Silvano Fashion Group Consolidated Interim Financial Report for Q4 and 12 months of 2019 (unaudited)

Selected Financial IndicatorsSummarized selected financial indicators of the Group for 12 months of 2019 compared to 12 months of 2018 and 31.12.2019 compared to 31.12.2018 were as follows:Financial performanceThe Group`s sales amounted to 56 943 thousand EUR during 12 months of 2019, representing a 8.5% decrease as compared to the same period of previous year. Overall, wholesales decreased by 13.2%, measured in EUR.The Group’s gross profit during 12 months of 2019 amounted to 29 651 thousand EUR and decrease by 14.4% compared to previous year. The gross margin during 12 months of 2019 decreased to 52.1%, from 55.6% in the respective period of previous year. The cost of sold goods decreased by 1.1%.Consolidated operating profit for 12 months of 2019 amounted to 12 712 thousand EUR, compared to 17 736 thousand EUR in 12 months of 2018, decrease 28.3%. The consolidated operating profit margin was 22.3% for 12 months of 2019 (28.5% in 12 months of 2018). Consolidated EBITDA for 12 months of 2019 decreased by 11.9% and amounted to 17 004 thousand EUR, which is 29.9% in margin terms (19 310 thousand EUR and 31.0% for 12 months of 2018).Reported consolidated net profit attributable to equity holders of the Parent company for 12 months of 2019 amounted to 10 663 thousand EUR, compared to net profit of 10 796 thousand EUR in 12 months of 2018, net profit margin attributable to equity holders of the Parent company for 12 months of 2019 was 18.7% against 17.4% in 12 months of 2018.Financial positionAs of 31 December 2019 consolidated assets amounted to 46 309 thousand EUR representing increase by 1.8% as compared to the position as of 31 December 2018.Trade and other receivables decreased by 1 038 thousand EUR as compared to 31 December 2018 and amounted to    2 610 thousand EUR as of 31 December 2019. Inventory balance increased by 1 714 thousand EUR and amounted to 19 359 thousand EUR as of 31 December 2019.Equity attributable to equity holders of the Parent company decreased by 1 138 thousand EUR and amounted to 26 324 thousand EUR as of 31 December 2019. Current liabilities decreased by 4 675 thousand EUR during  12 months of 2019.InvestmentsDuring 12 months of 2019 the Group’s investments into property, plant and equipment totalled 1 216 thousand EUR, in previous year same period 497 thousand EUR. Investments were made mainly into opening and renovating own stores, as well into equipment and facilities to maintain effective production for future periods.PersonnelAs of 31 December 2019, the Group employed 1 888 employees, including 503 people in retail operations. The rest were employed in production, wholesale, administration and support operations. In 31.12.2018 there were 2 073 employees, including 500 people in retail operations.Total salaries and related taxes during 12 months of 2019 amounted to 13 195 thousand EUR (12 500 thousand EUR in 12 months of 2018). The remuneration of key management of the Group, including the key executives of all subsidiaries, totalled 870 thousand EUR.Decisions made by governing bodies after Q4 2019On May 03, 2019 Silvano Fashion Group held its regular Annual General Meeting of Shareholders. The Meeting adopted the following decisions. The Meeting approved the 2018 Annual Report.The Meeting decided to distribute dividends in the amount 0.20 EUR per share (record date 16.05.2019).To pay to the entitled shareholders of AS Silvano Fashion Group as dividends EUR 0.20 per share as follows:
–       to pay dividends EUR 0.10 per share by 20 May 2019 latest, (payment completed on 20.05.2019);
 to pay dividends EUR 0.10 per share by 10 October 2019 latest, (payment completed on 29.08.2019);The Meeting decided to recall Mr. Ants Susi from the Supervisory Board of SFG. The authorities of Mr. Ants Susi as the member of the Supervisory Board of SFG shall be deemed to have expired as of May 3, 2019.The Meeting decided to elect Triin Nellis as the new member of the Supervisory Board of SFG, whose term of office shall start on May 3, 2019 and expire on June 30, 2021.The meeting decided to amend the remuneration policy of the supervisory board members, approved by the shareholders’ meeting on June 30, 2012 as follows:  –    to assign monthly gross remuneration of 5,000 euros for the chairman of the supervisory board;
   –    to assign monthly gross remuneration of 2,000 euros for the supervisory board;
The meeting decided to amend section 2.2. of the Articles of Association and reinstate it in the following wording: “All shares of the Company are registered shares. The nominal value of a registered share is 0,20 (twenty) cents. A share grants 1 (one) vote at the General Meeting. “;The meeting decided:  –   The share capital of SFG shall be increased by 3,600,000 EUR from 3,600,000 EUR to 7 200 000 EUR by   the increase of the nominal value of existing shares by 0,10 EUR per share, i.e. from 0.10 EUR to 0.20 EUR;  
  –   The share capital of SFG shall be increased via a bonus issue on the account of the share premium. The bonus issue shall be carried out on the basis of the 2018 annual report, that has been approved by the shareholders together with the decision on the distribution of profit. The bonus issue shall be carried out on the account of the share premium in the amount of 3,600,000 EUR. After the bonus issue, the new size of the share capital shall be 7,200,000 EUR that is divided into 36,000,000 shares with the nominal value of 0,20 EUR each share;
–    The list of shareholders who shall be entitled to participate in the bonus issue shall be fixed as at 17 May 2019 as at the end of the working day of the settlement system. The ex‑date is 16 May 2019; as of this date a person who acquired shares is not entitled to participate in the bonus issue. The increase of the nominal value of the shares shall take place immediately after the registration of the share capital increase with the Commercial Register. As of 15 May 2019, Tartu County Court registered the increase of the share capital to 7 200 thousand EUR according to the resolution of the Annual General Meeting (May 03, 2019).
On June 19,2019 Silvano Fashion Group held its  Extraordinary Meeting of Shareholders . The Meeting adopted the following decisions:
 –    To amend section 2.2. of the Articles of Association and reinstate it in the following wording: “All shares of the Company are registered shares. The nominal value of a registered share is 0.10 (ten) cents. One share gives 1 (one) vote at the General Meeting “.  –    The share capital of SFG shall be reduced by a reduction of the nominal value of the shares by EUR 0.10 per share;
  –    To reduce the share capital, make a payment to the shareholders in the amount of EUR 0.10 per share. No payments will be made to the Company for its own shares. The disbursement shall be made to the hareholders not earlier than three months after entry of the reduction of share capital in the commercial register, provided that the claims submitted by the creditors in due time are secured or satisfied;
–      The share capital shall be reduced in connection with the adjustment of the Company’s capital structure and finally the Company’s share capital shall be consistent with the Company’s strategic objectives. The amount of the reduced share capital is in accordance with the requirements arising from law and the Articles of Association of the Company. Following the decision, the new share capital will amount to EUR 3,600,000, divided into 36,000,000 shares with a nominal value of EUR 0.10 per share;–     The list of shareholders entitled to the payment of share capital shall be fixed on 04.07.2019. at the end of the working day. Ex-date of the rights attached to the shares is 03.07.2019; as of that date, the acquirer is not entitled to receive any reduction in share capital. As of 23 September 2019, Tartu County Court registered the decrease of the share capital to 3 600 thousand EUR according to the resolution of the General Meeting (June 19, 2019). Payment completed on 27.09.2019.Consolidated Statement of Financial Position