SEMIANNUAL FINANCIAL REPORT FOR THE FISCAL PERIOD BETWEEN JANUARY 1 JUNE 30, 2015 Pursuant to Law 3556/2007, article 5 CRETA FARM C.I.S.A. General Commercial Registry no. 22059150000 S.A. Reg. no.: 11867/06/Β/86/38 15 th km of Rethymnon Herakleion National Road Municipality of Arkadion, Rethymni Postcode: 74100
Semiannual Financial Report for period 1/1 30/6/2015 CONTENTS A. Declarations of the Representatives of the issuing entity s Board of Directors... 2 B. Semiannual Directors' Report... 3 C. Review report on the interim financial information... 8 D. Semiannual Financial Statements... 9 1. Financial Statements... 10 1.1. Concise Statement of Financial Position...... 10 1.2. Concise Statement of Comprehensivee Income for the period 1.1 30.06.15...... 11 1.3. Concise Statement of Comprehensivee Income for the period 1/4 30.06.15... 12 1.4. Concise Statement of Changes in Equity... 13 1.5. Concise Statement of Cash Flows... 14 2. General background... 15 2.1. Information about the and the... 15 2.2. General information about the Financial Statements... 15 2.3. Basis for preparing the interim financial statements... 16 3. Significant events during the reporting period... 19 3.1. Period results... 19 3.2. Extraordinary General Assembly... 19 3.3. Decisions issued by the Ordinary Shareholder General Assembly... 19 3.4. Taking out of a new syndicated loan... 19 3.5. transformations... 19 3.6. Risks and uncertainties... 20 4. Analysis of financial statements... 20 4.1. Operating segments... 20 4.2. Tangible assets... 21 4.3. Intangible assets... 22 4.4. Earnings per share... 23 4.5. Seasonal nature of business activities and changes... 24 4.6. Dividends... 26 4.7. Contingent liabilities and receivables... 26 4.8. Related parties disclosures... 26 4.9. Events after the reporting date... 28 E. Period details and information... 29 1
Semiannual Financial Report for period 1/1 30/6/2015 A. Declarations of the Representatives of the issuing entity s Board of Directors The members of the Board of Directors of CRETA FARM C.I.S.A.": 1. Emmanuel Domazakis 2. Konstantinos Domazakis 3. Eleni Domazaki Hereby declare and verify, to the best of our knowledge, that: A) The semiannual financial statements of the Société Anonyme under the title of CRETA FARM C.I.S.A. for the period between 1/1 and 30/06/15, which have been which have been prepared in accordance with the applicable accounting standards, present a true view of the assets and liabilities, of the net position and of the resultss of operations of the issuing entity, as well as of the entities includedd in the consolidation, accounted as a single entity, as per paragraphs 3 to 5 or article 5 of Law 3556/2007, and as per the resulting decisions issued by the Board of the Hellenic Capital Market Commission. B) The semiannual Directors Report presents truthfully the information required in accordance with paragraph 6, article 5, Law 3556/2007, and with the resulting decisions issued by the Board of the Hellenic Capital Market Commission. Rethymnon, August 28, 2015 The President of the Board and Managing Director The VicePresident of the Board and Managing Director The Member of the BoD Emmanuel Domazakis Konstantinos Domazakis Eleni Domazaki ID. no: Ι 975738 / 74 ID. no: ΑΒ 187558 / 06 ID. no: ΑΒ 968771 / 07 2
Semiannual Financial Report for period 1/1 30/6/2015 B. Semiannual Directors' Report The present Semiannual Directors Report of CRETA FARM C.I.S.A. presented below refers to the 1 st sixmonth period of the current fiscal period of 2015 (01.01.15 30.06.15). This report has been prepared and has been aligned with the relevant clauses of paragraph 6, article 5, of Law 3556/2007 (Government Gazette 91Α/30.04.2007) and the resulting executive decisions issued by the Hellenic Capital Market Commission, no. 1/434/2007 article. 3 and Decision 7/448/11.10.2007 article 4. The present report provides a summary description of the s financial details for the 1 st semester of the current 2015 year, as well as the important events that took place during this period and the effect thereof on the semiannual financial statements. In addition, it describes the main risks and uncertainties the companies of the may face in the 2 nd semester of 2015 year and reference is made to assessments and the progress of activities of the issuing entity for the 2 nd semester of 2015. Financial developments and performance of reporting period The 1 st semester of 2015 found the company with an increase in sales and with a steady profitability margin, despite the difficult financial situation. The upheaval caused to the Greek economy, resulting from the internal political uncertainty, and following the political developments regarding the negotiations with the "Institutions" lending money to the Greek State, was made evident by the fall in the growth rate of the Greek economy, from 1.3% of the GDP in the last quarter of 2014 to just 0.4% of the GDP in the first quarter of 2015. The fourmonth extension to the second programme of Fiscal Adjustment and the lasting inability to reach to an agreement between the Greek Government and the "Institutions" resulted to the appearance of scenarios forecasting the exit of Greece from the Eurozone. These scenarios managed to escalate uncertainty for Greek economy during the first semester, both for companies and natural entities. The obvious outcome of the uncertainty caused to the Greek society was the outflow of significant capitals from the Greek bank system, along with the increase of nonserved loans. In response to this pressure, the Greek banking system increased its exposure to the Emergency Liquidity Assistance (ELA), provided by the European Central Bank (ECT). The result from this chain of events was the eradication of consumer faith, which affected all Greek businesses, along with the difficulty of securing financing, either due to lack of resources or due to excessive cost of money, and finally from the reduction of credit period by foreign suppliers. At the end of the first semester, the inability to complete the third evaluation of the programme was confirmed, which led to a cease in negotiations with the Institutions, following the decision to hold a referendum on July 5. The capital controls resulting in order to deal with the continuing outflow of capitals by the Greek bank system have aggravated business transactions, especially with abroad entities, while the breach of trust caused is difficult to be restored. As a result from the change in how foreign suppliers dealt with Greek businesses, the credit period offered was rapidly reduced and rather eliminated. The agreement achieved in the Summit of July 12 laid the foundations in order to reboot the Greek economy, something that is very difficult to have a direct result any relevant results need time. Turnover sales reached 50.4 MM, showing 5.2% increase in comparison with the 1 st semester of 2014. The respective figures for the parent company reached 50.1 MM during 2015 and 47.8 MM during the respective period of 2014, i.e. increased by 5%, a fact that due to the negative financial situation proves the faith of consumers placed on company products. Earnings before interest, taxes, depreciation and amortization (EBITDA): The 's EBITDA reached 5.26 MM vs. 7.1 MM in 2014. The respective company figures reached 5.36 MM for 1/130/6/2015 period vs. 7.0 MM for the respective period of 2014. Loans The net loans of the company reached 97.6 MM vs. 94.5 MM on 31.12.14. At group level, net loans reached 102.8 MM vs. 99.7 MM on 31.12.14. Financial ratios Financial ratios Gross margin EBITDA margin EBIT margin 1.1.2015 1.1.2014 1.1.2015 30.06.2015 30.06.2014 30.06.2015 40.5% 43.5% 40.6% 10.4% 14.8% 10.7% 5.7% 9.7% 6.7% 1.1.2014 30.06.2014 44.0% 14.8% 10.7% Significant events following the 1 st sixmonth period of the financial period Periods occurring during the reporting period Commercial activities 3
Semiannual Financial Report for period 1/1 30/6/2015 The company grew based on a strong development strategy for "EN ELLADI" brand, based on 3 clear axes: Strong advertising support with a new campaign, communicating with a very effective way all the values of the brand: taste, high nutritional value, care. Important innovations "EN ELLADI roast chicken", responding to consumer needs for prepared meat with reduced fat, while having the rich taste provided by extra virgin oil, thanks to our unique "EN ELLADI" recipe. Increase of distributions. By this way, the "EN ELLADI" brand, in the 1 st semester of the year, acquired a share of 14.5% in value (IRI), while the entire share of the company was increased (YTD June) to 25.5% in value, +1.2 units above last year, and in June MTD to 26.4%. The market of the prepared meat was increased by 4.1% versus the previous year, while the company was increased with a rate of 9.4% versus the previous year. Decisions issued by the Ordinary Shareholder General Assembly On June 15, 2015, the annual ordinary shareholder general assembly took place. In summary: The Annual Consolidated and Separate Financial Statements were approved. The option not to pay any dividend from the results of 2014 fiscal period was approved. The discharge of the members of the Board of Directors and of the Certified Auditor Accountant from all liabilities for the operations during the 2014 fiscal year was approved. The election of auditing firm GRANT THORNTON CERTIFIED AUDITORS SOCIÉTÉ ANONYME was approved in order to conduct the ordinary audit of the annual financial statements for 2015 fiscal year and audit the tax compliance of the company for 2015. The fees of the Board members for the fiscal year of 2014 were approved and the fees of the members of the Board for the fiscal year of 2015 were preapproved. The provision of permission was approved for the signing of agreements between the company and related parties. The permission to the members of the 's Board of Directors and to its Managers to participate in Board of Directors or in the management of companies belonging to the was approved. The transactions of the company with the related parties were approved. Events after the reporting period According to the new tax law, 4334/2015, which was enacted on 16/07/2015, the tax rate for legal entities registered in Greece was increased from 26% to 29% for the periods starting on 01/01/2015. This change in the tax rate is estimated to result to an increase in the deferred taxes by 419 th. for the and 178 th. for the. Apart from the above events, no events took place following the reporting date that could affect either the or the, which should be reported as per the IFRS. Assessments and progress of operations for the 2 nd semester of the financial period The measures enacted within August, as prerequisites for the commencement of discussions with the "Institutions", with the objective of reaching into an agreement with the European Support Mechanism (ESM) for a new financing programme for the Greek Government will result to a further increase of taxes on consumption, through the increase of the VAT over foods at 23%. Already, based on the forecasts of the European Commission about the Greek Economy, a financial recession is anticipated, with a shrinking rate of the actual GDP amounting between 2% and 4% versus an increase of 0.77% in 2014. These volumes are not fixed, and the actual results shall depend largely on the coming developments. Important milestones in the course to regularity for the Greek economy and businesses is political stability, a new financing programme by the ESM, the recapitalization of Greek banks, and the elimination of capital controls. The above, in combination with the implementation of structural changes in public administration could revert the negative climate and the lack of trust to the Greek economy. Despite the negative developments and the hindrances, Creta Farm is expecting for a second consecutive time an increase in sales, along with an increase in share market. The successful agreement achieved with lending banks for the restructuring of loans has protected the company from liquidity issues that could arise from the capital controls. At the same time, using innovation and the uniqueness of its products, it shall increase its efforts to infiltrate to new markets, while increasing its current market sharess in existing markets. The focus shall continue on offering quality products, securing the best possible quality price ratio, since consumers want to feel confident and have a sense of trust in an uncertain environment. At the same time, the, at an international level, operates always with the objective of profitable growth. 4
Semiannual Financial Report for period 1/1 30/6/2015 Risks and uncertainties for the 2 nd sixmonth period of the financial period Uncertainties Reduced buying power by consumers due to the political instability and of the new measures. reduction in consumption, and a turn to cheaper products and offers. While food services had begun to stabilize and show signs of recovery within 2014, a recession is expected. Lack of liquidity in the market due to the enforcement of capital controls. Concentration of the trade. The food industry is a highly competitive environment. Despite the fact that the infiltration of imports is reduced, the further reduction of available income may turn part of consumers to products of lower price, and usually lower quality. Any increase in the international prices of raw materials or any shortages in them may significantly affect the production cost for the company. The operates in a regulatory environment that relates to environmental and health and safety standards. Changes in the regulatory environment can lead to legal liabilities and additional costs. The financial crisis affecting Greece in the past four years could have a further impact on the financial figures of the company. The additional measures taken for 20142015 period shall further reduce the available income and may affect demand for company products. Objectives and risk management policies The is exposed to financial risks, such as market risks (changes in the exchange rates, interest rates, market prices), credit risk and financial liquidity risk. The general risk management program of the is focused on the unpredictability of the financial markets and seeks to minimise the potential negative influence thereof on the 's financial performance. Credit risk Credit risk relates to the possibility of a contractor causing financial loss to the due to breach of contractual obligations. Receivables from customers are a class of financial instruments that may adversely affect the smooth liquidity of the. Under control of credit risk, the shall, on the basis of the policy followed, to the extent of highest possible proliferation of sales to a large number of customers, while consistently applying a clear credit policy which is monitored and evaluated on an ongoing basis so that allocations not to exceed every customer's designated credit limit. Furthermore, some claims are secured through a credit insurance company or factoring. To manage credit risk, clients are grouped according to category of falling, their credit characteristics, the majority of their claims and any problems in the past they have shown. Any receivables considered bad are reassessed at each reporting period and relevant provision for impairment is formed. Liquidity risk Liquidity risk refers to the fact that the might fail to meet its financial obligations. The handles its liquidity needs by daily monitoring its cash flows and conducting rolling forecasts thereof on a weekly, monthly and quarterly basis. Currency risk Currency risk concerns the possibility that the fair value or cash flows of a financial instrument will fluctuate because of changes in foreign currency exchange rates. Most of commercial transactions of companies in the are made in the currency of the primary economic environment (functional currency) which is the Euro. The activities of the in foreign markets is not of such volume to have significant risk of affecting the reasonable value or the future cash flows of the financial means of the or, which could lead to significant variations due to changes in foreign currency exchange rates. Interest rate risk The 's loan obligations are connected to fluctuating interest rates, which depending to the conditions of the market, may either remain fluctuating or convert to fixed interest rates. The company does not use financial derivative products. As in the previous year, the remaining financial assets and liabilities are not significantly affected by interest rate fluctuations. Risk of live assets The operations related to live assets include certain special risks. These risks refer to animal illnesses and the possible loss of large stock. The company, in an effort to adjust to E.U. directives and to pertinent legislation, maintains a high level of health specifications, thus minimizing any possible risks. Risks from the enforcement of capital controls in Greece This is expected to result to a Following the Act of Legislative Content (ALC) of June 28, 2015, a bank holiday was enforced, along with capital controls. The bank holiday enforced was terminated following the ALC of July 18, 2015, but the capital controls remained. Until the reporting date, the capital controls, albeit differentiated, remain. Indicative of the above developments is the appearance of delays in the prompt payment of liabilities by a part of the customers, which has a negative impact on the liquidity of the. In addition, the increased of the Greek economy and of the Greek banking system forced the company to make use of its available cash, in order to purchase raw materials from foreign suppliers, something that inevitably affected its liquidity. 5
Semiannual Financial Report for period 1/1 30/6/2015 The Management assesses that the negative financial developments of the first semester are expected to have a temporary impact on the results of the and of the, and that following the coming elections, the Greek economy and the banking system shall return to normalcy rapidly. At the same, all necessary measures have been taken in order to limit these impacts, based on the international activity and the exporting character of the, while depending on the continued trust by domestic consumers over products, as shown by the continuous increase in sales. Transactions with related parties Related parties refer to subsidiaries, companies sharing owners and/or Management with the, any associated companies, joint ventures, and also members of the Board of Directors and the management personnel of the company. The company receives from these related parties goods and services, while it provides goods and renders services to them. At the same time, there is a financing agreement for a company, along with the provision of guarantees and securities. The structure of the, along with the key details of the companies included in it, is presented below: Structure No. name Registered Office 1 CRETA FARM CISA Greece 2 TETOFARMA SA Greece 3 FARMA THESSALIAS SA Greece 4 Creta Farm Cyprus LTD Cyprus 5 Creta Farm Espana SL Spain 6 Creta Foods SA Luxembourg 7 Creta Farms LTD Cyprus Relation with parent Participation % Participation company 100% Parent 95% Direct Subsidiary 98% Direct Subsidiary 100% Direct Subsidiary 50% Direct Joint Venturee 100% Direct Subsidiary 80% Indirect Subsidiary Consolidation method Full consolidation Full consolidation Full consolidation Proportionate consolidation Full consolidation Full consolidation 8 Creta Farms USA, LLC US 80% Direct Subsidiary Full consolidation Transactions with the issuing entity, per category of companies, as such have been classified based on the relation thereof with the issuing entity (subsidiaries, joint ventures, etc.), are presented below. Transaction type Sales of goods Purchases of goods Provision of services Interest and relevant income/expenses Other expenses, costs, or losses Results of Operations Attribution to related parties Expense, cost, or loss Income or profit Subsidiaries Joint Ventures Other related parties 26 26 26 26 Transaction type Sales of goods Purchases of goods Provision of services Interest and relevant income/expenses Other expenses / income Results of Operations Attribution to related parties Expense, cost, or loss Income or profit Subsidiaries Joint Ventures Other related parties 567 567 26 26 555 555 1,148 1,122 26 Transaction type Loans and financing Other transactions creating receivables Other transactions creating payables Statement of Financial Position Attribution to related parties Receivable Payable Subsidiaries Joint Ventures Other related parties 9,621 110 9,511 (206) (206) 9,621 (206) 110 9,306 Statement of Financial Position Attribution to related parties Transaction type Receivable Payable Subsidiaries Joint Ventures Other related parties Loans and financing Other transactions creating receivables 17,956 17,956 20,267 10,645 110 9,511 6
Semiannual Financial Report for period 1/1 30/6/2015 Other transactions creating payables (3,037) (2,825) 38,222 (3,037) 25,776 (7) (206) 103 9,306 The fees of key management personnel amounted to 578 th. Rethymnon, August 28, 2015 The President of the Board and Managing Director The VicePresident of the Board and Managing Director Emmanuel Domazakis ID. no: Ι 975738 / 74 Konstantinos Domazakis ID. no: ΑΒ 187558 / 06 7
Semiannual Financial Report for period 1/1 30/6/2015 C. Review report on the interim financial information To the Shareholders of ''CRETA FARM C.I.S.A.".. Introduction We have reviewed the attached concise corporate and consolidated statement of financial position for CRETA FARM C.I.S.A." (hereinafter referred to as the "") and of its subsidiaries, dated June 30, 2015, and the relevant concise corporate and consolidated results of operations and statement of comprehensive income, changes in equity, and cash flows for the sixmonth period that expired on the above date, along with the selected explanatory notes, constituting the interim concise financial information, which is an essential part of the semiannual financial report provided for by article 5, L. 3556/2007. The Management is responsible for preparing and presenting this interim concise financial information, in accordance with the International Financial Reporting Standards, as such have been adopted by the European Union, and are applied for Interim Financial Reporting (International Accounting Standard (IAS) 34). Our own responsibility is to express a conclusion about this interim concise financial information based on our review. Scope of review We conducted our review in accordance with International Standard of 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 enquiries, 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 Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of alll 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 consolidated interim concise financial information is not prepared, in all material respects, in accordance with International Accounting Standard 34. Report on other Legal and Regulatory matters Our review has not identified any inconsistency or discrepancy in the remaining details of the semiannual financial report provided for by article 5, Law 3556/2007, with the attached interim concise financial information. Paleo Faliro, August 31, 2015 The Certified Auditor Accountant Dimitris Ntzanatos SOEL Reg no. 11521 8
Semiannual Financial Report for period 1/1 30/6/2015 D. Semiannual Financial Statements The attached interim financial statements were approved by the Board of Directors for ''CRETA FARM C..I.S.A." on 28.08.15 and made public by posting them on the Internet at www.cretafarm.gr and the website of Athens Stock Exchange, where they will remain available to investors for at least five (5) years from the date of drafting and publication thereof. It is noted that the concise financial details and information published in Press, which result from the interim financial statements, aim to provide the reader with a general update on the financial standing and results of the issuing entity, but do not offer a complete view on the financial position, financial performances and cash flows of the and, as provided for by the International Financial Reporting Standards. The President & Managing Director The VicePresident & Managing Director Emmanuel Domazakis ID No.: Ι 975738 / 74 Konstantinos Domazakis ID No.: ΑΒ 187558 / 06 The Chief Financial Officer The Financial Controller The Head Of Accounting Ioannis Papadopoulos ID No.: Ξ 331005 / 86 Dimitris Felekis ID No.: ΑΚ 143763/12 Evangelos Tsakiris ID no.: Σ 728648/00 OEE License Reg. no.: 0001235 Accountant, 1 st Class 9
Semiannual Financial Report for period 1/1 30/6/2015 1. Financial Statements 1.1. Concise Statement of Financial Position Amounts in th. of ASSETS Tangible assets Intangible assets Noncurrent assets held for sale Live assets Goodwill Investments in affiliates Other investments Other longterm receivables Stock Customers and other commercial receivables Other receivables Cash available and cash equivalents TOTAL ASSETS Notes 30.06.2015 31.12.2014 30.06.2015 31.12.2014 4.2 91,773 92,239 82,567 82,749 4.3 5,742 5,909 3,900 4,109 7,675 7,675 4.5.1 5,363 3,985 5,362 3,984 9,947 9,947 4.8.2 85 964 85 882 23,050 85 174 23,050 85 174 4.5.2 7,914 8,713 7,500 8,297 4.5.3 17,485 12,421 19,969 14,935 4.5.3 12,438 13,947 37,273 36,188 1,030 1,253 927 1,171 160,416 157,058 180,807 174,741 EQUITY AND LIABILITIES EQUITY Share capital Share premium Reserves Results carried forward Shareholders Equity Noncontrolling interests Total equity Retained tax liabilities Provisions Other longterm liabilities Longterm bank loans Longterm liabilities Suppliers and relevant liabilities Other liabilities Shortterm loans Shortterm liabilities Total payables TOTAL EQUITY AND LIABILITIES 12,382 12,382 12,382 12,382 1,753 1,753 1,753 1,753 52,143 53,076 46,323 46,323 (46,740) (45,721) (16,064) (16,071) 19,537 21,489 44,393 44,386 (3,039) (2,643) 16,498 18,846 44,393 44,386 5,985 6,216 3,917 4,101 4.5.4 2,481 2,081 2,471 2,071 0 0 0 0 4.5.5 58,425 54,849 54,143 54,781 66,892 63,146 60,531 60,952 4.5.6 20,941 20,156 22,495 21,711 4.5.6 10,645 8,738 9,893 7,966 4.5.5 45,441 46,171 43,495 39,726 77,027 75,066 75,883 69,403 143,919 138,212 136,413 130,356 160,416 157,058 180,807 174,741 10
Semiannual Financial Report for period 1/1 30/6/2015 1.2. Concise Statement of Comprehensive Income for the period 1.1 30.06.15 Amounts in th. of Statement of comprehensive income Sales (nonlive assets) Sales (live assets) Total sales Cost of sales Gross profit (of nonlive assets) Effect of including live assets at fair value Development costs for live assets Gross results Notes 01.01 30.06.2015 01.01 30.06.2014 01.01 30.06.2015 01.01 30.06.2014 47,323 45,706 47,100 45,640 4.5.1 3,079 2,201 3,088 2,201 4.5.7 50,402 47,907 50,188 47,841 (27,067) (24,556) (26,859) (24,297) 20,256 21,151 20,241 21,343 4.5.1 1,276 996 1,276 996 4.5.1 (4,211) (3,501) (4,211) (3,501) 20,400 20,846 20,394 21,039 Administrative expenses Distribution expenses Other incomes (expenses) Earnings before interest, taxes, depreciation, investments and impairments 4.5.8 (2,581) (2,618) (2,474) (2,297) 4.5.8 (15,582) (14,038) (15,128) (13,589) 622 444 571 (56) 5,264 7,110 5,365 7,060 Joint Ventures return rate Financial incomes / (expenses) (132) (115) (3,950) (4,262) (3,235) (3,641) Profits / (Losses) before tax Taxes Profits / (Losses) after tax (1,223) (88) (1,311) 256 129 1,457 641 (121) 543 897 7 2,000 Attributable to: Parent company owners Noncontrolling interests (1,148) (163) 1,042 7 2,000 (144) Profits / (losses) after shares per share (in ) 4.4 (0.0389) 0.0353 0.0002 0.0678 Amounts in th. of Statement of other comprehensive income Profits / (Losses) after tax Notes 01.01 30.06.2015 (1,311) Revaluation of tangible assets Actuarial result Exchange differences on translation of foreign exploitation (1,167) 01.01 30.06.2014 01.01 30.06.2015 01.01 30.06.2014 897 7 2,000 (108) TOTAL COMPREHENSIVE INCOME (2,478) 789 7 2,000 Attributable to: Parent company owners Noncontrolling interests (2,081) (396) 955 7 2,000 (166) 11
Semiannual Financial Report for period 1/1 30/6/2015 1.3. Concise Statement of Comprehensive Income for the period 1/4 30.06.15 Amounts in th. of Statement of comprehensive income Sales (nonlive assets) Sales (live assets) Total sales Cost of sales Gross profit (of nonlive assets) Effect of including live assets at fair value Development costs for live assets Gross results 01.04 30.06.2015 01.04 30.06.2014 01.04 30.06.2015 01.04 30.06.2014 24,791 26,073 24,644 26,075 1,734 1,255 1,739 1,255 26,526 27,327 26,384 27,329 (14,057) (12,990) (13,931) (12,931) 10,735 13,082 10,713 13,144 880 391 885 390 (2,341) (1,850) (2,341) (1,850) 11,008 12,878 10,997 12,939 Administrative expenses Distribution expenses Other incomes (expenses) Earnings before interest, taxes, depreciation, investments and impairments (1,361) (1,393) (1,350) (1,270) (8,620) (8,474) (8,340) (8,177) 658 1,003 607 504 2,891 5,256 2,918 4,983 Joint Ventures return rate Financial incomes / (expenses) Profits / (Losses) before tax Taxes Profits / (Losses) after tax (40) (59) (1,987) (1,919) (1,625) (1,627) (342) 2,036 289 2,368 (279) 887 (283) 861 (621) 2,923 6 3,229 Attributable to: Parent company owners Noncontrolling interests (539) 2,994 6 3,229 (82) (72) Profits / (losses) after shares per share (in ) (0.0183) 0.1016 0.0002 0.1095 Amounts in th. of Statement of other comprehensive income Profits / (Losses) after tax Revaluation of tangible assets Actuarial result Exchange differences on translation of foreign 01.04 30.06.2015 01.04 30.06.2014 n exploitation 614 (10 01.04 30.06.2015 01.04 30.06.2014 (621) 2,923 6 3,229 (108) TOTAL COMPREHENSIVE INCOME (7) 2,815 6 3,229 Attributable to: Parent company owners Noncontrolling interests (48) 2,908 6 3,229 41 (93) 12
Semiannual Financial Report for period 1/1 30/6/2015 1.4. Concise Statement of Changes in Equity Amounts in th. of Balance on 01.01.14 Profits / (Losses) after tax 1/1 30.06.14 Other comprehensive income of period 1.1 30.06.14 (87) Increase of share capital Transfer of reserves Rate of Joint Ventures in equity Balance on 30.06.14 Share Capital Share premium Reserves Results carried forward 12,382 1,753 50,736 (47,319) 1,042 (6,760) 912 119 12,382 1,753 43,889 (45,246) Shareholder equity Noncontrolling interests Total 17,551 (2,040) 15,512 1,042 (144) 897 (87) (22) (108) (5,848) (5,848) 119 119 12,778 (2,206) 10,572 Balance on 01.01.15 12,382 1,753 53,076 (45,721) Profits / (Losses) after tax 1/1 30.06.15 (1,148) Other comprehensive income of period 1.1 30.06.15 (933) Rate of Joint Ventures in equity Balance on 30.06.15 12,382 1,753 52,143 132 (46,738) 21,489 (2,645) 18,844 (1,148) (163) (1,311) (933) (233) (1,167) 132 132 19,539 (3,041) 16,498 Amounts in th. of Balance on 01.01.14 Profits / (Losses) after tax 1/1 30.06.14 Transfer of reserves Balance on 30.06.14 Share Capital Share premium Reserves 12,382 1,753 41,287 (17,838) 37,583 Results carried forward Total 2,000 2,000 (6,709) 912 (5,796) 12,382 1,753 34,578 (14,925) 33,787 Balance on 01.01.15 Profits / (Losses) after tax 1/1 30.06.15 Other comprehensive income of period 1.1 30.06.15 Balance on 30.06.15 12,382 1,753 46,3233 (16,071) 44,386 7 7 12,382 1,753 46,3233 (16,064) 44,393 13
Semiannual Financial Report for period 1/1 30/6/2015 1.5. Concise Statement of Cash Flows Amounts in th. of Operating activities Profits before tax (going concern) Profits before tax (discontinued activities) Plus / (minus) noncash adjustments: Depreciations impairment of assets Provisions Translation differences Results of investments Interest and related expenses Plus / (minus) adjustments for working capital: Decrease (increase) of inventories Decrease / (increase) of receivables (Decrease) / increase of liabilities (excluding ba Minus: Debit Interest and related expenses paid Income tax paid Operating cash flows from discontinued activitie Total inflows / (outflows) from operating activit Investments Acquisition of investments Collection from disinvestments Cash advances and loans to third parties Purchase of tangible and intangible fixed assets Proceeds from sales of tangible and intangible f Interest received Dividends received Proceeds from grants to fixed assets Investment cash flows from discontinued opera Total inflows / (outflows) from investments (b) Financial activities Proceeds from increase in share capital Payments for share capital reduction Cash advances and loans from third parties Collections from loans Loan repayments Repayments from leases Dividends paid Financial cash flows from discontinued activities 01.01 30.06.2015 01.01 30.06.2014 (1,223) 256 2,405 2,476 371 302 (1,514) 414 109 125 3,972 4,266 (573) (1,657) (4,465) (8,917) anks) 3,654 2,766 (4,993) (3,575) (319) es ties (a) (2,575) (3,544) 20 s (1,005) (7,101) fixed assets 16 7,108 ations (989) 26 3,594 6,446 (121) (3,542) (136) s Total inflows / (outflows) from financing activities (c) 3,337 2,904 Total cash flow (a) + (b) + (c) (226) (614) 01.01 30.06.2015 01.01 30.06.2014 129 1,457 2,002 1,962 371 302 (1,514) 414 (555) 56 3,789 4,082 (581) (1,750) (4,769) (9,665) 3,574 3,766 (4,741) (3,572) (306) (2,601) (2,950) (832) 144 20 (1,005) (7,090) 6,902 (861) (1,000) 3,475 6,446 (121) (3,204) (136) 3,218 3,242 (244) (708) Cash and cash equivalents at beginning of period 1,253 2,478 Effect of exchange rates 4 1 Cash and cash equivalents at end of period 1,030 1,865 1,171 2,404 927 1,696 14
Semiannual Financial Report for period 1/1 30/6/2015 2. General background 2.1. Information about the and the These financial statements refer to the, where the parent company is called: "CRETA FARM C.I.S.A... "CRETA FARM CISA" (Industrial & Commercial S.A.) is legally a Limited Liability (Societe Anonyme), established in Greece (Rethymnon) in October 1979 and its headquarters is located in the municipality of Arkadi, Rethymnon, 15 th Km National Road Rethymnonn Heraklion (P.C. 74100, site Latzimas). The company's shares are traded on the Athens Stock Exchange from April 3, 2000. The company's shares are traded in the ''Mid and Small Capitalization'' category. It belongs to the classs "Foods and Beverages Foods". Details of the activities undertaken by the are: Importation, production, breeding, fattening, forwarding, exportation, distribution, exploitation and marketing of animals of domestic or foreign origin, as well as the operation and exploitation of slaughterhouses. Importation, representation, production, processing, breeding, processing, standardising, packaging, forwarding, freezing, storing, exporting, distributing, exploitation and marketing of fresh, chilled and frozen meat, related articles, products, or byproducts thereof, and other related thirdparty production. Importation, representation, production, processing, breeding, processing, standardising, packaging, forwarding, freezing, storing, exporting, transporting, exploitation and marketing of fish, fish catch, and marine organisms of any type, fries of marine organizations of any type, of similar articles, products and byproducts, and other related thirdparty production. Importing, representation, production, processing, breeding, processing, standardization, packaging, forwarding, freezing, storing, exporting, transporting, exploitation and marketing of olive oil and oils, coffee and beverages, wine, wine products, raki, tsikoudia, rakomelo, ouzo, tsipouro, beverages and soft drinks of any kind, alcoholic or not, of similar types, products and byproducts of them, and other related thirdparty production. Importing, representation, production, processing, breeding, processing, standardising, packaging, forwarding, freezing, storing, exporting, transporting, exploitation and marketing of animal food, fish food, specialized food, and all kinds of agricultural products, organic environmentally friendly products / cultivation methods, frozen or nonfrozen food, bakery goods, pastry products, sweets and confectionary products, all kinds of agricultural, breeding, fishing and farming products, including all food in general, as well as the pertinent raw materials and all kinds of consumer goods. Construction, operation, and management of facilities and waste processing plant, plants producing organic fertilizers, waste composting, neutralization, treatment, disposal and wastes management (solid and liquid) of the 's facilities and plants, as well as the exploitation, transportation, trading and provision of pertinent services with regards to any kinds of products and by production of electrical power products, resulting from the operation and management of the above facilities and plants, including the for ownuse or sale. Undertaking and manufacture of any kinds of technical projects for the private segment (indicatively: buildings, repairs, etc.). Activation in the field of restaurant and alimentation product field, as well as importing, representation, forwarding, storage, exportation, distribution, exploitation and marketing of all kinds of items and products necessary for the operation and exploitation of dining and feeding areas (health concernn facilities). Research, development, monitoring, improvement, forwarding, concession, provision of relevant consulting services and training, and marketing of modern and/or innovative methods and expertise on cultivation, fattening, production, processing, packaging, refrigeration, forwarding, exploitation, management and trading of every object within the context of its purpose. The duration of the company, under it statute, expires in 2029. Based on applicable legislation, indefinitee duration for a company is not allowed; however, it can be extended after a decision taken by the shareholder General Assembly, following statutory quorum and plurality voting. 2.2. General information about the Financial Statements The financial statements are the Concise Consolidated Financial Statements for the and the Concise Separate Financial Statements for the parent company CRETA FARM C.IS.A... The financial statements refer to the period from 01.01.15 until 30.06.15. The comparative data refer to period 1.1 30.6.2014 for the data of the statement of comprehensive income, the cash flow statement and the changes in equity and on 31.12.2014 for the data of the statement of financial position. The amounts shown are shown in thousands of, unless stated otherwise. Any differences are due to rounding. Every IFRS issued by the International Accounting Standards Board and adopted by the European Union, in force during the reporting period has been implemented in full. The financial statements have been prepared on the basis of going concern. The administration assesses that there is no evidence of challenging the applicability of this principle. The management has concluded that the financial statements present fairly the financial position, the financial performance and the cash flow of the company and the group. The financial statements were approved by the Board of Directors on August 28, 2015. 15
Semiannual Financial Report for period 1/1 30/6/2015 2.3. Basis for preparing the interim financial statements The interim concise financial statements of the period have been prepared in accordance with International Accounting Standards 34 Interim financial Reporting. They do not include all the information required for the annual financial statements in accordance with the International Financial Reporting Standards and they should be reviewed along with the annual financial statements of the and the with regards to the period that endedd on December 31, 2014. The interim concise financial statements have been prepared based on the accounting principles adopted by the in the recent annual financial statements for the period ending on December 31, 2014. 2.3.1. Estimates The preparation of the financial statements in accordance with the International Financial Reporting Standards (IFRS) requires from management the formulation of opinions, evaluations and assumptions that affect the published financial details on the date the interim financial statements are prepared. The actual results may be different from those anticipated. The assessments and opinions are based on past experience and other factors, including expectations for future events that are considered logical under the conditions at hand, while they are constantly reevaluated by using all available information. 2.3.2. New Standards and Interpretations The following amendments to and Interpretations of the IFRS have been issued by the International Accounting Standards Board (IASB) have been adopted by the European Union and the application thereof is compulsory from 01.01.15. IFRIC 21 Levies (this applies to annual periods starting on or after 17.06.2014) In May 2013, the IASB issued IFRIC 21. This Interpretation clarifies when a company must recognize the obligation to pay a levy imposed by the state in its Financial Statements. IFRIC 21 is an interpretation of IAS 37 Provisions, Contingent Liabilities and Contingent Assets. IAS 37 sets the criteria for recognizing an obligation, one of which is the current commitment resulting from a past event, known as a binding event. The interpretation states that the binding event creating the obligation for the payment of the levy is the action described in the relevant law, which results to the payment of the contribution. This interpretation does not affect the consolidated financial statements. Annual Standard Improvements, 20112013 Cycle (for annual periods starting on or after 01.01..15) IASB proceeded in December 2013 to the issuing of Annual Improvements to the International Financial Reporting Standards, 2011 2013 cycle, which consists of a series of adjustments to 4 Standards and is a part of the programme for the annual improvements to Standards. The issues included in this cycle are the following: IFRS 1: Meaning of effective IFRSs, IFRS 3: Scope exceptions for joint ventures, IFRS 13: Scope of paragraph 52 (portfolio exception), and IAS 40: Clarifying the interrelationship of IFRS 3 Business Combinations and IAS 40 Investment Property when classifying property s investment property or owneroccupied property. Thesee amendments do not affect the consolidated Financial Statements. 2.3.3. Changes in accounting principles and quantitative effects During the adoption of IFRS 11 "Joint Arrangements" the investments in joint ventures were consolidated in accordance with the method of net position and not through proportional consolidation. In order to maintain the comparability of the financial data presented, the comparable period was adjusted (1.130.6.2014) with regard to the statement of comprehensive income and the statement of cash flows. The changes refer to the figures. The figures of the comparable disclosures have been amended to disclose such change. The following statements include the changes in the data initially published. Amounts in th. of Results of Operations Sales (nonlive assets) Sales (live assets) Total sales Cost of sales Gross profit (of nonlive assets) Effect of including live assets at fair value Development costs for live assets Gross results 1.1 30.06.14 Revised 1.1 30.6.2014 Initial Change 45,706 2,201 47,907 46,182 2,201 48,382 (476) (476) (24,556) (24,924) 368 21,151 21,258 (107) 996 996 (3,501) (3,501) 20,846 20,954 (107) Administrative expenses Distribution expenses Other incomes (expenses) (2,618) (2,680) 62 (14,038) (14,199) 160 444 444 Earnings before interest, taxes, depreciation, investments and impairments 7,110 6,997 113 16
Semiannual Financial Report for period 1/1 30/6/2015 Investment results / Value impairments Joint Ventures return rate Financial incomes / (expenses) (115) (115) (4,262) (4,262) Profits / (Losses) before tax Taxes Profits / (Losses) after tax 256 641 897 256 641 897 Attributable to: Parent company owners Noncontrolling interests 1,042 (144) 1,042 (144) Profits / (losses) after shares per share (in ) 0.0353 0.0353 Amounts in th. of Statement of other comprehensive income Profits / (Losses) after tax 1/1 30.06.14 Revised Revaluation of tangible assets Actuarial result Exchange differences on translation of foreign exploitation (108) 897 1/1 30/6/2014 Initial Change 897 (108) TOTAL COMPREHENSIVE INCOME 789 789 Attributable to: Parent company owners Noncontrolling interests 955 (166) 955 (166) Amounts in th. of Operating activities Profits before tax (going concern) Profits before tax (discontinued activities) Plus / (minus) noncash adjustments: Depreciations impairment of assets Provisions Translation differences Results of investments Interest and related expenses Plus / (minus) adjustments for working capital: Decrease (increase) of inventories Decrease / (increase) of receivables (Decrease) / increase of liabilities (excluding b Minus: Debit Interest and related expenses paid Income tax paid Operating cash flows from discontinued activi Total inflows / (outflows) from operating activ Investments Acquisition of investments Collection from disinvestments Cash advances and loans to third parties Purchase of tangible and intangible fixed asse Proceeds from sales of tangible and intangible Interest received Dividends received Proceeds from grants to fixed assets Investment cash flows from discontinued ope Total inflows / (outflows) from investments (b Financial activities Proceeds from increase in share capital Payments for share capital reduction Collections from loans 1/1 30.06.14 Revised 256 2,476 302 414 125 4,266 1/1 30/6/2014 Initial (1,657) (1,676) 19 (8,917) (9,082) 165 banks) 2,766 3,015 (250) (3,575) (3,575) ities vities (a) (3,544) (3,591) 47 20 ets (7,101) ( e fixed assets 7,108 erations b) 26 6,446 Change 256 0 2,478 (3) 302 414 10 115 4,266 18 2 (7,106) 5 7,108 (1) 20 6 6,446 17
Semiannual Financial Report for period 1/1 30/6/2015 Cash advances and loans from third parties Loan repayments Repayments from leases Dividends paid Financial cash flows from discontinued activiti (3,542) (3,542) ies Total inflows / (outflows) from financing activities (c) 2,904 Total cash flow (a) + (b) + (c) (614) 2,904 (667) 53 Cash and cash equivalents at beginning of period 2,478 Effect of exchange rates 1 Cash and cash equivalents at end of period 1,865 2,532 (54) 1 1,866 (1) 18
Semiannual Financial Report for period 1/1 30/6/2015 3. Significant events during the reporting period 3.1. Period results During the 1 st semester of 2015, the market of prepared meat has been recovering with a rise of 4.1%. The company continues gaining a market share in the supermarkets which amounted to 25.5% in June 2015, further bolstering its leading position. The growth was spearheaded by "EN ELLADI" line of products, thanks to consistent support with advertising and promotional actions. True to the spirit of innovation, the company presented a new line of products, with most important the "EN ELLADI fried chicken". sales reached 50.4 MM, showing 5.2% increase in comparison with the 1 st semester of 2014. The respective figures for the parent company reached 50.1 MM during 2015 and 47.8 MM during the respective period of 2014, i.e. increased by 5%, a fact that considering the negative financial situation proves the faith of consumers placed on company products. The 's EBITDA reached 5.26 MM vs. 7.1 MM in 2014. The respective company figures reached 5.36 MM for 1/130/6/2015 period vs. 7.0 MM for the respective period of 2014. The financial expenses of the period are reduced in relation to the comparable period of 2014, as a result of the restructuring of the loans achieved during the 2 nd sixmonth period of 2014. 3.2. Extraordinary General Assembly On February 27, 2015, the shareholder Extraordinary General Assembly was realized, where the following resolutions were issued: It was approved to grant authorisations to the company Board of Directors in order to negotiate and decide about the specific terms, the attribution method, the introduction or not for negotiation in the stock market, and generally take all necessary steps in order to complete the issuing and cover of the company shareconvertible bond loans issued, amounting to 20 MM. It was approved to grant authorisations to the company Board of Directors in order to negotiate and decide about the specific terms, the attribution method, the introduction or not for negotiation in the stock market, and generally take all necessary steps in order to complete the issuing and cover of the issued common bond loans, amounting to 20 MM. 3.3. Decisions issued by the Ordinary Shareholder General Assembly On June 15, 2015, the annual ordinary shareholder general assembly took place. In summary: The Annual Consolidated and Separate Financial Statements were approved. The option not to pay any dividend from the results of 2014 fiscal period was approved. The discharge of the members of the Board of Directors and of the Certified Auditor Accountant from all liabilities for the operations during the 2014 fiscal year was approved. The election of an auditing firm was approved in order to conduct the ordinary audit of the annual financial statements for the period of 2015 and audit the company s tax compliance for the period of 2015. The fees of the Board members for the year of 2015 were preapproved. The provision of permission was approved for the signing of agreements between the company and related parties. The permission to the members of the 's Board of Directors and to its Managers to participate in Board of Directors or in the management of companies belonging to the was approved. The transactions of the company with the related parties were approved. 3.4. Taking out of a new syndicated loan In the current period, the systemically important banks approved a new syndicated loan for 4.0 MM. On August 21, 2015, the agreement was signed, while it is expected within September to disburse a balance of 1.0 MM, since 3.0 MM weree disbursed in the form of bridge financing within June, 2015. 3.5. transformations The Board of Directors of the company as well respectively, decided the following: 1. They approved the commencement of merger procedures through the absorption of affiliate company "TETOFARMA S.A." by parent company "CRETA FARM C.I.S.A.", as provided by the clauses of article 78 of cod. law 2190/1920 and the clauses of artricles 1 5 of law 2166/1993. 2. They scheduled March 31, 2015 as the transformation date, on which the transformation balance sheets provided by the law for the companies merged shall be issued. 3. They elected an independent auditing firm the relevant accounting reports. fiscal year of 2014 were approved and the fees of the members of the Board for the fiscal as the Board of affiliate "TETOFARMA S.A.", during their meetings of March 30 and 31, 2015 to audit the transformation balance sheet of the merged companies and the preparation of 19