F.G. EUROPE S.A. SOCIETE ANONYME WHOLESALER OF ELECTRICAL AND ELECTRONIC APPLIANCES

Transcription

1 F.G. EUROPE S.A. SOCIETE ANONYME WHOLESALER OF ELECTRICAL AND ELECTRONIC APPLIANCES 128, Vouliagmenis Ave Glyfada - Greece P.C. Reg. No /06/B/86/111 SIX - MONTHS FINANCIAL REPORT Six - months periods ended June 30, 2011 In accordance with article 5 of L. 3556/2007 1

2 CONTENTS Declarations of the members of the Board of Directors... 3 Board s of Directors Report on interim Financial Statements (Consolidated and Company) for the six-months period ended June 30, Auditors Report on Review of interim Financial Statements 11 Condensed interim Financial Statements 14 Notes to the interim Financial Statements (Consolidated and Company) Figures and information for the period from January 1 to June 30, 2011 (attached).. Page 2

3 DECLARATIONS OF THE MEMBERS OF THE BOARD OF DIRECTORS (in accordance with article 5 par. 2γ. of L. 3556/2007) Members of the Board of Directors, Mr. Georgios Fidakis, Chairman of the Board, Mr. Ioannis Pantousis, Managing Director and Mr. Andreas-Fotios Demenagas, executive member of the Board, under their aforementioned capacity as Members of the Board, declare that to their best knowledge: The Interim Financial Statements Company and Consolidated for the period ended οn June 30, 2011, which were prepared in accordance with the international accounting standards, present in a truthful manner the figures pertaining to assets, liabilities, shareholders equity and financial results of the Company and the F.G. EUROPE S.A. Group and companies consolidated, in accordance with provisions set forth in paragraphs 3 to 5, article 5 of Law 3556/ The Interim Board of Directors Report on the Financial Statements Company and Consolidated for the six-month period ended in June 30, 2011 presents in a truthful manner all information deemed necessary in accordance with provisions set forth in paragraph 6, article 5 of Law 3556/ Glyfada, July 27, 2011 Chairman of the Board of Directors Managing Director Executive member of the Board of Directors Georgios Fidakis John Pantousis Andreas-Fotios Demenagas 3

4 F.G. EUROPE S.A. SOCIETE ANONYME WHOLESALER OF ELECTRICAL AND ELECTRONIC APPLIANCES BOARD OF DIRECTORS REPORT ON INTERIM FINANCIAL STATEMENTS COMPANY AND CONSOLIDATED FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 2011 This Report has been prepared in accordance with provisions set forth in par. 6, article 5, L.3556/2007 and the relevant Hellenic Capital Market Commission Rules 1/434/ and 7/448/ , issued by the Board of Directors of the Hellenic Capital Market Commission. The purpose of this report is to inform investors with regard to: The financial status, outcome, and course of the Company and the Group during the period in question, as well as any changes having occurred, Any important events which took place during the period in question, and their effect on the Financial Statements of the Company and Consolidated for the same period, Any significant risks that may arise for the Company and the Group during the following remaining period of the fiscal year, Any transactions which took place between the Company and any Group undertakings, affiliate companies or other related parties, in accordance with IAS 24. Α. First Half 2011 Account Changes and Progress noted in the Financial Figures of the Company and the Group FG EUROPE S.A. exports presented an important increase of 39.25% during the 1st semester of the fiscal year 2011, compared to the corresponding period in 2010, as a result of the outward policy that consistently the Administration of FG EUROPE S.A. applies, aiming to support the Company to overcome the impact of the crisis realized in the domestic market. Total Revenue of FG EUROPE S.A. increased, in the 1st semester of 2011, by 12.51%, compared to the corresponding revenue in Also increased by 16.67% were the sales of air conditioners during the 1st semester in 2011, compared to the corresponding period in FG EUROPE S.A. Net Profit raised to 3,245 m Euros from 2,331 m Euros in 2010, presenting an upward movement of 39.21% for the same period of time. As of 30/06/2011, the cash equivalent assets raised to 39,083 m Euros from 27,586 in 31/12/2010, presenting a liquidity increase of 41.68%. As of 30/06/2011, Company s bank debt dropped to the outstanding balance of the Common Bond Loan ( m Euros) of which, an amount of m Euros, has already been paid on 28/7/2011. As of today, the outstanding debt is m Euros, while the level of short term bank liabilities remains still zero. More specifically, at the Parent Company level: In the 1st semester 2011, Total Revenues increased by 12.51%, compared to the corresponding Revenues in 2010, reaching the level of m Euros from m Euros in Air Conditioners sales increased to m Euros from m Euros in the previous year. 4

5 Additionally, Air Conditioners increased to m Euros from m Euros in 2010, presenting an upward movement of 39.25%. Due to the aforementioned increase, the exports account for 74.38% of sales of air conditioners and 69.58% of total sales of the Company, compared to the respective rates of 62.32% and 56.22% of the 1st semester The sales of Air Conditioners as long as the sales of SHARP and ESKIMO products decreased in the domestic market which is particularly affected by the financial crisis. Despite the upward movement of FG EUROPE total sales, the Gross profit of the company, in the 1st semester 2011, was boundary decreased (3,20%) due to the higher share of exports in the mix of total revenue and consequently the Gross Profit Margin decreased to 26.01% from 30.23% in the 1st semester Consolidates Group Figures: Revenue from Sales: Group s Total Revenue amounted to m Euros, compared to m Euros in the 1st semester 2010, presenting an increase of 11.80%, explained by the mentioned increase of sales of the Parent Company. Group s Revenues from the energy sold were slightly reduced to m Euros (2.893 m Euros in 2010), due to the 25% decline of revenues in the 1st quarter 2011, affected by the not favorable wind conditions at that period of time. Gross Profit : Group s Gross Profit, slightly reduced by 1.85%, form m Euros as of 30/06/2010 to m Euros as of 30/06/2011. Gross Profit Margin was also reduced to 27.33% from 31.13% in 2010, affected by the said decline of the respective Gross Profit Margin of the Parent Company. EBITDA : EBITDA reduced to m Euros from m Euros in the 1st semester 2010 with the respective EBITDA Margin also declined at the level of 11,62% compared to the level of 14.04% in Administrative, Distributions and other Expenses: Administrative, Distributions and other Expenses decreased by 2.63% in the first semester 2011 (9.422 m Euros in 1st semester 2011 from m Euros in 2010), improving the performance of the index General Expenses / Sales to 16.66% from 19,13% at the corresponding period in Finance Income/Expense: As at 30/06/2011 Group s final financial result raised to m Euros from m Euros in 2010, presenting an upward movement of 12,85%. Total Liabilities: As at 30/06/2011, Group s total debt amounted to m Euros ( m Euros as at 31/12/2010) presenting a significant increase, mainly due to the growing trade and other obligations of the Parent Company (prolongation of the repayment period to the principal supplier FUJITSU from 90 to 180 days), and to the increase in long and short term bank liabilities of the Energy Company of the Group. Earnings Before Tax: Group s EBT reduced at m Euros from m Euros in the 1st semester 2010, reducing also the performance of the index EBT / Sales to the level of 8.20% from 10.29%, in the 1st semester 2010 Earnings After Tax and Minority Interests: Group s Net Profit along with Minority Interest presented an increase of 46.60%, amounted to m Euros from m Euros as at 30/06/2010, due to the fact that the profit in the 1st semester 2010 was significantly burdened from extraordinary levy. 5

6 Other Financial Ratios: Group Company FINANCIAL RATIOS 30/6/ /06/ /6/ /06/2010 Current Ratio: 2,02 3,63 2,03 2,45 Quick Ratio: 1,49 1,47 1,34 1,25 Inventory Turnover Ratio (days): Return on Equity Ratio %: 6,69% 5,02% 9,31% 7,77% Earnings Before Tax Ratio %: 8,20% 10,29% 7,69% 10,34% EBITDA Ratio %: 11,62% 14,04% 8,77% 11,72% Β. Significant events occurred On 10/3/2011, the Extraordinary General Meeting of the subsidiary RF ENERGY S.A. decided to increase its share capital by 667. The increase will be in cash and will be covered by issuing 1,333,336 new shares with a nominal value of fifty cents (0.50) of the and disposal price of (1.50) each. The difference between nominal value and the disposal price, amounting to 1.333, will be brought to the credit of the account "Proceeds from issuance of shares above par. After the increase, the company's share capital amounts to , divided into 29,333,336 shares of nominal value (0.50) each. On 4/1/2011 an increase in equity of the subsidiary company of the Group Aioliki Aderes S.A. by the amount of for the direct financing of construction of three wind farms, the completion of which is expected to take place in On 4/2/2011 the subsidiary RF ENERGY S.A. acquired the remaining percentage (16%) of ten subsidiaries operating in the energy sector in the prefecture of Evia and now owns 100% of their shares. In the first quarter of 2011, the General Assembly of 10 subsidiary companies operating in the prefecture of Evia decided to increase their equity, so that the procedure for the acquisition of the Production Licenses can smoothly continue. These increases will be covered by the single shareholder, R.F. Energy S.A. Also on 2/6/2011, the General Assembly of the subsidiary company of the Group HYDROELECTRICAL ACHAIAS S.A., decided to decrease its share capital for the amount of 700, by cancelling shares and returning the amount at its unique shareholder, R.F. ENERGY S.A., in 3 instalments till 8/7/2011. Β. Significant events occurred Annual General Assembly of Shareholders convened Wednesday, April 14, 2010 and resolved to set Friday, April 16, 2010 as dividend ex date for the fiscal year General Assembly of Shareholders approved the distribution of dividend in the amount of euro per share. In accordance with Law 3697/2008 a 10% tax is imposed on dividend earnings, thus net dividend paid to the beneficiaries shall accordingly be euro per share. Beneficiaries for the dividend are holders of company shares as at the closing of the Athens Exchange on Tuesday, April 20, 2010 ("record date"). It should be further noted that, in accordance with the revised edition of the Athens Exchange Rulebook, all corporate actions as of take place based on the record date rule in replacement of the trade date rule. As the new rule 6

7 specifies, beneficiaries of the corporate action (in this case being the dividend) are those persons registered in the records of the D.S.S. as beneficiaries of the respective Transferable Securities on the above-mentioned date of determination of beneficiaries (record date). Payment of the dividend to the beneficiaries began on Monday, April 26, Payment of the dividend will be serviced through the bank EFG Eurobank Ergasias S.Α. The General Assemblies of Shareholders of the 100% subsidiaries companies of R.F. ENERGY S.A., R.F. ENERGY GARBIS S.A. and R.F. ENERGY ZEFIROS S.A., of May 31, 2010 decided the clearing up and liquidation of the aforementioned companies. The above-mentioned companies intended, through the planed acquisition, to undertake the management and operation of two wind parks with 18 and 24 MW capacity in Arkadia and for that reason increased their share capital in July 2009 in total by The planed acquisition was not materialized because of breach of agreement from the side of seller. The parent Company R.F. ENERGY S.A. has initiated legal actions claiming compensation for the expenses incurred. Future perspectives and outlook C. Future Perspectives and Outlook, Main Risks with regard to the second half of fiscal year 2011 The significant increase of exports, which expected to be continued and the positive financial results due to this factor helps the Company to overcome the consequences of the crisis in the local market. In combination with the satisfactory results from the energy sector through the RF ENERGY and its subsidiaries and the continuously satisfactory profitability which achieved in spite of the crisis, make the Board of Directors optimistic with regard the current fiscal year for the Company and the Group. Particular focus is paid to planning a sound structure of capitals, which, in conjuncture with adequate liquidity, will allow companies of the Group to overcome these turbulent financial times with minimum loss Risks and Uncertainties Financial Risk Management Financial risk factors: The Group s operations entail exposure to various financial risks (including foreign exchange risk, interest rates risk, cash flow risk and price risk credit risk and liquidity risk). The Group s risk management policy is focused in the unpredictability of the financial markets targeting the minimization of the factors that can negatively affect the financial performance of the Group. The Group uses in certain cases financial derivative products in order to hedge its exposure to certain risks. The risk management is conducted by the Company s financial management department in accordance with the policy authorized by the Company s Board of Directors. The financial management department detects, evaluates and hedges financial risks in close cooperation with the Group s other departments. The Board of Directors provides guidelines for the risk management in general and specifically covering such areas of risk as foreign exchange risk, interest rate risk, credit risk, the use of derivatives and non financial instruments as well as the investment of additional liquidity. Market risks Foreign exchange risk: The Group operates internationally and as a result, it is exposed to foreign exchange risks arising from commercial operations in foreign currencies (USD and JPY) with customers and suppliers using currencies other than the Euro. In order to minimize risks the Group on occasion hedges its exposure to foreign currency risk through derivative contracts but does not use hedging accounting. 7

8 Price volatility risk: The Group is exposed to price volatility risks resulting from investment in shares of listed companies, which for the purposes of preparing the Financial Statements are recognized as available for sales assets. In order to hedge this risk the Group diversifies its stock portfolio. Such diversification in the Group s portfolio is authorized by the Company s Board of Directors. Cash flow and interest rate risks: The Group is exposed to cash flow risk that may arise: a) through the volatility noted in variable interest rates which may cause positive or negative variations in cash inflows and/or outflows of assets and/or liabilities connected with these variable interest rates, b) through the increase in receivables which may be caused due to extension in the time when receivables are due, as suggested current market conditions, or c) through the increase of reserves, due to failure to realize expected sales growth. Interest rate risk results mainly from short and long term borrowing in Euro and in variable interest rates. The Group assesses its exposure to interest rate variation on a constant basis taking under examination any chance of refinancing of its existing obligations under different conditions and terms. On this basis the Group assesses any potential influence to its financial result arising out of contingent variations in interest rates pertaining to mid term and long term financing facilities. According to the Bond Loan Term Sheet under which the Company entered the bond loan agreement, in case of a set back in financial figures of the Company and failure to comply with the terms, the current spread of interest rates of 1.30%, may respectively rise up to 1.6%, thus accordingly having an effect on the cost of the debt financing. In the opposite case of further improvement of the Company s financial rates spread rates would further decrease to 0.9%. Credit risk: Credit risk is hedged at Group level. Such credit risk mainly arises out of from the existence of potentially doubtful receivables. For credit risk management purposes the Group has policies in place in order to continuously assess clients credibility taking into consideration the client s financial standing, previous transactions with the client, the client s credit history. Such factors and other are monitored on a steady basis and cannot be exceeding predefined levels for any individual client. Sales to individuals are conducted in cash. During the FY 2008 no excess in credit levels was noted and the Group does not expect any substantial potential losses which come as a result of inability to liquidate receivables. Moreover, part of the receivables arising from the international operations is secured through credit insurance and part of receivables in the mobile telephony business is covered through bank guarantees. Liquidity risk: Liquidity risk management ensures sufficient cash and cash equivalents and secured credit ability through existing financing. The Group monitors and controls cash on a daily basis, taking into consideration expected cash flows. Seasonality in sales of air-conditioners: Over the last years sales of air-conditioners showed signs of a seasonal trend mainly increasing during the summer period, and cooling off during winter. This resulted to concerns with regard to a) satisfying increased demand within a short period, which could potentially put sales in risk, b) sustaining added expenses due to maintaining of large stock to satisfy demand, as well as c) potential risks from doubtful debts due to the high number of credit openings in a relatively short period of time. However over the last couple of years this seasonal trend seems to steadily decrease and demand seems to spread more evenly throughout the year, nonetheless a relatively high demand sustained during summer months, and especially at times of extreme climate conditions, such as heat waves. This fact contributes towards higher quality client services and mitigation of the abovementioned risks. 8

9 D. Related party transactions According to IAS 24, related parties are subsidiary companies, affiliate companies and companies with common shareholding structure and/ or management. Moreover, the members of the Board of Directors and the Directors are also considered related parties. The Company purchases and provides products and services from and to related parties. Company sales to related parties primarily concern sales of products and merchandise. Sale prices are at cost plus a low profit margin. Services rendered to the Company primarily concern storage services (logistics etc.) as well as after sales services. Intercompany transactions take place in accordance with Law 3728/ , and under such conditions and terms which do not materially differ from relevant conditions and terms in agreements between the Company and third parties. The compensation of the members of the Board of Directors concern paid Board s of Directors compensation to Non-executive Independent members. The compensation of Directors concerns compensation of regular payment according to employment contracts. The following paragraph lists important transactions between the company and its related parties, having occurred during the period under review, in accordance with provisions of IAS 24, pertaining to amounts over 10 thousand: F.G. EUROPE S.A. sold mechanical parts to FIDAKIS SERVICE S.A. amounting to 0.034m thousands ( 0,045m for the respective period of 2010). All the sales above have been totally paid by FIDAKIS SERVICE S.A. F.G. EUROPE S.A. was charged by FIDAKIS SERVICE S.A. with the amount of 0.299m during the period from January 1 to June 30, 2011 ( 0.339m for the respective period of 2010), concerning the guarantee and service of air conditioners which FG EUROPE S.A sells in Greek Market. From the sales above, the liability of F.G EUROPE to FIDAKIS SERVICE S.A. is 0.089m. FIDAKIS LOGISTICS S.A. invoiced F.G. EUROPE the amount of 1.680m, according to their agreement for providing logistics services during the period from January 1 to June 30, The equivalent amount for the respective period of 2010 was 1.684m. From the sales above, the liability of F.G EUROPE to FIDAKIS LOGISTICS S.A. is 0.009m. The amount of 0.353m, included under receivables in the balance sheet, from FIDAKIS LOGISTICS, concerns payment in advance from F.G. EUROPE as guarantee, in accordance with an intercompany agreement. CYBERONICA S.A. s income from leasing offices and storing facilities rose to 1.534m during the period from January 1 to June 30, 2011 ( for the respective period of 2010). From that amount the contribution of F.G. EUROPE S.A. was 0.375m and the rest was paid from the other firms of the Group. The biggest share was paid by FIDAKIS LOGISTICS S.A. as it leases storage facilities of s.m. in Aspropyrgos. Group companies have paid as leasing guarantees to CYBERONICA S.A. the amount of 0.501m during the period from January 1 to June 30, 2011 (from 0.490m on June 30, 2010). The amount paid as guarantee from F.G. EUROPE S.A. is 0.114m. 9

10 E. Corporate Governance F.G. EUROPE S.A. pays great significance and undertakes all necessary actions to secure the necessary levels of transparency for all its actions and internal procedures, aiming to further strengthening its credibility for the sake of its shareholders and the investment community in general. The Company fully abides by and implements all provisions set forth by the statutory laws and legal framework. Corporate Governance practices implemented by the Board of Directors relevant sub-committees, are a major factor towards achieving the Company s corporate mission, which is maximizing the value of the shareholders equity. F. Internal Policies and Procedures The Company operates under an internal code of Policies and Procedures, which is updated and kept abreast of current events, in order to incorporate any issues arising pertaining to matters of corporate governance, as well as any changes in the organizational structure of the Company. G. ΙSO Certified F.G. EUROPE S.A implements the Quality Management System ISO 9001:2000 and is certified by the internationally recognizes Certification Organization, TUV Austria. The implementation of the Quality Management System, plays a pivotal role towards improving efficiency for the Company and its daily operations, and thus lays the ground for the optimal use of the Company s resources, as well as for the provision of excellent services for the Company s customers, partners and shareholders. H. Corporate Social Responsibility F.G. EUROPE S.A. is especially sensitive to matters of environmental awareness and protection. Respect for the environment, promoting renewable energy sources, taking part in recycling initiatives and implementing recycling policies, all are guidelines incorporated in F.G. Europe's strategy. The abovementioned are elements that define the Company s new corporate identity and guided the design of the new corporate logo of F.G. EUROPE S.A. All the above information mentioned with regard to the financial standing of the Company and the Group is accurate and can be confirmed through the Financial Statements for the period ending June 30, Glyfada, July 27, 2011 Chairman of the Board of Directors Georgios Fidakis 10

11 REPORT ON REVIEW OF INTERIM CONDENSED FINANCIAL INFORMATION To the shareholders of F.G. EUROPE SOCIETE ANONYME FOR ELECTRIC AND ELECTRONIC DEVICES Introduction We have reviewed the accompanying separate and consolidated condensed statement of financial position of FG EUROPE S.A. (the Company ) and its subsidiaries ( the Group ) as at 30 June 2011, and the related 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 (the interim condensed financial information ) which is an integral part of the six-month financial report of article 5 Law 3556/2007. Management is responsible for the preparation and presentation of this interim condensed financial information in accordance with International Financial Reporting Standards as adopted by the European Union and apply to interim financial reporting ( International Accounting Standard (IAS) 34 ). Our responsibility is to express a conclusion on this interim condensed financial information based on our review. Scope of review We conducted our review in accordance with the 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 of 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 Auditing Standards 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. Report on other legal and regulatory matters Our review did not identify any inconsistency or non-correspondence of the other information contained in the six-month financial report prepared in accordance with article 5 of Law 3556/2007, with the accompanying financial information. Athens, 29 July 2011 THE CERTIFIED AUDITOR ACCOUNTANT CHRISTODOULOS SEFERIS S.O.E.L. R.N ERNST & YOUNG (HELLAS) CERTIFIED AUDITORS ACCOUNTANTS S.A. 11TH KLM NATIONAL ROAD ATHENS LAMIA, METAMORFOSI COMPANY S.O.E.L. R.N

12 F.G. EUROPE S.A. 128, Vouliagmenis Ave Glyfada - Greece P.C. Reg. No /06/B/86/111 SIX - MONTHS FINANCIAL STATEMENTS COMPANY AND CONSOLIDATED FOR THE SIX MONTHS PERIOD ENDED JUNE 30,

13 CONTENTS Condensed interim Financial Statements 14 - Statement of Comprehensive Income (Consolidated and Company) for the sixmonths periods ended June 30, 2011 and Statement of Financial Position (Consolidated and Company) as of June 30, 2011 and December 31, Statements of Changes in Equity (Consolidated and Company) for the six-months periods ended June 30, 2011 and Statements of Cash Flows (Consolidated and Company) for the six-months periods ended June 30, 2011 and Notes to the interim Financial Statements (Company and Consolidated) Incorporation and Business of the Group Significant Accounting Policies used by the Group Basis of Preparation of Financial Statements New Standards, Interpretations and Amendments of Existing Standards and Interpretations Operating Segments Finance income and expenses Income Taxes Earnings per share Property, plant and equipment and intangible assets Inventories Receivables and prepayments Cash and cash equivalents Borrowings Available for sale investments Trade and other payables Related party transactions Contingencies Employee benefits: pension obligations Commitments Post Balance Sheet Events 36 Page Figures and information for the period from January 1 to June 30, 2011 (attached).. 13

14 Statement of Comprehensive Income (Consolidated) For the Six-Months Periods ended June 30, 2011 and 2010 For the Six-Months Periods Ended June 30, Consolidated For the Three-Months Periods Ended June 30, Note Sales Less: Cost of sales 3 (41.092) (34.830) (26.673) (22.165) Gross profit Other operating income Distribution expenses... 3 (7.287) (7.489) (4.096) (3.868) Administrative expenses.. 3 (2.133) (1.894) (992) (734) Other operating expenses... 3 (2) (293) 20 (293) Earnings before interests and taxes Finance income.... 3, Finance costs... 3,4 (3.161) (5.069) (1.866) (3.268) Earnings before taxes Income tax expense... 5 (884) (2.679) (703) (2.327) Net profit for the period Attributable as follows: Equity holders of the Parent Minority interest (79) Net profit (after tax) attributable to the Group Other Comprehensive Income Available for sale investments (60) (6) (86) Other Comprehensive Income after taxes 12 (60) (6) (86) Total Comprehensive Income after taxes Attributable as follows: Equity holders of the Parent Minority interest (79) Net profit (after tax) attributable to the Group Earnings per share (expressed in Euros): Basic. 6 0,0657 0,0448 0,0572 0,0318 The accompanying Notes on pages 20 to 36 are an integral part of the interim Financial Statements. 14

15 Statement of Comprehensive Income (Company) For the Six-Months periods ended June 30, 2011 and 2010 For the Six-Months Periods Ended June 30, Company For the Three-Months Periods Ended June 30, Note Sales Less: Cost of sales 3 (39.643) (33.225) (25.935) (21.400) Gross profit Other operating income Distribution expenses... 3 (7.344) (7.418) (4.169) (3.903) Administrative expenses.. 3 (1.529) (1.361) (812) (652) Other operating expenses... 3 (2) - (2) - Earnings before interests and taxes Finance income.... 3, Finance costs... 3,4 (2.677) (4.565) (1.714) (3.051) Earnings before taxes Income tax expense... 5 (874) (2.595) (721) (2.362) Net profit for the period Other Comprehensive Income Available for sale investments. 12 (60) (6) (86) Other Comprehensive Income after taxes 12 (60) (6) (86) Total Comprehensive Income after taxes Earnings per share (expressed in Euros): Basic. 6 0,0615 0,0441 0,0523 0,0321 The accompanying Notes on pages 20 to 36 are an integral part of the interim Financial Statements. 15

16 Statement of Financial Position (Company and Consolidated) As of June 30, 2011 and December 31, 2010 Note June 30, 2011 Consolidated December 31, 2010 June 30, 2011 Company December 31, 2010 ASSETS Non-current assets Property, plant and equipment Investments in real estate property Intangible assets Investments in subsidiaries Long term receivables Deferred tax assets Available for sale investments Total non-current assets Current assets Inventories Trade receivables Cash and cash equivalents Total current assets Total assets SHAREHOLDERS EQUITY & LIABILITIES SHAREHOLDERS EQUITY Shareholders equity attributable to the equity holders of the parent company Share capital Share premium Reserves Retained earnings Minority interest Total shareholders equity LIABILITIES Non-current liabilities Long term Borrowings Retirement benefit obligations Deferred government grants Long-term provisions Deferred tax liabilities Total non-current liabilities Current liabilities Short term Borrowings Short term portion of long term borrowings Current tax liabilities Trade and other payables Total current liabilities Total liabilities Total equity and liabilities The accompanying Notes on pages 20 to 36 are an integral part of the interim Financial Statements. 16

17 Consolidated Share capital F.G. EUROPE S.Α. Statements of Changes in Equity (Consolidated) For the Six-Months Periods ended June 30, 2011 and 2010 Share premium Legal reserve Available for sales - Fair value reserves Special tax reserves Retained earnings Total Total Minority interest equity Balance on January 1, (76) Year s changes: Net profit for the period Other Comprehensive Income (60) - - (60) - (60) Total Comprehensive Income (60) Dividend distribution for fiscal year (7.920) (7.920) - (7.920) Interruption of operation of subsidiary (12) Balance on June 30, (60) (833) Balance on January 1, (144) Year s changes: Net profit for the period Other Comprehensive Income Total Comprehensive Income Share capital increase Purchase of minority interest (57) (57) (39) (96) Expenses of issuance of shares - (58) (58) - (58) Balance on June 30, (132) The accompanying Notes on pages 20 to 36 are an integral part of the interim Financial Statements. 17

18 Company F.G. EUROPE S.Α. Statements of Changes in Equity (Company) For the Six-Months Periods ended June 30, 2011 and 2010 Share capital Share premium Legal reserve Available for sales - Fair value reserves Special tax reserves Retained earnings Total Balance on January 1, (76) Year s changes: Net profit for the period Other Comprehensive Income (60) - - (60) Total Comprehensive Income (60) Balance on June 30, (50) Balance on January 1, (144) Year s changes: Net profit for the period Other Comprehensive Income Total Comprehensive Income Balance on June 30, (132) The accompanying Notes on pages 20 to 36 are an integral part of the interim Financial Statements. 18

19 Statements of Cash Flows (Company and Consolidated) For the Six-Months Periods ended June 30, 2011 and 2010 Consolidated Company For the Six-Months Period Ended June 31, CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax (and minority interest) Add / (less) adjustments for: Depreciation and amortization Provisions Result of investment activity... (360) (600) (331) (410) Interest and similar expenses Government grants recognized in income.. (390) (394) - (5) Employee benefits (18) Operating result before changes in working capital Add / (less) adjustments for changes in working capital items: (Increase) / decrease in inventories (9.314) 829 (9.318) (Increase) / decrease in receivables and prepayments (16.113) (9.913) Increase / (decrease) in trade and other payables (10.913) (Increase) in long term receivables.. (11) 41 (2) 41 Total cash inflow / (outflow) from operating activities Interest income Income taxes paid (786) (1.443) (717) (1.349) Total net inflow / (outflow) from operating activities CASH FLOWS FROM INVESTING ACTIVITIES (Purchase) of subsidiaries and other investments (58) - (750) - Proceeds from the sale of subsidiaries and other investments (Purchase) of PPE and intangible assets.. (33.739) (230) (6) (89) Government grants Total net cash inflow / (outflow) from investing activities (28.093) (222) (756) (81) CASH FLOWS FROM FINANCING ACTIVITIES Share capital increase Proceeds from borrowings Repayments of borrowings. - (4.989) (5.205) (3.161) Interest and similar expenses paid... (663) (809) (337) (400) Dividends paid. - (7.920) - (7.920) Total net cash inflow from financing activities (13.718) (5.542) (11.481) Net increase / (decrease) in cash and cash equivalents (2.031) Exchange rate differences Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period The accompanying Notes on pages 20 to 36 are an integral part of the interim Financial Statements. 19

20 Notes to the interim Financial Statements (Company and Consolidated) For the Six-Months Period ended June 30, Incorporation and Business of the Group The parent company F.G. EUROPE S.A. (hereinafter referred to as the Company ) and its subsidiaries (hereinafter referred to as the Group) activate: The company in the import and wholesale of all types of air conditioners, all types of white and consumer electronics electrical appliances, LCD Plasma televisions and in the wholesale of products and services of mobile telephony. The subsidiaries FIDAKIS SERVICE S.A. and FIDAKIS LOGISTICS S.A. cover supplementary fields like after sales services, inventory management (logistics), etc. while R.F. ENERGY S.A. and its subsidiaries below activate in the field of electric energy production from renewable energy sources. HYDROELECTRICAL ACHAIAS S.A. CITY ELECTRIC S.A. AEOLIC KYLINDRIAS S.A. KALLISTI ENERGIAKI S.A. R.F. ENERGY S.A. MISOHORIA S.A. R.F. ENERGY S.A. OMALIES S.A. R.F. ENERGY S.A. KORAKOVRAHOS S.A. AEOLIC ADERES S.A. R.F. ENERGY S.A. DEXAMENES S.A. R.F. ENERGY S.A. LAKOMA S.A. R.F. ENERGY S.A. TSOUKKA S.A. R.F. ENERGY S.A. PRARO S.A. R.F. ENERGY S.A. XESPORTES S.A. R.F. ENERGY S.A. SHIZALI S.A. R.F. ENERGY S.A. KALAMAKI S.A. The Company and the Group are domiciled in Greece, in the municipality of Glyfada, with registered offices: 128, Vouliagmenis Ave., GR Glyfada, Greece. The total number of personnel occupied as of June 30, 2011 is 66 for the Company and 114 for the Group. The Company s shares are listed on the primary market segment of the Athens Exchange. The subsidiaries contained with the method of full consolidation in the attached consolidated financial statements of the group are the following: Name Country Share as of June 30, 2011 Method of consolidation F.G. EUROPE S.A. Greece Parent company Full consolidation FIDAKIS LOGISTICS S.A. Greece 100,00% (a) Full consolidation FIDAKIS SERVICE S.A. Greece 100,00% (a) Full consolidation R.F. ENERGY S.A. Greece 37,50% (a) Full consolidation HYDROELECTRICAL ACHAIAS S.A. Greece 37,50% (b) Full consolidation CITY ELECTRIC S.A. Greece 37,50% (b) Full consolidation AEOLIC KYLINDRIAS S.A. Greece 37,50% (b) Full consolidation KALLISTI ENERGIAKI S.A. Greece 37,50% (b) Full consolidation AEOLIC ADERES S.A. Greece 37,50% (b) Full consolidation R.F. ENERGY S.A. MISOHORIA S.A. Greece 37,50% (b) Full consolidation R.F. ENERGY S.A. OMALIES S.A. Greece 37,50% (b) Full consolidation R.F. ENERGY S.A. KORAKOVRAHOS S.A. Greece 37,50% (b) Full consolidation R.F. ENERGY S.A. DEXAMENES S.A. Greece 37,50% (b) Full consolidation R.F. ENERGY S.A. LAKOMA S.A. Greece 37,50% (b) Full consolidation R.F. ENERGY S.A. TSOUKKA S.A. Greece 37,50% (b) Full consolidation R.F. ENERGY S.A. PRARO S.A. Greece 37,50% (b) Full consolidation R.F. ENERGY S.A XESPORTES S.A. Greece 37,50% (b) Full consolidation R.F. ENERGY S.A. SHIZALI S.A. Greece 37,50% (b) Full consolidation R.F. ENERGY S.A. KALAMAKI S.A. Greece 37,50% (b) Full consolidation 20

21 Notes to the interim Financial Statements (Company and Consolidated) For the Six-Months Period ended June 30, 2010 Note: a) Direct investments, b) Indirect investments F.G. EUROPE s holding share in the company R.F. ENERGY S.A. is to 37,50%. Due to the fact that the main shareholder and Chairman of the Board of Directors of F.G. EUROPE S.A., Mr. George Fidakis also participates with 12,50% in R.F. ENERGY S.A. and the existing shareholders agreement concerning the appointment of the majority of Board Members through F.G. EUROPE S.A., R.F. ENERGY is fully consolidated in the Company s financial statements, with the method of full consolidation. F.G. EUROPE S.A. participates with 11,11% in the share capital of ANAKYKLOSI SYSKEVON SYMMETOCHIKI S.A. which is not included in the consolidated financial statements of the Group and the Company as Available for sale investment. The investments in subsidiaries of the Company are as follows: Investments in Subsidiaries as at Subsidiary name Additions till Reductions till Balance as at Additions Reductions Balance as at R.F. ENERGY S.A (5.250) FIDAKIS SERVICE S.A (1.696) FIDAKIS LOGISTICS S.A (397) Total (7.343) Investments in Subsidiaries as at Subsidiary name Additions till Reductions till Balance as at Additions Reductions Balance as at R.F. ENERGY S.A (5.250) FIDAKIS SERVICE S.A (1.696) FIDAKIS LOGISTICS S.A (397) Total (7.343) The subsidiaries on the Company financial statements are valued at cost less any impairment losses. On 10/3/2011, the Extraordinary General Meeting of the subsidiary RF ENERGY S.A. decided to increase its share capital by 667. The increase will be in cash and will be covered by issuing 1,333,336 new shares with a nominal value of fifty cents (0.50) of the and disposal price of (1.50) each. The difference between nominal value and the disposal price, amounting to 1.333, will be brought to the credit of the account "Proceeds from issuance of shares above par. After the increase, the company's share capital amounts to , divided into 29,333,336 shares of nominal value (0.50) each. 21

22 Notes to the interim Financial Statements (Company and Consolidated) For the Six-Months Period ended June 30, 2010 On 4/1/2011 an increase in equity of the subsidiary company of the Group Aioliki Aderes S.A. by the amount of for the direct financing of construction of three wind farms, the completion of which is expected to take place in On 4/2/2011 the subsidiary RF ENERGY S.A. acquired the remaining percentage (16%) of ten subsidiaries operating in the energy sector in the prefecture of Evia and now owns 100% of their shares. In the first quarter of 2011, the General Assembly of 10 subsidiary companies operating in the prefecture of Evia decided to increase their equity, so that the procedure for the acquisition of the Production Licenses can smoothly continue. These increases will be covered by the single shareholder, R.F. Energy S.A. Also on 2/6/2011, the General Assembly of the subsidiary company of the Group HYDROELECTRICAL ACHAIAS S.A., decided to decrease its share capital for the amount of 700, by cancelling shares and returning the amount at its unique shareholder, R.F. ENERGY S.A., in 3 instalments till 8/7/2011. The total effect in the Other comprehensive income after tax concerns the profit of 12 that arose on June 30, 2011, from the valuation of securities which are classified as available for sale investments and was recognised directly in Group s and Company s Equity. 2. Significant Accounting Policies used by the Group 2.1 Basis of Preparation of Financial Statements These consolidated and company financial statements (hereinafter referred to as Financial Statements ) have been prepared according to International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board and Interpretations that have been issued by the Standing Interpretations Committee. These financial statements have been prepared according to IAS 34 (Interim Financial Reporting) and therefore should be considered in combination with the audited financial statements as of December 31, 2010 that are accessible on the internet site of the Company. The Accounting policies, estimations and calculation methods adopted for the preparation of these interim Financial Statements are those used for the preparation of the Annual Financial Statements for the year ended December 31, 2010, apart from the adoption of new standards and interpretations that were adopted for first time as of January 1, 2011, the impact of which on the Financial Statements is mentioned below in note 2.2. The preparation of consolidated financial statements in conformity with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Using the available information and the implementation of subjective evaluation are necessary in order to conduct forecasts. Actual results may differ from estimates and deviations can have serious impacts on the Financial Statements. The operating results of the six-months period ended June 30, 2011, are not indicative for the results expected by management for the year ending December 31, 2011 because of the seasonality of the core business. This seasonality results from fact that air conditioners sales that are the company s core business in terms of profitability multiply during the second and third quarter of the year dependent on the weather conditions. 22

23 Notes to the interim Financial Statements (Company and Consolidated) For the Six-Months Period ended June 30, New Standards, Interpretations and Amendments of Existing Standards and Interpretations New International Accounting Standards have been issued, including amendments and interpretations, which are compulsory for annual accounting periods beginning after January 1, The management s estimation of both the Group and the Company, relating to the impact from the enforcement of these new amendments and interpretations, is referred further: Changes in accounting policy and disclosures The accounting policies adopted are consistent with those of the previous financial year except as follows: IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments IFRIC 14 Prepayments of a Minimum Funding Requirement (Amended) IAS 32 Classification on Rights Issues (Amended) IAS 24 Related Party Disclosures (Revised) Improvements to IFRSs (May 2010) These amendments had not an impact on the financial position or performance of the Group Standards issued but not yet effective Until the date of preparation of the Financial Statements, standards and interpretations have been issued but are not yet effective. Apart from the standards and interpretations that are not applied yet and are referred to in the Financial Statements of December 31, 2010, the below have been also issued. IFRS 10 Consolidated Financial Statements The new standard is effective for annual periods beginning on or after 1 January IFRS 10 establishes a single control model that applies to all entities, including special purpose entities. The changes introduced by IFRS 10 will require management to exercise significant judgment to determine which entities are controlled and, therefore, are required to be consolidated by a parent. Examples of areas of significant judgment include evaluating de facto control, potential voting rights or whether a decision maker is acting as a principal or agent. IFRS 10 replaces the part of IAS 27 Consolidated and Separate Financial Statements related to consolidated financial statements and replaces SIC 12 Consolidation Special Purpose Entities. This standard has not yet been endorsed by the EU. The Group is in the process of assessing the impact of the new standard on the financial position or performance of the Group. IFRS 11 Joint Arrangements The new standard is effective for annual periods beginning on or after 1 January IFRS 11 eliminates proportionate consolidation of jointly controlled entities. Under IFRS 11, jointly controlled entities, if classified as joint ventures (a newly defined term), must be accounted for using the equity method. Additionally, jointly controlled assets and operations are joint operations under IFRS 11, and the accounting for those arrangements will generally be consistent with today s accounting. That is, the entity will continue to recognize its relative share of assets, liabilities, revenues and expenses. IFRS 11 replaces IAS 31 Interests in Joint Ventures and SIC 13 Jointly Controlled Entities Non-Monetary Contributions by Venturers. This standard has not yet been endorsed by the EU. The Group is in the process of assessing the impact of the new standard on the financial position or performance of the Group. IFRS 12 Disclosures of Interests in Other Entities 23