SYSTEMS SUNLIGHT S.A

Transcription

1 SYSTEMS SUNLIGHT S.A Registration Number: 31055/04/B/94/157 (2006) No G.E.C.R ERMOY 2 & NIKIS, ATHENS ANNUAL REPORT FOR THE FINANCIAL YEAR FROM JANUARY 1 ST, 2016 TO DECEMBER 31 ST, 2016 ACCORDING TO INTERNATIONAL FINANCIAL REPORTING STANDARDS (I.F.R.S) Restated 1

2 Table of Contents 1 Representations of the members of the Board of Directors Management report of the Board of Directors on the restated consolidated and corporate financial statements for the year Performance and Financial position of the Group/Significant Business Issues Investment in research & development Risk Management and Policies Related parties transactions Company s main branches Significant Post Balance sheet events Independent Auditor s Report Financial Statements Statement of Financial Position (Consolidated and Separate) Statement of Comprehensive Income (Consolidated and Separate) Statement of Comprehensive Income (Consolidated and Separate) - continue Consolidated Statement of Changes in Equity Separate Statement of Changes in Equity Statement of Cash flows (Consolidated and Separate/ Indirect Method) General information for the Group Activities Basis for the preparation of the financial statements Statement of compliance Presentation currency Use of estimations and management judgments Basis of measurement Restatement of the 2016 Financial Statements Reference period Changes in Accounting Policies Basic accounting policies Significant accounting judgments, estimations and assumptions Consolidation Foreign currency translation Tangible assets Intangible assets Impairment of assets Financial instruments Inventories Trade receivables Cash & cash equivalents Share capital Loans and factoring settlements Current and Deferred Income Taxes Employee benefits Grants Provisions Recognition of income and expenses Leases Functional Segments Dividend distribution Definition of EBITDA for the Group

3 9.22 Risk Management and Policies Group Structure and Method of Consolidation Subsidiaries with material non-controlling interests Explanatory notes on the Financial Statements Tangible assets Intangible assets Investments in Subsidiaries Investments in associates Investment portfolio Other long-term receivables Inventories Trade receivables Other receivables Cash and Cash Equivalents Equity Deferred tax receivable and liability and tax reconciliation Liabilities for employee benefits and other provisions Borrowings Other long-term liabilities Trade liabilities Other short-term liabilities Provisions Sales Operating expenses per category Other operating income /expenses Financial income/expenses other financial results Related party transactions Contingent liabilities and receivables Commitments-guarantees-encumbrances Segment Reporting Dividends Number of staff and employee benefits Post Balance sheet events Approval of financial statements

4 1 Representations of the members of the Board of Directors The below statements are made by the following representatives of the Company s Board of Directors: 1. Vasileios Billis, Chairman of the Board of Directors and Chief Executive Officer. 2. Michael Mastorakis, Chief Financial Officer and member of Board of Directors. The undersigned, under the aforementioned authority, appointed for this purpose from the board of directors of the company with the name Systems Sunlight S.A declare and certify that: (a) The attached restated annual company and consolidated financial statements of SYSTEMS SUNLIGHT S.A for the fiscal period 01/01/ /12/2016, prepared according to the prevailing accounting standards, present truly and fairly the assets and liabilities, the equity and the financial results of the Company as well as the companies included in the consolidation as aggregate, and (b) The attached restated BoD Report provides a true view of the Company s and the companies included in the consolidation as aggregate, performance and results including a description of the main risks and uncertainties to which they are exposed. Athens, 31 May 2017 The designees THE CHAIRMAN OF THE BoD & THE CHIEF EXECUTIVE OFFICER THE CHIEF FINANCIAL OFFICER & MEMBER OF THE BoD VASILEIOS A. BILLIS MICHAEL Κ. MASTORAKIS I.D ΑΚ I.D. Χ

5 2 Management report of the Board of Directors on the restated consolidated and corporate financial statements for the year 2016 Dear Shareholders, According to the relevant stipulations of the law 2190/1920, we cite for the year 2016, the consolidated management report of the Board of Directors of the Company Systems Sunlight S.A. on the restated consolidated and corporate financial statements of the respective year. 2.1 Performance and Financial position of the Group/Significant Business Issues In 2016, in a particularly unfavorable period for the Greek economy, the Group managed to achieve significant improvement in its numbers, at all levels, being the result of its extroversion, the ongoing plan to rationalize its functions, as well as the improvement of its cost base. Operating in several segments of the international battery market, for industrial, defense and consumer applications, the group has strategically focused on the production and distribution of technologically advanced, high quality energy solutions to foreign markets. It is worth being noted that over 83% of the Group revenues are exported. At the same time, Group continues its investment program of cautiously expanding its production capacity, in order to achieve its strategic target for further penetration and improvement of its competitive position, in the large markets of Europe and Americas. More specifically, 2016 Group Sales reached 154 mil., compared to 133 mil. in FY2015, an increase of 16%, whereas the Company s revenues reached 169 mil. versus 137 mil. of FY2015 (23% increase). The aforementioned is mainly attributed to the increase of market share and revenues of all key product categories of the Company, while the specific figures constitute historical records. Special reference is given to the segments of industrial batteries and batteries for defense applications, where extensive know how, product quality, logistics efficiency and after sales service are critical success factors. Gross operating profit: Group s profit margin for the year 2016 increased to 21%, 280bps higher compared to the previous year (18,2%) attributed to the favourable product mix, as well as the operations efficiency of the two production sites of the Group. It should be noted that, the Group s subsidiary, Sunlight Recycling, in its second year of actual operation, managed to substantially improve its production figures and significantly contribute to the lead purchase portfolio of the parent Company. Gross operating profit for the Group and the Company reached 32 mil., increased by 33% and 30% respectively, compared to FY2015. Earnings (losses) before interest, taxes, depreciation and amortization. (EBITDA Note 9.21): At Group level, EBITDA reached 17,2 mil. (17,2 mil. for the Company as well) increased by 41% (29% at Company level), as a result of the aforementioned improvement in gross profit, as well as, in the proportionally low increase of distribution expenses and the fact that administrative expenses remained at FY2015 level. EBITDA margin, reached 11,2% and 10,2% for the Group and the Company, versus 9,2% and 9,8% respectively, in the previous year. 5

6 Earnings (losses) before tax (ΕΒΤ): The above mentioned evolution of operational profitability and despite the increased finance costs, being the result of increased working capital requirements and costs related to the expediting of specific orders, led to earnings before taxes amounting to 2,3 mil., versus losses in FY2015 of 2 mil.. Respectively, the Company s earnings before taxes amounted to 5,3 mil. versus 1,9 mil. in the previous year. Group s net borrowings, amounted to 75 mil. versus 76 mil. in 2015, however, it should be noted that at , the Company had just received a significant down payment for the execution of a specific project. In nominal values, borrowings are approx. 7 mil. lower than 2015, being the result of Group s continuous effort for deleveraging and improvement of capital structure. Equity, has reached 31,4 mil. versus 28,6 mil. in FY2015. The basic financial ratios for the Group are illustrated below: Financial Ratios General Liquidity 77% 81% Equity / Total Liabilities 24% 21% Net Borrowings / EBITDA 4,4 6,2 EBITDA / Sales 11,2% 9,2% 2.2 Investment in research & development The Group sets innovation as a strategic target and for this, invests significant financial resources in the research and development with emphasis in the development of products/ solutions for new applications, in continuous improvement of quality, reliability and the useful life of existing products as well as for storage of power supply systems. 2.3 Risk Management and Policies Sources of risk The Group s activities create several financial risks, including foreign exchange risk and interest rate risk, credit risk and liquidity risk. The overall risk management program of the Group focuses on the volatility of financial markets and aims at minimizing the possible adverse effects from such volatility on the Group s financial performance. Risk management is applied by the Company s financial management division based on policies approved by the Board of Directors. The procedure is as follows: Evaluation of the risks associated with the Group s activities and operations. Appropriate Methodology planning and selection of appropriate financial products to reduce risks and Execution / implementation, in accordance with the procedure approved by management, of the risk management process. The Company s Financial Management Division does not perform speculative transactions or transactions not related to the commercial, investment or financing activities of the Group. 6

7 The financial products used by the Group mainly consist of bank deposits, transactions in foreign currency under current prices, FX and Lead purchases forward agreements, bank overdrafts, receivables and payable accounts, loans, investments in securities and liabilities that arise from financial leasing contracts. Current Conditions Prevailing in the Greek Economy The Greek Economy continues for 8th year to operate in recession, facing decreased purchasing power, constraints in available finance resources and the resulting reduction in liquidity. Capital controls, despite the attempt in 2016 to be smoothed out, continues to impose huge obstacles in every day foreign transactions, while at the same time affecting the credibility of Greek entities over their foreign suppliers, which further deteriorates their cash flow planning. During this difficult period, Group s management has enforced and continues to operate all necessary measures in order to adequately face all impacts from the capital controls. Furthermore, the fact that over 80% of the Group s revenues are export sales, facilitates in significant degree the normal flow of raw materials from abroad. Additionally, the operation of the subsidiary Sunlight Recycling further contributes in ensuring the uninterrupted supply of the Company s production with lead. Hence, despite the adverse domestic economic environment and under the condition that it will not further deteriorate, the risk of disruption of the normal operations of the Group as a result of the imposition of capital controls is considered low. Based on the overall evaluation, the Group's Management has concluded that there is no need to recognize provisions or impairment charges related to the aforementioned events for the year ended December 31, Foreign Exchange Risk The Group operates in an international scale and therefore is exposed to currency risk, that arises mainly from fluctuations of the USD ($) against the EUR ( ) exchange rate and, in a significantly lower degree, from fluctuations of the Romanian Lei, while the bulk of transactions are made in the Group's functional currency, Euro ( ). The risk arises from future trade transactions, receivables and liabilities in foreign currency and net investments in foreign operations (subsidiary in Romania). The Group makes sure that cash outflows in foreign currency are offset by respective FX forward contracts in order to minimize the foreign exchange risk. If foreign currencies fluctuated by 5% against the Euro with all other variables held constant and the Group had not made currency hedging effects, the impact on operating results, in equity and the net profit of the Group, for the current and prior year would result as follows: Exchange rate /$ /$ -5,00% 5,00% -5,00% 5,00% Results before Tax Thous Net results Thous Equity Thous Price risk Products prices, which are mainly defined by international markets and global demand and supply, have as a result the Group's exposure to fluctuations of relative prices. Lead which is the key raw material for lead acid batteries production is considered one of the major metals (base metals) whose price is traded in the international commodity markets with the most significant being the London Metal Exchange. The Group is directly exposed to variations in the price of lead, since it is the main component of the production cost of lead - acid batteries. Regarding the variation in the price of lead, the Group mainly adopts the natural 7

8 hedging strategy, by matching the lead base price in the selling price list to the purchase price. In cases where natural hedging strategies cannot operate, the Group has started using hedging tools, in order to conclude on their effectiveness and their compatibility with the Groups operations. Environmental risks: The environmental protection and care are totally compatible goals with the Groups financial and business development. As a result, the Group closely monitors all the changes in the relevant laws for the protection of the environment and ensures that it takes in advance all necessary measures to avoid the risk of failure to comply with the environmental legislation and minimise its environmental impact. Interest rate risk The Group's assets which are exposed to interest rate fluctuations relate mainly to cash and cash equivalents. Nevertheless, under the current economic situation with low interest rates and low need to retain cash, the respective risk is consider to be low. In addition, the Group for its total borrowings, within this steady state of low interest rates, makes use of floating interest rate products. In any case, the Group s policy is to minimize exposure to cash flow interest rate risk. In 31/12/2016, the Group is exposed to interest rate market changes with regard to bank borrowing and its cash and cash equivalents, which is subject to a floating interest rate. The following table illustrates the sensitivity of the fiscal year results as well as of the equity in a reasonable change of the interest rate of + 1% or -1%: THE GROUP Amounts in 1% -1% 1% -1% Impact in the year s results Impact in Equity THE COMPANY Amounts in 1% -1% 1% -1% Impact in the year s results Impact in Equity Credit Risk The Group's exposure to credit risk is limited to financial assets which is analyzed in the items of the Statement of Financial Position, "Other Long Term receivables", "Trade receivables", "Other receivables" and "Cash and cash equivalents. The Group s Credit control department constantly monitors its customers credit rating characteristics and develops accordingly its credit policy. As a result of its large and diverse customer base, the Group does not face significant credit risks, while, at the same time, makes use of the available credit insurance facilities, factoring and, when necessary, letter of credits (LCs). Moreover, the Group applies approved credit control procedures relating to the granting of credit, the credit limits and the management of its receivables. The amounts due are constantly evaluated and a provision for a doubtful debt is recognised when necessary. 8

9 Management believes that there is no material credit risk, which is not covered by an insurance limit as a guarantee of the receivable or by the provision from doubtful debts which is incorporated in the financial statements. Liquitidy Risk Efficient liquidity risk management requires sufficient cash and availability of necessary available funding sources. The Group s Treasury departments manages its cash flow needs based on systematic cash flow monitoring of the expected cash inflows and outflows, which is performed on daily basis, within the terms of continuing operations and uninterrupted funding of its business activites. Liquidity management is succeeded through maximization of working capital management, as well as the appropriate mixture of own cash and approved borrowing facilities. The Group and the Company, at present negative working capital, since their current liabilities exceeds their current assets by thous. and thous. respectively. The relevant figures for the previous year for the Group and the Company where thous. and thous. respectively. As illustrated in the accompanying financial statements, the Groups revenues for 2016 amounted to thous., increased by 15,8% whereas the Gross Profit for the current year was increased by 34% compared to the respective period of the previous year. Groups EBITDA for 2016 amounted to thous. versus thous. in previous year (+41%) depicting the improving performance of the Group. At the same time, the Group and the Company present positive operating cash flows, as well as strong capital adequacy. The Group and the Company has programmed and apply several action plans in order to further strengthen their liquidity and further improve their financial position. More specifically, based on 2017 budget, management expects further improvement in its liquidity, which will result from its business activities and the increased operating profits of the specific year. Furthermore, unused borrowing facilities are available for the Company, while funds can also be raised from further investments from its shareholders, which is not expected however to be necessary. Under all these, it is estimated that no funding and liquidity problems will arise for the Group and the Company within the next 12 months. Capital Management The primary objective of capital management of the Group and the Company is to ensure high credit rating, proper business and achievement of their development plans in order to support and expand the activities of the Group and of the Company and to maximize shareholder value. For capital management, the Group monitors the ratio "Net Debt to Total Equity". As net debt, the Group defines interest bearing bank debt (including current and non-current borrowings as shown in the statement of financial position) less cash and cash equivalents. The Group manages the indicators in such a way as to maintain a credit rating compatible with its strategic growth. FINANCIAL INDICATORS OF FINANCIAL STATEMEMTS GROUP GROUP COMPANY COMPANY Long term borrowings Short - term borrowings

10 Long-term loans payable in the next 12 months Cash and cash equivalents Net Bank Debt Total Equity Net Bank Debt / Total Equity 2,39 2,65 1,41 1,76 Prospects of the Group and the Company Despite the difficult situation prevailing in Greece, Group considers that market conditions in the geographical areas where it operates favor further improving of its competitive position and hence, its market share and revenues. The fact that a huge part of its sales is in abroad and especially in territories with economic growth, allows the Group to implement a cautious investment program with the aim to increase its production capacity. The development of new and technologically advanced products and energy solutions continue to be of high priority, establishing Sunlight as one of the most innovative and reliable suppliers of lead acid batteries around the world. 2.4 Related parties transactions In this section, the most significant transactions between the Company and its related parties are depicted, as they are defined in IFRS 24. The transactions and the receivables/ liabilities from trading activities, between the Groups Companies are illustrated as follows: 2016 Transactions Balances due from related parties Balances due to related parties Sales of goods and services to related parties Purchases of goods and services from related parties SUNLIGHT INDUSTRIAL S.R.L SUNLIGHT SYSTEMS GmbH SUNLIGHT ITALY S.R.L RETAIL WORLD ΑΕ SUNLIGHT RECYCLING SA TECHNOFORM SA ADVANCED LITHIUM SYSTEMS EUROPE ADVANCED LITHIUM SYSTEMS ALFASCOTT SA SITE DEVELOPMENT A.E AFIS SA OLYMPIA DEVELOPMENT A.E WEST NET DISTRIBUTION ΑΕ TRANSACTIONS Balances due from related parties Balances due to related parties Sales of goods and services to related parties Purchases of goods and services from related parties SUNLIGHT INDUSTRIAL S.R.L SUNLIGHT SYSTEMS GmbH SUNLIGHT ITALY S.R.L RETAIL WORLD ΑΕ SUNLIGHT RECYCLING SA TECHNOFORM SA ADVANCED LITHIUM SYSTEMS EUROPE

11 ADVANCED LITHIUM SYSTEMS ALFASCOTT SA SITE DEVELOPMENT A.E AFIS SA OLYMPIA DEVELOPMENT A.E WEST NET DISTRIBUTION ΑΕ Benefits towards the management in Group/ Company level are analyzed as follows: THE GROUP THE COMPANY THE GROUP THE COMPANY Amount in 31/12/ /12/ /12/ /12/2015 Gross wages and employer contributions Fees to members of the BoD Total The members of BoD that have signed an employment contract are included in the Group s payroll expenses, the total amount of which has been recorded in administrative expenses of the income statement. The total gross wages plus employer contributions for the aforementioned BoD members of the year 2015 amounting to No loans have been granted to any members of the BoD or any other executives of the Group (or their families) nor any receivables or payables exist. Related parties Borrowings The list of borrowings between related parties is as follows: Short Term Borrowings granted The Company granted at December 2014 a short-term loan to subsidiary Sunlight Recycling S.A amounted to 360 thous. aiming at its working capital funding. The balance of the loan as of amounted to 375,5 thous., while the total amount of the interest income for the year 2016 amounted to 18,2 thous. Related parties guarantees The mother Companya Systems Sunlight S.A. has provided guarantees on behalf of its subsidiary SUNLIGHT RECYCLING, in order for the latter to receive borrowings, with a total amount of thous. The Company has provided guarantees in favor of its associate Technoform S.A. towards the bank EFG Eurobank Ergasias SA for the purpose of receiving a short term borrowing up to the amount of 570 thous. 2.5 Company s main branches The Company retains the following branches: Manufacturing Plant in Neo Olvio Xanthi (Northern Greece). After Sales - Service Center in Acharnes, Athens. 11

12 2.6 Significant Post Balance sheet events In January 2017 SUNLIGHT SYSTEMS bought the minority interest of 10,48% of SUNLIGHT RECYCLING. Furthermore, OLYMPIA GROUP obtained with successive purchases of Systems Sunlight shares, additional percentage of 37,20% which resulted in obtaining the 50,12% of the Company s shares. The Group, within the frameworks of alternative funding research for its operations, is examining among others the issue of a public corporate bond and for this it has taken over all necessary actions. The Company proceeded in restating its published Financial Statements for 2016, as they were approved with the 17/02/2017 BoD decision. The restated financial statements for the year ending 31/12/2016, were approved by the BoD in 31/05/2017 and in comparison with the previously approved financial statements, include the additional note 6.5. The specific addition, concerns solely further disclosures, without influencing the published financial figures of 2016 financial statements, since it does not lead to any alterations on them. ATHENS 31/05/2017 FOR THE BOARD OF DIRECTORS THE PRESIDENT OF THE B.Ο.D. & CEO VASILEIOS Α. BILLIS ID N. ΑΚ

13 3 Independent Auditor s Report To the Shareholders of SYSTEMS SUNLIGHT S.A. Audit Report on the Restated Separate and Consolidated Financial Statements We have audited the accompanying restated separate and consolidated Financial Statements of SYSTEMS SUNLIGHT S.A. which comprise the separate and consolidated statement of financial position as of December 31, 2016 and the separate and consolidated statement of comprehensive income, statement of changes in equity and cash flow statement for the year then ended and a summary of significant accounting policies and other restated explanatory information. Management s Responsibility for the Restated Separate and Consolidated Financial Statements Management is responsible for the preparation and fair presentation of these restated separate and consolidated financial statements in accordance with International Financial Reporting Standards, as adopted by the European Union, and for such internal control as management determines is necessary to enable the preparation of separate and consolidated Financial Statements that are free from material misstatement, whether due to fraud or error. Auditor s Responsibility Our responsibility is to express an opinion on these restated separate and consolidated financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing which have been transposed into Greek Law (GG/B /2848/ ). Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the restated separate and consolidated financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the separate and consolidated financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the separate and consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the separate and consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the separate and consolidated financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the accompanying restated separate and consolidated financial statements present fairly, in all material respects, the financial position of the Company SYSTEMS SUNLIGHT S.A. and its subsidiaries as 13

14 at December 31, 2016, and of their financial performance and it s cash flows for the year then ended in accordance with International Financial Reporting Standards, as adopted by the European Union. Emphasis of Matter We draw your attention in the explanatory note 6.5 of the accompanying restated financial statements, where it is described the matter that the Company restated its separate and consolidated financial statements for the year 2016, for the purpose of providing further information to the public within the frameworks of obtaining approval for the content of the Company s prospectus for the public offering and issuance of its bonds in Athens Exchange Market. Report on Other Legal and Regulatory Requirements Taking into consideration, that management is responsible for the preparation of the Board of Directors Report according to the provisions of paragraph 5, article 2 of Law 4336/2015 (part B), we note the following: a) In our opinion, the restated Board of Directors Report has been prepared in accordance with the applicable legal requirements of articles 43a and 107A of the Codified Law 2190/1920 and the content of the Board of Directors Report is consistent with the accompanying restated separate and consolidated financial statements for the year ended December 31, b) Based on the knowledge we obtained from our audit of SYSTEMS SUNLIGHT S.A. and its environment, we have not identified any material misstatement to the restated Board of Directors Report. Athens, May 31, 2017 Certified Auditor Accountant Dimitra Pagoni I.C.P.A. Reg. No.:

15 ANNUAL RESTATED CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31ST DECEMBER 2016, ACCORDING TO THE INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS), AS ADOPTED BY THE EUROPEAN UNION. The attached restated financial statements were approved by the Board of Directors of SYSTEMS SUNLIGHT S.A as of 31/05/2017 and have been published on the Company s website It is noted that the condensed financial statements which have been published aim at providing the reader with a general view on the Company s and the Group s financial position and results but do not provide the reader with a complete picture of the financial position and results as well as cash flows of the Company and the Group according to the IFRS. 15

16 4 Financial Statements 4.1 Statement of Financial Position (Consolidated and Separate) THE GROUP THECOMPANY Amounts in Note 31/12/ /12/ /12/ /12/2015 Non-Current Assets Tangible assets Intangible Assets Investments in subsidiaries Investments in associates Other Investments Other Long-term Receivables Deferred Tax Receivables Current Assets Inventories Trade receivables Other receivables Cash & cash equivalents Total Assets Equity & Liabilities Equity Share capital Share premium Translation reserves Statutory reserve Other reserves Retained Earnings (losses) Equity attributable to parent s shareholders Non-controlling interests Total Equity Long-term Liabilities Long-term debt Liabilities for pension plans Deferred tax liabilities Other long term liabilities Total Long-term Liabilities Short-term Liabilities Short-term debt Trade and other payables Other short- term liabilities Provisions Total Short-term Liabilities Total Liabilities Total Equity & Liabilities The accompanying notes, pages constitute an integral part of the present financial statements. 16

17 4.2 Statement of Comprehensive Income (Consolidated and Separate) Amounts in Note THE GROUP THE COMPANY Sales Cost of Sales Gross Profit Other operating income Distribution expenses Administrative expenses Research & development expenses Other operating expenses Operating result Financial Income Financial Expenses Other Financial results Financial result Income (loss) from investment on associates Result before taxes Income tax Gains/ Losses after tax for the year from continuing operations Gains / (losses) after taxes Attributable to: Owners of the parent Non-controlling interests Earnings before interest, tax, investments, depreciation and amortization (EBITDA) The accompanying notes, pages constitute an integral part of the present financial statements. 17

18 4.3 Statement of Comprehensive Income (Consolidated and Separate) - continue Amounts in Note THE GROUP THE COMPANY Net gains / (losses) for the year Other comprehensive income : Amounts that may be reclassified in the Income Statement in subsequent years. Exchange differences on translation of foreign operations Amounts that will not be reclassified in the Income Statement in subsequent years Actuarial Gain / (Losses) Deferred tax from actuarial gain/(losses) Other comprehensive income/ (expense) for the year after tax Total comprehensive income/ (expense) for the year after tax Attributable to: Owners of the parent Non-controlling interest The accompanying notes, pages constitute an integral part of the present financial statements. 18

19 GROUP 4.4 Consolidated Statement of Changes in Equity Share Capital Share Premium Exchange Differences Statutory Reserve Other reserves Actuarial losses reserve Results carried forward Equity attributable to owners of the parent Noncontrolling interests Balance at 1/1/ ( ) ( ) Changes in Equity for the period Profit/(loss) for the year ( ) ( ) ( ) ( ) Other Comprehensive income (2.205) (41.042) (43.247) (43.247) Total comprehensive income for the year Transactions with owners of the parent 0 0 (2.205) 0 0 (41.042) ( ) ( ) ( ) ( ) Transactions between reserves (2.746) 0 0 Total transactions with owners of the parent (2.746) Balance at 31/12/ ( ) ( ) Total Changes in Equity for the period Profit/(loss) for the year ( ) Other Comprehensive income (899) (96.473) (97.373) (1.264) (98.637) Total comprehensive income for the year Transactions with owners of the parent Transactions between reserves Total transactions with owners of the parent 0 0 (899) 0 0 (96.473) ( ) ) Balance at 31/12/ ( ) ( ) The accompanying notes, pages constitute an integral part of the present financial statements. event that differences exist between this translation and the original Greek language financial statements, the Greek language financial statements will prevail over this document 19

20 4.5 Separate Statement of Changes in Equity THE COMPANY THE COMPANY Share Capital Share Premium Statutory Reserve Actuarial losses reserve Other reserves Results carried forward Total Balance at 01/01/ Changes in Equity for the period Profit/(loss) for the year Other Comprehensive income Total comprehensive income for the year Balance at 31/12/ Changes in Equity for the period Profit/(loss) for the year Other Comprehensive income Total comprehensive income for the year Balance at 31/12/ The accompanying notes, pages constitute an integral part of the present financial statements. event that differences exist between this translation and the original Greek language financial statements, the Greek language financial statements will prevail over this document 20

21 4.6 Statement of Cash flows (Consolidated and Separate/ Indirect Method) Amounts in Cash flow from Operating activities From to THE GROUP From to From to THE COMPANY From to Earnings (losses) before taxes from continuing operations Plus / Minus adjustments for: Depreciation & Amortization Depreciation of granted fixed assets Losses / (Profit) from sale of fixed assets Provisions Impairment of assets Foreign exchange differences Results (income, expenses, profit and losses) of investment activity Financial results Cash flows from operating activities before working capital changes Changes in working capital Decrease / (Increase) of inventories Decrease / (Increase) of trade receivables Decrease / (Increase) of other receivables (Decrease) / Increase of liabilities (apart from banks) Minus: Debit interest and related expenses paid Taxes paid Total inflows / (outflows) from operating activities (a) Investment activities Purchase of tangible and intangible fixed assets Sales of tangible and intangible fixed assets Interest received Total inflows / (outflows) from investment activities (b) Financing activities Proceeds from issued / assumed bonds (note 12.14) Proceeds from issued / assumed loans Proceeds from loans from related parties Payments of loans from related parties Payments of loans (note 12.14) Cash flow from financing activities from discontinued operations Total inflows / (outflows) from financing activities ( c ) Net increase / (decrease) in cash & cash equivalents for the period (a) + (b) + (c) Cash & cash equivalents at the beginning of the period from continuing operations Exchange differences in cash and cash equivalents Cash & cash equivalents at the end of the period from continuing operations The accompanying notes, pages constitute an integral part of the present financial statements. 21

22 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 5 General information for the Group Systems Sunlight SA resulted from the separation by the Company Germanos S.A. and contribution to the Company ARION, of the sector of production and trade of autonomous energy batteries for industrial, consumer and defense applications. The Company s headquarters are located in Athens, while it s Société Anonyme Reg. No. is 31055/04/B/94/157, according to the provisions of C.L 2190/1920 and its GEMI registration number is The attached Financial Statements ended 31st December 2016, were approved by the BoD on 17th February 2016 and approved by the Annual Ordinary General Shareholders Meeting on 15/03/2017. The accompanying restated financial statements were approved by the BoD on 31/05/2017 and in relation to the previously approved, they include the addition of the explanatory note 6.5. The specific addition, concerns solely further disclosures, without influencing the published financial figures of 2016 financial statements, since it does not lead to any alterations on them. The Company s website is Company s capital structure The Company s capital structure at 31/12/2016 is as follows: Capital Structure Number of Shares Percentage of participation % Panos Germanos ,38% Olympia Development S.A ,89% Trucibel Limited ,73% ,00% Board of Directors: At 7/12/2016 the Extraordinary General Meeting of Shareholders, elected the new Board of Directors whose composition was as follows: Vasileios Billis, Chairman of the BoD and Chief Executive Officer. Dimitrios Goumas, Non-executive member of BoD. Alexandros Manos, Non-executive member of BoD. Michael Mastorakis, Executive member of BoD. Stergios Nezis, Non-executive member of BoD. With the 15/03/2017 minutes of the Ordinary General Meeting of Shareholders, it was decided the election of a new Board of Directors whose composition was as follows: Vasileios Billis, Chairman of the BoD and Chief Executive Officer. Dimitrios Goumas, Vice President and Non-executive member of BoD. Alexandros Manos, Non-executive member of BoD. Michael Mastorakis, Executive member of BoD. Stergios Nezis, Non-executive member of BoD. 22

23 Ioannis Pantoleon, Non-executive member of BoD. 5.1 Activities Sunlight Group designs and produces integrated energy systems that feature innovation and high value-added Know-how. The production process is located in the industrial complex in New Olvio of Xanthi and constitute the Company one of the leading producers/distributors of energy products and systems in the world, specializing in the fields of: Energy storage systems for industrial, consumer and advanced applications (motive power solutions, reserve power solutions, submarine batteries, torpedo batteries, etc.). Energy and power system (generator sets, UPS, DC systems, industrial air conditioning). Energy services (consultancy and technical support, training, recycling, equipment rental). The Group provides to its customers complete solutions and a total coverage of their energy needs in sectors with particularly high demands, such as industry, the supply chain and transport, telecommunications, information technology, defence, construction and infrastructure projects, while 80% of the annual turnover comes from foreign clients. The plant covers an area of 142,000 sqm. with more than 55,000 sqm of covered areas. It has four (4) highly specialized production units: Industrial batteries closed and open type, Lead Technology Specialized submarine batteries technology, Lead Technology Torpedoes Batteries technology Silver-Zinc oxide Sunlight Group also owns the Company Recycling Batteries Lead, Sunlight Recycling S.A, which is the most modern Lead Acid batteries recycling plant in southern Europe, established in Komotini, with a recycling capacity of tons of scrap batteries annually, aiming at exploiting recycled products for the supply of the mother Company Systems Sunlight S.A.. The Group owns 51% of the company Lithium Systems Europe S.A which is the outcome of the strategic cooperation between Systems Sunlight S.A and Atlas Elektronik GmbH for the joint development of lithiumion batteries for defense applications. Furthermore, the Company owns all the shares of the battery distributor in Romania Sunlight Industrial SRL, while it has significant influence through participation in the capital of battery distributors Sunlight Italy SRL (Italy). Finally, the Group is the largest distributor of consumer batteries Toshiba in Europe. 23

24 6 Basis for the preparation of the financial statements 6.1 Statement of compliance The restated consolidated financial statements of the Group and the Company (the Financial Statements) for the fiscal year 01 January to 31 December 2016, have been prepared on a going concern basis, in accordance with International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB), and their interpretations publiced by I.F.R.I.C., as adopted by the European Union up to The Group applies all the International Accounting Standards (IAS), International Financial Reporting Standards (IFRS) and their interpretations applicable to its activities. The relevant accounting policies, a summary of which is presented in Note 9, have been applied in consistence to all periods presented. 6.2 Presentation currency The consolidated financial statements are presented in euro, the Group's functional currency, in other words the currency of the Group s parent and major subsidiaries domicile. The amounts are presented in Euro, unless if otherwise stated. 6.3 Use of estimations and management judgments The preparation of financial statements according to IFRS requires the use of estimations and judgments in applying the Group's accounting policies. Opinions, assumptions and management estimations affect the amount that a number of assets and liabilities are measured, the amount recognized during the year for some revenues and expenses, as well as the presented estimations of contingent liabilities. The assumptions and estimations are constantly evaluated according to historical and other factors, including expectations for the outcome of future events that are considered reasonable under the current conditions. These estimations and assumptions concern the future and as a consequence, the real results may deviate from the accounting calculations. The sectors, which involve a higher degree of judgment as well as the sectors in which assumptions and estimations are significant to the consolidated financial statements are presented in Note Basis of measurement The Group s financial statements have been prepared according to the principal historical cost. 6.5 Restatement of the 2016 Financial Statements The separate and consolidated financial statements of the Company for the year ending 31 st December 2016, were approved by the BoD of 17/02/2016 and on 20/02/2017it was granted an unqualified opinion through the independent auditors report. The specific financial statements were approved by the Company s Ordinary Shareholders Meeting which took place on 15/03/2017. The accompanying restated financial statements were approved by the BoD on 31/05/2017 and in comparison with the previously approved, they include the addition of the current note 6.5. The addition of the current note occurred for the purpose of providing further information to the public within the frameworks of obtaining approval for the content of the Company s prospectus for the public offering and 24