INTERIM FINANCIAL STATEMENTS AS OF JUNE

Transcription

1 Company's No 7946/06/Β/86/2 in the register of Societes Anonymes G.E.MI , Vas. Georgiou Av., Halandri, 15233, Athens, Greece. Tel: , Fax: INTERIM FINANCIAL STATEMENTS AS OF JUNE 30, 2017 According to article 5 of Law 3556/2007 September

2 Table of Contents 1 Statements of Members of the Board in accordance with article 5 par 2 of Law 3556/ Review Report on Interim Financial Information Semi-Annual Board of Directors Management Report on the Financial Statements for the period from 1 January to 30 June Introduction Financial Performance and Position Basic Financial Ratios of the Group s consolidated results Significant Events in the First Semester of the Current Fiscal Year and until the date of writing the existing document Main Risks and Uncertainties for the Second Half of Objectives and Prospects for the remainder of Important Transactions between the Company and Related Parties Post Balance Sheet Events Interim Condensed Financial Statements for the period ended as at Statement of Financial Position Statement of Comprehensive Income Statements of Changes in Equity Cash Flows Statements Notes of the Interim Financial Statements of the six months of General Information about the Company and the Group Basis for preparation of financial statements Changes in Accounting Policies Important accounting estimates and judgements of Management Risk Management Group s structure Operating Segments Property, Plant and Equipment Intangible Assets Customers and trade receivables Other receivables Share capital Borrowings Other Current Liabilities Income Tax Turnover (Sales) Earnings per share Non-audited Fiscal Years Contingent liabilities and commitments Classification of financial instruments based on their valuation at fair value Number of Personnel Related Parties Post Balance Sheet Events Approval of interim financial statements

3 1 Statements of Members of the Board in accordance with article 5 par 2 of Law 3556/2007 The members of the Board of Directors of SIDMA S.A.: 1. MARCEL L. AMARIGLIO 2. NIKOLAOS P. MARIOY 3. DANIEL D. BENARDOUT in our above mentioned capacity declare that: as far as we know: A. the enclosed financial statements of SIDMA S.A. for the period of to , drawn up in accordance with the applicable accounting standards, reflect in a true manner the assets and liabilities, equity and results of SIDMA S.A., as well as of the entities included in Group consolidation, taken as a whole, according to article 5 of Law 3556/2007. and B. the enclosed report of the Board of Directors reflects in a true manner the development, performance and financial position of SIDMA S.A., and of the businesses included in Group consolidation, taken as a whole, including the description of the principal risks and uncertainties, according to article 5, para 6 of Law 3556/2007. Halandri, September 15, 2017 CHAIRMAN OF THE BOARD OF DIRECTORS VICE-CHAIRMAN OF THE BOARD OF DIRECTORS C.E.O. MARCEL L. AMARIGLIO NIKOLAOS P. MARIOU DANIEL D. BENARDOUT 3

4 2 Review Report on Interim Financial Information To the Shareholders of SIDMA S.A STEEL PRODUCTS Introduction We have reviewed the accompanying separate and consolidated condensed statement of financial position of the Company SIDMA S.A. STEEL PRODUCTS as at 30 th June, 2017, the relative separate and consolidated condensed statements of comprehensive income, changes in equity and cash flows for the six-month period then ended, as well as the selected explanatory notes, that constitute the condensed interim financial information, included in the six-month Financial Report according to Law 3556/2007. Management is responsible for the preparation and presentation of this condensed interim financial information, in accordance with International Financial Reporting Standards, as adopted by the European Union and which apply to Interim Financial Reporting (International Accounting Standard IAS 34). Our responsibility is to express a conclusion on this condensed interim financial information based on our review. Scope of Review We conducted our review in accordance with International Standard on Review Engagements 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity. A review of interim financial information consists of making inquiries, primarily to persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. Conclusion Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim condensed financial information is not prepared, in all material respects, in accordance with IAS 34. Emphasis of Matter We would like to draw your attention to the explanatory Note to the interim financial information, making reference to the fact that due to accumulated losses as at June 30, 2017, the total of the Company Equity was recorded as negative and as a result the provisions of article 48 of Law 2190/1920 apply. Moreover, the total value of the Company and Group current liabilities exceeds the total value of its current assets by an amount of K and K respectively. The aforementioned events may indicate the existence of uncertainty regarding Group s and Company s ability to continue as a going concern. As stated in the explanatory note 5.5.3, Group s Management has planned appropriate actions in order to enhance Group s and Company s financial position and going concern, condition which has been taken into account for the preparation of the accompanying separate and consolidated condensed financial information according to the going concern principle. Our opinion is not modified with respect to this matter. 4

5 Report on Other Legal and Regulatory Requirements Based on our review, no inconsistency or accounting mismatch has been identified between the items included in the six-month Financial Report, according to article 5 of Law 3556/2007 and the condensed interim financial information. Palaio Faliro, September 18, 2017 The Chartered Accountant Pavlos Stellakis I.C.P.A Reg.: No

6 3 Semi-Annual Board of Directors Management Report on the Financial Statements for the period from 1 January to 30 June Introduction The present Half Year Report of the Board of Directors which follows, refers to the first half year of the current period ( ) it was compiled and is in line with the relevant stipulations of the law 3556/2007 and the executive decisions of the Hellenic Capital Market Commission. The present report contains in a brief, but substantive manner all the important units, which are necessary, based on the above-mentioned legislative frame and depicts in a truthful way all the relevant indispensable according to the law information, in order to deduce a substantive and well-founded appraisal of the activity, during the time period in question, of the company SIDMA SA as well as the Group. Also, it contains a description of the principal risks and uncertainties that could affect the Group and the Company during the second half of 2017 and the most significant transactions between the Company and related parties. 3.2 Financial Performance and Position After a prolonged period of negotiation for the completion of the 2nd Assessment, in the second half of 2017 we hope that the Greek economy will enter a developmental path to recovery even though market financing conditions are still unfavourable. Despite the market's expectation for the outcome of the negotiation with Greece's lenders in the first half of the year, SIDMA Group recorded an increase in its turnover while improving its operating and pre-tax results. Namely, during the first semester of the year the consolidated turnover of SIDMA amounted to 57.9 million compared to 51.7 million in the corresponding period of 2016 or 12% higher, while together with dealership sales it amounted to 73.4 million, increased by 12.2% compared to the same period last year. In addition, the Group's earnings before interest, taxes, depreciation and amortization (EBITDA) amounted to 3,231 thousand from 2,826 thousand last year, while earnings before taxes improved by 30% or 0.4 million, reducing losses to 0.9 million from 1.3 million in the same period last year. At Company level, in the first semester of the year SIDMA's turnover was set to 38.5 million from 35.6 million, presenting an increase of 8% while together with dealership sales it was set to 53.9 million from 49.3 million in the corresponding period of Earnings before interest, taxes, depreciation and amortization (EBITDA) amounted to 2.4 million from 2.2 million in the corresponding period last year, while earnings before taxes amounted to losses of 0.9 million, improved by 12% or 0.1 million compared to those of the corresponding period last year. Regarding the subsidiaries, SIDMA Bulgaria recorded an increase in its turnover by 39%, while SΙDΜΑ Romania recorded an increase by 6% compared to the first semester of Namely, the turnover of 6

7 SIDMA Bulgaria amounted to 10.5 million compared to 7.5 million, while the turnover of SIDMA Romania amounted to 9.4 million compared to 8.8 million in the first semester of With respect to the other figures of the subsidiaries, SIDMA Bulgaria recorded a significant improvement, both in terms of operating profitability and earnings, presenting EBITDA of 532 thousand from 291 thousand improved by 83% and results of 254 thousand from marginally negative - 8 thousand respectively last year. The company's Management has achieved a reduction in its financial expenses since the fourth quarter, by pooling together its obligations under a syndicated loan with a reduced interest rate, which was signed with its creditor banks in the summer. In terms of operating profitability, SIDMA Romania recorded EBITDA of 307 thousand, that marginally increased by 1% compared to the first half of 2016, while in terms of pre-tax results it recorded losses of 251 thousand, improved by 16% compared to last year, excluding exchange differences. Taking exchange differences into consideration, earnings before taxes showed losses reduced by 4% compared to last year. Its goal is to increase sales volume while maintaining the already improved gross profit percentage compared to last year. The Group's liquidity amounted to 8.0 million, with the company's Management having undertaken a series of actions to strengthen its operations in recent years, which mainly concern the drastic reduction of the Group's operating costs and the reduction of credit periods, while also proceeding to the disposal of assets. 3.3 Basic Financial Ratios of the Group s consolidated results The major financial accounts of the financial year 1/1-30/06/2017 are presented below: Group Δ (%) Turnover ,0% Consignment Sales ,9% Total Sales ,2% Operating Results (EBITDA) ,3% Earnings before taxes ( ) ( ) -29,8% Net Earnings after Taxes and ( ) ( ) -36,6% Minority Interests Gross Margin 11% 13% -16,6% EBITDA Margin 6% 5% 2,0% Net Profit Margin -1% -2% -43,4% Company Δ (%) Turnover ,9% Consignment Sales ,9% Total Sales ,3% Operating Results (EBITDA) ,7% Earnings before taxes ( ) ( ) -11,5% Net Earnings after Taxes ( ) ( ) -19,6% Gross Margin 13% 15% -17,2% EBITDA Margin 6% 6% -1,1% Net Profit Margin -2% -3% -25,5% 7

8 The EBITDA refers to the earnings before interest, tax and depreciation & amortization and results from the statement of comprehensive income by adding to the operating results before tax, financing and investing results, the depreciation of the fiscal year. The Gross Profit Margin Indicator (Gross Profit /Turnover) reflects the Company's and Group's operating performance and its pricing policy. EBITDA Margin (EBITDA) reflects EBITDA as a percentage of Turnover. The Net Profit Margin (Profit after Tax / Turnover) shows Profit after Tax as a percentage of Turnover 3.4 Significant Events in the First Semester of the Current Fiscal Year and until the date of writing the existing document During the first semester of the fiscal year 2017 and beyond, until the date of writing this document, the following major events have taken place: Ordinary General Meeting At the Ordinary General Meeting of the company's shareholders, held in Athens on May 29, 2017, 19 shareholders attended representing 77.32% of the Share Capital and voting rights and the following were approved unanimously: - The report on the activities of the Board of Directors and the Auditors and the annual Financial Statements of the fiscal year The discharge of the members of the Board of Directors and the Chartered Auditor for the fiscal year The election of Chartered Auditors and the approval of their remuneration for The remuneration paid to members of the Board of Directors associated with dependent employment relationship for 2016 and the pre-approval of their remuneration for The election of a new Board of Directors. - The election of the audit committee members in accordance with article 37 of L.3693/ The modification of the conditions in the contract dated 25/01/2012 regarding the Bond Loan with EUROBANK ERGASIAS SA bank whereby the loan maturity was extended from to Extraordinary General Meeting At the Extraordinary General Meeting of the company's shareholders, held in Athens on July 26, 2017, 17 shareholders attended representing 77.28% of the Share Capital and voting rights and the following were approved unanimously: - The members of the audit committee pursuant to article 44 of L. 4449/ The measures and specific actions for the improvement of the company's Equity, in accordance with article 48 of CL 2190/1920, due to its reduction to less than one tenth of the company's share 8

9 capital. In cooperation with financial institutions, it also examines various scenarios of restructuring its lending so as to improve its own equity. Signing a new loan for the subsidiary in Bulgaria SIDMA BULGARIA signed a seven-year loan with its creditor banks in Bulgaria (United Bulgarian Bank, Alpha Bank, Eurobank Bulgaria and Piraeus Bank Bulgaria). This ensures lower borrowing costs and sufficient funding to implement its long-term business plan. 3.5 Main Risks and Uncertainties for the Second Half of 2017 The major financial risks and the corresponding actions taken by the Group are presented below: Credit Risk The Parent company implies a policy of credit insurance through insurance companies and, therefore, no significant concentrations of credit risk are generated. Almost 60% of customer balances are insured although the company has a 10% stake. Wholesale sales are mainly made to customers with an appropriate credit history. Retail sales are made in cash. On 30/06/2017, the Management believes that there is no material credit risk exposure that has not already been covered by provisions for bad debts. It has also organized a credit control department, charged with assessing the creditworthiness of its customers as well as determining their credit limits Interest Rate Risk The interest rate risk mainly arises from long-term and short-term loans. The Group's borrowing is largely floating rate and therefore depends directly on the amount and changes in interest rates, which exposes the Group to cash flow risk. The Group's policy is to continuously monitor interest rate trends as well as the duration of its financing needs. For the Group, an increase of / (decrease) in interest rates by +/- 1% would result (480) thousand and 480 thousand respectively for the results and the Group's Equity. The Group does not consider a rapid increase in Euribor interest rates being possible given the economic situation and development prospects of the Eurozone countries and therefore it has not carried out any interest rate risk management transactions Liquidity Risk The Group's standard practice is not to make use of all available lines, but to have disposable credit limits or cash flows at least 15% of the total on any occasion. On 30/06/2017, the Group maintained reserves of 7,9 million. The company's financial statements have been prepared based on the principle of going concern. The Shareholders Equity of the company is negative and therefore the conditions for the application of the provisions of article 48 of Codified Law 2190/1920 are met. Taking this into account, Management immediately examines measures to address negative equity. On June 30, 2017 the total value of the Company's and the Group's short-term liabilities exceeded the total value of their 9

10 circulating assets by an amount of thousand and thousand respectively. However, thousand pertain to long-term bond loans of the company that are classified as short-term loans, due to their expiration within 12 months from the issue date. The Management is currently in the process of renegotiating with the lending banks in order to sign a new long-term loan agreement. These negotiations aim to achieve time shift capital payment, further reduction in the cost of borrowing, as well as the renewal of existing untapped short-term borrowing lines. The result of this restructuring will be the time-shifting of the major part of the short-term borrowing into long term. On the basis and the course of the last three years, the company expects further reduction of its losses, regarding the fiscal year 2017, as well as the attainment of the objectives set in both this year's budget and the 5-year plan. Within the framework of any emergency to enhance liquidity beyond the cost saving program already implemented, the Group evaluates moves which can bring significant benefits. Namely, it examines a series of actions to improve its financial position, such as the restructuring of structures, the limitation of supporting expenditure and the appropriate use of assets that will bring benefits without affecting the Parent company and the Group from operating smoothly. The maturity of the Group's financial liabilities is as follows: Group Up to 6 months 6-12 months 30/6/ /12/ years More than 5 years Up to 6 months 6-12 months Borrowings Trade Payables Other Payables Current tax liabilities Total years More than 5 years Company Up to 6 months 6-12 months 30/6/ /12/ years More than 5 years Up to 6 months 6-12 months Borrowings Trade Payables Other Payables Current tax liabilities Total years More than 5 years Risk of Fluctuation of Raw Material Prices The selling prices of manufactured products largely depend on the prices of raw materials. The fluctuations in world prices for steel products affect (positively or negatively) the Group's profit margin, since changes in the selling prices of products cannot be perfectly synchronized with price changes in the markets and price changes in the Group's reserves. The Group's gross profit margin is affected positively when raw materials prices are rising in and negatively if this is not the case. The fluctuation of metal prices is not covered by hedging transactions of the Group, and therefore, its results are affected through the devaluation or appreciation of reserves accordingly. However, the Group maintains a permanent contact and a good cooperation with all key suppliers, thus it is directly informed of all developments in the international steel market, taking care to prepare ahead of time and to amend its commercial policy (purchases and sales) according to current trends. 10

11 3.5.5 Currency Risk The Group operates in Europe and therefore the bulk of its transactions is carried out in Euros. However, a small part of the Group's goods purchases is made in US Dollars. In order to address this risk, the Group carries currency forward contracts. In addition, the Group is exposed to currency risks from investments in foreign countries (Subsidiary company in Romania). As a natural hedge for investments in foreign subsidiaries whose net position is exposed to foreign exchange rate risk, the Group's policy is to use borrowings in the respective currency - since this is possible in order to reduce exposure to risk in case of devaluation of local currencies against the Euro. The change in the results and the Stockholders' Equity of the Group from a possible change by +/(-) 10% in the foreign currency exchange rate as of 30/06/2017 is immaterial. 3.6 Objectives and Prospects for the remainder of 2017 Since the market outlook remains unchanged in the second half of the fiscal year, the Management estimates that the company's turnover will be in line with that of the first half of the year. In Greece, demand in the second semester is expected to remain at the levels of the first semester, mainly due to the delay in the implementation of major projects. SIDMA continues to hold a high market share in a market that is below 60% in terms of consumption compared to the years before the economic crisis. In addition, economic activity in the Balkan countries is expected to remain at the levels of the first semester, with Bulgaria expecting a growth around 3.0% and with Romania around 4.6%. Bulgaria shows an increase in domestic demand and a further decline in unemployment, while the Romanian economy is being fuelled by strong consumer spending thanks to a combination of tax cuts and wage rises. It is worth mentioning that both countries have one of the lowest debt levels among EU member states. On the other hand, generalized geopolitical uncertainty, the impending UK withdrawal from the EU, the cost and availability of credit are still sources of concern. With regard to the steel market at a global level and according to the World Steel Association, the apparent steel consumption in 2017 is expected to grow by 1.3%, while in the 28 EU member states it is expected to increase only by 0.5% compared to In the EU, the prices of finished steel products have been on the rise since mid-july, following the increase in raw materials needed for their production (scrap and iron ore). In addition, the rise in oil prices also favours corresponding increases in steel products. Finally, the protectionist movements of European steel mills are increasing with the imposition or even threat of EU tariffs on some imported third-country steel products, which also lead to an increase in prices. 11

12 3.7 Important Transactions between the Company and Related Parties The most important transactions of the Company with parties related to it, are listed in the following table: Sales 01/01-30/06/ /01-30/06/2016 Intra-group Company Group Company Group Company CONSULTANT DOJRAN STEEL DOO ECORESET AE ETEM BULGARIA SA FITCO AE FULGOR AE ICME ECAB SA PROSAL TUBES SA SIDMA BULGARIA SA SIGMA AD SOFIA MED AD SOVEL AE STOMANA SA TEKA SYSTEMS AE AEIFOROS S.A ΑΝΑΜΕΤ S.A ANOXAL ANTIMET S.A VEPAL S.A VIANATT S.A VIOMAL S.A HELLENIC CABLES INDUSTRY S.A ERGOSTEEL S.A ERLIKON S.A ΕΤΕΜ S.A ΕΤIL S.A METALLOURGIA ATTIKIS S.A SIDENOR S.A SYMETAL S.A CORINTHIAN PIPEWORKS INDRUSTRY S.A CORINTHIAN PIPEWORKS S.A HALCOR S.A Total Other income 01/01-30/06/ /01-30/06/2016 Intra-group Company Group Company Group Company DOJRAN STEEL DOO ECORESET AE ICME ECAB SA SIDEROM STEEL Srl SIDMA ROMANIA SA SIDMA BULGARIA SA SOVEL AE STOMANA SA TEKA SYSTEMS S.A ΑΝΑΜΕΤ S.A VIANATT S.A HELLENIC CABLES INDUSTRY S.A ERGOSTEEL S.A ERLIKON S.A ETIL S.A SIDENOR S.A SIDENOR HOLDINGS S.A SIMETAL S.A CORINTHIAN PIPEWORKS INDRUSTRY S.A CORINTHIAN PIPEWORKS S.A HALCOR S.A Total

13 Purchases 01/01-30/06/ /01-30/06/2016 Intra-group Company Group Company Group Company ETEM BULGARIA SA FITCO AE LESCO SA PROSAL TUBES SA SIDEROM STEEL Srl SIDMA BULGARIA SA STOMANA SA ERLIKON S.A PROSIDER S.A SIDENORS S.A SIMETAL S.A CORINTHIAN PIPEWORKS INDRUSTRY S.A CORINTHIAN PIPEWORKS S.A Total Other expenses 01/01-30/06/ /01-30/06/2016 Intra-group Company Group Company Group Company ETEM BULGARIA SA ICME ECAB SA METALIGN SIDERAL SHPK TEKA SYSTEMS S.A ANTIMET S.A VIEXAL Total Assets Purchases 01/01-30/06/ /01-30/06/2016 Intra-group Company Group Company Group Company TEKA SYSTEMS SA HELLENIC CABLES INDUSTRY S.A STEELMET S.A HALCOR S.A Total

14 Receivables 30/6/ /12/2016 Intra-group Company Group Company Group Company CENERGY SA CONSULTANT DOJRAN STEEL DOO ECORESET AE ETEM BULGARIA SA FITCO AE FULGOR AE ICME ECAB SA PROSAL TUBES SA (316) SIDEROM STEEL Srl SIDMA ROMANIA SA SIDMA BULGARIA SA SIDMA CYPRUS Ltd SIGMA AD SOFIA MED AD SOVEL AE STOMANA SA TEKA SYSTEMS S.A AEIFOROS S.A ANAMET S.A ANTIMET S.A VEPAL S.A VIANATT S.A VIOMAL S.A HELLENIC CABLES INDUSTRY S.A ERGOSTEEL S.A ERLIKON S.A ETIL S.A THERMOLITH S.A METALLOURGIA ATTIKIS S.A PROSIDER S.A SIDERNOR S.A SIMETAL S.A CORINTHIAN PIPEWORKS INDRUSTRY S.A CORINTHIAN PIPEWORKS S.A HALCOR S.A Total Liabilities 30/6/ /12/2016 Intra-group Company Group Company Group Company CENERGY SA ETEM BULGARIA SA FITCO AE ICME ECAB SA METALIGN PROSAL TUBES SA SIDERAL SHPK SIDEROM STEEL Srl SIDMA BULGARIA SA STOMANA SA TEKA SYSTEMS S.A ΑΝΤΙΜΕΤ S.A VIEXAL HELLENIC CABLES INDUSTRY S.A ERLIKON S.A PROSIDER S.A SIDENOR S.A SIDENOR HOLDINGS S.A. (197) (197) (197) (197) STEELMET S.A SIMETAL S.A CORINTHIAN PIPEWORKS INDRUSTRY S.A HALCOR S.A Total

15 Management & Directors Fees The Management & Director s fees for the Group and the Company during and the prior period are as follows: Group Company Amounts in euros 1/1-30/6/2017 1/1-30/6/2016 1/1-30/6/2017 1/1-30/6/2016 Management Fees Board of Directors fees Post Balance Sheet Events There are no significant subsequent events that should be reported under the International Financial Reporting Standards (IFRS). Halandri, 15 September 2017 The Board of Directors CHAIRMAN MARCEL-HARIS L. AMARILIO 15

16 4 Interim Condensed Financial Statements for the period ended as at Statement of Financial Position amounts in euros Assets Group Company 30/06/ /12/ /06/ /12/2016 Non Current Assets Tangible Assets Intangible assets Investments in subsidiaries Other non current assets Deferred Tax Assets Current Assets Inventories Trade receivables Other receivables Derivatives Cash and cash equivalents Total Assets EQUITY Notes Share Capital Share Premium Reserves Retaining Earnings Equity of the mother company (a) Non-controlling interests (b) Total Equity (c)= (a)+(b) Liabilities Non Current Liabilities Non-current Bank Loans Grants for investments in fixed assets Deferred Tax Liabilities Provision for Retirement benefit obligation Other non-current liabilities Total Non-Current Liabilities Current Liabilities Current Bank Loans Trade Payables Non-current bank loans payable within next year Other Payables Income tax and duties Total Equity and Liabilities The accompanying notes form an integral part of these condensed interim six month Financial Statements 16

17 4.2 Statement of Comprehensive Income amounts in euros Group Company 1/1-30/6/2017 1/1-30/6/2016 1/1-30/6/2017 1/1-30/6/2016 Turnover Cost of Sales Gross Profit Other income Administrative Expenses Distribution/Selling Expenses Other expenses Operating Profit (EBIT) Finance Costs (net) Income from investing operations Profit before taxation Less: Income Tax Expense Profit/(loss) after taxation for continued operations Attributable to: Equity Holders of the parent Non-controlling interests Notes Other Comprehensive Income Amounts non-reclassified in the P&L in the next periods Revalution of retirement benefits obligation Deferred Taxation Amounts reclassified in the P&L in the next periods Interest Hedging (swap) F.X. Differences Deferred Taxation Other Comprehensive Income after taxes Total Comprehensive Income after taxes Attributable to: Equity Holders of the parent Non-controlling interests Profit after taxes per share - ( ) ,0778-0,1227-0,0768-0,0955 EBITDA The accompanying notes form an integral part of these condensed interim six month Financial Statements. 17

18 for the period Statements of Changes in Equity Group SHAREHOLDERS's EQUITY MINORITY TOTAL EQUITY amounts in euros Share Capital Share Premium Reserves F.X. differences Retained Earnings Equity of the shareholders Non-controlling interests Total Equity Net Equity Balance at 01 January Transactions with the owners Profit (+)/Loss (-) after taxation Other Comprehensive Income Interest Hedging (swap) F.X. Differences Income taxes regarding Other Compehensive Income elements Other Comprehensive Income after taxes Total Comprehensive Income after taxes Net Equity Balance at 30 June Net Equity Balance at 01 January Transfer of revaluation reserves for sold assets to the retained earnings Transactions with the owners Profit (+)/Loss (-) after taxation Other Comprehensive Income Interest Hedging (swap) Revalution of retirement benefits obligation F.X. Differences Income taxes regarding Other Compehensive Income elements Other Comprehensive Income after taxes Total Comprehensive Income after taxes Net Equity Balance at 30 June The accompanying notes form an integral part of these condensed interim six month Financial Statements 18

19 Company amounts in euros notes Share Capital Share Premium Reserves Retained Earnings Total Equity Net Equity Balance at 01 January Transfer of reserves L.2238/ Transactions with the owners Profit (+)/Loss (-) after taxation Other Comprehensive Income Interest Hedging (swap) Income taxes regarding Other Compehensive Income elements Other Comprehensive Income after taxes Total Comprehensive Income after taxes Net Equity Balance at 30 June Net Equity Balance at 01 January Transfer of revaluation reserves for sold assets to the retained earnings Transactions with the owners Profit (+)/Loss (-) after taxation Other Comprehensive Income 0 Interest Hedging (swap) Revalution of retirement benefits obligation Income taxes regarding Other Compehensive Income elements Other Comprehensive Income after taxes Total Comprehensive Income after taxes Net Equity Balance at 30 June The accompanying notes form an integral part of these condensed interim six month Financial Statements 19

20 for the period Cash Flows Statements amounts in euros Operating Activities Group Company 1/1-30/6/2017 1/1-30/6/2016 1/1-30/6/2017 1/1-30/6/2016 Profit before taxation Adjustments for: Depreciation & amortization Depreciation of granted assets Provisions Income from previous year's provisions Exchange Differences Income and expenses from investing activities Other non cash income/expenses Finance Costs Adjustments for changes in working capital Decrease/(increase) in inventories Decrease/(increase) in receivables (Decrease)/increase in payables(except bank loans and overdrafts) Less: Financial Costs paid Total inflows / (outflows) from operating activities (a) Investing activities Acquisition of subsidiaries Purchase of tangible and intangible assets Proceeds on disposal of tangible and intangible assets Interests received Total inflows / (outflows) from investing activities (b) Financing Activities Share Capital Increase New bank loans raised Repayments of loans Total inflows / (outflows) from financing activities ( c) Net Increase/(Decrease) in cash and cash equivalents (a) +(b) + ( c) Cash and cash equivalents at the beginning of the period Cash and cash equivalents at the end of the period The accompanying notes form an integral part of these condensed interim six month Financial Statements. 20

21 5 Notes of the Interim Financial Statements of the six months of General Information about the Company and the Group The parent company, SIDMA S.A., is a Société Anonyme which operates in processing and trading steel products in Greece. The company s headquarters are located at 30 VASILEOS GEORGIOU ST., ATHENS, while the location of the company s central offices is 54 th, ATHENS LAMIA N.R., INOFYTA and its website is The company s shares are listed on the Athens Stock Exchange under the category of Basic Metals. In the Consolidated financial statements, the following companies are included: "SIDMA WORLDWIDE LIMITED" (100% Subsidiary) whose sole purpose is to participate in SIDMA s subsidiaries in the Balkans Area. The 100% holding subsidiary "SIDMA WORLDWIDE LIMITED" was founded in Cyprus in The 100% subsidiaries "SIDMA Romania SRL" (ex: SID-PAC Steel & Construction Products SRL), founded in Romania and SIDMA Bulgaria S.A."(ex: SID-PAC BULGARIA S.A.), founded in Bulgaria, with the same purpose as the parent company through the Cyprus holding company "SIDMA WORLDWIDE LIMITED». The attached financial statements were approved by the Company s Board of Directors on 15/9/2017 and are available on the Company s website Basis for preparation of financial statements The accompanying interim condensed financial statements of the Group and the Company dated 30 June 2017 covering the period from 1 January 2017 to 30 June 2017 have been prepared in accordance with the historical cost convention as amended by the revaluation of specific assets in fair values and under the going concern principle. The accompanying interim condensed financial statements of the Group and the Company are in accordance with the International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) and their interpretations, as issued by the IFRIC of the IASB, and in particular are in accordance with IAS. 34 on Interim Financial Statements. The interim condensed financial statements do not include all the information and notes required in the annual financial statements of the Company and the Group as at 31 December 2016 and should be read in conjunction with the Company and Group financial statements as at 31 December The presentation currency of the financial statements is the euro. 21

22 5.3 Changes in Accounting Policies New Standards, Interpretations, Revisions and Amendments to existing Standards that are effective and have been adopted by the European Union There are no new Standards, Interpretations, Revisions or Amendments to existing Standards that have been issued by the International Accounting Standards Board (IASB), are adopted by the European Union, and their application is mandatory from or after 01/01/ New Standards, Interpretations, Revisions and Amendments to existing Standards that have not been applied yet or have not been adopted by the European Union The following new Standards, Interpretations and amendments of IFRSs have been issued by the International Accounting Standards Board (IASB), but their application has not started yet or they have not been adopted by the European Union. IFRS 15 "Revenue from Contracts with Customers" (effective for annual periods starting on or after 01/01/2018) In May 2014, the IASB issued a new Standard, IFRS 15. The Standard fully converges with the requirements for the recognition of revenue in both IFRS and US GAAP. The key principles on which the Standard is based are consistent with much of current practice. The new Standard is expected to improve financial reporting by providing a more robust framework for addressing issues as they arise, increasing comparability across industries and capital markets, providing enhanced disclosures and clarifying accounting for contract costs. The new Standard will supersede IAS 11 "Construction Contracts", IAS 18 "Revenue" and several revenue related Interpretations. The Group will examine the impact of the above on its Financial Statements, though it is not expected to have any. The above have been adopted by the European Union with effective date of 01/01/2018. IFRS 9 "Financial Instruments" (effective for annual periods starting on or after 01/01/2018) In July 2014, the IASB issued the final version of IFRS 9. The package of improvements introduced by the final version of the Standard, includes a logical model for classification and measurement, a single, forwardlooking "expected loss" impairment model and a substantially-reformed approach to hedge accounting. The Group will examine the impact of the above on its Financial Statements, though it is not expected to have any. The above have been adopted by the European Union with effective date of 01/01/2018. IFRS 16 "Leases" (effective for annual periods starting on or after 01/01/2019) In January 2016, the IASB issued a new Standard, IFRS 16. The objective of the project was to develop a new Leases Standard that sets out the principles that both parties to a contract, i.e. the customer ('lessee') and the supplier ('lessor'), apply to provide relevant information about leases in a manner that faithfully represents those transactions. To meet this objective, a lessee is required to recognise assets and liabilities arising from a lease. The Group will examine the impact of the above on its Financial Statements, though it is not expected to have any. The above have not been adopted by the European Union. 22

23 Amendments to IAS 12: " Recognition of Deferred Tax Assets for Unrealized Losses" (effective for annual periods starting on or after 01/01/2017) In January 2016, the IASB published narrow scope amendments to IAS 12. The objective of the amendments is to clarify the accounting for deferred tax assets for unrealized losses on debt instruments measured at fair value. The Group will examine the impact of the above on its Financial Statements, though it is not expected to have any. The above have not been adopted by the European Union. Amendments to IAS 7: "Disclosure Initiative" (effective for annual periods starting on or after 01/01/2017) In January 2016, the IASB published narrow scope amendments to IAS 7. The objective of the amendments is to enable users of financial statements to evaluate changes in liabilities arising from financing activities. The amendments will require entities to provide disclosures that enable investors to evaluate changes in liabilities arising from financing activities, including changes arising from cash flows and non-cash changes. The Group will examine the impact of the above on its Financial Statements, though it is not expected to have any. The above have not been adopted by the European Union. Clarification to IFRS 15 "Revenue from Contracts with Customers" (effective for annual periods starting on or after 01/01/2018) In April 2016, the IASB published clarifications to IFRS 15. The amendments to IFRS 15 do not change the underlying principles of the Standard, but clarify how those principles should be applied. The amendments clarify how to identify a performance obligation in a contract, how to determine whether a company is a principal or an agent and how to determine whether the revenue from granting a license should be recognized at a point in time or over time. The Group will examine the impact of the above on its Financial Statements, though it is not expected to have any. The above have not been adopted by the European Union. Amendment to IFRS 2: "Classification and Measurement of Share-based Payment Transactions" (effective for annual periods starting on or after 01/01/2018) In June 2016, the IASB published narrow scope amendment to IFRS 2. The objective of this amendment is to clarify how to account for certain types of share-based payment transactions. More specifically, the amendments provide requirements on the accounting for the effects of vesting and non-vesting conditions on the measurement of cash-settled share-based payments, for share-based payment transactions with a net settlement feature for withholding tax obligation, as well as, a modification to the terms and conditions of a share-based payment that changes the classification of the transaction from cash-settled to equitysettled. The Group will examine the impact of the above on its Financial Statements, though it is not expected to have any. The above have not been adopted by the European Union. 23

24 Amendments to IFRS 4: "Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts" (effective for annual periods starting on or after 01/01/2018) In September 2016, the IASB published amendments to IFRS 4. The objective of the amendments is to address the temporary accounting consequences of the different effective dates of IFRS 9 Financial Instruments and the forthcoming insurance contracts Standard. The amendments to existing requirements of IFRS 4 permit entities whose predominant activities are connected with insurance to defer the application of IFRS 9 until 2021 (the "temporary exemption") and also permit all issuers of insurance contracts to recognize in other comprehensive income, rather than profit or loss, the volatility that could arise when IFRS 9 is applied before the new insurance contracts Standard is issued (the "overlay approach"). The Group will examine the impact of the above on its Financial Statements, though it is not expected to have any. The above have not been adopted by the European Union. Annual Improvements to IFRSs Cycle (effective for annual periods starting on or after 01/01/2017 and 01/01/2018) In December 2016, the IASB issued Annual Improvements to IFRSs Cycle, a collection of amendments to IFRSs, in response to several issues addressed during the cycle. The issues included in this cycle are the following: IFRS 12: Clarification of the scope of the Standard, IFRS 1: Deletion of short-term exemptions for first-time adopters, IAS 28: Measuring an associate or joint venture at fair value. The amendments are effective for annual periods beginning on or after 1 January 2017 for IFRS 12, and 1 January 2018 for IFRS 1 and IAS 28. The Group will examine the impact of the above on its Financial Statements, though it is not expected to have any. The above have not been adopted by the European Union. IFRIC 22 "Foreign Currency Transactions and Advance Consideration" (effective for annual periods starting on or after 01/01/2018) In December 2016, the IASB issued a new Interpretation, IFRIC 22. IFRIC 22 provides requirements about which exchange rate to use in reporting foreign currency transactions (such as revenue transactions) when payment is made or received in advance. The Group will examine the impact of the above on its Financial Statements, though it is not expected to have any. The above have not been adopted by the European Union. Amendments to IAS 40: "Transfers of Investment Property" (effective for annual periods starting on or after 01/01/2018) In December 2016, the IASB published narrow-scope amendments to IAS 40. The objective of the amendments is to reinforce the principle for transfers into, or out of, investment property in IAS 40, to specify that (a) a transfer into, or out of investment property should be made only when there has been a change in use of the property, and (b) such a change in use would involve the assessment of whether the property qualifies as an investment property. That change in use should be supported by evidence. The Group will examine the impact of the above on its Financial Statements, though it is not expected to have any. The above have not been adopted by the European Union. 24

25 IFRS 17 "Insurance Contracts" (effective for annual periods starting on or after 01/01/2021) In May 2017, the IASB issued a new Standard, IFRS 17, which replaces an interim Standard, IFRS 4. The aim of the project was to provide a single principle-based standard to account for all types of insurance contracts, including reinsurance contracts that an insurer holds. A single principle-based standard would enhance comparability of financial reporting among entities, jurisdictions and capital markets. IFRS 17 sets out the requirements that an entity should apply in reporting information about insurance contracts it issues and reinsurance contracts it holds. The Group will examine the impact of the above on its Financial Statements, though it is not expected to have any. The above have not been adopted by the European Union. IFRIC 23 "Uncertainty over Income Tax Treatments" (effective for annual periods starting on or after 01/01/2019) In June 2017, the IASB issued a new Interpretation, IFRIC 23. IAS 12 "Income Taxes" specifies how to account for current and deferred tax, but not how to reflect the effects of uncertainty. IFRIC 23 provides requirements that add to the requirements in IAS 12 by specifying how to reflect the effects of uncertainty in accounting for income taxes. The Group will examine the impact of the above on its Financial Statements, though it is not expected to have any. The above have not been adopted by the European Union. 5.4 Important accounting estimates and judgements of Management Management estimates and judgements are constantly reviewed and based on historical data and expectations for future events, which are deemed reasonable pursuant to current circumstances. Company Management makes accounting estimates and assumptions with respect to the evolution of future events which, by definition, will scarcely coincide with the respective actual results. Accounting estimates and judgments have not changed in comparison with those of 31/12/2016, while containing no unusual events that require further disclosures in relation to the annual Financial Statements. The main estimates and judgements referring to events whose development could affect the items of financial statements after 30/06/2017 concern mainly provisions for contingent taxes, provisions for impairment of reserves and receivables and also estimates regarding the useful life of depreciable fixed assets. 5.5 Risk Management The major financial risks and the corresponding actions taken by the Group are presented below: Credit Risk The Parent company implies a policy of credit insurance through insurance companies and, therefore, no significant concentrations of credit risk are generated. Almost 60% of customer balances are insured although the company has a 10% stake. Wholesale sales are mainly made to customers with an appropriate credit history. Retail sales are made in cash. On 30/06/2017, the Management believes that there is no material credit risk exposure that has not already been covered by provisions for bad debts. It has also organized a credit control department, charged with assessing the creditworthiness of its customers as well as determining their credit limits. 25

26 5.5.2 Interest Rate Risk The interest rate risk mainly arises from long-term and short-term loans. The Group's borrowing is largely floating rate and therefore depends directly on the amount and changes in interest rates, which exposes the Group to cash flow risk. The Group's policy is to continuously monitor interest rate trends as well as the duration of its financing needs. For the Group, an increase of / (decrease) in interest rates by +/- 1% would result (480) thousand and 480 thousand respectively for the results and the Group's Equity. The Group does not consider a rapid increase in Euribor interest rates being possible given the economic situation and development prospects of the Eurozone countries and therefore it has not carried out any interest rate risk management transactions Liquidity Risk The Group's standard practice is not to make use of all available lines, but to have disposable credit limits or cash flows at least 15% of the total on any occasion. On 30/06/2017, the Group maintained reserves of 7,9 million. The company's financial statements have been prepared based on the principle of going concern. The Shareholders Equity of the company is negative and therefore the conditions for the application of the provisions of article 48 of Codified Law 2190/1920 are met. Taking this into account, Management immediately examines measures to address negative equity. On June 30, 2017 the total value of the Company's and the Group's short-term liabilities exceeded the total value of their circulating assets by an amount of thousand and thousand respectively. However, thousand pertain to long-term bond loans of the company that are classified as short-term loans, due to their expiration within 12 months from the issue date. The Management is currently in the process of renegotiating with the lending banks in order to sign a new long-term loan agreement. These negotiations aim to achieve time shift capital payment, further reduction in the cost of borrowing, as well as the renewal of existing untapped short-term borrowing lines. The result of this restructuring will be the time-shifting of the major part of the short-term borrowing into long term. On the basis and the course of the last three years, the company expects further reduction of its losses, regarding the fiscal year 2017, as well as the attainment of the objectives set in both this year's budget and the 5-year plan. Within the framework of any emergency to enhance liquidity beyond the cost saving program already implemented, the Group evaluates moves which can bring significant benefits. Namely, it examines a series of actions to improve its financial position, such as the restructuring of structures, the limitation of supporting expenditure and the appropriate use of assets that will bring benefits without affecting the Parent company and the Group from operating smoothly. The maturity of the Group's financial liabilities is as follows: 26

27 Group Up to 6 months 6-12 months 30/6/ /12/ years More than 5 years Up to 6 months 6-12 months Borrowings Trade Payables Other Payables Current tax liabilities Total years More than 5 years Company Up to 6 months 6-12 months 30/6/ /12/ years More than 5 years Up to 6 months 6-12 months Borrowings Trade Payables Other Payables Current tax liabilities Total years More than 5 years Risk of Fluctuation of Raw Material Prices The selling prices of manufactured products largely depend on the prices of raw materials. The fluctuations in world prices for steel products affect (positively or negatively) the Group's profit margin, since changes in the selling prices of products cannot be perfectly synchronized with price changes in the markets and price changes in the Group's reserves. The Group's gross profit margin is affected positively when raw materials prices are rising in and negatively if this is not the case. The fluctuation of metal prices is not covered by hedging transactions of the Group, and therefore, its results are affected through the devaluation or appreciation of reserves accordingly. However, the Group maintains a permanent contact and a good cooperation with all key suppliers, thus it is directly informed of all developments in the international steel market, taking care to prepare ahead of time and to amend its commercial policy (purchases and sales) according to current trends Currency Risk The Group operates in Europe and therefore the bulk of its transactions is carried out in Euros. However, a small part of the Group's goods purchases is made in US Dollars. In order to address this risk, the Group carries currency forward contracts. In addition, the Group is exposed to currency risks from investments in foreign countries (Subsidiary company in Romania). As a natural hedge for investments in foreign subsidiaries whose net position is exposed to foreign exchange rate risk, the Group's policy is to use borrowings in the respective currency - since this is possible in order to reduce exposure to risk in case of devaluation of local currencies against the Euro. The change in the results and the Stockholders' Equity of the Group from a possible change by +/(-) 10% in the foreign currency exchange rate as of 30/06/2017 is immaterial. 5.6 Group s structure The parent company and the subsidiaries included in the Consolidated Financial Statements, with the percentage of participation and the country located as in 30/06/2017, are presented in the following table: 27

28 Company Direct percentage of participation Indirect percentage of participation Total percentage Country Consolidation Method Activity Sectors SIDMA S.A. Mother - Mother Greece Full STEEL SERVICE CENTER SIDMA WORLDWIDE LIMITED 100% 0% 100% Cyprus Full HOLDING SIDMA ROMANIA SRL 0% 100% 100% Romania Full STEEL SERVICE CENTER SIDMA BULGARIA S.A 0% 100% 100% Bulgaria Full STEEL SERVICE CENTER During the current period there was no change in the above percentages. A share capital increase held in the subsidiary SIDMA WORLDWIDE LTD amounted to 30k. The Consolidated Financial Statements of SIDMA S.A. are included under Equity Method, in the Consolidated Financial Statements of Consolidated Financial Statements of VIOHALCO S.A. group of companies, domiciled in Brussels. The percentage applied for the consolidation of the period is 25,69%. 5.7 Operating Segments In accordance with IFRS 8, reportable operating segments are identified based on the management approach. This approach stipulates external segment reporting based on the Group s internal organizational and management structure and on key figures of internal financial reporting to the chief operating decision maker who, in the case of SIDMA Group, is considered to be the Chief Executive Officer that is responsible for measuring the business performance of the segments. For management purposes the Group is organized into business units based on the nature of the product and services provided. SIDMA has identified two reportable profit generating segments, Steel segment and Panel segment. Steel segment is comprised of the activities of steel transformation and trading of the parent company SIDMA SA plus SIDMA ROMANIA SRL and SIDMA BULGARIA SA. Panel segment is comprised of the activities of the industrial panel manufacturing and trading of metal and thermo-insulating elements (Panels) of the subsidiary company PANELCO SA that was merged with the mother company on the 29/12/

29 Steel Segment Panel Segment Elimination of Intercompany Transactions Total Steel Segment Period from 1/1-30/6/2016 Elimination of Panel Intercompany Segment Transactions Turnover (sales) Sales to third parties Intercompany sales Total sales per segment Profit from operations Finance Costs (net) Income from investing operations Profit before taxes Profit after taxes Depreciation EBITDA Balance Sheet Assets Steel Segment Operating Segments Period from 1/1-30/6/2017 Period from 1/1-30/6/2017 Period from 1/1-31/12/2016 Panel Segment Elimination of Intercompany Transactions Total Steel Segment Panel Segment Elimination of Intercompany Transactions Segment assets Total assets Liabilities Segment long-term and short-term liabilities Total liabilities Total Total Moreover, below are presented the geographic segments. Amounts in Euro 1/1-30/6/2017 1/1-30/6/2016 Company Greece Abroad Total Greece Abroad Total SIDMA S.A SIDMA BULGARIA S.A SIDMA ROMANIA SRL Total Property, Plant and Equipment The tangible fixed assets of the Group and the Company as of are shown in the following tables: 29

30 Group Tangible Assets Land Buildings Machinery Transportation Other equipment Assets under construction Grand Total Acquisition Cost Acquisition Cost at 01 January Additions Sales or Deletions Reclassification of fixed assets held for sale Revaluation of assets in fair values Transfer of depreciation due to revaluation of fixed assets Transfers Exchange differences Acquisition Cost at 31 December Accumulated Depreciation Accumulated Depreciation at 01 January Depreciation cost in P&L Transfer of accum. depreciation due to revaluation of fixed assets Depreciation of sold or deleted assets Exchange differences Accumulated Depreciation at 31 December Book Value in 31 December Acquisition Cost Acquisition Cost at 01 January Additions Sales or Deletions Transfers Exchange differences Acquisition Cost at 30 June Accumulated Depreciation Accumulated Depreciation at 01 January Depreciation cost in P&L Transfers Depreciation of sold or deleted assets Accumulated Depreciation at 30 June Book Value in 30 June Company Tangible Assets Land Buildings Machinery Transportation Other Assets under equipment construction Grand Total Acquisition Cost Acquisition Cost at 01 January Additions resulted from the merger of subsidiary Additions Sales or Deletions Reclassification of fixed assets held for sale Revaluation of assets in fair values Transfer of depreciation due to revaluation of fixed assets Transfers Acquisition Cost at 31 December Accumulated Depreciation Accumulated Depreciation at 01 January Accumulated depreciation resulted from the merger of subsidiary Depreciation cost in P&L Transfer of accum. depreciation due to revaluation of fixed assets Depreciation of sold or deleted assets Accumulated Depreciation at 31 December Book Value in 31 December Acquisition Cost Acquisition Cost at 01 January Additions Sales or Deletions Reclassification of fixed assets held for sale Revaluation of assets in fair values Transfer of depreciation due to revaluation of fixed assets Transfers Acquisition Cost at 30 June Accumulated Depreciation Accumulated Depreciation at 01 January Depreciation cost in P&L Transfer of accum. depreciation for assets held for sale Depreciation of sold or deleted assets Accumulated Depreciation at 30 June Book Value in 30 June

31 Land, buildings and equipment are valued at fair value. The means of transport and vehicles, other equipment and assets under construction are stated at cost less accumulated depreciation. The date of the estimates, which resulted in the fair values of land, buildings and machinery of the Company and the Group, was the 31st of December This date is related to the condition of assets, the situation of the property market, the economic conditions of the economies in which the related assets are located and the demand and supply conditions prevailing in them. The impact of the am revaluation of assets to the results of the company and the Group for the first half of 2017 was approximately 51 thousand. There are pledges over the fixed assets of the Group for loans as described in paragraph Intangible Assets The intangible assets for the Group and the Company are shown in the following tables: The goodwill arose from the acquisition of a subsidiary, which is considered as a special cash flow generating unit, and consists of an operating sector (Steel). Goodwill impairment test is conducted annually and when there are indications of impairment. In such cases the company takes the requested provisions. 31

32 5.10 Customers and trade receivables Trade receivables as of are analysed below: Group Company 30/6/ /12/ /6/ /12/2016 Customers Notes receivable Cheques receivable Less: Impairment provisions Total The Company has established criteria for providing credit to customers which are broadly based on the size of the client's business, the economic circumstances and the assessment of relevant financial information. At each balance sheet date, all overdue or doubtful receivables are estimated to determine the need or nonprovision for doubtful receivables. Any deletion of customer balances is charged to the existing provision for bad and doubtful debts. The fair values of the receivables coincide approximately with the book values. The timing of the trade receivables of the Group as of 30/06/2017 is as follows: Group Company Aging Analysis 30/6/ /12/ /6/ /12/ Total Non-overdue and non-impaired claims refer to balances up to 120 days from invoice delivery Other receivables The analysis of other receivables of the Group and the Company as of is as follows: Group Company 30/6/ /12/ /6/ /12/2016 Advances to suppliers Receivables from the State (taxes, etc) Purchases in transit Blocked deposits Short-term receivables against associated companies Prepaid expenses Accrued Income Advances account Total Share capital After absorbing the subsidiary PANELCO, the share capital of SIDMA SA amounts to a total of ,45, divided into 10,186,667 common registered shares of nominal value 1.35 each. There was no change during the current period. 32

33 5.13 Borrowings The financial obligations of the Group and the Company as of and are analysed below: Group Company 30/6/ /12/ /6/ /12/2016 Long-term liabilities Bond loans Long-term bank loans Derivative Financial Instruments Less: Current installments of long-term loans Total long-term liabilities (a) Short-term liabilities Short-term bank loans Derivative Financial Instruments Financing through factoring Total short-term liabilities (b) Current installments of long-term loans Grand Total (a)+(b) As regards the borrowing (long term and short term loans), the following table of future payments for the Group and the Company on 30/06/2017 and 31/12/2016 is presented. Group Company 30/6/ /12/ /6/ /12/2016 Up to 1 year Between 1 and 2 years Between 2 and 5 years More than 5 years Total The Bond Loans of the Company With regard to the bond loan of the company amounting to 49 million, the banks "EUROBANK ERGASIAS S.A., NATIONAL BANK OF GREECE S.A., PIREUS BANK S.A., COMMERCIAL BANK OF GREECE S.A., ALPHA BANK S.A." and "HSBC BANK PLC" are the bondholders and "EUROBANK ERGASIAS S.A." is the paying agent and representative of the bondholders. Following its request submitted in April 2017, the Company received the consent of the bondholders to extend the maturity of the loan until 20 September On August 2017, the company submitted a request to extend the maturity of the loan until December 2017 and is waiting for the consent of the bondholders. On 30/06/2017 the undepreciated balance of the loan amounted to 49 million. With regard to the bond loans of the absorbed company PANELCO S.A. amounting to 4 million with the "NATIONAL BANK OF GREECE S.A." and to 4 million with the "EUROBANK ERGASIAS S.A.", in March 2017 the company received the consent of the bondholders for the rollover of the maturity of all loans until June 2017 and August 2017 respectively. Furthermore, after new requests, the company received the consent of the bondholders for the rollover of the maturity of all loans until September On 33

34 the undepreciated values of the above loans amounted to 3,657 thousand and 3,520 thousand respectively. In June 2017, the subsidiary SIDMA BULGARIA restructured the existing loan of 7.2 million and signed a 7-year loan with the creditor banks in Bulgaria United Bulgarian Bank, Alpha Bank, Eurobank Bulgaria and Piraeus Bank Bulgaria. Group loans in foreign currency amounted to 8,8 mil (RON 40 mil.) The average loan interest for the Group and the Company amounted to 5.0% respectively. To secure the Group's and the company's loans, there exist real estate liens and floating security on stocks as shown in paragraphs and below Other Current Liabilities The analysis of other short-term liabilities of the Group and the Company on is as follows: Group Company 30/6/ /12/ /6/ /12/2016 Short-term payables from related parties Advances from trade debtors Social Security Dividends payable Sundry debtors Accrued Expenses Taxes payable Other short-term liabilities Total Income Tax Deferred tax of the Group and the Company is analyzed as follows: Group Company 30/6/ /6/ /6/ /6/2016 Deffered taxation Differences from the tax audit of previous years Total Turnover (Sales) Sales for the period ended are analysed by category of products and services (using Greek Statistical Service Codes) as follows: 1/1-30/6/2017 1/1-30/6/2016 Amounts in Euros Group Company Group Company Manufacture of basic iron, steel and ferro-alloys Wholesale of metals and metal ores Manufacture of metal structures and parts of structures Treatment and coating of metals Production of Electricity from Photovoltaic Systems Manufacture of steel tubes Grand Total

35 The turnover amounts as appeared in the P&L Account, do not include the sales made by the parent company on behalf of third parties (consignment) amounting to EUR 15,474,456. The respective amount of the first six months of 2016 was EUR 13,703,397. The above amounts should be considered for the calculation of any ratios based on the turnover of the Group and the Company Earnings per share Group Company 30/06/ /06/ /06/ /06/2016 Profit/loss to the Shareholders of the mother company Weighted number of shares Basic Earnings/losses Per Share (EURO/share) -0,0778-0,1227-0,0768-0,0955 The earnings per share have been calculated using the net results attributable to shareholders of SIDMA S.A. as numerator. As denominator, the weighted average number of outstanding shares for the period was used Non-audited Fiscal Years During fiscal year 2017, the tax audit of the fiscal years 2008, 2009 and 2010 was completed by the parent company and the fiscal years 2008 and 2009 of the absorbed PANELCO S.A subsidiary. From this tax audit and the utilization of the framework for the application of the provisions of articles 57 and 61 of Law 4446/2016, additional taxes and surcharges were paid, amounting to a total of 249,073. The amount is shown in 'Current Tax Liabilities'. For these unaudited tax years, the Company had a provision of 267,000 which was included in the "Long-term Other Provisions". For the fiscal year 2010 of the absorbed PANELCO S.A subsidiary, which remains unaudited, due to the accumulated tax losses, Management does not expect significant additional taxes to be incurred. The parent company has been audited by the Tax Authorities for the Fiscal Years 2011 to 2015 in accordance with Article 82 para /1994 and Article 65A para. 1 of N.4174 / 2013 with no variation arisen from the provision posted to the Company s financial results. According to circular POL. 1006/2016, the companies which have been subject to the above special tax audit are not exempt from the regular control by the competent tax authorities. The Company's Management believes that any future tax audits by the tax authorities, if they are finally executed, will not give rise to additional tax differences that have a material impact on the Financial Statements. For the fiscal year 2016, the special audit for the Tax Compliance Report is in progress and the relevant tax certificate is to be issued after the publication of the Interim Condensed Financial Statements for the period 1/1/ /06/2017. If additional tax liabilities arise until the completion of the tax audit, it is estimated that they will not have a material effect on the Interim Condensed Financial Statements. It is noted that, according to the recent legislation, the control and issue of the Tax Compliance Report is valid for the year 2016 and hence on a voluntary basis. Among the other consolidated companies, SIDMA WORLDWIDE CYPRUS has been tax audited up to FY 2010, SIDMA Romania SRL, has been audited by the local Tax Authorities up to September of 2008, while SIDMA Bulgaria has not been tax audited for the years and because of its losses, no more taxes are going to arise. 35

36 5.19 Contingent liabilities and commitments Guarantees On 30 June 2017 the Group and the Company had the following contingent assets & liabilities: Guarantees for assets Issuance of letter of guarantees as assurance for receivables, amounting to 2,767 thousand for the Group and the Company. Guarantees for liabilities Issuance of performance guarantees amounting to 15 thousand for the Group and the Company. Issuance of letter of guarantees as assurance for payables, amounting to 12,706 thousand for the Group and 12,142 thousand for the Company. Guarantees (cheques receivable and ceded receivables-invoice factoring) amounting to 5,6 million, for loans of approximately 10,2 million for the subsidiaries in Romania and Bulgaria. Issuance of guarantees amounting to 13,7 million and letters of guarantees amounting to 2,1 million for the assurance of bank financing of 20,4 million Encumbrances The Group's and Company's assets are mortgaged for mortgages totalling 63.5 million as detailed below: a) The company has consented to a first priority mortgage on its property of 49 million as a collateral for the common bond loan of the same amount and of 8 million on PANELCO s premises at BI.PE. Lamias as a collateral on Bond loans amounting to 7,2 m. total. b) A statutory mortgage equal to 5,0 million has been registered on the properties and 1.5 million, on the mechanical equipment of the subsidiary SIDMA Romania S.R.L respectively to secure the repayment of bank loans amounting to nominal value of 9,8 million. The Company has entered into a floating security right of a total value of 7 million pursuant to Law 2844/2000 on its inventory under the modified contract of a Common Bond Loan of a nominal value of 49 million. During the first half of 2017, the Company has constituted a floating security float of a total value of 2 million pursuant to Law 2844/2000 on its inventory on the basis of the Bond Loans of a nominal value of 8 million of the absorbed subsidiary PANELCO Legal Affairs There are no legal or arbitration decisions by judicial or arbitration bodies that may have an impact on the financial position or operating results of the Group companies. 36

37 5.20 Classification of financial instruments based on their valuation at fair value Fair value measurement of financial instruments Financial assets and liabilities that were measured at fair value in the statement of financial position were classified into three levels of hierarchy. Table of classification of financial assets is defined by the quality of the data used to determine the fair value, as follows: Level 1: financial instruments measured at fair value using prices in active markets; Level 2: financial instruments measured at fair value using other indisputable objective values outside active market; Level 3: financial instruments measured based on estimates of the Company, as there are no observable market data. Cited for the Group, the following classification tables of financial assets that were measured at fair value, based on the three levels indicated: The fair value of the following financial assets and liabilities of the Company and the Group is approximately close to their book value at the reporting period date: Trade and Other Receivables Other Current Assets Trade Suppliers and Other Short-term Liabilities Debt Cash and Cash Equivalents Measurement of fair value of non-financial instruments 30/6/ /12/2016 Fair Values Fair Values Level 3 Level 3 Owner - occupied assets Non- financial assets