4.28.1 Share capital (x EUR 1,000) Ordinary shares 2005 2004
Shares in issue at 1 January 13,577,570 8,388,831
Employee share options exercised 0 968,369
Conversion of subordinate loan 6,289,000 4,220,370
Shares in issue at 31 December
19,866,570 13,577,570At 31 December 2005 the authorised share capital comprised 35,900,000ordinary shares (2004: 35,900,000). The shares have a nominal value of EUR 0.11 each. At December 2005 a number of 19,866,570 common shares (2004: 13,577,570) were in issue. As of this date the members of the board of management and the members of the supervisory board did not hold any shares in the company. The company held 4,100common shares (2004: 4,100) in its own share capital. The number of treasury shares held by the company at the end of the year under review amounts to 0,02% of the issued and paid up capital (2004: 0,03%).
4.28.2 Share premium
The share premium is considered to be paid in capital.
4.28.3 Convertible loan
This item refers to a 9% interest bearing subordinated convertible loan. Repayment will take place by converting the agreed twelve quarterly instalments, varying from EUR 83,000 up to EUR 255,000, into newly issued ordinary shares of the Company at a fixed conversion price of EUR 0.1134.
4.28.4 Dividend
The interest on the convertible loan amounting to EUR 107,000 (2004: EUR 157,000) is regarded as dividend payment.
Notes to the consolidated IFRS financial statements – continued
4.29 Interest-bearing loans and borrowings
This note provides information about the contractual terms of the Group’s interest-bearing loans and borrowings. For more information about the Group’s exposure to interest and currency risk, refer to note 4.29.3
(x EUR 1,000)
2005 2004
Secured bank loans 798 210
Convertible notes 750 0
1,548 210
Less: current portion of long-term loans -266 -210
1,282 0
4.29.1 Terms and debt repayment schedule (x EUR 1,000)
Total 1 year 1 to 2 2 to .5 more than
or less years years 5 years
Secured bank loans 798 266 266 266
Convertible notes 750 500 250
1,548 266 266 766 250
4.29.2 Secured bank loans
In 2005 a loan facility of EUR 842,000 was agreed with the Bayerische Hypo- und Vereinsbank AG in Augsburg (Germany). The loan has a term of three years. The interest rate is 6.5%.
The bank loans and the current liabilities to credit institutions are secured by a mortgage on land and buildings with a carrying amount of EUR 3,323,397, with pledge on machinery and
equipment and pledge on trade receivables and inventories.
4.29.3 Interest rates
The average interests paid were as follows:
Year Ended 2005 Year Ended 2004 Bank overdrafts 7.5% 5.0% Bank loans 6.5% 5.2%
Notes to the consolidated IFRS financial statements – continued
4.30
Convertible loan notes
The convertible loan amounts to a total of EUR 1,000,000. On 31 December 2005 an amount of EUR 750,000 had received by the company. The fourth instalment will take place on 15 January 2006. The convertible notes were issued on 29 April 2005.
The loan shall be redeemed by the Company in four consecutive annual payments starting 15 April 2009. The amount of each redemption will be EUR 250,000. Interest of 4.5% will be paid annually up till that settlement date.
After 1 January 2008 the Company has the right to redeem the outstanding amount of the loan in shares, subject to the average share price exceeding 130% - during 30 consecutive training days – of the conversion price of EUR 0.84. The share related to this early redemption will be
transferred to the lender within five days after the 30 days period ended.
(x EUR 1,000)
2005 2004 Nominal value of convertible loan notes issued 1,475 1,438
Equity component (net of deferred tax) -725 -1,438
Deferred tax liabilities 0 0
Liability components at date of issue 750 0
Interest charged 0 0
Interest paid 0 0
Liability component at 31 December 750 0
4.31
Deferred income tax liabilities
(x EUR 1,000)
2005 2004
Balance at 1 January 1,401 1,364
Debt from equity 0 60
Release change to the statement of earnings 1 -23
Balance at 31 December
1,402 1,401As a result of the revaluation of land and buildings in 2002, a provision for deferred tax liabilities has been formed amounting to 40% of the difference.
Notes to the consolidated IFRS financial statements – continued
4.32
Retirement benefit obligations
(x EUR 1,000)
2005 2004
Pension obligation 3,433 3,285
Plan assets to be netted off 1,365 1,306
Pension liability
2,068 1,979Pension assets
1,402 1,319Total
666 6604.32.1 Liability for defined benefit obligations
The Group makes contributions to a number of defined benefit plans that provide pension benefits for employees upon retirement in Germany. In the Netherlands the pension plan is classified as a Defined Contribution plan and/or similar arrangements for employees, if customary, are
maintained, taking local circumstances into account. In Germany the defined benefit pension plan comprising mitigated final pay arrangements is fully re-insured. In determining the annual costs the nature of the plan is recognised which includes (conditional) indexation of pension benefits insofar as the return on the separated investments surpasses the actuarial required interest. The required reserves of these obligations are recognised, net of plan assets, in the balance sheet. The most recent actuarial valuations of plan assets and the present value of the defined benefit obligation were carried out on 31 December 2005 by Höfer Vorsorge-Management GmbH & Co. KG, Mülheim an der Ruhr. The present value of the defined benefit obligation, and the related current service cost and past service cost, were measured using the projected unit credit method.
(x EUR 1,000)
2005 2004
Discount rate at 31 December 4.5% 5.5%
Expected return on plan assets at 31 December 4.0% 4.1%
Future salary increase 0% 0%
Medical cost trend rate 0% 0%
Future pension increases 1% 1%
4.32.2 Expenses recognised in the income statement (x EUR 1,000)
2005 2004
Current service costs 30 29
Interest on obligation 173 172
Expected return on plan assets -107 -116
Actuarial losses recognised in the year
Notes to the consolidated IFRS financial statements – continued
The charge for the year is included in the employee benefits expense in the income statement. The actual return on plan assets was EUR 58.000 (2004: EUR 65.000).
Changes in the present value of the defined benefit obligation are as follows:
(x EUR 1,000)
2005 2004
Opening defined benefit obligation 3,215 3,217
Service costs 30 29
Interest costs 173 172
Actuarial gain (-) or losses 509 -56
Pension payments -147 -147