I. Business development and status of the company
We are satisfied of submitting the financial statements as of December 31, 2006, which once more show a positive view of its business development. It is our understanding that these financial statements reveal through a detailed analysis, better than through any other way, the results of the annual management carried out by all shareholders and the effect of applied policies and business strategies used during the year caused on the current status company.
The first entry to be analysed should be the annual turnover which amounted to Euros 64.594.722,89 in 2006, a 11,76% higher than the previous year. This positive figure is high-valued taking into account the financial crisis our geographical activity field is going through.
Secondly, the main entry in our costs, the provisions, which mean the 81% of the total working expenses, have increased a 14% higher than the one registered in the previous year and in relation to the sales, the provisions mean the 80% of the sales, when in the previous year they covered the 79%.
The working expenses with a weighted incidence have been porcentually increased over the sales with respect to the previous year, surpasing from 16% to 18%. We should take into account that a 4% is included due to the insolvencies’ fundings in order to value this increase causes. As a consequence, the total working expenses have in a absolute treatment increased so that the gross working profit has decreased with respect to the previous year amounting to Euros 2.270.116,54.
The profit of ordinary activities together with the positive financial results have exceed 2,4 millions Euros, which means 3,77% over sales. At last, the profit and loss account has amounted to Euros 1.432.687,95, which represents the 22% of the annual net turnover. Per each sold Euros 100, the company obtains Euros 2,22 after income what means a very important ratio in our activity field and even more inside the violent crisis we are getting through.
Lastly, we should review some aspects of the funds flow statement: in the year 2006 the resources generated by operations have increased to 1,7 million Euros, which joined to the working capital decrease as so the disposal of fixed assets and the borrowing to finance investments have resulted in funds which amounted to 5,2 millions Euros. These funds are aimed to the fixed assets acquisition for an amount of 2,7 millions Euros, to pay off long-term debts for 0,12 million Euros and to the distribution of dividends for 2,3 millions Euros.
II. Possible development of the Company
The main policies of our company strategies are aimed to keep a positive business development. On a short term basis relevant increasing percentages on the main economic aggregates are expected, keeping the quality and solvency of our balance. Budgets are confirmed by very positive results registered until now, even taking into account the great difficulties which have been put forward in general to the national and international economic activity and in particular to the specific field we are working on.
III. Research and development activities
Given our economic field’s characteristics, the Company did not carry out any research nor development task.
IV.Acquisition of Own shares
During the year, the Company has not acquired any own share.
V.Important events for the Compay taken place after the year-end closing
There are not important events after the year-end closing which could affect to the financial results or, if do not affect to the 2006 financial statements, but should be known by the partners.
Marbella, March 31, 2007