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Inform P. Lykos Holdings S.A.

Interim / Quarterly Report Sep 29, 2017

2772_ir_2017-09-29_369e489b-7cf1-469d-b0fa-dad766b4bb61.pdf

Interim / Quarterly Report

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SEMI-ANNUAL FINANCIAL REPORT for the period from January 1st to June 30th 2017

According to article 5, Law 3556/2007

A) STATEMENTS BY THE REPRESENTATIVES OF THE BOARD OF DIRECTORS 3
B) SIX MONTH REPORT OF THE BOARD OF DIRECTORS 4
C) REVIEW REPORT ON INTERIM FINANCIAL INFORMATION 8
D) SIX-MONTH CONDENSED FINANCIAL STATEMENTS 9
Consolidated Statement of Financial Position 10
Company's Statement of Financial Position 11
Consolidated Income Statement 12
Company's Income Statement 13
Consolidated Statement of Comprehensive Income 14
Company's Statement of Comprehensive Income 15
Consolidated Statement of Changes in Equity 16
Company's Statement of Changes in Equity 17
Consolidated Statement of Cash Flows 18
Company's statement of Cash Flows 19
Notes to the Financial Statements 20

A)STATEMENTS BY THE REPRESENTATIVES OF THE BOARD OF DIRECTORS

The members of the Board of Directors:

1) Panagiotis Lykos, Chairman of the Board of Directors

2) Panagiotis Spyropoulos, Vice Chairman & Group CEO

3) Ilias Karantzalis, Member of the Board of Directors

in the above capacity, especially assigned by the Board of Directors of the Société Anonyme under the title «INFORM P. LYKOS S.A.», declare and certify that to the best of our knowledge:

(a) The six-month, separate and consolidated, financial statements of «INFORM P. LYKOS S.A.» for the period 1/1/2017-30/06/2017, which were prepared according to the effective accounting standards, present truly and fairly the assets and liabilities, the equity and the financial results of the Company as well as of the consolidated companies as a total, according to par. 3 - 5 of article 5 of L. 3556/2007 and the authorizing decisions of the BoD of the Stock Market Committee.

(b) The six-month management report of the Board of Directors presents in a true and fair way the information required according to par. 6 of article 5 of L. 3556/2007 and authorizing decisions of the BoD of the Stock Market Committee.

Koropi Attica, 28 September 2017

The designees

Chairman of the Board of Directors Vice Chairman & Group CEO Member of the Board of Directors

Panagiotis Lykos Panagiotis Spyropoulos Ilias Karantzalis I.D. no. AB 607588 I.D. No AΙ 579288 I.D. No K 358862

B)SIX MONTH REPORT OF THE BOARD OF DIRECTORS

(a) Performance and financial position of the Group

INFORM Group maintained sales and operating profitability (EBITDA) in the first semester of 2017 at the same level as at the first semester of 2016. At the same time, it maintained its gross profit margin despite high competition, due to the contribution of its previous year's investments, which resulted in the addition of new billing service contracts as well as the offer of new innovative services higher value added (Dynamic Statements, Cloud Printing), offsetting the price pressure on traditional products.

More specifically, during the first semester of 2017, Group sales showed a marginal decrease of -0.4% and reached € 31.8 million compared to € 31.9 million in the corresponding semester of 2016, despite the price pressure on traditional products, which was offset by increased sales of services in the banking sector, the supply to the market of new innovative value-added services and the addition of new billing services contracts.

At the same time, the operating expenses excluding the depreciations of the first semester of 2017 decreased by 3% compared to the corresponding last year's semester due to the efficiency improvement program applied to the Group companies in recent years.

30/6/2017 30/6/2016 Δ 17-16 % Δ 17-16
Revenue 31.837.231 31.953.526 (116.296) -0,4%
Cost of materials (21.043.047) (20.776.261) (266.786) 1,3%
Gross profit I 10.794.183 11.177.265 (383.082) -3,4%
Gross margin Ι 33,9% 35,0%
Cost of production (6.324.943) (6.650.871) 325.929 -4,9%
Gross profit ΙΙ 4.469.240 4.526.394 (57.154) -1,3%
Gross margin ΙΙ 14,0% 14,2%
Other income 670.493 623.259 47.234 7,6%
Selling and distribution expenses (2.080.672) (2.009.010) (71.662) 3,6%
Administrative expenses (1.646.350) (1.561.885) (84.465) 5,4%
Research and development expenses (210.875) (179.223) (31.652) 17,7%
Other expenses (325.047) (273.527) (51.519) 18,8%
+ Depreciation 1.942.986 1.835.723 107.263 5,8%
EBITDA 2.819.777 2.961.731 (141.954) -4,8%
- Depreciation (1.942.986) (1.835.723) (107.263) 5,8%
Operating profits / (losses) 876.791 1.126.009 (249.217) -22,1%
Financial income 17.061 977 16.084 1645,6%
Financial expenses (631.141) (604.926) (26.215) 4,3%
Net finance costs (614.080) (603.949) (10.131) 1,7%
Profits / (losses) before taxes 262.712 522.060 (259.348) -49,7%
Income tax expense (176.298) (177.877) 1.579 -0,9%
Profits / (losses) after taxes 86.414 344.183 (257.769) -74,9%
OPERATING EXPENSES (EXCLUDING
DEPRECIATION)
30/6/2017 30/6/2016 Δ 17-16 % Δ 17-16
Cost of production (6.324.943) (6.650.871) 325.929 -4,9%
Selling and distribution expenses (2.080.672) (2.009.010) (71.662) 3,6%
Administrative expenses (1.646.350) (1.561.885) (84.465) 5,4%
Research and development expenses (210.875) (179.223) (31.652) 17,7%
+ Depreciation 1.942.986 1.835.723 107.263 5,8%
TOTAL (8.319.853) (8.565.266) 245.413 -2,9%
% OPERATING EXPENSES TO SALES 26,1% 26,8%

As a result of the above, the key profitability figures of INFORM Group were, as follows:

  • The earnings before interest, taxes, depreciation and amortization (EBITDA) of the Group, were marginally lower by € 0.1 million or -4,8% and reached € 2.8 million compared to € 2.9 million in the corresponding semester of 2016,
  • The earnings before interest and taxes (EBIT) of the Group, decreased by € 0.2 million or -22,1% and reached € 0.9 million compared to € 1.1 million in the corresponding semester of 2016, as a result of the higher depreciations due to the new investments implemented by the Group in the previous year,

  • The earnings before taxes (EBT) of the Group, reached € 263 thousand compared to € 522 thousand in the corresponding semester of 2016,

  • As a result of the above, the consolidated earnings after taxes (EAT) of the Group, reached € 86 thousand compared to € 344 thousand in the corresponding semester of 2016.

The consolidated operating cash flow in the first semester of 2017, strengthened to € 1.5 million compared to negative € -0.2 million in the corresponding semester of 2016. The net bank debt of the Group reached € 17.1 million in the first semester of 2017, marginally increased from € 16.7 million in the corresponding semester of 2016.

According to the above, the financial performance ratios of the Group were in the first semester 2017 compared to first semester 2016 as follows:

  • The margin of earnings before interest, taxes, depreciation and amortization amounted to 8.9% from 9.3%, lower by 0.4 basis points,
  • The margin of earnings before interest and taxes amounted to 2.8% from 3.5%, lower by 0.8 basis points,
  • The margin of earnings before taxes amounted to 0.8% from 1.6%, lower by 0.8 basis points,
  • The performance ratio of equity amounted to 0.2% from 0.7%, lower by 0.5 basis points,
  • The performance ratio of assets amounted to 0.1% from 0.4%, lower by 0.3 basis points,
  • The ratio of total liabilities to equity amounted to 0.7 at the same level with the first semester of 2016,
  • The ratio of bank debt to equity amounted to 0.4 from 0.3, higher by 0.1 basis points,
  • The ratio of liquidity amounted to 0.84 at the same level with the first semester of 2016.

(b) Significant events after the end of the reporting period

No other event occurred subsequent to the 30/06/2017 which may have a significant impact on the financial position and operations of the Group.

(c) Main risks and uncertainties for the second six-month period of FY 2017

The Group uses financial instruments for trading, financial and investment purposes. The use of financial instruments by the Group materially affects the financial position, profitability and cash flows.

The main risks arising from the financial instruments held by the Group are mainly the following:

  • Market risk (currency risk and interest rate risk)
  • Credit risk
  • Liquidity risk

Market risk

In relation to the risk arising from general market conditions, the Group has reduced exposure to this risk, due to the geographical dispersion with equal distribution of sales between Greece, Romania and Other Countries with major exposure to the markets of Central and Eastern Europe. A significant part of these sales is directed to the financial sector and mainly banking. The continuing negative economic conditions make the markets, in which we operate more vulnerable. However, the products we offer to our customers in both private and public sector are considered essential for their daily operation and growth. Furthermore, by achieving significant reductions in its operating expenses, the Group is particularly competitive and can offer high-level products and services at competitive prices.

Regarding the risks arising from the volatility of interest rates and exchange rates:

Exchange rate risk

The main part of economic transactions of the Group companies (Greece, Romania, Albania) is dominated in the currency of the main economic environment, where each company operates (in operation currency). In Romania, part of the obligations of the company is denominated in RON and in Albania is denominated in ALL.

An exposure to exchange rate fluctuations exists regarding the value of the Group's investments in Romania, only at the time of consolidation of financial statements and their translation from the functional currency RON into the presentation currency Euro.

Interest rate risk

All bank debt of the Group is connected with fluctuating interest rates, maintaining however, the option to convert into stable interest rates, depending on the market conditions.

The company does not use financial derivatives. As in the previous year, other financial assets and other financial liabilities are not affected significantly by interest rates.

Credit risk

The Group has established and applies procedures of credit control, aiming at minimization of bad debt. Sales are directed mainly in big public and private organizations with evaluated historic credit abilities. In case indications of bad debts appear, the relative impairment provisions are made.

Liquidity risk

The Group manages its liquidity needs by careful follow-up of debts, long-term financing obligations and payments. Liquidity needs are monitoring on a daily basis and planning of payments - on weekly and monthly basis. Special attention is paid to management of inventories, receivables and liabilities in order to achieve the highest possible cash liquidity for the Group.

The central financial department of the company, responsible for risk management, operates following certain rules approved by the Board of Directors.

The Board of Directors through appointee members:

(a) Establishes and implements procedures and arrangements that allow the identification of risks which are associated with the activities, procedures and the Company's operating systems (notably credit risk, market risk and operational risk).

(b) Determines the acceptable level of risk.

(c) Ensures that the Group has the required capital adequacy and overall risk management arising from its operation.

(d) Estimates for development of activities in the second half of 2017

The Group having extensive experience and know-how in integrated solutions-services has developed long term customer relationships, offering high level products and services at competitive prices, so as to be considered a strategic supplier of banking institutions, telecommunications and other organizations either in the private sector or in the public sector.

Group's main objective focus on creating further value added to its customers and shareholders into the following fields:

New markets and new customers

It will continue to focus on the development of exports, to further increase revenues and also will focus at exploring and evaluating new growth opportunities at the sector of secure documents management and information,

New products and services

It will accelerate the development of new services with the transition of the current products to higher value-added services such as estatements, e-invoicing, scanning and archiving, hybrid mail, cloud printing.

Efficiency Improvement

It will further utilize low-cost facilities in order to further increase the competitiveness and profitability. It will continue to improve its efficiency and will continue to invest in new technologies that will increase production capacity and reduce costs, in order to enhance profitability.

Potential strategic co-operation opportunities It will continue to search potential opportunities for strategic partnerships, aiming at a further strengthening of its position in the broader region of Central and Eastern Europe.

The Group achieved to launch in the market new, innovative, higher value-added services (Dynamic Statements, Cloud Printing) in the first half of 2017. The contribution of the new, innovative, higher value-added products and services is expected to accelerate in the second half of the year, as some of the new contracts started gradually in the first half of the year, while some others will be activated during the second half of 2017.

(e) Personnel

The measures to reduce costs, improve efficiency and adjusting production capacities to current market conditions represent large challenges for INFORM Group. The successful operating growth has only been possible thanks to the strong contribution of each employee.

Our employee's knowledge, capacity for innovation and high motivation are preconditions for the success of INFORM team. Therefore, the Group aims to promote team spirit and motivation, with emphasizing in internal education and maintain and improve the internal cooperation.

In total the Group's headcount remained stable at 405 employees as at 30/06/2017 from 409 as at 30/06/2016.

(f) Environmental Management

The Group prevents pollution caused by all segments during production as far as possible by means of an effective environmental management system. This management system is based on statutory provisions and requirements, with ISO 14001 (Enviromental Management) and FSC (Forest Stewardship Council). The managers of the respective production and business premises are responsible for compyling with these provisions. Furthermore, there are clear regulations governing the responsibilities for environmental protection issues.

(g) Significant intercompany transactions

The commercial transactions between the company and its related parties within the first six-month period of 2017, were conducted on usual market terms, and did not sufficiently differ from the respective transactions conducted in the previous years and therefore, they do not materially affect the financial position and performance of the parent within the first six-month period of the current year.

Amounts in thousand Euro 30/6/2017

Parent Company - from/to subsidiaries Sales of products or
services
Purchases of
products or
services
Receivables Liabilities
Lykos Paperless Solutions A.E. 30 0 0 109
Inform Lykos S.A. (Romania) 260 1.354 1 109
Albanian Digital Printing Solutions Sh.p.k. 60 0 60 0
Total 350 1.354 61 218

The following shall be mentioned regarding the above:

The sales of the parent company to: (a) «Lykos Paperless Solutions S.A.» concern data processing products, (b) «Inform Lykos S.A. (Romania)» concern mainly printing items and data processing products, and (c) « Albanian Digital Printing Solutions» concern printing items and services.

The purchases of parent company from: «Inform Lykos S.A. (Romania)» concern mainly forms, services and printing items.

C) REVIEW REPORT ON INTERIM FINANCIAL INFORMATION

To the shareholders of the company « INFORM P. LYKOS S.A. »

Introduction

We have reviewed the accompanying separate and consolidated condensed statement of financial position of «INFORM P. LYKOS S.A.» (the Company) and its subsidiaries as at 30 June 2017, the relative separate and consolidated condensed statements of comprehensive income, changes in equity and cash flows for the six-month period then ended, as well as the selected explanatory notes, that constitute the interim financial information, which is an integral part of the six-month financial report under the article 5 of the L. 3556/2007. Management is responsible for the preparation and presentation of this condensed interim financial information, in accordance with International Financial Reporting Standards, as adopted by the European Union and which apply to Interim Financial Reporting (International Accounting Standard "IAS 34"). Our responsibility is to express a conclusion on this condensed interim financial information based on our review.

Scope of Review

We conducted our review in accordance with International Standard on Review Engagements 2410, "Review of Interim Financial Information performed by the Independent Auditor of the Entity". A review of interim financial information consists of making inquiries, primarily 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 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 financial information is not prepared, in all material respects, in accordance with IAS 34.

Report on Other Legal and Regulatory Requirements

From the above review we ascertained that the content of the provided by the article 5 of L. 3556/2007 six-month financial report is consistent with the accompanying interim financial information.

Athens, 29 September 2017 Chartered Accountant

D)SIX-MONTH CONDENSED FINANCIAL STATEMENTS

The attached six-month condensed financial statements that constitute an integral part of the six-month financial report under Article 5 of Law 3556/2007 were approved by the Board of Directors of the issuer (hereinafter INFORM P. LYKOS S.A. or the Company) on 28.09.2017 and have been published on the Company's website - www.lykos.gr, as well as on the ASE website where they will remain at the disposal of investors for at least ten (10) years from their preparation and publication date. It is noted that the annual financial statements, audit reports of the statutory auditor and the reports of the board of directors of the subsidiaries are posted at the site www.lykos.gr.

It is to be noted that the published condensed financial items and information arising from the interim condensed financial statements are aimed to provide the reader with a general update on the financial position and results of the Company and the consolidated companies as an aggregate (the Group), but do not provide a complete outlook of the financial position, financial performance and cash flows of the Company and the Group in compliance with International Financial Reporting Standards.

Consolidated Statement of Financial Position

The Statement of Financial Position of the Group for the period ended as at 30/06/2017 and the corresponding comparative figures of previous year 31/12/2016 are the following:

THE GROUP
Note 30/6/2017 31/12/2016
Assets
Property, plant and equipment 12 56.194.295 57.855.234
Intangible assets 13 3.738.984 3.625.897
Other receivables 25.898 25.898
Investment property 264.849 268.421
Deferred tax assets 36.272 34.393
Non-current assets 60.260.298 61.809.842
Inventories 14 7.604.793 6.059.095
Current income tax assets 286.757 249.624
Trade receivables 13.106.032 11.266.900
Other receivables 1.082.361 1.237.202
Receivables from related parties 21 122.757 182.478
Cash and cash equivalents 2.602.513 926.095
Current assets 24.805.212 19.921.395
Total assets 85.065.510 81.731.237
Equity
Share capital 15 12.758.592 12.758.592
Share premium 15 13.805.791 13.805.791
Reserves 15.186.267 15.252.404
Retained profits 6.564.219 7.958.015
Equity attributable to shareholders of the
Parent Company
48.314.869 49.774.802
Non-controlling interests 651.520 658.888
Total Equity 48.966.390 50.433.690
Liabilities
Loans and borrowings 16 4.014.013 4.257.463
Employee benefits 972.403 958.106
Deferred tax liabilities 1.696.117 1.531.301
Non-current liabilities 6.682.534 6.746.870
Current income tax liabilities 2.594 8.350
Loans and borrowings 16 15.713.157 13.323.422
Trade payables 9.949.255 8.636.294
Other payables 971.405 1.197.645
Liabilities to related parties 21 1.822.137 367.196
Deferred income / revenue 657.937 716.824
Provisions 300.101 300.947
Current Liabilities 29.416.586 24.550.678
Total Liabilities 36.099.120 31.297.547
Total Equity and Liabilities 85.065.510 81.731.237

Company's Statement of Financial Position

The Statement of Financial Position of the Company for the period ended as at 30/06/2017 and the corresponding comparative figures of previous year 31/12/2016 are the following:

THE COMPANY
Note 30/6/2017 31/12/2016
Assets
Property, plant and equipment 12 31.067.274 32.228.447
Intangible assets 13 1.627.537 1.524.053
Other receivables 25.898 25.898
Investments in subsidiaries 22.138.861 22.138.861
Non-current assets 54.859.570 55.917.259
Inventories 14 4.768.273 3.884.170
Current income tax assets 273.734 236.565
Trade receivables 5.148.810 4.613.331
Other receivables 310.502 414.877
Receivables from related parties 21 501.007 1.573.192
Cash and cash equivalents 1.228.142 702.373
Current assets 12.230.467 11.424.508
Total assets 67.090.037 67.341.768
Equity
Share capital 15 12.758.592 12.758.592
Share premium 15 13.805.791 13.805.791
Reserves 13.185.237 13.185.237
Retained profits 3.332.285 5.118.405
Equity attributable to shareholders of the
Parent Company
43.081.905 44.868.025
Total Equity 43.081.905 44.868.025
Liabilities
Loans and borrowings 16 3.382.937 3.382.937
Employee benefits 972.403 958.106
Deferred tax liabilities 1.120.157 1.070.553
Non-current liabilities 5.475.498 5.411.596
Loans and borrowings 16 11.535.017 11.257.307
Trade payables 3.695.431 3.007.252
Other payables 632.718 891.040
Liabilities to related parties 21 2.019.250 1.252.613
Deferred income / revenue 650.218 653.934
Current Liabilities 18.532.634 17.062.146
Total Liabilities 24.008.132 22.473.742
Total Equity and Liabilities 67.090.037 67.341.768

Consolidated Income Statement

The Income Statement of the Group for the period 01/01-30/06/2017 and the respective comparative sizes of the previous period are the following:

30/6/2017
30/6/2016
Note
Revenue
31.837.231
31.953.526
7
Cost of sales
(27.367.990)
(27.427.132)
Gross profit
4.469.240
4.526.394
Other income
670.493
623.259
8
Selling and distribution expenses
(2.080.672)
(2.009.010)
Administrative expenses
(1.646.350)
(1.561.885)
Research and development expenses
(210.875)
(179.223)
Other expenses
(325.047)
(273.527)
8
+ Depreciation
1.942.986
1.835.723
EBITDA
2.819.777
2.961.730
- Depreciation
(1.942.986)
(1.835.723)
EBIT
876.791
1.126.007
Financial income
17.061
977
Financial expenses
(631.141)
(604.926)
Net finance costs
(614.080)
(603.949)
Profits / (losses) before taxes
262.712
522.059
Income tax expense
(176.298)
(177.877)
10
Profits / (losses) after taxes for the period
86.414
344.182
Profits / (losses) attributable to:
Owners of the Parent Company
46.690
298.894
Non-controlling interests
39.724
45.288
86.414
344.182

Company's Income Statement

The Income Statement of the Company for the period 1/1 - 30/06/2017 and the respective comparative sizes of the previous period are the following:

THE COMPANΥ
Note 30/6/2017 30/6/2016
Revenue 7 15.722.588 16.866.932
Cost of sales (13.400.155) (14.421.303)
Gross profit 2.322.433 2.445.629
Other income 8 478.690 500.435
Selling and distribution expenses (1.361.970) (1.275.189)
Administrative expenses (1.000.939) (839.638)
Research and development expenses (209.750) (179.223)
Other expenses 8 (93.734) (52.808)
Non-recurring expenses (20.679) 0
+ Depreciation 1.459.603 1.300.927
EBITDA 1.573.653 1.900.134
- Depreciation (1.459.603) (1.300.927)
EBIT 114.050 599.207
Financial income 68.085 100
Financial expenses (478.166) (452.185)
Net finance costs (410.081) (452.086)
Profits / (losses) before taxes (296.030) 147.121
Income tax expense 10 (49.604) (89.017)
Profits / (losses) after taxes for the period (345.634) 58.104
Profits / (losses) attributable to:
Owners of the Parent Company (345.634) 58.104
Non-controlling interests 0 0
(345.634) 58.104

Consolidated Statement of Comprehensive Income

The Statement of Comprehensive Income of the Group for the period 1/1 - 30/06/2017 and the respective comparative sizes of the previous period are the following:

THE GROUP
Note 30/6/2017 30/6/2016
Profits / (Losses) after taxes 86.414 344.182
Other comprehensive income
Items that will not be reclassified to profit or
loss
Property revaluation 0 (41)
0 (41)
Items that are or may be reclassified to profit
or loss
Foreign operations - foreign currency translation
differences
11 (63.409) 17.883
(63.409) 17.883
Other comprehensive income, net of tax (63.409) 17.842
Total comprehensive income for the period 23.005 362.024
Total comprehensive income attributable to:
Owners of the Parent Company (19.447) 316.163
Non-controlling interests 42.452 45.861
23.005 362.024

Company's Statement of Comprehensive Income

The Statement of Comprehensive Income of the Company for the period 1/1 - 30/06/2017 and the respective comparative sizes of the previous period are the following:

THE COMPANY
30/6/2017 30/6/2016
Profits / (Losses) after taxes (345.634) 58.104
Other comprehensive income
Other comprehensive income 0 0
Total comprehensive income for the period (345.634) 58.104

The accompanying explanatory notes constitute an integral part of these condensed interim financial statements.

Consolidated Statement of Changes in Equity

The Statement of Changes in Equity of the Group is the following:

THE GROUP For the period ended 30 June 2017
Attributable to owners of the Company
Share
capital
Share
premium
Translation
and other
reserves
Revaluation
reserve
IAS 19
reserve
Retained
earnings
Total Non
controlling
interest
Total
equity
Balance at 31 December 2016 12.758.592 13.805.791 (1.261.569) 16.650.720 (136.747) 7.958.015 49.774.802 658.888 50.433.690
Profits
/ (losses)
0 0 0 0 0 46.690 46.690 39.724 86.414
Other comprehensive income 0 0 (66.137) 0 0 0 (66.137) 2.728 (63.409)
Total comprehensive income 0 0 (66.137) 0 0 46.690 (19.447) 42.452 23.005
Distribution of dividends 0 0 0 0 0 (1.440.486) (1.440.486) (49.819) (1.490.305)
Balance at 30 June 2017 12.758.592 13.805.791 (1.327.706) 16.650.720 (136.747) 6.564.219 48.314.869 651.520 48.966.390

THE GROUP For the period ended 30 June 2016
Attributable to owners of the Company
Share
capital
Share
premium
Translation
and other
reserves
Revaluation
reserve
IAS 19
reserve
Retained
earnings
Total Non
controlling
interest
Total
equity
Balance at 31 December 2015 12.758.592 13.805.791 (1.173.553) 16.959.220 (108.498) 10.295.967 52.537.519 595.245 53.132.765
Profits
/ (losses)
0 0 0 0 0 298.894 298.894 45.288 344.182
Other comprehensive income 0 0 17.310 (41) 0 0 17.269 573 17.842
Total comprehensive income 0 0 17.310 (41) 0 298.894 316.163 45.861 362.024
Distribution of dividends 0 0 0 0 0 (1.728.416) (1.728.416) 0 (1.728.416)
Balance at 30 June 2016 12.758.592 13.805.791 (1.156.243) 16.959.178 (108.498) 8.866.444 51.125.266 641.107 51.766.372

Company's Statement of Changes in Equity

The statement of changes in equity of the Company is the following:

THE COMPANY For the period ended 30 June 2017
Share
capital
Share
premium
Revaluation
reserve
IAS 19
reserve
Other reserve Retained
earnings
Total
Balance at 31 December 2016 12.758.592 13.805.791 5.614.730 (136.747) 7.707.254 5.118.405 44.868.025
Profits
/ (Losses)
0 0 0 0 0 (345.634) (345.634)
Other comprehensive income 0 0 0 0 0 0 0
Total comprehensive income 0 0 0 0 0 (345.634) (345.634)
Distribution of dividends 0 0 0 0 0 (1.440.486) (1.440.486)
Balance at 30 June 2017 12.758.592 13.805.791 5.614.730 (136.747) 7.707.254 3.332.285 43.081.905

THE COMPANY For the period ended 30 June 2016

Share
capital
Share
premium
Revaluation
reserve
IAS 19
reserve
Other reserve Retained
earnings
Total
Balance at 31 December 2015 12.758.592 13.805.791 5.920.061 (108.498) 7.707.254 7.730.575 47.813.775
Profits
/ (losses)
0 0 0 0 0 58.104 58.104
Other comprehensive income 0 0 0 0 0 0 0
Total comprehensive income 0 0 0 0 0 58.104 58.104
Distribution of dividends 0 0 0 0 0 (1.728.414) (1.728.414)
Balance at 30 June 2016 12.758.592 13.805.791 5.920.061 (108.498) 7.707.254 6.060.265 46.143.465

Consolidated Statement of Cash Flows

Cash flows of the Group for the period 1/1 - 30/06/2017 and the respective comparative sizes of the previous period are the following:

THE GROUP
30/6/2017 30/6/2016
Cash flows from operating activities
Profits / (Losses) before taxes 262.712 522.059
Adjustments for:
- Depreciation & amortisation 1.942.986 1.835.723
- Net finance cost 614.080 603.949
- Gain on sale of property, plant and equipment 6.561 (232.857)
- Provisions / Accrued expenses 14.297 (1.105.041)
- Other (53.662) 24.484
2.786.975 1.648.315
Changes in working capital:
Inventories (1.551.638) (1.177.105)
Trade and other receivables (1.634.079) (790.647)
Trade and other payables 2.491.532 438.073
Cash generated from operating activities 2.092.790 118.637
Taxes paid (56.088) 43.322
Interest paid (576.685) (383.195)
Net cash from (used in) operating activities 1.460.016 (221.236)
Cash flows from investment activities
Interest received 17.045 2.478
Proceeds from sale of property, plant and equipment 2.150 48.154
Acquisition of property, plant and equipment & intangible assets (464.194) (1.023.233)
Net cash from (used in) investing activities (445.000) (972.602)
Cash flows from financing activities
Proceeds from loans & borrowings 2.600.584 0
Payment of loans 0 (802.392)
Payment of finance lease liabilities (448.468) (183.279)
Dividends paid to non-controlling interest (472.507) (1.616)
Dividends paid to owners of the Company (1.019.764) 0
Net cash from (used in) financing activities 659.845 (987.287)
Net increase (decrease) in cash and cash equivalents 1.674.861 (2.181.125)
Cash and cash equivalents at 1 January 926.095 3.927.869
Effect of movements in exchange rates on cash held 1.556 (4.365)
Cash and cash equivalents at 30 June 2.602.513 1.742.380

Company's statement of Cash Flows

Cash flows of the Company for the period 1/1 - 30/06/2017 and the respective comparative sizes of the previous period are the following:

THE COMPANY
30/6/2017 30/6/2016
Cash flows from operating activities
Profits / (Losses) before taxes (296.030) 147.122
Adjustments for:
- Depreciation & amortisation 1.459.603 1.300.927
- Net finance cost 410.081 452.085
- Gain on sale of property, plant and equipment 6.561 (208.722)
- Provisions / Accrued expenses 14.297 (1.105.041)
- Other (54.439) 25.358
1.540.074 611.727
Changes in:
Inventories (884.104) 124.570
Trade and other receivables 603.913 (863.471)
Trade and other payables 1.192.778 (405.372)
Cash generated from operating activities 2.452.662 (532.546)
Taxes paid 0 53.178
Interest paid (423.727) (277.465)
Net cash from (used in) operating activities 2.028.935 (756.833)
Cash flows from investment activities
Interest received 17.002 2.440
Dividend received 51.083 0
Proceeds from sale of property, plant and equipment 2.150 0
Acquisition of property, plant and equipment & intangible assets (410.625) (714.321)
Net cash from (used in) investing activities (340.390) (711.882)
Cash flows from financing activities
Proceeds from loans & borrowings 700.000 0
Payment of loans 0 (600.000)
Payment of finance lease liabilities (422.290) (141.620)
Dividends paid to non-controlling interest (420.722) (1.616)
Dividends paid to owners of the Company (1.019.764) 0
Net cash from (used in) financing activities (1.162.776) (743.236)
Net increase (decrease) in cash and cash equivalents 525.769 (2.211.951)
Cash and cash equivalents at 1 January 702.373 3.543.341
Cash and cash equivalents at 30 June 1.228.142 1.331.390

Notes to the Financial Statements

1. Reporting Entity

The Group Inform P. Lykos S.A. (the Group) is leader in the area of printing management, production of secured documents and business process outsourcing, offering services of printing and posting statements, electronic presentation of statements and printing management. The domicile of the parent company Inform P. Lykos S.A. (the Company) is in Koropi Attica, 5th km. of Varis - Koropiou Avenue. Since 12/03/2014, the financial statements of the Group are included in the consolidated financial statements of AUSTRIACARD AG (former LYKOS AG) with its headquarters in Austria.

The present financial statements were approved by the Board of Directors on 28/9/2017.

2. Basis of accounting

The accompanying separate and consolidated financial statements (hereinafter "financial statements"), have been prepared by the Management based on historic cost principal, as modified following the adjustment of certain assets and liabilities at fair values and the going concern principle and are in accordance with the International Financial Reporting Standards (hereinafter ≪IFRS≫) and the International Accounting Standards (hereinafter ≪IAS≫), as adopted by the European Union (according to the Regulation (EC) No. 1606/ 2002 of the European Parliament and the Council of the European Union at July 19th, 2002) and published by the International Accounting Standards Board (IASB), and also their interpretations, as published by the International Financial Reporting Interpretation Committee (I.F.R.I.C.) of the IASB. The period of application of each IAS/IFRS is set by the regulations published by the competent commission of the European Union.

The accompanying interim condensed financial statements were prepared under the same accounting policies and methods of calculation as those applied for the preparation of the annual financial statements as of 31/12/2016, apart from the changes arising following the adoption of new or revised IAS - IFRS or Interpretations that are effective on or after January 1st 2017. The aforementioned changes are described in the note 24.

3. Functional and presentation currency

The separate and consolidated financial statements are presented in euro, which is the functional currency of the Company. All amounts have been rounded to the nearest unit euro (without decimals), unless otherwise indicated.

4. Use of judgements and estimates

In preparing these consolidated financial statements, management has made judgments, estimates and assumptions that affect the application of the Group's accounting policies and the reported amounts of assets, liabilities, income and expenses, as also and the notes to the financial statements. They also affect disclosures of contingent assets and liabilities as at the financial statements preparation date as well as the publicized amounts of revenue and expenses.

Judgments, estimates and assumptions are based on the experience from previous years and other factors, included the expectations of future events that are considered reasonable under the particular conditions, while estimates and underlying assumptions are reviewed on an ongoing basis, making the best use of all the available data. Actual results may differ from these estimates.

Significant judgments and estimates used by the Group under the preparation of the presented interim financial statements are the same as the ones used under the preparation of the previous year annual financial statements, adjusted to the conditions, reflecting the current developments taking place in the Greek economy, described in Note 22.

Fair value measurement

As part of the implementation of IFRS, the Group has an obligation or option to revalue assets and liabilities at fair value.

The fair value measurement is based on the market and not to a particular entity. For certain assets and liabilities may be available observable market transactions or market information. For other assets and liabilities may not be available observable market transactions or market information. However, the objective of measuring fair value is the same in both cases to estimate the price at which it would take place a normal transaction to sell the asset or transfer the liability between market participants at the measurement date under current market conditions (i.e. an exit price at the measurement date from the perspective of a market participant that holds the asset or owes the liability).

Even when there is no observable market to provide pricing information on the sale of an asset or transfer a liability at the measurement date, the fair value measurement should consider that a transaction occurs on that date, considering the transaction from the perspective of a market participant that holds the asset or owes the liability. This alleged transaction constitutes the basis for valuation of the sale price of the asset or transfer the liability. Especially for liabilities if no observable market to provide pricing information on the transfer of a liability (e.g. when the contractual and other legal restrictions prevent the transfer of such data) may be observable market for such obligation if the other party holds as an asset (e.g. corporate bonds).

The assets and liabilities of the Group measured at fair value are mainly non-financial assets, in particular, real estate items, owned and used by the Group (self-owned and investment property) are monitored at fair value by using measurement techniques and are analytically presented in the relative Notes to the financial statements for the year ended as at December 31, 2016 (13B and 14B). The fair values of the aforementioned assets have not undergone significant changes, and, therefore, remain the same as the ones defined as at 31/12/2016.

5. Operating segments

The Group after the reorganization that was implemented at the end of 2014 by selling the segment of production, development and personalization of Cards maintains only one strategic segment, the printing division. Every unit of the division offers same products and services, and requires unique technology and marketing strategies.

The activity of the printing division mainly extents geographically in two countries Greece and Romania. This geographic allocation is from now on the designated factor for the segmentation of printing division.

These operating segments are monitored by the Head of Risk and Strategic decisions of the Group (Group CEO).

Information related to each reportable segment is set out below. Segment "profit before tax" is used to measure performance because management believes that this information is the most relevant in evaluating the results of the respective segments.

30/6/2017 Printing
segment
(Greece)
Printing
segment
(Romania)
Other Eliminations Total
Revenues 15.372.855 16.057.579 406.796 0 31.837.231
Intersegment revenues 349.733 1.354.418 0 (1.704.151) 0
Segment revenues 15.722.588 17.411.997 406.796 (1.704.151) 31.837.231
Cost of sales (13.400.155) (15.278.751) (325.603) 1.636.519 (27.367.990)
Gross profit 2.322.433 2.133.246 81.193 (67.632) 4.469.240
Other income 478.690 351.404 41.982 (201.582) 670.493
Selling and distribution expenses (1.361.970) (802.521) 0 83.819 (2.080.672)
Administrative expenses (1.000.939) (697.847) (59.281) 110.593 (1.646.350)
Research and development expenses (209.750) 0 0 0 (210.875)
Other expenses (114.413) (281.872) (2.016) 73.254 (325.047)
+ Depreciation & amortization 1.459.603 430.191 53.192 0 1.942.986
EBITDA 1.573.654 1.132.601 115.070 (1.548) 2.819.777
- Depreciation & amortization (1.459.603) (430.191) (53.192) 0 (1.942.986)
Operating profit / (loss) 114.051 702.410 61.878 (1.548) 876.791
Financial income 68.085 17 240.365 (291.405) 17.061
Financial expenses (478.166) (148.846) (4.130) 0 (631.141)
Net finance costs (410.081) (148.829) 236.235 (291.405) (614.080)
Profit / (loss) before tax (296.030) 553.581 298.113 (292.953) 262.712
Income tax expense (49.604) (88.570) (38.124) 0 (176.298)
Profit / (loss) (345.634) 465.011 259.989 (292.953) 86.414
30/6/2016 Printing
segment
(Greece)
Printing
segment
(Romania)
Other Eliminations Total
Revenues 16.299.426 15.289.035 365.065 0 31.953.526
Intersegment revenues 567.505 1.319.251 0 (1.886.756) 0
Segment revenues 16.866.932 16.608.286 365.065 (1.886.756) 31.953.526
Cost of sales (14.421.303) (14.644.675) (267.592) 1.906.437 (27.427.132)
Gross profit 2.445.629 1.963.611 97.473 19.681 4.526.394
Other income 500.435 287.161 37.500 (201.838) 623.259
Selling and distribution expenses (1.275.189) (797.636) 0 63.815 (2.009.010)
Administrative expenses (839.638) (711.403) (51.650) 40.806 (1.561.886)
Research and development expenses (179.223) 0 0 0 (179.223)
Other expenses (52.808) (297.200) (1.060) 77.541 (273.527)
+ Depreciation & amortization 1.300.927 478.470 56.326 0 1.835.723
EBITDA 1.900.133 923.002 138.589 5 2.961.729
- Depreciation & amortization (1.300.927) (478.470) (56.326) 0 (1.835.723)
Operating profit / (loss) 599.206 444.532 82.263 5 1.126.007
Financial income 100 15 1.981 (1.118) 977
Financial expenses (452.185) (149.993) (3.866) 1.118 (604.926)
Net finance costs (452.086) (149.978) (1.885) 0 (603.949)
Profit / (loss) before tax
Income tax expense
147.121
(89.017)
294.555
(47.419)
80.378
(41.441)
5
0
522.058
(177.877)

The allocation of assets, liabilities, capital expenditure and depreciation to operating segments is as follows:

30/6/2017 Printing
segment
(Greece)
Printing
segment
(Romania)
Other Eliminations Total
Assets 67.090.037 36.407.819 2.438.426 (20.870.772) 85.065.510
Liabilities 24.008.132 11.784.401 1.062.641 (756.053) 36.099.120
Capital expenditures (1/1-30/6/2017) 410.625 61.041 619 0 472.285
Depreciation (1/1-30/6/2017) 1.459.603 430.191 53.192 0 1.942.986
31/12/2016 Printing
segment
(Greece)
Printing
segment
(Romania)
Other Eliminations Total
Assets 67.341.768 34.814.560 2.384.408 (22.809.498) 81.731.238
Liabilities 22.473.742 10.344.218 1.174.120 (2.694.533) 31.297.547
Capital expenditures (1/1-30/6/2016) 3.600.422 310.066 0 0 3.910.488
Depreciation (1/1-30/6/2016) 1.300.927 478.470 56.326 0 1.835.723

6. Seasonality or cyclicality of interim business operations

The Group sales do not record significant seasonality and, therefore, are mainly equally allocated within the two semesters of the year. Furthermore, there is no indication of changes to assets, liabilities, equity, profit or cash flows caused by the unusual events regarding nature or size.

7. Revenues

A. Revenues by category

THE GROUP THE COMPANY
30/6/2017 30/6/2016 30/6/2017 30/6/2016
Sales of goods 13.201.043 13.978.932 6.613.593 7.136.438
Rendering of services 10.553.564 9.509.489 1.879.562 1.770.803
Sales of merchandise 8.082.623 8.465.105 7.229.434 7.959.692
Total 31.837.231 31.953.526 15.722.588 16.866.932

Β. Revenues by geographical region

THE GROUP THE COMPANY
30/6/2017 30/6/2016 30/6/2017 30/6/2016
West Europe 766.591 766.163 744.081 757.013
Central & Eastern Europe 30.673.149 30.962.447 14.583.550 15.885.003
Asia & Africa 397.491 224.916 394.957 224.916
Total 31.837.231 31.953.526 15.722.588 16.866.932

8. Other income - Other expenses

A. Other income

THE GROUP THE COMPANY
30/6/2017 30/6/2016 30/6/2017 30/6/2016
Gain on sale of property, plant and equipment 64 219.493 64 208.722
Rental income from property and machinery leases 250.422 175.184 174.517 174.335
Reversal of previous year accruals 140.363 0 140.363 0
Capitalisation of development loyalty expenses 140.834 103.671 140.834 103.671
Other income 138.810 124.911 22.912 13.706
Total 670.493 623.259 478.690 500.435

B. Other expenses

THE GROUP THE COMPANY
30/6/2017 30/6/2016 30/6/2017 30/6/2016
Foreign exchange differences - losses 19.872 30.435 771 239
Losses on sale of PPE 6.625 0 6.625 0
Loss of the customer's contract term 13.526 8.552 5.850 8.552
Impairment loss on trade receivables 9.118 0 9.118 0
Re-invoiced expenses 96.120 94.972 0 0
Bank commissions 931 1.060 0 0
Other expenses 178.856 138.508 71.370 44.016
Total 325.047 273.527 93.734 52.808

9. Earnings/ (losses) per share

A. Basic earnings or basis losses per share

All shares are ordinary (see note 15). The calculation of earnings/(losses) per share is based on the following earnings/(losses) per share attributable to the ordinary shareholders and the weighted average number of ordinary outstanding shares.

THE GROUP
30/6/2017 30/6/2016
Profits / (losses) for the year, attributable to the
owners of the Company
46.690 298.894

B. Weighted-average number of ordinary shares

2017 2016
Issued ordinary shares at 1 January 20.578.374 20.578.374
Weighted-average of ordinary shares at 30 June 20.578.374 20.578.374

C. Earnings per share

2017 2016
Profit / (loss) per share 0,0023 0,0145

10. Income Taxes

THE GROUP THE COMPANY
30/6/2017 30/6/2016 30/6/2017 30/6/2016
Current tax expense
Current year income tax (10.788) (63.523) 0 0
(10.788) (63.523) 0 0
Deferred taxation
Origination and reversal of temporary differences (165.510) (114.354) (49.604) (89.017)
(165.510) (114.354) (49.604) (89.017)
Total (176.298) (177.877) (49.604) (89.017)

11. Foreign currency translation differences arising from conversion of foreign operations financial statements

Foreign currency translation differences amounting to € -63.409, recognized in OCI for the period 1/1 - 30/06/2017 (1/1 - 30/6/2016: € 17.883) mainly pertain to foreign currency translation differences arising from conversion of the financial statements of the Group subsidiaries in Romania («Inform Lykos S.A.» and «Compaper Converting S.A.») from functional currency to the financial statements presentation currency (Euro).

12. Property, plant and equipment

A. Changes within the period

THE GROUP
Land and
buildings
Plant and
equipment
Fixtures
and fittings
Under
construction
Total
Cost
Balance at 1 January 2016 52.674.388 43.276.134 6.156.478 77.985 102.184.984
Additions 105.714 4.118.980 113.101 21.637 4.359.432
Disposals 0 (186.622) 0 (21.635) (208.258)
Revaluation (426.882) 0 0 0 (426.882)
Reclassifications 0 11.168 0 (11.168) 0
Effect of movements in exchange rates (72.939) (30.099) (99) (171) (103.308)
Balance at 31 December 2016 52.280.281 47.189.561 6.269.479 66.648 105.805.969
Balance at 1 January 2017 52.280.281 47.189.561 6.269.479 66.648 105.805.969
Additions 23.784 72.375 55.015 9.237 160.411
Disposals 0 (15.000) (2.300) (8.079) (25.379)
Effect of movements in exchange rates (55.922) (23.313) 310 (99) (79.024)
Balance at 30 June 2017 52.248.143 47.223.623 6.322.505 67.707 105.861.977
Accumulated depreciation and impairment
losses
Balance at 1 January 2016 17.559.262 21.790.792 5.445.606 0 44.795.659
Depreciation 504.767 2.648.237 194.841 0 3.347.846
Disposals 0 (157.922) 0 0 (157.922)
Effect of movements in exchange rates (6.771) (27.849) (228) 0 (34.848)
Balance at 31 December 2016 18.057.258 24.253.258 5.640.219 0 47.950.735
Balance at 1 January 2017 18.057.258 24.253.258 5.640.219 0 47.950.735
Depreciation 256.973 1.393.843 90.542 0 1.741.359
Disposals 0 (6.375) (2.214) 0 (8.589)
Effect of movements in exchange rates (4.548) (11.423) 149 0 (15.823)
Balance at 30 June 2017 18.309.683 25.629.303 5.728.696 0 49.667.682
Carrying amounts
Balance at 31 December 2016 34.223.023 22.936.303 629.260 66.648 57.855.234
Balance at 30 June 2017 33.938.460 21.594.320 593.808 67.707 56.194.295
THE COMPANY
Land and
buildings
Plant and
equipment
Fixtures and
fittings
Under
construction
Total
Cost
Balance at 1 January 2016 32.721.137 30.805.570 5.208.065 31.300 68.766.072
Additions 93.595 3.745.151 95.789 0 3.934.534
Disposals 0 (2.243.504) 0 0 (2.243.504)
Revaluation (430.042) 0 0 0 (430.042)
Balance at 31 December 2016 32.384.690 32.307.216 5.303.854 31.300 70.027.060
Balance at 1 January 2017 32.384.690 32.307.216 5.303.854 31.300 70.027.060
Additions 23.784 44.658 52.538 0 120.980
Disposals 0 (15.000) (2.300) 0 (17.300)
Balance at 30 June 2017 32.408.473 32.336.874 5.354.093 31.300 70.130.740
Accumulated depreciation and impairment
losses
Balance at 1 January 2016 16.237.478 15.803.861 4.616.402 0 36.657.741
Depreciation 329.673 1.918.785 174.641 0 2.423.099
Disposals 0 (1.282.227) 0 0 (1.282.227)
Balance at 31 December 2016 16.567.151 16.440.419 4.791.044 0 37.798.613
Balance at 1 January 2017 16.567.151 16.440.419 4.791.044 0 37.798.613
Depreciation 164.412 1.028.763 80.268 0 1.273.442
Disposals 0 (6.375) (2.214) 0 (8.589)
Balance at 30 June 2017 16.731.562 17.462.806 4.869.098 0 39.063.466
Carrying amounts
Balance at 31 December 2016 15.817.539 15.866.797 512.811 31.300 32.228.447
Balance at 30 June 2017 15.676.911 14.874.068 484.995 31.300 31.67.274

B. Leased machinery

The Group leases machinery in Greece and Romania. At 30/6/2017 the net carrying amount of leased equipment was € 3.912.194 (2016: € 4.360.931). The value of the leased equipment is ensuring the relevant leasing obligations.

C. Guaranties

There are encumbrances on the Group's fixed assets for an amount of € 7 million in order to cover loan liabilities. There are no encumbrances on the parent company's fixed assets.

13. Intangible assets and goodwill

The changes to the Group intangible assets values for the period as follows:

THE GROUP
Software,
Patents, Development
Goodwill licenses costs Total
Cost
Balance at 1 January 2016 6.103.881 10.785.252 2.232.738 19.121.871
Additions 0 333.556 0 333.556
Acquisitions - internally developed 0 80.566 202.442 283.008
Effect of movements in exchange rates 0 (5.685) 0 (5.685)
Balance at 31 December 2016 6.103.881 11.193.689 2.435.180 19.732.750
Balance at 1 January 2017 6.103.881 11.193.689 2.435.180 19.732.749
Additions 0 171.040 0 171.040
Acquisitions - internally developed 0 40.515 100.319 140.834
Effect of movements in exchange rates 0 (4.423) 0 (4.423)
Balance at 30 June 2017 6.103.881 11.400.820 2.535.499 20.040.200
Accumulated depreciation and impairment
losses
Balance at 1 January 2016 4.017.437 9.858.471 1.777.029 15.652.937
Amortisation 0 331.473 129.198 460.670
Effect of movements in exchange rates 0 (6.754) 0 (6.754)
Balance at 31 December 2016 4.017.437 10.183.190 1.906.226 16.106.853
Balance at 1 January 2017 4.017.437 10.183.190 1.906.226 16.106.853
Amortisation 0 119.140 79.660 198.799
Effect of movements in exchange rates 0 (4.436) 0 (4.436)
Balance at 30 June 2017 4.017.437 10.297.893 1.985.886 16.301.216
Carrying amounts
Balance at 31 December 2016 2.086.444 1.010.499 528.954 3.625.897
Balance at 30 June 2017 2.086.444 1.102.927 549.613 3.738.984
THE COMPANY
Software,
Patents,
licenses
Development
costs
Total
Cost
Balance at 1 January 2016 6.920.228 2.232.738 9.152.966
Additions 307.437 0 307.437
Acquisitions - internally developed 80.566 202.442 283.008
Balance at 31 December 2016 7.308.231 2.435.180 9.743.411
Balance at 1 January 2017 7.308.231 2.435.180 9.743.411
Additions 148.811 0 148.811
Acquisitions - internally developed 40.515 100.319 140.834
Balance at 30 June 2017 7.497.557 2.535.499 10.033.055
Accumulated depreciation and impairment
losses
Balance at 1 January 2016 6.119.135 1.777.029 7.896.163
Amortisation 193.997 129.198 323.194
Balance at 31 December 2016 6.313.132 1.906.226 8.219.358
Balance at 1 January 2017 6.313.132 1.906.226 8.219.358
Amortisation 106.502 79.660 186.161
Balance at 30 June 2017 6.419.633 1.985.886 8.405.519
Carrying amounts
Balance at 31 December 2016 995.099 528.954 1.524.053
Balance at 30 June 2017 1.077.924 549.613 1.627.537

14. Inventory

THE GROUP THE COMPANY
30/6/2017 31/12/2016 30/6/2017 31/12/2016
Raw materials and consumables 4.249.057 3.352.474 2.248.568 1.872.424
Work in progress 293.843 306.497 153.218 201.811
Finished and semi-finished goods 1.099.451 987.720 608.207 529.885
Merchandise 1.291.822 1.083.958 1.105.721 967.564
Prepayments for inventory purchase 670.619 328.447 652.559 312.487
Total 7.604.793 6.059.095 4.768.273 3.884.170

15. Share capital and share premium

The Company's share is freely traded on the Athens Stock Exchange and participates in the business support services industry and in the Mid & Small Cap Price index.

The share premium of the Group and the Company comes from previous issuing of shares for cash at a value higher than their nominal value.

The share capital concerns exclusively ordinary shares, fully settled. In the Company's shares are not included shares with revoke right or preference shares. Moreover, the Company has not issued any bonds or other securities convertible into shares.

Within the period 1/1 - 30/6/2017, there was no change in the Company's share capital.

Dividends

The Regular General Meeting for year 2017 held on 02/06/2017 approved the relative proposal of the Company Board of Directors on distribution of dividend of € 0,07 (net of taxes € 0,0595) per share, i.e. a total amount of dividend of € 1.440.486,18. The aforementioned amount was fully paid in June of the current year 2017.

16. Loans and borrowings

THE GROUP THE COMPANY
30/6/2017 31/12/2016 30/6/2017 31/12/2016
Non-current liabilities
Secured bank loans 585.580 807.442 0 0
Finance lease liabilities 3.428.433 3.450.021 3.382.937 3.382.937
4.014.013 4.257.463 3.382.937 3.382.937
Current liabilities
Secured bank loans 3.574.567 1.170.723 0 0
Unsecured bank loans 11.654.829 11.241.789 11.100.000 10.400.000
Finance lease liabilities 483.761 910.910 435.017 857.307
15.713.157 13.323.422 11.535.017 11.257.307

The terms and conditions of Group's and Company's loans are as follows:

Lender/Bank Currency Nominal
interest
rate
Year of
maturity
Pledge type Carrying
amount
Secured bank loans 4.160.147
ROBOR 3 Plegde on
RON months + 2019 Land and 1.024.762,70
3% Building
ROBOR 3 Plegde on
RON months + 2018 Land and 3.135.384,78
2.55% Building
Unsecured bank loans 11.654.829
EUR Euribor
1m+5,1%
2017 - 6.800.000,00
EUR Euribor
1m+5,5%
2017 - 4.300.000,00
EUR Euribor
3m+3,5%
2017 - 542.146,76
EUR Euribor
1y+3,5%
2017 - 12.682,65
Finance lease liabilities 3.912.194
EUR 6% 2021 Pledge on
equipment
930.840,88
EUR 9% 2017 Pledge on
equipment
81.057,91
EUR 5% 2023 Pledge on
equipment
489.600,22
EUR 4% 2023 Pledge on
equipment
2.316.455,45
EUR Variable 2018 Pledge on
equipment
17.171,18
EUR 8% 2019 - 1.794,63
EUR 5% 2019 Pledge on
equipment
75.273,32
19.727.170

17. Group composition

Set out below a list of all subsidiaries country, participation percentage, consolidation method and participation relation of incorporated subsidiaries the Group as at 30/06/2017:

Company Country Participation
percentage
Consolidation
method
Participation
relationship
Inform P. Lykos S.A. Greece Parent - Parent
Lykos Paperless Solutions S.A. Greece 99,91% Full Direct
Terrane L.T.D. Cyprus 100,00% Full Direct
Inform Lykos (Romania) L.T.D. Cyprus 98,19% Full Indirect
Inform Lykos S.A. Romania 98,19% Full Indirect
Compaper Converting S.A. Romania 95,68% Full Indirect
Sagime Gmbh Austria 100,00% Full Direct
Albanian Digital Printing Solutions Sh.p.k. Albania 51,00% Full Direct

Information mentioned above has not change since 31/12/2016 and 30/6/2016.

18. Non-controlling interests (NCI)

Group does not include subsidiary with material non-controlling interest.

19. Commitments

The Group has not entered into important commitments apart from those mentioned in subsections (loans, finance lease contracts etc.).

20. Contingencies

In 2016, the Competition Council of Romania imposed a fine of approximately € 0.8 million on the subsidiary of the Group, Inform Lykos, S.A., (ILR), in Romania. As the management is convinced that the Group has complied with the competition law and that the verdict is unjustified and disproportional, it has appealed against this verdict. At the date of issuance of this report, the lawsuit was still ongoing. Within the scope of the principle of prudence, Group management has formed a provision of € 0.3 million for this lawsuit, which is included in the consolidated financial statements.

Besides the aforementioned case, there are no other judicial or legal claims that are expected to affect significantly the financial position of the company as at 30/06/2017.

The Company has not been tax audited by tax authorities for the years from 2009 and 2010. Contingently arising taxes are not expected to have a significant effect on the financial statements.

For the years 2011-2013, the Greek companies of the Group are subject to tax audit conducted by Chartered Accountants in compliance with the provisions of Article 82, par. 5, Law 2238/1994. For the years 2014-2015 the Greek companies of the Group are subject to tax audit conducted by Chartered Accountants in compliance with the provisions of Article 65A, Law 4174/2013.This audit for the years 2011 - 2015 has been completed and the relative unqualified conclusions tax compliance certificates have been issued. The tax audit for the year 2016 is in progress and is expected to be completed without substantial tax burdening.

Regarding subsidiaries and related companies, they have not been tax inspected by tax authorities for the years, presented below, and therefore, their tax liabilities in respect of these years have not been finalized:

Company Domicile Tax unaudited
years
Inform P. Lykos S.A. Greece 2009-2010, 2016
Lykos Paperless Solutions S.A. Greece 2010,2016
Terrane Ltd Cyprus 2011-2016
Inform Lykos (Romania)L.T.D Cyprus 2013-2016
Inform Lykos S.A Romania 2005-2016
Compaper Converting S.A Romania 2001-2016
Sagime GmbH Austria 2013-2016
Albanian Digital Printing Solutions Sh.p.k. Albania 2012-2016

Apart from the aforementioned, there are no other cases of contingent liabilities or contingent receivables, which could significantly affect the Group or the Company financial position or operation.

Encumbrances

There are encumbrances on the Group's fixed assets with value of € 7 million in order to cover loan obligations. There are no encumbrances on the parent company's fixed assets.

21. Related Parties

The operational and investment activity of the Group creates certain earnings, assets or liabilities that concern except others related companies or individuals persons. These transactions are realised in commercial base and according to the laws of market. The Group did not participate in any transaction of uncommon nature or content which is essential for the Group, or the companies and the individuals connected closely with this, and does not aim to participate in such kind of transactions in the future.

The table below presents analytically all the intercompany transactions:

Sales of goods or services

THE GROUP THE COMPANY
30/6/2017 30/6/2016 30/6/2017 30/6/2016
Subsidiaries 0 0 349.733 567.505
Other related parties 133.179 239.675 52.005 158.331
Total 133.179 239.675 401.738 725.836

Purchases of goods or services

THE GROUP THE COMPANY
30/6/2017 30/6/2016 30/6/2017 30/6/2016
Subsidiaries 0 0 1.391.103 1.319.251
Other related parties 2.837.289 2.406.083 2.745.718 2.326.701
Total 2.837.289 2.406.083 4.136.821 3.645.952

Granted loans

THE GROUP THE COMPANY
30/6/2017 31/12/2016 30/6/2017 31/12/2016
Subsidiaries 0 0 60.000 60.000
Total 0 0 60.000 60.000
Balances of receivables from sales of goods or services
THE GROUP THE COMPANY
30/6/2017 31/12/2016 30/6/2017 31/12/2016
Subsidiaries 0 0 60.807 1.101.156
Other related parties 122.757 182.478 23.937 53.054
Total 122.757 182.478 84.744 1.154.210

Balances of liabilities from purchases of goods or services

THE GROUP THE COMPANY
30/6/2017 31/12/2016 30/6/2017 31/12/2016
Subsidiaries 0 0 217.918 905.471
Other related parties 1.822.137 367.196 1.801.333 347.142
Total 1.822.137 367.196 2.019.250 1.252.613

Income from dividends

THE GROUP THE COMPANY
30/6/2017 30/6/2016 30/6/2017 30/6/2016
Subsidiaries 0 0 51.083 0
Total 0 0 51.083 0
Remuneration of key executives THE GROUP THE COMPANY
30/6/2017 30/6/2016 30/6/2017 30/6/2016
Key executives 274.951 183.450 274.951 183.450
Total 274.951 183.450 274.951 183.450
Balances of receivables from key executives
THE GROUP THE COMPANY
30/6/2017 31/12/2016 30/6/2017 31/12/2016
Key executives 0 0 0 0
Total 0 0 0 0

Balances of liabilities to key executives

THE GROUP THE COMPANY
30/6/2017 31/12/2016 30/6/2017 31/12/2016
Key executives 0 0 0 0
Total 0 0 0 0

22. Significant events and information

Developments in recent years, national and international negotiations on the re-examination of the terms of Greece's funding program, and assessments of compliance with these conditions, make the domestic macroeconomic and financial environment volatile. The return to financial stability depends to a large extent on the actions and decisions of the institutions in the country and abroad.

Taking into account the nature of the Company's operations and financial position, any adverse developments are not expected to have a significant effect on its operations.

Nevertheless, the Management constantly assesses the possible consequences in order to ensure that all necessary and effective measures and actions are taken in time to minimize any impact on the Company's activities.

23. Post reporting period date events

There was no event that occurred subsequent to the 30/06/2017 which may have a significant impact on the financial position and operations of the Group.

24. Changes in accounting policies

New Standards, Interpretations, Revisions and Amendments to existing Standards that are effective and have been adopted by the European Union

There are no new Standards, Interpretations, Revisions or Amendments to existing Standards that have been issued by the International Accounting Standards Board (IASB), are adopted by the European Union, and their application is mandatory from or after 01/01/2017.

New Standards, Interpretations, Revisions and Amendments to existing Standards that have not been applied yet or have not been adopted by the European Union

The following new Standards, Interpretations and amendments of IFRSs have been issued by the International Accounting Standards Board (IASB), but their application has not started yet or they have not been adopted by the European Union.

IFRS 15 "Revenue from Contracts with Customers" (effective for annual periods starting on or after 01/01/2018)

In May 2014, the IASB issued a new Standard, IFRS 15. The Standard fully converges with the requirements for the recognition of revenue in both IFRS and US GAAP. The key principles on which the Standard is based are consistent with much of current practice. The new Standard is expected to improve financial reporting by providing a more robust framework for addressing issues as they arise, increasing comparability across industries and capital markets, providing enhanced disclosures and clarifying accounting for contract costs. The new Standard will supersede IAS 11 "Construction Contracts", IAS 18 "Revenue" and several revenue related Interpretations. The Group will examine the impact of the above on its Financial Statements, though it is not expected to have any. The above have been adopted by the European Union with effective date of 01/01/2018.

IFRS 9 "Financial Instruments" (effective for annual periods starting on or after 01/01/2018

In July 2014, the IASB issued the final version of IFRS 9. The package of improvements introduced by the final version of the Standard, includes a logical model for classification and measurement, a single, forward-looking "expected loss" impairment model and a substantially-reformed approach to hedge accounting. The Group will examine the impact of the above on its Financial Statements, though it is not expected to have any. The above have been adopted by the European Union with effective date of 01/01/2018.

IFRS 16 "Leases" (effective for annual periods starting on or after 01/01/2019)

In January 2016, the IASB issued a new Standard, IFRS 16. The objective of the project was to develop a new Leases Standard that sets out the principles that both parties to a contract, i.e. the customer ('lessee') and the supplier ('lessor'), apply to provide relevant information about leases in a manner that faithfully represents those transactions. To meet this objective, a lessee is required to recognize assets and liabilities arising from a lease. The Group will examine the impact of the above on its Financial Statements, though it is not expected to have any. The above have not been adopted by the European Union.

Amendments to IAS 12: " Recognition of Deferred Tax Assets for Unrealized Losses" (effective for annual periods starting on or after 01/01/2017)

In January 2016, the IASB published narrow scope amendments to IAS 12. The objective of the amendments is to clarify the accounting for deferred tax assets for unrealized losses on debt instruments measured at fair value. The Group will examine the impact of the above on its Financial Statements, though it is not expected to have any. The above have not been adopted by the European Union.

Amendments to IAS 7: "Disclosure Initiative" (effective for annual periods starting on or after 01/01/2017)

In January 2016, the IASB published narrow scope amendments to IAS 7. The objective of the amendments is to enable users of financial statements to evaluate changes in liabilities arising from financing activities. The amendments will require entities to provide disclosures that enable investors to evaluate changes in liabilities arising from financing activities, including changes arising from cash flows and non-cash changes. The Group will examine the impact of the above on its Financial Statements, though it is not expected to have any. The above have not been adopted by the European Union.

Clarification to IFRS 15 "Revenue from Contracts with Customers" (effective for annual periods starting on or after 01/01/2018)

In April 2016, the IASB published clarifications to IFRS 15. The amendments to IFRS 15 do not change the underlying principles of the Standard, but clarify how those principles should be applied. The amendments clarify how to identify a performance obligation in a contract, how to determine whether a company is a principal or an agent and how to determine whether the revenue from granting a license should be recognized at a point in time or over time. The Group will examine the impact of the above on its Financial Statements, though it is not expected to have any. The above have not been adopted by the European Union.

Amendment to IFRS 2: "Classification and Measurement of Share-based Payment Transactions" (effective for annual periods starting on or after 01/01/2018)

In June 2016, the IASB published narrow scope amendment to IFRS 2. The objective of this amendment is to clarify how to account for certain types of share-based payment transactions. More specifically, the amendments provide requirements on the accounting for the effects of vesting and non-vesting conditions on the measurement of cash-settled share-based payments, for share-based payment transactions with a net settlement feature for withholding tax obligation, as well as, a modification to the terms and conditions of a share-based payment that changes the classification of the transaction from cash-settled to equity-settled. The Group will examine the impact of the above on its Financial Statements, though it is not expected to have any. The above have not been adopted by the European Union.

Amendments to IFRS 4: "Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts" (effective for annual periods starting on or after 01/01/2018)

In September 2016, the IASB published amendments to IFRS 4. The objective of the amendments is to address the temporary accounting consequences of the different effective dates of IFRS 9 Financial Instruments and the forthcoming insurance contracts Standard. The amendments to existing requirements of IFRS 4 permit entities whose predominant activities are connected with insurance to defer the application of IFRS 9 until 2021 (the "temporary exemption") and also permit all issuers of insurance contracts to recognize in other comprehensive income, rather than profit or loss, the volatility that could arise when IFRS 9 is applied before the new insurance contracts Standard is issued (the "overlay approach"). The Group will examine the impact of the above on its Financial Statements, though it is not expected to have any. The above have not been adopted by the European Union.

Annual Improvements to IFRSs - 2014-2016 Cycle (effective for annual periods starting on or after 01/01/2017 and 01/01/2018)

In December 2016, the IASB issued Annual Improvements to IFRSs - 2014-2016 Cycle, a collection of amendments to IFRSs, in response to several issues addressed during the 2014-2016 cycle. The issues included in this cycle are the following: IFRS 12: Clarification of the scope of the Standard, IFRS 1: Deletion of short-term exemptions for first-time adopters, IAS 28: Measuring an associate or joint venture at fair value. The amendments are effective for annual periods beginning on or after 1 January 2017 for IFRS 12, and 1 January 2018 for IFRS 1 and IAS 28. The Group will examine the impact of the above on its Financial Statements, though it is not expected to have any. The above have not been adopted by the European Union.

IFRIC 22 "Foreign Currency Transactions and Advance Consideration" (effective for annual periods starting on or after 01/01/2018)

In December 2016, the IASB issued a new Interpretation, IFRIC 22. IFRIC 22 provides requirements about which exchange rate to use in reporting foreign currency transactions (such as revenue transactions) when payment is made or received in advance. The Group will examine the impact of the above on its Financial Statements, though it is not expected to have any. The above have not been adopted by the European Union.

Amendments to IAS 40: "Transfers of Investment Property" (effective for annual periods starting on or after 01/01/2018)

In December 2016, the IASB published narrow-scope amendments to IAS 40. The objective of the amendments is to reinforce the principle for transfers into, or out of, investment property in IAS 40, to specify that (a) a transfer into, or out of investment property should be made only when there has been a change in use of the property, and (b) such a change in use would involve the assessment of whether the property qualifies as an investment property. That change in use should be supported by evidence. The Group will examine the impact of the above on its Financial Statements, though it is not expected to have any. The above have not been adopted by the European Union.

IFRS 17 "Insurance Contracts" (effective for annual periods starting on or after 01/01/2021)

In May 2017, the IASB issued a new Standard, IFRS 17, which replaces an interim Standard, IFRS 4. The aim of the project was to provide a single principle-based standard to account for all types of insurance contracts, including reinsurance contracts that an insurer holds. A single principle-based standard would enhance comparability of financial reporting among entities, jurisdictions and capital markets. IFRS 17 sets out the requirements that an entity should apply in reporting information about insurance contracts it issues and reinsurance contracts it holds. The Group will examine the impact of the above on its Financial Statements, though it is not expected to have any. The above have not been adopted by the European Union.

IFRIC 23 "Uncertainty over Income Tax Treatments" (effective for annual periods starting on or after 01/01/2019)

In June 2017, the IASB issued a new Interpretation, IFRIC 23. IAS 12 "Income Taxes" specifies how to account for current and deferred tax, but not how to reflect the effects of uncertainty. IFRIC 23 provides requirements that add to the requirements in IAS 12 by specifying how to reflect the effects of uncertainty in accounting for income taxes. The Group will examine the impact of the above on its Financial Statements, though it is not expected to have any. The above have not been adopted by the European Union.

Koropi Attica, September 28, 2017

CHAIRMAN OF THE BoD VICE CHAIRMAN & GROUP CEO

PANAGIOTIS LYKOS PANAGIOTIS SPYROPOULOS ID No ΑB 607588 ID No AI 579288

CHIEF FINANCIAL OFFICER HEAD OF ACCOUNTING DEPARTMENT

ALEXANDRA ADAM ANASTASIOS TATOS ID No ΑΕ 118025 ID No AM 556006 Registr. No of E.C. A' CLASS 9657

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