Pursuant to Article 11 of the Transparency Requirements Law 2007, we submit the Interim Management Statement for the period from the end of the first half of 2013 to date, which has not been audited by the external auditors of the Group.

Interim Management Statement

During period, the Group continued with the same activities as last year and the first half of 2013. The main events and developments that took place during the period and the impacts on the Group’s financial statements are stated below:

The turnover and the gross profit of the Group during the period compared to the corresponding period of 2012 fell 7.6% due to the general condition of the market as a result of the economic recession.

From 1/7/2013, the Group’s company Handy Snacks Ltd took over the distribution and sale of the well-known Bakandy’s products from Thamira Food Manufacturers Ltd, a rational expansion of the Group’s activities to a sector that falls under its know-how and skills.  This is expected to increase the Group’s turnover and profitability, especially in the last months of 2013.

On 30/9/2013, the Company finalized the acquisition of the industrial unit and trademark of MON AMI products from Evrika Ltd, as announced to the CSE on November 24, 2013.  This is expected to affect positively the turnover and the profitability of the Group mostly in 2014.

Frou-Frou Group seems that it will maintain the economic data of 2012 with difficulty, despite the deterioration of the Cypriot economy, however, the Management still believes that its results are not satisfactory as its profitability is lower than that of 2010 and 2011.

In the second half of 2013, more measures to reduce expenses in all departments of the Group have been taken.  The Management will continue efforts to increase its sales and profitability so that the results for 2013 are at the same level as those of 2012 (excluding the non-recurrent decreases in the value of investments).  The huge liquidity problems in the market, the weakness of our banking system to meet the needs of the Cypriot businesses and the fact that no satisfactory measures for the revival of the economy have been taken yet, make this target difficult and uncertain.