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PREBET SA AIUD - PREB

2017 H1 financial results

Release Date: 8/14/2017 7:58:28 AM

IRIS Code: 3959C

REPORT OF ADMINISTRATORS

SC PREBET AIUD SA for the 1st semester 2017

Half-yearly Report according to the Regulation N.C.T.S. no. 1 / 2006-Annex 31

For the financial year: 2017 ( 1st semester )

Report date: 14.08.2017

Name of the trading company - S.C. PREBET AIUD S.A.

Registered office – Aiud , Judetul Alba, str. Arenei , nr. 10

Telephone/fax number – 0258-861661 / 0258-861454

Unique registration number within the Trade Registry Office – RO1763841

Fiscal code within the Trade Registry Office – Alba – J/01/121/1991

Regulated market in which are traded the issued securities – B.V.B.

Subscribed and paid capital – 8.199.547,74 lei

Main characteristics of the issued securities the company issued a number of 45,553.043 registered shares with a nominal value of 0,18 lei each, dematerialised

1. Analysis of the Company's business

a. Description of the core business of the trading company

SC PREBET AIUD SA has as main object of activity : Manufacture of concrete products for construction purposes, NACE code – 2361.

Shareholding structure on 30.06.2017 is the following:

Shareholder

No. shares

%

OTHER SHAREHOLDERS

25.543.699

56.0747

HAGEA LIVIU

14.056.588

30.8576

ASSOCIATION PAS PREBET AIUD

5.952.756

13.0677

TOTAL

45.553.043

100

b. Specifying the date of incorporation of the trading company

The trading company PREBET AIUD S.A. was incorporate in 1991, by the purchase of the entire patrimony of the former Intreprinderi Prefabricate din beton Aiud (IPB) (Precast Concrete Company Aiud), founded in 1966..

The trading company PREBET AIUD S.A. was organized in the actual structure based on Law. No. 15/1990 and by the GD no. 93/04.02.1991, being registered within the Trade Registry under no. J/01/121/1991.

c. Description of each merger or significant reorganization of the trading company, of its subsidiaries or of the controlled companies, during the financial year

In the 1st semester 2017 was not significant modifications/reorganizations, mergers, divisions or dissolutions.

d. Description of acquisitions and/or alienation of assets

During the 1st semester 2017, the company did not perform acquisitions or alienation of assets.

1.1.1. Elements of general assessment

SC PREBET AIUD SA: has prepared the financial statements in accordance with the International Standards of Financial Reporting adopted by the European Union (IFRS), in force at the annual reporting date and with the provisions of OPFM 2844/2016, with subsequent amendments and completions:

a) Gross profit : 669.103 lei

b) Net profit: 571.780 lei

c) Turnover: 10.105.068 lei

d)

Costs (total expenses):

11.303.531 lei

e)

Operating expenses:

11.259.758 lei

f)

Financial expenses:

43.773 lei

g)

Financial revenues:

32.614 lei

h)

Operating expenses:

11.940.020 lei

i)

Total revenues:

11.972.634 lei

a) Profit

At the end of the 1st semester 2017 the company registered a gross profit of 669.103 lei.

b) Turnover

Achieved turnover 10.105.068 lei.

c) Export

The company does not export products.

d) Costs

The total costs related to the manufacture for the total manufactured are in amount of 11.303.531 lei at the revenues of 11.972.634 lei .

e) Market held percentage

Due to the diversity of manufactured products and multitude of producers of precast elements on the domestic market it is difficult to establish a weighting for each element of precast concrete product.

f) Liquidity

At the end of the review period is registered a minus of treasury compared to early of 2.901.473 lei

Liquidity:

- Cash and bank account at the beginning of the period: 8.172.328 lei

- Cash and deposits at the end of the period: 5.270.855 lei

- Cash Flow: - 2.901.473

- Current liquidity: 7.61

- Immediate liquidity: 6.35

1.1.2. Assessment of the technical level of the trading company

Main achieved products are:

a. Prestressed concrete traverses for railways

b. Concrete beams for road bridges with armature reinforced or post-reinforced and various length and sections

c. Prefabricated for railways and road culverts

d. Prefabricated for electrification and signaling of road ways

e. Dales for railway level crossing

f. Prefabricated for channel with pockets for overhaul of locomotives and wagons

g. Reinforced concrete traverses biblock type for underground and tram

h. Various prefabricated for structures

Description of the main products manufactured and/or services provided specifying:

a. Main outlet markets for each product or service and the distribution methods:

Outlet market of the company's products is represented by the domestic market having as distribution modality the direct sale to the contractor or subcontractor who has contracted works to the end beneficiary of the required product.

b. Share of each category of goods or services in revenues and in the total turnover of the trading company for the past three years:

In 1st semester 2017 the total volume of prefabricated was 8.133 m3 of which bulk concrete 1070 m3.

The products manufactured by the company are found in two broad categories of products, plus bulk concrete:

a) reinforced and prestressed concrete sleepers

b) other reinforced and prestressed concrete products

c) bulk concrete

Product name

1st semester 2017

%

1st semester 2016

%

1st semester 2015

%

Concrete sleepers for railways

21.48%

26.23%

41.64%

Diverse concrete products

65.36%

60.91%

55.76%

Bulk concrete

13.16%

2.86%

2.60%

c. New products considered for which it shall be affected a substantial volume of assets in future financial year and also the stage of development of these products

By the specific of the activity SC PREBET AIUD SA always has new products on the production line, depending on market demand structure of prefabricated products, products that run on demand, by adapting or creating new patterns, according to technical projects

As a novelty element implemented in the last part of last year and in the first semester of this year is the endowment of the company with a universal stand, which allows the casting of beams with reinforced reinforcement of lengths and high heights.

1.1.3. Assessment of the technical-material supply

The main objectives of the supply activity were:

- Reducing acquisition costs, thus reducing the production costs

- Identifying new suppliers

- Providing the necessary of raw materials, spare parts, depending on store policy

- Obtaining the best conditions to supply on contracting (quality/price/payment terms)

Current stock in which is also included the safety stock ensures a good running of the production activity.

- metal plate - Moravia Steel

- cement - SC Holcim S.A. Bucuresti

- concrete steel - Mitlin PH Construct Craiova

- Dacotrans Sperieteni

- D&D Drotaru Ungaria

Commercial relationships with main suppliers of raw materials, are based on compliance with the clauses included in Sale – purchase contracts concluded or prolonged after at the beginning of each year. The provider is chose, having as basic principles, the quality-price report, terms of payment and market development of that product.

Material supply sources are both in the domestic market but also imported from the European community depending on the type of the manufactured product.

1.1.4. Assessment of selling activity

a. Description of the evolution of sequential sales on domestic and/or foreign market and the prospects of sales on medium and long term

Sales are made only on the domestic market and somewhat have seasonal character in the winter months their volume is substantially reduced.

Sales prospects depend on the medium and long term government policy regarding the allocation of financial resources for various works which include our products.

Evolution of the turnover for the last 3 years is as follows:

30.06.2017

30.06.2016

30.06.2015

10.105.068 lei

12.117.899 lei

10.230.383 lei

b. Description of the competitive situation in the field of activity of the trading company, the market share of products or services of the trading company and the main competitors

In the 1st semester 2017 the share of sleepers product represented 25% of the goods production volume the difference being represented by the product category other precast concrete elements.

The company capitalized its products only on the domestic market throughout the entire country less in the area of Dobrogea and the South – East part of Romania.

The main competitors of our market are:

- Somaco Grup Prefabricate Bucuresti

- Macon Deva

- ASA Cons Turda

- Lupp Sibiu

- METABET Pitesti

- TRAVERTEC BUZAU

- DUNAPREF Giurgiu

- Other manufacturing concrete companies and that produce concrete elements

c. Description of each significant dependency of the trading company on one single customer or group of customers whose loss would have a negative impact on company’s revenues

Given the diversified customer portfolio, SC PREBET AIUD SA is not significantly depending on a single customer. In terms of risk management concept, and by the fact that the company has customers whose source of contracts and works is represented by the investments undertaken by entities that are directly or indirectly subordinated to the Romanian State (RNCMNR CFR), we can say that there is a company dependences in investment contracts financed by the national or local budget.

1.1.5. Assessment of aspects related with employers/personnel of the trading company

a. indicating the number and training level of the trading company's employees and the degree of unionization of the workforce

On 30.06.2017 the average number of employees is 190, and the effective one is of 198 employees.

In relation to Employers, the employees are represented by the Free Trade Union PREBET AIUD the unionisation degree in 2017 is of 95%.

Regarding the recruitment and selection of personnel, this period is characterized by a rather limited offer of qualified personnel, introducing more rigorous selection phases of potential candidates.

The company grants a great importance to organize qualification courses, to streamline the way of working and interdepartmental collaboration.

During the 1st semester 2017 was constantly watched the assessment of staff’s performances and fixing individual targets, with their quarterly check.

b. Description of reports between the manager and employees and any conflictual elements that characterize these reports

During the 1st semester 2017 there were no labor disputes between the company management and employees.

1.1.6.Assessment of aspects related to the impact of the basic activity of the issuer on the environment

We believe that the company shall not have environmental issues because the performed work is not a polluting activity, the evidence also being the existing environmental permit.

S.C. PREBET AIUD S.A. proposes to intensify the concerns to ensure and maintain an environment within a level required by the International and European Standards.

For this were established the following objectives:

1. The implementation and certification of an environmental management system. The company holds the environmental management certificate no.3695M/29.05.2014 in accordance with SR EN ISO 14001: 2005.

2. Identification and control of environmental aspects associated with all activities taking place within the company, to ensure compliance with legal requirements and prevent pollution by:

- Minimizing the amount of generated waste and their manage in safely conditions when their occurrence can not be avoided;

- Improving the quality of discharged water from the company;

- Reducing emissions of pollutants into the atmosphere;

- Reducing consumption of natural resources

3. Ensuring communication of policy by all internal and external stakeholders of the company.

4. Creating conditions for the implementation, maintenance and continuous improvement of environmental management system by providing competent human resources and material resources necessary to maintain the environmental policy and meeting objectives.

In the first semester of this year, it was followed legal requirements and compliance with those contained in the regulatory legal acts, finding this and upon inspection by authorized bodies.

1.1.7. Assessment of research and development activity

The company does not have its own research department related to new products this thing is made through our beneficiaries’ projects, these projects being prepared by specialized research and design institutions.

The research activity within SC PREBET AIUD SA is conducted by the Technical Manufacture Office and own laboratory as well as collaborations with design institutes, with direct implications in increasing the quality of products and services of our company, by improving the manufacture networks and the improvement schemes in order to growth Labour productivity, namely:

- Modernization of existing production capacities, improving the microclimate of work, extension of outlet market, and the scope of business, automation of technologic processes.

- Performed investments were from own sources.

1.1.8. Assessment of trading company’s activity regarding the management of risk

The fact that the company made a profit in every year except the year of 2014 when he moved to restructure the staff and were made severance payments, makes us believe that there shall not be future problems and price risks, of credit, of liquidity and cash flow are reduced.

The following risk categories may have influence on company's activity:

- Credit risk

- Liquidity risk

- Market risk

- Currency risk

- Operational Risk

- Risk related to balancing cost

This note presents information about the Group's exposure towards each risk mentioned above, the Group targets, the policies and the processes for measuring and managing the risk and the procedures for managing the capital.

Credit risk

The credit risk is the risk that the Group incurs a financial loss due to a non-fulfillment of contractual obligations by a customer or counterparty to a financial instrument and this risk mainly result from the trade receivables of the Group.

Liquidity risk

The liquidity risk is the risk that the Group may encounter difficulties in fulfilling the obligations related to liabilities that are settled in cash or in another financial asset transfer. The Group's approach on liquidity risk is to ensure, to the extent possible, that it always hold sufficient liquidity to meet the liabilities

when they become due, both under normal conditions and under stress, without incurring unacceptable losses or jeopardizing the Group's reputation.

To counteract this risk factor, the Group has applied restrictive policies of delivery of products to uncertain customers. An important role was played by the group's policy to require in some cases the payment in advance of the products delivered and a careful selection of new customers depending on their creditworthiness and financial discipline. There was requested guarantees for delivery contracts and tried to reduce the number of days of claims payment by customers of Group established by contract.

Market risk

The market risk is the risk that market prices variation, such as exchange rate, interest rates and market demand reduction, to affect the Group's revenues.

Market risk - instability in the sale market for building materials, characterized by a significant drop in demand, a prevent risk through market research and marketing policies. The risk of price volatility in electricity, gas, metals, diesel was prevented by finding new suppliers or renegotiating the contracts with the traditional suppliers.

Currency risk

The group has transactions and loans in other currency than the functional currency (RON).

The transactions made in foreign currencies are converted into Lei on the rate of exchange ruling at the transaction date.

Operational risks

The results of the Company can be influenced by operational risks specific to its activity, related to the operation in parameters or interruption of operation systems, safety data and information stored, dependence on new technologies, loss of key personnel, difficulties in introducing new products, increased competition from third local or foreign competitors, including the risk of error or fraud.

The Board of Directors of the Company has the overall responsibility for the establishment and supervision of risk management in the Company.

The activity is governed by the following principles:

a) the principle of delegation of competencies;

b) the principle of decision-making autonomy;

c) the principle of objectivity;

d) the principle of investment protection;

e) the principle to promote the development of the stock market;

f) the principle of active role.

The Board of Directors is also responsible for examining and approving the strategic, operational and financial plan of the Company, and also the corporate structure of the Company. Company’s Risk management policies are also defined to ensure the identification and analysis of risks that the Company is facing with, establishing appropriate limits and controls, and risk monitoring and setting the compliance limits. Policies and risk management systems are regularly reviewed to reflect the occurred changes in market conditions and the Company's activities. The Company, through its standards and training and management procedures, aims to develop an orderly and constructive control environment,

in which all employees understand their roles and obligations.

Internal audit of the Company’s entities oversees how management monitors compliance with policies and procedures for risk management and reviews the adequacy of the risk management framework in relation to the risks faced by entities.

Risk related to balancing cost

This risk is specific to the activity on the production and sale of electricity and it is generated by any

unrealistic forecasting of quantities and delivery hourly volumes of electricity supply which may impact

the financial situation by occurrence of additional costs for balancing. It is estimated that this risk is

reduced due to the forecasting activity carried out by the special department of the entity.

Risk factors

Any economic activity implies risks. Investors should carefully consider the potential impact that it may cause the following categories of risk factors before deciding to invest in the shares of the company. The risks and uncertainties outlined in the following paragraphs may adversely affect, as appropriate, the continuation of the operating activities of the Company, its financial position and performance, prospects, evolution of trading price, including the ability to pay dividends. Additional risk factors and uncertainties that do not exist at this time may have, depending on further evolutions, a negative impact on the aspects described above.

Emerging market risk

Romania is considered an emerging economy. Investors who want to invest in the shares of an issuer listed on emerging market should be aware of the fact that such an economy shows higher risks compared to a developed economy, with an infrastructure policy, legal and financial advanced, able to provide effective levers to counter the systemic imbalances that might arise. Although Romania is a Member State of the European Union, this status ensures the prerequisites for continuing the structural reforms and the improvement of the economic environment, there is the risk that unforeseen events, associated with an emerging market economy, to significantly affect the Company's activity and its financial prospects.

Romania's emerging economy status can cause a slow pace of capital market development, expressed through a slow rate of growth in the value of transactions, of capitalization and/or the number of issuers and investors. Other characteristics of an emerging market that can have negative consequences refer to a lower value of liquidity and higher volatility compared to the mature equity markets. Also between evolutions in stock prices listed on a stock emerging market and the evolutions in mature markets there may be a high correlation, which means that economic and financial developments in other countries together with developed economy can influence the evolution of prices and transactions recorded on the market where the company is listed.

All these elements can influence the potential development of the Company. Moreover, the company’s activity may be influenced the volatility of the interest rate and the exchange rate, characteristics specific for an emerging economy, although the recent developments suggest some stability of these financial variables.

Risk of politic instability

Political instability may lead to the postponement of implementation of structural reforms designed to support a sustainable development of the Romanian economy and favor the creation of an economic and financial infrastructure aimed to enhance the economic and financial attractiveness of foreign direct investments and/or the portfolio. A negative perception can influence the volume of the Romanian political

class, the character and structure of the Romanian investments, foreign and/or domestic. Instability at the political level can have a significant negative effect on the confidence of resident or non-resident investors, on the degree of liquidity and market capitalization, including upon the evolution of the stock quote.

Risk of modifying the tax legislation

Tax legislation in Romania is subject to extensive and frequent changes which could adversely affect the Company's business and/or the gains made by investors from owning or trading the shares (raising of taxes, introducing new taxes, reduction or suspension of tax breaks, etc.). The is the risk that the Company or the investors in their actions to be exposed in the future to increased taxes or new taxes (additional) that could not be predicted or estimated on the date of preparation of this report.

Financial and economic risk

Business, financial situation and the prospects of the Company depend on the development level of the economy and the capital market in Romania, and consequently on the volume and value of transactions in the capital market. The international financial crisis affecting economies and capital markets world could have adverse and difficult effects to assess in the Romanian economy, national currency and markets in which they the Company operates, resulting in decrease in the volume and value of transactions, decrease of the price of the traded financial instruments, etc. The negative effects on the Romanian economy could lead to diminished purchasing power and the financial resources of companies and individuals in Romania, including those of investors who perform market transactions where the Company is listed.

Liquidity and price developments in the regulated markets of capital in Romania are affected directly or indirectly by the evolution of international capital markets risk of regional instability amid armed conflicts can also cause substantial financial losses that are difficult to predict the date of this Report.

Risk related to competition

The company estimates that, currently, there is a high risk of competition to the outlet markets where operates. However, the risk of market penetration of delivered products and offered services by the Company should be considered by investors when they substantiate the investment in the Company's shares.

Nonpayment risk (credit)

Unfavorable changes occurred in the creditworthiness of the Company’s customers, amid amplification of financial difficulties arising from the economic and financial crisis may cause adverse effects on the ability of the Company to collect cash or cash equivalents resulting from the sale, which could cause uncertainty about business continuity, as well and declines in financial performance indicators by recognizing adjustments for the impairment of these assets.

Risk related to permits and licenses

The Company's business is subject to certain permits and licenses specific for the industry activity. Possible changes in the conditions required to be insured by the Company or in the maintenance requirements of these permits and

licenses, including changes in criteria for obtaining or renewing may adversely affect the Company's business or the financial prospects of the Company.

1.1.9. Perspective elements regarding the activity of the trading company

a. presentation and analysis of trends, items, events or uncertainty factors that affect or could affect the liquidity of the trading company compared to the same period of the last year.

Immediate liquidity of the company is 6.35, and the indicator of current liquidity is 7.61. The acceptable recommended value is around 2, giving this guarantee to cover the current liabilities from the current assets.

b. presentation and analysis of the effects for the capital expenses, actual or anticipated on the financial situation of the trading company with the same period of the last year

In the first half of the year 2017 the volume of investments was 1,502,210 lei, and the value of the immobilizations under execution of 447,462 lei compared to the similar period last year (2,805 lei) shows a substantial increase.
The acquisitions were mainly related to the endowment of the company with cranes that allow the handling of large-sized monobloc beams.
For the year 2017, an investment volume of 5,200,000 lei is proposed

c. presentation and analysis of events, transactions, economic changes that significantly affect the revenues from the basic activity

In the first semester of 2017 the company managed to fulfill the binnual indicators in the income and expenditure budget, existing prerequisites for achieving BVC total for the year 2017.

2. Tangible assets of the trading company

2.1. Specifying the location and characteristics of the main production facilities owned by the trading company

All production capacities of the company are located in its premises with the title deed for the land.

The main production facilities are:

- Production hall of concrete sleepers for railways;

- Stand for beam bridges with different sections;

- Polygon of heavy products;

- Station for the production of concrete;

- Ballast sorting station;

- Prefabrication plant of poles for electrification;

2.2. Description and analysis of the degree of ware of the trading company properties

The machines with production capacities have an average degree of wear. Lack of liquidity in the past years for making investment have contributed to these effects.

Between, December 2012 - March 2014 the company purchased 6 fixed assets through a program of European funding aspect that contributed to the replacement of old production capacities and to a high degree of wear and tear.

2.3. Specifying the potential problems related to ownership of tangible assets of the trading company

The Company owns its assets and there are no disputes about the ownership right.

3. Market securities issued by the trading company

3.1. The securities issued by our company are traded only in Romania on the Bucharest Stock Exchange.

3.2. In the last 5 years the situation of dividends distribution was as follows:

- year 2012 were paid dividends in amount of 455.530 lei

- year 2013 no dividends were paid

- year 2014 no dividends were paid

- year 2015 – for the year 2015 were paid dividends in amount of – 501.083,00 lei

- year 2016 – for the year 2016 were paid dividends in amount of – 1.275.484 lei


3.3. Description of any activities of the trading company to purchase its own shares.

The Company has not taken any decision to repurchase its own shares.

3.4. If the trading company has, branches specify the number and the nominal value of shares issued by the parent company owned by the subsidiary.

Not appropriate

3.5. If the trading company issued debentures and/or other debt as securities presentation of how the trading company pays its obligations to the holders of such securities.

The Company did not issue debentures or other debt securities.

4. Management of the trading company

4.1. Presentation of trading Company’s administrators

No.

Surname, Name

Position

Profession

1.

Hagea Liviu

President BD

Economist

2.

Racasan Stefan

Member

Engineer

3.

Demeter Ioan

Member

Economist

4.

Rivis Laurentiu

Member

Lawyer

5.

Tilinca Radu Marcel

Member

Engineer

a) CV (surname, name, age, qualification, professional experience, etc.)

1) Surname: Hagea

Name: Liviu

Age: 67 years

Qualification: Economist

Professional experience: 39 years

Seniority in the position: 10 years

Holds the position of chairman of the Board of Directors, he graduated the Faculty of Foreign Trade of the Academy of Economic Studies in Bucharest (year 1973) and holds the position of Administrator in the company since 2008.

The professional training is demonstrated by the capacity of director in a company from the foreign trade of Belgium (between, 1992 - 1997), respectively the capacity of Secretary of State held during 1997 -1998 in the Ministry of Industry and Trade.

2) Surname: Racasan

Name: Stefan

Age: 63 years

Qualification: Engineer

Professional experience: 38 years

Seniority in the position: 4 years

He is executive member of the Board of Directors and CEO; He is a graduated of the Polytechnic Institute in Cluj Napoca - Faculty of Civil Engineering (year 1980) and holds the position of CEO in the company since 2014. Mr. Racasan Stefan activates in the company since 1980,

accumulating a relevant professional experience in coordinating the quality control activities, of extraction and sorting units, of planning and organization of investment projects or supply, transport and delivery.

3) Surname:Demeter Name: Ioan

Age: 52 years

Qualification:Economist Professional experience: 8 years

Seniority in the position: 8 years

Executive member of the Board of Directors: is graduated from the Faculty of Management in Brasov, specialization in Business Administration (year 2011) and holds the second mandate as administrator for the Issuer since 2014 (the first mandate being in 2009 - 2010). Mr. Ioan Demeter is working within the Issuer since 1983, and is mainly involved in the Office of Shareholders. A relevant period of time (2000 - 2009) and 2013-2014 held the position of Chairman of the trade union organization, in the position of ELECTROMECANIC respectively REFERENT SHAREHOLDERS OFFICE and HEAD OF SHAREHOLDERS OFFICE, employed within the Issuer.

4) Surname: Rivis

Name: Laurentiu

Age: 37 years

Qualification:Lawyer

Professional experience: 15 years

Seniority in the position: - years

Non-executive member of the Board of Directors: is a graduate Universitatea de Vest Vasile Goldis Arad, Faculty of Law ( year 2002) , Mr. Rivis Laurentiu graduated in alternative investment fund managers' and ,, International Financial Reporting Standards - IFRS '' and participated in several national and international conferences. Referring to professional experience after graduation worked as a legal adviser in the company Bega Timisoara group, and since 2005 works in the S.I.F. Banat - Crisana Arad, with different functions currently being director.

5) Surname : Tilinca

Name : Radu Marcel

Age : 53 years

Qualification: Engineer

Professional experience: 27 years

Seniority in the position: 4 years

Non-executive member of the Board of Directors: graduated the Military Technical Academy in Bucharest, specializing in aircraft and aircraft engines (year 1990). Mr. Tilinca Marcel Radu has

professional experience in military aeronautics and energy (natural gas), develops his activity in the MND - Unit of Campia Turzii (1990-1993) and in Romgaz SA - Tirgu Mures (1993 - 2006). Mr. Marcel Radu Tilinca hold a non-executive mandate under SC VES SA Sighisoara 2005 - 2009. Between 2010 - 2011 he hold the position of non-executive director for the Issuer, mandate that was resumed in the year of 2014 and held up to date.

b. Any agreement, understanding or family connection between that person and another person due to whom that person was appointed administrator.

c. Administrator’s participation in the share capital of the trading company.

On 30.06.2017 the administrators held in S.C. PREBET AIUD S.A. a number of shares, as follows:

No.

Surname and name

Number of shares

Percentage

1.

Hagea Liviu

14.056.588

30.8576%

2.

Racasan Stefan

182.417

0.4004%

3.

Demeter Ioan

279.509

0.6135%

4.

Rivis Laurentiu

-

-

5.

Tilinca Radu Marcel

100.005

0.2195%

d. List of affiliate persons to the trading company.

Not appropriate.

4.2. List of executive members of the trading company:

No.

Surname and name

Position

Profession

1.

Racasan Stefan

General manager

Engineer

2.

Cimpean Ioan

Economic manager

Economist

3.

Sandu Alexandru

Production manager

Engineer

4.

Groza Titus

Development manager

Economist

5.

Ranca Flaviu

Sales manager

Engineer

a. The term for which the person is part of the executive management

Not appropriate.

b. Any agreement, understanding or family connection between that person and another person due to whom that person was appointed administrator.

Not appropriate.

c. Participation of that person in the share capital of the trading company

On 30.06.2017 the members of executive management held in S.C. PREBET AIUD S.A. a number of shares, as follows:

No.

Surname, name

Number of shares

Percent

1.

Racasan Stefan

182.417

0.4004%

2.

Cimpean Ioan

17.673

0.0388%

3.

Sandu Alexandru

-

-

4.

Groza Titus

-

-

5.

Ranca Flaviu

-

-

4.3. For persons mentioned in paragraphs 4.1 and 4.2 indication of any litigation or administrative proceedings in which were involved related to their activity for the issuer.

In the last 5 years the persons described in section 4.1 and 4.2. were not involved in litigation or administrative proceedings.


5. Economic and financial situation

a. Balance sheet items

Name of indicators

31.12.2016

30.06.2017

Tangible assets

13.061.174

14.232.316

Intangible assets

-

-

TOTAL FIXED ASSETS

13.061.174

14.232.316

Stocks

4.561.611

6.135.444

Receivables and other receivables

11.259.940

11.362.208

Cash and cash equivalent

8.172.328

5.270.855

Other assets ( expenses in advance )

-

-

TOTAL CURRENT ASSETS

23.993.879

22.768.507

1.TOTAL ASSETS

37.055.053

37.000.823

Subscribed and paid capital

8.199.548

8.199.548

Capital adjustments

57.644.064

57.644.064

Other elements of ownership equity

- 647.854

-647.854

Capital premium

-

-

Reassessment reserves

3.779.677

3.737.282

Reserves

14.858.327

16.080.724

Reported result except that from the first adoption of date of IAS 29

- 63.521.958

-63.521.958

Reported result from the adoption of the premium for IAS 29

5.280.937

5.323.332

Profit at the end of the reporting period

2.647.696

571.780

Distribution of profit

-149.815

-

2.TOTAL OWNERSHIP EQUITY

28.090.622

27.368.918

Long term loans

-

-

Debt with deferred income tax

604.251

604.251

TOTAL DEBTS ON LONG TERM

604.251

604.251

Trade payables and other debts

3.758.047

4.798.828

Short term loans

-

-

Current income tax liability

-

61.000

TOTAL DEBTS ON LONG TERM

3.758.047

4.858.828

Subsidies on investments

1.820.652

1.748.358

Provisions

2.781.481

2.401.468

3.TOTAL LIABILITIES

37.055.053

37.000.823

b. Profit and loss account

Indicator name

30.06.2016

30.06.2017

NET TURNOVER

12.117.899

10.105.068

Changes in inventories of finished goods and production in progress

1.481.924

1.382.973

Variation in the production of tangible assets

-

284.402

Other revenues

205.927

167.577

OPERATING INCOMES - TOTAL

13.805.750

11.940.020

Raw materials and used consumables

( 6.361.601 )

( 6.183.774 )

Other external expenses (with energy and water)

( 548.673 )

( 566.405 )

Employee’s benefits expense

( 3.378.684 )

( 3.324.075 )

Expenses with depreciation and amortization

( 470.100 )

( 508.128 )

Other expenses

( 944.449 )

( 677.376 )

OPERATING EXPENSES - TOTAL

( 11.703.507 )

( 11.259.758 )

OPERATING PROFIT OR LOSS

2.102.243

680.262

FINANCIAL INCOMES

12.879

32.614

FINANCIAL EXPENSES

( 18.311 )

( 43.773 )

FINANCIAL PROFIT OR LOSS

( 5.432 )

( 11.159 )

TOTAL REVENUES

13.818.629

11.972.634

TOTAL EXPENSES

( 11.721.818 )

( 11.303.531 )

GROSS PROFIT

2.096.811

669.103

CORPORATE TAX

( 306.553 )

( 97.323 )

NET PROFIT

1.790.258

571.780

c. Cash flow

At the end of the year the company registers available cash 5.270.855 lei reduced the amount of 2.901.473 lei in comparison with the beginning of the year (8.172.328 lei).

6. Signatures

President of the Board of Directors, Economic Manager,

Ec. Hagea Liviu Ec. Cimpean Ioan

The semester Report at 30.06.2017 will be available for shareholders and investors starting with 14.08.2017, 08:00, both hard copy at the Company’s premises and in electronic format on the website, www.prebet.ro section "Info Shareholders / Regular Reports, as well as in the link below:



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