
Addendum Appendix for Consolidated Fiscal Year-End 2004
•
Board of Directors Report for Consolidated Fiscal Year-End 2004
•
Consolidated Balance Sheet 2004
•
Auditors Report Fiscal for Consolidated Year-End 2004
•
Periodic Consolidated Financial Statements OPAP S.A., quarter, semiannual, nine month 2004
•
Consolidated Cash-flow Statements 2003 – 2004
Consolidated Financial Statements OPAP GLORY LIMITED
•
•
Auditors Report Fiscal for Consolidated Year-End 2004
•
Consolidated Balance Sheet 2004
Financial Statements GLORY TECHNOLOGY LIMITED
•
•
•
Balance Sheet 2004
Financial Statements OPAP (CYPRUS) LIMITED
•
•
•
Balance Sheet 2004
Financial Statements OPAP INTERNATIONAL LIMITED
•
Advisors Report Fiscal Year-End 2004
Page 187
•
•
Balance Sheet 2004
Page 188

pamestihima.gr

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