Statement of the Management Board from operations of the Issuer in 2014

Transcription

1 Rovese S.A. Statement of the Management Board from operations of the Issuer in March March 2015 Page ~ 1 ~

2 Introduction Statement of the Management Board on operations of the Issuer for 2014 ("Statement") includes: I. Letter from the Chairman, II. The statement of the Management Board of Rovese S.A. on operations of the Issuer in 2014, including information in the scope specified in the Regulation of the Minister of Finance dated 19 February 2009 on current and periodic information published by issuers of securities and conditions for recognizing information required by law of a non-member state as equivalent. III. Declaration of the Management Board of Rovese S.A. on financial statements and the entity authorized to audit them. IV. Declaration of the Management Board of Rovese S.A. on following principles of corporate governance in 2014 Basic information Rovese Spółka Akcyjna seated in Kielce at al. Solidarności 36 (Rovese S.A., the Company, the Issuer) is the parent entity of Rovese Capital Group. The Company is entered in the commercial register under the number RHB 3458 and the National Court Register under KRS number The Company was established through the transformation of the state enterprise under the name Przedsiębiorstwo Państwowe - Zakłady Wyrobów Sanitarnych "Krasnystaw", as part of Zjednoczenia Przemysłu Szklarskiego i Ceramicznego (Union of the Glass and Ceramic Industry) "Vitrocer" with its seat in Warsaw, into a one-person company of the State Treasury. On 15 January 1992 Przedsiębiorstwo Państwowe Zakłady Wyrobów Sanitarnych "Krasnystaw" was transformed into "Cersanit - Krasnystaw" S.A. In 1996, the process of privatization of the company was begun. According to the decision of the District Court in Chełm, 5th Commercial Department of 7 July 1997, "Cersanit - Krasnystaw" Spółka Akcyjna could use the abbreviated name of "Cersanit" S.A. On 25 May 1998, the Company's shares debuted on the Warsaw Stock Exchange in Warsaw. On 24 October 2011, the Extraordinary General Meeting of Shareholders of the Issuer adopted a resolution to change the company name from "Cersanit" Spółka Akcyjna to "Rovese" Spółka Akcyjna. With effect from 4 January 2012, the Management Board of the Company received the decision of the District Court in Kielce, 10th Commercial Department, under which the above change of the Company was registered. The core business of the Group is the manufacture and distribution of products used for finishing and equipping bathrooms and sanitary: sanitary ware products, ceramic tiles, shower cubicles, acrylic bathtubs and shower trays, bathroom furniture and other products used to equip bathrooms, as well as ceramic tiles for use outside the bathroom. 23 March 2015 Page ~ 2 ~

3 I. Letter from the Chairman of the Management Board of Rovese S.A. To Shareholders, commercial Partners, Customers and Employees of Rovese Capital Group Dear Sir/Madam, In 2014, Rovese S.A. continued the strategy consisting in building a modern and innovative business organization on a European scale, enabling to achieve and maintain a leading position as market leader of comprehensive bathroom solutions and the position of a leading expert in the field of wall and floor ceramic tiles, consequently ensuring long-term, stable growth of the company's value and satisfaction of its Shareholders. As the parent entity of the Capital Group, Rovese S.A. sets the Group's strategy and direction of development. In 2014, the Company achieved sales revenues in the amount of million PLN, recording an increase by 5 percentage points of the gross sales margin in relation to 2013 (the margin amounted to 16% in 2014, and in %). In 2014, EBITDA amounted to million PLN, compared to million PLN in The company ended 2014 with a positive net financial result in the amount of million PLN (in 2013 Rovese S.A. realized a net profit of 22.0 million PLN). The year 2014 was a period of continued growth of the distribution network, in particular on eastern markets and comprehensive measures in the scope of building the organization, including the improvement of operational efficiency and intensification of sales. The commercial activities of Rovese S.A. focused primarily on sales and consistently optimizing the range of offered products. The extensive network of sales channels effectively enables to recognize customer needs and deliver a wide range of finishing products for bathrooms and utility rooms. The recognition and established reputation of our products of the brand CERSANIT and OPOCZNO, the modern manufacturing base, located on strategically important markets for the Group, as well as committed and competent workforce provide a solid basis for realizing the strategy of the Company and Rovese Capital Group. The main objective for the coming years will be the systematic growth of the Company's value. As in previous years, we submit all of our activities to our primary goal - achieving the best possible results, which will guarantee the expected by our Shareholders steady growth in the value of assets and profit dynamics of the Company and Rovese Group... Ireneusz Kazimierski Chairman of the Board of Rovese SA 23 March 2015 Page ~ 3 ~

4 II. 1. Introduction 1.1. Rovese Spółka Akcyjna Rovese S.A. is the largest national supplier of comprehensive bathroom furnishing and ceramic tiles for use outside the bathroom. The Company operates under Rovese Capital Group by distributing products manufactured in dependent manufacturing entities and other commercial goods. Each of the dependent entities manufactures a different range of products. The Group's organization is conducive to, among others, cost savings and enables building a uniform image of the brand CERSANIT and OPOCZNO. The core business of Rovese SA is - wholesale of ceramic, porcelain, metal and glass products for domestic use, wallpaper and cleaning agents: PKD 5144 Z. The parent entity has been issued with: REGON (National Business Register Number): , NIP (National Tax Identification No.): The share capital of the Company amounts to 81,144, PLN (paid in full). As at 31 December 2014, Rovese S.A. as the parent entity of Rovese Capital Group controlled the following dependent entities. Directly dependent entities: Name of entity Seat Subject of operations Direct percentage in control CRTV Limited Cyprus - Nicosia service activities 100% Cersanit Luxembourg S.a.r.l. Luxembourg - Luxembourg holding activities 100% Opoczno Trade Sp. z o.o. Poland Kielce distribution activities 100% Cersanit I Sp. z o.o. - in liquidation Poland - Krasnystaw holding activities 100% Opoczno I Sp. z o.o. Poland - Opoczno production of ceramic tiles 100% Cersanit II S.A. Poland - Starachowice manufacture of bathroom furniture, shower cubicles, acrylic bathtubs and shower trays 99.99% Cersanit III S.A. Poland Wałbrzych production of ceramic tiles 100% Avtis LLC Rovese Rus LLC Frianovo Ceramic Factory LLC Tiles Trading LLC Cersanit Trade LLC S.C. Cersanit Bacau S.R.L. S.C. Cersanit Romania S.A. Russia - Frianovo Russia - Moscow Russia - Frianovo Russia - Moscow Russia - Frianovo Romania - Bacau production and sales of ceramic tiles production and sales of ceramic tiles production and sales of ceramic tiles production and sales of ceramic tiles production and sales of ceramic tiles potential manufacturer of bathroom furnishings 100% 100% 100% 100% 100% 100% Romania - Roman production of sanitary ware 99.76% 23 March 2015 Page ~ 4 ~

5 Rovese Ukraina LLC Ukraine- Kiev distribution activities 100% CERSANIT UK Limited Cersanit Trade Mark Sp. z o.o. Rovese Romania S.R.L. FTF Cersanit Tiles Factory S.R.L Great Britain - London Poland Kielce Romania - Roman Romania - Roman the entity does not conduct operating activities rental of intellectual property and similar products wholesale of building materials and sanitary equipment potential manufacturer of bathroom furnishings 100% 72.64% 99% 99.99% Cersanit Cyprus Limited Cyprus - Nicosia holding activities 0.06% Opoczno RUS LLC Russia - Zheleznodorozhny rental of fixed assets for production of tiles 100% Pilkington's East LLC Russia Syzran rental of fixed assets for production of sanitary ware 100% Syzranska Keramika ZAO Russia Syzran production of sanitary ware 100% Meissen Keramik GmbH Germany Meissen production of tiles 100% Pilkington's Manufacturing Limited Great Britain -Stockport distribution activities 100% Rovese Germany GmbH Germany Berlin distribution activities 100% *The parent entity exercises control over the entity, i.e. it has the power to govern financial and operating policies of the entity under the contract and has the ability to appoint or dismiss the majority of board members. Indirectly dependent entities: Name of entity Seat Subject of operations Cersanit IV Sp. z o.o. CERSANIT INVEST LLC Cersanit Ukraina LLC Poland - Krasnystaw Ukraine - Chyzhivka Ukraine - Chyzhivka production of sanitary ware production of ceramic products potential manufacturer of bathroom furnishings Indirect percentage in control 100% 99.44% 99.43% Cersanit Cyprus Limited Cyprus - Nicosia holding activities 99.94% Bułakovo-2 LLC Cersanit Trade Mark Sp. z o.o. Rovese Romania S.R.L. FTF Cersanit Tiles Factory S.R.L. Kuczinski Keramiczeski Zawod-1 LLC ZAO Angars Russia - Frianovo Poland Kielce Romania - Roman Romania - Roman Russia - Zheleznodorozhny Russia Syzran extraction of minerals from deposits, which are used by Frianovo Ceramic Factory LLC in the manufacture of ceramic tiles rental of intellectual property and similar products wholesale of building materials and sanitary equipment potential manufacturer of bathroom furnishings 100 % 27.36% 0.99% 0.01% production of tiles 99% production of sanitary ware (rental of fixed assets) % Type of relationship entity related to Cersanit I Sp. z o.o. entity related to Cersanit Cyprus Ltd. entity related to Cersanit Invest LLC entity related to Cersanit Luksembourg S.a.r.l entity related to Avtis LLC; 51% of shares is owned by Avtis LLC and 49% of shares is owned by Frianovo Ceramic Factory LLC entity related to Rovese S.A.; 27.36% of shares is held by Opoczno I Sp. z o.o. entity related to Rovese S.A.; 0.99% is held by S.C. Cersanit Romania S.A. entity related to Rovese S.A.; 0.01% is held by S.C. Cersanit Bacau S.R.L. entity related to Opoczno RUS LLC 99% of shares is owned by Pilkington's East LLC and 1% of shares is owned by 23 March 2015 Page ~ 5 ~

6 Syzranska Keramika ZAO Consolidated entities valued using the equity method Name of entity Seat Subject of operations Share EBR Global Services Sp. z o.o. Poland Kielce service activities 45% Non-consolidated entities: Name of entity Seat Subject of operations Percentage in control OMD Sp. z o.o. in liquidation Kopalnia Piasku Kwarcowego Targowyj Dom Syzranska Keramika Grupa Polskie Składy Budowlane SA Poland - Opoczno not active 60.00% Poland - Częstochowa not active 31.00% Russia Syzran distribution activities 100% Poland Busko Zdrój trade activities 0.39% Rovese S.A. has representative offices in Moscow and Kiev. As at 31 December 2014 the company UAB Cersanit Baltic is in liquidation Shareholding structure Shareholders holding as at 31 December 2014, either directly or indirectly through dependent entities, at least 5% of the total number of votes at the General Meeting of Shareholders of the Issuer: Shareholders holding as at 31 December 2014, either directly or indirectly through dependent entities, at least 5% of the total number of votes at the General Meeting of Shareholders of the Issuer: Shareholder Number of shares % of share capital Number of votes % of the total number of votes at the General Meeting of Shareholders Michał Sołowow, including: 790,422, % 790,422, % directly 50,990, % 50,990, % indirectly, by: 739,432, % 739,432, % FTF Galleon S.A. 739,432, % 739,432, % Other shareholders 21,017, % 21,017, % Call for the sale of shares of Rovese S.A. On 13 November 2014, FTF Galleon Societe Anonyme, the joint stock company established and operating under the laws of the Grand Duchy of Luxembourg, registered under number RCS Luxembourg B (Caller 1, FTF Galleon SA) and Mr. Michał Sołowow (Caller 2) announced a call to tender shares of the Issuer (Call). In accordance with the content of the Call, Caller 1 and Caller 2 indicated the intention to acquire, as a result of the Call announced in accordance with art. 91 sec. 6 of the Act of 29 July 2005 on open tenders 23 March 2015 Page ~ 6 ~

7 and conditions of introducing financial instruments to an organized turnover system and on public companies (consolidated text OJ of 2013, item 1382, as amended) all other shares issued by the Issuer, except for shares owned directly by Caller 1 and Caller 2, i.e. 339,224,545 (three hundred and thirtynine million, two hundred and twenty-four thousand, five hundred and forty-five) ordinary bearer shares series A, B, C, D, F, G, H, I of the nominal value of 10 groszy each, admitted to trading on a regulated market operated by the Warsaw Stock Exchange (WSE) in Warsaw, registered in the National Depository for Securities SA (KDPW) and marked with the code PLCRSNT00011 (Shares). One Share entitles to one vote at the General Meeting of the Issuer. All Shares that Caller 1 and Caller 2 intended to acquire through the Call are dematerialized Shares. The Shares subject to the Call were purchased at a price of 1.42 PLN (say: one Zloty 42/100) per Share. On the date of the Call, Caller 2 held directly and indirectly 535,496,864 (say: five hundred and thirtyfive million, four hundred and ninety-six thousand, eight hundred and sixty-four) Shares, entitling to exercise 65.99% of the total number of votes at the General Meeting of Shareholders of the Company, including: directly 50,990,150 (say: fifty million, nine hundred and ninety thousand, one hundred and fifty) Shares, entitling to exercise 6.28% of the total number of votes at the General Meeting of Shareholders of the Issuer and by dependent entities: Caller 1-421,225,464 (say: four hundred and twenty-one million, two hundred and twentyfive thousand, four hundred and sixty-four) Shares, entitling to exercise 51.91% of the total number of votes at the General Meeting of Shareholders of the Issuer Calgeron Investment Limited - 63,281,250 (say: sixty-three million, two hundred and eightyone thousand, two hundred and fifty) Shares, entitling to exercise 7.8% of the total number of votes at the General Meeting of Shareholders of the Issuer. As a result of the Call, Caller 1 and Caller 2 reached 801,423,041 (say: eight hundred and one million, four hundred and twenty-three thousand, forty-one) Shares, entitling to exercise 801,423,041 (say: eight hundred and one million, four hundred and twenty-three thousand, forty-one) votes at the General Meeting of Shareholders of the Issuer, which represents 98.77% of the share capital of the Issuer and the total number of votes at the General Meeting of Shareholders. As at 31 December The sole shareholder of Cersanit I Sp. z o.o. in liquidation is the Issuer The majority shareholder of Cersanit II S.A. is the Issuer, who holds 29,999,998 shares and votes at the General Meeting of Shareholders. The remaining shareholders are two natural persons, together holding two shares and two votes at the General Meeting of Shareholders The sole shareholder of Cersanit III S.A. is the Issuer, holding 90,000,000 shares and votes at the General Meeting of Shareholders The majority shareholder of Cersanit IV Sp. z o.o. is "Cersanit I Sp. z o.o. - in liquidation" holding 99.99% of the share capital and votes at the meeting of shareholders. The remaining shares belong to Rovese S.A The majority shareholder of Cersanit Invest Sp. z o.o. is Cersanit Cyprus Limited holding 99.44% of the capital and votes at the meeting of shareholders. The remaining shares belong to the European Bank for Reconstruction and Development based in London The majority shareholder of Cersanit Ukraina Sp. z o.o. is Cersanit Invest Sp. z o.o., holding 99.43% of the capital and votes at the meeting of shareholders. The minority shareholder is a natural person The sole shareholder of Cersanit Luxembourg S.a.r.l. is the Issuer, holding 100% of the capital and votes at the meeting of shareholders. 23 March 2015 Page ~ 7 ~

8 The majority shareholder of Cersanit Cyprus Limited is Cersanit Luxembourg S.a.r.l., holding 99.94% of the capital and votes at the meeting of shareholders. The remaining shares are owned by the Issuer The sole shareholder of Cersanit UK Limited is the Issuer, holding 100% of the capital and votes at the meeting of shareholders The majority shareholder of S.C. Cersanit Romania S.A. is the Issuer, holding 99.76% of the capital and votes at the meeting of shareholders The sole shareholder of S.C. Cersanit Bacau S.r.l. is the Issuer The sole shareholder of Avtis LLC is the Issuer The sole shareholder of Tiles Trading LLC is the Issuer The sole shareholder of Rovese RUS LLC (former: Cersanit RUS LLC) is the Issuer The sole shareholder of Frianovo Ceramic Factory LLC is the Issuer The majority shareholder of Bulakovo-2 LLC is Avtis LLC holding 51% of shares. The remaining shares belong to Frianovo Ceramic Factory LLC The sole shareholder of CRTV Limited is the Issuer The sole shareholder of LXIV S.a.r.l. is the Issuer The sole shareholder of Opoczno I Sp. z o.o. is the Issuer The sole shareholder of Opoczno Trade Sp. z o.o. in liquidation is the Issuer The sole shareholder of Cersanit Trade LLC seated in Russia (Frianovo) is the Issuer The majority shareholder of Cersanit Trade Mark Sp. z o.o. is the Issuer holding 72.64% of shares. The remaining shares are owned by Opoczno I Sp. z o.o The sole shareholder of Rovese Ukraine LLC (former: Cersanit Trade Ukraina LLC) is the Issuer The sole shareholder of UAB Cersanit Baltic in liquidation is the Issuer The majority shareholder of OMD Sp. z o.o. in liquidation is the Issuer, holding 60% of shares Kopalnia Piasku Kwarcowego "POLKWARC" Sp. z o.o. in liquidation is an associate entity of the Issuer, which holds 31% of shares in the share capital of the company The majority shareholder of FTF Cersanit Tiles Factory S.R.L is the Issuer, holding 99.99% of shares. The remaining shares belong to S.C. Cersanit Bacau SRL The majority shareholder of Rovese Romania SRL (former: Cersanit Trade SRL) with its seat in Romania (Roman) is the Issuer, holding 99% of shares. The remaining shares belong to S.C. Cersanit Romania S.A EBR Global Services Sp. z o.o. is a company in which the Issuer holds 45% of shares. The remaining shares are owned by Echo Investment S.A. and Barlinek S.A. (subsidiaries of Mr. Michał Sołowow). 23 March 2015 Page ~ 8 ~

9 The sole shareholder of Kuczinski Keramiczeski Zawod-1 LLC is the company Opoczno RUS LLC The sole shareholder of Opoczno RUS LLC is the Issuer The sole shareholder of Pilkington's East LLC is the Issuer The sole shareholder of Syzranska Keramika ZAO is the Issuer The sole shareholder of Meissen Keramik GmbH is the Issuer The sole shareholder of Pilkington's Manufacturing Limited is the Issuer The sole shareholder of Targowyj Dom Syzranska Keramika is Syzranska Keramika ZAO The sole shareholder of Rovese Germany GmbH is the Issuer The Issuer has 20% of shares in the company Caolin Sp. z o.o The majority shareholder of ZAO Angars is Pilkington's East, holding 99%, and the remaining 1% is held by ZAO Syzranska Keramika The Issuer has a 0.39% share in the Polskie Składy Budowlane SA Group 2. Discussion of basic economic-financial amounts disclosed in the financial statement Balance sheet - separate data The balance sheet total of the Company as at amounted to 3,167,371 thousand PLN. Assets Fixed assets as at amounted to 1,832,857 thousand PLN and they accounted for 57.9% of the total assets of the Company; long-term financial assets accounted for 78.5% of total fixed assets, goodwill 13.4%, while tangible fixed assets accounted for 3.0% of total fixed assets. Current assets as at amounted to 1,334,514 thousand PLN and accounted for 42.1% of total assets. Short-term financial assets accounted for 78.9% of current assets, short-term receivables 21.0%, while inventories accounted for 0.1% of current assets. Liabilities The Company's equity as at amounted to 1,807,757 thousand PLN; equity accounted for 57.1% of total liabilities. Liabilities and reserves on liabilities amounted to 1,359,614 thousand PLN. Long-term liabilities accounted for 34.7% of liabilities and reserves on total liabilities. Short-term liabilities accounted for 65.3% of total liabilities and reserves on liabilities. Share book value 23 March 2015 Page ~ 9 ~

10 The share book value increased to 2.23 PLN on from 1.57 PLN at the end of Profit and loss account - separate data Net revenue for sales amounted to thousand PLN. The Company noted loss on operating activity in the amount of -88,152 thousand PLN. Gross profit amounted to 527,564 thousand PLN. Net profit amounted to 534,573 thousand PLN. Net profit per share amounted to 0.66 PLN Cash flow account - separate data The year opened with the cash balance of thousand PLN. Net cash flows on operating activities amounted to 169,099 thousand PLN. The following positions had the greatest significance to the above-mentioned cash flows: change in the balance of short-term liabilities, except for loans and credits (173,548 thousand PLN), change in the status of receivables (157,507 thousand PLN) and net interest and dividends (-607,018 thousand PLN). Net cash flows on investment activities amounted to -430,720 thousand PLN. The most important positions in this respect was granting loans (-501,285 thousand PLN), repayment of granted loans (141,816 thousand PLN) and the purchase of shares or stocks, additional payments to the capital of dependent entities (-105,99 thousand PLN). Net cash flows on financial activities amounted to 186,095 thousand PLN. The most important for this group of cash flows were: taking out credits and loans (755,064 thousand PLN) and repayment of loans and credits (-389,434 thousand PLN). Cash flows at the end of the reporting period amounted to 2,876 thousand PLN. 3. Factors and events, including those untypical in nature, with significant impact on economic activity and achieved financial results of the Company in Expected development of the Issuer 3.1. Factors affecting the achieved financial result In 2014, the Company realized sales revenue in the amount of 917,607 thousand PLN and EBITDA (operating profit plus depreciation) in the amount of -53,216 thousand PLN in relation to 985,468 thousand PLN of net sales revenues and -103,214 thousand PLN EBITDA in Profitability of gross profit on sales in 2014 amounted to 16% compared to 11% in In 2014, the Company noted net profit in the amount of 534,573 thousand PLN (in 2013 the Company realized profit in the amount of 22,033 thousand PLN). The above net result was positively affected by dividends received from dependent entities in the total amount of 678,688 thousand PLN. A negative impact on the Eminent's net financial result in 2014 was the change in the level of liabilities for the acquisition of shares in January 2013 in the entities: Meissen Keramik Gmbh, Pilkington s Manufacturing Ltd, Syzranska Keramika ZAO, Pilkington s East LLC oraz Opoczno RUS LLC (the Issuer informed about concluding agreements for the acquisition of shares in the above-mentioned entities, among others, in current reports no. 4/2013 of 11 January 2013 and no. 5/2013 of 17 January 23 March 2015 Page ~ 10 ~

11 2013). On 12 November 2014 Rovese SA concluded with Glemarco Limited and Barcocapital Investment Limited (Seller) an agreement to amend the agreements of purchasing shares in the abovementioned entities (the Issuer informed about concluding agreements in current reports no. 27/2014 of 13 November 2014). As a result of signing the above-mentioned agreements, the remaining liabilities to be paid for the acquisition of the above entities were reduced and the value of shares and stock of these entities by 177,700 thousand PLN (the nominal amount of liabilities amounting to 258,000 thousand PLN was reduced to 80,300 thousand PLN). In view of the fact that the Company showed in the balance sheet the discounted value of liabilities (liabilities as at the date of purchase of the above-mentioned entities were discounted using a discount rate of 12%, as at 1 January 2014 the discounted value of liabilities amounted to 164,667 thousand PLN), at the same time a discount to the above-mentioned liabilities was recorded in the amount of 93,334 thousand PLN, which was shown in the financial costs. The transaction described above had a negative impact on the Issuer's financial result in the amount of thousand PLN. From the area of financial activity, in addition to the above factors, the result was affected by interest mainly connected to the service of debt and exchange rate differences. In 2014 the Issuer's net interest value (revenue interest minus cost interest) amounted to 4,061 thousand PLN, while positive exchange rate differences on balance (surplus of positive exchange rate differences over losses) amounted in 2014 to 23,497 thousand PLN. Moreover, in 2014, the Company showed a negative result on currency futures contracts, concluded in accordance with the Company's strategy to hedge activities against currency risk. The result on derivative transactions settled in 2014 affected the net profit of the Issuer in the amount of minus 31.9 thousand PLN. Transactions settled during this period are forward type transactions. As at Rovese S.A. had outstanding FORWARD type currency transactions, the valuation of which is presented below: Of this to be Of this to be settled settled in 2015 in (in thousands) No. Currency Value of transaction (in thousands) Valuation of transactions as at (thousands P LN) Of this recognize d in equity Of this referred to the financial result 1. GBP/PLN CZK/PLN 11, , TOTAL X X X The total valuation of open (unrealized) derivative transactions as at amounted to -68 thousand PLN. This entire amount has a negative effect on the net result of Other factors affecting the financial result achieved in 2014 are: production and sale of CERSANIT, OPOCZNO and MEISSEN products on individual markets, level of demand for the products offered by the Company and the Group on domestic and foreign markets, economic situation on the construction and installation market and renovation requirements, situation on the financial market and general economic situation in Poland and in other countries where Rovese S.A. operates, realization of the Issuer and the Group's development strategy on new markets, exchange rate changes of the zloty, the Ukrainian hryvnia and the Russian ruble in relation to foreign currencies, mainly to Euro, development of distribution networks, development of assortment of the offered products, valuation of financial assets 3.2. Events affecting the business and financial results of the Issuer 23 March 2015 Page ~ 11 ~

12 In 2014, the Company's priority was to maximize sales volume, allowing to: maintain and expand the Company's share in the European market of bathroom furnishing, build a new image of the product offer of the brands CERSANIT, OPOCZNO, reduce the unit manufacturing cost of products, strengthen the Company's position against its competition. All of these activities, in the opinion of the Management Board of the Issuer, are efforts aiming to build a fast, simple, innovative and modern business organization on a European scale, enabling to gain and maintain the leading position on the market of comprehensive bathroom furnishing, consequently ensuring long-term, stable growth of the company's value and satisfaction of its Shareholders. The commercial activities of the Company in 2014 focused primarily on sales and the consistent optimization of the range of offered products, as well as activities to increase recognition of the brand CERSANIT and OPOCZNO. The Company constantly monitored trends and design development, by participating in exhibitions and fairs. In order to maintain its competitive position on the market, the Company has not limited itself to only introducing new services or product lines, but constantly perfected the series of products through modern technical solutions and by developing new designs tailored to current customer needs and trends on the markets. In 2014, the Issuer's offer was extended to include richly ornamented ceramic and gres tiles, new lines of sanitary ceramics, bathtubs, shower trays and bathroom furniture. All market novelties, like the rest of the Issuer's wide trading offer, are characterized, among others, by high quality and performance value. Annexes to credit agreements concluded with Raiffeisen Bank Polska SA On 26 March 2014, between the Issuer and Raiffeisen Bank Polska S.A. (the Bank) with its seat in Warsaw, an annex was signed to the agreement on the debt limit of 4 February 1998 (as amended), on the basis of which the Bank increased the credit limit amount from 50 million PLN to 100 million PLN. As a result of signing this annex, as of 26 March 2014 the agreement on the debt limit of 30 January 2012 expired, which was concluded between the Issuer and the Bank for the amount of 50 million PLN, of which the Issuer informed, among others, in current report no. 17/2013 of 15 April Thus, the credit limit granted under the credit agreement of 30 January 2012 was replaced by the credit limit increased by 50 million PLN, granted under the credit agreement of 4 February 1998 (as amended). According to the signed annexes, the parties decided to extend the deadline for repayment of these credits until 30 September 2014, provided that: this deadline is reduced to 7 April 2014 in the case of non-renewal by the consortium of banks: Bank Polska Kasa Opieki S.A., BNP Paribas Bank Polska S.A., RBS Bank Polska S.A. of the maturity of the consortium credit granted to Rovese S.A. and Opoczno I Sp. z o.o. for 150 million PLN (Consortium Credit), with the currently binding repayment date falling on 31 March 2014 (the Issuer informed about the Consortium Credit among others in current report no. 11/2011 of 31 March 2011), or this deadline falls on the date specified as the date of repayment of the Consortium Credit, in the case of extending the Consortium Credit until the date falling before 30 September The Issuer's Management Board mentions that in connection with determining on 31 March 2014 a new repayment date of the Consortium Credit, the repayment date of the above-mentioned credits falls on 30 May March 2015 Page ~ 12 ~

13 On 9 May the above-mentioned credits granted by Raiffeisen Bank were repaid from funds obtained from the credit granted under the agreement signed on 25 April 2015 for the amount of 720 million PLN (see point 3.2 of this statement). Annex to the multipurpose facility agreement (Consortium Credit) for the amount of 150 million PLN On 31 March 2014, between the Issuer, Opoczno I Sp. z o.o. (entity related to the Issuer; hereinafter "Opoczno I"), Cersanit Trade Mark Sp. z o.o. (dependent entity of the Issuer; hereinafter "Cersanit Trade Mark") and RBS Bank (Poland) S.A., Bank Polska Kasa Opieki S.A. and BNP Paribas Polska S.A., an annex was signed to the multipurpose facility agreement ( 150,000,000 PLN Multipurpose Facility Agreement) of 15 February 2008 (as amended) concluded by the Issuer, Opoczno I, Cersanit Trade Mark and RBS Bank (Poland) S.A. (previous name: ABN AMRO Bank (Polska) S.A.), Bank Polska Kasa Opieki S.A. and BNP Paribas Polska SA (previous name: Fortis Bank Polska S.A.), (hereinafter Consortium Credit). On the basis of the annex, the repayment date of the Consortium Credit was extended to 30 May On 9 May the above-mentioned credit was repaid from funds obtained from the credit granted under the agreement signed on 25 April 2015 for the amount of 720 million PLN (see point 3.2 of this statement). Conclusion of a significant agreement On 28 April 2014, the Issuer received a credit agreement concluded between the Issuer, Opoczno I Sp. z o.o. (entity related to the Issuer; hereinafter "Opoczno I"), Cersanit II S.A. (entity related to the Issuer; hereinafter "Cersanit II"), Cersanit III S.A. (entity related to the Issuer; hereinafter "Cersanit III"), Cersanit IV Sp. z o.o. (entity related to the Issuer; hereinafter "Cersanit IV"), Cersanit Trade Mark Sp. z o.o. (entity related to the Issuer; hereinafter "Cersanit Trade Mark") and the Bank Polska Kasa Opieki S.A. (hereinafter PeKaO ), BNP Paribas Polska S.A. (hereinafter BNP ), Bank Zachodni WBK S.A. (hereinafter BZ WBK ) and ING Bank Śląski S.A. (hereinafter "ING") (hereinafter jointly "Creditors") on 25 April 2014 (hereinafter "Credit Agreement"). On the basis of the Credit Agreement, the Creditors shall provide financing to the amount of 720 million PLN (hereinafter "Credit") to the following entities: Rovese S.A., Opoczno I, Cersanit II, Cersanit III, Cersanit IV (hereinafter jointly "Borrowers"). The above Credit amount consists of: tranche in the amount of 320,000,000 PLN granted in the form of a non-revolving term credit, repayable in equal quarterly installments of capital until 25 April 2019; the tranche is free to use in EUR (hereinafter "Tranche A"), tranche in the amount of 177,777,777 PLN granted in the form of non-revolving term credit with the final repayment date on 25 April 2019; the tranche is to be used in PLN (hereinafter "Tranche B"), tranche in the amount of 222,222,223 PLN granted in the form of multipurpose facility credit, multicurrency, to be used in the form of an overdraft, tranches, bank guarantees and letters of credit (hereinafter "Tranche C") with a final maturity date of 25 April 2016; under Tranche C the Creditors shall provide Borrowers with current credits based on bilateral credit agreements signed, which define, among others, pricing conditions, currency of using the limit. This Credit will be used to repay credits granted to Rovese Group on the basis of the following agreements: 23 March 2015 Page ~ 13 ~

14 1) multipurpose facility agreement ( 150,000,000 PLN Multipurpose Facility Agreement) of 15 February 2008 (as amended) concluded by the Issuer, Opoczno I, Cersanit Trade Mark, ABN AMRO Bank (Poland) S.A. (present name: RBS Bank (Poland) S.A.), PeKaO and Fortis Bank Polska S.A., present name BNP Paribas Polska S.A.), under which the credit was granted for an amount of up to 150,000,000 PLN, 2) facility agreement ( 279,000,000 PLN Facility Agreement) of 15 February 2008 (as amended) concluded by the Issuer, Cersanit Trade Mark, ABN AMRO Bank (Poland) S.A. (present name: RBS Bank (Polska) S.A.), PeKaO and Fortis Bank Polska S.A. (present name BNP Paribas Polska S.A.), under which the credit was granted for the amount of 279,000,000 PLN, 3) facility agreement of 16 April 2008 (as amended) concluded by the Issuer, Cersanit III, LXIV Sarl (dependent entity of the Issuer), PeKaO, BZ WBK and BAWAG Bank P.S.K., under which the credit was granted for the amount of 100,000,000 EUR, 4) multi-purpose facility agreement of 15 February 2008 (as amended) concluded by the Issuer and BNP, under which the credit was granted for an amount of up to 105,000,000 PLN, 5) multi-purpose multi-currency facility agreement of 29 June 2007 (as amended) concluded by the Issuer and PeKaO, under which the credit was granted for an amount of up to 85,000,000 PLN, 6) multi-purpose multi-currency facility agreement of 29 June 2007 (as amended) concluded by Cersanit III and PeKaO, under which the loan was granted for an amount of up to 15,000,000 PLN, 7) debt limit agreement of 4 February 1998 (as amended) concluded by the Issuer and Raiffeisen Bank Polska S.A., under which the loan was granted for an amount of up to 100,000,000 PLN, 8) debt limit agreement of 14 December 2007 (as amended) concluded by Cersanit IV and Raiffeisen Bank Polska S.A., under which the credit was granted for an amount of up to 20,000,000 PLN, 9) debt limit agreement of 19 December 2002 (as amended) concluded by Cersanit II and Raiffeisen Bank Polska S.A., under which the loan was granted for an amount of up to 5,000,000 PLN, 10) debt limit agreement of 3 August 2004 (as amended) concluded by Cersanit II and Raiffeisen Bank Polska S.A., under which the credit was granted for an amount of up to 5,000,000 PLN. The Facility Agreement provides for the establishment of the following repayment security of the Credit: mortgages on real properties owned by the Borrowers, registered pledges on aggregate assets belonging to the Borrowers, registered pledge on the protection rights on the trademarks Cersanit and Opoczno, registered and financial pledges on debts from bank accounts belonging to the Borrowers, registered and financial pledges on shares of Opoczno I, Cersanit IV and shares of Cersanit III and Cersanit II, transfer of rights for protection on debts from commercial contracts, transfer of rights for protection on property insurance policies, transfer of rights for protection on debts for the repayment of loans granted by the Borrowers to entities of Rovese Group which are not Borrowers, warranties of the Issuer's dependent entities: Meissen Keramik GmbH (hereinafter: Meissen Keramik ), Rovese Romania S.R.L. (hereinafter: Rovese Romania ), S.C. Cersanit Romania SA (hereinafter Cersanit Romania ), 23 March 2015 Page ~ 14 ~

15 statement of submission to execution of Borrowers, Meissen Keramik, Rovese Romania and Cersanit Romania for each of the Creditors issued pursuant to art. 97 of the banking law. The interest rate on the Credit was determined as a variable rate, based on: EURIBOR rate for the Credit (or part thereof) granted in EUR, WIBOR rate for the Credit (or part thereof) granted in PLN, plus a margin. The above agreement was considered significant on the basis of equity criteria of Rovese S.A. Change of significant agreements On 9 May 2014, as a result of initiating the credit, of which the Issuer informed in current report no. 5/2014 on 28 April 2014, credits granted based on the following agreements were repaid: 1) multipurpose facility agreement ( 150,000,000 PLN Multipurpose Facility Agreement) of 15 February 2008 (as amended) concluded by the Issuer, Opoczno I, Cersanit Trade Mark, ABN AMRO Bank (Poland) S.A. (present name: RBS Bank (Poland) S.A.), PeKaO and Fortis Bank Polska S.A., present name BNP Paribas Polska S.A.), under which the credit was granted for an amount of up to 150,000,000 PLN, 2) facility agreement ( 279,000,000 PLN Facility Agreement) of 15 February 2008 (as amended) concluded by the Issuer, Cersanit Trade Mark, ABN AMRO Bank (Poland) S.A. (present name: RBS Bank (Polska) S.A.), PeKaO and Fortis Bank Polska S.A. (present name BNP Paribas Polska S.A.), under which the credit was granted for the amount of 279,000,000 PLN, 3) facility agreement of 16 April 2008 (as amended) concluded by the Issuer, Cersanit III, LXIV Sarl (dependent entity of the Issuer), PeKaO, BZ WBK and BAWAG Bank P.S.K., under which the credit was granted for the amount of 100,000,000 EUR, 4) multi-purpose facility agreement of 15 February 2008 (as amended) concluded by the Issuer and BNP, under which the credit was granted for an amount of up to 105,000,000 PLN, 5) multi-purpose multi-currency facility agreement of 29 June 2007 (as amended) concluded by the Issuer and PeKaO, under which the credit was granted for an amount of up to 85,000,000 PLN, 6) debt limit agreement of 4 February 1998 (as amended) concluded by the Issuer and Raiffeisen Bank Polska S.A., under which the loan was granted for an amount of up to 100,000,000 PLN. In connection with the repayment of credits, these agreements expired and there was a release of securities of the above credit agreements. With the initiation of cash based on the new credit agreement, Rovese Capital Group acquired as part of the consortium of banks: Bank Polska Kasa Opieki S.A., BNP Paribas Polska S.A., Bank Zachodni WBK S.A. and ING Bank Śląski S.A., stable and long-term financing of the current operating activities and security of financial services of the realized investment projects. Establishing securities of the credit agreement 720 million PLN 1. On 14 May 2014 the Issuer acquired information about the signing of the following agreements and documents on the basis of which securities will or were established for the repayment of the credit granted to the amount of 720,000, PLN (hereinafter "Credit"), about which the Issuer informed in current report no. 5/2014 on 28 April 2014: 1) agreement on the registered pledge and financial pledges on shares of Cersanit II S.A. (dependent entity of the Issuer) concluded on 5 May 2014 between Rovese as the pledger and the Bank Polska Kasa Opieki S.A. as the administrator of the registered pledge and the pledgee of the financial 23 March 2015 Page ~ 15 ~

16 pledge and Bank Zachodni WBK S.A., BNP Paribas Bank Polska S.A. and ING Bank Śląski S.A. as pledgees of financial pledges, according to which: a) Rovese established financial pledges for Bank Polska Kasa Opieki S.A., Bank Zachodni WBK S.A., BNP Paribas Bank Polska S.A. and ING Bank Śląski S.A. for all the shares held in Cersanit II S.A. i.e. of 29,999,998 bearer shares with a nominal value of 1 PLN each, constituting 99,99% of the share capital of Cersanit II S.A. and entitling to 99,99% of the total number of votes; b) at the time of registration in the Register of Pledges, Rovese shall establish a registered pledge on the above-mentioned shares for Bank Polska Kasa Opieki S.A. acting as the pledge administrator; 2) agreement on the registered pledge and financial pledges on shares of Cersanit III S.A. (dependent entity of the Issuer) concluded on 5 May 2014 between Rovese as the pledger and the Bank Polska Kasa Opieki S.A. as the administrator of the registered pledge and the pledgee of the financial pledge and Bank Zachodni WBK S.A., BNP Paribas Bank Polska S.A. and ING Bank Śląski S.A. as pledgees of financial pledges, according to which: (a) Rovese established financial pledges for Bank Polska Kasa Opieki S.A., Bank Zachodni WBK S.A., BNP Paribas Bank Polska S.A. and ING Bank Śląski S.A. for all the shares held in Cersanit III S.A. i.e. of 90,000,000 bearer shares with a nominal value of 1 PLN each, constituting 100,00% of the share capital of Cersanit III S.A. and entitling to 100,00% of the total number of votes; (b) at the time of registration in the Register of Pledges, Rovese shall establish a registered pledge on the above-mentioned shares for Bank Polska Kasa Opieki S.A. acting as the pledge administrator; 3) agreement on the registered pledge and financial pledges on shares of Cersanit IV Sp. z o.o. (dependent entity of the Issuer) concluded on 5 May 2014 between Rovese as the pledger and the Bank Polska Kasa Opieki S.A. as the administrator of the registered pledge and the pledgee of the financial pledge and Bank Zachodni WBK S.A., BNP Paribas Bank Polska S.A. and ING Bank Śląski S.A. as pledgees of financial pledges, according to which: (a) Rovese established financial pledges for Bank Polska Kasa Opieki S.A., Bank Zachodni WBK S.A., BNP Paribas Bank Polska S.A. and ING Bank Śląski S.A. for one share held by it in Cersanit IV Sp. z o.o., with a nominal value of 50 PLN each, constituting % of the share capital of Cersanit IV Sp. z o.o. and entitling to % of the total number of votes; (b) at the time of registration in the Register of Pledges, Rovese shall establish a registered pledge on the above-mentioned share for Bank Polska Kasa Opieki S.A. acting as the pledge administrator; 4) agreement on the registered pledge and financial pledges on shares of Cersanit IV Sp. z o.o. (dependent entity of the Issuer) concluded on 5 May 2014 between Cersanit I Sp. z o.o. (dependent entity of the Issuer) as the pledger and the Bank Polska Kasa Opieki S.A. as the administrator of the registered pledge and the pledgee of the financial pledge and Bank Zachodni WBK S.A., BNP Paribas Bank Polska S.A. and ING Bank Śląski S.A. as pledgees of financial pledges, according to which: (a) Cersanit I Sp. z o.o. established financial pledges for Bank Polska Kasa Opieki S.A., Bank Zachodni WBK S.A., BNP Paribas Bank Polska S.A. and ING Bank Śląski S.A. for all the shares held by it in Cersanit IV Sp. z o.o., i.e. of 8,058,829 shares, with a nominal value of 50 PLN each, constituting 99.99% of the share capital of Cersanit IV Sp. z o.o. and entitling to 99.99% of the total number of votes; (b) at the time of registration in the Register of Pledges, Opoczno I sp. z o.o. shall establish a registered pledge on the above-mentioned shares for Bank Polska Kasa Opieki S.A. acting as the pledge administrator; 5) agreement on the registered pledge and financial pledges on shares of Opoczno I Sp. z o.o. (dependent entity of the Issuer) concluded on 5 May 2014 between Rovese as the pledger and the 23 March 2015 Page ~ 16 ~

17 Bank Polska Kasa Opieki S.A. as the administrator of the registered pledge and the pledgee of the financial pledge and Bank Zachodni WBK S.A., BNP Paribas Bank Polska S.A. and ING Bank Śląski S.A. as pledgees of financial pledges, according to which: (a) Rovese established financial pledges for Bank Polska Kasa Opieki S.A., Bank Zachodni WBK S.A., BNP Paribas Bank Polska S.A. and ING Bank Śląski S.A. for all the shares held by it in Opoczno I Sp. z o.o., i.e. of 5,433 shares, with a nominal value of 50 PLN each, constituting % of the share capital of Opoczno I Sp. z o.o. and entitling to % of the total number of votes; (b) at the time of registration in the Register of Pledges, Rovese S.A. shall establish a registered pledge on the above-mentioned shares for Bank Polska Kasa Opieki S.A. acting as the pledge administrator; 6) agreement on the registered pledge and financial pledges on shares of Cersanit Trade Mark Sp. z o.o. (dependent entity of the Issuer) concluded on 5 May 2014 between Rovese S.A. as the pledger and the Bank Polska Kasa Opieki S.A. as the administrator of the registered pledge and the pledgee of the financial pledge and Bank Zachodni WBK S.A., BNP Paribas Bank Polska S.A. and ING Bank Śląski S.A. as pledgees of financial pledges, according to which: (a) Rovese established financial pledges for Bank Polska Kasa Opieki S.A., Bank Zachodni WBK S.A., BNP Paribas Bank Polska S.A. and ING Bank Śląski S.A. for all the shares held by it in Cersanit Trade Mark Sp. z o.o., i.e. of 10,113,461 shares, with a nominal value of 50 PLN each, constituting 72.64% of the share capital of Cersanit Trade Mark Sp. z o.o. and entitling to 72.64% of the total number of votes; (b) at the time of registration in the Register of Pledges, Rovese shall establish a registered pledge on the above-mentioned shares for Bank Polska Kasa Opieki S.A. acting as the pledge administrator; 7) agreement on the registered pledge and financial pledges on shares of Cersanit Trade Mark Sp. z o.o. (dependent entity of the Issuer) concluded on 5 May 2014 between Opoczno I sp. z o.o. as the pledger and the Bank Polska Kasa Opieki S.A. as the administrator of the registered pledge and the pledgee of the financial pledge and Bank Zachodni WBK S.A., BNP Paribas Bank Polska S.A. and ING Bank Śląski S.A. as pledgees of financial pledges, according to which: (a) Opoczno I Sp. z o.o. established financial pledges for Bank Polska Kasa Opieki S.A., Bank Zachodni WBK S.A., BNP Paribas Bank Polska S.A. and ING Bank Śląski S.A. for all the shares held by it in Cersanit Trade Mark Sp. z o.o., i.e. of 3,810,182 shares, with a nominal value of 50 PLN each, constituting 27.36% of the share capital of Cersanit Trade Mark Sp. z o.o. and entitling to 27.36% of the total number of votes; (b) at the time of registration in the Register of Pledges, Opoczno I sp. z o.o shall establish a registered pledge on the above-mentioned shares for Bank Polska Kasa Opieki S.A. acting as the pledge administrator; 8) agreement on the registered pledge on the collection of assets representing an organizational whole and incorporated in the company Cersanit II S.A. (dependent entity of the Issuer) concluded on 5 May 2014 between Cersanit II SA as pledger, and Bank Polska Kasa Opieki S.A. as the administrator of the registered pledge; 9) agreement on the registered pledge on the collection of assets representing an organizational whole and incorporated in the company Cersanit III S.A. (dependent entity of the Issuer) concluded on 5 May 2014 between Cersanit III SA as pledger, and Bank Polska Kasa Opieki S.A. as the administrator of the registered pledge; 10) agreement on the registered pledge on the collection of assets representing an organizational whole and incorporated in the company Cersanit IV sp. z o.o. (dependent entity of the Issuer) concluded on 5 May 2014 between Cersanit IV sp. z o.o. as pledger, and Bank Polska Kasa Opieki S.A. as the administrator of the registered pledge; 23 March 2015 Page ~ 17 ~

18 11) agreement on the registered pledge on the collection of assets representing an organizational whole and incorporated in the company Opoczno I Sp. z o.o. (dependent entity of the Issuer) concluded on 5 May 2014 between Opoczno I sp. z o.o. as pledger, and Bank Polska Kasa Opieki S.A. as the administrator of the registered pledge; 12) agreement on the registered pledge on the collection of assets representing an organizational whole and incorporated in the company Rovese S.A. (dependent entity of the Issuer) concluded on 5 May 2014 between Rovese S.A. as pledger, and Bank Polska Kasa Opieki S.A. as the administrator of the registered pledge; 13) agreements on the registered pledge and financial pledges on debts from all bank accounts held by Cersanit II S.A. (dependent entity of the Issuer) concluded on 5 and 8 May 2014 between Cersanit II S.A. as the pledger and the Bank Polska Kasa Opieki S.A. as the administrator of the registered pledges and the pledgee of the financial pledges and Bank Zachodni WBK S.A., BNP Paribas Bank Polska S.A. and ING Bank Śląski S.A. as pledgees of financial pledges; 14) agreements on the registered pledge and financial pledges on debts from all bank accounts held by Cersanit III S.A. (dependent entity of the Issuer) concluded on 5 and 8 May 2014 between Cersanit III S.A. as the pledger and the Bank Polska Kasa Opieki S.A. as the administrator of the registered pledges and the pledgee of the financial pledges and Bank Zachodni WBK S.A., BNP Paribas Bank Polska S.A. and ING Bank Śląski S.A. as pledgees of financial pledges; 15) agreements on the registered pledge and financial pledges on debts from all bank accounts held by Cersanit IV sp. z o.o. (dependent entity of the Issuer) concluded on 5 and 8 May 2014 between Cersanit IV sp. z o.o. as the pledger and the Bank Polska Kasa Opieki S.A. as the administrator of the registered pledges and the pledgee of the financial pledges and Bank Zachodni WBK S.A., BNP Paribas Bank Polska S.A. and ING Bank Śląski S.A. as pledgees of financial pledges; 16) agreements on the registered pledge and financial pledges on debts from all bank accounts held by Opoczno I sp. z o.o. (dependent entity of the Issuer) concluded on 5 and 8 May 2014 between Opoczno I sp. z o.o. as the pledger and the Bank Polska Kasa Opieki S.A. as the administrator of the registered pledges and the pledgee of the financial pledges and Bank Zachodni WBK S.A., BNP Paribas Bank Polska S.A. and ING Bank Śląski S.A. as pledgees of financial pledges; 17) agreement on the registered pledge and financial pledges on debts from all bank accounts held by Cersanit Trade Mark Sp. z o.o. concluded on 5 May 2014 between Cersanit Trade Mark Sp. z o.o. as the pledger and the Bank Polska Kasa Opieki S.A. as the administrator of the registered pledges and the pledgee of the financial pledges and Bank Zachodni WBK S.A., BNP Paribas Bank Polska S.A. and ING Bank Śląski S.A. as pledgees of financial pledges; 18) agreement on the registered pledge and financial pledges on debts from all bank accounts held by Rovese concluded on 5 May 2014 between Rovese as the pledger and the Bank Polska Kasa Opieki S.A. as the administrator of the registered pledges and the pledgee of the financial pledges and Bank Zachodni WBK S.A., BNP Paribas Bank Polska S.A. and ING Bank Śląski S.A. as pledgees of financial pledges; 19) agreement on the registered pledge on the protection rights on the trademarks "Cersanit" and "Opoczno" concluded on 5 May 2014 between Cersanit Trade Mark Sp. z o.o. as pledger, and Bank Polska Kasa Opieki S.A. as the administrator of the registered pledges; 20) agreement on the registered pledge on the collection covering protection rights on the trademarks associated with names of product collections "Cersanit" and "Opoczno" concluded on 7 May 2014 between Cersanit Trade Mark Sp. z o.o. as pledger, and Bank Polska Kasa Opieki S.A. as the administrator of the registered pledges; 23 March 2015 Page ~ 18 ~

19 21) warranty agreement concluded on 5 May 2014, between Meissen Keramik GmbH (dependent entity of the Issuer) as guarantor, and the Bank Polska Kasa Opieki S.A. under which the guarantor guaranteed the repayment of the Credit to the amount of 720 million PLN in the period up to the date of repayment of the Credit, while no later than 25 April 2022; 22) warranty agreement concluded on 5 May 2014, between Cersanit Romania SA (dependent entity of the Issuer) as guarantor, and the Bank Polska Kasa Opieki S.A. under which the guarantor guaranteed the repayment of the Credit to the amount of 720,000,000 PLN in the period up to the date of repayment of the Credit, while no later than 25 April 2022; 23) warranty agreement concluded on 5 May 2014, between Rovese Romania SA (dependent entity of the Issuer) as guarantor, and the Bank Polska Kasa Opieki S.A. under which the guarantor guaranteed the repayment of the Credit to the amount of 720,000,000 PLN in the period up to the date of repayment of the Credit, while no later than 25 April 2022; 24) warranty agreements concluded on 5 May 2014 between Cersanit I Sp. z o.o. (dependent entity of the Issuer) as guarantor, and the Bank Polska Kasa Opieki S.A. under which the guarantor guaranteed the repayment of the Credit to the amount of 720,000,000 PLN in the period up to the date of repayment of the Credit, while no later than 25 April 2022; 25) statements of Opoczno I Sp. z o.o. submitted on 5 May 2014 on establishing a contractual joint mortgage covering all properties belonging to Opoczno I Sp. z o.o., under which, upon entry into the relevant land registers, the above-mentioned joint contractual mortgage will be established for Bank Polska Kasa Opieki S.A. acting as the administrator of the mortgage; 26) statements of Cersanit II S.A. submitted on 5 May 2014 on establishing a contractual joint mortgage covering all properties belonging to Cersanit II S.A., under which, upon entry into the relevant land registers, the above-mentioned joint contractual mortgage will be established for Bank Polska Kasa Opieki S.A. acting as the administrator of the mortgage; 27) statements of Cersanit III S.A. submitted on 5 May 2014 on establishing a contractual joint mortgage covering all properties belonging to Cersanit III S.A., under which, upon entry into the relevant land registers, the above-mentioned joint contractual mortgage will be established for Bank Polska Kasa Opieki S.A. acting as the administrator of the mortgage; 28) statements of Cersanit IV Sp. z o.o. submitted on 5 May 2014 on establishing a contractual joint mortgage covering all properties belonging to Cersanit IV Sp. z o.o., under which, upon entry into the relevant land registers, the above-mentioned joint contractual mortgage will be established for Bank Polska Kasa Opieki S.A. acting as the administrator of the mortgage. Establishing securities of the credit agreement for the amount of 720 million PLN - registered pledges 1. On 23 May 2014, the Issuer received a court decision on establishing for Bank Polska Kasa Opieki S.A. with its seat in Warsaw a registered pledge on the collection of rights and assets of the dependent entity of the Issuer, the company Cersanit III S.A. with its seat in Wałbrzych. 2. On 26 May 2014 the District Court for Łódź-Śródmieście in Łódź 15th Commercial Department - Register of Pledges established for Bank Polska Kasa Opieki S.A. with its seat in Warsaw, a registered pledge on 3,810,182 shares of the company Cersanit Trade Mark Sp. z o.o. with its seat in Kielce (dependent entity of the Issuer), owned by the company Opoczno I Sp. z o.o. with its seat in Opoczno (dependent entity of the Issuer). The nominal value of one share is 50 PLN. 23 March 2015 Page ~ 19 ~

20 3. On 2 June 2014, the Issuer received a court decision on establishing for Bank Polska Kasa Opieki S.A. with its seat in Warsaw a registered pledge on the collection of rights and assets of the dependent entity of the Issuer, the company Opoczno I Sp. z o.o. with its seat in Opoczno. 4. On 10 June 2014 the District Court for Kraków-Śródmieście in Kraków 7th Commercial Department - Register of Pledges established for Bank Polska Kasa Opieki S.A. with its seat in Warsaw, a registered pledge on 1 share of the company Cersanit IV Sp. z o.o. with its seat in Kielce (dependent entity of the Issuer), owned by the Issuer. The nominal value of one share is 50 PLN. 5. On 13 June 2014, the Issuer received a court decision on establishing on 5 June 2014 for Bank Polska Kasa Opieki S.A. with its seat in Warsaw a registered pledge on 8,058,829 shares of the company Cersanit IV Sp. z o.o. (dependent entity of the Issuer), owned by the company Cersanit I Sp. z o.o. with its seat in Krasnystaw (see point 4 of current report No. 9/2014 of 15 May 2014). The shares represent 99.99% of the share capital of Cersanit IV Sp. z o.o. and carry 99.99% of the total number of votes. The nominal value of one share is 50 PLN. The shares are a long-term capital investment of Cersanit I Sp. z o.o. 6. On 26 June 2014 the District Court for Kraków-Śródmieście in Kraków 7th Commercial Department - Register of Pledges established for Bank Polska Kasa Opieki S.A. with its seat in Warsaw, a registered pledge on 29,999,998 shares of the company Cersanit II S.A. with its seat in Starachowice (dependent entity of the Issuer), owned by the Issuer. The nominal value of one share is 1 PLN. 7. On 30 June 2014, the Issuer received a court decision on establishing on13 June 2014 for Bank Polska Kasa Opieki S.A. with its seat in Warsaw a registered pledge on 90,000,000 shares of the company Cersanit III S.A. (subsidiary of the Issuer). The shares represent 100% of the share capital of Cersanit III S.A. and carry 100% in total number of votes. The nominal value of one share is 1 PLN. The shares are a long-term capital investment of the Issuer. 8. On 14 July 2014, the District Court for Kraków-Śródmieście in Kraków, Department of the 7th Register of Pledges made an entry in the Register of Pledges, of the pledge on: - on the collection of rights and assets representing an organizational whole and incorporated in the company Rovese SA. - on the collection of rights and assets representing an organizational whole and incorporated in the company Cersanit II S.A. 9. On 15 July 2014, the District Court in Zamość, 12th Branch Division of Land and Mortgage Register seated in Krasnystaw, made an entry of joint contractual mortgages to the amount of 1,440,000, PLN for the Bank Polska Kasa Opieki S.A. seated in Warsaw on land properties with a total area of ha located in Krasnystaw, which perpetual user is the company Cersanit IV Sp. z o.o. and on the buildings situated on this land constituting separate ownership of the company Cersanit IV Sp. z o.o. 10. On 30 July 2014, the Issuer received a court decision on establishing on 22 July 2014 for Bank Polska Kasa Opieki S.A. with its seat in Warsaw a registered pledge on the collection of rights and assets representing the organizational whole and incorporated in the company of Cersanit IV Sp. z o.o. with its seat in Krasnystaw - a dependent entity of the Issuer. 11. On 7 August 2014, the Issuer received a court decision on establishing on17 June 2014 for Bank Polska Kasa Opieki S.A. with its seat in Warsaw a registered pledge for: 23 March 2015 Page ~ 20 ~