Pricewaterhouse has completed the audit for the first half of 2014 of Carbures providing an unqualified report

The company will finish 2014 with a consolidated revenue of around EUR 60 million, a 300 % increase, and expects to comfortably exceed the EUR 100 million in 2015.

- There will be no need for the company from Cádiz to restate the financial statements pertaining to 2013, but merely to update them, according to the auditor.

- The auditor recognizes the validity of the applied accounting method of the transaction with Shenyan Hengrui. However, PwC has recommended to change it. The company accepts the suggestion and will allocate it proportionately over the entire contract period.

- As a consequence of the changes in the statements, the transaction with Ansal will be accounted in 2014.

The connection with Sinatec and Materiable was already included in the statements for the years 2011 and 2012.

Madrid, January 2, 2015 Carbures comes out with clean and clear accounts from the transformation it has been facing since last October, 8. During this time, PricewaterhouseCoopers (PwC) has conducted a full audit on the intermediate consolidated financial statements for the period ended June 30, 2014. This work has been completed with an unqualified report of only fourteen pages, of which the first five are the presentation, disclaimers and the index.

Well, after three months of suspension of trading in its shares as a result of the doubts raised by PwC, the audited statements of the company are far from the worst scenario announced in October: none of the three companies can be considered associated to or controlled by Carbures or its executives or directors. Just one transaction with Ansal, a vendor of carbon fiber structures for civil works projects, and part of the Carbures' cluster of companies, has been transferred from 2013 to 2014, as a result of the changes caused by PwC. In any case, under no circumstances it could be considered an intragroup transaction. The other two companies, Materiable and Sinatec, have been clearly considered part of the Carbures' cluster –as contained in the company's statements for previous years – but, under no circumstances, associated to the company Carbures. The revenue resulting from the transaction with these two companies is absolutely correct. Therefore, after applying the adjustments and transferring the amount of EUR 5.36 million invoiced to Ansal to 2014, Carbures ended 2013 with a revenue of EUR 19.989 million (instead of EUR 25.353 million if we added the Ansal's EUR 5.36 million) and a net profit of EUR 1.969 million (instead of EUR 4.707).

The auditor, PwC, which has not considered necessary to restate the statements, has suggested the company to apply more cautious accounting practices when allocating the revenue, although it recognizes their validity. The company has accepted this suggestion and has changed the accounting practice. This is particularly the case of the contracts with the Chinese company Shenyan Hengrui, for the sale of manufacturing lines for long series of car parts using composite materials. These contracts will bring Carbures revenue of around USD 97 million for the sale of seven RMCP lines, their distribution, as well as the royalties attached to the use of this technology.

The revenue resulting from the royalties contracts will be progressively allocated, according to a more cautious accounting practice, during the duration of the contracts, five years. In this way, these already passed six months out of the sixty months of the contract, will be proportionately allocated. Regarding the sales contract, the company has decided to adopt a conservative criterion, consisting in registering the revenue at the delivery of the product. The company will register the revenue and gross profit resulting from the machinery sales when the machine is delivered and implemented. Each machine will bring Carbures revenue of USD 12.719 million. The delivery schedule will be accomplished during 2015 and, depending on the required specifications, 2016. In addition, it is expected an increase in the orders from Airbus, doubling those foreseen for the year 2014.

These suggestions from the auditor, accepted by the Company, have led the Company to review its revenue and results, resulting in a first half-yearly statements with revenue of EUR 20.228 million, instead of EUR 41.907 million, and a negative EBITDA of EUR 6.067 million for the abovementioned period. This mismatch is mainly caused by the change of the revenue allocation method used for the transaction with Shenyan Hengrui (19 million). The estimate for consolidated revenue in 2014 is set at EUR 58.076 million (compared to the EUR 19.989 of 2013, an almost 300 percent increase), and the one for the losses is set at EUR 9.901 million (compared to the profit of EUR 1.698 million). These deviations are mainly caused by the goodwill impairment and the non-recurring costs which have been incurred as a result of the process to be listed on the Spanish continuous market.

2015: revenue greater than EUR 110 million Finally, as a result of implementing new accounting criteria, the ultimate beneficiary will be the balance sheet of 2015, where the company expects to generate revenue greater than EUR 110 million, with an EBITDA of EUR 12 million, more than 10 percent over revenue. According to Jose María Tarragó, the CEO of Carbures: "even for a fast-growing company, these results are really good. Investors don't need to worry, the company has a clear future: we are professionalizing the management – we have a new CFO, Ignacio Barón‐; our clients trust us – we have been able to triple the size of the company during this year- and we are able to apply our technology to the various sectors of interest."

According to Rafael Contreras, president of Carbures: "all the audit processes have been completed and concluded satisfactorily for the company. I am very satisfied with the work we have been able to perform for every shareholder. The auditor has submitted a thorough report, it has suggested us to change certain criteria when registering the revenue, although it has recognized their validity. We have decided to implement the changes to leave a company completely prepared for the challenges to come, and there are many of them. This process has strengthened Carbures to enter this new phase of consolidation, as evidenced by the fact that we have been able to raise more money during the suspension than during the process to be listed on the MAB."

First part of the audit report

Second part of the audit report